Digg This
Talk Back
Post a CommentHousingZone Most Popular Stories
- International Residential Codes Available Online
- Growing your remodeling business in the current economy
- 2008 Remodeler of the Year
- Develop Land Or Buy Lots? Home Builders Face Dilemma
- ProBuilder Product Report: Kitchen Appliances
- What Can You Recycle?
- A smaller home can still be beautiful
- Wood vs. Engineered Lumber
- Myths and Facts About Automatic Fire Sprinklers
- How to Use Percentage-of-Completion Accounting
Chart an Effective Course
Chuck Russell secures success for his company by developing a business plan in-house
Alicia Garceau, Managing Editor
October 1, 2000
Professional Remodeler
Chuck Russell’s business plan is far from perfect, but it accomplishes his main objective: keeping him on course. Seven years ago, a conference on developing a business plan piqued his interest in developing one for his growing company. That first attempt was rudimentary, at best, but Russell discovered that the process of developing the plan himself with the assistance of his staff was of great benefit to his company. Even if the plan sits on a shelf for a year, Russell says, the simple act of developing it keeps both owner and staff tuned into the company.
|
PR: What are the benefits of developing a business plan?
Russell: It helps you manage the circumstances that impact the future of your company and helps you keep up with your changing business. You can make the most of your profit potential. You outline your goals and company structure, and you can see how it balances. You can see that there’s something that needs to be tuned or corrected in order to maximize the potential of either your current employees or your current financial condition. Whatever it might be, it’s all in one place. Developing your plan helps you focus your attention on your goals and helps eliminate random business decisions. It helps you use your resources more efficiently.
PR: In the initial stages, how long did it take to develop your plan?
Russell: It actually took a year [of] working on it when I had the time. I probably put a total of 15 to 20 hours into the original plan. I think that’s pretty reasonable for a first plan.
PR: How do you decide what goes into a business plan?
Russell: Everybody has suggestions on why [you should] write a plan, the steps in writing the plan, what should be included in the plan. I’ve read several books and got ideas from different places and then customized [our] plan. I took out of those things what I felt was appropriate for us. I’ve been working on it for quite a few years in my spare time, and I’ve developed a plan that I think is very workable and goes along with our company.
It doesn’t have a lot of dry statistics, because those can be manipulated really any way you want. It’s more of a good read, and I’ve found that’s more impressive.
PR: What’s included in your business plan?
|
The second page of the plan is the table of contents, [followed by] the mission statement, [which] is our company motto and philosophy. It’s included in the first part of the plan, so again, anyone using the plan would have an idea of what we’re about. The company history explains when the company was founded, the direction it has gone over the years, major changes that were made in the company. It’s important for the user or reader to understand where you’re coming from and where you’ve been and how you’ve arrived at where you’re at today. Strengths and challenges are a part of the plan that really helps me. When you put those things in writing, you realize what you need to do and what you do well.
After the conclusion to the plan is our marketing plan. I put it after the conclusion because I think it’s a little separate from the actual business plan, but it should be included. The total plan is 21-22 pages long.
PR: Should people include all the sections that you’ve included?
Russell: They need to look at it from their own perspective. A business plan has to be somewhat structured. They have to include just about everything [I do] and maybe more if circumstances dictate it. If you look at a list, they’re going to want production capabilities or projections, [such as] who your major suppliers are, product development, competition, which I don’t address. A lot of people will tell you that it should be in your business plan. I haven’t had to do that, and I haven’t felt it was necessary in the plan, but some people may.
PR: How often do you revise the plan?
Russell: I think it needs to be done fairly often to be accurate. It takes about two to three hours to completely revise the plan every year, [which includes] putting in new information and changing any data. We do it on a yearly basis because we tie it into our yearly planning and budget writing.
I specifically make a point to do it once a year. I go through it carefully. It always looks different a year later when you read it. You think of things that you’ve left out or maybe things you don’t want to put in there that you repeated two or three times. Mainly, it has to do with the status of the company, such as jobs in process or budget changes or goal changes. I usually update those midyear.
PR: What is the process?
|
After that retreat, we have an executive meeting and review that plan, review the year coming up, review the budget projections that I have roughed in at that retreat, and make a few more notes in the plan. Then it goes to my office manager to rewrite it. She comes up with some things that maybe I have missed. The actual work on the plan probably doesn’t take more than maybe four to five hours a year now that it’s developed.
PR: How do you evaluate the success of your plan?
|
PR: Westhill has been around for 25 years, and you’ve had a business plan in place for the past five. What is the difference between operating with a business plan and operating without one?
© 2008, Reed Business Information, a division of Reed Elsevier Inc. All Rights Reserved.
Russell: In the strategic planning long-term, I think it’s helped a lot. It’s kept us on track. A lot of times you get sidetracked, you get led in different directions. It guides us.