Ideas To Deals

Aspirin or Vitamin?

Aspirin or Vitamin...which is your business? 

Vitamins are a great supplement to your diet.  They help you have more energy and a stronger body.  They are good to have but if you don't take them you'll be OK. Aspirin is taken to relieve pain.  If you have a headache you are ripping up your medicine cabinet to find the aspirin.  So what is your business...Aspirin or Vitamin?

An aspirin business is one that solves a the customer's pain.  It is a must have not a nice to have.  In my last post on the business planning process I discussed the need to do market research.  Finding your customers' pain point and targeting it is the reason behind market research.  It is the difference between "Ready, Fire, Aim" and Ready, Aim, Fire".  Good market research will allow you to better identify your market and what customers really want from a product like yours.  By spending some time on research activities you have a better chance of getting your product right the first time and avoiding costly stops and restarts.  It will help identify early adopters that might beta test your product and helps you make a better case to investors when seeking capital. 

In one of my favorite business books, A Good Hard Kick in The Ass, they lay out a process for assessing the market:

1. Explore the Pain: Construct a Hypotheses about the market.  Create a specific case as to who needs your product the most and what the market looks like.  Gather data relating to the market by interviewing potential customers.  Find out who has the most pain and what these companies have in common.  Most initial hypothesis are wrong, that is the point of doing the research...find out in research where you need to make an adjustment not after you have launched.
2. Envision the Solution: More face-to-face interviews but this time with those that indicated the most pain and can help you better narrow in on the specific need for your product.  In this phase take the data from the earlier interviews and construct a "first-pass presentation" to show how you envision your solution solving the pain in the market.  At this point, in addition to the presentation, having an early prototype would better help illustrate your solution.
3. Establish Credibility: Now you are about 90 percent done.  Here you will go to "influencers" that can help you build credibility in the market and start to create buzz around your product.  By this time you will have a fine-tuned company presentation and a vetted solution prototype.  Get people excited and ready for your launch.

By going though this process you build what the customers want, not what you think they want.  You will identify the real pain in the market and be ready to attack it.  This may take some time and effort but it will be worth it when revenue and investment starts to flow into your business.

Planning Good ~ Plans Not So Much

I think as an SBDC business consultant I am supposed to tell people that they need to write a "business plan".  I guess I'm breaking the rules because I'm going to tell you Not To Write  Business Plan!  Many entrepreneurs think writing a business plan is an exercise to engage in only when seeking a loan or investors.  There is so much focus on the development of a 40 page, 12 point font plan that the true purpose of a plan, to guide the operation of the business, is missed.  I've seen plans where the narrative and the financials did not relate to each other, as a matter of fact looked like two separate businesses.  Other plans I've seen are full of Gartner references but contained no real guidance on execution of the business.   The worst plans I seen are the ones that are sitting on the shelf in the founder's office covered with dust. More than likely all of these plans were written for the banker with no real thought as to using this as a document to drive the business. The problem with that is if a loan is made it is based in part on the plan.  If the plan is not followed and the business does not meet it's milestones the bank will be less likely to extend further credit in the future...or worse.

My advice is to forget about writing a plan and focus on the "Process of Planning".  Start with a blank pad of paper or flip charts.  Write something that you can embrace and use to drive your business, not as a paperweight or a doorstop.  You should develop a working, living document that will allow your business to reach the levels that you desire.  It should clearly articulate the steps you need to take as you grow the business.  I've heard that the keys to running a business are knowing "Who's out there to buy your product." and "How are you going to get them to buy it."  Maybe there is a little more involved than that but if you don't have the answers to those two questions down cold it's going to be a struggle. 

Here are some steps to consider in your planning process:

• Review Mission: Why does your business exist?  What are you doing this for?  Good businesses drive margin based on the mission of the business.
• Review Vision: Where do you want the company to be in 12 months, in five years?  This would be in many different factors: financial goals, role of the founders, employees, location, etc.  This will help you determine action steps to take later and help build your business direction.
• Do a Strategic Analysis: This will really allow you to determine where the business is and what opportunities might be available that you are not currently thinking of.  A good format is a SWOT Analysis.  For each of these you should list items that will impact future strategy:

• S-Strengths: Skills, distinctive competencies, capabilities, competitive advantages, or resources the organization can draw on to build strategy.
• W-Weaknesses: The lack of one or more Skills, distinctive competencies, capabilities, competitive advantages, or resources the organization can draw on to build strategy.
• O-Opportunities: Situations in which benefits are fairly clear and likely to be realized if certain actions are taken.
• T-Threats: Situations that give rise to potentially harmful events and outcomes if action is not taken in the immediate future ~ These must be actively confronted to prevent trouble.

• What products do you want to offer? This is a brainstorming activity where you can put anything forward.  Create a list of possible product regardless of priority at this point.
  
