Strategy Archives - BOLLYWOOD SURKHIYAN

Increase Business Revenue With an Innovation Strategy

Innovation provides many ways to increase revenue in your business. A properly managed innovation strategy can increase sales of products or services. An increase in sales can result from new products or services, as well as the introduction of new features for existing products or services.

Increased business revenue can result from:

New customers that are attracted to your innovative products or new product features. These new customers may also purchase other products and services from your company.
Existing customers who purchase your new products in addition to the products they previously purchased. This situation builds stronger customer relationships while expanding product sales.
Existing customers who begin purchasing more frequently due to the new product innovations. Your new product features may cause existing customers to consume more products, or buy more of your products as “replacements” for products previously purchased from a competitor.

Promote your business as an “innovator” and show the market how your products offer unique benefits. Look for new product features that have the potential to become the “must have” features in your market. Tell people why these new product features are so valuable – give examples. Establishing yourself as an innovator in your market builds your customer loyalty and produces valuable word-of-mouth advertising.

Let’s consider an example. In a particular market, certain individuals have not purchased a particular type of electronic device due to perceived problems or confusion with operating the device. However, when a version of the device with an innovative user interface is developed by a new company, these individuals purchase the product from the new company due to the ease of use. This new device with the new user interface performs the same basic function as other devices in the market, but the “must have” feature is the easy-to-use interface. In this example, the innovative product brings new customers into the market and increased revenue for that company.

When developing an Innovation Plan, be sure to consider opportunities to increase business revenue with both existing customers and new customers. Also, consider how innovative products (and product features) can attract new customers who have not previously purchased products in your market. Implementing new product features that satisfy unmet needs in the market is a great way to increase sales.

10 Strategy Tools For Smaller Businesses

I come from a background in large blue chip businesses, where I spent a fair amount of time helping predominantly large clients with strategic issues and during the last ten years I’ve started and built a couple of smaller businesses. SME owners and directors need to think about strategy, but they need to concentrate upon those elements that are going to produce the most impact – by all means read the business strategy tomes from cover to cover if you want, but this article aims to give you, a busy SME director, most of what you need to know about strategy and analysis in order to make a start.

1 – 3 Types of Excellence. Many commentators would agree that a company has the option to excel (that means really excel so that the market recognises that excellence) in one or two of three possible areas:

Operational excellence – which means doing things really efficiently and therefore probably being able to deal with higher volumes and therefore passing on cost savings to customers (although it is possible to think of examples where operational excellence was so valued by the customer that she would be prepared to pay a premium for it alone). An example might be EasyJet.

Customer intimacy – which means that you have systems and staff who treat customers as royalty (or at least good friends) and they feel loved and valued by your business. An example might be John Lewis.

Product leadership – which means that your product (or service) is highly differentiated from alternatives and substitutes in ways that customers value. An example might be Apple.

2 – Do a McKinsey. As a start-up or small business you may not be able to afford a McKinsey assignment to address your strategy issues, but you can apply one of their most powerful weapons to your advantage. MECE stands for “mutually exclusive, collectively exhaustive” – apply it to your problems and you could see great results. MECE is a useful model for analysing a business problem because it aids clear thinking by ensuring that categories of information do not overlap, and by reducing the possibility of overlooking information by requiring that all of the categories of information taken together should deal with all possible options. Information should be grouped into categories so that each category is separate and distinct without any overlap (mutually exclusive), and all of the categories taken together should deal with all possible options (collectively exhaustive). A “major issues list” should contain no less than two, and no more than five issues, with three being the ideal number. Let’s say that Acme Widgets Ltd use a MECE tree diagram to help them locate the source of declining profitability. The diagram as a whole represents the problem at hand; each branch stemming from the starting node of the tree represents a major issue that needs to be considered; each branch stemming from one of these major issues represents a sub-issue that needs to be considered; and so on. The problem to be addressed in this case is “how can Acme Widget Ltd increase widget sales?”.

You will hopefully find that analysing issues down to the constituent parts using this technique will clarify where the real issues lie and they will now be in more “bite sized chunks” and so be easier to handle.

3 – Markets & Industries. The expressions “What’s your market?” and “What industry are you in?” are thrown around pretty well interchangeably – what exactly do we mean when we say “market” and “industry”. If you use the definitions that I suggest then a great deal more clarity will start to appear around the potential strategy that you should adopt.

I suggest that market should mean – a group of people / organisations who have the desire & ability to buy products to satisfy a certain need or want ie buyers & their needs. Market therefore is not about your product or service (although of course related). I suggest that you spend a reasonable amount of time thinking about who the buyers of your products or services are / could be and what traits or characteristics they share. By being able to describe your market(s) accurately and precisely you will subsequently be able to focus your sales and marketing efforts far more effectively.

When thinking about markets (ie buyers) you should also consider:

* How attractive are your products and services to these buyers

* And how attractive is the market to you – is it clearly defined, growing, shrinking, are external influences going to affect its size in future, are they easy or difficult to persuade to buy, and so on.

I’d suggest that industry should mean – sellers that offer products or services that are similar or substitutes. Sellers sell into markets. So let’s say that you have founded a business offering disposable paper place mats for university canteens where businesses can advertise themselves to students. The classic Dragons Den question is “so what competitors do you have?”. Of course you would be wrong to say “none – we are the only people doing these advertising place-mats”. Rather you need to think about what industry you are in, and the answer is likely to be “the provision of advertising to target students” industry so your competitors would include – Facebook, local radio, advertising hoardings, Google Ads, free magazines etc. The key thing when defining your industry is similar or substitute offerings – you may think that you are unique but if your potential customers consider something else then that something else is in the same industry as you!

When thinking about industry (ie other sellers you should also consider:

* Can you sustain any advantage (indeed do you have any advantage?)

* How attractive is your industry (more on this below)

4 – Attractiveness of an Industry. Of course different industries have different levels of attractiveness and you should be aware of that right at the outset. But it isn’t necessarily the case that you should only operate in attractive industries and disregard unattractive industries. Good business can be created in “unattractive industries” and it is perfectly possible to fail within what would be viewed as an attractive industry. The analysis that you perform to establish that an industry is “attractive” can be carried out by the rest of the business world too, so others might stampede into the industry and change its attractiveness quite quickly. Industry analysis doesn’t ensure that you have picked a winner, it just means that you are well informed about your business environment.

The defining work on industry analysis was carried out by Professor Michael Porter of Harvard Business School and published in his 1979 book “Competitive Strategy” – Porter’s Five Forces.

Porter’s Five Forces

Competition: How strong is the rivalry posed by the present competition? The various factors, include: the number of firms in the industry, rate of market growth, economies of scale, customer switching costs, levels of product differentiation, diversity of competition, level of exit barriers.

Barriers to entry: What is the threat posed by new players entering the market? The various factors include: capital costs of setting up,highly specialised equipment, level of protection of necessary intellectual property, scale and branding of existing competitors, government regulations.

Substitutes: What is the threat posed by substitute products and services? The various factors include: the cost to customers of switching to a substitute, buyer propensity to substitute; relative price-performance of substitutes, product differentiation.

Supplier bargaining power: How much bargaining power do suppliers have? The various factors include: number of possible suppliers and the strength of competition between them, whether suppliers produce differentiated products, importance of sales volume to the supplier, cost to the buyer of changing suppliers, vertical integration of the supplier or threat to become vertically integrated (ie the degree to which a firm owns its upstream suppliers and its downstream buyers).

