GENERAL MANAGEMENT
CHECK POINT 12: BUSINESS PLAN
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DO I NEED TO KNOW THIS CHECK POINT?
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GENERAL MANAGEMENT
CHECK POINT 12: BUSINESS PLAN
Please Select Any Topic In Check Point 12 Below And Click. |
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DO I NEED TO KNOW THIS CHECK POINT?
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WELCOME TO CHECK POINT 12 |
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HOW CAN YOU BENEFIT FROM CHECK POINT 12? |
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The main purpose of this check point is to provide you and your management team with detailed information about a Business Plan and how to apply this information to maximize your company's performance. |
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In this check point you will learn: |
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• What is a business plan?
• About strategic planning questions.
• About management-by-objectives questions.
• About operational planning questions.
• About various elements of a business plan.
• How to formulate a business plan.
• About four basic strategic options.
• About four supporting plans.
• About five operational plans of action.
• About operating and financial budgets... and much more. |
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LEAN MANAGEMENT GUIDELINES FOR CHECK POINT 12 |
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You and your management team should become familiar with the basic Lean Management principles, guidelines, and tools provided in this program and apply them appropriately to the content of this check point. |
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You and your team should adhere to basic lean management guidelines on a continuous basis: |
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Treat your customers as the most important part of your business. |
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Provide your customers with the best possible value of products and services. |
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Meet your customers' requirements with a positive energy on a timely basis. |
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Provide your customers with consistent and reliable after-sales service. |
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Treat your customers, employees, suppliers, and business associates with genuine respect. |
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Identify your company's operational weaknesses, non-value-added activities, and waste. |
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Implement the process of continuous improvements on organization-wide basis. |
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Eliminate or minimize your company's non-value-added activities and waste. |
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Streamline your company's operational processes and maximize overall flow efficiency. |
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Reduce your company's operational costs in all areas of business activities. |
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Maximize the quality at the source of all operational processes and activities. |
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Ensure regular evaluation of your employees' performance and required level of knowledge.
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Implement fair compensation of your employees based on their overall performance.
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Motivate your partners and employees to adhere to high ethical standards of behavior. |
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Maximize safety for your customers, employees, suppliers, and business associates. |
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Provide opportunities for a continuous professional growth of partners and employees. |
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Pay attention to "how" positive results are achieved and constantly try to improve them. |
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Cultivate long-term relationships with your customers, suppliers, employees, and business associates. |
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1. WHAT IS A BUSINESS PLAN? |
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A BUSINESS PLAN |
The ultimate objective of every business owner is to summarize strategic and operational planning activities and to develop a comprehensive business plan to ensure effective functioning of the organization in the future.
A Business Plan represents a critical management document which can be used for internal and external business purposes as follows:
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• Internal Business Purpose.
Business plans are used for internal purposes of providing business owners and managers with comprehensive guidelines for running their organization. |
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• External Business Purposes.
Business plans are used for external purposes of providing banks and other lending institutions with essential information about a specific organization for the purpose of raising additional capital. |
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Business plans should be developed and reviewed on an annual basis by consolidating relevant answers to three types of questions illustrated below. Once the annual business plan is prepared, it should become the main "Road Map" for the entire management team. It is important, however, to avoid "etching this plan in stone", i.e. the business plan must remain flexible and subject to adjustments whenever necessary during the fiscal year to maximize organizational performance.
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QUESTIONS RELATED TO A BUSINESS PLAN DEVELOPMENT PROCESS |
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Strategic
Planning
Questions |
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Management-
By-Objectives
Questions |
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Operational
Planning
Questions |
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ARE YOU A ONE-PERSON BUSINESS OWNER? |
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If you are a One-Person Business Owner, or a "Solopreneur", you may adopt a less formal approach, but you are still required to implement all basic elements of the Business Plan discussed in this check point.
