There are hundreds of threads here dealing with business resources. Books like the E-myth and The Contractor’s Legal Kit are two that get a lot of face time in this forum. What you don’t see is people saying which books/resources they don’t like. So far, I haven’t picked up a book that I didn’t like (thanks to this forum!), but I did have a bad experience with a SCORE workshop the other day regarding how to write a business plan.
In the class, the instructor had us review an “incorrect” business plan and take notes on what we found wrong with it. The first thing I noticed was the mission statement didn’t have anything to the effect of ensuring a return on investment to all stakeholders; be they customers, investors, or employees. So I pointed it out and got chided for even mentioning it. The instructor told me that no investor/banker cares how a return on investment will happen. He said that NO company puts anything about a return on investment in their mission statement, and even reinforced his statement by telling the class that Wal Mart’s mission statement is “Low prices. Everyday.”
That’s a slogan!
I started to call him on his bluff, but decided to save him from embarrassment. But to hear a representative of the Service Corps of Retired Executives tell me that NO company puts that in their mission statement costs him a lot of respect from me.
He then explained that investors want to see something that “adds value” in the mission statement. I spoke up and told him that he was paraphrasing what I had just said, but I was wrong in his eyes anyway.
He must have a chip on his shoulders about contractors in general. He made the comment that contractors always say they’ll “be there at the end of the week to finish” and never show up. I was speachless.
It should come as no surprise that my experience with SCORE left a bad taste in my mouth.
Replies
Interesting Matt.
If you look past your minor squabble, did you learn anything of value regarding business plans?
blue
Just because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
The short answer is yes. The basic written outline of a business plan that they provided was helpful, but did not include the return to stakeholders I wrote about above. Almost every major corporation has something to that effect in their mission statement.
The "incorrect mission statement" in the exercise was :
"To provide a full-service Landscape Center/Nursery to the Northwestern suburbs of Titanstown.
'To provide off-premises Landscaping Services to the Northwestern suburbs of Titanstown."
I hold people to a higher standard and find it hard to appreciate people who are disrespectful to me. In fact, the class was worth exactly what I paid for it.
Nothing.
Blue, have you had any negative experiences with any resources you have utilized?
Matt,
Similar experience. Not with SCORE but a family business group. I was at a seminar. Leader asked the people there (all owners or family members) what the primary purpose of thier business was. Listed off several things. Keep family employed, provide a good income to family members, provide jobs, Service to community, and maximize the ROA.
I was the ONLY person in the room to raise my hand on maximize the ROA of the business. Out of about 50 owners. Right then and there I knew I was wasting my time with that group. Without a profit the business will cease to exist. No more gravy train for the family.
I haven't been back.
Matt, he was right. The reason why mission statements do not contain "return on investment" is because most mission statements are publicized and generally in marketing that's directed to potential customers, not investors. And investors don't care about mission statements.
Mission statements are strictly an advertising and/or marketing "tool" and often for their own staff as well.
Now if I were a potential customer of Microsoft, GE, Joe's Remodeling, or Sears, I could care less about their ROI, but more interested in "what's in it for me" when making a purchase from them.
Besides, ROI seems to the customer that s/he might be getting screwed in his/her purchase strictly to increase the company's ROI at his/her expense.
Think your own customers care about your ROI or their own ROI when hiring you.?
You are dead wrong.
To think that a customer isn't an investor of business is plain complacency bordering on sheer ignorance. A customer, employee, or investor of a business is a stakeholder. None are more important than the other, but all are placing their bets on the success of the company by spending money and/or time towards the company's best interest which is a consistent return on investment. EVERYONE who has a stake in a company wants to see it succeed.
Do you think your customers want to see you fail? What do you think their reactions would be if they hired you to work for them, you didn't make a return on your investment (ie. failed), and they needed warranty work done? Do you think they would cheer about the low price you gave them?
How do you think factory workers feel when their jobs are being phased out due to overseas competition? Do you think they don't care if their company succeeds?
What about the investors of Enron? Are you seeing my point?
This is a snippet of G.E. letter to stakeholders. FYI, GE does not have a mission statement:
"Throughout this period, we have benefited from your willingness to take a long-term view. We relied on your trust to implement this transformation. We asked you to wait patiently for 2005, when we expected to restore our historic performance. We issued more than 450 million shares in 2004 to improve the Company for the future. From time to time, CEOs complain about their investors’ short-term view. Not this CEO. I am indebted to your commitment.
And you will be rewarded. Because of our work and your faith in us, this is the best GE ever. We have created a high-tech, services and financial enterprise that can grow faster with expanding returns, build leadership in fast-growth markets and return cash to you. Moreover, we can sustain this performance in the slow-growth environment we see today. We’re back at full strength. This is our time."
Believe me, as an investor of several companies and a customer of hundreds, I want to see businesses thrive.
Well, Matt, without getting into an argument about this issue, I guess we'll just have to disagree.
Sorry to hear of your experience with SCORE. I have referred many people to SCORE for business planning, and this is one of the few times I have ever heard anything negative.
Honestly I think SCORE is a wonderful thing. I just think it's worth what you pay for it. I DON'T like having my profession blasted by "executives giving back to the community". That's unprofessional no matter how you look at it. In fact, the whole situation upsets me because I didn't get up and leave when they started to lambast contracting. There are people in that class who might be swayed to not do business with me based on some false sense of respect they owe to the instructor.
I'll voice a complaint with SCORE, but only because I see an opportunity for them to improve their program.
Matt,
No matter what the resource, I think you need to be able to step back and analyze how it applies to your particular situation.
My experience with SCORE was neither excellent, nor bad, just more information to analyze and either toss out or use. Part of the problem is that the counselors generally have run a very large business. (compared to a small contractor). My one on one counselor ran one of the largest commercial HVAC shops in the area, with more than 200 employees. We only met once, and though I was cordial to him, I pretty much ignored his advice.
The one piece of advice that I recall totally ignoring was that basing my billing rate at 35 hours a week to start out, was ....ah.....um.. a little optomistic. He recommended starting out figuring 20 billable hours per week. He obviosly didn't know how hard I was going to work! So after a few years of struggle, I finally decided to track my hours, and found out I actually billed an average of 20.88 hours per week! (Maybe he knew a little more than the 25 year old he was counseling??????)
The other SCORE seminars that I have attended were worth more than the $10 cost.
Any seminar is not going to be able to take you by the hand and lead you to success. It will simply show you the tools, and it is up to you to use them.
The resource that didn't do much at all for me was getting matched with someone from the local college, through the small business extention office. Her only focus after reviewing my plan was her narrow idea of marketing. No info about cashflow, accounting, sales, people skills, etc. And her marketing ideas led to exactly 0 leads.
Bowz
Matt, I don't know that there is anything such thing as a "bad resource." I have a few business books I wish I hadn't bought, for their lack of information, but they taught me that I need to be somewhat selective in my book-buying, and use people's recommendations and not Amazon's recommendations. I've talked to contractors and other businessmen who say don't bother getting into this business, there's no money or future in it, but I look deeper to see where they have gone wrong, and use other, more positive examples for inspiration.
I'm not trying to be too touchy-feely here, but you had one bad experience from one representative from SCORE. Do you think his opinion is exactly the same as other reps from SCORE? Did he have anything else to say you found value in? Did you learn what you need to do to trust someone else's advice?
Mike