UNNIT 1 Greatest challenges Consultant faces While there are few career paths that some would call

perfect, being a consultant comes pretty close to having it all. Yet there are challenges and pitfalls that are sometimes overwhelming and unexpected. Whether it's helping a client increase sales, improve efficiency, prevent a crisis or convince a client why a particular strategy might work, challenges are always to be faced. When analyzing, identifying and exploring the most specific challenges high on the consultant's list, there are a few that would probably be considered the greatest of all. Following are some of those challenges and how a few successful consultants have overcome them. Clients Expectations One very huge challenge most consultants face is dealing with a client who has lofty goals, but lacks a forward thinking attitude. When it comes to a client's business, more often than not they're fearful about spending money. Usually they'll expect big results from very small investments. Quoting Beth Gasser of Vivid Image, "Often our clients are short term oriented and don't consider the most important longer term strategies. Clients may be willing to put money into advertisements for today but when encouraged to consider more effective campaigns, which span a year or five-year period, they hold back." Beth also told me that client's are shortsighted making it more difficult to observe and track ROI progress. " When we ask a client, which we do unfailingly, if our services are showing progress, they either don't know or guess." For Beth, this has been a very frustrating component as she is extremely conscientious about helping her clients achieve. "We began questioning ourselves as to how we could get client's to return if we couldn't prove to them that we've made a difference." To alleviate this dilemma, Beth explained that they've now hired a Marketing Strategist to help their company develop measurement tools that are given to their clients. "We teach them how to use these tools so there will be no more guessing," stated Beth. Creative Ways of Attracting Clients Another huge challenge that confronts all consultants has to do with getting past the "How Much Does it Cost?" phase. That of course not only requires patience, but a lot of inventiveness and creativity as well. Writing letters, introducing your company, creating press releases, developing a web site and of course networking are all critical to the success of any business, but in a competitive market such as the Internet, the challenge is even greater. What that means to the consultant is that he or she must conceive of unique measures for opening doors to their services and that demands different approaches. Patrick Bremer, Marketing Consultant of www.exposure.com, an Internet consulting firm, recently shared an idea that helped him overcome a particular challenge. "Limited thinking in regard to the immense importance of a web site in today's marketplace surprises me," said Patrick. "When approaching a prospective client, often their first question is how much will a web site cost? Getting past that first inquiry is one of the greatest challenges for a marketing consultant since costs vary so greatly. Initially I wasn't sure how to respond to that inquiry because I didn't want to lose the client off the bat by quoting something too soon. After giving it some thought, I came up with a method that relates buying a web site to buying a car. I tell prospective clients that you can buy a car for $15,000 or $50,000, but ultimately your decision depends on what it is you actually intend with the purchase of your car. By the same token a web site can be acquired for $1,500.00 or 150,000.00 which requires knowing what exactly are your ultimate goals. Until we sit down together and discuss the objectives of your site I won't know what it is you're hoping to achieve. Patrick told me that once he states it in those terms, it's usually enough to get the client to agree to meet with him at which time he's able to determine what best fits the client's budget and what web site design best meets with their needs." Relating to and Understanding a Clients Needs

