Business Planning Secrets for More Entrepreneurial Success with Carl Baumann

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Business planning can feel like an intimidating process. If the very thought of writing one makes your eyes glaze over, fasten your seat belt as certified SCORE mentor Carl Baumann explains why crafting a business plan is a dynamic roadmap to more business success.   

What You’ll Discover About Business Planning:

• How business planning leads to more achievement and success 
• The essential elements of a solid business plan
• Where entrepreneurs often get stuck in business planning process and how to get unstuck
• The amount of detail your need for business planning
• The biggest mistake entrepreneurs make in business planning
• PLUS much more to increase your business planning success

Guest: Carl Baumann

Carl Baumann is a certified business mentor with SCORE specializing in counseling in business planning, strategic planning, general management and management finance & accounting.  Carl has an impressive track record in helping clients successfully launch their businesses and create hundreds of new jobs in the local community in the process. 

Carl teaches business planning courses and seminars for SCORE at various continuing education venues in the Chapel Hill, NC area and his practical, down-to-earth teaching style has made him a popular mentor.

Carl’s work with SCORE is the culmination of a 34 year career, some of it in commercial banking with First Citizens Bank and most of it with the Miller Brewing Company in numerous financial positions including Brewery Controller, Corporate Controller and Group Director – Sales & Marketing Finance. 

Carl earned a bachelor’s degree in Business Administration from UNC Chapel Hill and an Executive MBA from the Peter F. Drucker Graduate School of Management, Claremont Graduate University, Claremont, CA.

Related Resources:

If you liked this interview, you might also enjoy our other Entrepreneurship episodes.

Contact Carl and connect with him on LinkedIn, and Twitter.

Carl’s suggested resources for effective business planning referenced during the interview:

• SBTDC Business Start-Up Resource Guide
• Building a Sustainable Business – A Guide to Developing a Business Plan for Farms and Rural Businesses developed by the Minnesota Institute for Sustainable Agriculture.  Co-Published by The Sustainable Agriculture Network
• Strategic Thinking for Smaller Businesses and Divisions by William Lasher
• Preparing Effective Business Plans – An Entrepreneurial Approach by Bruce R. Barringer
• The Successful Business Plan – Secrets & Strategies by Rhonda Abrams
• Six Week Start-Up by Rhonda Abrams
• Business Model Generation by Alexander Osterwalder & Yves Pigneur
• Successful Business Research by Rhonda Abrams
• Branding Basics for Small Business: How to Create an Irresistible Brand on Any Budget by Maria Ross
• Also see the business model canvas template

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BUSINESS PLANNING SECRETS FOR MORE ENTREPRENEURIAL SUCCESS WITH CARL BAUMANN

Does the thought of writing a business plan make your eyes glaze over? Well, then fasten your seatbelts, my friend, because our next guest, Mr. Carl Baumann, can help you simplify the process so that you can unlock the secret to more business success.

This is Business Confidential Now with Hanna Hasl-Kelchner, helping you see business issues hiding in plain view that matter to your bottom line.

Carl Baumann is currently a certified business mentor with SCORE, who counsels clients in business planning, strategic planning, general management, finance and accounting. In the past four years alone, Carl has had 37 clients launch businesses, creating over 151 new jobs. That is just amazing.

He teaches business planning courses and seminars for SCORE, and his work with SCORE is actually the culmination of a distinguished 34 year career, some of it in commercial banking with First Citizens Bank and most of it, with the Miller Brewing Company in numerous financial positions, including brewery controller, corporate controller, and group director, sales and marketing finance.

Bottom line, Carl knows his stuff. He’s also earned a Bachelor’s degree in Business Administration from the University of North Carolina in Chapel Hill, and an executive MBA from the Peter F. Drucker Graduate School of Management at the Claremont Graduate University.

It is such a treat to have him here today. Welcome to Business Confidential Now, Carl.

Thank you, Hanna. It’s great to be here.

Well, wonderful. The whole idea of business planning just is such a stumbling block for some people. Even if they have a plan, it probably could use some help, especially as their business is going along and they hit some roadblocks. So, help us start from the beginning. What exactly is a business plan?

Well, first off, I think it’s very important to let people know that when you write a business plan, you write it for yourself. A lot of people think that, well, I’m not going to go to a bank for a loan. I’m not going to go to investors, so I don’t need to write a business plan.

