Strategic Planning – Part 5

What do I Need to Know Before I Start the Planning Process? 

The following addresses the concerns of the pre-planning stage. This stage is divided into four phases, each addressing different issues and questions. They are:

• To plan or not to plan
• Pre-requisites for planning
• Level of planning
• Involving an External Consultant
• Once the decision to plan has been made

 

To Plan or Not to Plan

Planning consumes resources, a precious commodity for all organizations. As a process that eventually defines the direction and activities of the organization, it can be an overwhelming and daunting task. Despite the overwhelming nature of the process, the benefits of planning can far outweigh the hardships.

There are benefits to be gained from the actual planning process, as well as from the final planning document. The very activities that staff and boards conduct as part of the planning process empower them to be more effective in their roles-more informed leaders, managers, and decision makers. In addition, the final planning document becomes a tool that can be used to effectively and efficiently manage the organization.

The time devoted to the planning process varies from organization to organization and depends on the resources available to devote to the process. Whether you decide to devote only a two day retreat to the process or engage in a twelve month process, your organization will begin to realize the benefits from the start. Some of the fundamental benefits to the planning process and the development of the final plan include:

• a framework and a clearly defined direction that guides and supports the governance and management of the organization
• a uniform vision and purpose that is shared among all constituencies
• an increased level of commitment to the organization and its goals
• improved quality of services for clients and a means of measuring the service
• a foundation for fund raising and board development
• the ability to set priorities and to match resources to opportunities
• the ability to deal with risks from the external environment and
• a process to help with crisis management

Prerequisites For Planning

As with any major effort, a planning process has its proper time and place in the organization. There are certain organizational elements that must be in place in order to ensure that the planning process will provide the maximum benefit to the organization. It is important to be candid when assessing the organization’s readiness to engage in the planning process. Even if you get half way through the planning process before you realize that the organization is not ready, stop and remedy the situation before continuing with the process. Unfortunately, many organizations plan when the organization is not ready. They always have an unsatisfactory planning process and subsequent results. Make sure the following elements are addressed before making the commitment to plan:

• a commitment of active and involved leadership, with continuous leadership engaged throughout the planning process
• a resolution of major crises that may interfere with the long range thinking during, commitment to, and participation in the planning process (i.e., insufficient funds for the next payroll, the organization is not operating legally, etc.)
• a board and staff that are not embroiled in extreme, destructive conflict
• a board and staff who understand the purpose of planning and what it can and cannot accomplish, as well as consensus about expectations
• a commitment of resources to adequately assess current programs and the ability to meet current and future client needs and
• a willingness to question the status quo and to look at new approaches to performing and evaluating the “business” of the organization.

 

Level of Planning
As with any other organizational effort, you can do a little planning or a lot of planning. “Enough planning” is when your organization’s leadership understands and has consensus about a clear organizational direction.

It is highly important to examine what needs you are attempting to address from the planning process and the resources available to engage in the process. It is safe to assume that an organization can expect more benefits from a more informed, more resource intensive process.

The key resources required for planning are staff time, board time, and dollars (i.e., market research, consultants, etc.). Specific examples of time resources consumed by the planning process might include time spent:

• collecting and analyzing environmental information
• engaging key stakeholders
• gathering historical financial information, projecting future budgets, and cash flow projections and
• analyzing options and consequences for potential organizational and program strategies.

The amount of resources, time, and money spent on planning should reflect the complexity of the issues you are addressing and the availability of information and resources. The level of planning and resource requirements will vary for every organization.

