The "W" in S.W.O.T.

If you've read a business book or two, especially one about writing a business plan, then hopefully you've come across the concept of "S.W.O.T." analysis. S.W.O.T stands for "Strengths" "Weaknesses" "Opportunities" and "Threats". This is something not only to include in your business plan, but an exercise you should do periodically for yourself.

Today we're going to talk about "Weaknesses."

There's two questions to answer here: 1) What are your Weaknesses? and 2) What are your business's Weaknesses?

The second one is probably easier - you're not talking about yourself and being honest about someone else or some other entity is always easier. Examples of Weaknesses in your business could be: poor location; unable to keep employees long term; under-capitalized, etc.

Now let's look at that first question: What are your Weaknesses? You've probably been asked this in an interview once or twice, and you've probably given some answer like: "Well, I'm a perfectionist!" Ugh. That's not a good answer in an interview, and certainly not an honest one here. (Unless your real answer is more like: "I'm unable to complete a project because I focus on too many of the minute details. This prevents me from finishing what I started and moving on to new projects." This is a real Weakness, and something that you really need to work on!)

Once you've identified your Weaknesses, you need to come up with a plan to work on them. In the case of the business, can you relocate? Can you identify why employees don't stick around and make some changes? Are you in a position to seek more capital?

Your own Weaknesses deserve the same attention. In the example above, maybe you need to try setting a deadline for yourself and tell yourself that whatever state of affairs a project is in, it's done and your moving on. Practice this on smaller projects first to build up your comfort level.

Stay tuned... in the next post I'll tell you about one of my own Weaknesses that recently bit me in the tush and how I'm trying to work on it!

Speaking of plans... where's all that data coming from?

So you've started writing your business plan and you've hit the financial section and said to yourself "Eek! Where's this data going to come from? Is selling this much in my first year or five years realistic? How is any bank or investor going to believe my numbers? "

When I wrote the business plan for The Pot & Bead, I got a little lucky - but I also did a ton of research. There is an active trade association of paint your own pottery studios, and through them, there are several new business consultants. I consulted with another studio owner located many states away from where I'd be located and she was willing to share her financial data with me as part of her consulting service. Because her store was in a similar demographic to mine (similar average household income, similar density of people), the information was useful and I was able to make a case for having realistic numbers. In fact, my business plan was called "realistically conservative".

This doesn't mean you can just walk into any ol' store similar to yours, ask to see the owner and ask him or her for financial data. I would never ever hand over any of my numbers to a complete stranger and most people would find it rude to ask/be asked. Just saying your planning on opening up a store a long way away isn't going to work - LOTS of business owners I know have been flat out lied to about that.

So what can you do? Here are a few ideas:

1) You still might be able to meet a business owner in a similar situation through your own trade association. If not, ask people who know people. Can someone you know introduce you to someone in a different location? Does your cousin and her husband who live on the other side of the country know someone?

2) http://bizstats.com - in particular, look at their "sales per square foot".

3) The US Census has a whole division devoted to "company statistics": http://www.census.gov/csd/ I recently used this website to research the percentage of growth of Hispanic owned businesses in the US.

4) Call up your potential suppliers or manufacturers. They are a great source of info for your industry. Manufacturers want you to be able to sell their product so they're often willing to give you information and/or advice to help get you. They might know what's hot in your area, who else is carrying their product in your area and all sorts of other good information.

5) Contact magazine publishers. Often, when things become popular, magazine subscriptions go up. For example, say you want to open a store just for dog owners. Call the publishers of dog magazines. They might be able to tell you that subscriptions have gone up X percent over X years - which will help you make your case for the potential popularity of your store or service. They also might be able to break down increases in subscriptions by region.

6) Landlords. In order to attract new tenants, landlords often have statistics and numbers for their properties. Usually it's just demographic information (which you need, too), but if you ask, they might be able to tell you how sales have been for their tenants in general. If they're a large company, ask if they'll put you in touch with a business owner in a similar business, but far away location.

