Writing Your Business Plan

The last blog was pretty lengthy as it overviewed the contents of a business plan. This blog deals with what has to be the most challenging part of your plan—getting started. Factors that play a role in where you get started depend on the reason for your plan, the state of your business as well as your level of industry experience. Some of my suggestions may be unconventional, but that is because I consider the one thing that may influence you the most: your psyche. The formula for business does not change. So what causes most to bail out before starting? The psychological effects (both good and bad) at the thought of risking everything to start a business. Trust me; unresolved issues of the past along with the normal mix of emotions affect your ability to write your plan. So as I keep both the technical requirements to writing a plan, I also think about an entrepreneur’s emotional needs.

1. Write down your business concept as you envision it. What do you want to do? Why do you want to do it? What business problem are you solving? Is there a demand for your service or are you providing a solution for an unresolved issue in the market place? I encourage you to write what you envision. As you conduct market research (including your competitive analysis), you can get turned around. It’s easy to start doubting or losing sight of the vision for your new company. You can make this your first draft of your company overview.

2. Do an industry analysis. You can order reports that let you see how many businesses are in your area doing what you are aspiring to do and how much money they make on average. You can also purchase, research or ask a business consultant to get you standard revenues and expenses for your industry and use those numbers as a guide to creating your financials.

3. Write your products and services section.

4. Create your financial documentation that you will later update. Why? Usually as a new business, you want to have an idea of what you can make very early in the process. Step 2 and step 3 will allow you to draft your sales forecast as well as all your pro forma statements.

5. In your marketing plan, answers how you are going to achieve what you want to achieve. Your marketing plan will include an in-depth look at your customers and your competition.

6. Draft your advertising and sales strategy. You can incorporate this as part of your marketing section, but still tackle it separately. It is easy to get overwhelmed with the marketing section.

7. Draft your operational plan. In the previous steps, you have defined what you are selling, how your industry operates, how much you want to make and what you need to do (marketing-wise) to make that happen. Your operational plan will define what you need to do (internally) to make it happen.

8. Write your organizational plan. At this point you should be able to answer what management team you need in place to make it happen. If you need separate human resource plan, draft it at this time.

9. Compile your startup requirements (if you are a new business). You should be able to assess what your business requires from the other steps and take an inventory of what you have versus what you need.

10. Write your financial plan. This also includes how you will fund your business.

11. Refine your company overview section.

12. Draft your executive summary. While it’s the first thing on the business plan, it’s one of the last things you create.

13. Review and update your plan and create your appendix.

14. Compile your business plan. I also recommend that you have an editor review your plan.

If you are seeking a loan, remember that more than likely you will have to provide a personal financial statement. Remember that writing your business plan is an iterative process. You want to chew this elephant one bite at a time. A well-thought-out business plan not only empowers you, it also gives you a powerful tool to help you mind your business!

Related Blogs

Understanding the Importance of a Business Plan for Your Startup

Understanding Your Business Plan Content

Additional Resources

SBA business plan course

Score Business Plan Templates

About The Author

Jowanna Parris-Daley owns and operates jowanna inc™, a small business consulting company that offers services including business plan writing, e-consulting, website design and technology services for startup businesses.

Technorati Tags: Writing Your Business Plan,what order to write your plan,writing a business plan,small business plans,startup planning,jowanna inc,small business consulting

Understanding your Business Plan Content

Understanding your Business Plan Content

In the last blog, I defined the business plan, its purpose, benefits and common misconceptions. In this blog, I will give you an overview of the contents of a business plan. While my blog is geared toward startup businesses, it is also valuable if you have an existing business. The major difference between a business plan for a startup and one for an existing business is that a plan for an existing business will include historical information. Today I will provide a high-level guide to the business plan elements. There will be future blogs that detail each section discussed today.

The Business Plan Cover Page

While your cover page should attract your reader’s attention, it should be clean and simple. Your cover page should include the business contact information, identify the business owners and display the business name and logo. I also recommend that you include your consultant’s name (if you utilized a business consultant to help with your plan) and a plan tracking number. You should keep track of how many plans you distribute.

Confidentiality Agreement

You should include a confidentiality notice in your business plan. A confidentiality agreement will let your audience know (1) with whom they can share your plan and (2) how they can utilize your plan.

