Business Plan, Schmizness Plan

What’s the logic in writing a 30 - 50 page plan if nobody is going to read it? Investors will tell you that it’s to prove an entrepreneur has thought out the idea. I got a better idea – how bout a 7-8 page Mini-Business Plan (MBP) than an investor may actually read and spend the rest of your time doing what’s really important – running a business and proving market feasibility. With 7-8 pages, you can really avoid the BS and get down to the core of your business – in the MBP you should attempt to answer the following questions:

What need are you addressing?

What is your idea and how does it work?

Who are you and your team (and what have you done in the past)?

Pertaining to this idea, what have you/your team accomplished so far?

What is the market/target demographic like for your product or service? Is the market changing?

Who are the current players? (I would analyze the top 1 or 2). What differentiates your company from them? What are the barriers to entry? Potential future competitors?

How do you plan to make money (sources of revenue)? BTW, attracting site visitors and selling out to a media conglomerate is probably not a good answer.

(If applicable) Do you have any proprietary technology or patents?

What is your next step (prototype, beta testing, test market, product roll-out, etc)?

And very briefly discuss:

Costs (Start-up and Operating) and how much money you need from investors.

Revenue/Profit Projections – Most of these numbers are BS anyway, so no need to go nuts with pages and pages of projections.

Legal/Issues of Concern – While most Business Plans paint a completely rosy picture; it’s ok to say that things look good, but here are some issues (both internal and external) that could affect us.

Exit Strategies (very very briefly)

Funding the Next Generation of Start-Ups

According to the Center for Venture Research, Angels (and Angel Syndicates) invested $23.1 Billion in the US in 2005. This represents 55% of the Seed and Start-up Capital Market. But, less that 1% of companies actively seeking Angel Financing receive funding (the number is probably closer to .5% or 1 in 200). This doesn’t take into account the people who would like to start a business, but don’t have the time or resources to actively search for funding. The result is many of the best ideas never getting off the ground.

Many people in the Investment community feel that’s the way it should be; that it’s only prudent to wait and see tangible results before making an investment. While I certainly understand their point of view, this unfortunately leaves the entrepreneur with a tough dilemma. They need money and resources to grow their business. But, to get the money and resources they need to show growth and increased customers and revenue. While bootstrapping aided by family and friend funding is an option for some, many people just don’t have those financial resources at their disposal. Is their a solution to this entrepreneurial dilemma or is that just the way it is and will be in the future?

First, I think we need to promote and teach entrepreneurship at a younger age. The teen demographic is hot in the US. Who knows better what teens want than other teens? If we give these young bright minds the tools and resources to start their own businesses, you will see some amazing new ideas. Colleges like Cornell and Harvard have had success with their incubator and licensing programs, and we need to incorporate entrepreneurship into the general curriculum throughout the country. While accredited investors are often hesitant to invest in unknowns, they are more likely to throw their money and time behind a program at their alma mater. Entrepreneurship can only be theorized in a classroom; you really need to get students into the real world to make it worthwhile. Also, I like the idea of a tax credit for entrepreneurs, which I have seen floating around the internet. Government Agencies (Counties, Cities, and States) should also assist entrepreneurs by providing low cost office space, technology, and consulting services. Angels and large Angel syndicates need to step up to the plate and really give back to their communities. And entrepreneurs must work together, bartering their time and services with each other (the Internet and emerging technologies are making this easier).

While the past decade has seen an exodus in manufacturing and technology jobs from the US, our future success lies in how well we promote entrepreneurship and innovation. If we all work together, the future will be bright.

The Value of a Great Idea

$100000, that’s what I'd say a great idea is worth. Well ... it could be for someone, it just depends on the circumstances. Great Ideas are like Bad Beats in Poker, everybody seems to get them, and they want to tell everyone else about them. The question is -- is your great idea worth a Million Bucks or the price of a Mega Millions lottery ticket? This can only be judged in the context of the situation.

The first part of the equation for an idea’s worth is yourself. Are you a visionary or a reactionary? Do you have unique experiences and skills that no one else possesses? What have you accomplished in the past? How passionate and dedicated are you to the idea? Can you convey that vision to others and motivate them to the cause?