 Involving an External Coach

For an organization with little or no experience in planning, an external coach, or consultant can enhance the planning process by providing the following services:

• Facilitating of retreats, meetings and the planning process as a whole: The use of a consultant to serve as the “conversation traffic cop” is one method of ensuring that good ideas do not get lost in the emotion of the process or personality of the participants. A consultant can work with an organization to minimize planning barriers that impact effectiveness, using his or her experience as a source of tried and true processes.
• Training in planning information and processes: It is critical for everyone involved in the planning process to be speaking the same language and using the same planning tools. External consultants can provide that conduit of information flow and education.
• Providing an objective and different perspective in the process: As an outsider to the organization, the consultant can ask questions and challenge existing traditions, assumptions, and routines more objectively than staff and board members. Often planners do not realize that they are using jargon or have made certain assumptions about their constituency. Having an outside consultant participate in the planning process helps ensure that organizations stay true to one of the prerequisites of engaging in the planning process, the willingness to question the status quo.
• The process expert role: The consultant who has facilitated and conducted many strategic planning processes can provide significant information and advice on tools and processes that can best accomplish your process and content goals.

Once the Decision to Plan Has Been Made

The planning process is like any other process, it needs to be managed. People have many expectations when they hear the word planning. It is important to make sure that everyone is operating from the same set of expectations and knowledge base. Organizations often train keyboard and staff members in process and planning language before embarking on the planning process.

It is also important to identify the potential information needs of the process. Key decisions will be made during planning. In order for these decisions to be high quality, decision analysts and decision makers need to have appropriate financial, program, and client information.

Another tool used in the management of the planning process is a work plan, or a plan to plan. It is an outline of the steps and activities that will take place during the planning process. The plan specifies the tasks, outcomes, resources to be expended (time and financial), and the person(s) responsible in each of the phases in the process.
The following items summarize the steps necessary to prepare for the planning process:

• Planning should be an inclusive process.  Obtain a formal commitment to conduct planning, including education of board and staff, if necessary
• Select a strategic planning committee of no more than five to seven people, a combination of visionaries and “actionaries,” or a planning liaison to spearhead the process
• Consider the adequate level of resources (dollars and time) required to conduct an appropriate planning process.
• Develop a workplan or a plan to plan that outlines who is responsible for each outcome and time frames

 

Selecting the Team

I have found that the strategic planning team is better equipped to do the company a good service as long as the team is diverse, knowledgeable about the company, and that each member is passionate for the organization’s success. Oddly enough, this does not always mean that only the founders or the C-Level executives are the best choices to round out the team.

When you choose the members of the strategic planning committee choose those individuals that have a good perspective of their area of focus. The top brass don’t always know what goes on in the trenches, and may not be able to provide the best viewpoint of how things operate in the company and what needs to be improved upon.

Look for individuals who:

• Are passionate about what they do
• Have a vested interest in the success of the company
• Provide a broad point of view of what works and what doesn’t
• Can exercise patience and can get things moving when the process seems to drag
• Are Leaders who can rally the rest of the organization to buy in to the concept of change
• Understand the advantages of strategy
• Are willing to assess the organization even if it means that weaknesses are uncovered
• Are flexible and willing to make changes when necessary
• Are not “yes” people, but leaders who can stand up and be a compelling voice
• Have the power to deploy the proper resources to bring the plan to fruition

 

Planning Should be an Inclusive Process

A planning process should be designed to include all board, staff, and other individuals invested in the success of your organization. An inclusive process:

• helps to build both internal and external enthusiasm and commitment to the organization and its strategies. Individuals take on ownership of the goals and efforts to achieve the stated outcomes
• ensures that your informational data base reflects the needs and perceptions of internal individuals and external constituents
• incorporates a level of objectivity into the process. “Outsiders” can identify jargon or ask critical questions around which “insiders” might make assumptions
• develops foundations for future working relationships
• develops uniformity of purpose among all stakeholders
• establishes a continual information exchange among staff, management, customers, and other key stakeholders.

Who Should the Planning Process Include?

Ideally, all key stakeholders should be involved in the planning process at some level. Stakeholders are individuals that are invested in the success or failure of your organization’s mission. Key stakeholders include those persons who can either significantly help or hinder the implementation of your plan.