Customer bargaining power: How much bargaining power do customers have? Factors that will effect the bargaining power of a customer include: volume of goods or services purchased, number of other customers, brand name strength, product differentiation, availability of substitutes.

5 – Spider diagram. Understanding how your business compares to the competition and to customers perceptions of value is a really key element of strategy. A great way to form a better understanding is to establish the key important dimensions (by asking the people who matter, customers) and then representing them graphically using a “spider diagram” such as below. You can map how your business measures up and how the competition measure up and then it will be readily apparent where areas of competitive advantage / disadvantage lie.

6 – SWOT. Dear old SWOT (strengths, weaknesses, opportunities, threats) – it hardly needs any introduction

Strengths weaknesses opportunities threats

After a business clearly identifies an objective that it wants to achieve, SWOT analysis involves examining the strengths and weaknesses of the business (internal factors); and considering the opportunities presented and threats posed by business conditions, for example, the strength of the competition (external factors).

Don’t fall into the trap of SWOT becoming two lists – one of “pros” and the other of “cons” and make sure that you use it critically and with clear prioritisation. So for example, weak opportunities shouldn’t balance strong threats.

7 – The Sales Funnel. Strictly speaking this isn’t a pure strategy tool but a very powerful sales strategy analytical tool nonetheless.

If your problem is with generating interest and awareness, then look at your PR – where are your target market seeing you talking about what you do? Are you engaging with your target market? If your problem is with generating leads, then how well are you explaining how you meet your target market’s needs with your products or services? If your problem is with converting leads into serious buyers, how well are you encouraging your buyers to take action? How well are you demonstrating your credibility and expertise to solve their problems? If your problem is with closing the sale, what objections are you hearing from your potential buyers? How are you overcoming these objections?

8 – The 4 P’s. Again the purist might argue that this is marketing strategy rather than pure business strategy – but we don’t mind what you call it because it all helps to being a more successful business. There isn’t the space here to do justice to the 4 P’s of marketing but to skim the surface they are a framework for evaluating the marketing strategy for a product.

Price: the pricing strategy employed by a firm for a particular good or service will have a significant effect on profit.

Product: differentiation is a source of competitive advantage. Product differentiation creates value in the mind of the consumer.

Position / Place: the physical location of a good or service can be a source of competitive advantage.

Promotion: is used to enhance the perception of a good or service in the minds of customers. A promotion will draw peoples attention to any features of a product that they might find attractive.

9 – Strategic Advantage. Following on from his work which resulted in the “Five Forces”, Michael Porter suggested that businesses can adopt one of four generic business strategies, as represented in the diagram below.

Generic strategies

The differentiation and cost leadership strategies seek competitive advantage in a broad range of market or industry segments. By contrast, the differentiation focus and cost focus strategies are adopted in a narrow market or industry.

I will write about this more fully in a strategy for smaller businesses booklet soon to be published, but for now it might be best just to suggest some example companies that might fit into each quadrant:

Cost Leadership: Tesco

Differentiation: Mercedes Benz

Cost Focus: Instore

Differentiation focus: The Perfume Store

Generic Strategies Example Companies

10 – Product & Service Life Cycle. The product lifecycle curve was originally the brainchild of another great management thinker, Theodore Levitt and was first published in the Harvard Business Review in 1965. Again space here does not allow for a full description.

Product Life Cycle Curve

Introduction: As a new product much time will be spent by the organisation to create awareness of it’s presence amongst its target market. Profits are negative or low.

Growth: If consumer clearly feel that this product will benefit them in some ways and they accept it, the organisation will see a period of rapid sales growth.

Maturity: Rapid sales growth cannot last forever. Sales slow down as the product sales reach peak as it has been accepted by most buyers.

Decline: Sales and profits start to decline, the organisation may try to change their pricing strategy to stimulate growth, however the product will either have to be modified, or replaced within the market.

How to Develop a Powerful Marketing Strategy

Introduction

As you launch your new real estate business or wish to elevate it to the next level of success, it will be critical to have an efficient and cost effective marketing strategy. Having a great product, deal, or service will not bear any fruits of your labor if you are not reaching the proper audience. The following information will highlight many concepts and recommendations you may want to consider as part of your marketing plan. Because of the general nature of this material, all information may not apply to your specific business model.

Marketing and Advertising Concepts

Recommendations Go a Long Way

Perhaps one of the most powerful tools you can ever have in your marketing arsenal that you can’t buy for any price is to have people who have done business with you, or are familiar with your business ethics and professionalism to provide positive recommendations. You need to capitalize on all of the hard work and service you have provided in the past to instill confidence among your new relationships that you will continue to provide the same premier performance. We have all been exposed to testimonials and recommendations throughout many aspects of our life. Clearly, most people don’t need any further convincing beyond a sincere recommendation from someone not benefiting from the referral.

Use Referrals And Recommendations As A Marketing Tool

As you establish your history of past success stories, you should compile this information and share it with people you are trying to influence with regards to your ability to perform. An example of this could be a presentation folder that could include a summary of past projects as well as copies of any written letters of recommendations. In addition, you should have readily available a list of past clients that have given you permission to give out their contact information as a reference. You will have far more credibility if you provide this information in advance as part of your presentation material instead of your new potential client having to request this information; proactively providing this information will demonstrate your confidence in your services.

Know Where Your Leads Are Coming From

To have an effective marketing program, it will be critical for you to know what strategies are making the phone ring. When you fully understand what approaches are producing results, you can shift marketing efforts and capital away from the methods that are not producing the desired results and apply them to the methods that are successful. During your day to day activities when making inquiries on services and products you need, I’m sure you have been asked “Where did you see our ad” or “How did you hear about us”. This is their attempt to do their own marketing research on what is working for them.

There are a number of techniques you may want to consider that will help you to understand where your leads are coming from. Of course you can just come out and ask them. Alternatively, you could use the following methods:

– The use of different color stock on forms can help you establish what “color area” is responding.

– Have each different ad have a unique “offer number” and ask for his number during your conversations.

– Have a different response phone number for each ad or location.

Keeping Your Marketing Plan Going

There is one mistake that is common to new smaller businesses, once they get busy with the business that is coming from their marketing efforts, they become distracted and lose focus on keeping the marketing plan going. An example of this is getting wrapped up in a flip you are directly involved with that is taking away from your time to send out direct mail letters. Remember, with most of the common business models, once you’re done with the current deal, you need to get another one in the pipeline; otherwise, the flow of income may stop or be reduced. As another example, have you ever tried to get an estimate for a repair on your house? It seems they are all too busy on the job they are currently on to stop and work on new business.

Delegate Or Outsource Your Marketing Activities

As you are developing or expanding your business, the day to day challenges of running your business along with everything else going on in your life can stand in the way of you working your marketing plan. If you feel this is occurring and is affecting your potential business success, it may be to your advantage to either delegate or outsource some or all of your marketing activities. Using this technique will allow you to free up some time that could be used to work on items that will help you grow the company. Some examples of the marketing tasks that could be delegated or outsourced are highlighted below:

– Preparing and mailing marketing materials and direct mail letters

– Distribution of flyers

– E-mail support

– Covering phone calls

Keep in mind that before you let other people get involved with your marketing and speaking with potential clients and customers, make sure they have been adequately trained and the process has been documented in your company procedures (see “How to Write Your Business Plan” for information on the development of standard work modules).

