The Plan-for-Planning Process – STEP 2

In this week’s post, Dr. Business continue with Plan for Planning process by discussing STEP #2:

Step Two – What will help or hinder?

Typically called – “Key Problems & Opportunities” – this section/chapter identifies short term (within the next year) problems that the management team must deal with/resolve, and short term opportunities that can be exploited over the coming year.

Problems and opportunities also come from the SWOT analysis described in Step One. Every company has short term problems and opportunities that need to be described in their business plan. To have a well done and complete business plan theses issues have to be highlighted with the actions planned to deal with them discussed in detail.

The format for this presentation and discussion is:

  • Description of the problem e.g. Training and development of sales personnel.
  • Action plan: Contract with a professional sales training company for quarterly one day detailed seminars on professional selling techniques.
  • Measurement: Individual salesmen’s improvement in their selling techniques as measured by: 1. Increased sales, and 2. Feedback from customer surveys.
  • Description of the opportunity e.g. Implement Customer Relationship Marketing (CRM) system.
  • Action plan: Research CRM systems for the one best suited for our business/marketplace during the first quarter.
  • Evaluate and select a system during the second quarter.
  • Begin implementation during the second half.

When done well this section/chapter of the business plan describes management’s proactive plans to deal with the problems and opportunities identified in the SWOT exercise. It represents positive actions that are being taken to deal with issues of critical importance during the first year of this business plan.

It should reinforce stakeholder’s confidence in the management team and motivate them to delve further into the longer range plans outlined in the business plan.

The Plan-for-Planning Process – Step 1

One of the major reasons businesses fail is either because they do not have a business plan, or have not updated the plan that they once developed.

A business plan is a story about your business: Where are you now? Where do you want to be? And, most importantly – How are you going to get there, and by when?

After helping hundreds of company’s develop business plans and teaching business strategy for many years, I explain my five step Plan-for-Planning Process in my book.

Step One – Where are we now?

Typically called – “The Executive Summary” – this section/chapter explains where a company finds itself  at the beginning of a new planning period in terms of:

  • Their sales and profitability at the end of last year.
  • Their position in their marketplace vis-à-vis their competitors.
  • The results of the most recent SWOT analysis.
  • What their unique value proposition is.
  • Management’s description of their vision for the future of the company.

This section can only be completed after the management team has gone through an evaluation of the current situation the company finds itself in. This encompasses an honest SWOT analysis. SWOT being:

  • Strengths – What is our core technology i.e. what do we do better than our competition?
  • Weaknesses – What don’t we do well i.e. in terms of execution of our strategies?
  • Opportunities – What immediate options do we have that we need to implement as soon as possible?
  • Threats – What can cause us to lose customers, and what can we do about it?

Since a business plan is a story about a business, and as a story it has to be interesting and motivating for stakeholders to want to know more. Think about the introduction to any good book that you have read – hasn’t it encouraged you to want to read on?

Another important value to a well done business plan is that it can be shared with all the company’s stakeholders to give them confidence that they are part of a growing successful and profitable business. The most successful companies broadcast their unique value proposition, as well as the implementation of  well thought through strategies that support their vision for their future.

A well done business plan is akin to reading the annual report of any successful public company wherein the company explains: where they are now, where they plan to be in the next 3 to 5 years, and the strategies they expect to implement to get to where they want to be. The continuing ability of the management team to achieve their goals supports and grows the brand equity of the company. This should be the goal for your business plan, too.

How to Win Support for Your Entrepreneurial Dream

Your business should begin with a business plan and financial projections.  Dr. Business mentioned this in his posts some time ago.  These are valuable tools because they help us capture our dream and put it down on paper.  Without this clarity, most people will think you’re still in the creation process, molding your idea into something actionable, and will be reluctant to lend a hand.  Here are two things you need to create to turn the excitement you create in others into support for your dream.

Clarity of Vision.    Before you do anything with your entrepreneurial dream, you first need to paint it with enough clarity that you can describe it in detail beyond the normal person’s level of patience.   In a recent business venture, my partner brought me an idea of the business he wanted to start.  Initially, the idea was fairly simple and would be realized within a year.  Thinking this idea had merit, I decided to take a good look at it.  For me, it took about two months to fully vet the idea.  I looked at everything.  When I was done, I created a new vision for the company that was considerably different from the original idea.  The service offering was the same but the customer base was much broader and had a growth plan that spanned geographically and across different markets.  Another modification to the plan was the elimination of competition from other service providers by the new choice of the customer base.  Lastly, I created a technology plan to that was aimed at optimizing the processes through the use of technology that would eventually make it a hands-free process.  After my review, there was little I didn’t know about this plan.  I could easily talk for 3 hours on the new plan.  This is well beyond what anyone would want to hear in any one sitting. Granted you may not have put this much time into your idea, you need to be able to visualize and verbalize two main ideas; that is, what you are doing now and what you’ll do later.

What are you doing right now?  This is an extremely important question.  Imagine someone hears your idea and wants to invest in it (not a VC or angel investor).  You need to be able to tell them what you’ll do from day 1 through the first year.  Interested parties will want to know what actions you’ll take.  If you can explain those, then they will assume you’ve made a fairly good analysis of your idea.

