What You Need to Know About Business Plans – Gigi Guyton

Are you running your business without a business plan? Is it because the marketing component has you scratching your head? How do you know where to get the information about potential customers and competitors so that you can put together a meaningful plan?

In this week’s episode, we’ll chat with Certified Business Advisor Gigi Guyton from New Ventures Maine on how to put together an effective business plan and a whole lot more.

Rich: Our next guest has been with New Ventures Maine for 11 years as a microenterprise specialist, and five years as one of the organizations six regional managers. She covers Cumberland and York counties teaching business planning and financial education, and is a certified business advisor. She was a business news columnist for the Charlotte Observer in North Carolina and contributed to the Bangor Daily News column called, Women at Work. She was a board member of both Women Standing Together and the Portland Chapter of the Maine Women’s Network.

She holds a BA in communications from the University of Alabama and a Masters degree in journalism from Louisiana State University. She was an Appalachian Trail through hiker, has rock climbed Devils Tower National Monument in Wyoming. I don’t know if she saw any aliens while she was there. She’s taken flying lessons, been skydiving and bungee jumping, and now she is taking the plunge into podcasting and we’re very happy to have her with us. Gigi Guyton, welcome to the show.

Gigi: Thank you, thanks for having me.

Yury: What a delight to have you. Gigi, could you tell us more about yourself and especially how did you find yourself in New Ventures Maine?

Gigi: How did I find myself in New Ventures Maine? I moved here in 2007. I had a landscape design build business down in North Carolina and it was really a relationship that brought me here. Plus everyone tells me that this is the way life should be, and it is. I sold that business and moved up here, and really it was a fresh start, I was just trying to figure out what to do next. And I kept hearing about this organization called Women, Work, and Community, and that is the former name of New Ventures Maine.

New Ventures Maine has had three brandings. It started as a displaced homemakers program, then it was Women, Work, and Community, now New Ventures Maine. It’s been around 40 years statewide. So I interviewed, and it felt like such a great fit between teaching – which I had done in the past – and also the microenterprise piece, which I had experience with my own business, and my family had businesses in the French quarter in New Orleans, we had been in the hospitality industry, so it was just a great fit. Maine is such a small business economy, and it really just worked for me. This organization has been wonderful to work with.

Yury: Fantastic, thank you.

Rich: Now, you are described as a microenterprise specialist, not something that I’m super familiar with. So can you share with me a little bit about microenterprise and microenterprise specialists?

Gigi: So we do just that. We focus on primarily sole proprietorships. These are folks in Maine who are struggling to make ends meet, they need some sort of income to have economic security for themselves and their families, and maybe they have a hobby and they want to turn it into a business. So they come to us, we help them with the business planning piece, we look at it on paper. Is this feasible, is it viable, is it even desirable as business? From that we decide is this something that your really want to do and is it going to help improve your situation economically? That’s really what we do statewide, is walk people through that process of figuring out, is this going to work?

Rich: And so microenterprise being the solopreneurs. Is your goal to give them a lifestyle business where they can continue to thrive no matter where they are in the state, or is it to help them grow bigger, or does it really just depend on what the variables are?

Gigi: It depends on their goals. It can be either or, and we have also worked with businesses that have already launched and maybe they’re feeling like they’re drowning and they don’t know why, or maybe they feel like they’re not making the money they should be making. And that’s where our financial education piece comes in and it’s really helpful. I have found that those who take our money management classes and our business planning classes, they launch faster, they have more solid footing and success. Those two usually go hand in hand.

Yury: One of the things New Venture Maine does is help people develop a business plan. Why do you feel a business plan is helpful?

Gigi: Oh my goodness, it’s so helpful. It’s a roadmap. It’s helping people figure out their pricing, their marketing, it helps people figure out is this really gonna work before they start spending a bunch of money. So many people will come to me, and they’ll say I found this great location for my business, and I’ll say well do you have a business plan, have you really thought this out, crunched some numbers. They say, no I haven’t done that yet, but I really want this spot. And that’s so dangerous, and they can really lose a lot of money if they’re not putting this on paper first to see if this is going to work.

