Today on the Atlanta Small Business Show we are joined once again by Mike Gomez, the founder, and president of Allegro Consulting, headquartered right here in Atlanta. Mike is a speaker and writer on business strategy and sales process with over 12 years of sales experience.
Last time Mike joined ASBN he spoke about your small business social media plan and what you need to focus on. This segment he talks about changes in your business plan and how to shift with market changes.
VIDEO TRANSCRIPT
Jim Fitzpatrick: A couple other comments that you made last time that you were in was about planning and about the lack of planning and the importance of planning, and one viewer wrote in and said, “What do you do if you’ve made a plan for your business, but six months into it, things have changed? Market conditions have changed … do I stay on the plan that I’ve created, or do I throw it away and start anew with a brand new plan?”
Mike Gomez: Alright. So I call the … when is say plan, a strategic plan for a company, what I’m mapping out is a two- or three-year definition in writing about what I want our company to look like two years from now or three years from now, what I want it to look like in the way of sales, total sales, sales mix, customer mix, what product we’re selling, what services we’re selling, and how that’s going to look like.
If properly done, and when I do it with a client, it just takes particularly two to three months for us to go through everything about that company, how that company got to where it’s at, in order to create that two- to three-year plan.
That plan is made in cement and brick. It’s rock-solid. There are very few things that should happen in the marketplace that should change that plan-
Jim Fitzpatrick: Right. Because if so, the other item would have been baked in the plan.
Mike Gomez: Correct.
Jim Fitzpatrick: Okay.
Mike Gomez: So things like 9/11, okay? That was hugely disruptive to the entire eco-system of America. That caused a lot of people to go back and look at their strategic plan again because it changed so much, but barring a significant earth-shaking event like that, no.
It stays where it is. And if you’re that far off your plan, then maybe you need to think about how the plan came together in the first place, and then do a better job the next time.
Jim Fitzpatrick: Right. But it’s okay to pivot along the way. I know, before the interview, you talked about keeping an eye on the destination, but you might go down this road one day and then take another road the next day.
But the plan says, “We’re going to be at this mark right here in two years.”
Mike Gomez: A good analogy would be this: we’re going to go on vacation. We’re going to to Yosemite. We live in Atlanta, Georgia. We’re going to drive down to Yosemite. It’s a long drive, but we know that’s where we’re going.
Now, how we get to Yosemite, we may go and swing by and visit some relatives in Texas on the way, and we may go this on the way, and we may go this. But ultimately, the destination is Yosemite.
Jim Fitzpatrick: Right.
Mike Gomez: Now, barring any catastrophic event, like what’s happening in the crisis right now with the fires in California, Yosemite is on fire. Then, and only then, do you think about changing the destination. So for a company, marking that spot and saying, “That’s where we’re going,” yes. You can change how you get there. But everybody in the company knows that’s the destination we want to achieve. That’s what we want to look like two years from now, and barring any major event, that’s where we’re determined to go.
Jim Fitzpatrick: We just made a huge assumption, and that is that there is a plan already in place. Talk to us about the importance of having a good business plan. I know that you spoke a little bit about that last time that you were in, but talk to us about the businesses and the percentage of businesses that actually sit down, and for those people that are watching now, they’re either thinking about getting into business, or those that are in business currently, that want to grow their business.
The question is: do you have a rock-solid plan that’s literally written down? Right? Talk to us about that.
Mike Gomez: Right.
I wrote an article, Eight Short-Sighted Reasons Business Owners Don’t Plan, and these are real quotes from real owners who cited reasons for why having a concrete plan, a destination where they want their company to go, was just not … it’s just not the right time for them, that we’re not big enough, Mike, or-
Jim Fitzpatrick: How big does a company have to be in order to develop a plan?
Mike Gomez: The day you open the door and said, “I’m going to be a business owner,” you damn well better have a plan.
Jim Fitzpatrick: Right.
Mike Gomez: Okay? So-
Jim Fitzpatrick: And before that, really.
