My husband is a traveling IT consultant and is a frequent flier on Southwest Airlines. Many times the flight attendants make flights more bearable with their sense of humor. Recently one told the passengers goodbye with the following: “Buckle up, drive fast, take chances, and come see us again real soon!” Although there may not be an obvious direct connection, this humorous farewell made me think about how so many business owners get caught up in the daily grind of work, or worse yet, the negative press regarding the economy.

It’s an easy trap to fall into. The demands of your everyday responsibilities grow little by little until, before you realize it, they consume every available minute of your time and all of your energy. You find yourself working ‘heads down’—focusing on trying to get everything done. Then, should you look up from these important but mundane tasks, you find yourself bombarded by the media with stories about how terrible the economy is and how hard everyone is struggling to just keep their jobs. At that point, many people, including many bright business owners, go into what I call ‘survivor mode.’ They put their heads back down and work even harder to just keep the business plodding along.

I doubt this describes the vision you had when you started your business. I’m sure when you decided to go into business, you saw yourself making plans and implementing them to make your business grow and become a source of satisfaction and affluence. But here you are now just trying to keep it afloat. Who has time for this type of strategic thinking?

It doesn’t have to be that way!

First, make a mental note to yourself that it’s the media’s job to sensationalize situations to get people to tune in. They are always going to play up the unusual and usually the downside, so don’t pay them too much attention. Remember that there have been companies that began, grew, and even thrived in even the worst economic periods this country has faced. Carvel Ice Cream Company, Farmers Insurance Group, Motorola, and United Van Lines were founded in 1928 just before the Great Depression, and they’re still with us today.

Second, step back a little and look at where your business is and where you want it to be. Here are just a few ideas to consider:

• Think through decisions but don’t stop making them–paralysis will kill a business faster than anything!
• Take some calculated risks to move things forward.
• Base decisions on facts, not the emotions brought on by the media.
• Focus on positive thoughts, read positive materials, and guard against negative influences.
• If your friends are negative, find new friends.

Austin is listed as the friendliest city in the country for small businesses. Make the decision that your business will survive and thrive in this year’s economic climate. Bolster your determination that next year will be your best year ever. Then take the time necessary to put together plans to make those goals a reality.

Get out of the way negative people, because Austin has a group of serious entrepreneurs ready to “buckle up, drive fast, take chances, and come see us again soon!”

I have been writing business plans for over twenty years and have perfected a business planning process that works for most businesses and business plan purposes. The result of that process is an eight section business plan. Here is the winning template for that business plan. You can adjust it for your business planning purposes and change the order of the sub-sections to meet your particular requirements. My business planning process is detailed in my business plan book which is a series of questions on a section by section basis, one section building on the next, until you complete the business plan.

1.0 Executive Summary

1. Company Information
2. Business Plan Purpose & Objectives
3. Company Goals & Vision
4. Company Mission Statement
5. Company Description
6. Company Purpose
7. Company Situation
8. Founders, Management & Principals Capabilities
9. Products & Services
10. The Competition
11. Keys to Success
12. Finance
13. Growth & Expansion Goals
14. Sales Forecast
15. Return on Equity / Return on Investment

2.0 Company Overview

1. Company Establishment
2. Company History
3. Company Structure
4. Company Ownership & Legal Formation
5. Facilities & Locations
6. Products & Services Overview
7. Trends Affecting the Company
8. Customers
9. Competitive Strategy
10. Company’s Strengths & Weaknesses
11. Company Performance
12. Company Finance
13. Company Assets

3.0 Management and Operations

1. Employees
2. Management Philosophy
3. Management Requirements
4. Management Gaps
5. Organizational Structure
6. Founders / Directors / Principals / Management / Key People
7. Management Administrative Procedures & Controls
8. Decision Making Teams & Processes
9. Company and Management Objectives, Goals and Strategy
10. Compensation Structure
11. Human Resources
12. Outsourcing
13. Consultants and Advisors
14. Products and Services Production and Delivery
15. Distribution System
16. Order Turn Around
17. Suppliers and Vendors
18. Service Standards
19. Customer Service Plan
20. Quality Control
21. Costs Minimization
22. Technology
23. Production and Operation Advantages
24. Capacity
25. Safety Procedures
26. Inventory
27. Environmental Considerations

