How To Hire A Business Planning Consultant

Writen by Jo Ann Joy

There are certain things that must be considered before you hire a business planning consultant: The following are some of the most important things to consider when hiring a consultant:

You must have a contractual agreement. The consulting agreement sets out the parameters of the relationship, specifies the services to be performed, and sets forth the timeframe in which the work needs to be completed. Both parties should sign the agreement.

You must check the consultant's background. The skills and abilities of consultants vary widely. You should conduct your due diligence and check references to help you determine if the consultant is right for your business.

Be sure that no one in-house can do the job. Companies commonly fail to consider the various skills of their employees before hiring a consultant. Take the time to re-read the resumes of your staff before you spend more money than necessary to hire a consultant.

Be sure to check the compensation scale. Check the going rate in the industry and do some research to find out the pay range for the services you require before overpaying a consultant.

The payment for expenses should be spelled out in the consulting agreement. The consultant will expect his or her expenses to be covered, and these should be discussed in advance and spelled out in the consulting agreement so they do not come as a surprise when they appear on the invoice.

Be sure the consultant is available on the time schedule you require. Make sure the consultant is available to work on your project on your schedule. If the consultant accepts your job but cannot start for three weeks, you need to know that in advance to be certain that your deadlines will be met.

Conduct a thorough hiring interview. Take the interview process very seriously with consultants just as you would do with prospective employees. A consultant you hire will be involved in the future of your business, and it is imperative that you conduct a comprehensive interview.

Have the consultant sign a letter of confidentiality. Consultants are free agents, and you need to keep in mind that they may work for your competition after completing your project. Therefore, you must have a signed letter of confidentiality from the consultant to protect your trade secrets and confidential information.

Clearly describe the project. Be sure that the consultant and you are not on the same page from the start to avoids misunderstandings and complications later on.

Introduce the consultant to your staff. Your employees start need to know who this person is and why they are asking for files or asking about certain projects. Introduce the consultant to your regular employees, especially those with whom he or she will be working.

The consultant must have marketing and finance skills and experience. They must understand the U.S. industrial and business climate. They must understand your company and the industry. They must know who your competitors are and how they do business. Be sure the consultant shows you the research they have done in preparing your business plan.

The consultant must do more than just write a business plan. A business plan needs to reflect a carefully thought-out business strategy for growth and profitability. Your business plan consultant must work with you to develop and refine your business strategy. The consultant needs to meet with you several times to learn, think through, and discuss your marketing, financial and operating strategies.

Before you hire a consultant, do your research and look at the work the consultant has done in the past. Be sure the consultant has the academic credentials and experience necessary to do a comprehensive business plan. Be sure the consultant knows how to prepare a business plan that will meet your needs, whether it is for raising capital, applying for business loans, meeting IRS requirements, or supporting grant requests.

Jo Ann Joy, Esq., MBA, CEO The future of your business starts here!

You may contact Jo Ann by phone at (602) 663-7007, by fax at (602) 324-7582, by email at joannjoy@Indigo Business Solutions.net, and by mail at 2313 East Ocotillo Rd., Phoenix, AZ 85016. I have many published articles, and I will send any article to you free of charge. Most consultations are free.

For information about other important legal, tax, and business topics, free copies of articles, or EBooks, please visit our website at u>www.IndigoBusinessSolutions.net. Copyright 2006. All rights reserved. Indigo Business Solutions is a registered trade name.

Discover the secrets to success and grow! About the author: Jo Ann Joy is the CEO and owner of Indigo Business Solutions, a legal and business consulting firm that is a "one stop shop" for businesses. We provide legal and business services and all professional services to businesses, and they will not be "referred out" to other professionals. Jo Ann has a law degree, an MBA, and an Economics degree. She is a strategic business attorney who works closely with businesses to improve their performance and their chance of success. Her background includes commercial, corporate, contracts, real estate, accounting, financial planning, mortgages, marketing, product development, banking, and business planning and strategies. She ran a successful business for 10 years and writes and gives presentations on many different legal, tax, and business subjects. Please visit our website at www.IndigoBusinessSolutions.net for more information on business, legal, and tax topics and for free copies of articles and EBooks.

