The First Step in Creating a Successful Business

Successful Business blueprints and 3-D chartBy now you know how important it is to create your business goals, strategies and plans as the precursor to taking action. But there is something that comes before all that; it’s your business Vision.

Think of it as if you were going to create a painting or build a house. You would envision what the end result would look like. You’d know what you are going to create before you started. You’d think through the details. The same is true in building the business you want; one that will satisfy your needs and fulfill your dreams. So how do you get started with that?

Close Your Eyes and Imagine… Five years from now, what do you see? An expanding, bustling empire? A business just as small as the day you started it? Do you have hundreds of employees or just one? Have you already cashed out to lay  on the beach, drink mai tais and reminisce about business ownership? Or are you actively working in the business either full time or part time? If you don’t know the answers to these questions, you’re not ready to move past this part, so get creative. Let your mind wander, see yourself and your business as you would like to be. Consider the kinds of services or products you’ll be offering, who will be your customers, your work environment, the support services you will have, the bottom line profit you will make. You might even consider writing yourself a personal letter from the future (5 years from now) detailing all of your business successes. Or just write freely about your hopes and dreams with regard to this venture and see what comes out that you didn’t already know.

When All Else Fails…Use the Q & A method. Entrepreneur.com suggests asking yourself some straightforward questions if you’re still having trouble with your Vision. Questions such as:

  1. How much am I willing to sacrifice to see this succeed? My own money? Long work hours and no vacations? No income for possibly years?
  2. If this venture doesn’t work out, then what?
  3. What annual revenues do I expect this business to make?
  4. Will this serve a niche market or sell a broad range of products and services?
  5. If I decide to delegate responsibilities, which will remain mine and which will I share?
  6. Could I work with a partner or investors? How comfortable am I under authority?
  7. Do I want to keep this business in the family and private or do I want it to someday go public?


Test Your Idea Against Two Major Components

Financial: If your business makes no economic sense now, it likely never will. Put your idea against financial challenges such as whether or not ( and when) you expect to see a return on your investment, what the projected profits over time might be and if you can devote yourself wholly to this venture monetarily.

Lifestyle: Your business will require a big commitment from you, but if you feel comfortable once you’ve figured out the details, you’ll know what you’re in for. Consider where you’ll live, what might happen if you get sick, if you’ll earn enough to maintain your desired lifestyle and if your family is on board with your choice.

Don’t Waver! If you can make it past this envisioning phase, then you’ll also have tested your commitment (and passed!), so remember that when things feel overwhelming. Having a clear Vision of where you are going with your small business can exponentially improve your odds of success, so take one step at a time and stick with it. Don’t lose sight of your Vision.

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Want professional guidance in creating a Vision with potential for success? In 30 minutes you will have a Vision that will motivate you and become the guiding light for your future success. Request your free 30 minutes here.

If you’re experiencing challenges in your business and not sure where your priorities should be, consider downloading the Business Challenges Checklist help you see where you need to focus now.

4 Things to Do Before Starting Your Own Business

Starting a business of any kind comes with its challenges, but if you’re passionate about what you’re offering, meeting your initial challenges will be easier. Even better, these actions will help give you a better understanding of your product or service, thus giving you more confidence as you head into this new adventure. Here are four things to do before starting your business.

Understand the Law

There are some general laws that apply to any new business, but your particular industry may have a set of its own as well. Determine what kind of insurance or licenses you will need, the tax information you’ll need to file and grasp the necessary details of human resources if you’ll be hiring staff. Be sure you understand the practical, legal and  strategic aspects now rather than later.

Write a Business Plan

Putting your overall business idea, marketing intentions and future goals on paper is a great place to start. Are you filling a void in the market, allowing customers a shopping experience or product they wouldn’t get otherwise? What will make your business different than others that may offer the same product or service? Answering these questions and organizing them into a business plan will provide an “operating plan” that will be a solid foundation on which to build a strong and profitable business.

Get Help

Entering this new world alone is tempting, but it may not be the best idea. There are many things to factor in to creating a business and it might be best to seek the help of an expert, someone who’s been there before and has helped others build successful businesses. Think of the time and money you’ll be saving by having things in place from the beginning.  There will be lots of questions. Having someone who has been there to help you identify what’s important and how to make the right decision will keep you from making costly mistakes.

