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Whether your customer exists in the public sector, private sector, not-for-profit, internationally or some combination thereof, the key to success is building strong business relationships. Once you’ve targeted your prospective customer you must learn as much about them as you can. The more you know, the better you will be able to determine which of your products or services best meet their specific needs, provides them with solutions, while at the same time, making a profit.
Some of the most helpful sources of information about any company are their annual report, website, news articles, television news and commercials, printed ads (including outdoor), etc. However, companies such as Hoover’s and the Library of Congress Business Reference Services provide information on companies. From these sources, and others, you will need to ascertain:
What every organization or corporation seeks in building a partnership with any supplier is to develop a long-term, mutually-beneficial relationship that would give them a competitive advantage. Potential suppliers and partners must be capable of providing quality products and services that bring value to include:
Excerpted from, "The Start of Something BIG: Your Ultimate Guide to Writing a Dynamic Business Plan."
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Successful borrowing is more than just seeking financing. In fact, borrowing money is much like a science and requires a significant amount of planning. Those who lack experience and knowledge of what financing entails will ultimately find themselves in a situation much worse than they would have by not obtaining financing at all.
The ability to secure financing when you need it is as critical to the operation of your business as a good location, the right equipment, reliable sources of materials and supplies and an adequate labor force. When seeking financing to start a business, acquire a business or expand your current operation, you will need to decide:
In order to realistically answer these questions, you will need to make an assessment of your current business situation. This is done by writing a business plan or reviewing every aspect of your current one. Both the financial and marketing sections of your business plan can provide you with projections and assumptions that will support your funding needs. Excerpted from, "The Start of Something BIG: Your Ultimate Guide to Writing a Dynamic Business Plan." A strategic alliance is defined as a partnership between two or more companies. This form of business has become a more viable, cost effective and efficient way to meet internal growth objectives. More and more companies are relying on strategic alliances as opposed to mergers or acquisitions. The purpose of forming an alliance includes, but is not limited, to:
While this form of business growth has been proven successful in many instances, implementation doesn’t come without difficulties. Research and planning are key critical elements that can mitigate problems that may arise. But to achieve success, you must begin by:
Excerpted from, "The Start of Something BIG: Your Ultimate Guide to Writing a Dynamic Business Plan." Before moving into any market, the first step is to research it thoroughly. An infinite amount of market information exists on every kind of business, industry, product, service, etc. to assist you in the development, growth or expansion of your business and help you compete. Demographic and geographic information can aid you in locating your customer, understanding buying habits and identifying your competitors. These resources include:
Excerpted from, "The Start of Something BIG: Your Ultimate Guide to Writing a Dynamic Business Plan." Understand that the legal structure of the business will dictate how the transfer will be carried out. If the business is a sole proprietorship, the business may be transferred to a capable family member as a gift through provisions in the proprietor’s will or by a sale provided through a prearranged purchase agreement effective at death. If neither of these are an option, then the business must be sold, merged, acquired, or liquidated.
If the business is a partnership, unless there is a written agreement to the contrary, the death of a partner automatically dissolves the business. In the absence of a partner, the surviving partners have no rights to the purchase of the deceased partner’s interest. The surviving partners may then act as liquidating partners. Another option would be for the surviving partners to reorganize the partnership by taking heirs into the partnership, having heirs accept a new partner, selling the deceased’s interest to the heirs or buying out the heirs. And finally, if the business is a corporation where the deceased has been active in the operation (pertains to a closely-held corporation), the family may retain stock interest. If the heirs have a majority interest, they may choose to become personally involved in the management in order to receive income. If the business is to continue, some or all of the following documents and/or agreements must be prepared with explicit details of how the transfer will be executed:
Excerpted from, "The Start of Something BIG: Your Ultimate Guide to Writing a Dynamic Business Plan." Most business owners don’t prepare a continuation plan (which is part of business succession) because they don’t like to think about their own mortality. In the unlikely event either of these facts of life listed above occur, it’s not always necessary for the business to close. But if the business is to continue following the departure of an owner or key person, there must be plan to detail how that will happen.
