Archives: Entrepreneurship

Why is Business Planning Important?

Why is Business Planning Important?

We’ve all wondered if a business plan actually makes sense.

I didn’t do a thorough business plan for my first serious startup and it flopped, in ways I was not expecting it to. My justification for not taking the time to do it, was that it was all in my head and we didn’t need it because we were all aware of the financial milestones ahead, but I did not take into consideration that my two business partners weren’t psychic (neither were the employees) and probably needed validation that the idea would really work. Six months and six clients later, the partnership broke up, and the remaining two founders had no plan to keep us grounded and focused in the chaos and stress. So, we spiralled out of control until we hit ground bottom. And then we did a business plan.

A business plan keeps you focused and grounded

When the monkeys are running around like headless chickens and the storm is raging, you’re going to be grateful for that business plan. Many times, a business will start at point A, and the right path should be A through B through C, et cetera, but what tends to happen is A, F, X, W, H… ERJUIP… NQYBZ…. A business plan helps you to expand your business in a healthy manner, and keeps you on the right track, so you won’t have a host of disjointed items and a confused consumer market. It’s a good place to refer to when you’re stuck, or disenchanted.

 

A business plan holds you accountable with milestones

Milestones are key to businesses; they keep us accountable with a date. They also tell you from a glance where your business should be in year or two from now. As a business owner, or even an employee, you can think of milestones as personal KPIs that you’re trying to reach, so every little bit contributed to the overall effort helps. Milestones also indicate to employees that you have a vision and a plan; you’re going places! And if you miss a milestone, you can rally your team together to try to make that milestone happen.

 

A business plan helps you in a ugly times

Any business plan should highlight the major threats which exist to put you out of business, or to cause you to fail. Once your risks have been properly assessed, you should have some step by step guides to tell you how to deal with your situation. This should (or may not) keep you from panicking and making the wrong decision. So many startups fall at the point where they hit a snag, because there is no planning in place that looked at where they could go wrong; in fact, most startups don’t have a business plan due to a lack of knowledge, a lack of funding to pay for one, or a combination of the two.

Can anyone write a business plan?

Can anyone perform open-heart surgery? No. So why do we so often try to do specialized tasks ourselves and become disenchanted by the result? Business plans should be written by someone who can map your business out properly, while looking at all of the possible instances or roads your business can take over a defined period. It’s also unbiased and removed from your emotional attachment to your business idea. If a business plan is the blueprint to a business, I wouldn’t want just anyone writing mine.

A business plan should also provide some level of validation and comfort that your business is in fact possible, and should give you enough courage to push through regardless of the circumstances.

So, if you have a business idea, it’s time to validate it with a proper business plan.

It’s your job to create value, not chase revenue.

It’s your job to create value, not chase revenue.

For most, starting a business is about making money. I mean, that’s the crux of it, but should it be your main focus?

We’ve seen time and time again, especially on a local scale, how businesses with a money-only focus either fizzle out or end up perceived as corrupt or greedy, and the consumers are the ones who suffer in the long run.

What if you can have your cake AND eat it too? What if you can create a business where people want to work at, and people want to shop from, and you can make a sustainable revenue on a long-term scale? Sounds too good to be true? While some may say it’s idealistic, I call bullshit.

You love when you get great customer service, right? I do, too. I remember those places, and recommend them frequently. So build your business on that touch point of value.

People don’t buy a product for what it is, they buy because of how they value it.

When you create something that’s worth something to someone, not only yourself, you’ll find that your consumers will become brand ambassadors, and those are the people who keep your business alive. Repeat business is the most valuable business in a sustainable long-term revenue model.

As entrepreneurs and business owners, it’s up to us to change the landscape in Trinidad in terms of value and customer service.

We always think that local items are of lower value and customer service is always crap, but what are we doing as business owners to change that? We have to add more value to our product bases and look at our offerings in a new light, putting a consumer first, not money first.

The money will come, it always does, but you have to be patient. You’ve got to run this one like a marathon, not a sprint. One of the issues here is that many small business owners are unaware of the struggles in the first two years, but I’ll get into that in another post.

Start by building something of value, something that people want, something that people will remember, with happy employees, a great company culture and fantastic customer service… You will outsell every single one of your competitors with this strategy.

Getting Clients to Commit! 

Getting Clients to Commit! 

As a startup, and even as an existing business, it’s becoming seemingly harder to get clients to commit to business for a set duration. However, for some businesses, it might mean the difference between sinking, floating and sailing.

Committing clients to a five year contract for a simple service in this economy is ludicrous. Six-month and twelve-month contracts with three month trials are more favorable, and even then, termination clauses sometimes have to be penalty free from the client-side, which reeks of unfairness on the service provider’s end.

Striking a fair balance is sometimes hard, especially if a young business is providing a service to a company who has been around for some time. Negotiating termination and payment terms seem to be the biggest hurdle, but something to keep in mind is that if the client came to you, or chose you out of a pool of suppliers, you may have more weight than you think. Opening a discussion about changing the standard terms to something more fair is always a good place to start.

Working closer to your ideal arrangement with a client with every contract is also a good method to get what you need from them while providing fair terms. It will give the relationship some time to grow while you establish trust and confidence with your client.

Client contracts are key to the health of a business. Use them with as many clients as you can manage as it helps you to forecast your cash flow and protects you legally if a client does not want to pay. They should be mandatory, at least for new clients, conglomerates, or companies you’re unsure about.

