Author: Warrior Rising

The challenges of growing a business – and how to meet them

The challenges of growing a business - and how to meet them

Growing businesses face a range of challenges. As a business grows, different problems and opportunities demand different solutions – what worked a year ago might now be not the best approach. All too often, avoidable mistakes turn what could have been a great business into an also-ran.

Recognising and overcoming the common pitfalls associated with growth is essential if your business is to continue to grow and thrive. Crucially, you need to ensure that the steps you take today don’t themselves create additional problems for the future. Effective leadership will help you make the most of the opportunities, creating sustainable growth for the future.

This guide highlights the particular risks and mistakes that most commonly affect growing businesses and outlines what you can do about them.

  • Keeping up with the market
  • Planning ahead
  • Cash flow and financial management
  • Problem solving
  • The right systems
  • Skills and attitudes
  • Welcoming change

Keeping up with the market

Market research isn’t something you do as a one-off when you launch your business. Business conditions change continually, so your market research should be continuous as well. Otherwise you run the risk of making business decisions based on out-of-date information, which can lead to business failure.

The more you succeed, the more competitors notice – and react to – what you are doing. A market-leading offer one day may be no better than average a few months later.

Apparently loyal customers can be quick to find alternative suppliers who provide a better deal.

As products (and services) age, sales growth and profit margins get squeezed. Understanding where your products are in their lifecycles can help you work out how to maximise overall profitability. At the same time, you need to invest in innovation to build a stream of new, profitable products to market.

Information sources

Published information can provide useful insights into market conditions and trends. As a growing business, your own experience can be even more valuable.

You should be able to build up an in-depth picture of what customers want, how they behave and which of your marketing approaches work best.

Taking the time to talk to key customers pays off. Your suppliers and other business partners can be important sources of market information. You should encourage your employees to share what they know about customers and the market. Effective IT systems can also make it easier to share and analyse key information such as customers’ purchasing behaviour and preferences.
You may want to carry out extra research as well – for example, to test customer reaction to a new product. You might do this yourself, or use a freelance researcher or market research agency.

Planning ahead

The plan that made sense for you a year ago isn’t necessarily right for you now. Market conditions continually change, so you need to revisit and update your business plan regularly. See the page in this guide on keeping up with the market.

As your business grows, your strategy needs to evolve to suit your changed circumstances. For example, your focus is likely to change from winning new customers to building profitable relationships and maximising growth with existing customers. Existing business relationships often have greater potential for profit and can also provide reliable cash flow. Newer relationships may increase turnover, but the profit margins may be lower, which may not be sustainable. See the page in this guide on cash flow and financial management.

At the same time, every business needs to be alert to new opportunities. There are obvious risks to relying solely on existing customers. Diversifying your customer base spreads those risks.

Following the same business model, but bigger, is not the only route to growth. There are other strategic options such as outsourcing or franchising that might provide better growth opportunities.

It’s important not to assume that your current success means that you will automatically be able to take advantage of these opportunities. Every major move needs planning in the same way as a new business launch.

Watch out for being too opportunistic – ask yourself whether new ideas suit your strengths and your overall vision of where the business is going. Bear in mind that every new development brings with it changing risks. It’s worth regularly reviewing the risks you face and developing contingency plans.

Cash flow and financial management

Good cash flow control is important for any business. For a growing business, it’s crucial – cash constraints can be the biggest factor limiting growth and overtrading can be fatal

.Making the best use of your finances should be a key element in business planning and assessing new opportunities. With limited resources, you may need to pass up promising opportunities if pursuing them would mean starving your core business of essential funding.

Every element of working capital should be carefully controlled to maximise your free cash flow. Effective credit management and tight control of overdue debts are essential. You may also want to consider raising financing against trade debts.

Good stock control and effective supplier management tend to become increasingly important as businesses grow. Holdings of obsolete stock may become a problem that needs periodic clearing up. You may want to work with suppliers to reduce delivery cycles, or switch to suppliers and systems that can handle just-in-time delivery.

Planning ahead helps you anticipate your financing needs and arrange suitable funding. For many growing businesses, a key decision is whether to bring in outside investors to provide the equity needed to underpin further expansion

Problem solving

New businesses often run in perpetual crisis mode. Every day brings new challenges that urgently need resolving and management spends most of their time troubleshooting.

As your business grows, this approach simply doesn’t work. While a short-term crisis is always urgent, it may not matter nearly as much as other things you could be doing. Spending your time soothing an irritated customer might help protect that one relationship – but focusing instead on recruiting the right salesperson could lay the foundations of substantial new sales for years to come

.As your business grows, you also need to be alert to new problems and priorities.

For example, your business might be increasingly at risk unless you take steps to ensure your intellectual property is properly protected.

If you are focusing on individual marketing campaigns, you might need to devote more resources to developing your brand.

Identifying the key drivers of growth is a good way of understanding what to prioritise.

A disciplined approach to management focuses on leading employees, developing your management team and building your business strategy. Instead of treating each problem as a one-off, you develop systems and structures that make it easier to handle in the future.

The right systems

All businesses produce and rely on large volumes of information – financial records, interactions with customers and other business contacts, employee details, regulatory requirements and so on. It’s too much to keep track of – let alone use effectively – without the right systems.

Responsibilities and tasks can be delegated as your business grows, but without solid management information systems you cannot manage effectively. The larger your business grows, the harder it is to ensure that information is shared and different functions work together effectively. Putting the right infrastructure in place is an essential part of helping your business to grow.

Documentation, policies and procedures also become increasingly important. The informality that might work with one or two employees and a handful of customers simply isn’t practical in a growing business. You need proper contracts, clear terms and conditions, effective employment procedures and so on.

Many growing businesses find using established management standards one of the most effective ways of introducing best practice. Quality control systems can be an important part of driving improvements and convincing larger customers that you can be relied on.

Investing in the right systems is an investment that will pay off both short and long term. You benefit every day from more effective operations. If you ever decide to sell the business, demonstrating that you have well-run, efficient systems will be an important part of proving its value.

Skills and attitudes

Entrepreneurs are the driving force behind creating and growing new businesses. All too often, they are also the people holding them back.

The abilities that can help you launch a business are not the same as those you need to help it grow. It’s vital not to fool yourself into valuing your own abilities too highly. The chances are that you’ll need training to learn the skills and attitudes required by someone who is leading growth.

To grow your business, you need to learn to delegate properly, trusting your management team and giving up day-to-day control of every detail. It’s all too easy to stifle creativity and motivation with excessive interference. As the business becomes more complex, you also need to develop your time management skills and learn to focus on what’s really important.

As your business grows, you may need to bring in outsiders to help. You’ll want to delegate responsibility for particular areas to different specialists, or appoint a non-executive director or two to strengthen your board. As you start tackling a new opportunity, someone who has experience of that activity can be vital.

For many successful entrepreneurs, learning to listen to – and take – advice is one of the hardest challenges they face. But it may also be essential if you are going to make the most of your opportunities. Some entrepreneurs, recognising their own limitations, even appoint someone else to act as managing director or chairman.

Welcoming change

Complacency can be a major threat to a growing business. Assuming that you will continue to be successful simply because you have been in the past is very unwise.

Regularly revisiting and updating your business plan can help remind you of the changing market conditions and the need to respond to them. See the page in this guide on planning ahead.

An up-to-date plan helps you identify what action you need to take to change your business and the way it operates, for example:

Changing to suppliers who can grow with you and meet your new priorities. As your business grows, consistent quality and reliability may be more important than simply getting the cheapest offer.
Renegotiating contracts to take account of increased volume.
Training and developing employees. Your own role will also evolve as the business grows. See the page in this guide on skills and attitudes.
Making sure that you keep up to date with new technologies.
You need to be fully committed to your strategy, even if it takes you out of your comfort zone. This may involve hard decisions – for example making employees redundant or switching business away from suppliers you have become friends with. But unless you’re prepared to do this, you risk putting your business at a dangerous competitive disadvantage.

 

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Original document, The challenges of growing a business – and how to meet them, © Crown copyright 2009
Source: Business Link UK (now GOV.UK/Business)
Adapted for Academy.Warriorrising

How to Implement Business Process Improvement

How to Implement Business Process Improvement

Technology, labor, distribution and consumer demographics have all massively changed just in the last few years. As such, business processes need to be constantly evolving to adapt and bring satisfaction to the customer as efficiently as possible. Organizations are continually looking for leadership team that’s experienced in business process management (BPM).

It can seem like a tall order to disrupt the status quo at your company, but with the implementation of smart business process improvement strategies, you’ll be able to make these changes as fluidly as possible. Let’s look at business process improvement (BPI), define it, explore strategies and then note the business and project management tools that can help implement and analyze progress in your company.

What Is Business Process?

Before we can improve the business process, we must first understand it. Business process is simply a series of tasks that you and your team perform repeatedly to create a product or service for your stakeholder, sponsor or customer. Business process can be modeled as a flowchart, which details the tasks necessary to serve that business goal.

A business process starts with an objective and ends with the achievement of that goal, which provides value for the customer. A business process can often be broken down into smaller processes, allowing for divisions of labor.

In general, the business process is broken down into three types.