Key stakeholders may include individuals or groups who you do not traditionally think of including, but are able to contribute valuable perspectives. Examples of key stakeholders may include:

• Board of Directors: The role of the full board is one of governance and oversight. As the entity responsible for governing the organization, its focus should remain on the ultimate and overreaching goals and strategies necessary to achieve organizational success. Therefore, the full board should be involved in processing environmental information and the approval of the vision, values and priorities. As the governing body, it should formally vote on adopting the plan as the management framework around which the organization will develop its operating plan(s).
• Staff: Staff members are a critical ingredient to successful planning – they are the link between the visions and the every day activities of an organization. In an inclusive process, the philosophy is to give staff input and, when appropriate, authority when determining the means of the organization. These individuals have the experience and knowledge around critical success factors that should not be ignored. When staff members are not an integral part of the planning discussions, they need to be informed of the decisions that have been made. Involving staff will:

• ensure the realism of the plan
• encourage all levels of the organization to take ownership of organizational vision and goals
• involve the organization’s future leadership in the development of its identity and vision
• unite individual visions into a single collective vision for the organization.

 

• You should include staff members that are both current (part and full time, salaried, and unpaid) and previous employees.
• Clients: In a planning process, it is critical to ask and answer, “How well are we meeting the needs of our customers/clients or members?” Directly involving these constituents (both current and previous clients) in the planning process is one of the best methods for assessing organizational performance and receiving guidance for future client needs and program focus.
• Other External Stakeholders: In order for a planning process to be strategic it must address external issues and their potential impact on the organization. Including external stakeholders in the process is one fundamental way of ensuring that these issues will be incorporated into discussions and considered in the organization’s future. External stakeholders can educate staff and the board on the perception of the organization in the community, as well as identify areas where services are being duplicated. Involving external key stakeholders in the planning process can establish a solid rapport on which you can develop powerful business relationships that can last long into the future. External key stakeholders include: financial advisors (existing and potential), community leaders, potential collaborators, other agencies in parallel or related fields, volunteers, etc.

www.brianhazelgren.com

Source: The Business Game Plan, by Brian Hazelgren

Strategic Planning – Part 4

Key Definitions of Strategic Planning

Strategic

In the dictionary, the word strategy has to do with war and deception of an enemy. In management, strategy has to do with responding to a dynamic and sometimes hostile environment in pursuit of a service mission. Thinking strategically thus means being informed and consciously responsive to this dynamic environment.

Planning

Strategic planning is planning because it involves intentionally setting goals (choosing a desired future) and developing an approach to achieving those goals.

Fundamental

Because it is impossible to do everything, strategic planning implies that some decisions and actions are more important than others. The most important decisions have to do with what an organization is and why it exists; the most important actions have to do with what it does. On the other hand, strategic thinking is deciding on and carrying out the fundamental or most important actions.

Disciplined

Discipline highlights the relationship between the different steps in strategic planning. Mission depends on environment; which actions are most important are determined by assessing strengths and weaknesses, opportunities, threats, competition and barriers. Strategic planning is also disciplined in that there is a sequence of questions typically raised to examine experience and test assumptions, gather and make use of information about the present, and try to anticipate the future environment the organization will be working in.

Decision Making

Strategic planning is based on decision making because in order to answer the questions raised in the structured planning process, choices must be made. The plan ultimately is no more, and no less, than a set of decisions about what to do, how to do it and why to do it.

Long Range Plan

Long range is the longest time period for which it makes sense to make plans. The time period varies from organization to organization: the Social Security Administration is planning for the retirement of today’s babies sixty five years from now; high tech computer companies are putting out new products every six months.

Operating Plan

Operating plans are the detailed action plans to accomplish the strategic goals laid out in the strategic plan. An organization should have operating plans for each major organizational unit and correspond to its fiscal year. In addition, an organization may need operating plans which correspond to business cycles or longer, or cycles that differ from the fiscal year. Each is important.

