Grand Enterprise Initiative
Free & Confidential Business Coaching
Posted on December 18th, 2018

Many people who want to start new enterprises or expand and improve their existing businesses feel intimidated by the idea of having a business plan.

For some, the idea of writing anything, business plan or not, is daunting. Beyond that, the idea that a person would have to do financial projections, draw up a mission statement and figure out a marketing plan just seems, at first blush, like too much.

But an effective business plan doesn’t have to be rocket science. And as I tell my clients, they don’t have to write all of it. The members of their team (marketers, sales people, financial managers, etc) can help write the aspects of the plan that apply to their fields of expertise.
So what are the elements of a good, basic business plan? From my perspective, it involves asking and then answering these questions:

1) Who is my customer? This seems self-evident but asking this question and answering it honestly in the plan goes a long way to determine the product or service itself along with marketing.

2) Why is the customer going to buy my product or service? This involves some honest questioning about what drives the value proposition of a product or service. What makes it unique? What makes it worth something?

3) How will they hear about my company? This is a basic marketing question that makes an entrepreneur come to terms with exactly the way in which his or her business will become known. (And, no, Facebook should not be the only way a business is known.)

4) How will the entrepreneur do the business? Once again, this seems like one of those obvious questions, but . . . this comes down to the nitty-gritty. Who will make the product and how? Who will offer the service and where and when? Who is going to open the door in the morning and who is going to answer the phone and reply to e-mails? How will you know if the product or service is good or bad? Who is the boss? Some businesses draw up operation agreements and operation plans that take up pages just to address this seemingly simple question.

5) How much will the product or service of this enterprise cost? Cost, that is, to the owner and then cost to the consumer.This financial planning question forces an entrepreneur to figure out if he or she can make money on a fairly priced item. It’s fairly common for people to overestimate by double or triple the price that a product can command on the open market. We’d all be millionaires if we could just make a simple product and sell it at four times the costs, assuming people will pay that price. But the problem is that it’s a competitive world out there and products or services many times simply won’t sell at a price that makes it worth doing. This simply question cuts right to the core of a business idea, encompassing marketing, competition and simple efficiency.

6) How much will the owner make? This drives right to the core of those ever-important expectations a person might have for their enterprise. Rather than simply assuming that the owner / operator will wallow in the great profits, this question puts a numerical value on what for some people is a vague concept. Put what the owner realistically wants to make in cash flow projections and see if it works. If not, some expectations and ideas need to be massaged.

7) Where does the owner / operator want to be five years from now? Is this business being started with the goal of selling in five years? Does the owner desperately want to be working away diligently in the back room far into the future? Is the idea to grow the business into many other branches or side-businesses, all springing from the same core idea? Or is the business being started to break even or even lose money as a tax benefit? These are serious questions that hit at the core of why a person wants to be an entrepreneur. It’s good to try and answer them ahead of time, not when five years rolls around.

For anyone pondering an entrepreneurial idea, answering these questions will do a lot to clear the air and get started on the right foot.

Patrick Brower can be reached by calling 970-531-0632 or at patrickbrower@kapoks.org.

Posted on December 11th, 2018

I have to give credit to Jerry Nissen of Channel 18 television for reminding me of this great business catch phrase.

Plan your work. Then work your plan.

In the course of meeting with more than 200 clients through my work with the Grand Enterprise Initiative here in Grand County, business plans and their importance is a constant topic.

Why should people have a business plan if they are considering a new business? Or why should people have a business plan if they are considering expanding or amending their current business?

There are simple and hard-to-avoid reasons for having a business plan in hand for any aspiring entrepreneur.

First, if a person is setting out on a business venture that is going to involve asking for capital, whether through a loan or a grant, a business plan is a must. For starters, no banker is going to lend money to someone who does not have a business plan in hand. It’s that simple.

And for the many non-profit entities I’ve worked with, they know that they must have a business plan as well. No granting agency, no matter how beneficent and well-intentioned, is going to grant or loan money if the entity wanting the money doesn’t have a business plan.
I like to remind non-profits that even though they are non-profits, they still need to be run as businesses.

Even in the cases where entrepreneurs are hoping to borrow money from friends or relatives, a business plan is a must. No matter how cordial, familial or friendly the relationship, anyone who is going to lend an entrepreneur money is going to want to know that the person to whom they are lending money has a plan.

So when it comes to getting capital for a business, no matter how informal, a plan is of critical importance. The real reason this is important is simple. They want to be assured that they will be re-paid for any loan they make. A business plan can help give some assurance about the ability of the lender to repay the loan.

So that’s the practical reason for having a business plan. But I think business planning has another extremely important value that supersedes the mere nuts and bolts of showing how a business can re-pay a lender.

A business plan is also a great way for an entrepreneur to educate and reassure herself. Just the process of planning a business, using most any of the business plan templates or examples that exist out there, should help a person really evaluate their new business or business expansion idea.

