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Get started NowTHE DETAILED

BUSINESS PLAN

PART -III ‘A’

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TABLE OF

CONTENTS >>

SECTION 3.1

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THE DETAILED BUSINESS PLAN TEMPLATE

Executive Summary ............................................................................... 09

Web Analysis ........................................................................................... 55

Background .............................................................................................. 17

Competitor Analysis .............................................................................. 61

Organisational & Management ........................................................... 123

Sales Analysis .......................................................................................... 25

Swot Analysis .......................................................................................... 71

Financial ................................................................................................... 129

Market Analysis ....................................................................................... 33

Objectives ................................................................................................. 75

Production ............................................................................................... 133

Marketing ................................................................................................. 91

Shareholder, Investor, Exit & Succession Strategy....................... 81

The Roll-Out Plan .................................................................................. 139

Monthly Evaluation Sheet ................................................................... 149

The Financials ........................................................................................ 157

Market Profile ............................................................................. 37

Promotion .................................................................................... 97

Management Budget ................................................................ 161

Key Milestones & Responsibilities ......................................... 141

Evaluation Sheet - Tasks ......................................................... 153

Benefit Analysis ......................................................................... 45

Pricing ........................................................................................... 111

Cash Flow Statement ............................................................... 165

Detailed Segment Analysis ..................................................... 49

Distribution ................................................................................. 115

Income Statement .................................................................... 169

Product (Service) ...................................................................... 119

Balance Sheet ............................................................................ 173

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Section 3.1

The Detailed

BUSINESS PLAN TEMPLATE

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Section 3.1

(YOUR COMPANY)

DETAILEDBUSINESS PLAN201A-202D

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Section 3.1

EXECUTIVE SUMMARY01


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01 EXECUTIVE SUMMARY

PROVIDE A GENERAL OUTLINE OF YOUR BUSINESS.

WHAT WERE YOUR SALES LAST YEAR AND OVER THE LAST FEW YEARS? HOW WELL HAVE YOU PERFORMED? IF YOU ARE NOT PERFORMING TO BUDGET, INDICATE WHY NOT.

The Executive Summary is an overview of the entire business plan, normally completed after the remainder

of the plan has been written. It is a concise summary of exactly where the business is headed. If you are

presenting this plan to outside institutions or organisations you will need to describe your business in detail. If

you are presenting to senior management or using it as an internal document you only need to highlight the

more important aspects of the plan.

Include things such as when you established the business, why you established the business and a description

of your goods or services.

This provides a background to past performance and a lead-in to the future. For instance, you could include

something like “Although our sales have increased by ten percent a year, we have never really taken advantage

of the opportunities offered”.


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WHAT PROOF CAN YOU PROVIDE THAT YOU WILL ACHIEVE THIS LEVEL OF SALES AND PROFITS?

WHAT ARE YOUR PROJECTED SALES AND PROFITS?

This is the bottom line. How much profit are you going to make? If you are presenting this plan to investors mention the expected annual return to them. (For a more detailed explanation on the financials, see the section devoted to this topic, elsewhere in this manual.

Supply proof that there will be a demand for your goods or services. Do you have any advance orders, existing

customers that have promised to use your goods or services, market research surveys or sales experience

that implies a natural growth in the market? Do you have evidence of any external factors such as changes in legislation, competitor status or cultural influencers that will lead to a demand for your product or service?List anything that re-reinforces the proposition that you will be successful. For instance, it may be useful to

mention here any large orders you have received in the past, or even profile some of your existing customers. This could help to add credibility to your business.

Last Year This year 20 20 20

Sales

Gross Profit

% Gross Profit

Net Profit


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WHAT ARE THE UNIQUE FEATURES OF YOUR BUSINESS’S PRODUCTS OR SERVICES?

WHO WILL BUY YOUR PRODUCTS OR SERVICES, AND WHY?

HOW WILL YOU POSITION YOUR PRODUCT OR SERVICE AGAINST YOUR COMPETITORS?

Discuss any major product advantages that give you an edge in the market. Home delivery gave Domino Pizza

a competitive product advantage. Manufacturers in the computer industry are constantly racing each other

to produce the smallest and fastest computer on the market. Does your company have a product that is more

environmentally friendly?

Later in the plan you will discuss what types of people or segments of the market will buy your product or

service. Segmentation analysis is critical to the preparation of a good plan. Look at the section elsewhere in this

manual that gives examples of how to segment. In this box list the people or the segments of the market that

you intend to target with your product or service.

Explain why you will win. Is there a gap in the market? What are your competitors doing compared to what you are doing, or intend to do? Later in these templates we have provided more examples of different types of gaps in the market. Think about your product. Do you offer the lowest price, the best product, the friendliest

service?


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WHAT ARE THE MAJOR THINGS THAT YOU WILL NEED TO ACHIEVE IN ORDER TO MEET THESE FINANCIAL RETURNS?

MARKETING STRATEGY HIGHLIGHTS:

PRODUCTION STRATEGY OR RETAIL STRATEGY HIGHLIGHTS:

PRODUCTION STRATEGY OR RETAIL STRATEGY HIGHLIGHTS:

This is a brief outline of all the things to come. E.g. “We will increase our advertising expenditure, invest in a

new machine, improve our distribution by appointing a freight agency and better target our product to the

consumer based on the results of our market research campaign”. If you are applying for funding for capital

expenditure highlight what the funds will be used for.

Product Positioning

General Marketing Strategy

(depending on the type of business you are in)

Number of new employees

Training

Systems and Reporting


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FINANCIAL STRATEGY HIGHLIGHTS:

INVESTOR OR SHAREHOLDER STRATEGY HIGHLIGHTS:


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Section 3.1

BACKGROUND02


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02 BACKGROUND

WHAT BUSINESS ARE YOU IN?

DATE OF ESTABLISHMENT?

LOCATION

If you are preparing this plan for internal use there is no need to explain your date of establishment and the

preliminary details. This is merely to provide outsiders with a profile of your business.

Try and summarise your business. It is essential that all businesses define what business they are in or what the major benefit is which they provide to their customers. Try and look at the benefits, not the actual product. For instance, petroleum companies do not see themselves in the business of supplying petrol but in the

business of supplying energy. Their whole future planning strategies are based on this principle which is why

they diversify into LPG gas, electricity and other alternate fuel sources.

If presenting this plan to an outside institution the number of years you have traded may add to your

credibility, especially if you can indicate that you have survived through a recession.

Location could be an essential ingredient of your success. If you are a retailer, for instance, it is crucial to your

success. If you are a distributor or manufacturer your position near transportation, parking and proximity to

your market are all important factors that will add to your credibility.


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02 BACKGROUND

NUMBER OF YEARS IN BUSINESS?

METHOD OF TRADING? ARE YOU A SOLE TRADER, PARTNERSHIP OR INCORPORATED COMPANY?

PROVIDE A DESCRIPTION OF YOUR PRODUCTS OR SERVICES.

If presenting to outsiders, such as banks or investors, this could provide your business with more credibility.

If this is being presented to outsiders explain in detail. If for internal use simply profile the most important elements of your product or service.


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02 BACKGROUND

SALES FORECAST

Where are you now and where are you headed, in financial terms? From this global figure budgets can be set and expenditure allocated to finance your whole business planning program. To an outsider these figures will indicate whether or not your company is a good investment and whether or not they should lend you money.

(See the chapter on financials for an explanation of how to calculate these budget projections.)

Last Year This year 20 20 20

Sales

Gross Profit

Net Profit

Average sale per transaction

Number of employees

PROJECTED SALES GRAPH

Graphs enhance your presentation. They are not difficult to do. If you have not got a computer fill in your sales (or profit) figures on the graph below and join them with a line to show the trend.

Sales

20XX 20XX 20XX 20XX


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02 BACKGROUND

WHAT ARE THE UNIQUE FEATURES AND BENEFITS WHICH MAKE YOUR PRODUCTS OR SERVICES STAND OUT? PROVIDE A MORE DETAILED DESCRIPTION OF YOUR PRODUCTS OR SERVICES IN THIS SECTION.

WHY WILL YOU BE SUCCESSFUL?

Are your products and services better priced? Have you established a niche image? Are your products better than your competitors? Can you supply more quickly? Are you more reliable? List any unique factors that you could use to create a competitive advantage.

List testimonials, key accounts that will trial or currently use your product or service, market research or any

general market feedback.


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02 BACKGROUND

LIST YOUR MAJOR CUSTOMERS. THIS ADDS TO THE CREDIBILITY OF YOUR BUSINESS.

