The Importance of a Business Plan For Entrepreneurs

By Eric Powers

A business plan is an indispensable tool for an entrepreneur and not only because of its importance to the fundraising process, but because of how it helps businesspeople crystallize their strategy and evaluate their process. These are the three major reasons to create a business plan if you are a hopeful entrepreneur.

Fundraising

Most literature on business planning focuses on the need for a plan to encourage external investment into the company, whether it is through loans or equity investment. Most funders will not consider putting money into a company without seeing a well-written, convincing business plan. An entrepreneur must make sure the plan speaks in terms the funders will understand, and meets their requirements for the qualifications of the management team, funding requested, and financial return.

Strengthening Strategy

When strategy is an amorphous concept, existing in the minds of the various company founders, it is loose and perhaps even contradictory. It also does not necessarily make use of the best research on the market, customers, and competitors. The process of creating a business plan requires the entrepreneurial team to go through this research and analysis systematically, creating a better foundation for strategy. Having to write down the strategy also creates an opportunity to make sure all of the founders are literally on the same page about what they intend to do. If they are not, fruitful discussions can be started which are better to get out of the way at this early stage while plans are still much more flexible.

Evaluating Progress

Finally, while the action plan outlined in the business plan is being implemented over the first months and years of operation, the business plan is both a guide and a means to see how well the results of the business stack up to the projections made early on. The pro forma financial statements can make this type of evaluation very easy. Make sure that the original pro formas are kept in spreadsheet format so that actual financials can be laid out alongside them. If your budgeted targets are saved in your accounting software, such as Quickbooks, this kind of comparison can be even easier and variances can be measured automatically.

Eric Powers is associated with Growthink, a business plan consulting firm. Since 1999, Growthink's business plan consultants have developed more than 2,000 professional business plans for entrepreneurs and business owners who have raised more than $1 billion in growth capital. Call 800-506-5728 today for a free business plan consultation, or visit http://www.growthink.com/businessplan.

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New Projects Require a Crisply Polished Elevator Pitch

By Geoff Ficke

Each week we receive a number of unsolicited business proposals in our marketing consulting business. Some are submitted by mail, some by e-mail and a number are the result of phone contacts. We have developed a methodology of quickly weighing the commercial viability of each. This is important as we strive to manage our time, and potential clients can receive proper initial guidance from us as they pursue their goals and dreams.

The key initial indicator we evaluate when weighing a newly presented Business Plan is the Executive Summary. This is typically the very first section of a Business Plan and provides the reader a focused snapshot of the proposition that is being offered. It is crucial that the Executive Summary be pithy, exciting but believable, and drives the reader's curiosity to delve into the interior of the Business Plan. The Executive Summary's that we typically review do not usually do this. They all too often do not reflect the actual quality of the product, new service or business concept that is being described. This is opportunity lost.

Many of our initial contacts come via telephone. Remember, we almost never have met the caller reaching out by phone to introduce their proposition. This verbal presentation, in order to create and maintain interest, must also contain an Executive Summary. On the telephone, however, this crucial summary takes the form of an Elevator Speech.

What is an Elevator Speech? Simply put, an Elevator Speech is a condensed, on point verbal description of your concept, your background and your goals for the project. It is historically called an Elevator Speech because it should always be assumed that the delivery will occur in a tight space or time frame. The ability to convey the importance of an ideas potential must be able to be presented coherently, concisely, clearly and with professional elan by the presenter.

Much like written Executive Summaries, the Elevator Speeches we hear are almost always delivered in a halting, bumbling, rambling, incoherent manner. Entrepreneurs have often invested considerable time, energy, and often monies in their concept. It is an interesting reality that so many do not take the time to properly craft and perfect the delivery of their Elevator Speech, the all important verbal Executive Summary for their opportunity.

There are many reasons that prospective inventors and entrepreneurs should have a powerful Elevator Speech. Remember, you only get one chance to make a great first impression! Make it count. The telephone is more personal than mail or e-mail. A well delivered Elevator Speech is a positive eye opener for decision makers. The listener will gain a stronger, more defined mental impression of the presenter and the business proposition on offer.

Here is another reason the Elevator Speech is crucial. There is a huge universe of products and business ideas chasing a finite amount of funding, licensing, partnering, strategic alliance and placement opportunities. When the chance arises to present your idea, you must be ready and able to deliver the details and leave "a great first impression". You never know where or when this situation to introduce yourself and your concept to a decision maker will occur.

All successful entrepreneurs are always SELLING. On an elevator, at a ballgame, at a trade show, at a shopping mall or networking at a business function, you never know when you might meet someone who can change the trajectory of your life. Practicing and perfecting a brief, exciting Elevator Speech could be the key to unlocking a great commercial opportunity. Do not waste the possibility.

by: Geoff Ficke

Geoff Ficke has been a serial entrepreneur for almost 50 years. As a small boy, earning his spending money doing odd jobs in the neighborhood, he learned the value of selling himself, offering service and value for money.

After putting himself through the University of Kentucky (B.A. Broadcast Journalism, 1969) and serving in the United States Marine Corp, Mr. Ficke commenced a career in the cosmetic industry. After rising to National Sales Manager for Vidal Sassoon Hair Care at age 28, he then launched a number of ventures, including Rubigo Cosmetics, Parfums Pierre Wulff Paris, Le Bain Couture and Fashion Fragrance.

Geoff Ficke and his consulting firm, Duquesa Marketing, Inc. (http://www.duquesamarketing.com) has assisted businesses large and small, domestic and international, entrepreneurs, inventors and students in new product development, capital formation, licensing, marketing, sales and business plans and successful implementation of his customized strategies. He is a Senior Fellow at the Page Center for Entrepreneurial Studies, Business School, Miami University, Oxford, Ohio.

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