Category Archives: Uncategorized

In conversation with Stephen Goldberg, a discussion of the value of Business Planning. “It’s about the process, not the product.”

Read the full article and watch the video here.

Your Uncle Ralph, Del Chatterson
 
Read more Learning Entrepreneurship Blogs.
Join our mailing list for more ideas, information and inspiration for entrepreneurs. 
 Click Here to check out Uncle Ralph’s books, “Don’t Do It the Hard Way” and “The Complete Do-It-Yourself Guide to Business Plans” Both are available online or at your favourite bookstore in hard cover, paperback or e-book.

 

This article is an extract from Uncle Ralph’s, “Don’t Do It the Hard Way. Read the book.

Consultants: How to Choose, Use, and Not Abuse them

Help them, help you

ConsultantsSince doing my first consulting project over thirty years ago, I have learned a lot about how to successfully manage consulting projects and the client/consultant relationship.

Here are some ideas that may help you with your consultants (and your lawyers, accountants and other professionals):

  1. Before you introduce consultants to the process, be sure you need what you want and want what you need. Beware of consultants that agree to do whatever you want, whether you need it or not.
  2. Look internally to confirm the three “C’s” of consulting project readiness: Capacity in budget, time and resources; Commitment of management and staff affected by the process; and Capability to support the project and implement the conclusions.
  3. One more “C” – Compatibility. Select your consultants from an organisation that is compatible with yours – are you a corporate multinational or a local entrepreneurial business?
  4. Recognize whether your consulting needs are strategic: requiring outside expertise to inspire and facilitate your business planning process, or operational: bringing knowledge, skills and experience that are not available internally.
  5. Meet the operating consultant. It may not be the same charming, talented person that sold you the work.  And at those fee rates you don’t want to train a recent MBA, who started last week and studied your industry yesterday.
  6. Test Drive: Check whether the consultant arrives with questions, not answers; will operate as neither boss nor employee; and will win the hearts and minds of your staff. Successful consultants will listen, understand, empathize, analyze, strategize and persuade better than normal people.
  7. Remember you are hiring a consultant to challenge and push you. You are not renting a friend to tell you how smart you are.
  8. Can you confidently expect a solution that will be yours not theirs?
  9. Ask for references.  Call them.
  10. Ask who is not on the reference list and why not.  Learn what they think causes a project to be unsuccessful.  And ask which list they expect you to be on when this is over.
  11. Ask for fee rates and a work plan with estimated hours. Then agree on a fixed fee for agreed deliverables with dates, documents and milestones.
  12. Don’t let their progress reports interfere with your progress.  Get what you need, not what they need for “CYA” requirements.
  13. Check who else is billing time to your project.  Sometimes there is a very expensive partner back at the office who needs to keep his billing rate up. Your budget can be quickly consumed while he “supervises” from a distance.
  14. Avoid surprises.  Ask about additional expenses: travel, telephone and printing. Terms of payment?
  15. Do they have a satisfaction guarantee?
  16. Get the agreement in writing, read it before signing it.
  17. Watch for signs of trouble: such as, selling more work before the work is done; long delays between on-site visits; too much time spent “back at the office” and billed to you.
  18. And finally, remember consultants are people too. They want to boast about good work and satisfied clients.  You can help them help you.  Don’t be difficult.

With all due respect and best regards to my favourite clients and consulting associates.

Your Uncle Ralph, Del Chatterson

Read more at:Learning Entrepreneurship Blogs. 

 

Join our mailing list for more ideas, information and inspiration for entrepreneurs.

Click Here to check out Uncle Ralph’s books, “Don’t Do It the Hard Way” and “The Complete Do-It-Yourself Guide to Business Plans” Both are available online or at your favourite bookstore in hard cover, paperback or e-book.

 

 

Brexit: Success for democracy or failure of leadership?

Union jackNow we know the risk of a protest vote. You may accidentally get the result you were only intending as a threat to get some attention to your complaints. Poking the bear to make it go away may just provoke it into biting your hand off to leave it alone.

