The Draft Investment Club Strategic Plan/Investment Club Manual

(extracted from Making Money Together - Ojijo's Investments Club Manual)

€ What is a Strategic Plan

A strategic plan is a list of activities to be performed in order to achieve certain targets, or goals.

An investment club strategic plan is hence a written plan that indicates where the investment club is today, and where it wants to be in a future time, listing the various steps that have to be taken to achieve the milestones.

According to Kotler, a leading strategist and leader,

‘in the strategic formulation, goals indicate what a business unit wants to achieve, and strategy is a game plan for getting there. Every business must tailor a strategy for achieving its goal.’

The strategy is the ‘what’ activity to be done; how, where, when and to whom.

“the devil is in the details, so is failure and successes.”

-Ojijo

Without a strategic framework I do not know where my going or why my going there. So, then, it does not really matter how I get there!

Strategic planning gives I clarity about what I actually want to achieve and how to go about achieving it, rather than a plan of action for day-to-day operations.

The activities are based on the vision, the final picture of what the organization wants to realize; the activities are based on the final destination of where we want to be within a given time; the activities are it is based on the medium term and short term goals to reach that final destination. The final destination is the dream. But I need strategy to reach my dream.

Strategy is king

Indeed, in the words of the Great philosopher, General and military strategist Sun Tzu,

‘Action without strategy is simply the noise before defeat.’

The strategic plan is compass direction. It answers the great question of Peter F. Drucker,

‘What is our business - and what should it be?’ Strategic planning is setting the direction for my organization in a way that helps me

identify and take advantage of emerging opportunities. Strategic planning is about three variables, RESULTS=ACTIVITIES=RESOURCES. The process of planning typically involves working iteratively through multiple

steps. I will commonly start by identifying results I want to achieve, and work backwards to identify the activities I will need to produce the results. Then, I will need to identify the resources I will need to carry out the activities. At the same time, the planning process generates substantial new knowledge as I proceed, that will cause me to rethink prior conclusions. I will typically need more than one pass to find a match between results, activities, and resources.

To become a successful entrepreneur, I should know the importance of a strategic

plan, and learn to write one up. I should start with a strategic plan. The strategic plan is the document that states what the business is, what it will do,

how it will do it, and the value that it will give to the clients, and to myself as the business owner. Further, once the need to raise finance has been identified, it is necessary to prepare a strategic plan. If I intend to turn around a business or start a new phase of growth, a strategic plan is an important tool to articulate my ideas while convincing investors and other people to support it.

The strategic plan should also be updated regularly to assist in forward planning. The very process of researching and writing the strategic plan should help clarify

ideas and identify gaps in management information about my business, competitors and the market.

The strategic plan indicates who we are, what we want to do, to whom, how, and

when. It then indicates how we will know that we are meeting our goals.

€ Sections of Strategic Plan

There are many contents of a strategic plan, which are divided mainly into seven (7) main sections, namely,

1. Organizational Profile

2. Business Activities/Goals/Objectives

3. Situational Analysis (Feasibility Study)

4. Operational Plan

5. Performance Measurement

6. Financial Plan

7. Growth & Exit Plan

In detail, these areas cover:

1. Organizational Profile

This section is attached to the strategic plan, and shows the current status of the investment club, indicating the philosophy, people, products, partners, processes, profitability, and plans.

a) philosophy, (this includes the name, address, legal nature, and location of the investment club)

b) people, (this includes listing of board members, management, advisors, staff)

c) products (this lists the products we have in the club, which can include loans, savings, insurance, etc)

d) partners, (this lists our service providers, including utility service providers, professionals services providers, etc)

e) processes (this lists our policies and procedures in doing our activities, and includes credit policies, investment policies, recruitment policies, sales plans, marketing plans, customer care plans, and business systems of risk management)

2. Business Activities/Goals/Objectives

This section lists the activities that are to be carried our, based on the goals or objectives or targets of the organisation.

