the business plan requires constant evaluation by

Effective Business Evaluation: A Comprehensive Guide

At its core, business evaluation involves a systematic assessment of various aspects of a company’s operations, financial health, and market presence. It encompasses the collection and analysis of data from multiple sources, enabling decision-makers to gain a comprehensive view of their organization. The benefits of business evaluation are multi-fold, ranging from enhanced operational efficiency and optimized resource allocation to the identification of potential risks and the formulation of effective growth strategies. By harnessing the insights derived from business evaluation, companies can position themselves for long-term success in an ever-evolving business landscape.

Business evaluation stands as a pivotal practice that enables companies to navigate the complex challenges of today’s business world. It provides a structured framework for critically analyzing a company’s performance and making well-informed decisions based on tangible data and insights. As markets evolve, consumer behaviors shift, and technologies advance, businesses must adapt and evolve to remain competitive. Business evaluation equips leaders with the tools they need to understand their current position, identify areas for improvement, and capitalize on emerging opportunities.

Essential Data Collection and Analysis

Importance of accurate data for evaluation.

Accurate and reliable data serve as the bedrock upon which informed decisions are built. Whether it’s assessing financial performance, gauging operational efficiency, or identifying market trends, the quality of data directly impacts the validity of evaluation outcomes. Inaccurate or outdated data can lead to flawed conclusions and misguided strategies, potentially hindering a company’s growth trajectory. Therefore, meticulous attention to data accuracy, validity, and relevance is paramount in ensuring the effectiveness of the evaluation process.

Types of Data: Financial, Operational, Market

Successful business evaluation necessitates the collection and analysis of a diverse range of data. Financial data, including income statements, balance sheets, and cash flow statements, offer insights into a company’s fiscal health and profitability. Operational data delves into the efficiency and effectiveness of internal processes, shedding light on potential bottlenecks and areas for improvement. Market data, encompassing customer behavior, competitive landscape, and industry trends, provides a holistic view of the external forces shaping a business’s environment. By combining these different data streams, decision-makers can develop a comprehensive understanding of their organization’s strengths and vulnerabilities.

Analyzing Financial Health

The financial health of a business serves as a critical barometer of its overall well-being and potential for growth. This section delves into the key concepts and methods involved in assessing a company’s financial performance, equipping you with the tools to dissect financial statements, interpret key ratios, and draw meaningful conclusions.

Key Financial Ratios

Financial ratios are fundamental tools that enable decision-makers to gain insights into various aspects of a company’s financial health. Liquidity ratios, such as the current ratio and quick ratio, assess a company’s ability to meet short-term obligations. Solvency ratios, including the debt-to-equity ratio and interest coverage ratio, shed light on the company’s long-term financial stability and its capacity to manage debt. Profitability ratios, such as gross profit margin and net profit margin, provide insights into the company’s ability to generate profits from its operations. Efficiency ratios, including inventory turnover and receivables turnover, gauge the effectiveness of resource utilization.

Evaluating Liquidity, Solvency, and Profitability

Liquidity ratios help determine a company’s ability to cover its short-term liabilities, ensuring smooth day-to-day operations and financial stability. Solvency ratios, on the other hand, provide insights into the company’s capacity to manage long-term debt and meet its obligations over time. These ratios play a pivotal role in evaluating the company’s financial risk and its ability to weather economic downturns. Profitability ratios reveal how efficiently the company generates profits relative to its revenue and costs, indicating its potential for sustained growth and value creation.

Operational Efficiency

Operational efficiency is a critical driver of a company’s success and competitive advantage. This section explores the essential components of operational evaluation, guiding you through the process of identifying bottlenecks, optimizing workflows, and enhancing overall efficiency to propel your business forward.

Process Bottlenecks and Inefficiencies

Every business consists of a complex web of processes, from production and supply chain management to customer service and administrative tasks. Identifying bottlenecks and inefficiencies within these processes is key to streamlining operations and maximizing productivity. Bottlenecks, where resources are constrained and processes slow down, can hinder timely delivery and customer satisfaction. Uncovering these bottlenecks requires a thorough examination of workflows, resource allocation, and potential chokepoints.

Operational Improvements and Overall Performance

Efficiency improvements in specific operational areas have a cascading effect on the overall performance of the company. Optimizing processes not only enhances productivity but also reduces costs, shortens lead times, and improves the quality of products or services. Moreover, streamlined operations free up valuable resources that can be redirected toward innovation and growth initiatives. By connecting operational improvements to broader business goals, you create a virtuous cycle of continuous enhancement.

SWOT Analysis for Strategic Insights

A SWOT analysis stands as a powerful tool for gaining a comprehensive understanding of your business’s internal strengths, weaknesses, as well as external opportunities and threats. This section will guide you through the process of conducting a SWOT analysis, enabling you to unearth valuable insights that can shape your strategic decisions and pave the way for growth.

Exploring Internal Strengths and Weaknesses

Internal factors form the core of a SWOT analysis, encompassing the strengths and weaknesses inherent to your organization. Strengths are the attributes and capabilities that give your business a competitive edge – it could be a strong brand, a dedicated workforce, or proprietary technology. Conversely, weaknesses are areas where your business may lag – perhaps limited resources, outdated processes, or a lack of expertise. Identifying these internal factors provides a clear picture of your company’s current standing and where it can improve.

Identifying External Opportunities and Threats

External factors involve the opportunities and threats presented by the broader business environment. Opportunities are trends, market shifts, or emerging technologies that you can capitalize on to propel your business forward. Threats, on the other hand, encompass external forces like competition, regulatory changes, or economic fluctuations that could potentially hinder your progress. By identifying these external factors, you gain a holistic view of the challenges and possibilities that lie ahead.

Informed Decision-Making and Continuous Improvement

The insights derived from a comprehensive business evaluation serve as a compass that guides decision-makers through the complex landscape of choices and possibilities. When faced with critical decisions such as resource allocation, expansion strategies, or new product launches, the data-driven insights from evaluation provide a solid foundation upon which to build informed choices. By minimizing guesswork and relying on objective analysis, decision-makers can enhance the likelihood of positive outcomes and mitigate potential risks.

Business evaluation is not a one-time event, but rather an ongoing practice that fuels continuous improvement. As markets evolve, consumer preferences shift, and technologies advance, businesses that remain stagnant risk falling behind. Embracing a culture of ongoing evaluation enables companies to adapt swiftly to changing circumstances, capitalize on emerging opportunities, and address evolving challenges proactively. By regularly assessing performance, identifying areas for enhancement, and fine-tuning strategies, businesses position themselves for sustained growth and resilience.

Key TakeAway

Harnessing the power of business evaluation.

The knowledge acquired through business evaluation is not meant to reside within spreadsheets and reports; it is meant to inform action. By translating evaluation insights into strategic initiatives, you can harness your company’s strengths, address its weaknesses, and seize the opportunities that lie on the horizon. Whether it’s optimizing operations, exploring new markets, or refining customer experiences, the data-driven approach derived from evaluation serves as the bedrock of strategic success.

The business landscape is a dynamic arena, subject to shifts and transformations. To thrive in this environment, businesses must embrace the ethos of continuous improvement. Ongoing business evaluation becomes the cornerstone of this philosophy, enabling you to stay nimble, responsive, and attuned to emerging trends and challenges. Just as a ship’s captain adjusts the sails to navigate changing winds, so too must businesses adapt their strategies based on the insights garnered from constant evaluation.

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Business Plan Evaluation

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What is Business Plan Evaluation?

A business plan evaluation is a critical process that involves the assessment of a business plan to determine its feasibility, viability, and potential for success. This process is crucial for entrepreneurs, investors, and other stakeholders as it helps them make informed decisions about the business. The evaluation process involves analyzing various aspects of the business plan, including the business model, market analysis, financial projections, and management team.

The purpose of a business plan evaluation is to identify strengths and weaknesses in the plan, assess the feasibility of the business idea, evaluate the potential for profitability, and determine the likelihood of achieving the business objectives. The evaluation process also helps identify areas where improvements can be made to enhance the chances of success. This process is particularly important for solopreneurs who are solely responsible for the success or failure of their business.

Importance of Business Plan Evaluation

The evaluation of a business plan is an essential step in the business planning process. It provides an opportunity for the entrepreneur to critically examine their business idea and identify potential challenges and opportunities . The evaluation process also provides valuable insights that can help improve the business plan and increase the chances of success.

For investors, a business plan evaluation is a crucial tool for risk assessment. It allows them to assess the viability of the business idea, the competence of the management team, and the potential for return on investment. This information is vital in making investment decisions.

For Solopreneurs

For solopreneurs, the evaluation of a business plan is particularly important. As they are solely responsible for the success or failure of their business, it is crucial that they thoroughly evaluate their business plan to ensure that it is feasible, viable, and has the potential to be profitable.

The evaluation process can help solopreneurs identify potential challenges and opportunities, assess the feasibility of their business idea, and determine the likelihood of achieving their business objectives. This information can be invaluable in helping them make informed decisions about their business.

For Investors

Investors use the evaluation process to determine whether or not to invest in a business. They look at various aspects of the business plan, including the business model, market analysis, financial projections, and management team, to assess the potential for success. If the evaluation reveals that the business plan is solid and has a high potential for success, the investor may decide to invest in the business.

Components of a Business Plan Evaluation

A business plan evaluation involves the analysis of various components of the business plan. These components include the executive summary, business description, market analysis, organization and management, product line or service, marketing and sales, and financial projections.

Each of these components plays a crucial role in the overall success of the business, and therefore, they must be thoroughly evaluated to ensure that they are realistic, achievable, and aligned with the business objectives.

Executive Summary

The executive summary is the first section of a business plan and provides a brief overview of the business. It includes information about the business concept, the business model, the target market, the competitive advantage, and the financial projections. The executive summary is often the first thing that investors read, and therefore, it must be compelling and persuasive.

In the evaluation process, the executive summary is assessed to determine whether it clearly and concisely presents the business idea and the plan for achieving the business objectives. The evaluator also assesses whether the executive summary is compelling and persuasive enough to attract the attention of investors.

Business Description

The business description provides detailed information about the business. It includes information about the nature of the business, the industry, the business model, the products or services, and the target market. The business description also provides information about the business's competitive advantage and how it plans to achieve its objectives.

In the evaluation process, the business description is assessed to determine whether it provides a clear and comprehensive description of the business. The evaluator also assesses whether the business description clearly outlines the business's competitive advantage and how it plans to achieve its objectives.

Methods of Business Plan Evaluation

There are several methods that can be used to evaluate a business plan. These methods include the SWOT analysis, the feasibility analysis, the competitive analysis, and the financial analysis. Each of these methods provides a different perspective on the business plan and can provide valuable insights into the potential for success.

It's important to note that no single method can provide a complete evaluation of a business plan. Therefore, it's recommended to use a combination of these methods to get a comprehensive understanding of the business plan.

SWOT Analysis

SWOT analysis is a strategic planning tool that is used to identify the strengths, weaknesses, opportunities, and threats related to a business. This method involves examining the internal and external factors that can affect the success of the business.

In the evaluation process, a SWOT analysis can provide valuable insights into the potential for success of the business. It can help identify the strengths and weaknesses of the business plan, as well as the opportunities and threats in the market.

