Patriot Business Coaching Articles: Building a Strong Business

Patriot Business Coaching Articles: Building a Strong Business: "Traditional business educators and consultants tell us that successful businesses need to start with a plan, often referred to as a Strategi..."

Building a Strong Business

Traditional business educators and consultants tell us that successful businesses need to start with a plan, often referred to as a Strategic Plan. Such plans may be necessary to obtain financing, but once completed are often filed in a drawer, not to be seen for months and years to come. It is common that when we ask a business owner if they have a business plan they say they do. But it is also common that when we ask to read it, it is not easily located.

Having a plan for a business is very important, but for businesses in their early stages of growth or those with difficult immediate issues, a long range strategic plan is, most certainly, not the remedy.  When discussing strategic planning with business owners and managers at this stage of development, they become easily distracted by the immediate issue and don’t see deciding where they will be in five years as a priority. They often ask, “But what do I do to grow the business now?”

Planning at this stage requires a strong financial plan, focused on cash flow. It is widely known that most business failures occur not for a lack of good ideas, but for a lack of cash to implement their execution. Financial planning is best done with the assistance of a good accountant.

But what of the other challenges a new business encounters? The first challenge is the development and sale of its product or service. Without the income from sales, there is no reason to continue. This challenge can be divided into two areas; marketing and sales. The next challenge is once you have customers, you need to keep them coming back and telling others how much they like your business. Almost concurrently, the business owner discovers that he/she can’t do everything themselves and requires others to become part of the team. As the business continues to develop because of increasing sales, loyal customers, and an effective team, this increasingly large business has to be managed. Finally this well-managed growing business needs to chart its future beyond the current month or quarter.

The first activity is to design a marketing plan upon which you can build a successful business. How often do small businesses waste time and money on advertising and marketing ideas which seem right but are ineffective? The company’s potential market needs to be clearly defined. How often, when asked “who are your potential customers”, do you hear “everyone”. That is the right answer if you have an infinite amount of time and finances to reach them all and customize your product or service to satisfy their needs. Where are they located? What is their age range? What is their income level? What are their wants and needs? These are some of the questions that must be asked. The second part of the marketing plan is to customize the 4 Ps of your product to satisfy your potential customer. Those 4 PS are; Price, Product, Place, and Promotion. Put these elements together and a business is either off to a good start or ready to grow.

Sales are part of product promotion, but often becomes the next obstacle after a good marketing plan. My son, an excellent carpenter, recently started his own business. When it came to woodworking there was nothing he could not do very well. He knew his market. He knew his product/service. He knew how to price. But, how could he get orders? Effective selling is a process which involves; a proper introduction, gaining favorable attention, determining wants and needs, presenting benefits and consequences, getting commitment, and follow-up. Selling is more than a smile and a firm handshake.

Once a customer comes into your store or makes a purchase, you want them to come back again and again. For that to happen, a customer loyalty plan is necessary. This requires a complete review of every point of connection between the company and the customer. It may include; how the phone is answered, how the employees look, how the billing is done, the timeliness of shipping or service, etc... Every point of connection needs to provide a positive emotional experience. The more positive the better it is.

No business can successfully grow without the help of others. Even doctors, dentists, and lawyers need others to help them supply their services effectively and efficiently. Building a dedicated staff is not easy, but it is necessary and possible. A positive environment where the group shares common goals, where success is rewarded, and responsibility delegated is a great starting point.

At some point, the business has grown to a point where it must be more formally managed. Metrics or measurements of performance need to be established and measured. Organizational responsibilities need to be defined. A MBO (management by objectives system) needs to be instituted.

At some point, this business has an effective marketing program, a structured sales program, loyal customers, a dedicate group of employees, and a well managed company. Now it’s time to think about the future and develop a strategic plan. Now you need to be concerned about where the business will be in three to five years. The comforting aspect of developing a longer range plan is that the more immediate short term planning outlined above provides a practical and proven base upon which to complete the longer-term plan. Your business is now moving from a month-to- month survival mood to building a long-term sustainable enterprise.

This is the first of a series of articles which will appear on this site. Future articles will cover, in greater detail, each of the planning areas, their development and implementation. We appreciate your feedback.