What’s in a Business Plan?

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When you think of a business plan it may well be that you picture a rather boring document held in a sweaty hand as you approach the bank manager for funding. This may well happen, but the business plan itself should be so much more than this.

Hopefully by now you have a good idea of what your team is, where it is going and how you are going to get there. What remains is to communicate your strategies and plans to any interested parties. The simplest way to this is to put together a business plan.

There are numerous templates available for free on the internet, and it is recommended that you obtain one that suits what you want to say whilst also thematically aligning with your teams branding and color scheme. Remember to be consistent in everything that you do!

I would further recommended that you put together a “master” plan that contains all the information possible about your team. At the start just preparing such a document can be very helpful in crystallizing exactly what you want to achieve and how you are going to do it. Later, if necessary, sections can be removed should they not be appropriate for the intended recipient. For instance, in a document you are making public you may be happy to discuss general financial management strategies, but not quite so happy to have your budgetary and accounting information freely available to opponents!

Sections that you may place in this master file could include (but not be limited to) the following:

  • Introduction/Executive Summary, briefly outline your team
  • Team contact details
  • Driver/Team member profiles
  • Details of team’s competition vehicles(s)
  • Current sponsors/partners
  • Historical team results
  • Planned events/results for the current season
  • Strategy Statements
  • SWOT Analysis
  • Stakeholder Analysis
  • Balanced Scorecard
  • Financial data (Budgets, Profit/Loss)

The critical point to grasp is that your business plan should be a living document. Update it regularly so that it contains current information. Your plan should grow with your team, but remember to remove any data that is out of date. You should illustrate your guide with pictures of the team in action. This can be worth a thousand words…

When forwarding it to third parties judge how much data they need. Try to keep it comprehensive but as simple as possible. The reader needs enough information to understand your team, but will not want to become bogged down in minutiae.

Take some time to put together a slick and cogent document. Remember that this may well be the single thing that your team is judged on. You never know when a potential sponsor will ask for more details…

If it comes across as professional, then this is how you will be judged and treated. If not…

The Balanced Scorecard – A Major Tool in your Box!

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The balanced scorecard is a performance management tool which is often also utilized to embed corporate strategy within an organization. Over the past twenty-five years its use has become almost endemic within business, and it is used by almost every major business entity in the world.

The objectives set by a company (or Team!) will have been formulated as a means to enact its declared strategy for future success. In other words they show what a company believes it needs to do at the strategic level to find success.

The balanced scorecard takes these broad objectives, and changes them into specific goals to be achieved at the tactical level. These are often referred to as Key Performance Indicators, and the conventional wisdom is that if these KPI’s are achieved then so will be the greater objective. As with the goals your KPI’s should be SMART in nature. It is normal for these to be listed as metrics that will quite clearly have, or have not, been achieved. If objectives show what you are going to do, then the KPI’s show how you are going to do it.

The most common form of balanced scorecard splits the KPI’s into four separate perspectives as shown below. These are supposed to be causal in nature as shown in the diagram, with success at each level proceeding up the chain and driving further success. Finance normally comes at the top of the system as it is seen as a lagging indicator. The conventional wisdom is that financial benefits will only be seen after the rest of your KPI’s have been achieved. Working backwards this is why learning is at the bottom. This is seen as a leading indicator as success here will be seen before the overall benefits become apparent.

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In basis this is all very simple. You learn new skills. This allows you to improve the way that you do things. This pleases your customers (think stakeholders rather than the more literal meaning of customer) who are subsequently more inclined to deal with/support the organization. As a result of this there is a measurable financial gain.

Let’s look at a simple illustration. Your car is quite old and has been spending a lot of time in the garage for repairs. To counter this one of the team takes a welding course. This means that the car is available in house more, and hence is better prepared. The scrutineers are happy with the standard of your vehicle, which now runs more efficiently. This keeps promoters and sponsors happy. The net result: Reduced maintenance costs and (hopefully) increased sponsorship income. This can be shown pictographically in a strategy map, which sometimes can help when deciding on how to put it all together.

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Although not a business panacea, the balanced scorecard certainly can drive you to success if used well…

How SMART are your Goals?

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No doubt your season has some objectives. Hopefully you have framed these in goals. This may prove to be quite a simple process, or it may be quite difficult to capture exactly what you want to do. Either way your goals need to be SMART in nature.

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Smart goals are nothing new in the business world, but the system does provide a framework to allow you to set objectives that will drive you and your team to where you want to be. Initially, let’s look at what a SMART goal is.

Firstly, the goal must be specific. It is all very well to say that your goal is to have a good season, but what does this statement really mean? It will be interpreted differently by everyone who reads it. It lacks the definition to explain exactly what is required for success.

With this being the case it may be better to frame this goal something like ‘Complete 10 races’, or ‘Podium in 3 races’. The specifics will depend upon your own expectations and experience.