Feasibility Analysis

A feasibility analysis is a process that is used to determine whether a business idea is viable. This method involves assessing the practicality of the business idea and whether it can be successfully implemented.

In the evaluation process, a feasibility analysis can provide valuable insights into the feasibility of the business plan. It can help determine whether the business idea is practical and whether it can be successfully implemented.

In conclusion, a business plan evaluation is a critical process that involves the assessment of a business plan to determine its feasibility, viability, and potential for success. This process is crucial for entrepreneurs, investors, and other stakeholders as it helps them make informed decisions about the business.

The evaluation process involves analyzing various aspects of the business plan, including the business model, market analysis, financial projections, and management team. The purpose of a business plan evaluation is to identify strengths and weaknesses in the plan, assess the feasibility of the business idea, evaluate the potential for profitability, and determine the likelihood of achieving the business objectives.

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What Is a Business Plan?

Understanding business plans, how to write a business plan, common elements of a business plan, how often should a business plan be updated, the bottom line, business plan: what it is, what's included, and how to write one.

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.

A business plan is a document that details a company's goals and how it intends to achieve them. Business plans can be of benefit to both startups and well-established companies. For startups, a business plan can be essential for winning over potential lenders and investors. Established businesses can find one useful for staying on track and not losing sight of their goals. This article explains what an effective business plan needs to include and how to write one.

Key Takeaways

• A business plan is a document describing a company's business activities and how it plans to achieve its goals.
• Startup companies use business plans to get off the ground and attract outside investors.
• For established companies, a business plan can help keep the executive team focused on and working toward the company's short- and long-term objectives.
• There is no single format that a business plan must follow, but there are certain key elements that most companies will want to include.

Investopedia / Ryan Oakley

Any new business should have a business plan in place prior to beginning operations. In fact, banks and venture capital firms often want to see a business plan before they'll consider making a loan or providing capital to new businesses.

Even if a business isn't looking to raise additional money, a business plan can help it focus on its goals. A 2017 Harvard Business Review article reported that, "Entrepreneurs who write formal plans are 16% more likely to achieve viability than the otherwise identical nonplanning entrepreneurs."

Ideally, a business plan should be reviewed and updated periodically to reflect any goals that have been achieved or that may have changed. An established business that has decided to move in a new direction might create an entirely new business plan for itself.

There are numerous benefits to creating (and sticking to) a well-conceived business plan. These include being able to think through ideas before investing too much money in them and highlighting any potential obstacles to success. A company might also share its business plan with trusted outsiders to get their objective feedback. In addition, a business plan can help keep a company's executive team on the same page about strategic action items and priorities.

Business plans, even among competitors in the same industry, are rarely identical. However, they often have some of the same basic elements, as we describe below.

While it's a good idea to provide as much detail as necessary, it's also important that a business plan be concise enough to hold a reader's attention to the end.

While there are any number of templates that you can use to write a business plan, it's best to try to avoid producing a generic-looking one. Let your plan reflect the unique personality of your business.

Many business plans use some combination of the sections below, with varying levels of detail, depending on the company.

The length of a business plan can vary greatly from business to business. Regardless, it's best to fit the basic information into a 15- to 25-page document. Other crucial elements that take up a lot of space—such as applications for patents—can be referenced in the main document and attached as appendices.

These are some of the most common elements in many business plans:

• Executive summary: This section introduces the company and includes its mission statement along with relevant information about the company's leadership, employees, operations, and locations.
• Products and services: Here, the company should describe the products and services it offers or plans to introduce. That might include details on pricing, product lifespan, and unique benefits to the consumer. Other factors that could go into this section include production and manufacturing processes, any relevant patents the company may have, as well as proprietary technology . Information about research and development (R&D) can also be included here.
• Market analysis: A company needs to have a good handle on the current state of its industry and the existing competition. This section should explain where the company fits in, what types of customers it plans to target, and how easy or difficult it may be to take market share from incumbents.
• Marketing strategy: This section can describe how the company plans to attract and keep customers, including any anticipated advertising and marketing campaigns. It should also describe the distribution channel or channels it will use to get its products or services to consumers.
• Financial plans and projections: Established businesses can include financial statements, balance sheets, and other relevant financial information. New businesses can provide financial targets and estimates for the first few years. Your plan might also include any funding requests you're making.

The best business plans aren't generic ones created from easily accessed templates. A company should aim to entice readers with a plan that demonstrates its uniqueness and potential for success.

2 Types of Business Plans

Business plans can take many forms, but they are sometimes divided into two basic categories: traditional and lean startup. According to the U.S. Small Business Administration (SBA) , the traditional business plan is the more common of the two.

• Traditional business plans : These plans tend to be much longer than lean startup plans and contain considerably more detail. As a result they require more work on the part of the business, but they can also be more persuasive (and reassuring) to potential investors.
• Lean startup business plans : These use an abbreviated structure that highlights key elements. These business plans are short—as short as one page—and provide only the most basic detail. If a company wants to use this kind of plan, it should be prepared to provide more detail if an investor or a lender requests it.

Why Do Business Plans Fail?

A business plan is not a surefire recipe for success. The plan may have been unrealistic in its assumptions and projections to begin with. Markets and the overall economy might change in ways that couldn't have been foreseen. A competitor might introduce a revolutionary new product or service. All of this calls for building some flexibility into your plan, so you can pivot to a new course if needed.

How frequently a business plan needs to be revised will depend on the nature of the business. A well-established business might want to review its plan once a year and make changes if necessary. A new or fast-growing business in a fiercely competitive market might want to revise it more often, such as quarterly.

What Does a Lean Startup Business Plan Include?

The lean startup business plan is an option when a company prefers to give a quick explanation of its business. For example, a brand-new company may feel that it doesn't have a lot of information to provide yet.

Sections can include: a value proposition ; the company's major activities and advantages; resources such as staff, intellectual property, and capital; a list of partnerships; customer segments; and revenue sources.

A business plan can be useful to companies of all kinds. But as a company grows and the world around it changes, so too should its business plan. So don't think of your business plan as carved in granite but as a living document designed to evolve with your business.

Harvard Business Review. " Research: Writing a Business Plan Makes Your Startup More Likely to Succeed ."

U.S. Small Business Administration. " Write Your Business Plan ."

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The importance of knowing how to evaluate a strategic plan

Now that you know more precisely what strategic planning is and what it is for – with the help of Peter Drucker’s ideas – let’s take a look at some strategic planning objectives.

3 main objectives of strategic planning

Below are the main objectives and benefits of monitoring your organization’s strategic plan:

1- Ensuring that activities are being performed within the defined parameters

During the development of strategic planning, for each activity planned for the organization, necessary parameters for their accomplishment are considered.

Costs, execution time, financial, material and human resources needed, among others.

Now, while the plan is being put in place, the manager must make sure that all activities are being carried out within the proper parameters.

Rather than assessing, the manager must look at whether a change of course is required, and whether the parameters for any activity need to be rethought.

Ensuring activity progress helps set performance standards that indicate progress towards long-term goals, assesses people’s performance, and provides input for feedback.

2- Ensuring activities are consistent with company DNA

The soul of the organization is closely linked to its vision, mission and values.

Monitoring strategic planning is also a way to ensure that activities are being developed in accordance with the values that guide the organization and its organizational culture.

Since they are directly related to the organizational climate and the corporate image of the company.

Check out this unique Siteware infographic that shows the consequences of a misaligned organizational culture of strategic planning:

3- Assessing ability to achieve goals and identify problems

Analyzing both the internal and external workforce and the exchange of ideas is also important in measuring how well a company is able to achieve what was set for the period.

By comparing performance data with established standards, it is possible to visualize or anticipate possible bottlenecks in corporate daily life.

Why is monitoring strategic planning important?

When a company monitors its strategic planning closely, it ensures that its teams are doing a good job, committed to maintaining progress, and with proper records so they can be evaluated.

Here is another quote from a master, Ram Charan , to illustrate how monitoring strategic planning is critical.

“ 70% of strategies fail due to ineffectiveness. They rarely fail due to lack of intelligence or vision.”

That is, at the time of executing the plan, it is crucial to carry out strategic monitoring and evaluation of the planning systematically and constantly.

After all, if 70% of planning activities fail in execution, only strategic planning control and evaluation – with metrics – will allow errors to be detected and adjustments made.

The metrics a company uses to measure also indicate the quality of the year or period the company is in.

If necessary, from what is evaluated, it is possible to correct the current path, make investments, hire staff, seek technological tools, build partnerships, among many other solutions.

Monitoring is part of the strategic planning system primarily to keep track of what is happening.

And this is usually done through an analysis of regular operational and financial reports on a company’s activities.

The results of a strategic planning follow-up are:

• Incentive for continuous improvement;
• Provision of data on the impact of activities;
• Information for decision making.

The monitoring of strategic planning should be carried out based on the same indicators used when preparing strategic planning.

This also allows for process review as the company realizes that activities, internal and external relationships, customer approaches, etc. need to be modified.

Is it clear to you how important strategic planning and the control of action plans and activities are?

Examples of strategic planning indicators

You have seen that there is no way to monitor strategic planning without the use of indicators.

There are actually three types of indicators to consider in a company:

• Strategic Indicators:  They point to the future, the path the company is expected to follow, and are linked to the mission and vision of the business. They will be reached in the long term, between 3 and 5 years. After an analysis of internal and external scenarios and company differentials, with the help of SWOT analysis, strategic indicators are usually defined.
• Tactical Indicators:  are related to the actions of each area of the company. They make up an action plan that is effective in a shorter period than the strategic objectives, but should contribute to it. If tactical indicators are being met, there is a good chance that strategic objectives will also be met successfully.
• Operational Indicators:  short term. They are directly linked to the day-to-day operations in a company and the progress of the processes. Operational indicators are assigned to each employee to achieve the desired performance level that will make it possible to achieve tactical and strategic goals.

How do you define strategic planning indicators, anyway?

We have seen in the paragraphs above that strategic indicators have the following characteristics:

• Point to the future
• Achieved in the long term
• Linked to a company’s mission and vision
• Based on competitive differences

So, for example, it would make no sense to define strategic indicators like the following:

• Improve the efficiency of our production line by 15% next year.
• Increase sales by 10% by the end of June
• Hire new talent to fill 6 positions on the board by year’s end

These are typical examples of tactical indicators.

To get examples of strategic planning indicators, one must think of changes more linked to the company’s DNA, its mission to society.

Here is a short list of examples of strategic planning indicators:

• Launch 3 new product lines each year over the next 4 years to gain 35% more Share in Market X.
• Create a corporate university that meets our needs within a maximum of 2 years and institute university study support plans to enable our employees to have 85% of the workforce with a college degree and 50% with a postgraduate degree. 5 years.
• Deactivate business units with less than 20% profitability and use the proceeds from the sale of these assets to start an international expansion project by opening 1 unit in countries X, Y and Z and 3 units in country W within 4 years.

Challenges of following strategic planning

Now that it’s clear to you how to evaluate a strategic plan, let’s look at the challenges inherent in doing it.

If we consider that strategic planning is the consolidation of ideas, it is in the implementation of these ideas that the organization will obtain its results, as Charan pointed out.

