Monday, May 17, 2010

Begin With the End in Mind -- Visioning for Success

Years ago I heard a startling statistic that 95% of all small businesses in the United States fail within the first five years. This is a staggering number but not surprising. Even big businesses are not immune to the challenges of today’s warp-speed and constantly fluctuating marketplace. In fact, one third of the 1970 Fortune 500 had ceased to exist by 1983; and by 1995 nearly two-thirds had vanished. So what can we do to help our businesses survive, grow and flourish?

Begin With The End In Mind

We create plans all the time: plans to go to dinner and a movie with friends, plans for an exotic vacation, we plan our household budgets and plan for our retirements. In all, every plan we make is an attempt to help us move from where we are to where we want to be in the most convenient, effective and efficient way possible.

Surprisingly, however, many entrepreneurs are operating without one of the most important plans they need—a strategic plan. As a critical business development tool, this plan is the keystone to helping you remained focused, profitable and innovative. At its most fundamental level, a strategic plan defines what success looks, feels, smells, and tastes like, and then creates a roadmap from that point backwards to where you are starting.

Describing Success

At the center of the strategic plan is a well conceived vision which consists of two major components: a core ideology and envisioned future.

  1. The core ideology has two parts: core values—tenets which serve as guiding principles for your work, and a core purpose—the reason for being.

  1. The envisioned future consists of a 10-30 year audacious goal, plus a vivid description of what it will be like to achieve that goal.

You best Vision will represent the beliefs you find challenging and particularly important—a reason to dedicate your energies. It creates a picture of your future company and describes something to be proud of.

Planning a Revolution

In our marketplace there are many businesses providing similar services. The best way to help you succeed is to create something different. Don’t be “another” provider of a commodity product or service. Rather, redefine the market and uncover unmet needs. As Jerry Garcia of the Grateful Dead once said, “You don’t want to be considered the best at what you do. You wan to be the only one doing what you do.”

When thinking about the strategy for your company and in writing your own plan, you’ll want to consider four key questions:

  • What “unique” service or product does your business provide and what “real” needs does it fill?
  • Who are the potential customers for your product or service, how many of them are there, and why will they purchase your solution from you? What’s in it for them?
  • How will you reach your potential customers? How does the competition currently reach them?
  • Where will you get the financial resources to start and operate your business until it becomes profitable?

Despite the critical importance of a business plan, many entrepreneurs drag their feet when it comes to preparing a written document. They argue that the market changes too fast, they’re too small or that they just don't have enough time. But just as a builder won't begin construction without a blueprint, eager entrepreneurs should not rush into creating a company without a business plan.

While most small businesses end up closing within the first five years, I am sure they didn’t begin with that goal in mind. As you either begin your business, or even if you’re in your tenth year, perhaps today is a good time to create or brush off your strategic plan for the future.

-- David Kinard, PCM


Trade Waste said...

Great post!. It's clear, helpful and so interesting. Thank you for sharing it.

Polymers said...

Great post, cant believe there is that many that fail within 5 years.
Its not easy finding the right type of market to trade in.