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Monthly Archives: April 2016

Great Business Plan Tips

Why do you need a business plan?You may be wondering why you need a plan in the first place. After all, you have a clear idea in your mind about what you want to achieve. You know the market, you have the necessary skills. So why do you need a plan?There are many good reasons. Here are just a few of them:

  • To clarify your ideasWriting something down gives it structure and substance. Your ideas will be clearer on paper than in your head.
  • To discover and solve problemsThe business idea you have in mind may have some holes – you might not have covered everything. This will become much more apparent when your words are on the page.
  • To get feedback from othersA properly written business plan can be shared with trusted people to get their advice.
  • As a formal documentBanks, investors, accountants and lawyers will want proof that you’re serious about your business. A written plan will provide that proof.
  • To guide you as your business growsA good business plan will keep you on track and focused, even as day-to-day work becomes a distraction.

If you’ve never written a business plan before, it can be a daunting prospect. But these 10 steps will help you create the perfect business plan.

1. The executive summary

This is where you describe your company and the product or service that it will sell. This must be brief, to catch and hold people’s attention.

Try to describe the goal and mission of your business in just a couple of sentences. Work hard at this and try to make it memorable.

Treat this section as an ‘elevator pitch’ document – it should be succinct and easy to remember.

2. Who are your customers?

Do you have a clear idea of the type of people (or businesses) who will buy your product or service? If not, think carefully until you do.

This is one of the first questions any investor will ask you about your business plan. Have your answers ready:

  • Know whether your customers will be consumers or businesses. If they are businesses, who will you target within those companies? Maybe it’s the salesperson, or perhaps it’s the CEO?
  • Determine whether you’ll have regular clients or one-off buyers.
  • Make sure you’ve actually spoken to some of your potential customers.

3. Evaluate the target audience

There’s no room for guessing here. You need to identify the people who will buy from you. Think about the following:

  • Demographics – such as age, gender and social status.
  • Firmographics – this applies when selling to businesses. Firmographics includes size of the company, revenue of the company and services or products of the company.
  • Location – perhaps a specific area, town, or even country.
  • Profession – maybe you’re targeting accountants, police or lawyers, for example.
  • Groups – such as people with shared interests or habits.

The better you evaluate your target audience, the more comprehensive your business plan will be.

4. What are your opportunities?Successful businesses think big. You might be starting small, but you don’t have to stay that way. So write down the possible opportunities for your business as it grows.For example, perhaps you’re planning to start by selling over the internet. That’s great, but how will you get traffic to your site? How will people find you online? Will you need salespeople? If not, how will you convince people to buy from you?As the business grows, is there scope for a bricks-and-mortar retail outlet? What other opportunities will you have if your business grows as planned?

5. Understand the competition

Every business has competition. If you don’t mention yours, investors will think you’re unprofessional – or just plain naive. Be thorough, and list all your existing and potential competitors:

  • Who are your direct competitors – those selling the same products as you?
  • Who are your indirect competitors – those whose market overlaps yours?
  • What will prevent other companies competing with you – what are the barriers to entry?
  • What is your USP (unique selling proposition)? In other words, what’s your point of difference that makes you different from your competitors?

That last point is important. You need to explain how your business will differentiate itself from all the others. That might be based on price, service, quality, range or value. Make sure you spell it out.

6. Build a simple financial plan

All business plans should contain some financial information. This should include the overall costs of setting up your business. For example:

  • Cost to make or buy products.
  • Costs for labour and manufacture, including raw materials.
  • Staff costs, especially for service businesses.
  • Distribution and marketing costs.
  • Fixed and variable overheads.

Good accounting software will help you create a draft financial model. We’ll look into this in more detail in a future guide. For now, talk to your accountant or bookkeeper for help and advice.

7. Include an outline marketing plan

For this section of your business plan, you need to think about the five ‘Ps’:

  • Pricing – how will you price the end product?
  • Positioning – how does your product or service fit into the market?
  • Promotion – what channels will you use to attract and communicate with customers?
  • Profit – how much do you expect to make per item sold?
  • Place – what are your sales outlets?

8. Plan your operations

Put your vision to one side for a moment. What are the daily tasks that need to be done when running the business? Include all business processes such as manufacture and packaging. Try to cover all departments too, including sales and customer service.

9. Get the right people

This is one of the most important factors. Think about who you want to hire. How will you find people whose skills complement yours? And how will you convince them to work for you?Also think about who you want as your business advisors. You’ll need people you can trust, to guide and mentor you at times when you need it.

10. Simplicity is the key

Keep it simple. Complex and long documents won’t be read – either by you or by potential investors. A business plan should be brief, relevant and focused.If you find yourself getting carried away while writing, stop and take a break. Then go back and edit what you’ve written. Shorter is better. The core of a good business plan should be just a few pages long.

