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Module 3 business planning with benefit of hindsight

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Module 3 business planning with benefit of hindsight

  1. 1. MODULE 3 LEARN - Business Planning with Benefit of Hindsight "The European Commission support for the production of this publication does not constitute an endorsement of the contents which reflects the views only of the authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein."
  2. 2. o Get back to basics – learn what a business plan is and why is it important o Debunk common myths and realities of business planning o Improve your business plan second time around o Learn why experimentation is just as important as planning o Learn how to build a strong resilient business o Plan for tough time and crises In this module, you will:
  3. 3.  A Business Plan is an essential tool that methodically thinks through the entire entrepreneurial planning process.  Many entrepreneurs do not actually complete a business plan unless required to by their bank or funding agency. This is a lost opportunity.  A properly prepared Business Plan should tell a story, make an argument and conservatively predict the future.  Business planning guides you through the process of setting goals, explaining objectives and then mapping out a document to achieve these goals and objectives. It does not need to be complicated. What are Business Plans and why are they important? Source: www.entrepreneurship.org/articles/2002/05/business-planning-building-an-effective-business-model
  4. 4. What are Business Plans and why are they important?
  5. 5.  Ideas are the lifeblood of your business. People that generate lots of ideas are good at coming up with solutions to problems. However, an idea is not a business opportunity.  The process of business planning allows you to dissect your idea.  It actually helps develop an idea into an opportunity. It forces you to ask and answer hard questions and explore your options.
  6. 6. Reasons for a business plan According to statistics from the Bank of Ireland, 66% of all business start-ups will fail in their first five years. “A staggering 80% of small businesses without a business plan will fail in their first 5 years,” Paul Fagan, Action Coach. Why ? • Lack of planning on behalf of business owners. • Having a well structured business plan gives you more success of survival.
  7. 7. Why the business planning process is essential? • You wouldn't build a house without creating a plan. Why would you build a business without having a similar plan? • To help you think through the whole process - the value of a business plan is not only the plan itself, but the process of writing it. • To put down on paper the resources you need to get started and what • To convince yourself that it is worth doing • To show others that you have thought it through • To convince investors to give support • To give you targets to aim towards and measure yourself against
  8. 8. Myths and Realities of Business Planning – Debunked! In developing a Business Plan and a Business Model, entrepreneurs need to be aware that there are myths and misconceptions about the process…
  9. 9. #1 Myth: Business plans are only for start-up companies.  REALITY: Companies at all stages of development need to prepare and update Business Plans to plot their course and plan and track progress. This could include attracting new investment ,how you will launch a new product, a new market, take on board new employees, expand or sometimes contract a business.
  10. 10.  A solid business plan can be the difference between just a business idea and a successful business. It allows you to set goals and determine how to realistically measure them. In the process of creating one, you develop an understanding of your market and the competition that is based on facts, not just hopes. #1 Myth: Business plans are only for start-up companies.
  11. 11. #2 myth: Business plans are only written when a company needs to raise capital. REALITY: Although most Business Plans are written in connection with the search for capital, a well- written Business Plan will serve a variety of beneficial purposes to the company, it’s founder and its team.  Use it as a management tool and road map for growth  Use it to measure progress over time in achieving projected goals and objectives
  12. 12. #3 Myth: Business plans should be as detailed and slick as possible.  REALITY: Your reader will not have the time to review hundreds of pages of text. The plan must be concise, well- written and when used to seek funding should focus on the lender's or investor's principal areas of concern. Do not clutter it with irrelevant information.
  13. 13.  Although a Business Plan ought to be presented professionally, an overly lavish presentation can have the opposite effect – substance over style wins everytime  Interestingly, business plans prepared in Powerpoint can be very effective –more later! #3 Myth: Business plans should be as detailed and slick as possible.
