Fundamentally, the “rules” for launching and growing a strong and profitable business impress upon the entrepreneur the need for a strategic plan. The business strategic plan starts with vision for the business, target for 5 year milestone, develops a road map to get there, and then identifies the resources – people, expertise, & capital – needed to get there. And as it gets more detailed from 5 years down to the 90 day plan, it becomes much more functional for the team to implement. Within 90 days, you will know if something is working or needs to be modified to fit a shift in the market or to respond to new data that wasn’t available when the original decisions of strategy were made.
Recently, entrepreneurs and investors have been realizing that risk is greater with companies that don’t have a plan for how they will generate revenue and even more so when a concept is developed that doesn’t have the benefit of having been validated by the market. This is the premise behind the “Lean Start UP Methodology”. Start up companies will grow organically at the very beginning and work interactively with their target market to ensure the product is something that their target customers will embrace and value enough to pay for. It is an iterative process that increases the odds of success.
In the Podcast “Business Strategies for Success – Attracting Capital & Customers” http://www.blogtalkradio.com/karen-rands/2014/09/23/business-strategies-for-success–attracting-capital-and-customers Paul Hoyt and Karen Rands explore the importance and differences between a Business Plan and a Business Strategic Plan. A business plan is more like a brochure to describe the business, where the strategic plan is a blueprint to be a road map for how the company will succeed in the marketplace. When looking at a company to consider for investment, the executive summary introduces you to the opportunity at a high level, the business plan provides more detail about the direction and potential, but the strategic plan will show how they plan to actually get that point of success. Often times the strategic plan is saved until due diligence starts.
Companies at different stages may have varying levels of completeness of a strategic plan. Start ups simply don’t know enough information to have a great detail in their strategic plan where as emerging growth companies with a history of performance leads to shifts or pivots in their strategy on how they need to adjust the plan to achieve the results they want and best utilize the capital they are raising. Regardless of the stage, the company should have some form of a strategic plan that shows how they will use the funds to ramp up staff, implement marketing plans, enhance operations, and increase sales.
The Lean Start up Methodology in effect creates a corporate environment that is living the market responsive strategic plan. Fundamentally it is an approach that embraces improvising, adapting and implementing – measure and repeat.
For more information about Paul Hoyt and his Beyond Business Services visit http://paulhoyt.com
For more information about Kugarand Capital Holdings and the educational programs for investors and the due diligence portal for emerging growth companies, visit http://kugarand.com