Business Management Case Study Franchise State Renewal Delays And Disruptions

Writen by Lance Winslow

We are beginning to see a horrible trend in franchising with regards to franchise registration states and franchise registration renewals. What is happening is that the states are requiring certain documentation and company audits to be performed prior to franchise registration renewal.

Unfortunately there are a shortage of accounting companies who are willing to do audits due to the new rules and regulations of Sarbanes-Oxley. With fewer companies able to do audits and backlogs with peer reviews, Franchisors are not always able to get everything in on time that the registration states require for franchise renewal.

What I see now are Franchisors, who are scrambling and juggling, as they have deals pending and they must stay on their growth track. Smaller franchise stores are very susceptible to failure in the early years if they stop growing fast.

I have seen Franchisors temporarily transfer abandoned franchises, terminated franchises, franchises in the middle of transfer and even new franchises two groups of partners, employees, family members simply so they can continue to sell during these franchise registration delays. There are many reasons why a franchisor might do this.

1.) State Regulatory Agency slow on processing or renewing franchise application, waiting on confirmation and deals are proceeding, cash flow tight, move ahead anyway thru legal loop hole?

2.) Audits not in yet, needed for registration or renewal, renewal or registration therefore pending, lapse in time to file the renewal and audit within 90-days. Want to move ahead with deal, due to customer demand, Master Lease on location (Franchisor Cash Flow Tight) and fear of eviction from center or loss of revenue or brand name degrading if company leaves location.

3.) Renewal denied due to Balance Sheet of franchisor, impounding fees required, kiss of death for a franchisor in a registration state, have deals pending, location open, franchisee abandonment, juggle to see that location running.

4.) Transitioning an existing unit to a new franchisee, which has been terminated, but still operating it until sold.

All these are issues new franchisors deal with in adverse registration states in the beginning. Juggling is not fraud if it is legally done. Now then the reasons a franchisor might do this, which are unethical would include;

1.) Hiding a failed unit from UFOC disclosure

2.) Calling Company owned unit a franchise, when it is not.

3.) Misrepresenting facts of the unit

4.) Purposefully and willfully avoiding mandatory registration and disclosure laws in a franchise registration state.

5.) Hiding the fact after the fact that someone lied about that being a franchised unit the whole time. Thus embellishing unit numbers.

The delays in franchise registration renewal and franchise registration states is unacceptable and these delays are caused both due to bureaucrats who can't get their act together and onerous laws, rules and regulations put upon Franchisors making franchise registration renewal sometimes impossible.

We must deregulate franchising if we are to see these franchise businesses survive. Typically franchising outlets account for one third of every consumer dollar spent in our gross domestic national product. It is a very serious issue. Please consider this a 2006.

Lance Winslow - Online Think Tank forum board. If you have innovative thoughts and unique perspectives, come think with Lance; www.WorldThinkTank.net/wttbbs/

Using Metrics To Manage Performance

Writen by Ralph Dandrea

It seems obvious - use measurements of performance to manage and guide your business. Yet an entire discipline in business thinking has developed in recent years dedicated to this notion.

Business Performance Management (BPM) is not a methodology for managing, but rather a mechanism for recording business processes and business metrics and linking the information together to form a single consistent picture of how the business is performing(1). But is it as obvious as it seems? Every business uses some measure of its performance to influence its management decisions. What metrics should be gathered and used? And what more is there to BPM than gathering data and disseminating it to managers?

"A metric is not simply a measurement. It is a measurement taken over a period of time that communicates vital information about a process or activity. "

Defining Metrics:

A metric should give some indication of how an activity is performing. For example, the number of employees in an organization is not a metric because it is not related to a particular activity. However, if a company is engaged in a recruitment effort to add to its workforce, the number of employees added over a six-month period may be a metric for that recruitment activity.

