Business Description and Strategic Planning
Introduction
Congratulations! You are planning the start of your new business. In developing your business plan, you discover that you need to spend some time working on strategy development.
When talking to your commercial lender at the bank, you both uncover the need to have a strategy in place BEFORE you open so you can better allocate resources and time.
You have saved some money, but now you realize that you may need to obtain a bank loan for up to $100,000 to launch this venture. This strategic plan will help you organize your resources and time, and will allow you to better chart your activities so you can pay the bank back, as well as make some money for yourself!
One of the conditions for this assignment is that your company must be located within the United States and you must operate a legal business operation. However, you can consider international opportunities (exporting) if you so choose as part of your new strategic plan for your company.
Assignment Background – Theory
Many entrepreneurs, before they start their business, will create a business plan. Once the business launches, the business plan is the guiding document that helps direct activities and resources to operate the business. Often, the entrepreneur will think,
“When in doubt – consult the business plan.” A good business plan will be scrutinized and edited as needed. In reality, the business plan should be a living, breathing document.
A business plan, in short, is a document that explains what the entrepreneur wants to do by describing the opportunity, the products and services that the new venture will provide to the target market, as well as the set of activities that they will do to capture that opportunity.
The business plan describes the business venture, marketing efforts, operations, financial projections, and management plan of the new venture.
For this project, you will be writing the strategic component of the business plan.
This strategy is a living breathing document that identifies what your company does and why it exists. It will identify short, mid, and long term goals and the tactics that the company will utilize to reach those goals. This business strategy will also help you identify core competencies within your organization.
Reality Check
Many businesses at conception will have some strategy identified. The hard reality however is that this strategy is rarely reviewed or even changed as time goes by.
In fact, it is not too uncommon to hear entrepreneurs complain about where their business is at when compared to their competitors. Yet, they rarely take the time to figure out their strategy. Small business owners seem to think that strategy or goals are just too risky or only intended for larger organizations.
As the startup business begins to grow, the entrepreneur is caught up in the daily activities and fails to fully appreciate how actions taken today (or not taken today) impact tomorrow. Entrepreneurs are too busy reacting to their external and internal environments to take a moment to figure out just where this company needs to go.
This is why a strategic plan is so critical for success in a small firm. Moreover, this is why it is so critical to review your strategy every six months.
This is where the project starts: You, the entrepreneur, need to create several parts of your venture’s strategic plan.
This project was created to reinforce and apply class objectives and competencies that you will learn in this class. You will be creating a strategic plan that considers Mission Statement, Tactical, Operational, and Strategic Goals, SWOT Analysis, and identifying Core Competencies.
Please be aware that this project will not completely address every aspect of a strategic plan – we simply cannot cover all of the materials and have a complete understanding of all of the variables at this point.
A complete strategic plan will incorporate environmental analysis, a more thorough competitive analysis, a comprehensive SWOT analysis, as well as other measures that compare existing operations to where you want the business to be in the future.
We cannot cover all of that material in this class. But I want you to be aware of these variables going into this project. What I want is for you to consider the variables that we cover in class in order to create part of a strategic plan for your fictitious company.
The Project
You are preparing to launch your business here in the United States. To better plan how to utilize resources and time, as well as to obtain a loan for up to $100,000 from a local bank, you need to create a strategic plan for your new venture.
You have set aside some time to write a strategic plan for your new venture. This strategic plan will help you plot activities and resources in order to help guild your activities over the next few years. As stated earlier, this is your new business venture.
You will need to create operational, tactical, and strategic goals for your new firm. You will also need to create a SWOT analysis considering your goals, as well as define core competencies. For the purpose of this project, the $100,000 loan for your business plus your equity will be enough to launch this new venture.
If you feel that you need more, adopt this assignment as necessary. For example, if you need to purchase equipment and discover that the equipment alone will run you around $90,000 – you can adjust your loan amount for a higher dollar figure.
However, you will need to incorporate and figure that you will have a bank loan for up to $100,000. Money is an object – you cannot assume that you can go to a rich relative and they will just give you several million out of the goodness of their hearts.
That is not realistic – even if it is, the purpose of this exercise is to make you sweat a little as you try to figure out how to repay the bank and provide enough for you to continue the business and make a living.
