Among other interesting facts about Florida, the state business statistics show that Florida is the number one among all states in business start-ups every year. On the other hand, Florida is also the number one state with more business closings every year.
How can it be?
Are Florida entrepreneurs too optimistic? Is it the influence of Latin and Caribbean immigrants? Is it a lack of detailed business planning? Or Is it an ineffective business control managing?
The illusion of building a sustainable and profitable business without verifying its feasibility, is probably the main reason why so many startups without proper planning and control, end up producing a big deception for many entrepreneurs.
A great idea without a plan is just a dream.
Many of these failed businesses did a business plan before starting, if it was required by external related organizations: by the franchise, by a bank, by immigration or other requests external entities. Some business plans were done with a bought software where the entrepreneur fills out several sections to comply with the software requirements and the purpose of the business plan. Other, were professionally developed by business consultants according to the consultants’ experience and procedures, with the information provided to them by the owner.
However, a business plan without the management mindset and disposition to monitor the business results, without a deep analysis of the results business results against the planned figures, and without implementing the appropriate adjustments, is just a worthless document.
As Dwight Eisenhower once said: “in the battle plans are worthless, but to win the battle, planning and control are essential”.
Today, many entrepreneurs are immersed in the day-to-day operations and they forget about the planning process, about the key performance indicators, and about evaluating how the business is performing. They are mainly focused on the daily operations and their mindset is limited to sales growth.
They usually pay less attention to the fact that a business is more than just sales, it is a balance among several variables that must work together to make the business profitable and sustainable. They usually don’t control the cash flow and forget the bottom line until the external accountant tells them “Hey! you are losing money”. And the usual answer to this fact is: we need more sales, let’s do some promotions, invest in more marketing, and push harder to get more sales. These actions without analyzing the real causes of the results.
An effective planning system that works requires three things:
- A detailed and realistic plan has to include a deep analysis of competitors, the unique advantages of the business, the selection of the market segments and niches, the characteristics of the loyal client, the key performance indicators and how to monitor them, the potential risks of the business with the appropriate strategies to minimize their impact if it occurs, among other details.
- A monitoring system that allows the management to detect deviations that can easily be corrected with a brief action plan, and critical deviations or deviations that shows a particular trend and need to be managed with an action plan involving additional resources, which also has to be monitored.
- The biz owners and their executive team mindset focus on clear and committed business objectives. This develops the habits of evaluating results with a regular schedule and the right cultural attitude to prevent or solve any situation that may arise.
Establishing this “Dynamic Results Oriented Management System” is the most reliable way for successfully driving the business, assuring its profitability and sustainability.
Almost always, the owners or the CEO lack the time and, frequently the experience to establish this system alone and have to recur to a professional business firm or consultant to work with them to develop, implement, and provide the training to implement this Dynamic Results Oriented Management System, which is the best tool to steer and direct the business operations to achieve and exceed the business objectives.
We will talk about how to develop and implement this system in the next article.
By: Jose Luis Mercader, MBA
A&M Biz Center, LLC – Business Consulting Firm
954 850 8315
The traps of the small entrepreneur
Mindset what you really want long term
Focal point your next goal to achieve it
Organize and plan it
”Dynamic Results Oriented Management System”