Strategic planning – out with the old and in with the new?
In today’s uncertain economic conditions it is extremely important that you plan properly to ensure that your business remains profitable, especially the small to medium size enterprises that are struggling with cash flow management and ever increasing costs in running your business. This is not an isolated event and certainly not restricted to South Africa only. Over the last few years we have all seen the various markets change and it affects all businesses globally.
A question to you as business owner or executive: Have you planned for the future of your business? And if so, what is your planning time frame? Five years? Seven years? Five-year strategic plans (or longer in some cases) are a thing of the past. One- to three- year planning and visions are in!! It all depends on the life cycle of your business and logically start-up businesses work to shorter cycles than established companies. The younger your company, the shorter your planning time frame should be. If, for instance, you are moving from survival to growth phase then you are probably a bit safer with a three-year horizon.
Regardless of which phase your business is currently in, short term planning is the order of the day. Strategic plans should be reviewed at least annually, but preferably on a six monthly basis to ensure that you are moving in the right direction from an operational perspective. No point in having a strategic plan yet operationally you are moving in a different direction.
The fact is most successful organisations now plan on a quarterly basis and those “old” annual business plans are updated on a more frequent basis. We have to accept that we are all operating in a fast-changing environment and that requires constant planning and review of business plans (i.e. budgets, forecasts, capital planning, cash flow management, resource management, client relationship management, data and software management etc.).
Our research into South African SME’s (small to medium size enterprises) to date have shown that most of these organisations have no formal business plans in place. Or those that do have are very complacent, stating things like: “I’m happy with my planning”, or even worse: “I don’t need a formal business plan”.
It is time for all SME’s to wake up and start planning for the future success of their business. The worst action you can take now is to take no action at all. Please make use of our “one hour free” special and contact us to further discuss your business needs.