Moreover, it will be very beneficial for you to become familiar with the content of the entire check point, because one day you may decide to take your business to the next level and employ additional employees within your organization. That's when you will develop full appreciation for a comprehensive business plan. |
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ADDITIONAL INFORMATION ONLINE |
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2. STRATEGIC PLANNING QUESTIONS |
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Typical Strategic Planning Questions are summarized below. |
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STRATEGIC PLANNING QUESTIONS |
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What are our company's mission and values? |
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What are our company's long-term, medium-term, and short-term goals and objectives? |
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What is happening around our company in the marketplace? |
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What are our company's strengths and weaknesses? |
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What are our company's opportunities and threats in the marketplace? |
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Do we want to become a lean company? |
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What is our company's strategy? |
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What are our company's tactics, policies, procedures, and rules? |
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What is our company's operational plan? |
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What is company's financial plan? |
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ADDITIONAL INFORMATION ONLINE |
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3. MANAGEMENT-BY-OBJECTIVES QUESTIONS |
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Typical Management-By-Objectives Questions are summarized below. |
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MANAGEMENT-BY-OBJECTIVES QUESTIONS |
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What exactly do we want to accomplish in the area of general management? |
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What exactly do we want to accomplish in the area of human resources management? |
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What exactly do we want to accomplish in the area of financial management? |
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What exactly do we want to accomplish in the area of operations management? |
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What exactly do we want to accomplish in the area of marketing and sales management? |
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When do we want to accomplish the above? |
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Who must be responsible for accomplishing the above? |
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ADDITIONAL INFORMATION ONLINE |
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4. OPERATIONAL PLANNING QUESTIONS |
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Typical Operational Planning Questions are summarized below. |
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OPERATIONAL PLANNING QUESTIONS |
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How are we going to accomplish our objectives in the area of general management? |
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How are we going to accomplish our objectives in the area of human resources management? |
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How are we going to accomplish our objectives in the area of financial management? |
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How are we going to accomplish our objectives in the area of operations management? |
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How are we going to accomplish our objectives in the area of marketing and sales management? |
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ADDITIONAL INFORMATION ONLINE |
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5. ELEMENTS OF THE BUSINESS PLAN |
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WHERE SHOULD YOU START WITH YOUR BUSINESS PLAN? |
The Business Plan may include a broad range of issues, depending upon the size and specific needs of the organization.
You and your management team must ensure that all basic elements pertinent to strategic planning, management by objectives, and operational planning are included in your company's business plan as outlined below. |
ELEMENTS OF THE BUSINESS PLAN |
1. The Company's Values And Mission.
2. The Company's Strategic Objectives.
3. The Company's Situational Analysis.
4. The Company's Opportunities And Threats In The Marketplace.
5. The Company's Strategic Plan.
6. The Company's Supporting Plans.
7. The Company's Operational Plan Of Action.
8. The Company's Budgets. |
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Each element of the business plan is described below. |
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THE IMPORTANCE OF THE MISSION STATEMENT |
The first part of a business plan entails completing a Company's Values And Mission Statement discussed in detail in this tutorial. This includes:
• A short mission statement which summarizes the essence of the company's purpose.
• A brief summary of the company's values supported by the management team.
Many small business owners and entrepreneurs underestimate the importance of the company's values and mission statement. However, this is exactly where you should start your business plan if you really want to have a meaningful plan.
An example of a strong company's values and mission statement was produced by Apple Computer, Inc. a few years ago. This statement provided excellent guidelines to the company's management team in creating one of the most admired business organizations in the world today. The example of this statement is illustrated below. |
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ADDITIONAL INFORMATION ONLINE |
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6. BUSINESS EXAMPLE
APPLE'S VALUES AND MISSION STATEMENT |
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APPLE'S VALUES AND MISSION STATEMENT
• Empathy For Customers And Users.
We offer superior products that fill real needs and provide lasting value... We are genuinely interested in solving customer problems and will not compromise our ethics and integrity in the name of profit.
• Achievement Objectives.
As a corporate citizen, we wish to be an economic, intellectual, and social asset in communities where we operate. But beyond that, we expect to make this world a better place to live. We build products that extend human capability, freeing people from drudgery and helping them achieve more than they could alone.
• Positive Social Contribution.
As a corporate citizen, we wish to be an economic, intellectual, and social asset in communities where we operate.
• Individual Performance.
We expect individual commitment and performance above the standard for our industry. Only thus will we make the profits that permit us to seek our other corporate objectives.
• Quality Of Products And Services Excellence.
We care about what we do. We build into Apple products a level of quality, performance, and value that will earn the respect and loyalty of our customers.
• Individual Reward.
We recognize each person's contribution that flows from high performance. We recognize also that rewards must be psychological as well as financial, so we strive for an atmosphere where each individual can share the adventure and excitement of working at Apple.
• Good Management.
The attitudes of managers toward their people are of primary importance. Employees should be able to trust the motives and integrity of their supervisors. It is the responsibility of management to create a productive environment where Apple's values flourish.
© Apple Computers, Inc. Reprinted by permission. All rights reserved. |
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Please also study the Mission Statements Of Famous Companies presented by Nitin Agarwal. |
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7. FORMULATION OF A BUSINESS PLAN |
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SUMMARY OF A COMPANY'S OBJECTIVES |
The second part of a business plan entails preparing a Summary Of A Company's Objectives discussed in detail in this tutorial.
The classification of a company's objectives is illustrated below.
