It’s often overlooked by business owners but government small business grants can be a great opportunity for Qld businesses to increase cash flow and gain much-needed support to grow.

The local, state and federal governments are currently offering various programs of financial assistance and grants to support small and medium businesses to continually improve and pursue growth.

If you have plans to invest in the development of your business this year it is definitely worth looking at what government grants are available and whether you are eligible.

Government Small Business Grants Currently Available

1) Entrepreneurs’ Program (Australian Businesses)

Co-funded grants of up to $20K

This is the Australian Government’s flagship initiative for business competitiveness and productivity. The program ensures businesses get the advice and support needed to improve their competitiveness, productivity and to seek growth opportunities. Support includes advice and co-funded grants to accelerate commercialisation, take advantage of growth opportunities and help you access the latest technology, research and innovations. MGI is working with a number of clients who have used this grant to fund our business advisory and growth services.

To be eligible you must turnover between $1.5 – $100 million (between $750,000 and $100 million for remote and northern Australian businesses) and operate in one or more growth sectors:

• advanced manufacturing;
• food and agribusiness;
• medical technology and pharmaceuticals;
• mining equipment, technology and services;
• oil, gas and energy;
• enabling technologies and services of the listed above
• or satisfy the criteria to be a tourism business located in northern Australia.

In addition your business must meet one of the following:

• be engaged in, or expanding your operations to be engaged in, interstate or overseas trade and commerce
• a foreign corporation formed within Australia
• a corporation for which trading or financial activities are a substantial or significant proportion of the corporation’s overall activities
• a corporation or body formed under commonwealth law.

Learn more about the Entrepreneurs’ Programme grant.

2) Advance Queensland Accelerate Small Business Grants Program (Queensland businesses)

Matched funding of up to $10K

This is one of the government business grants for business owners that can demonstrate high growth and employment aspirations to engage a strategic adviser to work closely with them in their business. To be eligible you need to be a Queensland business that has been trading for 3 years, have a minimum turnover of $500,000, have a maximum headcount of 20 employees and be experiencing growth with a clearly defined growth opportunity. Learn more about the Advance Queensland Business Grants Program.

3) Advance Queensland Business Development Fund

Funding between $125K and $2.5M

The government offers co-investment for Queensland businesses undertaking groundbreaking research, ideas, products or services to help make their ideas a reality. Find out more.

4) City of Gold Coast Programs (Gold Coast businesses)

Growth Accelerator Program 

This program is specifically targeted at high growth businesses and will assist in identifying the critical steps needed to achieve the next growth phase – rapidly and sustainably. It equips businesses with an understanding of how to build a thriving business that is not reliant on one person and identify and overcome potential barriers for growth. MGI South Queensland has delivered this program for the last three years. Learn more.

Lead for Business Growth

This session provides business owners with the leadership tools and knowledge to successfully lead their business towards continued growth. Learn more.

Market Identification Master Class

This master class will take you through a technical process to test and qualify your key target markets and the best channels to reach them. Learn more.

Emerging Exporters Program

This program helps local businesses to develop their export supply capabilities with the aim of developing export markets globally. Learn more.

Securing Council Supply Contracts

The City, as the second largest local government in Australia, undertakes substantial procurement. This session will provide you with information and updates on how to take advantage of local procurement opportunities. Learn more.

5) Brisbane City Council Grants (Brisbane organisations and NFPs)

The Brisbane City Council provides funding for not-for-profit community groups and creative industry initiatives. See an overview of what local government grants are available here.

MGI South Queensland have tax advisors and business consultants in Brisbane and on the Gold Coast who can help you navigate the various grants, determine which might be right for you to apply and assist you in the process.

MGI South Queensland can assist Brisbane and Gold Coast small businesses with tax advice as well as identifying and applying for appropriate government grants.

If you are a small business interested in applying for government small business grants and would like to know more about what programme’s MGI South Qld’s clients have been successful with contact us today.

In my work advising business owners I’m often asked the following question – “how much profit should I be making?” Or to put it another way, “how much profit is enough?”

