Planning mistakes - part 1

[peterjhale]

I'm going to add a feature over the next few weeks looking at common business planning mistakes - and how to avoid them.

Here are your first two:


Cash is king



When planning your business you should always, always concentrate on your cash flow.

Businesses fail when they run out of cash (for whatever the reason).

Many profitable businesses fail because they run out of cash So pay special attention to your cash flow forecast. Ensure you get people to pay their invoices on time and calculate how much of a loan you may need - before you need it


Over optimistic sales projections



Yes, sales always start slowly - but they don't then balloon upwards after a month or so. Be very realistic in your sales projections. If you're starting a new business, remember that no one will have heard of you and it's going to take time to get established. It's unlikely you'll make the sales you desire unless your marketing and customer satisfaction is 100%

[carolb]

yes - the cash thing is the end result - if companies don't focus they lose their way and have no sales

[peterjhale]

that's true - cash is the end result of good focus and sales.


I think selling is the hardest part in running a business - what do others think ?

[james]

Selling - yep - real difficult (the close of sale part)

I think marketing is key to everyone's business and the customer is the heart of this.

Sales - well

[carolb]

I hate selling - closing the sale is real difficult

Thanks goodness for the internet - it's easier if you know how

[Marvin]

Its really easy to over-estimate the sales pipeline - especially as you want the answer to be higher than it really is. So you delude yourself a little, and that can be extremely dangerous because you won't have the revenue you're expecting which brings you back to the cash is king point.

Good points, both of them.


Marvin

[Cougar]

Originally Posted by peterjhale

It's unlikely you'll make the sales you desire unless your marketing ...[and customer satisfaction] .... is 100%

Completely agree here.

The challenge is working out what "100%" means! My challenge 14 months ago was not knowing what marketing would work and what would not. I am getting better at this but have not really fully cracked it yet.

I bought a book 12 months ago .....it was called something like "How to win all the business you can handle". There are over 120 tools in this book but a lot of them don't/won't work for me.

Determining how to market is everything to do with understanding the market for what you sell and how your customers buy .... and this will be different for every different type of business.

To go back to the book title, I will win all the business I can handle when I crack the "how to market" bit - then my marketing will be Peter's "100%".

[peterjhale]

the thing about marketing is to go back to the original definition

"to identify and satisfy customer needs"

Notice I didn't use the word marketing, communications or market size in this

CUSTOMER

Think about exactly what this customer looks like that is going to buy your service

eg: male/ female - age - location - business ownership stage - turnover

etc etc

Then you can really split these down so you know who you want to buy your products (which we assume here these people want)

Then you need to work out how to communicate to them -- and there are many ways

eg: scatter gun - press release
eg: targeted - speak at a conference these people will be at