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Planning for Profit and Growth
A successful business plan should describe where you want your business to go, allowing you to spend time working on the business, not just in the business.

Article


Business Plan 101
January 24, 2013 | by Ken Thoreson

In the past 15 years of consulting with IT partner organizations of all sizes, specialties and experience levels, I have found a common denominator among those that are growing and profitable: They have a vision for their business and a process for developing a business plan that allows them to execute effectively and measure progress.

Many partners create a budget for their company, but they fail to create functional business, operating, sales and marketing plans. Whether your firm focuses on UC, integration or managed services or if you have a two- or 20-plus employee sales team, it is vital to profitable growth that you develop a plan that describes where you want the business to go. The idea is to spend some time working on the business, not just in the business.

A successful plan should incorporate at least these four fundamental elements:

Define Business and Personal Goals

This, in essence, is your vision for you and your business. Frequently, goals focus solely on financial metrics, but you must also develop a set of personal or philosophical beliefs to help you increase overall organizational performance. These beliefs may be based on the type of culture you want to foster within your team, or employee participation and client satisfaction levels. These business metrics and personal vision become the basis for your tactical sales plans.

The key issue at this step is to be focused on outcomes. Examples include revenue growth, margin levels, partner recognition, customer satisfaction, pre-tax margin percentages, number of net new clients per quarter and account penetration goals.

Evaluate the Business Environment

Identify the key business drivers that increase revenue and reduce expenses. Consider market opportunity, the capabilities required to achieve your organization’s goals, current and future vendor product offerings and your current and desired market position.

The element of market opportunity is critical for setting your sales objectives. For each product area in which you focus, you need to make the following calculations:

  • Estimate the total number of potential buyers in the marketplace
  • Determine the total percentage of ideal buyers per year
  • Estimate the average order size per transaction
  • Determine the percentage of sales opportunities you will participate in per year
  • Determine the win/loss percentage of your sales opportunities

These figures will give you the data you need to build an accurate sales plan for each practice. Estimate your total costs to determine your ROI.

Prior to adding a new product offering, or even if you are already active in a specific practice, call potential customers in the market and ask a series of questions to validate your assumptions.

Involve Your Management & Sales Team

On at least an annual basis, ask your business management and sales teams questions including:

  • What went well? What did not go so well?
  • What are the key business assumptions for this year?
  • What are the four key metrics to be used to measure success in each department?
  • What are the business opportunities for success?

The goal of this step is to assess your chance of success, identify key success factors and, most importantly, build commitment among your management and sales team to achieve your business vision.

Validate Your Assumptions

As you develop your plan, you need to be realistic. Validate your assumptions by factoring in criteria including: the economic realities or vertical trends within your geographic area; vendor marketing efforts; the competitors’ position within your market; your ability to differentiate your offering and create unique value; and your internal company resources required for success including people, capital and so on.

In developing your business plan, it is critical that you define, measure and list all ingredients in the proper sequence of preparation and execution. Each quarter, you should re-assess your execution and assumptions to ensure your plan still has you on a course that will take you to profitability and growth.

About the author
Ken is a sales leadership guru; author of three highly successful books including the Sales Management Guru series, and popular blogger. He is also the founder and CEO of The Acumen Management Group, Ltd.
View all posts by Ken Thoreson
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