  14. 14. #4 Myth: Business plans should emphasize ideas and concepts, not people.  REALITY: Many entrepreneurs fear that if the success of a company depends too heavily on any specific person, it can be a negative thing.  Although this is partially true, investors prefer to invest in a company that has great people and only a good concept, rather than one with a great concept and a entrepreneurial team.  People buy people but so many business plans are bland and fail to capture the personality and spirit of the promoter – write with passion, that same passion that keeps you craving entrepreneurial success.
  15. 15. #5 myth: only the founding entrepreneur should prepare the business plan.  REALITY: Most entrepreneurs are highly skilled in a particular profession or area of business development/management. This does not mean they necessarily possess the ability to prepare a Business Plan!  Ideally, the Business Plan should be developed by the founder but failing this, outside mentors and/or qualified experts should be sought.  The entrepreneur must have true ownership of the plan and be in a position to defend and champion the assumptions in it.
  16. 16. #6 myth: Optimism should prevail over realism.  REALITY: The Business Plan should demonstrate the enthusiasm of the founders of the company as well as generate excitement in the reader; however, it should be credible and accurate. If being used to seek funding, investors will want to know all of the company's strengths and its weaknesses. Previous failures should be tackled head on – admit the failure, explain the reasons why and what will be done differently second time around.  As a general rule, investors will feel more comfortable investing in someone who has learned from previous business failures rather than a person who has never managed a company.
  17. 17. As the document that tells the company's story, the Business Plan also helps shape and modify the company's Business Model, the elements of which will be driven by the answers to the following questions:  Who are we? ( the Founder and the Team – if you are a sole entrepreneur, this team description should outline the skills and competencies of your external advisory team i.e. accountant, mentor, marketing, quality assurance and IT subcontractors etc )  Past business experience (What other business experiences, both positive and negative have led to this point and this business idea?)  What are we trying to do? (Mission)  What problem do we solve? (Faster/Better/Easier/Cheaper) Why can we do it more profitably?  How are we going to get it done? (Operations)
  18. 18.  What market research have we done to be sure that people will buy this product or service at this price ? (Substantiation)  How do we reach our customers? How do we obtain our initial customers/gain revenue? Which are the easiest to reach? What are the target customers' decision-making processes? (Sales/Marketing/Distribution Channel)  Who else is doing this? What relationships do they currently have in place that will need to be terminated for people to start doing business with us? (Competition/Competitive Analysis) EXERCISE 1 : Review your old/failed business plan, did it answer these questions?? Make notes of weaknesses in the plan – the benefit from hindsight. As the document that tells the company's story, the Business Plan also helps shape and modify the company's Business Model, the elements of which will be driven by the answers to the following questions:
  19. 19.  Do we truly modify the way business is being done in our industry (as a change agent) or is this more of a fad or a trend? (Market Trends/First Mover Advantage (FMA)  Are these targeted customer relationships profitable? How do we make money? (Business Model)  What do we need to accomplish our goals? (Budget/Resources)  When are we profitable? (Breakeven/Timetable) As the document that tells the company's story, the Business Plan also helps shape and modify the company's Business Model, the elements of which will be driven by the answers to the following questions: EXERCISE 2: Write your new answers to these questions, based on your new business idea and learning last time around.
  20. 20. Be very mindful of the variables affecting Business Plan Implementation –  Demand for the company's products and services  Your ability to scale  Your ability to develop, introduce and market new products and enhancements to existing products on a timely basis  Changes in the company's pricing policies and business model and/or those of its competitors  Ability to expand the company's sales and marketing operations, including hiring additional sales personnel Source: www.entrepreneurship.org/articles/2002/05/business-planning-building-an-effective-business-model
  21. 21. Be very mindful of the variables affecting Business Plan Implementation – Group discussion, can you plan for these? Source: www.entrepreneurship.org/articles/2002/05/business-planning-building-an-effective-business-model  Success in maintaining and enhancing existing relationships and developing new relationships with strategic partners  Ability to control costs  General economic factors, including an economic slowdown or recession.
