Business Plan MethodsPhilip L. Carpentier

Carpentierp@asme.org

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Background:A business plan is a document. It is a tool with three basic purposes:

management, planning, and communication. The business plan helps you decide what you will do and then track, monitor, and

evaluate your progress.

Session Objectives:• Review the essential elements of a good business plan.• Learn how to use business planning for improved Section or Division or

Affinity Group management and operations.• Establish a process that you can use to write a good business plan and keep it

up-to-date.

Business Plans for ASME Sections and Divisions

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ASME - Business Plans

• Why? – Builds common understanding between you and your volunteer

leadership team.– Helps you to communicate effectively with volunteer leaders,

members and prospective members, and get them excited about the products and services that you are offering.

– Fosters continuous improvement.– Allows your Unit to decide on the top priorities and stay

focused on those priorities. – Once done, having a business plan for ‘your Unit’ reduces the

complexity of ‘your job’ in ASME.

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ASME - Business Plans

• Goal – It is highly recommended that each ASME Unit

have a Business Plan.– Each ASME Unit should have a process in place to

keep the Business Plan up-to-date.

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Essentials of a Business Plan

Every business plan should include these parts:• Part 1: Executive Summary• Part 2: Market Analysis• Part 3: Section / Division / Affinity Group

Organization and Management• Part 4: Marketing• Part 5: Services and Products• Part 6: Finances

• Appendices

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Part 1. Executive Summary• Mission Statement• Background information (readily available from

asme.org)– Date that the Section or Division or Affinity Group began, or

was chartered– Number of Members– Brief description of ASME

• Also, include listing of local Subsections, Groups, Student Sections, and Technical Chapters, if any

– Non-profit 501(C)(3) organization status

• Summary of accomplishments from the past year• Summary of future plans

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Part 1. Executive Summary

• For SECTIONS, also include:– Section location and boundaries– Also, include listing of local Subsections, Groups, Student Sections, and

Technical Chapters, if any– Listing of local industries that are engineering employers

• For DIVISIONS, also include:– Listing of Technical Group affiliation, and other ASME Technical

Divisions in the Group– Listing of key annual events such as Technical Conferences sponsored or

co-sponsored by the Division– Listing of ASME Technical Journals sponsored or supported by the

Division– Listing of Technical Chapters, if any

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Part 2. Market Analysis

• Identify your “Target Market” or Customers– Members

– Student Members

– Prospective Members

– Other Engineers

– Government officials

– Employers of Engineers

– Others? (K-12, High School Science Teachers, local Universities, etc.)

• Don’t try to be everything to everybody!

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Part 2. Market Analysis (Cont’d)

Characteristics of the ‘Target Market’• Critical needs of potential customers.• Degree to which those needs are (or are not) currently being met.• Demographics of the group.• Identification of major decision makers among your potential

customers (Company owners, CEO’s, Vice Presidents, etc.)• Size of the potential market for products and services.• Opportunities for membership growth.• The extent to which you think you can reach your Target Market.

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Part 2. Market Analysis (Cont’d)

• Do you need help finding information about your target market? – What ASME resources might be available to help?

• Analysis– What are the current “hot topics”?– What skills are needed? What do industry leaders wish their

employees would know how to do?– What have you been doing in the local ASME Section or

Division? What has worked well?– What is your competition doing? Results?

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Part 2. Market Analysis (Cont’d)

• Lead Times– How quickly does your Section or Division respond

to requests from Members, prospective Members, and/or Industry Leaders?

– What should the lead time be? – What will the lead time be?

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Part 2. Market Analysis (Cont’d)Primary factors that will make your ASME Unit a success: • Superior ability to satisfy customer needs.• Products and services that enchant the members and

prospective members.• Efficient and convenient methods of delivering products and

services.• Excellent communications.• A good track record and reputation.• Good location. • The People! The volunteer leadership that you are able to

attract and retain.

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Part 3. Organization & Management

• Section / Division / Affinity Group Officers, plus:– Advisors, Committees, Committee Chairs,

Committee Members, etc.– With well-defined roles and responsibilities.– Focused on delivering on the business plan.– Supported by ASME District, Group, and K&C

Leadership.

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Part 3. Organization & Management

• Let everyone know about these great people!– Provide brief biographical sketches or résumés on

your key volunteer leadership.– Take full advantage of the ‘unpaid advisory board’.– A list of well-known, successful business owners /

managers will enhance your Unit’s credibility and perception of expertise.

