simple small business strategic planning tool

Small Business Strategy Development Process

UnderstandAnalyze

Decide Act

Understand AnalyzeDecide

Act

Art Helmstetter “Large and Small Business”

Managing Director, B2B Planner Ltd. Small Business Development

Director Global Planning and Marketing Quaker Chemical Corporation Strategic Planning

Business Management 25 consecutive years achieving profit goals

Started up four businesses Two start ups survive today Grew two other businesses from 0 to over $25 MM

Education MBA, BS & MS Engineering,

“If you don't know where you are going, any road will get you there.”

Lewis Carrol, Alice in Wonderland

“I can't change the direction of the wind, but I can adjust my sails to reach my destination.”

Jimmy Dean

Strategy Development Agenda

• The case for strategy development.• Why small businesses don’t plan.• Need to respond to a rapidly changing world• A planning model for today• Key Elements of Planning

– Internal Factors– External Factors– SWOT Analysis

• Planning Tools and Templates• The Simple Steps Model

The Brutal Facts

1. Nothing you do will 100% guarantee success

2. Planning can greatly improve your chance of success

3. Not planning WILL greatly increase your chance of failure

This is confirmed by the large number of companies without business plans that fail within 5 years

Definition of Strategy Development

A business’s process of • defining its strategy and direction,• and making decisions on allocating its

resources including its capital and people.

Keep It Simple by answering three questions:• "What do we do?"• "For whom do we do it?"• "How do we beat the competition?”

CreatesA Focal Point

to Grow Your Business

Strategic Planning

We Live in a “Hyper”World

• Hyper-competitive market– Global competition– Excess capacity in the US

• Hyper-Speed of Change– Accelerating technology development– Digital speed of operation

• Hyper-Uncertainty– Changing economy– Changing government intervention

Why Businesses Don’tDo A Strategic Plan?

No one makes you “Too expensive” Takes too much time Can’t get the information Don’t know how Doesn’t work Is not fun

What’s Your Reason?

Planning Is NOT a Do It Yourself Process

• You don’t do it often• You need a process• It takes time• You need perspective

and objectivity• It takes research

Who Can Help?

• Advisory Committee • Trained Staff Member • SCORE Mentor• Sole Practitioner • Large Consultant

But YOU must OWN the process!

A Plan Is the Conclusion of Strategy Development

Strategic ThinkingWhat Might Happen Options

Strategic Decision Making What Will We Do

Strategic PlanningHow Will We Do It

Decisions

Business Plan

Strategic Plan Business Plan Budget

Serial Planning Model For Stable Conditions

Alternate Business Planning Models

Customer Behavior

External Factors

Business Plan and Budget

Internal Capabilities

Strategic Thinking and Analysis

Both models use similar elements and analyses, but the process is very different.

Alternate Business Planning Models

Dynamic Planning Model for Changing Conditions

Customer Behavior

External Factors

Business Plan and Budget

Internal Capabilities

Strategic Thinking and Analysis

Both models use similar elements and analyses, but the process is very different.

Alternate Business Planning Models

Dynamic Planning Model for Changing Conditions

Vision

Mission

MarketResearch

SWOT

Segmentation

Analysis

Elements of StrategyFormulation

• Market Size• Growth Potential• Customer Needs and Wants

Buyer Behavior Preferences

• Competitive Intelligence

Traditional Market Research

Focus on your “addressable” microcosm

Focus on YOUR customersWhat do your customers really buy from you? Buyer Behavior PreferencesFind the common characteristicsCan you sell your customers different things?Who do your customers compete with?

Can you sell to them?

Focus on YOUR competitors

Simplified Market Research

Customers:Who Buys from You

Where Does Your business

come from?

Demography

Geography

Consumers

Businesses

Repeat Buyers

Occasional Buyers

Customers: Segmentation

Use common elements to select products and marketing

Identify underserved, high value groupsIncome Career or Industry Current Product Use

Use a segmentation dimensionIndustrial Commercial Consumer

Dividing the market into groups Product they use How they use product When and where used

Simplified Competitor Research

Focus on YOUR marketGoogle ‘emVisit their websiteSearch in directory listings

Yellow pages digital and print.Google and Yahoo localAngie’s List

Check out their reviewsTalk to their customers, employees, suppliers and competitors

BUT ALWAYS BE ETHICAL!

