Break Your Business! Then Rebuild It.

Business Strategy SphereReassessment of business strategy is a necessary annual exercise.  This is where you take everything that has happened over the past year, break it down, and analyze it.  Find out what went right, what went wrong, and what you could be doing better.

These strategy sessions are typically done in a retreat type scenario, but you can do it any way you can afford to.  Larger companies send their executives to vacation destinations so they can relax, distraction free in hopes to get the creative juices flowing.  While the better option is to get all the members away from the business and the distractions, you will have to do what works best for you and your budget.  At the very least, try to make the meeting as distraction free as possible.

The members of this strategy session should be made up of valuable team members at each level of the business.  The personnel at the bottom have very different perspectives than the personnel at the top and every perspective should be valued.  This also serves to give everyone a voice in the success of the company as a whole.  If tough cutbacks are the topic of the discussion, then it’s easier to come up with a solution that gets integrated horizontally, rather than vertically.  (Fellow employees helping in deciding the course of action and parlaying the information to the rest vs. the top down approach which can leave employees feeling less valued.) Don’t forget to include a moderator that will help to keep the group on task.

One of the best ways, I’ve heard about to come up with a great strategic plan is to “break the business.”  This is done by running through simulations on what would make it fail, then address those weak walls and establish risk mitigation plans.  Then perform a SWOT Analysis on the business as a whole and then every product or service you offer.  In a SWOT Analysis, you are assessing your strengths, weaknesses, opportunities, and threats.  After you have filled out all of the categories, line up the strengths with the opportunities and the weaknesses with the threats.  This will help to show you what you are doing well and what needs some work as well as where you have opportunity for growth and where you have potential risks.

Sometimes the root of the problem isn’t always at the surface and you need to drill down to find
what is really causing the issue.  Do this by asking “Why” about 5 times.  This will usually get you to the root of it.  Once you know what the real problem is, then you can take steps to fix it for good.

Now that you have a sizeable list to work from assess each item and put a priority to it.  Establish a ranking system and analyze what needs to be taken care of and by when.  I will usually establish two groupings that rank the list by priority and then by cost.  Then I will cross analyze this list to come up with a preferable order.  Additionally, I like to pick out the low cost, but high impact items and be sure to address them quickly.

Hopefully this posting has helped you to understand more about strategic planning and why it’s important. Get working on your strategic plan today and remember to “Stop Doing the Mundane, and Start Getting Weird!”

 

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Trade Shows: What’s the Point!

Trade-Show-word-cloudTrade shows are an integral part of your business whether you are attending or exhibiting.  If you’re not attending at all, then you are missing out on some great opportunities.

The trade show is a fantastic concept that serves many facets of business.  There are a few types of tradeshows that serve different purposes.  Some tradeshows are strictly geared toward B2B while others are B2C and everything in between.  Regardless of the type of show, benefits can typically be found for anyone.

I’ve been to a B2B tradeshow where I saw consumers attend.  I thought it strange at the time, but I understood after talking with them.  They were representatives of a large corporation that were there to learn about what’s new in the industry.  They don’t perform any of the services that the trade shows was centered on, but they were consumers of it and wanted to know industry standards to be knowledgeable on the subject for future purchases.

Tradeshows are not just a place where suppliers peddle their wares.  Trade shows offer much more than that.  Here are three main things you can gain from attending or exhibiting at a trade show:

Knowledge – Some trade shows offer instructional classes. They can talk about anything from common problems to new industry technology to marketing and managing your business.  This is a great way to learn more about the industry and even pick up some tips and tricks to use in your business.  The trainers are typically industry experts, which make them great teachers for your employees.

Aside from training, trade shows typically gather intelligence from everybody attending and exhibiting.  This helps to produce market data and research reports, which can be used in strategic planning. If you’re a member of the trade show’s association, you can usually get these reports at a reduced price.

Networking – This is your opportunity to network with competitors from across the country.  Typically, you are of no threat to them, so sharing secrets isn’t that big of a deal.  They can also become a valuable ally that you can call upon for help in dealing with situations that they may be better versed in.  For example: Let’s say you took on a new service offering, but were still very new to it.  However, this guy you met at the conference has been doing it for years and offered to help you if you had any questions.  Wouldn’t that be better than going it alone and possibly doing things wrong?

This is also an opportunity to network with potential partners.  You can lay the groundwork for strategic alliances or find a production partner that can help you cut costs.  If you’re an expert in your industry, you can offer to speak and help advance the industry.  This is also a great way to get your name out there and establish yourself as the expert with potential customers.

