You have a new “Concept” or “Idea”.  Congratulations!  Now what do you do?

If the acquisition of capital is your primary goal for your business, then let’s take a step back and see what you need to do.

Many entrepreneurs become so excited with their New Concept they mentally start banking their money – but oops, they don’t have any money.  No problem. They’ll shop their great new concept to the highest bidder, get enough to pay-off their debts, hire the necessary personnel to run the new piece of business and still have a healthy operating budget.  Sounds doable, right?   

And Why Not?  It seems you read about these kinds of successes all the time, don’t you!? 

While you should “never say never”, the reality of the odds playing out, as described above, are right up there with winning the national lottery.  The good news is there are ways to better those odds.

1. Specifically, know who you are going to approach to request funding.  Gather all of the contact information and as much background knowledge as possible about the company and/or the contact person you will be approaching.

To keep rejection to a minimum, search out those investors who have an interest in your industry and specifically your niche focus.  Just because an individual or group has money to invest doesn’t mean your particular niche is of interest to them.  e.g. – if their passion is to build a station on the moon, don’t ask them to fund your fishing rod conversion system.  You will only suffer an unnecessary rejection.  It isn’t personal; the Investor just isn’t interested in your concept no matter how well you have developed your concept and financial information.

Generally the funding options are:

• Banks
• Third Party Investors (includes Angel Investors and industry Investors)
• Venture Capitalists  (be very clear on what they want in return from you)
• Private Lenders  (usually family or friends)

2. Some of the Basics you will need to have ready:

If your “concept” or “idea” is to be taken seriously by any of these investors it must be verified with a well developed business model/plan.  This plan includes how much capital you are going to need and specifically how you are going to use it.  

When you are able to catch an Investor’s interest in your business proposition, the first thing they will do is to review your supporting financials in order to understand if this business proposition supports a sustainable and scalable investment opportunity (on-going profitable growth curve).  If your numbers pass their scrutiny, they will then – and only then – want to:

• better understand the product offering,
• investigate the potential investment opportunity more fully, and
• review your management team. i.e. -do you and your key personnel have the ability and expertise to make it happen?

Your well developed business model/plan will be a major key in the investor’s decision as to whether your concept is worth pursuing.

If you have shown the Investor realistic financials with verifiable backup information, they will then want to review a well developed Business Model/Business Plan.   If they are going to invest their money into your concept, they want an in-depth understanding of the business.

Remember, their business is funding companies with the expectation of receiving a profitable return as soon as possible. They aren’t interested in dreams and they don’t like surprises.  

Great things can happen if you put your concentrated effort, energy and diligence into the development of your business plan.  Pick the Investor with the most empathy and appreciation of your concept, and present realistic financials knowledgeably. 

Build the odds in your favor.

Compliments of Lew West Business Consultants
www.lewwest.com   Blog – www.MyNext30.com

I am often amused when someone claims they don’t need a BP (Business Plan) because they “fly by the seat of their pants”, or “a BP is a waste of time”; then smugly point out they have never had a BP and they are so busy they can’t keep up.  To me, that’s a sign they are in the middle of a wild fire instead of a controlled burn. One day they are going to burn out.

To have a successful business it is necessary to keep track of income; cost of goods; general expenses; payroll; commissions, principal’s draw – in other words;

• finances;
• how a larger segment of the marketplace can be gained and maintained;
• employee management;
• distribution – to name a few. 

Whether they are keeping this information in their head, or delegated to trusted employees, they are working a rough version of a BP.  Unfortunately without a clear vision of what their company will look like at maturity, they will never get there.  The entrepreneur will never know when to step back or how to set up the company to flourish on its own.  Instead, the entrepreneur is establishing a guaranteed, forever Job.

Every active company has some kind of a BP, even if they don’t have it in an organized format. It is also a fact that without a tangible interactive plan they never realize the full potential of their business. There will always be some aspect of the business being neglected because the owner becomes so engrossed in just one or two areas that the overall health of the company is forgotten.

The same holds true for someone with a great business idea.  Even though owner can’t imagine how it could possibly fail, now is the time to check that concept with real numbers from the marketplace.  Even if they are convinced it will be profitable, until the marketplace is surveyed and the numbers are run, they are only projecting hope, not reality.    

