10 Things That Build Business Value!!

 1. Establish your brand in the marketplace.

 2. Develop your operations manual. Put systems into place that will let your business maintain or grow in your absence.  

3. Be vigil in keeping your books current; showing accurate, clearly identified and consistent records.  (Remember, besides it ultimately making you more successful, a potential buyer or auditor might be looking at them any day.)

 4. Expand your individual client lists, your networking sources, and especially protect your reputation. Your reputation and your company’s reputation are identified as being the same.

 5. Take care of your intellectual property: trademarks, patents, etc.

 6. If you have any outstanding tax issues, take care of them ASAP.

 7. Give a good first impression – the business should always look clean, businesslike, and attractive when anyone walks in.  Specific maintenance duties should be included in every job description, e.g. keeping trash emptied, personal items out of sight, etc.

 8. At least quarterly, review that your legal paperwork is being maintained.

9. Update your business plan weekly or monthly as well as your expected future projections.  Maintain your business plan as if a buyer might walk in the door any day with an outrageously large offer – IF you can hand it over your current business plan and books for review Right Then. 

 10. Obtain a realistic picture of the value* of your company, noting that specific actions you take with the above can increase its value. Despite all of the things you hear, there are no set formulas in determining your company’s value.

 *Determining the value of a business will depend upon several things including, but not limited to, company assets; net profits the business is showing now and in the past; feasibility of further growth or expansion of the business; location.   If the goal is to sell – the recent sold price other area businesses in that industry will need to be taken into account, but only as one variable.

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

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

In case you hadn’t noticed, many articles, experts, textbooks, etc. tell you that you are “confused” if you don’t subscribe to their particular definition of business terms.  I too have my set of definitions, and because this is my Blog you will find them listed below.

Please understand that my definitions, along with everybody else’s, are only words.  To each of us, in our attempt to convey those illusive, intangible concepts of business success, believe our words best describe them. 

The important thing, however, is that You are able to grasp the basic key concepts necessary to drive your business to its greatest potential.   

My favorite quote is, “If you don’t know where you are going, then you are probably already there.”  Becoming as clear as possible as to “Where You are Going” is often the difference between success and failure. 

I’m for success – by any definition.

 #1. Strategy or Action augmentation:

Here you utilize your “big picture” goal and begin enhancing that picture with the information accumulated in #1 & #5. From this collection of information, you can initially set the course

• for your business,
• its marketing direction and
• define the milestones to “make it happen”! 

 Bonus: Ultimately you want your strategies implemented in a way that your company is making money without you even being there – the quicker the better.

 #2. Financial Tracking: 

All income needs to be tracked daily – e.g. cash-flow and expenditures, sales, distribution, payroll and benefits, assets, inventory – in other words anything to do with what is happening to your company’s money.

 Bonus: Whenever funding is needed, you can create the requested documentation from your operation and financial summaries. 

 #3. A Marketing Plan is only one piece of your Grand Plan – albeit a very important and visible piece.  A Marketing Plan promotes your product to a specific segment of the marketplace.  By generating excitement and recognition for your product or service, Marketing’s role is to drive customers in your door. Once in the door, you close the sale, deliver their order and collect your money. 

 #4. Sales:

While Marketing creates the customer excitement and desire for the product or service, Sales does the actual close of the sale and collects the payment.  Although Marketing and Sales work closely together, their purpose and execution is very different.  Marketing creates a positive marketplace enabling Sales to utilize Marketing’s materials and created “need” to close the sale with individual clients.

 Bonus: Marketing generates interested prospects, Sales convert prospects into clients.

 Customer Service and Customer Retention are an important part of Marketing and Sales.  Questions and problems must be handled promptly and cheerfully along with scheduled on-going customer follow-up.

 #5. Operations:

Orders need to be filled quickly and efficiently so customers will be happy to reorder again, and become long-term clients. Quality of service while keeping costs in line is a major responsibility of Operations.  Depending upon the company structure,  employees are usually accountable to Operations.

 Bonus: Operations implements systems/procedures building toward company maturity while maintaining a unified and coordinated staff to achieve the company’s goals and purpose. 

 Congratulations! You now have a Working Business Plan!  All of the Steps listed #1-#5, are only segments of your total “Business Plan”.  Together the segments lay out a coordinated, tangible picture of your business, adjustable to the changing needs of the marketplace.

 Bonus: During this process, you have run various scenarios illustrating what will work and what won’t, and what would have only cost you time and m

By taking these preliminary planning steps,  

Your business will be set-up for long-term success.

