Monthly Archives: February 2015

So, You Are Expecting…

All businesses, including entrepreneurial efforts, go through phases of growth known as the business life cycle. The four critical stages are start-up, growth, maturity and decline. As you consider your business goals, what phase are you in? If you are just beginning a business or growing steadily in revenues, read on as management analyst Deron Mundle with consulting firm Riuberg Corp, shares what you can expect in the startup and growth phases.

© Nasir1164 | Dreamstime.com - Wordcloud Of Rbc (real Business Cycle) Photo

© Nasir1164 | Dreamstime.com – Wordcloud Of Real Business Cycle)

So, You Are Expecting…

So, you are expecting to grow a business. Your concept, which some time ago was just a passing idea, is becoming an enterprise. You anticipate that it will eventually turn a profit and provide employment for many within the community.

The research has been done and friends, family and colleagues are showing a real interest in what you have to offer. The mentor from SCORE has asked many tough questions and now you are both satisfied that the concept really has a chance to succeed. You have taken the giant step to formalize a business and have received all of your licenses and permits. Congratulations, you have a new venture on your hands.

What then should you expect at this phase of your endeavor, a period that the online magazine, Chron, calls the start-up stage?

Navigating the Start-Up Phase

You will devote long hours to the new entity in hopes of making it viable in the market. It will be essential to conserve the cash coming in and going out of your business while still buying supplies, paying for help and finding customers. Even if you do not make enough sales to cover the expenses, it will be necessary to put more money in the business. Yes, more capital investment though you may not able to take a salary. In the unfortunate event that money runs out and more financing is not available, the business will have to be shuttered.

During the start-up phase with its attendant psychological pressures, the new entrepreneur may find solace by networking with owners of other fledgling enterprises and seasoned business operators. By sharing experiences, you may benefit from the knowhow and expertise that others have. Who knows, they might even give you some referrals.

In a Forbes article, it is reported that eight out of ten businesses fail within 18 months of being started. Yes, that’s correct, 80%. However, your business has found a niche in the market and things are looking good right now.

What then should you look for within what is called the growth stage after successfully navigating the start-up phase?

Building During the Growth Stage

© Johnkwan | Dreamstime.com - Growth In Business Photo

© Johnkwan | Dreamstime.com – Growth In Business Photo

Even with an increasing customer base and higher revenues, you will still need to pay very close attention to your cash flow as cash is the lifeblood of any business. You should also expect to make investments in creating new sales channels such as websites or e-commerce, establish your products and services in new markets, and promote the business with a view to gaining and retaining new customers. It may also be necessary to seek financing and the utilization of accounting and productivity software, to provide greater insights into the operations of the enterprise, is another necessity for any enterprise.

Every business owner starts off with great expectations for his or her enterprise. However, by knowing what to expect at the various stages of the entity’s life cycle, you can better deal with the complexities of owning and running a small business.

 

The Power of the Pitch

Image from Black Enterprise Magazine

Image from Black Enterprise Magazine

The elevator pitch remains relevant. If you are aren’t familiar with it, the elevator pitch is a 30 to 60-second summary of your business, product or message. The premise being that you should be able to describe value to someone in less time than an elevator ride. If they are interested, the conversation may extend beyond that elevator ride. Meaning, the elevator pitch needs to be tight and on point to hit the key elements of your message.

The elevator pitch is also helpful in summarizing your business goals and objectives. In the fast-paced, changing world of social media, a lot of information moves along a continuum, and people need to quickly know the value of the information and what’s in it for them. An elevator pitch is especially useful for meeting people at networking events and business conferences, and is most effective when prepared and practiced in advance.

And while you’re practicing, here’s a great opportunity. For the past 20 years, Black Enterprise Magazine has been sponsoring its annual Entrepreneur’s Summit and one of the highlights is the elevator pitch competition in which $10,000 is awarded to the winning pitch to help build and grow a winning business idea, along with mentorship. The pitch competition is now accepting two to three minute entries through Friday, April 17. Finalists will be invited to participate in a live pitch during the May 2015 Entrepreneur’s Summit in Atlanta, Georgia. For more details, visit here.

Staff at Own Your Idea, LLC have had an opportunity to attend one of Black Enterprise’s Entrepreneur Summit and previewed the pitch competition and can say it is a fun, engaging and educational event.  If your business needs that edge and ready to go to another level, consider entering the pitch competition, if nothing else but for the experience to perfect your elevator pitch.

A SWOT Analysis? But I’m Not Writing a Business Plan…

 

© Brodehl43 | Dreamstime.com - SSWOT Analysis Photo

© Brodehl43 | Dreamstime.com – SSWOT Analysis Photo

As an entrepreneur or small business owner, you may feel you don’t have the time to do all the things you can to grow your business.  But one thing that all businesses should do, no matter the size or amount of sales, is to have some form of strategic plan.  This does not have to be an elaborate process, but understand that what you write down (instead of keeping in your head) helps to guide decisions and align business goals.  Here, freelance writer and management analyst, Deron Mundle, associated with consulting firm Riuberg Corp., describes and shares the value of a SWOT Analysis…

Your business is doing well. Revenues are strong, monthly profits are on target and your employees are great at satisfying the clients’ needs. In essence you are in a sweet spot. So, why is a SWOT analysis something to add to an ever growing to-do list? Wasn’t that something created for the business plan when the company needed that loan years ago?

Defining SWOT

Let’s examine the SWOT analysis and its relevance to a business owner.  SWOT is an acronym for the terms Strengths, Weaknesses, Opportunities and Threats and is a business development process that can provide a big picture perspective of the overall health and viability of an organization.

When conducting a SWOT analysis, the strengths and weaknesses are usually examined together while the opportunities and threats are paired for analysis.  When the business’ strengths and weaknesses are scrutinized, the focus is on the internal environment of the enterprise, an area that is basically within the purview of the business owner. Factors such as pricing, products, promotions, communication, people, operational processes, etc. are examined and the entrepreneur can make changes to these areas as necessary based on the company’s mission and outlook.

On the other hand, the opportunities and threats that face a business exist within the external environment. In this realm, the business owner has little, if any, control. Some of these factors include political agendas, new regulations and legislation, technological changes, emerging or growing competition, social and cultural shifts, natural disasters and national security challenges, to name a few. While these forces are all external to the business, they can have a significant impact on the operations and viability of the entity.

Companies like Atlanta based Coca-Cola, a multinational beverage company, uses the SWOT analysis to gain insights on how to better position itself against its rivals, such as PepsiCo. But there is value in performing a SWOT for small businesses, too. Dana Griffin describes the SWOT analysis in Chron as a practical tool that an entrepreneur should use to decide if an idea is worth further development.

How to Use SWOT Data

So you decided to perform a SWOT, so now what to do with the data? When the results of the SWOT analysis or SWOT matrix are examined, an action plan should be devised to maintain the strengths identified within the internal environment and reduce the perceived weaknesses. Additionally, the plan should document areas in which the entity may grow and also highlight the significant vulnerabilities.

Engaging in the SWOT analysis process is a useful management planning activity that should be conducted every six months or even once a year. It will be time well spent in the development of your small business or entrepreneurial goals.