Writing your business plan is probably one of the most important business duties you will assume. If you follow a quality business plans template you will cover the basics of the plans, but there are still common mistakes made by entrepreneurs that hurt their cause. It is reminiscent of the teacher in school who gave you the parts of the essay for easy outlining and then marks points off because the essay is too long or too boring.
Following are some of the most common errors made in business plans. Some of them are simple errors, but that doesn’t minimize their importance. Other are mistakes usually made due to lack of experience. Either way, these mistakes can hurt the effectiveness of the overall business plan.
Including more than one business model in the false belief that more information and more strategies are always better (not true!)
Lacking cohesiveness throughout the business plans
Difficult to read due to illogical or poor layout (another reason to use a business plan template)
Including unsupported projections or estimates
Not fully analyzing the competition
Failing to prepare all required sections of a business plans (making your plan look amateurish or as if you are hiding something)
No value proposition separating your business from the competition
Not letting anyone else read your business plan and provide feedback before submission
Making the business plan difficult to read because it is written using mostly hard-to-understand industry or discipline terms (i.e. your funder may not know much about technology so using technical jargon will make the plan too difficult to understand)
Showing lack of understanding of the niche market to be served
These are certainly not the only mistakes, but they are some of the most common. You want to avoid writing a business plan that is too long and tedious, is not well written, and is boring. Though funders are often professionals looking for the next great business investment opportunity, they are also human. Grammatical errors and boring prose can quickly discourage anyone reading the business plan. It seems your essay teacher was right all along.
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Quino Energy is a San Leandro, CA-based startup provider of energy services intended to offer scalable, long-lifetime grid energy storage for a fully renewable future. The company’s storage services are ideal for grid resiliency applications such as microgrids, transmission and distribution deferrals, and renewables storage at scales ranging from homes to large solar farms, enabling the chemical industry to store for the future.
Quino was funded $1.25 million from the funded group Energy Revolution Ventures, Doral Energy Tech Ventures, TechEnergy Ventures, and other confidential strategic angel investors. The new funding intends to use for different scales and demonstrate its in situ, zero-waste battery electrolyte production process. That turns dyestuff chemicals from coal tar into long-lifetime battery reactants using the flow battery system as the chemical reactor.
The Managing Director of Energy Revolution Ventures, Peter Robson, was incredibly impressed with Eugene Beh, the CEO of Quino Energy, and his team’s technology, which significantly improves battery cost, lifetime, and safety. Robson believes Quino will recreate a crucial role in the latest Age of Electrochemical Power, and they are excited to support Eugene and his team on their journey.
Eugene explains that their technology allows a 100% domestic supply chain without any dependence on critical minerals, saves jobs by developing a significant further use for coal that doesn’t apply to searing it, and revs the decarbonization of our economy all at once.
Additional for Guy Yavin, Investment Director at Doral Energy Tech Ventures. They align with Quino’s mission of developing a cheap, neat, and efficient flow battery, relying on inexpensive organic materials. The need for more special minerals and metals has carried back the scale-up of new battery technologies and the deep adoption of storage technologies to be embedded within renewable projects. Quino’s multi-hour battery can potentially increase the reliance on renewable energy electricity, and they are looking ahead to sustaining the team in this venture.
By: K. Tagura
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The ideal business plan is composed of more than just history, marketing and financial sections. It should also convey the value proposition to the angel investors you approach about business funding. Typically, angel investors are sought after a business has been established so it’s possible to show real products, actual customers and a working business model. However, the angel investors will want to know how you define the company’s value proposition.
The business value proposition is developed with the marketplace in mind. The value proposition defines why people in the target market should buy your products or services. It defines what benefits purchase of the goods or services will provide or what problem will be solved by product or service use. It sounds like the statement would be long, but it should be kept short which forces the business owner to concisely explain the value the company is bringing to the marketplace and the relevance of the product to the customer. If it takes a long winded explanation then there’s good chance the business owner has not fully developed the business concept.
