Strategic Planning for Small Businesses– Why do most small businesses that start a business plan neither finish nor implement it?

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A couple of the clients I am currently working with continue to drag their feet on finishing the Strategic Business Plan that we started. Recently I have been racking my brain trying to figure out why.  In our weekly meetings we talk about goals, personnel issues, accountability, systems and other topics that can easily be defined in their business plan. However we often go over the same issues over and over without any action to address them.

Well, I believe if the truth were told, the real reason they will not finish a Strategic Business Plan is the fear of commitment to themselves and their team. Creating a business plan and communicating its strategy with your team is the same as making a contract with yourself and that team.  You have laid out your plan for the future of your business and committed to set of goals to ensure your plan is carried forward. Your job as the leader is to work with your team to ensure those goals are met, holding everyone, including yourself, accountable for doing what you say you are going to do. That’s a commitment.

The first fear I observe is the fear of making a decision. As a business owner if you are one that holds back on decision making, prefer to keep all options open rather than move in one direction, or do not involve others in your decision making this can create a real problem in your business. This fear can come from the fear of being wrong, having to manage the process to ensure a positive outcome, being able to communicate what you want done so that the team member responsible for its execution knows what to do, or not being able to change your mind at the spur of the moment. . One of the greatest benefits of strategic planning, for any size business, is that it creates a set of goals and objectives that lead to decisive action and decision-making.

Your team thrives on consistency; they prefer to work in a stable environment where they know what is expected of them. An environment where they receive consistent feedback on how they are doing. They know when a decision is made all stakeholders are working towards a positive result rather than an environment that is constantly changing direction and yesterdays decision is soon forgotten or another decision is quickly made changing the entire direction of the company.

The other major fear holding many business owners back is the fear of accountability. In many cases being a small business owner means being accountable to themselves, which means no one. With strategic planning there is accountability built into the plan, which can cause fear and distress. Accountability leads to action and with action come success and failure. If your strategic plan is well thought out and involves the input of others it will lead to many more successes than failures.

Change is hard, and overcoming our fears to allow us to make those changes is even harder. Overcoming these fears often include facing your own shortcomings, which as a small business owner can be very uncomfortable. However in order for your business to move forward with greater sales, profitability, and efficiency you must take those steps to overcome your fears in order to change the way you lead and manage your business.  Using the skills of a professional facilitator and/or business coach can make this whole process less intimidating.  A good business coach can effectively keep the conversation aimed towards positive outcomes and not let the weaknesses get in the way of success. They will also keep the process moving forward so completing the project will be done in a much shorter amount of time not allowing the day to day distractions of the business to derail its completion.

Strategic Planning is one of the best investments you can make in yourself and your business.  In small business the cost of failure is high and the personal risks are great, your livelihood is at stake.  A well thought out strategic plan will help you realize your dreams and overcome the obstacles that get in the way of moving your business forward.  On the other hand I firmly believe that most businesses will ultimately fail to reach their full potential, or worse, without a strategic business plan.

MBhsfrntIf you’re ready to implement positive changes in the your business we are ready to help you succeed. Call me at 406-690-5988 for a no obligation meeting to see if Beartooth Business Consulting can help you and your business.

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Non-Profit, 501(C)(3), Consulting

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Non-Profit corporations, 501(c)(3)s, are and should be run similar to for-profit business with the same management disciplines and leadership characteristics that all successful Businesses demonstrate.  However all too often somewhere between the passion of the organizers mission and the reality of raising money, delivery programs and building a sustaining organization the non-profit falters or the organizer gets tired. 

Having a defined mission and a solid business plan that defines how your going to deliver that mission is essential to having a well-managed and successful non-profit business.  

It is also critical that all stakeholders, board, executives and staff understand and buy into that plan.   As an experienced business executive and board member of several non-profits, I can assist your organization with an array of management and leadership issues.  Specializing in new organizational start-ups, as well as the restructuring, improvement, sustainability, and expansion of more established agencies. 