A good business plan should first and foremost make the entrepreneur ask: What is my business? What makes this a business rather than a hobby? Why do I want to do this business? What are my expectations for this business? Do I want to get filthy rich or just break even?
Sometimes it’s a great revelation when a person is asked this simple question for a business plan: What is your product or service and why will people want to buy it? That seems like the most obvious and self-evident question to ask, I agree. But it rests at the core of most people’s ideas for a business. Through evaluation of that question people may discover they have multiple business ideas, business ideas that might not sell well or conflicting ideas of what exactly their business is.

Maybe, alas, their idea isn’t a business at all.

And ultimately, I know that people then ask themselves something that goes above and beyond “business.” They get into life and goals planning. They ask critical questions like: Why am I doing this? What’s my real goal here? Are their alternatives to reach my goal without having a business? It can go on and on.

So, in reality, if someone starts a business plan honestly and with the right questions, it becomes more than just a business plan.

It becomes a life plan.

Next I’ll cover some of the basics that should go into any business plan.

Patrick Brower can be reached by calling 970-531-0632 or at patrickbrower@kapoks.org.

Posted on December 4th, 2018

It doesn’t do a small business any good to have the greatest product and service in the world if nobody knows about it.

That seems self-evident, doesn’t it?
But the truth is that many people in the business world — both people starting up and existing businesses — don’t really appreciate all the real-life implications of letting “the world” know about their businesses.

Even I myself in the course of my work helping people start or expand businesses in Grand County need to be reminded of the critical importance of “letting the world know.”
It’s impossible to tell the world about a business effectively if a person can’t simply and succinctly explain what it is they do or sell. Even better, it helps to explain it in a way that uniquely defines the business so it stands out in the minds of all those people out there in the world.

As a person plans his or her business this is a critical consideration. In writing a business plan the very first section is something called the executive summary. This part of a plan should contain a simple, clear and unique description of what the business sells or offers. This is extremely important because the executive summary is the “selling” part of a business plan. It’s the part that makes a potential lender, investor or other interested party to read on and take an interest in the business.

The description is also critical because it must be merged with the marketing plan section of the overall business plan. It incorporates the business description and unique position into every single aspect of the marketing. This includes the concept of the business, its name and the way it is marketed.

When I say the way it is marketed I mean every aspect of messaging. Advertising, tweeting and social media chatting has to incorporate the business’s purpose and how it is unique in the market place. This messaging must be consistent and distinctive. By consistent I mean the name of the business and its brand must incorporate the key business message. Any web page must have the key message phrases built into keywords and hidden text, in headlines, body copy and in photo or graphic captions. Any blogging on the site must incorporate the unique message that simply and clearly states what the business does that makes it unique.

Any advertising — whether it’s print, TV, radio, flyers, graffiti, bumper stickers or sky writing — has to include the key messaging, all the time. Any person-to-person interaction (word of mouth) that involves mention of the business has to include this concise business description.
So the name of a business and its key message is of critical importance.

In my opinion, any good marketer will take a lot of time right of the bat helping a business understand what it is they sell or do and how to make that service or product stand out as unique. But first that requires some careful soul searching so that the owner or entrepreneur can really drill down on what his or her business is all about.

Some people may balk at paying for time with a marketer that seems to be nothing more than an initial encounter and brainstorming. But if a marketer knows what he or she is doing, they are getting down to the essence of the business and coming up with a brand, image and key phrase that clearly and succinctly expresses what that business is about. This is not easy to do but it is of critical importance. This then evolves toward logo development and hiring of staff that reflects the vision behind the basic business mission.

People will get caught up in all the different types of marketing and advertising there are out there. But it all must be driven by one key question: What is your business and what makes it unique?

The answer to that question should inspire any business plan and the business itself.

Patrick Brower can be reached by calling 970-531-0632 or at patrickbrower@kapoks.org.
 

Posted on November 13th, 2018

Many people wanting to buy, start or grow a business don’t have the cash they need to do so.
I wish I could say that I have money or have access to money for these business people. I don’t. But I do know about how to steer people toward sources of money.

The very first rule in the search for capital is this: Don’t expect anyone to loan or give you money if you don’t have a clear business plan that demonstrates a feasible business purchase, idea or expansion. Not only does this plan have to express a good idea, it also has to demonstrate to a lender that the borrower will be able to pay the lender back. If a person wants a grant, the granting agency may not want to know how the business will pay it back, but it will want to know that it’s funding a viable, sustainable enterprise.

The best source for cash needed to buy, start or expand a business is personal savings. Not “other people’s money” (OPM) but “your own money” (YOM). Which brings me to a bit of advice. Anyone thinking about starting or buying a business should start saving money. Yesterday.
Another great source of cash for such ventures is friends and family. If an aspiring entrepreneur doesn’t have enough in savings to make a deal work, then ask around to people you know. You’ll have to convince these people of the merit of your venture (hence the business plan), but usually these “lenders” are easier to deal with than traditional financial institutions. In other words, they might not want an extensive application filled out and they might be a little bit more lax if times get tough.