Supply or Value Chain

Determine your position in the value chainHow far are you from the final user

Produce Raw

Material

Make Parts

Assemble Product

Sell Product

Service Product

Five Forces of Competitive Intensity

CompetitiveRivalry

New Entrants

Buyer Power

ProductTechnology

Supplier Power

Focus Your Actions Based on your SWOT

StrengthsManufacturingInnovationMarketing/sales

OpportunitiesNew MarketsNew ApplicationNew Technology

WeaknessesCostMarketing/salesStaff skills

ThreatsCompetitionEconomyNew Technology

Internal External

Barr

iers

Posi

tives

Focus Your SWOT on the “Make or Break” Issues

Focus Your Actions Based on your SWOT

Confront Avoid

Exploit Search

Internal FactorsStrengths Weaknesses

Exte

rnal

Fac

tors

Opp

ortu

nitie

s

Thr

eats

Actions To Grow

• Increase reach in existing • Find new markets

Market Expansion

• New business w/customers • New products

Product Expansion

• Products• Application• Processes

Innovation

Actions to Improve Performance/Efficiency

• Credit Policy• PricingFinancial

• Capital investment• Improve processesOperations

• ERP systems• Web based sales, marketingIT

• Rewards & recognition• Capability buildingHR

FOCUS on 1-2 Goals

Goal 1: Strategy 1: Implement the Timeline: Team ________________________________________________________________

________________________________________________________________ Action Items:

_________________________________________________________________________________________________________ Timeline: _________________________________________________________________________________________________________ Timeline:

TASK WHO BY WHEN

Resources needed ________________________________________________________________________________________________________________________________________________________ Enabling factors/barriers ________________________________________________________________________________________________________________________________________________________

RESULTS: ________________________________________________________________________________________________________________________________________________________________________________________________

1. Executive Summary

2. Goals

3. Objectives

4. Strategies

5. Action items

6. Outcomes/Results

7. Time Lines

8. Champions

32

Eight Strategic Measures to Monitor and Update

• LACK OF STRATEGIC FOCUS

33

Why Strategies Fail

• LACK OF STRATEGIC FOCUS

• Inaccurate or biased intelligence gathering

• Failure to identify weaknesses and threats

• The strategy is a poor fit between the external environment and an organizations' resources

• Overly optimistic about resources and abilities

• Inadequate support of others

• Lack of discipline to follow the plan

• Not making timely adjustments when needed

34

Why Strategies Fail

Focus on the Future

• Commit to writing a strategy and plan.• Use a proven process, and • An experienced person to facilitate the process.

• Meet with that person monthly to follow up on the strategy and plan

Now Go for a Ride

Steer

Pedal

Balance

Look Ahead

Thank You!

Understand AnalyzeDecide

Act

Focus Your Strategy With SCORE’s Simple Steps

Stability

MaturityRapid

ExpansionInitial

GrowthStart-up

Yesterday’s Paradigm Slow Pace (Years) Many Opportunities Subtle Impact Specialization (Isolation) Agriculture Based Economy Product Based Economy Services Based Economy

DeclineSurvival

WorksheetCurrent Situation (Position)

Current SituationTraditional Model

Today’s Paradigm Hectic Pace (Months) Few Opportunities Volatile Impact Diversification (Collaboration) Experienced Based Society

Current SituationEmerging Model

OffenseCompete

GrowExpansion

StrategicShaping

DevelopmentStart-upDefense

DeclineSurvival

RecoveryTacticalShaped

Welcome to the Experience Driven Economy

Experience Loyal Consumers(Unprecedented Consumer Mix)Digital Customers(Connected, Online and Influenced)Interactive Communications(Not Just One-way Advertising)Customer Relationships(Not Just a Sale)Hectic Pace(Immediate not prolonged) Limited Opportunities(To Succeed or Fail)Volatile Impact(Business Outcomes)Diversification(Not specialization)Collaboration(Not isolation)

ExperienceDriven

Economy

Enterprise500 Above

Corporation126-500

Company26-125

Business6-25

Entrepreneur1-5

VerticalMarketGroup

HospitalHealthcare

NAICS Classification Code:www.census.gov/epcd/www/naics.html

VerticalBusinessSegment

Doctor’sOffice

Small Business Size, Scope and Type of Business

Business Change CyclesAt each of these levels, businesses go through significant transition in

several key areas.

Employees Organization

Investment RevenuesCash flow ExpensesOfferings Facilities

Resources Systems

Processes

NationalRegional

VirtualGlobal

LocalNeighborhood

Current SituationDevelopment – Start Up

Simple Steps to Starting a Business Establish a viable for-profit business or non-profit organization

Need (Pending motive)

Desire (Feasibility)

Ability (Qualification)

Timing (Opportunity)

Action (Start-up)

Step 1: Awareness (Concept/Interest)

Step 2: Awareness (Personal Qualification)

Step 3: Evaluation (Business Feasibility)

Step 4: Commitment (Decision/Funding)

Step 5: Implementation (Preparation/Launch)

