Small Business Center

The value of writing a business plan is often debated in the entrepreneurial community.

For every successful business that was launched with a well-thought-out business plan, it seems you can find an equally successful one that was launched with nothing more than some scribbles on the back of a napkin. In fact, the contrarian approach may be the one you hear most about — i.e., entrepreneurs dismissing a business plan as something they wrote and then stuffed in the bottom of a drawer.

Palo Alto Software founder Tim Berry (a contributor here at Small Business Trends) recently reported on some new data showing the value of business plans.  Palo Alto did a survey that asked thousands of its Business Plan Pro software users questions about their businesses, goals and business planning. The responses showed that those who completed business plans were nearly twice as likely to successfully grow their businesses or obtain capital as those who didn’t write a plan.

Tim gave this breakdown of the numbers:

2,877 people completed the survey. Of those, 995 had completed a plan.

• 297 of them (36%) secured a loan
• 280 of them (36%) secured investment capital
• 499 of them (64%) had grown their business

1,556 of the 2,877 had not yet completed their plan.

• 222 of them (18%) secured a loan
• 219 of them (18%) secured investment capital
• 501 of them (43%) had grown their business

Of course, as author of the original Business Plan Pro software program and founder of Palo Alto Software, Tim admits he’s a little biased in favor of business plans.  And people who respond to a survey by the company that made their software may be biased in favor of saying good things.  So Tim had the University of Oregon Department of Economics assess the validity of the data. Eason Ding and Tim Hursey wrote a report on the data with the supervision of Professor Joe Stone. “Results suggest that planning with software is highly correlated with subsequent successes for a variety of firms,” they wrote.

Regardless of the type of company, the growth stage of the company and the intent for the business plan, Ding and Hursey’s analysis found that writing a business plan correlated with increased success in every one of the business goals included in the study. These were:  obtaining a loan, getting investment capital, making a major purchase, recruiting a new team member, thinking more strategically and growing the company.

The authors concluded:

“Except in a small number of cases, business planning appeared to be positively correlated with business success as measured by our variables. While our analysis cannot say that completing a business plan will lead to success, it does indicate that the type of entrepreneur who completes a business plan is also more likely to run a successful business.”

And if I correctly interpret the last sentence in the quote above, the act of going through the business planning process may make you a better entrepreneur.

So there you have it:  you’re better off WITH a business plan than without one.    In fact, based on the survey, you are twice as likely to grow your business or achieve funding if you have taken the time to write a business plan.

Popularity: 18% [?]

Small companies looking to break into major retailers these days have to contend with something other than just coveted shelf space:  Their sustainability “score.”

Increasingly, big-name corporations are assessing and selecting their suppliers based on environmental benchmarks. The concept gained traction when Wal-Mart a few years ago unveiled ambitious plans to assess suppliers using its “Sustainability Index,” which considers everything from packaging materials and waste disposal to energy efficiency and greenhouse gas emissions. In 2009, the retailer began sending 15-question assessment forms to 100,000 U.S. suppliers and plans to eventually start labeling products in the store based on their overall environmental friendliness – similar to a nutritional label on food.

In recent weeks, Procter & Gamble and Kaiser Permanente launched similar types of programs. (Some companies, such as Patagonia, have utilized such sustainability assessments of suppliers for a long time.)

Major corporations figure they have the leverage to push environmentally friendlier practices onto their suppliers, and such initiatives, of course, bolster their own reputations as a eco-conscious companies.

But what does this mean for the suppliers, or wanna-be suppliers? It’s more important than ever for small businesses to know their total environmental impact and, if they don’t, to figure it. Wal-Mart’s assessment, for instance, asks its suppliers for detailed information including: “Do you know the location of 100% of the facilities that produce your product(s)?,” “Have you publicly set solid waste reduction targets?” and “What are your total annual greenhouse gas emissions in the most recent year measured?” (Read all of Wal-Mart’s 15 supplier questions.) Procter & Gamble’s assessment gives extra points for using renewable energy.

Small businesses hoping to work with these large corporations should anticipate questions about their environmental practices when they pitch company representatives, and thus be prepared with answers. The more details and real numbers you can mention, the better.

