Module 3 business_planning

Module 3 Business
Planning with
Benefit of
Hindsight

o Get back to basics – learn what a
business plan is and why is it
important
o Debunk common myths and
realities of business planning
o Improve your business plan
second time around
o Learn why experimentation is
just as important as planning
o Learn how to build a strong
resilient business
o Plan for tough time and crises
In this module, you will:

 A Business Plan is an essential tool that methodically thinks through the
entire entrepreneurial planning process.
 Many entrepreneurs do not actually complete a business plan unless
required to by their bank or funding agency. This is a lost opportunity.
 A properly prepared Business Plan should tell a story, make an argument
and conservatively predict the future.
 Business planning guides you through the process of setting goals,
explaining objectives and then mapping out a document to achieve these
goals and objectives. It does not need to be complicated.
What are Business Plans and
why are they important?
Source: www.entrepreneurship.org/articles/2002/05/business-planning-building-an-effective-business-model

What are Business Plans and
why are they important?

 Ideas are the lifeblood of your
business. People that generate
lots of ideas are good at coming
up with solutions to problems.
However, an idea is not a
business opportunity.
 The process of business
planning allows you to dissect
your idea.
 It actually helps develop an idea
into an opportunity. It forces
you to ask and answer hard
questions and explore your
options.

Reasons for a business plan
According to statistics from the Bank of Ireland,
66% of all business start-ups will fail in their first
five years.
“A staggering 80% of small businesses without a
business plan will fail in their first 5 years,” Paul
Fagan, Action Coach.
Why ?
• Lack of planning on behalf of business owners.
• Having a well structured business plan gives
you more success of survival.

Why the business planning
process is essential?
• You wouldn't build a house without creating a
plan. Why would you build a business without
having a similar plan?
• To help you think through the whole process - the
value of a business plan is not only the plan itself,
but the process of writing it.
• To put down on paper the resources you need to
get started and what
• To convince yourself that it is worth doing
• To show others that you have thought it through
• To convince investors to give support
• To give you targets to aim towards and measure
yourself against

Myths and
Realities of
Business
Planning –
Debunked!
In developing a Business Plan and a
Business Model, entrepreneurs need
to be aware that there are myths and
misconceptions about the process…

#1 Myth: Business
plans are only for
start-up companies.
 REALITY: Companies at all stages
of development need to prepare
and update Business Plans to
plot their course and plan and
track progress. This could
include attracting new
investment ,how you will launch
a new product, a new market,
take on board new employees,
expand or sometimes contract a
business.

 A solid business plan can be the
difference between just a
business idea and a successful
business. It allows you to set
goals and determine how to
realistically measure them. In
the process of creating one, you
develop an understanding of
your market and the
competition that is based on
facts, not just hopes.
#1 Myth: Business
plans are only for
start-up companies.

#2 myth: Business plans
are only written when a
company needs to raise
capital.
REALITY: Although most Business
Plans are written in connection
with the search for capital, a well-
written Business Plan will serve a
variety of beneficial purposes to
the company, it’s founder and its
team.
 Use it as a management tool
and road map for growth
 Use it to measure progress
over time in achieving
projected goals and objectives

#3 Myth: Business plans
should be as detailed and
slick as possible.
 REALITY: Your reader will not
have the time to review
hundreds of pages of text. The
plan must be concise, well-
written and when used to seek
funding should focus on the
lender's or investor's principal
areas of concern. Do not clutter
it with irrelevant information.

 Although a Business Plan ought
to be presented professionally,
an overly lavish presentation can
have the opposite effect –
substance over style wins
everytime
 Interestingly, business plans
prepared in Powerpoint can be
very effective –more later!
should be as detailed and
slick as possible.

should emphasize ideas and
concepts, not people.
 REALITY: Many entrepreneurs fear that
if the success of a company depends
too heavily on any specific person, it
can be a negative thing.
 Although this is partially true, investors
prefer to invest in a company that has
great people and only a good concept,
rather than one with a great concept
and a entrepreneurial team.
 People buy people but so many
business plans are bland and fail to
capture the personality and spirit of the
promoter – write with passion, that
same passion that keeps you craving
entrepreneurial success.

