Plan Archives - Page 7 of 10 - BOLLYWOOD SURKHIYAN

Three Special Business Plan Types

Though it has undergone many changes, the business plan is still around. No longer limited to the traditional 12-15 page type-written document, a business plan can be exciting and engaging as well as useful. Many of us realize that it’s the planning process, and the associated research and soul searching, that is so valuable. The finished plan is just icing on the cake.

Just as there are many types of entrepreneurs and business ideas there are many kinds of business plans. Here are three that deserve some special attention.

The “Accidental Entrepreneur” Plan:

Believe it or not, it happens quite often. An impulse, a hobby, or a passing notion turns into a business without warning. One day you’re handing your extra back-yard tomatoes or homemade cake to the neighbors, and before you know it you’re filling out the forms for a booth at the local farmer’s market. Perhaps you create a unique bit of hand-crafted jewelry and wear it to school or work, and then find your phone flooded with messages like, “Where can I get one?” and “I’ll pay you to make one for me.”

When you’re writing a business plan in a situation like these, you need to address a few issues the intentional entrepreneur has already pondered. The first is do you really want this idea to become a full-blown business? Certainly it’s flattering when you realize there’s a market value for something you were doing anyway, but that doesn’t always mean you should launch a business. A lot of accidental businesses form around fads or seasonal items, and may not be robust enough to function as year-round, money-making, enterprises.

Next you will need to carefully examine what actually goes into your offering. How many hours does it take to create those one-of-a-kind bracelets? How much does it cost to bake a dozen of your special recipe cookies? How much research goes into “whipping up” a website? Making tangible goods requires space. Do you have room to grow enough squash to actually generate profits? Are these numbers you could sustain beyond the occasional personal or family use of your product or service?

The business planning process can be very helpful to “accidental entrepreneurs” as it allows you to decide which ideas are best left as hobbies and which ones could provide some real cash flow.

The “Back of a Napkin” Plan:

It is the source of entrepreneurial legend and lore, the million-dollar idea that was hurriedly scribbled on a bar napkin. Yet, for most potential business owners this option for business planning remains a fantasy. However, like any myth there is a tiny grain of truth inside. A quickie business outline can work as a launch plan under the right circumstances.

If you need to get going quickly to ride the wave of a fad before it fizzles, then fast, bare-bones planning may be all you’ve got time to execute. This works best when you’ve already got the infrastructure in place, perhaps from previous projects or an established business, and you can simply shift energy and resources to the new idea.

When you, and your partners if any, have all the core skills and industry knowledge you need to start right away without seeking experts, napkin notes may be enough to get going. Let’s say you are already an expert in technology and social media. Then you, and your team, probably don’t need a detailed plan to start developing a new app. You will draw on your knowledge and experience, and you understand that you might need to go back and do some more detailed and formal planning later.

Certainly when you reach the point where you are looking for investors or lenders, you will move beyond those first casual notes. Until then, drawing upon your expertise can allow you to quickly jump into the market and perhaps gain a competitive edge by using a minimalist plan.

The “One Pressing Issue” Plan:

Business planning does not stop the day you open for business. Under the best of circumstances you should be revisiting your plan once or twice a year to see how things are going, and where perhaps you’ve veered away from your original goals. Remember, changing the direction of a business isn’t always bad, but it should be intentional.

Then there are the moments when something seems to be going wrong, when one or more areas of the business just don’t seem to be working. Cash flow is anemic or the marketing message is flat. Perhaps customers have shown a marked interest in only one particular product or service, ignoring all your other offerings. This means it’s time to revisit your business plan, more precisely it’s time to revisit the questioning process that helped you craft your plan.

Look at the assumptions you baked into your original plan. Did the city follow through on opening that new park across from your location? Were insurance rates what you expected? How many hours of accounting or web design help did you really need? Are your online inquiries out-stripping your face-to-face sales? Or vice versa?

Sometimes no matter how much you research, plan, or test, things don’t go as expected in a business. This isn’t necessarily a herald of failure or a sign that you’re not cut out for entrepreneurship. Life and the marketplace are both unpredictable, and plans need to be fluid and responsive. The “One Pressing Issue Plan” is simply a reflection of a normal evaluation process.

While I still recommend the business planning process, I caution you to realize that a beautifully crafted document does not always equal business success. I’ve worked with many entrepreneurs who successfully launched without a plan, and some with beautifully written plans that never materialized. You and your business idea are unique. Your planning process will be unique as well. Be wary of one-size-fits-all advice or pronouncements from experts about how you should proceed.

A Business Without A Plan Is Like A Ship Without A Rudder

Do you have an idea for a product or service? Would you like to start a business? If so you will want to read this article. Here’s the good news: Every product or service ever invented by mankind started as an idea. An intangible thought impulse that was turned into reality through the efforts of one or more people working together in an intelligent and harmonious manner. Behind those successful ideas were organized written plans–business plans that laid the foundation and illustrated the path to success for the business owner and investors who funded the project. Then, those plans coupled with the burning desire of the entrepreneur to see the project through to completion is what helps to make a business succeed. The key words in this paragraph are idea, plans, burning desire.

Launching a business without a written business plan is like having a rowboat that has no oars, no map no sextant or compass for direction. The goal of any business is to succeed right? The ultimate destination is success. But what if you were given the rowboat mentioned a moment ago and told your destination was a specific dock in France? How would you get there? You have no oars, no maps, no compass and no sextant to guide you–would you jump into the rowboat, push away from shore and let the current guide you this way and that with no direction? And if you did, what do you think the probability of the trade winds and currents carrying you across the ocean safely so that you arrived at that specific dock…that specific destination? It won’t happen will it…

It is critical to have a well-written business plan to succeed in business. First, it allows you to think through the details of your business and see the obstacles ahead and minimizes costly mistakes. Most entrepreneurs are big on ideas and small on written plans. Every new business has a level of chaos associated with start up; launch and roll out and having a business plan helps minimize this chaos. Writing a business plan is hard work. And most often you will get out of it what you put into it. Plans are both logical and emotional. First, a plan should be based on logical analysis taking a rational, realistic and hard look at the FACTS associated with the business project. There is no room for guesswork, you want hard cold data, statistics, market trends, buyer behavior, and demographics, and there’s a lot you need to think through. But once you have the facts that support your idea, then you can emotionalize your plans in a manner that will sell your idea to others for their participation or financial investment.

