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.
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