  22. 22. The 3 Most Important Things Investors look for in a Winning Business Plan… Click to watch video: https://youtu.be/hludN2e33TY EXERCISE 3: Watch this video from Evan Carmichael, entrepreneur advocate and former venture capitalist. He talks about the three main things investors want are concerned with in your business plan: 1) Executive Summary 2) Management Team 3) Financials
  23. 23. Improving your Business Plan - Second Time Around: Writing a compelling Executive Summary The key components that should be part of your executive summary: 1. The Grab - You should lead with the most compelling statement of why you have a really big idea. You need to get your reader to think, “Wow!” This sentence (or two) sets the tone for the rest of the executive summary. Usually, this is a concise statement of the unique solution you have developed to a real (and not perceived) problem. It should be direct and specific, not abstract and conceptual. If you can drop some impressive numbers ad names in the first paragraph you should—world-class advisors, companies you are already working with, early market success. Source: http://www.garage.com/resources/writing-a-compelling-executive-summary/
  24. 24. Writing a compelling Executive Summary 2. The Problem - You need to make it clear that there is a big, important problem (it’s real, it’s current or emerging) that you are going to solve, or opportunity you are going to exploit. In this context you are establishing your Value Proposition - there is enormous pain and opportunity out there, and you are going to increase revenues, reduce costs, increase speed, expand reach, eliminate inefficiency, increase effectiveness etc.
  25. 25. Writing a compelling Executive Summary 3. The Solution What specifically are you offering and to whom? Product, service, combination? Use commonly used terms to state concretely what your business does to respond to the problem you’ve identified. Avoid acronyms. Clarify…  where you fit in the value chain  Your route to market  who do you work with? Share if you have customers and revenues as yet or make it very clear when you will.
  26. 26. 4. The Opportunity Spend a few more sentences providing a basic market profile, size (how many people or companies), worth, segments and growth and dynamic - how fast is the growth, and what is driving the segment? Writing a compelling Executive Summary
  27. 27. 5. Your Competitive Advantage No matter what you might think, you have competition. So, understand what your real, sustainable competitive advantage is, and state it clearly. Do not claim that your key competitive asset is your “first mover advantage.” It is not strong enough. You need to articulate your unique benefits and advantages. Be succient. Writing a compelling Executive Summary
  28. 28. Writing a compelling Executive Summary 6. The Model  How specifically are you going to generate revenues, and from whom?  Why is your model leverageable and scalable?  Why will it be capital efficient?  What are the critical metrics on which you will be evaluated— customers, units, revenues, margin? Whatever it is, what levels will you reach within three to five years?
  29. 29. 7. The Team Why are you and your team uniquely qualified to win? Don’t just regurgitate a shortened form of your CV, explain why the background of each team member fits. Give the reader an accurate sense of who you are and what you have done to this point (including lessons learnt from previous businesses), to establish expertise and credibility, and to qualify your experience and background. All of these elements combine to develop trust in you and your business idea. Repeat this for all core team members – internal and external. Writing a compelling Executive Summary
  30. 30. 8. The Promise Your Summary Financial Projections should clearly show that this is a worthy and lucrative plan. If your figures are not believable, then all of your work is futile. You should show three to five years of revenues, expenses, losses/profits, cash, employment headcount, number of customers and units shipped each year. Writing a compelling Executive Summary
  31. 31. 9. The Ask If you are seeking investment from external sources (and more of us will), this is the amount of funding you are asking for now. This should generally be the minimum amount of equity you need to reach the next major milestone. If you expect to need to raise more funding later, make that clear, and state the expected amount. Writing a compelling Executive Summary
  32. 32. Executive Summary Length  You should be able to do all this in six to eight paragraphs, possibly a few more if there is a particular point that needs emphasis.  You should be able to make each point in just two or three simple, clear, specific sentences.  You might be able to get this on to one page, but most likely this means your executive summary will be about two pages; worst case, maybe three.