Below is a list of service I provide to benefit your non-profit organization:  

  •  Board Structure 
  •  Strategic Business Planning 
  •  Interim Executive Leadership/Transitional Management      

 Services 

  •  501(c)(3) Applications 
  •  Budget Development (including multi-year projections) 
  •  Board of Director Retreat Facilitation 
  •  Corporate Sponsorship Packages & Presentation 
  • Executive Coaching (Executive Directors and Board) 
  • Fiscal Development Plans (to include all funding streams) 
  • Fundraising Advice (Special Events, Raffles, Silent Auctions, etc. )
  • Fundraising Appeal Letters/Donation Requests 
  • Marketing Tools (Brochures, Fact Sheets, Press Releases, etc.)
  • Mission Statements & Effective Messaging 
  • Organizational/Program Assessment 
  •  Policies & Procedures (Organizational, Program, Employees)
  •  Quality Assurance Programs 
  •  Staff Training/Employee Management 
  •  Marketing Support including 
    •  Website Content Review 
    •   Social Media 
    •   Print Collateral  

To find out more about my full line of consulting services, please call or send an email inquiry to mike@beartoothbiz.com, 406-690-5988

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Can a Small Business Consultant help you make more money?

There comes a point in every business owner’s career when they hopefully realize they need input and advice from someone other than themselves. The next obvious realization is should I hire a consultant or will I just be wasting money? The answer is, “it depends on your goals.”  Whether you’re starting a new business or growing an existing business, hiring the right consultant can be an effective way to get where you want to go much more quickly and profitably. Conversely, hiring the wrong consultant can be costly both in time, energy and money. So the challenge for a small business owner is to understand the role of the right consultant and have a clear expectation of how and when it is cost effective to hire one.

What can a small business consultant do for your business?

A business consultant is simply an outside expert you engage to help solve an internal problem in your business. A good consultant is a great source of knowledge, managerial skills, business experiences, and of the process to improve your business’s performance. Unlike in-house employees, consultants are independent contractors that have independent schedules, have multiple clients and are usually hired on a contract or project basis. A consultant can help you with realizing your vision, business expansion, sales development, marketing, management systems, organizational structure, leadership skills, and employee management.

 

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There are three critical stages to engaging a business consultant:

  • Pre-Consulting: Prior to beginning a relationship it is important to have a clear understanding of your expectations, your problems and the approach the consultant will take to assist you. Working with a consultant is much like a short-term partnership. Honesty, realism and clear communication are a must in order to get the results you desire and finding the right consultant that fits you and your business.
  • Consulting Period: The consulting period should include discovery, research and recommendation of solutions. This may come in the way of a business plan or similar format.
  • Post-Consulting: If you have hired the right consultant for your business you may want to extend your working relationship so they can provide you feedback and assistance during the implementation process.

Why do people hire small business consultants?

Small business owners hire consultants as a cost effective way to bridge a gap in knowledge and skills within their company, or as a way to bring a fresh and objective perspective to the company and its challenges. Here are three common reasons why our clients turn to consultants for help:

  • To find problem(s): In many cases, a business may be exhibiting systematic problems such as a decrease in sales or experiencing cash flow problems, and the management is unable to pinpoint the source of the problem or come to terms with the solution. In such cases, a consultant can come in and observe the problems within your operations, ask a lot of questions and do the necessary research to determine the cause of the problem.
  • To create the solution(s): In some cases, you may have a goal that you can’t achieve internally either because there is a skills gap or because it is simply not within your company’s core competency. Hiring the right consultant can save time and money and ultimately achieve the results you desire.
  • Optimization: In some cases your company may have experienced rapid growth and you know there are lots of things you could be doing more efficiently but don’t know where to start. A consultant can bring a fresh perspective, evaluate the areas of the business that need improving and determine the processes and procedures to improve productivity and increase profits.

Where to find consultants

Finding consultants should be the easy part. There are lot’s of types of consultants out there including government sponsored resources such as Economic Development Councils, retired executives within organizations such as SCORE and full-time paid consultants that have made their career choice consulting and servicing their client base with expertise and professionalism. Like most things in life you get what you paid for. The internet is always a good place to start as well as asking friends and other business owners fo referrals. Finding the right consultant is the hard part. This is why an initial interview is critically important. Not only do you need to feel comfortable that the consultant you choose will ultimately make your company stronger, but also push you to become a better leader and manager along the way. Of course even though you may do everything you can to make sure you chose the right consultant, just like with hiring employees, sometimes it just doesn’t work out. If that happens it’s usually a mutual feeling. In other words, don’t feel bad for parting ways with a consultant if things aren’t working out.

