by Neil Friedman
The business plan is your statement of purpose for your business. You can’t forget the reason to be in business.
Every football coach tries to devise a winning game plan. Even the best athletes will fail if they don’t have a game plan that is designed to maximize their strengths and minimize their weaknesses. Concurrently, that game plan must take full advantage of an opponent’s weaknesses and make every effort to negate their strengths. In the business world, the best game plan (business plan) coupled with superior execution will deliver a winning effort—a profitable and growing enterprise.
A business plan is your roadmap to a viable and profitable business. Too many view it merely as a document to acquire an investor or financial institution to fund their dream, but if it is properly used, it can be the difference between success and failure. There is a reason why so many preach that it is an important part of your success, so don’t neglect it. Used as a tool in your company, a business plan should be a frequently utilized document that helps keep you on track and headed towards the goals you have set.
The business plan is your statement of purpose for your business. Simply stated, the purpose of any business is to make money. A goal of any business is to not only grow sales, but more importantly, to grow net profit. A successful business is a well-managed company that has a preplanned profit. No business can exist over the long term without consistent and growing net profit. Therefore, you shouldn’t increase sales without growing profit. It is far easier to manage a million-dollar business making $100,000 net profit than it is to manage a multi- million-dollar business making that same $100,000.
Business is based upon providing a quality service and product to customers. Most business owners are typically not taking advantage of all the available customers in their service area who are seeking a quality company that keeps their promises and charges a fair price for reliable work.
The lifeline of any business is the energy and commitment that its employees display on a daily basis. A business cannot prosper without the energy and commitment necessary from all its employees. If you cannot tell someone specifically what you expect from them, then you cannot expect specific performance from them. Planning, projection (allocation) and measurement are invaluable tools and are required in any business.
Accurate information and measurements are also mandatory for any business, as they are vital to success. The operations of a business must be measured, evaluated and controlled. Knowing the value of the products and services offered is vital to the health of any company. How can a profit be made if each item in the product mix doesn’t have a known breakeven point and preplanned profit?
Members of a business have a responsibility to themselves and to the company. In addition, the business has the right to be run as an efficient and profitable company so that the employees can be taken care of now and in the future.
If the previously mentioned statement of purpose is addressed in your business plan and the plan is followed, you will be successful. Therefore, it is important to create a business plan and use it.
Included in a business plan should be a specific marketing strategy. You know what you want to do to make money, but you must find those who will pay you to do it. This is where your marketing plan comes in. The marketing plan is a process and, just like any process, you have to start somewhere, but where? How about at the end? To get where you want to be, you have to know where you are going. So where are you going? What is your goal? Where do you want to be in five, 10, 15 or 20 years?
After establishing a goal, the next step in the marketing plan is to understand where you are at this point. What is the current state of your business? Is it a leaking rowboat or a luxury cruise ship? If you must transform that leaky rowboat into an efficient ship, then the process will take more time and be more laborious. Getting started is easier once you have an understanding of the current state of the business. Simply start with a goal. The route to the goal is what the sales and marketing plan will decide. If you have any doubt about the goal, straighten that out first.
It is extremely important to note that if you currently have no goal, you need to set one. This is the end toward which all your effort is directed. The route to the goal must be dictated by the product or service provided. Determine who needs or wants the product or service that is to be provided. Finally, determine how to “build a better mousetrap” by becoming the best in your service area.
It is important not to shortchange any step of this process. If you do, it may take longer to complete the project as you find that incomplete research simply will not suffice. You must have the tenacity to perform a documented and regimented routine to have a marketing plan that works — and that plan takes a considerable amount of work. The following steps must be taken in the development of a plan. This is not a roadmap for developing a sales and marketing plan, but a brief outline of the process.
Review and Assess
- First, analyze the company (an objective look at the strengths, weaknesses, opportunities and threats facing the company). Review how well you actually do what you are in business to do. Analyze what you have been doing to market your products or services.
- Review the major functions within the company and those companies that provide services to you.
- Review the sales process, sales trends, delivery of your products or services and pricing. Look at the results for your company and how you stack up against your competition.
- Assess the company’s market reputation.
- Within the business and target market, make sure that the positive and negative opportunities are reviewed and assessed.
With the help of your sales staff, determine where you are targeting your sales effort. What are the markets and objectives and who are the decision makers?
Plan the strategies that position your brand to effectively dominate the market. Every company has a brand or brand name whether they know it or not. Can you accurately and precisely define your brand?
Set the target for an effective communication policy.
Establish or review and validate or change the following:
- The product or service name;
- The product packaging;
- The product or service pricing;
- The method of distribution;
- The method of selling;
- Promotion and event policy and planning;
- Advertising themes and possible media to be used including Internet;
- Merchandising methods and policies; and
- The handling of public relations for positive and negative events.
Establish an advertising/marketing/sales budget, methods to analyze its effectiveness and the timetable for it.
Put the plan into effect.
Evaluate the plan and provide systems to monitor and, if necessary, to alter the plan.
Business is a continuous series of processes. It doesn’t matter if the process is marketing your brand or making factory production flow as efficient as possible or controlling accounts receivable. All must be managed and be part of a planned business. Having a plan and properly executing it can be the difference between success and failure.
Developing a business plan takes time, considerable thought and decisive action. Once again, it can spell the difference between success and failure. This is not a one-day exercise—it is your company.