What is a Business Plan?

business plan

Business Plan

The term “business plan” usually refers to a plan for a start-up – one that is presented to a bank or to investors in order to secure capital. The business plan, while it is a practical and doable plan, serves to present a new venture and its market value, growth potential, service or product line, financial projections, and finally a request for funding. A business plan might be projected to take about a year to complete.

What is a Strategic Plan?

A “strategic plan” often applies to an already existing enterprise. The words “strategic” or “strategy” are easily understood in reference to sports or in a military context. The English word strategy in the early 19th century meant “art, office or command of a general” and goes back to the Greek strategos meaning “general, commander of an army” and earlier words meaning “army, expedition, encampment, that which is spread out” as well as “leader” and “to lead”. When we are talking about strategy, we mean leadership in a broad and tactical sense. We mean leading an enterprise toward the attainment of precisely delineated targets and the achievement of its goals.

The Distinction

Making a distinction between a business plan and a strategic plan is in fact a misnomer. They are both STRATEGIC. It’s really more like strategic plan #1 and strategic plan #2 or start-up strategy and expansion strategy. It is true however that the two strategies have different characteristics since the first is concerned with establishing something new and the second relates to something that already exists. The reason a new strategy often follows the start-up plan is because after you’ve gotten rolling, you know far more than when you started. You’ve gotten your feet wet and your hands dirty.

Many small (and large) businesses never put together a new strategic plan after they’ve gotten going. They just sort of keep recycling the business plan. And while that is better than no plan at all, any company seeking expansion would do well to put some time and effort into long-range strategic planning.

The Importance of Strategy

Read about business plans and strategic plans and it can get very dry, with references to KPIs (Key Performance Indicators), SWOT analysis (Strengths, Weaknesses, Opportunities & Threats), and extremely detailed and rather complex financial projection charts. All the super-specialized lexicon is enough to turn someone away from the whole idea, which is presumably why a certain percentage of businesses don’t bother doing it. Planning and strategy are not merely “administrative exercises”. When well-thought-out and done, they mean prosperity and growth. They mean E-X-P-A-N-S-I-O-N. And you want that.

Composing a Strategic Plan

Any strategic plan, whether for a start-up or an established company, is broad and sweeping by its very nature. It can be broken down into smaller plans. For the purpose of clarification, let’s refer to the smaller plans as programs. A program is designed to execute or accomplish a section of a strategic plan. A program can be broken down further into projects.

Example: A company has a strategic plan. That strategic plan has a marketing section. A marketing executive or department has a program in order to accomplish its section of the strategic plan. Within their program may be several projects.

Here are some of the major points to incorporate into any strategic plan (whether for a start-up or an established company):

Goals & Purposes

Goals

Setting and Reaching Goals

Your goals and purposes describe why you exist, your values as a company, the culture you strive to epitomize. They pervade every part of your organization. And where you fall short, you use your goals as a yardstick to set things right. These are not nebulous intangible thoughts. They summarize your ideals that are doable and reachable. The words aim, dream, aspiration, ambition, vision and mission statement also exemplify your ideals and what you wish to attain. These are all just different ways of describing what you intend to accomplish.

Policy

Many organizations neglect the formulation of sound company policy. Factually, your policy falls right under your goals and purposes as far as your priorities are concerned. Why? Policy should also encompass your culture and values. Policy is not rote and mechanical. It is very much alive. It’s how you do things, the standards you expect, how you take care of your customers and how you take care of each other. There are two main segments of policy: general and specialized. You will need both. To start with, look at some companies you admire and see if you can get a concept of their policies. Discover and decide if these would work for you. Adapt them or formulate your own.

Programs & Projects

You reach your goals and purposes through tactical programs and projects. These are the step-by-step solutions to accomplish strategic planning and achieve your goals. But they also contain numbers, such as how many clients you want, how many square feet you’ll occupy, how many new employees you need. You can get extremely specific, down to how many visits, clicks, shipments, boxes, envelopes and paperclips. Individual steps are called targets and they add up to the completion of programs and projects. From the minutia to the major, each step, each target builds on the ones before.

Market Analysis

Every company is concerned with getting new customers and retaining the ones it already has. You should do some work to determine your core market segment and any you wish to expand into. There are many methods for getting new customers. Here are a few:

  • Websites
  • Social media pages: Facebook, LinkedIn, Twitter, etc.
  • PR events
  • Press releases
  • Special offers
  • Referral incentives
  • Cold calling
  • Email
  • Adverting
  • Networking: events, tradeshows, conferences
  • Blogging
  • Search Engine Optimization
  • Surveys
  • Selling

One effective system, when done right, is called a strategic alliance, a host beneficiary relationship, or a third party endorsement. Once you have a clear idea of your target market, you find out what established businesses already cater to those people. These businesses need not do anything related to what you do; it’s their customers you are interested in. You then set up a meeting with some of these companies and present yourself and what you have to offer. What you are after is an alliance between yourself and the other company.