#5 myth: only the founding entrepreneur
should prepare the business plan.
 REALITY: Most entrepreneurs are highly skilled
in a particular profession or area of business
development/management. This does not
mean they necessarily possess the ability to
prepare a Business Plan!
 Ideally, the Business Plan should be developed
by the founder but failing this, outside
mentors and/or qualified experts should be
sought.
 The entrepreneur must have true ownership of
the plan and be in a position to defend and
champion the assumptions in it.

#6 myth: Optimism should
prevail over realisam.
 REALITY: The Business Plan should
demonstrate the enthusiasm of the founders
of the company as well as generate
excitement in the reader; however, it should
be credible and accurate. If being used to
seek funding, investors will want to know all
of the company's strengths and its
weaknesses. Previous failures should be
tackled head on – admit the failure, explain
the reasons why and what will be done
differently second time around.
 As a general rule, investors will feel more
comfortable investing in someone who has
learned from previous business failures
rather than a person who has never
managed a company.

As the document that tells the company's story, the Business
Plan also helps shape and modify the company's Business
Model, the elements of which will be driven by the answers to
the following questions:
 Who are we? ( the Founder and the Team – if you are a sole
entrepreneur, this team description should outline the skills and
competencies of your external advisory team i.e. accountant, mentor,
marketing, quality assurance and IT subcontractors etc )
 Past business experience (What other business experiences, both
positive and negative have led to this point and this business idea?)
 What are we trying to do? (Mission)
 What problem do we solve? (Faster/Better/Easier/Cheaper) Why can
we do it more profitably?
 How are we going to get it done? (Operations)

 What market research have we done to be sure that people will buy
this product or service at this price ? (Substantiation)
 How do we reach our customers? How do we obtain our initial
customers/gain revenue? Which are the easiest to reach? What are the
target customers' decision-making processes?
(Sales/Marketing/Distribution Channel)
 Who else is doing this? What relationships do they currently have in
place that will need to be terminated for people to start doing business
with us? (Competition/Competitive Analysis)
EXERCISE 1 : Review your old/failed business plan, did it answer these
questions?? Make notes of weaknesses in the plan – the benefit from hindsight.

 Do we truly modify the way business is being done in our industry (as
a change agent) or is this more of a fad or a trend? (Market
Trends/First Mover Advantage (FMA)
 Are these targeted customer relationships profitable? How do we
make money? (Business Model)
 What do we need to accomplish our goals? (Budget/Resources)
 When are we profitable? (Breakeven/Timetable)
EXERCISE 2: Write your new answers to these questions, based on
your new business idea and learning last time around.

Be very mindful of the variables affecting
Business Plan Implementation –
 Demand for the company's products and services
 Your ability to scale
 Your ability to develop, introduce and market new products and
enhancements to existing products on a timely basis
 Changes in the company's pricing policies and business model and/or
those of its competitors
 Ability to expand the company's sales and marketing operations,
including hiring additional sales personnel

Be very mindful of the variables affecting
Business Plan Implementation –
EXERCISE 3 –
Group discussion, can you plan for these?
 Success in maintaining and enhancing existing relationships and
developing new relationships with strategic partners
 Ability to control costs
 General economic factors, including an economic slowdown or
recession.

The 3 Most Important Things Investors
look for in a Winning Business Plan…
Click to watch video: https://youtu.be/hludN2e33TY
EXERCISE 4: Watch
this video from Evan Carmichael,
entrepreneur advocate and
former venture capitalist. He talks
about the three main things
investors want are concerned
with in your business plan:
1) Executive Summary
2) Management Team
3) Financials

Improving your Business Plan -
Second Time Around: Writing a
compelling Executive Summary
The key components that should be part of your executive summary:
1. The Grab - You should lead with the most compelling statement of why
you have a really big idea. You need to get your reader to think, “Wow!”
This sentence (or two) sets the tone for the rest of the executive
summary. Usually, this is a concise statement of the unique solution
you have developed to a real (and not perceived) problem.
It should be direct and specific, not abstract and conceptual. If you
can drop some impressive numbers ad names in the first paragraph
you should—world-class advisors, companies you are already
working with, early market success.
Source: http://www.garage.com/resources/writing-a-compelling-executive-summary/

Writing a compelling
Executive Summary
2. The Problem - You need to make
it clear that there is a big, important
problem (it’s real, it’s current or
emerging) that you are going to
solve, or opportunity you are going
to exploit. In this context you are
establishing your Value Proposition -
there is enormous pain and
opportunity out there, and you are
going to increase revenues, reduce
costs, increase speed, expand reach,
eliminate inefficiency, increase
effectiveness etc.

