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The Best Business Plan for Your Business

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A well-conceived business plan does much more than merely describe what will become your business.  Your business plan must sell you first and foremost,  along with the products or services you’ll offer,  the business model you will follow,  the marketplace in which you’ll compete,  plus reasonable estimates of start-up and monthly operating expenses.  If outside funding is required,  then the plan must convince lenders or investors that you are prepared and qualified to build a significantly profitable enterprise.  A good business plan will do the following:

  • Define the business mission
  • Describe the products and services
  • Identify target customers
  • Identify and evaluate major competitors
  • Describe the business environment
  • Detail the business model
  • Describe the business strategy
  • Detail the marketing plan
  • Demonstrate how a profit will be made
  • Provide an exit strategy

Here are business plan options for three scenarios:

The Executive Summary

An Executive Summary is a condensed version of a full-dress business plan and often runs to about 5-10 pages in length.  When written well,  the Executive Summary nevertheless functions as effectively as a traditional business plan.

It is a useful tool for Freelancers who will open a consultancy and will have relatively modest start-up costs and monthly operating expenses and are savvy enough to appreciate the value of a road map to launch their venture.  It is not a business plan option for those who will approach lending institutions or investors.

The Executive Summary states the business mission,  describes the products/services,  describes the primary clients and competitors and details the business strategy,  business model,  marketing plan and relevant financial data.  To be useful,  the document must fully integrate that information and demonstrate how the business will become profitable.

The Operational Business Plan

An Operational Business Plan is produced by an existing business with several years’ performance history,  usually with a goal to either apply for business expansion capital or prepare for the sale of the company.  Operational Business Plans may also be used to upgrade and streamline how a business runs,  functioning as a guide for the management team.

The Operational Business Plan delves into great detail about production,  customers,  competitors,  the marketplace and business environment,  sales distribution channels,  management and staffing.  Historical data are available and five years of financial statements are typically included,  along with financial projections that forecast the company’s expected performance over the next three years.

The business plan to attract investors

When outside investment is sought,  it goes without saying that the potential for strong profits must be demonstrated.  The more money that is requested,  the bigger the promised profits must be and the more quickly realized.  The break-even statement,  which shows at what point in time the business will go into the black,  along with credible financial assumptions and projections,  are critical in this scenario.

If the business is an existing one,  the financial projections must appear to be attainable,  based on the five year financial history given.  Make sure that your business and personal credit scores are 700+,  or you won’t see a dime from a bank.

Venture capitalists and angel investors may be somewhat more forgiving of a less than perfect credit rating if your business concept and model are extraordinary.  Beta test the product/service and business model with target customers to verify demand for what you intend to sell and your ability to efficiently deliver the goods to the marketplace.

For VCs, the potential for big profits is king.  They are in it for the pot of gold that comes when the company goes public and stock is offered.  Angels are not totally dissimilar to VCs,  but they are drawn to an entrepreneur’s vision and passion in addition to the pay-off.  That’s why they’re called angels!

Thanks for reading,

Kim

Business Strategy , Leave a comment

What’s Up With Your Strategy?

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“The most serious mistakes are not made as a result of wrong answers.  The truly dangerous thing is asking the wrong questions”.

–Peter Drucker

Freelancer Friend,  if you are not familiar with Peter Drucker (1909-2005),  please allow me to introduce you to but a small serving of his genius.  Peter Drucker was considered the father of modern management.  In 1971,  he launched one of the nation’s first executive MBA programs for working professionals,  located at Claremont Graduate University in Claremont, CA.  From the 1940s until about 2002,  Drucker produced groundbreaking work on business practice and strategy.  He was the Big Kahuna and he wrote several Holy Grails. 

Drucker was also known to be a serious skeptic of macroeconomic theory,  believing that economists of all stripes failed to explain significant aspects of modern economies (housing bubble, anyone?).  In other words,  if the folks at the Federal Reserve had followed Drucker’s wisdom and reined in the Wall Street masters of the universe,  the world’s economy would be in much better shape today.

Recently,  I found the above quotation plus a list of reality-checking questions that every Freelancer and business owner is advised to ponder and answer at least once a year.  The questions are quite simple and would appear to be no-brainers,  yet they are surprisingly effective at revealing the business strategies that your management team would be wise to develop and implement.

