|
Info You are currently browsing the archives for the Business Planning category. Categories
Latest Postings
Links
Archives
|
Archive for the Business Planning CategoryThe Financials Section of a Business Plan8. September 2010 by Frank Goley, Business Consultant for ABC Business Consulting.
Lay the Foundation with a Good Strategic Plan If you develop your Strategic Plan effectively, completing the Financials should not be difficult. The principal reason why business owners have such a hard time with the Financials Section of a Business Plan is often due to a cursory job on their Strategic Planning (as well as other important business plan sections). Financial Projections are not believable chiefly because a suitable, well developed Strategic Plan wasn’t accomplished. Guess what lays the foundation for a successful Strategic Plan? The proceeding section, the Marketing Plan. As stated previously, the sections and the order of the sections in a business plan are very important because each section builds on the previous section, the culmination of which makes for certain data from which solid Financial Projections can be made. Types of Financials You should have two sets of Financials, simple and detailed, as well as, conservative and best case. The following types of financials are typical for a Business Plan: Ø Cash Flow: Monthly basis for 12-36 months. Yearly and Quarterly basis for 3-5 years. Ø Income Statement: Monthly basis for 12 months. Yearly and Quarterly basis for 3-5 years. Ø Balance Sheet: Yearly and Quarterly basis for 3-5 years. Budgets for Planning and Control Another very important Financial in addition to the three prescribed Financials, is the Budget. Budgets are used principally for two purposes: Planning and Control. A Budget matches short term targets with long term Strategic Planning, while providing an indication of problems ahead. A good Budget system will indicate when Expenses are heading over Budget and there is sufficient time to correct the problem. Budgets are often developed during the Strategic Planning Process. Rolling Budgets We like Rolling Budgets which look ahead 12 months on a monthly basis, and it budgets an additional Quarter at the end of each Quarter. This way, you always have a 12 month continuous Budget Outlook. A Budget should also be flexible so that you can separate the effects of variations between Actual and Estimated results. Lastly, a Budget is a tool to Evaluate your Business Units and Management’s Performance. Needless to say, assembling and actively managing a good Budget requires the input of your entire organization. Financials Relate It is important to understand that your Financials relate to each other when building them (a reason why Financial Software Programs are so beneficial). There’s a lot of back and forth between the Income Statement, Balance Sheet and Cash Flow Statement. The Cash Flow Statement is the most important Financial for many reasons but principally because it shows in detail how much cash is necessary to finance and grow your company. Projection Period The projection period differs and depends for a particular company, venture or project. For instance, a large scale Real Estate development project’s Cash Flow could be 5+ years and 60+ months depending on the length of the project build out. Also, Real Estate development projects require more Financials than detailed above. Typically, a Construction Cost Analysis and Cash Flow, Schedule of Real Estate, Construction Cost Schedule and so forth are required and useful. Real Estate Development Financials are developed through a Loan Package and transferred to the Business Plan Financial section, so consult how to properly package a loan in order to learn more about these project specific Financials. Assumptions A very important element of the Financial Section is the Assumptions area. This details the assumptions you have utilized in constructing the financials. You should also list the various calculations and formulas used in your financials since those formulas can be company, deal or project specific. Financials should also include Return of Investment / Return on Equity calculations and the assumptions used in those calculations. Realistic Financials Your Financials need to be believable and realistic. If anything, they need to be conservative. Too often we see extremes of too few numbers or too many numbers. If you build out your Financials as a direct result of your Strategic Plan, this process results in numbers that are realistic and achievable. An option is to build two sets of Financials, conservative and a little more aggressive. We find if you have truly conservative numbers, you will often exceed your Plan, which is a great Psychological boost for any company in any stage of development. Example Template for the Financials Section of a Business Plan 1) Sources and Uses of Funds 2) Financial Strategy 3) Capital Equipment Valuation 4) Company Collateral 5) Assumptions 6) Financials 7) Valuations 8 ) Financial Analysis 9) Budgets 10) Exit Strategy 11) Harvesting Value Strategy 12) Venture Risk 13) Effects of Investment and Finance on Cash Flow 14) Tax Strategies More Help Please see my articles on Business Financials for more details in this area…
Posted in Business Planning, The Business Success Blog | Print | No Comments » The Strategic Plan Section of a Business Plan7. September 2010 by Frank Goley, Business Consultant for ABC Business Consulting.
