Small Business Tips

Strategic planning is a coordinated and systematic process for developing a plan for the overall direction of an organization and the allocation of resources to optimize future potential. Many businesses start out with only an idea and a desire to succeed. Sometimes it works; more often, it does not. According to the US Small Business Administration (SBA), the main reasons businesses fail are the lack of a solid plan and the lack of adequate capital. These two reasons are not unrelated, especially in tight economic times. After all, if you don’t invest in a good plan for your business, why would you expect someone else to invest in your business?

Strategic and business planning is not just a box to check on your to-do list. Strategic planning is the foundation for everything: your business identity, your marketing and sales, your operations, your management approach, and your funding. However, excuses abound for not doing it. Even well established businesses need to stand out from their competitors to grow and improve their margins.

Regardless of your business size or how long you have been in business, if you’re willing to invest, you may be someone who could leap-frog your competition and change the nature of our economy through new processes, products, or services.

Planning is much more than just a team building exercise, but one of the benefits of using the inclusive planning process outlined below is building a strong, cohesive management team. Feedback from my Strategic Planning Workshop is that the process brings out the differing management perspectives and structures them into a unified strategy.

My six step process to build an actionable strategic plan is the basis of my Strategic Planning Workshop.

Orient participants – Build a common understanding of the planning process and frameworks that provide insight into your business. This step defines the general framework for the process and explores alternatives to more fully develop different aspects of the process. Members of the planning team should come from the functional units of the company (finance, marketing, operations), so they may have different perspectives based on their area of specialty. The end-game of the owners is a major driver of strategy.

Review your current mission, goals/objectives – Establish the starting point and examine alternatives that can add value to your current plan. Whether your current goals and objectives are loosely defined or well defined, they define your business and how it is run. If you aren’t sure where you are, you’ll have a difficult time defining your direction. I use a customer-focused three question exercise to define your current business and then look at the next 12 months.

When you define your business from a customer perspective, it may make a difference in your success. Growth comes from focusing on customers and consistently delivering value to them. Even though strategic plans generally cover longer periods of time, a solid plan for the next year is important for having any confidence in a three to five year plan.

Prepare your situational analysis – Identify market segments, competitors, capabilities, core competencies, and opportunities. Rather than trying to tackle large, broad markets, define your niche and preferably define it to your competitive advantage. To position yourself against your competitors, gain an understanding of who they are and what their market strategy is.

When you consider your capabilities, you need to perform an honest Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis. All your core competencies should be strengths, but does each one add value? Are they unique and sustainable? How important is each competency to your customers? Finally, identify and evaluate your perceived opportunities. Preparing a situational analysis can be an intense activity, particularly if you discover that you are not well aligned with your customers. If you aren’t well aligned, you are left with the choices of finding new customers, developing new products or services that match customer needs, or becoming a statistic. During the past two years we have seen some major examples of companies not responding to changing customer needs and desires or to changing Government regulation.

Formulate your strategy – Brainstorm; develop industry scenario; complete strategic assessments; formulate strategies, mission statement, goals and objectives. “First comes thought; then organization of that thought into ideas and plans; then transformation of those plans into reality.” – Napoleon Hill, author of Think and Grow Rich.

This is where you differentiate yourself and find ways to beat the competition. Some companies have done poorly in the down economy, but others have grown and flourished because they had a strategy that responded to the change. Small businesses have an advantage over their larger rivals because they can move faster to respond to change and to implement new ideas. This step definitely requires thought, but the rewards can be substantial. Remember many of today’s large businesses were founded during a recession. Other small businesses proved that they had value and were acquired by a larger business.

Prepare your implementation plan – Define action plans, schedules, and budgets. Action without a strategy is misguided. A strategy without action is wasted. What specifically needs to be done to accomplish your goals and objectives? Who needs to do it, and what other resources will they need? When does it need to be done? The actions need to be broken into measurable steps according to a schedule and assigned to specific people. How are you going to fund your plan? Your implementation plan is your basic reality check. If the schedule is unrealistic or if you don’t have the necessary people, resources, or funding; what adjustments can you make to achieve your goals?