  33. 33. Business Plan Formats  While we have brought you through the format of a strong Executive Summary, the rest of the business plan should support and provide the detail behind each of the headings  While there are thousands of business plan templates available – most of them are weak! Please DO NOT use bland templates, they will not do you justice. Take their headings and add your own unique spark.  One of the new approaches that works is Business Plans created in Powerpoint. Typically used in presentations for investors, they can even replace the need for a wordier and perhaps less succinct plan  Use the 10–20–30 rule: 10 slides, 20 minutes and a minimum 30-point font.
  34. 34. And now to turn all of that on it’s head! A new way? A more realistic way?
  35. 35. Experimentation, a fresh approach to business planning? Testing the waters is often the safest and cleverest thing..
  36. 36. How do business planning and experimentation differ? Launching a new enterprise has always been a hit-or-miss proposition. Steve Blank, is a Silicon Valley serial-entrepreneur and academician - ‘According to the decades-old formula, you write a business plan, pitch it to investors, assemble a team, introduce a product, and start selling as hard as you can. And somewhere in this sequence of events, you’ll probably suffer a fatal setback. The odds are not with you: As research by Harvard Business School’s Shikhar Ghosh shows, 75% of all start-ups fail’. Source: Steve Blank
  37. 37. How do business planning and experimentation differ? In some sectors, experimentation is already a way of life. Experimentation is more productive than planning and is closely aligned to the Lean Start Up approach which can make the process of starting a company less risky. The “lean start-up” methodology favours experimentation over elaborate planning, customer feedback over intuition, and iterative design over traditional “big design up front” development. Its practice is spreading and lean start ups are turning conventional wisdom about entrepreneurship on its head. New ventures of all kinds are attempting to improve their chances of success by following its principles of failing fast and continually learning. Source: Steve Blank
  38. 38. In some sectors, experimentation is already a way of life. Strategyzer takes a fascinating look at how attitudes, processes, tools, and other approaches differ in a business planning environment versus an experimentation environment. Think it through, read the tables that follow carefully, this stuff makes sense! Source: http://blog.strategyzer.com/posts/2016/2/1/the-difference-between-business-planning-experimenation How do business planning and experimentation differ?
  39. 39. How do business planning and experimentation differ? Source: http://blog.strategyzer.com/posts/2016/2/1/the-difference-between-business-planning-experimenation We know Our customers & partners know BUSINESS PLANNING ATTITUDE EXPERIMENTATION ATTITUDE VS
  40. 40. How do business planning and experimentation differ? BUSINESS PLANNING TOOLS EXPERIMENTATION TOOLS VS Source: http://blog.strategyzer.com/posts/2016/2/1/the-difference-between-business-planning-experimenation The Business Plan Business Model & Value Proposition Canvas
  41. 41. How do business planning and experimentation differ? BUSINESS PLANNING PROCESS EXPERIMENTATION PROCESS VS Source: http://blog.strategyzer.com/posts/2016/2/1/the-difference-between-business-planning-experimenation Planning Customer Development
  42. 42. How do business planning and experimentation differ? BUSINESS PLANNING “WHERE” EXPERIMENTATION “WHERE” VS Source: http://blog.strategyzer.com/posts/2016/2/1/the-difference-between-business-planning-experimenation Inside the building Outside the building
  43. 43. How do business planning and experimentation differ? BUSINESS PLANNING FOCUS EXPERIMENTATION FOCUS VS Source: http://blog.strategyzer.com/posts/2016/2/1/the-difference-between-business-planning-experimenation Execution of a plan Experimentation & learning
  44. 44. How do business planning and experimentation differ? BUSINESS PLANNING FAILURE EXPERIMENTATION FAILURE VS Avoided Embraced to learn and improve Source: http://blog.strategyzer.com/posts/2016/2/1/the-difference-between-business-planning-experimenation
  45. 45. How do business planning and experimentation differ? BUSINESS PLANNING UNCERTAINTY EXPERIMENTATION UNCERTAINTY VS Masked via detailed plan Acknowledged & reduced via experiments Source: http://blog.strategyzer.com/posts/2016/2/1/the-difference-between-business-planning-experimenation
  46. 46. How do business planning and experimentation differ? BUSINESS PLANNING NUMBERS EXPERIMENTATION NUMBERS VS Assumptions Evidence based Source: http://blog.strategyzer.com/posts/2016/2/1/the-difference-between-business-planning-experimenation
