Category Archives: Business Growth

Business Expansion Is Not For The Faint Of Heart

Some businesses are built for expansion, others are not.

A franchise is an example of a business model that’s scalable. Once a franchisor fine tunes the business systems to enable one outlet or unit to be both profitable and repeatable, it is said to be scalable.

After several years working in a business, many owners discover that their venture simply won’t scale up. Owner operated businesses often aren’t scalable because, in the mind of customers, the owner is the business. For this type of business, one owner will always equal one business.

The following six tips are for business owners who are thinking about scaling up. Continue reading Business Expansion Is Not For The Faint Of Heart

5 Ways to Use Your Business Plan

It takes guts to defy chaos and predict the future of your business, and yet that’s precisely what an entrepreneur does when writing a business plan. Considering it’s a written roadmap that can be used at any point in the future to measure whether the business succeeded or failed, most people will put it off as long as they can. Of course, most people don’t own businesses either. But those who develop business plans quickly come to realize an abundance of benefits.

The most important reason to do a business plan is to gain understanding about, and create a blueprint for starting or growing a business. Once the plan is done it can easily be adapted to communicate with different audiences.

Here are 5 different ways to reconfigure your business plan, from longest to shortest.

1. The Complete Business Plan. Your full business plan will include an executive summary, the narrative and financial components, and a number of supporting documents. By adding well-crafted, personalized cover letters for each contact, you will be able to use your business plan to communicate with potential partners, grant fund managers, bankers and other debt financing agencies.

2. The Investors Business Plan. Right up front, investors will want to know your pitch; what problem your business solves, what value you place on your business, how much money you need, and what are you are offering in return. They will also need to know whether you are seeking debt or equity financing, the expected return on the investment, how you plan to deal with the risks, and what your exit strategy is. Most importantly, investors will want to know all about you, the owner.

3. The Employees Business Plan. The scope of the business plan you present for employees will be guided by your philosophy on how much employees should know about the inner workings of your business. For example, you might use the narrative portion of the business plan plus the sales forecast, but exclude the historical and current financials and supporting documentation. The main benefit of sharing relevant parts of your business plan with employees is to have all members of your team on the same page.

4. The Business Plan Brief. Also known as an executive summary, this 1 to 2 page version can be used to introduce your business to various audiences. It can be added to presentations and proposals, or hung on the office wall to serve as visible reminder of the corporate direction. The brief can include things like the business vision, the mission statement, the strategic and marketing goals, sales, and profit targets. It provides most of the content needed to build a business website or to design flyers, brochures, prospectuses and other marketing materials.

5. The Elevator Pitch. An elevator pitch is a brief introduction to your business. The term is often used in the context of an entrepreneur pitching a business idea to someone during the time it takes for an average elevator ride. It might be as long as thirty seconds or 100 words.

Those who do step up and develop a business plan will usually discover that it’s not quite as formidable as it seems at first. Business planning can be a lot of fun, and whatever else can be said, it’s a remarkable confidence builder and an amazing learning experience for those who go for it.

Defragging Your Business Will Help Your Bottom Line

defrag_computer-001When my computer gets sluggish, I defrag the hard drive to make it more efficient. Defragging is a process that cleans up your hard drive. It does this by tidying up stray bits of information to leave more free space, which enables the computer to operate more efficiently. Businesses need to be defragged on a regular basis too.

Tough economic times demand the very best from business owners. For the most part, it’s easier for businesses to thrive in a robust economy. But when a downturn hits, the claws come out. Continuous innovation and persistent defragging are the secret to not having your business bounced out of the gene pool. On a larger scale it seems like the economy gets bloated from time to time and does its own defrag. In a very Darwinian way, many small businesses get cuffed into place or trounced out of existence along the way.

As owners, we’re defragging different parts of our business at any given time. You know those processes in your business that just break down, fall apart or become redundant over time? They get slower and slower, more noticeable, then downright annoying; that’s usually when we’re motivated to defrag.

For a small business there are always things begging to work more efficiently. Here are a number of areas of you might consider for potential defragging:

  1. Business Concept – your vision, corporate mission, which products and services to offer, and short-term business goals
  2. Marketing – market area, customers, competition, how you sell your products and services, advertising and promotion, and pricing
  3. Operations – computer hardware and software, how you manage your people, policies on safety, banking procedures, invoicing, trade accounts, your telephone service, insurance, and staff training
  4. Financial – sales forecast, costing, operating expenses, asset management, how you collect your receivables, and how you manage your payables

If the items listed above look suspiciously like the parts of a business plan… they are. Improvements to any of the above areas can make the difference between smooth sailing or crashing in a ball of flames.

In times of plenty, we tend to over indulge and get bloated. This is as true for businesses as it is for people. When the economy gets crazy and none of the old rules seem to work, it’s time to trim the bloat and get back to basics.

The sun always shines after a storm. There are positive economic times and an abundance of opportunities just around the next corner. The lean, efficient entrepreneurs will survive to do business on those bright days.

Plan to Grow Your Business in 2012

If you are running a business and are tempted by the growth bug, the first priority is to take a close look at your business and decide whether you really want to expand. If you love what you do and your small business, at its current size, meets all of your needs, there may be no reason to expand.

However, if you do want to increase capacity, customers and sales, there’s no time like the beginning of a new year to kick your business into gear.  Here are a few things you can do to prepare yourself to ride the winds of change.

  1. Update Your Business Plan. Groom your vision and mission. Set your strategy and goals. Once you’ve initiated your expansion, step back from the plan and handle what’s in front of you. The true value of your business plan is what it teaches you along the way.
  2. Hone Your Leadership Skills. Prepare yourself for a wild succession of role incarnations. With each increase in the size of your business, your role changes—in the beginning you’ll do everything yourself, but as your business expands, you’ll need to get comfortable delegating tasks to others, hiring more people, and outsourcing. Prepare by reading, consulting with advisors, taking on mentors or coaches, and taking courses, workshops and webinars.
  3. Grow Your Network. The bigger your business the larger your network. Identify the individuals and organizations important to your business expansion, strengthen existing relationships, and open the door to building new ones.
  4. Cultivate Financial Relations. As the business grows, you will need to rely on others for money—family, friends, angel investors, lenders, venture capitalists, and shareholders—look after your financial partners, maintain a stellar credit rating, collect receivables promptly and pay your bills on time. Prepare for growth by minding your financial garden.
  5. Develop Systems. When you own a small or micro business, every minute not spent working in the business must be invested in working on your business. As you grow, you will need reliable systems to build upon—administrative processes, operational procedures, marketing tools and practices, human resource guidelines and standards—and the list goes on. You will need a policies and procedures manual to deal with all nature of processes within your business and to mitigate the many liabilities any business encounters.
  6. Get Rid Of Bad Customers. Make room in your schedule to deal with new business by offloading bad customers. A good place to start is with your accounts receivable—have a heart to heart with any of those who are unwilling to pay and cut your losses and cut the ties.
  7. Get Out Of The Way And Lead. Once you’ve selected the right people, turn your attention to being a leader. Done properly, delegating and outsourcing should extend your capacity in a safe, cost-effective way. Engage good people and trust them to do their jobs.

Business expansion growth is rarely a linear, tidy process. More likely it’s going to be a donnybrook, your survival contingent on your street fighting skills. By all means write your business plan and read the books on growing your business. But when your business takes off, be ready to roll with the punches and take a few on the chin. With the right blend of planning and reacting, you can also expect to enjoy the fruits of your labour.