Starting a Business

Do you have what it takes to start a business?

Here are some personal characteristics of the most successful entrepreneurs:

• Risk taker
• Self-confident
• Persistent
• Likes to work in an unstructured environment and thrives on uncertainty
• Independent; likes to be their own boss
• Goal-oriented and wants to succeed
• High energy level
• Likes to lead and take control
• Big-picture thinker
• Competitive
• Realistic and objective, although impatient
• A good listener and willing to be coached
• Thrives on achievement vs. obtaining material wealth
• Physically resilient and in good health
• Emotionally stable

Here are some of the behaviors of successful entrepreneurs:

• A passion and a vision for what they are trying to create
• Knows that are things he or she just doesn’t know
• Willing to work long hours to achieve their goals (often at the expense of family time)
• Identifies relationships quickly in complex situations
• Identifies and works on problems as soon as they arise
• Handles pressure effectively
• Able to work through adversity and sees setbacks as challenges vs. roadblocks
• Seeks help and advice in areas outside of their expertise and acts on it Seeks partners to become stronger

If these descriptions sound like you, then you probably have what it takes to start your own business!

Developing a business plan

The Small Business Administration defines it well: A business plan defines your business, identifies your goals and serves as your firm’s resume.

Why construct a business plan?

• It forces you to set goals, and then determine the path that will help you achieve them most effectively.
• It helps you allocate resources properly, handle unforeseen complications and make the right decisions.
• It removes emotions and forces you to look at the business objectively and critically.
• It will serve as an invaluable tool to attract outside investment to your company.

Business plan components

There are several guides online or in bookstores that can help you write a business plan. The key is to communicate this information in the clearest and most concise way possible.

The best way to create a plan is from the ground up, including specific numbers of customers, systems, prices and quantities, which requires conversations with a multitude of customers. This is a crucial first step that is often hurried or overlooked. Too often the various headings and subsections of the plan are simply filled out with the writer’s assumptions, lacking substance and the research needed to back them up.

The most important information for potential investors is:

• The experience of the management team
• How your solution will solve some kind of pain being experienced in the market
• The size and growth of the market opportunity

The Executive Summary is the most concise way to get the information across. The Executive Summary and the Financials are the most important sections because a potential investor will decide after reading these few pages whether to continue reading or throw the plan away. It must grab their attention, and clearly communicate:

• The problem being experienced in the market that your business will solve
• The market opportunity (How big? How fast is it growing?)
• The primary customer and why they will choose your offering over others
• Why your product or service is unique and how it is better than the competition
• How the product is protected (patents, trademarks, copyrights, etc.)
• How you plan to reach and distribute to your customers
• How you will make money and how fast you will be profitable
• The qualifications and experience of your management team

A good way to create the information needed for this summary is to build executable strategic plans for each that include timelines and milestones. It is important to focus on the initial 12-18 months of your business and how you will logistically get your company or technology off the ground and into the market.

Resource links

Here are a few links to reputable websites:

Small Business Administration http://www.sba.gov/smallbusinessplanner/index.html

Entrepreneur.com http://www.entrepreneur.com/businessplan/index.html

Creating Funadable Business Plans http://www.mootcorp.org/utopia-mootcorp/utopia-moot/index.html

Understanding your value proposition

What is a value proposition?

It is a clear statement of the results (the value, or the benefits) your customers can expect as a result of using your product or service.

How do you find out what your value proposition is?

Ask your potential customers. What is important to them? What problems do they have that you can solve?

How do you communicate it?

Most people confuse “features” with “benefits”. So what if a computer is equipped with the fastest chip available on the market (the feature)? What customers care about is that they can save time by getting their data almost instantly (the benefit).

A good value proposition provides benefits to your customers such as:

• Increased revenues
• Decreased costs/improved profitability
• Increased customer satisfaction and/or retention
• Faster time to market
• Productivity improvements
• Reduced cycle time
• Increased employee retention

It takes a lot of practice to distinguish between “features” vs. “benefits”. When you come up with what you think is the value proposition, keep asking yourself: “So what?” It will help you get down to the root of the value. For a simple example, let’s say your initial value proposition is:

“It is the brightest neon light on the market.”

So What? It will show up better.
So What? It will attract more attention to your place of business.
So What? More people will come to your place of business.
So What? Your sales will increase.

The value proposition becomes: “This neon light will attract more people to your business, which will increase your sales.”

If possible, it’s best to support your value proposition with a quantifiable impact. For example, instead of simply stating that the neon light will increase sales, it is better to say that “studies of the new light show that daily sales increased by 20%.”