Once upon a time…

Sam was worried about his electrical supply business, and rightly so.

The initial burst of growth over the first three years of the business had halted in the fourth year and in the fifth his sales and profitability were now going backwards.

Fast.

Sam urgently needed more bank funding to keep the business afloat until he could drum up some more sales.

So he first met with Pam, his CPA, to complete a loan application and she started the meeting by reviewing the business’s financials.

“Not pretty” she observed.

“Agreed” said Sam.

“But I can’t figure out why we’re in free fall. Sure the GFC had an impact but we actually grew in the early stages of that buy now we’re going backwards. And I really need this loan so the business can survive the drought we’re going through at the moment.”

An uneasy pause filled the room.

“Do you have a business plan Sam?” Pam asked, even though she knew the answer.

Another uneasy pause.

“Er… not as such” replied Sam.

“Well that may explain why your business is in decline. The importance of a good business plan is one of the fundamentals taught at every MBA college and if you hire any business consultant worth their salt it’s one of the first things they’ll want to put in place. Besides” she continued, “the bank’s going to want to see a business plan including your financial projections before they’ll even think about giving you a loan”.

Sam could see the logic of Pam’s argument but protested: “Okay but I’ve got no idea how to do a business plan, let alone financial forecasts. Frankly, that sort of stuff gives me a headache.”

“Well naturally I can help you with the numbers side of the plan. And as for the rest of it that’s no problem either” said Pam as she reached for the stack of business cards in her top drawer and handed one to Sam.

“This guy’s a friend of mine but that’s not the reason I’m referring you to him. He’s not only got an MBA he’s also a qualified business coach and he knows how to put together a plan that’ll impress the socks off the loans officer at your bank.”

Sam took the card, called the coach and they all lived happily ever after…

… not.

Quite the opposite in fact.

Sam met with Rudy, the business coach, who explained that yes, he could help but that he’d need $2,500 up front each month.

Sam didn’t have that sort of cash to spare so he paid with one of his credit cards and made a mental note to apply for another credit card, just in case he needed it to fund Rudy’s fee in the upcoming months.

After all, according to Pam and Rudy, getting that business plan sorted was not only the key to better business performance, it was also critical to getting the business growing again.

After a stressful couple of months, the business plan was completed, the loan applied for and thanks to the impressive chart in the plan which showed an upward trend in sales and profitability, the loan was granted, albeit with onerous monthly repayment conditions and the requirement for the inevitable noose-tightening personal guarantee.

On the one hand the loan brought Sam some breathing space but on the other he was more stressed than ever.

Sure, he’d paid off most of his outstanding creditors but how the heck was he going to service the loan repayments?

“Not a problem” said Rudy. “All we need to do is implement the plan. We’ve done the hard yards. You’ve now got a mission statement so you know what your purpose is. And you vision statement gives you a clear sense of long term direction. Also, you’ve now got that great looking wall plague that tells your team what your business values are.”

“Well, ah… yes” said Sam, shifting a little uneasily in his seat “but how is that going to get me the new clients and the sales I need?”

“Whoa, steady on Sam” said Rudy. “Sure we need to get some marketing happening but first we need to make sure your staff Position Descriptions and your supplier agreement are updated. After all, there’s no point in getting new clients in if you’re not well organized in the back room”.

Sam thought a moment.

“Well okay. You’re the expert Rudy and you come highly recommended from Pam so I guess we better get started with the paperwork huh?”

Rudy and Sam worked together for another four months putting Human Resources and supplier systems into place, holding team meetings, recording agreed actions, reviewing the financials (which continued to deteriorate) and creating quality control checklists and documenting other systems.

But after a total of six months of headaches and extra hours, Sam finally had enough.

And at their next meeting he let Rudy have it.

“Rudy I’ve now spent fifteen grand with you and after six months of blood, sweat and the occasional tear, I still don’t have any more clients and not even one additional sale to show for it. It’s like my ship is still sinking and all we’re doing is straightening the proverbial bloody deck chairs!” he protested.

Rudy was ready for this.

Sam wasn’t the first client to express such a concern.

“Hey Sam, relax. You’ve come a long way and now we’re ready to start the marketing. Don’t give up yet, we’re just about there. We’re going to redesign your Yellow Pages advertisement, get you onto Facebook and start your Blog. After all, most marketing is going on-line now and so of course we need to get your website made over as well. Also we need to do a review of your product range, complete a customer satisfaction survey and we should probably hire a research firm to find out what the market place really wants. All that’ll give us a whole lot of valuable information that we can use in our marketing.”

