Personal Finance

Implementing a business plan for the best results

plan-biz

Summary

  • Most SMEs do not know where they will be in one month’s time, let alone five years, so expecting them to write a business plan is really a tall order.
  • For those SMEs that succeed in writing one, the fact is that some of those business plans may still be unrealistic, with a reflection of every dream of the owners, not necessarily what is attainable.

Writing a business plan can be quite overwhelming, especially for SMEs. Most SMEs do not know where they will be in one month’s time, let alone five years, so expecting them to write a business plan is really a tall order.

For those SMEs that succeed in writing one, the fact is that some of those business plans may still be unrealistic, with a reflection of every dream of the owners, not necessarily what is attainable.

Truth be told, even the most realistic well-thought-out business plan is just that, a stack of paper, if it is not implemented. We therefore need to be clear on how you can implement a successful business plan and derive value from it.

We write business plans to enable us define a clear path to achieve business success amidst a market that is getting fiercely competitive by the day.

By its nature, competition is continuously scanning the market for opportunities to outsmart each other and gain more customers. Businesses are innovating new ways to gain competitive advantage. So you need to be smart to remain on top of your league.

Those businesses that are smart enough make more money and profits however difficult the market is, while weak businesses are forced out of the market.

Companies that continuously scan the environment and are responsive to the changing market trends have an upper hand in survival and growth compared to the laissez-faire traditionally modelled laid back companies.

So what do SMEs need to do in order to successfully implement an impactful business plan and derive maximum results?

To successfully implement a business plan and derive maximum benefits from it, you must be able to reduce the ideas and strategies into few measurable steps and processes.

Proper implementation can easily place your company in the enviable club of companies that experience above “30 percent growth” faster than you might have thought possible.

We discuss below seven processes companies can follow in the implementation of their business plans.

The goal of proper implementation is for your company to be able to achieve maximum results, attain faster growth, make above average profits and build healthy cash flows within the shortest time possible.

First, you have to go back to basics by asking and answering the following questions. Is your business plan realistic? Does it have clear goals, objectives and aims that suit your aspirations?

If you perform a quick scan of your business plan, can you identify fantasies that will be harder to achieve? The earlier these fantasies are removed from your plan the better for you and your business.

Second, assign roles. Once you have your business plan and you have set out your objectives, ensure you assign a person who is responsible for each task so that roles are clearly defined and there is accountability in completing the tasks.

Allow creativity and innovation on how each person carries on with the assigned tasks, only guided by company policies and procedures.

Third, develop a one-page business plan to quickly outline your strategy. This one-page document will ensure you remain relevant to your cause.

Use this document to periodically review your high-level strategy. May be your target market has changed. Ask yourself if you are still solving the same problem for your customers.

Share this document with new employees to give them a clear picture and direction of your overall strategy. Ask for employee feedback on the processes and activities they are required to undertake to achieve the plan.

Encourage employees to speak their minds freely, and have reward systems in place for employees who come up with brilliant ideas or compelling critiques of the plan.

Anytime there is a change in a company’s strategic direction, the best thing to do is revise the strategy and business plan. But pursuing different goals from what you have documented in your strategy will cause confusion and make the team work at cross purpose, thus setting you on a path to failure.

Fourth, set milestones for what you plan to accomplish. The goals can be short term, medium term and long term. Assign these goals to team members.

Each goal should be paired with an appropriate time frame for completion. You should be aggressive, but reasonable with your time allocation in order to ensure, not just completion but excellent work as well.

Allocate part of your budget if necessary as most goals will require resources. The goals should be SMART and therefore capable of being measured.

SMART is an acronym that stands for Specific, Measurable, Achievable, Relevant and Time-bound.

SMART goals will give your business structure and support and will set out more clearly what you want to achieve and by when.

Fifth, keep a tab on your finances by continuously reviewing and monitoring them. Have a regular review with your finance team to manage income, costs, cash flows and any tax exposures.

Compare your planned budgets and forecasts with your actual results at least monthly. Keep your sales forecast and expense budget current.

As you learn more about customer buying patterns, revise your forecast. Performance is largely driven by sales and how much we spend to generate the sales.

Look at your gross margin to ensure your operations are within budget. Develop a chart to plot your progress against time. Do this for every key performance parameter and matrix.

This will maintain visual effect and draw your immediate attention to areas that require immediate correction. We remember more by seeing than by hearing.

So pin these charts in the boardroom, in the office, and in places that those who need to see them can easily see them all the time.

Sixth, schedule a monthly review with all team leaders to leverage your business plan as a growth engine. The review does not have to take longer than an hour, but it needs to be a regular recurring monthly meeting on your calendar.

In the monthly review, go over your key numbers compared to your plan, review the milestones you planned to accomplish, set new milestones, and do a quick review of your overall strategy.

You or a member of your management team needs to be in charge of monitoring each task’s progress and the completion percentage of each objective.

When delays occur, try to get to the root of the problem. Determine whether you can keep operating as you are or whether you need to make changes, such as reducing costs, raising prices or increasing marketing.

Make adjustments to your plan based on the results.

Finally, join a trade association or networking group. Business plans are always dynamic and evolving. Make sure you join a networking group so you can keep up to date with on the ground market knowledge, connections, and legal and financial updates.

You may also get new insights and new ideas that radically change your perspective, requiring you to react and change accordingly. Do not get totally constrained into your business plan, you always have to see what is going on around you.