Tim Berry’s new video talks about the basics for a good Elevator Pitch in this month’s video.
If you can’t view the video here, then check it out on our YouTube channel along with the rest of our business and marketing focused videos.
The New York Times had an article last week about how laid-off workers are taking matters into their own hands. The article talks about when, in a recession, do people start thinking about starting a company vs. just sending out resumes and trying to get a job:
Economists say that when the economy takes a dive, it is common for people to turn to their inner entrepreneur to try to make their own work. But they say that it takes months for that mentality to sink in, and that this is about the time in the economic cycle when it really starts to happen — when the formerly employed realize that traditional job searches are not working, and that they are running out of time and money.
I know there are a lot of people in this boat right now – laid off for a few months, no prospects in sight, and money is starting to run out. If you find yourself in this situation, why not think about starting a new company? What do you have to lose? Think about what skills you bring to the table, what you are REALLY good at, and figure out what services or potential products you can offer to people. It’s better than sitting around waiting for something to happen to you. Funny how people say that the harder they work, the luckier they get!
Food for thought!
Sabrina Parsons aka Mommy CEO
Did you miss Sabrina Parsons on Friday’s Business Insanity Talk Radio with Barry Moltz?
Not to worry – Listen to it here: Business Planning, Innovation and Your Career
Brian Roger of MyVenturePad.com has interviewed Palo Alto Software’s Tim Berry on a topic he loves best. Business planning.
In this interview, Tim admits, “in truth, a great product, great marketing and a genius entrepreneur can achieve success without planning.” But for the mere mortals among us, he advises, “If you don’t enjoy planning – and I mean the real planning, not the fake planning – then maybe you should keep your day job.”
You can catch the whole interview by heading over to the MyVenturePad.com website
Palo Alto Software CEO, Sabrina Parsons will be one of the guests on Friday’s Business Insanity Talk Radio with host Barry Moltz tomorrow morning.
Barry Moltz has founded and run small businesses with a great deal of success and failure for more than 15 years. This is a business radio show where we talk about all the craziness of small business. It’s that craziness that actually makes it exciting, interesting and totally unpredictable.
Sabrina, Parsons, Columnist Penelope Trunk and Advanta Bank CIO. Ami Kassar will be on hand to talk Business Planning, Innovation and Your Career.
Call-in Number: (347) 426-3202
Upcoming Show: 3/13/2009 7:00 AM
Our guest author today is Barry Moltz. Barry has founded and run small businesses with a great deal of success and failure for more than 15 years. He’s also the author of “Bounce! Failure, Resiliency and the Confidence to Achieve Your Next Great Success”. He is an enthusiastic speaker and teacher on entrepreneurship.
8 Things You Need To Start a Business During a Recession
1. Sell Painkillers. During difficult economic times, people only buy when they are in pain or have a very great need. Focus on selling the painkillers in business not vitamins. Understand who is in pain and who has the money to solve that pain. Understand who solves that pain for them now and why they will switch to you. (hint: the answer can’t always be price!)
2. Find Lunatics Like You. Business’ ideas are meaningless. It’s all in the execution which means that it’s only about people. Find the people that you want to start a business with and stick with them. Build a strong personal and professional support structure — you will need it.
3. Show Me the Customers. Forget about the fancy business plans or the extended analysis. Go out and ask prospects “Will you buy my products?” That answer will be the only one your business needs.
4. It’s Cash Flow, Stupid. Get customers to pay in advance or with cash when they buy. Start-up business is about your cash flow not profit. If you can get your customers to pay a deposit or pay you when you deliver your product your company will be stronger.
5. Pick the Niche. In the beginning, focus on being the best at delivering one thing. Don’t stretch yourself and your resources too thin.
6. Give Crazy Customer Service. Outstanding customer service, unless you are a utility company, is the only sustainable competitive advantage. Do it!
