Building your Business: Saying NO to Clients

Time is our most valuable resource. Unlike money, we will never be able to produce more of it.

We likely have to think differently about how to find ourselves with more time.

In the early stages of growing a business we particularly feel the limits of time. We are likely the sole employee of our enterprise which means all tasks fall upon us. We are the visionary, the salesmen, the manager and the labor. We also have to do all the admin that has no one to bill for the service other than ourselves when we do not do it. Time is furiously present when deadlines loom yet always absent when rest and play are needed for the entrepreneur.

So what can you do?

The answer is very simple to state, it is actually one word, we need to say NO. But what do you say no to, everything feels eminant. No visionary time no distinction. No sales no revenue. No management no efficiency. No labor no invoices. No admin, no foundation. It is not a matter of saying NO to any of the overarching hats on the whole, it is matter of saying NO to the circumstances encountered while taking on the role.

To win back time, one of the best places to consider saying no is in your SALES. Yes saying no to customers is one of the most important steps in building a flourishing company. Customers dictate not only the pipeline of revenue coming in, but also the time spent creating revenue. If the cost of serving a client exceeds the amount of revenue in, it is hurting your business.

You can be reasonably accurate in determining the revenue that a client might bring in, how many widgets will they buy or how many hours might you bill them determines your top line. The more challenging consideration is what will it cost you to do so.

Here are a few things to assess when consider the cost of serving a client:

Are they competent? Do they do what they say they will do well? If they are unable to add value because of thoughtless work efforts internally or externally they will not be in business long and will not be an account you will receive funds from. You will spend time and see no return.

Competence shows up early in building a relationship. There is a good chance that if someone can not manage their own schedule to show up prepared and on time they probably can not handle scheduling a rigorous project calendar let alone a company trajectory.

Are they able to communicate? There are very few things that are in our control. Circumstance will almost always create situations where things do not go as planned. Not to mention high achieving people will push limits of their ability and mistakes happen. An ability to articulate what will happen, what has happened, and what can be done saves everyone time and just as importantly saves on everyone’s stress account. Remember communication is not only about the words that are said, it is also about the timing and the manner in which they are said.

Communication skills show up early in building a relationship. You certainly have to set up a time to meet. You can recognize when a client abuses a medium. 6 three word emails to schedule a lunch likely means there will be waste when launching a new marketing campaign.

Are they a nice person? You would think that in a rational business the ability of someone to extend empathy to humanity is not important. It is. Humans are not only rational, they are also emotional. This means energy and effort are consumed when emotional experiences are encountered. An email that is egotistically crafted likely causes a mental pause for the recipient that is far longer than the thought required to step down off the pedestal. Mean people cost a business a lot of time and also tax the emotional accounts of others who have to work with them. Besides do you really want your day to be spent with people you do not like.

It takes time for underlying colors of a client to come out. However small interactions say a lot about the character of someone. Thank you is very cheap to say but incredibly costly to forget. Recognizing the dignity in all humans does or does not happen as someone walks down the street. If lunch focuses entirely on the work and life of your table opposite, what might a meeting talking about the collaborative project look like?

Being selective of your customers early on in building your business will serve your accounts well. Saying no to people that will cost your business more than what they bring in will grow your receivables faster than your payables. This is true for your money, your time, and your emotional well being. And all of them will need to grow if you are going to build a flourishing business that you love.

Tracking Resources: Time

I am getting organized. I decided to start tracking my time in 2017. If time is my most valuable resource it is surely important to understand where it is going. It will also be incredibly helpful for determining the value of what I am doing.

In a year of tracking time there have been a few things that gave me pause.

First: There are plenty of hours in a day.

I am only allowing myself to track productive hours and I am being honest about the actual time spent. It is very difficult to exceed 7 hours of meaningful work in a day yet. (This is billable or truly productive hours) I may be too strict with my definition or I may be unrealistic in time spent but I think there is more I could be doing on a daily basis. I need to keep working on completing my three most important tasks everyday. (This will be a future post about priorities.)

