"It's unlikely a business plan by itself will bring funding in door, unless it is part of an overall marketing strategy."

David E. Gumpert, author of "Burn Your Business Plan", tells story about how he and his partner failed to raise money after sending their business plan around to venture capitalists and meeting with several others to make presentations. Disappointed by fruits of their labor, they considered giving up on their venture in 1995. Fortunately, on advice of their board of advisors, they chose to divert their time from massaging business plan to making sales. The financing, they were told, would come later.

Turns out that during 1996 they sold enough to stay afloat. But in 1997, sales failed to grow as quickly as they expected, so they decided to seek financing again. This time, they expected it would be easier to obtain financing, after all they were now fairly well established. Their advisory board, however, told them to continue to focus on promoting business and making more sales.

If At First You Don't Succeed…

Instead of following board's sage advice, Gumpert and his partner decided to dust off their old business plan. They spent many hours rewriting and updating plan, and then set out once again to seek financing. And, once again, they were turned down. How could this be? In late 90's, it seemed like every new Internet-related venture in world was obtaining financing. In fact, according to MoneyTree Survey, sponsored by Price Waterhouse Coopers, Venture Economics, and National Venture Capital Association, amount of venture capital - $7.7 billion in 1995 - had grown to $16.4 billion by 1997.

Nonetheless, failed financing left Gumpert and his partner with two stark choices at this stage: Find ways to grow business without financing, or call it quits. They took first choice but took a different approach. They engaged public-relations professionals, and succeeded in getting several of their most successful corporate clients written up in business and industry trade publications - with their agency mentioned as key force behind their clients' success. This publicity got their phones ringing with new prospects, several of which converted into additional sales.

As business grew, they remained on guard about monitoring their expenses and aggressively collecting receivables. By 1999, they were operating profitably at $2 million in annual revenues, with nearly 20 employees. Also, during this time, amount of venture capital being invested nationally had soared to an astounding $55.5 billion. But, Gumpert and his partner paid little attention to this; their interest in outside financing had dropped significantly.

The Power of Publicity

Gumpert and his partner carried their success into 1998 and 1999. Their promotional efforts eventually attracted attention of a publicly held company that was seeking expertise they offered in developing and managing online content. In December 1999 this company acquired Gumpert's company, NetMarquee. To Gumpert's surprise, acquirer never asked to see their business plan; it only wanted to see their financial projections under several different scenarios.

Is that possible?

Let’s find out...

What are you currently working on? What are you trying to accomplish with your online business right now? Do you have a goal that you’re trying to accomplish?

Let’s look at two possibilities.

When you accomplish your goal, what has really happened?

You’ve set your goal and you’ve successfully accomplished it. You feel good about yourself. Your self-esteem is higher. You’re off to next project.

The formula looks like this:

Set Goal + Accomplishment = Success

But!

When you fail to accomplish your goal, what has really happened?

You've set your goal, but you’ve failed to accomplish it. You don't feel good about yourself. You start to have negative thoughts about yourself. Your self-esteem is lower.

The formula looks like this:

Set Goal - Accomplishment = Failure

How can we fix this so you never experience feeling of failure?

Let's explore possibilities.

Even though you didn’t accomplish your goal, did you learn anything from it? What do you think was biggest reason why you didn’t accomplish it? What was problem that stopped you?

Whatever it was, it was something that you would have not learned otherwise. Don’t you agree?

Hence, formula now becomes:

Set Goal - Accomplishment = Failure + Lesson Learned

Now that you've discovered reason that caused you to fail, dig up some resources and gather some intelligence that would help you find solution or solutions for problem that stopped you from accomplishing your goal.

Armed with this solution or solutions for problem, you now enjoy a double chance of accomplishing your goal.

Go at it again and DO NOT REPEAT same mistake.

Let’s just say that you have failed to accomplish your goal again.

What do you think was biggest reason why you didn’t accomplish it again? What did you learn from this second failure? Was it another problem that stopped you?

Whatever it was, it was something that you would have not learned otherwise.

The formula now looks like this:

Set Goal - Accomplishment = Failure + 2 Lessons Learned

Again, look for more resources and gather more intelligence that would help you find solution or solutions for this new problem that stopped you from accomplishing your goal. And then go at it again but DO NOT REPEAT previous two mistakes.

Let’s just say that you have failed for 3rd time.