exploring the Internet and doing whatever we can to discover exactly what will bring the greatest benefit to our clients. and the only way to do that is to become aware of your client's concerns and help them go beyond those concerns. "Often. What you will find may surprise you: that many of those bad assumptions are self-imposed — with just a bit of scrutiny you are able to safely drop them.  Rephrase the Problem.com • Play freely with the problem statement. all he got back were blank stares. When he rephrased his request as “ways to make their jobs easier”. so we carefully research different markets by attending conventions." There are always going to be times when a potential or existing client may challenge your suggestions or method of operation. but from which the company also benefits. said. Essentially. One of your assumptions might be ‘restaurants have a menu’. Your goal as a consultant is to become known as a solution finder. How we deal with a challenge of this nature is to implement upgrades in phases. ‘develop’. When an executive asked employees to brainstorm “ways to increase their productivity”. Every problem — no matter how apparently simple it may be — comes with a long list of assumptions attached. you need to learn how to think like a philosopher. Words carry strong implicit meaning and. he could barely keep up with the amount of suggestions." Jeff went on to say. We then gather together as a team to discuss the circumstances. take single words and substitute variations. As Consultants we always have the choice to either permit our challenges to defeat us or simply use them as an opportunity to transcend specific hurdles. That. suppose you’re about to enter the restaurant business.Because a consultant commonly seeks to offer newer and more progressive ideas to an organization. For a methodical approach. for example). its how u use it Breakthrough Thinking to innovate www. try challenging it and maybe you’ll find some very interesting business models (such as one restaurant in which customers bring dish ideas for the chef to cook. "Clients might not have a handle on the importance of adding something new to their business. For example. In the example above. •  2 Expose and Challenge Assumptions. This allows a staff to gain a better grasp of a particular module. in itself. as such. ‘be productive’ might seem like a sacrifice you’re doing for the company. play a major role in how we perceive a problem. brings more clarity to the problem at hand. the problem is still the same. so you may want to use a thesaurus or develop your vocabulary. while ‘make your job easier’ may be more like something you’re doing for your own benefit. Write a list and expose as many assumptions as you can — especially those that may seem the most obvious and ‘untouchable’. but the feelings — and the points of view — associated with each of them are vastly different.BreakthroughThinking. In the end. • The first step to get rid of bad assumptions is to make them explicit. Jeff Weaver of Eros Technology. the consultant's challenge is to relate to and understand different client's needs and their overall business agenda. prospects have a difficult time grasping the full benefits of a particular software addition. While such an assumption may seem true at first. Read up on How to Be a Skeptic. They may not understand how implementing the new software can help augment their business. Many of these assumptions may be inaccurate and could make your problem statement inadequate or even misguided. But go further and test each assumption for validity: think in ways that they might not be valid and their consequences. ‘Increase sales’? Try replacing ‘increase’ with ‘attract’. ‘repeat’ and see how your perception of the problem changes. Creative Problem Solving Not what u know. rewording it several times. gaining different perspectives and ideas on how to overcome a specific situation. • • . ‘extend’. but you have to hear and understand where a client is coming from even when you don't agree. A rich vocabulary plays an important role here.

try to view this problem from the point of view of. But maybe the bigger problem is that the people in your house use heat wastefully. always make sure you look at it from different perspectives. A good question worth asking is whether the "problem" you're defining is really just a symptom of a deeper problem. For example. WordNet can also help you finding hyponyms. How would a politician see it? A college professor? A nun? Try to find the differences and similarities on how the different roles would deal with your problem. this may be a matter of adding features to your product that one would be willing to pay more for. if you own a business and are trying to ‘increase sales’. and why's that? Because they don't perceive the negative consequences. look at it from a more general perspective. How would your competition see this problem? Your employees? Your mom? Also. perhaps. each time using one of these different perspectives. • •  6 Use Effective Language Constructs. In the same way that you can explore a problem laterally — such as by playing with words or challenging assumptions — you can also explore it at different “altitudes”. This expression is much superior to “How can I…” as it hints that there’s a . • •  4 Chunk Down. Just as in ‘chunking up’. from the customer’s viewpoint. Looking at it with different eyes is a great way to have instant insight on new. two hyponyms of ‘car’ are ‘minivan’ and ‘limousine’). say. An excellent way to start a problem statement is: “In what ways might I…”. Hypernyms are words that have a broader meaning than the given word. ‘Chunking the problem down’ (making it more specific) is especially useful if you find the problem overwhelming or daunting. imagine how people in various roles would frame the problem. • If you feel you’re overwhelmed with details or looking at a problem too narrowly. so they're not conscious of how wasting heat will affect them. • • Some of the typical questions you can ask to make a problem more specific are: “What are parts of this?” or “What are examples of this?”. If each problem is part of a greater problem. Before rushing to solve a problem. • For example. The class of words that are useful here are hyponyms: words that are stricter in meaning than the given one. a hypernym of ‘car’ is ‘vehicle’). (E. In order to make your problem more general.[1] Another approach that helps a lot in getting a more general view of a problem is replacing words in the problem statement with hypernyms. but there are some language constructs that always help making it more effective: • Assume a myriad of solutions. Each problem is a small piece of a greater problem. ask questions such as: “What’s this a part of?”.g. For example. word substitution can also come to great use here.  5 Find Multiple Perspectives. it also means that each problem is composed of many smaller problems. overlooked directions. There isn’t a one-size-fits-all formula for properly crafting the perfect problem statement. 3 Chunk Up. free tool for finding hypernyms for a given word is WordNet (just search for a word and click on the ‘S:’ label before the word definitions). a high heating bill might be the "problem" and an obvious solution would be to check to see if your heating system is broken. a customer. they don't have to pay the bill themselves. (For example. or needs updating for better efficiency. A great. Rewrite your problem statement many times. “What’s this an example of?” or “What’s the intention behind this?”. It turns out that decomposing a problem in many smaller problems — each of them more specific than the original — can also provide greater insights about it.

