Balancing Your Business with Your Business Growth Goals

We all set Goals in some form.  At the time we establish them, they feel exciting and new.  Sometimes are goals are set with a purpose of diverging from our ordinary daily lives.  These sorts of ideas enthuse us, no matter what they are related to.

One such goal could be to branch out in your business.  Many pursue the goal of passive income and this doesn’t always entail joining a business opportunity or MLM, thank goodness.    The difficulty that exists, however, is that you can become swept  away by your primary income-earning activities because you enjoy what you do, have built a reliable reputation and you like the people with whom you are working.

My primary business is project based.  A very high percentage of that business is returning customers with new projects.  If the experience of working with them in the past was mutually beneficial, as well as being fun, I have no qualms about taking on their requests.  On the other hand, there are some clients whose projects I can’t wait to finish and with whom I will not work again.

New projects and cash flow are great to have, and hard to say no to.  But, with only 24-hours in a day, you begin to wonder if you are spreading yourself too tasks to forego are the ones that aren’t producing income for you yet .  It is true that you can outsource some aspects of your business but, when YOU ARE THE COMMODITY that people are seeking, you ultimately must decide if you want to decline new business so you can stick with your business building plans.

This is what I lovingly refer to as a Creative Conundrum.

The best strategy that I’ve found for achieving balance between what I have and what I want is to list all of the things that I want to do, as well as the things that I must do, on a schedule of some sort.  Don’t forget to set aside “me” time.

Blocking time is not a new concept but it works.  In fact, this was the basis of Steven Covey’s book, The 7 Habits of Highly Effective People.   Among other things, Covey recommended establishing your task list, prioritizing those tasks and checking them off or updating their status on a daily basis.

A little more tedious, but also helpful, is keeping some sort of log on how your time is being spent.  If you do this for a week or so, you will notice patterns in your days and where you are spending time that takes away from your business building or income generating activities.

Once you have a handle on how your time is being spent, you are in a position to determine what you can spend less time on, or possibly stop doing, so you have more time to pursue your creative goals.   Those are the things that you really wanted to do when you imagined them, right?

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Making a Difference Matters

For those of you who may have missed me, please accept my apologies for having neglected my blog for so long, .  The thrill of operating your own business comes complete with the opportunity cost of having to keep your nose to the grindstone, at times.

There are some clients whose expressions of gratitude almost makes you feel guilty about getting paid for the job.  I have recently had that experience.

Here is a quote from a rave that one of my clients just wrote on their blog, about the service they received from me:

If you are blogger, you know that  your site is not unlike your child.  And when your child is sick, you tend to stop functioning.  You want answers.  You want certainty.  You want experts.  And we got absolutely none of that from our hosting provider Network Solutions.  From Network Solutions we got ticket numbers, escalation promises, and false assurances.  So we panicked and called in the real expert.

Virtually Marj. WordPress developer extraordinaire.

We love Virtually Marj for the following reasons:

She knows her stuff

She delivers exactly what she promises on time.

She is a human being.

I swear that I blushed when I read what they wrote.    If you want to see this post on their site, visit MothersofBrothers.

Even though their praise is directed at me, the three things that they noted are essential to anyone’s  success in business so it bears repeating.

If you don’t pretend to be good at something that you aren’t, are clear about deliverables and time frames, and  remember to  be yourself, you have a recipe for success.

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Who Are You?

When your life changes in a radical way, what do you rely on to keep yourself moving forward? That’s a good question to have a solid answer to, I believe.

Many people define themselves by the accumulation of their material belongings, their careers, or their family roles. There is nothing inherently wrong with this, unless it is the primary method you use to define yourself TO yourself.

Take a young parent who immerses themselves in the very important job of being the best parent they know how to be. This can include a lot of sacrifice, especially in the early years. As children get older and more self-sufficient, that dedicated parent can find themselves feeling directionless if they have not maintained perspective on their personal goals in life.

Another example would be a career-minded person who has devoted themselves to being a loyal employee, which also can include a lot of sacrifice. In these unpredictable and tumultuous financial times, executives and individual contributors alike are surprised to discover that loyalty means nothing when shareholders are demanding better returns on their investments or a private company owner must cut back on expenses to keep their business viable.