Often a business owner will advise me that they’re making a certain gross profit margin (GP margin) or certain net profit. Sometimes, the GP margin might appear reasonable and other times it might not. Then I ask them how many products or services they provide. “How many distribution channels do you have? Do you sell online, wholesale, retail etc.?” Usually, the answer is that they sell more than one product or service, usually many more. Sometimes they’ll even sell through multiple distribution channels.

---

Granularity

I then ask them – “do you have granularity over the profitability of each individual product or service and/or distribution channel?” The response is usually a blank look, before the inevitable “aha” moment. The reality is that whilst a business may achieve a GP margin of say 40%, you can be sure that it is not achieving 40% on every single product, service or distribution channel. On some lines, the margin may be higher. On others it will be lower.

In my experience, the reality is that many businesses do not have a clear picture on which of their product or service lines are profitable and which aren’t.

---

Boston Matrix

The Boston Matrix is a useful model to use to focus attention on this issue. There appear to be numerous different examples of the Boston Matrix. Below is an example of the one I use.

As you will see, it focuses on two axes:

• The x axis (or horizontal axis) focusing on Business Strength. In other words, how good is the business at producing the various products or services? These attributes are usually internal to the organisation.
• The y axis (or vertical axis) focuses on the Market Attractiveness of the various products or services sold by the business. These attributes are usually external to the business.

The challenge is to then come up with a series of criteria for determining where a particular product, service or distribution channel fits on the x and y axis. For example, some factors that may indicate the market attractiveness of a particular product could include:

• The growth potential of the market
• Margin or profitability
• Market size

Some factors that may indicate whether the business has business strengths in each product could include:

• Production efficiency
• Product quality
• The skills and knowledge of the business

---

Dog, cash cow, star or wildcat?

The key is to then allocate a score (out of 10) to each attribute of the x and y axis for each product line, service or distribution channel, as well as a total sales figure for each product. The sales figure will help you assess the size of the portion of your business that is either a dog, cash cow, star or wildcat.

The challenge is to rid the business of dogs, use cash cows to fund the development of wildcats which may in turn develop into stars.

Whilst this may be helpful at a superficial level, it doesn’t help identify how profitable each of these products and services are to your business. Often, there will be different costs to purchase raw materials for a particular product. There may also be different labour and overhead costs. In my experience, a large number of SMEs don’t allocate costs with sufficient clarity. They are therefore unable to achieve a true appreciation of the profitability of individual product lines or distribution channels. The result of this is to continue selling dogs which are subsidised by stars and cash cows.

---

Activity Based Costing

In my view, the most appropriate manner to obtain clarity on product profitability is by Activity Based Costing. However, this is not always feasible or economical for many SMEs. For this reason, I recommend that business owners apply the Pareto principle. In other words, spend 20% of the effort to get 80% of the information, not the other way around. So I try to encourage them to focus on allocating the main operating costs to product lines initially. They can then refine it down the track if they want more precise information.

Costs that may typically fall into the “easy to allocate” bucket include purchases or raw materials, direct labour, premises and plant and machinery costs. In my experience, this can be achieved in even basic accounting packages by creating “jobs.”  Alternatively code the above costs to a “job”, which may be a particular product, product category or distribution channel.

Once you are able to identify which product categories are not as profitable as others, you can then implement a strategy to address it. As the saying goes – what you can measure, you can manage. If you’re not measuring it, you can be sure you’re not managing it, meaning you’re flying blind.

In my work dealing with business owners, I’m often asked how to increase sales. Often, lifting sales can be viewed as too daunting, particularly if your current sales are already significant. I think this is because people don’t often break sales down into its component parts.

Invariably I focus on two simple, yet effective processes for breaking the sales process down into manageable chunks to increase sales.

---

The Revenue Model

The first process I recommend is what I call the Revenue Model. This model can look different for different businesses. For many businesses, the revenue model looks like this:

Sales = Number of Customers x Transaction Frequency x Average Dollar Sale

Example:

$1m = 1000 x 5 x $200

As you can see from the above equation, sales volume is an outcome. It is a result. If you want to influence the result, you must first influence the parts that it is comprised of.

