If you want to raise capital,
then you need a professional
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business plan in 1 day.
to watch the video.
"The TRUTH About
Most entrepreneurs fail to raise
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The Internet has created great
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Most recently, a new online funding
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"Barking orders" and other forms of
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So how do you lead your company
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to watch the video.
Written by Pete Kennedy on Wednesday, April 16, 2008
Are you looking to raise venture capital?
You need a good idea – and an excellent business plan.
Business planning and raising venture capital go hand-in-hand. A business plan is required for attracting venture capital. And the desire to raise capital (whether from an individual “angel” investor or a venture capital firm) is often the key motivator in the business planning process.
But how exactly will your business plan persuade investors to sign a check?
This article provides advice on how to position each section of the business plan for an investor audience. These tips draw on Growthink’s decade of experience consulting to start-ups in the business planning and capital raising process.
Goal of the executive summary: Stimulate and motivate the investor to learn more.
- Hook them on the first page. Most investors are inundated with business plans. Your first page must make them want to keep reading.
- Keep it simple. After reading the first page, investors often do not understand the business. If your business is truly complex, you can dive into the details later on.
- Be brief. The executive summary should be 2 to 4 pages in length.
Goal of the company analysis section: Educate the investor about your company’s history and explain why your team is perfect to execute on the business opportunity.
- Give some history. Provide the background on the company, including date of formation, office location, legal structure, and stage of development.
- Show off your track record. Detail prior accomplishments, including funding rounds, product launches, milestones reached, and partnerships secured, among others.
- Why you? Demonstrate your team’s unique unfair competitive advantage, whether it is technology, stellar management team, or key partnerships.
Goal of the industry analysis section: Prove that there is a real market for your product or service.
- Demonstrate the need – rather than the desire – for your product. Ideally, people are willing to pay money to satisfy this need.
- Cite credible sources when describing the size and growth of your market.
- Use independent research. If possible, source research through an independent research firm to enhance your credibility. For general market sizes and trends, we suggest citing at least two independent research firms.
- Focus on the “relevant” market size. For example, if you sell a portable biofeedback stress relief device, your relevant market is not the entire health care market. In determining the relevant market size, focus on the products or services that you will directly compete against.
- It’s not just a research report – each fact, figure, and projection should support your company’s prospects for success.
- Don’t ignore negative trends. Be sure to explain how your company would overcome potential negative trends. Such analysis will relieve investor concern and enhance the plan’s credibility.
- Be prepared for due diligence. It’s critical that the data you present is verifiable, since any serious investor will conduct extensive due diligence.
Goal of customer analysis section: Convey the needs of your customers and show how your company’s products/services satisfy those needs.
- Define your customers precisely. For example, it’s not adequate to say your company is targeting small businesses, since there are several million of these.
- Detail their demographics. How many customers fit the definition? Where are these customers located? What is their average income?
- Identify the needs of these customers. Use data to demonstrate past actions (X% have purchased a similar product), future projections (X% said they would purchase the product), and/or implications (X% use a product/service which your product enhances).
- Explain what drives their decisions. For example, is price more important than quality?
- Detail the decision-making process. For example, will the customer seek multiple bids? Will the customer consult others in their organization before making a decision?
Goal of the competitive analysis section: Define the competition and demonstrate your competitive advantage.
- List competitors. Many companies make the mistake of conveying that they have few or no real competitors. From an investor’s standpoint, a competitor is something that fulfills the same need as your product. If you claim you have no competitors, you are seriously undermining the credibility of your plan.
- Include direct and indirect competitors. Direct competitors serve the same target market with similar products. Indirect competitors serve the same target market with different products, or different target markets with similar products.
- List public companies (when relevant, of course). A public company implies that the market size is big. This gives the assurance that if management executes well, the company has substantial profit and liquidity potential.
- Don’t just list competitors. Carefully describe their strengths and weaknesses, as well as the key drivers of competitive differentiation in the marketplace. And when describing competitors’ weaknesses, be sure to use objective information (e.g. market research).
- Demonstrate barriers to entry. In describing the competitive landscape, show how your business model creates competitive advantages, and – more importantly – defensible barriers to entry.
Goal of the marketing plan: Describe how your company will penetrate the market, deliver products/services, and retain customers.
