Writing a Business PlanWritten by Ryan M. Hoback
Continued from page 1
You always want to provide company information, that is, discuss your business background. Who is management team and what experience do they have? Discuss primary responsibilities of individuals in management team. This is important because you want reader to be aware of who is leading operation, and what their background is. Internally this helps promote respect for those in senior level positions, and investors feel more comfortable having a better understanding of who they are investing in. The next area should focus on marketing and sales activities. What is your Sales Strategy? What are keys to success in your competitive environment? Sales, or activity of selling, is an integral part of commercial activity. Mastering sales is considered by many as some sort of persuading "art". What is your Market Strategy? Marketing starts with market research, in which needs and attitudes and competitors' products are assessed, and continues through into advertising, promotion, distribution, and, where applicable, customer servicing and repair, packaging, and sales and distribution. Now we move on to products and services What are major milestones for your product or service? What are ongoing efforts regarding your product or service? You need describe your products or services to reader in a clear manner. Any good plan has a great deal of focus placed on its financial data. Finance addresses ways in which individuals, business entities and other organizations allocate and use monetary resources over time. What are funds required and their use? Give a historical financial summary. Give a prospective financial summary, which will include a brief justification for your prospective sales levels. Focus on realistic predictions, investors will dismiss any plan that seems to have inflated numbers. You must do accurate market research in order to offer realistic figures. Putting all these tools together and continually revising your business plan will give you a great advantage. For a more detailed look into developing a business plan, read part two of this article as we discuss implementing an organizational plan. www.MotivatedEntrepreneur.com Copyright 2005
Ryan Hoback is Founder and President of Motivated Entrepreneur Business INcubation and Consulting. Mr. Hoback help entrepreneurs startand grow their businesses.
| | Angel InvestorsWritten by Ryan M. Hoback
Continued from page 1
Angels are private investors with high net-worth that are accredited investors and are willing to make high-risk investments. They have had a successful business career; they are often retired business owners or executives who are looking for a "hobby", not just monetary return. Thus, aside from funds, angel investors can sometimes provide valuable management advice and important contacts. However, angel investments bear extremely high risk, and thus require a very high return on investment. Typical angel investments require a return of at least 15-20 times original investment within 5 years, as well as an exit strategy - plans for an IPO or an acquisition. Angel financing is thus one of most expensive sources of funds. However, cheaper sources of capital, such as bank financing, are not available for most early-stage ventures. Angels understand that investor often gets burned, so they tend to favor markets they know. They usually market validation and co-investors in order to feel comfortable. Deal breakers are fairly simple when meeting with investors. You want to make sure that you an up-beat positive attitude. A successful Angel investor would hesitate to invest in someone with a poor attitude or negative mood. You want to make sure that you are not too inflexible, or arrogant. You want to be strong and creative in your pitch, embrace passion you have for your product or service. However, do not create a sense of inflexibility in case investors may be interested but have a slightly different outlook. This is a good thing, this means they see potential and they would like to help make modifications to achieve a higher level of success. Another good point to remember is topic of exaggeration; most seasoned investors can tell when inflated hype is being added to their investment salad. As soon as they smell pepper (an inflated pitch), they will return salad and never order it again, so be realistic in your predictions and assumptions. One of last points that I think is very crucial, is to understand that founders must have some risk at stake in investment. If an angel thinks that founders are trying to cover their own backsides (in case of failure), this will make them extremely reluctant to invest. So make sure you have a small but adequate stake in case of failure that is visible to those who are investing. By now, you should have a good grasp on what an Angel can do for you and your company. There are resources available for contacting Angel investors on web and at http://www.motivatedentrepreneur.com/investor-alley.shtml. You should always approach business incubation specialists who are familiar with Angel investors and can help prepare and guide you through process of meeting, qualifying for and finding funding. These professional have relationships with Angel networks, and they are very knowledgeable in steps that need to be taken in order to receive funding. If you never spread you wings and fly, you’ll never reach sky! © Copyright. Motivated Entrepreneur, Inc. (www.MotivatedEntrepreneur.com)
Ryan Hoback is Founder and President of Motivated Entrepreneur Incubation & Consulting. Mr. Hoback helps entrepreneurs start and grow their businesses.
|
