My Business Transformation Project: Taking My Own Advice
June 30, 2007
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Since 1998, my primary marketing tool has been my website and has provided a great source of new coaching clients and I have published two books as a result. I am all fired up and this summer is going to be sizzlin!
The Coach is Going to Take His Own Medicine
In 1997 I set a goal to build a business with products as the foundation. The truth is I simply dabbled in achieving this goal.
It has been hard being transparent and intellectually honest with myself about this topic because I justified my so-so effort with the excuse that there was only so much time in the day. The coaching and consulting part of my business has kept me busy and - addicted - to the easy money.
A business based on services is simply trading time for money with no recurring income to build a foundation. Whereas, a business with products and services offers the best of both worlds - income without a need for my personal involvement and regular cash flow from coaching.
Great Lessons Learned
My journey on this road has not been wasted. It would have been nice had I achieved my goal by now. Yet I might not have identified the huge hole in the traditional approach to business planning - the business model.
When I wrote Tips and Traps For Writing an Effective Business Plan I put my best into the book. I wanted to add a chapter or two about business models but my editor thought it would confuse the readers, perhaps she was right.
Looking back I realize she did me a favor, now I can produce it myself and own it 100%. Since Tips and Traps For Writing an Effective Business Plan was published I have come to a deeper understanding of the challenges faced by business owners when writing and business plan. My next writing project will be about how to Build a Better Business Model.
Why Do Business Models Hold the Power To Transform?
Your competition is not from the guy across the street or on the other side of the world. Your competition is the ‘business model’ that the guy or gal uses. It is the way that he or she conducts business, the style, the standards, and the methods used to acquire and keep customers that makes them or you, more competitive.
Designing a business model holds the potential to totally innovate, renovate, and shake up your business - even an entire industry.
What is a business model?
A business model is the way a company plans to generate revenue and make a profit from operations. A business model includes the components and functions of the business, as well as the revenues it generates and the expenses it incurs. For example:
A restaurant’s business model is to make money by cooking and serving food to hungry customers. MacDonald’s cooks and serves food to hungry people, so does Wendy’s and so does the local Steak House - what they serve and how they serve it is very different - it is their ‘business model’ that differentiates them and makes them competitive and appealing to a certain market segment.
A web site’s business model might not be quite so clear, as there are many ways in which they can generate revenue. For example, some make money (or try to) by providing free information or service and then selling advertising to other companies who want to reach the people using the free service or information. Then there are those who choose to sell a product or service directly to customer they reach on-line.
Why is a business model important?
Your business model defines the style, the way you plan to deliver your goods and services, and sets a standard. It becomes a touchstone, a benchmark, a way to differentiate yourself from others serving the same market.
A business model defines how you plan to compete, it communicates how you create additional ‘value’, and becomes the magnet that draws customers whose needs are in alignment with your business model.
The process of building your business model will help you identify new opportunities, learn more about your business, and become the competition - the guy to beat.
In the process I am creating you will likely discover something that you can use to completely transform your business. You will figure out how to breakthrough major obstacles, discover a unique way of delivering value to the market - all which will lead you to increased sales and profits.
Business Design & Transformation
Whether you are looking to totally renovate and revolutionize your existing business or start a new business and need a blueprint for delivering a compelling customer experience - designing your business model will set you up to succeed and dominate your niche.
Then your business model becomes the tool to breakthrough and uncover new products and services, market leadership opportunities, and the focus of your marketing and sales strategy.
I Will Be Blogging My Experiences
To keep myself on task and intellectually honest I plan to blog about my experiences on creating a new product and revenue stream here on my blog.
It will include all the hairy details, successes, failures, and challenges. It all has to start with me, myself, and I.
Oops, I almost forgot - I need your help.
How You Can Help
The whole purpose of this project is to replace a portion of my coaching income with revenue from the sale of products. I will not spend a dime on advertising or paid promotion. Therefore, the secondary purpose of this project is to see if I can build this new revenue stream 100% through word-of-mouth (WOM).
Why WOM?
It will push me out of my comfort zone and WOM will prove that I have tapped into an unmet need in the marketplace. Plus, it will help me build relationships with readers (aka future customers), and prove an important point - that it is possible to make money selling products online.
What’s In It For You
There is an old saying that states marketing and advertising only works when your message answers the question “What’s In it For Me?” (WIIFM).
As I share my experiences developing this product, use WOM to promote it, I am certain you will learn as I share my experiences. So, read my posts, leave a comment and tell me when you think I am off base, out-to-lunch, or have missed the target.
“Help me, help you.” Jerry McGuire
But wait, there is one more thing.
Limited Private Beta: As I develop this new product which I am calling, “Build a Better Business Model”, I will be publishing it in a private Wiki space. It will contain all the tools, worksheets, coaching, and instructions needed to apply this approach and build a “Better Business Model” for your own business.
