Article Contributed by Jim DeLapa
Among the very first decisions you, as a future business owner must make is whether to write your own business plan, or turn that over to someone else. By taking ownership of this first, most important step in building your business, you will gain far more than a crisp document to be read by others. You’ll develop a deep understanding of what it will take for your business to succeed. For this reason, it is essential that the business owner be the primary thought leader or sole author of the business plan. Outside help should be reserved for fine tuning, validation and in some cases to prepare financial projections.
Let it be YOUR plan.
As the founder and business owner you will be charting the course for the business. It will be important that the business plan be an extension of your personal vision for the company. For most entrepreneurs, the opportunity to call the shots and lead the way was an important part of why they wanted to get into business. Now is the time to start being a leader. Leaders develop their own plans and call the plays along the way. When it’s not your plan, you relegate yourself to performing as an operator. You will find yourself going back to the business plan someone else wrote to occasionally re-read the directions, or ignoring it altogether. Either way, the value of having a plan has been greatly diminished.
The Value is in the Process.
The act of writing a business plan is one of forced discipline, problem solving and reconciling the results. When approached and completed in this manner the end product and the process itself will increase your self-confidence and assuredness about where your business is headed.
Starting with a simple business plan template, and there are lots of them available, force yourself to think through all the critical aspects of the business. This will be an iterative process that you repeat, fine tune and re-write. As you develop each section of your business plan, your thoughts about the other sections will evolve—even those that you’ve already written. You go back, edit and in the end, you make it all work together. That’s the idea. You are developing an understanding of the relationships between every aspect of your business.
To underscore the importance of writing your own business plan, take this little exercise. Read the paragraph below as fast as you possibly can. Then stop, take a breath and move on to the next one.
Who will my customers be? What problem will I solve for them? How much are they willing to pay to have this problem solved? What are my costs associated with each sale? Why will customers choose to buy from my business? How will I find customers? Who will sell, produce, and deliver? Which markets will I go after first? Why? How much will it cost to operate the business each month? What will my breakeven point be? How fast can I get there? How much startup capital will I need? How will I succeed?
Okay, slow down now and consider this: The most important question isn’t listed. The most important question is, “How are these factors interrelated?”
Imagine that today someone handed you the answers to all of the questions from our fast-read drill above. It would certainly save you a lot of time. Better still, these wouldn’t be just any answers, but they would be the right answers from a solid business plan for a business that had already been proven to be successful, a business just like the one you’re planning to start. You could read and re-read the answers many times over, practically memorizing them. You would know that they were the right answers. Yet, doing so will not help you develop an understanding of how the answers are interconnected.
If you change the way you plan to find customers, how will that impact your monthly operating costs? If customers are only willing to pay 80% of your planned price, what will that do to your breakeven point? How will the answers to these two questions impact how much capital you need to start the business? This example looks at just two questions. Realistically, the answer to each question is highly dependent on the answers to several of the other questions. In the end they must all work together and you must understand how they all work together.
If you develop your own business plan, section by section, thinking through all of the answers to the critical questions, you will also develop an intuitive sense of how they work together. It will require a lot of thinking and rethinking of your ideas and it will take time. It’s not a fast drill. In the end, it will be the difference between ‘memorizing the lines’ and actually ‘being the character.’ Small business ownership is not the place to be reciting someone else’s lines. You are the character. Write your own lines. Be the leader.
When to Bend the Guidelines
There are some times to reach outside for help. For example, perhaps you would say, “I’m not a numbers person; I don’t think I can do the financial projections.”
First, plan to become more of a numbers person because business ownership is about numbers. Sales, expenses and profits are the three that are most important. Even so, many business operators who have a good feel for the numbers need assistance with spreadsheets and financial statements. It is okay to get outside help preparing your financials, just be sure that you understand them when they are complete. If you are going to pay someone to prepare them, be sure that they also save time to go over them with you from top to bottom. Ultimately they are your numbers.
Others might say, “I have great ideas, but I’m not a great writer.” It’s understood that there can be a lot riding on someone else reading the final product of your business plan—such as a loan or an investment decision. For that reason, if you are not a strong writer you should start by going through the process of organizing, writing and rewriting your own business plan as best you can. Force yourself to go through all of the steps of writing, rethinking and rewriting as your ideas evolve. Then, have someone else take your finished draft and craft the final polished document. What is important is that the final document must accurately reflect your concepts, ideas and thought process, not the editors.
What if I Just Can’t Do It?
