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Business Planning – How To Improve The Process

Small and medium-sized enterprises (SMEs) are the backbone of most economies around the world. These businesses often have limited resources, which means that they need to be strategic in how they allocate their time, money, and manpower. One critical area where SMEs need to focus is the business planning process. This process helps companies set goals, determine priorities, and allocate resources effectively. Here are some tips on how SMEs can improve their business planning process.

  1. Start with a clear vision and mission statement Every business needs a clear vision and mission statement to guide their decision-making process. A vision statement describes the company’s long-term aspirations, while a mission statement outlines its purpose and values. Having a clear vision and mission statement ensures that everyone in the organization understands what the company stands for and where it’s headed.
  2. Conduct a SWOT analysis A SWOT analysis helps companies identify their strengths, weaknesses, opportunities, and threats. By conducting a SWOT analysis, SMEs can get a better understanding of their internal and external environment. This information can then be used to develop strategies to capitalize on strengths, mitigate weaknesses, pursue opportunities, and mitigate threats.
  3. Set realistic goals SMEs should set realistic goals that are specific, measurable, achievable, relevant, and time-bound (SMART). By setting SMART goals, companies can track their progress and ensure that they’re on the right track to achieving their objectives.
  4. Identify key performance indicators (KPIs) KPIs are metrics that companies use to measure their performance. SMEs should identify KPIs that are aligned with their goals and objectives. For example, if a company’s goal is to increase revenue, then its KPIs might include sales growth, customer acquisition, and customer retention rates.
  5. Develop a budget A budget is a financial plan that outlines a company’s income and expenses. SMEs should develop a budget that aligns with their goals and objectives. The budget should include all costs associated with running the business, including salaries, rent, utilities, marketing expenses, and other overheads.
  6. Review and adjust the plan regularly A business plan is not a static document; it should be reviewed and adjusted regularly. SMEs should review their plan quarterly or annually to ensure that they’re on track to achieving their goals. If the plan needs to be adjusted, companies should do so promptly to ensure that they’re not wasting resources on ineffective strategies.
  7. Get feedback from stakeholders SMEs should seek feedback from their stakeholders, including employees, customers, suppliers, and investors. This feedback can be used to refine the business plan and ensure that it aligns with the needs and expectations of all stakeholders.

SMEs need to have a well-defined business planning process to succeed in today’s competitive marketplace. By starting with a clear vision and mission statement, conducting a SWOT analysis, setting realistic goals, identifying key performance indicators, developing a budget, reviewing and adjusting the plan regularly, and seeking feedback from stakeholders, SMEs can develop a strong and effective business plan that will help them achieve their objectives.

Business Planning In Uncertain Periods
Business Planning Blue Dolphin Business Development

Process Guidelines To Improve Your Business Planning & Strategy Development

  • Make time and space for business planning and strategic debate
  • Make sure that you separate the strategic business planning from the budget planning cycle
  • Ensure that all involved in the managerial top team
  • Be prepared to enter the “Zone of Uncomfortable Debate” Z.O.U.D
  • An external experienced  business consultant may help you to counter issues that arise in ZOUD by being a devils advocate
  • Create an environment where it is possible to surface and challenge assumptions
  • Ensure that everyone can say what they feel “Be Honest”
  • Get the best information you can on
    • Customers
    • Competitors
    • Your own organisation
  • Don’t rush the process
    • There are no set guidelines on how long the strategic planning process should take
    • The more you dig and the better the information and knowledge you will gain – the longer it will take ( Back to point one, make time for the process)
    • Note: don’t let procrastination get in the way of delaying the process. Again this is where an external consultant can help
  • Summarise the strategy in a concise, unambiguous document
  • Very important – Agree actions and ownership
  • Monitor and control the change process. Make sure that you measure critical activities

There is no right answer, but the strategy that comes out of this process is likely to be significantly better than one emerging from ad hoc disjointed operational decisions!

With business planning learn from the Covid pandemic

The challenge of Covid has clearly showcased the need for robust and detailed business planning, it has also demonstrated the need to be able to be fleet of foot and make rapid decisions and adapt and change.

Those companies that didn’t have the business information to hand or failed to make decisions because of procrastination either missed out on new opportunities or subsequently failed.

Business Planning Needs To Incorporate Accounting And Marketing

A recent survey by  Centre for Economics and Business Research has shown yet again that a large amount of small businesses have no business plan. Plus Business Planning Needs To Incorporate Accounting And Marketing

There is nothing new here for years research from a wide variety of respected organisations has shown that small and medium businesses fail to develop a business plan.

So how do companies make informed decisions to guide the business without a plan.

Importantly if you are looking at creating a business plan its important that it contains both financial and marketing information.