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CLASSIFICATION OF A COMPANY'S OBJECTIVES |
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Short-Term
Objectives
(up to one year) |
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Medium-Term
Objectives
(one to five years) |
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Long-Term
Objectives
(over five years) |
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The third part of a business plan entails completing a Company's Situational Analysis discussed in detail in this tutorial. Two elements of a company's situational analysis are illustrated below. |
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TWO ELEMENTS OF A COMPANY'S SITUATIONAL ANALYSIS |
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Environmental Analysis |
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Lean Business Analysis |
Environmental analysis summarizes the influence of all elements of external environment, customers, suppliers, competitors, banks, and government agencies on the company's performance. |
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Lean business analysis includes the results of:
- • Lean operational management analysis.
- • Financial performance analysis.
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Lean Business Analysis includes two important elements discussed in detail in this tutorial and illustrated below. |
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TWO ELEMENTS OF LEAN BUSINESS ANALYSIS |
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Lean Operational Management Analysis |
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Financial Performance Analysis |
Lean operational management analysis summarizes the company's strengths and weaknesses in various operational areas, such as general administration, human resources, finance and accounting, operations, marketing and sales, and evaluates the level of adherence to traditional and lean management guidelines. |
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Financial performance analysis includes the company's current and comparative financial performance evaluation based on financial statements, i.e. balance sheet, income statement, cash flow statement, and financial ratio analysis. |
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The fourth part of a business plan entails completing a SWOT Analysis and developing a Summary Of Opportunities And Threats related to a company's activities in the marketplace. |
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SUMMARY OF OPPORTUNITIES AND THREATS |
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Opportunities |
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Threats |
All opportunities are expressed in terms of customers' needs so that the company may have a trading advantage. |
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All threats are expressed in terms of possible adverse conditions that might be created by the company's competitors in the marketplace. |
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ADOPTION OF A COMPANY'S STRATEGIC PLAN |
The fifth part of a business plan entails developing a Company's Strategic Plan described in detail in this tutorial. Management may adopt the company's strategic plan, based on one or more Strategic Options presented below. |
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THE FOUR BASIC STRATEGIC OPTIONS |
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The
Limited Growth
Strategy |
The
Expansion
Strategy
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The
Retrenchment
Strategy |
The
Combination
Strategy |
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FORMULATION OF SUPPORTING PLANS |
The sixth part of a business plan entails developing specific Supporting Plans described in detail in this tutorial. Management must formulate a range of supporting plans, depending upon the size and specific needs of the organization as illustrated below. |
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FOUR SUPPORTING PLANS |
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Short-Term
Tactics |
Revised
Policies |
Updated
Procedures |
Revised
Rules |
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SUMMARY OF THE OPERATIONAL PLAN OF ACTION |
The seventh part of a business plan entails developing a detailed Operational Plan Of Action by the management team, as described in detail in this tutorial. The prime purpose of the operational plan of action is to summarize specific company objectives in five main areas of operations illustrated below. |
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FIVE ELEMENTS OF THE OPERATIONAL PLAN OF ACTION |
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SUMMARY OF FINANCIAL PERFORMANCE PLAN |
The last element of the business plan entails preparing a Financial Performance Plan described in detail in this tutorial. This plan includes an Operational Budget, a Capital Expenditure Budget, a Cash Budget, and Tax Strategies, designed to support the company's overall strategic plan as outlined below. |
FOUR ELEMENTS OF THE FINANCIAL PERFORMANCE PLAN |
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SCORE TEMPLATE |
Are you ready to prepare your company's business plan?
At this stage you and your management team should be ready to proceed with the preparation of your company's Business Plan. One of the most practical ways to complete this task in the most time-effective manner is to use Business Planning And Financial Statement Templates developed by SCORE and available online free of charge.
All you need to do is to implement simple instructions and positive results will follow.
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ADDITIONAL INFORMATION ONLINE |
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8. YOUR BUSINESS PLAN MUST BE FLEXIBLE |
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HOW FLEXIBLE IS YOUR BUSINESS PLAN? |
Since the future holds no certainty, every business plan must remain flexible and incorporate Alternative Methods of achieving planned objectives. For this reason, you and your management team should give additional consideration to every component of your company's business plan.
The development of a realistic and flexible business plan represents the ultimate task of your management team and serves to enhance your company's chances for successful performance in the future. |
ADDITIONAL INFORMATION ONLINE |
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9. FOR SERIOUS BUSINESS OWNERS ONLY |
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ARE YOU SERIOUS ABOUT YOUR BUSINESS TODAY? |
Reprinted with permission. |
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10. THE LATEST INFORMATION ONLINE |
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LESSON FOR TODAY:
The Greatest Thing In This World Is Not So Much Where We Are, But In What Direction We Are Moving!
Oliver Wendell Holmes |
Go To The Next Open Check Point In This Promotion Program Online. |
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