Speaking of financial investment, your ability to find and recruit investors for your business is virtually zero without a well written business plan meeting the minimum guidelines generally anticipated by investors regarding plan structure and content.

Another interesting phenomenon about writing a business plan–it takes that intangible thought impulse you have–the idea–out of your head and turns the intangible” thought impulse into a “tangible” form that can be understood by others. Writing a business plan moves your idea or project one step closer to reality.

80% of new businesses fail within a year or two. Why? For many reasons but primarily because entrepreneurs fail to plan and over estimate sales and underestimate costs. The greatest thing you can do to start your project in the right direction is to write a business plan BEFORE you leap into any business endeavor. There is power in planning and you will find it when you do it.

We have a free business planning EBook called HOW TO WRITE A BUSINESS PLAN THAT WORKS located at our site in the freebie section, which you can download at your convenience. It is the most powerful business planning tool I have ever seen and I have over 20 years helping and consulting small businesses. I STRONGLY suggest you take advantage of this opportunity and get your copy today. Another Ezine Article Exclusive!

James W. Hart, IV

Small Business Ideas: How to Plan a Small Business

Thinking of starting a small business? Planning and growing a small business may seem daunting, but it can be a lot of fun. However, it does require some careful thinking and planning.

You need to learn what it takes to start from scratch and succeed. Weigh all the pros and cons before making any decision.

You are the person most capable of planning, building, and running your business.

First, ask yourself questions, to discover what dream is driving you. Learn how that will be expressed in the business you envision.

* What kind of business do you wish to start?

* What kind of service or products will you be offering?

* What needs expressed by your market, do they fulfill?

* Who will buy these services and products from you?

* How do you plan to finance this project? Do you know where financing can be found?

* How will people learn about your service and products?

* Where will your business be located?

Planning and Decision-Making

Considerable planning, important financial decisions, as well as legal steps, go into setting up a small business.

Financial Planning is vital during the overall business planning process. It includes:

* Financial planning and funding sources

* Pricing

* Record keeping

* Managing costs and expenses

* Cash flow forecasts and monitoring

* Analyzing sales results

* Contingency plans and financial reserves, including long-range financial planning

Operational Planning examines everyday production processes and management issues. Day-to-day business activities are also included.

* Acquiring suppliers.

* Employee hiring.

* Evaluating and choosing production methods.

* Product handling and delivery, etc.

* Choosing reliable, secure suppliers, who can provide raw materials and other quality supplies.

* Decisions about inventory and where to store it.

A legal Framework means the considering and adhering to all legal requirements, surrounding the setting up of a small business. It helps you evaluate the following:

* Types of business ownership

* Business-related legal requirements regarding safety, health, employment legislation, etc.

* Tax liabilities, including income tax, government insurance contributions, and VAT, etc.

Insurance includes numerous measures you have to take to secure your business.

Marketing: How a venture and its products and services, appear to the world.

* Marketing is all about identifying the needs of consumers, and satisfying those needs in a profitable manner. It is essential to identify the level of demand for your services, within the market you have decided to target.

Website: You need to build a website that tells your audience about your business, or helps you sell online. It needs to reflect your vision and commitment to quality.

Networking: The type of people you ought to know, and how you can meet them, so as to make your business succeed.

* Networking is becoming increasingly important for small businesses and is a key part of the marketing process.

* Take an inventory of all your contacts and relationships, seeking out those who can help your business.

Self-Development: Examining your skill set, and what more is needed for managing a successful business.

* Looking closely at your talents and current skill set, to determine what you still have to learn.

* Seeking ways to shorten the learning curve, with assistance from a mentor, a partner, or skilled employees.

* Online or local courses can also be of great benefit.

Future and Exit: In order to promise long-term success, you need to have a vision of how to expand your business into the future. Above all, you need an exit plan. Nothing continues forever, and you need to prepare to take leave of your business in a structure, controlled manner when the times comes.

Conclusion

Owning a business can be very satisfying and is certainly the biggest learning experience of your life. Careful planning, an understanding of the type of business you’ve chosen, as well as the target market it is supposed to serve, will increase your chances of long-term success.

Marketing Plan To Copy – A Marplan Is Like A Map To Your Profits

Have you asked a Marketing Agency to quote you for drawing up a Marketing Plan recently? If, like me, you own a small business, then it is hard to justify spending the £600 a day I was asked for here in Britain. I have to watch my bottom line like a hawk, especially in the difficult-trading-conditions we seem to be in. But here is a dilemma! A Marketing Plan is a really essential tool that will show a small business owner where their business is and map out where it needs to go. It is vital in today’s competitive environment that even small business should have one.

When you overdraft or financing facilities come up for renewal and your bank manager has to justify lending the bank’s money to your business, think how much easier it would be to convince him to continue backing you with a plan laid out in neat systematic form.

It is probably the case that far too many small companies don’t have a Marketing Plan, or the owner has it locked in his head. A place of storage that is really difficult to access when you need to show it to the potential investor or the bank manager. And inevitably this event usually occurs when you are really busy and committing your plan to paper, or computer file, is added pressure that you really could do with out. I run a small retail business – an independent bookshop and a Collectables gift business on the Internet.

Recently I studied for, and obtained, the UK’s Chartered Institute of Marketing’s “Professional Diploma in Marketing” by doing a convergent learning course on the net and in four intensive workshop days in my local town. It brought home to me that what we did in our own business was fine up to a point. As the course was very practical, with the chance to use any organisation of the student’s choice in the assignments that we had to submit, I ended up formally setting down the Marketing Plan on paper, that had been up there in my head for no one to see!

So what is a Marketing Plan for?

