| This is the second of a series of articles describing | | | | Once the mission statement has been completed |
| how small business owners and managers can drive | | | | develop the positioning statement for competitive |
| their business growth and profitable development | | | | advantage and prepare the USP - your unique selling |
| through the creation and implementation of a business | | | | proposition. "Why the business is able to provide more |
| plan. | | | | effective solutions and greater value than the |
| I know the prevailing view among many small business | | | | competitors." |
| people is that "planning" is for the larger, more | | | | 2. THE SITUATION AUDIT- Internal and External |
| substantial business and "they are too busy running | | | | The situation audit is a description and analysis of past, |
| their business to have time for planning". Indeed, many | | | | present and future data (information) which provides |
| small business owners are "too busy" running the | | | | the basis for pursuing the business planning process. It |
| business, but they ignore, at their own peril and survival, | | | | is an organized method for: |
| that "failing to plan is planning to fail." | | | | - collecting pertinent information |
| I am convinced that the small business owner will | | | | - interpreting its effect on the business's environments |
| benefit from engaging in this business planning process | | | | (market conditions) |
| because of the nature of carefully examining and | | | | - analyzing significant trends |
| thinking through the way their business competes and | | | | - projecting all pertinent factors, which could influence |
| operates; - and how that will align with their | | | | company activities. |
| determination of "what business they want to be in". | | | | 3. WOTSUP ANALYSIS |
| This business planning process yields a stronger, more | | | | The acronym WOTSUP stands for Weaknesses, |
| profitable business which provides real value to its | | | | Opportunities, Threats and Strengths Underlying |
| customers and the marketplace. | | | | Planning. This step flows naturally from the fact base |
| The business planning process described in this article | | | | (Situation Audit). The Weaknesses and Strengths |
| is the most logical, pragmatic and practical examination | | | | constitute an internal analysis, i.e. "what are we at good |
| possible of the small business. This process is far from | | | | and bad at?"- |
| arcane or mysterious, but totally focuses on the reality | | | | Opportunities and Threats, on the other hand, form an |
| of the small business environments (the business, the | | | | external analysis. From this analysis, objectives can be |
| economy, competition, customers' needs, wants and | | | | formulated with specific action plans designed to |
| desires) as well as the determination and allocation of | | | | overcome weaknesses and threats by exploiting the |
| the firm's resources). | | | | business strengths and opportunities. |
| Business Planning Process - Eight Major steps | | | | 4. MAKING ASSUMPTIONS: |
| For the past thirty years, I have successfully used the | | | | Assumptions make planning possible. Without the use |
| following business and strategic marketing planning | | | | of assumptions, planning would be almost impossible. |
| process. The following process consists of eight major | | | | Since planning deals with the "futurity of current |
| steps which are sequential and continuous. I will | | | | decision-making" and events in the future are almost |
| describe the nature and function of each of these | | | | impossible to predict with unfailing accuracy; - |
| steps. | | | | assumptions make planning possible. |
| This process applies to all types of organizations; | | | | 5. DEVELOPING OBJECTIVES |
| regardless of size, products, services, or industry.... I | | | | Overall objectives are the real crux of the Business |
| have even used this process with a national religious | | | | and Marketing Planning Process. They deserve every |
| organization. | | | | last ounce of time and effort - often frustrating. The |
| 1. DEVELOP MISSION AND POSITIONING | | | | objectives form the umbrella under which the balance |
| STATEMENT | | | | of the whole planning structure is built. Because of the |
| 2. SITUATION AUDITa. Internalb. External | | | | key role they play they must be thought through and |
| 3. WOTSUP ANALYSIS | | | | be expressed in the most specific and concrete |
| 4. MAKING ASSUMPTIONS | | | | fashion. In simplest terms an objective is... "what do you |
| 5. DEVELOPING OBJECTIVES | | | | want to accomplish?" Objectives are prepared to |
| 6. STRATEGY DEVELOPMENT | | | | overcome weaknesses and threats developed in the |
| 7. SPECIFY TACTICS AND ACTIONS | | | | WOTSUP Analysis and to exploit the opportunities and |
| 8. PREPARE FORECASTS/BUDGETS/FINANCIALS | | | | strengths. |
| 1. MISSION AND POSITIONING STATEMENT | | | | 6. STRATEGY DEVELOPMENT: |
| With respect to the definition of your businesses' | | | | Once the objectives have been developed, the |
| purpose and mission, there is only one focus, one | | | | preparation of strategies is the next step in the |
| starting point; it is the customer or user of your | | | | process. Strategies, must explain, in a broad sense, |
| products/services. The user defines the mission of any | | | | how the objectives will be achieved. |
| function or business. The question "what is our mission | | | | 7. SPECIFY ACTION PROGRAMS: |
| or purpose" "what business do we want to be in?", | | | | After the objectives and strategies have been |
| can therefore be answered by only looking at your | | | | developed, describe the work to be performed. The |
| business from the outside, from the point of view of | | | | actions must be very specific; what work is to be |
| the customer or potential customer. What the user or | | | | done, by whom, how and when. |
| customer sees, thinks, or believes at any given time | | | | 8. FORECASTS/BUDGETS/FINANCIALS |
| must be accepted by your business management as | | | | PREPARED: |
| an objective fact to be taken seriously. | | | | The action programs when completed form the basis |
| By definition, the customer is purchasing the | | | | for budget preparation. The cost of each action and |
| satisfaction of a need or want. | | | | the revenues derived from the detailed actions |
| For example, here is a well-known and real example | | | | generate the operating budget and cash flows for the |
| of a business mission which defined the way in which | | | | Business Plan. |
| that company conducted its activities. | | | | Many organizations confuse planning with budgeting. |
| A drill bit manufacturer defined its mission as | | | | One important purpose of the budget is to ensure the |
| determining "what size holes customers need" their | | | | business has adequate financial resources to function. |
| focus was directly on customer needs and not on their | | | | Budgeting is about not failing, planning is about what is |
| product specifications. They were customer-focused | | | | possible. |
| and very successful. | | | | |