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Succss_Tip_Business_Plannning_101
| Succss Tip: Business Plannning 101
SELLING YOU ON YOUR BUSINESS You’ve probably heard it said that
a business plan is a selling document. While it is very true
that your business plan will be an invaluable aid to you in
selling your business to others, you may not have considered
that it can be a great way to sell or re-sell YOU on the
business you have started. By examining how your ideas and
products fit into the competitive environment, you can get
excited about the potential of your business and become
reinvigorated. A business plan can also be a good way to
determine new directions your business should go. As you delve
into the marketplace, examining your competitors and their
products, and consider market trends, you may see new avenues
for your business to follow and may even discover a potentially
hot market niche that isn’t being filled. This could lead to a
whole new direction for your company and vastly expanded
revenues. By contrast, the discovery process you follow to
develop your business plan might show you that the path you
thought you wanted to follow isn’t viable, saving you months and
years of frustration and a lot of cash! It may help you see a
different path you need to follow and/or encourage you to
concentrate on a different aspect of the business. HOW DOES A
BUSINESS PLAN SELL YOUR BUSINESS? In order to succeed in today’s
challenging business climate, you will need to exploit every
opportunity that comes your way. The only way to do this is to
understand where the opportunities are and put your business
into a position to pursue them. A business plan makes this
possible. Just as importantly, your company’s business plan is
seen by others as your company representative. It tells
interested parties who you are, what you do, how you fit into
the crowd, where you’re going, and how you’re going to get
there. Your business plan can help you with the following: · To
obtain bank financing: Bankers are understandably nervous about
risking money on new endeavors, and there are many more
companies out there asking for money than there is money to be
distributed. Companies that have a written business plan have an
edge because banks understand the importance of formal planning.
· To acquire investment funds: To investors, a business plan is
a screening device. If they like what they see in your business
plan, they’ll take the next step and talk to your executives. ·
To arrange strategic alliances: A business plan is often the
only tool an established company has to assess whether they want
to do business with a company that is not yet established. · To
obtain large customer contracts: Large customers are reluctant
to commit funds and take business risks to do business with an
unknown entity. Your business plan helps them understand that
you are well grounded and know what you’re doing. · To attract
quality employees: A well designed business plan allows
potential, key employees to get a comfort level with your
company so they will be willing to commit their professional
future to you. · To complete mergers and acquisitions: Companies
that are looking to buy other companies look closely at these
companies’ business plans before deciding which ones they want
to pursue. THE RESULTS OF NOT CREATING A PLAN CAN BE A KILLER
FOR YOUR BUSINESS! Your business plan is an invaluable tool for
helping you understand your business environment so that you can
optimize your revenues. Through this important document you will
come to understand your competitive environment. You will also
be able to determine how you should market your product and what
avenues your sales efforts should pursue. The negative results
of not performing these exercises can be overwhelming if you are
working under limited resources. The following case study, based
on a real company whose name has been changed to protect the
innocent, is just one example of the many costly mistakes you
can make if you don’t create a plan and stay with it. Case Study
– The John Doe Company The John Doe Company didn’t have a Sales
and Marketing plan. They had no go-to-market strategy and didn’t
even know who their target market was. The sales and marketing
function was represented by an individual who didn’t have any
sales or marketing in her professional background. Not having a
comfort level in an area where she was not skilled, and working
under no specific plan, this individual was subject to whim and
fancy in her marketing decisions. The unfortunate result? The
company attended several trade shows a year, spending thousands
upon thousands on travel, show fees, and lost man hours for
something that brought them no actual revenues and no real
leads. In addition, the company instituted expensive giveaways
at these shows, such as diamonds, which brought them nothing in
return. This VP with no sales and marketing plan also lost the
company thousands of dollars advertising in magazines that did
not attract the company’s target market and spent untold
thousands flying around the world to pursue customers from leads
that had not been qualified. Since the leads had not been
qualified, many of these expensive customer visits were with
customer representatives who had no intention of buying, had no
money earmarked to buy, and/or who were not even empowered to
make a buying decision. The John Doe Company’s lack of a sales
and marketing plan, along with having the wrong individual in a
position to make unguided decisions, has most likely cost the
company more in lost revenues and squandered resources over the
3 years they’ve been in business than they’ve made over that
same period of time.
Although the above case study could be considered a worst case
scenario, it is fairly representative of the types of problems
companies encounter when they have no sales and marketing plan.
