In the recent economic slowdown it can sometimes feel like a crowbar is required to pry money from investors to help you grow your aspiring business. But during times when capital is tight, it’s time to get creative. Companies that focus on systematically meeting their short-term goals typically discover that they also achieve long-term business success, with or without the benefit of outside investment.
So how do you quickly mobilize your current resources, capital and team to realize your goals and targets? Prepare a plan of attack – more commonly referred to as a business plan. But cast aside any worries you have about preparing a thick tome with fancy verbiage and financial projections. The business plan to achieve your short-term objectives is not graded by weight or page length, but instead by the quality and clarity of the strategies you commit to paper.
In this case, we recommend you prepare a business plan that fits onto the back of a regular sized envelope.
You may have returned to the previous sentence for a moment and asked, “An envelope? How can I prepare a business plan on the back of an envelope?” It’s a great question and there’s a very simple answer: If your objective is to achieve an important internal goal, rather than impress an audience of bankers, investors or strategic partners, then an informal “envelope plan” can be a perfect solution. It enables you to quickly organize, document and communicate your business strategies to management and staff. And in some cases, a brief document is more effective than thirty-plus pages of brilliantly bound business plan literature – particularly when the priority is to rally your team around a common cause for an upcoming month or quarter.
A quick warning before we look at the steps to prepare an “envelope plan” for your business. If in fact, your goal is to secure financial backing from investors or lenders, then you will naturally need to develop a more robust business plan with well-supported financial statements. A more comprehensive plan, track record and qualified team are expected if you intend to gain the attention of serious financing sources for your business.
But assuming your plan is for short-term internal purposes, you can prepare an “envelope plan” in five easy steps:
Step 1: Clarify the Goal
Begin by preparing a very precise, quantifiable statement of no more than one or two sentences to clarify the goal your company will achieve. For example: “ABC Cleaning Company will increase revenue from repeat customers from 8% of total yearly sales to 20% of total yearly sales by the end of calendar year 2009.” Your goal should be clear, measurable and tied to a specific time period or deadline.
Step 2: Outline Your Strategies
The next step is to develop a bulleted list of the primary strategies you will implement to meet your stated business goal. In this case, “What can ABC do to increase repeat business?” Examples might include:
- Offer a 5% discount to repeat customers
- Improve the quality of product/service offerings
- Introduce additional training and quality standard programs for entire staff
- Implement customer service follow-up process to increase satisfaction and referrals
- Commit to be on time-every time
- Develop and maintain database of customers and send weekly and monthly correspondence
- Use social media strategies to more fully engage customers
Step 3: Identify Your Tactics
The third step is to write one or two bullets with the specific actions to be taken to make each strategy outlined above a reality. For example:
- 5% Discount – Advise Sales Manager of new pricing initiative
- Better Training – Investigate web-based training courses
- Customer Database – Locate appropriate contact management program
Step 4: Perform a Cost/Benefit Analysis
The fourth step is absolutely critical. Prepare a two-sentence assessment of the financial costs and rewards of executing your envelope plan. For example… “The cost of executing this plan, including the pricing discount and the cost of the other initiatives, is $37,000. The financial reward for executing this plan, assuming that the level of new customers remains unchanged and the business from repeat customers increases to 20%, an increase in annual sales of $875,000 is expected”. Not a bad return on your money actually!
Step 5: Get Buy-In
Your final step is to share your “envelope plan” with other members of your team to gain input and buy-in into the advantages of implementing your strategies. The envelope plan appears simple, but it’s concise, geared toward action and infuses financial costs and returns into your overall businesses goals.