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Real Solutions for the Real World
Sometimes all you need is a quick answer to a straightforward question.
We've been keeping track of the most common questions we hear from small business owners. From that study, we've built the Lucid Business Strategies Library of Frequently Asked Questions, a list that gives you genuine, functional answers based on what we know really works. All the answers here have been validated by the expertise of qualified supply sources, web sites and research.
If you don't see what you are looking for, send us an email and we'll give you an answer. Once we receive the same question from three or more clients or visitors to our site, we post the question and answer, so bookmark this page as a reference tool.
Frequently Asked Questions:
1. Q: Why should we hire someone to help us with our business (Consultant)?
Lucid: There are several reasons, but three of the most important are:
- You know that things in your business need to change. Maybe you're not making as much money as you had hoped for, you're working harder and harder to stay in the same place, or you're growing so fast you can't keep up. In your hectic world, it is difficult to step back and determine exactly what the next step in your business should be. Because consultants are not involved in your day-to-day operation, they can help pinpoint exactly what you need to do, and help you get it done.
- The business world is moving faster and faster. It seems like everything is changing almost daily. No owner or manager can possibly keep up to date on all of the changes and advances that are occurring, or be an expert in everything needed to run a successful business. A consultants' entire business is related to being an expert in their field and keeping current with the changes in their area of expertise. They provide this knowledge to their clients, and help them implement necessary changes. Because of their knowledge, good consultants save their clients much more than they cost.
- Many business owners have great products or services, and are experts at their craft. They are not, however, experts in business. A consultant can help you develop your business, marketing, and systems. Because of their expertise, they can develop and implement in months what it would take you years to accomplish.
We are in a knowledge economy, causing constant change in the business world. Possessing knowledge is becoming more of a competitive necessity every day, making a good business advisor (consultant) as important as your CPA and attorney.
2. Q: What does a business advisor (consultant) do that I cannot get from my CPA or attorney?
Lucid: CPA's and attorneys are very important parts of your advising team. They can help you identify the financial realities of your business, provide tax planning to help you keep more of your money, and keep you from making a mistake that could end you up in court. Generally, however, they are not able to provide direction about good marketing strategies, help you develop systems to operate your business and support your growth, teach you how to conduct an interview, or assist you with any operational needs. A business advisor (consultant) fills that void.
3. Q: What things should I look for when hiring a consultant?
Lucid: This is an important question. There are many people/companies that claim to have the latest program, or the best strategy. The reality is they are just looking to make the sale. Here are some questions you should ask before choosing a consultant:
- Client Longevity: Do they have a history of working with clients over a long period of time? This indicates a good relationship with existing clients.
- Results: Can you provide references with the results you have achieved? Check these references! Be wary if they do not want to provide you with results. Many people have impressive client lists, but you want results, and you should only hire someone that has delivered previously!
- What is your management and/or marketing background? Did they have real world experience before they became a consultant, or did they learn it by reading books?
- How long have you been in business? Consultants come and go. You want someone that has some longevity, indicating they have been able to make their own business a success!
- What is your academic background? Academia isn't everything, but it is important.
- What is the size of your organization? Are they big enough to handle the project you are considering them for? Do they have employees or contractors that will be doing the work for you?
Choosing someone to help you with your business is an important decision. Following the guidelines above will help you make that decision on the correct criteria.
4. Q: Why should we hire someone to help us do a business or marketing plan when there are software programs and people that will help us do them for free?
Lucid: It is true that there are a plethora of resources available to help you create a business plan on your own. For some people, this support is more than enough.
There are several important contributions that a qualified consultant adds to the process:
- A consultant is invaluable if the business plan is being created to obtain financing. Consultants know what lenders want in a business plan, and create the plan in a way that gives you the best chance of success.
- Plans are created to provide realistic direction for your business. Software programs or templates provide a structure for the plan, but do not challenge your assumptions, or help you decide whether a certain approach/strategy will be successful. A business planning consultant can:
- Assist you with developing business and marketing strategies.
