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Posts Tagged ‘business plan’

Company Culture from the Beginning

Monday, April 15th, 2013

Inc. magazine, the always on-point print and digital magazine for growing companies, has published a few articles in the last week on company culture that got us thinking about how critical hiring the right employees is to the small businesses we serve.

Entrepreneurs and companies come to us at different times and for different reasons, but, unsurprisingly, nearly all of our clients intend to hire employees during the year after using our service. Makes sense, right? If you’re writing a business plan, it’s probably because you’re planning on growing your business, and more work means you’ll need more people to help you.

Most often, when owners and managers think about the workers they want to hire, they think of a list of skills that they need their workers to have. Sometimes they’ll have an organizational chart laid out with a pre-ordained hierarchy of employees. Thinking ahead like this is great, and it’s just what an owner/manager has to do. But it’s not only the technical skills of an enterprise that will be defined by who a company hires. The people that take on the roles described in an organizational chart will not be simple mechanical cogs completing the tasks outlined in a job description. They will be living, breathing personalities that will define a company culture. And don’t think for a second that culture isn’t part of what makes a company successful.

Different types of workers work in different ways. More than just the skills a person has determine how they get the job done: attitudes craft action. Two of Inc.‘s articles we noted focus on how certain character traits will often line up with certain types of work. For example, if a business is going to need to perform a lot of creative work—perhaps a marketing or web design outfit, or a production studio, businesses for which we write plans very often—it would be wise to think ahead about the character traits that often go along with the creative skill set. Another factor might be working to find a balance between extroverted and introverted workers. Extroverts tend to help “raise the bar” in the office, at least in terms of communication and public goal-setting. But it turns out, studies show that more introverted workers tend to be the ones who put their noses to the proverbial grindstone to make things happen.

The cultural composition of a company will have a profound impact on what your team accomplishes. A company must be skilled and competent, but it also needs to work together. Even if you have a team of all geniuses, if they can’t coordinate, then group projects (read: your business) will never get done right. Each subsequent employee will enter into the culture created by the previous ones: the tone of your office will start to be set by the first employees you hire.

What can you do to forge the right culture for your company? Inc. has you covered on the details, too. This last article is a great interview with Paul Spielgelman, founder and CEO of BerylHealth, a hospital call-center business. We love his “10 Steps to a Remarkable Company Culture”, steps which helped him grow his company and sell it to an industry leader with a $9 billion market capitalization. Check it out, and start your business out on the path to success.

The Question We Get Most

Monday, April 8th, 2013

We get asked a lot of questions. In the decade that I’ve run this business, I’ve heard just about every entrepreneurial question you can think of. Some of them are the specific questions our clients want to have answered in their plans, and have to do with their particular line of business: What gross margin should I expect at my sandwich shop? What’s a standard lead-to-sale conversion rate on an ecommerce retail platform? How many florists are there in Pittsburgh? Clients come in with a laundry list of these little questions, and our day-to-day work involves finding all the little answers.

But whether I’m working with an internet start-up owner or a restaurateur, there’s a question that it seems nearly every business owner has, usually near the end of their engagement with us. It’s a question they didn’t pay us to answer, but it’s the question they want answered most.

What do you think about my plan? Is it a good one?

In 2003, when I got that question, I was usually tempted to give the client a detailed opinion critiquing their core idea. I’d tell them how I would approach the situation. Typically, this just resulted in them taking my advice, regardless of whether it was good or not. I then had to rewrite a few sections of the plan, and the client would leave less satisfied, as the idea was no longer really theirs. When you’re in a position of authority with respect to starting a business, sometimes people start to think that you can run any business, and not just the business planning business you originally thought up. But I’ll be honest, 10 years of business plan consulting have given me a unique perspective on this question. I can now say what my answer always is: Whatever I think, it doesn’t matter.

Mind you, my staff and I have lots of great advice on how to present your idea. We’re great writers, and we know how to lay out a financial model in a clear, concise, and detailed manner. But when it comes to the question of whether you will succeed, we don’t staff any psychics, and don’t plan to.

