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The Importance of Business Planning

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Article by: Sara Pantaleo

An effective strategy and plan are key to success in any business. Plans can help you set goals for your company and develop the best strategy for your organisation’s future, so it’s worth taking your time to develop a solid business plan. Planning is key to making sure your business strategy will be a success!

Business Planning

Setting & Communicating Goals      

A sound business plan should ensure a high communication and transparency level. Strategic planning is essential to any business but often fails when communicating these goals to your wider organisation. It can be challenging for those outside decision-making teams to understand why they should care about your goals; this part of developing a plan is worth carefully planning; with the right communication, the strategy will likely succeed.

To have a successful communication plan to back up your strategy goals, mission, vision and so on, it’s essential for the message to be clear and concise without being too simple or complex to get a wider buyer in.

Some of the ways this can be achieved are:

  • Have a company-wide meeting.
  • Detail matters. Think through how any changes may be perceived; people often react negatively to change, so this needs to be thought through, and anything of this nature can be addressed immediately.
  • Go over the Company’s history and vision and how the plan will help drive everyone there. Ensure everyone is aligned around the values that drive the team forward. We need to talk not only about how strategy plays a vital role in growth but also give context around what has led up until now and the challenges faced by this company. In doing so, your team will understand why any changes are necessary.

Avoid failure   

The lack of a strong business plan usually causes small businesses to fail. You must develop one because it will help avoid many potential problems in your company and ensure everything goes smoothly for years to come!

Reducing risk

The most important decisions a business owner can make are based on research and information from an effective plan. That’s why it is critical to have one in place before starting your own company, so you know what could go wrong or right when things really matter! Strategic planning minimises blind spots and mitigates risk.


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What’s Included in a Business Strategy?

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Article by: Sara Pantaleo

A business strategy is a plan that helps you make wise decisions about your company’s future. It provides principles, methods and tactics for taking these actions within an organisation so it can be successful in its goal – growing!

Running a successful company is no easy task. As the owner or CEO, you must be able to understand your business and advocate for its success with investors and other stakeholders to get them on board- which means creating a business strategy that makes sense! In this article, we’ll discuss what exactly makes up one’s “strategy”, why it’s important and the different components of a business strategy to help you generate ideas for your own company.

Developing a good business strategy can be difficult, but once you have it in place, there are many ways to ensure your company is successful.

Developing Business Strategy

Vision, objectives and values

A business strategy can be a powerful tool for reaching your goals. The vision part of the strategic plan provides a clear direction. It enables you to develop tactical instructions that will guide what tasks need completion from which resources and who is responsible for them if they are completed successfully!

Business Leader

SWOT Analysis

The backbone of any successful business understands its strengths, weaknesses and opportunities. This helps to define where you can win with your current situation and areas that need improvement for the organisation’s goals to be met.

A critical part of the SWOT process involves being humble enough. Hence, there aren’t vanity goals that might cost more money than necessary because they were done without considering everything with a high level of self-awareness beforehand!

Execution and Measuring

Execution tactics and resources are the operational backbones of any successful business strategy. They ensure that time and effort won’t be wasted by not meeting goals and that resources are allocated correctly because managers know what needs to happen at each step for their plan’s success!

Backing this up is the measuring and evaluation phase, when you’re given the opportunity to review how well your company has been doing in relation to its strategic goals.

This can be done through measurement, ensuring that decisions are made based on solid data, not just opinion or emotion.

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Why is Business Strategy Important

Why is Business Strategy Important

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Article by: Sara Pantaleo

Businesses tell me that they have no time to work on business strategy. The reality is that businesses can feel rudderless without a business strategy. A business strategy is a great way to help an organisation achieve goals, and define its methods and tactics. A business strategy needs to include the whole team and become what you do every day and not something that gets done occasionally.

Business Strategy

What is a business strategy?

A business strategy is a set of objectives that articulate the organisation’s business plans. A business strategy also defines what the organisation needs to do to achieve the goals and will guide the way. This helps for better decision-making and workforce planning, and resource allocation.   A business strategy guides all the organisation’s departments in a clear set of critical responsible areas (KRAs) and working together to achieve the organisation’s goals. 

It is essential to create a business strategy aligned to your organisation’s purpose, vision, mission and values to ensure that your strategic objectives align with your culture and meet your customers’ needs.

What are the key considerations for creating an effective business strategy?