And so a business plan is very, very important for you as a business person. First of all, it is a blueprint for how you operate your business. A business plan is a document that covers all aspects of your business. It enables you to take a look at the entire business operation.

More importantly, though, a business plan forces you to do some critical thinking and really analyze your business. It helps you think about all the areas of the business, and I’ve never had anyone that started the business plan thinking one way who finished the process in exactly the same way they thought they would at the beginning.

And that’s because it’s such a great tool for stimulating the analysis. And finally, once it’s written, it’s a terrific communications tool. Because if you have staff members, it enables you to train them to get everybody on the same page because every business wants to consistently deliver both their marketing messages and their products and services to continually strengthen their brand.

So, it’s hard to say in one sentence what a business plan is, but it is all of those things.

Well, it sounds like there’s a lot of advantages to having one. So, why do some startups or even existing small businesses resist writing one?

I think the number one resistance is probably the time it takes to do it. A lot of people see action as much more important than planning and they want to get on with it. They want to get rolling and I can certainly understand that.

But it’s so important that from the very beginning of your business experience that you acknowledge and the importance of and take the time to really work on the business as well as in the business, because only by working on the business and by on the business, I mean planning and strategizing.

Now working on figuring out ways to make the business more successful, to make it grow, but only by working on the business will you really grow the business and you just need to take time to do that, and it starts with writing the business plan.

Isn’t a marketing plan enough?

No, a business plan is a marketing plan. I have clients who come to me and they say, “I want to write a marketing plan.” I said, “Great, let’s write a marketing plan.” But if you think of all the elements of a business plan, you need to write virtually the entire business plan for it to become a marketing plan. Let me explain that.

You need a foundation before you can actually develop a marketing plan and elements on that foundation are understanding your mission, understanding the values of your business and defining the values of your business. Having a measurable vision where you want to go. I mean, to me, it’s very hard to put a marketing plan together if you don’t know where you want to take your business.

Then, you need to understand the dynamics of the industry. You need to certainly have an in-depth understanding of your customers because your marketing plan is not worth the paper it’s written on.

If you don’t have that in-depth understanding of your customers, you need to have an understanding of your competition and how you’re different from the competition, and what is your competition doing out there in the area of marketing? What do you like? What don’t you like? What are their strengths? What are their weaknesses? How can you play off of that with your business?

You want to understand the laws and regulations that affect your business. You want to have a strong operations plan so that you can deliver on your marketing promise. And at the end of the day, those are all the elements of the marketing plan.

Then you add the marketing plan on top of that, your brand description, your marketing messaging, how you’re going to communicate your marketing messaging, and what is your sales process. So, to me, a marketing plan and a business plan are one and the same.

Well, that’s certainly makes a lot of sense when you explain it like that, and it also sounds like it’d be pretty difficult for any one person to have all of that in their head sorted out very well.

Right. Normally, when people start a business, they’re very strong in the technical aspect of what that business is going to do, and I find many people have no exposure at all to business operations techniques, sales techniques, marketing techniques, market research, and so, this really forces an individual to get into the business aspects of their enterprise.

Well, that’s a fair comment because I found over the years that besides their own technical strength, one thing that’s missing is legal literacy. They seem to think that, “Oh, if I just incorporate, then that covers them for legal stuff and liability. Oh, I have insurance,” but we all know that you don’t get discounts for making a lot of insurance claims. And if you make a lot, pretty soon, you don’t have it.

Right. Plus, if you haven’t checked out the regulations and laws, you could launch your business and be rocking and rolling for a few months. And then a knock at the door comes and it’s a regulator and they shut you down.

That’s right.

And there’s some real horror stories about that. Doing your research and really planning for compliance with all the laws and regulations is an important piece of a business plan.

Yep, most definitely. Well, it sounds like you’ve described the basic building blocks of a solid business plan, and are any of these blocks optional?

The only one that I treat is optional is the market – excuse me, it’s the industry analysis. And if a client comes to me and they’ve been in an industry for 10 or 15 years and really know the industry, we don’t spend a lot of time on an industry section, even if they’re going to a bank.

I tell them, “Write a couple of paragraphs, and just so you have a good overview of the industry and there’s no need to spend a lot of time on that.” If I have a client that’s brand new to an industry, then of course, we do a full industry analysis so they know what they’re getting into.

