SME owners are all creative! It is often suggested that if you are not creative you will not be likely to succeed as an entrepreneur.
I believe that this is generally overstated. I may well be wrong on this but I have another suggestion on what makes entrepreneurs succeed. They are opportunity aware. They never stop looking for opportunities. They actively look for them. They are not passively waiting for the order. They are deal makers not order takers.
Initially they tend to see mainly "deals" which they are able to close. As they progress so they become able to see deals in other sectors/industries, which leads to diversification (portfolio entrepreneurship). As they proceed further, depending on how well read they are in business in general, so they become better at putting greater "creativity" into the finding/creating of opportunities.
Once they become extremely well versed at this, so they are able to identify structural holes. This is when supply and demand exist, but there is no market mechanism to trade. The ultimate entrepreneur is able to identify the structural holes and close the hole by creating the ultimate creative solution based upon his /her vast knowledge base.
Saturday, October 24, 2009
Sunday, June 21, 2009
SMEs - Step 8 more detail on the marketing plan
When preparing the marketing plan as part of a business plan, a key component is the income budget. The idea is that the marketing department predict sales and therefore need to prepare a sales and cost of sales budget for the financial department. This will include advertising and the rest of the marketing budget as well.
It is critical that the sales budget be done first if a SME, or by the two different departments, marketing and finance, if a larger business.
Too often SMEs make the mistake of juggling sales to meet the overheads. This is a recipe for disaster. The first budget is normally based upon your understanding of the market, and therefore should not be altered to "make ends meet". Go with your gut feel if you are an SME, as quite often it is all you have to go on, as you most likely do not gather and keep marketing data for analysis.
If you find that there are insufficient sales to meet your overheads and desired profits, then review your strategy and see what can be done to change your strategy to improve sales. There must be a change of strategy to increase the sales, not simply a change in sales.
Remember this important part of the process when doing your marketing plan - it could be the difference between success and survival.
It is critical that the sales budget be done first if a SME, or by the two different departments, marketing and finance, if a larger business.
Too often SMEs make the mistake of juggling sales to meet the overheads. This is a recipe for disaster. The first budget is normally based upon your understanding of the market, and therefore should not be altered to "make ends meet". Go with your gut feel if you are an SME, as quite often it is all you have to go on, as you most likely do not gather and keep marketing data for analysis.
If you find that there are insufficient sales to meet your overheads and desired profits, then review your strategy and see what can be done to change your strategy to improve sales. There must be a change of strategy to increase the sales, not simply a change in sales.
Remember this important part of the process when doing your marketing plan - it could be the difference between success and survival.
Sunday, June 14, 2009
SMEs - Step 8 the marketing plan
Marketing is the key to business success, because marketing drives revenues.
No matter how well run your business is, without sales there is no business. So the focus on the marketing plan is critically important. For those who want to know more, read Kotler. He presents marketing in a simple to understand format.
Marketing is best when it is proactive rather than reactive. The purpose is to get ahead of your competitors by creating competitive advantage. This means knowing and understanding your competitors extremely well. Do you know yours? Do you know how they will react to your efforts to gain market share? How can you gain market share without creating a war with your competitors? Therefore we will look at different aspects of marketing over a period of time.
Marketing is such a deep subject that it is impossible to discuss in depth in a weekly blog. Start reading Kotler and Michael Porter. Understand the use of Ansoffs model together with Kotlers synergy rules and the BCG matrix.
Marketing is not difficult and complex, to the extent that it cannot be done by the SME owner. It is simply that it requires full attention in an ongoing manner. It is not something that happens on its own, but requires constant attention and tweaking to meet changing circumstances.
No matter how well run your business is, without sales there is no business. So the focus on the marketing plan is critically important. For those who want to know more, read Kotler. He presents marketing in a simple to understand format.
Marketing is best when it is proactive rather than reactive. The purpose is to get ahead of your competitors by creating competitive advantage. This means knowing and understanding your competitors extremely well. Do you know yours? Do you know how they will react to your efforts to gain market share? How can you gain market share without creating a war with your competitors? Therefore we will look at different aspects of marketing over a period of time.
Marketing is such a deep subject that it is impossible to discuss in depth in a weekly blog. Start reading Kotler and Michael Porter. Understand the use of Ansoffs model together with Kotlers synergy rules and the BCG matrix.
Marketing is not difficult and complex, to the extent that it cannot be done by the SME owner. It is simply that it requires full attention in an ongoing manner. It is not something that happens on its own, but requires constant attention and tweaking to meet changing circumstances.
