What Business Plan Type Is Best for Me?
Shakespeare wrote, “A rose by any other name would smell as sweet.” I say a plan by any other name is still a plan; but many different things get labeled "business plans."
You'll see that label on:
- Strategic plans
- Annual plans
- Operational plans
- Feasibility plans
- Business plans for startups seeking investment money
And of course I use the term “lean business plan,” which is what I say all business owners need. No wonder it's confusing! Here are a few tips to help you sort it out.
1. Start At the Beginning
All business plans begin with this basic principle: form follows function. What do you want from your business plan? The answers to that question determine what kind of plan you need.
2. Think Lean
At its heart, every business needs a lean business plan. It’s faster, easier, and much more useful than the mythological big business plan. It’s what every business owner deserves as a tool for optimizing the business. The Lean business plan:
- Leads off with bullet points for strategy. This is for your own business eyes only, not for public consumption. It's not explanations, rationales, or supporting documents. It's a simple list of reminders about focus: your target market, your product, and your business's identity. Sometimes it also includes a breakdown of what you'll call "success" — but it's quick and dirty, in list form only
- Develops the right tactics. You can have a great strategy, but you'll never make it happen without tactics. These are also bullet points featuring what you've decided are the key points of your marketing, product, financial, and recruitment plans. These are for your team's eyes only, again … not for outsiders. And they'll cover pricing, channels, social media, launch dates, products, services, features, and so forth
- Includes concrete specifics. This is where you list your assumptions, milestones, tasks, deadlines, responsibilities, and performance expectations. The key here? Measurable, trackable, and accountable
- And finally, pulls everything together in budgets. These are concise, too: your sales forecast, spending budget, and cash flow
With this lean business planning as a jumping-off point, you continue a regular process of review and revision to keep it fresh. Even if your business doesn't need an elaborate plan, it'll benefit from this framework. Review and revise as needed, at least once a month.
3. Those Other Types of Plans You May Need
Again, because terminology tends to "bleed" from one type to another, don't rely on labels. Think of the function of the plan and you'll be able to narrow down the type that will best serve your business needs. Here are a few more common scenarios.
Plans for Banks, Investors, Buyers, and Partners
When you're presenting a business plan to a bank, angels, or other investors, your latest revised "lean" plan is the first draft. Once again, remember, that plan is just for management; you'll need to dress it up to include the additional content that outsiders will want and need. Among these items are:
- Summaries and Explanations: make sure your executive summary is strong; that's all some of your outside target audience will read. Keep it short, and make sure it fits the need. If you're immersed in a selling-the-idea or selling-the-potential mindset in the written plan, your summary should include key highlights that will pique those readers' interest. Your lean plan also won't include detailed explanations of your strategy, your company, your market, or your product. It has just summary tactics for marketing plan, product plan, financial plan, and management plan. Think of your readers – outsiders looking in – and help them understand the business. Achieve the specific goal of this dressed-up business plan
- Formal Financial Projections: while the lean plan might be fine with just sales forecast, expense budget, and cash management, a formal traditional business plan has to include formal financial projections that respect finance and accounting standards and include Profit and Loss, Cash Flow, and a Balance Sheet. Banks will want to see projections of key ratios as well, and investors will like a Use of Funds table and sometimes a Break-even Analysis.
Startup plans should be lean business plans with the simple addition of estimating startup costs and financing tactics. They become plans for investors or banks only when the startup looks for financing from investors or banks.
Operations or Annual Plans
Operations plans are lean business plans by another name – and annual plans should be lean business plans narrowed down to just the next year.
Growth or Expansion Plans
A growth or expansion plan tends to be narrower, with a focus on a specific area or subset of a given business — for example, plans to develop new products. These plans can be strictly internal, or they can be linked to loan or investment applications. And they should adhere to the principles of the lean business plan.
Growth or expansion that's being funded internally needs only internal plans, but don't skimp on the details. Know what you're funding before you fund it: take the time to estimate both potential sales and expenses for the new product.
On the other hand, if you're pitching prospective investors, whether banks or individuals, approach a growth plan as if you're pitching the business from scratch. You'll need just as much detail in terms of company and product descriptions, management team backgrounds, and solid financial data.
