What is the Business Options Evaluator?

It is a strategic planning tool with a difference

1. Like many such tools it helps you with the  financials of a business,
2. Like many such tools it can look at the options,   
3. BUT UNLIKE many such tools IT HAS BEEN DESIGNED BY BUSINESS PEOPLE FOR BUSINESS PEOPLE, NOT BY ACCOUNTANTS!

What’s the difference? The numbers don’t have to be precise and therefore balance,

1. You don’t have fill in every box,
2. You start with the big picture and progress to detail as appropriate,
3. It is not based on traditional departmental and cost/budget centre structures,
4. It does not assume that you have factored in all of the key decisions before starting

We believe that the standard strategic planning tool  operates like driving a car, looking in the rear mirror all the time, and in that mirror only seeing figures! The only thing you should see in this rear view mirror is the competition!

With the Business Options Evaluator you can work on the whole business, just a market, a channel or a product group – in fact in any way that may give fresh insight into the way the business is run.

The base figures are best estimates. Total accuracy is not a pre-requisite, just good enough to facilitate the management decision-making process.

Segmenting the business is all important – even if the segmentation does not reflect the accounting system!

Start with a market. Usually the players define a market – though often each player has a different view.

Also the Pareto Effect is important.  Concentrate on those 20% of actions, customers, etc. that deliver 80% of the revenue.

The Business Analysis

Look at the market – most importantly the customers (not just yours) and the competition.

1. Match the customers against the competition.  
2. Project each competitor according to their strengths and weaknesses, and strategy – based on their customers and the likelihood of gaining and losing them.  The worksheet will help you through this.
3. Work out the elasticity of demand – based on the market and the competition – for this year and the next 2 years.
4. Then evaluate the various sales and marketing options.

The layout of this section will help the user look at the business by product, customer group and channel of distribution.

Having gone through all of the above the financial effect of each decision can be more logically and realistically evaluated.

To satisfy the Financial Director it comes down to the traditional measurements of ROI, IRR and pay-back, but with realism!

Other worksheets cover:

• Operating efficiency
• Product cost reduction
• Cash management

These use the same approach to focus on the operating parts of the business - whether the management of it, or the sourcing of products internally or externally.