Never Get a ”Real„ Job (9 page)
Read Never Get a ”Real„ Job Online
Authors: Scott Gerber
Opportunities
. Determine opportunities to help you assess outside factors that will benefit your business’s bottom line. Is there unclaimed market share up for grabs within your locale or region? Is your business part of a growing, evergreen market sector? Is there a lot of unfulfilled consumer demand for your product or service with minimal or inadequate suppliers? Can your product or service be distributed through new national and international channels?
Threats
. Forecast threats to alert you to external circumstances that can cripple the company and knock the wind out of your sails. Is your market too crowded with well-entrenched, well-funded competitors? Can consumer demand turn cold on a dime? Is there a possibility for government intervention or increased taxation on your industry? Is your market susceptible to an invasion by an overabundance of new competitors?
Analyze each element of your idea thoroughly and honestly. Do the strengths and opportunities outweigh its weaknesses and threats? Can certain drawbacks be converted into advantages? Be sure not to put a positive spin on anything that is truly a red flag. Sugarcoating or overlooking any weakness or threat will come back to bite you in the ass tenfold.
Now it’s time to determine if your idea can do CPR: Copy, Paste, and Repeat. Performing a CPR analysis of your idea will help you to figure out if your idea is scalable, expandable, and replicable.
Copy
. Scalability and the ease of scalability are vital components to your business’s long-term profitability and growth. Companies that can be stabilized and streamlined can be transformed into turnkey operations that are fully prepared for exponential growth. Will your overall costs drop as production and automation become more efficient? Will your business be capable of scaling up and down with ease based on supply and demand? Do you foresee a moment in your business’s evolution where you will be able to create an ironclad formula for success—such as
X
Hard Costs +
Y
Marketing =
Z
Profit and replicate its tried-and-true results?
Paste
. Businesses with strong expansion capabilities can capture more market share and seamlessly move into new markets without altering their existing model. Can your business model be applied to scores of new vertical markets? Is it able to quickly capitalize on new trends without significant modifications? In short—can you paste your model into any market or situation and make it profitable?
Repeat
. Companies that can recreate optimal conditions and replicate previous successes are prime candidates for large-scale or exponential growth. Can new offshoots and subsidiaries be plug-and-play? Would a new business unit have the opportunity to reconstruct the successes enjoyed by the original? Will your new units be able to prosper if you remove yourself from the mix? Will it matter where your business is located in order to attract consumers and gain market share?
If your idea can stay alive after getting shot to hell by your SWOT team and survive surgery with CPR, then the chances that you have a real business with true potential are all the more likely.
5
Business Plans Suck
What was the only thing worse than the
company that shalt not be named
itself
?
That would be the process of writing its business plan.
As a hungry new entrepreneur who didn’t know any better, I was worried about my business plan being done “exactly right” and “by the book.” I now despise such phrases and consider them telltale signs of naïve and inexperienced entrepreneurs.
So many people and their mothers told my partners and me that we needed a “traditional business plan” to be successful. So we set out to do our business plan homework; reading lengthy books, studying sample plans, and filling out tedious worksheets and templates. We completed the first draft of our plan several weeks after we began: A 10-page document that outlined our media services and mission statement and summarized how we planned to sell
X
service to
Y
customer and make our hypothetical
Z
profit.
I wish it had ended there. Unfortunately, the conciseness of that first business plan didn’t last long. Slowly but surely, we let the plan become a full-blown business in and of itself.
The nonsensical financial forecasts, complicated statistics, and intricate details about mundane marketing tactics were only the tip of the iceberg. Impromptu brainstorm sessions somehow morphed into five-page additions. Hours upon hours were wasted rewriting the body to make it “sound” better. Our sections went from short and simple to exhausting and overly complex. At the recommendation of every so-called business plan expert, we’d change the entire plan’s formatting and structure.
We kept right on writing, foolishly believing that a more detailed document also added substance to our business model, and would force us to conceive of better sales and marketing strategies—and, as a result, offer us a greater likelihood of success. We also thought that a traditional business plan would ensure that we’d get the funding we needed.
