August 25, 2010
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One close friend of our family is a farmer who raises calves from a newborn state to the point that they're ready to be taken to a dairy farm for milking. This type of work takes both a lot of love for baby calves and a lot of equipment.
In order to get this business off the ground, this farmer needed a loan; so instead of just running down to the local bank in her area to beg for a check, she started with her social network. She talked to her family and her friends about her plans for the farm. She asked for their input and advice. She distributed her business plan to some of her friends and family, took their suggestions, and revised it.
This business plan wound up in the lap of a banker. The banker took a look at the plan and listened to the person that dropped it on his lap, who talked of the hard work and passion that her friend had put into the development of this idea.
The banker called the soon-to-be-farmer and offered his bank's services. Within a few weeks, the farmer was ready to move forward with her dream business.
What happened here? Personal relationships trumped a lot of the things we all learned in Small Business 101. For starters, the farmer used her social network as a method to gather ideas, look for blind spots, and polish her business proposal. Beyond that, even, her social network actually connected her with a banker willing to lend her the money.
The truth of the matter is that most small businesses benefit greatly from being exposed to the owner's social network. If you have a thriving group of successful family and friends around you, the benefits of bouncing ideas off of these people -- or even sharing your entire business plan -- far outweighs the risks. Your social network not only provides invaluable criticisms, suggestions, and advice, but it can also open the doors to opportunities that you didn't even expect.
If you're thinking of launching a small business or making a significant change to the one you're already running, don't keep those ideas cooped up in your head. Flesh them out, then share them with successful people that you already know and trust. See what they think. Take their criticisms seriously and use them as a basis for revising your plan.
As my small business has grown, I've moved in the direction of this type of peer-reviewed business planning. If I have an idea for how to grow my business, I flesh it out a bit on my own, then pass that plan along to a circle of close friends. They read it and send me back their thoughts, which often results in a great deal of thought, revision, and production of a much better plan. When they're trying to improve their own plans, they send them to me and I do the same thing.
The end result? We all wind up with better plans and more success. Sometimes, we even wind up with opportunities that we didn't expect, like the farmer above who was connected with a great banker.
Image Credit: K. Tyler Conk
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