iterative business plan model

Three Imperatives to Excite Investors about Your Start-Up

In a recent article from Entrepreneur.com (January 23, 2015) Martin Zwilling tells potential business owners that, “To Investors, Start Ups Without Business Plans Are Expensive Hobbies.” He goes on to say that you can’t just “sketch your million-dollar idea on the back of a napkin” and expect investors to open their wallets. Finally, he counsels that: “Most good ones I see are in the range of 25 pages.” However, my perspective is different.

I believe what Zwilling telling us is this: Get a cogent plan together before you try to drum-up financing for your start-up. But there is no reason this plan has to be 25 pages or longer. It only has to prove that you know how to react to customer demand – both now and in the future.

One of the best ways to accomplish this is to use CBM’s one-page Business Planning Framework to help you quickly validate your customer demand. You should run some initial tests to prove or disprove your assumptions, then change your strategies and tactics so that you are fulfilling what customers actually need – and most importantly – what they will pay for. Showing investors this type of flexibility before they give you money—proving to them that you can test, fail, re-test and then scale – goes a long way to making them invest . Following are my top three ways that this plan – when it focuses on customer demand — will pique investor interest when others fail:

Numbers Tell the Story

Look at the CBM template and identify where you need to inject the power of numbers. What’s awesome about the iterative business plan model you are working with is that you will have sales numbers that show you have already reacted to suboptimal numbers and adjusted mid-flight – to make these numbers grow. Any smart investor will react positively to this type of professional business planning and execution.

Customer First

If you will notice, the majority of the steps in the CBM model have to do with customer or marketplace. That doesn’t mean that the other elements aren’t important — it just means that you are forced to continually think about the single, most powerful engine that will drive your business’s success – customer demand. As you begin to adjust the other “tiles” in this plan — make sure you keep in mind the ramifications on the customer-centric tiles from the changes you’ve made.

Fear of Failure?

There is no such thing as failure when using this type of business planning process. If something goes wrong, you can stay flexible, learn, change — and try other options until you succeed. If you have a phone-book-sized business plan, it might be difficult to even identify where you went wrong. This one-pager focuses your activities much faster — and allows you to see where the customer – not some dusty old plan — is mandating that you change.

Think of it this way – the business plan built from the iterative and flexible process will be a working, living document that shows investors you’re already ”in the fray” and working to make your business work. You haven’t spent six-months researching what your customer needs — you’ve used this iterative plan to actually find out. You are also armed and dangerous to your competitors because you have experience with meeting (or not meeting) customer needs in the markets you serve and are acting based on facts, rather than assumptions. This approach is worth a lot — to investors and to your business.

business-planning-expert-series

New Podcast Aims to Shed Light on Business Planning Challenges

Center for Business Modeling’s Expert Series Features Multimedia Presentations, Interviews with Startups, Marketing, Sales, and Operations Leaders

COLORADO SPRINGS, Colo. – (January 26, 2015) – The Center for Business Modeling (CBM) today announced the launch of its new podcast, the CBM Expert Series. The Expert Series will feature guests with deep experience in several aspects of business planning—from ground-up startups to yearly and quarterly planning challenges for established businesses. The 15-minute podcast (which includes synced visual slides and audio) features a brief presentation from the guest that focuses on how to solve a business planning problem followed by a brief Q&A with the host.

The inaugural episode features a presentation and talk with Christopher Ryan, CEO of Colorado Springs-based Fusion Marketing Partners, a B2B marketing agency providing strategy and execution that accelerates sales for enterprises across the globe. Ryan shares his wisdom on how positioning and branding impacts company value.

Future episodes of the Expert Series will include:

  • Denver-based angel investor Todd McWhirter, who will explain why a detailed and realistic exit strategy is critical to raising money. He will discuss several types of exit plans and provide tips for each.
  • Impact B2B Sales Managing Director James Franklin will discuss how “the buyer’s funnel” can improve the way sales teams engage and convert prospects.

“CBM’s mission is to streamline and simplify how business leaders plan for success in every facet of their enterprise,” said Expert Series host Nate Warren. “To that end, we offer a concise presentation that focuses on a highly practical topic from a guest whose shared experience can help our audience shorten the path between writing the plan and realizing success.”

About The Center for Business Modeling

The Center for Business Modeling was founded by a team of seasoned business professionals whose experience encompasses all aspects of business creation, operations and finance. Our team has experience ranging from small entrepreneurial ventures to multi-billion dollar international corporations. CBM principals have been responsible for launching ventures, fundraising, marketing, sales and running large successful organizations. Over the years, CBM professionals have seen businesses repeat the same mistakes including failure to capitalize on their core competencies and failure to plan correctly. Our team is now dedicated to helping companies reach their maximum potential through effective business modeling. Find out more at www.centerforbusinessmodeling.com.

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For more information please contact:
Nate Warren
720.244.4734
info@centerforbusinessmodeling.com

Improvement is a Messy Business

The road to improvement is often a sloppy process of elimination that proceeds by fits and starts. The first problem we face when getting rid of waste is knowing what to look for. Waste is so prevalent that we often mistake it for real work!

Waste can be placed into one of two broad categories: something we’re already doing (active waste), and something we’re not doing but should be (passive waste). Let’s start by examining the category of active waste since it is easier to get a handle on.

To begin our study of waste, we’ll first consider two categories of work: value-added (VA) and non-value-added (NVA). Value-added work only includes the activities the customer is specifically paying you to do—provided that it’s done right the first time. Everything else goes into the non-value-added category of work. Immediately we see that 75%-90% of the work is not value-added. This is one of the first mental hurdles we must cross—acknowledging the reality that most of the work adds no value to the customer.

Waste can be found everywhere, but since NVA work typically exceeds VA work by a large margin, it makes sense to start looking for waste in the NVA work. NVA work includes many activities that are necessary to the operation of the business: marketing, sales, purchasing, billing, receiving, accounting, reporting, etc.—administrative processes that are sometimes referred to as “business value-added.” Also in the NVA category we have waiting time, travel time, and time off work.

One of the largest portions of NVA work is rework—doing something over that wasn’t done right the first time. Another term for this type of work is firefighting—reacting to the process/product problems that come to your attention each day. Some examples include: reworking/repackaging defective product; marketing/selling defective product at a reduced margin; reprocessing incomplete paperwork; looking for lost paperwork; inspecting for defects; routine testing for conformity; fielding customer complaints and returns due to errors or defects; and, repairing equipment that wasn’t fixed or maintained properly. With those examples in mind, you may be able to think of many more types of rework that take place in your business. You may also begin to see that we sometimes devote the resources of an entire department to the task of firefighting! There is clearly a paradigm shift needed for us to get out of reactive mode (firefighting) and get into proactive mode (planning and prevention).

As we explore this topic further, we’ll begin to look at some specific sources of waste, and develop an overall strategy to guide the improvement effort.

Reposted by permission. View the original post on LinkedIn here.