Category Archives: Business Planning

Stay Focused

In this age of ever-changing technology, it is more easy than ever for a business owner to lose focus. Yet it is even more important that you stay focused on your business to avoid being side-tracked.

The new insurance mandates from the federal government are a good example. Most business owners know that changes are coming, but have little comprehension of what those changes mean to them. There will be workshops and seminars and E-mails about the changes, including the implications once a more clear picture is developed. Either way, this mandated change will require time away from your business and your customers.

So how do you stay focused?

If there is someone on your team you can dedicate to learning the ropes about the insurance laws, get them on it now so they have time to gather the information and assimilate it. Their challenge is to ascertain how it will impact your business and employees, if at all.

Another option is to rely on professionals you trust who are up on the changes, such as your CPA, legal counsel, tax preparer, financial planner, or insurance agent.

The 3rd option is to spend the time to understand it yourself. Certainly the first two are better choices.

Another distraction facing business owners are employee issues. It would be a perfect world if every employee showed up on time, knew what they were supposed to do, exceeded those expectations, and spoke highly of the company all the time. If it were a perfect world.

So how do you stay focused?

It is improbable to think that employee issues won’t arise in your company, so the key is to be prepared for every eventuality. Have a professional such as legal counsel prepare an employee handbook that stipulates employment conditions, expectations, and consequences. Relegate that responsibility to your human resources department if you have one, and make sure they take time to keep you apprised of their actions. You’re the one with ultimate legal responsibility – along with your Board of Directors and others with liability.

What is critically important when it comes to these types of issues as well is how clearly you convey the company’s mission to employees and share your vision with them. The more closely they are aligned with your line of thinking, the more productive they are likely to be.

Your business plan and market strategies are also methods that enable you to remain focused on your objectives.

Cats, for example, are hunters. When they have identified potential prey, they are focused on getting that prey over everything else. They will stalk, crawl, sneak, pounce, or chase that object of desire until it’s caught. They are focused. When the prey is caught or becomes unattainable, the cats move on to other tasks.

Your business and marketing strategies identify your target consumers, what you will deliver to them, how and why. Your company should be focused on accomplishing that objective. If you lose sight or interest in that goal, it’s easy to move on to other tasks and later wonder why the business failed … or you went hungry in cat language.

Professional consultants are there to help you stay focused.

Why Are You In Business?

As business owners, one of the tasks we often overlook is to stop and think about why we’re in business. Sure, we know we have to market, sell, produce, and deliver our product. That’s a given. Why we do what we do gets short shrift in the process. That can have an impact on the entire operation of our enterprise.

Perhaps the most critical element in our business is the reason we are in business to begin with. Some of us started our venture in the hopes our children would have an interest and want to take over some day. Some got lucky and found a niche that hadn’t been filled yet and are now the cat’s meow in that industry. Quite a few Baby Boomers want to enjoy their retirement doing something they’ve always wanted to do. Why did you get into the business you’re in?

Here’s why the answer to that question is so important, and worth revisiting every six months or so: The reason you are in business becomes your mission, and your mission is conveyed to your employees, customers, and the public as the vision and public persona (if you will) of your company.

That vision becomes the engine that drives your business. As you will find in the Small Business Owner’s Guide to Marketing, your mission defines the products and services you offer and to whom you offer them. It clarifies your position in the market and identifies strategies for marketing what you do to the consuming public. And, as you look at it in terms of your life’s contributions, it also outlines an exit strategy for eventually getting out of the business to enjoy retirement.

You may think retirement would drive you crazy, but your spouse may want you to reconsider that option. That’s another reason to think about why you’re in business today.

Take the time to think things through.

Will Your Great Idea Fly?

If you have a fabulous idea for a new business or an expanded product line for your existing venture, take some time to think things through before you invest a lot of time, money, and emotion in moving forward. Why? Research has shown that roughly one out of every 50 business ideas is commercially viable.

How can you find out if your idea will generate revenue, be accepted by the consumer, and be profitable?

The best method is a feasibility study.

Although there are many types of feasibility studies, and some you can be do by yourself, it is best to employ a professional consultant to assist you. The person conducting your feasibility study should be an independent, third party consultant without a vested interest in your project or concept. That enables them to retain impartiality and look at your idea from two main perspectives: 1) Will the product or service be accepted by the consumer, and to what extent?; and, 2) Will the product or service be profitable and generate a positive return on your investment, and when?

Having someone doing the business and market research independently removes the emotional aspect of your project or idea. You have come up with the concept, sketched out ideas, thought about names, and become emotionally attached to the idea. This is good, but should be reserved for after you’ve determined whether the concept is commercially viable.

What does a feasibility study consist of?

1) A major aspect of your feasibility study is determining if there is a viable market for your product or service. You need to know more than who is likely to purchase the product. You need to understand where those consumers are in terms of their buying power, repeating purchases, personal preferences, and the media that will influence their buying decisions in a positive fashion, among other information.

2) A second major aspect of a feasibility study is the financial viability of your idea. What will be the costs associated with producing the product or delivering the service, including manufacturing, staffing, packaging, selling, administration, and marketing, among others? What will the market bear in terms of pricing? At what point, if any, will the business break even and start generating profits.

The key to the financial perspective is being realistic in determining the projections. Similar to thinking “everyone” needs your product or service is the thought that you can sell 20,000 widgets for $25 apiece when the industry has been successful selling them at $15 each. You may stick with that projection, but will have to justify the $10 per unit difference to someone, including the consumer.

3) Other aspects of your feasibility study look at the overall economic conditions, how many jobs will be created or needed, the management structure of your venture and whether you have the experience required to manage the operation.

