Wednesday, February 8, 2012

Plan To Fail: Successful Business Plans Start with Failure


Posted on January 16, 2012 at Enloop.com  |  Written by David Worrell



Welcome to the dark side of writing a business plan. We don’t talk much about it, but the dark, dangerous discussion of failure is an important part of any plan. There are a thousand ways that a business can go off track – a thousand ways to fail. And as miserable as it seems, thinking about failure is as important to your business planning as budgeting and marketing.

How to Plan for Failure
Every startup has weaknesses and investors expect you to cover the “big 6 business risks”: Product or Technology; Market Acceptance; Key Employees;  Competition; and Financing. These risks are important enough to be covered thoroughly, each in their own sections of your plan. There are plenty of other articles about these typical business risks, so let’s go beyond the basics.
Take your strategy to the next level by including less obvious risks in a separate section of your business plan simply called “Risks”. Thinking through the less obvious risks will strengthen your business – and your chances with investors.
Don’t hold back. This is one place in your plan that you can let your imagination go wild. So put on some gloomy music (Amy Winehouse? Pink Floyd?) and imagine all the ways that your business could come crashing down:
  • Supplier Dependence? Sure. If making and delivering your product or service relies on a single key vendor, describe how you will find alternatives.
  • Natural Disaster? Absolutely. If your business would be mortally wounded by an earthquake, hurricane, tsunami or tornado, write it down.
  • Government Regulation? Uh-huh. Just look at Amazon’s battle with sales tax. What could Congress do to your company?
  • Technology Changes? Oooh boy. Now you’re talking. What if Microsoft launches a new version of Windows? What if people switch from PC’s to Tablets? Think about how streaming is killing DVDs.
You get the idea. There is certainly a long list of risks – things that could go wrong. Brainstorm as many as you can, then include your top 5 or ten in the business plan document.

Dodge the Bullets
The point is not simply to list these threats, but to understand how you can (a) avoid them; or (b) adapt
to and overcome them. If an earthquake would disrupt your internet-based servers… you better look at
hosting in multiple cities sooner rather than later. If you are sourcing key parts from just one supplier,
describe where you will find a secondary source if the first one fails to deliver.
Every plan A needs a plan B… and maybe a C, D and E too. The more important a piece of your business
plan is, the more you should reinforce it with contingency plans.

Presenting Failure to Investors
Identifying failure points in your business plan is one way that you are reducing risks for your investors.
But this process can backfire if your contingency plans are too different from your original concept – no
investor wants to hear that Plan A is selling organic vegetables, but Plan B is to host websites.
A great Plan B leverages everything you know and have already accomplished. Remember, Plan B is a
pivot, not a retreat.
Startups are inherently risky. No entrepreneur or investor believes they are not. But there’s a
difference between starting a risky business and starting a business after you’ve identified and planned
for the risks.
So give your business the fighting chance it deserves. Consider your risks, your risk avoidance strategies,
and how you will adapt in the worst-case scenarios. Your investors will thank you, and your business will
be stronger for it.
Dedicated to your (Risk-Adjusted) success,
David
David Worrell provides strategy and finance help for small and medium-sized businesses… and he loves the business planning tools available at enloop. Give your business a rock solid strategy by visiting David at RockSolidFinance.com

Tuesday, February 7, 2012

How Do I Balance New Business Development Versus Day-To-Day Operations? Part 1


Written by Cynthia McCahon

As the founder of a software company that bootstrapped its way to life, I was always hyper-aware of time as a precious commodity. The startup stories you hear about long hours and sacrifice are true—I’ve been through the war and can confirm that you always wish you had more of two precious commodities:  time and money. There never seemed to be enough of either to run the day-to-day operations, much less to develop and execute new business development. Yet the less time you spend on new business development, the less money you generate. Your choices become a matter of priority in your company’s survival.
Determined not to be a statistic on the big heap of startups that wither and die because of missed opportunities, I developed a process for making sure I made time for new business development. Here are the most important parts of my new business development process:

Assign Responsibility
Along the way of launching and running Enloop, I knew it was imperative to make business development an assigned task. Otherwise it too easily falls by the wayside. An effective way to accomplish this is to assign the responsibility of new business development to one person and tie their compensation to the results. In the early days this might be you, which is entirely appropriate. Only you can synthesis the feedback you’ll hear from customers and partners during the course of your new business outreach. As a bonus, you’ll come to understand the intricacies of your business in deeper, more meaningful ways. You’ll find the direction of your company is vastly improved with the insight that new business development conversations afford.

