By Martin Brill
LNP, Lancaster, Pa.
Lou Davenport, senior consultant for Kutztown University Small Business Development Center and SCORE of Lancaster, typically refers to creating a differentiating business plan as involving “ecstasy and agony.”
While I would argue it is more agony than ecstasy, the value of a good plan starts with its completion – and really never ends.
This means the plan in practice is continually worked and revised. It is therefore a process, not a product. Putting the plan on the shelf or leaving it on the hard drive defeats the real value.
Last week’s column centered on the value of a plan and a SWOT analysis (of strengths, weaknesses, opportunities and threats) to begin the process. A great way to start the business plan itself is to create a PowerPoint pitch.
The pitch is a 10- to 12-slide presentation that concentrates on key elements of the business, such as its objectives, competitors, value proposition (what makes the company’s products or services unique), target market, barriers to success and the most important financial metrics.
While it may be difficult to imagine boiling down your business essentials into 10 slides, this exercise helps the company frame its business plan and provides a great template for the “elevator speech” to customers, prospects, suppliers, new hires and banks.
We actually rehearse our clients in such presentations to sharpen their pitch and tailor it to a specific audience. It is amazing to see the improvement in quality in just a few sessions. In fact, one company received bank financing based on its pitch without having to complete a plan, contrary to conventional wisdom and our advice!
Finally we are ready to tackle the plan. There are online templates available from the Kutztown University business center (kutztownsbdc.org, under Online Learning) as well as from many commercial companies, such as Business Plan Pro (businessplanpro.com). The real value of the plan is in its customization, focusing on what will change in the projected plan.
Include in the plan:
1. Key Business Objectives: Three to four critical objectives in order of importance. Use quantifiable, measurable terms wherever possible.
2. Action Steps: Specific tactics to support each objective. These are most effective if a date of completion and an individual are linked to each step for accountability.
3. Competitive Analysis: Who your key competitors are, their strengths and weaknesses, compared to your company.
4. Market Analysis: Defining the market you serve, trends and opportunities. Many companies define their market as global, but we advise avoiding the blue-sky temptation. Focus on your immediate, scalable customers and prospects. E-commerce, social medial and website changes are new additions to the traditional plan.
5. Distribution: How the company will sell products, especially new items. Possible channels include the Internet, direct to customers, existing distributors, exports and sales to government.
6. Prospects: A listing of prospects in order of priority, when they will be contacted and by whom, is a powerful element of a plan, adding credibility to projections.
7. Management/Key Personnel: The changes that will be required to achieve the plan’s objectives, identifying gaps.
8. Barriers to Success: I add this element as a distinctive feature of a plan. Based on your honest assessment, what are the top three to four events that could frustrate this plan, and how can you mitigate them?
9. Financial Projections and Key Assumptions: Usually three years out.
10. Executive Summary: Write this last and keep it to a maximum of two pages, preferably one page.
If time permits, photos, a table of contents, a cover page and biographical sketches of key personnel add substance to the plan.
The key takeaway is that a plan should be flexible, customizable and applicable to a variety of situations.
Take the plunge, challenge yourself and grow your business. This is free enterprise at its best!
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Martin Brill is program manager, international trade, at the Kutztown University Small Business Development Center. It provides free business training and confidential one-on-one consulting to entrepreneurs, startups and established businesses in southcentral Pennsylvania.