Table of Contents

Always include a table of contents (TOC) in your business plan. The TOC increases the ease of use of your business plan so that readers can quickly reference key areas of the plan.

Executive Summary

While your cover page may attract your reader’s attention, the executive summary must command it. This part of the plan is critical and should be considered the “make or break” part of your plan, especially if you are trying to raise funds. Your executive summary must tell what actions you are expecting from your reader. It should be a briefing of your entire plan but should not be longer than two pages. It should also include the following:

• An overview of your business concept
• A short bio on the key executive members of your organization
• A brief explanation of your market and how much of the market you are looking to capture
• A high-level description of how much funding is needed to start the business, how you will use the funds, the funding sources and the period the funding covers
• A financial overview that includes highlights from key financial statements

Company Overview

The company overview section provides information regarding your organization’s purpose. Along with information regarding the legal formation of your business, your industry and your organization’s core competencies, the company overview section should include:

• Your vision and mission statement
• Your business goals and objectives
• The keys factors to success
• The guiding principles that will govern your company

Product and Services

You will describe your product in detail in the product and services section of your business plan. While you should provide information such as pricing, elements such as detailed price lists, brochures, specs and photos should be stored in the appendices. The product and services section should also include your competitive advantages and disadvantages. It is also important to discuss how or what technologies affect your product development. Lastly, share any future product or service offerings in this section.

Marketing Plan

The marketing plan section of your business plan is one of the most involved sections. This section holds the key to many assumptions in your sales forecast. The section includes:

• Your market analysis, which is the result of all the market research you conducted to understand your customer base.
• An outlook of your industry. This includes the industry market size, how much of that market you hope to capture, market trends and growth and barriers to entry. You should also define the unique portion of the market that you plan to pursue.
• Benefits your product will offer your consumers as well as the reason why they would choose your product or service over your competition.
• Detailed market demographics.
• A competitive analysis.
• A description of your marketing strategy in terms of your pricing, how you plan to promote your business and how you will sell your product.

I usually divide my marketing plan into four sections:

• In the industry section I provide information about the industry on a macro level. Within this macro look at the industry I also conduct a Five Forces Analysis, which includes:
• An assessment of how much leverage suppliers and consumers have in the market
• The intensity of rivalry in the industry
• An analysis of how easily your consumers can fulfill their own needs by seeking alternatives to your product or service
• How easy it will be for new businesses to enter into the market
• The market analysis section includes a closer look at your market in terms of the size of the market in the area you will be servicing as well as the size of the market you are pursuing. It also includes your customer demographics and your market niche.
• The competitive analysis includes a close look at your direct competitors as well as a general assessment of the competitive climate in your market region.
• The marketing strategy section covers how you will promote and sell your products. I also include any strategic alliances in this section. If I have a milestone list, I also include it in this section.

Sales Forecast and Strategy

Your sales forecast is based on all the hard work you have done to understand your market. Along with your sales forecast, be sure to list key assumptions so that readers understand how the figures were derived. Your sales forecast will also include the costs associated with building your products or services.

Your sales strategy deals with how you will close your sales. Your strategy should not only include how you will close prospects, but also who will close prospects, what tools will be used to close sales quickly and what pricing and promotional strategies will be utilized to increase the close rate. If you have any sales programs, you can also list them in this section.

Operational Plan

Your operational plan is all about the day-to-day activities that support your company’s objectives. This section is as intense as the marketing section as far as the information it needs to supply. You should deal with your key operations in this area. It should include:

• Your product development policies.
• A description of the facilities where your products or services will be produced.
• A description of the terms and policies that affect your operations. This includes:
• Licensing and bonding requirements
• Permits, regulations and zoning requirements
• Risk management requirements such as insurance
• Intellectual property requirements

The amount and type of personnel you need as well as the policies that govern pay, training and responsibilities (you can include a human resource plan if your personnel plan is robust).

• Inventory policies and procedures.
• Listing of key suppliers, their history and policies.
• Your accounting policies and procedures, which includes your credit policies as well as your account receivable and payable procedures.
• Key policies regarding human resources and other departments such as sales, marketing and information technology.

