Business Planning in Omaha, NE 2018
What are your goals for your business in 2018? How do you plan to meet them? These are questions you may have already answered, or at the very least you have probably given them some thought.
While business planning isn’t just something that you do in the final months of the year or into the beginning of the next, as it’s an ongoing process, it is a common time to take stock of what you accomplished in the last year and use that information to determine your trajectory for the next.
“Any time is a great time to review the systems and processes of your business,” advises Andrew Storz with Storz Enterprises. “In order to stay competitive in the current environment, it’s important to consistently be reflecting on how your organization can improve upon its strategy, culture, and execution. That being said, far too often we’re overestimating how far out we can reasonably plan and strategize. When I used to run the budget process for a company, we would begin work in October determining in great detail what our business would like through the end of the next year – which is not uncommon for many businesses. By next December, 15 months later, that same budget and the goals we set could not have been more irrelevant to how our organization operated. Information stagnates faster than ever and we have to be mindful of that when we create our strategic and tactical visions. It can be difficult to acknowledge the unknown unknowns. However, when we begin to emphasize responding to change over following a plan we put ourselves in a position where we can become proactive and embrace the ever-changing business environment. When planning for the coming year, be sure it’s with the understanding that when change is needed, you’ll have the agility to be able to respond. Also, it’s helpful to begin the process by asking the tough questions like:
‘What are we doing to make sure we’re the best in our field?’ ‘Are we supporting or impeding innovation in our organization?’ ‘What happens when (NOT if) our plan doesn’t go exactly as planned?’ ‘Are we prepared for growth to the extent that we know there will not be a customer of ours that will have a bad experience because we stretched ourselves too thin?’ ‘We have great people; do we have great people in great roles?’
Pertaining to the last question, I think it’s great seeing the continued expansion of human/people-centric approaches to business culture. The education and skill gap that existed decades ago is nothing like what it used to be and the traditional hierarchies need to be adjusted accordingly. Every individual has great talents and the potential to make tremendous contributions to an organization. If the focus is on finding great people for great roles, with a sustainable workload, and the freedom for teams to self-organize continues to grow, we will have a happier and more effective workforce.
When working with Storz Enterprises, we can assist with anything from high-level strategy down to the details of individual processes in your organization. We like to use the word ‘facilitate’ to describe what we do. By definition, it’s the act of making an action or process easy or easier. That value can be realized in many different ways from better margins, increased effectiveness, or more cohesive communication. Our goal is to be an agent of positive change to the culture. When I see people start to embrace an agile mindset and encourage innovation at all levels, that’s probably the greatest piece of value that I can add. I hope that as everyone plans their 2018, they decide they won’t be great, they’ll be exceptional; they won’t stick to a plan, they’ll respond to change; and through constant discovery, they will demonstrate new and better ways to serve their customers.”
Specifically regarding planning to leverage technology in the coming year, he notes, “We live in an amazing time when technology allows us to communicate and share information in ways not possible just a few years ago. With things like cloud-based storage, SaaS products, and the variety of communication options, there are very few factors that impede an organization from having exceptional communication and eliminating siloes. Barriers caused by geography or physical locations of digital files don’t need to exist anymore. I think almost every business has a need to be leveraging this technology to build a better experience for their staff and their customers.
Technology and business today moves at a much faster rate than any time before. Half of the companies from the Fortune 500 in 2000 are no longer on the list. Blackberry (Research in Motion) was considered the great example of innovation 10 years ago, yet today its market share is almost nonexistent. Going back to the importance of agility, failing to accept and embrace change can be a deadly choice for an organization. In Blackberry’s case, they didn’t change their business to meet the needs and wants of their customers and in doing so their product became all but obsolete. If we refuse to change and adapt we will likely run into the same issue.”
In addition to leveraging technology, there are a number of other tools to apply in growing your business and reaching your goals in the coming year. Another prime example of this is marketing.
