Strategicbusiness

Home Blog Map Help New Price List Buy+Use Privacy Contact
Financial
Projection
Software
Cashflow
Forecasting
Software
Business
Plan
Software
Marketing
Plan
Software
Strategic
Planning
Software
Business
Plan
Guide
Business
Planning
Freeware
Online
Planning
Tools
Business
Planning
Papers
Other
Items
Business
Planning
Papers
Business Ideas
Business
Strategies
Strategic Plan
Business Plans
Business Plan
Insights
Financial
Projections
Cashflow
Forecasts
Working Capital
Raising Finance
Other Items:
- Bad Advice
- Quotations
- Money, Money
Business Planning Papers:
Developing a Strategic Plan
Page Contents
Introduction to Strategic Planning1.
Key Steps towards a Strategic Plan2.
Use Hindsight when Strategic Planning3.
Effect not Equal to Cause when Planning Strategy4.
SWOTs - Keys to Business Strategies5.
Simple & Short Strategic Plans6.
Using the Strategic Planning Worksheet7.
Strategic Planning Worksheet8.
Introducing PlanWare9.
Copyright & Legal Stuff10.
Free Online Strategic
Planner
Free Online Strategic Planner for creating a 3-page
strategic plan based on the structure used in this white
paper. Use it to organize your thoughts, structure your
ideas and compile a short but comprehensive strategic plan
for any size and type of organization.
Recommendation: Review the paper on this page before
using the planner.
Useful Links
More Info
Develop strategic plan
Devise business
strategies
Write strategic plan
See planning surveys
Buy planning book
View sample plan
See Also
Get business ideas
Write business plan
Get planning insights
Prepare financial
projections
Seek planning advice
Plan to plan
Business plan guide
Software Tools
Financial Planners
Expert Business Planner
Strategy Planner
Idea Assessor
Marketing Planners
Free Planners
Buy Software
Financial Projections
Cashflow Forecasts
Business Plans
Marketing Plans
Strategic Plans
Strategic Plan Strategic Planning Business Strategy Strategic Planner Mission Statement Vision SWOTs Strategy Development
http://www.planware.org/strategicplan.htm (1 of 17) [30-05-2012 7:48:59 AM]
Search site !

Click here to see feedback from past users of this planning
tool (opens in a new window) and click here to see a
sample plan (use back button on browser to return to this
page).
1. Introduction to Strategic Planning
If you don't know where your business is going, any road will get you there.
What is a Strategic Plan?
Entrepreneurs and business managers are often so preoccupied with immediate
issues that they lose sight of their ultimate objectives. That's why a business
review or preparation of a strategic plan is a virtual necessity. This may not be
a recipe for success, but without it a business is much more likely to fail. A
sound plan should:
Serve as a framework for decisions or for securing support/approval.q
Provide a basis for more detailed planning.q
Explain the business to others in order to inform, motivate & involve.q
Assist benchmarking & performance monitoring.q
Stimulate change and become building block for next plan.q
For inspiration (and a few smiles), have a look at some of the quotations and
examples of bad advice included in other pages!
A strategic plan should not be confused with a business plan. The former is
likely to be a (very) short document whereas a business plan is usually a much
more substantial and detailed document. A strategic plan can provide the
foundation and frame work for a business plan. For more information about
business plans, refer to How to Write a Business Plan, Insights into Business
Planning and Free-Plan: Business Plan Guide & Template.
A strategic plan is not the same thing as an operational plan. The former
should be visionary, conceptual and directional in contrast to an operational
plan which is likely to be shorter term, tactical, focused, implementable and
measurable. As an example, compare the process of planning a vacation
(where, when, duration, budget, who goes, how travel are all strategic issues)
with the final preparations (tasks, deadlines, funding, weather, packing,
transport and so on are all operational matters).
A satisfactory strategic plan must be realistic and attainable so as to allow

managers and entrepreneurs to think strategically and act operationally - see
Devising Business Strategies for further insights.
Get Strategic Planning Help:
Free Online Strategic Planner for creating a 3-page strategic plan.
See Also: Expert tools for Assessing Business Ideas (US$ 229.95)
and Evaluating Marketing Strategies (US$ 795.00).
See a sample strategic plan - use the back button on your browser to return to
this page.
Need More Help with your Strategic Planning ? Have
a look at:
Plan Write Expert Business Planner: Combined
business plan tool and expert system to help
evaluate and develop your plan.
q
Quick Insight - Business Idea Assessor: Expert
system to help evaluate and improve a new
business idea.
q
Business Insight - Strategy Evaluator:
Sophisticated expert system for evaluating,
developing and comparing business and marketing
strategies.
q
Basic Approach to Strategic Planning
A critical review of past performance by the owners and management of a business and the preparation
of a plan beyond normal budgetary horizons require a certain attitude of mind and predisposition. Some
essential points which should to be observed during the review and planning process include the
following:
Relate to the medium term i.e. 2/4 yearss
Be undertaken by owners/directorss
Focus on matters of strategic importances
Be separated from day-to-day works
Be realistic, detached and criticals
Distinguish between cause and effects
Be reviewed periodicallys

Be written down.s
As the precursor to developing a strategic plan, it is desirable to clearly identify the current status,
objectives and strategies of an existing business or the latest thinking in respect of a new venture.
Correctly defined, these can be used as the basis for a critical examination to probe existing or
perceived Strengths, Weaknesses, Threats and Opportunities. This then leads to strategy
development covering the following issues discussed in more detail below:
Visionq
Missionq
Valuesq
Objectivesq
Strategiesq
Goalsq
Programsq
Top of Page
2. Key Steps towards a Strategic Plan
The preparation of a strategic plan is a multi-step process covering vision, mission, objectives, values,
strategies, goals and programs. These are discussed below.
The Vision
The first step is to develop a realistic Vision for the business. This should be presented as a
pen picture of the business in three or more years time in terms of its likely physical
appearance, size, activities, structure, scale offerings etc. Answer the question: "if someone
from Mars visited the business, what would they see (or sense)?" Consider its future
products, markets, customers, processes, location, staffing etc. Here is a great example of a
vision:
I will come to America, which is the country for me. Once there, I will become
the greatest bodybuilder in history.......... I will go into movies as an actor,
producer and eventually director. By the time I am 30 I will have starred in
first movie and I will be a millionaire...... I will collect houses, art and
automobiles. I will marry a glamorous and intelligent wife. By 32, I will have
been invited to the White House. Attributed to Arnold Schwarzenegger who
was elected Governor of the State of California in 2003.
The Mission
The nature of a business is often expressed in terms of its Mission which indicates in a

factual way the purpose and activities of the business in terms of operations, (unique)
characteristics, functions, customers, offerings, sectors/segments, scale/scope/penetration,
methodologies, technologies, resources etc. Just answer the questions as to what the
business really is and does in qualitative terms. If planning for a startup, base the mission
statement on the business as it would be once operational - be realistic and practical rather
than aspirational.
For example, "to design, develop, manufacture and market specific product lines for sale
on the basis of certain features to meet the identified needs of specified customer groups
via certain distribution channels in particular geographic areas". A statement along these
lines indicates what the business is about and is infinitely clearer than saying, for instance,
"we're in electronics" or worse still, "we are in business to make money" (assuming that the
business is not a mint !).
Also, some people confuse mission statements with value statements (see below) - the
former should be very hard-nosed while the latter can deal with 'softer' issues surrounding
the business. The following table contrasts hard and soft mission statements.
Hard Soft
What business is/does
Primary products/services
Key processes & technologies
Main customer groups
Primary markets/segments
Principal channels/outlets
Reason for existence
Competitive advantages
Unique/distinctive features
Important philosophical/social
issues
Image, quality, style, standards
Stakeholder concerns
Compare the following statements:
Hard Statement Soft Statement
X Corp. designs, develops, assembles
and markets systems for data base
management. These systems integrate
its proprietary operating system
software with hardware supplied by
major manufacturers, and are sold to
small, medium and large-sized
companies for a range of business
applications. Its systems are
distinguished by a sophisticated
operating system, which permits use
without trained data-processing
personnel.
Our mission is to enhance our
customers' business by providing the
very highest quality products and
services possible. Our customer support
strategy is based upon total,
no-compromise customer satisfaction
and we continually strive to offer a
complete package of up-to-date value
added solutions to meet our customers'
needs. We value above all our long term
customer relations.