Finally, some would say, “I want to start my own business. I am a strong operator, but honestly, I don’t think I could write a business plan myself. What do you suggest?” Simple: Buy a franchise! They are perfect for people who are strong operators where someone else provides the strategic plan, the systems and some guidance. This might be the best ownership model for you. That’s a topic for another day.
About the Author
Jim DeLapa is the founder of GreatBusinessPlans.com, a leading provider of small business plan assistance for current and future small business owners. DeLapa has launched and invested in numerous successful startups and played an active role in nurturing two of those from inception through being acquired by publicly traded firms.
Category: Starting Up
What do computer giant Dell, gourmet food basket maker Tastefully Simple, and organic brewer Honest Tea have in common? Though all three are now multi-million dollar companies, all were originally started within the founder’s home. You’ve probably heard how Michael Dell worked out of his garage to build his empire, but equally inspiring are the stories of Jill Blashack Strahan- who assembled gift baskets on the pool table of her backyard shed- and Seth Goldman- who brewed tea at his kitchen sink and presented homemade samples to clients in thermoses.
The home-based startup story has a certain magic to it that often glosses over the particulars: where to set up office equipment (computer, printer, copier,etc.), whether or not you should dedicate a business phone line or switch your VoIP service to include “follow” features so you’re always available, and how many hours you should put in when your office is in your kitchen. What does a stay-at-home entrepreneur really need? Here are a few necessities:
1. A Separate, Dedicated Workspace. Whether it’s your garage, a toolshed in the backyard, or just an area off the den, you will need a space that’s just for work.
2. A Separate Phone Line. Small business VoIP service plans are cheap and easy to sign up for. You can also add an extension or line to your existing residential VoIP service arrangement.
3. A Fast Internet Connection. For businesses based online, this is non-negotiable. Your internet connection should be fast enough to support online activity and VoIP calls, if you use an internet-based phone system as your method of business communication.
4. A Door…or Earplugs. If you can’t physically separate your workspace from the rest of the house, you can mentally separate it by using earplugs to tune out audio distractions, or a folding screen to tune out visual ones.
5. A “Do Not Disturb” sign. If you’re working while others are at home, make sure they know when you’re “unavailable.”
If you’re thinking of switching to VoIP service from a traditional landline based Key, PBX, or hybrid phone system, you’re not alone- businesses of all sizes are beginning to realized the cost-saving benefits of computer/telephony integration. Switching to a VOIP phone is relatively simple- changes can be made quickly and easily, and there is usually very little equipment to purchase.
Whether you’re switching to a business VoIP service or implementing a phone system for the first time, here are a few things you need to consider:
Internet Connectivity
VoIP phone systems use the internet to make and receive calls- you’ll need to make sure your connection and your power supply can support system requirements. Generally, a steady, uninterrupted power supply and a high-speed internet connection are all that’s needed. Your connection should be able to support the added traffic that the system will create. Vendors will ask how many employees will be using the system, how many calls are placed daily, and take into consideration features like auto attendant and call transferring when setting up your internet connection to support your system. You may need to purchase additional routers or install a backup power supply.
VoIP Adapters
If you’re witching to VoIP from a traditional phone system, you can save by purchasing adapters for your current phones. A traditional phone fitted with a VoIP adapter works identically to a VoIP phone. Most adapters are less than $50 each, and are often available in bulk discounts for larger offices. In lieu of adaptors, you can also purchase VoIP phones, headsets, or microphones that can be connected directly to a computer and used in place of a traditional headset. Most business and residential VoIP service providers sell both VoIP-compatible phones and adapters.
VoIP Phones
Voice over Internet Protocol phones are slightly more expensive that VoIP adapters, but are a good investment if you plan to use the system for several years. VoIP phones are easy to use and install- they don’t take any special training to set up. Once installed, they work identically to traditional phones. Most VoIP phones cost at least $100 each, with many vendors offering steep discounts for phones purchased in bulk.
Switching to a VoIP system takes surprisingly little time. Once you’ve decided to make the switch, you can shop around for providers and compare prices for services and equipment. Most providers can also make suggestions about system configuration (i.e., if you need a faster internet connection) during this stage. Once you’ve settled on a service provider and purchased equipment, you can have the new system up and running in less than a week.
About the Author
Merrin Muxlow is a writer, yoga instructor, and law student based in San Diego, California. She writes extensively for Resource Nation, a company that provides resources for business owners, and is a frequent contributor to several sites and programs that offer tools for entrepreneurs, including Dell and BizEquity.
