We choose to go to the moon and do the other things not because they are easy but because they are hard.
- President Kennedy’s “Moon Speech” September 12, 1962
A fundamental executive leadership challenge is finding the right balance between focusing on what is "core" to one's business and investing time and resources into pursuing adjacent and complementary opportunities to it.
Examples of this include:
On the surface, all of these “adjacent” opportunity pursuits seem worthwhile.
They build on business assets and trade secrets, they often leverage "remnant" organizational resources, and diversification of revenues and customers is a sought after business goal is it not?
It can be, and yes effective executives should always default to a positive and optimistic mindset toward opportunities but...
...they obviously must be the right opportunities to pursue.
A simple “Acid Test” way to rate opportunities is to ask two questions:
One, is the opportunity one in which my business can truly be best-in-class?
And two only if the answer to the above is yes, are the market dynamics for the opportunity favorable for its pursuit?
I call these the internal and external opportunity acid test questions.
Internal in their inward look at the real strengths of a business and its people.
And external in their evaluation of the market landscape in which that business competes.
The internal acid test is easily performed by listing the business’ key strengths, like:
As we list these strengths what will arise will be “non obvious” wisdoms as to the likelihood of a successful pursuit of the considered opportunity and perhaps more valuably...
...“aha” moments as to other, more appropriate opportunities for the business to potentially pursue.
“Potentially” is the important word here, because in addition to the opportunity passing an internal acid test, it must also pass an “external” one too, with questions like:
Market. How big is the market for the opportunity? How expensive will it be to pursue?
Customer. Who are its customers? How pressing is their need? How hard are they to reach?
Competition. In our global age, by far the most important question - and not coincidentally the one that most executives do the worst job in asking - how strong and formidable is the competition?
What advantages - first-to-market, brand, relationship, cost structure, etc. - does the competition have that we will need to match and beat?
What points of differentiation must we build and emphasize to successfully compete and win?
As we honestly ask these competitive questions, very often discouragement can set in.
Everything can just seem really hard.
But this sad feeling is actually a good thing.
Because as we work through the discouragement we really learn if we have an opportunity worth pursuing or just a passing fancy.
If it is just a passing fancy, then we will quickly move on to the next bright shining object that passes our way.
But if it is an actual opportunity, then the internal and external challenges that present themselves to pursue it will embolden us to roll up our sleeves and go for it.
For sure, successfully pursuing any new business opportunity is hard.
But let's never confuse hard with impossible.
By properly performing these internal and external acid tests, we can distinguish between hard and impossible...
...and then relentlessly put forward our best energy toward going for it, crushing the competition, and winning!
Crowdfunding is getting a group of regular individuals to collectively fund your venture. And when I say "regular individuals" I am contrasting them to professional investors and lenders like banks, venture capitalists and angel investors.
Clearly, Crowdfunding gives the key benefit of providing funding to your business. But, I have found other key benefits. Below I list those benefits as well as 5 keys to successfully raising Crowdfunding.
5 Benefits of Crowdfunding
1. Market Research
Pre-selling your product is incredible market research. If people buy it, then your marketing message is on target and there is a real need for your product or service.
If people don't buy it, then maybe a market doesn't exist, or you need to adjust your marketing message or target market.
In either case, getting this market research BEFORE raising or trying to raise a ton of money is invaluable. It allows you to test whether you have a winner before going through this process.
2. Built-in Customer Base
When you get others to fund you via Crowdfunding, you build a customer base. If you provide a good product or service, these customers will be prone to buy more products and services from you (the same products, upgrades and/or new products you develop) in the future.
3. Case Studies/Testimonials
Showing case studies and testimonials from customers is a great way to convince new customers to buy from you. And you can get these case studies and testimonials from those customers you gain from Crowdfunding (assuming you delivered them the product/service and they liked it).
4. Word of Mouth Marketing
People who fund your company will tell their friends about it. Particularly if you make them feel like founders/initial investors (which you can easily do via email and on your website).
Done correctly, Crowdfunding can result in thousands of customers, most of whom can tell numerous friends and colleagues about your products and services. This word of mouth marketing can be worth millions of dollars.
