Steve Marr Blog

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Category >> Strategic Planning
Jan 15

The Key Entrepreneurial Skill

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Many believe the key entrepreneurial skill is the ability to run a business. However, I believe that the most important skill is to forecast the future accurately.  Scripture reminds us that no one can predict the future. King Solomon taught that “Since no one knows the future, who can tell someone else what is to come?” (Ecclesiastes 8:7, NIV)  However, we must use the information we have and are able to find to forecast the future in some way.

Dec 30

Don’t Let Innovation Be Your Downfall

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Have you heard the story about  two guys were in the woods and encountered an angry grizzly bear. One started running.  The other said “Don’t you know you can’t outrun the bear?” The first replied, “I don’t need to outrun the bear; I only need to outrun you.

Dec 28

Research Carefully Before Starting a Business

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“Ken” asked me about starting a business in a town of about 50,000 people but didn’t know what type of business to start. His major concern was finding a successful business that would generate income.

Dec 23

Zero-based budgeting

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You’ve probably heard the term zero-based budgeting. When used correctly it identifies a budgeting process that starts fresh rather than using what was spent the year before.  You start with a clean piece of paper and in every budget category, you ask questions about whether you should spend money in that category and how much. I prefer a zero-based budget system. This requires more work and creativity but yields better results.

For example, in my personal budget I looked at the cost of running my car thought of just estimating the cost of gas and repairs for next year.  Since gas was increasing at the time, the budget item was growing fast. Instead, of increasing the line item, I asked questions about how I could reduce my driving. Most days I drove into town to pick up my mail and conduct a business meeting. When I finished my business, I drove home. Later, if I needed groceries or to run errands, I took another trip after work hours.  Instead, I started adding errands to my work related driving and cut my gasoline use. Zero-based budgeting helped me change how and when I drove.

Another time when energy prices were high, I didn’t like the steep rise in my heating bill. Rather than increasing my utility budget for the next year, I adjusted some lifestyle choices.  I took time to cut wood to help heat the house and was able to hold down this budget category.
This process works in business as you look for new and innovative ways to reengineer how you work.

One client spent $80,000 in advertising and looked at a small increase for next year because advertising rates were going up. Unfortunately, they had no idea what advertising worked and what did not. I had them complete a test to quantify the results from each type of advertising. What they learned was that 50% of their spending produced little or no results while the other 50% did very well.  Dropping the ineffective part and reallocating $20,000 reduced the advertising budget while improving results.

Another client, “Bob,” complained about the cost of maintaining a delivery truck. Bob delivered furniture and owned a pickup and a larger truck for his deliveries. I offered a different idea. Sell the large truck and buy a trailer that his pickup could pull.  This decision cut maintenance costs for the larger truck and raised cash that he could invest in more inventory to increase sales.

John the Baptist said, “The ax is already at the root of the trees, and every tree that does not produce good fruit will be cut down and thrown into the fire." (Luke 3:9, NIV) As you get ready to kick off a new year, rethink your budget carefully. Challenge every line item. Ask yourself if you weren’t already doing this, would you or should you? Then follow John’s guidance and get rid of anything that fails to produce.

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Oct 17

Are You Ready to Expand Your Business?

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I have talked with a number of business owners who want to know if they should expand or not. The Lord provided an example when He spoke to Jeremiah: "If you have raced with men on foot and they have worn you out, how can you compete with horses? If you stumble in safe country, how will you manage in the thickets by the Jordan?” (Jeremiah 12:5, NIV) The lesson is that just because you can compete with foot racers doesn’t mean you’re ready to race against horses.