Doing business as successful business owners do

Every entrepreneur starts their business having world-changing ideas…

  • An invention that has come out of your good imaginative thinking.
  • An artful creation which can allow the customer to see the soul of the creator through his work
  • A messaging platform that will bring people of the world closer to each other
  • A pathbreaking technology that will spread like fire
  • A product that will solve the real problem for real people
  • A unique service that will deliver a meaningful and delightful customer experience
  • A framework that will change things to become more accessible and seamless
  • A global platform for sharing information and starting a community of common interests

And because of all the cheap, affordable and no-barrier to start; anyone can whip up a website, set up a business page on Facebook, change profile on LinkedIn and claim to be a business owner in few hours.

But, the fact of the matter is 9 out of 10 startups fails. Close to 100M startup starts every year, 80% of them won’t survive over 18 months. Less than 4% grow over $1M in revenue and survive for 10 years. Less than 1 in 1000 past over $50M in revenue.

CB Insights analyzed the posts written by startup founders on various blog sites to pinpoint the reasons they believe their company failed. They found that number-one reason for business failure is the lack of a market need for their product.

  1. No market need
  2. Ran out of cash
  3. Not the right team
  4. Get outcompeted
  5. Pricing/cost issues
  6. User un-friendly product
  7. Product without a business model
  8. Poor marketing
  9. Ignore customers
  10. Product mistimed
  11. Lose focus
  12. Disharmony among team/investors
  13. Pivot went bad
  14. Lack of passion
  15. Failed geographical expansion
  16. No financing/investor interest
  17. Legal challenges
  18. Didn’t use network
  19. Burn out
  20. Failure to pivot

Credit: CB Insights

So the question is how would you grow your business without drowning into the sea of failures…

  • People like your product. Because if they like it, they will trust which will lead to buying.
  • Once they buy, you will be able to build the relationship with your customer.
  • You serve your value proposition so irresistibly in front of your customer that they understand what they are buying and they know it’s value.
  • Your customer has confidence in your product and comfortable in trying out your product.
  • The customer is convinced about the product fit of their need. They know that it is going to enhance their happiness and improve life.

Top of that the stiff competition is making it more difficult to survive and thrive in the open marketplace keeping you stuck doing business at shoestring margin, and burning the midnight oil to keep the business running.

Tired of this endless fight 90% of business owners are shutting down their door and enrolling their name in the list of 90% failed startup graveyard.

I am writing this guide pouring in my over 25 years of experience working for global corporations, running my own startup for last 8 years and mentoring/coaching over 15000 entrepreneurs across India.

My sole objective is to bring together the proven strategies, a new perspective, and field-tested tools so that, you can take advantage of these tools to launch, build and grow your business and live a healthy lifestyle.

I want you to take a leap forward to grow your business. Use this guide to crack the code on profitably managing your business like a pro.

And using this guide …

I want you to be aware of what’s coming in your business, what it may mean for you to capture the market opportunity, and where things could be headed for you to earn the income and lifestyle you dream for yourself and your family. I want you to be able to make an informed decision about the facets of your business so that you can reach new levels of success and profitability.

Sound good?

Look forward to getting the next article in this series aimed to channelize yourself to be fully committed to your dream, vision, mission, and purpose.

3

Build the shared understanding of your business with Executive Summary

The Executive Summary contains a short outline of all the important aspects of the Business Plan Investors in particular read executive summaries before looking at the rest of a plan in order to determine whether they are interested in this business and want to learn more about it. Numerous business plans are submitted to lenders every week. Not all of these plans are reviewed in depth. In fact, only a small fraction of them are read beyond the executive summary.

Therefore, even though your whole business is well described later on, a short summary highlighting the key points of your business plan helps to persuade the reader to study the complete document, thus greatly enhancing the chances of obtaining the financing you are looking for.

The Executive Summary should

  • be written in clear and simple language
  • also provide non-expert readers with an immediate understanding of what the core of your intended start-up is about
  • contain the most significant information from your business plan
Key Questions
  • What is your business idea? How unique is your business idea?
  • What is your dream, purpose, mission and vision of your business?
  • Description of the products and services
  • The marketing strategy and a plan to generate revenue from marketing
  • Well-researched and business relevant insights on the market size and growth potential
  • Current business position (if any) i.e. its legal form of operation, the principal owners, patents, trademarks
  • A brief summary of the funding requirement, source of funding, and the fund utilization plan
  • Your plan on turning the company profitable
  • Which people make up the management? What experience and expertise do they have?

Make a copy using Google Docs-> File->Make a copy option.

Additional Tips:

  • It should be possible to read and understand the Executive Summary in 5-10 minutes
  • Test it – ask people to read it who have no previous knowledge about your business idea and its technical or scientific background.
  • Later you can attractively design it using colors, graphics, layout as need be
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How to write perfect company description

The Company Description section of your business plan typically outlines vital details about your company, such as where you are located, how large the company is, what you do and what you hope to accomplish. It describes the vision and direction of the company so potential lenders and partners can develop an accurate impression about who you are.

Begin the company description section with a paragraph that captures all of the vital information about your company. Imagine you are giving an elevator pitch about your company and want to express the key characteristics in just a few sentences. Use the same thought process for your introductory paragraph.