The number of (active) customers an organisation has, is relatively easy to determine from your accounting system. Transaction frequency refers to the number of times your customers buy from you each year (on average). This can be calculated by dividing the number of invoices issued during a period, by the number of (active) customers. The average dollar sale is simply your total sales for the period divided by the number of invoices raised in that period.

It therefore follows that if you want to increase sales, then you can achieve this by increasing the number of your customers, by increasing the number of times they buy from you (transaction frequency) and increasing the average dollar sale (getting them to buy more from you each time) and a combination of each of the above. From my experience, many businesses focus on bringing in new customers and ignore the potentially ‘low hanging fruit’ of selling more to their existing customers.

It is then relatively easy to develop strategies to achieve increases in each of the above components of sales. However, it only takes a small increase in each of these parameters to bring about a significant change in your sales volume. To illustrate, let’s assume we were able to increase each of the above three parameters by (only) say 10%. Here’s what your sales volume would then look like:

$1.331m = 1,100 x 5.5 x $220

As you can see, the net result is a 33% increase in sales. The key then is to set key performance indicators (KPI’s) which are measured and managed each month to ensure you hit the above numbers.

What are the lead indicators you should be measuring for new customers? Maybe it is sales calls made, conversions etc.

What are the lead indicators you should be measuring to increase transaction frequency and average dollar sales? These might include sales promotions, bundling (e.g. three for the price of two, or 50% percent off the second item purchased) etc.

---

The Ansoff Matrix

The second process I recommend for increasing sales is the Ansoff matrix, developed by H. Igor Ansoff and first published in the Harvard Business Review in the late 1950’s. It typically looks like this:

This tool forces you to think strategically about where your business growth will come from. Will it come from:

• selling your existing products to your current customers (market penetration);
• selling your current products to new customers or markets (market development);
• selling new products to your existing customers (product development); or
•  selling new products to new customers (diversification).

Clearly pursuing sales growth in some of these areas will be easier than pursuing them in other areas. The key is to work out which strategy (or blend of strategies) is right for you having regard to the stage of your business life.

Part of the Revenue Model above was focused on each of the areas in the Ansoff matrix. Increasing the number of customers was about market development (selling existing products to new customers). Part of it was about market penetration (selling more existing products to existing customers). Increasing the average dollar sale could also be about product development (selling new products to existing customers).

Once again, the key is to develop and implement strategies for where your future business will be generated from.

Just one final comment on sales growth. Growth is important, but it needs to be sustainable growth. The insolvency courts are littered with stories of fast growing businesses that went broke.

As the saying goes – turnover is vanity, profit is sanity and cash flow is reality.

Fundamentally, there is only one reason that businesses go broke – they run out of cash. Business cash flow problems are a major problem for small growing businesses as well as bigger well-established ones.

So how do businesses (even listed ones) run out of cash and what can you do to make sure it doesn’t happen in your business?

There are three basic reasons for business cash flow problems

1. They are not profitable in the first place

They don’t have a business cash flow problem; they’ve got a profitability problem. In other words, the lack of cash flow is a symptom of poor profitability (or even losses). If you have a profitability problem, unless you fix your business model and restore profitability, you’ll never get cash flow under control.

2. The second is that they use short-term working capital to fund the acquisition of long term assets

In other words, they use their working capital (short term funding) to purchase plant and equipment or property (long term assets). If your business is growing rapidly, this is a big no, no. You’ll need that working capital to fund your growth, particularly larger inventory holdings.

In most cases this issue can be fixed by sale and lease back of the assets (assuming funding is available). But the key to avoiding business cash flow issues is never to use your working capital to acquire long term assets unless you’re absolutely sure you have significant excess and know that you won’t need it in the near future.

3. The third reason for business cash flow problems is that they grow too fast

Yes, businesses can grow too fast and it is a situation we see all too often. Make no mistake, a fast growing business is potentially in danger territory, particularly if it doesn’t have access to an endless supply of funds – and which businesses have that luxury?

