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Eight Steps To The Next Level-? The Business Plan ?The Engine Of Small Business Development

Eight Steps To The Next Level…

The Business Plan

“The Engine of Small Business Development”

This is the second of a series of articles describing how Small Business Owners and Managers can drive their business growth and profitable development through the creation and implementation of a Business Plan.

I spent the past 30 years as a business – to -business Management Consultant in Business and Marketing Planning and as a “hands-on operating Manager and senior executive of global Executive Management training organizations.

I know the prevailing view among many small business people is that “planning” is for the larger, more substantial business and “they are too busy running their business to have time for planning”. Indeed, many Small business owners are “too busy” running the business, but they ignore, at their own peril and survival, that “failing to plan is planning to fail.”

I am convinced that the small business owner will benefit from engaging in this business planning process because of the;

Nature of carefully examining and thinking through the way their business competes and operates; – and how that will align with their determination of”what business they want to be in”…

This business Planning Process yields a stronger, more profitable business which provides real value to its customers and the marketplace.

The Business Planning Process described in this article is the most logical, pragmatic and practical examination possible of the small business. This process is far from arcane or mysterious, but totally focuses on the reality of the small business environments (the business, the economy, competition, customers’ needs, wants and desires) as well as the determination and allocation of the firm’s resources).

Business Planning Process – Eight Major steps

For the past thirty years, I have successfully used the following Business and Strategic Marketing Planning Process . The following process consists of eight major steps which are sequential and continuous. I will describe the nature and function of each of these steps.

This process applies to all types of organizations; regardless of size, products, services, or industry…. I have even used this process with a national religious organization.

1. DEVELOP MISSION AND POSITIONING STATEMENT

2. SITUATION AUDIT

a. Internal

b. External

3. WOTSUP ANALYSIS

4. MAKING ASSUMPTIONS

5. DEVELOPING OBJECTIVES

6. STRATEGY DEVELOPMENT

7. SPECIFY TACTICS AND ACTIONS

8. PREPARE FORECASTS/BUDGETS/FINANCIALS

1. MISSION AND POSITIONING STATEMENT

With respect to the definition of your businesses’ purpose and mission, there is only one focus, one starting point; it is the customer or user of your products/services. The user defines the mission of any function or business. The question “what is our mission or purpose” “what business do we want to be in”? can therefore be answered by only looking at your business from the outside, from the point of view of the customer or potential customer. What the user or customer sees, thinks, or believes at any given time must be accepted by your business management as an objective fact to be taken seriously.

By definition, the customer is purchasing the satisfaction of a need or want.

For example, here is a well-known and real example of a business mission which defined the way in which that company conducted its activities.

A Drill Bit manufacturer defined its Mission as determining “what size holes customers need” Their focus was directly on customer needs and not on their product specifications. They were customer-focused and very successful.

Once the Mission Staterment has been completed you develop your Positioning Statement for Competitive Advantage and prepare your USP – Your Unique Selling Proposition. “Why your business is able to provide more effective solutions and greater value than your competitors.”

2. THE SITUATION AUDIT- Internal and External

The Situation Audit is a description and analysis of past, present and future data (information) which provides the basis for pursuing the Business Planning Process. It is an organized meth for:

• collecting pertinent information

• interpreting its effect on the business’s environments (market conditions)

• analyzing significant trends

• projecting all pertinent factors, which could influence company activities.

3. WOTSUP ANALYSIS

The acronym WOTSUP stands for Weaknesses, Opportunities, Threats and Strengths Underlying Planning. This step flows naturally from the fact base (Situation Audit). The Weaknesses and Strengths constitute an internal analysis, i.e. “what are we at good and bad at?”-

Opportunities and Threats, on the other hand, form an external analysis. From this analysis, objectives can be formulated with specific action plans designed to overcome weaknesses and threats by exploiting the business strengths and opportunities.

4. MAKING ASSUMPTIONS:

Assumptions make Planning possible. Without the use of assumptions, planning would be almost impossible. Since planning deals with the “futurity of current decision-making” and events in the future are almost impossible to predict with unfailing accuracy; – Assumptions make Planning possible.

5. DEVELOPING OBJECTIVES

Overall objectives are the real crux of the Business and Marketing Planning Process. They deserve every last ounce of time and effort – often frustrating. The objectives form the umbrella under which the balance of the whole planning structure is built. Because of the key role they play they must be thought through and be expressed in the most specific and concrete fashion. In simplest terms an objective is… “what do you want to accomplish?” Objectives are prepared to overcome weaknesses and threats developed in the WOTSUP Analysis and to exploit the opportunities and strengths.