Strategic Management

The concept of strategic planning implies managing, day-to-day and month-to-month, in a way that focuses on the most important decisions and actions. This requires the kind of longer-term perspective and priorities that result from a strategic plan.

This concept also incorporates the assumption that the environment is always changing: thus, strategic management requires ongoing reassessment of current plans in light of long-term priorities.

Inclusive Process

An inclusive process means that people who have a stake in the work of your organization participate in the planning process in an appropriate way. This does not mean that every client, funding source, volunteer and staff member must come to a joint consensus about what to do. It does mean that these interested individuals have a chance to be heard by the decision makers.

 

Strategic Thinking vs. Strategic Management

Strategic thinking means asking, “Are we doing the right thing, and at the right time?” It also requires three things:

• Purpose or end–a strategic thinker is trying to accomplish something
• Understanding the environment, particularly of the opponent, or opposing forces, affecting and/or blocking achievement of these ends
• Creativity in developing effective responses to the opponent or opposing forces.

As you might guess, strategic management is the application of strategic thinking to the job of leading an organization.

Finding the right mix of management and staff to carry out the task of strategic planning is the first step to the realization of planning success. Once you have the team in place constant communication will be the foundation the team will use to build the foundation. A breakdown in communication will crumble the process.

www.brianhazelgren.com

Source: The Business Game Plan, by Brian Hazelgren

Strategic Planning – Part 3

Sports and Business Have Many Similarities

Coaches wouldn’t dream of starting a season without one. Athletes would be lost without one. Fans would not enjoy the season as much if their team doesn’t follow one.  The media would have a heyday with teams that would not discuss a form of one. Quarterbacks would look like scared rabbits without reading one.

What is it? Well to put it as simply… “it” is a game plan. A game plan that is built upon a foundation of “we can win, and become the champs if we follow what we have planned for.” I refer to not just having one game plan, but employing several game plans throughout the season. A game plan is a great tool to have, and an even greater asset if followed and updated regularly.

During my younger years as an All-American athlete, I listened to my coaches talk about being the best, the champs, whether in our conference, the state, or even the country. They would even go as far as setting individual goals for certain team categories. I would listen with great interest to the goals they had established for the team, and how we would work together to achieve those goals. The coaches, our management team, would spend countless hours reviewing the skills and talents of the players, and lining up the right mix of skills with the positions. They would review films over and over and over, then come up with what they felt as a long-term strategic plan for the season. Then each week they would review the scouting reports and come up with a tactical plan for each opponent.

I learned several influential lessons from these “sculptors of boys and men”. These lessons have stayed with me for decades. They were built upon the foundation my parents established for me at an even younger age. One of the more powerful lessons is the concept of coming up with a solid, workable plan; following it; and then being flexible enough to revise it as you go.

Each new season of competition brought with it the notion of being classified as the very best. My old college friend and teammate Steve Young was a master of the game. He was always an inspiration to the team. He was a natural leader and was the perfect example of always striving to be the very best he could. I will be forever grateful to Steve for his competitive nature, as well as his example. He would study the game plan relentlessly at the beginning of the season. He would follow it because he trusted in those that had done their homework and put together a plan of action. And then he would update the plan every week as he faced a new opponent. If he thought changes needed to occur he would speak his mind—keeping the team as his number one focus and not himself.

Steve followed the team game plan and inspired those around him to stretch themselves and to reach for new plateaus. If someone was struggling he would lift them up to his level of performance. He was a fierce competitor on the field, and still is a fierce competitor off the field, both in sports and in business.

As a youth it didn’t matter if it was football, basketball, baseball or track, I couldn’t wait to get the season started. I would work my tail off trying to make my skills and talents pay off while in the heat of battle.

When I advanced to the collegiate ranks, even more challenging circumstances would present themselves and I had to figure out how to make my skills and talents work for the betterment of the team, as well as for myself.