Borrowing a page out of the software industry I plan to offer access to the early “Beta version “of my “Build a Better Business Model” program in exchange for your feedback and WOM support. Plus you will get a coupon you can use when the final version is released.
To get an invitation to the Private “Build a Better Business Model” Wiki simply leave a helpful or supportive comment, or post on your own blog with a trackback to any post in the “Business Transformation Project” series. I will follow up with an email invitation to the private Wiki space.
Postscript: I have paused the development of the Remote Control CEO and the Irrepressible Entrepreneur books due to the importance, significance, and impact will have when you “Build A Better Business Model”. I expect that the “Build A Better Business Model” will become an integral part of both the Irrepressible Entrepreneur and Remote Control CEO.
Article Series - Business Transformation Project
- My Business Transformation Project: Taking My Own Advice
- Why My Approach to Build a Better Business Model Is Superior: My Business Transformation Project
- Update: My Business Transformation Project - The Model
- Update: Dramatic Shift In The Make Up of Small Businesses
You Get What You Expect
June 27, 2007
I was watching TSTN On Demand yesterday and was delighted to see Dr. Waitley had six videos available. Anytime is a good time to hear Waitley speak and this day was no exception as he was sharing his unique insights into motivation and winning (video 6).
Dr. Dennis Waitley whose book The Seeds of Greatness was the first book on personal development I ever read some 20+ years ago.
Expectation = Motivation
Waitley says that, “We don’t always get what we want in life, but get what we expect.” Think about it - is there there a difference between what you want and what you expect?
Want is your desire for something. Whereas when you expect something - it is likely to happen. Waitley has studied the Self Fulfilling Prophesy for decades. He asserts that, “You get what you expect more than what you want. You are only motivated to do that which you expect and are motivated to achieve.”
Limits are Physical But Limitations are Psychological
Too often our expectations are shaped by a type of self-hypnosis that has us believing less about our capability than we wish to achieve. When the mind talks the body listens and regardless of how much we might want something, the effect of this self-hypnosis is the self-imposed limitations that you permit to hold you back.
Remember, “You will not achieve a goal by concentrating on the reverse of an idea.”
Dr. Waitley says, “Think of the reward and you move toward it. Think of the penalty of failure and you will no longer be able to see past the penalty [and your motivation will vanish].” Because “You cannot drive forward and backward at the same time. Focus on the result, set the expectation or dominant thought.”
Set Realistic Goals
Dr. Waitley said, “Do not tell yourself, kids, or employees to set unrealistic goals. Setting goals that they do not believe they can achieve is unrealistic. Unless they set a realistic target that they believe they can achieve they will self-destruct because they will not have the motivation to go past where they believe they can go.
In the video he went on to say “Preparation plus the expectation that you’ll do well will lead us to the realization of our expectation.” We need to cultivate an expectation of optimism.
I have often felt that small business owners could learn a lot from atheletes. We should be spending more time training and preparing and that is exactly what Waitley states in the following formula.
Preparation + Expectation + Simulation = Realization
Fear is negative belief in something unknown. Faith is the belief or positive expectation in something unknown. When we take time to prepare we transform the unknown into known. To change your self talk follow his formula:
- Preparation: Simulate your success. Invest time in making yourself and your business ready by making sure that you and your staff have the knowledge, training, and preparation to succeed. Then you can say, “I am getting more training to improve my performance therefore I expect to do well.”
- Expectation: cultivate an optimistic outlook, set realistic goals, and believe that you will achieve it.
- Simulation: Dennis has coached Olympic athletes in visualization techniques to imitate the perfect execution of their routine or event with amazing results. Develop a visualization of the process and achievement of your goal. This will develop the motivation you will need to achieve your goal.
- Realization: the fulfillment or achievement of what you anticipated and expected.
Remember, “We don’t always get what we want in life, but get what we expect.”
[TSTN Subscribe Page] [Success Minute]
Five Tough Blogging Questions To Help You Make It Great
June 27, 2007
My favorite Wordpress blogger Lorelle wrote about Tony Hung’s Rules Behind a Great Blog. [Tony’s Original Post]
People need to know more about you than just your post content. They don’t have to know personal and private details, but they need to know enough to trust you and what you have to say to them. Via Lorelle
What is great about this post is not only does Tony make great observations, he also asks some tough questions. Here are my favorite’s:
- Transparency: Do reveal as much as you can about yourself in the about page?
- Authenticity: What can you bring to your blog that no one else can?
- Integrity: What does your blog stand for? What does it NOT stand for?
- Passion: How excited were you about your last post? Were you bored? Did you sound bored?
- Engagement: Consider … the scenario when your blog gets big and popular enough that you get bored by comments and questions. Could this happen to you?
My Answers to Tony’s Questions
Transparency: I think I am pretty transparent. Talking to a video blogger the other day he was adamant never to put your address on the WWW. I do at the bottom of each page. As a business I want to be as real, transparent, and open as possible.