Strategic plans tend to be a subset of internal plans. They focus on strategy and tactics, but skip the detailed financial data and milestones of an operations plan, with a focus on company-wide priorities. In that context, one key to setting strategy for your company is carefully examining your strengths and weaknesses as a business. Knowing what your company does well enables you to play to your strengths and select the right opportunities to optimize them. That way, you're funneling resources efficiently, to the areas where they provide the best payoff.
Conclusion: Do Only What You Need
With all the different meanings of “business plan,” I recommend you use good planning to help you run your business as well as possible. Keep it lean. Don’t make it a document for outsiders unless you have a business reason to show a business plan to outsiders. Keep it fresh. Use it to get what you want from your business.
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Franchise Buying Tip: Bounce Your ideas Off of Others
Bouncing your ideas off of others is a strategy that can and should be used before making any major purchase, like the purchase of a franchise business – especially because it’s easy to lose perspective when you’re focused on all of the intricacies that go into choosing and researching a franchise that you feel is right for you.
I really like the British *definition of the word “perspective.” This: “The proper or accurate point of view or the ability to see it; objectivity.”
If you’re seriously contemplating the purchase of a franchise business … or any kind of business, you are way too close to it. You’re too close to get the proper perspective. Your decision-making skills have the potential to be affected in a very negative way. That’s why it’s wise to bounce your ideas off of people you like and trust.
When to Bounce Your Ideas Off of Others
You really need to make sure you do this at the right time in the process. Don’t get others involved too early, as you aren’t going to know enough about the franchise concept and all the bells and whistles that are part of the opportunity you’re interested in. You need to make sure you have a good understanding of the business, and what your role as an owner would be, before you bounce the idea off of others. You also have to make sure you’re *ready to become an owner. In other words, before you bounce your ideas off of others, you need to be pretty serious about investing your money in a franchise.
You definitely shouldn’t ask for opinions on what you may be about to do too late in the process, either. That’s because you may be at the point of no return. That’s the point in which you’ve convinced yourself that whatever franchise opportunity you’re looking at is the perfect one for you. You’re 100 percent sure that it’s “the one.” Once you’ve made the mental decision to buy, it’s going to be almost impossible for anyone you confide in to slow you down, or even to reverse your decision.
The best time to approach others about your future plans is during the middle of the process. Not too early and not too late.
There are all sorts of people you can share your ideas with.
Friends who have proven to be open to different things are good people to bounce your ideas off of. The more open the better.
Friends who own small businesses are wonderful people to bounce your ideas off of too. After all, they’re living the trials and tribulations of business ownership every day.
Caution: Some independent business owners are what I call “franchise-negative.” They don’t like franchise businesses. Maybe they’ve had to compete against a franchise business or two, which is no easy feat. If you find some negativity when you bring up the word “franchise,” you may have to go find another friend to share your plans with.
Certain family members could prove to be good choices to share your ideas with, too. Who’s really successful in your family? Talk to them. See what they have to say.
Use Business Experts Too
Since you’re thinking of going into business, consider approaching business experts with your ideas:
- Contact business professors at colleges in your area. See if they would be willing to spend some time with you
- Contact SCORE. They have experienced business counselors on staff who listen to business ideas all day
- Your local Small Business Development Center (SBDC) has business counselors on staff, too. Not only can you bounce your ideas off of them, you’ll also be able to tap into the information they have on financing and business plans
Don’t do this alone. Buying and owning a franchise business is a big commitment. Don’t keep everything to yourself. Bounce your franchise ideas off of others – you’ll be glad you did.
*Non-U.S. Government links
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Tips for Entrepreneurs
As an entrepreneur every now and then it is important to take a step back and really take a look at the big picture and dive back in with refreshed energy. Here are few points to revisit and reevaluate after you get up and running.
Reach Out to Your Network
Maintaining relationships is a job in itself; this is why you should schedule it if you have to. As the old saying goes “your network is your net worth”. Often time’s entrepreneurs go on a networking campaign when they first start up and fall off once they open shop, when it really should be an ongoing exercise. Segment your network, keep all your online profiles up-to-date, reach out, and pay it forward.