MANAGEMENT EXPERIENCE

Even if you are preparing this plan as an internal document it is worthwhile listing your major clients. You could

be surprised at the number or type of high profile customers that have already purchased from you. Can this list of customers be used in your selling efforts? For example, mentioned in brochures or in advertising cam-

paigns. If this document is being prepared for a bank or outside institution this list could add credibility to your

business.

(Profile the background and experience of your managers and senior employees. Highlight skills or experience that they have in your line of business. Whilst doing this you may realise that you have a deficiency of skilled personnel in a particular area.)


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02 BACKGROUND

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Section 3.1

SALES ANALYSIS03


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03 SALES ANALYSIS

A sales analysis is actually part of your business analysis, however it is so essential to planning it should be

included as a separate section. It is important to analyse your sales by product or service type on a regular

basis. If you cannot do this it points to a major weakness in your business.

If you find it difficult to break down sales by product, by geographical area, by sales rep, etc. you have a major problem which should be addressed immediately. If your current accounting or computer programs are unable

to do this it could cost too much money and man hours to physically sort through past records. In that case

you must introduce some method of evaluating your sales by category in the future. Most modern accounting

programs have facilities to record sales rep codes on invoices. Instead of just using these codes for sales reps

you could use them to record that an order came through a magazine, from direct marketing, or perhaps

use the codes to denote that the invoice is for a type 1, type 2 or type 3 customer. This could even be done

manually. There are normally ways around inputting the information so that you can review your business

more effectively. The easier the reports are to produce the more likely it is that you will review on a monthly

basis and maintain control over your business.

To start off, review your sales by product category and indicate what the future sales potential is. This

sometimes indicates that your sales effort is not being directed correctly.

List the current revenue earned from each major product or service that you sell.

Sales % Total Sales

Product High Medium Low

Future Sales Potential


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03 SALES ANALYSIS

LIST EACH PRODUCT OR SERVICE AND LOOK AT YOUR SALES TRENDS.

This area of analysis is critical to future planning. Often your sales trends are not noticeable until you sit down

and actually review what is happening. Force yourself, or managers, to explain why your sales are increasing or

decreasing. This analysis may lead to the development of objectives and strategies in your plan. For instance,

if your sales were down because of a late delivery by a supplier that left you out of stock, you may need to

include in your objectives some changes to your current ordering procedures. If the plan is being presented to

senior management or outside organisations this section may be used to justify why your sales deteriorated.

Most people assume the worst when they see a decline in sales.

No matter what the reason, information concerning sales fluctuations should always be documented. It is sur-prising how quickly all the individual factors that have affected sales in the past are forgotten.

Product or market category (List the major product or service you offer)

Total Sales% $

Number of units

Average Sale Price

Trend(+ -)

Reason (Explain why your sales for this product are increasing,

decreasing or stagnant.)


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03 SALES ANALYSIS

REVIEW YOUR SALES BY MARKET SEGMENTS

Ideally, you should be able to review sales by market segment. Remember that one of the major philosophies

behind preparing a good plan is to analyse what the customer’s needs are and then try to satisfy them. The

form below lets you analyse which segments you are currently selling to and whether or not you go out of your

way to sell to them. Often, business managers will discuss major segments that are growing, talk about selling

their products or services to these segments and then forget to construct promotional programs to specifically target them. Having a product that meets these people’s needs is not enough. Individual promotional cam-

paigns should be developed for each segment.

If you can’t break down your sales by segment make an estimate of what percentage of your sales are made to

each segment and what the relative trends are.

Product (Product Group) ...............................................................

* Segmentation analysis is critical to good planning. See the section elsewhere in this manual which explains

segmentation. DO NOT IGNORE SEGMENTATION - IT IS CRITICAL TO GOOD PLANNING.

Segments(by geography, age, sex, profession etc)

Sales to this

segment

% of total sales

Have you directed promotional campaigns

specifically to this segment?

Your Sales Trend (+ -)

Reasons


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03 SALES ANALYSIS




Sales to this

segment% of total

sales




Reasons


Sales to this

segment

% of total sales




Reasons


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03 SALES ANALYSIS

SUMMARISE YOUR SALES BY YOUR BIGGEST CUSTOMERS AND NOTE WHICH SEGMENTS YOU HAVE BEEN PREDOMINANTLY TARGETING.

Most businesses, to some extent, conform to the 80/20 rule. I.e. 80% of revenue is derived from 20%

of customers. It could also apply to other departments. I.e. 80% of overdue debtors come from 20% of

customers, etc.

There are many ways that this may affect your planning. Here is one example. A company with a fairly large

database of customers decides that they want to do a sales promotion to increase their rapport with existing

customers. They decide that they can afford to spend about $2.50 on each customer which would buy, for

instance, a coaster. After analysing their customers by the 80/20 rule they realise that the most important

customers are well worth spending money on but the others are one-offs or smaller purchasers. Using the

same sales promotion budget they could decide not to spend the $2.50 on each customer but rather spend

$100 on the top 20% of their customers. This would probably have a far more positive impact on the business.

The profile of the top 20% of your customers should also be analysed in terms of winning new business. What are the characteristics of these larger customers and how can you target your promotions to win more of these

types of companies?

Who are the Top 20% of your Customers?What type of customer are they?

How can you win more customers like these?

20% of your Customers 20% of your Revenu


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03 SALES ANALYSIS

ARE THERE ANY SEASONAL OR OTHER FACTORS THAT AFFECT YOUR SALES CYCLE? IF SO, DESCRIBE HOW THIS HAS AFFECTED YOUR BUSINESS IN THE PAST AND HOW YOU WILL HANDLE THIS IN FUTURE YEARS

Fluctuations in sales may occur on a yearly basis - E.g. Christmas period for retailers. A weekly basis for

example, Tuesday night trade for a restaurant. Or a daily basis for example, lunch time rush for a sandwich

shop.

Businesses should develop strategies to reduce the effects of these fluctuations. The most obvious example is a shop that specialises in swim and surf gear. Obviously, during summer sales will be high but during winter

they will be low. As a strategy the shop may decide to add a line of ski wear during the colder months.

Many businesses may not be able to add new product lines but may take action such as reducing stock, limiting

the number of creditors due to be paid during this period, speeding up the collection of overdue accounts

or perhaps reducing advertising. During boom periods the business must make sure that they have enough

products to supply the market and available staff and resources to handle the increase in business.

Recent studies of advertising during recessed periods seem to suggest that, in terms of advertising dollar

effectiveness, a company is better off NOT increasing advertising during low periods when consumers do not

want the goods but increasing advertising during the boom periods to increase sales which will offset the low

periods. Of course, all strategies depend on the individual business and the types of initiatives needed to lure

consumers to buy during the low periods. Cinemas have been successful by offering discount movie tickets on

a Tuesday night, restaurants by offering specials in non-peak periods and resorts by luring tourists during off-

peak times with price specials.

Sales Fluctuations

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MARKET ANALYSIS04


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04 MARKET ANALYSIS

Previous sections have looked internally at your business - now it is time to look at your market. What market

are you selling your products or services to and is this market growing? Can you divide this market up into segments and which segments will you target your products or services to?


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04 MARKET ANALYSIS

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Section 3.1

MARKET PROFILE04.1


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04.1 MARKET PROFILE

Explain who will buy your products or services. Is this a good, strong, growing market or is it declining? If it is declining you should consider diversifying into other markets.

Sometimes the figures on total market size are irrelevant, especially when a business is only a small fish in a very big pond. For instance, a Plumber who has just set up shop will probably get no help from knowing the

size of the total Plumbing market. However, if he is a one-man plumbing business in a particular suburb and

specialising in a particular area, it would be worthwhile him knowing how big the market is in this area, how

many competitors there are and how many specialise in the same area as he does.

Determine what information will be useful to the business and then try and collect it. One of the questions that is asked most often is how to go about establishing how big the market is. Here are a few suggestions. Contact

the Association that relates nearest to the business’s product or service. For example, if selling manufacturing

equipment, contact the Chamber of Manufactures of your State or a similar Association and ask them how many manufacturers there are. Qualify this further by doing library research into industry publications,

magazines and reports. A surprising amount of market statistics is available.

