First published at https://businessdoctors.co.uk/business-planning/

Management Team and Structure

Your business is a system where every part impacts the others. Change one thing, and everything else changes. Problems often occur when businesses change one or two things but try to keep everything else the same. Leaders must be clear on the business vision and values and understand their part in fulfilling market needs.

Plotting Your Structure

Consider your current management and organisation structure. Do you have the talent needed to achieve your business plan? Are the right people in the right roles?

Operating Plan

An operational plan ensures a business stays on track. It should include:

• Who should be working on what?
• How to mitigate risks?
• Resource allocation for tasks.
• Internal and external risks facing the business.
• Current roles and how they may need to change to accommodate new plans.

An operational plan may highlight areas needing improvement. For example, if aiming for a 25% production increase, you might need additional mechanical capacity. Plan to increase revenue streams to afford new machinery.

Financial Projections

A financial forecast not only checks the feasibility of your plan but also provides benchmarks for reviewing business activities.

Eight Financial Questions to Ask Yourself

1. What will your next quarter’s turnover and net profit look like? The next year? The next five years?
2. What will the sales split look like across your product lines?
3. How much will your cost of sales be?
4. What is your Gross Profit Margin per product/service?
5. What are your monthly fixed costs and break-even point?
6. Are there exceptional items or purchases planned in the next 12 months, and how will these be financed?
7. How do cash flow and working capital requirements roll forward from month to month?
8. Are there any future sticking points that may need covering with a loan or overdraft?

Setting Your Cash Flow Forecast

Obtain up-to-date financials for the previous year and monthly Profit and Loss Statements. Assess current trading trends. Does seasonality affect sales? Do costs increase during busy periods due to subcontracted labour? Consider recruiting your own employees for cost-effectiveness and control.

Review fixed costs and consider actions to reduce expenses. List immediate actions and plot realistic sales targets for each month. Evaluate how increased sales will affect fixed costs and capacity. Allow for additional marketing, staff, warehousing, equipment, or machinery in your forecast.

Failing to Plan is Planning to Fail

If you understand the importance of a business plan but lack the time to develop one, it may indicate spending too much time working in your business instead of on it. Engaging with professionals to facilitate your planning can be beneficial. Regularly review your plan with key shareholders and communicate it to your staff so they understand their role and expectations.

If you want help with writing and developing your business plan or need more information, please get in touch at info@businessdoctorsmalta.com.mt or call us on +356 79903685.