For many fast growing businesses, this means holding more and more inventory. As the business (and sales) grows, more of the profits are required to be used to invest in more and more inventory to stock more and more stores. If you’re in a business where margins are tight – whammo! – you have lower profits to fund ever increasing inventory. Should inventory turnover slow you could also be in serious trouble.

If you also happen to have a business where you give credit terms to your customers, then not only do you have a build-up of inventory, but you also have a build-up of debtors. These have to be funded from somewhere. Unless the business is highly profitable, the profit alone may not be enough to fund that growth. This invariably means going to your friendly banker but at some point there will be a limit to which banks will be prepared to fund your growth.

How to avoid running into a business cash flow problem?

There are three key measures every business should be checking on a regular basis, but particularly fast growing businesses, to make sure that they have a sound cash position. If you don’t currently know these you’re flying blind. Make sure you ask your accounts team for more information.

Your Free Cash Flow
Your Free Cash Flow (or available cash) is simply that. It is the amount of cash you have left out of profit after funding the increase in size of your business. If you’re not measuring and monitoring this then you’re flying blind.

Your Working Capital Burn Rate
This is simply the amount of working capital (debtors plus stock less creditors) as a percentage of sales. If this is (say) 25%, then you know that for every additional $1m in sales, you’re going to need $250k in working capital to fund that growth.

Your Sustainable Growth Rate
This is simply the rate of growth the company can sustain without adversely affecting its proportion of debt to equity funding. It’s called “sustainable growth rate” for a reason.

There is a saying that goes ‘turnover is vanity, profit is sanity but cash flow is reality.’ We have worked with countless high growth businesses who have been stunned to learn that their financial position is unsound despite their growing sales.

It might sound crazy but at times it is essential to reign in your growth to ensure a sustainable journey in the long run. It might be painful to turn down opportunities at the time but trust me, you will be thankful when you come out with a sound business in the end.

At MGI South Queensland our specialist business growth advisors in Brisbane and on the Gold Coast can help you avoid many of the pitfalls of growing your business and ensure you maintain a healthy business cash flow.

We’re also able to offer outsourced CFO services which can be completely tailored to the needs of your organisation. From cash flow planning and management to helping you reduce the risks your business is exposed to, talk to one of our CFO consulting partners today.

The famous Sun Tzu once said ‘weak leadership will destroy the finest strategy while forceful execution of even a poor strategy can often bring about victory’. Sun Tzu is a legendary military strategist. He is the author of The Art of War a masterpiece that continues to be cited by generals, political and business leaders worldwide. Clearly Sun Tzu knew something about how to create a winning strategy. And yet in Sun Tzu’s mind the focus is definitely on implementation. For me, there’s a lot to be learnt in this approach when developing business strategy.

Developing Business Strategy That Works

If you’ve ever researched business strategy you will know that there are dozens of different models you can use – from Business Model Canvas, Porter’s 5 forces, BCG Matrix and more. In our opinion these strategies while definitely thorough and clever, miss one crucial element. For many businesses the time that it takes to create the strategy means that it either never gets completed or once it’s done it is not easy for everyone to follow and so you fall into the trap of putting it away for another day.

Choosing not to develop a business plan at all also won’t cut it. After all, if you don’t have a plan how on earth do you know which road to take or where you are headed.

Steps To Creating A Strategic Plan

If you’re developing business strategy, you want to know that your effort won’t be wasted.  At MGI we instead advocate the simple one page plan. It helps you translate your vision into your business strategy by looking at:

• Where are we now?
• Where do we want to be in 6 months, 12 months, 2 years – however far out you want to work
• How are we going to get there?

From here you need to detail the key actions the business needs to undertake and capture this in a one page plan.

Too simple?

That’s the point. A one page plan is easy to develop and is easy to read, meaning that everyone knows who needs to do what, by when.

It’s not strategy that will win the war it’s execution

Remember what Sun Tzu said about execution being critical to winning the war? If you want execution you need accountability. The difficult part in this process is making sure no one in your team puts the plan into their bottom draw.

