Your Business Plan: Roadmap To Success Presented by: Linnea Blair, Advisors On Target February 1, 2012

Did You Plan Your Entry Into Business? Before starting your business did you: Do research? Set out your goals? Or was it based on: Back-of-an-envelope calculations? Without benchmarks or time frames?

Why Did You Go Into Business? Usual reasons are: Independence - being your own boss Higher income prospects A better lifestyle with more free time The personal satisfaction of taking on a challenge Building a future for your family

Have You Achieved Your Goals? Is the reality more like: Working long hours Stress Risks Less family time No vacations Full responsibility Taxes Bureaucracy Bad debts Constant minor emergencies

Is Your Business Running You? Are you working IN the business, or ON it? Negatives are a constant feature Your business is out of control You don’t have time to look at the bigger picture

Take Control Through Business Planning Developing a Business Plan will develop your business management knowledge. You will become a better manager You will improve your chances of business success

If You Only Walk Long Enough... Deciding on which way to go (using a strategy) depends on knowing where you want to get to (having goals) Without a goal there is no plan for getting anywhere – you’re just doing a long walk (maybe in circles)

What We’ll Cover Today What’s in a business plan Why every business needs a business plan How a business plan allows you to manage Using the plan to set and achieve business goals Monitoring progress towards goals How to prepare a business plan How to use a business plan

What’s In A Business Plan Typical content (chapters) in a business plan: Executive Summary Industry Analysis Market Analysis Competitive Analysis Marketing Plan Management Plan Operating Plan Financial Plan Appendices And Exhibits

Don’t Only Start Ups Need A Business Plan? A good business plan is your most important management tool It’s an essential for both start ups AND ongoing businesses

Why Every Business Needs A Business Plan Surviving competition and growing your business, requires that you be a good manager Managing involves having clear objectives, understanding the market, managing your money properly, as well as producing quality products or services Developing a business plan gives you the information you need to MANAGE your business

How A Business Plan Works Describes your current situation - where you are now Describes how you see the business some time in the future - where you want to get to Describes your strategies for how you are going to get there Sets specific goals to be reached by particular dates so you can track your progress as you go

Business Profile – Where You Are Now Provides a big picture view of the business Focuses on how good your business idea is or how saleable a product you actually have

Where You Are Now – Reality Check Being forced to focus on issues provides a reality check for your business

Where Do You Want To Get To – Setting Goals The profile section of the plan includes information on where you want to get to in the form of some specific goals These goals are really important because they will determine your whole business strategy Goals need to be based on a good grip on reality

How Do You Get There – Strategies Develop strategies (tactics) to make the goals a reality This is where some really hard thinking is necessary May need more than one strategy per goal

How Do You Get There - Milestones A strategy is made up of a number of discrete steps These steps are called milestones because as you get each one done you have reached another milestone towards implementing the strategy

Modeling Strategies The same objective might be reached in a number of ways Each way (strategy) will require different inputs and involve different costs Developing a business plan will bring these issues to light and provide the opportunity to model out the consequences of choosing a particular strategy

Strategy - Marketing And Sales For your business to be successful and profitable you must have a clear understanding of your customers, your product strengths and the competition The market analysis section of a business plan examines all these things Knowing them you can develop a detailed explanation of your sales strategy, pricing plan, proposed advertising and promotion activities, and the product or service's benefits that then becomes your marketing plan

Strategy - Finances The Finance section of the plan includes a description of your detailed financial statements, a financial statement analysis and your funding requirements Also includes projections that set forth the projected timing of revenues and expenses to show whether and how the business will meet its obligations to vendors and others who provide the business with goods or services Projections can be tied directly to planned operational results

Monitoring Progress ‘If you can’t measure it, you can’t manage it’ Monitoring means setting up a process to measure the actual outcomes of your actions against the results you had planned on happening This takes discipline but is an essential ingredient to a successful business planning process

