Business planning is essential to small-to-medium-sized businesses, depending on the company’s long-term growth goals.
In the fourth and final partof the business edition of our video series with Exact, two SME owners told AccountingWEB about their views on business planning.
“I haven’t done a great job of picking the best adviser over the last few years,” said Pat Wood, owner of online t-shirt firm TruffleShuffle.
“Our accountant has never offered me a business planning service - if we needed anything like that we did it ourselves.”
Wood’s business is currently expanding into the global market through online marketplaces such as Amazon.
His goals for his company are simply to keep doing what it’s doing for the next 10 years, and as long as he can pay his mortgage, his staff and continue working for himself, he’s happy.
“We don’t have business plans, but we do plan our business in the best interests of ourselves. My wife works alongside me and we sit on the sofa and talk about where we want to move our products. We’re a very informal business, and we do take on all our staff’s ideas, too,” he said.
“I have been lucky enough to have been self employed for 10 years, and if I can do that for another 10, that’s my career down to myself. This is my dream come true.”
But for Richard Pendlebury, chief executive of homeless charity Emmaus Bristol, his internal accountant plays a vital role to business plans, which he says are essential to a medium-sized charity to stave off larger competition.
The charity has also recognised the online marketplace as an opportunity, as while larger charities can afford the cost of opening a high street store to bring in extra income, Emmaus cannot.
“Business plans are essential for us. We have both strategic and business plans - we plan financially for five years ahead. Once you’ve done your sums, you’ve got to get into the detail and I don’t like detail, but I know we need it so we get our financial manager to do it,” he said.
“If we get it wrong, 20 people will be homeless again. The stakes are high, it’s not just that I could lose my job, people could be homeless and I would feel that I have really failed.”
Also joining the conversation was former practitioner and current senior sales executive at Exact, Jiten Modhwadia. As part of his added value services when he was an accountant, Jiten used to offer a six-monthly cycle business planning and reviews to clients.
“It’s essential that accountants are involved in business planning. It’s in their interests to make sure their clients’ businesses are a success and that their goals are realistic,” he said.
His tips for good business planning include:
Look at the business’ vision of success - what kind of a company is it - lifestyle or do they want to be the ‘next big thing’? How are they going to do their finances?
It’s not simply an 'a-to-b' bridge, but it should be a measure of where you want to be in six months' time
Turn the long-term goal into shorter chunks which are easy to realise and manage - six months is easier to plan for than three years down the line