And then there are grants. When people ask about getting grant money to start or fund their businesses I always say that yes, there are grants out there. But grants are difficult to get and usually they aren’t for a normal, for-profit business venture. Yes, there are programs out there for woman, various ethnic groups and the financially challenged, but the truth is that those grants are extremely difficult to get for a for-profit business.

Then there are loans from established lending groups or institutions. There are eight banks or lending outfits in the county who would love to make money by lending money. That’s what they do. There are also other outfits (Northwest Colorado Loan Fund, Colorado Lending Source, etc) that specialize in working with businesses in the mountains. These are excellent sources of capital.

But they don’t just “give” money away. First, they’ll want to know the acquisition or business is a good idea (back to the business plan). Second, they are going to want some good assurance the borrower will be able to pay them back (business plan, again). And they will want collateral or protection for what they lend, usually at a percentage that is lower than market value. These institutions then charge an interest rate that is higher if the risk is higher and usually closer to the market rate if it’s a well-protected and “safe” loan.

Another source of start-up or acquisition funds can be gotten through partnerships. In its simplest terms, this means giving a percentage of ownership in a company to someone who buys in.

And then there’s the new trend of  “crowd-funding” or Internet begging. This is worth considering, I suppose, but if people are donating to a business that’s going to make the owner lots of money, then those people who are “donating” may really think of that as “investing” and then they’ll want returns on their money and the situation gets very complicated.
And so-called “Angel” investors usually don’t contribute a dime without having at least a 51% ownership stake in the venture. Beware of such “angels.”

Capital is one of the most important ingredients needed for starting or expanding a business. It’s not always easy to get, but with a good idea, a will to work, decent collateral and a good business plan, it can be acquired. Then it’s time to put the capital to work and succeed.
After all, that’s why we call it capitalism.

Patrick Brower can be reached by calling 970-531-0632 or at patrickbrower@kapoks.org.
 

Posted on November 7th, 2018

Ernesto Sirolli said it best: There is a direct link between entrepreneurship and the wealth of nations.

Let me make that focus local. There’s a direct link between entrepreneurship and the wealth of regions.

The wealth and prosperity of our little region here in Grand County can be directly linked to the spirit of entrepreneurship right here in Grand County. In Winter Park, Fraser, Tabernash, Granby, Grand Lake, Hot Sulphur Springs, Kremmling and Parshall (yes, even in Parshall) aspiring entrepreneurs have been reaching out for help to succeed in small business. That’s what we can all be thankful for here in Grand County — a growing entrepreneurial culture.
How do I know this is happening, right here in Grand County?

First, consider this: In three-and-a-half years the Grand Enterprise Initiative has given free and confidential business management coaching to 215 aspiring entrepreneurs. In a county of 14,000 inhabitants, that’s a significant reflection of this region’s entrepreneurial spirit. The result has been 24 new businesses, 9 new jobs and more than $5 million of new annual sales for the local economy.

Second, consider the work of the DiAnn Butler and the Grand County Office of Economic Development. Just last month she helped 18 entrepreneurs take part in John Shallert’s Destination Bootcamp series in Longmont. These are all local business people who aspire to improve their businesses and succeed. That office has also helped many other local business people through hands-on classes in marketing, accounting and networking to help them improve. How many businesses and entrepreneurs have been touched through these programs? Well more than 400.

DiAnn and I work closely together to connect the dots for all of these aspiring and existing entrepreneurs so they can have the resources in line to succeed.

But the point here isn’t really our work. It’s the entrepreneurial spirit of all the local small businesses who reach out in an honest desire to succeed. Their ambition is what makes our community grow. Their ambition is what creates an increasingly vibrant economy that is growing, slowly but surely.

If you don’t think it’s growing, just consider the expansion in local revenues derived from sales taxes throughout the county in the last two years. Increases have ranged from 10% to 25% annually. These are taxes that pay for local government at the county and town levels and which help pay for important community services. Consider the fact that there are many more jobs available in the county than there are people to fill them. Consider the fact that real estate sales are climbing and that inventory is dwindling, fast.

For much of this we can give thanks for the ambition of our local small business community. And the local small business community is important. Just walk down the street of Winter Park, Fraser or Granby and start counting the “small” operations. Start adding up the numbers of employees and it quickly becomes clear that the number of jobs offered through small business here mirrors national trends. Nationally, more than 55 percent of jobs are provided by small business — and that’s a sector that continues to grow.

I don’t want to sugar coat reality in this cheer-leading session. The truth is that it’s difficult to be an entrepreneur in Grand County. A seasonal economy, a relatively small resident population, unique weather challenges, relative isolation and a spread-out and diversified county make it tougher to make a buck in business in Grand County than in many places.

And yet I’ve seen many entrepreneurs take advantage of those obstacles and turn them into opportunities to succeed. These are people who understand the market, fine-tune their products and services and then manage the money in just the right way so that their customers are happy and so that the businesses enjoy a healthy bottom line.
It’s the passion, imagination, energy and intelligence of our local residents that is driving this growing resurgence of an entrepreneurial spirit in our county.

For that, we can all be thankful.

Patrick Brower can be reached by calling 970-531-0632 or at patrickbrower@kapoks.org.