Business Planning 101 - Kevin Nott

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Business Planning 101 - Kevin Nott

  1. 1. Business Development Business and Marketing Planning
  2. 2. 'Cheshire Puss,' she began, rather timidly, as she did not at all know whether it would like the name: however, it only grinned a little wider. 'Come, it's pleased so far,' thought Alice, and she went on. 'Would you tell me, please, which way I ought to go from here?' 'That depends a good deal on where you want to get to,' said the Cat. 'I don't much care where-' said Alice. 'Then it doesn't matter which way you go,' said the Cat. '-so long as I get SOMEWHERE,' Alice added as an explanation. 'Oh, you're sure to do that,' said the Cat, 'if you only walk long enough.' Alice felt that this could not be denied, so she tried another question. 'What sort of people live about here?' 'In THAT direction,' the Cat said, waving its right paw round, 'lives a Hatter: and in THAT direction,' waving the other paw, 'lives a March Hare. Visit either you like: they're both mad.' 'But I don't want to go among mad people,' Alice remarked. 'Oh, you can't help that,' said the Cat: 'we're all mad here. I'm mad. You're mad.' 'How do you know I'm mad?' said Alice. 'You must be,' said the Cat, 'or you wouldn't have come here.'                                              
  3. 3. What is a Business Plan? <ul><li>A written document stating specific goals, targets and methods to achieve them </li></ul><ul><li>A phylosophy of how to operate the business </li></ul>
  4. 4. Why Have a Business Plan <ul><li>Gain better understanding of YOUR business </li></ul><ul><li>Maintain organizational focus </li></ul><ul><li>Build company value </li></ul><ul><li>Identify strengths and weaknesses </li></ul><ul><li>Understand impact of external influences </li></ul><ul><li>Attatch financial implications to organizational direction </li></ul><ul><li>Tool to evaluate decisions and opportunites </li></ul><ul><li>Secure financing </li></ul><ul><li>Plan exit strategy </li></ul>
  5. 5. Anticipated Outcomes <ul><li>Understand why a business plan is critical for success </li></ul><ul><li>Know where to obtain resources to complete plan </li></ul><ul><li>Commitment to </li></ul><ul><ul><li>Developing a written plan </li></ul></ul><ul><ul><li>Following the written plan </li></ul></ul>
  6. 6. Main Areas of Focus <ul><li>Sales and Marketing </li></ul><ul><li>Operations </li></ul><ul><li>Accounting </li></ul><ul><li>Organizational Structure </li></ul><ul><li>Long-range Planning </li></ul>
  7. 7. Sales and Marketing <ul><li>Create an aggressive but achievable plan </li></ul><ul><li>Create a marketing plan that drives sales goals </li></ul><ul><li>Identification of target market </li></ul><ul><li>Analysis of market area </li></ul><ul><li>Establish performance standards </li></ul>
  8. 8. Operations <ul><li>Establish departmental goals </li></ul><ul><li>Identify areas for improvement </li></ul><ul><li>Focus on customer satisfaction </li></ul><ul><li>Labor forecasting </li></ul><ul><li>Training schedules </li></ul>
  9. 9. Accounting <ul><li>Establish systems to measure and evaluate management </li></ul><ul><li>Identify working capital needs </li></ul><ul><li>Forecast capital expenditures </li></ul>
  10. 10. Organizational Structure <ul><li>Identify roles and tasks </li></ul><ul><li>Create organizational chart with clearly defined structure </li></ul><ul><li>Establish departments and divisions </li></ul>
  11. 11. Strategic and Long-Range Planning <ul><li>Internal Analysis </li></ul><ul><ul><li>Strengths and Weaknesses </li></ul></ul><ul><li>External Analysis </li></ul><ul><ul><li>Customers </li></ul></ul><ul><ul><li>Suppliers </li></ul></ul><ul><ul><li>Competition </li></ul></ul><ul><ul><li>Economic factors </li></ul></ul><ul><ul><li>Regulations </li></ul></ul><ul><ul><li>Technology </li></ul></ul>