And I’ve had clients that have come, and they’re jumping into a new industry and they actually go through the industry analysis and decide that this business is not for them.

Once they fully understand the ins and outs of the industry and the issues facing the industry, and so often you write a business plan, sometimes you write a business plan and it turns out that that once you do this analysis, it’s not the way you want to go, or again, you change the way you want to go.

But that’s about the only part of the plan that I consider optional. Everything else is critical to the operation of the business.

How much does the type of business someone wants to go and determine what goes into the plan, say, a service business versus manufacturing versus something else?

Sure. The complexity and size of the business, the type of industry really dictates how long and how involved the plan is going to be. I’ve had people write plans that were individual consultants at a very narrow customer base.

Customer segments have written brilliant plans that were maybe 15-20 pages long. I’ve had other businesses, manufacturing businesses, retail businesses, more complex businesses that have a lot of moving parts.

And their plans tend to be a little bit more involved, sometimes a lot more involved. If you add on a layer of I’ve worked with several breweries and a liquor distiller and you add on federal government requirements and some things like that, then the plans can get quite involved. So, it really depends on the complexity of the business. It depends on the complexity of the customer segments and some of those issues. Does that make sense?

Yeah, it does make sense but I guess I’m still wondering, in terms of topics, certainly. But within any particular topic, that’s one of these building blocks, how much detail does someone need to get into?

You want to put sufficient detail in there to where your plan can be understood. Even though the plan is for you, you want to write it in terms of – or from the aspect of the customer. So, let’s say products and services.

Products and services are often a section that that folks, that they really know their products and services in their mind. They feel that everybody should understand their products and services. So, they’re pretty brief. They say, “I do this, this and this, and here are a couple of benefits.”

And then I always come back to them and I say, “No, you really need to explain this.” Just like your customer absolutely doesn’t know what you’re talking about. And so when you sit down and write this in terms of how you would explain this to a customer who has no clue what you do, then it becomes more detailed.

You go more in depth in the features, you go more in depth there with the advantages and advantages are those features that your competition doesn’t offer. You go more in depth with the benefits or the value proposition and the unique value proposition and how the service works, how the product works.

And usually with my clients, we put all that information on their website because today, we’re in the age of the buyer where we used to be in the age of the seller.

Before the Internet, you’d get all your information from the seller. Not all, but maybe 75 to 80%. You’d let your fingers do the walking through the yellow pages and you’d call them up or go to their place of business. And that was your only source of information for whatever it is you wanted to purchase.

Now, with the Internet, businesses have about 20-25% of the input for the buyers, and you want to make that work. You want to really help them evaluate the products and services that you are trying to sell to them. Some people just want the Cliff Notes. So, when I have people put this on the website, I do a Cliff Note version, just very brief, “Here’s what we do.”

But then I have a learn more button where you put all the data here, all the features here, the advantages here, the benefits. Here’s a unique value. Here’s how it works, because I think a lot of people are looking for that. And that’s a section that I would definitely make sure that that everybody writes a robust description of their products and services.

I like that idea for the website, a brief sketch, and then the learn more button for those people that want a deeper dive. I think that’s a terrific technique.

Yeah, that way, you accommodate all the learning styles.

That’s right. That’s right. So, in your experience, Carl, where do people get stuck most often when they sit down to write a business plan?

Usually, it’s in the market research and in the in-writing customer profiles and doing competitive analysis and in some cases, the industry analysis, because most of us haven’t done a lot of research since high school or college. And it does take looking up sources and digging into the research piece and all the pieces.

And normally, if I’m setting out a timeline with a client, I always have them set their own timeline. I always caution them to add more time in the research section because that is probably the toughest piece and it’s the most critical piece because, again, understanding your customers, understanding your industry, understanding your competition, understanding the laws and regulations are just a very key part of the foundation of the business plan.

The other piece that hangs a lot of people up and scares a lot of people is the financial projection piece. Not everyone is comfortable reading financial statements, much less projecting what their business is going to be doing from a financial perspective for the next one to three years. So, I find that that I have a template that I use with my clients that lays it out pretty straightforwardly but that’s another area that people get real anxious about.

So, what’s the best way to get unstuck in either the research or in the financial piece?

My advice is to get a mentor, and I mean, it’s amazing how many resources are out there for small businesses and how many free resources are out there. You have the SCORE organization that we’re members of. You have the SBTDC, which is all accredited, and that stands for Small Business and Technical Development Center, I believe, and they’re all across the state.

