Why a timeline or timetable is essential for implementing your business plan

Why a timeline or timetable is essential for implementing your business plan

In building your business, do you ever:

  • Feel out of control – you’re getting by, dealing with one crisis after another, but just barely hanging on?
  • Find that your longstanding products and services just aren’t selling like they used to, but you can’t find time to develop new offerings?
  • Think about retiring after selling out to a group of your employees, but you know that they (and you) are nowhere near to making that possible? (see our post on exiting your business for more on that)

A big step towards resolving these issues, and many others, is to have a business plan – an effective business plan.

Many businesses get by without one. “It’s in my head,” you might say. Or, it could be a document you put together years ago, maybe because your bank required it to extend financing, and you haven’t looked at it since.

But as the CFO Centre’s e-book “Business planning and strategy implementation” points out, according to a survey by business and finance software provider Exact, companies that have a business plan in place were more than twice as successful at achieving their goals than those that did not (a 69% success rate versus 31%).

What’s wrong with many business plans?

If having a business plan is so important, how can your company get the best possible benefit out of the work that goes into preparing one?

Our work here at the CFO Centre has found that while having a business plan helps, there are some important elements to success (many of these are presented in more detail in the e-book).

One is that the plan must be a living document – it needs to be something that you review frequently, updating it as circumstances change, and using it to provide guidance on what your daily, monthly and yearly priorities should be.

Another aspect of success, believe it or not, involves packaging. You may be aware that a business plan that is used as a finance-obtaining tool will succeed more if it features attractive layout and design. But having a document that’s pleasant to look at – not just text on a page – will work better even if it’s just used internally. That’s because the people who read it, including you, will have a greater sense of confidence that the ideas in it can be made to happen.

How a timeline helps make it all happen

But the one important aspect, that many business plans miss, is the element of time. Without a clear picture of what is to happen by what time, a business plan is just a wish-list.

The best way to help make sure that the business plan stays alive – and more importantly so that what’s in it comes to pass – is through including a timeline.

A timeline (or timetable, if you prefer) sets out the milestones of your business plan – the number of employees, number of locations, sales targets, net revenue expected and other targets – and indicates what date they are expected to be reached.

For example, let’s say you have a winning retail concept that you want to turn into a franchise. Maybe even a national franchise.

To do that, you need to determine what processes need to be implemented in order to manage a store like yours effectively. That, in turn, leads to a set of written procedures –  such as the steps to be taken upon opening the store or on closing, how to make each of the products that are sold, and other aspects of success. Maybe then you need to establish a time by which you expect to have that first satellite operation running, maybe as a corporate-owned location, just to see what happens when you’re not on site to trouble-shoot all the time.

It could be that this sounds so complicated and intimidating that you never actually get your franchising idea off the ground.

Here’s how a timeline helps make your business plan happen:

  • It breaks down big, scary projects into smaller, bite-sized chunks you can actually do
  • It reassures you by pointing out that you don’t need to do everything right now
  • It moves you along because you see a deadline for one of those “chunks” coming up, so you can get working on it

Start with the end in mind, then work backward

This involves a  5  step process.

  1. Get a firm image of your goal. Established business wisdom says to consider first where you want to be (say, 20 franchise outlets across the country, ten years from now) and then spell out in detail what that will look like. Going into detail gives you a more clear idea of what needs to be in place for that to happen. Set a date for that to happen.

 

  1. Determine the big milestones along the way. This might include writing out the elements of success in your current business, creating written procedures, testing those procedures to see if they cover all reasonable contingencies, opening a second outlet to further test those procedures, selling your first franchise to someone you know already, and onwards.

 

  1. Think of the resources you’ll need. For example, at some point, you’ll need to engage a franchise lawyer to consult and help in the preparation of a franchise agreement. Think of the finance you’ll need to have in place, maybe from a bank or friend-or-family source, to make the rest happen (to learn more about how to avoid cash-flow problems that might drag you down, see our post here).

 

  1. Write out your timeline. It might be on paper, on a computerized document, on a calendar program that will remind you about deadlines, or whatever works for you. Maybe multiple formats will be a good way to keep you on track.

 

  1. Implement. The rest is up to you and your team. Delegate tasks, outsource, do it yourself – but be sure to stay with your timeline.

