Articles

Published June 2004

Create an Action Plan for Your Business

By Julie King

Business consultants emphasize the need to analyze your business and plan for future growth. A business plan is an excellent tool. However, too often planning stops with the written document.

Your business plan, which is rooted in strategy, should describe how you will grow your business. An action plan will help you put your theories into practice. Think of it as a big-picture 'to-do' list. Here is how you can create an action plan in just four steps. 1. Start with brainstorming Before you can create an action plan you need to list the various things you could do to implement the strategies in your business plan. You don't want the first ideas that come to mind you want to use the most effective and economical ones. After all, why spend money on untested advertising when a combination of cold-calling, networking and sales might work better? With brainstorming you put as many ideas as possible down on paper. Since your business plan will cover four main areas - market research, marketing and sales, operations, and administration - you will want to develop four action lists. This can be done informally - brainstorming sessions often work best when you feel relaxed and open to unusual solutions. As you brainstorm you will want to think laterally, coming up with a myriad of different and creative ways to implement the strategies in your plan. For example, if the operations section of your business plan says that you will deliver excellent customer service, one solution on your list may be to provide an online support forum includes relevant information and video clips. This option may be too expensive for some companies, but for others it could be a way to reduce support costs while offering customers a level of service that they will not be able to find elsewhere. Here is an excerpt from a list you might find for a fictional pet food company that plans to develop to sell its products through pet breeders.

Create an opportunity package (letter, brochure, offer statement, infomercial video, website) Join breed clubs that have 100+ members Purchase a booth at regional dog shows Place ad in breed club magazines Offer a bag of food as a prize at each breed's national specialty show Provide free food samples as prizes for each exhibitor at national specialty shows

2. Identify costs Once you have your ideas on paper it is time to apply critical analysis. While buying prime time TV ads may seem like a great idea, chances are good that you won't have the budget for this option. Also, this form of advertising may not deliver the best value for your money, even if you can afford it. There are two questions to consider as you evaluate your options: 1. What are your resources and what can you afford? 2. Which options will deliver the best results for your investment?

To answer these questions, start by assigning a budget to each component of your business plan. For example, you may decide that you can afford to spend $6000 a month on operational expenses and $1000 a month on marketing and sales. You are now ready to create a simple spreadsheet that includes time and cost estimates for each item on your list. Here is an excerpt from a sample marketing spreadsheet for a new business-tobusiness service company. (Please note that the numbers are not meant to accurately reflect costing.) Marketing Plan: Brainstorm List Objective*: To contact 2500 potential customers in our first year in business, and to secure 45 customers during the year. Budget: $1200 start-up budget plus $1000 / month Action Join industry association Purchase contact management software Input a list of sales contacts into content management software, using purchased association directories as the list source Create an information package: - Create & print in-house - Outsource Build / purchase media list Create and fax/email press release at 6 week intervals Lead development (telemarketing 1 day / week) Directory advertising Trade magazine advertising --$1600+ $400 $--$280 / month $400 26 hrs 6 hrs 14 hrs 8 hrs / release 6 hrs/month support 4 hrs Cost $200 / yr $200 - $1000 $-Time 4 hr / month (networking) 5 hr install & learn 15 hrs

$1200 / 4 6 hrs business card size ads 3 - 8 hrs / mailing

Direct mail @ $1.50 / piece

$750 - $3750 / mailing * Note: Realistic goals are a critical element of a successful plan.

3. Find the best value Now it is time to sort through the various options and create a final list that fits both your budget and your objectives. You should quickly see that some items will be affordable and effective, while others will be unrealistic at the current time.

If you have a tight budget you will likely be forced to make some difficult choices when narrowing down your list. For example, you may need to decide between an investment in tradeshows and media releases or focusing instead on cold-calling and direct mail promotions. If this is the case you may want to create a second list of items for future consideration. Here is how your second spreadsheet might look for a company that wanted to spend $1200 on initial costs and $1000 / month in ongoing costs: Marketing Plan: Semi-Final List Objective: To contact 2500 potential customers in our first year in business, and to secure 45 customers. Budget: $1200 start-up budget plus $1000 / month Action Join industry association Purchase contact management software Input a list of sales contacts into content management software, using purchased association directories as the list source Monthly cold-calling (hire telemarketer @ $10/hr plus 8% commission 28 hrs / month) Create an information package (develop in-house) Direct mail advertising to partial list of 500 @ $1.50 / piece every 4 weeks Rough start-up costs Rough monthly costs Cost $200 / yr $400 $-$280 / month $420 $750 / mailing $1020 $1030 Time 4 hr / month (networking) 5 hr install & learn 15 hrs 6 hrs/month support 26 hrs 3 hrs / mailing 41 hrs 13 hrs

As you can see, many items from the original list were abandoned to stay on budget. 4. Add a Timeline Your final step is to add a timeline to your action plan. It helps to rough in the timeline on a monthly basis at first and then refine it as time progresses. Here is an excerpt of a sample timeline based on our semi-final marketing plan: Marketing Plan: Semi-Final List Month June June 1 June 1 - 10 Marketing / Sales Activities Develop materials Join industry association (sign-up online) Write sales letter, create brochure Completed

June 10 June 15

Print sample 50 brochures Morning networking (bring brochures)

June 11 - 20 Input 500 contacts into contact management software (Act, Goldmine, etc.) July 14-28 June 22 July July 2-10 July 2 July 17 July 24 Interview & hire telemarketer First mailing Start calling Input 500 more contacts Start cold-calling Networking (bring brochures) Second mailing

August Refinement August 2-10 Input 500 more contacts August 2 August 14 August 21 August 2130 Continue cold-calling Networking (bring brochures) Second mailing Progress review - refine plan and timeline if necessary

As you can see, once the timeline is added your action plan can be used as a checklist to ensure that you actually do the things you wrote about in your business plan. You have turned a theoretical document into a powerful business compass.