Your SlideShare is downloading. ×
0
Home Blog Map Help New Price List Buy+Use Privacy Contact
Financial
Projection
Software
Cashflow
Forecasting
Software
Busi...
Click here to see feedback from past users of this planning
tool (opens in a new window) and click here to see a
sample pl...
managers and entrepreneurs to think strategically and act operationally - see
Devising Business Strategies for further ins...
Be written down.s
As the precursor to developing a strategic plan, it is desirable to clearly identify the current status,...
factual way the purpose and activities of the business in terms of operations, (unique)
characteristics, functions, custom...
Intel's original plan, written on the back of a menu (view copy), is an excellent example of
a hard statement:
The company...
Use SWOTs to help identify possible strategies by building on strengths, resolving
weaknesses, exploiting opportunities an...
3. Use Hindsight when Strategic Planning
Statements on vision, mission, objectives, values, strategies and goals are not j...
Sales break down into sales values, units, prices, discounts, commissions, bad debts and so on.
Net income is derived by d...
The moral in this case is that there are no major customers due to under-capitalization !
Also have a look at the discussi...
The company's own industry where structural changes may be occurring
(Size and segmentation; growth patterns and maturity;...
6. Simple & Short Strategic Plans
Notwithstanding that "battles are often lost for want of nails", a company rarely succee...
Need More Assistance? Have a look at:
Exl-Plan Multi-year Financial Projections (with
Excel)
Cashflow Plan Short-term Cash...
8. Strategic Planning Worksheet
To start using the worksheet below, copy the headings marked in red onto a blank sheet of ...
4. Statement of corporate values and beliefs:
(Covers employees, customers, environment etc. etc. Maximum of 150 words)
5....
If preparing a business plan, look at Free-Plan. This is a free Business Plan Template for Word (48
pages) and a complemen...
Business Ideas
Business
Strategies
Strategic Plan
Business Plans
Business Plan
Insights
Financial
Projections
Cashflow
For...
Home Blog Map Help New Price List Buy+Use Privacy Contact
Financial
Projection
Software
Cashflow
Forecasting
Software
Busi...
Free Online Strategic
Planner
Free Online Strategic Planner for creating a 3-page
strategic plan based on the structure us...
Underestimating
start-up costs
(for operations
& capital
expenditure).
Misjudging the
size or growth
of the overall
market...
Given that reasons for failure are often both simple and clear, it should (in theory)
be possible to reduce the possibilit...
3. Clarify Existing Business Strategies
In planning new strategies for a business, it is essential to define its current (...
4. Look into Future SWOTs for Strategies
An effective SWOT (strengths, weaknesses, threats & opportunities) analysis is a ...
The two main approaches to strategic development for an established business can be classified as
either organic or quantu...
is building strategies from scratch without the benefits of any market position, momentum or
pre-existing strategies.
Thre...
Increase skills or productivity
Scale back or close down
Possible future directions of main activities (Xs signify desired...
Minority/majority stake
Joint venture
Consortium membership
Merge/demerge
Acquisition
Sponsor start-up
Top of Page
7. Comp...
......
......
......
Need to Go Into More Detail with your Strategic Plan ?
Have a look at:
Plan Write Expert Business Pla...
Getting New Business Ideasq
Developing a Strategic Business Planq
Making Financial Projectionsq
How to Write a Business Pl...
Need to Go Into More Detail with your Strategic Plan ?
Have a look at:
Plan Write Expert Business Planner: Combined busine...
Other Items:
- Bad Advice
- Quotations
- Money, Money
PlanWare, Invest-Tech Limited, Ardmeen Park, Blackrock, Co. Dublin,
...
Home Blog Map Help New Price List Buy+Use Privacy Contact
Financial
Projection
Software
Cashflow
Forecasting
Software
Busi...
1. Why Write a Business Plan?
The preparation of a written business plan is not the end-result of the planning
process. Th...
business.
For many, many entrepreneurs and planners, the process of planning (thinking, discussing, researching
and analyz...
2. Start with a Business Strategy
A short strategic plan (2-3 pages) can provide a very useful foundation on which to base...
distribution channels in particular geographic areas". A statement along these
lines indicates what the business is about ...
Programs
The final elements are the Programs which set out the implementation plans
for the key strategies.
It goes withou...
Determine its requirements in relation to the contents and levels of detailq
Map out the plan's structure (contents page)q...
Length & Time-scale for Business Planning
Whilst the sheer length of a business plan may bear no relation to the underlyin...
Section of
Plan
Researched by Written by
Elapsed time
(weeks)
Cost
($)
Priority Key Actions
Further Suggestions for Busine...
The white paper entitled Insights into Business Planning which has been based on the views of
hundreds of people who have ...
Avoid going into too much detail within the plan's body by placing detailed or supplementary material
in accompanying appe...
Get Strategic Planning Help:
Free Online Strategic Planner for creating a 3-page strategic plan.
See Also: Expert tools fo...
Plans within the Business Plan Guide for more info.
10. Management & Administration (2-3)
Introduce the proposed managemen...
business strategies and managing working capital. Finally, you should review the contents of the
Business Plan Guide.
Need...
Assess competitors' positions and possible responses realistically.
Be realistic about sales expectations, profit margins ...
write the summary last.r
Get a qualified outsider to review your plan in draft form and be prepared to adjust
the plan in ...
Business
Planning
Papers
Business Ideas
Business
Strategies
Strategic Plan
Business Plans
Business Plan
Insights
Financial...
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Strategicbusiness
Upcoming SlideShare
Loading in...5
×

Strategicbusiness

5,388

Published on

Published in: Business

Transcript of "Strategicbusiness"

  1. 1. Home Blog Map Help New Price List Buy+Use Privacy Contact Financial Projection Software Cashflow Forecasting Software Business Plan Software Marketing Plan Software Strategic Planning Software Business Plan Guide Business Planning Freeware Online Planning Tools Business Planning Papers Other Items Business Planning Papers Business Ideas Business Strategies Strategic Plan Business Plans Business Plan Insights Financial Projections Cashflow Forecasts Working Capital Raising Finance Other Items: - Bad Advice - Quotations - Money, Money Business Planning Papers: Developing a Strategic Plan Page Contents Introduction to Strategic Planning1. Key Steps towards a Strategic Plan2. Use Hindsight when Strategic Planning3. Effect not Equal to Cause when Planning Strategy4. SWOTs - Keys to Business Strategies5. Simple & Short Strategic Plans6. Using the Strategic Planning Worksheet7. Strategic Planning Worksheet8. Introducing PlanWare9. Copyright & Legal Stuff10. Free Online Strategic Planner Free Online Strategic Planner for creating a 3-page strategic plan based on the structure used in this white paper. Use it to organize your thoughts, structure your ideas and compile a short but comprehensive strategic plan for any size and type of organization. Recommendation: Review the paper on this page before using the planner. Useful Links More Info Develop strategic plan Devise business strategies Write strategic plan See planning surveys Buy planning book View sample plan See Also Get business ideas Write business plan Get planning insights Prepare financial projections Seek planning advice Plan to plan Business plan guide Software Tools Financial Planners Expert Business Planner Strategy Planner Idea Assessor Marketing Planners Free Planners Buy Software Financial Projections Cashflow Forecasts Business Plans Marketing Plans Strategic Plans Strategic Plan Strategic Planning Business Strategy Strategic Planner Mission Statement Vision SWOTs Strategy Development http://www.planware.org/strategicplan.htm (1 of 17) [30-05-2012 7:48:59 AM] Search site !
  2. 2. Click here to see feedback from past users of this planning tool (opens in a new window) and click here to see a sample plan (use back button on browser to return to this page). 1. Introduction to Strategic Planning If you don't know where your business is going, any road will get you there. What is a Strategic Plan? Entrepreneurs and business managers are often so preoccupied with immediate issues that they lose sight of their ultimate objectives. That's why a business review or preparation of a strategic plan is a virtual necessity. This may not be a recipe for success, but without it a business is much more likely to fail. A sound plan should: Serve as a framework for decisions or for securing support/approval.q Provide a basis for more detailed planning.q Explain the business to others in order to inform, motivate & involve.q Assist benchmarking & performance monitoring.q Stimulate change and become building block for next plan.q For inspiration (and a few smiles), have a look at some of the quotations and examples of bad advice included in other pages! A strategic plan should not be confused with a business plan. The former is likely to be a (very) short document whereas a business plan is usually a much more substantial and detailed document. A strategic plan can provide the foundation and frame work for a business plan. For more information about business plans, refer to How to Write a Business Plan, Insights into Business Planning and Free-Plan: Business Plan Guide & Template. A strategic plan is not the same thing as an operational plan. The former should be visionary, conceptual and directional in contrast to an operational plan which is likely to be shorter term, tactical, focused, implementable and measurable. As an example, compare the process of planning a vacation (where, when, duration, budget, who goes, how travel are all strategic issues) with the final preparations (tasks, deadlines, funding, weather, packing, transport and so on are all operational matters). A satisfactory strategic plan must be realistic and attainable so as to allow Strategic Plan Strategic Planning Business Strategy Strategic Planner Mission Statement Vision SWOTs Strategy Development http://www.planware.org/strategicplan.htm (2 of 17) [30-05-2012 7:48:59 AM]
  3. 3. managers and entrepreneurs to think strategically and act operationally - see Devising Business Strategies for further insights. Get Strategic Planning Help: Free Online Strategic Planner for creating a 3-page strategic plan. See Also: Expert tools for Assessing Business Ideas (US$ 229.95) and Evaluating Marketing Strategies (US$ 795.00). See a sample strategic plan - use the back button on your browser to return to this page. Need More Help with your Strategic Planning ? Have a look at: Plan Write Expert Business Planner: Combined business plan tool and expert system to help evaluate and develop your plan. q Quick Insight - Business Idea Assessor: Expert system to help evaluate and improve a new business idea. q Business Insight - Strategy Evaluator: Sophisticated expert system for evaluating, developing and comparing business and marketing strategies. q Basic Approach to Strategic Planning A critical review of past performance by the owners and management of a business and the preparation of a plan beyond normal budgetary horizons require a certain attitude of mind and predisposition. Some essential points which should to be observed during the review and planning process include the following: Relate to the medium term i.e. 2/4 yearss Be undertaken by owners/directorss Focus on matters of strategic importances Be separated from day-to-day works Be realistic, detached and criticals Distinguish between cause and effects Be reviewed periodicallys Strategic Plan Strategic Planning Business Strategy Strategic Planner Mission Statement Vision SWOTs Strategy Development http://www.planware.org/strategicplan.htm (3 of 17) [30-05-2012 7:48:59 AM]
  4. 4. Be written down.s As the precursor to developing a strategic plan, it is desirable to clearly identify the current status, objectives and strategies of an existing business or the latest thinking in respect of a new venture. Correctly defined, these can be used as the basis for a critical examination to probe existing or perceived Strengths, Weaknesses, Threats and Opportunities. This then leads to strategy development covering the following issues discussed in more detail below: Visionq Missionq Valuesq Objectivesq Strategiesq Goalsq Programsq Top of Page 2. Key Steps towards a Strategic Plan The preparation of a strategic plan is a multi-step process covering vision, mission, objectives, values, strategies, goals and programs. These are discussed below. The Vision The first step is to develop a realistic Vision for the business. This should be presented as a pen picture of the business in three or more years time in terms of its likely physical appearance, size, activities, structure, scale offerings etc. Answer the question: "if someone from Mars visited the business, what would they see (or sense)?" Consider its future products, markets, customers, processes, location, staffing etc. Here is a great example of a vision: I will come to America, which is the country for me. Once there, I will become the greatest bodybuilder in history.......... I will go into movies as an actor, producer and eventually director. By the time I am 30 I will have starred in first movie and I will be a millionaire...... I will collect houses, art and automobiles. I will marry a glamorous and intelligent wife. By 32, I will have been invited to the White House. Attributed to Arnold Schwarzenegger who was elected Governor of the State of California in 2003. The Mission The nature of a business is often expressed in terms of its Mission which indicates in a Strategic Plan Strategic Planning Business Strategy Strategic Planner Mission Statement Vision SWOTs Strategy Development http://www.planware.org/strategicplan.htm (4 of 17) [30-05-2012 7:48:59 AM]
