Strategic Planning for Business Success
January 11, 2010 by Frank Goley, Business Consultant
The Business Success Strategies Blog is sponsored by ABC Business Consulting
Now that you have developed your Marketing Plan, you can put it into action through the Strategic Plan and Sales Plan. This overview of the Strategic & Sales Planning Process is divided into Eleven Sections, which are presented in a particular, building-block order.
1) Potential Problems & Company Objectives: First identify and rank your Potential Problems in your Company Operations: Cash Flow, Market Changes, Competition, Costs, Distribution, Productivity, Employee Turnover, Regulation, Market Acceptance, Pricing, Quality, Capital, Service, Control Systems and Facilities are some of the areas you should examine in identifying potential Problems. With your Problems identified and ranked in importance and severity, you can develop Company Objectives you aim to obtain. These Objectives should strive to minimize and manage the identified Potential Problems, while emphasizing your Company’s Strengths.
2) Risk Analysis: Building on your Potential Problems identified in Section One, this Analysis produces Expected Risks. Look at Litigation Threats, Liabilities, Regulatory Issues, Major Risks and Problems and answer the following questions: When are Problems likely to occur? What can you do to mitigate the potential risks and problems? How will you deal with these problems? The last part of the Risk Analysis looks at how you can turn these problems into opportunities, which parlays into Section Three.
3) Company Strategies, Strategic Tactics & Strategic Programs: First develop your Strategies, then the relating Strategic Tactics and then the resulting Strategic Programs.
a) Strategy is Focus. Strategy consists of key factors that distinguish your Company and are most expected to contribute to your success. It is important that your Company Strategies complement each other so you are not sending your business in separate directions.
b) Tactics are used to implement strategies and relate to a specific Strategy.
c) Programs are specific business activities which have concrete dates, assigned responsibilities and developed Budgets. Programs relate to Specific Tactics of a Specific Strategy.
4) Sales Strategy: Remember that sales close the deals which Marketing opens. Sales are dealing directly with your Customers. Develop the Sales Strategy as it specifically relates to the Marketing Strategies you have set forth. Describe and develop the different sale methods and channels you will use to sell your Products and Services. Determine your Sales Goals and your Sales Process. Develop an effective Salesperson Training Program and Compensation Structure. You should also look at order processing optimization, sale milestones expectations, price maneuvering, sales leads generation, distributor roles; credit and collection policies; how the Internet will be utilized; and so forth.
5) Sales Programs: After developing your Sales Strategies, it is time to define your resulting Sales Programs. The Sales Program addresses how your Sales Strategy will be implemented. Once implemented. Once implemented, you should have systems in place to measure the Strategy Implementation and support your sales efforts.
6) Strategic Alliances & Joint Ventures: Define your Keystone Strategic Alliances and Partnerships. Identify and develop Co-Marketing and Co-Development Opportunities; Product Help; Commission, Cooperative and Product / Service Agreements. Is the fate of your Company tied to another Company? Explain how these Alliances help your Company and any inherent risks.
7) Rolling Basis, Monthly Outlook (Yearly Basis) Operating Budget: The Operating Budget is a Planning and Control Mechanism which helps you develop Section Eight, the Sales Forecast. It should be on a Rolling Basis, Outward looking for one year and the format on a Monthly Basis. Rolling Basis means after each quarter you Budget for the next three months. The Budget should be twelve months forward looking. You should have a Target and Actual Column so you can track results and adjust throughout the year as necessary. Your Operational Budget should directly reflect your Strategic Planning Goals. Determine whether it is best to use a Top-Down, a Bottom-Up or Blended approach for your Operational Budgets. Ask yourself: How will your Budget be used as a Control Measure? How will your Budget be used to judge Company, Management and Key Employee Performance? Your Budget is a valuable tool to use for Employee Management, Education and Delegation; Managerial and Executive Goals. For a detailed explanation of Operational Budgets and an Example Budget Format, Please refer to ABC Business Consulting Comprehensive Business Planning Workbook.
