Can you believe it, only two more sections and we can write the Executive Summary! This week we will be discussing the Management Summary. The management summary covers the management team and personnel requirements.

Management Team

If you are a business seeking funding, this section is where you convince the potential investors of the quality and experience of those who will run the business. Remember, lending is all about risk assessment (how likely are we to get our money back and how long will it take) and investors first look at the executive level to determine the quality of those who set the vision.

As you begin to list the officers, be careful not to have it read like a resume. Give the job description of each position and how each person is uniquely qualified to execute those responsibilities. Stay with pertinent information regarding their qualifications for being part of the team, but do not describe prior work experiences in too much detail - you can include their resume in the Appendices.

The key positions to be listed are the President/CEO, VP Sales/ Marketing and Secretary/Treasurer. These are the vital functions within an company’s structure and represent the vision, implementation and administration of your business. If you are a Sole Proprieter or a two person Partnership, you will need to have resources that will function in the needed capacity whether compensated or non-compensated. Why? because investors know no business can be successful when the principles perform all facets of operations.

Remember, this is a three to five year plan, so it is a good idea to include the job descriptions of positions you have not filled. This will show your understanding of the type of infrastructure you will need to accomplish the financial goals you stated in the last section and if you can justify the principles functioning in many roles, it shows you have plans to alleviated that situation.

Personnel Requirements

Just as with the management team, list the job descriptions of your supporting staff. Whether you have completed hiring or not, it shows the framework on which your company will be built. Include the annual expense of the position and at which point in your plan those positions will be added. Use a spreadsheet to represent total personnel expenses as illustrated below:

Personnel Plan
	FY 2002	FY 2003	FY 2004
Store Managers/Partners	$96,000	$96,000	$100,000
Salespeople — Full-time	$0	$0	$0
Salespeople — Seasonal	$4,650	$3,070	$3,380
Stock/Delivery — Full-time	$21,320	$23,500	$28,850
Stock/Delivery — Seasonal	$2,460	$2,700	$2,970
Other	$0	$0	$0
Total People	6	7	7
Total Payroll	$124,430	$125,270	$135,200

The figures in your spreadsheet should reflect those in your pro-forma balance sheet. Take the time to research the average salaries and hourly rates for the positions to be added. A good source for this would be www.salary.com.  

Management, Business Development | No Comments »

Over the past few months, I have been listening to many of the Republican talk radio hosts trying their best to discredit Barak Obama. While I think that is par for the course, it has become increasingly obvious there is more there than meets the eye.  

When you consider how the average conservative feels about John McCain, it is no wonder there may be a concerted effort to have Hillary run against him in the general election . Hillary Clinton has plenty of "skeletons" and it would be easy to motivate the conservative base for her past indiscretions. In fact, many of the talking heads such as Rush Limbaugh and Sean Hannity, have built a successful career on the Clintons and their listeners have enough righteous indignation to compensate for McCain’s luke warm conservatism.

On the other hand, the candidacy of Barak Obama defies all political and practical reasoning. If I may borrow a term from history, it would be the closest equivalent to "irrational exuberance", we have seen since the great dot.com boom. Obama’s popularity has attained an almost "god like" persona that has no real substantiation or track record of efficacy. His supporters are all too willing to overlook gaffs, political and social associations, as well as the lack of any major experience in a leadership role for  his brand of  "change".

While you would think the Republicans would be jumping at the chance to run against a "paper brick" candidate, Obama’s campaign brings fear instead. How do you defend against a campaign that is improbable and in many respects illogical? If McCain attacks too hard on inexperience, he will be perceived as the old guard resisting inevitable change. If he tries to make a stronger appeal to the white female  voters, he will be perceived as racist. Having Obama as a opponent represents far more challenges than are the case with Sen. Clinton and the Republicans know it.

The fallout over Reverend Wright and Obama’s comments in San Francisco have proven the Republicans can’t beat him in the court of public outrage, so other methods have been deployed. We had Rush Limbaugh asking Republican voters to crossover and vote for Hillary. We have Sean Hannity’s dogmatic insistence of Obama’s flawed character, inexperience, and controversial associations, not intended to sway public opinion, but to convince the Super Delegates Hillary is more electable.When Hillary Clinton was formulating her strategies for a run for the White House, I don’t think she could have imagined she would have allies in Rush and Sean, but as dubious as that relationship may be, "votes is votes".

Globalization is shrinking our world at an unbelievable rate. I saw a dance contest in Thailand on You Tube and the contestants were doing their best imitation of the Beyonce dance to American Hip Hop music. The prospect of the U.S. shedding it’s long standing reputation as an intolerant, bigoted, and sometimes racist country, is thrilling to the entreprenuers looking to expand into global markets. Electing a Black or  female president would go a long way to that end.

