E book, How to Jumpstart Your Business


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120 page, resource book that teaches entrepreneurs valuable lessons that were mastered by a gamut of seasoned entrepreneurs and business leaders. How to Jumpstart becomes an entrepreneur’s most valuable, business reference book since it pulls from the practical, everyday work experiences of many successful entrepreneurs and business owners. How to Jumpstart Your Business is truly a collaboration of the knowledge and wisdom of former and current colleagues, clients, and associates of its author, Terry H. Hill.

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E book, How to Jumpstart Your Business

  1. 1. THE E-BOOK EDITION OF How to Jumpstart Your Business By Terry H. Hill Managing Partner Training for Entrepreneurs.com / Legacy Associates, Inc. Small Business Consultants 8374 Market Street #167 Lakewood Ranch, Florida 34202-5137 Phone 941-556-1299 | Fax 941-866-1953 | e-Mail Small Business Consulting Website http://www.legacyai.com Training & Development Website http://www.TrainingforEntrepreneurs.com
  2. 2. T H E E - B O O K E D I T I O N O F H O W T O J U M P S T A R T Y O U R B U S I N E S SDisclaimer The e-Book Edition of How to Jumpstart Your Business ©2011 Terry H. HillAll Rights Reserved: This e-Book Edition, How to Jumpstart Your Business, cannot be reproduced ortransmitted electronically or mechanically in any form; nor can it be photocopied, recorded, or stored inany retrieval system. If a reviewer wishes to quote brief passages from this e-Book Edition and reproducethem in a magazine, newspaper, or on the Web, the reviewer must obtain written permission fromthe publisher. For information, please contact the Executive Director of Training forEntrepreneurs.com, at 8374 Market Street #167, Lakewood Ranch, Florida, 34202-5137 USA, or e-mail.Disclaimer and/or Legal Notices: The information presented in this e-Book Edition represents theview of the author as of the publication date. However, since circumstances may change over time, theauthor reserves the right to alter and/or update his opinion piece. The e-Book Edition, How to JumpstartYour Business, should be used for informational purposes only. Every attempt was made to verify theinformation provided in this e-Book Edition; however, neither the author or the publisher, nor hisaffiliates/partners assume any responsibility for errors, inaccuracies, or omissions. Any slights to peopleor organizations are unintentional. If the reader needs advice concerning legal or other related matters,then the reader should seek the services of a fully qualified professional. This e-Book Edition, How toJumpstart Your Business, is not regarded as a source for legal advice. The reader should be aware of anylaws, which govern business transactions or other business practices in his country and state. Referenceto any person (living or dead), or any business -- is purely coincidental. The e-Book Edition of How to Jumpstart Your Business Training for Entrepreneurs.com
  3. 3. T H E E - B O O K E D I T I O N O F H O W T O J U M P S T A R T Y O U R B U S I N E S SPrefaceWhether its starting a new venture or simply maintaining the same level of energy and enthusiasm you had the dayyou founded the company, owning and managing a business can be an arduous task. How to Jumpstart Your Businesswas written to help you, the owner, fast track your company.This e-book was written as a reference guide to provide thoughts and ideas to some of the most pressing issues andchallenges you face as a business owner or aspiring entrepreneur. It is a compilation of the answers to some of themost pertinent questions that have been posed to me and my associates over the years.A common statement among many business owners is that “my business is different.” While it is true that allcompanies have their own unique set of characteristics, it is interesting how all businesses essentially follow thesame basic principles as evidenced by the case studies that we have included in this e-Book.One of the greater challenges many business owners face is “finding the time” to get things done. Dealing with theday-to-day demands of running a business can be overwhelming whether the company is a startup, on a fast trackor facing challenges.Part of what creates this situation for the owner is that as the “leader of the organization” you are expected to beproficient in every area of the business. In our experience, the majority of the time the business owner started theirbusiness because they knew “the business.” Knowing "the business" and knowing “about business” are totallydifferent.This e-book provides a starting point to some of the answers to the questions "about business". All facets ofrunning a business are covered in the e-book: • Formation • Operations • Planning • Stakeholders • Financial • Transition • Marketing • ResourcesYou are encouraged to read the first chapter which discusses the book in greater detail and provides some valuable“real world” experience about running a business.Enjoy the e-Book,Terry H. Hill The e-Book Edition of How to Jumpstart Your Business Training for Entrepreneurs.com
  4. 4. T H E E - B O O K E D I T I O N O F H O W T O J U M P S T A R T Y O U R B U S I N E S STable of ContentsChapter 1 – Starting or Jumpstarting Your BusinessTake the Entrepreneurial Leap of Faith with the Help of a Trusted Advisor ................ .......................... 2 Entrepreneurship … a Leap of Faith Purpose of the Book Start Smart and Seek Advice Look at the Big Picture with a General Business Advisor How to Find a General Business Advisor and What to Look For Implement Your Business Advisors Initiatives to Increase ROI Establish a Relationship with Your General Business Advisor Based on Trust Score Big with a General Business Advisor – Architect vs. Checker Mitigate Risk with the Anecdote to Failure How This Book Is OrganizedChapter 2 – PlanningThe Foundation of Every Successful Enterprise ............................................. ............................................ 9 Case Study -- The Challenge The Secret to Success … Plan the Work and Work the Plan Achieve Your Vision with a Strategic Business Plan Address the Components of a Strategic Business Plan What does the entrepreneur bring to the table? Identify Your Attributes as an Entrepreneur Examine Your Goals and Objectives Understand the Complexities of Your Venture Analyze the Nature of the Industry Create a Powerful Mission Statement Define and Live Your Company Values Align Your Companys Culture with Its Shared Values and Beliefs Use the SWOT Analysis to Assess Your Business Status Identify Internal and External Factors that Affect Your Progress Prepare Financial Projections to Reflect Realistic Assumptions Avoid an Action Plan that Gathers Dust Execute, Execute, Execute Your Action Plan Determine the Components or Mini-Goals of Your Action Plan Set Short-term Objectives to Achieve Your Ultimate Objective Case Study—OutcomeChapter 3 – FormationStructure the Enterprise Properly from the Start............................................ ........................................... 23 Case Study -- The Challenge So…You Think You May Be An Entrepreneur? What is an entrepreneur? What Makes an Entrepreneur Tick? What Drives the Entrepreneur to Start a Business? What Skill Set Does/Should an Entrepreneur Have? The e-Book Edition of How to Jumpstart Your Business Training for Entrepreneurs.com
  5. 5. T H E E - B O O K E D I T I O N O F H O W T O J U M P S T A R T Y O U R B U S I N E S S Determine that a Viable Need Exists for Your Business/Service Make Sure Theres a Market Potential for Your Product/Service Evaluate Your Entrepreneurial Venture Analyze Your Motives for Your Entrepreneurial Venture Assess and Understand Your Tolerance for Risk Generate Demand with Effective Business-building Practices Calculate Potential Risks and Rewards Case Study—OutcomeChapter 4 – TransitionTransform Fledging Businesses into Long-term Businesses ........................................... ............................ 33 Case Study -- The Challenge Be Flexible When Transitioning Your Business What Is an Entrepreneurially-run Business? Advance Beyond the Entrepreneurial Stage---Heres How What Is a Professionally-managed Organization? Use These Helpful Tips When Changing Management Styles Consider Potential Behavioral Issues When Changing Management Styles Understand the Different Stages of Your Business Life Cycle The Idea Stage and How It Works The Startup Stage---The Debut of Your Organization The Importance of the Growth Stage Stabilize Your Systems, Structures, and Processes to Support Future Growth Ensure Long-term Success---Diversify Recognize the Signs of Decline Tap into the Experience of Professional Managers The Valued Characteristics of Professional Managers Make Sure You Select the Appropriate Organizational Structure for Your Company Set Standards for Your Operating Procedures Create a Basic Organizational Structure Prevent Needless Bureaucracy Case Study—OutcomeChapter 5 – Finance and AccountingAccount for Your Activities Accurately and Consistently ............................... ......................................... 47 Case Study -- The Challenge Get and Keep the Financial Bottom Line Strong Securing Initial Financing Should You Call on Friends and Family? Should you consider angel investors? Evaluate Venture Capital Weigh the Pros and Cons of Conventional Bank Financing Use a Basic, Reliable, Accurate Record-keeping System Use a Basic, Reliable, Accurate Record-keeping System Maintain Accurate Inventory Generate Invoices Quickly and Accurately for Improved Cash Flow Elements of an Invoice Invoicing Guidelines Analyze and Interpret Financial Statements. Heres How… Optimize Your Cash Flow The e-Book Edition of How to Jumpstart Your Business Training for Entrepreneurs.com
