A Goal without a Plan is Just a Wish

In a recovering economy that was on the precipice of collapse after Lehman Brothers, AIG and the real estate crisis which won’t quite go away, investors have increased expectations in their considerations of business plans and ventures in all market sectors. The days of the dot.com boom and ventures raising capital using scratched up business outlines on napkins seems like a fantasy world in 2012.

With many websites that contain keywords that land at the top of Google for our many web sites, we receive many inquiries to assist companies in completing their business plan to access capital. Most entrepreneurs share similar traits like over-confidence. Successful entrepreneurs must have a high degree of confidence, yet maintain a delicate balance to not slip into overconfidence in preparing business plans that lack transparency and details in today’s economic environment.

Few have expectations of raising capital without a plan but most don’t have a clue what defines a quality business plan. Many use templates or hire lone wolf consultants that have fashioned themselves as experts after failed careers elsewhere. Most proceed with incomplete, non-transparent summary business plans, let alone forecasts or a market and competitive analysis which is almost missing altogether.

This is akin to fishing with a bamboo pole to catch a shark, i.e. capital. When you go fishing for a major prize like marlin or bass, you need the right equipment and bait, just as seeking funding requires a high quality, detailed and transparent business plan. As to transparency, it isn’t about saying something but it is about fully supporting a statement to the fullest extent possible. Basically, make believe you are from Missouri and show me, don’t tell me.

I admire and respect the entrepreneurial spirit with so many people contacting me with worthy goals to seek capital. Overconfidence sinks most with a lack of experience hurting the majority as well. An incomplete or poor quality plan is as worthless as no plan at all in today’s financing environment.

Hence, a goal without a plan is just a wish.

Sustainable Entrepreneurs Desperately Needed

The global economy is slowly improving from the malaise, debacles and narrowing avoided catastrophes that began in 2008 with Lehman and AIG as poster big boys among others. The bail out of GM and Chrysler proved to be wise and positive. It is unfortunate that the auto industry as a whole remains as slow as a one legged tortoise in moving away from gas powered vehicles. Why do US politicians and the masses let alone the world not understand such a basic premise that fossil fuels are finite?

We have to reinvent the way we do things as a society from a macro to micro basis that has a sustainable focus. Local businesses need to use local resources wherever possible, lessening the carbon footprint and reduce our dependence on foreign oil. Oil, let alone coal or natural gas are resources that have limits that have calculated by many great scientists if common senses isn’t enough. If we don’t create alternatives as well as develop literally millions of new businesses worldwide that are local, preserve resources, and deliver goods and services regionally, our planet is doomed. If we do shift the paradigm of fuel usage to renewables let alone natural gas, we are doomed.

Now is the time to seize the opportunities with a green business plan or a solar business plan, let alone look at various opportunities we have available to entrepreneurs that desire to get into a new business.

Contact us for more information at tim@green-businessplans.com

Business Plan Process and Procrastination

So many people tell us they are ready to move forward with their business plan to grow or launch their business. We always schedule a call to discuss a business plan with a potential client in detail, and then develop a scope of work as all great plans are custom. Each business has nuances and issues that have to be addressed in research and varied depths of content to be successful.

Thereafter, prices and terms are then discussed after a scope of work is and if agreed upon, I ask, "If you are 100% ready to move forward with the business plan and deposit discussed, then ask for a formal proposal.” Since so many people ask for a formal proposal that takes time for me and my assistant to complete, I typically ask if they are sure and often mention the time it takes. Nonetheless, for every 6 or so formal proposals that I send, one client moves forward with an engagement. Hence, with our high SEO rankings and other marketing, I schedule lots of calls to complete as many as 15 business plans in a month. Part of me understands that is part of the process, although it is somewhat inconsiderate to request a proposal and that time/expense when someone is not serious about moving forward, which is the case for so many procrastinating entrepreneurs.