Sadly, that’s not what happened.
Ninety-four pages, 23 sections, and 19 weeks later, our traditional business plan for our simple little start-up had become a convoluted, unrecognizable mess. The sheer thickness of the document resembled a telephone book. But these weren’t the only things wrong with this overpriced paperweight.
eventually
do, 20 percent focused on our industry and partner bios, and only 10 percent focused on what we could
currently
do.
every single reader’s
comments—without regard as to whether they were qualified to offer such advice.
Suffice it to say, this archaic, inane, and time-consuming process did nothing more than cripple our productivity, divert our attention from our start-up, and bury us in minutia and busy work. Outside of the partners, our families, and paid advisors, only five other people ever read the final document—none of whom became clients or investors.
So nothing gets my blood boiling more nowadays than listening to dinosaurs who are 50 years my elder rant about the importance of a traditionally structured business plan. In a day and age where banks refuse to lend to start-ups and the Internet can render the printed word obsolete before it hits the printer, it boggles my mind that any sane individuals still tout this old-fashioned, rigid process as relevant or even useful. Traditional cookie-cutter business plans—as we know them today—are impractical exercises for start-ups. They do nothing but fuel procrastination and scare aspiring entrepreneurs into purchasing overpriced textbooks and software. Sure, it’s indisputably true that business planning is essential for any start-up; however, the tools and materials you produce need not be remnant of the business world circa 1985.
It’s time to strike a match and host a business plan book-burning party!
Business planning is not a revenue-generating activity. Rather, the actual money-making exists in the plan’s execution. Therefore, it is imperative that business planning generates the action plan you need as quickly as possible—so you can start selling immediately. Unlike creating a passive, static traditional business plan that might as well get shoved in a dresser drawer, the tools you will produce will provide you with living, breathing, and fluid action plans that you can use daily. This methodology will keep you thinking on your feet and help you to plan your business strategy as you move your start-up forward.
TOSS THE OLD-SCHOOL BUSINESS PLAN
The first step to overcoming your business plan dependency is realizing that traditional business plans are not synonymous with success. Similarly to how your mentors failed you by selling you the whole “work hard, go to college, get a good job and a good life” dream, a parallel group is trying to convince you that writing your untested, unsubstantiated idea in a specific format will make your company a viable business and/or eligible for investment money.
You must rid yourself of the nonsense you’ve been spoon-fed by pundits, professors, and business plan “experts.” Instead, focus your efforts on building a solid business, rather than writing the perfect plan.
Avoid business plan books and software like the plague
. Publishers, software developers, and corporations generate millions of dollars peddling business-planning books, products, and programs to aspiring and amateur entrepreneurs. They also reinforce their business plan manifesto at every opportunity, because they need to suck us in and keep us addicted.
Let me save you a trip to the garbage can: Don’t bother with any of these time and money wasters. What I’m about to tell you will be more practical to your start-up than any 250-page textbook: The only things you need to develop effective strategies are your brain, intuition, and common sense. Not only will those other remedial planning materials burn a hole in your wallet, they will overwhelm you with unnecessary worksheets. If you really have an urge to fill in some blanks, go buy a MadLibs.
Never use traditional business plans for samples
. The only thing more useless than reading a business plan book is reading someone else’s business plan. What do you expect to learn from someone else’s plan? Formatting tips? The proper way to structure a table of contents? What other people wrote about
their
businesses? I assure you that your dog-walking company will gain nothing from looking at plans for Mary Jo’s Cleaners or Sam’s Car Wash. More often than not, free plans are nothing more than sales tools disguised by business plan product companies to look like online resources. Most of the time, their only goals are to lure you into making a purchase.
The only time you should bother reading someone else’s traditional business plan is if it outlines a business model similar to yours, and you can directly benefit from its
content
. Otherwise, don’t concern yourself with how other people wrote their plans. All this exercise will do is sucker you into plagiarism—and trick you into writing a useless document.