What else have we learned?

Maybe asking for a final conclusion to a complicated issue in a simple referendum question is not a good idea. Delegating decision-making to a popular vote is a mistake, suggesting there is a simple solution to a wide range of complicated problems. “Just say yes, or no, and all your problems will go away.” Too many will make their decision for the wrong reasons, expecting the unlikely happy conclusions that they hope for and ignoring the negative consequences that cannot be avoided.

It is better to seek public consent on policy direction rather than asking for final conclusions. Surveys of voters already give us a good idea of their concerns and possible solutions that will be acceptable. Elected officials and public servants should be aware of voter sentiment and accept the responsibility to study the issues, assess the implications, make decisions and manage the consequences. The electorate will then decide which policy direction is preferred and whose performance deserves a renewed mandate at the next general election.

Plebiscites and referendums may seem like the ultimate expression of democracy, but they allow the angry and uninformed to be too easily misled and falsely motivated by populist rhetoric from those with a personal or political agenda that does not address the issues they are exploiting.

The most important lesson for leadership is to listen to all voices and not dismiss those who do not agree as ignorant, biased, fearful or unworthy of consideration. Unpersuaded to accept your arguments, they may turn to less desirable leadership and more drastic and painful solutions.

Democratic principles need to be respected, but leadership must also accept the responsibility to make difficult decisions and then communicate effectively that they are in the best long-term interest of the electorate. Accepting the appeal of simple short-term solutions can be disastrous.

Your Uncle Ralph, Del Chatterson

Read more at: Learning Entrepreneurship Blogs. 

 

Join our mailing list for more ideas, information and inspiration for entrepreneurs.

Click Here to check out Uncle Ralph’s books, “Don’t Do It the Hard Way” and “The Complete Do-It-Yourself Guide to Business Plans” Both are available online or at your favourite bookstore in hard cover, paperback or e-book.

Business is Like Golf

Easy to get into trouble and hard to get the results you want.

golf drivingIt is the season again to get out and enjoy a round of golf. (Unless you’re one of those people who would rather eat sand than try to hit a golf ball straight for 400 yards and then roll it into a 4-inch cup.)

It is a very simple and enjoyable game, or it’s a terrifyingly frustrating challenge that can drive you crazy. Again very much like business, you can love it and enjoy it or hate it and avoid it like a bad case of food poisoning.

You might think you are sufficiently smart and talented to succeed, but you may fail miserably in your attempts at both. There is value, therefore, in recognizing that you can learn from golf how to do better at business.

Have a strategic plan, master the fundamentals, and focus on execution

The first step is setting goals and having reasonable expectations. If your objective is to be a world class competitor, you will have to start early and work hard to develop the skills, knowledge and experience to win. In golf, that means swinging a club by age six, practising every day until you make the college team, then dropping all distractions, like a social life or a day job, and dedicating every effort to perfecting the skills and mental attitude to win against the best in the world.

If it’s already too late for that or you are not motivated to that degree, then adjust your expectations. Maybe you will be satisfied with occasionally breaking 100, or making par on the odd hole or even a rare birdie might be enough to keep you going.

As you play the game and watch the pros more often, you will also notice that it is important to have a strategy for each round and for each hole. Like in business, choosing a strategy is the same process of matching your strengths and competitive advantage to the opportunities that are presented, while avoiding the risks associated with your weaknesses.

Achieving good results requires having the right strategy, making good decisions, mastering the skills to deliver according to your plan, and then focusing on execution in spite of the stresses and distractions presented by the environment and the competition.

Sound familiar? Business is like golf and golf is like business. Don’t you agree?

But please remember to enjoy the golf, especially if your intent is to take a break from the challenges of your business. You do not need more stress created by unreasonable expectations. Arnold Palmer has been quoted as advising an angry amateur he was playing with, “You’re not good enough to get that upset by a bad shot.” Another good lesson from the world of golf.

Have a good day, occasionally hitting one long and straight.