And matter of fact, SBDCs are all across the whole country. That’s a national piece of every state government and they provide free counseling. You have the small business centers in all of our community colleges with that offer free counseling.

You have various incubators around the various cities that you can join, and they have great mentoring. They bring in accountants and other people to help you with the financial piece. So, small businesses have just a lot of free, really strong resources to help them in all of the elements of their business plan.

Well, that’s very good to know. How long should someone expect to take in writing a good business plan?

Well, again, that’s going to vary with the complexity of the plan, you have size of the business. On average, it takes probably between 50 and 100 hours.

Wow.

That sounds like a lot, and it is a lot.

But if you consider the amount of time researching, the amount of time writing and most importantly, the amount of time just thinking about it, that’s what comprises that but I think much less than that, it’s not going to be as effective a plan. I wish there was some kind of candy I could give to make that sound better, but that’s what it is.

Well, if that’s the reality, that’s the reality, and it sounds like there’s certainly a lot of benefits to doing that. It’s like having a blueprint to building your home. You want to make sure you’ve got the right foundation. You don’t want to build a sandcastle because it looks pretty for a little while and then until the first wave rolls in.

That’s exactly right. That’s exactly right. The other reason you want to write a business plan, and I forgot to mention this earlier, is it helps balance your enthusiasm with the facts. And I would never be a proponent of losing your enthusiasm or your passion because enthusiasm and passion are what drive entrepreneurs. It’s so important.

But at the end of the day, if you’re investing all your savings, taking another mortgage out on your house, or borrowing money from your family and you don’t want to lose that, writing a business plan, you want to make fact-based the decisions. And your passion and your enthusiasm will drive you through this whole process and make you successful.

But at the end of the day, your business plan is a fact-based document and really, really helps you make those fact based decisions.

Perfect. Now, are there any other resources that you could recommend besides these mentoring groups that you’ve described earlier?

They’re specifically good books. I’m trying to think of a couple of them off the top of my head. There’s one called, I think, Writing Effective Business Plans. I don’t know. Does your site have a place for references?

Yes, it does.

Okay. So, I can give you a list of references because unfortunately, I just can’t rattle them off on the top of my head but there are several really, really good business planning books. There are several books about marketing, one marketing book that I do remember and I recommend it to all my clients is  Branding Basics for Small Businesses by Maria Ross. And it’s a paperback probably costs around $12.00 and it’s one of the best marketing books that I’ve ever used and I highly recommend it.

So, I will be happy to give you a list of books for your site because some of them are very well done. There’s one by a group called SARE and you can order it from SARE.org, which is a terrific workbook for planning like farm or rural businesses, and a lot of what’s in that workbook would apply to any business. So, I’ll give you a list of those.

Wonderful. And we’ll put that on the episode page on the website BusinessConfidentialRadio.com. So, that’s great. I always like to be able to put references and resources that people can use down the road because it’s one thing to listen to an interview like this and it all sounds good that you try to take notes sometimes, and sometimes, it’s so content rich.

That’s what I love about the experts that I interview, such as yourself, because you are such a wealth of knowledge. I always like to think of it as you folks are a shortcut to business success, which is exactly why I’m doing this program.

Sure. Yeah. A lot of what I learned is from these books, and I have a list of probably eight or nine that are just invaluable.

It should be part of everybody’s library.

Absolutely. And matter of fact, I do give these lists to our public libraries, encourage them to buy them for their shelves, too. So, hopefully, some of them will be at the library as well.

That’s great because if you don’t want them on your shelf, at least you can have access to them but half of the battle sometimes is having a little guidance from folks like you who can say, “This book is better than that one. And if you’re going to start, start with this one over here.”

Yes. Absolutely.

So, I appreciate that.

Yeah. The list I give you will be the books that I’ve read and I would highly recommend.

Awesome. I appreciate that, Carl.

Sure.

Now, when somebody has written a business plan, I’m sure there’s this big sigh of relief. They’re looking at all these pages and going, “Yippee, I did it,” like, “Boom, there it is. The roadmap to the future.” How often does it need to be revised? Is that one and done?

No, it’s never one and done. It’s a dynamic document. It’s not like a 10th grade English paper where you write it, turn it in, get a grade, and you’re done. You want to always keep updating it because in reality, the minute you open your doors, you know your business is going to be different than you planned it.