Garrett Young with Eleven Twenty-Three offers a different view on marketing that goes beyond the usual lunches and pens. “Everyone has a cup, drawer, or center console filled with pens from every repair shop, gas station, and restaurant within a 5-mile radius. We fill our weeks up with lunch and coffee meetings to network and strengthen our partnerships. Your time is valuable, so each touch point created is important, and needed, to create meaningful relationships over time. As we all know, it takes time to grow a business and you only have a finite amount of time to let everyone know you exist. Alongside our on-site meet-ups, it’s important to have a plan. If you have the best product and service in town but lack a yearly strategy for new business, all the time, energy, money…and meetings you have invested in to improve your company have been a waste.
Companies that are primed for growth can be held back by not being properly set up internally for their growth. If your internal systems and processes are inefficient, adding new business can shed light on challenges that need your attention. You have worked hard to gain the customer base you already have, and want to keep them. The way your company processes new customers to make them feel taken care of is necessary in order for the advertising and marketing to be effective. It all works together.
Here are a few simple steps to review going into the new fiscal year.
- Take time to speak with your sales and customer service teams – Talking to your team about any tweaks needed to current processes they are seeing in their day to day activities can really create a positive impact on the bottom line. They are a great resource for information when looking to move the company in a forward direction. Employees are your best brand advocate and are on the front line interacting with your customers. Empower them to make sure the customers first interaction with your company is a positive one.
- Define challenges or obstacles you’d like to overcome – Whether your location is difficult to get in and out of, or your sign is behind an oak tree that is in full bloom during various seasons, all obstacles are important to address. Putting it on paper and creating a game plan is step one to overcoming these situations.
- Get your pricing in check – Getting new clients in the door can be tough, but taking time to get your internal prices in order will set you up for success. Letting customers walk out of your business without making a purchase is letting money walk out the door. That loss is more painful when it occurred because of lack of research.
- Create a budget – Once internal operations are in order, you and your staff are ready to grow and invite new customers in. Creating and sticking to a marketing budget is an important step. If you are a consumer product and services company, typical marketing budgets are 7%-10% of your gross sales. For business to business, look at spending closer to 3%-5%. This budget should not be viewed as an investment in the success of your company. The difference is, as an expense the cost will depreciate over time when compared to an investment that will generate new wealth.
- Identify how to reach your customer – It’s important to determine where your marketing dollars will be spent. If you are not certain you are getting the most bang for your buck, look to an industry expert you can trust to create an advertising plan to reach your customers. Marketing budgets include events, collateral items you hand out and the external advertising campaigns for a broader reach. It all works together to establish your brand and reinforce the top of mind awareness you have worked hard to achieve. This budget is more than just money to be used on lunches with clients and pens to hand out. Your marketing budget is the fuel that drives your business.
Take the time this year to set your goals and move your business forward.”
Building upon what we’ve covered so far, Gerry Phelan with Greater Omaha SCORE offers insight based on his experience as a business owner and mentor: “My background in operations management for large organizations taught me to invest in detailed planning. I would build budgets, spreadsheets, and Gantt charts because the problems were often large-scale and complex. But in small to mid-sized businesses, that level of planning can induce paralysis. Instead, it makes more sense to break projects down into small steps and then quickly try them out.
At SCORE we have found that a process called ‘Lean Canvas’ helps by looking at all aspects of a business. It provides a brief but thorough, one-page snapshot of the business. The Lean Canvas questions allow you to spot weakness and quickly evaluate new ideas. With positive results, you can confidently continue on to building detailed business plans and executing new strategies. SCORE mentors can help with training on how to use Lean Canvas and help evaluate the results.
Lean Canvas is a great tool to help in evaluating small projects quickly so they get implemented. If something works do more of it. If an idea fails, discard it and try something else. By moving quickly, you can try more ideas and reduce the cost of failure. Finding winning projects faster lets business beat their competition and accelerate growth.