Organizational Plan

The organizational plan describes the structure of the business. It covers the management staff’s experience, the unique competencies as well as any gaps in your management staff’s skill set. You should also include an organizational chart. If your organization is small (you may have two or three people playing multiple roles), then identify your chart by the various positions followed by the manager assigned to that role. Finally, include any consultants or mentors who are pivotal to your organization’s success. Your advisory board may include outside professionals such as your attorney, business consultant, mentor and accountant. Demonstrating a strong support system works in your favor. Potential lenders and investors understand that as a startup, you may have limited resources. Filling these gaps with a strong advisory board will be looked upon favorably.

Startup Funding Requirements

This section covers your startup expenses and your capitalization needs (I will get into the difference between these two in a later blog). Along with the funds needed for expenses and equipment, you will also want to ensure you obtain enough funding to cover your operational expenses until your business is able to carry the load on its own.

Personal Financial Statement

If you are seeking a loan, chances are you will need to include a personal financial statement for all of the primary business owners or major stockholders in the company. While there are financial companies that promise the ability to fund a startup without using your own credit history, I will urge you not to fall into deceptive practices. You are asking banks and investors to believe in your business concept enough to risk their financial assets to fund it. Banks and investors will look to see what you are willing to risk for your own business. If you are seeking SBA-backed loans, then you will be required to fill out the following forms:

• Application for Business Loan (Form 4)—You will have to provide details such as information about yourself and all business owners, information about your business, any current or previous SBA loans, current business debts and information regarding the reason for your loan request.
• Schedule of Collateral – Schedule A (Form 4(a))—This form requires that you list all the collateral to be used as security for your business loan. This includes real estate and personal properties.
• Personal Financial Statement (Form 413)—The SBA requires that any person meeting any of the following conditions fill out a personal financial statement: (1) each business owner or (2) each limited partner who owns 20% or more interest in the company and each general partner or (3) stockholders owning 20% or more voting stock or (4) any person or entity providing a guaranty on the loan. Each qualifying individual will provide a list of all their assets, liabilities, debt, stocks and bonds, real estate owned, unpaid taxes, other liabilities not mentioned and life insurance policies.
• Statement of Personal History (Form 912)—You will find that while government programs are there to assist small businesses, that assistance does not come without a price. One of the costs is the amount of information you have to give about yourself. The Statement of Personal History requires you provide:
• Your name including all former names used as well as information such as date and place of birth
• The percentage of ownership or stock you have in the business
• Your citizenship status
• Your present and previous address (covering a period of 10 years)
• Your criminal background status
• Authorizations for the SBA to run a criminal background check to determine whether you are eligible for assistance under one or more SBA programs
• Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion Lower Tier Covered Transactions (Form 1624)—By signing SBA Form 1624, you are certifying that all principals of the firm are eligible to participate in federal programs.
• Statement Regarding Lobbying (Form 1846)—By signing SBA Form 1846, you are certifying that you have disclosed any monetary support in efforts to influence or attempt to influence any member or employee of Congress.

Financial Plan

The primary purpose of the financial plan is to forecast the company’s future financial health. Your financial plan should include:

• Your proposed offer to investors and lenders.
• All key financial statements including a profit and loss statement, cash flow statement and balance sheet statement for your business, which covers a forecasted period ranging from three to five years. Your first year must show the monthly details, while the subsequent years can be shown on an annual basis. It is also acceptable to include your long-term forecast in the appendix.
• A break-even analysis along with key ratios and explanations. If possible include an industry comparison and explain any deviations from those standards.
• A list of key assumptions used in your forecasting methods. Some of these assumptions will include local tax rates, depreciation schedules and market growth rate.
• You can include your succession plan either in your financial plan or your organizational plan. Your succession plan is important to your organization’s long-term financial stability. A succession plan for a small business may include training other family members to assume responsibilities in the future. It may also include plans of selling your company in the future.

