Category Archives: Start-up’s

Writing a Business Plan

Writing a business plan and using business plan templets. I guess the first question is why do you want to write a business plan? To rise investment capital? To get a bank loan? To work through the feasibility of your project? Is it to communicate the purpose of you project to executives and staff or external stakeholders like philanthropists, government or not-for-profit organizations who you want help from?

A business plan is a strategic tool it’s a bit like a road map it should show where you are and where you want to be and how you are going to get there? People have different opinions about written business plan’s and some people will tell you that it’s a waste of time. Knowing why, when, were & how to use a tool makes an enormous difference to the results you get so yes sometimes writing a business plan could be a waste of time. When used correctly writing a business plan should provide clarity of purpose and give the entrepreneur the ability to store information and communicate that purpose / info in a compelling way that achieves results.

A written business plan won’t fool a venture capitalist, but a big nice-looking document will probably fool a bank manager and a lot of other people. There is a big difference between a business plan and a minimum viable product (MVP) real sales are cash in the bank and nothing is better proof of concept (MVP) than a customer who has paid you for your solution to their problem.

I’m a fan of the written business plan I think it is good to write one and then just keep a soft copy you can update & print out when you need to show someone or impress a fool.

There is a lot of business plan templets on the web, a word of advice for newbies don’t pay someone to write you a business plan for like $400-$1,000 it’s a rip off, if you just need a nice-looking document that no-one will read then use a free templet and have a nice cover page.

If you are going to write a business plan learn to do it yourself its your business after all and you will learn lots form the experience. If you need help with writing a business plan seek out a mentor for advice or enrolled in a course like Certificate 4 in small business management.

If you want to hire a consultant to write your business plan be very careful as they should be very expensive not a couple of hundred dollars but tens of thousands of dollars. You would probably be better off learning to write a basic business plan using a template and getting some help from a mentor / advisor.

If you need to raise capital a basic business plan is ok because any serious investor will not be fooled by a nice-looking but meaningless document, a MVP will impress them much better. If you are out to raise investment capital you should focus on being “investment ready” The pitch to investors will be much easier if you do all the hard work first to become investment ready and have a kick ass MVP.

All business plan templets follow a kind of formula they mostly start with an executive summary, an over view of the business, a marketing plan, an operations plan, a financial plan & appendix. It’s important to take which ever templet you chose and modify it to suit your business / project. Every business / project is different and its worth thinking about taking a few different templates and then writing your own plan from scratch once you get the feel for what is usually in a business plan.

Now if you spend three months writing a business plan and then you put it in a filling cabinet and forget about it you have wasted three months of your life which you will not get back. It’s your business plan so use it, act on the things you say you have planned to do and then update you written business plan every three months or so. That way when you get a call from that billionaires personal assistant asking if you can do a meeting next week you can quickly whip out that written business plan and impress any fools.

How to turn your ideas into reality.

Ok so I said I would share the process for turning ideas into reality so hear go’s. This is a very basic description by the way and I will dig into each section a bit latter for those of you who are working on projects.

1) Your Entrepreneurial Mindset.

To quote one of the most amazing people I know of “anyone can do anything they want It’s all in your head” This is the starting point and the single most important thing to get right because if you don’t have your head screwed on strait nothing ells will work properly.

Know thyself, yes that’s right kids I have just given you the hardest thing to do strait off the bat. Fact is most people spend their whole lives never really knowing them self’s that well. The Capitalist system will do anything to keep you from really knowing yourself. That’s why the Capitalist system wants to spay you with deodorant and cover your face up with make-up. When you truly get to know yourself, you’ll be empowered and can create the world you want. Sorry for the rant just had to tell you the truth because the man does not want you to know this.

Let’s talk about the entrepreneurial mind set a bit, so you are probably a bit of an entrepreneur already if you are reading this. When thinking about your idea you want to really ask yourself why you want to do this? Really drill down into why you want to do this because you must know what your motivational driver is? Because if your idea / goal is not in line with what motivates you, you will never achieve your goal. So be really honest with yourself and really do your best to know why you want to make your idea a reality. Please take the time to explore more entrepreneurial mindset / mindset for success stuff it will make all the difference.