Plan your business around your strengthsAs you write your business plan, keep in mind your strengths – and also any areas for improvement. This will help you construct a plan that makes the most of your abilities, while still being realistic. That’s more likely to convince investors that you’re serious.Your business plan is a roadmap for your business – but it’s not set in stone. Review it at least once a year and make changes if necessary.Above all, keep getting feedback from your advisors – official and unofficial ones. With their help, you’ll create the perfect business plan that takes you where you want to go.

About CRM System

When CRM systems work, they’re amazing

If sales is a big driver for your business, you’ve probably either tried a CRM system before or you’re in a hurry to get one up and running. At their best, they can:

  • increase sales (some say by up to 30%)
  • take away admin, so your sales people are happier and more focused
  • identify opportunities to cross-sell or upsell to existing customers
  • ensure customer requests don’t slip through the cracks
  • consolidate and protect your institutional knowledge

The list could go on because CRM software is getting smarter all the time. These systems can do more and more to support your sales process.

But an awful lot of businesses say they use less than half of their system’s capabilities. And many say they’d give up some of those extra features if the thing was simpler to use.

When it doesn’t work, CRM software can be a roadblock

Depending on which study you read, between 25 and 50 percent of CRM projects fail. Failure can be due to a lot of things. In some cases, the system gets in the way of your sales process and reps end up fighting against it to get their job done.

When this happens, staff will probably abandon the CRM system – going back to spreadsheets, private email and other forms of manual record-keeping. Not only does that slow them down, but it means you lose the opportunity to coordinate your sales efforts, which is the whole point of using CRM software in the first place.

There’s a system for you

CRM software has come a long way. The idea of one-size-fits-all was abandoned a long time ago and systems are now built to support all types of business, with their many different sales processes. The growing choice can seem overwhelming but it’s ultimately a good thing.

Don’t just research the CRM software, research your business

To work properly, a CRM system needs to support your specific sales process – no matter how complex or unusual it might be. Every step should be easier than it was before, or your staff won’t get onboard. It’s as simple as that.

So before you start looking at brochures, look at your team and find out what they need. It’ll tell you what to look for to find the best CRM software, and it’s more important than choosing by brand or price.

Asking the right questions

To choose the best CRM software, you need to understand how your team operates. Here are the key considerations to help you choose:

How do you collect lead information?

Your CRM software should make it easy to add new sales leads. If your sales team collects business cards at conferences, get a system with a native mobile app to scan business cards. If you capture leads online, you’ll want CRM software that integrates with your website or marketing automation platform.

How many sales leads do you have?

Many businesses like Trello-style CRM software that visualizes their sales process, and shows which prospects are at each stage. That’ll work if you have a relatively small number of sales leads, but the display will become too dense and complex if you deal with high volumes. The best CRM system will give you a meaningful dashboard view.

How many steps to close a deal?

Map out your sales process and make sure your CRM software can support it. If you have to move a sales lead through 10 stages to close a deal, you’ll need a system that supports all those stages. If you have business requirements that must occur before a lead can be moved ahead, your CRM software should support required steps. Look for a system that can automate simple tasks like sending literature to sales leads.

What do you need to simplify admin?

You’ll need certain features to support your internal procedures and reporting needs. Consider things such as:

  • How easy should it be for team members to access each other’s data?
  • Do you need to secure some data, so it can only be seen by permitted users?
  • What sorts of reports do you need to create quickly and easily?
  • Will you need to be able to export or extract data easily?

Shortlisting and testing

Spend time with your team to fully understand their processes and then create a list of criteria to compare products. Consider only those systems that meet all your needs and have the vendor demonstrate a working model – don’t just rely on brochures and customer testimonials. If you can avoid it, try not to test any more than three systems.

Choosing the best CRM software for you will boost business

Around 80% of sales leads never get converted. Imagine the effect on revenue if you could move the needle just a few percentage points. Good CRM software can really help that journey by improving the quality of each contact with a sales lead or customer.

When you integrate that CRM system with compatible business software, you can create a single workflow to take someone from lead to prospect to paying customer. You’ll be able to:

  • personalize your interaction with sales leads and prospects
  • create quotes
  • turn quotes into invoices
  • graph how much each customer is worth to your business (so you can nurture them and reward them with deals, where appropriate)

But this only works if your sales team is happy to use the system. No matter how hard you might try, you can’t force compliance.

Getting started

To find the best CRM software for your business, you’ll need to:

  • map out your sales process at a high level and share it with your reps
  • get their feedback and refine your map until the sales team is happy
  • seek input from anyone else who’s involved with the customer journey (such as engineers who sometimes go on sales calls)

Your sales team is probably busy and out of the office a lot but resist the temptation to do all this by email. Call meetings, where necessary, to make sure you get the direction you need.

About Lifestyle Business

Growth isn’t always good

A lot of small business advice assumes that you intend to grow. You may be advised to hire more staff, open more stores and do more marketing to win customers.