Intel's original plan, written on the back of a menu (view copy), is an excellent example of
a hard statement:
The company will engage in research, development, and manufacture and
sales of integrated electronic structures to fulfill the needs of electronic
systems manufacturers. This will include thin films, thick films, semiconductor
devices, and ......... A variety of processes will be established, both at a
laboratory and production level ...... as well as the development and
manufacture of special processing and test equipment required to carry out
these processes. Products may include dioded transistors ....... Principal
customers for these products are expected to be the manufacturers of
advanced electronic systems ..... It is anticipated that many of these customers
will be located outside California.
If you'd prefer a soft statement, use the Dilbert Mission Statement Generator.
When drafting a mission statement, critically examine every noun, adjective and verb to
ensure that they are focused, realistic and justified.
The Values
The next element is to address the Values governing the operation of the business and its
conduct or relationships with society at large, customers, suppliers, employees, local
community and other stakeholders.
The Objectives
The third key element is to explicitly state the business's Objectives in terms of the results
it needs/wants to achieve in the medium/long term. Aside from presumably indicating a
necessity to achieve regular profits (expressed as return on shareholders' funds), objectives
should relate to the expectations and requirements of all the major stakeholders, including
employees, and should reflect the underlying reasons for running the business. These
objectives could cover growth, profitability, technology, offerings and markets.
The Strategies
Next are the Strategies - the rules and guidelines by which the mission, objectives etc. may
be achieved. They can cover the business as a whole including such matters as
diversification, organic growth, or acquisition plans, or they can relate to primary matters
in key functional areas, for example:
The company's internal cash flow will fund all future growth.r
New products will progressively replace existing ones over the next 3 years.r
All assembly work will be contracted out to lower the company's break-even
point.
r

Use SWOTs to help identify possible strategies by building on strengths, resolving
weaknesses, exploiting opportunities and avoiding threats.
For further discussion on strategies, refer to the paper on Devising Business Strategies as
well as these items below: Use Hindsight when Strategic Planning, Effect not Equal to
Cause when Planning Strategy and SWOTs - Keys to Business Strategies.
The Goals
Next come the Goals. These are specific interim or ultimate time-based measurements to
be achieved by implementing strategies in pursuit of the company's objectives, for
example, to achieve sales of $3m in three years time. Goals should be quantifiable,
consistent, realistic and achievable. They can relate to factors like market (sizes and
shares), products, finances, profitability, utilization, efficiency.
The Programs
The final elements are the Programs which set out the implementation plans for the key
strategies. These should cover resources, objectives, time-scales, deadlines, budgets and
performance targets.
It goes without saying that the mission, objectives, values, strategies and goals must be inter-linked and
consistent with each other. This is much easier said than done because many businesses which are set
up with the clear objective of making their owners wealthy often lack strategies, realistic goals or
concise missions.
Top of Page

3. Use Hindsight when Strategic Planning
Statements on vision, mission, objectives, values, strategies and goals are not just elements of future
planning. They also provide benchmarks for a historic review. Most managers will find it exceedingly
difficult to develop a future strategy for a business without knowing its current strategies and measuring
their success to date.
Assess Current Position
The starting point must be to determine a company's existing (implicit or explicit) vision, mission,
objectives and strategies. Then judge these against actual performance along the following lines:
Is the current vision being realized?q
How has the company's mission and objectives changed over the past say, three years? Why have
the changes occurred or why have no changes occurred? Identify primary reasons and categorize
them as either internal or external.
q
Describe the actual strategies followed over the past few years in respect of products/services,
operations, finance, marketing, technology, management etc.
q
Critically examine each strategy statement by reference to activities and actions in key functional
areas covering such matters as:
How has the company been managed?r
How has the company been funded?r
How has the company sought to increase sales and market share?r
How have productivity/costs moved?r
q
Take each element and quantify by reference to actual performance. Ask of each "why not"?, "why
only"?, or "why so"? and locate the reasons for differences between the actual and desired performance.
Drill Down
A useful technique for exploring performance shortfalls is to review the business's financial return and
to drill down through the components of this return to locate and assess the key determinants of
performance. For example, return on shareholders' funds is a key measure of profitability which can be
expressed as:
Net income
------------
Sales
X
Sales
-----------
Shareholders' funds
Take each item in this formula, explore its contents and derive performance measures or ratios. For
example:

Sales break down into sales values, units, prices, discounts, commissions, bad debts and so on.
Net income is derived by deducting costs (materials, labor, power etc.), expenses, interest and
depreciation from sales revenue.
Shareholders' funds are based on the value of fixed assets, current assets, current liabilities, debt
etc.
Use of cascading ratios is illustrated in this
DuPont-type profitability chart (click thumb opposite) which is automatically generated by more
powerful versions of Exl-Plan to show the impact of specific changes in key variables and
assumptions on overall profitability.
Subject the resultant ratios to critical examination and attempt to compare them with industry norms.
The paper entitled Managing Working Capital explains key working capital ratios.
Note that the Exl-Plan financial planners generate extensive ratios based on projected P&Ls, cashflow
forecasts and balance sheets for 1-3-5-7 years ahead.
Top of Page
4. Effect not Equal to Cause when Planning
Strategy
When reviewing a business it is essential to cut through the symptoms of problems and reach the
underlying causes. Questions which can assist in revealing the real causes include the following:
"What stopped the business from?"q
"What caused the cause of?"q
"Why didn't the business achieve a 25% return?"q
By way of an example consider why this company may be unable to increase its market share:
Because it cannot penetrate major customers because its product range is too narrow
because the company doesn't have the capability to produce additional products because
of shortcomings in R & D because of a lack of expertise and resource because R & D is not
an immediate priority because of a lack of profits because of a high interest burden
because the company is over-reliant on borrowings because the shareholders won't/can't
raise additional permanent capital.

The moral in this case is that there are no major customers due to under-capitalization !
Also have a look at the discussion on causes of business failure in Devising Business Strategies.
Top of Page
5. SWOTs - Keys to Business Strategies
Having built up a picture of the company's past aims and achievements, the all-important SWOT
(strengths, weaknesses, opportunities and threats) analysis can commence.
Strengths & Weaknesses
Strengths and weaknesses are essentially internal to the organization and relate to matters concerning
resources, programs and organization in key areas. These include:
Sales - marketing - distribution - promotion - support;q
Management - systems - expertise - resources;q
Operations - efficiency - capacity - processes;q
Products - services - quality - pricing - features - range -
competitiveness;
q
Finances - resources - performance;q
R&D - effort - direction - resources;q
Costs - productivity - purchasing;q
Systems - organization - structures.q
If a startup is being planned, the strengths and weaknesses are related mainly to the promoter(s) - their
experience, expertise and management abilities - rather than to the project.
Take a moment to complete or view the results of this survey.
Survey about Strengths & Weaknesses of
Businesses
The objective is to build up a picture of the outstanding good and bad points, achievements and failures
and other critical features within the company.
Threats & Opportunities
The external threats and opportunities confronting a company, can exist or develop in the following
areas:

The company's own industry where structural changes may be occurring
(Size and segmentation; growth patterns and maturity; established patterns and relationships,
emergence/contraction of niches; international dimensions; relative attractiveness of segments)
q
The marketplace which may be altering due to economic or social factors (Customers;
distribution channels; economic factors, social/demographic issues; political & environmental
factors)
q
Competition which may be creating new threats or opportunities
(Identities, performances, market shares, likely plans, aggressiveness, strengths & weaknesses)
q
New technologies which may be causing fundamental changes in products, processes, etc.
(Substitute products, alternative solutions, shifting channels, cost savings etc.)
q
Against an uncertain and shifting background, the objective must be to identify and prioritize the key
SWOTs in a one-handed manner (Don't say "on the one hand ...........but on the other hand.........").
Develop Business Strategies
Once the SWOT review is complete, the future strategy may be readily apparent or, as is more likely the
case, a series of strategies or combinations of tactics will suggest themselves. Use the SWOTs to help
identify possible strategies as follows:
Build on strengthss
Resolve weaknessess
Exploit opportunitiess
Avoid threatss
The resulting strategies can then be filtered and moulded to form the basis of a realistic strategic plan -
see also Devising Business Strategies for further insights into the development of strategies.
Need More Help with your Strategic Planning ? Have a look at:
Plan Write Expert Business Planner: Combined business plan tool and
expert system to help evaluate and develop your plan.
q
Quick Insight - Business Idea Assessor: Expert system to help evaluate
and improve a new business idea.
q
Business Insight - Strategy Evaluator: Sophisticated expert system for
evaluating, developing and comparing business and marketing
strategies.
q
Top of Page

