The Extended Enterprise in Action

This paper is a companion to "Widening Your Sphere of Influence: An Introduction to the Extended Enterprise," which laid out in detail the concept of the Extended Enterprise platform, its key elements, features and general benefits. Building on that foundation, the purpose of this paper is to demonstrate how the Extended Enterprise platform can help specific verticals to promote and sell their products to external audiences. In particular, it investigates the value of the Extended Enterprise solution in financial services/insurance, government, retail, manufacturing, healthcare and associations. Feel free to read ahead to the section that is most applicable to your own organization.

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Financial Services and Insurance

ENTERPRISE

The regulatory arena has expanded considerably over the past decade, placing an enormous compliance burden on the insurance and financial services industries. Meeting Sarbanes-Oxley regulatory requirements alone involves a tremendous amount of management complexity. The result is a communication tangle spanning the various employee categories across multiple locations. And that's only one of many regulations affecting this sector.

Now, factor in the strategic management of workforce knowledge in the financial and insurance markets. In many organizations, this comprises a central headquarters and perhaps a few regional offices servicing a large external network of remote offices, brokerages, agents, financial advisors and customers. In such an environment, it is critical to consistently deliver a superior managed service in order to achieve profitable growth.

Traditional Learning Management Systems (LMS) are aimed mainly at head office personnel. They provide great value in terms of managing performance, aligning goals, facilitating training and development, and proactively managing succession planning. However, their limitations are exposed when it comes to federating knowledge and information to external reps, tracking the status of development initiatives and verifying compliance to ongoing programs.

Armed with the Extended Enterprise solution, insurance companies and financial services organizations can gain control over their far-reaching networks of brokers, dealers, advisors and customers. Knowledge and information can be made available to them online as an effective means of managing certifications and upcoming expirations to avoid lapses in licensing. Additionally, workforce productivity can be maximized by accelerating delivery of knowledge on key skills, policies and mandated instruction.

A well-designed Extended Enterprise solution can often pay for itself or even directly generate revenue. In a financial services organization, for example, training puts your company's message and value proposition front and center. While brokers may have dozens of packages to choose from, the addition of a relevant knowledge nugget or the right training element (either free or available for a small fee) as a value-add for the broker or potential customers can tempt many to select you as opposed to one of many alternative vendors. By aligning a simple content item to a sales or business goal, customer retention and acquisition can be boosted.

Similarly, existing customers can be kept up to date on the latest offerings in an interactive manner. They can be encouraged to view short pieces of online content to increase their knowledge of a specific field and to keep them actively involved with your company.

Remote employees and independent agents can also be comprehensively serviced online without the need to mail a piece of information, wait for knowledge transfer to occur in a non-structured format or bring everyone to the head office once a year for a week-long course. In those cases where a trip to headquarters is desired, the Extended Enterprise solution can greatly reduce costs by slashing the annual stay to a day or two with the balance of the knowledge and information delivered online.

These are just a few of the ways that the Extended Enterprise solution can enhance the value of human capital. As everything is managed within one system, it is easy to track compliance and certification. Training programs can be assessed against organizational programs at a global, national, regional and individual level while promotional activities intended to generate new business can be evaluated against measurable results.

Organizations already taking advantage of the Extended Enterprise solution include BankAtlantic, First Niagara Financial Group, PHH Mortgage, Wellmark Blue Cross Blue Shield and Utica National Insurance Group.

Manufacturing

Manufacturers, of course, have unique business challenges. They must compete in a global economy and find lean and cost-effective processes to bring their products to market and manage their supply chains. At the same time, they must deal with corporate policies and strategies, and a seemingly endless stream of government regulations. To make matters worse, many manufacturers have to compete in a retail sector overrun by competing brands, each one attempting to capture the hearts and minds of retail sales staff. As these staff work for the retailers and not the manufacturers, how do you ensure your message is front and center and your goods are the ones they instinctively reach for?

The answer lies in the Extended Enterprise solution. Providing a platform for the creation of a sustainable and scalable knowledge network, such a network helps manufacturers to efficiently sell and support their products. How? Let's take a look at business as usual.

