So, you had a great business idea in the middle of the night, and now you’re ready to quit your day job and start a new business!
But is the business idea that great? And is the idea backed up by a workable business model and business plan? Does the business idea furnish good opportunities?
Goodness me — are you confused yet? Well, hopefully, you won’t be after reading this article.
In the usual business terminology, a business idea refers to the overall notion of what your business is going to be about.
At the stage of an idea, a business has no real plan behind it.
Think of the business idea as the seed from which the central model and opportunities will grow.
The basic idea needs to be one that has potential for growth. Sometimes, the idea is sound, but the current landscape won’t allow for growth — this can be likened to a perfectly good seed that wouldn’t grow in the desert.
For example, opening up a restaurant might be a great idea, but doing it during a nationwide lockdown won’t allow for initial growth.
Every business idea needs to be tested. The best way to test your business idea is to pitch it to a specialist consultant who is experienced in all matters of business, including legal, accounting, entrepreneurial, etc. We offer this service at Start My Business.
Really, we’re not going to get into overly semantic discussions of theory here describing the difference between an idea and a concept.
In the business world, you can use the two terms interchangeably.
Although you might have an excellent business idea, there might be no opportunities to execute that idea.
Sometimes, the solution to that is to simply create those opportunities. Other times, it might appear that the opportunity isn’t there when it is actually just hidden.
An opportunity is a chance to gain an advantage. If you’re selling umbrellas and you see someone standing in the rain with no umbrella — that’s an opportunity.
The idea doesn’t need to come before the opportunity. Sometimes, people see an opportunity and then come up with a business idea.
If you sell umbrellas, but there isn’t a cloud in the sky, you can create an opportunity by renaming the umbrellas to parasols.
That way, you create an opportunity for people to buy a parasol and protect themselves from the sun. Or there might not be a cloud in the sky, but the forecast says rain is guaranteed within the next hour. That’s a hidden opportunity.
Think of the business model as the overall structure of the business — how it will make money, who it will target, where it will be located.
Some people refer to the business model as a business plan. That’s not correct.
A business plan is a very specific thing (which we’ll discuss in a moment), full of numbers and figures and marketing strategies. The business model can be summarised in short phrases.
Here are some examples of business models:
A business plan is a tremendously intricate thing that a company absolutely must have in order to obtain any sort of financial assistance to get off the ground.
A business plan would incorporate the business idea and model into it. A business plan really gets down into the nitty-gritty of everything.
How is the company going to make sales? How is it going to market itself? What is its precise product and service?
A business plan must include Profit and Loss predictions, Cash Flow predictions, a SWOT analysis, Milestones and KPIs, and so on.
The more funding your company might need, the more detailed your business plan must be. We offer a service to create a professional business plan for your business.
All businesses start off with a Business Idea or Concept. Sometimes that idea or concept is only half-formed, but it becomes clearer as one analyzes the available opportunities and starts working out one’s business model and business plan.
Business Ideas sometimes appear as a result of spotting an opportunity.
Often, a business idea is determined to be unsound because no opportunities exist. In this case, it is sometimes possible to create opportunities or to find hidden opportunities.
Opportunities continue to reveal themselves during a business’s lifecycle. Working out your business plan often reveals many hidden opportunities.
Once you have the business idea in place and some notion of the opportunities that are present or need to be created, you can start to work out the business model and the business plan.
Preparing a business plan is an enormous task, and often it is best done using professional advisers. That’s why it is absolutely vital to test your business idea thoroughly by pitching it to an expert before doing anything further with it.
Knowing if your business idea is fundamentally sound before embarking on the formidable task of preparing a full and complete business plan is crucial to prevent yourself from wasting endless time. But it is also crucial to save yourself a lot of heartaches. Nothing stings worse than believing firmly in an idea that simply cannot succeed but realising it too late.
You must test your business ideas out!
Our head of content, Julia has spent the past 20 years assisting entrepreneurs with all aspects of business launch and growth strategies in various industries around the globe.
