Plan-Do-Check-Act: Keep the plan alive

First, thanks for sticking with your business planning journey.  I hope you have found the information useful so far.

Introduction

This is the final publication in this series and here we will discuss the business plan, how it is constructed, the additional information that needs to be attached and, how to keep the plan alive and therefore, a useful business tool for the future.

If you have been following these articles you will now have all the necessary elements to start to populate your business plan. These elements are: -

• Clearly defined personal and business goals

• A full list of your business skills and an action plan for improving or acquiring these skills

• Customer groups clearly defined

• A clear understanding of your competition, your strengths and weaknesses and an action plan in place to lever your strengths and minimise your weaknesses in the market place

• A full understanding of your USP

• A detailed, realistic sales plan

• A driven marketing plan

• A completed cash flow forecast

• An understanding of your key business processes

The business plan

If you have not already done so, you can download a free Business Plan template by clicking on this button

One of the core methodologies the we use at Results is the application of the Deming Plan-Do-Check-Act cycle. Briefly, this is about spending time planning an activity to maximise the chances of success.

PLAN – what you have to do and include all the preparation, research and planning activities

DO – carry out the plan

CHECK – the outcome against the plan and identify any gaps or problems

ACT – take action to improve the outcomes, updating the plan as you go

I propose that the P-D-C-A cycle is applied to your business planning activity. In fact, if you have been following this series of articles, you have been in the planning stage of writing your business plan.

PLAN

The contents of a business plan can vary. The Results Business Plan Template provides a robust framework that has been tried and tested and has been accepted by all the main high street banks.

The business plan content should include: -

• Executive summary – about you and an overview of your business plan

• Product/service description – a detailed description of the product or service that you intend to provide

• Market research details – a summary of the marketing you have carried out for your product/service and the potential market population

• Customer groups – clear definitions of your customer groups and the products/services to you intend to sell into those groups

• Your competition – the competition you have identified and their relative strengths and weaknesses

• Reasons for success – detail the reasons why your business will be successful, include your unique selling proposition as well

• Risks to your business – for each risk identified, detail the risk and what you have, or will have, in place to protect against that risk

• How will the business be managed – list the roles and responsibilities and include finance, sales, marketing and operations

• Sales plan – a brief summary of your planned sales

• Sales methods – how you intend to sell your product or service into your specified customer groups

• Sales methods – a brief overview of each sales method and how each will impact upon sales volumes overall

• How will the business be financed – describe how the business will be financed over time and includes set-up costs, working capital and future stock purchases

• Cash flow forecast – estimates of cash in the business over the first year and why you believe this is a realistic forecast

• Pricing policy – how are your prices arrived at, are they competitive and sustainable

• Your business and the law – list the laws applicable to your business and nay actions taken to comply

• Attachments – there should be a minimum of: cash flow forecast; sales plan; marketing plan and any additional details that you feel support and strengthen your business plan.

Do 

Having the plan in place is paramount at the start of any business venture. Once the business is trading and you have some experience of operating the business, the next thing is to check how things are going against that plan. As the old saying goes “a failure to plan is a plan to fail”.

Check

How is your business doing against your plan? Are you doing better than planned or worse?

Review all the key measures for your business cash flow, sales and costs.

Act

What actions need to be put in place to either redress the situation, or, take advantage and capitalise on a positive trend.

Summary

A Business Plan is a live document and should be reviewed to check that it remains relevant in all aspects. So make it a regular activity that you undertake at regular intervals.

If you have missed of the previous articles, please click on any or all of the following to access the article and a selection of free templates. For any other related articles including SWOT analysis and setting SMART objectives, please contact Results Consortium Ltd.

A business plan is key for business

Defining your personal and business goals

Understanding your in your business

Define your customer groups

Know your competition

Defining your USP

Establishing your sales plan

Establishing your marketing plan

Establishing your business costs

Definine your business processes

Graham Cripps

Results Consortium Ltd.

www.resultsresults.co.uk

Determine your business processes

When all the excitement has died down and your business is up and running, how are you going to ensure things stay that way?

Introduction

In this the ninth publication in the series of 10 on business planning we will now have a look at what you need to consider to ensure the business continues to run smoothly in the coming months and years. Even if you are a sole trader, you will need consistent processes that you use so that you do not have to think about what to do next in any usual circumstance.

