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Clarifying Your Products And Services, And Your Customers

In today’s coaching session I would like to talk about Your Products and Services, and your Customers,  the first two items in Step 3 of your business plan –

Step 3 is what we call the “building blocks” of your business plan. In order to plan ahead, it’s important to be clear where you are now, so let’s make sure we have a clear understanding of what we are selling and who is our ideal customer.

This can get a little confusing and there are a few differences if you are in the Business to Business market or the Business to Consumer market. I will address this topic today using the Business to Business context.

The ideas are equally applicable to the Business to Consumer world, the main difference is that Business to Consumer companies tend to have higher numbers – more products and services and more customers. So keeping track of these details can be a bit more challenging, but the principal is the same

It’s helpful to talk about these two topics together- what you are selling and who you are selling to, are obviously interrelated.  However, to simplify the task, we separate the two ideas, then think about the changes you want to make to either or both, going forward.

As with all the other parts of your plan, it’s important to continuously clarify What you are selling and Who you are selling to

The intent here is to ensure you are offering  products or services that  are truly NEEDED by your customers,  and also  to keep you focused on the most important clients, the ones  most likely to buy, and the most profitable to your business

In the B2B world it is common for companies to sell through agents or distributors as well as directly to the end user. If that is true in your case we recommend that in  this section of your business plan you think of your customer as the end user. The next section on Partners and Alliances is set up to capture information about your relationships with agents, distributors, and suppliers (if, for example,  you are selling products manufactured by others)

I’ll use Plan Genie as an example of what this section of your plan could look like.

Let’s start with PG Products and Services:

Here at PG, we have only 2 products we sell, the basic PG web based work book and our White Label version of PG, which we sell to organizations.

Our current fee schedule includes a an annual  license fee and a renewal fee.

Our business is fairly simple to describe –  we have two products and a simple fee schedule. Yours may be more complex than that.

Now that we have a clear picture of our products and services, let’s turn our mind to who we are selling to, a description of our customers

Again, I will use PG as an example of how to approach this

Our ideal client looks something like this:

A company or an individual that

  1. Has recognized the need for an ongoing, working business plan
  2. Is ready to invest the time and money in this work, if they can find the right product
  3. Wants to learn more about running a successful business
  4. May want to do it themselves, or open to invest in a coach/consultant to help
  5. May have tried to write a BP in the past, but were not happy with the result
  6. Understand the need to work “on” their business as well as “in” their business to enjoy long term success and satisfaction
  7. Sincerely want to improve the communication with their employees and other stakeholders
  8. English speakers only
  9. Unlimited by geographic location since the product is web based

Few new prospects will tick all these boxes but if they meet even 2 or three of these criteria they are viable future customers and worth spending time on.

So, that is a quick look at describing a target customer for your busines. Getting clear about your target customers impacts so many things about your business, from your marketing plan to future growth opportunities.

I’d like to make a comment  about secondary markets:

In our business we are also looking for prospects that meet criteria for our Secondary Market

We define our Secondary market as:

  • Companies, organizations that are required to prepare and update a business plan as part of a contractual agreement with a parent company or business partner
  • And may have some of the attributes mentioned above

An example of a prospect in this secondary category is someone who has a loan condition or lease agreement that requires a written business plan be submitted at least annually

And we have yet another set of criteria to describe our target customer for our white label product.

(For our White Label product, we have defined 6 broad market sectors that are.

  1. Industry Associations
  2. Business consultants/Coaches
  3. Franchisors/Independent Professional Sales Organizations
  4. Accounting/legal Firms
  5. Lending organizations
  6. Business Trainers, educators

Then, within these sectors we are looking for those organizations that:

  • Believe their client base will benefit from working form a written plan
  • Offer educational support and other business tools to their clients)

As you can see, this work can get fairly detailed as you drill down and think through these questions. You may want to do some of this work off line using a spread sheet or other formats and bring the summary information back to your business plan.

As you work on your business plan over time, you will get clearer about these two concepts and it will cause you to be more proactive in making changes to your product lines, in tune with your customers’ changing needs. This baseline information is the starting point for innovation, your key to long term success.

By the way, this is a great place to involve your employees, once you have a draft document started.