- Challenge your beliefs, and help you prove whether the approach you are following will be likely to succeed.
- Provide you with resources you cannot find nor have access to on your own.
- Provide you with research to support your final plan.
- Save you thousands of dollars by helping you avoid the pitfalls many business owners fall into.
- Provide you with depth to truly think through every facet of your business, so there are no "holes", or things that you did not plan for.
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Many free resources provide an overview of what you need to do to complete a plan, but do not help you make sure the plan is realistic or has a chance at succeeding. The most attractive plan is useless if it won't work!
5. Q: How is marketing different for small businesses than it is for large businesses?
Lucid: There are many differences, but the primary ones are time, money, expertise, and strategy.
Time: Like owners and managers in every business, time is precious. In small businesses, this time pressure often means that something has to go on the "back burner." Often the thing that gets put on hold is marketing, since there is no one in the organization to delegate to. If the owner/manager isn't doing it, nobody is.
Money: With many small business owners, spending money on marketing efforts that are not effective may make the difference between survival and failure. There simply is not money to waste on ineffective strategies. Marketing does cost money, however. It is vital to plan for this expense throughout the life of the business.
Expertise: Very few small business owners are marketing experts. Also, they cannot afford expensive market research projects (focus groups, surveys, etc.), or to hire marketing/PR/advertising agencies to do this work for them. This forces them to do this work on their own, or rely on the advice of friends, others in the industry, and media sales persons.
Strategy: Marketing is a comprehensive and ongoing process. Placing one ad in the newspaper or conducting one direct mail campaign is a tactic, not a strategy. Large companies conduct entire marketing campaigns. Small business owners need to adapt this concept to the size and scale appropriate for their business.
6. Q: What are the biggest mistakes you see small business owners making?
Lucid: There are several mistakes that we see small business owners making. Perhaps the biggest is that they do not have a comprehensive business plan. Virtually every book written, and every class taught, tells business owners to create a plan. Even so, a great many business owners do not take the time to create a plan, or they create one that does not have sufficient detail to truly guide the business.
Another mistake small business owners make is not having enough money to keep their business running until it positively cash flows. We hear statements like "We have such low overhead we don't need a lot of money." We get very concerned when we hear this comment; it indicates that
the business owner needs much more insight into what is involved in running a business before they actually begin doing so.
After a business has opened, and begins to grow, another dilemma appears. The owners and/or managers work more and more hours to do the work of the business, and dedicate less and less time to managing and guiding its growth. This results in burnout, and eventually the decline of the business. There must be a plan for how the work is going to get done when the business grows. The owner/manager must dedicate time to managing the growth.
7. Q: What advice would you give to people that want to start a business?
Lucid: Do not begin a business under any circumstance without:
- A comprehensive, written business plan, including a financial plan and marketing strategy.
- Sufficient operating capital that you can cover the expenses of the business, as well as your personal living expenses, for a minimum of one year. Planning for two or three years is preferable.
- Surrounding yourself with professionals. Hire a competent CPA. Have an attorney that specializes in business law available to you. Choose a competent business advisor (a person or company that has expertise in operations and marketing). An investment in these services is invaluable to your long-term success.
- A written strategy for how you will manage the growth of the business (adding staff, investing to support the growth, etc.)
There are many more components to creating a successful business. Following the points above and listening to the advice of the professionals you engage will give you a fighting chance at success.
8. Q: Do I really need a marketing plan?
Lucid: Absolutely! Running a business without a marketing plan is like driving a car without the steering wheel! You have everything you need to move forward, but you cannot control where you end up. A marketing plan does several important things:
- Helps ensure that you have a strategy to generate profitable revenue for your business
- Reduces the likelihood that you will spend money on tactics and programs that will do nothing for you.
- Forces you to evaluate how much money you need to spend on marketing activities to achieve the financial results you want.
- Focuses your marketing efforts so they work synergistically rather than a shotgun strategy of several stand-alone programs that do not support each other.
Lucid Business Strategies - Clarity, Focus, Results
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