Why is a Business Plan So Important to Your Success?

A good business plan is the most important but often overlooked part of running, starting and expanding a successful business, and obtaining finance for a business. If a plan is written properly, running a business and obtaining finance is much easier, leaving less room for error and failure. While you cannot predict everything that can happen in a company's future, a good plan helps you avoid certain pitfalls and overcome obstacles, while anticipating and creating opportunities.

There are different plan formats for various circumstances. A comprehensive plan will help you run your business venture or project more successfully. There are also specialized plans for various purposes, such as a funding plan for a bank, investor or venture capital firm.

The business planning process is very important. It is a building block system that is continuous, systematic and comprehensive. It involves the entire company, produces effective decision making, and executes those decisions effectively in a strategic plan. A good plan also measures the relationship between expectations and performance. It evaluates your company's progress or lack thereof.

It is said, writing an effective business plan is more art than science. It is good to have a proven process and format, but you can't just fill in the blanks on a master planning program or document. It is a matter of asking yourself the right questions within the proven process and format that brings about a successfully written business plan.

The comprehensive plan that I develop has eight sections: the executive summary, company overview, management and operations, marketing strategy and plan, strategic and sales plan, financials and appendix. I amend the eight section plan for specialized plans, like the funding plan.

The organization of the business plan is quite important. The eight section business plan is in a specific order from which each section builds on the previous section. There is fluid thought and reasoning employed to achieve a business plan which reaches its specified purpose. Although I wrote that the executive summary is the first section, it should be written last. All the other sections should be written in the order they are listed. A plan contains a very precise and concise format and is organized into numbered sections and sub-sections, which contain specific information in short, paragraph form.

A business plan is a dynamic document, as it changes on a daily, weekly and monthly basis. By being able to access it on your company computer network and online, various key people within the company can use and update it easily and effectively. For a Business Plan to be successful, it must be intertwined into the fabric of your business, have a detailed implementation schedule and be carefully tracked.

A well written and implemented business plan can do a lot of things, including: running, expanding or starting a successful business; be readily changed, adapted and updated to suit market conditions; be a fantastic sales tool; obtain funding; react quickly to market changes; give you the ability to make realistic forecasts and projections; seize market opportunities; establish and sustain your competitive advantage; and more.

Always consider hiring an experienced business consultant and planner to help develop, write and most importantly, implement your business plan.

Frank Goley works for ABC Business Consulting and is an expert in business planning and developing and implementing marketing plans and strategic plans. Check out his free e-books and articles on business plans and business finance.

Why is a Business Plan So Important to Your Success?

By Frank Goley

Small Business Ideas| Small Business Grant |New Business Ideas| New Business Grant | business ideas for beginners | business ideas for 2010 | business ideas for college student | business ideas for women | business ideas for small towns | business ideas from home

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A Winning Marketing Plan For Business Success

Developing, writing and implementing a successful marketing plan starts with solid industry and market analysis and concludes with an implementable marketing strategy and program. A marketing plan is not developed and implemented independently; rather, it should be developed in close coordination with your company's products and services and ultimately implemented through a strategic plan.

There is a certain approach and building-block process to developing a marketing plan. The place to start is analyzing your industry: its current state; who the major participants are; changes in the industry; opportunities; economic modeling forecasts; and examining who else may enter the industry. Then move toward determining how distribution works in your industry and how technology affects its distribution systems.

After your analysis on the industry level is complete, it is time to narrow your focus to analyzing and defining your market segments. Some example determinants are demographics, geography, customer needs, buying pattern and psychographics. With these segments defined and analyzed, analyze each market segment and determine how the market needs lead these identified groups to buy your products and services. Focus not on what you have to sell but more importantly, on the buyer needs you satisfy. Determine why customers buy from you.

You can now narrow down your target markets, determining what market groups are more important to your operation, along with, the market niches you can effectively target. It is vital to determine what your target customers' needs and characteristics are, along with, what makes certain target groups more advantageous to market than others.

The next step in the marketing plan development process is to analyze market trends from a strategic standpoint. Look at market trends as a way to get ahead of the market direction, knowing with a probability of certainty where it is going. You can now realistically project your market growth and specific growth rates. The growth rate projections should identify in detail the relationship between your potential customers, sales, revenues and ultimately, profits.

Explain the nature of your competition, why customers choose one provider over the other, and why customers will buy from your company instead of these competitors. Provide a detailed competitive summary of your products' and services' variables, ranking them in comparison to your competition. Example variables include pricing, sales, trends, positioning clarity, quality, value, reputation, packaging, advertising, customer service, target market focus, innovation, brand awareness and so forth. Determine your top five competitive strengths and weaknesses, as well as, identifying your top competitive gap threats. Finally, determine how competitively positioned your company will be in the market.

Two parts remain: your marketing strategy and marketing program. The marketing strategy consists of positioning statements, pricing strategy, promotion strategy and distribution strategy. These are closely linked as your marketing programs will implement the marketing plan's underlying strategy- the program puts the strategy into action, bringing "life" to your marketing plan.

A great marketing plan development process understands it is a companywide endeavor between product and service development, market analysis, marketing strategy, marketing programs, the marketing plan, the strategic plan and the sales plan. This all adds up to happy customers and financial success.
Consider hiring a marketing pro to help you develop the best marketing strategy and plan for your company and don't forget the online marketing component! Online marketing can be highly targeted and cost effective per customer acquisition, with high profit margins and tremendous growth possibilities.

Frank Goley works for ABC Business Consulting and is an expert in developing and implementing business plans, marketing plans and strategic plans. Check out his articles on cost effective online marketing and marketing plans.

A Winning Marketing Plan For Business Success

By Frank Goley

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Strategic Planning Process For Business Success

A strategic and sales plan puts your marketing plan into action and is the implementation work horse of a business plan. This article on the strategic and sales planning process is divided into ten sections, which are presented in a particular, building-block order.

