Developing a Business Plan

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Developing a Business Plan

• Robert W. Littke, Ph.D.
• President and C.E.O.
• Senior Services, Inc.
• 918 Jasper Street
• Kalamazoo, Michigan 49001
• 269-382-0515
• www.SeniorServices1.org
• RLittke_at_seniorservices1.org

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Why do I need a Business Plan?

• A business plan
• Sets a course, builds a bridge
• Shows How you are going to get from here to
  there
• Answers your critics questions
• Alleviates fears
• Educates
• Your Community
• Your Staff
• Your Clients and Stakeholders
• Your Funders
• Answers the tough questions
• Shows data to support the success of the plan

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But Im not an MBA!

• You dont need to be. Most Business Plans are
  written by people who have never done one before.
• There is no universal format for a business plan
• Just like developing a budget you are putting
  down on paper your best estimate
• Just like a budget, once you begin using it you
  will have time to modify it as issues arise.

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Lets Begin An Initial Concept for a Product or
Service

• Steven Covey, Begin with the end in mind
• Who is your audience (Target Market)?
• What are their needs?
• What is your Niche?
• Why would someone purchase from your organization?

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Identify - What is your Niche?

• Definition of Niche A special area of demand
  for a product or service
• Niche Examples
• Low Cost Home Delivered Meals,
• Special Diets that help control medical issues
  (Low Sodium for Cardiac Patients, Controlled
  Carbohydrates for Diabetics)
• Those with an ability to pay (private pay) for
  the service or product

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Evaluate - What is the need?

• Is there a clear need and, a market for your
  product of services?
• Is there evidence that clients, customers,
  stakeholders would be willing to pay for your
  service or product
• (Evidence can include client surveys, staff
  input, satisfaction surveys, community needs
  studies, feasibility studies, etc.)

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Now Determine what your product or service is

• Now that you have identified the NEED and your
  NICHE, what is your solution/product?
• Begin with the end in mind. What exactly do
  you want to offer?
• Create your product (You will refine and
  modify it later).

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Exercise 1 Identify your Product or Service

• Take a few minutes and write down your ideas
  about a possible product or service based on what
  we have just discussed
• Remember
• Who is your audience
• What are their needs
• What is your Niche
• For this exercise you will ONLY identify your
  product or service. Later we will go into more
  detail about the product or service.
• Once you complete this task, this is the start
  of your Executive Summary

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Could you easily identify your product or service?

• Dont be overly concerned
• This is a new concept to many people
• Open yourself up to a new audiencethose with the
  ability to pay
• If nothing is readily apparent, begin asking
  staff and others to identify un-met needs from
  this population

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Exercise 2Develop a Company Summary

• Keep it concise. One paragraph should do.
• Tell us about your company and why it is
  positioned to provide your proposed product or
  service.
• Once you complete this task, consider it the
  beginning of your Company Summary

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Exercise 3Write your Service Description

• This is where you give more details about your
  product or service.
• Flush out the details here. Allow yourself to
  freely jot down all the ideas that come to mind
• List as many details as you can that describe the
  details of your idea and how you will offer your
  product or service.
• Remember that this is your opportunity to fully
  describe your product or service.
• This will become your Service Description

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Exercise 4 Develop your Market Analysis

• Take a few minutes to write down your thoughts
  about
• Other Industry Participants
• Your Direct Competition
• Buying Patterns
• Identify why your organization wants to compete
  with others providing the service.
• Once completed, this will become the Market
  Analysis portion of your plan.

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Determining your Service or Product Cost

• Critical to developing a fee structure is
  determining your true FULL cost.
• Begin with a definition of a unit of service
  (One Home Delivered Meal consisting of 3 ounces
  of protein, etc. or, One hour of in-home care,
  etc.)
• Include all costs (Staffing, raw product,
  preparation, packaging, delivery, overhead, etc.)

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Determining your Serviceor Product Cost

• Use in-house accounting expertise in the
  development of your fee structure
• Banks and CPA firms will often loan you an
  executive to develop your plan
• Think about EVERY cost and all overhead
  (Insurance, utility costs, equipment, staffing,
  advertising, marketing, in-direct costs, etc.)

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Determining your Service or Product CostService
Delivery Requirements

• Consider the minimums necessary to provide your
  goods or services
• Examples
• Home Care Will you provide services for less
  than two hours, etc.?
• Home Delivered Meals How many meals will you
  consider as a minimum? (5 per week, 20 per
  month?)

