Creating a business plan is a lot like forecasting the weather… those who are in charge of predicting a storm get blamed if they are not 100% accurate. The same logic applies to business planning in terms of timing, expediency, and execution. This can lead many business owners to abandon ship, rather than seeing it as an opportunity to change course. Always remember, business planning is a process.
Carl Schram, former head of the Kauffman Foundation for Entrepreneurship, recently wrote Burn the Business Plan, which echoes a similar strategy for a streamlining the planning process. Reis and Schram are mostly right to criticize excessively lengthy business plans. At Startup Connection, we argue that business plans are necessary, but that they need to flexible and dynamic (and meant primarily for yourself, not others.) As the saying goes, “If you don’t know where you are going, any road will get you there.” Making plans for others (especially venture capital firms) and following specific rules almost guarantees the process will not be useful to you. In addition, venture capital firms account for a very small segment of business financing, especially in the beginning. A business plan is not just a document to be stored on a shelf; it should establish parameters and be developed, tested, and be continuously revised. Even with a “perfect” business plan, there will be failures along the way. In particular, failing and learning from failure are critical components of the ongoing planning process. Business planning is a process.
Some Planning Suggestions
There is no cookie-cutter approach to writing a business plan. Get your ideas on paper before stressing about the organization of information. Don’t stifle yourself. Write it in your own words, as simply and concisely as possible.
Focus on your passion. A successful business plan should express why you think your business is a good idea and why you will succeed. If you need to dress it up in a suit and tie to show to investors, do that later. A business plan should be YOUR vision.
Common Parts of a Business Plan
Every business plan is different because every business is different. However, there are some common elements to consider, such as:
Mission statement
Goals
A description of products and services
Ideal customer
Analysis of the industry and your competitors
Marketing and sales tactics
Operational plans
Manufacturing and delivery logistics
Resources necessary (this includes labor, equipment, and facilities)
Financial budget
Also, focus on the components that are most important and challenging, rather than worrying about making every section perfect.
Some Further Tips
Don’t be too verbose: A formal business plan must focus on the needs of the audience and the entrepreneur. Business plans must be on point and clear. Typically, plans should be 15-30 pages. If additional details are required, put them in a short appendix.
Think it through: You might have a great idea, but have you carefully mapped out the steps you’ll need to make the business a reality? It’s worth investing your time in the planning phase to ensure you might make money in the long run.
Do your research: Investigate everything you can about your proposed business. Google and Amazon are great and easy tools to understand the market and your competition.
Be realistic about your competition: Is your product or service something people really want or need, or is it just “cool?” Why do you think people will buy your product or service?
Get feedback: Obtain as much feedback as you can from trusted friends, colleagues, nonprofit organizations, and potential investors or lenders. You’ll know when you’re done when you’ve heard the same questions and criticisms again and again. The goal is to have a good answer to almost everything that can be thrown at you.
Completing the business planning process can be challenging, but it should also be interesting, productive, and satisfying. The hardest part is developing a clear picture of the business that makes sense, is appealing to others, and provides a reasonable road map for the future. Another challenging aspect is integrating your products, services, customers, marketing, operations, management, and financial projections seamlessly together. However, these pieces should not dilute your enthusiasm to succeed.
Dr. Bert Shlensky, president of Startup Connection ( www.startupconection.net ) has an MBA and PhD from the Sloan School of Management at MIT. He served as the president of West Point Pepperell’s apparel fabrics business & President and CEO of Sure Fit Products. Having provided counseling to over 2,000 clients, he focuses on working with select start-up companies and small businesses. Call today for a free consultation, so we can use our business plan templates to take your business to the next level.
There is value in proper planning and execution, especially related to “Marketing & Sales.”
Yet, how many times have we heard successful business entrepreneur share their success (after many failed attempts) when they didn’t plan on it?
In this post, I will explore how “Not Overthinking and Just Doing” can also be a useful strategy for growing business. This technique can be employed by all businesses, yet it is the small business owner who holds the advantage of this strategy, as resources are more flexible. In addition, the absence of tiered staff and bureaucracy allows for more inspired and engaging strategies to be implemented faster and adopted as needed.
I will share two examples of how “SHOOT FIRST… ASK QUESTIONS LATER” has served my clients with great success.
SURPRISE SALES” CAN LEAD TO “SURPRISING RESULTS”
DROP PRICES TO INCREASE LEADS
(15% versus the usual 25-30%)
My client “Jane,” a small business owner, has found her sales success to be based on regularly introducing new products. With each new product, she would carefully plan the new rollout, developing marketing, pricing, and communication strategies for few months at a time. During her last product launch, she got antsy, and just posted an introduction on her web site with a very modest sale.
The result was the best single email and ad in a few years.
GO WITH YOUR GUT
Her usual product launches involved strategy, analysis, and tiered introduction of the products. With this GUT INSTINCT, to just post a modest sale to her new product, the timing and response was just perfect in her category, giving her more exposure, in addition, with Amazon and other retailers (as timing was perfect).