Executive Summary
3. The Solution
What specifically are you offering
and to whom? Product, service,
combination? Use commonly used
terms to state concretely what your
business does to respond to the
problem you’ve identified. Avoid
acronyms.
Clarify…
 where you fit in the value chain
 Your route to market
 who do you work with?
Share if you have customers and
revenues as yet or make it very clear
when you will.

4. The Opportunity
Spend a few more sentences
providing a basic market profile, size
(how many people or companies),
worth, segments and growth and
dynamic - how fast is the growth,
and what is driving the segment?
Executive Summary

5. Your Competitive Advantage
No matter what you might think,
you have competition. So,
understand what your real,
sustainable competitive advantage
is, and state it clearly.
Do not claim that your key
competitive asset is your “first
mover advantage.” It is not strong
enough. You need to articulate
your unique benefits and
advantages. Be succient.
Executive Summary

Executive Summary
6. The Model
 How specifically are you going to
generate revenues, and from
whom?
 Why is your model leverageable
and scalable?
 Why will it be capital efficient?
 What are the critical metrics on
which you will be evaluated—
customers, units, revenues,
margin? Whatever it is, what
levels will you reach within three
to five years?

7. The Team
Why are you and your team uniquely
qualified to win? Don’t just
regurgitate a shortened form of your
CV, explain why the background of
each team member fits. Give the
reader an accurate sense of who you
are and what you have done to this
point (including lessons learnt from
previous businesses), to establish
expertise and credibility, and to qualify
your experience and background. All
of these elements combine to develop
trust in you and your business idea.
Repeat this for all core team members
– internal and external.
Executive Summary

8. The Promise
Your Summary Financial
Projections should clearly show
that this is a worthy and lucrative
plan. If your figures are not
believable, then all of your work is
futile.
You should show three to five
years of revenues, expenses,
losses/profits, cash, employment
headcount, number of customers
and units shipped each year.
Executive Summary

9. The Ask
If you are seeking investment from
external sources (and more of us will),
this is the amount of funding you are
asking for now. This should generally
be the minimum amount of equity you
need to reach the next major
milestone. If you expect to need to
raise more funding later, make that
clear, and state the expected amount.
Executive Summary

Executive
Summary Length
 You should be able to do all this
in six to eight paragraphs,
possibly a few more if there is a
particular point that needs
emphasis.
 You should be able to make each
point in just two or three simple,
clear, specific sentences.
 You might be able to get this on
to one page, but most likely this
means your executive summary
will be about two pages; worst
case, maybe three.

Business Plan Formats
 While we have brought you through the format of a strong Executive
Summary, the rest of the business plan should support and provide the
detail behind each of the headings
 While there are thousands of business plan templates available – most
of them are weak! Please DO NOT use bland templates, they will not
do you justice. Take their headings and add your own unique spark.
 One of the new approaches that works is Business Plans created in
Powerpoint. Typically used in presentations for investors, they can even
replace the need for a wordier and perhaps less succinct plan
 Use the 10–20–30 rule: 10 slides, 20 minutes and a minimum 30-point
font.

And now to turn all
of that on it’s head!
A new way?
A more realistic way?

Experimentation, a
fresh approach to
business planning?
Testing the waters is often the
safest and cleverest thing..

How do business planning and
experimentation differ?
Launching a new enterprise has always been a hit-or-miss proposition.
Steve Blank, is a Silicon Valley serial-entrepreneur and academician -
‘According to the decades-old formula, you write a business plan, pitch it
to investors, assemble a team, introduce a product, and start selling as
hard as you can.
And somewhere in this sequence of events, you’ll probably suffer a fatal
setback. The odds are not with you: As research by Harvard Business
School’s Shikhar Ghosh shows, 75% of all start-ups fail’.
Source: Steve Blank

In some sectors, experimentation is already a way of life.
Experimentation is more productive than planning and is closely aligned
to the Lean Start Up approach which can make the process of starting a
company less risky.
The “lean start-up” methodology favours experimentation over
elaborate planning, customer feedback over intuition, and iterative
design over traditional “big design up front” development.
Its practice is spreading and lean start ups are turning conventional
wisdom about entrepreneurship on its head. New ventures of all kinds
are attempting to improve their chances of success by following its
principles of failing fast and continually learning.
Source: Steve Blank