Votre projet d’entreprise perturbe-t-il suffisamment les habitudes?

Votre projet d’entreprise perturbe-t-il suffisamment les habitudes?

À vos yeux, les services de réservation de voiture avec chauffeur comme Uber et Lyft sont des brutes arrogantes… ou apportent au contraire un vent de fraîcheur dans un monde tenu en otage par des dinosaures surréglementés?

Quel que soit votre point de vue, vous ne pouvez pas nier que la réservation de voitures avec chauffeur a perturbé les habitudes au sein de toute une industrie. Certaines compagnies de taxis ont essayé de concurrencer les nouveaux venus par le biais d’applications mobiles de type covoiturage qui permettent aux clients de sélectionner certaines options associées aux véhicules, de réserver leur course ou de payer par l’entremise de leur téléphone intelligent.

Pourquoi les services de réservation de voiture avec chauffeur, qui faisaient face à une opposition bien établie, ont-ils réussi? L’idée qu’ils véhiculent est novatrice, mais, plus important encore, elle offre de réels avantages par rapport aux taxis traditionnels. En bref, elle perturbe les habitudes.

Comme nous le verrons plus loin, le simple fait de perturber les habitudes ne suffit pas en soi, mais il constitue un élément indispensable pour réussir.

Proposez une meilleure expérience client en perturbant les habitudes

Pour mieux comprendre, prenons l’exemple de l’un des savoir-faire les plus anciens qui soit, la « menuiserie », ou « l’ébénisterie », selon la région du monde dans laquelle on se situe. Cette activité consiste à fabriquer des meubles, des armoires pour les cuisines et les salles de bains, et d’autres objets raffinés en bois. C’est un processus lent et méticuleux dans le cadre duquel des gens compétents utilisent des outils qui ont peu changé au fil des siècles.

Jusqu’à ce que quelqu’un révolutionne cet environnement empreint de traditions en adoptant une approche radicalement nouvelle pour ce secteur. Comme le raconte l’entrepreneur Alex Craster dans le livre  « Scale Up » du Centre CFO, il avait déjà contribué à perturber les habitudes d’une autre industrie — les agences de voyages — avec l’idée, novatrice à l’époque, que les gens réservent leur propre voyage en ligne.

M. Craster évoque les circonstances qui l’ont conduit à prendre les rênes de l’entreprise de menuiserie en difficulté de son père. Il a néanmoins flairé le potentiel qu’avait l’entreprise de proposer de meilleurs services tout en répondant à de nouveaux besoins. Il a ainsi commencé à faire appel à des fournisseurs d’Europe de l’Est hautement qualifiés en mesure de travailler à une fraction du coût des fournisseurs britanniques. Il a par ailleurs recentré les activités de l’entreprise afin qu’elle solutionne les problèmes rencontrés par ses clients au lieu de fabriquer des produits.

Il en a résulté une croissance spectaculaire et même une invitation à fournir des services à Buckingham Palace.

Pourquoi le fait de perturber ainsi les habitudes joue-t-il aujourd’hui un rôle si important dans la réussite commerciale? La réponse se résume à deux concepts : il faut quelque chose de nouveau et il faut quelque chose de mieux.

Retenez l’attention des personnes que vous voulez attirer

Commençons par la notion de « nouveauté ».

Une armoire de cuisine bien faite ressemble à peu près à n’importe quelle autre armoire de cuisine bien faite. D’une certaine façon, l’ébénisterie est une marchandise — il est difficile pour un client de distinguer l’offre d’une entreprise de celle d’une autre. Il en résulte un nivellement des prix par le bas.

Pour attirer l’attention de clients potentiels, l’entreprise d’Alex Craster devait proposer quelque chose de nouveau sur le marché : un service dans le cadre duquel les représentants de l’entreprise s’assoient avec leurs clients potentiels pour avoir une idée des problèmes qu’ils rencontrent. Il pourrait s’agir d’un hôtel désireux d’attirer une clientèle plus aisée, par exemple. C’est cette approche qui a rendu l’entreprise digne d’intérêt et qui lui a permis de se faire connaître, par le biais du bouche-à-oreille.

L’approche adoptée par l’entreprise l’a rendue plus attrayante aux yeux des médias traditionnels. Mais elle avait aussi le potentiel d’attirer une attention de plus en plus prisée, à savoir celle des médias sociaux, y compris des blogueurs et des « Instagrammeurs ».