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/

Take a good, objective look at your product and service – then ask yourself…

   “Who are, or who will be, my customers?”  

 In otherwords, Who will buy your products or services?

 Often a business person has

1) no idea who might buy the product or service, or

2) assumes that ‘Everyone’ will.  

 Either assumption can lead to wrong decisions, incorrect pricing, poor or no marketing strategy – and ultimately to business failure!

The most successful businesses understand that only a limited number of people will buy their product or service. The big question then is to determine (as closely as possible), who those potential people are.  It isn’t until those potential buyers are clearly defined, (targeted), that budgeting, marketing strategy, and promotional implementation can begin.  

By filling a defined need, of a clearly identified niche of potential customers, your reward will be a stronger and more profitable business.  It is also increases your marketing dollar efficiency and lowers your frustration level.

One of the first things you need to do is to refine your product or service so that you are NOT trying to be ‘all things to all people.’ Become a specialist!

This could include offering exceptional support programs to make life simpler for them.

Other focus could be the exceptional quality of the product or service, and/or have the best customer service possible … further enhancing the customer’s loyalty and making it more difficult for the competition to steal them away.  

A possible negative is that this decision could potentially eliminate a percentage of your current market – but it also gives you a ‘niche’ that can be expanded in a way that other distributors are much less apt to be able to take advantage of.

Next, you need to understand that individuals purchase products or services for different reasons than businesses. 

Individuals purchase products or services for three basic reasons:

• To satisfy basic needs.
• To solve problems.
• To make themselves feel good.

Businesses buy products or services for three additional reasons:

• To increase revenue
• To maintain the status quo
• To decrease expenses.

If you fill one or more of these needs, you have found a target market.

Once you have determined how your product or service fulfills the specific need of those in your target market, you can then laser-focus your marketing strategy.

Some of the questions and issues you will be addressing while developing your Marketing program will be:

• Presenting a professional image while still controlling costs  
• How to save time and money?
• How can we maximize our image?
• How do we increase our customer base?
• How do we achieve our greatest customer retention/loyalty?”

By answering the above, you further differentiate your company from the crowd.

The next step in creating an effective marketing strategy is to zero in on your target market using Market Segmentation.

Determine how large you want to develop your company

Where do you want to sell your products or services

Is the customer appeal for your product or services best suited to be sold -

• Internationally
• Nationally
• Regionally
• Locally

It is advisable to begin with your local market as a learning/training ground.  Once you have all of your systems/procedures in place and running smoothly, you may then decide what your next step of expansion will be.

Assuming that your primary market is local business, you’ll need to identify the market segments that best fit your target market criteria:

• Company size (Small, Medium or Large companies)
• Single or multiple locations
• HQ or branch
• Number of employees
• Type of company/industry (corporate, green, non-profit etc)
• Each company’s potential need for your product or service
• When applicable, it is advantageous to know how they purchase: seasonally, locally, custom orders or volume, as well as who makes the decisions

Part II of this topic will be on my Blog www.MyNext30.com next week.

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

Yes – and – No.

Yes.  If you are passionate about what you are doing, you possibly have a greater chance to be successful.  One of the biggest reasons is that you are much less apt to resent the hours and sacrifices it takes to develop your company.  The 24/7 effort becomes a labor of love and enjoyment instead of drudgery. 

Being passionate inspires a positive and optimistic attitude which attracts loyal clients, quality vendors and multiple opportunities.  A passionate person attracts success.

Yes.  Being passionate about what you are doing is a decided plus.

So when isn’t passion enough?  When is the answer No?

It is good to be passionate, but much depends upon how that passion is utilized.  That passion needs to be focused on thinking through, and strategically planning its milestones of action from inception to its projected maturity. 

How many times have we heard, “If you have the passion, success will come.” 

Unfortunately there are small business owners who take that as a literal proclamation, using it as an excuse to sit back and wait for success to happen.  They forget that a business concept cannot become a tangible reality until it is converted into actual profit & loss numbers and a well developed operating system with effective marketing.

Passions for some individuals are hobby activities like skiing, hiking, horseback riding, reading, computer games, sewing, gardening, etc..  But can any of these be developed into a source of income capable of supporting you and your family?  Can enough income be generated to take care of you after you no longer chose to work, or unable to?  If so, can it happen within a time frame that you will be able to enjoy it?”

With a certain amount of ingenuity, and it is developed within a profitable business model, the answer may be “yes”.