Describe your business and paint a clear picture of its functionalities

  • How will you get what you want?
  • How will you market your business?
  • How will you generate user experience?
  • What will be your unique selling point?
Key Points
  • A powerful opening quote which serves as a summary of your business
  • The description of the industry category your business belongs to
  • Description of the problem statement
  • Description of the business operations with specific relevance to the problem statement
  • Communication strategy with your customers
  • Description of the scale and future expansion of your business
  • The resources you need and the hiring procedure of various job functions
  • The competitive advantage of your business

Make a copy using Google Docs-> File->Make a copy option.

Additional Tips:

  • Show a clear understanding of the business you want to be in
  • Clearly describe what market needs your business will be fulfilling.
  • Explain why you believe your business will be successful
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How to write the financial plan like its your strategic blueprint

Though most of the entrepreneurs hate to make a business plan, in my view, it’s pretty vital document for a business owner to prepare the business plan so that everyone has one view about the business. Also, financial numbers are the direct indicator of the success or failure of any business.

The financial projection is the one document that everyone whether your investor, lenders and anyone else will ask you first before they give any consideration for potential funding or alliances. If you are looking for funding, joint venture, alliances or partnership with anyone, providing financial statements is critical.

The following financial projections and reports should help you provide the clarity to the stakeholders about your business:

Financial Summary: Once you prepare your income statement, expenditure statement, balance sheet and cashflow, you can summarize the key financials into a single statement to get an overview of your financial projection.

Income Statement: Your income statement should list projected revenues and expenses. It should provide the detailing in a manner that it includes all the sources of revenues that you envisage to earn in your business and it should also provide the details of all expenses. The income statement will be able to show how and when you are going to achieve the breakeven and profitability.

Cash Flow Statement: This is a vital document that shows you the cash inflow and outflow in your business. A detailed breakup of income and expenses will guide you to adequately and timely arrangement for the funding to support the expenses for the smooth operating of your business.

Balance Sheet: It shows about the financial health of your business and includes key insights about assets, liabilities, shareholders, and earning retained in your company to fund future growth and expansion plan.

Financial Plan Summary

The financial summary helps you plan and monitor your financial goals and acts as windows for you to look at them to analyze your current state as well as take necessary actions to accomplish them. While creating, analyzing and reviewing your financial summary your focus should be on the following key aspects.

 

 Key Questions
  • Is your financial statement attuned to your business goals?
  • Have you identified all the revenues and expenses? When you look at your financial summary, do you feel comfortable about the numbers that it shows?
  • What alternative actions you may need to think about in case you don’t achieve the desired result?
  • What are the options available to you to handle unplanned and under performing situations?
  • Is the plan you have created can be implemented? What kind of challenges may you face during the action?
  • Have you reviewed and revised the financial plan to make it the best that you can anticipate?

There are several templates available online for you to use for preparing these financial statements. We are attaching the format that we liked the most and used for planning several of our businesses

Make a copy using Google Docs-> File->Make a copy option.

 

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Management and team planning to support your vision and support your organization culture

The investors of your Business Plan want to find out who is the driving force behind the new company. They want to be able to assess whether the people in charge have the right characteristics for managing the new company. A careful team planning requires you to think about the skills, abilities, experiences and managerial capabilities that you will require to build and grow your organization.

When assessing the company structure you have planned it is also interesting to know which agreements or contractual connections
already exist with partners or with research institutes. Think about the skills, abilities, experiences and managerial capabilities you will require in order to build and grow your organization.

Key Questions
  • What kind of leadership skills will you require considering the technical, operational and managerial aspects of business?
  • If you have already identified these individuals, who are they? What are their experiences, educational backgrounds, and skills?
  • Do you require leaders having industry expertise? Is this industry expertise available in your leaders?
  • What will be their key result areas? How will you monitor their achievements?
  • What salary benefits, equity and other remuneration you require to attract right leaders?
  • An organizational chart if you have more than 10 employees, showing the management hierarchy and responsibility for key functions.
  • List of any advisors, such as board members, accountants, and attorneys.

Make a copy using Google Docs-> File->Make a copy option.

Additional Tips:

  • Introduce your complete team. Explain the professional successes of each individual which make them valuable for the new project.
  • If you have already worked together successfully as a team, this is also well worth mentioning.
  • Based on the personal abilities and knowledge of each individual work out who is best suited to which tasks and responsibilities in future. Any lack of skills should quickly be remedied.
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How to define your product and services so that 6 year old can understand it

In this section you have to clearly describe the products and services your business will provide. Explain the characteristics and / or functions of the product or the individual components of your service. Particularly in the case of technical products or services it is important to include a few sentences about the areas of application, i.e. where the product or service will be deployed. This also includes statements about the technical development status and the patent and license situation.

Product and Services section should describe the elements and details that make your business unique and different (or better) from your competition.

  • Present what is innovative about it and what sort of lead you have over the competition
  • Explain how your offering stands out from already existing ones and which opportunities there could be for developments
  • Explain the manufacturing process and what capacities and investments are needed to achieve the targeted sales volumes
Key Questions
  • The stage and status of your product or service. Is it ready? Is it under development? What is the timeline of the launch?
  • The outline of your unique selling point. What makes it different from the competition?
  • The pricing strategy. Do you have discounts? Premium packages? How is the discount affecting the profit?
  • The breakdown of your budget
  • The manufacturing procedure of your product. Do you have an agreement with an external manufacturer?
  • Your material sourcing strategy
  • Challenges you foresee in your business (including financial during low seasons).
  • Patents, copyrights and any trademarks your product requires.

Make a copy using Google Docs-> File->Make a copy option.

Additional Tips:

  • Bring out what is special about your product/service
  • Show how your product or service satisfies client needs and expectations
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