Helping enterprises to devise, implement and deliver Strategic Business Plans and Major Projects, Business Turnarounds and all Business Improvement goals.
TAKING YOUR BUSINESS TO THE NEXT LEVEL
The classic line everyone has heard of is that “Failing to Plan is Planning to Fail”.
The sad fact is that far too many businesses (surprisingly, even some quite large companies) have no formal business plan or strategic plan. There may be a great deal of knowledge inside the head of an entrepreneurial businessman, but it’s not very common that he has the time or inclination to sit and write out a structured Strategic Plan. After all there are too many things to get done when you are running a business – right?
Here is the thing.
It does not need to be complicated
Your plan is unique to you. It fits your goals and sets out a road map to get there – on your terms.
Investigating some recent government statistics, one in three small businesses that existed in Australia in 2007 were no longer operating by 2012 – after the GFC. While for medium and large businesses that failure rate figure was closer to one in four. These businesses were in three broad bands – by employee numbers – 1-19 employees; 20-199 employees; and 200+ employees.
What that seems to say is that even larger businesses suffer from the same traps and shortcomings that the more junior or inexperienced companies face – 75% survival rate through a period of economic stress. Mind you, Australia was largely spared the worst of the downturn during the Global Financial Crisis [GFC] of 2008/9.
More recent figures show that there has been an increase in the number of businesses that are failing, in fact this is the highest level in the past 4 years and shows a 42% increase between Q2 and Q3 of 2016.
Most business failures are due to problems in three broad areas:
- Lack of Capital
- Lack of Cashflow
- Lack of Strategic direction
Seek out support in these areas if you have gaps that need filling.
Just being part of the dynamic and ever-changing economy is a challenge. Trying to run a business successfully and take it to the next level of sustainability and stability is almost impossible without the right tools and plans. So whether you are going to build a shed, a skyscraper or an empire there has to be a plan, and there are a bunch of recommended tools.
These tools and methods take the pain out of preparing that plan, and more importantly, take the pain out of failing to prepare!
Creating a properly structured Strategic Plan on the back of a great Vision that is cemented throughout the Culture of the business is the only way to ensure profitable sustainability.
Strategic Plans set a destination and along the way these living documents are used to guide decisions that are aligned to that result. Clearly there are far too many senior businesses that fail to plan, or fail due to lack of commitment to follow that plan.
Even when the unexpected happens (look at the last GFC) the businesses most likely to thrive and grasp the opportunities that arise when competitors struggle, would have had a plan for that. Plan A is to grow the business. Plan B is to take the actions to ensure success if the unexpected happens. Both Plan A and Plan B should be part of the risk mitigation process that a good strategic plan sets out.
Here is a list of the 11 most common causes of business failure for medium enterprises, and regardless of industry, these causes of failure are a result of lack of management skills or proper capitalization:
- Choosing a business that in not very profitable
- Inadequate cash reserves
- Failure to correctly anticipate cash flow or manage credit risk
- Failure to price product or services correctly
- Failure to define market and understand customers’ and buyers’ habits
- Failure to anticipate competition, technology or marketplace changes
- Generalisation of service rather than a focus on a profitable niche
- Over dependence on single customer or product
- Uncontrolled growth
- Believing you can do everything yourself, OR
- Putting up with people who cannot perform what they are hired to do
Now, I can’t see a single item in that list that cannot be overcome.
You simply need to enhance your skills and understanding in a few areas that will make a difference.
As a business owner it’s your job to ensure you manage the risks and opportunities that your business will face. These challenges tend to come thick and fast, but without the formulation of some plan to overcome these issues your business will become unstable. Then, you will be fighting fires just to maintain performance and keep your head above water – when what you should be doing is rising above the competition as they struggle!
Put a Strategic Plan in place. Now.
Take steps to work with someone who can fill the gaps for you.
Think about how you can avoid known pitfalls, and spend your sleepless nights thinking about the best Strategy to take advantage of the next opportunity, rather than spending sleepless nights thinking about how to survive…
Have a look here for Free Resources to help you get unstuck!
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