Recipe For Success

Solopreneurs and owners of small businesses can benefit from what can be called a basic recipe consisting of time-tested business practices that will put you on the path to building a profitable enterprise that will make you proud.

Business strategy

Every business needs a strategy and a business plan is a very helpful tool that supports you as you implement your strategy to develop and launch your venture.  A complex strategy or business plan aren’t necessary to achieve success.  A one-page business strategy and a five-page business plan may do the job, as long as both are well thought out and executed.

A good business strategy (and plan) defines and drives the activities and behaviors of the entire organization. Without it, the business becomes a rudderless ship, lost at sea.  A well-conceived business strategy and properly written business plan reflect and support the business model and always address marketing, operations, finance, staffing and customer service, at a minimum.

Business model

The business model is the plan for how your company will generate revenues and make a profit.  The business model answers the question “Who is the customer and what does that customer value?” As a result, your business model must also spell out the company’s value proposition and what differentiates your products and services from those of competitors.

The business model will keep company leaders focused on the core markets and measuring success as defined by the business strategy.  Here you’ll detail a step-by-step action plan to operate profitably within your marketplace.

Marketing

In order to develop a realistic and potentially effective marketing strategy, it is essential to thoroughly research the most likely target customers for the venture.  What problem or goal will be solved with your products or services—what is the customer’s motive for doing business with you? How much will potential customers pay to obtain the solutions that your venture will offer?

Finding out which competitive products target customers now use to get their needs met is another essential marketing research function.  As well, you must learn the type of marketing and information gathering outreach that potential customers will find and trust.  An effective marketing strategy addresses how you will:

  • Identify target customers
  • Identify the products or services now used  (competitive products)
  • Describe how you will promote your products and services to those customers
  • Explain the positioning strategy for products and services
  • Discuss the branding strategy
  • Describe the sales strategy—how will you sell to customers
  • Address the pricing strategy
  • Identify advertising and social media marketing activities

Sales

The sales strategy that you adopt will depend on your target customers, your access to those customers and the competitive landscape.  You may be able to build referral arrangements and strategic alliances that allow you to generate enough sales to be profitable.  On the other hand, cold calling may be the most effective way to generate sales for your organization.  Will you sell in a physical location, or online? Will customers pay immediately, or will they be billed? The preferred selling approach a company uses is defined in the marketing plan.

Operations

Predictable, practical and streamlined business operations processes are a must.  The customer experience is closely linked to what happens in the behind-the-scenes delivery systems of products and services.  Think of it this way—when you go to your favorite breakfast place to get a muffin and coffee, you expect to receive what you’ve ordered with a minimum of fuss. That is how you start your day because it’s convenient and it makes you feel good.  You, business owner and leader, must create a similar experience for your customers if you intend to retain them.  Smooth business operations also play a role in building good word-of-mouth for your business.  Fail to develop a good operations plan and things could blow up in your face as disappointed customers spread the word about your shortcomings.

Unfortunately, many businesses give short shrift to the operations section of their business plan.  The purpose of thinking through operations processes is to increase business productivity and reduce costs as you offer the same (or better) outcomes to each customer, time and again.  There may be some trial and error along the way, but most of all it takes thought and planning.

Successful business leaders understand the need to continually improve business processes, to become more efficient and productive and able to respond to market changes faster, all the while providing excellent service to customers.

Technology

While technology is important, it needn’t be complex or costly to be effective.  Up-to-date technology products enable upgrades within any number of company functions: product manufacture, delivery of services, inventory management, payment systems, sales and distribution, marketing campaigns, quality control and customer service.

Finance

A realistic financial plan is the cornerstone of building a profitable enterprise.  Every business requires a financial roadmap and budget, along with the discipline to follow it.  You must anticipate and plan for business start-up or expansion costs,  projected sales and assisted by a break-even analysis, project that point in the future when the business will be positioned to make a profit.

The financial plan ensures that the business owner recognizes the most likely sources of business launch or expansion capital (will a bank loan or a partner be necessary?). A financial plan reminds owners where and how to spend money and it provides ways to measure progress, promote healthy cash-flow and warn of impending shortfalls.

