Business strategy always comes first, before the business plan, in my book at least. Marketing, Sales, Delivery and Finance strategies are all components of that business strategy, but follow on from it. The business plan consists of each of those strategies, to the extent we’ve developed them. It doesn’t have numbers in it until we can explain the how, who, why, what, how much, developed in the strategies.

Building that business strategy needs to be a process, just like most of the other stuff we do. The process helps us start from a place we haven’t figured out yet, and end up in another we haven’t decided yet. And my process begins with a road map. It starts where we are now and passes a number of milestones each of which points to the next. As we progress through the milestones we can adjust our course, changing the plan as the facts change.

Road Map

The first milestone is the road map itself. Here’s what it looks like before we’ve done any work

Value Proposition

Define a value proposition which sits in clear blue water. Which benefit will we offer to which end users and partners. In this way we’ll position our new business. We’ll have our elevator pitch, our keywords and a personality.

Resources

Define our resources – what do we have available to support the business.

Delivery Model

Define our delivery model – processes and resources we’ll use to deliver value to the people who’ll be paying us money. With this we’ll be able to explain how we’ll deliver the value proposition.

Market

Define our customers – who will we deliver to and how will the value reach which end user customers.

Marketing

Define our marketing strategy – how will our customers know about our value proposition? What will be our process for attracting their attention, engaging their interest and establishing their adoption of our solution.

Sales

Define our sales process – prospecting, pitching, closing, contracts, customer service, account development.

Resource Needs

Define our resource delta – what do we need that we don’t have.

Business Model

Build our business model – here’s where the numbers start – market size, value and prices, volumes, costs, cash flow, investment required.

As of today we don’t have any of this detail, so, whilst we can explain the technology and what we think is our market, we don’t have a business strategy yet.

But we do have our road map.

Once we’ve filled in some detail of our own there’ll be a white paper covering this topic and we’ll publish it in our Downloads area. In the meantime you’ll find lots of interesting papers there about business planning and process – all free (for the moment).

Hopefully you’ll come back to find out the rest of our story as it develops – a living case study of building a business from scratch.

And even more hopefully you’ll take a few minutes to comment, or add your own thoughts. We can all use some additional perspective when working out our business strategy.

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June 24th, 2010 - Posted in Building our business Case Study  |  Edit | Add a Comment Building our business Case Study. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site. Edit this entry. -->

If we are to be hauled back from the brink of ruin, the Conservative-led Coalition will need to introduce something far more radical than short-term nifty housekeeping. Its goal must be nothing less than the recalibration of a collective mindset. Those who want it all, demand it now, and expect to pay later – or, better still, hope that someone else will – have run out of road. For the Dick Turpin generation, next stop is York Assizes. The game is up.

According to Dr Tim Morgan of Tullett Prebon, a City broking firm: "Western societies have been succumbing to a psychology which decrees that tomorrow doesn't matter, at least until it arrives… An excessively relaxed attitude to debt is the real problem, applying pretty equally to governments, businesses and individuals… Borrowing means over-consuming now at the expense of under-consuming later. Welcome to 'later'."

As Voltaire noted: "The art of government consists of taking as much money as possible from one class of citizens to give to the other." This was not lost on Gordon Brown, who pilfered from the old (he raided their private pensions) and burdened the young (he loaded them with debt) in order to buy the votes of his recipient class. The upshot is that the state's stock of debt is rising exponentially – and the cost of servicing these obligations is becoming obscene.

Closing down this in-hock horror show will require a demonstration of political courage not witnessed since Geoffrey Howe's 1981 Budget, when he took on a consensus of academic economists and know-alls. In so doing, he succeeded in reducing inflation from 11.9 per cent to 3.8 per cent in less than two years. We cannot be sure that Mr Osborne and his unlikely ally in the Treasury, Danny Alexander, are made of such unbending material, but yesterday's pre-emptive strike on Labour's excesses augurs well.

Hitherto, the debate over public spending cuts has centred largely on back-of-the-sofa money. The extent to which Mr Brown and his cheerleaders were able to deflect attention from their gross irresponsibility can be gauged by the poverty of argument during the election campaign. It all boiled down to £6 billion. Mr Brown claimed that Tory plans to take this sum "out of the economy" would somehow wreck Labour's caring, sharing nirvana.

