(By Brian Moran)
“Does your road trip have one destination or are you planning to see the entire country? As a business owner, is your goal to have a business with one location or do your entrepreneurial aspirations include opening locations in several markets and doubling the size of your company in three years? This is a critical question. If you are successful, people will want to partner with you. They will ask you to visit their town or city. That means more money, more resources, and a new map. Don’t let other people change your destination. Stay focused on where you want to go!“
Who doesn’t like road trips? On TV and in the movies, road trips are the ultimate getaway from reality. Pack a duffel bag, grab a few friends, and hit the open road without a care in the world. I’ve taken dozens of road trips in my life—most were good to excellent and some were downright awful. One thing I learned from all my trips is that the more I planned ahead of time, the more likely it was that I would have a good experience.
For many years, I’ve been telling entrepreneurs that their business plans need to work like GPS systems. The plans should be living, breathing documents that help them navigate the murky waters ahead and successfully take them to a place they’ve never been before. I finally decided to marry my twin loves: The open road and great business plans. Here are nine questions to ask yourself today—before you take your next trip.
1. What type of driver are you? Some drivers treat road trips like joyrides, while others methodically plan out each detail and have their cars inspected to make sure there isn’t trouble along the way. As a business owner, there’s something sexy and magical about starting a company and seeing where it takes you. Unfortunately, this isn’t the movies and Ben Affleck or Angelina Jolie isn’t starring as you. Be the second driver and take time to decide where you want to go, how you will get there and what you will do if you hit a pothole. The time to ask if you have AAA is not afteryour car breaks down in the middle of nowhere.
2. What kind of car are you driving? Is your ride a venture capital-backed sports car with big expectations, or are you driving a more sensible car that’s designed to get you safely from point A to point B and back again many times in the most economical manner? Don’t get into a car that you cannot drive and don’t start or build a company that you cannot run. It’s easy to lose everything you put into your business by making poor decisions (e.g. taking money from investors, building too fast and buying technology you don’t need).
3. Where do you want to go? Does your road trip have one destination or are you planning to see the entire country? As a business owner, is your goal to have a business with one location or do your entrepreneurial aspirations include opening locations in several markets and doubling the size of your company in three years? This is a critical question. If you are successful, people will want to partner with you. They will ask you to visit their town or city. That means more money, more resources, and a new map. Don’t let other people change your destination. Stay focused on where you want to go!
4. Will you have other drivers and passengers? If the trip is long enough, you can get there faster if you delegate driving time. Are the other drivers qualified? Do they want to go where you are going? Are you comfortable dropping them off at an earlier stop? In startups and small businesses, some employees who don’t have an equity stake in the company are likely to leave if or when things get tough. As with all the other questions I ask here, it’s better to know the answer before you lose a driver rather than when you’re in the middle of your trip and wondering how you will reach your destination. You also want to make sure that each passenger brings a set of skills that will enable you to successfully reach your destination. No free rides!
5. What’s your ETA (Estimated Time of Arrival)? If you’re driving a conservative car with one destination and will drive the same route over and over again, then you really don’t have an arrival time. This question pertains more to the entrepreneurs with multiple destinations and financial backers who want to know when they can expect a return on their investment. They expect their drivers to reach certain milestones (e.g. $10 million in revenue, open locations in four markets) in a predetermined amount of time because they eventually want to sell the company and buy a new car with different goals. For the entrepreneurs reading this post, make sure you allocate for pit stops, blown tires, and other issues along the way before you agree to ETAs that don’t allow for any mistakes. Missing milestones can be the quickest way to lose control of your company.
6. How will you get there? What’s the best route to take to get to where you want to go? If you go back and forth to the same place every time, does it make sense to have a backup route just in case? I have driven from New Jersey to Long Island to visit relatives at least 200 times over the last 20 years. The main trip is 42 miles and I can think of at least 15 different ways to get to the same destination. If your goal as a small-business owner is to generate at least $500,000 in revenue every year, how many different ways can you get to that number? What happens if you lose your largest client? How strong is the pipeline for new business?
7. Who’s paying for the trip? Money for your business is like fuel for your car.The sports-car drivers have backers, and backers have expectations. On one hand, you’re playing with other people’s money. On the other hand, you’re playing with your time, probably some money and your dream. These are all valuable items, with time being the most precious currency. If you’re a conservative driver, the money is probably coming out of your pocket. This means you have a finite amount of fuel for your car. You must pay close attention to gas stations. In business, your receivables are your gas stations. If your customers are late payers, it means longer distances between gas stations. Eventually you will run out of gas. Don’t let that happen. Stay on top of your receivables and watch the cash flow (inputs/outputs).
8. Do you have a backup plan? I’ve given you a number of different scenarios in which you can get detoured on the way to your goals. It happens to all drivers—but not all drivers have a backup plan. The best time to review a backup plan is before you get into your car. Here are a few questions to think about as you work on plan B: What would happen if your largest client left you for a competitor? Even worse, what would happen if they declared bankruptcy and took your receivables with them? Do you have a plan in the event a natural or manmade disaster strikes your company? Where will you go for money if your bank account suddenly hit zero? Some of the smartest, best-backed entrepreneurial companies failed for the simple reason that they never thought of any route other than from A to B.
9. What supplies do you need? Think about everything you will encounter on your trip and pack the right supplies in case something unforeseen happens. Do the same for your business. Step away from the day-to-day operations long enough to envision what you will encounter in the next six to 12 months. Do you have the resources to handle the downside as well as the upside? What if you landed an account that doubled the size of your business?
Consider this road-trip itinerary the draft of your next great business plan. Stress-test the plan’s viability on a regular basis—and don’t forget to enjoy the ride!
“Opinion pieces of this sort published on RISE Networks are those of the original authors and do not in anyway represent the thoughts, beliefs and ideas of RISE Networks.”