- Focus on the 4 P’s. They are: Products, Promotions, Price, and Place.
- Products. Detail all current and future products and services – but focus primarily on the short-to-intermediate time horizon.
- Promotions. Explain exactly which marketing/advertising strategies will be used and why.
- Price. Be sure to provide a clear rationale for your pricing strategy.
- Place. Explain exactly how your products/services will be delivered to your customers.
- Detail your customer retention plan. Explain how you will retain your customers, whether through customer relationship management (CRM) applications, building network externalities, introducing ongoing value-added services, or other means.
- Define your partnerships. From an investor’s perspective, what partnership you have with whom is not nearly as important as the specific terms of the partnership. Be sure to document the specifics of the partnerships (e.g. how it will work, the financial terms, the types of customer leads expected from each partner, etc.).
Goal of the operations plan: Present the action plan for executing on your company’s vision.
- Concept vs. reality. The operations plan transforms the business plan from concept into reality. Investors do not invest in concepts; they invest in reality. And the operations plan proves that the management team can execute on your concept better than anybody else.
- Everyday processes. Detail the short term processes and systems that provide your customers with your products and services.
- Business milestones. Lay out the significant long-term business milestones for the company, and prove that the team will execute on the long-term vision. A great way to present the milestones is to organize them into a chart with key milestones on the left side and target dates on the right side.
- Be consistent. Make sure that the milestone projections are consistent with the rest of the business plan – particularly the financial plan.
- Be aggressive but credible. Presenting a plan in which the company grows too quickly will show the naiveté of the management team, while presenting too conservative a growth plan will often fail to excite an early stage investor (who typically looks for a 10X return on her investment).
Goal of the financial plan: Explain how your business will generate returns for your investors.
- Detail all revenue streams. Be sure to include all revenue streams. Depending on the type of business, these may include sales of products/services, referral revenues, advertising sales, licensing/royalty fees, and/or data sales.
- Be consistent with your pro-forma statements. Pro-forma statements are projected financial statements. It is critical that these projections reflect the other sections of your business plan.
- Validate your assumptions and projections. The financial plan must detail your key assumptions, and it is critical that these assumptions are feasible. Be sure to use competitive research to validate your projections and assumptions versus the reality in your market place. Assessing and basing financial projections on those of similar firms will greatly validate the realism and maturity of the financial projections.
- Detail the uses of funds. Understandably, investors want to know what, specifically, you plan to do with their money. Uses of funds could include expenses involved with marketing, staffing, technology development, office space, among other uses.
- Provide a clear exit strategy. All investors are motivated by a clear picture of your exit strategy, or the timing and method through which they can “cash in” on their investment. Be sure to provide comparable examples of firms who have successfully exited. The most common exits are IPOs or acquisitions. And while the exact method is not always crucial, the investor wants to see this planning in order to better understand the management team’s motivation and commitment to building long-term value.
Above all, the business plan is a marketing document that helps to sell the investor on the business opportunity, the management team, the strategy, and the potential for significant return on investment.
Raising venture capital is a difficult and time-intensive challenge. There is no easy shortcut or silver bullet. However, you can greatly improve your chances of raising venture capital by writing a business plan that speaks directly to the investor’s perspective.
Ready to get started? Download Growthink's business plan template and finish your business plan today.
Since 1999, Growthink's professional business plan writers and investment bankers have assisted more than 2,000 clients in launching and growing their businesses, and raising more than $1 billion in growth financing.
Need help with your business plan?
Speak with a professional business plan writer today.
Raising money from individual "angel" investors?
Contact our private placement memorandum experts.
Or, if you're developing our own PPM, consider using Growthink's new private placement memorandum template.
Written by Pete Kennedy on Wednesday, April 9, 2008
1. To prove that you’re serious about your business. A formal business plan is necessary to show all interested parties -- employees, investors, partners and yourself -- that you are committed to building the business.
2. To establish business milestones. The business plan should clearly lay out the long-term milestones that are most important to the success of your business. To paraphrase Guy Kawasaki, a milestone is something significant enough to come home and tell your spouse about (without boring him or her to death). Would you tell your spouse that you tweaked the company brochure? Probably not. But you'd certainly share the news that you launched your new website or reached $1M in annual revenues.