Dealing with Rejection

As you develop your marketing strategy and “hitting the streets”, you should be prepared to face some level of rejection. The level of rejection you will experience will be determined based upon your approach, persistence, and what is the current situation and state of mind of the person you are dealing with. If for example your marketing model is focusing on homeowners in foreclosure, there will be a very high rate of rejection. In some cases they may be in denial regarding their current situation and also because they have been overwhelmed with the interest in their property from all of the investors who saw the Lis Pendens filed. You must recognize that this type of marketing is a numbers game and the more people you have an opportunity to make contact with, the higher the probability to secure business.

Even Rejection Can Make You Money

As you work through your targeted marketing area and encounter rejection, remember that each door closed in your face or phone call hang-up will get you closer to a completed transaction. If for example it takes 100 calls to close a deal worth $5,000 than each rejection is worth $50.00! Although difficult at first to imagine that rejection makes you money, it could help motivate you to move on to the next door slamming or phone-hang-up opportunity.

Your Marketing Should Have A Look

As part of your marketing efforts to “brand” your company, you may want to consider the use of logo’s, slogans, and trademarks in all of your ads and promotional merchandise. In addition, the use of “company colors” that is used exclusively in all of your marketing will also help to create a unique look that will help to set you apart from your competition.

Marketing and Advertising Techniques

The following section will provide you with some specific recommendations on marketing techniques you may want to consider. Since this information is generic in nature, all recommendations may not apply to your particular business model.

Due to the significant impact on operating budgets to fund marketing and advertising activities, you should be very critical on what methods become part of your Business Plan.

Buy A Ton Of Business Cards

One of the most inexpensive and effective ways for you to market yourself and your business is through the distribution of your business cards. During networking and casual meeting opportunities, the exchange of business cards will be a critical tool for you to assemble your contact list. Even if you are just starting out and don’t even have a company or services to offer, the small investment in business cards will allow others to have your contact information. At a minimum, the card should contain the following information:

– Your name

– Title or company name

– Fax number

– Phones number(s)

– E-mail address

– Websites

In addition, you can add information with regards to the specific business models you are involved with, for example:

– Foreclosures

– Short Sales

– Property Management

– Rehabs

Business Cards Design Suggestions

– Make your business cards stand out with bright colors or interesting artwork or graphics.

– Avoid the glossy type of paper because it is difficult to write on (in the event the person you are giving them to would like to make some comments on meeting you or your services).

– Use the back of the card as well to provide additional information on your business; why waste valuable marketing space?

– Have a powerful hook on the cards to include statements like:

– “We will close in 7 days”

– “We buy all houses in any condition”

– “We buy with all cash”

– “Get a $250 referral Fee”

Bandit Signs

Bandit signs are a great way to attract attention from people on foot or in vehicles. These signs are usually 2′ X 3′ or smaller and are designed to either stick in the ground or mounted to a pole. This method of advertising is very economical and when using the plastic version will allow for repeated use. It is suggested that you get them printed on both sides if you plan or placing them in areas where people will be coming from both directions.

Displaying Ads and Signs

Proper utilization of the various types of ads and signs will help support your efforts in establishing high visibility and presence in your targeted marketing area. The number of ways to display your company name, logo, and services you provide is limited only by your imagination. The following section will highlight the most common locations and methods you may want to consider for posting your ads:

– On billboards (very popular in rural and city areas)

– Sponsor or adopt a community bench, garden, or road clean-up.

– On buses

– On railroad cars and stations

– Local community and church newsletters

– Placemats in diners and restaurants (I always read these things while I’m waiting for my food)

– Place signs on your property while you are working on it and marketing it.

– Advertising lettering or magnetic signs for your vehicles.

When using lettering or magnetic signs for your vehicle make sure to check local ordinances; by placing a sign on your vehicle could make it be considered a commercial vehicle. Also when using magnetic signs, make sure they are secured properly. I have heard instances of these signs flying off during high speed travel and when exposed to rain. If you can also have a sign on your trunk, it will make it easy for people to read it as they follow behind you or at stop signs and traffic lights. Make sure to use large text size on your contact number.

Marketing Flyers

When designing flyers, it will be important for you to use bright colors to attract the eye. When placing them in stores, your flyer may be among dozens of other items that are posted so it must have some punch. To help minimize the chances of someone just taking the entire flyer, design it to have tear-off tabs at the bottom that contains minimal information on your services and a contact number.

Check Local Ordinances

When using signs and flyers as part of your marketing program, make sure you check with your local town regulations to ensure you are not in violation. Most towns have laws on the books that prohibit the display of signs and may come with substantial fines.

People Love Giveaways

Another marketing tool that will help you with your company exposure is to give out small gifts that promote your business and services. The possibilities are endless on the type of give-a-ways you can come up with and is limited only by your imagination and budget. The following list will provide some recommendations that are typically used for this purpose:

– Shirts and jackets

– Calendars

– Recipe cards

– Hats

– Letter openers

– Golf balls, tees, or towels

– Refrigerator magnets

– Stationary items (pens, pads, binders, etc.)

– Cups

– Totes and bags

When selecting the product give-a ways, you want to pick items that are designed to encourage use (nobody will wear an ugly tee shirt; it will be probably used as a rag). Avoid one time use products like candy, cookies, etc. Many companies offer these types of products at various price point budgets. Do a web search on “marketing merchandise” and you will get some great ideas. To reiterate, you may want to keep a consistent look to all of your marketing gifts.

Be An Exhibitor Or Sponsor

Another outstanding marketing method you may want to consider is to participate as an exhibitor or sponsor at conventions and investment organization meetings. These events can be very effective in reaching people that may benefit from your services. Sponsorship and exhibitor costs can range from a few hundred dollars to thousands depending on the venue and size of the organizations. With many organizations, you may have an opportunity to set up a display table as well as a speaking slot to highlight your services. One comment with regards to this marketing option is that people typically feel more comfortable doing business with you when they see you as a “regular” sponsor and not a one shot deal because it adds more credibility that you will be around. This type of marketing could be a significant drain on your allocated budget and it will be critical for you to determine if the appropriate level of business is being derived from this approach to justify the expense. By doing a web search for Investment Clubs and organizations you can select particular groups you would like to focus on.

Advertise In Hard Papers

Running ads in hard papers such as newspapers and trade magazines can be a great way for you to keep your company’s products and services in the eyes of the readers. Although this method of advertising can consume a majority or your marketing budget, it can represent a tremendous opportunity to reach a large mass of people. When considering using this advertising method, you may want to implement some of the following recommendations:

– Have a “hook” to your ad like “We will close with cash in 72 hours”.

– Advertise constantly

I’m sure you have observed ads that always seem to be displayed. This constant exposure although costly, will help to develop your company’s long term credibility.

– If your ad is listed in column form, consider adding a blank space above and below the text, this will make the ad stand out.

– If possible, use a contrasting or reverse color or text from the standard format.

Out of State Newspapers

Based upon the particular business model you are involved with, it may be necessary to either advertise or receive copies of out of state newspapers.

Using Public Records

Depending on your particular marketing areas or contact group, you may have good success accessing the public records that are available on-line. The information available will vary from state to state and also based on local township on-line capabilities.