8 Sales Forecast: Based upon your developed Sales Strategy and Programs, along with your One Year Operational Budget, develop a Five Year Projected Sales Summary Forecast. This Forecast, in turn, will be used to develop your Detailed Profit & Loss Statement in the Financials Section of your Business Plan. If you are an existing business, be sure to highlight your Historical Sales Trends going back three years. It is important to show how you will achieve your Annual Sales Volume Goals, and the Assumptions used to develop the Sales Forecast. What Growth Rates are you projecting and expecting for your most Vital Products and Services? What are the major driving forces behind the Forecast? Is your Sales Forecast believable? What risks are involved? It is very important to show how your Sales Forecast relates to your Market Analysis, Target Market Segments, Sales Strategy and Marketing Strategy. This ensures your Marketing Plan is a direct influence on your Strategic & Sales Plan, resulting in a Synergistic and Focused Company-Wide Strategy. Please see our Business Plan Workbook for more details and an example Sales Forecast format.
9) Milestones Table: Provide your Future Company Goals, Milestones and Strategies, along with your Marketing and Sales Program rollouts. For each Milestone Event provide: Quantitative and Qualitative Descriptions; Start and End Dates; Budget Numbers; Manager and Department Responsibilities. During the Milestone Table Development, it is important to answer the following key questions:ü What are the Critical Checkpoints as your Business develops?ü What specific Milestones will mark the lowering of risks due to the increased viability of your Company? ü If you need to deviate from your Plan, can your resources surmount these plan variations? What contingencies are built into your Strategic Plan?ü What Systems are in place to gauge your Company’s progress in achieving the prescribed Milestones?ü How are your Milestone Analysis & Goals an integral part of your day to day Management and Planning Process?For a detailed example of a Milestone Table / Milestone Analysis & Goals, please refer to the ABC Business Consulting Business Planning Guide and Workbook.
10) Control Mechanisms: What Mechanisms for Control of each critical Skill and Resource are available to you? Is direct ownership necessary for your Resources and Skills or can they be Outsourced and at what cost savings? How can you build upon Incentives for Cooperation with your critical Resource and Skill Providers; what are the Benefits? These are just some of the questions to address when identifying Control Mechanisms for your Strategic Plan’s Resources.
11) Strategic Planning Advisors: Strategic Planning is such an important part of running a Successful Business, we highly recommend to retain a competent team of Professionals, Advisors, Experts and Consultants. An Experienced Business Consultant can be a very important part of your Strategic Planning Team, ensuring your Strategic Plan is not just effectively developed, but most importantly, effectively implemented through out your Company Operations. After your Strategic Plan is implemented, an Experienced Business Consultant can also help you ensure the Strategy stays on track, reaches it’s goals and / or is adjusted as necessary due to market changes and unforeseen problematic events. In conclusion, a Successful Strategic and Sales Plan starts with your Products and Services Development, then moves into your Marketing Analysis and Plan Development; this in turn, is a direct influence on your Company’s Strategic Plan. Flow Charts showing these important development steps and their relationships:
Products & Services Development => Market Analysis & Segmentation => Market Trends => Market Growth => Competitive Analysis, Positioning & Edge => Marketing Strategy: Positioning, Pricing, Promotion & Distribution Strategies => Marketing Strategy Profit & Loss Projection => Marketing Programs = An Effective Marketing Plan.
Marketing Plan => Strategic Potential Problems & Risk Analysis => Company Strategies, Strategic Tactics & Strategic Programs => Sales Strategy => Sales Programs & Alliances => Company Operating Budget => Sales Forecast => Milestones & Control Mechanisms = Successful Company Strategic & Sales Plan.
Company Strategic & Sales Plan => Company Profit & Loss Statement Projections = Believable Financial Forecasts.
For more help in developing an Effective Marketing Plan, a Successful Strategic Plan, Product & Service Development, along with Comprehensive Business Planning, please see the ABC Business Consulting Comprehensive Business Planning Guide & Workbook.
About the Author
This Business Success Strategies Blog is written by Frank Goley, the ABC Business Consulting Chief Business Consultant, who has over 20 years experience helping companies start, grow, turn-around and succeed.
Visit the Business Success Articles for more of Frank’s “how to” business success articles covering topics like Business Planning, Business Management, Financial Management, Growth Strategies and Business Finance.
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Copyright 2010, ABC Business Consulting, LLC
Posted in Business Strategic Planning.