There are always going to be differences, and you want to be constantly updating your business plan to reflect the learnings that you have once you’re in business. You’ll be updating your products and services. As you add new products and services, you’ll be updating your existing products and services right ups for new benefits or new features that you add to those.

You’ll be updating your customer profiles as you gain more insight to your various customer segments. You’ll be updating your marketing communications plan based on feedback on what works and what doesn’t work because you will have some marketing tactics that just don’t work and you want to drop those tactics.

And that’s part of what I talked about earlier about the importance of working on your business and dedicating some time to work on your business versus in the business. And so often, business people, especially during the startup, they’re just involved with just doing it and being in the business.

And you have to force yourself to step back and work on the business so that the business can continue to grow and reach your vision of where you want it to be. So, it is a dynamic document.

Well, that’s good to know because certainly in the startup and emerging business and even as a small business owner, for a long time, it can be overwhelming until you start to have more of a team and more employees that help you out because you’re wearing so many hats. How often should somebody be reexamining their business plan, in your opinion?

I think at least quarterly, if not more often. Because as things change, you need to go back and keep your business plan current. You always want that document current because that’s what you go back to see. All right. Well, what was I going to do here? What was I going to do there? And when you bring people in, it’s a great communications tool.

You ought to be able to share everything in your document except maybe your financial projection because that’s personal to you but you would want to share all the information about your products and services. You would want to share your insights on your customers and how to influence your customers. You want to share the insights to your competition.

You want to share the marketing messages so that everybody is communicating the same message. So, there’s a consistency to your marketing. You want to share your operations procedures because again, you want everybody following consistent procedures.

One of the great drivers of bad customer service is written procedures. Then, you have one person does something one way, one does it another way, Some ways are right, some ways are wrong. Customers get an inconsistent experience and that reflects a new brand.

And so treat your business plan as a communications tool. Even if you don’t have anybody working for you now, eventually you will, and when you bring them on, it’s a great training tool. Get them up speed very, very quickly. So, treat it as a dynamic document.

Great advice. Great advice, as has been all of the content here and your tips and actually the perspective that you bring to business planning so that people understand that it really is the secret to more entrepreneurial success. It isn’t just a make work project.

Exactly.

This is really being able to dig down to find the essence and create the roadmap to make it all work.

Exactly.

As our time is winding down here, I was wondering if you had any parting thoughts for our listeners on this really important topic of business planning.

I guess my only parting shot would be, “Do it.” So, I’m very passionate about people writing thorough business plans, and I was in business for 34 years. I was in banking, I was in the beer business, and I was very involved with many different types of businesses.

When I was in banking, I was a commercial lender. So, I saw business successes. I saw business failures and the businesses that were more successful, plan. And then at Miller, I was very involved with business planning at the brewery level, strategic planning at the corporate level.

And for a couple of years, I was involved with our distributor financial planning group. We went out and worked with our distributors. And I found there that the distributors that had the stronger plans were the more successful distributors.

So, I don’t come at this from an academic point of view. I come at this from 34 years of witnessing many, many businesses and those that did and those that didn’t plan. I can assure you the ones that that planned and spent time planning and treated planning as an ongoing process were the more successful businesses.

Wonderful. So, for those folks that are listening, that are starting out, give some serious consideration to writing a business plan. It’s just a really valuable exercise.

And for those folks listening who are already in business, maybe your business has hit a plateau and you’re a little stuck. It’s a great exercise to help you get unstuck, to be able to step back and see where there may be gaps, maybe some things that need to be further researched, some holes to be filled so that you can build the strong foundation to take that next quantum leap and reach the next level.

That’s well-stated.

Thank you so much, Carl. You’re a delight.  

You’re welcome, Hanna. Thank you so much, and thanks for having me on your show.

I appreciate your time, Carl. And all that you do to help startups and other entrepreneurs be more successful with their business planning needs.

If you’re listening and you’d like to learn more about Carl Baumann or SCORE, that information along with a transcript of our conversation can be found over at the episode page at BusinessConfidentialRadio.com.

Thanks so much for listening. Please be sure to tell your friends about the show and leave a positive review. We’ll be back next Thursday with another episode of Business Confidential Now. Until then, have a great day and an even better tomorrow.

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