Tag Archives: Entrepreneurship

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 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?

A GUIDE BOOK TO PLANNING

Starting a business is never easy.  If it was, everyone would be doing it.  The challenge for most is the unknown.  When you haven’t started and run a business before, you really don’t know what to look out for.  This is where many turn to the Internet for answers.  We will spend hours searching from site to site to find the best advice.  I know.  I’ve done it many times myself and I’ve started a few businesses that way.  In fact, I started a new one this summer and am still in startup mode.  There are two ways to start a business: planned and unplanned.

My first business I thought I was very smart and could figure out everything I needed to know when I came to it.  Unfortunately, I didn’t know as much as I thought I did.  There were many legal, insurance and finance questions I couldn’t answer.  I had to stop the business to understand what these issues meant.  It really became a nuisance when I would have to stop selling my services to go figure something out.  It took me a couple of businesses to figure out that you really want to plan out your steps as much as possible before you start the business.  There’s nothing worse than having to hold a customer off while you go obtain some certification or license so you can offer them your service.  Planning early allows you to focus on selling the business when you start.  After all, that’s where the money comes from.

In my most recent business, something outside of my expertise, I decided to do the right amount of planning prior to kickoff.  I’m actually selling services to the government so I can’t afford to be unprepared.  So, I chose a detailed planning process to prepare the business.  Since this business was outside my expertise, I needed a guide to help me keep from wasting so much time figuring things out.  I’ve worked with Robert Donnelly for years and chose the guidebook he released some years ago, entitled “Guidebook to Planning.” It is a great start, complete with examples, illustrations and even forms.  Donnelly has a lot of experience in entrepreneurship.  In fact, some of the information from this book has been utilized in training classes he developed for BUSINESSWEEK and INC magazine.  This guidebook is a compilation of a lot of experience and will save you considerable time developing that invaluable plan for your startup.

While my latest business is still in startup mode, I haven’t had to spend any time going back to setup something I missed in the beginning.  Right now, I spend my time selling the services to potential customers. It’s exactly what I want to be and need to be doing.

Check out Donnelly’s Guidebook at Amazon.  Get the book.  Use the process.  Then, contact him to answer questions that still plague you.  It doesn’t get any easier than that.  Remember, you can always do things the hard way.  Why not take the time to give yourself a great start?

guidebook to planning

Ask Dr. Business – What is the first analysis an entrepreneur needs to perform?

In this week’s post, Dr. Business tells young entrepreneurs about the first thing they need to figure out when starting a business….and it isn’t what you think!

This week’s question:  What is the first analysis an entrepreneur needs to perform?

Dr. Business says:

You would think that anyone starting a new business would have a business plan – right? Wrong!

An even more basic is the need to develop a break-even analysis for their first year in business. When you consider that most entrepreneurs are using their own money and money that they have convinced relatives and friends to invest, shouldn’t they at least do some analysis as to how are they going to recover that investment, and at a minimum break-even for that initial year?

Every new business requires two levels of investment. The first just to get ready to do business, and the second the monies required to operate the business after you have opened the door. Even if you are only developing a new App, it costs money and time to develop and test the App. Then it requires more money and time to market the App. Hopefully, you will generate enough revenue from the App to cover these investments of time and money during the first year of operations. If not, then obviously you have lost money.

The question then is do you have enough money to continue the business? The statistics are that most new businesses fail within the first 12 to 18 months. Why is that? Primarily because there was no plan and as a result the founders ran out of money.

Let’s take something as simple as opening a bagel shop or pizzeria as an example. First, space has to be leased and constructed to accommodate the equipment required to make bagels or pizzas. Then, the equipment has to be purchased, installed and tested.  After which, the rest of the space has to be developed to accommodate customers, as well as adding a phone, fax, computer, and other equipment. This represents the initial investment just to be ready to make bagels or pizzas. Then ingredients have to be bought, employees hired, menu’s created, and some marketing and promotional materials developed to let prospective customers know you are in business. Once the doors are open, this second level of investments have been made, and will continue to accumulate as operating expenses.

