In This Chapter

Running a business is not about mindlessly copying your competitors and simply aping whatever they are doing. That’s usually a reliable path to failure. You must plan for your business to stay ahead of the competition. Aim for your business to be the trailblazer—the leader of the pack. At the same time, you have to make sure that the path you take is the path your customers want you to take. In other words, your business’s objectives must be aligned to your customers’ needs and wants.

This chapter helps you take control of the planning for your business beyond your business plan.

Planning for your business should be a regular part of your role as a business owner and should involve your employees—especially those in leadership or management roles. Prior to beginning any planning sessions, gather the following information:

As a best practice, consider setting aside an entire day or two for your planning sessions, ensuring that all key individuals are available to participate.

Planning is an intense process and is best done away from interruptions. Get out of the office—away from the phones, the computers, and the other everyday stuff that will interrupt your session and distract you and the team.

To run your business effectively, you’ll need a variety of plans, all of which should be created in conjunction with each other and in support of the comprehensive strategic plan (see Chapter 7 for details on creating a strategic plan).

Think of the plans outlined in this chapter as precursors to your strategic plan. You can use them to help measure your progress against your goals and objectives. They can also be helpful when it comes to securing investments or partners for your business. As such, they are similar to your business plan and will probably draw on the work you did there.

You will want to develop the following plans:

All of these plans should be incorporated within your strategic plan. They should all include current resources and plans for future resource needs based on growth strategies.

Let’s look more closely at each of these plans.

A marketing plan should include information on how your business will market products and services. This plan should be tied to your product development plan. As you develop and release new products or services, they should be included in the marketing plan. For each product and service offered by the business, your marketing plan should include the following information:

The technology plan needs to include information about current technology use as well as future needs based on growth strategies. The plan should include the following information:

Your product development plan should look at your current product line, the life cycle of the products, and new product development based on customer needs. This plan will be closely tied to your marketing and sales plans as these groups—sales, marketing, and product development—must work very closely together. It should include the following information:

Your sales plan should have sales goals broken down by each product line or service offered by the business. This plan is tied to the marketing and product development plans. The sales plan should include the following details:

Your human resources plan will delineate both current and planned employee needs. It will include your organizational chart along with the following information:

Your disaster recovery plan should be focused on how you’ll get your business back up and running after a disaster. (Chapter 16 looks more closely at disaster recovery plans.) This plan should include the following information:

You might have other plans for your business, but these are the standard plans used by most successful businesses.

Some business owners prefer a rigorous planning regimen that’s rooted in spreadsheets and detailed regression analyses while others prefer a cocktail napkin, short and sweet, bare-bones approach; many are somewhere in the middle. One style is not necessarily better than the other—it all depends on what works for your business and your personality. Don’t try to adopt a style that doesn’t work for you.

David Merrill and Roger Reid, in their book Personal Styles & Effective Performance (CRC Press, 1981), discuss four personality styles: driver, expressive, amiable, and analytical. Each style has its own approach to business and requires a different spin on planning.

Let’s take a closer look at each of these styles so that you can understand where you might fit:

Another way to learn how you prefer to work with others and make decisions is to use the Myers-Briggs Type Indicator (MBTI). The MBTI theorizes that an individual’s personality is structured by four preferences: extraversion or introversion, sensing or intuition, thinking or feeling, and judgment or perception.

As with any personality inventory, no individual fits perfectly into any single type. However, understanding how you work best with others and how you think through making decisions enables you to be more successful in your business.

Determine how you work best—what methods are most comfortable for you—to determine how to plan for your business. Again, there is no right or wrong way; your personal style will be most effective for you.

A SWOT analysis helps you to better understand how your business is positioned to achieve your objectives. By understanding your business’s strengths, weaknesses, opportunities, and threats, you better understand how to position your products and services against your competitors and can plan for potential future threats to your business.