The value proposition is important to the angel investor because it concisely differentiates the business among its competitors and reflects an alignment of business operations with the market. The value proposition must also reflect specific results or performance and is not a generalized statement that any business could use. For example, a consulting business could say that it can help customers get a high return on investment , but that would be a weak value proposition. A strong value proposition would say that the business can demonstrate customers will experience an improvement of 15% Return on Investment (ROI) by using the company’s state-of-the-art proprietary software.
Angel investors expect a business plan to have a value proposition that quantifies market results and also states the source of its competitive advantage. That should never be a problem if a company is serious about success.
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One of the important components of a business plan is clearly defining objectives. Stephen Harper in Starting Your Own Business (McGraw Hill) writes, “Objectives can be viewed as dreams with a deadline.” The point he is making is that objectives should be specific in terms of projected amounts and timeframe.
For example, you would not write an objective like this: The business will grow over the next 5 years. You would write it like this: Sales are expected to be $2 million in 5 years and the business will be one of the top 5 niche market leaders. The dreams you have for the business should look ahead and establish where you want the business to be positioned or how much growth is expected within a set period of time. The dreams should also be reasonable, based in facts and business reality, and achievable.
For example, if you plan on opening 5 franchise businesses within 10 years (1 every 5 years) the objective should be stated as such. However, you should also be able to support plans for opening these franchises in the competitive analysis section of the business plan. If the market is already close to being saturated, those 5 new franchises may be difficult to open. When objectives are focused and sensible, the business plan will become a living breathing document that supports your dream.
If you are having trouble setting objectives for the business plan, there are some questions you can ask yourself to develop focus. Ask yourself what your ultimate goal is 5 years from now. Picture yourself as an entrepreneur 5 years from today and imagine the level of business success you want to succeed. Ask yourself questions like how many sales people you hope to have working and how much market share you want to gain. Picture yourself as successful and put your definition of success in writing.
Objectives will become clear when you take the time to look into the future. Though a business plan is not a crystal ball, it is a driving force with strategies for achieving success. Set clear objectives first and the rest of the business plan will be a lot easier to develop.
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ShiftMed, a W-2 healthcare workforce management marketplace based in McLean, VA, secured $200m in funding. Panoramic Ventures led the round with participation from Blue Heron Capital, other strategic angel investors and Audacious Capital.
Travel nursing rates become unsustainable as in continue to exceed the national healthcare providers’ budgets. The sector has grown from $8B to more than $13B in the span of 2 years (2020-2022). As a result, travel nurse providers are bleeding hospital system budgets while demoralizing in-house teams by paying lower rates.
Led by Todd Walrath, ShiftMed’s CEO, said that their expansion is the next-generation workforce management platform that connects hospitals, skilled nursing facilities, and assisted living providers to the highest quantity and quality of licensed nurses. It helps healthcare providers manage their resources dynamically by giving them access to marketplaces situated locally with more than 350,000 credentialed W-2 healthcare employees. In addition, health systems can utilize mobile and cloud-based software that offers workforce optimization, providing their staff with a cutting-edge, integrated solution that improves retention, opens up part-time employment alternatives, and lessens dependency on travel agencies. Access to more local employees is also made possible via ShiftMed.
ShiftMed said the funds would be used to expand and narrow that gap in needed personnel. Its mobile and cloud-based software provide different perks to nurses—for example, guaranteed shifts, almost instant pay, and health benefits. While for hospitals and other healthcare organizations, it provides access to additional local staff and opens part-time work opportunities.
Today, the company said it grew about 8x compared to previous years in the last two years. Its app reached 1,500 enterprise partners across 110 markets and over 350,000 credentialed nurses and aides.
By: E. Pascual
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When you are looking forward to starting your own small business, you will have to familiarize yourself with a lot of new ideas. One of the important concepts that every business owner must be aware of is business valuation. So, what is business valuation, what is its importance and how do you do the valuation of a business? Read on to know.
Business Valuation
As the name clearly suggests, business valuation is the act of finding the value of your business in the market. It is just like finding the value of a house when you are about to sell it. You can use multiple methods to find the value of your business. However, it is always in your best interest that you hire a professional valuator to do it for you. They know multiple methods of valuation and will make sure that the final valuation is error-free.
