HOW TO WRITE A BUSINESS PLAN: PART 3

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Click here to read Part 2 of this article

Conduct a SWOT Analysis

When writing a business plan or a marketing plan you need to conduct a SWOT analysis. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. Look at your new venture as objectively as possible to determine what strengths you have, the weaknesses you need to be aware of, the opportunities you need to explore, and the potential threats to your plan.

To give you a better idea, below is a SWOT analysis based on our fictional example of a Chicago-based small business coaching company called the Chicago Coaching Network.

Strengths: CCN has coaches who have strong skill sets in business, sales, and in psychology. Because coaching includes dealing with clients’ behavioral and interpersonal issues, this professional training in psychology ensures that clients will not be adversely affected by a lack of training on our part. Our extensive business and sales experience ensures that clients will be provided with access to some of the best business techniques and sales strategies available today. We are highly skilled in helping small business owners in critical areas such as teamwork, motivation, conflict resolution, and achieving goals.

Weaknesses: CCN has three primary weaknesses:

 

	Long sales cycle—given the state of the economy and the cautious buying habits of small companies, the sales cycle can vary from a low of 30 days to a more typical 3-4 months. This impedes cash flow and drains much needed people resources for targeting new prospects.
	Finding ideal clients—even though there are a great number of small businesses in the Chicago area, they are often isolated and unconnected, making them difficult to find. After identifying people in our target market, we must know how to quickly distinguish suspects from prospects, who need, want, and can afford our services.

Opportunities: While there are several hundred “coaches” already in the Chicago market, there are significantly fewer who specialize in business and executive coaching. Furthermore, there are even fewer who aggressively market their services. Most small companies in this area are not aware of the power of business coaching, which can be both a positive and a negative—a positive in the sense that they have not been tainted by a bad experience, and a negative in the sense that it always takes a longer time to sell the service if you have to educate your prospects about what you do and how it can help.

Threats: It is estimated the number of coaches entering the field is doubling about every year. The barriers to entry are currently minimal. Also, because of poor economic conditions, many other types of “consultants” are moving into coaching, including: human resource consulting firms, traditional management consultancies, psychologists, executive recruiting firms, organizational development companies, law firms, accounting agencies, as well as a growing number of personal coaches. We must clearly and concisely distinguish our company from all of these competitors and we must be very intentional in educating our clients about those differences.

Positioning, Competitive Advantage, and Unique Selling Proposition

Using the information, research, and analysis you did for the Competition and SWOT sections, outline how you will position yourself and your services. Here are some good questions to get you started:

 

	How will I take advantage of my competitor’s weaknesses?
	In light of what I know about my competitors, what are the top five to ten reasons why someone should buy from me versus any other company?
	Why am I the best and only person for the job?
	What skills, abilities, and experiences do I offer clients they can't receive elsewhere?
	How can I emphasize the value I bring to the table?

Marketing Strategies

Here is where you list all the different marketing techniques and strategies you will use to identify prospects and land new clients. Here are a few common strategies small businesses use:

 

	Referrals from former and current clients
	Referrals from Strategic Referral Partners (SRPs)
	Speaking about a topic that interests and informs your target market
	Publishing articles in newspapers, magazines, and trade journals
	Internet strategies (website, e-zine)
	Direct sales efforts (sales letters, cold calling, postcards, direct mail letters)

Let's briefly outline a sample marketing plan for increasing your referrals from SRPs.

Here are the steps to creating referrals from SRPs:

1. Identify the industries, fields, professions, and positions that are in a place where they could refer prospects to you.
2. Create an initial list of people who meet the first criteria.
3. Call each person, briefly introduce yourself and request an hour of their time to talk about possible mutual referral situations.
4. Go to the meeting and convince them you can help their clients and want to develop a mutually beneficial business relationship .
5. Follow up with them on a regular basis (every four to six weeks) with an email, newspaper clipping, newsletter, or phone call.

Obviously, this is an oversimplification, but you get the picture. I go into much more detail in the chapter on Relationships and Referrals.

After listing all the different marketing strategies you will use, the next step is to create a 12 month chart that outlines when you will use each strategy.

