The Business Develppment Company discuss business planning during the current financial climate
As the nation slowly comes out of the GFC, retail confidence remains unstable but other areas in the economy are starting to pick up.
Business Development Company Director, John Downes believes franchises should be carefully planning to avoid missing out on the next big wave of growth. Planning, an essential ingredient in any company’s success and longevity should place emphasis on scenario planning and stress testing during this climate.
Downes recommends his clients run a series of forecasts for the next two years. Scenario planning involves imposing scenarios other than ‘business-as-usual’ operations on their business plan. None of these scenarios are guaranteed to occur but trigger points can be identified by testing and allow the company to develop and implement an ‘agility plan’.
Contingency plans can help manage finances and operations quickly during real scenarios. It’s about being forewarned and forearmed, Downes said acknowledging it is impossible to know what is going to happen over 2 years.
Contingency plans can equate to the consolidation of sites, reducing marginal growth services or those that are likely to suffer more when demand crashes.
Scenario plans need to assess the repercussions of losing customers and suppliers. The easiest way to safeguard the company against this, at least in part, is by tracking customers and suppliers.
A franchises business plan including market analysis, company description, organisation and management, strategic analysis, marketing and sales management, is critical and should be updated every three months.
Downes advises that many small companies do not plan due to a lack of time. The answer for some businesses is to prepare the plan on the weekend.
“It might take an entire Saturday, but those that do it say it's a worthwhile exercise,” says Downes.