Potential Problems and Company Objectives: First identify and rank your potential problems in your company operations. With your problems identified and ranked in importance and severity, you can develop company objectives to minimize and manage the identified problem areas, emphasizing your company's strengths.

Risk Analysis: When are Problems likely to occur? What can you do to mitigate the potential risks and problems? How will you deal with these problems? The risk analysis looks at how you can turn problems into opportunities, which parlays into the next section.

Company Strategy, Strategic Tactics and Programs: First develop your strategy, then the relating strategic tactics and then the resulting strategic programs. Strategy is focus and consists of key factors that distinguish your company and are most expected to contribute to your success. It is important that your company strategies complement each other so you are not sending your business in separate directions. Strategic tactics are used to implement strategies and relate to a specific strategy. Strategic programs are specific business activities which have concrete dates, assigned responsibilities and developed budgets. Programs relate to specific tactics of a specific strategy.

Sales Strategy: Develop the sales strategy as it specifically relates to the marketing strategy. Establish the different sale methods and channels. Determine your sales process and goals.

Sales Program: The sales program addresses how your sales strategy will be implemented. You should have systems in place to measure the strategy implementation and to support your sales efforts.

Strategic Alliances and Joint Ventures: Define your keystone alliances and partnerships. Develop cooperative marketing and development opportunities. Identify any inherent risks.

Rolling Basis Operating Budget: The operating budget is a planning and control mechanism which helps you develop the sales forecast. It should be on a rolling basis, outward looking for one year, and the format on a monthly basis. It is important your operational budget reflects your strategic planning goals.

Sales Forecast: Based upon your sales strategy and programs, and considering your operational budget, develop a three to five year projected sales forecast. This sales forecast will be used to develop your detailed profit and loss statement of your business plan. It is very important to correlate how your sales forecast relates to your market analysis, market segments, marketing strategy and sales strategy.

Milestone Table: Provide your future company goals, milestones and corresponding strategies, along with your marketing and sales program rollout.

Control Mechanisms: What mechanisms for control of each critical skill and resource are available to you? Is direct ownership necessary for your resources and skills or can they be outsourced and at what cost savings? These are just some of the questions to address when identifying control mechanisms for your strategic plan's resources.

Strategic planning is such an important part of running a successful business, I highly recommend retaining an experienced business consultant, ensuring your strategic plan is effectively developed, and most importantly, effectively implemented throughout your company operations. After your strategic plan is implemented, an experienced business consultant can also help you ensure the strategy stays on track, reaches its goals and is adjusted as necessary due to market changes and unforeseen problematic events.

Frank Goley works for ABC Business Consulting and is an expert in developing and implementing business plans, marketing plans and strategic plans.

Strategic Planning Process For Business Success

By Frank Goley

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Source: EzineArticles.com

Professional Planning Services

Business Planning is one of the most inherent and yet often ignored aspect of managing a business. It should be the first step to starting a business and should also be reviewed every successive year, taking into account any unforeseen events that may have occurred and also the current progress.

There are many types of business plans. You can begin with a complete business plan which takes into consideration every facet of the business, and the individual plans to cover the various different sections of the business. Each plan should be comprehensive and systematic. It should show the path to greater efficiency and growth in the company and have sections which deal with any pitfalls that may arise and with any changes in the economic scenario.

Since a Business Plan often forms the foundation of any good business, it is important to get good professional help in formulating this plan. There are some guidelines and processes which are standardised, but there are also many distinct factors which impact a specific business plan. Business Planning Services are experienced in all aspects of planning, and can provide the building blocks for growth and evolution. They can also correlate expectations and execution. A good business planner will be able to chart out the strategies for dealing with inter-department issues, with day to day decision making processes and above all it will map the progress expected and also any lack of progress.

Another important Plan for any business is the Marketing Plan. It does not stand in isolation, but works in coordination with a comprehensive business plan. When it is being formulated it should take into consideration a thorough analysis of your industry. A professional Marketing Planner will be able to look at all aspects of your industry, ranging from the existing distribution networks, to the new technologies which affect this network. The planner will also be able to analyze your specific market segments, and also all the determinants of these fragments. They will also analyze the market trends, and develop strategies which will incorporate these trends into your long term plans. An experienced Marketing Planning professional will be able to draw up pricing and positioning strategy, in relation to the overall all inclusive scenario, rather than one which is only based on your organization's individual requirements.

Strategic Planning is another segment of planning which is crucial in the overall planning process of any organization. The first step in strategy planning involves chalking out the organization's strategies, then the strategy tactics and then the methodology that shall be followed. A professional strategy Planner will be able to focus on the core competencies of your company, and how those can be augmented further. They will draw out a blueprint which will encompass all the segments and they will also be able to guide you on how the mapped out goals are going to be achieved.

As is evident, not only are business plans important, but they also need to be drawn and elucidated carefully. They impact every aspect of your organization, hence they need to be well planned, and clearly expounded. Professional services in the planning segment can prove immensely beneficial and lucrative for the growth of the company.

Frank Goley is an expert in business and marketing plan development and works for ABC Business Consulting, check out his articles about Effective Business Planning.

Professional Planning Services

By Frank Goley

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Tips to Start a Business on a Low Budget

Starting a business is something everyone should have in their to-do list, and certainly no one should let life pass by without having given a fair shot at it.

Having your own business unveils all kinds of benefits such as being your own boss and increasing your earning potential.

However, there is no denying that starting a business is easier said than done, and that is because before going ahead with it you need to know what you are going to do, and how.

The how part usually involves a somewhat heavy investment no all of us can afford, and that is where this article comes in.