The Use of Purchased Lists

An effective method to locate a particular group of people or businesses is to purchase a list from companies that specialize in generating and selling information about specific groups of people. An example of these types of lists includes the following:

– Recent graduates

– Recently relocated

– Recently sold their home

– Recently turned a milestone age (example:18,21,50,62,65)

– Recent Lis Pendens filings

The lists of possibilities are endless. Companies that generate and/or sell these lists are marketed by “List Brokers”. Try a Google search on this and you will see how big this information industry really is.

Be Prepared to Get Responses to Your Marketing Champaign

There is one area that many people fear when launching their marketing strategy and you need to get properly prepared for this and that is getting responses to your marketing efforts. The last thing you want to exhibit to people who are reaching out to you is your lack of confidence in being able to help them. In addition to having a strong foundation of knowledge in the particular business model you are marketing, you will need to develop a standard process on what you will do when they start calling you or responding to your calls. It is suggested that you put together a scripted dialog or bullet list that you will use when speaking with potential clients. The dialog or bullet list should be used as a guide as you are speaking with them to ensure you are gathering the appropriate data from them and presenting all of the critical highlights of why they should consider working with you.

Practice Makes Perfect

It will be absolutely critical to make sure you are projecting confidence when speaking to potential clients. I have spoken to many people who have left the leads hanging because of their fear in making contact with them; one way to mitigate this fear is by practicing and learning from your good and bad experiences. It is suggested that you conduct role playing to practice your approach. Another strategy that works well is to record your conversations and listen back to them. It will be critical to extract lessons learned from the calls and to apply these lessons to future calls. Keep in mind that the more you do this, the more effective and successful your “close rate” will be.

Don’t Touch That Mailbox

Keep in mind that you are prohibited from placing anything in a mailbox that does not have the appropriate postage. If you practice this technique, there is a very good chance you will be contacted by a representative from the postal service.

Creating Your Buyers and Clients List

Whether your real estate business model is wholesaling, rehabbing, selling notes, or any other model that requires you to rely on someone “taking your deal” will require you to understand the investment goals of your potential clients. To achieve the highest degree of project turn-over efficiency and to minimize your risk exposure, you will need to have investors and clients in a stand-by mode waiting for you to hand them your next investment opportunity they will consider. It will be very important that as you begin to launch your marketing and networking activities, you have a method to compile the investment criteria of your buyers or clients. It would be very efficient to have this information as part of a spreadsheet database. To help gather this information, you could create a form that can be filled out that will highlight the investment goals of your buyers or clients.

Having a comprehensive buyers list that includes the specific criteria of your buyer will help you to align available investment opportunities to the appropriate investors. In addition, understanding these criteria in advance will allow you to go out and seek new investments that you know will fit into the investment strategy of your buyers and clients that will be willing to pull the trigger if you bring them a good deal. The following list will provide examples of common criteria you would want from your investors (let’s assume for this example we are involved in the flipping business model)

– Specific locations

– Price point

– Age of property

– Class of property (A,B, C, D)

– Type of property (single-family, multi-family, commercial)

– Financial expectations

– Cash flow

– Cash on Cash returns

– Minimum percent of equity position

– Capitalization Rate

– Condition of property

– Creative Financing

Also keep in mind the relationship you develop from your Buyer’s List may also be a source for deals they bring to you. Perhaps a deal is too big or too small for a particular investor or they are too busy to get involved in another project at this time. The fact that you have presented them with investment opportunities in the past can set the stage for them to feed you a deal.

Qualify Your Buyer’s List

It will be critical for you to establish if the contacts on your Buyer’s List are able and willing to take deals that meet their investment criteria. The last thing you need when you are trying to wholesale a deal is to find out your buyer’s are just tire-kickers. One way to help avoid this situation is to get to know your buyer’s and become familiar with their past success. Through your networking and relationship building with these buyers’s, you should be able to feel them out with regards to their ability to pull the trigger.

I’m sure you’ve heard before, “If I find a great deal, I know the buyers will follow.” Although there is some logic to this statement, if you have buyer’s queued up in advance knowing their investment criteria, it will help to minimize your risk of not being able to close the deal; this can be a real concern when you are in a stale or decreasing market.

Your Extended Marketing Team

In addition to your planned direct marketing efforts, there could be past clients, family, friends or business associates that may provide additional sources of leads and business for you. This circle of contacts if properly utilized could be another informal arm of your comprehensive marketing plan. Although most people would normally pass along any services or products you provide to someone they know in need with no compensation; one sure way to motivate them to help bring in additional business is for you to offer a referral program. Depending upon the business model you are involved with, you could compensate them on a per deal basis. It is suggested that you provide these contacts with some of your marketing material.

Using Bird-Dogs To Augment Your Marketing

To bring the concept of an extended informal marketing team to the next level, you may want to enlist the help from people whose specialty is to locate deals for clients and present them for consideration. These people are called Bird-Dogs and they do this work as part of their business model. When using Bird-Dogs, it will be critical that they understand your criteria so they will not waste your time or theirs. Usually Bird-Dogs will only get compensated if a deal closes. A Bird-Dog fee is usually paid at closing.

Using Technology To Market More Efficiently

Have Your Own Website

Having a website can be a powerful tool to provide current and potential clients information on the products and services your company offers. The use of websites is so common that omitting it from your marketing campaign could certainly lead towards lost business. Remember, there is a very good chance that your competitors will have a website.

The subscription or development cost of your website can have a very large range depending upon the features. You should expect to pay $30-50 per month for a web design service provider that uses pre-designed templates you can edit. On the other extreme, you can pay thousands for a custom designed site.

When selecting a domain name, it is suggested that you use a name that reflects your business and is also easy to remember

Although having a website can be instrumental to the success of your business model, it will be useless unless you can attract visitors to your site to see what you offer. There are many strategies you can consider to help direct visitors to your site, some of techniques are listed below:

– Have a reference to your website on all of your printed material and e-mails you generate as well as marketing giveaways you hand out like coffee mugs or pens.

– Write on-line articles for websites like e-zine.com where you contribute articles for free in exchange for an opportunity to discuss your expertise as well as what you have to offer. In addition, you will be able to provide a link to your website.

– Have your website listed on other websites as a link, you can have an agreement with the website owner to mutually display links to each other.

– Pay to advertise on other sites that have the type of traffic you are trying to attract. Usually, there is a monthly fee for this service or in some cases will be a “Pay Per Click” where you will be charged a predetermined fee when anyone clicks on the link to your website.

– There are many options to consider when developing your website from do it yourself templates where you just fill in the blanks to a full blown custom site. It is suggested that you speak with an experienced website designer to see what option is best suited for your needs and budget.

Tele-Conferences

A very popular marketing method is to utilize teleconferences to highlight the services and products that you offer to a large audience by speaking with them via a phone line. This marketing technique will allow your company to provide another vehicle for your potential clients to get to know who you are. The process of setting up a teleconference is very easy; there are many third party providers that offer teleconference services for either a flat monthly rate or on an as-needed basis. Once set up, you just need to provide the attendees with a dial in number and access code (given to you by the service provider) and they will call in at the appropriate time.