Rich: So when you’re working with these people and they come to you, they want to start something whether it’s in their house or, like you said, maybe they see a space they like, you start to help them develop a business plan. What are the elements of a business plan? Whether you’re a microbusiness or something a little bit larger, what are the elements that we should consider putting into this plan?

Gigi: So it’s going to start with a mission statement, obviously, and then go into the market research. Can you really survive as the fifth hair salon in a 10 mile radius, that kind of thing. So it’s the research, then get into the marketing, how are you going to get the word out, but the most challenging for most people are the financial pieces. The pricing, the breakeven, the cash flow projection, the projected profit and loss statement, opening day balance sheet. People don’t get into business to do that kind of stuff.

Rich: Oh I know, it’s been 22 years and I still don’t like that stuff.

Gigi: They don’t wanna do it, they don’t wanna talk about it really. They just say this is what I’m gonna do, this is what I’m gonna charge, this is how much money I’m gonna make. Period. Well, let’s look at this more strategically. So those elements are really the most important, especially if you’re gonna go for funding.

Rich: Now, before we get to the funding thing because I think that is really important, you talked a little bit about market research, something that I think most small businesses that start off as a solopreneur never do. What do you do to help them, or what kind of resources could somebody start tapping into if they’re listening to this podcast right now and say, “Ooh, that sounds a little bit like me, maybe I need to do a little bit more market research”?

Gigi: First thing I would do is tell you to go to the Portland Public Library because there’s a research librarian right there. You’re smiling at me like you know this already.

Rich: Well we’ve heard one other person talk about going to the Portland Public Library to do this market research, and we didn’t realize when we first started this podcast what a great resource that was. So to have you double down on that is funny.

Gigi: It’s great because this is something that’s developed over the last year or so. This gentleman is a business librarian, and he’s now offering these free workshops, they’re really like lunchtime workshops, monthly. You know, the library has all these databases that we don’t have access to just by Googling. Most people will just Google and say, well I don’t really have that much competition. Let’s look at this a little more deeply. If you can go to any of those workshops and look at the databases, figure out what those things can tell you, from there you can really put together a plan. He will tell you he’s not gonna decipher the information, but he can tell you how to get it. And there’s a lot of information out there that people don’t realize.

Yury: Does your organization help with deciphering those stats?

Gigi: A little bit. I’m not an expert at it. What typically happens is that people will get into it and they’ll go, “Oh, wait a minute”, so we’ll take a more strategic approach. Sometimes people will figure out maybe this wasn’t a good idea. So then I’ll say let’s think outside of the box. How could you be different? What’s gonna set you apart? Is this really gonna work? Sometimes I can help them figure that out.

Rich: So that must almost be more on the marketing side of things, like how might you position your hair salon that it’s different, or whatever it may be. We have the most cutting edge hair styles or we only work on poodles, or whatever the case is. And you mentioned hair salons. What are some of the other types of businesses that you see, businesses you’re working with these days or in the past?

Gigi: Oh my gosh, they’re all over the place. With this aging population that we have in Maine, lots of consultants. But with the new Mainers, with such an influx of immigrants, they’re naturally entrepreneurial. Everything from perfumes to – I’m meeting with a barber that I’ve been working with – food, lots of restaurants. And that’s another thing we have to…

Yury: Fashion design.

Gigi: Fashion design, absolutely. It’s just all over the board.

Rich: And you also mentioned financials. So what are some of the things that go into the marketing plan around financials? Because like I said, I’ve been doing this for 22 years and this is still the Achilles heel of my leadership ability, is the financial side.

Gigi: So the pricing is part of the marketing piece of the business plan. So people ask how can pricing be a part of marketing? Well itt has everything to do with marketing. Are you competitive, or are you higher priced because of something that’s unique that you’re offering? Are you pricing because you’re giving the impression you get what you pay for? Then it sort of gets into the financials. If we figure out the pricing and breakeven, let’s look at the sales. Let’s look at the cost of goods. Let’s now dump that into a cash flow with all your other fixed expenses. How much money do you need to make? Are you gonna borrow money, and what’s that loan payment gonna look like? And put it into a cash flow at least one year out. At least one year out, and look at it that way. That’s the real eye opener for people, is the cash flow exercise, I love teaching that piece.

