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Do Small Business Entities Need Strategic or Business Plans?

business advice sydney
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Short answer is yes and it is not as complicated as you think.  A practical plan with an action list can be drafted within hours.

It is concerning the number of business owners that concentrate on short term or internal operational matters without focusing on the key strategies of the business. These strategies drive growth, long term viability, profitability and allows the owners to ultimately exit the business.

Waiting for things to improve and/or customers to come knocking are long gone. All business entities now operate on a world-wide platform and competition and availability of information is intense. Technology is driving much of the competition in business and businesses should be planning to be part of the technological change to ensure they meet market needs. It is more important than ever that your brand and offering be differentiated from your competitors and is well communicated to the market.

Businesses need to be more strategic in their planning to define business issues, assess their current state and competitive landscape.  The strategic plan is a vehicle for setting priorities, making investment decisions, laying out new plans for growth and ultimately long term viability. For example, what must you do to realise an extra $150,000 profit per year?

Many business entities are concerned with costs when establishing a business however by making the appropriate investment in strategic or business planning you plan where to prioritise your expenditure without unnecessary costs being incurred. For example, if a service business has a clear vision but does not effectively monitor the productivity and profitability of its employees or cost of those employees, how can you be maximising your profit or providing a superior service to your competitors?

A simple one or two page action list should be drafted to ensure the business owners remain focused. You can then use this action list to be accountable to yourself or your business advisor/accountant and update on regular basis as the business evolves.

Items to address in the plan and action list include:

  • Vision – Defining owner’s vision and business differentiation.
  • Strategy Development – This involves the development of appropriate strategies and to maximise the return on the business assets.
  • Marketing –include market focused initiatives and income growth strategies.
  • Operations – concentration on internal efficiency.
  • Human Resource Management – The policies and strategies that ensure the implementation of the plan.
  • Asset Management – Maximising the profitability of the owners or shareholders’ investment.
  • Finance – The assessment of the costs of the plans / actions.
  • Budgets / Benchmarks  setting targets and set targets to best practice.
  • Timeframes – need to be accountable and set appropriate timeframes for success.

The action list needs to be written in terms that will be adopted by the owners and referred to on an ongoing basis, otherwise it will just be another piece of paper. Without a relevant plan you will be losing ground to your competitors.  Further details of planning options are on our website or contact us to see how developing a strategic plan for your business could be beneficial to your success.

Quoting Benjamin Franklin “Failing to plan is planning to fail”.  Hopefully, this will not be your business!

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Specialist accounting and business advice, knowledge and experience for businesses and professionals.

Newcastle

Level 5, 12 Stewart Avenue, Newcastle West NSW 2302

Sydney

Level 10, 20 Martin Place, Sydney NSW 2000

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