Local media sources are enamored with Crowdfunding as it's new and unique. As a result, countless entrepreneurs who have raised Crowdfunding have been profiled in local newspapers, radio shows and TV broadcasts.
So, with some legwork, raising Crowdfunding can get you lots of PR.
So, now that you understand the benefits of Crowdfunding, how do you raise it? Below are five keys.
5 Keys to Raising Crowdfunding
1. Inspire People
When you tell your "story" to potential crowdfunders, inspire them. Yes, they are investing in your product or service, but they are also investing in you. Give them an inspiring story about yourself and why you are building your company. Inspire them to want to help you.
2. Provide Value
When people crowdfund you, they need to get something in return, such as equity in your business or your promise to give them a certain quantity of the product or service you create. Make sure potential crowdfunders feel they are getting value for their investment. If not, they won't fund you.
3. Create Social Proof
Social proof is the psychological concept that if someone sees someone else doing something, they are more prone to do, or want to do, that same thing. For example, a line outside a bar shows social proof that the bar is hip/cool/the place to be, and inspires others to want to go inside.
Social proof can be created in Crowdfunding. Here's how. As soon as you launch your Crowdfunding project, get as many of your friends and family as possible to fund it. Then, when others that don't know you go to your Crowdfunding page, they will see that lots of other people have already funded you. This will make them much more likely to fund you too.
4. Market and Build Buzz
Even if you have the coolest company, product or service in the world, chances are that crowdfunders won't automatically beat a path to your door. Rather, you need to market your Crowdfunding raise. Email all your friends about it and tell them to do the same. Tell everyone on Facebook and Twitter about it. And so on. Even if your company is buzzworthy, you need to first create the critical mass of people who know about it and can spread the word. So make sure you do just that.
5. Don't Slow Down
Once you start getting more and more backers to your Crowdfunding campaign, don't just sit back and let the money roll in. Crowdfunding is a fixed-term capital raise. For example, on Kickstarter, your Crowdfunding campaign can only last 90 days. So, once those 90 days is up, you can't raise more money (you'd have to start and market a separate campaign later). So, during the campaign, try to raise as much money as possible. Communicate with those who have backed you. Thank them and tell them to tell their friends to back you too. And make sure they don't have "buyer's remorse" - assure them that you remain steadfast in achieving the vision you laid out when you convinced them to back you.
Crowdfunding is an exciting new source of funding with many benefits. To get it, prepare yourself and follow these steps.
Want Crowdfunding for your business? Check out Crowdfunding Formula. The program is a series of videos I recorded that walk you through each of the 14 steps to raising rewards-based Crowdfunding. Many of you have already joined the program and raised money. If you haven't, click here to get Crowdfunding for your business now!
In this article, I'm going to give you the secret to highly effective marketing.
Let me start with an example.
Let's say your competitor runs an advertisement that reaches 10,000 target customers and gets these results.
Assuming the ad reached 10,000 target customers, your competitor's gross profit from the ad would have been $8,662.50 (minus the cost of the ad).
Now let's assume that your company did a 20 percent better job on each of these factors. Your results would be as follows:
Now let's look at the results.
If your ad reached the same 10,000 target customers, your gross profit would be $19,596.
That's 2.3 times greater than your competitor's.
Now, what would happen if you generated 2.3 times greater profits than your competitors every time you ran an ad?
The answer is that you would absolutely dominate them.
Now, the key marketing secret that I'm sharing with you here is that you don't have to revolutionize your marketing system. Rather, small, 20% improvements in each part of your system lead to revolutionary results.
So, here are some ways in which you can improve each part of your marketing system:
The more you know about your customers' wants and needs, the more easily you can design advertisements that appeals to them.
And the more you know about them, the better you could craft a unique selling proposition (USP) to attract them.
For example, if you are local hardware company and you know your typical buyer is a busy male with a wife, kids, and dog, you could easily craft ads with a higher response rate.
You could also boost response rates by developing better offers that attract customers, such as an offer for a 90-day money-back guarantee.