  1. Operational: This includes the core business and creates a value stream, such as orders from customers, opening accounts, manufacturing, etc.
  2. Management: This includes such processes as corporate governance, budget and employee oversight.

  3. Supporting: This includes those processes that support other processes such as accounting, recruitment, technical support, etc.

Each of those types also exhibits the six characteristics of a business process:

  1. It has definite boundaries, inputs and outputs
  2. It has an ordered list of activities in sequence
  3. It asks: “Who is the customer?”
  4. It must add value for the customer
  5. It is embedded in an organizational process
  6. It usually spans several functions

Lastly, when working on a business process it helps to have an owner, someone who is responsible for overseeing and improving this process.

How to Improve Business Process

By streamlining your business process you’ll have fewer errors and delays, and customer satisfaction will improve. Sounds great right? Well, here are some steps you can take to cut waste, boost efficiency and improve your business process.

What Needs to Change?

Analyze your business process at a high level and identify what needs changing. You can uncover areas ripe for improvement by conducting a process audit to discover where issues and risks lurk.

Analyze Your Pain Points

After you’ve figured out which parts of your process need improvement, it’s time to analyze them fully to understand what’s happening and how to realistically make improvements. Ask yourself the tough questions, for example:

  • What steps are creating roadblocks?
  • What aspects are the most time-consuming?
  • Is there an undue increase in cost and resources?
  • Is quality impacted?

You can find your answers by using business process mapping to outline everything with a flowchart or a swim lane diagram. These tools visualize all steps in your business process. You want to dive deep into each phase of the process to make sure you’re not leaving out any steps, regardless of how minor they might appear.

This will help to discover the source of the problems occurring in your process. To further your understanding of where the process is breaking down, you’ll want to talk to those people who are directly involved in it. Get their perspective on what’s wrong and what they think can be done to improve the process.

Get Buy-In
Once you’ve identified and analyzed the issues, you’re going to need to get support from senior management to okay your plans for improvement. These improvements can take time and use resources, so without a commitment from senior management, you won’t have the power to proceed.

Design the Improvement Process
Now you’re going to redesign the inadequate part of your process and apply the improvements you deem necessary to add efficiency. The best way to do this is by working with those people involved in the part you’re focusing on. Include what you learned when mapping the process but continue getting input from them as part of the redesign.

Be clear about what you want to change, then work on brainstorming or other group activities to collect ideas. At this point don’t stifle any suggestions, regardless of the cost or resources involved. You want to explore first.

After the exploratory step, you narrow the solutions by considering the ideas within a realistic context. Apply impact and risk analysis. Work to uncover risks and potential failure points to further help you understand the full consequences of the proposal you’re building. Once you and the group have come to a realistic approach that has been agreed upon, then you’ll want to create a new diagram to document the steps involved.

What Do You Need to Get It Done?
Now that you have a plan, you need to determine what resources are needed to implement it. List everything required. Go through the proper channels to approve these resources and communicate clearly why they are necessary to refine and improve the process. A business case might be a good way to justify your request.

Make the Change
Implement your redesign. This might mean changing existing systems, teams and processes. Sounds like a project in and of itself? That’s because it is, and you should organize it as one. Plan, allocate time and resources, consider risk and assemble a team to get the work done.

Review, Review, Review
Just as you reviewed the existing processes to discover where improvements could be made, you’ll want to review your improvements. Monitor their progress and make sure they’re meeting the milestones you’ve set up. Be ready to adjust your plan accordingly as issues arise.

Stay in communication with your team throughout. Get input from them on how the new process is working. Ask if they’re finding it frustrating on any level. Take this information and tweak your plan to make sure that the process is in fact making improvements and not meaningless change.

Project Manager Can Help with Business Process Improvement

There can be a lot of preparation, administration and management involved when implementing BPI, so it can be very useful to use project management tools. ProjectManager has features that can help with business process improvements, such as online Gantt charts, kanban boards, workload management software, real-time dashboards and more.

Plan with Gantt Charts
As you work to redesign you process, you’ll want to have a timeline on which to place tasks and deadlines, to make sure you’re scheduling the project as efficiently as you can. That’s where an online Gantt chart comes in. All you need to do is take your task list and import it into ProjectManager and the timeline is populated with those tasks, which can be linked and progress can be tracked.

Visualize Workflow with Kanban

ProjectManager’s Kanban is a visual tool to help you see your current process. It’s very flexible and allows you to visualize your work and divide your Kanban board as you see fit. You can break the Kanban board down as far as you want.

This visibility creates clarity, so you can evolve your process as needed to add efficiencies. It helps everyone on the team see the process at a glance, which allows for a more collaborative effort at improving those processes. By visualizing the process, you can quickly see where there are bottlenecks in your process and resolve them.

Track with Dashboards

Because ProjectManager is a cloud-based project management software it captures the progress of your work in real time. The real-time dashboard, therefore, gives you one screen in which you can see all the data you collect on the progress, cost, workload, etc., related to the process. From this overview, the issues that are preventing you from improving productivity often come quickly into focus.

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Original document, How to Implement Business Process Improvement
Source: Project Manager
Adapted for Academy.Warriorrising

Sample Business Plans

How to Implement Business Process Improvement

I believe that reading sample business plans is essential when writing your own.

As you explore business plan examples from real companies and brands, it’s easier for you to learn how to write a good one.

But what does a good business plan look like? And how do you write one that’s both viable and convincing. I’ll walk you through the ideal business plan format along with some examples to help you get started.

Business Plan Format

Ask any successful sports coach how they win so many games, and they’ll tell you they have a unique plan for every single game. To me, the same logic applies to business.

If you want to build a thriving company that can pull ahead of the competition, you need to prepare for battle before breaking into a market.

Business plans guide you along the rocky journey of growing a company. And if your business plan is compelling enough, it can also convince investors to give you funding.

With so much at stake, I’m sure you’re wondering where to begin.

First, you’ll want to nail down your formatting. Most business plans include the following sections.

1. Executive Summary

I’d say the executive summary is the most important section of the entire business plan. 

Why? Essentially, it’s the overview or introduction, written in a way to grab readers’ attention and guide them through the rest of the business plan. This is important, because a business plan can be dozens or hundreds of pages long.

There are two main elements I’d recommend including in your executive summary:

Company Description

This is the perfect space to highlight your company’s mission statement and goals, a brief overview of your history and leadership, and your top accomplishments as a business.

Tell potential investors who you are and why what you do matters. Naturally, they’re going to want to know who they’re getting into business with up front, and this is a great opportunity to showcase your impact.

Need some extra help firming up those business goals? Check out HubSpot Academy’s free course to help you set goals that matter — I’d highly recommend it

Products and Services

To piggyback off of the company description, be sure to incorporate an overview of your offerings. This doesn’t have to be extensive — just another chance to introduce your industry and overall purpose as a business.

In addition to the items above, I recommend including some information about your financial projections and competitive advantage here too.:

Keep in mind you’ll cover many of these topics in more detail later on in the business plan. So, keep the executive summary clear and brief, and only include the most important takeaways.

Executive Summary Business Plan Examples

This example was created with HubSpot’s business plan template:

This executive summary is so good to me because it tells potential investors a short story while still covering all of the most important details.

Tips for Writing Your Executive Summary

  • Start with a strong introduction of your company, showcase your mission and impact, and outline the products and services you provide.
  • Clearly define a problem, and explain how your product solves that problem, and show why the market needs your business.
  • Be sure to highlight your value proposition, market opportunity, and growth potential.
  • Keep it concise and support ideas with data.
  • Customize your summary to your audience. For example, emphasize finances and return on investment for venture capitalists.

Check out our tips for writing an effective executive summary for more guidance.

2. Market Opportunity

This is where you’ll detail the opportunity in the market.

The main question I’d ask myself here is this: Where is the gap in the current industry, and how will my product fill that gap?

More specifically, here’s what I’d include in this section:

  • The size of the market
  • Current or potential market share
  • Trends in the industry and consumer behavior
  • Where the gap is
  • What caused the gap
  • How you intend to fill it

To get a thorough understanding of the market opportunity, you’ll want to conduct a TAM, SAM, and SOM analysis and perform market research on your industry.

You may also benefit from creating a SWOT analysis to get some of the insights for this section.

Market Opportunity Business Plan Example

I like this example because it uses critical data to underline the size of the potential market and what part of that market this service hopes to capture.

Tips for Writing Your Market Opportunity Section

  • Focus on demand and potential for growth.
  • Use market research, surveys, and industry trend data to support your market forecast and projections.
  • Add a review of regulation shifts, tech advances, and consumer behavior changes.
  • Refer to reliable sources.
  • Showcase how your business can make the most of this opportunity.

To get a thorough understanding of the market opportunity, you’ll want to conduct a TAM, SAM, and SOM analysis and perform market research on your industry.

You may also benefit from creating a SWOT analysis to get some of the insights for this section.

3. Competitive Landscape

Since we’re already speaking of market share, you’ll also need to create a section that shares details on who the top competitors are.

After all, your customers likely have more than one brand to choose from, and you’ll want to understand exactly why they might choose one over another.

