How To: Better Business Plans

How to write better business plans

Are you starting a new company? If you are, it won't be long before someone asks you if you've written your business plan. This is especially true when you seek funding of any type. Gone are the dot-com wild-west days when snotty-nosed Stanford students could sit in a VC's office and mumble "We don't have time for a business plan" and still receive $20 Million Dollars.

Business leaders, today, ought to have their act together. And, part of having your act together is having a good plan.

What are the keys to writing a successful business plan?

Here I'm going to describe 12 Keys to Writing Better Business Plans:

1. Know your weaknesses and address them.

2. Make an impact.

Use a video, use a demonstration, anything to show why your product or service is superior.

3. Compete.

What type of competitive environments are you submitting your offering? Are you entering contests? Are you willing to put your name on the line? Are you submitting your ideas against the pack? Bill Gates would never have succeeding with Microsoft had he never got his basic disc operating system in front of IBM. Success often starts with the early competitive moments that define us.

4. Tell a story.

You have to tell a story. If your story isn't compelling, people won't buy from you.

5. Be doggedly determined.

Are you committed to making it work no matter what obstacles get in your way?

6. Make it fundable.

Great ideas aren't the only thing that matters. Often, the most fundable project that may get you funding. Set your business up with enough punch to attract funding.

7. Refine, refine, and refine your pitch.

A better elevator pitch - have someone catch you in an unsuspecting moment and ask: "Why you?" See how you answer... then refine it. Rinse, repeat, etc.

8. Management team ought to know.

What is your management team's record related to what you are doing? There ought to be a long-tail of related history tying what you did in the past with what you're doing now.

9. Determine your market, then sell to that.

If you can determine your market early, the better for you. The more you narrow your niche to the people who truly have the money, power, and desire to buy from you, the more you will win.

10. Put some of your own money in your company.

Do you have skin in the game? An entrepreneur who hasn't invested any of their own money probably won't be as committed. At least, that's the prevailing logic used by VC (venture capitalist) investors.

11. Know your risk.

What's your risk? In addition, are you aware of the risks to your business? Many investors want to know the exact risk of investing in your business. You ought to know your risk before and test your strength against it PRIOR to going after the money, if possible.

12. Know both break-even and ROI points for investors.

What's the projected gain? If you can't show a reasonable ROI (return on investment) within a reasonable period of time, you won't get the money you need to grow your business. As my Dad likes to remind me, "Cash Is King" and if you're getting cash you must realize there WILL be an expectation that you'll make MORE cash in a short amount of time. This will increase the pressure on you to succeed. So, have your act together when you ask for money.

When you design your business plan, consider these twelve steps to success. I probably could have added: 13. Know your exit strategy, because that will come up, too. Many business leaders don't understand that if they don't have the background for their company, they either need to hire it (get better managers) or sell their idea. Otherwise, they may be facing years of struggle.

If you need help, ARRiiVE's business planning team has an incredibly strong track record of writing business plans that get funded. In fact, ALL of the business plans we've written in the past seven years have received the desired funding.

Make sure you identify your strengths and weaknesses. And, if you don't need money now, still keep in mind that you may in the future. Raising money is often a part-time job for many new entrepreneurs. Get good at it, and you'll succeed much more wildly in the early years of your business launch.
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A New Social Website

Have you heard the term Web Democracy?

I heard Guy Kawasaki, the former evangelist for Apple Computer, mention his new baby, Truemors, and he called it "Democratizing the Web". I'd not heard of that expression, so I checked it out. At first, yet another social networking site. But I had to dig deeper. Basically, I see Truemors as being kind of like Digg, but more social (not just tech/geekspeak). You can become a Truemors blogger or journalist through their system, and thus then become a contributing member of their system. I'd consider Truemors a new type of social website.

Guy built Truemors with very little investment other than lots of time and staking his name on it. Initially, he received some negative press. However, I'll point out that press garnered over 300,000 page views within ELEVEN days! I wouldn't mind negative press that send that many visitors to ARRiiVE, because I'm sure most of those visitors left feeling like Truemors has a voice and a place on the Web to accomplish their vision: democratizing the web.

The idea is to share information, and to share it freely, across multiple categories. "But, isn't that what we're already DOING on the web?" you might ask. Well, yes, and no. When I dug deeper into what is going on with Truemors, I think it is more about the QUALITY of content than mass sharing of content. During the initial launch, there were 450 posts. Of those, roughly half got deleted for being "crap" posts.

I can't blame Guy for that, at all. In moderating a group on Advanced Collaboration at Plaxo, I have found that roughly 50% of all posts into the group are either non-related, unfocused blogshares, or spam. In other words, crap. I've been criticized for moderating my group at Plaxo, but my point is this: what value is a group when posts are filled with UCE, SPAM, poorly written messages, and other crap? Wouldn't you rather have a group moderated for high-quality content? To which, I'm now starting to get some kudos and applause from the group. My hope is that other members will join me in helping moderate the contributions to the Advanced Collaboration group in a positive manner. My own goal in creating Advanced Collaboration was to build a collective platform to contribute, gain ideas, and eventually promote what I'm working on over at Semantic Collaboration.

Although Truemors claims to be unmoderated, the truth is that Truemors is HIGHLY moderated. In order for Truemors to claim quality, they have to be. I, for my part, think that Truemors may succeed. I feel the same curiosity around it as I did when Steve Jobs invested in Pixar. And, we all ought to know how that ended up for Steve (Pixar was purchased by Disney for $7.4 Billion). That's a cool $3.7 Billion dollars in value for Steve Jobs. Not bad, huh?

Not only that, but he gained a seat on Disney's board, which means he can steer future direction of that stock's performance, too, and gain leverage to integrate more Apple-related solutions into Disney, which will help Apple's performance, too. Now, how will this pan out for Kawasaki? My gut tells me that he'll sell it when he feels it reaches such a critical success that someone larger, like Time Warner, might come in and purchase it for billions.

I'm still learning about Truemors but my initial impression is that this site advanced social websites with a more intellectual bent, an "NPR for the eyes," as Guy calls it.

Kudos to you, Guy. Please keep me informed as to how it goes. Heck, I might even post a little there, myself.
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Post by Scott Andrews, CEO of ARRiiVE Business Solutions.

ARRiiVE Business Solutions helps executives improve sales, launch products and services, and build dynamic, cross-functional collaborative teams. For more information, contact info (at)ARRiiVE (dot) com or call us at 1 (805) 459-6939.

Copyright © 2007 ARRiiVE Business Solutions. All Rights Reserved. Truemors is Copyright © 2007 Nononina, Inc. ARRiiVE Semantic Collaboration, Apple, Pixar, Time Warner, and Guy Kawasaki are trademarks of their respective owners. No infringement intended. You may republish this article only if you publish in WHOLE with the COPYRIGHT and ALL ACTIVE LINKS intact.

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