business plan development and evaluation

Business Plan Evaluation

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What is Business Plan Evaluation?

A business plan evaluation is a critical process that involves the assessment of a business plan to determine its feasibility, viability, and potential for success. This process is crucial for entrepreneurs, investors, and other stakeholders as it helps them make informed decisions about the business. The evaluation process involves analyzing various aspects of the business plan, including the business model, market analysis, financial projections, and management team.

The purpose of a business plan evaluation is to identify strengths and weaknesses in the plan, assess the feasibility of the business idea, evaluate the potential for profitability, and determine the likelihood of achieving the business objectives. The evaluation process also helps identify areas where improvements can be made to enhance the chances of success. This process is particularly important for solopreneurs who are solely responsible for the success or failure of their business.

Importance of Business Plan Evaluation

The evaluation of a business plan is an essential step in the business planning process. It provides an opportunity for the entrepreneur to critically examine their business idea and identify potential challenges and opportunities . The evaluation process also provides valuable insights that can help improve the business plan and increase the chances of success.

For investors, a business plan evaluation is a crucial tool for risk assessment. It allows them to assess the viability of the business idea, the competence of the management team, and the potential for return on investment. This information is vital in making investment decisions.

For Solopreneurs

For solopreneurs, the evaluation of a business plan is particularly important. As they are solely responsible for the success or failure of their business, it is crucial that they thoroughly evaluate their business plan to ensure that it is feasible, viable, and has the potential to be profitable.

The evaluation process can help solopreneurs identify potential challenges and opportunities, assess the feasibility of their business idea, and determine the likelihood of achieving their business objectives. This information can be invaluable in helping them make informed decisions about their business.

For Investors

Investors use the evaluation process to determine whether or not to invest in a business. They look at various aspects of the business plan, including the business model, market analysis, financial projections, and management team, to assess the potential for success. If the evaluation reveals that the business plan is solid and has a high potential for success, the investor may decide to invest in the business.

Components of a Business Plan Evaluation

A business plan evaluation involves the analysis of various components of the business plan. These components include the executive summary, business description, market analysis, organization and management, product line or service, marketing and sales, and financial projections.

Each of these components plays a crucial role in the overall success of the business, and therefore, they must be thoroughly evaluated to ensure that they are realistic, achievable, and aligned with the business objectives.

Executive Summary

The executive summary is the first section of a business plan and provides a brief overview of the business. It includes information about the business concept, the business model, the target market, the competitive advantage, and the financial projections. The executive summary is often the first thing that investors read, and therefore, it must be compelling and persuasive.

In the evaluation process, the executive summary is assessed to determine whether it clearly and concisely presents the business idea and the plan for achieving the business objectives. The evaluator also assesses whether the executive summary is compelling and persuasive enough to attract the attention of investors.

Business Description

The business description provides detailed information about the business. It includes information about the nature of the business, the industry, the business model, the products or services, and the target market. The business description also provides information about the business's competitive advantage and how it plans to achieve its objectives.

In the evaluation process, the business description is assessed to determine whether it provides a clear and comprehensive description of the business. The evaluator also assesses whether the business description clearly outlines the business's competitive advantage and how it plans to achieve its objectives.

Methods of Business Plan Evaluation

There are several methods that can be used to evaluate a business plan. These methods include the SWOT analysis, the feasibility analysis, the competitive analysis, and the financial analysis. Each of these methods provides a different perspective on the business plan and can provide valuable insights into the potential for success.

It's important to note that no single method can provide a complete evaluation of a business plan. Therefore, it's recommended to use a combination of these methods to get a comprehensive understanding of the business plan.

SWOT Analysis

SWOT analysis is a strategic planning tool that is used to identify the strengths, weaknesses, opportunities, and threats related to a business. This method involves examining the internal and external factors that can affect the success of the business.

In the evaluation process, a SWOT analysis can provide valuable insights into the potential for success of the business. It can help identify the strengths and weaknesses of the business plan, as well as the opportunities and threats in the market.

Feasibility Analysis

A feasibility analysis is a process that is used to determine whether a business idea is viable. This method involves assessing the practicality of the business idea and whether it can be successfully implemented.

In the evaluation process, a feasibility analysis can provide valuable insights into the feasibility of the business plan. It can help determine whether the business idea is practical and whether it can be successfully implemented.

In conclusion, a business plan evaluation is a critical process that involves the assessment of a business plan to determine its feasibility, viability, and potential for success. This process is crucial for entrepreneurs, investors, and other stakeholders as it helps them make informed decisions about the business.

The evaluation process involves analyzing various aspects of the business plan, including the business model, market analysis, financial projections, and management team. The purpose of a business plan evaluation is to identify strengths and weaknesses in the plan, assess the feasibility of the business idea, evaluate the potential for profitability, and determine the likelihood of achieving the business objectives.

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2 Developing a Business Plan

Learning Objectives

After completing this chapter, you will be able to

• Describe the purposes for business planning
• Describe common business planning principles
• Explain common business plan development guidelines and tools
• List and explain the elements of the business plan development process
• Explain the purposes of each element of the business plan development process
• Explain how applying the business plan development process can aid in developing a business plan that will meet entrepreneurs’ goals

This chapter describes the purposes, principles, and the general concepts and tools for business planning, and the process for developing a business plan.

Purposes for Developing Business Plans

Business plans are developed for both internal and external purposes. Internally, entrepreneurs develop business plans to help put the pieces of their business together. Externally, the most common purpose is to raise capital.

Internal Purposes

As the road map for a business’s development, the business plan

• Defines the vision for the company
• Establishes the company’s strategy
• Describes how the strategy will be implemented
• Provides a framework for analysis of key issues
• Provides a plan for the development of the business
• Helps the entrepreneur develop and measure critical success factors
• Helps the entrepreneur to be realistic and test theories

External Purposes

The business plan provides the most complete source of information for valuation of the business. Thus, it is often the main method of describing a company to external audiences such as potential sources for financing and key personnel being recruited. It should assist outside parties to understand the current status of the company, its opportunities, and its needs for resources such as capital and personnel.

Business Plan Development Principles [1]

Hindle and Mainprize suggested that business plan writers must strive to effectively communicate their expectations about the nature of an uncertain future and to project credibility. The liabilities of newness make communicating the expected future of new ventures much more difficult than for existing businesses. Consequently, business plan writers should adhere to five specific communication principles .

First, business plans must be written to meet the expectations of targeted readers in terms of what they need to know to support the proposed business. They should also lay out the milestones that investors or other targeted readers need to know. Finally, writers must clearly outline the opportunity , the context within the proposed venture will operate (internal and external environment), and the business model.

There are also five business plan credibility principles that writers should consider. Business plan writers should build and establish their credibility by highlighting important and relevant information about the venture team . Writers need to elaborate on the plans they outline in their document so that targeted readers have the information they need to assess the plan’s credibility. To build and establish credibility, they must  integrate scenarios to show that the entrepreneur has made realistic assumptions and has effectively anticipated what the future holds for their proposed venture. Writers need to provide comprehensive and realistic financial links between all relevant components of the plan. Finally, they must outline the deal , or the value that targeted readers should expect to derive from their involvement with the venture. [2]

General Guidelines for Developing Business Plans

Many businesses must have a business plan to achieve their goals. Using a standard format helps the reader understand that the you have thought everything through, and that the returns justify the risk. The following are some basic guidelines for business plan development.

As You Write Your Business Plan

• If appropriate, include nice, catchy, professional graphics on your title page to make it appealing to targeted readers, but don’t go overboard.
• Bind your document so readers can go through it easily without it falling apart. You might use a three-ring binder, coil binding, or a similar method. Make sure the binding method you use does not obscure the information next to where it is bound.
• Make certain all of your pages are ordered and numbered correctly.
• The usual business plan convention is to number all major sections and subsections within your plan using the format as follows:

1. First main heading

1.1 First subheading under the first main heading

1.1.1. First sub-subheading under the first subheading

2. Second main heading

2.1 First subheading under the second main heading

Use the styles and references features in Word to automatically number and format your section titles and to generate your table of contents. Be sure that the last thing you do before printing your document is update your automatic numbering and automatically generated tables. If you fail to do this, your numbering may be incorrect.

5. Prior to submitting your plan, be 100% certain each of the following requirements are met:

• Everything must be completely integrated. The written part must say exactly the same thing as the financial part.
• All financial statements must be completely linked and valid. Make sure all of your balance sheets balance.
• Everything must be correct. There should be NO spelling, grammar, sentence structure, referencing, or calculation errors.
• Your document must be well organized and formatted. The layout you choose should make the document easy to read and comprehend. All of your diagrams, charts, statements, and other additions should be easy to find and be located in the parts of the plan best suited to them.
• In some cases it can strengthen your business plan to show some information in both text and table or figure formats. You should avoid unnecessary repetition , however, as it is usually unnecessary—and even damaging—to state the same thing more than once.
• You should include all the information necessary for readers to understand everything in your document.
• The terms you use in your plan should be clear and consistent. For example, the following statement in a business plan would leave a reader completely confused: “There is a shortage of 100,000 units with competitors currently producing 25,000. We can help fill this huge gap in demand with our capacity to produce 5,000 units.” This statement might mean there is a total shortage of 100,000 units, but competitors are filling this gap by producing 25,000 per year; in which case there will only be a shortage for four years. However, it could mean that the annual shortage is 100,000 units and only 25,000 are produced each year, in which case the total shortage is very high and is growing each year.
• You must always provide the complete perspective by indicating the appropriate time frame, currency, size, or other measurement.
• If you use a percentage figure, you must indicate to what it refers—otherwise the number is meaningless to a reader.
• If your plan includes an international element, you must indicate in which currency or currencies the costs, revenues, prices, or other values are quoted. This can be solved by indicating up-front in the document in which currency all values will be quoted. Another option is to indicate each time which currency is being used, and sometimes you might want to indicate the value in more than one currency. Of course, you will need to assess the exchange rate risk to which you will be exposed and describe this in your document.

6. Ensure credibility is both established and maintained. [3]

• If a statement presents something as a fact when this fact is not generally known, always indicate the source. Unsupported statements damage credibility.
• Be specific. A business plan is simply not of value if it uses vague references to high demand, carefully set prices, and other weak phrasing. It must show hard numbers (properly referenced, of course), actual prices, and real data acquired through proper research. This is the only way to ensure your plan is considered credible.
• Your strategies must be integrated. For example, your pricing strategy must complement and mesh perfectly with your product/service strategy, distribution strategy, and promotions strategy. For example, you probably shouldn’t promote your product as a premium product if you plan to charge lower-than-market prices for it.

7. Before finalizing your business plan, re-read each section to evaluate whether it will appeal to your targeted readers.

Useful Resources for Business Planning

• Financial Performance Data : Innovation, Science and Economic Development Canada
• BizPal  for accessing licensing and other needs
• Canada Revenue Agency  for CRA asset classifications
• Canadian Company Capabilities database to use to find suppliers and buyers
• Merx for finding possible Canadian Government contracts
• The Conference Board of Canada
• Bank of Canada
• Scotia Bank
• Bank of Montreal
• Business Loan Calculator

Library Resources

NSCC Library – Business Databases [journals and other resources]

Employee compensation calculators

• Salary Data & Career Research Center – Canada

Existing business plans

The Word and Excel templates in this book

• Business Plan Template (Word)
• Business Plan Template (Excel)

Business Plan Development Tools

Credibility and communication.

According to Hindle and Mainprize, strong business plans effectively communicate the necessary information to the targeted readers while also establishing the credibility of the plan and the entrepreneur. [4] The Credibility and Communication Meter icon is used throughout this book to highlight where and how business plan writers can improve the quality of the information and enhance their and their plan’s credibility.

Use the following tools to improve the information in and credibility of your plans:

The Ratchet Effect

A ratchet is a tool that most of us are familiar with. It is useful because it helps its user accomplish something with each effort expended while guarding against losing past advancements.

With each word, sentence, paragraph, heading, chart, figure, and table you include in your final business plan, the ratchet should move ahead a notch because you achieve two important things.

First, only needed and relevant information is included.

Second, your additions build credibility in a relevant way.

Apply the ratchet effect by making sure that each and every sentence and paragraph conveys needed and relevant information that adds to your and your plan’s credibility. Use the following principles: Rarely—and only if it truly needs to be said again—repeat something that you have already said in your plan.

Avoid using killer phrases, like “there is no competition for our product” or “our product will sell itself, so we will not need to advertise it.” Any savvy reader will understand that these kinds of statements are naive and demonstrate a lack of understanding about how the market and other real-life factors actually work.

Avoid contradicting yourself. Make sure that what is said in the written part of your plan completely syncs with what is said in the other parts of your plan. Likewise, ensure that what you include in the financial parts of your plan is completely in sync with what is said the written part.

The Magic Formula

Apply the following magic formula throughout your write your plan.

• …consideration X affects my business because…
• …consideration X is subject to this trend into the future…
• …which means that we have decided to do this…(or) will implement this strategy…in response to how the expected trends for consideration X will affect my business

Here is an example of how you can use the magic formula to develop part of the pricing strategy in the marketing plan part of your business plan: We expect that our expenses to run our business will rise with the rate of inflation, which means that we must plan to increase the prices on our products to establish and maintain our profitability. The Bank of Canada (201x) has projected that the general inflation rate in <the city in which my business will operate> will be 3.0% in 201x, 3.5% in 201y, and 4.0% in 201z. In our projected financial statements, therefore, we have inflated both our expenses and our prices by those rates in those years.

Context and Framing

You must provide the right context when you describe situations, strategies, and other components of your plan. Business plan readers should never be left to guess why you indicate in a business plan that you will do something. Proper context is needed to help you frame the information you present.

When you frame the stories you tell correctly, the ratchet effect will happen and your plan will be stronger. One example of effective framing is when you, as the writer of the plan and the entrepreneur, clearly indicate how your education, expertise, relevant experiences, and network of contacts will make up for any lack of direct experience you have in running this particular kind of business. An example of ineffective framing is when you indicate that you lack experience with this type of business, or when you fail to specify how and why your levels of experience will affect the business’s development.

Prioritizing Problems

Don’t get hung up on something that doesn’t need an immediate solution. Instead, flag it for future consideration and move on. When you return to re-address the issue, it might no longer be a problem or you might have by then figured out a solution.

Process for Developing Business Plans

The business plan development process described next has been extensively tested with entrepreneurship students and has proven to provide the guidance entrepreneurs need to develop a business plan appropriate for their needs: a high power business plan .

Developing a high power business plan has six stages, which can be compared to a process for hosting a dinner for a few friends. A host hoping to make a good impression with their anticipated guests might analyze the situation at multiple levels to collect data on new alternatives for healthy ingredients, what ingredients have the best prices and are most readily available at certain times of year, the new trends in party appetizers, what food allergies the expected guests might have, possible party themes, and so on. This analysis is the  Essential Initial Research stage.

In the Business Model stage, the host might construct a menu of items to include with the meal along with a list of decorations to order, music to play, and costume themes to suggest to the guests. The mix of these kinds of elements chosen by the host will aid in the success of the party.

The Initial Business Plan Draft stage is where the host rolls up their sleeves and begins to make some of the food items, puts up some of the decorations, and generally gets everything started for the party.

During this stage, the host will begin to realize that some plans are not feasible and that changes are needed. The required changes might be substantial, like the need to postpone the entire party and ultimately start over in a few months, and others might be less drastic, like the need to change the menu when an invited guest indicates that they can’t eat food containing gluten. These changes are incorporated into the plan during the  Making the Business Plan Realistic  stage to make it realistic and feasible.

The Making the Plan Appeal to Stakeholders and Desirable to the Entrepreneur stage involves further changes to the party plan to make it more appealing to both the invited guests and to make it a fun experience for the host. For example, the host might learn that some of the single guests would like to bring dates and others might need to be able to bring their children to be able to attend. The host might be able to accommodate those desires or needs in ways that will also make the party more fun for them—maybe by accepting some guests’ offers to bring food or games, or maybe hiring a babysitter to entertain and look after the children.

The final stage— Finishing the Business Plan— involves the host putting all of the final touches in place for the party in preparation for the arrival of the guests.

Essential Initial Research

A business plan writer should analyze the environment in which they anticipate operating at each of the levels of analysis: Societal , Industry , Market , and Firm . This stage of planning is called the Essential Initial Research stage, and it is a necessary first step to better understand the trends that will affect their business and the decisions they must make to lay the groundwork for, which will improve their potential for success.

In some cases, much of this research should be included in the developing business plan as its own separate section to help show readers that there is a market need for the business being considered and that it stands a good chance of being successful.

In other cases, a business plan will be stronger when the components of the research are distributed throughout the business plan to provide support for the outlined plans and strategies outlined. For example, the industry- or market-level research might outline the pricing strategies used by identified competitors, which might be best placed in the Pricing Strategy part of the business plan to support the decision made to employ a particular pricing strategy.

Business Model

Inherent in any business plan is a description of the Business Model chosen by the entrepreneur as the one that they feel will best ensure success. Based upon their analysis from the Essential Initial Research stage, an entrepreneur should determine how each element of their business model—including their revenue streams, cost structure, customer segments, value propositions, key activities, key partners, and so on—might fit together to improve the potential success of their business venture (see Chapter 3 – Business Models ).

For some types of ventures, at this stage an entrepreneur might launch a lean start-up (see the “Lean Start-up” section in Chapter 2 – Essential Initial Research ) and grow their business by continually pivoting, or constantly adjusting their business model in response to the real-time signals they get from the markets’ reactions to their business operations. In many cases, however, an entrepreneur will require a business plan. In those cases, their initial business model will provide the basis for that plan.

Of course, throughout this and all of the stages in this process, the entrepreneur should seek to continually gather information and adjust the plans in response to the new knowledge they gather. As shown in Figure 1 by its enclosure in the Progressive Research box, the business plan developer might need to conduct further research before finishing the business model and moving on to the initial business plan draft.

Initial Business Plan Draft

The Initial Business Plan Draft  stage involves taking the knowledge and ideas developed during the first two stages and organizing them into a business plan format. Many entrepreneurs prefer to create a full draft of the business plan with all of the sections, including the front part with the business description, vision, mission, values, value proposition statement, preliminary set of goals, and possibly even a table of contents and lists of tables and figures all set up using the software features enabling their automatic generation. Writing all of the operations, human resources, marketing, and financial plans as part of the first draft ensures that all of these parts can be appropriately and necessarily integrated. The business plan will tell the story of a planned business startup in two ways: 1) by using primarily words along with some charts and graphs in the operations, human resources, and marketing plans and 2) through the financial plan. Both must tell the same story.

The feedback loop shown in Figure 1 demonstrates that the business developer may need to review the business model.  Additionally, as shown by its enclosure in the Progressive Research box, the business plan developer might need to conduct further research before finishing the Initial Business Plan Draft stage and moving on to the Making Business Plan Realistic stage.

Making Business Plan Realistic

The first draft of a business plan will almost never be realistic. As the entrepreneur writes the plan, it will necessarily change as new information is gathered. Another factor that usually renders the first draft unrealistic is the difficulty in making certain that the written part—in the front part of the plan along with the operations, human resources, and marketing plans—tells the exact same story as the financial part does. This stage of work involves making the necessary adjustments to the plan to make it as realistic as possible.

The Making Business Plan Realistic  stage has two possible feedback loops. The first means going back to the Initial Business Plan Draft stage if the initial business plan needs to be significantly changed before it is possible to adjust it so that it is realistic. The second feedback loop circles back to the Business Model stage if the business developer needs to rethink the business model. As shown in Figure 1 by its enclosure in the Progressive Research box, the business plan developer might need to conduct further research before finishing the Making Business Plan Realistic stage and moving on to the Making Plan Appeal to Stakeholders stage.