Article Contributed by Lori Olson
Business goals need to be defined. Startup business plans always need to include what the expected destination will be. Image that you are going on vacation and have no idea where you are going as you get in your car. How do you pack for such a trip? You might end up in Florida with a suitcase full of ski clothing. As obvious as this may seem, many online businesses start out pretty clueless about this.
Step 1 – Pick an online business monetization model.
The four ways to make money online are:
– Ecommerce model – this applies to any business that has a product or service to sell online.
– Lead generation model – this is the cost per action (CPA) approach where information is sold to other businesses
– Advertising model – this applies to sites that are rich with content and attract lots of information seekers and repeat visitors. The site makes money through pay per click and affiliate products. It relies heavily on high traffic and repeat visitors.
– Support – this applies to businesses that specialize in solving customer problems
Once your business model has been defined (“your travel destination”) you can figure out the steps needed to get you there. In some cases, there will be overlap of models but one will prevail as dominant.
Step 2 – Identify the steps you need to accomplish your goals.
Here are the minimum requirements for online success:
– Keyword research – This is a crucial first step that is most often skipped or done in a shoddy manner. It accounts for the majority of startup business online failure. It is so critical to be done right, yet most startups fail to take the time to fully research it. They make the mistake of brainstorming keywords that “sound” right. If they do any keyword research they usually stop after identifying keywords that are highly searched. They don’t continue the investigation by finding out how much competition exists for those keywords. They don’t determine whether the people searching on those terms are information seekers (and will never buy anything) or actual buyers. Keyword research needs all three of these components. If one of these is missing, it is extremely likely that the website will not succeed.
– An SEO friendly website – Failure to develop a search engine optimized (SEO) website is another typical and huge mistake that startup businesses make online. Unfortunately, the main focus is on a website’s looks (whether that be “pretty”, “trendy”, or professional). Many startups make the mistake of using web designers who know little or anything at all about SEO. They are graphic designers who will make a site look terrific but will be a coding nightmare for search engine spiders. They often include excessive amounts of flash (spiders are just starting to be able to make some sense of it) and dynamic scripts (e.g. spiders cannot read JavaScript). The focus should not be on creating the most beautiful website but rather on the most functional one that has high visitor usability.
– Great content – Sites need to provide the content that is highly relevant to the expected audience and that is also of great quality. It must contain the right keyword weight, frequency and proximity. The content needs to be chunked in a way that makes it easy for visitors to find and consumed. It needs to have correct spelling and grammar.
– An obvious call to action that is easy to execute. Anything that is frustrating to your visitor is likely to send them away (even if they are in the midst of your shopping cart).
– Web analytics – Business owners need to follow the Japanese concept of kaizen. This is looking for ways to make continuous improvement. Web analytics is essential for all web businesses. It can tell you about the way visitors enter and exit your site, how long they stay, what pages lead them on and which ones cause them to leave and so forth. Web analytics will tell you where your site needs to make improvement otherwise you will be completely clueless as to why the traffic your site gets does not convert.
– Marketing strategies – This includes developing organic search engine traffic (developing back links etc.), PPC and Social Media strategies.
– Business processing software – Systems that automate your business will cut down costs, prevent follow up failure and make your business manageable. This is important even no matter what size business you have. If you are a solo entrepreneur, it can be the difference between having free time or not.
Step 3 – Evaluation of your resources:
The first thing to realize is that there a lot of technical steps that need to be done. Startup businesses need to determine what in house skill sets exist and what needs to be outsourced. Solo entrepreneurs and small business owners typically have the “must do it yourself” attitude. This can be a formula for online businesses that are unprofessional looking, never get found online, and never get passed the formulation/beginning stage of development. It is not necessary to learn HTML, JavaScript and PHP. It is not necessary to become and SEO or analytics wizard. It is however, essential to know that you need these things. This is why so very many of online businesses fail. They are missing so many crucial elements because of not knowing or by doing things in an incomplete, haphazard and non-professional manner.
Evaluation of resources includes determining what can and should be done by whom. It includes deciding on how to allocate funds so that your business will grow. The reality is that most individuals to not have all the skill sets that are needed to do the required tasks of a successful online business. Getting the help of experts is the most cost effective route. Fortunately, getting expert help for an online business is highly affordable; especially compared to the costs of starting an offline business. Many so-it-yourselfers turn to “magic bullet” solutions. Startup businesses need to evaluate the benefits of the many do it yourself type of products that are available from internet gurus. While many of these products do have value, the cost in terms of time to learn how to effectively use them (and the energy involved) must be considered. How many products will be needed for the do-it-yourself approach? Will the product do what it says? The reality is that the cost of hiring professionals is often the same or less than attending workshops and buying products. After the workshop is over, small business owners still need to attend to execution of the details whereas hiring a professional accomplished this.