Rich: Yeah, I wish you were around when I started my business. That’s a part that I just didn’t even know. I didn’t know what to charge, I didn’t know what to expect in terms of money coming in. I was living with my parents at the time, so…

Yury: Typical millennial.

Gigi: Right. And I made all the mistakes so that other people don’t have to, is what I tell them.

Yury: So Gigi, now that we have a business plan, we conducted the marketing, we have the analysis, we have the financials. Does the business plan impact the funding? So now that we know where we’re going, what we’re doing, now we’re having the conversation with the bank or alternative lenders.

Gigi: Our longer 12 week training classes where you come in and you literally leave in 12 weeks with a business plan, part of that is we have a financial panel come in. We have lenders come in and talk to the class. And they’ll tell you the first thing a banker is gonna do is go right to the cash file. They’re gonna look at the numbers, they’re gonna look at the pricing and the cash flow, and they’re gonna see if, again, are you able to pay back the loan? That’s what they’re after: can you pay back the loan?

So that piece is so important. Of course the narrative is important, it doesn’t have to be all this flowery language, it doesn’t have to be 300 pages, right. You can have a pretty short narrative if you’re getting your point across, but really back it up with the numbers. Especially for the lender.

Rich: If somebody wants to go online, are there business plans online that people can download and just use as a template?

Gigi: Absolutely, they’re all over the place. The other thing too, that I thought was great advice from one of our finance panels, never go into the bank and ask, “How much will you loan me?” You should already know what you need, you should already know how you’re going to use that loan. What are the sources and the uses of the funds? How much do you need, don’t ask me how much you can borrow.

Rich: Right. I learned that lesson on Shark Tank.

Yury: Are the banks the only source of funding that is available to small business owners and entrepreneurs?

Gigi: No. There are other community organizations, for example, CEI down in York County, the Economic Development Corporation there in Biddeford. Those organizations can help make the deal happen, especially if it’s somebody who doesn’t have credit established yet, or maybe their credit isn’t that great. Some of the banks, their hands are tied, they have to have a certain credit score and other things in place, collateral and so forth. So these other organizations can help make that deal happen, they might put up some money toward it.

Rich: And then I’m assuming there’s also family and friend options as well, and then some people might even be able to do a Kickstarter type crowdfunding sort of thing.

Gigi: I’ve had some folks do that very successfully. Borrowing from family and friends is great if you can still get through Thanksgiving dinner.

Rich: Alright. Things change all the time in a business and in the industry around it. How often do you recommend looking at your business plan again and rewriting it?

Gigi: At the least, once a year. More often than that if you can. You still need to be pulling your financials at least quarterly to make sure you’re on track. But this is a great time of year to sit back and say what do I want my business to look like in 2020, right? Am I ready to be a job creator, or do I need to add to my workforce? Am I introducing a new product line? What is that gonna look like, and how’s that gonna get accomplished?

Rich: Yeah, makes sense.

Yury: You know, having this conversation makes me feel like when you have a business plan you’re ready to go and execute, you got your funding, you know everyone is happy, you have a long term goals. But what keeps people from making their business plan work?

Gigi: Usually the weakest section of a business plan is the marketing plan. It’s not always well thought out. It’s oh, well I’m gonna have a Facebook page and website and that’s gonna be it. They don’t really think it through, they haven’t really figured out their ideal customer and how they’re gonna target that niche market.

Rich: So let’s talk a little bit about that. What do you think the marketing section in an ideal business plan looks like, for whatever type of business it may be? You mentioned a couple things, like it’s got to be more than a website and a Facebook page, which I would agree. But what kind of things should people start thinking about so they can create a business plan that’ll actually be that roadmap for success?

Gigi: It gets down to just the characteristics of their target demographic. Like how do they think? Where do they eat? What- how am I trying to explain this?

