In my previous post I talked about online
streaming and whether it is the death of physical mediums. I highlighted some
online streaming services such as Netflix and Spotify and the benefits of using
them. You can check out that post here and let me know what you guys
think about it.
In today’s post however, I will be talking
about a business related topic, Business
Plan Development. I will examine and summarize the views of two recognized
experts in the field of writing/reviewing business plans in terms of what they
believe to be critical and key to include in a business plan.
The two experts I have chosen for this this
post are Carl Schramm (university professor at
Syracuse University) and venture capital expert, Keet van Zyl.
Carl J. Schramm, Ph.D., J.D is University Professor at Syracuse
University, the 16th person in the University’s history to hold this position.
For ten years he was the president of the Ewing Marion Kauffman Foundation. Keet Van Zyl is a venture capitalist
with extensive high-growth investment experience. He has structured various
private equity funds in Southern Africa for a US fund-of-funds investor.
Carl Schramm does not believe in long over-drawn
business plans. He believes they
should be one page long and include what the product is, who’s going to buy it,
why do they need it, and how are we going to deliver if based on what we know. Carl
personally believes in basing his investments on the character of the person
over the length of the business plan. He believes some characteristics of an entrepreneur
are:
- Seeing things differently and considering untraditional forces that others don’t see.
- Being widely read and knowing lots of facts and information that helps to make their thinking richer.
- Worked in multiple places around the world.
- Worked in a startup.
- Worked in a job they didn’t like.
- Worked in multiple industries.
These traits are all important in
attracting investors for your business because if they cannot see that you are
knowledgeable and committed to your venture, they may not be willing to invest
in your company. Investors also like to see that this is not your first time
around the block and that you have experience not only in your field, but in
others, this way showing that you understand how business works in general.
Keet Van Zyl however believes that one
should have a business plan and has offered the
following advice concerning the topic. He believes that you should spend
significant time on your business plan
and write it yourself, as no one knows your business better than you. He
believes the business plan should be
clear well arranged and not to long. In your business plan you should also clearly identify both your target
market and the need for the product/service. Investors probably care about this
section the most, as they want to make sure that there is a target market that
is willing to buy your product/service and that there is a need for it. Some
products/services help create a new lane that they occupy by themselves, which
will sometimes attract investors or scare them away. One thing to remember is
that investors like taking ‘calculated risks’, so make sure that if you are doing
something that no one else has done before that you are able to prove that there
will be a market willing to buy. At the end of the day this is what investors
care about, the profitability of the business venture.
As you can see, there are two completely
opposing views on business plans. Carl Schramm thinks your business plan should
be short and sweet, so that you can get down to running the business, whereas
Keet Van Zyl believes your business plan should be laid out and structured in
an organized manner. One common area both included was what the product is and
who is going to buy it. Those two areas are probably the most important things
to include in a business plan, as if investors cannot see a clear
description/idea of what the product/service is and whether or not there is a
target market for the product, they will most likely not be willing to invest.
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