  5. 5. factual way the purpose and activities of the business in terms of operations, (unique) characteristics, functions, customers, offerings, sectors/segments, scale/scope/penetration, methodologies, technologies, resources etc. Just answer the questions as to what the business really is and does in qualitative terms. If planning for a startup, base the mission statement on the business as it would be once operational - be realistic and practical rather than aspirational. For example, "to design, develop, manufacture and market specific product lines for sale on the basis of certain features to meet the identified needs of specified customer groups via certain distribution channels in particular geographic areas". A statement along these lines indicates what the business is about and is infinitely clearer than saying, for instance, "we're in electronics" or worse still, "we are in business to make money" (assuming that the business is not a mint !). Also, some people confuse mission statements with value statements (see below) - the former should be very hard-nosed while the latter can deal with 'softer' issues surrounding the business. The following table contrasts hard and soft mission statements. Hard Soft What business is/does Primary products/services Key processes & technologies Main customer groups Primary markets/segments Principal channels/outlets Reason for existence Competitive advantages Unique/distinctive features Important philosophical/social issues Image, quality, style, standards Stakeholder concerns Compare the following statements: Hard Statement Soft Statement X Corp. designs, develops, assembles and markets systems for data base management. These systems integrate its proprietary operating system software with hardware supplied by major manufacturers, and are sold to small, medium and large-sized companies for a range of business applications. Its systems are distinguished by a sophisticated operating system, which permits use without trained data-processing personnel. Our mission is to enhance our customers' business by providing the very highest quality products and services possible. Our customer support strategy is based upon total, no-compromise customer satisfaction and we continually strive to offer a complete package of up-to-date value added solutions to meet our customers' needs. We value above all our long term customer relations. Strategic Plan Strategic Planning Business Strategy Strategic Planner Mission Statement Vision SWOTs Strategy Development http://www.planware.org/strategicplan.htm (5 of 17) [30-05-2012 7:48:59 AM]
  6. 6. Intel's original plan, written on the back of a menu (view copy), is an excellent example of a hard statement: The company will engage in research, development, and manufacture and sales of integrated electronic structures to fulfill the needs of electronic systems manufacturers. This will include thin films, thick films, semiconductor devices, and ......... A variety of processes will be established, both at a laboratory and production level ...... as well as the development and manufacture of special processing and test equipment required to carry out these processes. Products may include dioded transistors ....... Principal customers for these products are expected to be the manufacturers of advanced electronic systems ..... It is anticipated that many of these customers will be located outside California. If you'd prefer a soft statement, use the Dilbert Mission Statement Generator. When drafting a mission statement, critically examine every noun, adjective and verb to ensure that they are focused, realistic and justified. The Values The next element is to address the Values governing the operation of the business and its conduct or relationships with society at large, customers, suppliers, employees, local community and other stakeholders. The Objectives The third key element is to explicitly state the business's Objectives in terms of the results it needs/wants to achieve in the medium/long term. Aside from presumably indicating a necessity to achieve regular profits (expressed as return on shareholders' funds), objectives should relate to the expectations and requirements of all the major stakeholders, including employees, and should reflect the underlying reasons for running the business. These objectives could cover growth, profitability, technology, offerings and markets. The Strategies Next are the Strategies - the rules and guidelines by which the mission, objectives etc. may be achieved. They can cover the business as a whole including such matters as diversification, organic growth, or acquisition plans, or they can relate to primary matters in key functional areas, for example: The company's internal cash flow will fund all future growth.r New products will progressively replace existing ones over the next 3 years.r All assembly work will be contracted out to lower the company's break-even point. r Strategic Plan Strategic Planning Business Strategy Strategic Planner Mission Statement Vision SWOTs Strategy Development http://www.planware.org/strategicplan.htm (6 of 17) [30-05-2012 7:48:59 AM]
  7. 7. Use SWOTs to help identify possible strategies by building on strengths, resolving weaknesses, exploiting opportunities and avoiding threats. For further discussion on strategies, refer to the paper on Devising Business Strategies as well as these items below: Use Hindsight when Strategic Planning, Effect not Equal to Cause when Planning Strategy and SWOTs - Keys to Business Strategies. The Goals Next come the Goals. These are specific interim or ultimate time-based measurements to be achieved by implementing strategies in pursuit of the company's objectives, for example, to achieve sales of $3m in three years time. Goals should be quantifiable, consistent, realistic and achievable. They can relate to factors like market (sizes and shares), products, finances, profitability, utilization, efficiency. The Programs The final elements are the Programs which set out the implementation plans for the key strategies. These should cover resources, objectives, time-scales, deadlines, budgets and performance targets. Get Strategic Planning Help: Free Online Strategic Planner for creating a 3-page strategic plan. See Also: Expert tools for Assessing Business Ideas (US$ 229.95) and Evaluating Marketing Strategies (US$ 795.00). It goes without saying that the mission, objectives, values, strategies and goals must be inter-linked and consistent with each other. This is much easier said than done because many businesses which are set up with the clear objective of making their owners wealthy often lack strategies, realistic goals or concise missions. Top of Page Strategic Plan Strategic Planning Business Strategy Strategic Planner Mission Statement Vision SWOTs Strategy Development http://www.planware.org/strategicplan.htm (7 of 17) [30-05-2012 7:48:59 AM]
  8. 8. 3. Use Hindsight when Strategic Planning Statements on vision, mission, objectives, values, strategies and goals are not just elements of future planning. They also provide benchmarks for a historic review. Most managers will find it exceedingly difficult to develop a future strategy for a business without knowing its current strategies and measuring their success to date. Assess Current Position The starting point must be to determine a company's existing (implicit or explicit) vision, mission, objectives and strategies. Then judge these against actual performance along the following lines: Is the current vision being realized?q How has the company's mission and objectives changed over the past say, three years? Why have the changes occurred or why have no changes occurred? Identify primary reasons and categorize them as either internal or external. q Describe the actual strategies followed over the past few years in respect of products/services, operations, finance, marketing, technology, management etc. q Critically examine each strategy statement by reference to activities and actions in key functional areas covering such matters as: How has the company been managed?r How has the company been funded?r How has the company sought to increase sales and market share?r How have productivity/costs moved?r q Take each element and quantify by reference to actual performance. Ask of each "why not"?, "why only"?, or "why so"? and locate the reasons for differences between the actual and desired performance. Drill Down A useful technique for exploring performance shortfalls is to review the business's financial return and to drill down through the components of this return to locate and assess the key determinants of performance. For example, return on shareholders' funds is a key measure of profitability which can be expressed as: Net income ------------ Sales X Sales ----------- Shareholders' funds Take each item in this formula, explore its contents and derive performance measures or ratios. For example: Strategic Plan Strategic Planning Business Strategy Strategic Planner Mission Statement Vision SWOTs Strategy Development http://www.planware.org/strategicplan.htm (8 of 17) [30-05-2012 7:48:59 AM]
  9. 9. Sales break down into sales values, units, prices, discounts, commissions, bad debts and so on. Net income is derived by deducting costs (materials, labor, power etc.), expenses, interest and depreciation from sales revenue. Shareholders' funds are based on the value of fixed assets, current assets, current liabilities, debt etc. Use of cascading ratios is illustrated in this DuPont-type profitability chart (click thumb opposite) which is automatically generated by more powerful versions of Exl-Plan to show the impact of specific changes in key variables and assumptions on overall profitability. Subject the resultant ratios to critical examination and attempt to compare them with industry norms. The paper entitled Managing Working Capital explains key working capital ratios. Note that the Exl-Plan financial planners generate extensive ratios based on projected P&Ls, cashflow forecasts and balance sheets for 1-3-5-7 years ahead. Top of Page 4. Effect not Equal to Cause when Planning Strategy When reviewing a business it is essential to cut through the symptoms of problems and reach the underlying causes. Questions which can assist in revealing the real causes include the following: "What stopped the business from?"q "What caused the cause of?"q "Why didn't the business achieve a 25% return?"q By way of an example consider why this company may be unable to increase its market share: Because it cannot penetrate major customers because its product range is too narrow because the company doesn't have the capability to produce additional products because of shortcomings in R & D because of a lack of expertise and resource because R & D is not an immediate priority because of a lack of profits because of a high interest burden because the company is over-reliant on borrowings because the shareholders won't/can't raise additional permanent capital. Strategic Plan Strategic Planning Business Strategy Strategic Planner Mission Statement Vision SWOTs Strategy Development http://www.planware.org/strategicplan.htm (9 of 17) [30-05-2012 7:48:59 AM]
  10. 10. The moral in this case is that there are no major customers due to under-capitalization ! Also have a look at the discussion on causes of business failure in Devising Business Strategies. Top of Page 5. SWOTs - Keys to Business Strategies Having built up a picture of the company's past aims and achievements, the all-important SWOT (strengths, weaknesses, opportunities and threats) analysis can commence. Strengths & Weaknesses Strengths and weaknesses are essentially internal to the organization and relate to matters concerning resources, programs and organization in key areas. These include: Sales - marketing - distribution - promotion - support;q Management - systems - expertise - resources;q Operations - efficiency - capacity - processes;q Products - services - quality - pricing - features - range - competitiveness; q Finances - resources - performance;q R&D - effort - direction - resources;q Costs - productivity - purchasing;q Systems - organization - structures.q If a startup is being planned, the strengths and weaknesses are related mainly to the promoter(s) - their experience, expertise and management abilities - rather than to the project. Take a moment to complete or view the results of this survey. Survey about Strengths & Weaknesses of Businesses The objective is to build up a picture of the outstanding good and bad points, achievements and failures and other critical features within the company. Threats & Opportunities The external threats and opportunities confronting a company, can exist or develop in the following areas: Strategic Plan Strategic Planning Business Strategy Strategic Planner Mission Statement Vision SWOTs Strategy Development http://www.planware.org/strategicplan.htm (10 of 17) [30-05-2012 7:48:59 AM]
