In Business Planning, Competition is Good
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When developing the competition section of your business plan, companies must define competition correctly, select the appropriate competitors to analyze, and explain its competitive advantages.
To start, companies must align their definition of competition with investors. Investors define competition as any service or product that a customer can use to fulfill the same need(s) as the company fulfills. This includes firms that offer similar products, substitute products and other customer options (such as performing the service or building the product themselves). Under this broad definition, any business plan that claims there are no competitors greatly undermines the credibility of the management team.
In identifying competitors, companies often find themselves in a difficult position. On one hand, they want to show that they are unique (even under the investors’ broad definition) and list no or few competitors. However, this has a negative connotation. If no or few companies are in a market space, it implies that there may not be a large enough customers need to support the company’s products and/or services.
Business plans must detail direct and, when applicable, indirect competitors. Direct competitors are those that serve the same target market with similar products and services. Indirect competitors are those that serve the same target market with different products and services, or a different target market with similar products and services.
After identifying competitors, the business plan must describe them. In doing so, the plan must also objectively analyze each competitor’s strengths and weaknesses and the key drivers of competitive differentiation in the marketplace.
Perhaps most importantly, the competition section must describe the company’s competitive advantages over the other firms, and ideally how the company’s business model creates barriers to entry. Barriers to entry are reasons why customers will not leave once acquired.
In summary, too many business plans want to show how unique their venture is and, as such, list no or few competitors. However, this often has a negative connotation. If no or few companies are in a market space, it implies that there may not be a large enough customers need to support the venture’s products and/or services. In fact, when positioned properly, including successful and/or public companies in a competitive space can be a positive sign since it implies that the market size is big. It also gives investors the assurance that if management executes well, the venture has substantial profit and liquidity potential.
For More Free Resources visit www.oversightsystem.com
Chris @ February 16, 2010
Documenting the Exit Strategy in Your Business Plan
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All investors greatly desire and are motivated by a clear picture of a companyâs exit strategy, or the timing and method through which they can âcash inâ on their investment. This picture best comes into focus when the key valuation and liquidity drivers of the company are clearly delineated. An excellent method to accomplish this is through descriptions of comparable firms that have had successful liquidity events, either through acquisition, merger, of initial public offerings (IPOs).
It is helpful to show other companies in your market, or similar companies in other markets, who have successfully exited, and how and why these companies were successful. For instance, were they successful since they acquired a large customer base? Or were they successful since they accomplished fast growth or high profit margins? It is also important to tie their success to their exit price. Was the exit price based on earnings or the number of customers the firm had at the time? The business plan should tie these metrics (e.g., exit price of $X per customer) to the business to determine its future price.
The most common exit strategies in business plans are IPOs or acquisitions. While the method of exit is not always crucial, the investor often wants to see the decision to better understand the management teamâs motivation and commitment to building long-term value. If acquisition is the selected exit path, then the business plan should detail potential companies that might want to acquire the firm in the future and why. Likewise, if an IPO is expected in the future, the business plan should document the financial metrics of the company that make it ripe for this type of exit.
In most cases, investors only make money when the business reaches a successful exit event. As such, it is critical that business plans explain the expected exit, detail why this exit was chosen and validate a realistic exit price.
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Keyword: Management, Business Management, Management Tips, Management Skill, management information.
Chris @ February 16, 2010
Identifying the Right Venture Capital Firm Partner & in Business Planning, Competition is Good
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Venture capital firms are comprised of individual partners. These partners make investment decisions and typically take a seat on each portfolio companyâs Board. Partners tend to invest in what they know, so finding a partner that has past work experience in your industry is very helpful. This relevant experience allows them to more fully understand your ventureâs value proposition and gives them confidence that they can add value, thus encouraging them to invest.
Fortunately, most venture capital firm websites list their partners with great pride. Each partner typically has a bio that includes their educational credentials, business accomplishments and investments that they have made. In identifying the right venture capital partner to contact for your company, try to find the partner that, from their background, will truly grasp the opportunity and can really add value.