  6. 6. T H E E - B O O K E D I T I O N O F H O W T O J U M P S T A R T Y O U R B U S I N E S S Understand Your Income Statement. Its Easy… Assess Your Companys Financial Health by Reading Its Balance Sheets Appraise the Financial Health of Your Company with Ratios. What Are Ratios and What Do They Mean? Create and Use Management Reports to Achieve Daily and Long-term Financial Goals Create and Use Sales Reports for Proactive Management Manage Your Business More Effectively---Create and Use Production Reports Case Study—OutcomeChapter 6 – StakeholdersLeverage Your Stakeholder Wisely......................................... ................................................................. 62 Case Study -- The Challenge Business---It’s About the People Treat Your Employees Fairly … They are the Lifeblood of Your Enterprise Taking Ownership…What Does It Really Mean? Avoid the Danger of Losing Touch with Your Stakeholders Incentives Usually Work…To be Effective, Use Them Wisely. Heres how Positive, Motivating Work Environments…Who Wouldnt Want to Work There Pros and Cons of Partnership A Synergistic Relationship…What Exactly is That View Suppliers as Untapped Resources What is your banker’s involvement? Meet with Your Banker Regularly Your Customer Base---One of Your Most Valuable Assets Understand Your Customers’ Business & Align Your Products with Your Their Needs Seek Professional Help for Challenging/ Overwhelming Issues Advisors Are Bargains When Considering Their Potential Benefits and Value Think Outside the Box Case Study—OutcomeChapter 7 – OperationsStructure Your Operations for Excellence ........................................... .................................................... 74 The Nuts and Bolts of Running Your Business How Do You Form an Administration? Make Experience a Priority When Building an Administrative Team Be Alert to the Risks of Top-heavy Management Assemble a Quality Management Team --- It’s a Reliable Predictor of Small Business Success What about Costs? Create Basic Systems and Processes to Produce Consistent Results Use Baby Steps to Achieve Short and Long-term Goals Standardize Processes and Procedures---Its Essential for Your Companys Growth and Success Streamline Your Business Operations Select Business Facilities Wisely Should You Rent or Own? Make Your Business Facility Sparkle---It Reflects Your Values and Standards Help Managers and Employees Do Their Job---Organize Your Business Systems Design Efficient Workflows to Gain Optimum Business Success Evaluate Equipment Options Judiciously Prevent Equipment Failures---Maintain Equipment Regularly Case Study—Outcome The e-Book Edition of How to Jumpstart Your Business Training for Entrepreneurs.com
  7. 7. T H E E - B O O K E D I T I O N O F H O W T O J U M P S T A R T Y O U R B U S I N E S SChapter 8 – MarketingThe Engine that Drives the Enterprise ........................................... ........................................................ 87 Case Study -- The Challenge Connect Your Products and Services with Your Customers Deploy Targeted Messages across Multiple Channels What about Personal Selling? Network and Grow Your Business Consider Including Charitable Work as Part of Your Plan Maintain and Grow Customer Relationships Mine Existing Customers for More Business Experiencing a State of Balance and Stability? Then Its Time to Expand Your Offerings Invest in Understanding Your Customers’ Business Become Your Customers Trusted, Indispensable Resource Differentiate Yourself from Your Competitors and Grow Perform a Competitive Analysis, and then Strategize Develop Your Unique Selling Proposition Develop a Pricing Strategy Become a Low-Cost Provider Develop a Cost-Plus Model Become a Value-Based Provider Case Study—OutcomeChapter 9 – ResourcesKnowing Where to Get the Answer is Critical .......................................... ............................................ 101 Case Study -- The Challenge The Right Information within Easy Reach Keep in Touch with Your Industry---Belong to a Trade Association Access the Small Business Administrations (SBA) Treasure of Resources Access the Web with Its Extraordinary Store of Information Benefit from Aligning Yourself with an Educational Community Additional, Available Resources that Can Support EntrepreneursReferencesGreat References are the Backbone of any Great Book.......................................... ................................. 107Profile -- Terry H. HillAn Entrepreneurs Mentor.......................................... .......................................................................... 111Profile -- Training for Entrepreneurs.comAn Online Small Business Community for Business Skills Training, Virtual Mentoring, and NetworkingOpportunities................................... ...................................................................................................... 113 The e-Book Edition of How to Jumpstart Your Business Training for Entrepreneurs.com
  8. 8. C H A P T E R 1 : S T A R T I N G O R J U M P S T A R T I N G Y O U R B U S I N E S S ChapterStarting or Jumpstarting YourBusiness 1Take the Entrepreneurial Leap of Faith with the Help of a Trusted AdvisorEntrepreneurship … a Leap of Faith Entrepreneurship is a multi-faceted adventure that closely resembles a roller coaster ride without exception! When you begin an entrepreneurial journey or “ride,” you are unaware of the gamut of experiences, both disappointing and rewarding, that you will encounter as you undertake this challenge. Entrepreneurial challenges are not unlike most challenges in life. Hard work, long hours, and anxious moments are just a few of the characteristics of the journey to most successful outcomes. There are a few basic issues that entrepreneurs struggle with on an ongoing basis. Although they may be phrased in a variety of ways, they’re generally centered on these four primary issues: more sales, more cash, more time, and the “right” people. Starting your own business is an undertaking that requires more than vision, inspiration, sweat equity, money, and determination. It is that leap of faith that demands that you let go of everything that is safe, comfortable, and proven. It is getting “outside the box” in the biggest way possible.Beginning a new business venture can be risky, dangerous, and harrowing. However, with the properpreparation, the appropriate knowledge, and the counsel of a mentor or trusted advisor, it can be aliberating and extremely rewarding experience.There’s a reason why many of America’s most successful people are entrepreneurs who started their ownbusinesses and then saw them take off to unimaginable heights. There’s a reason why the Horatio Algersof the world continue to inspire thousands of entrepreneurs every day. There is a reason why some ofAmerica’s greatest companies started with an idea, with meager seed capital, and with an individual whohad a maniacal belief in the potential of an idea, and along with determination and perseverance, saw itthrough to success. The reason? The entrepreneurial spirit!For every success, however, there are hundreds of failures. The statistics are not only sobering, but alsodown right frightening. More than half of all businesses started today will fail. The failure rate isastounding. The e-Book Edition of How to Jumpstart Your Business Training for Entrepreneurs.com Page 2
  9. 9. C H A P T E R 1 : S T A R T I N G O R J U M P S T A R T I N G Y O U R B U S I N E S STake a look at recent U.S. Bureau of Labor Statistics data, and this is what you will discover: after twoyears, across all sectors, 44 percent of all new businesses are no longer in business. After four years, 66percent no longer exist. And these survival rates don’t vary much by industry.What do the statistics tell us? That most new businesses—whether they’re founded on the most brilliantidea since the theory of relativity or the production of a mundane, but exquisitely necessarymanufacturing component—are making fatal mistakes that will ultimately lead to bankruptcy. This muchis certain. If more than half of all new business ventures fail, then there are valuable lessons that have notyet been learned.Purpose of the BookThis e-book, How to Jumpstart Your Business, is a resource book that teaches entrepreneurs the lessons learned by many of their predecessors. It should become the entrepreneur’s business desk reference book. Jumpstart draws on the practical working experiences of many successful business leaders, and is truly a collaboration of knowledge and the wisdom of the contributing authors. The timing for this book, along with the critical information within, couldn’t be more appropriate. Entrepreneurship is at an all-time high! After spending 15 to 25 years in corporations and medium-size enterprises, the baby-boom generation made its mark in corporate America. With the availability of time, experience, and investment capital, Baby Boomers are starting up new business ventures. This baby-boom generation is still on themove!Many of the Generation X-ers and Baby Boomers who became disillusioned with the corporate world, orwho were laid off as part of widespread downsizing, have the resources and drive to go out and do exactlywhat they want to do. They’re mobile. They can choose the geographic climate and location, where theywant to live, purchase a business or build a career, and then generate income while doing what they trulydesire. They can control their own destinies and search for the best ways to do so. As a result, we are inan era when entrepreneurial energy and innovation, tempered by a realistic understanding of risk andchallenge, will have a greater impact on our economy than at any other time in history!Start Smart and Seek AdviceSeeking advice is a good thing. If you’re going to succeed in business, you need to be proactive, ratherthan reactive. The key to entrepreneurial success is your ability to plan, implement, execute, and adjust.It’s very difficult to do all of these things on your own.That is why it is important to align yourself with an experienced, impartial advisor so that together youcan more accurately assess, analyze, and implement your envisioned ideas. The e-Book Edition of How to Jumpstart Your Business Training for Entrepreneurs.com Page 3