My favorite part of performing a competitive analysis is that it can help you uncover:

  • Industry trends that other brands may not be utilizing
  • Strengths in your competition that may be obstacles to handle
  • Weaknesses in your competition that may help you develop selling points
  • Theunique proposition you bring to the market that may resonate with customers

Competitive Landscape Business Plan Example

I like how the competitive landscape section of this business plan below shows a clear outline of who the top competitors are.

It also highlights specific industry knowledge and the importance of location, which shows useful experience in this specific industry. 

This can help build trust in your ability to execute your business plan.

Tips for Writing Your Competitive Landscape

  • Complete in-depth research, then emphasize your most important findings.
  • Compare your unique selling proposition (USP) to your direct and indirect competitors.
  • Show a clear and realistic plan for product and brand differentiation.
  • Look for specific advantages and barriers in the competitive landscape. Then, highlight how that information could impact your business.
  • Outline growth opportunities from a competitive perspective.
  • Add customer feedback and insights to support your competitive analysis.

4. Target Audience

Use this section to describe who your customer segments are in detail. What is the demographic and psychographic information of your audience?

If your immediate answer is “everyone,” you’ll need to dig deeper. Here are some questions I’d ask myself here:

  • What demographics will most likely need/buy your product or service?
  • What are the psychographics of this audience? (Desires, triggering events, etc.)
  • Why are your offerings valuable to them?

I’d also recommend building a buyer persona to get in the mindset of your ideal customers and be clear on why you’re targeting them.

Target Audience Business Plan Example

I like the example below because it uses in-depth research to draw conclusions about audience priorities. It also analyzes how to create the right content for this audience.

Tips for Writing Your Target Audience Section

  • Include details on the size and growth potential of your target audience.
  • Figure out and refine the pain points for your target audience, then show why your product is a useful solution.
  • Describe your targeted customer acquisition strategy in detail.
  • Share anticipated challenges your business may face in acquiring customers and how you plan to address them.
  • Add case studies, testimonials, and other data to support your target audience ideas.
  • Remember to consider niche audiences and segments of your target audience in your business plan.

5. Marketing Strategy

Here, you’ll discuss how you’ll acquire new customers with your marketing strategy. I’d suggest including information:

  • Your brand positioning vision and how you'll cultivate it
  • The goal targets you aim to achieve
  • The metrics you'll use to measure success
  • The channels and distribution tactics you'll use

I think it’s helpful to have a marketing plan built out in advance to make this part of your business plan easier.

Marketing Strategy Business Plan Example

This business plan example includes the marketing strategy for the town of Gawler.

In my opinion, it really works because it offers a comprehensive picture of how they plan to use digital marketing to promote the community.

Tips for Writing Your Marketing Strategy

  • Include a section about how you believe your brand vision will appeal to customers.
  • Add the budget and resources you'll need to put your plan in place.
  • Outline strategies for specific marketing segments.
  • Connect strategies to earlier sections like target audience and competitive analysis.
  • Review how your marketing strategy will scale with the growth of your business.
  • Cover a range of channels and tactics to highlight your ability to adapt your plan in the face of change.

This business plan example includes the marketing strategy for the town of Gawler.

In my opinion, it really works because it offers a comprehensive picture of how they plan to use digital marketing to promote the community.

6. Key Features and Benefits

At some point in your business plan, you’ll need to review the key features and benefits of your products and/or services.

Laying these out can give readers an idea of how you’re positioning yourself in the market and the messaging you’re likely to use. It can even help them gain better insight into your business model.

Key Features and Benefits Business Plan Example

In my opinion, the example below does a great job outlining products and services for this business, along with why these qualities will attract the audience.

Tips for Writing Your Key Features and Benefits

  • Emphasize why and how your product or service offers value to customers.
  • Use metrics and testimonials to support the ideas in this section.
  • Talk about how your products and services have the potential to scale.
  • Think about including a product roadmap.
  • Focus on customer needs, and how the features and benefits you are sharing meet those needs.
  • Offer proof of concept for your ideas, like case studies or pilot program feedback.
  • Proofread this section carefully, and remove any jargon or complex language.

7. Pricing and Revenue

This is where you’ll discuss your cost structure and various revenue streams. Your pricing strategy must be solid enough to turn a profit while staying competitive in the industry. 

For this reason, here’s what I’d might outline in this section:

  • The specific pricing breakdowns per product or service
  • Why your pricing is higher or lower than your competition's
  • (If higher) Why customers would be willing to pay more
  • (If lower) How you're able to offer your products or services at a lower cost
  • When you expect to break even, what margins do you expect, etc?

Pricing and Revenue Business Plan Example

This is where you’ll discuss your cost structure and various revenue streams. Your pricing strategy must be solid enough to turn a profit while staying competitive in the industry. 

For this reason, here’s what I’d might outline in this section:

Tips for Writing Your Pricing and Revenue Section

  • Get specific about your pricing strategy. Specifically, how you connect that strategy to customer needs and product value.
  • If you are asking a premium price, share unique features or innovations that justify that price point.
  • Show how you plan to communicate pricing to customers.
  • Create an overview of every revenue stream for your business and how each stream adds to your business model as a whole.
  • Share plans to develop new revenue streams in the future.
  • Show how and whether pricing will vary by customer segment and how pricing aligns with marketing strategies.
  • Restate your value proposition and explain how it aligns with your revenue model.

8. Financials

To me, this section is particularly informative for investors and leadership teams to figure out funding strategies, investment opportunities, and more.

According to Forbes, you’ll want to include three main things:

  • Profit/Loss Statement - This answers the question of whether your business is currently profitable.
  • Cash Flow Statement - This details exactly how much cash is incoming and outgoing to give insight into how much cash a business has on hand.
  • Balance Sheet - This outlines assets, liabilities, and equity, which gives insight into how much a business is worth.

While some business plans might include more or less information, these are the key details I’d include in this section.

Financials Business Plan Example

To me, this section is particularly informative for investors and leadership teams to figure out funding strategies, investment opportunities, and more.

According to Forbes, you’ll want to include three main things:

8. Financials

This balance sheet is a great example of level of detail you’ll need to include in the financials section of your business plan.

Tips for Writing Your Financials Section

  • Growth potential is important in this section too. Using your data, create a forecast of financial performance in the next three to five years.
  • Include any data that supports your projections to assure investors of the credibility of your proposal.
  • Add a break-even analysis to show that your business plan is financially practical. This information can also help you pivot quickly as your business grows.
  • Triple-check all financial information in your plan for accuracy.
  • Show how any proposed funding needs align with your plans for growth.

As you create your business plan, keep in mind that each of these sections will be formatted differently. Some may be in paragraph format, while others could be charts or graphs.

Business Plan Types

The formats above apply to most types of business plans. That said, the format and structure of your plan will vary by your goals for that plan. 

So, I’ve added a quick review of different business plan types. For a more detailed overview, check out this post.

1. Startups

Startup business plans are for proposing new business ideas.

If you’re planning to start a small business, preparing a business plan is crucial. The plan should include all the major factors of your business.

You can check out this guide for more detailed business plan inspiration.

2. Feasibility Studies

Feasibility business plans focus on that business’s product or service. Feasibility plans are sometimes added to startup business plans. They can also be a new business plan for an already thriving organization.

3. Internal Use

You can use internal business plans to share goals, strategies, or performance updates with stakeholders. In my opinion, internal business plans are useful for alignment and building support for ambitious goals.

4. Strategic Initiatives

Another business plan that’s often for sharing internally is a strategic business plan. This plan covers long-term business objectives that might not have been included in the startup business plan.

5. Business Acquisition or Repositioning

When a business is moving forward with an acquisition or repositioning, it may need extra structure and support. These types of business plans expand on a company’s acquisition or repositioning strategy.

 

6. Growth

Growth sometimes just happens as a business continues operations. But more often, a business needs to create a structure with specific targets to meet set goals for expansion. This business plan type can help a business focus on short-term growth goals and align resources with those goals.

Sample Business Plan Templates

Now that you know what’s included and how to format a business plan, let’s review some of my favorite templates.

1. HubSpot's One-Page Business Plan

The business plan linked above was created here at HubSpot and is perfect for businesses of any size — no matter how many strategies we still have to develop.

Fields such as Company Description, Required Funding, and Implementation Timeline give this one-page business plan a framework for how to build your brand and what tasks to keep track of as you grow.

Then, as the business matures, you can expand on your original business plan with a new iteration of the above document.

Why I Like It

This one-page business plan is a fantastic choice for the new business owner who doesn’t have the time or resources to draft a full-blown business plan. It includes all the essential sections in an accessible, bullet-point-friendly format. That way, you can get the broad strokes down before honing in on the details.

2. HubSpot's Downloadable Business Plan Template

We also created a business plan template for entrepreneurs.

Download a free, editable one-page business plan template.

The template is designed as a guide and checklist for starting your own business. You’ll learn what to include in each section of your business plan and how to do it.

There’s also a list for you to check off when you finish each section of your business plan.

Strong game plans help coaches win games and help businesses rocket to the top of their industries. So if you dedicate the time and effort required to write a workable and convincing business plan, you’ll boost your chances of success and even dominance in your market.