Authenticity: Most all my posts are original content written by myself. I bring my experience coaching for 17 years, 100’s of entrepreneurs, in more than 33 industries - pretty authentic and unique, I think.
Integrity: My blog stands for the belief that an entrepreneur can grow, adapt, and cope with anything - if he/she is willing to pick themselves up, learn, and adjust their approach.
Passion: After returning from Hawaii, I decided that I would not do anything that doesn’t excite me - I have been true to focusing on my passion.
Engagement: Sometimes my replies to comments are short and to the point because I am mid-stride on a project and do not want to take up to much thinking bandwidth. I definitely could improve in this area.
I will have to tap my friend Phil Gerbyshak, the Make It Great Guy for his insights because Phil does a great job engaging people and following up on every comment on his blog.
SCORE Small Business Resources
June 27, 2007
Business Opportunities Weblog pointed me to new Online Resources for Entrepreneurs.
These added sections offer valuable information, tips and interactive workshops to help small business owners achieve success. Technology for Your Business, Learn Online, and Disaster Prep and Relief.
Starbucks Lineups
June 27, 2007
What is the deal with Star-bucks and the long lineups? Every store is built with multiple cash registers and everyone lines up in one line!What about those automated Latte and Cappuccino makers they sell?
Why not put those machines to work for those who do not want to wait in line for their order and then have to wait again while the Barista makes it.We could then self-serve, if we do not want to wait, and pay less.
Why can Star-bucks not figure that out? They can sit around and invent a poorly designed single cup coffee maker but not figure out how to eliminates the line ups?
What’s up with that?
This Blog Is A No Javascript Zone Part 2
June 25, 2007
Correction and Edit: Thanks to Lorelle for correcting me on an oversight, i.e. the Javascript contained within the core Wordpress code. I responded and shifted my position to be “No Offsite Javascript” free zone. After two years doing this Wordpress blogging thing. I am still a newbie.
I visited Michael Martines Blog today, as he had commented on a post of mine (Business Blogging Strategy: Build Trust and Rapport) at Lorelle On Wordpress. I decided to checkout his blog, I found Michaels post Build Blog Traffic with Technorati, Part 2, which I commented on.
We exchanged emails a couple of times today as well. Tonight I decided I should share what I went through - that drove me to declare my blog a Javascript Free Zone!
“Hang in to yer hats girls it could be a bumpy ride.”
So why would a business blog ban Javascript in a Web 2.0 world? Am I crazy?
I could not (will not) write a line of code if my life depended on it. Well maybe I could, I do know how to write a Hello World! PHP script. Wait, I a getting ahead of myself.
High Speed Internet
I first installed high-speed Internet (via Cable Co.) was in 1997 I remember coming across Applets, experimental Javascript applications that really slooowwed down page loading in my Explorer or Netscape browser. Yet, by todays’ standards early Javascript code seemed lightweight.
So along came high-speed broadband, growth in Micro Processor speeds, and all should be hunky dory right? Think again.
Widget Wizardry? Not!
Web 2.o’s proliferation of widgets sharing data back and forth across the WWW has made a lot of people a bunch of money. Developers built a number of widgets like BlogCatalog, MyBlogLog and others - all using Javascript of course.
For the most part these Javascript widgets work quite well communicating with databases that give us all that Web 2.0 functionality - until their servers go offline - then our pages fail to load completely or in some cases not at all.
Does Javascript Make Developers Lazy?
I realize that Wordpress is not the only blogging platform but I fail to understand why the same developers who wrote those Javascript widgets couldn’t also write a a PHP Wordpress Plug In? That way it would sit on my server, connect with my database, and not slow down my site.
I suppose the major wrinkle with my idea is that the data would be on my server and they could not access it, own it, or control it. I thought the WWW was supposed to be an open platform?
Errors, Slow Page Loads
I moved my hosting over to Media Temple because they developed a new Grid Service technology. They have been going through some growing pains due to the huge demand for this new service.
As far as I know it is “the first real innovation which replaces yesterday’s obsolete shared server technology. You get access to hundreds of servers for the price of one.”
Somedays I saw page load times degrade to 60-90 seconds. I was going nuts!
Theme Related Javascript Errors
I called their technical support and got some tips how to run down the source of my page load problems. Media Temple has this cool feature “Query Analyzer” which will analyzes slow MySQL queries that may be effecting your sites performance.
I found a Javascript error in a template I was using, that was unable to resolve and find what it was looking for. In looking the script over I discovered that it added no functionality to my blog plus the script that the template was calling was also missing. I removed the Javascript call from the header.php file which solved most of my page load issues.
I also discovered that every page was trying to find my favicon.ico file (also missing) so I fixed that forthwith. By this time I was angry, I thought I was being very selective in the themes I used by using a theme from a ‘professional’ - I chose to run down the errors and fix them myself. The last Javascript left was Google Analytics.