When one door closes, another opens; but we often look so long and so regretfully upon the closed door that we do not see the one which has opened for us.

~Alexander Graham Bell, US (Scottish-born) inventor (1847 – 1922)

We have choices to make at the time of a significant change. If our moorings are based on a self-perception that can withstand exterior influences, we will embrace the changes and use the opportunity to GROW.

Goals
Establish some goals for your new life. Make sure these goals are aligned with your personal passions so they are goals you will enjoy pursuing and bringing to life. Once you have selected goals, find a group of people who share similar interests and hopefully people whom you can look up to so you can emulate their successes and learn from their mistakes.

Reality
Appreciate the fact that reality, as you previously understood it, has changed. If this causes you to feel dread, you must find a way to adjust your mindset. Perhaps it could be something as simple as finding at least one thing everyday about the difference that you like better than your previous reality.

Options
Know all of your options. If you feel limited in any way, introspect about what is the source of that feeling and create a solution where the problem exists. Truly creative often see a problem seeking a solution long before anyone else. Could that be the purpose of the perceived limitation?

Will
Especially for entrepreneurs, there are times when sheer force of will is all that propels you forward toward your goals. If you are willing to believe in your own success, that will make all the difference in the world.

Perhaps the most important thing to investigate each day is your willingness to get out of bed. It is important to know why you are living and working each day. Write these things down and keep your list near the alarm clock. If you find yourself hitting the snooze button, rather than getting up right away, you might need to make a new list or evaluate your priorities. Face it; If your “whys” aren’t compelling enough to get you out of bed, they clearly aren’t important enough.

Ready … Set … Goals!

As you’re taking down the tree and visiting relatives are checking the status of their flights back home, it is clear that another holiday season is winding down. Like it or not, another year has passed and it is time to think about how to make your next year the best one you’ve had, so far.

You work hard every day to build your business but, if you don’t feel your business is where it ought to be, it may be due to the fact that you’ve been so swept up with tactical matters that you haven’t really stopped to consider what it is that you really want. With that list in front of you, you are ready to set some goals.

Goal setting for your small business owners requires both imagination and foresight. Here are some great questions you can use to organize your thinking for a goal setting exercise:

1. What do you want to change?
2. Where will this change take your business?
3. Why do you want to change now?
4. What do you need to do to make the change?
5. When do you want the change to take effect?
6. How will this change improve your business?
7. What happens after you’re there?

This sort of brainstorming can help you whether your goals are business or personal and envisioning goals in this way guides you to think strategically. Putting things in a list can actually help you find related goals, or goals that need to be done in sequence, so you can economize on the resources needed to accomplish them too.

Setting goals may seem like a daunting task but it is a necessary step in setting the course for advancing progress. As John F. Kennedy said:

“Effort and courage are not enough without purpose and direction.”

So think SMART when you think of goal setting.

S is for Specific

If your goals are specific, you have a much better chance of achieving them. So, for each of your items on the list, answer these questions:

Who: Who is involved?

What: What will be accomplished?

Where: Identify the location where work will take place.

When: Establish a time frame.

Which: Identify essential and constraining factors.

Why: Specific reasons and benefits of the accomplished goals.

M is for Measurable

Establish tangible criteria for measuring progress toward the goal’s attainment. Each milestone is a point of potential exhilaration that motivates you to continue. When verifying that you have set measurable criteria, ask yourself questions like:

How much?

How many?

How will I know when it is done?

A is for Attainable

This is where the priorities or the “why do it at all” questions help. If you have items on your list that really matter, you can find ways to accomplish them. Your dedication to accomplishing these goals will drive you to develop attitudes, abilities, skills, and the financial resources necessary to reach them.

If your goals seem far from reach, remember that you have the ability to make them attainable by growing and expanding to match them. Each time you do what you previously believed could not be accomplished, you are improving your self-image, which allows you to feel worthy of the rewards that reaching your goals can give.

R is for Realistic

Choose goals that are representative of substantial progress and include objectives toward which you are both willing and able to work. It isn’t necessarily true that your goals must be set low in order for them to be realistic. You are at the helm of your own ship, after all.