The first two questions require your team to set priorities and the last two require that you assess the organization’s ability to focus on those priorities by choosing meaningful performance measurements.

1.   Who is your primary customer?

It always comes around to identifying the customer,  does it not?  Identifying the natural customers for your products and services is the ultimate make-or-break realization for all business entities,  whether one makes a few hundred dollars during winter by shoveling snow from front stairs and driveways,  or a few million dollars from running a multinational corporation.  Only when the ideal customers have been identified is it possible to develop a marketing strategy that is a guide for resource allocation (e.g., equipment or PR campaigns),  sales distribution channels,  product positioning and branding strategies,  pricing,  creation of a sales pitch,  the networking strategy,  and so on.

2.   What business performance variables are you tracking?

Whatever yardsticks you select to measure business performance,  make sure they provide an accurate assessment of what is happening.  A sharp bookkeeper or accountant,  one with a background in financial analysis,  can tell you which numbers on your profit & loss statement and balance sheet make sense for you to watch and why that is so.  Freelancers probably want to pay attention to net revenue generated,  new business,  repeat business and the number of projects contracted.

3.   What strategic boundaries have you set?

Implementing a strategy involves risk.  Any strategy could lead the business to a place where you’d rather not go.  Know your core values,  priorities and preferences.  Think about what your customers expect and will accept from your organization.  It may be that you decide to take a pass on a golden opportunity because you just don’t want to offer that service or work that hard.  As the late,  great fashion arbiter Diana Vreeland said,  elegance is refusal.

4.   What strategic uncertainties are keeping you awake at night?

The game is all about whether your strategies work and for how many quarters will they work.  Unfortunately,  there is no silver bullet that can zero in on the weaknesses of your business strategies.  At some point,  customer needs and preferences change,  technology marches forward,  or some other event compels you and your management team to reboot dearly held business assumptions and approaches.  In order to adapt successfully,  it is necessary to constantly monitor the yardsticks established in Question 2.

Thanks for reading,

Kim

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Seven Resolutions for 2011 Part 2 of 2

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Here are the remaining four resolutions that should help you construct the framework for a prosperous year.  Nothing especially novel or profound is being suggested.  To the contrary,  I’ve presented nothing that you don’t already know.  Consider these resolutions to be  a gentle reminder.  You decide which deserve follow-up. 

4.   Revisit your networking  strategy

Get the most out of networking by following a basic agenda,  one that keeps you focused on the real purpose for being there and takes the experience beyond just a random meet & greet.  This agenda works best face to face,  but it can also be used when engaging in online social networking.  The recipe is:  Get a client.  Get a referral.  Get educated.  In other words,  when you’re out there networking,  do your best to get something tangible.  At the very least,  get some information that might help you land a client or receive a referral.  Sweeten the pot for those whom you’d like to know better by offering them something of similar value,  to make helping you worth their while.  Networking flows best on a two-way street.  With this criteria  as a guide,  consider which social networking platforms you use and why you use them.  Is the ROI worth the time spent to keep up?  Next,  consider if you are participating in the right amount of face to face networking and assess the quality of your usual haunts.  How much time and money have you spent at these events and how has being in those rooms impacted your billable hours?

5.   Review your client list

Which clients pay you the most money?  Can you make that happen again this year?  From which clients might you be able to get more money?  Can you dare to raise your hourly rate or project fee for any of them?  Conversely,  which clients are more trouble than they are worth,  high maintenance headaches who do not pay enough to make up for the misery incurred?  Are there clients you should fire?

6.   Develop a prospect list

Who is your dream client?  It’s time to devise a strategy to reel in that big fish.  Identify your decision maker,  or key influencers who might get you in the door.  Maybe you know a colleague who can either make an introduction to the right person or tell you at which networking activities you could meet whom you need to meet?  Make a plan.

7.   Review professional development needs

Will enrolling in graduate school,  taking a seminar or earning a certification increase your credibility and make your services more marketable?  Is there a professional organization that would benefit you,  one that offers good peer networking and useful skills updates? Ask around.

