Forward planning
Everyone thinks of checking their accounting results prior to their year-end to see if there is anything they should do from a tax efficient point of view. However, fewer people start the year with planning, and from a business point of view this is more important; the old adage that may roll out is ‘failing to plan is the same as planning to fail’. I think this is too simplistic and I prefer to use a different analogy.
You wouldn’t set off on a car journey unless you had a destination in mind. Having set a destination, you will then plan your journey route potentially based upon the sort of roads you wish to travel on, or more commonly today, set the satnav. However, in both instances, if there is a problem on the route you may well change the route and maybe detour, head for a stopover or even change the destination.
Business is no different, you need a destination and a route to get there, and equally the final destination (which will not always be exact) may have staging points along the way. A business plan does not have to be a formal document and include forecasts and cash flows, but it must account for your plans.
Ultimately, we will all die, so we have to plan an exit strategy. Exit is obviously the last step of any business plan and might be sale, closing down or passing on to others, but all need planning. With exit in mind you can then plan your route.
Planning does not need to be formal, but it does need to be done.
Tags: accounting, Business, Business Matters, Jonathan Russell, planning, UK200