That’s why it needs to be constantly reevaluated and rethought as corporate progresses.

The biggest challenge of strategic management is related to the ability to move the organization and keep it connected with what was proposed by the strategic plan, with the adaptability that this process requires.

Like every management function, this presupposes a permanent dynamic of planning, execution, monitoring, evaluation, adjustments and readjustments.

And if you want to know how to evaluate a strategic plan even more quickly and assertively, check out STRATWs One strategic planning software.

It enables a friendly view of your strategy map, making it easy to track indicators and goals and creating action plans for each one.

It makes it much easier to understand how to evaluate a strategic plan and monitor internal activities.

Revolutionize the management of your company with STRATWs One

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Business Plan Review

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A business plan review is an in-depth examination of your business plan and its viability. It can be conducted by a single expert, a panel of experts, or you and your colleagues.

What Is a Business Plan?

A business plan is essential for any company wishing to start or expand its operations. It provides a framework for decision-making and helps to make sure that all sections of the organization are working together towards common goals. A good business plan can also help attract investors or obtain loans from banks or other lending institutions.

The main purpose of a business plan is to provide investors with information about the opportunities and challenges facing your company so they can make informed decisions about whether or not they want to invest in it. If they decide to invest, they'll know how much money they are likely to make and what risks might arise during their investment term (usually between five years and ten years).

Of course, not all startups need a full-blown business plan — but if you seek outside funding or investment, it's best to start developing yours as early as possible. And even if you don't seek outside funding, it's still smart to develop a comprehensive plan for your business to clearly define what success looks like and how you'll get there.

What Is a Business Plan Review?

A business plan review should be conducted before you begin your venture, at least once during its life cycle (preferably after you have experienced some success), and when it comes time for you to close up shop. The objective is to identify strengths and weaknesses in your plan so that you can take steps toward improving those areas.

The purpose of a business plan review is not to evaluate the likelihood of success for a given project or company but rather to determine whether the project has been adequately researched and whether the information presented is accurate and comprehensive enough for investors or other stakeholders to make an informed decision about investing in it.

Why Should You Have Your Business Plan Reviewed?

Your business plan is a living document. Over time, it will change as you grow and learn more about your business, market and competition.

But even when the plan isn't changing, it's important to review it regularly to ensure that you're still on track. Here are seven reasons why:

A good review will give you an unbiased look at your plan, highlighting areas where more information is required or gaps in your thinking. This can help ensure that your plan contains everything it needs to, which makes it easier to manage and gives investors confidence in your business.

A business plan is a blueprint for reaching your long-term goals. But a good review will help you see how well your current strategy aligns with those goals and whether there are any holes in the plan. If there are gaps, the reviewer can help you identify what needs to be changed and where resources must be allocated to achieve those goals.

Having someone look over your plan from an objective point of view can help you see potential problems before they become major issues. You might find that something is missing from your strategy or that too many steps are involved in achieving your goals. It could also reveal other important information that will help improve the overall quality of your plan.

Business plans don't just cover what's happened so far — they also forecast what's going to happen next year, six months from now and beyond. So if things change along the way, they may not be reflected in the plan written today. A review can help keep your focus on where you want to go in the future by reviewing your progress each month and adjusting accordingly if needed.

A good consultant will give you constructive feedback about areas where your business plan falls short. This is invaluable when it comes time to revise your plan to more accurately reflect the reality of what's happening in your company, whether due to external factors or internal mistakes. A comprehensive review will also show you where there are holes in your strategy and suggest how they can be filled to strengthen your company's position in its marketplace.

Looking at how your business has performed over time, you can identify areas of concern before they become serious problems.

For example, if sales are declining or profits are shrinking, these trends might be due to temporary factors that can be corrected with better marketing or product development. If sales continue to fall despite these efforts, however, there could be deeper-rooted problems that need addressing.

A good business plan will give you an idea of what your company can accomplish in the short term and over time.

A good business plan also helps potential investors understand what your business is about and why it has the potential for success. This means that if they invest in your company, they can be more confident that they're making a smart choice that will make them money.

• Business Strategy: Planning a company's strategic direction and goals. The business strategy consists of setting a business's vision and mission, identifying its strengths and weaknesses, and evaluating growth opportunities.
• Business Forecast: A business forecast predicts how well the company's revenue and expenses will fare for the next few years. It typically includes financial statements for the current year, estimates for the following year, and projections for two or three subsequent years.
• Bank-Ready Business Plan: A business plan that has been carefully prepared to meet all criteria set by banks when applying for a loan. The bank will want financial projections showing how your business can repay the loan and reasonable evidence that you have identified all costs associated with starting and operating your new business.

Hire the best lawyers for a business plan review through Contracts Counsel where you can find many qualified and vetted lawyers to help you go over your business plan.

ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.

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10 Steps to Evaluating Your Business Plan

Whether you’re writing your first business plan or updating your current one, the process requires strategic thinking, market research and motivation.

A well-developed business plan is a great way for you to take stock of your company’s attributes and needs. It outlines how you will progress over the coming years and also reveals information about the business owner. It explains how your strengths will be an asset to your business and how you will address areas where you may need help.

Here is an overview of 10 sections a good business plan should include:

1. Executive summary

The executive summary is a condensed version of your full business plan and covers:

• The high points of what your company does (or will do)
• Plans for the future
• How you will execute those plans
• Why your company will be successful

The summary is the big picture. It’s where plan reviewers – including banking partners – will form a first impression of your company. Some people prefer to write this section last while others prefer to write it first.

2. Company description

Explain the different elements of your business. Help plan reviewers quickly understand your goals, marketplace needs, how your products and services will meet those needs, and the competitive advantages of your business.

3. Market analysis

Show you are knowledgeable about the industry and the market in which your business will compete. Include your research findings and conclusions, such as:

• Industry description and outlook
• Information about your target market
• Competitive analysis
• Any known regulatory restrictions

There are many resources that can help you analyze the market, including the SCORE Association and Small Business Development Centers .

4. Organization and management

Explain your company’s organizational structure and ownership, its legal structure, and team backgrounds and qualifications.

5. Service or product line

Emphasize the benefits to customers and focus on why your particular service or product will fill a need for your target customers.

6. Sales and marketing

Your sales strategy should be defined concurrently with the marketing plan. How will you sell your product? Include your sales force and sales activity strategies.

Marketing helps you attract customers. Define your marketing strategy, which should be unique to your company and evaluated on an ongoing basis.

7. Contingency plan

Document how you will deal with some of the good and bad situations of running a business:

• What will you do if your product is an overwhelming success and demand is greater than expected?
• What will you do if initial sales are sluggish? How will you jump-start sales?

8. Funding request

Ask for the amount of money you need, explain why you need it and how it will be used. You will need to provide historical and prospective financial information to support your request.

9. Financial history or projections

Demonstrate your company can meet financial obligations. If you own an established business, supply two to three years of historical data related to its performance. If your business is a start-up or still in its infancy, supply projected data showing the company’s anticipated financial performance for the current and upcoming fiscal years.

10. Personal guarantee

Most business loans require the business owner(s) to personally guarantee repayment of debt. This means the owner of the business agrees to repay the debt using personal means if the business can no longer pay its debt. As a result, you should include the following documents with your business plan funding request:

• Your personal tax returns for the last two to three years.
• A personal financial statement listing the value of your personal assets and the balance(s) of exiting personal debt(s).

With a long history of advocating for entrepreneurs, Bankers Trust understands the needs of small businesses and the value they bring to the community.

Creating your business plan will give your company the foundation and direction needed to reach your goals. Contact us when you’re ready to put your business plan in motion.

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Chad Solberg

Chad Solberg joined Bankers Trust Company in May 2013 bringing 15 years of banking and finance experience. He currently serves as VP, Business Banking Manager overseeing a team of dedicated business bankers. Prior to joining Bankers Trust, he most recently spent nine years with Wells Fargo as a lender in business banking. Chad was also an examiner with the Federal Reserve Bank of Chicago for three years.

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Re-evaluating your goals in the midst of change

Lucid Content

Reading time: about 7 min

When was the last time you updated your business plan? 

Consistency is an important part of executing a strategy successfully. However, if you aren’t regularly evaluating and updating your business plans and goals to adapt to the changing needs of your business, you risk falling behind and missing key opportunities.

Circumstances and plans change. Whether you’re experiencing rapid growth, undergoing an acquisition, or transitioning to remote work, your plans and goals need to evolve to address a changing business environment. 

Use the following tips and strategies for effectively re-evaluating plans and communicating change amid disruption.

When to re-examine your business goals

Evaluating your business plan isn’t like an annual review. You can evaluate your business plans and goals as often as you want, whenever you want. The most important thing is to make sure you examine your plans whenever there is significant change in your business. 

Change can come in many forms, including: 

• Acquisitions and mergers
• Evolving customer needs
• New legislation
• Technological innovations
• Transitions to remote work
• New business offices or locations
• Shifting marketplace competition

Change may come intentionally as you grow your business or through forces that are out of your control. The key is to adapt your plans strategically. 

Pro tip: Evaluate your business goals regularly. Pick a cadence that makes sense for you and your business—whether that is monthly, quarterly, or semi-annually. You can always add more evaluations as needs arise. But checking your plans periodically helps you stay on track with your strategy and identify any goals that are no longer serving your business.  

Why you need to re-evaluate during times of change

Business plans and goals help you steer your business. A good business plan acts as a roadmap for decision-making and informs your strategy for setting and achieving key milestones and goals.

However, business plans are not static benchmarks. They should be a living document that you refer to and update regularly.

Re-evaluate your plans and goals often (especially during change or disruption) so you can:

• Stay relevant.
• Match the needs of your business. 
• Refresh your brand.
• Take advantage of new opportunities. 

If your plans and goals don’t match the current business reality, your strategies will be ineffective and irrelevant—and your business will suffer. 

How to re-evaluate your plans 

Follow these tips and best practices for re-examining and updating your plans successfully.

Focus on your consumer

If your business plans aren’t serving your target audience—your customers—then they’re not serving you either. 

Consider who your consumers are and what they need. Have those needs changed? Don’t make assumptions. Use data and feedback to inform your customer profiles and help you identify areas you need to revise.

Assess whether your goals are still relevant and make sense for your organization

Are you targeting the right goals? If your organization is targeting goals that are no longer relevant or don’t align with your mission, you will waste valuable time, money, and resources. 

Examine your current goals and consider how they align with your strategy and current business environment. Don’t be afraid to revise or eliminate goals that no longer make sense with your overall plans. Be specific when outlining your goals and make a plan to achieve your new objectives.

Determine what’s working and what’s not working

What worked in the past may not work in the future. To successfully move forward amidst change, you need to let go of what no longer works and adopt new strategies for progress. 

Consider your original plans and compare them to the actual results you saw. Identify key differences between what you planned versus what happened. Why didn’t those plans work? How have the circumstances changed now? What could you do differently going forward? 

Answering these questions will help you identify where your plans need to shift and what strategies may still work for you.

Learn how you can better understand your current state and adapt processes to fit your new goals in Lucidchart.