7. Be Cheap. It’s your money. Spend no dollar before its time. Find resources that are both variable and available. Don’t grow yourself broke by increasing your fixed overhead costs.
8. Don’t Bet the Farm (or any other part of your property). Many times, businesses need to evolve and change. Don’t bet all of your money on the initial vision of your company. Keep some of your money in reserve in case you need to alter your direction.
Barry Moltz
www.barrymoltz.com
Twitter: barrymoltz
I noticed this very plan-as-you-go post by Guy Kawasaki on the American Express Open Forum. What I like about it, particularly, is where Guy says “set goals” and then lists these four desirable qualities of goals:
Measurable. If a goal isn’t measurable, its unlikely you’ll achieve it. For a startup, quantifiable goals are things like shipping deadlines, downloads, and sales volume. The old line “What gets measured gets done” is true. This also has ramifications for the number of goals, because you can’t (and shouldn’t) measure everything. Three to five goals measured on a weekly basis are plenty.
Achievable. Take your conservative forecasts for these goals and multiply them by 10 percent; then use that as your goal. For example, if you think you’ll easily sell a million units in the first year, set your goal at 100,000 units. There is nothing more demoralizing than setting a conservative goal and falling short; instead take 10 percent of your forecast, make this your goal, and blow it away. You might think that such a practice will lead to underachieving organizations, because they aren’t being challenged. Yeah, well, check back with me after you don’t sell a million widgets.
Relevant. A good goal is relevant. If you’re a software company, it’s the number of downloads of your demo version. It’s not your ranking in Alexa, so telling the company to focus on getting into the top 50,000 sites in the world in terms of traffic is not nearly as relevant as 10,000 downloads per month.
Rathole resistant. A goal can be measurable, achievable, and relevant and still send you down a rathole. Let’s say you’ve created a content website. Your measurable, achievable, and relevant goal is to sign up 100,000 registered users in the first ninety days. So far, so good. But what if you focus on this body count without regard to the stickiness of the site? So now you’ve gotten 100,000 people to register, but they visit once and never return. That’s a rathole. Ensure that your goal encompasses all the factors that will make your organization viable.
What I like about this, as you might guess, is that it’s a very close match to what I’m saying here, in this site, and in the Plan-As-You-Go Business Plan book. Goals are about business, getting things done, and they do you no good unless you follow up on results and manage accordingly.
Tim Berry
President and Founder
Palo Alto Software
(Note: this is from my business plans coaching column this month at Entrepreneur.com. I’m reposting it here, with permission, for convenience of our BIG blog readers. Tim.)
Plans are wrong, but nonetheless vital. There’s a paradox for you. It’s a simple statement, one that I hope is somewhat surprising coming from a business planning expert; but it’s still very important. And it gets right to the heart of what business planning is all about.
More than ever, those who plan look to projections that often miss the mark. Nobody I know, and in fact nobody I’ve even heard about, accurately predicted the sharp plunge in the economy last fall. So of course those who actually use a business planning process are implementing a lot of course corrections, reviews and revisions.
It’s a great example of how this paradoxical statement — plans are wrong, but nonetheless vital — makes sense. As we look at the year to come, most of us are dialing down our forecasts. Does that mean we wasted our time making them? Not at all. How do we even make sense of where we are if we don’t have a map that shows us how we got there?
If you had a plan earlier this year and results differed greatly from what was expected, I hope you’re taking the time to compare those results, in detail, to the earlier plan. Look for where the differences were greatest. Look for where expenses were tied to sales. Look for the bright spots where sales held up. Look for how the numbers were supposed to come together, and not just how they didn’t.
And if you didn’t have a plan, then think of this as a good time to get a planning process started so you have a better view of your business in the future. Start making simple sales and expense projections. Don’t worry that they’re wrong; just make sure you go back each month and plot where and how and in which direction they were wrong so you can correct them.
You should only be wrong a month at a time, and as you use that plan-vs.-results analysis to look more closely at how things are going, you adjust again and improve results for the next time around. With each month, your grasp on reality gets better.
