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With this explanation with regards to successful turnaround plan outlines every aspect of the transformation the business.
Monday, 13 February 2006
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200+f11f15 12:00:00 AN
Plotting the optimal route to recovery
A successful turnaround plan outlines every aspect of the transformation the
business needs to undergo
vincent Narino
WHEN Columbus set out on his journey from Spain to find a new route to
!ndia, he conveyed to his stakeholders what he wanted to accomplish and
how.
Unfortunately, when he set sail he only had a vague idea where he was going,
and when he reached America, he had no idea where he was, and when he
returned home, he had no idea where he had been.
He then went and did it all over again, even though his stakeholders were a
little sceptical.
Nany small business owners do not plan and drift aimlessly this way, without
really knowing where they are going or how they want to get there. !n a
recovery situation, owners need a turnaround plan to guide and direct their
business.
A turnaround plan can be compared to a road map. !t shows you where you
are, where you want to be, and the best route to get there.
Between the two extremes (where you are and where you want to be) are the
stops, refuelling, re-energising and the unseen road ahead with its twists,
curves and dips, all of which must be manoeuvred. You won't know what is
over the next hill until you reach the top and then the valley may be misted
up.
A turnaround plan will verbalise your thoughts on how to reach your goal and
what resources you will need. !t is a document that specifies the components
of a strategy with regard to the business' mission, external and internal
environments and problems identified.
!t helps determine the viability of the business in a designated market and
provides guidance to the entrepreneur in organising his or her planning
activities.
The purpose of the plan can be seen as twofold. To start with, it can help
secure finance and, secondly, it explains and clarifies to stakeholders what
you're trying to do and why you're trying to do it, and by when your
turnaround will be achieved.
Apart from having to be clear and concise, the development of the strategy
should involve most if not all the key stakeholders and needs to be adopted
by all key players. Their buy-in is crucial and fundamental if the turnaround is
to succeed.
A successful turnaround plan should include an executive summary - the
single most important part of the plan. !t provides a concise summary of the
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2/13/2006http://www.businessday.co.za/Articles/TarkArticle.aspx?ID=1309026
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plan and it will probably do more to influence whether or not the plan is
reviewed in its entirety than anything else.
Obviously, the executive summary can only be written after the business plan
itself has been completed.
The plan should also include a brief description of the business' new vision or
mission, and a brief history of the business. This section should briefly point
out the past successes and financial achievements of the business, and
possibly why it is in a downward trend.
The company's aims and objectives in both the short and medium-term
should also be stated, along with a summary of financial projections:
forecasts, sales, profits and cash flow.
This section should state how much money is needed to fund the turnaround
and how much profit can the business expect to make over the next 18 - 2+
months.
!t should outline how much extra funding is needed to finance the
turnaround, and how future financing will be found.
What will the new financial policies of the business be with regards to
accounts payable and receivable?
Key strategic questions to ask are: what business are we in, and who are our
customers?
These are answered by analysing the external environment, and assessing the
external problems and available opportunities.
Can improvement in technology and systems change the way you work with
your customers, suppliers and employees. Does the business need the latest
technology?
Will changes in the economy affect your business?
Will interest and exchange rates or disposable income levels affect your
business?
Do you understand the market you are operating in, the strength of the
competition, the threat posed by new entrants or substitute products?
!s the business in a mature, developing, growing, stagnant or declining
market? Can the business create a `competitive advantage'?
What political decisions might affect your business, locally and internationally?
How will current laws affect your business, for example labour and
employment laws, health and safety legislation, environmental and
competition laws?
!s your business affected by European Union and US legislation?
How will changes in the environment affect your business? Will `green' issues
influence the way you do business?
What social issues will affect your business - for example, crime,
homelessness, unemployment, one-parent families, etc?
Services
Page 2 of 4 Business Day - News Worth Knowing
2/13/2006http://www.businessday.co.za/Articles/TarkArticle.aspx?ID=1309026
Looking at these external factors, which of them are likely to affect the
business, and how can the business avoid the dangers they pose and at the
same time take advantage of the opportunities they offer?
How do you foresee and visualise the structure of the business in the next 18-
2+ months, and could the business capitalise on any of the emerging trends?
No business will ever exist in a vacuum. Public relations involves creating a
confident image of the business. How is the business seen from the outside,
and what is the attitude of the stakeholders towards the business?
