These elements are a summary of the introduction to Ibis business plan training and business plan development. They refer to a plan for an established business; there are some separate elements for a start up plan, and a different emphasis in certain areas. An example of how all these are integrated is available as a download of Castellan.

The aim of the plan should always be to answer the three central questions:

Where are we?
Where do we want to be (and when)?
How are we going to get there?

Bottom up rather than top down

Why?

“If you want to go fast, go alone, if you want to go far, go together”

Plans that are based on a reasoned individual analysis of customers, markets, competitors, internal company conditions and suppliers are far more likely to succeed than those that are created from an overview assessment.  Such plans are also more consensual, as the enterprise works with people rather than through them.

A bottom up approach also helps in breaking down organizational boundaries and spreading planning and control concepts throughout the enterprise.

How?

SBU
Corporate governance
Knowledge centre
Team building
Planning team
Planning resources
Industrial relations
Employee satisfaction survey
Software systems
Trade offs

Incremental change through integrated monitoring

Why?

“Planning is everything, the plan is nothing”

Any plan should be considered as a snapshot in a rolling process of change and development. This makes continuous plan modification and review essential.

How?

Knowledge centre
MIS
KPI
Benchmark
Target

Clearly defined responsibility and authority

Why?

“Expectations drive outcomes”

The involvement of employees at all levels in decision making and implementation is essential in creating a unified and productive enterprise.

How?

Leadership
Knowledge centre
Quality circle
Skills
SOP
Job description
MBO
Budget ratio
Project ratio
Investment appraisal
Bonus systems

Timescale

Why?

“Go to sleep in a dream, wake up in a nightmare”

Creating a rolling plan with short, medium and long term perspectives provides the enterprise with a clear road map for how short term actions will affect long term objectives.

How?

Planning horizon
Action plan
Monthly review
Quarterly review
Annual update
Exit plan

Successes, failures, lessons learnt

Why?

“Those that fail to learn the lessons of history are doomed to repeat them”

Enterprises make mistakes, and achieve often unexpected success. Planning should attempt to ensure that mistakes are minimized and opportunities exploited.

How?

Plan outcome review
Project outcome review
Contingency plan outcome review
Forecast error

Competitive analysis

Why?

“If you do not have competitive advantage, and cannot develop it, don’t compete”

Competitive advantage drives margins, repeat purchase, customer satisfaction, cash flow, new product development.

How?

Competitive profile
Customer satisfaction
Mystery shopper

Focus

Why?

“Jack of all trades and master of none”

Pareto’s Law is one of the most powerful planning tools in stating clearly that a limited number of business components will be the most important.

How?

Key employees
Key customers
Key products/services
Key regions
Key suppliers
Key competitors
Key costs

Quality

Why?

“Turnover is vanity, profit is sanity”

The established business increasingly depends on repeat business as it grows; repeat business comes from satisfying existing customers.

How?

Internal quality systems – ISO 9000, ISO 14000, Kanzen, Deming rules

Customer satisfaction

EFG
Quality circles
Training
Job rotation
Bonus systems
Succession planning

Market alignment

Why?

“Time and tide wait for no man”

There is no point in creating a plan that fails to take detailed account of the external and internal constraints as well as opportunities, dealing with the world as it is rather than as it should be.

How?

Business model
Legal review (health and safety, corporate, contract, environment, product)
Reality check

Risk management

Why?

“Intrepidity is stupidity recalled in tranquility”

Policies must be put in place to reduce the impact of minor or major changes in the external and internal environment.

How?
Risk minimization
Impact analysis
Golden circle balance
Implementation option balance
Project risk management
Testing
Contingency plan

Financials

Why?

Cash is king”

The plan must add up – returns must be achieved from investment for medium and long term viability.

How?

Budgeting
Funding plan
Cash flow
Profit and loss
Balance sheet

Communication

Why?

“Ignorance is strength”

The enterprise must ensure that all stakeholders are aware of their part in a plan which is designed for the benefit of all.

How?

Elevator pitch
Presentation
KISS
Planning team
Internal marketing
Employee satisfaction
Stakeholder relations
Dividend policy
Web strategy

What does a comprehensive business plan provide?

When properly structured, the most effective way of allocating resources

When properly structured, creates a virtuous circle

Better planning and control forces the enterprise to manage better, which leads to better planning and control

When properly structured, improves decision making

Enterprises have a framework against which decisions can be measured; poor decisions will be reviewed; good decisions will be learnt from.