When creating a business strategy, it is essential to have insight into your organisation, foresight into the environment around you, and opportunities for future planning. This will involve using tools such as SWOT to assess where your organisation is at a point in time and research your current and future sources of sustainable growth and innovations. Assess the external factors that may impact your organisation or industry, such as:

  1. Connected all the time – what does this mean to employee wellbeing and delivering to your customers
  2. The information age – are you aware of all the latest industry innovations
  3. Artificial Intelligence (AI) and robotics
  4. Codification of money
  5. Cybersecurity
  6. Life Sciences
  7. Climate change

Getting the whole team together early in the process will ensure that you consider all the essential factors such as the strengths and weaknesses, create or review the vision and identify your top big hairy audacious goals (BHAG). In addition, the process will help you determine where you are now, the external factors to consider, where you want to go, and how to get there. 

Elements of Business Strategy

Basic Business Strategy Planning Process

  1. Planning Awareness
  2. Formulating goals
  3. Analysing the external environment
  4. Analysing the internal environment
  5. Identifying strategic opportunities and threats
  6. Performing gap analysis – create a strategy that leverages your strengths and identifies any gaps that need to be addressed.
  7. Developing alternative strategies – is essential also to building contingencies.
  8. Implementing strategies – creating a business action plan, including all stakeholders, is crucial to executing your strategy.
  9. Measuring and controlling the progress

Planning and awareness – A business strategy helps you identify the key steps to reach your business goals. Setting big goals is essential to stay focused on achieving your objectives.

Efficiency – A business strategy allows you to allocate resources effectively for your business activities, automatically making you more efficient. It also helps you plan for deadlines, assign job roles and stay on track for your project goals.

Control – Creating a business strategy gives you more control over choosing the activities that will directly help you reach your goals and allows you to quickly assess whether your actions are getting you close to your goals.

Competitive advantage – By identifying a clear plan for how you will reach your goals, you can focus on capitalising on your strengths, using them as a competitive advantage that makes your company unique in the marketplace.

Other Key Components of Creating Business Strategy

Vision

A business strategy is intended to help you reach your business objectives. With a vision for the direction of the business and clarity of purpose, you can create clear instructions in the business strategy for what needs to be done and who is responsible for completing each step.

Core values

A business strategy guides top-level executives and departments about what should and should not be done according to the organisation’s core values. It helps everyone stay on the same page and with the same goals.

SWOT

Stands for strengths, weaknesses, opportunities and threats. This process helps an organisation assess where you are, identify and evaluate your organisation’s strengths and weaknesses, and identify untapped opportunities and threats that you need to mitigate. 

Tactics

Many business strategies articulate the operational details of how the work should be done to maximise efficiency. As a result, people responsible for tactics understand what needs to be done, saving time and effort.

Resource allocation plan

A business strategy includes where you will find the required resources to complete the plan, how the resources will be allocated and who is responsible for doing so. In this regard, you will see where you need to add more resources to complete your projects.

Measurement

The business strategy also includes tracking the organisation’s output and evaluating how it is performing about the targets set before the strategy’s launch. This helps you stay on track with deadlines, goals, and budgetary concerns. This will ensure that you can do more of what is working and stop doing what is not working.

Business Strategy Plan

Pitfalls of Creating Business Strategy

  1. Not executing – strategy is a choice; execution is imperative
  2. Do-it-all – Failing to make choices and making everything a priority
    • What can you execute now with the resources available
  3. Not customer-focused – what’s suitable for customers is good for business
  4. Not agile – Need to adapt and change to market conditions or customer needs and feedback and stay relevant
  5. Something-for-everyone – Attempting to capture all consumer or category segments simultaneously. Be clear and serve one market well

Simple examples of Strategic Goals

Cross-sell more products

Increasing the amount of product sold per customer can increase your average spend. However, even a slight increase can significantly impact profitability without spending money to acquire new customers.

Improve Customer Service

Having customers top of mind in your business can help to deliver quality customer service by building a solid reputation of having exceptional customer service with help more referrals and more sales. If you have a problem in a specific area of servicing your customers, having a goal focused on improving customer service will have objectives that centre around the customer.

Sustainability

You could launch an entire business strategy to increase your business’s sustainability. For example, focus on reducing energy costs, decreasing your organisation’s carbon footprint or becoming more circular. This may also include how you will be more community focus.

Start Creating your Business Strategy

Organisations may feel overwhelmed, time-poor, and unable to work on creating a business strategy. What are the consequences if you do not set a plan? So, start small. Get your whole team together, review your business honestly and assess where you are and where you want to go. Then set clear goals and actions aligned to your vision, purpose and values, including being customer-centric. Ensure you assign accountability for each activity. Make each goal realistic and part of what you do day-to-day and measure, review and act. Stop doing what is not working!

