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Category ArchiveBusiness Tips

Do You Need a Business Plan?

Very early in my career, I sought advice from a seasoned business owner.

“Do I really need a written plan?” I asked impatiently, being inexperienced. He scoffed, “Why spend six months writing a plan? Go start a business NOW!”

That was great advice, exactly what I wanted to hear. So off I went, and despite myself, I was a modest success. But in hindsight, I now realize I could have been spectacular rather than modest.

Do You Need a Business Plan?

If you’re an organized sole-proprietor, I imagine you can do just fine without destroying half a forest to memorialize your every proprietary insight. However, if you plan to seek funding, hire employees or otherwise engage in activities to facilitate growth – you’ll find you really need someplace other than your head as a repository for your entrepreneurial vision.

The need for a formal business plan within small to medium enterprises (SMEs) is often the $64,000 question. If you’re seeking venture capital or other external financings, let’s calls it a $6.4 million pre-money consideration, because without a business plan you are not likely to get your hands on other people’s money.

A Written Business Plan Gives You a 90% Better Chance of Succeeding

Each year businesses of all types fail because the founding parties forgot to do the one thing that raises the probability of having business success exponentially; planning! Do you have enough capital to launch the business and survive until you reach breakeven?  When does breakeven occur?  How many things do you need to sell to achieve it?  What needs to get done and will it be done in-house or outsourced?  These are but a few questions addressed in a well thought out business plan, providing a roadmap for your success.

And while projections are guesstimates, at the very least crunching the numbers will give you a sense of what will it takes to make a viable, sustainable business.

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Do You Need a Business Plan?

First Determine If There is an Unmet Need

First Determine If There is an Unmet Need

Last evening, I attended a networking dinner with a friend of mine.  We were engaged in a light conversation with a gentleman when out of the blue my friend launched into a pitch about a joint project we were working on.  Very quickly, it became evident that this guy was not a prospect for our services.  My friend threw the ball to me hoping I might try another approach.  I opted to wrap things up instead.  I acknowledged this might not be the solution for the prospect, but asked if he should know of anyone that might find our services helpful to please keep us in mind.

First Determine If There is an Unmet Need

By closing down the pitch, it allowed the third-party a graceful exit.  He didn’t have to say no.  And it gave him an opportunity to be helpful if he should so choose.  I have found that most people genuinely like to be helpful.  They may know someone who might be more suitable for offering and make an introduction.  “You should meet Bob, his company is growing and you might be able to help him…”

In hindsight, what went wrong?  My friend never established if there was an unmet need.  Instead, he pitched a solution.  Did anyone need this solution?  Obviously, not the guy we were chatting up.  This all could have been avoided with a few questions to the prospect.  Before you offer a solution, you must determine what need is not being met, or if there is a gap in satisfaction in the product, good, or service that is being offered in the marketplace.

Ideally, you want to lead the conversation from small talk to what are the prospect’s unmet needs.  Start with a few light probing questions to see where the prospect is at.  How is business?  What are you working on? Based on his willingness to share or not, will determine whether you probe deeper for an unmet need.

If the prospect shares more or self-identifies an unmet need, then you have an opportunity. Does your product or service do something for him that no else can do? Can you do it better than the competition? If you cannot answer these basic questions, then you need to stop what you’re doing and listen until you can.

Once an unmet need has been identified – and you can say yes to above questions, then you make a pitch.

First Determine If There is an Unmet Need

How Important is a Pitch Deck?

A few years ago, I joined Toastmasters. I joined because I honestly believe that 1) Public Speaking is one of the most compelling marketing tools in a entrepreneur’s bag of tricks and 2) Almost all of our public speaking could use a little work and outside guidance.  Don’t believe me? Set up you cam to capture your most profound thoughts and after 5 minutes play it back. I hate to say “I told you,” – oh, who am I kidding? – See, I  told you!

Your pitch is your one big chance to get that ever elusive “angel” to become interested in you next Uber like business that’s a guaranteed Unicorn. Are you really going to go it alone?

I was commiserating with a long time friend of mine, Troy Norcross, about sitting through yet another batch of bad pitches.  “You know we can help those startups? They should talk to us.” Yup, he’s got a startup and it specifically helps perfect your pitch – Startup Business Review. He also work with you to get in front of the right investors.

How important is a pitch deck?

It’s a great question – and a terrible question all at once. I think that one of the biggest issues that people face when pitching is that there isn’t just a single pitch deck that they need. There’s the pitch deck that you send when you can’t present the business yourself, the 20 minute stand up pitch deck, the 5 minute pitch deck, the pitch deck you use to pitch your business and the pitch deck you use to pitch your product.

How important is your pitch deck? How important is it for you to convince people to think and act differently?

What should you lead with?

Empathy and Curiosity. In the first slide you have to communicate to your audience that you have a shared view of the world – and that you might have something new to share with them.

Some pitch decks lead with explaining the problem. Some lead with describing the size of the opportunity. Some lead with their amazing team. The most important thing is that you lead with a message that your audience is going to immediately relate to and then want to learn more about.

What are the key messages that you need to convey?

This all depends on who you are pitching – but if we’re assuming that you’re pitch deck is for investors the most important message you can convey is that you are “investable”. The pitch deck needs to leave business angel the feeling that you genuinely understand your market, your customers pain, your solution and your teams ability to deliver.

Can you explain what “Go to Market” entails?