Prepare for monitoring – Establish metrics and a monitoring schedule. After you have established what needs to be done, you need to define how you are going to measure progress toward meeting your goals and objectives and how often to do so. The monitoring needs to be sufficiently often that corrective action can be taken before you miss critical dates. Monthly progress reviews and quarterly strategy reviews may or may not be sufficient. Establishing minimum, target, and stretch goals may also be helpful. Remember that the plan is not chiseled in stone. If your reviews show that something is not working – change it.

I generally recommend using the SCORE business plan outline that was developed for start-ups but can be readily adapted for established businesses. The questions answered during the planning process feed directly into the sections of the business plan: Business Description – what do you do? Products/Services – what do you sell? Marketing Plan – how are you going to sell it? Operational Plan – how will you perform daily operation? Management Plan -how will your business be managed and by whom? and the Financial Plan – how will you finance the business?

As you move through the steps of developing your strategy and preparing your plan, it is important to keep your end-game in mind. Although no one can guarantee the success of your business, good planning builds a solid foundation for you business and minimizes the risk to you.

Just starting your new company? There are all kinds of free advice, websites and books to guide you. But if you’re trying to be strategic, then having a business plan with a heavy dose of research and marketing that guides your actions can save time and keep you on track.

Here some suggestions of strategic “to-do” strategies for short, medium and long term planning purposes to help you keep moving forward in your business:

Short Term (12 months):

1. Revise your strategic plan (including communications and marketing strategy), build annual plan, and get staff reinvigorated (1-3 day offsite). Once it is ready, make sure everyone in the organization knows what it is and how they fit into the big picture. Find a small business planning expert through SCORE or a local SBA office and online for help.

2. “Get Branded”. Determine Unique Selling Propositions (USPs) for all products/services. What does the company want to be to its customers in the niche you are in? Build a client description for each service you offer. Utilize these descriptions to create the corporate “brand” on your website.

3. Determine a target market for the USPs:

4. Conduct analysis of existing business customer base:

a. Build a customer profile for each customer (create database)

b. Describe current funding streams (sources of revenue) of our products/services

c. Determine what products/services are not being provided that might be up-sell

opportunities to add to the marketing mix

d. Conduct customer surveys to ascertain present and future needs using on-line methods.

5. Determine business processes required to solve customer’s needs and desires.

6. Support staff requirements (training, resources, development, and innovation).

7. Develop a marketing and communications plan to stay connected and provide up-sell opportunities to customers. Plans should tie together association memberships, exhibit booth strategies, and providing free stuff (newsletters, audio, videos, blogging, specific web site, free downloads, podcasts, videos, auto responder, training or other media that builds your reputation as the thought leader in your niche).

8. Determine training needs for personnel for business development, capture work, technical skills, etc.

9. Start building a Knowledge Management Strategy by obtaining an in-house web portal capability for personnel to collaborate and share common data and intellectual capital. Your strategy is to improve value by blending the right mix of people, process, and technology.

10. Review and improve the current teaming partner’s process. Assign responsibility and accountability to an appropriate person

11. Celebrate organizational success, (rewards and recognize company and individual accomplishments).

Mid Term (1-3 years)

1. Review what business model is needed to support the strategic plan (spin-off to new subsidiary, potential mergers or other teaming opportunities).

2. Business Development (BD) Process: Retool the capture management process by:

a. Create Business Development/capture mgr position(s)

b. Identify roles and accountabilities in BD process

3. Maximize tuition reimbursement program funding to pay for personnel training.

4. With sector priorities developed, determine appropriate Knowledge, Skills, Abilities (KSAs) and revise Position Descriptions as necessary.

5. Determine any additional tools that may be required to ensure interview/screening process is identifying the right applicants for organization positions.

