Part III – How Ready Are You To Become A Business Owner?

This is the third and final part of a series of articles designed to help Entrepreneur’s understand the dynamics of starting and owning a business. In Part I you prepared mentally and emotionally, in Part II you prepared by beginning to think your idea through and determining your support base. Part III will tie all the pieces together and set you on the course of developing your business planning tools.

Mapping the Path to Fruition

Now that you have some idea what you are getting into it is time to get started. “Mapping the Path” means going from point A (starting) to point B (business fruition). Doing so requires you to “Determine Your Objective(s)”, set out a “Plan of Action” to accomplish the objective(s), and Change Management.

Determining your objective(s):  

  • Are you looking for a lifestyle business (pays the bills and allows you to live comfortably while maintaining your other interests and lifestyle)? (Revenues < 5 million/yr)
    • Professional Practices
    • Small shops
    • Smaller service organizations
    • Home based businesses
    • Internet based business
    • Franchises
  • Are you trying to create a high value enterprise? (> $5 million a year)
    • New technologies
    • Breakthrough or Disruptive Technologies
    • Larger service based organizations
    • Conglomeration
    • Biotech/medical device
    • Blue Ocean markets
  • What is your ‘Exit Strategy”
    • Retirement
    • Sell entity
    • Merger/ acquisition
    • Family legacy 

Suggested readings from The Entrepreneur’s Advisor prior blogs regarding “Home Based Businesses” and “High Value Ventures

 Setting Out a Plan of Action

There is not any preset planning that can be done or purchased to guarantee success. However, a well constructed plan of action will increase your chances.  I have specifically avoided using the term “Business Plan” as a business plan is simply a tool that is part of your “Plan of Action”

Plan of Action components – “What Gets Measured Gets Done” 

  • 30/60/90/180 day action plan
    • Determine start resources (money, people, research to be done)
    • Business Plan **
      • Simple – not normally used for raising capital
      • Complex – Can be used to raise capital
      • True – dynamic – constantly changing 

**  See prior blog“Finding Funding for Your Venture” for do’s, don’ts and how to’s.

  • Networking    
  • Revisions
  •  2nd 30/60/90/180 day action plan – starting, buying, growing the business
  • Annual and 5 year plans

You can only do so much planning. At some point you need to start the venture process. One will quickly find out that anything that can go wrong probably will go wrong. Expenses are almost always higher than anticipated, revenues or investors are less than expected and the entire movement seems to grind to a halt for no apparent reason.  So what can you do?

Your options are:

  • Quit
  • Have a scotch
  • Have a second drink
  • Understand than the fix can be found under the super secret section called “Change Management”.  

 Change Management:

Change Management is a term we are using to describe the need for flexibility and innovation management.  It is crucial that effective change techniques be in place from the very beginning. A growing number of successful ventures have found that their Board of Advisors often can provide this direction when utilized properly.

Flexibility is used here to describe the ability to recognize that change is needed and a willingness to change any and all possible negative influences impeding the movement of the venture. This includes but is not limited to: 

  • Adjusting the Burn Rate of the organization
  • Reallocation (changes) of equity and debt equity
  • Exploring new applications if technology is involved
  • Removal of ineffective staff
  • Adjusting your exit strategy
  • Re-engineering operations
  • Understanding your workflow
  • Rewriting the plan

 Innovation management refers to the ability to:

  • Trying something new, if something is not working then address the issue. Issues do not go away on their own. Create your own solution.
  • If Technology is involved – can you partner with a competitor, license or leverage your IP to gain access to resources such as money and knowledge
  • Always have a Plan B especially for fundraising

Sound like a plan? Just remember that change management is an expense that needs to be accounted for. Your plan must have the financial muscle to accommodate unexpected changes. Failure to do will result in a very frustrating experience.

The Entrepreneur’s Advisor™ is unique in their ability to assist new ventures. Our understanding of the emotional rollercoaster, the details of starting a business, the experiences of running a business, change management  and a passion for what we do separates us from others because “We have been there and done that”. Our innovative Pay-As-You-Go” program is designed to be a sounding board for start-ups. Talk to us – “We love getting our hands dirty.”

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