  47. 47. What Lean Start-Ups Do Differently? Source: Steve Blank The founders of lean start-ups don’t begin with a business plan; they begin with the search for a business model. Only after quick rounds of experimentation and feedback they adopt a model that works that is based on execution. Measured Operates on complete data Accounting Income statement, balance sheet,cash flowstatement Departments byfunction Hire for experience and ability toexecute ProductManagement Prepare offering for market followinga Linear step-by-steppaln Business Plan Implementation-driven TraditionalLean Strategy Business Model Hypothesis-driven New-Product Process CustomerDevelopment Get out of the office and testhypothesis Engineering AgileDevelopment Build the product iteratively and incrementally Organization Customer and Agile DevelopmentTeams Hire for learning, nimbleness andspeed Financial Reporting Metrics ThatMatter Customer acquisition cost, lifetime customer value,churn,viralness Failure Expected Fix by iterating on ideas and pivoting away from ones that don’twork Speed Rapid Operates on good-enoughdata Exception Fix by firingexecutives Agile or WaterfallDevelopment Build the product iteratively, or fully specify the product before buildingit
  48. 48. What role can experimentation play in your business planning? Steve Blank, a Silicon Valley serial-entrepreneur and academician, provides interesting insights and theories into lean start-up techniques. He blogs at www.steveblank.com.
  49. 49. What role can experimentation play in your business planning? The Fallacy of the Perfect Business Plan ‘According to conventional wisdom, the first thing every founder must do is create a business plan—a static document that describes the size of an opportunity, the problem to be solved, and the solution that the new venture will provide. Typically it includes a five-year forecast for income, profits, and cash flow. A business plan is essentially a research exercise written in isolation at a desk before an entrepreneur has even begun to build a product. The assumption is that it’s possible to figure out most of the unknowns of a business in advance, before you raise money and actually execute the idea’. After many decades of using this approach, Steve contends we have learned three things:
  50. 50. 1. Business plans rarely survive first contact with customers. As the boxer Mike Tyson once said about his opponents’ prefight strategies: “Everybody has a plan until they get punched in the mouth.” 2. No one besides venture capitalists and the late Soviet Union requires five-year plans to forecast complete unknowns. These plans are generally fiction, and dreaming them up is almost always a waste of time. 3. Start-ups are not smaller versions of large companies. They do not unfold in accordance with master plans. The ones that ultimately succeed go quickly from failure to failure, all the while adapting, iterating on, and improving their initial ideas as they continually learn from customers. What role can experimentation play in your business planning?
  51. 51. Many restart entrepreneurs will relate to this. Hence, the lean definition of a start-up: A temporary organization designed to search for a repeatable and scalable business model. What role can experimentation play in your business planning?
  52. 52. The lean method has three key principles: 1 BUSINESS MODEL CANVAS Rather than engaging in months of planning and research, entrepreneurs accept that all they have on day one is a series of untested hypotheses- basically, good guesses. So instead of writing an intricate business plan, founders summarize their hypotheses in a framework called a business model canvas.
  53. 53. Principle 1 Business Model Canvas Business Model Canvas - a table of how a company creates value for itself and its customers. The business model canvas lets you look at all nine building blocks of your business on one page. Each component of the business model contains a series of hypotheses that you need to test. EXERCISE 4: Download the canvas template and create your own Business Model Canvas. Source: www.businessmodelgeneration.com/canvas. Canvas concept developed by Alexander Osterwalder and Yves Pigneur
  54. 54. Principle 2 Customer Development 2) Lean start-ups use a “get out of the building” approach called customer development to test their hypotheses. They go out and ask potential users, purchasers, and partners for feedback on all elements of the business model, including product features, pricing, distribution channels, and affordable customer acquisition strategies. The emphasis is on nimbleness and speed: New ventures rapidly assemble minimum viable products and immediately elicit customer feedback. Then, using customers’ input to revise their assumptions, they start the cycle over again, testing redesigned offerings and making further small adjustments (iterations) or more substantive ones (pivots) to ideas that aren’t working.