Customer service

Smart business leaders treat customers well, because they are aware that there can be no business without customers who make purchases that create revenue and lead to profits.  Integrate customer service into your business practices and review those practices frequently to ensure that they are having the intended effect of facilitating customer satisfaction, repeat business and referrals.

Thanks for reading,

Kim

Image: One scene in a mural displayed in the Templo Mayor Museum in Mexico City, where thousands of artifacts were excavated from the ruins of Tenochtitlan, the former capital of the Aztec Empire (now called Mexico City).

 

Advertisements

Launch 2017 With Strategic Planning For Your Business

Happy New Year! My wish for all my readers is that 2017 will be filled with good health, good choices and prosperity and a year where you recognize opportunities and successfully move forward to attain what will benefit you.

Part of the process of realizing your goals may involve strategic planning. The process of strategic planning encourages business leadership teams to ask (the right) questions about the value that the business creates and sells at a profit, which is a reflection of its vision and mission.  The goals, objectives, business model and guiding principles (that is, culture and values) are likewise impacted by the organization’s vision and mission. Below are six strategic planning and positioning principles to enhance your planning.

Principle 1:  Sustained profitability

Economic value and the conditions for generating profits are created when clients value your product or service enough to pay more than it costs the business (you) to produce and provide it.  Strategic planning is all about Defining  business goals and objectives and devising strategies and action plans with the thought of ROI, in particular long-term ROI, in mind.  Assuming that profits will be inevitable when sales volume and/or market share are the most accurate measurements of success is not the best way to approach the matter.

Principle 2: Value proposition

First, be certain that what you consider to be the value proposition—that is, the most desirable benefits—matches what clients consider to be the value proposition. Be aware that strategy is not about offering services or products that will be all things to all prospective clients.  Businesses are in need of strategies that allow the venture to compete in a way that allows it to effectively and efficiently deliver what clients consider the value proposition.

Principle 3: Competitive advantage

The unique and desirable benefits that sustain the value proposition must be reflected in and supported by strategy that shapes them into a sustainable competitive advantage.  The successful enterprise will differentiate itself from competitors through the products or services offered, how those are packaged and/or delivered, customer service practices, branding, pricing and so on; those unique features and practices will matter to current and prospective clients.  Still, the company’s business model will likely resemble that of its rivals.

Principle 4: Choices and priorities

Resources are inevitably finite and choices about your products and/or services must be made, in order to define what is necessary and possible and therefore, a priority.  Some  product or service features will not be offered, so that the benefits (priorities) that clients have chosen as highly desirable can be optimized.  These priorities are what sets the business apart from competitors and define the brand.

Principle 5: Flow

Choices and priorities must be baked into the strategies that you and the leadership team devise, to enhance and enable the consistent  delivery of the value proposition. These strategies will be both stand-alone and interdependent, like dominoes.  Choices made to define the target customers that the business will pursue also impact product design and by necessity will impact choices that determine the manufacturing process and its cost.  Choices that determine what will be included in a service will be influenced by the expected target customers and will impact how that service is delivered and priced.  Choices about product positioning and branding will impact where the product is sold and the marketing strategy.

Principle 6: Direction

The late style icon Diana Vreeland, who served as editor-in-chief at both Vogue and Harper’s Bazaar Magazines, once said that “elegance is refusal.” A company must define its unique value proposition and that will eventually cause certain potential choices to be declined, because they are contrary to the brand.  The product or service lines can be altered to satisfy customer demands over time and business models can be adjusted to reflect current or anticipated market conditions.  Nevertheless, the vision and mission must be upheld to maintain brand awareness and trust. Strategic direction will guide that process.

Thanks for reading,

Kim

 

Business Model = Profit Engine

Hatching an idea for a business involves much more than inspiration.  Your entrepreneurial idea must also include a strategy for making the idea profitable. That strategy is known as the business model. The function of a business is to provide products and/or services that help clients solve their business or consumer needs.  In addition, your business must work for you  and generate a reliable and abundant revenue stream from which you derive your annual income.

Before we go any further, let’s clarify the meanings of business model  and business plan.  Your business plan  is a document in which you describe the mission of your business; the target customers; the marketplace and competitive environment in which it will operate; its marketing, financial and operations plans; and the legal structure it will be given.

Your business model  will detail how the venture will attain and sustain profitability. The cornerstone of a good business model is a competitive analysis, which will help you verify target markets (customer groups) and establish your expected value-added in the presence of enterprises that offer similar products and services.