In the case of marketing a toy, first of all define what age group would want to buy the toy and then contact the Bureau of Statistics (or appropriate government body in the area) and find out the total number of children in this age group, by region. These government databases have become so sophisticated that they can generally

break down their statistics by region. This is particularly useful for retailers who need specific geographical breakdowns to establish the viability of potential locations. McDonald’s is a good example of a company that

spends a lot of money on researching a particular location before committing to the considerable investment

of establishing a new store.

WHAT IS THE TOTAL MARKET SIZE AND MARKET SALES TREND FOR YOUR PRODUCT OR SERVICE?


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04.1 MARKET PROFILE

Another way of determining the size of the market is to ask the actual customer or an experienced buyer. If a

new type of product is to be sold to other businesses approach the purchasing officers of some of the major companies and ask them how many units they would be likely to buy. Extrapolate this figure to the rest of the market. Similarly, for a new type of car wash, conduct a survey of car owners to find out how often they wash their car and then multiply the average figure by the number of car owners.

WHAT GENERAL MARKET TRENDS WILL AFFECT YOUR BUSINESS?

It is very important to know, and be able to recognise, the trends and the external factors that will affect

the market, so you can assess whether or not your business will be viable in the long term. Are there any

cultural, legislative, social, environmental, technological or other influencers that may affect your business? For example, technological influencers have made typewriters, telexes and buggies almost obsolete. Environmental and social issues have seriously affected the plastics industry by forcing companies who were

using plastic-based packaging to find alternatives. There are trends in the market for a healthier low-fat lifestyle. The hat market will increase in coming years because of the increasing fear of the deteriorating ozone

level. Look at your product and market and assess whether there are any potential threats or opportunities

that will affect your planning.

What are the general market trends?What strategies will you need to implement or

maintain to take advantage of these trends?


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04.1 MARKET PROFILE

Here are some examples of market gaps.

A gap by geographical area: Perhaps no-one in the town, suburb, state or country is offering this product or

service. For example, although Coca Cola is a common product sold just about everywhere, Nippon Soft Drinks

Inc might find a gap in the market because no-one markets Coca Cola or any other soft drink to remote areas of China.

A gap by segment: perhaps no-one is offering the product or service to a particular segment. For example,

recently a number of resorts have been established for quadriplegic and paraplegic holiday makers. These resorts have specially designed facilities and nurses to ensure that these people have a pleasant holiday.

This is a good example of offering essentially the same product (a holiday) to a different market segment

(quadriplegics, paraplegics). Johnson & Johnson, who traditionally sell baby shampoo to toddlers, are now targeting the older generation with the same product and offering a gentler alternative to what they have

become used to.

A gap by specific product targeting: sometimes a business can alter their product slightly to meet the needs of a specific segment. A good example is the cruise ships & hotels that offer dive courses or golf lessons as part of their package. These companies saw that there was a large demand for people who wanted not only to go

on holidays but to use this time to learn or improve their sport. The above example of resorts for the disabled

could also fit into this category.A gap through promotion: there could be a number of products competing in the same market, generally

offering the same benefits, but one company promotes one particular product benefit more than the others. The consumer may purchase this product because they think it is the best in this area. This type of gap is often

related more to customer perceptions than it is to reality. The best way to achieve this is to ask the customer

what they want most from a product and then clearly, simply and strongly include in all promotional literature,

sales presentations and advertising that the purchase of this particular product or service will result in this

benefit. (That is, of course, provided this benefit can be delivered - Don’t be dishonest or misleading.) A gap through innovation: is the product or service so superior that the gap is in product superiority? Does it offer the best, the fastest, the most powerful, the cheapest or the most efficient? For example, ballpoint pens, faxes and colour televisions were significant improvements on previous products.

There are many other types of gaps - list those applicable to your product or service.

IS THERE A GAP IN THE MARKET FOR YOUR BUSINESS’S PRODUCT OR SERVICE?


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04.1 MARKET PROFILE

List the major market segments for your product

or service

What is the size of the market segment?

Is the segment increasing or decreasing?

What external factors are likely to affect the

segment in the future?


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04.1 MARKET PROFILE

Make sure that you don’t miss out on any opportunities. Scroll through the list below. Almost all of these

criteria could be used to break down your market into market segments. The trick is to choose the criteria that

will best enable you to plan. When you choose a method to break up your market, think through whether or

not it will help you develop a promotional appeal, a distribution policy, a product to sell or a price to charge. See

the examples elsewhere in this manual under the heading “Segmentation”.

HAVE YOU SELECTED THE BEST POSSIBLE MARKET SEGMENTS?

Segmentation Parameters

Example of Possible Segments Selected Target

Age Toddler Child Teenager Adult Under 25 25-35 35-65 65+

Sex Male Female

Occupation Professional Craftsman Farmer Tradesman Receptionist Student Accountant Homemaker Doctor Senior Manager Other

Family Life Cycle Single Married Divorced Elderly Married - children under six Married - children over six Married - children left home Other

Income Under $25,000 $25,000 - $35,000 $35,000 - $50,000 Over $50,000

General Industry Type

Small, medium, large business.Government, public and private sectors.Industrial, consumer and other markets.

Specific Industry Financial, Professional Services, Trades, (Plumbing, Mechanical, etc), Computer, Marine, Electrical/Engineering, Railway, Rubber, Chemical, Food & Agricultural, Liquor, Other.

Geographic Europe, Asia, Africa, North America, South America, Austral-asia and Pacific Regions, Middle East, other.NSW, VIC, QLD, TAS, SA, WA, NT.Northern Suburbs, Eastern Suburbs, Western Suburbs, Southern Suburbs.


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04.1 MARKET PROFILE

Attitude

Any attitude toward life: Environmentally or politically dis-posed, concerned about the future, concerned about today, short term price conscious, looks at long term advantages, concerned with image, prestige, other.

Lifestyle Health conscious, active, adventurous, other.

Usage Rates High, medium, low users.First time, existing users, other.

BenefitsDesired

Buys in terms of the benefits the product offers: technical performance, low price, quality, prestige, user friendliness, labour saving, durability, dependability, other.

WHICH SEGMENTS DID YOU SELECT?

WHAT OPPORTUNITIES EXIST IN EACH OF THE SELECTED SEGMENTS?

HOW DO YOU REACH EACH OF THESE SEGMENTS?

WHAT WILL BE YOUR SALES APPROACH?

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BENEFITANALYSIS04.2


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04.2 BENEFIT ANALYSIS

One of the most important principles in setting the strategic direction of any business is to understand that

customers are not interested in product features. They are interested in the derived benefits of these features. For example, a major feature of a car might be a V8 engine, but the benefit is that the customer can drive faster. Toothpaste may have tartar control but the benefit is that it reduces the chance of tooth decay. Look at the market and your product or service and describe what are the major benefits sought.

SegmentPrimary benefits desired by the

segmentSecondary benefits desired by

the segment

What are the major features of your product or service?

What are the major benefits to the customer of these features?


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04.2 BENEFIT ANALYSIS

A good plan always takes into account what you have done in the past as well as what you will do in the future.

If, in the previous analysis, you highlighted some segments that you will target your product to in the future,

have a look at who you have predominantly sold your products and services to in the past and what you will

need to do or change in the future.

Volvo sells their cars primarily to the safety conscious segment. Why do people in this segment buy their car? - Because they perceive Volvo to be one of the safest cars on the market. What segments have you targeted and

why will they buy your product or service?

WHICH SEGMENTS HAVE YOU TARGETED YOUR PRODUCT OR SERVICE TO IN THE PAST AND WHICH WILL YOU TARGET IN THE NEXT PERIOD?

SUMMARISE WHY YOU THINK EACH POTENTIAL TARGET MARKET WILL BUY YOUR PRODUCT

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DETAILEDSEGMENT ANALYSIS04.3


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04.3 DETAILED SEGMENT ANALYSIS

Now that you know which segments you are going to target, find out as much as possible about their purchasing behaviour and needs. Often, just going through this procedure helps you to focus on the individual

segment as a separate identity, which could lead to the isolation of potential opportunities.

SegmentTarget Market 1

A target market is the market segment that you have decided to sell (or target) your product to.

Target Market 2 Target Market 3

What products are they likely to purchase?

Why do they purchase? Or What are their needs?

How will your product satisfy their needs?

Who is the influencer?

Who is the decision maker?

How do they purchase?

When do they purchase?

Where do they purchase?

How often?

Will this segment want add-on products in the future?

Who are the major "centres of influence"?


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What often surprises many business managers is that the consumer may perceive their business differently

to what they do. A classic example of this is one of our small business clients who was drawing lots of

enquiries from his advertising but converting very few of them to actual orders. A survey of those potential customers who did not buy concluded that these people bought from a competitor because they perceived the

competitor’s product to be superior to that of our clients.