Choose a Location

Luckily, technology today makes it easier for businesses to operate without a physical location. But that all depends on what type of product or service you offer. Consider the financial aspects of overhead; rent, utilities, taxes. If you don’t need it, look into how you might be able to set up shop online and ship your products. Maybe for your business, a healthy combination of both is needed. Don’t skimp on the research, make sure you’ve examined all of your needs and options before making a choice.

Addressing these starter challenges will put you in prime position to get your business off the ground on a good foundation. Remember that many have come before you and it’s a good thing to seek the advice of someone who can help you tackle problems before they start. Good luck!


If you’re just starting a business and would like a reality check as to whether you’ve covered all bases, send a Contact request and I’ll be in touch.

Challenges of Transitioning from Executive to Entrepreneur

We love a good small business success story here at Prime Strategies, and open forum’s telling of Charles Henagan’s is a great example of someone moving from executive status to becoming a successful entrepreneur.

Embarking upon what appeared to be his dream job, Henagan was tasked with bringing new life to a legendary brand of vodka. Nearly 50, he was given new life with his exciting schedule of travel, meetings and strategy sessions while staying connected to his younger colleagues over post-work drinks.

Only 6 months into his new role, spirit sales began to sink internationally in response to the recession. As a result, Henagan was let go, leading him from the work force to becoming an unemployment statistic.

Henagan decided against looking for another corporate job in such delicate economic times, so he established Market Edge International, a New York City-based consulting firm that helps clients create sales teams and marketing strategies.

Henagan laments “The U.S. economy is changing so dramatically that in most industries, even when things pick up, the management structure will be fairly flat.” He felt exiting that scene and starting his own company was the most logical and dependable solution.

Not all victims of the down-turned economy have landed on their feet. Flexibility and long-term experience saved Henagan from the unemployment line but for some, starting their own business with a corporate executive mindset is slightly trickier. Most at the executive level are used to collaborating on big decisions and spending corporate money. Having sole responsibility for all decisions and tasks, can be a difficult mindset to accept. Plus it’s tough to deal with the loss of status. Some even experience anger, denial, depression, and so entrepreneurship is not for every transitioning executive.

Henagan, however, considers himself lucky to have made a smooth transition into entrepreneurship as opposed to pursuing another corporate job. He’s busy at work applying his acquired skills and new knowledge to his growing business. It works for him.

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If you’re an entrepreneur seeking help with planning for 2014, Prime Strategies offers One-Day Fast-Track Planning  to guide you in creating a solid Action Plan that will lay the foundation for a successful and profitable year.

BUSINESS LEADERSHIP SERIES:

Financial Planning in Action

Once you have chosen the actions you believe will produce the results you want, it’s time to determine both the projected income from those actions and the expenses that correspond to your plan. This is one of the most important steps in the planning process –and the one where many planners fall short.

Before creating the financial projections for your year’s operations, make sure you’ve researched the costs of carrying out your plan. Let’s say your strategy is to increase the percentage of prospects that are converted to a sale, thereby increasing sales. You not only want to project what that will mean to total sales, you’ll also want to know when the income (cash) can be expected.

Consider the time between sale and delivery (whether goods or services). Let’s assume there’s a one month lag time between sale and delivery. If you carry Accounts Receivable and it takes 60 days from delivery and invoice to receipt of payment, you’ll have a 3 month span between sale and receipt of payment. If any of these are longer, you’ll need to make adjustments accordingly. See why it’s so important to know the timing on each aspect?

Staying with this example let’s make some arbitrary projections based on our plan. You have decided that by increasing the conversion rate of sales you’ll be able to increase gross income (revenue) by $60,000. Your plan to accomplish this is to improve your sales materials and provide specific training to your sales staff and management. The materials need to be created first so the training can take place using the new materials. Here’s the amounts and timing as we’ve determined.

Projected Income (Cash) from Plan       $60,000 ($15,000 each month Dec. thru March)

Costs:

Improved Materials       $10,000  (Costs incurred in June)

Sales Training                  10,000  (Costs incurred in July)

COGS *                           20,000  (Salaries, Product & Service Costs)

Sales Costs                       13,000  (Commissions & Related Sales Costs)

Total Costs of Plan         $53,000

Return on Investment          $  7,000 (11.6%)

*Cost of Goods Sold – This is the cost to provide the product and/or services. It includes related payroll costs plus all other related costs to deliver product or service.

 

By calculating all this in advance you can determine if the return is worth the investment. In our example our return is projected at 11.6%. If you think that is an adequate return, you’ll go forward. If not, you may want to rethink how you can either increase return or reduce costs.

