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Why Our Favorite Questions Keep Us On The Treadmill

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The Four Short-term Q’s

There are six basic questions we ask in business, but we only love the first four. We ask those four all the time. We’re consumed with them:

What – What do we sell?
Who – Who do we sell it to? (or for English majors – to whom do we sell it?)
How – How do we market it?
Where – Where do we sell it?
…or other versions of the four.

We use those four questions to create, innovate, clarify, repeat the same activity every day, stall and do nothing, pay the mortgage, and in general, to run our business.

The Four Treadmill Questions
But there is something inherently wrong with these four questions – they will never get us off the treadmill. Why? Because they are most often used to help us make money right now, and anything that focuses us on making money NOW is likely to keep us on the treadmill and make it harder to build a business down the road that makes money when we’re not around. These four questions help us a lot in the short-term, but very little or not at all in the long-term.

Why, “Why”? And When, “When”?
There are two other questions that we don’t like so much, but are a lot more helpful to growing a business in the long term:

When – The Second Least Asked, Second Most Important Question in Business
When should be asked every time you asked the first four – “When” will you… →figure out “what” to sell, “who” you sell it to, “how” you will market it, “where” you will sell it?, etc. We don’t like “when” because it holds us accountable, creates metrics that demonstrate clearly how we’re doing, and makes us work when we feel like goofing off (“sorry, got a deadline, need to keep going”).

Why – The Least Asked, Most Important Question in Business
We don’t like why at all. We don’t know how to ask it, it’s too fuzzy, it takes a lot of energy to answer, but most importantly, it doesn’t seem to make us much money right NOW. But “why” is the question that is most likely to build a business LATER that makes money when we’re not around. And the best way to build a business LATER is to ask “Why” NOW with every one of the other five questions, including “When”. (When will I do it? Why then?)

Three Whys to Every Other Question
Want to get off the treadmill? Any time you ask what, who, how, where and even when, ask why. The best habit would be to ask at least two to three “whys” to every other question. (What do I sell? Why do I sell it? Why not sell x instead?)

If you only ask the first four questions, you are likely to only make enough money to pay your mortgage. If you ask the last two, “when” and “why”, every time you ask the others, you are likely to build a business a real that makes money when you’re not around.

Get off the treadmill. Ask when and why all the time.

The Long Pole of Success

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Truth & Consequences.

A few years ago I spent a day finishing my first book, because I wanted to go to New Zealand 21 months later. If I didn’t do it that day, the trip was in jeopardy. Why? Because the Long Pole of Success is very predictable.

Imagine a mile long pole you’re holding against your stomach, and someone else is holding the other end against their stomach, and the goal is to shake hands without them having to move.

What happens if you take one step toward them? If you both keep the pole against your stomachs, a mile away they will have to take a step back. You’ll never shake hands that way. If the game is to keep the pole directly in front of you, the only way to get there is to start cutting off lengths of the pole. Cut off enough and you eventually end up where they are without them having to move.

I’ll just do it tomorrow
The Long Pole of Success illustrates why today is so important to getting to your objective months or years from now. Too often, “the future” looks far enough off that we feel we can ignore it for now and just pay attention to it later.

To finish my book I needed one solid eight hour day. On Tuesday, June 2 a few years ago, I looked at my 2-Page Strategic Plan and saw that I was supposed to be done with the chapter by May 31. The next day, Wednesday, June 3, was supposed to be a gorgeous 80 degree day and I had no appointments. Memorial Day weekend’s weather blew chunks so I was going to make up for it with golf and a bike ride on Wednesday. But now I had a choice to make – finish the book or enjoy the day.

My Business Maturity Date, with a 3 1/2 week celebration trip to New Zealand, was 21 months off. The book was one of a number of strategic things I needed to accomplish to make it to my BMD, which included taking Fridays and the last week of every month off after I hit that date.

I looked at my schedule and realized that it would be at least six weeks before I had another full day to finish the chapter. Doing it in 1-2 hour pieces just didn’t work for me – I needed to be able to focus and get it all knocked out at once or it likely wouldn’t flow well.

