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

The Marketing Plan – An Alternative Approach

A major part of any good business plan will be the marketing plan.

For some, the marketing plan – is the business plan.

Any way you look at it, your marketing plan deserves serious consideration.

The usual approach is to start with the product or service, and then think through the steps that you or your team will engage in, to take the product or service to market.

Some call this ‘hope marketing’. You plan it and hope for good results. Frequently, the results are disappointing.

An Alternative

As an alternative, let me tell you about an approach that turns the above thinking on its head. An approach in which the product or service comes last. (Or forth to be exact.)

This approach was presented by Internet marketing guru Ed Dale, in a project called The 30 Day Challenge (2007) – http://www.thirtydaychallenge.com Ed called it “A Magnificent Symphony of Four Parts.”

Here is a brief overview of these four parts:

Part 1 is about “Market Research”. Here, you identify a market or niche Market and get to understand what their problems and needs are. Also, you get some idea of what the competition is like. There are now a host of tools available on the Internet for this type of market research. Many are free.

Part 2 Ed Dale calls “Traffic”. This more or less asks you, how you will go about communicating to your market. This may be online, offline or a combination of both. If you can’t do this cost-effectively, you may need to seriously rethink your approach.

Part 3 is called “Conversion.” This is about selling. Given that you can cost-effectively solve the problems of Part 2, you can then work out how you will ‘sell’ people on what you have to offer. This may be simple, or it may be very hard.

The point Ed Dale makes here, is that you may like to ‘test the water’, by trying to sell a competitors product. If it’s very difficult to make sales, you again may need re-evaluate your original thinking.

Part 4. Now we get to the part you understand, or thought you did . . . your product or service. The point here is that if you have carefully been through steps one, two and three, you will be a lot smarter: 

  • One: You will understand your marketplace better. You’ll understand their problems and their wants and needs. If you have done your research well, you will know how motivated they are in seeking solutions. Also, knowledge of your competitors strengths and weaknesses could change your thinking.  

  • Two: You will understand what’s required to be able to talk to your market and build relationships.

  • Three: You will understand what’s involved to get customers convinced so that they will give you money to buy what you are selling.

The big payoff

If you are in charge of product development, maybe you can now design a ‘killer’ product.

If making changes is not an option, you can make decisions on how to best ‘position’ your offering – based on your enriched market knowledge.

If this marketing strategy has caught your attention, you can get more information at http://www.thirtydaychallenge.com/members/day1/

Andrew Smith

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

 

On Strategy and Tactics

About 15 years ago, I had two different mentors teach me and coach me on the topics of Strategy and Tactics.

Each was knowledgeable, experienced and passionate, so I have developed a high interest and respect for these two success concepts.

I’m working on an article to succinctly describe what each is, how they differ and how you can use each to your advantage.

In the meantime, let me whet your appetite with some ancient wisdom:

“Strategy without tactics is the slowest route to victory.
Tactics without strategy is the noise before defeat.”

Sun Tzu (Chinese General, circa 500 BC)

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?

Mark Twain on Business Plans

“The secret of getting ahead is getting started. The secret of getting started is breaking your complex overwhelming tasks into small manageable tasks, and then starting on the first one.”

Mark Twain

“Goals” and “Objectives”: Know the difference, get better results

Most think of “Goals” and “Objectives” as being pretty much the same thing. However, if you want to convert creative ideas into concrete results, there is an important difference.

So that I can best demonstrate the difference, let me start with some definitions.

An “Objective” is a specific description of what is required to be achieved. They are usually described using “objective” language. In other words, precise and non-emotional terms. For example:
“My objective is to increase my income by 10% to a net $10,000 per month by August 1st, 2008”.

Objectives are frequently written to meet the so-called SMART rules. SMART stands for Specific, Measurable, Achievable, Realistic and Time defined.

Now if I haven’t scared you away, let’s talk about goals. These are much more fun.

A Goal is a softer and more general description. It is something that you would like to achieve that can be described “subjectively”. The big difference is that there is no pressure to be specific. And, it’s perfectly acceptable to use emotional language.

“My goal is to be very happy and financially independent.” is quite non-specific, but still qualifies as a goal.

To some this may be unacceptably loose. However, for many, it may be their first stepping-stone on a pathway to success.

How and where to best use Goals and Objectives

Use “Goal” language here:
If you are brainstorming, using imagination or developing a vision, the less formal “goal” descriptions have strong advantages.

Here’s why: In most creative processes, we tend to think conceptually. If you have to comply with the SMART rules, creativity could be stymied. Thus people may become discouraged and innovation would suffer.

What about “Objectives”, what’s their purpose?

To convert goals into effective action plans, we use a process called “strategy formation”. The purpose of the strategy is to handle all of the ‘how to” issues.

When you have prepared your strategy properly, you should be clear on exactly what you need to do, to achieve success. This is where writing “objectives” comes in.

The writing of objectives can be a good initial test for your strategy. If you are struggling to specifically describe exactly what needs to be done, it’s a signal that your strategy could be flaky.

When your strategy is well designed, the writing of specific or SMART objectives is reasonably straightforward.

So to summarize…

Use “Goals” initially, to express the physical and emotional outcomes you seek to achieve.

Then, use “Objectives” to describe the more detailed specifics that your action or implementation plan is designed to achieve.

Footnote: In a subsequent article, I will cover a quick and simple way to design strategy.