Business Plan Chapter 7 part 2

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Chapters: 1 2 3 4 5 6 7 8 9 10 11 Oil & Gas publications

The second question primarily involves trends in the company’s existing space that can be used to expand. Continuing with the ATV example, this manufacturer could determine that the aging baby-boomer market is growing fast and their disposable income is large. It therefore makes sense to develop a line of ATV especially for these boomers. These ATVs might be more comfortable and easier to ride.

To address properly these questions, your business must:

1. Perform thorough hard and soft research: Failing in a new situation can be catastrophic and can even harm your existing brand name and company image. Hard research includes quantitative figures. Examples of hard research are estimates of the size of a market and the market share held by competitors. Soft research includes intelligence gleaned from more qualitative sources. Combined, hard and soft research can highlight trends and uncover opportunities. It will also enable you to identify the key success factors in exploiting your potential opportunity.

2. Perform quantitative analyses: Data obtained through research must be analyzed to create intelligence and insight. Because we are exploring expansion, the ideas necessarily relate to less familiar territory. Quantitative analyses includes: (i) statistical analysis, (ii) computer and financial modeling, (iii) scenario planning and (iv) valuation analyses.

3. Tap knowledgeable leaders: Get advice from individuals with deep expertise. They could be a professor, a business leader, or a consultant. These people provide insights that can solidify the growth plan.

Based on your research and opportunities, you need to answer additional questions and create a growth plan. The key topics are:

2. What are our organization’s greatest skills or strengths relating to these opportunities? 3. How can our organization more closely align our skills with the opportunity?

5. What investments are required? How much money will we need to execute these ideas?

6. What is the size of this opportunity and what is the financial reward for performing well?

If done well, the answers to these questions enable you to select a specific growth opportunity that is compatible with your company’s capabilities. This is called strategic fit.

Now comes the hard part. A great growth strategy must be implemented effectively. Many of the plans developed by the most prestigious consulting firms fail due to poor implementation. It is critical to have the following effective structures and processes in place:

Organizational design Decision-making processes Learning processes Communication systems Control mechanisms Information technology Training frameworks Recruiting frameworks Performance metrics Employee incentives Distribution & fulfillment systems

Procurement and in-bound logistics systems Inventory management systems Customer feedback mechanisms

Your planning should include specific activities and a related timetable. Since the future never turns out exactly as planned, your plan needs regrouping points to provide options and flexibility. All plans require adjustment as unexpected events arise.

We assist businesses address these complex issues. Our involvement provides the following advantages:

1. We provide an outside and independent perspective. We supplement our full-time personnel with skilled university professors. We are able to identify important considerations simply because we are not as close to the details as you are.

2. Our background as a financial consulting firm has taught us the importance of research, investigation and quantification. We back our plans with facts and calculations that help ensure success.

3. We assist with implementation. Unlike some of our well-known competitors, we are not too proud to get our hands dirty. We can develop the same fancy planning books, but we will also help in those important areas that might otherwise prevent success.

4. Our approach is flexible. We will work only in those areas where you believe your internal resources need assistance. By working with your existing team, our fees remain modest.