Business Planning Needs To Incorporate Accounting And Marketing

Financial Business Planning Fundamentals

  • A 3 to 5 year business plan with some key financials
  • A budget
  • Quarterly reporting on performance against budget
  • Cashflow tracking and forecasting
  • Some key performance indicators (Note M&S as a huge retailer have only 6 KPI’s)

So from a financial perspective

  • Plan, Plan and Plan some more
  • Understand the business and drivers
  • Consider the financial data
  • Cash is the lifeblood of any organisation make sure your company is viable
  • Evaluate and monitor change and adjust accordingly

Why a financial expert is important to your business needs

  • The will understand the key objectives and drivers
  • They will be genuinely excited by the detail of financial planning
  • Asking them to set up the reporting you need to track business performance will be the equivalent of giving them a bonus
  • They can help you when you start to go off track financial

Sales & Marketing Planning Fundamentals

  • A 12 month to 3 year business plan with key financials
  • A budget
  • Quarterly reporting on performance against budget
  • Tracking and forecasting
  • Some key performance indicators (Proposal to order ratio, length of time prospect to customer, where inquiries came from)

So from a sales and marketing perspective

  • Plan, Plan and Plan some more
  • Understand customers
  • Consider issues of importance and value to a customer
  • Customers are the lifeblood of any organisation make sure your company manages customers appropriately
  • Evaluate and monitor change and adjust accordingly

Why a marketing expert is important to your business needs

  • The will understand the key objectives and drivers
  • They will be genuinely excited by the detail of evaluating customers and identifying what they want and how it can be sold profitably
  • Asking them to identify the most cost effective way of engaging and converting will be the equivalent of giving them a bonus
  • They can help you when you start to go off track by reacting to unsolicited promotional / advertising spend

Manufacturing Business Development

Sales prospecting should be at the heart of every manufacturer

Customer retention is important (its pointless gaining customers if you then lose them) but sales prospecting is an activity that every business should make time for ( if it is looking to survive and thrive). In this article we will look at what many consider the dark art of prospecting and aim to identify approaches to improve its performance.

6 Sales Prospecting Myths

  1. One and done (spraying and praying) – unfortunately prospecting isn’t a one hit wonder, you have to follow up and have a process for progressing
  2. I’ll prospect when I’m done taking care of my existing customers – you need to serve existing customers and prospect
  3. It’s impossible to have dedicated time to prospect
  4. We’ve made it this long without having to prospect – times are changing and to survive you need to prospect and change
  5. If we provide great customer service to our existing customers we wont have to do any prospecting. Unfortunately whilst as a manufacturer or service provider you may  do a great job, we are in turbulent times and a lot of companies ( potentially your customers) are ceasing trading or reducing demand.
  6. Only born salespeople can do prospecting – wrong if you are passionate about your business you can prospect.

Observations from Top Sales People

  • In the past sales was all about closing, now opening is considered the new closing
  • Buyers want to deal with a specialist
  • Buyers know more than ever before – its so easy to research online and get get feedback – “Buyers are knowledgeable”
  • Always act as your authentic self
  • You need to become easier to deal with
  • You’ve got to be a specialist
  • “Its all about the customer, it’s not about what your selling
  • Sales is a marathon and not a sprint – don’t be trying to sell all the while

Prospecting for customers

  • Prospecting is not about going after whoever will talk to you, or whoever you get routed to the first time you break into the company you are trying to reach
  • Prospecting is about focusing your efforts towards the person with the greatest potential to deliver a sale but also a sale at the maximum value

Building Your Platform – Would You Buy From Yourself

Every salesperson should

  • Lead with insight and engage by having a perspective on the customers world
  • Build trust beyond mere rapport with relentless positive intent and business mastery
  • Create value in every conversation backed up with real evidence
  • So would you buy from yourself?

Manufacturing Business Development

If sales prospecting needs to be part of your business strategy as part of your manufacturing business development, but fills you with dread then consider using a third party to help implement.

Lifecycle Marketing Planning
negotiation threat or reward

Approaches To Negotiation – Can You Achieve A Win Win

In an ideal world when negotiating both parties would win. Not only would you get the deal that you wanted but also you would build better relationships.

In this article we consider the neuroscience of negotiation.

What goes wrong at negotiations ?

  1. They never get started
  2. There’s a lack of sincerity between the parties
  3. Anxiety
  4. Emotions become a key component compared to Logic
    • Emotion often accounts for 80% of the decision
    • Facts and Information must be right or that’s an immediate deal breaker

Additional negotiation issues

  • Previous bad history ( memory / habit)
  • Not actively listening
  • Time pressures
  • Not understanding  ( see point above not listening)

The Importance of Emotions

The brain works by expectation not actuality. So what are emotions for – in a very simplistic “cave person” scenario they are there to keep us safe

  • 96% non conscious – survival / fast / actionable/ gut feel
  • 4% conscious – thinking / slow analytical / Note these are very energy hungry  to perform

The fundamental organising principle is to minimise danger and maximise reward

The Negotiation Funnel

Prepare

  • Under pressure the thinking brain shuts down so as in all cases proper preparation prevents p#@s poor performance
  • Make sure you are clear in your objectives both short term and long term. Winning short term my have significant impacts in the future
  • Discover the common ground
  • Pre meeting has been shown to increase the chance of success by as much as 50%. Linked in or Facebook might provide these pre meet / virtual introductions
  • Establish your tradeables ( whats of high value to you but lower value to them)