You see, there are many ways to do business and not all of them require for you to pull out a fat checkbook or drown in debt, and I am going to give you a couple of tips to start on the right foot with nearly no money.

1.- Research and analyze online business models.

The internet is an ever more fertile ground for you to step in and develop your business. No matter what you have in mind, it is likely you can take it online and make a killing, and even if you do not have a particular idea in mind you can easily draft a business plan from scratch just by looking at all the opportunities you can find online.

From E-Commerce to online services and internet marketing, you can pretty much do what you want online.

The tools to do so are available everywhere and more and more of them are becoming free or dead cheap to use, such as content management systems to build complex websites without having to be much of a techie, market research tools etc.

2.- Choose one you feel more comfortable with and start working on it.

Chances are that any business option you choose to execute online will not demand an investment of more than $100 and you will have everything you need to start.

What comes next in order to get the ball rolling is to create a work routine and dedicate enough time and brain power to developing your business.

For example, if you decide to build an online store with a platform such as Yahoo Small Business Solutions, then you must commit yourself to do some product research everyday with the help of your product sourcing company, and keep your inventory updated.

Also, you must dedicate some of your time to promote your store by performing basic SEO tasks, ad placement in classified directories and other marketing activities that will increase your business' visibility and performance.

It will be a slow process, but if you work on building your know how and you consistently push your project forward it will pay off sooner than later, and you will have spent just pennies for a business that will likely turn into your main stream of income.

Tips to Start a Business on a Low Budget

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Hotel Business Plans

Every industry has its own unique terminology. Hotel Business Plans have to include comments about specific terms such as Occupancy Rate – The percentage of rooms filled over a particular period of time - which you will need to understand, and clearly explain.
Hotels are very prone to seasonal variations, such as Winter or Summer, depending upon whether they are in a Ski resort or by the beach. The seasonal variation will need to be addressed.

Local events such as trade fairs or conferences will need to be investigated and taken into account, and incorporated into your hotel business plans.

Sample Business Plan

Coach House Bed & Breakfast

Executive Summary

Introduction

The long-term goal of Coach House Bed and Breakfast (Coach House) is to become the best choice on Tybee Island, Georgia for temporary lodging by creating a differentiated experience capitalizing on personal service, the historical nature of the Coach House building, and its unique location in one of the most attractive parts of the Old South.

We plan to be more than a great bed and breakfast. We plan to create an environment of pampered luxury that surpasses the standard fare for Tybee.

Expanding our exposure via the Internet and introducing the island to people that have not yet discovered this year-round paradise will allow us to maintain a higher than average occupancy rate and above average profits.


The Company

Coach House Bed and Breakfast is an established B&B, and has been in operation for the last three years as Marsh Hen Bed and Breakfast. After possession and a brief period of becoming established, Coach House will diverse into other ventures to ensure a steady flow of patrons (tourists and locals) through its doors.


The Coach House Bed and Breakfast will be a partnership, equally owned by John Maesch and Frank Williams. Mr. Maesch will reside on the property, managing and maintaining the business and satisfying Tybee Island license requirements.


Our Services

The Coach House Bed and Breakfast was originally built in 1920 and is believed to have been one of three train stations on Tybee Island, linking the island to Savannah. The building has undergone a number of restorations and uses since the train service ceased operation. With construction completed, it now has the potential of four rental units with owner-occupancy in an unused room. Creating a "home away from home" which is often more beautiful and palatial than where they are traveling from will ensure many return customers. The riches of Chatham County have always drawn a significant number of tourists to the Savannah/Tybee Island area. In addition to providing information about such locations, we plan to collaborate with tour agencies and businesses throughout the area by offering packages and special rates.


As the B&B becomes established through the peak season, we plan to expand our services to the residents of Tybee and Savannah in time for the off-season. The adjoining rooms open creating a large area, ideal for formal or informal gatherings (i.e. wedding receptions, office parties, Christmas parties, etc.).


The Market

B&Bs, along with other short-term lodging on Tybee Island, have been a substantial part of the island tourism. Of the short-term lodgings on Tybee, ten are categorized as inns, 19 as long-term lease facilities (rentals, condos, and houses) and only four as B&Bs, including the Coach House. Hotels/motels constitute the largest percentage of rental properties on the island in terms of units.

A modest projection for increased unit rental is 30% per year. Competitors on the island have averaged 30% + rental increases over the past three years, and the Georgianne Inn is forecasting 50% increases for the next two years before hitting full capacity. This projection is without any significant increase in advertising or exposure, but is based on the general average increase in tourism.

Our two major customer segments are tourists from the north who traditionally prefer the cozy environment of B&Bs, and local patrons who need the facilities for various events. Subscriptions to various Web services will provide international exposure to potential customers for nominal annual fees.


Financial Considerations

Coach House will be acquired at $500,000 via a small business administration (SBA) loan (CDC 504 Loan Program) with the buyers supplying 20% down ($100,000), Ameribank supplying 50% ($250,000), and SBA supplying 30% ($150,000). We are assuming an initial capital start-up of $12,000 for operating expenses.

We estimate average monthly fixed costs to be at $6,770 ($3,486 for expenses and $3,284 for interest payments). Peak and off-season will have significant impact on the monthly earnings. For the first year, on-season revenues will offset off-season losses. As Coach House B&B builds its market position among the local patrons, we anticipate that off-season revenues will be enough to break even during that season...

View the rest of this hotel business plan

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Distribute your goods by air

Choosing airfreight will therefore be dependent on your budget and the type of product to be shipped. Questions to consider:

Freight forwarders

All international airlines carry freight and generally have a policy of conducting their business through freight forwarders. The forwarder therefore plays an integral part in the airfreight process.

Forwarders provide a range of services including:

Like the airfreight industry, the freight forwarder industry is highly competitive so it is worth shopping around for the right one.