In some sectors, experimentation is already a way of life. Strategyzer takes
a fascinating look at how attitudes, processes, tools, and other
approaches differ in a business planning environment versus an
experimentation environment. Think it through, read the tables that
follow carefully, this stuff makes sense!
Source: http://blog.strategyzer.com/posts/2016/2/1/the-difference-between-business-planning-experimenation

We know
Our customers & partners know
BUSINESS PLANNING
ATTITUDE
EXPERIMENTATION
ATTITUDE
VS

BUSINESS PLANNING
TOOLS
EXPERIMENTATION
TOOLS
VS
The Business Plan
Business Model & Value Proposition Canvas

BUSINESS PLANNING
PROCESS
EXPERIMENTATION
PROCESS
VS
Planning
Customer Development

BUSINESS PLANNING
“WHERE”
EXPERIMENTATION
“WHERE”
VS
Inside the building
Outside the building

BUSINESS PLANNING
FOCUS
EXPERIMENTATION
FOCUS
VS
Execution of a plan
Experimentation & learning

BUSINESS PLANNING
FAILURE
EXPERIMENTATION
FAILURE
VS Avoided
Embraced to learn and improve

BUSINESS PLANNING
UNCERTAINTY
EXPERIMENTATION
UNCERTAINTY
VS Masked via detailed plan
Acknowledged & reduced via experiments

BUSINESS PLANNING
NUMBERS
EXPERIMENTATION
NUMBERS
VS Assumptions
Evidence based

What Lean
Start-Ups Do
Differently?
Source: Steve Blank
The founders of lean
start-ups don’t begin
with a business plan;
they begin with the
search for a business
model. Only after quick
rounds of
experimentation and
feedback they adopt a
model that works that is
based on execution.
Measured
Operates on complete data
Accounting
Income statement, balance sheet,cash
flowstatement
Departments byfunction
Hire for experience and ability toexecute
ProductManagement
Prepare offering for market followinga
Linear step-by-steppaln
Business Plan
Implementation-driven
TraditionalLean
Strategy
Business Model
Hypothesis-driven
New-Product Process
CustomerDevelopment
Get out of the office and testhypothesis
Engineering
AgileDevelopment
Build the product iteratively and
incrementally
Organization
Customer and Agile DevelopmentTeams
Hire for learning, nimbleness andspeed
Financial Reporting
Metrics ThatMatter
Customer acquisition cost, lifetime
customer value,churn,viralness
Failure
Expected
Fix by iterating on ideas and pivoting away
from ones that don’twork
Speed
Rapid
Operates on good-enoughdata
Exception
Fix by firingexecutives
Agile or WaterfallDevelopment
Build the product iteratively, or fully specify
the product before buildingit

What role can experimentation play
in your business planning?
Steve Blank, a Silicon Valley serial-entrepreneur and academician,
provides interesting insights and theories into lean start-up techniques.
He blogs at www.steveblank.com.

The Fallacy of the Perfect Business Plan
‘According to conventional wisdom, the first thing every founder must do is
create a business plan—a static document that describes the size of an
opportunity, the problem to be solved, and the solution that the new
venture will provide. Typically it includes a five-year forecast for income,
profits, and cash flow. A business plan is essentially a research exercise
written in isolation at a desk before an entrepreneur has even begun to
build a product. The assumption is that it’s possible to figure out most of
the unknowns of a business in advance, before you raise money and
actually execute the idea’.
After many decades of using this approach, Steve contends we have
learned three things:

1. Business plans rarely survive first contact with customers. As the boxer
Mike Tyson once said about his opponents’ prefight strategies:
“Everybody has a plan until they get punched in the mouth.”
2. No one besides venture capitalists and the late Soviet Union requires
five-year plans to forecast complete unknowns. These plans are
generally fiction, and dreaming them up is almost always a waste of
time.
3. Start-ups are not smaller versions of large companies. They do not
unfold in accordance with master plans. The ones that ultimately
succeed go quickly from failure to failure, all the while adapting,
iterating on, and improving their initial ideas as they continually learn
from customers.

Many restart entrepreneurs will relate to this. Hence, the lean
definition of a start-up: A temporary organization designed to search for
a repeatable and scalable business model.

The lean method has
three key principles:
1 BUSINESS MODEL CANVAS
Rather than engaging in months
of planning and research,
entrepreneurs accept that all
they have on day one is a series
of untested hypotheses- basically,
good guesses. So instead of
writing an intricate business plan,
founders summarize their
hypotheses in a framework called
a business model canvas.