• Put some detail around the product offering: Take each product you want to offer and consider what those look like short-term and long-term.  Who is the customer? What do these products accomplish? Discuss ROI, revenue, expense (don't forget opportunity costs).
• Start to prioritize the products: Put the products in order of value for the company relating to the mission/vision and financial goals of the company.
• Do any of these products work together?  Think about the possible synergies created by coupling products into one offering. You might now decide to create one product that drives higher value than two individual products.
• Validate the market need for the products with database research: Research possible users/buyers of your products.  Find who is out there to buy the product.  Most libraries have research capabilities and databases that you can access simply by having a library card.  If you are in Columbus, Ohio check out the Columbus Metropolitan Library. 
• Validate the market need for the products with customer research: Get to the customers and find out what they think of your products.  This can take the form of formal focus groups or facilitated discussions or meeting with potential customers one-on-one to gauge their interest.  This is critical step because you are gathering the opinions of the market not just you and your buddies opinions.  An important note here, it doesn't have to cost a lot to do this.  You don't always have to have professional, paid facilitators...just talk to people.
• Layout Milestones/Timelines: You have to hold yourself accountable.  Develop milestones for taking your product to the market.  These milestone events might include: When can the products be launched based on funding, employee resources and timing for the market, etc. Take each of these milestones at least three layers deep so that you have detailed steps to implementation.  Once you decide what the milestones and steps are you need to develop timelines, answer the WHEN question.
• Execute: Take what you have done and bring it to life...Implementation and Execution.

Let's be clear, you can start/run a business without doing all of this.  The difference is the level of control over the outcomes of the business that you gain by going through a planning~implementation process.  I often have entrepreneurs come to me after being in business for awhile and want to "get serious" about moving their business forward.  This allows you to do that.  It also makes it easy to create a "business plan" for financing because you have all of the information needed, all you have to do is drop it into the right format.

Did I miss anything? Let me know your thoughts.

Quick Reflections on the Ohio Growth Summit 2009

The Ohio Growth Summit was held on June 10 at Columbus State Community College.  Now more than ever we at the Ohio Small Business Development Center were looking for ways to small businesses to find ways to ignore the economy and continue to take their businesses to the next level. The Ohio Growth Summit became a celebration of the  entrepreneurial spirit and commitment to making dreams become reality. The Summit features speakers, partners and networking specifically tailored toward small business success.

It's usually difficult for me to participate in the Summit sessions because I'm usually running around working on some aspect of the event but this year I was able to actually attend some of the sessions so I'm going to reflect on what I saw and heard at the Summit. 

The Tweet-up on June 9 went very well.  Mike Figliuolo of thoughtLEADERS gave a great presentation on personal and professional leadership.  I missed the beginning of the presentation as I was picking up Chris Brogan from the airport (his flight was delayed twice and canceled once, glad he made it). We did finally make it and I was very happy to see over 100 people there to kick off the Summit.

On June 10, the full Ohio Growth Summit began.  Jim Canterucci presented on Personal Brilliance for small business owners and entrepreneurs.  I had seen the presentation before but I told Jim afterward that I liked this one better than what I had seen before.  Jim had customized the presentation for the Summit attendees.   I really appreciated his effort in doing that.  Some speakers would just do what is in the can but Jim went the extra mile to make his presentation impactful...Jim ~ You're Brilliant.

After Jim finished we held four breakout tracks:

• Social Media ~ Your Customers Are There, Are You?
• How To Successfully Take Your Company Global.
• Invent, Build, Go To Market ~ Successful Product Commercialization Strategies.
• An Entrepreneurs Guide ~ How To Get The Bank To Say "YES".

I attended the Social Media track but took a few minutes to walk around and stick my head in each session.  We had engaged participation in each session but the Social media track had over 125 attendees.  Back in December I had lunch with Nate Riggs, founder of Social Business Strategies, and we discussed what would be key for small businesses to know about social media.  Many of the small businesses that we had been consulting with were not utilizing the tools.  Nate shared a concept of using social media to build activity above the sales funnel. From that moment on I knew I wanted Nate presenting on social media applications for small business and he did not disappoint.  The full track was great.  Chris Brogan told me we didn't need to bring him in to speak because Nate had it all together and did a great job.  Nate wrote two posts for the Ohio Growth Summit I wanted to share here: 

• Small Business in the Social Guerrilla Marketplace
• Social Media Practitioner Panel at the Ohio Growth Summit

The social media practitioners panel brought out four power users of social media ~ Lewis Howes, Angela Siefer, Cheryl Harrison and Alaina Sheer.  This is truly an All-Star panel that would match up with presenters from any conference in the country.  Be sure to click the Practitioners link above to read about each speaker and visit their site/blogs.

The closing keynote was Chris Brogan, President of new Marketing Labs.  Chris' blog, Chrisbrogan.com, is one of the top blogs on social media.  It is a go to for me on how to navigate the world of social media.  Chris is a rockstar of sorts in social media circles and I felt that he would be a natural to speak at the Summit.  I didn't know what to expect, I didn't know what kind of a speaker he was I just knew his content was great.  To answer the question...he is a GREAT speaker.  He was entertaining and kept the audience engaged and entertained through the entire keynote.  What I like about Chris is that he keeps things in perspective regarding social media. Social media is about being social.  It is about listening and being a "promiscuous connector.  When it comes to business only social media analytic that matters is $$$.  Chris couldn't have been nicer to deal with or more accommodating with his time. My favorite Chris Brogan quote was: "People that don't take risks are called employees".

I want to thank everyone that participated as a speaker, a volunteer or a sponsor of the event.  I mostly want to thank the attendees that took time out of their day to day battle with the economy to come out the Ohio Growth Summit.  Hopefully you got some much need ammunition to continue the fight and reach your business goals.