Yury: What are the pains? What are the gains? What is the value proposition?

Gigi: It’s that, but what makes them tick? How do they communicate? It’s one thing to get in front of them. But then you’ve got to get them to come to you, and then you’ve got to get them to spend money. So what’s the game, what’s the plan to make that happen full circle? It’s really about how they tick, what intrigues them, where they hang out – not only physically but also online – how they interact. Have you really thought about what’s gonna get them to use their own money?

Rich: That sounds difficult for someone just starting out to come up with all these answers. I mean obviously we can take best guesses. Is that something that New Ventures helps people with? And if so, how deep do they usually go into this sort of stuff?

Should we be interviewing our potential customers? Let’s just use that hairdresser, for example. Maybe I’ve been doing some people’s hair on the side, whatever it may be. So do I talk to the people in my community, where do they get their haircut, maybe they drive all the way to Bangor once every month to get their haircut or once every six weeks. Are those the kind of questions we should be asking, surveys research, that sort of stuff?

Gigi: Surveys, research, looking at the competition, you should have at least three competitors in the marketing section of your business plan. And I say it’s the three that you’re going to pay the most attention to once you’re in business. What are they doing? What can you do better? How can you measure up against those competitors and take a hard look at their customers. And yes, I agree, try the surveys, and there’s primary, secondary research you can do. We talk a little bit about that and sometimes even bring experts into our classrooms to just really do a deeper dive.

Yury: We already mentioned that New Ventures provides this business plan writing course or class. What are some other classes that might be a good fit for business owners, or people looking to start a business in Maine that you guys offer?

Gigi: So we have the Intro to Self Employment that’s a very short, is this really something for you type of class. We offer classes called Work for Yourself at 50+, these are for folks who are moving into a different phase of their life, think maybe they want to start a business, continue on in business. We have a Business Basics which is nine hours, that will get you through the first few pieces of the business plan and actually do a cash flow exercise so you understand how it works. We are offering some workshops about online presence, about developing websites and how to have a presence online. We have our longer training which is the 12 week, which is what I call the soup to nuts business planning class.

We do have online offerings as well, so if people can’t come face to face, they can take these classes online. And some of the online classes, for example, are the tax class for self employed. Those are really important this time of year, understanding the taxes for the self employed.

Yury: Do you have to be a member of your organization, is it like subscription?

Gigi: Nope. All of our classes and 101s are free to anyone statewide.

Yury: And there are no particular requirements, just be driven and wanting to succeed, and come join the group?

Gigi: Yeah, if you have the curiosity, come see us.

Rich: We talked about a number of programs you have about starting a business here in Maine. What are some of the challenges that perspective business owners face? What are some of the questions they have, or what are some of the questions you wish they had?

Gigi: They all want to know about taxes, that’s the one thing that frightens people the most. How do I handle taxes? What if I want to hire people, how do I go about that? Often what scares me is when somebody comes in and they’re moving a little too quickly, like I talked about earlier. They’re just in ‘get it done’ mode, which is great, but let’s just take a little more time and really write the business plan and see how this pans out on paper.

Rich: Right. You don’t want Wile E. Coyote, where all of a sudden they’re halfway off the cliff before they stop and look down.

Gigi: And maybe a lot of that for me is from my own experience. I laugh and tell people that I started my business on a resentment. I got mad at my boss one day, I quit, I started my business the next day. No business plan. It was successful, but the next thing I knew, I was drowning and I didn’t understand why. And everyone was making more money than me, so I pulled in a business coach at that point – and this was back in North Carolina – and he helped me turn it around. And there was this significant shift in the way I approached my business and thought about my business, and he made me sit down and write a business plan. And it was phenomenal, it made all the difference in the world.

So there’s that shift that needs to happen for people if they really haven’t thought it through, personally that’s what I think. Most people just have an inkling of an idea, sometimes they’ve already started and they just need some help, but usually they’re just stumped about where to start and how to get it off the ground. What licenses do I need, typically most people don’t want to get in trouble with the IRS or with the state of Maine.

