|
|
|
Being Small Has Its Advantages
Those of us business owners who do it all, whether we are home based or a small business have it made. With today’s technology we can look as big as we want. With the web, faxes, video conferencing and all the burgeoning technology you don’t need to...
Creating a Virtual Art Gallery
To the online artist, it might seem a paradox, at first glance, to hear a recommendation to hold back work. The artist on the Internet often overproduces and displays their entire body of work. In essence, by placing it for casual viewing, known...
Four Traps that Catch Entrepreneurs
You have permission to publish this article electronically or in print as long as the resource box is included. Please notify me of publication by sending a website link or copy of your publication to claudette@metavoice.org. Word Count: 618 words,...
Improving Your CEO Succession Odds
There’s a hidden crisis in business today. A crisis causing board members, executives, employees and shareholders alike to lose sleep and question the future. The crisis isn’t rapid change, the economy or foreign competition, it’s the uncertainty...
Public Procurement and Very Private Benefits
In every national budget, there is a part called "Public Procurement". This is the portion of the budget allocated to purchasing services and goods for the various ministries, authorities and other arms of the executive branch. It was the...
|
|
| |
|
|
|
|
|
|
Could You Be Setting Your Business Plan Up For Failure?
COULD YOU BE SETTING YOUR BUSINESS PLAN UP FOR FAILURE?
"It's unlikely a business plan by itself will bring funding in the door, unless it is part of an overall marketing strategy."
David E. Gumpert, author of "Burn Your Business Plan", tells the story about how he and his partner failed to raise money after sending their business plan around to venture capitalists and meeting with several others to make presentations. Disappointed by the fruits of their labor, they considered giving up on their venture in 1995. Fortunately, on the advice of their board of advisors, they chose to divert their time from massaging the business plan to making sales. The financing, they were told, would come later.
Turns out that during 1996 they sold enough to stay afloat. But in 1997, sales failed to grow as quickly as they expected, so they decided to seek financing again. This time, they expected it would be easier to obtain financing, after all they were now fairly well established. Their advisory board, however, told them to continue to focus on promoting the business and making more sales.
If At First You Don't Succeed…
Instead of following the board's sage advice, Gumpert and his partner decided to dust off their old business plan. They spent many hours rewriting and updating the plan, and then set out once again to seek financing. And, once again, they were turned down. How could this be? In the late 90's, it seemed like every new Internet-related venture in the world was obtaining financing. In fact, according to the MoneyTree Survey, sponsored by Price Waterhouse Coopers, Venture Economics, and the National Venture Capital Association, the amount of venture capital - $7.7 billion in 1995 - had grown to $16.4 billion by 1997.
Nonetheless, the failed financing left Gumpert and his partner with two stark choices at this stage: Find ways to grow the business without financing, or call it quits. They took the first choice but took a different approach. They engaged public-relations professionals, and succeeded in getting several of their most successful corporate clients written up in business and industry trade publications - with their agency mentioned as the key force behind their clients' success. This publicity got their phones ringing with new prospects, several of which converted into additional sales.
As the business grew, they remained on guard about monitoring their expenses and aggressively collecting receivables. By 1999, they were operating profitably at $2 million in annual revenues, with nearly 20 employees. Also, during this time, the amount of venture capital being invested nationally had soared to an astounding $55.5 billion. But, Gumpert and his partner paid little attention to this; their interest in outside financing had dropped significantly.
The Power of Publicity
Gumpert and his partner carried their success into 1998 and 1999. Their promotional efforts eventually attracted the attention of a publicly held company that was seeking the expertise they offered in developing and managing online content. In December 1999 this company acquired Gumpert's company, NetMarquee. To Gumpert's surprise, the acquirer never asked to see their business plan; it only wanted to see their financial projections under several different scenarios.
In recounting his financing experience, Gumpert makes two points: First, even during good times, the venture capital route is closed to the vast majority of businesses that seek it out. While it might have seemed back then that nearly every business asking for venture capital received it, the reality is venture capitalists tend to
reject, out of hand, most carefully crafted business plans. Second, you'll be surprised at what you can accomplish without the financing you think you so desperately need to stave off failure.
Four Tools To Help Market Your Business Plan to Investors
The lesson in all of this is that it's unlikely a business plan by itself will bring funding in the door, unless it is part of an overall marketing strategy. Chances are you already have a book or two on how to write a business plan. If you do, I'm going to guess that, like Gumpert, you already have fixed in your mind certain beliefs.
For example, you might think, "If you're trying to attract investors, raise capital, or sell your business, then you should give your prospects a detailed business plan document." Not so fast. It may be more effective to get their business card, send them an executive summary, and then follow-up with them to check their interest level. Or perhaps you believe, "A business plan document is the only way to get investors interested." Again, as Gumpert's experience proves, this is not so. Some businesses attract investors through personal contacts, press releases, or because of the pure uniqueness of their market position.
So open your mind; take a thoughtful step or two back, and consider using these four tools to help you achieve your desired results.
First, develop a concise, well written twenty-five page business memorandum. This mini-business-plan should build a case that separates your venture from your competition. You don't need a two-inch thick business plan. Plans this long lack aim; instead of building a case that leads investors to decide whether the business is the right investment for them, they "fire away" in hopes that some of the shots will take effect.
