Who Needs a Business Plan?

Do you create a business plan each year?  When I ask this question of clients, I will regularly get a chuckle or roll of eyes before I get that reluctant, “yeah, I do.”  The reason for the response is universally that the client DID it, and then promptly put it into a drawer.  A few will proudly admit that they pull it out once a quarter (or sometimes more frequently) and review it, but very few can say they live their business plan (or their goals).

 It’s that time of the year (beginning of the 4^th Quarter) to work on your business plan for next year. Your business plan is probably the most important part of your business, but it has to be living and breathing, monitored and adjusted.  And in its most basic format, it is easy to do.

 Let’s say you told me you are going on vacation.  The first question I would ask is “where?”  I doubt you would say “well, I’m just going to get in the car and start driving.” What are the chances of you getting anywhere? You would not only be able to tell me where you’re going, but how you’ll get there, how long you’ll be gone, how much it will cost, how long it will take you to get there, what you’ll be taking along, who you are going with, etc., etc.  In other words, you carefully plan your vacation.

 So why is it you don’t just as carefully plan your business?  A well crafted business plan designed to make you successful will also keep you on track, be your roadmap (or GPS), and relieve stress.  But even a simple business plan will give you direction, and when used correctly provide so much more for your business.

 The three basic rules to creating a business plan are:

• Start with the end in mind
• Work backwards
• Break it down into smaller pieces

 Start with the end in mind – How much do you want to sell this year? I am not talking net profit at the moment, but gross sales.  Make that decision (See Smart Goals blog article), and don’t be shy.  Be realistic, but it’s no fun unless the number is high!

 Work backwards – Small children go through a learning phase where they constantly ask “why?”  You need to keep asking “How?” Starting with the end, that question will set the steps before.  Each step should also have a “how” attached, and keep going until you get to the most basic “how.”  This identifies your SWOT (strengths, weaknesses, opportunities, threats or challenges.) You may look at a “how” and think to yourself “but I don’t know how.” More on that in a paragraph…

 Break it down into smaller chunks – Time plays a big part in a business plan.  If everything has a deadline of December 31, you will not even look at it until December 1, then shake your head and say “no way!”  So break the steps into shorter or smaller increments, with interim dates.  $1 million in sales for the year is $250,000 per quarter, or $83,333 per month, or $3,846 per day (five day week). Less than $4,000 per day sounds a lot easier to achieve than $1,000,000!  Working with each “how” above, set dates for accomplishment.

 As you go through this exercise, you will discover what extra tools, knowledge, personnel, equipment, or whatever you need to achieve the goals in your business plan.  Excellent!  How are you going to make that happen? Is it something you can do or does it make sense to hire some one to do it? Something you can learn, or delegate for some one else to learn.  These answers become part of your business plan as they are an integral step in staying on target.

 A more robust business plan will certainly improve your business skills and bottom line, but if you at least get this far, you will see a difference.

 The most important step in this exercise is to take this finished plan and place it somewhere to look at everyday.  One of the best places to put the plan (besides hanging on the wall of your office) is to purchase a desk calendar, and transfer the “small chunks” to the calendar.  You will be much more likely to accomplish something on your calendar than on a list somewhere.

 For a free business plan template or goals worksheet, please email me at jbyron@dmbgroupinc.com and I will be happy to send one to you.  Don’t let another year go by without a thorough plan!

Clouds in the Sky are not Smoke in your Eyes

by Sherry Matteson, M.A.

Smoke in your eyes is disorienting and debilitating, to say the least. Whatever you were doing comes to a halt. With diminished vision comes uncertainty and the reaction to uncertainty is generally to stop action. A cloudy sky can have a similar effect in that we don’t know if a storm is coming or simply a quiet rain. The uncertainty of our economy is like clouds in the sky. Unclear, yes, but it is not smoke in your eyes.

Without knowing the decisions our government will make, which if known, might give us a sense of security in our own decision-making, our waiting and inaction becomes paralyzing. Motivating ourselves to try something new, or to get on with innovation seems tough when the rules of the game are up in the air. Uncertainty is one of the primary reasons that people resist change, and this resistance often leads to failure. However, the certainty we are looking for is not really all that certain, anyway. We must  move to adapt and create our own version of certainty. Part of its creation is designing our businesses to be flexible , constantly monitored and adjustable as we go. Have you created all that is necessary to do this in an impeccable way in every aspect of your company?