Remember, conversion rates are the percentage of prospective customers that you converted into actual customers.
A few ways you could increase conversion rates include having a better process in place for training your staff and sales team, providing better employee incentives (e.g., commissions or bonuses for closing sales), or by developing and testing sales scripts that boost results.
Number of Widgets Per Buyer
To increase the number of units purchased per transition (including purchasing more widgets or related items), you can rely on similar tactics to increasing conversion rates such as better hiring, training, sales scripts and so on.
Remember McDonalds doubled its profits when it started asking "would you like fries with that?" and increased them again when it starting asking "would you like to supersize that?"
Better systematizing your business and implementing the right processes and procedures will allow you to generate higher profits per sale than your competitors.
Finally, to increase repurchase rates, do a better job of communicating with your clients and showing them how special they are. For example, send them emails, call them, or send them letters in the mail to educate them and remind them that you have products and services that can help them.
As you just witnessed, making small improvements to each part of your marketing system is incredible powerful and massively increases your profits. If you want to learn more, check out our "Double Your Profits" program which provides detailed training on how to make these improvements in your business.
Last week, I wrote about the Business Physical and of the importance of evaluating a business’ “red,” “yellow,” and “green” areas and proceeding, changing, and innovating accordingly.
As I wrote that post, the most surprising presidential election result of my lifetime took place.
Along with the political change that it represents, so does it foretell a changed landscape of opportunity for businesses of all types and sizes.
This changed landscape starts with the various prognostications on “industry” winners and losers.
Potential winners include pharmaceuticals, infrastructure, and traditional energy, and potential losers include renewable energy, carmakers, and real estate (on fears of higher interest rates).
But let’s note well that these prognostications should be taken with a big grain of salt, as they are made by the same set of pundits that got the election results so wrong to begin with!
But there is one thing as businessmen we can be sure of - that with change in Washington - like with big change of any type - comes big opportunity.
Yes, much of this opportunity will flow from changing federal government policies, but the election result should also be a wakeup call to “reset” on business as usual.
A reset where we reflect on the idea that no matter how long things have been done a certain way - and no matter the conventional wisdom as to how they will continue to go - change is always only a moment away.
As businesspeople, our first responsibility is to find the opportunities in these changes.
And to then act on these findings with velocity and determination.
Here’s three ways how:
#1. Do that Business Physical. As I outlined last week, positive business change starts with undertaking a structured and thorough review of “where things are now” in a business and its marketplace.
A quality business physical drills down into the real value drivers of an enterprise, how to enhance them and how to fend off the constant existential threats to them brought on by fast changing markets, competition, and customer preferences.
Do the physical yourself, or reach out to a qualified advisor to do it for you.
#2. Challenge the Conventional Wisdom. Whatever’s one’s politics, everyone should reflect long and hard on how wrong the “conventional wisdom” was as to the election’s course and result.
As it does in politics, in business echo chambers of opinion and consensus can quickly get formed and hardened
But just because everyone believes something to be so doesn't make it true!
A great exercise to breakthrough “stuck” thinking is to look at our business and our options from a “tabula rasa” place - letting go of legacy considerations, sunk costs, and the various frustrations of things that just didn’t work out - new hires, product launches, sales campaigns, etc.
As we let go, we start to see the choices and opportunities available to us from a fresh and “future forward” place.
Yes, the realities and limitations of our business model and marketplace will come rushing back to us, but it can be surprisingly high ROI (and exhilarating!) how far just a little bit of pure visionary thinking can take us.
#3. Hard Work Trumps All. Whatever one's politics, the energy and work ethic displayed by both candidates through the long and intense campaign season - unceasing 18+ hour campaign days - should be inspirational to all.
And these were a pair of 70 year olds!
Balance is an admirable life goal, but there’s also a time and place for intense “24/7” effort as so many endeavors of potential greatness cannot be achieved by any other means.
So let’s use this “Black Swan’ election as a spur to take stock of where we are, to let go of the conventional wisdom that might be holding us back, and work hard, hard, hard.