Rich: Yeah. And I think, like you – not out of resentment – I started my business not really knowing anything, I’m just like, “Oh, websites seem like a cool thing to do and I like computers”. And I guess I was really frustrated with my company, so I started doing this on the side and ultimately left to do it myself.

But I wish I could go back in time and talk to that guy and say ‘you really need to bring in a business consultant, you really need to get a business plan’ because the reason I survived, I think one was just because I was just in the right place at the right time. It was like when anybody could make money off of building websites. And the other thing is I just kind of refused, but that’s exhausting.

The amount of success I could have experienced if I had a plan, and understood the marketing side, and understood the financials and all those other things, I think I would’ve had a much easier route. If there’s one thing I’d like to make sure that people to know is that this business plan and talking to an outside business consultant who’s done this before is life changing for your business, and for yourself.

Gigi: Yeah, and you hit it on the head, it can be exhausting. That’s where I hit with my own business, and so I teach folks to work smarter not harder. We can all work harder and harder until we exhaust ourselves, but it’s being smarter. And sometimes that’s as simple as going back to the pricing, or looking at what it is you’re offering, there are a lot of different things that need to be considered.

Yury: A lot of business consultants say that front loading is critical, so it sounds like doing the hard thing first ensures that you’ll have a slightly smoother ride later on. Even if you’re a struggling business owner and you’re not seeing the success or growth you anticipated, this might be the right time to pull out the business plan or start writing one. That’s really great advice.

Gigi, we’re getting to the part of the website where we ask this fundamental question, and the question of our guests. And the question is, what one thing would you change if you could improve the business ecosystem here in Maine?

Gigi: One of the things that I run up against, and this is a simple thing, well maybe it’s not that simple.

Yury: It may be simple, but not that easy.

Gigi: Maybe not that easy. I find that especially for our immigrant population, they’re very entrepreneurial, they don’t understand out system, licensing, all of that, and our maine.gov website is not that user friendly, I don’t find. Whether I’m working with immigrants or not, I have hit many roadblocks trying to help people find the right license they need to get, the right information. Sometimes I get a page that says ‘this page is no longer available’. I’ll email business answers, and they’ll say ‘go here, here’s the link and this page is no longer available. Have you heard this before?

Rich: No, actually this is new.

Gigi: That’s interesting. It’s not that user friendly, I don’t find. So as we’re getting more and more new Mainers in here and we’re trying to embrace their entrepreneurial spirit, we need to make it easier not only for them, but for the rest of us who are trying to get off the ground to be able to just click a button and figure out how do I get this started without having to navigate this system that I think is not that easy to navigate online.

A small example is I’m working with a gentleman, all he wants to do is cut hair. He’s a barber, he’s from another country, he’s got to pass the test to get the license, right? And he wants an interpreter because he doesn’t know English that well. He can’t have an interpreter to take that test. So I reach out to someone and say how can we help this gentleman. Well, you’ve got to call the barber association that creates the test. So I call this 800 number, ‘what state are you in?’ I’m in the state of Maine. ‘Well that test is available in English, Spanish, Korean..’ and I’m like, not French? And this gentleman’s Arabic.

The good news is that’s all being translated into Arabic, it’s gonna take six months. So this man’s got to wait six months before he can take this test in his language. And I don’t know how many folks who are Arabic want to cut hair, but evidently enough this change is happening. But again, the pieces of this .gov happens, and I find that’s a stumbling block a lot of times. And not only for the immigrant population.

Rich: No, but that’s a good example.

Yury: It sounds like the resolution of those minor frictions may lead to a greater impact on the economy and the perspective of the state overall. That was a great point, Gigi, thank you.

Rich: Gigi, if people want to learn more about you and New Ventures, where can we send them?

Gigi: newventuresmaine.org

Rich: Cool, and are you on LinkedIn?

Gigi: Yes.

Rich: Alright, so we can find you there, too. Gigi, this has been great. Thank you so much for your time today.

Gigi: Thank you.

Yury: Thank you.