The Importance of Business Valuation
The first thing you should know is that it is imperative to do the valuation of your business not for one but many reasons. The first reason that comes to mind is the selling of a business. When you want to sell your business to someone, you have to set a price for it. Sometimes, the owner of a business would want to plan succession i.e. the transferring of shares to an heir. The buy sell-agreement that they use for transferring the shares to their heirs requires them to know the value of the business.
If you have ever pitched your business to an investor, you must be aware of the fact that they always ask for business valuation. They are trying to assess a few different things based on the valuation you give them. First, they want to know how much their investment is worth. Secondly, they want to know whether or not you are fair with your investment demand if you are offering them equity for their contribution.
The Three Business Valuation Methods
Even though there are other business valuation methods as well, you will be reading about the three most common ones.
1. Valuation Based on Market Value
You also call this method the relative valuation method. It is a fairly straightforward way of knowing how much your business is worth. The valuators have to look at other businesses in the market that are similar to yours. They look at their selling prices and determine the value of your business based on those prices. Now, as simple and plain as this method sounds, it does not always work. For example, you don’t find the records of sole proprietorships that easily. So, when it comes to the valuation of a sole proprietorship business, finding records of similar businesses can pose quite a challenge.
2. Valuation Based on Business Future Earning Potential
This is an ingenious way to know the value of a business and one that helps you a great deal when it comes to obtaining investments from interested investors. This is quite a realistic approach but pitching it to investors can be a daring task.
First, you have to make sure that you have done proper calculations based on your current and past records to come up with the future earning potential of the business.
Secondly, you have to stand confidently with your decision because investors would often question you and your integrity a lot when they deem that you have valued your business much higher than you should have.
Capitalization of past earning is quite a frequently used approach to do this type of valuation wherein you look into the past financial reports of your business, smooth out any extraordinary earnings or expenses, and find the product of the normalized cash flow with a number referred to as capitalizing factor. It is not the only method used for determining the value of the business under this category. Another frequently used method is based on discounted future earnings.
3. Valuation Based on Assets
It is clear from the name that in this type of valuation you find the worth of the business based on the assets it owns. Once again, there are multiple ways to approach this valuation too. A common way to do this type of valuation takes liquidation of the business into account i.e. calculate how much money you would have if you sold every asset that your business owns and then subtract every liability from that sum. The other way is based on the ongoing status of the business wherein you look at the total value of your assets on the balance sheet and subtract your existing liabilities from them.
Once again, it is the sole proprietorship that poses challenges when it comes to doing the valuation of a business using this approach. Why the valuation of sole proprietorships is difficult using this method is because the owner in this case does not use the assets for business purposes only but personal as well.
You now know from the information given above that it is imperative for you to complete the valuation of your business. Whether it is for legal purposes or to sell your company at the right price, knowing the right value of your business is crucial. In the end, you should prepare your business financial documents regularly to help you find its value with convenience.
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StoryCo is a Los Angeles, CA-based provider of an open storytelling platform where creators and devoted fans collaborate and co-create the following fantastic story franchises and jointly participate in their success.
StoryCo was funded $6 million led by Collab + Currency and Patron with participation from Blockchange Ventures, Floodgate Ventures, Sfermion, Flamingo DAO, and angel investors Lloyd Braun, Packy McCormick, Sabrina Hahn, GMoney, and directors from UTA and WME. The company plans to utilize the new funds to accelerate growth and expand operations.
StoryCo has also declared the takeoff of its ground-breaking collaborative storytelling platform, where conventional Hollywood creators and devoted fans unite forces to build the following outstanding media franchises, participate in their success, and publicize the future delivery of The Disco Ball its first story universe led by Story Architect Kyle Killen.
Justin and J.P. Alanís, founders of StoryCo, said they are building a new model to guide the development of remarkable new stories and let their community of creatives and fans contribute meaningfully to its growth.
Announce on the StoryCo platform in early 2023; The Disco Ball is an enticing and combined storytelling experience – a first-of-its-kind interactive record progress across the StoryCo site, social media, and reality interplay.