Each manufacturer has probably prepared sales literature to ship out to all retail outlets. While the intention is to have sales reps read, understand and appreciate the nuances of specific products, what happens to these materials when they are distributed is anyone's guess. Some are diligently handed out to employees who then sit down and study them. Others are distributed but merely glanced at. In a few cases, the literature sits in a storeroom never to see the light of day.

Some companies attempt to circumvent this outcome by a variety of means. They post materials online and hope to entice staff to view them. They sometimes send their own personnel out into the field to train sales reps on the peculiarities and fine points of their product lines. They perhaps send out newsletters and e-mail in an attempt to engage external audiences. The issue, though, is that competitors are conducting similar efforts. Without the Extended Enterprise solution, it is impossible to gauge success and bring your goods to the front of the line.

The best way to boost brand image in this situation is to initiate an Extended Enterprise program. Captivating Webcasts and presentations can be made available online to rapidly take sales personnel through the key points of your pitch. They can be briefed on why your goods are superior. Further, progress can be tracked right down to how many reps have accessed or completed the content asset on a per store basis, how many have started, how far they have gotten, their feedback and even how this is related to sales performance in that area.

Consequently, programs can be adjusted to ensure maximum success through integration with incentive and award programs, using certifications to vest sales people in your offering, and providing a consistent and accurate message that can be evaluated for effectiveness. This ultimately leads to sales personnel at a retail level that will push your products instead of those of a rival. Why? Because you have gained mind-share.

Manufacturers already enjoying the benefits of the Extended Enterprise solution include Black & Decker, Harris Corporation, International Rectifier, United Technologies Corporation, ZLB Behring and Anixter International.

Healthcare

The medical world is probably one of the most dynamic sectors of the modern economy. Constant changes are the norm as new technologies, procedures, and compliance requirements are introduced. Combine this with the complexities and pressures of healthcare staffing shortages, a constant demand for cost containment and ongoing efforts at reform and you have an industry like no other.

What isn't so well appreciated, though, is the fact that many healthcare organizations typically service an area that consists of smaller clinics, outpatient facilities, field caregivers and other external workers whose livelihood is dependent upon the primary facility. Delivering knowledge and information to these individuals on health, safety, hygiene and organizational protocols can be a nightmare given the busy schedules of most of these personnel. As a result, the critical exchange of information often takes a back seat.

Enter the Extended Enterprise solution. Federating knowledge and information online allows doctors, nurses, technicians and support personnel in the field to work their way through the content they need during the small windows available to them. Whether it is a few minutes or a couple of hours, the Extended Enterprise solution keeps track of where each individual is at and makes it easy for them to return and complete their activity when time allows.

This is also important when it comes to continuing education and certification. Staff needs to put in a certain number of hours annually to maintain their accreditations and stay up to date. The Extended Enterprise solution facilitates such activities, often bypassing the need to transport individuals with skill sets in short supply to a seminar on the other coast or, worst-case scenario, another continent.

When it comes to regulations such as HIPAA, FDA, The Joint Commission, OSHA, and those of the EPA as well as state and local authorities, keeping track of compliance is a simple matter with the Extended Enterprise solution. All Web-based assets within the solution can be tracked for external staff progress and completion. This can be vital when it comes to defending the organization against legal actions - success or failure in court can depend upon being able to prove that one person completed specific requirements of a given program at a specific date.

Additionally, the Extended Enterprise solution is of great value in the area of customer acquisition and retention. Prospective patients, for instance, can view presentations online about the facility, their specific condition and available procedures to help them gain confidence in commencing treatment. Existing patients can be offered value-added information and knowledge on such topics as preventive medicine, or how diet and fitness can play a role in their recovery.

Healthcare customers currently taking advantage of the Extended Enterprise solution include HealthQuest, Kaiser Permanente, Sisters of Mercy Health System, SwedishAmerican Health System, US Oncology, Association of periOperative Registered Nurses and MedAssets, Inc.