Well, its purpose is to lay down, direct and co-ordinate all your marketing activities and events. Think of it as a map. With a map it is easier to get some place. With a marketing plan it is easier to get the business to where you want it to head. This is, hopefully, to huge profits!

Perhaps you are the owner or director of a company seeking backing or further investment? Well a good marketing plan can be really important in attracting new investment or better bank facilities.

Perhaps you need help in making choices regarding which parts of the market to focus on and how to compete in that target market (Marketing Strategy)?

Often the mere process of preparing a marketing plan will help you to develop a successful marketing strategy through the discipline and process that you go through.

A good marketing plan will describe all the marketing actions to be carried out within a specific time period. It will contain details of your company, its products or services, its marketing objectives and strategies and information on how to measure the results of the marketing activities.

It might help if I give you a framework of basic elements that a Marketing Plan should include.

Basic Elements of a Marketing Plan

So what do you need?

1.Executive Summary – introduces and explains the major features and recommendations to executives (or your bank manager).

1.1 Introduction – a brief description of your organisation, its products and or services.

The context and objectives of the plan should be described and a description of what your business activities are. You should include current revenues, customers and your market position. You can also blow your own trumpet here! Note your accomplishments and successes to date.

If it is a new market entry or entirely new markets you are going for, then here is the place to describe any experience, training or competencies that your company has.

1.2 Vision, Mission Statement and Objectives

Mission statements focus on the long-range purpose of your marketing plan.

“To educate entertain and enlighten our clients so that they become more successful Marketers.”

Company objectives should be more specific and oriented towards action.

“We will deliver a balanced range of Marketing Solution Publications to the U.K. and Europe through mail order and Internet.”

1.3 Team description

Who will deliver the plan? What are the resources and structure of the team who will do so?

Management skills and capabilities. List any Marketing knowledge, sales skills, copy-writing ability, etc.

Agencies – Include any Marketing consultants, PR agencies you are using.

If there are any gaps honestly point them out and do a Training Needs Analysis.

1.4 Main marketing objectives

You need only give a brief statement of these here to close the Executive summary.

2.1 Current market conditions

What are the trends in your market?

What are the dynamics facing businesses such as yours?

Who are your target customers?

What competition do you face?

2.2 Market trends:

You should describe the macroeconomic trends that directly affect the target market that your marketing plan is aimed at.

This is where the PEST Framework is useful to include. (Sometimes referred to as PESTEL, SLEPT or PESTE) the components are:

Political

Economic

Social

Technological

Environment

Legal

2.3 Target market

It goes without saying that you should be aiming all your marketing efforts precisely at a target market or you are heading for a disaster.

All good marketing planning should follow from a very detailed segmentation of the market.

Size? Is it growing, staying the same, or shrinking?

Customer characteristics e.g. age, sex, income level, location, marital status, number of children etc.

Habits, patterns and values of target customer.

What are their wants, needs and desires?

What are their buying habits? – How do they spend their disposable income and when do they buy and how do they buy? How many times and when?

2.4 Competition analysis

In the micro environment analysis of a Marketing Audit you will hopefully have identified your present and potential competitors. What are their key products / services? How do they differentiate them selves? You should briefly explain the actions that you will take to oppose or overcome your competitor’s offerings.

I highly recommend you use Professor Michael Porter’s Five Forces Model for this and the four other threats he identifies. Space does not allow me to go into detail here although I have written a more comprehensive report in which I include a diagram of the Five Forces Model available from my own website.

2.5 Issues analysis

You should briefly list such key external issues as government legislation affecting your business, or new technological development that impinges on your product.

3.1 SWOT analysis

Strengths

Weakness

Opportunities

Threats

A major component of any marketing plan is the SWOT analysis. Strengths and weaknesses are born of internal elements while opportunities and threats come from outside.

When opportunities and threats are recognised they can then be examined from the point of view of your product strengths and weaknesses.

What could we change or improve about our product to make it easier for the customer?

What are our customers’ wants and desires? – We may possibly find new opportunities by thinking about such questions.

It is worth remembering that a threat can also be an opportunity to you, while a strength may also be a weakness depending on your point of view!

A business offering a vast selection of products may see this as one of their strengths. But for the customer, confused by the bewildering array of options as they try to find what they need, sees it as a weakness.

4. Positioning Strategy

Decide how you want your clients to perceive you in your marketplace.

Lowest price?

Best service?

Highest quality?

This is all part of the differentiation process.

5. Differentiation

You want to ‘stand out from the crowd’ so you need to make some decisions on segmentation and the positioning of your business. Combine this with your competitive analysis and you should be able to differentiate yourself from the competition.

6. Key messages

Thinking about differentiation should also help you to decide on your ‘Key messages’. Be warned that it usually takes time for these to make an impact, to ‘sink in’, as it were. This means it is important to keep repeating your consistent messages throughout any marketing campaigns.

7. The Marketing Mix

The 4 P’s.P is for:

Product – List your companies products and services. Include their key features. Is there something unique about them? If you are launching a new product or service include it here.

Price – There are many ways to set a price, some more scientific than others are! Remember that pricing is an integral part of the marketing strategy. Ask yourself is the customer willing to pay the price proposed and will it give you any profit? Some prices may be set on a cost-plus basis – adding a profit on to the costs of producing the goods or services. A better way is the ‘market-based’ price because it takes into account what your competitors are charging.

Place – where do you sell? Direct, through an intermediary? Bricks and mortar or virtual outlet?

Promotion – what activities are you going to use to create awareness of your product or service to generate sales? This is also referred to as Marketing Communications and includes direct selling, corporate events, brochures, web-sites, advertising. You should be warned that many inexperienced marketers think that the promotional plan is the entire marketing plan. It is, as you can see, but one component of the marketing plan.

7a. Integration of Promotional activity

Have you got a consistent look and feel to all your marketing mix? It is wise to make sure all your communications, brand positioning, propositions, messages, etc are derived from a single brand position so it is not confusing to the consumer by being fragmented. Also are there cross selling opportunities for you to exploit?

