You may know that I’m an avid skier and golfer, and you can find me skiing at Big Sky, Montana, throughout the winter season, and golfing there in the summer. I’ve been asked to contribute a bi-weekly business column to Explore Big Sky. You’ll find my latest column below, and you can also see it HERE (I’m on page 19!).
Starting and building a new business or a new partnership – or even opening a new location of an established business – is challenging. Fortunately, there are some essential foundational steps entrepreneurs can take to ensure the success of their ventures. Here are a few to consider:
Know your market. The first step of any successful business owner is recognizing a need for what you’re offering, or knowing you’re up for the challenge of creating demand. I’ve seen so many businesses fail because the starry-eyed people behind them went in with great intentions but overlooked this critical step. This step will allow you to adapt to the market before launch, to ensure that your business thrives.
Write a clear business plan. Your business plan should be less a “bible” than a road map. The act of drafting a succinct written plan helps you carefully think through what you are trying to achieve.
Your business plan needs to include:
- What/who you are as a business
- The vision of what you intend to become
- Your near- and long-term focus or mission
- The strategy to achieve your vision
- The objectives to achieve your strategy
- Your financing
- Your financial projections, including a sales forecast
- Your anticipated cash flow
- New prospects and customer traction achieved to-date
- Your marketing strategy
Don’t underestimate the importance of clearly defining your marketing strategy; whom you’ll target as your optimal customers; the competitive business landscape for your region; opportunities and potential threats; your value proposition, which is a clear statement explaining how your product delivers specific benefits and addresses customers’ problems; the price of your offering and its associated costs.
Secure sufficient financing. If you don’t have the capital you need to open your doors and keep them open for at least a year, you’ll need to seek outside funds or push back your launch date. Applying for a business loan and/or a credit line for your capital expenditures while you’re solvent may be easier than when things get unpredictable later on.
Involving friends and family as financial supporters has upsides as well as potential risks, and these types of partnerships must be managed with transparency and proper legal procedures. Finding an independent investor is a funding alternative implying shared ownership with additional financial obligations. Weigh your options and understand how to optimally fund the initial stages of the business.
Hire the right team. Every single employee, regardless of their role, needs to be handpicked. Start with the roles that are most important, outline their responsibilities in detail, and interview candidates with clarity of these roles in mind. Employees are often said to be a company’s biggest resource, but it’s equally true that they can be its biggest liability.
Launch with care. If you’ve carefully addressed planning, financing and staffing for your sure-to-succeed swimsuit shop, but you open your doors in Montana in December, you might not make it to swim season. Make sure that the timing and promotion for your new business are appropriate for the community you’re joining. Talking to other business owners, area business leaders and prospects are a few ways to understand your market, allowing you to be proactive with the seasonality of your offerings.
Carefully monitor your business post-launch, and thoughtfully tweak as you go. There are tools and systems you can use to assist with the creation of your business infrastructure, professionals you can engage to help you, and associations you can join for peer support. Planning for the official launch of a new venture can be extremely rigorous and take significant time – don’t lose sight of what will happen subsequent to launch.
Make sure monitoring and maintenance are part of your plan from inception, and be flexible once you’ve collected and analyzed some real-life data on how things are progressing.
Johanne Bouchard, a former high-tech marketing executive, is a leadership advisor to CEOs, executives and entrepreneurs, as well as an expert in corporate board composition and dynamics. Visit johannebouchard.com to learn more or download her recently published eBooks “Board Composition” and “Board Basics.”