Your Uncle Ralph, Del Chatterson9781496932259_COVER.indd

Read more articles like this one at: Business is Like Golf Blog

Visit LearningEntrerpreneurship.com and join our mailing list for more ideas,  information and inspiration for entrepreneurs.

Check outUncle Ralph’s books, “Don’t Do It the Hard Way” and “The Complete Do-It-Yourself Guide to Business Plans” Available online or at your favourite bookstore in hard cover, paperback or e-book.

This article is an extract from Uncle Ralph’s, “The Complete Do-It-Yourself Guide to Business Plans”.  Read the book.

Recycle your Business Plan. Continuously

DIYcoverImageMy constant theme in working with entrepreneurs on their Business Plans is “It’s about the process, not the product.” So what is the process? It’s continuous recycling, rethinking, reviewing and rewriting.

Most of the advice on preparing a Business Plan is very uninspiring: Unconvincing reasons for doing one and entirely discouraging in describing the elaborate process of documentation and financial analysis. Not likely to persuade busy, results-oriented, document-challenged entrepreneurs that it’s a good idea and that they can do it themselves.

So I started to describe my own approach as recycling your Business Plan. That best describes the process I recommend: Start with a very simple document, then continuously review, revise and expand the plan to deal with more issues and answer more questions.

I’m reminded of the “million dollar napkin” that one entrepreneur boasts he used to start his business simply by responding to the challenge to put it all on a restaurant napkin. And there are the thousands of successful businesses that were launched “on the back of an envelope“. It’s a good way to start your business plan – describe it in a few words on one page

Here are the steps that I recommend to recycle your business plan. Each step is a version of your Business Plan that becomes more solid and detailed at each recycling:

  1. Describe the market opportunity, your concept, business strategy, company name and marketing slogan and explain the reasons it will succeed – on one page (or napkin, or envelope).
  2. Confirm that your personal objectives are consistent with your business objectives and that you have the all the skills, knowledge, experience and contacts required to get started (or explain how you will acquire them).
  3. Collect and analyse data on your market, customers and competitors that confirm both the business opportunity and your ability to meet customer needs against competitive alternatives.
  4. Do a business feasibility test at your estimated sales volumes, pricing and operating costs to determine profitability. Calculate the break-even sales level and compare it to your forecast sales.
  5. Document in more detail your business concept and strategy and all the operating plans for facilities, organisation, operations, marketing and sales. Add a section on the risks considered and your planned response to anything that may not go according to plan.
  6. Expand the financial analysis to include start-up costs, working capital required and the cash flow consequences to determine the financing required. How much, required when, and how will it be recovered? Test alternative scenarios to ensure that potential variations in sales forecasts and cost estimates will still lead to profitability and that financing will be adequate.
  7. Complete the business plan document and a full set of financial projections against a checklist of the requirements for your intended audience – management team, lenders, investors, or strategic partners. Add relevant supporting appendices.
  8. Then recycle the essential elements to capture your Business Plan in a two-to-three page Executive Summary, in a 2-minute elevator pitch, and in a 10-20 slide PowerPoint presentation for alternate forms of brief introduction to your plan.
  9. The final recycling step for your Business Plan is to continuously refer to it against your future operating results. After review, check whether the plan and objectives are still valid and then revise either your plans or your performance to achieve the objectives.

That’s it.

These few simple steps will take you from a good idea to a well-developed and fully documented Business Plan that will serve as a guide to management and will persuade others to invest in your plan.

Remember the objective is to arrive at a useful communications document that confirms the business opportunity, describes your strategy and operating plans and presents the supporting research and financial projections to prove that it will be a profitable and successful business.

Recycling is good.

Your Uncle Ralph, Del Chatterson

Read more at:Learning Entrepreneurship Blogs. 

 

Join our mailing list for more ideas, information and inspiration for entrepreneurs.

Click Here to check out Uncle Ralph’s books, “Don’t Do It the Hard Way” and “The Complete Do-It-Yourself Guide to Business Plans” Both are available online or at your favourite bookstore in hard cover, paperback or e-book.