T is for Tangible

Your goals ought to be something you can experience with one of the five senses. If you must have an intangible goal, like one that is tied to self-improvement, relate it to a tangible one through offering yourself a reward that you can experience.

Remember that none of your goals are cast in stone. If you are persistently evaluating outcomes while working toward them, you may find adjacent goals that actually will bring greater improvements for your lifestyle or business. When this happens, go back to your list and adjust it accordingly.

While it is important to work toward things that you need, if these things are not what you want, you’re far less likely to accomplish your goals. Ultimately, you must WANT something in order to take ACTION to acquire it. This is where my favorite mindset philosophy comes in: DREAM – DO – HAVE.

Dare to DREAM so you will DO what is necessary to HAVE your dreams come true!

Thank you for your readership, always, and here’s wishing each of you a Happy and Prosperous New Year!

Are You and Your Business Partners Oceans Apart?

We’ve all been taught to avoid the truth if we fear that our news has potential to upset someone whom we like and respect, but being honest about your feelings doesn’t mean that you have to be tactless. If we understand and appreciate that everyone has varying degrees of skill with regard to handling feedback, and that they aren’t always in control of their emotional responses, there’s always a way to talk over any issue and reach a reasonable compromise.

Honesty is the best policy and, in my humble opinion, a lie by omission causes the most harm. The world would be a much better place if everyone was capable of directly confronting differences of opinion and, if these cannot be reconciled, choosing to disagree without the having the discussion escalate to an argument or parting of ways. Over time, I’ve decided that the culprit impeding this outcome is ego … and egos can be so demanding of respect!

So what can you do if you know you’re onto something and your ideas are repeatedly ignored by your business associates? Do you give up and become resentful or do you try to find another way to get your point across to them?

You can’t cross the sea merely by standing and staring at the water. Don’t let yourself indulge in vain wishes. ~ Rabindranath Tagore (1861 – 1941)

In any business, risk is necessary but risks should always be meticulously researched and measured against your assumptions before making a change. Consider carefully whether or not your idea is too great of a leap to be considered at this time but, by all means, don’t give it up if you strongly feel it can work better than the track you are currently on. With just a little more thought, you may find a way to redesign your proposal that seems less risky to your associates.

Only a fool tests the depth of the water with both feet. ~ African Proverb

Because the river moves around it, a rock appears to be stronger but physics have proven that moving water will prevail and keep its own course over time. After many attempts to dictate the route of the Mississippi River, The Army Corps of Engineers have learned that the river knows its own way and serves no man.

In the confrontation between the stream and the rock, the stream always wins – not through strength, but through persistence.- Anonymous

Although the process that makes water stronger than a rock is erosion, we aren’t disempowering anyone by gently persisting about something that we know, in our hearts, is a better way to go. There are people who will not pursue any idea that they don’t feel is their own. With theses sorts of personalities, planting the seed of your idea and waiting for them to embrace it as their own usually does the trick, however, it does require that you don’t have a need to be recognized for it. Giving the idea to your business associates from the onset with phrasing like, “Have you considered …”, is an extremely non-confrontational assertion and somewhat of a subliminal command to for them to at least think about your recommendation.

Bodies of water also give us another metaphor for our business relationships. Many rivers open up to the sea but the sea is its own force and returns tides to the rivers. The mixture of salt and fresh water produces a brackish habitat where creatures from both worlds can adapt and thrive. Using this metaphor, when your original idea is improved upon through your business colleagues’ consideration, blending thoughts can result in a better plan and those who are capable of adapting can prosper more.

So it all seems to come down to being open and honest to learning and not being attached to the outcomes of your suggestions, doesn’t it? If we can keep our demanding egos out of the way, forward progress is always an option. Whether the progress is a business idea or a shift in how you interact with your associates, a positive change of direction is normally a sign of growth.

We all know there are times when it is necessary to have a conversation that has potential to become awkward. If you are a good communicator, you can usually find a way to avoid arguments but there are times when the only option available is to agree to disagree. If you are capable of speaking your mind, in spite of any fears, and managing your emotional response to having your ideas rejected, you’ve risen above the constraints that your ego can create.