Jason Yeh, General Partner at Patron, commented that better models would emerge which help emerging creative talent to capture and share in the value around these IPs. They’re thrilled to be partnering with the StoryCo team as they look to build a platform that does just this, helping creatives attain more control and ownership of the IP they help to create.
Community members can now declare their Disco Ball StoryPass to accumulate and earn digital art related to crucial story moments and characters, culminating in an exclusive piece of rare digital art conveying the right to control the future of The Disco Ball story.
By: K. Tagura
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Starting up a business is a challenge. Whether it is small or big, you need to follow a series of steps along with different strategies to make it a profitable venture. To make a business worthy of your investment, it is necessary to perform thorough research on each aspect such as a business idea, market, competitors, and finances etc.
Once you find the best idea, your next step should be based on logistics of your business along with a well-crafted plan. These steps are fundamental and crucial. This way, you will create a strong base for your business as well.
So, if you are looking for a small startup that is worthy of your investment, have a look at these 10 fantastic business ideas.
1. Real Estate Broker
Working as an intermediary between sellers and buyers, real estate brokerage is one the most profitable businesses. You will only require a brokerage license. This is also a cost-effective business idea, which means you can run it without an office as well.
However, you need to know the industry and your competitors before beginning and then you are good to go. Plus, real estate brokering is all about contacts; make sure lots of people know about your business so you can achieve your milestones.
2. Catering Service
Catering is ideal if you are looking for a small but profitable business as you can provide these services from your home. Many people and even businesses do not think twice to pay high-quality caters. With reliable catering services, you are sure to make a handsome profit, especially on different special occasions.
If you are a hard worker and determined to build a successful small business, catering seems a decent business idea.
3. Online Tutor
Online tutoring involves creating professional social media profiles and letting people know about your skills. Whether you love to play musical instruments or know different languages, you can teach anything online and become an online tutor.
Online tutoring neither requires extra expenses nor time. So, you can consider it if you can speak fluent French or play different piano tunes.
4. Food Truck
Food always stays in demand and attracts people. Therefore, you can never go wrong with a food truck, especially if you provide high-quality food and beverages. Take note that opening a small restaurant requires a considerable amount of money.
Plus, there is a risk of loss because of intense competition in the food industry. In this case, a food truck seems an interesting idea. You do not need space or extra staff which makes it a profitable small startup venture.
5. Personal Trainer
People who love to stay fit and healthy never mind paying their personal fitness trainer. Also, getting certification in personal training is affordable as well. Thus, you can get the required qualification and start offering personal training services.
This is one of the small businesses that are worthy of your investment as in current times people know the significance of a healthy lifestyle. Since this industry is competitive, you should use the internet to market your services and to build your client network.
6. Web Designing
Technology companies are always looking for web designers who can make top-notch websites. Web designing entails developing value-driven, intuitive and beautiful websites.
If you have got an eye for website designing, you can offer these services to various companies and brands and start your web designing business. If you are new to this field, you can even learn the basics of website crafting and become a pro. Moreover, there are many online courses available that can teach the latest website trends as well.
7. Social Media Marketer
Social media platforms have become a part of our daily life. Not only this, many people are running their businesses online on these platforms. You can start marketing on your social media profiles as well. For instance, you can use your Instagram account for marketing purposes.
All you need to do is decide the type of content you are willing to share such as technology, beauty, or health etc. and build up a considerable following on your account. Brands often look for social media accounts with a huge following to market their products. If your content is related to their business, they are likely to approach you.
8. Local Business Consultant
New startups are always in demand of consultants who can solve problems related to their business and provide solid advice. Therefore, if you have developed the right skills or are a pro in your industry, you can become a consultant.
Whether you are a business strategist, marketer, or have other skills, feel free to offer your services to local businesses. Plus, you can take help from online courses on how to get clients and build your brand that is worth your investment.
9. Travel Consultant
You can turn your love for traveling into a profitable small business. You can begin by creating official groups on Facebook or LinkedIn. This is an effective way to attract travel enthusiasts. In the group, you can share cheap flight rates and even recommendations for next traveling destinations.
