Your strategy is there to give you a feel for what’s going to happen within your business over the next five years. Write a business plan and Work out roughly each year on a flip chart pad or large piece of paper, and build up the picture of everything that’s going on in your business. Start at the five year point and work backwards, you can even use post-it notes if you want, that way you can take them off if it doesn't look right as you build your picture.
Start with your profit and turnover, then look at all the different areas of your business such as marketing, sales, premises, staff, distribution, target clients, geographical areas, operational challenges, product areas, product percentages etc…To make it as easy as possible for you, I’ve produced a list of things below and shared some specifics that you may want to include in your strategy diagram:
Think back to the marketing plan section where we asked you to build up an avatar for your ideal clients. So, where are you marketing? Where are your competitors advertising? Are your clients somewhere which your competitors aren't? Are there any awards you need to be going for? What kind of PR are you doing to raise your profile?
Product or Services
What products or services are you going to be offering? How many different types? How are these going to change as time moves on? What bolt-ons, upgrades, or added-value items are you going to add to them?...
What percentage of the products or services you’re offering account for your business? It may be that you’re looking to increase the percentage of a certain product because it’s more profitable for example…
Which areas are you focusing on? Are you staying in your own county, district or state, and if so, which towns are you targeting first? Or are you going further afield? If so, which regions are core to you and if you're going international, which countries? How is that going to develop over the next five years?
What kind of staff, services or production systems are you going to develop? What size and scope? And what are the potential issues?
Are you in rented premises or have you bought your own? What size of premises do you need for your staffing or production requirements and when will this need to change from present-day? Would a purpose-built facility be an advantage? And do you need to move to a certain area to help with recruitment, for distribution reasons, or to benefit from better road and rail links?
Have you developed a sales process and scripts? Do you need to set up how you’re going to track and measure success? Will you attend sales training's, and if so which ones and focused on what? How many sales staff are you going to employ?...
Who are your customers? Where are they located? How many of them are there? Do you have ten small ones then two really large ones, or twenty massive ones straight away? (Make sure that at no time is your business at the mercy of just one major customer – if you bring on a customer that’s 30% of your business, well done, but feel panicked enough to go and get another one of an equal or even larger size so that if they left you, you wouldn't be in trouble).
Where is the funding for growth coming from? How much do you need? Is the business producing enough or are you going to need outside investment? What do you need to do now to be able to secure that funding in the future?
Start from where you’ll be in five years time and work your way to present-day. And try to think how each different area will affect each other area of the business. One client I worked with realised that he’d actually need to move premises within 18 months because his production was going to outstrip the area he had available to work in. And with timings as they were, he actually only had six months from our strategy day to find somewhere.
So, looking at where you are now, look at what you need to be doing next year. Do you need to hire administrative staff? Move premises to become more efficient? Give your staff more training or a pay rise? Will there be additional costs such as utilities? Will you be moving to an even higher standard of work, or will you secure accreditation so that you can charge more? Perhaps you’ll aim to get the cost of sales down by a few percent? Or, if you’re purchasing more, you may wish to negotiate a better deal or a discount from your suppliers….
If you can’t make the figures work on paper its unlikely that you’ll make them work in real life, so go back to the drawing board and start again until it does all add up. And also do just be aware of what we term “crackernomics” when you’re setting your figures out. Many of us will have seen a Dragons Den episode where an entrepreneur is pitching their idea to the Dragons and values their business in the £multiple-millions despite them doing limited research, not yet launching – or often even making – a product, and without boasting any assets at all. Dream big when it comes to lifestyle, but apply a reality check when it comes to your business statistics.
Now you're half way through how to write a business plan, you've got a rough map of what you’re doing for the next three to five years, leave that in sight for the moment so you can refer back to it. I’d suggest sticking it on a wall somewhere prominent.
You now need to transfer the overall Business Strategy and your Plan from the flip chart onto paper, so that you can refer back to them. For the Business Strategy I’d suggest writing it out as a timeline so you can see how the business builds up and how all the different pieces fit together. I’d also suggest having two copies of each of these, one for a folder and one for the wall.
Now, we also really need to start building your list of actions for the next year.
By Alan S Adams