|
Is your business today where you want it to be tomorrow?
If the answer is no, then read the Vann Group Journal regularly to gain useful and actionable insights on transitional business issues. At the Vann Group, we define transitional businesses as those that are:
- Growing rapidly
- At a plateau
- In crisis
- In need of an exit strategy
This month our charge is to demystify and breathe life into the most useful yet dreaded business practices – Planning.
Have You RSSed?
Please remember that you can sign up for RSS feeds to automatically receive Mike Vann’s blog as well as new white papers and case studies from the Knowledge Center at www.vann-group.com. |
About the Vann Group
The Vann Group is a professional advisory firm that assists companies in transition to unlock their value. We provide practical business counsel to transitional companies through a customized approach that is founded upon our family’s passion for business and a 150+ year entrepreneurial track record. |
|
|
Demystifying Business Planning Confusion
Business Plans. Strategic Plans. Action Plans.
There is no shortage of consultants (ourselves included) advising businesses that they need to plan.
But, yikes. It sounds like a lot of planning. It’s no surprise that many business leaders wonder that with all this planning when they’ll have time to get “real work” done.
The truth is that when done well, sound business planning will enable you to:
- Secure needed capitalization.
- Craft a strategy to make your competition irrelevant.
- Create a productive and low cost operation.
- Make better decisions faster.
- Direct resources to the highest priority tactics.
- React quickly to changing market conditions.
So what types of plans do you need and for what purpose? We advocate three types of plans, and we explain them here, simply and concisely, to eliminate plan confusion.
The Business Plan
The primary purpose of the Business Plan is to secure financing. No funder - other than family, friends and fools – will give you money without a business plan.
A well written business plan precisely defines your business, identifies your goals, and serves as your firm's resume. It will give your funders the information they need to be confident that your business will succeed and their investment is safe.
The problem is that in many ways, business plans are similar to the American Idol. Everyone who writes one thinks it’s the greatest plan ever but the truth is that very few are good and it’s extremely painful for anyone who has to read a bad one.
Yet, it doesn’t have to be this way. Unlike the either you’ve got it or you don’t reality of American Idol, successful business plan writing can be taught, and it’s easier than you think. At the Vann Group, this is fact, and we stand behind it with our Business Plans 101 white paper, which you’ll find newly posted at www.vann-group.com. It’s the most basic and uncomplicated understanding of what’s good and bad about business plans that you will find.
The Strategic Plan
A well crafted strategic plan is a clearly defined and easily communicable document of ten or fewer pages that outlines the strategic initiatives that you will pursue to reach your goals.
At the Vann Group, we are proponents of using Blue Ocean strategy concepts, as defined by W. Chan Kim and Renee Mauborgne, to create a strategy that finds uncontested market spaces and makes your competition irrelevant.
In their best-selling book, Blue Ocean Strategy, Kim and Mauborgne, define Red and Blue Oceans this way:
- Red Oceans are market spaces in which a crowded market of competitors focus on fighting with each other. In red oceans, companies often invest in advancements that are only marginal advantages over the competition and therefore easily copied.
- Blue Oceans are uncontested market spaces in which successful companies find ways to create demand in areas that are ripe for growth. These companies find ways to create value for customers that others are not providing. And at the same time, they look for activities to reduce or eliminate that are not valuable to customers in order to become a lower cost operation.
You will find a primer on creating Blue Ocean strategy in our white paper entitled, “Make Your Competition Irrelevant” posted at http://www.vann-group.com/images/Competition_Irrelevant.pdf.
Action Plans
Very simply, action plans are the very specific steps that you will take to execute your Strategic Plan and reach the goals outlined in your Business Plan.
To be useful working documents, action plans must describe:
- Each action step.
- Its owner, or the person responsible for getting it done.
- The timeframe in which it needs to be accomplished.
Business Planning Payoff
The real payoff comes in using your strategic and action plans as continuous management tools and becoming a strategically focused organization that evaluates all decisions through a strategic lens.
Successful companies examine their strategy often to measure actual to expected performance and to understand the reasons for variances. They also review their strategic plan to identify any changes in their assumptions, the market, customer expectations, trends, etc. since the plan was written. Understanding these changes and their implications enables companies to proactively adjust strategies and action plans as needed. This ability to be proactive, strategic and nimble is critical to success.
In closing, we leave you with a thought and a question.
Thought: Good business planning is the “real work”.
Question: Do you think that newly reappointment Starbuck’s CEO Howard Schultz was looking through his strategic lens when he approved the test marketing of an 8 oz cup of Starbuck’s coffee, with FREE refills, for $1? If you haven’t heard the news, check out Mike Vann’s 1-26-08 blog post at http://www.vann-group.blogspot.com.
If you have any questions about anything you’ve read in this edition of the Vann Group Journal, please call:
|