In this case our client had a technically superior product to that of the competitor he was losing business to but

his brochures did not clearly explain the product’s benefits. The competitor also had an endorsement from a semi-official body which gave their product more credibility. It is crucial that you review how your business is perceived. Image can go a long way to helping you win.

HOW ARE YOU AND YOUR BUSINESS PERCEIVED BY YOUR CUSTOMERS?

HOW WOULD YOU LIKE YOUR CUSTOMERS TO PERCEIVE YOU AND YOUR BUSINESS?


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Who are the major “Centres of Influence” for your product or services?

(A “centre of influence” is any person or organisation that could influence others to buy your product or service for example, associations, magazines,

consultants etc.)

How have you in the past and how will you in the next period, contact these people so that they are

aware of your services?


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Section 3.1

WEBANALYSIS05


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05 WEB ANALYSIS

It is important to have an understanding of how your business is performing on the Internet. Many

organisations spend a lot of money on design and development and spend far less time and effort on strategic

planning options for the Internet. The Internet is the largest broadcaster of product information in the world. It

can also become the least expensive form of marketing if you understand the key web drivers.

Product/Service* Keyword Search Engine Ranking

Develop a list of keywords for each of your products/services that your customers are likely to use when

searching for these products/services in search engines. In the fourth column enter where your keywords are

ranking. (For example, type your keyword into a search engine such as Google find out where you rank. If you are not on the first page you are most likely not going to be effective). Keeping track of where your keywords are ranking is imperative for increasing traffic to your website.

WHICH KEYWORDS ARE YOUR POTENTIAL CUSTOMERS LIKELY TO ENTER IN A SEARCH ENGINE SUCH AS GOOGLE? WHERE DO YOU CURRENTLY RANK IN SEARCH ENGINES?


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05 WEB ANALYSIS

Keyword Search Engine Competitor & Position Why are they ranking

in the top five?What can you do that

is similar?

1

2

3

4

5

Keyword How will you optimise this keyword?

Search Engine Optimisation (SEO) is about creating and placing fine tuned keywords on your webpages in the aim of obtaining relevant visitors to your website. So to optimise your website you must optimise your

keywords

HOW WILL YOU OPTIMISE YOUR PAGES TO IMPROVE YOUR PROFILE FOR EACH KEYWORD?

FOR YOUR KEYWORDS, WHO IS RANKING IN THE TOP FIVE POSITIONS IN SEARCH ENGINES? WHY ARE THEY RANKING IN THE TOP FIVE AND WHAT CAN YOU DO THAT IS SIMILAR? YOU MIGHT LIKE TO PULL UP YOUR COMPETITOR’S PAGES AND VIEW THE META TAGS.


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05 WEB ANALYSIS

As you increase your links to other websites you will increase traffic to your site and improve your ranking in search engines. Reciprocal links, multi-way linking and backward links are just a few examples of the types of

links which are used.

Just because you drive traffic to your website does not mean that you will automatically make money. You need to capture the information of qualified visitors. This could be done by offering a white paper, a free demo, more information or a free consultation. Corprat Pty Ltd developed a Mini MBA incentive program for

consultants to join the MAUS Accredited Partner Program. To access the Mini MBA program users need to

enter their details, therefore capturing the consultant’s details.

WHAT STRATEGY DO YOU HAVE TO LINK YOUR WEBSITE TO OTHER SITES?

HOW WILL YOU GENERATE LEADS FOR YOUR BUSINESS? WHAT CAPTURING DEVICE WILL YOU USE?


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05 WEB ANALYSIS

Ezines are authoritative articles on particular subjects, for example, “how to create a business plan.” When you

write the article you might include your company within the contents as an example of resource material or

you might include your company and website as a resource for potential readers to navigate to if they would

like more information. The idea is to distribute this article throughout the web to attract more traffic to your website.

Search engines send out spiders that trawl the Internet for websites associated with different keywords.

However to ensure that your site is found it is always advisable that you submit your website to these engines.

At the moment many of experts advise that you should submit your website after every major change.

However you should not submit your website twice to the same search engine within a six week period

WILL YOU PUBLISH ANY EZINES?

HOW OFTEN WILL YOU SUBMIT YOUR WEBSITE TO THE SEARCH ENGINES?

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06 COMPETITOR ANALYSIS

It is important to understand who your competitors are and what they are offering. If you do not know

the exact market share estimate the approximate size. Think about why customers would buy from these

businesses.

Competitor Market Share Is their market share

increasing or decreasing?

The major reason why people buy from this

company


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Analyse your business against your competitors. What do you offer that may be a strength? What do they offer that could make you less competitive?

Your Company Competitor Competitor

Bad..............................Good Bad..............................Good Bad..............................Good

Size of Company 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5

Reputation 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5

Location 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5

Established Customer Base 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5

Management Skill 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5

Company Flexibility 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5

Pricing Level 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5

Guarantee/Warranty 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5

Credit Terms 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5

Product Quality 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5

Reliability 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5

Suitability 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5

Packaging 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5

Product Features 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5

After Sales Support 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5

Product Range 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5

User Friendliness 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5

General Adv. Promotions 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5

Customer Service 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5

Availability through Distribution 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5

Dealer/Reseller Training 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5

COMPETITIVE STRENGTHS AND WEAKNESSES


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Graphing your competitive positioning is a descriptive way of highlighting what you are offering compared to

your competitors. Look at the sample business plan later in this book to see how we positioned the imaginary

“XYZ Company”. All you need to do is choose two of the most important variables that the consumer considers

important and graph where you are positioned against your competitors. (This is a simplified positioning graph that has some limitations. A more detailed review of positioning analysis can be found in most marketing texts.)

Try positioning your products or services. Is there a gap in the market or are you doing what everybody else is

doing?

COMPETITIVE POSITIONING

GENERAL COMPETITIVE PRODUCT POSITIONING

Low Price

High Quality

High Price

Poor Quality

Our Company

Competitor 1

Competitor 2


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Most companies will be marketing their products or services to two or more market segments. For example,

if you were selling mobile phones you could target tradesman and DINKS as two major market segments. The

strategy would need to be different for each segment. For instance, the primary benefit a tradesman might need is durability. (It can be dropped, will not break and has long-life batteries). DINKS, on the other hand,

might be more concerned with the slimness and weight of the phone.

POSITION YOUR PRODUCTS OR SERVICES BY SEGMENT

TARGET MARKET:

Your strategy Competitor Competitor

Price Strategy

Product Strategy

Promotional Strategy

Distribution Strategy

Positioning


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TARGET MARKET:


Price Strategy

Product Strategy



Positioning



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TARGET MARKET:


Price Strategy

Product Strategy



Positioning



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REVIEW YOUR COMPETITOR ANALYSIS AND SUMMARISE YOUR POSITIONING IN EACH SEGMENT.


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07 SWOT ANALYSIS

Summarise all your strengths, weaknesses, market opportunities and threats. Before completing this SWOT

analysis answer the question checklists that are included elsewhere in this manual.

“Which Means That”

Strengths of the Business

Weaknesses of the Business

Opportunities in the Marketplace

Threats in the Marketplace

Web Analysis


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07 SWOT ANALYSIS

If you look back over the sections you have just completed you will see that they give an excellent summary of

your business as well as an indication of the strategic direction in which you should be headed. They contain all

the background information that is an essential lead-up to the core of your plan.

* If you are preparing this plan to give to a bank or an investor these details will add credibility and

substance to your financials. They will demonstrate that you are a well-run, well-organised business that does not leave things to chance. Investors want to be sure that their investment will be secure in the long term.

* If you are preparing this plan for top management these sections are crucial to help demonstrate the

issues that you are confronted with and why you might need additional resources.

* If you are preparing this plan to help manage a business, small or large, you should view the previous

sections as an excellent aid in helping you develop your operational and strategic goals. However, if you give

a 60-page document to your employees it is most likely that it won’t get read and important elements of the

plan will be overlooked. What you need to do is extract the Roll-out Plan (which you will develop later) and

communicate that to your employees. The rest of this plan can stay in your drawer and be used as a reference

to explain why you decided to do what you did.

WELL DONE!

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08 OBJECTIVES

The objectives list your goals over the next period. It will probably be easier for you to answer the questions in Part 5 and then come back and summarise your objectives. Your objectives should always be measurable and

quantifiable. Below is an example of a series of objectives

To sell the business in 3 years time for $5 million dollars.