Le simple fait d’adopter une approche nouvelle a ainsi fait connaître l’entreprise auprès de clients potentiels.

Comment conserver l’attention des clients potentiels

Une fois que vous avez retenu l’attention des gens que vous voulez attirer, comment faire pour la conserver? En leur offrant quelque chose qu’ils apprécieront; quelque chose qui, en plus d’être nouveau, est manifestement meilleur que ce qu’ils ont actuellement.

L’approche d’Alex Craster, qui a consisté à consulter le client et à comprendre quels étaient ses objectifs commerciaux, a fortement aidé l’hôtel à atteindre son objectif, qui était de pouvoir facturer un tarif de chambre plus élevé et d’améliorer le RevPAR (revenu par chambre disponible) de l’hôtel, un indicateur absolument capital.

De la même façon, vous devez vous assurer que votre projet d’entreprise offre des avantages réels aux personnes que vous voulez servir.

Commencez par comprendre leur situation. Cernez certains des problèmes les plus urgents auxquels vos clients sont confrontés. C’est important, parce que si vous ne pouvez pas leur présenter une solution en mesure de répondre à l’un de leurs problèmes les plus urgents, ni même une ébauche de solution, elles vont détourner leur attention.

L’étape suivante consiste à choisir un problème sur lequel travailler, comme l’augmentation du RevPAR d’un hôtel, plutôt qu’un service ou un produit à offrir.

Votre approche doit tourner autour de la résolution de ce problème et votre produit ou service doit faire partie intégrante de cette solution. Si vous proposez une solution nettement supérieure à celle dont disposent vos clients potentiels, vos chances de réussite seront élevées.

Il est essentiel de planifier

Ce que nous venons d’évoquer — trouver quelque chose de nouveau et de meilleur — n’arrive pas du jour au lendemain et nécessite au contraire beaucoup de réflexion. Il faut du temps pour aligner les atouts dont vous disposez — vos compétences, celles des personnes avec lesquelles vous travaillez, votre expérience et d’autres facteurs — aux besoins de vos clients potentiels.

À ce stade, les ressources financières auxquelles vous avez accès jouent un rôle crucial. Une bonne appréhension de votre situation financière vous permettra d’identifier vos forces et vos limites financières et ainsi de savoir combien vous pouvez dépenser tout en payant votre loyer et votre personnel.

Aux yeux de nombreuses entreprises en croissance, le meilleur moyen de s’assurer de disposer des ressources financières dont elles ont besoin consiste à faire appel à un professionnel qualifié en finances : un CFO. Ce dernier pourra en effet les aider à appréhender leur situation financière et, au besoin, à obtenir d’autres sources de financement grâce auxquelles elles pourront plus facilement saisir des occasions de croissance « en perturbant les habitudes ».

Pour de nombreuses entreprises, la meilleure option consiste à avoir à leur disposition un CFO expérimenté, à long terme, sans pour autant avoir à verser la rémunération que serait en droit d’attendre un professionnel à temps plein. En faisant appel à un CFO à temps partiel, elles disposent des compétences dont elles ont besoin, tout en réalisant des économies substantielles.

Understanding Business Risk – How to Avoid the Road to Ruin

Understanding Business Risk – How to Avoid the Road to Ruin

Entrepreneurship means taking risks, such as launching new products, entering new markets, or using new processes. Because this involves uncertainty, there are always chances that things will go wrong.

Our experience at the CFO Centre has been that the most successful companies take the time to understand the downside of the risks they take, and then find a way to compensate for those downsides.

As the CFO Cente’s book “Scale Up” says, a lot of business owners spend an unhealthy amount of time worrying about what might go wrong, but don’t have a formal risk management framework in place.  One of the most dangerous positions to be in is not knowing what might harm you. That’s why “Scale Up” suggests starting with a comprehensive risk analysis, to identify potential risks to your business.

This post talks about how you can understand the risks your company faces, and develop a way to manage those risks.

Why is business risk analysis important to you?

Business risk analysis is an essential part of the planning process. It reveals all the hidden hazards, which occupy the business owner’s mind on a subconscious level but which have not been carefully considered and documented on a conscious level.

