Tag Archives: Business Plan

Selling Your Dream

If you’ve been reading our latest posts about the Plan-for-Planning process, you should now have a good business plan to kick off the next phase of your life.  Having done this a few times, I want all newcomers to entrepreneurship to be aware of the impact your new dream will have on your environment, especially those around you.  Read on to learn from my own experiences.

First, enjoy the excitement you have in your business vision.  You should be very passionate about it and eager to get started.  You’ll need every bit of that energy as starting a business isn’t for the weak minded.  It will be one of the largest investments you’ll make in your entrepreneurial journey and you need to take it seriously.  The reason I want you to feel the excitement is that every person you talk to about your business should feel your energy and passion.  I remember a discussion with my plumber when he stopped by to make a few repairs.  He asked what I was doing and I seemed to bubble over in my joy in just talking about the business. He said he could “feel the passion.”  I really hadn’t begun the business yet but the plan was in place and I was obviously ready to start.  That passion is critical at startup.  When it comes to selling your dream, people must believe that you believe in that dream 100%.  If they don’t feel it, they won’t buy it.

After you’re convinced you’ve got the best thing since sliced bread (or a really good business plan), you’re next step is to begin motivating your support team. These are the people around you that will support you physically, spiritually, mentally and any other way you need it.  You will want them to have the same amount of passion as you do, but this is unlikely.  Remember, this is your dream.  When I say YOU, I mean YOU.  No one will have the passion you do for this little idea.  Not even your wife or kids.  I started a business recently and it’s just beginning to take off.  It took a little longer than I expected but it is gaining some serious momentum (more on that later).  Do you think my wife and kids had complete faith in the idea? Not at all.  You see, the world isn’t full of dreamers, like us.  Some people just don’t like to take risks.  They are happy with a paycheck every two weeks.  Well, that’s my family.  I’m the starry eyed dreamer and risk doesn’t bother me at all but my wife saw it as a big risk, at least until contracts started coming in and the business grew.  Success was the proof that it was a good business idea.  Until success came, I had to bear the stress that I was on this journey alone (or so it felt).  Sure, everyone thought it was a good idea but they weren’t ready to jump on the bandwagon with me until it was a certainty.  This behavior by your loved ones isn’t unusual. In fact, it’s normal. My risk-taking is out of the ordinary.  Don’t get me wrong, my friends and family were supportive but they didn’t want to invest any energy into it until there was sufficient evidence of its success.

The hardest audience in selling my dream was my customers.  After all, if your family isn’t “ALL IN” then it’s going to be difficult to convince complete strangers to buy the service.  But, you already know that it will be difficult.  That’s why most people don’t start their own company.  Before I began reaching out to customers with my dream, I tried to create a brand around the service I was offering, which identified three key features that essentially made the question of buying the service all too easy to make.  I was figuratively laying a brick of gold on their desk and saying “this is yours at no cost.”  Strangely, no one touched it.  I was confused.  It’s free money and no one wanted it.  I soon figured out that two things were missing: understanding and trust.  These two factors were intertwined and stopped them from even considering grabbing the brick of gold.  They didn’t know me so they didn’t trust me, even when I cited the specific laws that clearly articulated the legality of their right to the money.  Trust was muddled by their lack of understanding of our service.  I had assumed that many customers understood what we were offering, but they didn’t.  Certainly, not in the detail I know it.  So, I began to work on these.  I got to know my customers better and created documents to explain the whole situation in detail (i.e. the problem and the solution).  Here’s where I ran into another barrier.  My customers didn’t realize it was a problem.  They didn’t even know this option existed.  Again, I put my nose to the grindstone and created more information to help my customers understand, specifically I captured information on how other customers were doing with this service so that they had a reference for the improvements it would make.

Eventually, they understood but the layers of mistrust were still as rigid as ever.  At this point, I thought I had them sold and they would grab that brick of gold off the desk.  But they didn’t.  Something else was holding them back. But what could it be?  The decision is a “no brainer.”  It wasn’t trust or knowledge of the service.  It had to be personal. But, I began to see this from many potential customers.  What personal reason could be stuck in the minds of so many people?  This was very strange to me. How could something so easy be personal?  These questions bounced around in my mind for months.

Then, I began to think about it from their perspective.  If I’m the customer, why wouldn’t I want my service?  There are two circumstances where I might be worried. First, what if I buy the service and it turns out to be a disaster? Second, what if I buy the service and it turns out to be a huge success?  The first question is easy to answer.  The customer wants some assurance that it will work. This is where my references and existing customers come in.  They can connect with potential customers to share their success stories.  The second question is a little harder.  My customer may worry that they will come under scrutiny for NOT hiring our service earlier if it turns out to be really successful.  My customer would never share these thoughts with me as it may make them feel vulnerable.  So, I began to help them see how to create their success story.  When I say “see their story”, I mean I put it in a visual process flow map that shows how we’ll sell the idea up the management chain while providing information that will answer all of their concerns, including why this wasn’t done earlier.  This process of brainstorming all of the possible barriers my customer can face, even the personal ones, has become a big part of my selling process. I include it in documents and presentations that I carefully share with my customers.  I make sure to paint a clear picture of how this decision will impact their reputation or how others see them.

That’s it for now.  Selling the dream once you’ve developed it will be challenging.  You have this great vision in your head that no one else can see and you have to find ways to help them visualize it.  And, of course, you’ll run into numerous barriers to materializing the dream.  Many of these barriers I would have never dreamt of but luckily a continual push has brought them to light.  Once you see the barriers, you have to resolve them.  Your customer’s issues are your issues.  The quicker you solve them, the faster you can get to the sell. Remember, business is always personal.

