Sunday, October 18, 2015

Business Management

How Good is your Business Plan?

Business Plans are a useful tool in managing and growing the business. The complexity of the plan varies with the size and nature of the business but here are a few areas to avoid in planning.

1. Don’t delay.
Too many business owners only create a plan when banks or investors insist on it. Find the time even if you are too busy getting things done. The busier you are the more you need a plan. Don’t spend all the time just putting out fires; the entire business may be lost if you focus on one burning issue.

2. Cash Flow insensitivity.
Most business owners seem to focus on profits instead of cash. The reality is that businesses spend cash to operate, not profits. Understanding cash flow is critical. If you only get one report to manage the business make sure it is a cash flow chart.

3. Planning fear.
Preparation of business plan is not that hard. This is not a doctoral thesis or a book that has to be written. Help can be secured from books, small business development centres, local university business schools and planning software from the internet.

4. Undefined goals.
Plans should omit vague undefined goals that are just hype. The purpose of the plan is to define specific goals that are achievable and measurable and provide focus for the managers. Follow guidelines for specific milestones and hold people accountable for results.

5. Overly optimistic projections.
Revenue projections that accelerate too quickly create a false impression and unrealistic expectations. Generally more conservative projections are easier to defend with bankers or other potential sources of financing and also may prevent the owners from overspending with the anticipation of generating income that may not occur.

A good business plan presents an overview of the business -- now, in the short term, and in the long term. However, it doesn't just describe what the business looks like at each of those stages; it also provides a roadmap to follow.

Saturday, October 3, 2015

Business Management

Reap Benefits of Strategic Planning 

Strategic Planning is a process to produce innovative and creative ideas which serve as the core framework for the company and designing its’ future. It provides a road to follow for success.
Strategic planning can have an immediate impact on the business; here a few benefits than can occur.

1. Make your future happen.
It is the difference between being proactive or reactive. Not every situation can be foreseen but you can make decisions and react to changing market conditions with the end in mind.

2. Establish direction.
Clearly define the purpose of the organization and establish realistic goals and objectives which can be clearly communicated to employees.  Provides a base from which progress can be measured, employees compensated and boundaries established for effective decision making.
3. Make wise business decisions
How do you distinguish between a good idea and a great idea?  Without a clear vision of what you want to achieve, and a mission or purpose for doing it, everything seems like a good idea.  What project do you invest in?  How should you prioritize?  Having clarity about what you want to do, who you need and how to get there will focus limited financial and people resources.

4. Increased profitability and market share
Focused planning and strategic thinking will uncover the customer segments, market conditions, and product and service offerings that are in the best interest of your business.  A targeted approach to markets and opportunities will guide your sales and marketing efforts, distribution and other business decisions which ultimately may mean more profit to the bottom line and a stronger market position.

5. Unique differentiation:  avoid “me too”
Companies often get used to looking at their competitors and their best practices and then trying to duplicate them that it becomes harder to tell the companies apart.  They all start to look the same with less distinction in unique value.  Strategy means having a unique differentiation that sets you apart from your competitors.

6. Increased job satisfaction. 
Consistently one of the top reason for leaving a firm is the lack of job satisfaction.  People need to have a motivation to come to work and feel like part of the team.  Employees are often the greatest source for innovative ideas.  The purpose and meaning of work gives a new focus and reason to show up each day if they participate in developing the Strategic Plan.

I hope these ideas provide some clarity on the benefits of developing an overall plan.