Tuesday
Oct202009
Business Planning is Never More Essential Than Now.
Tuesday, October 20, 2009 at 11:26AM
Business planning is never more essential than now. Why? As the world changes around you, so do your customers, their needs, your industry, and your competition. From startups to establishments, mom-and-pops to franchisees - everyone has a plan. If you don't know what yours is, you’re using the "Plan of No Plan".
Can you succinctly describe your business? Some of us learned this as an "Elevator Pitch" or a "2-Minute-Drill". If you can't recite from memory and without hesitation what your company does, stop reading this and begin writing it out. If this seems too easy, you're probably too generic. It's not acceptable to say, "We do landscaping" or "We have a store down the street from you that sells specialty food". You need to pinpoint what business you're in, how you’re different from the million other "landscapers" and "specialty food" purveyors, who will buy your product, and why.
Here’s a better attempt:
Similarly if you are looking for money from a banker:
While neither of these examples is a "finished" product, the point is to be specific and be concise. Bring the listener immediately into your business and drive home the niche or need by supporting it with real numbers instead of guesses. This is your dream and mission. Don’t worry about capturing every last detail here. You’ll put more meat on these bones within the detailed sections of your full plan.
Hopefully this whets your appetite for getting started on your business. If not, take note that whatever got you here is rarely lasting and probably won’t carry you unscathed into the future. You need to stay on top of your own knowledge, customer tastes, and express this in an evolving business plan. Whether accidental-entrepreneur, franchise owner, or start-up; sales will eventually flag. As an entrepreneur you boast, “My idea was good enough when I started, why change?” Similarly, "I bought a franchise because it came with a plan. I don’t need a new one.” The reality is that once the initial demand, excitement, locational advantage, or (fill in your favorite can't-fail answer here) ends, you grasp for sales that should have been percolating as your world changed around you. One way to combat this psychological anchor is by pulling against it through continuous learning. Read some business books such as Gerber's "The E-Myth Revisited" (http://www.e-myth.com/). Attend a class or workshop related to your industry. And by all means, get out of your store, plant, or office building. The owner that stays behind the counter cannot possibly stay in touch with today's customer (another psychological anchor). Neither will they understand or have the leverage to win tomorrow's buyer. Begin cultivating for tomorrow by writing your business plan now and reading it every day. Update your numbers when you can no longer confirm them (at least once a year). Business plans, like their owners, are living breathing beings that need to adapt to their environment. Let them. The result will engage you, your investors, and most importantly – your customer.
During your trek, be diligent. Work through all parts of the plan and avoid using yesterday's numbers and assumptions (think history book). Instead write a true plan (think map of your future). Yes the process will take you a couple days at the minimum and more likely a couple weeks to complete. However, you need it! Just get started. If you don’t know where to begin, perfectly acceptable templates abound on the Internet. See SCORE (http://score.org) and similar organizations for free examples and tools (you can even call us at Kenesco http://kenesco.com - that’s what we do!) However you choose to proceed, do ALL the homework.
Burn the plan into your memory so you don’t get lost. Take it with you at all times to all places. Put it on your Blackberry. Tape a 2-page summary inside your work diary or appointment book. Keep a full copy taped to the wall in front of your desk spread out page-next-to-page so you can see the whole plan at all times. Sound stupid? How many people drive with a GPS on their dashboard and don't give it a second thought? Those things are bright. They talk. They show moving maps and audible alerts when you get off course. Where do we keep them? Right in front of our faces through the entire trip. Ask yourself, “If my appointment is worth spending $100 on a GPS so I get there on time, isn’t my business investment of thousands of dollars worth a couple pieces of paper taped up on my office wall?”
Finally as you complete your plan, build an advisory board. Even the smallest companies need support. If you fail here, your competition will take your idea and run with it. To prevent this, build your support team and make it strong. Can you name each of these people from memory and expect them to assist you in a moments notice? 1) Your Attorney, 2) Accountant, 3) Insurance Agent, 4) Banker, 5) a Mentor, 6) and 2 or 3 advisors (these are peer business owners – not necessarily from your same industry). If your contact doesn't recognize you because your too small, you do to little business with them, or you've been given only a company name without a specific representative - you don't have a contact there at all. Start over. Get a new person, or company. Or maybe the problem is you. Get out from behind you desk and make your face visible to each of them regularly. It's not your contact's fault if you call for assistance only once a year. You've turned yourself into a commodity to them; indistinguishable from the next guy. Instead, keep in monthly contact with each of these people and build their trust in your business. Treat them as stake-holders. And remember, if you can't get these individuals to help your business in its darkest hour, they're doing you no good as simple names on a piece a paper.
In summary
David Knea
CEO, Kenesco Computing LLC
http://kenesco.com
+1-877-218-1879
Can you succinctly describe your business? Some of us learned this as an "Elevator Pitch" or a "2-Minute-Drill". If you can't recite from memory and without hesitation what your company does, stop reading this and begin writing it out. If this seems too easy, you're probably too generic. It's not acceptable to say, "We do landscaping" or "We have a store down the street from you that sells specialty food". You need to pinpoint what business you're in, how you’re different from the million other "landscapers" and "specialty food" purveyors, who will buy your product, and why.
