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!

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 ?  

The Betty White Phenomenon

Behold the Betty White phenomenon.  At 89, she is one of the hottest and bankable stars in the industry.  She is in strong demand, and has shown she can create a demand where there normally would be none.  A mere two years ago, she was in the background as one of those actresses who “used to be on TV.”  So what happened?

A Superbowl Snickers commercial. At a young 88, she could have opted to sit back and relax for her remaining years. But as a Hollywood commodity, she understands the need to try something different. In doing so, she was the first to go where no aging star has gone.  In case you don’t believe in the power of the internet, within hours she was the most searched name and topic on social media sites and search engines.

That demand landed her on Saturday Night Live.  She was highlighted in almost every scene, and sportingly went along with the writers(I don’t know if I could have been so accommodating—some of those skits were less than acceptable). I admired her ability to “go with the flow.” She decided to take a chance, to extend beyond her comfort zone, and by doing that reach an entirely new generation of fans.  She admitted she has no use for Facebook, but that’s not the point.  That new tool called “social media” has garnered her countless guest appearances, and several new series.  And she is in control.

There is a valuable business lesson here. Doing the same thing you’ve always done will not produce the same results.  Sitting back and resting on past laurels, thinking they will carry you through isn’t what it’s all about.  The world changes.  Customers’ expectations change. Economics change.  Betty White is a brand name, and she clearly understands the business fundamentals.

Ms. White has always had the courage to change as times dictate in order to stay in demand. What about you? As a business owner, do you cling to the “way we’ve always done it” or are you willing to make the necessary changes to keep your business sustainable and profitable?