Most businesses want to change but are not sure how to improve the business. In my 14 years of business mentoring, I have found owners will invest resources and want the best results for their investment. Sounds fair enough, but what should the business owner be investing in, new equipment, staff, business advice, education, new skills, training? There can be a long list of requirements. Answer – business owners are always looking for efficiencies, but what about change?   

If an owner doesn’t have the skills set to effect the changes, how does the business owner know what to look for and how to assess it?
 
Generally speaking I have found that most obstacles in business are knowledge and information based. Knowledge could include Small Business Management skills, Technical knowledge, Communication skills, public speaking skills etc.    

Ego and Pride also has a fair bit to do with the resistance to change.  Year after year the same problems, the same cash flow issues, the same staff issues and the same tax issues, the same profit issues.        

Growth is about Change, Status Quo is about Change, and if we don’t change we will become extinct. Change requires courage and business owners need to be open to new ideas, adapting old strategies and adopting new ones. The strategies that worked 10 years ago, are not working today; its time to find some new ways of conducting business (Change).
Organizations that are slow to change or don’t respond could find it difficult to maintain current profitability. Owners that want to improve the position of the business are open to Change. If we change nothing, nothing changes.

Think about creating a new culture in the business, one of education and training. Look at new techniques for performance, identifying those areas of change will require a thorough investigation. Be open to a range of options and understand that to change, the first thing is “Are You as a business owner Ready and Want to Change”

In Summary – barriers to change are technical and personal.

We must know the costs. 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.    

When we analyze the profit and loss report, cash flow forecast report and sales budgets reports; compare the budget to actual performance regularly. Gain an understanding of the cost centres 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.

What is this planning all about?  It is a document that defines the business, a bit like a Road Map for the next 12 months. It identifies your goals, and assists in the daily running of the business. The development of the plan encourages the business owner to write down key objectives, helps allocate resources properly, provides specific and organized information, and is a crucial part of the financial package.

The benefits of preparing the Business Plan are; it sets out a clear direction to help ensure that the opportunity you have identified matches your goals and ambitions. Planning allows the business to examine ideas carefully, and assists in the decisions covering time, resources and financial commitment. A key area in the development of the plan is that it helps challenge old ideas and creates a climate for new innovations.

The main areas that it covers includes an Executive Summary(key points),  a marketing plan, operations plan, management and staffing, financial forecasts, risk assessments, an action plan, and I would ad market research information as well.

I have found from my experience that there are many barriers to planning which include fear of the unknown, fear of the future, fear of failure, and fear of success, and how do we write them. The business is changing quickly and planning is not seen as worthwhile.

Before starting the business plan obtain advice from your accountant and bank manager, and check out the templates. There is a wealth of information and resources available and source a template that suits your business. 

The business plan doesn’t need to be complicated. They are a desk top document that is used daily to measure the performance of what has been planned. When it is measurable it is easier to evaluate and manage.