Failing to prepare a business continuation plan can have a devastating effect on those left behind to manage the operations. Remaining owners of the company are put in a position of trying to figure out what the future of the company will be while dealing with a distressing loss when these issues should have been thought out in the beginning. As part of the plans for continuation, decisions need to be made as to how the business will continue. This requires consideration of how the ownership interest of the departing owner will be handled, what will be the source of income for their family, and what is the direction for the company. These decisions should include, but not be limited to:
Excerpted from, "The Start of Something BIG: Your Ultimate Guide to Writing a Dynamic Business Plan." Death, disability, divorce or retirement of owner(s) or key person(s), and transferring a business is a fact of life. Decisions relating to how or if the business will continue, be transferred, sold, merged, acquired or liquidated when either of these events occur should be addressed at the start of the business planning process. This is known as succession planning and is designed to plan for an exit when closing or transferring a business, and to mitigate conflicts that can arise when it becomes necessary to do so.
Just as strategic and long range planning are vital to the future success of your business, succession planning is equally important in that it provides for an exit that will not leave heirs saddled with a huge tax bill or will keep your business moving forward. No business plan is complete without a succession plan. Unfortunately, many business owners fail to recognize the significance of what could happen in the absence of an owner or key person. No one likes to think in terms of when it will end, but at least being prepared helps to ease the pain. In addition, succession can be the determining factor as to whether a loan or funding is granted. Many lenders and investors want to see a succession plan as part of the financial package. The reason is that they want to know how they will be repaid or receive a return on their investment in the event transfer, sell, merger, acquisition or liquidation of the business is necessary. Whether the business is to be transferred or it continues, there are laws and regulations that dictate how that can be done. Here is another example of where the expertise of an attorney, insurance agent and accountant can be invaluable. They can advise you on the best way to handle the transfer or the continuation when the need arises from both a legal and financial standpoint. Excerpted from, "The Start of Something BIG: Your Ultimate Guide to Writing a Dynamic Business Plan." Inevitably problems will arise during the course of business. It’s not necessarily because of poor planning or no planning at all. Sometimes issues arise that are beyond the control of the business owner. Legislative, environmental, material shortages, problems with suppliers, etc. are just a few reasons why things go wrong. Problem-solving skills are a vital skill set for business owners to get back on track after issues arise.
Here are just a few steps for problem solving:
Knowing that problems will always occur (hopefully less often than so), there always needs to be a process in place to mitigate them as they occur and devise a plan to ensure they don’t recur. Obviously some issues will require more time to resolve than other issues, but the basic steps for resolution are outlined above. These are the initial steps for resolving any issue at any time. Embracing challenges is also a means of resolving them. It’s difficult to face challenges head on, but the way they get resolved is to do exactly that. So often problems look much bigger and greater than they actually are. Once you have decided that you are confronted with an issue that could potentially destroy or at least derail your business, figuring out how to solve the problem will keep you moving forward. The old adage, “you only fail if you quit” is a very valid statement. As you continue to work towards a resolution to any problem that may arise in your business, you should not consider this a defeat. Even if a problem is the result of a bad decision made by you or top-level people in your company, it’s not the end of the world. But when it happens, you should immediately:
Excerpted from, "The Start of Something BIG: Your Ultimate Guide to Writing a Dynamic Business Plan." There is always a cost or costs to acquiring new customers. Whether you are using social media, which is for the most part free of charge, there is a cost for the time spent identifying a target market and posting your product/service information. As your business becomes better known and sales increase, you should inevitably acquire more customers. The formula for customer acquisition is:
Cost of sales and marketing expenses at a given time The number of customers acquired at that time You will always want to make sure you are prepared when the time comes to acquire more customers. Nothing is worse than having a successful marketing campaign, and being unable to provide the products/services promoted. And understanding what it costs to acquire those customers will let you know whether earning that customer was worth the resources expended. Always remember that no single promotion strategy works for everyone. Regardless of the medium you use, it need not be expensive. Promotions are ineffective when they don’t reflect the product/service for the intended audience. But whatever your campaign strategy entails, all efforts should be well understood by everyone in the company as well as customers. Excerpted from, "The Start of Something BIG: Your Ultimate Guide to Writing a Dynamic Business Plan." Your competitive advantage is the one element that separates you from your competition. It focuses on the attributes that make your products or services stand above everyone else’s. It could entail having:
Excerpted from, "The Start of Something BIG: Your Ultimate Guide to Writing a Dynamic Business Plan." |
Author
Kimberly L. Johnson is an author and business development professional specializing in business start-up and business development. Archives
May 2018
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