consider using the following formula for phrasing your problem statement: “In what ways (action) (object) (qualifier) (end result)?” Example: In what ways might I package (action) my book (object) more attractively (qualifier) so people will buy more of it (end result)? • •  7 Make It Engaging. are much more motivating. for example. all you need to do is reverse your answers. Frame your problem in the form of a question. and not just one — or maybe none. As simple as this sounds. It is said that a well-defined problem is halfway to being solved: you could add that a perfectly-defined problem is not even a problem anymore! • Developing A Business Plan Overview The importance of planning should never be overlooked. Negative sentences require a lot more cognitive power to process and may slow you down — or even derail your train of thought. if the statement is “You don’t make enough eye contact when I’m talking to you. One trick that usually helps when you’re stuck with a problem is turning it on its head. the solution is not obvious. Our brain loves questions. the problem stated by your spouse is “You never listen to me”. invest the time adding vigor to it while still keeping it genuine. investigating facts is usually more productive than trying to solve it right away. However. • • ‘Make more sales calls’ may seem an evident way of increasing sales. ‘live longer’ and others are much more worthwhile goals. • Make it positive. If you are struggling finding ways to ‘increase sales’. the owners and the managing directors must have a clear understanding of the . Ask questions and gather facts. but sometimes we only see these ‘obvious’ answers when we look at the problem from an opposite direction. Positive statements also help you find the real goal behind the problem and. another one is ‘wow your customers’. If the question is powerful and engaging. find out what would make you lose. For example: instead of finding ways to ‘quit smoking’. If you’re still stuck. • If. Your brain will thank (and reward) you later. even when we’re not aware of it. find ways to decrease them instead. Investigate causes and circumstances of the problem. it’s important to come up with a problem statement that truly excites you so you’re in the best frame of mind for creatively tackling the problem. • • One thing is to ‘increase sales’ (boring). Especially if you have a problem that’s too vague. In addition to using effective language constructs. our brains will do everything within their reach to answer it. We just can’t help it: Our brains will start working on the problem immediately and keep working in the background. For a business to be successful and profitable.  8 Reverse the Problem. another completely different is to ‘empower readers to live fully’. though!) Ask yourself questions about the problem. (You’ll still need to work on the implementation. you may find that ‘increase your energy’. but turning a problem on its head can uncover rather obvious solutions to the original problem. as such. If you want to win. One thing is ‘to create a personal development blog’.  9 Gather Facts. If the problem looks too dull for you. Make it enticing. What is not known about it? When did it last work correctly? Can you draw a diagram of the problem? What are the problem boundaries? Be curious.” then the solution is obvious and you can skip brainstorming altogether. This seemingly convoluted method may not seem intuitive at first. the feeling of expectancy helps your brain find solutions.multitude of solutions. Probe details about it — such as its origins and causes. Then.

However. Executive Summary B. The finished report serves as an operational tool to define the company's present status and future possibilities. money is often an issue. Operations G. The Competition F. 2. The Product/Service C.firm's customers. It helps to focus ideas and serves as a feasibility study of the business's chances for success and growth. Taking time to create an extensive business plan provides you with insight into your business. Personnel IV. Why Write a Business Plan? II. Supporting Documentation VI. A business plan is very specific to each particular business. you should be able to: • • • Describe the importance of a business plan Identify the elements of an effective business plan Write a business plan Outline: I. The Marketing Plan E. Summary VII. Financial Data V. . This document can serve as a powerful financing proposal. The finished project is an operating tool to help manage your business and enable you to achieve greater success. The Management Team H. while each business needs a unique plan. Whether yours is a new business or an existing business in the process of expanding. The plan also serves as an effective communication tool for financing proposals. Business Plan Components A. It requires you to be objective. They must also have the foresight to plan for future expansion. Why Write a Business Plan? Why should a business go through the trouble of constructing a business plan? There are five major reasons: 1. The process of putting a business plan together forces the person preparing the plan to look at the business in an objective and critical manner. the basic elements are the same in all business plans. At the completion of this exercise. The Market D. Who Should Write the Business Plan? III. strengths and competition. 3. 4. This article will take you through the step-by-step process of developing a business plan.Resources I. critical and focused. To complete an effective business plan you must dedicate time to complete the plan. It can help you manage the business and prepare you for success.