This was ridiculous: £6 billion is less than half of 1 per cent of Britain's GDP. Even for prudent chancellors, it's not much more than loose change. In order to prevent our national solvency from being overwhelmed by debt, Mr Osborne must cut public spending by many times that amount. If he merely achieves the goal set out by his predecessor, a halving of the UK's annual £155 billion deficit by the end of this Parliament, the total amount we owe will double to £1.4 trillion, implying interest charges of about £70 billion a year.

Think of how your credit card works. Paying off no more than the minimum each month results in the outstanding balance becoming bigger and bigger, until the limit is breached and the issuer withdraws the facility. At some point the UK's lenders will lose patience. To believe otherwise is delusional.

So where should Mr Osborne start? What about his local Boots, for a pair of earplugs? These would block out hysterical voices from the Opposition benches, screeching that a smaller state leads inevitably to a diminished economy – and, therefore, to permanently higher unemployment. This argument has the credibility of the Flat Earth Society, but not its charm.

As the Institute of Directors explains: "We don't think rapid deficit reduction based on lower spending will undermine economic recovery… There is very strong evidence from economic history over recent decades that we can have an expansionary fiscal consolidation. The immediate direct impact of lower public spending is to lower GDP, but indirect effects quickly kick in to raise private-sector spending. The silver lining here is that tight fiscal policy might help maintain near-zero interest rates for years, not months."

Mr Osborne must resist those urging punitive, direct taxes on anyone who works for a living and has the cheek to be successful. Labour leadership candidate Ed Miliband wants the temporary 50p "supertax" to be permanent. "It's not about reducing the deficit, it's about fairness," he says. When high taxes become an ambition – an end, not a means – we are in deep trouble. From there, it's only a skip and a jump to Soviet-style dirigisme.

On the Treasury's excellent website, there is a chart that shows projections for government spending and how it is sliced up. At the time of the last Budget, three months ago, by far the biggest item for 2010-11, at £196 billion, was "social protection". This has nothing to do with national security or the police. It covers welfare and public-sector pensions, and accounts for more than we commit to public order, safety, housing, the environment, industry, agriculture, employment, defence, transport and personal social services added together.

Even the NHS, which gobbles up £122 billion a year, pales alongside the tax-consuming capacity of social protection. If Mr Osborne is serious about overcoming the pernicious effect of a welfare system that rewards the feckless, subsidises the workshy, penalises the thrifty and punishes those who prefer self-support to state handouts, this looks a good place to start. Social protection, a ghastly Labour euphemism, devours 36p of every £1 raised in taxes, compared with 16p by education and just 7p by defence.

The usual suspects will, of course, protest that reductions in any department represent evidence of the new government's callous approach to the needy. But for those who oppose a crackdown, this week brought a timely reminder of the state's disgraceful indulgence of welfare‑guzzling layabouts: the case of Shannon Matthews, the little girl who was "kidnapped" by her own mother in cahoots with a male associate.

Working out how to protect victims such as Shannon, while discouraging her repulsive guardians from wallowing in state-sponsored idleness, will not be the least of Mr Osborne's challenges.

Starting a business is easy – people do it every day. Building a business from a baseline of nothing is slightly more complex. But that’s what we’re going to do and we’ll be telling the story – our living case study – as we go along. It might be fun, It’ll certainly be challenging, and probably a little embarrassing in places – like being caught unawares on the WC.

Over the past couple of years we’ve acquired some front line experience in FP7 research projects – as Exploitation Managers. That’s how the European Commission describes the commercial people. Exploitation Managers are the ones responsible for turning the ECs investment in grant into something which actually benefits people. That means a starting and building a business – some entity selling the results of the research to others who want to buy it.

Exploitation Management can seem a poison chalice – working with academics and scientists on one hand and with EC bureaucrats on the other. They all have egos the size of mountains and insist the world has to go around their way. Unfortunately one wants to go clockwise while the other holds the cards and is going the other way.

But that’s just the start of the problem. The really difficult bit comes with funding. EC rules allow the grant to cover the costs of exploitation planning and reporting, but not actually doing the messy job of turning what the scientists come up with into products others will invest in.

On the other hand FP7 offers a real opportunity. It pays the costs of the best and brightest so they can produce genuine innovation at a fraction of the cost private sector businesses would incur.

In our case the opportunity is a new technology for diagnosing Parkinsons Disease. We get to own a piece of the IPR developed by 3 SMEs and 4 universities. That is we get to own a piece provided the research results in something healthcare providers and their supply chains want to buy.

There are just a couple of minor problems we need to find ways around.

The research will take at least 3 years.