Its true that perfect clarity is not always possible, and leaders are not always in control of events and outcomes. However, this does not mean that all the action should stop. As a leader in business you can provide Certainty of Process. When the world at large is seemingly in chaos, you do not have to follow suit.

Excellent leaders will continue to:                                                                              

•  communicate                                   
•  invest in relationships                                                                                                  
•  improve                                                                                                                   
• remain true to principles                                                                                               
• forge new alliances

These actions can make the difference between getting stuck and emerging triumphantly. Providence steps in to help those who do not stray from their goal.

Clouds will eventually give way to clarity.

As a cloudy sky gives way to the sun once more and the wheels of commerce begin to turn more rapidly, how would you like to be positioned in your industry? What aspects of your company require development now?

• prof it performance and financial controls
• productivity and employee incentives
• customer loyalty and quality assurance
• leadership development and succession planning
• sales and marketing implementation
• technology systems

Now is the time to shore up your systems, policies and procedures for the future, regardless of what it holds. The only thing we can rely upon 100%, is Change.

How we weather change determines our success.

 

Generational Transition

by  David M. Barry, CEO

dMb Group Inc.

        Take a quick look at the picture and what do you see?  ”Old School Business”  of course.  Perhaps it would be better viewed as the  “Business Foundation.”  All multi-generational companies were started by the true Entrepreneur, the risk taker or the product developer.  So why would some make it and some struggle?  Of course that would depend on which member of which generation you ask.  But in truth, what we have found with our clients going through this process is that there is a tendency to over complicate the transition. However, there must be a plan for the process.

So you want to hop into the CEO seat, semi-retire, but still keep an eye on your new President?  Well that would seem to be a natural business event.  At this critical juncture all organizations, big and small,  must understand that change can be uncomfortable.  So “Old School” and  “New School”  have to ask tough questions.

For the Founders, the goal would be to create a legacy and a source for lifetime income.  But of course the founder must be open to change.  Adjusting to delegation in business takes a certain amount of humility and guts.  Imagine if  Henry Ford had said “This company will run this way till I’m gone!”

This would never have happened!

    

For the “New School”, heir apparent so to speak I suggest you take the time to reference  Inc. Magazine, May 2011, “Are you CEO Material?”

Succession planning is serious business, especially in closely held companies where the long-term survivability will affect multiple generations. The younger management should take to heart the various questions in the Inc. Magazine article.

We have found that companies in the midst of succession planning focus heavily on the logistics of change as opposed to the culture of change. So I would ask the founders the following questions:

1. Understanding that your Son or Daughter will now be managing peers or perhaps employees who watched them grow up, have you empowered them with knowledge and expertise that will elevate them in the eyes of the employees?

2. Has the company adjusted the daily practices to make sure modern and current business practices are in place? A major pitfall can be the assumption that these practices will be developed by the next generation of management.

3. If income stream is expected, does your Company have tight internal controls so as to make adjustments to fixed burden and cash requirements forecasts?  Remember, you are creating additional fixed burden that the company has never had before.  Can you seamlessly adjust for the ramifications of the new financial pressure?

 And Finally               

“The Teacher Will Appear When the Student is Ready” 

Don’t assume the next generation is as driven as you were or  as big a risk taker.  Make sure the “school” is modern and the “textbooks”  relevent.  Most founders of companies learned by DOING!  The second and third generation should have the luxury of adapting and growing.

So to the founders, I would say step back, enjoy because you planned it and earned it.

To the new leader of the Company I would say congratulations and don’t forget to say “Thank You.”

Are You Ready ?  

Do You Set SMART Goals?

A key part of achieving your goals rests in the goals themselves. They can’t be too lofty, or too simple, and it’s smart to give yourself reasonable deadlines. Here are some guidelines to follow as you create your strategic business plan:

         Specific
         Measurable
         Attainable
         Relevant
         Timely

Specific - A specific goal has a much greater chance of being accomplished than a general goal. Be precisely detailed.  Make sure the goal is specific to one item.  Use the categories of financial, production, career and personal as a way to keep focused specifically on what you want to achieve.