Never forget to give back after your business is up and running. There are enormous business benefits from giving back. Community service builds credibility, helps to establish your business within the community, and reinforces your business values. You may also consider mentoring an aspiring business owner within your network!
Never Stop Being a Student
We know that small business owners are time-starved individuals. It’s easy to go on autopilot when you have established a routine. However, it is important to have your ear to the ground and always remain a student. We live in a fast paced world; technology is ever-changing, new competitors will emerge, and you must remain engaged and up to date on changes and trends in your industry so that you can make better business decisions. Stay up to date with you knowledge community by attending industry events and participating in industry association. Take time to read industry publication and remain current on certifications and licenses.
Customer Experience Management
This is one of the most important things to continuously measure and audit. Mastering the customer experience can inspire return business, encourage word of mouth referrals, and help inform business decisions. Consistent brand experience throughout your business operations is good for employees, customers, and ultimately revenue.
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The Ins and Outs of Alternative Financing
After the recent financial crisis, traditional banks are more reluctant than ever to fund small businesses. Entrepreneurs need not be discouraged though, as a new trend has emerged in the world of finance: “alternative lending.” What exactly is alternative lending and is it right for your business? Here are some resources to help demystify the latest options in small business financing.
“Alternative Lending” Defined
You may walk through open doors of your local bank only to hit a brick wall. According to this Alternative Lending e-guide, traditional banks decline up to 80% of small business loan applications.
Enter the “alternative lenders,” aka non-bank lenders. With faster underwriting and shorter decision processes, alternative funders have grown increasingly popular. They lent approximately $3 billion in 2013, double the amount from 2012. Banks tend not to loan amounts less than $200,000, so alternative financing appeals to small business owners in need of smaller loans.
Types of alternative funding include term loans, merchant cash advances, factoring and equipment loans, and you can apply for alternative financing online.
Beyond Brick-and-Mortar Banks
It seems like you can find everything online, even money for your small business. In the SCORE online workshop, “An Insider's View: Securing Capital to Grow Your Business,” Ty Kiisel, Contributing Editor at OnDeck, explores these new financial options in depth.
Applying for online business loans requires less paperwork with a shorter wait period. You can often learn your fate in five minutes and receive funding in 24 to 48 hours. However, interest rates are often higher than those of traditional bank loans.
Sources of online financing include:
- Non-profit lenders
- Invoice financing
- Online business loans
- Loan matching sites or aggregators
Get the Crowd Behind You
Another buzzword has hit the world of financing: “crowdfunding.” This is the funding of a business or project by raising money from a large number of people. Individuals can commit as little as $5 and receive a reward for their donation. Kickstarter and IndieGoGo are popular options, but the list of crowdfunding websites grows every day.
In the SCORE Small Business Success podcast on Crowdfunding, Maryann O’Neil and John Montelione, co-founders of a crowdfunding website called MsGenuity, detail the process. They explain the two types:
- Reward based crowdfunding: A person contributes money and receives a reward in exchange
- Equity based crowdfunding: A person contributes to become an investor of the business
Why is crowdfunding so popular now? The great recession and high unemployment rates inspired the Jobs Act of 2012. The new law encourages small business financing by relaxing securities regulation so entrepreneurs can raise money from the public.
Alternative financing may seem like the perfect answer for a small business owner, but every loan comes with risks. A SCORE mentor can help weed through your financing options, so you can decide what’s best for your small business; get connected today.
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#DreamSmallBiz: National Small Business Week Recap – Part Two
Last week, we gave you a recap of some of the events that took place during the first half of National Small Business Week, which took place May 4-8. Throughout the week, we held events focused on trade, lending for small businesses, veteran support, how to target millennial entrepreneurs, and an InnovateHER competition in which entrepreneurs live-pitched their products and services for a chance to win prize money provided by Microsoft.
