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Simple Small Business Strategic Planning Tool

This presentation was given by Art Helmstetter at a Dayton Chamber of Commerce sponsored workshop to help small businesses learn how to develop a strategic plan for their business. For information or assistance contact

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Simple Small Business Strategic Planning Tool

  1. 1. Small Business Strategy Development Process Understand Understand Analyze Analyze Decide Act Decide Act
  2. 2. Art Helmstetter“Large and Small Business”  Managing Director, B2B Planner Ltd.  Small Business Development  Director Global Planning and Marketing  Quaker Chemical Corporation  Strategic Planning  Business Management  25 consecutive years achieving profit goals  Started up four businesses  Two start ups survive today  Grew two other businesses from 0 to over $25 MM  Education  MBA, BS & MS Engineering,
  3. 3. “If you dont know where you are going, any road will get you there.” Lewis Carrol, Alice in Wonderland “I cant change the direction of the wind, but I can adjust my sails to reach my destination.” Jimmy Dean
  4. 4. Strategy Development Agenda• The case for strategy development.• Why small businesses don’t plan.• Need to respond to a rapidly changing world• A planning model for today• Key Elements of Planning – Internal Factors – External Factors – SWOT Analysis• Planning Tools and Templates• The Simple Steps Model
  5. 5. The Brutal Facts1. Nothing you do will 100% guarantee success2. Planning can greatly improve your chance of success3. Not planning WILL greatly increase your chance of failureThis is confirmed by the large number of companieswithout business plans that fail within 5 years
  6. 6. Definition of Strategy DevelopmentA business’s process of• defining its strategy and direction,• and making decisions on allocating its resources including its capital and people.Keep It Simple by answering three questions:• "What do we do?"• "For whom do we do it?"• "How do we beat the competition?”
  7. 7. We Live in a “Hyper” World • Hyper-competitive market – Global competition – Excess capacity in the US • Hyper-Speed of Change – Accelerating technology development – Digital speed of operation • Hyper-Uncertainty – Changing economy – Changing government intervention
  8. 8. Why Businesses Don’tDo A Strategic Plan? What’s Your Reason? No one makes you “Too expensive” Takes too much time Can’t get the information Don’t know how Doesn’t work Is not fun
  9. 9. Planning Is NOT a Do It Yourself Process• You don’t do it often• You need a process• It takes time• You need perspective and objectivity• It takes research
  10. 10. Who Can Help?• Advisory Committee• Trained Staff Member• SCORE Mentor• Sole Practitioner• Large Consultant But YOU must OWN the process!
  11. 11. A Plan Is the Conclusionof Strategy Development Strategic Thinking What Might Happen Options Strategic Decision Making What Will We Do Decisions Strategic Planning Business How Will We Do It Plan
  12. 12. Alternate Business Planning Models Serial Planning Model For Stable Conditions Business Strategic Plan Budget Plan
  13. 13. Alternate Business Planning Models Dynamic Planning Model for Changing Conditions Both models use similar elements and analyses, but the process is very different.
  14. 14. Alternate Business Planning Models Dynamic Planning Model for Changing Conditions Customer External Behavior Factors Strategic Thinking and Analysis Business Plan Internal and Budget Capabilities Both models use similar elements and analyses, but the process is very different.
  15. 15. Elements of StrategyFormulation Vision Analysis Mission Segment Market ation Research SWOT
  16. 16. TraditionalMarket Research • Market Size • Growth Potential • Customer Needs and Wants  Buyer Behavior  Preferences • Competitive Intelligence
  17. 17. SimplifiedMarket ResearchFocus on your “addressable” microcosmFocus on YOUR customers What do your customers really buy from you?  Buyer Behavior  Preferences Find the common characteristics Can you sell your customers different things? Who do your customers compete with?  Can you sell to them?Focus on YOUR competitors
  18. 18. Customers:Who Buys from You Demography Occasional Geography Buyers Where Does Your business come from? Repeat Consumers Buyers Businesses
  19. 19. Customers: Segmentation Dividing the market into groupsProduct they use How they use product When and where used Use a segmentation dimension Industrial Commercial Consumer Identify underserved, high value groups Income Career or Industry Current Product UseUse common elements to select products and marketing
  20. 20. SimplifiedCompetitor Research Focus on YOUR market Google ‘em Visit their website Search in directory listings BUT ALWAYS BE ETHICAL! Yellow pages digital and print. Google and Yahoo local Angie’s List Check out their reviews Talk to their customers, employees, suppliers and competitors