A great deal of money can be saved by developing an informational BP that lays out an outline of the business, including costs and income.  Caution should be taken here.  Often an entrepreneur is so eager for it to work, there is a tendency to skew the numbers.   Now is the time that it is imperative to be objective and honest.  Make the business show You how it can be profitable.  If you can’t see a profit on paper now, how do you expect it to be profitable in the future? Better to spend a little money now in finding if the company can be profitable than for you to invest your life’s savings only to lose it all – including the capital seed to start a different business.

Entrepreneurs are not gamblers; true entrepreneurs only take calculated risks.

Compliments of Lew West Business Consultants
www.lewwest.com   Blog – www.MyNext30.com

In case you hadn’t noticed, many articles, experts, textbooks, etc. tell you that you are “confused” if you don’t subscribe to their particular definition of business terms.  I too have my set of definitions, and because this is my Blog you will find them listed below.

Please understand that my definitions, along with everybody else’s, are only words.  To each of us, in our attempt to convey those illusive, intangible concepts of business success, believe our words best describe them. 

The important thing, however, is that You are able to grasp the basic key concepts necessary to drive your business to its greatest potential.   

My favorite quote is, “If you don’t know where you are going, then you are probably already there.”  Becoming as clear as possible as to “Where You are Going” is often the difference between success and failure. 

I’m for success – by any definition.

 #1. Strategy or Action augmentation:

Here you utilize your “big picture” goal and begin enhancing that picture with the information accumulated in #1 & #5. From this collection of information, you can initially set the course

• for your business,
• its marketing direction and
• define the milestones to “make it happen”! 

 Bonus: Ultimately you want your strategies implemented in a way that your company is making money without you even being there – the quicker the better.

 #2. Financial Tracking: 

All income needs to be tracked daily – e.g. cash-flow and expenditures, sales, distribution, payroll and benefits, assets, inventory – in other words anything to do with what is happening to your company’s money.

 Bonus: Whenever funding is needed, you can create the requested documentation from your operation and financial summaries. 

 #3. A Marketing Plan is only one piece of your Grand Plan – albeit a very important and visible piece.  A Marketing Plan promotes your product to a specific segment of the marketplace.  By generating excitement and recognition for your product or service, Marketing’s role is to drive customers in your door. Once in the door, you close the sale, deliver their order and collect your money. 

 #4. Sales:

While Marketing creates the customer excitement and desire for the product or service, Sales does the actual close of the sale and collects the payment.  Although Marketing and Sales work closely together, their purpose and execution is very different.  Marketing creates a positive marketplace enabling Sales to utilize Marketing’s materials and created “need” to close the sale with individual clients.

 Bonus: Marketing generates interested prospects, Sales convert prospects into clients.

 Customer Service and Customer Retention are an important part of Marketing and Sales.  Questions and problems must be handled promptly and cheerfully along with scheduled on-going customer follow-up.

 #5. Operations:

Orders need to be filled quickly and efficiently so customers will be happy to reorder again, and become long-term clients. Quality of service while keeping costs in line is a major responsibility of Operations.  Depending upon the company structure,  employees are usually accountable to Operations.

 Bonus: Operations implements systems/procedures building toward company maturity while maintaining a unified and coordinated staff to achieve the company’s goals and purpose. 

 Congratulations! You now have a Working Business Plan!  All of the Steps listed #1-#5, are only segments of your total “Business Plan”.  Together the segments lay out a coordinated, tangible picture of your business, adjustable to the changing needs of the marketplace.

 Bonus: During this process, you have run various scenarios illustrating what will work and what won’t, and what would have only cost you time and m

By taking these preliminary planning steps,  

Your business will be set-up for long-term success.

Compliments of Lew West Business Consultants
www.lewwest.com   Blog – www.MyNext30.com

During our original discussion of “Identify your Target Market” we narrowed it to 4 main points:

1.  Become a specialist!  One of the first things you need to do is refine your product or service so you are NOT trying to be ‘all things to all people.’