 

 

This Real Life Story is loosely based on the real life experiences of your Uncle Ralph which he shares with other entrepreneurs in his book, “Don’t Do It the Hard Way.” Read the book.

Real Life Story: “You got to trust somebody.”

Business is built on trust.

trust somebodyYou have no choice. You have to assume that you can trust the people you are working with. You can never be sure that 100% are trustworthy, of course, but it’s best to follow the advice of Earnest Hemingway, “The only way to find out if you can trust someone is to trust them.”

Maybe take limited risks until you are satisfied, but learn quickly who is not trustworthy and then avoid them like a fatal disease. “Once burnt, twice shy.”

Developing trust is the final step in building a sustainable long-term business relationship that will be valuable to both parties. It starts with awareness and knowledge, then progresses to liking someone and continues to respect and confidence and finally trust. Remember to build your relationships along that progression and give no one cause to doubt your trustworthiness.

It must be terrible to be so paranoid that you constantly watch, worry, and attempt to police and control everybody around you, because you trust nobody. Maybe you were raised to think that way.

There is that familiar old story of the shopkeeper who took his eldest son into the store one day and said, “Son, today is the day I teach you the most important lesson in business.” So he took his son to the store and said, “Now climb to the top of that ladder in the stock room, then jump down into my arms.”

“But Daddy, will you catch me?”

“Of course I’ll catch you. I’m your father. Trust me.”

So the boy jumped and his father stepped back to let him crash to the floor and said, “That’s the most important lesson in business. Don’t trust nobody!”

Recent surveys of trust among different generations demonstrate that we are at an all-time low in levels of trust. Millennials expect only 20% of the people around them are trustworthy, while most other generations are closer to 30%. Still a discouraging statistic. Driven by non-stop news of new scams, hackers, corporate fraud and universal sharing of every event that shakes our trust in our fellow human beings.

But that’s no way to live or to do business.

To badly paraphrase Bob Dylan, “You got to trust somebody.”

Your Uncle Ralph, Del Chatterson

Read more at:Learning Entrepreneurship Blogs. 

 Join our mailing list for more ideas, information and inspiration for entrepreneurs.

Click Here to check out Uncle Ralph’s books, “Don’t Do It the Hard Way” and “The Complete Do-It-Yourself Guide to Business Plans” Both are available online or at your favourite bookstore in hard cover, paperback or e-book.

 

 

Responding to Challenge #1:

Strategic Leadership & Management Effectiveness

Keep your Balance

balanceIt is easy for owner-managers to get pre-occupied by the daily demands for attention – chasing opportunities, resolving customer complaints, managing employee performance, satisfying business partners, governments and the bank.  Stepping back to look at the big picture and assessing performance against the original strategic plan is easily neglected.

That remains the entrepreneur’s No.1 Challenge: balancing the need for strategic leadership with the demands for operational effectiveness.

Too busy fighting fires to work on fire prevention?

To succeed in building a long-term sustainable business, it is essential that owner-managers find the appropriate balance in applying time, effort and resources to both strategic leadership and operations management.

Two issues, three steps to success

My approach to managing that balance is to apply the same three steps to each issue.

Strategic Leadership

1. Assess performance

Continuously assess market conditions, customer feedback and the competitive landscape. Check that your intended strategic positioning, branding and corporate culture are in line with current customer and employee perceptions.  Confirm that you are correctly matching your strategic and competitive advantage to market opportunities

2. Revise the plan

Review and revise, if necessary, your strategy, concept and business model.  Update your Business Plan and marketing communications strategy.

3. Make improvements

Launch the new plan internally and provide strategic direction and support to the management team. Prepare new marketing communications and sales tools and take them to market.

Management Effectiveness

1. Assess performance

 Regularly assess operating and financial performance by monitoring key indicators against your plan, industry averages and the best performers in your business.Survey employees and customers for satisfaction levels and feedback on areas for improvement.  Maintain current and effective employee performance reviews for management and staff.

