Mapping Out Your Firm's Success.
FOR SEVEN YEARS ALTERNATE ACCESS, A $2.5 MILLION company that provides computer telephony applications, has survived and prospered because it has weathered the vagaries of business.
"If you recognize that the only constant is change, that will encourage you to be prepared for change," says president Adrienne Lumpkin, 42, who founded the Raleigh, North Carolina-based company with her husband, Kelly, 46. "A lot of what's important in keeping the business going are things related to preparation--contingency planning--so that you can respond appropriately as change occurs."
So how has the company managed to sprout from a husband-and-wife operation to a staff of 12 with a five-year growth rate of a remarkable 1,408%?
It's all about being prepared, and that means having a plan that goes beyond the instrument you used to launch your business. Now that you're up and running, it's vital to know where your operation is headed and how you're going to get there. You have it all in your head, not on paper, and the advantages to having such a document are too beneficial to ignore.
The previous two parts of this series delineated the steps to take to plunge into the precarious world of being your own boss, and how to manage your firm's finances to keep it afloat. Now that you've scaled those mountains, it's time to address how you can keep your business running as you head toward profit and viability with the help of a carefully drafted strategic plan.
"You certainly don't start out on a trip without a road map," says Bennie L. Thayer, president and CEO of the National Association for the Self-Employed (NASE) in Washington, D.C. Not having one, not following the grand design, "has been the failure for most entrepreneurs. They've got a great idea--something that people really want--and it goes well. But [soon they realize] they have no idea where they want to take their business." The solution: a long-term strategic plan.
Melvin J. Gravely II, president of Infrastructure Services Inc., a 10-year-old, $2 million Cincinnati engineering firm and the author of The Black Entrepreneur's Guide to Success (Duncan & Duncan Inc., $14.95) and Making It Your Business: The Personal Transition from Employee to Entrepreneur (Impact Group Consultants, $16.95), says planning is important because it shifts you from being reactive to proactive. And the advantage of being proactive is you take advantage of opportunities instead of opportunities taking advantage of you.
Gravely adds, "That doesn't mean we can control every aspect of what happens, but at least [planning] puts us in a better situation to handle what goes on from a proactive standpoint."
Central to following through on a strategic plan are the issues of time and project management. Are you making the best use of your time as it relates to accomplishing your business goals? Are you managing the project or is it managing you?
The most important insight to grasp up front is the difference between the plan you used to get your business off the ground and the one you need to keep it going. More than likely your current business plan was created for one express purpose: financing. The strategic plan you need now is your how-to manual, replete with goals, deadlines and tactics. Some experts suggest, however, that a strategic plan can be shared with those having an impact on your business, such as customers and suppliers, and can be used to attract capital.
"Here's the problem with planning," says Gravely, who is 35. "We plan and don't actually work by that plan. On Monday morning we don't flip the plan open and say 'What are we supposed to do today?' Then the plan becomes almost obsolete, or almost an after-thought. We don't take the plan far enough to translate it into day-to-day activities."
So planning is the means by which the self-employed can balance the demands of working short term and planning long term. "If I have a long-term goal and I lose the short-term battle, at least I have the long-term goal to look to," Gravely says.
Gravely cites the time and expense he and his employees put in acquiring their first office building. Key personnel spent about 40 days on the project--from finding the right property to securing financing. The deal fell through at the eleventh hour because of environmental concerns that the seller wasn't willing to resolve. Staff morale bottomed, and in a single day Gravely went "from feeling very good to thinking about how I could rally our troops and improve everyone's emotional state."
Unfortunately, his staff fell into the trap of thinking and working in the short term--not exactly the way to smooth your entrepreneurial ride and improve your opportunity to persevere in business.
RECIPE FOR A SUCCESSFUL STRATEGIC PLAN
What are the contents of a long-term strategic plan? How do you go about putting one together?