  56. 56. 3) Lean start-ups practice something called agile development, which originated in the software industry. Agile development works hand-in- hand with customer development. Unlike typical long product development cycles that presuppose knowledge of customers’ problems and product needs, agile development eliminates wasted time and resources by developing the product iteratively and incrementally. It’s the process by which start-ups create the minimum viable products they test. Principle 2 Customer Development
  57. 57. In contrast to traditional product development, in which each stage occurs in linear order and lasts for months, agile development builds products in short, repeated cycles. A start-up produces a “minimum viable product”- containing only critical features - gathers feedback on it from customers, and then starts over with a revised minimum viable product.
  58. 58. Agile development embraces the “test and learn” approach. This goes beyond market research and uses sales to generate knowledge and feedback.
  59. 59. Agile Development Crowdfunding platforms have made it much easier to measure market demand for a product or service. By describing the product's features and offering it to the masses, entrepreneurs can get an idea of how the market outside of the crowdfunding platform would respond. Also, the instantaneous feedback and questions can help start-ups uncover potential issues and allow them to correct them before scaling
  60. 60. New approaches  The lean start-up methodology holds that in most industries customer feedback matters more than secrecy and that constant feedback yields better results.  Across Europe, organisations like Startup Weekend introduce the lean method to hundreds of prospective entrepreneurs at a time. At such gatherings a roomful of start-up teams go through half a dozen potential product ideas in a matter of hours and develop the entire business model over a weekend.
  61. 61. New approaches FURTHER READING ON THE TOPIC Steve Banks 2003 -The Four Steps to the Epiphany Eric Ries 2011 The Lean Startup Bob Dorf and Steve Banks 2012 summarized the lean techniques in a step-by-step handbook called The Startup Owner’s Manual.
  62. 62. Importance of building a resilient business.  Would your business be able to cope if your biggest client stopped working with you, if you got ill or a key employee walked out ?  The global recession has had a devastating impact on small businesses across the EU and the wider economy, and now the challenge of Brexit, it is a strong reminder of the importance of building resilience into your business model to limit the effect of any major risk to your organisation.  Entrepreneurs need to spread the risk across clients, hire smart people that can tackle hard problems and plan for the unexpected Source: https://www.theguardian.com/small-business-network/kia-fleet-partner- zone/2016/aug/01/how-to-build-a-resilient-business-brexit
  63. 63. Building a Strong Resilient Business - Spreading the risk  Risk is an inherent part of starting a new business. One of the reasons why a business should be concerned with the levels of risk it is exposed to is that being reliant on a single market or group of similar products means that a downturn in that area can have a significant negative effect on the whole operation.  Pinning all your hopes on one market needs to be carefully considered as a strategy. Diversifying your income streams protects you against major losses during downturns in one market and allow you to financially benefit from the upswings in another Don’t put all your eggs in one basket!
  64. 64. Spreading the risk with Diversification  Spread the risk by diversifying - when you add new products to your portfolio or move into new markets, you can access previously untapped customer markets.  A well considered business model should contain ideas for diversification, other areas which can be added to the initial operations once they become established.
  65. 65. Spreading the risk - Diversifying your Income Stream with Passive Income! Some may pay you for doing something that you love (active), while others can provide income for you without your having to do much of anything at all (passive). Passive income is a recurring revenue stream that does not involve constant hands-on work from it’s creator. A business owner can create passive income, only after investing time and hard work upfront to create valuable products and those automated systems to keep it running. Source: https://convertkit.com/passive-income-myths/
  66. 66. Some Passive Income Ideas…  Ebook - Turn failure into success. How about creating and selling an ebook on how to turn a business around from the brink of bankruptcy or your compelling restart story.  Sell your expertise - Figure out what knowledge, experience, ability or you have that others will value and might pay you for. Know that - you and your personality differentiate your value from that of every other person on earth. Many people will resonate with you (and your style) better than they will with someone else offering value that's similar or even the same.