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Ways to Improve Productivity in the Workplace

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The article was written by Sara Pantaleo.

Boosting productivity in your organisation means you will be able to increase profits.  Small businesses have twenty employees or fewer.  Therefore, it is essential to have strategies to make your business more productive and efficient.

Some of the ways to increase productivity in your small business include tools, systems and processes, and some are about how you build and nurture your employee relationships.  If one team member is not performing in a small business, the whole organisation feels the consequences; therefore, it is crucial for small business leaders to also focus on people.

Here are some of the ways to improve productivity in the workplace.

1.    Have a purpose, plan and clear goals for the business

Without direction in an organisation and a clear plan, your employees may not be working on tasks that improve or benefit the business.  Having clear strategic goals means that each department and employee has a compass on what needs to be achieved and prioritise their tasks to align with the business goals.  It is also essential to set and commit to deadlines.  Regularly meeting deadlines demonstrates reliability and the ability to stay focused.  Customers can be lost if an organisation does not ensure goals are completed on schedule.

2.    People Culture and excellent workplace conditions

Develop your employees, offer them support and practice positive reinforcement.  Create a culture where employees feel included and that they belong.  Employees that believe in the business purpose and vision are more likely to be happy working for you and performing at their peak.

It is also vital to create a well-organised and decorated office, a pleasant workplace to see every day and physically and visually enjoyable.  The more comfortable employees feel at the office, the less stressed they will be.  One way to maintain a healthy work environment is to create an upbeat atmosphere that makes everyone feel appreciated and motivated.

Every employee doesn’t need to be busy every minute of the entire workday.  Keeping your staff too busy can create fatigue and cause burnout.  That’s why one of the steps to improve productivity is to take occasional breaks.  Taking 10 to 15-minute breaks allows your team to recharge and feel refreshed when they approach the work again.

Try using 90-minute cycles divided by breaks.  It’s a practical tip that can lead to higher output.  During the 90 minutes, each employee should put as much effort as possible into achieving a task.  This is followed by a break to recharge.  Creating a flow of 90-minute sessions followed by short breaks is enough time to establish a rhythm and complete tasks without getting burned out.

3.    Reduce Distractions

It’s essential to stay focused while working; therefore, remove as many distractions as possible.  Remote employees have this advantage, whereas office employees must deal with background noises made by devices and co-workers.  Your team in the office should try using soundproof headphones and turning off their personal mobiles unless they are a necessary part of the job.

Avoid booking unproductive meetings that do not have a purpose and do not accomplish much.  Like staff meetings.  Some topics can be communicated via phone or a quick email.

4.    Be Efficient – Track and measure

Most businesses track their financial performance but forget to track and analyse how their team uses their time.  Studying the data reveals which employees are productive and which employees need more training.  The technology can assist you with communication and performance.

5.    Have the right tools, equipment and technology

Technology is an integral part of the modern workplace, and any business without some level of technical savvy will likely fail.  Assess that you have the right technology, system, and tools fit for your purpose.  There are many cloud-based solutions to achieve different outcomes you may consider.  Some of the technology to consider (This list is an indication only):

  • An accounting package such as Xero allows you to track your business metrics and performance accurately, keep inventory, make and record sales, manage and pay bills and handle payroll.
  • A Client Relationship Manager (CRM) such as Hubspot or Zoho allow you to keep accurate customer data and track your customer’s journey. A CRM will keep you efficient and give you the ability to nurture customers efficiently and without leaving it to chance.
  • Software packages that can assist in meeting your employer compliance and facilitate all the templates to help recruit, onboard and train employees, such as Employment Hero.
  • Industry-relevant – regardless of your industry, technology makes what you do easier. For example, if you work in health care, countless technologies save lives, protect patient privacy rights, and make sure providers get paid through insurance.  On the other hand, if you are a farmer, engineering and robotics will help you maintain crops and improve yield.
  • Communications tools such as Slack will allow instant message co-worker communication.
  • Social Media – Use Facebook, Instagram and Twitter to communicate directly with your customers. Create and promote your brand and get your message directly to the customer.
  • Stay informed with the latest technology and adapt. New and upcoming technologies such as Blockchain[1], AI[2], and IoT[3] are revolutionising business.   Stay informed and aware

Being proactive and going beyond what is needed to limit, reduce or eliminate future vulnerabilities is a great strategy.  Businesses that don’t take time to proactively prevent future disasters may find themselves in a difficult situation when the disaster occurs.  For example, computer networking businesses would take a proactive approach by building a solid defence against cybercriminals.