Principle 1 Business Model Canvas
Business Model Canvas - a
table of how a company
creates value for itself and
its customers. The business
model canvas lets you look
at all nine building blocks of
your business on one page.
Each component of the
business model contains a
series of hypotheses that
you need to test. EXERCISE 5: Download the canvas template
and create your own Business Model Canvas.
Source: www.businessmodelgeneration.com/canvas. Canvas concept developed by Alexander
Osterwalder and Yves Pigneur

Principle 2 Customer Development
2) Lean start-ups use a “get out of the building” approach called customer
development to test their hypotheses. They go out and ask potential
users, purchasers, and partners for feedback on all elements of the
business model, including product features, pricing, distribution channels,
and affordable customer acquisition strategies.
The emphasis is on nimbleness and speed: New ventures rapidly assemble
minimum viable products and immediately elicit customer feedback.
Then, using customers’ input to revise their assumptions, they start the
cycle over again, testing redesigned offerings and making further small
adjustments (iterations) or more substantive ones (pivots) to ideas that
aren’t working.

Principle 2 Customer Development
1
CUSTOMER
DISCOVERY
2
CUSTOMER
VALIDATION
PIVOT
EXECUTION
3
CUSTOMER
CREATIONS
4
COMPANY
BUILDING
SEARCH

3) Lean start-ups practice something
called agile development, which
originated in the software industry.
Agile development works hand-in-
hand with customer development.
Unlike typical long product
development cycles that presuppose
knowledge of customers’ problems
and product needs, agile
development eliminates wasted
time and resources by developing
the product iteratively and
incrementally. It’s the process by
which start-ups create the minimum
viable products they test.
Principle 2 Customer
Development

In contrast to traditional product
development, in which each stage
occurs in linear order and lasts for
months, agile development builds
products in short, repeated
cycles.
A start-up produces a “minimum
viable product”- containing only
critical features - gathers
feedback on it from customers,
and then starts over with a
revised minimum viable product.

Agile development embraces the
“test and learn” approach. This
goes beyond market research and
uses sales to generate knowledge
and feedback.

Agile Development
Crowdfunding platforms have made it
much easier to measure market demand
for a product or service. By describing
the product's features and offering it to
the masses, entrepreneurs can get an
idea of how the market outside of the
crowdfunding platform would respond.
Also, the instantaneous feedback and
questions can help start-ups uncover
potential issues and allow them to
correct them before scaling

New approaches
 The lean start-up methodology holds that in most industries
customer feedback matters more than secrecy and that constant
feedback yields better results.
 Across Europe, organisations like Startup Weekend introduce the
lean method to hundreds of prospective entrepreneurs at a time. At
such gatherings a roomful of start-up teams go through half a dozen
potential product ideas in a matter of hours and develop the entire
business model over a weekend.

New approaches
FURTHER READING ON THE TOPIC
Steve Banks 2003 -The Four Steps to the Epiphany
Eric Ries 2011 The Lean Startup
Bob Dorf and Steve Banks 2012 summarized the lean techniques in a
step-by-step handbook called The Startup Owner’s Manual.

Importance of building a
resilient business.
 Would your business be able to cope if your
biggest client stopped working with you, if
you got ill or a key employee walked out ?
 The global recession has had a devastating
impact on small businesses across the EU
and the wider economy, and now the
challenge of Brexit, it is a strong reminder
of the importance of building resilience into
your business model to limit the effect of
any major risk to your organisation.
 Entrepreneurs need to spread the risk
across clients, hire smart people that can
tackle hard problems and plan for the
unexpected
Source: https://www.theguardian.com/small-business-network/kia-fleet-partner-
zone/2016/aug/01/how-to-build-a-resilient-business-brexit

Building a Strong Resilient Business -
Spreading the risk
 Risk is an inherent part of starting a new
business. One of the reasons why a business
should be concerned with the levels of risk it is
exposed to is that being reliant on a single
market or group of similar products means that
a downturn in that area can have a significant
negative effect on the whole operation.
 Pinning all your hopes on one market needs to
be carefully considered as a strategy.
Diversifying your income streams protects you
against major losses during downturns in one
market and allow you to financially benefit
from the upswings in another
Don’t put all your
eggs in one basket!

