All posts by Dan Boudreau

Dan Boudreau has devoted the last 20 years to coaching and mentoring regular folks into the captivating world of business. He authors and facilitates lively, transformative workshops on the topics of entrepreneurship, business planning, and training for trainers. He has inspired thousands of entrepreneurs to become successful business owners and leaders. Launching into his first venture in 1980 with barely enough knowledge to fill the back of a beer cap, he has embraced (and survived) the wide spectrum of business ownership, from single owner home-based enterprises to ventures employing more than 300 workers. Dan's top mission essentials are: laughing, loving, and learning. Armed with the business planning process as a teaching tool, Dan empowers ordinary women and men to create the financial stability and lifestyle they dream of. He is most proud of being acknowledged and appreciated by peers and friends for his ability to bring entrepreneurial ideas to fruition with a nod towards his warm, engaging personable style. In 2006, Dan compiled his knowledge (and bruises) into his first book, Business Plan or BUST! In writing this book, he combined his practical experience as a business owner with his expertise as a lender for an economic development agency, and tossed in his unique brand of wit. The end result: A refreshing perspective and practical style that makes the time-worn topic of business planning easy, fast and fun! When Dan takes those occasional days off from navigating the business world you might find him stuffed into a floating toothpaste tube sometimes referred to as a kayak (rarely right side up), or perhaps coaxing disturbing sounds from his guitar. His ultimate relaxation always involves fresh air, clean water and beaches—from botched attempts to outsmart fish in the rivers of northern British Columbia to flopping around in the waves or practicing applied inertia on just about any tropical sandy beach…
Business Killers

How Debt Can Become a Small Business Nightmare

Leave a comment

It starts out innocently enough, usually with a small loan or a couple trade accounts, but by the time the bailiff puts a lock on the door, the amount of debt has become one of the nails in the failing business’ coffin. Here’s how easily it can happen.

Imagine that you’re starting a venture with limited funds and eager to get the doors open and succeed.

A startling number of new businesses fail in the first five years. Lenders know new business is risky, and manage their loan portfolios accordingly. However, with the right security, such as equity in the family residence or a willing co-signer or guarantor, it’s entirely feasible to nail down a start-up loan for a risk-laden small enterprise.

So, congratulations are in order; you’ve got the loan and started your business. Let’s say the borrowed funds pay for leasehold improvements and enough operating money to see you through the start-up period.

Life is good, but you still need supplies. In the early days of business, suppliers can be an uncooperative lot—nobody wants to extend credit until they develop a relationship with you. So, following “Supplier Development Rules Of The Road”, you proceed to build relationships and apply to establish a couple trade accounts with enough headroom to enable you to order a month’s supply, as long as you pay within 30 days.

Because the business isn’t yet churning out enough margin to provide you with a paycheque, you might find yourself nicking the corporate credit card to buy a few groceries. Every new business owner knows this is evil, but most do it anyway. After all, you’ve got to eat. You intend to pay the card to zero at the end of each month, but as you bang it up with personal knick knacks, and the money just isn’t there to pay it down, the carryover gets higher each month.

You discover that you need a couple more trade accounts and use your newly-honed skills to set up a few more accounts. In the meantime, your responses to pre-approved credit card marketing campaigns procure you a couple more credit cards.

With trade accounts and other random sources of debt like credit cards, the trap is that none of them know what the others are up to, they rely on your diligence and integrity, and also hedge their bets on their expertise at extracting payment from you like bad teeth, regardless of how you’re managing your other debts. So, by cherry picking and presenting a small part of your financial picture to the disparate players, it’s entirely possible for a clever operator to outsmart the entire bunch, including yourself, and tilt the financial chariot so far off centre that you wake up one day with no hope of ever getting your business back into the black, and no possibility of ever repaying the amount you owe.

All it takes from there is a small disaster to tilt the financial house of cards into pandemonium. Perhaps one morning as you’re about to head off to work, your aging vehicle coughs and refuses to take you anywhere. A flurry of repairs and a yelling match later, you owe a mechanic $900, and the corporate credit card takes yet another hit.

That’s how debt can destroy a business. Credit can be evil. Just because you can borrow, doesn’t mean you should. Treat debt with respect.

Market Research, Starting a Business

Competitive Intelligence Not Espionage

Leave a comment

detective

Business start-ups tend to stumble when it comes to gathering information on their competitors. And yet, going into business without having a thumb on the pulse of your industry is a sure way to go broke.