Only 4 Ps? – Funny, I thought I heard there were 7!

Before leaving the marketing mix I need to tell you about the Extended mix, which adds People, Process and Physical evidence to Product, Price, Place and Promotion.

If you are a service, or a not-for-profit organisation, then the extra three Ps are most important for you. But don’t just assume that because you are not, that they don’t apply!

People oriented organisations have to consider how their personnel make the marketing activities more, or less, effective when dealing face to face (or on the phone) with their public.

Process makes it easy for you to deal with the organisation. If it is a charity, for example, today people expect to be able to go on-line, set up direct-debits, pay by card and not just put money in the street collectors tin.

Physical evidence is expected to result from paying for a service or donating to a charity. You expect to see some physical evidence of the use your money has been put to.

8. Marketing Budget

You need a detailed budget for the next year showing the budgeted costs for each of your promotional items.

9. Measurement

Results and feed back must be gathered each month and compared with the marketing plan. When they are going astray you need to take corrective action.

Another tip is to ask your customers how they found you so that you can monitor what parts of your communications plan are working. Note this and include this in your measurements.

10. Milestones

It is a good idea to announce in the plan some marketing milestones you will strive to achieve. When you pass them celebrate!

So there it is a step by step process to create yourself a professional Marketing plan.

ITIL for Beginners: How To Create a Backout Plan

It is not the best moment of the week, when after long hours of preparations and intense work during an implementation window, your change fails. Moreover, it breaks other things as well. Sometimes, it is evident right after implementation, but sometimes you find out hours or days later. If you are fortunate, you can apply an emergency change to fix a pretty apparent root cause, e.g. missing one of the items on the implementation checklist. However, in many cases it will not be possible and you will need to back out the change.

A key to a successful backout is to have a plan. Yes, a backout plan, the thing that is often overlooked. After all, you want your backout to be an honorable surrender, not a panic escape. In order to limit damage to the business, and your reputation, you need to stay in control of the situation. To do that, the team of engineers need to know what to do and the Service Desk needs to keep the business informed.

A backout plan is intended to keep you in control. It is your insurance policy against Murphy’s Law. Let’s be honest with ourselves: we do not insure everything. Do not prepare a formal backout plan for every change. Just make sure the team can verbally describe how to go back in case things get messy.

You do need a more formal plan for more complex changes, though. Creating such a plan is one of the least favorable activities of many technical people. That is why the Change Manager should be accountable for getting it done. It should be included with the rest of change documentation, ready to be used if necessary.

A good backout plan should include:

low-level, technical instructions,
specific communication instructions, with contact names.

The list of technical instructions is created by reversing the order of activities from your implementation plan and describing how to back out from each of the executed steps. It may be relatively straightforward if majority of the work could be achieved by restoring the most recent backup. Consider a sample backout plan for such a scenario:

Notify the Service Desk about backout plan initiation. (Call them, send an email or raise a ticket – state it specifically.)
Disable user access to the system. (How? List the actions.)
Restore backup taken before the change implementation. (List the actions needed.)
Conduct system health checks.(List them all.)
Enable user access.
Notify the Service Desk of successful backout.

Often the plan will be more complex than it would seem. There might be many more restoration steps, involving various databases, file systems and other areas of the IT infrastructure. The basic template still applies. It needs to be detailed and tailored to every organization and every change. Needless to say, every action should have an owner, so make sure it is clear who does what.

Communicating with the Service Desk is very important. Communication in general needs to be part of the plan to maintain control over the situation. Moreover, the business needs to know IT is in control. The Service Desk should take care of projecting the image of control towards the business. They can do it by issuing regular communication if business impact is severe enough. They will also take calls from dissatisfied users and inform them about the resolution status.

A backout plan is your insurance policy. It is up to you to have it or not. It is recommended to have it for every complex change, because business continuity and IT credibility are at stake. Start by preparing such a plan for the most complex change you have coming up in your pipeline. Then build on that and over time you will have it ready for all high-risk changes.

Construction Safety Management Plan – Short and Long Term Advantages

The construction safety management plan is a requirement made of any construction company when they commence work on a new project, regardless of the scale of the job. This demand is generated by many different levels of government in order to maintain strict laws over companies when it involves the importance of safety on the job. Many companies usually look at these requirements as an obstacle, costing both time and money. However, once you take advantage of a low cost solution like templates, this demand proves to benefit a company. To understand how a business can benefit from this demand, it’s best to look at the short term and long term advantages of supporting a construction safety management plan.

While a company sees this demand on a per job demand, it is common to only look at this method in the short term scenario. Most businesses utilize legal services to achieve this objective, not due to convenience, but as a result of a lack of options to achieve this goal. Templates utilized in this method open new doors of opportunity where companies can create their own plans, ensuing in a saving of both time and money. With this alternative, you’ll find more useful short term results from your construction safety management plan because you take advantage of the message that’s sent once you support an idea like safety, rather than shunning it as an inconvenience to the company.

Besides the short term advantages which are present with this prospect, the long term benefits can prove even more beneficial when you embrace this process. For a business that regularly places a focus on the importance of safety with each job, the probability of accident is highly reduced. Most on the job accidents take place on account of companies attempting to take shortcuts in the construction process or associates looking to ignore safety protocols so as to increase their productivity.

Whilst these may seem like worthwhile risks for the completion of a project, the risks are often not worth the reward. Not supporting safety could often place your associates at risk and threaten your work with regard to both time and money. Long term support of a construction safety management plan sends a message to all associates to follow the guidelines in order to safeguard your business and your current project.

When a business embraces a focus on safety, it’ll find many rewards for taking this path of opportunity. Furthermore, once you make use of the choice of templates to meet these safety plans demands, you will discover a way to save time and money in your noble venture.

The templates available in this site are unique because it is designed to be easily understandable, compliant with OSHA legislation, adaptable to any project and it was also created with ease of implementation in mind.