Spreading the risk
with Diversification
 Spread the risk by diversifying -
when you add new products to
your portfolio or move into new
markets, you can access previously
untapped customer markets.
 A well considered business model
should contain ideas for
diversification, other areas which
can be added to the initial
operations once they become
established.

Spreading the risk - Diversifying your
Income Stream with Passive Income!
Some may pay you for doing something that you love (active), while
others can provide income for you without your having to do much of
anything at all (passive).
Passive income is a recurring revenue stream that does not involve
constant hands-on work from it’s creator. A business owner can create
passive income, only after investing time and hard work upfront to create
valuable products and those automated systems to keep it running.
Source: https://convertkit.com/passive-income-myths/

Some Passive
Income Ideas…
 Ebook - Turn failure
into success. How about
creating and selling an ebook on
how to turn a business around
from the brink of bankruptcy or
your compelling restart story.
 Sell your expertise - Figure out
what knowledge, experience,
ability or you have that others
will value and might pay you for.
Know that - you and your
personality differentiate your
value from that of every other
person on earth. Many people
will resonate with you (and your
style) better than they will with
someone else offering value
that's similar or even the same.

Building a Strong
Resilient Business - Making
Strategic Alliances
Strategic alliances can be a smart
growth formula and are relevant to
business owners of all sizes and all
industries..
Source: https://www.powerlinx.com/blog/what-are-strategic-alliances/

Building a Strong
Resilient Business - Making
Strategic Alliances
What are a strategic alliances?
Strategic alliances are agreements for
cooperation or collaboration between
businesses, with the ultimate result
being a synergy where each party will
benefit more from the alliance than
from individual efforts alone.
Strategic alliances allow each partner
to pool resources while concentrating
on their competitive advantage and
simultaneously growing their
respective businesses.

Benefits of
Strategic Alliances…
 Knowledge and Resource
Sharing – can increase speed to
market, reduce operational
complexity and increase cost
efficiency
 Opportunities for Growth – the
expertise and support of an
external partner often bring new
growth
 Access to Target Markets – the
right strategic partner may
provide access to new market
including export!

Benefits of
Strategic Alliances…
 Economies of Scale - When
companies pool their resources
and allow each other to increase
manufacturing and distribution
capabilities, economies of scale
can be achieved

Strategic Alliances Tips
– Seeking Allies
Successfully …
 Plan first, pick later. You should
know exactly what traits your ally
needs before you start looking for
one. What are your skill or
resources gaps?
 Network. The most likely place to
find an ally is among customers,
suppliers, competitors and other
professional associates.
 Look for synergy. A combination of
allies should add up to more than
either does separately.
Source: https://www.entrepreneur.com/article/81412

Strategic Alliances Tips
– Seeking Allies
Successfully …
 Listen to your gut. Check a
potential ally's credit rating,
financial reports and reputation in
the industry, trust your feelings
when it comes to the final
decision.
 Identify benefits, including
synergistic effects. Make sure the
benefit isn't lopsided so that no
one will feel he or she is being
taken advantage of.
 Set precise goals for what you
want to accomplish. Without goals,
an alliance can flounder.Source: https://www.entrepreneur.com/article/81412

Business
Planning (with
hindsight) for
tough times
and crises
 Review, review, review! Surviving hard
times returning full circle to the
fundamental principles of business. This
can include: doing regular financial checks,
reviewing and freshening your sales and
marketing approach, and engaging with
customer to get their regular insights.
Remember that these are just some of the
fundamentals that need to be re-learned
and re-visited.
 Cut and downsize carefully - When hard
times hit cost-cutting needs to be
implemented with the precision and speed.
Remember that if you cut too deep, your
business may never recover. If you cut too
shallow, cash flow problems could force
you to the back of the unemployment line.
You need to exercise care and judgment, in
determining what and where to cut, and by
how much.

Business Planning (with hindsight) for
tough times and crises
 Always cement your relationship with your existing customers: In an
ironic way, when times are tough, many businesses actually stop
servicing their existing and loyal customers. This is detrimental.
 A depressed mood descends on the business and this in turn affects
customer service. That's why businesses in this negative space lose far
more customers than they should, which of course only makes matters
worse.
 From the beginning of your new restart business, build bulletproof
relationships with each and every customer you are fortunate enough
to have. You need communicate with them, engage them, find out
what is going on in their world and most importantly of all, becoming
very clear on what your customers need from you.
Source: https://www.inc.com/andrew-griffiths/11-ways-to-get-through-any-tough-time-in-business.html

Increase focus on low budget marketing - In
difficult times (especially recessions), many
business owners panic and the marketing
function of a business is the first to get cut.
However, with less advertising and marketing,
the funnel of incoming prospects is reduced,
creating even more revenue decreases, and
setting up a vicious cycle.
This can be a fatal mistake for your business.
The key to success in hard times isn't to reduce
your marketing activities, but to replace them
with low-budget marketing.
Low-budget marketing can include such things
as: digital marketing, PR, networking, public
speaking, etc. Your marketing should not be a
reflection of the limitations of your budget,
only your creativity.