Since the materials and training costs will occur before the income is to be realized, it’s helpful to plot this out by month to see how cost will be covered.

 

                   June              July            August        Sept.          Oct.           Nov.         Dec.

Income                                                                                                                                   $15,000

Expenses    $10,000(a)    $10,000(b) $  5,000(c) $  5,000(c)  $  3,000(c)

COGS                                                                                      $  5,000     $  5,000   $  5,000

                  January         February    March

Income      $15,000        $15,000      $15,000

Expenses   $         0        $         0      $         0

COGS       $  5,000        $         0*    $         0*

(a)    Sales Materials,   (b) Training,  (c) Sales Costs

* In February and March we’ve already completed the services from the initial sales and are finally realizing the return from our earlier investments.

Note: This chart represents CASH outlay and income for the projected period. Sales took place in September through December, but with a one-month delay in delivery and billing and a two month lag on receipts the first cash doesn’t come in until December from a June and July activity.

This is why financial planning is so critical. We’ve got to know how we’re going to cover the up-front costs pending results from our expenditures. We may need a credit line, a loan or possibly an infusion of outside capital. By calculating all this in advance we’ve got time to take whatever action is necessary to cover the costs. Or we might decide to make adjustments in timing so that our up-front costs fall in a part of the business cycle that typically has a higher margin. By playing around with timing, costs, sales and receivables we can create the most cost-effective plan and be prepared for the results.

Of course, you’ll need to do this with each aspect of your plan. It’s helpful to determine cost per unit sold for each different item you sell. And it’s probable that the costs are incremental. Once the fixed costs are covered, the variable costs (such as sales costs and COGS) may become less expensive per unit as the volume grows.

You’ve now created the budget that corresponds to your next year of operations. You have your plan of action with timing of the related costs and income.

The next step I recommend is to enter them on a financial projection spreadsheet that’s also set up to monitor your actual expenses and income as they occur. This gives you an easy way to manage your cash and see how you’re doing against your plan.

Once you’ve made sure you have the means to support your plan, you’re ready to put your plan into action. Yes, that’s our topic for next time.

How to Create a Strategy: A Case Study

Clients often tell me they’re not really clear about the concept of Strategy. It’s a lot easier than you might think. Strategy is one of the steps in the planning process and cycle. The sequence in the business planning process is Vision, Mission, Goals, Strategy.

Vision is where you start and is the most abstract. Once clarified it become the guiding light toward which all your activities will be directed. Your Mission is what you do in your business to carry out your Vision. Goals are specific measurables that define what will exist when you’ve realized your Vision. The Strategy step is the thinking through of how you will achieve those Goals.

Start by considering the resources you have and the direction you want to go. Evaluate various scenarios and steps and predict how they will turn out. An analogy that makes it easier to understand is the game of chess. Various moves are considered with predicted outcomes BEFORE the actions are taken.

Some examples of Strategy might be:

– identify and develop an untapped market (based on observed trends);
– provide staff training and coaching (to strengthen customer service)
– redefine our brand (to fit our updated target market)

Developing a clear Strategy is critical because you’re going to base your Plan on your Strategy. As you know, it’s the activities you carry out in your day-to-day operations that produce the results you see at the end of the month. It is likely that you will have more than one Strategy because you’ll probably have several Goals.

There may be more than one Strategy for each Goal. An example might be to “create a contact database” and “hire a part-time assistant to manage your database”. You’re not actually at the Plan level until you determine the steps you’re going to take to hire that assistant (seek employee referrals, network word of mouth).

Bill Sipes, CPA, is founder and CEO of a community-based Accounting Business, which provides Tax Management, Write-up, Financial Services, Financial Support Systems and Business Valuation. He sees opportunities to add even more services and products and has decided to take on the persona of a Financial Advisor. I’d like to share the story of how he recently developed his Strategy for this business because it clearly exemplifies the process.

When there was an economic downturn in his local community, Bill realized he needed a new Strategy that would “turn his clients into cheerleaders” and turn around his bottom line. He decided to find out where his business had been coming from in the recent past.

He found out he got most business from 3 sources: mailing to professionals, new business/product mailing, and new sales to existing clients.

He called together his staff to discuss his findings and to ask for their help in determining a new Strategy. Following the meeting he sent out a summary of “what he heard” and asked for their continued thoughts. The staff were acknowledged and given a role in the process.