EXAMPLE:    A general goal would be “Make more money.”  A specific goal would be “Make $275,000 in net profit in this fiscal year.”

Measurable - Establish concrete criteria for measuring progress toward the attainment of each goal you set. When you measure your progress, you stay on track, reach your target dates, and experience the exhilaration of achievement that spurs you on to continued effort required to reach your goal.

To determine if your goal is measurable, ask questions such as……How much? How many? How will I know when it is accomplished?

Attainable – When you identify goals that are most important to you, you begin to figure out ways you can make them come true. You develop the attitudes, abilities, skills, and financial capacity to reach them. You begin seeing previously overlooked opportunities to bring yourself closer to the achievement of your goals.

You can attain most any goal you set when you plan your steps wisely and establish a time frame that allows you to carry out those steps. Goals that may have seemed far away and out of reach eventually move closer and become attainable, not because your goals shrink, but because you grow and expand to match them. When you list your goals you build your self-image. You see yourself as worthy of these goals, and develop the traits and personality that allow you to possess them.

Relevant – To be relevant, a goal must represent an objective toward which you are both willing and able to work. You will accomplish what you value most.  But be sure that every goal represents substantial progress. A high goal is frequently easier to reach than a low one because a low goal exerts low motivational force. Some of the hardest jobs you ever accomplished actually seem easy simply because they were a labor of love.  Your goal is probably relevant if you truly believe that it can be accomplished.

Time-Oriented – A goal should be grounded within a time frame. With no time frame tied to it there’s no sense of urgency. If you want to lose 10 lbs, when do you want to lose it by? “Someday” won’t work. But if you anchor it within a timeframe, “by May 1st”, then you’ve set your unconscious mind into motion to begin working on the goal.

Once goals are set you have a clear understanding of what you want, and your mind can wrap around it. It is then much easier to set a path to make those goals happen!

This Economy Has Its Gifts

The savvy business owner will be the last man standing in his industry!

 Will that person be you?

Do you know what is happening to your competition?  As more and more businesses collapse in this demanding economic climate, the savvy business owner is poised and ready for managed growth. Preparations to take advantage of the increase in opportunity will be in place. A prudent business owner understands the favorable aspects of this economy, and is not complacent and does not procrastinate. Procrastination and Complacency are the two deadliest sins of privately held companies in America today. Many are spoiled by a past flush economy and seemingly operate in the current marketplace with blinders on, assuming that stability is just around the corner. Quite a few have given up, excusing themselves, due to the difficult economy. Many are simply trying to ride the storm, not knowing what to to, but knowing there certainly is a way to the future.

“Smart people surround themselves with other smart people.”

It is not necessarily common knowledge that best business practices change rapidly. This is due to 1) competition and 2) increases in knowledge and 3) technological advances. What was considered ‘smart’ even three years ago may no longer be the best choice. Imagine that your company is a rose bush that you planted 15 years ago. Did you only water it once? Did you only feed it once? No! There is an ongoing responsibility  for its health and growth. SUCCESS AND STABILITY in business requires ongoing attention to detail and to best business practices in every segment of a company.

The intelligent business owner is continually forging ahead, but in this century, we are all on ‘information overload’! It is impractical to keep up in all the ways that matter most. There was a research project done in 1995 that predicted that in ten years, 92% of all businesses in America would be ‘Service Oriented’.  A great example is that women don’t do their own manicures and pedicures anymore. Working couples primarily ‘eat out’. Accountants have replaced the office bookkeeper. Think about yard services and car washes. The list of specialization is long!

We go to those who ‘know’, in order to save time and money. 

Who knows best about business? Accountants are not business experts, but tax experts, so it is a mistake to put your business planning and strategy into their hands. It is a common error. As a business owner, it is wise to surround yourself with those who absolutely ‘know’.  It is important to find scholarly yet compassionate business experts with depth of experience to provide the support you need to keep you at the top of your game in the marketplace today.

                                                                               Sherry Matteson, MA

A struggling economy is never an excuse!

Sustainability in 2011–Do you Improvise?

By Sherry Matteson, MA

Economies always cycle – throughout the year, from year to year and from decade to decade.  A solid approach to business as well as to life, is to be your best during the worst!  This is rarely the case, however.
Inherent problems tend to be overlooked under the best financial conditions and shine sharply when profits are slim.  If we are the best when profits are down, it stands to reason that the best times will be phenomenal.