Retail

Employers in the highly competitive retail sector are challenged to disperse knowledge and information to employees on a wide range of skills, including detailed product knowledge, how to sell, complaint handling, price products and services, objection handling and much more. To make it even more challenging, sales associates, clerks, floor managers, distributors and dealers comprise a geographically dispersed population, many of whom are not direct company employees. Nevertheless, how they represent your organization to customers directly impacts revenue and customer satisfaction. It takes the right methodology and system to maintain your brand image while improving business performance.

This is made difficult due to the high turnover rates experienced in the retail sector. Under these circumstances, it can be difficult to maintain any consistency of brand. That's where Extended Enterprise solution comes in. It provides the right vehicle for updates to product information, training, sales programs and service management information to those on the front lines.

Take the case of education about a new product line. Short online courses can be accessed by personnel as time permits and managers can keep track of everything to ensure everyone completes in a timely manner without impacting productivity and ensuring consistency of the message.

It gets even more interesting when you deal with more complex goods such as personal electronics. In many cases these goods are so sophisticated that the general consumer requires formal initiation to gain proficiency. One retailer, for instance, was experiencing a heavy rate of returns for its latest phone. Many customers complained that their products were faulty. Analysis showed almost all of them to be working correctly, and that customers simply didn't know how to utilize them. An Extended Enterprise solution was introduced to train sales associates on how to use the phones, quickly making them experts in its use.

When customers came into the store with the latest wave of returns, sales associates were able to educate customers on these products resulting in a tremendous drop in the rate of return, adding millions to the bottom line in a short period. Such courses can also be made available to customers as a means of improving their purchasing experience. Furthermore, by capturing customer-support-related data, small media-based snippets on "how to" can be pushed to the mobile device in order to reduce call-in rates for similar knowledge deficiencies.

Finally, there is the aspect of harnessing the External Enterprise solution as a direct revenue generation engine. Some organizations are so dominant in their field that agents, dealers, service technicians and other professionals are clamoring to be associated with them. By requiring these individuals and groups to complete paid certification programs and maintain their credentials annually, significant amounts of income can be generated. And by taking the burden of this training off the organization and positioning it online, resources can be freed up for more pressing matters.

The Extended Enterprise solution, therefore, helps retailers to reinforce their brand and heighten the customer experience by providing consistent information for thousands of employees across multiple franchises, geographic regions and languages. This directly drives revenue by providing associates with the knowledge and skills to cross- and up-sell to meet customer needs and boost repeat purchases. In addition, it reduces turnover and supports career planning initiatives, as well as streamlining new employee orientation and on-boarding for full-time, part-time and seasonal employees.

By targeting sales personnel in a retail chain, it is possible to incentivize them to access and complete specific content focused on helping them become better informed about specific products. By aligning these types of programs to a distinct business purpose such as the improvement of sales, a small investment can pay substantial dividends. In a world where a multitude of brands are vying for attention, a professionally produced program is an excellent way to reinforce brand recognition. Done correctly, it cleverly differentiates a brand in the eyes of external audiences.

Another critical factor: In many verticals, speed to market is a major component of success. Particularly in industries such as computer hardware, software, durable goods and telecommunications, rapid development of products is rarely enough. It takes velocity and agility on the marketing side to ensure results.

Take the example of a security software release. In many cases, multiple vendors come to market at the same time with their latest offerings. Extended Enterprise solutions can help differentiate products by educating channel partners and resellers about your new release. The speed with which that knowledge gets out, as well as the ease of access and management, can make or break a marketing campaign. This doesn't mean that formal training has to be involved. Distribution of a webcast, PDF or PowerPoint in conjunction with accurate tracking of viewing patterns might be enough to move your product to top of mind in the target audience.

Another way to become more nimble in an evolving marketplace is in the area of centralized training. Many companies require external sales personnel to come in to the head office for one week every year for an update on products, pricing and policy. This represents a hefty annual expense for all concerned when you take airfares, hotels, food and lost productivity into account. What if that week could be either eliminated entirely or reduced to only two days, with the rest of the training done online? The Extended Enterprise solution is a way to facilitate the transition.