Identify new opportunities for growth

Re-evaluating your plans isn’t just about looking back—it’s about looking forward. Change brings both disruption and opportunities. What opportunities are there now that didn’t exist before? 

For example, if you are transitioning to a remote workforce, you may have new opportunities to hire top talent from a more diverse pool of applicants. This can be a significant growth opportunity for companies who struggle to fill talent gaps or are looking for ways to improve their company culture and employee engagement.

Remember to be flexible. Organizational changes to strategic plans and goals takes time. 

Communicating change to employees 

While change can be good, adapting to change is difficult—especially for employees, who are often the ones most impacted by evolving goals and business processes. So it’s important you communicate changes clearly. 

Good communication will help keep everyone on the same page, reduce friction, increase adoption, and streamline the transition.

Communicating change effectively should result in:

• Awareness of the need for change
• Understanding of how it impacts the employee (and the business)
• Support for and ability to implement change

In other words, employees should recognize the need for change and feel empowered to make it happen.

Here are a few ways to communicate change effectively to your employees. 

1. Tell employees why this change is needed

The first step to any communication on change is to explain what the changes are and why they are necessary. How will these changes improve the business? What are the benefits to the employees? What are the consequences if you don’t change? 

When people know the why, they are more likely to support the change. 

2. Clarify expectations to employees for implementing change

How will these changes impact your employees? What are they expected to do? 

Changes may affect people directly or indirectly in your organization. The key is to communicate clearly to each group what the expectations are for implementing and supporting those changes. 

For example, if you are introducing a new technology to the workflow, when are employees expected to adopt it? Who is responsible for training and onboarding? When will training occur? How can employees provide feedback on the process?

Empower your employees by outlining clear expectations. Visuals, such as process flowcharts or timelines, can help you delineate roles and responsibilities and clarify when each task should be completed.

3. Explain how you are measuring success

Once you make changes, how will you know they worked? What does success look like? Explain how you plan to measure the success of the changes. 

This step is especially important for employees whose goals or processes may have shifted. If they don’t know if their efforts are working and can’t confidently measure progress, it will be difficult to: 

• Implement changes long-term.
• Maintain employee motivation and engagement. 

Outline exactly what the new changes, goals, and performance metrics will be so everyone can track their progress effectively.

Need help getting employees to accept change? Consider these change management models.

4. Highlight what’s in it for employees

For any change to be successful, you need the support of your employees. Make it easier for them to buy in by highlighting how the changes will positively affect them. For example, will the changes make their job easier? Will they land more clients or close more sales? Are there any incentives you’re willing to offer to make this transition easier?

Recognizing the need for change and adapting your plans is crucial for businesses to remain relevant and competitive.

Regularly re-evaluate the plans you made and assess whether those plans are still relevant and effective. As you re-examine your goals and adapt your strategies to change, your business will be more resilient and better equipped to meet and exceed your goals.

Set goals that match your new business strategy and easily track your progress.

About Lucidchart

Lucidchart, a cloud-based intelligent diagramming application, is a core component of Lucid Software's Visual Collaboration Suite. This intuitive, cloud-based solution empowers teams to collaborate in real-time to build flowcharts, mockups, UML diagrams, customer journey maps, and more. Lucidchart propels teams forward to build the future faster. Lucid is proud to serve top businesses around the world, including customers such as Google, GE, and NBC Universal, and 99% of the Fortune 500. Lucid partners with industry leaders, including Google, Atlassian, and Microsoft. Since its founding, Lucid has received numerous awards for its products, business, and workplace culture. For more information, visit lucidchart.com.

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Why You Should Regularly Reevaluate Your Business Operations

Reevaluate your business every 6 to 12 months. First take external factors into account, like trends and market conditions. Next, reevaluate your corporate strategies by assessing your existing business plan and aligning with these external factors. Evaluate processes in key departments like HR, IT, marketing, procurement, finance, and leadership.

Your business has likely gone through some major transitions in 2020. But even without a pandemic, companies regularly are impacted by change, whether it comes internally, as with growth, or externally through things like shifting market conditions. Whether or not change is expected, there is a beneficial way to approach new challenges.

The best way to ensure your business is secure during seasons of change is to regularly reevaluate your business operations. This can help you face and adapt strategically to both internal and external factors that impact your firm, allowing you more flexibility while keeping the best interests of all stakeholders in mind.

Taking Stock of External Factors

Start by assessing external factors that affect your business. Pandemic lockdown measures and regulations are the most obvious example. To cope with these, your firm had to make changes that ensured both safety and compliance with government mandates.

It’s also important to evaluate which of these measures should be made permanent. Most companies temporarily allowed staff to work remotely during the pandemic. However, many of the Fortune 500 companies, such as Facebook and Microsoft, are shifting employees to permanent remote work as it improves productivity and reduces turnover.

There are several other strategic drivers impacted by a post-pandemic business climate. Today, businesses are creating platforms that allow people to offer value, rather than simply providing a product in demand. Consider that Airbnb offers a way for everyday people to rent out their homes for travellers instead of owning a chain of properties for rent. This “shift” in business valuation can affect the success of your company as well.

Another important external factor to consider is the current market condition, which can be impacted by several conditions. These include changes in political leadership, trade policies, economic factors, legislation and government ordinances, and even social or cultural shifts. This impacts your business sustainability .

In the past, business sustainability only referred to long-term growth as a profit but today, it’s important to ensure that your business makes a positive impact on local and global communities, as well as on the environment. One example of this is environmental, social, and governance business criteria, also known as ESG.

Market Business News defines ESG as “a subset of non-financial performance indicators which include ethical, sustainable and corporate governance issues such as making sure there are systems in place to ensure accountability and managing the corporation’s carbon footprint.” A recent study from McKinsey shows that the better your ESG ratings, the better your debt-to-equity ratio as well as public brand reputation. Today, investors consider ESG an important driver and your company should integrate these strategies into your brand.

Reevaluating Your Business Strategy

Once you have a firm grip on the market and other external factors, you should begin to look internally to reevaluate your current business strategy including goals, growth, and sustainability. How do you begin? Start by breaking down the areas you need to evaluate.

Review Your Current Business Plan

Even if you think your business plan currently addresses all these changes, you might want to revisit it to ensure that everything is in line to achieve sustainable growth. Have you evaluated the impact of ESG on marketing? Are you resuming in-person workplace standards or keeping staff on permanent remote? Are there areas of weakness that you can improve upon, or newly discovered business strengths that can move your company forward?

It’s important to not only understand the concepts impacting today’s markets but to create a plan to achieve them. Many corporate leaders know that sustainability is important in business but only a little more than half have created a plan addressing the issue and only a quarter understand that it can impact competitiveness. Don’t let your company get left behind in this area.

The next critical step is reevaluating your essential business processes to ensure that your company is functioning optimally. To do that, you must map out key areas to investigate and the staff members involved.

Evaluating Key Processes and Departments in Your Business

There are several areas that you can review in your company to make sure your company’s workflow and business reevaluation plans are on target. Naturally, this means working with the appropriate departments to ensure a smooth transition for permanent changes in practices, retooling your business plan, and any other pivots or transitions you are undertaking. Here are the key departments to review.

Human Resources

It’s critical to work with the people who manage your staff to keep employees apprised of updates, changes in policy, business goals, and more. If you are integrating ESG for the first time, making remote work options permanent, changing social media policies, or implementing any other adaptations that directly impact the employee training and day-to-day requirements of your team, your HR team must be engaged in managing these communications.

To that end, you should review and update your existing employee handbooks and templates . Employees must be aware of and understand changing workplace policies so it’s wise to send out communications highlighting changes and new requirements. Once you have updated and sent out your employee handbook, request your staff to acknowledge and initial that they have received and read the new guidelines.

Information Technology Department

Your IT staff is an important department when changing your business plan. As your company grows, so will your needs for data storage, bandwidth, and cybersecurity as well as hardware and software. This is even more critical if you have remote team members and employ cloud services for your data.

Make sure that your technology is up to date, particularly security services like antivirus software. Discuss potential safety breaches with your IT team to create standards and rules that govern your employees’ use of tech to prevent mishaps. For example, storing corporate, and even personal, credit card data online can put your business at risk. Providing employees with a simple list of technology dos and don’ts can protect your company’s security.

Marketing and Communications Operations

Revamping your business plan may help put you at ease, but periods of change and transition may be difficult for your investors, your customers, or your team. This is a crucial period for working with your marketing and communications department to ensure that everyone is on the same page and that these changes are nothing to fear.

If the thought of communicating major business policies makes you uneasy, remember that you have already weathered the challenges of a global pandemic. The lessons you learned from communicating during the crisis will be invaluable now. Remember to remain calm and clear, and be consistent with your messaging.

The most important rule of corporate communications is to treat all your stakeholders equally. That goes beyond employees and customers to external audiences, potential partners, and possibly even the government. Keeping solid, professional, decisive communications top of mind will elevate your company’s brand by building professionalism and trust. You can also check out the email deliverability conference .

Procurement

Your procurement department likely had many challenges in 2020 that perhaps led to unexpected challenges or expenses. Reevaluating your procurement process can help your business function more optimally, saving you time and money. It can also help promote a better quality customer experience.

Lay out your current procurement procedures and examine if there are weaknesses. If your supply chain was a problem during the pandemic, now is a good time to address what went wrong and take steps to prevent future problems. You may want to reevaluate your current vendors as well, with the understanding that some things may have been beyond their ability to fix.

As mentioned, ESG and societal or cultural values are just as important to today’s business models as traditional finances like investment and expenditures. That said, finance and accounting departments often face challenges that may prevent your company from being cost-effective. This is especially true if you implemented temporary measures during the pandemic that have now gone away – or became permanent.

Take the time to review balance reports, collections, and out-of-the-ordinary transactions in your finance department. You may need to revisit and readjust priorities if high-ticket expenses are now part of your budget, such as the costly post-COVID cleaning requirements. These items may require you to juggle your future cash flow requirements.

As your firm grows and as the marketplace changes, you may need to add more staff to properly manage and guide your company through these changes. While legality and compliance are critical, it’s important to hire leaders that are experienced in successful corporate transitions. Ensure that any new executives are a good fit for your corporate culture as well as being bold and honest about changes you are making.

How Often You Should Reevaluate Your Company

There is no hard and fast rule on how often you should reevaluate your business operations, but a timeframe of every six to twelve months is a good rule of thumb. Of course, reevaluations are necessary after a major change as well. For example, revisit post-pandemic measures to see which will remain in place permanently and which will be phased out.

That said, the impetus for a reevaluation might be as simple as a gut check that things are not going as well as you’d like. Business sustainability and improvement require reevaluation. Taking a good, hard look at how things might flow better can build your company into a brand that is reputable, trustworthy, and has a positive impact on the world.  

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Understanding The Distinction Between a Business Plan & Business Planning

In the dynamic world of entrepreneurship, our choice of words matters. Our vocabulary can often become a veritable alphabet soup of jargon, acronyms, and those buzzwords (I'm looking at you, "disrupt").

And let's not get started on business cliches – "circle back," "synergy," “deep-dive,” etc.

