Every week as SmallBizLady, I conduct interviews with experts on my Twitter talk show #SmallBizChat. The show takes place every Wednesday on Twitter from 8-9 pm ET. This is excerpted from my recent interview with Barbara Findlay Schenck, @bizstrong.
Barbara is a small business and marketing strategist who helps people plan, start, brand, market and, when they’re ready, sell their companies. She is the author or co-author of a small shelf of business books, including Business Plans Kit For Dummies, 5th edition, new in May 2016. She was admissions director and a writing instructor at Hawaii Loa College (now part of Hawaii Pacific University) and an account executive at Hawaii’s largest public relations firm before joining the Peace Corps with her husband, Peter, to manage a community development program in Malaysia. Upon return from Southeast Asia they founded and later sold a marketing agency in Oregon which they grew to one of the Northwest’s Top 15. For more information, visit:www.bizstrong.com
Smallbizlady: HOW HAS TODAY’S BUSINESS ENVIRONMENT CHANGED HOW ENTREPRENEURS PLAN FOR SUCCESS?
Barbara Findlay Schenck:Businesses today face the challenge of change like never before. New business models have transformed industries. Innovative technologies have altered the way business is done. Change is constant and with it opportunities abound. Changes in a variety of conditions have shifted the landscape and altered how businesses operate and how customers buy. Businesses need to understand, recognize, and plan around the key drivers of change that most affect their success.
Smallbizlady: WHAT ARE SOME “DRIVERS OF CHANGE” THAT BUSINESS PLANNERS SHOULD WATCH FOR?
Barbara Findlay Schenck: Events or situations that influence how a business operates and succeeds are considered driving forces/drivers of change. Internal drivers of change are forces the business controls, like mission, products, pricing, staffing, financials, etc. External drivers of change are what the business can’t control, like technology, market conditions & buyer preferences. More often than not a number of driving forces combine to affect a company’s fate – especially disruptive innovations.
Smallbizlady: HOW CAN BUSINESSES ANTICIPATE AND PLAN AROUND DISRUPTIVE INNOVATIONS?
Barbara Findlay Schenck: Disruptive innovations result from new technologies and efficiency solutions that profoundly alter how a market functions. Examples include: the Internet, streaming music & movies, cloud storage, 3-D printing, the list goes on and on. Stay on the lookout by examing assumptions & asking what could change and how that would create opportunity or threat. Identify technologies that are likely to undergo changes and ask how those changes could transform your business world.
Smallbizlady: WHAT DO YOU MEAN WHEN YOU SAY BUSINESSES ARE PLANNING IN A “TRANSFORMED WORLD”?
Barbara Findlay Schenck: Products have always moved through life cycles and markets have always evolved – today’s changes sweep wider and faster. Disruptive innovations are upending industries – which often presents huge opportunities and/or considerable upheaval. Business planners need to recognize the drivers of change, assess changes already underway, and then ask “what if?” Then be ready to respond by altering what the business is and does, what it offers, and how it operates.
Smallbizlady: WHAT DRIVING FORCE AFFECTS NEARLY ALL BUSINESSES TODAY?
Barbara Findlay Schenck: All business owners need to plug into (or risk being buried by) the transformative power of the digital revolution. ASK: How best can I use the Internet & social media for design, research, marketing, sales, service, and customer loyalty? Think about how technological advances can improve or disrupt your business ideas, customer relations, customer access? Especially consider how the Internet of Things alters what you offer and how you offer it.
Smallbizlady: WHAT IS THE BIGGEST MISTAKE YOU SEE BUSINESS OWNERS MAKE?
Barbara Findlay Schenck: They fail to plan. They fail to define their business, markets, business environments, goals, and how they’ll make money. Passion can fuel hobbies, but alone, it can’t fuel business success. Know how you’ll make money & how much you will make. In business-plan terms, you must establish your business model. Explain how your biz will create revenue & make profits. Include descriptions of the product, the market, pricing, distribution, cost structure and, and revenue and profit goals.
Smallbizlady: SPEAKING OF MONEY, WHAT’S NEW IN SMALL BUSINESSES FUNDING?
Barbara Findlay Schenck: What’s new is all of the funding options that fill the void left by traditional banks making fewer small business loans. You can now turn to lending sites, peer-to-peer loan sites, microfinancing loans, merchant cash advances & crowdfunding. What’s not new is that most businesses are funded by the owner’s savings, credit card, friends & family, or cash reserves Too many owners fail to calculate how much or for how long they’ll need to finance their businesses, so they run out.
Smallbizlady: DOES EVERY BUSINESS – EVEN A ONE-PERSON BUSINESS – NEED A BUSINESS PLAN?
Barbara Findlay Schenck: 1 in 5 people are now their own bosses and if trends continue, 1 in 4 people will be self-employed within the decade. Successful self-employment requires 1) a good business idea and 2) a formal plan to make it profitable. A formal one-person business plan doesn’t need to be long or complicated. But it does need a written plan. This includes: what the business sells, how it makes money, and the action plans it will follow to achieve success.
Smallbizlady: HOW CAN SOCIAL MEDIA AND REVIEW SITES FACTOR INTO BUSINESS PLANNING?
Barbara Findlay Schenck: The Internet, specifically online review sites, can be an excellent source of inspiration for new business opportunities. Customers opinions, good & bad, can tell you what people do/don’t like and what they want. They are a goldmine of information. Remember that people who write online review sare often outliers. They give a good sense of the two ends of the spectrum. Most of your customers will lie somewhere in between, but learning extremes can spark product and business innovations.
Smallbizlady: HOW DO YOU DESCRIBE THE DIFFERENCE BETWEEN A BUSINESS PLAN AND A MARKETING PLAN?
Barbara Findlay Schenck: A business plan is the blueprint for your successful enterprise. It sells the biz to investors, lenders, and key players. A marketing plan describes how the business offers and sells its products or services to customers. Because selling is fundamental to success, an outline of the marketing plan needs to be included in every business plan. To most business owners, executives, advisors and investors, the marketing strategy can make or break a business plan.
Smallbizlady: WHAT RED OR YELLOW FLAGS INDICATE IT’S TIME TO WRITE OR REWRITE A BUSINESS PLAN?
Barbara Findlay Schenck: The following signals that serve as alerts that it’s time to write or revise a business plan: Costs creep up & revenues sink. Sales decline/miss targets. You don’t meet financial projections. Employee morale sags. Projects fall behind. Competition rocks your biz. Technology & innovations shake your world. Growth is out of control. Or Important customers defect & your strategy requires a 180 turn. All of these are indications that you need a new plan.
Smallbizlady: WHAT ARE SOME QUESTIONS BUSINESS OWNERS SHOULD ASK BEFORE FINALIZING A BUSINESS PLAN?
Barbara Findlay Schenck: Top 10: Have you 1) Realistically assessed your idea? 2) Described your customer? 3) Set a timeline w/milestones? 4) Do your financials add up? 5) Have you set specific goals with specific actions? 6) Does your plan guide & inspire? 7) Is your plan free of jargon? 8) Do you have strategies to deal with the unexpected? 9) Used the fewest words possible? 10) What would competitors think if they read it? | When you can answer all 10, you’re ready to finalize your plan.
If you found this interview helpful, join us on Wednesdays 8-9 pm ET; follow @SmallBizChat on Twitter. Here’s how to participate in #SmallBizChat: http://bit.ly/1hZeIlz
For more tips on how to start or grow your small business subscribe to Melinda Emerson’s blog http://www.succeedasyourownboss.com.