  10. 10. C H A P T E R 1 : S T A R T I N G O R J U M P S T A R T I N G Y O U R B U S I N E S SLook at the Big Picture with a General Business Advisor—A General Practitioner for BusinessThere are many types of business advisors—financial advisors who inform you of financial and tax issues,legal advisors who can counsel you on contract law and legal requirements, and project advisors who canoffer you expertise in specific areas like IT, marketing or HR. Most successful entrepreneurs also workwith another type of advisor—a general business advisor. A general business advisor can help withcritical business issues like business development, strategic planning, transition management, and overallenterprise health and efficiency.Unlike most business owners who focus on the trees, the general business advisor specializes in seeing theforest. The business owner may look at his financial statements and decide that the cash flow crunch isbeing caused solely by a problem with sales. Consequently, he decides to engage a sales and marketingspecialist to come and attack that single problem.Unfortunately, sales and marketing may not be the root of the problem at all. A business is a system, andany issue within the system is inextricably linked to other issues elsewhere in the system. Like a generalpractitioner in the field of medicine, the general business advisor looks at the big picture—the entirecompany—and sees exactly how the various components are working together or not—from accountingto production to administration to sales, marketing, and IT—and understands how they interrelate andwhere the problem lies. Isolating one problem and bringing in a specialist is like putting a Band-Aid on acut when you really need a complete physical.With a general business advisor, you can get an accurate, unbiased, comprehensive diagnosis on the entireenterprise. Only then, can you develop and implement an effective strategy to restore the business tooptimal health.How to Find a General Business Advisor and What to LookForChoosing a general business advisor is a serious decision. You want to select a general business advisorwho is competent and experienced, and with expertise. It is equally important that he be a person ofintegrity—a person that you can trust since you will be working together in a truly confidential, fiduciaryrelationship.The best way to find a competent general business advisor is to first reach out to your immediate circle offriends. Talk to your other advisors, your CPA, your attorney, your banker, and your insurance agent.Then, call each candidate to schedule a personal meeting. It is best to have this initial meeting in youroffice or place of business, and to keep the following points in mind: • Sensitivity to the Importance of Confidentiality: This is critical. Get a feeling for how the advisor treats the bounds of confidentiality because he or she will be privy to highly confidential information about you and your business. The e-Book Edition of How to Jumpstart Your Business Training for Entrepreneurs.com Page 4
  11. 11. C H A P T E R 1 : S T A R T I N G O R J U M P S T A R T I N G Y O U R B U S I N E S S • Non-compete Policy: Make sure that the candidate is willing to sign a non-compete agreement and will not advise direct competitors of yours during the course of your engagement and for a predetermined period of time thereafter. • Chemistry: It’s not just for romantic relationships! There has to be chemistry between you and your advisor. This is someone you’re going to work closely with to grow your business. You have to feel a connection, a sense of trust, and you should never feel forced into making a decision at the first meeting. To gauge the level of comfort that you feel, meet your prospective advisor more than once. • Confidence: Make sure that you have the level of confidence that you need to move forward— and that the person sitting across the desk from you, is as passionate as you are about your business. • Competence: Confirm that the candidate is properly qualified and that his or her skill set matches your needs. What is the candidate’s “core” competency level and what additional resources can he bring to the engagement?Implement Your Business Advisors Initiatives to IncreaseROI There is tremendous value in working with a professional general business advisor, and the return on your investment can be significant. A good general business advisor will be able to come in, analyze your situation, make recommendations, identify areas for cost-saving strategies, and determine where to improve efficiencies. The savings realized in these areas should more than pay for his fees. If, as with many fledgling businesses, you’re experiencing cash flow issues, a good advisor will first look at your available cash to jumpstart your cash flow. What do people owe you? What can you collect tomorrow? How can you convert more of your inventory to cash? Where can you cut expenses? In terms of ROI, these are initiatives that can deliver returns almost immediately.The savings realized from other recommendations will take more time. If you need to increase revenues,it will take time to ramp up sales and see a return. A good general business advisor will understand yourgoals, analyze your current situation, and provide strategies from the viewpoint of an impartial third partyto help you resolve your particular issues over time. Many business owners know what their problemsare, but they don’t know how to resolve them. In these situations, the general business advisor deliversROI—both short-term, as well as, long-term—by providing a roadmap for improving the company’sperformance and helping you find the resources to do so. The e-Book Edition of How to Jumpstart Your Business Training for Entrepreneurs.com Page 5
  12. 12. C H A P T E R 1 : S T A R T I N G O R J U M P S T A R T I N G Y O U R B U S I N E S SEstablish a Relationship with Your General BusinessAdvisor Based on TrustYour relationship with your general business advisor is predicated on a foundation of trust. As yourrelationship matures, so should the level of trust on both sides. This is critical. How the advisor viewsyour business is also important. Your general business advisor should strike a balance between becominginvolved enough to understand your business, while maintaining an impartial view.The experienced general business advisor typically begins an engagement by analyzing the company’scurrent situation. This analysis is made possible through a series of interviews, starting with you, thebusiness owner, and continuing with the various stakeholders of the business. Then, the benchmarkingprocess takes place--- your company’s financial performance is measured against that of your competitors.Further discussions with you, about your visions and goals, enable the general business advisor to gainvaluable insight into your personal motivations.After this process is completed, the advisor is well-informed and knowledgeable, and is in a position todevelop a strategic plan to take your company from its current situation to your envisioned futureposition. The trusted general business advisor works hand-in-hand with you and your staff to implementand execute the necessary strategies to successfully accomplish your visionary goals.Score Big with a General Business Advisor –Architect vs. CheckerLike most entrepreneurs, you’re probably tempted to do as much as possible on your own, andoccasionally bring in an outsider to “check your work.” The biggest problem with this situation is thatyou’re missing out on the true value that a general business advisor offers—impartial expertise inassessing your overall current situation, understanding your desired state, identifying the gap betweencurrent and future state, implementing initiatives, and executing a strategy to bridge the gap.These are things that most entrepreneurs simply do not have time to do because they are too busyrunning a business. Launching and growing a business is where most entrepreneurs need help. Bringingin a “checker” to review and audit your work really does nothing more than confirm what you alreadyknow—something is or isn’t working.While a “checker” performs an important function, it is the professional general business advisor whoprovides a comprehensive strategic overview and then rolls up his shirtsleeves to assist you with itsimplementation and execution. A “checker” keeps score. A “general business advisor” helps you score.A qualified general business advisor is a member of your team who works with you to plan and todetermine the outcome of the game. As a general business advisor, the goal is to get you on the righttrack and through the next phase of your business growth successfully. The e-Book Edition of How to Jumpstart Your Business Training for Entrepreneurs.com Page 6