Consistently assessing how your team works and areas of improvement will help increase overall workplace productivity.  While there are various tools out there that aim to streamline workflow, ultimately, as a leader in your organisation, you must be there to support your team.

Forget perfection.  It is unrealistic to be perfect in every aspect of your business.  Your business can only be as good as your technology and resources.

Footnotes
[1] A blockchain is a distributed database that is shared among the nodes of a computer network. As a database, a blockchain stores information electronically in digital format. Blockchains are best known for their crucial role in cryptocurrency systems, such as Bitcoin, for maintaining a secure and decentralized record of transactions.

[2] Artificial intelligence (AI) is the capability of a computer system to mimic human cognitive functions such as learning and problem-solving.  New level of AI is machine learning, which is the process of using mathematical models of date to help a computer learn without direct instruction.  This enables a computer system to continue learning and improving on its own and can solve problems based on experience.

[3] The Internet of Things (IoT) describes the network of physical objects—“things”—that are embedded with sensors, software, and other technologies for the purpose of connecting and exchanging data with other devices and systems over the internet.

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why small business fail

Why Small Businesses Fail

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Studies have shown a high percentage of small businesses fail in their first year and up to 50% by year five.  70% of small businesses don’t make it past ten years.

Some Reasons why small businesses fail

1) Lack of leadership – No vision and purpose

Setting a clear vision and purpose gives you a guiding light and clear road from who you are and where you want to go.

When you don’t have a clear vision, creating the path to success is challenging, like not having a rudder.

2) Market research and niche –  do not know who the ideal client is

Not knowing who your ideal client means that you will try to attract and serve everyone.  This is like using a fishing rod to catch a shark, and you will not catch anything.  The clearer you are about your ideal client, the higher the chance of reaching the people you want to serve.

3) Poor management and planning

Setting clear strategic goals and business plans aligned with your vision will ensure you can develop precise financial forecasts around your ideal client.

Your plan sets out where you are, where you want to go and how to get there.  Ensure your goal is realistic and executable with the resources you have.

small business failure

4) Marketing

You need a clear marketing plan identifying how you are going to attract your prospective client. You should also have a marketing budget and track the return on investment for each channel to know what is working and what is not.

5) Lack of making decisions or no action

You have to get things done. But, don’t get so caught up in the process and become unable to make decisions.

Anything that prevents you from executing will lead to failure. At some point, you have to decide and move on. It’s better to make a decision and not get it perfect than not acting.

6) No commitment to innovation and continuous development

Successful business owners are constantly looking for new and better ways to serve clients and develop new opportunities.

They research and become aware of the latest trends. As a result, they are continuously innovating and finding new ways to be more efficient and increase productivity and stay abreast of changing consumer behaviour in their industry.

7) Knowing how to sell and follow-up

Lack of follow-up is a definite way to lose clients and not get referred to new ones.

Have a clear process on how you will be attracting new clients and the following up—making phone calls, responding to e-mails, or delivering a product or service.

Make sure that you track that you are delivering on time. Creating long-term customer relationships and building trust comes with knowing when to follow up.

 

why mall business fail

8) Poor governance and consistency

Setting up structure, systems and processes, areas of accountability are critical to achieving your strategic goals.  Some of the governance in business is to comply with laws in your industry, but small businesses in a partnership should consider strong shareholders agreements. If in a family business, a family business charter.  Other considerations are separation of duties and authority to mitigate risks and being prepared—good crisis planning to anticipate the impact of external factors, such as regulations or global trends.

Consistency is also essential. Many years ago, I learned that giving an excellent experience sometimes and a poor one sometimes creates doubt in the customers’ minds.  So, it is better to provide a great experience all the time and commit to consistency.

It takes time to attract and nurture customers to build your business. So, it is best if you were committed to tracking and acting consistently to deliver the experience that will make and keep customers.

9) Do not understand or track financial performance

Setting budgets, cashflow forecasts and financial metrics and measuring your performance is vital to know where you are so that you can make solid and informed business decisions

A small business must set sales targets and understand the reasons when you do not achieve them.

As well as revenue and profit, you should know what is happening to cash flow and forecast according to peaks and trough cycles and understand the gap between paying suppliers and receiving funds from your customers.

Other critical financial metrics are the cost of goods, employee costs, operational expenses, debtor payment days and creditor payment days.

You must work with your accountant to set these up correctly and be consistent on how and when you measure so that you can see trends developing and you can act quickly.

small business success

How can small businesses succeed

So, success in small business is not by accident, but it is by planning and design. If you are starting, ensure that you do your research, plan, set your financial and non-financial goals and what success looks like if you achieve them.  Start with good governance from the beginning.