DISCLAIMER: I am not a lawyer, just speaking/writing from personal experience, and there may be important details missing, such as the specific protection a contract can provide. 

The Importance of Sleep

The Importance of Sleep

I’ve been seeing many entrepreneurs and business owners burning the midnight oil, night after night. I’m awake at some crazy hours (and my Twitter TL is flooded with you owls), but I somehow manage to get a solid eight hours of sleep (or sometimes a little more!)

Not getting enough sleep for an extended period isn’t something to be proud of. It shows a consistent lack of proper planning on your part. This does not include the couple of nights where you have to burn through it to get that project closed on time, or supply a client with some last-minute work (because that shit does happen for us service businesses).

What I’m talking about is the hundreds of business owners who claim to not have a good night’s sleep in over a year, or two or three years.

This is what a potential client thinks: if you have to handle my sensitive business, and you’re not functioning properly because you haven’t gotten enough sleep, then I don’t want your business.

I have heard a client talk about a supplier like that. It’s a scary position to be in, especially when they then look at you and question your sleeping habits.

So, set a regular bed time which allows at least seven hours of sleep. Stick to it.

If you need a list of the numerous health benefits, Google ‘the benefits of sleep’.

Bottom Line: you need to be at your best performance and peak brain function to keep your business healthy.

Post-Script: I am quite guilty for not getting enough sleep too. After all, this post was written at 1:44am. But I try not to do this two nights in a row and not more than once a week, and that’s important. 

How valuable is YOUR time?

How valuable is YOUR time?

How much do you value your time? Do you have a dollar figure per hour?

Every business has tasks that no one wants to do, but someone has to do it, right? And if no one else can do it, then you have to do it, right? Wrong.

When you, as a specifically-skilled individual, have to do a million things unrelated to your exact skill-set, you’re wasting your time. Wasted time in a business is bad for business. You’ll end up being strung out, exhausted, and unable to focus on anything, because you’re doing things you shouldn’t, and you’re not doing a good job anyway because you’re probably dragging your feet on it.

Outsourcing or hiring someone to do the smaller things will allow you to focus on your business and provide a better product and service.

Knowing what you’re worth helps you weed out unwanted clients. 

Every business knows this one… The clients that are an instant migraine. Clients who are usually unwilling to pay you for your time are usually not worth it, because they waste a whole lot of your time and theirs, most likely don’t know what they want, and you might just end up dropping them.

It’s better to just say no from the onset, than to subject yourself to that pain. Do yourself a favor and send them to a competitor! It will keep them busy, haha! #sorrynotsorry

Now that you have all this free time by hiring/outsourcing those tasks, and saying no to all those waste-of-time jobs, you can now plan your time more easily, and live your life doing things that mean something to you. Take your dog for a walk, or read a book.

It’s very tempting to accept every single request from a client, especially as a small business because that means extra revenue (which could mean an equipment upgrade, a bonus or a new employee), but you have to stop and ask yourself if that task is worth your hourly rate, and if it’s not, then don’t do it!

Adding Value

How are you adding value to the world?

With every word that you say, every action that you make, how are you adding value?

With this blog, adding value is key to its success, but also adding an element of speed, is key. Shorter blog posts packed with sometimes just two lines of the value bomb. Longer isn’t better, I’ve learned.

Focus on adding value, refine your ideas, find the points which will make it more successful and build it.

Success is attainable for anyone who’s brave enough to put their mind to it.

Relax! Not everyone wants to be a business owner… 

Relax! Not everyone wants to be a business owner… 

Have you ever had an idea that you wanted to discuss but you were SO afraid of someone stealing it that you said nothing, and nothing ever came of that idea?

We have ALL had ideas like those. And the bullet to the chest is when you see someone else, totally unrelated to you, execute your idea… better.

Unfortunately, what most people don’t understand is that ideas are a dime a dozen, it’s the execution that counts. I’m actually not afraid of talking about ideas, and here is why:

Not everyone wants to be a business owner… 

90% of the time, when I ask someone why they don’t want to talk about their business ideas, it’s because of potential intellectual theft. Yes, we live in a very disloyal community, but that should not stop you from bouncing your ideas off of your potential consumers.

You have to ask yourself, do these people have what it takes to open the exact company, complete with your vision and execute it to become a sustainable competitive company? Are these people ready to make the same sacrifices you’re willing to make in order to take this idea and build it into a company? Probably not. 

I’ve heard a common local story, about a man who thought about bottling water and discussed the idea among colleagues because he was looking for funding, but one of the people in his audience decided that they liked the idea too and had access to the capital, so they opened their very own bottled water company. While I get the moral of that particular story, it leaves me asking what became of the entrepreneur looking for funding, and how much detail did he actually spill at that discussion? It’s up to you to be able to ascertain who can and cannot be trusted. (This is where your gut comes in handy!)

Business is about opportunity; has always been like that and will remain so. You will have those who are honest and like to see others succeed, and those who are like thieves, lurking in the shadows.

One way to look at this is while discussing your ideas (leaving out the secret details of course!), someone might just like your passion about the project and decide to invest, which can either make or break a venture.

So here are some pointers:

  • Do be careful about who you’re talking to, and what you’re talking about.
  • Do not disclose any information about your project which can arm a competitor or create one!
  • Do not be afraid of discussing your basic idea, as you will garner valuable feedback

[Side note: if you don’t agree with the above, that’s fine. Most people choose to hold their ideas very close to heart for obvious reasons and nothing is wrong with that. This is just a different perspective of a topic rarely discussed among young local business owners.]

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