With this in mind the goals that you set should be achievable. There is nothing wrong with setting difficult goals. In fact, this is preferable. Your history may show that you have completed 10 races every year for the past decade. In this case it is not really much of a challenge and the whole exercise may become meaningless. Similarly, if you have never stood on the podium in your life setting the expectation of three finishes in this position may not be realistic unless there is a fundamental change to your team such as a new or improved car. When you are composing your goals think about what you might achieve if you work hard at your racing and everything goes as well as could be reasonably expected. This is where the bar should be set.

Goals should also be relevant. Your strategy should lead you towards goals that drive your team in the direction you want to go. Having a goal to do so much charity work may be very philanthropic, but unless this is stated as a value or aim of the team (which it may well be!) it is of little relevance to how you will manage the season for success whereas earning two pole positions may be very relevant to how you are going to achieve a top five finish in the championship.

Finally, all goals should be time constrained. It is often a good thing to have short, medium and long term goals, but all should have a time frame for completion. Short term goals may relate to this season such as place on the podium a set number of times. Medium term goals will normally be within a 5-10 year span, perhaps get a new car or be racing at a certain level by a given season. Long term goals are just that, but they should still be clearly defined.

There is also an old adage in the business word that “if you can’t measure it, you can’t manage it”. it has been found that this principle is not without merit. Use goals to drive your season, not the other way round!

What can Japanese Industry Offer Motorsport?

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The answer is of course quite a lot!

Think about your racing team. When you are searching for improvement how do you do it? The chances are that you look for a single aspect that can be changed that will bring a big reward such as a new car or a new member of the team who has extra skills. This strategy (known as process re-engineering….) is of course perfectly viable. It will work well, especially earlier in the life cycle of your team where you are learning fast how to do things successfully.

But what about later on when you think that you have all the bases covered? It can be far harder to find that single panacea that will bring a major improvement.

This is where industry comes in. In many major enterprises the above factor has been noticed, and an alternative method found known as ‘Kaizen’.

Although it can be horrifically complicated at corporate level, in essence under Kaizen the organisation seeks perfection in all areas, which of course is unobtainable as there is always room for improvement. Here, rather than the single big hit the ethos is on small, continuous improvements across the board with far more frequent assessment of attainment. Take small steps but always push to be that little bit better!

One of the big advantages of this is that it forces you to look at EVERYTHING you do. If you are looking for that single hit the chances are that you will focus on the ‘sexier’ aspects of your operation, and let the more mundane processes fend for themselves…..

For this to work you will need buy in from all members of your team. In some of the big Japanese corporations, such as Toyota, Kaizen is not just a business methodology but a central tenet of being that is adhered to with fanatical zeal.

So which is better? The occasional big leap forward or a gradual but steady climb up the grid? You decide….

Sponsorship – Where to Start!

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There is No Such Thing as a Free Lunch!

Motorsport lore often holds that there was a time when companies would fall over themselves to give money to racing teams for no more than putting their logo on the car. If this was indeed ever the case, as you may well have already discovered this most certainly no longer holds true.

Finding sponsors is difficult, time consuming and frustrating. It will, however, be made (relatively) easier if you approach it in a professional manner.

Your potential sponsors, or partners as the modern ethos goes, will almost certainly be in business to make money. For them to give some of it to you so that you can have fun on the weekend you must provide a solid business grounding for the transaction. Simply put your proposal must add value to their own business model. This does not necessarily have to be financial in nature, but it must be tangible.

Who to Approach

Essentially any company in existence is a potential sponsor! With this said you will soon find that gaining engagement and progressing to an actual agreement is far from easy. You can save a lot of wasted time and effort by doing some homework first and approaching companies with whom there is a genuine chance of interest. You are going to have to sell your brand, and this can be a very hard task!

To begin with you must be realistic in your expectations, and tailor your strategy to match. If you are a club competitor it is highly unlikely that you are going to strike a multi million pound deal with a multi-national. Equally, if you are mounting an attack on Le Mans it is equally unlikely that Jones the Butcher on the high street will be in a position to capitalize your needs.

You should also be aware that any sponsorship deal may not actually involve the transfer of funds. If you are getting decals made for your car the vendor may be prepared to offer a reduced price or even a free service for incorporating his logo into the design (but DO NOT let them do this for free!) You should remember that everyone is a potential sponsor! Equally you may make a deal with your local auto factor to buy spares at a discounted rate. If it is reducing costs or increasing assets this is the same from a financial point of view to getting cash in the bank. Do not be blind to this fact when you are deciding what a potential sponsor can offer you!

Geography also plays a role. Again, if you are a club or regional competitor it is unlikely that you will find much success with a small business from the other end of the country, and even if you did it may not be cost effective should your deal involve travel there to do promotional work for your sponsor.

As mentioned earlier your strategy statements may help you to further winnow the field. If you are a family run team this may resonate with a family run business. If you are the up and coming young star then perhaps you should approach a company whose main customers are also young and vibrant, possibly selling goods such as computer games or skateboards.