Let’s say you offer marketing services specifically for dentists. You locate a company that sells the premiere software for dentists. You set up a meeting (live, Skype, etc.) and get an agreement wherein they will send out an offer of a free product or service from your company. Just make sure it is something you can deliver that isn’t too costly. What the other company gets is goodwill, free of charge for them. If they send the offer to 1,000 names and you get 300-500 responses, you get 300-500 potential clients’ with names, numbers, emails, etc. The potential return is considerably high. That is just one example of a bright idea to get new customers right away at minimal expense.

Industry Analysis

You probably have competitors. What are they doing? What are they offering? What do they have that you don’t? What do you have that they don’t? What are your strengths, weaknesses, opportunities and threats? You need not get super-technical on this, but you should have a firm grasp of what is going on in your field.

Resources

Any strategy must include an assessment of existing resources that can be used immediately or cultivated. These include members of your team and their individual specialties, existing funds, potential capital, existing customer base, your premises, equipment, marketing channels, and of course the products and services you deliver. When you’ve listed these out, incorporate their utilization and augmentation into your strategy. Your current and potential resources are a key component to achieving the goals you have set.

Metrics

Metrics (aka statistics) are vital as they measure what you’re doing and what you’re not doing. They indicate your current output versus your potential. In your planning, you must include numerical targets to be met. These are the numbers that represent expansion. If you set targets of 5-10 times expansion, you’ll get yourself thinking in the correct order of magnitude. But take it a few notches further: Do a projection for 100 times expansion and see where that goes. You’ve got nothing to lose and everything to gain.

Summary

Those are some of the key elements of a strategic plan, or a business plan for that matter. If any of this seems difficult to grasp, draw it out in diagram form. In doing so, its core simplicity and practicality should be clear.

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Upgrade Your Performance: Tips for Improving Skills

by Per Wickstrom on September 4, 2014

Some equate “doing better” with “working harder” and while working hard is essential, it isn’t everything. You can work hard and get little or nothing done. You can even work hard and go backwards. That’s because you aren’t working on the right target or you’re going about it the wrong way. Upping your performance and honing your skills becomes a matter of intelligence and precision as well as momentum and elbow grease. Here are some tips for improving your performance and thereby your rate of success:

1. Abundance

Improving Skills

Strategy for Improving Skills

Never plan solely for your basic needs. If you do so, you will not meet them. When you plan, plan for two, five, ten, one hundred times your minimum. Only abundance will ensure you meet and exceed your needs. If you were thinking of how awesome it would be to get 10 clients, draft a plan for 1,000 clients. Even if you make 500, you’re 50 times higher than your original thought. You’ve got to think and do BIG because there are too many forces in the world trying to keep you small. Don’t be one of them!

2. Three is a Magic Number

Always have a Plan A, Plan B, and Plan C. Draft a short-range plan, a medium-range plan, and a long-range plan. Organize three sources of income. Three is your magic number. A motor or engine has three major points: Two terminals and a stable base = Three. A family unit normally consists of at least three members. A band often has three essential instruments such as drums, bass and guitar. Your first priority is quantity, followed by quality, and then viability = Three. The final component, viability, refers to your potential to survive and prosper in the long term. You must at least work in twos, but three is far better.

3. Perspective

What does the other person see? What are others’ perceptions? You must constantly step outside yourself and see from the eyes of others. Whenever you’re marketing or trying to get yourself out there, take the viewpoint of the other person. That’s why you survey – in order to really find out what people are thinking, what they’re feeling, what they need and what they want. Without compromising your sense of personal integrity, take others’ perspectives. The process is enlightening.

4. Be a Seeker of Knowledge

Thirst for knowledge. Constantly look for new insight. Note that knowledge is not the same as “data” or “information”. The internet is a prime example of an endless stream of information about anything and everything. Some of it is true and useful. A lot of it is not. When you are a seeker of knowledge, you’re looking for what has a ring of truth and what you can use. Work to identify source material, meaning works from someone who was successful in a certain field or who in fact invented it. Studying the theory of relativity? Read Einstein. Basketball? Michael Jordan. Software and computers (and marketing)? Gates and Jobs. Entrepreneurship? Richard Branson and Elon Musk. I’m not saying those names have all the answers, but they do have some useful things to say. Keep in mind it isn’t always the stellar names. Seek knowledge and you’ll find it in unlikely places. And it isn’t always the names that come out of universities. It is the iconoclasts, the ones who shook things up, the ones who did it their way.