Only the
right
people should ever read your work
. Unless your parents, friends, teachers, or colleagues are partners in your venture or have the ability to offer valuable and relevant insight—that’s based on real-world experiences—then don’t bother asking them for opinions on your business-planning efforts.
It’s not their business, after all: It’s yours!
Validation, grammar corrections, and general feedback are not good enough reasons to bring someone inside your inner planning circle. Only let individuals who can truly add value assist you during your business-planning process. Keep your judgment unclouded and don’t just give anyone and everyone the right to become a cook in your kitchen. Make sure that your planning mentors are qualified before inviting their interpretation. If you can’t think of any direct questions for an individual then don’t even bother to value or entertain that person’s opinions.
Don’t try to impress imaginary bankers, angel investors, and venture capitalists
. Wake up: Who do you think will be reading your start-up’s business plan? Banks won’t. Investors won’t. No one will believe that your business is more than just words printed on a page until the moment you demonstrate and prove its viability with
real
revenues and profits. To them, it’s not about what you say you
will
do; it’s about saying what you
did
, and the lucrative results of those efforts.
The biggest mistake you can make is planning a strategy with the wrong person’s needs in mind. Never include anything in your planning tools simply because it sounds or looks good or contains information you think other people need to hear. I assure you that they won’t be listening or caring about you or your business. Stop concerning yourself with them and worry about yourself, your product or service, and your target market. Your plan must be for you and
only
you. Simply produce a strategy based on what’s doable, practical, and makes good sense for your company—one that will help you to turn your words into profitable realities.
Nothing is ever written in stone
. The real world isn’t simple, static, or stationary. This remains true whether your business goes bust or knocks one out of the park. Both a business and its environment can change on a dime. Don’t be afraid to follow your gut instincts. Savvy entrepreneurs adapt as the environment changes. They don’t rely on old information—old meaning anything older than the absolute present. Modifying your course is not always a bad idea; in fact, it’s usually necessary to do so. Never let a plan hold you back or be the “final say” in your business’s direction. You dictate the business, and the business dictates the plan—not the other way around.
This is no time to be an English teacher
. Don’t get caught up with remedial activities like spelling or grammar. Should your company go on to generate millions of dollars, investors won’t turn you down because your business plan resembles a fifth grader’s homework assignment with fragments and run-on sentences. Besides, you’ll be paying someone else to write your plan by then, because you’ll be too busy growing your business.
Use real-people language
. All of the tools you produce must be quick reads and references. Write plainly and matter-of-factly. Avoid tech talk, business jargon, buzzwords, sales speak, and verbose, thesaurus-ridden prose. The only thing smart about “smart talk” is avoiding it entirely.
Save a tree; skip the fluff
. Business planning isn’t meant to be a creative-writing exercise. If something isn’t important, don’t include it. Get to the meat and potatoes. Each and every word needs to be useful, focused, and purposeful. Stay on point—you’ll be better for it.
Skip the cutesy crap
. Do you feel the need to surround yourself with colorful graphs and pretty charts? Then steal a kindergartener’s artwork and put it on your refrigerator. No one’s going to reward you with a gold star or extra credit for creativity. Don’t waste time designing business-planning documents. They need to make money, not win a pageant.
Avoid factoids and data dumps
. Being a successful entrepreneur is not about diagrams, stats, and charts. It’s about getting off your ass, securing a meeting, and selling something to someone else to generate income. This isn’t the time for writing a term paper—so don’t concern yourself with statistics that claim your business is part of a $10 billion industry. No one else cares—and neither should you. After all, what percentage of that figure is in your bank account? Not much, I wager. Let your amateur competitors waste time writing dissertations backed to the hilt with mounds of facts and data. You’ve got market share to capture.
Don’t play with Monopoly money
. I’m truly glad that you plan to reinvest 30 percent of your profits into your marketing budget once you generate $10,000 in revenue. However, how do you intend to create that amount of income in the first place? Your business plan cannot write checks. If you have $0—well, then, you need to plan for $0. Only plan with the cash and resources you currently have in hand. Keep your life burn rate in mind every step of the way.