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Eight Steps To The Next Level – The Business Plan, "The Engine of Small Business Development"

This is the second of a series of articles describing how small business owners and managers can drive their business growth and profitable development through the creation and implementation of a business plan.

I know the prevailing view among many small business people is that “planning” is for the larger, more substantial business and “they are too busy running their business to have time for planning”. Indeed, many small business owners are “too busy” running the business, but they ignore, at their own peril and survival, that “failing to plan is planning to fail.”

I am convinced that the small business owner will benefit from engaging in this business planning process because of the nature of carefully examining and thinking through the way their business competes and operates; – and how that will align with their determination of “what business they want to be in”.

This business planning process yields a stronger, more profitable business which provides real value to its customers and the marketplace.

The business planning process described in this article is the most logical, pragmatic and practical examination possible of the small business. This process is far from arcane or mysterious, but totally focuses on the reality of the small business environments (the business, the economy, competition, customers’ needs, wants and desires) as well as the determination and allocation of the firm’s resources).

Business Planning Process – Eight Major steps

For the past thirty years, I have successfully used the following business and strategic marketing planning process. The following process consists of eight major steps which are sequential and continuous. I will describe the nature and function of each of these steps.

This process applies to all types of organizations; regardless of size, products, services, or industry…. I have even used this process with a national religious organization.

1. DEVELOP MISSION AND POSITIONING STATEMENT

2. SITUATION AUDIT

a. Internal

b. External

3. WOTSUP ANALYSIS

4. MAKING ASSUMPTIONS

5. DEVELOPING OBJECTIVES

6. STRATEGY DEVELOPMENT

7. SPECIFY TACTICS AND ACTIONS

8. PREPARE FORECASTS/BUDGETS/FINANCIALS

1. MISSION AND POSITIONING STATEMENT

With respect to the definition of your businesses’ purpose and mission, there is only one focus, one starting point; it is the customer or user of your products/services. The user defines the mission of any function or business. The question “what is our mission or purpose” “what business do we want to be in?”, can therefore be answered by only looking at your business from the outside, from the point of view of the customer or potential customer. What the user or customer sees, thinks, or believes at any given time must be accepted by your business management as an objective fact to be taken seriously.

By definition, the customer is purchasing the satisfaction of a need or want.

For example, here is a well-known and real example of a business mission which defined the way in which that company conducted its activities.

A drill bit manufacturer defined its mission as determining “what size holes customers need” their focus was directly on customer needs and not on their product specifications. They were customer-focused and very successful.

Once the mission statement has been completed develop the positioning statement for competitive advantage and prepare the USP – your unique selling proposition. “Why the business is able to provide more effective solutions and greater value than the competitors.”

2. THE SITUATION AUDIT- Internal and External

The situation audit is a description and analysis of past, present and future data (information) which provides the basis for pursuing the business planning process. It is an organized method for:

collecting pertinent information
interpreting its effect on the business’s environments (market conditions)
analyzing significant trends
projecting all pertinent factors, which could influence company activities.

3. WOTSUP ANALYSIS

The acronym WOTSUP stands for Weaknesses, Opportunities, Threats and Strengths Underlying Planning. This step flows naturally from the fact base (Situation Audit). The Weaknesses and Strengths constitute an internal analysis, i.e. “what are we at good and bad at?”-

Opportunities and Threats, on the other hand, form an external analysis. From this analysis, objectives can be formulated with specific action plans designed to overcome weaknesses and threats by exploiting the business strengths and opportunities.

4. MAKING ASSUMPTIONS:

Assumptions make planning possible. Without the use of assumptions, planning would be almost impossible. Since planning deals with the “futurity of current decision-making” and events in the future are almost impossible to predict with unfailing accuracy; – assumptions make planning possible.

5. DEVELOPING OBJECTIVES

Overall objectives are the real crux of the Business and Marketing Planning Process. They deserve every last ounce of time and effort – often frustrating. The objectives form the umbrella under which the balance of the whole planning structure is built. Because of the key role they play they must be thought through and be expressed in the most specific and concrete fashion. In simplest terms an objective is… “what do you want to accomplish?” Objectives are prepared to overcome weaknesses and threats developed in the WOTSUP Analysis and to exploit the opportunities and strengths.

6. STRATEGY DEVELOPMENT:

Once the objectives have been developed, the preparation of strategies is the next step in the process. Strategies, must explain, in a broad sense, how the objectives will be achieved.

