Business Plan Tips & Ideas

Information that you can use to get your ideas on paper so you can communicate better, inspire others and make things happen.

Business Planning – should you trust your intuition?

I believe the answer is “no” and “yes”. This is an important issue, so let me explain with a short story.

About five years ago, an electrical engineer, let’s call him Tom, contacted me for help to put a business plan together.
With the aid of some photos and diagrams, Tom explained the technology he had developed to reduce the impact of a major problem experienced in the dairy farming industry.

His concept was quite ingenious and appeared to provide a cost effective solution to a costly production loss problem. I established that the business plan would need to address two key issues:

  1. The sequence of action steps needed to complete development and set up marketing and distribution channels.
  2. Provide a business case for an associate who had expressed an interest in investing capital in this project.

For confidentiality reasons, I won’t go into details on the technology. And for this article, it’s not that important. What is important is the intuitive thinking process that was driving this man.

Fairly soon in our discussions, I established that little market research had been carried out. So I suggested that this should be an early and important part of his business plan.

After we had some discussions on what would be involved to do this research, I was quite surprised when he said, he was not keen on the idea.

He gave two reasons why he was not keen on spending time and money (a relatively small amount of money) on market research.

Reason one, was that he was scared someone would steal his ideas.

Reason two, was that in his words “I have this strong gut feeling that the farming community will really go for this technology based solution, so I just want to follow my intuition and get going before someone else beats me to the market.”

I was uncomfortable with the idea of omitting this research step, but my client was impatient and not willing to budge.

As a result, we created a business plan and an action plan that was based on the assumption that there was a valid market for the product.

To cut a long and involved story short, the business project failed. Tom and his partner could not get sufficient farmers to adopt his technology and implementation procedures.

Not a happy ending. But not the end of my story.

The theme of this article was about intuition and business planning. Tom’s situation was an example of the wrong way to use intuition.

So here is my reason for saying both “yes” and “no” to trusting your intuition.

Yes: Intuition can be a God-given creative talent. And you should trust intuition for what it really is. Intuition is an idea or inspiration or option for you to give appropriate consideration to.

No: It does not make sense to blindly follow every idea or hunch that captivates your imagination. You also have other natural or learned abilities, like reasoning and communication.

Intuition used well can give you lots of potentially valuable business options. In other words, you have the idea. Used badly, the idea has you!

I have been involved with several business product and service ideas that have had successful outcomes. However, in every case, there was an evolutionary process. The original inspiration or idea was just the seed that started off, what eventually evolved.

Testing or researching customer perceptions and reactions is the best way to drive this product development process. What potential customers think and say is critical. What we think and do must be in alignment to what people want and are prepared to pay for.

Unfortunately, Tom had different priorities. He had become possessed by his original idea. This blocked flexibility and the objective thinking of others.

There can be no guarantees of business success, but I believe that with reasonable market research and better customer communications, Tom’s business outcomes could be have been significantly better.

A few yeas ago, market research was a difficult and expensive process. The Internet has significantly changed this situation. Most new product or service ideas can be research via the internet quickly and sometimes free of charge.

So my suggestion is that you recognise intuition as a potentially brilliant source of ideas, inspiration and creativity. But be aware that it is only half the brilliance of the human mind.

True intuition, plus reality reasoning, is a pathway to business success.

Andrew Smith – The Business Plan Guy

How to Create a Business Action Plan in Less than a Day

I’m in the process of developing a free tutorial on the Accelerated Planning Technique.

This will be a simplified online version of a public seminar workshop that I have conducted in New Zealand, Australia, Canada and the USA: “How to Create a Business Action Plan in Less than a Day”.