6. Simple & Short Strategic Plans
Notwithstanding that "battles are often lost for want of nails", a company rarely succeeds or fails for
minor or trivial reasons. The causes are usually substantial and are often self-evident, at least to an
outsider. For example, the business was completely over-borrowed; management was weak; a major
new product opportunity was identified; legislation changed; a major competitor went bust or expanded;
the company never reinvested.
It should be possible in the course of a few pages to set down the main elements of a business's vision,
mission, values, objectives, goals, strategies, SWOTs etc. The compilation of a short report along these
lines is likely to prove much more difficult than a lengthy dissertation which mixes up details and
principles, and confuses the broad picture. See a sample strategic plan - use the back button on your
browser to return to this page.
Independent advisers or non-executive directors can play a valuable role in this process because they
can readily adopt the role of devil's advocate and also bring external knowledge and expertise to bear.
The worksheet presented below may also assist.
For further information on business planning issues, refer to other papers in this series which cover
business ideas, business strategies, financial planning, cashflow forecasting and business planning.
Free Tools from PlanWare
Business financial planner for high-level, integrated 2-year
projections using Excel - details and download links for
Exl-Plan Free.
q
Excel-based, comprehensive, rolling 6-month cash flow
planner - details and download links for Cashflow Plan Free.
q
Business plan template & guidelines (Word format) - details &
download link for Free-Plan.
q
Online strategic planner for creating a 3-page strategic plan -
details and sample plan.
q
More free tools here.q

Need More Assistance? Have a look at:
Exl-Plan Multi-year Financial Projections (with
Excel)
Cashflow Plan Short-term Cashflow Forecasts (with
Excel)
Plan Write Comprehensive Business Planner
Plan Write Marketing Planner
Plan Write Expert Business Planner
Quick Insight Business Idea Assessor
Business Insight Business Strategy Evaluator
Top of Page
7. Using the Strategic Planning Worksheet
When using the Strategic Planning Worksheet below, note the following suggestions:
Relate the planning exercise to a specific company or, if diversified, to individual strategic
business units.
1.
Ideally the worksheet should be compiled by a multi-discipline management group, or separately
by 2/3 groups and then discussed in plenary session if a large business unit is involved.
2.
If working on your own, complete the worksheet and then return to it a few times over the
following few days and critically review what you wrote - why, why, why etc. and ask yourself
whether you have seen the "wood for trees".
3.
A completed worksheet should be edited down into a 1-2 page document and reviewed by the
group(s). The final form of the document need not follow the worksheet's layout provided all the
matters are covered.
4.
All ideas, issues etc. should be internally consistent and realistic.5.
You need a very good understanding of the market, competitors etc. in order to make a clear
assessment of your SWOTs. If you haven't got this insight, suspend work on your strategic plan
until you have done this basic research.
6.
Allow enough time as you may find it much more difficult to write a short plan than a long one
!!!!
7.
Top of Page

8. Strategic Planning Worksheet
To start using the worksheet below, copy the headings marked in red onto a blank sheet of paper (or
page in a word processor) and enter short statements about each item as per the guidelines above.
Note: This worksheet is available as a free Online Strategic
Planner. See sample strategic plan - you may wish to print it for
reference purposes. (Use the back button on your browser to
return to this page.)
Contents of the Strategic Plan
1. Assess the business's EXISTING strengths, weaknesses, threats and opportunities:
(Strengths & Weaknesses are internal to the business and Opportunities & Threats are
external. All SWOTs should be 'one-handed' - something is either a Strength or a
Weakness but cannot be both. Enter up to six items under each heading and then rank them
in order of importance. If you are planning a new business, consider the project's and its
promoters' existing SWOTs):
Internal Strengths
Internal Weaknesses
External Threats
External Opportunities
Take a moment to complete or view the results of this
survey.
Survey about Strengths & Weaknesses
of Businesses
2. Vision of business in 3/4 years time:
(What will the business look like? If a visitor from Mars dropped in what would be seen
and evident. Write in future tense. Maximum of 150 words)
3. Mission/purpose statement for business to cover next 3/4 years:
(What will the business really, really be doing? What activities will it perform, where, how
etc.? What makes the business special/competitive? Every noun, adjective and verb in the
statement is important and must be justified. Maximum of 150 words)

4. Statement of corporate values and beliefs:
(Covers employees, customers, environment etc. etc. Maximum of 150 words)
5. Set out key long-term objectives:
(These are the primary underlying reasons for being involved in the business, and are not
specific targets - these come later)
5a Shareholders
5b Management (If different from shareholders)
5c Business (Relative to competitors etc.)
6. Identify key strategies for business and major functional areas:
(Build on strengths, resolve threats, exploit opportunities and avoid threats. Add any new
dimensions revealed by Vision and Mission. List and prioritize up to ten or so major
strategies. See Devising Business Strategies for further insights.)
7. Assess possible FUTURE strengths, weaknesses, threats and opportunities:
(Do the foregoing strategies improve the initial SWOTs? If they don't, then they should
have done so)
Internal Strengths
Internal Weaknesses
External Threats
External Opportunities
8. Review your vision, mission, values and objectives:
(Refine and revise/restate key strategies to deal with the perceived FUTURE SWOTs)
9. Specify major goals achievable over the next 3/4 years:
(Quantify in terms of sales, market shares, finances, operations etc.)
10. Define strategic action programs:
(Indicate who, what, where, when, how etc. Set targets and prioritize)
Note: This worksheet is available as a free Online Strategic Planner.
Next Steps in Developing a Strategic Plan
If you have prepared a strategic plan along the lines suggested above, you have several possible
pathways. These include the preparation of a full-blown business plan, compilation of financial
projections, undertaking market research, product development, management team-building etc. etc.
You may also wish to refer to some other papers in this series which cover business ideas, business
strategies, cashflow forecasting and managing working capital.

If preparing a business plan, look at Free-Plan. This is a free Business Plan Template for Word (48
pages) and a complementary Guide (supplied as a 90+ topic Help file and as a 100+ page PDF file for
printing. Note that a strategic plan based on the structure in the Strategic Planning Worksheet (above) is
ideal for inclusion in edited form in Section 3. Strategic Overview of this Template.
If you need to produce financial projections as part of a strategic plan or for use on their own, take a
look at our extensive range of Excel-based financial planners - Exl-Plan - which can be used to prepare
3/5-year financial projections (P&Ls, cashflows, balance sheets, ratio analyses and graphs). It
incorporates a Quik-Plan facility for doing quick and dirty projections. If you seek a very simple
solution, look at Exl-Plan Basic (US$ 29) which generates comprehensive "high-level" 5-year
projections based on annual assumptions (in contrast to the more detailed monthly and quarterly
assumptions used by other versions in the Exl-Plan range). Get the details and free trial downloads.
If you need to go into more detail with your strategic plan, have a look at the following software-based
expert systems:
Plan Write Expert Business Planner: Combined business plan tool and expert system to help
evaluate and develop your plan.
q
Quick Insight - Business Idea Assessor: Expert system to help evaluate and improve a new
business idea.
q
Business Insight - Strategy Evaluator: Sophisticated expert system for evaluating, developing and
comparing business and marketing strategies.
q
Share or Bookmark this Page More info
Digg Reddit Newsvine Delicious StumbleUpon
Yahoo Google Facebook Technorati Windows Live
Top of Page
Business
Planning
Papers
9. Introducing PlanWare
PlanWare develops and sells a range of financial planning packages - Exl-Plan and Cashflow Plan - for
businesses of all sizes & types. Trial versions of all products can be downloaded from our PlanWare site
and many other sources on the 'Net.
We also offer an extensive range of commercial software for writing business plans, market planning,
assessing business ideas and evaluating strategies.
PlanWare also features:

Business Ideas
Business
Strategies
Strategic Plan
Business Plans
Business Plan
Insights
Financial
Projections
Cashflow
Forecasts
Working Capital
Raising Finance
Other Items:
- Bad Advice
- Quotations
- Money, Money
Papers on cashflow, financial, strategic and business planning topics.q
Advice on getting new business ideas, managing working capital, devising business strategies
and much more.
q
Pages devoted to famous business quotations and examples of bad business advice and mistakes.q
Top of Page
10. Copyright & Legal Stuff
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs License. This
means that this page and any related files are subject to the normal rules about copyright and
attribution. If you wish to make an electronic or printed copy for YOUR PERSONAL USE, you are free
to do so PROVIDED THAT IT IS UNMODIFIED AND REMAINS COMPLETE IN ALL RESPECTS. All
copying for commercial use requires written prior permission secured from info@planware.org. You
are free to quote short extracts provided our site's URL <www.planware.org> is acknowledged as the
source.
PlanWare, Invest-Tech Limited, Ardmeen Park, Blackrock, Co. Dublin,
Ireland
International Tel:
+353-1-283 4083
International Fax:
+353-1-278 2391
Email:
info@planware.org
WWW:
http://www.planware.org
Subscribe / Syndicate:
RSS
Top of Page
Financial
Projection
Software
Cashflow
Forecasting
Software
Business
Plan
Software
Marketing
Plan
Software
Strategic
Planning
Software
Business
Plan
Guide
Business
Planning
Freeware
Online
Planning
Tools
Business
Planning
Papers
Other
Items
PlanWare, Invest-Tech Limited, Ardmeen Park, Blackrock, Co. Dublin, Ireland
International Tel:
+353-1-283 4083
International Fax:
+353-1-278 2391
Email:
info@planware.org
WWW:
Subscribe:
RSS
Follow:
Twitter
PlanWare, Cashflow Plan, Exl-Plan, Quik-Plan, Free-Plan, Biz-Plan, Easi-Plan, Cash-Plan, Pers-Plan, Your-Plan and Bank-Plan are trademarks or registered trademarks property
of Invest-Tech Limited. Microsoft and the Office logo are trademarks or registered trademarks of Microsoft Corporation in the United States and/or other countries. Plan Write,
Quick Insight and Business Insight are trademarks or registered trademarks property of BRS Inc. © Copyright 1999-2012. Invest-Tech Limited. All rights reserved.
Search site !

Financial
Projection
Software
Cashflow
Forecasting
Software
Business
Plan
Software
Marketing
Plan
Software
Strategic
Planning
Software
Business
Plan
Guide
Business
Planning
Freeware
Online
Planning
Tools
Business
Planning
Papers
Other
Items
Business
Planning
Papers
Business Ideas
Business
Strategies
Strategic Plan
Business Plans
Business Plan
Insights
Financial
Projections
Cashflow
Forecasts
Working Capital
Raising Finance
Other Items:
- Bad Advice
- Quotations
- Money, Money
Devising Business Plan
Strategies
Page Contents
Avoid Business Failure1.
Characteristics of Successful Businesses2.
Clarify Existing Business Strategies3.
Look into Future SWOTs for Strategies4.
Basic Strategic Planning Approaches5.
Creating Strategic Combinations6.
Compiling Strategic Statements7.
Next Steps towards a Strategic Business Plan8.
Useful Links
More Info
Devise business
strategies
Buy planning book
View sample plan
See Also
Get business ideas
Write business plan
Prepare financial
projections
Plan to plan
Business plan guide
Software Tools
Financial Planners
Strategy Planner
Idea Assessor
Marketing Planners
Free Planners
Buy Software
Cashflow Forecasts
Business Plans
Marketing Plans
Strategic Plans
Business Strategy: Strategic Business Plan & Strategy Planning with Strategic Planners, Strategic Plans, Mission Statements, Vision, SWOTs, Strategies, Strategy Development
http://www.planware.org/businessstrategies.htm (1 of 14) [30-05-2012 7:54:50 AM]
Search site !

Free Online Strategic
Planner
Free Online Strategic Planner for creating a 3-page
strategic plan based on the structure used in this white paper.
Use it to organize your thoughts, structure your ideas and
compile a short but comprehensive strategic plan for any size
and type of organization.
Recommendation: Review the paper on this page before
using the planner.
Click here to see feedback from past users of this planning
tool (opens in a new window) and click here to see a sample
plan (use back button on browser to return to this page).
1. Avoid Business Failure
This paper is most relevant to entrepreneurs or management teams that have a
clear vision and mission for their business and are in the process of developing
the primary strategies to be followed. It is closely linked to other papers in this
series, most notably Developing a Strategic Business Plan which offers a
framework for a strategic plan and Getting New Business Ideas. The development
of a suite of strategies is an iterative process and involves circular thinking on the
basis that optimal strategies will evolve gradually and be very interdependent.
Accordingly, the best way to utilize this paper is to review it in its entirety and
then use it as a checklist and basis for brainstorming and systematic analysis.
A venture is most prone to failure during its first three or so years of operation -
the so-called 'valley of death'. A key to getting through these early years is to
avoid the obvious mistakes. Generally speaking, businesses fail for significant
and substantial reasons which are often very evident to outsiders. Insiders often
fail to see them because of their closeness, determination and so on.
Basic reasons for failure include the following:
Finance Markets/Sales Management Offerings Operations

Underestimating
start-up costs
(for operations
& capital
expenditure).
Misjudging the
size or growth
of the overall
market.
Lack of
relevant
sectorial
experience.
Inability to
supply
profitably
to required
price.
Under-investment
in equipment etc.
Insufficient
funds or access
to top-up
finance.
Overoptimistic
estimates of
market
penetration &
shares.
Insufficient
functional
breadth.
Problems
with
maintaining
quality
standards.
Excessive
overheads
(relative to scale
of operations).
Wrong mix of
funds (e.g. too
much debt and
gearing too
high).
Delays in
securing or
developing
distribution
channels.
Unresolved
differences of
opinion.
Restricted
range of
offerings.
High operational
costs and/or low
productivity.
Over reliance on
trade credit
(receivables).
Underestimating
the strength of
competitors.
Unreal
expectations.
Lack of
innovation
(me-too
offerings).
Poor capacity
utilization.
Mistaking profit
for cash flow
(see here).
Misreading
customer
requirements.
No formal or
clear
structures.
Problems
sourcing
supplies.
Inadequate
physical
distribution.
Overoptimistic
projections or
overtrading.
Lack of
promotion &
customer
awareness.
Ineffective
financial &
managerial
control
systems.
Offerings
out of line
with
customer
needs.
Inappropriate
business location.
Unable to
withstand
interest rate
increases.
Inability to
handle an
economic
slowdown.
Clearly, there are very many other reasons as to why businesses fail. The key
point is that causes are usually very apparent (especially with hindsight) and the
trick is to anticipate them by executing appropriate strategies at the outset. Three
examples:
Use market research to confirm demand and assess suitability of proposed
offerings.
q
Create a management team to offset any gaps in experience or expertise.q
Raise equity to reduce exposure to interest rate changes, reduce gearing etc.q

Given that reasons for failure are often both simple and clear, it should (in theory)
be possible to reduce the possibility of failure through prior experience,
forethought and effective planning. Have a look at Quick Insight, an expert
software tool for assessing business proposals.
Top of Page
2. Characteristics of Successful Businesses
A successful emerging growth business is likely to display many of the following characteristics:
Sensibly financed (with prudent mix of equity and debt).1.
Strong cash position (with access to follow-on or contingency funds).2.
Offers above-average profitability (in terms of return on capital invested).3.
Aims for rapid growth in revenues (with profits lagging but in prospect).4.
Targets expanding, or otherwise attractive, market segments.5.
Develops a strong franchise or brand.6.
Devotes substantial resources to innovation (R&D, offerings or market).7.
Competes on non-price issues (e.g. quality, service, functionality).8.
Very close to customers and responsive to their needs.9.
Seeks specialist/leadership image with superior offerings.10.
Well managed with high-grade staff & good people-management.11.
Behind every characteristic there should be an explicit strategy designed to increase the chances of
success and not simply aimed at reducing the likelihood of failure. For example:
A growth business needs a cash war chest and not merely "adequate" debt facilities.q
Likewise, its management team must have the capacity to manage the present business as well as
its growth.
q
Top of Page

3. Clarify Existing Business Strategies
In planning new strategies for a business, it is essential to define its current (implicit or explicit)
strategies for the business as a whole and its main functional areas - finance, marketing, sales,
management, operations etc. Do this by setting out a series of short strategic statements. Some
examples:
The business has been financed entirely from retained profits and without recourse to debt or
external equity.
q
The implicit sales strategy has been to offer a very broad range of products at premium prices and
to invest heavily in promotion.
q
The senior management team has been drawn exclusively from family members.q
Instead of doing R&D, the business copies competing products and sells them at a discount.q
To get at the root (fundamental) strategies, critically examine each statement. For example:
How has the company really been funded?q
How has the company sought to increase sales and market
share?
q
How have productivity/costs moved?q
Up to eight statements should suffice to cover all the essentials. Ask whether they contain the seeds for
significant growth or merely represent hedges against possible failure.
Undertake separate analyses for each business unit if a large corporation is being appraised.
See Developing a Strategic Business Plan (Sections 1.3 & 1.4) and free Online Strategic Planner for
further guidance.
Need more Help with your Strategic Plan ?
Have a look at:
q
q
strategies.
q
Top of Page