Second: Productivity is not always billable, should it be?

In 2017 I had limited hours that are truly billable. I have had even sparser hours that I will recover what I think my billable rate should be. So what is the deal with those hours? I still consider them productive as they are leading to a meaningful payoff in the future.

This is particularly true when it comes to sales. My work in 2016 at a tech startup doing business development further heighten my understand of how relationship is what drives sales. If people do not trust you, what you say is possible is irrelevant. The personal relationship is often what determines trust. There are certainly ways to improve the pace of building trust and I need to focus on that in 2018. I need to be attentive to tracking my “time to close” along with my “closing ratio”, knowing both will help my sales cycle.

The other area I understand as productive but not necessarily paying is infrastructure building or rather working on the operations side of business. I am presently not paid to manage my finances, nor am I paid to develop a time tracking system. However, my work on those operational aspects will pay in the future. I assume efficiency will result which enables me to invest more time in billable hours. I also assume that analysis of these hours relative to my billable hours will determine when it is appropriate to hire staff and what amount of payment they should receive for their work.

Third: Tracking time allows for transparency with clients

Having a record of my time will assist in defining value for clients. As someone who has not tracked time in the past I can attest to how oblivious I am to how long things take.  This is particularly true early on in my own career. I thought a city wide mural project with my skill set and access to resources would take a year, it took five! Unfortunately, I only paid myself for part time work for a year. Yikes! Needless to say folks who do not track their time do not know the real value of their time, nor the value of others.

Fourth: Tracking time allows for better definition of expectations.

Heighten awareness of any data about past events allows for better hypothesies about future events. Knowing how long things take me will enable me to more accurately define my own value in the market place. If I am slower to do something is there more value delivered elsewhere? If I am more efficient does my price reflect that?

Resource tracking is vital to successful business. And although an unseen resource, time is the most valuable resource to a service business. Just as I account for money, it is time to start understanding my time.

A side note on “hustling”

I cringe when someone refers to spending their time “hustling”. For a while I had an aversion to people who describe themselves as overly busy. They are one in the same thing. Hustling and busy are the result of a lack of plan and awareness of what is truly productive. I find when I am “busy” I am working on many things because I do not know what I  want. I have not decided what my goals are and without a destination I am trying to get everywhere, which is physically, emotionally, and relationally not possible. It is not human to be able to do it all, it is just arrogance to even try!

Performance Mindset

I have always been an active person. I grew up playing team sports both organized in public gyms and impromptu scrimmages in neighborhood yards. I ran cross country in high school and eventually retired from sport when I went to college. While studying to be a grown up, I came out of retirement when I was wooed into mountain biking. After a baptism at my first stream crossing, Saturday bike rides in the woods and on the roads became ritual. For 15 years my fitness had been maintained exclusively outside.

Stepping back into a gym changed my body but also enhanced perspective on success beyond the facilities doors.

In 2015, I entered a gym for my first indoor workout since freshman year of college. I bought a Groupon for Yoga. My friend Brandon, requested my support for his effort to get chest-baring-ready for a professional dance performance. Yoga captured my being. I enjoyed the physicality of the sessions, and found enlightenment in the practice. I dreamed about my mat and watched my body change. It was going great until our sessions were up.

Brandon still had 3 months to curtain and wanted to continue the path to professional form. He suggested we buy another Groupon, this time for Crossfit. Yoga had been great, so why not?

I entered my first crossfit gym for a 6:30 PM work out of the day (wod) on a cold February night. Intimidating is an understatement. The space was sparse with tortuous looking apparaty around the walls. The previous class was wrapping up and their strained looks showed desperation for seconds to pass and more than hinted at what was to come for me. The specimens of humanity present in the gym were lessons in platonic human-body form. I am not fat, but I certainly did not have ripples in those places. Music was blaring to pump up the athletes and likely to drown out the grunts of agony. The gym owns the title of “box” as inevitably a box is the only place you could imagine physical duress to take place.

Inside this box, there is much to learn from a mindset of daily performance.