Making Plan Appeal to Stakeholders and Desirable to the Entrepreneur

A business plan can be realistic without appealing to potential investors and other external stakeholders, like employees, suppliers, and needed business partners. It might also be realistic (and possibly appealing to stakeholders) without being desirable to the entrepreneur. During this stage, the entrepreneur will keep the business plan realistic as they adjust plans to appeal to potential investors, stakeholders, and themselves.

If, for example, investors will be required to finance the business’s start, some adjustments might need to be relatively extensive to appeal to potential investors’ needs for an exit strategy from the business, to accommodate the rate of return they expect from their investments, and to convince them that the entrepreneur can accomplish all that is promised in the plan. In this case, and in others, the entrepreneur will also need to get what they want out of the business to make it worthwhile for them to start and run it. So, this stage of adjustments to the developing business plan might be fairly extensive, and they must be informed by a superior knowledge of what targeted investors need from a business proposal before they will invest. They also need to be informed by a clear set of goals that will make the venture worthwhile for the entrepreneur to pursue.

The caution with this stage is to balance the need to make realistic plans with the desire to meet the entrepreneur’s goals while avoiding becoming discouraged enough to drop the idea of pursuing the business idea . If an entrepreneur is convinced that the proposed venture will satisfy a valid market need, there is often a way to assemble the financing required to start and operate the business while also meeting the entrepreneur’s most important goals. To do so, however, might require significant changes to the business model.

One of the feedback loops shown in Figure 1 indicates that the business plan writer might need to adjust the draft business plan while ensuring that it is still realistic before it can be made appealing to the targeted stakeholders and desirable to the entrepreneur. The second feedback loop indicates that it might be necessary to go all the way back to the Business Model stage to re-establish the framework and plans needed to develop a realistic, appealing, and desirable business plan. Additionally, this stage’s enclosure in the Progressive Research box suggests that the business plan developer might need to conduct further research.

Finishing the Business Plan

The final stage involves putting the important finishing touches on the business plan so that it will present well to potential investors and others. This involves making sure that the math and links between the written and financial parts are accurate. It involves ensuring that all the needed corrections are made to the spelling, grammar, and formatting. The final set of goals should be written to appeal to the target readers and to reflect what the business plan says. An executive summary should be written and included as a final step.

Chapter Summary

This chapter described the internal and external purposes for business planning. It also explained how business plans must effectively communicate while establishing and building credibility for both the entrepreneur and the venture. The general guidelines for business planning were covered as were some important business planning tools. The chapter concluded with descriptions of the stages of the business development process for effective business planning.

• Hindle, K., & Mainprize, B. (2006). A systematic approach to writing and rating entrepreneurial business plans. The Journal of Private Equity, 9(3), 7-23. ↵
• Ibid. ↵

Business Plan Development Guide Copyright © 2023 by Lee A. Swanson is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License , except where otherwise noted.

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What Is Business Development?

• Business Development Basics
• Areas of Development
• Business Development Process
• Creating a Plan
• Skills Needed

The Bottom Line

• Small Business
• How to Start a Business

Business Development: Definition, Strategies, Steps, and Skills

Why more and more companies worldwide are embracing this planning process

• How to Start a Business: A Comprehensive Guide and Essential Steps
• How to Do Market Research, Types, and Example
• Marketing Strategy: What It Is, How It Works, How To Create One
• Marketing in Business: Strategies and Types Explained
• What Is a Marketing Plan? Types and How to Write One
• Business Development: Definition, Strategies, Steps & Skills CURRENT ARTICLE
• Business Plan: What It Is, What's Included, and How to Write One
• Small Business Development Center (SBDC): Meaning, Types, Impact
• How to Write a Business Plan for a Loan
• Business Startup Costs: It’s in the Details
• Startup Capital Definition, Types, and Risks
• Bootstrapping Definition, Strategies, and Pros/Cons
• Crowdfunding: What It Is, How It Works, and Popular Websites
• Starting a Business with No Money: How to Begin
• A Comprehensive Guide to Establishing Business Credit
• Equity Financing: What It Is, How It Works, Pros and Cons
• Best Startup Business Loans
• Sole Proprietorship: What It Is, Pros & Cons, and Differences From an LLC
• Partnership: Definition, How It Works, Taxation, and Types
• What is an LLC? Limited Liability Company Structure and Benefits Defined
• Corporation: What It Is and How to Form One
• Starting a Small Business: Your Complete How-to Guide
• Starting an Online Business: A Step-by-Step Guide
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Business development is the process of planning for future growth by identifying new opportunities, forming partnerships, and adding value to a company. It involves understanding the target audience, market opportunities, and effective outreach channels to drive success.

Business development may involve objectives around sales growth, business expansion, strategic partnerships, and increased profitability. The process impacts every department, including sales, marketing, manufacturing, human resources, accounting, finance, product development, and vendor management.

Key Takeaways

• The overarching goal of business development is to make a company more successful.
• It can involve many objectives, such as sales growth, business expansion, the formation of strategic partnerships, and increased profitability.
• The process impacts every department, including sales, marketing, manufacturing, human resources, accounting, finance, product development, and vendor management.
• Business development leaders and team members need a diverse range of both soft and hard skills to meet these objectives.

How Business Development Works

Business development strives to increase an organization's capabilities and expand its reach to achieve financial and strategic goals. This process can significantly impact various departments within the organization, utilizing their specialized skills to drive growth.

Business development serves as the thread connecting all of a company's functions or departments. It helps a business grow and improve in areas such as sales, revenue, product offerings, talent acquisition, customer service, and brand awareness.

Business development encourages teamwork and strategic planning across all departments, ensuring the organization grows cohesively and sustainably.

Sales and Marketing

Sales personnel often concentrate on specific markets or clients, aiming to achieve targeted revenue numbers. For example, a business development team might assess the Brazilian market and determine that $1.5 billion in sales is achievable within three years. With this goal, the sales department develops strategies to target the new market's customer base .

Business development often requires a longer-term approach than traditional sales strategies. The Society for Marketing Professional Services describes sales as akin to hunting, while business development is more like farming—a long-term investment of time and energy without immediate payoff.

Marketing supports sales by promoting and advertising the company's products and services. A business development leader and their team can help set appropriate budgets based on the opportunities involved.

Higher budgets enable aggressive strategies like cold calling , personal visits, roadshows, and free sample distribution. Lower budgets tend to focus on more passive strategies, such as online, print, and social media ads, as well as billboard advertising.

Legal and Finance

To enter a new market, a business development team must decide whether to go solo by navigating all required legal formalities or to form a strategic alliance or partnership with firms already operating in that market. Assisted by legal and finance teams, the business development group weighs the pros and cons of each option and chooses the one that best serves the business.

Finance may also become involved in cost-cutting initiatives. Business development is not just about increasing market reach and sales, but also about improving the bottom line.

For example, suppose an internal assessment reveals high spending on corporate business travel. In that case, the team may change travel policies such as hosting video conference calls instead of on-site meetings or opting for less expensive transportation modes. The outsourcing of non-core work, such as billing, technology operations, or customer service, may also be part of a development plan.

Project Management/Business Planning

International business expansion involves critical decisions about whether to establish a new facility in the target market or manufacture products in the base country and import them. If opting for the latter, it may also require assessing the need for an additional facility in the base country.

The business development team evaluates and finalizes such decisions based on cost and time assessments. Once a decision is made, the project management and implementation team can begin working on the desired goal.

Product Management and Manufacturing

Regulatory standards and market requirements can vary across regions and countries. For example, a medication permitted in India may not be allowed in the United Kingdom. This can necessitate a customized or entirely new product for the new market.

Almost all countries require specific documentation and have regulations that must be met to ensure the safety, quality, and conformity of imported products.

These requirements drive the work of product management and manufacturing departments, which are influenced by the business strategy. Cost considerations, legal approvals, and regulatory compliance are all critical aspects assessed during the development process.

Vendor Management

Will the new business need external vendors ? For example, will shipping require a dedicated courier service, or will the company partner with an established retail chain for sales? What are the costs associated with these partnerships?

The business development team collaborates with relevant internal departments to address these questions and determine the best strategies for external engagements.

10 Potential Areas for Business Development

Business development often requires employees from various departments to collaborate, facilitating information flow, strategic planning, and informed decision-making. Here is a summary of potential areas where business development may be involved, depending on the organization:

• Market research and analysis : Identifying new market opportunities and developing effective strategies
• Sales and lead generation : Prospecting, qualifying leads, and coordinating with the sales team to convert leads into customers
• Strategic partnerships and alliances : Forming strategic alliances, joint ventures, or collaborations that create mutually beneficial opportunities
• Product development and innovation : Conducting market research, gathering customer feedback, and collaborating with internal teams to drive innovation
• Customer relationship management : Implementing customer retention initiatives, loyalty programs, and gathering customer feedback to enhance satisfaction and drive repeat business.
• Strategic planning and business modeling : Identifying growth opportunities, setting targets, and implementing strategies to achieve sustainable growth.
• Mergers and acquisitions : Evaluating potential synergies, conducting due diligence , and negotiating and executing deals.
• Brand management and marketing : Creating effective marketing campaigns, managing online and offline channels, and leveraging digital marketing techniques.
• Financial analysis and funding : Exploring funding options, securing investments, or identifying grant opportunities.
• Innovation and emerging technologies : Assessing the potential impact of disruptive technologies and integrating them into the organization's growth strategies.

The Business Development Process in 6 Steps

While the specific steps in the business development process will depend on the particular company, its needs and capabilities, its leadership, and its available capital, some common steps include:

Step 1: Market Research/Analysis

Begin by conducting comprehensive market research to gain insights into market trends, customer needs, and the competitive landscape. Analyze data and gather additional information to identify potential growth opportunities and understand market dynamics.

Step 2: Establish Clear Goals and Objectives

Leveraging that research, define specific objectives and goals for business development efforts. These goals could include revenue targets, market expansion goals, customer acquisition targets, and product or service development. Setting clear goals provides a focus and direction for the business development process.

Step 3: Generate and Qualify Leads

Use various sources, such as industry databases, networking , referrals, or online platforms, to generate a pool of potential leads. Identify individuals or companies that fit the target market criteria and evaluate them based on predetermined criteria to determine their suitability and potential value.

Step 4: Build Relationships and Present Solutions

Initiate contact with qualified leads and establish relationships through effective communication and engagement. Utilize networking events, industry conferences, personalized emails, or social media interactions to build trust and credibility.

As your relationship forms, develop and present tailored solutions that align with the client's needs. Demonstrate the value proposition of the organization's offerings and highlight key benefits and competitive advantages.

Step 5: Negotiate and Expand

Prepare and deliver proposals that outline the scope of work, pricing, deliverables, and timelines. Once the client agrees, collaborate with legal and other relevant internal teams to finalize and execute the contract to ensure all terms are clear and agreed upon. Maintain communication with the client throughout this process to address any questions or concerns.

Step 6: Continuously Evaluate

Continuously monitor and evaluate the effectiveness of business development efforts. Analyze performance metrics , gather feedback from clients and internal stakeholders, and identify areas for improvement. Regularly refine strategies and processes to adapt to market changes and optimize outcomes.

While it's common for startup companies to seek outside assistance in developing the business, as a company matures, it should aim to build its business development expertise internally.

How to Create a Business Development Plan

To effectively create and implement a business development plan, the team needs to set clear objectives and goals—ones that are specific, measurable, achievable, relevant, and time-bound (SMART). You can align these objectives with the overall business goals of the company.

Companies often start by analyzing their current state through a  SWOT analysis , evaluating their strengths, weaknesses, opportunities, and threats. This helps identify target markets and customer segments and define a unique value proposition.

The external-facing stages of a business development plan are crucial. These stages should outline sales and marketing strategies to generate leads and convert them into customers. They should also explore potential strategic partnerships and alliances to expand reach, access new markets, or enhance offerings.

Teams should also conduct a financial analysis and resource planning to determine the resources needed for implementing the plan. Once implemented, progress should be tracked against the key performance indicators (KPIs) you've chosen to ensure the plan's effectiveness.

Skills Needed for Business Development Jobs

Business development requires a wide range of hard and soft skills.

Leaders and team members in business development need well-honed sales and negotiation skills to interact with clients, understand their needs, and influence their decisions. They must build rapport, handle challenges, and close deals. Effective communication, both verbal and written, with customers and internal stakeholders, is crucial.

Business development specialists should be thoroughly aware of the market in which they operate and keep up with market dynamics, competitive activities, and industry developments. They need to identify potential opportunities, make informed decisions, and adjust strategies as necessary, requiring strong analytical skills.

Internally, business development practitioners must clarify priorities, set realistic deadlines, manage resources efficiently, and monitor progress to guarantee the timely completion of tasks.

Finally, business development professionals should conduct themselves with high ethical standards. They must maintain confidentiality, act legally and ethically, and build trust with customers and stakeholders.

Why Is Business Development Important?

In addition to its benefits to individual companies, business development is important for generating jobs, developing key industries, and keeping the economy moving forward.

What Are the Most Important Skills for Business Development Executives?

Development executives need to have leadership skills, vision, drive, and a willingness to work with a variety of people to get to a common goal.

How Can I Be Successful in Business Development?

Having a vision and putting together a good team are among the factors that help predict success in business development. A successful developer also knows how to write a good business plan, which becomes the blueprint to build from.

What, in Brief, Should a Business Development Plan Include?

A business development plan, or business plan , should describe the organization's objectives and how it intends to achieve them, including financial goals, expected costs, and targeted milestones.

Business development is key to companies' growth and achievement of their goals. It involves setting clear objectives, leveraging market research, forming strategic partnerships, and aligning efforts across all departments to drive success.

A well-executed business development plan not only supports short-term revenue growth but also ensures long-term sustainability. As companies across various industries increasingly recognize its importance, the role of business development continues to grow.

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Strategic Business Alignment

Your guide to creating a strategic business development plan.

The People Strategy Leaders Podcast

Every business faces the challenge of crafting an effective business development strategy . But what exactly is strategic business development? In simple terms, it’s a vital tool that ensures long-term success by aligning everyone in your organization towards a common objective.

A well-defined strategy outlines what your organization aims to achieve and the necessary steps to get there. It provides a clear roadmap, guiding your transition from broad directions to specific initiatives and ongoing operations. A strategic business development plan plays a crucial role in driving growth and ensuring sustainable success.

Now, let’s explore the strategic plan further, understand its significance, and dive into the art of crafting a winning business development plan.

Strategic Business Development Plan – What Is It?

A business development strategy is crucial for achieving organizational objectives and driving growth. It involves finding and implementing effective business growth strategies. With a well-defined growth strategy, teams can better understand their goals and contribute to organizational objectives. Business development focuses on attracting and retaining new customers to enhance revenue and expand your organization. By developing a clear plan, your business can plan to achieve these goals.

According to a poll conducted by Bridges Business Consultancy, a staggering 48% of organizations and 85% of businesses fail to achieve even half of their strategic goals. This highlights the importance of creating a strategic business development plan. 

Importance of Strategic Business Development Plan

A well-crafted strategic business development plan is the key to unlock long-term success and growth for your organization. By defining clear goals and actionable plans, businesses can thrive and achieve greatness. But why exactly is a strategic business development plan crucial? Let’s dive into a few compelling reasons.

Improves transparency

Transparency has become recognized as a critical business trait for both customers and employees. By cultivating transparency, you can enhance your company’s success and reputation. From strengthening your sales team to improving employee retention, transparency has the power to make a significant impact. Implementing a strategic growth strategy ensures that everyone in your organization is aware of the goals and their role in achieving them, thus promoting transparency.

Increases sales

At the heart of business development lies growth. Increasing sales is the ultimate goal, and businesses need a plan to make it happen. A strategic business development plan allows you to identify markets and products with high-profit potential, enabling you to prioritize partnerships and make informed decisions. It also helps you reduce expenses, uncover untapped growth opportunities, and allocate resources efficiently. With a solid business development strategy , your bottom line will thrive.

In today’s competitive landscape, businesses must actively seek growth opportunities. A thoughtfully designed business development strategy enables you to expand your clientele, explore new markets, and offer innovative products or services. By identifying your differentiators and value propositions, you’ll set your organization apart from competitors and take a lead in the market.

Also Read: How To Improve Employee Productivity In 2024?

How to create a strategic business development plan.

Effective strategic management involves identifying an organization’s strengths and acknowledging its weaknesses. It goes beyond mere recognition and outlines a robust business strategy that maximizes the benefits and mitigates the drawbacks. A comprehensive corporate development plan comprises various components, each strategically aligned with distinct goals and objectives. Now, let’s delve into a detailed possess to create a business plan:

Define your purpose

A strategic plan serves as the overarching mission or vision statement for a company. When embarking on the creation of a corporate plan, it proves advantageous to initiate the process by clearly defining the goal of your organization . This entails a meticulous identification of the needs, preferences, and pain points of your ideal customers. By gaining a profound understanding of these factors, your plan can be more effectively tailored to cater to their specific requirements. Initiating the strategic planning process with a well-defined purpose sets the foundation for your company to deliver enhanced value over time.

Perform market research

After identifying your target market, it’s time to delve into comprehending their needs. To effectively persuade them to collaborate with you, you need to address the following inquiries:

• What are the major challenges they currently face?
• What specific services pique their interest?
• How do they approach problem-solving at present?
• How can your products or services uplift their current situation?

Once you have solid answers to these questions, it’s crucial to thoroughly research your competitors. Identify what makes you stand out from the crowd and emphasize this unique value proposition to potential clients, leveraging it as your competitive advantage.

Consider SWOT analysis

To gain a profound understanding of your company’s current standing, conducting a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) is a paramount strategy. Each element of the SWOT matrix plays a crucial role in shaping and executing an organization’s strategy. Some factors fall under internal control, while others are significantly influenced by external forces. A SWOT analysis provides a comprehensive view of your business from various perspectives. It not only sheds light on internal aspects for improvement and areas of success but also necessitates an evaluation of the external environment. This evaluation helps identify potential threats and business opportunities that can be either mitigated or seized in the future.”

Provide value to stakeholders

Investing in lasting connections with your clients is a worthwhile expense. Repeat customers not only contribute significantly to your business’s revenue but also come at a lower conversion cost. Moreover, returning customers are more open to your sales pitches, providing valuable insights for your company’s growth. However, remember that your suppliers deserve value too – it’s crucial to prioritize delivering value to them alongside your customers. And let’s not forget about the importance of prioritizing employee satisfaction in your business plan. By doing so, you’ll not only enhance employee morale but also improve customer satisfaction in the process.

Identify ways to monitor progress

Effectively monitoring the progress of your business development strategy is crucial for achieving your goals. One key approach is the utilization of key performance indicators (KPIs) tailored to your strategic objectives. Regularly tracking these KPIs provides real-time insights into the performance of various initiatives, allowing for timely adjustments and improvements. Data analytics tools play a vital role in quantifying metrics such as customer acquisition costs, conversion rates, and website traffic. Additionally, seeking feedback from customers, conducting market research, and implementing surveys can offer qualitative insights that complement quantitative data. 

Make use of technology

Embrace tools and platforms designed to enhance the efficiency of your business development activities. Utilize advanced solutions to manage leads, keep track of interactions, and engage with prospects seamlessly. Leverage social networking sites, implement marketing automation software, and integrate CRM systems to streamline your processes. Maintain flexibility and readiness to adapt to evolving consumer demands and market conditions. Regularly assess and enhance your business development approach to stay ahead and remain competitive in a dynamic business landscape.

Monitor and alter your approach

Regularly monitoring the effectiveness of your business development strategy enables you to make necessary adjustments based on valuable information and insights. Keep a close eye on the progress of your objectives and assess the efficiency of your strategy using key performance indicators (KPIs). Stay proactive by consistently evaluating market developments, gathering customer input, and monitoring competitor activities. 