Sometimes Even Google Analytics Will Choke Your Pages
Whether it is Googles servers getting overloaded or some part of the Internet is down, my pages were still taking way to long, so I removed the Google Analytics Code and viola! My site became downright zippy.
From that moment I decided that my blog would be a No Javascript zone. The bonus was it simplified Theme development and since I know a bit of CSS, I created my own theme from Will’s Blank Theme.
Today, I am a happy Wordpress blogger (only took me two years, guess I am a perfectionist) and I know exactly what my theme is doing and I have control. Yes!
Live Large!
Technorati: blog, javascript, Lorelle,
Business Myth Busted: Starting a Franchise is Safer Than Starting Your Own
June 20, 2007
This just might wake you up. Michael Gerber the guru of the Turn-Key Revolution wrote a book, The E-Myth Revisited. On page 8 of his book he states:
“…according to studies conducted by the U.S. Commerce Department from 1971 to 1987, less than 5 percent of franchises have been terminated on an annual basis, or 25 percent in five years.
Compare that statistic to more than 80-percent failure rate of independently owned business, and you immediately understand the power of the Turn-Key Revolution in our economy, and the contribution that the Business Format Franchise has made to it and the future success of your business.” Page 8, The E-Myth Revisted.
Today a client pointed me to an article at CNN Money titled Risk/Reward: Executives who think it’s safer to buy a franchise than start a business need to think again. That got my attention, look at these findings:
“Anyone looking for reliable data on failure rates of individual franchise units faces a tough challenge, because the franchise industry uses a weird definition of “failure.” Consider: If your business sank so deeply into the red that you were forced to give up on it and eat your losses, wouldn’t you call that a failure? Most would…
When a franchisee doesn’t prosper–indeed, loses his shirt–what usually happens is that the franchisor simply takes back the unit (without reimbursing the hapless franchisee one dime) and sells it to somebody else.
As long as the shop doesn’t close its doors, it isn’t a “failure” as the International Franchise Association defines the word. That is why, when asked for the failure rate of franchised businesses, the IFA says it is 5% a year. Wow! Just 5%! Sounds as if making money on a franchise is practically a sure thing!
Time for a reality check: The scant research that exists suggests that, as risky as starting an independent business is, buying a franchise is an even bigger roll of the dice. In the early ’90s Timothy Bates, a professor at Wayne State University, studied Census Bureau data on 20,000 new enterprises and found that 38% of franchise units failed over a four-year period, vs. 32% of independent startups. In some industries the gap was much greater. In retailing, for instance, 45% of franchised units lasted less than four years, while just 23% of independent retail stores flopped. Via Risk/Reward
Another Insight
The article at CNN makes another great point. Apparently, Bates calculated his statistics on business failures the same way the IFA does - so if you took out the number of franchisees who gave back the franchise (and lost their shirt) to the franchisor - the failure of franchises would be even worse.
Implication: Going It Alone Just Might Be Safer
I highly recommend that you read the article because it really lays it out quite well.
“buying a franchise too often ensnares would-be entrepreneurs in the worst of both worlds: You get all the financial exposure, headaches, and stress of business ownership–but someone else collects royalties on every nickel that comes through the door, not to mention fees for marketing, fees for this, fees for that, more fees for anything you can imagine (and some stuff you can’t); and all the while, the franchisor dictates virtually every detail of what you can do, including what kinds of signs you can put up, how you price your wares, how much overtime you can pay your employees, and who’ll be your suppliers. Violate the agreement, even in some tiny particular, and the franchisor can–and often will–snatch your franchise back.” Via Risk/Reward
Ouch! How’s that for stickin’ it to the man?
Statistics Prove What Entrepreneurs Have Always Known
Most entrepreneurs I know would rather take a risk on themselves than get locked up in a franchise that controls your every move - plus it is less risky - this is big news!
Plus it confirms the trend of the last decade - the number of new startups in Canada and the US have grown substantially. As I wrote in Chapter 23 of my book, Tips and Traps for Writing an Effective Business Plan:
In the last eight years entrepreneurial activity in the United States has grown from 7,200,770 businesses to 20,038,163 (according to the 2000 census). A 2005 study by Frank N. Magid Associates found that 76 percent of small business stated that they wanted to grow their businesses significantly. In Canada the number of self-employed persons has doubled since 1976 to 2,412,700 (Statistics Canada, January 2004.) The trend is clear: self-employment and small business is well entrenched in North America and growing strong.
Be Careful Buying a Franchise
Obviously, you need to proceed very carefully when buying a franchise or buying a business. I think this news will be encouraging to many entrepreneurs.
Always use caution when using statistics to justify a business decision. Statistics should not replace common sense, a good business plan, or your experience.
When you come right down to it, the major factor in the success of your business is - you!
Article Series - Buying a Business
- Business Myth Busted: Starting a Franchise is Safer Than Starting Your Own
- Do Not Start a Business, Buy a Business
- Should I Buy a Distressed Business That Is Losing Money?
