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Business Control & Strategic Direction

As a business owner, where do you see your company in 5 years? How about 10 years? One thing’s for sure, you want your business to have developed, grown, and moved further towards reaching your long-term goals.

Establishing business control and strategic direction is important to protect, regulate, and help you make sure your business stays on track and achieves its goals. Business control refers to the processes needed to direct and monitor things like employees, procedures, and assets.

Strategic direction is a plan that’s created to help the business stay on course to realise its vision, track progress and measure progress towards meeting your business targets.

isme|&|co has been set up to provide access to all the information owners and managers of small businesses need . Including information on everything you need to know about business control and strategic direction. From business budgeting and planning and developing a formal business plan document to measuring and reporting, leadership, organisation structure, and putting the correct policies in place.

Creating A Business Plan and Strategy

One of the most important ways to reach your goals and grow as a business is to create an effective business strategy.

A business strategy is an outline of your business goals and objectives. By having a clear business strategy, you’ll be well placed to plan, evaluate the strengths and weaknesses of your business, identify opportunities to gain an advantage over your competitors. Simply put you’ll be more efficient.

You might be wondering how to develop a business strategy.

Your business strategy is unique and will look different to every other business, however there are some fundamental elements to consider in every business strategy regardless of industry or sector:

Business objectives and visions

A business strategy is put in place to help your business reach its goals. It includes your vision and objectives these illustrate what you’re working towards.

Core values

As your business grows, you need to make sure it aligns with your business core values every step of the way.

SWOT Analysis

Before you can make a change and grow as a business, you need to assess your strengths, weaknesses, opportunities, and threats. Understanding each of these will inform your decision making when it comes to your business strategy.

Resource plan

How much money do you need to complete the plan, who is in charge of allocating the resources, and do you have a safety net in case you overspend?

Measurement

You need to be able to measure your progress towards achieving your goals. This will make sure your strategy stays on track and doesn’t go over budget.

Your business strategy sets out what you are looking to achieve and how you will set about doing this in broad terms.

A Formal Business Plan is important because it provides details of how you propose to deliver your Business Strategy. When creating a business plan, you should be explaining where your business is now and what the steps are to where you want it to be in the future.

If you’re wondering how to create a business plan, here are some of the key elements you should consider:

A summary and business description

What does your business do and what is its the purpose?

Details of your market strategies

How are you currently reaching existing and potential clients, and how do you want to be reaching them in the future?

Competitor analysis

What are your competitors up to? Are they exploiting any markets you currently aren’t serving?

A design and development plan

What do your products or services look like now and how can they be improved?

Operations and management plan

What can you do on a day to day basis to become more efficient?

Financial forecasts

Typically 3 year projections focused on income and expenditure and how these translate into the Business Funding requirements are expected and form a key part of your business plan.

Resources plan

Setting out details of the financial funding, human resources, equipment, and other resources required to deliver the financial forecasts.

Risk analysis

Identifying the principal risks to delivering the financial forecasts. These form the basis of your ongoing risk register.

Key assumptions

A list of the key assumptions made in preparing the business plan, in order that these can be clearly understood by the reader.

Creating a business plan will help frame your business and allow you to think about where you want your business to be in the future. Developing your Business Plan creates a sound platform from which to launch yourself into the next stage of growth for your business. Allowing you to learn from whether the assumptions made were correct, what worked and what didn’t work along the way.

What is a Business Structure?

Every business needs to have appropriate structures in place to make sure the business runs as effectively and efficiently as possible. There is often mention of two types of structure. An overarching business structure and an organisational structure.

What is a business structure?

When you are in the process of setting up a business, you will need to register it as one of the following structures:

● Sole trader (self-employed)
● Limited liability company (your business is legally separate from you so your personal liability is liimited)
● Partnership (you and your partner(s) share responsibility)
● Limited liability partnership (the liability of certain partners can be limited)

Having a business structure is a legal requirement because it changes where profits go, who is liable for losses, and who is subject to tax.

What is a business organisational structure? Think of an organisational structure as a family tree for your business.

An organisational structure sets out who does what within your business including leadership responsibilities. It provides information on everyone’s responsibilities and assignments. Your organisational structure isn’t set in stone and can be changed at any time to suit the business. The more flexible it is the better because you want your structure to adapt as your business evolves and grows!

There are many different types of organisational structure and you need to work out which structure suits your business best.

Here are some examples of types of organisational structures:

Hierarchical

This is the most common type of organisational structure and it’s set out from the top down. All the way from you, the business owner or leader, to apprentices and interns, and everyone in between. It includes part-time and full-time staff, top level managers, and directors.

Functional

Similar to the hierarchical structure, employees are placed from highest responsibility to lowest, but employees are also positioned based on their skills and function with the company.

Horizontal

Many small businesses begin with a horizontal structure because there are fewer levels between the top employees and lower tier employees. This organisational structure is often described as a flat structure. In contrast to the typical pyramid shape of a hierarchical structure.