Steps toward Managing with Metrics:

1. Identifying Key Activities: Given the above understanding of metrics, the first step in implementing Business Performance Management is to enumerate and understand the key activities of your organization. Because BPM is a holistic approach, the key activities are not just those that contribute directly to the bottom line, such as sales and marketing. They include all activities without which your company would falter - both financial and non-financial.

2. Identifying Target Metrics: Once key activities have been identified, metrics must be associated with them. That is, since the activities are important, they must be measured in some way. Otherwise, how does your company know it is performing well in this key activity?

3. Establishing a Program for Collecting Metric Data: The data needed to support the metrics may already be gathered by your organization. If not, a program must be established for gathering the data. The data must be timely and accurate since it will form the basis of strategic decisions.

4. Providing the Metrics to Decision Makers: The metrics must be provided to those in the organization who can act upon it. In large organizations making the data available to the right people is often more difficult than it sounds.

5. Act upon the Metric: If the metric will not be used to adjust operations and business strategy, then there is little point in gathering it. Threshold levels of acceptable performance should be established below which action must be taken.

Common Mistakes:

Suppose the XYZ Software Technologies Company would like to get a better picture of its overall outlook and performance using metrics. XYZ embarks on a conscientious process of metrics management, identifying activities and metrics, gathering data, and disseminating the metrics. But at the end of this process little has changed. It is still a fledgling company struggling to maintain its position, never mind growing as it believes it should. Upon closer examination, it has made a series of errors along the way.

"Managing with business performance metrics seems straightforward, but things can, and often do, go wrong when the basics are not followed."

First, critical activities have not been accounted for in their metrics. Sales, marketing, and product development and maintenance efforts have been identified, but their developers are spending 25% of their time supporting their current customer base, an activity unaccounted for in their list of key activities.

Second, even among the activities which they have identified, they are not always gathering the right metrics. Although product maintenance efforts, e.g., ongoing marketing and software maintenance costs, are being measured, they are not capturing return visits to customer sites, a significant expenditure and a key indicator of underlying issues.

Third, the data they gather is incomplete for some activities. For example, although a significant portion of the web master's time is spent on updating the corporate web site for new products, this time and effort are apportioned entirely to ongoing marketing expenses. More importantly, most of the data collected for all activities is at least a month or more behind their operations.

Finally, when metrics are prepared, only the CEO and top-level managers are given the information. Lower-level managers are only notified when a problem is perceived by the upper-level managers. Consequently, trends and warning signs are never noticed by the managers who know the situation best and who can act most quickly. As a result, action is rarely taken based upon the metrics.

Conclusion:

When properly structured, a system for managing your business through metrics can be a complete and dynamic management tool for measuring performance and guiding decision-making. But structuring the system requires a comprehensive and honest evaluation of your company's activities, as well as a commitment to collecting the data and disseminating the metrics to those who can truly act upon it.

(1) "Business Performance Management: Gaining Insight and Driving Performance," Hyperion.

About Ralph Dandrea:

Ralph Dandrea is the President of ITX Corp., and leads its Business Performance practice. He is experienced in business and information technology management and holds graduate degrees in business and law.

About ITX:

ITX Corp is a business consulting and technology solutions firm focused in eight practice areas including Business Performance, Internet Marketing, IT Staffing, IT Solution Strategies, IT Solutions Implementation, Technical Services, Internet Services, and Technology Research. To learn more about what ITX can do for you visit our website at http://www.itx.net or contact us at (800) 600-7785.

The Business Questions Your Performance Measures Should Answer

Writen by Stacey Barr

You can't make informed decisions if the information you're using can't answer your questions.

INTRODUCTION

The report design working group sat around the table, sifting through the draft strategic performance report to suggest how to make it more useful. Measure by measure they chatted and suggested and critiqued and debated: "this one would look better if it was a bar chart", "yeah, I like the three-dimensional bar charts", "we should add another line to this chart because it would be interesting to show", "it's pretty easy to get Excel to turn this one into a stacked bar chart, that way we could get more information onto it". Then someone asked: "hang on, what questions are we trying to answer with these measures anyway?", and there was dead silence.