The matrix lists the objective, or goal, followed by activities, outputs, and outcomes.

The budget, or cot of activities, can be inserted at this point.

In detail, the sections include:

a) Goal or Objective: This is the ultimate, final destination being sought. Organizations have generally three to five goals, and these can cover

membership recruitment, training and capacity building; investment; sales; branding; networking; and institutional development. The identification and realization of objectives determines the relevance and effectiveness of the organisation, respectively.

b) Activities: These are the specific actions that are taken to fulfil the objective, and they can include training and capacity building; advocacy; purchasing land; research; report writing; etc. They are usually attached to costs element. Activities, and use of resources, determine the efficiency of the organisation to fulfil the resources.

c) Outputs: These are the immediate results of an activity, and they include meetings held; reports published; advocacy campaign carried out; debates; trainings; etc. They determine the effectiveness of the organisation in fulfilling its objectives.

d) Outcomes: The overall result of the activities is the long term, final, wider gain, by the various project stakeholders. This is the main objective, or main, goal, of the project. The realization of outcomes fulfils the sustainability, impact, and reach of the project.

The template for listing the objectives activities, outputs, and outcomes, is also the same template for monitoring and evaluation, with a few minor changes, and the template for Mid Term Review (MTR), annual report (AR) or End Term Review (ETR) of the project.

3. Situational Analysis (Feasibility Study)

This section list the factors that might affect the achievement of the goals, and hence, the feasibility of the project.

The analysis looks at various areas of key import to program success, and they include: Social Economic factors; Technological factors; Economic factors; Ecological/stakeholder factors; Regulatory Issues; internal factors of strengths and weaknesses of the organisation; and Competitor Factors.

The key areas for feasibility study, in summary, are:

a) Social-Economic analysis, including life standards, cultural issues, etc, that affects the operations of the organisation. High population growth, leading to increase in demand for housing, and infrastructure projects. Culture and lifestyle is changing, with preference for steel products for construction, and hence, market. Political stability will lead to ease of doing business.

b) Technological analysis, including systems of development, or delivery or product. Technological factors can lower barriers to entry, reduce minimum efficient production levels, and influence outsourcing decisions.

c) Economic analysis/ Gap Analysis/Demand Analysis/Market Analysis/Supply and Demand Analysis, which indicates the supply and demand of the products, and hence ability to sell or deliver the product. Economic factors affect the purchasing power of potential customers and the firm's cost of capital.

d) Regulatory Issues, including laws, policies, constitutional provisions, as well as regional and international obligations that might affect the organisations work. Regulatory factors include government regulations and legal issues and define both formal and informal rules under which the firm must operate.

e) Ecological Analysis/Stake Holder Analysis (all players in the industry value chain, from production, through distribution, to sales).

f) Internal Environmental Analysis/ Ojijo 4P Analysis of People, Product, Principal and Property. The internal environmental analysis looks at the competencies, structure, resources and culture within the company. The internal environment comprise factors within the control of the organization, and is analysed using the Ojijo 4P Analysis Model, which looks at the people (board, directors, management and staff); product (the quality, price, and delivery); property (fixed and moveable assets); and principal (capital finances for operations as well as machinery).

g) Competitor Analysis. An analysis of the competitors, their product types, production processes, pricing, promotion, distribution, and value proposition.

4. Operational Plan

Operational plan is the step by step process of implementing the program, and includes the methodology, or procedure, or start up of project, through implementation of strategies, delivery of product, and measuring of performance.

The areas of operational plan include:

a) Entry strategy:

b) Production plan (research & development)

c) Marketing plan (4p marketing plan, branding plan)

d) Sales plan (sales forecasts, break even analysis)

e) Customer/member retention plan (stakeholder satisfaction)

f) Business systems (risk management plan, business systems checklist)

5. Performance Measurement

The purpose of any activity is to produce results. The strategic plan has a section that lays out the plan for monitoring and evaluating the results being achieved for comparison with the intended results.