Not understanding the risks your company faces can bring your company to its knees, as a 2011 report, ‘The Road to Ruin’ from Cass Business School revealed.

Alan Punter, a visiting Professor of Risk Finance at Cass Business School, said the result of a detailed analysis of 18 business crises during which enterprises failed revealed that directors were often unaware of the risks they faced.[1]

“Seven of the firms collapsed and three had to be rescued by the state while most of the rest suffered large losses and significant damage to their reputations,” he said.

“About 20 Chief Executives and Chairmen subsequently lost their jobs, and many Non-Executive Directors (NEDs) were removed or resigned in the aftermath of the crises. In almost all cases, the companies and/or board members personally were fined, and executives were given prison sentences in four cases.”

“One of our main goals was to identify whether these failures were random or had elements in common.”

“And our conclusion? To quote Paul Hopkin of Airmic, the Risk Management Association that commissioned the research: ‘This report makes clear that there is a pattern to the apparently disconnected circumstances that cause companies in completely different areas to fail. In simple terms, directors are too often blind to the risks they face.’”

A lot of business owners spend an unhealthy amount of their time worrying about what might go wrong but don’t have a formal risk management framework in place. It is dangerous not knowing what might go wrong.

What are the risks facing your business?

Business risks can be broken up into the following:

  • Strategic risks – risks that are associated with operating in a particular industry
  • Compliance risks – risks that are associated with the need to comply with laws and regulations.
  • Financial risks – risks that are associated with the financial structure of your business, the transactions your business makes, and the financial systems you have in place
  • Operational risks – risks that are associated with your business’ operational and administrative procedures.
  • Market/Environmental risks – external risks that a company has little control over such as major storms or natural disasters, the global financial crisis, changes in government legislation or policies.[2]

The ‘shoot, fire, aim’ approach favored by many entrepreneurs is great for making things happen quickly but often jeopardizes the long-term stability of the business.

What is needed is balance.

Once the business understands the risks, it means that it can move forward decisively and confidently. It’s hard to do this when there is a cloud of confusion hanging over the business.

Where to start?

You need to assess your business and identify potential risks. Once you understand the extent of possible risks, you will be able to develop cost-effective and realistic strategies for dealing with them. Consider your critical business activities, including your staff, key services and resources, and the things that could affect them (for example, illness, natural disaster, power failures, etc.). Doing this assessment will help you to work out which aspects of your business could not operate without.

Identify the risks

Look at your business plan and determine what you cannot do without and what type of incidents could have an adverse impact on those areas. Ask yourself whether the risks are internal or external. When, how, why and where are risks likely to occur in your business? Who might be affected or involved if an accident occurs?

Assess your processes

Evaluate your work processes (use inspections, checklists, and flow charts). Identify each step in your processes and think about the associated risks. What would stop each step from happening? How would that affect the rest of the process?

Analyzing the level of risk

Once you’ve identified risks relating to your business, you’ll need to analyze their likelihood and consequences, and then come up with options for managing them.  You need to separate small risks that may be acceptable from significant risks that must be managed immediately.

You need to consider:

  • How important each activity is to your business
  • The amount of control you have over the risk
  • Potential losses to your business
  • The benefits or opportunities presented by the risk

Conclusion

By managing the company’s risk profile and the risk profiles of the shareholders the whole business can be brought into alignment and can operate as a unit rather than as a set of individual parts.

This is actually one of the most critical roles in any business and your part-time CFO will support and guide you through the process.

At the CFO Centre, our CFOs have an intimate understanding of every conceivable risk that growing businesses face. This means that we can help you build a much stronger business by knowing how to navigate through the growth stages of the business cycle confident that you are equipped to meet the challenges as they present themselves.

It is never possible to eliminate all risks in a business, but it is possible to create a framework and implement systems which lower your exposure to risk. That, in turn, allows you to focus primarily on growing your business.

Knowing that you have a framework in place to mitigate risk means that you can free up time and mental energy.

Lower your risk today

Let one of The CFO Centre’s part-time CFOs help you with business risk analysis. To book your free one-to-one call with one of our part-time CFOs just click here.

 

 

[1]The Road to Ruin’, Punter, Alan, Financial Director, www.financialdirector.co.uk, Aug 18, 2011

[2] Source: https://toolkit.smallbiz.nsw.gov.au