Business Planning
The old maxim still holds true: “They Who fail to plan, plan to fail.” Although this may sound harsh, it is true in many cases. Ask the owner of a small business whether he has planned for the year and the answer will mostly be: “Yes, I have”. But if you ask him whether the plan is on paper, the answer is mostly: “No, but it is in my head.” Although some planning is better than no planning at all, it is a fallacy that a complex business plan can have any effect by just thinking about it.
Business planning is the process by means of which a business owner plans the success of his or her business. A good business strategy consists of business values, a vision, mission, goals and objectives. These goals and objectives, after considering the environment and a SWOT analysis, should result in detailed quarterly objectives and Key Performance Indicators (KPIs) or KPAs.
Business planning should be comprehensive and the planning process is as important as the result. In the process of planning, ideas and plans are considered, formulated or discarded as a result of in-depth thinking and a process of analysing the interim results.
Businesses that follow a detailed business plan, goals and objectives are doing much better than businesses that do not have an official business plan or strategy. In this regard, a look can be taken at the results of a study undertaken by the University of Oregon in the United States:
The responses showed that those who completed business plans were nearly twice as likely to successfully grow their business or obtain capital, than those who did not write a plan. – Rieva Lesonsky in Small Business Trends
Talk to Tienie le Roux of Business Consult to maximize your business success.
Small Businesses
The owners of small businesses are diverse in background, experience and training. Some are doctors, some are professional people and some come from big corporations, others from the trades. But all small business owners have one thing in common. They want to be successful!
Success may have many faces. Some will see it as profits, others will say it is business growth, still others would say it is personal growth and satisfaction. However, if the business is not profitable and growing, and if the cash flow is not positive, none of the above-mentioned business owners would label their business efforts “successful”. To be a successful small business owner means that you need in-depth business knowledge or experience in marketing, sales, financial bookkeeping, personnel management, production and strategy. Few business owners have this type of experience and/or knowledge.
Smart Small Business owners know how to source this knowledge they are lacking. They appoint a coach or mentor or a consultant to help them overcome their shortcomings and to grow their small businesses into successful family concerns. Talk to Tienie le Roux of Business Consult in growing your small business successfully.
Business for Sale?
If you have decided to put up your Business for Sale, it is a good idea to plan the sale beforehand. Planning the selling process leads to a better price, less legal worries and paying the least amount of tax and this would therefore maximize your capital.
All business owners want to maximize the financial gains of selling their business. It is also a fact that business owners rely mostly on business brokers to sell their business successfully (the last step in the process). An independent business valuation and business selling strategy will lead to a better price, but also minimize the tax payable (including Capital Gains Tax, VAT and other taxes or tax obligations).
An exit strategy should consider at least the following:
- Estate planning process
- Retirement plans
- Financial requirements of the owners
- Heirs and their concerns
- Liability issues of the concern
- Current management capabilities
- Tax planning
- Timing and phasing
- Mergers/Acquisitions/Business for Sale.
Most business owners start with the last bullet (Business for Sale) and hope that the other issues will fall into place. If your business is for sale (either by hanging a “Business for Sale” notice on the door, or on the internet), talk to Tienie le Roux of Business Consult to formulate a comprehension exit strategy to maximize your financial gains.
(Likewise, if you are buying a business, it would also be an excellent idea to obtain an independent valuation and a risk and legal analysis of the concern.)
Contracts for Business Owners
Business owners, be it sole proprietors, partners, share holders or any other owners, need solid business contracts, such as a buy and sell agreements, partnership agreements, share holder agreements, as well as key man agreements, restraint of trade agreements and employee agreements. (In the case of buy and sell agreements, insurance policies are also required to fund the agreements. This is a highly technical area of legal advice and few insurance brokers have the know-how to help the business owners to do it correctly, which could result in major negative implications. In more than 60% of all buy and sell agreements, the policy structure and/or the accounting procedures are defect and this may have disastrous legal, tax and estate planning results.)
Business owners need excellent business advice as well as legal advice to decide on the content and scope of all business agreements. Excellent business insight is necessary to formulate these agreements into solid legal contracts.
One of the critical contracts between businesses is a coöperation agreement. This is the case where one business relies on other businesses to achieve certain objectives. In some cases it may be outsourcing of processes. In other cases it may be the supply of goods and services on a regular basis, but the coöperation is vital for one or more of the parties. It is advisable not to rely on this important agreement if it is only done on a handshake. Both parties would benefit if the whole contract is put in writing and is well understood by all, without any small print or hidden agendas or agreements. If the existence of a business depends on an agreement or contract, it is important that this must be comprehensive, well written and understandable.
Speaker, Business Mentor and Coach
Tienie le Roux is in demand as a public speaker at business chambers’ meetings, on such topics as business planning, strategy, as well as legal aspects or changes in legislation and the impact of this on businesses.
He also conducts workshops and training sessions on demand and will assist small business owners as a coach or mentor (as needed) to plan and become more successful.
Equity Funding or Loan Capital needed – You need a business plan!
To raise capital or to get a loan (a bigger overdraft!), will require a well-thought-trough and realistic business strategy that is converted into a workable business plan. This plan must be attractive enough to raise capital or convince a bank or other institution that the business is sound and the capital safe, and further, that the business can afford the monthly payment of interest and capital.
Sometimes a business needs to undergo some changes or restructuring to qualify for the loan or equity capital needed. Practical business advice and sound legal advice are then required to formulate the restructuring strategy and implementation plan before the business plan can be presented to the funding institution or body. This advice is critical and many businesses have been turned down because business owners have not taken the necessary steps before approaching the institution or funders.
He also conducts workshops and training sessions on demand and will assist small business owners as a coach or mentor (as needed) to plan and become more successful.
Small Business Training or Workshops
Small business training or strategy workshops/planning sessions are conducted on request to help business owners and their staff to formulate a successful business strategy and/or a marketing and sales plan.