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APRIL 2002

Business Plan
Spring Clean the One You Have

By Jack Lewis Ludwig, CFP

The events in the stock markets and the economy, since March of 2000, tell us that things change and that we need to be prepared for the dramatic as well as the traumatic if we want to be around for the next day, month, year, or decade. What are you doing about it now?

While no one can foresee all the various problems that a portfolio or business may encounter, having thought about a plan as well as having one will make you and your business better prepared to prosper, let alone survive.

Let me share an example of chasing away a long-time customer simply from having two points of view, neither of which is the customer's. You have a web site that offers 50-percent-off coupons for a "low end" wash. The customer may make up the difference for a "high end" wash. The customer tells others about your web site or facility. You get new customers.

You then update your web site and now offer a $3 discount off any wash the customer chooses. That represents a significant decrease in the discount for the customer. The customer then goes to your facility and presents the $3-off coupon, which only nets a $1 real discount off the regularly (permanent) $2 discounted "high end" wash. Your employee fails to realize how angry the customer is for having made such an effort to find the site, print the coupon and come to your facility to take advantage of a seemingly worthless offer. What is your opinion of this event? How would you have prepared to avoid this loss of a 20-year customer? What actions should you have taken to make this a positive change instead of generating such negative exposure and results? Here are a few ideas:

• Do you collect e-mail addresses of visitors to your site to advise them about upcoming changes to allow them to take advantage of old discounts before a change takes effect?
• Do you now collect e-mail addresses to maintain contact and thank these future customers with a free report on the benefits of car care through regular detailing and washing?
• Do you offer them a chance to win a free wash by registering their e-mail address and other info that will serve you to serve them, so that you may keep contact with them?
• Have you actually checked the significance of the $3-off coupon when it is presented?
• What are you doing to "drive" visitors to your web site? Or are you paying a webmaster to simply create a great view with no access roads, direction signs, or promotions? Have you ever heard about the struggling hotdog stand on the outskirts of a small town whose owner put up one sign and then another, and another, achieving monumental success? After the owner retired, his son and heir decided that he didn't need all those signs and depublicized the stand into bankruptcy.
• Do you offer visitors a free car wash or other incentive for referring customers to your facility or web site? Do you offer one free wash with every 10 on a web-site coupon?
• Are you maintaining statistics about your web site and its visitors?

A business plan is nothing more than strategies in writing that describe where you are; what you have; how you're going to get where you need to and/or want to be; and when you'll need to get there. It is, in other words, a road map to success with driving directions and an expected time of arrival (ETA). For a driving example, checkout the web site for MapQuest at It will give you an idea of the meaningful detail necessary for a well-designed trip and allow you to compare it to how well you've detailed your business plan. The simple question is, do you know where you are and do you really know how you're going to get to where you're going?

If you are getting into the spirit of the concept, you should be asking, "Why plan?" Andy Bangs, who wrote a booklet for Chase Vista Funds a few years ago, said that a business plan is key to getting to the next level because it:

• Forces you to take a realistic look at your business or business idea(s);
• Helps you to frame your philosophy, beliefs, and business approach;
• Allows you to organize, which enables you to spot opportunities and challenges;
• Helps you to forecast and to budget effectively;
• Makes it easier for you to communicate "your vision" and ideas to your employees;
• Helps you to measure your progress throughout each year.

Each business plan is unique, not because there is no prescribed formula or predefined set of steps to follow, rather because it represents the ideas and personal interpretations of where the plan creator and business innovator wants it to go.

In other (1H and 5W) words: who are you, where are you, what do you want, when do you want it, and how are you going to get there; assuming you know why you want to punish yourself with opportunity? Some of these questions may provide you with a guideline as you answer them critically and candidly:

1. What is your business attitude and profile?

• Are you a generalist or specialist/authority in your chosen field or venture?
• If you are an authority, what exactly is it that you know most or do best?
• What types of individuals comprise your current customer list? Income range; vehicle price and age; lifestyle?
• Is your business a start-up or an existing company in need of infusions?
• What are or will be your company's strengths and weaknesses?
• What are your company's threats and liabilities; its opportunities?
• What is the nature of and who is your competition?
• What should your share of the market be? What is it now?
• Describe how your best level of service would be or is provided?
• Describe your supplier dependencies. How can they be improved?
• What is your price structure and how competitive is it?

