And yet, according to a recent survey, Tony Robinson’s idiotic Baldrick from the Blackadder series has something to teach the print community: the value of having a “cunning plan”.
“A recent survey of printers we carried out showed that just over 50% had no business plan at all,” says Neil Falconer, managing director of consultancy Print Futures. “And the majority of the plans that printers do have seem to be more of a budget or marketing plan, without any clear objectives or specific projects.”
Considering the high level of strategic planning required in print – with capital costs into the millions for many – these findings are worrying. Despite the industry’s drive for efficiency, it suggests that a fundamental tool in making a business more streamlined, more aware of its core strengths and more profitable is being ignored. Which raises the question: how much more could printers be achieving if they got a decent business plan together?
To answer that, you first have to ascertain why many printers have not drawn up such a plan. For Falconer, the reason is the daily grind of just keeping a print company afloat in tough trading conditions.
“A good plan takes some time and commitment to prepare and most companies are just focusing on the day-to-day fire-fight, so they don’t see the value unless they’re being asked to prepare one for the bank,” he says.
Others claim that print firms often actually do have a business plan, just not one in a format that’s recognisable as such to a finance institution or outside agency – they’re either locked in the brain of the business owner or are documents so sprawling and complicated that they’re equally impenetrable.
“There is a happy medium between the business plans of old that were like War and Peace and the concept of winging it,” says Kathy Woodward, chief executive of the BPIF. “My experience is that most company owners have a business plan of sorts, although the link between the plan – in whatever form – and measurable planned actions and outcomes is not always as close as it might be.”
But whether they have the wrong plan or no plan at all, some printers might argue that they have got on fine thus far with the current state of affairs, so why should they change? To which the experts would respond by emphasising the “thus far”.
“Printers usually come to us when they start to haemorrhage cash and understand something is not right, but are not sure what it is,” says Falconer. “By examining and auditing the business we can uncover all the weaknesses and then start to put an improvement plan together that will rectify things. The business owner then realises that by having a documented plan with clear roles and responsibilities and specific improvement projects, things get done.
“When they set KPIs and targets, things can be measured and continuously improved. Without them there is no buy-in and you might get quick wins but nothing is sustained over the long term.”
Act early
Gal Davies, chief executive of business plan service PlanWriter, agrees that often the first time a printer realises they need a business plan, extensive damage has already been done.
“Normally we get requests from printers who are in a crisis and need a continuance plan,” she says.
The more cynical printer might ask how, exactly, a business plan would prevent these situations from occuring. Tracy Ewen, managing director of IGF Invoice Finance, says the key benefit is self-assessment.
“A business plan gives the business a road map, which it can use to plot its course, step by step, through future growth,” she explains. “The main benefit of a plan is that the directors actually have to pause their day-to-day activities, put their regular concerns on hold and think about the future. To reinforce this, a good plan will contain ‘checkpoints’ that ensure a focus on the future. Engaging external stakeholders – such as creditors and investors – will also be easier if you can show that you are being strategic and striving towards greater success.”
Falconer adds that a business plan prompts debate about how a business can react to changing conditions, while enabling greater co-ordination and clarity of goals across the business.
So the ‘why’ is pretty clear cut. But what about the how? Here’s our essential guide to the perfect business plan.
THE PERFECT BUSINESS PLAN
Take stock of where you are now
A company needs a clear understanding of where the business currently stands in order to formulate a plan. This can be in terms of both the current financial state of the business and also where the business stands in the local or national markets (are you top dog or a bit-part player?) and which sectors and products are most or least profitable. This may require extensive research.
Work out why you are unique
PlanWriter’s Davies says every business plan should have at its heart a knowledge of what the business does best. “It’s normally very hard for a printer to find a USP, but it can be price, quality, location or packages,” she says. Look at the competition and question customers: what is it that makes people come to your door rather than knock on someone else’s? It is from here you can begin to look to the future.
Decide where you want to achieve in the short and long terms
A business plan is a chance to chart a route into the future and set out clearly goals for the business and the process of attaining them. Following the steps above, you should have documented where the business currently stands and what the unique selling point of the business is, so now you have the insight to plan where, under ideal conditions, the business could be in 12 months, 24 months, five years and beyond.
Work out if the goals are achievable
You then have to put some meat on the bones of those targets. “Run the financials in enough detail to stress test the plan, considering all the what-ifs,” says Falconer. “And remember your cashflow – can you afford to do what you want to do?”
Davies adds that you should leave no stone unturned when assessing the costs you will incur. “You need to outline staff requirements, marketing budgets, what targets you need to break even, what taxes you should expect, how to manage your cashflow and what savings you will need at what point for what growth,” she says.
IGF Invoice Finance’s Ewen identifies a range of other factors to think about, too: “The terms of trade in the print industry are long and can starve the business of working capital,” she explains. “So planning for funding gaps is essential. Customer concentration is also common within the industry. A business plan will make it clear if you are over-reliant on a single big customer and highlight the dangers of losing that customer.”
Essentially, this is the part of the plan where the dream has to become reality and waking up can be a distressing experience.
Decide how you will monitor progress
It is all very well setting out ambitious targets, but your business plan also has to detail how you will monitor progress. Print Future’s Falconer recommends setting key performance indicators (KPIs) through which you can measure how successfully you are hitting your targets. He adds that the whole company has to agree to the vision of what success will look like.
Ensure the business plan is constantly updated
“It’s critical that it’s a working document that’s regular reviewed by the whole team,” says Falconer. “The mantra ‘Plan, Do, Check, Act’ must be followed to ensure that things are on track.”
“A business plan should be seen as a living, breathing document,” agrees Ewen. “The world will change around you and you need to move with it. There is always an element of star-gazing and over enthusiasm, particularly in the sales arena – and this shouldn’t necessarily be snuffed out – but always remember that old adage: ‘turnover is vanity, profit is sanity’.”
This doesn’t mean you have to update the plan every week, says Davies. “If you’re well prepared, you should only need to update it once a year,” she explains. “But for companies that come to us for continuity planning, reviews every three or four months are required to ensure recovery is on track.”
Make it an open document
There is no point having a business plan if no one knows about it. Communicating the plan to the whole company is essential. “Be clear about your objectives – organisation and motivation are critical for all involved,” says Falconer. “Consider all the impacts in administration, operational, financial and sales sides of the business.”