• We have to put in 9 months of effort (at least) with no funding
• Barriers to entry for the medical device business are the size of Everest
• Working with academics is akin to herding cats
• Flexibility isn’t a word in the EC lexicon-they don’t do that

That’s the downside. The upside is enormous. Neurological diseases are far worse for quality of life and cost of healthcare than anything else. Aging populations mean the problem is only going to get bigger. Within 5 years degenerative diseases will be the world’s biggest problem, and there are no obvious solutions.

So here’s the bottom line

• Massively profitable and growing market
• Zero competition
• No interest from risk averse investment community
• Hard to reach buyers
• No cash

What would you do with this opportunity?  How would you set about starting and building a business to make the most of this opportunity?

We’re getting set with the planning – different packaging, channels and partners – and will share our ideas in this living case study as we go along.  Watch this space.

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June 14th, 2010 - Posted in Starting a business  |  Add a Comment Starting a business. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site. -->

The CEO rarely has any experience of sales management. The boss typically has a finance or maybe operations background. That’s probably because sales managers, (and the sales guys they started out as) have a different skill set.

Getting the best out of others through collaboration, communication and compromise isn’t what sales people typically do. They’re independent, individual and self reliant. They can seem difficult, fast and loose, disloyal. Sales people aren’t team players, or at least proper ones aren’t. That’s why they don’t often get the top job and why CEOs don’t understand sales and sales management.

The personality of the sales guy is dictated by the nature of the role. It’s the only one where inputs are irrelevant. What counts is the output numbers – orders, revenue, margin, cash. That’s how they get paid, and fired if they don’t make those numbers. A career in sales is living on the edge. Track record counts for little. What matters is the next quarter.

No wonder sales people can seem argumentative and challenging. Everybody wants them to be, with prospects, with the competition, and even with difficult customers. Asking them to turn into collaborative team players as they walk in the office is like King Canute asking the tide to turn. It isn’t going to happen.

Sales Managers sit in the middle. They’re the shock absorber in the system. Taking the heat from the C suite on everything the sales guys do. Taking the heat from the sales guys about ineffective marketing, unrealistic pricing, poor customer service or late delivery. In every business, the rubber meets the road with the sales team, and the sales manager navigates a way through everybody’s failings to keep the wheels turning. Without good sales management, turnover of sales people is high, revenue disappoints and low margins show up in the bottom line. And the one who ends up paying for that is most often the CEO, with his or her job.

The CEO wanting to make his business tick should spend time with sales management, because the sales managers are the ones who really know where the theory doesn’t stand up in day to day practice.

The CEO needs to value, and support sales management. Unfortunately s/he usually does the opposite. It’s much easier to go along with the inside crew – marketing, operations, customer service and finance. But those colleagues don’t make the world go around. They just ride on the backs of the people who do – the hunters, fighters, producers, otherwise demeaned as sales people,

The CEO needs to understand sales management – the processes, systems, and tools used, the challenges and how they’re addressed.

The CEO needs to understand the end to end process, from targeting to account development. That’s the best way to understand where problems are. Lack of sales isn’t usually the sales management’s fault. It’s mostly likely in the product, pricing or marketing.

Unfortunately its usually sales management who gets the blame.

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June 14th, 2010 - Posted in Surviving Sales Management  |  Add a Comment Surviving Sales Management. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site. -->

Sales Management can be both the best job in the world, and the worst. And working for sales managers can be fun, or frustrating. From both sides – the manager and the managed – Sales Management is a roller coaster ride, always with the risk of falling from the carriage.

It’s not a lot of fun in the C suite either. Relying on Sales Management for revenue can be an unsettling experience. The CEO, COO, CFO are all dependent on sales performance for the revenue and cash which keeps them in the job. They have minimal influence and maximum dependence. No wonder sales managers don’t last too long.

In business most success depends on surviving sales management. Perversely, it’s a topic rarely covered in those management books, or sales skills articles. Nobody writes about, teaches, or coaches in how to make it work. It’s one of those subjects, like colonoscopy, nobody wants to acknowledge.

So we’ve decided to fill the void with a series of articles all related to some dimension of surviving sales management. We’ll look at how reps can win promotion to the executive level, sales directors and CEOs can make the most of their sales managers, and how those same managers can establish the success which will keep them in the job.

We’ll look at philosophy, strategy, tactics and process required in the professional sales operation – that’s stuff everybody should understand. After all who doesn’t want to be professional

But we’ll also look at some of the black arts – the down in the dirt, street fighting which makes stuff happen when everything’s going wrong.

