Monthly Archives: September 2013

Two Key Planning Actions for Starting a Small Business

In providing small business planning services we regularly assist people with starting a business and I would like to share a recent example of someone who was starting a new business.

A couple weeks ago Terri, a new client of ours called me to let me know that she started a new business. She is a tall slender, easygoing woman in her early forties and this new business was in reality a successor of her previous manufacturing business which she had operated for 17 years. Recently she had decided to shut down her previous business because of a number of financial and operational reversals that she had incurred.

Terry asked me to come over as quickly as possible so that we could discuss the new business. As we sat down she said George, I Small Business Planningwant to run this business totally different than my previous business. “I made a lot of mistakes with my last business but I don’t want to repeat those mistakes with this business.” “I feel like God has given me a second shot at getting this business correct and I don’t want to drop the ball this time”. She went on to share that when she started her original business she really had no definitive direction for the business and had no exit strategy. She just wanted to manufacture signs. This time around she knew she wanted to do things differently.

As we chatted about what things are necessary to create a robust and thriving business a number of things came up in our discussion.

First Terri said, “I know I need to have a Vision for this business. A direction of where I want to do to take this business and what it should look like down the road. In the past, my direction for the business changed on a regular basis and now I know that was not good thing.” I call this, knowing why you went “In” business?

She went on to say, “I am in the process of developing specific goals for my new business that have specific deadlines”. From many standpoints, including identifying a definitive direction for her business, Terri had the huge benefit in running this second business because of all that she had learned from the first business. Determining this direction would include establishing particular goals that would enable her to avoiding making prior mistakes again.

Second, because she had started her prior business without a specific end in mind, she did not have a real idea of what she eventually was going to do with her business. She had not defined long term goals and had no real exit strategy, but she thought that she would just be able to figure out those things as she went along. Identifying goals are a key to creating a successful business as well as understanding your customer’s goals (see Small Business Planning Steps for Growing Your Business).

It was extremely gratifying to see that she was determined to take this second opportunity and make the most of it.

Small Business Planning actions for starting and exiting a business

Small Business PlanningSo if this is your first, second, third or 10th business, follow Terri’s decision and look at your business and ask yourself two things.

Number one, why are you going into business or why did you go “into” business? Your “In” for your business should guide you into the direction that you want to take your business. Ask yourself, where do you want to take your business and what does success look like to you? This direction for your business is commonly called your “Vision”. Your Vision, the direction, the destination, the “ah I made it” for your business needs to be concrete, not just a fuzzy idea, but instead something that you can visualize and in see in your mind’s eye with exactness. You should be able to “taste it”, “feel it” and be driven towards making it a reality on a daily basis.

Number two, what are your “Out” for your business? That is, do you have an exit strategy for your business? Do you have a viable plan for whom would operate your business and how would you relinquish control? This includes knowing what your business must look like in terms of revenue, profitability and size in order to attract someone who would be your successor. This also means that if you are close enough to the time you want to be exiting your business, you should be identifying a specific successor.

By taking these small business planning steps you will ensure that you are going into business in the correct way and that you will exit your business in the best possible way.

 

photos by: Neosnaps & foshie