Sport Business Planning – From Strategy to Implementation Introduction

Sport Business Planning – From Strategy to Implementation
A framework for sport participation planning
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
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
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
Concept Development
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
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
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.
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.
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
Example of Sport Participation Business Plan Contents
Table of Contents
The Table of Contents provides quick access to the topics in the Plan, usually organized by section
and sub-section headings.
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.
Organisational Profile
This section provides the reader with context and highlights the recent history and recent successes
of the organisation.
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.
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
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.
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.
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.
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.
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