Category Archives: business plan

Drive Change That Your Whole Team Will Support By Joe Ames, Essergy Senior Associate, (Smart Business Online http://www.sbnonline.com/article/drive-change-whole-team-will-support/ )

The best executives make their mark with strategic, even prescient, decisions. This kind of leadership often spells the difference between success, failure or, more often than not, just muddling along.

A good decision can be made better and create lasting change throughout the organization by following a few simple steps in both the decision-making and implementation phases.

Test kitchen

Decision-making: Socialize your high-level concepts for a policy change or major initiative during the early stages. While the concepts are being cooked, bring key groups into a test kitchen to taste test the initial thinking and act as sounding boards. This will help insure the idea is not being cooked in isolation.

Implementation phase: When the idea is ready, go to the test kitchen participants who can influence others. Keep them in the know, and arm them with information. Ask them to help spread the information throughout the organization. Don’t let managers hide behind being too busy to support the project. Make them aware that the success of this project will be on their personnel review.

Be ready to make adjustments

Decision-making: Seek out possible deficiencies in the project plan by listening for what is really being said, who is saying it and why they are saying it. Where we stand depends on where we sit — and unintended consequences of a change can surface for staff members whose jobs are impacted. Actively soliciting feedback, playing devil’s advocate on your own idea or pending decision can often reveal hidden pitfalls in time for them to be repaired.

Implementation phase: As the project is rolling out, listen for the difference between disagreement with the decision itself and disagreement with how it is being implemented. These are separate issues with separate solutions. Skepticism about the decision’s wisdom or potential effectiveness is a persuasion or even personnel fit issue. A question about the rollout is an operational issue.

Servant as leader

Decision-making: Getting a change to stick has little to do with how smart the change is for the organization and much more to do with the employees implementing the decision in a smart way. For employees to buy in to the change, they must be able to answer the question, “What does this mean to me?” Leaders who understand the concerns and address them along the way will have a better chance of embedding their ideas into the organization.

Implementation phase: Your decision will result in change, some of it uncomfortable for your colleagues and employees. Understanding this and embracing techniques and attitudes of the “serving” professions (counselors, religious leaders) can help. For instance, providing a sympathetic ear and praising collaborative behavior that pushes your good decision toward a sticky one is a smart move. And, don’t forget to celebrate success.

We all have used a version of a classic tool — the Ben Franklin balance sheet — to weigh the pluses and minuses of a decision. Well, old Ben had this to say about making a decision stick: “Tell me, and I forget. Teach me, and I remember. Involve me, and I learn.”

JoeAmes_headshot

Joseph D. Ames has consulted to a wide range of organizations on issues of internal organization and collaboration, and internal and public communications. An experienced coach, he has helped executives and managers navigate challenging organizational and marketplace imperatives.  His background includes more than 25 years of political and business reporting, editing, and management for major newspapers, where he was part of the team that won a Pulitzer Prize for Community Service. He is the author of California’s Afterschool Expansion funded by the William T. Grant Foundation. In addition, he has worked with executives in universities, large publicly held companies, and nonprofits, including the National Institutes of Health and SRI International. www.amesassoc.net

The Pros and Cons of Friends and Family Financing by Rieva Lesonsky

family,friends financing

The types of business success stories that make news typically involve hot young startup entrepreneurs landing millions of dollars in venture capital. That’s why it may come as a surprise to you to learn that the average startup entrepreneur finances his or her business using personal savings or money from friends and family members.

What are the pros and cons of financing from friends and family?

Here are some pluses and minuses to consider.

Pros of friends and family financing:

  • They trust you. No one believes in you like your friends and family do. Assuming you have a good relationship with your family members, they’re naturally inclined to lend you money—after all, you’re family!
  • They care about your success. Friends and family members are motivated to help you financially because they want to see you succeed, unlike outside lenders and investors who are motivated solely by their own financial gain.

Cons of friends and family financing:

  • Friends and family may feel like they can’t say no when you ask them to invest in your business. Because they don’t want to cause hard feelings, they may be reluctant to point out weaknesses in your business model.
  • If your business doesn’t return a profit for friends and family investors, or you’re not able to pay back the loan a friend or family member has extended, you could lose more than money—you could lose a valuable relationship.

