Business Plan
Have you got one? How long is it since it was reviewed? If you do not have a business plan, or if yours is out of date, it may be time to consider drafting a new business plan.
Benefits of Business Planning:
- The process focuses the team on looking at future developments.
- The process focuses the team on enhancing services to customers, which often results in profit improvement.
- Staff involvement results in more effective implementation as they “own the ideas” and are therefore more willing to implement the plan. Morale often lifts due to this teamwork.
- The process enables clear communication of business development direction and focus.
- The process makes you stop and review the whole business (the ‘big picture’ in its entirety), rather than a ‘piece-meal’ approach of decision making forced by crisis.
- A plan based on who will do what and by when creates an action orientation in the business.
Some practical suggestions regarding the preparation of a Business Plan:
- Go through the process annually.
- Involve staff.
- Treat yourself to somewhere special to do it away from work (the ‘retreat’ concept).
- Have staff and management put their thoughts down on paper before the meeting so that people are prepared.
- Use a business plan questionnaire as a guide.
Budget/Financial Projections
Incorporated in the business plan will be financial budgets (Budgeted Profit and Loss, Cash Flow and Balance Sheet). These budgets will usually be for a one year period with a longer 5 year plan available as a supplement. It is essential that all businesses have at least this component of the business plan. Now is the time to be preparing your 2012 Budget.
Why do due diligence?
Before proceeding with the acquisition of a business, an investor should ensure that thorough financial (including tax) and legal due diligences are completed on the target company, as this recent case encountered by our New Zealand member firm RSM Prince indicates: –
“A small investment in due diligence recently saved an RSM Prince client hundreds of thousands of dollars.
Our client was very excited about a fashion agency business. It involved smart fashion items and regular overseas travel. Well,somebody has to do it, don’t they!
The Business Sales Consultant produced an excellent presentation brochure. The business was quite profitable, but as always no deduction had been made to compensate the owners for the work they would need to put in to run the business day in and day out.
The value of the business was based on a multiple of past normalised profits after adjusting for non-business expenses. Because there was little stock and fixed assets, the business value was almost completely represented by hundreds of thousands of dollars of Goodwill. My problem was that if my clients did not run the business successfully then they would have nothing left. The Goodwill would have disappeared.
I reviewed the business records and found them to be in order. It was halfway through the financial year but no interim accounts were available. Thank goodness for GST. I was able to deduce from the GST returns that sales for the first six months were down 22% on the previous year. Not a good sign.
The final result was a low but realistic offer from my client. This was not accepted by the vendor but my client still has his retirement funds safely invested.”
In Thailand, it is even more critical to ensure that sufficient due diligence is completed prior to acquiring a target business owing to the complexities of the Thai Revenue Code and potential legal pitfalls.
At RSM Thailand, we are able to provide a full scope of both financial (led by our Audit & Assurance team and Legal (led by our Legal Division) due diligence services.
Advertising that money cannot buy
Press releases are an important part of your marketing plan. It’s not every day you can get something for nothing. Press releases are all about news and news is created by change.
If something has changed or about to change in your business then you should put a press release together.
Remember, the reporter isn’t interested in helping you make money. He’s looking for a story that will be interesting to his readers. He couldn’t care less about your great selection, super customer service and commitment to quality. He wants to know only the information that will help him craft a good story.
Here’s a checklist to help with your press releases.
- Research media outlets Put together a list of the media that you want to get published in that is, media that targets the people YOU want to target. After all, it’s no use getting published in a computer magazine when you sell gardening services.
- Brainstorm ideas Think about anything newsworthy that has happened recently or will happen in your business, the launch of a new product, receiving an award, an exciting event, expert commentary on recent events/ topics, and any achievements or a major change in your business.
- Write a press release A good press release will let the audience know who you are and what you do, and is brief and to the point. You should have an attention grabbing heading, a brief subhead, and an opening paragraph detailing the who, what, where, when and why. The body should also be short and snappy, with the most important/ interesting information displayed first.
- Send your release You can either fax or email your releases to the relevant outlets, but make sure your timing is right. You may need to check publishing deadlines, or ensure that the public are informed of an event that is happening in your business by a certain date.
- Follow up This is an important step, as the follow up is often what gets a release published.
Make a call to the editor or journalist you sent the release to a few days after you send it. If you can create a relationship with the journalist, this will make the publication of your future releases much easier.
- Be prepared for an interview If a journalist is interested in your story, don’t be surprised if they call you for an interview to get more information, but make sure you’re prepared for it!
- Thank the journalist/ editor Send a brief thank you email for running the story, and start nurturing a winwin relationship with that contact. Keep them in the loop about any positive feedback on the article that you receive from your customers.
- Leverage your media Mention having your business featured in a publication is exciting stuff, so make the most of it!
Frame an over-sized copy of the press clipping and hang it in a prominent position in your place of business and in your office, so that customers and potential clients will be sure to see it.