When planning a business, and particularly when it comes to researching competitors, people stress about what’s right or wrong, and often feel they are spying. In business planning workshops, learners ask about the ethics of snooping and whether it’s right to sneak into a competitor’s shop posing as a customer.

Here are a few methods to get you past the initial feelings of espionage and nefariousness, and on to non-intrusive learning about the industry you’re getting into.

1. You can find articles on competitor’s businesses by searching on the Internet. Just plug in your questions and topics and follow your nose.

2. Gather information from competitor’s websites, catalogues and other marketing materials. Whether via the Internet or through offline marketing, your competitors must communicate their offerings to potential customers. And yes, it’s ok to review competitor’s materials; they’ll certainly be pouring over your brochures and flyers once they’re published.

3. You can source information on competitors through Trade Associations and Trade Publications. Just search the Internet for “trade associations” or “trade publications” for your region and your business. In just moments you can narrow your search to a few possibilities for which you can visit websites to learn more. As an association member or publication subscriber, you will be kept up-to-date on industry and business trends and developments.

4. In the process of doing market surveys, you are sure to find yourself interviewing some of your competitor’s customers. A few well-crafted questions will enable you to compare your goods and services with the competition, things such as pricing, packaging, office hours, servicing and guarantees. If you’re uncomfortable doing the surveys yourself, it will cost more, but you can also opt to hire an agency or individual to do them for you.

5. The above methods will fill your folders with heaps of information, but if you do all that and still hunger for more information, there’s nothing wrong with asking a competitor out for a coffee and picking his or her brain yourself. Just be sure to go prepared to share your own information, as the person you’re querying will probably have a few questions to ask of you as well.

In researching your competitors, it’s important to keep in mind that the focus is less about the person, more about the products and services and providing the best deal for your customers.

Just because you’re competing doesn’t mean you are enemies. Most newbies are pleasantly surprised, once they get out and mingle a bit, to learn that their competitors aren’t as scary as imagined. Once you get past the adversarial image, you might find some competitors to be like-minded, interesting people, entrepreneurs just like you. Rather than awakening slumbering trolls, you are far more likely to find yourself learning like crazy, discovering opportunities to collaborate on larger projects, and even making a few friends.

Writing a Business Plan

More Writing Tips for the Wide-Eyed Business Planner

Leave a comment

Business Plan Writing TipsLast week I gave you 10 writing tips to keep in mind while writing your business plan.  Here are 10 more tips for the wide-eyed business planner.

Remember, when you are ready to sit down and write, just do it. Choose a method that works for you and a time when you will be left alone without distractions.

With any text element of your business plan, the first step is to write your rough draft, concentrating on your ideas and all the information you need to include. Don’t worry about grammar and spelling or any form of editing in the rough draft, you can polish and refine during the revision process. This first draft is not the place to be concerned with perfection.

Read the following list of suggestions prior to writing your business plan. You might also consider copying this list and hanging it in a visible location wherever you will do your writing.

11. Choose the right words
Avoid double-edged words – words that can carry an undesired connotation. Also vague or pretentious words, coined words and unnecessary intensifiers should be replaced or deleted.

12. Eliminate awkwardness
Awkward writing can make it more difficult for the reader to understand your message. To smooth your writing, keep the sentences uncomplicated and eliminate excess words.

13. Correct all typos and grammar errors
The errors that result from carelessness have a tendency to stand out to a reader and sabotage the reader’s confidence in the writer’s ability. Make sure you scour your document for the obvious embarrassing errors like misspelled words and missing commas. It is wise to have someone proof the plan for you.

14. Create a visual format that is easy to read
Use a mixture of text, tables and bulleted lists. Keep your paragraphs short to break text into smaller bites and make it easier for the reader to read.

15. Use appropriate pictures and diagrams
Use pictures or diagrams only where they compliment or simplify your message. Avoid using eye candy simply to impress your reader, unless your business plan is for a graphics-related business. Overuse of pictures can dilute your message and create the impression that you’re not serious.

16. Include your sources for key information
If you use tables from the local census archives, state the source. If you quote an article from a credible trade magazine, provide the name of the magazine and the article, as well as the date. This helps the reader build credibility and confidence in your research and your business plan.

17. Include important detail in the Appendixes
Whereas it is important to include a brief biography in the body of your business plan, it is more appropriate to house your complete resume in the Appendixes.

18. Refer the reader to related information
For example, at the end of your biography you might state, “See complete resumé in Appendix 6.”

