The Best Business Plans

The Best Business Plans

Tempting fate and fortune

Venture capitalists, or VCs, receive thousands of business plans a month, so they only have time and inclination to consider the most convincing proposals. Make sure yours gets to the top of the pile.

Get to the point

Keep things short. A business plan should be no longer than 20 pages. And grab attention straight away. VCs will pretty much scan the plans on their desk, so cut to the chase quickly, giving all the main facts right at the start.

Your executive summary should tell six chief points in as little space as possible: your venture plan, your proposed market's size and growth, your strategy to resist competition, your team, your unique selling points and – the reason you're here – your required funding.

You've got to convince VCs that you are the right people in the right market at the right time. The rest of your business plan will then back up these assertions.

A sense of direction

Whatever you do, don't ask for a preliminary meeting to chat about ideas. VCs expect you to have a firm picture of where you are taking your company and what you need. Make sure you have done every last piece of your homework.

A decent business proposal

To begin the main body of your plan, give a clear outline of what your company intends to do: the short, medium and long term direction. Long term plans should be ambitious. Venture capitalists like to see large potential markets. So consider expansion, be it into other countries or into other products and services. And show commitment to the company. Leaving your job and putting your own money into the project are significant gestures. VCs like to see 100 per cent dedication and they can spot business planners who are merely out to make a quick buck.

Keep the money rolling in

Explain exactly how the company intends to generate revenue. It may sound obvious, but ensure that your model is not based on weak streams such as banner ads on your site. And don't rely on just one avenue. Consider as many different revenue-generating models as possible. If you have any guaranteed revenue streams already in place, then mention them. Keep this section basic. Forecasts and assumptions can wait until your financial projections.

Suss out the competition

Examine both existing and potential competition, bearing in mind real barriers to market entry. Show detailed research and statistics to indicate expected levels of demand. And explain your route to market including a marketing strategy. If VCs decide to invest in your project, they will do their own research of the competition, so give a full and candid disclosure from the outset.

Pick your teammates

Include brief CVs for your proposed management personnel. Also state which further team members are needed, although saying this, your main board positions should all be filled. VCs will not be impressed if you have to go shopping for crucial executives. They may decide to put one of their own nominated directors on the board but they won't want to half fill it for you. Also, if you're an essentially young team, try to get some older contingent on the board as non-executive directors, one or two people with wide business and IPO experience.

Make connections

Where possible, link up with other companies that can add value to your business. Large blue chip companies will look good in your plan, although alliances can range from mutual click-throughs on another company's website to free advertising in exchange for equity.

Know your worth

If similar companies have recently floated or been bought out by trade buyers, include figures to show the potential valuation of your business.

It's okay to gamble

Be frank with VCs from the start. Pinpoint all possible risks, pitfalls and weaknesses. As long as you demonstrate ways to combat or minimise them, you will be given credit for your realism and determination. All ventures have risks and VCs are in the business of taking them. They will not only appreciate your honesty but, if you say that there are no risks, they'll think you're being naive.

Show your workings out

Present a financial forecast as a projected profit and loss and cash flow account. Give anything between a three and five-year period that's sufficient to show a profit, with justification for each assumption made in notes to the accounts. Use evidence, such as independent market research, where possible. If no profit is forecast for longer than five years, you are unlikely to receive finance.

Time it right

Be realistic with timing. Don't ask VCs to sign a cheque at your first meeting. Although interested VCs move quickly, the legals will take at least a month. And if you do get an offer of investment, don't spend too much time wrangling over the equity. By all means be greedy but don't waste time. Some companies can increase in value 30 per cent month on month so it is not worth standing still for the sake of 1 or 2 %.

Hiring Short Termers

Hiring Short Termers

Tailor the talk

Contractors are good at interviews. They interview more often than their permanent, full-time counterparts and they learn to market and sell themselves very effectively. If you're interviewing contractors or freelancers for a project, you need to be equally savvy. In particular, you should tailor certain questions for the contract nature of work and, indeed, the contract personality.

Saying this, there are lots of questions that will be the same whether you're interviewing freelancers or candidates hoping to fill permanent roles. The key with freelancers is to adopt a combination of both conventional and contractor-specific interview techniques.

Have a plan

As with any interview, you must plan well. Have your questions formally prepared and word them to be open ended so that candidates are forced to elaborate without being coached. You have a short amount of time to get to know a complete stranger who could be critical to a very big project, so you want to hear what they have to say – and lots of it. Let them speak for the vast majority of the interview. You, meanwhile, should be poised for some serious note taking.

Project history

Think project experience rather than work experience. The companies for which contractors have worked are relevant, but the specific project experience they bring to the table is more important.

What form did their previous briefs take and what were the timeframes?

Freelancers, by nature, should be adaptable workers, but it doesn't hurt to make sure. Can they work to incomplete creative briefs or do they need more direction? Can they pick things up quickly and work to tight deadlines? Or do they need time to absorb information and settle in?

What did they enjoy about particular projects?

Get to know their tastes. Their likes and dislikes may reveal their suitability and potential enthusiasm (or apathy) for your project.