In last week’s post, we noted that while many participants physically attended our events, we also gave participants the option to watch our events via live-stream and join in on the conversation. If you weren’t able to join us for live-streaming, here’s a second recap of some of the events that took place later in the week during National Small Business Week 2015:
Day Three: Financial Programs in San Antonio
On Wednesday, May 6, we landed in San Antonio, Texas for a town hall-style meeting focused on how businesses can benefit from SBA’s financial programs including LINC, a new SBA program that connects small businesses with SBA approved small business lenders. Participants also had an opportunity to engage in a discussion with the SBA Administrator, Maria Contreras-Sweet, on the opportunities and challenges facing the small business community.
Members from President Barack Obama's cabinet were also present as Sweet focused on what makes San Antonio unique for small business owners, noting the way its citizens embrace immigration, something she flagged as important to the growth of small businesses. “40 percent of the Fortune 500 were started by immigrants (or) are children of immigrants,” she said. “There’s just a lot of good stuff happening with immigrants today.”
Day Four: Entrepreneurship in New York
On Thursday we came together in New York City for a town hall conversation focused on entrepreneurship. Mike Muse, CEO of record label, Muse Recordings, and a successful music executive and radio personality who has been able to sustain his success throughout his career, hosted the event, which highlighted the individual journeys of a diverse set of entrepreneurs, giving attendees an opportunity to hear from successful millennial entrepreneurs across various industries across New York City. According to recent data from the Kauffman Foundation, 54 percent of millennials want to start a business or have already started one. The SBA continues to foster the growth of millennial startups through many outreach efforts including a Millennial Road Show that is a part of SBA’s “My Brother’s Keeper Initiative,” a Presidential priority to ensure that all young people have opportunities to improve their life outcomes and overcome barriers to success. If you missed the live-stream of Thursday’s event, you can watch the full session on YouTube here.
Day Five: Awards and More in Washington D.C.
As we closed out National Small Business Week on Friday, May 8, in Washington D.C., we wrapped up the inaugural InnovateHER final competition, a live pitch competition which featured 15 entrepreneurs whose products and services best met the SBA’s competition criteria and presented the greatest potential for success in supporting the lives of women and families. Each of the top finalists gave a two-minute pitch on their product or service in front of a team of expert judges and answered judges’ questions. The first place winner, Bethany Edwards of Lia Diagnostics, received $15,000 in prize money provided by Microsoft for her flushable pregnancy test. The second place $10,000 prize went to Lisa Crites, creator of The Shower Shirt, a garment for breast cancer mastectomy patients to wear in the shower and keep surgery sites dry and clean. The $5,000 third place prize went to Sophia Berman of Trusst Lingerie, which provides a better bra for larger busted women. The full video of the final InnovateHER pitches, the Administrator’s commentary, commentary from Microsoft’s Cindy Bates, and an all-female panel on small business investment tips is available here.
The SBA also distributed National Small Business Week awards, including its Exporter of the Year Award and the award for the National Small Business Person of the Year. Check out this video clip for live video highlighting this year’s winners from a portion of that awards ceremony.
If you missed any of the excitement from National Small Business Week 2015, be sure to check out the full list of webinars, training materials, and event videos on the National Small Business Week YouTube page. We look forward to celebrating with you again in 2016!
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Three Dangerous Myths in Entrepreneurship
One thing that bugs me about the world of entrepreneurship is how often people who ought to know better propagate these three very common and potentially dangerous myths. They come up constantly as I talk to entrepreneurs at meet-ups, business plan competitions, and in classrooms. And I see them every day in blogs and other online content. I sometimes worry that there are people who claim to be startup experts whose experience seems to be mainly reading what other people say and repeating.
Myth 1: Be your own boss
Be your own boss? With due respect to Melinda Emerson’s excellent book with that title, that’s only half true.
When you build a business, you have lots of bosses. Customers, just to name a few. Then there are people to whom you owe money, people who owe you money, people with whom you form partnerships or strategic alliances, and your employees. All of them, at one time or another, call the shots.
And if you have investors, you definitely have bosses. That money buys them a "say" in how you run things. Get used to it.