Once you have identified the most appropriate venture capital partner, it is important to figure out how to contact them. As partners are often inundated with business plans, having a personal connection and/or introduction is often the difference between getting heard and not getting heard. For instance, if you attended the same university or worked at a company that they did, call or email them and use this as the introduction. If not, it is important to network. Call people that may have been associated with the partner and ask for an introduction.
Getting the partnerâs attention is the first key hurdle in raising venture capital. The second hurdle is getting them to believe in the opportunity, and finally, giving them the enthusiasm and information needed to convince other partners in their firm that investing in your venture represents a sound investment.
In Business Planning, Competition is Good
When developing the competition section of your business plan, companies must define competition correctly, select the appropriate competitors to analyze, and explain its competitive advantages.
To start, companies must align their definition of competition with investors. Investors define competition as any service or product that a customer can use to fulfill the same need(s) as the company fulfills. This includes firms that offer similar products, substitute products and other customer options (such as performing the service or building the product themselves). Under this broad definition, any business plan that claims there are no competitors greatly undermines the credibility of the management team.
In identifying competitors, companies often find themselves in a difficult position. On one hand, they want to show that they are unique (even under the investorsâ broad definition) and list no or few competitors. However, this has a negative connotation. If no or few companies are in a market space, it implies that there may not be a large enough customers need to support the companyâs products and/or services.
Business plans must detail direct and, when applicable, indirect competitors. Direct competitors are those that serve the same target market with similar products and services. Indirect competitors are those that serve the same target market with different products and services, or a different target market with similar products and services.
After identifying competitors, the business plan must describe them. In doing so, the plan must also objectively analyze each competitorâs strengths and weaknesses and the key drivers of competitive differentiation in the marketplace.
Perhaps most importantly, the competition section must describe the companyâs competitive advantages over the other firms, and ideally how the companyâs business model creates barriers to entry. âBarriers to entryâ are reasons why customers will not leave once acquired.
In summary, too many business plans want to show how unique their venture is and, as such, list no or few competitors. However, this often has a negative connotation. If no or few companies are in a market space, it implies that there may not be a large enough customers need to support the venture’s products and/or services. In fact, when positioned properly, including successful and/or public companies in a competitive space can be a positive sign since it implies that the market size is big. It also gives investors the assurance that if management executes well, the venture has substantial profit and liquidity potential.
For More Free Resources visit www.oversightsystem.com wardrobe.
Chris @ February 16, 2010
Office Cleaning Business Plan
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If youâre highly organized and would like to begin a business that you can easily set up with very little capital, with a large potential for future gain, you canât go wrong with creating an office cleaning business.
Youâll never run out of customersâpeople will always have to work and offices will always have to be cleaned. One of the great things about an office cleaning business is that the direction your company will take isnât a set path. Itâs up to you. How does this happen? Are not all office cleaning businesses created equal? No, they may be similar, but each office cleaning company has its own unique edge. This is where creating your business plan comes in. Your business plan doesnât have to be a detailed map of where you want to go. You can create one to refer to as a guide as your business grows, a check and balance, if you will.
Here are a few tips for your office cleaning business plan:
Write it down. The very first thing you should do is take the time to write it down. It doesnât matter how long or complicated you want it to be. It can be just a short, one page thing or a small notepad file in your computer. The important thing is that you write it down so that you can refer back to it in the future.
Be clear about your goals. Why do you want to run a business? Are you aiming for financial independence or do you just want to supplement the income you already have. Where do you see your office cleaning business in six months, a year, two years? Itâs easier to break goals down into six-month to one-year intervals to give yourself some flexibility to meet these goals.
Know where to base your business from. Are you planning to go full time or part-time? The office cleaning business is a great part-time option because you will be called in before and after normal working hours. Are you planning to be available 24/7? Knowing this will help you determine whether or not you want to run the business from your home or lease or rent a space for your business.
