- Posted Tuesday January 8, 2013
FPM’s Steve Morris looks at business planning concepts...
One of the partners is very keen on introducing business plans but others of us are not persuaded that we need this. Can you offer any advice?
Not an uncommon scenario in general practice. In my view the answer is “any practice should now have an up-to-date business plan”. In much of the recruitment work we do one of the questions asked by a prospective candidate is “Do you have a business plan” or “What’s in your business plan?”
The candidate is well switched-on to the future, as it impacts directly on them. Why should the partnership think any less of the concept? The sad fact is that too many practices don’t think a business plan is necessary. A new manager (or a new partner) coming in would rightly be wary of a rudderless ship.
In times past it perhaps a business plan was not essential – partnerships would be happy to drift along and the GPs would settle down to seeing patients. In times past things were stable and both the outside and the internal environment changed little, despite minor twitching within the NHS and rearranging of PCT / primary care organisations every five years or so. What had happened in the past would happen in the future. No need to plan. No problem.
But when times are altogether less predictable, maybe worrying or possibly threatening there is a need for a plan for your enterprise. Since the introduction of the revised contract in 2004 and the pending new contract (within even an early retiree’s tenure) the ground on which practices operate moves again.
General practice is no longer the only game in town. There are other players – admittedly only a few but make no mistake this will grow. What is the potential impact of these and other changes for you?
A business plan is the second stage in a process of preparing for the future. The first stage is taking the time in discussion, to work through a range of possible future scenarios for the practice and for the individual in the practice.
Acronyms abound here but two of the popular ones that give you a framework within which you can discuss the future are.
As far as the practice is concerned, and PESTLE analysis – analysing the external environment
The current and potential influences from political pressures.
The local and national economy impact.
The ways in which changes in society affect the practice.
The effect of new and emerging technology.
The effect of national legislation.
The local and national environmental issues.
There are loads of tools like these and they will be a familiar (if groan inducing) model for most managers. Despite this, they are actually quite useful.
What are the elements of your business that might feature in a business plan - what are the areas to think about? Here are a few: -
- How do we plan to manage patient demand?
- What is our intended list size, our intended growth/decline?
- What impact will the new contract, CQC and QOF changes have on us
- Premises, ownership, lease, move, stay?
- Will stay as one practice – are we big enough - advantages/disadvantages of merger
- What if other providers enter our locality
- Partner numbers/replacement policy – what can we afford?
- IT systems changes and improvements
- Sabbaticals / comings and goings.
- Management systems and personnel – are they strong enough for the future?
Each of you will be able to add to this list
Taking time out is a useful way to begin the business planning process. A place to throw about ideas, to share feelings. Use the time to try to allocate partner or Manager responsibility for exploring certain subject areas. Use your Practice Manager to his or her full potential to bring forward a draft plan and then work on keeping it up to date and working on the specific tasks needed.
In a recent Practice Manager recruitment brief the partners advised that they specifically wanted the new Manager to look at the future and its implications and options, and one common theme which has emerged over the last few years in manager recruitment is that increasingly the partners do not look to replace a manager “like-for-like”. Quite often they want new skills for a new world, and are taking the opportunity to recruit a forward-thinker.
The biggest thing to remember is that this is your plan for your future and that of your partners. It does take time initially to prepare it and to own it but it will pay dividends.
It is too easy for all of us to be consumed with the present. Unless you give the time to prepare for and plan your way through a future of considerable uncertainty, there is for the first time a real danger that general practice and individual GPs will find themselves in the wrong place with the wrong tools.
Business planning is not rocket science. All it needs is: -
- Some time putting aside to think about what might happen in the future
- Deciding what you need to do to prepare for the future
- Committing your agreement to paper
- Working to it and regularly updating it
It’s your ball park.
Steve Morris is a former business performance and risk analyst, and was a Practice Manager in Yorkshire for over ten years. He is General Manager, First Practice Management and specialises in finance and HR. He is a Fellow of the Chartered Institute of Bankers.