Business Startup Support
The Need For Business Startup Support?
As the research shows, about 90% of small businesses will fail within 10 years. When you consider that most small business owners fail to plan in enough detail before launching their business, these sad statistics come as no surprise.
In the Venable Consulting "5 Steps to Freedom" rubric - business startup support is critical to the success of a new business and covers taking a business from Phase 1 Creation, through Phase 2 Chaos, to Phase 3 Control, which is where a business owner is finally able to see consistent cash flow and have tangible things that they are able to organize, measure and adjust.
As a Florida business coach, we're passionate about small business success which is why we want to help businesses get off to a great start by providing the guidance and tools necessary to win.
Ideally, prior to launching a business, the business owner should have the following in place:
- A unique selling proposition, guarantee or positioning statement for their intended market.
- They should have identified their ideal client - who the key demographic is, why they buy and how to map that demographic within a geographic area.
- A well thought out budget that includes a sales forecast that you can absolutely hit.
When it comes to creating a budget, we're essentially finding out if money needs to be raised, and if it's not possible to raise money, we have to set a longer-term trajectory that factors in reinvesting the business profits to allow the business to grow.
As a side note, when people buy an existing business, or if they buy a franchise, all of this is supposed to be in place.
Research • Model • Launch
At Venable Consulting we have five best practices for the Creation phase which we like to call “silver bullets”, a metaphor for a simple, seemingly magical solution for a difficult problem.
The order in which we do this in is as follows:
Unique Selling Proposition (USP) and Guarantee
A persuasive value proposition that removes risk and compels your ideal customers to do business with you, instead of your competitors, because you’re different from all the rest.
Revenue & Profit Budget
A reliable budget that forecasts discretionary cash-flow, identifies your required working capital, and demonstrates your ability to service debts and deliver a return to investors.
A business is going to have to invest money and time, and time is money when you have the carrying costs of people, rent, equipment, etc. The budget also needs to include a very accurate sales forecast, as well as the balance sheet items required to grow a business and hire new employees. For example, if you have office space you might need a little more allocated for the new hire. You might need capital expenses for a computer, software, a desk and a chair.
An evolving, written plan that sets forth the vision, mission, and values of your company, long and short-range goals, and KPI’s to measure progress, so that your team moves together as one.
This is the whole purpose of the business. When the strategic plan is finished, there should be a big, hairy, audacious goal, looking out as far as 20 years, an enormous goal. For example: like Bill Gates when he said “a computer on every desk” when he created Microsoft, and eventually achieved it.
Current Business Plan
A credible written plan, detailing a company’s unique selling proposition, strategic plan, revenue and profit budget, designed to induce financial partners to invest in the business.
The current business plan essentially summarizes what an investor or bank has to see to feel comfortable making an investment or providing a loan to the business. The business plan has to have things built into it like a liquidation or exit strategy, and a liquidity event for the investor. For most privately owned businesses, investors just want to loan money as opposed to taking equity in the business. With a plethora of different financing options out there, some of which are very treacherous and unsuitable, it’s important for us as business coaches to understand how they work so we can help guide a business owner to making the right decision. One thing Venable Consulting is particularly proud of is that our business plans are very successful in raising money, with over $5,000,000 raised so far this year.
Bookkeeping and Accounting System
A system of detail and up-to-date financial records, compliant with laws used for easier planning, instant reporting, better relations with banks and investors, faster business response to issues and faster financial analysis.
This is a crucial step that should be done by a third party who can reliably vouch for, validate, and attest that the numbers are correct and shows a use of funds and a project plan over time. The bookkeeping and accounting system allows us to speed up the strategic plan (grow the business faster) by being able to go to a lender or investor for investment capital to supplement the working capital available through cash flow alone.
Invest • Grow• Team
For the Chaos step we have 4 best practice (or magic bullets):
Break Even Plan
A multifaceted plan to cut expenses just enough to stop the bleeding of cash while relentlessly selling enough to cover your essential costs, including personal drawings and debt service.
You have to know at what point you’re going to get your head back up above water. Keep in mind we are often working with investor’s money, so it’s critical to be careful with how the money is spent. For example, we don’t want to blow it by hiring the wrong person, and then having that same expense again. When we work on the budget, we have to anticipate that things can go wrong. There has to be a risk management strategy and quality control plan in place to limit losses, but preferably a business needs enough money so that they can have more than one time at bat, especially when it comes to something as critical as an employee, as they are the most expensive resource in a business.
Tactical Marketing Plan
An aggressive, measurable plan to increase your leads, improve your sales conversion rates, and increase your average spend per customer per year, so that your profits increase exponentially.
And at this point the business is investing money in testing and measuring the marketing messages and channels in order to learn about its customers and find the best marketing mix. For example, you create 10 messages across 10 channels so that there is a matrix of 100 marketing messages to discover which channels (web, social media, email marketing, print, radio, etc.) work best for the business, along with how messages perform on different channels. Equally important is that you discover what doesn’t work.
Sales Management System
A practical system for building a top-performing sales force by scripting their approach, managing their activity with a CRM (Customer Relationship Management) solution, measuring their performance, and importantly learning how to budget and tie their paychecks to results.
Team Building System
A reliable system for placing your team members in roles best suited to their strengths and building them into a powerfully cohesive and committed team that delivers business results.
The Chaos phase is all about is investing in infrastructure, equipment and people. You will learn to grow the business and the team, and then get your nose above water.
Organize • Measure• Adjust
In the control phase we focus on the following 5 best practices (or silver bullets):
Cash Gap Plan
An efficient plan to quickly collect your outstanding receivables, get your customers to pay faster, and negotiate better terms with your vendors so your bank account always has plenty of cash in it.
We going to keep track of what time money comes in and at what time money goes out. We are going to balance between accounts receivables and accounts payables with a goal of getting to a zero-time inventory.
Key Performance Indicator System
An elegant system for measuring and reporting the critical numbers in your business so everyone knows how their efforts are either making or breaking the business.
You can’t manage what you don’t measure. Within each role that is critical to the success of the company there are key performance indicators that let you know if your employees are doing a good job or not.
For example, for a musician in an orchestra we can measure how many notes they got right and wrong, were they in tune, did they phrase well, did they blend well with everybody. There are KPIs that we would have in a music situation to determine whether a particular player is good enough to be in that chair.
In a business you do exactly the same thing, just the KPIs are going to be different. In sales you want to measure activity and effectiveness – how many dials did they do? If you want them to do 100 dials, they should have an activity quota as well as a sales and effectiveness quota. If you discover anyone that’s not hitting their quota, you have to have a way to do an intervention in order to develop a performance incentive plan.
Performance Incentive Plan
An incentive plan that rewards your team members for exceptional performance and motivates them to work as hard as you do and care about the business as if it was their own.
Employee Acquisition Plan
A practical plan to win the battle for top talent by consistently generating more than enough leads, screening out non-performers, and using a skills-based test-drive process and psychometrics to choose team members that deliver results.
You don't want to waste time, but you cannot afford a poor-quality hire. You must spend enough time to make sure you're getting the right people and induct them properly. And if you can’t induct them, they are the wrong candidate.
Psychometric Profiling Process
A proven process for avoiding mis-hires by using psychometric assessment tools to evaluate and de-select candidates based on position-specific benchmarks.
We like to use psychometrics to choose team members that deliver results. We like the Big Five Personality Traits by Jordan Peterson, which you can read more about at understandmyself.com
If you’re in the beginning stages of starting your business, and want to find out more about how we can help you on the path to success, or avoid a painful experience, call us today at 754-333-2003 for a free initial consultation.