Yet sometimes, it's worth pausing to consider the words we casually sprinkle around in our business conversations. In a previous article, we explored the differences between strategic and tactical business planning , two related but distinct approaches to guiding a business. Now, we're going to delve into another pair of terms that often get used interchangeably but have unique implications: "business plan" (the noun) and "business planning" (the verb).

The business plan, a noun, is a tactical document. It's typically created for a specific purpose, such as securing a Small Business Administration (SBA) loan . Think of it as a road map – it outlines the route and the destination (in this case, the coveted bank loan). But once you've reached your tactical goal (in this case, getting the loan), it often gets shoved in the glove compartment, forgotten as part of the organization's action plan until the next road trip (i.e., additional funding ).

Business planning is not a static concept, but rather a dynamic verb. It's an ongoing process that necessitates continual adjustments. It's about creating a holistic, interconnected value-creating strategic plan that benefits all stakeholders. This includes attracting top-tier employees, ensuring a return on lending or investment, and making a positive impact on the community, whether online or in real life.

That being said, the customer remains at the heart of this process. Without customers, there are no sales, no revenue, and no value. Everything else is contingent on this key element.

If we were to compare the business plan to a map, then business planning would be the journey. It's a continuous process of making strategic decisions, adapting to new paths, and steering the business towards its goals. Sometimes, it even involves redefining objectives midway.

So, let's do a "deep-dive" (I couldn't resist) into these two terms, examining their application in the real world. Along the way, we'll uncover some tools that can aid us in the ever-evolving process of strategic business planning and the more finite task of crafting a winning business plan.

The Business Plan is a Document

Alright, let's take a closer look at a phrase we've all tossed around: the business plan. Imagine it as the detailed blueprint of your organization's goals, strategies, and tactics. It's like the North Star for your entrepreneurial ship, shedding light on the key questions: what, why, how, and when (speaking of questions, here are some FAQs about the business plan ).

Writing a solid business plan isn't easy , especially if you're just dipping your toes into the world of business planning. But don’t worry; we'll get to that (eventually).

So, let's break it down. What does a business plan document consist of, exactly?

• Executive Summary: Just as it sounds, this is a quick overview of the nitty-gritty that's in the rest of your business plan. It's the introduction to your organization, highlighting your mission statement and serving up the essential details like ownership, location, and structure.
• Company Overview: This is where you will detail your products and/or services, their pricing, and the operational plan. If you're opening a restaurant, this section is where you present your menu, and it's also where you talk about your ingredient sourcing, the type of service you'll provide, and the ambiance you're aiming for. 
• Market Analysis Summary: This section demands a comprehensive analysis of your industry, target market, competitors, and your unique selling proposition. Without access to top-notch (and often not free) research tools, it can be challenging to find current industry data. Check out our  guide on the best market research tools to get started.
• Strategy and Implementation Summary: Here, you'll lay out your short-term and long-term objectives along with the strategies you'll implement to attract and retain customers. This is where you’ll talk about all the different marketing and sales strategies you'll use to charm your future customers.
• Management Summary: This is your chance to spotlight your company's key personnel. Detail the profiles of your key leaders, their roles, and why they're perfect for it. Don't shy away from acknowledging talent gaps that need to be filled, and do share how you plan to fill them!
• Pro Forma Financials: This is where you get down to the dollars and cents with a detailed five-year revenue forecast along with crucial financial statements like the balance sheet and the profit & loss statement.

A business plan is an essential instrument, not just for securing funding, but also for communicating long-term goals and objectives to key stakeholders. But, while a business plan is essential for many circumstances, it's important to understand its scope and limitations. It's a tactical tool, an important one, but it's not the be-all and end-all of business strategy. Which brings us to our next point of discussion: business planning.

Business Planning is a Process

If we view the business plan as a blueprint, then business planning is the architect. But let's be clear: we're not building just any old house here. We're building the  Winchester Mystery House of business. Just as the infamous Winchester House was  constantly under construction , with new rooms being added and old ones revamped, so too is your business in a state of perpetual evolution. It's a dynamic, ongoing process, not a one-and-done event.

In the realm of business planning, we're always adding 'rooms' and 'corridors' – new products, services, and market strategies – to our 'house'. And just as  Sarah Winchester reputedly consulted spirits in her Séance Room to guide her construction decisions, we consult our customers, market data, and strategic insights to guide our strategy. We're in a constant state of assessing, evolving, executing, and improving.

Business planning touches all corners of your venture. It includes areas such as product development, market research, and strategic management. It's not about predicting the future with absolute certainty – we’re planners, not fortune tellers. It's about setting a course and making calculated decisions, preparing to pivot when circumstances demand it (think global pandemics).

Business planning is not a 'set it and forget it' endeavor. It's akin to being your company's personal fitness coach, nudging it to continually strive for better. Much like physical fitness, if you stop the maintenance, you risk losing your hard-earned progress.

Business Planning Case Study: Solo Stove

Now that summer is here, my Solo Stove stands as a tangible testament to effective business planning.

For those unfamiliar, Solo Stove started with a simple yet innovative product – a smoke-limiting outdoor fire pit that garnered over $1.1 million on Kickstarter in 2016, far exceeding its original objective. Since then, it has expanded its portfolio with products tailored to outdoor enthusiasts. From flame screens and fire tools to color-changing flame additives, each product is designed to fit seamlessly into modern outdoor spaces, exuding a rugged elegance that resonates with their target audience.

This strategic product development, a cornerstone of business planning, has allowed Solo Stove to evolve from a product to a lifestyle brand. By continually listening to their customers, probing their desires and needs, and innovating to meet those needs, they've built a brand that extends beyond the products they sell.

Their strategy also includes a primary "Direct To Consumer" (DTC) revenue model, executed via their e-commerce website. This model, while challenging due to increased customer acquisition costs, offers significant benefits, including higher margins since revenue isn’t split with a retailer or distributor, and direct interaction with the customer.

Through its primary business model,  Solo Stove has amassed an email database of over 3.4 million customers . This competitive advantage allows for ongoing evaluation of customer needs, driving product innovation and improvement, and enabling effective marketing that strengthens their mission. The success of this approach is evident in the company's growth: from 2018 to 2020,  Solo Stove’s revenue grew from $16 million to $130 million , a 185% CAGR.

While  85% of their revenue comes from online DTC channels, Solo Stove has also enhanced their strategic objectives by partnering with select retailers that align with their reputation, demographic, and commitment to showcasing Solo Brands’ product portfolio and providing superior customer service.

Solo Stove's success underscores how comprehensive business planning fosters regular assessment, constant evolution, and continual improvement. It's more than setting goals – it's about ceaselessly uncovering ways to deliver value to your customers and grow your business.

However, even successful businesses like Solo Stove can explore additional strategic initiatives for growth and diversification, aligning with their strategic direction and operational planning. For instance, a subscription model could provide regular deliveries of products or a service warranty, creating a consistent revenue stream and increasing customer loyalty. Alternatively, a B2B model could involve partnerships with adventure tourism operators, who could purchase Solo Stove products in bulk.

These complementary business models, when integrated into the operational plan, could support the primary DTC model by driving customer acquisition, providing ongoing revenue streams and expanding the customer base. This strategic direction ensures that Solo Stove continues to thrive in a competitive market.

The Interplay between the Business Plan (Noun) and Business Planning (Verb)

In the realm of business strategy, there's an intriguing chicken-and-egg conundrum: which comes first, the business plan or business planning? The answer is both straightforward and complex: they're two sides of the same coin, each indispensable in its own right and yet inextricably linked.

The process of business planning informs and modifies the business plan, just as the business plan provides a strategic foundation for the planning process. This interplay embodies the concept of Model-Based Planning™, where the business model serves as a guide, yet remains flexible to the insights and adaptations borne out of proactive business planning.

Let's revisit the Solo Stove story to elucidate this concept. Their business model, primarily direct-to-consumer, laid the groundwork for their strategy. Yet, it was through continuous business planning  –  the assessment of customer feedback, market trends, and sales performance –  that they were able to refine their model, expand their product portfolio, and enhance their growth objectives. Their business plan wasn't a static document but a living entity, evolving through the insights gleaned from ongoing business planning.

So, how can you harness the power of both the tactical business plan and strategic business planning in your organization? Here are a few guiding principles:

• Embrace Model-Based Planning™: Start with a robust business model that outlines your strategic plan. But remember, this isn't set in stone—it's a guiding framework that will evolve over time as you gain insights from your strategic planning process.
• Make business planning a routine: Regularly review and update your business plan based on your findings from market research, customer feedback, and internal assessments. Use it as a living document that grows and adapts with your business.
• Foster open communication: Keep all stakeholders informed about updates to your business plan and the insights that informed these changes. This promotes alignment and ensures everyone is working towards the same goals.
• Be agile and adaptable: A key part of business planning is being ready to pivot when necessary . Whether it's a global pandemic or a shift in consumer preferences, your ability to respond swiftly and strategically to changing circumstances is crucial for long-term success.

Fanning the Flames: From Planning to Plan

The sparks truly ignite when you understand the symbiotic relationship between tactical business plans, strategic business planning, and the achievement of strategic goals. Crafting a tactical business plan (the noun) requires initial planning (the verb), but then you need to embark on continuous strategic planning (the verb) to review, refine, and realign your strategic business plan (the noun). It's a rhythm of planning, execution, review, and adjustment, all guided by key performance indicators.

Business planning, therefore, isn't a one-off event, but rather an active, ongoing process. A business plan needs constant nurturing and adjustment to stay relevant and guide your organization's path to success. This understanding frames your business plan not as a static document, but as a living, breathing entity, evolving with each step your business takes and each shift in the business landscape. It's a strategic roadmap, continually updated to reflect your organization's objectives and the ever-changing business environment.

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Maximizing Profits: Conducting a Business Budget Evaluation

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At the end of the day, the goal of any business is to make a profit. It’s the north star of all decision-making with which a business is based. But like many lost and weary travelers, finding the promised land on horseback is easier said than done. 

So what does conducting a business budget evaluation have to do with maximizing profits? Read on to learn everything you need to know about reviewing and analyzing your company’s financial plan. 

What Is a Business Budget Evaluation?

A business budget evaluation is an organized method in which a company carefully examines its financial blueprint to assess how well it’s working, and if it fits the company’s needs. Through this evaluation, the company can make sure that its financial actions are in line with its overall objectives. 

This budget process also helps in predicting potential financial gaps or surpluses — offering valuable information that aids in making strategic choices for the business.

Why Should a Business Evaluate Its Budget?

Evaluating a budget is not merely a routine financial exercise; it plays a crucial role in the growth and sustainability of a business. Here are three key reasons why a business should evaluate its budget:

1. Assess Business Financial Health

Assessing the financial health of a business involves a thorough examination of its budget. This analysis delves into the company’s overall financial status by scrutinizing income sources and expenditures, and juxtaposing projected and actual numbers. This comprehensive perspective empowers executives to gauge the effectiveness of their financial approaches. 

Through budget analysis, they can pinpoint advantages, drawbacks, and areas with potential for enhancement. This establishes a robust base for both financial stability and expansion.

2. Determine Where to Allocate Resources

By conducting an assessment of the business budget, the company can identify sectors where increased investment or resources are required — as well as those that might be receiving excessive funds. Thoroughly analyzing financial data empowers managers to make well-informed choices regarding resource distribution. 

