Tweet

Management and Business Plans

Guest post by: Arthur Rothberg

Article Overview: In addition to being a strategy planning document and a roadmap to success, a business plan is also a living-or “evergreen”-document that functions as an evolving management plan. Included in this article are a review of eight key elements in a comprehensive business plan and a look at how a good business plan functions with regards to business definition, competitive differentiation and strategic goals.

Management and Business Plans

A business plan means a lot of different things to different people. There are software programs that assist a new business to map out its plan, strategy, and goals. Or professionals in business plan writing can craft complex documents that include such items as detailed financial analysis and forecasts, benchmarks, and investment, growth, and exit strategies. Which sort of business plan you need depends on factors such type, scope, and size of the business, whether investors will be sought, and the business and financial goals.

Regardless of how extensive and in depth a business plan is, it is universally agreed that every business, no matter how small, should have a business plan. It is a roadmap and a strategy planning document. It assists to organize thoughts, tasks, and move through hurdles. A business plan is a living document-meaning that although it provides a structure, it changes as the business is built and grows.

In nearly every case a business plan is a difficult document to write, which is why many people avoid writing them. It forces a business planner to think through every aspect of the building and growing process, oftentimes bringing up questions that have no clear answer. A business plan is a creative document that looks into the future, while still maintaining accuracy and a factual assessment of the business. To be both creative and systematically practical can be a challenge.

Certain key elements are common to most business plans:

Executive Summary

An executive summary is a concise overview of the plan. It is the section most outsiders will read when attempting to get a sense of your business.

Market Analysis

A market analysis is exceedingly important for any type of business. It discusses the industry, competitors, and why your business is viable. It essentially makes the case for why you will succeed given the current climate. Although it is useful to others, it is critical that you are able to convince yourself, through your market analysis, you have the potential for a successful business.

Company Description

What is your business, what do you do, how does it run? The level of detail depends on the business, but anyone reading this section should have a clear idea of what your company is and will be.

Organization & Management

Particularly for a medium-to-large-size business, the organization and management structure is key to the working machine. Investors and partners will want to be assured that the organization (and ownership) is sound and the players are competent and in appropriate roles that cover all aspect of running the business.

Marketing & Sales Management

Traditionally this section of the plan discusses the fundamental aspects of how you will market the business and sell products and services. More and more business plans are including entire marketing plans that specifically articulate marketing and sales strategy, tools, and steps. This section is more difficult than you might think, as it is an area of the business where the phrase, "it takes money to make money," is often most apropos.

Service or Product Line

This is a more technical and specific explanation of what your business does and how it does it. It discusses customer needs and how they will be served. Included here is a frank discussion of the product and/or service lifecycle, whether (and when) products and services will become outdated and obsolete, and phase-in of new or updated products and services.

Funding Request

Whether you are seeking funding support from family, banks, or venture capital, most businesses will need to secure funding from somewhere. Even if your venture is self-funded, at some point you will likely need money from another source. Consider all scenarios in the funding request, as well as a hierarchy of funders and a timeline.

Financials

Financials include everything from a budget, allocation and earnings assessments, to complex analysis of the business projected years into the future. Financials are essential for planning and developing a picture of what the business will need and how it will succeed financially. The goal of every business is to bring in money (even not for profit businesses need money). This is the bottom line. When developing financial projections one often runs up against "not having a crystal ball," or in other words, having to guesstimate. Financials are the best assessment using as much information as possible, bringing in all the elements already discussed above.

A business plan might better be conceived as a management plan-management as in managing the business, in each area that is essential for functioning. The management plan is a reference document that can be used for regular evaluation of progress. For instance, on an annual basis a business may engage in a SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats) as part of strategic planning. This is an exercise specific to the immediate needs of the business: examining internal and external factors and how they impact identified objectives.

A business or management plan is a big picture document, looking at past, present, and future. It is a fundamental guide when engaging in any more narrow-scoped assessment and planning. It is also useful for developing an "evergreen document," one that targets a specific audience over time. This is also part of strategic planning, or the more specific work of defining day-to-day what the business does, who it does it for, and how it succeeds.

In summary, a business or management plan is akin to a skeletal structure that contains all the moving parts. Though it may grow and change over time, it articulates the fundamentals of the business. Without a business plan for a guide, the functional strategy of building and running a business is easily lost in the minutia and distractions of everyday reality.

A business plan:

• Defines a business. When building a business new ideas are likely to emerge every day. Although they may be good ideas, a successful business is built one step at a time.
• Differentiates you from your competitors. In a competitive marketplace, it is essential to recognize what works, what doesn't work, and how to make your business the most attractive option in the landscape.
• Sets realistic yet challenging financial goals. It is always tricky to both portray an accurate picture of the expected finances, while still projecting the greatest rewards. This is a balance all investors and partners will want to see.