Webinars

To bring the benefits of a teleconference to the next level, you can consider reaching out to your audience using a webinar. A webinar is an opportunity for you to provide a presentation to your audience by accessing a web site on their computer. Two-way communication is also possible using a dial in phone number. Like the teleconferencing, a webinar can be arranged by a third party. The cost of this service will be determined by how many “seats” are required.

E-Mail Blast

An e-mail blast can be a very effective way to contact a large group of people on your mailing list. Depending upon how many people you are trying to reach, you can either send the mail through your own mail service like Outlook or if a very large list of people need to be contacted, you may need to consider the services of a third party provider. As you compile your contact list, it is recommended that you create “groups” within your mail program. By using groups when sending e-mail, you can easily fill out the “to” field by selecting the appropriate group you are trying to make contact with. It is recommended that you sort your address book into categories that make sense for your business model. Examples are as follows:

– Bankers and private money lenders

– Past clients you are trying to stay in touch with

– New prospective clients you are trying to conduct business with

– Tenants occupying your properties

Mail Merge

Mail merge will allow you to take your contact information from your Outlook (or equivalent) address book and add these contacts to envelop and form letters you generate. Although mail merge can save you a considerable amount of time in preparing mailed letters, it is not encouraged when preparing envelops for initial contact letters. Computer generated envelops look too much like junk mail and not even be opened.

Newsletters

Newsletters are a great way to keep your contact list up to date on what is going on in your company and to help attract new business. All of the popular word processor programs have templates that you can use to generate your own custom newsletter. When considering the use of newsletters in your marketing campaign, you may want to implement some of the following recommendations:

– Make your newsletter releases monthly or quarterly; you want to periodically remind them who you are.

– Add both business development information as well as education and public interest sections. Don’t make every issue overflowing with sales hype. You will turn off your audience.

– Give each newsletter a release number or volume

– Format the pages so they can be added to a three ring binder

– Publish articles that continue in a future newsletter

– Add photos and charts to help illustrate text

– Have featured segments that are part of each newsletter release. The following are some examples:

– Rehab trick of the month

– Bloopers sent in from audience

– Deal of the month

– Success story of the month

Using An Internet Video Site

A very popular tool that can be added to your marketing plan is to utilize internet sites that allow you to download videos. On these sites, you can download your video that will be part of the site database of searchable videos. It is suggested that you add in your title a “hook” that specifically identifies the scope of the video so when someone searches the site for your topic, you may get a “hit”. An example of this would be “Learn Short Sales from John Doe.”

Sales Lead Software

As your marketing and networking strategies start to generate leads, it will become an increasing challenge to manage the large volume of leads effectively. Without managing leads appropriately, you run the risk of losing the ability to “convert” them to a deal or sale. Although there are many manual methods that you could use to manage your leads, you may want to consider purchasing lead generation and management software. There are a number of companies that provide this product. Perform an internet search for available products.

Marketing Strategy Plan: What’s Your Unique Selling Proposition?

Every business must have a marketing strategy plan. The success of every business, whether online or offline, depends on business planning. Experts have shown that strategic planning in marketing is the key to improving efficiency and effectiveness in business. Business owners are advised to always present unique selling propositions. Deep insights in marketing are necessary for reasonable propositions.

Unique Selling Proposition and Its Benefits

A unique selling proposition (USP) can best be described as a marketing idea that differentiates one businesses product or service from its competition by way of a benefit or way of doing business. Your USP will convince the potential buyer from doing business with you because your proposition is seen as much more valuable as compared to your competition. Here are three famous USP examples:

“You get fresh, hot pizza delivered to your door in 30 minutes or less – or it’s free.” Domino’s Pizza

“The ultimate driving machine” BMW

“The milk chocolate melts in your mouth, not in your hand” M&Ms

Furthermore, a USP helps greatly in product marketing strategy. Every seller must be able to identify the company’s unique selling proposition. You do not sell what you do not know. You will be able to provide answers to any question asked by the buyer and thus convince the buyer to buy even more.

How do you know your USP?

1. Consider yourself to be a buyer.

The USP must be unique indeed. It ought to be an addition to the benefits that are obtainable in your industry. The consumer market research should be critically conducted. This will reveal the needs of the consumers and it’s the tool that will be used to uncover the USP. Having understood the needs of the consumer, the solutions to the needs are then made unique in such a way that it is completely different from those of the competitors.

2. Determine customers’ motivating buying factor.

You can get to know this by a simple questionnaire or by short interviews of your customer. Most customers will provide genuine answers as per what gives them the drive to purchase your products. This is very essential.

3. Determine reasons why consumers prefer your products and services.

The best source of getting feedback is through your customers. They provide you with the information you need to know about the reasons why your services or products are distinct and preferred to others in your industry. Some of your customers will even suggest how you can improve your services.

Ensure that your selling propositions are convincing enough to persuade customers to use your products and services. Also ensure that you retain your customers while you increase your customer database.

Franchising Strategy: Strategic Business Plan Development

As with any business, you must have a solid business plan. Do not think that you can start a franchise without a good plan. The plan is a roadmap to how you will operate, how you will reach new franchisees, how you will market your business and must have solid financials. A mistake of a single percentage point on a franchise royalty can easily cost you millions of dollars. It does not seem like a big mistake, when you have a single franchisee. It simply means that the franchisor will make $5,000 less in royalty revenues. But in franchising, we are talking about continuing growth, and this mistake might be multiplied 100 times or more. Other business decisions that a new franchisor will make that could impact long-term profitability include:

• Advertising fees

• Technology fees

• Product margins

• Type of franchise offered (individual, area development, area representative, etc.)

• Organizational structure

• Compensation structure

• Geographic growth strategy

• Territorial rights provided to franchisees

• Reservations of rights for the franchisor

• Franchise Disclosure Documents

Conflicting or ambiguous communications when a franchise is first sold can form the basis for future franchise litigation. The cost of defending any franchise lawsuit, even an inconsequential one, can be enormous. The cost of prosecuting even a “small” franchise litigation lawsuit can easily exceed $100,000 to $200,000, or more.

You must have a solid, coherent Franchise Disclosure Document. An integrated Franchise Compliance Program that stipulates rules and expectations, manages Franchise Disclosure Documents and controls the publishing of all information is extremely important. It is also one of the best investments a franchise company will ever make.

Understanding a franchise agreement

A Franchise Agreement includes all of the key facets, requirements and principles of the franchise, including the privileges and commitments of both parties, the length of time the agreement will last, the territory (if any) granted to the franchisee, and the costs involved and how they are to be calculated.

A Franchise Agreement is the foundation of your business. You must be certain that you understand it clearly before you start to build on it. The following is an outline of some of the key aspects contained in Franchise Agreements.

Every Franchise Agreement needs to be carefully read and you should therefore have your attorney review the Agreement clause by clause with you, to make certain that you understand all of its terms. Franchisees also need to be aware that, while it can be relatively simple to enter into a Franchise Agreement, it may be far more difficult to remove yourself from one. A standard Franchise Agreement is a long-term commitment to a third party (often of six to ten years in length). The Agreement will include stringent requirements which have to be complied with for the full length of the term. Failure to conform to these requirements may in many situations allow the franchisor to terminate the Agreement.

While the strict stipulations of Franchise Agreements are there to protect the interests of all parties and particularly the franchise system, from time to time Franchise Agreements can include or exclude clauses which aim to protect the franchisor.