Purchasing and Sales – This is the main point of the trade show.  It’s your industry’s marketplace.  If your selling products or services, you can land big contracts here.  Some deals are negotiated and signed in the backrooms of these shows.  If your there as a purchaser, you can see what’s new and what can help your business be more productive or profitable.  Speaking from experience, I’ve found many great products that have helped my company differentiate itself and become more profitable.

I hope that I’ve given you enough reasons that demonstrate the importance of trade shows.  Check out allconferences.com or eventsinamerica.com to find the next trade show for your industry. Are you planning on exhibiting?  Be sure to make a trade show plan to get the best bang for your buck!

Thank you for reading and remember to “Stop Doing the Mundane, and Start Getting Weird!”

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Vacation…What Vacation?

beach-chair-wallpaper-hd-wallpapers-beach-images-beach-wallpaperSmall business owners are typically so focused on making their business succeed that they are always hard pressed for time. The notion of time off is laughable to them and mention of a vacation is downright hysterical.

We often tell ourselves that our business can’t run without us.  Sentences like “If you want it done right, you have to do it yourself” and “If I wasn’t there, the whole place would fall apart” are excuses we tell ourselves to justify not letting go. I’ve met some business owners that haven’t taken any time for themselves in years! Some as even as much as 6-7 years! I don’t know about you, but that would drive me insane!  Ask yourself why you got into business in the first place.  I’m guessing you saw a need, wanted to fill it and be your own boss doing it unshackling yourself from the bidding of others. Did you mean to trade one set of shackles for another?

The reality is, we can take a break from our business and it is actually very healthy for us and our business to do just that. Taking a break from our business allows us to re-energize and take new perspectives on ongoing issues.  If all you do is work in your little box, then you are missing what’s going on outside the box. Start with a trip to a tradeshow and make a vacation out of it by going early or staying later. Going to tradeshows in my industry and taking the courses they offer has always helped to energize my motivation to make necessary changes to better my business.

Two very important skillsets a small business owner can have are delegation and time management.  These two skillsets can help you free yourself from the DIY cycle. If you need help in either of these areas, just look for training classes online. Companies like Fred Pryor Seminars  offer full and half-day trainings in specific topics all over the USA.  These are two very common training topics and there will most likely be somebody offering training in your area.   You can also find a list of 15 responsibilities that you can start delegating today here.

Now the biggest issue with trying to free small business owners from the vicious cycle they’ve created for themselves is to change their mind.  If you or somebody you know is stuck in this rut; it often takes a crowbar to pry you/them from it. Delegation/outsourcing and time management take time to implement.  This is where people tend to refuse to help themselves. It takes time to save time. I can make all the suggestions in the world to help free up time, but it is up to the individual to actually take the time to do it in order to free themselves of the burden in the future.

Take back your vacation this year and give yourself the break you deserve.  You and your business will only be better for it!  As I always say, it’s time to “Stop Doing the Mundane, and Start Getting Weird!”

 

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Who’s got your back?

Helping-MentorGoing it alone has its ups and downs. On one hand, you get to say you’ve built this company from the ground up all by yourself. On the other hand, how many failures cut you at the knees, leaving you to re-build your would be empire?  What if that mistake could have been avoided?

I have made these mistakes in my own personal career, losing tens of thousands of dollars. Money that could have been put to better use and my company would have been stronger for it.  I made these mistakes because I was thinking in a vacuum, and have some pretty strong persuasion skills.  I would bounce these ideas off of my partners and prepared to defend them tooth and nail, wearing down any opposition until I was victorious. However, once the money was spent, it was too late.  “We”, or rather “I”, put the veritable “cart” before the “horse”.

There were multiple problems with this scenario:

  1. My partners and I were too close to the business to see the pitfalls in the idea. Everything we were going to do was going to be a monumental success.  We were blind to other factors affecting market penetration in this particular segment.
  1. Partnership dynamics can be a fragile relationship.  One partner may overlook his/her own hesitations to appease the other.  It’s a give and take relationship that has no place in business.
  1. Failure to plan. We failed to plan out how we would penetrate the market in this particular segment.  So we did things out of order.

So how do you mitigate these risks?

There is a reason why large companies have a board of directors.  They are responsible for the direction of the company and voting on key decisions. Small businesses don’t usually have a board of directors helping to guide their business.  So what are small businesses to do?

