Denver Based Restaurant Consulting Firm Announces the Expansion and Rebranding of its Organization

We’re excited to announce:

http://www.send2press.com/newswire/2011-10-1026-004.shtml

Business Plans - The Real Story

So why should you go to the trouble of a business plan?  Why not just move forward with your idea and take things as they come?  If you are starting a new business, the first thing to keep in mind is that it takes more than a good idea or a good product to make a successful business.


The first thing you need to do is validate if your business is feasible.  Will you make money at it?  How long will it take before you start making money?  Do you have enough funds to start your business or will you need outside funding? How will you take your product/service to market?  The list of questions goes on and on. 

Let's just focus on the feasibility of a new business.  You should have in mind some number as far as revenue or units you expect to sell in the first year.  You will need to compare that number to the market as a whole.  You can get a lot of information on the internet.  Just google your product/service and similar products/services to see what marketing analysis already exists.  It makes sense to invest in a good market analysis report on your industry.  From that you need to figure out what your total market is and compare that to your sales projection.  Is your sales projection reasonable?

For instance, you plan to sell 10,000 units in the first year, 15,000 units in year 2 and 20,000 units in year 3.  Your market analysis tells you the entire market for your product (or similar products) is 7,500 per year.  Obviously, the market doesn't currently exist for the product you intend to sell.  What if the market was 100,000 units per year?  You may say, "Great, let's go!", but you then need to ask yourself if you think you can gain a 10% share of the market in year one.  That's pretty aggressive even in a market that isn't competitive and if you are in a competitive market, then it may be next to impossible.  This doesn't mean you need to give up on your idea, it just means that you need to figure out how to penetrate the market and based on that, you need to come up with a realistic (tough, but not impossible) annual sales goal.  That along with price and cost information will start to give you an idea of how much money your business will generate and when. 

It's all about turning the unexpected into the expected!  So, go forth and research your market!

Is a formal business plan necessary?

Much has been written about the necessity (or not) of writing a business plan.  I will always advocate taking the time to develop a plan before you dive into any new business or opportunity and then on an ongoing basis (usually annually) as long as you continue the business.  I advocate this simply because you will have a greater chance of success if you think through the who, what, when, where and how of your business before you embark on it. This turns "the unexpected" into "the anticipated and prepared for".

Do you really need a bound, footnoted, discertation with charts and graphs to accomplish this?  Most of the time, you probably don't.  Your audience will dictate the formality or lack there of, of your final plan.

1. If you need traditional funding, then you will definitely need a formal well written plan to submit with your SBA loan application.  It should be professionally bound and follow the formal business plan format - table of contents, executive summary, business section, financial section and appendices or supporting documents.  The bank's biggest concern is how and when will you be able to pay them back?
2. If you are going after venture capital, you will also need a well documented plan, but you have more leeway in the presentation, content and format.  You will always need a thorough and detailed financial plan if you are seeking funding, but one of the things I really stress for venture capital is creating and building excitement around your idea and business.  The VC's biggest concern is what are the excepted returns for this business? The bigger the better!
3. If it's just for you and your management team, you have even more leeway.  It just needs to fit into your company style and culture, but it does need to be documented, used and revised on an ongoing basis.  Whatever format best achieves your biggest concern which should be success!

 But that just focuses on the presentation of the plan and quite frankly, that is not the real purpose of doing a business plan.  As with most things in life, it's not the end result that is the most important thing, but the process in getting there.   More on that in the upcoming weeks!

Growth in Tough Times

While the Economists have told us the recession is over, we all know that the job market and unemployment are still terrible.  For small business owners, this usually translates to lower sales and profit.  So, what are we to do in these tough times?