3. To better understand your competition. Creating the business plan forces you to analyze the competition. All companies have competition in the form of either direct or indirect competitors, and it is critical to understand your company's competitive advantages.
4. To better understand your customer. Why do they buy when they buy? Why don’t they when they don't? An in-depth customer analysis is essential to an effective business plan and to a successful business.
5. To enunciate previously unstated assumptions. The process of actually writing the business plan helps to bring previously "hidden" assumptions to the foreground. By writing them down and assessing them, you can test them and analyze their validity.
6. To assess the feasibility of your venture. How good is this opportunity? The business plan process involves researching your target market, as well as the competitive landscape, and serves as a feasibility study for the success of your venture.
7. To document your revenue model. How exactly will your business make money? This is a critical question to answer in writing, for yourself and your investors. Documenting the revenue model helps to address challenges and assumptions associated with the model.
8. To determine your financial needs. Does your business need to raise capital? How much? The business plan creation process helps you to determine exactly how much capital you need and what you will use it for. This process is essential for raising capital for business and for effectively employing the capital.
9. To attract investors. A formal business plan is the basis for financing proposals. The business plan answers investors' questions such as: Is there a need for this product/service? What are the financial projections? What is the company's exit strategy?
10. To reduce the risk of pursuing the wrong opportunity. The process of creating the business plan helps to minimize opportunity costs. Writing the business plan helps you assess the attractiveness of this particular opportunity, versus other opportunities.
11. To force you to research and really know your market. What are the most important trends in your industry? What are the greatest threats to your industry? Is the market growing or shrinking? What is the size of the target market for your product/service? Creating the business plan will help you to gain a wider, deeper, and more nuanced understanding of your marketplace.
12. To attract employees and a management team. To attract and retain top quality talent, a business plan is necessary. The business plan inspires employees and management that the idea is sound and that the business is poised to achieve its strategic goals.
13. To plot your course and focus your efforts. The business plan provides a roadmap from which to operate, and to look to for direction in times of doubt. Without a business plan, you may shift your short-term strategies constantly without a view to your long-term milestones.
14. To attract partners. Partners also want to see a business plan, in order to determine whether it is worth partnering with your business. Establishing partnerships often requires time and capital, and companies will be more likely to partner with your venture if they can read a detailed explanation of your company.
15. To position your brand. Creating the business plan helps to define your company's role in the marketplace. This definition allows you to succinctly describe the business and position the brand to customers, investors, and partners.
16. To judge the success of your business. A formal business plan allows you to compare actual operational results versus the business plan itself. In this way, it allows you to clearly see whether you have achieved your strategic, financing, and operational goals (and why you have or have not).
17. To reposition your business to deal with changing conditions. For example, during difficult economic conditions, if your current sales and operational models aren’t working, you can rewrite your business plan to define, try, and validate new ideas and strategies.
18. To document your marketing plan. How are you going to reach your customers? How will you retain them? What is your advertising budget? What price will you charge? A well-documented marketing plan is essential to the growth of a business.
19. To understand and forecast your company’s staffing needs. After completing your business plan, you will not be surprised when you are suddenly short-handed. Rather, your business plan provides a roadmap for your staffing needs, and thus helps to ensure smoother expansion.
20. To uncover new opportunities. Through the process of brainstorming, white-boarding and creative interviewing, you will likely see your business in a different light. As a result, you will often come up with new ideas for marketing your product/service and running your business.
Since 1999, Growthink's business plan experts have assisted more than 1,500 clients in launching and growing their businesses, and raising more than $1 billion in growth financing.
Need help with your business plan?
Written by Dave Lavinsky on Wednesday, April 9, 2008
Seth Godin’s Purple Cow
has a relatively simple premise that new products need to be truly remarkable in
order to succeed. His book is packed with great examples and
In this video, Godin starts off by
explaining the failure of the sliced bread machine and explaining that ideas
that spread, win. Worth watching:
Written by Pete Kennedy on Wednesday, April 2, 2008
Over the last thirty years, baseball statistician Bill James has revolutionized the way that players, managers and fans think about statistics in baseball. By carefully analyzing statistics, James has dispelled numerous myths and has shifted the Boston Red Sox management’s decision-making process from one based on intuition and “gut” to a rigorously fact-based approach.
What has been the result? After decades of loss and heartbreak, the Red Sox have won two World Series Championships in the past 5 years.