A comprehensive understanding of your target market, specific objectives, and a clearly articulated value proposition are essential for crafting a successful business growth strategy.

Also Read: Modern Performance Appraisal Types that Create a Winning Culture

Summing it up.

Every successful business has its own unique qualities. That’s why it is crucial to tailor these tactics to align with your specific goals, industry, and target audience. Continuously evaluate your business development efforts and make the necessary adjustments to foster growth and triumph. 

With a well-structured strategic management approach, you can not only enjoy this process but also proudly propel your company forward. Remember, implementing a company plan requires dedication, but it is just the beginning of an exciting journey. By embracing the right planning and utilizing the appropriate resources, your organization stands a fair chance of achieving remarkable success. 

Frequently Asked Questions

1. what is the primary purpose of a strategic business development plan.

A strategic business development plan serves as a roadmap for guiding your company’s growth and success. It outlines goals, identifies opportunities, and sets a clear path for achieving sustainable development. By aligning your business activities with a well-thought-out plan, you can enhance decision-making and improve overall efficiency.

2. How often should I update my strategic business development plan?

Regular updates are crucial for keeping your strategic business development plan relevant and effective. Aim to review and, if necessary, revise the plan at least annually. However, more frequent assessments may be required if there are significant changes in your industry, market conditions, or internal factors. Flexibility and adaptability are key in ensuring your plan remains a dynamic tool for success.

3. What are the key components of a successful strategic business development plan?

A comprehensive strategic business development plan typically includes key components such as a clear mission statement, a thorough analysis of the current business environment, defined short-term and long-term goals, identification of target markets, competitive analysis, and a detailed implementation strategy. It should also outline how progress will be measured and what mechanisms are in place for regular evaluation and adjustments.

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Chandler Barr is the VP of Sales at Engagedly and is focused on driving a culture of progress over perfection in a no-fault environment where employees are secure and encouraged to think creatively to solve problems. Chandler is a seasoned leader that has scaled sales teams for SaaS startups and multibillion-dollar publicly traded tech companies, as well as, led Marines to accomplish the mission during hardships overseas.

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Business Plan Development and Evaluation: Business Plan Development: Strategies for Growth and Sustainability

1. what is a business plan and why is it important for entrepreneurs, 2. how to create a comprehensive and realistic business plan step by step, 3. how to research and evaluate your target market, customers, competitors, and industry trends, 4. how to describe and optimize your business processes, resources, suppliers, and quality standards, 5. how to project and manage your income statement, balance sheet, cash flow, and break-even analysis, 6. how to identify and mitigate the potential risks and challenges that your business may face.

A business plan is a document that describes the goals, strategies, and resources of a new or existing venture. It serves as a roadmap for entrepreneurs to guide them through the various stages of launching and growing their businesses. A business plan is important for entrepreneurs for several reasons, such as:

- It helps them to clarify their vision, mission, and value proposition, and communicate them to potential customers, investors, and partners.

- It helps them to identify and analyze their target market , competitors, and industry trends, and devise effective marketing and sales strategies .

- It helps them to estimate their financial needs and sources, and plan their budget, cash flow, and profitability.

- It helps them to assess their strengths, weaknesses, opportunities, and threats, and address any potential risks or challenges.

- It helps them to monitor their progress and performance , and adjust their plans as needed.

For example, a business plan for a new online clothing store might include the following sections:

- Executive summary: A brief overview of the business idea , goals, and highlights.

- Company description: A detailed description of the company's history, vision, mission, values, and team.

- Market analysis: A comprehensive analysis of the target market , customer segments, competitors, and industry trends.

- Marketing and sales plan: A clear description of the marketing and sales strategies , channels, and activities.

- Products and services: A description of the products and services offered , their features, benefits, and competitive advantages.

- Operations plan: A description of the operational aspects of the business, such as the location, equipment, suppliers, inventory, and logistics.

- Financial plan: A projection of the financial statements, such as the income statement, balance sheet, and cash flow statement , and the assumptions and calculations behind them.

- Appendix: Any additional information or documents that support the business plan , such as market research, testimonials, resumes, licenses, etc.

A business plan is a document that describes the goals, strategies, and resources of a business venture. It serves as a roadmap for the entrepreneurs and investors to evaluate the feasibility and potential of the business idea . A business plan should be comprehensive and realistic, reflecting the current market conditions , customer needs, and competitive advantages of the business . To create a high-quality business plan , one should follow these steps:

1. conduct a market research . This step involves gathering and analyzing information about the industry, the target market, the customer segments, the competitors, and the trends. The purpose of this step is to identify the opportunities and challenges for the business, as well as the unique value proposition that the business can offer to the customers. For example, a market research for a new online grocery delivery service could include data on the size and growth of the online grocery market, the preferences and behaviors of the online grocery shoppers, the existing and potential competitors, and the technological and regulatory factors that affect the business .

2. define the business model . This step involves designing the core aspects of the business, such as the product or service, the revenue streams, the cost structure, the distribution channels, the customer relationships, and the key resources and activities . The purpose of this step is to outline how the business will create, deliver, and capture value for the customers and the stakeholders . For example, a business model for a new online grocery delivery service could include details on the types and features of the groceries offered, the pricing and payment methods, the delivery options and fees, the marketing and communication strategies , the partnerships and suppliers, and the key metrics and milestones.

3. write the executive summary . This step involves summarizing the main points of the business plan in a concise and compelling way. The purpose of this step is to capture the attention and interest of the readers, such as the investors, the lenders, or the partners. The executive summary should highlight the problem that the business solves, the solution that the business provides, the market opportunity and competitive advantage that the business has, and the financial projections and funding needs of the business. For example, an executive summary for a new online grocery delivery service could include statements like:

- "We are an online grocery delivery service that offers fresh, local, and organic products to busy urban customers who value convenience, quality, and sustainability."

- "We have a large and growing market of online grocery shoppers who are dissatisfied with the existing options and are looking for a better alternative."

- "We have a unique value proposition that combines a curated selection of products, a user-friendly platform, a fast and reliable delivery , and a social and environmental impact ."

- "We expect to generate $10 million in revenue and $2 million in profit in the first year, and we are seeking $1 million in seed funding to launch and scale our business ."

4. develop the marketing plan . This step involves planning and executing the strategies and tactics to attract, retain, and satisfy the customers. The purpose of this step is to communicate the value proposition of the business to the target market and to build a loyal and profitable customer base. The marketing plan should include the following elements:

- market segmentation and targeting . This element involves identifying and selecting the specific groups of customers that the business will serve, based on their characteristics, needs, and behaviors. For example, a market segmentation and targeting for a new online grocery delivery service could include segments such as busy professionals, health-conscious consumers , eco-friendly shoppers, and families with children.

- Positioning and branding. This element involves creating and maintaining a distinctive and positive image of the business in the minds of the customers, relative to the competitors. For example, a positioning and branding for a new online grocery delivery service could include a catchy name, a memorable logo, a catchy slogan, and a consistent visual identity .

- Marketing mix. This element involves deciding and implementing the optimal combination of the four Ps of marketing: product, price, place, and promotion. For example, a marketing mix for a new online grocery delivery service could include:

- Product: A curated selection of fresh, local, and organic groceries, with options for customization, subscription, and gift cards.

- Price: A competitive and transparent pricing, with discounts for bulk orders, referrals, and loyalty programs.

- Place: An online platform that is easy to use, secure, and compatible with various devices and browsers, with a network of local delivery partners that ensure fast and reliable delivery .

- Promotion: A mix of online and offline marketing channels , such as social media, email, blogs, podcasts, webinars, flyers, events, and word-of-mouth.

5. Prepare the financial plan. This step involves estimating and projecting the financial performance and needs of the business . The purpose of this step is to demonstrate the viability and sustainability of the business, as well as the return on investment for the investors and the lenders. The financial plan should include the following elements:

- Income statement. This element shows the revenue, expenses, and profit or loss of the business over a period of time, usually a month, a quarter, or a year. For example, an income statement for a new online grocery delivery service could show the sales revenue , the cost of goods sold , the gross profit, the operating expenses, the operating income, the interest expense, the taxes, and the net income.

- Cash flow statement. This element shows the inflows and outflows of cash from the business over a period of time, usually a month, a quarter, or a year. For example, a cash flow statement for a new online grocery delivery service could show the cash from operating activities, such as the cash received from customers and the cash paid to suppliers, the cash from investing activities, such as the cash spent on equipment and software, and the cash from financing activities, such as the cash received from investors and the cash paid to creditors.

- Balance sheet. This element shows the assets, liabilities, and equity of the business at a point in time, usually the end of a month, a quarter, or a year. For example, a balance sheet for a new online grocery delivery service could show the current assets, such as the cash, the inventory, and the accounts receivable, the non-current assets, such as the equipment and the software, the current liabilities, such as the accounts payable and the short-term debt , the non-current liabilities, such as the long-term debt and the deferred revenue, and the equity, such as the common stock and the retained earnings.

- Break-even analysis. This element shows the point at which the revenue and the expenses of the business are equal, meaning that the business is neither making nor losing money. For example, a break-even analysis for a new online grocery delivery service could show the break-even point in terms of the number of orders, the average order value, or the market share.

- Sensitivity analysis. This element shows how the financial results of the business change under different scenarios, such as the best-case scenario, the worst-case scenario , and the most likely scenario. For example, a sensitivity analysis for a new online grocery delivery service could show how the revenue, the expenses, and the profit or loss vary depending on the changes in the market size, the market share, the customer retention, the pricing, the cost of goods sold, the operating expenses, the interest rate, and the tax rate.

- Financial ratios. This element shows the numerical relationships between the financial variables of the business, such as the profitability, the liquidity, the efficiency, the leverage, and the growth. For example, some financial ratios for a new online grocery delivery service could include the gross margin, the operating margin, the net margin, the return on assets, the return on equity, the current ratio, the quick ratio, the inventory turnover, the accounts receivable turnover , the debt-to-equity ratio , the interest coverage ratio , the revenue growth rate , and the net income growth rate.

These steps can help you create a comprehensive and realistic business plan that can guide your business decisions and persuade your potential investors and partners . However, you should also keep in mind that a business plan is not a static document, but a dynamic one that should be updated and revised as your business evolves and as the market conditions change. Therefore, you should also include a section on how you will monitor and evaluate your business performance and progress, and how you will adjust your business plan accordingly.

How to create a comprehensive and realistic business plan step by step - Business Plan Development and Evaluation: Business Plan Development: Strategies for Growth and Sustainability

One of the most crucial aspects of developing a successful business plan is conducting a comprehensive market analysis . This process involves gathering and analyzing data on various factors that affect the potential and profitability of your business idea . By conducting a market analysis , you can identify and evaluate your target market , customers, competitors, and industry trends. These insights can help you refine your value proposition, differentiate your product or service , and devise effective marketing and sales strategies. A market analysis can also help you assess the feasibility, risks, and opportunities of your business idea .

To conduct a market analysis , you need to follow these steps:

1. define your target market . Your target market is the group of customers that you want to reach with your product or service. You need to define your target market based on demographic, geographic, psychographic, and behavioral characteristics. For example, if you are planning to open a vegan bakery, your target market might be people who are vegan, health-conscious, environmentally aware, and live or work near your location.

2. segment your target market . Your target market might consist of different subgroups or segments that have distinct needs, preferences, and behaviors. You need to identify and prioritize these segments based on their size, growth, profitability, and attractiveness. For example, within your target market of vegan customers , you might have segments such as young professionals, families, students, and seniors.

3. Analyze your customers. Your customers are the people who buy or use your product or service. You need to understand their needs, wants, problems, and motivations. You also need to know their buying behavior, such as how often they buy, how much they spend, how they make decisions, and what influences them. You can use various methods to collect customer data , such as surveys, interviews, focus groups, observation, and online analytics. For example, you might conduct a survey to find out what vegan customers look for in a bakery, such as taste, variety, price, quality, convenience, and service.

4. Analyze your competitors. Your competitors are the businesses that offer similar or substitute products or services to your target market . You need to identify and evaluate your direct and indirect competitors based on their strengths, weaknesses, opportunities, and threats. You also need to compare your product or service with your competitors' offerings in terms of features, benefits, quality, price, distribution, and promotion. You can use various sources to gather competitor data, such as websites, social media, reviews, reports, and visits. For example, you might visit a nearby vegan bakery and observe their products, prices, customer service, and ambiance.

5. Analyze your industry. Your industry is the broader context in which you operate your business. You need to understand the current and future trends , opportunities, and challenges that affect your industry. You also need to know the industry structure, such as the number and size of competitors, the level of competition, the barriers to entry, and the regulations. You can use various tools to analyze your industry, such as Porter's Five Forces, PESTEL, and SWOT. For example, you might use Porter's Five Forces to assess the competitive rivalry, threat of new entrants, threat of substitutes, bargaining power of suppliers, and bargaining power of buyers in the vegan bakery industry.

By conducting a thorough market analysis, you can gain valuable insights that can help you develop and evaluate your business plan . A market analysis can help you identify your target market, customers, competitors, and industry trends. It can also help you define your competitive advantage, market opportunity, and growth potential. A market analysis can also help you avoid common pitfalls, such as entering a saturated or declining market, targeting the wrong customers, or underestimating the competition. A market analysis is an essential component of any business plan that aims for growth and sustainability.

How to research and evaluate your target market, customers, competitors, and industry trends - Business Plan Development and Evaluation: Business Plan Development: Strategies for Growth and Sustainability

One of the most important aspects of a successful business plan is the operations plan, which outlines how the business will deliver its products or services to its customers . The operations plan should describe and optimize the following elements:

- Business processes: These are the steps and activities that the business performs to create value for its customers. The business processes should be clearly defined, documented, and standardized to ensure efficiency, quality, and consistency. For example, a restaurant's business processes might include ordering ingredients, preparing food, serving customers, and cleaning the kitchen.

- Resources: These are the assets and inputs that the business needs to carry out its business processes. Resources can include physical assets (such as equipment, inventory, and facilities), human resources (such as employees, contractors, and partners), and intangible assets (such as intellectual property, brand, and reputation). The business should identify the optimal amount and allocation of resources to meet its operational goals and customer demand. For example, a software company's resources might include computers, software licenses, developers, testers, and customer support staff.

- Suppliers: These are the external entities that provide the business with the resources it needs to operate. Suppliers can include vendors, distributors, wholesalers, and service providers. The business should establish and maintain good relationships with its suppliers, and negotiate favorable terms and conditions for quality, price, delivery, and payment. For example, a clothing store's suppliers might include fabric manufacturers, clothing designers, transport companies, and payment processors.

- Quality standards: These are the criteria and measures that the business uses to evaluate and improve its performance and customer satisfaction. Quality standards can include internal benchmarks, industry best practices, customer feedback, and regulatory requirements. The business should implement quality control and quality assurance systems to monitor and enhance its operations. For example, a hotel's quality standards might include room cleanliness, staff courtesy, guest reviews, and safety inspections.

By describing and optimizing these elements, the business can demonstrate its operational viability, efficiency, and competitiveness, and increase its chances of achieving its growth and sustainability objectives.

One of the most crucial aspects of any business plan is the financial plan, which shows how the business will generate, spend, and manage its money. The financial plan consists of four main components: the income statement, the balance sheet, the cash flow statement, and the break-even analysis. Each of these components provides a different perspective on the financial health and performance of the business , and together they form a comprehensive picture of its viability and sustainability. In this section, we will discuss how to project and manage each of these components, and what they reveal about the business's strengths and weaknesses.

- The income statement, also known as the profit and loss statement , shows the revenues and expenses of the business over a specific period of time, usually a month, a quarter, or a year. The income statement helps to measure the profitability of the business , and to identify the sources and costs of its income. To project the income statement , the business needs to estimate its sales, cost of goods sold, operating expenses, taxes, and net income. To manage the income statement, the business needs to monitor its sales performance , control its costs, optimize its pricing, and improve its margins.

- The balance sheet shows the assets, liabilities, and equity of the business at a specific point in time, usually the end of a period. The balance sheet helps to measure the solvency and liquidity of the business, and to evaluate its financial position and leverage. To project the balance sheet , the business needs to estimate its current and fixed assets, current and long-term liabilities , and owner's equity. To manage the balance sheet , the business needs to maintain a positive working capital, reduce its debt, increase its equity, and invest in its assets.

- The cash flow statement shows the inflows and outflows of cash from the business's operating, investing, and financing activities over a specific period of time. The cash flow statement helps to measure the cash generation and consumption of the business, and to assess its ability to meet its obligations and opportunities. To project the cash flow statement, the business needs to estimate its cash receipts and payments from its sales, purchases, investments, loans, and dividends. To manage the cash flow statement, the business needs to increase its cash inflows, decrease its cash outflows, manage its cash cycle, and maintain a cash reserve.

- The break-even analysis shows the level of sales that the business needs to achieve to cover its total costs, and to start making a profit. The break-even analysis helps to determine the feasibility and profitability of the business, and to set its sales goals and strategies . To perform the break-even analysis , the business needs to calculate its fixed costs, variable costs, contribution margin, and break-even point. To use the break-even analysis, the business needs to compare its actual sales with its break-even point, and to adjust its costs, prices, and volumes accordingly.

These are the main steps and considerations for projecting and managing the financial plan of a business . By following these steps, the business can create a realistic and reliable financial plan that reflects its goals and assumptions, and that supports its growth and sustainability. The financial plan also serves as a tool for evaluating the performance and progress of the business, and for identifying and addressing any potential issues or risks. A well-designed and well-managed financial plan is essential for any successful business.

One of the most crucial aspects of developing a successful business plan is to anticipate and address the potential risks and challenges that your business may face. These risks and challenges can be internal or external, and they can affect your business performance , profitability, reputation, or sustainability. Therefore, it is important to identify the sources and types of risks and challenges, assess their likelihood and impact, and devise strategies to mitigate or overcome them. In this section, we will discuss the following steps for conducting a comprehensive risk analysis for your business:

1. Identify the sources and types of risks and challenges. The first step is to brainstorm and list all the possible factors that could pose a threat or difficulty to your business. These factors can be categorized into different types of risks and challenges, such as:

- Market risks: These are the risks and challenges related to the demand, supply, competition, or regulation of your products or services in the market . For example, you may face the risk of low customer demand, high competition, price fluctuations, or changing customer preferences .

- Operational risks: These are the risks and challenges related to the processes, systems, resources, or personnel involved in the production, delivery, or management of your products or services. For example, you may face the risk of equipment failure, supply chain disruption , quality issues, or employee turnover.

- Financial risks: These are the risks and challenges related to the cash flow , revenue, expenses, or debt of your business. For example, you may face the risk of insufficient capital, low profitability, high costs, or defaulting on loans.

- Strategic risks: These are the risks and challenges related to the goals, objectives, vision, or mission of your business. For example, you may face the risk of losing your competitive advantage, failing to innovate, or misaligning with your stakeholders' expectations.

- Legal risks: These are the risks and challenges related to the laws, regulations, contracts, or agreements that govern your business. For example, you may face the risk of violating intellectual property rights, breaching contractual obligations , or facing lawsuits or fines.

- environmental risks : These are the risks and challenges related to the natural, social, or political environment in which your business operates. For example, you may face the risk of natural disasters , social unrest, or political instability.

2. Assess the likelihood and impact of each risk and challenge. The next step is to evaluate how likely each risk and challenge is to occur, and how severe its impact would be on your business. You can use a simple scale of low, medium, or high to rate the likelihood and impact of each risk and challenge, or you can use more sophisticated methods such as probability distributions, scenario analysis, or sensitivity analysis. The purpose of this step is to prioritize the most significant risks and challenges that require your attention and action.