6. STRATEGY DEVELOPMENT:

Once the objectives have been developed, the preparation of strategies is the next step in the process. Strategies, must explain, in a broad sense, how the objectives will be achieved.

7. SPECIFY ACTION PROGRAMS:

After the objectives and strategies have been developed, describe the work to be performed. The actions must be very specific; what work is to be done, by whom, how and when.

8. FORECASTS/BUDGETS/FINANCIALS PREPARED:

The action programs when completed form the basis for budget preparation. T the cost of each action and the revenues derived from the detailed actions generate the operating budget and cash flows for the Business Plan.

Many organizations confuse planning with budgeting. One important purpose of the budget is to ensure the business has adequate financial resources to function. Budgeting is about not failing, planning is about what is possible.

Let’s face it, we are all creatures of habit and we like to take the “easier” route, if at all possible. This is not to say that we simply do not care about issues that we seem to have no control over, or that may affect other people out of our sight or even generations in the future, but we just don’t seem to have as much focus when we are not directly affected. This can lead to apathy and inaction, yet through education we can come to terms with the fact that we really should be proactive and make changes for the greater good.

What incentive is there for me to change over to biodiesel fuel? There are a number of good reasons for doing so and the answers have added credibility now, even compared to only five or 10 years ago. We know that biodiesel has numerous ecological reasons to support its use, to say nothing of the economic benefits.

Firstly, carbon emissions are now definitely the enemy of the peace. The “green” movement has become main-stream. Governments are talking about forcing a reduction in the use of regular fuels and adding taxes to the cost of gasoline, as an example. The government has also mandated stricter fuel economies and greenhouse gas emissions may well become hazardous pollutants. In the light of these points, we should note that biodiesel reduces carbon dioxide emissions associated with traditional fuel options and by a factor of as much as 80%.

Nowadays, homemade biodiesel fuels can use waste products such as leftover cooking oils, helping to cut down on the issues associated with waste disposal. Biodiesel may also be derived from vegetable products, such as soy, which is readily available within our agricultural communities. Just think of the incredible changes that we could bring to those communities by using their crops to full advantage for our transportation needs.

Alternative fuels such as biodiesel should be considered for our vehicle transportation needs in much greater quantities, and if this occurs, we will not be so vulnerable to the ups and downs associated with oil production prices when manufactured in foreign lands. We now know what regular diesel here in the UK at £5.00 a gallon or $8.00 represents, but five or 10 years ago could not even imagine such a thing. Biodiesel can be made from domestically available sources and can help promote our energy security in no uncertain way.

The US automotive industry is going to change significantly over the next five years and we’re likely to see an influx of European style – smaller, more economical cars. On that continent, more than half of the vehicles actually run on diesel and can readily accept biodiesel fuels. There will undoubtedly be a trend in the United States toward the adoption of these types of vehicles, giving further credibility to the thought of making biodiesel widely available through expanding distribution networks. By 2020, biodiesel fuel will be a staple part of our economy.

Throughout our communities, biodiesel can be very good for us and through education we could all learn to understand this. What are some of the top 10 reasons to think about the use of biodiesel?

1. Emissions.
According to the EPA, biodiesel can have considerable health benefits in comparison to its alternatives. In the case of carbon dioxide, the primary greenhouse gas, biodiesel represents a 78% reduction. This is especially important as the EPA has recently confirmed that greenhouse gases are hazardous to our health.

2. High BTU.
BTU is a measurement used to rank any energy output (British thermal units) and pure biodiesel has the highest energy balance of any fuel. It is several times more effective than traditional gasoline when we compare the units of fossil fuel energy required to produce an equivalent amount.

3. Safety first.
Biodiesel has a high combustion point and as such is much safer than traditional alternatives. In its purest form it is biodegradable and is almost completely non-toxic.

4. Promotes less waste.
If you use waste oil, such as cooking oil received from restaurants, then the resulting biodiesel will truly have turned a waste product into usable energy. Very often, this waste oil finds its way into our lakes and waterways rather than being correctly disposed of.

5. Can be used without modification.
With no modification, biodiesel mixes with petro diesel. It can also be used in a variety of strengths and mixed with regular diesel. As such it is an option available right now to make your diesel engine vehicles more sustainable.