In 10 years I’ve seen businesses I thought were destined to be the next Facebook or Twitter before I had heard of Facebook or Twitter. But guess what. You’ve never heard of them. You’ve heard of Facebook and Twitter instead. I’ve also had a few business owners come to me with what I thought was a simply stupid idea. Well, those stupid ideas now take in more revenue every year than I do.

I’ve learned that I just don’t know what’s going to work and what won’t. This is great for my clients, because now every plan is approached with the same candor. Our business is about making each plan shine, not about finding the needles in the entrepreneurial haystack.

And still, I find that sometimes this answer doesn’t sound quite sufficient. Sure, you can’t read the future, they say, but what do you think?

The truth is, I still think that in answering such a question, my talk is cheap. But the blood, sweat, and tears of the entrepreneur asking me were not. And that’s the question such an entrepreneur inevitably needs to ask. What do I really think about this plan? Am I going to make it? Both common wisdom and scientific study suggest that confidence is key to successful business creation. And so if I have a crystal ball, it’s only this one: if you believe in your idea, if you think you have what it takes to make your business succeed, then my bet is you’ll make it. But if you don’t believe in your idea, no business plan in the world is likely to lead you to success.

Bryan Howe
CEO
Masterplans.com

Women’s History Month: Entrepreneur Edition

Monday, March 25th, 2013

As you likely know, March is Women’s History Month in the U.S. (and many other countries in the world, in line with International Women’s Day on March 8). We think one of the most interesting and exciting aspects of women’s history is the history of women in business. While the story is one of struggle—a struggle that continues today—it is also a story that highlights the human power to succeed against all odds and the truly amazing strength of the women that have forged a path to prosperity for themselves, their families, and their communities.

There’s a great synopsis of the history of female entrepreneurs here, at the National Women’s History Museum website. In the 19th century, woman-owned businesses were a much less common sight in America, generally restricted to small enterprises like retail stores, taverns, and inns. These businesses were often left to a woman after the death of a husband or father. The Progressive Era saw the beginning of a period of transformation that would extend to the present day. Central to this change was the increase in support services and communities for women business owners, like the Business and Professional Women’s Clubs, started in 1919.

Today there are even more resources available for women starting their own businesses. The Small Business Administration has set up this page to centralize their resources for female entrepreneurs. The SBA also runs over 100 education centers across the country ready to help women start and manage their own businesses. The private sector has joined in, too. Goldman Sachs released research showing women make the best investments and has implemented the 10,000 Women program to help women across the world access education in business and management.

More progress is yet to be made: women are still often underpaid in the workforce and underrepresented on executive teams, for example. However, the advancement made by female entrepreneurs in the last century is something we can be proud of. Today, women run some of the most exciting businesses in the world, even in industries (like tech) that have historically been even more male-dominated than most.

At MasterPlans, we focus more on women’s futures than women’s history. 54% of our clients and over half of our staff are women, and we’re devoted to helping female entrepreneurs find success. So let’s make March not only a month when we look back at the women who have made the world thrive, but also look forward to the successes yet to come. And if you want MasterPlans to aide you in making this month monumental in your personal women’s history, know that we’re here to help.

Six Hot Industries for Startups in 2013

Monday, March 18th, 2013

The economic climate is getting sunnier by the day, creating an ideal opportunity for entrepreneurs looking to capitalize on burgeoning trends. But some industries are a better bet than others. Unsurprisingly, as the mobile revolution continues, many of these industries center on new technologies and the needs and opportunities they create. Others are growing because consumers have fatter wallets, full of disposable income to spend on nonessential—but highly rewarding—goods and services.

So what are the most promising industries for startups this year? We’ve checked with news sources (like Inc. and The Week), research firms (like IBISWorld), consulting groups, and the U.S. Census Bureau to bring you this list of the best industries for startups in 2013.

