THINKING ahead is more crucial to sound business management, than ever before, according to Business Training Consultants' managing director Leigh Rachow.

She said developing and implementing a business plan may be the most important management investment any business could make, and was like the 'new challenge' being faced by business today.

Business Training Consultants held its first of five, federally-funded succession planning workshops last week, to help business owners and managers develop strategies for effective business planning and succession planning.

The workshop focused on two critical aspects of a business and succession plan: managing the operations of the business, and the people factor - the major stakeholders in achieving the goals of the business.

Over the next 10 months, 15 business owners will develop their skills and knowledge through interactive workshops, with one:on-one mentoring available to develop their business and succession plans.

Ms Rachow, a business owner for 23 years on the Sunshine Coast, said she accredited her business survival to effective business and succession planning.

"It's never too early to develop a succession plan," she said.

"In fact, it should be the fifth element to your business plan. Both are of critical importance to the longevity of your business."

Visit www.scba.com.au/business for more details on the mentoring programs, which are funded by the federal government.

MAKING PLANS: Business mentor Rod Richards talks to the participants in a course about succession planning.

AFTER five years working flat out in her Mel-corp Breathalysers Direct business, Shirley Neale said the time had come to start working on the business.

Shirley and her daughter Carly were among 17 people who signed on for the final Young Entrepreneurs Program, funded by the Federal Government and being run by the Sim-shine Coast Business Academy.
Previous programs have been restricted to a younger demographic with less experience in their businesses, but the final program has been thrown open.

The first full-day workshop of the six-month program, covering business planning, was held in Maroochydore on Tuesday.

Presenter Rod Richards said research had shown as many as 85% of businesses did not have a
working business plan.

"Some people think they're too expensive, or they take too much time, or they simply don't know how to do one," he said.

"But they're a crucial part of any business... they're the road map, they provide measured outcomes. Without one it's hard to know where you're going."

Mr Richards said once a business plan had been developed (he said the minimum timeframe could be one year, but as many as three or five), it was crucial to monitor it daily, particularly cash flows, and review it monthly as a minimum.

Shirley said while her company, which sells five different types of breathalysers - largely to the mining industry but also to police forces and in increasing numbers to concerned parents wanting to test their teenage children - was doing well, she wanted to learn more about running the operation more effectively.

"There's no doubt I haven't been working on the business enough," she said.

"I did the Women in Business Coaching Program recently... I think you've got to learn everything you can."
The YEP course will include sessions on topics including marketing plans, risk analysis, customer service and financial plans.

As well as the workshops, the course includes one-on-one mentoring and networking.

GOOD PLAN: YEP presenter Rod Richards talks business planning at the first workshop last week.

Best practice suggests that every business should have a financial budget for each financial year. If the business doesn’t have one then now is the time to prepare one. The first budget that should be prepared is the cash flow budget and profit and loss budget. It includes forecasting sales, expenses and capital requirements.

Gain an understanding of the cost centers and understand the characteristics of each one. We know the constant costs such as rent, insurance wages etc, but what about all the variables?  What impact do they have on cash flow?

The same understanding is needed for sales performance - how are sales performing to expectations. Are there budgets in place for the sales team? What are the direct costs associated with each sale? A key area linked to income is the costing of the marketing plan which measures the return on investment for each initiative. Knowing the numbers here can lead to increasing the marketing efforts into activities that are working and get rid of the ones that are not working.

Planning is essential for business. It is not a “one-off” activity; treat it as an ongoing process. It can provide the business with the overall direction and a summary overview of the way it is likely to operate and an indication of how profitable and viable it is in the market place.

Knowing the numbers will be useful in looking at the assets needed to operate the business, ensuring the business can raise the capital to finance the assets needed. It will also make sure that the business has the funds to meet the commitments as they are due.

It helps the owner know what to look out for and what to control. The owner can make informed decisions based on factual information, not just guesses. Without knowing the numbers we are flying blind.  In summary there are numerous budgeting templates out there so I would suggest talking to your accountant and bank manager.

Poor service will help wreck a business. A good business aims to meet the customer’s needs. The customer is the centre of the business, well it should be. Satisfied customers are happy, and they are loyal to those businesses they Trust.

How do we improve our Service? We need to know their expectations. Make a list of the kinds of experiences that discourage customers, and while we are at it make a list of the services people want. Consistency is the key in providing quality services and quality products.

A customer - focused business will gather information from the customer, conduct regular surveys and questionnaires. The business needs to know the bad stuff as well as the good stuff. We need to understand the buying behavior of our customers. Generally we buy two ways, rationally and emotionally. I have found it is a good idea to “profile” 

the customers. Profiling our customers provides accurate information on how our businesses can meet the needs of the customer. Look at the geographic region - demographic profile (age, cultural background, where they work etc). Understand their buying behaviors and assess the amount of times they will engage the business.

We have to understand the customers expectations, and I suggest we make a list of the areas you believe are important to meet their expectations. Ask the customers what their expectations are of your business. They will generally want convenience and clear communication, reliability and attention, respect, honesty, support, product knowledge, and after sales service.

Five main reasons people purchase are confidence we will meet their needs, quality of the product/service, the level of service, the depth and width of services/products, and price. In summary – PEOPLE BUY PEOPLE. 

As appeared in SUNSHINE VALLEY NEWS.

The Collins English Dictionary defines mentor as a “wise, trusted advisor, a guide”.

Nearly everybody has someone they turn to in times of need for that little fillip to help them through life’s journey. So too, in business can a mentor provide some well-founded advice to overcome an obstacle, solve a problem or encourage a move to the next level.

Unfortunately many small business operators are unaware of the benefits of engaging a mentor to help them achieve maximum business potential.

Being proactive is the key, be it for a beginning business, developing business or an established business that may be encountering problems or just someone who isn’t sure how to take the next step.

Make the decision to act early rather than late as it is easier to maintain than fix. Once engaged, a business mentor is able to develop, with assistance and cooperation from the business operator, tailored solutions and programs.

First step is a business health check.

Areas of concern, issues or problems are identified and prioritised for rectification or improvement. As the business operator you are given practical advice that works for your business, you will increase your knowledge and skill base and feel more confident by the encouragement and professional support.

Business mentors’ suggestions and ideas are bias-free, non-emotional and impartially made with complete integrity based on their broad industry experience. This experience is too valuable not to be accessed. Mentors bring clarity to business issues and provide more efficient ways to achieve goals and objectives. They provide options and strategies to plan and implement improved business practice.

Two case studies illustrate this point.

One involves improving marketing resources. This business already operated a six-figure marketing budget. Research covering the previous three years showed 30% to be ineffective. This money was redirected to more effective successful marketing strategies.

Not a bad result for a few hours with a business mentor.

In the second case study, the business wanted a more in-depth understanding of the financials. A range of spreadsheets covering direct and indirect costs, break-even calculations and profit tables was examined. Better financial decisions were then made based on this examination with immediate and effective benefits.

Sometimes business operators think it is a sign of weakness or failure to access a mentor. Two examples from quite diverse fields demonstrate this is not so.

Businesses do face many challenges and a business mentor can be a vital part on the road to success. Shop around, choose one for you. There are a number of State and Federal programs available to help business operators working in conjunction with business mentors advance their business development.