This focused allotment guarantees that critical areas obtain the necessary backing, thereby promoting effective fund utilization and alignment with the business’s strategic objectives.

3. Identify Potential Cost-Saving Opportunities

A detailed review of a business budget can reveal opportunities to reduce costs without sacrificing quality or performance. By analyzing spending patterns, comparing suppliers, and evaluating the return on investment of various initiatives, a company can identify areas where costs can be reduced. 

This promotes financial efficiency, frees up funds for other important activities, and can directly improve the bottom line. 

How to Conduct a Business Budget Evaluation?

Before initiating a business budget assessment, it’s essential to establish a meticulously crafted plan. These six steps ensure a comprehensive review of your company’s financial health — positioning yourself to make educated decisions about upcoming financial strategies.

1. Review the Budget for the Current Period 

Start by collecting all essential financial documents, such as income statements, balance sheets, and cash flow statements. These materials offer a snapshot of the company’s financial performance, forming the baseline for the evaluation. This includes reviewing projected revenues and expenditures for the period and any discrepancies between budgeted and actual amounts.

2. Compare Actual Financial Results to the Budget

Next, analyze the differences between the budgeted figures and the actual numbers for revenue, expenses, and overall profitability. Identifying these variances allows you to understand where and why the financial performance might have deviated from the original plan — helping to uncover insights for future budgeting.

3. Analyze the Reasons Behind Any Significant Variances 

Thereafter, investigate the underlying causes that may have led to any significant discrepancies, such as unexpected shifts in market conditions or surges in operating costs. Look for patterns or trends that might have contributed to these variances. 

Additionally, determine whether these differences have positively or negatively influenced key metrics such as profitability and cash flow, allowing for a more nuanced understanding of your financial position.

4. Adjust Your Budget as Needed

Once you’ve analyzed any variance, evaluate whether modifications are required to the existing budget based on the insights gained from the analysis. This could entail updating revenue forecasts, fine-tuning expense distributions, or reallocating resources to different areas.

5. Develop a Plan to Address Any Financial Challenges or Opportunities 

Based on the findings from the evaluation, devise a plan to tackle any financial obstacles or capitalize on opportunities that may have arisen. This could include implementing measures to reduce costs, investigating new sources of revenue, or pursuing additional financing options. 

6. Monitor and Track Progress Towards Budget Goals

Finally, it’s vital to closely watch the financial performance of your business to confirm that it remains aligned with budget goals. Regularly reviewing financial reports to promptly adjust the budget keeps the company on track and responsive to changing financial conditions. This constant vigilance helps maintain financial control and promotes sustained progress toward desired financial goals.

Tips for a Successful Business Budget Evaluation

Executing a business budget evaluation is a comprehensive task that requires attention, precision, and foresight. The steps outlined above provide a robust framework, but the success of the evaluation often lies in the details. To make the most of this process and foster a successful evaluation, here are some additional tips that can be employed:

1. Collaborate with Your Team

Collaborating with your team can guarantee a successful business budget evaluation by pooling diverse insights and expertise. Much like the old saying “two heads are better than one,” involving team members ensures a multifaceted analysis. Different perspectives can unearth hidden challenges and opportunities, leading to a balanced and comprehensive budgeting process.

2. Be Adaptable and Flexible

Financial landscapes can change rapidly, and sticking to a rigid plan can hinder efficiency. But by being open to adjustments and embracing unexpected shifts, you can proactively address evolving challenges and opportunities. This adaptability ensures that the evaluation remains relevant and effective, aligning with both current realities and future potential.

3. Leverage Software Tools

Leveraging software tools can play a significant role in a successful business budget evaluation. Modern financial software can automate data collection, offer real-time insights, and provide advanced analytical capabilities. These tools can also streamline the evaluation process, minimize human error, and enable refined metrics.

Taking Control of Your Finances for Optimal Returns

Taking control of your business finances is no easy task. It requires careful auditing, attention to detail, and precise legal compliance. That’s a lot of pressure for one person or small team to handle when a business is growing. 

At doola, we make handling your bookkeeping duties a breeze. With cutting-edge software that simplifies your financial management, doola offers that extra hand when your inbox is through the roof. Get started in under 10 minutes today!

How often should business budget evaluation be conducted?  

Business budget evaluations should be conducted regularly, such as quarterly or annually, depending on the size and nature of the business. 

How can business budget evaluation help improve decision-making?  

Business budget evaluation provides insights into financial performance, uncovering areas for improvement or investment. These insights guide leaders in making informed, strategic decisions that align with the company’s objectives and financial health.

What are some common challenges in business budget evaluation?  

Common challenges in business budget evaluation may include inaccurate data, lack of collaboration among team members, insufficient understanding of market fluctuations, and difficulty in adapting to unforeseen changes in the business environment.

What are some key metrics to consider during a business budget evaluation?  

Key metrics to consider during a business budget evaluation may include revenue, expenses, profit margins, cash flow, debt ratios, and return on investment. 

How can businesses ensure the accuracy of their budget evaluation?  

Businesses can ensure the accuracy of their budget evaluation by using reliable data sources, leveraging specialized financial software, engaging in regular monitoring, and working with financial experts.

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Planning Skills: Performance Review Examples (Rating 1 – 5)

By Status.net Editorial Team on July 22, 2023 — 5 minutes to read

Planning is the ability to develop and execute effective strategies and plans to achieve specific goals and objectives. This skill requires the ability to anticipate future trends and changes in the business environment and adjust plans accordingly. Effective planning involves collaboration with team members and other departments to ensure that everyone is working towards shared goals. Good planners are proactive in identifying areas for improvement and implementing solutions to increase efficiency and effectiveness. They are also able to prioritize tasks and manage time effectively to ensure that projects are completed on time and within budget.

Questions to determine an employee’s performance rating for planning skills:

1. What were the employee’s goals and objectives for the performance period? 2. Did the employee meet, exceed, or fall short of these goals and objectives? 3. What specific tasks or projects did the employee work on during the performance period? 4. Did the employee complete these tasks or projects on time and within budget? 5. Did the employee demonstrate initiative and take on additional responsibilities beyond their job description? 6. Did the employee collaborate effectively with team members and other departments? 7. Did the employee receive positive feedback from colleagues, customers, or supervisors? 8. Did the employee demonstrate a willingness to learn and improve their skills?

Once you have answered these questions, you can use the following guidelines to determine the appropriate rating:

• 5 – Outstanding: The employee consistently exceeded expectations and demonstrated exceptional performance in all areas of their job.
• 4 – Exceeds Expectations: The employee consistently met or exceeded expectations and demonstrated strong performance in most areas of their job.
• 3 – Meets Expectations: The employee met expectations and demonstrated satisfactory performance in all areas of their job.
• 2 – Needs Improvement: The employee fell short of expectations and demonstrated unsatisfactory performance in some areas of their job.
• 1 – Unacceptable: The employee consistently fell short of expectations and demonstrated unacceptable performance in most areas of their job.

Related: Best Performance Review Examples for 48 Key Skills

2000+ Performance Review Phrases: The Complete List (Performance Feedback Examples)

Planning Skills Performance Review Phrases and Paragraphs Examples

5 – outstanding, example phrases.

– Consistently exceeds expectations in planning and executing tasks – Demonstrates exceptional foresight and ability to anticipate potential obstacles – Develops comprehensive plans that consider all possible scenarios and outcomes – Initiates and leads successful projects that are completed on time and within budget – Proactively identifies opportunities for improvement and implements effective solutions

Example Paragraph

“[Employee Name] consistently demonstrates outstanding planning skills. Their ability to anticipate potential obstacles and develop comprehensive plans that consider all possible scenarios and outcomes is exceptional. They have initiated and successfully led multiple projects that were completed on time and within budget. [Employee Name] is proactive in identifying opportunities for improvement and implementing effective solutions, which has resulted in significant improvements in the efficiency and effectiveness of their team.”

4 – Exceeds Expectations

– Consistently develops and executes effective plans – Demonstrates strong ability to anticipate potential obstacles and develop contingency plans – Takes initiative to identify areas for improvement and implement solutions – Successfully leads projects to completion on time and within budget – Collaborates effectively with team members to achieve shared goals

“[Employee Name] consistently exceeds expectations in their planning skills. They develop and execute effective plans that demonstrate a strong ability to anticipate potential obstacles and develop contingency plans. They take initiative to identify areas for improvement and implement solutions, which has resulted in significant improvements in their team’s performance. They have successfully led multiple projects to completion on time and within budget, while collaborating effectively with team members to achieve shared goals.”

3 – Meets Expectations

– Develops and executes plans that meet project requirements – Identifies potential obstacles and develops contingency plans – Collaborates effectively with team members to achieve shared goals – Completes projects on time and within budget – Demonstrates a willingness to learn and improve planning skills

“[Employee Name] consistently meets expectations in their planning skills. They develop and execute plans that meet project requirements and demonstrate an ability to identify potential obstacles and develop contingency plans. They collaborate effectively with team members to achieve shared goals and have completed multiple projects on time and within budget. They demonstrate a willingness to learn and improve their planning skills, which is an important quality for continued growth and development.”

2 – Needs Improvement

– Struggles to develop and execute effective plans – Fails to anticipate potential obstacles and develop contingency plans – Requires significant guidance and support to complete projects on time and within budget – Demonstrates a lack of initiative in identifying areas for improvement and implementing solutions – Has difficulty collaborating effectively with team members to achieve shared goals

“[Employee Name] needs improvement in their planning skills. They struggle to develop and execute effective plans and fail to anticipate potential obstacles and develop contingency plans. They require significant guidance and support to complete projects on time and within budget. They also demonstrate a lack of initiative in identifying areas for improvement and implementing solutions. Additionally, they have difficulty collaborating effectively with team members to achieve shared goals, which is a critical aspect of successful planning.”

1 – Unacceptable

– Consistently fails to develop and execute effective plans – Does not anticipate potential obstacles or develop contingency plans – Requires constant supervision and support to complete projects on time and within budget – Demonstrates no initiative in identifying areas for improvement or implementing solutions – Does not collaborate effectively with team members to achieve shared goals

“[Employee Name] is unacceptable in their planning skills. They consistently fail to develop and execute effective plans and do not anticipate potential obstacles or develop contingency plans. They require constant supervision and support to complete projects on time and within budget. They demonstrate no initiative in identifying areas for improvement or implementing solutions. Additionally, they do not collaborate effectively with team members to achieve shared goals, which is a critical aspect of successful planning. Immediate action is required to address these deficiencies and improve their performance. Regular check-ins and feedback sessions should be scheduled to monitor progress and provide ongoing support and guidance. If there is no improvement in their planning skills, further disciplinary action may need to be taken. ”

• 100 Performance Review Phrases for Job Knowledge, Judgment, Listening Skills
• Supervision Skills: Performance Review Examples (Rating 1 - 5)
• Problem Solving Skills: Performance Review Examples (Rating 1 - 5)
• Job Knowledge Performance Review Phrases (Examples)
• Mentoring Skills: Performance Review Examples (Rating 1 - 5)
• Cooperation Skills: Performance Review Examples (Rating 1 - 5)

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16.4 Ongoing Marketing Planning and Evaluation

Learning objectives.