The typical session for crossfit starts with a coach describing the routine you will endure during the next hour. The coach walks you through the technique and the strategy you will need for the performance. A coach shows the most appropriate positioning for a movement and suggests the most efficient tactic for completing the task at hand. Too much reliance on oneself in crossfit might lead to injury and likely will elongate the agony you must endure to finish.

During the chalkboard dialog, and in the midst of warming up the body and mind, the coach will note who is in attendance. It is important to document when we have done work and what we have done. In some crossfit gyms it is merely a name on the board, but technology is also used to preserve the information for greater analysis. Without documentaiton, the we cheat ourselves of both knowing our victories and understanding our weaknesses.

Once attendance has been taken, the plan has been made for the work out, and the technique tweaked through several rounds of building the motion or the volume of weight… the performance begins. The surroundings fade. There is little energy given to the cognitive efforts beyond the physical task at hand. It is hard to discern even what the blaring music is in the background, let alone what my colleague five feet away from me is doing. Is she ahead of me? And is that guy really doing more weight than I am? Those questions are not able to cross your mind. The challenge of the work, and the desire to excel at it, requires utmost focus on what matters, finishing. To complete the task you must do every rep yet only be thinking about the next movement required to conquer the beastly workout.

When the clock stops or the last round is retired, there is a chorus of euphoria. You hear the music of the room again. Your body is singing to the beat of your racing heart and tingling with the natural high of hard exertion. Your mind is back to a harmonious state thinking about the sense of accomplishment. You are rewarded for stepping up and performing!

The wonder of crossfit is not over when the timer chimes. You still need to report on your work. Either publically or in private, you record your score. The documentation allows for consideration of your position, certainly by you, likely by your coach and if you really want to grow, by your peers. You have a mark to compare either to the past or to the future with yourself, and even with others. You have an opportunity to improve and consider what might lead to different results. Performance is not complete without evaluation.

Crossfit highlights the value of approaching everyday as a performance.

First and foremost, peak performance requires guides. There are people who have gone before you that can provide insight on optimum execution. They can refine your skills and expand your thinking. Their understanding of rudiments of life, business and recreation are what you can build your practice upon to achieve and exceed beyond your goals.

Peak performance requires preparation. The warm up is key to success. Anticipating the feel of an experience and tweeking the small things when the clock is not held against us allows the mind and body to do exactly what it needs to when it matters.

Peak performance requires focus. Circumstances change and are hard to predict, we have to be able to complete the task at hand regardless, and to do so requires that we focus on every step along the way.. We will certainly miss the minor but meaningful shortcuts if our frame of reference is wrong, and we will likely miss the mark if we do not keep it in sight.

Peak performance has destinations that you can celebrate. Smart goals, or knowing the intent of the performance, gives you something to pause and stand in wonder at your abilities. They are natural points for rest, reward and conjuring up the next idea.

Peak performance is achieved through analysis. It is hard to know if you have reached the peak if there is no marker. It is also hard to know where you are at in relation to the destination if there is no accounting. Documenting our work allows for constant reflection which leads to adjustments that lead to meaningful change. Knowing where you are at and asking questions about the position and how you got there, is the means by which we will conquer new territory.

What do you need?

During the pitch practice of a recent coaching session I asked my client “What do you need?” Although it is rare for anyone to come out and ask the question in this form, this is the point of a pitch, to address the resources we need in order to get to where we want to be.

Pitch practice is a part of every coaching session. I refrain from using “What do you need?” as a prompt until about the fifth session. At this point the client is comfortable, or at least starting to get comfortable, talking about them self. Rarely when I put this out as the initiator of our conversation is there a prompt and concise response. It is challenging for most to articulate what is needed to get where they desire to be. I think there are two reasons for the awkward pause.

First, we struggle to know where we want to go. If we do not know what our destination is, how will we know what we need to get there. For instance, I enjoy traveling. It is easy to imagine that my goal in life is “to travel frequently”. I think this is admirable, but it is hard to know what I should ask of others if I have no specificity in my destination. What I will need to stroll the boulevards of Paris is starkly different from what is required to bushwhack through the rainforest of Costa Rica. The means to get there, the knowledge once I am there, and the tools/resources I should have on hand vary incredibly between the two.