2.  Next, you need to understand that Individuals and Businesses purchase products or services for different reasons. 

• Individuals purchase products or services for three basic reasons:
  • To satisfy basic needs.
  • To solve problems.
  • To make themselves feel good
• Businesses buy products or services for three additional reasons:
• • To increase revenue
  • To maintain the status quo
  • To decrease expenses.

3.  Once you have determined how your product or service fulfills the specific need of those in your target market, you can then laser-focus your marketing strategy.

4.  The next step in creating an effective marketing strategy zeroing in on your target market by way of Market Segmentation.

After reviewing the purchase motivations of the individual customer and the purchase motivation of businesses listed above you should be starting to visualize who you think your ‘ideal’ customer should be … or at least who you want it to be. Depending upon the nature of your business, (product or service), begin writing a description of this distinct customer.  Once that customer is clearly identified, you will be able to automatically screen everyone as to whether or not they are a potential customer.  This ability saves untold time and expense.

Based on the numbers you already have in your research, you even know approximately how many of those potential customers are in your area! Even subtracting the number of those you know are already loyal to some of the competitors, it is relatively simple to see who are available to be converted, or who have not yet purchased your product or service. 

Many times, of course, prospective customers don’t know about your company, or can’t tell the difference between your company and others. The good news is, once you know who fits into your defined criteria, you are able to ‘target’ that specific group.  Even if they are currently with the competition, you can help them understand the desirability of your product, or service, and its unique place in the marketplace.

As you become better established, you may decide that you would like to extend your target market outside of your local area. Going back to the basic reasons why people purchase goods or services, you will find new ways to channel your efforts toward your designated market.  Implementing the updated formula will make it possible for you to successfully continue capturing larger market shares.

On the other hand, if you ‘specialized’ your product or service but, following your local target market research, you discover that your actual market share is much less than first anticipated, what do you do? 

First of all, if the local target market customers will consistently spend enough on your product or service annually to keep you in the black, then you have nothing to fear.  While closely following your strategy plan, you will be able to increase your profitability as you are expanding your range of exposure.

BUT if that local market niche is only going to spend a minimum amount sporadically on your product or service – then you need to go ‘back to the drawing board’. 

Fortunately, as a result of your initial research and planning, you were able to discover this “short-fall” before investing too much time and money.  It is always disappointing to find it wasn’t the profitable niche you had anticipated, but the good news is, your research and fundamental planning will supply you with all the information needed to restructure your plan. 

When all of the pieces and parts are arranged to accommodate the needs of the customer, the result can be a thriving company.

Compliments of Lew West Business Consultants
www.lewwest.com   Blog – www.MyNext30.com

 #1. The basic Business Plan lays out the factual, nuts and bolts foundation of your business.  From that full blue print of your business, you may confidently: 

• Build your business
• Implement on-going strategies

 #2. Whenever funding is needed, you are able create the needed documentation from your regularly updated Business Plan to show the summary of operations and the financial information requested by your funding source. 

Being able to reference your working master Business Plan, you will make a confident and knowledgeable presentation.

Strategy Plan:

 A Strategy Plan utilizes the Business Plan information with an emphasis on HOW each area of information can be leveraged into a single-focused Strategic Plan designed to achieve the company’s optimum success. 

You can design strategies that can make your company make money without you even being there.

 Your Business Plan will have already defined who those customers should be that Marketing is sending in your door. Your Strategy Plan will have put into place what procedures you and your staff will do from the time the customer comes in the door (or places their order by phone or online) until the customer has received their order and you have banked their payment.

 (Note of Wisdom: Hope is not a Strategy Plan)

 Marketing Plan and Sales Plan:

 A Marketing Plan is only one piece of your Business Plan and Strategy Plan – albeit a very important piece.  A Marketing Plan promotes your product to the correct segment of the Marketplace by generating excitement and recognition of your product/service. A Marketing Plan drives customers in your door so you can close the sale, deliver their order and collect your money. 

 While Marketing defines the strategy to attract the customer, Sales does the one-on-one close of the sale, i.e. implements Marketing’s strategies.  Although they work together, their purpose and execution is completely different.