And let's all hope, believe, and act to make it so that the New Year and the new regime in Washington brings high ROI change to all of our businesses too!
Positive business change starts with a full and complete understanding of what the bottlenecks to positive change are and what can/must be done to remove them.
This may seem obvious, but I am constantly surprised by how many otherwise experienced executives invest time and resources into mission-critical initiatives without understanding the right business levers to pull (and how to pull them!) to transform the mere hope of positive change into its actual reality.
This process of understanding I call the "Business Physical" and like a personal health physical when done right it:
1. Identifies the Green, those areas that are working - i.e. things like good exercise and diet habits in a personal health physical that should be maintained and built upon.
2. Identifies the Yellow, those areas where as a business we are falling short and corrective measures are needed - i.e. like when a health physical comes back with high blood pressure, high cholesterol readings, etc.
In a business physical, green and yellow areas include things like:
And as in a health physical, these green and yellow areas yield mostly “keep on keepin on” suggestions. Keep leading with ethics and enthusiasm. Keep satisfying your customers. Keep close to the pulse of your market.
3. And most importantly, the business physical identifies the red areas, those heavy matters that if not fundamentally addressed will lead to the business' demise and death.
Here the analogy would be as when a health physical so very distressingly turns up life-threatening conditions like heart disease and cancer.
Now it is in these red areas where the analogy between a business physical and a health physical needs an important clarification.
You see humans are incredibly resilient beings. We can take hard punches, stay standing and when all is said and done recover pretty darn quickly.
Businesses are more fragile - they stop breathing when the cash runs out, which can and does happen to even the strongest of companies.
This fragility is heightened by the nature of modern business competition.
Blessedly unlike the vast majority of human beings on earth every modern business has dozens, hundreds, sometimes thousands of other businesses out there relentlessly trying to kill them!
Because of this fragility and the “only strong survive / fight to the death”nature of our modern marketplace, as business leaders we must always be super vigilant to the “existential” business threats surrounding us always.
Identifying these threats is core to a quality business physical - even to the point that if those threats are deemed too great to overcome the recommendation can be to sell or close the business.
But far more likely will come a series of recommendations and suggested tasks and projects that can and will make things better.
Some of these will be “Business Internal” - like tending to our financial health, to our culture, to the satisfaction of our clients, to the effectiveness of our organizational processes and accountabilities.
And some will be “Business External” - like tending to the positive attributes of our brand and reputation, to the “conversion efficiency” of our marketing and sales regimes, and how we leverage these assets in toward healthy growth.
When done right, a quality business physical spits out a list of specific projects and to-dos for executives to work on right away to make things better- more profits, more assets, more overall sustainability and longevity.
I encourage all executives and business leaders of ambition, especially this time of year, to submit their companies to a thorough and complete business physical.
It is almost always transformative and revelatory in its own right, and can quickly put a business on the correct path towards improved shorter term results and longer term health and growth.
Last week, I met for dinner with a longtime client as they traveled through Los Angeles on a stop-over on their way back to Europe.
It was both by design and natural inclination of all involved, a working dinner where the main topic of conversation was the client's business model in all its permutations - new market penetration and geographies, new product development, prospective new hires, growth-by-acquisition opportunities, establishing Newcos to house new technologies, discussing the personal exit plans of the company's founders, and on and on and on...
It was also meandering, energy was fruitlessly expended on ideas without reasonable probability of success, and was distracted throughout (pleasantly so!) by more "prosaic" conversation around food, wine, travel, family, sports and more.
AND it was probably the most productive two hours any of us had all year.
Because while enjoying a tasty meal in a beautiful restaurant, we organically arrived at a killer marketing idea worth potentially tens of millions of dollars.
By organically I mean we came up with it through a classic “thesis, antithesis, synthesis” back and forth.
The company’s sales manager shared some remarkable research that showed that while the “conventional wisdom” was that the company’s market space was in free fall and under severe “legacy” pressure, in actual reality the market was experiencing solid, and in some areas, unprecedented growth.
As we digested these eye-opening statistics came the "after-the fact obvious" idea of sharing them in a way that would paint the company's seemingly legacy offerings in a future-focused light.
