You Have Survived, Grown, or are Launching – Time to Dust off and Update Your Business Plan

Many organizations – large and small have been in survival mode for a while. I have seen many that have stabilized and are looking ahead to grow and/or re-position. Other organizations – especially in the E-Commerce space – are on a fast paced growth curve. Many have new ownership. Some entrepreneurs are finally ready to launch their new business. All these stages can benefit from a well thought out “Strategic Business Plan”, incorporating the qualitative and quantitative aspects, in order to move your organization forward.

There are several reasons to develop a “Strategic Business Plan” and prior to beginning it’s important to understand the purpose and the audience for the plan.  These include:

  • Funding is needed either for a start up or growth. Potential investors are the audience.
  • Alignment is needed to manage internally. The internal management team is the audience.
  • Buy off is needed for direction and/or financials. Boards of Directors or new owners are the audience

Whatever the reason and whoever the audience the time horizon for planning has shortened. The traditional “five year long range plan” does not seem relevant any longer. But it does seem prudent to use the current year – with a realistic forecast – as a basis. Next year can be added on that and then the following year can be based on that. So business plans become a three year plan which seems very realistic. Many of us have experienced years 4 and 5 being “pipe dreams” which were never achieved. Focusing on the current year and the next two is much more manageable and achievable.

From my perspective insuring that the quantitative is supported by the qualitative is crucial. Too many of us have been involved with business plans that are driven solely by financial goals with no plans as to how to achieve them. All the different functions – merchandising (product dev, design, sourcing), marketing and branding, channels of distribution – must develop solid qualitative plans. The “puzzle pieces” need to fit together. The “Strategic Business Plan” must also include the “people, processes, and systems” which are needed to execute the plan. Finally the financials need to be a summary of all the plans and what is needed to execute them.   

The following outline is a useful tool when developing a “Strategic Business Plan” for any Retail or Wholesale business. (Sections are usually edited or re-arranged depending on purpose, audience, and stage of growth):

 

  • THE  VISION
    • What is the future “ideal” state of the organization?
  • THE MISSION
    • What wants/needs will/do you fill for your customers that are unique?
  • The Competitive Advantage
    • What does your Brand represent?
    • Who is the customer? Demographics and Psychographics
    • Who is the competition? What do they provide and how?
    • What are the past, present and expected future industry trends?
    • What makes your business different than your competitors?
  • The Strategic Business Plan
    • The Plan addresses how you will fulfill the Mission from above.
  • What products or services will you offer at what price? How will they be assorted?
  • What channels of distribution will you use and how?
    • Bricks and Mortar
    • Web
    • Catalog
    • Wholesale
    • Big box, chains, specialty
  • How will you market? How will you get and retain customers?
  • Operational and Financial Execution Plan
    • People
      • What are the current organizational issues? How will they be addressed?
    • Processes
      • What processes need to be implemented or evolved?
    • Systems
      • What systems need to be implemented or evolved?
    • Facilities
      • What facilities are needed or need to be improved or expanded?
    • Financials and Financing
      • Financial Statements - P&L, Cash Flow, Balance Sheet
      • What financing is needed?
  • Potential risks and contingencies
    • Risks must be included and realistically addressed –often they are not!
    • Solid contingency plans with dates need to be included.

Timing is also a critical factor when developing a “Strategic Business Plan”. There needs to be ample time given to develop the plan so that next year’s budgets are supported and thought through via this plan. The timing on the plan and annual budget must also take into account lead times on things such as product development, marketing activities, and real estate plans. The “Strategic Business Plan” and annual budgets should be in place prior to any major commitments being made.

Developing a solid business plan driven by good strategies is only the beginning. Communicating the plan, getting buy in and developing a successful way to implement and achieve the plan is critical. Please see "Six Steps to Achieving your Business Plan" and "Key Metrics" blogs and/or contact me at Janice@JLSearsConsulting.com. I'd love to hear about your business needs.