The primary element of your competitive analysis is customer knowledge, something that regulars to these posts know that I encourage frequently.  Information-gathering is a vital and ongoing business function.  James King, Director of the New York (state) Small Business Development Center, notes that “…customer purchasing patterns change rather rapidly and if you’re not ahead of your customers, you’re not making sales.”  Along with your selection of products and services to provide and customer acquisition strategies, operational aspects — that is, the process of how your products or services will be delivered — must meet the often fluid expectations of customers and will therefore figure into your venture’s business model.

Once you’ve developed a proposed business model, find a trusted potential customer or business owner or colleague and ask for a review.  Discovering and closing immediately obvious gaps is something you’ll want to do before your business is up and running.

King recommends that aspiring entrepreneurs “Sit down with someone who doesn’t have a vested interest and ask that person to poke holes in your model. If they do a good job, you’re going to be better prepared for any eventuality. The more risk you can eliminate, the higher the probability that you’re going to be successful.”

One is advised to revisit the business plan and business model every couple of years, or at least when changes in your industry, local business environment or technology have the potential to impact your sales revenue or how your do business. This practice will also give you the benefit of reviewing your projections as regards expected vs. actual target customers and allow you to refine planning for growth and expansion, as you create strategies for sustainable business success.

Thanks for reading,

Kim

Build A Winning Business Model

Whether you are considering the feasibility of launching a business or you are on the leadership team of a business that is several decades old, the business model for the organization is the hub around which all activities revolve. The business model is the blueprint that details how you will create and sustain a money-making business venture. It is the engine that drives revenue. Fail to identify a winning business model and you fail to build a business that will succeed over the long-term. Creation of a profitable business model is a multi-disciplinary exercise that encompasses marketing, sales, strategy, operations and finance.

Identify your primary customers  (Marketing)

If you will focus on B2B clients, describe who they are: for-profit or not-for-profit organizations, Fortune 1000 companies, start-ups. If you plan to focus on a particular industry, specify that and specify also the department(s) in which you will find your decision-maker and/or key purchase influencers and the job title of the person who can green-light your contract. Detail also the services or products that you will provide to your target clients.

Detail the business processes  (Operations)

Where will business transactions take place? Will you have a physical location and will clients visit you there? Will your business be primarily online? Will you have a consulting practice and perform most of the work off-site on your computer? How will clients pay—by check or credit card at the time of purchase, or will you bill them? Must you ship products? Describe how and from which location you will provide or deliver your products and services and the system of payment.

Identify the resources necessary to operate  (Finance)

Before your business is up and running, what must be available? Along with business cards and probably a website, computer, smart phone, and maybe a tablet, you may decide on print collaterals as well. You will need a business bank account and you may need a process by which you can accept credit cards as a merchant. Must you rent commercial space? What will the construction costs be for the build-out of your office space? What will insurance, special certifications and utilities cost you? How much product inventory does it make sense to have? Must you hire help? Determine how much you must spend and have on hand before you can commence business operations.

Define the value proposition  (Sales)

Make the case as to why your products and services are superior to what competitors offer. Learn what motivates your target customers to seek out the products and services that you will provide. How are target customers getting the job done now? Perfect your selling points and learn to neutralize the most common objections that prospects will raise.

Determine key business partners  (Strategy)

Will your business success be greatly helped by getting referrals from a particular source? In other words, if you plan to become a florist or a caterer, it will make a lot of sense to develop relationships with event planners. Referrals are always crucial to building your client list, so figure out which types of businesses you can build a mutually beneficial relationship with—what can they do for you and what can you do for them?

Build and fill the sales pipeline  (Marketing)

Describe the various methods you expect to use to build awareness of your business and find prospective clients. Social media will provably be used, but which platforms can be expected to have the most resonance with your target clients? Teaching, conducting webinars and networking will serve you well in the early stages of your business and throughout. Client testimonials, referrals and case studies will support you as your client list grows and you develop a track record.

Expect to fine-tune and innovate  (Strategy)

Until you begin to welcome paying customers, you will not really know if your proposed business model adequately meets their needs. Expect a reality check and build innovation —that is tweaking —into your business model.