Where do you see this going in the future?  This answer communicates the amount of time you’ve put into your plan.  If your answer is “I don’t know,” then most people will have serious concerns about the potential for this idea.  But if you can provide an answer that outlines the actions in year 2, year 3 and beyond, your audience will take further interest in your dream.

Market it to them.  One thing you know is that accomplishing your dreams all by yourself is almost impossible.  You need others to take a real interest in what you are doing.  Most startups fail.  This is a known fact.  Why?  Vision and support.  Without a vision, you won’t win support.   Without support, you’re on your own (and that’s really difficult).  Gaining support isn’t that hard.  It all starts with expressing your dream in a way that inspires others to want to be a part of your dream.   In fact, sharing your dream to inspire others must be one of your goals.  The key to soliciting support for your endeavors is to articulate your dream in a way that is clearly visible, tangible and palpable.  You can sell your dream without anyone ever even knowing it.  Here’s what you need to show them.

Vision. If you don’t have a clear picture of the future you want to create, no one else will either.  This means they can’t figure out how to help you get there.  The picture doesn’t have to be in extremely high resolution, but the more definition you can provide the easier it is to see.  Henry Ford, John Rockefeller, Thomas Edison, Andrew Carnegie, Sam Walton, Oprah, Bill Gates and many others have built an empire from nothing.  It all started with a vision.

Drive.  If you want to motivate people to action, they have to feel a sense of purpose.  In this case, it’s your purpose which must ooze out of every pore in your body, fall on the floor and splatter onto to others, infecting them with a strong sense of purpose.  There are plenty of examples.  Steve Jobs helped create Apple, then he was kicked out of the company he helped start.  He then created Pixar, which led to his return to one of the greatest companies in the world.  Steve wouldn’t be held down.  Now, that’s drive.

Passion.  Have you ever been around someone who without a doubt believed in what they were doing?  You could sense the excitement in their tone and body language.  After a few minutes of listening to them, you felt excited.  The love you have for your dream is what fuels your efforts and people should be able to sense that.  They should be able to see it, hear it, feel it,  and most importantly, adopt it.

Who are you marketing to?  Anyone who can help you move your goals forward.  I sell my dream to my mentors, friends, neighbors and anyone who takes an interest in it.  When I start talking about one of my businesses, I act like a kid in the candy store.  I’m full of excitement and energy and have the ability to ramble for days about the plans I have for them.  I share my dream constantly so my speech is well practiced and rolls of my tongue effortlessly.  Most people respond with a “slow down” comment somewhere in our conversation.

Here’s how I gauge my success in selling my dream.  In a recent startup of mine, almost everyone I spoke with wanted to become a part of the business.  I would ask someone for help and they would turn it into a job interview.  That’s how you know you’re on the right track and that your dream is so deeply embedded that it shines brightly in all you do.  In a phone conversation with a friend, he wanted to know what I was doing.  It had been a while since we last spoke.  After a few minutes, he asked me to call him on another day to understand my latest endeavor in detail.  He wanted to be a part of it.  He stated that “anything you do is surely well thought out and likely to be a big winner.  I’m in.”  I wasn’t really asking him for help.  I was just talking about my dream.  Now imagine you get an offer of support from everyone you talk to.  You’re almost guaranteed to be a success.

Remember, your success hinges on your vision and your ability to sell it.  Once you define and believe in it, things will begin to fall into place.  The world loves dreamers.  We want someone to follow.  Dreamers provide inspiration for us to follow our own dreams or become a part of theirs.

That’s it for now.  The burden is yours.  What will you do?  Wish it or build it?

Are mentors important for entrepreneurs?

In this week’s question, we ask Dr. Business “Are mentors important for entrepreneurs?”

Dr. Business says:

“Entrepreneurs are techies of one sort or another, and typically have never taken any courses on the fundamentals of running a business. As a result they need help and mentors are the ideal individuals to guide them during the critical start-up of their new business. They can help right from the beginning by sharing their feelings about the commercial viability of the entrepreneurs idea. Many entrepreneurs have great ideas that just will not fly either because there just aren’t enough customers, the cost are prohibitive, the technology too complex for the current market, or the competition too great.

If the mentor feels the idea has merit then the best that they can do for the entrepreneur is to guide them through the development of a business plan, and most importantly the break-even analysis for their first year of operations. The business plan is critical for two reasons (1) as a much needed education for the entrepreneur, and (2) as the basis for explaining and justifying the value proposition for potential investors. The break-even analysis lends even more credibility to the presentation to prospective investors.
Other types of mentors are accountants who can also help entrepreneurs understand the value of developing timely financial statements and budgeting. And, lawyers are essential to any business, and especially start-up’s who need help with a variety of contracts. Lastly, mentors who are experts at marketing can be very helpful in the current era of social media and mobile marketing.
The best advice I have for any entrepreneur is to establish an Advisory Board of mentors as soon as possible before launching your new business. They will save you from yourself.”
Thanks, Dr. Business.  As always, if you’ve got a specific question you want Dr. Business to address, email it to us.