Planning Ahead

Posted: November 20, 2011 by Chuck Matthews in Planning, Startup

Always plan ahead.  It wasn’t raining when Noah built the ark.    – Anonymous

In this fourth of five columns, the importance and value of strategic planning in your small, entrepreneurial and family ventures is further explored.   In the previous three columns, twelve deceptively simple, challenging questions that guide the planning process were discussed. Today, four additional fundamental questions that inform how ventures present goods and services to the buyer and users, connect those goods and services in place and time, and begin to build how you want the business to be seen (internally and by the public) are added to the mix.  First, the mind of the buyer is taken into consideration: What are three objections to buying your goods and services? Second, looking at our goods and/or services beyond the scope of its obvious applications is the challenge: Are your goods and services used in combination or connection with other goods and services? Third, the critical element of timing takes center stage: When and where are your goods and services available? Finally, the building of the firm/product brand rounds out the business plan: What is the key message or mantra that describes your business and can you do this in three or four words?

Overcoming objections…

Identifying objections to buying your goods and services is really a two part perspective: first in prestart-up, when trying to convince others of the value of the new idea; and later when trying to convince buyers and/or end users of the value proposition of your firm’s offering(s).  For both, the end game is focused on how to overcome those objections in order to move forward and ultimately, close the sale.  While all of the questions that guide the planning process are important, this one question is particularly critical.  For example, while in the very nascent stages of your venture, the focus is on convincing others, especially investors, that your business idea is feasible, valuable, and can make money.

One of my favorite examples of this goes back to the turn of the previous century when King Gillette first proposed the idea of a safety razor that required no honing, no stropping, and could be reused.  It was a bold idea at a time when the dominant dialectic for men’s wet shaving at that time was the straight edge – inherently dangerous, time consuming, and difficult to master.  A salesman by trade, when Gillette first took his idea to the engineers at MIT, they opined that it couldn’t be done.  It took Gillette six years before he finally found an engineer by the name of William Nickerson who agreed that it could be done and the rest as they say is history.  The point of course is that drive, determination, and dedication need to be combined with systematically overcoming the inevitable objections that will be raised, which means you need to have a plan.

Value beyond the obvious…

As noted previously, the primary function of the goods and/or services is to consistently and clearly deliver value of sufficient scope such that the customer (either business-to-business or business-to-consumer) is willing to exchange value for it.  Confirmation of great business ideas only comes with this exchange of value.  For Gillette, once the objections of the engineers were addressed, he needed to focus on changing the consumer’s shaving habits.  Slowly at first, he overcame buyers and users “objections” as both wholesale buyers and the shaving public set aside old ways for this new-fangled gadget.  From a mere 50 razors and 170 blades in 1903, to 90,000 razors and 12.4 million blades in 1904, Gillete was on to something.  The real turning point came with the advent of World War I when soldiers needed to be clean shaved in order for the gas masks to fit properly.  It was considerably easier to include one of Gillete’s new safety razors than a straight razor, strop, and stone.

Timing is everything….

Clearly for Gillette, a little planning, a little strategy, and a little luck are all operating in harmony.  Of course, as I have noted in the past, the more you do of the first two, the more you get of the third.  Planning is not meant to be cast in stone, chiseled into bedrock for all eternity.  I often tell my students, there is no such thing as the final version of their business plan, only the latest (and better) draft.  In fact, planning allows you to identify key target dates, milestones, and benchmarks which become markers for assessing progress toward your goals.  It allows you to not only set deadlines, but to make timely and valuable adjustments as you move toward those goals.  Great anticipation is often derived from the announcement that a certain product will be available on a certain date in a particular market.  For example, the very successful Harry Potter novels and Apple’s successive iterations of the iPhone and the iPad have all benefitted from “timing” their product development and market availability.

Mission and Mantra…

Which brings into focus what business are you in and how it is viewed – both internally by owner and employees and externally by the public.  From a planning perspective, this is captured in the mission statement of your venture.  Mission statements are meant to be a clear statement of who we are, what we do, how we do it, the goals, constituents, and reason for being in business.  Unfortunately, too often it becomes a meaningless jumble of generic buzzwords.  Dilbert’s Automatic Mission Statement Generator does a great job of poking fun at these useless mission statements.  There is still value in developing a ‘good’ mission statement.  I particularly like Guy Kawasaki’s take on mantras versus missions.  He advocates for the development of a clear, precise, and very concise (three to four words) mantra that really says to everyone (inside and outside) what you do.  This is quite the challenge, but very important.  One of my favorites is Nike’s mission/mantra: “Authentic Athletic Performance.”  Very nice.  One thing to avoid is confusing your mission/mantra with an advertising tag line.  For Nike, “Just Do It!” is a great advertising slogan, but is not a good mission/mantra focus.

Planning ahead…

In the fifth planning installment, I will put the final touches on the overall baseline business plane with the final four questions: Do you have the management team in place to achieve your immediate, intermediate, and long-term goals?  How do you plan to finance your venture?  How do you plan to promote your business? and What are your contingency plans?

You can find these planning questions and more on our web site at https://cincyentre.wordpress.com/.  Till next time, all the best for continued entrepreneurial success!

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