But what if you’re happy with your current business size? Perhaps you:

  • launched your business for lifestyle reasons and don’t want to take on more work
  • feel you’re already at optimal business size
  • have other commitments that prevent you investing more time in your business
  • don’t want the stress of expanding your business
  • feel it’s less risky to stay small

It’s entirely possible to maintain a smaller business size while making a healthy profit.

Advantages of a lifestyle business

Choosing stability over never-ending growth can lead to big benefits for you and your business.

  • You don’t have to reinvest so much money
    Growth requires investment, but sometimes revenue doesn’t grow fast enough to repay it. The resulting cashflow crunch can be stressful. Non-growth businesses don’t have to worry so much about this.
  • Financial predictions will be simpler
    Revenue and expenses are simpler to forecast with a smaller lifestyle business. There are fewer building projects, equipment upgrades and new hires to budget for. That stability can make it easier to balance your bottom line, so you spend less time worrying about your financials.
  • You’ll feel less stressed
    It can be hard to relax when you keep pushing, growing and raising expectations. Ongoing expansion generally requires a lot of bandwidth. That might be good for your bank balance – but not for your blood pressure. Less aggressive targets can reduce stress and leave you more time to enjoy life.
  • The quality of your work may be higher
    Even with the best of intentions, business owners who are focused on growth and money can be distracted from the quality of their work. With a lifestyle business, you can focus on doing high quality work all the time.
  • You can build goodwill
    Non-growth businesses often spend more of their energy on non-financial goals like delighting customers and being best-in-class. The extra focus on serving the market can create goodwill and encourage greater customer loyalty.
  • You can adapt quickly to market conditions
    To chase growth, businesses often have to lock themselves into long-term strategies. But what if the market conditions change? When business size isn’t so important to you, you can stay nimble. With no fixed growth strategy, it can be easier to change direction.

You can take it slow, but don’t stand still

It’s been said that businesses are like sharks – if they don’t keep moving forward, they die. There’s some truth in this because of the twin forces of depreciation and inflation:

  • Depreciation eats into the value of the assets your business owns.
  • Inflation reduces the value of the money you earn (and causes suppliers to hike prices).

Chances are, your competitors are also working hard to take market share off you. With all this going on, you can’t afford to stand still. At zero growth, you’d actually drift backwards. But you can maintain a viable business size with just a few percent annual growth.

Keep your options open

You might not plan to grow your business now, but there may come a time when you want to. And if you decide to sell your business, you’ll probably want to demonstrate that it can grow to prospective buyers.

To keep the growth option open, make sure you maintain your market presence and networking. It’s important to know where new customers might come from. It’s like fishing – you might not want to go fishing right now, but it pays to know the best spots for when you do.

Tips to keep your lifestyle business steady and stable

  1. Spread your risk
    If you don’t have to do a huge volume of business, it might be tempting to drop clients and work with just a few of your favorites. Try to avoid doing that. You don’t want to become too dependent on one or two accounts.
  2. Value every customer
    Finding new customers is expensive. It takes a sales and marketing push, then you may have to onboard them. If your revenue’s relatively flat, you probably won’t have a big budget for all this. So treat your customers well and aim for only minor churn. It’s much more cost effective to keep your existing customers than gain new ones.
  3. Stay on top of your finances
    If you’re running a lean business, you have to watch cashflow closely. If costs start climbing or sales start dropping, you’ll need to course-correct quickly. Make sure you have access to the numbers you need to keep an eye on. Anaccounting dashboard will track those metrics in real time so you can check in whenever you like.
  4. Keep setting targets
    You might not be chasing big growth, but you should still set targets to keep you focused. Not all your goals will be financial. You might aim to achieve 99 percent customer satisfaction, for example. But make sure finances are still represented. You need concrete targets to help keep the business sustainable.
  5. Don’t forget your aim
    If you chose a lifestyle business because you wanted more time and flexibility, keep reminding yourself of that. Business can be addictive. You might start chasing extra work because you get a buzz from closing deals or your competitive instinct kicks in. It can take just as much discipline to maintain a small business size as to go all-out for growth.

Avoiding the lifestyle business trap

People regularly start small businesses to be their own boss, set their own hours, and try for a better work-life balance. In reality:

  • almost 90 percent of small business owners end up wishing they could work faster
  • a third say saving time is a key goal

Day-to-day business administration gets in the way of the dream. And the sense of being time pressured goes up the smaller the business is. If you’re in that situation, business software could provide a lot of relief. For about $30/month, a smart accounting package will:

  • allow you to create and send quotes and invoices from your mobile
  • automatically send invoice reminders to late payers
  • track and organise business expenses (and autopay them, if you want)
  • chart money in and money out on a dashboard, so you can always see cashflow

Systems like this also keep all your financial and tax information in one place, which makes it much easier for your accountant to keep your business compliant. Plus you can plug in other apps for point-of-sale, inventory management, payroll (if you decide to grow, after all) and many other tasks.