Cutting off a chunk of the pole
I had a Long Pole of Success decision to make. Since finishing the book was one of many strategic keys to hitting my BMD, putting off the completion of this chapter for six weeks would push back the publishing date of the book by six weeks, and potentially push back my BMD 21 months later, by that same six weeks.

To keep the BMD from moving, I had to cut off a length of the Long Pole on Wednesday and get the book done. I finished the book and the other strategic things we needed to do in order to build a business that would run while we’re on vacation (hiring people, putting processes in place, etc.). 21 months later we left for New Zealand to celebrate our BMD, on the exact day we hat targeted almost four years earlier.

Today Matters
When things seem a long way off, we don’t see much issue with putting off doing something that might just impact that seemingly far off goal. But the fact is that every time we turn today into tomorrow without completing the strategic things that will build our business, we automatically push back success by one day.

And it’s really hard to make it up later. With the pole tucked into your stomach, you can’t reach 50 yards in front of you and cut off a big chunk all at once a few months from now. The only way to do it without delaying success down the road, is to cut off small pieces regularly every week.

Success is quite predictable
The Long Pole of Success is unforgiving. Either regularly cut it off in small pieces or expect to push off success by each day that you don’t do the small and simple things that will eventually get you there. But success is actually quite predictable, if you’re doing the right thing. Chipping away at the Long Pole will very predictably get you to your goal.

Next year, will you end up where you are?
Are you making decisions based on where you are, or where you want to be? Think about the Long Pole of Success the next time you say, “I’ve got a whole year. I can do that strategic thing tomorrow.”

A Strategy is Not an Objective

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Know the Difference – Grow Your Business

There is a lot of Business Buzzword Bingo out there around these two words, but they are too important to your success to get them confused.

Strategies answer “How”
Specifically two “how” questions; “How do we make money?” and “How do we lead?” Your strategies cover how you think you’ll make money over the next one to three years.

Direct Revenue – Each way you make money should be described as a separate Direct Revenue: strategy, as long as you market and invoice for it differently. If you market furniture differently than floors or to a different audience, list these as separate Strategies for how you make money. If you invoice differently for restoration then for new construction, or to a different audience, they are separate Strategies. Sofas and chairs with different prices but that are marketed to the same audience are one Direct Revenue stream – furniture.

We have multiple Direct Revenue streams – 3to5 Clubs for business owners worldwide, books, workshops, keynotes, one2one consulting and online apps. Since your Strategies should list how you will make money for the next one to three years, we also list some things we aren’t doing yet but plan to add to our quiver over the next three years. Some businesses will have just one or two Strategies – like 1) plumbing repair and 2) new construction plumbing. Or even just one – mortgages.

Indirect Revenue – A second type of Strategy. For small and local businesses, we should largely replace the word Marketing, with the phrase Indirect Revenue. Big business spends a lot of marketing money on things like “brand recognition”. For most of us, we need to think of marketing more as Indirect Revenue. If you can’t track revenue clearly back to your marketing, think twice about doing it. You can’t afford brand recognition; your marketing should cause people to buy stuff.

How We Lead – The last kind of Strategy you need to articulate – a simple 1-2 sentences or a short list of words how you intend to lead your business. It’s very important to have a simple leadership Strategy that guides the way you make decisions.

All of this should take no more than two-thirds of a page. If you get wordy, you’ll never apply this. Complexity breeds confusion.

Objectives answer “Who”, “What” and “When”
Objectives are radically different than Strategies. Once you know how you make money and how you lead, your Objectives will put rubber on the road. Strategies are not measurable and don’t assign responsibility or concrete timelines. But Objectives should ALWAYS be measurable, assign responsibility and define exactly when they should be accomplished. Your Strategy says How you make money; your Objectives make it real.