The way to do this is to integrate your one page plan into regular team meetings and performance reviews. Each week you review who was supposed to have done what, whether it has been achieved and what the outcome was.

Why your plan shouldn’t be a static document

Gone are the days when you spend the month of January developing business strategy that sets out what you will do for the rest of the year. The reality is that the landscape that we are operating in is changing fast and you need to be able to pivot (change your strategy without changing your vision) to be able to keep up. For this reason your one-page plan is a constantly evolving list of actions that you tick off and update as new opportunities arise or changes are required.

So in summary if you haven’t got a business plan don’t wait till a slow time of year to get cracking. Set aside a few hours this week to reflect on where your business is now and where you want it to be and start capturing this in a one page plan.

The team at MGI South Queensland have worked with many businesses throughout the region to help them in developing business strategy approaches that are practical and that don’t languish in a drawer! Our business growth strategies will help you to not only develop your plan but to keep you accountable and on track to achieving your business goals.

With a number of highly experienced small business mentors in Brisbane and on the Gold Coast, we are perfectly placed to support your growing business. Call the team now on 07 3002 4800 or book an appointment online.

Ever wondered how you can get funding to help your growing small business? Here are seven business funding options you may not have considered.

Company funding option 1: Government grants

If you are eligible, government grants can be great company funding options with minimal risk. However, typically the application can be lengthy and complicated.

If you are interested in pursuing government grants, websites such as Australiangovernmentgrants.org and business.qld.gov.au can help make it easier. MGI can also help you to assess your eligibility for various grants and tax offsets.

Government funded innovation centres that you should also look into include ilab, QUT Creative Enterprise Australia and  Innovation Centre Sunshine Coast. The City of Gold Coast also provides support to start-ups and growing businesses and R&D tax offsets is another way to access funding for innovation.

Small business funding option 2: Small business loan

There is a common perception that securing a small business loan can be difficult. To be fair this is often true, particularly in your early days or if you don’t have a line of credit against your house. However, there are ways to increase your appeal to the banks. Most importantly you need a solid business plan, profitability projections and some of your own money on the table.

Using your accountant to approach the bank can be beneficial. If you can convince the bank that (together with your accountant) you have your finger on the pulse of your business then you’re a long way there.

Business funding option 3: Debtor financing or funding

Traditionally thought of as a lender of last resort, debtor finance companies should not be overlooked as company funding options for growing businesses.

Provided the business is profitable, debtor finance allows you to borrow against the debtor book. There are a few drawbacks associated with using debtor funding, however when managed correctly these can be overcome and I have certainly seen debtor funding used to beneficial effect by business owners who had little or no ‘bricks and mortar’ security.

Some debtor funding companies will require the arrangement to be disclosed to the customer and outstanding debts are handled by the debtor finance company.

This needs to be handled with care and communicated as a good news story (i.e. ‘the business is growing and needs cash to fund that growth’ and ‘the business has outsourced its debtor management function thereby enabling the owner to focus on business growth’).

Debtor finance is also generally more expensive because of the inherent risk but if it’s your only source of funding and if you’re making a return on capital from your business that is greater than the cost of the debtor finance, then it is worth doing.

Using your debtor book to fund your growth makes sense. As your business grows, you can borrow more to fund that growth. However, this form of funding is not perfect, so speak to your accountant or business adviser before heading down this path.

Business funding option 4: Negotiating an advance from a strategic partner or customer

If you can find a major customer, or a complimentary business, who sees immense value in your idea you may be able to negotiate for them to fund the growth of your business.

Business funding option 5: Angel investors

Angel investors offer another business funding option for your business. There are a number of angel investor groups in most cities and a number of angel investors who operate outside of a business angel network.

Business funding option 6: Venture capital

If you are a well-established company looking to raise a serious amount of capital, venture capital firms may be an appealing option. Because of the size of funding provided by venture capital firms, and the high-risk nature of the loan, venture capital funding comes with a number of cons. Generally VC partners will want to be involved at the board level. Sometimes they may also require more than a 50% stake in your company, which means you could lose management control. Ultimately the decision to pursue venture capital should depend on whether it will open up much greater opportunities. In other words, are you better off with 50% of something or 100% of nothing?