There is no doubt that startup businesses who follow this three step blueprint will distinguish themselves from the vast majority of new online businesses that fail.
About the Author
Lori Olson has a passion for helping small businesses develop strong online presences with a team of 250 professionals who analyze & implement SEO, SEM, PPC Campaign Mgmt, Social Media, Copy Writing & Web Development strategies which are customized to fit any needs, wants & budget. Update Small Business also provides leading edge employee & sales assessment & training; & CRM solutions. http://updatesmallbusiness.com or call 877.265.6568.
Making the decision to sell a business is an extremely important one but many business owners do not realize just how important it is until it is their business. It is absolutely imperative that you take the time to consider your options before making a decision, regardless of whether you built the business from nothing or bought into it and made it your own. There are plenty of factors to consider but if you decide to sell your business, you should do your research before marketing your business for sale.
There are several tips that could help you when selling your business, and ten of them are outlined below. This information is essential so make sure that you adhere to the following points:
1. Plan Your Exit Strategy – Experts agree that you should always plan ahead when you want to sell the business, and begin to prepare at least three years in advance where possible. This allows you to prepare for the handover, both personally and regarding the business for sale. It will allow you to maximize profit and get your paperwork in order.
2. Prepare The Business – If you want to get a higher price when selling your business, you need to make sure that it is well prepared. Any outstanding issues should be solved, new policies and strategies implemented, and fulfilling training will get you up to 10% more on your business than would otherwise be possible.
3. Disregard Your Own Valuation – You are emotionally involved in your business so any price expectations you place on it would be emotionally affected. As such, you are likely to over inflate the price and no buyer will want to know how much you believe your business is worth. The only valuation that matters is that of a valuation specialist or qualified appraiser.
4. Protect Yourself – Have your attorney draw up a confidentiality agreement with no possible loopholes before you make any disclosures pertaining to the business. This will protect your business no matter what and ensure that you are not stung if any sale falls through.
5. Inform Your Shareholders – Shareholders and other individuals with an interest in the business, such as board members, could actually stop any sale of your business going through. Advising them in advance and taking steps to ensure that their influence is ultimately muted is essential. Failing to do so may leave you with your business in your name along with a huge bill for costs incurred by brokers, accountants, and attorneys.
6. Prepare Your Conditions – Many business owners wait until a bid is made on their businesses before preparing their own terms and this can hold up a potential sale. It may even be the cause for a sale falling through. Preparing your written terms and conditions before you put your business on the market will inform buyers before they place a bid. You will then be able to negotiate.
7. Consider Your Retirement – Selling a business may only be the start of your retirement but it could lead to problems in your personal life. You need to consider what you will do following the sale of your business for your own peace of mind and general health. Do not neglect this point. Although it may not sound important now, it will be following the sale.
8. Do Not Give Priority To Price – You should never look at the sale of your business in immediate financial terms. The bids offered may be distinguished as the highest monetary bid and the lower ones, but accepting the former may mean you lose out. Lower bids may have clauses by which you earn a percentage of profits for so many years or even retain shares, As such, the cash amount should be placed behind the content of the bid terms when you consider them.
9. Full Disclosure – No matter what the weaknesses are for your business, you should always make a full disclosure, including warranties, about the state of your business. Be sure to include “to the best of your knowledge” in your contracts, and qualify all disclosure made so you and your buyer know exactly where you stand.
10. Choose The Deal – Approving a deal structure is of paramount importance when selling your business. You need to ensure that you are completely happy with every aspect of the deal. For example, you may want to retain a certain aspect of technology from your business for your future interests so this should be qualified in the terms. You may also wish to keep certain business interests out of the sale. Whatever your decision, you should always act in your own best interests so only offer the deal that you feel comfortable with.
About the Author:
GlobalBX provides a FREE business for sale exchange connecting business buyers, sellers and lenders. Search over 32,000 businesses for sale and franchise opportunities. Sell a business for free with no listing fees and zero commissions. We have all the top franchises as well as franchise resales. Find franchise reviews and get free franchise information. You can also contact over 300 lenders directly and get a business loan.