Business Plan Research (part 2)

So, If any of you have been reading, I made a post about some aspects that certain business plan developers  believed was most important to present within a business plan. In this post, I am going to talk about what I am going to put into my business plan. Now, lets take the first guy, Mark Zwilling. He talks of ten turnoffs to potential investors, and I found that some of them are right. For example, I will obviously have an executive summary to sum up my business without being too wordy. Speaking of words, I will make sure of it that people look for errors in my writing before I formally present the business plan.

Secondly, there are the guys from Growthink. They have an extensive list of what one should consider when building their business plan. Outside of the obvious (executive summary), Lavinsky made a great point about industry anlysis. Think about it. I am starting a business in the gaming industry. How much of a fool would I look if I said that I won't bat an eye to EA and Activision, as they aren't the leaders in the industry? Know your industry (and articulate it properly), and your investor will know your business, simple as. Another form of analysis that I will keep in mind is the customer analysis. My business plan is more focused towards small businesses in Central Florida. If I was in front of an investor, I would mention the websites that they frequent, the general hobbies that many small business owners do, etc. This information will tell the investor that I know my market and who I am selling my services to. If I don't mention this at all, like the executive summary, I don't have a plan.

Sorry for the short post, but I feel that with a few of those rules (and yeah, I didn't mention more, guys..) given by the aforementioned businessmen, I believe that anyone can get that investor impressed. Thanks for reading.

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Business Plan Research

So, I'm in my final month in my Masters' program, and I am in the process of making my business plan. I needed to get inspiration and education from somewhere, so I figured, "why not" and looked up some great business development professionals. The first one I looked up was a man by the name of Mark Zwilling.
He is the founder of Startup Professionals, a contributor to Forbes, Harvard Business Review, and Business Insider, an advisory board member of numerous startups, and many other important business occupations.

In Zwilling's Top Ten Investor Turnoffs Around Business Plans, he mentions a few things that investors are looking for. One, is the executive summary. Investors will flat out ignore your business plan if it doesn't have an executive summary, which is quite obvious if you think about it. What's a business if you can't sum it up and give the reader some sort of perspective as to what he is reading? Another important component of a business plan is your grammer. As he said, don't embarrass your english teacher, because the second your prospective investor sees a period set where it shouldn't be, you can kiss that investment goodbye. Another important thing that the business owner must consider is whether or not his business plan is too wordy. Noone, not even investors, like gigantic word blocks, especially when the word blocks aren't needed for the business plan to work.

Overall, Zwilling's Forbes article was a delight to read, and if you didn't read it, here it is. http://blogs.forbes.com/martinzwilling/2011/02/04/ten-top-investor-turnoffs-around-business-plans/ . Now, there is another great business development professional. Well, professionals.

Jay Turo and Dave Lavinsky are founders of Growthink, one of the nation's biggest strategic advisory and investment banking firms right now. Within a 10+ year career, Turo has been advising dozens of middle market, corporate and emerging clients. His big-name clients included Porche, Deutsche Bank, McKesson, Infospace, Samsung, & Paramount Pictures, while his emerging clients include names such as Accelerant, C8 Medisensors, Dakim, DCIP, Free Conference, Fresh Games, Green Medical, Integreon, L3D3, Mobeze, MyPublicInfo, Nolatek, Ometric, Pocketsonics, Precision Time, Raise Capital, Recoup IT, Research Scientists, Sandel Medical, Spring Medical, Telverse, Thrombovision, XCOM Wireless, and Xorbent. Dave Lavinsky isn't the kid in this partnership, either. The man has developed over 100 business plans and has managed over 150 client engagements across all of  Growthink's practice areas.

Well, they both have offered their insight on what they think the key components of a successful business plan is. According to both businessmen, there are, like Zwilling, ten key components within a business plan. One is the executive summary. According to Lavinsky, "The Executive Summary must communicate to the prospective investor the size and scope of the market opportunity, the venture's business and profitability model, and how the resources/skills/strategic positioning of the Company's management team make it uniquely qualified to execute the plan.". (Lavinsky, 2011)

The next three component were company analysis, industry analysis, analysis of customers, and analysis of competition. The one keyword in all three of them was the word analysis. You must analyze as much as you can in order to convey to your investor the notion that you have a backbone and the business mind in order to turn profits. Then you have the marketing plan, a document that details how your business will reach their intended market. Key components of that include

• A description of the company's desired strategic positioning
• Detailed descriptions of the company's product and service offerings and potential product extensions
• Descriptions of the company's desired image and branding strategy
• Descriptions of the company's promotional strategies
• An overview of the company's pricing strategies
• A description of current and potential strategic marketing partnerships/ alliances

Next up are the operations/design and development plans. They detail the internal strategies to build everything from concept to reality. According to Lavinsky, you must be able to layout what functions are required to run the business, what milestones must be reached before the venture can be reached, and how quality can be controlled.

Then you have the financial plan, the management team, and the appendix. The financial plan simply lays out the profits and and revenue structure. Like the executive summary, if your investor doesn't know how you're going to make money, well don't expect anything to come from that meeting. The management structure demonstrates that your company has the human resources need to be successful. And finally the appendix supports the entire business plan. According to both Turo and Lavinsky, it is important to place financial projections in your appendix.

And there you have it. Some guys that I have read about and learned from. Hope my business plan is enough to convince investors now. 

 

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