Monitoring Milestones Each of those milestones you decided on should have a timeline attached – a ‘to be completed by’ date An open ended milestone isn’t worth writing down Milestones may be scheduled to happen in a sequence or in parallel By setting dates you can gauge your progress and compare your projections to actual accomplishments If a date is reached and the milestone isn’t ready then you know it and can revise the plan

Monitoring Revenue - Actual vs Planned Results Set financial goals and budgets and regularly monitor for deviations between actual and planned results These provide clues that you can use to tweak or fine tune certain elements of the plan Monitoring Revenue - Actual vs Planned Results The second thing you need to monitor is the financial results of your activities. These issues can only be picked up if you have set financial goals and budgets and are regularly monitoring for deviations between actual and planned results. It’s these that will provide clues that you can use to tweak or fine tune certain elements of the plan. For example, if sales consistently outperform your projections, you might amend the plan to set more aggressive goals. On the other hand, you might want to take certain steps to take advantage of any additional cash flow, such as retiring debt early or investing in a new piece of equipment. That's why a good business plan has definite targets associated with a timetable for achievement. It's a lot easier to know how you're doing if you started out with solid expectations about what needs to be achieved by when. Wait until the end of the year and it may be too late to recoup the situation.

Managing Business Performance Stop operating according to the ‘savings jar’ approach Amount of money left over isn’t a good indicator of business viability Only tracking how preset milestones are being reached, or not, will alert you to developing opportunities and threats

What Else Is A Business Plan Good For Your business plan is your business’ resume and operates in the same way as a personal resume – it details your qualifications and experience to bolster the confidence of others in your capabilities, or rather those of your business, how well it is doing and what it could be capable of doing It can come in useful for: Negotiating supplier arrangements Arranging finance

Preparing A Business Plan Every business needs a unique plan but the basic elements are the same in all business plans and so is the basic process to create one That process doesn’t have to be complicated and the plan needn’t be a very big document Requires commitment to putting in the time and effort necessary to collecting the data that and thinking through your strategies You must be objective, critical and focused when doing it The more effort taken to collect data and formulate plans, the more beneficial and effective the business plan will be

How To Do It The basic business planning process involves these basic steps: Obtain an accurate financial and physical outline of the business that objectively describes the current health of your business Describe in more detail the strengths and weaknesses of your business Set out your personal and business goals for both the short and long term Put in place the ‘to do’ action list which indicates when different activities need to be started and finished You may need some assistance, like your CPA or business advisor Provide financial data Good for putting giving reality check

Business Plans Need To Be Used A business plan is only useful if you use it Make yours a “living” document

Planning Is A Process Circumstances change so a business plan needs regular review Typical triggers for review: Beginning of new financial period You need financing, or additional financing You have developed/are thinking of developing a new product/introducing a new service Significant change in the market (e.g. shifting customer tastes, altered regulations) Change in the scale of your business (taking on extra team or a partner)

Conclusion While the preparation of a business plan may not guarantee success…without one you are taking a journey with only a vague destination in mind and without a road map on how to get there A well developed plan that documents the ‘wheres’, ‘hows’ and ‘whys’ of your business will focus and direct your activity in harnessing all the necessary resources to achieve success

Your Business Plan – Roadmap to Success Webinar Series 4 Wednesdays in Feb-March - 4 In-Depth Classes on Creating a Business Plan for your business! Feb 22 – Your Business Plan: Your Business Model Feb 29 – Your Business Plan: Your Financial Plan Mar 7 – Your Business Plan: Your Marketplace Mar 14 – Your Business Plan: Executive Summary – plus Q&A Session Sign up today: advisorsontarget.com/events/business-plan-classes Investment is just $147 for all 4 sessions if you sign up by Feb 15th. ($197 after) All classes are recorded so you can view and listen later

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Contact me for more information about growing a sustainable business! Advisors On Target Business Coaching & Marketing Consulting Linnea Blair Office: 619.291.3700 Email: Lblair@AdvisorsOnTarget.com Web: AdvisorsOnTarget.com Twitter: AdvisorOnTarget Facebook: facebook.com/AdvisorsOnTarget LinkedIn: linkedin.com/in/linneablair