So, if you are a successful small business, make sure you celebrate your successes and review your strategy, vision and purpose regularly to check that it resonates with the right here and now and into the future.

At the moment, one of the most significant focuses in society is climate change.  Will your small business be ready?  What research and analysis have you made in your business to ensure that you are planning for the future changes that deal with the impact of climate?

Showing leadership, setting a clear vision and strategy, strong governance and tracking performance, taking action and executing leads to small business success.  The key is not to stand still and continuously evolve in line with your business growth to meet your customer’s needs of the day.

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Leadership from “The Rock” Versus “The Whole”

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We are continually being challenged as leaders in the ever-changing world of business, but what does it mean to be a leader in 2020 and beyond.

Leaders need to be mindful, present and self-aware.  In anticipating the future, leaders need to shift from known experience to leading together with others and leveraging subtle differences and changes as needed.

Business has become increasingly complex and the days of the individual have shifted to the collective.  From the “Follow me, I know the way” type leader, “The rock” to leading from “The whole”.

Knowing when to take the lead and when someone else in the team needs to take the lead means being flexible and able to empower those around us.  Leaders need to be adaptable, sense the future and focus on the shared purpose of the whole collective.

Leading from the whole

Collective leadership means that we need to focus on being as well as doing.  The balance of both doing and being means;

  • Being in relationships and present with people
  • Noticing the team dynamics and engaging
  • Understanding that it’s not what you know but what you do

It’s not possible for one smart leader to have all the answers. You need to tap into the network and use the intelligence of the people in the team. That way, you can build awareness that you are all part of a whole system.

The Leader is responsible for the team dynamic and needs to read and sense that dynamic.

It doesn’t mean that you don’t set direction and take people forward, but it does mean using the wisdom and intelligence of the whole.  You need to have broad systems awareness and sense what is unfolding in the team in order to arrive at goals.

The future doesn’t always unfold in a straight line.  It’s important to sense the collective and adjust as is necessary.

You need to use collective intelligence as well as emotional intelligence.  Emotional intelligence is about self-awareness and collective intelligence is seeing how you behave as a whole team.  When the collective team speaks as a whole, it’s different to individuals. 

When you lead from the collective you can set a plan, however it needs to be fine-tuned as things evolve.  COVID19 has certainly taught us that this year with the exponential take up of video meetings and adapting to new working environments from home.  Has this made it more difficult for you as a leader to sense the collective intelligence?

Are you conscious and aware of your collective team?

  • How it behaves
  • The beat
  • The wisdom
  • The Pulse

To be a leader who is able to sense the collective and dynamics you will need to be more self-aware and focus on being present, listening and not multi-tasking, distracted and thinking about yesterday or tomorrow?  You need to intentionally and fully connect directly with individuals and your whole team.

In order to achieve true collective leadership, you need to focus on relationships as well as the ROI.  Leading from the whole means not leaving anyone behind.  It means that no one feels alone.

You need to use love, compassion, empathy and companionship to show that you value people.  This requires a mindset in which you implement mechanisms to show you care and support people in what they are going through.

Self-awareness supports leaders with better mental health outcomes and job-related well-being.  It’s not about putting a fruit bowl at reception and having weekly yoga.  It’s about being authentic and developing trusting relationships, improved decision making by incorporating the collective intelligence and leading with the heart as well as the head and gut.

Authentic Leadership

You cannot be authentic if you do not know who you are.  Authentic leadership comes from your values and beliefs.

People trust and will naturally follow authentic leaders. 

In summary Collective Leadership for “The whole” is;

  • You are present and aware of self and of each other
  • The collective team know themselves and each other at the core level.  Each knows their unique talents and strengths.
  • You are aware of the team dynamics and able to co-create and co-lead
  • You are in touch with what is unfolding and able to read the signals and lead for the emerging and changing future

Leading in a VUCA world

The Leadership Coefficient cover this really well in their Leadership course with the Three Principles of Collective Leadership and Silo thinking and Systems thinking.

They talk about living in a VUCA (Volatile, Uncertain, Complex, Ambiguous) world.  This means it is no longer possible for one smart leader to have all the answers and the future is emerging moment by moment.  Jane Weber clearly states in her article of May 2020, that leaders are so distracted that they mostly do not even notice the changes.  Often disruptions still take many leaders by surprise.  She asks, did the taxi industry see Uber coming and hotel industry AirBNB?

If you don’t pay attention to the changes emerging in your whole collective team and stick to leading in a straight line, you may not see what’s coming and survive.

Ciao, a presto.

– Sara Pantaleo, Affari SP Founder

 

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