About i2i: Idea-2-Implementation
Ideas are dime a dozen. Its all about vetting out an idea and building a profitable company out of it while keeping the needs of the customer first and foremost in mind. Along the way, an entrepreneur will have to build a good team, raise capital, develop an organization, take the idea to the market while creating value for the company’s shareholders. It is also very important to have a triple-bottom line impact strategy for your company. The best of ideas can fail if not implemented correctly. In his log, Nikhil will log the journey of Idea-2-Implementation (i2i) and use Artilient Labs and its portfolio companies as a working example. Join him on this journey as he explores the various aspects of launching a new company and taking it to the market.
Taking the Leap: Shall I quit? Shall I not? Maybe later?
Launching a new business comes with its perils. A big number of would-be entrepreneurs are in full-time, regular 9-5 jobs or consulting gigs when they decide to launch a business. It always seems to be a safe thing to do to start your business while working full-time and “see how it goes”. It is always easy to squeeze in some time during the day job to start your new enterprise discreetly while collecting the regular paycheck. Heck, why not! You are literally being paid to start your own business. If the new business does not work out, you can always continue in your existing job as if nothing happened and without a break in wages or work. But is that the motivation you need to succeed in your business? Can you really excel in launching your business successfully while working elsewhere? Would your priorities be right?
Starting a new business takes a big commitment. An entrepreneur is also the leader and sets the example for others to follow in his/her team. Any start-up requires significant risk-taking besides capital expenditure and planning. But above all, it requires a vision setting for the business and for yourself. What do you want the business to do? And what do YOU want to do in order to take the business there? What’s going to drive you to help you achieve your vision?
It is quite a difficult proposition to quit your job and all the comforts that come with it. Taking a leap into the land of uncertainity and no regular paychecks and without nice corporate office with regular coffee and lunch breaks can be quite intimidating. It is made more difficult when you do your personal financial planning on the length of time you can manage without any income coming into your new business and without having to look for a new job. This exercise can be even more difficult when you have a family to support. Some questions that probably go through your mind are:
– What if my business fails?
– What if I am unable to raise the additional capital from outside investors?
– Will I be able to build the right team in order to build the company i want?
– Will the market accept my product or service?
– Do I need a business partner? Can I trust this business partner to be as passionate as I am and give his 110% too?
– What if i run out of money
– Is my spouse completely supportive of my actions?
– Where do I start?
– How shall I quit? Will my boss take me back if I quit?
– Would I miss my office? The cooler talk? my friends? the free parking? the access to the office printer and secretary?
Here’s some things to consider when you are in such a situation:
– Why do I want to start a business?
– Can I handle irregular income at this point in my life?
– What is my current financial situation? How long can I manage without any new income?
– How soon before the business potentially starts generating an income which I need to achieve?
– If supporting a family and/or married, how will my family manage my being without a job?
Some tips and suggestions:
– Talk with your family
– Always speak with other entrepreneurs and find out how the have dealt with such life changing instances
– Indulge in some financial planning
– Its a great time to finish the business plan and financial projections for your new business
– Think and then think again….and think things through
Starting a new business is an amazing thing. But making sure that your priorities are aligned with your spirit of entrepreneurship are something that you should think about before taking the leap in order to make it more rewarding for yourself and for those around you. And above all else…enjoy the journey and don’t look back.
–NRJ
1/X/2010
I feel the need…the need to do everything
The drive to build, achieve, deliver and often prove something is a heady mix. Often, the entrepreneur is faced with the problem of plenty. As an example, a technology might have multiple uses in different industries with differing business and revenue models. Or a product could be developed for different sets of customer bases – such as commercial or consumer. Or a website which could do multiple things for every kind of customer and offer them every kind of widget. It is very attractive to think and say that “I can do everything. Bring it on.”. The truth of the matter that in most cases, deciding to do multiple things at the same time is not the most feasible option.
Lets examine in detail why I suggest this crazy-sounding option by using this example. John is an entrepreneur and he has recently been contacted by an inventor named Steve. Steve has a patent on a technology which he wants to have commercialized and thus needs someone like John to help him with it. John agrees to work with Steve to do a feasibility analysis and they realize that this unique technology can be applied to at least four different industries: aviation, entertainment, fitness and utilities. They are very excited at the opportunities in front of them.
Here are some of the challenges ahead of them:
– Will they be launching one business or four different businesses
– They need to raise capital from private sources (angels, VC’s etc) and realize that private investors in most cases have some specialty and like to see focus
– How would they build a team for such an endeavor?
– How would they explain to everyone what they are doing in order to get the message across in a succint manner
– As a start-up, how do they not get confused with their customer bases in different industries?
– Do they want to dedicate their life to business? or have some time to spend with family too?