To develop and implement an achievable succession plan by March 20XX

Short Term

To increase sales turnover from $1.8m to $2.6m in the next financial year. To delegate more responsibility to the product managers.

To increase profitability to 6%.Long Term

To achieve sales of $3m in 20XX.

To achieve sales of $5m in 20XX.

Environmental Corporate objectives

To reduce our electricity consumption by 10%.

To reduce hazardous waste from production by 10%.

Become Carbon Neutral by 2001X

Charitable Objectives

To provide $5,000 to charities in 200X

To achieve 10% market share of product A in market Y.

To achieve 15% market share of product B in market Y.

To decrease the number of lost customers from 10% to 5%.

To increase enquiries to orders from 15% to 25%.

SHAREHOLDER (EXIT, SUCCESSION, INVESTOR) (GOALS)

CORPORATE OBJECTIVES (GOALS)

MARKETING OBJECTIVES (GOALS)


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08 OBJECTIVES

To reduce material costs from 38% to 36%.

To reduce wages costs from 28% to 25%.

To reduce direct costs from 23% to 20.5%.

To reduce reject rate from 10% to 7%.

To reduce sales on credit from 65% to 43%.

To reduce the overdraft from $100,000 to $50,000.

To reduce the amount of lease payments by 50%.

To promote pro-active management.

To employ two new staff.

To conduct four training courses on customer service.

Suggested Web Marketing

We wish to drive 20,000 unique visitors to our website each month. We will convert 1000 of these to more information kits.

We will convert 200 of these to customers.

We will spend $5,000 on our PPC campaign.

We will spend $2,000 on upgrading our website.

Suggested Sales and Lead generation Goals

To drive 3000 leads into the business every month.

To set a target of 15 follow ups a day.

To have a conversion to meeting ratio of 15%.

To have a conversion to sales ratio of 25%.

PRODUCTION OBJECTIVES (GOALS)

FINANCIAL OBJECTIVES (GOALS)

HUMAN RESOURCE OBJECTIVES (GOALS)


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08 OBJECTIVES

Type of objective (Production, marketing, etc.)

Actual goal or objective

The following sections - marketing, finance, production, retail and human resource - allow you to provide more detail on your objectives and how you will achieve them

OBJECTIVES


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08 OBJECTIVES

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09 SHAREHOLDER, INVESTOR, EXIT & SUCCESSION STRATEGY

This should be a clear concise statement of what you would like to do from a shareholder perspective. If you

are a business owner then the objective might be to sell the business. Or if you are a larger corporate then you

might seek return on shareholder funds.

In this discussion describe the stage that your business is in within its lifecycle.

OVERVIEW

OBJECTIVES

WHAT DO YOU WISH TO ACHIEVE?

Objective #1 E.g. we wish to sell the business in 5 years time for $5 million dollars.

Objective #2

Objective #3

What are your proposed shareholder objectives?


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If you wish to sell your business, how will you make your business more attractive to a potential purchaser and

effectively increase the potential purchase price that someone would be willing to pay? The grid below allows you to rate your business based on the factors that buyers often look for to determine the value of a business.

EXIT AND SUCCESSION STRATEGY

Business FactorsYour Score

NowYour target How you will achieve this?

Years of business operation

Management strength

Customer loyalty

Brand awareness

Customer base

Packaged IP & Technology

Key staff longevity

Location

Non reliance on key manager(s)

Ability of business model replication

Business systems and process

Total Score

Total Score % (Convert Score to a Percentage)

Forecast factors

Profitability past/present

Profitability growth forecast

Revenue growth

High certainty in budget

Recurring revenue model

Total Score



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Market factors

Market growth & potential

Industry barriers to entry

Competitive activity/advantage

Dominant market position

Economic prosperity

Total Score


Investor consideration

Reason for selling

Synergy and value add of buyer

Degree of risk

Market for business sale

Total Score


ATTRACTIVENESS INDEX

The more attractive your business the more you will receive when selling your business. Working on a plan to

improve your business is effectively working on a plan to sell the business for more money.


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You may have the most attractive business in the world but if you are not ready to sell then your business

will drop in value. You need to develop a program to get your business ready for inspection by a potential

purchaser. What do you need to do in each of the following areas to get your business ready to sell?

WHAT DO YOU NEED TO DO TO GET YOUR BUSINESS READY TO SELL?

FINANCIALSWell documented financials are critical to a successful sale. Where applicable, you need to have a copy of the last three year’s tax returns for the business.

You need to manage your company for profit not for tax minimisation.

You also need to produce a reconciliation that includes “Addbacks”. These are all the personal, or one off expense items that are included in the tax returns. It should also include all payments and wages payed to the owner (and associated personnel.) This provides a net payment of the return to the business owner. You also add back depreciation which show the cash return to the owner.

MARKETING DOCUMENTATION AND SYSTEMSWhen potential buyers look at your business, they will evaluate whether they can replicate your model and continue to make money. The way they will judge this is to review your marketing and sales systems.

If the business does not appear systemised, the value of the business value will decrease. A list of where you spend your advertising and the success of past campaigns will impress potential buyers.


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SUCCESSION, EMPLOYEE AND MANAGEMENT ISSUESYour business should not be perceived as being reliant on the business owner. If this perception exists, then the value of the business will drop. This issue should be addressed before the business is put on the market.

The owner’s different roles should be able to be performed by employees. Sometimes this transition takes time so start considering all of your functions within the business, who is capable of take over in the future and what level of training do they need to get them to this level.

Start a program where you build competency and in the process you will make the business stronger. Build the right systems including job descriptions, employee contracts, employee manuals and other documentation that replaces uncertainty with clear direction

MANAGEMENT SYSTEMS AND FORECASTSBusinesses are valued based on the amount of future income they may generate, factored against the risk of business failure.

Many valuation methodologies use a multiple of profit or a calculation of future profits to arrive at a valuation of the company. Therefore, the more credible your forecast and the more reliable it is seen to be as a projection of future income, the higher the value of your business.

If your forecast is non existent or seen as non reliable then it is likely your business will be valued on historical earnings. This may lead to a downward valuation.



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INTELLECTUAL PROPERTY You need to have a list of all your IP including your trade mark and patent documentation where applicable.

If you have a website or sites, list all the domain names and where they were registered. This is important because when you sign the business over to someone else, you will probably be assigning the rights of all your websites, trade marks and patents.

CONTRACTSPotential purchasers will review all the contracts that the business has signed. If it is a company share transfer, then the new buyer will have all the liabilities of these contracts transferred.Contracts should be broken into two areas, customer contracts and supplier contracts.

SYSTEMS PROCESSES AND DATABASESBuyers are tentative at the beginning of negotiations but then they quickly form a judgement on whether the information they have received is credible and whether the business has a strong chance of continued profitability.

Their view of the business will be swayed by what they see when conducting due diligence. A prospective buyer will want to see your customer database and enquiry database, so make sure that the database looks clean and that you know the number of unique records.

You also need to be able to demonstrate that a streamlined sales process and customer relationship management program is in place.



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Based on the attractiveness criteria, what are the milestones that you will need to achieve to sell your business

for the amount of money that you require. For example, we will need to improve our profitability to $1.5 million, we will need to delegate all tasks to managers so that the business owner can exit the business, we will need to establish good employee systems

and documentation, we will need to target growth markets and launch three new products, we will need to get

a finance partner in to help us penetrate the international markets, we will need to develop a recurring income model.

NOTE: For further research in this area we recommend the book “Sell your Business” by Peter Hickey or the

MAUS SellBiz Pro software program.

KEY MILESTONES REQUIRED TO ACHIEVE THE EXIT OBJECTIVE.


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10 MARKETING

This should be a clear concise statement of where your business is headed.

BUSINESS MISSION STATEMENT

OVERVIEW

OBJECTIVES

MARKET POSITIONING

Product or Service #1:

Product or Service #2


Product #1

Total Market

Target markets. Positioning of the product for each segment.

Segment 1

Segment 2

Segment 3

Segment 4

Segment 5

What are your proposed sales and market share objectives?


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10 MARKETING

Product #2

Total Market


Segment 1

Segment 2

Segment 3

Segment 4

Segment 5

Product #3

Total Market


Segment 1

Segment 2

Segment 3

Segment 4

Segment 5


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How will you obtain feedback from your sales reps, distributors and front line personnel? How will you generally get feedback from the market to ensure the success of your marketing programs? Look at how you have done it in the past. Can your information gathering be improved?