Thanks for reading,

Kim

Madam Builds an Empire

“I got my start by giving myself a start.”

Madam C.J. Walker,  founder and CEO of the Madam C.J. Walker Manufacturing Company

Most who aspire to launch a business venture must overcome significant adversity as they build their dream.  It is safe to say that none faced a steeper uphill climb than Madam C.J. Walker,  the orphaned daughter of freed slaves and former laundress who became America’s first female and first African-American self-made millionaire. Born Sarah Breedlove in Louisiana in 1867, Madam Walker founded her hair care products company, the Madam C.J. Walker Manufacturing Company, in 1905.

She was a woman with vision; absolute belief in herself and her business model; passion, determination and courage. As all successful entrepreneurs do, she saw a problem, set about solving it and monetized the solution. That she was female and African-American in a time of enormous discrimination and limitations placed on those of her gender and race was apparently beside the point. The lady was not afraid to dream big.

Madam Walker was a savvy businesswoman who knew her customer (initially, herself).  She knew there was a large and dissatisfied market waiting to be tapped (African-American women).  She entered a business of which she had some knowledge— her four brothers were barbers and owned a shop together. When she developed a scalp ailment that caused her hair to thin, she consulted them for advice and experimented with various remedies, store-bought and home-made.

Madam Walker shared the family flair for entrepreneurship and she excelled in manufacturing, sales and product distribution. Initially, she made batches of her hair care potions herself, in a washtub, and personally sold her products door to door to friends and neighbors in Denver, CO, where she had moved to give herself a fresh start after marrying at age 14, becoming a mother at age 17 and a widow at 20.

Marketing was another of her strengths. To persuade women to try her product, she gave free demonstrations and created plenty of buzz along the way.  Later, she implemented the operational efficiency of mail order, to expand product distribution.

By 1908, she had hired and trained a team of female sales representatives and by 1910, she employed 950 representatives who crisscrossed the country making sales and creating loyal customers.  She also remarried, to Charles Joseph Walker, a newspaper advertising salesman.  She summarily launched successful newspaper advertising campaigns and adopted the name Madam C.J. Walker. A brand was born.

Madam Walker built an international business: her products were also sold in the Caribbean and South America.  By 1917, she had become the nation’s first self-made female millionaire, founder and chief executive of the country’s most successful African-American or woman- owned business.

Her only child, Lelia McWilliams, was born during her first marriage, joined her in the enterprise first as director of sales and eventually became president of the company.  After Lelia’s death in 1931, Madam Walker’s granddaughter Mae Walker (1898- 1945) and great-granddaughter A’Lelia Perry Bundles (1928-1976), also served as company presidents. The company ceased operations in 1981.

Madam Walker passed away in 1919. She was a revered businesswoman and philanthropist who not only built a spectacularly successful multinational enterprise from the ground up, but also knew how to pay it forward. She championed  women’s entrepreneurship and in Philadelphia in 1917,  she convened what is believed to be the first women’s business conference in the nation. She was no doubt a role model for other highly successful female entrepreneurs who followed her, such as cosmetics business giants Helena Rubenstein, Elizabeth Arden and Estee Lauder.

In 2007,  the Madam C.J. Walker Manufacturing Company became a Harvard Business School case, written by Nancy F. Koehn and Katherine Miller. In February 2016, Sundial Brands, a manufacturer of hair care and skin care products, announced that it would re-launch Madam C.J. Walker Beauty Culture products and that the line will be available at Sephora.

Thanks for reading,

Kim

17 Start-up Screw-ups

Serial entrepreneur John Osher has developed numerous consumer products,  including an electric toothbrush that became America’s best-selling toothbrush in just 15 months.  He also started several businesses,  most notably Cap Toys,  where he built sales to $125 million a year and then sold to Hasbro, Inc. in 1997.

Osher’s most important contribution to American business may not be the companies he’s started and profited handsomely from,  but rather the business advice that he’s willing to share. His list  “17 Mistakes Start-ups Make”  became a Harvard Business School case study.  See what you can learn from his entrepreneurial experiences and use it to create your version of the perfect Freelance consulting business.