  11. 11. The company's own industry where structural changes may be occurring (Size and segmentation; growth patterns and maturity; established patterns and relationships, emergence/contraction of niches; international dimensions; relative attractiveness of segments) q The marketplace which may be altering due to economic or social factors (Customers; distribution channels; economic factors, social/demographic issues; political & environmental factors) q Competition which may be creating new threats or opportunities (Identities, performances, market shares, likely plans, aggressiveness, strengths & weaknesses) q New technologies which may be causing fundamental changes in products, processes, etc. (Substitute products, alternative solutions, shifting channels, cost savings etc.) q Against an uncertain and shifting background, the objective must be to identify and prioritize the key SWOTs in a one-handed manner (Don't say "on the one hand ...........but on the other hand........."). Develop Business Strategies Once the SWOT review is complete, the future strategy may be readily apparent or, as is more likely the case, a series of strategies or combinations of tactics will suggest themselves. Use the SWOTs to help identify possible strategies as follows: Build on strengthss Resolve weaknessess Exploit opportunitiess Avoid threatss The resulting strategies can then be filtered and moulded to form the basis of a realistic strategic plan - see also Devising Business Strategies for further insights into the development of strategies. Need More Help with your Strategic Planning ? Have a look at: Plan Write Expert Business Planner: Combined business plan tool and expert system to help evaluate and develop your plan. q Quick Insight - Business Idea Assessor: Expert system to help evaluate and improve a new business idea. q Business Insight - Strategy Evaluator: Sophisticated expert system for evaluating, developing and comparing business and marketing strategies. q Top of Page Strategic Plan Strategic Planning Business Strategy Strategic Planner Mission Statement Vision SWOTs Strategy Development http://www.planware.org/strategicplan.htm (11 of 17) [30-05-2012 7:48:59 AM]
  12. 12. 6. Simple & Short Strategic Plans Notwithstanding that "battles are often lost for want of nails", a company rarely succeeds or fails for minor or trivial reasons. The causes are usually substantial and are often self-evident, at least to an outsider. For example, the business was completely over-borrowed; management was weak; a major new product opportunity was identified; legislation changed; a major competitor went bust or expanded; the company never reinvested. It should be possible in the course of a few pages to set down the main elements of a business's vision, mission, values, objectives, goals, strategies, SWOTs etc. The compilation of a short report along these lines is likely to prove much more difficult than a lengthy dissertation which mixes up details and principles, and confuses the broad picture. See a sample strategic plan - use the back button on your browser to return to this page. Get Strategic Planning Help: Free Online Strategic Planner for creating a 3-page strategic plan. See Also: Expert tools for Assessing Business Ideas (US$ 229.95) and Evaluating Marketing Strategies (US$ 795.00). Independent advisers or non-executive directors can play a valuable role in this process because they can readily adopt the role of devil's advocate and also bring external knowledge and expertise to bear. The worksheet presented below may also assist. For further information on business planning issues, refer to other papers in this series which cover business ideas, business strategies, financial planning, cashflow forecasting and business planning. Free Tools from PlanWare Business financial planner for high-level, integrated 2-year projections using Excel - details and download links for Exl-Plan Free. q Excel-based, comprehensive, rolling 6-month cash flow planner - details and download links for Cashflow Plan Free. q Business plan template & guidelines (Word format) - details & download link for Free-Plan. q Online strategic planner for creating a 3-page strategic plan - details and sample plan. q More free tools here.q Strategic Plan Strategic Planning Business Strategy Strategic Planner Mission Statement Vision SWOTs Strategy Development http://www.planware.org/strategicplan.htm (12 of 17) [30-05-2012 7:48:59 AM]
  13. 13. Need More Assistance? Have a look at: Exl-Plan Multi-year Financial Projections (with Excel) Cashflow Plan Short-term Cashflow Forecasts (with Excel) Plan Write Comprehensive Business Planner Plan Write Marketing Planner Plan Write Expert Business Planner Quick Insight Business Idea Assessor Business Insight Business Strategy Evaluator Top of Page 7. Using the Strategic Planning Worksheet When using the Strategic Planning Worksheet below, note the following suggestions: Relate the planning exercise to a specific company or, if diversified, to individual strategic business units. 1. Ideally the worksheet should be compiled by a multi-discipline management group, or separately by 2/3 groups and then discussed in plenary session if a large business unit is involved. 2. If working on your own, complete the worksheet and then return to it a few times over the following few days and critically review what you wrote - why, why, why etc. and ask yourself whether you have seen the "wood for trees". 3. A completed worksheet should be edited down into a 1-2 page document and reviewed by the group(s). The final form of the document need not follow the worksheet's layout provided all the matters are covered. 4. All ideas, issues etc. should be internally consistent and realistic.5. You need a very good understanding of the market, competitors etc. in order to make a clear assessment of your SWOTs. If you haven't got this insight, suspend work on your strategic plan until you have done this basic research. 6. Allow enough time as you may find it much more difficult to write a short plan than a long one !!!! 7. Top of Page Strategic Plan Strategic Planning Business Strategy Strategic Planner Mission Statement Vision SWOTs Strategy Development http://www.planware.org/strategicplan.htm (13 of 17) [30-05-2012 7:48:59 AM]
  14. 14. 8. Strategic Planning Worksheet To start using the worksheet below, copy the headings marked in red onto a blank sheet of paper (or page in a word processor) and enter short statements about each item as per the guidelines above. Note: This worksheet is available as a free Online Strategic Planner. See sample strategic plan - you may wish to print it for reference purposes. (Use the back button on your browser to return to this page.) Contents of the Strategic Plan 1. Assess the business's EXISTING strengths, weaknesses, threats and opportunities: (Strengths & Weaknesses are internal to the business and Opportunities & Threats are external. All SWOTs should be 'one-handed' - something is either a Strength or a Weakness but cannot be both. Enter up to six items under each heading and then rank them in order of importance. If you are planning a new business, consider the project's and its promoters' existing SWOTs): Internal Strengths Internal Weaknesses External Threats External Opportunities Take a moment to complete or view the results of this survey. Survey about Strengths & Weaknesses of Businesses 2. Vision of business in 3/4 years time: (What will the business look like? If a visitor from Mars dropped in what would be seen and evident. Write in future tense. Maximum of 150 words) 3. Mission/purpose statement for business to cover next 3/4 years: (What will the business really, really be doing? What activities will it perform, where, how etc.? What makes the business special/competitive? Every noun, adjective and verb in the statement is important and must be justified. Maximum of 150 words) Strategic Plan Strategic Planning Business Strategy Strategic Planner Mission Statement Vision SWOTs Strategy Development http://www.planware.org/strategicplan.htm (14 of 17) [30-05-2012 7:48:59 AM]
  15. 15. 4. Statement of corporate values and beliefs: (Covers employees, customers, environment etc. etc. Maximum of 150 words) 5. Set out key long-term objectives: (These are the primary underlying reasons for being involved in the business, and are not specific targets - these come later) 5a Shareholders 5b Management (If different from shareholders) 5c Business (Relative to competitors etc.) 6. Identify key strategies for business and major functional areas: (Build on strengths, resolve threats, exploit opportunities and avoid threats. Add any new dimensions revealed by Vision and Mission. List and prioritize up to ten or so major strategies. See Devising Business Strategies for further insights.) 7. Assess possible FUTURE strengths, weaknesses, threats and opportunities: (Do the foregoing strategies improve the initial SWOTs? If they don't, then they should have done so) Internal Strengths Internal Weaknesses External Threats External Opportunities 8. Review your vision, mission, values and objectives: (Refine and revise/restate key strategies to deal with the perceived FUTURE SWOTs) 9. Specify major goals achievable over the next 3/4 years: (Quantify in terms of sales, market shares, finances, operations etc.) 10. Define strategic action programs: (Indicate who, what, where, when, how etc. Set targets and prioritize) Note: This worksheet is available as a free Online Strategic Planner. Next Steps in Developing a Strategic Plan If you have prepared a strategic plan along the lines suggested above, you have several possible pathways. These include the preparation of a full-blown business plan, compilation of financial projections, undertaking market research, product development, management team-building etc. etc. You may also wish to refer to some other papers in this series which cover business ideas, business strategies, cashflow forecasting and managing working capital. Strategic Plan Strategic Planning Business Strategy Strategic Planner Mission Statement Vision SWOTs Strategy Development http://www.planware.org/strategicplan.htm (15 of 17) [30-05-2012 7:48:59 AM]
  16. 16. If preparing a business plan, look at Free-Plan. This is a free Business Plan Template for Word (48 pages) and a complementary Guide (supplied as a 90+ topic Help file and as a 100+ page PDF file for printing. Note that a strategic plan based on the structure in the Strategic Planning Worksheet (above) is ideal for inclusion in edited form in Section 3. Strategic Overview of this Template. If you need to produce financial projections as part of a strategic plan or for use on their own, take a look at our extensive range of Excel-based financial planners - Exl-Plan - which can be used to prepare 3/5-year financial projections (P&Ls, cashflows, balance sheets, ratio analyses and graphs). It incorporates a Quik-Plan facility for doing quick and dirty projections. If you seek a very simple solution, look at Exl-Plan Basic (US$ 29) which generates comprehensive "high-level" 5-year projections based on annual assumptions (in contrast to the more detailed monthly and quarterly assumptions used by other versions in the Exl-Plan range). Get the details and free trial downloads. If you need to go into more detail with your strategic plan, have a look at the following software-based expert systems: Plan Write Expert Business Planner: Combined business plan tool and expert system to help evaluate and develop your plan. q Quick Insight - Business Idea Assessor: Expert system to help evaluate and improve a new business idea. q Business Insight - Strategy Evaluator: Sophisticated expert system for evaluating, developing and comparing business and marketing strategies. q Share or Bookmark this Page More info Digg Reddit Newsvine Delicious StumbleUpon Yahoo Google Facebook Technorati Windows Live Top of Page Business Planning Papers 9. Introducing PlanWare PlanWare develops and sells a range of financial planning packages - Exl-Plan and Cashflow Plan - for businesses of all sizes & types. Trial versions of all products can be downloaded from our PlanWare site and many other sources on the 'Net. We also offer an extensive range of commercial software for writing business plans, market planning, assessing business ideas and evaluating strategies. PlanWare also features: Strategic Plan Strategic Planning Business Strategy Strategic Planner Mission Statement Vision SWOTs Strategy Development http://www.planware.org/strategicplan.htm (16 of 17) [30-05-2012 7:48:59 AM]
  17. 17. Business Ideas Business Strategies Strategic Plan Business Plans Business Plan Insights Financial Projections Cashflow Forecasts Working Capital Raising Finance Other Items: - Bad Advice - Quotations - Money, Money Papers on cashflow, financial, strategic and business planning topics.q Advice on getting new business ideas, managing working capital, devising business strategies and much more. q Pages devoted to famous business quotations and examples of bad business advice and mistakes.q Top of Page 10. Copyright & Legal Stuff This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs License. This means that this page and any related files are subject to the normal rules about copyright and attribution. If you wish to make an electronic or printed copy for YOUR PERSONAL USE, you are free to do so PROVIDED THAT IT IS UNMODIFIED AND REMAINS COMPLETE IN ALL RESPECTS. All copying for commercial use requires written prior permission secured from info@planware.org. You are free to quote short extracts provided our site's URL <www.planware.org> is acknowledged as the source. PlanWare, Invest-Tech Limited, Ardmeen Park, Blackrock, Co. Dublin, Ireland International Tel: +353-1-283 4083 International Fax: +353-1-278 2391 Email: info@planware.org WWW: http://www.planware.org Subscribe / Syndicate: RSS Top of Page Financial Projection Software Cashflow Forecasting Software Business Plan Software Marketing Plan Software Strategic Planning Software Business Plan Guide Business Planning Freeware Online Planning Tools Business Planning Papers Other Items Home Blog Map Help New Price List Buy+Use Privacy Contact PlanWare, Invest-Tech Limited, Ardmeen Park, Blackrock, Co. Dublin, Ireland International Tel: +353-1-283 4083 International Fax: +353-1-278 2391 Email: info@planware.org WWW: http://www.planware.org Subscribe: RSS Follow: Twitter PlanWare, Cashflow Plan, Exl-Plan, Quik-Plan, Free-Plan, Biz-Plan, Easi-Plan, Cash-Plan, Pers-Plan, Your-Plan and Bank-Plan are trademarks or registered trademarks property of Invest-Tech Limited. Microsoft and the Office logo are trademarks or registered trademarks of Microsoft Corporation in the United States and/or other countries. Plan Write, Quick Insight and Business Insight are trademarks or registered trademarks property of BRS Inc. © Copyright 1999-2012. Invest-Tech Limited. All rights reserved. Strategic Plan Strategic Planning Business Strategy Strategic Planner Mission Statement Vision SWOTs Strategy Development http://www.planware.org/strategicplan.htm (17 of 17) [30-05-2012 7:48:59 AM] Search site !