What specific actions can you implement to improve the customer’s perception of your business? (You analysed the customer’s perception of your business previously in the “Detailed Segmentation Analysis”

section).

MARKETING INFORMATION SYSTEMS

HOW DO YOU WISH TO BE PERCEIVED BY YOUR CUSTOMERS? DO YOUR BROCHURES, COMPANY LITERATURE, ETC. SUPPORT THIS PERCEPTION?

10 MARKETING


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Consumers are becoming so conscious of environmental issues that we should consider how our business

affects the environment and how we can use this to improve our market share. What is our carbon

footprint? Can we reduce this? What can we do from an internal production or operational perspective?

What also can we say about what we do that will add to our competitive advantage.

Environmental Issues

What internal operational steps can the company take to lessen the impact on the environment?

For example: In terms of the office: Recycle paper, toner cartridges, turn lights and computers off, garbage, bathroom water saving devices. In terms of production can you use a different supplier with more environmental friendly products, can you manufacture in a different way or remove your waste in a different way?

Is there anything we do in our processes or operations that is superior to our competitors? What can we say about our “green” initiatives that will help us to distin-guish our products from our competitors?

Examples may be organic foods, products that are bio-degradable etc. You might also consider if your prod-ucts do not necessarily benefit from being “environmen-tally friendly” or fit into this category, then just listing your green initiative on your website and in your corporate literature may help you to build goodwill.

10 MARKETING

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10.1 PROMOTION

Businesses conduct promotions for different reasons. A business might conduct a promotion to increase sales

of a particular product, to sell more units to a particular sales region, to strengthen the sales in a particular

market segment, to increase corporate awareness, etc. Car manufacturers, for instance, could conduct

promotions on the different models of their range of cars or perhaps conduct a sales campaign by region.

Alternatively, they may have research that indicates that business executives buy most cars around the end

of the financial year due to available tax advantages. In that case the company could do a specific promotion aimed at the business segment in this particular period. Think about your business and how you will promote

your product or service in the future.

CUSTOMER PROMOTIONS

Did your analysis of last year’s sales by individual products highlight any deficiencies that you will need to overcome with a promotional campaign?

Did your analysis of last year’s sales by State (or region) highlight any deficiencies that you will need to overcome with a promotional campaign?

Did your analysis of last year’s sales by market segment highlight any deficiencies that you will need to overcome with a promotional campaign?

PROMOTIONS FOR PRODUCTS

PROMOTIONS FOR REGIONS

PROMOTIONS FOR SEGMENTS

OTHER PROMOTIONS


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10.1 PROMOTION

TYPES OF MEDIA ACTIVITIES AIMED AT THE CUSTOMER

Product Launch Show Information sheets

Direct Mail Customer Reference Books

Press Advertising Computer Presentations

Radio Advertising Sales Presenters

Seminars Brochures

PR Releases Newsletters, internal or external

Exhibitions Newspaper clippings

Cold Canvassing/Telephone selling Leaflet Drops

Telemarketing Sales Promotions

Yellow Pages Slide Presentations

Information CDs Promotional DVDs

TV Advertising Other


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A “centre of influence” is any person or organisation that could influence others to buy your product or service. For example, associations, magazines, consultants, etc.

CONSULTANT’S & INFLUENCER’S PROGRAM

WHO ARE THE MAJOR “CENTRES OF INFLUENCE” FOR YOUR PRODUCT OR SERVICE? HOW HAVE YOU CONTACTED THEM IN THE PAST SO THAT THEY WERE AWARE OF YOUR PRODUCT OR SERVICE? HOW WILL YOU IN THE FUTURE?

10.1 PROMOTION

Editors

Associations


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10.1 PROMOTION

SPECIFIC PROMOTIONS AIMED AT CONSULTANTS & INFLUENCERS

Direct Mail Consultant's Newsletters

Personal Contact Consultant's Reference Books

Press Advertising Computer Presentations

Radio Advertising Sales Presenters

Seminars Brochures

PR Releases Newsletters, internal or external

Exhibitions Newspaper clippings

Cold Canvassing/Telephone selling Leaflet Drops

Telemarketing Sales Promotions

Yellow Pages Slide Presentations

Information CDs Promotional DVDs

Other


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10.1 PROMOTION

Organic Growth Strategy refers to where your website appears in search engines without paying the search

engine for premium placement. For example if you type in a keyword such as “Business Planning Book” and

you publish a book on Business Planning, Then you would count the number of companies that appear before

your company. Explain in this section how you will promote your website to improve your general traffic and improve your organic ranking.

ORGANIC GROWTH STRATEGY

OVERVIEW OF YOUR INTERNET STRATEGY

INTERNET PROMOTIONAL PROGRAM

WEBSITE DESIGN AND LAYOUT: Your website layout and design is your silent salesperson. You would not let a sales representative on the road to visit your customers unshaven and wearing shorts so do not have the equivalent unprofessionalism with your website. Dress your website up, make it look professional, but concentrate on the user experience. Make it simple to use and informative.

DOMAIN NAME: An easy to remember domain name may increase your web visitors. Equally a domain name that is subject related may add to your credibility and subsequently increase your traffic for example onlineshopping.com or buysellbusiness.com.

QUALITY OF CONTENT: The better the content the more credibility that you achieve with your potential target market. The more credibility the more likely they will be to buy from you

FREE INFORMATION GIVEAWAY:Providing information helps you to build credibility and make sure that they have a document that emphasises that your company knows how to solve their problems.

LEAD CAPTURE DEVICES: Gaining credibility is all well and good, but unless you end up with the name, email address and telephone you will have limited rewards for your effort.

DENSITY OF KEYWORDS: If you are trying to promote your business using one or two keywords then make sure that your website has a large density of these keywords. That will help to ensure that the search engines rate your page higher.


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10.1 PROMOTION

LANDING OR GATEWAY PAGES.Some companies develop a special landing page that is content rich for this group of products. For example if a company has five different products advertised on a single website, then there might be totally different keywords that are effective for one product over another.

SUBMISSION OF EZINES.An ezine is an authoritative article on a particular subject, for example “how to create a business plan”. When you write the article you might include your company within the contents as an example of resource material or you might include your company and website as a resource for potential readers to navigate to if they would like more information. The idea is to distribute this article all over the web to attract more traffic to your website.

WHITE PAPERSA white paper is a technical article written that explains a process or provides information

INTERACTIVITY OF CONTENT. DVDs, interactive questionnaires and navigation all add to the appeal of your website.

Appeal of content: The more appealing your content, the more likely it will be listed highly in the search engine and the more likely that your web visitors will find your company credible.

Instant access to “real people” for help. Many websites now have access to a real sales person if the user clicks on a button.

LINKING WITH OTHER WEBSITES: As you increase your links to other websites you will increase traffic to your site and improve your ranking in search engines. Reciprocal links, multi-way linking and backward links are just a few examples of the types of links which are used.

FREQUENCY OF SUBMISSION You need to submit your website to search engines so that they know that you exist. You can submit individual web pages as well.

Other


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(PPC stand for “Pay Per Click”. Many companies wish to place themselves on the first page when a keyword is typed into the search engine. Companies can actually pay to appear at the top of a search category. Every time

somebody clicks on your entry it then costs you X dollars per click.)

PPC GROWTH STRATEGY

Google Yahoo

Other Search Engines Influencer websites

10.1 PROMOTION


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Note: For a full detailed reference source on Internet Marketing review the MAUS WebMarketing software.

Product NameKeywords to

promote for this product

Organic PositionNumber of Clicks

for PPC

Where you are now

Where you want to be

Business Planning“Prepare a business plan” 7 4 400

10.1 PROMOTION


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10.1 PROMOTION

Who do you want your sales force to target and what are the highlights of the planned sales strategy?

How have you in the past, and how will you in the future, clearly communicate to your sales force all elements

of your promotional campaign?(There is nothing more frustrating than an organisation where people don’t talk to each other.)

SALES STRATEGY

COMMUNICATION

SALES FORCE PROGRAM

PROMOTIONAL CHECKLIST FOR SALES FORCE

Sales Commission Consultant's Newsletters

Sales Force Structure Consultant's Reference Books

Special promotions to sales force Computer Presentations

Sales Training Sales Presenters

Other Brochures


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10.1 PROMOTION

Promotional offers can increase sales considerably. Examples of companies that have increased sales by

creating a special promotion include: Time magazine which offers free gifts as a reward for new subscriptions;

and Visa who offer points towards free gifts for purchases with the card.