Defining Your Business Processes

There will be three main areas that you will need to consider in terms of business processes. These are: -

• Your business and the law – the laws that apply to your business

• Financial records and reporting – keeping track of  the money

• Determine your business processes – all the things you do to find, service and keep customers

Any operation within your business needs a degree of stability. If you keep changing the way you do things, you could lose control of costs, find it difficult to keep up with the paperwork or even loose customers. A business process includes, but is not restricted to:

• Design (of products or services)

• Accounting and book keeping

• Sales invoicing

• Advertising

• Marketing

• Business planning

• Expenses

• Production and delivery of the product or service

• Risk assessment

• Technical operations

• Packaging and labelling

• Invoicing

• VAT

• Signing off the deal

• Dealing with customer feedback

As the business gains momentum you will need to be able to ensure that you can continue to deliver your products or services consistently. In the areas of quality, cost and on time delivery, having stable processes is one of the key factors of achieving this.

Example: the business employs another person part time. Having identified your business processes and having written them down will form the basis of any training that they require.

What actions do I need to take?

First select the business processes that you have established that works for you, your business and your customer. Write down what you do and, if possible, create forms etc. that can be used. Determine, who within the business (you may not have any employees, but you may have a friend who helps with IT or a book keeper). The written document should at least be dated so that you can track any changes that are made. These become your Standard Operating Procedures for the business.

What are they used for?

Standard Operating Procedures (SOP’s) record the important processes used within your business and is a record of what works well for the business, the customer and any other interested parties.

You may not do some things that often and remembering what you did last time can often be challenging, so having a written record is important.

They do not have to be complex, even a set of blank forms with notes on may be enough.

So, SOP’s can be useful for: -

• Training other members of staff

• Ensuring consistency of process and customer satisfaction

• Providing a record of what was done

• Providing valuable information for improving processes in the future

• Allowing the business owner to know that the customer will be satisfied with the outcomes, even when they are not involved directly

Example – Hairdresser, customer advice session

This has been put together by a mobile hairdresser. This is a simple check list that is a form of risk assessment.  

Having used a simple check list, this hairdresser will always check these specific points with any new client before he/she provides any services.

Graham Cripps

Results Consortium Ltd

www.resultsresults.co.uk

Establish all your business costs

Business costs are obvious aren’t they?                                                                       

Having spent some time thinking about you, your business plan, your customers and market place, I’d like to spend just a short time thinking about costs. No I’m not going to give you a list, but what I am going to do is give you the desire and know how to draw up your own.

Physical Costs

We can break these costs down under two specific headings, Fixed Costs and Variable Costs.

Fixed costs – are those costs that will remain the same for your planned level of sales and capacities. E.g. if you have planned to make and sell 4,000 cakes in year one at 80 per week, your fixed costs would increase if your orders became say 200 per week. You would need, perhaps, more mixing, baking, packing, storage and delivery capacity. This could mean another part time member of staff (see Fig. 1).

 FIG 1 - Fixed Costs

Variable Costs – these are the costs that vary with sales volume and other business related activities like travel, marketing and advertising. Costs are not necessarily proportionate to the level of business as they can become less per sales unit depending upon unit sales volumes in any given period. This is due to efficiencies in the supply chain that can be achieved as a result of increased volumes.     Fig 2 - Variable Costs

Adding it all up

Having determined all the costs of running the  business, we can now start to understand what our financial future begins to look like and take actions where it could potentially go into the red (trading at a loss where outgoings are greater than incomings).

So, in previous publications we have spoken about market research, your sales plan and your marketing plan. All of these require some monies to carry out the activity and we also need to understand at what level to set prices and volumes to ensure we have a financially viable business model.

Having a sales plan and established all the costs, we are now well placed to generate a cash flow forecast. This forecast is an estimate of the business outgoings and income over, typically, a 12 month period. This allows actions to be put into place before the business is in trouble.

So, what does a cash flow forecast contain?

This is an example of a cash flow forecast and contains the following: -.

Sales income – month by month sales forecast that can be more than one line

Other income - could be a loan or other form of cash injection

Outgoings – all of the expenses that the business has to allow for including rent, rates, power, marketing, materials, wages/drawings and income tax

Calculation fields – are needed to show totals for each area and then total cash available at the end of each month.

Initially, the figures used are those based on your best intelligence. However, as each month is closed, the figures used are actuals for that month. As your history builds, decisions can be made on the “actual” figures making the spread sheet more and more accurate over time.

Outgoings

The outgoings of the business fall into two main categories in terms of cash flow. These are the fixed and variable costs discussed above. The cash flow forecast will also need to include for tax and national insurnace contributions as well as any wages and/or drawings that will be take each month/week.