Plan? We Don’t Need No Stinkin’ Plan

Unfortunately that famous line from Humphrey Bogart’s movie The Treasure of the Sierra Madre”, “Badges? We ain’t got not no badges. We don’t need no badges! I don’t have to show you no stinkin’badges!” is often one of the most misquoted lines in movie history, in fact, when I first started writing this, I had to correct myself when using the quote! That being said, let’s get to the point of this blog……. Planning. Our last blog discussed planning on a global, big picture scale. Let’s focus on what it means to you, as an individual running your business! The first step is to realize “WE NEED A PLAN!” How do you go about developing a plan that will be meaningful and effective for your business? There are many templates and programs that will assist you with the fundamentals, a simple Google search will provide a wealth of information. It’s what you put in the plan that counts! Following are some ideas and thoughts that you may want to consider as you develop your plan:

o What is changing in your industry?

o What is changing in technology and how does it impact your ability to connect with customers

o What is changing with your customers?

o What is changing in the economy?

We all know the traditional ways to reach out to customers….. mailings, telemarketing, mass emails and others. But what is going to grab your customer’s attention, how can you convince them to choose you over all the other alternatives in the market? Think about the following:

o Provide value, beyond the product – value in personal attention and customization

o Make yourself unique – find a way to differentiate yourself from the competition

o Build Relationships – showing the customer you really are invested in helping them make the best decisions and choices with your expertise. They will count on you to make sure their best interests are being looked after!

o Network in the community…. Join the Chamber of Commerce, sponsor a youth activity, help with a charity event, get involved in local professional groups

The key is your plan should focus on cultivating a two-way relationship with your customers. Yes, the new technology of Social Media is important, but so is an act so simple most of us have forgotten it…. Pick up the phone or stop by to say a personal “Hello”.

How to Be a Masterful Trader Part 4 – A Trading Plan

Why Have a Trading Plan?

First thing is that we have a Trading Plan so that it keeps us on the right path like a road map and if we don’t have a road map how do we know where to go.

Secondly, having an up to date Trading Business Plan and consistently using it gives us the opportunity to keep a record of our trading results so that we can go back over our trades and identify our weaknesses and strengths so that we can learn from the past.

Thirdly trading is a business, not a hobby (remember that a hobby costs money, a business makes money).

Every successful business has a business plan and a trader’s business plan is his/her Trading Plan and the more diligent you are with your Trading Plan the higher the probability you have of being successful.

What Should Your Trading Plan Include?

First, you really want to have written in your own words a description of your Entry Points, how you manage your trade and how you will exit your trade.

Now this will change as you progress through the different stages of being a Professional Trader (from Paper Trader to Demo Trader to Live Trader).

Included in our Forex education programs are sample Trading Plans that cover all of the major aspects of each of these distinct and vital stages.

Your Plan should cover different aspects including your routine, your mind set, addressing your weaknesses and building on your strengths, your goals for the day, week, month and year.

It is important to include goals in your Plan – this is the area where you want to go into as much detail as possible – it is the area that will motivate you to achieve your goals.

The goals section is where you will go first when you are having a tough time keeping on track.

Your Trading Journal (when you plan to trade – including the session) should also be covered in your Trading Plan, as well as the time you devote to journaling your trades and the time that you review past trades to look for areas of development.

Your Trading Plan is a Living Document

You should go over your Plan at the beginning of every trading session as it will enforce what your trading style is, and at least you should up date your Trading Plan each week.

One of my friends who happens to be a trader said this to me once (well more than once) “you can have all the trading tools in the world but if you don’t have a plan on how you will use them, then you will have a hard time trying to be successful with them”

Trading Plans – Your Trading Business Plan for Success

The reason I am passionate about trading plans is that I did an overhaul of my trading plan recently and found that once I had finished going through it and updating it I traded with more confidence and freedom than I have since April 2003.

The other reason; which is more important to me, is that the all of the traders I have worked with have experienced astounding trading results after clearly writing their Plans and using them to keep them on track.

I also recommend having a Plan for each phase of your Trading Business – Paper Trading, Demo Trading and Live Trading. Each phase of your Business is distinct and you should have structures, goals and measures for each phase.

These are the plans that I use when I trade and the ones that I recommend that all of my clients use also.

How to Write a Business Plan That Works

Key components in and organisation’s success will depend on a great degree on how well you;

can gather and interpret information
adapt to change
manage staff and resources
promote your business
look after customers and more.

This is where forward planning can help you.

A colleague once told me that ‘even a bad plan is better than no plan at all’. A bad plan at least shows that you have given some thought to the direction you want to go in.

A good plan takes time and effort, especially the first time you do one and many business owners or operators think they don’t have the time, or don’t see the value in it. But believe me… it is worth the time and effort!

It is an opportunity for you to build solid foundations for your business, based on known facts and these allow you to:

be very accurate in your plans and future projections.
avoid unforeseen pitfalls and crisis situations
spend your money and/or other resources in the most effective way
stay ahead of the market
make the most of every opportunity
be pro active and choose your own course rather than be reactive and follow everyone else
stop wasting time, effort and resources on inefficient processes and more

Good business planning involves:

looking at what you’ve done in the past few years
looking at where you are now
drawing conclusions from the above two points
based on that information determining your objective for the coming year/s
setting key strategies to help achieve the objective

Analysis of Past Performance

In this section of a business plan you look at the past year (or two) to take a good look at what worked and what didn’t. Where you came from is every bit as important as where you are going. You need to look at:

What promotional activities did you run– for example did you have any discount deals, special offers etc?
What worked? What didn’t?
Why did the activities work so well, not so well – find the reasons
Advertising campaigns
(again) What worked? What didn’t?
Why did the campaigns work so well, not so well – find the reasons
What mediums did you use? (ie Newspapers, magazines, radio. List the actual companies you used as you may have used a number of different ones.)
How much did you spend on them?
Which ones generated enquiries and which ones didn’t?
Did you keep track of the enquiries, if so, what were the results?

