Category: Business

DIFFERENCES BETWEEN BUSINESS PLAN AND BUSINESS MAP

Business Plan: is a 20 to 30 page document that includes the business line, investment amount, products, customer target, sales strategy, marketing, who is the competition, ideological structure, internal mechanics, human resources. It focuses a lot on the “How” to do things.

Business MAP: it is a younger term than the business plan. It focuses on what you want. Not on “how to get there”. It includes where you want to go, and how you break that goal down into small steps. “Milestones”. It does not detail on how to accomplish each sub-goal in order to reach the end goal. It only tells you where you have to go in order to get to the next level. It focuses on the type of business you are in, and then what businesses you are “really” in.

Hello 2019, throw away your business plan

Today, industries change too fast. Technology causes changes in an industry to no longer occur in a couple of decades or years, they occur daily. From one hour to the next your company may already be obsolete. It is the power of innovation that gave us the pace of technology innovation.

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The weakness of a business plan

1. It takes time to develop: it requires market studies, development of company philosophy, etc. It is not done in a few days.
2. It focuses on “how to get” to where we want to go: by the time you designed your business plan, almost certainly half of your ideas will already be obsolete due to the pace of innovation in technology.
3. It focuses on the product/service: it is vital to fall in love with your client. Not from your product. (see: Your customer buys emotions, not your product)

On the other side, the map is something very simple to develop. In the case of one of my companies (CPF FRANCIA) we had developed a plan in 2015, and it was not sustainable once the business was launched in 2016. We took 4 months of time and money to develop a plan that when we had to apply it, was no longer up to date. We decided to make a map. In a 3-hour meeting with my partner, we designed a map that allowed us to launch successfully on the market in less than a month..

The strengths of the MAP

1. It focuses on the “Why” instead of the “How”: A very simple story to explain the importance of why instead of how comes from a company in which I worked in 2008 as a consultant. They had the need to open VPN tunnels between their IT service providers and their internal servers (we are talking about a multinational that protects its internal network very intensively) but they were afraid. They focused more than 4 years on “How to protect ourselves, how to open them safely so that data does not steal”.
   When I arrived I asked them a simple question: “Why is it necessary to open those tunnels?” That question, simple as it is, changed the perspective of the directors of the company. They began to focus on the importance of getting started, and in less than 3 weeks they opened their network to their providers.
   Through the next 8/9 months they faced problems that they managed to fix, learning along the way, little by little, without ever damaging the integrity or data of the internal network.
   The map is like this. It tells you “Do it”. It is impossible to make predictions of the future. Better to focus on why to do something, and then learn to fix problems. You will always have problems. Don’t focus on them, focus on your goal.
2. The map defines the business you’re really in: If you take Apple’s example, you might think “Ok, I’m in the computer business.” But no, thinking like this, you think like your competition and limit the potential of your company. In Apple’s case, it was called Apple Computers in the 90’s until Steve Jobs came back, Microsoft then had 97% of the computer market, and he asked himself “What business do I have to be in?” They cut the name to “Apple” and focused not on making computers, but on connecting the public to their passions: Music, photos, people. Today Apple is the most valuable company in the world, and the income from the sale of computers represents only 15% of its total profits

Questions to create your MAP

1. Determine what business you’re in: Many think of McDonald’s as a chain of fast food restaurants. But in reality, it is one of the largest real estate companies in the world.
2. What business am I really in? How is business going ?: Those questions are important for entrepreneurs to focus on the industry rather than the business. An important example in the early 1900s is the railroad companies. If they had realized that they were trucking companies instead of rail, they would not have lost 99% of their business to trucks.

When you can answer those questions you will have a more open mind to deliver the right product/service to your customer, innovate against your competition, and take a leading position in your industry.

WHAT REALLY PUSHES DECISION MAKING

What type of phone do you have? What kind of car? Do you buy clothes and accessories from certain brands? WHY?

How to sell to my clients? For many entrepreneurs, the quality of their product / service, as well as their reputation seem to be the main factor to be able to get new clients. The reality is that these factors go beyond the rational, beyond the logical, and far from those fundamentals that most people may think. According to a study by the Nielsen Company, it has been estimated that 90% of decisions to buy a product or service are made subconsciously.

The logical question then would be: How can our subconscious make decisions? It’s simple: Need + Emotions.

According to an Entrepreneur article published in 2014, human beings have 6 basic needs that determine how we feel about ourselves, about others, and how we live our lives:

• Certainty
• Meaning/Importance
• Variety
• Love and connection
• Growth
• Contribution

Based on that, it has been proven that all the behaviors of a person, including when deciding to buy something, is a way of trying to fill one of that/those need(s). Read Are you a smart spender?

If your wife asks you to buy a $ 1,500 bag, that you bought a $ 75,000 car on credit or just a new $ 2,000 cell phone to replace the one you bought 10 months ago, each of those items you spent on were for what gave you importance.

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And that doesn’t just apply to you or your wife, even buying expensive gifts for a third party can fill that excitement. It is subconscious to think that buying something expensive for someone will make you feel attention, appreciation, and sometimes even affection or love. In short, all that represents the same: Importance.

That need to show off doesn’t always mean wanting to feel on top of others. In many instances it means needing to teach others my own identity. In an era in which everyone is alike, buys the same cars, jackets, dresses, watches, house… for many it is important to differentiate ourselves and show that we are a little more unique than others. Why the most unique I feel, the most important I feel.

That is what you should look for in your client. What makes him “Click”? What is it that moves him? How can you make him feel important? If you can answer those 3 questions, not only did you turn “no” into “yes”, you will have a new customer. You will have a loyal customer who will continue to buy from you for years to come.

An example from 2017 was a Tweet by a Tesla customer Paul Frank:

“@Elonmusk can you guys program the car once in park to move back the seat and raise the steering wheel? Steering wheel is wearing.”