Want ultimate freedom and independence? Look elsewhere. Wealthy parents are nice. Winning the lottery is nice. Learning to live without money and without any relationships or dependents may not be all that nice, but it's another route to having "no one to answer to." Starting a business, however, isn't.
The half of “be your own boss” that is true is that when you have your own business, you do have the freedom, much of the time, to decide what risks to take and what hours to work … as long as your customers and investors are happy.
Myth 2: Getting Investors is Always a Win
Business schools, entrepreneurship classes, and all those blog posts that repeat worn clichés must take most of the blame for this one. After all, it's what we teach: you develop a business plan, get financed, and start. And there is some truth to it. Often, this is a win, and it's good.
But it’s also a myth. Investment is not always a win — and not in all ways.
Finding investors is a conditional win. It's a plus IF…
- You need investors and can use the money to grow the business; and
- You find compatible investors
We've talked a lot about finding compatible investors, but it bears repeating: getting the wrong investor is like getting in the wrong marriage. It not only implodes your business but can wreck your entire life.
That's why I recommend that if you can build your company without investment, take the chance to do it. It'll be worth the experience of no one looking over your shoulder — at least no one with the clout of an investor. Being the sole owner is a great thing, if you can make it happen.
But, yes, it's also a fact that that's not possible for every business. Some businesses need investment and, in fact, won't survive without it. But if you have options — if it's a choice between growing slowly without investors versus growing faster with them — choose carefully. Slow growth is still growth, and survival is what counts.
Myth 3: The more money, the better
Do a little digging and you can actually find a curious thing: a 1997 Dun & Bradstreet research report on reasons for business failure that lists "too much money" as one of the causes. And no – they weren't kidding.
I think for most startups, there's a "sweet spot" – a point at which the resources match the opportunity. Money gets spent the right way: building the business without overspending. But with a surplus in the coffers, guess what can happen?
I saw this firsthand with my company, Palo Alto Software. If we'd have had more money in 1999, we might not have survived the dot.com crash in 2001. Instead, we didn’t have enough monetary rope to hang ourselves … and it's been a lesson I've remembered ever since.
So if you're thinking you'll be an entrepreneur because:
- You don't want to answer to anyone,
- You think having someone else foot the bills for your business would be fun,
- Or you've got a pile of money stacked up, just begging to be put into a new venture ...
… you may be asking to become a victim of these alluring, but dangerous half-truths.
Think it through.
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So You’d Like to Start a Home-based Baking Business: Now What?
Martha Stewart famously entered the food service business with her basement-based catering company in the 1970s – but it takes hard work and lots of homework to make it that far. While a home-based baking business comes with many perks, like the flexibility of working from home and a lower-risk entry into the competitive food service space at your own pace, it’s important to understand the rules and regulations around the production of food for public consumption in an in-home environment before you get started.
While food production from your home is heavily regulated, it’s far from impossible. If your passion involves turning your baking skills into a home-based business, here’s what you need to know to succeed.
Laws, Permits, and Licenses
While there are several steps you need to take to ensure that your home-based baking business is considered legal, laws can vary from state to state, so be sure to do your homework regarding what is legal in your area.
First, what do you want to call your business? Will you go for something unique, or for a more generic name like “Sarah’s Bakery” or “Corner Café?” The later are generic enough that they aren’t protected, but that can be a double-edged sword – while another business with a generic name like yours cannot take legal action against you, it also means that your business isn’t protected if someone wants to use the same name. If you want to find out if a name is already registered, you can check the Trademark Electronic Search System. There is also information available on sba.gov about registering your DBA (doing business as) name and other helpful steps like obtaining a tax ID number and securing your permits and licenses.
Second, keep in mind that even if you’re starting your business from home, your business is still subject to license and permit laws. To get started, you can select your state from this list to find out which licenses and/or permits you will need, as well as the information to guide you through the application process. You’ll also want to visit your city or county government website to secure a general business license, which legally entitles you to operate your business and typically includes a small fee. Some city and county zoning and planning agencies also require home-based businesses to secure a home occupation permit. If a permit is not required in your city, the zoning office can tell you whether or not your neighborhood is zoned for a home-based baking business. (Click here for more helpful information on sba.gov about zoning laws for your home-based business.) You may also need to check with your homeowners association, as it may have rules that restrict the type of business activities you can conduct within your home.