I enjoyed a very successful career as an athlete. I was named All-American in three sports. I won three state championships. I broke five records in track and field—some that stood for 20 years. I have played on a national championship team. I had a chance to play professional ball in two sports. And through it all, I can say that it was the planning that made much of these things come to pass. Not just planning, but following the plan and making changes along the way.

Think about it for a minute…a pro football team does not stay with the same game plan week in, week out. The game plan must be modified and improved upon as a new opponent is faced, or as a back up athlete comes into the game to take over for an injured teammate. However the original plan is not tossed out, it is simply revised and improved upon.

So it is with developing a game plan for business. The original plan is what gets things moving. Markets change. Technology changes. Setbacks, even serious ones happen. New contracts are awarded. New industries are created. Natural disasters occur. Partners go off the deep end and spend wildly. Many things happen in business that you did not plan on, yet seem to crop up anyway. That is life. Yet each of these instances requires a flexible approach, a game plan that can be modified when needed.

Therefore, formulating a strategy is as important in business as it is in sports…

As a young man, I grew up participating in athletics and I really wanted to be the very best at everything I did. This meant focusing on an end result, but having a plan of action to get me there. I had a passion for pushing my mind and body to new levels, and doing my absolute very best to come out the victor. This required a certain game plan that always needed to be updated, tweaked, and often revamped into something entirely different than what was originally planned out. This “game plan” actually made me stay focused when things became a little fuzzy, or even not clear at all.

As an athlete, I participated in four sports: football, baseball, track and basketball. I was very blessed with the physical makeup to excel in these sports and was at the top of my game for many years. The fascinating aspect of putting together a game plan was that although I thought I had it figured out in the beginning, I soon realized that my plan needed to change each week. As I faced new opponents, the coaching staff would prepare a plan of action that was tailored to beating that particular opponent. Which meant that the original game plan at the beginning of the season had to be updated to meet a new set of circumstances head on.

Just as in sports, business is run by a set of plans that needs to be updated and kept alive in order to achieve maximum results. So then, this becomes what I will refer to as the Business Game Plan. This plan of course has to involve the Head Coach, Assistant Coaches, Players, Equipment Managers, Offensive and Defensive Teams, a Special Team, Cheerleaders, the band, the crowd and the media.

If you are not a sports fan–not to worry. All of this will make sense very soon, and hopefully you will understand my madness in developing this section with a sports twist, and learn to have fun with it.

www.brianhazelgren.com

Source: The Business Game Plan, by Brian Hazelgren

9 Principles of a Highly Successful Business Plan – Part 2

Nine Principles of a Highly Successful Business Plan—PART II

In Part 1 of Nine Principles of a Highly Successful Business Plan, I discussed a recent conversation between two entrepreneurs and their viewpoint on writing a business plan. Their problem, like most people, was thinking more about the “pain” rather than the “gain.” In crafting your business plan for your next project, focus on the REWARDS. Sure it will take a while to come up with a great plan, but think of the excitement and exhilaration of launching your business idea. Think of the freedom…the success…the journey, and the funding that you will receive.

Be creative in how to appeal to your audience. You don’t need to be cutesy in loading your plan full of graphics on every page. Charts and tables are a definite plus as they provide a quick view of the numbers that you include in your plan. However, don’t be consumed by showing fancy pictures or clip art on every page. That kind of artistic overload is a nuisance and doesn’t impress investors. Be prudent regarding how you use graphics. Tables, financial charts, and pictures of your products are really all you need to make your plan stand out.

Become an artist for a little while and create that masterpiece. Create the type of plan that gets the results you are seeking. By the way, not all business plans are used for raising capital. Some are used to gain a better focus internally. Others are used to show a history of the business for selling it to a qualified buyer. Most of the business plans, as you know, are used for raising funds…from loans to private placements.