You should spend some time doing research and come up with a list of around a dozen ‘targets’ who you believe offer the best chance of being seriously interested in your proposal. If none of these are successful move on to the next dozen and so on!

How to approach potential sponsors is a difficult question. You should aim to get your business plan and guide to sponsors to someone high enough in the organisation who is at least able to commence discussion and negotiations.

Emails are of course fast and easy, but are equally easy to delete. Hard copies in the post cost more and are equally easy to dispose of. If possible it will be best to visit the prospective partner with your paperwork to hand. If may be preferable to book an appointment, especially for a larger company rather than just turning up unannounced, although you may think this will work best for a very small local business.

A vital element of this first contact is that you will probably never get this opportunity again. The impression that you make, good or bad, will last way beyond the meeting. It is of prime importance that you come across as a credible entity or your submission will not get far. Make sure that you are ready! Dress appropriately. For a small local business, a team polo shirt and jeans may be acceptable. For a larger business you may need to put on more formal attire. It is a small price to pay for success!

Be prepared to discuss what your team is, what it wants to do and how it is going to do it. You have to sell your brand and show that there is a valid business case for supporting you in competition. Your strategy statements and budgets will help here. Have a sensible level of commitment in mind. If you ask for too much then the door will close quickly. Equally if you ask for too little it is difficult to then up the ante without losing credibility. It is a fine line to walk and you must tread carefully. Remember that everything you say reflects directly on your brand and team. To sell the deal you will also need to discuss critically what you can do for the sponsor….

Adding Value to Your Team

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Running your team will require that you undertake a number of activities. These may be primary in nature such as actual competition, or support such as improving your car. One thing remains true in either case – every activity should add value to your team as collectively they will form your competitive advantage.

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The complexity of activity will obviously depend upon which level you are competing at and the resources that you have available.

The support activities are your bedrock. Technical development will include preparing your car. At club level this may mean an oil change and checking the tires. In Formula 1 a slightly different level of preparation and innovation may be appropriate! Human resource management involves having the right people doing the right things at the right time, again in relation to your team size. Team infrastructure brings together the technical management side of your team, which is what we are discussing today.

With these in place you can look at the more hands on Primary Activities which directly lead to your success. Marketing your team is the search for sponsorship. Providing service relates to keeping stakeholders such as sponsors and stewards happy, and then there is the rationale behind it all, putting your car on the grid and looking for the podium!

What all these elements have in common is that they build to your success, and each should add a potential advantage. You should strive to bring differentiation to your team. Look for something that stakeholders can perceive as unique that will encourage brand loyalty. To achieve this the product/services that you offer will have surpass their expectations in comparison to other teams.

All of which will take some time and effort, and perhaps just a little bit of help….

Digital Media – #Help or #Hindrance

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In the modern world if your website is your shop window, then social media is the street that people travel down past it. In marketing circles social media is regarded as the biggest innovation, biggest opportunity, least well understood and most dangerous phenomenon in the current market. It is believed that its use can make, or break, an enterprise in record time. What you cannot do is ignore it!

There are a plethora of available social media platforms, each having its own strengths, weaknesses and target audience. You should evaluate these carefully and decide which provide the best vehicle to get your message across. If you use social media yourself, perhaps you have a Facebook account, then this may be a good place to start, although you should start a new account for your team rather than use your personal one.

Beware! Having a bad social media presence may be worse than having none at all. Not being talked about is probably preferable to being discussed negatively! With this in mind it may be better to use one platform well, rather than half a dozen poorly. Once you start down the social media road you will have to keep your content current, which can take a surprising amount of time. As time goes on you can grow your social presence organically with your team and add further platforms as they become relevant.

The big dangers with social media (from a marketing stance) are ironically the same as its strengths. It is widely (perhaps universally) available and it is immediate. Twenty years ago, if Mr Jones bought your product and it was of poor quality then this was not a great concern as, unless he was a national journalist, Mr Jones had very little reach. He could raise his concerns with friends and family, but this was of little consequence for a major national or international advertising campaign. These days Mr Jones can immediately vent his displeasure in the digital world and possibly reach millions of potential customers. This is why managing your social media presence is so important, and that you have a strategy to do it well. If you ignore or are dismissive of his concerns then you do not care about customers. If you issue an overly contrite apology then you can be seen as weak or insincere. It can be a very fine line to walk.

The thing to remember is that every word that you write, or is written, about your team (and therefore your brand) is out there, and it is out there forever. Take your time and compose your posts carefully. Make sure that they reflect your teams brand values. For your team’s posts keep things professional. Don’t use texting slang (unless of course you are the hot new kid on the block and this is part of your branding!). Think about who the posts are aimed at. In personal posts you are talking to friends and family. In Team posts you are communicating with stakeholders with whom you may wish to do business. They are very different things!