  13. 13. C H A P T E R 1 : S T A R T I N G O R J U M P S T A R T I N G Y O U R B U S I N E S SMitigate Risk with the Anecdote to FailureMitigating risks in your business is the main focus of Jumpstart. This book emphasizes the importance ofaligning yourself with a professional business expert who can prevent you from falling into the traps thatcause many small businesses to fail. It is a practical reference guide that answers commonly-askedquestions about starting, financing, forming, growing, marketing, and running a business. When you takeall the challenges that you face as a business owner and condense them, you will find that the challengestypically fall into one or more of the following four categories: • The constant battle to increase sales • The ever-present issue to improve the cash position • The struggle to allocate sufficient time • The recognition and fact that good people make a significant differenceWhatever stage of the business lifecycle that you happen to be in, the smartest move you can make is toseek the advice of a professional expert to help you navigate your journey and to keep you on course to asuccessful future.How This Book Is Organized How to Jumpstart Your Business is intended for the entrepreneur who is launching a new business, for the entrepreneur who is purchasing a business, the entrepreneur who needs to revamp an existing business, or who simply wants to learn the basic lessons that lead to success. Every entrepreneur has questions. The right answers can provide the guidance you need to take the leap of faith to launch, purchase, or revitalize a business while minimizing risk.This book is about giving you the tools that you will need to understand the ebbs and flows of the naturallifecycle of a business and to anticipate the challenges that you will inevitably face.Jumpstart provides business intelligence gained from years of experience and the advice of experts to helpyou get started, or to pick yourself up and start again when, and if, you falter.The information in How to Jumpstart Your Business is organized into nine chapters that cover basic topics ofprimary concern of any business owner.Each chapter starts with a case study that explores a common business problem experienced byentrepreneurs. The case study is followed by several frequently-asked questions and answers on therelevant topic. Finally, the questions and answers are followed by the resolution of the problem outlinedin the case study at the beginning of the chapter.This format makes the book a very effective resource. It makes for quick reading and is an excellentbusiness tool. If you’re having issues with planning—whether it’s drafting a business plan, an action plan The e-Book Edition of How to Jumpstart Your Business Training for Entrepreneurs.com Page 7
  14. 14. C H A P T E R 1 : S T A R T I N G O R J U M P S T A R T I N G Y O U R B U S I N E S Sor a marketing plan—you can go right to the planning section, and scan down through the material untilyou find the needed information. If you want to understand more about reading financial statements, youcan review the chapter on “Finance and Accounting,” If you’re looking for marketing strategies andtactics, you can jump right to the chapter entitled, “Marketing Your Business.”The case studies are based on typical business problems that entrepreneurs encounter and the solutionsare based on practical, personal experiences in working with clients and contributing authors. Some ofthe concepts may seem simplistic, but there is great value in their simplicity. Every business is unique.Every business has its own story. But there are universal principles, challenges, and roadblocks that affectvirtually every business. And, there are certain “best practices” that produce positive results. The e-Book Edition of How to Jumpstart Your Business Training for Entrepreneurs.com Page 8
  15. 15. C H A P T E R 2 : P L A N N I N G ChapterPlanning 2The Foundation of Every Successful EnterpriseCase Study -- The Challenge John started a commercial bakery on the outskirts of a large metropolitan city a couple of years ago. He had been an experienced baker for a number of years beforehand and he was recognized as one of the premier artisans in the area. He had always felt that if he started his own company, he would be extremely successful. It turned out that he was far more successful than he could have ever imagined! Now he wanted to expand by acquiring a competitor in the area. John knew that, in order to make the acquisition, he needed to get a bank loan. The thought never occurred to him that securing a loan would present a problem. John met with Larry, the bank loan officer, with whom John had been doing business---borrowing small amounts of money to make equipment purchases. But when John approached Larry with a loan proposal for acquiring a new company, well, that was a little different… Larry wanted to know if John had prepared a business plan. He wanted to know how he planned to integrate the new business with his own and whether he had prepared any financial projections for the combined entity. He also wanted to know what synergies John would achieve with the acquisition. John was irritated by all of these seemingly-irrelevant questions. After all, he had been a loyal bank customer for years and had always made his payments on time. He didn’t have the time nor the inclination to deal with these issues. Some of these questions, he thought, couldn’t really be answered until after the acquisition. Surely another bank would see his reasoning. John decided to meet with a second banker only to be told the same thing. However, this time, the banker suggested that he talk to me. John and I met one evening after work when things had settled down for him. He was still irritated about the way he was being treated and didn’t understand why the banks were putting up so many roadblocks. He was also concerned that if he procrastinated much longer, the deal would pass him by. Once John calmed down, I explained to him that the bankers were really looking out for his best interests. I cautioned him that as his business grows, it becomes increasingly important for him to document his thoughts and ideas on paper. In regards to the financing aspects, it is even more critical if a company is contemplating an acquisition. In this situation, he must “look under the hood” of the company before acquiring it. After all, an acquisition can represent a significant investment not only financially, but also in terms of time and effort. This turned out to be a great opportunity for John and me to sit down and look at not only the terms of acquisition, but also John’s business as well. A number of questions that arose in our discussions are presented in this chapter. Training for Entrepreneurs.com Order Page
  16. 16. C H A P T E R 2 : P L A N N I N GThe Secret to Success … Plan the Work and Work the Plan Starting and running your own business is a highly rewarding, but often risky endeavor. As with anything else, increasing your chances of success begins with preparation. And, when it comes to transforming your dream into reality, the key to successfully Jumpstarting your business is simple: plan the work and work the plan. Whether you’re just getting a new business off the ground, expanding the business you have, or purchasing a business, devote plenty of time to planning: • Begin with a discovery process to confirm the viability of your venture. • Do your homework. • Uncover fundamental objectives, insights, opportunities, and risks. • Research the market. • Examine your offering, market conditions, trends, and the competition. • Excavate potential problems. • Outline your goals and objectives. • Compile the business intelligence you need to create a solid foundation of actionable information to chart your present and future direction.The next logical step is to develop a plan—a strategic business plan that functions as a living document todefine your objectives, guide your business, and take you from Point A (where you are today) to Point B(where you’d like to be). But remember—a strategic plan is about more than securing funding—it’sessential to jumpstarting your business. And once you’ve written your business plan, follow it up with anaction plan that spells out your short and long-term objectives and how you’ll achieve them.Just remember this—there is no underestimating the power of planning. As the former CEO of Octeland Lucent Technologies notes, “People usually plan their vacations more carefully than they plan theircareers. I’m a compulsive planner, but there were times when I had no idea what I was doing.”This chapter is about understanding and articulating your goals and objectives. Even when you have noidea what you’re doing, developing, and implementing a plan improves your chances of achieving yourgoals. This chapter outlines the fundamental components of crafting a strategic plan to take yourbusiness to the next level. The e-Book Edition of How to Jumpstart Your Business Training for Entrepreneurs.com Page 10
  17. 17. C H A P T E R 2 : P L A N N I N GAchieve Your Vision with a Strategic Business PlanStrategic planning is the process by which the key stakeholders (you and your partners) in an organizationenvision its future and develop the procedures and operations that will enable you to achieve that vision.A strategic business plan serves two purposes. First, it’s an internal document that defines your goals,strategies, and tactics. Second, it’s a tool for raising capital. However, you need a plan, whether you’relooking for capital or not. Without a plan you won’t know where you’re going and you have no way tobenchmark or track your progress.With a strategic plan, you have a roadmap that enables you to look ahead, allocate resources, focus on keypoints, and prepare for problems and opportunities.A well-articulated strategic business plan clearly outlines your vision, goals, priorities, strategies, products,services, and financing needs. It also provides relevant information about your company, yourmanagement team, and short and long-term objectives. A business plan focuses on both the positive andnegative aspects of your business opportunities, and enables you to plan ahead three to five years.Address the Components of a Strategic Business Plan As they say, there’s more than one way to skin a cat. Likewise, there’s more than one way to write a business plan. Formats, outlines, and lengths may vary, but business plans all tend to share generally-accepted standard components. What are the common denominators? Your plan must be clearly written, logically organized, and convincingly worded. It should target a specific audience. It should outline the details of financing, competition, strengths, weaknesses, and forecasted financial performance. As a rule of thumb, when writing yourplan, include the following components: • Cover Letter: Write a cover letter to introduce you and your business plan to your audience. • Title Page: Include a title page that details the content of your plan, your name, address, phone number, names and positions of the executive team, date and contact information. • Table of Contents: Develop a table of contents to make it easy for readers to find information. • Statement of Purpose—includes a clearly stated explanation of your company’s goals and how you’ll achieve them. For example, your statement of purpose may be “to provide quality, reliable landscaping services for less in the Phoenix metropolitan area”. Describe your value proposition, whether it’s price, convenience, service or another attribute, how much capital you’ll need, and how you’ll repay it. • Executive Summary—this is the most important part of your business plan. Include a brief summary that highlights the major points of your plan. Provide background on your business, the The e-Book Edition of How to Jumpstart Your Business Training for Entrepreneurs.com Page 11
