Sport Business Planning – From Strategy to Implementation A framework for sport participation planning Introduction This document provides a summary of the business plan and implementation development framework utilised by six Australian National Sporting Organisation’s participating in the Australian Sports Commission’s Targeted Sports Participation Program (TSPGP). It builds on the joint presentation by Australian Swimming and SportBusiness Solutions at the ASC’s – Our Sporting Future conference. While the TSPGP provided a unique sport development opportunity, the business planning framework principles outlined in this paper are generally suitable for application by any business or sporting organisation. Our experience with sporting organisations has shown us that the business planning process is often an intimidating exercise for many sports professionals. For this reason the planning process is often set aside or rarely referred to once a plan has been developed. If the process or the business plan itself is too complex and not understood by all levels of the organisation, then it probably won’t work. This is especially true within sport where successful implementation relies so heavily on stakeholder support at many levels. Our philosophy is to blend business principles with the reality of the sporting environment in which a sport, club, facility or association operate within. By using this framework and applying practical knowledge of your sport or business, you will be able to develop and implement a business plan that works for your organisation. The Business Planning Framework – Five Steps to Guide the Process n Situation Analysis Before any planning can commence it is imperative that the current situation of the organisation is assessed to identify the various strengths, weaknesses, opportunities and threats (SWOT Analysis) that exist within the internal and external environment. The objective is to develop and document an understanding of where the organisation is currently at, and to define the market challenges and opportunities that are present and possible that will affect the range of available options to pursue. At this stage key tasks will include: • Appointment of a project leader to manage the business planning process. This may include leading a team or working group who will assist at various stages of the development process. The working group will spearhead the planning process – the group will not be responsible for doing all the work, rather they will be responsible for ensuring the work gets done. The Working Group should be: - limited to no more than 5-7 individuals a combination of visionaries (those who can see what the organisation can be) and actionaries (those who ask what the current organisational resources will support and ensure that the projected goals and tasks are realistic) a group of individuals who has formal and informal power and respect of the rest of the organisation • Review of existing information (secondary data) that the organisation has about itself or information that impacts the plan. This may include the organisation’s strategic plan, market research and trend reports, statistical reports, internal reviews etc. If this information is not readily available, it is highly recommended that research be undertaken before proceeding with the business plan – anecdotal evidence is often helpful (and sometimes very accurate), however it is prudent to conduct formal research at this stage if you want a reliable assessment of your current position. • Undertake a SWOT Analysis that identifies the critical issues, opportunities and threats • Document and report an assessment of the organisation’s current position to the Working Group. Bridging the gap between sport and business www.sportbusiness.com.au Concept Development o The situation analysis will provide insight into the organisation’s internal resources (both tangible and intangible) and capabilities. When developing a product or service, such as a new or repositioned sport participation program it is important to determine an organisation’s capabilities so that a plan can be developed around an organisation’s ability to deliver. Capabilities should be analysed against specific criteria to determine those that are core competencies and can be used as the foundation of sustainable competitive advantage. Core competencies will drive the strategic focus of the Business Plan, and assist the organisation in determining which concepts/initiatives are most appropriately matched to the organisation’s key strengths. Actions at this stage will include: • Determining the key goals/objectives of the program/initiative (these may change later). It is also important to define implied strategies of the organisation as quite often strategies and their rationale are not clearly understood by those inside and/or outside of the organisation. • Identify and define targeted segments of the market. These segments of the market may be quite broad to begin with and it is a healthy process to consider a wide range of potential markets at the outset. However, these target markets should be assessed against criteria relevant to the organisation. The figure below demonstrates the two steps of market segmentation and suggests some key criteria for effective segmentation and selection of target markets. This process generally allows the organisation to identify and prioritise the targeted audience. In the instance of sport participation, these selected targeted segments represent the ‘opportunity’ and at the same time typically identify a ‘service gap’ that the organisation aspires to deliver to. Market Segmentation Analysis: Two Steps Eight Criteria for Effective Segmentation The target markets must be:: Step 1 SEGMENTING the Market Dividing the overall market into subgroups (“market segments”) using one or more factors. Step 2 SELECTING Target Markets Selecting those market segments (“target markets”) that the organization is best able to serve and appeal to. g Measurable g Substantial g Accessible g Defensible g Durable g Competitive g Homogeneous g Compatible • Once the targeted segment(s) is identified, you can start formulating concepts/strategies that are designed to service this audience. This is best achieved within the working group and possibly extending to include those involved in the service delivery and the consumer themselves. • The concept/strategy formulation process for the product/service entails: • • • • • examining the critical issues determining how strengths and skills can be directed to address the critical issues analyzing opportunities and strengths and looking for ways to synthesize the two exploring and ultimately choosing the best approaches for the organisation Develop a short concept paper at this time, which summarises Stages 1 and 2 and describes the key concepts/strategies that have been developed and the market segmentation process. This should be circulated to a reference group for feedback. It is absolutely critical to conduct this activity as it creates a level of ownership of the plan by the key stakeholders. Bridging the gap between sport and business www.sportbusiness.com.au p Strategy Development and Business Modeling This stage concentrates on developing the strategic focus and financial and non-financial goals of the selected concept(s) emerging from Stage Two. The strategy and its objectives are subjected