After 1,000 plus business plans over many years, we make the process easy, getting existing information via email and additional information from the client on interactive scheduled calls with at least one member of my team working on the plan and myself. The majority of clients need guidance on many aspects of the business model and, therefore, their business plan. After follow up email memos and additional scheduled calls as needed for questions as they arise, we complete the market and competitive analysis first and often the marketing plan second before moving on to the business plans and forecasts. The forecasts are completed by either a CPA or an MBA member of my team, separate and distinct of the market analysis and business plan for added experience and checks and balances.

The economy has surely improved and many clients are achieving their goals with business plans we complete, whether for improving their revenues, establishing new market segments, or obtaining SBA or private equity funding. We see so many great ideas and business models. Unfortunately, most never get implemented as procrastination rules the day with potential clients. 

It is frustrating to see great opportunities go by the wayside when great business plans are not developed for funding due to the procrastination of a principal. So many advise they are busy, which is 98% of the time an excuse, as we always find time for things that are important to us, plus our process and team approach limited the time. On a complicated business plan, if you can’t find six hours in month to work with us until final, are you really serious when you say your business is important to you?

If you are ready to move ahead with your business plan to seize the day, please contact me at tim@thebusinessplanconsultants.com.

Raising Capital - Assessing the Options

Over the last several years, raising capital has become somewhat more difficult, yet not much so for viable ventures with a high quality and transparent business plan। The expectations of investors and lenders from Venture Capitalists (VC) to Angel Investors to Banks to SBA has not changed substantially, but they are all more selective. When money flowed in the go go 90's or the dot.com boom, there were plenty of success stories from business ideas that were funded from a scratch pad or napkin. Do plans get funded from an elevator pitch, let alone a summary today? Sure they do...when the principal(s) have great track records (such as built and profitably sold a few companies) and/or a clearly new technology or application is involved.

VC have hundreds of projects presented to them monthly। We have a our own proprietary data base of 750 or so VC firms, researched and sorted by the type of projects funded and what stage। There are some common themes with VC, including a preference for technology centered business plans in unique markets with very limited competition। During the dot.com boom, if you had competition but developed a better mouse trap, you may well be funded. That is very rarely true today.

So many entrepreneurs get excited when a VC firm expresses interest, but that is part of the process in their looking at so many ventures to fund a select few। As an example or how competition is viewed and a VC process may work, we gained interest from a dozen VC for a client with an online advertising application, a better mouse trap in a competitive space. They took an angel investor's money and developed the application (VC will almost always not do this) 2-3 years ago, and then trended revenues up about 2M last year although several competitors far surpassed that amount and their trend would surely continue based on many new clients. While a dozen VC expressed interest, with many follow up conference calls, the competitors in an ever evolving market place did not result in a VC commitment. The silver lining is they did except a Phase II raise for another angel.

There are perhaps over a thousand angel networks nationwide, some local or regional like a couple large groups in southern California, or many national, some where we have premium access। Angels think much like a VC, usually see less projects, invest in earlier stages, take greater risks and are less competitor wary। Angels do come in many forms from those that have invested in many projects and join many networks to be found to those that invest locally that you have to seek out. Angels are almost always the best equity option when compared to VC, particularly in their interest in a diversity of investments and the willingness to invest in early stage companies.

What is an early stage company? It is not a start up or a company that is launching without revenues, but a company that has revenues and has proven its business model yet has only scratched the surface of earned revenues and primarily needs operating and marketing dollars to get the next level, perhaps from low to mid six level income to seven figures। Start ups can attract angel capital as well, but expectations must be adjusted, almost always a phased investment tied to revenue benchmarks।

Of course VC and angels involved mean you are giving up an equity stake in your company। You do get the benefit of sage advice and you do typically not incur debt। On the flip side, in the long term, most entrepreneurs are better off with obtaining solid marketing and business development input within and separate of a custom high quality business plan and obtaining debt if qualified. SBA and SBAExpress are options we always suggest for consideration for early stage companies. When completing a business plan, and to a degree beforehand, we conduct due diligence like a VC, angel or SBA lender all rolled into one to assess the options and develop a plan that has varied capital options to the extent a business at its stake of development can qualify. Armed with a quality business plan, we can help raise the needed capital to expand businesses in a myriad of markets.

