Business Planning (Part ll)
The Seven Steps of Common Sense Business Planning
DEFINE THE LONG-TERM OBJECTIVES OF YOUR BUSINESS
* What do I want the business to be like in 3-5-10 years?
* What sales volume?
* What profitability?
* What reputation?
* What size in terms of bricks and mortar, personnel, products and / or services?
* What net worth and capital structure?
2. STATE THE SHORT-TERM GOALS LEADING TO ACHIVINGTHE LONG TERM OBJECTIVES
Unlike long-term objectives, which are vague and defined in qualitative terms, short- term goals should be precise, objective, and measurable. State them in terms of units, time and dollars. Financial projections give more definition to the short-term goals. Make the goals explicit (measurable and time-bound) and begin to set strategies for achieving them.
3. SET MARKETING STRATEGIES IN LINE WITH GOALS AND OBJECTIVES
Now translate the goals, which should be aligned with your objectives, into sales of actual goods and /or services. If sales are not made, projections and other plans fall apart; operating efficiency is valuable only if there is a point to being efficient.
For business planning purposes, you need to determine what you can most profitably sell-including to what kind of customer, where, and in what markets. Keep the goals and objectives of your business in mind, and you will avert being shut out of some markets you want to be in, and may discover new applications and other opportunities.
Make your marketing plan precise!
- Do you have a marketing plan?
- What’s the advertising budget?
- Do you have a strategy for distribution?
- Do you have a strategy for expansion?
- Can you afford to be in multiple markets?
- Do you know your competitors and can you learn from them?
The first three steps of the business plan set goals and objectives and strategies for attaining them. The next three steps test those strategies.
4. ANALYZE AVAILABLE RESOURCES: FINANCIAL, PERSONNEL, and TECHNOLOGY
The most severe limitations on plans are, in decreasing order of importance, management and skilled personnel, other personnel, technology, material resources and money. Contrary to popular belief money alone is not the reason for not achieving goals.
Ask yourself, as you review your strategies, whether you have the resources available to make those plans work. Take a management inventory, If you rely on skilled technicians or professionals, include them in your planning. Other resources (except financial) have to be considered in light of both the personnel and rough plans established up to this point. Your marketing plan requires that products be available in enough quantity (and quality) to satisfy your market and those products must priced competitively.
For planning purposes, a personnel inventory is critically important. Good people can make an inadequate plan succeed. Inadequate people will prevent a good plan from succeeding. The ultimate test of your ability to manage your business is how well you understand and use all of the assets available to you.
Nick Callazzo has more than 30 years of experience consulting to banks, insurance companies and financial institutions as well as coaching executives to help them improve their personal and professional performance. In 1985, Mr. Callazzo founded Resource Specialists, a consulting group that focuses primarily on helping companies identify behaviors that impeded either organizational or personal success. A former U.S. Marine, Mr. Callazzo is currently working with FastTrac’s Entrepreneurial program for veterans in order to help them improve their business acumen and, possibly, their profit margins.