ARE YOU USING THIS KIND OF PERFORMANCE INFORMATION?

Performance reports are most commonly filled with a combination of information like the following:

- tables of comparisons of this month with last month, this month with the same month last year, year to date with target
- the default bar charts that Microsoft Excel formats for you
- fancy three-dimensional, stacked bar charts
- other charts that are crowded with information that looks visually exciting and at best, might be interesting
- occasionally some short term trends, consisting only of 5 or 6 or barely a few more points of data
- commentary about project or initiative progress or milestone completion

How many of these kinds of information are in your performance reports? How much of that information is read, valued, validly interpreted, understood and applied to inform decisions? How aligned to your organisation's strategic, tactical or operational priorities is this information?

WHAT'S WRONG WITH THIS KIND OF PERFORMANCE INFORMATION?

If you answered these three questions with "quite a lot", "not very much of it" and "not very well", then you'd be fairly normal. Most organisations' performance reports are created with only a basic awareness of good business statistics and even less of an awareness of the business questions the report should answer.

Most of the information provided in these reports is in the form of "limited comparisons", to borrow a phrase from Donald Wheeler (1). Limited comparisons can't really answer any business question, because they are not a representative picture of the performance results they monitor. This is due to the fact that there is always natural variation from month to month, week to week, day to day, and 2 points of data can never tell you what amount of variation is normal versus abnormal.

What makes matters worse, is that often it seems this information is designed this way purely because it always has been. Rarely is the design of the information questioned or challenged. And rarer still, is the design of the information reviewed in the context of the business questions it must answer. Information design, particularly the visual design of quantitative information (Edward Tufte has written some amazing books on this very topic - see references 2, 3 and 4), is a real body of knowledge, linking statistical theory with cognitive theory to provide insights into how we can make information more useful and usable in decision making.

WHAT ARE THE RIGHT BUSINESS QUESTIONS TO ANSWER?

What is business performance management really about? Ultimately it's about business success, and providing the information to make the decisions that increase that success, now and into the future. Performance management is about three specific things. Firstly, it's about monitoring your business' actual progress toward the outcomes (and targets) implied by your business strategy. If one of those outcomes is to increase customer loyalty, then it's about monitoring how much customer loyalty you have as time goes by (such as the average number of orders per customer per quarter), and comparing this actual level of customer loyalty with the targeted level (say 20 orders per customer per quarter).

Secondly, business performance management is about knowing which of your initiatives or projects are working and not working in making those outcomes happen. If you have an initiative around developing a customer relationship management system to improve customer loyalty, then you would expect to see that customer loyalty increases the more the customer relationship management system is implemented and used. If you don't see a change in customer loyalty despite implement customer relationship management, then how can you say the system was working? You can't. Thirdly, business performance management is about knowing why those things are working or not working so you can choose better things to do, or fix the things you are doing. Perhaps the customer relationship management system isn't impacting customer loyalty because customers are already happy with their relationships with you, but just feel your products or services aren't as relevant as they expected.

This description of business performance management suggests several specific questions are important in managing a business so it's success improves.

Have we achieved our target?
We monitor business performance so we can know when we are actually performing at the level we need to, or want to, perform at. Targets are the description of the "need to" or "want to".

Are we progressing toward our target?
Rather than just waiting to the end of the year, or the date we wanted to achieve the target by, monitoring continuously throughout that timeframe gives us more power to influence the end result.

Are their any unintended consequences of our actions?
Chaos theory, the butterfly effect, and system thinking all tell us that there will always be some kind of flow-on effect from our actions. These flow-on effects can be anywhere from small and insignificant, to shockingly dramatic.

Why are we getting the results we are getting?
This is a question that is seeking information about reasons. Of all the possible reasons that you are getting a particular performance result, which reasons are the main ones, those that have most of the impact? If you are getting a good result, then knowing these reasons helps you confirm what to celebrate and keep doing more of. If you are getting a bad result, then knowing these reasons helps you modify your course of action to turn the result around.