Business Styles and Personal Productivity

Recently, a newsletter arrived from a self growth website which explained dysfunctional personal productivity personalities.  Because productivity styles can mean the difference between entrepreneurial success and failure, I’ve taken some time to analyze this topic and provided some tips and techniques that have worked for me in overcoming some of these productivity inhibitors.

Scrappers are people whose offices and desktops look like modern art with a collage of post-its and paper scraps. While conventional wisdom accepts that a cluttered desk is an indication of a cluttered mind, disorganization can result in missed deliverables and over-commitment.

If this is your style, whether you are working solo or in a partnership, adopting a method that serves to remind you of what you have to get done can be useful. If you have a partner, ask them to send you email reminders prior to important deadlines. Using a website like Airset allows you to set up a system that will allow you to put your projects online with automated reminders about deliverables sent to your email. Face it, a little up-front planning is needed for any endeavor.

Pilers don’t throw anything away and file nothing. They can sometimes find what they’re looking for quickly but watching them sift through their piles of books and papers can be unnerving. Many years ago, I adopted the tactic of dating a hard copy document if I decided I needed to keep it after reading it. These days, most of my files are kept on my hard drives and I still tend to precede the document name with a date, year first, if I’ve taken notes using notepad.

My work entails writing business proposals, marketing plans, project plans, website code, creating website artwork, and researching business niches for good keywords. For obvious reasons, these sorts of files must be saved for a period of time, even if the project has ended.

At the end of 2008, after a cross country move, I spent several hours moving client folders off of removable storage and onto a secure location within my network. Using a standard folder hierarchy allows me to go directly to a client folder to locate content related to those projects immediately. My clients seem grateful for my organizational skills when they call to ask for a password that they’ve lost!

At the beginning of each month, I set aside a few hours to sift through file folders in my inbox and in the folders related to my clients. It takes time but the time is well spent.

Multi-taskers have millions of things they hope to get done simultaneously and seem to take great pride in talking about their long lists. A downside for some can be that a lot of things get started but none get finished.

If you are an entrepreneur with clients or own multiple websites multi-tasking is essential, but if you’ve begun to notice that you are feeling frazzled or overwhelmed by your work, it is time to take a serious look at your short and long-term goals. Document all the things you have committed to do and organize it into do-able chunks that are prioritized by relevance. Aside from family commitments, your most important things to do ought to be money making activities.

Interrupters are people who do not respect the fact that, just because they have time to talk about something now doesn’t mean that you do. Because I am sensitive to this myself, I’ve always allowed the person whom I think I need to talk with know why I’d like to talk with them right away and never fail to ask if it is a good time for them.  If not, I negotiate a more agreeable time for them.

When someone unexpectedly requests my time, I’ve found that my best defense is to be honest with them and, if I don’t have time for the interruption, I force myself to refuse and also let them know when I’ll be free. If I feel that I can take a few minutes at the time of their request, I inform them up-front about my time constraints and hold to that schedule by curtailing the conversation or text chat when the boundary is reached.

Procrastinators claim to work well under pressure and use this an excuse for putting things off to the last minute.  Their real crime is that they work on things that they would prefer to work on, which pushes the less desirable, and often more complicated tasks, back and puts them at risk.  Sure, we all are guilty of this sometimes but the pursuit of business success doesn’t guarantee that everything you will work on will be easy to do or fun.

Unmanaged, a procrastinator on a project can create havoc for other members of that group. While their creativity and talents might be welcomed, they require firm guidance and follow-up from a more focused team member.

Socializers waste incredible amounts of time communicating in frivolous ways. With the advent of social networking, people I was fascinated by and lost a lot of time on Twitter, LinkedIn, or Facebook profile updates and responses. In an effort to recover my productivity, I established an hour or so at the end of each day to research topics that I wanted to post to Twitter and set up those transmissions using one of the many tools available for timing them. Many of these sites allow you to update multiple social networking profiles at once, and always include the highest quality sites.

I use a very similar tactic with both phones and Skype. Turning off the ringer during times of the day that I need to focus avoids phone interruptions. Similarly, putting Skype on “do not disturb” allows me to see when someone is trying to contact me and choose whether or not an immediate response is required.

