Many facts about business plans never change with time and are basically set in stone, including the processes of preparation that remain the same for most business models, methods of research might differ, but research still needs to be accomplished, and a financial feasibility must include projections based on sound assumptions, and this leads to a statement that should be made right away to get it out in the open, and that is the fact that no business plan is ever 100% dead on accurate, but of course, I can guarantee 100% that having no plan is absolutely never the right thing to do either, so as a result it’s important to examine the actual results of the business compared to those projected in the business plan.

Most plans by their nature are wrong, and yet vital, it’s an unexpected and surprising thing to hear especially if you have never put a business plan together, so after making a statement like that where else do we go, except to the very core of what business and strategic planning is all about.

Let me start out by saying that those who are deeply involved in plans prepare projections that many times are incorrect, and no one I know even came close in predicting the steep plunge in the global economy in the fall of 2008, so it goes without saying that those who are deeply involved in business planning processes around the world have been going through a lot of changes, adjustments and corrections, and multiple reviews and revisions.

So you see why my opening statements about needless ineffective business plans, and yet their importance starts to make sense, especially as we look ahead to the rest of this year, many sober forecasts are still in the review and revision process and reflecting the current reality of the global economic situation, which always brings up the question why do we do business and strategic planning in the first place, is everyone just wasting their time developing plans and forecasts? Now the answer should always be obvious that although the results are inaccurate at times, how can we determine where we are if a map hasn’t been produced to show us how we got there, and of course, more importantly, where we are going?

If when you review your plan prepared in the past couple of years, of course the results should be greatly different from what actually took place, you should compare the two in detail and look not only where the differences are, but where the “greatest differences” exist, for example, where expenses were tied to sales, where sales performed as expected or didn’t perform as expected, and look for how all the numbers were supposed to tie together, not just why they didn’t.

Now, if you are like the many thousands of global entrepreneurs that did not have a plan, then this might be a really good time to get the process started in order for you to develop and have a much clearer and concise view of your future business and the direction it is heading, and you should start by making some simple projections for sales, costs and expenses, and at this time don’t worry about whether they’re wrong or not, just try and make sure that you check each month to determine where and how and in which direction the numbers were incorrect so that you can correct and make adjustments to the information, and the benefit of this whole process should bring you much closer to the action of what is taking place in the local and global markets, and greatly increase your awareness of the actions you need to take in a more timely fashion to increase your success, and your intimate understanding of the details of your business will grow exponentially.

By implementing the review process on a monthly basis, if you are wrong you are only wrong one month at a time, and as you use the plan comparison to actual results and associated analysis to see more closely what is happening exactly, the accuracy of your adjustments will improve, and in the future, results will be much more accurate and in tune with market activity, and you should see a pattern of monthly improvements.

These implemented planning and analysis steps will put you in a much better position to forecast more accurately when the markets should start to improve, as they will at some point, and you will be able to use what you learned in the process to recognize the signs, anticipate what will take place, and plan your actions accordingly.

So although the results of your planning may be wrong and inaccurate, it is still a critical key to successful business and an essential tool for successful global entrepreneurs, as they learn that in addition to preparing an initial strategic plan, an important part of the process is making necessary changes and adjustments in determining how to recover in the most effective and efficient manner, and how would you know what steps to take in the recovery process if you didn’t prepare the business and strategic plans in the first place.

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Objectives clarify what it is you are trying to accomplish in specific, measurable goals, and for an objective to be effective, it needs to be a well-defined target with quantifiable elements that are measurable, whereas your vision statement is expansive and idealistic, and the mission short, powerful, and memorable, your objectives are designed to focus your resources on achieving very specific and certain results, and the purpose of well defined objectives is to cause meaningful action.

You must realize that most objectives can be broken down into general headings including financial, marketing and sales, operations, human resources, research and development, manufacturing, and personal.

Now in order to create a solid objective you must clearly describe the activity required, such as the introduction of new products, along with what will happen and when, such as a book, by 6/30, and a CD ROM by 8/15. You must then take the facts and put them into complete objectives, such as introduce a book by June 30^th and a CD-ROM by August 15^th.

Now you must think back to the vision statement once again, and remember, your vision statement looked five years into the future toward a specific destination in time that you want to arrive at, and think about the activities you need to accomplish this year in order to move toward that specific destination. Use the information to create five to seven objectives that are critical to arriving at your envisioned future.

Just like the rest of your business plan the objectives and goals are a critical component that should not be taken lightly and require diligence to establish these destinations on the road map you are creating that is the Business Plan of your business model, and although they might seem ambitious to some, they must be both measurable and achievable to you and your management team.

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Everyday I speak with Entrepreneurs about their business, whether they are in the process of starting, buying, expanding their existing, or trying to survive the current economy, and I marvel at the Entrepreneurs that are able to understand the fundamentals of the industry their business are classified as a part of, but I am also dismayed at the Entrepreneurs that tend to overlook or ignore the importance of staying current with their industries trends, new technology, and shifting markets, especially the importance of gathering the most current Industry information as part of the Business Plan process.

The service industry fundamentally sells units of time or labor, and a service is therefore perishable since it is directly linked to time, and any excess labor capacity cannot be stored for later use as it must be used now or forever lost, a fact that is true because production and consumption cannot be separated.

