Expert Views on the Value of Business Plans Part 2

For part two in my discussion on the value of business plans, I will like to share what it is that I have learned from my own research on the two experts that I first profiled in the posting right below.  The two experts that I researched earlier this month was investor and entrepreneur Mark Cuban, and business owner and writer of the book “The-Plan-As-You-Go-Business-Plan”, Tim Berry. After reading up on Mark Cuban, I intend to make sure I come up with an idea that is not boring nor follows the same trends as everyone else’s business plans. I have to have a clear development and exit plan to show investors so we can all see where the company may be going in the future and they can see what they will be getting in return for investing into my company. Tim Berry proved to me how valuable visuals could be to have present throughout your business plan.  He also pushed having a strong strategic position and differentiation from your competitors so I will continue to analyze my company’s goals and objectives and strategies as I am finalizing my business plan to make sure they stand out and are on point with my vision.

Based on the information provided by these experts, for my own business plan I decided to make it geared more towards digital distribution and I was very detailed in my sections on the industry analysis and target market. I had to show that my target audience was large enough for my products and services and that my company has room for “potential growth”. For my plan, I paid more attention to my assumptions and costs and tried to be more realistic with the numbers.  I also did a thorough risk assessment.  I eliminated what I thought I would not use and stuck with what I knew for sure I would need in my business as it starts.

The sections of my business plan that I consider the most important to the investor reading my plan is my technology section, industry analysis section, and my financials section. The finance section is the most important of all because investors need to see I have researched the industry enough to know how much money it may actually take for me to start and run this company and how long to make a substantial profit. 

Abrams, R. (2010). The Successful Business Plan. Palo Alto, CA: The Planning Shop

(2011). Mark Cuban quotes. Retrieved August 2 2011 from, http://www.inspiringlifethoughts.com/?tag=mark-cuban-business-plan

Altucher, J. (2011). How I helped make mark cuban a billion dollars, and five things I learned from him. Retrieved August 2 2011 from,

http://blogs.wsj.com/financial-adviser/2011/04/18/how-i-helped-make-mark-cuban-a-billion-dollars-and-five-things-i-learned-from-him/

Kafka, P. (2009). Mark cuban’s start-up investing tips: buy now! bonus advice: how to manage 5,000 emails a day. Retrieved August 2 2011 from,

http://allthingsd.com/20090115/mark-cubans-startup-investing-tips-buy-now-bonus-advice-how-to-manage-5000-emails-a-day/

(2011). Retrieved August 2 2011 from, http://bpexpertviews.blogspot.com/

(n.d.) Retrieved August 3 2011 from, http://deadspin.com/5090903/the-mark-cuban-scandal-for-dummies-like-us

(n.d.). Retrieved August 2 from, http://timberry.bplans.com/introducing-myself

(2009). Ask tim berry-what sort of business plan do you need? Retrieved August 2 2011 from, http://www.youtube.com/watch?v=SdS0qInvC4k

Expert Views on the Value of Business Plans

This week I began a new course at Full Sail University called Business Plan Development and one of our first requirements were to seek two experts in the field of writing or reviewing business plans and find out their opinions on what are the most important pieces that investors look for in a business plan. After some researching and looking over their backgrounds and history, I decided on the NBA’s Dallas Mavericks, 2011 NBA Champions owner and entrepreneur Mark Cuban, and founder of bplans.com, Tim Berry, as my business plans experts.

(deadspin.com)

“Wherever I see people doing something the way it’s always been done, the way it’s “supposed” to be done, following the same old trends, well, that’s just a big red flag to me to go look somewhere else.”-Mark Cuban quote from inspiringlifethoughts (2011).

Besides what I mentioned above, Mark Cuban is also chairman of the HDTV cable network HDNet. Originally from Pittsburgh, PA, he is a billionaire with a net worth of over 2.5 billion. Since he was a young man, Mark Cuban has been hustling (including working as a bartender and club promoter in college), investing, and selling businesses…technological and Internet businesses in particular.  (inspiringlifethoughts, 2011). He is and has been successful in the dot com boom ahead of his time (Altucher, 2011) and is a guest on the hit business-related reality show Shark Tank.

According to Altucher, one of Cuban’s rules in investing seems to be to go and find something that you find exciting and then go out and find another few hundred million people are who are just excited about it too! He is looking for something that has digital distribution and content and will not be interested if you mention your exit strategy is to sell (Kafka, 2009). Based on the bpexpertsview blog (2011), some of the key components Cuban wants to see in your business plan are that it is an actual need for your product or service and a market for your product or service. This is important because your market has to be large enough or your business will fail and you have to know that people really are interested in your product or services. Your company has to have room for “potential growth” and you have to have financial projections for your business ready and be prepared overall before you pitch your plan to an investor.

These are also key factors because an investor wants to know will he or she be able to make a profit from this investment, they need to see that your financial assumptions are realistic and accurate, that you did your research, and the finance section of your plan is one of the first things they look at in your business plan.

Tim Berry has also written “The-Plan-As-You-Go-Business-Plan” book for entrepreneurs interested in doing a business plan. He is also president and founder of Palo Alto Software and co-founder of Borland International. Berry was named one of Twitters top 20 entrepreneurs to follow, was also a former journalist, and in 2007, won the USASBE (United States Association of Small Business and Entrepreneurship) Corporate Entrepreneur of the Year award. He has several blogs, posts, and books for helping start up and small business companies find venture capitalists, angel investors and how to obtain business loans (timberry, n.d.).

Here is a YouTube video with Tim about what type of business plan someone will need when writing one’s business plan:

(youtube.com)

One of the key components he suggests a business planner should see is that there is no standard format for a business plan that you specifically might need. Think about your goals and objectives and strategy, who are you selling to, how are you different, what are you not doing as a business. He says keep track of the progress of your plan, look at your costs, think about what might you actually use in your business. He emphasizes the use of numbers and knowing who is supposed to do what job all the time and the value of bullet points. Berry talks about outputs of the plan i.e. an elevator speech, but says the plan is based on what you use to “steer your business” and that milestones, assumptions, strategic positioning, and more, should be included in your plan only if you’re using them in your specific business (youtube, 2009).

These components are key because I can see his perspective on making your business plan fit you and your business and why visuals are so helpful in getting your point across to an investor. Strategic position will reveal the focus of your company and how different you are from the competition.

I hope this advice helps you if and when it comes times for any of you to write your business plan for your respective businesses. Follow Mark Cuban’s blog at: blogmaverick.com

And visit Tim Berry’s website at: http://www.bplans.com/

Resources:

(2011). Mark Cuban quotes. Retrieved August 2 2011 from, http://www.inspiringlifethoughts.com/?tag=mark-cuban-business-plan

Altucher, J. (2011). How I helped make mark cuban a billion dollars, and five things I learned from him. Retrieved August 2 2011 from,

http://blogs.wsj.com/financial-adviser/2011/04/18/how-i-helped-make-mark-cuban-a-billion-dollars-and-five-things-i-learned-from-him/

Kafka, P. (2009). Mark cuban’s start-up investing tips: buy now! bonus advice: how to manage 5,000 emails a day. Retrieved August 2 2011 from, http://allthingsd.com/20090115/mark-cubans-startup-investing-tips-buy-now-bonus-advice-how-to-manage-5000-emails-a-day/

(2011). Retrieved August 2 2011 from, http://bpexpertviews.blogspot.com/

(n.d.) Retrieved August 3 2011 from, http://deadspin.com/5090903/the-mark-cuban-scandal-for-dummies-like-us

(n.d.). Retrieved August 2 from, http://timberry.bplans.com/introducing-myself