2) Vision, Mission, Values.

This is where you start to create your idea in your mind and then “Think It, ink it, act on it” Start by trying to put the idea into words and sum it up in a short statement (google how to write a vision statement). A powerful vision statement should say how you are going to solve your customers problem or save the world. The bigger your vision is and the more people it helps the more powerful it will be and the easer it will be to get people to help you build it. If your vision scares the shit out of you because it seems to big, that’s what you want. There are only two things between you and anything you want, fear & hard work. The best bit is fear is an illusion so go for it.

Ok so you have written a vision statement it does not need to be perfect just throw something down and get started you can change it latter and you probably will. Now a Mission statement is a bit different is say what you must do to achieve your vision. You should be able to measure if you are achieving you mission and if you are it should be taking you closer to your vision.
Next you need to have a think about what you & your project stand for or stand against? Try to write a list of values (Values statement) you and everyone involved with your project will adhere to. They need to be things that help to create the type of culture that will drive your team to achieve your mission.

3) Know your value proposition.

Human beings trade to get something that is of value to them but what is of value to one person is different to another. When you to ask for someone to give you something most of the time they will want something in return. But this is not always the case see the “gift economy” for example.

This exchange of value we call a value exchange relationship, you should always seek to make that relationship a win-win one. Otherwise people will not want to do business with you or help with your project.

Have a think about who your customer is? and what is their most pressing need or problem is? can solve that for them? For example, if you own a café maybe they are hungry and in a rush but still want healthy food. Can you solve that problem for them? This is a value proposition and without a strong and compelling value proposition you will find it very difficult to convince people to buy from you and or help with your project. Consider writing a “value proposition statement”.

4) Testing your Idea.

If you know what motivates you to pursue your idea, you have a clear vision and understand what is in it for other people (value proposition) It is time to get out there and start talking to people about your idea / project / business. At this point some people get scared others will steel their idea, but remember FEAR is one of the two things that will stop you. You should be more concerned that no one will give a shit about your idea and if that is the case then that’s ok just change your idea. (Nothing ventured nothing gained) Talk to everyone you can about it but most importantly your customers (or the people who you want to pay for it). If your project does not involve money you still need to talk to people and get their help, ideas & advice.

Here are some questions that I stole from Colin Jones (please don’t get angry and sue me) They are good questions and they are all about trying work out what you don’t know, that you need to know. Try to work through them.

Questions you forgot to ask.
1. Who do you need to know to succeed? (not start)
2. What do you need to know?
3. What do you have to access to succeed?
4. Dose everyone understands what you are trying to do?
5. Does everyone approve of what you are trying to do?
6. Do you understand how your opportunity space changes?
7. What local factors directly work against your idea?
8. What local factors support your idea?
9. Do you understand how value can be created in your opportunity space?
10. To what extent do others win due to your future actions?
11. Are you organising for the short or long term?
12. Are you reaching out to a select few people of everyone?
13. What sources of energy can you tap into?

5) A Minimum Viable Product (MVP).

This term MVP gets used a lot in the innovation / entrepreneurship seen the other term you will see a lot is lean methodology. A minimum viable product is just that, what is the absolute lest you must do to make a sale and check that your value proposition will work? Do you really solve someone’s problem so well that they will pay you for it?

In the project space were money is not changing hands you can still use the MVP concept you just need to modify it. What is the absolute minimum expression of your idea? so you can test if people will care about it. The lean methodology is just a philosophy that says provide the most value to your customer at the lest cost it’s all about being efficient, you can apply this idea to a project that does not include money.

Colin Jones has a game that I am planning on steeling it teaches the concept of “affordable loss” The idea is that if you can afford to lose then you will have a go at it. A straightforward way to express it is “you should not gamble if you can’t afford to lose”. Now when Toyota, Apple or Samsung lose they lose big so they cannot afford to lose to often that’s why the ideas of “Lean methodology” & “minimum viable product” are so popular because they work.