RIGHT PLACE – RIGHT TIME
Had she waited few more weeks or months for all marketing research and strategy to be concluded, she would have missed the “RIGHT TIME.”
This new success has found her a new strategy that she employs regularly now with success. Online business and internet sales now allow us to “test” and “analyze” strategies faster and adapt to the changing market trends.
SPENDING MONEY ON MARKETING & NOT GETTING RESULTS?
Our second client case review is about a service-based business that has failed repeatedly, even though the offered services were very useful to the target audience. Where did they fall short? Having hired numerous marketing experts to conduct testing, analysis, and creating “ads” and other related marketing tools to drive “traffic,” each marketing project tapped into their budget with no results.
TO DO …OR NOT TO DO?
Market research requires an allocated budget, and implementation time can take months (which small business usually don’t have, as they need sales to keep there doors open). The down side of “Expert Market Research & Planning” for small businesses is that, if the result of all the research and planning was unsuccessful, their budget can be exhausted, and repeated action of the same approach will delay immediate actions that could be taken.
DON’T JUDGE THE MESSENGER
Small business have an advantage, as they can easily test the techniques that work best faster than larger corporations. After many failed attempts, and many marketing experts later, the company programmer had an idea. With the ease available now to make websites, and all the templates available, he suggested, “Lets create a few mini test websites,” and drive traffic via cost efficient ways. Use “Google Adwords,” and test which style will resonate, and best convert the traffic into leads.
In the company’s prior approach, each website change involved a lot of research and planning. This new strategy allowed them, in real time, to test multiple styles. They could focus on the successful ones, and adapt the others based on what they learned. Best of all, this can be done quickly and inexpensively.
MULTIPLY YOUR TESTING
This technique of utilizing your resources to create test sites and other “POP UP-like” sites for your business will allow you to get immediate feedback on what works and what doesn’t, without months of planning each strategy, and waiting for results, only to adjust again later. In a few days, you can get preliminary feedback on almost anything and develop further tests. You can also do simple AB testing, to make the tests even more valuable. Google Adwords can be tested and quickly modified, based on results.
SUGGESTIONS HOW TO “SHOOT FIRST & ASK LATER”
Develop, test, measure, and adapt. Think outside the box – create pilot test programs you can utilize with your business NOW – without over-planning. This will allow for the gathering of more data faster, and help you find what works best.
Focus on winners. Find your winners, and expand on those techniques.
Less talking, more action. Understand what you know, what you learn, and what you don’t know. In particular, reduce endless conversation about alternatives, where there is little empirical evidence, but lots of opinions. At the same time, learn from your test results, and execute for your success quickly.
Details matter. Examine the integration of variables and success. Presentation, details, marketing, and pricing can all affect the success of a program. “What did you do that made it work?”
IN SHORT…
We frequently spend too much time analyzing what we don’t know. Allow for some uncertainty and for more testing, especially on the Internet. Make it fast and inexpensive. Most importantly, test to identify real winners, and then, reconfirm, and expand as fast as possible.
Dr. Bert Shlensky, president of www.startupconnection.net, is a graduate of Sloan School of Management at M.I.T. He served as the president of WestPoint Pepperell’s apparel fabrics business and President and CEO of Sure Fit Products. Having provided counseling to over 2,000 clients, he focuses on working with select start up and small businesses.
Say what you want about trademarks and logos. They have their place. But if you’re really looking for brand development, making sure it’s successful in the market you’re targeting, there are three aspects you have to focus on the most:
You Simply Ask Yourself These Three Questions About Brand Development: What Are the FEATURES, What Are the BENEFITS, and What Are the ADVANTAGES?
Real quick, if you don’t know the answers to those questions, simply start researching. Get them. Without them, your brand isn’t a brand. But just a name. And there are a lot of names out there!
The thing is when you’re building your brand, educating your consumer base about the “holy trinity” does a few things — it lets your customers know what the product/service is, why it’s great, and why it’s better than the rest of the competition. We’re talking about a 1-2-3 combo, and if you were a boxer, that’s a knockdown on the 3rd round for the championship belt without breaking a sweat! You’re, of course, asking just why these three together make so much of a difference in your brand development.
Features — The “features” of your product and service happen to be exactly what it is. The specs. What your product/service does and provides. This is the nuts and bolts. The basic understanding. After all, customers may know what a fork does, but they had to have that explained to them when the fork was first introduced into the consumer market, right? These days, though, features don’t come across as that simple, hence why aspects like warranties, ease of use and distribution return privileges (the added “features”) make a difference as well.
Benefits — Here’s where we get a little tricky. The benefits are like the “features” except now we’re going above and beyond what the product/service does. Why does it do what it does? That’s the question. We now know what a fork does. But why do we need one? To effectively eat our chicken Caesar salad, of course, without any of the lettuce falling off! Now that’s a benefit. But it’s only a benefit if the customer believes he/she needs it and sees it as valuable.