 Taking the preliminary steps to embrace these Powerful Plans,

 Your business will be set-up for long-term success.

Compliments of Lew West Business Consultants 

www.lewwest.com & www.MyNext30.com - Blog

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1. Don’t be discouraged to think you are alone in having spent so many hours thinking of – and then discarding dozens of ideas. Your future success hinges on your being passionate about your new business.

2. Carry a pad of paper with you so when you think or see something that catches your attention, you can write it down and make some notes to remind yourself later why that appealed to you and looked so interesting at the time. Your memory can often forget what triggered your imagination as to how you could develop that concept.

3. Choose something you are familiar with and/or that you have actually done.

4. Choose something you enjoy. There is a saying that “If you find a business or an occupation you love, you will never work a day in your life.” So it is with your business choice. If you aren’t passionate about it you will begin to resent the hours and sacrifices it takes to get it up and running.

5. Most important: It needs to be a profitable enough business to support you and your family through the years to come – whether you continue to run it, set it up to run itself, or sell it.

If you are going to put in all that time effort and energy, be sure you thoroughly do your research first. Assemble a comprehensive business plan to help you define all of the scenarios and show you if and how it can be profitable.
Ok. This is all great and wonderful, but you still don’t have the idea to research and develop.

How to pick a Business Idea

1. Start a list going back as far as childhood. Think of:

• After school and summer jobs.
• Remember people you enjoyed being around and what they did for a living
• Have you always had a dream to do a particular something?
• What have you always thought would be great to do, but dismissed it as being out of your reach or impractical for you.
• Find books of suggestions in the library
• Gather a group of friends to brainstorm more ideas

2. Set up a large white board or large paper pad and start writing down as many ideas as you can. Don’t worry if they make sense or not. A good portion of them won’t, but it helps free your imagination.

3. Once you have 100 or more, you can start picking some of the more general suggestions from your list and begin developing them.

For example: You may have written down yard work, babysitting, Pizza delivery, grocery stocker etc. Let’s look at yard work. What are some of the different directions that activity can be developed? (It is always better if you can have several people join you to brainstorm possible enterprises for an hour, or two maximum)

Some possibilities expanding from “yard work”:

Landscaper, artist to draw the layouts, nursery, expert on local plants, a source of decorative rock, fountains, yard sculptures, area consultant for zoning laws, horticulturalist, become a developer of local parks, playgrounds, dog parks, a rental supplier of lawn equipment, lawn furniture – custom build items to help the handicapped, seasonal party supplier & entertainment, develop a product or service to promote a green environment – in the schools, as an author, demonstrator, consultant, locally, national cause, organize groups, give seminars & workshops, assume management of a non-profit and build your department to become financially sound – or help the non-profit company itself to have adequate cash flow to be able to better pay you and quality people to help them ……….

And from that list expand ideas about dogs … rentals ….. a need in the neighborhood … advisor … tutor …

It took me less than 3 minutes to develop the above list. Think what you can do in an hour – or two.

4. Let you mind go completely free. Sure, there are going to be some real duds, but those are the ones that give you – and the group if you have one – a big laugh and triggers more zany ideas. Right in the middle of all of these spontaneous thoughts and ideas will be a nugget – or 2 – 3 nuggets of gold. Tuck them into your pocket and let your mind think about them. No pressure, just let it soak for a day or two until your mind starts generating feelings and solutions around a nugget.

Usually the one you picked as your favorite will begin taking over your thoughts, but sometimes something you discarded will come floating back to the top. Take time to consider that one too. There may be something under the surface of that seemingly zany nugget that was originally overlooked. By fleshing out the idea, you might find that very important market niche, or maybe you will find that unique product application or service you have been looking for.

Don’t give up.  Keep looking at how you can evolve a seemingly nondescript chunk of cole into a diamond. Your diamond.

A year ago, many of us felt we had the luxury of pondering if we wanted to continue working or if we wanted to retire. Our biggest concern was that we were being “smart about it.”

Today we are told, “Well you knew the recession beginning back in 2007!”