4.0 Products and Services

1. Products and Services Description
2. Awards, Honors & Achievements
3. Case Studies
4. Product and Service Mix and Price Points
5. Life Cycle
6. Production Strategy
7. Research and Development Strategy
8. Space Utilization
9. Departments Descriptions
10. Future Products and Services
11. Effects of Technology
12. Computerization Requirements
13. Company Sales Literature and Brochures
14. Internet Strategies
15. Electronic Ordering and Fulfillment
16. Inventory Method and Management
17. Regulatory Compliance
18. Product and Service Liabilities

5.0 Marketing Plan

1. Industry Overview
2. Industry Distribution
3. Market Segments Description
4. Market Segment Needs
5. Market Segmentation Strategy
6. Market Trends
7. Market Growth
8. General Nature of the Competition
9. Customer Choice Factors
10. Product and Service Competitive Comparison
11. Competitive Analysis
12. Competitive Positioning
13. Competitive Edge
14. Marketing Strategy
15. Marketing Programs

6.0 Strategic and Sales Plan

1. Company Objectives
2. Potential Problems and Risks
3. Risk Analysis
4. Company Strategies, Strategic Tactics and Strategic Programs
5. Sales Strategy
6. Sales Programs
7. Strategic Alliances and Joint Ventures
8. Operating Budget
9. Sales Forecast
10. Milestones
11. Control Mechanisms

7.0 Financials

1. Sources and Uses of Funds
2. Financial Strategy
3. Capital Equipment Valuation
4. Company Collateral
5. Assumptions
6. Financials / Valuations / Financial Analysis / Budgets
7. Exit Strategy
8. Harvesting Value Strategy
9. Venture Risk
10. Effects of Investment and Finance on Cash Flow
11. Tax Strategies

8.0 Appendix

1. Resumes
2. Customer Testimonials / Recommendation Letters
3. Letters of Intent and Interest / Memorandums of Understanding
4. Reference Letters
5. Joint Venture and Strategic Alliance Agreements
6. Land Purchase Agreements
7. Product and Service Agreements
8. Other Agreements
9. Contracts, Leases and Pre-Sale Commitments
10. Patents, Trademarks, Service Marks, Copyrights and License Agreements
11. Brochures and Advertising Materials
12. Industry and Marketing Analysis and Studies
13. Market Research and Supporting Articles
14. Product Line Pictures, Renderings and Illustrations
15. Facilities and Equipment Pictures and Layouts
16. Maps and Photos of Business Locations
17. Construction Plans, Timelines and Disbursement Schedule
18. Engineering Studies
19. Company Registration and Charter
20. Company and Principals’ Credit Reports
21. Tax Returns
22. Quarterly and Annual Reports
23. Appraisals and Valuations
24. Feasibility Studies

About this Article Author

Frank Goley is a business consultant, business turnaround consultant, and business planner for ABC Business Consulting. Frank is an expert in writing, developing and implementing business plans, business turnaround plans, business funding plans, marketing plans, strategic plans and web marketing plans. Frank offers comprehensive business consulting, business coaching, business turnaround consulting, along with web seo, web development and web marketing consulting, to small and medium size companies.. Frank is author of the business plan book, The Comprehensive Business Plan Workbook – A Step by Step Guide to Effective Business Planning, and he has over 50 published articles on business success strategies. He also writes the Business Success Strategies Blog

A lack of accurate Cost Estimation and Analysis results in Profits of unknown sum and often Loss.  Some Companies who are profitable still fail.  Why?  Profits are not necessarily in the form of cash, such as Accounts Receivable, which may presently be uncollectable.  Focusing just on Net Income can be a mistake unless contingent variables are watched.  It is vital that a Company sets and monitors certain Benchmarks in its Strategic Planning from which performance can be measured and tracked.