A provision that any costs involved in defending the use of the trademark should be paid by the franchisee

Immediate rights for the franchisor to cancel without notice if the franchisee misses or delays payment of royalties

Lack of clauses regarding ongoing support, training and development of the business by the franchisor

Limitation of the franchisor’s liability to the franchisee even if the franchisor breaches their requirements to the franchisee

Widely drafted clauses undermining a franchisee’s ‘exclusive’ territory in unwarranted circumstances.

The presence of these clauses will vary between Franchise Agreements. An experienced franchise lawyer will be able to highlight them for you. Some franchisors will not be willing to make any changes to their agreements especially when there are other franchisees already in operation.

Regardless of what you may dislike about some provisions in a Franchise Agreement, it is nevertheless essential that you understand it fully and the requirements it places on you as a franchisee. Careful attention should also be paid to supplementary documents, as these may contain provisions that, if breached, constitute a breach of the Franchise Agreement.

You should also be certain that any pre-contractual statements regarding turnover or other aspects of the business that may have attracted you to the franchise are carried over into the Franchise Agreement or in some other written form.

Grant of Rights

The Grant of Rights sets out the term of the franchise and its renewal provisions. It is important to make certain that the term of the franchise is adequate to allow you to achieve a realistic return on your investment. Renewal provisions need to be looked at carefully along with any renewal fees. They may contain some or all of the following:

Notice of renewal – this is usually required within strict timeframes. If the renewal notice is not given in time, the right to do so may be lost

Payment of renewal fee

Changes to terms of the Agreement by the franchisor upon renewal

Changes to the franchise territory size by the franchisor where the particular Agreement provides exclusive rights to the franchisee

Changes, alterations and improvements to operating practices to meet competitive and other challenges

First options or first rights of refusal for additional franchises.

It is important that the franchisee understands that, more often than not, the right of renewal may in fact be a right in favor of the franchisor. The franchisor often has the ability to reject the renewal if a franchisee has not been performing to set standards.

Ongoing costs and royalties

Many Franchise Agreements include ongoing payments to the franchisor such as:

• Royalties

• Advertising levies

• Mark-ups or margins on products supplied by the franchisors

• Training fees.

There may also be requirement to attend franchise conferences and other meetings. The Agreement should clearly set out the details of what has to be paid and when, including circumstances relating to any deposits payable before securing the franchise.

For advertising and promotion costs, the Agreement should specify when the payment is to be made and to whom, including details of any special banking arrangements. Back-up assistance and assistance are essential to the operation of a successful franchise. Details of the support and training to be provided by the franchisor should be stated in the Agreement, including both initial and ongoing assistance. As well as having your attorney review the Agreement for these provisions, talk to existing franchisees about the level of support they have received.

Initial costs

The Agreement, or often an ancillary document, should set out in full all beginning costs. These may include the initial franchise fee, equipment costs, working capital requirements, fit-out costs, initial training costs and the cost of opening stock.

Premises, leases and mobiles

Lease provisions usually allow the franchisor to take over the lease at the end of the term, and also if the franchisee defaults during the term

Often the franchisor will lease the property itself and grant a sub-lease to the franchisee. You are responsible for paying the rent, so you should ensure the amount negotiated is a fair market rent

Mobile franchises usually contain terms that set out the sign writing and other décor required by the vehicles from which the business is operated, and possibly for any major items of equipment

One issue that is often overlooked is the need to ensure that the length of the franchise term coincides with the length of the lease term.

Requirements

Every Agreement should contain clauses setting out the initial and continuing requirements of both franchisor and franchisee

• Examples of franchisee requirements include minimum operating hours, insurance, engagement of staff, and uniform requirements.

• Examples of franchisor’s requirements include maintaining the manuals, providing products, and training

• Records of accounting must be up-to-date, with regular reporting and auditing

• Intending franchisees should pay careful attention to the requirements since breach of any may entitle the franchisor to terminate the franchise.

Intellectual property

Intellectual property is a key element of most Franchise Agreements, specifying legal ownership rights by the franchisor concerning patents, copyright, trademarks, designs and even operating systems. Other relevant laws include the Fair Trading Act and common law rules prohibiting the copying of a business’s identity.

Sale of the franchise

Most Agreements will allow the franchise to be sold during its term, but you should note that as a franchisee your rights to sell the business may be restricted.

• The franchisee may have to give the franchisor the right to buy the business first known as right of first refusal, which in itself can destabilize the value of that business and the goodwill for a selling franchisee

• If the franchisor chooses not to purchase, they may rigorously control the sale process

• The incoming franchisee must be approved by the franchisor

There may be a transfer approval fee, which the franchisee will need to pay to the franchisor when a sale takes place. This is designed to cover the franchisor’s costs involved in training the incoming franchisee.

In some Franchise Agreements, the term of an existing franchise for sales purposes covers only its unexpired remainder, unless the Agreement provides for the franchisor to offer a new Agreement for a full new term.

Termination

Franchise Agreements provide for circumstances in which the Agreement may be terminated in advance of the original ending date. These include:

• Bankruptcy, company liquidation or criminal conviction of the franchisee

• Termination of leases to the franchise premises (where premises retention is important).

Termination provisions should be considered carefully as they are often points of disagreement. There are frequent misunderstandings by franchisees as to what happens at the end of a term and procedures vary from one franchise system to another. However, it should also be kept in mind that if the franchise is operating well and the franchise relationship is a good one, it is likely that both franchisee and franchisor will want to renew the Agreement.

Disputes

Although disagreements between franchisors and franchisees are usually solved through discussion and negotiation, mediation and arbitration are also effective methods for working out disputes and less damaging to franchise relationships than legal proceedings.

Other terms

The Entire Agreement clause is especially important as it usually states that what is contained in the Agreement overrides anything which may previously have been promised unless it is expressly referred to in the Agreement

As a franchisee, you should be certain that anything on which you have relied in selecting your franchise is included in the Agreement in some way

The Definitions section, usually close to the beginning of the Franchise Agreement, contains key definitions. One of the most important is Gross Sales, the figure on which the franchisor’s royalty is usually based. Usually this covers substantially every type of transaction carried out by the business and almost every payment received. Often it will include sales made, whether or not payment has actually been received.

Introduction to Strategy and Strategic Management

What is Strategy?

We hear the term strategy almost every day in some context or the other. Business leaders lay out their strategies for the years ahead and military generals speak of strategy to contain and conquer the enemy. Even as individuals, we often use the term strategy to describe a set of actions that we would take to control the future and arrive at outcomes that are beneficial to us. Hence, strategy is an integral part of our world and it can be defined as a general, un-detailed plan of action, encompassing a long period to arrive at a complicated goal. It is also defined as the set of actions to realize intent as a ploy, part of a plan. It follows from these definitions that strategy and strategizing involve drawing up plans to arrive at a predetermined goal.

What is Strategic Management?

We have defined strategy. Turning to strategic management, it can be said that the term refers to the management of strategy by having dedicated, detailed, and descriptive plans of actions that form the strategy. It is also the field in management thought that deals with planning, executing, controlling, and closing out the strategic moves.

If a firm has a strategy in place to realize its targeted revenues and profits, the management of the process by which it hopes to realize its goals falls under strategic management. An ongoing process evaluates different sets of strategies, assesses competitor moves, sets goals and targets, and actualizes the feedback loop to incorporate learning’s into its strategies. Indeed, it can be said that strategic management identifies the purpose of the firm and helps organize the plans and actions to actualize the purpose. By definition, it is a long-term process and it is the business function that is considered the repository of the firm’s future.

