Business Plan Development
A business plan is critical in potential the success of a going concern and profitable enterprise. Of all businesses below $12 million in revenues 87% do not have business plans (Harvard Business Review, 2006) and failing to have a detailed business plan is considered one of the primary reasons for business failure during the first five years of a company’s existence. Many reasons are cited for having a well thought out and detailed business plan not the least of which are:
- Flushes out potential barriers in growth and details plans to overcome many challenges that a business faces (competition, market viability, growth plans).
- Provides business metrics such as quantifiable measures which are used to track and assess the status of a specific business It’s important to note that business metrics should be employed to address key audiences surrounding a business, such as investors, customers and different types of employees, i.e. executives. Some business metrics include tracking sales revenue, asset / turnover ratio, return on sales and return on assets, Business metrics are also used to reflect company’s performance against others in the same industry, or same geography. In the long run, these indicate whether the enterprise will live or die, compared to competitors. Customer loyalty and retention, (a 5% improvement in customer retention will yield between a 20 to 100% increase in profits across a wide range of industries) cost of client / customer acquisition.
- Provides operating productivity. OPR’s are applied to almost any aspect of business compared to industry norms by industry statistics, or accumulating statistics over time such as size of gross margin, monthly profit or loss, utilities, insurance, taxes, and the salary, overhead costs. variable cost percentages, hours worked per process, return on investment (ROI) to list only a few.
- Contains financial budget creation, cash flow, accounts payable, accounts receivable, direct costs, operating margins, net profit, and cash burn rate, ownership structure and management structure, licenses, trademark registration, patents.
- Used to prepare an Executive Summary for use with investors (Angels, Venture Capitalists, silent partners, stock share availability for purchase). The Executive Summary is used as a snapshot that provides information of reasons to invest and provides current market liquidity.
- Includes essential operation and marketing plans that detail online marketing strategies as well as advertising strategies, market specific marketing detail, etc.
- Provides a detailed exit plan for the company ownership / key executives and company liquidation.
- Details names, roles / responsibilities of each of the company’s key executives and officers.
EPS constructs business plans using completed source of documents provided by the client:
- Research on the client company / enterprise is conducted by Executive Performance Solutions, LLC and we learn as much as possible about the client’s business, competition, environment, threats, etc. but a Business Plan is simply compiled and completed using much of the original documents provided by the client. Many iterations are submitted to the client for each conceivable detail and consideration inclusion before the plan can be considered “published”. A Business Plan is never complete, it’s a “living” document and must be understood as such. EPS will continue to maintain, refine and develop the plan as an ongoing assignments on an “interim” basis as long as the client wishes for updates and next generation changes.