Why I Like It

This business plan kit is essential for the budding entrepreneur who needs a more extensive document to share with investors and other stakeholders.

It not only includes sections for your executive summary, product line, market analysis, marketing plan, and sales plan, but it also offers hands-on guidance for filling out those sections.

3. LiveFlow’s Financial Planning Template with built-in automation

This free template from LiveFlow aims to make it easy for businesses to create a financial plan and track their progress on a monthly basis.

The P&L Budget versus Actual format allows users to track their revenue, cost of sales, operating expenses, operating profit margin, net profit, and more.

The summary dashboard aggregates all of the data put into the financial plan sheet and will automatically update when changes are made.

Instead of wasting hours manually importing your data to your spreadsheet, LiveFlow can also help you to automatically connect your accounting and banking data directly to your spreadsheet, so your numbers are always up-to-date.

With the dashboard, you can view your runway, cash balance, burn rate, gross margins, and other metrics. Having a simple way to track everything in one place will make it easier to complete the financials section of your business plan.

Why I Like It

This is a fantastic template to track performance and alignment internally and to create a dependable process for documenting financial information across the business. It’s highly versatile and beginner-friendly.

It’s especially useful if you don’t have an accountant on the team. (I always recommend you do, but for new businesses, having one might not be possible.)

4. ThoughtCo’s Sample Business Plan

If you want to reference an actual business plan while writing your own, ThoughtCo has got you covered. It created a fictional company called Acme Management Technology and wrote an entire business plan for it.

Using its sample business plan as a guide while filling out your own will help you catch and include small yet important details in your business plan that you otherwise might not have noticed.

Why I Like It

This is a fantastic template for an existing business that’s strategically shifting directions. If your company has been around for a while, and you’re looking to improve your bottom line or revitalize your strategy, this is an excellent template to use and follow.

5. BPlan’s Free Business Plan Template

One of the more financially oriented sample business plans in this list, BPlan’s free business plan template dedicates many of its pages to your business’s financial plan and financial statements.

After filling this business plan out, your company will truly understand its financial health and the steps you need to take to maintain or improve it.

Why I Like It

I absolutely love this business plan template because of its ease-of-use and hands-on instructions (in addition to its finance-centric components). If you feel overwhelmed by the thought of writing an entire business plan, consider using this template to help you with the process.

6. Harvard Business Review’s "How to Write a Winning Business Plan"

Most sample business plans teach you what to include in your business plan, but this Harvard Business Review article will take your business plan to the next level — it teaches you the why and how behind writing a business plan.

With the guidance of Stanley Rich and Richard Gumpert, co-authors of “Business Plans That Win: Lessons From the MIT Enterprise Forum“, you’ll learn how to write a convincing business plan that emphasizes the market demand for your product or service.

You’ll also learn the financial benefits investors can reap from putting money into your venture rather than trying to sell them on how great your product or service is.

Why I Like It

This business plan guide focuses less on the individual parts of a business plan, and more on the overarching goal of writing one. For that reason, it’s one of my favorites to supplement any template you choose to use. Harvard Business Review’s guide is instrumental for both new and seasoned business owners.

7. HubSpot’s Complete Guide to Starting a Business

If you’re an entrepreneur, you know writing a business plan is one of the most challenging first steps to starting a business.

Fortunately, with HubSpot’s comprehensive guide to starting a business, you’ll learn how to map out all the details by understanding what to include in your business plan and why it’s important to include them. The guide also fleshes out an entire sample business plan for you.

If you need further guidance on starting a business, HubSpot’s guide can teach you how to make your business legal, choose and register your business name, and fund your business. It will also give small business tax information and includes marketing, sales, and service tips.

Why I Like It

This comprehensive guide will walk you through the process of starting a business, in addition to writing your business plan, with a high level of exactitude and detail. So if you’re in the midst of starting your business, this is an excellent guide for you.

It also offers other resources you might need, such as market analysis templates.

8. Panda Doc’s Free Business Plan Template

PandaDoc’s free business plan template is one of the more detailed and fleshed-out sample business plans on this list. It describes what you should include in each section, so you don’t have to come up with everything from scratch.

Once you fill it out, you’ll fully understand your business’ nitty-gritty details and how all of its moving parts should work together to contribute to its success.

Why I Like It

This template has two things I love: comprehensiveness and in-depth instructions. Plus, it’s synced with PandaDoc’s e-signature software so that you and other stakeholders can sign it with ease. For that reason, I especially love it for those starting a business with a partner or with a board of directors.

9. Small Business Administration Free Business Plan Template

The Small Business Administration (SBA) offers several free business plan templates that can be used to inspire your own plan.

Before you get started, you can decide what type of business plan you need — a traditional or lean start-up plan.

Then, you can review the format for both of those plans and view examples of what they might look like.

Why I Like It

We love both of the SBA’s templates because of their versatility. You can choose between two options and use the existing content in the templates to flesh out your own plan. Plus, if needed, you can get a free business counselor to help you along the way.

Top Business Plan Examples

I’ve compiled some completed business plan samples to help you get an idea of how to customize a plan for your business.

I chose different types of business plan ideas to expand your imagination. Some are extensive, while others are fairly simple.

Let’s take a look.

1. LiveFlow

One of the major business expenses is marketing. How you handle your marketing reflects your company’s revenue.

I included this business plan to show you how you can ensure your marketing team is aligned with your overall business plan to get results. The plan also shows you how to track even the smallest metrics of your campaigns, like ROI and payback periods instead of just focusing on big metrics like gross and revenue.

Fintech startup, LiveFlow, allows users to sync real-time data from its accounting services, payment platforms, and banks into custom reports. This eliminates the task of pulling reports together manually, saving teams time and helping automate workflows.

“Using this framework over a traditional marketing plan will help you set a profitable marketing strategy taking things like CAC, LTV, Payback period, and P&L into consideration,” explains LiveFlow co-founder, Lasse Kalkar.

Why I Like It

When it came to including marketing strategy in its business plan, LiveFlow created a separate marketing profit and loss statement (P&L) to track how well the company was doing with its marketing initiatives.

This is a great approach, allowing businesses to focus on where their marketing dollars are making the most impact. Having this information handy will enable you to build out your business plan’s marketing section with confidence. LiveFlow has shared the template here. You can test it for yourself.

2. Lula Body

Brooklyn Business owner and Pilates instructor, Tara Kashyap, saw a need in her community for a Pilates, tissue, and bodywork studio. In response, she opened Lula Body in Crown Heights.

Pictured above is a hypothetical pricing and revenue statement based on Lula Body’s business plan. As you can see, Kashyap breaks down the cost of classes, start-up expenses, monthly expenses, and her monthly sales projection.

Everything from equipment costs to loan interest is included in the expenses to give the most accurate picture of operating costs and revenue.

If you’re seeking outside funding for your business, you’ll want to make sure this section of your business plan is as thorough as possible.

Why I Like It

This is a good business plan example for service-based businesses such as gyms, boxing classes, dancing studios, etc. For starters, the plan shows how to budget for the business loan and what to focus on buying first. Everything is well presented, including what to charge the customers in different scenarios and the expected revenue. This is a good foundation from which business performance can be evaluated with time.

3. Patagonia

Sometimes all you need is a solid mission statement and core values to guide you on how to go about everything. You do this by creating a business plan revolving around how to fulfill your statement best.

For example, Patagonia is an eco-friendly company, so their plan discusses how to make the best environmentally friendly products without causing harm.

A good mission statement should not only resonate with consumers but should also serve as a core value compass for employees as well.

Why I Like It

Patagonia has one of the most compelling mission statements I’ve seen:

“Together, let’s prioritise purpose over profit and protect this wondrous planet, our only home.”

It reels you in from the start, and the environmentally friendly theme continues throughout the rest of the statement.

This mission goes on to explain that they are out to “Build the best product, cause no unnecessary harm, and use business to protect nature.”

Their mission statement is compelling and detailed, with each section outlining how they will accomplish their goal.

4. Vesta Home Automation

This executive summary for a smart home device startup is part of a business plan created by students at Mount Royal University.

While it lacks some of the sleek visuals of the templates above, its executive summary does a great job of demonstrating how invested they are in the business.

Right away, they mention they’ve invested $200,000 into the company already, which shows investors they have skin in the game and aren’t just looking for someone else to foot the bill.

Why I Like It

This is the kind of business plan you need when applying for business funds. It clearly illustrates the expected future of the company and how the business has been coming along over the years.

5. NALB Creative Center

This fictional business plan for an art supply store includes everything one might need in a business plan: an executive summary, a company summary, a list of services, a market analysis summary, and more.

One of its most notable sections is its market analysis summary, which includes an overview of the population growth in the business’ target geographical area, as well as a breakdown of the types of potential customers they expect to welcome at the store. 

This sort of granular insight is essential for understanding and communicating your business’s growth potential. Plus, it lays a strong foundation for creating relevant and useful buyer personas.

It’s essential to keep this information up-to-date as your market and target buyer changes. For that reason, you should carry out market research as often as possible to ensure that you’re targeting the correct audience and sharing accurate information with your investors.