1. Know your target client - I have always advocated taking the time to describe your ideal client in detail - what are their demographics, what do they like to do, where do they live, what makes them unique?  In this economy, you should also ask yourself if you need to modify your target customer.  You want to target a market that is spending money.
2. Reach your target market - Once you are satisfied that you have defined your target customer, you need to figure out how to reach them. Are they internet savvy, do they use mobile devices or print? Where do they go for recreation?  Where do they work? Are there leads services or groups you can join that will target them? Are your marketing activities directed at reaching them?
3. Provide exceptional customer service - People often think that price is the determining factor in awarding a job, but providing exceptional service - going above and beyond, carries a lot of weight.  If you can demonstrate that you are responsive, eager to do whatever it takes and then some, and that you are honest, customers will usually pick you over your competitors.
4. Differentiate your company - Figure out what sets you apart and above your competitors and promote that with the public at all times.  Publish referrals that highlight your strengthens. Come up with a tagline that communicates the same message.  Always be "on" when it comes to promoting your business and your efforts will be rewarded.

Regardless of the economy or job market, there are companies that are still growing.  Following these steps should help you do the same.

Why Plan?

I was at a meeting this morning of 30+ business owners.  The presenter asked who in the group had a sales and marketing plan.  Other than me, I think one maybe two other people raised their hand and I'm being generous in that statement.

How many people plan their vacations?  I think more people would have raised their hand if that had been the question.  Why do we spend more time planning one to two weeks of our year than we do for the remainder of the year?  Isn't our family's livelihood more important than that?

Planning helps you:

1. Achieve your goals.
2. Know whether or not you are accomplishing what you set out to do.
3. Establishes clear direction for your activities.
4. Increases your chance for success.
5. Actually reduces the amount of time spent on any given activity.

If you are presented with the opportunity to answer the question "Do you have a plan?"  - be sure you can say YES!

When was the last time you celebrated?

Being in business for yourself can be tough.  We are our own worst enemy.  We tend to be more critical of ourselves than anyone else and we are quick to chide ourselves for errors or missed deadlines.  But what about all the times that you get it right?   What about completing a major project like opening a new store – I bet you celebrate that with a grand opening.  What about projects that are just as important or even more important than a story opening?  Projects that aren’t that glamorous.  What do you do when you’ve completed your business plan or developed a budget or a sales and marketing calendar?  Do you celebrate then?  Do you treat yourself to something special? 

If we are our own worst enemy, than we sure as heck better be our own best friend.  The last step of every project that I work on with my clients is “Celebrate”.  That is probably the most important thing to get right.  So next time you finish a task or project regardless of how glamorous (or not) it is, be sure to treat yourself.  You’ve earned it.

If you had 2 years to build a successful business...

If you inherited a business that you knew very little about and had 2 years to make it successful, where would you start?  There are so many different things that need to be addressed.  What should be tackled first, second, etc.  Here's my list.  I encourage you to weigh in on the subject.

1.    Cash Flow – no business can operate without cash, so my first priority is to understand and project cash flow for the business.
2.    Compliance – is the business in compliance with all federal, state, and local laws governing that business, including licenses, permits, insurance, taxes, etc?  If a business has cash, the next biggest risk is the government shutting them down due to non payment of taxes, no licenses, etc.
3.    Sales/Profitability – Are they selling the right products @ the right price?  Do they understand the cost structure of their products/services and are they priced correctly for the market?  We all know the danger of selling things at too low of a margin or even below cost.  It links back to the focus on cash and revenue stream.
4.    Expenses – does the owner understand their cost structure and how to control expenses?  What benchmarking information is available for comparison?  Out of control expenses are the quickest way to burn through cash.
5.    People – Are the best people doing the right jobs?  Are they compensated fairly? Are they a cohesive team? Do they hold dear the same values and business ethics as the owner?  Do they compliment the owners strengthens and weaknesses?  Numbers are numbers, but you can’t run a successful business without people.  Having the right people can mean the difference between getting by and excelling in business.
6.    Sales/Marketing – Is the owner actively marketing the business?  Do they have a sales and marketing plan?  If not, then create one and implement it ASAP.  The best way to increase cash is to increase sales.
7.    Assets – Does the owner have the right amounts of inventory and equipment?  Is there too much cash tied up in non working assets or old inventory?  Do they have controls in place to evaluate and assess what the correct levels are?  Do they have idle equipment or are there bottlenecks that will prevent them from growing?

Wow, I was going to stop a 5 items, but I kept thinking of more and more things that are important to making a business a success.  I could have kept going, but I didn’t have time nor do you probably want to read a book at this point.  So what do you think, what would be your priorities and why…