Establishing business objectives and plans
MLA & AWI May 7, 2024
This topic focuses on setting business objectives, because success is the result of meeting these objectives. The business objectives must consider the personal, social, environmental, and financial components of the business and will be unique to each business.
Formal business planning can be a challenging proposition for many sheep producers. To assist, a ‘starter’ kit is available, which includes: a SWOT analysis template, a simple process for setting goals and objectives, and a business planning template.
Many sheep producers find that engaging professional or outside assistance is the best way to start developing formal business plans and provides a good return on the investment.
There are four key steps in creating a business plan:
- Analyse the current situation: Identify how the business is currently operating and consider the key financial, social and environmental issues and drivers.
- Set the goals: Building from the current situation, decide on the business direction and what objectives need to be set. Start to identify any trade-offs and clarify priorities. When setting objectives ensure they are explicit, measurable and time specific as possible.
- Implement the plan: Implementation must be feasible with the skills and resources that are either currently available or that can be realistically obtained. Consider the following questions. What are the stepping stones towards the goal? What are the tasks? Who is responsible for each, and over what timeframe?
- Monitor progress. Identify any critical milestones. How will you know if things go wrong? Is progress as expected? What actions will be taken if things do not progress according to the plan?
Documenting business objectives
The extent to which objectives and plans are documented is a personal and business choice. However, best practice is to write down these plans and objectives because there are some significant advantages:
- Writing down plans and objectives gives the process more rigour, forces a deeper level of thinking and clarity and can impose a discipline that might otherwise be lacking.
- While the business owner(s) may have the final say, inputs from family members, staff, suppliers and advisors can be sought more easily and incorporated if the plans are written and, therefore, easily shared. Documented objectives are evidence of agreement at a point in time.
- Accountability, including tracking progress towards the objectives, is more straightforward when the objectives have been recorded.
- Objectives need to address the short term (this year), medium term (next 3 years) and long term (next 10 years). This is difficult to clarify without a written plan.
- Determining and balancing priorities, including conflicting objectives, is easier when the objectives are documented.
- A more formal process is helpful if objectives need to be set and decisions made in an area where there is a lack of experience.
Planning doesn’t have to be all hard work. A discussion starting guide, for imagining the future, outlines a simple process to let everyone with a stake in the business get involved in the planning process. A ‘goals grid’ s a goal setting technique to encourage the whole family to consider what they would like to achieve, preserve and avoid.