Author Archive for Business Link

The ten-minute business plan

Our quick and easy ten-minute business plan is equally useful for those with or without an existing plan.

If you’re new to business planning, it’s a painless start. If you already have a plan, ten minutes might be all you need to reaffirm past thinking or highlight areas for review. Either way, it must be worth ten minutes. Right?

Before you begin

A few dos and don’ts:

Do decide who your audience is. Are you planning for internal strategic use, or to raise finance?
Do grab past financial figures and future forecasts if you have them.
Do get key staff involved if you want, and make it a practical team exercise.
Don’t look at your old business plan. Approach this with a fresh head.
Don’t worry about missing bits out. You can fill in the gaps later.
Don’t
forget, it’s designed to take ten minutes, so keep every stage brief and to the point.

Your ten minutes start now

Spend two minutes making notes on each of the following points. If you like, have a break after each one to collect your thoughts on the next.

1. Your opportunity
Describe what your business does and why. Write down what makes your business unique, and why this translates into an opportunity. Define your market potential and the value you bring to customers. Express a vision for the future of your business.

2. Your objectives
List your key objectives, that are specific, measurable, achievable, realistic, and time-based. Exactly what do you want to achieve, and by when? Where should your business be in 10/5/3/1 years time? What are your key aims and measures of success?

3. Your strengths and weaknesses
Strength is good, but weakness turned into strength is even better. First list your strengths; the things you are really good at, the areas you are the most competitive. Then outline your biggest weaknesses and threats, and try to define contingencies if things don’t go to plan. Later you can devise strategies for improving your weak areas. (A business plan for external audiences might not focus so heavily on weaknesses, but even so - if you are asked it pays to have constructive answers to hand).

4.Your environment
Estimate your total market size, value and growth potential. List your competitors, and where they sit in relation to you in the marketplace. Describe your current customer base, and define your ideal costumer. Consider how environmental influences - such as an economic downturn - might affect all of these factors.

5. Your finances
Look at your current financial state, past performance and financial forecasts. Work out if you can fund your objectives as outlined above. Identify future capital requirements and periods of cashflow shortfall, and devise a plan for raising the finance you need.

Now relax

Ok, we admit, there’s more to business planning than this. In most business plans, you’d find strategies for achieving specific objectives and marketing goals. You’d talk about your management team, and delve deeper into market research and financial planning. And you’d tie everything together with an engaging and succinct executive summary.

But regardless of its weaknesses, our ten-minute business plan represents an easy-going, effective start for those without a business plan. For those with an existing plan, it’s a quick and easy review.

If you like, you could tweak this process to better suit your needs, and repeat it every few months. In doing so, you can ensure your business plan stays close to your business reality.

More info - Prepare a business plan

More info - Top tips for a better business plan

Tool - Conduct an online business review

HR focus - November 2008

This month we explore why e-learning is finding its feet in a large number of organisations, and propose an idea to motivate your employees through Christmas and beyond.

e-learning is finding its feet

A recent survey from the Chartered Institute of Personal Development (CIPD) found that 57 per cent of respondents use e-learning. In these organisations, e-learning accounts for around 12 per cent of total training time.

e-learning is finding its place in a large number of companies, even though it accounts for a relatively small part of their training schedules.

When asked “How effective do you think e-learning is as a learning and development intervention?”, 8 per cent stated “very effective”, and 64 per cent believed e-learning was “fairly effective”.

Respondents do not seem overly enthusiastic about e-learning, perhaps because people prefer to be trained by real people (the most common objection towards e-learning cited in a 2001 study by Skillsoft). Nevertheless, the CIPD survey found strong evidence that “e-learning is effective when combined with other forms of learning”, with 95 per cent of respondents agreeing with this statement.

It seems that both employers and employees value the function e-learning serves, but only as one element of a wider training plan. It does not (and may never) replace traditional training methods, but it does have its place in the training strategy.

e-learning offers numerous benefits. It is flexible, accessible anywhere at any time, scalable to suit small or large organisations, and in some cases customisable to fit specific needs. And crucially, it is cost effective; a factor which might in part explain its growing use.