6. Longer lasting.
Wouldn’t it be nice to get more life out of your engine – biodiesel employs additional lubricity to ease wear.

7. Help our energy security.
Soy is one of the more widely available and domestically grown products in the USA. By keeping costs within the countries where biodiesel is produced, we help to secure our economies from the crazy spikes we have seen plaguing traditional energy availability.

8. Could provide replacement jobs.
We have lost so many important jobs to the brutal downturn in the economy. We could direct money for new jobs toward biodiesel fuel production, rather than depleting our revenues, creating jobs overseas by buying petroleum offshore.

9. Regions benefit.
Regional production of biodiesel can help repair local economies that have been severely damaged during the downturn. Farmers can get a new and dynamic return for their work and can view stability for the future as demand increases and is solidified.

10. It’s better for our health.
While widespread use of biodiesel fuel will certainly lead to fewer greenhouse gases in our environment, helping to reverse climate change and potential environmental damage, it will also emit fewer carcinogens and other cancer-causing components.

All in all, a considerable number of reasons to consider making biodiesel for our country’s future transportation needs. Create your own trend by mixing a few gallons of homemade biodiesel. Your actions may well catch on, but remember, before you begin, always follow the “essential safety advice” from the experts!

Q. Does biodiesel harm an engine?
A. Biodiesel may be used in a conventional petro diesel engine without any modification whatsoever. This has been tested over millions of miles by a number of different agencies and in every conceivable situation. Bus fleets and commercial haulage companies have been using biodiesel in their operations for many years and reporting great success.

Q. Is Biodiesel experimental?
A. No, it has been in widespread use since the 1980s and has become more accepted in the United States over the last 10 years. Biodiesel actually dates back to the 1930s when it was originally mooted, but the process of converting vegetable oils into this fuel was perfected in the 80s.

Q. Is this alternative fuel accepted by the government?
A. The Clean Air Act, subject to the 1990 modification, recognises biodiesel as the only certified alternative fuel. The EPA recognises and authenticates the use of certified biodiesel fuel.

Q. Where can I get biodiesel?
A. There are now 14 major production facilities in the US and a number of distribution channels. In addition, many hundreds of smaller operations exist in localities around the nation. As the number of diesel engine cars increases, additional manufacture plants and distribution points will emerge.

Q. Can I just use conventional vegetable oil instead?
A. Absolutely not, vegetable oil must be converted through transesterification into biodiesel fuel first. Alcohol is used with a catalyst to extract the liquid used as biodiesel.

Q. Does it work in cold weather?
A. Biodiesel does have a tendency to gel in very cold conditions, just as conventional petro diesel. You should take the same precautions as you would when using regular diesel in such conditions.

Q. Is biodiesel good for the environment?
A. Our planet is plagued by carbon emissions and it is good to know that biodiesel is essentially carbon neutral. Biodiesel is made from vegetable crops and these were previously known as “sinks” for carbon, so the fuel is considerably more advantageous from an environmental perspective than the highly toxic, carbon emitting petroleum we otherwise use.

Q. Will I have to worry about clogged filters?
A. Biodiesel has some solvent properties and may dissolve certain deposits which have built up on your tank wall or within your pipes. These deposits could then become trapped in filters and it is advisable to clean or change your filters when you first convert from conventional diesel to biodiesel, making way for a cleaner running, longer lasting engine.

Q. Can I make biodiesel at home?
A. Many people have been successful at making homemade biodiesel. As long as you follow the essential safety advice and use common sense, making biodiesel is not particularly difficult. This can be a great way of making a difference, environmentally!

Q. As interest in biodiesel increases, will this cause over-harvesting?
A. We need to ensure that biodiesel growth is itself sustainable and ensure that we do not over-harvest and cause an imbalance in agricultural crop availability, especially as we need these absorbers of carbon in place. This would be a challenge as things unfold.

In this day and age, it seems that every one of us is turning into an environmentalist. It wasn’t that long ago when a certain element of scorn, if that’s not too harsh a word, was attributed to those who vociferously extolled the virtues of sustainability. Some of them were called “tree huggers,” and as we had little to worry about back then and a somewhat devil may care attitude, we disregarded climate change issues almost entirely. Times have certainly changed and more especially in the last five years or so. These days climate change news is everywhere and the subject is the darling of the mainstream press, with climate protection issues likely to result in stringent legislation before long.