4. Look into Future SWOTs for Strategies
An effective SWOT (strengths, weaknesses, threats & opportunities) analysis is a key component of
strategic development. It can prompt actions and responses:
Internal External
Build on strengths Exploit opportunities
Resolve weaknesses Avoid threats
If the business is seeking significant growth, it is important to fast-forward and assess SWOTs as they
might exist a year or two hence. This will help ensure that strategies are ambitious and robust and that
emerging issues are anticipated.
Have a look at the discussion on SWOTs and related matters in Developing a Strategic Business Plan
(and especially Sections 1.3 to 1.5).
Take a moment to complete or view the results of these
surveys:
Survey about Strengths
& Weaknesses of
Businesses
Survey about
Writing a Business
Plan
Top of Page
5. Basic Strategic Planning Approaches
The primary strategic options for a new or established business include the following:
Grow fast (and ahead of most competitors)
Grow in line with industry
Defend existing status (assumes a moderately strong starting
position)
Catch up (with leaders & then grow with or ahead of them)
Turn around (from being an underperformer)
Hang in (go with the flow but don't expend much effort)
Harvest (milk the opportunity with a view to withdrawal)
The preferred option is likely to be very influenced by the dynamics and prospects of the sector in
which the business operates. For example, if the sector is under serious long-term threat then the only
realistic options might be to hang in or harvest.

The two main approaches to strategic development for an established business can be classified as
either organic or quantum as illustrated below:
Organic Quantum
Lower risk Higher risk
Limited resources needed
Substantial resources
needed
Absorbs less effort
May divert/deflect
attention
Low immediate returns Higher returns (?)
Incremental
learning/progress
Excellent insights
required
Strategic flexibility Unforgiving of errors
In the case of a start-up venture, organic and quantum approaches translate into soft or hard start-up
strategies. An example of a soft start would be a software company which evolves from a part-time
business into full-time service provider and then progresses into software products (classic "back room"
start). Another example, would be an engineering company which starts in a shed and gradually moves
into a proper premises ("garage" start).
Soft start strategies can be very effective as they allow entrepreneurs to learn the trade (and make
mistakes) without incurring major, irrevocable (and maybe premature) commitments. Hard starts are
obligatory where substantial investments (in R&D, market or assets) or resources (technology,
manpower etc.) are needed from the outset. It may be possible to soften a hard start by renting (rather
than buying) premises; leasing equipment (instead of purchasing); acquiring a franchise (in lieu of
developing a new brand, systems etc.); entering into a joint venture; or subcontracting manufacturing,
distribution, accountancy services and so on.
Top of Page
6. Creating Strategic Combinations
This Section presents several different combinations of strategies which could be used to help develop a
range of strategic options. These can be strung together to form explicit strategic statements of intent.
For example:
Any Inc's central objective is to become a full-line supplier. It will reduce its cost base
through introducing new processes as result of licensing-in technology in parallel with
broadening its distribution activities financed by retained profits and external debt.
The purpose of this section is not to encourage a form of planning by words but to simply expose the
range of possibilities that might be considered when formulating explicit strategies. These can be
applied equally to start-ups and established businesses. Of course, the big distinction is that the start-up

is building strategies from scratch without the benefits of any market position, momentum or
pre-existing strategies.
Three software packages could be extremely useful in helping to formulate and assess
strategic proposals. Quick Insight is especially suitable for smaller businesses and
Business Insight is aimed at larger businesses. Both packages are expert systems
incorporating the know-how of leading marketing and strategic planners. They
evaluate proposals and allow users drill down to find the basis for evaluations and to
compare their strategies with those of competitors. The Plan Write Expert Edition
integrates Quick Insight into a comprehensive business plan writer.
Any selected suite of strategies must be integrated and internally consistent and in-line with the
business's broader vision, mission and objectives (see Developing a Strategic Business Plan). There is
little point in a business claiming to be technologically advanced if its R&D spend is sub-critical, or
aspiring to become a leading brand if it has neither products, nor funds nor distribution to ensure this
could happen.
Basic thrusts of a business (to be continued, deepened or initiated):
Basic Supplier Thrusts
Specialist vs. Full-line
Market/price leader vs. Market/price follower
Products vs. Solutions
Goods vs. Services
Low volumes vs. Mass production
Commodity offerings vs. High added-value
Differentiated offerings vs. Me-too offerings
Niche markets vs. Broad segments
Primary product and market combinations include:
Existing
Products
New Products
Existing
Markets
Lowest risk Moderate risk
New Markets Moderate risk Highest risk
Investment possibilities include the following:
Improve market share, enhance brand, extend distribution
Increase capacity or efficiency or reduce costs
Extend product ranges and/or served markets
Stabilize/strengthen financial position
Innovate and create new offerings

Increase skills or productivity
Scale back or close down
Possible future directions of main activities (Xs signify desired action):
Activities
Direction
Ignore Initiate Intensify Reduce Withdraw
Distribution X - - - -
Retail - - - - X
Services - X - - -
Manufacturing - - X - -
Alternative technology acquisition routes include:
Own R & D
Own D & no R
License in
Joint venture
Co-finance/sponsor
Funding strategies could embrace the following sources and forms:
Sources Forms
Internal
Retentions
Forego dividends
Existing shareholders
Disposal of surplus assets
Sale & lease back
Better management of working capital (see here)
External
Debt (short- or long-term)
Factoring & discounting
Supplier/customer loans or advances
Leasing (operating & capital)
Grants & subsidies
Equity (formal and informal venture capital)
The range of quantum leap possibilities could include:
License in/out
Franchise
Trade investment

Minority/majority stake
Joint venture
Consortium membership
Merge/demerge
Acquisition
Sponsor start-up
Top of Page
7. Compiling Strategic Statements
Strategic statements can be defined as broad indicators of the direction(s) in which a business should be
driven in order to fulfil its vision/mission while taking realistic account of its resources, constraints and
opportunities.
Exl-Plan, our range of Excel-based financial planners, are ideal for exploring
alternative funding options and related strategies and for undertaking
sensitivity analyses.
They also serve as the link between the a business's objective and actions plans and should result in a
series of integrated sub-strategies and action programs with goals, budgets, timetables. These can be
most effective when linked to specific functional areas. For example:
Industry Operations
Marketplace Finance/funding
Technology Sales
Offerings Management
Marketing Organization
Limit the number of strategic statements to what can be realistically achieved within a realistic time
frame and, if necessary, prioritize them. It is possible that just one strategy is needed for each of the
main main functional areas listed above. See the latter parts of this Sample Strategic Plan for an
example of a set of strategic statements. It might help to summarize and sequence the key elements in a
color-coded Gantt chart or table like the following:
Quarter 1 2 3 4 5 6 7 8 9
Strategy 1
Strategy 2
Strategy 3
Strategy 4
Strategy 5
Strategy 6

......
......
......
Need to Go Into More Detail with your Strategic Plan ?
Have a look at:
q
q
strategies.
q
Top of Page
8. Next Steps towards a Strategic Business Plan
Once a set of strategies has been developed, it will almost certainly need detailed planning and reality
testing. This could embrace market research, acquisition scouting and all forms of planning ranging
from investment appraisal through financial projections to business plans or corporate submissions.
Useful software-related resources to assist these processes include:
Software for writing business and marketing plans - Plan Write Business Planner, Marketing
Planner and Expert Business Planner.
q
Software for appraising business proposals and marketing strategies - Quick Insight (smaller
businesses) and Business Insight (larger businesses).
q
Financial planning software - Exl-Plan.q
Template for a business plan - Free-Plan.q
Online Strategic Planner for creating a 3-page plan.q
Need More Help?
Free Online Strategic Planner for creating a
3-page strategic plan.
Also, the following white papers are central:

Getting New Business Ideasq
Developing a Strategic Business Planq
Making Financial Projectionsq
How to Write a Business Planq
Insights into Business Planningq
For a start-up, additional planning activities could include (in no particular order) management team
formation, R&D, market research and entry planning, feasibility studies and preliminary fund raising.
Exl-Plan Free.
q
q
q
q
Be realistic about the rate at which a management team can implement strategic change and allow for
the fact that these may involve factors totally outside the business's control. It may be better to
implement a few strategic initiatives successfully and on time rather than a multitude badly or only
partially. The solution here is to prioritize.