Good luck and let us know if you need any help along the way

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Understand Why Keeping Your Written Business Plan Current Is Key To Success

Business Plans only work if you keep at it

In many ways, running your business from a plan is similar to keeping fit through regular exercise. We all know its good for us, but keeping up the habit can be a challenge.

And like exercise, keeping your business plan alive and well is easier if its done in small steps rather than trying to tackle every aspect of your business at once.

A big challenge for most business leaders is finding the time to plan. Calendars fill up quickly. One way to ensure you take the time to plan and think about your business is to make an appointment with yourself. Schedule dates to review parts of the plan fairly often, every month or so. Log in and review and update the section or sections that need attention, or that have become a priority for you.

Remember you can edit your plan at any time as events occur and new ideas spring to mind.

We suggest a full review of your plan with your management team each quarter or season. These dates should be scheduled yearly in advance, and placed on everyone’s calendar.

You may want to consider using a coach.

In order to stick with an exercise program, some of us work better with a partner or a coach. This same approach may be necessary for your discipline of business planning.

A business coach can hold you accountable to stay on track with your planning process and also help you work through the various sections of your plan.

Of course, involving your leadership team and employees is the best way to get committed to, and maintain a planning schedule. Once your team is engaged, an internal accountability will kick in.  If you are the not the best person in your group to keep the program on schedule, find a process champion in the company who will follow through to keep the rest of the team on task.

A regular business plan work-out will make your company healthy and strong. Hey, you’re doing great, keep it up.

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Recognizing The Purpose Of Company Values In Business Planning

In today’s segment I would like to talk about company Values, which is part 2 of your business plan.

Value Statements, we’ve all seen them, typically posted on the walls of the reception area, and elsewhere around the office or plant. So why do companies do this, what purpose do they serve?

A friend of mine calls them the “Rules of the Village”. I like this analogy.

Value statements are most helpful when written in a form that describes key behaviours and attitudes that you require from all employees as a condition of their employment. They are important because they help everyone understand how to “behave” on a day to day basis under any circumstances and changing situations.

As your company evolves, these values influence the culture of the company and add to your overall brand.

Unfortunately, most of these Values documents are written in terms that are vague, unclear, and open to wide interpretation, which is not at all helpful to your employees. And mean nothing to your customers.

At best they are simply ignored or seen as irrelevant. At worst they can lead to conflict within your company, as each employee may have a different interpretation of what is expected of them.

So the key to building a widely understood set of values is being crystal clear what they mean. I also suggest you start with a few, maybe three, that really matter to you, and add as needed over time.

The “Values” section of Plan Genie will help you do this.

Start with a statement about the value, then clarify the value by adding the words, “which means that…..” and  add details about specific behaviours or attitudes that people can understand. Think in terms of behaviours that are observable.

Describing values in terms of specific behaviours allows you to easily acknowledge and encourage employees who demonstrate behaviour that is in the company’s interest and to reprimand those that don’t meet your standards.

Here’s a couple of examples:

A value statement may look something like this

AT ABC company our focus is on our customers, or, we are a customer focused company

This statement in it’s own doesn’t mean much. Here’s how you might add clarity:

At ABC company our focus is continually on our customers

Which means that:

  • in conversations with our customers, we seek first to understand, then be understood
  • we put our customer’s needs first: we will interrupt the task at hand to connect with a customer, and ensure their needs are being understood and addressed
  • we use an outside-in perspective – growth comes from looking at opportunity through the eyes of our customers, our partners and alliances
  • we see through the eyes of those whose lives we affect, identifying unmet needs and producing innovative and lasting solutions. We bring to this task all our experience and knowledge as the unique individuals we are

Your values don’t need to be complicated. Here’s a simpler version of a value statement:

At ABC company:

  • We do what we say we’re going to do. It’s about action, not talk
  • We show up on time
  • We say please and thank you

Or you may have a value statement about teamwork. You can clarify the term “teamwork” by adding

Which means that:

  • When confronted with a problem or new opportunity, our natural instinct is to collaborate with others whenever time and resources allow.
  • we support and respect one another
  • team success means individual success

Or communication

Which means that :

  • we like clear conversations.

Here’s an interesting one I saw recently

AT ABC co we believe Success is a Choice. If you write 4-5 clarifying statements attached to this idea I think you would have a very powerful value statement for you business

There are countless ways of writing your values. Start with a few that resonate with you that reflect how you expect others to behave in your company where these core behaviours will contribute to your long term vision for your company.