Organizations currently using the Extended Enterprise solution include AMC Entertainment, Cabela's, Hudson's Bay Company, Pilot Travel Centers and Oreck.

Government
The Extended Enterprise solution is especially suited to federal, state and local government organizations. In the federal arena, There's a wealth of knowledge and experience in developing premier human capital management and development solutions for federal agencies- systems that raise workforce productivity, improve employee retention, aid regulatory compliance, cut expenses and reduce training time (GSA Contract Number GS-02F-0114R).

This depth of experience has been used to full advantage in the Extended Enterprise solution. Agencies that sell services to the public can deliver knowledge, information, training and certification, harnessing the platform to improve time to market and increase customer satisfaction. The system can also be used to provide solutions to a geographically dispersed employee base. With many agencies having offices in all 50 states, it can be daunting to maintain control and accountability for the individual progress of thousands of employees. Failure to keep track of No FEAR Act, ethics, sexual harassment and other mandated training and information initiatives can have serious consequences.

Federal agencies deploying the Extended Enterprise solution have saved taxpayers millions of dollars by reducing expenses associated with the exchange of information, knowledge and formal training to remote employees. In terms of cost avoidance, the GoLearn.gov Learning Center alone saved taxpayers approximately million in expenses related to travel, lodging and time away from work in just the first 20 weeks of operation.

Smaller agencies provide one-stop access to high quality knowledge, learning & performance products and services by unifying initiatives across departments, thereby eliminating redundant procurement and licensing costs. The platform is compliant with Section 508 of the Workforce Investment Act of 1998, which requires all public institutions to use information technology accessible to persons with disabilities. Further, world-class security infrastructure has been audited by independent organizations on behalf of the U.S. Office of Personnel Management. The hosting environment utilized by the Extended Enterprise solution meets OPM Baseline Security Requirements, for a certified and accredited host for the e-government learning initiative.

More than 50 agencies, including OPM/GoLearn, the Departments of Education and Interior, U.S. Agency for International Development, U.S. Department of the Interior, U.S. Office of Personnel Management/GoLearn and the U.S. Securities & Exchange Commission, have implemented the Extended Enterprise solution.

In the state and local category, the Extended Enterprise solution is used in local agencies such as Loudon Water as well as state agencies such as State of Arizona Department of Health Services, State of Washington, State of South Carolina, NY State Police Academy, State of North Dakota and Florida Department of Highway Safety and Motor Vehicles. Agency administrators are able to track compliance to vital initiatives around the country and create content tailored to their needs. A searchable catalog provides all the information and knowledge required by a diverse community.

Associations
The distribution of knowledge via the Internet continues to change the business of associations. When a vast amount of information is available online and on-demand for a variety of industries, association resources are often competing with "free" information that is available via the Web. Today's successful and growing associations must be able to show differentiation and demonstrate value to members. Implementing an online knowledge management strategy while continuing to run an association presents unique challenges and opportunities for those organizations.

Associations are embracing Extended Enterprise and the e-learning that it can provide. 61% of associations surveyed are currently deliver e-learning, 25% are planning to deliver e-learning in the next 6-12 months. Only 13% of those surveyed have no plans for e-learning for at least the next 12 months. (The State of the Sector, Tagoras, 2009)

Executing a strategically-designed Extended Enterprise solution delivered via a Software as a Service (SaaS) model provides proven value and member engagement opportunities to associations and its membership in terms of reinforcing association value to members, increasing member retention and acquisition, and boosting communication agility under rapidly changing industry conditions.

For example, today's consolidated association staffs are asked to distribute information to members using a variety of communication methods. Delivering online content, courses for free, courses for a fee (via e-commerce), certification programs, Webcasts and even Web 2.0 discussion areas and collaboration can all be executed, measured and tracked using the Extended Enterprise solution. Members simply access a public Web site created specifically for them and view the available free or fee-based educational offerings. Associations can then decide if they want to have members login and use an e-commerce system in order to access the content or if the content is available as a member benefit. Courses, Webinars and even Web-based synchronous annual meetings can all be efficiently managed via the Extended Enterprise solution saving time, money and association resources.