At this point of time, it is very important for John and Steve to understand that even though there is a lot of potential to succeed, it all will come down to execution and getting to your milestones (successes). Execution becomes simpler when the goal and the plan is clear. Also, minor victories are a very important part of the process and so is the ability to convince others of your vision and have them buy in to it in order have them contribute to it. Victories lead to buiding of credibility and track record as well as building of your own methodologies which can be applied to other projects and businesses.
John and Steve realize that given the nature of the economic climate, available resources and private investment mood, it might be easiest to just commercialize their technology into the renewable energy industry for now and dedicate themselves to avhieving their immediate goals in that industry.
I want to hear your thoughts and opinions on how you have dealt with such situations.
We all want to take over the world….but it becomes easier if we do it one step at a time…
Fight ON!
NRJ
12/XXVII/2009
An Executive Summary should be just a summary….really
An executive summary should be what it says it is – just a summary. Two at the most three pages. It is meant to be a quick introduction to your company and to check the level of interest in the target audience usually a potential investor into the company. Other audiences could includes potential strategic alliances, vendors and customers – anyone who needs to know more about your business really quickly. If the person reading the executive summary likes it, they can always contact you for a business plan (in the event of a potential investment) or other relevant information. It should not contain any trade secrets and should clearly state your contact information at the very top.
Before you start writing the executive summary, you will need to have finished your 5-year financial projections and business plan.
Your executive summary should start off with a clear message about why you are in business, what is the business, the pain in the market and how you address it. It should also contain the following information in a very clean and concise manner:
– Management Team and their track records
– Business decsription
– Market size and scope
– Operational Roadmap
– Business Model
– Revenue Model
– Marketing plan
– Strategic Alliances/ Partnerships
– How much capital you are trying to raise
– Use of proceeds
– Financial projections over next five years (Revenues, EBITDA)
– Product development plan
Once you finish your executive summary, make sure you do a spell check. Also, send it to your team and advisory board (if any) for their feedback and comments before sending it to any potential investors.
There is not set format to an executive summary. Make sure you give enough information to the reader in 2-3 pages so as to want that person to contact you for next steps.
Here is a template of an executive summary that I have used in the past. As always, this is just for reference purposes and should be modified by you for your business as per its needs.
I welcome your comments and experiences that you can share with me and the rest of the community .
Fight ON!
–nrj
9/XVII/2009
How long should be my Business Plan?
This is one question we get a lot from entrepreneurs. Before we answer it, lets examine the Business Plan itself. What is the need for it? When should it be written? Who is the audience? What should be the contents of it? How many pages?
A good business plan tells the reader the story of the company in as few words as possible and should convey some of the following things:
– What does your company do? and how is it better or a game changer?
– What is the need in the market for your product or service
– What is the problem that you will be solving?
– Who is the target market?
– Why would the market use your solution and pay for it?
– How do you do business?
– How do you make money?
– Who is your competition?
– How much money is it going to take to have you develop and launch your product or service and get a good grip on the market?
– What are the risks involved?
– When can the lines cross?
– Who is the team behind it? What are their qualifications? Have they worked together in the past?
Business plans can have multiple audiences. Most investors would want to see a business plan as part of their screening process. It is also highly recommended to have a business plan for internal use and to show the team the structure that the entrepreneur has created along with the vision, values and mission statement of the company. It is always good to refer to your business plan from time to time as your company grows and check on the fundamentals of your business and what made you start the company in the first place.
Writing a business plan requires significant amounts of time and effort. It also requires you to think through your entire business and can be thought of as a good exercise. Even though you can have an outside consultant write the business plan for you, it is always recommended that the entrepreneur and founders write it themselves. This will allow for various discussions as you go about doing the market research on your initial idea, refining your idea more and applying it to the financial forecasting. Use pictures and diagrams as they convey your concept quicker. Remember – you can convey a thousand words with one picture.
The business plan also consists of a thorough executive summary at the beginning of the business plan. Conventional wisdom suggests that the executive summary be completed once the business plan but I usually like to write them before I start writing the business plan. Lots of times, some folks want just the executive summary before they want to spend the time to read the business plan and use it as an initial screening mechanism. So the executive summary has to be short, sweet, to the point and get your entire business plan conveyed to the user in 2-3 pages at the most.
There is no set template for a good business plan. Here is a Sample Table of Contents for a Business Plan that we use internally for our companies and have developed over a number of years. You should not use it as is but should customize it for your company’s needs and audience. Lots of times, a good business plan can be conveyed in the form of a good powerpoint presentation.
Remember that its not about the number of pages you write or the trees that are cut down every time someone prints a copy of your business plan. Its about getting your message across in the most succinct manner and getting their immediate attention in this age of Twitter.
I welcome your comments – and if you use the template, let me know how it goes.
Good luck and Fight ON!
– nrj
9/XII/2009