Coaching on business planning and strategy

The phrase ‘business plan’ means many things to many people. Very often, the first things that spring to mind are profit and cash flow forecasts, proformas available from banks or spreadsheets prepared by accountants.

Too often, those who start with such processes describe their results as ‘works of fiction’.

These forecasts serve a purpose, a very valuable one, which is to test ideas already in place and provide a feedback mechanism, so that initial ideas can be improved and made realistic and feasible. Indeed, the preparation of sound, coherent forecasts is a considerable skill in itself.

However, the numbers must not be the starting point.

Where business planning begins

Something or someone will have prompted a person in, or contemplating being in, business to think about preparing a ‘plan’. The situation might be a start-up or the coming about of a change of some sort – expansion, additional finance, bringing in other people, responding to some change of internal or external circumstances.

Whatever is the case, the starting point initially must be a subjective one. The question is: what do I want, or need, this business to be for me? What do I see it providing for me? And who is ‘me’ – or ‘us’: are others involved, such as family, dependents or some other group of people?

Do I want it to provide me my job and my living for the foreseeable future? Or do I want to build a business one day to sell on? That is, is my job to be building the business rather than working in it?

The answers to these questions we might call our ‘vision’ for the business. What is it going to be?

And the second question is: what do I want this business to do for the outside world? What is the purpose of the enterprise; what is it there to provide for the world? Who is going to buy whatever it is that it supplies? What value does or will the business add that yields a profit?

The answer to this question we might call the business ‘mission’. What is it there to do?

Next two important questions

These are ‘structure’ and ‘culture’. To some extent these flow from the vision and mission, and to some extent they flow from ‘who I am’.

Structure includes both physical and conceptual aspects. For example, ‘who is going to buy’ may be people living in my neighbourhood, in my region, in my continent of further afield. The whatever it supplies might be physical things, services provided personally or something that can be delivered via internet. What is the form and nature or my ‘stall’ – or stalls?

The answers to these questions will have implications for the nature and size of investments needed in real estate, physical and IT equipment and people. In turn, there will be more structural implications, for example what an organisation chart might look like and what legal form might be taken.

Culture sounds a very ‘soft’ consideration, but it is important to think about the ‘personality’ of the business. What will it be like to interact with it as a customer or as a supplier? Equally importantly, what will it be like to be part of? There will be an interaction between the owners’ personal values and hard economics here. But that question ‘who is going to buy’ comes back: how valuable to that ‘who’ will be the shopping experience as opposed to the bald price charged? Obviously, there are customers for up-market cars as well as for cheap, basic ones, even though to some extent the two products fulfil the same needs. Values that mould such businesses as the high street key-cutters and cobblers Timpson can build considerable customer buy-in and loyalty and so enhance stability, profitability and therefore value – not to mention serving a wider social purpose.

The answers to questions like ‘who do we want to be, to whom do we want to appeal, what will it be like to work here’ will have implications which determine how the business is structured.    

Now, and then

Vision, mission, structure and culture are what we are aiming at. These form the objective. But where are we now, and how do we propose to get to where we want to be?

What (internal) strengths and (external) opportunities exist upon which we can capitalise? And to what (external) threats or (internal) weaknesses do we need to pay attention?

Getting from now to then, from here to there, is the subject of business strategy and marketing strategy.

In turn, we break strategies down into coherent, planned steps which we can act on. Today, tomorrow, next week, next month.

The numbers

Sketching out all the foregoing, we have a basis for imagining and modelling the operation. No matter how small and simple, or large and sophisticated, the same applies. ‘Who will buy’ will imply market size, potential unit sales and so on. Value-add times unit sales will suggest potential gross profit. Numbers, skills and seniority of people, the need for provision of training or oversight, physical locations, investment in systems and services all have implications for overhead costs.

And the relationship between the investment made (in people, things and places) and the outcomes (revenue) will determine the need for funding to support the growing enterprise.

Preparing forecast profit and loss projections, balance sheets and cashflows is bookkeeping for an imagined reality; and the three are completely interrelated. It is a task requiring skill and realistic assumptions.

The initial forecasts undoubtedly will provide a wake-up call! This is their value. They will show what doesn’t ‘add up’, and demand iterative review of all that has gone before. In the end, a series of tweaks, compromises and re-thinks will result in forecasts which actually are feasible and a chance of success.

The numbers are not the starting point. But they become an intrinsic part of the process.

How coaching can help

I have I hope explained how business planning stems initially from the heart, from passion, from yearning.

It also is arduous and requires sustained application.

As a chartered accountant of many years’ experience and also as a qualified coach, I can help you go through both the qualitative and the quantitative steps and reiterations towards achieving business success. And I can help you through whatever the aspects and stages of planning and follow-through that present challenges to you.

This is the point of coaching. It’s not so much the technical skills that trip us up: we can learn them or buy them in. It is the internal barriers that defeat us – the past experiences, the self-talk, the unwillingness to get into (this, that or the other) or the not prioritising, or the sheer scale of the task.

If you would like to discuss business coaching generally, or planning and strategy in particular, with me, please make contact.