Use the Yellow Pages or freight transport associations to find the names of forwarders that operate in your area/industry. Request information from several forwarders to establish what type of services they offer and at what cost. Find out how many overseas offices or affiliates they have, inspect their facilities, meet their staff, and discuss your specific requirements. For example, if your goods are perishable find out if they have the relevant experience. If you require a door-to-door service, make sure that you choose a forwarder that can provide this.

Flexibility

Like most industries there are peak demand periods for airfreight, and on these occasions capacity may become limited. It is therefore important to plan and be flexible in terms of which day to ship. Obviously airlines allocate capacity during these periods to regular, reliable shippers.

Choose the right mode of transport for your goods

Businesses rely on transportation to receive goods from their suppliers as well as deliver orders to their customers. The type of transport your business uses will depend on a number of factors:

• The products you sell (eg perishables or non-perishables)
• Supplier production lead times
• Product availability
• Customer lead times
• Source of supply (eg UK or abroad)
• Customs and Excise rules (eg duty or quarantine)
• Volume

You can use one method for all your transportation needs or a combination. Here are the main types, and their advantages and disadvantages:

Air

Airfreighting is commonly used by businesses for the delivery of goods from distant suppliers. This mode of transport is useful to deliver products with short lead times, fragile goods and products that are not bulky. Products in high demand and in short supply may also be airfreighted in order to meet customer demands. The bulk/value ratio will be a determining factor.

Advantages

• Fast delivery, usually between 24 and 48 hours
• Customer is not kept waiting for order fulfilment
• Reduced lead time on supplier
• Improved service levels

Disadvantages

• Flight delays and/or cancellations
• Customs and Excise restrictions
• Cost

Sea

Sea transportation is used by businesses for the delivery of goods from distant suppliers. Most sea transportation is conducted in containers which vary in size. Goods can be grouped into a container (LCL) or fill a container (FCL). Sea tankers are used for bulk shipments of loose goods such as oil, grain and coal.

Advantages

• Ideal for transporting heavy and bulky goods
• Suitable for products with long lead times

Disadvantages

• Longer lead/delivery times
• Bad weather
• Difficult to monitor exact location of goods in transit
• Customs and Excise restrictions
• Could be costly

Rail

Businesses use rail transportation for the delivery of a wide range of goods including post, coal, steel and other heavy goods.

Advantages

• Fast delivery
• Capacity
• Cost effective
• Safe mode of transport
• Reliable

Disadvantages

• Subject to unforeseen delays
• Reliance on rail freight operator's timetable
• Suppliers/customers are not always located near a rail freight depot and delivery to/from the depot can be costly and time consuming

Road

A very popular mode of transport used by suppliers and businesses to deliver orders. Many transport companies provide scheduled delivery days and next day delivery services, depending upon your needs. Goods can be packed/grouped in box vans or in containers which are also used for sea transportation.

Advantages

• Cost effective
• Fast delivery
• Ideal for short distances, national or mainland Europe
• Ideal for transporting perishables (eg fruit and vegetables)
• Easy to monitor location of goods
• Easy to communicate with driver
• Ideal for sending by courier shortages to customers

Disadvantages

• Transport subject to traffic delays
• Transport subject to breakdown
• Goods susceptible to damage through careless driving
• Bad weather
• Driving regulations can cause delays

Distribute your goods by rail

The way you choose to distribute goods will determine the time they take to reach a destination, the associated costs, and the recipient's satisfaction with your service. Rail links throughout Europe and the lower costs of this type of distribution make rail delivery a popular choice.

However, as with all aspects of your business, you must first weigh up whether this is a suitable method for your company:

• What do you want to distribute? Consider the size, weight, quality and whether your goods are perishable/fragile etc. Size and weight are the two most important factors in costing your delivery
• How quickly does the product need to reach its destination? This will affect what type of rail delivery service you use. Because trains are not constantly departing to the location you want them to, you will need to time the delivery
• Where do the goods need to go? Rail links throughout Europe are good (especially now there is the Channel Tunnel) but you may encounter problems if the destination is remote or further away
• How valuable are the goods and do you need insurance for them?

Also bear in mind that goods need to get to and from the railway station. In some cases this will be automatic (for example, if you are sending something by Parcelforce) but you may need to arrange an additional courier service. Once you have decided that rail delivery is the way to go, you will need to contact relevant companies:

• Look in the Yellow Pages under 'Rail Transport Services' and call some companies to establish a price for the delivery you have in mind. Give them all the details you noted down from the above points. The UK's largest rail distributor is Network Rail, whose website can be found at www.networkrail.co.uk. Find out if they will provide delivery of your goods to and from the railway station
• Talk to colleagues and find out if they have ever used rail transport before - would they recommend it. If so, can they recommend a particular company?

Before deciding whether this is an appropriate distribution method, it is worth checking out the other methods available to ensure you select the most relevant and cost-effective delivery system. While transportation by rail can be speedy and safe, there are limited routes and inflexible timetables to contend with.

Distribute your goods by post

When choosing to distribute your goods by post, there are several important points you need to consider: how quickly you need the goods to be delivered; and how much you want to spend on the delivery. Before you start searching for the right system for you, you will need to consider the following factors:

• What is the size and value of the delivery?
• How rapidly do the goods need to be distributed?
• Do the goods need to be delivered to a particular person or just an address?
• Do the goods need to be carried in a special way? (for example fragile products)
• Will you be distributing the same sorts of goods regularly?
• Does the item need to be distributed internationally or locally?

Once you have assessed these points you are ready to choose a delivery service. The two main ways of distributing goods in the UK are via the Post Office or courier.

Post Office:

The Post Office offers two methods of distribution, one via Royal Mail and one via ParcelForce. The former has a business website at www.royalmail.com and offers services of recorded delivery and special delivery, which ensure goods are signed for and delivered by the next day. If an item is not delivered next day the postage you paid will be refunded.

