“In preparing for battle I have always found that plans are useless, but planning is indispensable.” – Dwight D. Eisenhower

Based on the news headlines, entrepreneurs are battling for survival every day. Economists and business leaders agree that we are in the midst of the most challenging business climate in 25 years.

How do we “win the battle?” As Eisenhower said, we must plan effectively. In business, that entails developing a comprehensive strategic plan. So what is a strategic plan?

First, let me define what a strategic plan entails. Often, the term business plan and strategic plan are used interchangeably. They are not the same. Typically, when bankers or entrepreneurs, for instance, talk about a business plan, they are referring to a start-up or an early stage plan.

Both business and strategic plans have detailed products/services, marketing, operations, management and financial sections, which are all key components to the plans. Strategic plans add additional components: the mission, vision and SWOT analysis (Strengths-Weaknesses-Opportunities-Threats).

That is not the only difference between these plans. The timeframe for a business plan is typically for one year into the future. A strategic plan entails developing a series of goals and action steps for up to three years into the future.

Strategic planning is a four-step process that involves the following activities: (1) analyze the competitive environment; (2) develop goals that support the organizational mission; (3) implement action steps to achieve goals; and (4) monitor, measure and evaluate results. The entire team should be involved in this process.

Analyze the Competitive Environment

This is the SWOT analysis, as mentioned above. The company should assess its internal strengths and weaknesses. Honesty is critical in this process. Listing strengths and dismissing weaknesses is harmful to the strategic planning process. Strengths and weaknesses have an internal organizational focus. The opportunities and threats involve an external scan of the environment. The entire SWOT analysis should have a focus on the organizational mission and core competencies of that organization.

Develop Goals

Goals should dovetail with the company mission, vision and values. In this step, brainstorming is crucial in order to leverage strengths (core competencies) and opportunities while mitigating weaknesses and threats.

It is crucial to develop smart goals that can be measured. SMART goals are Specific, Measurable, Attainable, Relevant and Time-based.

Implement Action Steps

The specific action steps (tactics) to achieve organizational goals are developed. Listing action steps is just part of the process. Action steps should also include a timeline for accomplishment, name or names of people responsible for implementing the action steps, and the resource commitments, such as time or money.

Monitor, Measure and Evaluate

As the old saying goes, “What gets measured gets managed.” This is why goals must be measurable. Someone must then monitor results. How often should you monitor goals? For some goals, quarterly monitoring is sufficient. For other goals, monthly, weekly or even daily monitoring is crucial. Then the team evaluates the results.

Conclusion

Planning is a necessary process that all entrepreneurs should undertake. While at the Small Business Development Center (SBDC), I saw amazing progress by companies when leaders took time to develop a strong plan. Since joining TKT & Associates, Inc., I have facilitated six FastTrac® GrowthVenture™ strategic planning programs, and participants have not only evolved from a reactive mode to a proactive mode, but participants’ goals have been attained at a stunning level of success.

Strategic planning is crucial in this tough economic environment. Eisenhower understood that, and successful entrepreneurs do as well.

“Find a job you love and you’ll never work a day in your life.” – Confucius

We all want to have that type of job, the job that we love. After all, the average person in the U.S. today will spend over 45 years, or almost 94,000 hours, working at his or her job. This assumes that the average person puts in “just” a 40-hour work week, although many of us put in more hours than that.

So how is it that when some people speak about their “job”, they exhibit a real love for what they do, while many people dread going to work every day? I would sum it up in one word: Passion.

Do you spring out of bed each morning excited about the prospect of what today will bring? Do you relish in the challenges that are presented to you every day? Do you look forward to the exciting challenges that tomorrow will offer?

Most people would say emphatically, “NO!” However, some of us do not just enjoy what we do each day at work. Instead, we have a passion for what we do. To those of us who love our careers, work is not “making a living”. Instead, we choose every day to “feed the passion”, and it is evident to others that we love our chosen profession. It is the passion for our work that makes the challenges and pressures so much easier to bear.