We were involved with a business that tripled sales by offering a free item with every purchase. The right

promotional offer can be extremely powerful. However, it needs to be appropriate to the market and the

product being sold. Winning a trip to a luxury resort would probably be an inappropriate offer for a charity to

lure potential donations.

MARKETING TACTICS FOR THE BUSINESS

Types of OffersPromotion to the consumer

Promotion to distributors

Promotion to the sales force

Promotion to “centres of influence”

Price discount (Opening sale, factory clearance etc)

Volume discounts

Buy one get one free

Free Trial

"Win a trip" Contest

Free gift with every purchase

Standard and deluxe packages

Flexible payment terms

Guarantee of quality

Special Events (Christmas, Father’s day, Easter, etc.)

Points bonus scheme


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10.1 PROMOTION

CHECKLIST OF MARKETING RESOURCES FOR THE BUSINESS

SUMMARY OF TYPES OF PROMOTION FOR THE BUSINESS

Marketing materialMaterial for consumers

Material for distributors

Material for the sales force

Material for “centres of influence”

Non-technical brochure

Technical brochure

Specification sheet

Sales Guide

Distributor Guide

Application examples

Price Book

Sales Overheads

Product Slides

Quarter 1 Quarter 2 Quarter 3 Quarter 4

Promotions to the consumer or buyer

Promotions to distributors

Promotions to “centres of influence”

Promotions to the Sales Force


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10.1 PROMOTION

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PRICING10.2


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10.2 PRICING

There are many ways of calculating the price that needs to be charged. Ensure the price is low enough to be

competitive but high enough to give the business and each stage of the distribution channel adequate profit margins. How have you priced your product or service previously? Should your current pricing structure be revised?

PRODUCT #1

PRODUCT #2

Average Price List % Discount

End User (RRP)

OEM

Distributor

Reseller (Sub-distributor)


End User (RRP)

OEM

Distributor



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10.2 PRICING

Are discounts offered to people who buy in large quantities? Will they be in the future?

Do you offer credit, payment on invoice, COD, etc? What will you offer in the future?

PRODUCT #3

VOLUME DISCOUNTS

PAYMENT TERMS


End User (RRP)

OEM

Distributor


Quantity Level 1

Quantity Level 2

Quantity Level 3

Quantity Level 4





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Section 3.1

DISTRIBUTION10.3


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10.3 DISTRIBUTION

How is your product or service distributed now? Do you need to review this method?

APPOINTMENT OF DISTRIBUTORS

APPOINTMENT OF SUB-DISTRIBUTORS OR AGENTS

Name

Basis for selection

For what region, or segment or on what basis is this distributor appointed?

Date of Appointment

Name

Basis for selection


Date of Appointment


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10.3 DISTRIBUTION

RETAILERS

Name

Basis for selection


Date of Appointment

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PRODUCT (SERVICE)10.4


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10.4 PRODUCT (SERVICE)

Does your product or service have a brand name? Is this name protected, easily understood and acceptable in other countries around the world? Does it meet your business’s image requirements?

Does your packaging meet legal requirements? Have distributors, retailers and/or consumers been approached and shown the packaging? Does the packaging adequately protect the goods

Is a warranty/guarantee provided as part of the purchase price or is it offered as a separate option? Is a “Money back if not completely satisfied” guarantee given? The reason for offering such guarantees is to reduce the risk to the customer. The lower the risk the more likely it is that the customer will buy.

BRANDING

PACKAGING

WARRANTY/GUARANTEE


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10.4 PRODUCT (SERVICE)

Are any accessories or add-ons for the product offered? If so, how is this communicated and charged for?

For example, a windsurfing school may offer courses for beginners and then in six months time offer another course to the same people for more advanced lessons. The software industry is typical of an industry that uses

their existing database to sell upgrades

ACCESSORIES

ARE ANY UPGRADES TO THE PRODUCT OR SERVICE OFFERED?

Product Developments or new models Expected market release date

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Section 3.1

ORGANISATIONAL &MANAGEMENT11


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11 ORGANISATIONAL & MANAGEMENT

See a further list of questions elsewhere in this manual that will help you to analyse your business in this area. After reviewing your business the first thing you will need to do is to list your overall organisational and management objectives

ORGANISATIONAL & MANAGEMENT OBJECTIVES

Number of extra staff to be hired

Payroll Budget

Training & Human Resource Budget

Other

An organisational chart lets everyone know who reports to whom. It reduces confusion in the organisation

DOES YOUR BUSINESS HAVE AN ORGANISATIONAL CHART?

ORGANISATIONAL & MANAGEMENT STRATEGIES


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Even very small businesses should have job descriptions for all their employees. It is surprising how many

things don’t get done because no-one is directly responsible for doing them.

Many organisations predict that they will expand their business by twenty percent but forget to look at the

implications to their staffing level. A rapidly growing business is difficult to manage and if expansion is not properly controlled it can create disastrous consequences. For example, a massive influx of orders will need enough salespeople to handle the orders and/or warehouse staff to deliver the goods.

DO YOUR EMPLOYEES KNOW EXACTLY WHAT THEIR ROLES AND RESPONSIBILITIES ARE? ARE THERE CLEAR JOB DESCRIPTIONS?

WILL NEW PEOPLE NEED TO BE HIRED? IF SO, WHO, HOW MANY AND AT WHAT COST?


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Clear-cut policies let everyone know where they stand. Corporate policies or procedures can be used to inform

staff that “All debtors are to be followed up within 7 days of purchase”, “All sales enquirers are to be sent a brochure on the day of the enquiry”, etc.

Employees are a businesses most important asset. As part of the employment contract, consider including a

performance criteria that staff will not be negative. It is alright to receive constructive criticism but negativity

can bring an organisation down. Ensure that all employees are well-motivated and positive. Can the work

environment be improved?

LIST THE GENERAL POLICIES AND PROCEDURES THAT YOU HAVE ESTABLISHED TO COVER EVERYTHING FROM EMPLOYEE REMUNERATION AND GUIDELINES THROUGH TO ACCOUNTS PAYABLE AND PAYMENT PROCEDURES.

WHAT IS THE GENERAL BUSINESS ATMOSPHERE?



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Don’t train for the sake of training. Analyse what areas of the organisation need improvement and develop a

training program to improve employee skills in these areas.

Describe the general things that need to be done in the future.

WHAT AREAS OF SKILL DEFICIENCIES IS THERE THAT CAN BE IMPROVED THROUGH TRAINING?

SUMMARY OF ORGANISATIONAL & MANAGEMENT PERFORMANCE


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FINANCIAL12


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12 FINANCIAL

What are your general financial strategies?All businesses should be concerned about strategies that preserve the organisation’s cash flow, keep inventory levels at a minimum, and address credit collection, terms and payment procedures.

State in this section that a full set of financials is included in the Appendix.See the list of questions elsewhere in this manual for an idea of the major areas to address.

FINANCIAL STRATEGIES

FINANCIAL BUDGETS


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12 FINANCIAL

Ratios are normally used to assess the efficiency of an organisation. Each industry will vary depending on the industry norms. Choose the ratios that will help determine the efficiency of your business.

RATIO ANALYSIS

Sales Profitability Net Profit / Sales expressed as a %

Return on Capital employed Net Profit / Capital employed expressed as a %

Asset Turnover Sales / Capital employed expressed as a %

Liquidity Ratio Current Assets - Stock / Current liabilities expressed as a no.

Current Ratio Current Assets / Current liabilities expressed as a no.

Capital Gearing Long term loans + current liabilities/ Share capital + reserves

expressed as a %

Debtors Ratio Sales / Debtors expressed as a %

Creditors Ratio Cost of goods sold / Creditors expressed as a %

Efficiency Ratio Individual expense items / Sales expressed as a %

Stock Turnover Ratio Cost of Sales / Stock expressed as a %

Sales/Employee Ratio Sales / Employee expressed as a %

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PRODUCTION 13


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13 PRODUCTION

See a further list of questions elsewhere in this manual that will help you to analyse your business in this area. After reviewing your business the first thing you will need to do is to list your overall Production Objectives.

PRODUCTION OBJECTIVES

DESCRIBE THE GENERAL MANUFACTURING STRATEGIES FOR YOUR ORGANISATION

PRODUCTION STRATEGIES

Production Forecast

Plant Capacity

Production Costs

Other

What existing plant and machinery do you have? Will you have to invest in new plant and machinery in the future?