  1. Social network game development: As mobile devices become ever more popular, people will naturally spend more time on them. Connecting with friends and playing games are favorite activities, and this rapidly growing industry combines them both. Social network game development is expected to have grown by an impressive 30% in 2012, and its compound annual growth rate over the next five years should weigh in at 184%.
  2. Corporate cloud services: Secure data storage is a must for today’s multinational corporations, many of which employ teams who must work together seamlessly in offices around the globe. Big data was a $3.2 billion industry in 2012, and it’s expected to hit $17 billion by 2015.
  3. IT consulting: As more businesses move to mobile and cloud-based computing, this industry has grown at a remarkable rate. Between 2007 and 2012, the industry added 200,000 new jobs, and grew by more than 8% a year. Experts predict a growing emphasis on security consulting to help businesses keep their data secure.
  4. Restaurants: Thanks to the rising rate of per capita spending, even budget-conscious folks can afford to eat out. This industry already employs about 10% of the workforce, and is expected to grow by 5.5% in 2013.
  5. Residential construction: The recovering economy has finally put this industry back on its feet. Now that property developers can afford to build, and homeowners can afford repairs and renovations, this industry will grow by more than 10% a year over the next few years, hitting $573 billion in 2017.
  6. Pet services: Almost two-thirds of us own at least one pet, and we’re more inclined than ever to spend money on our best friends. The pet services industry was worth almost $53 billion in 2012, and it’s expected to grow by more than 5% a year over the next five years.

Whether you’ve always wanted to be your own boss or whether you’re on the lookout for lucrative expansion opportunities, these industries are a great bet. Of course, if you have a truly innovative idea that the market yearns for, perhaps it’s time for you to help define the hottest industries of 2014…

The SBA Learning Center Gives Great Advice

Tuesday, March 12th, 2013

It’s popular to try to “bootstrap” when opening up a business: to make your way by yourself without the aid of external help or capital. Indeed, a little bootstrapping is necessary at the very beginning of just about any enterprise, even if the company seeks to find capital quickly. But an entrepreneur dedicated to finding their own way would still be wise to investigate the many resources that are available to help them refine their idea, and figure out how to successfully transform it into a product or a service.

The Small Business Administration’s Small Business Training Network has created a lot of great online courses made specifically for small business owners and entrepreneurs to help them figure out how they can make their business a success. Actually, the SBA often gives the same advice to entrepreneurs that we give to our clients. One course they have online now is a great example of their work: How to Win Customers in Today’s Economy.

What we like most about the info the SBA provides is that, like us, they start with the basics. When they start the course with a lesson on how to explore new markets, they begin with a definition of what marketing is: “Marketing is the process of planning and executing the development, pricing, promotion, and distribution of products and services to satisfy customer needs.” The key word, they say, is satisfy. A business must fill a need experienced by consumers or other producers.

And that means research: Who will be the clients? Where are they located? What are their needs? What products or services might they buy to meet those needs? These are the types of questions that we run through with our clients every day. The most important part of our process is helping the client consider the answers to these same questions in a systematic fashion, and help them find the answers.

Look around the SBA Learning Center. There are courses, videos, and interviews with leading business experts and entrepreneurs. It’s a great resource for anyone looking to start or expand a business or even a nonprofit organization. Even if you’re going without financing for now, take advantage of other entrepreneurs’ experience and the resources put out by businesses and the government. You’ll find you don’t have to go it alone.

What You Can Learn From One Bank’s Failed Business Plan.

Monday, June 29th, 2009

Forgive us our moment of schadenfreude here, but we love us a little irony: National Bank, the biggest lender in Greece, said that it’s scrapping its three-year business plan because it’s no longer relevant. According to Reuters:

“Due to the adverse global financial conditions and the continuing instability prevailing in the markets…the assumptions on which its 2007-2009, three-year business plan was prepared have changed and are no longer relevant,” the lender said in a bourse filing.

