Jan
0

3 Reasons Why Business Plans Fail

mistakes, start-ups

3 Reasons Why Business Plans Fail

I’ve helped several people put together business plans.  The business plan I put together for my comedy club was used as a sample form in a book on business plans.  Theoretically, I know something about business plans.  I’ve seen some bad ones.  The worst ones I’ve seen tend to be bad for one of these reasons.

3 Reasons Why Business Plans Fail

1. Filling in the Blank

There are plenty of software packages and business plan templates out there on the tubes of the Internet.  While they can give you  bit of structure when you’re completely lost and on your own – they can also have you focusing on issues which make little sense if any.  A business plan that’s intended for venture capitalists or other serious investors needs to have an exit strategy – a plan for cashing out the investors.  If you’re putting together  a business plan for a small business or some business that you want to build and grow – you don’t need an exit strategy.  Your exit strategy is filing for bankruptcy and moving back to your parent’s basement.  Don’t fill in the blanks if you don’t understand the blanks.

2. Failure to you know, plan

Want to create a bad business plan – don’t use it to detail what you’ll actually do, use it to provide a 10,000 foot view of something you need to have microscopic insight into.  This tends to be compounded by the fill-in-the-blank approach, where a business has a ‘marketing plan’ consisting of ‘generating great word of mouth, building the brand and engaging in social media.’  I’m reminded of a stand-up comic who asked an audience member what he did for a living.  The guy in the audience said “Nothing” to which the comedian replied “Then how do you know when you’re done?”  If your plan is that vague, how do you know when you’re doing it?

3. A Plan for World Domination

Not every business is going to be successful.  And yet every bad business plan seems to not only promise success, but promises the kind of success that results in each investor ending up with enough money to buy their own island and flood it with enough filthy lucre to sink the damned thing.  Project a reasonable growth arc and realize you’re not going to turn a web design company into the second coming of the Roman empire.

Avoid these common mistakes and keep your business plan alive. Reblog this post [with Zemanta]
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Nov
3

A clever idea to raise money for your startup

general, marketing, resourcefulness, start-ups, tips

A clever idea to raise money for your startupMy friend, the incomparable Margaret Hicks, has started her own business giving tours of Chicago.

A Smart Idea for a Business

It’s really a great idea for a lifestyle business.  It leverages her knowledge (she’s trained as a docent, and has done tours for other companies) and her skills (she’s funny, engaging, and smart without being smarmy).  It also leverages the natural resources available in Chicago (interesting sites, stories, and an abundant tourist population) all of which she can access at basically zero cost.  Zero cost natural resources? That’s the type of thing business dreams are made of.

A clever idea to raise money for your startup

Margaret’s really gone from being a smart cookie, to being a whole tray of steaming hot cookies made by your Nana with her fund raising strategy.  She’s having a “Help Me Build My Business” party.  For $20 her guests will get booze, beer and great food (her husband is a pro grade cook).  I was so enamored of the business idea and the fund raising idea that I kicked in $50.  And I can’t even make the party!

Why this is a clever idea

I’m a big fan of bootstrapping, but also calling in all your resources.  By having this party, she’s calling in her resources in a fun way that won’t burn out those resources.  It’s the Girl Scout Cookie Principle:  ask people for small favors and give them something great in return and you can tap those people again and again. Girl Scout Cookies raise funds for the Girl Scouts without tapping out the resource (all those aunts, uncles and people at work).  Why doesn’t it tap them out? Simple, they get a benefit above and beyond the ‘donative’ benefit and the incremental hit is so small they barely notice.  Do you remember how much you spent on Girl Scout Cookies this year? I don’t, except when I tuck my gut into the car, and next year I’ll get hit up by the same tiny Trumps for cookies and willingly fork over my moolah.  Brilliant.

It also taps into the Kid Rock Marketing Method: relentlessly promote your product to whoever will listen – particularly if those people express positive interest in the product.  If you went up to Kid Rock after one of his early shows and told him you liked his music, he’d thank you and ask you if you were coming to the next show.  If you were, he’d ask if you were bringing anyone.  If you were, he’d ask if you wanted to sell T-shirts (giving you a T-shirt in return).  Obnoxious – hell yeah.  But that’s because we live in a world where self promotion is frowned on.  Are you starting a business? Do you want it to survive, succeed and possibly grow? Are you telling people about your business?  If you answered “yes” to the first two questions, why are you answering “no” to the third question? Networking is as much about getting the word out as it is about asking for stuff.  Start getting the word out.

Margaret’s doing a great job of conceiving this business, funding it, and getting the word out to her potential supporters and evangelists in one swell foop. Check it out at ChicagoElevated.com.

Have any clever fund raising ideas? Ever been sucked up into someone else’s promotion efforts? Ever sold a Kid Rock T-Shirt? Chime in on the comments.

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Nov
0

3 Big Ideas from Big Communications’s Lisa Stern

culture, entrepreneurship, personality, start-ups

3 Big Ideas from Big Communicationss Lisa SternWe had the pleasure of taking the current team of Bizdom entrepreneurs (whom I am calling Team Hammer Pants, since they can’t come up with a team name of their own) to Big Communications, to meet with Lisa Stern, the Founder.

Lisa gave a great overview of the founding story of Big, as well as a description of their culture.  I could easily write a dozen entries on Lisa and Big (hell, I could write one just on how great their offices are – they are absolutely beautiful), but I want to focus on 3 Big takeaways from their story and culture.

3 Big Ideas from Big Communications

1. The business you find success in may not be the one you start in.

Big originally started purely doing video production.  Now they handle communications for health care companies.  This isn’t to say your initial idea is unimportant and therefore unworthy of proper research.  Rather, the lesson here is that you’ve got to follow the natural wave of your business and fish where the fish are – build on the success you earn, rather than the success you wish you had.

2. Passion means emotional investment in what you do.

This was a point I tried to emphasize at my TEDx presentation.  It’s not about doing what you love, but rather loving what you do.  I’ve heard lots of people talk about ‘passion’ and seen people confuse obstinacy and unfounded pride with passion. Having passion doesn’t mean that you can magically will something to happen.  Instead, it means bringing an emotional investment to what you do – finding the love in what you do.  When I asked Lisa what she’s currently passionate about she said “I’m really passionate about how we staff projects.”  Trust me, no one says “When I grow up, I want to staff projects!”  But she’s found the interest and passion in that task, and that’s a beautiful thing.

3. Vision is about having a goal you’re moving towards

Another great insight into an oft-cited entrepreneurial trait: vision.  Vision isn’t about having a grandiose vision about what success will look like (yachts or being on Oprah), but rather about having a very specific goal you’re moving towards.

Bonus idea: Not really a bonus idea, but rather a combination of the final two, and it’s this – any old passion or vision won’t do.  You’ve got to have a specific type of passion and vision to be a successful entrepreneur.  I meet a lot of people who are very emotional (what they think is ‘passionate’) and have a well defined vision for themselves (usually of them on a yacht with Oprah), who think as a result they’re entrepreneurs.  I can give you a well defined vision of what I’d do if I won the lottery (it wouldn’t be Oprah or a yacht), but that doesn’t mean I’m going to win it.  I’m extremely passionate about fantasy football, but that doesn’t mean I should make a career out of it.

What do you think? Will any old vision or passion do? Or do you need something more?

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