  18. 18. C H A P T E R 2 : P L A N N I N G market, your value proposition, key team members, projected ROI (Return on Investment), internal rate of return, and current and potential risks. • Market Information: Describe your target market(s). Substantiate statements with facts and supporting detail. Include market research on initial and future markets, key market segments, past growth rates, anticipated trends, and changes. • Company Description: Describe your company, its type, history, legal structure, industry, market, principals, revenue, size, and growth rate. • Product/Service Description: Describe your offering, relevant business benefits, stage of development, how your product/services will satisfy a real business need and enable you to compete. • Management Team: Include detailed information on the core members of your team—the people who will run the company, as well as senior partners, attorneys, financial and business advisors. Include names, titles, experience, skills, responsibilities, and compensation. • Potential Risk Factors: Include an assessment of the risks facing the company. Describe the worst-case scenario and anything that could go wrong today and in the future. Offer strategies for overcoming risk. • Execution/Action Plan: Describe how you’ll translate your business plan into actionable results down to the finest detail. Relate how you will obtain licenses to do business, open an establishment, get products on the shelf, hire employees, and forge partnerships. Explain production schedules, delivery processes, and customer service policies in order to set operational benchmarks to measure progress. • Financial Information: Include a section that projects future revenues and profits three to five years out. Base this information on best-case, worst–case and most-likely-case scenarios. Summarize financial data like cash flow, income statements, balance sheets, banking relationships, terms, and rates of loans, financing plans and working capital requirements. • Legal Preparation: Include corporate bylaws, patents, and trademarks, licenses to do business, employment agreements, and customer contracts. Anticipate the legal and documentary setup your business will require.Writing a business plan can seem like a daunting task. However, there are many resources available tohelp you prepare a sound plan. You can find books in your local book store, software programs andtemplates online and in local computer/software stores or you can work with a consulting firm, a nearbySmall Business Development Center or a local business school. The e-Book Edition of How to Jumpstart Your Business Training for Entrepreneurs.com Page 12
  19. 19. C H A P T E R 2 : P L A N N I N GWhat does the entrepreneur bring to the table?Entrepreneurs as a group share a unique set of attributes that differentiate them from the rest of thegeneral nine-to-five population. Every entrepreneur doesn’t necessarily have all of these traits, but in alllikelihood will have some of them.Typical characteristics of an entrepreneur: • Focused, resilient, determined • Highly self-motivated • Charismatic, natural leaders • Confident and optimistic • Willing to take calculated risks • Obsessed with producing results • Action-oriented, opinionated, independent • Driven to control their own schedules, workloads, destinies • Quick to recognize and capitalize on opportunity • Willing to exchange near-term sacrifices for long-term gains • Visionaries with the grit to tolerate uncertaintyIdentify Your Attributes as an EntrepreneurNow, take this exercise a step further and zero in on your own abilities as an entrepreneur. What are yourstrengths? What are your weaknesses? What inspires and drives you? Is it wealth? Is it recognition? Or,is it a drive to control your own destiny? This is important. Your personal strengths and weaknesses canhave a significant impact on your success. As you plan to Jumpstart your business, factor your strengthsand shortcomings into the equation—and the potential impact of both in the best and worst of times. The e-Book Edition of How to Jumpstart Your Business Training for Entrepreneurs.com Page 13
  20. 20. C H A P T E R 2 : P L A N N I N GExamine Your Goals and Objectives There are many different types of businesses with many different types of goals. Before you do anything, understand what you hope to achieve. Is your goal to start small and stay small? Grow slowly and steadily? Provide a comfortable standard of living but not much more? Or are you driven to become a fast- track, high-growth, wealth-creating business that doubles in size and profitability every few years? A little self-examination can pay lasting dividends. Understand your goals and objectives before you develop a plan—everything flows fromwhat you want to accomplish. Once you understand your overall goals, set basic objectives for the near and mid-term-incremental, achievable baby steps that pave the way to your ultimate goal. Your objectives may be quantifiable (revenues or number of customers). They may be relationship-driven (customer acquisition, retention or deeper penetration of existing accounts) or a balance of the two. Articulate your long and short-term goals and objectives to establish a benchmark for measuring success and shifting directions as needed.Understand the Complexities of Your VentureEvery business venture comes with its own set of challenges. As you develop your plan, understand thecomplexities and potential risks associated with your unique enterprise. For example, you need tounderstand how macro-economic and industry conditions can affect your business, how competitors canthrow a monkey wrench into the best laid plans. You need to weigh the chances of obsolescence,challenges with supply and demand, legal complexities, regulatory issues, market volatility and more.Examining the complexities of your venture means unearthing all of the potential problems and risks,whether they’re strategic, operational, financial, or legal. To really get a good handle on these issues andhow they might play out, consider the complexities you face today and imagine how they’ll manifest in thefuture.Typical complexities include difficulty obtaining products or parts, rising prices, labor shortages, gasprices, international exchange rates, staffing issues, the loss of a key client, and research and developmentexpertise. The key—don’t fall into the trap of downplaying risk or complexity. Acknowledge them anddevelop strategies to handle and overcome these issues.Analyze the Nature of the IndustryThe importance of understanding your industry goes without saying. If your business is to succeed, youmust have an intimate knowledge of the your industry---not just from 30,000 feet, where you considermacroeconomic factors like unemployment rates, inflation, interest rates, and regulatory requirements---but also from a more immediate perspective.Become knowledgeable about major players, competitors, and whether your industry is seasonal, cyclical,or counter-cyclical. Understand key drivers for your industry—is it powered by research anddevelopment? Is it driven by sales and marketing? Is it driven by constant innovation? Is it driven by The e-Book Edition of How to Jumpstart Your Business Training for Entrepreneurs.com Page 14
  21. 21. C H A P T E R 2 : P L A N N I N Gprice? Or, is it driven by relationships? Get a handle on growth rates—past, present and future.Familiarize yourself with the trends that affect the industry as a whole.With an understanding of the nature of your industry, you can position your business to withstand thevagaries of change, to capitalize on drivers and cycles, seize opportunity, and generate market share.Create a Powerful Mission StatementAlso known as a statement of purpose, your mission statement is a summary that encapsulates yourorganization’s aims, values, and overall plan. In essence, your mission statement describes who you are asa company. It defines your organization, your ambitions, your objectives, and your method of operation.Developing a mission statement is important because it forces you to distill loosely defined notions andideas into a tangible statement that captures what you’re doing today, what you want to do tomorrow, andhow you will do it.Base your mission statement on a clear and simple structure and make it easy to understand. If you can’tcommunicate your basic mission or purpose, how can you hope to build on it or expect your investors orcustomers to “get it”? Once established, the mission statement provides a “sanity check” when you’retempted to shift directions, stray from your primary purpose, or become captivated by new opportunities.The Chairman of General Electric, Jack Welch sums up the value of the mission statement in this phrase,“Good business leaders create a vision, articulate the vision, passionately own the vision, and relentlesslydrive it to completion.”Define and Live Your Company ValuesCompany values, also known as core values—are something we’ve all become familiar with in recentyears. They’re basic, central values that integrate a culture and help distinguish it from others. There aretwo ways to make company values meaningful—defining them and living them.Defining your company values is as simple as considering what you want your company to stand for.Determine what is acceptable and what is not, and define these things in writing. Revisiting Jack Welch’sperspective on business, GE’s core values are “Imagine, Solve, Build, and Lead”—bold verbs that expressexactly what it means to be part of GE. Their action-oriented nature not only conveys who GE is as acompany, but also serves to energize GE teams around leading change and driving performance.What are your company values? Whether they revolve around ethical business practices, a passion forquality, a focus on innovation, teamwork or integrity, think about the guiding principles that you want todefine your company. Articulate them in a way that resonates with your customers, your employees, yourvendors, and your partners. Then live them every day. The e-Book Edition of How to Jumpstart Your Business Training for Entrepreneurs.com Page 15