Why I Like It

Due to its comprehensiveness, it’s an excellent example to follow if you’re opening a brick-and-mortar store and need to get external funding to start your business.

6. Curriculum Companion Suites (CSS)

If you’re looking for a SaaS business plan example, look no further than this business plan for a fictional educational software company called Curriculum Companion Suites. 

Like the business plan for the NALB Creative Center, it includes plenty of information for prospective investors and other key stakeholders in the business.

One of the most notable features of this business plan is the executive summary, which includes an overview of the product, market, and mission.

The first two are essential for software companies because the product offering is so often at the forefront of the company’s strategy. Without that information being immediately available to investors and executives, then you risk writing an unfocused business plan.

Why I Like It

It’s essential to front-load your company’s mission if it explains your “Why?” and this example does just that. In other words, why do you do what you do, and why should stakeholders care? This is an important section to include if you feel that your mission will drive interest in the business and its offerings.

7. Culina Sample Business Plan

Culina’s sample business plan is an excellent example of how to lay out your business plan so that it flows naturally, engages readers, and provides the critical information investors and stakeholders need. 

Why I Like It

You can use this template as a guide while you’re gathering important information for your own business plan. You’ll have a better understanding of the data and research you need to do since Culina’s plan outlines these details so flawlessly for inspiration.

8. Plum Sample Business PlanPlum Sample Business Plan

When creating your own business plan, make sure the pictures and design you use make sense for your branding. The images in this plan are cutting-edge, which makes sense for an innovative company like Plum.

Why I Like It

This is one of my favorite sample business plans because you can see how implementing visuals can help tell your brand’s story. Additionally, the financial charts included are an excellent guide if you’re not sure what financial information to include.

9. LiveShopBuy Sample Business Plan

With this business plan, the focus is the investment opportunity. This is an excellent template to use if you’re going to use your business plan to seek funding. 

Why I Like It

The investment opportunity section is placed right up front and is several pages long. Then, it goes into more detail about the company and its key services. Nice.

Get Started Writing Your Business Plan

When you’re first getting started on your business plan, I know it can be daunting. The business world moves fast, and it’s full of ambitious companies scrambling to gain the majority of their industry’s market share.

That’s why it’s important to make sure you understand the value your business offers and can communicate that through a properly formatted business plan.

Editor’s note: This post was originally published in November 2018 and has been updated for comprehensiveness. This article was written by a human, but our team uses AI in our editorial process. Check out our full disclosure to learn more about how we use AI.

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Original document, Sample Business Plans
Source:https: Hubspot
Adapted for Academy.Warriorrising

The Pre-Mortem: A Simple Technique To Save Any Project From Failure

The Pre-Mortem: A Simple Technique To Save Any Project From Failure

The Pre-Mortem: A Simple Technique To Save Any Project From Failure
by tyler tervooren | 6 minute read
An ounce of prevention is worth a pound of cure. Any doctor will tell you that. And so will any sick patient.

So, why is it that age-old wisdom like this is rarely practiced?

  • Few people exercise and eat right before they realize their health is failing.
  • You rarely see anyone keep up their car before it breaks down.
  • No one replaces their roof until water’s dripping on their head.

What’s baffling about these problems is they rarely come out of the blue. They aren’t surprises; we see them coming.

  • You can feel yourself slowly getting out of shape.
  • You know if you never change your oil, your car is going to die.
  • Every day you come home and, for a split second, notice the sagging in the roof before moving on to more pressing matters.

The same is true for any risk-taker working on a big project with many moving pieces. As you maneuver through each day, it takes everything you’ve got to get through the massive pile of to-dos.

You see certain things building up—things you know are going to cause big problems down the line, but they’re not urgent yet. More pressing matters get your attention.

And you know if you allow them to go wrong, they could sink the project. They’re big risks, and they’re right in plain sight!

As a smart introverted leader, you know damn well something must be done, but you feel too scattered to do anything.

Luckily, there’s one simple thing you can do to save any project from disaster.

The Pre-Mortem Technique: Bringing Order to Chaos in A Big Project

Too often, we look back on projects gone horribly wrong and ask ourselves, “What happened?” We do a post-mortem and try to put together the broken pieces that will explain how we failed.

But after your project has failed is the wrong time to discuss the big problems it faced!

What you should’ve done, instead, is held a pre-mortem to look ahead at the challenges that could cause everything to fail, and created a plan to navigate around them.

As part of the small Action Team responsible for putting on a summit for 3,000 people here in Portland each summer, The Pre-Mortem Technique is one we adopted from year one and have held as a sacred ritual—one we know will shepherd our fragile event through any challenges that face it.

Several weeks before the show, we all get together with pizza and ice cream to geek out over the doom and gloom that could come our way. Sounds depressing, but putting big problems out in the open is actually quite a relief.

When you’re working on a high stakes project, no elephant should be left in the room!

Regardless of the goal you’re working on, there are three steps you can take to complete your own pre-mortem and put an iron-clad fence around success for your project.

How to Perform a Pre-Mortem in Three Steps

This is a relatively simple process and powerful in its ability to prevent crisis when done correctly. It’s important, though, that you complete every step and that you do them in the right order, following the instructions carefully.

Before the process, though, a few rules:

  • Set aside at least two hours of uninterrupted time. If that seems like a lot, ask yourself how much time it will take to clean up the mess you make if disaster strikes while your pants are down.
  • All stakeholders should be present. Invite everyone with a significant role to the pre-mortem. If you don’t, you’ll face a number of blind spots that could still blow up in your face… and you won’t even know they’re there because the person who could have alerted to you to them wasn’t invited. Everyone is equally important at the pre-mortem.
  • The pre-mortem must be a face to face meeting. This process will not work via email. A live chat could work, but it will be cumbersome. Video chats would be the next best solution. But unless it is physically impossible, get everyone together in one room. This is critical.
  • One person should do nothing but take notes. Lots of important problems and solutions get tossed around during a pre-mortem. They’ll be useless to you if someone isn’t in charge of making sure they’re remembered.

    Now, the process…

Step 1: Spend one hour listing every possible problem you can imagine.

Your one and only job during the first hour of your pre-mortem is to get down—on paper or a whiteboard—every single problem that has even a remote chance of occurring that would derail your project.

Dream big! Dream small! At this stage, no problem is off-limits, and everyone at the meeting should feel completely uninhibited about tossing out things that sound ridiculous.

Your ability to do this well will depend on how great a job you’ve done building trust within your team. Or, if you’re flying solo, you’ll need to be open and honest with yourself.

Think of this as a brainstorming session of doom. All ideas go, and you should encourage your team to explore different variations of the same problem…

  • What if a monster eats a team member?
  • What if an elephant eats our guest of honor?
  • What if a monster and an elephant get in a fight in our venue?
    …as well as very different, unrelated problems:
  • What if no one shows up to our event?
  • What if our website goes down?
  • What if the most important person backs out on us?

The goal is to create a completely exhaustive list of things that could go wrong. Any route you take to get there is allowed.

The only thing not allowed during this phase is proposed solutions. These are strictly forbidden because they draw the team away from getting every single problem out in the open.

If you have a team of talented and solution oriented people, you’ll find this is harder to manage than you think.

Step 2: Pick the top 10 problems.

At this point, you have a massive list of problems staring you in the face, and you need a method to make some sense of the madness.

Now is the time to pick the top 10 problems to focus on before moving into the next phase of the pre-mortem: finding solutions.

Here are a few rules you’ll want to follow to make sure you pick the best ones:

  • Focus on show-stoppers. The problems you focus on solving should be critical to your project. In other words, if it occurs, will it severely impact the project? If the answer is no, cross it off; it doesn’t belong on your pre-mortem list. This rule will eliminate many of the minor issues that came up—and helped you find bigger problems—but aren’t really mission critical.
  • Pick problems likely to happen. Don’t waste time solving problems that aren’t likely to actually happen. Instead, try to home in on the “elephant in the room” problems that came up—the ones everyone was secretly worried about but never brought up until now.
  • Discard problems you have no control over. Every project will face some external risks that you simply can’t control. Toss those out now because there’s nothing you can do about them. This eliminates problems like “Tornado blows everyone to Canada.” From here on out, you’re focusing on problems you can actually fix.

Step 3: Spend one hour creating solutions.

Now is the time for your team to do what it does best: solve problems.

Believe it or not, this part is actually the easiest. Once the biggest problems are out in the open, their solutions become surprisingly simple. As Einstein used to say, “If I had only one hour to save the world, I would spend fifty-five minutes defining the problem, and only five minutes finding the solution.”

Go through each problem in your top ten list and either:

  1. Create a proactive solution for it (best for problems facing you now), or
  2. Define a backup plan (best for problems that could happen, but haven’t yet)

    Most importantly, a solution is not complete until action items are created and assigned to team members to complete.

Never forget: this process is useless if you get all the way to creating a solution but don’t carry it out because no one knew they were in charge.

Your Homework Today

There are no guarantees when you’re taking on a big, risky project. Sometimes things will go wrong that you didn’t—or even couldn’t—anticipate. But taking a few hours to go through the pre-mortem process is a wise investment for any project that’s important to you.