Travelers are always in search of different recommendations to explore different places. In this case, they can count on you and you can teach them how to turn their dream trip into a reality.
10. Become a Photographer
Turning your skills into a small profitable business is easy if you have a passion for photography and you own a camera. All you need to do is learn top-notch editing skills which are crucial in this industry along with finding a suitable niche, such as food photography or travel photography etc.
To build an impressive online portfolio, you should do photo-shoots frequently so people will know about your skills. For this, you should not hesitate to capture a few photographs for free. With a professional portfolio, you are likely to get clients in a short time.
Bottom Line
There are plenty of ideas that are worthy of your investment. However, the competition in different industries can give you a tough time. You can overcome this part if you focus on the quality of your services.
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How do you convince investors your business idea is worth the risk of investing money? You may have the most innovative and creative idea ever put forth, but that doesn’t mean anyone is going to invest in it. Even a good idea can flop if it’s not implemented correctly. Of course, the most well-known example in business history is the 1958 Edsel. The car had a poor name, a poor pricing strategy and was manufactured during a recession. It remains to be seen if the modern-day Chevy volt will be classified as the “new” Edsel for similar reasons.
Investors are willing to accept risk, but they will do everything in their power to ensure they understand how much risk is involved. Investors are not the same as business speculators in most cases because they want a value proposition that includes a very good probability of earning positive returns. There are many different factors investors will consider to determine risk, and you should assess them first.
Risk is a function of management competencies, available collateral, market acceptance of the business idea and time. To convince investors your business idea is worth the risk of funding, you will have to first prove that the people implementing the plan are fully competent and capable of running a business. Investors will also want reliable collateral. You need to show that the product or services can be efficiently brought to a willing market. Finally, the investor will want to assurances that the payback agreement in terms of time will be met. Payback in terms of money is taken care of by the other factors of competency, market success and collateral.
You can convince investors to fund your projects by developing a sophisticated business plan that clearly and carefully shows the level of risk the investor is assuming. The good news is that the time spent developing a business plan in the first place reduces risk right away.
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Grazzy is an Austin, TX-based developer of a digital payment portal designed to make cashless tips seamless and personal. The company’s portal helps to reduce operating costs, increases wages, and elevates the customer experience through tip enablement and compensation, enabling travelers to maximize earnings and get real-time visibility.
Grazzy was funded $4.25 million, led by Next Coast Ventures, some strategic angel investors, and Tuesday Capital. This latest infusion of capital will accelerate development across enormous hotel brands and operating groups, restaurant groups, and salons scrutinizing for modern ways to enhance the employee experience while reducing costs. Further, this budget will sustain the continuance of logical integrations between the Grazzy platform and the effective payment systems that most hospitality and service businesses rely on to run their operations.
The company is led by Founder and CEO Russell Lemmer. Grazzy allows consumers to digitally cashless tip diners and hotel attendants by scanning a QR code. Workers can immediately access those funds rather than wait for their employer to convert them to cash. Grazzy said this setup could improve employee retention.
Also, by addressing the financial wellness of those employees, they can reduce turnover and improve lives. Based on the comment of Lemmer, even as hourly pay rates increase, they know that cash constraints have meant meaningfully fewer gains for service industry employees who rely on tips to supplement their hourly wages. We’re on a mission to fix that. Our digital, cashless employee-centric platform supports those who earn more money, use it the same day, and save and spend better.
The progressively cashless economy has made it challenging for numerous service-based industries to tip out workers at the end of their shift, compelling multiple to defer tip-outs to weekly or twice monthly paychecks. Grazzy opens access to digital tips, paid through customer credit cards, letting service-based businesses offer same-day, instant access to tips for their staff.
Thomas Ball, Co-Founder of Next Coast Ventures, said, Grazzy’s capability to serve the complex needs of the enterprise makes them impressive to the landscape. In addition, the product and the team’s proven ability to deliver at scale make Grazzy the most potent player today.
By: K. Tagura
Author statement:
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