Financial Plan

This is often the scariest part of writing a marketing plan. One of the biggest reasons for small business failure is lack of available funding to keep it going. This is certainly the case for many new start-ups. This section should include:

 

	Your currently available funds (cash in hand for expenses)
	A list of your current monthly sales for every category (individual clients, paid speaking engagements, training programs, product sales, etc)
	A 12 month timetable in which you estimate how much revenue you will bring in per client per month (assuming you will not keep every client forever)
	A forecast of new sales —how many new sales do you anticipate per month and at what rate
	A comprehensive list of all marketing activities and anticipated expense of each one
	A simple profit and loss statement (P&L) in which you subtract your anticipated expenses from your anticipated revenues. This should give you a good idea of how much money you need to have on hand in order to properly fund your business.

Often the easiest ways to write up and keep track of these financial charts is by using Excel or another spreadsheet program, but the most important part is the actual process of “running the numbers” rather than the program you use to calculate the numbers.

Contingency Planning

This is also a difficult section for many people to write because you don’t want to think about all the things that could go wrong. Most people think overly positive when starting up a business and that’s great because you will encounter enough tough times without being cynical and pessimistic when starting out. However, the time you spend on thinking through the major potential stumbling blocks and what you will do if you encounter any of them will be well spent.

Some of the more common obstacles to building and sustaining a small business include:

Lack of funding—Not having enough cash on hand to sustain your business while trying to grow it. The results are not being able to actively market your services, pay yourself a salary, or even an inability to pay your bills. Do you have a solid idea of how much money it will take to launch and sustain your business over the first or next year or two? What are you really willing to do to make this business go? Are you really serious about it or are you just “playing around”?

An economic downturn—Currently, most people and businesses are struggling financially and in an economic downturn people and companies tend to cut back on all possible as well as discretionary items.

Unable to secure many Strategic Referral Partners (SRPs)—SRPs can be the lifeblood of your new company, but it may be difficult to convince them to refer to you when you're just starting out. In addition, you typically have to spend a lot of time meeting with various SRPs before you find one that actually delivers on their promised referrals.

Not meeting your sales goals which leads to slow or no new revenue growth—In order to cover your marketing and cost of living expenses you need to be able to set and meet sales goals. What will you do if your traditional sales and marketing efforts meet with little or no results?

In your contingency plan, you need to account for what you will do if any of these cases arise. What measures will you take? How closely will you watch your new client sales, how many people you have in the pipeline at any given time, your prospect to client conversion ratio? All of these questions are important to plan for in case they occur.

What are the major problems that could keep your particular business from being successful? If you're coming up blank, click here for a list of blocks to business success.

For each major problem you can identify, briefly outline how you will recognize it and the specific steps you will take to overcome it if it should occur.

Your executive biography

Talk about your background focusing on the issues and experiences you believe will be important to your prospective clients. Remember, most people work with you not just because of your product or service, but also because of your interpersonal style, your experiences, background, and what you stand for so be wise and honest about what you say and don’t say in your bio.

Summary

In this article, we focused on how to significantly increase your chances of building a successful business by developing a solid Marketing Plan. There are two hard questions you still need to consider:

 

	Will you follow through and write your Marketing Plan?
	If you do, will you use it to guide and direct your company?

Ultimately, the long-term success of your small business depends on your ability to think strategically about services, uniquely position your company to your prospects, and consistently implement your marketing plan.
 

NEXT STEPS FOR SMALL BUSINESS OWNERS,
ENTREPRENEURS, AND NEW START-UPS

 

	Contact us for more information about small business coaching.
	If you sign up for one of our small business coaching programs, we will give you a FREE analysis of your business marketing plan.
	Click here to see a complete list of our free resources on business coaching and more information about Today's Leadership Coaching.
	FREE Blocks to Small Business Success Inventory—Do you want to build your business but feel like you're constantly running into obstacles? This inventory will help you identify blocks to your success.
	FREE Grow Your Small Business Checklist—Successful small businesses have several things in common. Use this checklist to find out what they are and how effectively you are using them in your small business marketing and sales efforts.
	FREE information about The Practice Building Program—Do you need to find more clients faster? Are you actively looking for ways to increase the ROI of your time, energy, and resources? Want to focus on building your business without losing your lifestyle? If so, then you need to find out how the Practice Building Program can help you.
	FREE information about Stephen Fairley’s book: Practice Made Perfect—This is not a book to be read, but a manual to be used. It cover the 10 principles of marketing a professional service by illustrating each principle then giving you step-by-step instructions on how to implement each one in your business.