Here’s Bill’s memo to staff.

“Thanks to all. I think this is the most important meeting we have ever had. This is what I heard.

1. We need to separate ourselves from the other CPA firms.

2. Several ways to do this were mentioned. Speed of service was one. Another was building relationships.

3. We are going to develop a system of building relationships with our clients. Jane is going to write a rough script to follow whenever we get with a client…..The Moment of Truth.

4. I am going to ask Annette to print a few banners that say…..The Moment of Truth.

5. Jeff is going to check with the software people about Telemagic and Act.

6. We are going to spend more time “showing our face” in the community and to our clients.

7. When with a client always ask……How are we doing?

Thanks again for a great meeting……which I am sure will lead to a great system that will turn our clients into cheerleaders.”

Here’s Bill’s Strategy.

– Develop a plan to cross-sell existing clients.
– Continue to use Marketing Assistant to carry out marketing campaign to targeted list.
– Make Customer Service visits with our commissioned software salesman to cement relationships and try to cross-sell.
– Hire a commissioned insurance sales rep with a benefits background to sell Long Term Care Insurance as a new service (to cross-sell).
– Redefine our “brand”. Develop our new image to support our updated profile.

He’s building his redefined brand on “trusted relationships”. The staff is very enthusiastic and willing to support each other’s efforts. He also plans to have “Moment of Truth” banners made up to keep the staff focused on what’s important.

Bill is utilizing a Strategy that’s based on research into information about his own business and he has buy-in from his staff. He not only knows where he’s going, he has a Strategy to get there.

How to Create a Marketing Strategy That Delivers

One of the most challenging parts of marketing is creating effective strategies. That’s because it’s impossible to be certain what outcome any given marketing strategy will bring. But there are ways you can increase the probability of success.

First, let’s define strategy and consider why it’s needed.

Wikipedia defines strategy as “A long term plan of action designed to achieve a particular goal, most often “winning.” Strategy is differentiated from tactics or immediate actions with resources at hand by its nature of being extensively premeditated, and often practically rehearsed. Strategies are used to make the problem easier to understand and solve.”

My definition is a bit simpler, and hopefully, easier to understand. I consider developing a strategy as the “thinking” part of the process. It’s where you gather all the pertinent information, analyze it, and then make “informed” decisions based on what you learned. A strategy is an informed decision that provides a framework for actions. [Read more…]

The One Page Marketing Plan – Preparation

The purpose of the One Page Marketing Plan is to simplify the steps of creating a practical plan you can put to use immediately. It can be used to support a marketing campaign or to carry out your overall business plan.

We start by gathering pertinent information and answering specific questions. The purpose of the One Page Marketing Plan is to give you explanations and examples to organize your thinking and direct your actions. You’ll have simple tools that provide a structure you can use over and over again. You are both learning and doing at the same time.

There are only two basic steps in the One Page Marketing Plan process: Preparation and Planning. This article covers the highlights of the Preparation process. During this step you’ll gather critical information about your business and your market. Upon completion of this step you’ll be ready to create a simple and effective One Page Marketing Plan.

PREPARATION

Preparation consists of gathering pertinent information about your business and your market. You want to be very clear about your market position before starting your plan. You also want information about your market and your marketing history. [Read more…]

Got Goals? Here’s a System to Achieve Them

Which of the following scenarios describes you?

* You have specific, defined goals for next year. You’ve quantified and are prepared to carry out a written plan of action.

* You have mental goals that you think are going to take you in the direction you want to go, but you have not been taking consistent action toward.

* You know you should set goals and be working toward them, but you’re not really clear about what you want to accomplish or even what’s realistic.

If either of the last two describes you, I predict you could be in for disappointment come the end of next year. What I’ve learned in coaching business owners is that goal achievement is something everyone knows about and wants, but frequently are at a loss Brain Exchange about how to attain. Goal setting and achievement is a process with a beginning and end point with specific interim steps in between.

The game of football offers a good analogy; always seeking the end goal, but setting and achieving short term yardage goals that eventually add up
to a touchdown.

Continue reading in my blog…

​Are you Suffering from “Entrepreneuritis”?

Today a client introduced me to a new term, “entrepreneuritis”. Since I hadn’t heard the term, I asked her what it was. She said it’s that syndrome that says “I can do it all myself; I want to do it all myself, I have to do it all myself. These are all my ideas, my way of doing things and no one else can do it as well. And I’m feeling overwhelmed because I need to grow my business but I’m so busy doing everything myself, I don’t have enough time to do the things that bring in business.”