Appendices

• Your appendices should include all your supporting documentation such as:
• Bios for your management team
• Photos or specifications of your products
• Facilities blueprints and plans
• Maps and photos of your location
• Key surveys or market studies
• Brochures as well as advertising materials
• List of equipment owned or ones to be purchased
• Copies of any relevant leases and contracts
• Letters of support from peers and customers
• Materials that support assumptions in your plan
• All documentation required for your loan including a list of assets utilized as collateral for your loan

Conclusion

While writing a business plan is very involved, it is a task that is attainable. Even if you hire a consultant to complete your plan, you should at least understand what needs to be included in your plan. As you can see, even describing the contents of a business plan at a high-level is pretty involved. The future blogs will deliver bite-size portions of each section discussed above. Knowledge is power and knowing empowers. The more you understand about what it takes to start a business, the more effective you will be at minding your business!

Related Blogs

Understanding the Importance of a Business Plan for Your Startup

Additional Resources

SBA business plan course

Alpha Teach Yourself Business Plans in 24 hours

The Entrepreneur Magazine Small Business Advisor

Score Business Plan Templates

About The Author

Jowanna Parris-Daley owns and operates jowanna inc™, a small business consulting company that offers services including business plan writing, e-consulting, website design and technology services for startup businesses.

Technorati Tags: Understanding your Business Plan Content,business plan contents,writing a business plan,small business plans,startup planning,jowanna inc,small business consulting

Understanding the Importance of a Business Plan for Your Startup

My new blog series is much anticipated and long overdue! I will be discussing the ever-dreaded, but always needed, business plan! Today I will define the business plan, its purpose, the benefits and common misconceptions of the plan. While every business needs a plan, I will focus on the startup plan. Remember that once you have a plan, you must update that plan every year!

What is a Business Plan?

A business plan is the formal documentation of your business concept in its entirety and is typically shared with people outside the organization for the purpose of funding. That is the pretty definition. Starting and defining a business concept is not as easy as it sounds. The business plan is a document that must be built systematically and must answer plenty of questions including:

• What is the purpose of your organization along with its goals and objectives?
• What do you plan to sell?
• How many consumers purchase products like yours (the market size)?
• What is the state of the industry that you operate within?
• Who else sells what you sell and why will consumers choose to buy from your organization?
• How will you promote your business and close sales?
• How much do you think you will make?
• Who will run the organization?
• How will you operate your business within the guidelines set by the regulatory authorities?
• What risks exist and what is your plan to mitigate those risks?
• How much money do you anticipate making over the next three to five years?
• How will you get paid and how will you pay your bills?
• What is your financial goal and under what assumptions did you formulate your forecasted financial statements?
• How will you finance your business? How will you recuperate your investment and how long will it take you to be  profitable?
• What is your business continuation plan?
• Why would anyone want to invest in your business?

Many entrepreneurs want to just throw the business plan writing over the fence to a consultant, but a viable plan cannot be written without your cooperation. The business plan must be built with your vision serving as the foundation for the plan.

The Purpose of a Business Plan

Your business plan serves several purposes that all intertwine. First, it strategically maps out your business concept and tells the story of why your business concept is a viable idea. Secondly, it serves as a communication tool to let others know what you are planning to do. The audience may be potential business partners, investors, banks and employees. Last, but certainly not least, the plan is used to secure funding. As a matter of fact, 99.9% of the time someone calls me to create a business plan, it is because they are seeking funding. Every time I get a chance, I preach the importance of a plan beyond funding. Your business plan should be a tool that all but guarantees how you can make your business successful.

Benefits of Having a Business Plan

It’s almost easier to tell you the risks of not planning (you are all but guaranteeing failure), than to detail the numerous benefits. But, following are some of the benefits (among many) of having a plan:

• It aligns your short-term objectives with your long-term goals.
• It mitigates unforeseen disasters and points out opportunities you did not consider.
• It lets you know your startup cost, how much is needed to fund the business and when the funding is needed.
• It lets your funders know why if you are worth the risk.
•  It builds your confidence!

