And will do so with cash in hand:

Fred Dalton Thompson plans to enter the presidential race with a bang over the Fourth of July holiday, announcing that week that he has already raised several million dollars and is being backed by insiders from the past three Republican administrations, Thompson advisers told
The Politico.
Thompson, the “Law and Order” star and former U.S. senator from Tennessee, has been publicly coy, even as people close to him have been furiously preparing for a late entry into the wide-open contest. But the advisers said Thompson dropped all pretenses on Tuesday afternoon during a conference call with more than 100 potential donors, each of whom was urged to raise at least $50,000.
Thompson’s formal announcement is planned for Nashville. It’s tentatively set for July 5, although it could come earlier. Organizers say the red pickup truck that was a hallmark of Thompson’s first
Senate race will begin showing up in Iowa and New Hampshire as an emblem of what they consider his folksy, populist appeal.
An exploratory committee will be formed next week so Thompson can start raising money, and staffers will go on the payroll in early June, the organizers said. A policy team has been formed, but remains under wraps.

Thompson will also avoid the Iowa Straw Poll because he thinks that Romney will win and he will instead focus on Iowa State Fair going on at the same time.
Go read the rest of the story because it lays out Thompson’s strategy.
He will be setting up a “testing the waters” committee next week:

Speculation over whether Fred Thompson is serious about running for president just went toes-up. Mr. Thompson’s not-yet-a campaign has confirmed: He’s dipping his toes in.
Specifically, a Thompson adviser told The New York Sun yesterday, he will announce the formation of a presidential “testing-the-waters” committee early next week – possibly as early as Sunday.
A “testing the waters” committee is a step before the more familiar presidential exploratory committee. It allows the former Tennessee senator to raise money and hire staff. But it also prevents him from doing a number of other things: advertising his candidacy, referring to himself as a real candidate (presumably just in public, he can say whatever he likes in front of the bathroom mirror), raising money that could be transferred to another candidate, or raising money to get on the ballot.

Thompson came in third in the latest USA TODAY/Gallup Poll:

Even before launching a campaign, Thompson finished third in the latest USA TODAY/Gallup Poll, at 13% support among Republicans and Republican-leaning independents. In the survey, taken May 4-6, former New York mayor Rudy Giuliani led with 34%; Arizona Sen. John McCain was second at 20%. No other GOP candidate got above 10%.