APT 3 Step Planning Method

A visual flowchart of the Accelerated Planning Technique ™

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I would welcome your opinion on the following topics I have selected to cover.  Please let me know what you think of the following suggested topics…
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1.    Avoid Getting Stuck: Recognise the trap that 80% of people fall into. This trap kills creativity, blocks your thinking and soon causes discouragement. Once known, you can avoid this frustrating trap like the plague.
(Learning time approximately 7 minutes)
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2.    Visual Planning: We think in pictures. Learn a visual approach for business and project planning that recognises how we think.  It’s fast and you’ll be pleasantly surprised just how simple it can be.
(You will learn this in approx 6 minutes)
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3.    The Idea Dump: Learn a simple and effective way to get your ideas out of your head and onto paper. If you can imagine it, this tool will grab it. And it works even if your thinking is unfocused or confused.
(Learning time approximately 5 minutes)
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4.    Clear, Organised Thinking: How to bring greater clarity to your ideas, goals and implementation plans. This is very powerful. You will learn the essence of a technique taught to me by NASA. As well as bringing clarity to your business and project thinking, it’s the pathway to solving the difficult or complex “how-to” problems you may have to deal with.
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5.    Combine Creativity and Logic: Imagine being able to quickly match creative thinking with logical solutions. If this appeals to you, it’s now time to introduce you to the tool that will enable you to combine creativity and imagination with practical “how-to” thinking. This is the APT Dream it, Design it, Deliver it method.
(Learning time approximately 7 minutes)
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6.    Your Vision of Success: Learn a simple way to determine and communicate your vision of success. See how this can be done clearly and concisely on one sheet of paper.
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7.    Solve the “How-To” Problems with Simplicity: See how the APT Solution Blueprint helps you avoid getting bogged down in excessive detail when it comes to working out the “how-to’s”.
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8.    Action Step Formula: To get results, you need to be focused on getting things done. If you rely on the efforts of others, you need accountability. To conclude this learning material, you will learn the simple APT Action Step Formula, a concise tool that manages purpose, method and personal accountability.
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Again, any feedback on these suggested topics would be welcome.

Andrew Smith – The Business Plan Guy – Andrew”AT”apt.co.nz

Should a Life Plan be a part of Your Business Plan?

When I facilitate business plans for farmers, it is frequently impossible to separate the farmer and his family from the farming business. The two can be significantly intertwined.

The same situation frequently exists for family businesses and for many lifestyle businesses.

So in these situations, a Life Plan or a Lifestyle Plan can become a very important part of the planning process. With this Life Plan/Business Plan combination, it is a relatively straightforward procedure to:

1. Get clear on what the owner and his/her family want in terms of financial and other lifestyle or emotional rewards;

2. Factor these “desirables” into the day-to-day Business Operations Plan – to minimise the work/life conflict; and

3. Make better decisions on the purpose and direction of the business.

If you have potentially conflicting business and lifestyle goals, a combined Business Plan/Lifestyle Plan may be a very good solution.

But, but, but – there are some catches.

To help you decide on the merit of including a Life Plan in your Business Plan, here are some points I use when helping my clients with this type of decision:

Simplicity: From a business perspective, it is simpler and more straightforward if your business life and personal life can be kept separate. In other words, there should be a good reason to blend business and personal goals.

Ownership: The ownership structure of the business needs to be considered. If you own the lot, your choices are unencumbered. You likely have the right to run the business to meet your needs only. However, if there are other shareholders involved, several pitfalls can come up.

Family conflict: If there are major differences in value systems, or there is a history of family conflict, a combined Life and Business plan may be a bad decision.

But before dismissing this option, consider the exceptions…

I have facilitated a combined Business Plan and Family Plan for a family at war. It was a rewarding experience for them and very satisfying for me.

To achieve this, I organised a family meeting at a neutral location. Each family member was encouraged to give their point of view – including their outcome expectations. Where needed, I used facilitation techniques to engage and draw out shyer family members. I also used techniques to ensure that one or two family members did not dominate the meeting.

Those involved with the day-to-day business operations were asked to explain their roles and the difficulties they experience.

Getting everyone involved in this way worked out very well.

Exposing the difficulties and complexity of the business (it was involved in engineering) was a real eye-opener for some family members. It brought about a shift in their thinking. For example, rather than maintain their somewhat selfish approach, two feuding brothers got to understand the complete business and the big picture for the family.

The brothers also got to see the longer term payoffs that would come from everyone pulling in the same direction. 

Bottom Line: If you are considering a combined Business and Life Plan, look to identify potential internal problems.  Combining the two can produce great outcomes. However, you need to be prepared to invest time and patience to handle the people issues.

In Part 2 of this article, I will describe the four steps of a combined Life Plan/Business Plan.

Andrew Smith – The Business Plan Guy

Your Business Plan – The secret of getting “Buy-In”

Three simple steps that will multiply your chances of success

If you are planning anything that’s worthwhile, it is almost certain that you will need the co-operation of others to succeed. The starting point of gaining this co-operation is getting “buy-in” from other participants or stakeholders.

“How do I get buy-in for this project, scheme or business venture”, is a question I am constantly being asked. The best answer to this question is a simple one:
Involvement, involvement and involvement.
What this means is that whenever possible or practical, seek out the comments and opinions of key people who may be able to help you.  Get them involved. Get them engaged. Even if you believe you know all the answers, their contribution may be invaluable.

Consider also having appropriate conversations with people who may appose you. If you understand where everyone stands, your planning can be much more effective.

Getting buy-in by involvement What I’m going to put forward to you now is not something out of a business theory book. It’s a practical method that is a tool of my trade. I use it nearly every day in the business or project planning sessions I facilitate.So why have I said: “Involvement, involvement and involvement”? Why the repetition? The reason is that there are three important stages or phases for any significant project or business initiative,. They are vision, strategy and implementation.  