3. Devise strategies to mitigate or overcome each risk and challenge. The final step is to formulate and implement strategies to reduce the likelihood or impact of each risk and challenge, or to cope with them if they occur. These strategies can be categorized into different types, such as:

- Preventive strategies: These are the strategies that aim to prevent or avoid the occurrence of a risk or challenge. For example, you can conduct market research, improve quality control, diversify your revenue streams , or comply with legal standards to prevent market, operational, financial, or legal risks.

- Mitigating strategies: These are the strategies that aim to reduce the likelihood or impact of a risk or challenge. For example, you can hedge against price fluctuations , maintain backup systems, insure against losses, or establish contingency plans to mitigate market, operational, financial, or environmental risks.

- Transferring strategies: These are the strategies that aim to transfer or share the responsibility or liability of a risk or challenge to another party. For example, you can outsource non-core functions, form strategic alliances , or contract with third parties to transfer operational, strategic, or legal risks.

- Accepting strategies: These are the strategies that aim to accept or tolerate the occurrence or impact of a risk or challenge. For example, you can allocate a reserve fund, monitor and review the situation, or learn from the experience to accept market, financial, or strategic risks.

To illustrate these steps, let us consider an example of a risk analysis for a hypothetical business that sells organic coffee online. The table below summarizes the sources, types, likelihood, impact, and strategies for some of the risks and challenges that this business may face:

| Source | Type | Likelihood | Impact | Strategy |

| Low customer demand | Market risk | Medium | High | Preventive: conduct market research and customer segmentation to identify and target the most profitable and loyal customers. |

| High competition | Market risk | High | High | Mitigating: differentiate the products and services by emphasizing the quality, sustainability, and social impact of the organic coffee. |

| price fluctuations | market risk | High | Medium | Transferring: Hedge against the volatility of the coffee prices by using futures contracts or options. |

| Equipment failure | Operational risk | Low | High | Mitigating: Maintain backup equipment and spare parts, and conduct regular inspections and maintenance. |

| Supply chain disruption | Operational risk | Medium | High | Mitigating: Diversify the suppliers and sources of the organic coffee beans , and establish contingency plans for alternative delivery methods. |

| Quality issues | Operational risk | Low | High | Preventive: Implement quality control standards and procedures, and train and motivate the staff to ensure consistent quality. |

| Insufficient capital | financial risk | high | High | Preventive: seek external funding from investors, lenders, or crowdfunding platforms, and maintain a positive cash flow and a healthy balance sheet . |

| Low profitability | Financial risk | Medium | High | Mitigating: Increase the revenue by expanding the customer base , offering discounts or incentives, or launching new products or services. Decrease the costs by optimizing the production, delivery, or marketing processes, or by reducing the overhead or operational expenses. |

| Failing to innovate | Strategic risk | Medium | High | Preventive: Conduct research and development, and adopt new technologies or business models to create new value propositions or competitive advantages. |

| Misaligning with stakeholders' expectations | Strategic risk | Low | High | Preventive: Communicate and collaborate with the stakeholders, such as customers, suppliers, employees, investors, or regulators, and solicit their feedback and input to align the goals, objectives, vision, or mission of the business. |

| Violating intellectual property rights | legal risk | Low | High | Preventive: conduct due diligence and obtain the necessary licenses or permissions to use or sell the organic coffee or any related products or services . |

| Breaching contractual obligations | legal risk | Low | High | Preventive: Review and understand the terms and conditions of any contracts or agreements that the business enters into, and comply with them fully and timely. |

| Natural disasters | Environmental risk | Low | High | Mitigating: Insure against the damages or losses caused by natural disasters, and prepare emergency plans and resources to cope with them. |

| Social unrest | Environmental risk | Low | Medium | Mitigating: Monitor and assess the social and political situation in the regions where the business operates or sources its products or services, and avoid or minimize any involvement or exposure to conflicts or violence. |

| Political instability | Environmental risk | Low | Medium | Mitigating: Monitor and assess the political and regulatory situation in the regions where the business operates or sources its products or services, and adapt or comply with any changes or requirements.

YouTube began as a failed video-dating site. Twitter was a failed music service. In each case, the founders continued to try new concepts when their big ideas failed. They often worked around the clock to try to overcome their failure before all their capital was spent. Speed to fail gives a startup more runway to pivot and ultimately succeed. Jay Samit

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11.4 The Business Plan

Learning objectives.

By the end of this section, you will be able to:

• Describe the different purposes of a business plan
• Describe and develop the components of a brief business plan
• Describe and develop the components of a full business plan

Unlike the brief or lean formats introduced so far, the business plan is a formal document used for the long-range planning of a company’s operation. It typically includes background information, financial information, and a summary of the business. Investors nearly always request a formal business plan because it is an integral part of their evaluation of whether to invest in a company. Although nothing in business is permanent, a business plan typically has components that are more “set in stone” than a business model canvas , which is more commonly used as a first step in the planning process and throughout the early stages of a nascent business. A business plan is likely to describe the business and industry, market strategies, sales potential, and competitive analysis, as well as the company’s long-term goals and objectives. An in-depth formal business plan would follow at later stages after various iterations to business model canvases. The business plan usually projects financial data over a three-year period and is typically required by banks or other investors to secure funding. The business plan is a roadmap for the company to follow over multiple years.

Some entrepreneurs prefer to use the canvas process instead of the business plan, whereas others use a shorter version of the business plan, submitting it to investors after several iterations. There are also entrepreneurs who use the business plan earlier in the entrepreneurial process, either preceding or concurrently with a canvas. For instance, Chris Guillebeau has a one-page business plan template in his book The $100 Startup . 48 His version is basically an extension of a napkin sketch without the detail of a full business plan. As you progress, you can also consider a brief business plan (about two pages)—if you want to support a rapid business launch—and/or a standard business plan.

As with many aspects of entrepreneurship, there are no clear hard and fast rules to achieving entrepreneurial success. You may encounter different people who want different things (canvas, summary, full business plan), and you also have flexibility in following whatever tool works best for you. Like the canvas, the various versions of the business plan are tools that will aid you in your entrepreneurial endeavor.

Business Plan Overview

Most business plans have several distinct sections ( Figure 11.16 ). The business plan can range from a few pages to twenty-five pages or more, depending on the purpose and the intended audience. For our discussion, we’ll describe a brief business plan and a standard business plan. If you are able to successfully design a business model canvas, then you will have the structure for developing a clear business plan that you can submit for financial consideration.

Both types of business plans aim at providing a picture and roadmap to follow from conception to creation. If you opt for the brief business plan, you will focus primarily on articulating a big-picture overview of your business concept.

The full business plan is aimed at executing the vision concept, dealing with the proverbial devil in the details. Developing a full business plan will assist those of you who need a more detailed and structured roadmap, or those of you with little to no background in business. The business planning process includes the business model, a feasibility analysis, and a full business plan, which we will discuss later in this section. Next, we explore how a business plan can meet several different needs.

Purposes of a Business Plan

A business plan can serve many different purposes—some internal, others external. As we discussed previously, you can use a business plan as an internal early planning device, an extension of a napkin sketch, and as a follow-up to one of the canvas tools. A business plan can be an organizational roadmap , that is, an internal planning tool and working plan that you can apply to your business in order to reach your desired goals over the course of several years. The business plan should be written by the owners of the venture, since it forces a firsthand examination of the business operations and allows them to focus on areas that need improvement.

Refer to the business venture throughout the document. Generally speaking, a business plan should not be written in the first person.

A major external purpose for the business plan is as an investment tool that outlines financial projections, becoming a document designed to attract investors. In many instances, a business plan can complement a formal investor’s pitch. In this context, the business plan is a presentation plan, intended for an outside audience that may or may not be familiar with your industry, your business, and your competitors.

You can also use your business plan as a contingency plan by outlining some “what-if” scenarios and exploring how you might respond if these scenarios unfold. Pretty Young Professional launched in November 2010 as an online resource to guide an emerging generation of female leaders. The site focused on recent female college graduates and current students searching for professional roles and those in their first professional roles. It was founded by four friends who were coworkers at the global consultancy firm McKinsey. But after positions and equity were decided among them, fundamental differences of opinion about the direction of the business emerged between two factions, according to the cofounder and former CEO Kathryn Minshew . “I think, naively, we assumed that if we kicked the can down the road on some of those things, we’d be able to sort them out,” Minshew said. Minshew went on to found a different professional site, The Muse , and took much of the editorial team of Pretty Young Professional with her. 49 Whereas greater planning potentially could have prevented the early demise of Pretty Young Professional, a change in planning led to overnight success for Joshua Esnard and The Cut Buddy team. Esnard invented and patented the plastic hair template that he was selling online out of his Fort Lauderdale garage while working a full-time job at Broward College and running a side business. Esnard had hundreds of boxes of Cut Buddies sitting in his home when he changed his marketing plan to enlist companies specializing in making videos go viral. It worked so well that a promotional video for the product garnered 8 million views in hours. The Cut Buddy sold over 4,000 products in a few hours when Esnard only had hundreds remaining. Demand greatly exceeded his supply, so Esnard had to scramble to increase manufacturing and offered customers two-for-one deals to make up for delays. This led to selling 55,000 units, generating $700,000 in sales in 2017. 50 After appearing on Shark Tank and landing a deal with Daymond John that gave the “shark” a 20-percent equity stake in return for $300,000, The Cut Buddy has added new distribution channels to include retail sales along with online commerce. Changing one aspect of a business plan—the marketing plan—yielded success for The Cut Buddy.

Link to Learning

Watch this video of Cut Buddy’s founder, Joshua Esnard, telling his company’s story to learn more.

If you opt for the brief business plan, you will focus primarily on articulating a big-picture overview of your business concept. This version is used to interest potential investors, employees, and other stakeholders, and will include a financial summary “box,” but it must have a disclaimer, and the founder/entrepreneur may need to have the people who receive it sign a nondisclosure agreement (NDA) . The full business plan is aimed at executing the vision concept, providing supporting details, and would be required by financial institutions and others as they formally become stakeholders in the venture. Both are aimed at providing a picture and roadmap to go from conception to creation.

Types of Business Plans

The brief business plan is similar to an extended executive summary from the full business plan. This concise document provides a broad overview of your entrepreneurial concept, your team members, how and why you will execute on your plans, and why you are the ones to do so. You can think of a brief business plan as a scene setter or—since we began this chapter with a film reference—as a trailer to the full movie. The brief business plan is the commercial equivalent to a trailer for Field of Dreams , whereas the full plan is the full-length movie equivalent.

Brief Business Plan or Executive Summary

As the name implies, the brief business plan or executive summary summarizes key elements of the entire business plan, such as the business concept, financial features, and current business position. The executive summary version of the business plan is your opportunity to broadly articulate the overall concept and vision of the company for yourself, for prospective investors, and for current and future employees.

A typical executive summary is generally no longer than a page, but because the brief business plan is essentially an extended executive summary, the executive summary section is vital. This is the “ask” to an investor. You should begin by clearly stating what you are asking for in the summary.

In the business concept phase, you’ll describe the business, its product, and its markets. Describe the customer segment it serves and why your company will hold a competitive advantage. This section may align roughly with the customer segments and value-proposition segments of a canvas.

Next, highlight the important financial features, including sales, profits, cash flows, and return on investment. Like the financial portion of a feasibility analysis, the financial analysis component of a business plan may typically include items like a twelve-month profit and loss projection, a three- or four-year profit and loss projection, a cash-flow projection, a projected balance sheet, and a breakeven calculation. You can explore a feasibility study and financial projections in more depth in the formal business plan. Here, you want to focus on the big picture of your numbers and what they mean.

The current business position section can furnish relevant information about you and your team members and the company at large. This is your opportunity to tell the story of how you formed the company, to describe its legal status (form of operation), and to list the principal players. In one part of the extended executive summary, you can cover your reasons for starting the business: Here is an opportunity to clearly define the needs you think you can meet and perhaps get into the pains and gains of customers. You also can provide a summary of the overall strategic direction in which you intend to take the company. Describe the company’s mission, vision, goals and objectives, overall business model, and value proposition.

Rice University’s Student Business Plan Competition, one of the largest and overall best-regarded graduate school business-plan competitions (see Telling Your Entrepreneurial Story and Pitching the Idea ), requires an executive summary of up to five pages to apply. 51 , 52 Its suggested sections are shown in Table 11.2 .

Are You Ready?

Create a brief business plan.

Fill out a canvas of your choosing for a well-known startup: Uber, Netflix, Dropbox, Etsy, Airbnb, Bird/Lime, Warby Parker, or any of the companies featured throughout this chapter or one of your choice. Then create a brief business plan for that business. See if you can find a version of the company’s actual executive summary, business plan, or canvas. Compare and contrast your vision with what the company has articulated.

• These companies are well established but is there a component of what you charted that you would advise the company to change to ensure future viability?
• Map out a contingency plan for a “what-if” scenario if one key aspect of the company or the environment it operates in were drastically is altered?

Full Business Plan

Even full business plans can vary in length, scale, and scope. Rice University sets a ten-page cap on business plans submitted for the full competition. The IndUS Entrepreneurs , one of the largest global networks of entrepreneurs, also holds business plan competitions for students through its Tie Young Entrepreneurs program. In contrast, business plans submitted for that competition can usually be up to twenty-five pages. These are just two examples. Some components may differ slightly; common elements are typically found in a formal business plan outline. The next section will provide sample components of a full business plan for a fictional business.

Executive Summary

The executive summary should provide an overview of your business with key points and issues. Because the summary is intended to summarize the entire document, it is most helpful to write this section last, even though it comes first in sequence. The writing in this section should be especially concise. Readers should be able to understand your needs and capabilities at first glance. The section should tell the reader what you want and your “ask” should be explicitly stated in the summary.

Describe your business, its product or service, and the intended customers. Explain what will be sold, who it will be sold to, and what competitive advantages the business has. Table 11.3 shows a sample executive summary for the fictional company La Vida Lola.

Business Description

This section describes the industry, your product, and the business and success factors. It should provide a current outlook as well as future trends and developments. You also should address your company’s mission, vision, goals, and objectives. Summarize your overall strategic direction, your reasons for starting the business, a description of your products and services, your business model, and your company’s value proposition. Consider including the Standard Industrial Classification/North American Industry Classification System (SIC/NAICS) code to specify the industry and insure correct identification. The industry extends beyond where the business is located and operates, and should include national and global dynamics. Table 11.4 shows a sample business description for La Vida Lola.

Industry Analysis and Market Strategies

Here you should define your market in terms of size, structure, growth prospects, trends, and sales potential. You’ll want to include your TAM and forecast the SAM . (Both these terms are discussed in Conducting a Feasibility Analysis .) This is a place to address market segmentation strategies by geography, customer attributes, or product orientation. Describe your positioning relative to your competitors’ in terms of pricing, distribution, promotion plan, and sales potential. Table 11.5 shows an example industry analysis and market strategy for La Vida Lola.

Competitive Analysis

The competitive analysis is a statement of the business strategy as it relates to the competition. You want to be able to identify who are your major competitors and assess what are their market shares, markets served, strategies employed, and expected response to entry? You likely want to conduct a classic SWOT analysis (Strengths Weaknesses Opportunities Threats) and complete a competitive-strength grid or competitive matrix. Outline your company’s competitive strengths relative to those of the competition in regard to product, distribution, pricing, promotion, and advertising. What are your company’s competitive advantages and their likely impacts on its success? The key is to construct it properly for the relevant features/benefits (by weight, according to customers) and how the startup compares to incumbents. The competitive matrix should show clearly how and why the startup has a clear (if not currently measurable) competitive advantage. Some common features in the example include price, benefits, quality, type of features, locations, and distribution/sales. Sample templates are shown in Figure 11.17 and Figure 11.18 . A competitive analysis helps you create a marketing strategy that will identify assets or skills that your competitors are lacking so you can plan to fill those gaps, giving you a distinct competitive advantage. When creating a competitor analysis, it is important to focus on the key features and elements that matter to customers, rather than focusing too heavily on the entrepreneur’s idea and desires.

Operations and Management Plan

In this section, outline how you will manage your company. Describe its organizational structure. Here you can address the form of ownership and, if warranted, include an organizational chart/structure. Highlight the backgrounds, experiences, qualifications, areas of expertise, and roles of members of the management team. This is also the place to mention any other stakeholders, such as a board of directors or advisory board(s), and their relevant relationship to the founder, experience and value to help make the venture successful, and professional service firms providing management support, such as accounting services and legal counsel.

Table 11.6 shows a sample operations and management plan for La Vida Lola.

Marketing Plan

Here you should outline and describe an effective overall marketing strategy for your venture, providing details regarding pricing, promotion, advertising, distribution, media usage, public relations, and a digital presence. Fully describe your sales management plan and the composition of your sales force, along with a comprehensive and detailed budget for the marketing plan. Table 11.7 shows a sample marketing plan for La Vida Lola.

Financial Plan

A financial plan seeks to forecast revenue and expenses; project a financial narrative; and estimate project costs, valuations, and cash flow projections. This section should present an accurate, realistic, and achievable financial plan for your venture (see Entrepreneurial Finance and Accounting for detailed discussions about conducting these projections). Include sales forecasts and income projections, pro forma financial statements ( Building the Entrepreneurial Dream Team , a breakeven analysis, and a capital budget. Identify your possible sources of financing (discussed in Conducting a Feasibility Analysis ). Figure 11.19 shows a template of cash-flow needs for La Vida Lola.

Entrepreneur In Action

Laughing man coffee.

Hugh Jackman ( Figure 11.20 ) may best be known for portraying a comic-book superhero who used his mutant abilities to protect the world from villains. But the Wolverine actor is also working to make the planet a better place for real, not through adamantium claws but through social entrepreneurship.

A love of java jolted Jackman into action in 2009, when he traveled to Ethiopia with a Christian humanitarian group to shoot a documentary about the impact of fair-trade certification on coffee growers there. He decided to launch a business and follow in the footsteps of the late Paul Newman, another famous actor turned philanthropist via food ventures.

Jackman launched Laughing Man Coffee two years later; he sold the line to Keurig in 2015. One Laughing Man Coffee café in New York continues to operate independently, investing its proceeds into charitable programs that support better housing, health, and educational initiatives within fair-trade farming communities. 55 Although the New York location is the only café, the coffee brand is still distributed, with Keurig donating an undisclosed portion of Laughing Man proceeds to those causes (whereas Jackman donates all his profits). The company initially donated its profits to World Vision, the Christian humanitarian group Jackman accompanied in 2009. In 2017, it created the Laughing Man Foundation to be more active with its money management and distribution.

• You be the entrepreneur. If you were Jackman, would you have sold the company to Keurig? Why or why not?
• Would you have started the Laughing Man Foundation?
• What else can Jackman do to aid fair-trade practices for coffee growers?

What Can You Do?

Textbooks for change.

Founded in 2014, Textbooks for Change uses a cross-compensation model, in which one customer segment pays for a product or service, and the profit from that revenue is used to provide the same product or service to another, underserved segment. Textbooks for Change partners with student organizations to collect used college textbooks, some of which are re-sold while others are donated to students in need at underserved universities across the globe. The organization has reused or recycled 250,000 textbooks, providing 220,000 students with access through seven campus partners in East Africa. This B-corp social enterprise tackles a problem and offers a solution that is directly relevant to college students like yourself. Have you observed a problem on your college campus or other campuses that is not being served properly? Could it result in a social enterprise?

Work It Out

Franchisee set out.

A franchisee of East Coast Wings, a chain with dozens of restaurants in the United States, has decided to part ways with the chain. The new store will feature the same basic sports-bar-and-restaurant concept and serve the same basic foods: chicken wings, burgers, sandwiches, and the like. The new restaurant can’t rely on the same distributors and suppliers. A new business plan is needed.