Misconceptions about the Business Plan

• One size fits all. While the structure and outline found in a plan are the same, the contents are not. No two businesses have the same plan. While there may be common sections or information (i.e. industry and market profiles), the plan is built on a vision and strategy unique to each owner.
• Writing a business plan is simple and anyone can do it. The truth is putting together a plan is an arduous and sometimes emotional process. Scoping your big dream down to what you can do today is easier said than done. The idea is yours, but it is almost mandatory to get expert help. If writing and implementing a plan was easy, then we all would be successful entrepreneurs.
• Writing a business plan is impossible. While a plan is hard, it is not impossible to write. It’s a matter of answering all the questions and presenting information in a clear and concise manner. Even if you have a consultant write your plan, you must still know how to explain it.
• A business plan guarantees funding. Funding cannot take place without a plan; however, funding a startup depends on more than just the plan. Your company history and your financial credibility also play a vital role. While I have seen good plans supersede any personal flaws, it is important to know that your financial health could make the difference in getting funding.
• Write a business plan once you are ready to go in business. The most common mistake that potential entrepreneurs make is waiting to start a business plan. The sooner you start your plan, the sooner you will realize your dream. My business concept was in my head for over a decade and I started my plan several years before actually starting my business. Because of this, I actually started sooner than I dreamed!
• Write a business plan and “hope” it works. You should not consider entrepreneurship a reckless and risky business. Starting a business is a calculated risk that is weighed heavily in your favor with a proper plan. Your business plan is a brilliant document that sets in motion a strategy for success that incorporates your greatest strengths and outlines a counterpunch to mitigate every risk—it considers the best- and worst-case scenarios. Nothing guarantees success; however, a plan is the closest thing you can get to a guarantee. It is your best foot forward!
• Once a business plan is written, you don’t have to worry about ever writing another one for your business again. The environment around you changes every day. Laws, technology, trends, etc. are constantly in motion. While you create a version of your plan for a moment in time, it should always be kept up to date. You should update your plan at least once a year. Your subsequent plans should consider how your company performed versus the plan, the internal change to your organization and changes in the environment outside your organization.

Conclusion

Starting a business is exciting and scary all at the same time! In the spiritual world, people utilize a guide to determine their every move—for Christians that is the Bible. Consider your business plan your organization’s bible. Don’t knock the analogy—your business plan also incorporates your guiding principles (your values) that you will perform under. The bottom line is that your business plan is ESSENTIAL to effectively minding your business.

Additional Information

SBA business plan course

Alpha Teach Yourself Business Plans in 24 hours

The Entrepreneur Magazine Small Business Advisor

About The Author

Jowanna Parris-Daley owns and operates jowanna inc™, a small business consulting company that offers services including business plan writing, e-consulting, website design and technology services for startup businesses.

Technorati Tags: Understanding the Importance of a Business Plan for a Startup,benefits of a business plan,writing a business plan,small business plans,startup planning,jowanna inc,small business consulting

How the 2010 HIRE Act Affects Your Business

What is it?

It is a new piece of legislation signed into law by President Obama in March 2010. The law primarily does two things:

(1) It provides employers exemption from paying the 6.2% employer social security tax for new employees hired between February 3 and December 30, 2010.

(2) It provides employers with a tax credit up to $1,000 or 6.2% of the new employee’s wage (whichever is less) for workers hired after February 3, 2010, provided that they hire for a minimum of 52 consecutive weeks.

What are the rules and guidelines for the new law?

Social Security Tax Exemption

• The new employee must have worked 40 hours or less, 60 days before employment. This means that if you quit one job to start working at another, you do not qualify. The bill is aimed to help the unemployed.
• The tax relief applies only to wages up to $106,800. If someone earns more than $106,800, only the first $106,800 will be exempt from the social security tax.
• Employers cannot fire a worker to replace him or her with someone who qualifies for the tax break.

Tax Credit

• The new employee must sign an affidavit that he or she has not worked anywhere else for more than 40 hours 60 days prior to being hired.
• Employers cannot fire a worker to replace them with someone who qualifies for the tax break.
• The employee’s wages during the last 26 weeks must be at least 80% of what the employee made for the first 26 weeks.
• The employer cannot certify for tax credit under the HIRE Act and the Work Opportunity Tax Credit (WOTC)[1] —employers must choose one or the other.

How does a small business benefit from the law?

The HIRE Act was signed into law to help accelerate recovery from the recession by offering employers incentives in hopes that it reduces our unemployment rate. Employers would see a reduction in payroll expenses.

Conclusion

There are government incentives available to encourage entrepreneurs to start and maintain businesses. The unemployment level has a direct correlation with small business success—approximately 50% of private sector employment comes from small businesses. Being aware of government initiatives may prove beneficial for your business—understanding government legislation is important to you minding your business effectively.