Thanks for reading,

Kim

Business Strategy , , , 2 Comments

Seven Resolutions for 2011 Part 1 of 2

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Happy New Year!  You had to see this coming,  so here we go with the resolutions.  We’re at the top of the year and it’s a time-honored tradition to look forward and plan to succeed.  I hope the list that I’ve pulled together inspires you to get busy.

1.   Set financial goals  

Whether you’re 35 or 55,  financial goals are a must.  Establishing these goals as a Freelancer presents a  unique challenge,  because our incomes are often neither predictable nor secure.  A fickle revenue stream makes adequate planning even more of an imperative.  We must get our arms around the money thing and take as much control as possible.  Our ability to live a comfortable life throughout our lives depends on it.  The idea is to avoid going broke,  especially in the elder years.  Those with a  steadily employed spouse have a huge financial advantage,  while those who are single or married to a fellow Freelancer have more variables and hence  a more challenging mountain to climb.  Consider what you want your balance sheet to look like in five years and make an appointment to discuss your financial wish list with your accountant.

2.   Develop a budget  

You may be expert at monitoring and tracking expenses,  but developing a budget encourages one to anticipate the year’s fixed and variable financial obligations,  as well as revenue that is likely to be generated.  One budgeting objective can be to prepare for the inevitable peaks and valleys in a Freelancer’s revenue stream.  When do you typically bill the most hours and when the least?  Which annual conferences do you like to attend,  when and where are they held and what is the cost?  Where and when is it (or might it be) advantageous to advertise?  Have you been mulling over the idea of making upgrades in certain of your marketing materials?  What about your credit needs—do you need to apply for another card to help float strategic expenses,  or can you cancel one?  When can you make contributions to your retirement fund and what should that amount be?  Can you take a vacation this year,  when can you take it and how much can you spend?  The idea is to figure out how to pay for what you must do and also cover a couple of items from your wish list,  to reward yourself.

3.   Review business priorities  

Should you form a strategic partnership,  to give your business entrée to a new segment of your market?  Should you aim to sign more new clients,  or focus on obtaining repeat business from previous clients?  Or would it be wiser to try wringing more billable hours out of your current roster?  Which clients might be most amenable to which strategy?  Also,  should you do more teaching and/or speaking this year? Which institutions will benefit your reputation and client list the most?

I’ll be back to complete the list of resolutions next week. 

Thanks for reading,

Kim

Professional Development , , , 2 Comments

What if…You Change Your Mindset and Seize the Moment?

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For the umpteenth time,  we all know that business conditions are less than stellar and competition is fiercer than ever.  Everything is in flux (or seems to be),  the ground is unsteady and we all have to get comfortable with ambiguity.

But honestly,  none of this is new.  When has life not been ruled by the slings and arrows of outrageous fortune? When has life ever been safe and predictable? If you chose to get out of bed this morning,  then consider yourself a risk taker. 

Freelancers expect the earth to quake and shake.  We walk the road less traveled and we reach for the stars.  We  expect to be tested.  We know that the only way to become capable,  confident and successful leaders is to face down our fears and challenges.

Freelancers don’t make excuses,  we can’t afford to stay mired in a rut for years at a time and we know when to color outside of the lines.  We assess the big picture of the marketplace and recognize when it’s time to adjust how we fit:  when it’s time to rebrand,  enter a new market,  sharpen our message,  boost our skill set with a helpful seminar,  or forge a strategic partnership.  Freelancers know how to exit our comfort zone to keep what we do fresh, relevant and valuable in the eyes of our clients.

Still,  sometimes we need a little inspiration because alas,  we are mere mortals and cannot always dwell on Mount Olympus.  According to Bill Bartmann,  CEO of Bill Bartmann Enterprises in Tulsa, OK,  there are three behaviors that we must recognize and modify to keep ourselves in positive thinking mode and break the cycle of second-guessing and inaction that repels success.  Be mindful of the influence (for good or ill) that our mindset has on the fortunes of our business and our lives.  Remember that the glass is half  full.

1.  Awareness.  Catch yourself in the act of making excuses or resorting to defensive behavior (“But my situation is different…”) as you seek to justify why you haven’t achieved target goals.  Avoid becoming mired in negative thinking that sucks you into the self-sabotage vortex.  Remember that fear of the unknown is normal.  Realize that like Dorothy in The Wizard of Oz,  we must step outside of our comfort zone in order to learn,  grow and move forward.  The Yellow Brick Road presented many surprises as it wound its way to the Emerald City.