Business funding option 7: Out of the box ideas

Sometimes it pays to think outside the box. Airbnb’s founders got some early funding by selling Obama O’s and Captain McCain cereal during the McCain-Obama election campaign. It’s not orthodox but it did get them a foot in the door.

Want to discuss company funding options for your growing business? Often funding a growing business can involve using a combination of the above strategies. If you are interested in discussing business funding options contact us today.

A question that I often get asked by founders of high growth businesses is if they have to step away from operating in their business, how can they build a team that will hold true to their vision and will operate the business to the standard that they would.

It’s a good question. After all when you hire in support you are hiring human beings and it’s very hard to get human beings to do what you want.

A while back I had the pleasure of attending an event by Dan Barnett where he discussed just this.  The below blog shares the points raised at this conference.

Why is it that some leaders achieve results while other don’t?

Why is it that certain leaders like Steve Jobs and Richard Branson were able to create high performing teams that can achieve results that the rest of us could only dream of.

Branson and Jobs focused on working on their business (not in it) and yet somehow they managed to ensure that their customer got the same exceptional service as if it were delivered by themselves time and time again, team after team, in country after country.

How?

The results force

Just like Simon Sinek’s theory of the golden circle that we have discussed in previous blogs (if you haven’t read this blog click here), the Results Force identifies that it is beliefs that drive behaviours, which in turn drive results.

The problem is as business owners and CEOs we tend to talk about results because that’s what we care about.

However according to Barnett effective leadership begins with focusing on your company’s beliefs and where the company is going.

A great leader will then make it exceptionally clear what behaviours the company and its people need to follow to get there.

The Apple Example

If you look at Steve Jobs’ leadership this is exactly how he operated. At Apple, Steve Jobs said we believe that we are going to put a dent in the world and we are going to change the way the world operates in amazing ways.

Jobs said we will do this by following these key behaviours:

We focus on design
We simplify, we humanise technology
We build extraordinary products
We don’t sell cheap
We are family orientated

He then went on to say if you don’t believe this or if you don’t want to follow these directives that’s ok; just don’t come to work for Apple.

Of course Apple has gone on to produce one of the most high-performing teams ever. Based on accounts from people who worked at Apple with Steve Jobs they say ‘we did what we did not because we wanted to please Steve Jobs but because we wanted to put a dent in the world and we believed that Job’s key behaviours would achieve that’.

Leadership is about leading culture

Another word for a company’s beliefs and values is its culture. Put into action, culture is ‘the way we do things around here’. So if culture is so fundamentally important to the development of successful organisational teams how do you lead culture?

Step one – Find out what your customers value

There is no point building your culture around something that your customers don’t value. If you don’t know what it is that your customers value find out.

Step two – Develop your culture

Define what you believe and what are the behaviours that will help you achieve these beliefs.

Barnett also challenges leaders to understand their make or break, which is the one thing that must be done extraordinarily well to achieve your vision, and to take the lead on this.

(In the Apple example above the make or break was a focus on design).

Once you have defined these behaviours make sure they are reflected in how you hire as well as how you reward and promote your people.

Hiring

Only hire people who fit your culture and share the beliefs of your organisation.

One strategy to help you determine this is to use behavioural based interview questions that reflect the key behaviours of your organisation.

Click here to find out typical behavioural based interview questions.

Reward

Make sure your desired behaviours are reflected in your bonus system and other reward systems. For instance if you say that you value integrity but you reward your people only based on their financial performance you are unlikely to see integrity embraced in the culture of your organisation.

When looking at your rewards system consider how you can reward the desired behaviours through offering autonomy, mastery and purpose. If you haven’t watched Dan Pink’s The Puzzle of Motivation TED talk you might like to watch it here.

Termination

Finally people will not take your culture seriously if you make exceptions. Even if someone is great at their job, if they don’t fit your culture you need to show them the door.

