Category Archives: Business Plan

3 Reasons Why Your Business Plan Stinks

There’s a problem with your business plan. I haven’t read it. I don’t know what your product or service is, or what problem it solves. But I know this: there are holes in what you think is an amazing business plan, and you need to fix them if you want anyone to read it, let alone invest.

Most people never even finish reading poor business plans because they have learned to recognize instantly when an idea hasn’t been fully fleshed out, the entrepreneur doesn’t understand the problem they’re trying to solve, or when there’s just no evidence to support the claims being made in the business proposal. I go over how to write an effective business plan in my book on business success, in which I lay out the principles you need to know to write a convincing proposal that really does your idea—and the work behind it—justice.

Your Idea Gets Lost in the Details

Any good idea you have is lost in an overwritten business plan. Sure, people want figures and facts that will back up your business plan (market research, competitive analysis, budget estimates, financial projections for the first few years, etc.), but these elements should be referenced in your business proposal, not spelled out in full like a master’s thesis.

Unless you avoid common mistakes, people will spot you as a entrepreneurial wannabe.

Unless you avoid common mistakes, people will spot you as a entrepreneurial wannabe.

Hide the details elegantly; you don’t need to front-load everything into the proposal. If an investor is intrigued, they can drill-down into that cost analysis to see your staffing plan, your materials estimates and your projected revenue. Put those things in separate documents and keep the main proposal itself as a birds-eye view of the business plan essentials, as laid out in my book, MakeMillions.Com:

  • The problem that needs a solution.
  • Your solution to that problem.
  • Convincing evidence that your solution will work.
  • A non-sugar-coated assessment of the risks associated with your venture.

If you lay these things out in a simple, easy-to-digest form that doesn’t try to win readers over with jargon, your idea will be able to stand on its own. You’ll really have a good chance that people will read the whole proposal, and your research will show through in the organization of the data you’ve collected.

Your Market Research is Light or Nonexistent

If it’s evident that you haven’t done an exhaustive amount of research on the niche you want to occupy, people will simply pass your proposal over. In fact, I’d say that a proposal without research isn’t really a proposal at all; it’s just wishful thinking on paper.

No one will believe you can compete without understanding the current players in the market space you want to break into. No matter how impressive your product is, investors will want to be reassured that established players don’t already have something better in the pipeline. If you’re entering an already competitive niche, you’ll really need to spell out why you’ll be able to compete with the big players in the space, and that your idea is unique enough not to get lost in the crowd.

The worst thing you could do is leave out analysis of some of your obvious competitors in the space or ignore similar products to yours from even smaller players who may be poised to eat your lunch. If someone can find out more about your competition with a simple Google search than they can reading your proposal, they’re not going to take you seriously, and they shouldn’t.

You Don’t Talk about What You Don’t Know

Experienced investors and business people will be able to see blind spots in your plan. Do you? If so, you’d better spell them out in detail, describing exactly what information you don’t have that could impact the likelihood of success, and why you think you’ll be able to succeed anyway.

Every business plan involves some basic assumptions (about the economic climate, about customer demand, about competition, etc.), which you should spell out logically in order to show your investors and potential partners that your plan is firmly based in reality. Avoiding these subjects makes it seem like you’re either unprepared or being deceptive about the actual risks associated with the proposal.

Mike Mann, social activist and serial entrepreneur, is the author of MakeMillions.Com, a business book focused on making money in small business in order to better serve society. Read or download the book today for insight on his philosophy on wedding entrepreneurship and charitable goals

How Your Startup is Like a Relationship

As you begin putting so much time and effort into your startup, the amount of time and energy you’re putting in can start to feel a little overwhelming and confusing, but you may have more insight into the process than you think. Trying to get a new business off the ground has some uncanny similarities to being in a long-term committed relationship. Here are a few dating business tips to make your start-up successful.

Investment of Time and Energy

If a relationship is going to work you have to be fully invested, putting in enough time and energy to help the budding romance thrive. It has to be a top priority, and you have to be dedicated to its success. The same goes with your start-up. If you are going to start a business you need to be willing to devote the resources needed to get the job done, because nobody else will. You need to be committed to this business, and only this business. Don’t let your eye stray to other opportunities. Focus on always making improvements and you’ll both grow together.

Choose Your Co-founder Carefully

If you are looking for a business partner or co-founder, choose wisely. You may initially be searching for the person with the right college degree, the most experience, or the best sales skills you’ve ever seen. You may want to think again.

Obviously you want a co-founder with skills, but if you look at your start-up like a long-term relationship, you’ll realize that you are going to be spending a lot of time with this person. You need to find someone you get along with and has personality traits that match or complement yours. It should be someone who can work through emotional difficulties, sort out financial problems, and be someone who you aren’t going to get sick of seeing day in and day out.