A desire to “succeed” in business is admirable but fails to define a real destination. There are many details lacking in this type of goal. Even the more specific goal of finding funding for business is lacking. Are you looking for equity, debt, or gifts? Intimately knowing the destination we are trying to get to will drastically improve our understanding of what to ask of others to help us get there. It will accelerate our flight to the beach.

Second, we struggle to ask for help. Ego often goes hand in hand with creative and entrepreneurial practice. Ego certainly is needed when an artist dances naked in the street or an entrepreneur assumes $700,000 in debt. Your psyche needs to be strong to endure that type of risk. However, rare is the person who can change the world on their own, or for that matter even their own life. We lack all the skills that are required to achieve our fullest potential. We weren’t born with the knowledge and even if our genes are perfect, we still need mentors to show us how to use them. It is a fallacy to think that we will never need help. The sooner we learn to ask for it, the faster we will achieve our goals.

How do we get to a point where we can put out into the world effectively what we need?

Reflection and humility.

We need to afford ourselves the mental space to comprehend our destination. It needs to be specific and timely. It is harder to hit the west coast at some future date then San Francisco by the end of October. We need to give ourselves permission to recognize we need help AND that it is okay to seek it out. Frequently, the biggest obstacle in life is our self, and many times it takes someone else to move us.

Are you ready to stroll the streets of Paris, hike the trails of Monte Verde, land the next big paying gig….  if you know where you want to go JUST ASK.

When motivation doesn’t strike…

In a recent coaching session the client was describing the awareness of what to do and the time to do it but lacking the motivation. This is where just do it or take the next step or leap comes into play. We get stuck in our head and no additional amount of thinking will get us out. This is the chasm that everyone comes to but few can cross.

What makes one successful is  letting the rubber meet the road. We have to write, we have to paint, we have to sing, we have to define our audience, we have to reach out, we have to do the work. But how?

Rote discipline is all I can think of.

We need to do things when the right thinking is on our side so that when motivation is fleeting, which it will be at times, we are ready to act. We need momentum to bust through the thick malaise of self doubt, worry and all the nasty emotions that stifle creativity and action. We need to be in motion when we can.

We have to get in the habit of getting off of our couch. We  have to fall in love with the daily experience of doing, so much, so that when the motivation is not there, we still do. You can not force love, this might be true, but if there is not an inclination of love for the work that will get you to where want to be, there is probably good reason to pause and ask, is that really where I want to go.

Do you keep a schedule? What might happen if you put “training” for your career on your schedule? Might you put time on the calendar for studio work? Might you put time on the calendar to dig deep into new ideas? Might you put time on your calendar to work on the business?

Ironically, the more you schedule your time, the more likely you are to find freedom!

PS If you are in a pit without the umph to climb, do the small things you can. Take a breath, reflect, envision.. anything that might help you find just the next hold. 

Practicing Practice

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Mel Brookes’ The Producers is what got me into a yoga studio for the first time. The story line really had nothing to do with the venture, but my friend Brandon’s casting as part of the ensemble did. He asked if I might join him on his adventure to professional “form” by purchasing a Groupon for 10 Yoga sessions. Thus began my journey to practicing a better me.

The decision was rather unexpected. It had been nearly 15 years since I worked out inside. Do not get me wrong, I love fitness. I had spent many weekends and probably too many weekdays riding through the woods of Patapsco State Park and navigating the roads of Baltimore County on two wheels. Why spend time inside suffering when you can do so while exploring majestic vistas?

Little did I know the new ground I discover on a stationary mat.

Yoga takes place in a studio. I always found this peculiar and my reservations were only exacerbated by the overly pleasant feeling of M power’s space in east Baltimore. The renovated building was thoughtfully appointed with muted tones, exposed brick, hardwood, and mild lighting. There was even a mural that exuded a sense of calm while reaching. The space was not one that I thought conducive to my understanding of physical growth.