First, through featuring these insights across the company's various marketing platforms - in its marketing and sales collateral, its white papers and case studies, in its email newsletter, and potentially in the its tag line and logo.
And more excitedly, through the development of a new product with a market potential many times greater than the company’s current core offering.
To give some idea as to the power of this idea breakthrough, it had the company’s CEO and Founder - and note that is a 20+ year old, 8-figure in revenue and very profitable business - thinking about changing the name of the company to leverage it.
This was obviously a very high ROI outcome from a simple dinner, but there was another outcome that was arguably even more valuable.
You see this wonderfully animated dinner discussion inspired that most magical energy to be found in any gathering of humans - a sense of BIG possibility.
The possibility that the future will be better than the past.
The possibility that we, as a team, have the right stuff to win and do great things together.
The possibility that technology can just not be a threat to an older line business, but instead can open up avenues of new opportunity for it.
And the possibility that even if we don't have at hand all of the solutions to our problems, that we can put our heads together and find them.
It doesn't always work.
As often as not those ideas arrived at after the third glass of wine don’t seem so hot in the cold light of morning.
Or if they do hold up, actually acting on and making them happen falls by the wayside for the various excuses and reasons.
And sometimes the ideas just don’t work.
But my experience is that as the seriousness and earnestness of purpose of all involved in a brainstorming/ideation session goes up, up, up...
....the likelihood of these “false positives” goes down, down, down.
I highly encourage all executives of ambition to bake more of these kinds of sessions into their normal business days and nights.
To do so alertly, with great stamina, a strongly positive mindset, and with a firm faith that answers ARE out there.
These sessions can and should be as much fun as one can have in business...
...and lead to breakthrough ideas, strategies, tactics and initiatives unreachable through any other means.
[To listen to a recording of the webinar, Click Here]
The artificial intelligence (AI) market is projected to grow extremely rapidly - from approximately $800 million this year over $5 Billion by 2020, a growth rate of over 50% annually (IDC).
AI Sectors leading the way include healthcare, advertising, security, education, e-commerce and robotics, with key business and consumer applications including virtual agents / chatbots, natural language processing, personalization of user experience, and process automation.
Perhaps more than any other next generation technology, AI applications like the above are making meaningful profit and loss impacts right now for businesses of all sizes.
Webinar Recording: Entrepreneurial and Investment Opportunities in Artificial Intelligence
You’re invited to listen to a recording of the webinar, via this link, where a select group of AI entrepreneurs who will share how they and their companies are winning in this incredibly dynamic space.
My panelists include:
On the web conference, our panelists will share:
Listen to the Webinar Recording via the Link Below:
“The chief business of the American people is business.”
- Calvin Coolidge, 1925
“I went back to Ohio / But my city was gone”
- The Pretenders, 1984
My 1980’s childhood growing up in Worcester, Massachusetts was a blessing that perhaps I never fully appreciated until having sons of my own, now ages 9 and 10, and especially so through the darkness and despair of this political season.
It’s just hasn't been easy to try to explain to them how the nation I love so much - the nation of Lincoln, Jefferson, Roosevelt, and Washington...
...has come to this.
National conversation so unattractive - from its lack of intellectual rigor, of manners, and of even lip service to that most blessed of American virtues -freedom and the role that limiting the size and scope of government plays in its preservation.
So as a father and a businessman, what is the best explanation and response?
How do we communicate and embody that beautiful and so admirable concept of Virtue, the “sense of our own interest in the preservation and prosperity of a free government” without sounding like a total hypocrite or a “martyr” through standing on principle as others propel themselves forward on bread, circus and nonsense!
Now, both by constitution and choice I pride myself as an inveterate optimist but try as I might I can’t reframe this in a fully positive light.
Something very special, civic idealism, has been fundamentally lost.
I feel this loss badly for my sons, who unfortunately will not grow up in a world as I did where admirable role models could be found in the national conversation.
These modern times of ours, so empowered by technology, are filled with inspiration and empowerment like never before.
