Are you one of those people who spend more time planning their holiday than they do their business?
Employers often pay more attention on matters such as running a tight ship, instead of focusing on finding and investing on the right resources to expand the business. It’s acceptable, and likely helpful in the short term, but it’s not good in the long term. Business owners become too busy that they neglect to plan.
The result is that business owners don’t have the time anymore to conduct regular or management meetings, and it is often that you will find a small or medium sized company that is dedicated to holding yearly planning meetings for the coming year.
Follow these four simple steps for planning sessions in your business:
1. Establish profit growth potential.
As part of letting a client participate in a planning session and setting and bolstering targets, showcase the profit growth potential in the company by evaluating what-if situations based on adjusting the major drivers of profit, revenue and cash. It is important that your accountant participate in this activity.
2. Deliberate various financial situations.
There are three scenarios you can discuss: Low Growth, Medium Growth and High Growth. The financial consultant and business owner should work together to establish the scenario that the owner is most at ease (the scenario should be both attainable and stretching), and then focus on that scenario.
3. Deliberate major points that is pertinent to the chosen scenario.
Before the planning meeting, the financial consultant should ask the business owner a series of questions that would make the owner think about their performance in various parts of the business. During the planning session, discuss the answers and focus specifically to matters that have to be dealt with to make sure the chosen financial scenario has the greatest probability of being realised.
4. Create an action plan.
A ream of flipchart paper is your most essential tool in the planning session. This item will be continuously utilised the entire day. Every idea that is brought up should be captured on the flipchart paper. By the conclusion of the session, you should all the papers plastered on the wall. Throughout the day, you can turn to past issues and recap what you thought was crucial. An action plan will emerge out of this.
Relevance is the key to an effective action plan. You should be able to see an obvious connection between the things on the action plan and the realisation of the objectives that have been established. Long and waffly are trumped by short and concise always.
As you look at the soundness of a proposed item on your action plan, you should think about the reason why a particular action item has been proposed. What further benefits are there for implementing it? What particular goal does the action plan is designed for?
It is recommended that only a few items be entered on the action plan because it has been proven that implementation is greater and much more focused.
Using the flipchart paper on the walls as your guide, create a clear action plan at the end of your planning session. Here are tips on how to do it:
- Look at the first flipchart paper. (Don’t forget to number your flipchart papers so that it would be easy to summarise then.) Don’t spend too long recapping the discussion that you had that resulted in the items on the flipchart paper.
- Check each item. Cross off all duplicates. If a number of items can be grouped together, categorise them as one item on your action plan.
- Go to the second item and repeat the steps. Go through all the pieces of flipchart paper from 1 to last.
- Jot down the three major projects that you have promised to put into action in the next 90 days. Put a lot of thought into these projects.
Make sure your projects can hold out against the following questions by double checking each of them:
- With regards to your chosen financial scenario, which part of the business is this designed for? (For instance, improving margins, expanding the number of customers, improving average transaction price, and more)
- State the reason why the project is crucial. (Identify the crucial success element that needs attention.)
- Who will be responsible for implementing the project?
- What is the date of implementation?
- What targets will be reached upon implementation of the project?
- How will the project’s progress and results be measured?
When you follow these steps, it is important to go back to the plan every 90 days to make sure the projects are being put into action and that you are making headway in your chosen financial scenario and that proper accountability has been assigned to guarantee project delivery. Take note that your hands-on accountant can make a vital contribution in this process.
Avoid expending too much attention on what your business does. Being the owner, it is essential for you to take yourself out of the workings of your business at least every quarter and focus on mapping out the future of your business and your personal situation.
Contact PJS Accountants to help you plan growth and development of your business. We provide a full range of services including accounting, taxation, business improvement, superannuation, business valuations, asset protection, succession planning and bookkeeping. We have spent more than 30 years dealing with local businesses in Capalaba, Cleveland and the Redlands. Our team is always available to take your call and assist you in whatever business needs.