A 50-page business plan may be required for a bank loan, but in reality, a document too lengthy won’t be beneficial to a business owner as it will likely sit in the drawer without being reviewed, adapted, or held to account. A clear, concise business model highlights ambitions to work towards and acts as a to-do list – making it easier to tick off and adapt if required. In a world where time is the scarcest resource, we need to make these regular check- ins quicker and simpler.
As many businesses will attest to right now, fundamental changes to your business and operations serve as a trigger point to review your current business model and how sustainable this is for the future. Regular checks of a business model also lessen the dangers of being purely reactive and changing business models in firefighting mode.
A resilient business model through scenario planning
An effective business model will stress test the business with scenarios that could impact the business and the actions that would be taken to ensure the business can adapt and remain financially viable when change happens.
One way to do this is by applying the now, where, how framework to a variety of scenarios that would impact the business, with a low, medium and high impact.
Low severity would be minimal disruption with the ability to do business as usual. Medium severity could mean there are a few risks and sales, cashflow and capacity would be impacted. High severity would mean a business cannot operate and may have to make difficult business decisions.
Scenario planning should run alongside the overall business model and be a key focus when reviewing the plan. Understanding what the options are at varying levels of impact can help a business remain resilient and innovative and reduces a firefighting approach should worst- case ‘what if’ scenarios become reality.
Our teams have found this to be a really effective tool for our clients over the past 18 months. Businesses have been faced with many uncertainties and unknowns, and so planning for different scenarios has meant that business leaders have been ready with clear strategies to get through any eventuality.
Next steps
Business models can help promote growth and ensure businesses remain resilient in both positive and negative scenario situations. As businesses reopen and the world looks ahead to life after Covid-19, now is a good time to review, alongside a trusted business adviser, your current business model and prepare for the future.
Our team of experienced business advisers have helped many businesses in varied industry sectors write and rewrite business models fit for the future and further adapt their models during Covid-19. Our advisory experts can work with you to review your current business and structure, renew your business plan and help to mitigate risks and maximise opportunities for the months and years ahead.
If you would like to discuss your current business model with a member of our team who can advise on how to ensure your business model is fit for the future, please speak to your local Azets adviser.
Eddi Taylor
To contact Eddi Taylor:
eddi.taylor@azets.co.uk
Azets Canterbury office: 01227 454861
azets.co.uk
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