Small Business Connections                                    February 2012 

Business Planning for REAL Business 

It seems that everywhere you look there are business plan guides, software, tips and shortcuts. The business plan (or strategic plan) is one of the most vilified tasks that business owners love to put off, ignore, or skim over.

There are many opinions about the value of preparing a plan. In the 25 years I have owned or managed a business, and the six years that I have been coaching small business owners, here is what I know, for sure, about business plans:

One size does not fit all. If you search the Internet for sample plans, they may or may not be helpful for your business. Get "custom" coaching to help craft a business plan that fits your business.

Demographics ≠ Market Research. Don't get me wrong - you do need to understand the demographics of your market. But loading your plan with population figures, traffic counts and other big picture numbers is often not helpful information when it comes to forecasting unit sales. If you have a storefront - gather market information by observing surrounding businesses. Get industry data and trends from industry associations. And by all means, research your competitors thoroughly. A SWOT analysis is critical.

Constructive criticism could save your business. Friends and family often aren't the best place to go for meaningful feedback on your plan. You'll probably get "that sounds great" or "that will never work", neither of which offers very substantive feedback that will allow you to modify your plan. Seek input from an expert. We read and edit hundreds of plans every year, and know what to look for. Find a mentor - someone you respect who has walked in your shoes and can share their mistakes and secrets.

It's all about the numbers. You can make the best "pitch" in your business plan, but the numbers never lie. And numbers need to be supported by believable assumptions. An assumption is data that provides substantial evidence that you will be able to sell those 5,000 doodads, or 40 hours of expert service, each month that will allow you to pay yourself a handsome salary and make a tidy profit.

Plan B will probably become Plan A. That means you need to have a Plan B. 90% of the forecasts I review are not met according to the original plan.

Plan B will need to be revised. Maybe immediately, maybe in six months, maybe in two years. But if your business isn't evolving, it's probably dying. Intentional business planning is an ongoing activity in a thriving business.

One of the most often asked questions is: How long will it take my business to reach consistant profitability? The answer: Three years.

• Year one - get customers to know you exist; try marketing techniques that don't work; spend more money than you bring in (Dig the hole)
• Year two - refine your marketing techniques; start to build a customer base; recover from the first year's losses (Fill in the hole - or, fall in the hole, if the first year's hole is too deep)
• Year three - customer referrals build steam; the marketing engine is humming; the P&L shows black ink (Build the mountain)

Almost every new business owner argues this with me. Almost every existing business owner agrees. Your business may be an exception. But, what if it's not.

Biz Bitz

Ready! Set! Grow!: National Small Food Manufacturer Conference

A networking and educational event for small food companies throughout the county.  This conference is the fourth annual national conference designed specifically for small food manufacturers throughout the nation. It includes current topics and industry recognized national speakers which will educate and motivate participantsIn Omaha, Nebraska April 2-3, 2012 presented by The Food Processing Center, University of Nebraska-Lincoln. To learn more visit their website. 

Renovation, Repair, & Paint Rule: US Environmental Protection Agency

Common renovation activities like sanding, cutting, and demolition can create hazardous lead dust and chips by disturbing lead-based paint, which can be harmful to children and adults.To protect against this risk the EPA issued the Renovation, Repair and Painting Rule. There will be informational meetings throughout Illinois during this February and March. Click here to see when the informational meeting will be held in your area.

Illinois SBDC at Waubonsee Community College