7. SPECIFY ACTION PROGRAMS:

After the objectives and strategies have been developed, describe the work to be performed. The actions must be very specific; what work is to be done, by whom, how and when.

8. FORECASTS/BUDGETS/FINANCIALS PREPARED:

The action programs when completed form the basis for budget preparation. The cost of each action and the revenues derived from the detailed actions generate the operating budget and cash flows for the Business Plan.

Many organizations confuse planning with budgeting. One important purpose of the budget is to ensure the business has adequate financial resources to function. Budgeting is about not failing, planning is about what is possible.

Home Computing in "The Cloud"

The trends lead me to believe the computing we do at home will soon predominately reside “in The Cloud.” This means the applications we use and rely on everyday are not on our computer at home but in an application out on the Internet and accessed by your browser.

Move Yourself To “The Cloud”

Many folks have already made the move. Here are some of the typical things others have done and what you can do to make the switch yourself:

Use Google Docs as your basic productivity tools. Not only are they very effective and free tools, but they are on-line and available wherever you go (docs.google.com). You don’t need to buy Microsoft Office or even download the free Open Office at OpenOffice.org. I find that on my six year old PC, Google Docs will launch an application (e.g., Documents, Spreadsheet, GMail, etc.) in The Cloud faster than I can launch a Microsoft Office product (e.g., Word, Excel, Outlook, etc.) on my PC. Also, there is freedom in not being tied to that one PC sitting someplace where you can’t always get to it. A notebook works pretty well in this regard, but what happens when that notebook breaks or it goes missing? It kind of feels the same as when you lose your wallet or your keys. It does not feel good at all. With home computing in The Cloud, it is a problem to lose your equipment, but little of what you had been working on is lost.
Use Mint.com, Quickenonline.com or other online financial tracking programs. First, they are currently free. That is one big advantage. They are not as good, in my opinion, as an installed program such as Quicken, at least not yet. However, if you are doing nothing other than wanting to track your current balances to ensure your cash flow is positive (i.e., not overspending), then these look like great tools.
Use Facebook, LinkedIn or other social networking sites. These sites provide a powerful place to manage your social and professional life. This includes keeping in touch with family and friends and showing your photos, to staying networked with business associates and looking for that next big opportunity.
Get your news from CNN.com, USAToday.com or get more focused news of interest from more specialized sites. For example, I pour through consumerist.com and pcmag.com for practical information I can use every day.

Access “The Cloud” From Anywhere

Because I’ve moved much of my mainstream computing to The Cloud, I find I can access it from just about any PC and from my mobile phone. Having my Cloud in my phone, which can browse the Internet, is a phenomenal tool. If the Palm Pre or the iPhone were to work with my wireless service provider, I would upgrade and give up my trusty Motorola A1200.

Use “The Cloud” But Backup Your Critical Data

Do keep backups of your data, especially data you need to access your sites on the web.

For passwords I use Password Safe which is free from sourceforge.net. This way I have all my passwords in one place. Consequently, I also have all those key sites I access in this same place. (This, I discovered, was very handy when I changed my e-mail account recently.) I backup the password file everyday to The Cloud using IDrive.com. I also do a monthly backup of the password file to a USB drive which I keep stored in a fire safe.

Be Secure In “The Cloud”

The scariest part of moving to the Cloud deals with the protection of your privacy and with security of your information. I admit this still worries me a bit. Can I really trust Google? Or how about trusting QuickenOnline.com with my financial data? We hear about data breaches every day. Some hacker broke in and stole personal information from thousands of customers. I have been notified more than once that this has happened at a company with which I do business. I have free credit monitoring right now due to a recent incident at an investment company.

I have also been called by my bank asking about charges made to my credit card. They turned out to be fraudulent and the bank removed the charges from my account. What was interesting is that I had just downloaded my most recent bank transactions into Quicken. I did not see these fraudulent charges. I immediately did another download of my bank transactions. There they were, along with transactions reversing the charges. My bank had detected and responded very quickly to these illegitimate activities.

My confidence in reasonable security in The Cloud is based upon my doing business over the Internet since the early 1990s when the Internet opened to commercial sites. The examples with my bank and with my investment company have helped reassure me that they are proactively trying to minimize the risk of loss. There is no guarantee of security. However, it is not obvious that your risk of loss is any greater in The Cloud than it is anywhere else.