At that point Sam exploded. “Are you freakin’ crazy Rudy? That’s going to cost me a small fortune and it’s gonna take even more months. I’m struggling as it is and if I don’t get new clients in soon I’m going to have to shed some staff or shut the doors.

Rudy, it’s time you left. We’re through.”

Rudy didn’t mind too much. He’d seen this before. And after all, he’d still banked fifteen big ones.

Sure, it was a shame that Sam didn’t ‘get it’. “But I mean, what does he know?” Rudy thought. “I’m the one with the MBA and I’m the one who earned my business coaching diploma with first class distinctions.”

—————-

Unfortunately this sorry story, or variations on its basic theme of wasting money on BS theories that don’t put money into the business account, has been repeated hundreds of thousands of times the world over.

It’s the classic anti-entrepreneurial mistake of putting management ahead of marketing.

Not that management is unimportant, it’s just that there is nothing to management until the marketing is working.

And so that leads us to the moral of Sam’s story which is that it’s effective marketing that makes the difference, not a business plan and not any fluffy stuff such as Visions, Missions or Values statements.

And no matter how exciting they may look, no amount of upwardly trending growth charts or row upon row of increasing dollar amounts will make one fig of difference in your business.

And even if your product or service is terrific and your clients love you, that’s also not the thing that will make or break your business. The history of commerce is littered with millions of businesses that had a product or service that was good enough or even great but that went broke because they didn’t invest enough focus into developing and refining systems that would bring in a steady flow of new clients.

To paraphrase the pragmatic and ever-inspirational Ed Johnson:

“They say that if you build a better mousetrap then the world will beat a path to your door. The hell they will. It’s the marketing that makes the freakin’ difference.”

Summary: once you’ve got a product or service that people like, stop messing with it and forget about management initially. Instead, Make the time to continually grow your “Marketing Muscle” and then flex it every day of the week.

Once you know how to get people buying your stuff, then, and only then, should you start messing with the management side of your business.

How can you build your marketing muscle? Simple… If you want to grow a physical muscle you need to do two things: feed the muscle the right diet and then exercise it.

And it’s the same with growing your Marketing Muscle: feed your mind the right diet of proven marketing ideas and then exercise the muscle by implementing those ideas.

Then, and only then, you may live happily ever after…

Most people find creating a business plan one of the hardest things to do when setting up a business but it doesn’t need to be. Like everyone else it’s not one of my favourite things, so I decided to look of ways at making it easier. Having written and reviewed many plans over the years I discovered that if you have the right formula then the planning process becomes much easier.

This article is dedicated to explaining the right formula and giving the 3 key steps for easy success in writing business plans.

1. Find a template

Don’t try and do it all yourself. There are now loads of templates on line so that you at least have a starting point. It can be as basic as a word template or you may move up to a sophisticated on line tools. Whatever your preference this resource will enable you to at least start with the end in mind

2. Get an industry specific sample template

It is now easy to find sector specific templates and ones which have a sample filled in. Imagine if you have a photography business and you have a business plan template with a sample business plan of a photography business. I guess this would speed up the process of doing your business plan. It certainly has with mine. Make sure the template has the following elements

Executive Summary: Overview summary of the strategic objective of the business. Typically looking at 1-5 years and should be no more than 2 pages as it should be an overview of the rest of the document and give a clear picture of your business.

Company Description: Legal establishment, history, start-up plans, etc.

Product or Service Analysis: Describe in some detail the different services or products you have and how these will specifically benefit the end user – the customer.

Market Analysis: This should include market stats, segmentation of market based on your products/services, who are your target customers and how are you going to market to them.

Strategy: Make sure it’s Specific.Measurable.Achievable.Realistic.Timed/trackable. What is the strategy and how are you going to achieve it, using what methods.

E- Strategy: These days whether you are an eBusiness or not then I would suggest you need to have some king of strategy. Even it is a s basic as just discussing your website, development costs, content and target audience

Management Team: Who are your key management team members and exactly what are their responsibilities. How will they be measured.

Financials: Probably self explanatory but you need to cover projected budgets and sales, cash flow, profit and loss and balance sheets. Again there are really low cost and in some cases free software which can help you set all this up. Even better they will also track the information and help you build manage your invoicing procedure

Now hopefully you know more about your business than anyone else so filling in these sections shouldn’t prove difficult. Make them information simple, clear and action based. However never be afraid to delegate, it doesn’t have to cost much, find someone who is a better writer than you, give them the template and the information and let them loose. (of course make sure it is someone you implicitly trust )

3. Review – the idiot test

Once you have completed the document get it reviewed by someone who doesn’t understand the business, if they can understand it then you have written a clear, concise business plan that will work.

