Business Planning for the not so weak-of-heart. Building Materials Reuse Association. Madison, Wisconsin May 14, 2007

Transcription

1 Business Planning for the not so weak-of-heart Building Materials Reuse Association Madison, Wisconsin May 14, 2007

2 Sustainability You can t help anyone or anything, including yourself, if your business is not sustainable.

3 First, The Bottom Line A business plan is simply a document that answers the following questions: Where are we now? Where do we want to be? How do we get there? What does it cost? and usually covers the next 3 to 5 years and in rare cases up to 10 years.

4 A Good Business Plan Is a guide a communication piece a management tool a foundation It is not a dogma a dust collector a thing someone else requests something someone else wrote

5 Why Plan? Following a plan allows more time to use your creative talents to growing the business It increases your management effectiveness with others they know what to do tomorrow and next month without constant supervision Helps measure your performance and that of others Enables managers to adjust to, and address new risks and opportunities

6 Examples of Planning Grant at the battle of Chattanooga Unbuilding Chapter 4 Getting Started page 104 This presentation

7 Fiction Types of Business Plans Strategic usually for venture capital Operating generally for internal use I know what my plan is it s in head!

8 The Optimal Plan A combination of strategic and operating plans Begins with a one sentence strategic statement followed by major milestones or goals the plan is then written on how to accomplish them Written by the boss - take responsibility Reviewed by your board what do others know? Updated at least annually Existing companies must forget legacy systems

9 Let the Work Begin Remember the strategy as you describe how the milestones or goals will be achieved Write as a stream of consciousness Then rewrite so it makes sense Then edit two or three times

10 Anatomy of a Business Plan Company background or history Mission and strategy Multi-year goals Market Rationale the what and why of demand Marketing the who, how, where and when of attracting customers Operations how do you deliver what you sell Finance how do you pay for it Appendix charts, graphs, financials, forecasts

11 Background (Where are we today?) Brief history or status of the company Present markets served Summary of existing operations 1 to 3 pages in length

12 Mission & Strategy (or getting from Vision to Strategy) SomeONE has to be the visionary The mission capitalizes on your vision takes real work The strategy is one or two sentences on how you will accomplish the mission

13 Multi-Year Goals (Where do we want to go?) Revenue by year Branches by year Number of deconstruction projects by year Tons salvaged by year Average sale per customer by year 1 to 2 pages in length

14 The Heart of the Plan (How do we get there?) Hint: Through market demand, marketing, operations and finance While writing, remember to keep the strategy and yearly goals in mind

15 Market Rationale A clear and concise statement regarding the environment in which the organization is operating In short, it this section answers the questions, What is causing the demand for our product or service and why? 2 to 3 pages

16 Economic/Market Forces Political Forces Your Organization Social Forces Technology Forces

17 Marketing (the who, how where and when of attracting customers) Description or profile of your customer(s) Market size in quantitative measures Competitive analysis Who are the competitors by name What is their offer Their competitive advantage What is your competitive advantage Quantitative market penetration 5 to 8 pages

18 Marketing (the big 5) Each of the following need to be explained in terms of how they support your competitive advantage and achieve your defined market penetration Description of product/service & its benefits Pricing Advertising & promotion Selling Physical distribution 3 to 5 pages

19 Operations A description of the firm s structure, including: How this ensures the goals/milestones will be met A description of key personnel and their function A training section - especially if you are considering deconstruction 2 to 4 pages In the Appendix, add: Functional organizational charts by year A hiring schedule by function with compensation

20 Finance (not accounting) Describe how the firm will pay for its growth up to the point of break-even - sustainability: Equity from whom Debt long-term notes, line of credit Grants from where Marketing drives finance The finance person better be a good marketeer 1 to 2 pages

21 Financial Statements Include in the Appendix: Annual historical statements if any Balance sheets Income statements Proforma income statements By month for the for the 1 st year or breakeven Annual for each year of the plan

22 Annual Revisions Remember, your plan is not a dust collector. Each year add new operating goals which support the annual corporate goals written at the beginning of this process Don t forget to communicate the original plan and each annual revision to your key people

23 Persevere Never Never Never Never Never Give up