|
|
Success Stopper
#4:
Failing to Plan
by
Rosemary Davies-Janes |
Many small business owners and
professionals lack the strategic plans that provide "staying power".
They have also often skimmed over the in-depth research and
strategic planning that founds successful, sustainable businesses.
Following are some of the plans that are typically overlooked by
small business owners and professional practitioners, as well as the
consequences that can arise in their absence.
Problem: No long term vision (Quarterly -> 1, 2, 3 & 5 years)
Outcome: A lack of inspiration and goals plus a lack of focus and
direction results in minimal growth, stagnation or regression
Problem: An undocumented or non-existent business plan
Outcome: A meandering business without clear operational or
financial objectives
Problem: No fall-backs plans
Outcome: High level stress that disrupts your focus and takes the
edge off your creative and innovative thinking processes
Problem: Vague operational definitions
Outcome: Billable time is wasted "fixing" projects that have gone
off the rails, from too much/too little time invested, too many/too
few resources applied, etc.
Problem: No current market research
Outcome: Poor understanding of client needs, values, trends and
eventual loss of market share due to loss of connection to/awareness
of the customer
Problem: Minimal competitive research & analysis
Outcome: Without these tools you don't know what others are doing
and you lose the chance to leverage their successes and learn from
their mistakes. Keeping up with "the competition" is essential for
long term business success.
Problem: Unclear objectives, processes and expectations
Outcome: Inefficient use of associate/employee time as
tasks/projects will be done and re-done multiple times to get them
"right".
Problem: Ideas are discarded vs. banked for future use
Outcome: Continual, costly "re-invention of the wheel" vs. thrifty
"repurposing" of banked or executed ideas for new client
applications
Problem: Lack of funding to cover unexpected income loss /lulls.
Outcome: Billable time wasted on resolving financial issues which
may accrue to the point that they lead to the demise of the
business.
Problem: Under-insured, not insured or inappropriately insured
Outcome: An unexpected liability may wipe out the business and
bankrupt
its' owner(s)
Problem: Underdeveloped, off-base or "flying by the seat of your
pants" marketing strategy
Outcome: The "trial and error", experimental approach means that
money is invested in ineffective materials and inappropriate mediums
that do not converge on a planned, strategized goal and as such do
not generate an acceptable ROI.
Problem: No ongoing professional
development plan
Outcome: When people aren't regularly developed they fall behind the
times and become "stale". To be a leader (or a player) in a
competitive market, business owners and professionals must be on the
leading edge of their profession and up to date on how various
"inside" issues and client challenges
are being addressed by their peers.
The following story illustrates the importance of planning...
Two businesses were
started by individuals who had worked in management in much larger
companies. While business A sold a product and business B a service,
both the product and service had been well received in the US and
both had a history of selling well both in America and
internationally.
The businesses started up at about the same time. Today business
B is bankrupt and business A is selling products across the US and
overseas. What
caused one business to succeed while the other failed? While there
were many similarities between the businesses, there also were many
differences, the most notable being that one sold a product and the
other a service. Another key difference was that business A had a
carefully thought-out plan and business B did not.
The owner of business A began by seeking out investors who would see
the potential his product had for domestic and international markets
and who would be willing to support efforts on both fronts. While
the investors were based in the US Midwest, they supported the owner
in patenting his product and securing exclusive export rights. Once
the business become established domestically, the owner began to
network, contacting government experts in the Departments of
Commerce and Small Business, as well as educators and local managers
with international experience. International plans were developed
outlining how they would position, market and distribute the product
and which foreign markets would be targeted first, second, third,
etc. As they were building sales in one International market, they
were attending trade shows and planning their entry strategies for
others.
By contrast, the other business
owner started his enterprise (business B) strictly because he wanted
to leave his job and become his own boss. Of course many small
businesses get started this way; however, in this case no
investigation was made into financing, competitors or target
markets. The business was located in an area that turned out to
contain virtually no consumers for the kind of service business B
offered. When this was realized, it was too late to move as the
business owner had neither the money (he had invested both his
savings and his home equity in the business) nor the desire to risk
starting again.
BACK TO
ARTICLES INDEX
|
