Barriers To Business Planning For Growth
Lets look at the barriers to growth, Fortune Magazine identified 3 factors and barriers To business planning
- The inability of the CEO to let go
- Being a cheapskate
- Not planning for unforgiving market dynamic
Real Business identified 5 factors
- Not finding the right people
- Myths about location
- A lack of business strategy
- The need for ambitious leader
- Planning but not implementing global expansion
Fresh Business Thinking identified 6 factors
- The Planning Vacuum
- Muddled Marketing
- Mismanaged Change
- Meddling and Misspent Time
- The Wrong Objectives
- No Financial Strategy
Other research identified these 19 factors
- The Owner
- Information Chaos
- Lack of a Sustainable Business Model
- Misread Market Dynamics
- Weak or unclear Value Proposition/Brand Promise
- Weak or unclear Positioning
- Lack of an effective Growth Strategy
- Dysfunctional Team Dynamics (People and/or Alignment)
- Insufficient Pipeline
- Ineffective Sales Process and/or Sales Productivity
- Poor cash flow restricts Capital Availability
- Inattention to the Transformation of Customer Behaviour and Customer Satisfaction
- Poor Delegation and Scaling
- Poorly developed Infrastructure/Systems
The 3 common barriers to business growth
From the findings it can be seen that there are 3 common factors
- The owner
- Setting objectives
Now at this stage we cant affect the owner or the objectives but what about influencing the planning process
4 barriers to planning have been identified
- Buy in and engagement
- Working out what you have to do
- Knowing who is doing what
- Making sure we are doing what we said we said we were going to do
Now it may be that you are lucky enough not to have to plan. Depending on the complexity of the problem; the number of people involved and the potential impact of the outcome’ it could be that you will achieve the required result without effective planning. So what are your Barriers To Business Planning?
How to overcome business growth planning and implementation issues
If you are facing more complex business growth problems (those that cant be solved by the approaches you have traditionally used) then it could well be that you need to adopt a new approach to the planning process that will help you overcome the 3 common factors.
Barriers To Business Planning For Growth
There are new tools, approaches and methodologies available now that can overcome the barriers top planning for business growth. Talk to Andrew Goode on 01733 361729 for click here. More information to follow including information on a unique business development planning tool for manufacturers and engineering companies called Rapid Test Marketing For Manufacturers™ click here
The problem with business planning
For many companies business planning is seen as a yearly or infrequent activity. Tasked with the challenge of growing the business, contracting the business, looking for diversification opportunities etc the question for the team is “How Do We”. Now hopefully all of the management team will be involved in the planning process and each of these people will have a different approach to engagement, whether it be it kinaesthetic, visual or aural.
Standard business planning decisions
After extensive research (and there has been huge quantities of research conducted on the business planning process) it is suggested that
- for most businesses approx 85% of the decisions to be made are generic,
- with only 15% of the decisions being specific to the company,
- Of these 80 are generic decisions that often need to be made within a business,
- The business decisions fit within the scope of Operations, People, Finance, Sales & Marketing and Strategy.
Make a Better Decision And Ensure It Happens
Giving the broad scope of trying to grow a business with the 80 generic business decisions to be made how do you make sure that you find the optimum solution to the business decision and importantly make sure that when it is in the plan it actually clomid gets completed.
How many of you have been through the planning process and completed a list of actions only to find that at the end of the year the team have perhaps started on a few but made very little progress on the plan?
A Method To Help Your Company Make Better Business Planning Decisions
- There was a unique engaging way of working through the planning decision process through an ‘activity’ decisions that allowed for improved decisions to be made. Overcoming the issues of ‘I hadnt thought of that’
- Once decisions made, then goals created and tasks assigned
- A clear business planning action task is created (so if its not in the plan it shouldn’t be completed)
- A interactive on-line plan was developed as part of the process that clearly identifies
- Planning actions and accountability
- Prioritisation of actions
- Visually where progress is / isn’t being made
- How to improve the quality of solutions and decisions that you make
10 factors you need to consider to avoid the common reasons for businesses failure
- No business plan – makes perfect sense If you are heading on a journey and you have no idea where you are heading it makes it incredibly difficult to navigate
- Lack of operating goals and objectives – So you have your end destination in mind but haven’t set any criteria for how quickly you want to get there, the methods you will use
- Under funded – You have aspirations but insufficient cash. This lack of cash will significantly inhibit the activities and frequency and type of activities you can perform
- Failure to measure goals and objectives – If you don’t carry out business measurement’s how can you have any idea as to whether you are achieving your effectively
- Failure to pay attention to cash flow – Without cash a business cannot perform. Its all very well having a great product or future orders in the pipeline but if you cant afford to fund the business activities through lack of cash then you will go out of business. Lack of attention to incomings and stock are key cash flow elements
- Underestimating competition – Most companies have competitors. These competitors may be direct, indirect or future forms of competition. Competitive forces don’t stand still they adapt and change
- Poor people management skills – The adage that a companies employers are its most important asset is often mentioned. What if the directors / managers don’t have the requisite skills to guide and manage these people accordingly
- Not cost competitive – Unfortunately for most businesses they will face competition. Many will choose to compete on price without being the most cost competitive (There is nearly always someone who can build it / deliver it / fulfill the order at a lower price). Therefore companies need to identify where / how they can compete on issues other than price.