- Partnerships and Buying a Business
- Innovation, Fear and Their Role in Buying a Business
- Reduce Your Risk When Buying a Buisness
- Buying a Business - Obstacles and Deal Breakers
- Buying a Business - The Goodwill Controversy
- Long-Term Vision: Buying a Business Podcast
- Strengths and Structure: Buying a Business Podcast
Starbucks Myth: Starbucks Is Not A Franchise
June 20, 2007
I was talking with one of the employees at my local Starbucks (Edmonton, Alberta) and discovered that they were owned by Starbucks and employees of Starbucks.
I inquired as to the status of the ‘Jamba Juice’ franchise that was supposed to be owned by Starbucks she said that Starbucks was not a franchise. Apparently, there are two kinds of Starbucks stores company owned and those that are operated with a strategic partner.
While in Hawai’i we also frequented the Jamba Juice which was right next door. They make great smoothies, fast. It was a busy store, which makes sense being right next door to Starbucks store. Anyways back to my story.
She said that most of the Starbucks at airports are examples of a strategic alliance with the airport authority itself, same as stores that have a Starbucks within a store - those are also strategic alliances.
Other than that as far as she knew all other stores are owned and operated by Starbucks. So it appears that Starbucks is not a franchise, I did not know that, did you?
Elsewhere: Leaders, Consistency, Boomers, Retirement, Best Place to Start Up, Firing Employees, Exchange Rates
June 19, 2007
Are You a Leader, Follower or Waiting for Approval?: Self-confidence is the greatest possession you have. The trust you have in your own abilities and unique qualities grows when you practice intellectual honesty.
Consistency: Step by Step Start Up is a Cinch: Phil asks a great question, “What am I doing today that will get me just a little bit closer to my goal of being a full-time speaker and writer?”
Baby Boomers See Opportunity to Start Business Comes At a Price: According to a study baby boomer business owners, especially those involved in second act businesses are enjoying the freedom of owning a business. They are also feeling the stress that comes with the territory
Business Owners: Four Retirement Investment Options: Business owners need to take as much time planning their retirement as they do operating their business.
Canada: Top Three Best Places to Start a Business: According to Fortune Small Business Canada is third in the world as a “place relatively few hurdles in the path of business owners. In each nation it takes between two and five days to start a business and requires five or fewer steps to do so.“
Firing Employees: Dealing with the Artful Dodger: Feel like you are held hostage by an employee? Feel like they should be fired but struggle with making ‘the’ decision?
Exchange Rates: Beware of Assumptions: If you do a lot of business with customers in the U.S. you might be feeling the pinch due to the Canadian dollars rise against the U.S. dollar.
Living an Uncommon Life Is Your Birth Right and Heritage
June 17, 2007
In Live an Uncommon Life, Walk the Road Less Travelled manifesto I talk about how:
Our Western culture has become fragmented, separated, and isolated. Increasingly we live vicariously via the World Wide Web. This is a less than ideal outcome of our affluent society. Via Live an Uncommon Life, Walk the Road Less Travelled
Other memes in this manifesto include:
- Are Values Lost in Generational Shifts?
- People Helping People
- What happens in the City?
- We Must Learn to Overcome “Isolation Anxiety”
- I Will No Longer Live Small
- I Choose to Live & Love Large and Step Into My Dreams - So Can You
Fathers Day Meme: Remember Your First Leader
June 17, 2007
Share your Fathers Day poems, stories, or anecdotes at Fathers Day: Remember Your First Leader.
Here is my contribution to the meme:
I found this great resource for Fathers Day that has poems, songs, recipes, activity suggestions and quotes.
When Leaders Take A Stand Change Happens
June 16, 2007
I started a new blog. A blog dedicated to leadership, When Leaders Take a Stand. Be forewarned, some might be consider the tone of this blog to be controversial, irreverent, and opinionated - they would be right. For example, here is an excerpt from my first post:
Our leaders filter, dilute, and couch their voice through the filter of a mainstream society who vilifies and denigrates those who are principled, consciously living according to specific values, and who choose to think for themselves. Is it any wonder that for all the advances in science, technology, and business that we cannot seem to get along? Via Curse of Complacency in Self Satisfied Leaders
Should you happen to consider yourself a leader, desire to be leader with impact, and are looking for somewhere to explore, discuss, and develop leadership your skills, drop by and say hello.
Business Planning: Q & A from Blog Business Success Radio
June 14, 2007
I was interviewed by Blog Business Success Radio today. I have added some of the text that formed the answers to the questions Wayne asked. Wayne did an excellent interview, check out the show:
You can download the show via [mp3] or iTunes. Visit Wayne’s podcast home page to listen to or download other shows. The show is 60 minutes in length and the download is 14.1 MB.
Business plans are important to any business. How much difference does it make for a company to have a solid business plan from one that does not?
The major difference was that 81% of successful firms would periodically take stock of where they stand with respect to their goals and followed up by making adjustments to their practices and expectations.