Here are some of the steps a small company can take to ensure its up to snuff when it comes to sustainability scoring:

• Evaluate packaging. Too much packaging creates waste and consumes carbon to produce and transport. Seek ways to keep packaging minimal and use recyclable materials whenever possible.
• Reduce energy usage. Make sure your business is energy efficient, since energy use a big factor in many of the sustainability indexes. Use high-efficiency lights, such as carbon fluorescent lights (CFLs), LEDs or T-8 fluorescents, whenever possible and employ other energy-saving tactics. The government’s Energy Star program offers guidance to small business.
• Select your suppliers carefully. The sustainability indexes don’t just look at your business’s green practices – they care about your suppliers’ and manufacturing facilities’ practices as well. Make sure you do your own assessment on environmental practices when determining which suppliers to use.
• Find organizations that can help. Some local non-profits, economic development initiatives and local governments are dedicated to helping businesses in their area lower their environmental toll. Do an Internet search for groups in your area or ask around. You may be able to get free help.

Popularity: 4% [?]

The definition of a sale is when preparation and opportunity meet on the same day. In business, it helps to understand that customers are working to minimize risk when they enter into contracts with small businesses.  Some small business owners often loose opportunities because of bad habits and not recognizing that certain things must be in place before they start marketing their products and services.  These issues speak directly to trust and credibility for a business owner.

Here are the top five mistakes that hold back start-up entrepreneurs:

1) Not Appreciating Social Intelligence

This is the mistake that small business owners make the most.  Having proper social skills and being in tune with your surroundings will take you a long way in business.

Here are some examples of poor social intelligence:

• Do you have a tendency to talk too much at networking events, or worse, share too much personal information? No one except the banquet manager cares about how hard it was to find a parking space. Keep your networking chat smart.
• Are you dressed like someone that has an executive presence? Or, like you should be serving the meal at the event. Everyone should have signature colors and at least three killer outfits. Men, the tie color and the shoes are very important.
• Do you have a strong elevator pitch or do people need to ask you questions to help you define what you do? Great elevator pitches hit on three key things: explain the type of business, explain the target customer and close with a question.
• Do you appropriately follow-up new leads and contacts or are you a stalker?  Be smart with follow-up. You can send an email, personal note and make a phone call within three months of meeting a contact unless instructed otherwise. Calling every week will not bring opportunity to your business.

2) Have a Professional Business Website

It’s surprising to me how many business owners still do not have a website.  I can’t remember the last time I used a paper directory or phone book to find a vendor. Many people will perform an internet search before they ever call you, so if your customers can’t find you online, you are missing out on opportunities. Nowadays, pulling together a business website is much easier.  Have an idea of what you want, and if you plan on incorporating a blog I strongly suggest you start writing blog posts at least three months prior to the launch of your website, so that you do not get backed-up trying to develop content once your business starts rolling.

3) Make Sure Your Email Address is Branded With Your Company Name and That the Email Address Works

I love my gmail account too, but that’s not the one I use for customer contact. Your emails should come from a branded account that promotes your business.

4) Not Investing in Your Brand

Yes, all of you out there using business cards that you can get for free online are really hurting your business brand.  Invest in a professional logo and a two color business card. Do not hand out business cards that have it printed on the back that they were free.  That tells a prospective customer that you are not serious about your business.

5) Have a Real Phone Number for Your Business

Your small business should have a dedicated phone line with voicemail.  Do not use your cell phone as your main business line.  You’ll never to do business with a major corporation with that as your brand image.  Also, please do not use those answering machines that come with the phone. No matter what you do, the message will never sound professional.

Are there any other common mistakes that you think some small business owners make when starting out in business?

Popularity: 22% [?]

Are you a budding entrepreneur or serial small business owner who badly wants to turn your small business into a million-dollar business?

If so, one of the things that can drive you absolutely nuts is trying to figure out how to achieve that goal while you’re already putting all your time and energy into keeping your current business running!