A YouGov tracker from 7 April reveals that only 6 per cent of Brits feel it is “very easy” to find a job in the UK, and a meagre 5 per cent feel it is very easy to find a job in their local area. Twenty-three per cent feel it is “fairly easy” to find a job in the UK, and 22 per cent feel it is fairly easy to find one in their local area. A staggering 57 per cent feel it is “fairly difficult” or “very difficult” to get a job in the UK or in their local areas, with the remainder of participants responding that they don’t know. Interestingly, the age group which feels most pessimistic about work opportunities in the UK is the 18 – 24 age group, with a stunning 70 per cent answering that they feel it is “fairly difficult” or “very difficult” to get a job in the UK. The 25 – 29 age group doesn’t fare much better, with a whopping 59 per cent believing it’s difficult to get a job in the UK. The numbers were not much more positive before the coronavirus job crisis hit, when the tracker obtained responses back in February. The crisis seems to have mainly swayed respondents from the “Don’t know” group into the “Very difficult” group. It’s true. Getting a job will be far more difficult now that there is so much new and willing labour on the market as a result of mass layoffs. Companies will also be tight on cash as a result of weeks/months of closed doors, and likely unwilling to hire liberally. There is plenty of business out there A job is not the only way to make an income. There is business out there, plenty of business. It’s easy to feel overwhelmed, to give in to a sense of hopelessness, when reading the news. But it is important to note that the news reports on general facts, not specifics. They like big numbers which create the largest amount of shock and impact so their ratings can go up. But the best business is done on a one-on-one basis, not through big numbers and general facts. Business is done through personal meetings, handshakes (well, because of COVID-19 we might not do handshakes anymore, but you get what I mean). Business is usually begun with one phone call, one email. It is simply not true that “all the cash has dried up” in the world. Even during a recession, there are companies which thrive. During this pandemic, those companies which are able to provide services related to remote-working and online tools are more likely to come out of this crisis standing than others. Because they are delivering a service for which there is suddenly an unprecedented demand. Find a demand, deliver what people need It all comes down to finding a demand, finding what people need, and then figuring out how you can supply that need within your skill level and available resources. The world will not stop turning because business was forced to stop for several months. People need food, they need warmth, they need fun activities such as going to the cinema or visiting a clean park. There are some demands right there in that last paragraph: Clean spaces Food delivery Healthy food Safe travel to the cinema Etc. All it takes is a degree of ingenuity and a lot of guts to find and service demand. COVID-19 itself will also bring a whole array of required services and products into the market: Higher demand for hand sanitisers More demand for canned goods in case such an outbreak ever occurs again In Germany, there are plans afoot to build screens at grocery stores that separate the purchaser from the cashier and so reduce the risk of transmission of disease — that’s a lot of business for construction companies. How many business opportunities can you see in the above three points? Logistics, supply, e-commerce, delivery of goods, etc. If you stretch your imagination, you’ll see more. There’s the business to be made everywhere. There are demands and needs everywhere. Business, business, business. There is so much business waiting to be done in the world. The key is to: Find a demand Work out realistically how you can fill that demand Start delivering Deliver higher quality than all your competition Keep your eyes on your cash flow so you don’t overextend yourself Keep looking for more business and repeat the steps above Starting a business does not have to be expensive In fact, it is one of the cheapest things you can do these days — at least that’s the case with Start My Business. Not only that, but we’ll also throw in a logo, company branding, all the things you need to get working right now and start earning an income despite the weak job market. Tax filing, Companies House documents, day-to-day administration — all these things can add endless time to a new business’s daily routine. The administrative burden is probably one of the reasons many people choose not to start a business. That’s why companies such as ours are so vital. We simplify the process of starting a business so that all you need to do is: Find a demand Then deliver the goods It’s that easy. In this crashing job market, there really is very little choice in the matter. If you’re suddenly jobless and need a quick solution to get some income going, starting a new venture is the right move for you. And if you do get a job afterwards, at least you’ll have your own concern going in case things ever get tough again. It’s vital to have more than one income stream if you want to survive. About author Julia Richards Our head of content, Julia has spent the past 20 years assisting entrepreneurs with all aspects of business launch and growth strategies in various industries around the globe.
If you want to get any sort of funding for your business, you’re going to need to put together a brilliant business plan. The quality of your business plan will be the main factor determining whether you get that loan you need from the bank, or the investment you need from VCs or Angels. A business plan for startups is not merely an academic exercise. It is the action of looking deep into your business’s upcoming operations and working out precisely how to make them profitable. Doing a thorough business plan can open your eyes to potential failures you hadn’t seen before. But what exactly goes into a business plan? Your business plan can either cover the essentials, or it can be done extremely thoroughly and cover far and beyond what is usually required. If you want to interest Venture Capitalists and other investors, your business plan needs to contain as much easily-digested information as possible. Also, the fewer credentials you have, the more thorough your business plan will need to be. If you have a track record of starting unicorn after unicorn, sure, your name alone might be enough to inspire confidence. For the rest of us, and especially for first-time business owners, we need to do our homework. Here’s what goes into a business plan. Executive Summary of the Business Plan Your executive summary will contain an overview of the rest of the document. It is intended to give readers a broad-level look at what the rest of the business plan will contain. Your executive summary needs to be concise, and it needs to grab attention. Don’t use high-flown language to try and impress. Be