Category Archives: Small Business Planning

Small business planning elements

Revenue Comes in 3 Flavors

Every business makes investments to create revenue for itself. All too often business owners consider cash as its only source of revenue worthy of investments. However, revenue actually comes in three flavors:

1.  Cash 2.  Attention and trust 3.  Referrals

Everyone can easily recognize cash as a source of revenue in a sales transaction; a business [...]

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Exploit the Future by Shaping It – Don’t Try to Predict It

During the past few weeks, we have looked at how the business landscape has changed, why the advice we receive from so called experts has not kept pace, and how the reasoning skills of successful entrepreneurs have adapted to the new reality of business. Let's conclude this series by comparing the logic practiced by the manager and founder [...]

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Leverage Contingency Principle – Planning for the Unexpected

Manager entrepreneurs use their causal reasoning skills to try and predict the future in an effort to avoid surprises. Founder entrepreneurs use their effectual reasoning to turn an unexpected result or condition into a profitable end. They plan for the expected, but try not to extend too much in the way or resources just in case they are [...]

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Strategic Partnership Principle – The Truth about Competitive Analysis

Manager entrepreneurs use their causal reasoning skills to conduct a competitive analysis to help them define a unique niche for their business. This is demonstrated by the blue ocean strategy postulated by W. Chan Kim and Renée Mauborgne. In contrast, founder entrepreneurs use their effectual reasoning skills to build strategic partnerships with customers. Founder entrepreneurs do [...]

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Affordable Loss Principle – Reaching Markets with Minimum Resources

Previously, we looked at how the startup landscaped has changed and that even though effectual reasoning is required by most startups, most business advice is still based on causal reasoning. In the next three posts, let's explore the three principles practiced by founder entrepreneurs and how these principles will lead to the successful launch of your business. Manager entrepreneurs [...]

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How Your Reasoning Skills Can Affect Your Business Success

Previously, we looked at how the startup landscaped has changed and why we keep getting the same old advice. Now let's explore how the reasoning style of the manager entrepreneur, with their predominantly causal reasoning, approaches a business startup very different from the founder entrepreneur, who approaches a startup business primarily with effectual reasoning.

Causal Reasoning

Causal reasoning is [...]

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Why The Business Advice You Are Getting Is One Sided

Previously, we looked at how the startup landscaped has changed and that you might not need a business plan to successfully launch your business. In this post, we will look into why we keep getting the same old advice. What has emerged, as the funding and risk gap has widened, is a greater awareness that there are different entrepreneurial reasoning skills [...]

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Why The Business Planning Advice You Have Received Is Probably Stale

As we discussed in a previous post, the startup landscape has changed in recent years and more businesses can be bootstrapped than in the past. As a result, there has emerged greater differentiation between businesses that need large upfront capital infusions and those that can be bootstrapped. This essentially has created two types of entrepreneurs, each with different reasoning [...]

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Why Being Told You Need a Business Plan May Be Bad Advice

To get the new year started off right, let's take a deep dive over the next several weeks to see how entrepreneurship has changed in recent years and why you may no longer need to write the classic version of a business plan. Based on these changes, we'll see how you can make the most of these changes by recognizing [...]

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What Is the Market Structure

Some industries are highly consolidated and are dominated by a few key players while others have few incumbents and are considered quite fragmented. Your strategy to enter either one of these markets will be quite different based on the market structure. For example, let's consider two travel related apps: one for flights and another for hotels. Of course today most popular [...]

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