• Apply marketing planning processes to ongoing business settings.
• Identify the role of the marketing audit.

Our discussion so far might lead you to believe that a marketing plan is created only when a new offering is being launched. In reality, marketing plans are created frequently—sometimes on an annual basis, or when a new CMO is hired, when market dynamics change drastically and quickly, or just whenever a company’s CEO wants one. Moreover, as we indicated, a marketing plan should be something of a “living” document; it should contain triggers that result in a company reevaluating its strategies should different scenarios occur.

Some of those scenarios can occur immediately. For example, when a product is launched, the market reacts. Journalists begin to cover the phenomenon, competitors respond, and regulators may take note. What then should happen if the sales goals for the product are substantially exceeded? Should its price be raised or lowered? Should follow-on offerings be launched sooner? What if a competitor launches a similar offering a week later? Or worse yet, what if the competition launches a much better offering? The key to a successful ongoing marketing strategy is twofold: understanding causality and good execution of the marketing plan. Next we discuss each of these aspects.

Katie Scallan-Sarantakes

http://app.wistia.com/embed/medias/b1db0efe17

Katie Scallan-Sarantakes knows firsthand the difficulty of tracking the success of marketing activity. She describes some of those challenges here.

Causality is the relationship between two variables whereby one variable is a direct consequence of the other. For a scientist in a lab, identifying causality is fairly easy because the causal variable can be controlled and the consequences observed. For marketers, such control is a dream, not a reality. Identifying causality, then, can be a real challenge.

Why is causality so important? Assume you’ve observed a drop in sales that you think is caused by a competitor’s lower price. If you reduce your price to combat the competitor’s when, in reality, the poor sales are due simply to seasonal factors, lower prices might give consumers the impression that your product is cheap or low quality. This could send your sales even further downward. Drawing the wrong conclusions about causality can lead to disastrous results.

Control is an important related concept. Control , in this context, means not the degree to which you can manipulate an outcome but rather the degree to which you can separate the effects of a variable on a consequence. For example, you have complete control over what the customer pays for the offering. You are able to manipulate that outcome. However, you have no control over seasonal effects. Nonetheless, you can identify what those effects are and account for their influence.

The first type of control is managerial control , whereby you have control over how variables in a marketing plan are implemented. You decide, for example, how many stores will carry your product. You can vary that number and have an effect on sales. The second type of control is statistical control , whereby you can remove the influence of the variable on the outcome mathematically. For example, you have no control over seasonality. If you are selling a product for babies and more babies are born in August than any other month, then your sales will go up in September. Statistical control allows you to smooth out the seasonal variance on sales so you can then determine how much of the change in sales is due to other factors, especially those you have control over. Statistical control is something you learned in a regression class. However, the numbers in a statistical analysis can be as easily approximated. You don’t necessarily need to utilize complicated equations. Consider the following scenario:

• Over the past five years, you have observed an average decline of 20 percent in sales for the months of June, July, and August, which also happen to be months in which many salespeople and buyers vacation.
• This year, the decline was 28 percent.
• You can therefore safely assume that about 20 percent of the decline this year was due to people taking vacations, as they have in years past; you can further assume that the amount of the decline due to factors other than vacations was about 8 percent.

Doing a simple analysis such as this at least gives you some idea that something new is going on that is lowering your sales. You can then explore the problem more completely.

So how do you figure out exactly what is the cause of such a decline? In some instances, marketing executives speculate about the potential causes of problems and then research them. For example, if the product’s price is perceived to be the problem, conversing with a number of former customers who switched to competing products could either verify this hunch or dispel it. In a B2B environment, salespeople who are aware of a competitor’s new lower prices might be the first to identify the problem, rather than marketing executives. Nonetheless, the firm’s marketing executives can then try to verify that lower prices led to the sales decline. In consumer-goods markets, there are often many segments of consumers. Rather than asking a few of them what they think, formal market research tools such as surveys and focus groups are used.

The Marketing Audit

Another investigative tool that can be used to research a drop in a company’s sales performance is a marketing audit. A marketing audit is an examination or snapshot of the state of a company’s marketing strategies as they are actually implemented. Here, managerial control becomes important. Was the strategy implemented as intended? Is the strategy working?

For example, when Xerox launched a new workstation, the company ran a promotion giving a customer who bought a workstation a discount on a copier. Despite the promotion, the overall sales of the workstation failed to meet Xerox’s expectations. There were, however, geographical areas in which the sales of the product were quite good. What was up?

Upon closer examination, Xerox’s managers learned that the firm’s salespeople in these areas had actually developed a much more effective selling strategy: they sold the copiers first and then offered the workstation for free by applying the amount of the discount to the workstation, not the copier. Xerox’s marketing quickly revamped the promotion and communicated it effectively to the rest of the sales staff.

Fidelity is the degree to which the plan is being implemented as it is supposed to be. In the example of the Xerox workstation, there was substantial fidelity—the plan was being implemented right—but the plan was poor. Usually, though, the problem is that the plan is not executed properly.

More serious issues require more in-depth study. When Mark Hurd took over as Hewlett-Packard’s CEO in 2005, he ordered an immediate audit of HP’s sales and marketing activities. Metrics such as the win/loss ratios of business deals, the length of time it took to get a proposal approved and presented to a customer, and other factors exposed numerous problems Hurd needed to fix. The audit identified the causes, many of which Hurd and his team were able to deal with quickly. As a result, HP increased market share and captured the lead in the PC market in the first year following Hurd’s appointment.

According to the marketing consulting company Copernicus, a marketing audit should assess many factors, but especially those listed below. Does any of the information surprise you?

Top Ten Factors a Marketing Audit Should Assess

• Key factors that impacted the business for good or for bad during the past year.
• Customer satisfaction scores and the number and type of customer complaints.
• The satisfaction levels of distributors, retailers, and other value chain members.
• The marketing knowledge, attitudes, and satisfaction of all executives involved in the marketing function.
• The extent to which the marketing program was marketed internally and “bought into” by top managers and nonmarketing executives.
• The offering: Did it meet the customer’s needs as expected, and was the offering’s competitive advantage defensible?
• The performance of the organization’s advertising, promotion, sales, marketing, and research programs with an emphasis on their return on the money invested in them.
• Whether the marketing plan achieved its stated financial and nonfinancial goals.
• Whether the individual elements of the marketing plan achieved their stated financial and nonfinancial goals.
• The current value of the brand and customer equity for each brand in the product portfolio 1 .

You were probably surprised by a few items on the list. For example, did your marketing plan include a plan to market the marketing program to important internal parties, such as the company’s managers and employees? We discussed earlier that the marketing plan should persuade others to invest in the plan’s success. Part of that persuasion process could actually include a plan to communicate the plan! A marketing audit should assess the extent to which the plan was successful in achieving the goal of getting important people and departments within an organization to buy into the plan.

Do you think the “top ten” list above is prioritized correctly? Some people would argue that the first four or five factors that need to be examined are the most important. Other people would argue that only the financial factors (factors 7–10) matter. Which group is right?

The answer really depends on what’s important at the time to a company. Because HP hired Hurd to improve the company’s poor financial performance, financial issues were likely his top priority. He knew, however, that the causes of the poor financial performance probably lay elsewhere, so he had his team look deeper. Financial problems are usually the first to prompt a marketing audit.

Many firms don’t wait for problems before conducting an audit. Either they hire consultants like Copernicus Marketing Consulting to conduct the audit, or they do the audits themselves. If a firm’s budget doesn’t allow for a complete audit annually, the company will often focus on one particular area at a time, such as levels of satisfaction among its customers and channel partners. The following year it might audit the company’s communications strategy. Rotating the focus ensures that every aspect is audited regularly, if not annually.

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Marketing is a fun job, but it is more than that. Marketing professionals have to deliver business results with all of the work they do. As Katie Scallan-Sarantakes describes, you have to prove your ability to deliver value.

Key Takeaway

The key to a successful ongoing marketing strategy is twofold: understanding causality and good marketing plan execution. Drawing the wrong conclusions about causality, or what actually causes a change in a company’s sales performance, can lead to disastrous results. That’s why companies investigate the causes by gathering market feedback and conducting market research. Another tool that can be used to research a change in a company’s sales performance is a marketing audit. A marketing audit is an examination or a snapshot of the state of a company’s marketing strategies as they are actually implemented. Complete and partial audits can be done internally or by a consulting firm in order to find areas for improvement.

Review Questions

• What is the difference between managerial control and statistical control? How is statistical control used?
• What should a marketing audit accomplish?

1 “Marketing Audit: 10 Critical Components,” Copernicus Marketing Consulting, http://www.copernicusmarketing.com/our-thinking/blog/2011/07/20/10-critical-components-of-a-marketing-audit/ (accessed April 13, 2012).

Principles of Marketing Copyright © 2015 by University of Minnesota is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License , except where otherwise noted.

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Strategic Networking: How To Craft A Career Plan In 7 Steps

Crafting a strategic networking plan can bring clarity to your networking endeavors, making them more productive, successful, and fulfilling.

Networking in business can sometimes feel like navigating a labyrinth. You might find yourself at a loss about who to connect with, how to approach them, or how to build business relationships in a remote world. The process can feel draining and unproductive.

But there’s a key to success: like every other aspect of business, effective networking requires a clear, well-thought-out plan. That’s where a strategic networking plan comes in.

With this step-by-step guide, we’ll help you unlock the power of strategic networking.You’ll understand how to identify your networking goals, pinpoint the right people to connect with, and learn how to nurture these relationships effectively. Let’s start creating your networking roadmap!

What Is Strategic Networking?

Strategic networking is a deliberate and focused approach to building a network of contacts and relationships that can help individuals or organizations achieve their goals. Unlike casual networking, or last minute networking, strategic networking is purpose-driven and aims at creating value through the relationships formed. It involves identifying and connecting with people who can provide insights, knowledge, or opportunities that are aligned with one’s objectives.

Michael Bloomberg’s approach to networking is a great example of strategic networking. In the early stages of developing Bloomberg, he exemplified strategic networking by recognizing and seizing an opportunity to connect with key decision-makers at Merrill Lynch. By waking up early, grabbing some coffee, going up to important business professionals, and saying, “ Hi, I’m Mike Bloomberg , and I bought you a cup of coffee,” he bypassed the usual gatekeepers and created an environment conducive to open dialogue.

Bloomberg’s method fostered rapport with the very individuals who were instrumental in his business’ growth, while also gathering valuable feedback from his future customers. His proactive approach demonstrates how thoughtful gestures, coupled with timing and determination, can effectively create meaningful business relationships.

How To Craft A Strategic Networking Plan

The process of developing a strategic networking plan need not be overwhelming. With a clear path laid out, you can create a plan that enables you to cultivate meaningful and purposeful connections. Here’s our step-by-step guide to set you up for networking success!

1. Define Your Networking Goals

Everything starts with a goal in mind. What objectives are you aiming to accomplish through networking? The answer can span a wide range, from seeking a mentor who can guide your career progression, uncovering job opportunities, finding potential clients or customers, to spotting investment prospects. Your networking goals will provide the compass that guides your networking activities, so it’s crucial that you define these goals with precision and clarity.