2. Revise the plan

Identify deficiencies and set new objectives for performance improvements. Update the Business Plan and internal performance objectives for management and staff.

3. Make improvements

Define and develop improvement projects and provide necessary management support and resources to achieve the objectives.

A simple process, but not easy. Achieving balance in managing business strategy and effective operations is still a challenge.

But worth continuous attention.

Your Uncle Ralph, Del Chatterson

Read more Learning Entrepreneurship Blogs. 

 

Join our mailing list for more ideas, information and inspiration for entrepreneurs.

Click Here to check out Uncle Ralph’s books, “Don’t Do It the Hard Way” and “The Complete Do-It-Yourself Guide to Business Plans” Both are available online or at your favourite bookstore in hard cover, paperback or e-book.

 

Beating one competitor at a time

Strategies for Match Play

two-golfersMost golf tournaments are stroke play, which means each golfer is trying to win with the lowest number of strokes over four rounds of 18 holes. In match play, each golfer it’s trying to win one hole at a time against one competitor at a time. You still have to play well, but the strategy is very different.

In stroke play, every stroke counts against the total over four days. You are effectively competing against the whole field of golfers over four days. In match play, you win or lose one hole at a time, so a bad hole and those extra strokes only count once. If your competitor is even worse on that hole, you can still win it. At the end of the day, the winner is the golfer who wins the most holes against his opponent on the round. Deciding on the cautious or low risk shot versus the aggressive or challenging shot, depends on how your opponent is doing on that hole and on the round against you. It’s a one-on-one competition, not the usual game of every golfer against the golf course.

Lessons for entrepreneurs:

In business, you also have to play your best game every day to win against the market. But sometimes, it’s you against one competitor in particular to win one specific customer. Adapt your strategy and game accordingly.

Play your strength against the competitor’s weakness. Focus on the customer’s currently perceived deficiencies in product performance, price or service. Provide a clear response to those deficiencies with your solutions that will fit the specific customer’s needs.

You may not win every round. But you can win; one competitor at a time, one customer at a time.

And you will continue to get better at the game,

Your Uncle Ralph, Del Chatterson

Read more articles like this one at: Business is Like Golf Blog 9781496932259_COVER.indd

Visit LearningEntrerpreneurship.com and join our mailing list for more ideas, information and inspiration for entrepreneurs.

Check outUncle Ralph’s books, “Don’t Do It the Hard Way” and “The Complete Do-It-Yourself Guide to Business Plans” Available online or at your favourite bookstore in hard cover, paperback or e-book.

 

This Real Life Story is an extract from Uncle Ralph’s, “The Complete Do-It-Yourself Guide to Business Plans”.  Read it.

Real Life Story: “Don’t take that to the Bank”

It started with a phone call, “Hi Del, we found you on the Internet”. A week later, I was sitting down with Peter, Paul and Mary to work with them on their start-up Business Plan.

Peter and Paul were two experienced executives in the computer hardware service business and Mary was Paul’s wife. They wanted to quit their current jobs and start their own computer services business that would succeed where their current employers were failing. They had the necessary knowledge, experience and contacts to quickly get up to speed and win business from competitors. (Those are the three pre-requisites I always ask the entrepreneur to check-off before starting.)

But there were two major flaws in their initial plan. First, they had an unnamed additional partner who was currently the Purchasing Agent with a customer of their current employer and he was promising to switch that large contract to their new business. Oops! That would probably be a firing offense as a conflict of interest for the Purchasing Agent and a breach of their own employment and non-compete agreements for Peter and Paul. So I persuaded them to leave the third partner out of the deal, at least until he also had left his current job.

The second major flaw in their plan to attract both suppliers and customers was to offer very generous payment terms. The exact opposite of the often recommended cash management policy of “collect fast and pay slow”, they intended to let their customers pay slow and pay their suppliers fast. They saw it as a key competitive advantage and it would certainly have been attractive for their customers and suppliers, but a disaster for their financing and profitability.