“The Cloud” Is Here And Advertising Will Pay For It

I do believe that what we know as personal computing is moving into The Cloud. In the near future we will have much less reliance on a single piece of equipment loaded down with lots of pricey software, much of which we will never use.

Of course, like the broadcast media for decades, this Cloud is driven by advertising. So just as we once watched TV for free, before cable, and still listen to radio for free, it looks like we are going to a personal computing Cloud paid for by advertising. The personal computer will be needed to access The Cloud, but your software applications and information will be in The Cloud and not on your personal computer.

As You Write Your Children’s Book, Consider "The Slow Reveal"

Eighteen months ago, I took up karate. It’s a great workout, but the biggest reason I train is I want to be a formidable senior citizen. If someone tries to nab my purse or deny my senior discount at Denny’s, I’ll be able to answer with a quick roundhouse kick to the solar plexus. By laying the foundation now, I’ll be a badass when I’m 65.

But the coolest thing about taking up karate when you’re a woman in her mid-40’s is that people don’t automatically expect it. If you’re just a casual acquaintance, you won’t know I’m working toward my black belt. And by the time I’m collecting Social Security, the possibility won’t even cross your mind. Unless you try to steal my purse.

In life most people become more complex as we get to know them. This should also be true for characters in children’s books. At a conference recently, Lyron Bennett, editor for Sourcebooks Jabberwocky, called it “the slow reveal”. It means giving your characters enough varied qualities that some can be withheld until called for in the plot.

The slow reveal is especially important when writing a series. If J.K. Rowling had allowed Harry Potter to reach his full power as a wizard in Book 1, would fans have waited nine years and six more books to learn if he finally defeated you-know-who? But equally important is planting the seeds early on for who you want your character to become. From the start, readers saw Harry’s potential, and Rowling allowed greatness to surface in Harry when it was least expected. Those qualities grew along with Harry as the series unfolded.

You don’t want to give away everything at once in stand-alone books either. Picture books and easy readers, with their lower word counts and straightforward plots, do best with characters who have one or two surprises up their sleeve. In Peggy Parish’s classic easy reader Amelia Bedelia, the child sees that Amelia is doing a bad job on her first day as a housekeeper because she doesn’t understand the list her employer left her. But even before Amelia starts on the list, she whips up a lemon merengue pie. What the reader doesn’t know is that Amelia makes the best pies anywhere, which eventually saves her job at the end of the book.

Parceling out your protagonist’s strengths and weaknesses keeps the tension taut in a novel. In Gary Paulsen’s beloved Hatchet (ages 11-14), Brian, a city kid, is stranded in the Canadian wilderness after the his bush plane crashes, killing the pilot. Neither Brian nor the reader know if he’s got what it takes to survive on his own. Can he figure out how to start a fire? Yes, quite by accident. Can he fish? Eventually. Kill and cook a bird? How about survive a moose attack or weather a tornado? Brian evolves from reacting to his predicament and stumbling upon solutions to carefully taking control of his situation. But nothing Brian does is out of character. Though he must teach himself to live in the wild, he draws upon bits of information he learned from watching television or at school, and reserves of strength that were in him all along.

Even if you’re writing a single title, make your children’s book characters complex enough to live for several books, just in case. Fans loved Brian so much that Paulsen was persuaded to use the character in several other wilderness adventures. Picture book series (such as Mo Willem’s Pigeon books) or easy reader series like Amelia Bedelia generally grow because the protagonist’s quirks are open-ended and funny enough that readers don’t mind exploring them over and over in different circumstances.

The slow reveal works particularly well in mysteries. In this genre, the readers gradually get to know the victim (perhaps an honor student who is discovered to be running an Internet business selling test answers), and the villain (who may seem like a good guy at the beginning of the book). Or, how about a first person narrator in any genre who appears normal and likable early on, but becomes more unreliable as the story unfolds? Read Robert Cormier’s timeless young adult I Am the Cheese for a masterful example of a shifting first person reality. If you prefer a broader perspective, try Avi’s Nothing But the Truth: A Documentary Novel for ages 11-14, which looks at one incident from several viewpoints, gradually separating fact from fiction. So when you first breath life into your characters, don’t stop too soon. Add layers that can be exposed later on. These surprises will keep readers enthralled, whether you’re writing about a boy wizard, a demanding pigeon, or a ninja grandma.