This is the first of a three part series of articles designed to help you develop and implement a budget and business plan for your business or organization.
STEP 1 to a successful FY2016
By Charlotte W. Dupré
Copyright 2015 S&V
Timing is Important
Those of us on a Business Fiscal Year that runs congruently with a calendar year (January – December) should have a solid budget in place for 2016 by the end of November 2015*, if not sooner. That means you need a timeline to develop your budget and you need to follow that timeline.
If you are not planning on remaining “status quo” for FY2016, good for you! You will, however, need a business plan to be more cost-effective (lower the expenses) and at the same time show growth (increase revenue). A good business plan should assure that you have a realistic budget. Why? As an example, If your budget shows a 5% increase in revenue, yet you do not have a plan on how you can achieve this; or/and if your budget shows a 5% reduction in expenses without having any idea of what areas you might reduce, you could find yourself in trouble mid-year 2016, if not before. You must have a realistic “how to” plan to accompany your budget.
Here are several key elements to ponder:
• Assessment of where you are at present – at 7 months into your 2015 FY for those on a calendar FY – What have you accomplished? What were unforeseen barriers? What successes have you had? What disappointments have you incurred? What are your MTD and projected YTD financials compared to budget?
• Assessment of where you have been – what are the trends over the past three years? Are you headed in the right direction? Where have you declined? What improvements have been made?
• Targets of where you want to be – What is your 2016 Business Plan and your vision “Beyond”? Do your capital and operational budgets support your annual plan and your vision of the next three years (your strategic plan)?
*For those with Fiscal Years that run on a different schedule, think and plan in advance; especially if the above steps have not been considered or followed.
Tools to Create the Assessments and Define the Targets
What are the initial tools you need to “think” a plan before you “write” a plan?”
The first tool needs to be PEOPLE
• Input from Trusted KEY Players (TKPs) ** of your organization -- (not “yes people” but honest "tell it like it is" people). This could include Board of Trustee members, advisory boards, leadership team, staff employees, physicians to hospitals, important vendors for retail companies, clientele to smaller businesses, and/or community leaders.
• A facilitator who can objectively hear, interpret, diffuse and lead discussions to set the tone for the planning process, as well as assure success of the planning process.
• Put your team together – those who will actually provide input to the process as “experts” in their respective areas of responsibility. Examples of the area whereby experts could be important to your process include:
• Financials – You must have the last three years’ of key indicators trended – pricing issues; regulatory issues, etc.
• Operations – Who knows the most regarding your organizations operations – flow, processes, products, champions, and regulatory changes?
• Quality – Who has a handle on “performance for improvement”, customer satisfaction, OSHA, risk management, etc.? What are the major issues facing your organization?
• Marketing – What are growth strategies and how will they become known to your customers?
• Human Resources – What resources are needed? What is the culture? What is the climate within?
• Information Technology– If new technology in information systems is important to your success, ensure your Information Technology “expert” is part of the strategic planning process.
• Facilitator - Seek out help from someone with hands-on experience, someone who is knowledgeable regarding the planning process and who has lived in your leadership shoes. This person will enlist the aid of Trusted Key Players and your expert team to perform the SWOT analysis.
The second tool is COMMITMENT:
• The businesses’ leader needs to work closely with the TKPs and defined “experts,” to assure everyone invited is committed in attending a one-to-two- day planning session that will kick off “thinking process” of your company’s critical planning process.
• Those in attendance need to have the honest desire to implement change; then embrace change
** TKPs is an S&V “coined” acronym.
Final phase of Step 1
Now, invite your other TKPs you have identified, in addition to your “Experts,” and you should be ready to perform the SWOT analysis with the guidance of your qualified facilitator. This collaboration and consensus of the SWOT should assure everyone is on the same page in defining where you are at present. When completed, you will have necessary background information in order to move on to Step 2.
Charlotte W. Dupré
Ms. Dupré is the President & CEO of Strategies & Ventures, a business and health care consulting firm. She has over thirty years in leading strategic planning processes for hospitals (ranging from 52-beds to a 464-bed tertiary facility; inclusive of rural, urban and metropolitan areas). She has also developed business plans for affiliated for-profit businesses including wellness centers, diet centers, physician clinics, home medical equipment company, retail pharmacy, home health and infusion. Check out her website www.strategiesandventures.com for testimonies affirming her skills to lead the strategic and business planning processes.
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~ Charlotte