Well, get ready to celebrate! I’m about to show you how to use the powerful Law of Attraction to transform your current business from a “small business endeavor” to “a million-dollar enterprise.”

Relax. Believe it or not, it doesn’t require working any harder than you already are. Instead, I’m going to show you how to work smarter by focusing on what you need to do energetically and practically to create a million-dollar business.

Begin by living a millionaire lifestyle.

Living the Millionaire Lifestyle

One of the best books I’ve read on the millionaire lifestyle is, “The Millionaire Next Door,” by Drs. Thomas Stanley and William Danko. In 1998, when this book first came out, the world was shocked to read that, contrary to popular belief, many millionaires do not live in mansions, drive fancy cars, or vacation in exotic places. That book revealed that, if you want to create a million-dollar business, the first step is to start living the millionaire lifestyle by:

• Living below your means. Half of the millionaires interviewed did not live in high-status neighborhoods. Instead, they lived in average neighborhoods in average-sized houses. The other half only moved to more affluent areas after they had become wealthy.
• Being frugal. Most millionaires do not buy expensive suits, pricey boats or brand new cars. Instead, they like to shop around for a good bargain and always haggle for a better deal.
• Loving your work. Millionaires are either self-employed or own their own businesses, and they feel very passionate about what they do. They are self-made and like to succeed by their own ways and means.

The Millionaire Mindset

Next? Use the Law of Attraction to create a millionaire mindset. Here’s how:

1. Cultivate an extraordinary mindset.

If you want to create a million-dollar business, you must first cultivate a millionaire mindset. What that means is that you must already be, in your thinking, a million-dollar business owner where a million-dollar cash flow is normal for you.

2. Create causes, not businesses.

Millionaire business owners focus on doing great things, not creating great businesses. They pour their heart and soul into leaving a legacy of great causes they are passionate about.

To do that, you must have firmly fixed in your mind the core purpose for your business. Make sure it is bigger than your own self. Remember: It’s not about making money; it’s about making our world a better place for you and others to live in.

3. Look for inspiration, not products.

What inspires you?

Once you know that, the next two steps are simple: Look for the opportunities arising from that inspiration and take action on them. By first turning inward to tap into your inspiration—rather than looking outward for products or services you think will line your pockets—million-dollar returns will flow to you.

4. Know that thoughts become things.

The Law of Attraction states that what you think about comes about. That’s because your thoughts attract and magnetize other thoughts like them. Therefore, whatever you think about, that is what you will multiply in your business.

Your business is a mirror of your own inner thinking. Where is your attention right now in your business?

5. Be 100% committed.

Are you willing to do whatever it takes to have a million-dollar business?

Some people aren’t, you know. You can easily recognize them by how they allow setbacks to get them down and by how quickly they give up whenever the going gets tough.

Having hopes, dreams, and aspirations of becoming a million-dollar enterprise is not enough to create it. Instead, you must be 100% committed that, no matter what, you will do what it takes to have a million-dollar business. Only then will all the synchronicity and magic of the Universe align to make that happen.

6. Think two million.

If you want a one-million-dollar business, begin with a two-million-dollar business mindset. Since all riches begin in the mind first, there’s no better way to build a million-dollar business than by starting off with an idea that has twice that amount of energetic backing.

7. Have a plan, and then work the plan.

I cannot stress enough the importance of having a business plan in place for your two-million-dollar business. Just the process of putting together a two-million-dollar business plan will energetically stretch you in ways that will open you to becoming more of a match for the one-million-dollar business you want.

Once you have that two-million-dollar business plan in place, then work it!

If you are a budding entrepreneur or serial small business owner, I really want you to understand one thing: Working harder is not the solution to creating a million-dollar business. Instead, adopt the millionaire lifestyle above while using the Law of Attraction to create a millionaire mindset. If you do, you’ll be well on your way to creating that million-dollar business you’ve long been dreaming of.

Remember, the creation of a two-million-dollar small business enterprise is only a mindset away.

Editor’s Note:  This article was previously published at OPENForum.com under the title: “Cultivating the Millionaire Mindset Using the Law of Attraction” It is reprinted here with permission.

Popularity: 14% [?]