Failure is often attributed to a lack of planning.you are the one that knows the most about the business. then seek the assistance of the consultant. but realize that you will still need to do most of the work. 6. the purpose of your business. The Executive Summary should follow the cover page. but in reality you must do a majority of the work. This is especially true if you are seeking financing. A thorough business plan will have the information to serve as a financial proposal and should be accepted by most lenders. your management and personnel. your business plan provides the information needed to communicate with others. By taking an objective look at your business you can identify areas of weakness and strength. Palo Alto Software are only two of many available. Back to Outline III. should write the plan. the key employees. Consultants can be hired to assist you in the process of formulating a business plan. It doesn't matter if you are using the business plan to seek financial resources or to evaluate future growth. and establish plans to meet your business goals. Business Plan Components The Executive Summary The first page of your business plan should be a persuasive summary that will entice a reader to take the plan seriously and read on. Back to Outline II. Only you can come up with the financial data. Finally. Who Should Write the Business Plan? You. or provide guidance for running your business -. discussing the business's competitive advantage Projected growth for the company and the market A brief description of the key management team A description of funding requirements. and management styles to mention a few items. spot problems and nip them before they escalate. You will realize needs that may have been overlooked. The summary should include: • • • • • • • • A brief description of the company's history The company's objectives A brief description of the company's products or services The market the business will compete in A persuasive statement as to why and how the business will succeed. However.5. To enhance your success. The business plan is only useful if you use it. You may still choose to use a consultant. use your plan! A comprehensive. define a mission. your competition. It is a strong communication tool for your business. so why not tackle the plan yourself? If you need further help in one area. including a time-line and how the funds will be used The Product or Service It is important for the reader to thoroughly understand your product offering or the services you currently provide or plan on providing. The process of constructing a business plan can be a strong reality check. it is important to explain this section in . the owner of the business. There are a number of software packages in addition to this article that can assist you in the formatting process: Business Plan Pro. and not exceed two pages in length. Ninety percent of new businesses fail in the first two years. Planning is very important if a business is to survive. It defines your purpose. well constructed business plan can prevent a business from a downward spiral. The finished business plan provides the basis for your financing proposal.

Areas that should be covered in this section include: • • • • Is your product or service already on the market or is it still in the research and development stage? If you are still in the development stage. discuss any patents. The following are some promotional . If there is room for improvement -. because if there is no need or desire for your product or service there won't be any customers. Potential investors will look at this section carefully to make sure there is a viable method to reach the target market identified at a price point that makes sense. you should answer why there is a need for your offering. if you are entering a new market. their purchasing habits. provide an analysis of who your customers are. the need for manufacturing materials. If a business has no customers. there is no business. Do not overwhelm the reader with technical explanations or industry jargon that he or she will not be familiar with. The most effective marketing strategies typically integrate multiple mediums or promotional strategies to reach the market. If you have existing customers. This section of the plan should include: • • • • • • • • • A general description of your market The niche you plan on capitalizing on and why The size of the niche market. For more information. competing products. Or. include your marketing research data. If appropriate.work on creating an innovative plan that will position your product or service in the minds of your potential customers. see these companion articles: Conducting a Marketing Analysis and Prepare a Customer Profile. you'll need to explain your strategy for reaching the market and distributing your product or service. consider adopting a similar plan. copyrights and trademarks the company currently owns or has recently applied for and discuss any confidential and non-disclosure protection the company has secured. their buying cycle. Analyze your competitors' marketing strategies to learn how they reach the market. high product development costs. Discuss any barriers that you face in bringing the product to market. etc. such as government regulations. It is important to discuss the competitive advantage your product or service has over the competition. If you are launching a new product. what is the roll out strategy or timeline to bring the product to market? What makes your product or service unique? What competitive advantage does the product or service have over its competition? Can you price the product or service competitively and still maintain a healthy profit margin? The Market Investors look for management teams with a thorough knowledge of their target market. Include supporting documentation A statement and supporting documentation as to why you believe there is a need for your product or offering by this market What percentage of the market do you project you can capture? What is the growth potential of the market? Include supporting documentation Will your share of the market increase or decrease as the market grows? How will you satisfy the growth of the market? How will you price your goods or services in the growing competitive market? The Marketing Strategy Once you have identified who your market is. If their strategy is working. This section of the plan is extremely important.layman's terms to avoid confusion.