Decide who you will be offering your services to. Are you going straight for the big companies in your town or will be offering your services to smaller, more local businesses? This will help you determine the prices of your services. Call up the cleaning services you know about and inquire about their services to know the going rates as well.
Writing down these four things can help you create a business plan that you can be proud of. Not only that, you will be surprised at what comes flowing out of your pen or what you type down.
For more info see: How To Start A Cleaning Business
Kelvin Young – Author of: Office Cleaning Business Plan
Chris @ February 16, 2010
How to Establish a Successful online Business Plan – Part 1
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You may publish this article in your ezine, newsletter on
your web site as long as the byline is included and the
article is included in it’s entirety. I also ask that you
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byline. Please send a courtesy link or email where you
publish to: support@multiplestreammktg.com
How to Establish a Successful online Business Plan – Part 1
Copyright ? 2006
Losing business you don’t even know exists is common in any
business start-up. I see Internet marketers who throw up
their one page website and sell only one product. They have
no backend product, no up sell, no recurring billing -
nothing. If they only knew how much money they were missing
out on. This isn’t something you just rush into without a
strategic, well pondered plan. Unfortunately, most people
do.
With your product idea in mind “step back” from your
proposed business for a moment and get that all-important
aerial perspective. Consider these elements of your product
strategy:
The Front-end Product- The front-end product is only the
foundation of a much larger strategy. Think of your
front-end product as merely a tool to collect a large list
of willing to buy consumers.
Bonuses- Your bonuses should be relevant to your product.
Ideally, they should compliment the product in such a way
that they are related to, but can be distinctly separated
from, your front-end product to add value. Expand on your
product. Offer more information as special reports, a
related ‘workbook’, audio, video, etc. If you build a
package deal you may be able to charge up to twice as much
because the perceived value is so much greater.
The Up sell- Your up sell should be an upgrade of your
product. For instance, if you sell CGI scripts it might be
custom installation at an additional charge. Package deals
also make good up sells.
The Backend Products- Your backend products are your profit
makers. They are high-ticket items directly related to your
front-end product. Be careful that your front-end and all
your backbends are in the exact same niche so that your
backend offers will be compatible with the customer list
your front-end product builds.
Having multiple backend product is essential for any
business, do not think that yours is the exception. The
reason I mention planning these 4 components of your
product line at this point, before you create your front-end
product, is that creating a profitable product line is
strategic and has many considerations that need to be given
adequate thought.
From a high vantage point look at your business plan at
launch, in the future, and every moment in between. Plan
all of the 4 above components by answering these questions:
¡è What, exactly, will be included in your front-end?
¡è What will your bonuses be?
¡è What will be included in them?
¡è What will your up sell be?
¡è What makes it worth more money?
¡è How much more will you charge?
¡è What will your backend products be?
¡è How can you make them extremely valuable?
¡è How can you tie your backend products into my front-end?
¡è How will you market my backend products?
¡è Are there any ways to bring more value to your customers
that you are missing?
Just pausing and answering these simple questions before
you begin working on your product will put you far, far
ahead of most other online marketers. Successful businesses
rarely become successful by chance. In fact, most invest
hundreds of thousands of dollars formulating detailed,
well researched business plans.
Your business plan has no less importance. It may not need
to be so detailed but don’t expect success to come to you
if you haven’t carefully planned the high leverage aspects
of your business, obviously your product is an extremely
high leverage aspect of your business.
Whenever possible you should have all four of these
components in place for launch to maximize profits. The
reason being that once your business starts receiving heavy
traffic and getting orders it is easy to get caught up in
the day to day aspects of running a business and neglect
ever developing these lucrative components of your business.
Abe Cherian is the founder of Multiple Stream Media, a company that helps online businesses find new prospects and clients, who are anxious to grow their business fast, and without spending a fortune in marketing and automation. http://www.freehomebusinesstips.com
If you wish to find a suitable home business or learn how to start your own business from your home visit Free Home Business Tips: http://www.freehomebusinesstips.com
Chris @ February 16, 2010