Your goals should be SMART – Specific, Measurable, Achievable, Relevant, and Time-Bound. This helps bring focus and direction to your networking efforts, increases your chances of success, and makes it easier to track and evaluate your progress.

2. Identify Your Ideal Connections

Networking is not about amassing an indiscriminate list of contacts. It’s about forging relationships with people who align with your networking goals. Therefore, it’s important to be strategic and thoughtful about who you choose to connect with. These individuals could be industry leaders, colleagues, potential partners, influencers, or others who possess expertise in your area of interest. Make a list of such individuals and explore the possible ways they can assist you in achieving your networking goals.

This identification process may involve a fair amount of research. Explore professional platforms like LinkedIn, attend industry events, webinars, or conferences, and stay informed about the latest news and developments in your industry to identify potential connections.

3. Strategize Your Outreach

Once you’ve identified potential connections, the next step is to devise an effective outreach strategy. This involves determining the best way to initiate contact . Whether you opt to leverage social media, professional networking platforms, or traditional methods like email largely depends on the individual and the context. The golden rule here is to personalize your approach for each person, demonstrating that you value the potential relationship and are not merely seeking personal gain.

Ensure your outreach message is respectful and considerate, communicates your intent clearly, expresses genuine interest in their work or insights, and, if possible, offers something of value to them. This increases the likelihood of a positive response and lays the foundation for a mutually beneficial relationship.

4. Plan Your First Interaction

First impressions can significantly influence the trajectory of a professional relationship. When making initial contact with a potential connection, it’s crucial to ensure your message is clear, respectful, and provides mutual benefit. Express sincere interest in their work or insights, suggest how you could potentially collaborate or support each other’s objectives, and aim to create a conversation rather than a one-sided request.

It’s worth noting that effective networking doesn’t always entail asking for something right off the bat. Instead, it could involve sharing a relevant article or piece of information, commenting on their work, or even engaging in an ongoing discussion. The aim is to initiate a dialogue and establish a connection, rather than to gain immediate benefits.

5. Nurture The Connection

Building a robust network involves more than just making introductions. The strength of your network lies in the relationships you nurture over time. This can entail regular check-ins, sharing useful resources, providing support when needed, or collaborating on projects. Regular interaction helps to keep the relationship active and beneficial for both parties, building mutual trust and respect.

Remember, networking is a marathon, not a sprint. Building and maintaining meaningful professional relationships takes time and effort. The key is consistency and genuine interest in your connections.

6. Evaluate Your Networking Progress

Regular reflection and evaluation of your networking efforts can help ensure that you’re on the right track. This involves assessing whether you’re making progress towards achieving your networking goals, identifying connections that may need more nurturing, and recalibrating your approach if necessary.

Take note of the quality of the relationships you’ve formed, the value they have brought to your professional journey, and the opportunities that have arisen from these connections. This evaluation process will provide insights into what’s working, what isn’t, and how you can improve your networking strategy.

7. Be Ready To Reciprocate

Networking is not a one-way street. It’s about mutual benefit and reciprocity. Be prepared to assist your connections when they need your help. This could involve offering insights or advice, introducing them to another connection, or supporting their projects or initiatives. Remember, the more value you provide to others, the more value you’re likely to receive in return. This reciprocity fosters stronger, more meaningful connections that can greatly enhance your professional journey.

Why Is A Strategic Networking Plan Necessary?

A strategic networking plan functions as your personal roadmap to establishing and nurturing impactful connections. It enables you to approach networking with clear objectives in mind, rather than merely attending events and collecting business cards and LinkedIn connections without purpose. This structured, focused approach ensures your networking activities are centered around building relationships that align with and support your professional objectives, thereby optimizing your time and energy usage.

Without a strategic networking plan, you may find yourself stuck in a pattern of random, ineffective networking that yields little to no benefits. A plan helps you avoid common networking pitfalls like spreading yourself too thin, failing to follow up, or building connections that offer no synergy with your goals.

What Are The Benefits Of Networking More Strategically?

Engaging in strategic networking can have a plethora of benefits for both individuals and organizations. First and foremost, it opens doors to opportunities that may not have been accessible through conventional channels. By building relationships with the right people, you or your organization can gain invaluable insights, ideas, and resources.

Additionally, strategic networking establishes a foundation for strong business relationships. These relationships can be a source of support, advice, and collaboration, which are essential for growth and success. For instance, by networking strategically, a business owner can connect with potential clients, partners, or mentors who can provide unique perspectives or resources that are critical for the business. In essence, strategic networking serves as a catalyst for achieving goals through the power of relationships.

Tips for Ensuring Your Plan is Effective

Along with your strategic plan, effective networking involves using practical tactics to maximize the impact of your efforts. With your strategic networking plan in place, these additional tips will provide a further edge to your networking endeavors.

From creating a networking schedule to leveraging the help of an executive assistant, investing in professional development, and mastering your elevator pitch, these techniques are designed to augment the effectiveness of your plan and propel you towards your networking goals. Let’s dive in and explore how you can turn these tips into action.

1. Create A Networking Schedule

Creating a networking schedule can serve as a powerful tool in making your strategic networking plan more effective. Consistency is key in networking, and having a dedicated schedule ensures you regularly reach out to new contacts, follow up with existing ones, and participate in networking events. This consistency will help you to keep your connections strong, your network growing, and your opportunities expanding.

A well-structured networking schedule should include time for research, outreach, follow-ups, and attending events. It’s also crucial to block off time for reflection and evaluation to assess your progress, identify successful strategies, and adjust your plan as necessary. Using a digital calendar or planner can help you keep track of your activities and maintain your focus on networking goals.

2. Be Prepared With An Elevator Pitch

Having a well-crafted elevator pitch is another crucial tip for an effective networking plan. An elevator pitch is a short, clear, and compelling description of who you are, what you do, and what makes you unique. It’s your chance to grab someone’s attention, communicate your value, and leave a lasting impression.

Your elevator pitch should be concise, specific, and engaging. It needs to convey not only your professional background and skills but also your career aspirations and how you could potentially collaborate with the listener. Practicing your elevator pitch until it feels natural can make you more confident and prepared when unexpected networking opportunities arise.

3. Make Use Of An Executive Assistant

An executive assistant is a key partner to success in the business world, and they can play a vital role in making your networking plan more effective. They can manage your networking schedule, carry out research on potential contacts, send initial outreach emails, and follow up on your networking efforts. This not only saves you valuable time but also ensures that no important networking opportunity falls through the cracks.

A skilled executive assistant can provide another level of interaction with your network. They can act as an intermediary for communication, keeping your contacts engaged and informed. Their support can enable you to focus more on building relationships and less on the administrative aspects of networking.

If you’re interested in making significant networking gains, consider hiring a virtual executive assistant through Persona. Our executive assistants can help you plan, organize, and manage tasks related to networking efforts.

By partnering with Persona, you will have a partner to fully support your strategic networking plan, keeping you on track and making sure your plan is setting you up for success. To learn more about how our executive assistants can support your strategic networking efforts, contact us today .

4. Invest In Professional Development

Investing in professional development can greatly enhance the effectiveness of your networking plan. By continually improving your skills and knowledge, you become more valuable to your network. This not only expands the topics you can converse about but also the ways in which you can provide value to your connections.

Professional development can come in many forms: taking courses, attending workshops or conferences, or obtaining further certifications in your field. Not only will these activities bolster your professional reputation, but they will also provide additional networking opportunities with like-minded professionals who are also committed to growth.

5. Reflect On Your Interactions And Seek Feedback

Reflection is an important part of any professional growth process, and learning to network strategically is no exception. Taking the time to reflect on your networking interactions and the effectiveness of your strategies can help you identify areas for improvement. After a networking event or a meeting with a contact, ask yourself what went well and what could be improved.

Additionally, don’t hesitate to seek feedback from trusted colleagues or mentors. Their insights can offer valuable perspectives on how you present yourself and interact with others. Constructive feedback can help refine your networking skills and strategies.

How Can I Maintain My Network Over Time?

Preserving your network requires regular and consistent effort. This includes maintaining regular contact with your connections, sharing useful resources, offering help when needed, and expressing gratitude for their support. It’s important to recognize that networking is not a transactional process, but a relational one. It’s about building genuine, mutually beneficial relationships that can grow and evolve over time.

With the advent of technology and social media, maintaining contact and providing value to your connections has become easier. From sharing interesting articles on LinkedIn, participating in online discussions, to sending thoughtful messages, there are numerous ways to keep the relationship active and beneficial.

What Are Common Strategic Networking Mistakes?

Many business leaders forget to consider strategic networking as a two-way street. They often approach networking with a “what can I get out of this?” mentality, which can lead to one-sided relationships that don’t provide long-term value. Some common strategic networking mistakes to avoid include not reciprocating value, failing to follow up, and not being clear about their networking goals.

When you are more focused on taking rather than giving, you risk damaging your professional reputation and risk losing out on business relationships. Networking should be about mutual benefit, where both parties can provide value to each other. Failing to reciprocate can lead to missed opportunities and a weak network.

Another common mistake is failing to follow up after initial contact. Networking isn’t just about making connections, it’s about nurturing and maintaining those relationships over time. If you don’t follow up after an initial meeting or conversation, you risk losing that connection and the potential benefits it could bring.

Not being clear about your networking goals can lead to ineffective networking. Without a clear idea of what you hope to achieve from your networking efforts, you may end up connecting with people who can’t help you reach your goals. This can lead to wasted time and effort. Therefore, it’s important to define your networking goals and strategize your networking activities accordingly.

How Can I Evaluate the Effectiveness of My Networking Plan?

As with any plan, your strategic networking plan requires constant evaluation and review. Evaluating the effectiveness of your networking plan involves regular introspection and reflection. This includes reviewing your initial networking goals and assessing your progress towards achieving them. Reflect on the quality of your interactions, the relationships you’ve formed, and the opportunities that have arisen from these connections.

Consider using metrics to measure your progress. For instance, the number of new connections, meetings or interactions held, referrals received, or opportunities generated can serve as tangible indicators of your networking effectiveness. By routinely evaluating your plan, you can identify areas of improvement, adjust your strategies, and ensure your networking efforts remain productive and meaningful.

Soar To New Heights With Your Strategic Networking Plan

Navigating the complex world of professional relationships becomes significantly smoother when you arm yourself with a well-structured strategic networking plan. This guide has walked you through the intricate process of crafting your personalized roadmap to networking success. From establishing clear and measurable goals to identifying ideal connections, devising thoughtful outreach strategies, and reciprocating benefits, we’ve explored the critical steps that can transform your networking endeavors into powerful catalysts for your career advancement. To ensure success, make sure to schedule time for networking, prepare yourself so you’re ready for any interaction, and bring on an executive assistant to help if needed .

The road to networking excellence demands genuine effort, persistence, and some strategic planning. As you embark on this journey, remember to value the quality of your connections over their quantity. Prioritize building meaningful, mutually beneficial relationships. Be patient, remain consistent, and most importantly, always be prepared to learn and adapt. With this strategic plan in hand, you’re set to unlock a world of untapped opportunities, collaborations, and partnerships. Embrace this opportunity to shape your professional destiny!

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