Every day in the world of business is a change from the day before. Prospects come and go, people change idea's and motivations for upcoming trends. This is part of the business cycle. This is also why attorney's, CPA's and a whole host of other credentialed advisers are at a beckoning call for the next big deal. This is because a deal usually takes more than one day. Digressing a little: Think of a house. Did you ever go into a house and get everything done in one day to include receiving the new key's? Probably not. Now back on topic. That situation doesn't happen in business either. However to hold people on a level playing field, a buyers contract is made. This contract is not anything new to business, but it all runs on the business plan which I want to address here.
About two weeks ago I was approached buy a young woman who I knew from a time past. She had successfully started her own blog which was gaining momentum and followers in every corner. To be honest, as I told her, I found most of her blogs to be annoying. I also told her that this is a good thing, because she can single me out of her target market. At the time of our meeting, she was presently building a plan for a kickstarter. From an investor standpoint, this doesn't sound good to be doing a kickstarter 3 years into business. After some investigation, I found she had no business plan a failed marketing strategy and her actual blog was ripping itself apart because of two personalities.
So with her permission, I addressed them to her both in person and on this blog. The first key to running a business is a business plan. That's something she didn't have and likely something that led to her kickstarting her business at this stage. Before I go any further, I want to give a sense of this business plan and what it does.
1st. A business plan should outline everything you plan on doing. A smart small business owner will come up with idea's from profit opportunities to financing by doing recon work on the local market.
2nd. The business plan will show what the stated purpose of the company is. This is a biggie. Why? Because at some point down the road you will undoubtedly run into a fork. That fork will be the opportunity to "turn the corner" or shutdown/focus on something else. Now for the second one, it's ideal to scrap the business plan and start from scratch. That gives you the ability to focus on your new idea. However the first one is the one I want to talk about. It's the one where people make mistakes. Often turning the corner is not something that happens over night (see the house sale illustration above). This is usually a 6 month or greater period where profits increase greatly. During this time, I've notice quite a few people begin to line their pockets. Turning the corner is to be used to bolster inventory and stock up on the push for bigger business. Now I digress once again. Back to the subject. The reason for the business plan is because when this turning of the corner happens, money will be available. Not only to you, but to banks who see it as reassurance that they can lend you more money for things you do not need. Let's say for instance the TV repair man now can get enough money to start a TV sales business. Was that in the business plan? If not, then don't do it. The reason why business plans are wrote on note pads and brought together later is because they represent the honest thought at the front of the business.
Next, as with my friend, an identity crisis occurred. She frequently used her name in video's designed for her website. This often created a conflict that she didn't realize hurt her help everyone website. So I gave her this analogy and I hope you try it too. 1st. Think of the bank Wells Fargo. What do you think of? Write that down......Then, if you were to be walking into a speech given by an executive at Wells Fargo, what would you think of? Lastly, who is the CEO of Wells Fargo? Now on that last one, just write that you don't know if you have to look it up.
Her answers went like this:
1. A bank with quite a bit of money
2. I'd want to take notes. They are pretty important
3. Let me check --> I told her NO and said that was part of it. FYI - John Stumpf is the CEO of Wells Fargo. I know this because I graduated with a degree in accounting and we talked about his background.
The point of this exercise was not to illustrate the CEO, but the lack of you not knowing him. If Mr. Stumpf was pitching his agenda at all Wells Fargo meetings using video's of his family to illustrate his points, you wouldn't understand him. That's the same mentality she got from her fans.
On a side note she ended up closing her help people website because she wanted to be the figurehead up front of her business. I applauded her for this as it show's she knows what she wants.
But this also lends points to people. Create a business idea on paper. Make it work without all of the bells and whistles. Because at some point, the bells and whistles will come. The question you will need to answer is: do we really need to spend more money to make these bells and whistles shinier?
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