professional and give hard facts and figures that potential investors will want to know about. The only reason a VC would put money into your venture would be if they felt they would get a return on it. Tell them the expected return in the executive summary so that their attention is piqued. Company Mission and Vision Statement Why are you starting your business? What social impacts will it have? What is the overall goal of your business, both for itself and society? Businesses which will bring value to their community and to the world itself are generally the types of businesses that interest investors. Sure, businesses are there to make money. Even charities need to make money. But that’s not the business’s mission (even if you thought it was until right now!) and it certainly isn’t your vision. The Mission Statement is the broad, overall goal or objective that your business wants to achieve, such as: “Provide the finest dining at rates everyone can afford.” And your Vision Statement states what effect you want your business to have on the world, e.g. “To elevate people’s self-esteem by showing them they are worthy of — and can afford — the finest meals”. Product/Service Overview What product or service is your business going to provide? This section will contain an overview of that product or service. The section needs to contain sufficient detail to show potential investors that your product is unique while, at the same time, being concise enough that they are not bored by excessive copy. Provide high-quality images if possible. USPs (Unique Selling Points) If you’re starting a new FinTech or MedTech company, what makes you different from the hundreds of others that already exist in this field? Instant payments? Cash App and Verge already do that. No Forex fees? TransferWise and Revolut beat you to it. Without USPs, you will never command the type of funding that turns startups into unicorns. The reason you won’t get the funding you need is the same reason your business will likely struggle. Businesses without USPs have nothing new to offer consumers so there would be no need for users to flock to you for your product or service. The USP doesn’t need to be some new, disruptive service. It could be as simple as “Offering the best customer service this side of the Atlantic!” You’ll need to back the statement up with credible facts and figures, perhaps also highlighting examples of perpetual shoddy or low-quality service from your competitors. Your USP must be, by definition, unique. Revenue Model How is your business going to make money? Ah, yes, now we’re really getting into the types of things that investors and banks want to know about! Will you make money on a monthly basis, through subscriptions or regular service? Is your income going to be locked to a single purchase per person per lifetime? If so, part of your revenue model needs to include the marketing that would be done to continue to gain new clients. Some points to cover in the revenue model section are: Target market Marketing (basic overview) Income sources Some examples of revenue models are: Licensing-based Interest-based Fee-based Recurring fee Arbitrage Markup There are many different ways to earn revenue. Tell your potential investors in this section which ways you’ll be using. Market Analysis You need to conduct research on your market. Starting a business or deciding to sell a product in the absence of knowing your market is as predictable as spinning the roulette wheel. This section should contain a detailed overview of the market you intend to do business in. Key points to cover in this section are: Market size Market value (e.g. purchasing power per capita, average household income, etc.) Buyer patterns Demographic information Market survey results Regulatory factors Barriers to entry Lead time SWOT Analysis A SWOT analysis is a fundamental tool to be used constantly in business. SWOT stands for: Strengths Weaknesses Opportunities Threats In SWOT analyses, Strengths and Weaknesses are generally considered to be internal. Opportunities and Threats are considered to be external. A SWOT analysis will allow you to take a straight look at your company’s position in relation to itself, its environment and its competitors. It is quite an eye-opener. A SWOT analysis is crucial to ensure that your business actually survives for the next ten years. Do it well, and do it often. Your Competitors You need to know who your competitors are if you want to have any hopes of succeeding. You need to have insight into their profits, business model and revenue model. This might require scouring public records or, for the bold amongst us, actually going to a competitor and outright asking them! You’d be amazed by how many would simply answer you! Much of the information regarding your competitors would’ve been flushed up in the SWOT analysis if it was done properly. Team Profile You need to give a high-impact description of your leadership team and other key figures. This section should be spiced up with professional profile photos of each team member. Don’t bore your readers by copying and pasting endless details from your leadership members’ respective CVs. Mention only the highlights and pay particular attention to aspects that might reassure potential investors that their money is being placed in competent hands. Don’t hesitate to namedrop. If you’re a tech startup and your C-suite has a combined experience of working at Google, Facebook, TransferWise, Square any other high-tech company, mention it — and do so in big, bold letters. Numbers talk. Add factual information about how each of your execs has increased revenue for the companies they previously worked at. If your team profile doesn’t have a high impact, you might want to consider bringing a few people on to nominally occupy key positions so as to reassure investors that their investment is secure. Also, talk about key employees — team leaders and managers. As for the general staff, give an overview of their skills. It also doesn’t harm to add some information about how employees think it’s so great to work at your startup. Marketing Strategy and Goals Next up on the business plan comes the Marketing Strategy. Part of this description must include costs, as well as who will be doing the marketing (i.e. in-house or external). Agencies are notoriously expensive when it comes to preparing a marketing strategy. As a rule of thumb, agencies tend to work better with large brands that have big budgets — TV campaigns and that sort of thing. (There are exceptions to every rule, and there are many agencies that provide stellar service at a great price, too.) Marketing for marketing’s sake is a fantastic way to waste money. Get some tabular data together showing how your marketing spend is going to result in ROI. Actually, break this down into a granular level — how many sales will Campaign A bring in? How many leads will Social Media Marketing Campaign B bring in? Delineate clearly what each goal of the marketing campaign will be. Ultimately, marketing should result in sales (and don’t let anyone tell you