4 Frameworks to Consider When Building a Business Plan
1. The Market Model - Business/Financial performance is modeled on the number of markets a business is able to support and grow over a period of time.
Key assumptions in this framework include: what's the market size? How many competitors exist in a given market? What does the business believe s its attainable market share? How can the business acquire/fulfill/grow that share
2. Supply / Demand - Depending on what I can produce (supply) how many customers of a given size are need to support (demand)
Key assumptions of this framework include: How many customers exist in a given market? How big are they? How can the business acquire/fulfill/grow the customer base by customer size? How long will it take me do so?
3. Sales planning - Business/Financial performance is based on the scalability of the sales force.
Key assumptions in this framework include: What is the appropriate hiring rate for sales people? How quickly will they achieve certain sales milestones? What's the appropriate incentive based comp structure? Do accounts differ by client size/industry? What turnover should I expect?
4. Acquisition planning - Business/Financial performance is based on the ability "buy" your way into markets
Key assumptions in this framework include: Markets dynamics: are there many small players or a few dominant? Does the business model permit economies of scale? Typical or a typical acquisition deal structures?
