The BALD TRUTH - Planing to fail? Your call!

Planning to fail.  Your call.

We talked about the three killers of a business.  Number one is lack of cash flow.  Number two is poor leadership and now let’s talk about number three:  LACK OF A STRATEGIC PLAN

Strategic Planning

People don’t plan to fail, they fail to plan.

Businesses succeed and fail for many different reasons. It might be your commitment to getting out there every day, a new product or service, great marketing, consumer demand and maybe even luck are all a part of the reasons.  All of these contribute to whether a business makes it or fails.  Knowing your vision and mission (why) and designing your strategies to accomplish them (how) are both a part of the strategic plan.

Why should you have a strategic plan?  Here is the reason. Without a plan you will be flying without a rudder and trying anything that is presented to you to make your business grow. As a business owner you will be bombarded with marketing and sales ideas from every conceivable direction. Each one touting it is the best way to grow your business.  To that I say BS!

Do they even understand your business?  Do they know your WHY? Probably NOT! So why would you allow they to tell you how to run your business yet business owners do it every day. Having a strategic plan will give you direction and allow you to make decisions about your business that are in sync with your vision.

What is the process of strategic planning?  It looks simple yet takes time to create.  The components are:

1.    Vison

a.    Why are you in business?  This is your big picture of your potential as a business. This defines the purpose of the company and the plan. It might be called the “quest” of your company. What is your company Why? Do you know it?

2.    Values:

a.    These are foundational to how you will make decisions.  They lay to ethical ground work for your company and its future. This will define the basic beliefs your company, or what your company is committed to. Does your company have clearly defined values?

3.    Mission

a.    A mission statement transforms the vision into specific actions that are necessary to achieve the vision. The mission statement defines and says what you want to achieve in a specific time frame. This gives direction to all in your company and keeps them on track.

4.    Critical Success Factors

a.    These are the meat and potatoes of the plan.  The tactical areas that must be addressed to be successful. They are broad areas such as: Cash flow, marketing, new product development, product quality, customer service. The list can be long. What are your top 3-5 areas that need to be addressed?

5.    Goals

a.    Each area that you come up with will have to have specific measurable goals. This gets you into action.

The plan will also include market research, a SLOT analysis, Sales plan and financial budgets.  Bottom line, if you want to assure your business will have a better chance to grow and prosper.  Design a plan for the future. Call us today.

Coach Rick Kolster, CBC is a certified business/life coach, the author of Roll Up Your Sleeves and Get To Work as well as an expert on developing leaders and designing strategy for companies. He can be contacted at 817-748-7425 or   Rick@CoachRickKolster.com 

www.CoachRickKolster.com 

The BALD TRUTH - Are you using protection?

Every day businesses and business owners are susceptible to many attacks and challenges that could devastate their hard work and livelihood.  Are you one of those businesses or owners? A survey by Forbes Magazine showed some interesting facts:  Over 500,000 new businesses are started each month. Almost 40% of these small businesses never make it to their second anniversary. Yet another 55% never make it past 5 years. Only about 1/3^rd make it to 10 years. Why?

Three main killers of a businesses

1.    Lack of cash flow

2.    Poor leadership and customer service

3.    Lack of a strategic plan

Over the next few months I will address each of these three major challenges that business leaders fail to protect themselves from and will kill a business.

Lack of Cash flow.

Starting a new venture takes a bunch of things, one of which is a basic knowledge of business and how to sell your product or service.  Over the past 11 years I have been working with clients to create sustainable and profitable businesses I have found that this is the thing that will kill a business.  So you are probably asking yourself, how this relates to the 3 killers of a business.

Bottom line, no sales, no cash flow, no cash flow, no business. Simple but true.  So often a client has made the decision to step out, start a business based on their technical expertise and has yet to learn how to sell what they do. They also start without enough capital in reserve.  Result.  FAIL!  It has been said and I believe “that nothing happens until a sale is made”.  If no one is selling, I can guarantee tis, no one is buying. 

 

Ok how does lack of cash flow kill a business?  I have learned that cash flow is king and with a consistent flow of cash into a business there is hope. Now if it is a negative cash flow, there is a challenge for sure. When I opened my first restaurant in 1981 we did everything on a shoestring and were literally taking from Peter to pay Paul. What does that mean? What it means is we used cash flow to pay immediate critical bills (electric and staff) while others  (beer and food vendors) we used float time to let our cash reserves replenish to take care of other these less critical expenses. My partner and I became known as the kings of the float.

We would pack the bar out on Thursday Friday and Saturday with happy hour and late night biz.   What that means is we would always write checks late on Friday to the beer and food vendors knowing they would wait until Monday to deposit, giving us three days to use the cash flow and float to keep us going.  Now this just was used as a strategy as we started, once we established the business and we began to see positive cash flow, things smoothed out.  Still I learned that cash flow is king.

So to protect your business, focus first on your cash flow and protect it like a chastity belt protects a virgin. But that's something for another time.  Until next month protect your business and remember cash flow is king.

Coach Rick Kolster, CBC is a certified business/life coach, the author of Selling for Geniuses and Roll Up Your Sleeves and Get To Work as well as a motivational speaker on personal growth. He can be contacted at 817-748-7425 or Rick@CoachRickKolster.com www.CoachRickKolster.com