The Strategic Plan is a Business Plan’s Implementation Tool The Strategic Plan puts the Marketing Plan into action. The Strategic Plan will show how to implement the Marketing Plan and a company’s Business Plan. The Strategic Plan is about action and implementation. It also details your Sales Forecast for each particular product or service. The Strategic Plan translates what will be the result of the Marketing Plan, and how it will be implemented and achieved. The Sales Plan The Strategic Plan takes the vast amount of marketing information and research and puts it into a clearly defined Sales Plan. It is very important that a Strategic Plan is believable and achievable. It works out the “kinks” and road blocks in your Marketing Plan and illustrates how to overcome Competitive Gaps. Strategic Management The Strategic Plan also provides a process for Strategic Management, Strategic Auditing and Strategic Reassessment. The end product not only implements The Company’s Strategy, but also it provides measurable performance, control functions, corrective actions and reassessment when necessary. It is a top down and bottom up approach, completely integral with your Company’s Operations, from the Vision and Leadership of the CEO, to Management’s implementation of the Strategy, to the Sales and Operations units of the company. It provides a Company-Wide Strategic Vision, Focus, Structure and Discipline, while providing an atmosphere of learning and awareness, with a process for identifying deficiencies, and in turn, fixing those problems. Outline of the Strategic Plan Section of a Business Plan 1) Company Objectives 2) Potential Problems and Risks 3) Risk Analysis 4) Company Strategies, Strategic Tactics and Strategic Programs 5) Sales Strategy 6) Sales Programs 7) Strategic Alliances and Joint Ventures 8 ) Operating Budget 9) Sales Forecast 10) Milestones 11) Control Mechanisms For more information on developing a Strategic Plan and Sales Plan, please see my article: Developing A Successful Strategic Plan.
Posted in Business Planning, The Business Success Blog | Print | No Comments » Writing the Marketing Plan Section of a Business Plan31. August 2010 by Frank Goley, Business Consultant for ABC Business Consulting.
First Develop the Products and Services Section of the Business Plan Developing, writing and implementing a successful Marketing Plan starts with solid Industry and Market Analysis and concludes with an implementable Marketing Strategy and Marketing Programs. A Marketing Plan is not developed and implemented independently; rather, it should be developed in close coordination with your Business Plan Products and Services Section and ultimately implemented through your Company’s Strategic Plan and Sales Plan. The Marketing Plan Section of a business plan is typically developed after the Products and Services Section of the plan have been developed. This gives the marketing plan process a head start on developing a cohesive and competitive marketing strategy and program. What The Marketing Plan Does
How Your Products and Services will be Positioned The Marketing Plan explains in great detail how your products and services will be positioned in the market, all supported by detailed, believable market research. The Marketing Plan carves out your target market niches and develops effective Marketing Programs, along with a Strategic Marketing Plan. Example Format of the Marketing Plan Section of a Business Plan 1) Industry Overview 2) Industry Distribution 3) Market Segments Description 4) Market Segment Needs 5) Market Segmentation Strategy 6) Market Trends 7) Market Growth 8) General Nature of the Competition 9) Customer Choice Factors 10) Product and Service Competitive Comparison 11) Competitive Analysis 12) Competitive Positioning 13) Competitive Edge 14) Marketing Strategy 15) Marketing Programs For more information and a step by step guide on developing a Marketing Plan, see the ABC Business Consulting Business Plan Workbook.
Posted in Business Planning, The Business Success Blog | Print | No Comments » The Products and Services Section of a Business Plan30. August 2010 by Frank Goley, Business Consultant for ABC Business Consulting.