You will be working on this plan over the next few weeks. You may have to utilize external resources to complete this project. Some of you already have a business and you wish to use it for this project and you want to use your personal experiences as a resource.
That’s fine – I want you to learn the importance of the strategic planning process and how this process can be used to direct and guide your company going forward.
I realize that you are creating a fictional plan for a fictional business – but this is where the creativity comes in. For this plan to make sense, you must answer all the parts of the assignment in this project for it to make sense.
For example, simply stating that you are not going to have any competitors will not be accepted. Of course, you will – you must think about who that might be and where they are located, prices charged by your competitors, and if they are a locally owned business or a franchise.
This assignment is worth 50 points and the assignment, as well as the grading rubric, is located under the “Assignments” folder.
Business Description and Strategic Planning
This project is similar to what you will need to do if you were to go to a bank and obtain a small business loan. You will need to identify your business name and then describe what it is that you plan on doing – as well as where your business is located.
You will also need to formalize your company’s strategy based on the purpose of why you exist. It is here where you will you perform a simple SWOT analysis and then based on this SWOT analysis; create strategic, tactical, and operational strategies to move your company forward in the future.
All of this flows from your company’s overall mission of why you exist. Once done, you will have a roadmap of where you want to go and then specific tactics, plans and goals on how your company will reach its future.
Complete the sections listed below and submit your completed work through Blackboard by Wednesday, March 27. If you have any questions about this assignment, please let me know.
There are ten parts to this project. It is also mandatory to answer these parts of the project using complete sentences and to utilize spell and grammar check before submitting your completed work.
Business Description and Strategic Planning
Assignment
1. Create the name of the business and identify where it is located.
2. What will your business offer? Be specific – list and describe the various products and services that you plan to offer. You create this from your own interests or from research that you do independently on your own.
3. Provide some basic industry information for the area that you are located.
? Who are your competitors and where are they located?
? What is the opportunity? Why are you staring this business?
? Why is this an opportunity that you want to pursue?
4. Who is your target market (who will purchase your product or service)? Be specific in your explanation.
5. What is the mission statement of your business? (Why do you exist? Why was the company started in the first place?)
6. Based on the mission statement and other information from above, complete a simple SWOT analysis. List at least three variables under each heading for full credit. Label each heading “Strength”, “Weakness”, “Opportunities”, and “Threats”. This exercise helps you create the goals and tactics to launch your new company.
The purpose is to get you familiar with the process and I get to see your thought process as you create your company’s strategic plan.
7. Based on your work above, what is your core competency that will separate you from your competitors and drive results for your business? Your SWOT analysis and your core competency will provide you a foundation on which to build your strategy (Questions 8 – 10).
8. Based on the above information, create one strategic goal that will direct your company for the next seven to ten years. The above information is where you are at today – this is your starting point. What do you want to accomplish in the next seven to ten years?
Do you want to be an innovative leader in this industry? Do you want to acquire your top two competitors? Do you want to branch out internationally? THINK BIG!
9. Based on your strategic goal from above, create two tactical goals that you need to accomplish in the next two to three years. The tactical goals will align with your strategic goal. You need to identify resources that you will need to acquire to reach these goals.
You may need to hire employees. You may need to acquire a rival firm. Whatever your strategic goal is, you need to create a tactical strategy to help you reach your long-term goal. Profitability is a good tactical goal.
10. Based on your strategic and tactical goals, create four operational goals that you need to accomplish within the next 12 months.
You need to specify two operational goals or plans per tactical goal. So, you will have two operational goals for every tactical goal.
Because you will have two tactical goals, you will be creating a total of four operational goals. You need to clearly communicate what you need to do in the short run to launch your company and to help meet your tactical and strategic goals.
Make sure that the reader of this strategic plan can understand how all your operational goals line up with your tactical and strategic goals. For example, you may want to increase sales in the next year. How will this be done and how will it be measured?
Remember, operational goals have a high level of detail. That is what I am expecting. Attracting repeat customers, entering profitable longer-term contracts, and learning operational efficiencies are good examples here.
** Remember that all your goals need to align and that what you are accomplishing in the next year needs to fit with what you want to accomplish in the next 2 – 3 years. What you want to accomplish over the next 2 – 3 years then needs to align with your overall strategic goal – what you want to accomplish in the next 7 – 10 years.
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