A Vision Beyond Virtual - Entrepreneurship.org
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Ode’ to Cecil!
4 years ago
Monday, February 22, 2010
Thursday, February 18, 2010
Professional Answers to Your Questions (A Bit of Self Promotion)
Have you recently started a business? Do you have questions? Do these questions sound familiar?
How do I write a business plan that will get a lender or investors attention?
How do I create a financial model or financial projections that mean something?
How should I sell my product, direct, through distributors, on-line VARs or manufacturer’s reps?
Who should I hire first, second and third?
Who can I trust?
I have a business plan but how do I implement it?
How do I market my product with little cash?
How should I price my product?
How big is my market, is it growing or declining?
When and how should I role out my product?
I have a good product but how do I best brand it?
There are dozen more questions like this depending upon the stage of your small business. Each of these questions has a different answer and each take a different amount of time depending upon the situation. That’s why canned programs by so called business consultants don’t work. There are thousands of people hawking their “method” to answer any number of these questions. I have seen promotions where someone will write you a business plan for $1,000 and others that will provide a better one for $5,000. One size fits all! What if you’re the company that needs a $5,000 plan but buys the $1,000 one? Or perhaps you have a simple business that could get a good business plan for $3,000 but pays $5,000. Marketing plans, patent searches, and financial models at a “one price fits all” rate are really “one price fits none.”
I am not saying that the price needs to be open ended or based on an hourly rate. We at Entrepreneurial Advisors will visit with you to determine what is needed and then quote a price. Each client is special and each engagement is customized to meet the needs of the particular business. If you have questions or just need assistance sorting things out. Even if you know what to do but do not have the time or expertise to complete the task, give us a chance to talk with you. The initial meeting or call is always free and we can usually work out a plan if you need to pay over time. We won’t always have the answers and we won’t attempt to do work that is better completed by an attorney or CPA but we can many times refer you these resources. Even if your questions are what fork to use at an important dinner or what to wear to a fund raising gala we can help or find someone who can.
We can be reached at entrepreneurialadvisor@live.com, or leave contact info in the comment section below or on our Facebook page. Thank you.
How do I write a business plan that will get a lender or investors attention?
How do I create a financial model or financial projections that mean something?
How should I sell my product, direct, through distributors, on-line VARs or manufacturer’s reps?
Who should I hire first, second and third?
Who can I trust?
I have a business plan but how do I implement it?
How do I market my product with little cash?
How should I price my product?
How big is my market, is it growing or declining?
When and how should I role out my product?
I have a good product but how do I best brand it?
There are dozen more questions like this depending upon the stage of your small business. Each of these questions has a different answer and each take a different amount of time depending upon the situation. That’s why canned programs by so called business consultants don’t work. There are thousands of people hawking their “method” to answer any number of these questions. I have seen promotions where someone will write you a business plan for $1,000 and others that will provide a better one for $5,000. One size fits all! What if you’re the company that needs a $5,000 plan but buys the $1,000 one? Or perhaps you have a simple business that could get a good business plan for $3,000 but pays $5,000. Marketing plans, patent searches, and financial models at a “one price fits all” rate are really “one price fits none.”
I am not saying that the price needs to be open ended or based on an hourly rate. We at Entrepreneurial Advisors will visit with you to determine what is needed and then quote a price. Each client is special and each engagement is customized to meet the needs of the particular business. If you have questions or just need assistance sorting things out. Even if you know what to do but do not have the time or expertise to complete the task, give us a chance to talk with you. The initial meeting or call is always free and we can usually work out a plan if you need to pay over time. We won’t always have the answers and we won’t attempt to do work that is better completed by an attorney or CPA but we can many times refer you these resources. Even if your questions are what fork to use at an important dinner or what to wear to a fund raising gala we can help or find someone who can.
We can be reached at entrepreneurialadvisor@live.com, or leave contact info in the comment section below or on our Facebook page. Thank you.
Thursday, February 11, 2010
Projecting Sales, One Customer at a Time
I was reading an article today by Jay Conrad Levinson, the Author of “Guerrilla Marketing” and over a dozen other “guerrilla” business books, when it struck me that he was approaching sales the same way I had been advising entrepreneurs to approach sales projections in their financial pro forma.
In his article, Mr. Levinson said, "There is no need to hit a home run the first time your at bat. A single will do, then another single, then another, one following each other, none grandiose, but all bringing you closer to your goal."