Meeting addicts are obsessed with convening to talk about what needs to be done. So much time can be spent talking about such things that forward progress is hindered, however. If you’re invited to attend a meeting, ensure that the organizer has a clear purpose and that an agenda is issued in advance. If the topics on the agenda do not mesh with what is critical to your immediate needs, take care of yourself and decline the meeting.

If you are in a meeting and have something to say, make sure to apply the “So What?” rule before opening your mouth. This may sound like a statement from a belligerent child but it does force you to evaluate, in advance, whether what you have to say is relevant or useful to the group at the meeting.

E-mailers never use the phone to deliver a short update and love to broadcast their news to everyone on their list. It’s easy to ignore superfluous emails but, IM broadcasting software has opened up a new arena for pointless intrusions. Without exception, everyone who uses a Skype broadcast tool to communicate useless BizOp updates has been blocked from my list.

Although it is “polite” to acknowledge communications, not all emails or IMs require a response, especially if it is an uninvited solicitation.

Crisis creators dwell in a state of anxiety and everything is critical to them. The slightest problems can be exaggerated and their alarmist mentality can draw you in, if you are close to them.

Fire-fighting is a part of my business, at times, but keeping a cool head is what my clients seem to appreciate. If I cannot see an immediate way to help them with their problem, I will get offline with them and decide or do what needs to be done.  If I am able to resolve the issue without another conversation, I will provide a real-time or email update apprising them of the cause and the solution.  If not, I get back to them with a strategy, at the very least.

Packrats have never thrown away anything in their lives. This obsession has become a matter of public interest but not all packrats are obsessive. Like clearing your desk on a regular basis, making sure that you are eliminating clutter from your office or household is important. If you are looking over stored items and realize you haven’t opened the box or envelope in years, then you might want to honestly evaluate whether or not you need to hang onto it.  Heirlooms and sentimental keepsakes are excluded from this, of course.

As a funny aside, I once dated a fellow like this. The first time I visited his apartment, the ancient computer equipment and stacks of printouts astounded me. There was but a narrow path between spaces to a chair in the living room, his bedroom, and the kitchen. When he moved to a new place, all of these things wound up in his garage too.

Perfectionists are so interested in doing things perfectly that they often neglect to get them done. Impressively long lists and generous offers to contribute are part of their style. I have known people whose lists were so lengthy that their lack of completion caused them distress. I recommended that they write shorter so things could be checked off quicker.

This actually could related to the multi-tasker style and the suggestions that were made there are certainly applicable here. Organizing and prioritizing “to-do” items into chunks that are easily accomplished not only gives a sense of personal satisfaction but also demonstrates to your clients that you are capable of getting things done.

Workaholics can’t seem to think of anything but work and also can’t seem to avoid reminding people about how much they work. As an entrepreneur working from my home, it has sometimes been difficult for me to separate my work and personal life but assuming dual expenses for internet, phones, utilities, and rent is not desirable to me.

I’ve learned to schedule “free time” for family, play, and personal projects figuring that, as human beings, we were given life so we could experience pleasure and fun too. I like to call these things mini-vacations, for all work and no play can make one dull and this is the last thing any of us wants.

This is a fairly complete list of things that could be hindering your entrepreneurial output but I’m sure that those of you reading this post can think of others. Any thoughts that you have and want to leave as comments are welcomed.

During holiday seasons, when stress levels are higher, make sure to take care of yourself.  Business success may be critical to your survival but so is your emotional health.

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Stretching Your Mind Can Change Your Life

Personally, I find it enjoyable when something occurs that seems synchronous to events in present time. The other night, such an event occurred. While rifling through papers in my desk drawer, an old fortune from a fortune cookie surfaced. It read:

One’s mind, once stretched by a new idea, never regains its original dimensions.

Not only is this synchronous, it also is quite profound in its simple truth. Once we are introduced to a something new, and the idea takes root in our minds and inspires us, it is virtually impossible to operate as we did before we made our important discovery. Our eager minds pursue the idea and follow it through permutations and twists in the road. Through every turn, the core substance of the idea remains solid and the starting point to which you always will return, should you find a need to adjust your strategy.