19. Ensure numerical information matches text statements
A common mistake in business plans is to state conflicting information in different sections or elements of the business plan. For example, stating a different sales total in the executive summary than that shown in the financial section. Go through your plan and double check for this kind of discrepancy – before it gets into the hands of your reader.

20. Build a Complete, Cohesive Communication Package
As a business planning coach, I will often write up a list of questions and comments for a business planner. Invariably, the writer of the plan then responds with a list of answers to my questions. Over the duration of the business plan development process, we will sometimes do this half a dozen times or more, resulting in a half-baked business plan and up to four lists of responses filling in the holes. This is the raw material, not the finished product.

A finished business plan is one complete, cohesive communication package, with any important detail attached in the Appendixes for reference. Rather than submitting a half-baked plan with a tangle of disjointed responses to others’ questions, create a full plan with all the information included.

As you create your business plan you should involve others to critique and provide feedback. As the champion of your business plan, take control of this valuable process. Assess all feedback and questions for their value and relevance and then incorporate the useful information into the plan. View questions and feedback as gifts, as opportunities to clarify and strengthen your business plan.

 

Writing a Business Plan

10 Writing Tips for Wide-Eyed Business Planner’s

1 Comment

When you are ready to sit down and write, just do it. Choose a method that works for you and a time when you will be left alone without distractions.

The business plan is arranged into a number of small, manageable writing tasks. The following suggestions apply to any of the many steps that include written outputs as well as to the entire business plan.

With any text element of your business plan, the first step is to write your rough draft, concentrating on your ideas and all the information you need to include. Don’t worry about grammar and spelling or any form of editing in the rough draft, you can polish and refine during the revision process. This first draft is not the place to be concerned with perfection.

Read the following list of suggestions prior to writing your business plan. You might also consider copying this list and hanging it in a visible location wherever you will do your writing.

  1. Write in the third person
    Write about your business and yourself as though they are separate entities. Rather than stating “I / we expect to bring in $24,000 in sales…” you might write “The business will achieve $24,000 in sales.”
  2. Lead your reader from general to specific
    Make it easy for your reader to understand what you wish to communicate. This general to specific suggestion applies to paragraphs, elements, sections.
  3. Be thorough
    You want to make sure that you have included all the necessary information. Check your notes to ensure you have covered all of the important points. Provide answers for obvious questions. Be sure to cover all of the relevant elements of the business plan and the key points indicated in each element. In the Appendices, provide any complex or detailed backup information to support the statements in the body of your business plan.
  4. Maintain accuracy
    Can you back up your statements with facts?  When you quote text or statistics, ensure that you record them accurately. Look for contradictions that may leave your reader wondering. Accuracy is the foundation that enables your reader to build trust in you and your plan; contradictions and inconsistencies are the seeds that grow into doubt.
  5. Be consistent with names and terminology
    To achieve clear meaning in your writing, choose and use your terms carefully.  If you wish to make your writing more interesting by varying your terminology, be sure to provide explanations where it makes sense to do so.
  6. Use an active voice
    Always use the active voice unless there is a good reason to use the passive. Active voice is more direct, more forceful, and often easier for the reader to understand. For example, “The owner will contact the customers” is active voice. “The customers will be contacted by the owner” is passive voice.
  7. Write positively
    Wherever possible, avoid writing negative statements, unless the negative aspect of the statement needs to be emphasized. It is advisable to extol the benefits of your products and services in your business plan but highly distasteful to make negative comments about your competitors.
  8. Minimize jargon
    Jargon is language that fails to communicate because it is full of long or fancy words. Most often jargon takes the form of technical terminology or characteristic idiom of a special activity or group. If you use too many words and expressions unique to your industry or business, you might confuse the reader of your business plan. If you need to use jargon, provide an explanation for your reader.
  9. Be concise
    Make all the words, sentences, and paragraphs count by eliminating unnecessary words and phrases. Avoid repeating the same idea using different wording – this tends to tell the reader you are unsure of what you are trying to say. Be careful to remove every word, phrase, clause or sentence you can without sacrificing clarity.
  10. Avoid clichés
    Clichés are timeworn expressions or ideas, such as “the price is right.” At best, clichés are obviously borrowed phrases that can be confusing to readers from other cultures. They tend to irritate readers when used repeatedly.

Happy business plan writing entrepreneurs! Next week I’ll give you my Writing Tips for Wide-Eyed Business Planners numbers 11-20.