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13 PRODUCTION

Ensure that your production staff know what the sales forecast is and when peak season is expected. Ensure

your accounts department know when you need your new machine, so that they can have the funds available.

LINK MARKETING, PRODUCTION AND FINANCIAL STRATEGIES TOGETHER.

LIST CURRENT AND PROPOSED RESEARCH AND DEVELOPMENT PROJECTS.

Enhancement or product development? Expected completion date.


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13 PRODUCTION

What will be the material requirements for the future? Have you established efficient levels of material usage?

How much work is sub-contracted out? Are there plans to reduce this and perform these tasks in-house?

What are the labour requirements? Have targets and efficiency levels been established?

MATERIAL REQUIREMENTS

SUB-CONTRACTING

LABOUR


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13 PRODUCTION

What will be the material requirements for the future? Have you established efficient levels of material usage?

Describe the general things that need to be done to ensure a successful operation.

WHAT ARE THE GENERAL OVERHEAD REQUIREMENTS?

GENERAL MANUFACTURING

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Section 3.1

THE ROLL - OUT PLAN14

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Section 3.1

KEY MILESTONES & RESPONSIBILITIES14.1


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14.1 KEY MILESTONES & RESPONSIBILITIES

Well done! You have completed the arduous task of documenting all the major things that you will need to do

in order to grow your business.

But, if you are really serious about planning, don’t stop here.

As we mentioned before, at this point you have probably produced quite a lengthy document and the chances are that you will carefully place it in the top drawer of your desk and then forget completely about it. All the

good work you have done will have been wasted. If you prepared this plan to manage a business we suggest

that you do three things. First, summarise all the things you have written into a couple of pages. Then develop

an action plan which lists dates and allocates responsibilities to get things done. Finally, develop an evaluation

sheet to make sure that things have actually been done.

If you consider that this is too much paper work and will be too time consuming to be effective, simplify the

process as much as possible. One effective way is to get a whiteboard and write on it a list of the key tasks,

responsibilities and timings. Tick off things achieved on a day-to-day basis. If you put the whiteboard in a

prominent position where it can be seen you will help keep your plan on track.

Failure to allocate responsibility is one of the major reasons why things do not get done. Allocate responsibilities

and timings to the most important elements of the plan. If being prepared for the total organisation the task

list does not need to be in as much detail as it needs to be for individual departments.

Potential investors are likely to be extremely impressed if this section is included. It shows that the whole plan

has been thoroughly thought through and will be followed up.

A note on the forms: It is up to you how much detail you fill in. For example, you could simply fill in an action objective - “to produce a brochure by July” - or you could include all the tasks that need to be completed to achieve this. For example, prepare copy for brochure by March, layout and design by April, printing by May and

final brochure by July.

FOR THOSE WHO WANT TO FINISH THE JOB PROPERLY, PLEASE TURN TO THE NEXT PAGE.


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STRATEGIES (or action objectives) Examples

MILESTONES or MAJOR TASKS. WHO (Person Responsible)

WHEN (Date to be completed)

1. To maintain outstanding debtors at less than 10% Communicate credit policy to Sales. DIB Jan

2. To develop a brochure by July Get agreement on content. LT June

Final brochure. TL July

MARKETING STRATEGIES


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FINANCIALSTRATEGIES



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PRODUCTION/RETAILSTRATEGIES



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HUMAN RESOURCESTRATEGIES


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Section 3.1

MONTHLY EVALUATION SHEET15


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15 MONTHLY EVALUATION SHEET

One of the major flaws in business planning is the assumption that, because a plan has been written down, it will happen of its own accord. The previous section pointed out that one of the key elements of business

planning is the allocating of responsibilities for tasks. An even more important point is accountability.

Employees should be given targets and performance goals. They should be held accountable to these targets.

There will always be excuses not to get things done. Crises will always arise. Instil in employees a sense of

commitment to achieving their goals. If they are not achieved the question “Why not?” needs to be asked.


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15 MONTHLY EVALUATION SHEET

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EVALUATION SHEET - TASKS15.1


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15.1 EVALUATION SHEET - TASKS

Program Budget Actual Resp Perf Comments

Example

Win twenty new clients 20 18 PH 90% Did not have the new brochures ready on time

Contact five lost customers 5 5 JF 100% Well done

Conduct one direct mail campaign to consultants

1 0 JF 0% Forgot to run the promotion

J F M A M J J A S O N D TOTAL

ACTUAL

BUDGET

DIFFER

EVALUATION FOR THE MONTH OF

SALES TARGETS


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15.1 EVALUATION SHEET - TASKS

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Section 3.1

THEFINANCIALS16


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16 THE FINANCIALS

The next few pages include some typical financial statements that could be included with the plan. See the section elsewhere in this manual for a more detailed explanation of the financials.


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16 THE FINANCIALS

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Section 3.1

MANAGEMENTBUDGET16.1


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16.1 MANAGEMENT BUDGET

Many businesses prepare simplified budgets to analyse whether they are making a profit or a loss at the end of each month. These budgets are normally calculated on average gross margins. Set aside a couple of hours at the beginning

of each month dedicated to analysing the budgets.

Month Month Month Month Month Month Month Month Month Month Month Month TOTAL

Sales

Less Cost of Goods Sold

Gross Margin

Less Expenses

Total Expenses

Total Profit


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16.1 MANAGEMENT BUDGET

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Section 3.1

CASHFLOW STATEMENT16.2


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16.2 CASH FLOW STATEMENT

Detailed descriptions of these statements are included elsewhere in this manual. The Cash Flow statement is an

extremely important document which needs to be prepared on a monthly basis. A Cash Flow statement shows how

much cash the business will have on hand. It only takes into account when bills are actually paid and when monies are

actually received. For instance, suppose that $100,000 worth of goods are sold this month. Although this is registered

as a sale this month, the money will not be physically received until next month or even later. Therefore, it won’t

appear in the Cash Flow statement until the month it is physically received.

The same applies to expenses. An advertisement in the Yellow pages, costing $4,000 for the whole year, will only

appear in the Cash Flow statement when it is physically paid for.

It doesn’t matter how healthy the order book looks, if bills can’t be paid the business will fail.


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16.2 CASH FLOW STATEMENT

Budget Actual Variance

OPENING BALANCE

Cash Inflow

Cash Sales

Cash from Debtors

Interest Revenue

Other

Total Available

Cash Outflow

Wages

Rent

Credit

Accounting fees

Selling and Admin Expenses

Office Expenses

Purchases of Assets

Loan Repayments

Directors Drawings

Total Outflow

CLOSING BALANCE

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Section 3.1

INCOMESTATEMENT16.3


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16.3 INCOME STATEMENT

Budget Actual Variance

Sales

Less Cost of Goods Sold

Opening Inventory

Purchases

Duty on Purchases

Less Closing Inventory

Gross Margin

Add Miscellaneous Operating Revenue

Commission Revenue

Discount Revenue

Less Selling and Distribution Expenses

Advertising

Commission Expense

Delivery Expenses

Salaries - Sales

Vehicles

Depreciation on Showroom

Equipment


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16.3 INCOME STATEMENT

Administration and Management Expenses

Audit Fee

Directors' Fees

Office Expenses

Salaries - Office

Telephone

Depreciation on Buildings - Office

Financial Expenses

Bad Debts

Doubtful Debts

Discount Expense

Interest on Debentures

Net Operating Profit

Add Non-operating Revenue

Profit on Sale of Surplus Equipment

Net Profit before Tax

Less Provision for Income Tax

Net Profit after Tax

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Section 3.1

BALANCESHEET16.4


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16.4 BALANCE SHEET

CURRENT ASSETS

Cash

Receivables

Inventories

Total Current Assets

NON CURRENT ASSETS

Property, plant & equipment

Intangibles

Total Non Current Assets

TOTAL ASSETS

CURRENT LIABILITIES

Creditors & Borrowings

Provisions

Total Current Liabilities

NON CURRENT LIABILITIES

Creditors & Borrowings

Total Non Current Liabilities

TOTAL LIABILITIES

NET ASSETS

SHAREHOLDERS’ EQUITY

Capital - Company

Retained profits

TOTAL SHAREHOLDERS’ EQUITY


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16.4 BALANCE SHEET

MAUS Business Systems (Corprat Pty Ltd trading as MAUS Business Systems)

ABN 5508 4644 208. We abide by the privacy act.

W W W . M A U S . C O M . A U

1300 300 586

[email protected]

www.maus.com.au

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