Step three – communicate important goals

While the focus of your internal communications is on beliefs and behaviours you still need to share your important business goals and engage your team in achieving this. So if your business plan is to increase your market share by 20% over the next 12 months make sure everyone in your team knows this, understands their role in achieving this and is informed of progress.

Remember there is a real difference between a business owner and a leader (and just because you are a business owner doesn’t mean you are a leader). Leaders inspire people to perform at their best and work together to achieve a common goal. Keep this in mind if you are struggling to ignite your team.

This may have been a line out of Lewis Carroll’s, Alice’s Adventure in Wonderland but it applies equally to business.

“Would you tell me, please, which way I ought to go from here” said Alice.
“That depends a good deal on where you want to get to”, said the Cat.
“I don’t much care where”, said Alice.
“Then it doesn’t matter which way you go”, said the Cat.

How many businesses follow Alice’s approach, wondering aimlessly without any clear direction?

Quite a few it seems, if the results of  our new online business benchmarking tool, My Catalyst, are anything to go by.

The free online tool asks business owners a series of questions to better understand where their businesses are at. It provides real time feedback in fundamental areas such as growth, innovation, exit and succession planning as well as financial performance.

The preliminary findings of My Catalyst indicate that nearly 90% of businesses with a growth rate of less than 5%, have no documented and communicated vision for their business. In contrast, over half of all businesses that do have a plan (even if in their head) have a growth rate of higher than 5%. It is clear that those businesses that have a clear documented vision for their business and an action plan as to how that vision will be implemented are more successful. In other words, underperforming businesses don’t plan.

To most people this fact might seem somewhat unremarkable, but it begs the question – why? It seems, according to My Catalyst, that business owners have mixed reasons for this:

• Nearly one quarter don’t have an action plan because they simply don’t know where to start.
• A further 22% don’t perceive value in planning, and
• A whopping 46% aren’t prepared to invest the time to develop a plan.
• Around 8% consider it to be too daunting.

Generally speaking, most businesses undertake some form of marketing (or other growth related activity), even if this is as basic as having a website, placing some advertisements and having some promotions. Some businesses do significantly more than this and invest tens, or even hundreds, of thousands of dollars.

Tactics versus strategy

These are tactics, not strategy.

Sun Tzu, in his book Art of War, detailed his strategy lesson number one – “tactics without strategy is the noise before defeat”.  This is not unlike Alice wandering aimlessly in Wonderland –doing something for the sake of it but not knowing what she wants or where she wants to go.

Conversely, as Sun Tzu said – “strategy without tactics is the slowest route to victory.”  Clearly you need both strategy and tactics to maximise your chance of success so why do nearly half of all Australian businesses not have a plan?

Furthermore, the fact that around one quarter of business owners don’t know where to start with their planning process is damning.

How to set a vision for your business?

A simple framework can be built around the basic premise of “Now, Where, How” – where is the business now, where does it want to be and then a detailed action plan of how it is going to get there.

Having a vision and a plan is about change – change from where you are now, to where you want to be. Just like the GPS in your car which takes you from A to B. It knows where you are now, you program in where you want to go and the GPS develops the plan to get your there. It’s exactly the same with a business – but you need to develop the plan.

More often than not, our inability to plan and create a vision is one of attitude.

In order to bring about successful change you need at least three basic ingredients. Firstly, you need to be sufficiently unhappy with the status quo. There needs to be a reason to change (the why). If you want to lose weight, you need to be sufficiently unhappy with your current weight in order to be motivated to lose weight. If there is not sufficient dissatisfaction with where the business is now, then change will be hard to achieve.

Secondly, just like when you focus the lens of a camera on a subject, you need to have clarity on where you want to take the business – your vision (the where).

Finally, a vision without a plan is just a daydream. You need to have a documented action plan of who has to do what by when, in order for the vision to be achieved (the how). And just as importantly, you need someone (preferably an outsider) to regularly hold you to account to ensure the actions are implemented.

It’s not rocket science, but allocating time to the “important, but not urgent” task of strategic planning is the key to ensuring, that unlike Alice in Wonderland, you travel down the road that takes you to where you want to go.