Plan... Before You Start Your Business Plan

Preparation is the Key to a Successful Venture

The National Federation of Independent Business' has found that over their lifetime only 39% of businesses are profitable. Great opportunities take time, energy and money from executives and entrepreneurs. With all the expertise and resources that go into creating a successful business, why do such large percentages of start-ups fail?

John W. Mullins, author of "The New Business Road Test", claims entrepreneurial failure is a result of overlooking the 'fatal flaw' at the first stages of business development.

Mullins says, " Most business plans should have been abandoned before they were written...The good news in all this is that opportunities are not static. They can be shaped in many ways. Potentially fatal flaws are there to be fixed." (The New Business Road Test, p. 21)

A fatal flaw is a fundamental flaw in the opportunity which is easily overlooked if a thorough examination of the business idea is not completed. Identifying the fatal flaw is important in helping entrepreneurs make 'mid-course corrections to reshape the opportunity so that it becomes worth pursuing- before writing a business plan.' (pg.22)

The process of examining all aspects of the opportunity before writing a business plan will help identify and fix issues. 

Mullins recommends stopping at certain points in the development of your business idea to choose to opt out or to continue with the opportunity. He suggests four possible solutions for moving forward once the critical flaw has been identified:

• Test a different market

• Offer a different product or service than originally planned

• Work at a different level in the value chain, as a wholesaler or distributor

• Change the entrepreneurial team to add new skills 

Or, if no fatal flaw exists your research may help:

• You improve your product or service, or help you offer a solution that is faster and cheaper than the original.
• You may be able to identify a sustainable competitive advantage
• You may gain greater confidence in the team you have chosen.

If you have an opportunity that is worthy of your time and energy you owe it to yourself, your partners and your investors to make sure you can offer a sustainable product or service that attracts customers and capital.

Finding and fixing your fatal flaw before you write your business plan will give your idea a stronger foundation, your investors greater confidence and you the best chance at starting a successful business right out of the gate.

Click here for more information on John W. Mullins' book, " The New Business Road Test."

 

Franchising: Small Business Opportunity

Franchising Introduction

So you're interested in opening a franchise of your favorite business and you are looking for some answers? Below are some definitions to get your franchising feet wet.

The Basics

 What is 'franchising'?

     The concept of franchising started naturally as one business owner saw an opportunity to expand his own successful business beyond his geographical region by lending his business model and trademarks to another qualified entrepreneur. This allowed the franchisee to adopt the name and original reputation for quality, value and service while offering a great product to a larger number of people.

What are the benefits if I become a franchisee?

  There are many benefits of opening a franchise. The most popular reasons to adopt a franchise business model are the use of their reputation, national branding campaigns and access to a support system as well as reduced investment risks.

  In exchange for start up and royalty fees, a franchiser offers a complete business model, commitment to building the brand, education and training, operational support and leveraged buying power.

•  The U.S. Dept of Commerce states that 90% of franchises are still in operation after 10 years, compared to just 18% for other forms of small businesses.
• A recent Gallup Poll of franchisees found that more than 94% considered themselves successful, and that more than 75% would buy their franchise again if they had to do it over.

For more information on franchising contact the U.S Small Business Association, a government run agency, which exists "to to aid, counsel, assist and protect the interests of small business concerns, to preserve free competitive enterprise and to maintain and strengthen the overall economy of our nation." Click Here to visit the SBA website for more information on franchising.