We just need to find them in different places.
Places beyond the standard societal institutions, beyond government and traditional education, religion, and health care.
I mean really, who do you think is more likely to solve the challenges of modern transportation - innovation master companies like Tesla and Uber, or the State of California and the National Highway Administration?
Or address the challenge of delivering high quality, low-cost health care - legendary winners like Apple and Walmart or the AMA and the VA?
Or, for peace and friendship amongst people and nations - Facebook, LinkedIn, and Airbnb, or the fundamentally conflicted synagogue, church, and mosque?
A pair of important points to be made here.
First, all of us, through connections made around the world for business and pleasure by the click of a button, are able to be empowered and inspired in ways big and small.
So while it is sad that my sons will not get to live in that decent, homespun, and wonderfully dignified America of Arnold Palmer and Vin Scully, it is beyond awesome they will live in a world connected, working and playing together like never before.
The second point is that developing personal and professional proficiency in this brave new world is a beyond full-time vocation, habit, and way of being.
Doing so can and should easily “crowd out” any / all time and energy wasted in following and engaging with that which passes as “news.”
So sure, it is sad that our national life has come to this.
But this discouraging reality is far outweighed by the world of commerce, connection, learning, doing, possibility, and inspiration only growing more remarkable and awe - inducing by the day.
I suggest focusing on the latter.
Both your psyche and your wallet will thank you.
Last week, I wrote about how and why the most prized, but often overlooked asset of any organization is its capacity to change and innovate.
But as I wrote in that post, innovation can be a scary and often misunderstood word and concept.
And unfortunately many entrepreneurs and executives who otherwise could be excellent innovators and change agents simply are NOT, and thereby their companies suffer.
The key idea is that innovation isn't that hard and is well within the ability and capacity of any executive of serious and high stamina ambition. Simply:
Business Innovation is...
...accepting that it is impossible to do something new in a business - a new marketing campaign, a new hire, a new product launch - without also accepting that that new thing has a significant probability of not working. And doing it anyway.
Business Innovation is not...
...positive thinking that sits in a vacuum. Yes, the effective executive always focuses on opportunities and not problems. But when leading change initiatives, he or she does so with both a thoroughness of preparation and mature respect for competitive challenges and realities.
Business Innovation is...
...understanding that all modern companies are technology companies.
That technology may be in actual hardware and software sold to customers, or in how an otherwise "low tech" business utilizes it to improve the efficiencies of key work processes - marketing, sales, operations, organization design, customer service, etc.
Business Innovation is not...
...believing that one’s own business, because of its age, its type of work, its bureaucracy, is permanently "stuck" and incapable of changing and growing.
Rather, Business Innovation is...
...believing in the power of "cascading” change - small improvements that on their own might seem insignificant, but because of their “multiplier effect” on other key processes, have a dramatic impact on growth and the bottom line.
This is particularly true in our digital business age because as we increase our marketing to sales conversions percentages only slightly, we are in turn able to increase instantaneously the size of our marketing budget, which in turn immediately grows revenues and gross profits.
However, Business Innovation is not...
...believing that we are just one change away from breakout success.
The sturdy and wizened modern executive recognizes that no one business breakthrough - that new product launch, that great new client (or hire), raising growth capital, etc. - ensures our ultimate success. Modern competitive forces dictate otherwise, so the best we realistically can hope for is temporary success from any one innovation.
Instead, Business Innovation is..
...with the whole of our professional being committing to ongoing change attempts, i.e. that the very definition of what makes up a honest day's work includes examining with a cold, dispassionate eye all of our work processes, and then every business day acting to improve one or several of them in ways big and small.
But Business Innovation is not...
...believing we have to come up with and make happen all of the positive change in our companies on our own.
Help is always available, from our work colleagues of course, and also from the limitless universe of "around the world" consultants and contractors accessible to us at the click of a button.
Yes, the Capacity to Innovate is the most prized asset for any business seeking to:
a) Protect itself against obsolescence, from a fire sale, from bankruptcy;
b) “Turnaround” from a recent string of declining sales / underwhelming growth;
c) Structurally enhance the sustainability of its long-term success.