Discuss

  • What does the other party want? This is where active listening and questioning come into play
  • Build rapport – reward versus threat
  • Be very careful about what you promise. Sometimes in the “excitement” of negotiation we can over promise which may have significant implications post meeting
  • Listen for signals and movement / changes in their stance
  • Look for Win / Win situations and getting to an agreement. Roger Fisher & William Ury wrote a classic book in the early 1980’s Getting To Yes which is still a valid read

Test

  • Test the tradeables, try scenarios “if you could buy xxxxx then I could I consider offering yyyyyy”
  • At this stage don’t disclose the numbers, that way you can retain flexibility and avoid any false expectations.
  • Additionally at this stage don’t give firm commitments provide a range

Trade

  • At this stage of the negotiations this is where you start to quantify discussions “If you could buy 300 units in one delivery then I could consider a 5% discount”
  • This allows for counter offers – the approach “Don’t Use Round Numbers” can help increase credibility of an offer
  • The negotiation is the opportunity to squeeze all parameters – remember get something back for anything you give / concede

Close

  • There are lots of approaches to closing in negotiations. My one main observation is to be aware of “Nibbling”
  • So you think you have concluded and agreed what is happening but there is still ” So you will include ..” taking place
the marketing sales funnel

One Page Business Plan for an SME

A one-page business plan for an SME manufacturer should succinctly capture the key elements of the business strategy, operations, market analysis, and financial projections. While it may not provide an in-depth analysis, it should provide a comprehensive overview of the business. An example of how the content could be structured is shown below

Introduction: The one-page business plan begins with a concise introduction that highlights the purpose of the plan and provides a brief overview of the SME manufacturer. It briefly describes the company’s mission, vision, and core values, setting the tone for the rest of the document.

Company Overview: The company overview section provides a summary of the SME manufacturer, including its legal structure, year of establishment, and key products or services. It emphasizes the unique value proposition that sets the business apart from competitors, such as superior quality, innovative features, or competitive pricing.

Market Analysis: In this section, a brief analysis of the target market and industry landscape is presented. It outlines the characteristics of the target customers and their needs, as well as the size and growth potential of the market. It also highlights any emerging trends or changes in consumer preferences that could impact the business. A mention of competitors and the company’s competitive advantage should be included.

Business Strategy: The business strategy section outlines the key strategies and approaches the SME manufacturer will undertake to achieve its goals. It discusses the core objectives, such as increasing market share, expanding into new markets, or improving operational efficiency. It may also touch upon the marketing and sales strategies, including distribution channels, promotional activities, and customer acquisition plans.

Operations and Production: This section provides an overview of the manufacturing and operational processes. It describes the facilities, equipment, and technology used, highlighting any key differentiators or competitive advantages. It may touch upon the production capacity, quality control measures, and supply chain management to showcase the company’s ability to deliver products consistently and efficiently.

Financial Projections: The financial projections section summarises the expected financial performance of the SME manufacturer over a specific time frame. It includes key metrics such as revenue forecasts, projected costs, and profitability estimates. This section may also highlight the sources of funding or investment required to support the business’s growth objectives.

Conclusion: The one-page business plan concludes with a brief summary that reinforces the business’s value proposition, highlighting its competitive advantages and growth potential. It may also mention any upcoming milestones or strategic initiatives that the SME manufacturer aims to achieve in the near future.

While this example provides a general outline, it’s important to tailor the content to the specific needs and goals of your SME manufacturing business.

Business Planning Issues

Here are some ways to improve the business planning process:

  1. Involve stakeholders: Encourage input and feedback from all relevant parties, including employees, customers, and suppliers.
  2. Set clear goals: Define specific, measurable, achievable, relevant, and time-bound (SMART) goals for your business.
  3. Research thoroughly: Gather data on your market, competitors, and customers to inform your business plan.
  4. Prioritize flexibility: Be prepared to adapt and adjust your plan as circumstances change and new information becomes available.
  5. Use data and analytics: Utilize data and analytics to inform your decisions and track progress towards your goals.
  6. Collaborate and communicate: Foster open and effective communication among team members to ensure everyone is aligned and working towards the same goals.
  7. Review and revise regularly: Regularly review and revise your plan to keep it relevant and up-to-date, and to ensure that you are on track to meet your goals.

By following these steps, you can improve the effectiveness and efficiency of your business planning process, leading to better decision-making, increased efficiency, and improved outcomes for your business.

If you would like to know more about Business Planning contact Andrew Goode MBA, MSc, FCIM Click here to arrange a call

Other articles linked with marketing metrics that may provide additional insight. Marketing metrics and analyticsmarketing ROI Planning , marketing revenue analytics and Marketing Measurement Metrics

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