Third, let’s talk taxes. If you sell your baked goods in a state that charges a sales tax, you may need to apply for a tax permit or otherwise register with the state revenue agency. If you need more info on sales taxes for small business owners, check out this blog post.
Health, Safety, and a Fully-equipped Kitchen
In addition to business licenses and permits, you may also need a permit or an inspection from a local fire department since your business will likely require the use of flammable materials. Some communities also monitor air and water pollution by businesses, so check with your state EPA to see if these rules apply to you.
Your county government is typically responsible for issuing your health department permit, especially because your baking business involves selling food to the public or to other businesses. Your state may require additional permits for food service or food preparation.
Once you’ve locked down the business side of things, there are health codes and regulations to consider regarding your kitchen space.
While this isn't necessarily your first step as a home-based baker, your kitchen is something you need to consider before you move forward with your new venture. If you already know what product(s) you intend to produce, check to ensure that you have the right equipment with which to adequately prepare, cook, store, and transport your baked goods.
If your kitchen/equipment situation isn’t what you need it to be, you may want to consider investing in a separate kitchen and/or additional equipment to scale your business. Also keep in mind that commercial kitchens and local restaurants may be available to help, especially if those businesses don’t hold extended hours, as you might be able to rent kitchen space during odd hours. It may seem like a larger investment, but baking in a kitchen that is already health department-approved will also save you time and money, and it gives you the flexibility to bake when your orders come in and stay home when there aren’t orders to fulfill.
Some states do forbid the use of residential kitchens for commercial food production, and some local governments also restrict at-home commercial food production, so be sure to check out local zoning laws and contact your local Public Health Department before getting started.
If you do your homework, you can absolutely succeed in what can be a very rewarding segment of the home-based business market. Happy baking!
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Streamline Your Small Business’s Sales Strategy
Developing strong sales and customer loyalty can be a difficult, time-consuming endeavor. Without an effective strategy, even a promising company can fail. The task need not be overwhelming though; practice and most importantly, passion, will help you close more deals. Here are some resources to make your sales process as smooth as possible.
Embrace your inner salesperson
Most of us are not born sales people, but once you become familiar with the techniques, selling will become a natural part of owning a business. In “Expert Tips for Sales and Customer Loyalty,” an interview with SCORE mentor Steve Engelhardt, he explains how small business owners should treat each sale as an opportunity to gain the next sale and earn a loyal customer.
If you believe in your product and respect people, customers will appreciate your sincerity, and they might reward you with more business. Keeping customers satisfied leads to more sales.
Find your customer
Before you can create loyal customers, you must first find them. Did you know 39% of sales still originate from outbound marketing, such as telemarketing? Keep in mind that sales calls demand time, and not all leads become sales:
- Every 30 dials leads to 1 conversation
- Every 3 conversations lead to 1 appointment
- Every 3 appointments lead to 1 opportunity
The key to success is consistency and persistence. See this month’s SCORE infographic “B2B Sales Calls” to learn more about reliable sales techniques.
Update your sales methods
A growing trend of nontraditional sales techniques are hitting the streets. In the online workshop “Pavement-Pounding Strategies to Generate More Sales,” entrepreneur and SCORE Mentor P. Simon Mahler recommends going outside and meeting customers face to face. He offers unique ideas to stand out in today’s advertising-saturated world.
One approach uses the entire small business team not just a sales person. Employees wear shirts with the company logo and interact with neighbors. The shirts encourage brand recognition and team spirit. He suggests even handing out decals; you want to show how your small business is unique.
Mahler says no matter the method, your sales strategy should not revolve around closing the next deal but about nurturing and caring for those around you. Being helpful builds customer loyalty. Develop personal relationships, engage with the community, and sales will follow.
Each small business must determine the best sales plan based on their product or service and the size of their sales team. A SCORE mentor well-versed in your industry can help you strategize and ultimately gain more customers.
