Here are some findings:Based on many of the plans that have been presented, here are some common threads that go through most of them. The reason I'm putting them out here is so that they can be addressed before your next wave of funding is being sought. Hope this helps the entrepreneurs / small businesses.
Businesses are not well researched
- Too many feel good statements are made. One that sticks out in particular was one which under the title of Research and Development, the document said, "Research and Development will be ongoing". Tell me would you part with your hard earned dollars for a plan with this in it?
- Many of these business plans use assumptions that are filled with errors and overly simplistic with these kind of results - "Earnings should reach $1 million dollars within 12 months and then grow by x% per month for the next year". Many start ups span years of operating without seeing a million dollars pass through it. It depends on too many factors which are often not addressed within the confines of the document.
- Benchmarks are used which originate in markets dissimilar to the one within which the business has to function.
The request for capital are hugely unrealistic
- "Did you really just ask me for that much money?" How did you arrive a such a figure and; what will you do with that much money? These questions are often asked and seldom answered adequately when presentation time comes up.
- Capital requirements are often not recorded or given in lump sum in the hopes of the reader glossing over them.
- If you were presenting to someone like you, would you part with that much money for so little benefits? That's a question that needs address.
- How will you pay it back? Investors are not only looking for ROI (Return on Investment), they are also seeking Return of Investment.
- WAIT A MINUTE?!?! What are you putting into this business other than an idea?
The operations elements of the business are at best weak
- How does this business operate? Truly! The vague information that you put up here does not suggest that you've done your research. Matter of fact, it doesn't even seem like you know what you're doing in this business. Sure I understand that you want to say what you do, without saying how you do it; but clue me in - that you know what you're doing!
- This document does not show that you've even considered the elements of the business that you need to at planning stages. DO NOT WASTE THE TIME OF THE INVESTORS / FINANCIERS!
- Who is your team? What will they be doing? What examples do you have for success in other ventures with which you were involved?
The marketing addresses mostly all elements except sales
- The demographics and psycho-graphics look great! So does the industry information that you pulled from the internet. But....how does it related to what's happening in this area where you want to set up business?
- You've sort of addressed advertising - newspaper, radio, television. Your budget looks more than a little low. Do you know how many times you must run the advertising before people even hear about you, let alone purchase what you're offering? Blank look / dead silence comes back.
- Then you say, but we're going to use Social Media - you know Twitter, Pinterest, Facebook, LinkedIn, and a host of others. Once we throw enough mud at the wall, something's got to stick, right? Do you have a network that we can have access to?
- What are you going to say to them? Based on what you've presented, quite frankly - NO!
- Learning to use Social Networks has a learning curve that is steep for some. Most don't manage to develop a following as quickly as some may presume.
- But all this marketing is expensive. Putting together ads before they even get to go out costs - no kidding. Are you going into business to give things for free? Why then are you trying to get everything for free?
- Where are you sales strategies? Is often met with, "I don't like selling". That's why I'm doing marketing. Well, you tell me what's wrong here. Yes sales is an element of marketing, and it is the only one that brings in the money. All the others are cost centers.
Things that you should consider
- Often, there is a need to get have sound business planning documentation prepared
- When you intend to go into business you need to have money for a variety of reason
- You will need
- Business start up funds - registration / incorporation, bank account
- Professional fees - legal, accounting, business advisory, real estate
- Meeting costs, research for your business may be time consuming / costly
- Remember, excess greed will not make you money. As you wish to be paid when you are in business, those whom you contract their products / services will also want to be paid in a timely manner.
- If you still decide to get into business, and do it well, chances are you will be successful. Here's wishing you every success.
Richie B. is a Business Consultant & Trainer located in Barbados. He's well versed in business development for start ups, expansions, and turn-around projects. Richie's also capable of training to implement the plans that have been developed. For more information, see Blades & Blades Consultancy Services.