Succss Tip: Business Plannning 101Written by Bob Decker
SELLING YOU ON YOUR BUSINESS You’ve probably heard it said that a business plan is a selling document. While it is very true that your business plan will be an invaluable aid to you in selling your business to others, you may not have considered that it can be a great way to sell or re-sell YOU on business you have started. By examining how your ideas and products fit into competitive environment, you can get excited about potential of your business and become reinvigorated. A business plan can also be a good way to determine new directions your business should go. As you delve into marketplace, examining your competitors and their products, and consider market trends, you may see new avenues for your business to follow and may even discover a potentially hot market niche that isn’t being filled. This could lead to a whole new direction for your company and vastly expanded revenues. By contrast, discovery process you follow to develop your business plan might show you that path you thought you wanted to follow isn’t viable, saving you months and years of frustration and a lot of cash! It may help you see a different path you need to follow and/or encourage you to concentrate on a different aspect of business. HOW DOES A BUSINESS PLAN SELL YOUR BUSINESS? In order to succeed in today’s challenging business climate, you will need to exploit every opportunity that comes your way. The only way to do this is to understand where opportunities are and put your business into a position to pursue them. A business plan makes this possible. Just as importantly, your company’s business plan is seen by others as your company representative. It tells interested parties who you are, what you do, how you fit into crowd, where you’re going, and how you’re going to get there. Your business plan can help you with following: · To obtain bank financing: Bankers are understandably nervous about risking money on new endeavors, and there are many more companies out there asking for money than there is money to be distributed. Companies that have a written business plan have an edge because banks understand importance of formal planning. · To acquire investment funds: To investors, a business plan is a screening device. If they like what they see in your business plan, they’ll take next step and talk to your executives. · To arrange strategic alliances: A business plan is often only tool an established company has to assess whether they want to do business with a company that is not yet established. · To obtain large customer contracts: Large customers are reluctant to commit funds and take business risks to do business with an unknown entity. Your business plan helps them understand that you are well grounded and know what you’re doing. · To attract quality employees: A well designed business plan allows potential, key employees to get a comfort level with your company so they will be willing to commit their professional future to you. · To complete mergers and acquisitions: Companies that are looking to buy other companies look closely at these companies’ business plans before deciding which ones they want to pursue. THE RESULTS OF NOT CREATING A PLAN CAN BE A KILLER FOR YOUR BUSINESS! Your business plan is an invaluable tool for helping you understand your business environment so that you can optimize your revenues. Through this important document you will come to understand your competitive environment. You will also be able to determine how you should market your product and what avenues your sales efforts should pursue. The negative results of not performing these exercises can be overwhelming if you are working under limited resources. The following case study, based on a real company whose name has been changed to protect innocent, is just one example of many costly mistakes you can make if you don’t create a plan and stay with it. Case Study – The John Doe Company The John Doe Company didn’t have a Sales and Marketing plan. They had no go-to-market strategy and didn’t even know who their target market was. The sales and marketing function was represented by an individual who didn’t have any sales or marketing in her professional background. Not having a comfort level in an area where she was not skilled, and working under no specific plan, this individual was subject to whim and fancy in her marketing decisions. The unfortunate result? The company attended several trade shows a year, spending thousands upon thousands on travel, show fees, and lost man hours for something that brought them no actual revenues and no real leads. In addition, company instituted expensive giveaways at these shows, such as diamonds, which brought them nothing in return. This VP with no sales and marketing plan also lost company thousands of dollars advertising in magazines that did not attract company’s target market and spent untold thousands flying around world to pursue customers from leads that had not been qualified. Since leads had not been qualified, many of these expensive customer visits were with customer representatives who had no intention of buying, had no money earmarked to buy, and/or who were not even empowered to make a buying decision. The John Doe Company’s lack of a sales and marketing plan, along with having wrong individual in a position to make unguided decisions, has most likely cost company more in lost revenues and squandered resources over 3 years they’ve been in business than they’ve made over that same period of time.Although above case study could be considered a worst case scenario, it is fairly representative of types of problems companies encounter when they have no sales and marketing plan. YOUR BUSINESS PLAN CAN SUBSTANTIALLY
| | What is an Investor Ready Business Plan?Written by Howard Schwartz
A Business Plan, as all good entrepreneurs starting out in life should know is foundation, or rather a springboard, towards establishment and growth of a new business. A business plan is an essential tool for companies raising capital – and your business plan needs to be Investor Ready. What is an Investor Ready business plan? An investor ready business plan is a document that has been professionally prepared to meet needs of both Venture Capitalists and Angel investors. In your Business Plan, you should be able to see your own project through investor's eye. Your plan must be able to answer concerns of an investor. The investors, both VCs and angels, are risking their hard earned capital by investing in your venture in hope of long term returns that are worth many times their original investment. An Investor Ready Business Plan demonstrates to investors that you are an expert in your industry and that you have a clear mission. An entrepreneur addresses these needs by prepareing a comprehensive and detailed view of their business objectives and goals. Some important sections that address different concerns of investors are below: Management Investors invest in management - not just ideas. It is very important that you express your knowledge, passion and dedication to your business as best as you can. The competence of your team along with their experience levels and their commitment levels are also factors that investors look into before making their investment decisions. Customers It is important to communicate to investors that you understand needs and requirements of your customers and to articulate your marketing strategy within your business plan. Product/Service Description
|