Mike Gomez: And before that. Before you open the door, you should have had a business plan, in writing.
Jim Fitzpatrick: Not up here.
Mike Gomez: In writing. And it says, “I’ve got something unique to offer. This is the competitive landscape I’m going to enter. This is how much it’s going to cost me to run this business. This is how long I can run this based on my savings account before I run out of money, and I better be making enough money then.”
Jim Fitzpatrick: And answer as many questions in that plan as you possibly can, even if it’s a husband and wife setting out on a business to say, “What roles? Who’s going to do what? Who’s going to handle the books? Who’s going to handle the legal? Who’s going to handle the sales?”
Mike Gomez: What kind of expertise-
Jim Fitzpatrick: What are the expectations.
Mike Gomez: Absolutely.
Everything.
I tell people, “Try to make the business fail in the business planning process.”
Jim Fitzpatrick: That’s a good point.
Mike Gomez: Okay. Because if we can make it fail on paper, then you’re darn right it’s going to fail in real life.
Jim Fitzpatrick: And what you mean by that is: look out for the pitfalls on paper so that you can account for them, so you have a successful business plan.
Mike Gomez: Right. And if and when they occur, you go, “No, no. We anticipated this in the business planning process, and this was how we were going to react if it did happen.”
Jim Fitzpatrick: And so the business plan ultimately really becomes a handbook on how to open and run that business, that all the stakeholders have agreed on already.
Mike Gomez: Right.
Jim Fitzpatrick: So your point, so that if something comes up, you go, “Oh, wait a minute. Three months ago, or six months ago, when we devised this plan, we all said that I would handle x, y, and z, and you would handle a, b, and c.”
Mike Gomez: Absolutely.
Jim Fitzpatrick: Correct?
Mike Gomez: Correct. So allocation of resources, how we’re going to enter the marketplace, what role people are going to have, what our marketing activity is, how we’re going to go about selling, what’s our sales process going to be, all of those things are going to be covered in the business plan.
Jim Fitzpatrick: What do you say– go ahead.
Mike Gomez: So this is when you, before you open the door, before you create the first website, before you own the first dot-com site. Do this in writing first, and then when you have a rock-solid plan, and I’m saying that plan, you have some of the people that you trust will give you really good feedback. Not your friends and family who are going to be cheerleading for you and say, “Oh, this is such a great plan, Bobby.”
No. Have some really tough-love people look at it and say, “Did you think of everything?”
Then, when you start the business, within six months, trust me, your plan is going to be ripped up because reality is a cruel beast, and you’re going to learn a whole bunch of new things, and that’s when you need to begin transitioning to strategic plan: “Alright. We’ve been operating for six months. What do we want our company to look like,” say, in the first strategic plan, “in the next six months?”
Jim Fitzpatrick: So to back up on the original question of is it okay, or should I rip up my plan, and you said, “No, your plan is brick-and-mortar, and that’s that,” so what you’re saying is it’s okay to come up with a second plan basically to say, “Alright. Now that I know the business I’m in, and I know some of the pitfalls, now I’ve got to write a realistic plan.”
Mike Gomez: I’ll tell you. It’s a small word game, but the business plan I use for starting a company. A strategic plan is when you have, you are now open your doors, and you’re running the business. The strategic plan is the one that you brief everybody that you hire and anyone who provides services for your company. As soon as they come in, and you say, “Welcome aboard this company. I want to talk to you about where were company is going to look like a year from now.”
And what your role is in helping us get to that point, and is there any ambiguity about where we’re going and what your role is here? Having that strategic plan allows you to have those conversations. It takes away the excuse of “I didn’t know,” a classic excuse. “Well, I didn’t know we were going there.”
Jim Fitzpatrick: So a strategic plan is different than a business plan?
Mike Gomez: Yes.
Jim Fitzpatrick: Gotcha.
Mike Gomez: For that reason.
Business plan to start a business, strategic plan when you have an established business.
Jim Fitzpatrick: To up and run the business.
Mike Gomez: And every business should have one.