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Determining your Service or Product costEvaluate
your Market

• Begin your market analysis by checking on your
  (potential) competition
• Why are you competing against them?
• What do they charge?
• Use staff to help determine what your competition
  charges. What their service is.
• Use Secret Shopper approach if needed

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Determine your Service or Product CostDevelop
your Service Standards

• Much like Minimum Operating Standards
• What exactly will your product be?
• Meals Begin with a Menu
• In-Home Services Identify your service
  standards using established standards
• Dont re-invent the wheel (Starting with what you
  already have is OK Such as Meals-On-Wheels,
  etc.)

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Exercise 5Determine the FULL cost of your
Product or Service

• Take a few minutes to write down everything that
  must go in to determining your full cost
• Hints What will be One Unit of Service
• What are the costs related to developing and
  providing this services
• Who will assist you in determining the FULL Cost
  (Accountants, CPAs, Staff)
• Once you have completed this assignment, you
  will have determined your full cost, a necessary
  part of your financial plan (described later)

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Determine your Capacity

• Set realistic Start Up goals
• Include growth projections and milestones
• Make sure you identify expectations of Who is
  responsible for monitoring milestones
• Plan for slow-steady growth
• Identify your break-even point
• Evaluate patterns in your industry and area
• Identify the capacity obstacles and your solution
  to overcome them.

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Developing a Rate (Fee) Structure.

• You now have the necessary information to set
  your fee structure or Rates
• Base your fee (Rates) on the full delivered cost
  of your product or service
• Include a Profit Margin Surplus

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What if there is no Profit Margin?

• Dont proceed without resolving this!
• No MarginNo Mission
• Call in outside help if necessary to re-evaluate
  your calculations
• Re-examine your costs to determine accuracy. Look
  for savings and/or efficiencies
• If there is no reasonable expectation that a
  profit can be generated (over time), do not
  proceed.

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What is a Profit (Surplus)?

• The positive gain from an investment or business
  operation after subtracting for all expenses
• Profit margin. A company's profit margin is
  derived by dividing its net earnings, by its
  gross earnings minus certain expenses. Profit
  margin is a way of measuring how well a company
  is doing, regardless of size.

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Exercise 6 - Your Fee StructureSetting your
Rate(s)

• While you cannot identify your rate at this time,
  take a moment to jot down what you think your
  rate might be.
• For many, this will be the first time they have
  ever evaluated their true cost and considered
  what a unit of service should be sold for.
• Once you have completed this assignment, you will
  have a critical component to your plan, the
  Rate(s) that you will sell your product or
  service for.

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Exercise 7 - StrategiesDevelop your
Implementation and Monitoring Strategies

• Begin jotting down your ideas about start-up
  (Implementation) timelines, sales strategies and
  measurable milestones.
• Explain your organizations Gaps and how you
  will address them (management, staffing,
  financial constraints, service limitations, etc.)
• Once complete, this section will become the
  Implementation and Monitoring Strategies section
  of your plan

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Exercise 8 Develop your Financial Plan

• This will take time, data and additional help.
• Begin by writing your thoughts about How you will
  develop the Financial Plan, Who you will utilize
  and What you will include.
• Once complete, this will become your Financial
  Plan.

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Your Educational Plan

• Here is where you
• Identify the issues that need to be addressed,
• Identify the obstacles that must be recognized
  and responded to,
• Identify all those who you need to educate about
  your proposal,
• Develop a plan to introduce your idea and educate
  those identified (above),
• Identify those who are responsible to complete
  this plan and who will conduct educational
  sessions, etc.

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Exercise 9 Develop your Educational Plan

• Take a few minutes and jot down your ideas on
  how you will
• Identify the issues and obstacles your plan needs
  to address
• Identify your responses/solutions to the issues
  and obstacles
• Identify who you will need to educate (funders,
  clients, board members)
• Begin to draft your educational plan
• Once completed, this will become your Educational
  Plan.

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Other tools you can use

• Consider getting a bank or accounting firm to
  loan you one of their staff
• Local colleges and universities will often loan
  students working on business degrees (consider an
  internship)
• Software is available to assist in developing
  your plan, creating the document, printing charts
  and graphs.