The sad news is that less than 33% of bankrupt firms with financial forecasts in their business plans actually compared their results with their forecasts and only 40% of those took any remedial action when their forecasts differed from their goals. [more]
Can a business plan, and even writing a business plan, help a business person to better understand the company simply from following the process?
Absolutely, in the last 17 years I have written, reviewed numerous business plans. When I wrote my last book, Tips and Traps for Writing an Effective Business Plan, I identified more than 467 unique, distinct touch points and wrote about each of those in my book.
If you actually read my book, did the work you will have at least considered each of those 467 areas in your business - I cannot see how anyone could do that work and not come away with knowing their business better. Can you?
One concern people have with business plans is they believe them to be too rigid. Are the numbers and processes in the plan carved in stone?
I have sold thousands of copies of my book and there are specific instructions to email me and request a copy of the financial projections. I can tell you that it the number of people who have requested my free Pro Forma financial statement spreadsheet is about 50 out of more than five thousand.
That means that people are either writing a business plan without financial statements or they are using something else to do them - my experience says that there are thousands of business plans out there without financial projections.
A business plan without financial statements is a dream and has absolutely no foundation in reality and you are kidding yourself if you think you have a business plan without documenting your costs and revenues.
As to your question, of the bankrupt forms that have financial projections only 12% of bankrupt firms reviewed their financial projections/statements and took remedial action. Whereas 81% of successful firms took remedial action - and survived!
The statistics speak for themselves, to make sure I am crystal clear, your numbers are never written in stone because they are changing constantly - if you do not track, review, and adjust your spending on a regular basis - you run a 3 times greater risk of bankruptcy.
How many business plans get written with the best of intentions, and then are left to collect dust, never to be seen again?
More than I care to think about - I heard Anthony Robbins say that only 10% of people who buy a book actually finish it.
I have thought long and hard about this fact over the years - I think the reason many business plans never get touched again is because they are a work of fiction. A work of fiction.
What do I mean by that? Every entrepreneur I have met that wants to start a business exhibits a strong desire to get started quickly. When the desire for something like starting a business is strong and you struggle to write a business plan - the temptation is equally strong to fudge the numbers.
So you tell me, if you write a business plan using ‘fudged’ financial statements would you look at it again? Likely not because it would be a reminder that you ‘fudged’ it. I know about this because I did that to myself the first seven years and I have caught clients doing the same thing.
When I ask them about why they would do something like that I get all sorts of answers. The only important thing they remember after that conversation is a greater understanding of the liabilities they could have potentially created.
Under the law Directors of corporations have a fiduciary responsibility to put the needs of the business ahead of their own. If they got caught in that type of situation in bankruptcy - it would be considered fraud and could go to jail. In fact a I had a client that went to jail for fraud - committed by their manager - the court found they did not fulfill their fiduciary responsibilities and put the directors in jail for the fraud of the manager. Had they properly supervised the manager they would not have been in such a situation reasoned the judge.
Unless you practice intellectual honesty when preparing your business plan you run the risk of writing a work of fiction.
How can this neglect of the plan be changed to actively using the plan in the company’s activities?
Create an intellectually honest business plan, promise yourself to create accurate financial statements and research or get support for those things you do not understand or have no experience with.
Should a company go over their business plan, say annually, and make revisions based on changing business climates?
Even more often if major assumptions and circumstances affecting your business change.
We understand the value of the plan, what are the ways to get started on writing the business plan?
In my book I say start with the Industry analysis, Marketing analysis, and then the financial statements - no sense wasting time on the rest of the plan if the business does not make financial sense, does not have a market that is easily accessible, or an industry in upheaval.
Join Greg On Blog Business Success Radio
June 13, 2007
I will be appearing Thursday June 14 at 6 PM MST on Blog Business Success radio. You can call in and talk with host Wayne Hurlbert and myself about creating effective & powerful business plans.
The dial In Number is (347) 996-5832, call in and to ask any question on the topic of business planning.
If you cannot make subscribe to Waynes podcast [RSS].
Gregs Views Elsewhere: Questions, Reinvent, Green, and Corporate Assholes
June 12, 2007
So far this week I wrote about corporate assholes, going green, reinventing your business, and asking questions to uncover new business opportunities.
- Going Green: Will Corporate Canada Stay Green? Each and every day the environment, carbon reductions, and leaving a smaller footprint on the world becomes increasingly political.
- The Corporate Asshole: A Human Resource Time Bomb: Also called the office bully, teaser, or nuisance a Harvard Business Review essay says that assholes affect the health of employees and affect the ability of the business to perform.
- Reinvent Your Business the Easy Way: It is amazing what can happen when you talk to your customers.
- Ask questions, uncover opportunities: All you need to do is ask a few probing questions and your customers will help you understand their needs and then you might be will be able to see new opportunities.
Integrity: Call Center and Help Center Silliness
June 11, 2007
Call centers they are a sign of the times.