Need to Go Into More Detail with your Strategic Plan ?
Have a look at:
q
q
strategies.
q
Top of Page
Business
Planning
Papers
Business Ideas
Business
Strategies
Strategic Plan
Business Plans
Business Plan
Insights
Financial
Projections
Cashflow
Forecasts
Working Capital
Raising Finance
and much more.
q
Top of Page
source.

Other Items:
- Bad Advice
- Quotations
- Money, Money
PlanWare, Invest-Tech Limited, Ardmeen Park, Blackrock, Co. Dublin,
Ireland
International Tel:
+353-1-283 4083
International Fax:
+353-1-278 2391
Email:
info@planware.org
WWW:
Subscribe / Syndicate:
RSS
Top of Page
Financial
Projection
Software
Cashflow
Forecasting
Software
Business
Plan
Software
Marketing
Plan
Software
Strategic
Planning
Software
Business
Plan
Guide
Business
Planning
Freeware
Online
Planning
Tools
Business
Planning
Papers
Other
Items
PlanWare, Invest-Tech Limited, Ardmeen Park, Blackrock, Co. Dublin, Ireland
International Tel:
+353-1-283 4083
International Fax:
+353-1-278 2391
Email:
info@planware.org
WWW:
Subscribe:
RSS
Follow:
Twitter
PlanWare, Cashflow Plan, Exl-Plan, Quik-Plan, Free-Plan, Biz-Plan, Easi-Plan, Cash-Plan, Pers-Plan, Your-Plan and Bank-Plan are trademarks or registered trademarks property
of Invest-Tech Limited. Microsoft and the Office logo are trademarks or registered trademarks of Microsoft Corporation in the United States and/or other countries. Plan Write,
Quick Insight and Business Insight are trademarks or registered trademarks property of BRS Inc. © Copyright 1999-2012. Invest-Tech Limited. All rights reserved.
Search site !

Financial
Projection
Software
Cashflow
Forecasting
Software
Business
Plan
Software
Marketing
Plan
Software
Strategic
Planning
Software
Business
Plan
Guide
Business
Planning
Freeware
Online
Planning
Tools
Business
Planning
Papers
Other
Items
Business
Planning
Papers
Business Ideas
Business
Strategies
Strategic Plan
Business Plans
Business Plan
Insights
Financial
Projections
Cashflow
Forecasts
Working Capital
Raising Finance
Other Items:
- Bad Advice
- Quotations
- Money, Money
How to Write a Business Plan
Page Contents
Why Write a Business Plan?1.
Start with a Business Strategy2.
Before Writing the Business Plan3.
Planning the Business Plan4.
Outline the Business Plan5.
Business Plan Outline6.
Writing the Business Plan7.
Need Financial Projections for Your Plan
?
Use Exl-Plan for preparing comprehensive financial
projections for 1/3/5/7 years ahead. Ideal for a business
plan, strategic planning, cash flow forecasting, raising
finance, budgeting and financial appraisals. Get full
details, download free or trial copies or buy & use now.
Useful Links
More Info
Write business plan
Get free planner
Checklist for business
plan
Business plan guide
See Also
Get business ideas
Devise business
strategies
Prepare financial
projections
Plan to plan
Buy planning book
Software Tools
Financial Planner
Cashflow Forecaster
Business Planner
Strategy Planner
Idea Assessor
Marketing Planners
Free Planners
Buy Software
Business Plan: Writing Plans with Free Sample Template & Software, Business Planning, Business Planner, Business Plan Software, Business Plan Template, Sample Business Plan
http://www.planware.org/businessplan.htm (1 of 18) [30-05-2012 7:55:24 AM]
Search site !

1. Why Write a Business Plan?
The preparation of a written business plan is not the end-result of the planning
process. The realization of that plan is the ultimate goal. However, the writing
of the plan is an important intermediate stage - fail to plan can mean plan to
fail. For an established business it demonstrates that careful consideration has
been given to the business's development, and for a startup it shows that the
entrepreneur has done his or her homework.
Purpose of the Business Plan
A formal business plan is just as important for an established business,
irrespective of its size, as it is for a startup. It serves four critical functions as
follows:
Helps management or an entrepreneur to clarify, focus and research
their business's or project's development and prospects.
q
Provides a considered and logical framework within which a business
can develop and pursue business strategies over the next three to five
years.
q
Serves as a basis for discussion with third parties such as shareholders,
agencies, banks, investors etc.
q
Offers a benchmark against which actual performance can be measured
and reviewed.
q
Cashflow Forecasts
Business Plans
Marketing Plans
Strategic Plans
Just as no two businesses are alike, so also with business plans. As some issues in a plan will be more
relevant to some businesses than to others, it is important to tailor a plan's contents to suit individual
circumstances. Nonetheless, most plans follow a well-tried and tested structure and general advice on
preparing a plan is universally applicable.
A business plan should be a realistic view of the expectations and long-term objectives for an
established business or new venture. It provides the framework within which it must operate and,
ultimately, succeed or fail. For management or entrepreneurs seeking external support, the plan is the
most important sales document that they are ever likely to produce as it could be the key to raising
finance etc. Preparation of a comprehensive plan will not guarantee success in raising funds or
mobilizing support, but lack of a sound plan will, almost certainly, ensure failure.
Importance of the Business Planning Process
Preparing a satisfactory business plan is a painful but essential exercise. The planning process forces
managers or entrepreneurs to understand more clearly what they want to achieve, and how and when
they can do it. Even if no external support is needed, a business plan can play a vital role in helping to
avoid mistakes or recognize hidden opportunities. It is much easier to fold a sheet of paper than a

business.
For many, many entrepreneurs and planners, the process of planning (thinking, discussing, researching
and analyzing) is just as, or even more, useful than the final plan. So, even if you don't need a formal
plan, think carefully about going through the planning process. It could be enormously beneficial to
your business.
Anticipate many weeks of hard work and several drafts of the emerging plan to get the job right. A
clearly written and attractively packaged business plan will make it easier to interest possible
supporters, investors etc. A well-prepared business plan will demonstrate that the managers or
entrepreneurs know the business and that they have thought through its development in terms of
products, management, finances, and most importantly, markets and competition.
For more guidance on these matters, check the white paper offering Insights into Business Planning, the
Checklist for Preparing a Business Plan, Free-Plan (free 150-page Business Plan Guide and Template
in Word format) and the comprehensive Business Plan Guide.
If you are developing, or have invented, a new product or service, it may be beneficial to start the
business planning process by reviewing the sections of Getting New Business Ideas covering Assessing
Ideas and Next Steps. This will guide you on groundwork to be done before starting to write a
comprehensive plan.
In the following sections, we discuss the preparation of a strategic plan and present ideas for preparing
the outline of a business plan and writing up the detail.
Need More Business Planning Help? Have a look at:
Exl-Plan Multi-year Financial Projections (with
Excel)
Plan Write Comprehensive Business Planner
Plan Write Expert Business Planner
Top of Page

2. Start with a Business Strategy
A short strategic plan (2-3 pages) can provide a very useful foundation on which to base a much more
detailed and comprehensive business plan. If you don't have a sensible strategic plan, how can you
realistically write a sensible business plan? Use a short strategic plan as the foundation for a more
comprehensive business plan.
As the prelude to developing a strategic plan, it is desirable to clearly identify the current status,
objectives and strategies of an existing business or the latest thinking in respect of a new venture.
Correctly defined, these can be used as the basis for a critical examination to probe existing or
perceived strengths, weaknesses, threats and opportunities. This then leads to strategy development
covering the following issues which are discussed in more detail immediately below:
Visions
Missions
Objectivess
Valuess
Strategiess
Goalss
Programss
Vision
The first step is to develop a realistic Vision for the business. This should be
presented as a pen picture of the business in three or more years time in terms
of its likely physical appearance, size, activities etc. Answer the question: "if
someone from Mars visited the business, what would they see or sense?"
Mission
The nature of a business is often expressed in terms of its Mission which
indicates the purposes of the business, for example, "to design, develop,
manufacture and market specific product lines for sale on the basis of certain
features to meet the identified needs of specified customer groups via certain

distribution channels in particular geographic areas". A statement along these
lines indicates what the business is about and is infinitely clearer than saying,
for instance, "we're in electronics" or worse still, "we are in business to make
money" (assuming that the business is not a mint !). Also, some people
confuse mission statements with value statements (see below) - the former
should be very hard-nosed while the latter can deal with 'softer' issues
surrounding the business.
Objectives
The third key element is to explicitly state the business's Objectives in terms
of the results it needs/wants to achieve in the medium/long term. Aside from
presumably indicating a necessity to achieve regular profits (expressed as
return on shareholders' funds), objectives should relate to the expectations and
requirements of all the major stakeholders, including employees, and should
reflect the underlying reasons for running the business.
Values
The next element is to address the Values governing the operation of the
business and its conduct or relationships with society, customers, employees
etc.
Strategies
Next are the Strategies - the rules and guidelines by which the mission,
objectives etc. may be achieved. They can cover the business as a whole
including such matters as diversification, organic growth, or acquisition plans,
or they can relate to primary matters in key functional areas, for example:
The company's internal cash flow will fund all future growth.r
New products will progressively replace existing ones over the
next 3 years.
r
All assembly work will be contracted out to lower the company's
break-even point.
r
Goals
Next are Goals. These are specific interim or ultimate time-based
measurements to be achieved by implementing strategies in pursuit of the
company's objectives, for example, to achieve sales of $3m in three years
time.