Divisional

More relevant to larger companies, a divisional structure gives more responsibility to individual divisions to make decisions and manage their own resources. The sub structure within each division is often hierarchical.

You might be thinking, how does an organisational structure help a business? Organisational structure will define levels of authority and responsibility, improve communication, and can increase productivity and performance. Each organisational structure has its respective advantages and disadvantages, so you need to think carefully about which one complements your business.

How to successfully lead a Business

Do you want your business to have impeccable control and direction? If so you need to understand the importance of successful leadership.
You started your business for a reason, you put your heart and soul into it for a reason, so it is important to do everything in your power to make it a success.

With the right leadership your employees will share your ambition and enthusiasm for the business as much as you do. Effective Leadership will motivate employees. This drives business performance, be that increases in sales and productivity, efficiency, as well as sustaining a positive workplace culture.

So, how can you be a good leader? Here are some commonly suggested top tips:

Lead by example

If you want your employees to respect your vision and listen to you, it’s important that you lead by example. A good leader isn’t afraid to get involved and be a part of the process. If you show your employees how motivated you are to succeed, they’ll likely follow suit and align themselves with your values. It’s important for business leaders to model the behaviours they want to see in their teams.

Listen and communicate

As a business owner, you need to be able to listen and communicate effectively, otherwise people won’t be willing to listen or communicate with you. By keeping your employees in the loop with business plans and updates, they will feel more valued and are likely to work harder. The simple act of asking your employees there opinion and listening to what they say goes a long way.

Don't be afraid to change it up

A great leader is someone who can learn from their mistakes, can you learn from yours? If something isn’t working for you, or your employees, or your business, try a new approach. Being good at problem solving and changing your way of working is a sign you care about the business and want it to succeed.

Find out more about how to successfully lead a business here.

How to measure and report accurately

What’s the best way to see how well your business is doing and how far you still need to go before achieving your goals? Reporting and analysing your latest results.

Measurement and reporting of business growth is an essential part of record-keeping. Accurately measuring and recording progress helps to keep track of your business.

There are many benefits of reporting progress, such as:
● Reports can be a great way of measuring both successful and unsuccessful ventures
● They can be used as evidence of return on investment for stakeholders, such as investors
● Reports can be used to demonstrate to potential clients how successful your business could be for them
● Reports represent an opportunity for learning. You can use reports to analyse what isn’t working and make changes based on your analysis.
● Reports enables continuous analysis and comparison by month and by year to monitor growth.

How to create policies for your Business

To keep control and order within your business, policies are a valuable resource. Policies help set boundaries and expectations within a business. They set a level of accountability for every employee. Making sure the way employees conduct themselves aligns with the way you want your business operations to be conducted.

You should consider how to create policies that are effective and help add value to your business, rather than regard them as ‘tick box’ exercises.

Some policies are commonplace in every business and are often a legal requirement in some workplaces. Whenever you’re looking to implement or update policies for your business, look for good reference guidance on how to create them. The following is a useful checklist of characteristics to consider when defining business policies:

● Is it simple and easy for everyone to understand?
● Does your policy clearly set out what is expected of each employee and what will happen if the policy is not followed?
● Have you created a fair policy that doesn’t restrict the freedom or creativity of your employees? You want to create a positive, open workplace where you employees are happy to work.
● Does the policy align with your business’ core values and works towards achieving your vision?

Here are a few examples of policies that may benefit your business:

● Code of conduct
● Disciplinary and Grievance policy
● Equal opportunities policies
● Health and safety in the workplace
● Leave of absence policy
● Data Security and Control
● Environment, Social and Governance (ESG)
● Anti-Bribery

It’s good to understand which policies are relevant to your business and you must make sure you have the correct policies in place. This will enable you to have control and direction of your business.

Governance in business

It’s a fact, every business needs governance regardless of how large or small your company is!

Governance is the collection of processes and mechanisms that are in place to help your business run smoothly. If your governance is effective, it will be able to resolve conflicts of interest, control risk, manage accountability and integrity among employees, and help to achieve the objectives set out in your business strategy.

If you’re looking for potential investors and want to grow your business, you need to take into consideration Environmental, Social and Governance (ESG) issues and standards.

ESG represents your business’ care and awareness of social and environmental factors. To meet the environmental criteria, your business must be making conscious decisions to benefit the environment or limit the negative impact of your business operations on it. The social criteria is how you manage your relationships with all the people who come in to connection with your business – your employees, suppliers, clients, and investors.

As a business owner, it is important to have strong and demonstrable business control and direction. It shows your employees, investors, clients, and competitors how seriously you take your business. It is an important part of building a successful and sustainable business.

We understand this is a subject that can sometimes get overlooked, particularly when you are busy juggling so many other balls. Taking time to consider the best way to achieve appropriate control and direction will be time well spent.

isme|&|co is here to help you find the information and advice you need quickly. Whether it’s guidance on how to develop a business strategy or finding out more about the types of organisational structure.

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