While getting funding is definitely about the market, competition, numbers, etc; it often comes down to just getting one investor to believe and trust in you.

But, the value of an Idea is more than just one person. It’s also the people you surround yourself with; whether it be your core team, family members, business advisors, or employees. Their collective knowledge and the company’s resources (money, intellectual property, business contacts, etc) provide the fuel for launching a new idea. Being a passionate leader with a great team and plenty of resources is a great start, but the most important part in the valuation of an idea is answering the question: how well can you execute?

As you can see, you really can’t determine what an idea is worth until you actually follow through with it. So, while a great idea is something to get excited about (even daydream about), don’t dream for too long and get your butt to work to make it happen.

Confidence

Confidence is a tricky thing. One minute you’re full steam ahead, knowing that fulfilling your goals and dreams is almost within reach. The next thing you know, life throws a nice little wrench at you (i.e. your car blows up and needs to be replaced) and you just can’t imagine how you’ll ever get there.

I would say that I am slightly more confident than the average man or woman, but not as confident as I’d like to be. It’s not the level of confidence that I’m worried about, but rather the consistency. It’s easy to be confident when everything is working out and falling into place. The hard part is how to maintain that confidence when the inevitable problems arise.

I have experienced this first-hand in the poker tournament world. Poker tournaments are like roller-coasters, and you rarely just keep accumulating chips (unless you’re Jamie Gold in the 2006 WSOP Main Event). Instead, it’s often taking one step back to move two steps forward. You will often lose a good chunk of your tournament chips in a short period of time or one hand. This may be from your own mistake, another player’s poor play, or just bad luck. Becoming a short stack is just a part of poker tournaments; and the difference between great players and average ones is how they handle the unavoidable setbacks and avoid going on tilt (making further mistakes). Some of the biggest tournaments I have won have been coming back from a short stack, and looking back, I couldn’t have done it without three important things: patience, confidence, and a little luck.

So, the question is, how do you maintain that confidence when the chips seem stacked against you? First off, you don’t have to do it alone. While ego may prevent you from asking for help, that’s what family, friends, and business partners/associates are there for. Having a strong support network in place will give you the confidence to tackle the problems. See the Big Picture (easier said then done). Is this a huge roadblock or just a minor congestion? Don’t turn a small problem into a large crisis. At the same time, don’t avoid the big problems; procrastination will just make them worse. Often just tackling the problem is a lot easier than constantly worrying about it. And lastly, coach yourself up. Do a little Stuart Smalley (of SNL fame) and look in the mirror and tell yourself: I’m Good Enough, I’m Smart Enough, and Doggone It, People Like Me! :)

Making that New Year's Resolution Happen

The first week in January is a great time for setting goals. Even if you didn’t get to where you wanted to be in 2006, the New Year provides a fresh start on building the life you want to live. People make all kinds of New Year's Resolutions – finding a more exciting job, losing weight and living healthy, or learning a foreign language are just a few of the many goals that people vow to fulfill. Unfortunately by early February, most people have given up on their resolutions and returned to their normal routine.

Why is that? Well, it can be argued that people (Americans especially) look for short-term solutions to problems that often can only be accomplished over a long period of time. The problem lies not in the goal, but rather in the execution. And the answer to the problem is creating positive momentum every day towards your goal.

It is often said (and applied to business): If you’re not moving forward, you’re moving backwards. I agree with this statement. With life, it’s easy to get sidetracked; with weddings, birthdays, aging family members, vacations, and new family arrivals; there is always something to distract you from accomplishing your goals. These are all important things and need to be balanced with the life changes you hope to make. How do you achieve this balance? Obviously you can’t create time; but you can make your time more efficient by prioritizing things that need to get done. Even if you only have 15 minutes free in a day, do one thing that will bring you closer to making your resolution happen. Procrastination is the enemy, so heed the words of Thomas Jefferson and “Never put off till tomorrow what you can do today.” Create short-term goals and reward yourself along the way. While you want to relax on the weekend and on vacations, try and spend a little time each day working towards your goal.

All these little accomplishments add-up and before you know it you’ll be thinking of a new resolution to conquer.