So many people want to approach sales projections in a business plan pro forma by finding out the size of the market and projecting they will capture what to them seems like a reasonable share of that market. The problem is, business doesn’t work that way. It is extremely unlikely that one will get 5% of the market. In order to succeed long term in most markets you must be market leader meaning that 5% percent is not enough. To do this you must have a superior product and model comapred to that of the competition and then you're likely to get anywhere from 20%-50% of the market but not 5 percent. It’s possible to stay small and under the radar of the major competitors but then you are likely to have only a fraction of that 5% market share. All of this is academic anyway because picking a percent of the market as your sales projection is a formula for not meeting, let alone exceeding projections.
Another approach inexperienced entrepreneurs use is to decide they will slay the giant. It goes something like this; “If we could just get our cough syrup into all the Walgreen’s in the country we would be $100 million revenue company.” But you won’t, at least not for several years!
When well run, established companies forecast sales they use a pipeline approach. In other words, they look at what is in their pipeline, what the chances are of closing each lead or prospect in that pipeline and how long it will take to close each deal. Farther out they look at niches they would like to penetrate, who the players are in that niche and how and when they will approach each of them. In other words, they build their forecast one single at a time. They don’t decide that next year they will supply Honda with all their transmissions or get the contract for 100% of Home Depot’s lumber needs.
Pro forma sales projections should be approached the same way that the established company approaches next year’s sales – one customer at a time. First look at your products position in the market. Is it high end, low end or somewhere in between? Secondly, who needs your product the most? Which of these companies are most likely to give you an audience? Should you start with local customers and work your way into regional, then national sales, or is it necessary to go national immediately? Who will you approach first, how long do you think it will take to close (add a couple of months to that) and what is the likelihood that you will close the deal. Who’s the second customer you wish to approach, “then another, one following each other, none grandiose, but all bringing you closer to your goal."
In his article, Mr. Levinson said, "There is no need to hit a home run the first time your at bat. A single will do, then another single, then another, one following each other, none grandiose, but all bringing you closer to your goal."
So many people want to approach sales projections in a business plan pro forma by finding out the size of the market and projecting they will capture what to them seems like a reasonable share of that market. The problem is, business doesn’t work that way. It is extremely unlikely that one will get 5% of the market. In order to succeed long term in most markets you must be market leader meaning that 5% percent is not enough. To do this you must have a superior product and model comapred to that of the competition and then you're likely to get anywhere from 20%-50% of the market but not 5 percent. It’s possible to stay small and under the radar of the major competitors but then you are likely to have only a fraction of that 5% market share. All of this is academic anyway because picking a percent of the market as your sales projection is a formula for not meeting, let alone exceeding projections.
Another approach inexperienced entrepreneurs use is to decide they will slay the giant. It goes something like this; “If we could just get our cough syrup into all the Walgreen’s in the country we would be $100 million revenue company.” But you won’t, at least not for several years!
When well run, established companies forecast sales they use a pipeline approach. In other words, they look at what is in their pipeline, what the chances are of closing each lead or prospect in that pipeline and how long it will take to close each deal. Farther out they look at niches they would like to penetrate, who the players are in that niche and how and when they will approach each of them. In other words, they build their forecast one single at a time. They don’t decide that next year they will supply Honda with all their transmissions or get the contract for 100% of Home Depot’s lumber needs.
Pro forma sales projections should be approached the same way that the established company approaches next year’s sales – one customer at a time. First look at your products position in the market. Is it high end, low end or somewhere in between? Secondly, who needs your product the most? Which of these companies are most likely to give you an audience? Should you start with local customers and work your way into regional, then national sales, or is it necessary to go national immediately? Who will you approach first, how long do you think it will take to close (add a couple of months to that) and what is the likelihood that you will close the deal. Who’s the second customer you wish to approach, “then another, one following each other, none grandiose, but all bringing you closer to your goal."
Friday, February 5, 2010
Is Food Production the Biggest Challenge of The Next 25 Years?
The estimated world population at 10:00 a.m. CST, February 5, 2010 is roughly 6.8 Trillion by most projections. It has increased more than two and a half times from the 2.5 billion humans on earth in 1950. During that 60 years, we relied on genetic improvements, more effective pesticides, herbicides and fertilizers and improved land production practices. We also put millions of acres of once natural forests, prairies and wetlands through clearing and draining projects.
This came at a huge future cost to the environment. Dr. Jeffrey Sachs, Director of the Earth Institute at Columbia University may have put it best when giving his presentation to the World Food Prize’s Norman E. Borlaug International Symposium. He stated and I quote:
“It (the food industry) is the number-one sector of greenhouse-gas emissions in the world. This is because around 18 percent of greenhouse-gas emissions come from clearing rain forest and other forest for pastureland and cropland. And roughly another 12-15 percent reflect the carbon dioxide of fossil-fuel use in food production, the methane from our rice paddies and livestock, and the nitrous oxides that come from the now more than 100 million tons of nitrogen-based fertilizers, which we absolutely need to feed the planet but which have fundamentally altered the nitrogen flux and are a major independent source of greenhouse gas forcings….