  18. 18. Home Blog Map Help New Price List Buy+Use Privacy Contact Financial Projection Software Cashflow Forecasting Software Business Plan Software Marketing Plan Software Strategic Planning Software Business Plan Guide Business Planning Freeware Online Planning Tools Business Planning Papers Other Items Business Planning Papers Business Ideas Business Strategies Strategic Plan Business Plans Business Plan Insights Financial Projections Cashflow Forecasts Working Capital Raising Finance Other Items: - Bad Advice - Quotations - Money, Money Business Planning Papers: Devising Business Plan Strategies Page Contents Avoid Business Failure1. Characteristics of Successful Businesses2. Clarify Existing Business Strategies3. Look into Future SWOTs for Strategies4. Basic Strategic Planning Approaches5. Creating Strategic Combinations6. Compiling Strategic Statements7. Next Steps towards a Strategic Business Plan8. Introducing PlanWare9. Copyright & Legal Stuff10. Useful Links More Info Develop strategic plan Devise business strategies Write strategic plan See planning surveys Buy planning book View sample plan See Also Get business ideas Write business plan Get planning insights Prepare financial projections Seek planning advice Plan to plan Business plan guide Software Tools Financial Planners Expert Business Planner Strategy Planner Idea Assessor Marketing Planners Free Planners Buy Software Financial Projections Cashflow Forecasts Business Plans Marketing Plans Strategic Plans Business Strategy: Strategic Business Plan & Strategy Planning with Strategic Planners, Strategic Plans, Mission Statements, Vision, SWOTs, Strategies, Strategy Development http://www.planware.org/businessstrategies.htm (1 of 14) [30-05-2012 7:54:50 AM] Search site !
  19. 19. Free Online Strategic Planner Free Online Strategic Planner for creating a 3-page strategic plan based on the structure used in this white paper. Use it to organize your thoughts, structure your ideas and compile a short but comprehensive strategic plan for any size and type of organization. Recommendation: Review the paper on this page before using the planner. Click here to see feedback from past users of this planning tool (opens in a new window) and click here to see a sample plan (use back button on browser to return to this page). 1. Avoid Business Failure This paper is most relevant to entrepreneurs or management teams that have a clear vision and mission for their business and are in the process of developing the primary strategies to be followed. It is closely linked to other papers in this series, most notably Developing a Strategic Business Plan which offers a framework for a strategic plan and Getting New Business Ideas. The development of a suite of strategies is an iterative process and involves circular thinking on the basis that optimal strategies will evolve gradually and be very interdependent. Accordingly, the best way to utilize this paper is to review it in its entirety and then use it as a checklist and basis for brainstorming and systematic analysis. A venture is most prone to failure during its first three or so years of operation - the so-called 'valley of death'. A key to getting through these early years is to avoid the obvious mistakes. Generally speaking, businesses fail for significant and substantial reasons which are often very evident to outsiders. Insiders often fail to see them because of their closeness, determination and so on. Basic reasons for failure include the following: Finance Markets/Sales Management Offerings Operations Business Strategy: Strategic Business Plan & Strategy Planning with Strategic Planners, Strategic Plans, Mission Statements, Vision, SWOTs, Strategies, Strategy Development http://www.planware.org/businessstrategies.htm (2 of 14) [30-05-2012 7:54:50 AM]
  20. 20. Underestimating start-up costs (for operations & capital expenditure). Misjudging the size or growth of the overall market. Lack of relevant sectorial experience. Inability to supply profitably to required price. Under-investment in equipment etc. Insufficient funds or access to top-up finance. Overoptimistic estimates of market penetration & shares. Insufficient functional breadth. Problems with maintaining quality standards. Excessive overheads (relative to scale of operations). Wrong mix of funds (e.g. too much debt and gearing too high). Delays in securing or developing distribution channels. Unresolved differences of opinion. Restricted range of offerings. High operational costs and/or low productivity. Over reliance on trade credit (receivables). Underestimating the strength of competitors. Unreal expectations. Lack of innovation (me-too offerings). Poor capacity utilization. Mistaking profit for cash flow (see here). Misreading customer requirements. No formal or clear structures. Problems sourcing supplies. Inadequate physical distribution. Overoptimistic projections or overtrading. Lack of promotion & customer awareness. Ineffective financial & managerial control systems. Offerings out of line with customer needs. Inappropriate business location. Unable to withstand interest rate increases. Inability to handle an economic slowdown. Clearly, there are very many other reasons as to why businesses fail. The key point is that causes are usually very apparent (especially with hindsight) and the trick is to anticipate them by executing appropriate strategies at the outset. Three examples: Use market research to confirm demand and assess suitability of proposed offerings. q Create a management team to offset any gaps in experience or expertise.q Raise equity to reduce exposure to interest rate changes, reduce gearing etc.q Business Strategy: Strategic Business Plan & Strategy Planning with Strategic Planners, Strategic Plans, Mission Statements, Vision, SWOTs, Strategies, Strategy Development http://www.planware.org/businessstrategies.htm (3 of 14) [30-05-2012 7:54:50 AM]
  21. 21. Given that reasons for failure are often both simple and clear, it should (in theory) be possible to reduce the possibility of failure through prior experience, forethought and effective planning. Have a look at Quick Insight, an expert software tool for assessing business proposals. Top of Page 2. Characteristics of Successful Businesses A successful emerging growth business is likely to display many of the following characteristics: Sensibly financed (with prudent mix of equity and debt).1. Strong cash position (with access to follow-on or contingency funds).2. Offers above-average profitability (in terms of return on capital invested).3. Aims for rapid growth in revenues (with profits lagging but in prospect).4. Targets expanding, or otherwise attractive, market segments.5. Develops a strong franchise or brand.6. Devotes substantial resources to innovation (R&D, offerings or market).7. Competes on non-price issues (e.g. quality, service, functionality).8. Very close to customers and responsive to their needs.9. Seeks specialist/leadership image with superior offerings.10. Well managed with high-grade staff & good people-management.11. Behind every characteristic there should be an explicit strategy designed to increase the chances of success and not simply aimed at reducing the likelihood of failure. For example: A growth business needs a cash war chest and not merely "adequate" debt facilities.q Likewise, its management team must have the capacity to manage the present business as well as its growth. q Top of Page Business Strategy: Strategic Business Plan & Strategy Planning with Strategic Planners, Strategic Plans, Mission Statements, Vision, SWOTs, Strategies, Strategy Development http://www.planware.org/businessstrategies.htm (4 of 14) [30-05-2012 7:54:50 AM]
  22. 22. 3. Clarify Existing Business Strategies In planning new strategies for a business, it is essential to define its current (implicit or explicit) strategies for the business as a whole and its main functional areas - finance, marketing, sales, management, operations etc. Do this by setting out a series of short strategic statements. Some examples: The business has been financed entirely from retained profits and without recourse to debt or external equity. q The implicit sales strategy has been to offer a very broad range of products at premium prices and to invest heavily in promotion. q The senior management team has been drawn exclusively from family members.q Instead of doing R&D, the business copies competing products and sells them at a discount.q To get at the root (fundamental) strategies, critically examine each statement. For example: How has the company really been funded?q How has the company sought to increase sales and market share? q How have productivity/costs moved?q Up to eight statements should suffice to cover all the essentials. Ask whether they contain the seeds for significant growth or merely represent hedges against possible failure. Undertake separate analyses for each business unit if a large corporation is being appraised. See Developing a Strategic Business Plan (Sections 1.3 & 1.4) and free Online Strategic Planner for further guidance. Need more Help with your Strategic Plan ? Have a look at: Plan Write Expert Business Planner: Combined business plan tool and expert system to help evaluate and develop your plan. q Quick Insight - Business Idea Assessor: Expert system to help evaluate and improve a new business idea. q Business Insight - Strategy Evaluator: Sophisticated expert system for evaluating, developing and comparing business and marketing strategies. q Top of Page Business Strategy: Strategic Business Plan & Strategy Planning with Strategic Planners, Strategic Plans, Mission Statements, Vision, SWOTs, Strategies, Strategy Development http://www.planware.org/businessstrategies.htm (5 of 14) [30-05-2012 7:54:50 AM]
  23. 23. 4. Look into Future SWOTs for Strategies An effective SWOT (strengths, weaknesses, threats & opportunities) analysis is a key component of strategic development. It can prompt actions and responses: Internal External Build on strengths Exploit opportunities Resolve weaknesses Avoid threats If the business is seeking significant growth, it is important to fast-forward and assess SWOTs as they might exist a year or two hence. This will help ensure that strategies are ambitious and robust and that emerging issues are anticipated. Have a look at the discussion on SWOTs and related matters in Developing a Strategic Business Plan (and especially Sections 1.3 to 1.5). Take a moment to complete or view the results of these surveys: Survey about Strengths & Weaknesses of Businesses Survey about Writing a Business Plan Top of Page 5. Basic Strategic Planning Approaches The primary strategic options for a new or established business include the following: Grow fast (and ahead of most competitors) Grow in line with industry Defend existing status (assumes a moderately strong starting position) Catch up (with leaders & then grow with or ahead of them) Turn around (from being an underperformer) Hang in (go with the flow but don't expend much effort) Harvest (milk the opportunity with a view to withdrawal) The preferred option is likely to be very influenced by the dynamics and prospects of the sector in which the business operates. For example, if the sector is under serious long-term threat then the only realistic options might be to hang in or harvest. Business Strategy: Strategic Business Plan & Strategy Planning with Strategic Planners, Strategic Plans, Mission Statements, Vision, SWOTs, Strategies, Strategy Development http://www.planware.org/businessstrategies.htm (6 of 14) [30-05-2012 7:54:50 AM]
