by Ken Ingram
Just about every business owner I know has a story about how they started their business and how hard they have worked to create sustainable growth and security for their family. The long and winding road for each of them is a source of pride. The many obstacles and hurtles they have had to jump through on their way to success is remarkable and admirable. The journey taken can perhaps be compared to the growth of a tree. Initially it is scrawny, lacks leaves and does not have the strength to resist the wind so it bends easily back and forth when the wind blows. Over time the tree matures; the trunk grows in diameter, it grows branches and develops many leaves on its way to good health. The roots grow deep into the ground and it has its place in the world, where it belongs and where it is growing.
For decades the process of starting a business, like growing a tree, has remained the same. You need to decide what you want to do need to do and can do. You need to decide what two or three segment of the business you want to address and where to start. This knowledge is captured in a business plan which acts as a stimulant to growth. Your business model needs to include who your key partners will be, what your key activities will be, what are the customer segments you plan to have, what channels you will establish to direct sales toward your business, what your cost/pricing structure will look like. Most importantly, what will be your value proposition; why a customer would chose to do business with you as compared to a similar business down the street from you.
Every business is and should be unique so take the time during the business plan process to define what you are about. I often find when talking to business owners that they just jumped in without taking the time to consider ‘the plan’. The idea to start a business was done at the kitchen table and drafted on a paper napkin. Three years later the business is still struggling to break even and all they have done was to create a job for them self not a real business. It is funny (in a sad sort of way) how one of the most important decisions people make is left to chance and is threatened each time the wind blows. You need to build your business in such a way that it can grow to be as strong as a tree.
The pace of change today is running at such a high rate that it is easy to become unfocused and stressed. Studies have shown that seven out of 10 of us are working harder than in the past just to keep-up. So many of us are not realizing the benefits of owning a small business and we have lost our personal and professional balance. It is no wonder that from a financial point of view things have gone off track. Can we realign ourselves? I believe that it is possible and my suggestion is to ask yourself “do I have a simple, and easy-to-understand plan for to ensure my business will succeed?”. If the answer is no then go back to the basics of writing your business plan all over again and please do not forget the how will I do it part. This is your marketing strategy.
The business plan is the idea your marketing plan is the how to. The great thing about the re-alignment is when you started the business you did not have historical data to draw on. Now you have accounting records of your revenues and expenses to predict more accurately the future. This should help you to build a bigger better business. Great businesses stay on top by maintaining focus. In the book ‘How companies win’ by Rich Kash and David Calhoun, they talk about two types of customer analysis.
First ‘The Demand Gap’ Analysis’ which is essentially the distance between what your customer wants and what it gets from you or your competitor. Second ‘The Customer Demand Analysis’ which is designed to determine who the most profitable customers are. With this knowledge you can contact them and gain valuable insights into why they chose to do business with you. We all have high levels of competition and it can be even greater in industries where the start-up cost is low. As I have said in the past it takes guts to be in business. You need to have the support of your family, bank manager, and accountant. These are key resources that will help to ensure the strength and sustainability of your business. So one of the best ways to move forward in today’s challenging environment is to go back to basics and write your business plan all over again, especially if it was started at the kitchen table on a paper napkin.