otherwise!), but there are subgoals to sales such as: Brand awareness Lead generation Social media shares And so on. Milestones and KPIs (Key Performance Indicators) There’s a well-known concept that often does the rounds on the internet: It takes ten years to be an overnight success. A marathon is not won in a blink. There are milestones to be passed and indicators that determine if the runner is on track to achieve their goal. If a runner is in the top twenty at mile ten of a twenty-seven-mile marathon, and the number one runner is just a few hundred yards ahead, that would be considered a great “Key Performance Indicator”. We know our runner has high chances of winning or at least finishing in the top ten. KPIs come in many flavours, and you have to define them to know if you are on track to achieving your goals. Some examples of KPIs are: Sales target Number of newsletter subscribers in the first year Social media shares per company blog post Engagement statistics Number of products manufactured. P&L Statement/Income Statement Ultimately, if your business does not start earning a profit, it will not survive. For ambitious startups that require a lot of capital before they can really get going, it can take several years before their P&L (Profit and Loss) statement shows them being in the red. A P&L statement (or Income Statement) shows your company’s revenue (“top line”), expenses and net income (“bottom line”) for a given period of time. It also shows precisely where the money is being spent and where it is being earned. The P&L Statement is the brass tacks of business, divorced from high-flown ideas and dreams. If you cannot translate your dream into profit, you will not survive. Even charities must turn a profit to keep going. P&L Statements are prepared as part of a company’s monthly or annual accounts, usually by an accountant. In the case of your startup’s business plan, however, these figures might need to be forecast. (If you are not just starting out, then the P&L Statement provided should be your actual P&L.) Forecasting a P&L Statement is a fairly gruelling administrative exercise, but a very necessary one. You need to know where you’re going to spend your money. And you must know where more money is going to come in from. The P&L links in deeply with the marketing strategy and KPIs. This is one of the key sections that serious investors will spend the most time on. If you need to hire the assistance of an accountant to put it together, then do it Cash Flow Statement Similar to the P&L Statement, this Cash Flow Statement will show projected cash if you’re just starting out. (For established businesses looking for further capital, the Cash Flow Statement in the business plan must be the company’s actual Cash Flow statement.) The P&L’s net income value is the first line in a Cash Flow statement. The P&L tells you how much money the company made. The Cash Flow Statement tells you precisely how much of that money is actually in the bank account. It is a key metric for investors when deciding whether or not to invest in your company. Sources and Uses of Funds Banks and investors want to know where your funds are coming from and what you intend to use them for. This is another one of those financial report sections that give investors serious numbers for them to determine if your startup is a safe bet for them. Optional — Investor Proposition If you’re putting together a business plan primarily for investors as opposed to for a bank, including an Investor Proposition section is crucial to winning those investors over. This section will contain an overview of what is in it for the investor when they invest in your company. It needs to be worded with finesse, and give potential investors a high-level concept of what their investment is going towards. Optional — Investor ROI It’s one thing to look at a Cash Flow Statement, and it’s another to delineate specifically what an investor’s ROI is going to be at the end of the day. GM, for example, is renowned for paying investors with borrowed money. How much return will you bring your investors, and by when? Optional — Investor Exit Strategy Investors feel more comfortable when there is a defined exit strategy in place for their investment. The exit strategy allows investors to liquidate their position if certain criteria exist. Exit strategies exist for businesses that are not profitable as well as for those who have achieved their goals, allowing investors to sell their stock or to remain in the company if they choose. Writing your business plan Your business plan needs to be written professionally, using proper English and good grammar. Many investors understand that entrepreneurs are not necessarily master graduates in English, but some might not. Maybe some fusty bank manager might look at you with disdain if there are too many commas out of place or if you repeatedly used an N-dash instead of an M-dash in your copy. We personally don’t feel that’s right. Unfortunately, whether it’s “right” or not, does not make it less true. Your business plan might be kicked back if it is written improperly. If you are weak in the English language, then hire a copywriter to put the content together after you provide them with all the facts and figures. Adding visual content to your business plan The purpose of your business plan is to get a message across. If your plan is written thoroughly, there will be a tremendous amount of text to consume. Serious investors will take the time to go through it if they are particularly interested in your concept, but even they might have a hard time if the plan comes across as “dull” or “boring”. And, as for investors on the border, they might not get beyond a few pages if the content is too text-centric. Spice the plan up with visuals that add to understanding what you are talking about. In the marketing and sales section, put a chart that shows a correlation between the two. In the product section, put in CGIs of what the product will look like. If you’re developing an app, add screenshots of the prototype. Use your judgment, and utilise just the right amount of visuals to add to understanding without making the business plan seem like a pitch deck. If you think it’s a lot of work, it is If you think this is a lot of work, that’s because it is! Building a business is not for the faint of heart. Seven out of ten businesses collapse in their first ten years. That’s a lot of broken dreams and failed hopes. It is also a lot of wasted money. Putting the work in now to get a thorough Business Plan put together is not merely an administrative exercise. A well-prepared business plan will open your eyes to elements that could hinder your growth now or later. If you need any help putting your business plan together, check out our business plan service for companies seeking funding, from bank loans to government grants to millions of pounds in investment. About author Julia Richards Our head of content, Julia has spent the past 20 years assisting entrepreneurs with all aspects of business launch and growth strategies in various industries around the globe.