  24. 24. The two main approaches to strategic development for an established business can be classified as either organic or quantum as illustrated below: Organic Quantum Lower risk Higher risk Limited resources needed Substantial resources needed Absorbs less effort May divert/deflect attention Low immediate returns Higher returns (?) Incremental learning/progress Excellent insights required Strategic flexibility Unforgiving of errors In the case of a start-up venture, organic and quantum approaches translate into soft or hard start-up strategies. An example of a soft start would be a software company which evolves from a part-time business into full-time service provider and then progresses into software products (classic "back room" start). Another example, would be an engineering company which starts in a shed and gradually moves into a proper premises ("garage" start). Soft start strategies can be very effective as they allow entrepreneurs to learn the trade (and make mistakes) without incurring major, irrevocable (and maybe premature) commitments. Hard starts are obligatory where substantial investments (in R&D, market or assets) or resources (technology, manpower etc.) are needed from the outset. It may be possible to soften a hard start by renting (rather than buying) premises; leasing equipment (instead of purchasing); acquiring a franchise (in lieu of developing a new brand, systems etc.); entering into a joint venture; or subcontracting manufacturing, distribution, accountancy services and so on. Top of Page 6. Creating Strategic Combinations This Section presents several different combinations of strategies which could be used to help develop a range of strategic options. These can be strung together to form explicit strategic statements of intent. For example: Any Inc's central objective is to become a full-line supplier. It will reduce its cost base through introducing new processes as result of licensing-in technology in parallel with broadening its distribution activities financed by retained profits and external debt. The purpose of this section is not to encourage a form of planning by words but to simply expose the range of possibilities that might be considered when formulating explicit strategies. These can be applied equally to start-ups and established businesses. Of course, the big distinction is that the start-up Business Strategy: Strategic Business Plan & Strategy Planning with Strategic Planners, Strategic Plans, Mission Statements, Vision, SWOTs, Strategies, Strategy Development http://www.planware.org/businessstrategies.htm (7 of 14) [30-05-2012 7:54:51 AM]
  25. 25. is building strategies from scratch without the benefits of any market position, momentum or pre-existing strategies. Three software packages could be extremely useful in helping to formulate and assess strategic proposals. Quick Insight is especially suitable for smaller businesses and Business Insight is aimed at larger businesses. Both packages are expert systems incorporating the know-how of leading marketing and strategic planners. They evaluate proposals and allow users drill down to find the basis for evaluations and to compare their strategies with those of competitors. The Plan Write Expert Edition integrates Quick Insight into a comprehensive business plan writer. Any selected suite of strategies must be integrated and internally consistent and in-line with the business's broader vision, mission and objectives (see Developing a Strategic Business Plan). There is little point in a business claiming to be technologically advanced if its R&D spend is sub-critical, or aspiring to become a leading brand if it has neither products, nor funds nor distribution to ensure this could happen. Basic thrusts of a business (to be continued, deepened or initiated): Basic Supplier Thrusts Specialist vs. Full-line Market/price leader vs. Market/price follower Products vs. Solutions Goods vs. Services Low volumes vs. Mass production Commodity offerings vs. High added-value Differentiated offerings vs. Me-too offerings Niche markets vs. Broad segments Primary product and market combinations include: Existing Products New Products Existing Markets Lowest risk Moderate risk New Markets Moderate risk Highest risk Investment possibilities include the following: Improve market share, enhance brand, extend distribution Increase capacity or efficiency or reduce costs Extend product ranges and/or served markets Stabilize/strengthen financial position Innovate and create new offerings Business Strategy: Strategic Business Plan & Strategy Planning with Strategic Planners, Strategic Plans, Mission Statements, Vision, SWOTs, Strategies, Strategy Development http://www.planware.org/businessstrategies.htm (8 of 14) [30-05-2012 7:54:51 AM]
  26. 26. Increase skills or productivity Scale back or close down Possible future directions of main activities (Xs signify desired action): Activities Direction Ignore Initiate Intensify Reduce Withdraw Distribution X - - - - Retail - - - - X Services - X - - - Manufacturing - - X - - Alternative technology acquisition routes include: Own R & D Own D & no R License in Joint venture Co-finance/sponsor Funding strategies could embrace the following sources and forms: Sources Forms Internal Retentions Forego dividends Existing shareholders Disposal of surplus assets Sale & lease back Better management of working capital (see here) External Debt (short- or long-term) Factoring & discounting Supplier/customer loans or advances Leasing (operating & capital) Grants & subsidies Equity (formal and informal venture capital) The range of quantum leap possibilities could include: License in/out Franchise Trade investment Business Strategy: Strategic Business Plan & Strategy Planning with Strategic Planners, Strategic Plans, Mission Statements, Vision, SWOTs, Strategies, Strategy Development http://www.planware.org/businessstrategies.htm (9 of 14) [30-05-2012 7:54:51 AM]
  27. 27. Minority/majority stake Joint venture Consortium membership Merge/demerge Acquisition Sponsor start-up Top of Page 7. Compiling Strategic Statements Strategic statements can be defined as broad indicators of the direction(s) in which a business should be driven in order to fulfil its vision/mission while taking realistic account of its resources, constraints and opportunities. Exl-Plan, our range of Excel-based financial planners, are ideal for exploring alternative funding options and related strategies and for undertaking sensitivity analyses. They also serve as the link between the a business's objective and actions plans and should result in a series of integrated sub-strategies and action programs with goals, budgets, timetables. These can be most effective when linked to specific functional areas. For example: Industry Operations Marketplace Finance/funding Technology Sales Offerings Management Marketing Organization Limit the number of strategic statements to what can be realistically achieved within a realistic time frame and, if necessary, prioritize them. It is possible that just one strategy is needed for each of the main main functional areas listed above. See the latter parts of this Sample Strategic Plan for an example of a set of strategic statements. It might help to summarize and sequence the key elements in a color-coded Gantt chart or table like the following: Quarter 1 2 3 4 5 6 7 8 9 Strategy 1 Strategy 2 Strategy 3 Strategy 4 Strategy 5 Strategy 6 Business Strategy: Strategic Business Plan & Strategy Planning with Strategic Planners, Strategic Plans, Mission Statements, Vision, SWOTs, Strategies, Strategy Development http://www.planware.org/businessstrategies.htm (10 of 14) [30-05-2012 7:54:51 AM]
  28. 28. ...... ...... ...... Need to Go Into More Detail with your Strategic Plan ? Have a look at: Plan Write Expert Business Planner: Combined business plan tool and expert system to help evaluate and develop your plan. q Quick Insight - Business Idea Assessor: Expert system to help evaluate and improve a new business idea. q Business Insight - Strategy Evaluator: Sophisticated expert system for evaluating, developing and comparing business and marketing strategies. q Top of Page 8. Next Steps towards a Strategic Business Plan Once a set of strategies has been developed, it will almost certainly need detailed planning and reality testing. This could embrace market research, acquisition scouting and all forms of planning ranging from investment appraisal through financial projections to business plans or corporate submissions. Useful software-related resources to assist these processes include: Software for writing business and marketing plans - Plan Write Business Planner, Marketing Planner and Expert Business Planner. q Software for appraising business proposals and marketing strategies - Quick Insight (smaller businesses) and Business Insight (larger businesses). q Financial planning software - Exl-Plan.q Template for a business plan - Free-Plan.q Online Strategic Planner for creating a 3-page plan.q Need More Help? Free Online Strategic Planner for creating a 3-page strategic plan. Also, the following white papers are central: Business Strategy: Strategic Business Plan & Strategy Planning with Strategic Planners, Strategic Plans, Mission Statements, Vision, SWOTs, Strategies, Strategy Development http://www.planware.org/businessstrategies.htm (11 of 14) [30-05-2012 7:54:51 AM]
  29. 29. Getting New Business Ideasq Developing a Strategic Business Planq Making Financial Projectionsq How to Write a Business Planq Insights into Business Planningq For a start-up, additional planning activities could include (in no particular order) management team formation, R&D, market research and entry planning, feasibility studies and preliminary fund raising. Free Tools from PlanWare Business financial planner for high-level, integrated 2-year projections using Excel - details and download links for Exl-Plan Free. q Excel-based, comprehensive, rolling 6-month cash flow planner - details and download links for Cashflow Plan Free. q Business plan template & guidelines (Word format) - details & download link for Free-Plan. q Online strategic planner for creating a 3-page strategic plan - details and sample plan. q More free tools here.q Be realistic about the rate at which a management team can implement strategic change and allow for the fact that these may involve factors totally outside the business's control. It may be better to implement a few strategic initiatives successfully and on time rather than a multitude badly or only partially. The solution here is to prioritize. Share or Bookmark this Page More info Digg Reddit Newsvine Delicious StumbleUpon Yahoo Google Facebook Technorati Windows Live Business Strategy: Strategic Business Plan & Strategy Planning with Strategic Planners, Strategic Plans, Mission Statements, Vision, SWOTs, Strategies, Strategy Development http://www.planware.org/businessstrategies.htm (12 of 14) [30-05-2012 7:54:51 AM]
  30. 30. Need to Go Into More Detail with your Strategic Plan ? Have a look at: Plan Write Expert Business Planner: Combined business plan tool and expert system to help evaluate and develop your plan. q Quick Insight - Business Idea Assessor: Expert system to help evaluate and improve a new business idea. q Business Insight - Strategy Evaluator: Sophisticated expert system for evaluating, developing and comparing business and marketing strategies. q Top of Page Business Planning Papers Business Ideas Business Strategies Strategic Plan Business Plans Business Plan Insights Financial Projections Cashflow Forecasts Working Capital Raising Finance 9. Introducing PlanWare PlanWare develops and sells a range of financial planning packages - Exl-Plan and Cashflow Plan - for businesses of all sizes & types. Trial versions of all products can be downloaded from our PlanWare site and many other sources on the 'Net. We also offer an extensive range of commercial software for writing business plans, market planning, assessing business ideas and evaluating strategies. PlanWare also features: Papers on cashflow, financial, strategic and business planning topics.q Advice on getting new business ideas, managing working capital, devising business strategies and much more. q Pages devoted to famous business quotations and examples of bad business advice and mistakes.q Top of Page 10. Copyright & Legal Stuff This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs License. This means that this page and any related files are subject to the normal rules about copyright and attribution. If you wish to make an electronic or printed copy for YOUR PERSONAL USE, you are free to do so PROVIDED THAT IT IS UNMODIFIED AND REMAINS COMPLETE IN ALL RESPECTS. All copying for commercial use requires written prior permission secured from info@planware.org. You are free to quote short extracts provided our site's URL <www.planware.org> is acknowledged as the source. Business Strategy: Strategic Business Plan & Strategy Planning with Strategic Planners, Strategic Plans, Mission Statements, Vision, SWOTs, Strategies, Strategy Development http://www.planware.org/businessstrategies.htm (13 of 14) [30-05-2012 7:54:51 AM]
