It is the easiest thing in the world for a business, large or small, to adopt the policy of “same as before”. And it might work. But we all know of businesses with international profiles, or only gossiped about at the local, which have failed because they had no clear strategic direction. The experts on business management, who might be accused of competing with economists for having numerous, contradictory views on their own subject, do seem able to agree on one thing - businesses benefit from a clear strategy.
It is the world of small and medium-sized enterprises (SMEs) with which we are most familiar. And within that world, the majority are owner-managed businesses. As you would expect, the strategic direction of such businesses is closely tied to the strategic direction of the owners. And, let’s face it, they are probably far too busy to stop and think strategically. After all, it is a full-time job, running a business!
This is where we can help. Inevitably, we have experience of hundreds of different businesses. Not only do these vary in size and in the type of products and services they offer, but also in the way they are structured financially and as regards management. We are familiar with the kind of challenges they face and the opportunities they enjoy. We are also familiar with a huge range of different approaches to these challenges and opportunities. Even more usefully, we have knowledge of which ones tend to achieve the desired outcome and which ones fall flat! The deep understanding we gain of our clients’ financial affairs from our accounting and taxation work, coupled with our general experience of businesses, provide the springboard for adding value to the strategic planning process.
These alone, however, are insufficient. It is also necessary to gain a full understanding of our clients’ aspirations to enable us to play a part in helping to achieve them. To this end, we are able to provide a forum for discussion of strategic matters, which will often provide the necessary encouragement to take a step back, temporarily set aside the detail, and think strategically. We can encourage our clients to formalise their aspirations and document their aims and objectives, and communicate them to us. From that base, we can then help to explore the approaches to achieving the desired goals.
Examples of some of the strategic planning matters we have discussed with clients include: -
- Succession planning: what is the medium to long-term future of the business?
- Can we sell it, and are there likely successors amongst the staff?
- Can we pass it on to other family members?
- Should we just run it profitably then close it down when we retire?
- Changes of business direction: can we be more profitable?
- Shall we diversify or change direction as regards products and services?
- Are there new geographical markets and what are the challenges?
- Is it better to contract work out or do it in-house?
- Risk minimisation: how can we reduce the dangers presented by external factors?
- Should we restructure the capital of the business and reduce or increase gearing?
- Should we hedge against exchange rate or interest rate movements?
- How can we reduce reliance on a small number of customers or suppliers?
- Personalities: can the differing aspirations of the owner-managers be reconciled?
- Where are the similarities and the differences?
- Can a structure that suits everyone be created?
It would not be unreasonable to suggest that strategic planning is the service we provide which adds the most value, and is perceived to add the most value, to our clients. Even if we do nothing more that provide a forum and an impartial chairman, this can act as a catalyst to our clients to make radical improvements. The input we can provide, however, based on our general business experience, our knowledge of the financial position of the enterprise, and our understanding of our clients’ aspirations, can provide substantial additional benefits.