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THE IMPORTANCE OF
BUSINESS PLANNING
Planning is one of the most important parts of running a business
• Without planning its like starting a journey with no road map
• For small businesses its very easy to neglect planning altogether
• The great thing about planning is it gives you a reference point at any time during your journey
• Planning will also make you think more analytically about your Company and your market place
Don’t think of planning as simply just writing a document, think of it as a holistic view of your business, the market you operate in and the direction you want to go in
1. To plan for an uncertain future - It can help you prepare for all sorts of eventualities
2. To help grow your business - Credible business plans are key when seeking investment
3. To commit to a particular course of action - Helps you to focus on key deliverables
Business planning is an essential activity, regardless of what stage your business is at – it enables you to consider options & opportunities and focus your efforts accordingly
4. To manage cash flow - many business fail because they can’t pay their debts
5. To value your business - This can help when looking to raise capital or to exit
6. To ensure all bases are covered - Its always tempting to just do things then react to events
There are lots of different methods and approaches to Business Planning and they all have their merits
• This is not about telling you that one approach is better than another
• You need to pick an approach or framework which works for you
• That said, we believe there 4 basic building blocks which you need to underpin whichever approach you adopt
Based on our experience we believe that the key to great Business Planning is to understand and carry out the following as well as you can
1. Understand Your Value Chain
2. Conduct Robust Market Analysis
3. Produce Realistic Forecasts
4. Appreciate Your Wider Market Context
Value Chain Market Analysis
Forecasting Macro Context
Business Planning
It can it be described as…
• The sequential set of activities (primary & support) that a business performs to turn inputs into value-added outputs for its customers/consumers
• It was developed by Michael E. Porter 1985 (made his name at the Harvard Business School)
Simply put it means…
• What does it cost to make/provide what your business does and how much to charge for it
Value Chain
Market Analysis
Forecasting Macro
Context
Business Planning
Market Analysis – Do you really need it?
It helps us to understand… • What has happened and what might
happen in the future • What to dial up or indeed what to
stop doing
Sometimes we need to look at.. • Input metrics - things such as
Distribution, Price or Space available • Output metrics - include the likes of
Volume or Rate of Sale (RoS)
Without analysis you may assume things which aren’t necessarily true!
Value Chain
Market Analysis
Forecasting Macro
Context
Business Planning
Forecasts – What are they?
What are forecasts… • They are informed projections • By definition they are never 100% correct • They can be volume or financially based • They can be short, medium or long term
Three basic reasons for forecasts… • Value Based – what a business has to sell
To cover its overheads etc. – See Value Chain • Resource Based – what can the business produce
Usually where output is limited • Market Based – what could the business sell
The most common for established companies
Don’t confuse forecasts with calculated values
Value Chain
Market Analysis
Forecasting Macro
Context
Business Planning
Macro Context – What is it?
Macro context is about… • Monitoring & acknowledging major trends, events etc.
beyond your category which may influence behaviour • Understanding what may have a direct or indirect
impact on what you are trying to do • Appreciating that you don’t operate in a vacuum
Structured approaches which can help with this… • PEST – Political, Economic, Social & Technological • PESTLE – as above but with Legal &
Environmental added! • STEEPLED – more recently Ethics & indeed
Demographics have been added
Don’t worry about which one you use as long as you capture key influences that could impact your business
Value Chain
Market Analysis
Forecasting Macro
Context
Business Planning
£249* plus VAT
£125* plus VAT
Our workshop modules will give you practical help and advice on how to become more confident and proficient with your Business Planning The Value Chain
Have a better understanding of the relationship between COSTS, PRICES & PROFIT. Be able to have a great influence on your businesses profitability.
Forecasting & Projections Analysis & SWOT
Recognize the different approaches and methods you can use to create a FORECAST. Develop more accurate and realistic forecasts to support your business plans and activities. Appreciate why ANALYSIS is important and how to do it well. Know what to dial up or down in your business by constructing more robust S.W.O.T analysis.
Macro Context Understand the importance of knowing about the wider macro context. Know how to conduct a P.E.S.T.L.E analysis in order to understand what may have a direct or indirect impact on what your business is trying to do.
* Cost per delegate based on workshops held at your office
2 modules
4 modules
Value Chain
Market Analysis
Forecasting Macro
Context
Business Planning