Good luck!

(Note: Sorry for the long delay between posts. Retail is a seasonal business and occasionally takes over your life completely... At The Pot & Bead, we just started summer camp and 3 of my employees graduated from high school last week!)

"A plan? I don't even have a pla." **

Interesting article posted to BusinessWeek.com today:

"Rethinking How Women Build Businesses"

It's a worthy read (for both women and men). One interesting part that stood out:

"...and when you talk about entrepreneurship there is [usually] one way to start a business: Start with a business plan and raise money. It's a very structured approach. We talk about just starting and proving the concept first.
Women often start their businesses without a plan. Women are good at bootstrapping and figuring it out as they go along. "

I find this particularly interesting because if you've spoken with me or have read other parts of this blog, you know that I'm a huge supporter of having a business plan. I'm hoping that no one who read this said to themselves "Oh goodie! I can rent some space, get some product to sell and Boom! I'll have a business!" That's not the point.

The point is (and I've said this before, too) that a full-blown 60-page color-glossy super professional business plan is not needed for everyone who plans to start a business.

Something written down is needed. Something. Anything. The purpose is to solidify for yourself what you're doing - what is your business? what are your goals for the next year? expenses for the next year? where will your find your primary customers? Answering a few key questions like that is all many people really need to get going.

So get going!

[** title is a reference to one of the first episodes ever of "Friends". Kudos to anyone who caught that. :) ]

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Starting with nothing...

Last night I was asked to give a short presentation on my business as part of a panel of "Women In Business." The following is a short except:

When I started The Pot & Bead I started from nothing.

What I didn't have:

• Formal business background - I'm an engineer. I don't have an MBA, I had never taken a business class and I didn't have any prior experience managing a business or a retail store. My experience in retail was pretty limited to working the cash register at a supermarket when I was in high school.
• Hidden stash of cash - I didn't start my business with any savings. In fact, I had a bit of debt (house, car, student loans, credit cards)
• Experience with the product - Did I mention I was an engineer? I'm not an artist, I didn't know about clay or painting or anything related.

What I did have:

• Books on how to write business plans - A business plan was necessary to acquire financing for the business. There are many good books out there on how to write a business plan and what to put in it.
• Ideas - Opening up a paint your own pottery studio wasn't my first idea or thought. I went through several, researching, learning, and trying to write a business plan. The idea for The Pot & Bead was the one that gelled.
• Resources - There are a wealth of resources out there for anyone who wants to start a business. I am particularly fond of my local Small Business Development Center that holds seminars on starting a business. They also will review your business plan.
• Determination - This, of course, was the key. I spent a great deal of time learning, researching and planning. I wanted to be in business for myself. I was determined to make it happen.

And I did. :) If you have a desire and determination, you can do it, too.

A good business begins with a good plan

I receive a lot emails from people who read this blog and tell me that they are almost ready to start their business, just starting to think about it or they are someplace in between. So today, I thought we'd discuss that monster of a task that needs to get done at the very, very beginning: Your business plan.

If you've written your business plan already, fantastic!

If you haven't, why not? What's holding you back?

Is it that you think you lack time? Well, if you can't make the time to work on a business plan, then you're not going to have the time to plan the business. :) Carve out the time. It might 30 minutes before bed. Or maybe set the alarm to wake up 30 minutes earlier in the morning every day until it's done.

Is it that you don't know the first thing about business plans? That's an easy fix... there are dozens of books out there on business plans. If you are truly starting from scratch, then start with a book such as "Business plans for dummies" (I have it, it's one that I used when writing my business plan).

Is it that you started, but it's not coming together in the way you hoped? Ah ha! This is most interesting. This happened to me quite a bit when writing my business planS. Yes, that's plans with an "S". Before starting my paint your own pottery studio, I had thought of other kinds of business ideas I'd like to try. When I had an idea, I would start writing the plan. If it didn't come together, it was because it really wasn't right. It wasn't right for me at that time. For example, while lots of folks have businesses they run buying properties and acting as landlord or flipping them, it just wasn't coming together for me when I started outlining and writing the plan. It wasn't right. I moved on and went through about 6 different ideas before thinking about my retail store. The business plan for The Pot and Bead just fell into place so easily for me at that time... that's how I knew it was right.