Once you have a set of values that you are comfortable with, we suggest you review them from time to time. You will find that the descriptions you use will improve in clarity and understanding with each revision. Publishing a refreshed version from time to time will also keep this aspect of your business plan top-of-mind and relevant for all employees.

Thanks for listening. Please let us know if you have any questions about the Values section of your business plan.

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Highlighting The Importance Of A Business Plan When It Comes To Sharing Information

Today, I want talk about some of the things that keep business owners awake at night.

Let me start by relaying a story I heard a number of years ago from Peter Schutz, the former CEO of Porsche, the German car manufacturer. He told this story to me and a group of CEO’s a number of years ago.

The allies were flying supplies into war torn German airports immediately after the WWII. The weather was abysmal, near zero visibility. The ground crew was able to guide the pilots onto the runway through their crude radar equipment. It required constant communication from the tower to the pilots. Coincidentally they were part of a study and were being monitored for heart rates. As long as the ground crew kept constant and steady contact with the pilots, about the plane’s coordinates, every 10 seconds or so, the pilots remained perfectly calm.

However, if the radio went silent for even the smallest extra delay, the heart rates rose rapidly to extreme levels; a clear indication that when communication stops, or is ineffective and sporadic, trust plummets and stress increases.

How effective are you at communicating the company coordinates to your staff so they can safely land your plane, while remaining calm and under control?

For many CEO’s , the relentless challenge of communicating effectively with employees, business partners, and financial investors is high on their list of stress factors.

How can you improve the communication and trust in your company without spending unproductive time in meetings?

A good place to start is your business plan.

Your narrative business plan is the foundation for effective communication. It provides context and a reference point that allows you to be clear and consistent so others understand your business and how they can contribute to its success.

When your business plan is fully written down and shared, it touches all parts of the organization- marketing, sales, customer service, and finance and helps all employees understand where they fit in and how they can contribute

Revenue without profit is a dangerous thing.

Every business plan has financial targets in the Goals section. How do you feel about sharing financial information? Many business owners are concerned about sharing their financial goals with their employees.  A common refrain we hear – “If my employees know how much money the company makes they will expect more. I’ll have a line up at my door of staff looking for a raise.”

My view is that withholding relevant parts of a business plan from employees blocks the communication, and adds to the mistrust.

Lower trust affects the company culture in a negative way, which can be seen in employee behaviour such as absenteeism, higher turnover, dissatisfaction with compensation, and overall lower performance.

Employees want to work for a profitable company. Companies that consistently make money offer job security. Employees can plan their future, buy a house, a car, save for children’s education.

So employees like to know how the company is doing, and equally importantly, they want to know how they can contribute to that success, and therefore, their own future success.

Sharing financial information with employees brings with it a responsibility to educate employees about business fundamentals. For example, employees may not understand what happens to company profits – the need to pay down debt, for capital investment in growth, dividends for shareholder investors, and increased benefits for them. (If we do really well bonus money for the employees.)

This isn’t difficult to do, and only takes a few minutes at a meeting or even in a memo

Let’s talk a bit more about trust.

Trust in a company can be a very powerful force. When I think of trust, I am reminded of a high school physics lesson. Newton’s 3rd Law of Motion: “For every action there is an equal and opposite reaction”. This holds true for trust. In order to get trust we need to give trust, to be trusting.

If you find that sharing financial information with employees is well out of your comfort zone, and preventing you from openly sharing your business plans, you can present your company goals in other terms, such as, increasing our market share from x to y, or expanding our customer base, number of units sold, or any other metric that reflects financial success in your business

The challenge with this approach is that it can be more difficult to connect the relationship between the top line revenue goal and bottom line profit goals. Employees who are striving to reach the revenue goals without the counterbalance of profitability will not have as strong a commitment to cost control

If revenue and profits are clearly connected in their minds,  their contribution to creative, cost effective,  action plans and other day- to-day problem solving goes way up.

I encourage you to see your business plan as your most important and useful communication tool in engaging your employees and your business partners. Update it regularly and share it frequently and openly with anyone who has a stake in your company’s success.

You will sleep better.

Thanks for listening.

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