Being curious, I decided to do some research myself. There seem to be varying definitions of entrepreneuritis. Robert Sher in his blog article, The Path between Entrepreneuritis and Myopia. says “Entrepreneuritis is where you can’t stop yourself from jumping on every new business idea that pops into your head. Having a clear definition of your business will aid you in steering the course between entrepreneuritis and myopia”. He also warns, “avoid being too rigid in your niche. If you’re not growing your business in some way you’re in trouble”.

The Blue Jeans Virtual Assistant in her blog article, Do You Have Entrepreneuritis? says, “As a small business owner I must learn how to do everything myself (spending countless hours learning it sometimes) and must grab on to each new idea that comes my way or through my inbox, learn it and move on to the next thing. As a result most likely I have a list of unfinished projects on paper, in an idea journal or on the computer.”

Donna Maria calls it Entrepreneur’s ADD and defines it as 1) too many ideas at one time, no execution of any; 2) can’t think what to do with an idea. In her article, 3-Step Cure for Entrepreneur’s ADD, she actually offers some tactics she used to cure herself.

I think all entrepreneurs occasionally have bouts with entrepreneuritis, even if they didn’t know what to call it. Of course, when it becomes chronic, it can become a problem and really hold back your business. Part of the argument I often hear is “I can’t afford to hire someone to do other tasks”. They don’t have the money to pay someone else now, so they just keep doing it themselves. Bottom line: you can’t grow your business until you can begin to hand off tasks. It’s like the chicken and the egg.

I remember the first time I hired someone to help with my e-mail communications. I didn’t really have the money to pay her, but I decided to make the investment in my business. I quickly learned how valuable it was to be able to hand off tasks that had taken me hours to do. Now I had more time to spend on what only I could do in the business.

For some alternatives to doing it all yourself, read my article, Delegation and Teamwork, for some ideas and examples of how to start letting go a little bit and giving yourself the solid support you need to grow. If you’re really serious about getting your business to the next level, don’t let entrepreneuritis keep you down.

7 Strategies to Prepare for Recovery

Road to Recovery.  No matter our circumstances, we all have been affected by the deepest recession in our lifetime. This summer seems to be even tougher than usual for many small businesses.

Now is a great time to take a hard look at the realities that exist, get help where needed and rethink our business strategy in preparation for recovery.

Here are seven strategies that will help.

1. Open a dialog with those you know. Mutually beneficial relationships are now, and always have been, a key to success. Reconnect with former customers, former prospects, business colleagues and friends. Ask about their plans and their challenges. How have things changed for them and what do they need now?

2. Identify your personal value and offer to give that on the terms of your choosing. Incorporate your personal values into your business. Support programs you believe in. Join selected organizations and find a way to contribute your personal value.

3. Expand your network. Seek to connect with those who are either in your target market or do business within it. Be sure to have a follow-up plan for all new connections. Limit time on social media and networking activities to only those that produce results for you. The volume of information and interactions in online networking can be overwhelming, so be ruthless with sticking to your strategies and plans.

4. Consider alliances, joint ventures and partnerships with those already in your network. These are typically low cost, high return arrangements if structured to the benefit of all parties. Such business relationships can provide flexibility, new resources and stability in a sea of chaos. For more information on growing your business using partnerships review my recent webcast,

5. Make informed decisions and take calculated risks. Before making any decisions gather all pertinent information from your business, your market, your community and the economy in general. Take calculated risks based on all the pertinent information you have gathered and analyzed. Consider the risk vs. reward relationship. You’re bound to come up with new options. As some doors close; new ones will open.

6. Remain flexible. Test your ideas on a small scale. Adjust and modify based on what you learn. Make small investments in new ideas. Set very short term goals and determine early what works and what doesn’t. Innovative ideas that prove themselves now could position you to lead in a recovery.

7. Provide yourself with ongoing support. Create a small, close network to help provide perspective. Get feedback on your ideas and concerns. Find out what others are doing that is proving successful. Ask for what you want and need.

These are actually good business strategies for building a strong business in any economy, but they are especially important in maintaining and growing a healthy business now. It’s how many small businesses are taking the lead in creating a recovery for themselves and the economy.

To learn more about business success strategies and actually apply them to your business check out the Business Success System Course. It’s the Prime Strategies self-study program that walks you through the fundamentals of building a strong and profitable business.