Advantages — And, of course, lastly, it’s pretty obvious why a fork would be better than, say, a SPOON when eating chicken Caesar salad. This is where you have to explain what the advantages are. Target your competition. Set yourself apart. Sure, the spoon’s great for cereal, but when was the last time you successfully ate a salad with a ladle? These days selling the advantages of a product or service has been getting much more cutthroat and vicious with the shorter attention spans and seamless Internet communication capability.
Hence why more now than ever we focus on these three even heavier than before as part of branding. Packaging your product/service in this way along with that name and logo gets you started on the right foot. Plain and simple.
Now Get Started With Your Brand, Ring the Bell, and Make It Happen
Of course, I can help you with everything you need in propelling your small business, all the nuts and bolts. But you need the vehicle first. Here are the parts. Start building. And I’ll see you soon.
Dr. Bert Shlensky, President of The Startup Connection, directs all small business clients toward maximum sales and profit thanks to his 40 years of high-quality experience. He does this through technological, social, and online integration, supercharging your business success into the next level, so don’t hesitate to sign up for a free consultation RIGHT NOW.
Business risk happens to be a wolf in sheep’s clothing. However, if you give all the sheep hockey sticks and a puck like Wayne Gretzky, that wolf will likely hide behind the goal’s net. No one likes getting hit by the puck several dozen times! But we get it, though: we’re afraid of ticking off that wolf, and lo and behold: the wolf might come out from behind that net and start really nasty grunge fights with each sheep, and instead of a hockey game, we have a slaughter on our hands.
Honestly, Business Risk Is a Lot Like That: an Angry Wolf
But here we have the key to taming that wolf — we mentioned Wayne Gretzky.
It turned out he had quite the quote that makes perfect sense in hockey —
“You miss 100% of the shots you don’t take.”
When you think about it, that makes perfect sense! And there’s no way around it. Truthfully, if you’re running a business, you have to accept the fact that you’re always going to be facing risk. And if you run away from it, the risk is even greater.
The key to managing risk is to take those chances — and learn from the historical data. Part of the problem is that we think risk is a lot bigger than it actually is. That wolf does look a lot bigger on the ice rink — until you start chucking pucks at him.
Sadly we’re creatures of habit, and before the innovation of technology — the Internet, mobile, Google, Amazon — we didn’t have a lot of “pucks” to chuck at the wolf like Wayne Gretzky would. So we were stuck on the old methods and didn’t want to try something new. And it’s understandable! — after all, we can’t predict much results with new programs or methods, because there’s nothing as far as historical data for us to analyze.
Thankfully, I Have the Goods Here About How to “Take All the Shots” Like Wayne Gretzky and Manage Risk Without Failure:
Here are some tools to keep in mind as you manage risk head-on while moving forward in your small business:
Measure, Estimate, Prioritize, and Adapt — Testing and experimenting are the keys to taming that wolf. In fact, we once had a client simply focus on key inventory items, eliminating unproductive factors by just looking at the clicks and monitoring the Google Analytics data. It’s simple. That’s one slap shot you can take like Wayne Gretzky.
Follow the 80/20 and 90/30 Rules — Develop your business methodology down to these numbers, and it’ll be a lot easier to forecast results. The 80/20 rule is how you’ll expect 80% of your sales coming from 20% of the offerings you make. So do the math. Likewise, 90% of all perceptions of your product will be realized in your customers’ heads within 30 seconds. So, in other words — make enough shots at the goalie in a short period of time, and you’ll definitely expect a lot of scores.
Lastly…. You Will Make Some Mistakes, and That’s OKAY — Why? Because that gives you the opportunity to adapt. After all, the longer you keep making those shots, the more hits you’ll make over time.
In other words: the more business risk you take, the less risk there will be.
It’s Not Easy, and You Need to Exercise Caution, Obviously
Simply be strategic. Don’t go all out. But balance your efforts. After all, Wayne Gretzky didn’t win on sheer will and tenacity alone; he had the skill.
Dr. Bert Shlensky, President of The Startup Connection, directs all small business clients toward maximum sales and profit thanks to his 40 years of high-quality experience. He does this through technological, social, and online integration, supercharging your business success into the next level, so don’t hesitate to sign up for a free consultation RIGHT NOW.
When you want to stand out, reach out to Bert for the tools that will build your “sticky” brand. My focus is on understanding and analyzing your dilemmas and challenges, so your company becomes profitable faster.
Call (914) 632-6977 or email me at bshlensky@startupconnection.net. Don’t leave without signing up for our useful free eBook!
Feeling stumped or overwhelmed? Contact Bert at (914) 632-6977 or Email to start the process. Thanks!
Creating a business plan is a lot like forecasting the weather… those who are in charge of predicting a storm get blamed if they are not 100% accurate. The same logic applies to business planning in terms of timing, expediency, and execution. This can lead many business owners to abandon ship, rather than seeing it as an opportunity to change course. Always remember, business planning is a process.
Common Parts of a Business Plan
them, your brand isn’t a brand. But just a name. And there are a lot of names out there!