The areas of performance measurement include:

a) business performance,

b) staff performance matrix,

c) strategic plan review,

d) implementation matrix

The result of performance measurement is the:

¯ Evaluation Report,

¯ Mid Term Report (MTR),

¯ End Term Report (ETR), or an

¯ Annual Report.

6. Financial Plan

This section of the strategic plan lists the budget of the organisation, that is, the sources, and uses of funds. The budget is based on the implementation plan, and indicates the costs of achieving the said objectives. In some instances, the implementation plan is fused with the budget.

In summary, it lists the following:

a) Cost of project & means of finance (expenses forecast, sources of financing, the offer, claw back strategy/guarantees)

b) Financial Statements (Income Statement, Balance Sheet, Cash Flow Statement)

c) Financial Ratios (Liquidity, Efficiency, Profitability, Leverage/Solvency )

7. Growth & Exit Plan

This part of the plan indicates the procedure, processes and activities that will be carried out by the organisation so as to grow, or to exit the market, after realization of initial objectives.

These include:

a) Increasing Sales/Profitability/Net Cashflow: This involves increasing the money flowing into the organisation by increasing the gross revenue, or profitability, or net cashflow.

b) Investment & Expansion/Expanding To New Markets/Net Products/ Increasing Reach/Impact/Market Share: This involves increasing brand image of the company, or organization, by increasing market share, or program reach, or impact of activities. This involves expansion of the project.

c) Exiting The Program/Market/Management/Product Development. This involves either the project being stopped, or ownership changing, or the management changing.

Appendix: Business Activities/ Attainment of Objectives

OBJECTIVE ONE: To Provide A Sound Saving and Investment Program for Members

Responsibility: Finance Secretary (assisted by members of finance & investments committee)

Goal Timeline Activity /Output

Resources Needed Outcome

Item Cost

Short-Term

Goal

1-2 years

Individual

automatic savings

plan

Saving minimum

USD100 per month

per member

Diversifying

portfolio (debt,

equity, property,

funds & cash)

Professional fees for

acquiring assets

(lawyers, brokers,

advisors, insurance,

document

preparation,

registration, etc)

1% of asset value

=USD 1,000

Automatic savings

/Periodic savings

Cumulative savings

of 1 million after two

years

Diversified portfolio

of USD 1 million

after two years

Mid-Term

Goal

3-5 years

Saving minimum

USD200 per month

Diversifying

portfolio (debt,

equity, property,

funds & cash)

Professional fees for

acquiring assets

1% of asset values

=USD 2,000

Automatic savings/

Periodic savings/

Cumulative savings

of 2 million after two

years

Diversified portfolio

of USD 2 million

after two years

Long-Term

Goal

6-10years

Saving minimum

USD500 per month

Diversifying

portfolio (debt,

equity, property,

funds & cash)

Professional fees for

acquiring assets

1% of asset values

=USD 5,000

Automatic savings

/Periodic savings/

Cumulative savings

of 1 million after two

years

Diversified portfolio

of USD 5 million

after two years

OBJECTIVE TWO: To Provide Education Programs For Members for Personal Branding

Responsibility: Vice President (assisted by members of education committee)