• What steps should the new restaurant take to create a new business plan?
• Should it attempt to serve the same customers? Why or why not?

This New York Times video, “An Unlikely Business Plan,” describes entrepreneurial resurgence in Detroit, Michigan.

• 48 Chris Guillebeau. The $100 Startup: Reinvent the Way You Make a Living, Do What You Love, and Create a New Future . New York: Crown Business/Random House, 2012.
• 49 Jonathan Chan. “What These 4 Startup Case Studies Can Teach You about Failure.” Foundr.com . July 12, 2015. https://foundr.com/4-startup-case-studies-failure/
• 50 Amy Feldman. “Inventor of the Cut Buddy Paid YouTubers to Spark Sales. He Wasn’t Ready for a Video to Go Viral.” Forbes. February 15, 2017. https://www.forbes.com/sites/forbestreptalks/2017/02/15/inventor-of-the-cut-buddy-paid-youtubers-to-spark-sales-he-wasnt-ready-for-a-video-to-go-viral/#3eb540ce798a
• 51 Jennifer Post. “National Business Plan Competitions for Entrepreneurs.” Business News Daily . August 30, 2018. https://www.businessnewsdaily.com/6902-business-plan-competitions-entrepreneurs.html
• 52 “Rice Business Plan Competition, Eligibility Criteria and How to Apply.” Rice Business Plan Competition . March 2020. https://rbpc.rice.edu/sites/g/files/bxs806/f/2020%20RBPC%20Eligibility%20Criteria%20and%20How%20to%20Apply_23Oct19.pdf
• 53 “Rice Business Plan Competition, Eligibility Criteria and How to Apply.” Rice Business Plan Competition. March 2020. https://rbpc.rice.edu/sites/g/files/bxs806/f/2020%20RBPC%20Eligibility%20Criteria%20and%20How%20to%20Apply_23Oct19.pdf; Based on 2019 RBPC Competition Rules and Format April 4–6, 2019. https://rbpc.rice.edu/sites/g/files/bxs806/f/2019-RBPC-Competition-Rules%20-Format.pdf
• 54 Foodstart. http://foodstart.com
• 55 “Hugh Jackman Journey to Starting a Social Enterprise Coffee Company.” Giving Compass. April 8, 2018. https://givingcompass.org/article/hugh-jackman-journey-to-starting-a-social-enterprise-coffee-company/

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Evaluation Plan

A proposal for a major project that outlines all necessary details needed for its implementation or development

What is an Evaluation Plan?

An evaluation plan is part of the planning for a project – the part that is related to deciding how the project will be monitored and assessed to determine the project’s success and effectiveness. An effective evaluation plan should show how the project will be monitored and how its objectives will be met.

To effectively complete or implement most projects, an evaluation plan is needed. There are two basic types of evaluation plans:

Formative Evaluation Plan

A formative evaluation plan is completed before or during the project. A formative evaluation has the following characteristics:

• Evaluates upcoming or continuing activities of a project
• Covers activities from development to implementation stages
• Contains reviews from principal investigators , evaluators, and governing committees

Summative Evaluation Plan

A summative evaluation plan “sums” up the project. As such, it is written at a project’s completion. A summative plan is characterized by having the following features:

• Evaluates whether the goals that were achieved are the goals that were set. If not, the evaluation should state the extent of the variation and the reasons for it.
• Contains the details of the outcomes and information obtained during the project.
• Reports the outcome of the project to the principal investigator of the project, evaluators, and any governing committees.

There are some common content elements that should be included in an evaluation plan regardless of whether it is classified as formative or summative. They are as follows:

• The project to be evaluated
• Purpose of evaluation
• Key evaluation questions
• Notation of methods used, including methods for collecting and analyzing all the necessary data
• The reports and reviews of the stakeholders and investors directly involved in the project
• Resources needed to fund and facilitate the project
• Expected findings and outcomes of the project, as well as the expected time of the final report

How to Write an Evaluation Plan

Before writing an evaluation plan for your business, it is advisable to consult prior plans to see if certain formats are preferred. In general, however, the plans should include methods such as interviews, administration of questionnaires, and consultation that will be carried out during the project. Other items include:

• Clear title – The recommended way of writing the title is that you should write it on a page of its own. The title page should contain a recognizable name of the project, dates of the project, and the general focus of the evaluation plan.
• Uses and Users of the Evaluation Plan – It is essential to describe the use of the evaluation plan clearly. For transparency and accountability, under this section, you should clearly show the users of the plan. Again, you should describe the involvement of stakeholders and the financiers of the project in this same section.
• Project Description – Under this section, the developer of the evaluation plan should critically assess and describe what the entire project is all about. Here, it is essential to state what the project focuses on achieving, and the process for evaluating how successfully the project met its goals.
• Methodology – In this section, an evaluation plan should clearly state the methods that will be used to collect data, expected data sources, and the roles and responsibilities of each participant in the project. This is the section that should also describe which methods will be used to ensure that the project is completed successfully.
• Analysis – This section contains a thorough analysis of the project. It will show findings and reasons for any unexpected outcomes. It may also contain data analyses done before the projection’s completion and how it affected the project’s continuation.
• Sharing Plan – In most cases, the sharing plan section is often overlooked, despite the fact that it can play a major role. Toward the end of the plan, there should be a proper way of sharing evaluation findings. This section should also state how the findings and outcomes of the project will reach (be reported to) the involved stakeholders.

The Importance of an Evaluation Plan

• An evaluation plan is a valuable asset that can help ensure that a project runs smoothly. A well-documented plan states the roles of all participants in the project and the sources of all resources. This implies that there should be minimal delays. as everything should have been communicated ahead of time. Furthermore, if the plan clearly states the dates on which specific activities should take place, then the involved participants will be encouraged to be right on schedule.
• A good evaluation plan should cater to the smooth running of the project from its initial stages to its completion.
• An effective evaluation plan will also ensure better results in upcoming projects of the same nature.
• A well-documented evaluation plan enhances transparency and accountability. Involved participants, contractors, and stakeholders share the plan among themselves. The methodology section clearly outlines and describes how they obtained each finding and outcome.
• The practice of using evaluation plans should improve the success and effectiveness of projects undertaken by an organization. If the plans are well documented and filed, the organization can learn from previous projects and be able to better gauge the success of certain projects and project practices. The plans can also come in handy in helping the foundation or organization make critical decisions. This is because the information in the plan is not just gathered randomly – it is obtained after thorough research and evaluation of the project.
• A written evaluation plan is good for future references and for greater transparency and accountability.
• It is recommended that the data recorded in the plan be quantitative. However, the incorporation of both qualitative and quantitative data is important.
• Information in the evaluation plan describing the input, output, and activities of the project or program is vital. A table often makes it easier to obtain information at a glance.
• Be brief and straightforward in descriptions.
• It is advisable to keep the evaluation plan simple and concise. Information should be obtained from the plan with ease.

Additional Resources

CFI is a leading provider of  financial certifications and analyst training. To continue learning and advancing your career, these additional CFI resources will be helpful:

• Audit Materiality
• Due Diligence
• Payback Period
• Project Budget Template
• See all accounting resources

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How to build an organizational development plan: a comprehensive guide (+template), share this article.

Discover the power of strategic organizational development with our comprehensive plan and access a comprehensive template. Learn how to assess your company's current state, set strategic objectives, and create targeted action plans for growth.

Trying to keep up with the constant changes in the market sometimes feels like you’re a tortoise in a race full of hares. But the tortoise won the race in the end, and by taking the time for proper planning and organization, your organization can too.

Organizational development, or OD, is a process of planned change that seeks to increase the effectiveness and efficiency of an organization. An organizational development plan (ODP) is a comprehensive document that outlines how an organization will go about achieving its goals and objectives. 

It includes strategies for improving overall performance, developing employee skills, increasing customer satisfaction, and more. The ODP allows companies to identify their current strengths and weaknesses to create meaningful plans for improvement. 

By having a clearly-defined plan in place, organizations measure progress over time and make necessary adjustments as needed. An effective OD plan makes an organization more efficient, productive, competitive, and profitable. 

The benefits of implementing an organizational development plan include: 

• Improved employee morale
• Increased collaboration among staff
• Reductions in costs associated with reorganizations or restructurings
• Enhanced customer service levels
• Higher levels of productivity
• Improved communication among staff and management
• More efficient use of resources

Skip ahead:

Assessing Organizational Needs and Readiness

Defining organizational development goals and objectives, identifying key focus areas for improvement, action planning and implementation, monitoring and evaluation, sustaining organizational development, organizational development plan template, case studies and success stories, frequently asked questions.

The first step in crafting an ODP is conducting a thorough organizational analysis. This process involves examining the organization’s current state, including operational effectiveness, efficiency, customer satisfaction, employee engagement, and other relevant areas. Gaining a clear understanding of what requires improvement allows the organization to prioritize its efforts accordingly.

Consideration of External Factors

In addition to assessing internal aspects of the organization, it’s crucial to consider external factors that may impact performance – such as economic conditions or industry trends. By taking these outside influences into account when developing plans for growth and competitiveness can help ensure success.

SWOT Analysis

After completing a comprehensive analysis, organizations should use these findings to conduct a SWOT analysis – identifying strengths and weaknesses along with any opportunities or threats present. This information helps create strategies for capitalizing on strengths while minimizing or mitigating weaknesses as well as recognizing potential new revenue sources or competitive advantages.

Developing an Effective ODP

An effective ODP should include concrete steps addressing issues identified through the assessment process (organizational analysis and SWOT). It’s essential to take both internal factors (e.g., company culture, employee morale) and external forces (e.g., competition in the marketplace) into consideration during plan development so that adjustments can be made accordingly for maximum effectiveness.

The second step in crafting an ODP involves defining the organization’s goals and objectives, which will inform decisions about strategy implementation, resource allocation, and progress measurement. It is crucial to establish measurable, clear goals that align with the organization’s values and mission statement for easy progress tracking over time.

SMART Objectives

Once the overall goals are set, organizations should formulate SMART objectives – Specific, Measurable, Attainable, Relevant, and Time-bound targets. These criteria ensure that achievable targets are established while enabling organizations to evaluate their progress with tangible results. Moreover, these objectives should align with broader organizational goals to guarantee advancement towards larger ambitions.

Aligning Goals with Vision and Mission

Organizations must also ensure that their defined goals and objectives resonate with their vision and mission statements. This alignment allows organizations to optimize resource utilization in achieving overarching aspirations effectively.

Enhancing Decision-Making through Clarity

A comprehensive understanding of an organization’s desired direction facilitates improved decision-making when implementing strategies for growth or improvement. Setting clear organizational development goals aligned with a company’s vision and mission statement, along with well-defined SMART objectives, will enable organizations to navigate successfully throughout the entire process.

The third step in crafting an ODP involves pinpointing key areas for improvement based on the organization’s overall goals and objectives. Both short-term and long-term objectives should be considered when determining focus areas. Involving employees in this process can yield valuable insights into the current state of the organization and potential improvement points.

Developing Targeted Strategies 

After identifying focus areas, organizations can start formulating strategies and initiatives tailored to their specific needs, taking into account existing capabilities and resources. These strategies must be realistic and achievable to ensure success, with employee participation providing valuable input on potential solutions.

Allocating Resources Effectively

Organizations need to determine resource allocation – both financial and human – for each initiative while considering associated costs to maximize efficiency in resource use. Additionally, it is essential to provide adequate training and support for employees involved in implementing these strategies.

Establishing Key Performance Indicators (KPIs)

Lastly, setting up KPIs helps measure the success of implemented strategies over time, allowing organizations to track progress or make necessary adjustments as needed. Common KPIs include customer satisfaction, employee engagement, productivity, and profitability.

An effective ODP should consist of actionable steps to achieve desired outcomes. Break down large strategies into smaller tasks with specific timelines to keep the plan on track and ensure everyone is aware of their responsibilities. Establishing milestones also helps teams stay motivated and measure success over time.

Assigning Roles and Deadlines

Once the plan is broken down into manageable tasks, assign specific responsibilities and deadlines for each step. This approach ensures team members understand their roles in achieving desired outcomes while maintaining motivation through clear expectations.

Communication and Change Management Plans

Develop communication plans to keep all stakeholders informed about progress, allowing team members to voice opinions or suggest changes if needed. A concise communication plan promotes seamless organizational change implementation by ensuring everyone remains aligned at all times.

Risk Mitigation through Change Management

A well-defined change management plan enables teams to identify potential risks early in the process so they can be addressed proactively before becoming issues that could hinder progress.

Building Support among Stakeholders

Engage both internal (employees) and external (customers, suppliers, partners ) stakeholders throughout the planning process for widespread support of your ODP’s goals—this builds a sense of ownership that sustains motivation across all parties involved.

A crucial aspect of a successful ODP is setting measurable, specific, realistic, achievable, and timely goals that align with the organization’s values and mission statement. These metrics serve as benchmarks for measuring progress over time.

Tracking Progress and Milestones

Track progress by regularly assessing the organization’s current state against the ODP’s goals and objectives – enabling the identification of improvement areas or potential roadblocks. Monitoring also allows leadership to acknowledge successes while motivating employees toward further achievements.

Conducting Regular Reviews 

Perform regular reviews to examine organizational performance against established metrics, analyze successes and failures, and identify improvement areas or new growth opportunities – all while making necessary adjustments accordingly.

Maintaining Flexibility in ODPs 

Organizational development plans should remain adaptable based on evolving needs. If progress isn’t being made toward set objectives within the ODP framework, consider changes such as altering processes and procedures, adding staff members, or implementing new technologies.

For organizational development to have a lasting impact, it’s crucial to seamlessly integrate the plan into every aspect of company culture. Begin by clearly communicating the plan’s objectives and strategies to employees, ensuring they understand how their roles contribute to achieving these goals. 

Encourage open dialogue about why specific changes are necessary for both individual growth and overall success. By fostering a transparent environment, you’ll cultivate employee buy-in and facilitate smoother transitions throughout your organization.

Empowering Employees with Resources

Support your team by offering diverse resources tailored to their needs, like customized training programs , engaging workshops, insightful seminars, mentorship opportunities, or access to online learning platforms. 

Providing these tools ensures everyone stays aligned with your vision while knowing what they need to do for collective triumph. Empowering employees with resources helps them feel valued and nurtures personal growth that benefits the organization as a whole.

Cultivating a Learning Environment

Embrace a culture that prioritizes continuous learning and improvement at all levels within your organization. By regularly assessing processes and investing in employee skill development through targeted training initiatives or knowledge-sharing sessions, you’ll stay agile in today’s rapidly evolving business landscape. An ongoing commitment to nurturing talent will not only help attract top candidates but also retain existing talent eager for professional growth.

Acknowledging Accomplishments

It’s essential not just to celebrate major milestones but also to recognize small wins along the way; these acknowledgments fuel motivation, boost morale, and strengthen unity within an organization. In team settings where collaboration is key, recognizing personal contributions fosters camaraderie across all levels while encouraging further cooperation among coworkers.

Sharing success stories internally via newsletters or social media channels can inspire others on how their efforts play an essential role in achieving common goals – ultimately creating a positive feedback loop that benefits everyone involved.

Adapting Through Feedback Loops

Establish feedback loops to fine-tune your organizational development plans (ODP) effectively. These can involve employee surveys, one-on-one meetings, or regular team debriefs where employees openly discuss progress made and any challenges encountered. This regular input from employees helps identify areas needing improvement while adjusting ODPs accordingly.

To get started implementing your plan quickly, try this handy organizational development plan template .

This organizational development plan template provides a comprehensive structure for planning and implementing your organization’s development initiatives. You can customize the template to suit your organization’s specific needs and objectives.

The template also comes with charts for the ten organizational development plan frameworks.

These fillable templates can help you apply each of the ten organizational development frameworks to your organization. Customize them to suit your organization’s specific needs and objectives.

Organizational development plans can be implemented across many different industries. 

Marriott International, a prominent player in the hospitality industry, implemented an organizational development plan (ODP) aimed at enhancing customer satisfaction and loyalty. Leveraging data analytics to pinpoint areas needing improvement, they devised targeted strategies that led to significant growth in customer ratings and an 8% increase in overall profits.

Enhancing Patient Experience in Healthcare

In healthcare, Kaiser Permanente created an ODP encompassing process improvements and employee training initiatives to elevate patient satisfaction levels. This comprehensive strategy resulted in their patient experience scores soaring from an already impressive 84% satisfaction rate to a remarkable 94%.

Streamlining Manufacturing Processes

Toyota’s manufacturing sector adopted an ODP focused on augmenting quality, efficiency, and safety. Consequently, the company reduced production costs by 10% while simultaneously increasing customer satisfaction levels by 7%.

The Key to Successful Organizational Development Plans

These success stories illustrate how effective ODPs can benefit organizations across various industries. A well-crafted plan enables companies to monitor progress over time and make necessary adjustments as required.

For optimal results, it’s crucial for ODPs to be tailored specifically for each organization – identifying areas needing improvement while addressing potential obstacles that may hinder growth. Managers play a pivotal role here, ensuring employees comprehend the plan’s objectives and their individual roles within its execution.

Regularly measuring progress allows businesses to stay current with industry trends or internal changes within their organization and make adjustments or updates when needed accordingly.

Finally, communication is essential to keep all stakeholders informed of ongoing progress and fosters transparency while maintaining motivation toward achieving shared goals. 

Organizational development plans are a valuable tool for any type of organization. By creating an ODP, organizations can identify their current strengths and weaknesses to create meaningful plans for improvement. 

An effective OD plan should be tailored to an organization’s needs and goals, measure progress over time, communicate results regularly with all stakeholders involved, and make necessary adjustments or changes if needed. 

With careful planning and implementation, an organizational development plan increases performance, develops employee skills, increases customer satisfaction levels, reduces production costs, improves safety standards, and much more.

Download the Organizational Development Plan Framework: Propel Your Company’s Growth

Drive the growth and success of your organization with our comprehensive Organizational Development Plan Framework. This essential resource provides a structured approach to strategically enhance your company’s capabilities and maximize its potential.

Q. What is an organizational development plan? 

An organizational development plan (ODP) is a comprehensive document that outlines how an organization will achieve its goals and objectives. It includes strategies for improving overall performance, developing employee skills, increasing customer satisfaction, and more. 

Q. Why is an organizational development plan important for businesses? 

An organizational development plan improves performance and gets organizations closer to their goals. It provides a roadmap for the organization to follow to achieve success. 

The ODP outlines specific strategies to implement, such as training programs , process improvements, or changes in organizational culture. Having an effective plan will ensure that resources are allocated properly and progress is monitored over time.

Q. How do I assess the needs and readiness of my organization for development?

Assessing needs and readiness involves evaluating current performance, analyzing data on employee engagement and satisfaction, identifying areas where improvement is needed, and understanding the organization’s goals. 

It also requires looking at external factors that could affect your business such as changing customer demands or market trends. Once you have completed this assessment process, you will be better prepared to develop a comprehensive plan for achieving organizational success. 

Q. What are the key components of an effective organizational development strategy?

The key components of an effective organizational development strategy include: 

• Establishing a vision and mission statement
• Developing core values and objectives that align with the company’s vision and mission statement
• Identifying areas of improvement within the organization and developing plans to address them
• Implementing an effective communication plan
• Measuring progress against established benchmarks to determine success
• Evaluating and revising the ODP as needed based on feedback

Q. How do I implement an organizational development plan within my organization?

Implementing an ODP requires a comprehensive analysis of your current organizational structure and processes. This means assessing the strengths and weaknesses of your current system to identify areas for improvement. 