And for associations offering certifications or continuing education credits to its membership, the Extended Enterprise solution offers an association ultimate flexibility. Members may need to put in a certain number of hours annually to maintain their accreditations and stay up to date. The Extended Enterprise solution supports these activities, eliminating the need for members to get together for a local, regional or national meetings or tests. Knowledge and information can be made available to them online as an effective means of managing certifications and upcoming expirations to avoid lapses in licensing.

Associations already taking advantage of the Extended Enterprise solution include the Association of periOperative Registered Nurses, American Institute of Architects, National Education Association, National Glass Association and the International Association of Plumbing & Mechanical Officials.

Conclusion

Fields such as insurance, real estate, financial services, durable goods manufacturing, associations, healthcare, technology, communications, government or any other area relying on the channel or independent reps/dealerships can all benefit markedly from the Extended Enterprise solution.

Organizations operating in such sectors can harness it to:

• Protect, reinforce, differentiate and promote brand image
• Increase customer retention and acquisition
• Boost agility in rapidly changing market conditions
• Improve business performance and productivity

The purpose of the Extended Enterprise solution, then, is to bring about the efficient delivery of knowledge for the strategic purpose of transforming business performance. Those organizations that best understand the Extended Enterprise solution are most likely to thrive in a tough economy.

Extended Enterprise solutions can help you:

• Develop and deliver knowledge and information to audiences outside your organization.
• Drive revenue through customer, channel and distributor channels.
• Improve productivity and information sharing with external partners.
• Deliver certification programs and share knowledge.
• Eliminate excess content costs while accelerating time to market.
• Increase customer satisfaction and product adoption.
• Provide consistent access to training, information and knowledge assets 24/7/365.

Such assets can easily be developed and delivered on-demand in a timely manner to customers, members, partners and resellers with no hardware to install. A Software as a Service model only requires users to have Internet access to complete their training. This delivery method allows for maximum return on investment by providing a functional, flexible and scalable solution.

The Extended Enterprise in Action

SumTotal Systems, Inc. is the global leader in complete talent management software that enables organizations to more effectively drive business strategy. Recognized by industry analysts as the most comprehensive talent management solution, SumTotal provides full employee lifecycle management, including a core system of record, from a single provider for improved business intelligence. The company offers customers of all sizes and in all industries the most flexibility and choice with multiple purchase, configuration, and deployment options. With more than 1,800 customers and 25 million users worldwide, we have increased the performance of the world's largest organizations.

For more information, or to request a demonstration, please call +1-866-766-6825 (US / Canada), +1 352 264 2800 (international) or visit our website: http://www.sumtotalsystems.com/

ENTERPRISE

Write a Bankable Business Plan - Ten Action Steps

Action Step # 1
Define Your Company: What will you accomplish for others?

Write down all the specific needs your company will satisfy. Potential investors need to know that your business will be meaningful and marketable to people who can use your product or service. So concentrate on the external needs your company will meet. What will your product or service enable people to do better, more cheaply, more safely, or more efficiently? Will your restaurant make people's palates delirious with new taste sensations? Will your new mouse trap help people capture mice without feeling sick to their stomachs? Will your new bubble gum scented bubble bath revolutionize the way children agree to take nightly baths?

ENTERPRISE RENTAL COUPONS

Think of all the positive benefits your company will provide. Write them down. Admire them. Absorb them into your consciousness. Believe in them. These are the primary motivators that readers of your business plan will respect and value.

Action Step # 2
Identify Your Company's Initial Needs: What will you require to get started?

Whether you want to buy an existing company with 300 employees or you can start your business by only adding an extra phone line to your home office desk, you need to make a list of the materials you'll need. Some may be tangible, such as five hundred file folders and a large cabinet in which to store them all. Other requirements may be intangible, such as time to create a product design or to do market research on potential customers. You may need to hire an assistant to develop a retrievable filing system for the five hundred folders, or hire a consultant to set up a computer system that's beyond your technical skills.