options to consider. Will you mail order. Where are they located? What are their revenues? How long have they been in business? 2. . efficient and effective in the marketplace. so you don't make the same mistake. Developing an innovative marketing plan is critical to your company's success. 3. discuss in detail your strategy for distributing the product or service to your customers. For more in-depth information on these media. Identify your closest competitors. Investors look favorably upon creative strategies that will put your product or service in front of potential customers. contract with distributors or resellers. How do your operations differ from your competition? What do they do well? Where is there room for improvement? 5. make sure you include them with your plan. Are there certain areas of the business where the competition surpasses you? If so. How are their operations similar to yours and how do they differ? 8. personally deliver. Specific areas to address in this section are: 1. you need to know why. Spend time developing this section. Once you have identified how you will reach the market. How is their business doing? Is it growing? Is it scaling back? 7. • • • • • • • • • • • TV Radio Print Web Direct mail Trade shows Public relations Promotional materials Telephone sales One-on-one sales Strategic alliances If you have current samples of marketing materials or strategies that have proved successful. hire sales reps. If your competitors are highly successful. see the article called Create a Promotional Package. you'll want to identify why. Knowing your competition will allow you to become more motivated to succeed.? The Competition Understanding your competition's strengths and weaknesses is critical for establishing your product's or service's competitive advantage. You'll also want to explain why there is room for another player in the market. In what ways is your business superior to the competition? 6. etc. Define their target market. If you find a competitor is struggling. What percentage of the market do they currently have? 4. what are those areas and how do you plan on compensating? Analyzing your competitors should be an ongoing practice.

You'll want to provide a roll out strategy as to when these requirements need to be purchased and implemented. Lawyer c. current address. Past experience -. Work experience: a. Direct operational and managerial experience in this type of business b. Your financials should reflect your roll out plan. Resources available to your business: a. your plan must communicate management's capabilities in obtaining the objectives outlined in the plan. When preparing this section of the business plan you should address the following five areas: 1.Operations Now that you have had an opportunity to really sell your idea and wow potential investors. What resources and processes are necessary to get the product to market? This section of the plan should describe the manufacturing. disability. Accountant d. Personal financial statement with supporting documentation 2. Investors must feel confident that the management team knows its market. and provide your options for solutions. Listing of bonuses in realistic terms c. Organizational chart with chain of command and listing of duties c. Consulting group(s) . equipment and facilities required for your business. Whether it is additional training required or additional management staff needed. If this area is lacking. describe the vendors you will need to build the business. Do you have current relationships or do you need to establish new ones? Who will you choose and why? The Management Team For most investors the experience and quality of the management team is the most important aspect they evaluate when investing in a company. In addition. Who will do what and why b. In essence. R&D. Insurance broker(s) b. your chances for obtaining financing are bleak. staffing. Who is responsible for the final decisions? 4. responsibilities and capabilities c. Educational background (formal and informal) d.tracking successes. reasons for entering into a business e. If your team lacks in a critical area. the next question on their mind is how will you implement the idea.. Business background of the principals b. identify how you plan on compensating for the void. Salaries and benefits: a. Personal data: age. Personal history of the principals: a.) 5. show that you know the problem exists.. life insurance. purchasing. education. past addresses. product and has the ability to implement the plan. special abilities. interests. Indirect managerial experiences 3. A simple statement of what management will be paid by position b. Benefits (medical. Duties and responsibilities: a.

