Business Planning and Strategy
E&S Solutions has over twenty-five years of experience in business planning and digital strategies.
Spanning 30-year careers, the leadership at E&S Solutions have depended on business planning and digital strategies for making investments and execution. From entering new product categories such as ink jet in the mid-1990s and eventually building a $100MM+ business. Developing and executing a plan for recovery of cores and adding $125MM in sales over a two-year period. Building a $35MM+ cell-phone repair business spanning three countries around the globe. Working with a major offshore office products manufacturer to take on the industry giants and build an office supplies distribution business from scratch. Business planning and digital strategies were at the foundation of every venture.
The Importance of a Business Plan
A business plan is essential for any business. Goals need to be set both for revenue and expenses and these goals must be realistic with a strong relationship to expected customer demand as well as historical sales. Although it’s difficult to forecast, and the further out into the future the less accurate it will be, the effort must be made.
Nobody can forecast with complete accuracy – even in the short term. The important part of forecasting for the purposes of establishing a business plan is to set goals while recognizing limitations in the forecasting process. A plan should cover a 4-year forward-looking period with the foundation being 3-4 years of historical financials with the objective of keeping the plan realistic.
Depending on the products and the sales channels, it is quite difficult to build an accurate outlook based on a sales forecast. For example, a small business selling direct to consumers cannot possibly forecast by individual customer. A small business offering a catalog of thousands of products cannot possibly forecast by individual product. Compromises in terms of the details have to be made so it becomes acceptable to forecast by product category rather than individual products and to forecast by sales channel rather than individual customers.
The Purpose of a Plan
The business plan serves two purposes. Firstly, it creates a budget that future performance can be measured against and secondly, it forces the planner to think about the strategy required to execute the plan. Anybody can build a plan that projects a glorious future and early retirement, however, it probably won’t be possible to execute such a plan.
Unless the developer of the plan is willing to invest time to think carefully and honestly about the strategy required to execute the plan, then the chances of successfully executing it will be significantly reduced.
Small and Medium Business Enterprises
Just because a business may be small in terms of sales, it doesn’t mean it’s less important to build a plan and then operate to that plan. A “back-of-the-napkin” approach doesn’t qualify as a business plan and usually means the business is operated “flying by the seat of its pants” and is ill-prepared for the inevitable road bumps that occur. Operating a business is hard work and every business faces its challenges. Thinking about, and creating a viable plan, forces leadership to think about the issues they face and how to overcome them. By monitoring progress against the plan, then it becomes possible to fine-tune and make course adjustments as necessary, thereby increasing the overall chances of executing the plan.