Yoga has teachers. I knew the stereotypes of the smooth, soft and near tantric voice of a Yogi when I started my pursuit of wellness. Nearly all of my teachers have fit that vision with pleasant demeanor and kind spirits. Early on I did not appreciate the role. Developing endurance, muscle, and refining motion did not in my mind match calm, collective and gentle invitations. I thought my guide to strength would need to be the essence of brute and judgement.

Yoga relies on being still. I had knowledge of the poses prior to my engagement with Brandon. And I have now done many crow stands, lizards, cobra’s and a zoo worth of other positions in my training. How could the body benefit from stacis? And why would any athletic endeavour start by finding your breath and setting an intention? Did we need weights? Should we be running to get our heart rate up? I thought athleticism was defined by mobility, agility, and speed.

Yoga is a practice!

  • The space is called a studio because it is where you go to refine your craft. There is no audience, it is all about you and your work. As such that space needs to inspire and provide freedom of mind to explore what is possible.
  • It is lead by teachers. Learning is about enabling the student to try. We only try when we know we are safe and judgement does not impinge. A great yogi is one who reveals the guide that resides within the student.
  • There is great strength in stillness. No wisdom is required to build a system that can be toppled. It takes fortitude to create something that will endure. The static structures of the universe endure the test of time.
  • Our breath is a reminder of our humanity, our starting point. It is a fundamental principle that we can acknowledge and utilize as a compass. We must quiet our being to find the most important things in life.
  • A journey without a destination is a challenge. Setting a goal is the first small step towards prolific achievement.

My practice of yoga has been incredible for my whole being. I am more flexible. I am stronger. I am more open. Most importantly the spirit of the experience has allowed me to reach more. I try things personally and professional I would not have done so prior. I am practicing more and performing far better in all facets of my life. Practicing practice changes our life by changing our future selves.

Two Thoughts on Discipline: small choices, big outcomes

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About three weeks ago I purchased an alarm clock. The reason for purchasing such a mundane everyday object was discipline. I prefer to wake up naturally and for the most part I do, but it is helpful to have something mildly surprising to elicit a push of chemicals through your body to get it started. Prior to purchasing the alarm I had been utilizing my phone for “waking up purposes”, thus my phone was by my bed at night. In reality this put most of my work in my bedroom as well. Several times in recent months I found myself looking at my phone right prior to signing off for the night. This is a mistake on several fronts. The blue screen of backlit gadgets stimulates the mind and does little to perpetuate a sleepy disposition. Those waves alone jolt the senses. The second reason it is a mistake has to do with content. The mind can not shut down for rest if it is processing information. This becomes doubly true when the information elicits an emotional response in tandem with the logical engagement. I bought an alarm clock not so I could wake up but so that I could sleep.

Another discipline that has been helpful for me lately is the lack of access to social media on my phone. About a year ago we were hosting a group of college gentlemen. It is hard to believe but that age group is now nearly an entire generation younger than I am. In the midst of their stay they noted the phone that I was using. They expressed a keen interest because it was a relic, and likely the first gadget they coveted in their youth. Anyway, all this to say my phone is old. As such, it has ailments and earlier this summer it did a hard reset. It was life changing, as in everything on the phone was lost. This was an interest space to be in. It was kind of like a forest fire cleaning out debris and making room for new life.

Yes I lost contact information but the contacts that matter have been easy to return into my phone. Interestingly enough losing the apps on the device has been a bigger deal, and frankly a more important change for me. After a brief period of mourning and coming to terms with the loss, I set about to make the phone useful. If I could recall an app I was using I put it back on the phone. That was easy, and a great first step for cleaning. It also became apparent which apps were there with my best interest in mind. Namely, if I could recall the password to get in to the app it meant one of two things: I used the app consistently enough to know my credentials for use AND the company that created the app wanted to make sure I was sentient and aware of my use of the app. Interestingly enough one of the apps I did not know the password to was Instagram.