Take each of your Strategies and attach Objectives for who owns them, what exact amounts or numbers will define success, and when you will have them done. A Strategy would say, “we make furniture”, but the corresponding Objective would be “We made 2,000 chairs in 2012 and will increase that by 50% in 2013, to 3,000 chairs. John is responsible for the marketing, Fred for the production, Sally for the etc., and we intend first to increase by 250 extra chairs produced by March 30, 2013.”

If you can’t measure it, know who owns it, and say when it will be done, it’s not an Objective. If you can, and you run your business with the intent of completing each Objective attached to each Strategy, you’re likely to be successful. Make sure you have at least one annual Objective to get you off the treadmill – “I worked xx hours a week last year, and intend to work xx hours (less) this year. I’ll be 20% of the way there in the first three months.”

A Little Bit Every Week
If I could just get business owners to set aside a couple hours a week to push their intentional Objectives forward, instead of following the Random Hope “we gotta make some money this week” plan, we would have a lot more successful businesses out there.

Your Mission is Not Your Vision

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Why you need both.

Vision and Mission are two very different things. And the smaller your business, the more you need them both. Those who have both and live by them always make more money.

Whether you think you do or not, we all run our businesses based on deeply held beliefs. The problem is we don’t do it consistently, but only when it’s convenient. The rest of the time we’re taking on clients, employees, vendors and partners based on the immediate benefit, without regard to whether there is a culture and values match or not. Six months or a year later we’re butting heads with the new staff, avoiding that troubling client, or looking for a new vendor.

Why? Because if you don’t have a clear vision for your own life or business, you’ll become part of someone else’s vision for theirs. Take on a a partner, employee or staff member with a strong direction, and it will overwhelm the weak hold you have on why you exist, where you are going and how you intend to get there. Meandering and random hope are not good business strategies. Get a grip on your vision and your mission, or expect to be pulled in every direction.

Vision = Values
Your Vision statement is for YOU, not for your customers. It is much bigger than your business, reflects your personal beliefs and values and is what would get you out of bed every morning no matter what business you were in. Your beliefs, values and principles don’t change based on your business. Your Vision statement should be the core driver behind who you hire, who you want as clients, and how you will relate your business to the world around you. In most cases, a Vision statement doesn’t tell anybody what you do, only what you believe and value as a business.

This should always be a values-based statement. It’s about your beliefs. Our vision statement for Crankset Group and 3to5 Club is “Live well by doing good.” We could be grocers and say the same thing, because it’s what gets us out of bed every morning. We can unpack that for you for three to four Guinnesses, as to how it impacts every aspect of our business.

Your vision is all about you, and what you believe. It drives you, your staff and all of your relationships forward. You may or may not share it publicly. It doesn’t matter – it’s not for your customer, but for you. Every decision, big and small, should be based on your Vision statement. Every one.

Mission = Marching Orders
Your Mission statement is radically different. It’s not about you in any way – leave yourself out of it. It’s all about your customer and the OUTCOME you expect to give them. Here’s a lousy Mission statement: “We will be the #1 pencil manufacturer with the best quality, highest profitability and the fastest growth.” NOBODY cares.

When people ask “What do you do?” they never mean it. They mean, “What can you do for ME?” When someone reads your Mission statement, they should know exactly what OUTCOME you are going to get them, not what you do.

Our Mission statement, “We provide tools for business owners to make more money in less time, get off the treadmill, and get back to the passion that brought them into business in the first place.” From that, you would never know that we build 3to5 Clubs around the world, have cloud apps, sell books, do workshops and keynote talks and have a sales development series called FasTrak. That’s because nobody cares what we do until they find out what we can do for them.

An OUTCOME is a RESULT expressed EMOTIONALLY. Your Mission statement should give some quick info about what industry you are in, but 95% of it should be about what you will do for me. If I like that potential result, I’ll ask you how you will do it. That’s your cue to talk about your capabilities, quality, growth, etc.

Do you have clients, staff or vendors you’re not happy about? Are you changing courses often? Having trouble finding that one product or service that drives your revenue and growth? It’s almost certainly because you don’t have a clear Vision or Mission statement.

Winging it has it’s consequences. Figure out what drives you (Vision) and what outcome you’re delivering (Mission) and watch your business grow.

