5 year business plan experts

5 year business plan experts

Strategic Planning for Sustainable Growth: A Comprehensive Guide to Developing a 5-Year Business Plan

1. Introduction to Strategic Planning

Strategic planning has become a familiar process in a large number of nonprofit organizations. “Organizations which fail to plan are planning to fail” is an adage which is much quoted; and, in many organizations, is now costumed. Yet strategic planning processes for nonprofits are, for the most part, adaptations of processes which have been developed in and for the private corporate sector. There is negligible literature which deals with the special problems, opportunities, and challenges of strategic planning in the third sector. It is a second fact that strategic plans for nonprofits tend to have a very short time-horizon. Three- and one-year strategic plans are the norm, and they have an operational rather than a decision-making function.

The relatively unstructured content of even the large sample of UK, Canadian, and USA plans should give us pause for thought. On the one hand, we know that we need to scrutinize more closely the reasons why strategic planning is a distinct process for the nonprofit as distinct from the corporate sector. We should expect, at this stage, that strategic plans for nonprofits will in many cases have a different time-horizon and a different balance of external and internal relationships. It is reasonable to suggest that corporate strategic plans are business plans for the near future, while nonprofit strategic plans should be organizational business plans for the medium-term future. In part, this now needs refinement, and the nature of the “business” approach may need to be “nonprofit” rather than private-sector-business comprehensive. At the very least, however, an initial hypothesis should emerge from an intuitive recognition that the nonprofit strategic plan is typically underdeveloped in key areas and has an unrealistically short time-horizon. Before we can define with any precision the nature of a nonprofit strategic business plan in contrast to that of a private-sector business plan, it is reasonable to reflect on the process itself.

2. Key Components of a 5-Year Business Plan

The key components of the 5-year plan can be summarized in the following list:

1. Introduction – Summary of the nature and goals of the business. 2. Mission and Vision Statement – Clearly articulated core principles of the business. 3. Business Philosophy – Description of core principles such as customer focus, cost effectiveness, and delivery of value. 4. Company Goals – Specific targets and objectives that are to be achieved. 5. Core Competencies and Key Success Factors – Fundamental means by which the business will achieve its objectives and the factors critical to its success. 6. Market Analysis – Describes external factors that characterize the overall market for the business, as well as business-specific features. 7. Competitor Analysis – Current and likely future state of competition in the same business sector. 8. Marketing/Sales Strategy – How the company will compete in the marketplace. 9. Product Development/Service Plan – Description of what products will be sold and how they will meet customer needs and wants. 10. Operations & Management Structure – Plans for integrating the company’s operations and human resources. 11. Organization and Key Capability Review – Description of capabilities in the context of business needs. 12. Financial Plans – How the company will sustain and grow the business.

These components are presented in substantial detail to enable a thorough analysis and effective strategy creation for the business.

3. Market Analysis and Competitor Research

A market analysis forms the basis for the rest of your business strategy. This chapter includes the following: • Determining your primary and secondary markets • Understanding your customers • Analyzing future growth and profit potential

Primary and Secondary Markets Your primary market segment consists of customers most likely to buy your support services. The segment includes businesses with 20 or more employees, which need more support services and have a better ability to pay than smaller businesses. These companies generally have more desktop computer systems and users than can adequately be served by a small internal help desk. A secondary market segment consists of companies with from 10 to 20 employees. In terms of size, these businesses fall between small offices that generally do not need regular technical support and medium-sized businesses that could use help desks but often cannot justify set-up costs.

Understanding Your Customers The best assurance of increasing success is an ability to serve support customers well. “I will keep my customers satisfied” is a key performance management goal. The more you understand your own customers, the greater the chance of success. Your support strength depends on several factors. Use honest self-assessment when answering these questions. • Do you and your support network have the ability to meet new challenges as they develop? • Do you understand your customers at a practical and useful level? • Do you understand your customers at a strategic and ethical level?

Analyzing Future Growth and Profit Potential The process of analyzing market growth potential includes: • Defining the potential • Adjusting to foreseeable trends Identify Target Market Growth Potential. List the specific growth areas with the greatest growth potential. Types of growth can include: • Raw expansion of support services – A certain market segment may contain a number of businesses set to grow quickly. Be prepared to offer cost-effective support as they grow. • Tactical/strategic growth – The dynamics of business growth cause many companies to rethink their policies about using external support. One such situation occurs when a company begins to grow beyond about 12 employees. One planning stage involves writing a one- or two-sentence business description for each target market representative. This description makes it easier to choose marketing and sales tactics for reaching “company customizing” purposes.

Adjust to Foreseeable Trends Prior to developing marketing and sales strategies for each target market area, managers factor in realistic forecasts for their cash flow. Adjust previous targets according to what you learn and write the outcome in a full cash flow description in either dollars or percentages. Remember the point is to prove the forecasted figures by providing specific documentation that backs up each area, just as in the description of your customer list.

4. Financial Projections and Budgeting

Now that you have articulated and marketed your services and products, described the target markets, and developed the necessary strategies to accomplish your goals, what, then, are the financial implications of this undertaking? What are the anticipated financial achievements for the next five years and what resources are needed to produce them? These are the questions to be answered by this section.

This section of the plan will be normalized around a five-year time frame. The first three years will be the most detailed. The last two years should reflect the expectations that the organization decides are the target objectives. These expectations can be growth limitations, leadership objectives, or any other achievement objectives the organization sets.

The first component of the financial analysis is to create the revenue model. Post the same information as was in the market analysis. Age, gender, income, and spending habits can be important factors in determining revenue generation. In the case of business development clients reporting that 10% of their current business is with women, but the projections for new business should be that 30% of the strategies developed are directed to the women’s market, a 300% increase. Advertising costs and design costs should also be increased to meet the new input level.

5. Implementation and Monitoring Strategies

While developing the strategic initiatives, assign responsibilities and deadlines for implementation to the appropriate individuals within your organization. Once developed, the strategic plan should be used as a tool in monitoring progress and the course for the future. Without a routine process to monitor the plan, the actual strategic planning process will lose its purpose.

– Basic Implementation Process: While formulating, state the strategies. Next, define action steps needed to achieve them. Assign responsibilities for these tasks to specific individuals within the organization. Implementation can now begin.

– Suggested Implementation Schedule: For each objective, list responsibilities and action plans. Develop a three-month plan. At the beginning of each quarter, review completed tasks. Adjust the implementation schedule of the plan as necessary to meet the objectives.

– Monitoring and Information Systems: Without adequate data, or someone to analyze it, there is no way to know if or how the organization is progressing toward its goals. Consistent and frequent feedback is essential for effective management. A financial and marketing/operational data reporting system customized to your business is the best means to measure results and process quality performance.