  22. 22. C H A P T E R 2 : P L A N N I N GAlign Your Companys Culture with Its SharedValues and Beliefs Whether you are aware of it or not, every organization has one. What is company culture? Webster’s Dictionary defines culture as “the integrated pattern of human behavior that includes thought, speech, action, and artifacts and depends on man’s capacity for learning and transmitting information to succeeding generations.” In the business environment, culture is much the same. It’s a system of shared values and attitudes about how work gets done and how people and materials are affected. It is a set ofshared beliefs, practices, and assumptions that people base behavior on. A more informal definitiondefines company culture as “the way we do things around here.”However you define it, your company culture matters. It can impact hiring practices, strategy, goalalignment, motivation, control, and performance. The good news is the planning stage provides a greatopportunity to create a culture that empowers employees, drives revenues, and optimizes your future.Here’s the key. The individual who leads the company is the only one who can establish values, create aculture, and set the vision and strategic direction. As you do this, be sure to align your culture with thetype of work you do. Cultures that are right in one context can be disastrous in another. Is yours acasual, loosely organized group of developers or designers in an environment that encouragescollaboration and innovation? Or, is your culture a hard-driving sales environment that rewardscompetition and individual performance?Here’s another tip. Keep your culture agile. If it’s fluid, it can adapt to changing conditions.Many people believe strong cultures equate to strong performance. This is true—if the company ismoving in the right direction. If it isn’t, a strong culture simply fast-forwards failure. Check yourcompass. Check the strength of your culture. Make sure it supports the work you do. If it doesn’t,realign to suit your customers, your market, and your offering.Use the SWOT Analysis to Assess Your Business Status before YouDevelop Your Business Plan SWOT is an acronym for Strengths, Weaknesses, Opportunities, and Threats. It’s an assessment technique that paints a vivid picture of how your business stacks up when you consider these four factors. SWOT is a simple, popular way to gather and use information in preparing or amending your business plan. It’s also useful in solving problems, making decisions, and educating staff when change is necessary. In brief, SWOT means identifying: • Strengths: Internal factors such as expertise, innovation, resources The e-Book Edition of How to Jumpstart Your Business Training for Entrepreneurs.com Page 16
  23. 23. C H A P T E R 2 : P L A N N I N G • Weaknesses: Internal factors such as a high level of debt, labor shortage • Opportunities: External advantages such as a rapidly growing market where demand outstrips supply • Threats: Potential external risks such as competitors undercutting your pricing, natural disasters, changes in the general business environmentCalculate SWOT and you can quickly identify your venture’s pros and cons. Aligning internal strengthsand weaknesses with external opportunities and threats is essential to sound strategic planning. WithSWOT you know where you stand today and what you need to do by identifying and prioritizing theissues that will accelerate success or bring it to a screeching halt.In the planning stages of Jumpstarting your business, SWOT is essential to your business plan—especiallyif you’re looking for capital. Why? Investors appreciate any type of analysis that minimizes risk.Identify Internal and External Factors that Affect Your ProgressThe SWOT analysis builds on internal and external factors that together can impact your businesssuccess. To calculate SWOT you need to understand the factors—internal and external—that will affectyour progress.Internal factors are those within your control that take place within your business environment; forexample, you have on staff the leading experts in your field---a definite advantage. External factors aregeneral conditions and environmental factors that are outside your control; for example, you run a localcoffee shop and Starbucks is opening a store across the street.The key is to examine and identify all of these factors, quantify how they can affect your business in thelikelihood that some or all of the factors will come into play, and then develop a contingency plan.Examine each of the internal and external factors and develop reasonable responses.Internal Factors: • Operational Issue: The efficiency of your operation • Staff and Employees: The loss of a key salesperson or designer • Capacity: Resources available to match supply with demand • Cash Flow: The timely flow of revenues to pay financial obligations • Cost: Costs of Doing Business: Payroll, equipment, rent • Productivity: Ability to produce desired number of products or level of service within a given timeframe The e-Book Edition of How to Jumpstart Your Business Training for Entrepreneurs.com Page 17
  24. 24. C H A P T E R 2 : P L A N N I N G • Machine Reliability and Uptime/Downtime: Assurance that production will continue according to plan with costly delays or downtimeExternal Factors: • The General Business Environment:: Interest rates and demographics • Economic Change: A sudden deterioration in the geographic or regional market or growth in the macroeconomic climate • Industry/Market/Customer Trends • Changes in the Competitive Landscape • Technology Trends: Trends can they be used to your advantage. • Regulatory Environment: Changes that can create opportunity. • Weather Issues: If you are a tennis-pro, a painter, or a landscaper, long periods of bad weather can limit revenue-generating opportunities. • Product Availability: Materials you count on for manufacturing are suddenly impossible to obtain.Prepare Financial Projections to Reflect Realistic AssumptionsProjecting the future is a daunting proposition, with or without a crystal ball. When it comes tojumpstarting your business, though, it’s a challenge you have to face. Fortunately, your financialprojections do not have to be perfectly accurate—they just need to reflect realistic assumptions abouthow expected cash flow will service debt.Financial projections should go out three to five years, providing a "best guess" estimate of how youexpect your venture will fare financially. Investors want numbers, and they want them backed up by solidreasoning. Also known as pro-forma financial projections are required for startups, acquisitions ofexisting companies, or for expansions. When you prepare financial projections, you need to provide best-and worst-case scenarios. There are several ways to develop financial projections. You can: • Extrapolate based on historical performance. • Perform an industry analysis and profile a comparable company. • Use existing sales commitments to calculate a worst-case scenario. • Conduct market research to assess market demand for product/service. The e-Book Edition of How to Jumpstart Your Business Training for Entrepreneurs.com Page 18
  25. 25. C H A P T E R 2 : P L A N N I N G • Make projections based on your own expectations and assumptions.Whatever method you choose, develop your pro-forma from the top down, projecting revenues againstdebt and costs like rent, labor, materials, and services, demonstrating how your anticipated cash flow willoffset your company’s debt.Avoid an Action Plan that Gathers Dust Creating a strategic business plan is a great first step. But if your business plan gathers dust on a shelf, its value is lost. This is where the action plan comes in. It’s the place where the rubber meets the road—the catalyst that transforms your business plan into actionable results. Your action plan sets priorities and describes the specifics of implementing your business plan. Long-term and short-term objectives should be key components of your business plan.Define your long-term objectives first and then set short-term objectives—baby steps—that break thelarger goal down into easy-to-achieve chunks. Review these mini-goals every three to six months, andkeep checking to see if you’re meeting your objectives.Use your action plan to define how you’ll operate your business on a day-to-day basis. Address issuessuch as how and when you’ll manage research and development, hire employees, serve customers, marketyour offering, publicize your company, and work with partners and vendors.Your action plan should get down to legal brass tacks as well. You need to provide detailed informationabout legal preparation and documents. Describe how you’ll obtain trademarks and licenses; rent spaceor create a home office; order, install, and maintain equipment; purchase and inventory supplies; marketyour business; and distribute products and services. In other words, your action plan turns your businessplan into a game plan that makes it real.Execute, Execute, Execute Your Action PlanYou’ve established your vision, created a business plan, secured funding, and outlined an action plan.Now it’s time to act. So how do you execute your action plan? Once you’ve identified your long andshort-term objectives, you’re ready to execute using a baby-steps approach that incrementalizes (nowthats a new word) the entire process. Want to execute your action plan in the simplest, most success-prone manner?Try this: • Create an action plan based on your business plan. • Review the action plan with your team and solicit feedback. The e-Book Edition of How to Jumpstart Your Business Training for Entrepreneurs.com Page 19