- Failure to understand the industry and the target customer
- Poor or no marketing – With no means of differentiation and no focus on customers or products the ultimate destination is failure
If any of the above factors relate to your business then it could be worthwhile changing and developing or asking for help.
Improve The Clarity Of Your Business Decisions
Do you have difficulty making business decisions
Does this scenario sound familiar. You need to make some critical business decisions but the harder and more you think about them, the more confused you become and less sure about what would be the best solution / decision. There’s lot of information to consider, sometimes you are operating outside of your comfort zone, perhaps you have too much information you are finding it difficult to prioritise or focus.
Helping to give clarity and focus
Have you ever been swimming underwater in a tropical salt water sea without goggles. Without goggles under the salt water you are presented with number of problems. You cant keep your eyes open for very long, and all that you can see is a blurry fog. All of the details, colours and movements are lost. When you put on the goggles
- You can suddenly see the vibrant colours and shapes of the fish
- You can now identify some of the smaller fish and creatures that were previously not visible
- You can more easily follow the movements of the creatures and plants underwater.
- You can concentrate and enjoy the underwater environment for longer
- That feature you thought was a large rock you can now identify is a shark and take the appropriate action
Improve The Clarity Of Your Business Decisions – Business Decision Goggles
Now unfortunately I am not aware of any equivalent goggles that can help with the business decision process. There are however a number of tools, approaches and techniques that can be used to help you improve the clarity of your business decisions click here for more information. Note this is where talking to an experienced external business advisor can help. With no baggage or emotional tie in to the decision / issue they can potential help you see through the issues and make the best decision. If you would like to talk to an experienced marketing and business development professional (wearing business decision goggles) click here
Are Your Competitors Responding To Sales Enquiries Like This?
For a client who manufactures a technical automotive product we recently conducted competitor market research. Eleven direct competitors were contacted with a request to purchase a specific comparable product. During the research these five key findings were identified.
1. Fast Response
- From receipt of the enquiry only 30 % of the competitors responded within 48 hours (with one providing a very professionally presented response within the same working day)
- Two of the respondents quickly asked for more information in order to accurately specify
- The remainder of the competitors did not respond to the first request and needed prompting
2, Quality of proposal / quotation
- 3 of the proposals were outstanding and offered our client immediate ideas for how to improve the way they presented information within a written document. From the actual content (both written, illustrations and imagery) through to how the technical specification was structured and how pricing information was structured
- 2 of the proposals simply copied the information provided within the request and added a pricing element
- The remaining proposals were of very poor quality and purely featured pricing information with no other support information to justify why that supplier should be chosen
3. Follow up
- Staggeringly only one company followed up after submitting their proposal. I find this quite amazing and for our client provides them with a great opportunity to modify / improve their process. As they are selling a technical product there are lots of opportunities to follow up promptly to make sure that the customer fully understands the proposal and talk through in an informative way the technical elements
- What a great opportunity to be different (or among the minority) by simply following up your proposal.
- Without even questioning on price two companies offered a substantial discount structure within their quotations. In the case of one of the competitors they already had the lowest unit price irrespective of discount so appeared to be giving away margin
- Perhaps if they had followed up they might not have needed to consider discounting
5. On-Line enquiry
- Two of the competitors were originally contacted by using their preferred online enquiry form. In both cases neither competitor responded and they had to be contacted by alternative means
- If you have an online enquiry form how often do you check for incoming enquiries and do you have formalised process to ensure requests aren’t lost / missed
Competitor Analysis – In summary
- How much do you know about your competitors?
- If you had more accurate and up to date information on your competitors, would this help you gain sales and generate additional profits.
So how does your business solve problems
This broad statement possibly needs further refining (which is in fact part of the problem solving process – find out more about this later in the article)
Which of these two business problem solving approaches do you follow?