Once you have identified these areas, you can develop strategies for making improvements. These strategies should be tailored to your organization’s specific needs and goals and may include changes to policies, procedures, or even technology. 

Additionally, all stakeholders must be involved in the development process so that they understand why these changes are being made and how they will benefit them.

Q. How can I measure the effectiveness of an organizational development plan?

Organizational development plans should be evaluated regularly to determine if they are achieving their intended outcomes. Different metrics can be used depending on the type of plan, such as customer satisfaction surveys, employee engagement surveys, and performance reviews. Financial statements and other key performance indicators (KPIs) can give insight into an organization’s overall progress, too.

Q. Are there any templates available for creating an organizational development plan?

There are many templates available online that you can use to create an organizational development plan. These templates usually include sections for objectives, strategies, and action plans. They also offer guidance on what information to include in each section. This template is a fantastic resource for starting your ODP.

Q. Can you provide examples of organizations that have successfully implemented an organizational development plan?

Google has used an ODP to develop its internal structure and culture to create a more collaborative and innovative workplace. Similarly, Amazon has used OD plans to increase customer satisfaction by streamlining processes and creating better communication channels between employees and customers. Apple Inc. has also regularly utilized OD plans to update its product lines for maximum customer appeal and profitability.

Daniela Ochoa is the go-to Content Marketing Specialist here at Thinkific Plus! With years of experience in marketing and communications, she is passionate about helping businesses grow through strategic storytelling, innovative digital campaigns, and online learning at scale.On this blog, she shares her expertise in content marketing, lead generation, and more.

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• Section 5. Developing an Evaluation Plan

Chapter 36 Sections

• Section 1. A Framework for Program Evaluation: A Gateway to Tools
• Section 2. Community-based Participatory Research
• Section 3. Understanding Community Leadership, Evaluators, and Funders: What Are Their Interests?
• Section 4. Choosing Evaluators
• Section 6. Participatory Evaluation

• Main Section

Why should you have an evaluation plan?

After many late nights of hard work, more planning meetings than you care to remember, and many pots of coffee, your initiative has finally gotten off the ground. Congratulations! You have every reason to be proud of yourself and you should probably take a bit of a breather to avoid burnout. Don't rest on your laurels too long, though--your next step is to monitor the initiative's progress. If your initiative is working perfectly in every way, you deserve the satisfaction of knowing that. If adjustments need to be made to guarantee your success, you want to know about them so you can jump right in there and keep your hard work from going to waste. And, in the worst case scenario, you'll want to know if it's an utter failure so you can figure out the best way to cut your losses. For these reasons, evaluation is extremely important.

There's so much information on evaluation out there that it's easy for community groups to fall into the trap of just buying an evaluation handbook and following it to the letter. This might seem like the best way to go about it at first glance-- evaluation is a huge topic and it can be pretty intimidating. Unfortunately, if you resort to the "cookbook" approach to evaluation, you might find you end up collecting a lot of data that you analyze and then end up just filing it away, never to be seen or used again.

Instead, take a little time to think about what exactly you really want to know about the initiative. Your evaluation system should address simple questions that are important to your community, your staff, and (last but never least!) your funding partners. Try to think about financial and practical considerations when asking yourself what sort of questions you want answered. The best way to insure that you have the most productive evaluation possible is to come up with an evaluation plan.

Here are a few reasons why you should develop an evaluation plan:

• It guides you through each step of the process of evaluation
• It helps you decide what sort of information you and your stakeholders really need
• It keeps you from wasting time gathering information that isn't needed
• It helps you identify the best possible methods and strategies for getting the needed information
• It helps you come up with a reasonable and realistic timeline for evaluation
• Most importantly, it will help you improve your initiative!

When should you develop an evaluation plan?

As soon as possible! The best time to do this is before you implement the initiative. After that, you can do it anytime, but the earlier you develop it and begin to implement it, the better off your initiative will be, and the greater the outcomes will be at the end.

Remember, evaluation is more than just finding out if you did your job. It is important to use evaluation data to improve the initiative along the way.

What are the different types of stakeholders and what are their interests in your evaluation?

We'd all like to think that everyone is as interested in our initiative or project as we are, but unfortunately that isn't the case. For community health groups, there are basically three groups of people who might be identified as stakeholders (those who are interested, involved, and invested in the project or initiative in some way): community groups, grantmakers/funders, and university-based researchers. Take some time to make a list of your project or initiative's stakeholders, as well as which category they fall into.

What are the types of stakeholders?

• Community groups : Hey, that's you! Perhaps this is the most obvious category of stakeholders, because it includes the staff and/or volunteers involved in your initiative or project. It also includes the people directly affected by it--your targets and agents of change .
• Grantmakers and funders : Don't forget the folks that pay the bills! Most grantmakers and funders want to know how their money's being spent, so you'll find that they often have specific requirements about things they want you to evaluate. Check out all your current funders to see what kind of information they want you to be gathering. Better yet, find out what sort of information you'll need to have for any future grants you're considering applying for. It can't hurt!
• University-based researchers : This includes researchers and evaluators that your coalition or initiative may choose to bring in as consultants or full partners. Such researchers might be specialists in public health promotion, epidemiologists, behavioral scientists, specialists in evaluation, or some other academic field. Of course, not all community groups will work with university-based researchers on their projects, but if you choose to do so, they should have their own concerns, ideas, and questions for the evaluation. If you can't quite understand why you'd include these folks in your evaluation process, try thinking of them as auto mechanics--if you want them to help you make your car run better, you will of course include them in the diagnostic process. If you went to a mechanic and started ordering him around about how to fix your car without letting him check it out first, he'd probably get pretty annoyed with you. Same thing with your researchers and evaluators: it's important to include them in the evaluation development process if you really want them to help improve your initiative.

Each type of stakeholder will have a different perspective on your organization as well as what they want to learn from the evaluation. Every group is unique, and you may find that there are other sorts of stakeholders to consider with your own organization. Take some time to brainstorm about who your stakeholders are before you being making your evaluation plan.

What do they want to know about the evaluation?

While some information from the evaluation will be of use to all three groups of stakeholders, some will be needed by only one or two of the groups. Grantmakers and funders, for example, will usually want to know how many people were reached and served by the initiative, as well as whether the initiative had the community -level impact it intended to have. Community groups may want to use evaluation results to guide them in decisions about their programs, and where they are putting their efforts. University-based researchers will most likely be interested in proving whether any improvements in community health were definitely caused by your programs or initiatives; they may also want to study the overall structure of your group or initiative to identify the conditions under which success may be reached.

What decisions do they need to make, and how would they use the data to inform those decisions?

You and your stakeholders will probably be making decisions that affect your program or initiative based on the results of your evaluation, so you need to consider what those decisions will be. Your evaluation should yield honest and accurate information for you and your stakeholders; you'll need to be careful not to structure it in such a way that it exaggerates your success, and you'll need to be really careful not to structure it in such a way that it downplays your success!

Consider what sort of decisions you and your stakeholders will be making. Community groups will probably want to use the evaluation results to help them find ways to modify and improve your program or initiative. Grantmakers and funders will most likely be making decisions about how much funding to give you in the future, or even whether to continue funding your program at all (or any related programs). They may also think about whether to impose any requirements on you to get that program (e.g., a grantmaker tells you that your program may have its funding decreased unless you show an increase of services in a given area). University-based researchers will need to decide how they can best assist with plan development and data reporting.

You'll also want to consider how you and your stakeholders plan to balance costs and benefits. Evaluation should take up about 10--15% of your total budget. That may sound like a lot, but remember that evaluation is an essential tool for improving your initiative. When considering how to balance costs and benefits, ask yourself the following questions:

• What do you need to know?
• What is required by the community?
• What is required by funding?

How do you develop an evaluation plan?

There are four main steps to developing an evaluation plan:, clarifying program objectives and goals, developing evaluation questions, developing evaluation methods, setting up a timeline for evaluation activities.

The first step is to clarify the objectives and goals of your initiative. What are the main things you want to accomplish, and how have you set out to accomplish them? Clarifying these will help you identify which major program components should be evaluated. One way to do this is to make a table of program components and elements.

For our purposes, there are four main categories of evaluation questions. Let's look at some examples of possible questions and suggested methods to answer those questions. Later on, we'll tell you a bit more about what these methods are and how they work

• Possible questions : Who participates? Is there diversity among participants? Why do participants enter and leave your programs? Are there a variety of services and alternative activities generated? Do those most in need of help receive services? Are community members satisfied that the program meets local needs?
• Possible methods to answer those questions : monitoring system that tracks actions and accomplishments related to bringing about the mission of the initiative, member survey of satisfaction with goals, member survey of satisfaction with outcomes.
• Possible questions : How many people participate? How many hours are participants involved?
• Possible methods to answer those questions : monitoring system (see above), member survey of satisfaction with outcomes, goal attainment scaling.
• Possible questions : How has behavior changed as a result of participation in the program? Are participants satisfied with the experience? Were there any negative results from participation in the program?
• Possible methods to answer those questions: member survey of satisfaction with goals, member survey of satisfaction with outcomes, behavioral surveys, interviews with key participants.
• Possible questions : What resulted from the program? Were there any negative results from the program? Do the benefits of the program outweigh the costs?
• Possible methods to answer those questions : Behavioral surveys, interviews with key informants, community-level indicators.

Once you've come up with the questions you want to answer in your evaluation, the next step is to decide which methods will best address those questions. Here is a brief overview of some common evaluation methods and what they work best for.

Monitoring and feedback system

This method of evaluation has three main elements:

• Process measures : these tell you about what you did to implement your initiative;
• Outcome measures : these tell you about what the results were; and
• Observational system : this is whatever you do to keep track of the initiative while it's happening.

Member surveys about the initiative

When Ed Koch was mayor of New York City, his trademark call of "How am I doing?" was known all over the country. It might seem like an overly simple approach, but sometimes the best thing you can do to find out if you're doing a good job is to ask your members. This is best done through member surveys. There are three kinds of member surveys you're most likely to need to use at some point:

• Member survey of goals : done before the initiative begins - how do your members think you're going to do?
• Member survey of process : done during the initiative - how are you doing so far?
• Member survey of outcomes : done after the initiative is finished - how did you do?

Goal attainment report

If you want to know whether your proposed community changes were truly accomplished-- and we assume you do--your best bet may be to do a goal attainment report. Have your staff keep track of the date each time a community change mentioned in your action plan takes place. Later on, someone compiles this information (e.g., "Of our five goals, three were accomplished by the end of 1997.")

Behavioral surveys

Behavioral surveys help you find out what sort of risk behaviors people are taking part in and the level to which they're doing so. For example, if your coalition is working on an initiative to reduce car accidents in your area, one risk behavior to do a survey on will be drunk driving.

Interviews with key participants

Key participants - leaders in your community, people on your staff, etc. - have insights that you can really make use of. Interviewing them to get their viewpoints on critical points in the history of your initiative can help you learn more about the quality of your initiative, identify factors that affected the success or failure of certain events, provide you with a history of your initiative, and give you insight which you can use in planning and renewal efforts.

Community-level indicators of impact

These are tested-and-true markers that help you assess the ultimate outcome of your initiative. For substance use coalitions, for example, the U.S. Centers for Substance Abuse Prevention (CSAP) and the Regional Drug Initiative in Oregon recommend several proven indicators (e.g., single-nighttime car crashes, emergency transports related to alcohol) which help coalitions figure out the extent of substance use in their communities. Studying community-level indicators helps you provide solid evidence of the effectiveness of your initiative and determine how successful key components have been.

When does evaluation need to begin?

Right now! Or at least at the beginning of the initiative! Evaluation isn't something you should wait to think about until after everything else has been done. To get an accurate, clear picture of what your group has been doing and how well you've been doing it, it's important to start paying attention to evaluation from the very start. If you're already part of the way into your initiative, however, don't scrap the idea of evaluation altogether--even if you start late, you can still gather information that could prove very useful to you in improving your initiative.

Outline questions for each stage of development of the initiative

We suggest completing a table listing:

• Key evaluation questions (the five categories listed above, with more specific questions within each category)
• Type of evaluation measures to be used to answer them (i.e., what kind of data you will need to answer the question?)
• Type of data collection (i.e., what evaluation methods you will use to collect this data)
• Experimental design (A way of ruling out threats to the validity - e.g., believability - of your data. This would include comparing the information you collect to a similar group that is not doing things exactly the way you are doing things.)

With this table, you can get a good overview of what sort of things you'll have to do in order to get the information you need.

When do feedback and reports need to be provided?

Whenever you feel it's appropriate. Of course, you will provide feedback and reports at the end of the evaluation, but you should also provide periodic feedback and reports throughout the duration of the project or initiative. In particular, since you should provide feedback and reports at meetings of your steering committee or overall coalition, find out ahead of time how often they'd like updates. Funding partners will want to know how the evaluation is going as well.

When should evaluation end?

Shortly after the end of the project - usually when the final report is due. Don't wait too long after the project has been completed to finish up your evaluation - it's best to do this while everything is still fresh in your mind and you can still get access to any information you might need.

What sort of products should you expect to get out of the evaluation?

The main product you'll want to come up with is a report that you can share with everyone involved. what should this report include.

• Effects expected by shareholders : Find out what key people want to know. Be sure to address any information that you know they're going to want to hear about!
• Differences in the behaviors of key individuals : Find out how your coalition's efforts have changed the behaviors of your targets and agents of change. Have any of your strategies caused people to cut down on risky behaviors, or increase behaviors that protect them from risk? Are key people in the community cooperating with your efforts?
• Differences in conditions in the community : Find out what has changed Is the public aware of your coalition or group's efforts? Do they support you? What steps are they taking to help you achieve your goals? Have your efforts caused any changes in local laws or practices?

You'll probably also include specific tools (i.e., brief reports summarizing data), annual reports, quarterly or monthly reports from the monitoring system, and anything else that is mutually agreed upon between the organization and the evaluation team.

What sort of standards should you follow?

Now that you've decided you're going to do an evaluation and have begun working on your plan, you've probably also had some questions about how to ensure that the evaluation will be as fair, accurate, and effective as possible. After all, evaluation is a big task, so you want to get it right. What standards should you use to make sure you do the best possible evaluation? In 1994, the Joint Committee on Standards for Educational Evaluation issued a list of program evaluation standards that are widely used to regulate evaluations of educational and public health programs.The standards the committee outlined are for utility, feasibility, propriety, and accuracy. Consider using evaluation standards to make sure you do the best evaluation possible for your initiative.

Online Resource

The Action Catalogue is an online decision support tool that is intended to enable researchers, policy-makers and others wanting to conduct inclusive research, to find the method best suited for their specific project needs.

CDC Evaluation Resources  provides an extensive list of resources for evaluation, as well as links to key professional associations and key journals.

Developing an Evaluation Plan offers a sample evaluation plan provided by the U.S. Department of Housing and Urban Development.

Developing an Effective Evaluation Plan  is a workbook provided by the CDC. In addition to ample information on designing an evaluation plan, this book also provides worksheets as a step-by-step guide.

Evaluating Your Community-Based Program  is a handbook designed by the American Academy of Pediatrics and includes extensive material on a variety of topics related to evaluation.

GAO Designing Evaluations is a handbook provided by the U.S. Government Accountability Office. It contains information about evaluation designs, approaches, and standards.

The Magenta Book - Guidance for Evaluation  provides an in-depth look at evaluation. Part A is designed for policy makers. It sets out what evaluation is, and what the benefits of good evaluation are. It explains in simple terms the requirements for good evaluation, and some straightforward steps that policy makers can take to make a good evaluation of their intervention more feasible. Part B is more technical, and is aimed at analysts and interested policy makers. It discusses in more detail the key steps to follow when planning and undertaking an evaluation and how to answer evaluation research questions using different evaluation research designs. It also discusses approaches to the interpretation and assimilation of evaluation evidence.

Plan an Evaluation  is an extensive guide provided by MEERA aimed at providing detailed information on planning an evaluation.

Using Data as an Equity Tool  is an Urban Institute resource which provides strategies and key practices which place-based organizations can use to build local data capacity with their partners, improve service provision and day-to-day operations, and amplify community voices.

Print Resources

Argyris, C., Putnam, R., & Smith, D.  (1990).  Action Science , Chapter 2, pp. 36-79. San Francisco: Jossey-Bass.

Fawcett, S., in collaboration with Francisco, V., Paine-Andrews, A., Lewis, R., Richter, K., Harris, K., Williams, E., Berkley, J., Schultz, J., Fisher, J., & Lopez, C. (1993).  Work group evaluation handbook: Evaluating and supporting community initiatives for health and development . Lawrence, KS: Work Group on Health Promotion and Community Development, The University of Kansas.

Fawcett, S., Sterling, T., Paine, A., Harris, K., Francisco, V., Richter, K., Lewis, R., & Schmid, T. (1995).  Evaluating community efforts to prevent cardiovascular diseases . Atlanta, GA: Centers for Disease Control and Prevention, National Center for Chronic Disease Prevention and Health Promotion.

Francisco, V., Fawcett, S., & Paine, A.  (1993).  A method for monitoring and evaluating community coalitions . Health Education Research: Theory and Practice, 8(3), 403-416.

Fetterman. (1996). Empowerment evaluation: An introduction to theory and practice. In D.M. Fetterman, S. J. Kaftarian, & A. Wandersman (eds.),  Empowerment Evaluation: Knowledge and Tools for Self-Assessment and Accountability , (3-46).

Green, L., & Kreuter, M. (1991). Evaluation and the accountable practitioner.  Health promotion planning , (2nd Ed.), (pp. 215-260). Mountain View, CA: Mayfield Publishing Company.

Joint Committee on Standards for Educational Evaluation. (1994).  The program evaluation standards . Evaluation Practice, 15, 334-336.

Monitoring and Evaluation of Business Plans for Effectiveness: An Abstract

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How to Develop a Monitoring and Evaluation Plan

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Introduction

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What is a Monitoring and Evaluation Plan?

A monitoring and evaluation (M&E) plan is a document that helps to track and assess the results of the interventions throughout the life of a program. It is a living document that should be referred to and updated on a regular basis. While the specifics of each program’s M&E plan will look different, they should all follow the same basic structure and include the same key elements.

An M&E plan will include some documents that may have been created during the program planning process, and some that will need to be created new. For example, elements such as the logic model /logical framework, theory of change, and monitoring indicators may have already been developed with input from key stakeholders and/or the program donor. The M&E plan takes those documents and develops a further plan for their implementation.

Why develop a Monitoring and Evaluation Plan?

It is important to develop an M&E plan before beginning any monitoring activities so that there is a clear plan for what questions about the program need to be answered. It will help program staff decide how they are going to collect data to track indicators , how monitoring data will be analyzed, and how the results of data collection will be disseminated both to the donor and internally among staff members for program improvement. Remember, M&E data alone is not useful until someone puts it to use! An M&E plan will help make sure data is being used efficiently to make programs as effective as possible and to be able to report on results at the end of the program.

Who should develop a Monitoring and Evaluation Plan?

An M&E plan should be developed by the research team or staff with research experience, with inputs from program staff involved in designing and implementing the program.

When should a Monitoring and Evaluation Plan be developed?

An M&E plan should be developed at the beginning of the program when the interventions are being designed. This will ensure there is a system in place to monitor the program and evaluate success.

Who is this guide for?

This guide is designed primarily for program managers or personnel who are not trained researchers themselves but who need to understand the rationale and process of conducting research. This guide can help managers to support the need for research and ensure that research staff have adequate resources to conduct the research that is needed to be certain that the program is evidence based and that results can be tracked over time and measured at the end of the program.