  26. 26. C H A P T E R 2 : P L A N N I N G • Agree on a strategy and a direction. • Review your long and short-term objectives. • Break the objectives down into manageable components. • Identify required tasks and prioritize them. • Begin executing against these goals, taking incremental, baby steps. • Break large tasks down into manageable short-term efforts. As each smaller goal is reached, you’ll experience a sense of accomplishment and generate momentum and confidence. • Remember—it’s not necessary to start out by attacking the most important issue if you can get some little ones out of the way first.Determine the Components or Mini-Goals of Your Action PlanYour action plan establishes your priorities, defines the tasks you need to perform, and determines arealistic timetable for accomplishing the tasks. The actual components of your plan are mini-goals thatmay or may not include the following: • Site Location: Scope out an office site or store location. Plan how you’ll set up and stock your store or small office/home office. • Legal Preparation: Prepare bylaws, patents, trademarks, licenses, employment agreements, customer contracts, and other documents. • Research and Development: Identify the research that needs to be done, list the necessary steps to develop your offering, establish your production process including the machinery, supplies and input you need, prioritize R&D initiatives, set budgets, and establish schedules. • Hiring People: Determine the new required positions, the process you’ll use to recruit and hire the expectations, compensation, benefits, hours, functions of the new employee/s. • Customer Service/Fulfillment: Determine how you will deliver your products/services to your customers. Via a reseller network? Distributors? Retail stores? Subcontracting? Map out processes/requirements and forge alliances. • Sales and Marketing: Decide how you’ll reach customers. Develop a sales and marketing plan that details marketing materials, web strategy, public relations, and brand development. Identify selling techniques, targets, regions, and client types. Create a PR plan. Develop business cards, stationery, website, and brochures. The e-Book Edition of How to Jumpstart Your Business Training for Entrepreneurs.com Page 20
  27. 27. C H A P T E R 2 : P L A N N I N G • Vendor Relations: Develop a process for selecting suppliers and managing relationships. Set expectations, develop billing rules, and agree on reporting systems. • Managing Resources: Set up systems for storing, tracking, and managing resources/inventory, software, shipping services etc. • Branding: Determine how you will brand/differentiate your company based on your value proposition. Build a platform, and determine how you will communicate a unified message across every point of contact.Set Short-term Objectives to Achieve Your Ultimate ObjectiveAs an entrepreneur, the shortest distance between you and your dream is setting basic milestones andconcrete objectives in the short and medium term.As we mentioned, short-term objectives are the bridge between your business plan and your action plan.And setting up and achieving your ultimate objective means dividing it into smaller, achievable objectives.You wouldn’t attempt to scale a mountain in a day. Nor should you attempt to achieve your long termbusiness goal at once.Instead, break down your ultimate goal into short-term objectives—incremental milestones—that you canconfidently reach and that will help you achieve your long-term goals as painlessly as possible. Here arejust a few examples of short-term objectives: • Find and rent office space. • Obtain licenses and certificate of occupancy. • Purchase and install equipment. • Hire quality employees. • Establish work schedules. • Finalize legal agreements. The e-Book Edition of How to Jumpstart Your Business Training for Entrepreneurs.com Page 21
  28. 28. C H A P T E R 2 : P L A N N I N GCase Study—Outcome John and I sat down and laid out a business plan for the company. We talked about John’s personal goals and objectives, and those he had for the company and its employees. We also crafted a mission statement, talked about the company’s strategic plan, and discussed the direction that John felt the industry was headed in the next three to five years. We then had the same discussion regarding the company that he wanted to acquire. We took a good look at the cultures of the two companies to find out how congruent they were. We also reviewed an integration/action plan that addressed important questions such as, how would the two companies merge---would they continue to coexist, or would they operate out of one facility? And, if there was a duplication of administrative effort, how could we solve this issue. John had never really considered this important issue: If he were to acquire the company, the acquisition would have to make good sense---logistically, synergistically--- even before John looked at the viability of the acquisition financially. Once he analyzed the situation, John realized that he really didn’t have the resources to take over an additional operation at the time, nor did he feel that the business would fit in culturally with his own. He did, however, confirm his intent to acquire a competitor’s company in the future. This exercise allowed us to document and formalize the company’s goals and objectives. It also provided a roadmap for investigating other opportunities. Six months later, John made his first acquisition with the bank’s blessing. Looking back on the entire experience, John realized that, if he had gone through with the first acquisition, it could very easily have put him out of business. The e-Book Edition of How to Jumpstart Your Business Training for Entrepreneurs.com Page 22
  29. 29. C H A P T E R 2 : P L A N N I N G Why Stop Here… 7 More Information-Packed Chapters Await You… Order and immediately download this 120 page e-Book Edition of How to Jumpstart Your Business for $9.90 today! It’s Simply the Best Investment You Can Make! Available in pdf, epub, or mobi formats ORDER NOW The e-Book Edition of How to Jumpstart Your Business Training for Entrepreneurs.com Page 23
  30. 30. R E F E R E N C E S ReferencesReferencesGreat Resources are the Backbone of any Great Book RChapter 2: Planning Corporate Culture and Performance, John P. Kotter Corporate Cultures, Terence E. Deal, and Allan A. Kennedy The Successful Business Plan, Secrets, and Strategies, Eugene Kleiner The Entrepreneur Guidebook for Success, Kaleil Isaza Tuzman The Entrepreneur’s Guide to Finance and Business: Wealth Creation Techniques for Growing a Business, Steve Rogers Beyond Entrepreneurship, Turning your business into an enduring greatcompany James C. Collins, William C. LazierEntrepreneur Magazine, an Introduction to Business Plans, Laura Tiffany, March 2001Chapter 3: Formation Essentials of Entrepreneurship, What it takes to create successful enterprises, collaboration of 60 experts The Entrepreneurial Mindset, Strategies for continuously creating opportunity in an age of uncertainty, Rita Gunther McGrath Growing Pains, Transitioning from an Entrepreneurship to a Professionally Managed Firm, Eric G. Flamholtz, and Yvonne Randle SBA: Entrepreneurial Risk and Market Entry, a Working Paper by Brian Wu,The Wharton School, University of Pennsylvania and Anne Marie Knott, Robert H. Smith School ofBusiness, U of Maryland, Vienna, VirginiaSBA: The Small Business Economy, a Report to the President, 2004Entrepreneur Magazine, Think like an Entrepreneur, Michael Gerber, December 2004 The e-Book Edition of How to Jumpstart Your Business Training for Entrepreneurs.com Page 24
  31. 31. R E F E R E N C E SChapter 4: Transitions Business Plans that Win Venture Capital, Terence P. McGarty Beyond Entrepreneurship: Turning Your Business into an Enduring Great Company James C. Collins, William C. Lazier Growing Pains: Transitioning from an Entrepreneurship to a Professionally Managed Firm, Eric G. Flamholtz and Yvonne Randle Entrepreneur Magazine, Operations, and Management Plans Surfing the Edge of Chaos, Richard Pascale, Mark Milleman, Linda GiojaChapter 5: Finance and Accounting The Entrepreneur’s Guide to Finance and Business. Wealth Creation Techniques for Growing a Business, Steve Rogers Venture Capital, The Definitive Guide for Entrepreneurs, Investors, and Practitioners, Joel Cardis, Sam Kirschner, Stan Richelson, Jason Kirschner, Hildy Richelson Fundamentals of Venture Capital, Joseph W. Bartlett Accounting and Finance for Your Small Business, E. James Burton andSteven M. BraggAccounting and Finance Fundamentals for Non-financial Executives, Robert Rachlin and Allen SweenyStart Your Own Business: The Only Start-Up Book You’ll Ever Need, Rieva Lesonsky and the Staff ofEntrepreneur Magazine, © 1998 Entrepreneur PressEntrepreneur Magazine: How to Better Manage Your Cash Flow, December 2003Entrepreneur Magazine: The Truth about Venture Capital, Paul De Ceglei, February 2000Ohio State University Fact Sheet, Community Development, 700 Ackerman Road, Suite 235, Columbus, OH 43202-1578Chapter 6: Stakeholders Leadership and Self-Deception, Getting Out of the Box, The Arbinger Institute Get Them on Your Side, Samuel B. Bacharach Entrepreneurial Transitions: From Entrepreneurial Genius to Visionary Leader, Roy Cammarano Growing Pains, Transitioning from an Entrepreneurship to a Professionally Managed Firm, Eric G. Glamholtz & Yvonne Randle Beyond Entrepreneurship: Turning Your Business into an Enduring Great Company, James C. Collins, William C. LazierThe Entrepreneur’s Success Kit, Kaleil Isaza TuzmanThinking Out of the Box: How to Market Your Company into the Future, Kathy C. Yohalem, February 1997, JohnWiley & SonsEntrepreneur Magazine, Keep Your Banker Informed, Keith Lowe, April 2002 The e-Book Edition of How to Jumpstart Your Business Training for Entrepreneurs.com Page 25