Second, craft an effective elevator pitch - a 60-second, to-the-point verbal pitch for your business - that communicates to your customers and investors what you do in an exciting and engaging way. The ability to separate your business from your competitors and get an investor's interest in the short time it takes to ride up an elevator is critical.
Third, put together an investor relation Web page. Of all the communications media available, the Web is particularly important. It's fast and available 24/7. With it, you can capture leads and automatically keep in touch with those who are interested in your business.
Finally, use press releases to get your word out. A press release is the basic tool for gaining the attention of the media. The public's desire for interesting, relevant news remains strong, as does the importance of carefully selecting relevant target audiences. You are dealing with much more skepticism on the part of the public than there has been in the past, which makes the evidence and objectivity of your press release paramount.
The process of raising money and attracting investors isn't easy. If it were, every business venture would get funded. You have to use all the tools that are available to you, and start looking at this process as a marketing process backed by hard, verifiable evidence. You just don't know when investors will be ready to invest; but you do know that if you do everything you can to optimize your funding process it will bear fruit, and ultimately raise the money you need for your business.
About the Author
Mike Elia is a chief financial officer and an advisor to venture capitalists and leverage buyout specialists. To start positioning your business as the most appealing investment choice, get Mike's business plan ebook or free business plan guide at http://www.business-plan-secrets-revealed.com.
|
|
|
|
|
| PR.com: Directory of Businesses Jobs Press Releases Products ... |
| Comprehensive Directory of Businesses, Jobs, Products, Services, Press Releases, News, & Articles in all Industries. Promote your business. FREE. |
| www.pr.com |
|
| PR Newswire - news distribution, targeting and monitoring |
| News and press release distribution services for small business marketing, corporate public relations and investor relations, government and organizational ... |
| www.prnewswire.com |
|
| PR Week Magazine |
| News and features about the public relations industry, with links to US, UK, Asian, and German editions. |
| www.prweek.com |
|
| Public relations - Wikipedia, the free encyclopedia |
| Public relations (PR) is the art of managing communication between an organization and its ... PR historians say the first PR firm, the Publicity Bureau, ... |
| en.wikipedia.org |
|
| Puerto Rico - Wikipedia, the free encyclopedia |
| Hyperlinked encyclopedia article covers the country's history, government and politics, geography, economy, demographics, language and culture. |
| en.wikipedia.org |
|
| The Public Relations Society of America (PRSA) |
| Largest professional organization of public relations specialists representing business, consulting firms, government, associations, schools, ... |
| www.prsa.org |
|
| CIA - The World Factbook -- Puerto Rico |
| Profile of Puerto Rico by the Central Intelligence Agency (CIA). |
| https: |
|
| Center for Media and Democracy - Publishers of PR Watch |
| A nonprofit, public interest organization dedicated to investigative reporting on the public relations industry. |
| www.prwatch.org |
|
| Puerto Rico Vacations | Puerto Rico Tourism Company | Puerto Rico ... |
| Puerto Rico Tourism Company Official site includes nightlife, area sports, culture, and travel information. |
| www.gotopuertorico.com |
|
| PR: See what people are saying right now on Technorati |
| See all blog posts tagged with pr on Technorati. ... This page shows everything that has been tagged with pr. To contribute to this page include this code ... |
| www.technorati.com |
|
| Edelman |
| Full service global public relations firm. Includes company profile, management team, practice areas, industries served, case histories, client listings, ... |
| www.edelman.com |
|
| LEWIS PR - global public relations |
| LEWIS PR is a global public relations consultancy working with leading and emerging brands and delivering predictable results tied tightly to client goals. |
| www.lewispr.com |
|
| IANA | .pr - Puerto Rico |
| University of Puerto Rico Gauss Laboratory Facundo Bueso Building Office 265 ... Puerto Rico Email: tech@uprr.pr Voice: +787 765 3263 Fax: +787 754 0757 ... |
| www.iana.org |
|
| Online Public Relations Home Page |
| Free online resource for public relations professionals. |
| www.online-pr.com |
|
| Chartered Institute of Public Relations, CIPR, the professional ... |
| The CIPR is the professional body for the UK public relations industry, providing PR training and events, PR news and research, and a PR jobs board. |
| www.ipr.org.uk |
|
| PR News Online — Trusted Source for Public Relations News, PR ... |
| The latest news on public relations delivered FREE right to your inbox. ... Psycho-Geometrics Help You Know What 'Shape' Your PR Team's Personality Is In ... |
| www.prnewsonline.com |
|
| O'Dwyer's Public Relations News - odwyerpr.com |
| Features breaking news about the public relations industry, a database of PR firms, listing of PR service firms, client search tool and job postings. |
| www.odwyerpr.com |
|
| PR News Online — Trusted Source for Public Relations News, PR ... |
| E-letter. The latest news on public relations delivered FREE right to your inbox. ... Share ideas with your peers in PR News' just-launched Forum ... |
| www.prandmarketing.com |
|
| Linux PR: |
| Comprehensive Press Release and Public Relations resource for the Linux community. |
| www.linuxpr.com |
|
| Escape to Puerto Rico - Your Internet Guide to Puerto Rico |
| Internet guide to everything Puerto Rico. Offers lots of photos, accommodations and travel information from around the Island. |
| escape.topuertorico.com |
|
|