  1. FAILING TO ADEQUATELY RESEARCH THE IDEA TO ENSURE IT IS VIABLE

“The most important mistake of all.  I say nine out of ten businesses fail because the original concept is not viable.  You want to be in business so much that you don’t slow down and take the time to do the up-front research,  so the business is doomed before the doors open.  You can be very talented,  but your business will fail because the concept is flawed.”  Go to the library and do your research.  Read blogs,  journals and newsletters that pertain to the industry you plan to enter,  so that you’ll know what’s going on.  Develop a credible business model.

  1. MISCALCULATING MARKET SIZE, TIMING, EASE OF ENTRY AND YOUR POTENTIAL MARKET SHARE

“Most new entrepreneurs get very excited about their concept and don’t look for the truth about how many people will want to buy what they they’re selling.”  Take the time to research and understand targeted customers and get to know why they will want to buy from you or hire you.  Calculate your potential to penetrate the target market and grow a client list you can live on.

  1. UNDERESTIMATING FINANCIAL REQUIREMENTS AND TIMING

“Based on inadequate research noted in Mistakes #1 & #2,  fledgling entrepreneurs operate from the premise of over-stated market size and their ability to enter it.  They then start spending more money than they should on start-up costs,  creating costs that require those inflated sales projections to be met,  so they run out of money”.

  1. OVER-PROJECTING SALES VOLUME AND TIMING

“You have already miscalculated the size of the market.  Now you over-project your portion of it”.  Always another way to run out of money, no?

  1. UNDER-PROJECTING EXPENSES

“Cost projections are often far too low.  Part of the problem is that you’ve projected market share and sales volume that are too high.  There are always unknown reasons that come up to make expenses higher than planned”.

  1. OVER-SPENDING ON AN OFFICE, OFFICE EQUIPMENT AND EMPLOYEES

“Now you’ve got lower sales,  higher start-up costs and then you layer on too-high operating costs.”  I have seen colleagues maintain fancy offices when they have the ability to run the business from the kitchen table at home.  If you can take clients out to a restaurant for meetings,  then why pay for office space?  You can get a telephone answering service to personally take messages,  so it looks like you have a secretary.  I’ve done it for a dozen years.  Besides,  no one answers the telephone these days,  especially not in major corporations. When you need another pair of hands to take on a big project,  hire in another Freelancer and spread the wealth.

More next week.  Thanks for reading,

Kim

Plan B: The Pivot

By now you have reviewed your 2013 numbers and you know how you feel about the results.  If your revenue has been less than stellar for two or more consecutive years,   it’s time to think seriously about how to respond more effectively to the business environment that you face.  You need to create a Plan B and pivot.

Or maybe your numbers were more than respectable,  but because you are a savvy business person you know to look three years down the road and follow the advice of hockey immortal Wayne Gretzky and skate not to where the puck has been,  but to where it’s going to be.  Scanning the horizon for potentially lucrative opportunities and a pivot is always a good idea for those in business.

To pivot is to tweak your business model in response to current or impending business conditions,  good or bad.  To increase the chance that you will successfully tweak your business model and pull off a good pivot,  planning is imperative.  Market research and reality  (i.e. market)  testing of what you think will work form the basis of your pivot plan.  Start with an analysis of which clients hired you and the projects you were asked to do.  Your successful pivot could entail expanding your outreach to those clients.  What other services can you provide to them and how might you persuade them to upgrade what they hired you to do previously? Also,  how can you obtain repeat business this year,  so that you can introduce the upgrade?

Conduct some informal market research and develop a pivot strategy.   You might get clues about which of your products and services clients value most,  services you might expand and upgrade,  or additional services you can develop and sell by reading blogs and newsletters followed by those in the industries that hire you.   Invite a favorite client out to lunch or coffee and ask about organizational initiatives or industry hot buttons.   I think you can afford to be frank and let the client know that you enjoy working with him/her and that you wonder how else you might be of service.   Don’t be shy! You need information to set up a marketing test so that you can identify the Plan B to pivot into,  along with a marketing message to announce and sell it.

Alan Spoon,  general partner at the Boston office of Polaris Venture Partners,  recommends that you closely study your customers’ broader behaviors around the use of your products and services.  Your research should help you address these questions:

  • What do I do that is perceived by clients as distinctly valuable and could potentially be extended to other client needs?
  •  Are there products and services that can have an ongoing use and thus extend billing beyond the initial project?

