Session VB-1 = Business Plan Methods Philip L. Carpentier Carpentierp@asme

1. Session VB-1 = Business Plan Methods Philip L. Carpentier Carpentierp@asme.org

2. Background: A business plan is a document. It is a tool with three basic purposes: management, planning, and communication. The business plan helps you decide what you will do and then track, monitor, and evaluate your progress. Session Objectives: Review the essential elements of a good business plan. Learn how to use business planning for improved Section or Division or Affinity Group management and operations. Establish a process that you can use to write a good business plan and keep it up-to-date. Business Plans for ASME Sections and Divisions

3. ASME - Business Plans • Why? • Builds common understanding between you and your volunteer leadership team. • Helps you to communicate effectively with volunteer leaders, members and prospective members, and get them excited about the products and services that you are offering. • Fosters continuous improvement. • Allows your Unit to decide on the top priorities and stay focused on those priorities. • Once done, having a business plan for ‘your Unit’ reduces the complexity of ‘your job’ in ASME.

4. ASME - Business Plans • Goal • It is highly recommended that each ASME Unit have a Business Plan. • Each ASME Unit should have a process in place to keep the Business Plan up-to-date.

5. Essentials of a Business Plan Every business plan should include these parts: • Part 1: Executive Summary • Part 2: Market Analysis • Part 3: Section / Division / Affinity Group Organization and Management • Part 4: Marketing • Part 5: Services and Products • Part 6: Finances • Appendices

6. Part 1. Executive Summary • Mission Statement • Background information (readily available from asme.org) • Date that the Section or Division or Affinity Group began, or was chartered • Number of Members • Brief description of ASME • Also, include listing of local Subsections, Groups, Student Sections, and Technical Chapters, if any • Non-profit 501(C)(3) organization status • Summary of accomplishments from the past year • Summary of future plans

7. Part 1. Executive Summary • For SECTIONS, also include: • Section location and boundaries • Also, include listing of local Subsections, Groups, Student Sections, and Technical Chapters, if any • Listing of local industries that are engineering employers • For DIVISIONS, also include: • Listing of Technical Group affiliation, and other ASME Technical Divisions in the Group • Listing of key annual events such as Technical Conferences sponsored or co-sponsored by the Division • Listing of ASME Technical Journals sponsored or supported by the Division • Listing of Technical Chapters, if any

8. Part 2. Market Analysis • Identify your “Target Market” or Customers • Members • Student Members • Prospective Members • Other Engineers • Government officials • Employers of Engineers • Others? (K-12, High School Science Teachers, local Universities, etc.) • Don’t try to be everything to everybody!

9. Part 2. Market Analysis (Cont’d) Characteristics of the ‘Target Market’ • Critical needs of potential customers. • Degree to which those needs are (or are not) currently being met. • Demographics of the group. • Identification of major decision makers among your potential customers (Company owners, CEO’s, Vice Presidents, etc.) • Size of the potential market for products and services. • Opportunities for membership growth. • The extent to which you think you can reach your Target Market.

10. Part 2. Market Analysis (Cont’d) • Do you need help finding information about your target market? • What ASME resources might be available to help? • Analysis • What are the current “hot topics”? • What skills are needed? What do industry leaders wish their employees would know how to do? • What have you been doing in the local ASME Section or Division? What has worked well? • What is your competition doing? Results?

11. Part 2. Market Analysis (Cont’d) • Lead Times • How quickly does your Section or Division respond to requests from Members, prospective Members, and/or Industry Leaders? • What should the lead time be? • What will the lead time be?

12. Part 2. Market Analysis (Cont’d) Primary factors that will make your ASME Unit a success: • Superior ability to satisfy customer needs. • Products and services that enchant the members and prospective members. • Efficient and convenient methods of delivering products and services. • Excellent communications. • A good track record and reputation. • Good location. • The People! The volunteer leadership that you are able to attract and retain.

13. Part 3. Organization & Management • Section / Division / Affinity Group Officers, plus: • Advisors, Committees, Committee Chairs, Committee Members, etc. • With well-defined roles and responsibilities. • Focused on delivering on the business plan. • Supported by ASME District, Group, and K&C Leadership.

14. Part 3. Organization & Management • Let everyone know about these great people! • Provide brief biographical sketches or résumés on your key volunteer leadership. • Take full advantage of the ‘unpaid advisory board’. • A list of well-known, successful business owners / managers will enhance your Unit’s credibility and perception of expertise.