Small businesses should have a board of advisors or, at the very least, a few mentors.  These can be paid or non-paid individuals.  Helping the community is the key driver when volunteering to sit on a small business’ board of advisors.  Some small business will even pay the members of their board.  Meetings are held at different frequencies throughout the year, but they are paid only for each meeting they attend.  They don’t even have to be partners in the business. There are some great resources, like SCORE, out there to help small businesses in this area.  I wrote a post on these resources here if you’d like to learn more.

Your local Chamber of Commerce is a great place to start networking with local business owners and active community members.  Additionally, research local business networking events and start attending.  The more you open yourself up to these events and organizations, the more you will build your network and increase the likelihood of finding mentors and advisors.

Get involved in your local business community today and remember to “Stop Doing the Mundane, and Start Getting Weird!”

 

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Company Formation Mistakes

images-765176Company formation can be a really easy task and the Internet has made it even easier.  You can form a company in minutes, but should you? If you are the sole owner, then absolutely.  However, partnerships should be entered into with much more calculation.

I currently have a client, Bill, who is wanting to fire his partner, Joe.  They formed a subchapter S corporation and share equally in the company.  Their business has just started to gain traction and the Joe is not holding up his end of the bargain.  Bill wants to try to buy Joe out, but he’s not sure that Joe will sell his part of the business, since it is starting to take off.

In my discussion with Bill, we talked about his options with getting majority voting power.  He is also considering taking on a third partner to distribute the votes so that they can make the proper decisions without a stalemate scenario.  However, Bill ultimately wants Joe out of the company.  My next question to Bill was asking him if he had a corporate charter and bylaws.  Bill looked at me with questions all over his face and let out a, “No…What’s that?”

Bill’s situation became even stickier since he did not have a governing document for how the corporation and partnership will operate.  If Joe does not sell his share, then Bill has no legal right to fire him.  Joe can move into a silent partner status at his discretion, but he will still be entitled to half of the profits.  Check out this article on “How to Fire a Business Partner Who Owns 51% of the Company

When you are looking to form a company with a partner you obviously trust that partner at that point in time and typically do not feel a need for such documentation.  This is a normal feeling, but good business sense dictates that you plan for the future and mitigate potential risks.  An attorney skilled in company formation is highly recommended to draw up the partnership agreement.

Start-up businesses are usually cash poor and company formation can cost more than $1000.  If you are unable to afford this in the beginning, then you should at least find a template that you can work off of and research common partnership agreement inclusions.  While the DIY method will leave you with holes in your legal defense, it is better than not having anything.

Is this information helpful? Leave me a comment and click the follow button to be notified of new posts!

“Stop Doing the Mundane, and Start Getting Weird”

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How Do You Know If You Have A Winner

IdeaSo you came up with an idea that got you excited!  I mean REALLY excited!  Sooo excited that you go to bed thinking about it; then glance at the clock a few hours later in a panic because you have to be up early for work.  You tell your brain to shut down, but you just can’t stop thinking about it.  The euphoria of the idea has you so excited you just can’t stop.

Next you start telling your friends and family all about it.  Being the supportive people they are, they tell you it’s good and may ask some questions that help you to think about some holes in your plan.  You then start expanding the number of people you talk to, getting their feedback.  After receiving feedback from multiple sources you still feel strongly about your idea and decide you want to pursue it.

What happens next is where we start to separate the winners from the losers.  How you carry this idea forward can make the difference between a couple thousand dollars and a couple hundred thousand dollars down the drain.  Or in the entrepreneur’s mindset, learning how to fail while spending a couple hundred thousand dollars! (Sounds like an exhilarating book title!) A great piece of advice I received from a mentor was, “If you’re going to fail, then make sure you fail fast.” Failing fast can result in significant cost savings!

Two key points that The Startup Owner’s Manual  LeanStartupMethodologyteaches us is to “Get out of the building” and to focus on a “Minimum Viable Product”. Ultimately, the market will dictate how good your idea is.  “Getting out of the building” in this context means getting out there and interacting with your potential clients.  Introducing them to your product and getting feedback so you can make adjustments according to what your target market as a whole will likely want.  Using the lean startup methodology (Right) you would constantly be validating your idea to ensure its viability in the marketplace. 

The concept of the  “Minimum Viable Product” is to develop your product with the minimum feature set necessary to gain sales.  This concept helps to keep you on core tasks and not waste a lot of time and resource on additional features that may never be used.  Your target market will dictate what features you should concentrate on to garner additional market penetration.