Here are some how-to suggestions to help you secure buy-in for each of these three stages.

Buy-in for the vision. You will have (or should have), a good understanding of what you are seeking to achieve. In other words, you have a vision.

How about engaging some key people in a conversation that starts something like this:“Gillian, I’ve been developing some goals and expectations for the new product development that I have been put in charge of. Could I give you a brief overview of what I have come up with, and then get some feedback and suggestions from you?”

When you are comfortable that you have a vision that others can relate to, and are likely to support, you can focus on the next phase, strategy buy-in.

Buy-in for your strategy.The conversation approach for strategy buy-in, can be similar to the vision discussion. Here’s an example for a not-for-profit organisation:
“Hi Mark, a while back you were kind enough to listen and contribute to my task of creating a vision for our sports club’s future development. I’m now immersed in formulating the strategy that will be needed to translate this vision into practical reality. Would you be good enough to take a look at what I have come up with so far and tell me if it makes sense to you?”

Implementation buy-in. For many projects or business initiatives, this may be the most critical buy-in requirement. It’s where the rubber meets the road.

So for this last and very critical stage, I suggest you have a two-pronged approach.
Firstly, build relationships.  Very early in the project, you should identify the people who will likely be involved in the implementation phase. Some may be in your organisation; others may be outsiders – like suppliers or advisors etc. Build relationships with these people. Get to know them. Put your wants and ego aside and get to know what makes these people ‘tick’. What are their interests and aspirations? What turns them on, and what turns them off?

Secondly, decide how you can best work “with” each of your key implementation people, in a way that will make them feel a part of the achievement process. Be generous with your appreciation, and careful with criticism.

Summary: It’s important that we remember that what we can achieve by ourselves is limited. However, if you can involve and engage the services, talents  and resources of others, your scope is magnified.

Andrew Smith

 

Writing a Business Plan – avoid this frustrating mistake

Every month, I see abandoned attempts at business plans. Each one usually has a story attached to it…. and often it’s a story of frustration and disappointment.

But here’s what’s interesting… I estimate that in around 50% of cases, this frustration and disappointment was avoidable. Many of these plans could have been successful if they had avoided one mistake.

The mistake?

The author was trying to prepare the wrong type of business plan. Let me explain.

Broadly speaking, there are two types of business plans.

Type One: The first is the kind that you might take to a bank or potential investor. Its purpose is to persuade someone to lend you money or invest in your business.

Type Two: The second is essentially an internal plan. It’s a business success blueprint or business direction roadmap. Its purpose is to effectively convert ideas and goals into good decisions and smart action steps. If it’s a good plan, you will always be clear on what you need to do next; on your pathway to success.

So what goes wrong? What causes the frustration and disappointment?
The problem arises because of two factors:

Firstly, most books on business planning, and most of the software available, is fundamentally directed at “Type One” situations. (Remember, that’s the focus on getting finance.) The same applies to most of the business plan templates promoted on the Internet.

Secondly, a large percentage of business owners and corporate managers have a “Type Two” purpose in mind. The reason they are planning is that they want their business operation to be successful. Frequently, they are also looking to solve the difficult “how to” issues.

Clearly, a “Type One” business plan is not the solution for the latter situation.

So how do you avoid this problem?

A: If you are seeking to maximise your control to achieve business success, then the tool you need is an Internal Business Plan. Another name for this is a Strategic Business Plan. (This is my area of expertise and I will be looking to feed you lots of useful information in the future).

B: If it’s finance you need, and you are clear on your business purpose, direction and focus, then the Internet will present you with a generous number of solutions. Many are free.

A note of warning though… 80% to 90% of venture capital finance applications are declined because the business proposition simply does not stack up. In my opinion, failure to plan the business internally is a major cause.

– Andrew Smith

100 Day Plans

I have long been a fan of the 100 day plan. It’s a magic time frame. Long enough to get something worthwhile achieved, and short enough to keep the mind focused.

Kevin Roberts, CEO of Saatchi & Saatchi, penned a good blog post on this topic a few days ago.

He starts off:
“I am an optimist. I believe in our ability to shape the future, right wrongs, make life better and create new opportunities. That’s why I am a huge believer in 100 Day Plans. The 100 Day Plan lifts your eyes, mind and heart up off the pavement and out to the horizon. It cuts a path through detail swamps and meeting deserts to create action. A great 100 Day Plan demands a great challenge. A challenge that can be achieved but only with dedication, a little sacrifice and a big stretch of the imagination.”

You can read the full blog at http://krconnect.blogspot.com/2008/03/100-day-plans.html

– Andrew Smith
PS When will I be able to write like this?