Strategy/Strategic Management and their place in the Firm

The previous sections have discussed how strategy and strategy management are integral to the success of the firm. In any organization, strategic management is a level of managerial activity that is below setting goals but above tactical planning. Strategic management in a firm is thus concerned with the future direction that the firm takes and hence, it is an important function of management.

Typically, the corporate planning function in any organization draws up the strategies and sometimes-outside help from management consultants is sought in this regard. In recent years, it has become the norm in the corporate world for the senior management to get actively involved in the formulation of strategy.

Hence, it can be said that strategic management is no longer the important function but has become the most important function. This has happened because of the uncertain and unpredictable world that we live which has resulted in organizations scrambling to devise ways and means of controlling future outcomes. In this regard alone, strategic management has become a valuable function without which no organization can hope to succeed in the turbulent marketplace.

How to Implement a Business Strategy in Your Organization

Ask any successful business owner and they will tell you their success was not based on luck. The success – and failure – of a business is dependent upon the strength of their business strategy. A successful strategic plan employs cost reduction, development, and sustainability techniques to ensure a bright future. You need to know your business inside and out in order to create a comprehensive and realistic plan.

Your strategy should help you achieve the objectives of your business. A business strategy is the driving force behind any organization, and takes the form of an official report. Businesses are self-sustainable systems, when you change one thing in the system; it has a positive or negative chain reaction. Like an organism, businesses learn how to adapt to the change if it is positive, and rectify the situation if it is negative.

Organizations have several phases of development, including creativity, direction, delegation, and consolidation. A company may start out with lenient rules and regulations, but as time progresses management adopts more efficient policies that hinder creative thinking. Companies mature and lose sight of their goals and mission statements, with more of an emphasis placed on individual projects or initiatives. As a business enters maturity processes, departments, and policies are refined to reunite the organization.

Ways to Conduct Business Strategy

Historically there are two ways to develop a business strategy, using the “bottom up” and “top down” models. The bottom up method is when employees generate ideas on the floor and the best results are passed onto management. The top down strategy is when business owners create the strategy and implement the changes without seeking employee feedback. Unfortunately, both models fail to include all of the employee feedback.

The new method of developing a business strategy uses a collaborative process, which is when managers and employees exchange information and work together to create a sustainable solution. It is a team-oriented process that bridges the gap that exists between managers and workers. Before you create a business strategy ensure you have the additional resources to carry out the task without interfering with normal operation. Assign tasks and delegate responsibilities while keeping to a defined chain of command.

Functional versus Operational Business Strategies

There are two types of business strategies: functional and operational. The functional strategy focuses on general ideas and a variety of tasks for different departments. The generality is a major disadvantage, however; areas of concentration include marketing, new product launches, human resources, financial assets, and legal issues. Functional strategies provide a nice overview of the business but do not tackle the important issues employees encounter day-to-day.

Operational strategies are ideal for businesses that want to reduce costs and streamline processes because it is much narrower in scope and requires accountability on all levels. The detail oriented plan encompasses everyone and everything, from the number of cashiers on duty to how much inventory is carried at a given time. A strategy is unique to each business and reflects the needs and requirements of the company’s management.

Implementing a Business Plan

A business plan is the textual version of a strategy, as it includes pertinent information regarding the company, including: vision and mission statements, measurable objectives supporting the vision, actionable tactics meeting the objective, resources, milestones and timeframes, accountability and role designations, as well as internal and external risks. The business strategy is not evergreen and should be evaluated routinely to ensure the company still has the competitive edge.

A business plan includes the primary and secondary objectives of your organization, an analysis of current policies and procedures, and the development of new policies or procedures to correct weaknesses within the organization. Before beginning a strategy, it is helpful to conduct a SWOT analysis, which helps identify weaknesses and loopholes within the organization. Your competition capitalizes on your weaknesses, thus it is essential to continuously evaluate your business.

Developing a Competitive Strategy

Brainstorming and collaboration are essential to the development of a successful business strategy. Begin the process by identifying the strengths and weaknesses of the organization. Without erasing responses, continue to identify current opportunities that help your business succeed. Finish the SWOT analysis by identifying threats or risks that place your business in danger. Identify how your company beats the competition, outlining the various strategies already in place.

Identify your current target audience and list potential audiences in the form of demographics. Assess current market conditions and how your company can defeat the competition. Reevaluate how you are reaching current and potential customers and consider your overall marketing plan. Think positively and develop solutions to overcome any weaknesses that you have discovered thus far. Admitting your weaknesses is the hardest part of drafting a business plan, as most companies want to appear strong and mighty. Research why you have these weaknesses and find realistic solutions to the problems.

Business owners often become so caught up with their work that they fail to concentrate on their business strategy, which is a significant source of cost reduction. Achieve your goals by dedicating time each month or week to address issues surrounding the operation of your business. Make the process a tradition, ensuring operations are aligned with current goals and future forecasts. Make your business stand out from the competition by utilizing different techniques to attract the most people.

A successful strategy overcomes organizational hurdles by understanding customer needs and predicting the unpredictable. The formation of a business strategy is a science that combines current circumstances with a variety of internal and external variables, addressing immediate and long-term goals of the organization. The implementation of the strategy is rolled out slowly, starting with management. The plan encompasses everyone; however, customers are indicative of the final result.

Strategy Lessons From Apollo 13

Here are three lessons from the Apollo 13 mission that you can use to improve your strategic plan.

If you’ve seen the movie Apollo 13, you might remember that early in the crisis, Gene Kranz, the flight director, gives assignments to his engineers. He cautions them to rely on data, telling everyone to “work the problem,” and not make things worse by guessing.

Throughout the crisis, the astronauts and the team in Houston study the data, perform calculations, conduct simulations, observe the results and then calculate again. They never guess when they don’t have to – they obsess over data to ensure they understand the whole problem and the entire range of possible solutions.

Creating a great business strategy requires the same obsessive attention to data. You have to base your solutions on statistically valid and comprehensive information about your company, your customers, your competitors and your industry.

Whenever you start a strategic planning process, every member of the planning team brings his own paradigms to the discussion. People make assumptions based on their experience, anecdotes and “corporate urban legends” that exist in every company.

Generally, we’ve found that 80% of these assumptions are relatively accurate, but the rest are not. That sounds like a good success ratio until you realize that if every executive is 20% wrong in her assumptions, then the team is seriously misaligned in their views of the current business situation.

There’s just no substitute for good data. It level-sets the team and equips them to make decisions with facts instead of hunches.

Another great lesson from Apollo 13 is how the engineers dove into the details to develop and implement solutions. One of my favorite examples is when they realize that they need a round air filter to fit into a square filter box. They don’t waste time discussing it theoretically – they simply gather up everything that they know is available to the astronauts in the spacecraft, and they build a prototype solution. They hand-write detailed instructions about how to use a sock and some duct tape to solve the problem. Then they radio the instructions to the astronauts who implement the solution.