It is normal for businesses, even established ones, to hit roadblocks or reach a plateau. And it can be difficult for the people on the inside of a business to see new options. When that happens, it really helps to get an outside perspective. Too often existing businesses keep doing things the same way they always have and forget to look at the changes that are going on, not only in their industry but in technology that drives their systems and marketing. That is where SCORE shines. We offer free one-on-one business mentoring. Our volunteers represent a wide variety of businesses and industries so we can bring serious insights to bear on business planning. A business at any stage, from startup to mature is welcome to use our resources. And it works: Nationally, 71% of SCORE’s clients go into business after initial mentoring, and further benefit from ongoing mentoring as they operate their business.”
In conclusion, he offers the following thoughts to consider, “Today, only about half of small businesses survive for 5 years. It is critical to take time to work on your business rather than just working in your business. Small business owners often do not have a trusted team of advisors they can use as a sounding board. When they need to make decisions or evaluate new opportunities, they may struggle and take too long to evaluate the options. SCORE provides free and confidential mentoring in person and online, business tools and local workshops, seminars & events. We work with early-stage entrepreneurs, start-up businesses, and established businesses, who are seeking to grow their business and increase their profits.
It’s important to plan and evaluate, but ultimately businesses need to be nimble and active. Too often existing businesses resist change because it is uncomfortable rather than embracing it so they can stay ahead of the competition. Or, they utilize a new internet marketing approach because someone else is using it versus determining what approach is best for their business. Another area is failing to look at the increased cost of doing business, such as materials expense, or production costs or the actual cost of delivering a service. Ignoring increased costs will squeeze profit margins. Rising costs need to be examined and reduced or reflected in the increased pricing of products and services. Too often, businesses fear they will lose sales and clients if they raise their prices. SCORE helps them evaluate these areas and determine the best approach to take.
Altogether, it pays to seek outside advice. We don’t provide legal, tax or accounting services but SCORE can help with evaluating options, creating business plans and connecting businesses to the resources they need. We invite you to give us a call, send us an email or visit our website.”
In agreement on the importance of seeking advice from a neutral third party, such as a mentor of a business coach, Rose Mary Hefley with Achievement Unlimited adds, “These are professionals who will help you set objectives and develop a plan to meet both business goals and personal goals. We make the biggest impact by working with clients to follow through on activities that will create a return on investment. We also bring another set of eyes to a challenge and can be objective when it comes to identifying solutions and finding creative ways to solve problems. At Achievement Unlimited, we offer our clients a strategic planning process which examines the critical aspects of the business in order to develop prioritized goals that provide a return on investment. Essentially we work with our clients to identify areas that will make the most impact to improve their organization, and then put together an action plan that ensures objectives are met. Some of these objectives would be to: grow sales, improve profit margins, reduce operating cost, and produce a better product or service.
Achievement Unlimited Inc. offers a wide range of product and service offering tailored to your specific goals. Some examples of our areas of expertise are Leadership, Management, and Sales Training; Manufacturing and Distribution Systems Integration, COO Services; Strategic and Business Planning.
She further advises, “We find that many businesses overlook coming trends and fail to prepare for the changing marketplace. Another area of neglect is failing to develop upcoming leadership within the organization. Just because someone can sell or is a good widget maker does not mean they can run a department or a business without effective leadership and management skills. If you want your business to get better, you must get better. That means you need to invest in yourself and your leadership team to improve your communication, thinking, listening, problem-solving and team-building skills. You must have a written plan to meet the objectives of the organization. Everyone needs to have goals and objectives they must meet and be trained on the skills they need to be successful. It is also important to create an environment where both the employee and the business are rewarded for their efforts.”
Hefley also notes, “Another challenge we are seeing in the marketplace today is a lot of owners would like to retire but don’t have a leadership team that can effectively fill the void of the owner leaving. This creates a real problem, especially in family-owned businesses where there is a 70% failure rate when the second generation takes over and does not have the leadership ability to create the revenue or manage people.”