Frequently, developing a business plan is outside the core competencies of company executives and entrepreneurs. Consideration should be given to contracting with an outsourced provider of CFO services as this resource has expertise in developing comprehensive management and business plans for companies ranging from start-ups to large corporations.

Related Articles
  PROGRAM MANAGEMENT PLANNING
  “Crisis Management Planning – What’s Happening Where We Work?”
  Razban Golden Rule 3: Executive Coach's Game Plan
  Do You Know Where Your Disaster Recovery Plan Is
  Change Management Can Lead to Rigidity and Resistance to Change
  Goals & Plans
  The Role Of The Sales Manager
  Managing Employees Performance
  An Indexing Filing System Software Will Help Professors and Teachers with Paper Files
  How to Create a Business Plan
  Planning for 2011
  Money Management
  Business Plan Samples
  What Is the Most Effective Quality Within Your Sales Team?
  Business Plan Examples
  Strategic Thinking – A Wise Business Investment, According To Your Strategic Thinking Business Coach
  Lead Capture Pages for Network Marketing
  Dropped Balls
  How to Improve Your Effectiveness as a Manager
  Successful Business Plans

Article Tags: analysis, business plan, differentiation, elements, financials, funding, management plan, market, sales, strategy planning



Related Forum Posts
New Study - Women prepare better business plans - I found an article in Business Week and I found this quite interesting. [quote:ka7lg35i]Who Prepares Better Business Plans, Men or Women? A new study based on four years of data from men and women in a training program for microenterprises finds that they come out the same in quality scores. "However, women scored significantly better on the presentation of their plan to judges," conclude the study's authors, Ronald G. Cook, Paul Belliveau, and Christine Lentz of Rider University, in a paper presented at a recent meeting of the Small Business Institute. [/quote:ka7lg35i] What do you guys think?
Your Intial Mistakes Business - Hi, When I started my business I had made a lot of mistakes initially. These helped me in learning the art of the trade and today when I look back, I feel that these mistakes were quite silly. I had made my learnings then and those learnings have helped me time and again. Some of the mistakes I made were - i. Wrong Time Management ii. Wasting money on glossy Brochures and Business cards iii. Believing what they taught me at school was 100% correct iv. Giving too much when it was not required...... I would like to find out what have been your faltering moments in Business when you had started and what/how did they help you grow. Regards
No B.S. Time Management - A great book I read on Time Management is No B.S. Time Management for Entrepreneurs by Dan Kennedy.
My entry - 1. The Best Business Books Ever: The 100 Most Influential Business Books You'll Never Have Time to Read - this is a fascinating book about the history of Business theory, and I'd recommend it to anybody. 2. The Big Book of Small Business: You Don't Have to Run Your Business by the Seat of Your Pants, by Tom Gegax. Ditto. 3. PADI: The Business of Diving Book Okay, so this book won't be of use to anyone who doesn't want to start a scuba store, but I did, and this book was of course invaluable to me in reaching that goal.
Top 19 Copywriting books - 1. Ogilvy on Advertising. David Ogilvy. Wiley. 2. Positioning: The Battle for your Mind. Al Ries and Jack Trout. Warner. 3. The New Positioning. Jack Trout. McGraw-Hill. 4. Tested Advertising Methods. John Caples. Prentice-Hall. 5. How to Make your Advertising Make Money. John Caples. Prentice-Hall. 6. Guerrilla Advertising. Jay Conrad Levinson. Houghton Mifflin. 7. Direct Mail Copy that Sells. Herschell Gordon Lewis. Prentice-Hall. 8. Sales Letters that Sizzle. Herschell Gordon Lewis. NTC Business Books. 9. Herschell Gordon Lewis on the Art of Writing Copy. Herschell Gordon Lewis. Prentice-Hall. 10. Romancing the Brand. David Martin. American Management Association. 11. The Art of Writing Advertising: Conversations with William Bernbach, Leo Burnett, George Gribbin, David Ogilvy, Rosser Reeves. NTC Business Books. 12. Confessions of an Advertising Man. David Ogilvy. NTC Business Books. 13. My Life in Advertising. Claude Hopkins. NTC Business Books. 14. Scientific Advertising. Claude Hopkins. NTC Business Books. 15. How to Become an Advertising Man. James Webb Young. NTC Business Books. 16. The Lasker Story as He Told It. NTC Business Books. 17. Advertising Concept and Copy. George Felton. Prentice Hall. 18. The Copy WorkShop Workbook. Bruce Bendinger. The Copy Workshop. 19. Hey, Whipple, Squeeze This: A Guide to Creating Great Ads. Luke Sullivan. Wiley. This should keep you busy for at least a year. Enjoy!


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Counselling - Who Needs It?

The Strong Leadership Formula

What is Give Back Marketing?

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.