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Whenever I first talk to clients, be they long-term business operators or just starting out, I always ask them two key questions:
1. What do you want to achieve from your business?
2. How will you get out of the business when you decide to exit?
These questions are designed to focus them on the outcomes they want to achieve – something many people have never asked themselves. While these are good questions to start the process, the next step, if they have not already done so, is to develop a strategic plan. A strategic plan is a ‘roadmap to success’ and is essential for developing a strong business.
The strategic planning process is designed to establish business priorities, and the actions necessary to achieve the goals of the business and its owners. By setting out goals, decision-making can be undertaken within the framework of: “Does it get us to where we want to be faster?”
This question is deceptively simple. The reality is, it is easy to get caught up in ‘busy work’ when starting a business that has nothing to do with goals or business success. Unless what you are doing is helping you achieve your goals faster, you should not be spending time on it.
One of the first steps in developing a strategic plan is to complete a SWOT analysis – in other words assessing and understanding the business’ strengths, weaknesses, opportunities and threats. The very process of carrying out this analysis enables the business operator to identify potential gaps and flaws in their current business model. In terms of business value, thinking about what a potential purchaser would want if they bought the business, means that people and processes can be put in place to increase the value of the business and its eventual sale price.
As the barriers to start up a new business reduce and more new businesses are established, it is harder than ever for owners to dispose of their business when they want to move on. Alternative strategies may be needed to extract cash or even the owner from the business while maintaining cash flow – albeit at a lesser level.
While meeting the ultimate goals of the owners, the strategic planning process is essential for guiding the daily operation of the organisation and maximising profitability, cash flow and value. Crowe Horwath has a process that enables owners to be coached through the planning phase and to keep them on the road to success. Our services also qualify for New Zealand Trade & Enterprise grants.
Please contact Martin Richardson on 486 6435 or at firstname.lastname@example.org for further details.
Channel Magazine: Issuu 52 March 2015