On that note, for all business owners no matter how young or old or how long you’ve owned a business, it’s important not to put off or underestimate the importance of retirement and succession planning. Similarly, when it comes to business transactions careful planning goes into that too for sellers and buyers alike, no matter the scenario. “The biggest challenge with selling or buying a business is generally financing,” says Jethro Hopkins with No Coast Business Advisors. “Traditionally most banks don’t like to do SBA lending in the under $250K market. So let’s say you own a business that’s worth $80K and you want to sell it. Since it’s next to impossible for someone to get a standard commercial loan for a business at that price point, a buyer would need to put their house up or have cash in hand for the transaction to take place. However, if you’re able to get the funding part of the deal in place before a buyer even shows interest, it improves your odds of selling and decreases the time it will take to do so big time. To put this in perspective, it would be like a homebuyer not being able to get financing for a home under $250K – that obviously is not possible for a lot of people who have the dream of homeownership. Up to this point, for many people who had the dream of owning a business, the options were extremely limited it not non-existent. Through a relationship we’ve established with a lender, No Coast Business Advisors is the only brokerage here in Nebraska that can prequalify a business for a loan that’s SBA-backed or similar anywhere from $30K to $5.5M. So far these loans have all been 10-year notes, so you could essentially invest buy a business for as little as $500 a month. It makes business ownership more accessible while also making it easier to transition out of a business, and in both ways I’m able to help my clients tremendously. Having that prequalification also means that there’s a third-party verification of what the business is valued at, which is incredibly helpful to know up front so both parties know exactly where they stand and there is less back and forth with negotiations. For the buyer, with these loans there’s even the potential to include operating capital. With the transition of ownership oftentimes there’s a learning curve involved, so you have a cushion to help out while you learn the ropes and get acclimated to running the business successfully.
Going back to the importance of having a neutral third party involved, if you’re thinking about buying or selling a business, take the time to sit down with someone who can objectively review the deal and advise you on it accordingly. Although your lawyer, accountant, etc. are trusted advisors, it’s wise for this person to be an experienced business broker. Even if you’re not using them to get the deal done, pay a small fee to have that conversation. You probably haven’t done this before, but we have many times because it’s what we do for a living, so it’s well-advised to use that specialized training and experience to your benefit. Considering the amount you stand to lose, it’s well worth what you’d spend up front. I’d be happy to discuss any plans you have for buying and/or selling a business in 2018 and beyond.”
As for the entrepreneurial ventures in the planning stages, 2018 might be your year to establish a new business, launch a new service, bring a new product to market, or get the ball rolling towards one or more of those end goals. Specifically regarding new product development, Lawrence Owens with Concentric Visual Design advises, “When developing a new product many disciplines will be required to go from concept to shelf. Therefore, when assembling your team be sure to select the professionals who will be collaborating on the project carefully. There are certain things each will be able to contribute, particularly in experience and breadth of offerings, which can ultimately make a big difference both during the process and with the outcome. For instance, when it comes to designing products, an advantage that Concentric Visual Design has over a traditional industrial designer is the application of multilayered knowledge and experience. While industrial designers work mostly on the front end in the concept stages and only on the product design, my background in manufacturing has given me knowledge of manufacturing, engineering, and sourcing. And my graphic design training allows me to create the packaging, marketing materials and media content you would normally need to outsource to another company. The ability to do this all under one roof is truly a benefit to my clients, specifically in the areas of project cost and timeline. It also lends to the cohesiveness of everything consumer-facing, from the product ads that generate interest and drive sales down to the instruction manual they read after they’ve made the purchase. It’s what I call “brand-centric” design–being able to incorporate the vision of the brand throughout the entire product user experience. By using this exact process, I’ve successfully helped inventors and world-class manufacturers bring products to market.”
He also notes, “Some products like medical devices have incredibly long development cycles, sometimes up to 10 years. The planning and rollout of product development for this would be a lot different than a product that can be designed, manufactured, and sold within a year or two. In any case, foresight of the road ahead is critical. Working with experienced professionals having knowledge of modern manufacturing processes and design techniques will help you better navigate the sometimes complicated road of product development.”
In closing, as you plan for a successful year in business ahead, be mindful of the multitude of resources at your disposal. You never know where the next great idea is going to come from and our local professionals offer a wealth of knowledge – use that to your advantage!