With funding rounds ballooning, and investor expectations becoming higher, it becomes ever more vital for a startup to knock the socks off potential investors. The mainstay of funding is the business plan and the pitch deck (or the “Powerpoint presentation” for those old-school folks among us). A well-prepared and creative business plan is essential to capturing the attention of VCs who, unlike angel investors, want to know precisely “how much they’re going to get in return for their buck” if they invest in your startup. The plan itself must be well-thought-out and appropriately worded. But, often, it also needs to go that extra mile to make an impression and generate momentum and enthusiasm, in the startup’s early stages. In this blog, we’ll cover a few ideas on how to get creative with your business plans, as well as talk about a few other ideas on how to impress investors so that you can get your funding. We aim to completely answer the question, “What makes a business plan outstanding?” But first… What’s the difference between an angel investor and a venture capitalist? An angel investor is not the same as a VC. And the way you pitch one is quite different from how you pitch the other. An angel investor comes into play early in a startup’s existence, perhaps even when the startup is nothing more than an idea and two individuals in a garage. Angel investors are often friends or family who want to help you get off the ground, or simply people who believe strongly enough in an idea to give it the initial impetus it needs to generate momentum. Angel investments are comparatively “small”. An angel investment round might raise anywhere between $25,000 or $250,000, compared to the millions raised in later rounds. Angel investments tend to be much higher risk — the startup hasn’t built up a track record and likely doesn’t have any revenue streams of its own yet. Raising capital from an angel investor might be as simple as having a conversation in someone’s study over a drink. Venture Capitalist firms, however, work entirely differently. Venture Capitalism is a business model. Investing is what they do. Because the entire business model of a venture capitalist firm is built around obtaining return for their investments, they tend to demand seeing some numbers and financial forecasts which are rock solid. Fluffy graphics or cute multimedia presentations without any substance will get you nowhere with a VC. So, first and foremost, your business idea must be solid. It must be workable. The plan itself must have a real chance of succeeding. “Spicing up” a business plan can only come afterwards. Think of it as icing on a cake. The icing will get you to the cream in the middle. Make sure your unique business plan has cream in the middle. Multimedia Business Plans One amazing way to spice up your business plan and grab attention is to create a multimedia business plan. The plan could contain links inside it to video, sound and other immersive files on the web; or it could be done entirely in video format. Ideally, you would provide a text version of the plan as well, with time notations to show where the different sections begin. This way, if the VC wanted to jump forward to your Profit and Loss forecasts, they could simply open up the document, see the time notation on it, and forward the multimedia presentation to that point. Professional Video Using professional video in an outstanding business plan is a great way to capture attention. If a picture paints a thousand words, then a video records ten million. Think of a movie trailer — that’s the kind of quality you would need for each section of your business plan to really get your message across and show that you mean business. Not only is video a great way to capture attention, but a video is also easy to understand and grasp quickly. A professionally prepared video summarising each section of the business plan might be just the thing needed to turn mild interest into deep concentration. Interactive Business Plan Hire some web developers and create a fully immersive, interactive business plan. Put together calculators that allow VCs to see what their ROI or your P&L figures might be, depending on variables they input themselves, such as sales, marketing, production costs, etc. Cartoon Graphics Business Plan Maybe a ton of cartoon graphics might not work for the latest FinTech startup that wants to communicate how slick its new offering is. But it would certainly work for a startup that plans on revolutionising CGI movies or the way animated videos are done. Try and pepper your business plan with motifs of the specific product or service you are bringing to the world. The key is to transform that business plan from a flat, dull offering into something tangible and palpable. Animated Video Business Plan Animated videos are an excellent way to get a message across with minimal distractions and maximum impact. They are usually short, to the point and fun to watch. Using animated video to explain your service or products is a brilliant way to give VCs a summary of each section of your business plan without them having to lose a lot of time poring through it. This way, they would be able to quickly see your entire offering at a glance. Develop an app This is where the doors of creativity really start to open wide! Entrepreneurship is all about creativity. No one entrepreneur can come up with a single formula for success because success depends so much on the brilliance of that entrepreneur’s creative mind. Look at Elon Musk, for example. Or Steve Jobs, for that matter. These two people have changed the course of tech forever. The products they developed were nowhere on anyone’s radar until they actually came out, and now we can’t imagine living without them. The same is true for developing an app to encapsulate your business plan. But why stop only at the business plan? You could have the app send a notification to a VC every time you hit a financial milestone. You could use it to keep them intimately connected to your business, perhaps even offering them a secure chat option via the app where they could get a hold of you immediately for any questions they might have. The app could contain news, maps of where you have opened up branches, etc. Or the app could simply walk the VC through your business plan with interactive elements that allowed them to understand each section of the business plan better. These days, it is so simple to develop an app that there is no excuse to omit this option when trying to make your business plan stand out. VR Business Plan Why stop at multimedia! Virtual Reality Marketing has taken the world by storm, with more and more companies leveraging VR to add that extra oomph to their marketing campaigns. By hiring a VR company to generate a VR version of your product or service, you can immerse your potential VC in ways never dreamed of before. VCs will be able to see and experience your offering long before it is ready to go to market. Often, an entrepreneur and those closest to them are the only ones who truly see a company’s vision clearly. Indeed, a Vision Statement is a key part