April 23, 2008 by mrbizplan.

The fact is that not all businesses will be successful.  Some have even heard that 80% of new businesses fail by the 5th year, although this is disputed by many and evidence suggests that the failure rate is closer to 50-60 percent.  Even so, there may come a time in your business venture when you start questioning wheather to stick with it despite the pain or quit, getting out before the pain gets worse.

I recently read a book by Seth Godin called The Dip: A Little Book That Teaches You When To Quit (And When To Stick) and the general idea behind the book is looking for the cues that should tell you when to quit and to push through knowing there is a better future.  The “dip” is that point, in whatever venture you are pursuing, where things get hard and looking into the future there is only uncertainty. 

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April 7, 2008 by mrbizplan.

Maybe it is a midwestern thing but lenders around here have a hard time just saying “No”.

Let me lay out a scenario for you:

1. Client comes into my office and tells me about the ultimate business opportunity. 
2. We discuss the costs and determine whether the client has the resources and qualifications possible to successfully launch this venture. 
3. Client completes market research and we write a business plan and financial projections based on sound assumptions.
4. Client goes to bank(s) and presents business plan.
5. Bank drags their feet, hems and haws, comes up with things that need to be fixed in order to do the loan.
6. Client fixes problem and fulfills requests.
7. Bank drags their feet, hems and haws…another list…repeat
8. Weeks pass with no forward motion.
9. Client gets frustrated and gos to another bank.
10. Client gets loan with no troubles.

This routine always costs the entrepreneur time and usually it costs some money, whether in the form or burned cash or opportunity cost. Now, somewhere between number 4 and number 7 above the scenario should have changed.  Someone, namely the commercial lender, should have said; “No thank you I am not interested in your request.”

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April 3, 2008 by mrbizplan.

Looking back at April 1st there were several occasions for someone reporting bad news to smile quietly and say “April Fools!”. 

Unfortunately, the only one to legitimately play an April Fools joke on me was my eight year old son, who upon arriving at school said he forgot his backpack only to reveal he put it on under his coat.  At least the spirit of the tradition was not lost on one person.

Upon arriving at work, I met with a business woman who, after two years in business, was struggling to gain a critical mass of clientele to keep her afloat.  I could feel her anxiety as she answered my standard litany of questions.  Everything I threw at her she had tried.  She had implemented a textbook marketing plan including standard advertising campaigns, community promotion, customer referral systems, even some guerilla marketing techniques. 

Despite these marketing efforts and running a tight ship controlling expenses, her clientel has hit a wall at just slightly over break even.  And, to make matters worse she is coming up on her slow season.  I was hoping for a quiet smile but it never came…  How about a short-term working capital loan to stem the bleeding?  Not the best strategy but with this person’s passion for their business surely they will pull through to profitability…right?

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