Now the founders have to determine how many bagels or pizzas they have to sell every day, week, and month, to cover all the money that has been invested just to break-even, and is that possible? The question also remains “why should customers buy your bagels or pizzas, as compared to those of all of your competitors nearby”?

As this example illustrates, the planning that has to be done for any new business just to determine if it can break-even in the first year of operations is critical. It also demonstrates how easy it is for entrepreneurs to fail without doing this basic exercise before they begin.

Have you ever thought about how many bagels or pizzas your favorite bagel shop or pizzeria has to sell every day to make any money?

There is an old maxim: Nobody plans to fail…the just fail to plan.

Ask Dr. Business – Do I really need an MBA to start my business?

In this week’s post, Dr. Business answers the question about the need for an MBA to start a business.

Here’s what Dr. Business had to say on the topic.

The more education in business that anyone can get before starting a business is always a good thing. However, getting an MBA is not a prerequisite for young professional entrepreneurs who want to start a business. While all the courses they would take would help them with one aspect of their new business or another, MBA courses are really designed for those middle managers who want to continue to climb the corporate ladder, not start an entrepreneurial new business.

The exception to that is the MBA course on Entrepreneurship & Innovation that I teach. It is an elective and as such attracts MBA students who have an interest in starting a business, or at least getting to know more about all that is involved in the process. The primary deliverable in the course is the development of a business plan for an idea that they have had for a business for a long time. The value of the course for these MBA’s is that it gives them an opportunity to see if their idea for a business is commercially viable, or not. More importantly, they get to see how all the other MBA courses that they have taken contribute to managing a successful business in one way or another. Every year several of my MBA students in this course actually use the business plan they developed in the course to start a business.

There are a multitude of sources for young professional entrepreneurs to get advice and support. One of the best sources is the multitude of incubators and accelerators that are available now at many colleges, or affiliated with universities in one way or another. Colleges and universities also have successful alums volunteering to be mentors for would-be entrepreneurs. Lastly, there are a multitude of books that have been published and continue to be published on entrepreneurship and how to start and manage a profitable business. Success stories are also published almost every day in the business press.

The best advice I have for young professionals is to watch ABC’s TV show “SharkTank” to get a first hand view of how NOT to do it!

Join us next week when Dr. Business breaks down another burning question in the mind of the startup entrepreneur.

ASK DR BUSINESS – How do I brand myself as an entrepreneur?

In this week’s post, we ask Dr Business about branding ourselves as an entrepreneur.

Question:  How do I brand myself as an entrepreneur?

Dr. Business says:

“The most successful entrepreneurs brands are a reflection of themselves e.g. Steve Jobs was Apple, and Apple was Jobs. Likewise, Ralph Lauren is Polo and Polo is Ralph Lauren, and Bezos is Amazon, etc., etc. Typically, entrepreneurs create a solution for a problem that they have themselves and pursue the commercialization of their solution with a passion that is a reflection of themselves. So, in essence they are the embodiment of the brand that they create.

If we take Jobs as the classic example of an entrepreneur that actually branded himself as an entrepreneur, he did that by coming up with one wonderful solution after another to problems that consumers did not realize they had until he delighted them with one neat new electronic i device before the last one was fully adopted. In so doing he embodied the epitome of cool creations. Others, like Bezos and Lauren continue to introduce new ways to delight consumers. I would say that the closer you can come to emulating these entrepreneurs and others the more obvious it becomes as to how necessary it is. 