“Go To Market” – In earlier times Go To Market meant putting your products (eggs, spices, garments, etc.) into a cart and walking to the market. The market was where all the people would come and walk in and out and through the stalls looking at everyone’s goods. You would arrange your products to look as attractive as possible in the hopes of selling as much as you could.

Go To Market in the digital world is much the same, but instead of taking your cart to a centralized market, you have to come up with a strategy that allows you to reach those people who might want to buy your product or service and to get them to come to your website (your stall) and then make sure that your product presents in as attractive way as possible.

Put more simply – a go to market strategy describes how you are going to make sure that as many potential customers as possible come to you.

Another nuance of a good Go To Market strategy is that you want the “right” customers – not just “lots” of customers. You want to reach people who are looking for a solution to a problem that you solve – and who have the money and ability to pay for it.

What about the Revenue Hockey Stick?

Ah – the hockey stick. It’s that part of the graph that shows you growing from meager numbers of customers and revenue – and suddenly shooting to the stratosphere. The hockey stick has become a bad cliché. Most investors just let out a “sigh” when they see a hockey stick forecast.

If you’re going to put a hockey stick in your pitch deck, be ready. investors will grill you on all the assumptions that you have made to create the rapid growth.

Some US-based investors don’t even want to see the hockey stick – they know you have one in the deck. Some UK investors actually rate you as being “naïve” if you have a hockey stick – unless you can back it up.

The best time to put a hockey stick in your deck is when you’ve had the initial traction and you can show real data that you’ve crossed the bend in the hockey stick – when the graph looks more like a boomerang – with the potential  to become a hockey stick – now that’s interesting.

What should you avoid?

Here’s a list of things that I think everyone should avoid:

  • Never create a deck without answering each of these questions:
    • Who is my audience
    • How much time do I have to present / does my audience have to read?
    • After seeing my deck, what do I want my audience to think?
    • After seeing my deck, what do I want my audience to do?
    • At the end of the deck is there a clear, simple and reasonable call to action? (Call me for more info. Invest £500K for 20% today. etc.)
  • Too much text – and text that is so small you can’t read it. If you’re presenting the deck use the Guy Kawasaki idea of no font smaller than 30 point. If you’re not going to present – but only mailing the deck – no font smaller than 20 point.
  • Too many slides: Really you should aim for 10 – 20 slides. You can have a further 10 slides in the back of the deck to answer specific questions – but remember,  the first 10-15 slides need are a stand alone complete presentation.

What do investors really look at?

Pitching is selling – and your vision and your ability to lead a team to deliver that vision is what investors are looking at. You could have the best idea and team in the world – and if the investor doesn’t connect with you – it’s not going to happen.

Do I need an exit strategy?

The Exit Strategy is another one of those “almost a cliché” things. Most business plans say: “And then we’ll be bought out by Google, Facebook,Amazon or someone else.” – What an investor wants to know is not what is “your” exit strategy – but what is “their” exit strategy. When will the business be at a point where they can take their money back and what returns are you hoping to offer? Are you going to go public? Are you going for acquisition? Of is this a business that you want to run for the rest of your life? ( A lifestyle business )

How can you help?

Your pitch is a critical part of the success of your business. I can help you look not just at the pictures and text on your slides – but with the pitch itself. I do this by asking you questions and helping you to see your pitch from the viewpoint of the audience.

Right now, I’m offering a review of your pitch deck against 25 key points. After reviewing the deck, I’ll spend 30 minutes with you 1 on 1 sharing my ideas on where you’ve nailed it – and where you can improve.

After you’ve had a personal pitch review with me – you’ll look at your business differently, your audience differently – and your pitch differently.

Register at www.startupbusinessreview.co.uk for your pitch review today.

Networking Tips – Planning a Strategy

Networking is an effective means of business development. But many folks are intimidated by the prospect of walking into a room full of strangers and initiating conversations.

In my early days of networking, I dreaded the thought of going to a networking event.  Often I would go to an event, stand in the corner for an hour or two and then go home defeated.  I was never going to be the kind of person to naturally work a room.

Networking Tips – Planning a Strategy

I needed a plan.  I figured out the business organization I wanted to become involved in and joined the Board.  This did two things for me – at the very least when I walked into their networking events I would know my fellow board members – it was no longer a room of strangers.  Secondly, it created visibility and people approached me and not me having to make the first move.

As a board member, I wanted to make life easier for the non-networkers like myself.  It became policy that board members would seek out the corner dwellers, break the ice and when possible introduce the newcomer to other members.

That approached worked for me, it may not be possible for you.  Another idea is to agree to attend with a friend or colleague.  That way you don’t have to walk in alone.  Ultimately, it is about breaking the

Recently, I was meeting with a client (who I met through networking) and she was expressing frustration that her staff didn’t embrace networking more.  I asked if she had taken the staff to networking events that she attended.  Of course.  I asked if at those events if she was the prime communicator and if the staff person faded into the background.  AH…

While the staff had gone to the events, they weren’t really networking.  They weren’t initiating conversations. They weren’t pitching the company.  They were simply supporting players at best.  I suggested she once again join them in networking events but let the subordinate lead.  Let the staff person “network” and she could be their support.

Networking is daunting for many.  Especially, if you are not the sell ice to an Eskimo type.  But like anything else, it is a skill that can develop with a little practice.  And if you see someone alone in the corner, break the ice – you’ll be doing them a favor.

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