Understand the Results of Your Business Plan
Published June 30, 2009 | 
I need to make one statement right away and get it out in the open, and that is the fact that no business plan is ever 100% dead on accurate, but of course having no plan is absolutely never the right thing to do either, so as a result it’s important to examine the actual results of the business compared to those projected in the business plan.
Most plans are wrong and yet vital, it’s an unexpected and surprising thing to hear especially if you have never put a business plan together, so after making a statement like that where else do we go, except to the very core of what business and strategic planning is.
Let me start out by saying that those who are deeply involved in plans prepare projections that many times are incorrect, and no one I know even came close in predicting the steep plunge in the global economy last year in the fall of 2008, so it goes without saying that those who are deeply involved in business planning processes around the world have been going through a lot of changes, adjustments and corrections, and multiple reviews and revisions.
So you see why my opening statements about needless ineffective business plans, and yet their importance starts to make sense, and as we look ahead to the rest of the 2009 many upbeat forecasts are still in the review and revision process and starting to reflect the reality of the global economic situation, which always brings up the question why do business and strategic planning in the first place, is everyone just wasting their time developing plans and forecasts? And the answer becomes obvious that although the results are inaccurate at times, how can we determine where we are if a map hasn’t been produced to show us how we got there, and of course where we are going.
If when you look at your plan prepared last year, and of course the results should be greatly different from what actually took place, you would compare the two in detail and look not only where the differences are, but where the greatest differences exist, for example, where expenses were tied to sales, where sales performed as expected, and look for how all the numbers were supposed to tie together, not just why they didn’t.
And if you are like the many thousands of global entrepreneurs that did not have a plan, then this might be a really good time to get the process started in order for you to develop and have a much clearer view of your future business, and you can start by making some simple projections for sales, costs and expenses, and at this time don’t worry about whether they’re wrong or not, just try and make sure that you check each month to determine where and how and in which direction the numbers were incorrect so that you can correct the information, and this whole process should bring you much closer to the action of what is taking place in the global markets and increase your awareness of the actions you need to take to increase your success.
By implementing the review process on a monthly basis, if you are wrong you are only wrong one month at a time, and as you use the plan comparison to actual results and associated analysis to see more closely what is happening exactly, your adjustments will improve, and in the future results will be much more accurate and in tune with market activity, and you should see monthly improvements.
These planning and analysis steps will put you in a better position to forecast more accurately when the markets should start to improve, and they will at some point, and you will be able to use what you learned in the process to see the signs, anticipate what will take place, and plan your actions accordingly.
So although the results of planning may be wrong and inaccurate, it is still a critical key to successful business and an essential tool for successful global entrepreneurs, as they learn that in addition to preparing an initial strategic plan, an important part of the process is making necessary changes and adjustments in determining how to recover in the most effective and efficient manner, and how would you know what steps to take in the recovery process if you didn’t prepare the business and strategic plans in the first place.
Global Entrepreneurial Strategies Part 3
Published June 22, 2009 | 
“The entrepreneur always searches for change, responds to it, and exploits it as an opportunity.“–Peter Drucker
It is extremely important to realize that highly successful Global Entrepreneurs go to great lengths to develop and maintain their level of understanding of the entrepreneurial strategies they identify and employ, and the specific impact the strategies have on each phase of their business operations.
The U.S. and Global entrepreneurial strategies discussed so far have been the “leadership” and “imitation” strategies. Another strategy involves the control of a small market and is called the “entrepreneurial niche” strategy that means a “practical monopoly” in a “small segment of the market,” and this strategy aims at making successful entrepreneurs immune to competition and therefore unlikely to be challenged, as the successful entrepreneurs will take the cash and let the notoriety go, since it is not important whether they’re known in the marketplace because they control, their segment completely.
Of course, a drawback to this strategy is there is “very little growth” experienced in the market, depending completely on the size of the market, so that if the number of consumers grows, then the business grows, if the size of the market decreases, then the associated business goes down, and keep in mind this strategy can go down fast, as it can become obsolete almost overnight if someone finds a different way of satisfying the same end use.
A similar entrepreneurial strategy involves “highly specialized skills” that tend to serve a larger niche, or market size, and can put entrepreneurs so far ahead in their field that it’s hardly worth the competition to challenge them since they become the “standard”, and typically the timing of the strategy has to be done at the very beginning of a new industry, a new custom, a new market, or a new trend.
It is important to know of course, that specialty skill niches are rarely found by accident, and results from a “systematic analysis of innovative opportunities,” and in every instance the entrepreneur looks where a special skill can be developed to give their new enterprise a unique controlling position, but once the controlling position is achieved the entrepreneur’s skills must constantly be improved in order to stay ahead of any competition, and maintain market control.
Experience has shown the specialty skill niche is a “highly advantageous position,” especially in the rapidly expanding “new technology industry, or market” where it is the most advantageous strategy. In a new technology, a new industry, or a new market, the strategy offers an optimal ratio between opportunity and risk of failure, or in other words the greatest chance for success and the combination of today’s Internet market and social media represents extremely interesting areas for such success.
Experience has also exposed limitations and it is important to note the greatest threat to the specialty market position, is success itself that turns the niche market into a mass market that is flooded with competition, and presenting the entrepreneur with the challenge of knowing exactly when to “re-adapt the business model” or “sell the business” for the most profit and continue searching for new specialty niche markets to explore and conquer, but the return on investment of time and skills can be extremely high.