I have had two unpleasant experiences with call centers. One is a small company, the other is a large public company. Each has a call center or help desk to help me, their customer.
Sometimes, call centers are anything but helpful ands I gotta wonder “What were they thinking? Maybe it is rocket science!” Alas, if they would just use some critical thinking we would all be better off.
Where Happened to Critical Thinking?
I really wish people would think before they respond. I wish people were better trained. I wish customer service people would listen with empathy. Listening is the first action that shows you care about me, the customer.
- Large Company Call Center: I would guess that the large company uses an outsourced call center. I could not filter the fellows heavy accent, he talked to fast, and failed to understand my point of concern. I waited 10 minutes, called back and got someone else on the phone who I could understand, knew how the system worked, understood my problem and actually resolved my issue. Why should I have to resort to these tactics? That guy should never have been on the phone.
- Small Company Help Desk: I called the small company and a new guy answered the phone. He listened carefully and asked clarifying questions - he understood my problem. He then did the right thing saying “I cannot help you but will investigate and call you back.” A few minutes later I got an email response to my phone call, which hacked me off.
Next, I got an email response, I called because it was a major issue and bug. He promised to call but sent an email instead which left me feeling they were ‘handling’ me instead of directly answering my question.
The email response was “This is an issue we are aware of and will be fixing at some point.” At some point!? Some point? Excuse me? This is a major issue for me and my clients. At some point!? When exactly on the calendar is “at some point”?
Lets Practice Intellectual Honesty
Integrity is when we base of our actions on a consistent framework of principles. Integrity with our words is the foundation of who we are and the foundation of every relationship.
Whether you are a business owner, executive, manger, the receptionist, or ‘guy in the back’ - integrity starts with our words - we can observe our integrity by paying attention to ‘what I say when I talk to myself.
Intellectual honesty is making sure that everything I say and do is in alignment with my values and beliefs.
“intellectual honesty — which means keeping one’s convictions in proportion to one’s valid evidence.” [demonstrates the truth of the assertion]. Via Wikipedia
Operating a business intellectual honesty means making sure that everything your do and say in your business is in alignment its values.
Then when one of your employees communicates with a customer they will not appear to be passing the buck, or inadvertently disrespect the customer, they will build the relationship. Because we need effective and helpful call centers.
Sincerely,
Greg Balanko-Dickson, LPBC
Author, Business Coach, Entrepreneur
Live Large! Because when you do, it encourages me to do the same.
Question of the Day: Are U True 2 U?
June 10, 2007
Season one winner of the Apprentice on the BBC was Tim Campbell.
Every Monday monday9AM.tv publishes a short film (6 minutes). All made in one take with no rehearsal and no scripting. Nic has seldom met the film subjects prior to filming.
Nic has a way of capturing the essence of people as varied as rock stars to the homeless, philosophers to the dying, and free spirits to those who fell in love.
At the conclusion of the film he asks a series of questions that will make you think and get you moving. Pretty good for a Monday morning.
Who Are You?
- Who was it that applied for your last job?
- “If you win then I lose”. It is how many of us believe the world to be, but what if it wasn’t?
- Perhaps Tim is starting to describe the face of a new generation of enterprise. Might such an enterprise be capable of being both successful and an inspiring place to be?
- Might it be capable of capturing your genuine loyalty as an employee and as a customer?
- Might the program producers have used a different set of rules?
- How relevant are the questions that you ask yourself?
- Can you say ‘I was true to myself?’
Tiny is New Big, eBay Biz Marketplace, Financing, Immigration
June 10, 2007
My writing on my other blogs:
- The Next Big Thing is Tiny: Smaller Than A Human Hair: Would you be surprised to learn that the next big thing which is expected to make up 15% of the worlds economy - some $2.6 Trillion will be less than the width of a human hair?
- eBay: Business & Small Business Marketplace: The eBay business model continues to amaze me. Anything goes and when I looked at eBay Canada business, I was amazed at the stuff you can buy including Toner Cartridges, Commercial Kitchen Equipment, and yes even a business can be sold via eBay.
- Best Financing: bootstrapping, small business loan, bank loan, angel money, venture capital: check out Ben’s blog and read this article as Ben just raised $1.5 million for his new startup. Congratulations Ben. Good luck in your new venture.
- Immigration Policy: How Government Decisions on Immigration Affects Business: Laszlo Bock, Gollgle’s Vice President of People Operations, testified today before the House Judiciary Subcommittee on Immigration about the practical impact that the U.S. immigration system has on Google.
- Benefits: More Than Just Sharing Space: A common strategy for many startups is to reduce fixed cost expenses by sharing space with another business.
- Success Equals Self Honest: Drop by and view Monday 9AM TV, to listen to what Simon Woodroffe has to say about the H word.