is used to indicate how well the company is managing its cash. state. liabilities and retained earnings). what will they be and at what cost? 6. Local business information centers g. Personnel The success of a business can often be measured by its employees. Will you be paying salaries or hourly wages? 5.indicates what the cash position of the business is and what the owner's equity is at a given point (the balance sheet will show assets. Break-Even Analysis .e. If your business can't afford a public accountant to establish your books. It is important to have a certified public accountant establish your accounting system before the start of business.is based on the income statement and cash flow. Will there be benefits? If so. and local agencies Board of Directors World Wide Web (various search engines) Banker 1. l. Small Business Association f. Financial Data At the heart of any business operation is the accounting system. You need to secure additional resources before starting. Are the people you need readily available and how will you attract them? 4. then you are undercapitalized. • • . Seventy percent of consumers will go elsewhere if they don't receive prompt and courteous service. k. Chambers of Commerce h. Will you pay overtime? Back to Outline IV.also called the profit and loss statement. All businesses should perform this analysis without exceptions. Local colleges and universities i. j. What are your current personnel needs (full or part-time)? How many employees do you envision in the near future and then in the next three to five years? 2. Leave it to the trained professional to help you in the area of accounting and legal matters. Income Statement . At times there is a tendency to do it yourself. You must consider the following questions in completing this section of the business plan: Federal. A break-even analysis shows the volume of revenue from sales that are needed to balance the fixed and variable expenses. One of the first steps to having a profitable business is to establish a bookkeeping system which provides you with data in the following four areas: • Balance Sheet . by subtracting disbursements from receipts. What skills must your employees have? What will their job descriptions be? 3. Remember that an incredible number of businesses fail due to managerial inefficiencies.

this projects all cash receipts and disbursements. review the tools Conduct a Sales Forecast and Prepare a Balance Sheet. This exercise is critical in obtaining capital for your business. For more help. 1. Carefully and accurately state your assumptions. irrespective of its size.fail to plan can mean plan to fail. Letters of Intent from prospective customers 5. Back to Outline V. The forecasts demonstrate the need for funds and the future value of equity investment or debt repayments. The realization of that plan is the ultimate goal. The forecast that you generate should cover a three to five-year period. However. To obtain capital from lending institutions you must demonstrate the need for the funding and your ability to repay the loan. you will be required to generate financial forecasts. Honesty is the best policy! Over-optimism and overinflation can lead to failure. Quotes or Estimates 4. and for a startup it shows that the entrepreneur has done his or her homework. Supporting Documentation You must include any documents that lend support to statements made in the body of your company's business plan. Resumes 2. Projections and forecasts are an integral part of your financial portfolio. Legal Documents relevant to the business 8. This is a period in which realistic goals can be established and attained without much speculation. as it is for a startup. It serves four critical functions as follows: . If the goal of your business plan is to obtain financing. Purpose of the Business Plan A formal business plan is just as important for an established business. Letters of Support from credible people who know you 6. Leases or Buy/Sell Agreements 7. Cash flow is critical to the survival of any business. the writing of the plan is an important intermediate stage . include in Appendix 3. The following is a list of some items for your consideration. Census/Demographic data Why Write a Business Plan? The preparation of a written business plan is not the end-result of the planning process. Credit information.• Cash Flow . Please be aware that this list is not complete and may vary depending on the stage of development of your business. Forecasts should be broken down in monthly increments. For an established business it demonstrates that careful consideration has been given to the business's development.

