Brexit will go down in history as one of the most divisive and fundamental events in the history of the United Kingdom. At some point between now and the end of October, we will know what the future might look like, and many companies, both in the UK and in the EU, have taken significant business decisions to mitigate the impact of Brexit. Neil Pattemore investigates what independent workshops should consider.
Once Brexit becomes clearer, you should start to analyse its expected impact and create a strategic plan, which is a key component of planning the future of your business and its subsequent growth. It will help you to prepare a realistic vision for the future and, in doing so, should highlight both threats and opportunities.
A strategic plan should not be confused with a business plan. A business plan is about setting short or mid-term goals and defining the steps necessary to achieve them. A strategic plan is typically focused on a business’ mid-to-long-term goals and explains the basic strategies for achieving them.
When drawing up a strategic plan, one must first step back from their day-to-day operations and ask where your business is heading and what its priorities should be. To do this, you will also need to start collecting and analysing a wider range of information about your business, about how it is structured and operating, and about how conditions are developing in your current and potential markets post-Brexit.
Secondly, you need to ask yourself the following questions:
■ Where is your business now?
You must evaluate the business’ structure, management information systems, how it operates internally, where its profit comes from, which areas would disproportionately increase overall profit, and how it compares with competitors. Keep your review separate from day-to- day work and be realistic, detached and critical in distinguishing between the cause and effect of how your business operates. It is also best practice to document and review all of this at least once a year.
■ Where do you want to take it?
Here you need to set out your priority objectives. Work out your vision, mission, objectives, values, techniques and goals to run a better business. What do you want your business to look like in five or 10 years? What do you want your source of competitive advantage over your rivals in the marketplace to be?
■ What do you need to do to get there?
What changes will you need to make in order to deliver on your strategic objectives? What is the best way of implementing these changes? What changes to the structure and financing of your business will be required, and what goals and deadlines will you need to set for yourself and others in the business?
However, there also needs to be a reality check of the practical realities of your current position and possible changes, such as increased investment in capital and other resources that would be required to implement your vision. A strategic plan needs to be realistically achievable.
How to get started
Try to find people who possess the analytical skills to create a successful strategic plan, and create a group of creative thinkers and those with a solid grasp of operational detail. These people may already work in the business, or they may be ‘business savvy’ externals, which can be found at the local Chamber of Commerce, ‘business breakfast’ clubs, or local business support groups which may be Council or Government run. Also, don’t be afraid to listen to the opinions of key employees.
Structuring the work
Firstly, decide on a meeting schedule. Make sure that everyone involved knows what is expected of them and when they need to deliver it. The documentation should define the process and the desired outcome.
Following this, you should conduct a SWOT (strengths, weaknesses, opportunities and threats) analysis, defined by the following criteria:
- Strengths – attributes of the business that can help in achieving the objective
- Weaknesses – attributes of the business that could be obstacles to achieving the objective
- Opportunities – external factors that could be helpful to achieving the objective
- Threats – external factors that could be obstacles to achieving the objective
After Brexit, it would be particularly useful to also use the ‘The Five Forces’ technique, which identifies five key determinants of how operating in a given market is likely to be for a business. The model assesses:
- Your customers’ bargaining power – the higher it is, the more downward pressure on prices and revenue they will be able to exert
- Your suppliers’ bargaining power – the ability of your suppliers to push prices up can impact significantly on costs and profitability
- The threat of new competitors entering your market or industry
- The threat of customers switching to substitute products and services, such as ‘mobility service’ providers and all- inclusive personal lease plans
- The level of competition between businesses in the market, which can depend on the relative strength of the businesses and the cost to customers of switching between them.
Effective strategic planning involves considering options that challenge the way that business has been done up to this point. Growing a business is not something done ‘at all costs’. However, an honest assessment of the options allows for any decisions made to be as informed as possible. Finally, when implementing the plan, monitoring implementation is the key. Using key performance indicators (KPIs), and setting targets and deadlines is a good way of controlling the process of introducing strategic change.
Finally, your supporting business plan is typically a short-term and more concrete document than the strategic plan, and it should focus more closely on operational considerations such as sales and cash flow trends. If you can ensure that your strategic plan integrates with your business plan, you’ll go a long way to ensuring its successful implementation, further ensuring that there is still life in your business even after Brexit.