ParcelForce will deliver parcels anywhere to order, with next day delivery being the earliest possible. You can visit their website at www.parcelforce.com.

Couriers:

Couriers are specialist companies, which will deliver items quickly, on demand. Most courier companies offer a 24-hour service. To ensure your goods are received, the company will require the signature of the person who has received the goods. Although the courier option is sometimes expensive, it is a guaranteed way of delivering goods quickly.

Locating these services is relatively easy:

• Look in the Yellow Pages under 'Couriers' and 'Delivery and Collection Services' and ring some of the companies you find for a quotation. Be sure to state your delivery requirements and check out the cost. This is dependent on the weight of the goods and the speed of delivery you require
• Use an internet search engine to find delivery companies and their prices
• Ask fellow business associates for recommendations - their experiences are a good indicator of how efficient and reliable a company is

It is useful to remember that if you are planning to use postal distribution regularly then you may be eligible for discounts.

Deal with delayed shipments

Reasons for delay

Delays can occur for a number of reasons:

• Transport breakdown
• Bad weather
• Transport company has a poor track record of delivering on time
• Wrong goods delivered
• Flight, vessel or rail transport delayed/cancelled
• Awaiting customs clearance
• Products damaged in transit
• Incorrect, delayed or lost documentation

There are a number of ways to avoid or minimise the impact of a delayed shipment on your business:

Minimum stocks

Avoid relying on shipments to fulfill order requirements. You can prepare for the inevitable late delivery by ensuring that as a business you hold minimum stocks or buffer stocks at all times to meet customer demands. Your minimum stocks should be set at a level which is sustainable to your business (i.e. does not tie up capital and which is based on forecasted demands).

Reputable transport company

It is important that your transport company is a reputable one. Check the company's history and track record and also find out if they belong to a recognised transport association. If the deal sounds too good to be true then it probably is. As a business you cannot afford to incur unnecessary costs. Ensure that you will be entitled to compensation if your shipment is late/cancelled, and always read the small print. Make an effort to build a good working relationship.

Multiple suppliers

Having at least one alternative source of supply will help your business to cope with a stock-out emergency. Relying on only one supplier can be risky.

Documentation

Do not rely only on your forwarder for documentation. Ensure someone in your organisation is aware of the requirements and time constraints of documentation. Remember, you are ultimately responsible for documentation.

Realistic lead times

If exporting, make sure that you don't promise unrealistic delivery dates. Take into account the door-to-door supply chain and leave yourself a little room to move in case one of the links breaks down. Consider manufacturing, packaging, labelling and document presentation.

Who to contact

If your goods are late, contact the supplier and transport company in the first instance for an explanation and also for a revised delivery date. Notify the receiving warehouse advising them of the delayed shipment as well as the revised delivery date and time. Finally contact your customers and explain the reason for the delay - be honest and advise when they will receive their goods.

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Predict transit times and ETAs

All businesses need to know when to expect supplies to arrive, as well as know when their products will be delivered to the customer/client.

Benefits

Having a clear idea of how long a delivery will take and knowing the estimated time of arrival (ETA) will allow your business to:

• Ensure someone is on site to sign in the delivery
• Plan staffing rotas
• Notify warehouse staff
• Take immediate action upon delivery (e.g. move goods to refrigerated storage or put into a high-security compartment)
• Notify customers of when to expect their goods

Transit times

Whether you are waiting for supplies to arrive or are delivering goods to a customer, the main factors influencing your transit times are the distance being covered and the mode of transport. For example, if you are delivering pizza to a customer's house then chances are you are using a motorcycle over a short distance, with delivery expected within an hour of ordering. On the other hand, if you are importing mangoes from Chile to sell on to retail outlets across the UK, your supply chain is a lot more complicated. One small delay in the chain could have a substantial knock-on effect for the rest of the delivery and ETA.

When planning transit times, consider the following:

• Transportation method - are you using road, rail, sea, air or a combination? Work out the average amount of time taken to complete the journey, basing this data on at least five real life examples
• Departure point - if your supplies are coming in from overseas, then you need to factor in time differences, customs delays, 24-hour deliveries
• Room to move - don't make your connections so tight that the slightest delay may mean that your products miss their flight, ferry, train, etc
• Delays - all ETAs are subject to unforeseen delays, such as your transportation breaks down, heavy traffic, bad weather or delays at customs. Always have a contingency plan ready to deal with any major delays

ETAs

Whether you are transporting the goods yourself or using a freight forwarder, you should be able to work out or be given an estimated time of delivery. These may vary, for example, the delivery may arrive:

• Between 14:00 and 15:00
• In the morning
• During business hours
• In the next 24 hours
• In the next three days
• Within the next 14 days

It is up to you to negotiate the best delivery times for your products. In terms of delivering goods to your customers, the more choice you can give them the happier (and more loyal) they will be.

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Evaluate third-party logistics services

When a business chooses to use third-party logistics services they are outsourcing elements of the supply chain to a specialist logistics firm. The level of service these companies provide can vary greatly. Normally one or more of the following will be included:

• Inbound freight and customs management
• Warehousing, packing and storage of goods
• Fulfilling orders
• Distribution of outgoing freight
• Door-to-door delivery service

The main reason that businesses use third-party logistics companies is to achieve superior customer service by improving efficiency and productivity. A specialist logistics company will be able to offer expertise that may be lacking within your own company.

