So you’ve got some ideas, a decent prototype, and a couple customers to boot…now what? Sadly, many would-be entrepreneurs fail at running a business before they even start. The complexity of a business plan, lack of funding, and an army of competitors all create a standstill that causes those flames of business freedom to flicker. So how do you overcome failure to launch? Get your ideas in traction by following these steps to success.
RESEARCH
Take the time to thoroughly explore your product and then define your niche. Read books published regarding your industry, attend tradeshows, visit company websites, join trade organizations, and network at industry events. Websites like The Tradeshow News Network (www.tsnn.com) can help you find industry events of interest. Research the market potential, resistance to entry, competitor biographies, and pricing strategies utilized by similar companies. Dig deep and focus on thinking “out of the box” – how can you build it better, smarter, or cheaper? Knowing the history of existing companies in your industry will help you learn from their mistakes and capitalize on their experience. This education is incredibly valuable and will help create the foundation for your business.
PLAN
Think of a business plan as a “how to” manual for running your business. If you’re a first-timer, start with a Business Plan Tool that will guide you through the process. There are quite a few companies that provide such software and you can always use the free template available at SCORE (www.score.org) to get you started. The goal is to take the research you’ve accumulated from Step 1 and use it to create a roadmap for success. You will outline key strategies for the company including defining the product, competitors, resistance to market entry, customer demographic, marketing plan, operations, and the organizational chart for management. Determine your start-up timeline and set benchmarks to help measure your success as you move along. As you work on your timeline, don’t forget to include an exit strategy as your final stage of the company’s life cycle. Do you intend to sell the company in five years or pass it on to your children when they turn thirty? The future will always be uncertain, but try to be as specific as possible regarding the timeframe and conditions for sale. A vital portion of the business plan will be the financials. Plan your funding, sales goals, breakeven analysis, and projected cash flow for at least 2 years. If you are pursuing outside investors or business loans to get started, be sure your numbers are accurate enough to pass scrutiny. Spend some time addressing possible setbacks and detail the solutions based off the findings of your research. The goal is to solve potential problems on paper so they don’t threaten to derail your business once you launch. Setbacks are a fact of life. A solid business plan gives you stability and the peace of mind you need to stay the course. Instead of panicking when setbacks arise, you can just consult the “how to” manual and troubleshoot.
EXECUTE
Once you have the business plan, funding, and timeline in place, you are ready to launch. This is a nerve-wracking and exhilarating time for the business and the most important thing you can do is stay the course. Don’t improvise new strategies or add on new products and services-just execute the plan. Maintain focus and aim for the benchmarks you’ve set for yourself. Keep a close eye on ratios regarding profitability, debt-to-equity, and inventory turnover. What happens if you are hitting your benchmarks sooner than expected? Use your time to network and strengthen ties with key professionals such as Accountants, Lawyers, and fellow Business owners. These relationships will become increasingly vital as the business grows. Look for ways to cut costs, work on gathering key prospects, and spend time with existing customers brainstorming ways to fine tune your product. If you are not hitting the benchmarks as you forecasted, start looking for answers. Are there internal or external factors that are stalling your success? Examples of internal factors include health problems, family issues, or the realization that entrepreneurship might not be for you. External factors include a weak economy, weather emergencies, or vendor problems that delay your product deliveries. Once you’ve identified the factors keeping you from attaining your goals, start outlining the solutions. Now is the time to get creative and seek out potential resources and contacts that can help you achieve those benchmarks.
THINK BIG
You have more than traction at this point, you have a business. If your plan has succeeded, it’s a business that encourages you to start each day with a smile. Now is the time to start looking for additional revenue streams, licensing deals, or potential partnerships that will help catapult your company to the next level. If you are a wholesale business, consider selling retail or start distribution overseas. If you have a retail business, look for ways to expand outside your geographic area, increase your web presence, or find ways to increase your local presence. This is a new phase for the business and it requires a new business plan. Look for the strengths and weaknesses in your existing plan and update it to reflect your new vision. Seek out ways to delve deeper into your industry, continue your business education, or find ways to give back to your community and family.
BUILD VALUE
Key factors such as business self-sufficiency, brand strength, and intellectual property all join to create lasting value for your company. Ask yourself, could the company operate for a month without me? If the answer is no, find out why and initiate new procedures to limit your involvement. Solidify your operations and evaluate your current staff to ensure strong leaders are in place. Another key factor to building value is brand strength. This includes your consumer base, market position, and the prospects and key contacts you’ve accumulated while growing your company. Frequent write-ups in national publications and a rolodex full of blue-chip customers all serve to add value to your company. Last -but certainly not least, your intellectual property is a key factor in building value. Intellectual property consists of your trademarks, patents and copyrights created to protect your company’s products, services, and operations. Ensure that these trade secrets are protected by Confidentiality and Non-Disclosure agreements signed by everyone and anyone who comes in contact with proprietary company information. Ask a lawyer specializing in Intellectual Property Law to review these documents for accuracy. As you get all your ducks in a row, consult your plan. Now is the time to decide whether to coast along a couple years, follow your exit plan, or possibly introduce a new direction for the company. Whichever you decide, make sure you enjoy a well-deserved vacation before tackling the goals of tomorrow.
Heather Nolte is the founder and CEO of www.Glamajama.com. Glamajama creates glam-studded clothing for children- clothing they can wear “from the crib to the catwalk”. The company has been featured on The Today Show, The Early Show, Oprah, Access Hollywood, Entertainment Tonight, USA Today, Star Magazine, Parents, and Working Mother with celebrity clients including Angelina Jolie, Halle Berry, Jennifer Lopez, Angela Bassett, Christina Aguilera, Gwen Stefani, Lisa Rinna, and Jessica Alba. Contact her at [email protected]. (Watch me on CBS News)