In a strange twist, it seems that the banks- the very institutions that require three years worth of financials in every business plan—are the ones proving a point they’ve yet to concede: when it comes to a business’ financials, no one knows what’s going to happen in three years let alone, three months. It sounds simple and clear enough, but try telling that to a banker. The respone you’ll likely get is rote: “You need three years worth of financials to be considered for a loan…’

Unsatisfying? Yes. Frustrating? Absolutely. Still, National Bank’s debacle does illustrate an imporant point: bankers know just as well as you do that figures three years out aren’t likely to be terribly accurate. And here comes the takehome lesson for those of you working on a business plan. Rather than wasting your time toiling over what may happen three (or even two years) down the road, focus instead on the first six months of your financials, and ensure that those are as accurate as possible. The truth is that no bank expects you to have accurately predicated your business’ financials in three years when, with their teams of financial modelers and economic forecasters, even they can’t get it right.

bankers

Social Media 101.

Wednesday, June 24th, 2009

Social media is one of those buzz expressions that it seems like most entrepreneurs like to throw in their business plan these days. The trouble is that while social media may seem cool because it’s cutting-edge and tends to be cheap, many entrepreneurs don’t have a firm grasp of what it means. Still, that doesn’t mean social media’s only for hip young start-ups. Here’s evidence: the Mayo Clinic’s into social media. If it surprises you that century-old medical institution is into Web 2.0, you might want to read on. VC-entrepreneur-member of the weberatti Guy Kawasaki recently spoke with the Clinic’s syndication and social media manager in an interview that’s posted over at American Express’ Open Forum blog. While there’s a lot of rambling, there are also some useful nuggets for those of you small business owners who may be trying to craft your start-up’s social media strategy. We’ve mined the good stuff, and created a simple list with tips we gleaned from the interview:

1) Don’t just jump into social media without planning first. Not only that, look at your existing resources and figure out how they can fit into a social media context. Says Lee Aase, the manager for syndication and social media at the Mayo Clinic: “We didn’t just immediately jump into blogging, Facebook, YouTube, and Twitter. It was a natural, gradual progression that incorporated what I like to call, ‘The MacGyver Mindset,’ creating new solutions out of resources we already had on hand. Mayo Clinic created its ‘Medical Edge’ syndicated weekly TV news resource in 2000 and offered local stations trustworthy health and medical news content. In 2004, we established a similar daily program for radio stations. Our first ‘new media’ foray involved creating an RSS feed for the radio segments to publish a podcast and because of its early entry into the iTunes podcast directory and the Mayo Clinic brand, it was featured on the front page. This led to a significant increase in downloads, which provided impetus for further new media exploration.”

2) Make sure you have a real passion for social media before you get involved. That’s because while social media, YouTube, Facebook, etc, may be free, they still cost you in man hours maintaining profiles and uploading new blog posts and videos. If you’re in the enviable position of the Mayo Clinic—”We had a passion for the projects, so no one was getting any extra pay, and we didn’t add staff”—that’s one thing. But if you’re wasting hours that could be better spent elsewhere, that’s another.

3) If you’re not a big organization like Mayo, expect that you might not get as much bang for your buck. A lot of entrepreneurs seem to be under the impression that by simply throwing a blog up on the Internet, traffic will increase and that will result in an immediate increase in conversions or leads. The same goes for the concept of “viral” videos, blogs, and content. One of the most common things you may read in a business plan’s marketing strategy section these days is that the business will “go viral.” The trouble is that it’s not as simple as just posting a video or blog: “You can’t and shouldn’t start a blog or a YouTube channel with the expectation that you’ll have a viral video. Viral isn’t a strategy,” says Aase.

4) Don’t expect immediate results. Says Aase of the advice he’d offer small business owners and other interested in social media: “It’s not an overnight process, so start by listening and taking advantage of the free or low-cost tools. By keeping your costs low, you will be able to create the breathing room you need to have time to achieve results…if you use the social tools with your existing staff as a way to accomplish your current work more effectively, you will get some wins that will enable you to expand your scope. I would also stress that a video with 3.7 million views is a nice bonus, but it’s not the goal. The real power is being able to create niche videos that may reach only a few thousand views, but they’re seen by the people who are most interested.”

The Business Plan Blacklist.