Take Internet Marketing, for example. A few years ago, I decided that I would get income through online means. In pursuit of that vision, I began subscribing to newsletters and purchasing products that would teach me more about what people were doing online. Some of the methods that I evaluated are not ones that I use or would recommend but knowing what not to do is almost as important as knowing what to do, isn’t it? Due to my interest and attention, I am able to spot trends and, when it comes to opportunity offers, I have a pretty good system for separating the wheat from the chaff.

As I put my own business plan into motion, it became obvious that my time spent learning about internet marketing was extremely helpful to people who retained my services for Online Branding and wanted to get income online. Although my primary source of income is still from my consulting services, the fact that I am personally involved with my customers doesn’t imply that I am not an internet marketer. I source all of my business through Web 2.0 methods and enjoy working with people.  And, the best part is that my business is totally portable!

My mind was stretched by this self-induced learning. When I approach a potential business liaison or client, it is nearly impossible for me to talk merely about traditional means of sourcing new business. When I set up ecommerce websites, for instance, I make recommendations beyond layout, technology, and graphics. My degree is in business and that knowledge, coupled with the education I’ve received through personal learning, are assets to any project that I undertake and I’ve heard this repeatedly from my customers.

All things being equal, anyone who has a business website is an internet marketer. Here is the caveat; The prettiest site in the world cannot manufacture new business and cash flow. If you haven’t done so already, it would serve you well to either learn about, or retain the services of someone who knows about techniques that will improve your website’s visibility through Web 2.0 techniques that drive targeted traffic, as well as performing the time-consuming SEO methods that will get it listed and ranked by search engines. If you are in business and have no website, you are missing an incredible opportunity. Personally, I feel that it is sheer folly to be in business without a website. It is statistically proven that people look online prior to making any purchase decision.

Even though this is not business related, our minds can also be stretched by ideas that present themselves in everyday life. The ingenuity of a child who is working out a difficult “engineering” problem related to the sand castle they are building at the beach is a good example. It is not an unimportant side note to remind you to take time to relax your mind so as to re-charge your creative juices.  If we are fortunate, we retain our sense of awe about things that are remarkable and have nothing to do with making money, like watching swallows soaring high above us or witnessing the oceans that undulate through forces unseen. At times when you need to restore yourself, it is good to have easy access to those things that opened your mind as a child.

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Career Cogwheels and Cul-de-Sacs

There is little doubt that times are tough.  Personally, I know many people who have been out of work for extended time periods, have been forced into bankruptcy, or have lost their homes through foreclosure.  All their stories are all very different but, in every instance, the root cause was attributable to the fact that they held onto some belief that doing things the way they’d always done them would continue to work … a definition for insanity, in some circles.

Personal belief systems can keep us stuck so why not turn that to an advantage?  Believe that change is critical in order to thrive in the face of adversity.  Granted, basking in the things that we are familiar with makes us feel more comfortable but isn’t it time to confront the awkwardness of change and try something new?

Orchestrating a significant change in your life takes some amount of confidence along with a dash of creativity and perseverance on the side.  But there may be more important ingredients that you must NOT include in your career shift recipe, which would be to subtract your mental image of what you do along with the ideas that your family and friends have about what will work for you.

Recently a friend of mine, who has been a nurse for over 40 years, offered this bit of profundity while ruminating about a career change in her 50s.

“The more that I let go of, the closer to no thing I will be”

When we hold onto roles, like having a job or being jobless, our freedom to choose a new life is limited by the belief of what we are.

Why not try an experiment at your next social outing?  When someone asks you what you “do”, answer their question by listing the things that you are passionate about doing, rather than providing the rote answer that they are expecting.  It might give them pause but it also might expose you to a like-minded person who is interested in one of your passions that they have considered turning it into a source of sustainable income.

As for the people that say “Uh huh…” and walk away, let them rotate in circles of  small talk with less passionate people.  This experiment is not about making anyone feel comfortable that you are a “normal” person.  It is about shifting your own mindset and visualizing the possibilities of your passions as a possible source of future income.

What Do We Do to Get Income?

When we consider the amount of time we spend imagining and pursuing success, is the accounting a fair balance?  Putting it another way, do you spend too much of your time working to get income?