Let’s look at an example. You are considering developing a new product for your business. It will require an investment of $100,000. You want to figure out if the investment will be worth it—in other words, if the product will meet your customers’ needs. You use a SWOT analysis to determine whether to move forward with the investment in the new product by asking the following questions:

By performing a SWOT analysis on the new product opportunity, you are better prepared to make a decision to invest in the new product or to consider other avenues to increase revenue if this particular idea poses too many threats to your business.

A SWOT analysis is considered one of the most important tools for business planning. This analysis provides a variety of benefits, including …

A SWOT analysis is a great brainstorming activity, and you should always involve your key employees in the process. Use it as a precursor to developing your strategic plan. You may even choose to include customers, vendors, suppliers, and other partners in this activity, as they can provide quite a bit of insight to help you in developing products and services to grow your business.

When analyzing your strengths, weaknesses, opportunities, and threats, keep in mind that strengths, weaknesses, and opportunities can be internal or external to your business, while threats are almost always external to your business.

Let’s look at an example. Your business focuses on delivering team-building activities for other businesses. You are contemplating expanding your product line by developing team-building activities specifically for certain industry groups. You perform a SWOT analysis to determine if an additional program geared toward industry groups is a smart investment for your company.

You look first at the quality of your current product as compared to your competitors’ since you’ll be using this as a base to build the new product:

Your SWOT analysis should also take into account other areas of your business, such as your market share, customer service, marketing effectiveness, and financial strength. A SWOT analysis in each of these areas will help you to better plan your strategy and make a decision on whether to expand your product line.

Use your SWOT analysis to determine what you can leverage for your business’s success—either strengths or opportunities you can build upon. The SWOT analysis results will also help you to plan for threats to your business and address weaknesses, allowing you to continue your path of success. Use your SWOT analysis results to …

Let’s look back at our example. After completing the SWOT analysis, you will have the information you need in order to decide whether to expand your product line specifically to provide team-building programs for industry groups. If you decide not to move forward, you’ll have a solid set of reasons why it is not the right move for your business.

As you can see, a SWOT analysis enables you to make the best decisions for your company—provided you use the analysis appropriately and spend the necessary time to complete it. The SWOT analysis, when done right, will highlight aspects of your business to focus on now and will tell you whether certain decisions really make sense.

Simply conducting a SWOT analysis is not enough—you must do something with it. Use the SWOT analysis both as a regular part of your planning process as well as to make ongoing improvements in real time in your business.

The actions you take (or don’t take) as a result of conducting your SWOT analysis will have a major impact on your business’s ability to achieve important goals. For example, your goal is to offer three new training courses to your customers within the next six months, but the SWOT analysis you conducted shows you that you are weak in the areas of resource development (i.e., creating the courses) and quality control procedures. Thus it should be clear that you are not going to reach your goal of offering three new training courses within six months unless you are willing to make some changes in your process. Use the SWOT analysis to focus on the areas you need to improve upon to get back on track with your goals.

You can and should use a SWOT analysis as part of any major decision facing your business. For example, let’s assume that you are considering adding another location to your restaurant this quarter. This time period appears to be a perfect opportunity for you to do so, as the restaurant business has been picking up and people are eating out more frequently, both nationwide and in your area. Prior to making such a large decision—an initiative that will require sourcing a location, hiring additional staff, purchasing or leasing equipment, obtaining a license to operate the restaurant and a liquor license, and so on—you will want to conduct an in-depth SWOT analysis on your current restaurant.

That analysis might show that you are not competing effectively against your competition in your existing restaurant. Suppose that it shows your competition’s latest menu offerings to be a major threat, one that is causing a steady decline in your profits. This is definitely something you want to take into account. You might also learn that your customer service is not up to par—in fact, customer service shows up as a major weakness in your current operation.

If you evaluate the results of that SWOT analysis carefully, you would probably make the decision not to open another restaurant, regardless of events in the larger economy, because your current restaurant needs some attention first. There are clear problems on the horizon, and you must address them before expanding. You don’t want to be saddled with two problem investments!

Update SWOT analysis at least annually. The only thing worse than relying on an outdated SWOT analysis is to make decisions about your business without any SWOT analysis at all!