Monday, June 22nd, 2009

Are there really certain words or expression you shouldn’t use in your business plan? The Wall Street Journal seems to think—and we agree. In an article that you should absolutely read if you’re working a business plan, the Journal gives its list of thing you should never say—and most are right on point:

-”Huge.” As in your market is “huge” or that your opportunity is “huge.” Says the Journal: “Translation: The writer hasn’t bothered to get reliable data on the market size, or has failed to think carefully about the initial target market, which almost always should be quite narrow.” To which we’d add that you should probably just avoid all superlatives in general. They make investors’ heads hurt.

-”Revolutionary.” Unless you’re inventing the next iPhone, you probably shouldn’t use grandiose words and phrases like “revolutionary” or “game changing.” We agree with the Wall Street Journal when they say that such words suggest that, “We are so enamored with our idea that we have not thought clearly about how to distinguish it from the other approaches and are not interested in what the customer thinks of it. Customers simply aren’t visionary enough to fully appreciate our technology.” While that may be going a biiiit far, we share the sentiment.

-”No competition.” This one’s our huckleberry. No matter what you may think, nearly every business has one form or another of competition. It just might not be obvious. “If there’s a single phrase that can send a business plan directly into the trash, this is it,” writes the Journal. “Of course you have competition! To prospective investors, perhaps surprisingly, competition may be a good sign, as it suggests that there’s a problem that someone besides you thinks is worth solving.”

While we think those are dead-on, the Journal took issue with a few that seemed a bit shakier to us. For instance:

-”Conservative.” According to the Journal, “Investors know that initial sales numbers—never mind the profits—rarely pan out. So, let the numbers speak for themselves, based on the evidence you’ve gathered.” While it’s quite likely that investors will assume that the numbers you’ve forecasted are conservative (and they should be) we see nothing wrong with driving the point home that you haven’t projected insane figures.

-”Assumptions.” While the Journal says: “If you’re ‘assuming’ most of your numbers, you’d better stop now,” we don’t know that there’s really any good way to create financial projections other to assume them. There’s no way you’re getting realistic figures on a first pass for a business that hasn’t yet started. Some educated guessing’s just part of the game.

What do you guys think? Are there other phrases or words that should be stricken from business plan vernacular? Tell us what you think in the comments section below (pretty please)!

blacklist

No More Dead Air.

Friday, June 19th, 2009

If you’re one of this blog’s two readers, you’ve probably noticed that things have been a bit slow around businessplan.com the past week. If you’ve just stumbled upon us, rest assured that there’s real content here…occasionally. While we’d like to say that the dearth of business plan goodness is the result of working on the 3GS or helping reintroduce wolverines into the wild, the truth is far less riveting. (Seriously—you don’t want to hear it.)

Suffice it to say, another dead week won’t pass. Check back on Monday for more business plan content, criticism, and other bits of entrepreneurial news. In the meantime, these wolverines are cute, aren’t they?

wolverines

Kiva Funds U.S. Business Plans.

Friday, June 12th, 2009

Kiva, the Internet-based micro-lending site that lets people give money to small business owners in developing countries, has an announced an exciting new program for entrepreneurs seeking funding with their business plan here in the U.S. Starting earlier this week, people can contribute cash to small businesses that are based stateside, reports Read Write Web:

“The test will start with 45 U.S. businesses, ranging from baked goods deliveries to child care and taxi drivers. For now, the loans are limited to New York and California, though Kiva is actively seeking new Field Partners to move in to more regions in the U.S.”

And here’s how Kiva works:
“The Kiva platform works basically as a middle man, providing profiles of entrepreneurs for lenders to choose from, collecting the funds to be distributed through Kiva partners, and giving the capital back to lenders (either to re-lend, keep, or donate to Kiva) once a loan has been repaid. To date, more than $75 million for entrepreneurs in the developing world has been raised through the site.”

So far, it appears that the lending program in the U.S. actually works as well. Some of the start-ups on the site, including a child and elder care facility and a catering business, are almost fully-funded. If you’re interested in a Kiva loan, you must contact the company’s two partners for its U.S. loans, ACCION USA, a non-profit microfinance institute, and Opportunity Fund, a community development fund in California. To apply for a loan via ACCION, click here and for the Opportunity Fund click here.

kiva

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