In any operation the more people who understand how sales management works and how it adds value to everybody else the better. Not just sales reps but customer service, operations, finance and the C suite. Everybody in the business depends on the sales process working as well as possible, and they should support it.

Not get in the way.

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June 11th, 2010 - Posted in Sales Manager, Sales Strategies and Tactics, Surviving Sales Management  |  Add a Comment Sales Manager, Sales Strategies and Tactics, Surviving Sales Management. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site. -->

Every Sales Manager needs a set of questions they’ll use to review their sales reps pipelines and qualify the deals in them. Those questions will tell them the probability each deal will turn into a real sale, and highlight risks of losing out to competition, or of the sale not going down.

Ideally the same questions will be applied to every qualification review. They’ll become part of the sales management process and help everybody work to the same rule book. Reps like easy reviews with their sales manager. Once they know the questions they’ll be asked they’ll work harder at finding the answers, before the review meeting.

Sales Managers will spend less time achieving more accurate reviews and improve the accuracy of their sales forecasts when they’re consistent with the review process and qualifying each opportunity with the questions asked of the rep.

But which questions should the sales manager ask?

Here’s my checklist of questions I’ll ask every sales rep about every deal. They might not all be appropriate in your business, but my guess is most will.

• Do you understand the business imperative?
• Is this an existing happy customer?
• How much is the committed budget
• Who holds the budget?
• Have you met with the decision maker?
• Do you understand the decision process?
• Does your offer fit the requirement 100%?
• Are any incumbent suppliers excluded?
• Is there a start/end date planned
• Does the customer deliver on agreed dates?
• Do you have an internal Coach?

Just a word of warning. Rigidly applying this sales management process never made me popular with my sales teams. Reps can be over optimistic, and some can even be desperate. Either way they don’t like sales managers raining on their parade. But for me at least that’s a secondary issue. Knowing the facts, being able to intervene to increases the chances of winning, and presenting accurate forecasts to my boss are much more important.

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June 10th, 2010 - Posted in Sales Manager, sales qualification  |  Add a Comment Sales Manager, sales qualification. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site. -->

Making a business plan make sense is more challenging than most might think- at least until they write one and try to persuade other people with it. It’s almost impossible to write a business plan which anybody so inclined can ridicule. And the less they know of the subject, the easier it is to do.

Seth Godin has a remarkable talent for explaining stuff whilst preserving the complexity. In his post The Modern Business Plan Seth suggests new words to define both content and context for any business plan.

Personally, I really like this way of explaining philosophy, strategy, tactics and risk amelioration – and I’m sure you do to

The modern business plan

It’s not clear to me why business plans are the way they are, but they’re often misused to obfuscate, bore and show an ability to comply with expectations. If I want the real truth about a business and where it’s going, I’d rather see something else. I’d divide the modern business plan into five sections:

• Truth
• Assertions
• Alternatives
• People
• Money

The truth section describes the world as it is. Footnote if you want to, but tell me about the market you are entering, the needs that already exist, the competitors in your space, technology standards, the way others have succeeded and failed in the past. The more specific the better. The more ground knowledge the better. The more visceral the stories, the better. The point of this section is to be sure that you’re clear about the way you see the world, and that you and I agree on your assumptions. This section isn’t partisan, it takes no positions, it just states how things are.

Truth can take as long as you need to tell it. It can include spreadsheets, market share analysis and anything I need to know about how the world works.

The assertions section is your chance to describe how you’re going to change things. We will do X, and then Y will happen. We will build Z with this much money in this much time. We will present Q to the market and the market will respond by taking this action.

This is the heart of the modern business plan. The only reason to launch a project is to change something, and I want to know what you’re going to do and what impact it’s going to have.

Of course, this section will be incorrect. You will make assertions that won’t pan out. You’ll miss budgets and deadlines and sales. So the alternatives section tells me what you’ll do if that happens. How much flexibility does your product or team have? If your assertions don’t pan out, is it over?

The people section rightly highlights the key element… who is on your team, who is going to join your team. ‘Who’ doesn’t mean their resume, who means their attitudes and abilities and track record in shipping.

And the last section is all about money. How much do you need, how will you spend it, what does cash flow look like, P&Ls, balance sheets, margins and exit strategies.

Your local VC might not like this format, but I’m betting it will help your team think through the hard issues more clearly.

via sethgodin.typepad.com

Posted via web from stevensreeves

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June 3rd, 2010 - Posted in Starting a business  |  Add a Comment Starting a business. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site. -->

What’s in your value proposition? Can you explain in clear terms what you’ll do (and what you won’t do) and how it benefits you? Can you explain in terms your customer will understand why people choose you over the competition and how they’re better off, because they did?