6. Develop in-house training and education needs. Determine training venues and requirements to build in-depth capacity between employees and SME consultants

a. Depending on what future training and planning work the organization wishes to pursue, staff may need education on writing training curriculum, conducting training, and training trainers

b. Staff may need certifications that should be identified and paid through tuition re-imbursement

7. Create and implement updates (brown bag) sessions open to all staff to find out about job vacancies and upcoming opportunities.

8. Create succession planning and internal promotion roadmaps for supervisors to share with staff.

Long Term (3-5 years):

1. Determine long term growth model for the organization portfolio. If mergers/acquisitions are being considered, then create an in-house cell with the capability to research, target, and vet possible candidates. The cell will be the lead entity to work with management in determining the acquisition strategy and plan to merge the target into the company portfolio before and after disclosure forms are completed.

2. Identify additional collaboration and knowledge retention tools for personnel. Aging workforce issues and new younger generation workers more savvy to knowledge management, collaboration and information sharing with Web 2.0 technologies are impacting us. It’s here now, and you can either avoid the discussion or embrace it. (Avoidance will be to your peril). You will have a harder time attracting and keeping younger generation staff if you don’t provide them the tech tools they are accustomed to.

3. Knowledge retention strategies must be cultivated. Having up-to-date database management, communities of practice, in-house training (off and online), and mentoring along with succession planning are all needed to grow both the organization and the people supporting it.

4. Knowledge Management (KM) is a journey. The heart of a successful KM effort is to build it into the long term strategic plan. By aligning people, process, and technology with the KM effort, you will be building the foundation that allows empowered workers to collaborate, innovate, and share both tacit and explicit knowledge that is used to create your organization’s products and services. A well thought out KM process coupled with management support, can be a huge competitive advantage in today’s global marketplace.

Managing change has become the norm for small business owners in today’s business environment. Most businesses will go through significant change during their business life-span. As a small business owner or manager, how you respond or handle change can be the difference between success and failure. When faced with change, you need to effectively manage it.

Due to an ongoing evolution in management responsibilities, there has been considerable change management strategies development. Some of the change management models that have historical significance are Kotter’s Eight Step Change Model (which is focused on aligning the vision and mission statements to the change activities, team building strategies, empowering employees to problem solve and make decisions) and the McKinsey 7-S Model (which is focused on aligning strategy, structure, skills, systems, shared values, staff and style with the direction of change).

Over time these models have evolved to include newer change management techniques, such Lean Manufacturing and Six Sigma which are productivity and quality programs. These programs enable highly effective, interactive and inclusive change management tactics. In addition to models and programs, consider working with business mentors, coaches, or consultants to help you work through some specific change issues (for example, a merger or acquisitions.

Key Success Factors for Change:

What’s the catalyst for the change? You need to identify and create awareness of the reason for change; without that level of communication it is very difficult to engage your employees in the process and therefore it will be difficult to move forward.
Some examples: You’ve acquired a new business. You’re facing new, and strong, competitive activity in the marketplace. Your largest customer has gone bankrupt. Your new product is failing in the market place. Your biggest distributor is unhappy with the service you provide. What’s the plan for change? Just like a business plan to manage your business and growth, you need an action plan to manage the change and the resistance you are certainly going to encounter. Your plan will also need to identify key risks and how you will handle those risks. You need to ensure that your vision statement is still valid. If yes, does it align with the direction of your change management plan? If no, update your vision statement to reflect the new direction and future for the business. Communicate the vision statement to all stakeholders; you need to ensure that everyone knows the direction the business is going.

Managing change successfully means that you need to recognize who can help lead change in your organization. You need constancy and reliability in your leaders (when everything else is changing around you). You also need to involve your employees and other stakeholders in the process as early as possible; engaging them in the change will help you move forward. Keep your focus on the action plan and handle problems using decision making and problem solving techniques. The reason for change must be valid; change can cause stress and upheaval for the people involved in the process.

When you need to manage change, you need to focus on doing it right rather than doing it fast. The culture of your organization will need to adapt, along with the functions, processes and people. Work on building awareness, understanding, acceptance and commitment to and for the change.