As a business owner, the matter of getting your employees involved in the planning process may or may not be an issue. The point is if you have employees, include them in the process and solicit their input. Remember: planning requires creativity, so block out interruption-free time to brainstorm.
The Internet is an excellent source for information on strategic planning. Two helpful sites are the Edward Lowe Foundation http: //edge.lowe.org/search.htm, an organization that supports small businesses by providing information, research and education, and the Small Business Administration (SBA) at www.sba.gov.
Before you begin the process of writing your plan, some experts suggest that you assess where your business is as it relates to external factors. Is your industry going through changes because of new legislation or technology? What trends are occurring nationally and regionally that will impact your business?
"Technology changes. The environment changes," says Lumpkin. As competitors introduce new products into the marketplace, we evaluate our ability to maintain our market share and adjust our product or marketing strategy. You [have to] stay aware of what's happening externally."
This assessment should lead to a defining, or redefining of your mission statement--one that conveys the reason your business exists, the products and services it offers, the clients served, your marketing territory and areas of specialization. For example, Alternate Access' mission statement reads [something like]: "Alternate Access is a proactive, responsive solutions provider in integrated computer-based telephone systems. We incorporate business strategies with innovative solutions that provide [total] accessibility and strengthen your organization's business lifeline...."
Next, perform a SWOT (strengths, weaknesses, opportunities and threats) analysis. List your SWOTs after you tackle your mission statement. SWOT is a simple, but crucial, exercise wherein you ask yourself and your employees some tough questions. Strengths and opportunities won't be as challenging to broach as weaknesses and threats, but they should all be thoroughly addressed and tackled head-on. Questions such as "What do my competitors do better?" or "Where have I slacked off in service delivery?" should provide eye-opening solutions that should significantly improve your company's productivity and bottom line.
Some experts suggest seeking feedback from suppliers and customers, even those who have stopped doing business with you. Inviting clients to a luncheon meeting, for example, will provide them with a forum in which to air their concerns and could lead to new services for your business. As for the threats to your business, if you're serious about success you should know they are ubiquitous. Your SWOT analysis will impact your ability to reach a number of possible goals, such as increasing revenues, keeping pace with the competition or capitalizing on emerging trends, to name a few.
You want to get your business from one level to the next within a certain time. Now that you've finished your assessment, your mission statement and your SWOT analysis, you have enough information to define your goals. According to the Lowe Foundation, your goals or objectives should be measurable, quantifiable and consistent. For example, 10% growth in revenues by 2001 is a measurable goal. You might need, say, five new customers to hit that growth mark
A consistent goal is one that doesn't conflict. For example, rapid growth and high profit margins are unreasonable expectations for a newly formed company. The reason? Large capital investments and advertising costs can erode a significant portion of any projected earnings.
If one of your goals is to increase revenues, you will need to create a strategy to achieve that goal, such as attracting new customers, expanding sales to current customers or introducing new products or services.
Your SWOT analysis comes into play in implementing your strategy or tactical objective. Determine which of the ideas in your SWOT analysis will affect your goal of increasing revenues. You might want to develop a marketing plan that would enable you to fully exploit a market you have had some success with. In other instances, a weakness in sales may be corrected by hiring an experienced sales person or you might want to take advantage of an opportunity by developing and marketing a new service.
What is important here is that you establish deadlines for your tactical objectives. If you have employees, assign them specific responsibilities.
PUT YOUR PLAN INTO ACTION
After you've developed your long-term strategic plan, use it. Lumpkin advises evaluating your plan at least once or twice a year. Measuring or assessing where you are according to plan is absolutely critical.
Because Alternate Access understood its SWOTs, the company capitalized on an opportunity to meet the demand from small businesses for customized applications, a shift from its original mission of technology consulting. The new direction "has certainly changed the dynamics of the business in terms of whom we need to hire, how we operate, et cetera," says Lumpkin. "But it's change that we think makes sense based on our strategy."
As a self-employed person with, perhaps, a small staff, executing your strategic plan requires you to use your time judiciously.