Additional Information

http://www.govtrack.us/congress/bill.xpd?bill=h111-3200

http://www.doleta.gov/business/Incentives/opptax/

About The Author

Jowanna Parris-Daley owns and operates jowanna inc™, a small business consulting company that offers services including business plan writing, e-consulting, website design and technology services for startup businesses.

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[1] The WOTC is a bill that offers tax credits to employers if they hire individuals from disadvantaged groups (as defined by the law).

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The Strategic Plan: Your Road Map to Excellence (Part 5—Tactics)

 

Here we are: the last blog of the strategic plan series! I want to emphasize that there are other parts of a strategic plan that are important. I did not want to overwhelm you with all the elements. I will, however, pay tribute to some of these other elements in this last blog. So far we have covered the vision, mission, goals and strategies of your strategic plan. In this blog I will discuss what our first step, instead of the last, is often—your tactical plans.  

Your tactics are the day-to-day activities that will be carried out in your organization in order to achieve your goals. To ensure those activities are carried out successfully everyone must know:

• What tasks are assigned to them and when those tasks must be completed

• How the tasks they are doing fit into the big picture

• What results are expected

• How they will be measured

In essence, your tactical plans are the detailed plans on what tasks need to be completed. As a startup myself, I recommend you prioritize your goals and activities. You will find your tasks will outnumber your resources. The following is an excerpt of one of jowanna inc’s goals in our strategic plan.

Goal: Publish Four New Blog Series by the End of the Year

The blog series will be utilized to establish branding and subject matter expertise.  The blog series will be tied to our marketing campaigns, and all social media marketing initiatives will align with our blog series.

Strategy

Align blog series with marketing campaign and utilize blog series rollout to create documentation samples, presentations for seminars, Facebook photo albums, articles, vlogs and podcasts. This will ensure that we send a consistent message using multiple communication mediums.

Key Success Indicator

We will know that we are successful if we have a blog series published by the end of each quarter.

Tactical Plans

Set up and implement blog campaign plans.

Tactics

ID	Tactic	Business Result	Define Outcome	Performance Measure	Executive Accountable
1.1	Second  Quarter Blog Series Campaign Blog	Completed Campaign Plan Ready for Implementation	A fully defined plan that includes: -   Campaign objectives/goals -   Blog series selection -   Campaign duration -   Competitive analysis -   Campaign activities	-    Completion Date	- Jowanna Parris-Daley
1.2	Second Quarter Blog Series Implementation	Branding Service Awareness	-   Implementation of Blog Series	-    Quality of Blog -    Timeliness of Blog	- Jowanna Parris-Daley
1.3	Third  Quarter Blog Series Campaign Blog	Completed Campaign Plan Ready for Implementation	A fully defined plan that includes: -   Campaign objectives/goals -   Blog series selection -   Campaign duration -   Competitive analysis -   Campaign activities	-    Completion Date	- Jowanna Parris-Daley
1.4	Third Quarter Blog Series Implementation	Branding Service Awareness	-   Implementation of Blog Series	-    Quality of Blog -    Timeliness of Blog	- Jowanna Parris-Daley
1.5	Fourth Quarter Blog Series Campaign Blog	Completed Campaign Plan Ready for Implementation	A fully defined plan that includes: -   Campaign objectives/goals -   Blog series selection -   Campaign duration -   Competitive analysis -   Campaign activities	-    Completion Date	- Jowanna Parris-Daley
1.6	Fourth Quarter Blog Series Implementation	Branding Service Awareness	-   Implementation of Blog Series	-    Quality of Blog -    Timeliness of Blog	- Jowanna Parris-Daley

 

As I mentioned earlier in the blogs, there are other sections that you should include in your strategic plan. I conduct an environmental analysis before setting my goals. With an environmental analysis you assess your organization’s strengths and weaknesses with consideration to what is going on in the world around you. This will allow you to know your opportunities and risks given the current state of your organization. I also ensure that my value system is supported in all our activities.

Planning strategically means that you make every effort to lay out a plan that maps to the daily actions of everyone in your organization. Strategic planning is something that should be done with input from your management team. To achieve excellence you must plan for it. Strategic planning allows you to take the deliberate actions that are important to helping you mind your business.

