De-Mystifying the Business Plan Security Canada Central 2009 October 21, 2009

“We don’t plan to fail, ....we fail to plan !” > 80% of businesses fail within five years > 80% of SME’s have no (formal) Business Plan. Most acknowledge the importance and value of having a formal, written down plan but believe it is complex and difficult. It doesn’t have to be....and plans are much faster and easier to prepare than you might think.....

Today’s Seminar Goal - Promote an understanding of the basics of business plans, and to dispel notions that they are difficult & complex Overview the purpose, and the basic components in plain language. Equip you to be able to build a plan in simple, understandable steps

Defining Terms Sales Dollar value of completed transactions, (also “revenue”, or “business volume”) Gross Profit Sales minus direct costs of a sale, (such as direct materials or direct labour). Operating Profit Earnings Before Interest and Taxes, the “bottom line”. Working Capital Cash tied up in the business ...Receivables, Inventory, etc. Marketing All the things a business does to find, attract, sell to and retain customers.

What is a Business Plan? A game plan for your business..... ..what you want your business to become, ..your goals, ..markets and environment, ..strategies you will use to compete and to succeed, ..resources you will need, ..a financial plan, ..specific tactics and actions, and ..measurements to keep track of progress.

Meant for YOU, not your banker NOT a “finance” document only To be used regularly Adjusted and updated ongoing Shared with your team, so you can work toward the same goals. Simple, practical and relevant, and ...YOUR creation!

Links to Ongoing Operations Most of us have goals or targets  “Operating Budgets” Budgets support some higher purpose. Business Plan defines the higher purpose...

Objections to Business Planning “It’s too hard and complicated.....” “ It takes too much time...” “ It’s all nonsense ....” “ It doesn’t relate to real life...” “It’s impossible to plan for all the things that happen to you in business...” “Things change too quickly for a Business Plan to be effective....” “Who can forecast what is going to happen in the future...?” “You need to be an accountant to do one...”

Why Do I Need a Business Plan ? Clarity Focus Solid Platform

Why Else Do I Need a Business Plan ? A plan on paper allows you to look at your own ideas, share them, to mould and improve them. It keeps you accountable for your own performance. You need to have a “battle plan” you can share with the troops. Bankers and Investors will typically want a solid business plan. With no plan you can get blindsided by the unexpected. If an owner without a written plan, indispensable to the business, dies, the business could die too.

Four Simple Questions: What business are you in, and what do you want it to become? Where are you today? How will you get where you want to go? How will you make sure it all happens?

QUESTION 1: What business are you in, & what do you want it to become?  VISION MISSION VALUES  STRATEGIC GOALS

External Situation Analysis Internal Analysis QUESTION 2: Where are you today...? External Situation Analysis Markets, trends, competition, regulation Internal Analysis Strengths, Weaknesses, Opportunities & Threats

QUESTION 3: How will you get where you are going? Strategy Cost leadership? Differentiation? Customer intimacy? Play to your strengths, take advantage of competitor weaknesses Marketing Plan Target Markets, Products & Services, Sales Promotion, Pricing Strategy, Channels Positioning

QUESTION 4: How Will You Make Sure It All Happens? Plan Resources  Financial Plan  Cash Needs Implementing  Goals & Action Plans Measurements  Tracking Communicating Delegating

Keeping It Simple, Short, & Practical Avoid “Analysis Paralysis” Limit the number of goals, action plans, and measurements. Fit your plan into 10 or 12 pages Get help, but make it your own Business Plan Get someone to hold you accountable.. Involve your team, delegate Track your activities & time spent; eliminate time wasters. Prioritize, focus.

References and Resources On Line Resources “One-Page Business Plan” ...www.onepagebusinessplan.com Banks Business Development Bank of Canada. Government Support