  •    Consulting agreements/contracts

Contracts are usually 3-6 months in length, with an option to renew or extend the contract if necessary. The scope of the project and your budget will generally impact the length of the contract.  However the duration of the contract needs to give the consultant sufficient time to analyze the problem areas, research the solutions and work with you to implement those solutions. This is part of the consultant’s value to you and you should carefully consider the length of time they recommend.

  •    How much should I pay a consultant?

This is one of my favorite questions because the answer is quite simple: Price is determined by value. Giving you the statistics on fees alone is not very valuable to you when consulting fees can range from $100 – $1,000 per hour and project fees can range from $1,000 – $25,000. Even though consulting fees might seem expensive, a talented consultant’s fees should easily be paid for by an increase in profits and/or in additional time for the ownership to focus on more productive things.

  • Look at the percentages: A good way to determine the right budget for hiring a consultant is to set it as a fixed percentage of your total costs and/or sales. For example, if your monthly sales are $10,000 per month it is not wise to pay $5,000 per month for a consultant. On the other hand, if your monthly sales are $20,000 and you want that number to grow to $40,000 then spending $1,000 per month for a six month contract with a consultant is reasonable and makes financial sense.
  • Look at the phases: If this is a complex project with a lot of uncertainties and variables, look at reducing your risk by setting up the agreement in phases. For example, if you are looking to redesign your marketing efforts for several product lines, perhaps you should tackle each product line separately instead of all at once. This may not only lower the cost required to hire a consultant, but also reduce your overall need for a consultant. If you can learn from their approach to the first product line, you may be able to implement their strategies for the other product lines yourself. You can also agree to certain performance measurements including timelines and solutions to either continue the agreement or not.
  • Talk to a consultant: Often a consultant can initially assist you for free to help determine the scope and budget for your project and/or needs. Your preliminary discussions with a consultant are a great way to test the waters of a potential working relationship as well.

*Beartooth Business Consultants will definitely assist you without cost to establish your needs, the scope of the work and your budget.

 

A Final Note

A small business consultant can help you make your business stronger by working with you to plan your business strategy and in some cases helping to execute that strategy. I’m a big believer in small business consulting because I see the positive results and sense of relief from my clients every single day. But not all consultants are created equal. You’ll need to consider why you’re thinking about hiring a consultant and how long you’re willing to wait before you see results, and how much you can realistically afford to pay for the assistance. The key is finding a consultant that you really click with and one who can make things happen for you. With a good consultant and defined goals, you’ve positioned yourself for success!

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10 Reasons Businesses Fail

In life, you may have forgiving friends and relatives, but entrepreneurship is rarely forgiving. Eventually all your mistakes and inefficiencies show their ugly heads. While it may seem to be a matter of luck that many businesses do well, in reality there are common mistakes that kill many small businesses before they ever realize their full potential. Consider each of these possible pitfalls, address them if they exist and you will discover that your business will thrive instead of just limp along barely surviving in this competitive world.

BPImage  # 1. An inadequate business plan:  A well thought-out business plan forces you to think about the future and the challenges you’ll face.  It identifies the strengths, weaknesses, threats and opportunities that exist in your business today. It also forces you to consider your financial needs, your marketing, management plan, and your competition. Having a Strategic Business Plan that outlines every detail will guide your business along the right path.

  # 2. Inefficient Management:  Small business entrepreneurs usually come into their industries with little to no knowledge of handling the multiple facets of a business such as financial management, employee relations, advertising and other essential responsibilities. Having a great business plan will amount to nothing if each objective is not tackled with competence.

Owners often become their own worst enemies by not getting out of their own way. They may be stubborn, risk averse, conflict averse —needing to be liked by everyone (even employees and vendors who can’t do their jobs). They may be perfectionists, greedy, self-righteous, paranoid, indignant or insecure. You get the idea.

Sometimes, you can even tell these owners the problem and they will recognize that you are right — but continue to make the same mistakes over and over again. Not everyone is cut out to own a business and if you cannot identify you may have shortcomings and accept you must make changes, you will more than likely fail.

