I am often amused when someone claims they don’t need a BP (Business Plan) because they “fly by the seat of their pants”, or “a BP is a waste of time”; then smugly point out they have never had a BP and they are so busy they can’t keep up.  To me, that’s a sign they are in the middle of a wild fire instead of a controlled burn. One day they are going to burn out.

To have a successful business it is necessary to keep track of income; cost of goods; general expenses; payroll; commissions, principal’s draw – in other words;

• finances;
• how a larger segment of the marketplace can be gained and maintained;
• employee management;
• distribution – to name a few. 

Whether they are keeping this information in their head, or delegated to trusted employees, they are working a rough version of a BP.  Unfortunately without a clear vision of what their company will look like at maturity, they will never get there.  The entrepreneur will never know when to step back or how to set up the company to flourish on its own.  Instead, the entrepreneur is establishing a guaranteed, forever Job.

Every active company has some kind of a BP, even if they don’t have it in an organized format. It is also a fact that without a tangible interactive plan they never realize the full potential of their business. There will always be some aspect of the business being neglected because the owner becomes so engrossed in just one or two areas that the overall health of the company is forgotten.

The same holds true for someone with a great business idea.  Even though owner can’t imagine how it could possibly fail, now is the time to check that concept with real numbers from the marketplace.  Even if they are convinced it will be profitable, until the marketplace is surveyed and the numbers are run, they are only projecting hope, not reality.    

A great deal of money can be saved by developing an informational BP that lays out an outline of the business, including costs and income.  Caution should be taken here.  Often an entrepreneur is so eager for it to work, there is a tendency to skew the numbers.   Now is the time that it is imperative to be objective and honest.  Make the business show You how it can be profitable.  If you can’t see a profit on paper now, how do you expect it to be profitable in the future? Better to spend a little money now in finding if the company can be profitable than for you to invest your life’s savings only to lose it all – including the capital seed to start a different business.

Entrepreneurs are not gamblers; true entrepreneurs only take calculated risks.

Compliments of Lew West Business Consultants
www.lewwest.com   Blog – www.MyNext30.com

The first business owner fully understands the numbers required to run a company. He knows to the penny the start-up and general expenses, cost of goods, and the break-even point. He sees the trends and how the customers are responding to the company’s marketing and the employee efforts.

This financially focused business owner can explain and justify any numbers to the bank when additional funding is needed. He knows what is going on in the marketplace, how his business fits within his market niche and can readily adjust to keep the focus on that market. That’s a good thing, right?

The second business owner considers his primary need is to get his name and his brand out there. In his grand plan, exposure is the difference between success and failure. This marketing business owner is constantly on the street, or on the road, publicizing his business and making contacts. Where most of us encounter him is at every networking event, ribbon cutting, open house, committee, street corner ….. He seems to be everywhere. His potential customers are becoming familiar and comfortable with him and his business.

This marketing business owner’s logic is profound. Without customers, you don’t have a business. Obviously this marketing business owner has put together a well developed marketing strategy, thus he is going to be bringing in an increasing number of customers. That is good thing, right?

Both business owners are applying a winning strategy to their business – BUT ….

Let’s go back to the Numbers business owner. As knowledgeable as he is, his viewpoint is from the inside of the business. Basing everything on numbers, he does not quickly or easily implement new ideas. Even with the fluctuations in the marketplace, he continues to improve his current structure, but not make any major adjustments. It is more comfortable to stay with variations of the “tried and true” actions of the past.

Numbers are very necessary in the building and maintenance of a profitable company, but people and vision are also critical for long-term growth and success.
With that said, does that mean the marketing business owner has the right formula? Not necessarily.

The problem with the Marketing business owner is he is spending all of his time, energy, and focus outside of his business. Again, assuming this marketing business owner has put together a well developed marketing strategy, he is going to be bringing in an increasing number of customers. So what happens when his great marketing starts turning into larger and multiple orders?

Without competent order processing, fast and efficient distribution, inventory management, excellent customer service, and policies for repair and return in place, all of his time, effort, energy and expense with have been for naught.

Customers are not forgiving. If they have problems with submitting their order, receiving delivery in a timely manner (their concept of “timely”), or poor customer service, they won’t spend the time to order again.

Best advice for both owners is to closely examine the other’s procedures and duplicate them as much as possible into their own business. If they can’t do it themselves, this is a signal to carefully select an individual or company to develop that part of the business for them.

Both business owners are to be commended in utilizing their greatest strengths, but no one is perfect at everything. Recognizing this fact is what gives life to an exceptionally successful business.

Compliments of Lew West Business Consultants
http://www.lewwest.com   Blog – http://www.mynext30.com/