Once you’ve done it, you can go to bed each night knowing all your bases are covered. Don’t underestimate the value of peace of mind.

Take five minutes and schedule a pre-mortem for whatever it is you’re working on now.

If you’re working with others, be sure to invite them.

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Original document, The Pre-Mortem: A Simple Technique To Save Any Project From Failure

Source: https://www.riskology.co/
Adapted for Academy.Warriorrising

General Standard Operating Procedure (SOP) Best Practices

General Standard Operating Procedure (SOP) Best Practices.

Standard operating procedures (SOP) provide guidelines for your frontline team members to complete a given process. SOPs are often used to ensure that operations run smoothly: with cohesion, performance uniformity, and in compliance with safety measures and regulations. 

Before you get started with the actual development of your standard operating procedures, consider the following SOP best practices:

SOP best practices: standardized and practical information that is up-to-date. Bonus points for team buy-in, where continuous improvement can be achieved with input from multiple team members.

Get your team on board.

One of the biggest challenges in SOPs is the lack of team adoption. SOPs can often be perceived as restrictive. That’s why it’s very important that you involve your team in the creation of the SOP. Talk to your key stakeholders to gather input and ideas, and understand their perspectives. Make sure you share a draft of the SOP with them early on.

Aim for practicality.

Standard operating procedures need to be designed with practicality in mind. Your team must be able to put them into practice. That’s why it’s important to talk to your team and understand if the SOP reflects their workflow and perspectives. 

Review and maintain.

Another common mistake is not reviewing and properly maintaining SOPs. Procedures can change from time to time. You may also identify ways to improve them. When this happens, make sure you update your SOP. 

Mind the S in SOP.

Standard operating procedures should be, well, standard. There is no room for deviations and ambiguity in SOPs. The terminology and wording you use is very important to ensure consistency in your SOP.

Best Practices: SOP Writing.

Speaking of wording, let’s get into writing guidelines.

1. Keep things simple

  • Break down each procedure into individual instructions. 
  • Break down individual instructions into individual steps. 
  • Limit each step to a single action. Use one verb per sentence. 

2. Avoid jargon and stick to your terms

  1. In SOPs, jargon should be kept to a minimum. Use plain, literal language.
  2. Stick to a term once you use it. For example, if you refer to “sterilized bottles” in the first step, use “sterilized bottles” (and not just “bottles”) in follow-up steps. 

3. Use active voice and action-oriented language

  • Start sentences with a verb whenever possible. 
  • Always use active voice instead of passive voice.
    • Active voice: Use the lever to lift the object.
    • Passive voice: The object should be lifted with the lever. 

4. Keep a good flow in instructions and don’t leave critical info for later

  • Don’t add unnecessary actions where they are not needed, and don’t forget any actions required to complete a task. 
  • If you need to provide a warning or troubleshooting info, do it when you’re explaining the relevant step, and not before or after.

Best Practices: SOP Visuals.

Visuals are extremely important in SOPs. Follow these tips:

  • Make your visuals as clear as possible: show the action clearly.
  • Use simple, animated GIFs or short videos when you want to show someone how to do something. Static pictures work best for simple actions like “press a button.”
  • Show context and detail where it’s needed. For example, if you need to show how to attach a lock to something, show the lock close up. Or if you want to highlight the tools needed, make sure to clearly show them in the visuals.

 

That’s it! Now on to standardizing your own procedures. Also check out our other articles on SOPs:

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Original document, General Standard Operating Procedure (SOP) Best Practices.
Source: Swipeguide.com
Adapted for Academy.Warriorrising

5 Fundamental Steps to Creating Powerful Standard Operating Procedures

5 Fundamental Steps to Creating Powerful Standard Operating Procedures by Oliver PearceQuality

Standard operating procedures (SOP) provide guidelines for your frontline team members to complete a given process. SOPs are often used to ensure that operations run smoothly: with cohesion, performance uniformity, and in compliance with safety measures and regulations. 

Before you get started with the actual development of your standard operating procedures, consider the following SOP best practices:

STEP 1 – Develop a list of processes that you believe need SOP creation

The best way to complete this task is to have each manager talk with their teams in order to create a list of potential SOPs. Then, organize time for your management team to meet to review the lists keeping in mind that not all processes need to be formalized only those where there is a clear business requirement or need for standardization. Once the processes to move forward have been identified, the management group must continue their assessment to identify redundancies or if there are any SOPs that need to be linked when departments are undertaking the same or similar processes. However, this master list will not be your final list.

As you write SOPs, you’ll find you may be able to combine some processes while others may need to be split up into different SOPs. The main function of this list is to give you a necessary starting point.

If you’re struggling to develop this list, go on over to our list of essential IT SOPs. This will provide you with somewhere to get started.

Expert tip: It’s important to note that during this first step, you may be tempted to create SOPs for every process in your organization. This isn’t the goal here. As you will be held to the process you define through auditing and vendor assessments it’s best not to select processes that you foresee undergoing change in the future. What you don’t want to be doing is updating you’re SOPs every 2 weeks, as this really defeats the entire exercise of making your team more efficient. 

STEP 2 – Plan the process for developing and managing SOPs

Determine the format for your Standard Operating Procedures. Once you have your list ready, you need to begin to plan your process for creating your SOPS; this is your first procedure to create. First, you’ll have to determine the format of the SOPs. The format is how you’re going to describe your process. Will you do step by step narrative or will you use diagrams? Or will you use a combination of both? Once the format is defined, you can begin to create your SOP Template. It can be beneficial in some cases to research SOP formats online, identifying an SOP example to work from and that works for your organization.

Develop a robust SOP Template. When creating a template for your SOPs it’s important to remember that the end goal is to have all of your SOPs look and read the same way, for consistency. However, it is important to distinctly describe the different types of processes in each area of your business. This can be one of the more challenging aspects of writing SOPs. It’s recommended to have at least two templates to review and comment on. Collectively, those writing the SOPs and those enforcing the SOPs must all agree on format and SOP Template. Montrium has developed a set of standard IT SOP Templates for organizations operating within regulated industries. Pre-made SOP templates that are based on industry standards provide organizations with a solid foundation for SOP creation, speeding up the time to developing documentation.

Establish a formal review process. Now you need to plan the process for reviewing the SOPs that you’re going to be creating. The review process should be outlined at the time your group is working on the SOP format and template. Create a formal review process that states who the SOP is sent to for approval once it is written. Also determine who has the final approval authority, usually Quality Assurance, and will ensure that processes are made effective and published within the organization’s quality system.

Determine how SOPs will be accessed. Finally, you need to determine how the SOPs will be provided to employees. Will everyone have access to a paper copy? Or will you be providing access to the procedures via a document management application (if you’re a Montrium customer, you may be aware of our Document Management software for managing SOPs, called SOP Connect). It’s also important at this point to determine who will be able to access these SOPs.

Now that you’ve defined your process for SOP Management, it’s time to look at how you’ll collect the information to write the Standard Operating Procedures.

STEP 3 – Collect information for the content of your SOP

Before you begin collecting information, it’s important to outline how you’ll do this.

Identify the subject matter experts you’ll need to get information from. One of the most common and effective ways to collect this information is scheduling interviews with the subject matter experts (SMEs). However, be sure to check before you begin the interviews with your SMEs to see if they already have documentation on a process.

Check for documentation that may already be available. Often a well-organized department will have some documented processes. If you can take this information and put it into your SOP template before the meeting it provides an added bonus to the exercise and can speed up information gathering. As you can imagine people tend to freeze up when asked how they do their job, so laying out this information ahead of time will give the interviewee an opportunity to get into the right frame of mind.

Begin interviewing your SMEs. With your SOP template in place, and any information already available in check you’re ready to begin the interviews. Interviewing subject matter experts who perform the process being documented is the best way to understand the process. Asking managers to describe a process that they don’t often perform could lead to misinformation or missing information. It’s important to understand that the people who actually do the work, know the process the best.

The best way to complete this task is to have each manager talk with their teams in order to create a list of potential SOPs. Then, organize time for your management team to meet to review the lists keeping in mind that not all processes need to be formalized only those where there is a clear business requirement or need for standardization. Once the processes to move forward have been identified, the management group must continue their assessment to identify redundancies or if there are any SOPs that need to be linked when departments are undertaking the same or similar processes. However, this master list will not be your final list.

As you write SOPs, you’ll find you may be able to combine some processes while others may need to be split up into different SOPs. The main function of this list is to give you a necessary starting point.

If you’re struggling to develop this list, go on over to our list of essential IT SOPs. This will provide you with somewhere to get started.

Expert tip: It’s important to note that during this first step, you may be tempted to create SOPs for every process in your organization. This isn’t the goal here. As you will be held to the process you define through auditing and vendor assessments it’s best not to select processes that you foresee undergoing change in the future. What you don’t want to be doing is updating you’re SOPs every 2 weeks, as this really defeats the entire exercise of making your team more efficient. 

STEP 4 – Write, review and publish your SOP

Begin WRITING the first draft of the SOP. Once you’ve completed the steps in the SOP creation process and have developed your SOP Template you’re ready to actually write the SOP, adding all of the information into the template during and after the meeting. By doing this you’ll quickly see gaps in the information and can follow up with the SME as soon as possible. Once the SOP draft is completed and you and the interviewee feel comfortable that the procedure is complete and thorough; it’s time for the SOP to be reviewed.