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You now have the components of your Business Plan

• Executive Summary
• Company Summary
• Service Description
• Market Analysis
• Service or Product Cost
• Rate(s)
• Strategies (Implementation and Monitoring)
• Financial Plan
• Educational Plan
• Marketing Plan (Will be covered in the following
  session)

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Bringing it all together

• Exercises 1 10 are the core of your new
  business plan.
• Take these documents and begin to develop your
  Business Plan.
• Share them with trusted others
• The wounds of a friend are better than the
  kisses of an enemy
• Keep refining your proposal (Plan) and answer the
  questions that come up.
• When you are comfortable with the final product
  roll it out!

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Some Final Thoughts

• Remember that there is no perfect plan (keep
  refining it, based on what you learn)
• Not everyone will agree with your plan (This is
  common, learn to accept criticism and learn from
  the input)
• Leadership requires a bold spirit and willingness
  to try new things
• Share with others what you have learned and teach
  them to do what you do (Plant Seeds)

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Business Plan Software

• Advantages
• Step by step planning
• Easy to use
• Asks all the relevant questions
• Formats and Prints the final document

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NEXT - The Marketing Plan

• This Critical Component will be covered in the
  next workshop
• Your Marketing Plan will become the tenth and
  final component to your Business Plan.

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Question and Answer Time

• Contact Information
• Robert W. Littke, Ph.D.
• President and C.E.O.
• Senior Services, Inc.
• 918 Jasper Street
• Kalamazoo, Michigan 49001
• 269-382-0515
• www.SeniorServices1.org
• Rlittke_at_SeniorServices1.org

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Developing a Marketing Plan

• Robert W. Littke, Ph.D.
• Senior Services, Inc.

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DEVELOPING YOUR MARKETING PLAN

• What is Marketing?
• Isnt Marketing just another word for
  Advertising?
• I have a good idea how will Marketing help?

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What is Marketing?

• What is Marketing? Isnt it just Advertising?
• E. Jerome McCarthy (Harvard Business School)
  Marketing is a mix of four elements Product,
  Pricing, Placement and Promotion
• Remember the Four Ps

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The four Ps - 1 PRODUCT

• The Product aspect of your Marketing Plan
  involves the specifications of the actual goods
  or services.
• It also clearly specifies who your clients
  (customers) are.
• You must identify ALL your customers (elderly,
  disabled, full pay, family members, third party,
  etc.)

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The four Ps - 2 PRICING

• This refers to the process where you set a price
  (or Rates) for your product or service.
• Earlier you developed your pricing schedule.
• Now Market your pricing schedule
• Consider if you should market your pricing
  Up-Front or, at Point-Of-Sale.

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The four Ps - 3 PROMOTION

• Promotion can take many forms
• Advertising
• Publicity
• Direct Marketing
• Target Marketing
• Promotional costs should be in your budget (Staff
  time should be included)

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The four Ps - 4 PLACEMENT

• Placement refers to how your product of service
  gets to the customer.
• Examples of placement include
• Selling it on-line
• The segment of population you will market to
• The geographic area you will reach out to
• The specific areas or ways in which you will
  place your product or service (Examples In
  publications that are viewed by those needing
  your service or, in materials you develop for
  Hospital Discharge Planners)

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Branding

• Dont overlook Branding
• A Brand is a term, product or service name,
  design, symbol or some other feature that
  distinguishes your offering and identifying it
  with your organization.
• When you create a Brandyou create a reference
  to a product or service.

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Exercise 10Begin your Marketing Plan

• Based on what you just heard, take a few minutes
  to jot down your thoughts on how the four Ps
  will be addressed by your Marketing Plan
• Product
• Pricing
• Promotion
• Placement

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Does it really work?

• Where will your organization be without it in 5
  years?
• What will traditional funding look like in 5
  years?
• The Financial Impact on Senior Services

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Food For All

• Home Delivered Meals
• Special Diets
• No Age Restrictions

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ASSIST Program

• ASSIST is not a service in itself.
• ASSIST is the Marketing Strategy for all of our
  services to those with an ability to pay.
• Popular with family members who are at-a-distance

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Caregiver Resource Center

• Information and Assistance to support caregivers
• Case management is popular with family members
  at-a-distance
• Eldercare Services Employee Benefit

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Senior Services, Inc.

• Senior Services, Inc.
• The largest, most comprehensive organization of
  its kind in America.

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Question and Answer Time

• Contact Information
• Robert W. Littke, Ph.D.
• President and C.E.O.
• Senior Services, Inc.
• 918 Jasper Street
• Kalamazoo, Michigan 49001
• Phone [phone]
• www.SeniorServices1.org
• Rlittke_at_SeniorServices1.org