When you started your business, your single priority may have been keeping your nose just above the water line. You may even have been a bit surprised when you made it to your one-year anniversary. Now? You’re no longer clawing your way to the next business day, but that doesn’t mean you’re safely out of any danger zone.
That’s because you don’t have a strategic business plan. It’s not that you don’t have any plan at all, because if you’ve failed to take a strategic approach, you’re planning for a lot of events. Let’s dive in.
A Lot of Hiring and Onboarding: When you don’t have a strategic business plan, your employees are not unified around a mission and vision for the company. They may have a solid understanding of their responsibilities, which is fine as long as everything is running smoothly. But as soon as they experience ongoing frustrations, either with processes or people, they may not have a clear and personal connection to the work that you are doing.
The result? They will be an easy target for a competitor who’s looking for your best talent and can present a company culture and values that look attractive to someone who wants more than a punched timecard. You will have trouble keeping your company staffed and will spend a lot of time and effort trying to recruit talent.
A Putting-Out-Fires Culture: A lack of a strategic business plan sets your company up for a lot of disorganized, reactive behaviors. Here’s a minor example: Rather than planning ahead for office supplies, according to a carefully designed budget, your employees are forced to regularly run out to pick up printer paper, staples, or paper towels. And because they are in a hurry, they don’t get the best price possible. They get whatever the price is at the first store they entered.
This scenario continues to repeat across all segments and categories of your business, and before long, you’re spending much of your time accommodating inconveniences and apologizing to clients for mistakes.
Across your organization, productivity suffers. Your employees aren’t completing projects or brainstorming about how to best approach an upcoming promotion; they’re too busy trying to clean up messes.
Missed Opportunities: The warehouse next door is being vacated next month. Should you secure a loan to purchase it?
It’s been years since you’ve had your manufacturing line evaluated for efficiency, but you suspect that a consultation would be expensive, never mind the improvements they will recommend.
There was a talented college student who worked summers in your office, and now he’s graduating. You hate to lose him to another company and would love to find a place for him, but you aren’t sure if another full-time position is going to put too much pressure on your cash flow.
Each of these examples represents the kinds of missed opportunities that occur when you don’t have a strategic business plan. If you were working with an experienced CFO, they would be able to offer advice and insights about the risks and rewards of each of these scenarios. You would likely still be forced to pass up some opportunities, but you would have confidence that it was the right decision for your circumstances.
Being at the Mercy of the Market: Market shifts can throw an unprepared business into instability. A significant shift in the global economy, such as what occurred in 2020, can be devastating.
A strategic business plan will include provisions for changes outside your control, such as changes in demand or supply chains. It will factor in how changing fuel costs or trends in technology could impact your business.
Loss of Stakeholders: Whether it’s someone who invested financially in your business or a mentor who guides your career, it’s important to build transparency and trust with those who invest in your company. Without a strategic business plan, you begin to lose credibility as a business owner, and you’ll likely notice that people who were initially excited to watch you succeed have become less enthusiastic.
Uninformed Decisions: It can happen when a potential client asks for a particular deal, and you don’t know if you can swing it. You end up losing out to a competitor. Or it may be a realization that rather than purchase a new piece of equipment last spring, you should have used that unexpected cash to pay off a loan.
There are always unknowns in a business decision, but it’s your responsibility to be as informed as possible so you don’t make decisions you’ll regret. A CFO can develop a strategic business plan that allows you to see a clear path forward and which decisions will help you get around the next bend.
Always Seeing the Backs of Your Competitors: Without a strategic business plan, you will never be at the front of the pack. For instance, your budget isn’t up to date, so you don’t invest in new technology. Your marketing team doesn’t feel empowered to take risks, so they are always imitating well-established social media trends, rather than trailblazing and making a bold impression on audiences.
Without a clear strategy based on a solid concept of what makes your business unique, you will not be able to establish yourself as a leader in your market.
Wasted Resources: You think you don’t plan for wasted resources; they just happen. But how can you run your business at optimal capacity if you don’t know what that sweet spot is? If you’re in an industry like healthcare or hospitality where occupancy is a factor, are you making the most of the space you have?
From storage closets that store obsolete tech equipment to redundant business processes, there are many areas that could be addressed to eliminate waste. Working with a CFO can help mobilize your team to evaluate and eliminate waste so that your resources are all being funneled to drive growth.
You don’t have to experience all the effects of not planning. And it doesn’t require hiring an accounting team or even one in-house CFO to get your business on the right path. When you work with The Power CFO, you have access to fractional CFO services, which means you can build a strategic business plan with a CFO and then schedule more assistance as you need it. Contact us to learn more.
Kommentarer