Pondering the difference between what we want and what we have can lead us to inspiration.  The gift of human ingenuity and creativity is a blessing.  That is the truth.  There is joy in bringing our ideas to life.  Hours of refining our vision, laying out a plan for monetization and developing our product bring great satisfaction.  The aroma of success lingers with each accomplishment along the way.  We taste it when we get income as a result of our efforts.

When we look up from our work, what do we see?   Has our success changed us and, if so, is the change positive?

Take a few minutes to watch this video.

 

The video evoked a strong emotional response.  It seems appropriate to share it with my readers for, no matter what you are dreaming of, I don’t want you to ever lose the fire in your belly that inspires you to continue to create more.

How to Analyze Competition for Entrepreneurial Success

As a seasoned entrepreneur, it is clear that having knowledge of business basics provides a competitive edge.  Regardless of the scope of your vision, if your intention is to use it to obtain financial freedom, having a solid plan is critical to your success.  As a former colleague of mine once opined, a plan is something that you can use to measure your progress. Also, if you are seeking to secure investor funding, you must have a formal business plan to present for their consideration and it must include detailed market research.

Assuming that you believe that the money or time you are investing or plan to invest in your business is valuable, you will find it easy to appreciate the need to analyze your competition but you might be asking yourself how to go about it.  Essentially, competitor analysis involves two basic activities:

1. Obtaining information about important competitors
2. Using that information to predict potential competitor responses

Casual knowledge about your potential competitiors is normally not enough.  Using a systematic approach to gather a wide array of information permits you to make informed decisions about how to best position your new product or service or how well the business you are planning to join is positioned.  The objectives and assumptions of competition are indicators about what they are doing and what they are capable of doing, which defines their strengths and weaknesses.  As you uncover market risks from studying competitiors, remember that one person’s risk can become another person’s advantage.

There are many sources of public information for you to use while gathering your intelligence.  If competition is organized and traded publicly, you can review documentation required for them to sell stocks.  This includes shareholder reports, 10K reports, analyst interviews, management statements and press releases.  Most of this information is available on sites like E*Trade.  Another good resource is to scan press releases from PRweb, a site you might even use in the future.

If you understand the business objectives of your competition, you can more accurately predict their response to various competitive moves.  As an example, a business focused on short-term financial goals will not be willing to invest financial resources in response to an apparent competitive attack.

You can determine what is important to your competition by learning more about their structure.  An organizational overview will reveal a lot.  The functions that report directly to the chief executives are those that will, most likely, be given priority.  If your idea targets functions with lower priorities to your perceived competition, it is your advantage.

If you clearly understand the assumptions of your competition, you can predict their reaction to your interference.  Imagine that the company has previously suffered a product failure which has caused their executives to determine there is no market for that product or service.  This knowledge presents an opportunity to be explored.  Little known companies like Honda have leveraged advantages just like this!

Evaluating your competition’s resources and capabilities provides insights into what competitors are capable of doing in response to a threat.  You can delve further to determine how quickly they will be able to react too.

After gathering information about your competition’s objectives, assumptions, strategies, and capabilities, compile it into a response profile of possible moves they might make against your idea.  Like pieces on a chess board, you can use these profiles to anticipate the possible moves on the board well in advance of the plays and have a plan of action that keeps you in the game.

We all are aware that that there is competition in any market.  Whether your business idea is online or offline, it is critical to evaluate competition, as well as buyer behavior.  In fact, some schools of thought suggest that one ought to evaluate consumer behavior prior to analyzing anything else, which makes sense.

Michael Porter, the man who imagined strategic analysis, was a business thought leader in the early 1980s but … well … his stuff was written in the early 1980s.  As we all are aware, business has changed significantly since then, partially due to major advances in technology.  A couple of theorists named Brandenburger and Nalebuff extended Porter’s work to include evaluation of consumer activity using something called the Six Forces Model in the mid 1990s, and their work involves game theory.

If your product is internet based, there are many tools that measure what people are searching for and some even offer statistics about consumer behavior but, without knowing what data was used to calculate it, the onus falls on you verify assumptions you have made about the market niche you want to reach.  The next post will provide more details about this topic, so stay tuned!

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