5. Learn

When we go to school we are often forced into rote memorization. That is not learning. The test of anything you’ve studied is CAN YOU USE IT? There are ways to study that result in the factual assimilation of knowledge and the ability to use it. Using a dictionary and understanding the words you read is an excellent start. So is having the actual thing in front of you that you’re studying. If you’re reading a manual for a photo copy machine (they still use those, right?), your best approach is to stand in front of the machine while you refer to the manual. Another important point is to progress one step at time, starting with the simple before moving into the complex. All this applies in full to your career and the workplace.

6. Track Progress

Progress

Track Progress

“They’re doing great” and “they’re doing poorly” are useless statements. Why? They offer no specifics, no facts and no figures. They could be purely opinion or delusion. Therefore, in order to track progress, use statistics and numbers, aka metrics and analytics. Many sophisticated programs exist to do this, but you can start with simply tracking basic productivity. If you fix cars, track the number of jobs done as well as your income. Let’s say you’ve been placing some ads: How many ads placed and how many phone calls result in an appointment and a job? Use those numbers to determine if you need to fix, continue or step up your advertising, and if the phone calls and appointments are being properly handled. The applications are limitless in any sphere.

7. Make Friends

Talk to people where you work. Take an interest in what they do. Help the new guy while getting to know those that have been working there a long time. The night cleaner or security guard may know more about the business than they’re given credit for. Don’t just recognize your boss or the CEO as important. Take a car dealership: One of the most important people in a car dealership is the lot attendant. He’s the guy who handles the keys, washes and details the cars and moves them around. Any salesman should know that this guy is just as important – if not more so – than the desk manager. You want this guy on your team. Any workplace has such individuals. Get to know them and make connections. Make friends.

8. Organize

You have people telling you to put stuff away and unclutter yourself. But “Organize!” is more than a tagline; it’s a pathway to higher levels of productivity. When you want to increase volume, get organized. When you are experiencing greater volume, get better organized. Organization and production are inextricably intertwined. When you’re standing amidst the aftermath at the end of a busy day, look at how it could have been done better and more efficiently, and organize accordingly. You can even have someone solely dedicated to organizing – someone who really knows what they’re doing. They should know how to envision the final product and work back from there, breaking down all the steps so they flow smoothly one to the next.

9. Move Faster & Smarter

Let’s say you know exactly what to do and how to do it. Do it faster. Without compromising quality, get the delivery out the door ahead of schedule, get the project done and on the boss’ desk a day early, do your homework so you don’t have to do a project twice. Move faster and smarter at the same time. But if you feel boxed in and you don’t know what to do, start by moving faster. Exercising your mind and body gets you thinking more clearly so you can make the necessary changes. You could say that the power of an organization is measured in the speed and accuracy of its internal and external communication channels, employees and deliveries. Move fast. Move smart.

10. Take Care of The Machine

If you want to drive across the country, you should have a decently running vehicle. You’ve got to fuel it, change the oil, keep it maintained and do any needed repairs. The same is true of the human body. Your body could be likened to a machine that you use to accomplish your dreams. If you feel drained and exhausted all the time, you will get substantially less work done than if you felt energized and healthy. Your body does best when it is worked, but it does deserve some respect so that it continues to do a good job. An intelligent start is to establish and maintain a sensible diet as well as exercise daily. Seeing a qualified nutritionist is also a good idea, especially as you get older. When we’re young, we have unlimited energy despite the poor quality foods we consume, and this catches up with us later in life. So making some adjustments is often in order.

Those are some tips for elevating your performance and productivity. Good luck and over to you!

 

 

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How to Cope With Life’s Unexpected Twists

August 28, 2014

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10 Top Tips to Help Leaders Maintain Their Edge

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The Importance of Companies Giving Back to the Community

August 15, 2014

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Small Changes That Can Have a Big Impact on Your Business

August 14, 2014

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Should You Start Your Own Company or Stay in the Workforce?

August 7, 2014

  When the time comes for a person to enter the workforce, they are faced with a number of choices. Some go for the “safe route” that includes higher education and working for someone else.  Here is a look at some of the pros and cons to help you determine whether or not you should [...]

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Resume 101: What Employers Want to See

July 31, 2014

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Complacency vs. Creativity: How to Ignite the “Fire” in Employees

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The War Between Creativity and Complacency Creativity indicates a continuous desire to make things better, expand into new territory, take on more responsibility, grow and innovate. It means keeping things not just interesting, but captivating and compelling. From painting a picture or writing a song, to launching a new product or opening a new store, creativity [...]

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Why Entrepreneurs Should Plan for Failure

July 17, 2014

Planning for Failure You should always plan for failure. Why? In order to succeed of course. Planning for failure means asking yourself “What could possibly go wrong?” then answering that question and taking action. Then asking the same question and answering it again and again, and each time taking action. Can you plan for any [...]

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