Your Competitive Advantages and Disadvantages The Products and Services Section of a Business Plan is the “meat” of the plan. By the time you get to this section, you should have developed the Company, Management and Operation Sections. It is now time to describe in detail your company’s Products and Services. This section also contains information on your competitor’s products and services. One of the most important aspects of this section is to explain why your products and services are unique. This includes your competitive advantage. On the converse, this section states where you have weaknesses in your product and service line-up. Start with a Resource Audit A Resource Audit is an honest self-evaluation of your company. In this analysis you identify your strengths, weaknesses, opportunities and threats (SWOT), which will be considered in your Marketing Plan and addressed in your Strategic Plan. In this section you develop your product and service price points, features and value to be fully exploited in the Marketing Plan. Customer identification, analysis and segmentation starts in this Section to be later developed in the Marketing Plan. The Products and Services Section Sets Up Your Marketing Plan This initial analysis of your products and services sets up the success of your Marketing Plan. It lays the foundation to develop an effective Marketing Strategy. Spend time on your competitive advantages and disadvantages, your price points and initial SWOT analysis in this section and developing your Marketing Plan will be much easier and much more effective. A Sample Format for the Products and Services Section of a Business Plan 1) Products and Services Description 2) Awards, Honors & Achievements 3) Case Studies 4) Product and Service Mix and Price Points 5) Product and Service Analysis 6) Life Cycle 7) Production Strategy 8 ) Research and Development Strategy 9) Space Utilization 10) Departments Descriptions 11) Future Products and Services 12) Effects of Technology 13) Computerization Requirements 14) Company Sales Literature and Brochures 15) Internet Strategies 16) Electronic Ordering and Fulfillment 17) Inventory Method and Management 18) Regulatory Compliance 19) Product and Service Liabilities
Posted in Business Planning, The Business Success Blog | Print | No Comments » The Company, Management and Operations Sections of a Business Plan27. August 2010 by Frank Goley, Business Consultant for ABC Business Consulting.
In an eight section Business Plan, the Company Section and the Management & Operations Section come in as sections 2 and 3 respectively. These two sections set up the meat of the business, the Product and Service Section, which is typically Section 4 of a business plan. These two sections of a plan are critically important as they speak to the quality of how a company is set up and run, as well as, the quality of the team running the company, which will ultimately spell success for a company. Many think the Marketing Plan section and the Products and Services section are the most important in a business plan, but without sound company management and operational management, the best products and awesome marketing can not make it successful. It is the team and how it runs a company that makes it successful. It is the heart of a company. A Company’s Management Team is of Paramount Importance No matter how good the company’s Products or Services, it can not be successful with out the solid building blocks of the Company, Management and Operations Sections of its business plan. I usually combine Operations with the Management section but it can stand on its own or be part of the Company Section. Either way, it is important to establish the connection between Company Structure, the Management Team, Management Objectives and the Operational aspects of the company. It is a very important and necessary triangle to plan well for. The Company Overview Section The Company section of a Business Plan speaks to all the pertinent details of your particular company. This section comes first in the Business Plan (after the Executive Summary) as it serves as an introduction to the necessary details and background of your company. For instance, the Company Section could contain this type of information…
Suggested Format for the Company Overview Section 1) Company Establishment 2) Company History 3) Company Structure 4) Company Ownership & Legal Formation 5) Facilities & Locations 6) Products & Services Overview 7) Trends Affecting the Company 8 ) Customers 9) Competitive Strategy 10) Company’s Strengths & Weaknesses 11) Company Performance 12) Company Finance 13) Company Assets Management and Operations Section You can have the greatest business idea or concept but lack the people to execute the plan. Therefore, the Management Section of the Business Plan is the most important element of the plan and often scrutinized as such by finance sources, customers and your Business Plan audience. This section builds on the Company Section explaining in detail…
Example Format for the Management and Operations Section 1) Employees 2) Management Philosophy 3) Management Requirements 4) Management Gaps 5) Organizational Structure 6) Founders / Directors / Principals / Management / Key People 7) Management Administrative Procedures & Controls 8 ) Decision Making Teams & Processes 9) Company and Management Objectives, Goals and Strategy 10) Compensation Structure 11) Human Resources 12) Outsourcing 13) Consultants and Advisors 14) Products and Services Production and Delivery 15) Distribution System 16) Order Turn Around 17) Suppliers and Vendors 18) Service Standards 19) Customer Service Plan 20) Quality Control 21) Costs Minimization 22) Technology 23) Production and Operation Advantages 24) Capacity 25) Safety Procedures 26) Inventory 27) Environmental Considerations
Posted in Business Planning, The Business Success Blog | Print | No Comments » |