15. Part 3. Organization & Management ASME IPTI (International Petroleum Technology Institute) – Board - 2010 - 2011 Chair • Ken Bayne, Murphy Exploration & Production Co., Houston, Texas Email: kbayne@kosmosenergy.com VP Institutes • Bobby Grimes, Hughes Christensen, The Woodlands, Texas Email: bobby.grimes@hugheschris.com Board Members • Denby Morrison, Shell E&P Projects, Houston, TX • Joe Paviglianiti, National Energy Board, Calgary, Alberta, Canada • Phil Collins, KBR, Houston, Texas • Ken Bayne, Murphy Exploration & Production Co., Houston, Texas • John Halkyard, John Halkyard & Associates, Houston, Texas • Terry Lechinger, Stress Engineering Services, Inc., Houston, Texas

16. Part 4. Marketing & Sales Strategy • “Marketing” is often defined as the process of creating customers. • “Marketing strategy” can include: • Strategy for growing the Unit’s membership • Plans for delivering your products and services • Venue • Communication strategy

17. Part 4. Marketing & Sales Strategy What methods will you use to reach your target audience? • Newsletters, website, e-mails, IM • Direct contact • Direct letters • Company focal points? • Local newspapers, radio, television? • Local ASME Student Sections and Universities? • Phone calls? Phone “trees” (dividing the work up between many hands)? • Other methods?

18. Part 4. Marketing & Sales Strategy Websites can be your primary, but not your only communications tool. • Need a volunteer ‘webmaster’. • Must keep the information current, the content new. Warning: An out-of-date or unimpressive website sends an extremely powerful communications message.

19. Part 5. Services and Products • Meetings • Conferences • Training Courses • Plant Tours • Trade Shows • Science Fairs • Job Fairs • K-12 School Programs • “Webinars” • Motivational Speakers • Early Career Programs • Technical Journals • Scholarships & Grants • Campus Visits • Radio Shows • Government Outreach • Crawfish Boil • Christmas Dinner / Dance • Engineering Week • 10K Run • Honors and Awards • Interpersonal Skills • Design Contests • Student Internships Section or Division Programs and Activities:

20. Part 5. Services and Products Section or Division Programs and Activities:

21. Part 6. Finances – Revenue Sources • Proceeds from Programs and Activities, Conferences, and Events • Fund-raising events • Trade Shows • Ad Sales for Section or Division Newsletter • Direct solicitation of contributions • Corporate sponsorships • ASME Development Fund Grants • Other Sources of Funds? • Funds from ASME: • Revenue sharing from ASME Congress or ASME Technical Journals • Merit-Based Funding for Sections • Funds for Section Rejuvenation or Revitalization • Earl Fisher Award Funds

22. Appendices • Bylaws and Operating Guide • Résumés of key volunteer leaders and Section advisory board members • Non-profit organization letter from IRS • Listing of Honors and Awards bestowed by the Section or Division or Affinity Group, and rules associated with the awards • Details on scholarship and grant programs offered or administered by the Unit • List of Unit-owned property or assets (e.g., projectors), and custodians for the assets

23. Review Question! What are the six essential parts of a Business Plan?

24. Essentials of a Business Plan Every Business Plan should include these parts: • Executive Summary • Market Analysis • Section Organization and Management • Marketing • Services and Products • Finances Appendices

25. Business Planning Process • Write the business plan. • Critically review the business plan • Identify opportunities to improve the plan. • Remove internal weaknesses or flaws in the plan. • Test the plan against ASME Mission, Vision, and Balanced Scorecard, K&C Strategic Priorities, as well as Section / Division Bylaws • Obtain ‘buy in’ of key volunteer leaders and stakeholders. • Will the Section / Division be successful? Will people have fun doing this? • Issue the plan.

26. Business Planning Process (Continued) • Operate under the plan. • Measure successes and identify opportunities for improvement. • How do you measure success? • What are your metrics? • Revise the business plan. (Annual updates are a minimum!) • Return to step 2 and continue.

27. Business Planning Process (Continued)

28. Business Plan Methods for ASME Units Summary • Reviewed the essential elements of a good business plan. • Learned how to use business planning for improved management and operations of Sections or Divisions or Affinity Groups. • Established a process that can be used to write a good business plan and keep it ‘evergreen’ (that is, ensure periodic review and updates to the plan).

29. For more information . . . • “Creating a Business Plan” • Harvard Business School Press, Pocket Mentor (Paperback - Nov 19, 2007). • “Business Plans For Dummies” • by Paul Tiffany and Steven D. Peterson, PhD (Paperback - Dec 31, 2004).

30. Business Plan Methods for ASME Units • Questions? • Comments? • Examples to Share?

31. Business Plan Methods