Create an effective Business Plan in 1 hour
The business landscape has changed dramatically since we entered lockdown.
The way we work will never be the same again.
The way we communicate has shifted.
As we emerge from lockdown you need to look at your business in a different but structured way, to ensure you move with the new times and capitalise on the opportunities that change brings.
The Business Plan you had BC (Before Coronavirus) may no longer be appropriate, so to help you review and realign, we've come up with five actions you can take to create a Business Plan in 1 hour.
But, before we get to that, a quick recap on…
Why it is important to have a Business Plan
Many businesses concentrate on the expertise they have in their product or service. However, the fact is that expertise alone will not deliver what is wanted on a consistent and sustainable basis.
As the business grows new employees join, many of whom it has not been possible for the leadership team to speak to for any length of time. This means that these employees are almost certainly interpreting the vision based on their perception of what you are looking for and their previous experiences.
The result is that standards and methods of delivery will vary and because:
Businesses don’t attract a sufficient number of qualified leads;
They fail to convert these leads into profitable customers; and
As they strive ever harder to find new customers, they let their current customers slip away to do business with their competitors.
So, having a ‘great’ product or service alone will not achieve success.
BUT a ‘quality’ product or service marketed and delivered in a consistent and superior way will guarantee your success.
Creating an Effective Business Plan in 1 hour
The answers from this exercise, which should be completed without talking to anyone, will enable you to begin to create an effective plan that will lead to a sustainable and profitable business.
Action Point One: Establishing The Objectives – (5 Minutes)
Put some hard facts against your strategic objective such as:
Put a specific number against the targeted revenues;
Put a specific number against your return on investment;
Ask yourself how many countries do you intend to operate in.
By carrying out this exercise you will create a framework to identify your requirements, such as:
The number of employees and their skills;
The number of business units you need;
The amount of capital required;
The marketing activity. Etc…
How radical you need to be
Before going further there are two questions about your strategy that need answering:
Which market are we addressing; and
– What makes us different?
Why does answering these questions matter?
The amount of time taken in chasing down potential customers who are never going to be profitable is a huge drain on the resources of the business.
One simple way of avoiding this is to concentrate on a smaller number of products/services that people actually want to buy from you.
By setting up your organisation to sell and support a specific market niche you are stating that you are the company that knows their needs and requirements.
Looking at your business, begin to ask yourself the following:
What’s the one unique thing you offer that makes your prospects think ‘Wow, I must have this product or service’?
Why do people do business with you?
If people aren’t doing business with you, why should they?
If your prospect can immediately see what it is you do that is so unique and they find it irresistible – you’ve created the perfect USP.
Action Point Two – Identifying your Market Niche and USP – (20 minutes)
Thinking about your business:
Name your top 3 competitors
Identify the top 3 reasons current customers return to buy from your company/firm/store/organisation
Think about 3 advantages in doing business with you as opposed to all other choices your leads/customers have.
Do your best to focus on the benefits that are exclusive to you – that your competitors don’t (or can’t) offer.
Next, look at the things that you both offer, but that they don’t capitalise on. If you’re the first to claim that you do those things, you “own” them. They may say that they do them too, but that only sets them up as copycats.
Using Profit Multipliers to Grow your Business
There is a limit to how much you can cut costs before quality and service is affected. Therefore, it makes sense to use no limit strategies… The Profit Multipliers work by increasing the average results of the key areas in any business:
There are 7 ways to grow a business:
Increasing just one of these will help your business to grow. BUT, by increasing ALL of these Multipliers by just a small margin will exponentially grow your bottom-line profits!
So, set out in your plan how this will be achieved.
Action Point three – Using the 7 Profit Multipliers – (10 minutes)
Identify the following:
The Number of leads your business gets in a month
Of these leads, how many are converted to customers
Calculate the average number of transactions each year made by each customer
And what is the average transaction value
What is the profit margin on these transactions?
And how many times a year do they buy from you.
Finally – how many years have they been a customer?
With the answers, think about growing each area that is relevant to your business by say 5% and calculate the affects on your profits – you will be amazed and you will immediately want to put in place action points to achieve these targets and more.
Create an Effective Organisation
Managing a business is more than just being your own boss. It demands the ability to make and communicate decisions and manage all aspects including employees and finances
Your employees and with your ability to manage them, effectively sets the foundation for and facilitates the success of your business.
Employees often have excellent ideas that can lead to new market areas, innovations to existing products and services or new product or services that can improve your overall competitiveness.
So, make them part of the planning. Keep them informed of and get their feedback regarding changes and then mould their expertise into an effective team with common objectives that everyone can understand and relate to their job.
Action point four – Look at your team – (10 minutes)
The table below will help you complete this task.
An Exit Strategy
Having an ‘exit strategy mindset’ compels the leadership team to create Policies, Plans and Procedures.
As your skills, planning, systems and methods improve, your work decreases and your results will increase.
This makes the business operate efficiently, effectively and profitably without you having to be there to run it.
Thus, the business then works on ‘autopilot’ and becomes ‘investor ready’ and therefore more profitable.
Many people try to sell a business that isn’t ‘finished’ and therefore only get a fraction of its worth. They are instead selling a job.
Of course, instead of exiting there may well be opportunities to acquire other businesses that have not thought through these issues.
This leads us on to the final Action Point.
Action Point Five – Create an outline of your plan – (15 Minutes)
Set out below is a list of headings. Simply jot down 3 bullet points that you want to cover under each heading:
History of the Business
Product or service description
Market description and analysis
You are now well on your way to creating an effective Business Plan.
Having completed this exercise test your theories on your management team, customers and friends and remember.
Businesses fail because they do not attract sufficient customers or make enough sales to existing ones
Marketing systems are the ultimate business leverage
Your customers must see you as being different – Positioning and your USP.
Your marketing activities must rise out of the ‘clutter’ pile to be effective.
Use the 7 Profit Multipliers to exponentially grow your business
Build an organisation that can deliver your plan
A Business Plan is only as good as you make it be. So, don’t just let your plan sit on a desk- Use it!
If you would like help developing or implementing your Business Plan, please do get in touch for an informal chat.