YOUR MARKET AND YOUR COMPETITORS

December 21, 2011

YOUR MARKET AND COMPETITORS

In previous blogs we have looked at preparing your strategic plan and business plan in this one lets look at how we define our market and find out who our competitors are.

You know and understand your business but can you define your market, your position in it and who your competitors are, key areas to cover in identifying this include:

  • Your market – its size, historical data about its development and key current issues
  • Your target customer base- who are they and will they be interested in your business
  • Your competitors- who are they, how do they work, what is their market share and what are their strengths and weaknesses
  • The future- What changes are foreseen, how will you and your competitors react to these changes

Understanding your customers helps you to utilise the best sales methods for your business, so you need to understand how they reach their purchasing decisions. Explore your existing customers and find out the following:

  • What do they think about your products and services
  • Why do they need your products and services
  • Why do they buy from you and not your competitors
  • What do they think of your prices
  • What are their expectations from you
  • How do they rate your customer service
  • How do they think you could develop or refine your products or services

Understanding market trends is important for your business, if you are to maximize the opportunities and stay competitive, and you also need to understand your competitors to stay ahead of them so attempt to identify the following:

  • Demand for your product or service – is it growing or shrinking?
  • What are the current general economic and market trends?
  • How customer requirements and buying patterns could change in the future.
  • What new products are in your competitor’s pipeline
  • How competitors are changing – what are their plans?
  • What do competitors offer and what prices do they charge?
  • How do your competitors advertise and promote themselves?
  • Is there any forthcoming legislation which could affect your market?

Having identified the information you need to understand your market place, you now need to start to compile it. Start by looking at information that has already been provided like market reports, official statistics and trade publications. This information can be gathered from a variety of sources, such as:

  • Your local business reference library
  • Your trade association
  • The Office for National Statistics website.
  • Reports in business magazines and the business pages of national newspapers
  • Local authorities and Chambers of Commerce
  • UK Trade & Investment
  • The internet has a wealth of business data utilise the search engines.
  • Commercial publishers of market reports include KeyNote, Euromonitor, Mintel, Datamonitor, The Economist Intelligence Unit and Market & Business Development.

The information achieved from all of the above will enable you to define your market place and competitors in your business plan.

I hope that this information has been useful, but if you require assistance in analysing your market and competitors please contact us.


PREPARING YOUR BUSINESS PLAN

December 16, 2011

My last blog explained the strategic plan for your business, in this one I explain the requirements for preparing your business plan. The strategic plan sets out the direction for the business whereas the business plan sets the objectives and defines the steps to achieve these objectives. The strategic plan is usually a shorter document and provides the foundation and framework for a business plan, which is more substantial and detailed.

It is essential to have a realistic, working business plan for your business. The plan will describe the business, its objectives, its strategies, the market it is in and the financial forecasts. It has many functions from securing external funding to measuring success within your business. The business plan is a living document that will help you monitor your performance and stay on track and will need updating as your business grows.

The plan needs to include:-

  • An executive summary
  • A description of the business opportunity
  • Your marketing and sales strategy
  • Your management structure and profile of key personnel
  • Details on premises, management information systems and IT
  • Financial forecasts

When preparing your plan there are a number of points to consider ensuring you achieve maximum impact:-

  • Keep the plan short and to the point, it is more likely to be read if it is of manageable length
  • Include a cover or binding and a contents page with page and section numbering.
  • Start with the executive summary.
  • Ensure it’s legible – make sure the type is ten point or above.
  • You may want to email it, so ensure you use email-friendly formatting.
  • Even if it’s for internal use only, write the plan as if it’s intended for an external audience.
  • Edit the plan carefully – get at least two people to read it and check that it makes sense.
  • Show the plan to expert advisers – such as your accountant – and ask for feedback. Redraft sections they say are difficult to understand.
  • Avoid jargon and put detailed information – such as market research data or balance sheets – in an appendix at the back.
  • You may have detailed plans for specific areas of your business, such as a sales plan or a staff training plan, but it is best not to include these, though it is good practice to mention that they exist.

I hope that the above information has been useful, but if you require assistance in preparing your business plan, we have a prepared template ready and would be delighted to assist you in ensuring your business is well prepared.


STRATEGIC PLAN FOR BUSINESS

December 14, 2011

DO YOU HAVE A STRATEGIC PLAN FOR YOUR BUSINESS?

All businesses and organisations need a strategic plan to define its direction and to make decisions on allocating its resources to pursue this strategy, including its capital and people. With the rapidly changing environment now is the time to review your organisation, to see if it is fit for purpose and how it measures alongside its competitors.

A strategic plan is a realistic vision for the future and can maximise your potential for growth. Do not confuse strategic plan with a business plan. A business plan is about setting short term goals about a specific area of your business and we shall explore this in a blog shortly. By identifying in your strategic plan exactly where you want to take your business and how you will get there, should help you reduce and manage the risks that come with growth.