Programs
The final elements are the Programs which set out the implementation plans
for the key strategies.
It goes without saying that the mission, objectives, values, strategies and goals must be inter-linked and
consistent with each other. This is much easier said than done because many businesses which are set
up with the clear objective of making their owners wealthy often lack strategies, realistic goals or
concise missions.
For more information on strategic planning, refer to other papers in this series entitled Developing a
Strategic Business Plan (and its accompanying worksheet) and Devising Business Strategies, and
consider utilizing the free Online Strategic Planner. See also a sample strategic plan - you may wish to
print it for reference purposes.
Need More Assistance?
Have a look at:
Exl-Plan Financial Projections
Plan Write Business Planner
Plan Write Marketing Planner
Plan Write Expert Business
Planner
Quick Insight Business Idea
Assessor
Business Insight Strategy
Evaluator
Top of Page
3. Before Writing the Business Plan
This section deals with preparatory issues, structure & content, and length & time scale for the
preparation of a detailed plan.
Preparatory Business Planning Issues
Before any detailed work commences on writing a comprehensive business plan, you should:
Clearly define the target audienceq

Determine its requirements in relation to the contents and levels of detailq
Map out the plan's structure (contents page)q
Decide on the likely length of the planq
Identify all the main issues to be addressed.q
Shortcomings in the concept and gaps in supporting evidence and proposals need to be clearly
identified. This will facilitate an assessment of research to be undertaken before any drafting
commences. Bear in mind that a business plan should be the end result of a careful and extensive
research and development project which must be completed before any serious writing of a plan should
be started. Under no circumstances should you start writing a plan before all the key issues have been
crystallized and addressed.
To get started, use the outline below to prepare the basis for your plan. Bear in mind that if a credible
and acceptable outline plan cannot be compiled then it is highly improbable that a more comprehensive
plan can be prepared.
Take a moment to complete or view the results of these
surveys:
Survey about Strengths
& Weaknesses of
Businesses
Survey about
Writing a Business
Plan
For further practical guidance on these matters, review the following:
White paper offering Insights into Business Planning.1.
Checklist for Preparing a Business Plan.2.
Free-Plan - business plan template & guidelines (Word format).3.
Comprehensive Business Plan Guide.4.
Structure & Content of a Business Plan
A typical business plan comprises the following main elements:
Brief Introduction setting out the background and structure of the plan.1.
Summary of a few pages which highlights the main issues and proposals.2.
Main Body containing chapters broken into numbered sections and subsections.3.
Appendices containing tables, detailed information, exhibits, etc. referred to in the
text.
4.
The outline presented below in conjunction with the comprehensive Business Plan Guide could serve as
the basis for a detailed business plan.

Length & Time-scale for Business Planning
Whilst the sheer length of a business plan may bear no relation to the underlying prospects of a
business, it is likely that a well-developed plan would be at least twenty pages long plus appendices.
The elapsed time needed to produce a detailed plan might be between twenty and one hundred days.
This would be determined not only by the complexity and scale of the venture, but also by the scale and
maturity of the business and relevant experience and skills of the management team. Whilst the task of
writing the plan itself may only take a relatively short time, be sure to allocate enough time to the
research, preparatory work and the underlying thinking and discussion.
For more guidance on the length of a plan and the time-scale involved, have a look at Insights into
Business Planning.
Top of Page
4. Planning the Business Plan
Develop an Outline Business Plan
Start by defining an outline (i.e. a table of contents) of your plan. This will allow you to to concentrate
on the essentials of planning the business rather than becoming too absorbed in the detailed drafting of
your plan. It will allow you to see the wood from the trees.
Having devised the basic outline for your business plan, the next task is to expand this to include
subheadings and appendix titles (see the Business Plan Guide for detailed suggestions). This extended
structure should be critically reviewed to ensure that all the salient elements of the plan are included and
that it has a logical flow. This approach should also ensure that the plan has an appropriate levels of
detail and is correctly targeted at its audience - investors, directors/shareholders, financial institutions
etc. For example, a structure which is mainly devoted to detailed technical descriptions of products
would be completely unsuited to a plan being used to raise bank finance.
Prepare a Business Planning Work Program
Once the plan's structure has been defined, it can be used as a checklist and basis for a work program
and timetable to complete the plan. This work program will often entail extensive research and thought
prior to the commencement of writing. For example, formal market research may be needed before
sales volumes and prices can be determined. Another example: professional advice may be required to
assess capital expenditures in relation to the acquisition of premises and so on.
The work program could correspond to key sections of the proposed plan and could include timetables,
resource allocations and cost estimates as indicated in the following chart:

Section of
Plan
Researched by Written by
Elapsed time
(weeks)
Cost
($)
Priority Key Actions
Further Suggestions for Business Planning
Some additional tips and suggestions:
Be absolutely clear about the primary purpose and audience of the plan from the outset. If the
plan has to serve multiple purposes, consider producing tailored versions (or tailored summaries).
q
Allow enough time to produce revised drafts of the plan - three/five drafts would not be unusual.q
Write the Introduction, Summary and Conclusion of the plan only after the plan's main parts have
been finalized.
q
At an early stage, make some high-level sales and financial projections (covering 1-3 years) to
explore the general direction and size of the business, likely viability and possible funding
amounts and mix. For this purpose, consider using the Quik-Plan facility within Exl-Plan, our
range of financial planners for use with Excel.
q
If the elapsed time needed to prepare the plan and commence its execution is lengthy, set the start
date for financial projection close to the commencement of execution. For example, if you begin
preparing a plan in January and hope to raise startup finance by October, the start date for
projections might be set to September. Any expenses incurred before this date could be rolled up
into the opening balance sheet for the projections.
q
Seek external assistance sooner rather than later. This may take the form of software tools,
consultancy assistance in the form of specific assignments, or mentoring and counseling on an as
required basis.
q
If planning a significant business, ensure that a management team has been identified (and
possibly in place) before the plan is finalized.
q
Identify and cultivate possible key recipients of the plan during the plan's preparation. This will
ensure that when the plan is finally presented, these contacts will have some prior knowledge of
its contents and the promoters and, where appropriate, the views of contacts may have been taken
into account during the preparation process.
q
Start compiling the plan at the sections devoted to market research/analysis and sales
forecasts/plans, or with details of the proposed product/service offerings. Leave the detailed
financial projections aside until all details in relation to sales, costs, expenses, operations, capital
investment and possible sources/types of finance have been resolved
q
For further help, check out:

The white paper entitled Insights into Business Planning which has been based on the views of
hundreds of people who have prepared business plans
q
Free-Plan, our free Business Plan Guide and Template (for Word)q
The 30-point Checklist for Preparing a Business Plan.q
The comprehensive Business Plan Guide.q
If you have a problem or query relating to the compilation of a business plan which is not covered in the
various white papers, you may wish to use our free and confidential Online Business Plan Advice
Service.
Have a look at:
Exl-Plan Financial
Projections
Planner
Top of Page
5. Outline the Business Plan
The next section presents an outline structure for a business plan. Feel free to change this outline to suit
your project and its state of development. It can be readily expanded to become a 'full-blown' business
plan by extending the level of detail as explained in the Business Plan Guide.
Note: A free 150-page Business Plan Guide and
Template (Word format) incorporating a similar
outline structure and additional detail is available for
downloading here.
The suggested page lengths for a comprehensive plan are given in parenthesis after each section's
heading within the outline. A small, straightforward business should work within the minimum page
lengths whereas a large, complex business seeking a substantial external investment might hit the
maximum page lengths. Note the importance of marketing and sales in terms of the suggested number
of pages for these sections. For more guidance on the length of business plans, have a look at Insights
into Business Planning.