What is likely to happen in the future?
Predictive information is some of the most valuable information in business. While no information can really do the crystal ball thing, a really good understanding of drivers (or lead indicators) can certainly give some great clues about likely future results. Thus, you can prepare for the most likely outcomes, before they happen.

DESIGN YOUR INFORMATION TO ANSWER YOUR BUSINESS QUESTIONS

The types of information needed to answer these business questions are different for each question. And unless that information is designed with the question in mind, it's likely that you won't be able to answer the question, or if you do, it will suffer the risks of misjudgment.

One of the keys to designing the kinds of information that will support your judgment in answering these question is to start with identifying the type of comparison you are trying to make. What do you need to compare with what, in order to answer the question? Another key is to be familiar with the kinds of qualitative and quantitative analyses that can reliably make those comparisons for you. The following sections provide some examples of how these keys can be used to design information to answer the generic types of business questions above. HAVE WE ACHIEVED OUR TARGET?

This is basically a comparison between actual performance and targeted performance. But it's not quite as simple as that. Because business results are constantly affected day in, day out, as time goes by, this comparison can only be really valid if it takes into account the natural variation in results over time. This means that a simple comparison of actual performance for the year (such as the average number of orders per customer per month, rolled up into an annual statistic) compared to the target (of 20 orders per customer per month) is too simplistic. It doesn't take into account the very likely event that improvements may have happened within the last year, so it underestimates actual performance. A better analysis would be a run chart (1) that shows the real changes in the overall average as time goes by, and compares that latest overall average (the mean line in the run chart) with the targeted level.

ARE WE PROGRESSING TOWARD OUR TARGET?

This question requires a comparison quite similar to the question above: actual performance compared to targeted performance. But it's not just the comparison between the mean line and the target level that matters here, it's also a comparison of how the actual overall level (the mean line) is moving as time goes by. Is it moving closer to the target level, fast enough? If you relied just on monthly comparisons to target, you'd be mislead by the natural variation that happens from month to month. You need to see the big picture pattern or trend over time.

ARE THEIR ANY UNINTENDED CONSEQUENCES OF OUR ACTIONS?

A slightly more complex comparison is needed to answer this question. Answering this kind of business question means you need to have some idea of what kinds of unintended consequences you could have expected, and some information about the extent to which these consequences are occurring - before and after you take action to achieve the performance result you want.

When you have this information, it would ideally take a similar form to the information that answers the previous two questions: a run chart that shows real changes in the overall actual level as time goes by. You then can compare the patterns or trends over time of your performance result, with those of the unintended consequences, and if you see some kind of correlated pattern, there's a strong clue that by achieving your performance result, you are also getting some other kind of result as a consequence. This may be a good thing, but it also may be a bad thing. And by knowing, you can take action if it's needed.

WHY ARE WE GETTING THE RESULTS WE ARE GETTING?

The comparison type here is be able to see the relative size of impact of each of a range of possible reasons for the result you are getting. So step one is to have a good idea of what those reasons could be. The second step is to be able to source some data that lets you know how often, or to what extent, each reason has actually played out during the timeframe you monitored your performance result. A really useful analysis of such data is a Pareto chart. This shows the relative size of impact of each reason, from largest to smallest. It will highlight the 20% of reasons that are having 80% of the impact on your result. And viola, you have a place to start investigating further, to find how you can turn your result around.

WHAT IS LIKELY TO HAPPEN IN THE FUTURE?

The kind of comparison needed to answer questions like this is the comparison between or among a set of measures or factors or variables that you hypothesize have significant influence over the direction your performance result will head. These measures or factors or variables are your drivers, or lead indicators. You test these hypotheses through a scatter plot (entirely visual), correlation analysis (very visual, with a quantitative measure of strength of the relationship) or regression analysis (not visual, but with a quantitative model of the relationship) to determine the strongest of these lead indicators.

Then, using the run chart analysis described under previous questions, you can interpret the emerging trends in your lead indicators and estimate or calculate the impact this will have on your performance result.