And then, as things go back up — and they will — you’ll be able to use what you learned to see the signs, anticipate and act accordingly.
This kind of planning process is what’s meant by the phrase, “The plan may be wrong, but planning is essential.” Then there’s another old military saying: “No battle plan ever survived the first encounter with the enemy.” What does happen, though, with battle plans as well as business plans, is you don’t know how to recover or how to adjust the plan if you didn’t have a plan in the first place.
Tim Berry
President and Founder
Palo Alto Software
Palo Alto Software is sponsoring the Governor’s Business Plan Contest in Wisconsin.
The Wisconsin Governor’s Business Plan Contest – the nation’s first statewide, tech-based business plan competition – is accepting entries online for the 2009 competition. Entries will be accepted now through 5 p.m. Jan. 31, 2009. The contest’s Grand Prize is worth $50,000 in cash and services.
Who’s eligable to enter? Wisconsin residents 18 years and older and teams from Wisconsin-based businesses and organziations are eligble to enter the contest. Teams from outside Wisconsin are eligble as long as they plan to base their business in Wisconsin.
For a full list of rules and contest information as well as the form to enter the contest - visit the Governor’s Business Plan Contest website.
I’m sure almost everyone is familiar with the story that Thomas Edison discovered 99 ways to NOT make a light bulb. That’s 99 no to reach 1 yes. The point here is that a negative result, proving something didn’t work or was not so, is just as valuable as a positive result. Sadly, scientific research has become so expensive, and so heavily subsidized/sponsored by corporations, that it has become the expected norm that every result must be a commercially marketable yes result.
That “always yes” attitude has come to shade the development and use of business plans as well. It’s gotten to where people think that every business plan has to show exorbitant profits and wild success. And to reach that end, all that they need to do is overestimate the financial tables a bit, or a lot, until the Profit and Loss and Balance Sheet show the desired results. This is a bad and dangerous tack, in my opinion.
For instance, we saw one plan for a tennis club with indoor court rentals. The financial tables looked good until we divided the rate per hour into the sales forecast. Seems those courts were rented continually, 28 hours a day, every day, 365 days a year. Not possible I’m afraid.
Or the mobile auto oil change business in a large mid-western city. Again, closer inspection of the sales forecast showed that the one worker was changing the oil in a car every 45 minutes, with no travel time between jobs, in all weather, every month of the year. Now, I’ve tried to change my oil in Illinois in January, outdoors, lying on my back in the snow and below-freezing temperatures. Let me tell you from experience that 45 minutes is painfully unrealistic.
Final example: there was the apartment rental company with five vice-presidents but no employees in the personnel forecast, and they never showed how or when they paid for the buildings they said they purchased.
These business plans all said YES in the financials — if you didn’t look too closely.
Now, I say that NO is an acceptable result from a business plan. A business plan for a start-up company that shows huge losses, or negative cash flow is an OK result. It tells you that the business as planned will fail. It tells you that some of your basic assumptions are wrong. It tells you that you are missing something immensely important.
And this is better than OK! Rather than starting up with unrealistic expectations and then hitting bottom in an excruciating crash, you can stop right now and reassess, before you make a financial commitment. Don’t ‘embellish’ the financials by boosting the sales forecast. Look at your market, your competition, your expenses, and everything about your plan and be realistic.
Honest reflection may tell you that this isn’t the business to start right now. Or, you might revise the plan and discover if you put some of those vice-presidents out on the production line, it reduces your costs of goods to a point where you really can make a modest profit on steady sales, without hockey-stick growth. After your revisions, you still might not make a profit until year three. But in going through this process, you may become convinced that the business is viable with adequate start-up funding and second-round investment.
NO is an acceptable result for a business plan if the plan exposed the flaws and showed the way to a realistic YES.
Steve Lange
Senior Editor
Palo Alto Software
Talk to us!
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