Developing Mental Toughness: Answer the Difficult Questions
June 8, 2007
My friend Rosa Say has been writing up a storm lately, today she was on a similar wavelength in writing the Not-so-Secret Weapon of the Self-Employed. In this article I state that we need mental toughness while Rosa states that we need to “believe in ourselves.”
For instance, one of those obstacles, actually a whole category unto itself, is all the things you don’t know yet as a business-savvy person. This includes talents you don’t have, skills you don’t have, and knowledge that you don’t have.
Therefore, you have to have the self-esteem that says, no problem, all this stuff can be learned, and the belief that says, and furthermore, I can learn it. Via Not-so-Secret Weapon of the Self-Employed
How do you see what Rosa wrote about and what I am saying in this article, are they similar or different?
Answer the Difficult Questions
Today, I was listening to Steve Siebold, a mental toughness coach on TSTN. Steve says that we need to ask ourselves bold questions like:
- Why am I failing?
- Why am I not getting the results that I want?
I don’t know about you but I have resisted answering questions like those two questions and:
Steve says that we need to learn to control and manipulate our emotions in order to get what we want.
In the past, I thought that if I admit failure or acknowledge that I am not getting what I want - there must be something wrong, with me.
Steve says that we need to is gather our mental energy instead of bouncing around like a pinball and move away from being mentally scattered and focus on - getting to a place where we reach a ‘focal point’ - where all my focus is directed on my goals.
It Starts with Mental Toughness
In Steve’s book, 177 Mental Toughness Secrets of the World Class, he outlines the secrets of mental toughness.
Steve says I need to learn to train my mind by stepping out of our dream world into a place where I take control of my emotions under pressure.
There are Three Types of Consciousness
Steve says that there are three types of consciousness:
- Middle Class Consciousness: They just want to be comfortable. They work hard to avoid risk, play it safe, fly under the radar, avoid pain and seek comfort. Ouch! Can you relate to that type of thinking? I know I used to think that way and sometimes I still catch myself doing it.
- Upper Class Consciousness: I am the best, biggest, fastest, strongest, and their ego becomes their downfall. They are successful goal setters but they are not fulfilled.
- World Class Consciousness: This is the highest level of consciousness. These people live in a spirit based consciousness and have released their own self-importance and no longer need to satisfy their ego. They accept personal responsibility and say, “I am the problem and the solution.” They say, “If it is to be it is up to me.” They create an emotional tempest within them that demands manifestation on the physical plane - which gives them the motivation to achieve their goals.
Develop Emotional Fire
People with world class mental toughness are able to identify what they want and why they want it and then turn that into a fire of emotional motivation that gets them to take the action they need to get the results they want.
Key Learning: Control our emotions under pressure. Answer these questions: What is it, what does it mean, what should I do?
Use your emotional monitor to gauge whether you are in touch with your emotional fire, if it doesn’t excite you emotionally, forget about it and keep looking for your emotional fire by answering:
Does it excite me emotionally?
Key Action: Grow Up! Make a decision to abandon fear based language and weed out any fear based language and upgrade it immediately to World Class Consciousness.
Future of E-Commerce Is Bright
June 8, 2007
- Do you conduct business online?
- Do you sell your goods or services online?
- Do you have a way to extend the relationship with your customers in a cost effective, efficient, and accepted media?
- Do you want to implement a marketing campaign that is truly measurable and accountable?
In the last decade the cost of starting an online business has fallen dramatically:
But my back of the envelope calculation is that it is about 10x cheaper to start an Internet business today than it was in the late 90’s — due to commodity hardware, open source software, modern programming technologies, cheap bandwidth, the rise of third-party ad networks, and other infrastructure factors. Via Bubbles on the brain
In the last decade the number of people online has grown substantially:
And the market size for a new Internet business today is about 10x bigger than it was in the late 90’s — there are about 10x more people online (really!), and they are far more used to doing things on the Internet today than they were in 1999.
Today people are willing to buy online:
In 2006, revenue from skirts, suits and shoes reached $18.3 billion, surpassing that from PCs, printers and word-processing programs, which totaled $17.2 billion, according to a report to be released today by a major trade group. Via Less Risk Seen in Purchasing Clothes Online
Competition
Your competition is no longer the guy down the street. Your competition comes from the business model of the guy down the street.
If you have been feeling that your business model is tired and worn out, perhaps using a new, innovative approach via an online store is just what you need. You will however need to stop Settling for Less Than Our Dreams, Limiting Beliefs, Sideways Thinking, and Unorthodox Ideas.
The opportunity to use an online business strategy to innovate and renovate your business has never been better. As long as you are willing to renovate your attitude toward E-Commerce because Passion and Curiosity Begets Innovation, you will need to know your E-Commerce Math, and remember to do more than build a website and actually build a value engine.
Create Your Own Private Marketplace
Your database of email addresses allows you to reach out and touch someone. Using a newsletter, you can softly and gently plug your new products or services and if interested they will stop by your online store and make a purchase. First you will need to know what type of lifestyle you want because running an online business is very different.
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