REVIEW the drafted SOP for completeness and accuracy. The review process can become cumbersome if many people are required to review and approve the Standard Operating Procedure before it’s published. If possible, try and develop a manageable and achievable review process to facilitate the completion of this phase. In most organizations, a 3-tiered approach is adopted to appropriately review the document.

  • 1. Review with subject matter experts. Starting with the subject matter experts will enable you to look over the SOP one last time with the process expert and confirm the information is accurate.
  • 2. Obtain input from management. Once the SOP has been reviewed by the SME, it’s time for his or her superior or upper management to review for their approval.
  • 3. Submit to the Quality Assurance Group. Finally, provide the SOP to the quality assurance group at your organization. This individual will perform a final approval before publishing. At times, other groups may need to be brought in to review a specific SOP if the SOP directly impacts their department. As with anything else, when writing SOPs flexibility is key.

PUBLISH the SOP throughout your organization. Now that the review is complete, you’ll have to coordinate SOP publishing. Throughout the process, your organization has been discussing where and how SOPs will be distributed to employees once the SOPs are approved. Typically this is the responsibility of the quality assurance group and close liaison with the department manager for the SOP. This part of the process can be greatly facilitated by the use of an automated SOP Management system that manages document control. Much like Montrium’s SOP Connect application, with document control software SOPs can be distributed electronically and receipts of who and when SOPs were read can be captured automatically.

STEP 5 – Maintaining your SOP over time

Now that you’ve written your SOP and published it to the relevant individuals, it’s now time to set up some rules to periodically review the SOP for relevancy and accuracy as your business grows. The best way to ensure that this process is standardized and is completed properly is to document it. Yes, you thought right. An SOP for SOPs.

Keep your SOPs up to date. The best way to make SOPs useful is to keep them updated. Maintenance has the utmost importance. Be mindful that your organization has just spent a lot of time, energy and money on these documents. Without a periodic review of SOPs and regular updates, they can quickly become out-of-date which would be a complete waste of the time, energy and money investment that you and your team have made. To keep this from happening we recommend that most SOPs be reviewed at least every two years. Some SOPs may need to be reviewed on a more frequent basis, especially if the process they explain is updated or changes.

Facilitate the periodic review process. If your organization is large or engages in a variety of process-driven activities, your list of effective SOPs may grow significantly over time. If you’re managing SOPs in double or even triple figures (which isn’t out of the ordinary) you may find it difficult to track and manage the periodic review dates of each SOP. Most SOP management solutions will provide functionality that automatically tracks and notifies you of the periodic review dates of each of your controlled SOPs. Even if you’re only managing a handful of procedures, having this “set and forget” functionality can remove a lot of manual work over time.

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Original document, 5 Fundamental Steps to Creating Powerful Standard Operating Procedures
by Oliver PearceQuality.
Source: montrium.com
Adapted for Academy.Warriorrising

Standard Operating Procedures: Developing and Implementing

Standard Operating Procedures: Developing and Implementing

Steps to Developing and Implementing SOPs

The seven steps that you can take to develop and implement Standard Operating Procedures (SOPs).

  1. Planning: Think about the steps that are currently done to complete the process. How is it done? Why is it done that way? How will an SOP improve the process? How will you measure performance?
  2. First Draft: Make a detailed list of the steps in the order that they are done. This list is now a draft of the procedure.
  3. Internal Review: Get input from all workers who now perform the procedure. Give them your first draft but make sure they know that it will still change. Revise the procedure as necessary.
  4. External Review: Involve your technical advisors such as your veterinarian, nutritionist, or extension agent; they can give you advice about the best way to do each step. Revise the procedure as necessary.
  5. Testing: Test the procedure by doing each step exactly as it says. Have a person not familiar with the work follow the procedure. Revise as necessary.
  6. Posting: Make a final draft of the procedure and post in the workplace.
  7. Training: Train or re-train everyone as necessary to follow the procedure exactly.

Steps to Developing and Implementing SOPs

  • Involve workers: people support what they help create
  • Revise when needed, they should be living documents
  • Use clear, simple language
  • Post SOPs in the workplace, try using plastic sheet protectors
  • Get your SOPs laminated at a copy store
  • Use a graphic format
  • Make flowcharts for free, or use Microsoft's Powerpoint
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Original document, Standard Operating Procedures: Developing and Implementing
Source: PennState Extension
Adapted for Academy.Warriorrising

Developing An Operations Plan

Developing An Operations Plan: 5 Key Elements

Most organizations are familiar with strategic plans, outlining strategy over a three to five year period and establishing a stable long-term vision. But these same organizations often lack operations plans.

What is an operations plan? In short, it lays out the who, what, when, and how of your daily operations over the course of the next year. It is meant to define how human, financial, and physical resources will be allocated to achieve short-term goals that support your larger strategic objectives. On a day-to-day basis, your operations plan will answer questions like:

  • Who should be working on what?
  • How will we allocate resources on a given task?
  • What risks do we face at present?
  • How can we mitigate those risks?

Put simply, your operations plan is a manual for operating your organization – designed to ensure that you accomplish your goals. It’s a key piece of the puzzle for any goal-oriented team. So what steps can you take to develop a strong operations plan?

1) Start with your strategic plan.

Ultimately, an operation plan is a tool for carrying out your strategic plan. It’s important, then, to make sure that you have a strong strategic plan already in place, and that everyone involved in your efforts understands it. Without this guidance, writing an operations plan will be like trying to plan a vacation without knowing where you’re going.

If you can’t identify how an element of your operations plan helps you 

2) Focus on your most important goals.

There’s a simple rule when it comes to operations plans – the more complex they are, the less likely it is that a team will follow them successfully.

In order to avoid writing a tangled tome of a plan, focus on the goals that truly matter. Before you even set down to create your operations plan, break your strategic plan down into one-year objectives. Then determine the key initiatives that will help you achieve those goals. They might be:

  • New organizational structures
  • Quality control measures
  • Faster delivery times
  • More employee time spent on professional development

…along with many other possibilities. Choose between three and five initiatives that will drive success in your long-term goals, and then identify metrics that will help you measure your progress. These key performance indicators (or KPIs) will be among your most powerful tools for success.

3) Use leading – not lagging – indicators.

Your KPIs will play an important role in your operations plan’s success – so it’s critical to choose the right ones. The most effective metrics are leading indicators: predictive measures that show you what to expect in the future and allow you to adjust course accordingly. By contrast, lagging indicators show you that your progress is falling short only after it’s too late. 

If your goal is to reach a certain sales threshold, for example, sales meetings or calls-per-week might be a strong leading indicator. Based on your past experience, you may be able to calculate how many calls it takes, on average, to complete a sale. This will allow you to use calls to determine whether you’re on track to meet sales goals. If you were to simply measure sales, however, you wouldn’t know where you stood relative to goals and projections until you were already there.

4) Don’t develop your KPIs in a vacuum.

The KPIs you choose will guide the work of everyone in your organization for the next year. With this in mind, you should draw on a wide variety of perspectives within your team as you develop those KPIs.

If your organization is made up of 15 people or less, you may want to hold an annual planning session where everyone collaborates to craft the KPIs for the coming year. Larger organizations may wish to restrict participation to their leadership teams. In either case, the key is to include a range of perspectives in the planning process – but not so many that effective decision-making becomes difficult.

5) Communication is paramount.

At the beginning of the year, set aside time to share and discuss your KPIs with your entire organization. It’s essential for everyone to understand why you’ve chosen these specific metrics, why they matter, how they will help your organization achieve its goals, and what each individual’s role may be in working toward success.

The importance of buy-in and communication among your team is hard to overstate. Hold regular meetings – ideally weekly – to communicate organizational progress on your KPIs and discuss any issues that may have emerged. Whether through meetings, dashboards, or some other means, team members should be able to track their personal progress and performance on a weekly basis.

With a strong operations plan in place, your organization should have everything you need to tackle your priorities successfully – and ultimately achieve the goals that will drive your strategic vision.

An operations doesn’t necessarily include projects. It defines organizational structure, how different branches within a company run and what steps they’ll take to reach one-year goals that are in line with the strategic plan. Once the strategic and operations plans are in place, then you develop project plans that can help you achieve those specific goals.

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Original document, Developing An Operations Plan
Source:https:bigskyassociates.com
Adapted for Academy.Warriorrising

What Are Pro Forma Financial Statements? Insights, Examples, and How to Create Them

What Are Pro Forma Financial Statements? Insights, Examples, and How to Create Them

It would be nice to peer into the future. To take a gander at what’s coming down the pike, adjust accordingly, and knock business decision after business decision out of the park. And while pro forma financial statements don’t quite provide a crystal ball level of omniscience, they sure do come in handy when it’s time to look at a what-if scenario or two.

Want to know what a potential business combination might look like a year from now? There’s a pro forma for that. Or maybe you want to look backward and see where you’d be today if that combination occurred last year. That’s what makes pro formas – latin for “matter of form” – so powerful and, to that point, why we’re going to spend the next few minutes discussing their applications and how to create them.