Results have a number of templates for the following: -

• Fixed costs

• Variable costs

• Personal survival budget

A personal survival budget is key for sole traders as this will define the minimum that the owner/operator will need to earn through the business to survive. This includes for all their personal bills and commitments.

For further information on this or any other article, contact Results via our web site www.resultsresults.co.uk .

Graham Cripps

Results Consortium Ltd

Establish your marketing plan

Introduction

In this, the seventh of ten publications on business planning, I will discuss marketing and how to approach constructing a Marketing Plan.

I have lost count of the number of times I am told “I already have a web site and a business card”, thinking that is all there is to marketing. Well, the statistics show that the more business you need, the greater your marketing effort needs to be, even if you are an established company.

 Methods of Marketing

The methods available to us all are immense. With the growing use of social media by the business community, there is also a growing use of the internet to research products and services, suppliers and even customer comments. So let’s take a look at some of the methods available.

Flyers – good for small very local businesses as a method of introduction. For: cheap to produce in volume, can get the message out there quite quickly, do require a computer to be able to read. Against: a lot will be discarded, needs several repeat drops, expensive in terms of time/cost to deliver, produces around 1% of sales after repeat deliveries (that is 1% of all the unique drops made).

Web site – a must for the majority of businesses these days.  Your web site is useful source for research about your business products or services. For: can give wide coverage for your business, can be cheaply established, can be self-administered, can be updated and expanded cost effectively. Against: needs to be search engine optimised (normally requires specialist intervention), too easy to let the content become stale, needs other interventions to get traffic (potential customers) to the site.

Social Media (Facebook, Twitter, Linked-in etc.) – the past 4 years has seen  massive increase in the use of social media by the business community. From tweets to blogs, from small to international brands, there are subjects within social media on a broad range of subjects, including Business Planning.

So what to do?

For me there is no one answer but I can say that social media can absorb a lot of business time to make it work effectively and that is its main problem. On the “for” side of the argument, social media can be viral in its impact, creating massive increases in business leads, 100 to 250% have been quoted publically.

Just one more thing, social media is not about selling, it’s more about establishing relationships by becoming a trusted contact. Visitors to your company facebook page (and web pages) will, in time, become potential leads and customers. It’s about creating reliable and valued content as well as establishing your businesses authority in  the subject matter in question.

E-mail Campaigns: - Use of e-mail to make potential customers aware of you and your company offerings. For – can be sent to a lot of companies very quickly, free apart from your time. Against – can be subject to spamming rules, difficult to get to the decision maker without purchasing a list of some description which can be costly, often filtered through internal fire walls.

Editorial (local and national newspapers, magazines etc.) – typically this will be supported through items of interest to local communities, business communities and interest groups. Typically through having run a series of adverts in that publication.

Local Radio: It is also possible to get publicity through local radio. Again, normally, items of interest to the local community. For – gets your name out there. Against – normally day time transmission so could miss your intended audience.

Other marketing activity

The few items mentioned above are just a few of the most commonly used. As you develop your business, you will need to increase your efforts and these are some of the activities you might like to consider using your web site or facebook: -

• Presentations

• Blog posts

• Reference guides

• Case studies

• Brochures

• Free trials, templates, guides and white papers

• Manuals

• Demonstrations

• Video casts

• Video of events, information

All of these need to be targeted at your customer groups and include content of interest to them.

The Marketing Plan

There are six things to consider before you commit to any marketing:

• How much money can be allocated for marketing (marketing budget)?

• How much time can you invest in marketing per day/week/month?

• What are my potential customers looking for?

• What methods will you use and how will they interact?

• What are the key messages I want to convey?

• How do I ensure consistency across all my efforts?

Having answered these questions, establish your strategy which will help ensure maximum impact across all of the media used. Then create the content for your communication.

Remember, keep your customer groups in mind, what is the service or product they are likely to be looking for and market your company as the one to provide for them and why.

The Marketing Plan Matrix is no more than a form of diary that details all of the actions that will be undertaken, when and by whom. The free template we offer has a few examples of activities you may consider as a thought provoker. If you want to learn more contact us via our website www.resultsresults.co.uk .

Graham Cripps

Results Consortium Ltd

Establish your sales plan

What is a Sales Plan and what can it do for my business?

Welcome to this article where I will be explaining the need for a Sales Plan, how to establish the plan and how it fits into your business plan.