Don’t let the risks of friends and family financing scare you away. By treating money from friends and family properly, you can have the best of both worlds—the capital you need and the relationships you value. Here are three steps to take:

  1. Pitch the opportunity professionally. It’s OK to broach the subject informally with friends and family to see if they’re interested, but if they are, you need to make a formal presentation, just as you would with any lender or investor. Prepare a detailed business plan that explains your business model, your marketing plan, your financial projections and what the loan or investment will be used for.
  2. Don’t do a hard sell. It’s easy to feel pressured when a family member needs money. After you make your presentation, give friends and family members plenty of time to go away and consider their options. Don’t push, and above all, never take money from anyone who can’t afford to lose it—no matter how much they insist.
  3. Draw up the proper paperwork. If a friend or family member gives you a loan, you need to put it in writing—including the amount of the loan, the interest rate, the term of the loan and how and when you will pay it back. If a friend or family member invests in your business, it’s even more crucial to document their role in the business. How much equity (ownership in the business) will they receive in return? Will they be an active advisor, partner or board member of your business, or simply provide financing? It’s important to clarify everyone’s expectations. If your brother-in-law expects to be involved in all major decisions and you just thought he was handing you a check, both of you will be in for an unpleasant surprise.

As you can see, financing from friends and family is more complex than just a handshake. But if you take the time to get it right, both you and your “financiers” will be rewarded. To get an outsider’s expert (and objective) perspective,contact a SCORE mentor today. They can help prepare you to talk to your family without drama or emotion.

Rieva is CEO of GrowBiz Media, a content and consulting company specializing in covering small businesses and entrepreneurship. She was formerly Editorial Director of Entrepreneur Magazine and has written several books about small business and entrepreneurship.

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Do You Have a 5-Year Plan for Your Business? by Rieva Lesonsky (https://www.score.org/blog/2014/rieva-lesonsky/do-you-have-5-year-plan-your-business)

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I’ve been writing about small business for a long time, and back when I started, it was standard advice to create business plans looking far into the future—five, 10 and even 20 years.

Of course, in the last few decades, business change has been happening at the speed of light, and advice to create a 10-year or even five-year plan seems almost antiquated now. After all, you may be thinking, how can you possibly know what’s going to happen five years from now? No wonder almost two-thirds (63 percent) of small business owners don’t have a five-year plan, according to a recent survey by Staples.

But contrary to what you may think, the rapid pace of business change is the best reason of all to develop a strategic plan that allows for a variety of scenarios and plans how your business will react to them.

How do you create a five-year strategic plan?

First, get a grip on how your business is doing today. Gather your business mission and vision statements, your business plan (no matter how outdated they might be), your sales data and your financial records. Hopefully, you’re already monitoring sales, cash flow, growth and other metrics using your accounting software and dashboard tools, but if not, take some time to get all the figures together.

Now that you know where you are, where do you want to be in five years? How big do you want your business to grow? Do you want to expand your product or service line, your target market, your staff, your distribution channels? Would you like to be selling nationally or even globally?

Sometimes it’s hard to envision your business’s future that far out. If you’re having this problem, start by picturing what you want your life to look like five years from now. Do you want to be working fewer hours? Do you want to be commanding a staff of 50? Would you like more time to focus on your personal life and direct the “big picture” of the business instead of the day-to-day, or do you want to still be directly involved in your business operations? Would you like to travel the world, get married, have kids or think about retirement? Putting your personal five-year goals in writing can help you figure out what business goals you’ll need to achieve to make them happen.

Once you’ve got personal and business five-year goals nailed down, work backward to identify what needs to happen to get you there. If you want to grow your business big enough to sell in five years, you’ll need to do things like expand sales, build a brand, delegate more and systematize so the company can run without you, and build value in the business to prepare it for sale. If you want to build a national chain, you’ll need to start by adding that second location and expanding regionally.

Working backwards from five years to set goals for three years and one year from now. Then figure out what actions you must take to reach those intermediate goals. You can also break your plan down into quarterly steps and goals. The closer you get to today, the more detailed your plan should be. For example, for the next year, you may want to list monthly goals and action items; three years out, you might list quarterly goals and actions.

Use a SWOT analysis to pinpoint your business’s strengths and weaknesses, as well as the opportunities and threats facing it from the industry, the economy and the competition. Keeping up to date on your target market/s and economic indicators will help you see troubles brewing so you can adjust your plan.

Your plan should cover all aspects of your business: marketing and sales, staffing, operations, financial projections and how you’ll generate or obtain the operating capital you need to reach your goals.

Creating a five-year strategic plan is hard work, but it’s also exciting and exhilarating. After all, you’re taking charge to make your business goals come true—what’s more rewarding than that?

Of course, your SCORE mentor can help you with every step of creating your strategic plan, and offer advice, tools and templates to help. Visit www.score.org for more.

Rieva is CEO of GrowBiz Media, a content and consulting company specializing in covering small businesses and entrepreneurship. She was formerly Editorial Director of Entrepreneur Magazine and has written several books about small business and entrepreneurship.

www.growbizmedia.com | @rieva | More from Rieva