The process of planning within your business is an important action that provides clarity on business direction, defines your objectives, documents your strategies to achieve your goals and helps you manage possible bumps in the road.
The potential uncertainty of the future economic environment means that planning within a business becomes of even more importance.
As a reference, detailed below are a series of questions / prompts on different areas of a business that may assist in navigating through potentially uncertain times. The prompts below cover many aspects of a business including financial, competition, information technology, industry, staff and customers.
- Is your business positioned well to take advantage of future industry trends? Can you speak to an industry body, network groups to discuss what they are doing to manage risks?
- Will future government policies negatively affect your business? Do you know what government support is available – grants, loans, subsidies etc?
- Are you able to adapt your business to changes in technologies (e.g. Virtual Meetings, Online Solutions)? Do you have up-to-date technology to improve efficiencies in your business and manage relationships with your existing customer base?
- Do you know your current business and personal financial position to determine resource availability and length of time to ‘handle a crisis or economic downturn’ etc?
- What abilities do you have to control your businesses operating costs (fixed vs variable costs)?
- Are you continually investing in developing ‘soft skills’ (business development, sales & service culture) to remain pro-active with major customers and staying in regular contact?
- Do cash reserves exist to protect your business from economic downturns, seasonal conditions? For instance, have you prepared monthly profit/loss and cash flow budgets?
- Do you keep your IT systems and processes up to date to ensure your customers private information and financial records are in a safe and secure environment?
- Are you keeping abreast of what competitors are doing to secure/increase market share – price cutting, discounts etc. Do you know your lowest sustainable price and margins for your main product/service lines?
- Are you able to produce accurate financial reports on a timely basis to understand business performance and financial position?
- Does the business have CRM (Customer Relationship Manager) systems and processes in place to manage customer relationships, grow sales and attract new customers?
- Have you conducted a review of your business operations to identify procedures that need to be documented and potential business risks, health and safety concerns etc?
- Do you share your knowledge/expertise with staff, invest in staff training, upskilling and development, mentoring future successors so they are in a position to manage the day to day operations of your business so you the owner(s) can focus on strategic business growth and improvement?
- Do you understand the percentage of customers that generate 80% of profits? Do you know your % of revenue that is from recurring or repeatable services?
- Are you communicating regularly with all staff, open and transparent so they can plan according to their personal circumstances? Do staff agreements adequately address remuneration, superannuation, insurances, taxes, restraint of trade etc?
- Does your business insurance policy cover work from home arrangements?
- Can you confirm all outstanding staff entitlements including annual, sick & LSL? Examine agreements to determine if enforced paid leave can be actioned. Establish a policy for enforced paid leave & layoffs (seek legal advice). Communicate regularly with all staff, be open and transparent so they can plan their personal situation.
- Do you know your borrowing capacity, capability and capital requirements based on ‘worst case scenario? Do you have a relationship with bank(s) and other funding providers (e.g. finance/mortgage brokers)?
- Has the business got a Formal Business Plan (including SWOT, Growth, Budgets, Strategic Plan) and is it actively managed? Is this formulated into a concise easy to read and understand document ie One Page Plan?
Davidsons can and do assist businesses in establishing concise Business Plans that encompass the questions raised above. Plans that allow business to determine their direction, clarify business goals and provide a framework to refer to through uncertain times.
Should you wish to discuss the content of this article or the process of Business Planning don’t hesitate to e-mail email@example.com.
Disclaimer: this information is of a general nature and should not be viewed as representing financial advice. Users of this information are encouraged to seek further advice if they are unclear as to the meaning of anything contained in this article. Davidsons accepts no responsibility for any loss suffered as a result of any party using or relying on this article.