Also not something to take to the bank to generate confidence in their management capabilities and the likely success of their plan. So we reverted to normal industry payment terms and focused instead on leveraging their strengths of market knowledge and technical expertise to attract customers and suppliers. That not only made the plan more presentable, but also reduced their start-up financing requirement from over $100,000 to less than $40,000.

These were valuable changes to their Business Plan resulting from the all-important process of testing strategies and plans to see the real impact on operations and financial results. That is the real value of preparing a Business Plan: arriving at a workable strategy and operating plan for management. Not just a document to submit with a request for financing.

After the revisions, they did succeed in getting financed and two years later the business was growing fast.

(Note: In all these Real life Stories, the actual names and business details have been changed to protect the innocent subjects involved in each story. Their stories are told here only for the purpose of helping other entrepreneurs get better results from their Business Plans.)

Your Uncle Ralph, Del Chatterson

Read more at: Learning Entrepreneurship Blogs. 

 

Join our mailing list for more ideas, information and inspiration for entrepreneurs.

Click Here to check out Uncle Ralph’s books, “Don’t Do It the Hard Way” and “The Complete Do-It-Yourself Guide to Business Plans” Both are available online or at your favourite bookstore in hard cover, paperback or e-book.

 

Enlightened Entrepreneurship – Part 2

I have recommended the concept of enlightened entrepreneurship.  Others are also using the term, but we do not have a common understanding of “enlightened entrepreneurship.”Some people apply it to define a very spiritual or humanistic approach to business and others confuse it with social entrepreneurship, where the purpose of the business is to meet the needs of society more explicitly than the needs of the market.

My concept of Enlightened Entrepreneurship:

Business leadership that recognizes that doing better for the business also means doing better for employees and their families, for customers and suppliers, for communities and the planet. Enlightened entrepreneurs manage their business to achieve its economic objectives while also recognizing and meeting its social responsibilities. Not because it is good marketing or just to feel good, but because it is the best way to build a sustainable business.

 

Consider the meaning of “enlightened” from the historical context of the Age of Enlightenment or Age of Reason, which dominated philosophical ideas in Europe from early in the 17th Century.  The principal goals of Enlightenment thinkers were liberty, progress, reason, tolerance, fraternity, and ending the abuses of the church and state. The ideas of the Enlightenment played a major role in inspiring both the American and the French Revolutions. (Ref.: Wikipedia)

Over the last two centuries, Western societies have experienced increasing individual freedom, less dependence on central authorities and the rise of capitalism and free enterprise.  Early in this period (1776), Adam Smith published “The Wealth of Nations” and first described the principle of the invisible hand guiding entrepreneurs to unintentionally contribute to the greater good of society.

Quote: He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By …  directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. … By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it.” (Book 4, Chapter 2)

But the excesses of the industrial revolution, exploiting workers and concentrating wealth and power in the hands of a few, caused reactions in worker revolts, the rise of trade unions and the ideas of Socialism.

In the 21st Century, we still observe capitalist excesses driven by greed and ego that exploit workers, concentrate wealth and neglect the needs of society. The opposing forces are still battling: some defending capitalism and free markets as delivering prosperity and others blaming corporate CEO’s, entrepreneurs and their political supporters for all the ills of the modern world.  We cannot keep our heads down and ignore these issues while “taking care of business.”

Enlightened entrepreneurs know that they can no longer rely on the invisible hand to help them protect the public interest and meet their social obligations and responsibilities. The modern world is more complicated and modern society is more demanding. The entrepreneur needs to be more aware and more explicit in responding to the demands of the world around him beyond meeting his business objectives.

The next step for Enlightened Entrepreneurship is for us to practice it, promote it and defend it.

Your Uncle Ralph, Del Chatterson

Join our mailing list and share more ideas, information and inspiration for entrepreneurs. Click here.

Visit also: LearningEntrepreneurship.com:

 

And check out two new books by Uncle Ralph, “Don’t Do It the Hard Way” and “The Complete Do-It-Yourself Guide to Business Plans.” available online or at your favourite bookstore.  To learn more or buy a copy: Click here