But e-learning should not be branded the ‘cheap-but-inferior’ training solution. For one, it is a relatively new industry which can mature in response to customer need. And second, it can only improve in the future, thanks to ever-progressing web technologies, and the e-learning innovations that will inevitably follow. (As with most things web, you’ll undoubtedly start hearing the phrase “e-learning 2.0″ before too long.)

e-learning is already is finding its feet in many of today’s organisations. And as the industry further develops, spurred on by new technologies and innovations, e-learning should only get stronger.

More info - Distance learning and Internet-based training

IDEA: Make New Year’s resolutions with your employees

The Christmas break offers valuable time for reflection over the year that’s passed. And invariably such reflection turns to work. Perhaps because we are often asked “how’s work?” as we catch up with friends and family. What commonly follows such musings is the resolve to make a change.

Here’s an idea: Why not give your employees something positive to tell their friends and family this year, by planning a new year’s resolution to pursue together in 2009?

In September, we discussed what makes the perfect boss. Research finds that that although heartfelt gestures such as social do’s or early Friday finishes are well-received, employees value more tangible, career-minded gestures. Specifically, gestures such as a commitment to professional development.

So, let’s take our idea and focus it on areas that aid your employees’ professional development. Let’s take five from chasing what we need to do in 2008, and focus on what we’d like to achieve in 2009. It’s forward planning, meets professional development, meets staff motivation.

This process can take as much or as little time as you like. It could start with a one-line email, asking staff to prepare one or two realistic, achievable goals that they might resolve to achieve in 2009. Or it could start with a one-to-one conversation, questioning how employer and employee can work together to define and achieve new goals together.

The crucial point is to be realistic. New year’s resolutions are more often broken than kept, usually because they defy realism about what can be achieved. And of course, promising the earth and not delivering tends to demotivate and demoralise. Goals should be specific, measurable, realistic, and time-based (SMART). Moreover, it is important to define areas for professional development that meet both the individual employee’s needs and the employer’s corporate objectives.

In doing so, you can give employees a valuable resolution to pursue for 2009, and show them that you care about their professional development. You never know, when they are talking about their work with friends and family during the festive break, they might even name you as the perfect boss!

More info - Agreeing objectives (SMART)

More info - The perfect boss

Forecasting cashflow shortfalls

A recent survey from the British Chambers of Commerce (BCC) shows that for most companies cashflow has been worsening since the middle of 2007. Reflecting on this news, The Economist describes cashflow as “the most vital measure of long-term business health”. Cash is king, and right now diminishing cashflow is testing the well-being of UK businesses.

Cashflow forecasting should be paramount on every business’s agenda. Not just because trends show worsening cashflow almost universally, but also because credit has become less readily available and more expensive. (A September snap poll by the FSB found that three-quarters of business borrowers had seen an increase in the cost of credit in the past year).

Fundamentally, the earlier you know about upcoming cashflow shortfalls the better. Time makes you less desperate, for one thing; financiers, whether they be investors or creditors, are not as friendly in the face of desperation. Conversely, forward-thinking, planned attempts to finance cashflow shortfalls put you in a stronger position to attract and broker the right deal. Other challenges - such as boosting cashflow by increasing prices or sales volumes - could also take time, and thus must be planned and implemented far in advance of actual shortfalls.

Forecasting a couple of months in advance affords little scope for significant changes to your financial or strategic plans. Six months may do, and twelve might be better. How far forward you go may depend on how accurately you can forecast (but even less than accurate forecasts are better than nothing as long as they are regularly revised). Or it might depend on what you your biggest challenges are; for example, if declining sales mean you must re-think your sales plan and pump more money into marketing, how long will that take? If the answer is 6 months, you should forecast into and far beyond that period, so you can track potential cashflow shortfalls which might arise during and after.

A cashflow forecast can also be used to forecast and test hypothetical scenarios. Try making a list of ’sensitive’ cash income. For example, income from customers that might themselves be influenced by economic downturn, resulting in loss or non-payment of their business. Or indeed, list products and services that you rely on which could become more expensive (fuel, for example). Then make a copy of your cashflow forecast and play with the numbers. Test scenarios, such as 10 per cent reduction in business, or a 30 per cent rise in energy costs or credit interest. Asking such hypothetical questions could allow you to foresee how exposed you are to changes, three, six or twelve months in advance of a shortfall arising. To illustrate: an astute house-builder might have tested the impact on their cashflow of a 15 per cent average drop in house prices, and used this intelligence to put in place contingencies to cover shortfalls, should the worst happen.