If you're going to build a better mousetrap, you may have constructed a prototype out of used toothpaste tubes and bent paperclips at home, but you'll need a sturdier, more attractive model to show potential investors. What exactly will your mousetrap look like? What materials will you need? Do you require money for research and development to improve on your original toothpaste tube and paper clip construction? Do you need to hire an engineer to draw up accurate manufacturing designs? Should you patent your invention? Will you need to investigate federal safety standards for mousetraps?

Next, do your homework. Call a real estate broker and look at actual retail spaces in the neighborhood where you'd like to open your restaurant. Make a chart of the most expensive and least expensive sites by location and square footage. Then estimate how much space you require and how much money you'll need to allow for rent.

Make a list of all the tangible and intangible resources you need to get your business going. The total estimated price of all of these items will become your start-up cost whether you're buying highly sophisticated computers or simply installing a new telephone line on your desk. If there's any item in your estimates that seems unreasonably high, research other alternatives. But keep in mind that it's better to include every element you truly need along with a reasonable estimate of the cost of each item, so you don't run out of money or default on your loans. Be honest and conservative in your estimates, but also be optimistic.

Action Step # 3
Choose A Winning Strategy: How will you distinguish your product or service from others?

Although there are millions of types of businesses, there are actually only a few basic strategies that can be applied to make any enterprise successful. The first step in selecting an effective strategy is to identify a competitive advantage for your product or service. How will you establish that your product or service is better, cheaper, more delicious, or more convenient? How can you make your company more noticeable than your competitors? What restraints in your business or its industry might determine which strategy you choose?

Your competitive advantage may include designing special features not found in rival products. It may entail superior service characteristics such as speedier delivery, a lower price, or more attentive sales people. Perhaps you're establishing an image or brand of exceptional quality or reputation. Does your product or service bestow a certain status on its users? Does it create more profits or other benefits for your customers' own endeavors?

Perhaps you want to position your mousetrap for a primarily upscale market because the best design requires titanium and manufacturing costs will be so expensive only rich people will be able to afford your product. But maybe the mousetrap is so fantastically effective that wealthy people will want hundreds of them around their vast country homes and polo pony barns.

You must have a reason why your business will succeed. This is the competitive advantage your product or service will deliver. Once you've established the competitive advantage, you will be able to select the best strategy to reach your goal.

Action Step # 4
Analyze Your Potential Markets: Who will want your product or service?

To determine your targeted market, write down the demographics of the people who will use your product or service. How old are they? What do they do for a living? Will mostly women use your service? Is your product or service attractive to a particular ethnic or economic group of people? Will only wealthy people be able to afford it? Does your ideal customer live in a certain type of neighborhood, such as a suburb with grass lawns, in order to use your lawn mower? Answering these questions about the demographics of your prime market will help you establish the clear characteristics of the people you need to reach.

If you're selling soap, you may believe that every dirty body needs your product, but you can't start with the entire world as your initial market. Even if you've developed such a ubiquitous item as soap, you need to identify a smaller, more targeted customer group first, such as children under eight for the bubble gum scented bubble bath. If your soap only works with pumped well water without fluoride, you must acknowledge that your intended market has geographical limits as well.

Establishing the size of your potential market is important, too. This will be easier once you've completed the demographic analysis. Then you'll be able to research the numbers: How many car mechanics, house painters or bathroom contractors are there in any given community? How many children in the United States are currently under the age of eight? How much soap will they use in a month or a year? How many other soap manufacturers already have a share of the market? How big are your potential competitors? And where do you find the answers to all of these questions?

Identifying your market is one of the great satisfactions of starting your own business. You're thinking about the actual people who will use your product or service and how pleased they will be buying it as you are selling it.

Action Step # 5
Develop a Strong Marketing Campaign: How will you reach your customers and what will you say?