The bad news is that you can’t copy these great brands easily. You can, however, execute the basic strategy. You must focus on doing things better or, better yet, uniquely. Demonstrate a passion for the details of your business more than your competitors do. Develop innovative ways to communicate and connect with your customers. Circle back and improve the things that can get better, and replace the things that can’t with something else. Then repeat this over and over. “

If you have a specific startup issue, share your problem with us and we’ll have Dr. Business assess it.   Send us your challenges at info@blitzteamconsulting.com

The Prime Mover Inside the Entrepreneurial Mindset

Years ago, I read Robert Kiyosaki’s book, Rich Dad, Poor Dad.  The book does a good job of explaining the mindset that holds many people back from ever becoming an entrepreneur.  Ironically, Robert’s story compares the advice of his academic dad (i.e. poor dad) and his entrepreneurial dad (i.e. rich dad).  Robert suggests that working hard and earning good grades isn’t the best advice anymore.  Working for someone else won’t lead to financial independence, which is where you’ll likely end up by earning a college degree and hoping for a corner office in a big company.  You’ll find that the people you work for aren’t willing to give up the good life or share much of it either.  The biggest gains go to the shareholders.

I can attest to Robert’s concept myself.  My dad was the employee with the great work ethic who worked in the same company for over 30 years and I was the son with all the college degrees.  Neither one of us found financial independence that way.  Today, the young professional mindset is changing slightly.  Professionals are getting the college degrees and then chasing the entrepreneurial dream.  They are using both paths.  The downside is that most of the lessons they get from academia and the parents who haven’t owned businesses still lack some important truths about entrepreneurs.  Here are the truths that will help you understand the makings of the entrepreneurial mindset.

Don’t just think about it, do it.  All through college, you spend your time solving problems that already have answers (i.e. they’re in the back of the book).  If you brave the world of graduate school, you’ll likely solve problems analytically because you can’t really test your solution in the real business world.  I think all of the analytical techniques are great to learn and easily taught by academia but it forces you into a state of analysis when you run into a situation for which you don’t know the outcome.  In other words, the more educated you are, the less likely you are to take risks.  Why?  Because you’ll spend too much time estimating the risk rather than just taking it.  Risk can also result in failure which could damage your “I’m a smart person” self-image.  If you plan to be an entrepreneur, you need to get over this idea and develop the “anything it takes” self-image.

“Entrepreneurship is neither a science nor an art. It is a practice.” – Peter Drucker, management consultant, educator, and author.

You won’t figure it all out.  Most startups don’t create a business or marketing plan before they launch.  So they don’t have a good picture of what resources and effort are really needed for the initial phase.  This leads to considerable effort figuring out how to do many of the activities that must be completed.  Another factor that makes this overwhelming is that startups also begin with as little resources as possible, which forces you to spend too much time on what I call non-value added activities.  For example, if you plan to use social media as part of your marketing plan and you aren’t good at it, find someone to do it.  You need to spend your time selling and directing the business.  This is why you build your plans before you launch.  The other benefit of building plans early is that you can do this while working another job.  Then, you can easily step out and launch the business.  There are a lot of benefits to planning early and defining who will do what. Plan it first and use expertise where you can find it.

You will fail, hopefully.  Most startups fail, roughly 9 out of 10.  Failure is inevitable.  This is worth saying twice.  FAILURE IS INEVITABLE. The key to overcoming the failure, at least according to the 10% of companies that succeed at startup, is versatility and teamwork.  Challenges and setbacks are a huge part of success.  They often put you back on the right track.  Versatility is the possession of numerous skill sets among your team.  If you’re launching your company alone, your versatility will be limited.  You might consider building a team or getting a partner.  Teamwork will then become vital in rebounding from setbacks and failures.

“You may be disappointed if you fail, but you are doomed if you don’t try.” Beverly Sills, opera singer

Be a punching bag.  As a business owner, you’ll get feedback from customers, vendors, suppliers, employees and investors.  The majority of this feedback will be unfavorable.  The success of your business will depend on how well you handle it.  You can’t become aggressive and fight it.  You can’t just rollover and accept everything either.  Feedback is some of the best learning you can get and most of the time is offered to you at no cost.  Soliciting feedback is the ideal way to extract information about your product and how well it meets your customer’s needs.  This is key in getting them to buy your product.  So why wouldn’t you eagerly accept this advice?  Don’t let your passion and ego get in the way of growing your business and allowing others to help you do it. You’ll grow faster that way anyhow. Just remember, every blow you get will only give you more information on how you are doing and will help you find ways to improve.  If you’re unfamiliar with making feedback actionable, check out this article at Entrepreneur.com.