Approach One : Leap into it
So a problem arises within the business and we just get on o solve it. This could be categorised as just leaping in to solve the problem as opposed to actually understanding it.
The reason for this is that many people just want to get on get on with the problem solving process, their brains just seem geared up to ‘fast processing’
Approach Two: Ponder
Or perhaps a problem arises and you just sit on it, or park it for you this is a crucial time of pondering, reflection or simply just thinking about other stuff. In this world there are some people who just appear to be away with the pixies thinking irrelevant fluffy thoughts.
The image on the right hand side summed this up beautifully (Unfortunately I cant credit the image as I don’t know who created it). You often hear of people talking out those who are left sided and analytical compared to those who are right brain oriented and has a distinctive creative bias. There are numerous views on this that we wont go into within this article.
Identifying the real problem?
The challenge for me is that in many cases businesses suffer these issues to solving business problems
- They don’t accurately define the problem which then ultimately means they miss identifying the real problem. “How can we” is a great approach
- If they do identify the real problem they often don’t have the skills, capabilities or time to generate novel and useful ideas
- Some of the challenges include
- Decisions being made on past experiences. This is the equivalent to trying to drive a car forward but only looking in the rear view mirror
- Not actively listening and hence experiencing blockages to the thinking process. For example if I asked you the following question. Make the value of £1.05 using two coins currently in circulation, but one of them must not be a 5 pence piece – could you make the required value. If you are struggling and would like the solution just contact me.
- The speed in which change happens (especially for certain sectors) means that standing still is not an option
- The business does not have a process in place to effectively come up business solutions
- One approach to creative problem solving is
- Problem definition
- Problem exploration – involving convergent / divergent thinking leading to problem understanding
- Idea Generation leading to creative problem solving
Approaches To Problem Solving Within Your Business – What will you differently to solve your business problems
In many cases having an experienced third party business person work with you and you team can help you come up with better solutions to you business problems.
The Benefit of Business Planning
Business planning offers numerous advantages to SMEs (Small and Medium-sized Enterprises). These benefits go beyond mere documentation and play a critical role in guiding the growth and success of the business.
First and foremost, business planning provides a clear roadmap for SMEs. It outlines the company’s vision, mission, and objectives, as well as the strategies and actions required to achieve them. By documenting these goals and strategies, business owners can establish a sense of direction and purpose, ensuring that everyone in the organisation is aligned and working towards common objectives. This clarity helps in making informed decisions and prioritising activities effectively.
Another benefit of business planning is improved resource management. Developing a comprehensive business plan involves analysing various aspects of the company, including financial projections, operational requirements, and resource allocation. This process allows SMEs to identify potential gaps, risks, and opportunities, enabling them to allocate resources efficiently and avoid unnecessary expenditures. Effective resource management helps optimise cash flow, reduce costs, and enhance profitability.
Business planning also facilitates better understanding and management of the market. As part of the planning process, SMEs conduct market research, analyse competitors, and identify target customers. This research provides valuable insights into customer needs, preferences, and market trends, allowing businesses to tailor their products or services accordingly. By understanding the market landscape, SMEs can develop effective marketing and sales strategies, position themselves competitively, and capitalise on emerging opportunities.
Moreover, business planning promotes effective risk management. By assessing potential risks and uncertainties, SMEs can develop contingency plans and mitigate potential threats. This proactive approach minimises the impact of unexpected events and helps businesses stay resilient. Additionally, business planning encourages the identification of strengths and weaknesses within the organisation, enabling SMEs to capitalise on their advantages and address areas that require improvement. By addressing weaknesses early on, businesses can enhance their competitiveness and overall performance.
Business planning also plays a crucial role in attracting external stakeholders, such as investors or lenders. A well-developed business plan demonstrates professionalism, credibility, and a clear understanding of the business’s potential. It provides valuable information on the market, financial projections, and growth strategies, which are crucial for securing funding or building strategic partnerships. Moreover, the process of creating a business plan allows SMEs to critically evaluate their business model and value proposition, identifying unique selling points that can be effectively communicated to external stakeholders.
In summary, business planning offers SMEs a range of benefits. It provides a roadmap for growth, enhances resource management, improves market understanding, facilitates risk management, and attracts external stakeholders. By investing time and effort into business planning, SMEs can increase their chances of success, navigate challenges effectively, and seize opportunities for sustainable growth.
If you would like to know more about Business Planning contact Andrew Goode MBA, MSc, FCIM Click here to arrange a call
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