Successful entrepreneurs are this way. They love what they do. They cannot wait to get to work, and they often spend longer hours at work than their counterparts in the corporate world. When they speak about what they do, about the products and services that their company offers, they are not timid, and their passion shows.

However, entrepreneurs are not average. Entrepreneurs must tolerate risk and uncertainty, live with very limited resources and deal with challenges much more so than those in the corporate world. Yet, how stable, how certain, how clear is a career in the corporate world these days?

Entrepreneurs often have a higher energy level and a stronger work ethic. When others get exhausted, entrepreneurs kick into overdrive. They are able to work 60 hours, 80 hours, sometimes up to 100 hours a week. They can sustain that kind of demanding schedule for weeks or even months. Entrepreneurs have to love what they do in order to be able to sustain such a challenging pace.

Many successful entrepreneurs developed a plan when they were younger, often when in high school or even middle school. They listened to their “inner voice”, which guided them with their educational choices and career selection. The success they enjoy today is most likely not due to lucky circumstances, but to a passion, a vision and a plan.

I did not devise a career plan in high school. Instead, I listened to what others said that I should do. My teachers, counselors and school peers suggested that since I was good at math and science, I should go into engineering school. Engineers had good career paths, and they were paid handsomely for their work. So I tried that my first year in college; however, I was miserable. My classes were a struggle, and I dreaded each day.

At that point, I began to listen to my inner voice. After one year in engineering school, I dropped out. Not knowing what I wanted to do, I worked for about 18 months, saved up enough money to go to another university, and enrolled in various classes to fulfill my undergraduate requirements. Then I tried a few business classes. Suddenly, everything made sense, and I felt comfortable with myself and my future career. I had found my passion.

After 10 years, I returned to Bellarmine University to obtain an MBA. That decision was not because someone told me that I needed an MBA to further my career, but because I wanted to learn more about management and marketing. Also, I enjoy reading case studies about what has made entrepreneurs successful.

While working on my MBA, I was fortunate enough to hold a graduate assistant position at the Bellarmine Small Business Development Center (SBDC). Imagine that — I was being paid to listen to others talk about their dreams and help them formulate their business plans! That opportunity opened up a whole new world for me. After working as a marketing manager for a mid-size manufacturing company, and a four-year stint in retail management for a multi-billion dollar conglomerate, I was fortunate enough to oversee the Greater Louisville SBDC for seven years. I worked with aspiring entrepreneurs who were developing plans to follow their dream. Talk about passion on steroids!

Now, in my work for TKT & Associates, Inc., I help entrepreneurs who are “stuck in neutral” get their businesses into high gear. More than ever before, I love what I do and am surrounded by other professionals at TKT & Associates, Inc. who share that same kind of passion for their work.

I have two college-age sons, and my wife and I have told them for many years to follow their passion and their dreams, not the money. Money is important, but happiness is more important. Moreover, the passion that people experience in their careers often leads to financial success.

Sharing the passion with your family, employees, advisors and customers is very important. Passion for a mission is contagious, but only if you share that vision. If your company has a culture of passion for the mission, it will show in all you do.

If you can achieve that, you will attract others who also love what they do. Suddenly, you will become a magnet for other talented people who have a passion for their careers. A network will develop, and people in the network will feed off the energy that each of them produces. So, if you have not done so yet, find your passion, love what you do, and you will never have to work another day in your life.

Going through the process of developing a business plan will result in the following: help you uncover many options and opportunities that you might never have otherwise considered; be used as a measuring tool for your goals and tactics; be used to better run your operations; be used to develop the skill sets of your team and yourself; be used to adjust your plans if your business activities are not going as you want; and to enhance your chances for success. With a business plan, you will shift your thought process from a reactive basis to a proactive one, and you can use your business plan for so much more than just presenting to your banker along with an application for a business loan.

So why do so few entrepreneurs write a business plan? The one-word answer: T-I-M-E. The always-positive entrepreneur feels that his or her new business is a “can’t miss, sure-fire success”. That person does not want to take the time to think about the target market, research the business environment and understand the competitors’ strengths and vulnerabilities, assess his or her company’s strengths and vulnerabilities, market opportunities, management and leadership gaps, product/service offerings, pricing strategies, cash needs, marketing strategy, legal entity, regulatory issues, and much more.

