To often people ignore the power of pen and paper. Many
people aspiring to become more in business have great ideas, but by the time
they start talking to someone about investing in that idea or business, the
details are either forgotten or not retainable by the potential investor.
There are many benefits to writing a business plan, and even
completing a feasibility study for the project in the market for being funded.
Other than the obvious benefits of knowing and understanding the markets and
how a company could benefit from being introduced into a specific one, it gives
the writer a professional’s insight to their own ideas and also offers a medium
that can be placed in front of a complete stranger to go over the ways they
could perhaps make money with a solid partnership with the venture.
This week I’ve researched two experts who have done great things
with their business plans.
Reid
Hoffman, the co-founder of LinkedIn and investor in PayPal and someone that
is considered to be a prolific angel investor. Mr. Hoffman is an accomplished
entrepreneur, executive and angel investor. He invests in many technological
companies and usually helps drive them to success through their early stages
and periods of explosive growth.
According to his guest blog on TechCrunch
some of the most important aspects of the business plan include: the ability to
reach a massive audience, the unique value proposition and whether the business
will be capital efficient or not. This is part of the reason that he likes to
invest in software and technology. A product like the iPod or iPad can grow from
nothing to everything very rapidly.
The second expert I researched this week is David Skok, Mr. Skok
has built three very successful companies that have exceeded 100 million
dollars in revenue in 20 different countries and also employs over 800 people.
David best known for his value in helping JBoss, Netezza, AppIQ,
CloudSwitch, Tabblo and Diligent Technologies to successful exits. David serves
on the boards of CloudBees, Digium (makers of the very popular Asterisk Open
Source PBX/telephony software), Enservio, GrabCAD, HubSpot, Meteor, OpenSpan,
and VideoIQ.
David is a very popular blogger among entrepreneurs and
spends a great deal of time writing articles on the viral marketing machine and
how it can help new startups and business owners.
David wrote a great blog on which aspects
of a business plan are important to the future owner. Some of his tips
regarding the value of the business plan are: understanding how startups are
valued, identifying risk, mitigation of risk quickly, matching the milestones
of capital, validation of milestones and avoiding a down round at all cost.
Both of these individuals explain that key elements to an
investor spell money and profitable return on their investment. Being confident
in the person asking for the investment is a huge portion of their ultimate
decision to invest or not to invest. Knowing and understand how the entire
planning process works is a key element in securing the right funding for the
project and also gives the future business owner the ability to better
understand and negotiate the terms of the agreement.