How: the worst, most asked planning question

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How now, never later.

It’s a terrible long-range planning question, but we love to ask “HOW will we get from where we are to our three year objective?” Asking HOW ensures nothing remarkable will happen and is much more likely to lead you to disaster.

Business planning gurus and academics love to teach us to answer all the outstanding questions before we get moving. And “how” we get from where we are to where we want to be is stressed above all else.

Life Happens
The problem is life. It keeps getting in the way of our best plans, and no matter how well we plan how to get where we want to go, as soon as we start moving, the world and life starts messing with our plan. It simply never works out anything like we planned, and the farther out we are planning, the less likely it is to work out.

A Harvard researcher found that 97% of all businesses leave their prime objective in order to be objective. The world’s greatest past and present businesses (Apple, Google, Facebook, HP, 37signals, etc.) all started out to do something other than what they ended up doing. And none of them did much pre-planning, if any.

Even among those few that wasted time pre-planning, they all took a left turn fairly early on to make money. Ben and Jerry put together a nice plan to make bagels, then they went out to buy a bagel machine and found they were expensive. The bagel machine salesman told them ice cream machines were less expensive, so we have Ben & Jerry’s ice cream instead of bagels.

Strategic vs. Tactical
“How” is not a strategic question. It shouldn’t be asked in long ranging planning. That doesn’t make it irrelevant. It is a great short-term, tactical question. Once you figure out where you want to be three years from now, ask “How will I get from where I am to the next step?” Use “how” to answer one step at at time on the way to your long-range objective.

Use “how” only in the short term
Webvan.com pre-planned how to get all the way from non-existent to being a $2billion company, and never wavered from their great plan. They went bankrupt a few years later, taking all $2billion in investor’s money with them. Like Webvan, answering the long-range “how” is much more likely to make us think we’ve got it all figured out, and will keep us from responding to the cues from the real world that always lead us to success. Remarkable things come from answering short-term “how”. Disaster is more likely when answering long-term “how”.

Never use “how” for long-range planning. Use “why”, “where” and “when” for the long-range stuff. Once you know exactly where you want to end up and when, then ask “How do get from where I am to the next step?” Come up with a plan to get through the next few weeks, then ask short-term “how” again. And do it a thousand times on the way to your objective.

A Thousand Short-term “hows”
Life and business are to fluid to ask long-term “how”. Keep “how” for the short term. You’re much less likely to run into problems if you ask a thousand short-term “hows” than if you ask a thousand long-term “hows”.

How now, never later.

Two things a business owner should never do.

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The 2nd is worse than the 1st.

One of the worst things you can ever do is write a business plan. But easily the worst thing you could do is follow it. It’s a great way to go out of business. It’s the 97% rule.

97% of all businesses leave their prime objective in order to find the thing that eventually makes them money. Good businesses almost always start with a bad plan.

You just can’t make this stuff up.

Harmonica Tuners Gave us Silicon Valley
In the late 1930’s two guys started a company for $538 and were messing around in a garage. They made an automated bowling lane violator, a harmonica tuner, an automated toilet bowl flusher and a few other stupid products. Somebody came along with something called an oscillator and asked them to build it. They didn’t think it was a very good idea, but that bad idea became the first thing they made money at – HP was born and became the foundation of silicon valley.

Model Rockets Gave us the First Personal Computer
In the very early 70’s a couple guys were messing around with a simple automated launching system for model rockets. They put the kit in a magazine and thought they would sell a few dozen. They sold thousands. They used that experience to focus more on technology than on model rockets. In 1975 they put another kit in a magazine for something called the Altair 8800, and thought they would sell a few dozen. It was the first personal computer and it sold thousands. They ended up building the kits and selling them as finished computers. Five years later this stuff became the basis for Microsoft’s Altair BASIC language.