  67. 67. Building a Strong Resilient Business - Making Strategic Alliances Strategic alliances can be a smart growth formula and are relevant to business owners of all sizes and all industries.. Source: https://www.powerlinx.com/blog/what-are-strategic-alliances/
  68. 68. Building a Strong Resilient Business - Making Strategic Alliances What are a strategic alliances? Strategic alliances are agreements for cooperation or collaboration between businesses, with the ultimate result being a synergy where each party will benefit more from the alliance than from individual efforts alone. Strategic alliances allow each partner to pool resources while concentrating on their competitive advantage and simultaneously growing their respective businesses. Source: https://www.powerlinx.com/blog/what-are-strategic-alliances/
  69. 69. Benefits of Strategic Alliances…  Knowledge and Resource Sharing – can increase speed to market, reduce operational complexity and increase cost efficiency  Opportunities for Growth – the expertise and support of an external partner often bring new growth  Access to Target Markets – the right strategic partner may provide access to new market including export! Source: https://www.powerlinx.com/blog/what-are-strategic-alliances/
  70. 70. Benefits of Strategic Alliances…  Economies of Scale - When companies pool their resources and allow each other to increase manufacturing and distribution capabilities, economies of scale can be achieved Source: https://www.powerlinx.com/blog/what-are-strategic-alliances/
  71. 71. Strategic Alliances Tips – Seeking Allies Successfully …  Plan first, pick later. You should know exactly what traits your ally needs before you start looking for one. What are your skill or resources gaps?  Network. The most likely place to find an ally is among customers, suppliers, competitors and other professional associates.  Look for synergy. A combination of allies should add up to more than either does separately. Source: https://www.entrepreneur.com/article/81412
  72. 72. Strategic Alliances Tips – Seeking Allies Successfully …  Listen to your gut. Check a potential ally's credit rating, financial reports and reputation in the industry, trust your feelings when it comes to the final decision.  Identify benefits, including synergistic effects. Make sure the benefit isn't lopsided so that no one will feel he or she is being taken advantage of.  Set precise goals for what you want to accomplish. Without goals, an alliance can flounder.Source: https://www.entrepreneur.com/article/81412
  73. 73. Business Planning (with hindsight) for tough times and crises  Review, review, review! Surviving hard times returning full circle to the fundamental principles of business. This can include: doing regular financial checks, reviewing and freshening your sales and marketing approach, and engaging with customer to get their regular insights. Remember that these are just some of the fundamentals that need to be re-learned and re-visited.  Cut and downsize carefully - When hard times hit cost-cutting needs to be implemented with the precision and speed. Remember that if you cut too deep, your business may never recover. If you cut too shallow, cash flow problems could force you to the back of the unemployment line. You need to exercise care and judgment, in determining what and where to cut, and by how much.
  74. 74. Business Planning (with hindsight) for tough times and crises  Always cement your relationship with your existing customers: In an ironic way, when times are tough, many businesses actually stop servicing their existing and loyal customers. This is detrimental.  A depressed mood descends on the business and this in turn affects customer service. That's why businesses in this negative space lose far more customers than they should, which of course only makes matters worse.  From the beginning of your new restart business, build bulletproof relationships with each and every customer you are fortunate enough to have. You need communicate with them, engage them, find out what is going on in their world and most importantly of all, becoming very clear on what your customers need from you. Source: https://www.inc.com/andrew-griffiths/11-ways-to-get-through-any-tough-time-in-business.html
  75. 75. Increase focus on low budget marketing - In difficult times (especially recessions), many business owners panic and the marketing function of a business is the first to get cut. However, with less advertising and marketing, the funnel of incoming prospects is reduced, creating even more revenue decreases, and setting up a vicious cycle. This can be a fatal mistake for your business. The key to success in hard times isn't to reduce your marketing activities, but to replace them with low-budget marketing. Low-budget marketing can include such things as: digital marketing, PR, networking, public speaking, etc. Your marketing should not be a reflection of the limitations of your budget, only your creativity.
