Visualize the Future of Your Business
This is the second half of chapter 7 of my upcoming book (Mitch’s Framework for Business Development) that I started to blog last month (put the link here). It is testament to the importance of things like Culture, People and Structure that it took me two blogs to outline what you should be validating for your business. These are not things you need to think about when you are in the Concept stage (https://businesssuccesssecrets.com/2018/06/5-stages-of-business-development/), but the basic assumptions for all of these things should start to be defined in your Early Development stage and should be well along being verified before you are In Revenue.
As a quick refresher, the components of your culture/people/structure definition include the following: Team, roles, skillsets; Ownership structure & documentation; Procedures, processes, contracts and other legal issues; Stakeholder relationships (customer, vendors, employees, financing, etc.); Vision, mission values and culture. Please re-read that list. Can you think of any of these that are not a critical component of your business? Of your business development? From an investor’s perspective the answers you provide are a window into who you are, who your team is, and what you want the future to look like. While not always easily defined, they truly are the walls and roof around your business.
Procedures, processes, contracts and other legal issues may seem like something that will come much later, once you are operational. If that is what you thought when you first read that I want to enlighten you to the fact that you are wrong. In order to properly develop your financial pro forma, you need to start thinking about how things will flow (processes) and document your assumptions (procedures) while you test them and refine them. To start it can be a simple flow of product through production, assembly and delivery to help define overall strategy and costs. If done properly in the end you should have a basic set of processes and procedures before you launch your business and before you hire personnel. You will also need both in defining an employee handbook and standard operating procedures for employees.
Another component of your handbook will be any requirements placed on your business by government entities, like OSHA (the Organizational Safety and Health Administration), the FLRB (Federal Labor Relations Board), the IRS (Internal Revenue Services), etc. Some of those requirements apply to all businesses, some don’t. Some regulations only apply to specific businesses and/or in specific states. Not understanding these things is one of the biggest mistakes any business can make. The earlier you understand which rules and regulations apply to you the better you will be able to plan on addressing them. While extreme, if you are emitting carbon into the air and don’t plan for the equipment you need to mitigate it, you are going to have some major issues implementing your plan!
Defining who your stakeholders are and how their requirements will impact your plan is another critical element to define. Will you need a bank? An angel investor? A venture capitalist? Each have very different views and requirements. Who will be your key vendors? Where are they located? What requirements do they have, such as minimum orders or quantity breaks as you grow? What type of contracts will they require you to sign and can you live with their terms? What are their delivery time frames and how do they impact your ability to deliver to your end customer? Who are your real customers and how do you deal with them? Do you deal with purchasing agents and RFP’s or do you have to soft sell to specific individuals? What types of relationships do you want with all of these stakeholders? Very businesslike? Friendly? Open? Closed? What will each of them require of you?
Finally, while it is buried last in my 8th blog in this series, you must really start by defining your vision and mission in succinct terms. What is your elevator speech? How can you quickly present the problem you are addressing and how your solution, above all others, addresses that problem. This all needs to be done in terms the people with the problem can identify with so they make the ultimate decision in your favor. That means taking valuable money they have earned and giving it to you, hopefully over and over again. Some entrepreneurs think they have to start here, but without doing the basic research and validating the assumptions made during your concept phase, you really cannot do an effect of job of defining these things. Once you do, you will have a very powerful marketing message to drive your long-term success by ensuring everything you and your business do going forward does not deviate from you vision and mission. If they do, they should be seriously scrutinized because they mean changing the vision or mission, which could entail changing everything in your business.
Along with your vision and mission it is just as important to determine early what type of work environment you want to foster. Is it businesslike, or leisure? How will you manage people so that you know they are working on the right things as efficiently and effectively a you want them to? How will you engage with people to make sure they do these things? What management structure do you want and how do you want managers to manage people? What are your policies for things like gaining health insurance? Bonuses? Time off? What other benefits will you offer, and why? Will you have a break room with a pool table and food/drink? Defining these things early will help you when bringing people on to your team, as you will want to make sure they can thrive in the environment you have chosen to create. Hiring your first people is a troublesome process and knowing what you want and can offer will help make it go much smoother. Firing your first hires, especially early in your business development/growth, is one of the hardest things to do for many reasons. Ensuring that does not become an issue should be one of your top priorities.
Your challenge this week is to re-read the first 7 blogs in this series. If you have done the things outlined then at this point you should have the basis of a pretty solid business plan. Depending on the stage of development you are in it may not be complete, or may be based on mostly assumptions, but that’s ok. So your challenge this week once you have read through those blogs is to be honest with yourself and ask do you have a solid business plan? If not, start doing something about it now!
My last blog in the series will be on financial and overall business planning.
Mitchell Bolnick – The Excel Consulting Group