Keeping statistics on where enquiries come from can help you to use your advertising budget in the most effective way. There’s no point in spending a lot of money on advertising on television, for example, if most of your enquiries come from newspaper ads or word of mouth. Asking customers where they heard about you and keeping a record is the best way of determining advertising effectiveness.

Were there any noticeable or unusual increases or decreases in your business? If so, why did they happen?

Were the increases/decreases at any particular time of the year, or did they affect any particular product or service. If so why? Do a detailed analysis of product and service sales. How many of each individual product or service did you sell? Break these figures up by month (as shown in the graph above) as this will, again, show up regular high and low periods which will then allow you to forward plan. For example in high sales periods you know that you will have to order more stock and put on more staff whereas in low demand periods you order less. You can plan for these peaks and troughs in advance… because you have statistically shown that they are coming. An example of a detailed sales analysis is shown on page 15.

Did your competitors do anything that impacted on your business? If so, what was it?

How did it affect you?

Are they likely to do it again?

What did you (or could you) do about it?

Budgets – income and expenses. This is extremely important and we will look at this in detail later in the document. Over the years these statistics will build an extremely accurate picture of your expenditure habits and sales that will show trends. With this information you can anticipate what is going to happen and proactively avoid any pitfalls or take advantage of upcoming opportunities. You can forecast – with a fairly high degree of accuracy – how much you will earn and spend in the coming year. While you might have an accountant to look after the “book keeping” for you, it is essential that you know exactly where your money is being spent and what your income is made up of.

The answers to these and any other questions relevant to your particular industry and business will give you a solid base upon which to build your plans for the future. Knowing how you got to where you are now can show you where you went right… and where you went wrong and gives a clear

Conclusions

Looking at the above information – what conclusions can you draw? For example:

What will you do again next year and why?
What won’t you do again next year and why?
What will you do differently and why?
Were there any lessons to be learned?
What were they?
Did you spend money on areas that were unsuccessful / unsuccessful?
How much?
Was this money well spent? Why / why not?
Which products sold well / not well?
Will you expand your product line?
Are there any products you should discontinue?

Overview of Current Situation

It is very important to have a firm grasp of your current business environment. This is where you look at what is happening around you right now. Things that are happening that could potentially have an impact on your business. This will:

give you a clear idea of any issues that might get in the way of your plans in the foreseeable future
give you the opportunity and the time to take proactive action on any of these issues. This is much better than having to “react” to a change or problem that you didn’t anticipate.

It’s like having a high powered torch in a tunnel as opposed to a match!

A good overview of your current situation will involve looking at:

the business environment in which you are operating
your strong and weak points
what your competitors are doing.

Business Environment Analysis

What exactly does “business environment” mean?

At its widest view point it can mean the sum total of a number of external and internal factors that affect you and the organisation you work for.

External factors could include such things as:

Political issues. The stability of the Government can have a dramatic affect on the country’s or state’s economy.
Legislative issues. New legislation can have an impact on your particular industry.
Economic Trends. Are people spending money? What are they spending it on and so forth.
Social Trends. What’s in.. what’s not? Safety & security issues as well as environmental protection issues etc are considered here.
Competitors. What is your competition doing and how does that affect your business?
Technology. This is an area that is constantly changing and can have quite an impact on the way business is done.

Also known as a PLESCT Analysis this is a thorough look at the world around you and the influences various issues may have upon your customers, suppliers and therefore your business. Doing this type of research means that you should not be caught unawares by new legislation, trends, changes or advancements. PLESCT stands for: Political, Legislative, Economic, Social, Competitor and Technology and looks at each of these sectors and how they may affect you positively – or negatively .

Doing a PLESCT Analysis

Some of the issues to consider when doing this analysis can include such things as:

Political issues. Here you should look at the general political stability of the country or state.

Is there an election due? People get nervous around election times and are cautious about spending / investing their money
Has there just been an election? In which case is the new government likely to make changes to the status quo – and if so, how will this affect you?
International economic and social environment – how stable is the situation?

and so on….

For example changes in government often have an impact on businesses dealing with health, education and employment as existing programs are often changed or discontinued after an election, or new programs are introduced. International economic crises often have a big impact on our own market as does the increasing threat of terrorism or conflict situations.

Legislative issues

Have any new legislations been passed / or amended that affect your industry?
If so, what will you have to do to comply with them? How will these changes affect:
staff?
resources?
policies and procedures?
costs?
Do you need to obtain any licenses or permits?

For example all staff working in the childcare industry, or dealing with under 18’s, must have a Blue Card, while industries dealing with tobacco or alcohol have very strict licensing laws.

Economic issues and trends

What is the current economic climate?
Does the current international climate have an effect on us?
Are people spending more / less money?
What are they spending it on?
Are they likely to spend it on your product or service?

For example, the cost of living is currently rising faster than wages – things such as petrol prices and interest rates are increasing rapidly and people are thinking twice about spending their hard earned money.

Social issues and trends

People will often be influenced in their purchase decisions by “what’s IN”, or may wish to keep pace with friends
Environmental issues such as water saving, conserving energy and so on can have an impact on people’s purchasing decisions and so need to be considered
Cultural issues also need to be considered – people from different countries and backgrounds have views and customs that may dictate how they make their purchasing decisions.

Competitor information – This is a very important part of your business environment analysis – you need to know as much as you can about your competitors. Questions you need to ask are:

Who are they?
Where are they located?
How big are they (compared to you)?
Do they have any affiliations?
What are their promotional activities?
How do they advertise?
What do they advertise?
How does their product range compare to yours?
How do their prices compare to yours?
How does their service compare to yours?
What impact do they have on your business?

The answers to these questions will give you an overview of how you compare to them and what you can do to improve, and therefore win extra business.

If practical, a product/price comparison grid is an excellent way of keeping an eye on how you are faring against them.

It’s also a good idea to also do a SWOT Analysis on your main competitors (next section) – you need to be able to:

counter their strengths
take advantage of their weaknesses
take advantage of the same opportunities and
maximise their threats.