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Celebrate National Small Business Week with Us; Live-stream, In-Person and Online Using #DreamSmallBiz
There is no denying the positive influence small businesses have on our nation’s economy. During National Small Business Week we honor their hard work and contributions to our communities. We are kicking off the festivities with live events with SBA Administrator Maria Contreras-Sweet in five cities throughout the week. Can’t make it to an in-person event? You can watch the events live-streamed online at www.sba.gov/nsbw. While you watch, join the conversation and tweet in real-time using #DreamSmallBiz directly from the NSBW home page!
Additionally, we’re providing educational webinars to help your small business thrive. Webinars start this afternoon and run throughout the week. We’re kicking it off with our webinar on understanding the Fair Labor Standards Act (FLSA), which will not only help you learn to correctly classify employees as exempt, non-exempt, or as an independent contractor, but will also teach you how to know when and how you are required to pay employees – you can register for the webinar here. We also have a great webinar planned for this evening with Join Steve Strauss, USA Today Small Business columnist, and Jeff Biesman from YP, discussing the secrets to crafting a digital footprint.
There’s a lot going on this week, so we want to make sure you have all the key details! Visit www.sba.gov/nsbw today to explore the events taking place near you throughout the week. While you’re there, sign up with your email address and zip code to receive conference information and reminders.
We’ve also put together a handy social media guide to help your small business promote this week’s events and to join in on the ongoing conversation about National Small Business Week.
Small business owners and entrepreneurs are working every day to grow small businesses, create 21st century jobs, drive innovation, and increase America’s global competitiveness. We hope this week’s events and resources help your small business celebrate the contributions of America’s entrepreneurs and small businesses, and we hope you’ll help us spread the word about National Small Business Week!
To learn more about the United States Small Business Administration, please visit www.sba.gov.
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Whoever Said ‘Stick to the Plan’ Was Wrong
Making Plans and Sticking To Them — Or Not!
Come the start of the year, whether that's the traditional New Year's Day of January 1 or the anniversary of your business startup date, most of us want to make better plans — and stick to them. So what holds us back? Is it the plan itself? Do we lack the tools? Are we weak in discipline?
Or is NOT sticking to a plan, sometimes, the better answer?
Here's my take.
There is no value in sticking with a plan "just because."
There's great value in a careful business planning process that keeps your business alive, thriving, refreshing itself, and growing regularly. But not every plan meets those criteria. You can outgrow plans, whether they're for improving your life or enhancing your business.
If your plan doesn't take into account the volatile nature of the markets, finances, or other exterior factors, it may cause you to stagnate, or worse. You should be learning constantly; if you are, you'll be tweaking things constantly, too. Just remember a couple of keys to good planning as you go:
1. Good planning is measurable, concrete, and specific.
The old saying is, "The difference between a goal and a dream is a date." Specific, finite, measurable goals you can easily track make your progress easy to see, so don't hesitate to "drill down" when you need to. Big concepts are great, but they work better when they're reduced to solid numbers. You can't track a concept, but you CAN track pluses and minuses!
Make your plan big on trackable milestones: sales numbers, cash flow, appointments, prospects, products, patents … whatever you deal in, make sure you're dealing in reality.
And keep your plan lean. A lean business plan is just bullet points for strategy and tactics, plus concrete specific milestones and performance measurements, a list of assumptions, plus sales forecast, expense budget, and cash flow.
2. Good planning means frequent review and revise.
I worked for years with a plan-vs.-actual-reviews meeting on the third Thursday of every month, so we could close the books on the previous month. At every meeting, then, review your plan versus your actual results. Don't forget to challenge any assumptions that may be holding you back: when assumptions change, your plans need to change with them. If results are good, stay the course with minor tweaking. If results are bad, this is the time to analyze why and change your plan to correct problems.
3. What you do stick to is the planning process
Former president and military strategist Dwight Eisenhower had it right: “The plan is useless; but planning is essential.”
There's a difference between fluidity and a plan that seems to "slip through your fingers." Numbers, dates, deadlines, and real black-and-white data will help you avoid that slippage. Don’t stick to the plan, but do stick to a lean plan with regular review and revision as part of the process.
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