  76. 76. Source:http://businessknowledgesource.com/smallbusiness/how_to_help_your_small_business_survive_tough_time s_030974.html Build a strong business network from the start! Connect with your peers - Remember that hard times in the form of recessions or industry shakeouts, impact more than just your business. Experienced and long lasting business owners will have built a network of trusted industry colleagues who will share different insights and new agile opportunities. Connect with industry trade groups or professional peer groups, to extract the knowledge and best practices that should be applied during a business slump.
  77. 77. Importance of a mentor  Find someone to mentor you through the challenging times - If you have someone who you admire and respect and who you know has been through a similar challenge, why not reach out and ask for help. Be totally honest with them, tell them the problem, exactly how bad it is and what help you need. They can't be expected to take on your problem, but having them to talk to, and to offer advice on how they got through their own challenges could just prove invaluable.
  78. 78. Importance of a mentor  If there isn’t anyone in your network link in with local Enterprise supports – Ireland: Local Enterprise Offices
  79. 79. Making the Most of Business Mentoring The right business mentor can have a profound and fundamental impact on your business, particularly for those at the early stages of an enterprise and aiming to have high rates of growth. There are five ways to make the most of business mentoring: 1. Understand why you need or want this mentor. Usually, the mentor is someone whose knowledge and/or experience exceeds your own to such an extent that their input can have a substantive positive impact on your business´ performance and your ability to run it.
  80. 80. 2. Know where the issues lie. Although the mentor should be able to indicate some of the areas that you might want to focus on, you are in the best position to understand your business and the goals that you want to achieve. The mentor is there to help guide you toward these goals. 2. Have the right attitude. You need to enter this relationship with the right mindset and attitude. See your mentor as someone who is trying to help you carry your business forward, and has valuable advice to give you. Making the Most of Business Mentoring
  81. 81. 4. Know how your mentor can add value. A mentor cannot be “ all things to all people” and to make the most of their input, you need to understand where their expertise lie and find ways that these are applicable to growing your business. 5. Find the time. It’s easy to get caught up in the day to day challenges of running your own business and putting bigger challenges on the back burner. The mentor is there to help you to develop and achieve your longer term goals. You should put everything out there and explore creatively with your mentor. Making the Most of Business Mentoring
  82. 82. Case Study Dan O’Connor, Brona Chocolates Ltd Dan O’Connor from Co. Kerry, Ireland ran a construction company. In 2005,he was building 200 houses per year, turnover of over €1 million and drove a top of range Mercedes. Then the recession hit and some bad investments made. His business came to a halt. In this case study Dan share his journey in setting up Brona Chocolates. Dan will speak of his journey in restarting from running a pub and a sweet shop. He now sells his award winning chocolate bars to over 140 retail customers across Ireland
  83. 83. Dan O’Connor – key learning snippets o Starting again – how hard can it be? o The key is finding something you LOVE o Now at a sustainable level. What is a sustainable level ? Not having to tell any lies o Failure is a misnomer. Every business have failures, the stronger ones survive o Entrepreneurship, what does it take? o Hard work and neck, a mindset that is different for everybody o It’s a culture thing and not for everybody. A man in Monaghan had 3 children in university and his neighbours felt sorry for him that none of them were smart enough to start their own business !
  84. 84. Dan O’Connor – key learning snippets What have I learned? o Cash is King. Use your resources very carefully. I have invested €200,000 in Brona and at no stage have I had €10,000 in the bank o Be patient o Be a little ruthless o Your children can’t eat loyalty and being noble o Look after yourself a little bit o Great outside resources available –a supportive environment – utilise them!
  85. 85. Dan O’Connor – key learning snippets EXERCISE 5: Watch Dan O’Connor Case Study https://www.youtube.com/watch?v=-KFVnLnpgpA