  21. 21. Supply or Value Chain Determine your position in the value chain How far are you from the final userProduce Make Assemble Sell Service RawMaterial Parts Product Product Product
  22. 22. Five Forces ofCompetitive Intensity New Entrants Supplier Competitive Buyer Power Rivalry Power Product Technology
  23. 23. Focus Your Actions Based on your SWOT Internal External Strengths Opportunities Manufacturing New MarketsPositives Innovation New Application Marketing/sales New Technology Weaknesses ThreatsBarriers Cost Competition Marketing/sales Economy Staff skills New Technology
  24. 24. Focus Your SWOT on the“Make or Break” Issues
  25. 25. Focus Your ActionsBased on your SWOT Internal Factors Strengths Weaknesses Opportunities Threats Confront Avoid External Factors Exploit Search
  26. 26. Actions To Grow Market • Increase reach in existing Expansion • Find new markets Product • New business w/customers Expansion • New products • Products Innovation • Application • Processes
  27. 27. Actions to ImprovePerformance/Efficiency • Credit Policy Financial • Pricing • Capital investment Operations • Improve processes • ERP systems IT • Web based sales, marketing • Rewards & recognition HR • Capability building
  28. 28. FOCUS on 1-2 Goals Goal 1: Strategy 1: Implement the Timeline: Team ________________________________________________________________ ________________________________________________________________ Action Items: _________________________________________________________________________________________________________ Timeline: _________________________________________________________________________________________________________ Timeline: TASK WHO BY WHEN  Resources needed ____________________________________________________________________________ ____________________________________________________________________________ Enabling factors/barriers ____________________________________________________________________________ ____________________________________________________________________________ RESULTS: __________________________________________________________________________________________________________________ ______________________________________________________________________________
  29. 29. Eight Strategic Measures to Monitor and Update 1. Executive Summary 8. Champions 2. Goals 7. Time Lines 3. Objectives 6. Outcomes/Results 4. Strategies 5. Action items 32
  30. 30. Why Strategies Fail • LACK OF STRATEGIC FOCUS 33
  31. 31. Why Strategies Fail • LACK OF STRATEGIC FOCUS • Inaccurate or biased intelligence gathering • Failure to identify weaknesses and threats • The strategy is a poor fit between the external environment and an organizations resources • Overly optimistic about resources and abilities • Inadequate support of others • Lack of discipline to follow the plan • Not making timely adjustments when needed 34
  32. 32. Focus on the Future• Commit to writing a strategy and plan.• Use a proven process, and• An experienced person to facilitate the process.• Meet with that person monthly to follow up on the strategy and plan
  33. 33. Now Go for a Ride Steer Pedal Balance Look Ahead
  34. 34. Thank You! Understand Analyze Decide Act
  35. 35. Focus Your Strategy With SCORE’s Simple Steps
  36. 36. Current SituationTraditional Model Maturity Start-up Initial Rapid Growth Expansion Stability Yesterday’s Paradigm  Slow Pace (Years) Survival Decline  Many Opportunities  Subtle Impact  Specialization (Isolation)  Agriculture Based Economy  Product Based Economy  Services Based Economy Worksheet Current Situation (Position)
  37. 37. Current SituationEmerging Model Development Defense Start-up Offense Decline Compete Survival Grow Recovery Expansion Tactical Strategic Shaped Shaping Today’s Paradigm  Hectic Pace (Months)  Few Opportunities  Volatile Impact  Diversification (Collaboration)  Experienced Based Society
  38. 38. Welcome to the ExperienceDriven EconomyExperience Loyal Consumers(Unprecedented Consumer Mix)Digital Customers(Connected, Online and Influenced)Interactive Communications(Not Just One-way Advertising)Customer Relationships Experience(Not Just a Sale) Driven EconomyHectic Pace(Immediate not prolonged)Limited Opportunities(To Succeed or Fail)Volatile Impact(Business Outcomes)Diversification(Not specialization)Collaboration(Not isolation)
  39. 39. Small Business Size, Scopeand Type of Business Entrepreneur 1-5 Business Change Cycles At each of these levels, Vertical businesses go through Market Business significant transition in Group 6-25 several key areas. Vertical Local Employees Business Company Neighborhood Organization Segment 26-125 Investment Doctor’s Revenues National Cash flow Office Regional Expenses Corporation Offerings 126-500 Hospital Facilities Healthcare Virtual Resources Global Systems Enterprise Processes 500 AboveNAICS Classification
