Planning is the key to the success of any business, no matter its size or age but it’s said that many small to medium-sized businesses don’t have a plan of any kind.
What is a Strategic Plan?
The strategic plan sets out:
- the company’s direction and priorities;
- its main operating and financial targets,
- the actions it will take to achieve those objectives,
- the new initiatives and investments planned, and
- their impact on the company’s performance.
Nearly a fifth of SMEs say they prefer to keep plans in their head, according to research by Close Brothers Asset Finance. Mike Randall, CEO of Close Brothers Asset Finance, says, “It’s concerning that so many small and medium sized firms do not have a strategic business plan. Without clear direction, they may be missing out on opportunities for growth and not realising their full potential.”
A formal plan is an extremely valuable tool for managing and growing a business as it:
- clearly communicates the company’s priorities
- ensures all key staff are working towards common goals
- sets the focus on key objectives
- delegates actions and accountabilities amongst employees
- ensures that decisions made will benefit the long-term company goals
- allows a company to recognise its strengths and weaknesses.
Failing to plan is like planning to fail
Strategic Planning is an area SMEs should be focusing on. Furthermore, a plan is only useful if it is reviewed regularly to ensure it meets the current and future needs of the business. It’s vital business owners regularly review their financial strategy to ensure they have the right funding in place to meet the needs of their business, at its current stage of the business lifecycle.
Most CEOs and MDs simply don’t have the time to spend on quality strategic thinking and to document and communicate that thinking in a way which allows the whole business to buy into the vision. Harder still is managing and implementing the business plan. Significant strategic course corrections are commonplace in fast-growing companies. These should be embraced. The tricky part though is in managing regular change. That requires a combination of time and specialist knowledge.
There is an art and science to effective business planning. Getting it right brings a real sense of clarity and direction to a business. This is where an experienced part-time CFO can make a significant contribution.
There is an art and science to effective strategic planning. Getting it right brings a real sense of clarity and direction to a business.
Business Plan for Funding
It’s likely at some point in your business journey, that you need access to funding. Whether that be to scale faster, expand into other territories or buy other businesses.
External funding could be via banks, non-bank lenders, venture capitalists, and angel investors. None of these are unlikely to look at any funding request that isn’t accompanied by a very solid business plan. It defines exactly what you want to achieve, and how you plan to achieve it across a set time period. It’s a sure-fire way to ensure that growth targets and plans are being met.
However, business owners will struggle to formulate a concrete business plan without firstly ensuring that their strategic plan is solid and robust.
Our team can assist in creating and implementing a solid strategic plan and/or business plan that paves the journey for your business. Click here to find out more, or contact us on 0800 422 121
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