A good logistics company could add value to your company in the following ways:

• Using their expertise to focus on the entire supply chain will enable them to achieve best practice performance
• By outsourcing your logistics requirements you will be able to focus on your core business activities
• A third-party company will have a lot of their own resources and facilities. As they are specialists in the area of logistics, their investments are likely to be far greater than your individual company could justify
• A smaller company may be less competitive due to having smaller volumes to deal with. A third-party company will be able to merge transportation of goods with other smaller companies so that they each benefit from bulk discounts

Despite these advantages in using a reputable logistics provider, it is always necessary to exercise a degree of caution when selecting a company to entrust with your logistics management. Certain checks will need to be carried out:

• Ensure that the carriers used by the company have satisfactory clauses if goods are lost or damaged. Will they pay you the full invoice price or the manufactured cost?
• Is this provision subject to a maximum liability per shipment?
• Is the intended company fully aware of all legal and regulatory constraints that you or they are bound by?

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Make a claim on a failed delivery

Shipping goods, especially to international markets, will not always go according to plan. To help minimise the risks ensure your contract is clear in the responsibilities of each party by using the correct International contract terms (Incoterms). If you are using a shipping company, you need to be prepared to make a complaint if a delivery is delayed or damaged.

Steps to make a successful claim:

• Determine what type of complaint you have
• Make a claim as soon as possible
• Have all the necessary documents to hand
• State the most favourable solution to your complaint (e.g. repair, replacement, compensation, etc)

There are two main types of complaints:

Delay claim - this is when a pickup date has been missed or the shipment has been delivered late.

Before signing a contract, you and your shipping company should agree on the dates that your shipment is to be picked up and delivered. Remember that if you have not requested guaranteed service, your shipping company is obligated to transport your cargo within what the regulations define as "reasonable dispatch". This means that the pickup and delivery of your shipment should be completed on the agreed dates.

However, this is subject to any unforeseen circumstances or conditions that are beyond the control of the company, which might cause delay. Delays due to weather, highway construction, and mechanical breakdown do occur and you have to be aware of them. If you take out a guaranteed service contract then make sure you read the terms and conditions to find out what this really means.

Loss and damage claim - covers the loss or damage of your shipment.

Carefully read the terms and conditions offered by your shipping company on the loss or damage of your goods during shipment. Make sure you purchase goods-in-transit insurance if the shipping company's policy does not meet your requirements.

Making a claim

There are usually deadlines to meet when filing a claim. In the case of damaged delivery, you usually have 14 days to make a claim. For non-deliveries, you have 120 days from the date of issue of the bill of lading.

The necessary information you might need:

• Exact date of delivery
• Contract number
• Description of damage
• Cost of damage, delay or non-delivery

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Reduce lead times through efficient supply

Lead times refer to the total length of time between the decision to purchase an item and its availability for dispatch from the supplier to its actual addition to stock. Lead times may vary from one day to one week to four months, depending on your business requirements and the terms of agreement between you and your supplier.

Business benefits

Customers are the main beneficiaries of efficient supply. Competition, financial awareness and increasing customer demand for immediate gratification are reducing lead times, and businesses are under constant pressure to meet those lead times. The advantages of efficient supply for your business are:

• Customer loyalty
• Increased orders
• Increased profit margins
• Good reputation
• Less competition

Contract

You need to decide what lead times are suitable for your company in order to maintain your business and meet customer demands. This is crucial when it comes to negotiating a new contract with a supplier and choosing the most appropriate terms of sales and/or Incoterms (international code for delivery). Be firm and make sure that you get a commitment from the supplier to meet the agreed lead times. Some suppliers will hesitate before agreeing to tight lead times while others may make unrealistic promises in order to get your business. That is why it is essential to draw up a contract to protect the interests of both parties. Using Incoterms helps to formally delineate the responsibilities of each party for the delivery of the goods

A good contract will contain the following:

• Agreed lead times for the delivery of specific orders
• Supplier bearing the cost of late/delayed shipments
• Supplier bearing the cost of goods damaged en route
• Advance notice of product shortages
• Advance notice of discontinued items
• Advance notice of product upgrades
• Advance notice of price changes

Forecasts

Businesses that require shorter lead times probably buy perishable goods with a short-shelf life, such as fresh fruit and vegetables; while businesses that deal in non-perishable goods can sometimes have the longer lead time of up to four months.

One way to reduce lead times is to provide your supplier with forecasts. This is a prediction of what orders you expect to receive. Suppliers will then be able to plan production lead times, as well as take into account the time needed for packing or preparation for dispatch of a specific order.

Supplier delivery

Supplier performance needs to be measured regularly in order to ensure that stipulated delivery times are being adhered to. There are several ways to monitor delivery times:

• Keep an accurate log of delivery times
• Has the supplier booked delivery date/time with receiving warehouse beforehand?
• Are deliveries late? How often?
• Are there shortages? How often?
• Overages? How often?
• Damages?

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Planning and preparation 8 - Calculate your freight costs

When selling on a basis other than Ex Works (EXW), the cost of freight should always be included in your price quotation. You can do this in two ways:

1. Include the costs of freight in the price of every item - so that the buyer believes there is no extra charge for freight

2. Calculate the exact freight charge of each item and include the total separately on the invoice - this way the buyer sees the lowest possible prices for your products

Calculating costs

Freight costs are normally quoted on a port-to-port basis. When calculating your freight costs consider:

• Actual weight or volume weight of your consignment (quoted in cubic metres or tonnes)
• Mode of transport
• Weight of the pallet used to transport your units
• Loading and unloading costs involved in multimode transport
• Port or terminal fees
• Bill of lading (shipping documentation) fees

You may also incur additional charges relating to your terms of trade. These include:

• Cost of moving the goods to and from the port
• Handling the cargo
• Port costs
• Documentation
• Finance

Airfreight

There are yet further charges and constraints to consider if transporting your goods by air. Airfreight costs will vary according to the following factors:

• Tariff classification
• Competition in routing
• Space availability
• The forwarder's willingness to share commissions

Cut freight costs

There are a number of ways you can save on your freight costs:

• Use a multimode transport agreement - this will include the loading and unloading costs involved when changing modes of transport
• Use a shipping association with others exporters to receive discounts
• Find the lowest rates provided by carriers
• Use the correct (smallest) containers
• Check the minimum charge for freight (e.g. seafreight is usually 0.5-1.5 tonnes and airfreight usually 10-20kg)

Planning and preparation 7 - Participate in a trade mission

If your company is looking to break into a new market or is keen to increase its sales in an existing export market then consider participating in an outward trade mission. At the very least you will return with a greater understanding of the marketplace and an invaluable list of contacts to follow up for future business.