2. What are your qualitative business aims, goals, and objectives?

• Do you want to establish your facility as the preeminent provider of quality car washes, detailing, etc. to individuals and/or to corporations/fleets?
• Are you planning a full-service facility specializing in restoration or an economy car-cleaning site?
• Do you plan to generate awareness through location and signage, advertising, public relations, or other marketing ideas? Are you considering donating a percentage of your profits to charity or to host fundraising washes at your facility?
• Do you want to change the buying behavior of a certain segment of the local market? Will you achieve it through senior discounts, supermarket checkout coupons, VIP mailers, gift wash booklets, etc?

3. What are your quantitative business aims, goals and objectives?

• Do you want to achieve a set level of steady revenue or vehicles serviced by a given date? Are you targeting different service levels: Supreme, Ultimate, Economy?
• What rate of ROI (return on investment) do you envision for your venture in year one and thereafter?
• Do you want to increase business by a set percentage or increase public awareness of your facility and the services offered?
• Do you need to increase the numbers of employees, full- and/or part-time?
• Do you want to be price-competitive or build value-added pricing security?
• How much capital do you have available to achieve your goals? Are you
willing to spend it all and how rapidly?

4. How good is your time frame?

• Just as you need to pay off a bank loan within a realistic time horizon, you need to decide how many months or years you need to achieve your business goal(s).
• What responsibilities will you need to assume to reach those goals within the anticipated deadlines?
• Decide what measures of achievement you'll use to verify the accomplishment of goals, i.e., Statement of Net Worth,Income, Payroll, including yourself. Remember Aristotle's advice to pay yourself first - assuming it doesn't force you out of business. If it does, there was something dramatically wrong with your plan.

The sample plan need not be an exhaustive exercise. A simple overview will suffice:

• Define and describe your business in as clear detail as you can;
• Set your business goals by describing the type of plan you need and set its time horizon at no more than three to five years. Provide both qualitative and quantitative projections while identifying business goals over that time schedule;
• Describe your strategies for accomplishing your goals - how much time, effort, and assets you will expend or allocate to each task or action necessary to achieve those goals;
• Remember your personal goals;
• Create your ideal or optimum organization and note to which level or stage it refers;
• Know and understand your competition, i.e., others in same business and the driveway washer. Highlight and expound on your advantages over each of them;
• Develop your marketing and advertising strategies by defining your target customer bases while defining your specialties and uniqueness.

Now that you have an idea or two about what to do, you may as well be aware of what not to do so that you may avoid the mistakes commonly made in planning.

Do you want a "perfect" plan? Of course not, just one that works and is capable of being changed as needed. Will you wait for the "right" time? Postponing the business or the plan is similar to getting into the right thing at the wrong time, e.g., tech stocks in March of 2000. Don't forget to do good research -- something more than adequate. Take a non-hectic weekend and draft a good plan.

It is important that you not do it alone. (See the Internet sites listed below. They represent a good start in finding help with your plan.) If you have associates in your business venture, make it a collaborative effort by sharing ideas and contributions. That way, the understanding of what you are all attempting to accomplish is cross-fertilized with a mutual sense of participation and reward.

Identify associations and other organizations (local, regional, and national) to join; discover publications (not only those that cover your specific industry, but also those that cover allied industries
and even general business issues) to subscribe to that'll help you build and grow your business.

For assistance and guidance, you may want to visit, at your own risk, the following sites:

This Small Business Administration site offers business plan outlines and a self-paced tutorial.

Here you will find sample business plans and business plan software. You can also enter the Business Plan Competition 2002.

Check out the virtual business plan at this unique and free online resource.

Contact the trade associations for advice and counsel in finding very specific business plans for the car wash industry. If you are attending the Automotive Oil Change Association's Convention and Fast Lube Expo in Reno, NV or The International Carwash Association's Car Care World Expo in Chicago, you have several professional sources available to you, both in the educational sessions and on the tradeshow floor.

Neither Jack Lewis Ludwig, CFP, nor Nathan and Lewis Securities, is a professional tax advisor. We also assume no responsibility for the accuracy or reliability of any material you may use or discover on any of the herein-referenced web sites.

Jack Lewis Ludwig, CFP, is a registered representative with Nathan & Lewis Securities. Call (484) 919-4229, e-mail, or write to Jack at 422 Dorothy Drive, Suite 200, King of Prussia, PA 19406 to discuss your own business or investment plans. You can still get free assistance via the Internet; some ideas made available at no charge or obligation.

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