“NO. I didn’t know,” and to me that statement is saying, “Gee, if you had just starting planning back then, you wouldn’t be in this predicament now.” They are right. If I had started to plan back in 2007 I would be in a considerably better place today – if I had known.

I didn’t know in 2007 that the economy was starting to throw a few rocks over the cliff before it jumped off feet first. Because I didn’t know I took just one more big investment risk. Unfortunately this time my risk was DOA. Coupled with the stock market plunge I was knocked off of my rock of security and dumped squarely back into the “produce or perish” cycle – a position much less comfortable when it is out of necessity rather than choice.

I did what everyone does; review what I was successful doing in the past. Some are able to pick up from where they left off. Others are not so fortunate.

I was what they call a serial entrepreneur, having started several companies over the years in various industries.  I am now testing new ventures while assisting others with theirs.

Considering Starting Your Own Business

If you have been considering starting your own business but can’t find that perfect idea, maybe the following will help you.

1. Don’t be discouraged to think you are alone in having spent so many hours thinking of – and then discarding dozens of ideas. Your future success hinges on your being passionate about your new business.

2. Carry a pad of paper with you so when you think or see something that catches your attention, you can write it down and make some notes to remind yourself later why that appealed to you and looked so interesting at the time. Your memory can often forget what triggered your imagination as to how you could develop that concept.

3. Choose something you are familiar with and/or that you have actually done.

4. Choose something you enjoy. There is a saying that “If you find a business or an occupation you love, you will never work a day in your life.” So it is with your business choice. If you aren’t passionate about it you will begin to resent the hours and sacrifices it takes to get it up and running.

5. Most important: It needs to be a profitable enough business to support you and your family through the years to come – whether you continue to run it, set it up so it will run itself, or sell it.

If you are going to put in all that time effort and energy, be sure you thoroughly do your research first. Assemble a comprehensive business plan to help you define all of the possible scenarios and determine if and how it can be profitable.

#1. The basic BP lays out the factual, nuts and bolts foundation of your business. From that full blue print of your business, you may confidently:
• Build your business
• Implement on-going strategies

#2. Whenever funding is needed, you are able create the needed documentation …… 

 from your regularly updated Business Plan to show the summary of operations and the financial information requested by your funding source.
Being able to reference your working master plan, you will make a confident and knowledgeable presentation.

(Note of Wisdom: You can’t build a 110 floor skyscraper on a tool shed foundation)

Strategy Plan:

A Strategy Plan utilizes the Business Plan information with an emphasis on HOW each area of information can be leveraged into a single-focused Strategic Plan designed to achieve the company’s optimum success.
You can design strategies that can make your company make money without you even being there.

Your Business Plan will have already defined who those customers should be that Marketing is sending in your door. Your Strategy Plan will have put into place what procedures you and your staff will do from the time the customer comes in the door (or places their order by phone or online) until the customer has received their order and you have banked their payment.

(Note of Wisdom: Hope is not a Strategy Plan)

Marketing Plan:

A Marketing Plan is only one piece of your Business Plan and Strategy Plan – albeit a very important piece. A Marketing Plan promotes your product to the correct segment of the Marketplace by generating excitement and recognition of your product/service. A Marketing Plan drives customers in your door so you can close the sale, deliver their order and collect your money.

Taking the preliminary steps to embrace these Powerful Plans,
Your business will be set-up for long-term success.

1.  Clearly define your business idea and be able to state it within 30 seconds.

 2.  Know your mission. Examine your motives. Make sure that you have a passion for owning a business and for this particular business.

 3.  Be willing to commit to the hours, discipline, continuous learning and the frustrations of owning your own business.

 4.  Do a competitive analysis in your market, including products, prices, promotions, advertising, distribution, quality, and service.  Be aware of the outside influences that affect your business.

 5.  Seek help from other small businesses, vendors, professionals, employees, trade associations and trade shows.  Ask questions.

 6.  Keep on track and prevent expensive, time-wasting detours

 7.  Organize and prioritize all tasks, even the little mundane ones.  If it takes 2 minutes, it must be listed and ultimately assigned.

 8.  Use good judgment as you allocate your resources

Questions? 

Call Lew West Business Consultants 303-459-4971

lewwest@lewwest.com