Related Links

The Strategic Plan: Your Road Map to Excellence (Part 1- Your Vision)

The Strategic Plan: Your Road Map to Excellence (Part 2 – Your Mission Statement)

The Strategic Plan: Your Road Map to Excellence (Part 3 – Your Goals)

The Strategic Plan: Your Road Map to Excellence (Part 4 – Strategies)

10 Steps to Successful Strategic Planning

Alpha Teach Yourself Business Plans in 24 Hours

About The Author

Jowanna Parris-Daley owns and operates jowanna inc™, a small business consulting company that offers services including business plan writing, e-consulting, website design and technology services for startup businesses.

Technorati Tags: Strategic Plan: Your Road Map to Excellence (Part 5 - Your Tactics),tactics,tactical plan,Strategic Plan,Small Business Consulting,Entrepreneurship,jowanna inc

The Strategic Plan: Your Road Map to Excellence (Part 4 – Your Strategies)

The last blog got us closer to the thing we often jump to first … doing. We are often so ready to do that we don’t take the time to plan. Patience and faith are the virtues of small business success. You have to trust the formula of success, which is through deliberate planning and actions. We might have our own way of reaching our destiny, but we must work within the proven framework. The elements of the strategic plan covered in this blog series include: vision, mission, goals, strategy and tactics. There are many more elements that we can dive into, but the purpose of this series is to keep it simple and make it possible for you to start what can seem to be an arduous and intimidating process. Even if you don’t complete your strategic plan yourself, understanding the basic elements will allow you to communicate the foundation you want your company to be based on. It will also help you understand that even if you hire a consultant to assist with your strategic plan, you play a key role in ensuring the plan supports your organization’s vision, mission and goals.

In the last blog I discussed goals; in this blog I will overview your strategies. Your strategies are the first level of “how.” How will you reach your goals? We are not dealing with a detailed plan of action yet— just the approach. For instance, if I plan to solve world hunger, I included a goal of solving world hunger in three continents by 2010. My strategy may be to first take care of home, then go to Africa and then Asia. The tactical plans would have the details such as my route, the timeline and the mode of travel.

Strategic Approach

When thinking strategies for your organization, you will want to consider all aspects of the organization. Here are some areas you might want to consider as you formulate your approach:

• Growth. How you intend to grow will play into your other strategies. Some questions you will have to answer are:
  • How long do you want to be in business?
  • Do you plan to sell your business in the near future?
  • Do you plan to stay a “one-person” shop or expand your organization?
  • Do you plan to expand internally or do you plan to expand through acquisitions and partnerships?

As you answer these questions, you will see why I recommend limiting your vision to three years—it will help keep you from being too overwhelmed. For example, our plans for growth at jowanna inc are relatively conservative. We plan to concentrate on validating our business model before pursuing a larger market share.

• Product & Pricing Strategies. Some of the questions you will want to answer include:

  • What kind of product or service mix will you offer?
  • Will you be offering high-end or lower-end products?
  • Are any of your products seasonal?
  • How will you render service?
  • What kind of resources do you need?
  • Will you offer a range of price points?
  • Does your pricing match the image you have for your product?

For instance, our strategy is to let our consulting, strategic and business plan writing services guide us on future services. We will concentrate this year on making adjustments to how we deliver our services. Then we will also explore ways to reach a wider audience. In order not to compromise the quality of the service, we have to price in a manner that will support the business and we will find ways to make it economical (for instance, group consulting and creating a program that allows potential entrepreneurs to spread payments over a longer period as well as become technically and emotionally prepared for business ownership). The hard questions we are answering include: What services can we offer in a group setting? How can we reach a wider audience? Do our price points support our efforts? We believe strategic planning should drive your operational, technological and marketing needs. Unfortunately, it is easy to get a solution before even knowing what opportunities or problems you might have.

• Sales, Marketing & Distribution Strategies. Your sales and marketing strategies answer the following questions:
  • How will you reach your market?
  • How will you ensure your product appeals to your market?
  • How will you get people to buy your product or service?
  • What incentives will you use to increase sales?
  • What’s your plan regarding service fulfillment and delivery?
  • Will your company deliver services virtually or face-to-face?