Thanks for reading,

Kim

Business Model Tune-up

You’ve written a business plan—now what?  Kim is the midwife who helps you take your business from the drawing board to reality in  “Business Plans:  The Next Steps”.   Bring your completed business plan and join Kim and a group of hopeful entrepreneurs in round robin discussions where you’ll get a critique of your business model;  smart marketing/PR/social media advice;  insights into sales channels that make sense for you and your customers;  and advice on financing options in today’s economy.  Wednesdays March 13,  20  &  27  5:30 PM – 7:30 PM at Boston Center for Adult Education  122 Arlington Street  Boston.  Register at  http://bit.ly/Zd9dqR  or call 617.267.4430 class ID 9074.

A cloud of worry and paranoia envelopes business leaders and other decision-makers and in their role as B2B clients,  they become more fickle and gun-shy every day.  They brag about postponing projects and declining to spend money.

To survive and thrive,  it is therefore  essential for Freelance consultants and other business owners  to make an annual assessment of the company’s business model and evaluate how the organization can deliver the right services in the right way and demonstrate to clients that the value you bring improves the bottom line and makes clients look smart to the higher-ups.

The business model is the blueprint for the process your organization follows to connect with clients,  deliver services and make and sustain a profit.  The business model reflects what you believe about what clients need and value,  the way in which those needs ought be addressed and solutions delivered and what clients will pay to obtain those solutions.   Additionally,  the business model shows the business leader how to make his/her organization function efficiently for leader and clients. Perfecting it is the cornerstone to success  (along with a healthy dose of good fortune!).

The most direct way to check up on your business model is to take a good client to a restaurant for some combination of libation and/or meal at the conclusion of a project,  when the client’s trust in you is high because you’ve delivered the goods and exceeded expectations.  You will likely be able to persuade your client to open up and tell you what’s going on in the organization as regards challenges and opportunities,  plans for the future,  services that are valued and the preferred method of delivery for those services.

You are certain to learn all sorts of useful information that will tell you how you might refine,  adjust,  package or price your services.  Knowledge of your client’s priorities and concerns is the first step to winning the project that does the work to address them,  says Alexander Osterwalder,  co-author of  “Business Model Generation” (2010)  and founder of The Business Model Foundry  http://www.businessmodelgeneration.com

Knowing how your clients can get the job done without you is also useful (although painful!).  As I mentioned at the beginning,  your real competition may not be another Freelance consultant but the client,  who decides to table the project indefinitely or do it in-house.  That’s not easy to counteract.  Your only defense is a solid business model that helps you position and promote your solution as preferable in some vital way.

Flexibility in your business model is a necessary feature if you expect your business to make a profit.  The need to adapt to shifting client preferences may require you to selectively experiment and reconfigure the services you offer,  or how you package and promote them.

Updating the keywords you use in marketing campaigns and online and print collateral will help clients and prospects to visualize where your services might have a place within their organization,  so stay up-to-date with industry concerns and buzzwords.  Keeping abreast of client needs allows you to successfully adapt your business model and promotional message,  keeping your organization competitive and able to stay profitable.

Thanks for reading,

KIm

Business Planning Resolutions for 2012

This week we’ll consider where you’d like to take your business,  what you’d like it to look like and how you’d like it to operate.  Every journey has a destination or goal.  The journey of your business should not be random;  it deserves careful thought and planning.  Reserve some quiet time to think about the journey of your Freelance venture.  You may want to start by reviewing where you’ve been.

Which kinds of clients and assignments give you the most fulfillment?  Which let your talents shine and/or bring in the most money? What competencies have you learned along the way?  What has taught you to become wiser and more confident?  What were your successes and what would you like to do better next time,  or maybe avoid altogether? Take stock and make a plan for the New Year.

Resolve to develop business goals and strategies

This sounds obvious,  but we all know that it’s very easy to get totally caught up in just trying to find clients and get paid,  getting tunnel vision.  We become like the hamster in a wheel,  busy–busy running in circles,  without giving adequate thought to our actions and following a road map.  As a result,  we can be going nowhere fast.

Start this year by nurturing yourself and taking time to reflect on what has transpired over the past year or two and acknowledging how you feel about it.  Did you set goals for your business? Were they realistic for you?  Which goals did you achieve and how did that occur?  Re-evaluate the direction it makes sense for your business to take and brainstorm strategies that you can enact  (alone or with the help of colleagues)  to bring it there.