So let’s plan to innovate and then let’s innovate to be successful.
And then innovate some more to maintain and build upon that success.
We start by defining ourselves as innovators, we “walk the talk” with consistent and ongoing innovation - focused thoughts and actions, and then...
...we watch the magic happen.
Most businesses fail. I hate to be so blunt, but this is the truth. The only thing that varies is just how many businesses fail.
According to research from the University of Tennessee, 44% of businesses fail within the first three years. And within certain sectors, like information (which includes most technology companies), 63% fail within 3 years, or in Retail, 53% fail within 36 months.
On the other hand, according to research from Bradley University, 70% to 80% of new businesses fail within their first year. Bradley University also found that half of those who survive the first year will fail within the next four years.
And the number one cause of this failure? According to Dun & Bradstreet, the primary cause is lack of business planning.
Yes, entrepreneurs and business owners don't plan to fail. Rather, they fail to plan (which causes them to fail).
In my view, there are two types of business plans; (1) the one you develop when you start your business, and (2) the one you develop to grow your business.
When you start your company, the purpose of your business plan is to ensure you have fully thought through your venture.
Among other things, this plan includes significant market research. It assesses your market size to ensure the opportunity is big enough. It analyzes customer segments to confirm that customer needs match your company's proposed product and/or service offerings. And it analyzes the competition to determine how your company will position itself and how you will most effectively compete.
From a strategic standpoint, the business plan must document your marketing plan (how you will secure customers), your human resources plan (who you will hire) and your operations plan (what key milestones you will accomplish and when).
When you're done, your business plan will confirm your market opportunity and give you a roadmap to follow. It will also be required should you wish to gain funding from investors and lenders.
Now, once your business is up-and-running, you still need a business plan in order to succeed. This is the second type of business plan, and I refer to this type of plan as a "strategic plan." I term it as such because this type of plan requires much less research (since you already know who your customers are, the market fundamentals, and lots of information about your competitors). Rather, the focus of this plan is strategy.
Specifically, this plan needs to identify precisely:
1. Where you want your company to be in five years
2. What you need to accomplish within the next year to progress you to that point, and
3. What your strategy is to complete your key milestones in the next 12 months
In determining the optimal strategies, you need to consider your company's strengths, and opportunities that can best leverage them. If you don't take time to do this, you become too tactical. That is, you continue to use the same tactics that have gotten you to the point you are at. And oftentimes, the strategy and tactics that got you where you are today are NOT the strategy and tactics that will get you to the next level.
So, spend time figuring out the best strategies to follow. The good news is that you've already proven you can execute on strategies (which is what got you to where you are now).
After you figure out the big picture opportunities to go after (which often fall into the categories of further penetrating your existing market, going after a new market, or creating new products/services for existing and/or new markets), you need to revisit the three core strategies you developed in your initial business plan.
To start, you need to modify your marketing plan. Importantly, your marketing plan should always be adding new marketing venues or channels (e.g., direct mail, print, radio, search engine optimization, etc.) as the more channels you have, the more customers you will get and the less risk you have of one channel losing effectiveness. For example, think about businesses who used to get all or the majority of their customers from the yellow pages; many of these companies have perished.
Next, consider your human resources strategy. What new people will you need to hire to accomplish your key goals in the coming years? In what areas will you need people, and what skill sets must they have?
And finally, you need to develop your operations strategy. Figure out what key tasks and milestones you need to accomplish over the next year and break them down into smaller projects that you and your team must accomplish. And then create a master schedule showing who, how and when these projects will be completed (I like using a Gantt chart to do this).
Creating a business plan when you start your company, and annually creating strategic plans to grow your company is absolutely essential to your success. Research proves it. So, if you want to avoid failure, and achieve maximum success, make sure you are continuously creating, updating and following your business and strategic plans.
Suggested Resource: You just learned the importance of choosing the right strategies to build your company. Including this information in your strategic plan is critical to growing an ultra-successful business. What else should you include in your current growth or strategic plan? Click here to find out.