Momentum...

The last few weeks have been rather hectic both in and out of work...

In the middle of the summer, I had a chat with my business buddy and he had been slightly deflated about his business plans.  Nothing had blocked his way.  No big  questions had been asked.  Just lethargy.  Perhaps even a bit of confidence taking a knock.

So to help him out, I offered to help him by taking some of the workload off him.  I thought this would generate some momentum and get him closer to his goal.  I offered to go 50:50 with him on selling 100 units by Christmas, to share the load for those first 100 units.  We made a plan for selling the units in different routes to market to see what was the most effective.  We also made a plan to produce the 100 units.  Christ!  I might as well run the business...

And the first meeting with a customer went well and we were off and running towards our target well before Christmas.

And then a funny thing happened... my business buddy had a thought.  A thought based on the experience he had with these first customers.  I think what happened (as I'm not really sure!) was that he saw how he could improve on what these customers were doing and how "easy" it was.  It wasn't revolutionary.  It was evolutionary.

What he saw was that that all the potential customers were offering a "functional" proposition, one that was based on what the product category was called and what it did.  It didn't communicate how the entire category solved the main underlying need.  And that was his idea...

So we got cracking on it... building a e-commerce site, looking at appropriate need based domain names, incorporating a business company with two directors, starting a business bank account and sourcing the products.  And I feel confident about it.  It feels right.  It's simple and incremental.  We know the category has appeal.  We're just doing it better!

But here is the weird bit!  I've not done one bit of analysis.  I've not done a single spreadsheet or business plan.  I feel exposed but I feel comfortable.  I feel exposed as I have no idea how big or small this could be.  I don't know what the cash flow forecast is.  I don't have a clue what the capital requirements are.  I don't know what the KPI's are.  But I feel confident.  I know this will work and I completely trust my business buddy, and I'm in for half the costs (and potentially half the profits!).

And all of this has confirmed a couple of things... The first is opportunities.   We wouldn't be looking at this by just sitting around feeling bad about the idea.  It came about by driving forward and by having the confidence to give up the things you started upon and seeing how to realise the opportunity.  It's all about opening doors...

The second thing is instinct.  I really know there is something in this and I don't need numbers to prove it.

Bottom Up!

For the whole time I’ve been looking at this idea I've been thinking about how I get scale from it & quickly in a way that allows me to realise my dream of Learjets, Astons & expensive yachts. That is to say I’ve been looking at it from a total market opportunity aka “top down” approach. And that has been a good way to look at the potential of what it could be.

But it has also meant I've focussed in making it big quickly which brings about specific problems & risks, spending chunks of cash to get scale, securing large multinational retailers etc.

Today as I walked to the tube I realised that for me to be NO WORSE OFF versus my current package, would take significantly lower scale than my top down expectation - actually under 5% of my distribution target & I'd be confident I could get that by walking round on my own calling in the outlets or through a couple of trade shows.

Now while that's good to know I'm still aiming for the top down version, but at least it highlights that actually the risk of going it alone is within my own power. The only drawback to going piecemeal on the bottom up version is that exposes myself to risk that somebody with the resource & contacts in the industry could really exploit my idea x get it to the big idea quicker than my incremental way.

Ranting & Raving

I was frustrated. But why? It was a simple enough suggestion. But for some reason it just got me into rant...

My business buddy had suggested he wanted to see a publically known inventor who was offering his “services” for £250 for an initial assessment, patent search and then if they thought it was a strong enough idea they would help & support the budding inventor for a stake in their company. So it’s Dragon's Den where in stead of getting money off the Dragon's you give them cash up front, and then they take a share of your success later on…

And the thing that REALLY annoyed me more than that was to think that this shower could offer us anything we either didn't know in advance from our own experiences or could easily get from one of our friends / colleagues. We have patent attorneys on hand, normal lawyers, accountants, designers, graphic artists, to name just a few… And never mind that we both have over 30 years of experience in Sales & Marketing…

So why did he need their help? Was it an insecurity that we couldn’t do any of the things that we had to do? Was it a lack of confidence in his idea? If that was the case why couldn’t he take his idea to a consumer panel to get their views? I didn’t understand his motivation for wanting to spend money & give a chunk of cash to these “clowns” (not very professional but I think that’s what I called them in my tirade!!!)

And now a few weeks later, he’s spent his money with this guy and when he told he had had a reply, he was punching the air – because somebody independent believes in his idea. I never thought he questioned his confidence in his idea, but I suppose we all do at some point. And now he has a palpable boost of energy for his idea in a similar way that I had a few weeks ago when I came up with my bodged production line. So I was wrong… it was worth the money to pay these “muppets” (again another word I may have used in the heat of battle!!).

And through all of this, I kept thinking… if they can have a business plan for what they do perhaps I too can beat them at their own game… may be a thought for another time…

How to write a business plan - my thoughts...

Currently I have a Microsoft Word template for building my business plan, which is a combination of a number of things - my experience from new product development at my current employer; my readings on the matter; and some additional thoughts about how I can build in my thinking into my business plan.

The basic structure is as follows:-

Executive Summary


The Opportunity - The situation, the idea, how it works and the key benefits to the user


Strategy - objectives & mission; product strategy; marketing strategy; distribution strategy; financial & risk management strategy; strategic alliances; dashboards


Company Information - location; objectives & mission; ownership; start-up funding; legal (including Intellectual Property); Company KPI's


Product - product objectives & strategy; product description; competitors; technical solution; npd opportunities; competitive advantage; product KPI's; product budget


Marketing - marketing strategy & objectives; market information; market trends & consumption patterns; consumer identification & segmentation; consumer insight; brand definition & essence wheel; price positioning; advertising & promotional activity; new & expanding market opportunities; marketing KPI's; marketing budget


Distribution - distribution objectives & strategy; routes to consumer; distribution structure & segmentation analysis; distribution insights; number of distribution points & share; distribution marketing & communication; distribution pricing positioning & strategy; distribution KPI's; distribution budget


Strategic Alliances & Corporate Affairs - corporate affairs objectives & strategy; stakeholder mapping; stakeholder management; corporate affairs KPI's; corporate affairs budget


Financial & Risk Management - financial & risk management objectives & strategy; proposed business model; finance KPI's; projected profit / loss and balance sheet; key ratios; cash collection & bad debt; overall risk identification & mitigation plan; risk KPI's; finance & risk management KPI's


People - people objective & strategy; management structure; organisational structure; role profiles; cultural values; policies; people KPI's; people budget


Appendix - all relevant background documents referred to above



I have also developed a summary business plan which really just outlines the opportunity, the financial modelling, KPI's and key next steps. This I am envisaging will help gauge attractiveness of the idea by key stakeholders, before I put too much work into the main business plan.



One other thing I've developed along side either of these two documents is a non-disclosure agreement, to enable the discussion of key pertinent facts with friends and potential investors and still protect your intellectual property.

Over and above these documents, I still have to develop my pitch to potential investors.