"For a small business owner, it is very easy to become trapped and to get too close to things," says Odette Pollar, president of Time Management Systems in Oakland, California, and author of 365 Ways to Simplify Your Work Life (Dearborn, $8.95). "You can also spend too much time on one project or spend more time than is needed."
Ronald E. Guzik, author of The Inner Game of Entrepreneuring: 10 Steps to Mastering the Small Business Challenge (Dearborn, $18.95), says time management is about increasing your personal productivity.
Pollar and Guzik offer these tips for making the most of each business day:
* Write down your short- and long-term goals. Make a commitment to continuously revise your goals.
* Devise a plan of action. Achieving each goal begins with a step. Write down each one. If you find yourself faltering, your steps may be too big. Break them down into smaller ones.
* Jot down daily to-do lists, where each item is given a priority. If done correctly and followed religiously, to-do lists are the cornerstone of a good personal productivity system. Note what works well and what doesn't. Evaluate what it took to get through your to-do list. What prevented you from getting it done? Determine when you're most productive and why.
* Fine-tune routines and schedules. Many entrepreneurs started their ventures, in part, to escape the "straitjacket" of routine, which is fine up to a point. A business life too unstructured, however, doesn't make for productivity. Routines keep you on track, so set aside time for carrying out specific tasks.
* Meet with colleagues or associates (who are not your employees) on a regular basis. Obtain resources and leads from them that will help you manage your business better and expand it. (For a list of resources see www.blackenterprise.com.)
* Use drop off and delivery services. The small fee you pay is worth the time you'll save making numerous trips yourself.
* Keep things as simple as possible, especially your personal organization system. Don't upgrade software just because a new version came out. If you have already mastered the old version, stick with that.
* Outsource where appropriate. For example, hire a payroll service or a bookkeeper. If you have a project coming up, outsource administrative help.
For Curtis Richardson, founder and president of Richardson Safety Equipment Inc., a $2 million, 15-year-old wholesale supply business based in High Point, North Carolina, time/management means delegating responsibilities to any of his five employees. And he has no qualms about assigning duties because he has a good staff that works well together. Delegation allows him to seek new accounts and service existing ones and to render courtesies that go beyond phone calls and visits.
One of Richardson's employees is a salesman who works out of his home in Lawrenceville, Georgia. Richardson hired him to address a weakness that he had discovered in his wholesale supply business. Customers complained about not seeing him anymore.
"You can do more damage to yourself by trying to do it all than to get somebody else out there who can help you and paying them," says Richardson, 46. "And I saw myself like that at one time. As I was growing, I was still trying to do everything, and I wasn't doing what I should do effectively--satisfy my [customers]."
For your business as a whole, Lumpkin says getting help, whether contracting for it or hiring someone, is a time-consuming process. "You have got to continually assess how you are spending your time. There are things you do to bring in business and there are things you must do to run your business. All the things we hate," she says with a laugh. That category includes legal matters, accounting and administrative functions.
During the company's first four years in business, she and her husband, Kelly, were the only employees, and much of their programming work was outsourced. "We got to a point where we were contracting so much, it then made sense that we have a full-time person doing this," she says.
Troy Nalls, 32, founder and president of Answer Austin Inc., a three-year-old, $200,000 Austin, Texas-based voice mail service, has found the answer to his time management needs in a business software product called GoldMine. The program, which is available in a five-user version from GoldMine Software for $995, allows Nails' office manager to schedule appointments for him and the information can be accessed from Nalls' computer. The two can set alarms for each other, and information about customers, including past transactions and prior communications, is readily accessed by retrieving one file.
Although your plan of action may differ from those in this article, implementing a strategic plan to wisely manage your time in the quest for better profits and a healthy business is key.
"If I don't work, I don't eat," says Nalls about his motivation for staying focused. "To me, failure is not the business closing; failure is having to get a job."
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|Author:||Moss, Mark Richard|
|Date:||Mar 1, 2000|
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