  12. 12. Seven “S” Alignment
  13. 13. Who Should be Included? <ul><li>Owners and officers </li></ul><ul><li>Department Managers </li></ul><ul><li>Accountant </li></ul><ul><li>Investors </li></ul><ul><li>Consultant </li></ul>
  14. 14. When and How Long? <ul><li>Start 2 to 4 months before year end </li></ul><ul><li>Three to six weeks to complete </li></ul><ul><li>Complete prior to beginning new year </li></ul><ul><li>Actual time will vary depending on the complexity of the business and the experience in the business planning process </li></ul>
  15. 15. Components of a Business Plan <ul><li>Company Description </li></ul><ul><li>Industry Analysis </li></ul><ul><li>Competitive Analysis </li></ul><ul><li>Customer Profiling </li></ul><ul><li>Marketing and Sales Plan </li></ul><ul><li>Operations </li></ul><ul><li>Management and Organization </li></ul><ul><li>Long-term Development and Exit Strategy </li></ul><ul><li>Executive Summary </li></ul>
  16. 16. Objectives of a Planning Session <ul><li>2 to 5-year growth plan </li></ul><ul><li>2 to 5-year profit plan </li></ul><ul><li>Vision, mission and value statements </li></ul><ul><li>Detailed marketing plan </li></ul><ul><li>Key business goals </li></ul><ul><li>Labor planning </li></ul><ul><ul><li>Recruiting </li></ul></ul><ul><ul><li>Retaining </li></ul></ul><ul><li>Define exit strategy if applicable </li></ul><ul><li>Establish firm milestones </li></ul>
  17. 17. Planning Meeting <ul><li>Schedule 1 to 2 days away from the office (this time is an investment and not an expense) </li></ul><ul><li>Identify and invite attendees (get confirmation from each individual invited) </li></ul><ul><li>Schedule meeting room to accommodate needs </li></ul><ul><li>Create agenda </li></ul><ul><li>Order meals </li></ul><ul><li>Whiteboard and/or easel pad </li></ul><ul><li>Computer </li></ul><ul><li>Projector and screen </li></ul><ul><li>Notebooks, binders, pens and writing pads </li></ul>
  18. 18. What to bring to the Meeting <ul><li>Financial statements </li></ul><ul><li>Current and projected overhead costs </li></ul><ul><li>Current and projected direct costs (Equip, Materials, Labor, etc.) </li></ul><ul><li>Sales logs showing close rates and average sales </li></ul><ul><li>Marketing logs showing response rates and campaign costs </li></ul><ul><li>Operations productivity logs showing work completed / day </li></ul><ul><li>Debt information showing interest rates and payments </li></ul><ul><li>Asset listings </li></ul><ul><li>Sales Forecasts in units with unit value </li></ul><ul><li>Capital Equipment needs </li></ul><ul><li>Projected Pay increases </li></ul>
  19. 19. How Much Should I Budget for Marketing? <ul><li>Identify installation capacity (# per period) </li></ul><ul><li>Identify quantity of internal leads (service & referral) </li></ul><ul><li>Multiply # internal leads by close ratio for # installs from internal sources </li></ul><ul><li>Subtract this number from total installs needed to determine # installs needed from marketing </li></ul><ul><li>Divide this number by close ratio on marketed leads to determine # leads needed </li></ul><ul><li>Divide # leads needed by projected response rate to determine # pieces/spots </li></ul><ul><li>Multiply # pieces/spots by the unit cost to determine total cost. </li></ul><ul><li>Add to this the cost to acquire service/tune-up business using the same formula </li></ul>
  20. 21. How do I put it all together? <ul><li>Spreadsheets and wordprocessors </li></ul><ul><ul><li>Difficult and time consuming </li></ul></ul><ul><li>Commercial business planning software </li></ul><ul><ul><li>Easy and inexpensive </li></ul></ul>

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