Hovey explains: "A clear statement of strategic intent is rarely static because a strategy will sometimes need to change as a result of a shift in the competitive context or as a result of shifts by consumers or industry segments.
"We recommend to our clients the ‘balanced scorecard’ approach to strategy which means that strategy, and the implementable tactics, are interrelated with four core perspectives—the four pillars—which are an increase in shareholder value; an increase in customer value; operational excellence; and motivated and aligned people."
Hovey says that a successful business plan also includes a clear statement of the business’ current position in terms of its financial statements, sales, marketing, and operational tactical plans which support the four pillars. Credible financial forecasts in terms of expected shifts in the P&L and balance sheet, together with appropriate cash flow forecasts, should also be in the plan, along with measurable goals and objectives, sometimes expressed as key performance indicators (KPIs).
"Successful business plans will also reflect some what-if or alternative scenarios," Hovey explains. "Where possible, the assumptions within a successful business plan are tested using sensitivity analysis. Successful business plans which are regularly reviewed will also continuously challenge existing assumptions and show clear links to operational processes within a business."
"Just as all businesses are different, no two business plans are the same," says Jon Moyes, general manager of sales, marketing and distribution at NSW Business Chamber. "Your plan must be tailored to your individual business, articulated clearly, provide a framework to monitor and measure the actual performance of your business, and be able to be used as a guide to enable you to make sound business decisions. It also must communicate the essential characteristics of your business so that interested parties can see why it is likely to be successful."
Crucial Steps
Here are steps our experts recommend following when creating a sound business plan:
1. Agree to the process. Prepare a structure for your plan and decide on the team needed to complete the plan. Set the key goals for your business and agree on the process to be adopted and the timetable to complete the plan. Assign responsibilities.
2. Know your business. Make sure you understand your industry and your particular segment of the industry. What are the recognised critical success factors and key result areas? Identify the specific issues facing your business in terms of your history and in terms of best practice.
3. Collect information and gather data. Undertake market research on your industry and competitors. Gather historical information about your own organisation. Uncover the issues facing your products or services. Research the trends and developments in your industry.
4. Analyse your information. Undertake a SWOT analysis of your company's strengths, weaknesses, opportunities, and threats. The intention is to build on your strengths, reduce your weaknesses, manage your threats, and maximise your opportunities.
5. Plan your future. Decide on your vision, where you want the business to be; your mission, the purpose of the business and how this will be achieved in general terms; the objectives, based on prioritising the key management goals; and strategies, broad statements as to how the objectives will be met.
6. Schedule implementation. List each initiative you are proposing to adopt to achieve each strategy. Assign priority, timing, responsibility, and cost against each. Delegate authority and assign resources.
7. Document the plan. Incorporate the information you have gathered from the steps above under headings including: executive summary, statement of business objectives, background and organisation, market structure and plan, organisational plan, product or services summary, implementation schedule, financial plan. And, use annexures to provide detailed information supporting matters summarised elsewhere in the business plan.
8. Give ownership. Ensure your key management and staff have a feeling of ownership over the end product.
9. Consider outsourcing and professional assistance. External consultants can bring a level of specialised knowledge and expertise to your planning process. They will be objective and will have additional resources.
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