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Contrary to what myriad
Internet sites would have you believe, there is much more
to small business planning than a good marketing mix and
solid financials. Whether you want to sell the next big
thing or you simply want to rev up sales and profits for
an existing operation, no business plan template will
adequately address the complex psychology of being an
entrepreneur, especially a successful one.
To illustrate what I mean,
let's pretend you aspire to be the next coffee shop ingénue.
You have articulated a comprehensive business plan; you
have chosen your product lineup, location, promotion plan,
and pricing strategy; and you have snagged some decent
financing to keep you running for at least a year. On
paper, you are a coffee empire in the making.
"Great!" you think to yourself. "Let's get
started!"
You proceed to sign the
lease, shell out some bucks to a lawyer and an accountant,
order a few gazillion pounds of coffee beans in
anticipation of your success, and open for business.
About six months and a few
hundred lattes later, you realize that you do not possess
high tolerance levels for the teen angst, high turnover,
and sleep deprived yet incredibly nitpicky about
extra-hot-no-whip-non-fat-double-mocha-latte-now-or-I'll-go-postal
cranky clientele that have suddenly become an intimate
part of your life. You despise this situation but also
realize that it will probably be your reality for many
years to come, or at least until you can make enough
margin to take a day off and enjoy a five-dollar coffee
poured for you across the street at Starbuck's.
Perhaps this all too common
scenario points to one explanation for the alarmingly high
failure rate of small business start-ups in North America.
The Business 101 textbook explanation of this phenomenon
would state that failure to plan is the root cause of most
small business shutdowns. Indeed, without some kind of
road map, inspiration can quickly turn to chaos if not
complete financial ruin. But even the most well crafted
business plan cannot cement the road to success, and an
entirely fabulous product is no guarantee either.
Work-at-home business
gurus, Paul and Sarah Edwards, cite two independent
studies involving a number of successful entrepreneurs.
Both studies concluded that business plans are overdone in
many cases and their importance even overemphasized. What
is needed, the Edwards say, is a succinct plan that
uncovers key aspects of the market you wish to pursue and
a simple roadmap for pursuing them
(www.workingfromhome.com/pages/faq.htm). Of course, in
approaching the planning process this way, you are more
apt to make strategic changes when necessary because you
will be less "invested" in the document itself
and more interested in doing whatever it takes to succeed.
Failure to plan is a
symptom, not a root cause, of small business collapse. The
true "illness" lies within the heart of western
entrepreneurship and the bizarre twists and turns it has
taken in the information age. Get-rich-quick schemes
abound in magazines and on the Internet, yet the only ones
getting rich from these programs are the passionate
individuals who envisioned the intricate pyramid of wealth
in the first place. However, one need not take such an
unethical path of deception toward financial independence.
My overpriced but
thankfully small "l" liberal education taught me
something I have not seen in any business textbook:
Determine the correct questions before seeking answers. In
saying this, I am not at all trying to sound literary,
highfalutin or Stephen Covey-esque (loved 7 Habits by the
way). I write only what I know from observation and
experience, and it would seem to me that you cannot derive
health, happiness, or wealth from something that does not
reflect your personality, your vision of your best self,
or your basic code for living.
Money in the hands of an
entrepreneur who does not know himself might as well be
lumps of coal. And a business plan written by such a
person is not worth much more. No bank loan or angel
moneys can replace the value of introspection. Some
questions you must ask yourself:
* What are my reasons for
pursuing this venture?
* Will those reasons be enough if I don't turn a profit in
the first five years?
* What will I have lost if the business fails? What will I
have gained?
* Does this venture reflect who I am? Or am I only trying
to be someone I think I "should" be?
Such questions should be
fleshed out long before you begin typing up that business
plan. How you honestly answer those questions should
subsequently color every element of your marketing mix.
Passion must precede planning. This authenticity will
shine through in everything you do and say thereafter,
and--in this day--there is nothing so irresistible to your
prospects as authenticity.
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About
The Author
Karri
Flatla is a business graduate of the
University of Lethbridge and principal of
snap! virtual assistance inc., a small
business consulting firm providing online
marketing services to the progressive
entrepreneur. Karri also produces
Outsmart, the newsletter for small
business with big purpose. Visit http://www.snap-va.com
for more information. |
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