  40. 40. Current SituationDevelopment – Start Up  Need (Pending motive)  Desire (Feasibility)  Ability (Qualification)  Timing (Opportunity)  Action (Start-up) Simple Steps to Starting a Business Establish a viable for-profit business or non-profit organization
  41. 41. Simple Steps to Starting aBusiness - Start-up Track Step 1: Awareness Advantage SCORE . . . (Concept/Interest) Integrated Business Performance Solutions  Simple Steps Workshop Series Step 2: Awareness Integrated or Segmented Track (Personal Qualification)  Scheduled (Open) Workshops Combined Track Step 3: Evaluation (Business Feasibility)  Aligned Mentoring Business Start-up Coaching Step 4: Commitment  SCORE Resources (Network) (Decision/Funding) Step 5: Implementation (Preparation/Launch) Worksheet Worksheet Business Development Qualification and Decision Process Feasibility Guide
  42. 42. Current SituationRecovery – Tactical  Shaped by Marketplace  Disrupted by Industry  Majority and Laggards  Declining or Survival  Involuntary Disruption Simple Steps to Business Recovery Need to move the business out of the current situation
  43. 43. Simple Steps to RecoveryDefense Track- Tactical  Step 1: Awareness (External Perspectives) Advantage SCORE . . . Integrated Business Performance Solutions  Step 2: Discovery  Simple Steps Workshop Series (Internal Insights) Integrated or Segmented Track  Step 3: Evaluation  Scheduled (Open) Workshops (Sustainable Business Model) Combined Track Isolate Challenges  Aligned Mentoring Business Recovery Coaching  Step 4: Commitment (Solution Recommendations)  SCORE Resources (Network) Prioritize Initiatives  Step 5: Implementation (Execute and Management)  Step 6: Measurement (Measure Results and Repeat) Worksheet Business Recovery
  44. 44. Current SituationVoluntary Transition  Shaping Marketplace  Disrupting Industry  Innovators/Early Adaptors  Competing Aggressively  Steady Growth  Voluntary Evolution Simple Steps to Business Expansion Want to move the business to the next level
  45. 45. Simple Steps to ExpansionOffense - Strategic  Step 1: Awareness (External Perspectives) Advantage SCORE . . . Integrated Business Performance Solutions  Step 2: Discovery (Internal Insights)  Simple Steps Workshop Series Integrated or Segmented Track  Step 3: Evaluation  Scheduled (Open) Workshops (Sustainable Business Model) Combined Track Isolate Challenges  Aligned Mentoring  Step 4: Commitment Business Expansion Coaching (Solution Recommendations) Prioritize Initiatives  SCORE Resources (Network)  Step 5: Implementation (Execute and Management)  Step 6: Measurement Worksheet (Measure Results and Repeat) Business Transition
  46. 46. Common Concepts –Different ExecutionDevelopment Defense OffenseStart-up Track Recovery Track Expansion TrackEntrepreneur (BP) DNA Business Operations DNA Business Performance DNALeadership Priorities (Balance) Leadership Balance (Priorities) Leadership Balance (Priorities)Start-up Leadership Alignment Recovery Leadership Alignment Transition Leadership AlignmentDevelopment Process (5 Steps) Recovery Process (6 Steps) Transition Process (6 Steps)Development Challenges Survival Challenges Growth Challenges Start-up Problems Survival Problems Competitive Needs Start-up Needs Recovery Needs Growth Opportunities Start-up OpportunitiesBuild Business Model Fix Business Model Expand Business Model Business Performance Priorities Business Performance Priorities Business Performance Priorities Business Operations Priorities Business Operations Priorities Business Operations PrioritiesFoundation (Scheduled) Initiatives Tactical (Immediate) Initiatives Strategic (Planned) InitiativesEvaluate External Forces Manage External Forces Leverage External ForcesResource Identification Resource Allocation Resource CommitmentDevelopment Funding Sources Recovery Funding Sources Expansion Funding Sources
  47. 47. A Sustainable Organization ModelExternal versus Internal Balance External Forces of Business Targeted Marketplace (Geographic Segment) Change The Demand Side Targeted Consumer Stakeholders -  Society Communities Community, (Consumers) (Customer Segments) Media and Other  Economy Communities (Money)  Innovation The Supply Side Business Business Supply Chain (Technology) Performance Operations Partner, Alliance  Marketplace Strategies Strategies Professional (Commerce) Communities Front-office Back-office  Events (Environment)  Policy Leadership (Stake Holder) DNA (Standards) Leadership Allocation (Self) or Balance (Team Leadership Lifecycle Alignment
  48. 48. Advantage SCORE . . .From Challenges to SolutionsToday’s volatile business climateis a lot like a tennis match,challenges come at you prettyfast. Whether you are winning,losing or just starting out inbusiness, SCORE can help youmatch point and win.Regardless of business size, scope,type, or current situation,seasoned SCORE professionalsleverage integrated solutions withyears of life/work experience to Volatile Businessgive you an “advantage” in today’s Climatechallenging business environment. The fastest tennis serve on record for men is 156MPH and 139MPH for women