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3 August 1995………

16 October 2012 No Comment
Yup, 3 August 1995 was when this article was written. I found the yellowing paper when I cleared out a file of newsletters (I know, you shouldn’t start) when we had a recent seating change. Sure, stylistically I wouldn’t write the same way now but the message is pretty strong and very relevant still…….
The recent flurry of government statistics and parliamentary announcements are alleged to show that the latest recession has finally bitten the dust.

However, before jumping head-first into the next part of the interminable economic cycle, it is worth considering the businesses that survived the recession and the reasons for their success.

The most successful of our clients are those that recognised that they were in a recession and┬áadjusted budgets and expectations (such as drawings) early enough to cope. The same clients┬áhave used the recession to gain quality assurances such as BS 5750 (I know we’re on ISO 9000 series now) and improve systems and┬ástaff training in anticipation of the eventual recovery.

Of course, they have also looked critically at their cost structures, staffing and systems such as credit control as have all businesses. The important point to note is that these businesses are now in the perfect position to take advantage of new opportunities without fear of over-trading. The key to this level of anticipation lies in corporate planning.

To be successful in business over a number of years requires a goal. Planning and the application of strategy are of fundamental importance in both the achievement of that goal and the┬ácontrol of the business while ÔÇ£en routeÔÇØ to it.

Some business people may baulk at this point; justifying this by saying that they are too small to benefit from corporate planning. However, do not be put off by the name, from the largest international company to the smallest one man business, establishing targets and planning for their achievement is essential to success.

Increasing emphasis has been placed by successive governments on the small firm sector as an important constituent of economic growth. Estimates suggest that only 10% of business start ups survive the first five years. By contrast, in franchise operations where corporate plans are nearly always established before business commences, the success rate is said to be nearer to 90%. It seems likely that the firms that are going to survive are the ones that plan their future growth most carefully.

More than any other sector, small firms suffer from the┬átendency┬áto adopt the ÔÇ£seat of the┬ápants approachÔÇØ to manage their affairs. During times of stress or┬árecession, this deteriorates┬áeven further into ÔÇ£crisis managementÔÇØ where the firm lurches uncontrollably from one crisis to┬áanother. The attitude that long-term planning is a luxury that only larger firms can afford,┬áholds back the small business.

Despite the inevitable complications that are placed around it, corporate planning is, in fact, quite simple. corporate planning is the process of getting your business from its current position to where you want it to be at some time in the future. In order to do this, you will need to answer three seemingly simple questions:

Where are you now?

Where do wish your business to be in the future?

How are you going to get there?

The answers to these questions are time consuming to produce but afford the planner a unique view of the strengths, weaknesses, opportunities and threats associated with their business and the ability to utilise these factors to achieve their goals.


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