to financial and qualitative rigor to determine the viability and sustainability of the Business Model and its ability to convert these goals into tangible outcomes. It also focuses on identifying risks and establishing contingencies to mitigate the level of these risks. At this stage a decision will need to be made on whether to proceed with the concept and plan – this will be determined by the level of certainty by which the goals of the organisation can be met and the financial and human resource capacity that is available. • Consider the goals that were established at Stage 2 of the process. Is the Business Model still compatible with these goals? Will the product/service be able to achieve these goals? At this time you may need to adjust some of your original objectives to refine the strategy. If there is a large divide between organizational objectives and the constraints of the business model, then it is likely that the strategy is not closely enough aligned with the strategic focus of the organisation and is probably not a good fit. Nonfinancial goals in a sport participation program may include: 1) absolute growth in number of participants/clubs; 2) percentage of retention; 3) composition of participants (demographic, sex, economic); and 4) customer satisfaction levels. Make sure the goals are specific and measurable – a goal that is neither measurable nor tangible is unaccountable and generally unacceptable in a good business plan. There are some exceptions, however best to focus on goals that can be readily evaluated. • Consider how the product/service will be delivered at this stage. Create a table of key deliverables and processes and identify who will be responsible for these outcomes. Which stakeholders are part of this model? What new providers are required? Are there alliances, which we can tap into or create to assist in the delivery? • Budgets should be developed for a three to four year period that show a detailed income statement for both average and worse case scenarios. It is best to be conservative with the financial modeling, however the plan must be flexible enough to allow the business to be scaled up or down to meet demands of the marketplace. Long term sustainability of the financial model needs to be factored into these considerations. • The business case is documented and a decision to proceed is made in consultation with the Working Group and appropriate stakeholders at the conclusion of this stage. q Business Plan Development This stage involves the integration of the strategic, competitive, product, marketing, financial, and evaluative components of the Plan, into a seamless and executable blueprint for implementation. This includes the drafting of the Plan and facilitation and incorporation of feedback from the Working Group. The Plan will be fully developed at the conclusion of this stage and be ready to be converted into an actionable operational plan. A sample of the typical components and structure of a sport participation business plan has been provided on the following page. Remember: • To remain useful, the Plan must be a fluid and evolving document that is constantly refined and updated. • Determine who the intended audience of the Plan is. Is the Plan a tool to attract investment? Is it intended to be used as a strategic and operational management tool - perhaps both? In either case, keep the content practical and user friendly. The more people in your organisation that understand the plan, will use the plan. r Implementation of Business Plan Strategies The Implementation Plan guides the organisation through the executable stage of the Business Planning process and ensures that plans are translated into results. The Implementation Plan will provide a framework of actionable tasks, timelines, and assignment of responsibilities to the internal project team, and if appropriate, commercial service providers and volunteers who will partner the organisation in the delivery of the strategy/initiative. Bridging the gap between sport and business www.sportbusiness.com.au Example of Sport Participation Business Plan Contents 1.0 Table of Contents The Table of Contents provides quick access to the topics in the Plan, usually organized by section and sub-section headings. 2.0 Executive Summary Perhaps the most important element in the Plan. With a maximum of two pages, the Executive Summary ‘sells’ the document to readers through its clarity and brevity. 3.0 Organisational Profile This section provides the reader with context and highlights the recent history and recent successes of the organisation. 4.0 Strategic Focus and Plan This section sets the strategic direction for the entire organisation, a direction with which proposed actions of the Plan must be consistent. It should include the three aspects of corporate strategy that influence the Plan: (1) the mission, (2) goals, and (3) core competence/sustainable competitive advantage of the organisation. The goals section sets both the financial and non-financial targets – where possible in quantitative terms – against which performance is measured. 5.0 Situation Analysis The Situation Analysis contains several components and is a snapshot to answer the question, “Where are we now?” The SWOT Analysis identifies strengths, weaknesses, opportunities and threats to provide a solid foundation as a springboard to identify subsequent actions in the Plan. Additional analysis on industry trends, competitors, customers and the company itself should also be considered. 6.0 Product-Market Focus The chances for success of a new product or service are significantly enhanced if objectives are set for the product itself and if targeted segments are identified for it. This section should detail specific niches or target segments that the organisation seeks to service. Points of difference should also be included in this section – characteristics that make the offering unique relative to competitors. Finally, a positioning strategy should be created that helps communicate the organisation’s unique points of difference of its offering to prospective customers in a clear and simple way. 7.0 Marketing Program This section describes the four marketing mix elements of the organisation’s marketing strategy: (1) product strategy, (2) price strategy, (3) promotion strategy, and (4) distribution strategy/service delivery model. In the instance of sport participation programs, the service delivery model will demonstrate how and by whom the program is delivered to the market. 8.0 Financial Data and Projections Three year financial projections are developed based on the marketing mix decisions made in the previous section all of which have revenue and expense effects. This section should also include a roll out plan that reflects the targeted number of locations and sport participants. 9.0 Evaluation and Quality Control The essence of Evaluation and Quality Control is comparing actual achievements against the targeted goals in the Plan. Brief descriptions of contingency plans for alternative or corrective actions should also be considered in this section. Mechanisms for quality assurance should also be described. 10.0 Implementation Plan Shows how the organisation will turn plans into results. Gantt charts are often used to set deadlines and assign responsibilities to individuals and teams. Bridging the gap between sport and business www.sportbusiness.com.au