There are a lot of issues you will be faced with as you research, write, create spreadsheets, and compile your plan. If you feel you just don’t know how to tackle all the issues in developing a solid business plan, then ask for help. This is a highly important step in the overall plans for your business. Don’t skimp on details, and don’t rely solely on your own abilities—however talented and experienced you may be. Get help with your research. Quote sources that are credible. Have your CPA review your numbers. Work with a professional who has loads of experience in writing business plans. But by all means keep control of the entire process. And, most importantly, have FUN.

Let’s continue with the list of the nine key principles in developing a business plan that gets funded.

Principle 6 – The top four things funding sources will look at first are simple to recognize:

1) The Management Team. Very simply put, if your management team is not capable of driving the business to success, then the other three things won’t matter. Make certain you have all the right players in management positions, or hire outside professionals to assist you.

2) The Financials. Provide past history if you have any; and projections for the future of the business as you see it, if funding becomes a reality. You will also need to provide information on how will you use the proceeds, and what you expect the new funding to do for your business. This area of discussion will focus on of a minimum of your Sales Forecast (including direct costs), your Personnel Plan, your Profit and Loss Statement, a Pro Forma Balance Sheet and a Break-Even Analysis.

3) Your Marketing Plan. In this section, you will provide three important things: First, you must give a good overview of the industry: how large it is in terms of annual revenue, how many people make up the market you are penetrating, and the market growth and trends that have been established.

4) Your Product or Service. Provide a good overview of what your products and/or services actually are. Help the reader to clearly understand how your products/services are unique and why they will drive revenue. If you have multiple products or services, describe each one individually. Also provide any information on future products that will be forthcoming, either as a result of funding or from a natural evolution of the business.

Principle 7 – Know where to begin.

This may sound a little funny, but when it comes to writing a great business plan, a person can become completely overwhelmed trying to figure out where to start. After doing this for 21 years, I encourage you to take a few words of advice: Don’t write your Executive Summary first (it is “summary” of all the sections of the plan); research your market/industry up front to see if your idea will actually be accepted; and try developing a few scenarios of a sales forecast—including direct costs, to see if the revenue will be there to support such an idea.

The rest of the plan will come together if you can identify that there is a need for your product or service and that you have the right team and all the right resources in place to make this idea become a successful reality.

Principle 8 – Develop a Solid Unique Selling Advantage (USA).

What makes your product or service unique? Why does it stand out from all the other products or services already in the market? Why will someone take their hard-earned money and give it to you first, over your competition? These are some very important questions that you will need to answer in a succinct way in order to convince the potential funding source to do business with you…not to mention convincing customers to buy from you.

Identify uniqueness by explaining what problems you solve. What benefits do you provide that no one else does? What qualities/traits/skills/talents., etc., do you possess that others don’t? What things are notable about you, your company, your products, etc., that makes you more memorable than anyone else? Take a few minutes and write down the answers to these questions. You will begin to see that even something as simple as staying open an extra hour, or having strategic locations for customers to visit you, is a great way to illustrate why you are unique and why customers will buy from you.

Principle 9 – Answer the most important question.

Every source of funding wants to know one thing. They are risking their capital in a venture that may succeed or fail. Therefore, when you are researching and eventually writing your plan, keep this question in your mind, because it will definitely be on the minds of your funding sources: “When will I get a return on my investment?” This is the silent question investors or lenders will ask after every section they read.

Sounds almost too simple, but make no mistake, if you can put a plan together that illustrates how you have thought this through in a thorough manner, you can raise the capital you need.

As you write your plan, try to answer this question as many times as possible. When you describe your goals and objectives, show how you are going to provide a good return on investment. As you explain your management team, illustrate how this team is highly qualified to look out for the bottom line. When you craft your marketing plan, explain by example how sales will occur as a result of your market analysis and marketing strategies. When you develop your financial projections, identify that you have clearly thought through the numbers presented.

