New Business Plan as Game Changer

New Business Plan as Game Changer

by Cleve Langton It’s January, which means it’s the time for setting the objectives for the new year. And new business should be no exception. Too many times, however, new business plans are as windy as Chicago and as effective as the New York State Assembly. Here’s how to create a new business plan that delivers results: PLAN OBJECTIVES The difference between a good new business plan and a bad new business plan is generally not the quality of the thinking but rather the commitment to implement it and stick with it.  New business plans frequently are “feel-good/look-good” documents that are embraced at the beginning of the year and forgotten by mid-year.  The commitment evaporates because either the goals are impractical or the commitment wanes. Far more frequently, it is the latter. New business plans add value because they require those who are responsible for creating and implementing the new business process to think it through and commit in black and white. It also forces top management to buy in, modify or reject the process and prospects that are being proposed. But a plan is only as good as the paper it’s written on if there’s no commitment to support it at all levels of the company. As stated previously, new business is everyone’s business, particularly those in top management. Here are the elements and structure of a good new business plan: GUIDING PRINCIPLES

• Long enough to cover the critical elements, short enough so everyone can wrap their heads around it
• Has an objective assessment of core competencies
• Has reasonable vs. feel-good objectives
• Has realistic time frames
• Has clear-cut accountability
• Has measurable goals
• Has top management buy-in (views it as necessity vs. nicety)

KEY ELEMENTS The first place to start is a DNA assessment or SWOT analysis. This entails realistic assessment of your company’s strengths and weaknesses. The traditional SWOT analysis is the backbone of the plan. A plan to exploit strengths, to correct weaknesses and to recognize opportunities and threats must be part of the plan. Understand what your real DNA is and enhance it or compensate for it. The following are the component parts: 1. Asset Assessment A thorough assessment of the current assets – a realistic review of where each of your current accounts is in its life cycle – is a critical element of the plan.  Life cycles vary dramatically by type of account. Assessing an account’s projected tenure with your firm provides critical input into your prospect target priority analysis. It’s also a realistic way to conduct your conflict analysis.  A conflict today may be a gaping hole tomorrow. 2. Category Analysis The category analysis is one of the most important elements of the plan. In some service businesses, conflicts are insurmountable obstacles; in others, they are roadblocks around which you can maneuver. In some, they are seen as providing valuable experience – a positive – not a negative.  Existing accounts in a category are defined as “conflicts” or “experience,” depending on the type of service business you’re in and the artfulness in which you cast them. The category analysis must include the experience your company has had in the last three years. Any account lost more than three years ago is not valued as experience by prospects unless it’s a “classic” and the people that worked on it are still at the firm. 3. Personnel Inventory Knowing who has what experience and a realistic assessment of the employee’s value to, and in, the new business process is an essential part of the plan. For the experience part of the plan, include all mid-to-top management. Include an assessment of the odds of having each person’s active participation in the new business process. Profile only those people who have a proven track record in either prospecting or pitching and those that volunteer rather than wait to be drafted. 4. Competitive Framework This is an important part of the plan but one that frequently gets bloated with inactionable information. It is important to analyze which companies you compete against most frequently but do it only in the context of relative weaknesses that your company is willing to correct. Knowing who you’re competing against is useless unless it changes the way in which you pitch or prospect. 5. Won/Lost Analysis Analyze which categories and type of accounts are in your sweet spot. You’ll generally find that rate of success over the last few years follows a genre of category type or style of client. 6. Accountability Identify who does what and when. The entire plan is useless if this section is not actionable and practical and all players are not fully committed to it.  Accountability applies to every spectrum of the plan, from weaknesses that have to be corrected, to specific category development and prospect pursuit assignments. 7. Measurability Assignment of tasks without measurement of progress is a waste of time. It renders an action-oriented plan useless unless progress can be tracked against measurable assessment points. Measurement is obviously critical to assessing progress, but it’s also invaluable in guiding mid-course corrections. The elements covered so far are the need-to-know areas – they are critical to the success of the plan. Most other plan topics include areas that bloat a plan and add little more than esoteric puffery. BOTTOM LINE A new business plan is as important as any annual financial plan. However, it’s as useless as a Madoff balance sheet if there’s not total management buy-in, commitment and an infusion into the organization of the importance of a methodical and measured new business effort. Cleve Langton is author of New Business Lessons from Madison Avenue, the highly-acclaimed business development guide which has been described by Bob Liodice, President & CEO of the Association of National Advertisers, as the “new business bible for professional services companies and for marketers.” The book is available through Amazon and has been translated into multiple languages.