Mplans Blog

If You Watch, Ads Will Appear

If a large group of people are looking at something, advertisers will find a way to get in on the action.  The latest crossovers are for internet specific created content like "Lonely Girl 15."  (I have to admit that I don't really know what this is, and the title kind of creeps me out, but this seems to be a market and media favorite.)  Anyway, it looks like Lonely Girl has cashed in on her audience numbers.

Do You Need Software to Write a Plan?

I regularly read the blog, The Entrepreneurial Mind, by Jeff Cornwall.  I highly recommend it as a source for straight shooting, insightful posts about entrepreneurship.  However, a recent article linked on this blog uses some terminology that I must contest.

The title of the article is, "Skip special software when writing business plan."  He instructs future planners to consider the "experts" on planning...the investors and bankers.  To my knowledge, there is no way to legitimize such a title for either group.  Investors come in all shapes and forms.  They have the power (at least in their minds) at that particular time.  Many of the investors I have known use their gut-feel as much as sound business analysis to evaluate an opportunity.  Mostly, they are interested in what's in it for them.  This is a poor audience to sculpt your strategic planning towards. 

Bankers are worse.  There job is to mitigate risk.  Entrepreneurs by definition assume risk.  For the last decade almost all bank underwritten SBA loans have been based on equity that has little if anything to do with the contents of the plan.  They read about your business ideas and then base their decision on lending criteria that is separate from the venture offering.  Why would you write a strategic plan towards this audience?

The article does a good job of discussing the fundamental link between a marketing plan and financial projections.  Marketing plans are easy enough to write but very difficult to link towards realistic projections.  This is one of the primary benefits of planning software.   Most people are not financial experts and unable to create income statements and balance sheets from scratch.  Software allows the novice planner to  more easily integrate these two sections.  I will agree that someone who can do this with nothing but a spreadsheet and a word processor will come away with a deeper understanding of what is going on in their plan and ultimately their business, but I know very few MBA's who can confidently manage such an effort.

The article ends with a final piece of advice, save the money you would spend on business planning software and take yourself out to dinner after you have finished the plan.  Most planning software runs between $100 and $200 dollars.  I would argue that the money is much better spent on the software than the dinner.  All of the hard work is needed whether you use the software or not.  The final outcome when using software, given an equal amount of effort both ways, will be a stronger plan.  You will spend less time formating and writing cell formulas with the software and more time on important issues. 

Buy the software and have a peanut butter and jelly sandwich.  Besides, you have work to do if you are going to be starting a new business soon!

So who decides?

Does the marketplace dictate what your business should look like or does the entrepreneur follow their own vision?  I recently sat down with a group of business owners and they all had one thing in common.  The business that they thought they were going to have is different from the business they have today.  At some point the market opportunities caused them to make adjustments to their original business models and ultimately shaped who they are today.

This doesn't mean that their time planning was wasted.  On the contrary, they all agreed that planning provided the ability to recognize the difference between opportunity and distraction.  Without looking forward and completing their set of expectations, it would be impossible to distinguish between the two.

So who decides?  The entrepreneur does....many, many times. (Until the marketplace likes thier decision!)

You Tubing

My wife sent me a link to a video on You Tube and said, "You have to watch this...."  Well I did, and it is amusing. But more important to me is the marketing strategy behind the whole thing.

Zima, an adult beverage (sort of...), produced a paradoy of the MTV hit show Pimp My Ride.  The marketing team is obviously trying to reach an older audience, probably female and decided that humor could be used to integrate their brand message.

Well, if that is what they were after, it is probably a huge success.   I followed my wife's call for action (like I always do) and watched the ad.  Good job Zima marketing team.

Walmart Does Some Basic Segmentation

Walmart is no different than any other business when it comes to marketing.  Well, okay maybe they are a little different because they are the most successful retailer in the history of mankind.  But they still go back to the fundamentals.

The New York Times reported that the mega-retailer had identified three groups of shoppers.  These large segments are meant to refocus their marketing efforts based on consumer intentions.

Assigning these types of profiles to your consumers is essential if you want to communicate effectively.  Each group has different trigger points and will invariably see different things in Walmart's messages, prices, services and product offerings. 

Don't ever forget that marketing seems easy but is very difficult to do well.  The giants have the same questions as the startups.  No one is above the basics.

Innovation and Marketing

Marketing and innovation are strange bed-fellows.  The academic perspective is to assign innovation to the development of new products, inherently marketing led. However, following the market is decidedly un-innovative.  This paradox is often debated and rarely agreed upon.

I believe that existing organizations will always struggle with trying to manage major innovation.  Why?  Organizations were developed for a purpose other than the innovation.  Their structure and resources have been custom built for another purpose.  The individuality of each organization can be traced back to its previous growth.  Tearing apart an organization is painful and unnatural.  This is why existing organizations, even with their many resource advantages, are not as likely to successful introduce new innovations as entrepreneurial start-ups.  It is cycle that is gauranteed to repeat itself.