the process of planning (thinking. For management or entrepreneurs seeking external support. a business plan can play a vital role in helping to avoid mistakes or recognize hidden opportunities. As some issues in a plan will be more relevant to some businesses than to others. discussing. focus and research their business's or project's development and prospects. The planning process forces managers or entrepreneurs to understand more clearly what they want to achieve. For many. the plan is the most important sales document that they are ever likely to produce as it could be the key to raising finance etc. investors etc. ultimately. almost certainly. so also with business plans. Preparation of a comprehensive plan will not guarantee success in raising funds or mobilizing support. Serves as a basis for discussion with third parties such as shareholders. but lack of a sound plan will. Provides a considered and logical framework within which a business can develop and pursue business strategies over the next three to five years. succeed or fail. . think carefully about going through the planning process. Just as no two businesses are alike. ensure failure. agencies. Offers a benchmark against which actual performance can be measured and reviewed. and how and when they can do it. investors etc. A well-prepared business plan will demonstrate that the managers or entrepreneurs know the business and that they have thought through its development in terms of products. A clearly written and attractively packaged business plan will make it easier to interest possible supporters. banks. it is important to tailor a plan's contents to suit individual circumstances. useful than the final plan.• Helps management or an entrepreneur to clarify. It is much easier to fold a sheet of paper than a business. A business plan should be a realistic view of the expectations and long-term objectives for an established business or new venture. • • • Importance of the Business Planning Process Preparing a satisfactory business plan is a painful but essential exercise. or even more. Nonetheless. even if you don't need a formal plan. researching and analyzing) is just as. Even if no external support is needed. So. It could be enormously beneficial to your business. It provides the framework within which it must operate and. Anticipate many weeks of hard work and several drafts of the emerging plan to get the job right. many entrepreneurs and planners. most plans follow a well-tried and tested structure and general advice on preparing a plan is universally applicable.

This then leads to strategy development covering the following issues which are discussed in more detail immediately below: • • • • • • • Vision Mission Objectives Values Strategies Goals Programs Vision The first step is to develop a realistic Vision for the business. these can be used as the basis for a critical examination to probe existing or perceived strengths. . check the white paper offering Insights into Business Planning. Also. manufacture and market specific product lines for sale on the basis of certain features to meet the identified needs of specified customer groups via certain distribution channels in particular geographic areas". Correctly defined. "to design. A statement along these lines indicates what the business is about and is infinitely clearer than saying. develop. size. and most importantly. For more guidance on these matters. a new product or service. This will guide you on groundwork to be done before starting to write a comprehensive plan. "we're in electronics" or worse still. what would they see or sense?" Mission The nature of a business is often expressed in terms of its Mission which indicates the purposes of the business.management. If you are developing. how can you realistically write a sensible business plan? Use a short strategic plan as the foundation for a more comprehensive business plan. weaknesses. "we are in business to make money" (assuming that the business is not a mint !). it is desirable to clearly identify the current status. Answer the question: "if someone from Mars visited the business. or have invented. some people confuse mission statements with value statements (see below) . threats and opportunities. finances. Free-Plan (free 150-page Business Plan Guide and Template in Word format) and the comprehensive Business Plan Guide. for instance. it may be beneficial to start the business planning process by reviewing the sections of Getting New Business Ideas covering Assessing Ideas and Next Steps.the former should be very hard-nosed while the latter can deal with 'softer' issues surrounding the business. markets and competition. activities etc. 2. In the following sections. the Checklist for Preparing a Business Plan. If you don't have a sensible strategic plan. This should be presented as a pen picture of the business in three or more years time in terms of its likely physical appearance. we discuss the preparation of a strategic plan and present ideas for preparing the outline of a business plan and writing up the detail. Start with a Business Strategy A short strategic plan (2-3 pages) can provide a very useful foundation on which to base a much more detailed and comprehensive business plan. objectives and strategies of an existing business or the latest thinking in respect of a new venture. for example. As the prelude to developing a strategic plan.

the rules and guidelines by which the mission. . for example: ○ The company's internal cash flow will fund all future growth. Aside from presumably indicating a necessity to achieve regular profits (expressed as return on shareholders' funds).Objectives The third key element is to explicitly state the business's Objectives in terms of the results it needs/wants to achieve in the medium/long term. Programs The final elements are the Programs which set out the implementation plans for the key strategies. Strategies Next are the Strategies . They can cover the business as a whole including such matters as diversification. ○ All assembly work will be contracted out to lower the company's break-even point. objectives etc. or they can relate to primary matters in key functional areas. ○ New products will progressively replace existing ones over the next 3 years. organic growth. objectives should relate to the expectations and requirements of all the major stakeholders. Values The next element is to address the Values governing the operation of the business and its conduct or relationships with society. Goals Next are Goals. and should reflect the underlying reasons for running the business. employees etc. including employees. customers. may be achieved. to achieve sales of $3m in three years time. for example. or acquisition plans. These are specific interim or ultimate time-based measurements to be achieved by implementing strategies in pursuit of the company's objectives.

Sign up to vote on this title
UsefulNot useful