HP Gave us Apple
Around the same time some 12 year old kid called HP and demanded to talk directly with Bill Hewlett because he wanted to buy parts (for his Altair?). Bill took the call, was really impressed and a few years later gave the kid an internship. Later in his life that kid, Steve Jobs, who also met Steve Wozniak at HP, said, “Without HP, there would be no Apple.”

Xerox’s Business Plan Gave Apple the GUI
In 1979 Jobs visited Xerox and saw something called a graphical user interface – GUI. Xerox invented it but couldn’t find it on their business plan, so they sold it to Jobs for $50,000. Bill Gates visited Apple later and poached the idea.

All of this, from the 1930s to the 1980s involving a few dozen people from all walks of life in many different places, came together to give us the personal computer. It wasn’t on a business plan, and the only guys with a business plan – Xerox – ignored it because it wasn’t on their business plan.

Bagels or Ice Cream?
Ben and Jerry make ice cream. What few people know is that the ONLY reason they make ice cream is that a bagel machine was too expensive. They were all set to go into the bagel business but hadn’t bothered to price out the machine. When they did, they found out an ice cream machine would be cheaper, so they did that instead. Wasn’t on the business plan.

Panty Lines or Millions of Dollars?
Sara Blakely looked in the mirror just a few years ago and saw panty lines under her slacks. She couldn’t find underwear that didn’t show, so she started Spanx, which is now a huge international clothing line success. Not a business plan – a mirror.

Webvan Followed Their Plan
In the late 1990’s Webvan decided people would buy groceries on the internet and have them delivered by van. They put together one of the most elaborate and detailed business plans ever concocted, raised $2billion, hired the best talent in the technology and distribution businesses, and followed their business plan right off the end of the earth. They took $2billion of investor money with them – a lot of people were really impressed with their business plan.

Let it Collect Dust!
97% of businesses leave their prime objective to become profitable. Webvan stuck to theirs, none of the others above had one, or if they did, they left it behind as the world interacted with their “plan”. If you can’t help yourself and just have to do a business plan, at least have the common sense to put it on the shelf and ignore it like most people.

You won’t find success in a business plan or in an MBA program. You’ll find it in the trenches by being willing to adapt and execute exceptionally on what may seem ordinary or throw-away ideas.

Do Something.
Ask the successful people. It’s never how good your plan is that matters. It’s how committed you are to the bad plan you’ve got.

Speed of execution. Stop planning. Get moving.

Lewis & Clark – Your Best Business Heros

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Maps are over rated.

Don’t look at IBM, Starbucks or Facebook to see how to start and grow a business successfully. The adventures of pioneers Lewis & Clark 208 years ago are the prototype for all of us. Things don’t often work out as we planned. Most often what happens instead is the good stuff.

In May of 1804, Lewis & Clark were given the mission by President Jefferson of finding a water passage from St. Louis to the Pacific ocean. How they approached fulfilling that mission is one of the best business start up examples in history.

Lewis and Clark were masters at planning as you go – what we call the 2.1 Planning Process. They only knew 2.1 things:
1) Where are we? – St. Charles (St. Louis)
2) Where do we want to end up? (the Pacific ocean)
2.1) What are the next few steps? (get a boat, hire a crew, leave)

Just the next few steps
You never get all of step “3)”, which is HOW to get all the way from step 1) to step 2). You only get “2.1)”. Traditional business planning teaches us that HOW you get all the way from 1) to 2) should be planned before you leave. But it’s voodoo, nonsense and fortune telling.

Just like Lewis & Clark, we never get all of step three, and you definitely don’t get it before you leave the dock. All we get is 2.1 – the next few steps.

On the third day of the trip, Lewis and Clark’s main vessel nearly capsized which would have ended the trip. Their experience even on waters others had traveled before was vastly different. Sound familiar? The other guy’s business experience won’t be yours – don’t let him tell you how it should go.

Lewis & Clark planned for the first few miles and could only guess at what they needed to take with them beyond that. All they could do is plan the next few steps and get moving.

Movement beats planning
They took off with 38 men and three boats but could have easily taken 1,000 men and 100 boats. Looking back from the future, we know this wouldn’t have helped them, and all that over-planning would have in fact made it even harder to move quickly, support such a large contingency and survive the winters.

