Resources are the lifeblood of operating a business. You can’t provide services or sell goods without them—you’re like a car without wheels.
The resources we’re talking about include the various assets and elements that contribute to the functioning and success of your business, such as your finances, team, equipment and technology.
When you have the right combination of resources, your business can thrive and grow. However, when your resources are inadequate, you’re severely limiting your capabilities and profit-driving potential.
It’s with this in mind that resource planning, something we support our clients with, is so critical. But what exactly is resource planning? And what do you need to think about? Let’s take a look.
Resource planning falls under the strategic planning umbrella.
It can be defined as the process of strategically identifying, allocating and managing resources to support your business's objectives and optimise productivity.
It involves analysing your resource requirements, determining the availability of resources, and developing a plan to ensure that the right resources are allocated to the right tasks or projects at the right time.
The main goals and benefits of resource planning for your business include:
To help you better understand what’s involved in resource planning, here are some things we recommend you think about and action for each of the main resources.
Financial resources play a crucial role in resource planning. As the well-known saying goes, ‘You need money to make money,’ which holds true when allocating resources effectively.
Your financial resources cover all your business’ capital and assets, including cash, investments, loans and lines of credit.
You need funds to pay for labour, purchase raw materials, rent, and other expenses. You also need money to grow your business, for example, injecting working capital and purchasing capital items to operate, such as machinery and vehicles.
In addition, you need to consider other costs such as marketing and business development and staff training.
To successfully manage your financial resources, you should be continually reviewing them to confirm that your business has financial sustainability and feasibility. Cash flow and profitability forecasting are essential.
Your team members (including managers) are typically the face of your business when dealing with clients and/or the market. Therefore, the quality of your team is hugely important.
To successfully manage your team or human resources, you need to employ the right people with values that align with yours and the business. You must also ensure that each person’s role and responsibilities are clear, communicated and agreed upon. This will greatly enhance efficiency.
If you need more people to deliver on your goals, today’s recruitment market is tough. Make sure you focus on what you do differently and offer benefits. Give people a reason to want to work with you.
Staff retention should also be a priority. Don’t take your existing team for granted, and look at their development plans.
Having the right systems and business processes in place is essential to improving efficiency and enhancing consistency. It can also help you scale.
Ask yourself: Do you have the right systems in place? Would it be worth investing in some? And what is our budget?
To know whether you have the right systems in place, make sure you stay informed about emerging tech trends, innovations and industry best practices. And evaluate the relevance and potential benefits of adopting them.
How could emerging technologies, such as artificial intelligence, cloud computing, data analytics and communication and collaboration tools, enhance your business operations and provide a competitive advantage?
Importantly, have conversations with your staff. Where do they see bottlenecks? What tools would help them? Their ideas and feedback can be extremely valuable.
Next, let’s get physical. Your physical resources include the tangible assets your business needs, such as land, buildings (premises), facilities, equipment, machinery, vehicles, and raw materials.
To successfully plan in this area, you should conduct a comprehensive assessment of your current physical resources. Look at condition, resource capacity, maintenance requirements and lifespan. Also, consider how often they’re used.
You then need to forecast future needs. Consider your business growth plans and anticipated demand to determine what resources you’ll need. Based on this assessment, you can develop your resource allocation strategy to meet demand, minimise bottlenecks, and optimise use.
Premises in one physical resource we like to hone in on.
The size of your premises can allow expansion but also restrict your business. Therefore, they should satisfy existing requirements and allow for future plans. Also, think about the layout. Getting it right can boost efficiency and make the best use of space.
Do you own or lease your premises? There are pros and cons to both, depending on your circumstances.
Partnership and relationship resources include collaborative networks, strategic alliances, and relationships with suppliers, vendors, customers, stakeholders, and other businesses that contribute to your business's success.
Successful planning in this area begins with identifying your key stakeholders and understanding the needs, expectations and value they bring to your business and how they help you reach your goals.
Next, determine which relationships are the strongest and prioritise the attention and resource allocation you give them accordingly.
One resource it might be worth investing in is a business advisor. Utilising the expertise of others can help you learn and grow.
While you may not immediately consider it, your brand and reputation are key resources in your business.
Your business's reputation, brand image, customer loyalty, and public perception are valuable resources in building trust, attracting customers, and gaining a competitive edge.
What are your brand mission, vision and values? How is your business currently perceived? And where are the gaps between your desired image and your existing perception?
Think about tactics you can use to enhance the strength of your brand in the market and boost your reputation, from investing in marketing and communications to sponsorship and PR, and allocate resources accordingly.
While looking at each area of resource planning independently is important, good resource planning involves considering them holistically.
Every aspect needs to tie back to your short- and long-term business goals. This will help provide a clear direction for resource planning and allocation. You can then determine priority areas for your business based on their strategic importance. Resource planning tools can be helpful here.
Critically, you should monitor and adjust your use of resources and evaluate their effectiveness in light of changing business needs, market conditions or performance indicators.
Finally, don’t forget to incorporate lessons learned into your future resource planning efforts and resource management cycles.
If you’d like support with creating a resourcing plan for your business, reach out to your Maxim advisor or get in touch with our team.