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There are many businesses and organisations that do not have a strategic plan for a business that they run. In some cases, annual profit/loss budget is the only planning tool available and worse still in most medium-large family owned business even an annual profit/loss budget preparation is considered as an unnecessary burden. In some of these cases, the business succeeds by default, in most cases businesses fail and external factors are always blamed for example, “the bank should have given us more money”, “we should not have lost the last manufacturing contract”, “one of our debtors has gone broke”. In over forty years of business experience, no one hears from a failed business “we did not plan”.
Strategic planning is critical to business success and it is different from classic business planning. That is, business planning comes after strategic planning. Whilst strategic planning involves discussion and agreement on vision, mission and outside-of-the-box thinking, business planning focuses on the operational activities that need to be completed that assist with working towards the vision and the achievement of the mission.
At Benchmark we are often asked, “what can you do for our business”? The response is normally answered by another question: “where is your business currently and where do you want it to be”? In most cases, the owners only have vague idea about where they are in the market place and for the future their only “plan” is to grow and be profitable. However there is no formal plan to achieve growth and become profitable.
In these cases, before we request a commitment from the company to any services that we may offer or fees we may charge we offer to invest time in understanding the business through meetings with senior staff/owners and completion of financial analysis (normally five years results). Many owners are shocked by the poor performance of their business from this analysis. The initial results are then used as the basis for discussion about the weaknesses of current pricing, cost and balance sheet structures. It is also a good way to demonstrate the negative impact of lack of planning or poor planning.
In these situations we recommend the preparation of strategic plan and the business plans that fall-out of this process. They key to all business and non-commercial organisations is to have: (i) strategy; and (ii) business plans that are linked to achieving the strategy. If your company has no formal plans, please consider our approach.

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