Entrepreneurs, especially inventors, often believe that their business concept is so spectacular that promoting their product or service won't be necessary. Sort of a "build it and they will come" attitude, especially if what you're building is the proverbial better mousetrap. One of the most common flaws I see in plans is the entrepreneur's failure to describe exactly how customers will be reached and how products will be presented to them. Potential investors, staff, and partners won't be convinced that your idea can succeed until you've established well-researched and effective methods of contacting your customers - and the assurance that once you've reached them, you can convince them to buy your product or service.

Marketing describes the way you will position your product or service within your target market and how you will let your potential customers know about your company. Positioning your company means concentrating on the competitive advantages you have identified: will your product or service distinguish itself by its superior quality, its revolutionary features or its ability to make your customers happier than they've ever been in their lives? Marketing helps you focus on identifying your competitive advantage so you can position your product or service. It also establishes the best ways to reach your potential customers and what to say to them.

When you have the right marketing campaign in place, you have an operating plan to gain market share, generate revenue, and bring your financial projections into reality.

Action Step # 6
Build A Dynamic Sales Effort: How will you attract customers?

The word "sales" covers all the issues related to making contact with your actual customers once you've established how to reach them through your marketing campaign. How will you train your sales staff to approach potential customers? Will you divide up your sales staff so some become experts in selling your bubble gum scented bubble bath to small, independent retail toy stores? Will other salespeople concentrate on developing relationships with major manufacturers so your product could be sold in tandem through their national distribution outlets? Will you have a sales force expert in buying television slots on Saturday morning cartoon shows or placing ads on the backs of kid-oriented cereal boxes?

What advertising and promotional efforts will you employ - two for the price of one specials or free coupons inside those same kid-oriented cereal boxes? Where can you locate lists of the greatest concentrations of children under the age of eight or whatever group constitutes your market?

In planning your sales activities, you will also need to answer questions such as: Is it ethical to contact your colleagues and clients from your former job as a door-to-door soap salesperson to tell them about your new business. Will you be the only salesperson in the beginning stages of your company? When will you know it's time to hire more sales staff? How do you convince your clients that your sales staff will take care of them as well as you did? What will your basic sales philosophy be - building long-term relationships with a few major clients or developing a clientele of many short-term customers?

You will also need to consider how you will compensate your sales staff - with a base salary plus a commission? Will you hire full time staff with full benefits, or part time staff without benefits. How will you motivate your staff to do the best sales job possible?

Knowledge of your competitive advantage is just as important in designing a dynamic sales effort as it is in developing an effective marketing campaign. You'll need to think about what product or service qualities will be the most compelling to your prospective customers. Then you'll have to devise convincing language that clearly communicates this competitive advantage to your sales staff who will in turn use it when talking to your customers. In my experience, the most important element of an effective sales effort is having a sales staff that thoroughly understands your business and the needs or your potential customers. Therefore, your sales plan must address the issue of how you will create a sales staff that is as knowledgeable about your business as it is about your potential customers.

Action Step # 7
Design Your Company: How will you hire and organize your workforce?

By the time you've reached this stage of thinking about your potential business concept, you'll probably have a good idea of the number of people you'll need and the skills they'll require to get your enterprise up and running. Keep in mind that your initial plans will undoubtedly change as your business grows. You may need to hire more managers to supervise your expanding staff or to set up new departments to meet new customer demands. Projected growth and expansion for your company should be mentioned in your business plan, but it's not the primary focus. For now you want to secure help in getting started and convince your funding sources that you will become profitable.
Investors will want to know if you're capable of running the business. Do you need to bring in experienced managers right away? Will you keep some of the existing employees or hire all new people? And where do you find these potential employees?

Funding sources will also want to know if any of your partners expect to work along side of you or if their obligations are only financial.

Your plan will need to specify the key management jobs and roles. Positions such as president, vice presidents, chief financial officer, and managers of departments will need to be defined along with stating who reports to whom. You may hope to run your company as one big happy family - and it may work out that way - but organizations require formal structure and investors will expect to see these issues addressed in your plan.

And as soon as you have employees, you need to consider how you will handle their salaries and wages, their insurance and retirement benefits, as well as analyzing the extent of your knowledge of tax related issues. As you think about hiring personnel and organizing your workforce, you must also confront your desire and ability to be a good boss. If you haven't contemplated this aspect of your commitment to owning your own business, now is the time to give it serious consideration.