 # 3. Uncontrolled Growth:  This one might be the saddest of all reasons for failure — a successful business that is ruined by over-expansion. This would include moving into markets that are not as profitable, experiencing growing pains that damage the business, or borrowing too much money in an attempt to keep growth at a particular rate.

Sometimes less is more. If your business realizes great success, do not be overeager to spend your profits by immediately buying more equipment or opening up new stores. Stick to the strategies you have made so you can still grow without bankrupting the business. Strong sales can mask a lot of ills but eventually they show up by a lack of profitability.

cropped-finance-chalkboard#4. Financial Neglect:  Cash is the lifeblood of any business, and there will be no business once the cash runs out. Knowing exactly how much money is going in and out of your business will correctly guide every decision you make. Look at businesses that fail and you’ll find that many of them forgot to pay attention to their finances.

You cannot be in control of a business if you don’t know what is going on because of poor accounting. With inaccurate numbers, or no numbers, a company is flying blind, and it happens all of the time. Why? For one thing, it is a common — and disastrous — misconception that an outside accounting firm hired primarily to do the taxes will keep watch over the business. In reality, that is the job of the chief financial officer, one of the many hats an entrepreneur has to wear.

Doing your own accounting via QuickBooks maybe a good short-term solution, but as your business grows so does the need for professional accounting services that prepare monthly financial statements and review the changes within it from month to month.  The cost of this will more than pay for itself.  Knowing your numbers will help you identify problems in your business before they become a crisis.  Not having a sufficient amount of capital or reserve capital will also negatively affect your ability to take advantage of opportunities for future growth.

imgres  #5. Ineffective marketing:   Customers can’t do business with you if they can’t find you or know what you’re selling. You need to invest enough resources into promoting your products and services through the right channels.

It’s easy to spend money on advertising and marketing but if your investment is not properly educating current and prospective clients on what you sell and why they should be doing business with you, it is money wasted.

#6. Lack of an exit plan:  Do you know when and how you will transition out of your business? Do you know what your business is worth? There are lots of ways to exit out of your business: transition to the kids, sell to an outside buyer, close the business, or sell to employee(s).  These are all viable options.

The one certainty is, if you do not plan for it well in advance you will not end up with the results you hoped for. Qualified buyers for your business won’t magically appear when you decide it’s time to sell. Knowing the value of your business and being prepared to sell when the opportunity presents itself will allow you to maximize your sales price.

  #7. Bad location:  We all know of a location that has had many businesses come and go, none seemingly being able to make the location work. The old adage, location, location, location is true for most small businesses, especially any B-2-C business.  Don’t let a cheap lease tempt you into choosing the wrong location.

There are a lot of things to consider when locating your business including competition, accessibility, parking, visibility, signage, nearby businesses, and most important – customer demographics. An extra hundred or thousand dollars may seem expensive for a choice location, but the right location will drive enough traffic to provide a nice return on your investment.

  #8. Wrong reasons:  Starting a small business simply because you want to be rich can lead to an unfulfilling experience. There are few get-rich schemes in small business. Wealth is created with proper leadership, a product customers want to buy, management and planning.

Before you choose to start or buy a business, think first about your own interests and passions. Do you believe you can give something of value that people at large will pay for? Are you driven enough to overcome the many inevitable obstacles an entrepreneur will face? Are you patient and persistent enough to see it through, even in difficult times? These are all legitimate questions to ask yourself before starting a new business.

  #9.  A declining market:  Book stores, music stores, printing businesses, bakeries and many others businesses are dealing with changes in technology, consumer demand and competition from huge companies with more buying power and advertising dollars. It pays to do market research  because sometimes there is no longer a profitable market for goods and services that have been popular in the past.

images#10. Failing to change with the times:  The ability to recognize opportunities and be flexible enough to adapt is crucial to surviving and thriving over many years. Business owners must constantly adapt to meet the  demands of the changing marketplace or their business will fail. Business owners must also learn how to wear multiple hats and think strategically, respond nimbly to problems and opportunities, and develop new areas of expertise.

 

 

 

MBhsfrntIf your business is suffering from any of these conditions, we can help.  Call or email to schedule a FREE consultation to see if your business could benefit from our services. 406.690.5988 or email at mike@beartoothbiz.com  

 

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