proposal plan

hello, my name is ian casterton and welcome to startmeup videos today we're joined by doctor steven gedeon to discuss the proper techniques to businessplan writing. thanks for joining us steve my pleasure steve you have started over a dozen companies venturecapital firms and nonprofits can you tell us about your most recent company i haven't started over a dozen i've been the ceo,turnaround or started over a dozen

my most recent company um... probablywould've been 3dna we raised five rounds of financing five or six rounds of financing and it's the number one download in our productcategory for the last year and we grew the company to over a million in revenues and over twenty employees before declaring victory and moving.ian: congratulation on your success.steve: thanks and you have also started a number of venture capital firms correct ? yes of the largest would've been are hundredbillion million dollars us vs program based out of san diego

i was also involved with starting a couple of smaller seed venture capital firms as well so you had both perspectives, you have asked for money as an entrepreneur and you have spent someone else's money as a venture capitalist. can you tell us about the different perspectives ? it really doees give you different perspectives when it's your baby and you are passionat about it. you don't understand why don't these idiots get it and then suddenly the next week on the otherside of the table going wow why don't these entrepreneurs get it all i want is a simple answer to this, this and this and the entrepreneurs just don't get it so yes it has given me a really intresting perspective on the both buy and sell side of the transactions

and now you teach business plan writing correct ? that has given me an even bigger perspective. i thinnk confucius said something like; to really understand something you know if you hear something you learna little bit if you do something you learn more but to learn the best you have to teach somebody elsesomething so it sounds like a business plan is a usefultool for just the entrepreneur just to get their ideas on paper ?steve: business plans play a variety of roles. certainly a number of business i have started up, we never had a business plan.i have seen a lot of

well written documents saying don't wasteof time writing a business plan certainly for some businesses you shouldn'twaste your time just get out there just do it do it,do it,do it and why bother write it down on a piece of paper but business plan certainly play a verykey role for certain reasons so certainly if you're trying to raise financing and you want to promote yourself as a credible intelligententrepreneur or with the well-thought-out business plan

you know what the money is going to looklike, how much you need and why then people want to see at least something you should keep it short i would say very few people will read morethan twenty, twenty five pages. that would be it a lot of people won't go beyond the executivesummary before they make a decision on it so there is a lot of different reasons to write a businessplan so i'm an entrepreneur and i just decided, i want to write abusiness plan steve: good for youian: thank you

what are some strategies that i can get what is in my head right on the paper ? do i have to think about an outline for everything or should i start right away ? good question i think that the writing the business plan itself is not nearlyas important as the process by which you think through what is a successful business that if you leave if you think through andwrite through what makes a successful business and figure out all those things then the businessplan will write itself so

so when i teach the course for example what i start with is saying just write down week two or week three just tell me what your idea is clearly and succinctly what is your idea and surprisingly that's that's hard for alot of people that's, they talk around it's they it seems clear in enough in their own mind when theytry to put down on a piece of paper the idea get's burried under too many words

you've got to be able to convey what youridea is in a sentance maybe two if you're selling to your mom who loves you maybethree sentances because she will pay attention long enough but if it's not if you can't clearly articulated at a paragraph then it's not clear in yourown mind that's that's the first phase of just whatis it and then second phase i usually go through is i say tell me in detail who your customer is

and why they care and very often what'll happen is as people think about who their customer is and why they care then they have to go back andchange what the original idea was and so the idea of being able to really focus onwho that customer is is so important and and and most entrepreners don'tget this. what they do is to say i'm seeling to women well the problem is you can't sell to women

the thing i like to say to students sometimes is imagine you started a company there's a telephone start making phone calls you are selling to women what are you going to do just pick up the phone call the first person hi, are you a woman ? let me sell at you

you stand on the street corner in a chicken outfit, hey women buy my thing ?! you have to have in mind a particular woman doing a particular thing what is it about that particular individualthat makes them pay attention to your idea, love your ideaand buy from you and and the more you can't focus on andit's segmentation niche marketing kind of business lingo associate with this the better you can articulate who that targetdemographic is their psychographics what they read where they hang out better you can place your

message in a place where they'll see it steve: does make sense ?ian: it does, and it sounds like you are detailing a lot about 0:06:15.669,0:06:19.039the exectuive summary and how that is the more important element of a business plan. steve:we haven't written the executive summary yet. i'm still working through, think through the right business. you can do this on a piece of paper, hand written let me go through a little bit more some ofthe kind of a big conceptual blocks that you need to fit all together maybe i'll back up a little bit the business planning process self

most business planning books seem to say youstart beginning and you write through the end but that's not what you think through business. the way you think through a businesses is you start you start thinking through a little bit thenyou realize you got to go back to beginning and start over again then you think you little bit more go back to the beginnig so you've got the slate clean process to gothrough before you fine you've figured out how to make it all cametogether now you can start writing a business plan

so the first thing you do is to say you ingeneral terms safely what's the business and then say cooled by selling to but in detail not just you know women or youknow people between the ages of twenty five andthirty five you people of different you got out honor that's when you're trying to sell yourproduct to them and so we figured we hear from you customers and uh...