Avoid going into too much detail within the plan's body by placing detailed or supplementary material
in accompanying appendices. Bear in mind that most investors, bankers etc. dislike having to read
overlong business plans just as much as entrepreneurs and managers dislike writing the plans in the first
instance!
Work on the assumption that whoever reads your plan will be completely unfamiliar with your business
or project and will be seeking answers to relatively basic questions and key issues, for example, what
will the business do, will it make money etc.
insights into business planning, financial planning, cashflow forecasting, strategic planning, devising
business strategies and managing working capital. Finally, you should review the contents of the
Business Plan Guide.
Note that a free Business Plan Template for Word (48 pages) and a complementary Guide (supplied
as a 90+ topic Help file and as a 100+ page PDF file for printing) incorporating this outline structure
and additional detail is available for downloading here.
Top of Page
6. Business Plan Outline
Use the outline below as the "road map" for your plan and then write up each section concisely but
comprehensively. Only address matters of real substance and major significance within the main
sections of the plan.
1. Introduction (1)
Introduce the plan. Explain who wrote it, when and for what purpose. Give contact details.
See 1. Introduction within the Business Plan Guide for more info.
2. Summary (1-3)
Write last. Present the highlights of the plan. See 2. Summary within the Business Plan
Guide for more info.
3. Strategic Overview (1-2)
Present the "big picture". What are the central purposes and activities of the planned
business? What are its SWOTs? What are its major (long term) objectives, key strategies
and prime goals ? See 3. Strategic Overview within the Business Plan Guide for more info.

4. Present Status (1-5)
Summarize achievements and performance (financial, sales, technical etc.) to date.
Introduce the stakeholders in the business. See 4. Present Status within the Business Plan
Guide for more info.
5. Product/Service Offerings (1-3)
Keep descriptions short and confine them to broad groups. Explain briefly what makes
them special. See 5. Product / Service Offerings within the Business Plan Guide for more
info.
6. Profiles of Target Markets (3-6)
Size, segments, trends, competition and user/customer profiles. See 6. Profiles of Targets
Markets within the Business Plan Guide for more info.
7. Marketing Strategies, Sales Plans & Projections (3-6)
How will the business market its products/services and sell to customers? What sales will
be achieved in its main markets? How will it deal with competitors ? Indicate costs. See 7.
Marketing Strategies, Sales Plans & Projections within the Business Plan Guide for more
info.
8. Technology and R&D (0-2)
If relevant, explain progress, plans, resources and highlight any technological advances.
See 8. Technology and R&D within the Business Plan Guide for more info.
9. Operational/Manufacturing Plans (2-5)
Cover distribution & service activities and/or manufacturing. Highlight major elements
only. Indicate organization, resources, costings etc. See 9. Operational / Manufacturing

Plans within the Business Plan Guide for more info.
10. Management & Administration (2-3)
Introduce the proposed management team, structure etc. Indicate administrative
arrangements and specify overhead costs. See 10. Management & Administration within
the Business Plan Guide for more info.
11. Financial Projections (4-8)
Use simple tables to present key financial projections e.g. summary P&L, cashflows,
balance sheets and key ratios. Place the detailed analyses in appendices. See 11. Financial
Projections within the Business Plan Guide for more info.
For more help, download a trial version of our financial planners
- Exl-Plan (for Excel) - and review its annual output reports and
Textual Summary Report.
12. Funding Requirements & Proposals (0-2)
If applicable, summarize funding requirements, possible sources, likely terms, and, for
investors, the projected return on their investment. Be realistic!! See 12. Funding
Requirements & Proposals within the Business Plan Guide for more info.
13. Implementation (1-3)
Explain the major decision points, time scale and actions required by management and
others to progress the plan. See 13. Implementation within the Business Plan Guide for
more info.
14. Conclusion (1)
Indicate why the business will succeed and why it should be supported. See 14. Conclusion
within the Business Plan Guide for more info.
Appendices
Use appendices at the very back of the plan to present important background data and
detailed plans. This will avoid disrupting the flow of the plan or cluttering it with excessive
detail. See Appendices within the Business Plan Guide for more info.
insights into business planning, financial planning, cashflow forecasting, strategic planning, devising

business strategies and managing working capital. Finally, you should review the contents of the
Business Plan Guide.
Have a look at:
Exl-Plan Financial
Projections
Planner
Exl-Plan Free.
q
q
q
q
Top of Page
7. Writing the Business Plan
The following suggestions may be of assistance when drafting the plan:
Build the detailed business plan on a carefully considered outline (table of contents)
- see the business plan outline above.
1.
The most important and difficult sections to prepare relate to marketing and sales as
these can make or break not only the business plan but also the business itself !
2.
Support market and sales projections by market research. Ensure that there is a direct
relationship between market analysis, sales forecasts and financial projections.
3.

Assess competitors' positions and possible responses realistically.
Be realistic about sales expectations, profit margins and funding requirements.
Ensure that financial ratios are in line with industry norms. Do not underestimate the
cost and time required for product development, market entry, securing external
support or raising finance. Consider the possibility of the double-double-half rule -
double the cost or time required or halve the sales projections.
4.
Restrict the level of detail on product specifications and technical issues.5.
The financial projections are likely to be straightforward but decide on a sensible
level of detail as regards the time horizon etc. Consider using a personal computer
and a financial modeling package for the projections.
See our range of financial planners - Exl-Plan (for Excel) - which can
be downloaded from here.
s
For further specific information on financial planning for businesses,
refer to the page entitled Preparing Financial Projections accessible
from the PlanWare site.
s
6.
If looking for external equity, be realistic about the value of the business, risks
involved and possible returns, and be sure to indicate possible exit mechanisms. Put
yourself in the shoes of an investor and remember the golden rule - he who has the
gold makes all the rules.
7.
The management section of the plan is of crucial - experience, balance, ability and
commitment. If a new venture is involved, then management is likely to be its only
real asset. Consider formation of a management team or strengthening management
as part of the plan. Remember the five ingredients of a successful business are
management, management, management, market and product (in that order, and
not in the reverse order as some inventors and entrepreneurs might like to think).
8.
Be positive but realistic about the business's prospects and explicitly recognize and
respond honestly to shortcomings and risks.
9.
When writing the plan:
avoid unnecessary jargonr
economize on wordsr
use short crisp sentences and bullet pointsr
check spellingsr
concentrate on relevant and significant issuesr
break the text into numbered paragraphs, sections etc.r
relegate detail to appendicesr
provide a contents page and number pagesr
10.

write the summary last.r
Get a qualified outsider to review your plan in draft form and be prepared to adjust
the plan in the light of comments secured and experiences gained.
11.
External help and guidance in preparing a business plan can be extremely valuable.
If outside help is used, make sure that the resultant plan remains your own and not
that of your advisers.
12.
If presenting the plan to outsiders, attach appendices and number pages. Add a
contents page and bind it within attractive covers.
13.
Have a look at:
Exl-Plan Financial
Projections
Planner
Top of Page

Business
Planning
Papers
Business Ideas
Business
Strategies
Strategic Plan
Business Plans
Business Plan
Insights
Financial
Projections
Cashflow
Forecasts
Working Capital
Raising Finance
and much more.
q
Free business plan template (Word format).q
Basic & Free Planners for Financial
Projections and more ...
Our Exl-Plan range of integrated monthly/quarterly planners
includes Exl-Plan Basic which uses annual assumptions to generate
comprehensive 5-year projections. This simple, low-cost version
(US$29) will meet many business planning needs. Get details,
download free trial copy or buy & use now.
Also available is a completely free version, Exl-Plan Free, which is
identical to Basic but projects for just two years ahead. Details and
free download.
The Free and Basic versions of Exl-Plan are complemented by
other more detailed, powerful versions of Exl-Plan. Get details and
download trial copies.
All versions of Exl-Plan include a free 150-page Business Plan
Guide & Template (for Word).
Top of Page
source.

Strategicbusiness

Recommandé

Recommandé

Contenu connexe

Tendances

Tendances (20)

En vedette

En vedette (20)

Similaire à Strategicbusiness

Similaire à Strategicbusiness (20)

Dernier

Dernier (20)

Strategicbusiness