Testing hypothetical changes in cashflow could expose weak spots, but with that, it could inform strategic thinking. If your cashflow relies heavily on the stability of one particular variable - such as sales volumes or fuel prices - arguably your strategic planning should look for ways to manage such a vulnerability.

One potential danger of cashflow forecasting is doing so inaccurately or without adequate, regular review. If your long-term cashflow forecast is not reliable or periodically revised, you may believe your cashflow is sufficient when it is not. Shortfalls could then hit with unexpected bangs as long-term forecasts become immediately different realities.

More than ever before, cashflow forecasting is something to be mastered. The process provides a glance into your financial future, providing sufficient time to identify and solve problems before they arise. But without regular attention, a cashflow forecast could become a false security blanket. These two facts mean you must do it well, and do it often.

More info - Cashflow management: the basics (Including a sample cashflow spreadsheet)

More info - Review your financial position

Next month: Improving cashflow
Whether or not you are facing cashflow shortfalls, what practical steps can you take to improve cashflow? We explore areas including financing options, factor invoicing, chasing late payments, reducing waste. If you have a top tip for improving cashflow, please email us.

Top tips - Prevent and cure IT disasters

When managing complex IT systems and services, things can go wrong. Prevention works with cure to ensure you are ready if disaster strikes. If it does, you need a plan to get your systems back on their feet before you lose too much time, money or data.

In addition to basic but important precautions such as installing security updates and maintaining tight password policies, it’s also important to think about disaster prevention from a strategic perspective, planning critical tasks such as data loss prevention and business continuity.

Read our Top tips - Prevent and cure IT disasters

Have Your Say… Submit your own Top tip

Do you have a Top tip to add to the list? Do you think one particular tip should take top spot, or maybe knocked off the list altogether?

Business Link’s online resources are extremely popular across the South West and beyond. With your contributions, we can make these resources even better, for you and thousands of other readers.

Please send us your Top Tips and feedback directly, or register to publicly comment using the box below.

Thank you! We really appreciate your time and feedback.

The law - Data protection

The Data Protection Act has two aims. First, it provides a framework for handling personal information. Second, it gives individuals the right to know what information is held about them.

1 - Handling personal information - 8 data protection principles

Anyone who processes personal information must make sure it is:

  • Fairly and lawfully processed
  • Processed for limited purposes
  • Adequate, relevant and not excessive
  • Accurate and up to date
  • Not kept for longer than is necessary
  • Processed in line with the individuals’ rights
  • Secure
  • Not transferred to other countries without adequate protection


2 - Individuals’ rights under the Act

  • Right to access. Individuals have the right to know if you, or someone on your behalf, hold information about them. This extends to knowing what information is processed, why, and who it may be disclosed to. Individuals can request a copy of this information, and are entitled to know about the source of the information.
  • Right to prevent direct marketing. Individuals can request you don’t use their information for direct marketing. You must comply within a reasonable time period (In most cases, 28 days).
  • Right to have information corrected. Personal information that is factually incorrect or misleading must be changed upon request. If you don’t, the individual can impose a court order to correct or destroy the information.
  • Right to compensation. Damage claims can be made if your breach of the Act has led to damage or distress (the latter can’t usually be claimed on its own).
  • Right to prevent automated decisions. Individuals can stop important decisions about them being made solely by automated means. For example, recruitment decisions resulting exclusively from automated computer tests may be unfair and subject to prevention.

How to comply

Although the principles of Data Protection legislation are relatively straightforward, implementation of processes to ensure compliance may require some planning.

The comprehensive Business Link guide ‘Comply with the Data Protection Act’ includes:

  • Background information about the 8 DP principles.
  • Information on how to fairly and lawfully use personal information.
  • Information on access rights.
  • Guidance about monitoring employees.
  • Information about the Information Commissioner’s Office (the independent body that enforces the Data Protection Act).
  • A case study entitled ‘How I complied with the Act’.

More info - Comply with the Data Protection Act