Kicking & Screaming

Most business owners and department managers know they “should” have a plan. Yet in all my 25 years of helping business owners and managers grow their businesses, just four of my clients possessed a written plan, and only one was actually using it. Why do so many business owners skip this crucial step? Some common explanations I’ve heard go something like:

• “I don’t need funding, so I don’t need a business plan.”
• “My plan is going to change anyway, so why should I waste my time creating it?”
• “It will take too much time.”
• “I started to and found it overwhelming.”
• “I didn’t start a business to do the types of things I did when I worked for someone else.”
• “I don’t want a big company. I don’t want employees.” (I just created a J.O.B. for myself.)
• “I don’t know which planning program to use; there are so many out there.”
• “It’s expensive to plan and I need to spend my money on other things.”
• “I don’t need to plan; I just want to work in my business.”

Does any of that sound familiar? For the most part, “winging it” from day to day works-until it doesn’t. Many business owners learn this the hard way. Whether at the $60,000 per year income level or at the $30 million level, without a plan, a business or its owner will eventually crash. Owners or managers will often agree to use a plan if someone else creates it for them. That’s a BIG no-no in my book. It’s important for business owners to gain the experience of the planning process. At least once, they must tackle the questions they’ve put off answering. Otherwise they run the risk of never gaining real clarity regarding the direction of their business.

The Care and Feeding of Business Owners & Managers

As the old saying goes, “You can lead a horse to water, but you can’t make it drink.” Clients who come to me for help with their strategic plan are often feeling a “pain”. It is a common experience, often necessary to compel them to take a “drink” from the strategic planning process. Here are a few common “pains” my clients have reported:

• They’re not attracting their ideal clients and are sick and tired of working with jerks.
• They need to be making more money.
• Their spouse informed them that if they don’t spend more time together, they’ll file for a divorce.
• Their spouse wants them to get a “real job”.
• They’re retiring from a job in “x” years and want to have an immediate income at that time.
• They’re retiring in “x” years and want all the work, time, and money they invested in their business to be their nest egg.
• They’ve discovered that a business isn’t just a place to work, but an entity to grow.
• “Someone” told them they had to create a plan.
• “Someone” told them that their marketing is “all over the place”.
• They need help managing their company or department.
• They became an “accidental” business owner or were promoted suddenly, and need help fast.
• They’re turning 50 and want to examine the next 30 years of their business with someone who isn’t as vested in the business as they are.
• They want to work one day per month because they want to start a non-profit.

These and many other possible “pains” or problems will hopefully lead a business owner to re-evaluate the need for planning. But where to begin? The task of planning can seem monumental. Luckily, there is a one-page process which makes planning not only exciting, but simple and straightforward.

When the Light Bulb Flickers

When someone seeks my services, they often need more clients, better clients, or more money. In determining what is hindering their growth, we find they have no vision, mission, objectives, or strategies written down. They usually have no action plan, marketing plan, or financial plan, either. Here are some reasons they’ve given for finally taking the planning plunge:

• “My original business vision was thrown to the wind and all I’ve been doing is looking at ‘today’.”
• “I realized that the business I envisioned is not what I have, and I don’t like the business I have.”
• “I read Michael Gerber’s The E-Myth Revisited and realized I need systems.”
• “I’m getting older. I want to get top dollar for my business in (5, 10, or 20) years, and I know I need to have a turn-key business. My business is anything but turn-key.”
• “I’m getting bored of running my company, and want to get it ready to sell/hire a CEO.”
• “I have tried to grow my business for the last two years and what I’ve done isn’t working.”
• “I want to start my business right; I know I need a plan.”
• “I want to earn more money.”
• “I’m frazzled. I network and market all the time and am not seeing the results I once saw.”
• “I am creating a new position within the company. I need to bring the concept to my boss in an organized way.”
• “Although I work for a company, I’m paid on commission, and I need a plan to expand.”
• “I want to open a branch office, but I can’t see having two unorganized offices. I need the first office organized, and systems created before I start the second.”
• “I don’t like my business model but don’t know what to change or how to do it.”
• “My business does not have an inner brand, niche, or focus.”

Back in 2000, with a year-old business of my own, I had the opportunity to attend a one-day planning program which helped me to create a plan on a single page. This plan would encompass all of the plans mentioned above. As a participant, I realized the importance of planning strategically before attempting execution or implementation. Today, my clients use that same methodology to bring greater success to their businesses. And when someone wants me to create the plan for them, I do it with them. My clients are present during the process, learning a system that can be reused in the future to make their lives easier-and more profitable-in the long run.