A cautionary note:  It doesn’t matter how passionate you are about something.  When you need for it to cover all expenses for the rest of your life, then you better be sure it is capable of doing so.  Don’t trust your “gut feeling”, or depend upon your passion to carry you through.  Ask for an outside professional review.  With your future in the balance you will be glad you did.

Chances are by this time, the positive fruit of your hard work and strategic planning is beginning to show, or at the very least you can see attainable success on the immediate horizon. 

The best news is that even if you didn’t originally feel passion for what you are doing, with the confirmation of your success your passion will reveal itself.

Yes.  Being passionate about what you are doing is a very good thing.

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

1. Don’t be discouraged to think you are alone in having spent so many hours thinking of – and then discarding dozens of ideas. Your future success hinges on your being passionate about your new business.

2. Carry a pad of paper with you so when you think or see something that catches your attention, you can write it down and make some notes to remind yourself later why that appealed to you and looked so interesting at the time. Your memory can often forget what triggered your imagination as to how you could develop that concept.

3. Choose something you are familiar with and/or that you have actually done.

4. Choose something you enjoy. There is a saying that “If you find a business or an occupation you love, you will never work a day in your life.” So it is with your business choice. If you aren’t passionate about it you will begin to resent the hours and sacrifices it takes to get it up and running.

5. Most important: It needs to be a profitable enough business to support you and your family through the years to come – whether you continue to run it, set it up to run itself, or sell it.

If you are going to put in all that time effort and energy, be sure you thoroughly do your research first. Assemble a comprehensive business plan to help you define all of the scenarios and show you if and how it can be profitable.
Ok. This is all great and wonderful, but you still don’t have the idea to research and develop.

How to pick a Business Idea

1. Start a list going back as far as childhood. Think of:

• After school and summer jobs.
• Remember people you enjoyed being around and what they did for a living
• Have you always had a dream to do a particular something?
• What have you always thought would be great to do, but dismissed it as being out of your reach or impractical for you.
• Find books of suggestions in the library
• Gather a group of friends to brainstorm more ideas

2. Set up a large white board or large paper pad and start writing down as many ideas as you can. Don’t worry if they make sense or not. A good portion of them won’t, but it helps free your imagination.

3. Once you have 100 or more, you can start picking some of the more general suggestions from your list and begin developing them.

For example: You may have written down yard work, babysitting, Pizza delivery, grocery stocker etc. Let’s look at yard work. What are some of the different directions that activity can be developed? (It is always better if you can have several people join you to brainstorm possible enterprises for an hour, or two maximum)

Some possibilities expanding from “yard work”:

Landscaper, artist to draw the layouts, nursery, expert on local plants, a source of decorative rock, fountains, yard sculptures, area consultant for zoning laws, horticulturalist, become a developer of local parks, playgrounds, dog parks, a rental supplier of lawn equipment, lawn furniture – custom build items to help the handicapped, seasonal party supplier & entertainment, develop a product or service to promote a green environment – in the schools, as an author, demonstrator, consultant, locally, national cause, organize groups, give seminars & workshops, assume management of a non-profit and build your department to become financially sound – or help the non-profit company itself to have adequate cash flow to be able to better pay you and quality people to help them ……….

And from that list expand ideas about dogs … rentals ….. a need in the neighborhood … advisor … tutor …

It took me less than 3 minutes to develop the above list. Think what you can do in an hour – or two.

4. Let you mind go completely free. Sure, there are going to be some real duds, but those are the ones that give you – and the group if you have one – a big laugh and triggers more zany ideas. Right in the middle of all of these spontaneous thoughts and ideas will be a nugget – or 2 – 3 nuggets of gold. Tuck them into your pocket and let your mind think about them. No pressure, just let it soak for a day or two until your mind starts generating feelings and solutions around a nugget.

Usually the one you picked as your favorite will begin taking over your thoughts, but sometimes something you discarded will come floating back to the top. Take time to consider that one too. There may be something under the surface of that seemingly zany nugget that was originally overlooked. By fleshing out the idea, you might find that very important market niche, or maybe you will find that unique product application or service you have been looking for.

Don’t give up.  Keep looking at how you can evolve a seemingly nondescript chunk of cole into a diamond. Your diamond.

A year ago, many of us felt we had the luxury of pondering if we wanted to continue working or if we wanted to retire. Our biggest concern was that we were being “smart about it.”

Today we are told, “Well you knew the recession beginning back in 2007!”

“NO. I didn’t know,” and to me that statement is saying, “Gee, if you had just starting planning back then, you wouldn’t be in this predicament now.” They are right. If I had started to plan back in 2007 I would be in a considerably better place today – if I had known.