2.  Acknowledge challenges.  Denial of reality prevents us from overcoming obstacles.  Just  don’t allow yourself to be handcuffed by them.  Inevitably,  some possibilities will be closed to you,  yet others will be available.  You may have to work hard (and smart) to make those possibilities a reality and you might need some help to reel them in.  A Freelancer is a leader and according to Linda Hill,  professor at the Harvard Business School and co-author (with Kent Lineback) of Being the Boss (January 2011),  “Leadership is not about getting things done yourself—it’s about accomplishing things through others.”  So if your goal is somewhat beyond your grasp,  do not become overwhelmed with despair about the impossibility of it all.  Reach out to the right person.

3.  “What if…” is the phrase that encourages us to see beyond limitation and all the way to the pot of gold.  Say  “what if”  and put yourself on a positive trajectory that allows you to see or create competitive advantages that will be of great benefit.  The  “what if”  mindset is a powerful magnet for good ideas.  The glass half empty mindset is negative.  It crushes good ideas and rebuffs those who could help us realize our goals.  Instead of thinking  “What if I fail”?,  imagine  “What if I succeed”? and let your mind take it from there.

“It is not because things are difficult that we do not dare,  but because we do not dare that they are difficult”.  

–Seneca 

Thanks for reading.  I hope you’ve managed to survive and thrive this year and I hope that you’ll stop by in 2011.  I value your support.  Thanks again to those of you who’ve made comments.

Kim

Sales , , , Leave a comment

Finesse Tough Questions Like a Pro

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An important ingredient in the recipe for success in life and business is the ability to effectively resolve objections.  Nothing takes the wind out of your sails faster than getting blindsided by a thorny question about your intentions,  abilities,  products or services.

The silver-tongued devils among us,  being natural planners (OK, schemers),  always anticipate and prepare for the likely push-back that their caper of the moment might receive.  But because they take a few minutes to consider how the other side might react to their idea,  perfectly pitched and expertly crafted answers land like rose petals,  as they have their way again and again.

You’ve gotta  admire those folks.  Imitation is the sincerest form of flattery,  so let’s bestow a silver-tongued compliment and borrow a  few of their tricks,  so we can have our way with a few clients.

Identify the questions and objections that are most likely to be raised.

Organize what you’ve identified into basic  categories.  Your objective is to simplify the process by reducing the amount of preparation you must do and give clarity and focus to your responses.  You will feel more relaxed and in control because it will be easier to remember what to say.

Formulate and rehearse simple,  succinct and rational answers for each category.  Your answers should make sense separately or collectively and nothing can contradict.  In some cases,  your response may not precisely answer the question/objection,  but it must appear to do so (listen to politicians).  Think of one-size-fits-all answers for each category you’ve identified.  Ideally,  you will create a cohesive and convincing narrative that can add additional support to whatever it is you’re trying to advance or sell.

Listen carefully to questions and find the  “trigger”  word that reveals the heart of what  you must convincingly address.  Repeat the question,  to ensure that you’ve understood it and to give yourself time to reach into the right  “bucket”  and pull out a well-designed and rehearsed answer.

Project confidence as you look the questioner in the eye and respond with authority (but never defensiveness).  Jury consultants say that much of witness credibility involves body language.  Jurors apparently trust those who give good eye contact,  have good posture and do not fidget and squirm.

Respect the questioner by showing empathy for his/her viewpoint.  When I worked in sales,  I learned the  “feel,  felt,  found”  method and it goes like this: 

I understand how you might feel this way…

Occasionally,  others have also felt this way when initially evaluating…

Here’s what I’ve (or those who’ve successfully used this product) found…

As every silver-tongued devil knows,  questions or objections will eventually arise.  It’s not all bad,  actually.  The opposite of love is not hate,  but indifference.  If your client has an objection to some aspect of your concept or product,  it signals that he/she has paid attention to what you’ve said and is thinking about how your offering compares to what is being done now and if it could better meet the organizations’ needs.  The quality of your response will go a long way in either building or breaking the client’s trust in your brand.