  31. 31. Other Items: - Bad Advice - Quotations - Money, Money PlanWare, Invest-Tech Limited, Ardmeen Park, Blackrock, Co. Dublin, Ireland International Tel: +353-1-283 4083 International Fax: +353-1-278 2391 Email: info@planware.org WWW: http://www.planware.org Subscribe / Syndicate: RSS Top of Page Financial Projection Software Cashflow Forecasting Software Business Plan Software Marketing Plan Software Strategic Planning Software Business Plan Guide Business Planning Freeware Online Planning Tools Business Planning Papers Other Items Home Blog Map Help New Price List Buy+Use Privacy Contact PlanWare, Invest-Tech Limited, Ardmeen Park, Blackrock, Co. Dublin, Ireland International Tel: +353-1-283 4083 International Fax: +353-1-278 2391 Email: info@planware.org WWW: http://www.planware.org Subscribe: RSS Follow: Twitter PlanWare, Cashflow Plan, Exl-Plan, Quik-Plan, Free-Plan, Biz-Plan, Easi-Plan, Cash-Plan, Pers-Plan, Your-Plan and Bank-Plan are trademarks or registered trademarks property of Invest-Tech Limited. Microsoft and the Office logo are trademarks or registered trademarks of Microsoft Corporation in the United States and/or other countries. Plan Write, Quick Insight and Business Insight are trademarks or registered trademarks property of BRS Inc. © Copyright 1999-2012. Invest-Tech Limited. All rights reserved. Business Strategy: Strategic Business Plan & Strategy Planning with Strategic Planners, Strategic Plans, Mission Statements, Vision, SWOTs, Strategies, Strategy Development http://www.planware.org/businessstrategies.htm (14 of 14) [30-05-2012 7:54:51 AM] Search site !
  32. 32. Home Blog Map Help New Price List Buy+Use Privacy Contact Financial Projection Software Cashflow Forecasting Software Business Plan Software Marketing Plan Software Strategic Planning Software Business Plan Guide Business Planning Freeware Online Planning Tools Business Planning Papers Other Items Business Planning Papers Business Ideas Business Strategies Strategic Plan Business Plans Business Plan Insights Financial Projections Cashflow Forecasts Working Capital Raising Finance Other Items: - Bad Advice - Quotations - Money, Money Business Planning Papers: How to Write a Business Plan Page Contents Why Write a Business Plan?1. Start with a Business Strategy2. Before Writing the Business Plan3. Planning the Business Plan4. Outline the Business Plan5. Business Plan Outline6. Writing the Business Plan7. Introducing PlanWare8. Copyright & Legal Stuff9. Need Financial Projections for Your Plan ? Use Exl-Plan for preparing comprehensive financial projections for 1/3/5/7 years ahead. Ideal for a business plan, strategic planning, cash flow forecasting, raising finance, budgeting and financial appraisals. Get full details, download free or trial copies or buy & use now. Useful Links More Info Write business plan Get planning insights See planning surveys Get free planner Seek planning advice Develop strategic plan Checklist for business plan Business plan guide See Also Get business ideas Devise business strategies Prepare financial projections Write strategic plan Plan to plan Buy planning book Software Tools Financial Planner Cashflow Forecaster Business Planner Expert Business Planner Strategy Planner Idea Assessor Marketing Planners Free Planners Buy Software Business Plan: Writing Plans with Free Sample Template & Software, Business Planning, Business Planner, Business Plan Software, Business Plan Template, Sample Business Plan http://www.planware.org/businessplan.htm (1 of 18) [30-05-2012 7:55:24 AM] Search site !
  33. 33. 1. Why Write a Business Plan? The preparation of a written business plan is not the end-result of the planning process. The realization of that plan is the ultimate goal. However, the writing of the plan is an important intermediate stage - fail to plan can mean plan to fail. For an established business it demonstrates that careful consideration has been given to the business's development, and for a startup it shows that the entrepreneur has done his or her homework. Purpose of the Business Plan A formal business plan is just as important for an established business, irrespective of its size, as it is for a startup. It serves four critical functions as follows: Helps management or an entrepreneur to clarify, focus and research their business's or project's development and prospects. q Provides a considered and logical framework within which a business can develop and pursue business strategies over the next three to five years. q Serves as a basis for discussion with third parties such as shareholders, agencies, banks, investors etc. q Offers a benchmark against which actual performance can be measured and reviewed. q Financial Projections Cashflow Forecasts Business Plans Marketing Plans Strategic Plans Just as no two businesses are alike, so also with business plans. As some issues in a plan will be more relevant to some businesses than to others, it is important to tailor a plan's contents to suit individual circumstances. Nonetheless, most plans follow a well-tried and tested structure and general advice on preparing a plan is universally applicable. A business plan should be a realistic view of the expectations and long-term objectives for an established business or new venture. It provides the framework within which it must operate and, ultimately, succeed or fail. For management or entrepreneurs seeking external support, the plan is the most important sales document that they are ever likely to produce as it could be the key to raising finance etc. Preparation of a comprehensive plan will not guarantee success in raising funds or mobilizing support, but lack of a sound plan will, almost certainly, ensure failure. Importance of the Business Planning Process Preparing a satisfactory business plan is a painful but essential exercise. The planning process forces managers or entrepreneurs to understand more clearly what they want to achieve, and how and when they can do it. Even if no external support is needed, a business plan can play a vital role in helping to avoid mistakes or recognize hidden opportunities. It is much easier to fold a sheet of paper than a Business Plan: Writing Plans with Free Sample Template & Software, Business Planning, Business Planner, Business Plan Software, Business Plan Template, Sample Business Plan http://www.planware.org/businessplan.htm (2 of 18) [30-05-2012 7:55:24 AM]
  34. 34. business. For many, many entrepreneurs and planners, the process of planning (thinking, discussing, researching and analyzing) is just as, or even more, useful than the final plan. So, even if you don't need a formal plan, think carefully about going through the planning process. It could be enormously beneficial to your business. Anticipate many weeks of hard work and several drafts of the emerging plan to get the job right. A clearly written and attractively packaged business plan will make it easier to interest possible supporters, investors etc. A well-prepared business plan will demonstrate that the managers or entrepreneurs know the business and that they have thought through its development in terms of products, management, finances, and most importantly, markets and competition. For more guidance on these matters, check the white paper offering Insights into Business Planning, the Checklist for Preparing a Business Plan, Free-Plan (free 150-page Business Plan Guide and Template in Word format) and the comprehensive Business Plan Guide. If you are developing, or have invented, a new product or service, it may be beneficial to start the business planning process by reviewing the sections of Getting New Business Ideas covering Assessing Ideas and Next Steps. This will guide you on groundwork to be done before starting to write a comprehensive plan. In the following sections, we discuss the preparation of a strategic plan and present ideas for preparing the outline of a business plan and writing up the detail. Need More Business Planning Help? Have a look at: Exl-Plan Multi-year Financial Projections (with Excel) Plan Write Comprehensive Business Planner Plan Write Expert Business Planner Top of Page Business Plan: Writing Plans with Free Sample Template & Software, Business Planning, Business Planner, Business Plan Software, Business Plan Template, Sample Business Plan http://www.planware.org/businessplan.htm (3 of 18) [30-05-2012 7:55:24 AM]
  35. 35. 2. Start with a Business Strategy A short strategic plan (2-3 pages) can provide a very useful foundation on which to base a much more detailed and comprehensive business plan. If you don't have a sensible strategic plan, how can you realistically write a sensible business plan? Use a short strategic plan as the foundation for a more comprehensive business plan. As the prelude to developing a strategic plan, it is desirable to clearly identify the current status, objectives and strategies of an existing business or the latest thinking in respect of a new venture. Correctly defined, these can be used as the basis for a critical examination to probe existing or perceived strengths, weaknesses, threats and opportunities. This then leads to strategy development covering the following issues which are discussed in more detail immediately below: Visions Missions Objectivess Valuess Strategiess Goalss Programss Get Strategic Planning Help: Free Online Strategic Planner for creating a 3-page strategic plan. See Also: Expert tools for Assessing Business Ideas (US$ 229.95) and Evaluating Marketing Strategies (US$ 795.00). Vision The first step is to develop a realistic Vision for the business. This should be presented as a pen picture of the business in three or more years time in terms of its likely physical appearance, size, activities etc. Answer the question: "if someone from Mars visited the business, what would they see or sense?" Mission The nature of a business is often expressed in terms of its Mission which indicates the purposes of the business, for example, "to design, develop, manufacture and market specific product lines for sale on the basis of certain features to meet the identified needs of specified customer groups via certain Business Plan: Writing Plans with Free Sample Template & Software, Business Planning, Business Planner, Business Plan Software, Business Plan Template, Sample Business Plan http://www.planware.org/businessplan.htm (4 of 18) [30-05-2012 7:55:24 AM]
  36. 36. distribution channels in particular geographic areas". A statement along these lines indicates what the business is about and is infinitely clearer than saying, for instance, "we're in electronics" or worse still, "we are in business to make money" (assuming that the business is not a mint !). Also, some people confuse mission statements with value statements (see below) - the former should be very hard-nosed while the latter can deal with 'softer' issues surrounding the business. Objectives The third key element is to explicitly state the business's Objectives in terms of the results it needs/wants to achieve in the medium/long term. Aside from presumably indicating a necessity to achieve regular profits (expressed as return on shareholders' funds), objectives should relate to the expectations and requirements of all the major stakeholders, including employees, and should reflect the underlying reasons for running the business. Values The next element is to address the Values governing the operation of the business and its conduct or relationships with society, customers, employees etc. Strategies Next are the Strategies - the rules and guidelines by which the mission, objectives etc. may be achieved. They can cover the business as a whole including such matters as diversification, organic growth, or acquisition plans, or they can relate to primary matters in key functional areas, for example: The company's internal cash flow will fund all future growth.r New products will progressively replace existing ones over the next 3 years. r All assembly work will be contracted out to lower the company's break-even point. r Goals Next are Goals. These are specific interim or ultimate time-based measurements to be achieved by implementing strategies in pursuit of the company's objectives, for example, to achieve sales of $3m in three years time. Business Plan: Writing Plans with Free Sample Template & Software, Business Planning, Business Planner, Business Plan Software, Business Plan Template, Sample Business Plan http://www.planware.org/businessplan.htm (5 of 18) [30-05-2012 7:55:24 AM]