The Sales Plan

A sales plan is a set of realistic targets that map directly into your financial planning and uses your market and customer research data to forecast your likely sales activity for the coming 12 months. In some cases this can also be estimated for the second or even third year.

The sales plan looks at what products or services you are planning to sell, line by line, and is the driver for your sales and marketing activity planning. In other words, if you plan to sell 10 items per week, what is the sales and marketing activity that will drive this activity to actually occur.

You can download a free sales plan template at the bottom of this article. This template is an Excel spread sheet that has calculations built into the sheet for adding up each month and a rolling cumulative figure to the end of the year.

Research will you need to do

OK, in my third article Define Your Customer Groups, I introduced you to the concept of looking at your customers and breaking them into groups. Each customer group will require different things from you and your products and services. So, in terms of your sales plan, consider which group will buy which product or service.

Then, you will need to research how many of these particular groups are in your area you intend to operate. A good source of data is the Census statistics available on your Local or County Council web site. If this does not give you the detail that you may require, you may need to consider some form of detailed market research to determine things like:

• Shopping area foot fall

• Buying habits of your customer groups

• Travel statistics

• Life style statistics

• Etc…………

Once you have a clear and data driven view of your potential market place, you can now think about your marketing and sales activity to:

• Let people know how to find you

• Let people know what you do

• Inform people of your Unique Selling Proposition

• Getting them to contact you

• Converting that lead into a customer

I cannot over stress the importance of market research. This data, along with knowing your competition, will give you good insight into your challenge in terms of reaching your customers and making sales in your chosen market.

How to construct a Sales Plan

If you have already downloaded your free Sales Plan template, this section will be easier to follow.

First, determine your realistic target sales quantities per customer group for each of your products or services. Then, for each month, add these together to estimate your likely sales value. Continue this activity for each of the following 11 months. This is your sales plan.

It is not real, it is not a guarantee of business, it is not cash in the bank. It is however, a list of targets for your business to achieve in order for your business to perform to your financial goals.

Beware, a sales plan is only of any use if it is realistic, backed up by effective sales and marketing activity plans and established as a live document (live in terms that this will be revisited on a monthly basis to see how you are doing against the plan and to be able to take the appropriate action).

Quantities may be numbers of units, hours employed, frequency of service etc. Whatever is a “sales unit” for your business’ products or services.

The purpose of a sales plan

The focus of any business must be sales. Sales provide the life blood of the business, cash, and the sales plan drives the business to:

• Understand the market place

• Understand the customer

• Understand the competition

• Have a key goal set for the business to achieve

• Take actions needed to improve the financial situation

• Review the success of all marketing and sales activities, campaigns etc.

Remember, like any other goal or objective use SMART objectives (Specific, Measureable, Achievable, Realistic, Time bound).

If you have not done so already, you can down load your free copy of the SMART Objectives article at the bottom of this page.

If you have missed any of the previous articles, you can access them now by using any of the following links:

• A Business Plan is Key for Small Business

• Define Your Business and Personal Goals

• Understand You in Your Business

• Define Your Customer Groups

• Know Your Competition

• Define Your Unique Selling Proposition

Graham Cripps

Results Consortium Ltd

www.resultsresults.co.uk

Business Plan - Define your unique selling Proposition                                                                                                                                                                          

Why should any perspective customer buy your product or service rather than your competitions?

This is a question we could ask ourselves. However, I would propose that you should consider the customers view. In other words, you need for the customer to be thinking “why buy from anyone else”.

In this article, the fifth in the business planning series of 10, I will propose a process for articulating what makes your product or service unique, different or just plain better value for money and how you communicate this to your market place.

If we consider the customer experience of dealing with your business we need to think wider than just the product or service its self. How did the customer find out about you, how easy was it for them to contact you, what was their buying experience, what is their ownership experience and after sales service like?      

OK, a lot to think about so let’s make a start at getting your unique selling proposition statement sorted. There are just 7 steps to consider: -

Research your competition

(see article “Know Your Competition”)

Knowing what your competition can and cannot do is one key ingredient for you to be able to articulate your uniqueness. In my previous article I discussed a process for doing just this.

It is not just about knowing who your competition is and what they do, it’s also important to understand their strengths and weaknesses as well as your own.

Write down what is different, special or unique about your product or service

This is not just about your product or service. You need to consider the whole process from initial contact to after sales service. How easy is it for the customer find out about you, how easy is it for them to contact you, what will their buying experience be, what will their ownership experience and after sales service be like?               

Define these points in terms of advantages for the prospective customer

For each of the above points consider “what’s in it for the customer”. What is the advantage to the customer and will they value that?