DELIBERATELY DO TWO THINGS

Designing excellent information to inform decisions about business performance is not rocket science. But it usually does require some effort be applied to clearly articulating each business question that needs to be answered in order to understand and make the decisions, and applied to deliberately designing the kind of information that can adequately (even if not completely) answer those questions.

REFERENCES

(1) Understanding Variation: The Key to Managing Chaos, Donald Wheeler, SPC Press, Inc., 1993
(2) The Visual Design of Quantitative Information, Edward Tufte, Graphics Press, 1983-1999
(3) Envisioning Information, Edward Tufte, Graphics Press, 1990
(4) Visual Explanations, Edward Tufte, Graphics Press, 1997

Stacey Barr is a specialist in organisational performance measurement, helping people get the kind of data and information that tells them how well their business is performing, and how to make it perform better. Sign up for Stacey's free 'mezhermnt Handy Hints' ezine at http://www.staceybarr.com to receive your complimentary copy of her e-book "202 Tips for Performance Measurement".

How To Make Good Changes Stick

Writen by Donald Bryant

Making quality improvement changes in the healthcare field are difficult. Making the changes stick is even harder! Consider, if you would, some change at your site that made a vast improvement in quality. Time was saved, patient care improved, and the bottom line improved. Now, look back, is that change still in place? Sadly, after some time has passed, many positive changes disappear. Why? We slip back into old habits. They are hard to shake. What personal habits have you tried to change? Was it hard? Habits in an organization are just as hard to change, if not harder, since more people are involved. Another reason your site changes didn't stick may be that personnel changed. One organization I know of had several changes in top leadership. Each new leader wanted to make his/her imprint on the organization; so, they instituted changes which saved money immediately but which overturned best operating procedures which had been successful and which had been developed with a lot of effort by staff. There are many other reasons quality changes don't stick.

How are you going to fight this, then? I don't have a cure all, but let me suggest a technique used in many organizations—a written Standard Operating Procedure. If you look up Standard Operating Procedure in a search engine on the internet you will get many hits. It is especially common in government sites and the military. What is it? It is a manual or text describing how things are done.

As a quality engineer I've worked on successful projects that saved significant amounts of money for organizations. The changes were made permanent by writing them down in a manual for the department in which they were used. That way, if changes in personnel occurred, the standard operating procedure stayed in place. Too, the written manual was used to disseminate the changes throughout the organization. The change leaders incorporated the changes in the organization manual for standard operating procedures and then made sure that the techniques were followed by all involved. Manufactures who are ISO certified use this technique commonly.

Once you have written the quality changes into your manual and spread the word, is that enough? No. I believe that you should occasionally take an audit of the procedure. By that, I mean that once in a while, you as a change leader should go out to wherever the change is incorporated and observe if it is still being followed. If not, corrections should be made to make sure the changes are followed again. In other words, make sure the changes are practiced until they become the habit.

Beyond incorporating the changes in your manual and making sure they are followed over time, try to make the top leadership aware of the operating manual and respect it. If you can demonstrate that the ideas are money savers for the organization or that they meet some other important goal of the organization you will probably be successful. If current leaders buy into the manual as a body, then a new leader who wants to incorporate unproven changes will probably meet resistance by others who buy into the manual. In other words, a good standard operating procedures manual is self-perpetuating in spite of the changes that occur in the organization.

Does this mean that no changes should ever be made in the manual? No. If new personnel come on board with new ideas then they should be given the chance to prove their ideas. If the new ideas are indeed better for the organization then the manual can certainly be amended.

Summarily, to incorporate changes in your organization and make sure they stick in spite of changes in the work environment, create a standard operating procedure manual or manuals (you may have different ones for each department, as long as they are compatible with other manuals in the organization) which are respected by the top leadership and which are continually referenced by those involved. If you don't have such a manual on site, don't try to create a mammoth volume that incorporates all present practices. Rather, start small with a manual that incorporates new changes and use it until you feel comfortable with it. Then, go back and add other best operating procedures.

Donald Bryant helps healthcare providers meet their challenges. If you liked this article and want more free tips, visit http://www.bryantsstatisticalconsulting.com for a free article to help you start making improvements at your site immediately.