Here is an interesting resource for you: For a while, I ran a second business as a consultant helping people get their business plans together. I'm not really a consultant at heart, so that business, Now Plan This, only lasted a year or so. I shut it down, but I still have one of the tools I created. It's a business plan questionnaire that I'm now giving out for free:

Download the PDF business questionnaire.

It's similar to a business plan template, but instead of headings of sections to fill in, it asks the question for you to answer.

The theory is, if you're starting a business, you darn tootin' should be able to answer these questions. If you can't answer the questions, that might be a red flag before you get started in really opening the business. Note: since Now Plan This no longer exists, this is not a form to submit back to me or anyone else. It's provided free for your reference. However, if you have a specific question, please don't hesitate to ask.

More about the early days of getting The Pot and Bead into existence can be found in my book: Cute Little Store.

Thanks for reading!

Checklist for opening a retail store...

I've had many requests for this kind of a list, so here goes. It's based on my experience and anecdotes of other small business owners I know. If you've had experience in this area, please feel free to comment or add your own ideas.

Here's the checklist. It's broken down roughly into 3 sections, and can be followed in the order presented.

1 - Research and Planning
1a) Create a Business Plan. This is a must. It does not have to be a 50-page polished fancy document. It can be as simple as listing your main products and services, your mission and philosophy and some other details. But it absolutely does need to exist.
1b) Create a Financial plan. This is also a must. It can be included as part of your business plan. You have to have an idea of what your expenses will be and a conservative guesstimate of what your income will be. This can't be in your head, it needs to be written down.
1c) Create a Marketing Plan. This can also be part of your business plan. How are potential customers going to know about your business when you start/open? At a minimum, this will be a simple list of things you will do (i.e., obtain a website, attend related networking events, post flyers around town, etc)

2 - Money and Space
2a) Find your space and secure a lease. If you're a retail store, by definition, you'll need space. Most landlords will also require a business plan, by the way.
2b) Secure funding. You might have money in the bank, or you might need a loan. By the time you've completed steps 1 and 1a, you'll know how much you'll need to get through the first 1-2 years. Oh... if you need to seek funding through a bank loan, most will require a business plan. Good thing you've already completed that step.

3 - Get ready to open
3a) Design your store. This might have been done as part of securing your lease. Some landlords will require that you submit a "site plan" for your store during the leasing process. But now you'll need to obtain all your furniture and fixtures, point of sale system, extra lighting and anything else you need.
3b) Purchase inventory. Chances are you'll have one or more regular suppliers so you'll need to arrange with them your first and probably largest shipment ever.
3c) Create operational procedures. This was one of the last things I did before opening, and my procedures are always in need of tweaking, but it was good to know what to do when we opened and was good to have something ready for when I hired my first employees.
3d) Hire some employees. I opened The Pot and Bead knowing that I wasn't going to be in the store at all times, so I started the hiring process right away. Lots of businesses, if they can afford to, hire and train some key employees before opening their doors. You'll need to decide for yourself if this is right for your business.

Now, before I opened, I had a "To-Do" checklist that was more detailed than above and was very specific to my situation - the above list is a simple overview, not meant to be 100% comprehensive. I encourage you to take this as a starting point, and expand each item to create your own detailed list. (Note: I'm in the process of writing the sequel to Cute Little Store and am considering including a more detailed checklist there.)

If you're still thinking about starting a retail business and haven't read my book yet, pick up a copy of Cute Little Store today. It's an easy read and will give you a feel for what it's like to leave the safety of the career you've been in for so long and try something else. I made a lot of mistakes in those first couple of years, which I write about, so you don't have to (make those mistakes, that is).

:)