You can probably start to see how you can “fail forward” so now is the time to talk a little about the second thing standing in your way HARD WORK. If you think you are just going to write an app and next week be Mark Zuckerberg you have another thing coming. Just go speak to anyone you consider successful and if they are honest they will tell you if you want it? you have to put the work in period.

Check out this idea about “10,000 hours” it’s interesting just try to imagine putting that much work in? In the medical research & development space it might take them 10 years of experimentation and failure to get a medicine that works. When it comes to getting a successful MVP don’t expect it to work expect it to fail and then learn and try again and again and don’t stop. Practise makes perfect and that is maybe 10,000 hours’ worth of practise.

Ok you will hear this term “Business Model” it just means were does the money, product, info come from? And go to? in your business / project. Get out the calculator and start playing with the numbers you need to have a really good understanding of how your project / business is going to work and you cannot afford to sell yourself short.

In an environment that is constantly changing its not survival of the fittest but those that can adapt to change the fastest and out evolve the competition that survive & thrive. Unfortunately in the capitalist economic environment being able to change what you are doing often requires cash.

To grow a business, you need to have 20% net profit after paying for everything including yourself otherwise you will not have enough money left over to reinvest in building your business / project. Even Not-For-Profit organisations need to make 20% after all costs to be able to grow. So if you project involves money do your best to make lots of it and help lots more people.

If you cannot make a profit / living from it it’s not a business it’s a hobby and that’s ok, you just need to find a different way to fund yourself and your hobby, sale’s alone wont do it.

If you are out to make a profit and do make mega bucks don’t be a capo pig, you live on this planet to so invest some of it back into whatever social / environmental problems your care about.

6) Building a Crew / your A Team.

Ok so you made a sale or maybe you have had to change your idea a bit (this is called pivoting) it just means you are still pursuing your vision but you have had to change how you are going to get there. It’s a change in your Mission statement but not your Vision statement. You might have had to change your MVP three or four times before people buy from you or people are really stoked on your idea / project and want to support it.

Any which way you now have something called “Proof of concept” or a working prototype or a successful minimum viable product. They get called different things in different fields of endeavour but it just means you can prove your idea works and this is very important if you want to raise capital from professional investors almost no-one in Australia will touch a start-up that does not have sales / proof of concept. An idea is not an investment opportunity so go out and get your proof of concept once you have it the ball can really start rolling.

So now to build you’re A team, think about what skills you need to grow your business / project, can you do it all by yourself? probably not. You need to start giving up control over your project / business to other people this can be scary & challenging. This is where having a very strong Vision, a clear Mission and set of Values to live by will help you to work out who and what type of people you want involved in your project / business. A venture capitalist once said to me “we want everyone sitting on the same bus, facing the same way going to the same destination” and you need this to successfully grow your project / business.

There are a few types of skillsets / personality’s you will need for your adventure. You will need an elf, a wizard, a fighter, a thieve and a healing cleric. Just kidding but you should think about it a bit like that. The “start-up weekend” guy’s put it like this you need a hipster, a hacker and a hustler. Another way to think about it is that you will need a marketing & sales person, a production / technical person, a CEO, a bookkeeper / admin person etc. At the start, you may be doing all these things (wearing many hats). Whatever way you chose to tackle your business / project, adventures that start with three people are more likely to succeed (Hipster, Hacker, Hustler). Because your group / team will go through distinct phases “forming storming norming and performing pdf”. Check it out the pdf it will help!

There is not enough space to discuss business structures hear but I will say this, at the very least have partnership agreements signed or get an accountant to set up a company / co-operative. Get some professional advice around what type of business / not-for-profit structure is right for your project. Because things will go wrong there will be disagreements and probably more than they go right so be prepared for this.

7) So you have started on an adventure.

There you have it the basics of getting started and turning your idea into reality. I have tried to put enough links in the text so you can do more research. Having had several adventures, myself and helped many others on their adventures I can tell you things almost never turn out how you expect and you will have many failures along the way. But if you are really motivated towards your vision just keep going and don’t give up. Remember there are only two things standing in your way fear & hard work, lucky the first one is an illusion for you to overcome. We hope this helps.

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