Once again, I am proud to be an American in times such as these and enjoying this political theater immensely.

Thought of the Day, Politics | 6 Comments »

This week we will finish the Strategy and Implementation section by discussing what I feel is the most crucial aspect of marketing for small businesses, Strategic Alliances. Under this heading, you will list all of your collaborative relationships and how you will use them to the benefit of your company. Whether professional organizations, vendors, suppliers or other businesses, you need to show your potential investors you understand it is near impossible to be successful on your own.

In design your strategic alliances should fall into two categories, resources and business partners. Resources represent those persons or organizations that will provide you with insight into areas of strategies you may not be familiar with, but are essential to your success. For example, having a relationship with a graphic artist has a two fold benefit. First, they can provide you with artwork that will increase customer awareness and brand recognition. Secondly, the can provide insight into what you competitors are doing, what campaigns have been successful in the past, as well as colors, images, and verbiage.

Business partners are another source of insight and information, but also represent the opportunity for expansion. Companies that share you target market can be geat business partners, even though you are competiting for the same discretionary income. A good example would be a partnership of an exterior painter and a landscape designer. Both deal with exterior beautification and can bring each other in on large projects. One of the best ways to esablish these types of partnerships is networking. Networking puts you in front of companies that have similar interests, vocations, or target audiences. Since you have already identified your target segments in the previous sections, finding a good business partner is more a matter of determining who has the same dedication to quality service, professionalism, and reputation worthy of your association. 

Be very vigilant in accepting strategic partners, do your research, before putting anyone’s name in association with your company. 

Business Development | No Comments »

As an entreprenuer, I am always attending networking functions, whether private organizations or those I have been invited to as a result of professional association. Over the past year, I have come into contact with an alarming number of people over the age of 40 that are unemployed and frustrated at their inability to gain employment in fields where they have more than 20 years of experience.

So what’s the problem?

Initally I suggested everything from rewording their resume, to an award winning author I am afiliated with who specializes in helping 40+ executives re-enter the job market. However, upon further investigation and interviews, I have begun to see consistencies with the responses and treatment of those applicants who are a part of the Baby Boom generation.

Phrases like, "you are too qualified for this position", "I would feel uncomfortable asking you to work for this wage", or my favorite, "I don’t think you will stay, if something better comes along", were common in my discussions with more than 20 prospective applicants.

As I began to analyze this rational, it became obvious why employers are so willing to pass up a wealth of experience and knowledge….Money! Statistically speaking, older employees cost an employer more in salary, benefits, and longevity. Therefore, companies look for younger workers who are convinced they don’t need health insurance, will work for a lower wage and typically stay at a company less than two years…but how sound is that reasoning?

Who really loses?

While an employer may save money on the front end by hiring the less skilled worker, this philosophy is contrary to strong growth and a high level of customer service. A company’s success can be identified by it positioning among its target audience and positioning “… is to create a space inside the target customer’s head called ‘best buy for this type of situation’ and to attain sole, undisputed occupancy of that space” - G. Moore (Crossing the Chasm).

Who does a company have a greater likelihood of achieving this goal with? Seasoned employees understand what it takes through years of experience and practical knowledge. While I can’t discount the fact older workers tend to be set in their ways and less flexible with change, who would you rather have Michael Jordan or a rookie straight out of college?

Effective business occurs through critical thinking, process analysis, and strategy development. Having experienced workers allows for a diversity of ideas, insightful analysis from a historical perspective, and in many cases a refinement that only comes from living a while. So the next time you find yourself looking for a new employee, take the time to consider who will bring "the most bang for the buck". 

Rants | No Comments »

In the last weekly installment (Week 4), we were discussing Strategy and Implementation. This week’s post will continue in that section with the following outline as the guide.

• Competitive Edge
• Sales Strategy
  • Sales Forecast
  • Sales Monthly
  • Sales by Year
• Strategic Alliances

Obviously we will not cover all of these topics in this post, but we will certainly finish in the next post. Additionally, there may be supplemental posts during the weeks as I feel there are things that may benefit your process or in response to emails I receive. Today we will discuss competitive edge and beginning your sales strategy.

Competitive Edge

In your presentation of your business plan to potential investors or a lending institution,  you not only have to prove you understand your business, but how your competitors operate as well. This knowledge is necessary to exemplify your competitive edge…"what makes you so special".

In a previous post, I discussed my criteria for accepting a new marketing client; they have to answer the question Why You? In just about every profession there is enough competition to lure your target markets away from your product, so it becomes necessary to determine what are the compelling factors that make a potential buyer seek your company and how that gives you an advantage in your marketplace.