Don’t make all the decisions.  Just as we discussed above, you’re not going to be able to provide all the answers to your questions, but you are going to feel compelled to answer them.  It’s your company after all.  Well, if this is what you’re going to do, you need to create as many habits as you can.  These habits will save you time so that you can focus on the tough problems.  One of the most important habits you need to develop is to reduce the number of decisions you make, especially the little things.

Even President Barack Obama avoids making the little decisions that don’t usually mean so much to the success of his business.  “You’ll see I wear only gray or blue suits. I’m trying to pare down decisions. I don’t want to make decisions about what I’m eating or wearing. Because I have too many other decisions to make.”  Focus on the major value adding decisions and create habits that don’t steal your time.  Again, this is best accomplished when it is laid out in a business plan.

There’s nothing easy about being an entrepreneur.  Those that can’t handle it become employees.  It’s not for everyone.  If you’re considering it, it’s critical that you establish the right mindset.  Remember, entrepreneurship is a journey, not an event.  It will be difficult and all consuming.  It will eat everything you have (e.g. time, money, energy, passion, drive, attitude) if you don’t adopt the right mindset.

Ask Dr. Business – How do I know if I want to be an entrepreneur?

This week’s question:  How do I know if I want to be an entrepreneur?

Dr. Business:  Everyone has an idea for a business, but not everyone can be an entrepreneur and convert that idea to a commercially successful enterprise. Why is that? Primarily because the concept of entrepreneurship is inherently about taking risks, and most people are risk averse. Additionally, not all of their ideas are viable enough to be profitable, or there just aren’t enough customers, the cost of making it happen is beyond their means, etc.

Another major requirement for success as an entrepreneur is a deep rooted passion to the extent that it consumes them. Entrepreneurship can be a long hard road to success.  Passion for your purpose is vital.

Lastly, is the lack of experience in running a business. For all these reasons, I require the students in my course on Entrepreneurship to develop a business plan to see if their idea is commercially viable and to help them understand what it will take in terms of time, money, and pain to start and manage an embryonic business. It’s an exercise that can save them from themselves. The popular show “Shark Tank” is a wonderful platform for anyone wondering if they want to be an entrepreneur to observe what happens to would-be entrepreneurs and their ideas.

Ask Dr. Business: What classes can I take on Entrepreneurship?

This week’s question:  What classes can I take on entrepreneurship?

Dr. Business:  Many colleges and universities have courses on entrepreneurship. They are good to gain a fundamental understanding of entrepreneurship, but they need to be supplemented with some hands-on practical experience to achieve a better understanding of what it means to be an entrepreneur.

In my MBA course on “Entrepreneurship & Innovation”, since I am the epitome of an entrepreneur I share with my students what I have done and I am still doing of an entrepreneurial nature to give them a real life flavor for what’s involved. In addition to that I have selected three course deliverables: (1) develop a paper on an entrepreneur outlining what problem they identified, the solution they developed, and how they raised enough money to implement the strategy that has made their business what it is today, (2) select a relatively new website created by an entrepreneur that they currently use and get value from, and present it to the class explaining how it has evolved, and (3) take an idea that they have for a business and develop a business plan to determine whether or not it can be a viable, profitable enterprise. This project is an invaluable learning experience for any would-be entrepreneur.

As a result of taking my course, on average, several of my students have started their own businesses every semester. This blending of my actual experiences as an entrepreneur, the study of other entrepreneurs, and the actual exercise of constructing a business plan on their own idea, has proven to be a model for success in terms of teaching the concept of entrepreneurship.

What’s your question for Dr. Business?