Our company looks to penetrate the market through brand establishment. We are a “one-person” shop in terms of client-facing associates. We want one contact accountable for service fulfillment. We are utilizing my extensive business and technology experience as well as my passion for service to brand the company. We hope to transfer my personal brand to the company. Personal interaction is important. Social media outlets allow us to create an intimate setting in the virtual world. These are just a few examples of our strategies to market, sell and distribute our services.

• Operations, Management & Funding Strategies. Some questions you will want to answer in terms of operational, managerial and funding strategies are:
  • How will you run your business operation?
  • What will you do to attract the talent you need?
  • Will you outsource or hire help?
  • What kind of systems will you have in place?
  • Will you have a virtual or physical location?
  • How will your company be run?
  • Who will manage employees?
  • Will you have a centralized location?
  • How will you fund your business?
  • How will you fund the growing needs of your business?
  • Will you be privately owned or publicly traded?
  • Are there opportunities for partnership?

Our company also has to answer tough questions. With tough questions sometimes comes the arduous task of finding the right solutions. You won’t be able to answer all the questions right away. Have a high-level plan of attack and pick the ones you will tackle first. We will review the goals I shared with you in the last blog and then some of the strategies that I have in mind.

If you recall, my goals for jowanna inc for 2010 are:

• Publish four new blog series by the end of the year
• Establish a Facebook fan base of 5,000 by end of the year
• Achieve $180,000 in sales with a 20% profit margin
• Achieve an average revenue of $2,500 annually per client
• 100% client satisfaction

I chose to have a general approach as well as a specific approach to each goal. Here is an excerpt from my strategic plan:

General Approach

Our general approach to achieving our goals is to establish brand awareness in both our local and virtual communities. We will do so by ensuring we have consistency in our message. Our campaigns will be formulated so that we can deliver the same message in various formats. We will concentrate most of our advertising budget on our Business Strategy and Planning services. We feel this is critical to establishing ourselves as a company that concentrates on startup businesses.

Goal: Publish four new blog series by the end of the year

Strategy
We will publish one blog series per quarter. We will align the blog series with our marketing campaign and utilize blog series rollout to create documentation samples, presentations for seminars, Facebook photo albums, vlogs and podcasts. This will ensure that we send a consistent message using multiple communication mediums and align goals in a manner that allow us to maximize our accomplishments.

Goal: Establish a Facebook fan base of 5,000 by the end of the year

Strategy
Utilize organic and cost-based initiatives to grow our fan base. We will utilize Facebook advertising, recommend page to friends, ask close family and friends to recommend fan base to the page and utilize website and print media to invite people to join us on Facebook.

Goal: Achieve $180,000 in sales with a profit margin of 20%

Strategy
We will take a multi-faceted approach to achieving our goals and they will include the following:

• Running revenue-targeted campaigns

• Utilizing our blog site, website and social media outlets to display campaign ads

• Offering webinars to introduce our services and offering group consulting

• Identifying opportunities to expand services that clients use

• Running ads that target potential clients very early in the process, which will increase the likelihood of utilizing additional services (i.e. business plan, web design and technology solutions)

• Volunteering at local organizations such as Chambers of Commerce

Goal: 100% Client Satisfaction

Strategy
Document our process and identify key success indicators within the process. Develop methods to get continuous feedback during each stage of our service-rending process.

This process may be a little intimidating but it is worthwhile. Don’t be afraid to hire a consultant to help you navigate through your plan. It can save you hours of frustration. You do want to at least understand the process so that you will know how to execute your plan. My final blog for this series will deal with the nuts and bolts of the strategic plan: your detailed plan of action—the tactics you must implement. Before action must be in-depth planning; before in-depth planning you have to decide on your approach. Taking the time to strategize how you will approach your goals will help you mind your business.

Related Links

The Strategic Plan: Your Road Map to Excellence (Part 1- Your Vision)

The Strategic Plan: Your Road Map to Excellence (Part 2 – Your Mission Statement)

The Strategic Plan: Your Road Map to Excellence (Part 3 – Your Goals)

Alpha Teach Yourself Business Plans in 24 Hours

About The Author

Jowanna Parris-Daley owns and operates jowanna inc™, a small business consulting company that offers services including business plan writing, e-consulting, website design and technology services for startup businesses.

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