Business Planning & Strategy – for an Interim Management Practice
Introduction from WFL
Many looking at Interim Management and at this section of the Working Free website are likely to know all about Business Planning and Strategy from whatever they have been doing before. Consequently, many will take the view that going through this process has little or no point in their own business context.
Not so! Our contention is the opposite of this – it is vital. In fact, it is important to over-do it. You should treat yourself as your own client; go into everything in close detail. When you’ve done it, start again – this time at the end – with your projected profit (your income) – and then trace all the figures back to the start – and then work out what you need to do – almost on a daily basis – to get Back onto Plan in order to generate the sales.
Then read the Technical Topic – “It’s good to talk! The Supporters Guide”. Do you have anyone who can take you through this process? Being an Interim Manager is often a lonely business. Managing professional isolation is difficult. Being the sole critic of your Plan is dangerous. Having someone who can objectively and I partially do this is important.
Your business strategy is reflected in your business plan. If you can’t make this fit, you should look to see if you can modify your strategy. This defines what you need to do to achieve your goals. It helps you think through your options, identifying the best opportunities and how to make the most of them. Your Business Pan is prepared by you for you. You might want to use it for third parties – banks, investors and other key contacts, but as its primary purpose is to support you and your business, it will require material changes to adapt to a different audience.
You should constantly refer to your Plan – and, formally, review it at least once a month. Then you should recalculate your figures and, maybe, change your marketing and Sales plans – but only change your Product as, virtually, your last resort.
You need to start with your Professional Product. What exactly is it? See below. Once you’ve got a fix on this you can work out where the market is – and then you can work out exactly what you need to do to achieve your sales and profit targets.
If you would like to make a comment that others can read, see where marked TTC at the end of every Section. This where you can make your Contributor comment – which is emailed to editor@WorkingFree.co.uk - and published after screening. Please include your name and contact details so that other readers can get back to you. The real value in this Section– for all Readers – will doubtless come from learning from other Independents’ experiences and knowledge – what works and what does not work – things to do and things to avoid.
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You should prepare your Business Plan over the following heads:-
This is where you define exactly what you are trying to achieve. Firstly, Draft it fairly quickly and then revisit it when you’ve completed the Plan.
If you can’t summarise succinctly what you are setting out to do –keep trying until you can.
This is the most important element in your Business Plan – and one where talking through the issues is usually pivotal. People who have any knowledge at all about you can invariably be better placed to make sound objective judgements. It is almost as if not getting this right invalidates everything else. You need to feel happy about the confidentialities.
Here are some guidelines for thinking it through:-
- The tighter, the more niche and focussed your professional product is, the better. Almost always.
- It is usually something you’ve done a lot of…………… (could be just a part of what you’ve done)
- ………….. and you have been and still are good at it. It should also be something that you enjoy, get professional satisfaction out of and take easily to CPD. (This is vital. Would you use a heart surgeon who has not bothered to keep up to date?)
- There has to be a market for your Professional Product. Sometimes this is not obvious – but try harder to work out where it might be. A small market is invariably good enough – and it is easier to find the prospective hirers. Be prepared to travel.
- Avoid the thought that the more you can offer, the easier it will be to get the work. Whilst this can work, being an upmarket odd-job man/women is not where you want to be! You’ll always be up against someone with greater specialist focus. You want to be that person.
- Having a professional product that is more like a recognised commodity might be an exception to these rules – but having one or more differentiators will help immeasurably.
- Describe the market in which you sell.
- What is it?
- Where is it?
- Who are the main targets? Outline the main competition.
- What are the competing products or services?
- Who supplies them? What are the advantages and disadvantages compared to your own? For example, price, quality, distribution.
- Why will customers buy your product or service instead?
It is unlikely that you will have staff or direct reports in your own Practice but it is likely that you will have people reporting to you on assignment. You will probably be well practiced in managing people but you do need to be up to date in Employment Law (Technical Topic coming soon.) and need to be sensitive to in-company cultures. How dangerous is banter?
This is about how you do your work when on assignment. This semi-detached role can present difficulties. Learn as much as you can as soon as you can about the organisation and the people (pecking orders, loyalties, gossips, competences). Reconcile what the client wants with what they need – but don’t fall out and don’t do an assignment with which you fundamentally disagree. Integrity is fundamental.
This is all about what you have to spend to achieve what you want to or actually do earn. (Working Free might open this area up to greater scrutiny should demand emerge.) Your target is, very probably, to get the best daily rate, for about 220 full days a year with no gaps between assignments. Once you have worked out how you can achieve that, you’ll realise that life as an Interim Manager rarely works out that way. If it does, take it. But, like a cheetah, you can’t keep up full speed for long – and why should you want to. Over the years, anecdotal evidence points to about 160 days as the average.
Many successful Interim Managers take that as the norm – and plan their professional life around it, keep a cash cushion to avoid worrying about down-time, go on holidays when no-one else does and interpret networking in a fairly broad way which means going to places and events that are not obvious work producers – but have other personal or social attractions.
If days worked fall markedly less that 160 – and often are – you need to find out why that is happening. If it’s to do with forces within your control – see if you can take action. If it’s outside your control, best to keep your head down. Drastic action may be an option.
For the more practical aspects, see also Technical Topic – Accounting & Tax.
- Start by fixing an annual income target for your self – work it back into a daily rate. Take into account what the daily rate needs to cover.
- Is your professional product actually worth that much in the open market?
- Who is likely to want to pay that amount?
- Are you personally worth that amount?
- How do you compare with competitors – who are your competitors (Independents like you, boutiques or the major consultancies)?
- Is your Professional Product a commodity or is it unique. Commodities generally stick to market rates whilst top end specialists have much more flexibility.
- Can you work out the size of your target market.
- The accountant will tell you what you need to charge. Others might tell you to charge what the market will bear.
- Don’t work for nothing.
- Always have a reason for working at less that your declared rate.
- But many Independents negotiate. Like any professional services business, each sale is likely to be priced differently in response to circumstances. It could be partly commission/ Profit share loaded, with or without a terminal bonus, or equity linked.
Finally, do you actually look as and behave as good as you say you are