Research published last month found that the majority of medium sized businesses have done little to no planning for Britain’s exit of the European Union, and their smaller counterparts are even less prepared.
The Federation of Small Businesses has warned that smaller companies will be “the least able to cope” with such a “cliff-edge moment”.
In order to survive and thrive in this challenging environment, UK SMEs should review their business strategies and put in place plans to enable them to adapt quickly to the changing economic and operating conditions.
5 key factors to successful strategic planning and execution
Failing to plan, plan to fail. We all know this. However, many businesses that create a strategy or business plan fail to execute it to any significant degree. This is because it requires change, commitment, innovation, leadership and numerous other things to align your business in a way that facilitates the execution of your plan.
These 5 steps will help you to successfully execute your business strategy:
- Clarify your vision
Define what the business will look like if your strategy is executed successfully. Develop a summary of that vision and communicate it to all stakeholders. Communication must also be consistent – keep the vision in front of your team and make it a part of their daily lives. People cannot follow you successfully if they don’t know where you want to go.
- Set goals
As part of your planning process, you should develop four or five critical goal categories. Each of these categories should be broken down and given specific goals with due dates, metrics to show progress and the names of the people that are accountable for their completion.
- Align systems and people
This is the step where most businesses encounter trouble with strategy execution, as they do not take the critical step of aligning people and processes to attain their vision. They just assume that the firm will “figure it out”. All systems, people, incentives and business processes must be aligned with the new strategy. People must understand what they need to do and how their role affects successful execution of the strategy. They must get help in establishing priorities on what to do, as well as what not to do, to ensure that the overall strategy doesn’t get lost in the day-to-day.
The business should hold annual reviews of their current strategy and how outside forces have impacted on it. The aim of the review should be to determine whether the strategy is still valid, whether the firm is making adequate progress and what customers think. Strategy execution doesn’t just happen; it must be driven with the same commitment that built the business in the first place.
- Partner with expert advisers
In this rapidly changing economic landscape, it is essential that business owners partner with advisers who understand your business and the environment you operate in, and can help you navigate your challenges – no matter the size or stage of your business.
Business owners and managers must be aware of income and expenditure by keeping proper records and monitoring trends and patterns. Profit and loss accounts will help you understand how your business is progressing, as well as alert you to any potential issues which might arise, giving you ample warning to rectify the problems or make the necessary adjustments to keep your business on track and successful.
At Beavis Morgan, our specialists to SMEs are available to provide general business advice and to structure your business for tax. We can also assist with business plans and strategy execution, long and short term forecasts, budgets, sensitivity analysis, and calculating and checking compliance with covenants.