This situation models the second characteristic of a great strategy – your plans must be detailed enough so that everyone knows exactly what to do. Getting very specific is challenging for a visionary executive team that’s used to operating in the stratosphere. Some strategic plans fail at implementation because the strategy team doesn’t agree on who will do what by when – and with which resources

The movie “Apollo 13” depicts one last extremely important strategy lesson. The flight director knows his team faces huge risks and that the outcome is uncertain, but he refuses to water down the goal. He doesn’t say, “Wouldn’t it be great if we could save the astronauts?” or, “Let’s try to save two out of three.” He says from the start that failure is not an option, and he deals with every situation assuming his team can overcome every obstacle. He won’t allow anyone to think otherwise.

At one point, a White House representative asks the head of the Apollo program what he should tell the president. The NASA chief gives a dismal assessment, saying, “This could be the worst disaster we’ve ever faced.”

Flight Director Kranz overhears the comment, faces the two men and says, “With all due respect, I believe this will be our finest hour.” Let me ask you: If the flight director didn’t send this strong message to his team, if he showed any signs of doubt, do you think his team might have believed just a little less that they could save the astronauts? Do you think the outcome could have been different?

A great strategy is bold, clear and uncompromising; it energizes your whole company around significant and vital goals. And remember, your people want to be on a winning team – your strategy must convey that you are serious about beating the competition.

So there you have it – three lessons from the Apollo 13 mission that will improve your strategic plan. Remember to base your strategy on data, develop detailed action plans, and set goals that build excitement and conviction across your company.

Thanks for reading this article. Good luck in planning your success – and succeeding because you plan.

Strategy Execution and Executability

When I ask audience members at my seminars and speeches “What is your biggest strategic planning problem right now?”, I inevitably hear the response “Implementation”. Without question, this is on of the biggest issues for any company trying to accomplish anything at a strategic level – execution seems to inevitably fall short of our stated intentions. As one CEO put it, “We say we will do something, and get excited about it, but a month later, it’s forgotten as we move on to the next thing”. This is perhaps true even when attempting to implement non-strategic objectives – but it’s far worse with the strategic ones. Why? Because nothing is more postponable than a strategic objective – until it’s too late to even think strategically. In addition, strategic objectives are much more likely to introduce powerful changes in your organization, and so they meet with far greater resistance than more operationally oriented objectives.

You can enhance your effectiveness at strategy implementation by the things you choose to do in your strategic planning process. There are three key areas where you can do this:

1. Implementation Planning,

2. Resource Allocation and

3. Implementation Monitoring.

The approach we take to these three areas is quite different from the norm in strategic planning, and it yields superior results. According to Robert Half Associates, most companies achieve about 30% of the objectives they set for themselves in a process like strategic planning. Using Simplified Strategic Planning, you should be able to achieve an average that is closer to 80%. It is the unusual way we handle the three key implementation management steps that makes the difference.

First, in implementation planning, it is important to set objectives well. This means using the SMART approach – objective must be specific, measurable, achievable, results stated in a timely way. In addition, you should make sure you set a reasonable number of objectives. We find many companies improve their execution effectiveness simply by limited the objectives they set in strategic planning. Secondly, you need to write a good, clear action plan that is useful for directing and tracking the implementation of your objectives. The approach illustrated in the Simplified Strategic Planning seminar and book is a robust way to assure this.

In resource allocation, we find that most organizations already pay a great deal of attention to the money required for effective implementation. This is the first resource you should look at. Money is important, but it is usually less important in strategy implementation that time. Ironically, few companies devote even half as much attention to time as they devote to money.

Finally, monitoring of strategy implementation is vital, even if it is sometimes difficult. This implies two important things. First, you must write your action plans to be monitorable – which means the steps should be stated as clear, finite actions which are clearly completed at some point, and also that each step needs a clearly stated start and completion date.

Assure that your team follows the recommendations in all three of these areas and you will find your execution will improve dramatically.

The Five Components of a Business Strategy

Can you define exactly what makes up a business strategy? Some people say no, but we think you can.

In fact, we believe a valid business strategy has five components:

Your company’s current or desired core competencies
A description of how you will differentiate vs. competitors
The industry or industries in which you intend to compete
The initiatives you plan to implement in the areas of marketing, operations, information technology, finance and organizational development
A financial forecast that shows how your plans will meet stakeholder requirements over the next 3 to 5 years

Let’s look at each of these components.

The first component of a valid business strategy is a clear description of your company’s current or desired core competencies.

You may be thinking, “Great, but what’s a ‘core competency?'” While there are many definitions, here’s a good one from Wikipedia:

“ACore competency is something that a firm can do well and that meets the following three conditions:

It provides consumer benefits
It is not easy for competitors to imitate
It can be leveraged widely to many products and markets.

A core competency can take various forms, including technical/subject matter know how, a reliable process, and/or close relationships with customers and suppliers. It may also include product development or culture, such as employee dedication.”

For example, we could say that Southwest Airlines is a reliable airline that offers low fares. But in order to provide those benefits, it has to have certain “core competencies,” important capabilities that enable it to have low fares and to be reliable. We believe that Southwest Airlines has four core competencies that it executes so well that it regularly beats all other US airlines in terms of profitability.

These core competencies are:

The lowest operating costs per plane
An economical point-to-point airport network
A fanatical culture focused on customer service and cost savings
An ability to keep planes in the air more of the time than its competitors.

Southwest airlines couldn’t offer the benefits of low prices and reliable service if it didn’t master these core competencies. What key benefits do you want to offer your customers? What core competencies do you need to master to provide them?

The second component of a valid business strategy is a description of how you differentiate vs. competitors.

In our experience, differentiation is about being the best at something. This should be encapsulated in your mission statement – what are your company’s aspirations and how are you going to beat the competition? We just talked about how Southwest Airlines differentiates — what are you going to offer customers that will make them choose your products or services so that you can grow your business?

It takes a lot of hard work to come up with a great answer to this question and even more work to make that differentiation real. It’s easy for us to say that Southwest is the best low-cost airline in the US, but it’s extraordinarily difficult for them to pull it off.

The third component of a valid business strategy is a description of the industry or industries in which you intend to compete.

You need to be able to define just what kind of company you are – are you a furniture manufacturer? A gift card retailer? A consulting firm, a bearings distributor, a toy importer, etc.? This step sounds easy but we find that companies are often so concerned about getting too narrow in their focus that they fail to become really clear about what they want to do. A company with a good business strategy will have thought through these issues and made the hard decisions necessary to clarify its identity. If it has, it can easily pass the litmus test of identifying the industry or industries in which it operates.

The fourth component of a business strategy is the set of initiatives you plan to implement in the areas of marketing, operations, information technology, finance and organizational development.

These are the plans that guide your company’s focus and resource allocation over the next several years. If your business strategy is specific enough to be relevant, you will have detailed plans in all of these areas.

The fifth component of a business strategy is a financial plan that forecasts the results you expect to get from your plans and illustrates how they will meet stakeholder requirements over the next 3 to 5 years.

Your strategic planning process cannot be separated from your annual budget process. In the vast majority of companies, if it’s not in the budget, it doesn’t exist. That’s why you have to have a very senior financial person on your strategic planning team, preferably the CFO. During the planning process, your team must compile a financial plan that estimates the results of implementing your strategy. This plan needs to earn the approval of your company’s management and board and should be reviewed on a regular basis to track results and make refinements.

So – those are the five components of a valid business strategy. Good luck planning your success. And succeeding because you plan.