of any business plan. But why stop at a mere statement? Turn that vision into a reality by sending a Google Cardboard viewer along with your Business Plan so that the investor can view your VR presentation on their phone. That’s the finest way we know of to turn your vision into their vision. Business Plan Gamification Successful funding rounds are as much about the buzz as they are about the substance. One way to spice up your business plan and your funding round is to introduce gamification techniques to it. It’s important to keep this professional. VCs and Private Equity firms likely don’t want to play “the first one to invest gets a higher share” game. Still, they might indeed appreciate a certain degree of leaderboard status with commensurate recognition for their investments. This is a tricky one to navigate — one doesn’t want to alienate investors who have invested less than others. But, with some degree of creativity, a certain amount of gamification can certainly be introduced which turns the seed round — and the business plan driving it — into something hot and worth getting excited about. Infographics Utilise infographics to convey the essential elements of your business plan quickly. There are even automated tools that allows you to do this easily, although we personally recommend hiring some pros to create something unique to you and your brand. You could use an infographic at the start of each major section of the plan, or just one large infographic at the beginning, summarising all that will follow. Big-shot endorsements If a big name has endorsed your product, put a link to a video of them saying so at the start of your business plan. (Or, if you’ve opted for a digital plan, embed the video in it.) A “big name” is whatever your investor thinks it is, not necessarily a celebrity. (Although, a celeb endorsing your product might inspire confidence in investors that your product will initially sell well.) Remember that your investors want to be assured that: Your product has a future. They will make their return on their investment. To them, a “big name” might be another highly respected investor that took a gamble on you or your company and then won. Think of your business plan as a piece of art Art gets a bad rap, possibly because not enough artists are also business people. But art is everywhere in the business world, and the finest examples of marketing and salesmanship stem from programs and ideas that utilise artistic principles at their core. The Coca-Cola Christmas commercial of 2020 is a masterpiece of cinematographic art. It encompasses emotionally-driven storytelling and high-impact visuals to get a powerful message across to its viewers. Amazon likewise created a stunning 2020 commercial titled “The Show Must Go On”, drawing upon the same artistic skills in storytelling, empathy, human emotion and powerful impact. What does this have to do with business plans, you ask? The answer is twofold: Emotional Impact. Artistic Professionalism. Emotional Impact Business is as much about emotion as it is about numbers. Ultimately, businesses appeal to people, and one of th e things investors will look at is what emotional impact your product will have on the market. The surest way to impart that emotional impact is to generate that same emotional reaction in the investors themselves — you need to get them excited about your product. You need to get them feeling that same sense of drive and belief that this is something the world needs, and which customers will adopt. Imagine Amazon was an unknown and that it was about to go into a Series A round of funding. What impact would the “The Show Must Go On” ad have on potential investors? A huge one. And they would certainly put their money into a company that had put the time and thought into making something of that calibre. Why? Because the ad appeals to human emotion, and human emotion is a tremendous force when determining purchasing decisions. Human emotion drives the markets. Social media faux pas leading to emotional revulsion can have catastrophic consequences on brands and images. Just look at how much effort big corporations put into ensuring they are loved (human emotion) by the public. The key thing to understand here is that human emotion is a quality elicited by artistic presentation, which then results in tangible financial gains because of the public’s adoption of that product or service. Artistic Professionalism By now, you should’ve realised that raising “the big bucks” requires a large degree of professionalism. That doesn’t mean you need to necessarily walk around in a suit all day — but it also doesn’t mean that you don’t. DIY might work to get your mum and dad and maybe the elderly neighbour to angel-invest in your garage product, but those homebaked Canva images can only get you so far when it comes to raking in the big cash for investment. You will eventually need to hire pros. Indeed, preparing a business plan isn’t only up to the C-suite and the accountant. It’s also up to the marketing department. After you and the finance team have crunched the numbers and put together your forecasts, bring in the marketing team or even an external agency to finesse that plan into something that will elicit an array of powerful human emotions. Bring people in who will take those numbers and work out the best way to present them artistically and professionally. Think of your business plan as a first-date It helps to think of your business plan, pitch deck and live-event startup pitch as a first-date. Maybe the investors have heard of you; maybe they haven’t. But it’s a date — they want to fall in love, and they want to find “the one”. Love is all about the burgeoning excitement in the beginning which will carry you through the hard times which inevitably appear years down the line. Your business plan and startup pitch are the first date. You need to show your best side, try and impress, save the talk about your incurable snoring until later on. Your startup’s snoring won’t matter that much if there are plenty of other things to love about it. But if you put the snoring up front and centre, you’re unlikely to go on date number two. Yes, it’s a lot of work. Yes, it might feel like it’s all just PR and that your once-pristine dream of changing the world is being reduced to the shady give-and-take which drives our capitalistic world. Alas, that is business. And, if you want to change the world, you need to play by the rules of business. By all means, keep your dreams, and even try to convey those dreams to investors using artistic presentation. But understand that seeing those dreams come to life will require you to write a hard-selling business plan, deliver spectacular pitches, appeal to people’s emotions and talk in terms of money and return on investment. If you can talk the language of business, you can gain support for your business. If you do it with finesse, and you’ll win. About author Julia Richards Our head of content, Julia has spent the past 20 years assisting entrepreneurs with all aspects of business launch and growth strategies in various industries around the globe.