However, since nothing is a sure thing, don’t make promises that you can’t keep. Don’t over-forecast. Use the best conservative numbers that you can develop. Provide enough backup data from many sources that validate your idea or business concept. And, by all means, keep a careful watch on all the data written in your plan. Don’t even allow partners to provide you with too much fluff. Validate every claim you make in your plan. Excitement for your idea is one thing, but deception is never a good strategy.

These last four principles of the nine overall principles are highly effective for raising the amount of capital you need to launch your idea, sell your business or fund your next venture. Do all this, and you will be granted a high approval rating. After all, the best flattery an investor can give is to part with their money and invest in your venture.

9 Principles of a Highly Successful Business Plan – Part 1

I once overheard a conversation between two entrepreneurs that helped me draw a correlation and make an observation. One of them stated… “Writing a business plan is about as fun as getting a root canal!” The other entrepreneur said, “I’ve got one even better, it is about as fun as sitting down for a long conversation with my mother-in-law.”

Sometimes I have to agree that it can create a little discomfort, but the process of writing a business plan can be highly rewarding if you follow a simple system and the proper outline.

You may have heard an investor or a banker make the statement: “I’m sorry, but before I make a decision, I will need to see your business plan.” If you are looking for funding a business or an idea, a business plan today is as essential as a business card and an e-mail address.

Writing a business plan is time consuming and requires discipline. I have written over 130 business plans. I teach a course at the University of Utah on Business Plan Development, and I have written four books on this subject. In addition, I have read through hundreds of plans over the years. With all of this familiarity in business plan development, I am still thrilled to begin the process all over again and create a magnum opus, or work of art.

There are definitive pitfalls to look out for and some simple things to include in your plan to help you achieve your goals. I want to walk you through nine key principles that are basic steps in getting funding. When these principles are observed, I have seen millions of dollars raised for business ventures. Follow them carefully as you plan your venture and you will be far ahead of your competition.

Principle 1 – Convince yourself that proper business planning is an absolute necessity.

Your business plan is the heart and soul of your operation and is one of the most powerful tools you can provide to potential funding sources. It explains the four most important things they will look for in sizing up the opportunity…namely your Management Team, your Financials, your Marketing Plan and your Product or Service.

Your plan should outline the market potential and how your product or service will fit in to take a piece of the market. It communicates how well you have researched the opportunity, and lays out a road map from beginning to end…or at least for the next five years. It should also tell the potential sources of capital how you plan to capitalize on your strategy and create sales.

Next, your plan should clearly explain why your team is qualified to drive the business to success. In other words, surround yourself with a team that investors will be comfortable with. Finally, a good convincing of the potential of the business will exist with your Financial Projections. This is a key area of focus and will require forecasts for you to show to financiers.

Principle 2 – Understand why you need a business plan.

“Those who fail to plan, plan to fail.” This old adage is not only profound and true; it is a simple process to follow. When you leave for a trip, you wouldn’t just hop in the car, drive to the airport, book the first flight out that you see when you get to the counter, show up at a destination with no lodging plans, no car, no money and no sense of what you would like to do while you are there…wherever there may be; without a sense of how long you would like to stay, people you would like to meet, places you would like to visit, etc., and then still be able to enjoy your trip.

The same is true with planning your business. Have a plan. Commit your plan to writing. Put some serious thought behind it. Do your research. Come up with a compelling strategy that will make others want to participate with you…whether they are potential investors or key employees. Explain how you will compete in the market, and what your critical path to customer acquisition is.

If you don’t have a plan, don’t plan on getting any funding. It’s that simple. Besides, you will be much better off by going through the process of developing a business plan. Two important things will occur in the process: 1.) You will better understand your business and will probably appreciate it more, and 2.) You will know if there really is an opportunity out there for you to snatch up your own piece of the American Dream.

Principle 3 – Take charge of your entrepreneurial life.