Good public relations will establish goodwill among stakeholders and promote
the business.
!n practice, marketing plans vary in detail from business to business, but
there are common elements that will make-up a marketing plan, which will
help recognise adjustments in the environment and establish ways of reacting
to them.
!t will provide the owner with a clearer insight into consumers and
competitors, and deliver a more decipherable idea of the business's objectives
and how they can be achieved. !t will help obtain resources for the
turnaround plan and can be seen as an information tool to keep employees
informed on what is expected of them.
The turnaround plan must also include an operational plan. The business
owner must ensure that the transformation of goods and services processes
runs smoothly and effectively. Operational planning is the effective and
efficient handling of money, human resources, materials and machinery.
!f you have no thorough turnaround plan, then chances are you won't get
there - and if you do, how will you know whether you have arrived?
lNarino is director of Business Renewal 8 Survival Strategies.
Ads by Google
Stressed Out?
Massage & Floatation at Cloud 9 De-stress or
just spoil yourself
www.floatation.co.za
Advertise on this site
Page 3 of 4 Business Day - News Worth Knowing
2/13/2006http://www.businessday.co.za/Articles/TarkArticle.aspx?ID=1309026
BDFN Publishers (Pty) Ltd disclaims all liability for any loss, damage, injury or expense however caused,
arising from the use of or reliance upon, in any manner, the information provided through this service
and does not warrant the truth, accuracy or completeness of the information provided.
Copyright © 2005 BDFN Publishers (Pty) Ltd. All Rights Reserved
Site Feedback { Privacy Policy
Page 4 of 4 Business Day - News Worth Knowing
2/13/2006http://www.businessday.co.za/Articles/TarkArticle.aspx?ID=1309026
doc_633312200.pdf
With this explanation with regards to successful turnaround plan outlines every aspect of the transformation the business.
Monday, 13 February 2006
Search for: site archives Advanced Search
Home
News
- Front Page
- Economy 8 Business
- National
- World
- Companies
- Narkets
- Nining
- Sport
- Personal Finance
Opinion & Analysis
- Comment 8 Analysis
- The Bottom Line
Classic Business Day
- Transcripts
- SNE Scene
Special Reports
Arts & Leisure
Specialist Sections
- Real Business
- Notor News
- Homefront
- Property
- Technology @ Work
- Business Travel
- Auctions
Site Tools
- Search
- Contact Us
- Subscribe
- Newsletters
- Advertise
- Surveys
- Online Courses
200+f11f15 12:00:00 AN
Plotting the optimal route to recovery
A successful turnaround plan outlines every aspect of the transformation the
business needs to undergo
vincent Narino
WHEN Columbus set out on his journey from Spain to find a new route to
!ndia, he conveyed to his stakeholders what he wanted to accomplish and
how.
Unfortunately, when he set sail he only had a vague idea where he was going,
and when he reached America, he had no idea where he was, and when he
returned home, he had no idea where he had been.
He then went and did it all over again, even though his stakeholders were a
little sceptical.
Nany small business owners do not plan and drift aimlessly this way, without
really knowing where they are going or how they want to get there. !n a
recovery situation, owners need a turnaround plan to guide and direct their
business.
A turnaround plan can be compared to a road map. !t shows you where you
are, where you want to be, and the best route to get there.
Between the two extremes (where you are and where you want to be) are the
stops, refuelling, re-energising and the unseen road ahead with its twists,
curves and dips, all of which must be manoeuvred. You won't know what is
over the next hill until you reach the top and then the valley may be misted
up.
A turnaround plan will verbalise your thoughts on how to reach your goal and
what resources you will need. !t is a document that specifies the components
of a strategy with regard to the business' mission, external and internal
environments and problems identified.
!t helps determine the viability of the business in a designated market and
provides guidance to the entrepreneur in organising his or her planning
activities.
The purpose of the plan can be seen as twofold. To start with, it can help
secure finance and, secondly, it explains and clarifies to stakeholders what
you're trying to do and why you're trying to do it, and by when your
turnaround will be achieved.
Apart from having to be clear and concise, the development of the strategy
should involve most if not all the key stakeholders and needs to be adopted
by all key players. Their buy-in is crucial and fundamental if the turnaround is
to succeed.