So, you had a great business idea in the middle of the night, and now you’re ready to quit your day job and start a new business! But is the business idea that great? And is the idea backed up by a workable business model and business plan? Does the business idea furnish good opportunities? Goodness me — are you confused yet? Well, hopefully, you won’t be after reading this article. What is a business idea? In the usual business terminology, a business idea refers to the overall notion of what your business is going to be about. At the stage of an idea, a business has no real plan behind it. Think of the business idea as the seed from which the central model and opportunities will grow. The basic idea needs to be one that has potential for growth. Sometimes, the idea is sound, but the current landscape won’t allow for growth — this can be likened to a perfectly good seed that wouldn’t grow in the desert. For example, opening up a restaurant might be a great idea, but doing it during a nationwide lockdown won’t allow for initial growth. Every business idea needs to be tested. The best way to test your business idea is to pitch it to a specialist consultant who is experienced in all matters of business, including legal, accounting, entrepreneurial, etc. We offer this service at Start My Business. Business Idea vs Concept? Really, we’re not going to get into overly semantic discussions of theory here describing the difference between an idea and a concept. In the business world, you can use the two terms interchangeably. Business Idea vs Business Opportunities? Although you might have an excellent business idea, there might be no opportunities to execute that idea. Sometimes, the solution to that is to simply create those opportunities. Other times, it might appear that the opportunity isn’t there when it is actually just hidden. An opportunity is a chance to gain an advantage. If you’re selling umbrellas and you see someone standing in the rain with no umbrella — that’s an opportunity. The idea doesn’t need to come before the opportunity. Sometimes, people see an opportunity and then come up with a business idea. If you sell umbrellas, but there isn’t a cloud in the sky, you can create an opportunity by renaming the umbrellas to parasols. That way, you create an opportunity for people to buy a parasol and protect themselves from the sun. Or there might not be a cloud in the sky, but the forecast says rain is guaranteed within the next hour. That’s a hidden opportunity. Business Idea vs Business Model? Think of the business model as the overall structure of the business — how it will make money, who it will target, where it will be located. Some people refer to the business model as a business plan. That’s not correct. A business plan is a very specific thing (which we’ll discuss in a moment), full of numbers and figures and marketing strategies. The business model can be summarised in short phrases. Here are some examples of business models: Apple: Providing highest-in-class tech and hardware for personal use, and following it up with stellar service. Uber: Empowering the average person on the street to earn a wage by driving people around safely, and at a far lower price and in a more convenient way than traditional transport methods. Airbnb: Similar to Uber, but for accommodation. Business Idea vs Business Plan? A business plan is a tremendously intricate thing that a company absolutely must have in order to obtain any sort of financial assistance to get off the ground. A business plan would incorporate the business idea and model into it. A business plan really gets down into the nitty-gritty of everything. How is the company going to make sales? How is it going to market itself? What is its precise product and service? A business plan must include Profit and Loss predictions, Cash Flow predictions, a SWOT analysis, Milestones and KPIs, and so on. The more funding your company might need, the more detailed your business plan must be. We offer a service to create a professional business plan for your business. Bringing It All Together All businesses start off with a Business Idea or Concept. Sometimes that idea or concept is only half-formed, but it becomes clearer as one analyzes the available opportunities and starts working out one’s business model and business plan. Business Ideas sometimes appear as a result of spotting an opportunity. Often, a business idea is determined to be unsound because no opportunities exist. In this case, it is sometimes possible to create opportunities or to find hidden opportunities. Opportunities continue to reveal themselves during a business’s lifecycle. Working out your business plan often reveals many hidden opportunities. Once you have the business idea in place and some notion of the opportunities that are present or need to be created, you can start to work out the business model and the business plan. Preparing a business plan is an enormous task, and often it is best done using professional advisers. That’s why it is absolutely vital to test your business idea thoroughly by pitching it to an expert before doing anything further with it. Knowing if your business idea is fundamentally sound before embarking on the formidable task of preparing a full and complete business plan is crucial to prevent yourself from wasting endless time. But it is also crucial to save yourself a lot of heartaches. Nothing stings worse than believing firmly in an idea that simply cannot succeed but realising it too late. You must test your business ideas out! About author Julia Richards Our head of content, Julia has spent the past 20 years assisting entrepreneurs with all aspects of business launch and growth strategies in various industries around the globe.