Learning Objectives

After completing the steps for developing an M&E plan, the team will:

• Identify the elements and steps of an M&E plan
• Explain how to create an M&E plan for an upcoming program
• Describe how to advocate for the creation and use of M&E plans for a program/organization

Estimated Time Needed

Developing an M&E plan can take up to a week, depending on the size of the team available to develop the plan, and whether a logic model and theory of change have already been designed.

Prerequisites

How to Develop a Logic Model

Step 1: Identify Program Goals and Objectives

The first step to creating an M&E plan is to identify the program goals and objectives. If the program already has a logic model or theory of change, then the program goals are most likely already defined. However, if not, the M&E plan is a great place to start. Identify the program goals and objectives.

Defining program goals starts with answering three questions:

• What problem is the program trying to solve?
• What steps are being taken to solve that problem?
• How will program staff know when the program has been successful in solving the problem?

​Answering these questions will help identify what the program is expected to do, and how staff will know whether or not it worked. For example, if the program is starting a condom distribution program for adolescents, the answers might look like this:

From these answers, it can be seen that the overall program goal is to reduce the rates of unintended pregnancy and STI transmission in the community.

It is also necessary to develop intermediate outputs and objectives for the program to help track successful steps on the way to the overall program goal. More information about identifying these objectives can be found in the logic model guide .

Step 2: Define Indicators

Once the program’s goals and objectives are defined, it is time to define indicators for tracking progress towards achieving those goals. Program indicators should be a mix of those that measure process, or what is being done in the program, and those that measure outcomes.

Process indicators track the progress of the program. They help to answer the question, “Are activities being implemented as planned?” Some examples of process indicators are:

• Number of trainings held with health providers
• Number of outreach activities conducted at youth-friendly locations
• Number of condoms distributed at youth-friendly locations
• Percent of youth reached with condom use messages through the media

Outcome indicators track how successful program activities have been at achieving program objectives. They help to answer the question, “Have program activities made a difference?” Some examples of outcome indicators are:

• Percent of youth using condoms during first intercourse
• Number and percent of trained health providers offering family planning services to youth
• Number and percent of new STI infections among youth.

These are just a few examples of indicators that can be created to track a program’s success. More information about creating indicators can be found in the How to Develop Indicators guide .

Step 3: Define Data Collection Methods and TImeline

After creating monitoring indicators, it is time to decide on methods for gathering data and how often various data will be recorded to track indicators. This should be a conversation between program staff, stakeholders, and donors. These methods will have important implications for what data collection methods will be used and how the results will be reported.

The source of monitoring data depends largely on what each indicator is trying to measure. The program will likely need multiple data sources to answer all of the programming questions. Below is a table that represents some examples of what data can be collected and how.

Once it is determined how data will be collected, it is also necessary to decide how often it will be collected. This will be affected by donor requirements, available resources, and the timeline of the intervention. Some data will be continuously gathered by the program (such as the number of trainings), but these will be recorded every six months or once a year, depending on the M&E plan. Other types of data depend on outside sources, such as clinic and DHS data.

After all of these questions have been answered, a table like the one below can be made to include in the M&E plan. This table can be printed out and all staff working on the program can refer to it so that everyone knows what data is needed and when.

Step 4: Identify M&E Roles and Responsibilities

The next element of the M&E plan is a section on roles and responsibilities. It is important to decide from the early planning stages who is responsible for collecting the data for each indicator. This will probably be a mix of M&E staff, research staff, and program staff. Everyone will need to work together to get data collected accurately and in a timely fashion.

Data management roles should be decided with input from all team members so everyone is on the same page and knows which indicators they are assigned. This way when it is time for reporting there are no surprises.

An easy way to put this into the M&E plan is to expand the indicators table with additional columns for who is responsible for each indicator, as shown below.

Step 5: Create an Analysis Plan and Reporting Templates

Once all of the data have been collected, someone will need to compile and analyze it to fill in a results table for internal review and external reporting. This is likely to be an in-house M&E manager or research assistant for the program.

The M&E plan should include a section with details about what data will be analyzed and how the results will be presented. Do research staff need to perform any statistical tests to get the needed answers? If so, what tests are they and what data will be used in them? What software program will be used to analyze data and make reporting tables? Excel? SPSS? These are important considerations.

Another good thing to include in the plan is a blank table for indicator reporting. These tables should outline the indicators, data, and time period of reporting. They can also include things like the indicator target, and how far the program has progressed towards that target. An example of a reporting table is below.

Step 6: Plan for Dissemination and Donor Reporting

The last element of the M&E plan describes how and to whom data will be disseminated. Data for data’s sake should not be the ultimate goal of M&E efforts. Data should always be collected for particular purposes.

Consider the following:

• How will M&E data be used to inform staff and stakeholders about the success and progress of the program?
• How will it be used to help staff make modifications and course corrections, as necessary?
• How will the data be used to move the field forward and make program practices more effective?

The M&E plan should include plans for internal dissemination among the program team, as well as wider dissemination among stakeholders and donors. For example, a program team may want to review data on a monthly basis to make programmatic decisions and develop future workplans, while meetings with the donor to review data and program progress might occur quarterly or annually. Dissemination of printed or digital materials might occur at more frequent intervals. These options should be discussed with stakeholders and your team to determine reasonable expectations for data review and to develop plans for dissemination early in the program. If these plans are in place from the beginning and become routine for the project, meetings and other kinds of periodic review have a much better chance of being productive ones that everyone looks forward to.

After following these 6 steps, the outline of the M&E plan should look something like this:

• ​Program goals and objectives
• Logic model/ Logical Framework/Theory of change
• Table with data sources, collection timing, and staff member responsible
• Description of each staff member’s role in M&E data collection, analysis, and/or reporting
• Analysis plan
• Reporting template table
• Description of how and when M&E data will be disseminated internally and externally

M&E Planning: Template for Indicator Reporting

M&E Plan Indicators Table Template

M&E Plan: Data Sources Table Example

Tips & Recommendations

• It is a good idea to try to avoid over-promising what data can be collected. It is better to collect fewer data well than a lot of data poorly. It is important for program staff to take a good look at the staff time and resource costs of data collection to see what is reasonable.

Glossary & Concepts

• Process indicators track how the implementation of the program is progressing. They help to answer the question, “Are activities being implemented as planned?”
• Outcome indicators track how successful program activities have been at achieving program goals. They help to answer the question, “Have program activities made a difference?”

Resources and References

Evaluation Toolbox. Step by Step Guide to Create your M&E Plan. Retrieved from: http://evaluationtoolbox.net.au/index.php?option=com_content&view=article&id=23:create-m-and-e-plan&catid=8:planning-your-evaluation&Itemid=44

infoDev. Developing a Monitoring and Evaluation Plan for ICT for Education. Retrieved from: https://www.infodev.org/infodev-files/resource/InfodevDocuments_287.pdf

FHI360. Developing a Monitoring and Evaluation Work Plan. Retrieved from: http://www.fhi360.org/sites/default/files/media/documents/Monitoring%20HIV-AIDS%20Programs%20(Facilitator)%20-%20Module%203.pdf

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ABOUT HOW TO GUIDES

SBC How-to Guides are short guides that provide step-by-step instructions on how to perform core social and behavior change tasks. From formative research through monitoring and evaluation, these guides cover each step of the SBC process, offer useful hints, and include important resources and references.

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Sexual Assault Nurse Examiner/Forensic Nurse Hospital-based Staffing Solution: A Business Plan Development and Evaluation

• PMID: 33892950
• DOI: 10.1016/j.jen.2021.03.011

Nationally and internationally, providing competent and sustainable sexual assault nurse examiner/forensic nurse coverage has been a shared challenge. This project, "Sexual Assault Nurse Examiner/Forensic Nurse Hospital-based Staffing Solution: A Business Plan Development and Evaluation," provides an example for assessment, construction, implementation, and evaluation of a business plan for a sustainable sexual assault nurse examiner/forensic nurse staffing solution. By using preexisting float pool positions and converting them to sexual assault nurse examiner emergency nurses, coverage for sexual assault nurse examiner examinations in a 16-hospital health system was established, which decreased sexual assault nurse examiner turnover related to burnout while increasing the sustainability of sexual assault nurse examiner nurses who provided quality care to patients who had experienced a sexual assault, domestic or intimate partner violence, elder or child abuse or neglect, assault, strangulation, or human trafficking. Implementation of the business plan resulted in a 179% increase in completed sexual assault nurse examiner examinations and a 242% increase in all types of completed forensic examinations from 2015 to 2019 as 7 new community hospitals were added to the health system. A sum of more than $20 000 allocated for training new sexual assault nurse examiners/forensic nurses was saved per year by using a sexual assault nurse examiner emergency nurse. By creating a supportive structure that fosters and sustains sexual assault nurse examiners/forensic nurses, both medical and mental health concerns can be addressed through trauma-informed care techniques that will affect lifelong health and healing as well as engagement in the criminal justice process for patients who have experienced sexual assault, abuse, neglect, and violence.

Keywords: Business plan development and evaluation; Emergency department; Forensic nurse; Forensic program; Sexual assault and rape; Sexual assault nurse examiner.

Copyright © 2021 Elsevier Inc. All rights reserved.

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The essential components of a successful L&D strategy

Over the past decade, the global workforce has been continually evolving because of a number of factors. An increasingly competitive business landscape, rising complexity, and the digital revolution are reshaping the mix of employees. Meanwhile, persistent uncertainty, a multigenerational workforce, and a shorter shelf life for knowledge have placed a premium on reskilling and upskilling. The shift to a digital, knowledge-based economy means that a vibrant workforce is more important than ever: research suggests that a very significant percentage of market capitalization in public companies is based on intangible assets—skilled employees, exceptional leaders, and knowledge. 1 Intangible Asset Market Value Study, Ocean Tomo.

Learning and development—From evolution to revolution

We began in 2014 by surveying 1,500 executives about capability building. In 2016, we added 120 L&D leaders at 91 organizations to our database, gathering information on their traditional training strategies and aspirations for future programs. We also interviewed 15 chief learning officers or L&D heads at major companies.

Historically, the L&D function has been relatively successful in helping employees build skills and perform well in their existing roles. The main focus of L&D has been on upskilling. However, the pace of change continues to accelerate; McKinsey research estimates that as many as 800 million jobs could be displaced by automation by 2030.

Employee roles are expected to continue evolving, and a large number of people will need to learn new skills to remain employable. Unsurprisingly, our research confirmed our initial hypothesis: corporate learning must undergo revolutionary changes over the next few years to keep pace with constant technological advances. In addition to updating training content, companies must increase their focus on blended-learning solutions, which combine digital learning, fieldwork, and highly immersive classroom sessions. With the growth of user-friendly digital-learning platforms, employees will take more ownership of their professional development, logging in to take courses when the need arises rather than waiting for a scheduled classroom session.

Such innovations will require companies to devote more resources to training: our survey revealed that 60 percent of respondents plan to increase L&D spending over the next few years, and 66 percent want to boost the number of employee-training hours. As they commit more time and money, companies must ensure that the transformation of the L&D function proceeds smoothly.

All of these trends have elevated the importance of the learning-and-development (L&D) function. We undertook several phases of research to understand trends and current priorities in L&D (see sidebar, “Learning and development—From evolution to revolution”). Our efforts highlighted how the L&D function is adapting to meet the changing needs of organizations, as well as the growing levels of investment in professional development.

To get the most out of investments in training programs and curriculum development, L&D leaders must embrace a broader role within the organization and formulate an ambitious vision for the function. An essential component of this effort is a comprehensive, coordinated strategy that engages the organization and encourages collaboration. The ACADEMIES© framework, which consists of nine dimensions of L&D, can help to strengthen the function and position it to serve the organization more effectively.

The strategic role of L&D

One of L&D’s primary responsibilities is to manage the development of people—and to do so in a way that supports other key business priorities. L&D’s strategic role spans five areas (Exhibit 1). 2 Nick van Dam, 25 Best Practices in Learning & Talent Development , second edition, Raleigh, NC: Lulu Publishing, 2008.

• Attract and retain talent. Traditionally, learning focused solely on improving productivity. Today, learning also contributes to employability. Over the past several decades, employment has shifted from staying with the same company for a lifetime to a model where workers are being retained only as long as they can add value to an enterprise. Workers are now in charge of their personal and professional growth and development—one reason that people list “opportunities for learning and development” among the top criteria for joining an organization. Conversely, a lack of L&D is one of the key reasons people cite for leaving a company.
• Develop people capabilities. Human capital requires ongoing investments in L&D to retain its value. When knowledge becomes outdated or forgotten—a more rapid occurrence today—the value of human capital declines and needs to be supplemented by new learning and relevant work experiences. 3 Gary S. Becker, “Investment in human capital: A theoretical analysis,” Journal of Political Economy , 1962, Volume 70, Number 5, Part 2, pp. 9–49, jstor.org. Companies that make investments in the next generation of leaders are seeing an impressive return. Research indicates that companies in the top quartile of leadership outperform other organizations by nearly two times on earnings before interest, taxes, depreciation, and amortization (EBITDA). Moreover, companies that invest in developing leaders during significant transformations are 2.4 times more likely to hit their performance targets . 4 “ Economic Conditions Snapshot, June 2009: McKinsey Global Survey results ,” June 2009.
• Create a values-based culture. As the workforce in many companies becomes increasingly virtual and globally dispersed, L&D can help to build a values-based culture and a sense of community. In particular, millennials are particularly interested in working for values-based, sustainable enterprises that contribute to the welfare of society.
• Build an employer brand. An organization’s brand is one of its most important assets and conveys a great deal about the company’s success in the market, financial strengths, position in the industry, and products and services. Investments in L&D can help to enhance company’s brand and boost its reputation as an “employer of choice.” As large segments of the workforce prepare to retire, employers must work harder to compete for a shrinking talent pool. To do so, they must communicate their brand strength explicitly through an employer value proposition.
• Motivate and engage employees. The most important way to engage employees is to provide them with opportunities to learn and develop new competencies. Research suggests that lifelong learning contributes to happiness. 5 John Coleman, “Lifelong learning is good for your health, your wallet, and your social life,” Harvard Business Review , February 7, 2017, hbr.org. When highly engaged employees are challenged and given the skills to grow and develop within their chosen career path, they are more likely to be energized by new opportunities at work and satisfied with their current organization.

The L&D function in transition

Over the years, we have identified and field-tested nine dimensions that contribute to a strong L&D function. We combined these dimensions to create the ACADEMIES framework, which covers all aspects of L&D functions, from setting aspirations to measuring impact (Exhibit 2). Although many companies regularly execute on several dimensions of this framework, our recent research found that only a few companies are fully mature in all dimensions.

1. Alignment with business strategy

One of an L&D executive’s primary tasks is to develop and shape a learning strategy based on the company’s business and talent strategies. The learning strategy seeks to support professional development and build capabilities across the company, on time, and in a cost-effective manner. In addition, the learning strategy can enhance the company culture and encourage employees to live the company’s values.

For many organizations, the L&D function supports the implementation of the business strategy. For example, if one of the business strategies is a digital transformation, L&D will focus on building the necessary people capabilities to make that possible.

Every business leader would agree that L&D must align with a company’s overall priorities. Yet research has found that many L&D functions fall short on this dimension. Only 40 percent of companies say that their learning strategy is aligned with business goals. 6 Human Capital Management Excellence Conference 2018, Brandon Hall Group. For 60 percent, then, learning has no explicit connection to the company’s strategic objectives. L&D functions may be out of sync with the business because of outdated approaches or because budgets have been based on priorities from previous years rather than today’s imperatives, such as a digital transformation.

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To be effective, L&D must take a hard look at employee capabilities and determine which are most essential to support the execution of the company’s business strategy. L&D leaders should reevaluate this alignment on a yearly basis to ensure they are creating a people-capability agenda that truly reflects business priorities and strategic objectives.

2. Co-ownership between business units and HR

With new tools and technologies constantly emerging, companies must become more agile, ready to adapt their business processes and practices. L&D functions must likewise be prepared to rapidly launch capability-building programs—for example, if new business needs suddenly arise or staff members require immediate training on new technologies such as cloud-based collaboration tools.

L&D functions can enhance their partnership with business leaders by establishing a governance structure in which leadership from both groups share responsibility for defining, prioritizing, designing, and securing funds for capability-building programs. Under this governance model, a company’s chief experience officer (CXO), senior executives, and business-unit heads will develop the people-capability agenda for segments of the enterprise and ensure that it aligns with the company’s overall strategic goals. Top business executives will also help firmly embed the learning function and all L&D initiatives in the organizational culture. The involvement of senior leadership enables full commitment to the L&D function’s longer-term vision.

3. Assessment of capability gaps and estimated value

After companies identify their business priorities, they must verify that their employees can deliver on them—a task that may be more difficult than it sounds. Some companies make no effort to assess employee capabilities, while others do so only at a high level. Conversations with L&D, HR, and senior executives suggest that many companies are ineffective or indifferent at assessing capability gaps, especially when it comes to senior leaders and midlevel managers.

The most effective companies take a deliberate, systematic approach to capability assessment. At the heart of this process is a comprehensive competency or capability model based on the organization’s strategic direction. For example, a key competency for a segment of an e-commerce company’s workforce could be “deep expertise in big data and predictive analytics.”

After identifying the most essential capabilities for various functions or job descriptions, companies should then assess how employees rate in each of these areas. L&D interventions should seek to close these capability gaps.

4. Design of learning journeys

Most corporate learning is delivered through a combination of digital-learning formats and in-person sessions. While our research indicates that immersive L&D experiences in the classroom still have immense value, leaders have told us that they are incredibly busy “from eight to late,” which does not give them a lot of time to sit in a classroom. Furthermore, many said that they prefer to develop and practice new skills and behaviors in a “safe environment,” where they don’t have to worry about public failures that might affect their career paths.

Traditional L&D programs consisted of several days of classroom learning with no follow-up sessions, even though people tend to forget what they have learned without regular reinforcement. As a result, many L&D functions are moving away from stand-alone programs by designing learning journeys—continuous learning opportunities that take place over a period of time and include L&D interventions such as fieldwork, pre- and post-classroom digital learning, social learning, on-the-job coaching and mentoring, and short workshops. The main objectives of a learning journey are to help people develop the required new competencies in the most effective and efficient way and to support the transfer of learning to the job.

5. Execution and scale-up

An established L&D agenda consists of a number of strategic initiatives that support capability building and are aligned with business goals, such as helping leaders develop high-performing teams or roll out safety training. The successful execution of L&D initiatives on time and on budget is critical to build and sustain support from business leaders.

L&D functions often face an overload of initiatives and insufficient funding. L&D leadership needs to maintain an ongoing discussion with business leaders about initiatives and priorities to ensure the requisite resources and support.

Many new L&D initiatives are initially targeted to a limited audience. A successful execution of a small pilot, such as an online orientation program for a specific audience, can lead to an even bigger impact once the program is rolled out to the entire enterprise. The program’s cost per person declines as companies benefit from economies of scale.

6. Measurement of impact on business performance

A learning strategy’s execution and impact should be measured using key performance indicators (KPIs). The first indicator looks at business excellence: how closely aligned all L&D initiatives and investments are with business priorities. The second KPI looks at learning excellence: whether learning interventions change people’s behavior and performance. Last, an operational-excellence KPI measures how well investments and resources in the corporate academy are used.

Accurate measurement is not simple, and many organizations still rely on traditional impact metrics such as learning-program satisfaction and completion scores. But high-performing organizations focus on outcomes-based metrics such as impact on individual performance, employee engagement, team effectiveness, and business-process improvement.

