Your Business Plan is Fiction
Don’t get me wrong; a business plan is a useful tool. We write them for two reasons. Reason 1: It helps us as small business owners assess risk on paper so we can make an informed decision about the viability of the business. Reason 2: Financial institutions want it to assess how risky you are as a potential borrower. A business plan is fiction. It is a fabrication; a story of what could be. I often hear entrepreneurs say when pitching a business plan, “Our numbers are very conservative”. No, your numbers are not conservative. They are fiction. They have not happened yet. It is all “Pie in the Sky” thinking. By its nature, a business plan is optimistic. No one ever comes into to the bank with a business plan that shows how the business fails in nine months. Once you commence operations, all bets are off. Your business is in a constant state of flux. Customers, marketplace, and technology are continuously evolving. Your business plan needs to be continuously updated to reflect the changing business environment.
Here are some resources to help you draft your business plan:
SBA: How to Write a Business Plan
NSBDC's: Business Plans made Simple
SCORE's: Business Planning Templates and Tools
Seth Godin's: The Modern Business Plan
The Funding Roadmap: The Business Plan Reinvented
Operating Hours Sign Failure
I wanted to eat lunch at a Chinese restaurant that I have been to before. The restaurant serves its food buffet style. The food is good and so is the price; A perfect spot for a quick lunch. When I arrived at the restaurant, I was greeted by a sign on the door that said that the operating hours of the restaurant were 11am until 11pm, Monday through Friday. The time was 11:30am, clearly within their hours of operation. I was supervised to find that when I pulled on the door, the deadbolt was still locked. I looked in the tinted windows and thought at first that this restaurant had gone out of business. There was no activity to be seen. No people, no greeters - the lights were even off. Then some motion caught my eye. It was the golden lucky cat figure that the restaurant has in the waiting area. The lucky cat was waving its paw - someone had to have turned it on. Perhaps the owners of the restaurant had forgotten to open their doors or they had lost track of time. With my face pressed against the window, I scanned the interior for additional signs of life. The buffet steam tables sat in the back of the establishment and a you could note steam coming off of the heated water. There was steam, but no food. A couple standing nearby told me that they had been waiting since 11am for the anticipated opening. They had not seen anyone either. They should open soon, I thought, I sat down at an outside table under the front patio of the business. While I waited, I observed. More than a dozen potential patrons approached the restaurant in anticipation of the same quick lunch that we were hoping to eat. Each one of them did the same thing that I did: they tried the door, pointed to the sign where the operating hours were posted, and pressed their faces to the glass to see why there were incongruences between the sign and the locked door. They all saw the lucky cat just as I did. I was fascinated by the duplicate behavior and the disbelief the potential patrons had when they found the information on the door to be untrue. I decided to wait until noon to see if the place would actually get it together and open for lunch and to observe how people continued to act towards the sign on the door. Just before noon, a large family approached the door. Their behavior was identical to everyone else’s. To my surprise, a man dressed as a cook came to the door. Instead of opening the door, he made hand signals to the family that he needed more time before they were to open. The family pointed to the sign on the door in protest. They were annoyed that he would not let them in and soon left. At noon I left as planned. As I counted the people who tried to eat at this restaurant today, my count came to 15. Each of them including myself had expected to eat at the restaurant. All of us left disappointed. Those 15 people could be the profit margin for the day for that business. How many of them will post on their Facebook page a negative comment about this experience? How many will never return?
The Importance of Signs as Brand Promises
We as consumers are exposed to hundreds of signs every day. What is amazing is that we believe what we see on a sign. We take them literally at face value. We are so used to being directed that we rarely question if the information is correct. Signs are brands. A brand is a promise of an expected product or service. We all expected that the brand of this restaurant was that they were open at 11am. They were not. They lied. Their brand lied and broke the brand promise. Now the only brand promise we have is that their brand is unpredictable. Unpredictability in the marketplace does not fetch a premium price. It gets what is leftover, because that is what it deserves. No one should have to beg a business to take their money. A business should make it easy for customers to transact with them. If the business was having a problem that day, they needed to communicate that with their customers. A simple piece of paper that said "Sorry, we are opening at 12pm today" would have been sufficient. That would have preserved their brand with the 15 of us and kept their brand promise; even if we would have chosen to go elsewhere for lunch. A sign is a brand promise. Customers will hold you to your sign. It is your unwritten contract with them. Don’t break promises to your customers. This restaurant will need more than a lucky cat to help them survive if this is the way they keep their brand promise.
Photo: Steve Snodgrass, Creative Commons License, Some rights Reserved
I have had many inventors as clients that come to me for marketing assistance. They all have the same problem: the product isn’t selling. They all came up with a brilliant idea, patented it, found a manufacturer, and sunk their savings into production run of their invention. Now they are broke, sitting on a garage full of their great idea gathering dust. What is really funny is that most of the inventions seem like they would sell. They seem like wow! This is a great product! But, no one purchases the product. Sometimes the best inventions don’t sell in the marketplace. Sometimes the best product doesn’t sell. Consumers are fickle. They are taken by fads. They are predictable in one moment and erratic in the next. Even when the product is extensively tested in the marketplace there can be unpredictable results. Just ask Coca-Cola. Remember “New Coke” formula that was introduced in April 1985. It tested well in focus groups. It was abandoned 3 moths later due to 400,000 complaint letters and phone calls that Coca-Cola received from disappointed customers.
The National Export Initiative:
Double U.S. Exports in the next 5 Years
On March 11, 2010, US President Barack Obama signed an Executive Order which formed the National Export Initiative (NEI). NEI has the broad goal of improving conditions that directly affect the private sector’s ability to export. President Obama’s plan has the goal of doubling exports from US companies in the next 5 years. The NEI calls for removal of trade barriers and advocacy assistance directed especially at small businesses to help them overcome the barriers of entering new export markets.
The National Export Initiative: U.S. Priority Markets
There are several emerging market countries that the NEI has identified as priority export targets for US products. These countries include: China, India, Indonesia, Taiwan, Thailand, and Vietnam. The NEI has put together a series of videos about doing business in these markets. All of this excellent information is contained in the Federal portal for international trade: Export.gov. Visit the International Trade Administration’s YouTube Channel for over 50 webinars about doing business in regional environments.
The Trade Information Center
For additional information or general trade questions, you may contact the Trade Information Center (TIC) at: 800.872.8723 (1-800-USA-TRAD(E)), or send an email to: email@example.com The TIC operates between 8:30 AM & 6 PM EST. You can get answers to your exporting question topics including: Tariffs, International Documentation, Logistics, Free-Trade Agreements, Country-Specific regional Information, Trade Data, and General Export Information.
U.S. Export Assistance Centers
The Commercial Service has a network of U.S. Export Assistance Centers that house export and industry specialists. These centers are located in more than 100 U.S. cities and over 80 countries worldwide. These trade professionals
provide counseling and services to assist U.S. businesses in exporting their products and services. They can assist in: Assessing market potential for your product or service, develping and implementing a market enrty strategy, and identifying potential trade partners in foreign markets.
National Export Initiative Videos
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