Make Time, Not Excuses
If your business is like most others, the balancing act of just running the company leaves little time for anything else. Remember that the most important task for growing a business is to develop new business. Finding time for this task, which often is relegated to last on your to-do list, can sometimes feel like finding the proverbial needle in a haystack. It sounds obvious, but you must set aside a certain number of hours every week for new business development. Create an on-going schedule of your time and assign new business development to a weekly block of time. Make that block of time a priority on your to-do list rather that an expendable item. Your schedule is one of your most important weapons, so guard it wisely and delegate as many tasks as you can to free up space.

Work Your Network
Developing and working your professional network is critical. Make strengthening your network the top task on your to-do list. The best place to start is with efficient technologies like Linkedin and Twitter. Learn to use these tools and embrace them in ways you never imagined possible. Next, join industry associations and groups that bring you into contact with people who can help you—and that you can help, remembering that networking is a two-way street. Your network can prove to be a lifesaver, as a well-cultivated network brings you exponential opportunities. Work it like you’ve never worked it before. Talk with everyone, including your customers, and listen intently to their feedback. What they’re saying might give you big clues for your next product or market opportunity.


The process of new business development affords business owners a critical opportunity to simply think about their business. By carving out specific, goal-driven time periods for business development you provide yourself with a window into the future of your company and the opportunity to creatively innovate. Give yourself the gift of steady growth through a well-managed new business development that’s smartly integrated into your day-to-day operations.
Posted on February 1, 2012 at Enloop.com. Cynthia previously posted this article on SCORE's Small Business Success Blog

Publisher's Page - January/February 2012

Barbara Oliver
Barbara Oliver
The American Contract Compliance Association will mark their 26th Anniversary National Training Institute in Philadelphia later this year. The event is designed to educate a new generation of contract compliance and supplier diversity professionals about their history and to "rekindle the spirit, passion, energy and commitment for economic empowerment."

We sometimes forget that there are more "newbies" to contract compliance and supplier diversity, and less of us veterans who know the history. As one such advocate put it, "Not everyone knows what M/WBE even stands for. These same folk certainly don't understand what it was invented for, [or] the value of it."

This is not to say that these new advocates are not passionate and committed, but many have been thrown into their positions with little understanding of what they are fighting for. It is incumbent on MBE magazine, and those of us that truly understand, to teach the lessons we learned from our struggles. In this case, there is absolute truth in the saying, "Those who cannot remember the past are condemned to repeat it."
The above-mentioned advocate took it upon himself to share some of his wisdom in subsequent postings, which MBE magazine has shared this month on our LinkedIn group page and our blog at http://www.minoritybusiness.blogspot.com/. He references Croson and Adarand, two of the most influential court decisions, affecting contract compliance. MBE magazine reported extensively on these decisions, what they meant, and their likely effects. We will share these on our blog as well as new Google+ site.
If you are a supplier diversity advocate or minority or woman business enterprise in need of a refresher course, I encourage you to visit our social networks and join the conversations going on now. You may be surprised by what you can learn.

Thursday, February 2, 2012

Addressing an Often-Overlooked Risk


Submitted by Marland Richardson
 
You try to protect your business against as many risks as possible as you grow and seek to take on bigger projects. But when it comes to key employees who are critical to your company’s success, there might be more risk than you think.
The death or disability of a key employee can reduce the earning power of any business in the short run. For smaller businesses, it can have a more dramatic effect, and even threaten the company’s stability if it happens at the wrong time; especially when dealing with Federal Contracts. This can also be true for other key
contributors such as co-owners or board members.
Addressing these risks with insurance is simple in theory, but determining the right kind of coverage for each key person requires careful analysis, best undertaken with the assistance of a trusted financial professional with specific training in this area.
Having the foresight to protect your business against the loss of a key employee – perhaps a company's most valuable asset – can mean the difference between business as usual and closing up shop. Some important questions need to be faced in order to ensure the business can continue and thrive if the unexpected should occur:
• What value does the key person bring – creative genius, sales acumen leadership qualities? And, what are those characteristics worth to the business?
• How much revenue could be lost before a replacement can take over the role?
• How much will it cost to recruit and train a replacement?
• Will clients lose confidence in the company?
With the help of a trained professional, you can estimate the financial impact on the business of these and other factors, and put in place effective life and disability insurance policies, as well as appropriate legal agreements and/or trusts as needed, to help ensure those costs are covered.
No one wants to imagine the worst. But making a plan for your business to survive is always a good decision.

Richardson is a Financial Advisor with WestPoint Financial Group, a MassMutual Agency. WestPoint has expertise in helping businesses protect the investment they have made in their business through various growth stages. These polices have exclusions and limitations. For costs and complete details of coverage, please call Richardson at 317-469-9999 ext 353 or e-mail marlandrichardson@finsvcs.com.

© 2011 Massachusetts Mutual Life Insurance Company. Insurance products issued by Massachusetts Mutual Life Insurance Company, Springfield MA
The information provided is not written or intended as specific tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalties. MassMutual, its employees and representatives are not authorized to give tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel.