Business Plans and StrategyThe Good, the Bad and the Ugly

I always travel with my generic growth charts and strategy thought bubbles.

Who is this guy and why should I listen to him?

Why this matters?

Strategy, whether it's labeled as: deliberate, emergent, Blue Ocean,

competitive, or business, is currently an uncharted landscape. Sure, you have a

few big names like Porter, Martin and McKinsey leading the way but they play

in economies of scale and scope that most of us won't ever get to experience.

They talk about strategy from the perspective of the "firm" dealing with issues of

"allocative efficiency" and "market wide phenomena".

That's not you.

Why should you care?

Learning how to apply the concepts of strategy, using the right tools, and

creating the right actions will position your business to get the biggest return out

of your resources. It's about using all the "stuff" in your business to create as

much value and capture as much profit as possible. Today I’m going to share a

few of those tools. Cheesy obligatory ice breaker - Word Association: Business Plan

P.S. - The rest of the slides won’t be nearly as wordy. I promise.

Let’s get uncomfortable.

“No business plan survives first contact with customers.” - Steve Blank

The only reliable test is a real one.

You can’t plan away your uncertainty.

“What gets measured gets managed” - Peter Drucker

I want you to walk away with these:

By the end of our time my goal is to have you walk away with:

1. A better way to think about business plans.

2. Better identify and react to your

competitors.3. Commit to a strategic decision making

framework.

Business plans that aren’t awful.

Business Plan Framework:

● Your story.● Your market. ● Your actions. ● Your financials*

*1-2 year financials. Not a wish list with three different scenarios and IRRs. If you’re not a CPA no one will look at them and you will have successfully shaved years off your life from incurred stress.

Your story.

● Good stories surprise us. ● They have compelling characters.● They make us think. ● They make us feel. ● They stick in our minds and help

us remember ideas and people.

Most importantly they inspire people to take action.

Mission, Vision and Values

Specifically NOT spending lots of time here. ● Mission = 1 sentence: Who, what, where. ● Vision = 1 - 2 sentences: Why. ● Values = No more than 3: Because’s

You have 5ish minutes to organize your story.

Your market.

Know Your Market!● Market size, growth,

segments● Key purchase drivers

○ Quality, cost, service● Demographics● Competitors● Distribution channels● Average Profit Margins● Seasonality, regionality● Key marketing drivers

Data Sources● Internet

o Industryo Competitive

● Public company reports● Government websites

o census.govo bls.gov

● Trade publications● Be a customer!

Business Analysis

What is business analysis?● Getting clear in your

business.● Competitive Landscape

This isn’t your SCORE mentor’s exercise.

This doesn’t have to be you!

Market Realities and Company Lessons

Internal (Inside business)Strengths

● Why do your customers buy from you? Weaknesses

● Not an interview question so, no fluff! What are the parts of your business that can get more efficient or capabilities/capacities you can improve?

Market/Customer Trends

1.

Competitive Trends

1.

2.

External (Outside of business)

Opportunities

● Opportunities are new chances for your business to either continue to differentiate or to reinforce your competitive advantage.

Threats

● Threats are external factors that could negatively influence your business that you can’t control.

Positioning Your Company

Target: Who is your ideal client or customer? What does that avatar look like. Be specific.

Competitors: Who are your direct competitors? Everyone has competitors. Everyone.

Competitive Advantage: Think benefits only you can deliver.

Just a little more positioning

Your actions.

Feel like this yet?

Here’s what to do with all that information and all that analysis.

It’s time to start taking action!

Some ideas not strategy...yet.

Your plan is coming together. So far we’ve covered: ● Your story. ● Your market. ● Your competitive landscape.● Time to start strategically thinking.

Thinking strategically.

First let’s get clear on how you will compete. To outperform your competitors you can (from the Five Forces Model):● Develop a cost advantage or ● A differentiation advantage

You can look at an industry segment where the five forces are less severe.You can try to change the forces:● Is there anything you can influence to create an advantage for you.

From thinking to action (plan).

Set sales and earnings targets. These could be part of your goals or objectives for the business within a set time period. Short list - choose focus.

Describe how you’ll achieve them: ● What to be done?● By whom?● By when?● At what cost?

Key Business Drivers

This is the guts of your business plan. It’s how you will conquer your action plan and serve the market your story impassionately said you will. ● Marketing ● Operations● Management ● Financials

This is just the highlights. Everyone’s business will be a little different.

Marketing

Yes the “5 P’s” still matter and lenders want to see them. 1. Positioning - target, competitors, advantage2. Product/Service3. Pricing4. Place - distribution channels/geography5. Promotion

Operations

How will it all get done: 1. Listed salaries/job descriptions.2. Production, logistics, inventory and supply

management. 3. Quality control and customer service. 4. Where is business happening? 5. Billing and accounts receivable.

Management

How are you organized?1. Organization or

ownership structure.2. Current skill gaps or

needs. 3. Support services:

accounting, legal, etc.

Financials

No crazy projections! Focus on: 1. Cost and margin management

a. P/L or Income Statement

2. Cash managementa. Statement of Cash Flow

3. Tax planning4. Monthly reporting.

That’s a fine looking plan you have there.

You made it! Almost. You are now equipped to create a plan that bankers, stakeholders and future business partners will want to read. It’s one that can you adapt as your customer tastes and expectations change over time.

Now on to your strategy framework. Just one more slide.

Good Strategy - You’re all set up!

Good strategy is about making choices systematically. Here’s your system: 1. Identify challenge

a. Crystal clear outcomes

2. Measure it against your guiding policies. a. That’s all the stuff you worked out about your story

and what makes you unique

3. Take action and track results.

Closing

We laughed. We cried. It’s been an emotional rollercoaster. But you are walking away with:

1. A better way to think about business plans.

2. Better identify and react to your

competitors.3. Commit to a strategic decision making

framework.

Thank You!

You can find more of me at http://www.strategyschool.co

I’d love to share this presentation and more with you! Be sure to leave me with your business cards so I can share all my best tips, tricks and strategy tactics with you!