Planning is the only way to create a successful business venture.  Set your direction and develop SMART goals :  Specific, Measurable,  Attainable,  Realistic and Time-bound.  Next devise strategies,  the path you will take to reach the goal.  Follow through with action plans  (with dates attached),  to keep you moving forward and on schedule.  Revisit your goals in three months and assess what is working,  what needs tweaking and what should be jettisoned.

Resolve to reaffirm your business model

The business model is the framework by which the business functions as a business:  the products and services that are offered;  by what methods,  in what location and by whom products and services are delivered to customers;  how the business will attract and retain customers;  the length of the sales cycle;  and how and when payment for products and services will be made.  Is your business model operating effectively?  In 2012,  take steps to ensure that your operation functions like a well-oiled machine.

For Freelance consultants,  the system of outreach to potential clients is often a sticking point.   Periodic review should be given to the products and services offered and how they are packaged,  presented, delivered and priced.  Talking with trusted clients is a good way to get feedback on your business model.  If you’re a LinkedIn member,  visit the Answers Forum and put questions out to your peers.  You will likely receive much useful information.

Finally,  review how you typically obtain clients and prospects.  Do you solicit them  (and how that happens),  do they find you  (and how that happens),  or do colleagues make referrals and introduction?  Which method has the best conversion rate?   What is the profile of organizations that have become your best clients over the past three years? Use what you learn about all of the above to buff up your business model and set the stage for a more profitable 2012.  New Year’s Resolutions will conclude next week.

Thanks for reading,

Kim

The Road to Freelance

Many established professionals consider leaving the world of traditional employment and launching a Freelance consulting career.  The growing lack of job security,  as evidenced by the unemployment rate,  along with the increasing occurrence of toxic work environments endured by those who are working,  have caused many people to give serious thought to self-employment.

I’ve found much personal and professional satisfaction in Freelance nation but there are challenges.  Preparation is key and if you’re still on the job,  begin now to build the infrastructure that will support your transition.   Take the steps while on the corporate dime to sock away some cash and learn how to approach your business clients and contacts as an independent professional.  Learn how to package and sell your services and determine and negotiate fees for the scope of work you will perform.  Visit professional associations and meet Freelancers who do what you aspire to do and ask some questions,  especially on how to build visibility and credibility as an independent consultant in your industry.

Build your savings account

Aim to have savings that will allow you to cover your living expenses for 12 months.  You don’t know how long it will take to sign your first client,  or the one after that.  Freelancers,  especially in the beginning,  will need cash to float themselves,  especially if one is the sole or primary breadwinner.  Furthermore,  scheduled  projects have a nasty habit of being delayed or even canceled.

Start saving money now by eliminating those $5.00 coffee drinks.  Brown bag your lunch whenever possible and cut back on nights out eating and drinking by 75%.  Do not buy any clothing you don’t absolutely need and cancel any vacation plans.  Remember that in addition to paying for living expenses,  you may need to buy or upgrade technology hardware and/or software and will also need to pay for marketing materials  (business cards, website, etc.)  so that you can effectively operate and promote your business.

Business plan and business model

You must figure out how you will get clients,  select the services you will offer and how to determine your fees.  You must choose the marketing materials you will use and decide what they will look like.  You must define the best target client groups and know how to approach them and convince them to hire you for Freelance work—even if you’ve worked with them as an employee of you current organization.  Do you need to be accepted onto an approved vendor list in order to be considered for hire?  Discreetly ask questions of those you can trust to not rat you out to your boss.   Also get an understanding of the typical length of the sales cycle.

Additionally,  it is necessary that you assess the competitive landscape.  The presence of competition is good,  as it demonstrates the need for services you provide and shows that Freelancers are hired to fulfill those needs.  However,  you don’t want to be in an over-crowded marketplace,  unless you are a very heavy-hitter.

Finally,  summon the discipline to write a business plan.  A mission statement,  comprehensive marketing plan and basic cash flow and profit and loss statements will provide a useful road map to get you started and encourage you to examine what will be required to make your Freelance venture successful.  I wish you the best of luck.

Thanks for reading,

Kim