YOUR BUSINESS PLAN CAN SUBSTANTIALLY REDUCE BUSINESS RISK A
business plan that is truly a working document can substantially
reduce business risk for your company. Day to day decisions
should be run through the filter of your business plan to
determine what fits and what doesn’t. Your plan can validate
issues that fit within it, and should be altered when necessary
to allow for new opportunities that may stretch the parameters
of the plan but support your overall goals. The result is that
you will make “strategic” decisions rather than pursuing costly
whims or suffering under an “idea of the day” mentality. In
addition to pro forma financial elements, the business plan
foundation is cemented with solid sales and marketing elements
to guide you toward more revenues and higher profit. It should
identify routes to market for your optimum sweet spot, and show
you when to hire key personnel, and who to hire, saving you from
costly hiring mistakes. GETTING STARTED: ANALYZE YOUR BUSINESS
PLAN TO BECOME MORE COMPETITIVE The first step in becoming more
competitive is to perform a complete, objective analysis of your
business plan. It will be extremely difficult for you to view
your business dispassionately and perform an objective
assessment. For this reason, you will probably want to look at
contracting with outside professionals to perform your
assessment. These industry experts have decades of corporate
experience in building successful sales and marketing strategies
to help them understand your challenges and how to address them.
An outside consultant can provide you with a comprehensive
analysis that culminates in a gap analysis and steps to address
the holes in your overall business plan. Once you have this
assessment and know where the gaps are, you can begin to build a
plan that will enable your company to effectively win against
any and all competitors, big or small. You can either perform
the steps to execute the plan internally, or hire outside
expertise to perform those functions that you don’t have the
knowledge and experience to perform. This straightforward and
easy to implement process will get your company on the fast
track to more sales. KEY BUSINESS PLAN ELEMENTS Key elements of
your working business plan include the following: · Executive
Summary: vision, mission, company objectives, keys to success ·
Company Overview: focus, current product/service description,
future products/services, positioning of products/services,
business concept, current situation, key success factors ·
Organization: stakeholders, board members, employees, strategic
advisors · Operations: key personnel, organizational structure,
human resources plan, product/service delivery, customer
service/support, facilities · Market analysis: the overall
market, anticipated changes in the market, market segments,
target market and customers, customer characteristics, needs,
and buying decisions · Competitive analysis: key competitive
capabilities, key competitive weaknesses, competitive evaluation
of products/services, industry overview, nature of the
competition, changes in the industry, primary competitors,
competitive products/services, opportunities, threats and risks
· Sales and Marketing Plan: go to market strategy, competitive
overview, sales tactics, marketing plan, channel plan,
advertising plan, promotions/incentives, publicity, trade shows,
partnerships and alliances · Financial Overview: short and long
term views of the company’s situation/needs, assumptions and
comments, starting balance sheet, profit-and-loss projection,
cash flow projection, balance sheet projection, ratios and
analyses YOUR BUSINESS PLAN IS A WORK IN PROGRESS If you created
a business plan when you started your business but have not
taken the time to update it over the months and years, you are
not much better off than if you’d never created one. Business
plans are meant to be working documents, and will become stale
and useless if they aren’t updated. As stated before, a business
plan is a selling document. It sells your business and its
executives to potential backers of your business, from bankers
to investors to partners to employees. Early stage companies
need effective business plans to attract investors. All
companies need an effective plan to guide the business.
Companies that lack effective and updated business plans often
suffer from unrealized revenues, lost opportunities, significant
competitive losses, reactive hiring decisions, and poor profit
and loss financial performance. Rather than being a working
document that guides your business, an unrealized business plan
can become a nagging item on your strategic “to do” list.
Ideally, you should maintain a workable business plan to
determine where the company needs to go, warn of possible
roadblocks, develop contingencies, and keep the business on
track to reach planned goals. LET YOUR BUSINESS PLAN WORK FOR
YOU Sales and Marketing Pros can guide you through the process
of revising or developing your overall business plan. SMP’s
Opportunity Maximizer Workshop performs a full-scale assessment
of your business plan, including your sales and marketing
infrastructure. The workshop provides you with a gap analysis
and steps to close the identified gaps. SMP also offers part or
full time Advisory Services from executive level business
professionals, sales and marketing experts, business writers,
and a full array of document, graphic, and website support;
allowing you to just pick up the phone and request help as you
need it. SMP is ready to work with you and your team to package
your business so that it embraces the future. With creative
planning and packaging, you will win the in marketplace, at both
the investor and the customer levels. Contact Bob Decker at
952-955-1200 or visit www.salesandmarketingpros.com for more
information.
About the author:
Mr. Decker is the Principal of Sales and Marketing Pros (SMP),
LLC, founded in 2003 to foster venture incubation, market entry,
and growth services to technology and services companies. Prior
to founding Sales and Marketing Pros, Mr. Decker was a Senior
Sales and Marketing Executive with IBM Corporation. He holds a
Bachelor in Business Administration Degree with a marketing
major from the University of Notre Dame.
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