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| Successful Business Plan |
Question:
Two guys, out of work from the IT
bust, decide to go into business
together. We need a business
plan and looking for the best model
possible. Any suggestion where
to turn?
Answer:
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1) Have you two thought about relocating?
Just because where you are presently
living isn't hiring doesn't mean other
places are not. For example,
in Madison, Wisconsin, we have practically
no unemployment. Anyone that
wants to work can find work and that
includes IT people.
2) Avoid the Small Business
Administration and SCORE like the
plague. Small Business
Development Centers live in the fairyland
of academic and/or are where those
that couldn't hack it in the real
world of business
go to lick their wounds. SCORE
is simply a bunch of grumpy old men
waiting to die.
3) If you're serious about starting
up your own business,
do what I suggest in my standard advice
to all wannabe entrepreneurs. It
is as follows:
"What I recommend you do is determine
what your sales territory is. What's
its radius? Double that and
add a healthy 10% more distance then
go and talk to people out that distance
that are in the same business
you want to start up. Literally,
drive there. Do not do the following
over the phone or email or through
snail mail. Show up on their
doorstep during the slow time of their
business
day. Tell them that you want
to start up a similar business
at such-and-such a location and if
they would consider you competition.
If they say you would be, drive
further away from your proposed business
location until you find a business
that says you're not. If you have
to go to a different country, do so.
Once you find a business
that says your two territories won't
overlap, ask if they wouldn't mind
answering some questions about how
to start and run a business
like theirs. Play to their egos.
Have a list of questions written
out on notepad, but do NOT write down
their answers. Instead, bring
a tape recorder (yes, put it right
out in the open no need for spyware
and besides it plays to their egos
as their words are being treated as
worthy of being recorded) and concentrate
on getting as much information out
of them as possible as well as picking
up the other half of the answers they
give in body language. If they
say something you don't understand,
speak up and ask for clarification.
Let them wander off your list
of questions since where they wander
to might be a place you never thought
of asking questions about and should
have been. But keep an eye on
the questions you've written down
and try to ask them all before the
interview concludes. Of course,
always yield to customers that come
in.
After you've interviewed one owner,
go home and digest what was said.
Listen to the tape on your way home.
Think over it all. Adjust
your business
plan accordingly. Adjust the
questions on that notepad and on your
next free day, head off in another
direction and do the same thing. Try
to interview at least twenty businesses.
Interview the good, the bad,
and the ugly. If you're lucky,
you'll interview one that is going
out of business
or has just went out of business
so you can hear the dark side. Likewise,
interview those businesses you think
are bad. Keep in mind that since
they're still in business,
they are probably doing something
right if just being the only game
in town for your products/services.
Share as you give. Let them
know what you think is a good idea.
Ask them to read over your business
plan right there before you. Naturally,
don't leave a copy of it behind. What
one of these business
persons is going to tell you will
be better than ALL the advice from
all the business
professors on the face of the Earth.
Even from the ones that are
going out of business!
Don't forget these individuals after
you interview them. Send them
a nice thank-you snail mail letter
for taking the time to answer your
questions. When your business
opens, send them an invitation to
come and see it.
And don't stop doing this after you
open your business.
At least once a month (if not
once a week), do the above again.
In fact, you'll very likely
get more out of these interviews AFTER
you open your business
than before you did. After you
open your business,
you can really start to talk shop
since you're now currently running
a shop. This worked great
for a little-known starting-out pizza-parlor
owner by the name of Tom Monaghan
the founder of Domino's Pizza.
Lastly, see if the good ones are willing
to sit on your Board of Directors
(or Board of Advisors, if you don't
want to give them any control power).
The rest of your Board of Directors
should be made up of marketers. Your
Board of Directors should help you
keep the big picture in mind and an
eye on the future."
Additionally
"Work on a business plan. Regardless
if you're going to get a business
loan or not. A business plan
forces you to think of all aspects
of your business. Question every
aspect of it. Think how you
can do it better, cheaper, and faster.
Always remember to K.I.S.S.
it. Keep It Simple, Smart. [Yes,
I know it is usually said as "Keep
It Simple, Stupid", but it is
the smarts that make things more complex
and difficult than they need to be.]
And forever keep in mind that
this is a business you're starting
and a business is to turn a profit.
It doesn't turn a profit and
it's just an expensive hobby of yours.
As for how much time to invest
into your business plan, studies have
shown that those that work less than
six months on their business plan
have a 90% failure rate. Those
that work six months or more on their
business plan have a 90% success rate.
And to start off, get a copy
of Michael Gerber's "The E-Myth".
It's real value is helping you
determine if you're a Technician,
Manager, or Entrepreneur. Be
honest with yourself and you'll save
yourself a lot of grief."
And finally
"Lastly, ONLY buy used. Never
buy anything that doesn't ABSOLUTELY
have to be new. All it has to
look like is being in good condition
and not even that if it's in the backroom
and your customers will never see
it. Go to sheriff auctions,
business
liquidation sales, garage sales, etc.
and hunt for bargains. Find
a place to store these bargains during
this collection phase. Keep
your start-up expenses as low as possible
and buying used is the best way to
do this. If you do buy something
new, it should be with a great
deal of thought on why it has to be
new and not used. Again, if
the customers see it, it only needs
to look to be in good condition and
that's it."
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