Strategic planning is a necessity for all businesses if they wish to develop in the most effective and productive way. In the past, Barry Edwards and Associates (BEA) have been involved with many small companies to help provide this important process for the management of the companies it has assisted. It is vital that executive directors make the time to reflect on what is happening in their businesses and how to expand and grow their companies. Many smaller and some larger companies have failed to do this on a regular basis and they have suffered badly as a result.
Large companies usually have the resources to hire management consultants to help them carry out the detailed analysis of their businesses to provide recommendations for improvement and suggestions for development and growth. The most important contribution the professional advisors bring is an outsider’s examination of a company that often looks at the business in a very different way. Sometimes, the management are too closely involved to see the new opportunities available to them and they soon realise the benefits of this independent analysis.
Small companies are constrained by their lack of resources, especially in the earlier years, and many find it difficult to accept that outside advice is worthwhile. The main reason for this is that the main person managing a small business is often the original entrepreneur and is responsible for the growth of the business. They don’t believe someone independent knows enough about their company to help them. However, as companies grow there comes a time when more people have to be employed and senior management has to be brought in. This decision is complex for many entrepreneurs because it poses enormous risk for the company if plans do not work out as expected.
This is often the time when these growing businesses need to find finance to pay for the extra expenditure required while the revenue increases gradually as the new staff get to know the company and start to contribute to the growth of the business. Raising finance is very time consuming and can take a long time. It is at this stage that many entrepreneurs realise they need professional advice and strategic planning becomes a key part of the business plan that has to be prepared to raise finance.
Cash management, forecasting cash flow and strategic planning are vital for all businesses and if practiced properly any company will thrive because they are always aware of the key factors affecting them. It has been a major part of the activity of BEA over the years and this site will publish regular posts about this subject and we look forward to reading your comments.