Action Step # 8
Target Your Funding Sources: Where will you find your financing?

As your business concept begins to take shape, you can begin to home in on the most likely financing sources. Issues such as the size of your business, the industry it is in, whether you are starting a new business or buying an existing one, and whether you can provide collateral to a lender are among the issues that must be considered in creating a target list of funding sources. Banks and other funding sources don't lend money because people with interesting business ideas are nice. They follow specific guidelines, such as the RMA database, which are designed to insure that they will make money by investing in or lending to your business.

For the vast majority of entrepreneurs, the well-known, high profile means of raising money, such as through venture capital companies or by going public, are not viable options. Your own credit, credit rating, and business history are key factors in obtaining financing for your venture through Small Business Administration (SBA) guaranteed loans and other bank credit. Your ability to tap into your personal network of friends, family, and professional contacts is crucial to raising money beyond what your own personal funds or credit can provide. In all of these cases, there are important considerations such as the potential impact on relationships when family and friends become investors.

When you have completed this process of identifying the likely potential funding sources and writing a bankable business plan that addresses their needs and answers their questions (even before they ask them!), you will have greatly increased the likelihood of obtaining the financing you need.

Action Step # 9
Explain Your Financial Data: How will you convince others to invest in your endeavor?

The accuracy of your financial figures and projections is absolutely critical in convincing investors, loan sources and partners that your business concept is worthy of support. The data must also be scrupulously honest and extremely clear. Since banks and many other funding sources will compare your projections to industry averages in the Risk Management Association (RMA) data, I've stressed throughout my book how you can use the RMA figures to test your projections before the bank does. Your numbers will be more credible if they compare reasonably to the industry averages.

The actual number crunching portion of your business plan is the place to discuss how and why you need certain equipment, time or talent, how much these items will cost, when you expect to turn a profit, and how much return and other benefits your investors will receive.

More new businesses fail because they simply run out of cash reserves than for any other reason. Investors lose confidence in the entrepreneur and the business and become reluctant to invest more when projections are not met. Had the projections been less optimistic and the investors asked to invest more in the beginning, they probably would have done so. In most cases, proper planning and more accurate projections could have avoided this problem completely.

Your business plan should clearly state the amount of funds you need, how soon you require them, and how long before you start repaying investors. You should also explain what type of financing you hope to acquire, either equity (such as through the sale of ownership shares in your company) or debt (such as loans to the company).

If you're planning to buy an existing business or already own a business you would like to improve or expand, you will also need to provide a detailed historical financial summary of how well - or poorly - the business has done in the past. This analysis should also include a comparison of this venture's financial performance compared to the industry standards.

Action Step # 10
Present Yourself in the Best Light: What are your qualifications for bringing your plan to fruition?

The talents, experience and enthusiasm you bring to your enterprise are unique. They provide some of the most compelling reasons for others to finance your concept. Keep in mind that investors invest in people more than ideas. Even if your potential business has many competitors or is not on the cutting edge of an industry, the qualifications and commitment you demonstrate in your plan can convince others to proffer their support.

Your resume will be included in the separate appendix of exhibits at the end of the plan, so this is not the place to list every job you've ever had or the fact that you were an art history major in college, especially if these experiences have no direct bearing on your ability to start your own business. But it is the place to emphasize qualifying skills that may not be readily apparent from your resume.

But don't overlook the impact being some part of your background that might even seem unrelated to your new venture. For example, having been a pilot may demonstrate that you know how to supervise a crew of people working together to make a group experience if not comfortable, at least safe. You have undoubtedly handled dissatisfied or enraged customers. Even that BA degree in art history may enable you to make your products or store more appealing to the eye.

Your unique qualifications will separate you from all the other people who have sought venture capital for similar ideas. Boasting about these skills is not hubris; it indicates that you have a highly honed business savvy.

Write a Bankable Business Plan - Ten Action Steps

Edward Rogoff, Ph.D

Bankable Business Plans

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