Understanding Profit Relationships and Profit Components

Net Income (Profit) = Revenue (Income) minus Expenses (Costs)

Revenue comes in the form of Cash and Accounts Receivable.

There are Two Types of Expenses:  Fixed and Variable

Fixed Expenses:  incur periodically, regardless of operational effect and include items such as Rent, Insurance and Depreciation.

Variable Expenses:  Vary according to the level of Operations.  This includes items such as Product Labor and Material, Sales Promotion and Cost of Delivery.

Types of Profit Expressions:

Gross Income = Net Sales minus Cost of Goods Sold (COGS)

Operating Profit = Gross Margin

Net Income Before Tax

Net Income After Tax

All of the above expressions of Profitability indicate a certain relationship between Revenue and Expenses.  A decline in Profit Margin should be the catalyst to search for a cause, such as an increase in expenses; discounting or pricing errors caused a decline in per unit sales revenue; or a change in business operations.

Planning for Profits

Important Fundamentals:

Liquidity provides maximum flexibility.

Income Statement is viewed in relation to the Balance Sheet and the Cash Flow Statement.

Managed, under control Growth leads to Planned Growth.

A Short and Long Range Business Plan which has clearly unified relationships between Product Development, Market Planning, Strategic Planning and Financial Management.

Profit Planning Steps:

Step 1:  Profit Goal

A target value based on the realistic, developed results of your Company’s Strategic Plan.

Step 2:  Planned Sales Volume required to make the Profit Goal.

Utilize Operating and Sales Budget Forecasts

The Forecasts influence decisions on Materials Purchasing, Production Schedules, Financial Resource Acquisition, Plant and Equipment Procurement, Personnel Enumeration, along with Employment and Inventory Planning.

Forecasts derived from well developed, realistic determinations of Market Conditions, Market Trends, Industry Trends, Competitive Analysis, Competitive Edge, Market Segmentation, Promotion Strategies, Pricing Strategies, Distribution, Inflation and so forth.

Sales Volume Forecasts which are realizable and accurate come from the previously prescribed development relationships between:

Product Development

Market Planning

Strategic Planning

Picking arbitrary numbers for steps 1 and 2 will result in faulty Sales Forecasts, tainting the process from the beginning.

Step 3:  Expenses Estimation for the Planned Sales Volume

Be sure to use the previous years figures if you are an existing business. If you are a start up, it is smart to analyze similar type companies in your industry and use the published research to establish realistic estimated Expenses.

Adjust Expense Projections based on:

Change in Economic Conditions

Ratio of Expenses to Sales Level Change

Production Methods Improvements and Efficiencies

sensible salary levels

Materials to produce your goods

Labor to produce your products

Establish a Cost of Goods and equate it to the industry average for accuracy.

Figure in expenses which vary directly with changes in Volume.

Step 4:  Estimated Profit

Estimated / Projected Sales Income minus potential Expenses

Step 5:  Compare your Estimated Profit with your Profit Goal (step 1)

If there is a wide discrepancy between estimated profits and your profit goal, continue with the subsequent steps.

Step 6:  Determine Alternatives to Improve Profits

Change Planned Sales Income:

Increase Sales Promotion

Improve Product Quality

Improve Access to Product’s Availability

Alternative Product Uses

Analyze Unit Pricing Strategy to determine Best Pricing Policy for your defined Target Markets

Better Service

More Product dependableness

More Integrity in your Sales Process

Better Updating / Upgrading Strategy

Better After-Market Sales Strategy

Decrease Planned Expenses:

Better Control Systems for Product Development

Minimize Losses

Increased Productivity of People & Machines

Product Re-Design, Re-Branding, Re-Packaging

Product Improvements

Cost reducing Analysis and the resulting integrated strategy

Better Budgeting Control Mechanisms

Reduce Unit Costs:

Add other products in the mix to offset costs

Using idle capacity and assets innovatively

Make certain parts internally if more efficient than purchasing from Vendors

Kaizen Costing:  The advanced cost targeting in all the aspects of product development, design and production. Every company division and cost unit will set specific plans for cost reduction on a quarterly expectation basis.