Thanks for reading,

Kim

Administrative , , 5 Comments

Year End Tax Reducing Strategies

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President Obama’s tax plan will probably pass before Congress recesses for Christmas. The $250K + crowd can once again relax as they glide by in their Lincoln Navigators,  splashing mud on the hoi polloi.  Nevertheless,  those of us who are somewhat closer to the earth (flat on our backs financially speaking, perhaps?) still have a few defensive measures to take,  regardless of whether Bush’s tax cuts get extended by Obama and Congress.

Get the money now

In addition to giving a nice boost to your cash flow to help with Christmas shopping,  this is also a most clever way to approach clients and entice them to either pay on time,  finally make good on a late payment or even request payment a couple of weeks early.  You are not chasing money,  this is all about tax planning… Your accountant would like you to show X dollars in 2010,  for tax purposes.  The client will benefit by cleaning up accounts payable as the year ends.  That’s how you’ll phrase it when you speak to the finance director and ask that your outstanding invoices,  late or early,  get paid by 31 December.

Or, take the money later

Did you buck the trend and have an extraordinary year in 2010,  but expect less than thrilling billables in 2011?  In that case,  income deferral is your best strategy.  Mail invoices in January and sign contracts that require an up-front payment after the calendar turns.

Pump up the write-offs

If you have a few dollars available,  then stock up on office supplies before 31 December.  If you have more money,  then take advantage of the sales and purchase big-ticket items such as office furniture,  a more powerful computer,  a good camera,  or software that will help you manage business more effectively.  For example,  the right accounting software will make tax planning and business financial analysis easier.  Evaluate whether what you’re using now is sufficient for the needs of your business.

You get to choose how and when the expensive purchases will be written off,  either slowly over a period of years as depreciated assets or immediately,  by using the Section 179 deduction.  You can make that decision at the April 2011 filing.  Conversely,  if you suspect that you will come up short on deductions next year,  shop after the new year.

Review your retirement plan

If you’ve thought about establishing a Solo 401K,  do it by 31 December.  Add extra dollars to your pre-tax funded and tax-deductible SEP IRA or Solo 401K (if you’re age 50 +,  remember the catch-up contribution feature of the latter).  Exercise the profit sharing or salary deferral benefits of your Solo 401K if you’ve had a lucrative year and would like to keep some money away from the tax man for a few years.

Review your choice of business entity

Especially if you operate as a Sole Proprietor,  try to squeeze in an appointment with a business tax attorney or an accountant,  so that your financials can be reviewed and you can talk about where your business is now and what you’d like it to become in the future.  Do you envision selling your business,  or passing it to a family member? Perhaps you would be better served if you changed your business entity to either an LLC or S  Corporation.

2010 Tax Tactics

  • The health insurance deduction for Freelancers,  including Sole Proprietors,  LLC members (single or group),  general partners and S  Corporations (single or group and owning 2% or more of the stock),  will reduce taxes owed on income generated by self-employment and also the amount of self-employment tax owed.  Health insurance premiums are 100%  tax deductible if one is self-employed and does not participate in  a group health insurance plan.  Health plan premiums to insure your spouse and dependent children are also fully deductible.  However,  your business must show a Schedule C profit in order to claim this tax benefit.  Businesses that show a loss will not be eligible for this deduction.
  • Those launching a new business venture in 2010 will have a more generous start-up expense deduction of $10,000.00 ($5,000.00 is the usual limit).  File your registration paperwork toute de suite.
  • The Section 179 deduction has been increased to $500K for 2010 (and 2011).  Maybe you need commercial property for your business,  or a company vehicle or two?
  • If you’ve been thinking about hiring an employee and can find someone good within two weeks,  a one-time hiring credit can be taken in 2011 for an employee hired by 31 December, 2010.  The tax credit will equal 6.2%  of wages paid,  not to exceed $1000.00,  for each employee who is retained for one full year.  Your new employee(s) must have been either unemployed for the 60 days that preceded the hire or underemployed,  having worked a maximum of 40 hours in the 60 days preceding the hire.  Family members hired are ineligible for the new hire tax credit.