This is where we miss it big time – over-planning before we even get moving. Lewis & Clark only figured out what they needed as each new obstacle presented itself. After planning as best they could for the first few steps, they simply had to be willing to make constant and quick adjustments or they would have perished. Every business has to have the same willingness to get moving and take soundings as you go.

Long-range planning doesn’t work
If you read the adventures of Lewis & Clark it reads like everything from a sappy novel to a National Lampoon comedy to an Indiana Jones movie. No business plan would have uncovered 1/100th of what actually happened.

They thought it would take 12 months, but 2 1/2 years later they stumbled back into St. Louis where people had long since written them off as dead. They thought they would float in big boats all the way to the Pacific but ended up in wagons, then canoes, on horses, walking, back in canoes, back on horses and wagons, all the while hoping they would find locals who they could trade with to get these things. They were making the whole thing up as they went along.

On they way back, only one month from the safety of St. Louis, Lewis was shot in the touche by the near-sighted, blind-in-one-eye Private Cruzatte who thought he was an elk. You just can’t make this stuff up. And you can’t plan for it either.

Pursue the first thing to find the real thing
Businesses almost always find what they will succeed at by failing at their first objective. Lewis & Clark had one main objective, find a navigable passage from the midwest to the Pacific Ocean, connecting the Mississippi to western oceanic trade. They utterly failed in their main objective. Yet pursuing that objective led them to multiple huge successes; mapping thousands of miles of land, treaties with Indians, identifying and naming hundreds of plant and animal species and opening up a whole new land for exploration. They gave courage to a whole generation who would follow in their steps, and rough maps to begin the journey.

And as with any business, those who followed the same route as Lewis & Clark had entirely different adventures. No two businesses can follow the same plan, even in the same industry.

Move the boat, then make the map
But the best correlation between Lewis & Clark’s adventure and your business is the answer to this question:

When did they get their maps?

The answer? When they got back.

Take the first step, then do it again and again
The best way for you to know how your business will unfold is to know exactly where you want to go, leave the dock and get moving, be flexible and adaptable, make it up as you go along, and grab the opportunities as they unfold. The thing you thought would be your main business will almost certainly grow into something you could have never seen from the dock.

Don’t know what to do to get all the way from here to there? Figure out what the next step is, even if it is a guess, and do it. Then do it again and again. Always know exactly where you want to end up, and take a thousand first steps to get there.

We usually find the good stuff by wading through the muck we thought was the good stuff. A map would take all the fun out of it. You’ll get your maps when you’re done.

How to Start a Business

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Don’t follow MBA, SBA or SCORE advice.

The SBA’s SCORE site had a “how to start a business” blog recently, but the traditional MBA-style advice is too “ivory tower” to work. It’s both much simpler and a little harder than they make it sound.

The SCORE blog post says figure out 1)what you’ll do 2)who your competition is 3)your overhead 4)how much money you can make 5)your potential profits, and 6)your funding. If you follow these six steps, you’re almost certainly going to fail.

It’s well-meaning advice, but doesn’t reflect how it really works. I’ve started and grown seven businesses, two that are international and made enough mistakes to figure out some basics. Here’s how I would start a business:

1) Take your product or service to market, put a high price on it (it’s always easier to come down than go up) and see if someone will buy it. If this doesn’t work, don’t do any of the other steps above – they are a waste of time if you aren’t already selling something. And if it does work, most of the other steps above will force themselves on you at the appropriate time.

Finding someone to buy your product or service is the first and only thing you should do before you do anything else. It should have been #1 on the SCORE list.

2) DON’T do a business plan (steps 1-6 in the SCORE blog) – they are nonsense and fortune-telling, and they keep you from going out and trying to sell your product to see if you have something viable. They also make you think you know what you’re doing, which keeps you from seeing great opportunities and obstacles. And they uncover 127 things that COULD go wrong (not WILL go wrong), which causes you to spend precious time and resources mitigating things that will never happen, and paralyzing you with all the bad things that might happen if you go into business.