Think of it as a way for you to take control of your own destiny. A written business plan is evidence of your initiative. It shows that you have the discipline to focus your energies on an important project. Your plan will illustrate how you will achieve progress and growth, solve problems along the way, and accomplish your goals. Your business plan is the foundation of your vision and will allow you to structure your ideas into reality.

Principle 4 – Lay out a master blueprint.

A set of detailed architectural drawings is highly important to a builder…the same way a business plan is to an entrepreneur. Your plan will list the set of detailed procedures in building your business. It will also determine the details that will be used in reaching your objectives. Creating and reading from a set of blueprints in building a structure takes time and effort. Architects cannot neglect a single point of interest in developing the blueprints. If they do, the potential for disaster is certain.

Likewise, without a business plan the potential for disaster is very high. Your business plan is literally a master blueprint when you are developing a business. Blueprints for a building and a master blueprint for your business are very much alike. Isn’t it interesting that a local municipality will not even allow the footings to be dug if a set of blueprints is not first approved? Funding sources view loaning money or investing capital the same way and take the position of, “Come and talk with me after you have your plan in writing.”

Finally, each section of the blueprint is like a section of your business plan. Although they may be completely separate, they eventually must all tie together in the end to demonstrate a beautiful masterwork.

 

 

Principle 5 – Communicate your master plan to members of your team.

The business plan is a concrete statement of purpose that allows you to communicate to your associates and potential investment sources a step-by-step agenda for reaching your goals. Some portions of the business plan can also be used in training and coordinating meetings. You can even incorporate elements of your plan in explaining to your employees what their role is and how they will be accountable as you make the business function successfully.

The primary idea here is to have as many team members as possible involved in the process of crafting your business plan. After all, there may be several things they come up with that you probably never would have thought of. When your team is involved, they will be silently committing their energies to the success of the business. Involvement = Commitment, and Commitment = Success. This is a powerful way for you to find a greater degree of success, and keep your team enthused about the prospects of succeeding at all costs.

This concludes Part 1 of a two-part series on developing an investor-ready business plan. Part 2, further explains the principles that are critical in crafting a business plan that gets results.

www.brianhazelgren.com

Building Your Brand

I was reminded today about the importance of building a solid brand. Barbara, from Boston had called into a radio talk show interview that I was doing, and she wanted to let the host and me know how much she enjoyed answering the questions in my book The Complete Book of Business Plans.

She stated that her husband had left her to raise her three boys on her own, and she had no idea what to do at first. A friend had suggested my book to her and she purchased it with the hopes of writing a business plan, and getting a loan to launch her boutique business.

Barbara completed her plan, and went to the bank to get an SBA guaranteed loan of $10,000 to launch her first boutique. She was calling in to the show let us know that she was opening her third boutique since the first two were so successful; and to let the listeners know about the 130 questions in the book that she had taken the time to answer.

This is so exciting to for me to hear! To have Barbara share her story on answering a few questions…completing a business plan…raising capital for her small business…and the success she has found, is priceless. Way to go Barbara…and congratulations a hundred times over on your success!

www.brianhazelgren.com

Building Your Brand

I was reminded today about the importance of building a solid brand. Barbara, from Boston had called into a radio talk show interview that I was doing, and she wanted to let the host and me know how much she enjoyed answering the questions in my book The Complete Book of Business Plans.

She stated that her husband had left her to raise her three boys on her own, and she had no idea what to do at first. A friend had suggested my book to her and she purchased it with the hopes of writing a business plan, and getting a loan to launch her boutique business.

Barbara completed her plan, and went to the bank to get an SBA guaranteed loan of $10,000 to launch her first boutique. She was calling in to the show let us know that she was opening her third boutique since the first two were so successful; and to let the listeners know about the 130 questions in the book that she had taken the time to answer.

This is so exciting to for me to hear! To have Barbara share her story on answering a few questions…completing a business plan…raising capital for her small business…and the success she has found, is priceless. Way to go Barbara…and congratulations a hundred times over on your success!

www.brianhazelgren.com