Small Business Month

S M A L L B U S I N E S S M O N T H - S U P P L E M E N T T O T H E W I N N I P E G F R E E P R E S S - T H U R S D A Y , O C T O B E R 1 9 , 2 0 1 7 6 T H E P A T H Y O U T A K E I S J U S T A S I M P O R T A N T A S W H E R E Y O U G O . We've been helping people build their business for more than 75 years. Our team of experts can help guide your Business. Call us today. Toll-free 1.800.728.6440 scu.mb.ca What can you do to prepare and adopt the right mindset to succeed in running a growing company? It's a question that many entrepreneurs don't ask themselves, but it's a critical one. Having the right mindset can make the difference between a thriving business and one that fails. Develop the right mindset What's the right mindset? The answer may come as a surprise. Being personally ready for growth isn't just about having enough ambition, determination and readiness to take on risk. The growing companies that are most likely to succeed are those in which a professional management team and an entrepreneurial spirit are working together. It's about finding managers to perform key functions in your company, while you shift into a leadership role. You have to become the company's visionary, motivator, strategist, dealmaker and ambassador. Lack skills and time At a certain point in a company's expansion, most entrepreneurs lack the skills and time for day-to-day operational tasks, such as troubleshooting production issues, handling HR duties and managing the finances. In such a situation, your company's growth will likely force you to make the decision to delegate — or your business is at risk of floundering. If you don't delegate, you are likely to become the bottleneck in your business, and your best employees will leave if they don't see stability and a future in your company. At a certain point in your growth, you will have to make the decision to step back and turn over responsibilities to a professional management team or your company will decline. Clash over roles Experts often cite the example of Apple, which famously ran into difficulties after founder Steve Jobs refused to cede control over the company to a professional manager, clashed with his board, then quit the business. Microsoft's Bill Gates, on the other hand, willingly relinquished daily operations to one of his trusted managers, Steve Ballmer, while Gates took on a role as a company visionary and ambassador. The company continued to grow rapidly thanks both to Ballmer's expertise and Gates' continued leadership. When entrepreneurs realize that their vision should be combined with professional management, they and their company are ready for growth. Work on personal skills Here are other ways to prepare yourself to lead your company's growth. Decide why — You should be clear about why you want to grow. Be sure growth is part of a long-term strategy, not a spur-of- the-moment decision. The more thought you put into growing, the better your chances of success. Work on your leadership skills — As the company's leader and visionary, your personal skills will get a solid work-out and could play a big role in the success or failure of your growth plan. Work especially on communications skills, time management and physical fitness. Get everyone on-board — Growth can be taxing on your employees and family. Is everyone on board with the plan? Talking it through ahead of time will help your team and family get through the challenges you're bound to face. ❚ BIGGER & BET TER I f your business is all in your head, it's hard to convince lenders, investors and shareholders that you have a credible company and that you'll use their funding well. That's precisely where a business plan comes in. This management tool is basically a written document that describes who you are, what you plan to achieve, how you plan to overcome the risks involved and provide the returns anticipated. People often think of business plans are limited to starting up new companies or applying for business loans. However, they are also essential to running a business with a clear, well-documented plan. MAKE IT THOROUGH BUT KEEP IT SIMPLE Many entrepreneurs may see putting a business plan together as a daunting task involving hundreds of pages. However, in reality, it should be a concise and structured document that gives readers everything they need to assess your company's project. There's no one guaranteed formula for writing an effective business plan. However, in general you should show that you're committed to your venture and that you have the expertise, skills and self-confidence necessary to make it all happen. HERE'S THE CORE CONTENT THAT YOU SHOULD CONSIDER: Your business proposal Include a description of exactly what you're proposing. Ask yourself: Who your customer is; what business are you in exactly; what do you sell; and what are your plans for growth? Your unique selling point Address how your goods or services will appeal to customers. How will your company or product/ service make a difference in the lives of your customers? Market analysis Make sure you show your lender that you've done your homework. Basically, your market research helps you understand your customer needs so that you can offer a product or service that precisely fits those needs. You'll need to provide information such as your target market, customer demographics, competition and distribution methods. Key competitive information Provide information on competitor weaknesses and strengths and show how you intend to improve on what they're doing. Organizational structure Use organization charts to clearly spell out the roles of key management people and the proposed size of your organization. HR requirements You should include information on how you plan to recruit and maintain your employees or handle outsourced work. Premises and capital goods Do an assessment of the company's needs regarding premises and capital goods (such as machinery, technological equipment). KEY FINANCIAL DATA Be sure to modify your information depending on your target audience. For example, your bank will be interested in how you intend to repay the loan or overdraft, what you intend to do with the money and how it will help your business grow. Potential investors will also want to see the expected return and sources of funding, while shareholders are looking for the prospect of the share price and what dividend they can expect on their shares. Generally, lenders, shareholders and investors want facts and figures that back up what you say. Show your personal and business net worth (assets minus liabilities) so the lender can judge your ability to repay your debt. A banker will also look at your past credit history to gauge your reliability. Be sure that you know what credit agencies have on file about you or your company. Include your assets, such as collateral to secure a business loan. Bankers invariably ask for some investment on your part as proof of commitment. (This investment may have been raised by you privately or through family and friends). The rule of thumb is that money attracts money; the more backers you have, the easier it is to attract new ones. Be sure you include your cash flow forecast, which is the amount of cash needed to run your business: technology, inventory, equipment, human resources, etc. Present financial projections for at least two years and do an analysis of market size and market potential. Show implementation details or exactly what will make all of this happen. You need to assign clear responsibilities, set real dates and realistic budgets. Include your financial control systems, such as stock planning and managing debtors and creditors. LEGAL STRUC TURE Address issues such as taxes, liability concerns, information on proprietorships, partnerships, limited or incorporated companies. If you're buying an existing business, be sure to clarify buy-and-sell agreements. Keep in mind that you should have a lawyer look over all contracts and legal issues. AVOID THESE PITFALLS Don't be overly ambitious. You should be able to justify any assumptions or projections. Avoid masking financial difficulties. Inform your lender if your sales fluctuate, for example, and you may prefer a flexible payment schedule. A transparent business plan is one of your best assets in gaining the trust of bankers and investors, whether they are your associates or people outside the company. Providing inadequate information on the management team, flawed marketing plans, unrealistic forecasts or incomplete presentations. ❚ PUT TING A PLAN IN PLACE You've decided you want your company to grow. But how do you know if you're personally ready as an entrepreneur to manage your expansion?

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