Category Archives: Business Planning

Fail to plan? Plan to fail.

The Food For Thought workshop in Barnstaple last month generated active and enthusiastic discussion of the topics covered in the presentations.

As a follow up I want to share some of the major points that were covered.

We kicked off the morning looking at business plans. Most of the businesses present didn’t have a business plan, and that wasn’t a huge surprise – business plans usually only come out when you want to borrow money or apply for a grant.

However when you do have a written down plan you are much more likely to achieve what you want from your business:

– You have a way to evaluate new opportunities; do they get you closer to your goal?
– You keep your own interests at heart rather than getting swept along by other people’s ideas.
– When times get tough you have a reminder of why you started on this journey, and encouragement to see it through.

A business plan doesn’t need to be formal, and it doesn’t have to be lengthy (the shorter the better!).

It’s also not supposed to be final – change it as you go, as you get more information and as your circumstances and views change. Both the businesses who said they did have a business plan updated their plans regularly.

So where do you start? In simple terms a business plan sets out:

Where you are now

Often a SWOT analysis is a good place to start. It’s a useful tool to separate out the good and bad things currently on your radar between:

Strengths and Weaknesses – internal factors; things you do well (better than your competitors?) or not, things that you have some control over.

Opportunities and Threats – external factors, like the economy and market trends. These are outside your control so any strategies you make need to be designed to take them into account.

Sometimes it’s easy to lose track of the distinction, but it is important as there is nothing more futile than trying to change something you have no control over.

Where you want to get to

It’s not your business who’s writing this, it’s you. Your goals need to come first, so what does success look like to you?

What makes a successful seasonal business?
Provide you with an income – well usually, but also:
Build a (inter-) national reputation?
Make you rich?
Follow a dream?
Make a tax loss?!
Close down in a controlled way?

How are you going to get there?

What does your business need to achieve in order to get you to the point where you can achieve your own goals?
More profit?
More sales?
More staff, to free up your time?

How long do you think it will realistically take to achieve this? Or, more importantly, how long have you got!

This is where your strategies come in. If you need more profit how will you get it? More sales? Better sales? New customers? New products!

How will you get these new sales? How will the customers find out?

Do you need different resources to deliver this? New tools? More cash? A better IT system?

Be realistic

I have worked with a lot of businesses whose plans have failed because the owner thought that they could grow sales without adding extra staff or production resources. Hope, or even will power won’t ever be enough to make the plan succeed!

You have to stay realistic when it comes to working out what you can do with your existing resources, and similarly when it comes to assessing the sales opportunity that you have. I mentioned the example of milk alternatives – while there is a market for these products there is a large proportion of the population who are happy drinking standard milk and so the market is naturally limited. A huge marketing budget will not necessarily change that, so growth plans have to reflect this.

Make a plan
At the end of the workshop the attendees took away a business plan template that they had completed during the morning. If you would like a copy of the template then drop me a line, or leave comment here.

Food For Thought: A Workshop for Food and Drink Businesses

Plans for the Food For Thought workshop are coming together now, and its looking exciting.

I’ve lined up great speakers to join me, and together we will address:
* pinpointing what your customers value,
* which products or customers are worth most to you
* getting noticed by the right customers

All building towards making sure sales growth in 2018 brings profit growth at the same time.

The idea behind the workshop was the number of businesses whom I have met with in the last 5 years who have got themselves into trouble because they put all their effort into getting more sales when what they really wanted was more profit.

If you sell more than one product, to more than one customer I would be prepared to bet that some of the sales are super profitable, but some only just cover their costs.

That’s usually unavoidable, but the key thing is to make sure YOU have made a decision to make the not so profitable sale instead of just being led by what the customer wants.

Selling what the customer wants is not guaranteed to make profit for your business. However, direct profit isn’t the only factor to consider; there’s also issues like keeping customers happy, spreading delivery costs, and establishing a reputation to allow you to develop other products. The challenge was illustrated quite nicely by a business that I met with last month:

The have two product lines which sell well, in large quantities, and are profitable. They have another product (product C) which sells in smaller volumes, is not profitable and causes lots of problems for their factory because they need different processes and different ingredients.

From a finance perspective product C is a disaster and should be discontinued as soon as possible and the factory manager would agree wholeheartedly with this.

However there are other things to consider; the customers who do buy the product love it and the retailers who stock it can’t get enough. Also, competitors who make either one or both of the profitable lines don’t make product C so retailers will not move away from this business while they offer something that no-one else does.

So, from the sales and marketing team’s perspective the business should sell more of this product, even though it is not profitable!

The solution here is to have enough information to know that some sales of product C is good, but more isn’t necessarily better. And a balance between the perspectives of sales, marketing, operations and finance is essential to success.

On the day I will be joined by:

The workshop is at The Cedars Inn in Barnstaple on 27th February from 9.30am to 1.30pm.
Tickets are £30 (inc VAT) until the end of January and can be booked here