Does all of this sound overwhelming? Yes, it does, and it can be very overwhelming if you do not have a business plan template to follow. There are thousands of articles and hundreds of books and websites available on how to write a business plan and what to include in the plan. Most include the following:

• Executive Summary.
• Summary of Business: this section includes your mission statement, business description and background, legal entity and strategic alliances.
• Marketing Plan: includes the industry trends, target market, competitive analysis, product/service and pricing strategy and promotional and advertising plan.
• Management Plan: covers the overview of key management team and its experience, personnel needs, board of directors, advisors and/or key advisors/mentors.
• Financial Plan: Accesses comprehensive information on the historical financials (past 3 years), sources and uses statement (if you plan to borrow money or seek investors), income statement, cash flow and balance sheet (3-year projections), break-even analysis and key financial ratios.
• Supporting Documents: Includes pertinent research and important information in this section.

If you break this monumental task into small steps, you can not only develop a business plan, but have a very good plan that will greatly enhance your business value. As you begin this process, take the following actions:

1. As I mentioned in my article Steps to Start a Business in Kentuckiana, the first action an entrepreneur should do is to schedule a meeting with a small business consultant. The Small Business Development Center (SBDC) and SCORE provide free services and can help you develop a start-up business plan, and their services are free. They will have several versions of a business plan template, but more importantly, they can help guide you through the multiple drafts of a plan.

Here is the contact information:

Louisville area SBDC (502) 625-0123 Southeastern Indiana SBDC (812) 265-3127

Louisville area SCORE (502) 582-5976 South Central Indiana SCORE (812) 944-9178

1. The next step is to define your core business and use that to develop your mission statement. While this sounds very simple, it is an important and challenging task, as you must spend a tremendous amount of T-I-M-E (there’s that word again) considering the core competencies of your business as well as those of your competition, your target market, and what strengths you can offer your customers. Developing a solid mission statement will keep you laser-focused on your core competencies.
2. Go to the library. Yes, I know that sounds very quaint and old-fashioned, as there is so much information available through the internet. And that is precisely why you do need to go to the library. Experts on business research can show you how to access information that you would never uncover on your own.
3. Be prepared to expend a great deal of T-I-M-E studying the market and marketing opportunities. You must not just offer a product or service, but offer something of enhanced value to your target market.
4. Write multiple drafts of your business plan. Treat this process like that of a term paper that you did in school. Continually refine the plan as you uncover more information. Seek advice from experts who can critique the business plan and offer insight on how to improve the plan.
5. Understand the components of the financial statements. Do the numbers scare you? Recruit someone to your team that can explain those statements, what they mean, and how you can use the information to develop a better business strategy, focus on profitable opportunities, benchmark your business and develop a budget to keep your business profitable.
6. Seek business advisors, such as marketing experts, IT professionals, HR consultants, in addition to your attorney, accountant, insurance broker, banker, etc. as part of your advisory team or board of directors.
7. Be patient with yourself and others on your team in developing the business plan; be persistent in refining the document as you gather more information; be accountable to yourself and your employees to complete the business plan; and be focused on the reasons why you are developing your plan.
8. Finally….be prepared to USE your plan. Do not store it in a file cabinet or on a shelf in the back of the closet.

The dream of starting a successful business does not always turn into reality. In my 25-year career of advising over 2,000 small business owners and aspiring entrepreneurs, I have found that there are 15 crucial steps that every entrepreneur should take before he or she opens a business. These steps can ensure that you get your small business set on a solid foundation.

1. Meet first with a small business consultant. The small business consultant can help you articulate why you want to get into business; what it will take to start and grow a successful business; how to assess the market opportunities; and how to fund the business start-up costs. Kentuckiana has great small business resources, and the following services are FREE: Small Business Development Center (SBDC) and SCORE, both of which are supported and partially funded by the U.S. Small Business Administration (SBA), area Chambers of Commerce, local universities, etc. These organizations can also help you develop a start-up business plan.

