I'm currently updating the business plan for The Tyesha Talks Show. My goal is to make sure it is answering the questions most important to investors. This is my third business plan for an entertainment based company. It is difficult finding accurate and up to date information, even when you know people in your industry they can only provide an educated guess based on their personal experiences. The CEO's of private companies like record labels and publishing companies keep their figures between the IRS, their investors, and themselves. Investors know this, so will that get you any slack on providing information from accredited resources?
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| ABC's Shark Tank cast. (L-R) Mark Cuban, Barbara Corcoran, Daymond John, Kevin O'Leary, Lori Greiner, Robert Herjevic |
Investors often
look for specific information in business plans. The business plan is always
followed with more questions. Those questions are what make or break a deal
with an investor. As you see with ABC’s Shark Tank. The investor will
more often make their decision based solely off the financials. The safer
investors only work with business with a history of sales. It seems to be
nearly impossible to turn an idea into a funded project. Investors and serial entrepreneurs, Dave Lavinsky and Adam Norris have written
lots of columns on this subject, here’s a breakdown of a few of the highlights.
Dave Livinsky is
a founder of the Growthink consulting and investment
firm in Los Angeles. He has also funded and started many successful Internet
and product-focused businesses. He wrote in a entrepreneur.com article
that when pitching to investors it is important to have a good mission
statement. Not because it will necessarily make or break the meeting for you,
but it will allow the investor to better understand your mentality and why you
feel you’re uniquely qualified to succeed. It is most important to investors
that you clearly show what people need, how you’ll provide it, and how soon the
investor will see a return on investment. The mentality of the business owner is
usually more important than how good the plan is. The mission statement should
express how important it is for you to create a successful brand.
Adam Norris is a
European businessman worth approximately $136 Million after selling his company
Pension Direct to HL group. His company Horatio Investments
has invested $6 Million in about 20 UK companies. He feels that 99%
of Business Plans Will Never Be Funded by Angel Investors. Adam receives
about 600 business plans each month and he says, “most (business Plans) are
incomplete, unrealistic, exaggerated, or the product and market simply have not
been researched thoroughly enough." A thoroughly researched business plan has to
show that you have a clear understanding of the area you’re venturing into.
There are small things like licenses, permits, detailed production costs,
insurances, experience, and key partnerships. Clearly these are sections he
looks for to see the thoroughness of the plans research. He also looks to see
if the business plan has taken into account past and future evolutions in the world or
market place. This is key for Adam to see if the business will operate in an
adaptable and forward thinking way.
The subject of well-researched
plans was also touch on by entrepreneur and investor Patrick Hull a contributor
to Forbes.com. He says “Consider
all the variables so you don’t rush into anything and test your assumptions.”
He also touched on other sections of the business plan that he finds important. In the end, all
business plans will be followed by questions; every investor is looking for
different details. It is important that you know your business and its industry
fluently. Investors will not cut you any slack on research, you have to find people with experience in your industry, research your industry thoroughly, take
your product as far as you can and use that data to show investors you'll be successful with their help.
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