Like your relationship, neglecting the needs of your startup could mean the end.

Like your relationship, neglecting the needs of your startup could mean the end.

Ups and Downs

Every relationship has ups and downs, and so does every startup. One minute you are positive this business is taking flight and going to make you the millions you always dreamed of. The next minute, everything comes crashing down and you wonder if you are going to be able to keep your head above water.

The best advice I can give regarding the ups and downs of a start-up is to know they are coming. A couple should not end their relationship because they had one argument. Likewise, when you hit a bump in the road or a few problems with your startup, hold on. They pass—usually. You can overcome the hardships and the company will be all-the-better for it.

The Small Stuff Matters

In a relationship, the small stuff matters. It matters if your partner saves you the last piece of chocolate cake. It matters if they offer to rub your feet after a long day at work. And, alas, you realize that the whole reason the relationship is working is because of all the small stuff that added up to mutual attentiveness and caring.

A start-up is the exact same way. You begin with a big picture and a huge goal, but you find that the daily grind is what takes over. You have so many small tasks to cover to make sure things get rolling and keep running smoothly. They may seem tedious and often uninteresting, but they are what will keep your business moving, growing and succeeding.

Sometimes You have to Play Games

Without compromising honesty, sometimes you have to play games. If you want someone to be interested in you, you may have to play a little hard to get. You may have to flirt a little then, seem a little uninterested at your next encounter.

Startup founders sometimes have to play similar games to find success and drum up interest. Whether you’re trying to attract new customers or court investors, a little (ethical) game playing may be required. Remember that your presentation is just as important as your product. Your attitude, staging and performance are often big selling points. Flirty sometimes and backing off at others can make a big difference in how you’re perceived.

Cut Your Losses

Not every relationship ends with a marriage proposal. Even if both people are great, sometimes things just don’t work out, and it’s better if they just go their separate ways. The same goes for your new company. Sometimes things just don’t work out, despite all your best efforts. This doesn’t mean things won’t ever work out for you in busines, or that you will never have a successful idea take off. It just means that you need to know when to cut your losses and move on to the next project.

Relationships require a lot of work, and if you’re not committed to seeing it succeed in the long run, you’ll end up facing problem after problem. If you’re ready to jump into a new business, be prepared for all the ups and downs, stay focused, and be ready to compromise when the situation calls for it. And above all, cut your losses before things become dysfunctional.

Mike Mann, social activist and serial entrepreneur, is the author of MakeMillions.Com, a business book focused on making money in small business in order to better serve society. Read or download the book today for insight on his philosophy on wedding entrepreneurship and charitable goals

Take Nothing for Granted: Write a Plan!

The market changes rapidly, and you must constantly change with it. You can never take anything for granted, especially what happens within your organization. Your business will never make millions unless you constantly reexamine every process in your company. Never assume that you will be profitable tomorrow because you are profitable today.

Get the Right People on Board

Your team is crucial, and you cannot succeed without them. Make sure you hire the right people, and make sure that they fit together well. If any member of your team does not buy into the vision of your business, they will hold you back. Motivation is more important than their skill level. Of course they need to have the skills, but they also must want to build your company. They must also be able to follow your lead without always needing to be told what to do.

Offering stock options is a great way to find employees who are truly committed. Skilled applicants who are willing to take a lower salary in exchange for stock options will be motivated to help the company succeed. This approach will also help minimize your losses if your business venture fails for some reason.

Write a Business Plan

No business is going to make millions without a well-prepared plan. Not only do you need to be able to show your plan to investors, but you need to be able to review and revise it constantly. Writing it down can reveal key weaknesses you need to fix. If you do not see any weaknesses as you write it down, look again. Never assume that your plan is the best it can be.

Write your plan for investors and not just employees. Keep your plan simple and easy and never assume that your readers know what you are talking about. Make certain that each sentence in your plan can only be interpreted one way. Since each investor will look for different things, your plan must be very detailed but easy to navigate. To help them find what they need, use a lot of headings so that readers know exactly where to look. Try to explain as many things in graphs and charts as you reasonably can. They are much harder to misinterpret than prose, and many investors prefer looking at them to reading anyway. Avoid too many buzzwords and explain any you do use.

Execute Your Plan

With a good team and a solid plan, you are ready to make millions. Your plan will detail your Standard Operating Procedures and provide your employees with the direction they need. When you put it into action, you may decide that adjustments need to be made. Make sure you write those adjustments down in your plan for your investors and new employees to see. New employees should know exactly how your company works by reading the plan, which will save you on training time.

When you choose the right people, write an excellent business plan, and put it into action, you set yourself up for success.