At the point of the reset it was nearly without fail that my day started by flicking through the photo albums of other people’s lives and it ended with the same voyeuristic act. Instagram is ingenious. It’s easy and provides a strange system of ethereal rewards. The loss of the app on my phone gave me a moment to consider what it is and what I was doing with it. I could ask myself is it a tool or am I a tool. Was I really getting content that enriched my life? Was I using it to connect to people? Was it valuable for me?

It is strange to say but the loss of instagram helped me become more informed. I discovered time to dig into matters I really cared about instead of swiping up. I found emotional energy to invest in things that matter more to me instead of coveting what I did not have. The fire hurt, but once it was quenched I see new blossoms rising.

Turning Pro

There is a distinct feeling that comes when it happens. You will be different. This is strange because it has been small things that have lead up to the leap.

The best I can describe it is how I feel just about every morning when I head to the crossfit gym. The coaches post our workouts the night before, however I do not look at them. I just do not want to know. It is hard enough to roll out of bed pre-dawn, it would only be worse if I had some inclination of beating my body was about to take.

There is always a tinge of fear.

I am over two years into the experience of crossfit, yet every day the anxiety is real. I know what I am about to do will change me. I desire the change, yet the mind makes it hard to pursue the work.

So then I wonder what is it that keeps me going?

The gym is the place where I know I have agency. I decide to wake up early. I decide to embrace the weather during the walk. I decide to enter the sweatbox in the summer. I decide to look at the looming pain prescription on the board. I decide to warm up my body. I decide to work through the strain. I decide how far i will push my body. I decide how great I will be. I decide my future.

The same thing happens in our careers.

Turning Pro is deciding what you will do instead of letting anyone or anything decide for you.

Turning Pro is YOU finding agency over YOUR vocation!

Taking the Next Step

I have been saying that a lot to folks lately. It is time for my own.


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Excellence: the quality of being outstanding or extremely good

This past weekend Jenn and I traveled to Asbury Park New Jersey. The Jersey shore was felt but not truly experienced which makes for great, yet pleasant, people watching. My quick note on Asbury Park, they are doing boutiques right. What separates a boutique from a small shop is awareness of audience. You can carry highly curated and high margin goods but you have to be aware of your niche market. The beauty of Asbury is the easy vacation destination of a monied population with Brooklyn style, and the shop owners know it!

Beach trips are about reading in the sun whilst smelling tanning lotion and absorbing the beyond time notion of the ocean. You have to work to not be contemplative. I was prepared to spend my time exploring the images of Christ through History and the initial espousers of existential philosophy. Instead I got worked out by crossfit. No, I did not do WOD after WOD but rather discovered Ben Bergeron’s (he is the smiley man atop this post) book Chasing Excellence.  (Thanks to Jamie Gasiorowski co-flaneurer, and my Beatrice of Crossfit)

The book was meh on writing, but the content was on point. It left me questioning myself and my processes. Of course I wish I was in the running for fittest human on the planet; but my age, and likely my genetics, will hinder that pursuit. I found myself exploring excellence in my work. 

What does it mean to be an excellent agent?

As I am reading a coach talk about making excellent athletes, I realize my role as an agent is to make excellent artists. To be an excellent agent is to excel at making excellent artists.

So what makes an artists excellent?

That is a big question!

There is a lot of debate about what art is, so to define what makes an excellent artist is yet another level. As an agent, my definition of art and therefore an artist is what I hang my shingle on, and what will seperate me from others in the field.

In my mind (and as of today) to be an excellent artists is several fold:

Mastery of a medium

Unending supply of ideas

Ability to communicate in words

There is likely universal acceptance that mastery of a medium is part of the definition of an excellent artist. For even the non-art-scholar their is respect and appreciation for the ability to do things with a medium that others cannot. The technical prowess and the craftsmanship of an artist is likely what first separates them from the mere mortals of communication. An artist can make a canvas say things that other people are unable to make the blank page say. The ability to manipulate a medium is also important because it allows ideas to be put into action.

But where do the ideas come from?