Here’s a better attempt:
“We are a local sole-proprietor of whole-grain foods and ingredients to DINKS (Double-Income-No-Kid families) aged 35 - 60 that have a combined income above $150,000 annually. In a market where 82% of these shoppers go to a brick and mortar store, we allow our customer to place an order by phone or Internet for same-day home and office delivery. OUR APPEAL: We give them the food they want and save them time within their appointment-busting calendars.”
Similarly if you are looking for money from a banker:
“We are a 3-person Illinois subchapter-S corporation providing bulk landscape materials to small residential contractors and designers within a 50-mile radius of our store. To keep up with our existing contracts for the next 12-months, we need a $54,700 loan to triple our existing storage space and delivery area. Without the money we risk losing 30% of existing customers. However with the expansion, we keep our existing customer-base and begin expanding into commercial development projects.”
While neither of these examples is a "finished" product, the point is to be specific and be concise. Bring the listener immediately into your business and drive home the niche or need by supporting it with real numbers instead of guesses. This is your dream and mission. Don’t worry about capturing every last detail here. You’ll put more meat on these bones within the detailed sections of your full plan.
Hopefully this whets your appetite for getting started on your business. If not, take note that whatever got you here is rarely lasting and probably won’t carry you unscathed into the future. You need to stay on top of your own knowledge, customer tastes, and express this in an evolving business plan. Whether accidental-entrepreneur, franchise owner, or start-up; sales will eventually flag. As an entrepreneur you boast, “My idea was good enough when I started, why change?” Similarly, "I bought a franchise because it came with a plan. I don’t need a new one.” The reality is that once the initial demand, excitement, locational advantage, or (fill in your favorite can't-fail answer here) ends, you grasp for sales that should have been percolating as your world changed around you. One way to combat this psychological anchor is by pulling against it through continuous learning. Read some business books such as Gerber's "The E-Myth Revisited" (http://www.e-myth.com/). Attend a class or workshop related to your industry. And by all means, get out of your store, plant, or office building. The owner that stays behind the counter cannot possibly stay in touch with today's customer (another psychological anchor). Neither will they understand or have the leverage to win tomorrow's buyer. Begin cultivating for tomorrow by writing your business plan now and reading it every day. Update your numbers when you can no longer confirm them (at least once a year). Business plans, like their owners, are living breathing beings that need to adapt to their environment. Let them. The result will engage you, your investors, and most importantly – your customer.
During your trek, be diligent. Work through all parts of the plan and avoid using yesterday's numbers and assumptions (think history book). Instead write a true plan (think map of your future). Yes the process will take you a couple days at the minimum and more likely a couple weeks to complete. However, you need it! Just get started. If you don’t know where to begin, perfectly acceptable templates abound on the Internet. See SCORE (http://score.org) and similar organizations for free examples and tools (you can even call us at Kenesco http://kenesco.com - that’s what we do!) However you choose to proceed, do ALL the homework.
Burn the plan into your memory so you don’t get lost. Take it with you at all times to all places. Put it on your Blackberry. Tape a 2-page summary inside your work diary or appointment book. Keep a full copy taped to the wall in front of your desk spread out page-next-to-page so you can see the whole plan at all times. Sound stupid? How many people drive with a GPS on their dashboard and don't give it a second thought? Those things are bright. They talk. They show moving maps and audible alerts when you get off course. Where do we keep them? Right in front of our faces through the entire trip. Ask yourself, “If my appointment is worth spending $100 on a GPS so I get there on time, isn’t my business investment of thousands of dollars worth a couple pieces of paper taped up on my office wall?”
Finally as you complete your plan, build an advisory board. Even the smallest companies need support. If you fail here, your competition will take your idea and run with it. To prevent this, build your support team and make it strong. Can you name each of these people from memory and expect them to assist you in a moments notice? 1) Your Attorney, 2) Accountant, 3) Insurance Agent, 4) Banker, 5) a Mentor, 6) and 2 or 3 advisors (these are peer business owners – not necessarily from your same industry). If your contact doesn't recognize you because your too small, you do to little business with them, or you've been given only a company name without a specific representative - you don't have a contact there at all. Start over. Get a new person, or company. Or maybe the problem is you. Get out from behind you desk and make your face visible to each of them regularly. It's not your contact's fault if you call for assistance only once a year. You've turned yourself into a commodity to them; indistinguishable from the next guy. Instead, keep in monthly contact with each of these people and build their trust in your business. Treat them as stake-holders. And remember, if you can't get these individuals to help your business in its darkest hour, they're doing you no good as simple names on a piece a paper.
In summary
- Know what business you’re in and be able to describe it consistently in a specific yet concise pitch.
- Improve your business knowledge constantly through reading, networking, and industry associations.
- If you have an old plan, dust it off as a starting point only. Don’t rely on old numbers.
- If you’re new to the planning game, use a template. Try the Internet.
- Skipping parts of the plan is like trying to put out a fire with a bucket full of holes. Do ALL the homework.
- Improve your business focus daily by skimming the business plan to see the big picture.
- Update ALL numbers at least once a year.
- Collect strong relationships with a key team of people to help you weather the storm (and celebrate the accomplishments).
David Knea
CEO, Kenesco Computing LLC
http://kenesco.com
+1-877-218-1879
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