Here’s a list of questions entrepreneurs or business leaders might usefully ask themselves. A compilation of the answers could add up to a credible value proposition. That makes a great start to any business plan, marketing brief or even customer pitch.

It’ll also make a great series of posts in our company blogs – so I’d better get on with that. How about you?

As always Seth Godin has a way of explaining the most complex ideas in terms anybody can understand. The complex idea of course is the value proposition. The simple terms are Seth’s 16 questions.

16 questions for free agents

If you’re starting out as an entrepreneur or a freelancer or a project manager, the most important choice you’ll make is: what to do? As in the answer to the question, “what do you do?”

Some questions to help you get started:

1. Who are you trying to please?
2. Are you trying to make a living, make a difference, or leave a legacy?
3. How will the world be different when you’ve succeeded?
4. Is it more important to add new customers or to increase your interactions with existing ones?
5. Do you want a team? How big? (I know, that’s two questions)
6. Would you rather have an open-ended project that’s never done, or one where you hit natural end points? (How high is high enough?)
7. Are you prepared to actively sell your stuff, or are you expecting that buyers will walk in the door and ask for it?
8. Which: to invent a category or to be just like Bob/Sue, but better?
9. If you take someone else’s investment, are you prepared to sell out to pay it back?
10. Are you done personally growing, or is this project going to force you to change and develop yourself?
11. Choose: teach and lead and challenge your customers, or do what they ask…
12. How long can you wait before it feels as though you’re succeeding?
13. Is perfect important? (Do you feel the need to fail privately, not in public?)
14. Do you want your customers to know each other (a tribe) or is it better they be anonymous and separate?
15. How close to failure, wipe out and humiliation are you willing to fly? (And while we’re on the topic, how open to criticism are you willing to be?)
16. What does busy look like?

In my experience, people skip all of these questions and ask instead: “What can I do that will be sure to work?” The problem, of course, is that there is no sure, and even worse, that you and I have no agreement at all on what it means for something to work.

via sethgodin.typepad.com

Posted via web from stevensreeves

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June 3rd, 2010 - Posted in Starting a business  |  Add a Comment Starting a business. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site. -->

Learning to blog for a business can appear a daunting prospect. It certainly did the first time somebody suggested it to me. What would I write about? Who would be interested. How would they find my stuff? And anyway school was a long time ago. Maybe my command of the language isn’t all it needs to be?

That was a long time ago. Now I’ll write most days. Mostly for our businesses but sometimes just for fun. And then there are times I’ll get so angry about something blogging my disgust is a relief valve. I can say what the hell I like. There’s a lot to be said for blogging.

In my opinion every business should have a blog – a compendium of thoughts and arguments explaining what the business does, how its better than the competition, and how customers benefit.

Our blogs are just that. Prospects and customers can browse our pages, understanding our value proposition from the perspective they choose. Every article is our best sales presentation on one dimension of the problems we help people solve. We don’t have to quiz prospects to figure out their pain points. We just offer all the answers and invite them to choose which best relates to their needs.

But most businesses we talk to can’t find a way over the barriers. First there’s the question of technology. Then there’s the question of content, or topic. And finally there’s the hard work – learning how to write in simple terms about complex issues, keeping it short, on topic, and hopefully a little entertaining.

Technology is really simple – go to Posterous (my favourite for the novice), Blogger or Wordpress for free software and hosting.

Content shouldn’t be difficult – it’s really just the arguments you use in sales pitches.

Writing is the tough part. There is no way around the need for somebody to put into words on a web page the reasons customers should come to the business. But that particular mountain turns into a mole hill with Brian Clark’s – Copyblogger – advice. In his article Is F.E.A.R. Holding you back he generously explains how would be, but held back, bloggers can face down the devils and get on with it.

Personally, I don’t know Brian Clark but admire his work immensely. Anybody wanting to learn about blogging for their business should be following him. Before they know it they’ll at least be one eyed men in the land of the blind, and enjoying it.

And the proof in the pudding? Through nothing but blogging we’ve engaged interested people all over he world – from Beijing to San Diego. In the last year we’ve had more 2,000 download our White Papers and 350 sign up for our software.

Ideas engage people, and blogging engages people in ideas.

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May 28th, 2010 - Posted in Business Internet, Social Media Marketing  |  Add a Comment Business Internet, Social Media Marketing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site. -->