Now it is more than just fashionable to be green, as we realise that we must reduce our reliance on traditional fuels, the oil, coal and gas that produce greenhouse gases and raise the temperature of the earth. Energy is so much a part of our lives and our existence is so complicated, yet we are still mostly unaware of the size of our individual carbon footprints.

The way that we get around – our means of transportation, are for the most part principal emitters of carbon, be they considered individually or as a group. We also know that conventional diesel and gasoline are very expensive commodities and we are in large part reliant on foreign sources and subject to a variety of external influences affecting pricing, availability and economic security.

Change will be slow to come, unfortunately. Not only are we essentially creatures of habit, but we have built up such a reliance on traditional fossil fuels that a major part of our industrial infrastructure relies on the extraction and generation of these fuels, together with distribution. It’s fair to say that the oil industry in particular has a very strong political lobbying support and newer, alternative options face an uphill battle to get their message out to a largely uneducated public.

Biodiesel fuel as an alternative is, at face value, very attractive. A relatively simple process derives fuel through a process of separation, by mixing vegetable oil or animal fats with methanol. In many cases, biodiesel fuel is originally derived from soybean products, which grow and are plentiful in the United States.

Biodiesel is essentially carbon neutral and has very low sulphur rates, especially compared to its alternatives. The product can be used in conventional diesel engines without modification and can be mixed with petro diesel fuel in any ratio whatsoever. Such an alternative is not available on a widespread basis at this time, as the infrastructure is simply not in place and distribution solutions undeveloped. As our collective psyche moves more toward the idea of hybrid vehicles, however, more and more interest is being generated in biodiesel as an option.

At present, homemade biodiesel may well be an option for you, as with a little bit of application it is within reach of everybody. These days, making biodiesel has become a labour of love for many thousands of people who have realised the value of making considerable personal effort to help reduce carbon emissions. Although making biodiesel can be very rewarding, personally and financially, keep in mind that if you do decide to try making it for yourself, always carefully review what the experts call, “essential safety advice,” before you begin!

In this day and age, it seems that every one of us is turning into an environmentalist. It wasn’t that long ago when a certain element of scorn, if that’s not too harsh a word, was attributed to those who vociferously extolled the virtues of sustainability. Some of the less charitable of us called these people “tree huggers” and as part of our free spending, devil-may-care attitude of the time we spent little regard to the overall issues of climate change and global warming. Over the last five years or so, times have certainly changed. Climate change is now big news, being a popular subject of the mainstream press and climate protection is likely to result in significant rafts of legislation in the near future.

Now it is more than just fashionable to be green, as we realise that we must reduce our reliance on traditional fuels, the oil, coal and gas that produce greenhouse gases and raise the temperature of the earth. Energy is so much a part of our lives and our existence is so complicated, yet we are still mostly unaware of the size of our individual carbon footprints.

Our methods of transportation are primary emitters of carbon and we are fully reliant on individual and public forms of transportation on a daily basis. Gasoline and conventional diesel fuel are very expensive commodities and as we mostly rely on foreign sources for these fuels, external influences can directly affect availability, pricing and our very economic security.

It seems that change will be slow to come. We have got to learn how to change our habits and to wean ourselves off our reliance on these fossil fuels, even though our very infrastructure relies so heavily on the sourcing, generation and distribution of these fuels. It’s fair to say that the oil industry in particular has a very strong political lobbying support and newer, alternative options face an uphill battle to get their message out to a largely uneducated public.

Biodiesel fuel as an alternative is, at face value, very attractive. It is produced by mixing vegetable oil or animal fats with methanol and a process of separation derives this alternative fuel. In the United States, biodiesel fuel can be derived from soybean products, with plentiful availability.

Biodiesel is essentially carbon neutral and has very low sulphur rates, especially compared to its alternatives. It can be used in conventional diesel engines without any issues at all and can be mixed in various solutions with petro diesel if required. Such an alternative is not available on a widespread basis at this time, as the infrastructure is simply not in place and distribution solutions undeveloped. We’re becoming more and more aware and interested in hybrid vehicles, and we’re also generating a buzz around biodiesel as an excellent alternative option.

You may be able to consider homemade biodiesel within your household as it is within the reach of most. For some, making biodiesel is more than a labour of love and thousands of people consider it their contribution in the war against carbon emissions. Although making biodiesel can be very rewarding, personally and financially, keep in mind that if you do decide to try making it for yourself, always carefully review what the experts call, “essential safety advice,” before you begin!