A successful turnaround plan should include an executive summary - the
single most important part of the plan. !t provides a concise summary of the
Article Tools
E-Nail This
Article
Printer
Format
Sponsored links
Treasury
services
Trading
Unit Trusts
Residential
Property
Commerical
Property
Business
Directory
Page 1 of 4 Business Day - News Worth Knowing
2/13/2006http://www.businessday.co.za/Articles/TarkArticle.aspx?ID=1309026
Services
plan and it will probably do more to influence whether or not the plan is
reviewed in its entirety than anything else.
Obviously, the executive summary can only be written after the business plan
itself has been completed.
The plan should also include a brief description of the business' new vision or
mission, and a brief history of the business. This section should briefly point
out the past successes and financial achievements of the business, and
possibly why it is in a downward trend.
The company's aims and objectives in both the short and medium-term
should also be stated, along with a summary of financial projections:
forecasts, sales, profits and cash flow.
This section should state how much money is needed to fund the turnaround
and how much profit can the business expect to make over the next 18 - 2+
months.
!t should outline how much extra funding is needed to finance the
turnaround, and how future financing will be found.
What will the new financial policies of the business be with regards to
accounts payable and receivable?
Key strategic questions to ask are: what business are we in, and who are our
customers?
These are answered by analysing the external environment, and assessing the
external problems and available opportunities.
Can improvement in technology and systems change the way you work with
your customers, suppliers and employees. Does the business need the latest
technology?
Will changes in the economy affect your business?
Will interest and exchange rates or disposable income levels affect your
business?
Do you understand the market you are operating in, the strength of the
competition, the threat posed by new entrants or substitute products?
!s the business in a mature, developing, growing, stagnant or declining
market? Can the business create a `competitive advantage'?
What political decisions might affect your business, locally and internationally?
How will current laws affect your business, for example labour and
employment laws, health and safety legislation, environmental and
competition laws?
!s your business affected by European Union and US legislation?
How will changes in the environment affect your business? Will `green' issues
influence the way you do business?
What social issues will affect your business - for example, crime,
homelessness, unemployment, one-parent families, etc?
Services
Page 2 of 4 Business Day - News Worth Knowing
2/13/2006http://www.businessday.co.za/Articles/TarkArticle.aspx?ID=1309026
Looking at these external factors, which of them are likely to affect the
business, and how can the business avoid the dangers they pose and at the
same time take advantage of the opportunities they offer?
How do you foresee and visualise the structure of the business in the next 18-
2+ months, and could the business capitalise on any of the emerging trends?
No business will ever exist in a vacuum. Public relations involves creating a
confident image of the business. How is the business seen from the outside,
and what is the attitude of the stakeholders towards the business?
Good public relations will establish goodwill among stakeholders and promote
the business.
!n practice, marketing plans vary in detail from business to business, but
there are common elements that will make-up a marketing plan, which will
help recognise adjustments in the environment and establish ways of reacting
to them.
!t will provide the owner with a clearer insight into consumers and
competitors, and deliver a more decipherable idea of the business's objectives
and how they can be achieved. !t will help obtain resources for the
turnaround plan and can be seen as an information tool to keep employees
informed on what is expected of them.
The turnaround plan must also include an operational plan. The business
owner must ensure that the transformation of goods and services processes
runs smoothly and effectively. Operational planning is the effective and
efficient handling of money, human resources, materials and machinery.
!f you have no thorough turnaround plan, then chances are you won't get
there - and if you do, how will you know whether you have arrived?
lNarino is director of Business Renewal 8 Survival Strategies.
Ads by Google
Stressed Out?
Massage & Floatation at Cloud 9 De-stress or
just spoil yourself
www.floatation.co.za
Advertise on this site
Page 3 of 4 Business Day - News Worth Knowing
2/13/2006http://www.businessday.co.za/Articles/TarkArticle.aspx?ID=1309026
BDFN Publishers (Pty) Ltd disclaims all liability for any loss, damage, injury or expense however caused,
arising from the use of or reliance upon, in any manner, the information provided through this service
and does not warrant the truth, accuracy or completeness of the information provided.
Copyright © 2005 BDFN Publishers (Pty) Ltd. All Rights Reserved
Site Feedback { Privacy Policy
Page 4 of 4 Business Day - News Worth Knowing
2/13/2006http://www.businessday.co.za/Articles/TarkArticle.aspx?ID=1309026
doc_633312200.pdf