Write a brief statement

In no more than 30 words write a brief statement that that explains what you do including the points you have now articulated above. This statement should focus on what you do and what is unique about your business, products of service.

Sanity Check

For each “claim” you make, make sure that you have processes in place so that you can actually deliver.

Get feedback

Get feedback from those critical friends (you know, those friends or business colleague that are only too willing to tell you which way is up!). What do they interpret from your statement, does it engage them, and does it get them to ask more questions about your business offer?

Refine the statement and then publish

Having received the feedback, modify your statement and, after verifying the revised statement, it is now ready to publish.

Remember, this statement must tell your prospective customer enough to get their interest in you and your business and for them to want to know more.

Of course, your short statement is not the full story of your unique selling proposition (USP). Your USP is the whole service you provide from making contact to the after sales service and experience in every detail. So, you need to be able to use your short statement to engage the customer, this is the headline.

A word of advice, avoid using vague statements like “flexible service”, “no job too small”, “unbeatable prices”, unless you can be specific. Vague statements can be off-putting and appear rather cliché to prospective customers.

Still To Come

There are just a few more articles that will be published over the next two weeks: -

• Establishing Your Sales Plan

• Establishing Your Marketing Plan

• Establishing Your Business Costs

• Defining Your Business Processes

• Plan-do-Check-Act - Keep The Plan Alive.

With these articles are free templates for you to download and use towards your final business plan.

Graham Cripps

Results Consortium Ltd

www.resultsresesults.co.uk

Business Plan - Understand You in Your Business

Hi, and thanks for joining me on my business planning publications.

This is the second of 10 in this series and is aimed at anyone needing to write a business plan, perhaps for the first time.

How do you feel about the challenges you face each day. How many of those challenges do you feel equipped to deal with?

You might say, well I do understand me in my business, but do you really? I would suggest that there are often disconnects between you, your character and that of your business. This is quite common.

Business skills exist at two levels, technical and personal or behavioural (sometimes referred to as soft skills).

• Technical – these are all the skills required to run a business like industry specific skills (plumbing, welding, painting, printing etc.), IT skills, book keeping, HR and sales and marketing etc. 

• Behavioural – your values and beliefs, the things that tend to dictate your core behaviours.

Technical Skills

I would like you to take a moment to write down your skills and experience. Go for it, capture all of it from your first job to your last job, what have you been good at. Score yourself (6 is good and 1 is poor).

Now write down all of the skills needed to run your business. Again, think broadly, think about now and in the next 12 months.

For example, these skills might include: -

• Good communication skills

• Good with people

• Enjoy working on your own

• Good with paperwork and systems

• Good with figures and finance systems

• Broad understanding of sales and marketing techniques

• etc.

Now take this list, and score how important each skill is to the business (6 crucial and 1 is nice to have).

Now score how good you are at applying this skill, from your skills list (1 is poor and 6 is competent).

OK, if there is a mismatch, then you need to consider how you are going to acquire the skills (you can train or get someone else to help).

See the following example:

Now, be honest with yourself, how have you scored on the crucial skills, are they all 6’s? I’d be surprised if they were.

Behavioural Skills

Finally, referring to the “behavioural” values and beliefs, check if they are aligned to your business behaviours. What in your business will you always do, sometimes do or never do?

Example:

Also look to see if the business behaviours are a good fit with your own values and beliefs. If not what are you going to do to redress the situation?

In business, it is easy to get bogged down with every day challenges, but to be able to enjoy what you do and not experience unnecessary stress, make sure your business reflects what you can do every day with relative ease.

It is important to keep on top of your “things to do” so make sure you include a target completion date. You can download a free template by clicking the (Business Skills Review Template) button at the end of this blog.

The purpose of this activity is to ensure that whist you are striving to develop your business, you don’t forget your own personal development. You may not be able to do everything, that’s OK. If one of your weaker skills is say book keeping or finance, that’s OK. Get a book keeper involved with your business.

Most small businesses involve other skilled and experienced people as part of their team. Things like web site development, book keeping, marketing and IT are often supported by other team members outside of the day to day business.

This team approach is important. Think about who you have in your team, the business team may include: -

• Your bank manager

• Your landlord

• Your business network group

• Your book keeper/accountant

• Marketing specialist

• Printer

• Your suppliers

• Your family and friends

• Your customers

All of these can make a valuable contribution to your business.

Graham Cripps

Results Consortium Ltd

www.resultsresults.co.uk