The second worst thing you can do starting a business is to do a business plan. The absolute worst thing you can do is follow it. Check out the story of Webvan – a $2billion startup that is the classic case of a company that built an incredibly elegant business plan with brilliant management, then followed it right off the end of the earth (and they didn’t do #1 above until they were $1 billion in debt). Do a 2-Page Strategic Plan instead.

3) Figure out your profit margins. How? See #1 above – sell something at as high a price as you can – well above your minimum margin. Again, you can always come down. I worked with one client whose product cost $.35 all in (including marketing). They made a few of them, put it on the market for $8.50 and it didn’t sell. Over a period of a couple months they got the price down to two for $6.50 and they sold like hotcakes. Once they knew that their margins were huge, they had real data to determine their profitability. Do not determine your profitability in the ivory tower of a business plan – it’s voodoo.

4) Never take outside money unless there is no other way. 84% of the Fortune 500 companies never took VC or other early stage funding. It’s a myth that you need money to grow your business. VCs want you to believe it’s a must because they want to grow your business REALLY FAST so they can sell it out from under you and run off with cash. They’re building cash cows, not businesses.

5) Do NOT figure out your competition. You don’t have any competition except your own head. Do NOT look at what other people are doing to find out how to be successful. If you don’t have enough creativity and uniqueness to enter the market without looking at what others are doing, you shouldn’t be in business. See my blog titled Your Competition, Isn’t.

Doing it Wrong and Fixing the Process
I worked with a business owner recently who made the mistake of consulting with SCORE and doing everything they recommended. He had 80+ products defined and produced, a warehouse, financing, a great retail location, and $250,000 in inventory. When he finally started taking his products to market, the market wanted them packaged in entirely different ways and amounts and at different price points, and about 70 of his products were not selling.

We recommended he dump the warehouse, the retail shop and 75 of his products, and get on an airplane to major retailers, get their feedback, and learn his “business plan” in the trenches. With this approach his overhead is nearly gone, and he is now making money and profit. He would have been out of business in six months the other way. He can build all that other stuff after he makes some money.

How to Start a Business – redux; Sell Something.
Real businesses do not start with thinking, planning, researching, compiling, statistical analysis, building a “great” product in a lab, marketing, vetting your competition, estimating your overhead or finding a possible funding source.

Real businesses don’t start that way – not HP, Apple, Honest Tea, Google, 37Signals, Facebook, a plumber, or just about any other real business you can name. Read Bill Hewlett’s quote under HP’s Early Days here – he went and sold something (a few really stupid things) – this is how you start a business.

Go sell something. If it doesn’t sell, do what Hewlett and Packard did, sell something else. Don’t do anything else first. Once you have something that sells, your “business plan” will unfold in front of you in real time, in the real world. It’s counter-intuitive and doesn’t follow the mantra of the MBAs or the SBA/SCORE who think you should get it all figured out ahead of time, but it’s the way real businesses are successful.

Stop planning – get selling (quickly and inexpensively, on a very small scale).

New Year Planning? Do as little as possible.

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Simple vs. Complex

Annual planning, the way we’ve been taught, is largely fortune telling and a waste of time. Plan more effectively by doing less of it.

What We Were Taught
– Go away for 2-3 days in January to plan the year.
– Plan everything in as much detail as you can; growth strategies, budget, purchases, hires, leases, etc., etc.
– Follow the plan – don’t deviate – people who deviate won’t be successful.
– Wait until next January to do it again.
– Put it on a shelf with your “shelf-help” books – it’s only real value is to help your shelf look good.

If strategic planning was important for the new year, you would do it in December, not in January. And we wouldn’t wait 12 months to do it again. If you let your “strategy” degrade to the point that you only have one day of “strategy” left when you get back to it next January, it’s not a strategy, just an exercise you go through.