If you’ve got a story to share, send it to me at info@blitzteamconsulting.com.

The Plan-for-Planning Process – Step 7

Step 7 – Contingency Plan

The seventh, and last, chapter/section in the business plan is the contingency plan section (or the “what if?”). Since very few plans happen exactly as planned, and to demonstrate good planning acumen assuming a question like: “What will you do if you do not make the plan?” – from anyone who reviews the business plan, you need to contemplate the two obvious scenario’s:

  • What will we do if business is “better than” planned?

And

  • What will we do if business is “worse than” planned?

This then anticipates that the management team has developed Key Performance Indicators (KPI’s) that can be tracked every month. KPI’s being those 6 or 7 key indicators of business health for any business.

These KPI’s should have “trigger points” where it is obvious that the business is doing either “better than” or “worse than” the volumes in the best case scenario contained in the business plan. Reaching these trigger points should indicate that it is time to implement one of the predetermined contingency plans outlined in this section of the business plan.

Tracking these KPI’s in combination with the review of progress against the quarterly strategic milestones in the strategy section, the management team has a proactive methodology for maintaining control over the business.

Once developed in the way in which advocated in the plan-for-planning process, any management team can easily create a winning business plan.

The Plan-for-Planning Process – Step 5

Step 5 – Asset Management

The fifth chapter/section in the business plan is the financial section. It should contain the projected Profit & Loss Statement, the Balance Sheet, Cash Flow projections, and key financial ratios for the business plan.

All of these financial statements should contain commentary where required to explain and clarify any specific numbers.

Additionally, any substantial capital expenditures over the business plan period should be noted and explained in the Asset Management section.

Summary level examples of these statements are:

                                                Projected Profit & Loss

                                                Operating Plan Period

                                                20XX     20XX    20XX

     Sales

     Cost of Sales

     Gross Profit

     Expenses

     Net Profit

                                                   Estimated Balance Sheets

                                                   As at:  20XX   20XX   20XX

        Assets

        Liabilities

        Equity/Net Worth

 

                                                    Estimated Cash Flows

       Opening Cash 1/01/20XX

       Incoming cash

       Outgoing cash

       Closing cash  12/31/20XX

 

                                                   Estimated Significant Financial Data/Ratios

                                                    20XX     20XX     20XX

      Working Capital

      Inventory Turns

      Receivables Collection Periods

      Debt to Equity

      Return on Assets

 

                                                    Projected Capital Expenditures

                                                    20XX     20XX     20XX

     Asset Replacements

     Expenditures on

          Strategy 1

          Strategy 2

          Strategy 3

Reviewing the Asset Management will give any reader a clear picture of the projected financial situation of the company over the business plan period.

Step Three – What are we going to do it with?

Continuing with your business plan – the story about your business:

Step Three – What are we going to do it with?

Typically called – “The Marketing Summary” – this section/chapter identifies the products/services that the company offers, and their plans for each during this business plan period.

The format for this section is:

  • A description of the product/service, and the market(s) that it competes in.
  • Where the product is in its product life cycle (E,G,M,A).
  • How much it contributes to the profitability of the company.
  • The specific marketing strategies for this product/service.
  • Any plans for modifying this product/service to meet changing customer requirements, and by when.
  • Any concerns about competitive threats.

When completed this section should present a clear picture of where the company is in its life cycle and the individual products/services positions in their life cycles that support and contribute to the overall company life cycle position.

Ideally, this should be summarized in a table-like presentation:

Product  Life cycle position  Projected sales  Profit contribution

A                G                                    Yr 1 Yr 2 Yr 3         Yr 1 Yr 2 Yr 3

B                M

C                 A

D                E

Company        G

As you can see this simple presentation gives the reader a complete picture of how each product/service contributes to the total projected sales and profits of the company for each year of the business plan period, as well as where each is in their product life cycles, and the company as a whole.

In combination with the narrative for each product/service you have a complete presentation of “what we are going to do it with”.

Stay tuned for Step 4!

As always, send us your questions for Dr. Business to info@blitzteamconsulting.com.

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.

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?

Ask Dr Business – What are the biggest challenges in being an entrepreneur?

In this week’s post, Dr. Business address the following question:

What are the biggest challenges in being an entrepreneur?

Being an entrepreneur requires having a unique passion for your solution along with the willingness to commit the time and energy required to bring it to fruition in the form of a profitable business. Entrepreneurs also need to be able to accept rejection from the myriad of naysayers they will encounter along their way to success. Besides these fundamental challenges an entrepreneur has to be able to ask for help, which is typically against their nature and concern that someone will steal their idea.

Lastly, entrepreneurs do not like controls so they resist the need to develop a business plan. As a result, they encounter a variety of critical pitfalls that could have been avoided if they had only taken the time to go through the inexpensive and educational exercise of putting a business plan together before they started. Developing an even more fundamental break-even analysis for the first year of operations is also a challenge for many entrepreneurs. Without doing these basic business exercises many entrepreneurs exhaust their meager start-up funds and fail before they even launch their solution for a better world.

“Nobody plans to fail…they just fail to plan” – Doctor Business

TUNE IN NEXT WEEK FOR PROFESSOR ROBERT DONNELLY’S ADVICE FOR ENTREPRENEURS.