Many trade missions are government sponsored and offer financial assistance to exporters travelling as a group (of between 10 and 30 people) provided they are organised by an approved sponsor, such as Business Links, Chambers of Commerce and trade associations. Some missions are privately sponsored.

Trade missions will often focus on a specific industry sector that has been identified as a major business growth area in the target market, while other missions will be open to companies across all sectors. A mission will generally visit between one and three countries over a one to two week period, and may coincide with a major trade exhibition in one of the host countries. Participants will often get the opportunity to meet with key purchasers and distributors in their sector and/or meet with potential partners for joint ventures.

Return on investment

The cost of participating in a trade mission (including hours spent away from the office) should be measured against the expected benefits of participation. While there are no guarantees, you may achieve the following:

• Confirmed business
• Potential business
• Sign a distributor or agent
• Agree a joint venture
• In-depth understanding of the marketplace
• Networking, often with people you would not normally get a chance to meet
• Establish new contacts and champions
• Develop relationships with existing contacts
• Receive advice and support from your mission colleagues

Planning and preparation 6 -Expand your business in an international market

Directly exporting your goods into an international market is only one way of expanding abroad. It is also worth exploring other options such as licensing, joint ventures or setting up offshore operations.

Licensing
Licensing involves a contractual agreement between you and a foreign company, whereby they manufacture, distribute and/or sell your product or service as set out in the license.

Advantages:

* Receive payment for license
* Rapid entry into the market
* No capital needed to establish manufacturing operations abroad
* Quick returns in comparison with other market entry methods

Disadvantages:

* Loss of control over manufacturing and marketing of goods
* Your partner can become your competitor
* Preparing the licensing agreement - it could be timely and costly

Joint ventures
Joint ventures are contractual arrangements with a foreign partner from your chosen export market. There are two basic types of joint venture:

* Equity partnership - where the partners are equal
* Non-equity partnership - where the host country partner contributes a greater percentage of equity in the company

In some countries, a joint venture is the only legal way for a foreign company to set up operations.

Advantages:

* Control over foreign operations
* Extensive knowledge of the target market by the partner
* Partner's business and political contacts may help to smooth the market entry

Disadvantages:

* Requires more investment than licensing
* Requires training, management and transfer of technology
* Risks connected with geographical and cultural factors, which may interfere with day-to-day operations
* Dealing with entirely new management in a different country
* Communication problems if partners do not have a shared language

International base
Offshore production requires either setting up your own facility or subcontracting the manufacturing of your products to an assembly operator.

Advantages:

* Offers greater control over operations
* Lower transportation costs
* No prohibitive tariffs or duties (as with imports)
* Lower production costs
* Foreign government investment incentives (e.g. tax holidays)

Disadvantages:

* Requires greater investment than joint ventures and licensing manufacturing
* Substantial commitment of time
* Risks are relatively high

If you decide set up offshore operations, you will need to consider whether to acquire and adapt an existing facility or to construct a new one. The key factors to consider are:

* Legal and tax ramifications
* Location to set up operations
* Method of financing the foreign investment

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Planning and preparation - Develop a market entry strategy

Many companies successfully operate in a niche market without ever expanding into new markets. However, some businesses could achieve increased sales, brand awareness and business stability by entering a new market. Developing a market entry strategy involves a thorough analysis of your potential competitors and possible customers.

Some of the relevant factors that are important in deciding the viability of entry into a particular market are suggested below:

Barriers: Are there any legal barriers that need to be overcome in order to enter the market? For example, you need a licence to enter the pub trade. Consider whether you will need an export licence to enter a particular international market. What are the limitations to trade, such as high tariff levels and quotas? Do you have the required level of knowledge and training in exporting procedures?

Product or service: Look at the product or service that you are intending to sell. Consider the following questions:

• How easy is it to maintain?
• Does it have a unique selling point (USP) or direct competitive advantage (DCA)?
• Is it fashionable?
• Does it have limited appeal? If yes, would a new market be receptive?
• Will it be in demand for a long or short period of time?
• Is it easy to transport or will it need special treatment?
• Is the product restricted abroad? (e.g. tariffs, quotas or non-tariff barriers)
• Are there product modifications required?

Resources: Work out how much of your company's resources can be dedicated to launching in the new market - factor in time and the organisational, marketing and technical skills needed. Will you be stretching your resources too tightly? It is better to keep a small customer base happy than to dissatisfy a larger one.

Competition: Look at the competition - is it aggressive? Are most of the suppliers to your target market domestic or international? Will this impact on your likely success? How will you position yourself in the market to stand out from competitors?

Public policy: Find out whether the government offers subsidies or takes taxes from the market in question. Are there any governmental incentives for exporters?

International markets: There are several methods of international market entry. These include:

• Exporting (directly or indirectly)
• Licensing
• Joint venture
• Offshore production

There are two ways to export: selling your product or service directly to an international company or customer, or indirectly by using an export intermediary. These include commissioned agents, distributors and export management or trading companies.

A joint venture with an already established business may be the most effective way to gain entry into a market. They already know the market, have the distribution framework in place and less capital is required. International joint ventures are often accomplished through licensing or offshore production, which requires either establishing your own facility or subcontracting the manufacturing of your product to an assembly operator.