Bill James’ analyses have dispelled many myths and have helped both the Red Sox and much of the industry focus on proven measures of performance. For example, James was a leading force in emphasizing the significance of on-base percentage over a player’s batting average. On-base percentage, James argues, is a more significant statistic, since batting average fails to account for bases gained from walks.
Regarding batting strategy, James says that the order of the line-up is inconsequential to overall performance, and that the concept of a “clutch” hitter is nonsense.
On the subject of a player’s lifetime performance, James concluded that the “prime” years of a baseball player’s career are his mid-late 20s. The Red Sox took James’ recommendations into account when deciding against re-signing star player Johnny Damon.
Regarding pitching strategy, James argues that “closers” – pitchers traditionally brought in during the final inning(s) of a game – should instead enter at critical moments when a team’s lead is at stake (e.g. perhaps in the 6th inning), rather than waiting longer.
What does all of this have to do with business building and entrepreneurship?
James makes a compelling case that all businesses – not just professional baseball teams – can benefit from careful statistical analysis. Such analysis can dispel unfounded theories, identify significant measures of performance, and illuminate creative, counter-intuitive strategies to bolster a business’ competitive advantage.
James’ fact-based analytical approach is especially valuable for emerging companies who are competing against larger, more established businesses.
If Bill James were to analyze your industry or your business operations, what myths would he dispel? What performance benchmarks would he stress? What strategies would he recommend?
- Bill James was profiled on CBS’ 60 Minutes last Sunday. You can read more about the episode and watch a clip here.
- An excellent book on this topic of statistical analysis is Competing on Analytics: The New Science of Winning by Thomas H. Davenport and Jeanne G. Harris. It's available for sale on Amazon here.
Written by Growthink on Tuesday, March 25, 2008
We just released a white paper titled "Secrets of Investing in Startup and Emerging Companies
." It provides tips and advice for those looking to make early stage investments in private companies.
We're releasing the report in the midst of strong "angel" investing activity in the United States. According to the University of New Hampshire's Center for Venture Research, in 2006, there were approximately 234,000 active individual angel investors and approximately 49,500 private companies which received funding from individual investors.
Early stage angel investment can produce stratospheric returns on investment. Our report cites the famous example of Google's first private investor, Andy Bechtolsheim, who wrote a $100,000 check to Google in 1998 when it was an early stage private company. That $100k investment grew to be worth $1.5 billion.
And, according to more than 20 years of data collected by Thomson Financial, early and seed stage private company investing has over the long-term, outperformed all other investment classes -- with average annual returns of over 20.6%.
The report provides an overview of private investing, including its benefits and risks, and key advice for successfully investing in early stage private companies, including:
- How to Find, Evaluate, and Profit from Early Stage Investment Opportunities
- How to Position Yourself to Earn Outsized Returns
- How to Mitigate Your Risk Through Diversification and Investment Monitoring
To download the report, please follow this link: Secrets of Investing in Startups and Emerging Companies.
Written by Tom Zeleznock on Wednesday, March 19, 2008
Many musicians are happy just creating music and enjoying
the lifestyle that being a famous musician provides. However, a
lot of pop, rap & rock stars have
interests beyond music, including a passion for entrepreneurship.
Here is a list of the 25 most impressive musician
entrepreneurs. While it’s tough to
compare people in different fields, here are some of the factors that weighed
heavily for these rankings:
- Diversity. When it comes to
musicians, there are
certain ventures that are more popular than others (as evidenced by the
number of clothing lines you’ll see below). Bonus points
for anyone willing to try
artist’s DIY attitude. In other
words: How personally involved are
they in these entrepreneurial ventures?
Do they take an active role, or do they just lend out their name
and let others do the dirty work?
Here we go…
25) Benji & Joel
The brothers of Good Charlotte, who once sang negatively
about the “Lifestyles of the Rich & Famous,” made themselves both rich and
famous with their music and their clothing line. The Maddens
started MADE Clothing in 2005,
and eventually renamed the company DCMA Collection after expanding into hats,
belts and other accessories. MADE/DCMA
has become very popular with celebrities such as Paris Hilton, as well as
artists and fans within the pop/punk music genre.
24) Kanye West
Kanye dropped out of art school and made a name for himself
in the music business, first as a producer and then as a solo artist.