Louisville area SBDC 502.625.0123 Southeastern Indiana SBDC 812.265.3127

Louisville area SCORE 502.582.5976 South Central Indiana SCORE 812.944.9178

2. Consult with an attorney and/or CPA who is not only licensed to practice in Kentucky and/or Indiana but who is also experienced in small business operations. The attorney or CPA can offer you great advice and share knowledge about what to do and what not to do – it is most likely that most of his or her clients are small business owners as well. Ask small business owners whom you know and respect for names of attorneys and accountants with whom they have had good experiences, or you can contact the following associations.

Louisville Bar Association 502.583.1801 Indiana Bar Association www.inbar.org

Kentucky Society of CPAs 502.266.5272 Indiana Society of CPAs www.incpas.org

3. Select a business name and choose an operating legal entity (Sole Proprietor, Partnership, Corporation or S-Corporation, LLC, etc.). Your attorney and CPA can explain the pros and cons of the various legal entities in the areas of legal liabilities and tax ramifications.

Hint #1: Ask others whose opinions you respect what they think of the business name prior to selecting one.

Hint #2: Make certain that the name is available both on the internet and with the Secretary of State’s office otherwise your website name may be dramatically different than the business name.

4. Register your business name online with the Secretary of State. It is suggested to bookmark this site, as it contains a wealth of useful information.

KY Secretary of State www.sos.ky.gov IN Secretary of State www.state.in.us.sos

5. Obtain a federal employer identification number (EIN) from the IRS, form SS-4. To request an SS-4 or another type of IRS form, go to www.irs.gov. This is also a suggested site that you should bookmark.

6. Secure a zoning license/certificate of occupancy from the local zoning department. Make certain that contact is made with those who handle permits for any remodeling or new construction as well as those who deal with sign permits for any exterior signage. For many business owners, a landlord or developer can help you make those contacts. Be sure to contact the local fire marshal if you are moving from a home office to a new location.

7. Obtain city and county occupational/business licenses. Contact your local Revenue Commission, county clerk and/or city clerk. They can help with your local business name registration, answer questions about other licenses, fees, taxes, etc. Your business name should be registered in every county in which you conduct business.

In Kentucky access the following site: www.thinkkentucky.com/BIC/ebpermits.aspx

In Indiana access the following site: www.state.in.us/sos/business

8. Register with the State Department of Revenue if you are required to collect sales or use taxes; if you have a business with employees; or if you are a business entity, other than a sole proprietorship, that doesn’t collect sales or use tax or that doesn’t have employees.

Kentucky Revenue Cabinet www.revenue.ky.gov

Indiana Revenue Cabinet www.in.gov/dor

9. If you have employees, access the state workforce development site in order to find out about registering with the state unemployment insurance department and to purchase workers’ compensation insurance.

KY Office of Employment and Training www.oet.ky.gov

IN Department of Workforce Development www.in.gov/dwd

10. Check with your local city and county clerk’s office to determine if any special licenses are required for your business. A great resource is the “One Stop Business Licensing” program in each state.

Kentucky website: www.thinkkentucky.com

Indiana website: www.state.in.us/sos

11. Talk with your banker to establish a business checking account, savings account, credit/debit card merchant accounts and other services. Have a discussion about bank financing to start your business. Establish those bank relationships early so that the banker can get to know you and your business long before you ask for a business loan.

12. Secure liability insurance and other coverage appropriate for your business. Talk to an insurance professional about other types of insurance that you will need for your new business.

13. In addition to your attorney, accountant, insurance broker, banker, etc., speak with other business advisors such as marketing experts, IT professionals, HR consultants.

14. Spend time doing research before you start your business. Go first to the main branch of the public library and talk with a business research specialist. A business research specialist can show you databases, websites, information about business associations, ways to find out about your competitors, etc. Once you know where this type of information is located, you can access it over and over from your business or home computer.

15. Commit to continuous learning. Join a Chamber of Commerce. Go to networking events. Read the business sections of local newspapers. Talk to other entrepreneurs. Form your advisory board.

My next article will address the components that comprise a strong business plan.