In short, a feasibility does cost you some money but in the long run it can save you money, time, and the heartache of failure. It becomes a matter of knowing how much you are willing to invest to determine if your idea is commercially viable.

Consider this: Would you rather spend $10,000 and two months to learn the idea isn’t commercially viable, or invest $200,000 and two years of sweat equity to discover the same outcome?

The role of the consultant in the process is to present every aspect of your idea in a fair, impartial and unbiased report so that you can make an intelligent decision. Whether you elect to move forward with your concept or send it to the trash bin is solely your decision.

That decision is best made from a business perspective, leaving emotions aside. Once you have made a decision to move forward, emotions must come back strong as you will need to invest your heart and soul in your exciting new venture.

Ask Brand Irons about their experience conducting feasibility studies.

Are You Riding On The Right Trail?

Image of a typical cattle drive from Harper’s Weekly magazine, circa 1867

Is your business heading in the right direction?

Think about that for a few minutes. If you have a clear objective for where you want your business to be in 5 or 10 years, you can be relatively secure in knowing that your company is headed down the right path. Granted, economic conditions may change in three years. Government intervention may lessen in six. Market conditions could change tomorrow. The goal is to know which trail you want to ride, stay as close as possible to that route, and be ready for obstacles along the way.

The trail boss hired by ranchers in the late 19th century knew which trail he needed to use in driving the cattle to the markets in Kansas or Colorado. Depending on the season, he anticipated weather conditions such as the rains the cowboys might encounter. There were strategies in place to keep the herd healthy along the way. Heavy rains might force them to hold tight for a few extra days to let the swollen rivers subside before trying to cross. Dry weather might cause them to slow the pace but keep moving until they could find water and grazing grasses.

Your business should be prepared for the conditions it will encounter along the trail, too. A warmer than normal winter might reduce your snow blower sales, so reducing your inventory is a potential strategy to keep your expenses down. Is your sales force moving products with the highest margins? Have you analyzed whether the market has changed for that product, or the service that generates the highest profits?

Allow me to share a classic example from the optical industry that I am confident is repeated in other industries: A super sales person is at the top of her game and generating substantial commissions from the volume of sales she brings to the company. The boss (or sales manager) looks at how much this sales person is getting in commissions and believes that she’s earning way too much. She gets called in to the office and is told her territory is being reduced and/or her percentages are going to be cut back because she’s “costing the company” too much money.

Stop and think about this all-too-common scenario.

A sales representative sells your products. That creates orders which generate revenue – and profits – from the sale. The representative earns a commission for bringing business in the door. You want more sales, but at less cost to the bottom line or, as the reality points out, at the expense of the person responsible for manufacturing those sales. Ever wonder why so many sales people leave a company they appear to have been doing well for? Ask them if their percentages or territories were cut back. I’ll wager the answer will be “Yes.”

If you’ve really thought about it, the opposite scenario should be the rule. Expand your top sales representative’s territories. Give them a better percentage to generate more business … unless you don’t want more business!

The company who lost that stellar sales representative is now, two years later, wondering why their sales are down and why their competition is doing so well. Guess where she went to work as an in-demand sales representative?

Your business needs to be clear-headed and focused in its direction.

Brand Irons is one of those companies that can help you determine if you’re on the right trail. If you have a business plan, take a look at it and see if it still makes sense to be going in that direction or if a new path is worth investigating and developing. If you need a strategy for your business, it’s to your advantage to bring in an independent, third party perspective to ensure it’s appropriate for the market and to advise on which trail may be the most lucrative and profitable over the long haul.

Imagine how the buyer might react if a trail boss brought in a herd of camels to be sold at the cattle market. All that effort for naught.

Developing A Game Plan

The professional football season has arrived! As the harbinger of autumn, students returning to school, and fall sports, football season also reminds me that business owners need to have a plan for their success.

When you see a coach on the sidelines with his play chart, it’s easy to think of that as a cheat sheet. In reality, it’s the result of hours of preparation and planning. The head coach and his assistants have assessed the talent of their players and considered their options for every possible scenario in a game situation. They know that if the offense faces 2nd down and 15 yards from their own 35 yard line, they can bring in four wide receivers and execute a 20-yard sideline pass to get the first down. If they fail to execute and it’s 3rd and 15, there’s another play – perhaps the same one – that is in the plan.

You need game plans for your business and your football team.

Yet it all comes down to the basics – the line needs to block. The quarterback needs a few seconds of time to spot and hit a receiver who’s going to be open.

Your business, to ensure growth and a positive bottom line, also needs a game plan. Sure, you can jot down some thoughts on a cocktail napkin, but planning for success is a team effort. Your front line employees must know their assignments, especially as they pertain to taking care of the consumers (opening the holes to make the sale). Your production team must be prepared to meet the demand and generate results. Your marketing crew needs to position your efforts to satisfy customers while putting profits on the bottom line (touchdowns – points scored).

Success in business, as in football, is a team effort. A big difference in business is that your opponent seldom changes, whereas in football you face a different team each week. It’s all in the preparation.

A parting thought: Remember that part of your business plan should include how you deal with adversity, negative press, or economic downturns. You may say you will let the chips fall where they may, but it makes more sense to know which ones you can pick up and which ones should be chalked up to a learning experience.

As an independent, third party consultant, bringing in a consultant such as Brand Irons can provide you with an emotion-free perspective that puts teeth in your business plan. it also gives you a consumer’s point-of-view about the perceptions of your business that can prove beneficial in dealing with adversities.