figured out how quickly with the price pointneeds to be as an example then obviously need lookit career competitors are uh... then comes kind of a quarter business concept of strategy how it different from your competitors that way that's important your customer

which means you don't know who the competitorsare getting the customers are and yet a hundred different now the figure that out and put it to go backto rewrite business is all about at any time we have to go back to rewrite the customersare again sorry at any time in this process should you be taking breaks to talk to anypotential customers the market will tell you anything you need basket but so many people rate these business plansthat are castles in the sky dreams based on

you know it's a billion dollar market sideis gonna get a fraction of a percent of the billion dollar market may act like that meansanything that's not what business is the bill businesses are built one customer a time once sale at the time okay uh... just uh... dual curve ball uh... as a venture capitalist country withthem hundreds of business plan meanwhile was themost important component or what did you first look at tearing me if you should keepon reading or

his electrical reports um i can speak with the story on this mattereverybody agrees on this point person you look at forces the executive summary of the first thing you look at is really uh... but people bet on the jockey before the fed ofcourse people that honor eighteen with the big plan overand any plan with the people so they look at the entrance uh... they look at the overall business idea

and that damn right to the financials and that seems likeit's the most challenging part of the business plan ras pickens struggle with the financialthing all the time shannon adaptive and so many of the business plan but six releasedeclined step one is estimate the overall size of themarket you know some big crazy large number stepto estimate your percentage of it all i need is one percent step three make a random crazy yes

at how to go from zero to that one percentsover specs for your time and that becomes your top-line revenue number but but that's that's such fantasy and again it doesn't honor the reality of hollow on thurs build a business make onceit with time so as a superficial example you would say month one popping a put in my financial protectionismi'm gonna make five hundred cold calls

of those five hundred cold calls a hundredpeople above the election speak with of those hundred people tend to go into be interested alarming face-to-face with five of them of those five i'm not gonna close any sales month too i'm going to make three hundred phone calls you know meet withthat's number of people and then i'm calling to make a sale

and also part of those revenue drivers are why do you make a sale who wanted to make that sale to there's abig company little company like what part of my target demographic how much is that still than before so no as a b c when i look at that time thousandseilers instruction arbitrate ten thousand dollars i can see it hard to come up withthat ten thousand all i see you can make a bunch of phone callsyou to meet with people

you can't see why the san francisco open acd expense that we are very good on and uh... all i see you not and you get a filmmaker silverstone i've been there you're gonna feel glad tobe you know that you want to you can see all the steps of the author isgoing through to get to that sale now that number has some credibility it's not you know you throw darted a dart board andmonth one of my have ten thousand dollars

mean or even worse you say something stupid likethat this is conservative everybody knows that the numbers that you'reputting your business plan are long before you put and you'll be believes your numbers and chances are you getting your numbers rightare astronomically zero but the question is once you've got my millions of dollars your six months it

and now the numbers are wrong we all knowto be wrong the question is has the projections givingyou a died management action so that's the real purpose of the financialnumbers is does it give you a guide to action but let's say for example that you say uh...okay uh... on my spreadsheet first able to do them asthey are going to give away ten thousand brochures of those ten thousand brochures arm

we're gonna get a two percent response rate people go to our website uh... as result we have a certain number ofhits on our website fall from the number of people come to ourwebsite we're gonna conversant percentage of those two cells uh... at a certain dollar value and now what you know finally revenue number it was is you know all those numbers add up basically

what comes and goes your numbers are wrong question is why what did you feel depictedyou give away the right number brochures yes but we didn't get two percent sponsoring need we need to change the brochure didn't change the color of marketing messageor who we give them out too maybe we need to change that or else they be did percent response ratebut didn't get the drive through the web traffic what can we do to fix that mike

you know maybe once people come to the websitethey're not buying if you do something different your websiteif the price point is wrong but usual guide to management action as opposed to what we said would be ten thousand we didn'tmake ten thousand which we do different uh... i don't know tried harder let's try harder it up but that doesn't work for you but have you how do you tell your businessplan

for these different audiences you always have to evaluate your audienceswhat they want to see and what the call to action is from them so the call to action for a brochure could be anything from by now call this number on go to our website began tell people whatthe called actions

so any chance you specific question perfect or after the cds is is adifferent plan and you would write to your own poorly which is a different plan that you might rightfor your bank which is a different plan than you might right for your phone clarity ofthought are for one of my going to do to uh... make money off of this venture asopposed to is great ideas motivational pocket lots of pictures stuff like that are you getting a lot of questions that

archer's out out there in the world have i'm sure uh... thank you very much if you have anyother resources needed for now line for business plan warning or sources please visit family oppressiondot com defense again for joining us trip