Since achieving success, Kanye has set up his
own record label (GOOD Music) and written a book (Thank You and You’re
Welcome! - due in 2008). He also plans
to open a café in Washington
D.C., with some help from his
Pharrell Williams made a name for himself producing, but he
also released hits with his group N.E.R.D.
Known for his fashion as well as his music, Pharrell started both a
clothing line (“Billionaire Boys Club”) and a footwear line (“Ice Cream”).
These ventures uniquely fuse rock, hip hop
and skateboarding culture.
22) Alicia Keys
In 2006, a 24-year old Alicia Keys started her own
production company and signed a deal to produce a sitcom for the CW
Network. Keys, who has been described as a “workaholic” and an “independent person,”
also acts as the spokesperson for various charities. She has acted
in a number of TV shows and
movies. Keys also co-founded KrucialKeys
Enterprises, a musical production and songwriting company.
In 2002, electronic artist Moby and his girlfriend opened a
café called TeaNY in Manhattan’s Lower East Side.
The vegetarian/vegan tea café was designed to be a hangout for New
Yorkers, but eventually grew into a major attraction. TeaNY
features about 100 different types of
tea, all of which can be purchased online.
The company expanded
by partnering with White Knight Beverages and creating a line of bottled iced
A natural businessperson, Moby is known for his progressive
attitude toward licensing songs. He was
instrumental in lessening the “sell-out” stigma once frequently attached to
artists who licensed songs to commercials.
20) Dexter Holland
Dexter Holland, front man of The Offspring, started his own
independent punk label in 1994, right around the same time The Offspring was
experiencing mainstream success. Along
with co-founder and Offspring bassist Greg Kriegel, Holland has run Nitro
Records ever since, introducing new punk
artists to the mainstream while allowing them to maintain artistic
also found time to create his own brand of hot sauce (called “Gringo Bandito”),
which can be purchased online or in grocery stores across California.
19) Gene Simmons
Since the inception of KISS several decades ago, Gene
Simmons has sold the KISS name to every product imaginable, from KISS checkers
to KISS bowling balls to the KISS Kasket (yes, that is a real
fact, Simmons has approximately 2,500 licensing
deals in total. When not making money from licensing, Simmons
has kept busy with a variety of entrepreneurial ventures, including his own
record label, TV shows and autobiographies.
In addition to fronting U2 for the past three decades and
working as a political activist, Bono has undertaken a number of business
ventures. In 1992, Bono and band mate Edge purchased
The Clarence, a two-star Dublin
hotel. They did a complete renovation
and turned The Clarence into a luxury 5-star hotel. In the early
2000s, Bono and a handful of
elite businessmen founded Elevation Partners, a private equity firm focusing on
intellectual property. To date Elevation
has invested over a billion dollars in various media projects.
Bono also unveiled his own clothing line in 2005. The line of
blazers, t-shirts and jeans was
created by Bono, his wife Ali, and designer Rogan. The clothing
line was designed to provide jobs
and money for impoverished citizens of Africa.
17) Gwen Stefani
In 2004, Gwen Stefani founded L.A.M.B., a fashion line
heavily influenced by Asian and Central American culture. The
L.A.M.B. name comes from Stefani’s first
solo album, and Stefani is involved with all facets of production.
In 2005, Stefani branched out into
accessories. She also created her own
line of cell phones and cameras. Her
latest venture is a fragrance line, launched in 2007.
16) Queen Latifah
Dana Owens, known to most as Queen Latifah, was a
trendsetter for rappers and musicians-turned-actors. Owens is
President of Flavor Unit
Productions, and has production credits for a bunch of films and TV shows.
She has hosted her own talk show, starred in
a sitcom, acted in several movies, and written an autobiography.
Owens is also a spokesperson for Cover Girl
cosmetics, where she created her own make-up line for the company.
15) David Bowie
David Bowie was ahead of his time as a musician, and when he
became an entrepreneur, that didn’t change.
started a technology company and an Internet service provider in the late 90s,
making him one of the first musicians to fully realize the power of the
web. In the early 2000s, Bowie started his own
record company to free himself of the corporate structure of his previous
label. He also runs a website where art
students can sell their work without the burdens of a traditional art gallery
days, Bowie uses
his website (www.davidbowie.com) as a
promoting the artists on his label.