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Part 3. Organization & ManagementASME IPTI (International Petroleum Technology Institute) –

Board - 2011 - 2012Chair

• Ken Bayne, BG Norge, Stavanger, NorwayEmail: Ken.Bayne@bg-group.com

VP Institutes

• Dick Williamson, T.D. Williamson, Inc., Tulsa, OklahomaEmail: Dick.Williamson@tdwilliamson.com

Board Members

• Joe Paviglianiti, National Energy Board, Calgary, Alberta, Canada

• Phil Collins, Bechtel Offshore, Houston, Texas

• Pat Vieth, BP Exploration & Production Company, Houston, Texas

• John Halkyard, John Halkyard & Associates, Houston, Texas

• Mamdouh M. Salama, Ph.D., ConocoPhillips Company, Houston, Texas

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Part 4. Marketing & Sales Strategy

• “Marketing” is often defined as the process of creating customers.

• “Marketing strategy” can include:– Strategy for growing the Unit’s membership– Plans for delivering your products and services– Venue– Communication strategy

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Part 4. Marketing & Sales StrategyWhat methods will you use to reach your target audience?• Newsletters, website, e-mails, IM• Direct contact• Direct letters• Company focal points?• Local newspapers, radio, television? • Local ASME Student Sections and Universities?• Phone calls? Phone “trees” (dividing the work up between

many hands)?• Other methods?

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Part 4. Marketing & Sales Strategy

Websites can be your primary, but not your only communications tool.

• Need a volunteer ‘webmaster’.• Must keep the information current, the content new.

Warning: An out-of-date or unimpressive website sends an extremely powerful communications message.

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Part 5. Services and ProductsSection or Division Programs and Activities:

•Scholarships & Grants•Campus Visits•Radio Shows•Government Outreach•Crawfish Boil•Christmas Dinner / Dance•Engineering Week•10K Run•Honors and Awards•Interpersonal Skills•Design Contests•Student Internships

•Meetings•Conferences•Training Courses•Plant Tours•Trade Shows•Science Fairs•Job Fairs•K-12 School Programs•“Webinars”•Motivational Speakers•Early Career Programs•Technical Journals

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Part 5. Services and ProductsSection or Division Programs and Activities:

2008 ASME Crawfish Boil Brochure

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Part 6. Finances – Revenue Sources• Proceeds from Programs and Activities, Conferences, and Events• Fund-raising events• Trade Shows• Ad Sales for Section or Division Newsletter• Direct solicitation of contributions

– Corporate sponsorships

• ASME Development Fund Grants• Other Sources of Funds?• Funds from ASME:

– Revenue sharing from ASME Congress or ASME Technical Journals– Merit-Based Funding for Sections– Funds for Section Rejuvenation or Revitalization– Earl Fisher Award Funds

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Appendices• Bylaws and Operating Guide• Résumés of key volunteer leaders and Section advisory

board members• Non-profit organization letter from IRS• Listing of Honors and Awards bestowed by the Section

or Division or Affinity Group, and rules associated with the awards

• Details on scholarship and grant programs offered or administered by the Unit

• List of Unit-owned property or assets (e.g., projectors), and custodians for the assets

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Review Question!

What are the six essential parts of a Business Plan?

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Essentials of a Business Plan

Every Business Plan should include these parts:1. Executive Summary2. Market Analysis3. Section Organization and Management4. Marketing5. Services and Products6. Finances

Appendices

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Business Planning Process

1. Write the business plan. 2. Critically review the business plan

• Identify opportunities to improve the plan.• Remove internal weaknesses or flaws in the plan.• Test the plan against ASME Mission, Vision, and Balanced

Scorecard, K&C Strategic Priorities, as well as Section / Division Bylaws

• Obtain ‘buy in’ of key volunteer leaders and stakeholders.• Will the Section / Division be successful? Will people have fun

doing this?

3. Issue the plan.

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Business Planning Process (Continued)

4. Operate under the plan.5. Measure successes and identify opportunities

for improvement.– How do you measure success?– What are your metrics?

6. Revise the business plan. (Annual updates are a minimum!)

7. Return to step 2 and continue.

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Business Planning Process (Continued)

2. CriticallyReview the

Business Plan3. Issue the Plan

4. Operate Underthe Plan

5. MeasureSuccesses and IDOpportunities to

Improve

6. Revise theBusiness Plan

(Annual updatesat a minimum!)

7. Return toStep 2

and Continue

1. Write theBusiness Plan

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Summary • Reviewed the essential elements of a good

business plan.• Learned how to use business planning for

improved management and operations of Sections or Divisions or Affinity Groups.

• Established a process that can be used to write a good business plan and keep it ‘evergreen’ (that is, ensure periodic review and updates to the plan).

Business Plan Methods for ASME Units

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For more information . . .

• “Creating a Business Plan”

– Harvard Business School Press, Pocket Mentor (Paperback - Nov 19, 2007).

• “Business Plans For Dummies”– by Paul Tiffany and Steven D.

Peterson, PhD (Paperback - Dec 31, 2004).

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Business Plan Methods for ASME Units

• Questions?

• Comments?

• Examples to Share?

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Business Plan Methods