Another strategic issue of a service based business involves the variation in quality that exists through the delivery of the service itself, since unlike a product where manufacturing processes can be tightly controlled to ensure certain tolerances of quality, and a service is based on the “difficult to standardize” nature of human behavior.

The last major attribute that makes service based businesses unique, is their intangibility since there are little if any physical characteristics to the output, which causes many marketing professionals to call this problem “selling the invisible.” Of course, there are many ways to make a service tangible with a little marketing imagination.

For a service based business plan you need to focus heavily on the issues including minimizing the problem of excess capacity and perish ability, determining the staffing levels you need to deliver your service, maximizing their delivery capacity, developing processes to minimize service variations and maximize service quality levels, determining how you will market your service effectively, since it can’t be pictured in an advertisement or displayed in a store, and determining which tangible cues will you use.

A retailer is an organization that purchases products for the purpose of reselling them ultimately to consumers, and the many times location may be the single most important factor in the consideration of what makes a successful retail business, since as they say in the retail industry, “location, location, location.” A business plan for a retail business must contain a thorough location analysis covering such issues as selling square footage, access, visibility, signage, costs, renovations, lease terms, available parking, traffic counts, area demographics, and so forth.

Emergence of new types of stores and expansion of product offerings by traditional stores have intensified retailing competition, and retail positioning involves identifying an under served market niche and serving the through a strategy that distinguishes the retailer from others in the mind of the consumer, and a retail business plan should thoroughly discuss its positioning strategy in the market place.

Store image refers to the physical elements in a store’s design that appeal to consumers’ emotions and encouragement to buy, while merchandising refers to the inventory mix a store will provide and how it is displayed out across the store’s floor plan, and the marketing section of a retail plan needs to discuss both the image and merchandising strategies that will be employed.

The last critical consideration a retail business plan should address is the inventory requirements, and you should detail how much inventory you have or will require in both cost and retail dollars. The retail industry usually works on several key inventory metrics including sales per square foot and inventory turns, which is the number of times the inventory walks off of the shelf in a year, and you should be aware of such metrics and how they are presented and in your business plan, since most trade associations collect and report such data.

In the manufacturing industry a supply chain is all the organizations that are responsible for bringing your products to market, and it might be shallow to say when a supplier sells raw material to a manufacturer which then sells direct to a consumer, or it may be deep to say when a sub-supplier provides a prime supplier with the parts who then sells to a manufacturer, to a wholesaler/distributor, to a retailer and so on. Understand that your business plan should discuss in detail, both your supply chain and any coordination and communication issues related to its management.

The competitive environment in manufacturing has made high product quality essential to success, and you should discuss any quality processes, programs, or certifications that you have or require, in order to successfully compete in the global market place.

With regard to materials and labor you should present a discussion in your plan about its supply and availability as well as how the cost will be controlled, and you should also present some details about what margins you are expecting, which is the calculation of taking price minus cost of producing your product.

Finally, how you sell your products and take them to market is obviously as important as how you make them, and be sure and don’t skimp on the marketing section and present only product production and manufacturing processes, as your discussion should include your sales and distribution strategy through such channels as sales agents, sales representatives, direct marketing tactics, distributors, or retailers. Make sure your plan discusses the pricing expectations that each channel member expects to realize, along with the associated costs, as the channels move from your business toward the consumer, and remember during the process that you are not only creating the information for potential lenders or investors, but for yourself as well, since it will be the beginning of your detailed operations and management procedures, and the information must be clear, concise and focused to increase the changes of achieving the goals you will set in the financial projections and feasibility section of the Business Plan.

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When we look at the different components and segments of the Business Plan, we find it curious that there are terms that are seemingly interchangeable, and the terms that are most often used interchangeably are mission and vision, but there is a vast difference between a mission and vision, and while the two concepts play-off of one another they work in very different ways.

Mission by itself, is the purpose or reason for the very existence of your business, so think of it as a general heading or direction, and a mission is what you stand for as well, should be timeless and it should rarely, if ever, change and it should always stand the test of time in that there is no end to the mission.

A vision by itself is a specific future destination or a “dream with a deadline,” and having said that you should understand that the vision should change over time, and the vision must say “yes” to some ideas and “no” to others, since it’s about what the future might be, could be, and shouldn’t be, for example, “To put a man on the moon before the end of the 1960’s.”

You must realize that mission is all about preserving the core of which provides continuity and stability to your business, like a fixed stake in the ground or the horizon limiting possibilities, and always acting conservatively, while the vision is about stimulating progress, urging continual change, compelling constant movement, expanding possibilities, and revolutionary change.

Now to build your mission always remember, a mission statement should be somewhat timeless and it should apply not only today but possibly even twenty to fifty years from now, and it should put forth a general direction or heading, by stating what it is that you stand for, and in essence, a mission can never really be achieved since it should be on going, and if it can be achieved if completed, then it is a vision not your mission, and you should think of your mission as your true north heading on your compass that will always be there pointing the way. Many times the best mission statements are also the simplest, as Microsoft’s mission is as simple as “Help entrepreneurs realize their full potential”.

To build your vision, you must ask yourself “What big goal do you want to try to achieve in five years from now, what does success look like in five years, and in five years from now, how should your business be different than it is now, and using your own metrics of success what approach should you take to accomplish in five years for you to consider your business successful? Once again, the simplest statement is many times the best, and Microsoft’s vision is as simple as, “a computer in every home running Microsoft software”.

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