The importance of strategic business planning to secure the future and maximise business value

Whilst I cannot tell you what significant events will happen in the future, I can unfortunately assure you there will sizeable events, outside of business owners’ control, that will affect us all in the future. The last 2-3 years have demonstrated that being resilient to macroeconomic shocks is as important an attribute as any other for a business looking to increase their value.

The only way to prepare for the future, is to plan for the worst. To some this might seem an academic exercise or particularly pessimistic, but by being prepared for the worst, things can only end up better.

The best way to do this is to have a clear, concise, thorough, business plan and strategy which identifies risks and has plans to mitigate them. The difficulty is knowing where to start.

A simple exercise that can be undertaken is to ask each member of the senior management team (and maybe other team members too) “what is the worst thing that could happen to the business?”. The answers will naturally vary dependant on people’s role, age, outlook on life, but the responses will likely focus on aspects such as:

• loss of a key customer/employee
• significant increase in production/running costs
• a key supplier going out of business
• external funding being withdrawn
• a fire in the factory
• systems go down for a day
• hackers breach our defences

All of these scenarios have the potential to materialise, and to be catastrophic too, but very few businesses have plans on how to operate when they do, other than perhaps relying on the camaraderie of team members to pull together or calling up a 3^rd party, fire brigade/IT consultant.

Even if you cannot confidently answer those questions yet, it’s not too late to plan, consider, document, and challenge yourself how your business will survive uncertainty whilst responding to significant events. Many businesses put together a business continuity plan or undergo a strategic business planning exercise to address these concerns. The plans you put in place now will invariably help your business operate regardless of what happens in the coming months and years and be key to maximising business value.

Not all of these failures will be immediate, but within a period of time those businesses are unable to make changes quickly enough to secure the long-term future will cease trading.

However, with some careful planning and scenario and stress testing, business will be able to not only recover, but to succeed, with stronger margins, more engaged staff, and a more resilient and agile business. All of these points support the shareholder value equation framework of maximising the value of a business through our business planning methodology.

Our Strategic Business Planning methodology helps businesses to plan for life both before and after major events including helping identify the customer value proposition, areas of strength and weakness, plus creating alternative plans if “the worst thing happens to the business”. 

Those business owners that have made the time to work “on the business” will have not only considered the horizon of opportunities, but will more importantly have incorporated risk and continuity planning into future plans. These owners will be in a better position to navigate the uncertainty that comes with major events, and this will be a significant asset when negotiating with potential buyers or investors and proving the value of their company. For mid-market companies who are often more susceptible to external shocks than large multi-national corporations, this process is even more important.

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