Technology –

Is there any new technology available that will have an impact on the way you do business?
Is it viable for you to adopt this new technology from a cost point of view?
Can you afford not to adopt this new technology from an efficiency point of view?
What impact does the internet and electronic means of communication have on your business?

Internal influences also need to be taken into considerations and could include:

The overall economic state of your business. Is it doing well or not?
Change of ownership or management of the business. This could have a big affect on the internal workings of the company and the company morale.
Change of direction for the business. Are you offering new services or products?
Updating or upgrading of the business. New premises, new equipment etc.
Down or Upsizing. Are you laying off staff or hiring more?

Looking at the PLESCT Analysis and your internal influences in detail will give you a firm understanding of what is going on around you, and will help you:

avoid unpleasant surprises that could be costly and damaging to your business
stay a step ahead of your competitors
help you take advantage of new opportunities quickly
minimise the impact of negative trends…..

SWOT Analysis

A SWOT analysis allows you to have a deep down, honest look at your organisation in terms of its strengths, weaknesses, opportunities and threats and to look at ways to make you stronger.

Strengths

What are your organisations strong points? For example:

Do you have a great location?
Is it easily accessible?
Is it a long established company?
Does it have an excellent reputation?
Does if offer anything unique?
Do you have a lot of repeat business?
Are your prices the best?
Are you a market leader?

and so on.

Weaknesses

What are your organisations weaknesses? For example:

Is it a newly established business and not yet well known
Is the infrastructure in the surrounding area poor making it difficult for customers to get to you?
Are there any problems with suppliers or staff?

and so on. A point to remember is that not all weaknesses are negative and could be viewed as opportunities for improvement.

Opportunities

What opportunities are there that you could take advantage of? For example:

New legislation opening new markets to you
New housing or business developments bringing new customers into your area
New technology that will make your production or processes more efficient
Introduction of new product or service lines that will increase revenue

and so on.

Threats

What things could stop you from achieving your goals? For example:

A new competitor in the marketplace
A change in legislation that will mean major changes to your business practices.
Re-zoning of your area or roadways changing and taking customers away from their current routes (where you are located)

and so on.

Conclusion:

When looking at your SWOT Analysis what areas need to be addressed?

Strengths – what can you do to capitalise or maximise on them?
Weaknesses – what can you do to minimise or negate their impact. Which of them can be turned around to become a strength?
Opportunities – what do you need to do to take advantage of these opportunities? How can you ensure you get your slice of this opportunity?
Threats – what can you do to avoid or minimise the impact of the threat?

The answers to these questions will form part of your business plan.

Objective for Next Year

Having looked at your past analysis and current business situation you should now have a solid grasp of your business and where it needs to go to remain successful. Your endeavours to date will now give you a clear direction – or objectives – to aim for in the next one to three years.

One overall objective will have a number of Key Strategies – each of which will, in turn, have a set of tactics designed to help achieve each strategy and therefore the ultimate goal.

Your objective is WHERE you want to be in a given period of time (ideally 1 – 3 years0
Your Key Strategies are WHAT you need to do to achieve the objective and
Your Tactics are HOW you are going to go about actually making it work

Key Strategies

The objective, as stated, is where you want to be. The key strategies are the issues you need to address in order to achieve the objective; WHAT needs to happen. For example if your objective is to increase your revenue by 10% over the previous year, then typical key strategies could be:

Introduce a new product range to fill an identified market need
Decrease expenditure by 15%
Increase your customer base by 10%

All of which would work towards achieving the overall objective.

Obviously strategies will be determined by your own business and industry needs, so think about the things you need to do to achieve your goal.

Tactics

Each strategy will have a series of tactics (or steps) that need to be taken to make that strategy work. As mentioned, these will outline HOW you will go about each strategy. For example.

Key Stratey 2: Decrease expenditure by 15%

2.1 – Review all current suppliers to ensure we are getting the best product for the best price

2.1.1 Offer tender opportunitities to new suppliers
2.1.2 Research new suppliers via web, phone calls etc
2.1.3 Review all suppliers on an annual basis.

2.2 – Introduce new procedures regarding unnecessary printing of emails and other documents to decrease amount of paper being used

2.3 – Re-use single sided documents as scrap paper / memo pads to save paper

2.4 – All electrical equipment and lights to be turned off when not in use

2.5 – Review discounting policy and determine if this could be replaced in a more cost effective manner

2.6 – Review consumable usages

and so on.

Once again, the tactics will depend entirely on what strategies you need to fulfil and should be as detailed as possible. These tactics will form part of your action plan. If there is a cost involved, or extra resources, then detail them here.

Sales Forecast for Next Year

Forecasting is neither as scary nor as complicated as it sounds – if you keep accurate sales records!

Sales forecasting means making an “educated” guess on how much revenue you will earn in the coming year and for this reason accurate records are essential and indispensable. You need to know where your sales came from – by product or service and even by month or week of sale. This may seem overkill but eventually this data will give you a complete and detailed picture of exactly how your business is performing. For example spikes (up or down) in sales figures don’t happen for no reason – detailed statistics can show up these spikes which might be due to such things as:

Promotional or advertising campaigns
New trends
New products
Competitor initiatives
Seasonal fluctuations
Economic climates and so on….

For example – the Tourism Industry is very much affected by high and low seasons. They usually know well in advance when demand will increase or decrease. Travelling to Europe in their winter is low season and demand is not as high as going in their spring or summer time. Knowing this tourism operators can plan for these periods by developing specific products designed to increase sales and take advantage of increased demand in high season. They can also accurately forecast revenue because they have a solid knowledge of who their customers are and when they travel on a month by month basis.

The same may well apply to your own industry.

A review of past years sales statistics can give you an excellent idea of how your sales happen on a month by month basis. You can read the trends like a story – allowing you to estimate with a large degree of accuracy what sales you can expect to make and know how much you will need to spend in the next year.