We have identified several lenses for articulating and measuring learning impact:

• Strategic alignment: How effectively does the learning strategy support the organization’s priorities?
• Capabilities: How well does the L&D function help colleagues build the mind-sets, skills, and expertise they need most? This impact can be measured by assessing people’s capability gaps against a comprehensive competency framework.
• Organizational health: To what extent does learning strengthen the overall health and DNA of the organization? Relevant dimensions of the McKinsey Organizational Health Index can provide a baseline.
• Individual peak performance: Beyond raw capabilities, how well does the L&D function help colleagues achieve maximum impact in their role while maintaining a healthy work-life balance?

Access to big data provides L&D functions with more opportunities to assess and predict the business impact of their interventions.

7. Integration of L&D interventions into HR processes

Just as L&D corporate-learning activities need to be aligned with the business, they should also be an integral part of the HR agenda. L&D has an important role to play in recruitment, onboarding, performance management, promotion, workforce, and succession planning. Our research shows that at best, many L&D functions have only loose connections to annual performance reviews and lack a structured approach and follow-up to performance-management practices.

L&D leadership must understand major HR management practices and processes and collaborate closely with HR leaders. The best L&D functions use consolidated development feedback from performance reviews as input for their capability-building agenda. A growing number of companies are replacing annual performance appraisals with frequent, in-the-moment feedback. 7 HCM outlook 2018 , Brandon Hall Group. This is another area in which the L&D function can help managers build skills to provide development feedback effectively.

Elevating Learning & Development: Insights and Practical Guidance from the Field

Another example is onboarding. Companies that have developed high-impact onboarding processes score better on employee engagement and satisfaction and lose fewer new hires. 8 HCM outlook 2018 , Brandon Hall Group. The L&D function can play a critical role in onboarding—for example, by helping people build the skills to be successful in their role, providing new hires with access to digital-learning technologies, and connecting them with other new hires and mentors.

8. Enabling of the 70:20:10 learning framework

Many L&D functions embrace a framework known as “70:20:10,” in which 70 percent of learning takes place on the job, 20 percent through interaction and collaboration, and 10 percent through formal-learning interventions such as classroom training and digital curricula. These percentages are general guidelines and vary by industry and organization. L&D functions have traditionally focused on the formal-learning component.

Today, L&D leaders must design and implement interventions that support informal learning, including coaching and mentoring, on-the-job instruction, apprenticeships, leadership shadowing, action-based learning, on-demand access to digital learning, and lunch-and-learn sessions. Social technologies play a growing role in connecting experts and creating and sharing knowledge.

9. Systems and learning technology applications

The most significant enablers for just-in-time learning are technology platforms and applications. Examples include next-generation learning-management systems, virtual classrooms, mobile-learning apps, embedded performance-support systems, polling software, learning-video platforms, learning-assessment and -measurement platforms, massive open online courses (MOOCs), and small private online courses (SPOCs), to name just a few.

The learning-technology industry has moved entirely to cloud-based platforms, which provide L&D functions with unlimited opportunities to plug and unplug systems and access the latest functionality without having to go through lengthy and expensive implementations of an on-premises system. L&D leaders must make sure that learning technologies fit into an overall system architecture that includes functionality to support the entire talent cycle, including recruitment, onboarding, performance management, L&D, real-time feedback tools, career management, succession planning, and rewards and recognition.

L&D leaders are increasingly aware of the challenges created by the fourth industrial revolution (technologies that are connecting the physical and digital worlds), but few have implemented large-scale transformation programs. Instead, most are slowly adapting their strategy and curricula as needed. However, with technology advancing at an ever-accelerating pace, L&D leaders can delay no longer: human capital is more important than ever and will be the primary factor in sustaining competitive advantage over the next few years.

The leaders of L&D functions need to revolutionize their approach by creating a learning strategy that aligns with business strategy and by identifying and enabling the capabilities needed to achieve success. This approach will result in robust curricula that employ every relevant and available learning method and technology. The most effective companies will invest in innovative L&D programs, remain flexible and agile, and build the human talent needed to master the digital age.

These changes entail some risk, and perhaps some trial and error, but the rewards are great.

A version of this chapter was published in TvOO Magazine in September 2016. It is also included in Elevating Learning & Development: Insights and Practical Guidance from the Field , August 2018.

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Jacqueline Brassey is director of Enduring Priorities Learning in McKinsey’s Amsterdam office, where Nick van Dam is an alumnus and senior adviser to the firm as well as professor and chief of the IE University (Madrid) Center for Learning Innovation; Lisa Christensen is a senior learning expert in the San Francisco office.

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How to Create an Effective Employee Development Plan

Happy employees feel that their employers care about their development. That’s why, if employee retention is one of your priorities, having an employee development plan in place is a must. It creates a formal pathway for improving an employee’s knowledge, performance, and skills at work.

But then there are effective employee growth plans. For various reasons, many companies can’t provide training and development that matches the exact needs of individual employees. These reasons include difficulties with:

• Sourcing experts (coaches, mentors, and trainers) with specialties in granular skill areas
• Coordinating employee development programs across potentially hundreds of workers and dozens of experts
• Enabling measurable employee development goals to understand the progress of the worker, the quality of training programs, and effectiveness of experts

In light of this, the L&D industry is full of authorities, philosophies, and methods that promise success, but often fail to meet their mark. In turn, employees are frustrated by the scarcity or unfulfilled promises of employee development plans that are meant to advance their careers and make them successful. Survey after survey in recent years has made it clear that employees cite the “lack of career development” as the number one reason for leaving their jobs.

<< Download FREE Employee Development Plan Template >>

What Is a Personalized Employee Development Plan?

The answer to this issue is to create development plans that are centered around individualized courses. Simply put, a personalized employee development plan covers:

• Precise skills that the employee wants and which the organization needs
• A schedule of experts and courses to provide the skills
• An evaluation method based on measurable goals

Employee development plans are linked to individual workers, so HR should use a development plan template that allows entries for specific employees. Furthermore, because training occurs over time, the record should be set up for numerous entries. 

Employee Development Plan Goals and Benefits

Arranging such programs can be a complicated process. But the results of an effective development planning process are extensive. 

Expanding Width and Breadth of Skills

Companies that are increasing in size or entering new markets usually need a bigger skills inventory. Personalized employee development plans can have many related goals. Examples include building leadership skills , nurturing self-management abilities , and improving critical thinking approaches. Common employee development plan examples include general soft skills training , exposure to leadership roles, and succession planning . 

Taking Proactive Steps

The purpose of an employee development plan is to help an organization’s growth, development, and productivity. COVID-19 emphasized the importance of developing high-value workers to increase employee engagement rates and foster retention. Having an employee development plan in place will enable proactive skills-building (rather than taking a reactive approach), which can result in higher productivity and job satisfaction. 

Increasing Your Organizational Flexibility

Having a plan in place makes shifting priorities and moving development sprints around easy, since you already know what your goals are. Without a ready plan, even the smallest pebble can get caught in your cogs and create even more chaos.

Creating a Culture of Learning Across Your Organization

With buy-in from upper management and support throughout the organization, employee development can foster a new culture of learning that keeps employees excited and helps to attract new talent who understand the value of continued development.

A competitive company with an extensive learning culture is almost five times more likely to be a better performer than a lower performer. In addition, high performers are nearly twice as likely to say their learning functions help meet organizational business goals.

Improving Performance AND Output

An effective employee development plan enables employees to improve relevant professional skills or learn new, faster ways to do work that previously took long periods of time. With only about 33% of employees actively engaged in their work, an employee development plan and the L&D program that goes along with it can greatly increase productivity while making employees feel valued by contributing more to the organization – especially important in the new remote and hybrid ways of working.

Retaining Current Employees, Entice New Recruits

The expense to replace a single employee can cost anywhere from $25,000 to $100,000 or more, depending on the employee’s seniority and method of recruiting. Employee development plans, along with an effective L&D strategy, reduce the likelihood of employee churn

Growing Potential Talents into Leaders

When the 2008 recession hit, and again in the wake of COVID, lots of mid-level managers were let go and their former employees were plunged into new managerial positions with no training and little support. An effective employee development plan would mitigate that issue by having succession plans already created. Development programs in these situations can be created quickly, especially if the organization is already using an L&D platform.

How Do Other Kinds of Development Plans Fit in?

In the HR “toolbox”, there are many types of development that fit various sorts of objectives. Let’s examine three common types of development plans and how they differ:

• Employee development plans cover all the activities that an employee does, with the support of HR, to grow in their current role and prepare for future ones. This can include acquiring soft skills, training in areas that are specific to the company, onboarding, and experiential training like job rotation.
• Professional development plans focus on the skills that a worker will use throughout their career. There are many such abilities, but some common areas for professional development include communications, leadership, and problem-solving.
• Career development plans go one step beyond professional development plans to discuss specific roles that an employee might take at their current organization. Career development plans have all the types of training as do employee development plans, but add the long-term focus of a professional development plan. 

Examples of Employee Development Plans

The structure of employee development plans can be as diverse as employees themselves. Some put all the focus on the employee’s skill gaps, while some include equal responsibility for the employee’s manager; some list goals and tasks disparately, while others connect each goal to specific action items, and so on. Choosing the right plan style depends on the employee’s role, stature, objectives, timeline, and other factors. To give you an idea, here are four sample formats of commonly used employee development plans:

Employee development plan based on time frame

This style of employee development plan breaks down the training needs and milestones according to specific time periods.

<< Download FREE 12-Month Employee Development Plan Template >>

Employee development plan based on skill gaps

Another effective way to structure your employee development plan is according to skill gaps, and matching them to specific actions.

Employee development plan based on objectives

Some find it most helpful to structure the employee development plan according to professional areas and outcomes, including the action items and costs involved.

<< Download FREE Development Plan Based on Objectives Template >>

Employee development plan based on performance

A more aesthetic way to present an employee development plan is to put the focus on overall performance, looking at the big picture, as opposed to detailing specific skills.

Steps for Creating an Employee Development Plan

1. analyze skills and set goals.

The first step in creating an employee development plan is to conduct a skill gap analysis :

• Examine current levels : Determine what types of skills are lacking among the current staff, and remember to ask employees about which skills they believe are important to develop for themselves and the company.
• Account for strategy : Check if strategic plans might require new skills to be developed.
• Look at industry trends : See if there are new kinds of development initiatives that may be relevant to your organization and employees.
• Put it all together : Organize the employees, experts, materials, and schedule for the employee development plan.
• Set goals : Set evaluation points, including KPIs, for metrics like course completion rates and manager approval, to determine if the employee development plan was successful. This is crucial for understanding if your employees are gaining the expertise and knowledge needed for their careers.

Determining the skills gap and goal-setting for individual employees can be a complex exercise. For example, if you wanted to create an employee development plan for sales management skills, it would involve multiple elements. The employees would receive instructions about improving their own sales abilities, managing employees, and using departmental systems. 

But each of those skills requires a separate goal or KPI. In addition, the above example shows how “sales management” is a group of elements, each of which needs specific instruction. The employee development plan must be adjusted for such individual requirements; otherwise, employees will potentially waste their time and energy on irrelevant material.

Finally, chances are that an experienced employee requires less advising than a new one, so any employee development plan must account for seniority as well. In short, an effective employee development plan must be scalable and able to adjust to the needs of individuals.

2. Source Experts and Recruit Managers

The current approach to finding experts usually relies on an organization’s “go-to” list, or finding local coaches and trainers who have a background in a certain skill set, such as “management” or “communication”. Yet one of the reasons behind failed employee development plans can be traced to the “elements” problem discussed above: Certain skills should be taught on a granular level.

Locating the right, qualified experts for your employees’ specific skill gaps is critical in developing effective employee development plans. Each employee should receive instruction from an expert in the specific skill that they require. If “managing sales employees” is the targeted skill, then the expert should address this exact area.

It may be necessary for an organization to leave their comfort zone and find these types of specific experts. This move is highly practical in today’s market, where required skills frequently change . And today, with online platforms that connect organizations to qualified, highly-vetted experts, companies can more easily find the relevant coach, expert, or trainer to help fill a specific employees’ gaps.

Another essential part of any employee development plan is the employee’s manager, who needs to:

• Participate in scheduling the course, if required by HR
• Arrange the employee’s tasks so productivity is not affected
• Provide feedback and evaluation (in the next phase)
• Get employee development plan buy-in from senior management to ensure successful employees have the backing of the C-Suite

This last point is often overlooked. There isn’t much reason for an employee to work hard in a development program but see no upside. Such a situation is common today, as an employee can expect to spend 50% longer in a single position than they would have in 2008. It should be understood within the organization that an employee who passes employee development plans should either be promoted, given a raise, or receive some other kind of recognition for their efforts.

3. Evaluate the Employee, Course, and Expert

The most common practice is to conduct a feedback session halfway through the employee development plan, and then at the end. The challenge here is to use an evaluation method that makes sense to all of the stakeholders. As an example, perhaps the HR department can understand the wide variety of evaluation methods that are out there, but not the sales department manager.

That’s why a simple approach that concentrates on the end result – improved performance – is optimal. Additionally, if the organization wants to use the same expert and method of instruction in the future, then the same sort of question should be asked – did the course and the expert enable the employee to reach the employee development plan’s goal?

Take the Easier Path by Implementing an Employee Development Platform

Modern L&D platform s offer organizations the easy way to create and execute effective employee development plans by matching each employee with the right expert – whether that’s a coach, mentor, or trainer. These technologies can reduce your employee skill gaps and create a culture of learning and development that will not only retain your employees, but also keep them engaged. These platforms enable evaluation and administrative functions that are accessible to all stakeholders, based on a user-friendly interface. In sum, quality L&D platforms answer every need of a successful employee development plan.  

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New director of planning and development is focused on business. See who it is

A new director for the City of Jackson's Department of Planning and Development has been confirmed.

On Tuesday, the Jackson City Council confirmed Jhai Keeton as the new panning and development director. Keeton had been serving as interim director since the resignation of Chloe Dotson in February. Keeton previously served as a deputy director in the planning department.

The vote was unanimous to confirm Keeton, but not before council members grilled him with questions about how he plans to improve the city.

Keeton outlined his goals: economic development and turning Jackson into more of a business-friendly city.

“I am an economic developer more than I am a planner, and I think this represents a good opportunity for the city of Jackson because we’ve always had planners,” Keeton said during his confirmation. "Everything we do on the planning side should be to better position us to do business."

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Keeton has a master's degree in science and economic development from the University of Southern Mississippi, as well as a bachelor's degree in business administration and accounting from Jackson State University, according to his resume.

Since September 2023, the city has lost four department heads, including a director for the Department of Public Works, which has sat vacant for over a year now.

But progress has been made, with Keeton being the latest department head to be confirmed for the city this year. Previously, Drew Martin was confirmed City Attorney in February and Abram Muhammad was confirmed as director of the Department of Parks and Recreation in January.

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Your guide to creating effective employee development plans

Why do employees quit? In 2023, most workers didn’t hit the road because of toxic work cultures, inadequate benefits, or unreasonable compensation — they left because of a lack of career opportunities.

KAT BOOGAARD

Kat writes about topics in the careers, human resources, productivity, project management, and business ownership spaces.

And unfortunately, that’s not a new phenomenon. According to data from Pew Research Center , “no opportunities for advancement” was one of the top reasons workers quit jobs in 2021 too, tied only with low pay. 

The majority of employees (67% of them in a survey conducted by MIT Sloan ) are eager to advance their careers. Yet, research from Gartner shows that only 46% feel supported in honing their skills and forging their path up the ladder at their current organization.

Here’s where employee development plans hold a lot of power. These seemingly humble documents get you and your workers on the same page about professional goals and progress, while providing much-needed visibility into how employees can advance their careers within the company. 

What is an employee development plan?

An employee development plan is a document created collaboratively by a manager and an employee that spells out a single worker’s professional goals and a detailed action plan for achieving them. 

While the employee development plan is largely focused on the desires and ambitions of the employee, it should balance individual goals with the needs of your organization and the “expected objectives for the employee to contribute to the company,” explains Sarah Morgan , a senior recruiter. 

Put simply, a solid employee development plan won’t just fuel the growth of a single employee — it’ll fuel the growth of your entire organization.

What should you include in an employee development plan? 

Despite the fact “employee development plan” sounds rigid and formal, these documents are surprisingly flexible. You have the freedom to adapt them to the needs of your employee, team, or entire organization.

Some companies create highly detailed development plans that are several pages long, while others opt for quick bullet points that fit in a chart on a single page. 

Additionally, your plan is largely dictated by the employee’s specific circumstances. For example, are you documenting a plan to support them in:

• Building a specific skill?
• Moving to the next level of their existing career?
• Switching to an entirely different function or career path?

Those unique situations might require different sections within your plan. But, speaking generally, an employee development plan will include:

• Timelines: It’s not a plan without a timeline. Each plan should include dates — whether they’re attached to goals or specific action steps — so that the manager and employee are aligned on when things will be accomplished.

Eager to jump in and get started? Here’s a simple employee development plan template you can use:

Who creates an employee development plan?

The employee and the manager work together to create an employee development plan. But when you boil it all down, who’s ultimately responsible? “This is a question for the ages and may garner a few perspectives,” Sarah says. “I do believe it should be a joint effort by employee and manager to create as well as maintain. That said, managers should be aware that there are some areas where they need to take initiative with the employee.”

However, the reverse can also be true — employees might need to advocate for themselves and their goals, especially if they feel they aren’t getting the support or investment they believe they deserve.

Regardless of who’s doing the actual documenting, the most important thing is that the process is collaborative so that both the manager and the direct report feel bought-in and committed. When the plan is ready to go, it’s also smart to share a copy with the HR team so they’re in the loop.

Why are employee development plans important?

Employee development plans are way more than a formality or unnecessary recordkeeping. When they’re done well, these plans offer several benefits for employees and their companies.

Employee development plan benefits for employees

• Improved clarity: According to Gartner, only 25% of employees are confident about their career path with their current organization. An employee development plan aligns employees and their managers on next steps and objectives, and provides more clarity about what an employee is working toward.

Employee development plan benefits for employers

• Better strategic alignment: Your ultimate goal in improving employee performance is to improve company performance, but that doesn’t happen if there’s a mismatch between individual and organizational goals. Employee development plans give managers and employees an opportunity to confirm their goals align, as well as to revisit them at regular intervals.

3 tips to make the most of employee development plans

Employee development plans themselves are a learning process—the more of them you do, the more you’ll learn about what works best for your team and organization. However, there are a few best practices that can help you right out of the gate.

1. Personalize the process

One employee might want to take the lead in ironing out their development plan while another might need some more prompting and encouragement. One person might be hungry for feedback while another is resistant to too much constructive criticism.

The development planning process will be most helpful when it’s personalized to each employee. While your plan template itself can stay largely the same, tailor your approach and related conversations to the preferences and unique qualities of your employees.

2. Set specific goals

One of the mistakes Sarah frequently sees organizations make with development plans is relying on vague or unclear goals. She recommends opting for the SMART goal framework , where goals are:

• M easurable
• A chievable
• T ime-bound

Here’s a quick comparison to show how much clarity this framework adds to development goals: 

• After: Improve public speaking skills by volunteering as a speaker for at least three company events by the end of 2024. 

Plus, the SMART goal framework touches on a lot of other important aspects of an employee’s development plan, such as a timeline and success metrics. 

3. Continue to check in

“I think my biggest frustration as both an employee myself and someone in HR is that it’s not visited throughout the quarter or year,” Sarah says about most development plans. “They’re often created as a ‘box to check’ and then go back into the file to die.”

That not only wastes time but can also breed frustration in employees who will take it as evidence that you’re not truly invested in their development. You can combat this by

• Scheduling a designated meeting to talk about updates to development goals when there’s a larger shift, such as a company strategy change or a team restructuring

When you involve employees in creating their development plans, listen thoughtfully to their goals, questions, and feedback, and commit to ongoing conversations about their progress, you’ll show them that their growth and advancement is an ongoing priority — not a one-time event.

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