So what are the keys to being the best?

1. Plan-The football team knows the whole play ahead of time. The ballet company dances to a complex series of pre-planned movement. Obviously, communication of the plan is critical in both scenarios. If the ballet company doesn’t know the Prima Dona’s next move they will look foolish and finally leave the stage. There will be no dance, except maybe a solo, which is a common scenario in small business with incredible burden on the owner. The same is true in music- the analogy is obvious. All the players need the score in advance. The results of improvisation can end up at either end of the spectrum- lovely or disastrous. Improvisation is not a good idea in business.

2. Trust- Trusting that the football players want to be their best, the dancers want to perform fabulously and the orchestra members desire to make beautiful music is an early step in building a foundation for success. Without this inherent trust, performance suffers, employees are anxious, confused and feel devalued. This climate is not conducive to high performance. This lack of trust in business usually indicates that leaders feel themselves to be unassisted, even isolated. This translates vividly to team members. It is prudent to hire people you can trust and then let go!
It is conversely a dangerous practice to give full autonomy to employees that are untrustworthy.  Either practice can split the very fabric of a company’s morale.

3. Support- This is a multi-dimensional concept. How does a football coach support the players? How does an orchestra conductor support the musicians? Support is an unflagging attitude but it is also a series of actions. The conductor makes sure that the players have what they need- music, supplies, sound system, auditorium, and and practice. The business leader is the same. To make certain that employees have everything they need to do their job is imperative and it is the business owner’s responsibility.

 4. Adapt- Sustainability in today’s marketplace requires resiliency and the expertise to recover quickly from difficult situations. Complacency is most often the origin of an underperforming business. Imagine if an orchestra played the same symphony over and over again at each venue, because they were good at it. Soon they would lose their audience. What if a great football team executed the same plays over and over at each game, or kept trading out players, hoping the situation would turn around. Without renewal of process, both would die a slow death. It is a fact that we love our habits, but the fact remains that uncritical satisfaction with one’s achievements spells mediocrity in any human endeavor.

A sustainable future requires planning, trusting, supporting and adapting. Where do you stand with regard to these concepts?

Do You Have Control of Your Business…or the ILLUSION of Control?

by Donald Miller, President

Let’s start this discussion by defining our terms. The Oxford American Dictionary defines control as: “The power to influence peoples behavior or the course of events”.

The definition of illusion is “a false idea or belief” and “deceptive appearance of impression.”

Which best describes your company and your position in it? Most of the small to medium sized businesses we encounter have some things in common.  Usually the owner has expertise or some experience in the product or service the company is providing.  For example the Master electrician owns the electrical contracting company.  The homebuilder becomes the General Contractor etc. We know that they understand the technical side of their business however by choice that isn’t their job anymore.  They are now the President but they haven’t had the training for this job so by nature they revert to performing pieces of their old job which cannot have the desired results. The result creates the ultimate firefighter that works very hard but never seems to get ahead. After years of this they begin to accept things like breaking even or even financial losses as “well that’s the nature of this business”.  Or worse yet “you know the economy is bad” instead of saying what do I need to do to become President of this company?

Jack Welch former CEO of General Electric during its largest period of growth is someone I was able to spend some time with some years ago. He vocalized some of the basic tenents I’ve been managing with all of my life. For example:

An organization’s ability to learn, and translate that learning into action rapidly, is the ultimate competitive advantage. (This is virtually the credo of The dMb Group)

• Change before you have to.
• Control your own destiny or someone else will.
• Don’t manage- lead change before you have to.

The point of this discussion is face reality as it is, not as it was or as you wish it to be. The mirror of every organization is its President. If you are willing to constantly learn your people will also be. If you are set in your ways and stubborn, so will your people be.  When I hear a President look at his work force and say “well look at them! What am I supposed to do with them?” I don’t look at them, I look at him.

The good news is there are solutions. There is no “Presidents School” but there are tried and true management methods and measures. As soon as you, the President, learn them and embrace them your profit, work effort and effectiveness will improve. As soon as you are committed to learn everyday your workforce will embrace that same ethic. So strive for knowledge and stretch your personal limits.

Remember the school of hard knocks leads nowhere but some hard bruises.