Business Planning 

Essential business advice with former bank manager Keith Farmer, now chief advisor at BFES

  

 

This lack of foresight may be due to focusing exclusively on past performance or, at best, on current performance. Mention business planning and strategy and most small businesses will take a sharp intake of breathe.  They often accept that big companies need to think about strategy but take the view ‘that’s alright for Tesco, but we can’t indulge in such luxury’. 

 

In many industries the rate of change is accelerating fast and this trend will continue, and the current economic climate will have a dramatic effect on businesses.  It is abundantly clear that companies with no strategic idea of where they are heading will be much more easily overtaken by events and will lurch from crisis to crisis or even fail. 

 

It is not necessary for the smaller business to develop a sophisticated long term planning structure but is essential for the owners/directors periodically to consider:

- What is happening to the world in which we operate?

- How do we see ourselves and our industry in 3-5 years’ time? 

 

Good management is the prerequisite of a good business. Good management makes time for strategic planning.

 

So what is a Business Plan? It is:

- A document setting out what you aim to do in your business and how it will be done.

- A working document that will change

- A control document that you can use to compare ‘actual’ progress against ‘planned’ progress 

 

Why Bother?

- To set targets for yourself & your business

- To reduce the risk of business failure

- To help you raise finance 

 

A business plan pulls together information to enable you to make informed business decisions before you start, when you change direction and as part of an on-going process.  It should be a working document that is shared throughout the business and not something that is shut in a drawer to produce on an annual basis to the Bank Manager!

 

There are many formats of a business plan many of which may not apply to your business.  However it should contain at least a brief description of the business, the management team/key personnel, description of the product/service, market research undertaken, sales & marketing, operational details and finance.

 

Finance should include at least a cash flow forecast, profit & loss forecast and details of how the selling price of the product/service has been calculated.  The more information you have the better and many businesses find producing financial information difficult so it is recommended to use a professional adviser.

 

If you are looking to raise money then outside investors and the banks will scrutinise this part of the business plan in detail so the more accurate they are the better, and it is vital you also understand them. 

 

Doing a business plan is not easy and is one of those things that will be put on the back-burner until things get better!  The old adage that preparation prevents poor performance is essential in the current economic climate and taking the time to complete a business plan is vital to the success of your business. 

 

About Keith Farmer

Keith Farmer is the chief advisor at the Swindon Business Foundation and Enterprise Scheme [BFES], which was formed this year to fill the gap left by the withdrawal of Business Link services.

He offers advice predominantly to SMEs.

Keith can be contacted on 01793 616284.

 

NEXT TRAINING SESSION:

Tuesday 29 November 2011

 
Please book through Shelly Hacker 01793 616284