The Entrepreneur & Business Owner's Resource

If you want to succeed at starting and sustaining your dream, a small business, then you need to create a business plan.  If you don’t create a business plan to guide you on the journey of entrepreneurship, small business ownership or self-employment, your chances for success are drastically reduced.  If you need financing for your small business and try to attract it without a business plan you won’t get far.
 
A business plan is like a GPS for your business, for a certain period of time, usually three-five years.  But, like a good road trip, creating a business plan and launching and sustaining a small business is full of challenges and potential detours.  And, like the GPS, if you put in the wrong current location and final destination information, you won’t end up where you want to go. Just like you input accurate data into a GPS to get your desired result, you need to research, analyze and input a lot of accurate data into your business plan.  And therein lies the REAL benefit of developing a business plan, you will become a subject matter expert about what you are going to do and how you are going to do it!  The business planning process is a framework that will enable you to make solid, thoughtful decisions about the small business you want to launch, operate and sustain.  Like any good road trip it’s the journey not the destination.  When writing a business plan, its the process not the plan itself that will prove to be invaluable!  If you want to manifest your dream and start a small business, then you have to take the time to immerse yourself into creating a viable, realistic, useful business plan.  Once you go through the experience, learn the framework, and develop a business plan, you will be well-prepared for the next phase of your journey, owning and operating a sustainable small business.

One mistake prevalent among many entrepreneurs is that they know they have to market their business but they don’t know where to start, don’t know how or don’t know how to put one foot in front of the other. Because of this they don’t market at all.

Entrepreneurs are good as their primary business function: the owner of the plumbing business is a great plumber; the florist is good with flowers; the consultant is good at consultant but when it comes time to market, to do accounting, to do HR, entrepreneurs shy away from the support functions. Its not as fun and they typically don’t have the training.

One challenging question for all entrepreneurs is, “Does everyone that can buy from them know about them?” Not letting people that can buy from you know about you is a big mistake. If they don’t know about you they wont come or buy. Wishing is not a strategy. Building it and they will come is not a viable entrepreneurial business strategy. Not incorporating the proper marketing and sales efforts in your business is a mistake. Doing so will increase the probability that those that can buy from you will know about you.

Once they know about you, you have to keep in touch with them. It takes prospects 6-8 marketing touches to get them into purchase readiness mode. That means when and if they want your product or service, they will buy from you if they have been touched by your marketing 6-8 times.

When “touching” your prospect with your marketing make sure you are sending a consistent message. That way those that can buy from you will know about you.

Many large businesses conduct assessments or have consultants do it in an effort to benchmark best practices. The purpose of a small business assessment is the same, to determine actions needed in the business to achieve best practices in several areas.

My experience is that small business owners need to continually assess several areas of the business and compare with best practices or at least determine if the best practice is best for their business. Business subjects that I have selected are: Establish your company, personal assessment, general business, customer relations, employer-employee issues, legal issues, services offered, finances, systems, and leadership.

The following table will help create an assessment report that can be used as an action plan for monitoring improvements and view trends in these business areas. Determine the goal or target that you would like to achieve by rating ( 1 to 5)  the best practice as necessary, rated five, or not important to your business, a one rating. Next determine your status for the particular issue, a five rating shows that you have accomplished the best practice or a one rating show that you are not close to achieving the best practice. Compare these two numbers to determine where to concentrate effort to create a company with best practices in place. This first table shows the first two business areas to be assessed.

Future blogs will show additional business areas and provide a means to evaluate the company and develop action plans to accomplish a best-of-class company. This provides a means for concentration on business issues that are important, this discipline will allow the company to achieve its goals with efficiency of time spent.

Business Assessment for Small Business (Establish Yourself and Personal)
Assess goal from 1 to 5.  Assess actual from 1 to 5.  One is lowest rating and 5 highest in both cases.

Every good small business owner is looking for ways to move their business forward.  There are some concrete things that you can do now that will improve your situation and position your company to thrive as the economy turns around.

1. Improve your cash flow situation. The main things that drive cash flow are Accounts Receivable, Accounts Payable, and Inventory.  Make sure your Accounts Receivable terms match your Accounts Payable payment timetable.  Be sure send your invoices out on time and stay on top of collecting your Accounts Receivable.  Review your inventory to insure that you are restocking with the items that are moving well.  Clear out the slow moving items with a good sale.

2.  Analyze your operations for efficiency. Review job descriptions (or write them if you do not currently have any). Make a flow chart of your process to see what tasks are being done by whom. Follow a process from beginning to end to verify that it is being completed in the simplest way by the fewest people while still having enough separation of duties to protect your business from theft or embezzlement. Streamline. Cross-train your employees so that you can move personnel around, reduce overtime, and protect your business from employee absences.

3. Revisit your business plan. Make sure that you understand your market in today’s economic environment. What are people buying right now? How are people spending now? Is your market growing or shrinking? Where do you fit in to your total market? What is your niche or competitive edge? Is it still a competitive edge? Who is your competition? How are they doing in today’s environment? Who are your target customers? With cash at a premium, it is vitally important that your marketing efforts reach your target customers.

4. Start using your financial information to manage your business instead of just saving the data for your tax preparer’s use at the end of the year. Keep up with your bookkeeping daily. Understand what concrete data you need to help you make your business decisions. Get help now to set up your system to be able to pull out that information quickly and efficiently. Have solid numbers at your fingertips. If you do not know how to read and use your financial reports, hire someone to teach you.

5. Look to the future.  What are the trends in your industry?  Read, read, read!  Don’t keep the same thing hoping for a different result.  Plan for the future.  Be a trendsetter, keep evolving.  Life is constant motion and those who go with the flow not only survive, they thrive.

Another mistake prevalent among many entrepreneurs is that they don’t put together a marketing plan. When is a good time to put together a marketing plan? There are two answers. One is when you started your business and the other is now. Regardless of when you started, if you don’t have a marketing plan, create one now.

A marketing plan is a working document to guide you and your marketing efforts throughout the planning year. It doesn’t have to be fancy or elaborate. You can put together a marketing plan in seven sentences by answering the respective questions:

Sentence 1 – What is the purpose of your marketing? What action do you want customers and prospects to do as a result of your marketing?

Sentence 2 – Who is your target market? (“Everybody” is not a target market).

Sentence 3 – What is your niche? How have you taken your target market and made it tighter and narrower?

Sentence 4 – What are the benefits and competitive advantage of your products and services?

Sentence 5 – What is you r identity. Notice I didn’t say image. Image is something you’re not. What do you want customers and prospects to think of when they hear about you or see your log, color, tagline, etc.?

Sentence 6 – this is probably a list not a sentence. What are the marketing initiatives you are going to employ during the planning year? What is the related marketing activity?

Sentence 7 – How much money are you going to spend on marketing? This is your marketing budget. Once established, stick to it like breathing and like paying the light bill. Not cut marketing in tough times as an expense. It is an investment that you will get a return on. 

That’s it. You can do it on the back of an envelope, on the computer or handwritten. Just do it and use it as a working guide throughout the planning year.