Growth presents a real challenge for many small businesses. As your organization grows, how do you avoid compromising the personality and characteristics that helped build your business in the first place?

Act Small, Think Big

In his manifesto for small business in the new economy (Small is the New Big), Seth Godin has redefined the meaning of small and big:
“Small” is a mindset, a way of acting, as opposed to a physical state – Small is not the the size of your bank account, your asset base or the number of employees you have, etc. Thinking “Big” is thinking smart. Big ideas don’t have to equate to big budgets and expenses – Big ideas are new ideas.

The secret to managing the growth of your small business lies in understanding/balancing thinking big and acting small. Here are some ideas ideas to get you started:

Acting Small
Reach out and stay engaged with your customers (on a regular basis) Live your service promise Answer the phone (with a live person not an auto-attendant) Respond to website inquiries as fast as possible Return emails Listen Stay flexible Make decisions (the quicker the better) Avoid unnecessary meetings Communicate openly and honestly If you don’t know the answer, don’t fake it Ask for feedback – Survey your clients Use common sense (particularly when spending)
Thinking Big
Focus on what your good at and farm out the rest Become your own publisher – share your ideas through a blog, e-book or whitepaper Give away content hat helps solve problems (for free) Embrace technology – use tools and applications to work smarter Learn how to use social media Always be trying something new – change is a stimulant Understand your clients and be the best at solving their problems

There are all manner of reasons why folk decide to start up a business working from home. Some people basically don’t have any desire to hold down a regularly paid nine to five job where everything about their working life from pay and vacations are dictated by others. Some want to spend more time concentrating on family life whilst others simply yearn to be their own boss. A successful home based business will provide you this freedom and financial independence. However, along with the benefits of home business success, you will need to follow these home business management tips.

Whatever the reason, starting your own home based business and controlling everything yourself without having anyone else to lean on is not always easy to begin with. We all pick up good and bad habits throughout our lives and in order to successfully run a home business, the bad practices and poor time management we have got into need to be done away with.

You can do this by writing down your bad habits on paper as and when they arise. It will not be long before you can easily spot the things that are letting you and your business down, and then all you have to do is take steps to wipe out those old bad habits.

Many people tend leave things until tomorrow when they really should be done today. This only leads to a business which crumbles from the roots and when deadlines don’t get met, it doesn’t take much for clients to go elsewhere for what they need. Its worth remembering that these are the clients you tried so hard to get in the first place and its not an easy task to get them back once they have strayed and taken their business to your competitors.

Everything needs putting in place prior to getting your home business up and running. As many of the necessary tasks such as making contacts with clients and chatting with the bank manager have to be done during the working day, time should be set aside on a daily basis to focus on these important aspects of setting up a business from home. However, it is essential that once your daily schedule is put together, you stick to the plan in order to avoid overloading yourself with work.

New business ideas are continually being updated and you really need to keep your finger on the pulse and move forward with the times. This can be achieved by learning on the Internet or taking classes to improve your business acumen. After all, staying ahead of the game and being knowledgeable is the key as far as running your own home business is concerned.

You, above all, have to be seen taking your business seriously. If you don’t do this, how can you expect anyone else to? Nonetheless, it is essential to have a little fun now and again and it helps to keep you fresh and as keen as you were when you first started out. Don’t burn yourself out – enjoy your home business as well as working hard at it.

When you work from home you can set your own schedule and afford yourself the luxury of being able to do the things you wanted to do but couldn’t when you were employed in your previous nine to five job. Working from home does not mean you have to be stuck to your computer seat all day, every day. Let’s face it, with modern technology such as PDA’s, cell phones and texting facilities your home business can be as mobile as you wish it to be.

It’s a good idea to make every attempt to keep business and pleasure apart whenever possible. Make sure when you are spending some quality time with family or friends that you are not forever taking out your Blackberry to see if you have any new mail. There is a time and place for this and as long as you don’t miss any important messages from clients, everyone in your world will be happy.