But what good does all this do you in forecasting? When you have collected this data for a number of years you can start to build up a picture of:

peaks and troughs in your sales
popular and less popular products,
popular times of the year
effects of advertising and/or promotional campaigns and so on

Sales figures rarely drop (or increase) for no good reason.. the trick is to be aware of what is going on around you so that you know why increases or decreases happen. This is where your PLESCT and SWOT prove valuable.

Armed with all this accurate and well researched information you should be able to make a reasonably accurate prediction on how many of each product you will sell in the coming year.

Action Plan

Points for your action plan will come from the tactics. By putting them into an actual action plan, detailing what needs to be done, by whom and by when, you can ensure that each task (or tactic) is done on time and will therefore take you that step closer to reaching your objective.

That, ladies and gentlemen, is basically it!

By following these logical steps you can:

gain a greater awareness of the environment in which you operate
avoid major pitfalls that may come your way
realise your strengths
overcome weak points
take advantage of opportunities that are presented to you and much more

Templates for building a better business plan can be found on www.lptraining.com.au

Vending Machine Business Plan – Sample Layout With Section Titles

The preparation of your vending machine business plan will be the most important thing that you do prior to launching your new venture.

A business plan will be a crucial resource that will help guide your business in the right direction. A business plan sets out what has to happen in order for you to reach your goals, outlines how you will do it and sets out alternative plans in case things change further down the line. It forces you to do the research that is necessary in order to find out if there really is a market for the vending machines and locations that you have in mind.

It may be necessary to have a plan written in a formal, professional style if your aim is to use it to convince bankers or investors to support your idea. However, even if you don’t have anything to prove to anyone, your business plan will help to confirm the viability of your ideas in your own mind.

Keep a copy of your plan on your PC as well as in a file or binder in case of emergency. Don’t forget about your business plan once you have opened your doors for business. Refer to it regularly to make sure that you are on track to meet targets. Don’t be afraid to make changes to the plan where necessary.

Every entrepreneur or business consultant will have different ideas about how a business plan should be structured. There are many different templates available online and some sites even have samples relating directly to the vending machine industry. Below we offer an example of a suitable outline with section titles that you might consider including in your own vending machine business plan.

Cover and Contents Page

Start off with a cover page with a heading to let people know what the report is about, who the author is and when it was written. If you will be presenting the report to many different people then you may consider including a personalized cover letter with each copy of the plan. Start out with a table of contents so that readers can easily find their way around the report.

Executive Summary

Summarize the other sections of your business plan. Present some brief information on the opportunities that you see in the market and summarize what it is that you intend to do with your business to capitalize on these opportunities. Try to entice readers into reading the whole report.

Background

Offer the reader some background information on yourself and your reasons for starting a vending machine business. Provide details of any relevant experience or competitive advantages that you have.

You can also include a vending industry background showing national industry data as well as information about the local industry that you plan on entering.

Mission Statement

A mission statement is usually a phrase or a couple of short sentences that summarises what your business is all about, what it does and how well it does it. It is a good way to remember the basic goals or philosophy of your company aside from the profit motive. A good mission statement could mention something about the standard of your machines and products or how you strive to be better than your competitors.

Goals and Objectives

State the goals that you wish to achieve in the short and medium terms. Goals could include placing a certain number a vending machines or reaching a certain income level per machine.

Startup Requirements

Set out a list of startup costs and calculate the total amount of capital that will be needed for the company to get started. Report on some of the funding options that are available to the owners.

In this section of the report you can also mention some of the other things that must happen in order for the business to commence trading legally and professionally. Mention the processes and the fees involved with applying for licenses, permits and other paperwork under the laws of the region where the business will be operating.

Ownership and Management Structure

Note who the founders of the company are and the particular ownership interest that each has in the business. For those who will be active in the management of the business it is important to outline what role they will play and their responsibilities. Will the business be registered as a sole proprietorship, a partnership or a corporation?

Business Operations

This section of a business plan should outline the details of how you plan on running the vending machine business. Include information on where your business will be based, administration, any plans that you have to hire employees and how your business will run on a day to day basis.

Include details on vending machines, maintenance, products, distributors, route planning and how you will record and manage sales data. What systems will you put in place to maximize productivity and efficiency?

Try to come up with solid reasons why you are choosing a certain vending machine, product line or system. Wherever possible include some supporting evidence from research that you have done.

Market Analysis

Using data from your market research you can report on the current state of your target market and identify some of the opportunities. Here you can include demographic data as well as information that you have gathered from surveys and other investigations.

Provide information on the competition in your target area and examine their strengths and weaknesses. Look at ways of delivering products and services via your machines that are distinctly different from what your competitors are offering. Get ideas from them about what is working well and what isn’t. Look for a competitive edge. Don’t forget to also mention indirect competitors such as convenience stores, in-house cafeterias or food vans.

Marketing Plan

Outline a strategy for creating a vending brand that will meet market needs. Based on the market opportunities that you see, set out a strategy for meeting customer needs in terms of locations, vending machines, product lines and pricing.

Provide details on how you plan on getting new machine locations, arranging appointments with ‘decision makers’ and selling your services to them. Your marketing could mostly be done by approaching decision makers directly or you could rely on advertising to generate some enquiries.

Also outline your plan for marketing directly to your customers or end users. These could include ‘point of sale’ promotions on the machine front or how you or your staff will build relationships with customers when you visit the premises where your machines are located.

You should also mention how you plan on maintaining vending accounts and customer satisfaction in the long term. Customer retention is just as important as customer acquisition.

Financial Planning

Use a spreadsheet program to set out forecasts of cash flows in and out of your vending machine business over a hypothetical two year time period. If you have done your research you should be able to anticipate monthly income and expenses going forward. You will thus be able to determine future levels of profitability and a break even point.

Run a variety of different scenarios that consider a conservative growth rate, an expected growth rate and an optimistic growth rate. Things don’t always happen like you expect so it is important that you plan for a variety of outcomes.

Appendix

Lastly, you should attach an appendix to the report that includes any reference letters, documents, vending machine pictures or other supporting material that has been referred to in the contents of the plan. Try to back up all of your assumptions with proof wherever possible.