How well you perform these activities will tell you how much of a winner your idea really is.  It will also help lead you down critical paths that will ultimately help make your start-up more successful. Check out the resources I’ve mentioned above if you’re interested in learning more about start-up mechanics.  I have read both books and can say that they were very helpful with great insights into the start-up world.

“Stop Doing the Mundane, and Start Getting Wierd!”

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Helpful Resources You Might Not Know About

ResourceshelpWe all need help sometimes and there are many great resources out there to do just that. There has been a lot of attention on small business recently and it is for good reason. The SBA reports that small businesses make up of all U.S. firms. Check out some other small business numbers they’ve reported below.

It’s no wonder there has been a large amount of focus on helping our small businesses succeed.  The SBA and other state and federally funded projects have been around for years, but we are starting to see more and more entrepreneurial organization pop up in our local communities.  Each one has its focus and you can typically find one that will help you in the area you need help with.

I’ve been doing business in my community for almost a decade now and I just recently started finding out about all of the wonderful resources that small businesses have available to them.  I’ve talked to other business owners about these resources and many of them had no idea they existed.  When I do meet some owners that have utilized such resources, they go on to tell me the story of how some benevolent person helped them in some way or another.  They refer to these people as their mentors who helped them negotiate a lease or get a loan to operate.  They are the people who steered them in the right direction and helped them maintain focus.

The idea of a mentor was something I had always dreamed of, but had no idea how to get one.  I thought it was just going to be a chance meeting that would turn into mentor/mentee relationship if either I asked or they offered.  It turns out, there are resources that do exactly what I was looking for.  The Service Corp of Retired Executives (SCORE) is a free volunteer based mentorship program that is supported by the SBA.  All you need to do is peruse the member bios in your area to find the one that could help you the best.

Your local Small Business Development Center (SBDC) is another great resource available to you.  This is a program initiated by the SBA that provides business advising at no cost.  They can help you with almost anything like building a business plan to market research and marketing.  If they can’t help you, then they usually know someone who can.  They typically have branches throughout each state and you can usually find a counselor close to you.

We have many entrepreneurial organization in my area that might not be available in yours, but Startup Weekend and 1 Million Cups are national and international organizations. Startup weekend is a 54-hour event where entrepreneurs with all different skillsets come together and “share ideas, form teams, and launch startups.” 1 Million Cups has weekly meetings where two local entrepreneurs have an “opportunity to present their startups to a diverse audience of mentors, advisors, and entrepreneurs.”

Get involved in some of your local business organizations.  They may be hard to find if you don’t know what you’re looking for, but start somewhere and you can usually find what you need just by asking other members of this community.  I’ve come to learn that it can be a powerful community that can be leveraged to help make connections and gain access to tried and true skills that have a positive effect on your business.

Leave a comment and share your resource story!

“Stop Doing the Mundane, and Start Getting Weird!”

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Tips to Strengthen your Business Plan – Part 2

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In part one of this series, we looked at a few common mistakes that are made in business plan composition.  Now let’s take a look at some things you can do to enhance your plan.

Use phasing in your plan. The graphic below shows the different phases a business can go through.  Operational activities look very different in each one of these phases.  You may not have all of the answers right now, but you should at least have an idea of how you plan to grow your company.

Phasing

Market research is a pain, especially if you don’t know where to look.  In my experience, the best place to find what I was looking for was on industry tradeshow websites.  Research the tradeshows for your industry and peruse their websites to see if they have any market reports available.  If that doesn’t work, then Google can be your best friend!

I really like Mintel Oxygen Reports.  If you can find your industry report on Mintel then you’ve got it made.  The caveat here is that they typically cost money, that is unless your local university has access to this database and you happen to know a student or are one. Professional industry market research reports can be expensive, but can offer you the quick fix to get all your needed research in one place.   If you’re creating a new market, then you are out of luck unless you can find something representative of your new market that can be adapted.

Build a business model canvas for your business.  Alexander Osterwalder introduced the concept of the business model canvas in 2008 and it has been quickly adopted as a key tool used in business planning.  It’s a visual representation of the nuts and bolts of your business summed up into one page.  This process guides you toward thinking about what’s important and helps you to define your business.

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The exercise to build a business canvas model can be a fun and creative activity.  I like to use a blank template with a free-for-all sticky note war with all of the founders and mentors. In this manner, we try to eliminate groupthink and allow individuals to be creative with their input into each segment. Once all the creative energy is spent, we go through each sticky note and decide what stays and what goes as a group.  All of the answers can then be put into a one-page format like the example pictured above.

In closing, these are just a few of the tips I’ve picked up that I thought were really helpful in building a solid plan.  Take a look at your plan and see if these tips might help.

