April 29, 2022 | IMPACT Insights
Strategic Planning – A Team Effort
At any stage of your business, it is important to have a written strategic plan that is built with the help of your managers and your advisors. Your plan will evolve as your business grows and you learn, so you’ll need to review your plan periodically and adapt it as necessary.
When building your plan, start with your short and long-term goals. You need to know where you want to go, before you can plan how to get there.
Short Term Planning
In the short term, you will need to have a plan for the key areas of your business:
- Operations – Examine your processes to find ways to improve efficiencies. You can impact your cash flow and profit by finding ways to cut costs and maximize productivity. You may have to make investments in technology to do so, but you’ll get a long-term ROI that will make it worthwhile.
- Sales and Marketing – Determine what initiatives you can put in place to attract new customers and increase revenue. Create a short-term sales and marketing strategy
- Financial planning – You need to determine where you should allocate your resources. Your CFO will be heavily involved in this process. You’ll need resources to invest in technology to improve processes, and for sales and marketing initiatives, as well as resources to manage your short-term growth.
When you begin to focus on long-term growth, you need to determine where you will focus your resources and determine what resources you will need over time to support your sales growth. Will you need to expand your manufacturing, adjust your inventory management, increase customer support resources, or implement other process expansions?
There are four key factors to analyze:
- Human Resources
- Strategic Growth Management
To grow, you obviously need to increase your revenue in some way. You can invest in more sales and marketing initiatives, new locations, or an acquisition of another company. Your entire management team should be involved in making these decisions, particularly your CFO. You’ll need to know how much each option will cost and how much revenue your plans will potentially generate.
Then you need to determine where the investment resources will come from, and when you’ll achieve a break even point. If you need to raise capital, your CFO can help you determine the best way to do so, and you may need to involve your banker in the conversation.
Growth initiatives usually mean that you’ll need to add human resources to support your growth. You may need new people for sales, marketing, operations, customer service, and even management. You need to make sure that your entire management team is equipped to manage your business growth. Growth means increased complexity in terms of management, so you need to make sure your management team is large enough and skilled enough to handle it. You may want to engage a management consultant to assist in this process.
Operations need to stay efficient as you grow, and resources may be required to make that happen. More sales may mean you need to increase production, customer service, and systems. You need to make sure that:
- You can manage inventory to meet demand, but not negatively impact your cash flow
- Costs don’t increase disproportionately to sales
- Your cash flow is properly managed
- Your systems can handle the new volume
- Customer services levels are maintained
Your entire team must be able to manage the efficiency of your operations at new sales levels. You need to make sure your resources have been sufficiently allocated to meet your new operational needs.
Strategic Growth Management
When planning how to grow your company, you must plan your strategy around the above three elements. This is a complex process because all of the elements are related, and so creating your strategic growth plan should involve your entire team.
Your team should come together to plan how you will manage:
- Human resource needs
- Operational processes
- Additional costs that may be incurred
Then, a full financial plan must be developed by the CFO, in partnership with the management team, that encompasses all the elements of the strategic plan.
This involves creating specific revenue and cost projections at various points in time, since you are planning for the long-term. This will help you plan your capital needs, KPIs, cash flow, and cost management plans. This is a complex process that involves a thorough understanding of the company and its goals. A strategic CFO will be able to examine every detail of the plan and how it relates to goals and create a financial plan that will move the company forward.
As you can see, however, the planning process must involve the entire team working in conjunction with the CFO.
C-Suite IMPACT CFOs Can Help You Through the Strategic Planning Process
At C-Suite IMPACT, our CFOs have a broad range of knowledge, skills, and experience and can help you before, during, and after the strategic planning process. We have a suite of resources in our portfolio that you can access as well for all of your business needs. The C-Suite IMPACT Team will provide ongoing guidance and support for the health and growth of your business. Call us today to learn more.