Sunday, June 7, 2009
SMEs - tips for the strategy process
SMEs are generally terrible at planning. I use an example with my students. Would you leave work, go home, pack whatever clothes are in the cupboard, take whatever cash is in your pocket, get in your car, drive until you run out of petrol, and then have a holiday wherever you run out of petrol. The answer is always no. And yet most SME owners run their businesses in this way.
They simply arrive each day in the hope of sales arriving. There is no plan. No strategy. No direction. There is simply ever-fading hope.
You need to read as widely as possible in order to ensure your strategy is informed by your environment. A PESTEL analysis is not a once-off annual event, but rather a way of life. It is about knowing and understanding what is happening at all times. How often do you hear businesses who are in trouble state "I just did not see it coming. Suddenly ....". Remember nothing is "suddenly". It is always announced in advance. Even the current global financial crisis was being talked about in advance.
So read a book or two on strategy. Gary Hamel is a strategy author who can give you some good tips and insights.
Read, read, read!
They simply arrive each day in the hope of sales arriving. There is no plan. No strategy. No direction. There is simply ever-fading hope.
You need to read as widely as possible in order to ensure your strategy is informed by your environment. A PESTEL analysis is not a once-off annual event, but rather a way of life. It is about knowing and understanding what is happening at all times. How often do you hear businesses who are in trouble state "I just did not see it coming. Suddenly ....". Remember nothing is "suddenly". It is always announced in advance. Even the current global financial crisis was being talked about in advance.
So read a book or two on strategy. Gary Hamel is a strategy author who can give you some good tips and insights.
Read, read, read!
Wednesday, June 3, 2009
SMEs - Step 9 in the business planning process
SMEs are renowned for missing the detail, but this is a detail step that makes it all worthwhile.
Once you have completed the business plan, especially Step 8 which is the Operational Strategy, you must assess the projected financial position, and then decide if the business will achieve your harvest plan. If not you have to decide whether to accept less or whether you will look elsewhere.
This important step cannot be avoided or ignored, because to do so, is to do so at your own peril. Doing this with a client once, he realised it was impossible to achieve his harvest plan with this business. His decision was to "learn to live with less". This is not an entrepreneur speaking, and frankly it is quite likely he will get exactly what he asked for, or less. Remember, it is seldom that targets are achieved or exceeded, so aiming low is a recipe for disaster.
Once you have completed the business plan, especially Step 8 which is the Operational Strategy, you must assess the projected financial position, and then decide if the business will achieve your harvest plan. If not you have to decide whether to accept less or whether you will look elsewhere.
This important step cannot be avoided or ignored, because to do so, is to do so at your own peril. Doing this with a client once, he realised it was impossible to achieve his harvest plan with this business. His decision was to "learn to live with less". This is not an entrepreneur speaking, and frankly it is quite likely he will get exactly what he asked for, or less. Remember, it is seldom that targets are achieved or exceeded, so aiming low is a recipe for disaster.
Tuesday, May 26, 2009
SMEs - Step 8 in the business planning process
This is the second last step in the planning process. The Step 8 efforts are a lot more detailed. Essentially there are three (3) components. The first is the marketing plan, followed by the human resource plan and financial plan.
They must be done in this sequence. Furthermore the marketing plan must produce the sales budget and cost of sales, while the last step is the financial plan where the fixed costs are applied to assess the profitability of the business. Remember not to fudge the figures.
These three components will be considered in more depth in a separate exercise in coming weeks.
They must be done in this sequence. Furthermore the marketing plan must produce the sales budget and cost of sales, while the last step is the financial plan where the fixed costs are applied to assess the profitability of the business. Remember not to fudge the figures.
These three components will be considered in more depth in a separate exercise in coming weeks.
Sunday, May 17, 2009
SMEs - Step 6 in the business planning process
The sixth step is the SWOT analysis. Essentially this is an analysis of the firms strengths and weaknesses in the context of the PESTEL analysis.
Remember that not everything in the environmental analysis is relevant to your business.
PESTEL + Weaknesses = Threat
and
PESTEL + Strengths = Opportunity
The secret to the SWOT analysis is to be realistic and objective in your analysis.
Remember that not everything in the environmental analysis is relevant to your business.
PESTEL + Weaknesses = Threat
and
PESTEL + Strengths = Opportunity
The secret to the SWOT analysis is to be realistic and objective in your analysis.
Subscribe to:
Posts (Atom)
Posts
