Tag Archives: planning

This Real Life Story is an extract from Uncle Ralph's, "The Complete Do-It-Yourself Guide to Business Plans".  Read the book.

Real Life Story: “Don’t quit your day job, yet”

skydivingMany young daydreamers, and older ones that should know better, see entrepreneurship as their escape from a day job that is not meeting their needs.

“Running my own business would be better than this!”

Well, maybe not. The same reasons that you are not succeeding on the job may also be big obstacles to your success in business. And entrepreneurship will test skills and capacities that you have not tested before.

Consider the old IBM sales executive that retired early and …, bought a hot dog franchise. He probably used none of his skills and experience from IBM and then discovered he did not have the patience or aptitude to manage low-budget customers and low-skill employees. Neither a good investment nor a good career decision.

Or consider the frustrated young computer technician who wanted to sell his skills directly to all those home office users that needed his expertise, instead of working so hard for a demanding network services manager and having to run around big corporate offices where nobody appreciated him. We chatted about it and he wanted me to help him write a business plan. He wanted it to get a bank loan so that he could pay himself, until he found some customers and signed some contracts.

Sounds reasonable, right?

Not a chance. No bank would ever finance that plan.

I had to persuade him to stop daydreaming; keep his money and keep his day job. A better plan was to upgrade his technical skills and get some experience in management and sales with his current employer. The he could launch his own business with confidence in the same attractive corporate services market that he already knew. Too many unhappy computer technicians are already under-employed and under-paid in the difficult home office market. He kept his day job and started on a new plan.

- - - - -

Learn more at: Look before you leap.

(Note: In all these Real life Stories, the names and business details have been changed to protect the actual subjects of each story.)

Your Uncle Ralph, Del Chatterson

Read more at: Learning Entrepreneurship Blogs. 


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Forget forecasts

They're useless.


It is that time of year when everyone seems compelled to make forecasts. The experts insist on giving us their version and they decide either to be safe and predict more of the same or to be outrageous and predict something extreme - Canadian dollar at US$0.59 or oil back to $100!

We should ignore them all; they're useless. I have worked on many; in plans and projections for my own businesses and for clients.

It is useful to remember before starting that they are all part of the fiction we are writing to convince ourselves or someone else what we hope will happen. It would be better to describe them as "reasonable expectations." All we know for sure is that the forecasts will be wrong. We just do not know by how much or in which direction.

So if we cannot predict the future, what can we do?

Our primary objective should be to understand our business environment - the competitive landscape and the economic conditions. The real issues to understand are the trends, the causes and effects, the alternative scenarios we need to be prepared for and the most likely ones to occur.

Then we have something we can work with.

Happy forecasting!

Your Uncle Ralph, Del ChattersonDon't Do It the Hard Way

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

Bplan-2015-1Entrepreneurs often find themselves working hard to prepare a Business Plan, because the bank asked for one.  So they spend a lot of time and effort, and sometimes a lot of money, to prepare a very elaborate documented business plan with all the supporting facts and figures and extensive financial projections.  And the bank still says no.

It's a painful lesson: a good business plan is not enough.  It is necessary, but not sufficient, to get financing.

The first question most potential investors and lenders ask is, "Can I see your Business Plan?" And usually the entrepreneur needs help with the strategizing, documentation and financial analysis to put one together. But I always ask entrepreneurs to confirm that they can meet all the other requirements before committing time and resources to a Business Plan.  Too often after we have spent time and effort together to prepare a solid business plan that confirms the prospect of a viable business and the potential returns to investors and lenders, we then discover that the owners cannot deliver on the other requirements that we should have known from the start. So what else is required?

Lenders and investors have a checklist. It includes more than the request for a Business Plan. Be sure you are aware of the whole list and that you can meet all the other requirements before delivering your Business Plan.  Remember the first requirement is to invest sufficient cash yourself (or from the three F's  - friends, family and fools) before you ask for more cash from the cold-blooded banker or investor who is neither friend, family, nor fool.

Here are some more observations from experience with borrowers, bankers and investors:

1. They will not get it.

Start by accepting that your lenders will never fully understand what you do for a living or why, your motivation, your challenges or your circumstances. But you do have to try to get them to understand enough about you and your business plans that they can be confident that working with you will be good for them.

Remember their objective is to earn a return on their investment and limit the risk of losing any money. Learn to speak their language and address their needs.

2. It's only for the money.

You will need to prove that their money is all you need; because you have already looked after everything else.Bplan-2015-2

The banker or investor does not want to worry about your customers, your management team, your sales and marketing efforts, your operating efficiencies, your health, your marriage or anything else except the financing you need.

3. They do have a checklist.

When you meet and fill in all the forms, remember the banker wants to be satisfied on these five criteria:

  • Character – do you have a reputation of integrity and responsibility on prior financial obligations?
  • Capital – do you have enough personally invested in your business to also be at risk?
  • Capacity – does your business have the ability to support the cash flow requirements?
  • Collateral – if your business cannot support the loans, what assets are available to cover them?
  • Conditions – is your industry in good economic condition or in a downturn?

Good answers on these points will provide the start to a good relationship with a confident and willing partner instead of tentative support from a cautious and reluctant partner.

So be prepared to meet all the requirements in addition to a good Business Plan and you are more likely to get the green light for GO!

Good luck. That also helps.


Bplan strategyWe start the year in uncertain and dangerous times.  We have been here before and it has been even worse in the recent past, but planning and management in this environment has us wondering about the impact on our businesses. What are the right management strategies and action plans to get through this year and build a more resilient and successful business?

Here are the lessons we have learned in the past:

1. Do not react to the headlines. They are primarily trying to get your attention and a train wreck, death and disaster are always more interesting than a business success story. You will not likely get balanced or insightful input to your planning or decision making. You will have to dig deeper. Make sure your market feedback and competitive analysis are current and accurate.

2. Communicate. Communicate. Communicate.  Keep employees and customers informed. They are also worried and confused and need to be reassured that they can count on you. You may not have good news for them, but it will be appreciated that they are hearing directly from you and are not left guessing what's next.

3. Keep on Selling. Now is not the time to cut back on marketing and sales. Your efforts now will be even more conspicuous and effective if your competitors are reducing their marketing and sales efforts. Be selective and very focused. Work on building stronger customer relationships by being relevant and responsive to the current circumstances.  Calmness, confidence and competence are much more appealing to those potential buyers who are still spending and want reliable, long term suppliers.

4. Do quickly what obviously needs to be done. If it’s clear to you it's also clear to the people affected. They are waiting for you to act and will be more confident and proactive themselves if they see you taking action. Face the facts, don't fight the facts. 5. Adapt. Remember Darwin's "survival of the fittest": those who adapt to their environment are most likely to survive; not the strongest or the biggest. This is not the time to be stubbornly persistent about your plans. Look around and be creative. Your destination may still be the same, but the route, the vehicle and the passengers may need to be changed.

6. Be confident, but cautious. Recognize the difference between taking a calculated risk and taking a wild swing hoping for the best. Make a decision if the potential outcomes and the probabilities are reasonably clear, but hold fire if they are not.

7. Show conspicuous leadership. This is not the time to hide in your office.  Strong leaders understand the need to be the most conspicuous communicator on current issues. No one can do it better than the one who is ultimately responsible for taking action. We may not all be adept at it, but we can all speak with more sincerity than any spokesperson or intermediary on our concerns, our strategies and our plans.

Good management will be tested again this year, but good decisions will mean a better business for the future.  Keep at it and better times will follow soon. Stay hopeful and optimistic.

Happy New Year,

Del Chatterson

© January 2015