Simple Steps to Starting a Business - Start-up Track

WorksheetBusiness DevelopmentDecision Process

Advantage SCORE . . .Integrated Business Performance Solutions

Simple Steps Workshop Series Integrated or Segmented Track

Scheduled (Open) Workshops Combined Track

Aligned Mentoring Business Start-up Coaching

SCORE Resources (Network)

WorksheetQualification andFeasibility Guide

Shaped by Marketplace

Disrupted by Industry

Majority and Laggards

Declining or Survival

Involuntary Disruption

Current SituationRecovery – Tactical

Simple Steps to Business RecoveryNeed to move the business out of the current situation

Simple Steps to RecoveryDefense Track- Tactical

Step 1: Awareness (External Perspectives)

Step 2: Discovery (Internal Insights)

Step 3: Evaluation (Sustainable Business Model) Isolate Challenges

Step 4: Commitment (Solution Recommendations) Prioritize Initiatives

Step 5: Implementation (Execute and Management)

Step 6: Measurement (Measure Results and Repeat)

Advantage SCORE . . .Integrated Business Performance Solutions

Simple Steps Workshop Series Integrated or Segmented Track

Scheduled (Open) Workshops Combined Track

Aligned Mentoring Business Recovery Coaching

SCORE Resources (Network)

WorksheetBusiness Recovery

Simple Steps to Business ExpansionWant to move the business to the next level

Current SituationVoluntary Transition

Shaping Marketplace

Disrupting Industry

Innovators/Early Adaptors

Competing Aggressively

Steady Growth

Voluntary Evolution

Simple Steps to ExpansionOffense - Strategic

Step 1: Awareness (External Perspectives)

Step 2: Discovery (Internal Insights)

Step 3: Evaluation (Sustainable Business Model) Isolate Challenges

Step 4: Commitment (Solution Recommendations) Prioritize Initiatives

Step 5: Implementation (Execute and Management)

Step 6: Measurement (Measure Results and Repeat)

Advantage SCORE . . . Integrated Business Performance Solutions

Simple Steps Workshop Series Integrated or Segmented Track

Scheduled (Open) Workshops Combined Track

Aligned Mentoring Business Expansion Coaching

SCORE Resources (Network)

WorksheetBusiness Transition

DevelopmentStart-up TrackEntrepreneur (BP) DNALeadership Priorities (Balance)Start-up Leadership AlignmentDevelopment Process (5 Steps)Development Challenges Start-up Problems Start-up Needs Start-up OpportunitiesBuild Business Model Business Performance Priorities Business Operations Priorities Foundation (Scheduled) InitiativesEvaluate External ForcesResource IdentificationDevelopment Funding Sources

DefenseRecovery TrackBusiness Operations DNALeadership Balance (Priorities)Recovery Leadership AlignmentRecovery Process (6 Steps)Survival Challenges Survival Problems Recovery Needs

Fix Business Model Business Performance Priorities Business Operations PrioritiesTactical (Immediate) InitiativesManage External ForcesResource AllocationRecovery Funding Sources

OffenseExpansion TrackBusiness Performance DNALeadership Balance (Priorities)Transition Leadership AlignmentTransition Process (6 Steps)Growth Challenges Competitive Needs Growth Opportunities

Expand Business Model Business Performance Priorities Business Operations PrioritiesStrategic (Planned) InitiativesLeverage External ForcesResource CommitmentExpansion Funding Sources

Common Concepts – Different Execution

Targeted Marketplace (Geographic Segment)The Demand Side

Targeted Marketplace (Geographic Segment)The Demand Side

Leadership (Stake Holder) DNALeadership Allocation (Self) or Balance (Team

Leadership Lifecycle Alignment

A Sustainable Organization ModelExternal versus Internal Balance

Targeted ConsumerCommunities

(Customer Segments)

Stakeholders - Community,

Media and Other Communities

BusinessPerformanceStrategiesFront-office

BusinessOperationsStrategiesBack-office

The Supply SideSupply Chain

Partner, AllianceProfessionalCommunities

The Supply SideSupply Chain

Partner, AllianceProfessionalCommunities

Society(Consumers)

Economy(Money)

Innovation(Technology)

Marketplace(Commerce)

Events(Environment)

Policy(Standards)

External Forcesof Business

Change

Today’s volatile business climate is a lot like a tennis match, challenges come at you pretty fast. Whether you are winning, losing or just starting out in business, SCORE can help you match point and win.

Regardless of business size, scope, type, or current situation, seasoned SCORE professionals leverage integrated solutions with years of life/work experience to give you an “advantage” in today’s challenging business environment.

Advantage SCORE . . .From Challenges to Solutions

VolatileBusinessClimate

The fastest tennis serve on record for menis 156MPH and 139MPH for women