Thanks for stopping by and remember to “Stop Doing the Mundane, and Start Getting Weird!”

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Tips to Strengthen Your Business Plan – Part 1: Three Common Mistakes

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“Aim small, Miss small”

~Mel Gibson in The Patriot

Have you seen The Patriot?  Mel Gibson teaches his kids that if they aim small, then they will miss small when rescuing his son from the redcoats.  This lesson isn’t only relevant to firearms.  The devil is in the details when you are writing your business plan.  I’ve reviewed many business plans and have learned some helpful insights from venture capitalists, entrepreneurs, mentors and advisors. These insights can help to strengthen your plan.

Three Common Mistakes

Be realistic about your market size.  Understand that your market is only as big as the national/regional/local area in which you operate, or plan to penetrate, and the competition of similar size that is present.  If you opened a local fast food hamburger chain that operates 5 locations across 5 cities, then you are not part of the $551 billion global fast food industry unless you plan to compete directly with McDonald’s on a global level.  Your market size is the revenues of all like kind competition in those cities.

Write a killer executive summary.   Your executive summary is what entices the reader to read further.  If a VC picks up your plan and doesn’t like the executive summary, he/she is under no obligation to finish reading the plan.  The reality is that books do get judged by their cover.  “The job of the executive summary is to sell, not to describe.” is what Guy Kawasaki says in his blog post about “The Art of the Executive Summary.

Thinking in a vacuum. Your business plan is going to be judged by somebody who is not just like you and have most likely seen a bunch of other plans to compare yours to.  They will catch most of the things you did not catch yourself.  You need external input.  Having advisors and mentors can be very beneficial to ensuring that your plan is a well thought out one.

If you don’t have anybody you can bounce your ideas off of or you need help with your existing business, then there are many great resources out there that you can utilize to help you on your journey.  National and state funded institutions like your local SBDC (Small Business Development Center supported by the Small Business Administration) and volunteer based SCORE (Service Corp of Retired Executives) are there to provide mentorship and counseling.  If your lucky enough to have a 1 Million Cups organization meeting in your area, you can have the opportunity to pitch your business idea in front of active community businessmen and entrepreneurs to gain helpful feedback.

Many great resources to help you start or grow your business are just a google search away.  Reach out, remain open, and accept the help.

It’s time to “Stop Doing the Mundane, and Start Getting Weird!”

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Plan for Growth

Business-Plan-300x214Every business needs to have a plan.  As the quote from Ben Franklin goes, “If you fail to plan, you plan to fail.”

Business plans come in various shapes and sizes.  The question you have to ask yourself is why you’re writing it.  Only then can you write the plan that will get you what you want.  Having read and worked on many business plans, I’ve learned that no plan can be used for all things.

There are typically three reasons to write a business plan.

  1. For yourself
  2. For a potential partner
  3. To receive funding

Your plan should be fluid.

When you are writing the plan for yourself, you don’t really need to stick to any special guidelines.  You do, however, want to make sure to organize it in a manner that you can continually reference it.  Business plans are fluid documents.  They change as your business changes and goals shift.

Consistent updating and referencing will help to keep you on target.  We can often become distracted with shiny new things that deviate us from our path.   This can waste valuable time and resources.  Your plan can help to serve as a guide and help you maintain focus.

Tailor your plan to your target audience.

When you are writing for a potential partner or funding, you are typically writing a document for one time use.  If you are writing it to receive funding from a bank, then the size of your plan may be between 20 and 30 pages.  This is especially true if you are trying to get an SBA loan.  If you are writing it to get funding from a venture capitalist, then the size should be no longer than 10 pages including appendices.

Understand who will be reading it and what they may look for.  If you are trying to get a local grant, the reader may be more focused on economic impact and job creation.  If you are looking for venture capital, then your plan needs to tell the investor that you have a capable team with a scalable product that has potential to garner big market share.

Here’s a couple good articles on what venture capitalists look for:

Whomever you write your business plan for, make sure it is detailed and to the point.  Business plans are large documents and take time to read.  Keep the fluff to a minimum to make it easier on you and your reader.  If you would like more detail on what a business plan should contain, the SBA website goes into great detail about what questions need to be answered in each section.  Also, I really like Guy Kawasaki’s post on “The Art of the Executive Summary”.

Follow this blog to get notifications on new posts.  I’ll touch on some key tips I’ve picked up on what to include in your business plan.

It’s time to “Stop Doing the Mundane, and Start Getting Weird”

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