Knowing how to find the perfect name for your business is crucial to ensuring your business’s future success. Not only must the name be memorable and catchy, but it also needs to be checked against words in other languages to ensure that it doesn’t express something silly. For example, one of Vauxhall’s first vehicles was called the Nova. The car was manufactured in Spain but the word “Nova” in Spanish means “Go slow” or “Not working”. Finding a name for a business is not only about brainstorming a business name. You need to ensure that you have gone through all possible business name ideas, and had them vetted against trademark infringements, as well as put through a language filter. In this article, we will give several tried and tested tips to find a name for your business. Think long-term The goal of any business is to grow. Many times, a business will start off in one area and then expand over to multiple areas. Google is an excellent example of this. They started out as search but now offer email, mobile phone software, mapping, etc. Montblanc has a similar story. They used to sell pens and only pens. Now they sell various luxury gifts for male and female business executives. If Montblanc’s name had been “Mont Pens”, they would never have been able to expand into the broader product range as they did. Avoid hard-to-spell or long names A good company name should roll off the tongue. These days, a company name should also be something that people hear and can then type into their browsers, simply adding a “dot com” to the end of the name. Dot Com still dominates the world of web addresses by far. If your name is too long or difficult to spell, people won’t be able to intuitively visit your website to know more. Ensure the name has a ring to it The name must “sound” good when people say it. Consider these brand names: Twitter Google Nike Facebook Instagram Mitsubishi Every one of them has a unique feel and flavour to it. Every single one of them has a certain pleasing sound and ring to it. Sure, much of that has to do with the fact that many of these brands are household names, and we’ve grown accustomed to their sound and meaning. But part of their growth is the fact that their business names were well chosen. Check the meaning of your name in other languages Whether you’re IKEA or Reebok, not knowing what your brand or product name means in other languages can have catastrophic (and sometimes hilarious) consequences. IKEA released the “Fartfull” desk once upon a time. And Reebok thought that “Incubus” might be a good name for women’s running shoes. (Say what!? Yes, you heard that right. And that awful name meant they had to eventually take the shoe off the market.) This is bad enough for product names. It is completely devastating for brand and company names. To be entirely safe, you might want to get some help in naming your business. Check the availability of the name on the internet Ideally, you need to name your business in such a way that the domain of the business can be YourBusinessName.com. This might mean coming up with slight spelling variations, but it is critical to have a domain name which matches up with your business name. Some people get around this by looking for a .co.uk or other ending for their domains. While this is indeed an option (and should be done anyway), it is not a great one. A rule of thumb is that, if the .com domain does not exist, you might need to consider a different name. Yes, that reduces the options a lot. But our next tip might help you with that. Brainstorm multiple company names It’s better to choose a name from many options than from only one or two. Call some friends and family over and have a brainstorming session together. Bring out the snacks and get the creative juices flowing. Or, if they can’t come over because a lockdown or other reason, have a video conference. Ask an expert for assistance It can indeed get overwhelming, which is why sometimes it’s vital to ask an expert for assistance. Our business naming service is one option for finding a name for your business. Use a name generator tool If you don’t have time, try using a name generation tool such as Shopify’s tool or Naming.net. This website has other choices. Of course, you do need to triple-check names from automatic naming tools to ensure the name is not already being used by someone else. Convey a positive meaning It’s important to convey positivity with your name. Even if people don’t buy from you the first time they see an ad of yours, they will start to adopt an idea of your business from the advertising you do. It’s important to build a positive image in people’s minds regarding your brand to make them more amenable to purchasing from you in the future. Having a positive meaning in your business name goes a long way to ensuring this. Think visual Finally, try and imagine what your name will look like visually. How might it appear on a business logo or banner ad? Designing banner ads and business logos is something best left to the pros, but that doesn’t mean you should completely disassociate yourself from it. Try and, at least, visualise how that name might look on your branding materials when coming up with the business’s name. About author Julia Richards Our head of content, Julia has spent the past 20 years assisting entrepreneurs with all aspects of business launch and growth strategies in various industries around the globe.