Source:http://businessknowledgesource.com/smallbusiness/how_to_help_your_small_business_survive_tough_time
s_030974.html
Build a strong business network from
the start! Connect with your peers
- Remember that hard times in the form of
recessions or industry shakeouts, impact
more than just your business.
Experienced and long lasting business owners
will have built a network of trusted industry
colleagues who will share different insights and
new agile opportunities.
Connect with industry trade groups or
professional peer groups, to extract the
knowledge and best practices that should be
applied during a business slump.

Importance of a mentor
 Find someone to mentor you
through the challenging times - If
you have someone who you admire
and respect and who you know has
been through a similar challenge,
why not reach out and ask for help.
Be totally honest with them, tell
them the problem, exactly how bad
it is and what help you need. They
can't be expected to take on your
problem, but having them to talk
to, and to offer advice on how they
got through their own challenges
could just prove invaluable.

Importance of a mentor
 If there isn’t anyone in your
network link in with local
Enterprise supports –
Ireland: Local Enterprise Offices

Making the Most of Business Mentoring
The right business mentor can have a profound and
fundamental impact on your business, particularly
for those at the early stages of an enterprise and
aiming to have high rates of growth.
There are five ways to make the most of business
mentoring:
1. Understand why you need or want this mentor.
Usually, the mentor is someone whose knowledge
and/or experience exceeds your own to such an
extent that their input can have a substantive
positive impact on your business´ performance
and your ability to run it.

2. Know where the issues lie.
Although the mentor should be able to indicate
some of the areas that you might want to focus on,
you are in the best position to understand your
business and the goals that you want to achieve.
The mentor is there to help guide you toward these
goals.
2. Have the right attitude.
You need to enter this relationship with the right
mindset and attitude. See your mentor as someone
who is trying to help you carry your business
forward, and has valuable advice to give you.

4. Know how your mentor can add value.
A mentor cannot be “ all things to all people”
and to make the most of their input, you
need to understand where their expertise lie
and find ways that these are applicable to
growing your business.
5. Find the time.
It’s easy to get caught up in the day to day
challenges of running your own business and
putting bigger challenges on the back burner.
The mentor is there to help you to develop
and achieve your longer term goals. You
should put everything out there and explore
creatively with your mentor.

Exercise : Video Case Study
Dan O’Connor, Brona
Chocolates Ltd
Dan O’Connor from Co. Kerry,
Ireland ran a construction company.
In 2005,he was building 200 houses
per year, turnover of over €1 million
and drove a top of range Mercedes.
Then the recession hit and some bad
investments made.
His business came to a halt. In this
case study Dan share his journey in
setting up Brona Chocolates. Dan will
speak of his journey in restarting
from running a pub and a sweet
shop. He now sells his award
winning chocolate bars to over 140
retail customers across Ireland

Dan O’Connor – key learning snippets
o Starting again – how hard can it be?
o The key is finding something you LOVE
o Now at a sustainable level. What is a sustainable level ? Not having to
tell any lies
o Failure is a misnomer. Every business have failures, the stronger ones
survive
o Entrepreneurship, what does it take?
o Hard work and neck, a mindset that is different for everybody
o It’s a culture thing and not for everybody. A man in Monaghan had 3
children in university and his neighbours felt sorry for him that none
of them were smart enough to start their own business !

What have I learned?
o Cash is King. Use your resources very carefully. I have invested
€200,000 in Brona and at no stage have I had €10,000 in the bank
o Be patient
o Be a little ruthless
o Your children can’t eat loyalty and being noble
o Look after yourself a little bit
o Great outside resources available –a supportive environment – utilise
them!

EXERCISE: Watch Dan O’Connor Case Study
https://www.youtube.com/watch?v=-KFVnLnpgpA

Module 3 business_planning

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