 Strategic planning deals with three key questions:

                                    1.    What do we do?

                                     2.    Who do we do it for?

                                     3.    How do we excel?

The strategic plan should set out the process for the organisation for the next three to five years, but it is not something that is produced and you pat yourselves on the back and put in a drawer for three years, it needs to be used as a measurement tool for the business and certainly reviewed at least once a year, as it should be utilised as a tool for aiding the budget process and measuring the success and progress of the business.

The starting process is that you need to understand where you are now, so we start with a SWOT Analysis where we review the strengths, weaknesses, threats and opportunities of the organisation and stimulate discussion on key points that affect the organisation. This is not a process that can be carried out in isolation it requires input and commitment from all key members of the team. From our SWOT analysis we can determine where we want to go “The Vision”. This is where we see ourselves in three to five years time; the size, turnover, operating base, structure and will we stick with the core business or diversify. We then need to define how we will achieve this with the “Mission Statement”, this states the fundamental purpose, defining the customer, critical processes and desired level of performance. In conjunction with the mission statement we should identify the “Core Values”, what the business stands for. The next stage is the Business Objectives, where we outline the desired outcome of the strategic plan and deadlines for achieving it. From this we produce the Key Strategies, which is how we implement the strategic plan and this should be broken down into two areas, the critical strategies and the important strategies. The plan is completed with the Key Decisions, this is a summary of the resourcing requirements required to drive the process, such as the financing requirement, the structure and manning levels required and the premises and equipment required.

Having established what your organisation needs to do take a look at your competitors. Do you know who are your key competitors? Who are the emerging competitors? What are these competitors doing well, where do they have the edge, what are their weaknesses, can we learn from them.

The strategic plan now needs to be implemented, a process that requires careful planning.

The key to implementation of the objectives identified in the strategic plan is to assign goals and responsibilities with budgets and deadlines to responsible owners, your key team members. They also need to brief their team members on the key areas of the plan that effect them and set goals on how they will achieve this.

Monitoring the progress of the implementation plan and reviewing it against the strategic plan will be an ongoing process. The fit between implementation and strategy may not be perfect from the outset and you may find it necessary to review your plans as you progress.

Monitoring implementation is the key. Using key performance indicators (KPIs), which we discussed in an earlier blog, and setting targets and deadlines is a good way of controlling the process of introducing strategic change.


KEY PERFORMANCE INDICATORS

December 5, 2011

MEASURING THE SUCCESS OF YOUR BUSINESS THROUGH KEY PERFORMANCE INDICATORS

How do you measure the success of your business? Do you use

Key Performance Indicators (KPIs)?

KPIs are designed to give you a snapshot of your business in relation to the goals you have set for it. From it you should be able to see exactly how you are doing against pre-designed criteria be that historical data, goals or competitors.

There are three things that you need to think about and keep in mind during every stage of defining a KPI project. It should also be noted that KPIs should not be confused with a critical success factor – that is, something that needs to be in place to achieve an objective; for example, recruiting skilled resource may be a critical success factor for an objective related to business expansion. Rather, a KPI is a measure of the effectiveness of this objective in contributing to business growth; for example, sales revenue or market share.

When deciding on the KPIs for your business ask yourself some questions:

Is it key?

Is this essential to your business success?

What are the real opportunities that will make a real difference to the success of your business?

The right place to start is to look at financial and management reports. Do you have a benchmark for comparison, such as industry norms or from previous personal experience, find which items are not in line and highlight them, which of these are projecting your business forward and which are holding it back?

Is it about performance?

Is the measure something that actual affects or is affected by your business performance, is changing this measure by 10% going to alter the success of your business, is it something you can control or is it impacting your business or is it an environmental opportunity that affects everyone in your market equally. Can you do anything about it or would you be wiser to focus your attention on other directions?

Is it really an indicator?

What is it telling you, are you managing it realistically? Can you put a numeric value on the measure so that you can track progress and change and if something is changing do you know why?

Once you have a realistic list of KPIs (I would suggest no more than 5) you have done half the work, but now you need to make some truly strategic decisions.

DON’T FORGET IF YOU CAN’T MEASURE IT YOU CAN’T MANAGE IT

EXAMPLES OF KPI’S

  • Sales revenue year on year
  • Spends per customer/transaction
  • Customer satisfaction levels
  • Stock levels
  • Occupancy levels

Choose KPIs that are important to the business and everyone involved can commit to it and focus on them.

When you have selected the opportunities most critical to improving your business performance and identified the KPIs that will monitor and deliver change you need to identify all the business processes involved in the activities you want to measure. From there you can identify the IT and manual systems that manage these processes and report on the results


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