5 Stages of Business Growth: 2nd Stage: Concept to Reality: Understanding your resources
Updated: Jan 31, 2018
PLAN YOUR BUSINESS:
Consultants – you must get one, doesn’t matter what stage you are in get someone who knows what they are talking about, they will save a lot of time and money for you. The main thing you need from them is at least an hour for them to present their offering and a list of everything they will provide for their time. THEY ARE NOT DOING YOU A FAVOUR!! You pay them, means they have to deliver. You wouldn’t go to supermarket and beg them to sell you grocery items??
Outlining what you are doing, how you are going to achieve it and your goals. The business plan is for you more than anyone else. The only thing a bank manager or investor is going to want to read is your 1 page summary and your financials, if that doesn’t gage interest, they won’t look at anything else. Anything more is just wasted paper. The business plan is the first step in outlining and defining your mission and business goals. Some have 5-6 pages, others have 40 pages, there have even been some approaching 100 pages. However large you decide to create one, you need one.
Front Cover – your first chance at grabbing people attention
Summary – of your business, what your intentions are, your goals and what you are looking for
The Business - This section should briefly describe the purpose and goals of the business. Whether or not the business has started, explain who owns it. What was the trigger to launch the business?
Product or Service - Describe what you are selling, or intend selling, in language which any reader will understand. If it’s an app don’t use words like JAVA, VB Studio, DB
The Market – competitors, customers, primary and secondary research. How big the market is, is there a need for this? Potential barriers to entry. This is a big part in validating your business for go.
Marketing Plan – Translating your purpose of the business in to a mass market understanding. Objectives should be quantifiable, measurable, challenging and achievable. Typical objectives might be profitability, sales growth, diversification and improvement in market share.
The marketing plan to achieve these objectives should be described using the 4Ps. Product, place, price and promotion
Management and Organisation – who will you be working with and the structure. How will the structure exist?
Break-Even Analysis - Once you have worked out your likely costs, and determined the price at which you will sell your product or service, you can work out exactly how much you need to sell in order to cover costs
Financial Forecasts – cash flow forecast, typically 5years, but 18 months would suffice.
Sensitivity or Risk Analysis – Sensitivity analysis looks at “what if...?” questions. What will be the effect, say, of a 10% fall in sales or a 20% increase in raw material prices? You can help the business plan appraiser by briefly considering such questions yourself and assessing the likely risks particularly of falling sales or rising prices.
Financial Requirements - Indicate how much money or other assets will be invested by yourself (and any partners).
Appendices - Keep any additional material to a minimum. You may find there are some aspects of your business where more background information might be helpful, but don’t regard this as an excuse to include everything.
In describing your business, in highlighting the features and benefits of your product or service, in demonstrating your knowledge of the market, in providing details of actual performance or forecasts of potential and in demonstrating your willingness to take risk, you have prepared a business plan.
MANAGING YOUR EXPECTATIONS:
Is this going to be funding your life and how? Be realistic in your understanding of the business. Don’t be a dreamer. The reality is that you will not be making money to sustain your normal life for at least a couple years, sometimes even more. Be prepared to adjust your expenses.
How and who will manage the business? How will you set it up? Business types. Is it a good idea to bring in partners?
One thing that will cause people to stop, is their fear of finances, which has a knock on effect on “is this a good idea”, “how will I manage the stress”.
If you are not stressed, if you don’t have pressure, if you are not challenging yourself, if you are not in pain….you are doing something wrong. This is the hardest thing you will do in your personal life, ever!! People do not become successful without sacrifice. Push yourself to the limit.
I’m not a CEO, Director, Manager, who will teach me? If you are not strong enough mentally, get yourself a strong mentor/consultant. You will lose out on more than your ego if you don't.
Hiring, contracts, regulations, firing, HR department, how do you cope and manage a team?
Apprentices, interns, graduates and experienced workforce. The more experience, the more expensive. ONLY GET INVOLVED WITH GRADUATES, INTERNS AND APPRENTICES, if you have the time, resources and patients to train them. Recently I had a client who wanted apprentices and year out placement people. I asked from the outset about pay, he said I’ll take care of that. Towards the end of the selection process and after about 40 interviews, he tells me, you don’t need to pay them they will work for free.
Hiring people is not a game, nor should you be looking to exploit. Young people are amazing and can be more valuable to you than “adults”, but you need to dedicate your time and effort on them, thus assigning, in your business plan, this additional resource.
I once worked in a company full of apprentices, they worked for peanuts and were expected to work like huskies and as a result, they hated their experience, their jobs and their bosses. The young have amazing viral power, this is bad publicity and ultimately bad for your future success in sales as well as hiring.
Always think scaling – how you train your current receptionist/hr/sales/marketing all in one employee will be the way that you will want all your employees to be trained and act. If you want to instil this philosophy, you need to do it from the start. If you don’t care about how you get the job done at all costs, then ignore this advice.
BREXIT & OTHER UNEXPECTED INSTANCES:
How do I know the market will look? If I knew this, I would be in stocks and shares business full time and sitting on a swimming pool of money. There is no way in knowing how the markets will look, you just have to put contingencies in place and keep sharp. You are a business person now and you will have to know your industry and the economy on a daily basis. Either sign up for market data agencies like Bloomberg, DeLoitte, Gartner, Euromonitor etc and get up to date information or ensure you read up. Know what is happening in the economy.
Brexit is major alarm bells right? No, it is merely a decision made by a PM who didn’t actually know why and a bunch of activists who also didn’t know why or how it will effect us all. The point is, it will have no bearing on your business, as long as you put contingencies in place to react to the changes. The longer you leave it, the bigger the effect, just like a cough, the quicker you treat it or get it seen to, the better.
Find out your USP’s first of all – unique selling points, these are bullet points of great things about your product. From this, use each point as an activator to start writing your sales pitch. I have never wrote a sales pitch, I have merely used the points and talked on each bit.
Why are these points so important? Because they are also your objection handling rebuttals.
What is objection handling? this is when someone says no, I don’t need it, I don’t like it, I hate it, get off the damn phone you idiot.
There is no such thing as a sales pitch that will work forever. It will be required to change as you evolve. People will get wise. How you sell is also an indicator of your business ethos. Reputation on your sales techniques will also spread.
FAIL: Never give up because F.A.I.L “First Attempt In Learning”
END: Is not the end “Effort Never Dies”
NO: If you get a NO, it means “Next Opportunity”