  37. 37. Programs The final elements are the Programs which set out the implementation plans for the key strategies. It goes without saying that the mission, objectives, values, strategies and goals must be inter-linked and consistent with each other. This is much easier said than done because many businesses which are set up with the clear objective of making their owners wealthy often lack strategies, realistic goals or concise missions. For more information on strategic planning, refer to other papers in this series entitled Developing a Strategic Business Plan (and its accompanying worksheet) and Devising Business Strategies, and consider utilizing the free Online Strategic Planner. See also a sample strategic plan - you may wish to print it for reference purposes. Need More Assistance? Have a look at: Exl-Plan Financial Projections Plan Write Business Planner Plan Write Marketing Planner Plan Write Expert Business Planner Quick Insight Business Idea Assessor Business Insight Strategy Evaluator Top of Page 3. Before Writing the Business Plan This section deals with preparatory issues, structure & content, and length & time scale for the preparation of a detailed plan. Preparatory Business Planning Issues Before any detailed work commences on writing a comprehensive business plan, you should: Clearly define the target audienceq Business Plan: Writing Plans with Free Sample Template & Software, Business Planning, Business Planner, Business Plan Software, Business Plan Template, Sample Business Plan http://www.planware.org/businessplan.htm (6 of 18) [30-05-2012 7:55:24 AM]
  38. 38. Determine its requirements in relation to the contents and levels of detailq Map out the plan's structure (contents page)q Decide on the likely length of the planq Identify all the main issues to be addressed.q Shortcomings in the concept and gaps in supporting evidence and proposals need to be clearly identified. This will facilitate an assessment of research to be undertaken before any drafting commences. Bear in mind that a business plan should be the end result of a careful and extensive research and development project which must be completed before any serious writing of a plan should be started. Under no circumstances should you start writing a plan before all the key issues have been crystallized and addressed. To get started, use the outline below to prepare the basis for your plan. Bear in mind that if a credible and acceptable outline plan cannot be compiled then it is highly improbable that a more comprehensive plan can be prepared. Take a moment to complete or view the results of these surveys: Survey about Strengths & Weaknesses of Businesses Survey about Writing a Business Plan For further practical guidance on these matters, review the following: White paper offering Insights into Business Planning.1. Checklist for Preparing a Business Plan.2. Free-Plan - business plan template & guidelines (Word format).3. Comprehensive Business Plan Guide.4. Structure & Content of a Business Plan A typical business plan comprises the following main elements: Brief Introduction setting out the background and structure of the plan.1. Summary of a few pages which highlights the main issues and proposals.2. Main Body containing chapters broken into numbered sections and subsections.3. Appendices containing tables, detailed information, exhibits, etc. referred to in the text. 4. The outline presented below in conjunction with the comprehensive Business Plan Guide could serve as the basis for a detailed business plan. Business Plan: Writing Plans with Free Sample Template & Software, Business Planning, Business Planner, Business Plan Software, Business Plan Template, Sample Business Plan http://www.planware.org/businessplan.htm (7 of 18) [30-05-2012 7:55:24 AM]
  39. 39. Length & Time-scale for Business Planning Whilst the sheer length of a business plan may bear no relation to the underlying prospects of a business, it is likely that a well-developed plan would be at least twenty pages long plus appendices. The elapsed time needed to produce a detailed plan might be between twenty and one hundred days. This would be determined not only by the complexity and scale of the venture, but also by the scale and maturity of the business and relevant experience and skills of the management team. Whilst the task of writing the plan itself may only take a relatively short time, be sure to allocate enough time to the research, preparatory work and the underlying thinking and discussion. For more guidance on the length of a plan and the time-scale involved, have a look at Insights into Business Planning. Top of Page 4. Planning the Business Plan Develop an Outline Business Plan Start by defining an outline (i.e. a table of contents) of your plan. This will allow you to to concentrate on the essentials of planning the business rather than becoming too absorbed in the detailed drafting of your plan. It will allow you to see the wood from the trees. Having devised the basic outline for your business plan, the next task is to expand this to include subheadings and appendix titles (see the Business Plan Guide for detailed suggestions). This extended structure should be critically reviewed to ensure that all the salient elements of the plan are included and that it has a logical flow. This approach should also ensure that the plan has an appropriate levels of detail and is correctly targeted at its audience - investors, directors/shareholders, financial institutions etc. For example, a structure which is mainly devoted to detailed technical descriptions of products would be completely unsuited to a plan being used to raise bank finance. Prepare a Business Planning Work Program Once the plan's structure has been defined, it can be used as a checklist and basis for a work program and timetable to complete the plan. This work program will often entail extensive research and thought prior to the commencement of writing. For example, formal market research may be needed before sales volumes and prices can be determined. Another example: professional advice may be required to assess capital expenditures in relation to the acquisition of premises and so on. The work program could correspond to key sections of the proposed plan and could include timetables, resource allocations and cost estimates as indicated in the following chart: Business Plan: Writing Plans with Free Sample Template & Software, Business Planning, Business Planner, Business Plan Software, Business Plan Template, Sample Business Plan http://www.planware.org/businessplan.htm (8 of 18) [30-05-2012 7:55:24 AM]
  40. 40. Section of Plan Researched by Written by Elapsed time (weeks) Cost ($) Priority Key Actions Further Suggestions for Business Planning Some additional tips and suggestions: Be absolutely clear about the primary purpose and audience of the plan from the outset. If the plan has to serve multiple purposes, consider producing tailored versions (or tailored summaries). q Allow enough time to produce revised drafts of the plan - three/five drafts would not be unusual.q Write the Introduction, Summary and Conclusion of the plan only after the plan's main parts have been finalized. q At an early stage, make some high-level sales and financial projections (covering 1-3 years) to explore the general direction and size of the business, likely viability and possible funding amounts and mix. For this purpose, consider using the Quik-Plan facility within Exl-Plan, our range of financial planners for use with Excel. q If the elapsed time needed to prepare the plan and commence its execution is lengthy, set the start date for financial projection close to the commencement of execution. For example, if you begin preparing a plan in January and hope to raise startup finance by October, the start date for projections might be set to September. Any expenses incurred before this date could be rolled up into the opening balance sheet for the projections. q Seek external assistance sooner rather than later. This may take the form of software tools, consultancy assistance in the form of specific assignments, or mentoring and counseling on an as required basis. q If planning a significant business, ensure that a management team has been identified (and possibly in place) before the plan is finalized. q Identify and cultivate possible key recipients of the plan during the plan's preparation. This will ensure that when the plan is finally presented, these contacts will have some prior knowledge of its contents and the promoters and, where appropriate, the views of contacts may have been taken into account during the preparation process. q Start compiling the plan at the sections devoted to market research/analysis and sales forecasts/plans, or with details of the proposed product/service offerings. Leave the detailed financial projections aside until all details in relation to sales, costs, expenses, operations, capital investment and possible sources/types of finance have been resolved q For further help, check out: Business Plan: Writing Plans with Free Sample Template & Software, Business Planning, Business Planner, Business Plan Software, Business Plan Template, Sample Business Plan http://www.planware.org/businessplan.htm (9 of 18) [30-05-2012 7:55:24 AM]
  41. 41. The white paper entitled Insights into Business Planning which has been based on the views of hundreds of people who have prepared business plans q Free-Plan, our free Business Plan Guide and Template (for Word)q The 30-point Checklist for Preparing a Business Plan.q The comprehensive Business Plan Guide.q If you have a problem or query relating to the compilation of a business plan which is not covered in the various white papers, you may wish to use our free and confidential Online Business Plan Advice Service. Need More Assistance? Have a look at: Exl-Plan Financial Projections Plan Write Business Planner Plan Write Expert Business Planner Top of Page 5. Outline the Business Plan The next section presents an outline structure for a business plan. Feel free to change this outline to suit your project and its state of development. It can be readily expanded to become a 'full-blown' business plan by extending the level of detail as explained in the Business Plan Guide. Note: A free 150-page Business Plan Guide and Template (Word format) incorporating a similar outline structure and additional detail is available for downloading here. The suggested page lengths for a comprehensive plan are given in parenthesis after each section's heading within the outline. A small, straightforward business should work within the minimum page lengths whereas a large, complex business seeking a substantial external investment might hit the maximum page lengths. Note the importance of marketing and sales in terms of the suggested number of pages for these sections. For more guidance on the length of business plans, have a look at Insights into Business Planning. Business Plan: Writing Plans with Free Sample Template & Software, Business Planning, Business Planner, Business Plan Software, Business Plan Template, Sample Business Plan http://www.planware.org/businessplan.htm (10 of 18) [30-05-2012 7:55:25 AM]
  42. 42. Avoid going into too much detail within the plan's body by placing detailed or supplementary material in accompanying appendices. Bear in mind that most investors, bankers etc. dislike having to read overlong business plans just as much as entrepreneurs and managers dislike writing the plans in the first instance! Work on the assumption that whoever reads your plan will be completely unfamiliar with your business or project and will be seeking answers to relatively basic questions and key issues, for example, what will the business do, will it make money etc. For further information on business planning issues, refer to other papers in this series which cover insights into business planning, financial planning, cashflow forecasting, strategic planning, devising business strategies and managing working capital. Finally, you should review the contents of the Business Plan Guide. Note that a free Business Plan Template for Word (48 pages) and a complementary Guide (supplied as a 90+ topic Help file and as a 100+ page PDF file for printing) incorporating this outline structure and additional detail is available for downloading here. Top of Page 6. Business Plan Outline Use the outline below as the "road map" for your plan and then write up each section concisely but comprehensively. Only address matters of real substance and major significance within the main sections of the plan. 1. Introduction (1) Introduce the plan. Explain who wrote it, when and for what purpose. Give contact details. See 1. Introduction within the Business Plan Guide for more info. 2. Summary (1-3) Write last. Present the highlights of the plan. See 2. Summary within the Business Plan Guide for more info. 3. Strategic Overview (1-2) Present the "big picture". What are the central purposes and activities of the planned business? What are its SWOTs? What are its major (long term) objectives, key strategies and prime goals ? See 3. Strategic Overview within the Business Plan Guide for more info. Business Plan: Writing Plans with Free Sample Template & Software, Business Planning, Business Planner, Business Plan Software, Business Plan Template, Sample Business Plan http://www.planware.org/businessplan.htm (11 of 18) [30-05-2012 7:55:25 AM]
  43. 43. Get Strategic Planning Help: Free Online Strategic Planner for creating a 3-page strategic plan. See Also: Expert tools for Assessing Business Ideas (US$ 229.95) and Evaluating Marketing Strategies (US$ 795.00). 4. Present Status (1-5) Summarize achievements and performance (financial, sales, technical etc.) to date. Introduce the stakeholders in the business. See 4. Present Status within the Business Plan Guide for more info. 5. Product/Service Offerings (1-3) Keep descriptions short and confine them to broad groups. Explain briefly what makes them special. See 5. Product / Service Offerings within the Business Plan Guide for more info. 6. Profiles of Target Markets (3-6) Size, segments, trends, competition and user/customer profiles. See 6. Profiles of Targets Markets within the Business Plan Guide for more info. 7. Marketing Strategies, Sales Plans & Projections (3-6) How will the business market its products/services and sell to customers? What sales will be achieved in its main markets? How will it deal with competitors ? Indicate costs. See 7. Marketing Strategies, Sales Plans & Projections within the Business Plan Guide for more info. 8. Technology and R&D (0-2) If relevant, explain progress, plans, resources and highlight any technological advances. See 8. Technology and R&D within the Business Plan Guide for more info. 9. Operational/Manufacturing Plans (2-5) Cover distribution & service activities and/or manufacturing. Highlight major elements only. Indicate organization, resources, costings etc. See 9. Operational / Manufacturing Business Plan: Writing Plans with Free Sample Template & Software, Business Planning, Business Planner, Business Plan Software, Business Plan Template, Sample Business Plan http://www.planware.org/businessplan.htm (12 of 18) [30-05-2012 7:55:25 AM]
  44. 44. Plans within the Business Plan Guide for more info. 10. Management & Administration (2-3) Introduce the proposed management team, structure etc. Indicate administrative arrangements and specify overhead costs. See 10. Management & Administration within the Business Plan Guide for more info. 11. Financial Projections (4-8) Use simple tables to present key financial projections e.g. summary P&L, cashflows, balance sheets and key ratios. Place the detailed analyses in appendices. See 11. Financial Projections within the Business Plan Guide for more info. For more help, download a trial version of our financial planners - Exl-Plan (for Excel) - and review its annual output reports and Textual Summary Report. 12. Funding Requirements & Proposals (0-2) If applicable, summarize funding requirements, possible sources, likely terms, and, for investors, the projected return on their investment. Be realistic!! See 12. Funding Requirements & Proposals within the Business Plan Guide for more info. 13. Implementation (1-3) Explain the major decision points, time scale and actions required by management and others to progress the plan. See 13. Implementation within the Business Plan Guide for more info. 14. Conclusion (1) Indicate why the business will succeed and why it should be supported. See 14. Conclusion within the Business Plan Guide for more info. Appendices Use appendices at the very back of the plan to present important background data and detailed plans. This will avoid disrupting the flow of the plan or cluttering it with excessive detail. See Appendices within the Business Plan Guide for more info. For further information on business planning issues, refer to other papers in this series which cover insights into business planning, financial planning, cashflow forecasting, strategic planning, devising Business Plan: Writing Plans with Free Sample Template & Software, Business Planning, Business Planner, Business Plan Software, Business Plan Template, Sample Business Plan http://www.planware.org/businessplan.htm (13 of 18) [30-05-2012 7:55:25 AM]
  45. 45. business strategies and managing working capital. Finally, you should review the contents of the Business Plan Guide. Need More Assistance? Have a look at: Exl-Plan Financial Projections Plan Write Business Planner Plan Write Expert Business Planner Free Tools from PlanWare Business financial planner for high-level, integrated 2-year projections using Excel - details and download links for Exl-Plan Free. q Excel-based, comprehensive, rolling 6-month cash flow planner - details and download links for Cashflow Plan Free. q Business plan template & guidelines (Word format) - details & download link for Free-Plan. q Online strategic planner for creating a 3-page strategic plan - details and sample plan. q More free tools here.q Top of Page 7. Writing the Business Plan The following suggestions may be of assistance when drafting the plan: Build the detailed business plan on a carefully considered outline (table of contents) - see the business plan outline above. 1. The most important and difficult sections to prepare relate to marketing and sales as these can make or break not only the business plan but also the business itself ! 2. Support market and sales projections by market research. Ensure that there is a direct relationship between market analysis, sales forecasts and financial projections. 3. Business Plan: Writing Plans with Free Sample Template & Software, Business Planning, Business Planner, Business Plan Software, Business Plan Template, Sample Business Plan http://www.planware.org/businessplan.htm (14 of 18) [30-05-2012 7:55:25 AM]
  46. 46. Assess competitors' positions and possible responses realistically. Be realistic about sales expectations, profit margins and funding requirements. Ensure that financial ratios are in line with industry norms. Do not underestimate the cost and time required for product development, market entry, securing external support or raising finance. Consider the possibility of the double-double-half rule - double the cost or time required or halve the sales projections. 4. Restrict the level of detail on product specifications and technical issues.5. The financial projections are likely to be straightforward but decide on a sensible level of detail as regards the time horizon etc. Consider using a personal computer and a financial modeling package for the projections. See our range of financial planners - Exl-Plan (for Excel) - which can be downloaded from here. s For further specific information on financial planning for businesses, refer to the page entitled Preparing Financial Projections accessible from the PlanWare site. s 6. If looking for external equity, be realistic about the value of the business, risks involved and possible returns, and be sure to indicate possible exit mechanisms. Put yourself in the shoes of an investor and remember the golden rule - he who has the gold makes all the rules. 7. The management section of the plan is of crucial - experience, balance, ability and commitment. If a new venture is involved, then management is likely to be its only real asset. Consider formation of a management team or strengthening management as part of the plan. Remember the five ingredients of a successful business are management, management, management, market and product (in that order, and not in the reverse order as some inventors and entrepreneurs might like to think). 8. Be positive but realistic about the business's prospects and explicitly recognize and respond honestly to shortcomings and risks. 9. When writing the plan: avoid unnecessary jargonr economize on wordsr use short crisp sentences and bullet pointsr check spellingsr concentrate on relevant and significant issuesr break the text into numbered paragraphs, sections etc.r relegate detail to appendicesr provide a contents page and number pagesr 10. Business Plan: Writing Plans with Free Sample Template & Software, Business Planning, Business Planner, Business Plan Software, Business Plan Template, Sample Business Plan http://www.planware.org/businessplan.htm (15 of 18) [30-05-2012 7:55:25 AM]
  47. 47. write the summary last.r Get a qualified outsider to review your plan in draft form and be prepared to adjust the plan in the light of comments secured and experiences gained. 11. External help and guidance in preparing a business plan can be extremely valuable. If outside help is used, make sure that the resultant plan remains your own and not that of your advisers. 12. If presenting the plan to outsiders, attach appendices and number pages. Add a contents page and bind it within attractive covers. 13. Share or Bookmark this Page More info Digg Reddit Newsvine Delicious StumbleUpon Yahoo Google Facebook Technorati Windows Live Need More Assistance? Have a look at: Exl-Plan Financial Projections Plan Write Business Planner Plan Write Expert Business Planner Top of Page 8. Introducing PlanWare PlanWare develops and sells a range of financial planning packages - Exl-Plan and Cashflow Plan - for businesses of all sizes & types. Trial versions of all products can be downloaded from our PlanWare site and many other sources on the 'Net. We also offer an extensive range of commercial software for writing business plans, market planning, assessing business ideas and evaluating strategies. PlanWare also features: Business Plan: Writing Plans with Free Sample Template & Software, Business Planning, Business Planner, Business Plan Software, Business Plan Template, Sample Business Plan http://www.planware.org/businessplan.htm (16 of 18) [30-05-2012 7:55:25 AM]
  48. 48. Business Planning Papers Business Ideas Business Strategies Strategic Plan Business Plans Business Plan Insights Financial Projections Cashflow Forecasts Working Capital Raising Finance Papers on cashflow, financial, strategic and business planning topics.q Advice on getting new business ideas, managing working capital, devising business strategies and much more. q Free business plan template (Word format).q Pages devoted to famous business quotations and examples of bad business advice and mistakes.q Basic & Free Planners for Financial Projections and more ... Our Exl-Plan range of integrated monthly/quarterly planners includes Exl-Plan Basic which uses annual assumptions to generate comprehensive 5-year projections. This simple, low-cost version (US$29) will meet many business planning needs. Get details, download free trial copy or buy & use now. Also available is a completely free version, Exl-Plan Free, which is identical to Basic but projects for just two years ahead. Details and free download. The Free and Basic versions of Exl-Plan are complemented by other more detailed, powerful versions of Exl-Plan. Get details and download trial copies. All versions of Exl-Plan include a free 150-page Business Plan Guide & Template (for Word). Top of Page 9. Copyright & Legal Stuff This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs License. This means that this page and any related files are subject to the normal rules about copyright and attribution. If you wish to make an electronic or printed copy for YOUR PERSONAL USE, you are free to do so PROVIDED THAT IT IS UNMODIFIED AND REMAINS COMPLETE IN ALL RESPECTS. All copying for commercial use requires written prior permission secured from info@planware.org. You are free to quote short extracts provided our site's URL <www.planware.org> is acknowledged as the source. Business Plan: Writing Plans with Free Sample Template & Software, Business Planning, Business Planner, Business Plan Software, Business Plan Template, Sample Business Plan http://www.planware.org/businessplan.htm (17 of 18) [30-05-2012 7:55:25 AM]
  1. A particular slide catching your eye?

    Clipping is a handy way to collect important slides you want to go back to later.

×