Subcontract Certain Work and Outsource

Step 7:  Determine how Expenses vary with Sales Volume Changes

Experiment with Expense levels in selling fewer or more units with the information obtained in Step 3, understanding the relationship of Fixed and Variable Expenses to find the optimal mix of Products and the Unit Sales of those Products.

Beware:

Analyze Limited changes in Sales Volume as High Sales Volumes are costly and expend a lot of effort and Low Sales Volumes results in extra costs due to idle capacity, lack of volume discounts, underutilized highly trained and expensive labor force, and so on.

Changing conditions:  Economic shifts, Inflation, Deflation, Customer Shifts, Competitive Products, Market Shifts and other Factors causing changes in Unit Costs.

Step 8:  Understand how Profits vary with Sales Volume Changes

Use different Sales Volumes to determine the resulting Break Even Point and the Profitability Vector.

Step 9:  Analyze Profit Alternatives

Using the information generated in Steps 6, 7 and 8 consider profit increasing alternatives, such as:

Sales Price Changes

Change Advertising / Promotion Strategy

Reduce Variable Costs

Increase / Decrease Quality of Products

Find the right mix of Products

do away with Low-Margin Products

Bundle High Margin Spare Parts with New Equipment

Step 10:  Finalize the Strategic Plan and Implement

Measure the Strategic Plan’s execution over time to keep track of your Company’s resulting Pre-Tax Return on Equity and Pre-Tax Profit Margin.

Implement Tax Savings Strategies to keep more Earnings for future Opportunities and Expansion.

About this Article Author

Frank Goley is a business adviser, business turnaround consultant and business plan consultant for ABC Business Consulting. Frank is considered an expert in writing, developing and implementing business plans, business turnaround plans, business funding plans, marketing plans, strategic plans and web marketing plans. Frank offers comprehensive business consulting, business coaching, business turnaround consulting, along with web seo, web development and web marketing consulting, to small and medium size companies.. Frank is the author of a business plan book, The Comprehensive Business Plan Workbook – A Step by Step Guide to Effective Business Planning, and he has over 50 published articles on business success strategies. He also writes the Business Success Strategies Blog.

Marketing Positioning
Strategic marketing planning

Strategic marketing planning is key to having a successful business, whether it is a box store (storefront) or online.

The start of your strategic marketing planning should be a positioning statement.

Why not start by doing a little brainstorming on who your customer might be.

Your target market is your customer.

Marketing, of course, is the term used for finding and making potential customers mindful that you exist and compel those customers to purchase whatever your product is.

Your product, the promise of your product, who your client is, and why your product is different from other products is what defines your marketing position.

When all is said and done, your statement should be believable and truthful, it should define how your product is different, and should make the product stick in your customer’s mind.

A brief paragraph, no more than three statements, should be enough of a statement.

This positioning statement is used to develop marketing materials for your marketing positioning work.  The positioning statement is for your eyes only.

So, now, ask yourself who would benefit from your product, is there an emotion that your customer will relate to with your product, what exactly is your product, is your product in a particular category of the market, what does your customer need the product for, who is your competition, and what is unique about your product?

Now, take the answers and create your positioning statement.

Before you start reaching out to your customers, learn the difference between benefits & features.  For further inspiration, see this other article.  You can find it by clicking here > strategic marketing planning 

In short, features are what your product has, benefits are how the client relates to the product.

If your product is a car, how will your customer feel when he is driving it? 

To get ideas, just watch the ads on television, listen to the radio ads, and the internet ads from major companies have the most well developed ads online.

Appeal to your clients with ads and press releases devised from the answers from your positioning statement.