Goal Timeline Activity /Output

Resources Needed Outcome

Item Cost

Short-Term

Goal

1-2 years

Individual reading

assignments &

presentations (book

reviews & summaries),

1 book per month

Guest speaker, market

regulators, investors,

industry players

1 speaker every 3

months

Edutainment, I movie

per month

Field visits, every I field

visit per half year

Facilitation fees

Venue, DVDs, audio-

visual equipment hire,

purchase

Transport to field,

eats, etc

50

100

Member

contributions

Enhanced reading

culture

Improved financial

literacy

Networking with

industry

professionals

Understanding of

financial

sector/industry

operations

Mid-Term

Goal

3-5 years

2 books per month

1 speaker every 2

months

2 movies per month

I field visit per quarter

Facilitation fees

Venue, DVDs, audio-

visual equipment hire,

purchase

Transport to field,

eats, etc

50*6=300

100*6=600

Member

contributions

Long-Term

Goal

6-10years

4 books per month

1 speaker per month

1 speaker per month

I movie per week

I field visit per 3

months

Facilitation fees

Venue, DVDs, audio-

visual equipment hire,

purchase

Transport to field,

eats, etc

50*12=600

100*12=1,200

Member

contributions

OBJECTIVE THREE: To Provide Networking Programs and Opportunities for Members

Responsibility: Social Secretary (assisted by members of social affairs committee)

Goal Timeline Activity /Output

Resources Needed Outcome

Item Cost

Short-Term

Goal

1-2 years

Movie outs, every 4

months

home visits/family

days, every 4

months

Adventures

(nature walks,

beach picnics,

sports), every 4

months

tickets

food & drinks

group transport,

food & drinks

Members contribute Stronger social

bonds

Networking, meeting

new people

Mid-Term

Goal

3-5 years

Movie outs, every 2

months

home visits/family

days, every 2

months

Adventures

(nature walks,

beach picnics,

sports), every 2

months

tickets

food & drinks

group transport,

food & drinks

Members contribute

Long-Term

Goal

6-10years

Movie outs, every 1

month

home visits/family

days, every 6

month

Adventures

(nature walks,

beach picnics,

sports), every 1

month

tickets

food & drinks

group transport,

food & drinks

Members contribute

2.4 OBJECTIVE FOUR: Corporate Social Responsibility (CSR)

Responsibility: Secretary (assisted by members of organizing committee)

Goal Timeline Activity /Output

Resources Needed Outcome

Item Cost

Promoting

Education

Donating school

fees to two girls

promoting education

Environmental

Protection

Planting trees Venue, meeting, food

& drinks

promoting

environmental

protection

Supporting

Orphans &

Widows

Visit to Kakunglu

Hospice

Venue, meeting, food

& drinks

Promoting stand of

living

2.5 OBJECTIVE FIVE: To Further Institutional Growth through Strategic Partnerships

Responsibility: Secretary (assisted by members of organizing committee)

Goal Timeline Activity /Output

Resources Needed Outcome

Item Cost

Short-Term

Goal

1-2 years

Weekly meetings

Monthly meetings

Annual AGM

meetings

Strategic

partnerships

Institutionalization

(website, legal

documents,

effective

communication

lines)

Annual

performance

review (SWOT,

STEER, BALANCED

SCORECARD)

Venue

Venue

Venue

Transport &

communication

Club registration

(legal entity)

200

500

Re-oriented strategic

plan

Re-aligned mission,

vision, goals, etc

Club is a legal entity,

institutional

Communication

channel, website,

email addresses for

members, online

presence

Mid-Term

Goal

3-5 years

Quarterly

performance

review (SWOT,

STEER, BALANCED

SCORECARD)

Venue, meeting, food

& drinks

Re-oriented strategic

plan

Re-aligned mission,

vision, goals, etc

Long-Term

Goal

6-10years

Quarterly

performance

review (4P,

STEER)

Venue, meeting, food

& drinks

Re-oriented strategic

plan

Re-aligned mission,

vision, goals, etc.

…………………….

The Author, Ojijo, is a public speaker and consultant in financial literacy, collective investment schemes (investment clubs and saccos), and business financial projections; lawyer and guest

lecturer in financial services law, law firm management, and ICT law; author of 36 books; Rotarian, Inua Kijana Fellow; Poet Pianist; and owner, www.luopedia.com, www.lawpronto.com, www.allpublicspeakers.com, www.ajuoga.com, www.bankitgroup.com, www.parara.org, and www.achibela.com.

Email: ojijo@allpublicspeakers.com Mobile:+256776100059