And following it faithfully is just a dumb idea. During one of my short stints at trying to be an employee I wrote the CEO an email in October requesting 10 new workstations and 20 employees (double-shifts) to handle growth. The next day he wrote back and said he had checked the annual plan I submitted in January, and that I had not requested those capital expenditures in the “plan”. Request denied.

They went bankrupt three years later, slavishly following their silly annual plans and rearranging the deck chairs in the business all the way down.

It’s Counter-Intuitive
Giant Corporation, Inc. taught us that we should try to capture everything in an annual plan – the more detail we go into, the more likely we are to be successful. I did enough of those to know it’s nonsense (and surveyed a few thousand business owners who say the same thing).

Only sweat the big stuff – the 12-3-1 Plan
All you need to capture is the four-to-ten big things that you need to do this coming year. That’s it. Write them down. I guarantee you that if you capture the very few, very important things you need to accomplish this year, you are MUCH more likely to actually get them done than if you attempt to capture EVERYTHING that needs to be done this year.

Once you have these, develop what we call a 12-3-1 Strategic Plan. 12-months, 3-months and 1-month, a third of a page for each. You don’t need anything more than this.

12-Month Objectives
Put your four-to-ten 12-month Objectives for next year on the top 1/3 of a page (spreadsheet, word doc, doesn’t matter), That’s typewritten in an 11 pt. font, with lots of spacing. Don’t cheat. The more you capture, the less you will do. Simple beats complex every time.

3-Month Action Plan
Take each one of these 4-10 Objectives and decide what you have to do in the next quarter to get them done in a year. Put them on the middle third of the page – keep it short!!

Don’t wait until next November to get started. That’s why both diets and business plans don’t work. Tomorrow never comes. Cut the elephant into smaller bites and get a sense of urgency.

1-Month Action Plan
Take each quarterly action plan/objective and divide it once again into what you need to do in January to accomplish the first quarter’s objectives. These take up the bottom third of your page. Don’t cheat – if you can’t fit it comfortably on one page, you have too much detail.

Don’t wait until March. Annual and quarterly objectives can be daunting, but picking away month-by-month will make them doable.

Strategic Only!
Don’t put anything in your 12-3-1 Plan that helps you make money this month; just things that will help you build a business that creates more time and money next year.

“Buy a copier”, “Replace retiring employee”, “Sign contract w/ xxx, Inc.” – none of these belong on your plan.

“Move to new location”, “Hire/train someone to replace a piece of me”, “Increase revenues by xx%”, “Go from 60 hrs/wk to 30hrs/wk while increasing profits” – these are great annual planning objectives.

Monday
Every Monday morning look at the bottom 1/3 of the page and decide what you need to do that week to accomplish that month’s action plan. Block the time that week to get it done. If you do this every week, you will knock out the monthly action plan. If you knock out each month, you will accomplish the quarterly objective, and if you do that four quarters in a row, you will have had a great year.

Details? We don’t need no stinkin’ details!
If you keep it simple, you will only have to work out real details in a real world each week/month. If you try to capture all the details for the year when you put together the plan, you will be solving ivory tower problems – most of which will never happen. And you will miss half the problems you will actually face. So don’t solve problems/details until they are real. They are never real in January when you did your planning (see above request for 10 workstations).

Quarterly 12-3-1 Plan
This is the big key. Don’t do an annual plan anymore. Do a quarterly one. Every quarter your 12-month plan will have deteriorated to only 9 months. April 1, push it back out to 12 months on the top 1/3 of the page, then use that to re-populate the 3-month (middle third) and the 1-month (bottom third), and then get after it again each Monday.

Simple beats complex every time. If you capture everything, you’ll do nothing. If you capture the few big things, you might actually do some of them.

You can buy our Strategic Plan template along with our Lifetime Goals and Process Mapping templates and detailed instructions for each on our book site – Making Money Is Killing Your Business .

Or just grab a sheet of paper and get it done.

By the way, it shouldn’t take you more than 2-4 hours to do it, because you get to tweak it every week, every month, and every quarter.

Relax. Just get moving on the big stuff and the rest of it will unfold as you move.

Have a great year! (one week at a time)