What food does is pervasive in terms of its anthropogenic impacts. The food question is the number-one driver of habitat loss for other species. And there’s hardly a class of species around the world that is not suffering a significant decline of abundance because its habitat is being taken by humanity for the purpose, essentially, of feeding ourselves.
Water stress I’ve already mentioned; [it’s] multifaceted, whether it’s the 50 or 60 thousand dams on major rivers around the world, whether it’s the groundwater depletion, whether it’s the evanescent use of glacier melt, which will no longer be available in 40 or 50 years. This is essentially the key input, of course, to food production. And the food sector, to put it conversely, is by far the leading consumer of freshwater around the world.
The food industry is the source of the nitrogen and phosphorous loading that affects what we know in the Mississippi and in the Gulf of Mexico as the dead zone. But now science has shown that [there are] about 130 significant hypoxic zones in estuaries on virtually every populated river system around the world.”
We cannot continue business as usual. Most population projections estimate that there will be 9 trillion human inhabitants sometime between 2040 and 2050! This is another 2.2 trillion mouths to feed with very little quality land remaining to clear or otherwise make fit for agricultural production, most of this population in undeveloped or developing countries. It also means that while those that can afford natural, organic and local foods can opt for them, it is not the solution to our growing food demand. It would of course help the stress on food production if we all ate less meat, but that by itself is not enough.
Of course, like all major problems there are incredible opportunities. The world will need even better genetics, more environmentally friendly pesticides, herbicides and fertilizers and lower impact farming practices. This will all need to be done in a relatively short time period by scientific standards, probably in the next twenty years. Those that can discover and commercialize these opportunities in a timely manner stand to make millions of dollars.
I believe that at some point the angel and venture community will see the opportunity in agricultural and food technology industry and begin focusing on it. Those that do it sooner than later will be the big winners. What is your perspective?
This came at a huge future cost to the environment. Dr. Jeffrey Sachs, Director of the Earth Institute at Columbia University may have put it best when giving his presentation to the World Food Prize’s Norman E. Borlaug International Symposium. He stated and I quote:
“It (the food industry) is the number-one sector of greenhouse-gas emissions in the world. This is because around 18 percent of greenhouse-gas emissions come from clearing rain forest and other forest for pastureland and cropland. And roughly another 12-15 percent reflect the carbon dioxide of fossil-fuel use in food production, the methane from our rice paddies and livestock, and the nitrous oxides that come from the now more than 100 million tons of nitrogen-based fertilizers, which we absolutely need to feed the planet but which have fundamentally altered the nitrogen flux and are a major independent source of greenhouse gas forcings….
What food does is pervasive in terms of its anthropogenic impacts. The food question is the number-one driver of habitat loss for other species. And there’s hardly a class of species around the world that is not suffering a significant decline of abundance because its habitat is being taken by humanity for the purpose, essentially, of feeding ourselves.
Water stress I’ve already mentioned; [it’s] multifaceted, whether it’s the 50 or 60 thousand dams on major rivers around the world, whether it’s the groundwater depletion, whether it’s the evanescent use of glacier melt, which will no longer be available in 40 or 50 years. This is essentially the key input, of course, to food production. And the food sector, to put it conversely, is by far the leading consumer of freshwater around the world.
The food industry is the source of the nitrogen and phosphorous loading that affects what we know in the Mississippi and in the Gulf of Mexico as the dead zone. But now science has shown that [there are] about 130 significant hypoxic zones in estuaries on virtually every populated river system around the world.”
We cannot continue business as usual. Most population projections estimate that there will be 9 trillion human inhabitants sometime between 2040 and 2050! This is another 2.2 trillion mouths to feed with very little quality land remaining to clear or otherwise make fit for agricultural production, most of this population in undeveloped or developing countries. It also means that while those that can afford natural, organic and local foods can opt for them, it is not the solution to our growing food demand. It would of course help the stress on food production if we all ate less meat, but that by itself is not enough.
Of course, like all major problems there are incredible opportunities. The world will need even better genetics, more environmentally friendly pesticides, herbicides and fertilizers and lower impact farming practices. This will all need to be done in a relatively short time period by scientific standards, probably in the next twenty years. Those that can discover and commercialize these opportunities in a timely manner stand to make millions of dollars.
I believe that at some point the angel and venture community will see the opportunity in agricultural and food technology industry and begin focusing on it. Those that do it sooner than later will be the big winners. What is your perspective?
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