What was their specific role on each project?

How many people did they supervise? Can they explain the position they filled and its context within the project as a whole? Are they team players and do they play their parts responsibly? Or are they loners best left to their own devices?

How did each project impact the company for which they were working?

A huge giveaway if this renders them speechless. And a significant insight into candidates' interest in, motivation for and appreciation of the impact that a project has on a company. Do these consultants actually care about the overall effect of their work? Or do they just show up each day without thinking about the bigger picture?

What did they do when there was a hitch on a project?

How do these candidates respond to problems? Do they rise to a challenge or are they easily defeated? Perhaps they are bluffers who sweep discrepancies under the carpet in the hope that no one will notice before they are gone. After all, they could be walking away from the job with no repercussions to face but a nice fat cheque.

Personal training

The best consultants never stop learning. Experienced contractors should be used to arranging and financing their own professional development, skills training and work experience, as these lead to better projects and higher fees.

What training have these candidates undertaken?

Are they truly committed to increasing their skills and knowledge? If applicable, ask for certificates to verify claims to training courses.

Do they belong to any professional associations?

A way of separating the professionals from the newcomers to contracting is to determine how effectively they network in their industries. Experienced CreateWork members usually take advantage of the benefits, leads and resources offered by many professional associations.

Money matters

Arguably the most unpleasant part of any interview is the issue of money. Contractors' pay schedules are unique. Non-payroll employees have different expectations altogether, so you should establish what these are so that you are both clear.

What are their rates and how do they invoice? Do they charge on an hourly, daily or per project basis? Are you billed weekly, biweekly or monthly?

Contractors' rates and billing terms may or may not be negotiable, so remember to cover this important ground.

References

Candidates' project experience is critical to your decision so, if you're serious, start checking their references. If contractors have worked on a number of briefs for the same company, ask for the names of a few project managers.

While managers offer an important perspective, coworkers can provide equally valuable insights into candidates' work ethics and skills. Try to track down some of these insights.

At the end of the day, hiring contractors is often a case of trial and error. But, with a thoughtfully planned and thorough interview, you can at least minimise the trials and, more importantly, the errors on short term projects that you can't afford to get wrong.

Latest Inside The Net

Latest Inside The Net

Business intelligence

Spying on the competition has never been so easy. And, as with so many things these days, we have the internet to thank.

Keeping tabs on the opposition is all part and parcel of running a business. Whether you're hunting around for the next creative director move, checking out the contest at a forthcoming pitch or wanting to know the outcome of a juicy copyright suit involving the agency down the road, the web is your trusty new telltale.

It's all relative

It's one thing having your own brilliant strategy, but business only works within a context. You need to know what's going on in the creative world around you to be able to make decisions as to your next professional move. What are the latest trends and customer habits? Which companies are proving successful and why are others falling to pieces? And looking to the future, who's hiring who and what impact is it going to have? Where is technology going and in which of the newest systems is it worth your investing?

From now on, you needn't rely on weekly magazines or intuition to keep watch of other industry players or make crucial business decisions.

Stock up on scandal

Company Sleuth bills itself the internet's top covert information specialist, whose aim is to uncover clues as to companies' unannounced plans. Until recently you could log on to www.webfarming.com, pay a subscription and receive daily email reports giving the business, internet and financial dealings of up to ten selected public companies. These days, Company Sleuth focuses on what it calls stock exchange news and stock watch news - still useful tools for a little snooping around. And the site also has links to Elibrary.com's database of news articles and Encyclopaedia.com's reference site.

Hoover's, at www.hoovers.com, part of Dun and Bradstreet, is a powerful business research database & sales acceleration platform / directory that details sales leads & industry insights, financial and executive activities of public, private and government-run enterprises around the world. While Yahoo! Finance now an Oath brand provides everything from press releases to insider stock trades.

Internet hearsay

Web message boards, such as the one on Yahoo! Finance and Raging Bull's online partnership, should be viewed with a pinch of salt. Saying this, they sometimes yield the odd gem, such as discarded business models or defections among workers (it is largely disgruntled employees who spend their time posting messages on the web).

If you want to nose through records compiled by public offices and agencies, KnowX.com has both search and research tools to take you to what you want to know. With user fees varying according to the kind of records you request, the site will show you companies' real estate holdings, stock ownership and assets as well as helping you learn about lawsuits, permits and bankruptcies.

Job spotting

Creatives have long since utilised the web's offerings on the job hunt front. But online job search tools aren't only for people looking for employment. They're for astute business detectives trying to keep on top of their competitors' movements. Websites such as CareerPath.com, HotJobs.com and Jobsearch.com, to name just a fraction of what's out there, must be trawled if you're going to find out that your rival agency is advertising for a project leader who's going to take its creative strategy to the next level with a client/server ecommerce application. There. You've learned more than you thought you would. Job openings are among the best inadvertent sources of details about company strategy.

And then there are Vault.com and WetFeet.com, which, though designed primarily for job seekers, offer insider information on companies as well.

So don't worry if you're not gifted with a sixth sense. Get online and let your fingers do the sniffing.