So you’ve got the entrepreneurial bug. You have nothing against your boss, but it’s time for you to run your own show. “What?” you ask. Your budget is tight?
You know you need a business plan but you don’t know how to write it, and you don’t have a budget to hire someone? Indeed, to do it right, an action business plan with all the crunched numbers is tedious and expensive.
Strategic planning is a key to success. Although I’d recommend a strong action-focused business plan, the good news is that businesses can and do succeed without one. Yep, it’s possible.
Choosing the right game
A personal case study:
In the mid-1980s, my beloved mentor advised me to change careers and go into business for myself. However, I struggled to make the transition from broadcast journalist to entrepreneur.
Even though I had No.1 ratings as a broadcast journalist in Salt Lake City, I was laid off with several colleagues. So my focus was to get a job, not start a business.
In traveling to a convention of the National Association of Broadcasters, I unexpectedly ran into a former employer. Instead of offering me a job — he asked me to be a consultant to improve one of his radio station stations.
Three weeks later, I accepted. The station’s revenue doubled in six months and I learned the fun of consulting.
But I continued to job hunt. I jogged six miles every other morning in 10-degree weather and I networked over coffee. I called a former colleague whom I barely knew. She had been appointed by the governor to run a state agency.
Without saying so, she began to use me as a sounding board. Every week I listened to her problems, and responded with ideas from my management and marketing experience.
Even though I was a journalist, I developed a business acumen. Broadcasting was an unpredictable career for me as I was laid off numerous times, and repeatedly took jobs in sales and worked my way into management — even while looking to return to my broadcasting roots.
So my only motive with her was merely to keep my mind sharp as I prepared for my next job.
One day she abruptly cancelled our coffee appointment, which was disappointing because I couldn’t develop any job leads either. Two days later when I got in from jogging, I found a surprising voice message. It was an offer to be a strategist for her agency. Things worked out well.
The experience turbo-charged my confidence as a consultant, but I failed to see I was still trying to play the wrong game for my career. (The right game for me was to become a consultant.)
Although I’d recommend a strong action-focused business plan, the good news is that businesses can and do succeed without one.
Two years later, I relocated to the Northwest to be closer to family. I had no contacts and I didn’t really know the terrain, and worked at a couple of undesirable jobs.
In 1992, a friend asked me to buy his small print-marketing company. Then it hit me — it was a good idea. We agreed on a leveraged buyout — I paid him a small percentage of the profits for two years.
It was a tremendous boost for me in a new state to be able to say my firm was five years old; I just happened to be the new president. But a revenue increase was a goal. Two of my new clients were more concerned about their internal issues instead of marketing. Their issues were familiar — similar to my former Utah state agency’s.
Yes, from earlier in my career in Los Angeles, my beloved mentor — CEO of a successful publishing company — again played a pivotal role. He had taken over the reins of his big firm. He didn’t have experience growing a business.
So he graciously introduced me to his marketing consultant, the iconic Cork Platts, who was the marketing catalyst for my mentor’s success.
Developing the vision
Mr. Platts’ advised me: “Write a one-page vision plan.”
That’s right, a vision plan. The trick, I learned, is to create a solid, tightly written one-page vision plan. That means keeping in mind your strengths, weaknesses, opportunities and threats.
As a result of my new clients’ internal issues and writing my vision plan, I decided to expand my portfolio — a confidential, full-service business-performance consulting firm. You see, I had kept stumbling into client problems I knew how to solve. (Another credo: Find a need and fill it.)
Here’s how to realize your vision – write a one-page strategy with these six basic elements:
Company mission statement. Explain how you will create more value in your community. The sky’s the limit. Be adventurous. Describe in two or three sentences – max – the mission you will you accomplish.
Summary. Describe the niche you plan to fill. Explain what and how your firm will look like. A very short paragraph will suffice, but allow for flexibility so you can adapt to changes in the marketplace.
Benchmarks. Explain your smart goals. Consider SMART as an acronym – specific, measurable, attainable, relevant and time-specific.
Strategies. Write the strategies in how you will succeed. Remember, if you have a dream, it’s likely you’ll be able to draw on your experience to make it happen. The minimum you’ll need to help you is a good mentor, a coach.
Expenses. Cash is king. Cash flow is extremely important. Anticipate what your expenses will be. Detail what will be needed in resources. Be conservative. Once you determine what your resources will cost, add another 25 percent to allow for unexpected developments. Do a break-even analysis to determine when you will be profitable.
Sales. Forecast when and how much you will achieve in sales for each quarter of your first year. Then, try to anticipate what sales you will achieve in five years. Oh, and be conservative here, too. Once you’ve identified the sales numbers, subtract 25 percent. All kinds of businesses suffer from unexpected tsunamis.
Good luck. Entrepreneurship is a beautiful thing, but do it the right way. And when you have time and resources, develop your business plan.
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Knowledge is knowing a tomato is a fruit; wisdom is not putting it in a fruit salad.