When we speak of creativity, we are talking about the appearance of ideas out of seemingly nowhere. Observations, connections and unexpected mash ups are the essence that puts art beyond the category of craftsmanship. An excellent artist can readily chat you up on concrete scientific knowledge or delve into the current political state of society or certainly explore the cultural phenomenon dejur. Artists are not only aware but have given thought to the world.

There are geniuses out there who have mastery of a medium and a never ending supply of ideas that can whip reality into alignment by the mere act of bringing something into existence that did not exist before. However genius is hard to come by, just as the perfectly proportioned body for ultra fitness is elusive to the majority. What most artist also require to be excellent is an ability to communicate through words. Yes, they must master a second medium. An artist certainly does not have to, nor should they, define the meaning of their work, but they must be able to provide the context of the matter for it to transcend from object to subject. An excellent artist must be articulate either in spoken word, or written, to enable ALL audiences to find meaning in their work.

Now, if only I had a concept for a gym to equip an artist to work on the traits of excellence.

Writing a social enterprise business plan.

The Johns Hopkins University center for leadership education has hosted a business plan competition for the past 13 years. In 2011, they expanded to include Social Enterprises. I was asked if I might serve as a judge for this new field. Envisioning Apprentice and Shark Tank, of course I obliged. It wasn’t until I gained access to eight 25 page plans that I realized this was not an hour long reality show. In the spirit of doing things right, I spent hours with each plan considering how to heighten the prospects of 8 businesses and 20 odd entrepreneurs. It was an enriching experience.

Despite knowing the work load I offered to judge again this year. Based on my first judging experience and another year of operating my own social enterprise I had much better grasp of what it means to utilize entrepreneurial concepts to create social change. In particular, I understood that an effective social business will create BOTH financial value and social value. The key to the plan is to demonstrate both. A plan that shows that the business is sustainable economically and defines and measures impact is well on its way to changing the world. Unfortunately the later, defining and measuring impact, is exceptionally hard. (Future blog posts will explore this)

In the process of judging plans I took notes. I noted similar things about most of the plans. After reading all the plans I compiled a document exploring common missteps. Below is what I shared with all of the groups.

Social Enterprise:

Social enterprises serve two purposes: impact on society and economic sustainability/profit. Both purposes should be presented in the business plan and emphasis should likely be placed on the economics. However, the plan should clearly define the social impact that is being created and how it will be measured.

The Executive Summary:

The summary should be a summary. The summary’s purpose is to quickly compel a reader to go further. It should certainly define the product/service, the market, the position in the market, the potential (change and profit), and most importantly the ASK.

Product/Service

An entity must know what business it is in. What value is it providing? As a social enterprise this is clearly defining the social change and the product/service that the entity will sell to achieve that social change. It is important to differentiate between a “user” someone the entity may be serving and adding value to and a “customer”, someone who will pay the entity for the value added.

A side consideration on product and value: If the business is producing technology, IP is very important. The world is changing with regards to protectionist standards on IP (google-economy, free-economy) Are there ideas on how else to extract value from the product/service? Google provides its amazing service for free to end users. How do they make money? Could these concepts work in other businesses?

The Market:

The markets of a social business includes all entities or individuals who could receive value from the product or service. The most important market to explore in a business plan is the market that will be paying for the value provided. Market research should be focused. Just because the entity sells a product on-line does not mean that the market is the entirety of on-line retail. If the entity sells baby products the market is likely mothers. Make the research meaningful by pinpointing exactly who the entity is providing value to. If the market is undetermined, spend more time thinking about the value provided. Social enterprises likely have several markets to consider.

Competition

The purpose of industry analysis is to know the competition. Every business has competition. If there is no competition and the business is as great as the plan is stating, it will not be long before there is direct competition. Which entities are most likely to become competition?

To know the competition is to know what they do, and how they are different. Principles are a great starting point. Mission is another place to look, and then look at strategy. Know numbers about them. How big physically, on paper, and in the minds of consumers?