What Are Pro Forma Financial Statements?

As we said, a pro forma statement is a what-if scenario. It’s a tool that business owners, decision-makers, stakeholders, investors, creditors, and others use to examine hypothetical conditions. They can look forward or backward, revealing insights that standard financial statements simply cannot provide.

Further, while there’s definitely a right way and a wrong way to format a pro forma ‒ just ask the good folks at the Securities and Exchange Commission, AICPA, and FASB ‒ the term pro forma could mean an income statement, cash flow statement, or balance sheet. In other words, the different types of pro forma statements are basically the same financials you’re already accustomed to, just using hypothetical data for future periods. So, as you’ll see once we discuss how to create pro formas in just a bit, they don’t require you to recreate the financial reporting wheel, at least in terms of format.

However, we only feel it right to issue a big ol’ caveat before we go any further. As you might’ve noticed, we’ve used the word hypothetical several times already. And while pro formas can be enormously helpful in looking at different financial models based on various assumptions, they’re still – you guessed it – hypothetical.

Therefore, to paraphrase Merriam-Webster, pro formas involve or are based on a suggested idea or theory. Put another way, they use information that can vary substantially from actual data. So while pro formas are fantastic for looking at events from different angles, never take them as gospel, only well-informed conjecture.

When to Use Pro Forma Financial Statements

Now that we understand what a pro forma is and why they’re so uniquely insightful, let’s zoom in on how companies can use them.

Business Planning & Modeling

It’s helpful for FP&A to provide business leaders with side-by-side comparisons based on different assumptions, better informing the entire decision-making process. If, for instance, management is deciding between two separate proposals or business plans, they can use pro forma statements for each scenario and see which might serve their goals and vision best.

Further, the mere act of creating the pro forma statements for different scenarios is a useful exercise on its own, letting the decision-makers:

  • Identify the different assumptions driving each of the scenarios
  • Create sales and budget projections for each
  • Collect the results in P&L projections
  • Use the data to generate cash flow projections
  • Compare the resulting pro forma balance sheets
  • Gauge the effectiveness of each scenario against industry benchmarks using financial ratio analysis

In a sense, pro forma financial statements allow management to A/B test different strategies without any real-world impact. Using historical financial statements and a veritable cornucopia of assumptions, pro formas let you look at worst-case scenarios, best-case financial results, and everything in between, ultimately lending your business decisions more precision and confidence.

Gauge the Impact of Financial Decisions

Businesses commonly use pro forma statements to project the impact of a significant event or initiative, maybe a business combination, new line of credit, revamped accounts receivable processes, or possible restructuring costs. Harkening back to the previous section, a company can use a pro forma income statement, balance sheet, and cash-flow statement to project how these events might affect its financial position.

In this case, pro forma statements are like dipping your toe into the water before diving into the pool. If the water feels too cold – the pro forma financial projections and expected results aren’t favorable – it’s probably not a great idea to take a dip. But if the water is to your liking, you might benefit from a nice swim.

Financial Reporting

Of course, pro forma financial information isn’t just useful for internal purposes. Companies also use pro formas in external reports for stockholders, creditors, and potential investors. Publicly traded companies must include pro forma statements with any SEC filing, registration statements, or proxy statements. This only makes sense given the stockholders’ need to understand the impact of significant changes – relative to the company’s financial statements – that have either already occurred or will occur. Such changes might include:

  • An updated estimate on the economic life and net residual value of an asset
  • An updated estimate on the economic life and net residual value of an asset
  • A business combination from an acquisition, disposition, investment, or combined interests of two or more existing business lines
  • Correcting errors made in previously filed reports

Also, it’s important to remember the SEC, AICPA, and FASB have specific guidelines regarding the form, content, and necessity of pro forma financials under particular circumstances. Therefore, whatever prompts the need for them, you must adhere to any mandatory guidelines involved. For instance, SOX regulations state that a company must file a set of statements that conform to GAAP (generally accepted accounting principles) in conjunction with any pro formas to avoid giving the public a false impression of a company’s actual financial status.

Creating Pro Forma Statements

We’re going to take you through the steps necessary to create a basic full-year pro forma projection using an income statement, cash flow statement, and balance sheet. However, we’re lobbing another caveat your way – take our walk-throughs with a grain of salt since they’re only a glimpse into the basic pro forma process.

In other words, if you’re trying to attract investment capital or have an M&A transaction on your mind, you’ll want to use something more detailed and tailored for the purpose. Fortunately, you already happen to know a team of experts that can do just that for you. Wink, wink.

Pro Forma Income Statement

Let’s begin with the income statement, using a percent of sales forecast to keep everything straightforward. Start with an income statement from your most recent fiscal year and identify which items you’ll adjust for the projection.

As a slight aside, for more in-depth insights on pro forma adjustments as well as some handy best practices and examples, we urge you to look at our Ultimate Guide to Pro Forma Statements. For these walk-throughs, however, we’re assuming you’ve already looked over the different events and scenarios that can prompt pro forma adjustments.

Anyhoo, back to our regular programming. Now that you have your income statement in hand and adjustments on the ready, it’s time to begin the pro forma calculations. These should look incredibly familiar since it’s the same process you use when creating your typical income statements. The same holds true for the cash flow statement and balance sheet.

  • Gross profit: Take your expected revenue adjustments – i.e., price changes, new product lines & customers, promotional offers – and inflate them by the expected amount. Do the same with the cost of goods sold (COGS) to arrive at your pro forma gross profit.
  • Total operating expenses: Look through every line item and identify what costs you will cut in the following year. Make those cuts and then inflate your expenses by your projected rate for your pro forma total operating expenses.
  • Net income before taxes: Net your gross profit and total operating expenses
  • Taxes: Multiply your estimated tax rate by your net income
  • Net income after taxes: Subtract your tax bill from your net income before taxes to arrive at your pro forma profit after taxes.

Since we used a sales-driven projection, other variables like operating expenses, depreciation & amortization, and interest expense were unaffected by our pro forma adjustments. This won’t necessarily be the case in a real-world application.

Pro Forma Balance Sheet

Given the relationship between your income statement and balance sheet, you’ll want to create the pro formas for each in conjunction with one another, using the following steps to generate your pro forma balance sheet:

  • Transfer the change in retained earnings from your hot-off-the-presses pro forma income statement to the balance sheet.
  • Identify adjustments to your current assets and liabilities that will vary according to the sales variance used in the projection.
  • Use the usual suspects – total assets, total liabilities, owner's equity – to complete the balance sheet.
  • Net income after taxes: Subtract your tax bill from your net income before taxes to arrive at your pro forma profit after taxes.

Remember, what distinguishes these pro forma statements from your standard financials are the adjustments, not the calculations or even the format. Certain regulatory bodies and scenarios will require specific information but, from a foundational perspective, the framework for each is essentially the same as what you already use when preparing your financials.

Pro Forma Cash Flow Statement

Finally, with the pro forma income statement and balance sheet complete, we can now knock out the cash flow statement.

  • Start with your cash-on-hand, then add all cash receipts like sales, loans, cash injections, interest income, and others.
  • List your outgoing cash payments like cost of sales, salaries, supplies, etc.
  • Add up your operating expenses as well as any other expenses, including cash disbursements to owners, interest expense, income taxes, etc.
  • Calculate your total cash payments, net cash change, and ending cash position. Once again, this is the same process you follow for your normal cash flow statement.

Putting Them Altogether

Now that you’ve done the brunt of the heavy lifting, you’ll want to make sure you’ve correctly linked the data between the pro formas. Double check you’ve:

  • Added net income from the pro forma income statement to the accompanying balance sheet and statement of cash flows.
  • Added depreciation back to capital expenditure on the cash flow statement, which then feeds PP&E on the balance sheet.
  • Included interest from financing on the income statement since financing activity affects the balance sheet and cash.
  • Correctly calculated your balance sheet's closing cash balance – the sum of the previous time period's closing cash and the current period's cash from operations, financing activities, and investing.

Other Pro Forma Scenarios

As we said earlier, pro forma statements are instrumental, allowing a company to look at the potential impact of a proposed transaction or investment capital. In the case of a business combination, for instance, you can use a pro forma statement to combine the financial reports of the two companies to calculate the net acquisition costs, as seen in the following:

Alternatively, when you want to demonstrate the impact of different capital investment amounts, you can create multiple pro formas so a potential investor can see the varying effects on, as an example, the pro forma balance sheet.

Our point is, pro formas aren’t a one-trick pony. They have multiple uses for multiple scenarios, ranging from sales growth projections and risk analysis to more intricate M&A or investment purposes. Unfortunately, most organizations don’t have a fleet of battle-tested CPAs to fully leverage pro formas, especially startups and small businesses. Therefore, we again recommend checking out our Ultimate Guide to Pro Forma Financial Statements, where you’ll find even deeper insights and best practices. And just remember – if it all still seems a bit much, Embark is always around to swoop in and save the day. It’s what we do.

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Original document, What Are Pro Forma Financial Statements? Insights, Examples, and How to Create Them
Source:https: embark
Adapted for Academy.Warriorrising