Thanks for reading,

Kim

 

Survival Strategies , , Leave a comment

Ask and You Might Receive

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Nearly all Freelancers are feeling the pain of the long slog through the sluggish economy.  Merely treading water is now considered a victory.  Even those fortunate  enough to have maintained robust billings are sensitive to the cash flow problems of their customers and fellow business owners.  Consequently,  the time is ripe to ask for a better deal,  for everything.  You may be pleasantly surprised at what people will do to keep your business.  To get the ball rolling,  all you’ll need are some creativity and moxie.

You’ll also need to remember that your goal is to both save money and build mutually beneficial business relationships,  especially when approaching fellow Freelancers or other small business owners.  Be assertive,  but considerate and respectful.  Don’t try to squeeze someone whose business may be hurting.  Think of benefits that will accrue to the other party and communicate that as you present your proposition.

The other party will appreciate that you’ve thought of their interests as well as you own,  so no matter what,  you’re likely to be seen in a positive light.  Even if you are unable to get what you want,  you’ll never lose by asking.  As they say,  it’s just business.

  • Think about bartering products or services.  What do you sell or do that suppliers and service providers might value for their businesses?  HR or IT services?  Graphics or PR or landscaping?  You’ll never know until you ask the question and get the dialogue started.  Make sure the exchange is of equivalent perceived value,  so that no one feels short-changed.
  • If you rent an office,  begin preparations now to campaign for a rent roll-back.  Commercial space is plentiful and most landlords want to keep a good tenant.  Be sure to pay your rent on time and otherwise cast yourself in a favorable light.  Get information on rents for comparable spaces in your area and determine what would be reasonable to pay for yours in the current economic climate.  Are their problems in the building?  If so,  make a list so that you can more effectively negotiate with your landlord at lease renewal time. 
  • When it’s time to advertise,  ask for a discount (try 10 %).  You’ll be more successful if the ad is larger and/or if you place multiple ads with that publication.  Ask also if you can be notified when remnant space is available,  which will save even more money.  You must be flexible and prepared to act quickly when taking remnant advertising space.  You might even spend more than you anticipated.  In exchange,  you just might get an eye-popping half page ad for the price of a quarter page.
  • Think about the products and services that you use all the time when doing business.  Do you ship items on a regular basis?  Do you travel frequently and stay at the same hotel?  If so,  then it’s time to ask for a loyalty or volume discount.  Have information about how often you use the service/product and how much you spend at the ready,  to support your case.
  • To preserve your cash flow,  request more flexible payment terms from suppliers and service providers.  Ask for 45-60 day terms,  or ask to pay half of the balance in 30 days and the remainder at 60 days.  The other party may not love it,  but the terms may nevertheless be extended in an effort to keep you as a customer.

Thanks for reading,

Kim

Marketing , , 2 Comments

Diversify Under Your Brand Umbrella

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“Show me a company with more than 10 % of its business with one customer or more than half of its business in one industry and I’ll show you a company at risk of being (adversely) impacted by one company or one industry.”

Paul Weber,  CEO Advertising Group    Kansas City, MO

In the Freelancer’s favorite dream,  we somehow manage to sign a nice group of steady clients who all offer multi-week projects that carry us smoothly through the year.  We smile as we sign our contracts and deposit our checks…

In the rude awakening that is the  “new normal”  economy,  however,  the realization of our dream is slipping further from our grasp.  Client behavior is more fickle than ever and outrageous fortune can oh,  so easily snatch a good account away from us,  no matter how well we work with the prime contact or how long the association.

A departmental  shake-up can cause  someone new to enter the Garden of Eden,  who will cast us out and bring in their own hand-picked specialist.  Other times,  industry changes,  shifting organizational priorities or even a technology upgrade can render our services obsolete. 

Knowing our primary customer groups and industries where our services are most welcome is essential branding knowledge for every Freelancer.  Nevertheless,  underneath the umbrella of your brand,  it is wise to keep eyes,  ears and mind open for new sectors of enterprise.  Where else might you find an open door?

I liken it to cross-training in fitness:  participating in different activities expands our competencies,  guards against boredom and makes us less vulnerable to injury.  Cross-training makes us  stronger,  more versatile and ultimately,  healthier.  Under the umbrella of fitness,  it is possible to run,  swim,  bike,  row,  ride the elliptical,  weight train,  core train and practice yoga.  It is wise to apply that principle to your body and your business.