Think about whether they are competition or are they entities to collaborate with in business. In 2012 it is easy to find and foster partners. This can be an invaluable strategy for business. Who is nominally doing what the entity proposes but not quite? Could the entities work together, instead of against one another? Building a business with a partner in mind could also be a GREAT exit strategy.

Strategic partnerships can be meaningful competitive advantages. However, in order for it to be an advantage it needs to exist and it must be somewhat exclusive. If a business relies too heavily on a strategic partnership it may be cause for concern because what happens to the business if the relationship alters. It is also important that the relationship be defined. There should be a contract. The contract should define the relationship and some level of exclusivity if the partnership is to be a true advantage.

Type of Business Entity:

It is easy to assume that a Social Enterprise should be a non-profit or a Benefit Corporation (a recently developed business structure in MD). If this model is chosen clearly state why. Any type of entity can do social good.

Non-profits have advantage’s but there are disadvantages as well. In particular non-profits are not known for garnering outside investors. Furthermore, most of the money “invested” into non-profits comes with strings attached.

The benefit corporation is a new and unique entity in Maryland (and several other states). The model protects leaders (board and executive staff) from legal proceedings if decisions are made that support the mission at the expense of stock holder value. The model is great for making the social statement that accountability is beyond the traditional bottom line. However, the model has additional requirements of accountability. In particular it must prove that it is achieving the social good of its mission statement. Furthermore, the model has not been tested in court.

A B-corp is NOT a business entity. It is a certification similar to LEEDs. It verifies that businesses are considering multiple bottom lines (planet-people-profit) It is a third party audit of social benefit, not a legal tax entity.

If you are interested in other unique business models I suggest you check out the L3C entity in Vermont.

The Team:

The reason to announce the team is not to give the authors and founders recognition. Use the space to clearly define roles and why each person is qualified to be in a specific role. Undefined roles leads to organizational confusion, and the wrong person filling a job is cause for concern.

The team must demonstrate a mastery of the product or service provided. If murals are the product and the team is without an artist, it brings into serious question whether the entity can produce the product. Do not underestimate the significance of roles either. Community organizing is as much a skill as ruby on rails developing.

Business in 2012 requires more then analytical minds. The team should highlight general business skills (negotiation, selling, marketing, legal) and consider the softer skills (creativity, communication, and organizing) of the entire team. Demonstrate that the whole brain (not just the left side) will be working on the business. If skills are lacking they should be accounted for either in advisory positions, or with a strategy to obtain them.

A side note on resumes: include numbers to show work rather than stating it.

Marketing Strategy:

Marketing is all about stories. An entity must know the stories of its customers/users, its own story, and know how to get its customers/users to connect with its story. Marketing is a VERY important part of business. If people do not know about the entity, they will not purchase the product. For example the web is a huge place and just because a site is up does not guarantee that people will use it or even find it. Marketing budgets are easy to under estimate. Seriously consider how to understand customers stories, entity stories and sharing both.

Financials:

This is a great place to go further on the ASK. Define how much and what kind of money is sought. A grant, contribution or gift with no expect return payment. A loan/debt with scheduled repayment and interest. Equity, an offering of ownership. If it is a grant, know what the expectation for its use is. If offering a loan/debt, the payments need to be accounted for in the financials. If it is equity, demonstrate the expected return on investment and exit opportunity. A time line of need is also helpful, and may make the investment easier for an investor. Yes it is helpful to have it all up front, but if it will not be used up front the investor has lost the time value on that money.

If making forecasts, which must be done in complete financials, assumptions will be made. Clearly state the assumptions and why they are reasonable. It is better to be conservative on revenue, and liberal on expenses. Make sure that the expenses cover the entire spectrum of what the entity is doing, and know that marketing is apart of EVERY business.

It is important to pay ALL staff including founders. It might seem reasonable to forgo pay but paying people does several things. It says that this is a job and has a sense of professionalism. It also provides an opportunity to hold someone accountable. It is fair to expect that staff will deliver value if something of value is being provided to them. If you are smart and have value, investors will have no problem sustaining you! Not paying yourself or other important players is a non-sustainable model.