I didn’t know in 2007 that the economy was starting to throw a few rocks over the cliff before it jumped off feet first. Because I didn’t know I took just one more big investment risk. Unfortunately this time my risk was DOA. Coupled with the stock market plunge I was knocked off of my rock of security and dumped squarely back into the “produce or perish” cycle – a position much less comfortable when it is out of necessity rather than choice.

I did what everyone does; review what I was successful doing in the past. Some are able to pick up from where they left off. Others are not so fortunate.

I was what they call a serial entrepreneur, having started several companies over the years in various industries.  I am now testing new ventures while assisting others with theirs.

Considering Starting Your Own Business

If you have been considering starting your own business but can’t find that perfect idea, maybe the following will help you.

1. Don’t be discouraged to think you are alone in having spent so many hours thinking of – and then discarding dozens of ideas. Your future success hinges on your being passionate about your new business.

2. Carry a pad of paper with you so when you think or see something that catches your attention, you can write it down and make some notes to remind yourself later why that appealed to you and looked so interesting at the time. Your memory can often forget what triggered your imagination as to how you could develop that concept.

3. Choose something you are familiar with and/or that you have actually done.

4. Choose something you enjoy. There is a saying that “If you find a business or an occupation you love, you will never work a day in your life.” So it is with your business choice. If you aren’t passionate about it you will begin to resent the hours and sacrifices it takes to get it up and running.

5. Most important: It needs to be a profitable enough business to support you and your family through the years to come – whether you continue to run it, set it up so it will run itself, or sell it.

If you are going to put in all that time effort and energy, be sure you thoroughly do your research first. Assemble a comprehensive business plan to help you define all of the possible scenarios and determine if and how it can be profitable.

#1. The basic BP lays out the factual, nuts and bolts foundation of your business. From that full blue print of your business, you may confidently:
• Build your business
• Implement on-going strategies

#2. Whenever funding is needed, you are able create the needed documentation …… 

 from your regularly updated Business Plan to show the summary of operations and the financial information requested by your funding source.
Being able to reference your working master plan, you will make a confident and knowledgeable presentation.

(Note of Wisdom: You can’t build a 110 floor skyscraper on a tool shed foundation)

Strategy Plan:

A Strategy Plan utilizes the Business Plan information with an emphasis on HOW each area of information can be leveraged into a single-focused Strategic Plan designed to achieve the company’s optimum success.
You can design strategies that can make your company make money without you even being there.

Your Business Plan will have already defined who those customers should be that Marketing is sending in your door. Your Strategy Plan will have put into place what procedures you and your staff will do from the time the customer comes in the door (or places their order by phone or online) until the customer has received their order and you have banked their payment.

(Note of Wisdom: Hope is not a Strategy Plan)

Marketing Plan:

A Marketing Plan is only one piece of your Business Plan and Strategy Plan – albeit a very important piece. A Marketing Plan promotes your product to the correct segment of the Marketplace by generating excitement and recognition of your product/service. A Marketing Plan drives customers in your door so you can close the sale, deliver their order and collect your money.

Taking the preliminary steps to embrace these Powerful Plans,
Your business will be set-up for long-term success.

If you need a business plan, or to update the one you have, but also wondering what it will take to do it, then here is a quick summary of the steps to take.

Everyone should have a Dream or Life Goal.  And with every Dream there needs to be a plan to make it happen.  Those without a plan to achieve their Dream might as well sit back and relax.  It is more than likely they are exactly where they are always going to be.

There is an old proverb that states:  If you don’t know where you are going, you are probably already there.

Think of it as if you have an overwhelming desire to go to __________________. (Your Dream)

Your Plan is how you make that Dream a reality, i.e. how do you get there.

Develop that Plan as you would for any trip.

• Identify your desired destination  (Your Dream)
• Find the address on the map (where you dream of ultimately being)
• Identify your start point i.e. where you currently are
• Select the route that best meets your needs – from where you are to your destination
• Continually recheck primary vehicle construction and maintenance to prevent breakdowns (Your current source of income is your primary vehicle to get you to your destination)
• Determine the shortest, safest route that meets your needs
• Calculate the time it will take to navigate each segment (milestones) of your chosen route.
• Know the costs for each segment of the trip and allow for unexpected extras
• Determine how you will fund these trip costs (keep good records – from accumulating the funds to how the funds are used)
• Hang on for Life’s greatest ride!

A good plan is really this simple.