Communication is the Key to Success

In our business consulting practice, we work with a diversity of types of businesses, as well as the extremes from new entrepreneurs to seasoned C-level executives. I strongly believe in entrepreneurship as well as have faith that the combination of entrepreneurship and technology break troughs will lead to a new and better economy, and a better world. Therefore, we offer all parties a free scheduled phone consultation to determine i) we can help raise capital to accomplish their goals and make those dreams come true and ii) in developing a business plan to make that happen if a quality transparent business plan doesn't exist. .

In today’s world, communication has most often been reduced to snippets of information where most of Generation X or Generation Y have moved away from email and are stuck in 140 characters for texting. The world is also more random like atoms colliding, with the fact that 90% of people are too busy to answer a phone...myself included. Hence, like I have for a generation, if something is worth doing, it is worth scheduling via email, including calls. Since texting and brevity in our busy lives has become the norm, good communication habits are slowly disappearing. Therefore, I am not fond of texting to say the least and save texting for family and friends when calls and emails are not an option.

I am aware I need more patience, and as a born again Christian, I have become even more aware as being patient in one on one relationships is the right thing to do. Nonetheless, I believe in my big picture and the Lord has plans for me in his big picture (with clients and four renewable/green companies I have a stake, as well as the mysterious unknown). I also believe that time is as at least as precious as money, and giving back is more important than both. Hence, my patience in communicating politely, in detail or in a sugar coated manor versus directly when responding to incommunicative emails is and will always be limited and inpatient. I have written about time and time management, and still feel that ineffective, incomplete and poor communication wastes more time than anything, and wasting my time takes away from helping others, the ability to achieve and therefore give back.

Sometimes I get dozens of inquiries in a day or week regarding a business plan and/or funding, and the overwhelming majority ask a one sentence question that doesn't position me to be able to help. Many times this is due to a lack of experience, but most of the time it is about poor communication skills that are often a result from a life that has become texts and snippets. Very often, when faced with so many email inquiries that do not allow me to help but rather ask what is in effect a virtually worthless question to accomplish what may be a worthy goal, I tend to lose my patience and my answers are answered without enough appropriate thought. That said, I apologize to those I might offend in reading this blog as well.

Below are questions that I receive all the time:

1. Can you send me a sample business plan?

There are a few large companies that you can Google and then purchase a template if you want to do a business plan yourself. Unfortunately, I have never seen a template that wasn't extremely flawed. Logically, would a company with a revolutionary technology breakthrough that would serve many market segments require a business plan that would look like one for a coffee shop and fit in the same template? Of course it wouldn't! Hence, we only do custom business plan that each are different in order to meet different goals and therefore contain somewhat similar but different information. Plus, we can't send clients’ business plans as examples since that would breach confidentiality with our client.

2. How much will it cost?

Again, all our business plans are custom and clients are not well served when anyone uses a template. There are plenty of people that claim they are experts yet put every business venture within the same box. They complete the same research and spend the same amount of time on each plan and, therefore, can charge the same price. However, they do their customers a great disservice and take advantage of so many entrepreneurs.

3. How can you help me?

I actually do get this question regularly and on my busier days in combination with patience issues, my answer is “I don't know because I'm not a psychic.” There are many circumstances that determine if we can help anyone, i.e. what has been invested in the business, the type of business, the background and so many others. The answers will help determine if a client should seek SBA, bank, angel investor or even strategic or venture capital partners.

Many suggest they need a "business plan writer," as in a lone wolf or individual. That thought process diminishes the value of the business plan itself, which is critically important to launching businesses from providing an operational road map to obtaining capital. We have a deep team with team members that have varied experience in different business segments, plus we always have different team members complete the market analysis/business plan than the CPA or MBA that complete our very detailed forecasts. The Super Bowl just ended yesterday, and how many players mentioned in the post game about it being about the team. Yes, there is no I in team, and there are not many success stories that do not involve a team either.

I understand if this information is not for everyone as seasoned executives know that you need to establish a scope of work in order to have a deep professional team complete a highly transparent business plan to achieve their goals.