One of the best ways to determine this advantage is through "benchmarking". Benchmarking is

"the process of identifying, understanding, and adapting outstanding practices and processes from organizations anywhere in the world to help your organization improve its performance." - American Productivity & Quality Center

This information can be obtained through shopping the competition, which I advise you do quarterly, industry periodicals, manufacturers, vendors, and former employees. Once the information is obtained, a comparative SWOT (Strengths, Weaknesses, Opportunity, Threats) analysis should be performed and each area of differentiation discussed. The results of the research is then used to create sales strategies to establish or increase your competitive edge.

Sales Strategy

In Week 3, we began the Sales Strategy section and today we will the final components. As you read:

Your strategy should detail both sales philosophy and requirements for successful execution. It is alright to give examples of revolutionary techniques, but be careful not to make it read like a training manual. Keep the focus on the core theories behind your technique and how they are applied, for example, "Our sale strategy is based on the belief everyone deserves a good nights sleep. Customers are encouraged to try at least three mattresses while the salesperson explains the differences in the models".

By detailing your sales strategy, you let your investors know you understand your target audience and what it will take to get them to purchase. Also, it provides management with a tool to evaluate sales strategies during the business cycles, which will largely be based on sales performance.

Sales Forecasts

 Sales forecasting involves an itemized listing of projected sales of your products and services over the next three years. Each product should be listed and an annual sale figure added, for example;

	FY 2009	FY 2010	FY 2011
Twin Sets	$52,000	$65,000	$73,000
Full Sets	$75,000	$90,000	$108,000
Queen Sets	$100,000	$120,000	$134,000
King Sets	$150,000	$180,000	$216,000
Total	$377,000	$455,000	$531,000

For an existing business, forecasts are the projected increase in sales based on the improvements made by the infusion of capital. Be careful not to overstate the increase as it may cause investor doubt when quarterly comparisons and milestones are analyzed.  

For start up businesses, forecasts should be reflective of  current industry sales, regional sales, expected growth for the sectors, and any compettive edge you feel will translate into additional revenue. Once again, I caution you not to over inflate your forecasts, as it will have a negative affect on future funding.

Sales Monthly

In the listing of monthly sales, a graphical representation will be more than sufficient, just make sure you figures match and all facets of sales are listed in both the forecast and themonthly and yearly graphs. 

 Sales Yearly

Similarly, here is an example of a yearly sales graph:

Additionally, the Sales Strategy section should include any special incentives that will be used to drive sales whether coupons, rebates, or multiple purchase discounts. Next week we will finish with Strategic Alliances and discuss Web Strategies.

Business Development | No Comments »

No, I didn’t forget! Business has really been booming and I haven’t had the time to write as much as I would like. That being said, I wanted to pick up in Marketing once again and talk about Positioning Statements and setting up your advertising strategies. If you look back at the last  Business Plan post (Week 4), the position statement would go right before Product positioning.

Positioning Statement

A positioning statement is used to better identify the purpose of your product in relation to the needs of your targeted segments. The positioning statement when properly crafted whould answer seven questions:

1. Who your company is
2. What your company does
3. Who your customers are
4. What your customers are in need of
5. What your competition offers
6. What you offer instead
7. How you customers benefit from your product

Here is an example of a positioning statement I would use for my marketing plan:

(1) PFS Consulting is a business strategies and process analysis consulting firm (2) that was started to help business develop a solid plan for success. (3) Our customers are small to medium sized businesses (4) who are tired of consultants who promise benefits, but don’t deliver the understanding of what it takes to start and maintain a successful business. (5) Unlike the typical management consulting firms, who concentrate on building the bottom line through advertising and sales, (6) PFS Consulting focuses on building success through a thorough understanding of who your target markets are, what they need, how you can fill those needs and how to let them know you have their solution. (7) Thereby creating a solid foundation for business profitability and future success.

As you can see the positioning statement sets the stage for all of your marketing efforts going forward because it causes you to identify all of the key factors concerning your target market. It also makes you acutely aware of the relationship between your products and those targeted segments of your markets.

Moving forward, when we begin discussing advertising in greater detail, you will create a positioning statement for every market segmentation and use that statement to best determine how to reach your customers. The positioning statement will serve as a template for which medias would be most effective in reaching your targeted audience.

For example, in the positioning statement I gave previously, my targeted customers are tired of the traditional consultant, therefore, advertising in traditional medias like the Yellow Pages may not be reasonable. However, small business networks, blogs, and webinars may be a much better solution. 

Positioning is one of the 4 P’s of Marketing Mix and although we have covered them previously, we will be revisiting them throughout the remaining weeks.

Marketing, Business Development | No Comments »