Pricing: Having decided that it is viable to enter the market, the next major decision is that of pricing. Just how much should be charged for the product or service? Take into account the following costs:

• Production
• Packaging
• Transportation
• Promotion

Also consider the basis on which you will sell the goods, i.e. who is responsible for the various exporting costs?

Planning and preparation 5 - Source products from overseas

In today's competitive global marketplace there are many benefits to importing goods and services, whether you do it regularly or on an ad hoc basis.

Types of products imported:

• Raw materials
• Components/parts
• Finished goods
• MRO (Maintenance, Repair and Overhaul) services
• Technology

Advantages

Sourcing products from overseas may help you to:

• Reduce costs
• Take advantage of favourable exchange rates
• Access products and technologies not available domestically
• Provide product variety
• Offer better quality products
• Overcome domestic shortages
• Reduce dependency on a limited domestic supplier base

Disadvantages

There are, of course, certain risks when importing:

• Financial - currency exchange rate fluctuations and tariffs
• Political - embargoes, sanctions or quotas on imported goods
• Operational - goods arrive late or damaged
• Regulatory - products may be subject to UK or EU standards, and may require product testing and certification
• Cultural - negotiations fail or are delayed because of language and cultural barriers

Plan your requirements

The first step in sourcing products from overseas is to plan your requirements:

• Objectives - what do you hope to achieve by importing?
• Products/services - what do you wish to import? Be as specific as possible
• Additional requirements - will you need after-sales support?
• Warehousing - how and where will you store the imported goods?
• Lead times - how quickly will you need the goods?
• Budget - will importing goods be cost effective? Be aware of hidden extras

Sourcing products

Depending on what products you require and their respective availability you may have a wide or limited choice of suppliers. Key steps to follow:

• Identify countries that supply required product
• Identify specific suppliers from your preferred country(s)
• Assess any country or regional opportunities
• Conduct a financial analysis
• Identify any risks

Choosing a supplier

You may decide to buy directly from the manufacturer/service provider or to use an intermediary. Whatever method you choose, there are some key factors to consider when choosing an international supplier:

• Do the products/services meet your requirements?
• How many years have they been operating for?
• Are they financially stable? Make sure this is verified
• Do they have any quality marks? Are these UK recognised?
• Who else do they supply? Can they provide references?
• Do they belong to any trade bodies or professional organisations?
• What are their delivery schedules?
• Are their terms & conditions satisfactory?

Sourcing suppliers

Finding the right international supplier can be daunting, begin by:

• Asking business colleagues to recommend a supplier
• Searching the web for international directories of suppliers providing the products/services you require
• Contacting trade associations, local embassies and DTI trade desks for a list of potential suppliers
• Reading international trade reports on key suppliers in your industry
• Visiting the country of interest on a fact-finding mission

Preparing the contract

Once you have found a supplier, ensure that you draw up a contract that is satisfactory to both parties. Include:

• Product pricing and terms of sale
• Method of payment
• Amendment clauses
• Responsibilities of both parties
• Other conditions of contract

In today's competitive global marketplace there are many benefits to importing goods and services, whether you do it regularly or on an ad hoc basis.

Types of products imported:

• Raw materials
• Components/parts
• Finished goods
• MRO (Maintenance, Repair and Overhaul) services
• Technology

Advantages

Sourcing products from overseas may help you to:

• Reduce costs
• Take advantage of favourable exchange rates
• Access products and technologies not available domestically
• Provide product variety
• Offer better quality products
• Overcome domestic shortages
• Reduce dependency on a limited domestic supplier base

Disadvantages

There are, of course, certain risks when importing:

• Financial - currency exchange rate fluctuations and tariffs
• Political - embargoes, sanctions or quotas on imported goods
• Operational - goods arrive late or damaged
• Regulatory - products may be subject to UK or EU standards, and may require product testing and certification
• Cultural - negotiations fail or are delayed because of language and cultural barriers

Plan your requirements

The first step in sourcing products from overseas is to plan your requirements:

• Objectives - what do you hope to achieve by importing?
• Products/services - what do you wish to import? Be as specific as possible
• Additional requirements - will you need after-sales support?
• Warehousing - how and where will you store the imported goods?
• Lead times - how quickly will you need the goods?
• Budget - will importing goods be cost effective? Be aware of hidden extras

Sourcing products

Depending on what products you require and their respective availability you may have a wide or limited choice of suppliers. Key steps to follow:

• Identify countries that supply required product
• Identify specific suppliers from your preferred country(s)
• Assess any country or regional opportunities
• Conduct a financial analysis
• Identify any risks

Choosing a supplier

You may decide to buy directly from the manufacturer/service provider or to use an intermediary. Whatever method you choose, there are some key factors to consider when choosing an international supplier:

• Do the products/services meet your requirements?
• How many years have they been operating for?
• Are they financially stable? Make sure this is verified
• Do they have any quality marks? Are these UK recognised?
• Who else do they supply? Can they provide references?
• Do they belong to any trade bodies or professional organisations?
• What are their delivery schedules?
• Are their terms & conditions satisfactory?

Sourcing suppliers

Finding the right international supplier can be daunting, begin by:

• Asking business colleagues to recommend a supplier
• Searching the web for international directories of suppliers providing the products/services you require
• Contacting trade associations, local embassies and DTI trade desks for a list of potential suppliers
• Reading international trade reports on key suppliers in your industry
• Visiting the country of interest on a fact-finding mission

Preparing the contract

Once you have found a supplier, ensure that you draw up a contract that is satisfactory to both parties. Include:

• Product pricing and terms of sale
• Method of payment
• Amendment clauses
• Responsibilities of both parties
• Other conditions of contract