In 30 minutes Elon Musk replied that they were going to program it, and not only that: they were going to do it in less than 24 hours. And they did. This is the example of a company that knows how to make its clients feel important, unique, loved and safe. It is not difficult to know where this man will buy his next car.

Did you know that in Mexico new companies have a very low percentage of success? About 75% of new businesses do not reach two years. It seems to be too much, doesn’t it? Look at that: 90% do not reach 5 years, and about 97% do not survive 10 years.

So why do so many businesses fail? There are a multitude of reasons, but I found a pattern through my years of experience as an entrepreneur that brings together the most common mistakes.

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1- A common offer

Many people open a business because they realize that this product or service is working very well for X company. They have worked in the industry, they have contacts, they know everything about the product/service. But they offer the same thing as company X. When you open a business to offer something existing, remember that it will work if you have a “differentiator”, something that breaks you out of the industry mold, that people didn’t know about, and that they want. Many startups never think about that, and it’s the first step towards failure.

2- Income Management

It is important to have a notion well nailed in your head: the money of your company is not your money. It’s called “Moral Person” for a reason. Many people treat their company account like their own piggy bank. There are a multitude of responsibilities when you have a business, and the first ones are: your suppliers, your employees, investors and the government. Never forget that if you can’t afford one, the others will suffer, and your business will die. This revenue management error is extremely common in businesses that fail, especially in young businesses.

3- Communication

This disease called “lack of communication.” Many entrepreneurs work hard to discover a point of differentiation and then screw it up because they don’t communicate their message clearly, concisely, and compellingly. I see many entrepreneurs who bleed to death for not communicating properly. In the same way, many of them do not pay enough attention to their online reputation.

4- Leadership failures – Self Sabotage

You see it all the time in the media. Another athlete with incredible talent leaves in the background. It is painful to see the self-sabotage of people like Lance Armstrong, Mike Tyson or Aaron Hernandez, who did not achieve a truly remarkable success due to their poor decisions.

Now, you may not see the names of entrepreneurs who fall hard in the New York Post headlines, but the reason for failure is often the same: Self-sabotage through extremely poor decision making, weak leadership skills, and bad strategies, be it sales, marketing, or exit.

5- Innovation

This issue is not only for young companies. It applies to those who are already successful and who can sometimes feel untouched by the position they have achieved with a product/service that has worked wonderfully to date.

If you check the home page of this site, and if you came to an event of mine, I always say: “If you stop growing, you die.” Innovation is part of the growth of a company. Innovation means finding a better way to meet the needs of your customers than anyone else. Anyone can make some money for a certain length of time, but if you want to be successful and maintain that success for years and decades, if you want to build a brand, then you have to find a way to add more value than anyone else in the game. And that comes from constantly innovating.

Very often, a company will fall in love with its product or service and neglect the need for innovation. This is highly problematic as the economy, technology, culture and competition are constantly evolving. It is a different world than the one we live in today, where the only constant is change. And if you don’t stay ahead, you’re falling behind.

Read also: Organic Growth

Businesses these days aren’t just competing for customers, they’re also competing for the best available (and sometimes unavailable) elements of the job market. The terms “company culture”, “employee well-being” and “work-life balance” abound on most online job boards, as employers hope these perks will attract top talent. But not all benefits are created equal. In fact, most business owners tend to focus on offering entry-level benefits, benefits that may seem flashy and exciting but don’t offer much long-term added value to employees in order to create a corporate culture that supports employee growth, retention and well-being.

The well-being of your team is the key to your success

You simply cannot have a strong company culture without balanced, stable and healthy employees. If your team members aren’t performing to the best of their abilities and talents, your entire team will never be either. Several studies indicate that happy, healthy and engaged employees are more productive and reduce costs in a company. According to the Employee Experience Index, the workplace quality measurement tool developed by IBM and Globoforce, employees with more positive work experiences were “significantly more likely to report significantly higher levels of discretionary effort”. In addition, 83% of employees believe that their well-being influences productivity, and 33% say that low well-being was a contributing factor. In addition, according to the same study, 24% of employers say that staff turnover is the number one challenge in their human resources management strategy. This means that investing in the well-being of your employees = indirectly investing in the productivity of your business, which could generate great profits in the future. It also means that neglecting to support employee wellbeing could mean losing them, especially strong talent who may expect more from their workplace, knowing they could likely find it elsewhere. This then results in a waste of time, money and resources in the effort to replace these elements and subsequently to train newcomers.

How to improve the well-being of your employees

Many business leaders believe (incorrectly) that investing in their corporate culture and the well-being of their employees means providing a kitchen with snacks, video games and foosball. And while these things are nice to have, they are almost meaningless unless additional, more substantial cultural supports are put in place. What will really create a highly engaged and productive team is investing in their growth and development, inside and outside the workplace. The number one key to a full life is to grow, it’s one of the 6 human needs. When you provide opportunities for growth, you show your employees that you care about them beyond their job duties.

Reflect on the changes and ask for help to implement them

To create an environment of growth, advancement, and development, consider providing ongoing training not only for your employees’ job functions, but also for their lives outside of the workplace. In the case of the launch of our group of companies, CPF Group, we had to hire a financial consultant several times in the first year for a lunch meeting, or offer free yoga classes where employees could learn strategies to relax and refocus. We offered to pay for online courses or send them to workshops and conferences that gave them the opportunity to expand their networks and establish themselves as industry experts. Since then, we have integrated a service specifically to take care of the well-being of our employees without going through a third party company, and this has radically changed our efficiency and staff turnover. Start implementing a wellness program in your business today with the help of the CPF Entrepreneur team. Schedule a call with us to review areas of opportunity to grow your business through a brand new program.