For some business owners who have run their business for the last 10, 15 even 20 years, it’s sometimes hard to break the mould of cruising from one year to the next. New years’ celebrations are over, resolutions have been set, with some already broken. For businesses it’s not that much different, it still involves reflection and it still involves thinking about the future as you see it. It needs to be an annual ritual, but should be taken further than that and seen as an opportunity to either reaffirm previous goals that continue to provide focus, or maybe it’s time for change.
Planning affects all aspects of business, from business start-ups, to overcoming difficulties associated with growth or survival, to a desire to do things better and more efficiently, through to adventuring into new horizons with new products, services or markets, and on to setting up new projects and even planning to exit your business.
Why should it be the first thing you do? Because it provides focus, it provides an opportunity to assess the status quo and whether that still fits with your business, it provides an opportunity to evaluate the landscape and identify potential risks or opportunities you hadn’t identified in the past, it provides an opportunity to change things, realign, redirect or discontinue. It provides a platform to think through the pros and cons of any change, understand the costs, benefits and even options available with any changes that are being considered. It can save you a lot of money especially if used before you venture into business or make a change or start a project, i.e. through your planning and research you may discover some fundamental factors that make the opportunity commercially risky to pursue. Better to fail on paper than in real terms. By default, planning culminates in setting targets (both financial and non-financial) and timeframes that should be used to measure against.
Planning provides a process that encourages looking at all aspects of the environment you work in or are about to venture into. It’s an opportunity to really establish whether what you are proposing is viable, is doable, and is worth the risk. Plans are based on what you know and understand at the time and as a consequence may change over time especially if new relevant information comes to hand such as better market information, or a better understanding of the costs and timing of the project, venture or change. To spend precious time planning, don’t then lock it away never to be used or referred to, instead use it as a management tool, a measuring stick, a guide, the results will back up its worth.
So to conclude, here are some key points to remember:
- Keep It Simple Stupid – the KISS principle
- Identify and assess the severity of potential road blocks
- Focus on what matters to you and the business
- Avoid spinning to many plates
- Reflect on what has worked and cease or change what hasn’t worked for the business
- Understand the costs of change, the cost of reinforcement or the cost of discontinuance.
- Match that against the benefits of the actions you plan to take.
- Make informed decisions not knee jerk reactions
- And don’t be afraid to pull the plug at the planning stage.
Insight CA Ltd – Business Advisors & Chartered Accountants
44 Sovereign Street, Flat Bush, Auckland 2019