Here are five activities that will help you to apply the cross-training principle to your business and help you to diversify your client base:

1.   Cold call  by reaching out to clients you haven’t worked with in a while or re-approaching prospects who liked your services but weren’t ready to take you on at the time.

2.   Energize your PR  by sending out press releases that announce your speaking or teaching engagements to media followed by clients that you want to reach.   Get involved with an event sponsored by a local business or business association and send press releases to your targeted media outlets.  Remember to make follow-up phone calls and create an opportunity to develop relationships with the media along with the participating business owners.

3.   Network face to face  and meet people.  Approach new contacts with the mindset of helping them to achieve their objectives by making introductions and sharing information.  Your generosity can pay off in referrals,  no doubt to new clients and possibly new industries.

4.   Collaborate  with complementary businesses to broaden or deepen your professional reach and get introduced to new clients or industries.

5.   Volunteer  for a cause that resonates with you or join the local Rotary Club.  Your network of professional relationships will increase,  others will see your expertise in action as you apply your talents to various projects and referrals may eventually come your way,  giving you entrée to new clients and industries.

Thanks for reading,

Kim

Business Strategy , , , Leave a comment

Go to the Front of the Pack

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I’m a little bit of an egghead and every once in a while I like to read a good study,  to keep myself current,  or even ahead of the curve,  on matters of health,  business or anything else that catches my eye.  Recently,  I read an interesting study on strategic competitive positioning,  a survey study done this year at Babson College’s Babson Executive Education.

Lead author H. James Wilson competes in triathlons and he used those competitions and their participants as the study framework.  Triathletes assess competitors in a clean and simple fashion:  who is Front of the Pack,  Middle of the Pack or Back of the Pack?  The first two groups are ranked as actual competitors and the latter is seen primarily as new to the triathlon scene and nothing to worry about.  MOPs and BOPs have one goal and that is to improve their time in every event they enter and move up to the FOP.

Wilson applied the FOP,  MOP and BOP classifications to 300+  global companies that had recently reported facing intense competition within their respective industries.  He segmented the companies as follows

  • FOP if they achieved greater than 15%  annual revenue growth in FY09  (5%,  16 companies)
  • MOP if they achieved 1-15%  annual revenue growth in FY09 (48%,  145 companies)
  • BOP if they showed flat or declining revenues in FY09 (47%,  144 companies)

The essential question of strategy is,  are you heading in the right direction?  Wilson knew that the FOPs were doing more than a few things right and to get to the heart of it,  he analyzed the FOPs and identified three ways in which they outpace the also-rans.  He then developed the following survey questions based on those strengths.

Wilson’s data indicate that if you can answer yes to each of the survey questions,  you’re on your way to the FOP.  How do you stack up?  Something to think about.

1.  Are you/is your company becoming more effective at meeting the needs of clients/customers?

Despite the economic downturn that spawned the planet-wide recession (depression?),  FOPs have maintained the trust,  confidence,  loyalty and dollars of their customers.  FOPs understand what customers want and they are better at anticipating future needs and trends.  They put resources into keeping a finger on the pulse of the customer and they know what resonates.  FOPs are proactive in market research and customer outreach.

2.  Have you/has your company recently implemented a significant innovation campaign or launched numerous small-scale innovation pilots?

Brainstorming ideas for new services,  fresh approaches,  an innovative marketing campaign or self-development plans is an important beginning.  It is always necessary to think things through,  examine the big picture and weigh the possible outcomes of your actions.  Just remember that  “implement”  and  “launch”  are the key words.  How many good plans have you left to languish on the drawing board?  FOPs understand that results come from deeds,  not words.

3.  Are you/is your company becoming more collaborative with other Freelancer colleagues/other organizations?

High levels of cross-company interactions distinguish FOPs more than any other factor studied.  FOPs are also more likely to inform those in their network about business opportunities.  As a result,  FOPs receive the benefits of reciprocity more than most,  when referrals come their way.  Think of  how you might include selected non-competing colleagues in business opportunities that would be mutually beneficial.  Perhaps this is the smartest way to scoop bigger contracts for both?  Plus,  you’ll gain exposure to another’s business methods and perspectives and that information will make you even more savvy and competitive.

Thanks for reading and Happy Thanksgiving,

Kim