According to a survey by US Bank on why businesses fail, the top reasons cited are:

• 78% - Lack of a well-developed business plan, including insufficient research on the business before starting it.
• 73% - Being overly optimistic about achievable sales, money required and about what needs to be done to be successful.
• 70% - Not recognizing, or ignoring, what they don't do well and not seeking help from those who do.

Consider how much time and money is spent on financial audits, Sarbanes-Oxley compliance, legal & regulatory matters, etc. Yet, how often can those be cited as causes of failed business plans? As confirmed by the US Bank study cited above, most businesses fail because of weak plans, over-optimism, and insufficient use of external expert advice. Business plans are developed by the same people who will execute them, but are seldom challenged, audited and validated in the same manner of scrutiny that is subjected to the company's financial "books" or legal governance. The staff who develop business plans soon become so enamored with them that they often maintain this belief despite changes in markets and/or technology. Boards of Directors may lack the time and/or expertise to deeply validate business plans presented for approval.

The type of independent diligence study conducted for external investors or acquirers can add as much, if not more value, when performed for the internal executive staff and the Board of Directors. INFRASTRUCTURE Advisors' "Validator" service is essentially an in-depth independent strategic business plan and tactical execution plan audit performed for internal use. In the ideal case, it will simply validate the market, technology, customer perception, core competencies, and execution plans. In most cases, it will raise questions and make recommendations to strengthen the existing plans, substantially increasing their probability of success. The "Validator" process includes the initial in-depth appraisal which, depending on the company size, could take a number of weeks to deliver a formal report and presentation. This can then be followed on a routine annual, semi-annual, or even quarterly basis with shorter periodic "check-ups" to validate that the business plan is on track with the market dynamics.

The initial "Validator" appraisal is performed by reading available strategic and tactical business plans and conducting in-depth interviews of the client's management across all technical, operations, marketing and sales organizations. This is followed by a period of research to analyze technology, markets, competition, etc. Key customer and prospective customer interviews are conducted to gain customer perceptions of the company's products and services. The results are then analyzed and summarized in a report and presentation. The final "Validator" report will be tailored to the specific project, but typically includes sections on:

Executive summary
Markets / Sales & Marketing
Technology
Operations
Financial Plans
Summary / Conclusions
Recommendations

The "Validator" audit is executed in a very constructive and non-threatening way with the target organization. Emphasis is placed on assessing strengths and weaknesses, then developing sets of recommendations to help the company fine tune its business plans.

For further details or to invite a proposal, please email or call Ron Leckie on the numbers listed in the left column of this page.