Creating a plan does not have to be difficult or complex. Depending on your product, service or market, it can be both complex and difficult, but by using this five-step process you can create an effective business plan easily. It is designed to be simple and suitable for most organizations. What are the five steps? Just a reminder, this plan should support what you created in Chapter One.

1. Vision/Mission
2. Resources
3. Skills
4. Incentive
5. Action planning

The first step, Vision, asks and answers a single question: What is my purpose for being in business? Wal-Mart’s vision is “to give ordinary people a chance to buy the same as rich people.” A vision for a restaurant might be “to serve fresh, healthy, home-cooked food.” I like to think of it as the way you want the community to see your business.

The vision statement is followed by a mission statement. The mission is designed to support the vision and describes how the vision will be implemented. Wal-Mart’s mission might be “to provide quality merchandise at low prices.” The restaurant’s mission might be “to support the community by buying all food products fresh from local farmers.” The vision defines the purpose, and the mission describes how the vision will be implemented.

The second step addresses resources. Without a vision and mission statement, it is harder to accomplish this step. The fundamental purpose of this step is to answer the question: What do I need in order to implement the vision and mission? This is designed to be very broad, and it can reach into all areas of the business. Some questions you might consider include: is there a new market for the existing products and services, is it necessary to change people, process, technology or trusted relationships, what new systems are required (or removed from production), is it necessary to purchase a new plant or acquire a new company, and what is the market?

These are important questions because without these answers, people become anxious. If you do not ask these questions, you will lack clarity in product and service offerings. For example, if I am selling windows, where do I sell them? Do I sell them through distributors or manufacturer representatives? Do I sell them through a direct sales organization? Do I sell someone else’s windows or manufacture my own? Do I sell them in a specific territory or is it more regional? Additional follow-up questions would include:

· Who are my customers? Are they homeowners with a yearly income of 50K/year? Are they homeowners whose homes are worth at least 500K? Are they homes that are 40 years old or older?

· If the window that I am selling can work in two different markets, do I need two different approaches?

· What are the pains I solve for my customers? Am I selling a product such as a window or am I selling security, comfort, appreciation in home value and protection of assets?

The most important question is why would someone buy windows from me? What differentiates me, or my products, from my competitors? Do I have the right product for my market? Am I selling a high-end product to a low-end market? Or am I selling a low-end product to a high-end market?

These are all questions that are addressed in the resource section of the business plan. Every question you ask must be related back to the vision and mission statements. If you cannot tell how a specific action or strategy supports the vision or mission, I would ask you to think about why you are doing it. This clarification process is used to define the resources you need to support your plan.

The third step is to answer the questions pertaining to the skills needed in the organization. You defined your purpose for being in business, described how you would implement the vision and documented the resources necessary to implement the vision. Now it is time to identify the skills necessary to implement your plan. If my market is selling windows, it would be useful to have home improvement experience. Otherwise, the management team sets the employees up for frustration. If I don’t know how to measure a window or know what energy-saving glass is or how it works, how can they be successful? Do you hire this resource or contract it out? What financial skills are necessary? For example, a different skill set is needed to run a mature company. A start-up requires a different set of skills.

If you are purchasing a company, experience in acquiring companies would be very useful. If you need capital, knowledge in raising money would be beneficial to the organization. This same approach applies in the plant, information technology, sales, marketing and front/back office applications.

The fourth step is managing change, or incentive to change. How do you create and implement incentive programs that motivate? If you remember the behavioral styles we discussed earlier, do you think all four behavioral styles use the same incentive system? If you have the wrong incentive systems in place, you run the risk of not motivating employees, and if change happens, it happens gradually.

The final step in the methodology is the action (implementation) plan. If the action plan, or implementation plan, is not defined and executed correctly, you will have a series of false starts. What are the benefits of this approach? In a word—discipline. You can implement measurable and repeatable business processes to allow the organization to institutionalize what works, but in order to do that, you have to know where you are going and how you are going to get there.

To your success

Ron Finklestein

Small Business Success Expert

330-990-0788

ron@akris.net