  32. 32. R E F E R E N C E SChapter 7: Operations Execution, The Discipline of Getting Things Done, Larry Bossidy and Ram Charan The Ultimate Small Business Guide, a Resource for Startups and Growing Businesses The E Myth Revisited, Why Most Small Businesses Don’t Work and What to Do About It, Michael E. Gerber Growing Pains, Transitioning from an Entrepreneurship to a ProfessionallyManaged Firm, Eric G. Glamholtz & Yvonne RandleBeyond Entrepreneurship: Turning Your Business into an Enduring Great Company, James C. Collins,William C. LazierThe Entrepreneur’s Success Kit, Kaleil Isaza TuzmanEntrepreneur Magazine, Selecting the Best Manager, David G. Javitch. July 4, 2005Entrepreneur Magazine, Top-Heavy Nichole L. Torres, January 2004,Entrepreneur Magazine, Owning Up, Mark Henrick, August 2003Entrepreneur Magazine, How Efficient is Your Workspace? Sue McMillin, July 2002Entrepreneur Magazine, To Lease or not to lease, Jill Amadio, February 1998Chapter 8: Sales and Marketing The Ultimate Small Business Guide, a Resource for Startups and Growing Businesses The Entrepreneur’s Guide to Finance and Business, Wealth Creation Techniques for Growing a Business, Steven Rogers The E Myth Revisited, Why Most Small Businesses Don’t Work and What to Do About It, Michael E. Gerber Growing Pains, Transitioning from an Entrepreneurship to a ProfessionallyManaged Firm, Eric G. Glamholtz & Yvonne RandleThe Entrepreneur’s Success Kit, Kaleil Isaza TuzmanThe Stakeholder Strategy, Profiting from Collaborative Business Relationship, Ann SvendsenManaging Customer Relationships: A Strategic Framework, Don Peppers, Martha RogersSurfing on the Edge of Chaos, Richard Pascale, Mark Millemann and Linda GiojaCustomer Relationship Management (The Briefcase Book Series) Kristin L. Anderson, Carol J. KerrEntrepreneur Magazine, The Middle of the Road: Strike a perfect balance when setting your prices tomake a higher profit, Jacquelyn Lynn, December 1996Entrepreneur Magazine, Building Customer Relationships, January 2001, Kim T. GordonEntrepreneur Magazine, Your community needs you, but what—and—where is it? February 2001Entrepreneur Magazine. Learn Your Unique Selling Proposition.Every business has something that makes it unique February 04, 2002 The e-Book Edition of How to Jumpstart Your Business Training for Entrepreneurs.com Page 26
  33. 33. R E F E R E N C E SChapter 9: Resources The Ultimate Small Business Guide, a Resource for Startups and Growing Businesses Entrepreneur Magazine, Help for Business Owners, February 11, 2002, Jane Applegate Business Start-Ups Magazine, Team Effort: Put Uncle Sam in your corner with free help from the SBA April 1998, Karen Roy Why Stop Here… Implement Jumpstart Business Tactics in Your Business with the Personal Help of Terry H. Hill as Your Business Mentor… Check out One-to-One Mentoring with Terry! Or, learn more about Terrys Start-Smart Mentoring Groups! The e-Book Edition of How to Jumpstart Your Business Training for Entrepreneurs.com Page 27
  34. 34. P R O F I L E – T E R R Y H . H I L L ProfileTerry H. Hill THHAn Entrepreneurs Mentor Terry H. Hill is the founder and Managing Partner of Legacy Associates, Inc. a small business consulting services firm and its parent company, Training for Entrepreneurs.com. Mr. Hill is a veteran chief executive. His three decades of work with business owners of privately-held companies has been instrumental in helping them deal with the challenges they face in each stage of their business life cycle. Mr. Hill is the author of the book, How to Jumpstart Your Business, a practical guide for down-to-earth answers to questions and challenges that every business owner faces. Mr. Hillwrites regularly about a variety of business topics. His writings appear in the firms weekly Business InsightsBlog and Tech for Business Blog as well as numerous other business publications.Mr. Hill is the co-creator of and the mentor/instructor for the Training for Entrepreneurs.comsuite of e-Learning business soft skills training courses and virtual mentoring programs.The TFE Get-Business-Smart Series of Group Mentoring Programs includes: The Start-SmartMentoring Program is for individuals who need guidance with starting their new business; Grow-SmartMentoring Program is for individuals who need guidance with growing their existing business; Plan-SmartMentoring Program is for individuals who want to learn and implement practice-proven strategic planning,thinking, and managing methods; Brand-Smart Mentoring Program is for individuals who want to learn andincorporate high-impact branding and marketing strategies that will generate a rich flow of new businessopportunities; and Exit-Smart Mentoring Program is for business owners who want to maximizes the valueof their business at the time of their exit.The GO SAMMY Strategy System™ is a strategy development and implementation program forbusiness owners and executives who aspire to achieve extraordinary results. The programprovides a set of critical and tactical actions that helps owners/executives make better decisions. The GOSAMMY Strategy System™ focuses on combining “practice-proven” strategic planning, thinking, andmanaging methods with new insights and ideas for break-away-from-business-as-usual strategies. TheGO SAMMY™ key strategies are based on time-tested strategic planning approaches, on decades ofhands-on entrepreneurial experiences, and on best-in-class business practices. GO SAMMY StrategySystem™ training is available via the TFE Plan-Smart Virtual Mentoring Program. The weekly series of virtualmentoring sessions are packed with "no-nonsense" tips, tools, and tactics that will help you to implementthe key strategies of GO Sammy in your business. The e-Book Edition of How to Jumpstart Your Business Training for Entrepreneurs.com Page 28
  35. 35. P R O F I L E – T E R R R Y H . H I L LThe YOU ADVANTAGE Marketing System™ is a highly-effective marketing process thatoptimizes an individual’s own unique business acumen and leverages his existing knowledge,prior experiences, and personal/business contacts in such a way as to position him as an expertin their particular field. We call this process — establishing you as the expert – The YOU Factor. The YOU Factor influences and encourages people to want to do business with you. Every week,throughout the TFE Brand-Smart Virtual Mentoring Program, Terry will demonstrate how to incorporatehigh-impact YOU-ADVANTAGE Marketing System™ strategies that will generate a rich flow of newbusiness opportunities. Terry expertly guides you in the use of the most effective marketing tools andtactics that can help your business venture not only survive, but also grow! The e-Book Edition of How to Jumpstart Your Business Training for Entrepreneurs.com Page 29
  36. 36. P R O F I L E – T R A I N I N G F O R E N T R E P R E N E U R S . C O M ProfileTraining for Entrepreneurs.com TFEAn Online Small Business Community for Business SkillsTraining, Virtual Mentoring, and Networking Opportunities Training for Entrepreneurs.com (TFE) is a knowledge and relationship development website of Legacy Associates, Inc. Legacy Associates is a small business consulting and management services firm located in Lakewood Ranch, Florida, USA. TFE serves the world-wide web in three primary areas: Facilitators of a web-based entrepreneurial development community, Creators & Publishers of educational content for small businesses, and Trainers & Mentors of online e-Learning courses and virtual mentoring programs.As Facilitators of a Web-based Entrepreneurial Development Community, Training forEntrepreneurs.com (TFE) manages an online small business resource center and membershipcommunity that affords its members access to digital content that is presented in text, graphics,audio, and video formats. The TFE online community of paid members are entitled to secured-access(password-protected) to the TFE Content Vault that contains an assortment of valuable content(assessment tools, audio and video clips, special reports, white papers, article library, premium blog, andpodcast content). Additionally, TFE manages the members community discussion forums -- TFEBusiness Chat Forums as well as the communitys online business directory TFE Marketplace Directory.As Publishers of Educational Content for Small Businesses, Training for Entrepreneurs.com(TFE) creates, develops, and publishes business informational and instructional content whichincludes: articles and insights for both the Business Insights Blog and Tech for Business Blog; pre-recordedaudio programs for the Business Talk Podcast Series; live instructional presentations for the Being at the Top ofYour Game Webinar Series; instructor-narrated, self-paced e-Learning courses for the TFE Skills TrainingCourses; instructional material for TFE Virtual Classroom Mentoring Programs; and the Select Insider MembersNewsletter.As Trainers & Mentors of Online e-Learning Courses and Virtual Mentoring Programs, Trainingfor Entrepreneurs.com (TFE) trainers teach a series of online, interactive business soft skillstraining and certification e-Learning courses in personal productivity, leadership skills, time management,interpersonal skills, creative problem solving, managing conflict, project management, strategic management, presentationskills, change management, customer driven organization, and negotiation skills. The e-Book Edition of How to Jumpstart Your Business Training for Entrepreneurs.com Page 30