Everyone needs a business plan. Whether you are a professional, salesman, administrator, or clerical worker, whether you are a products business, services business, nonprofit organization or individual, you have to have a plan.
At one point in my career, I “retired” from the practice of law to be the Chief Financial Officer and General Counsel of a startup company. The company, Newsreal, Inc., was backed by none other than billionaire George Soros. Like many entrepreneurial minded people at the time, I chose to abandon a steady paying job for dream of a pot of gold at the end of the rainbow. My first week at the job was spent cleaning up books and immersing myself in the business. While the management team had great pedigrees and ideas on how to capitalize on the burgeoning Internet, it lacked a realistic business plan for the company. In addition to my regular duties, over the next 12 months I helped create a viable business model for the company and wrote a very comprehensive business plan.
You may not have the luxury of spending months or even weeks constructing a business plan for your new business. (Keep in mind our plan was designed to attract potential investment as well as grease the skids for a potential exit in the halcyon days of the technology bubble.) But, the plan must contain certain key elements.
At a minimum, your initial plan should consist of the following:
- Strategy and Tactics.
- Industry and Competitive Analysis
- Financial Forecasts.
Vision, Mission and Values
According to Society for Human Resource Management, a mission statement, a vision statement and a values statement each has its own distinct function in the business planning process.
“A mission statement explains the company’s (or department’s) reason for existence. It describes the company (or department), what it does and its overall intention. The mission statement supports the vision and serves to communicate purpose and direction to employees, customers, vendors and other stakeholders. The mission can change to reflect a company’s (or department’s) priorities and methods to accomplish its vision.
A vision statement describes the organization as it would appear in a future successful state. When developing a vision statement, try to answer this question: If the organization were to achieve all of its strategic goals, what would it look like 10 years from now? An effective vision statement is inspirational and aspirational. It creates a mental image of the future state that the organization wishes to achieve. A vision statement should challenge and inspire employees.
A values statement describes what the organization believes in and how it will behave. Not all organizations create or are able to uphold a values statement. In a values-led company, the values create a moral compass for the company and its employees. This compass guides decision-making and establishes a standard that actions can be assessed against. A values statement defines the deeply held beliefs and principles of the organizational culture. These core values are an internalized framework that is shared and acted on by leadership.”
Let me give you some examples of visions, mission and values that successful businesses have adopted:
Ratner Companies – One outstanding and successful family-owned company I’ve worked with in recent years is the Ratner Companies, led by dynamic CEO, Founder and Stylist, Dennis Ratner. Ratner Companies owns the value-priced hair salon chain known as Hair Cuttery® with nearly 800 locations on the East Coast, New England, in the Chicago area and in Florida. The companies also operate the more upscale Bubbles, Salon Cielo and Colorworks salons.
At Ratner Companies, their stated vision is “to be a company of happy people. And we believe that when our Associates are happy, our clients are delighted.” It’s all about wowing and delighting employees and clients.
Their mission statement reads like this: “We are the “People Company” of the beauty industry, committed to achieving extraordinary results through our people by living within our values and financial resources so that we WOW and delight our Associates and clients and have fun while we’re doing it.”
The company’s values focus on self-confidence, building relationships, teamwork, quality of life, integrity, enhanced direct communications, and accountability. (For more information on the company, its vision, mission statement, and values, visit www.ratnerco.com.
The vision is pithy and poignant. The mission statement succinctly expands upon the vision and clearly explains the overall focus of the company. The company’s business plan and execution reflect its vision, mission statement and values. It’s goals and strategic plan are driven by these core beliefs.
Here’s another excellent example of a mission statement by a company dedicated to its mission:
Pal’s Sudden Service – As reported in Burger Business, “Pal’s Sudden Service is almost unknown nationally but loved with cult-like ardor in its Tennessee/Virginia territory. Its 23 funky, boxy double-drive-thru restaurants tell you that Pal’s isn’t like other QSRs, which has been a point of pride since Pal Barger founded it in 1956. The Kingsport, Tenn.-based chain’s menu is limited to a few burgers, hot dogs, sandwiches, breakfast, fries and drinks but its nearly $2 million average unit sales tops every QSR in its territory except Big Mac.” The efficiency of its systems and effectiveness of its training programs are such that Pal’s in 2001 was the first restaurant company of any size to win the Malcolm Baldrige National Quality Award, recognizing business excellence, innovation and leadership. Pal’s created the Business Excellence Institute (BEI) as a way to share best business practices with others. I had the good fortune of attending the BEI in 2013, and visiting one Pal’s location, and can attest to the uniqueness and success of the company and its operations. Here is the PAL’s vision and mission statement from its web site at http://www.palsweb.com/#home:
“Pal Barger created his vision of a fast food chain built on quality, speed of service and delighting every customer in 1956. Today, his vision lives in an organization that is recognized as the leading fast food chain in America based on these metrics. Pal’s Sudden Service outperforms all national burger chains in customer satisfaction, health scores, customer retention, order accuracy, drive through wait times and profitability. The company employs more than 900 people who are engaged in fulfilling Pal Barger’s vision of delighting every customer – one transaction at a time.” The company’s mission simply is “to delight our customers.”
In this case, the vision is more thoughtfully articulated and the mission is short and to the point.
(This is the first excerpt from Mr. Zell’s forthcoming book, “Your Blueprint for Wealth – Business Success(ion) Planning.”)