Even when she was part of Destiny’s Child, Beyoncé was known
for her style, so it’s no surprise that she formed her own fashion line, House
of Deréon, in 2004. Beyoncé made House
of Deréon into a popular worldwide brand by promoting it on “Oprah” and “The
Tyra Banks Show.” Beyoncé even snuck a
plug into one of her songs, singing “Shake your derriere in them Deréons” on
the track “Get Me Bodied.”
In addition to being an entrepreneur, Beyoncé also makes a
ton of money from sponsorships with companies such as Pepsi, L’Oreal, Emporio
Armani, Samsung, American Express and DirecTV.
Her net worth is currently in the neighborhood of $300 million.
13) Victoria Beckham
Even though Victoria Beckham was in one of the most
successful pop groups ever, she’s just as well known for being a style
icon. In 2004, Beckham designed a line
of jeans for Rock & Republic, and in 2006 she launched her own fashion line
called dvb Style. The dvb brand
specializes in jeans and eyewear, but Beckham has also launched a fragrance
line and designed handbags and jewelry for a Japanese company.
Beckham doesn’t just lend her name to these
products; she is
involved with all stages of production.
In addition to her fashion achievements, Beckham has written two books
and signed a reality TV deal. For all of
these accomplishments, Beckham was named Glamour Magazine’s “Entrepreneur of
the Year” in 2007.
12) Sammy Hagar
While many fans preferred David Lee Roth as singer, Sammy
Hagar is definitely the Van Halen front man you’d want running your
company. In the 80s, Hagar opened the resort Cabo Wabo
in Cabo San Lucas,
The resort has become such a hit that Hagar
opened a second location in Lake
UT, but what’s more impressive is
the brand of tequila it spawned. Hagar
created Cabo Wabo tequila in 1996 as the “house” liquor, but has since taken
the brand worldwide. In 2006, more than
140,000 cases of Cabo Wabo tequila were sold.
In 2007, Hagar sold 80% of the Cabo Wabo tequila brand to beverage
Gruppo Campari for $80 million.
Ludacris (a.k.a. Chris Bridges) has a business degree from Georgia State, and while he may have chose to
pursue music, that degree definitely came in handy. When Ludacris
couldn’t get a record deal, he
stopped trying to impress execs and started his own label instead.
For the past decade, Luda
has transformed Disturbing tha Peace Records from an avenue for releasing his
own records into a major company, signing hit artists such as Chingy and Bobby
Valentino. And while many rappers go
into acting, Ludacris has done it better than most, appearing to critical
acclaim in Crash, 2006’s Best
Picture. Ludacris will also be opening a $2.7 million upscale restaurant
in Atlanta in
April, and is
considering additional restaurants as well.
In the late 1970s, Madonna dropped out of college and moved
to New York
with just a few dollars. Today she is
worth approximately $325 million, mostly because of her business savvy.
Madonna is known for staying ahead of trends,
musically and in her business ventures.
Her 1992 book, Sex, was both
extremely controversial and extremely popular.
She has started an entertainment company, a publishing company, and a
clothing line. She is also an avid
investor. One business professor even called Madonna “America’s smartest businesswoman.”
9) Dr. Dre
In 1995, unhappy with the direction of his record label, Dre
formed his own label, Aftermath Entertainment.
Aftermath hit it big by signing popular artists such as Eminem and 50
Cent, and throughout the 2000s Dre has consistently been one of the top earners
in all of music. Dre, a long-time
director of music videos, has announced that he will begin producing films for Crucial
Films in the near future. He also
recently signed a partnership to “develop and market” both alcoholic and
non-alcoholic beverages for Drinks America.
Dre is well-known for being a perfectionist, a trait that has both
earned him respect and caused difficulties between him and other artists.
8) Justin Timberlake
Justin Timberlake has been omnipresent in the music business
since 1998, so it’s amazing that he has time to branch out into other
areas. Timberlake has opened a handful of
restaurants, including the new Southern Hospitality in New York City (seen in
Bowl commercial). He also, along with a
lifelong friend, launched a clothing line sold through Bloomingdales.
Recently Timberlake started his own record
label, Tennman Records. In a very
forward-thinking maneuver, he signed YouTube sensation Esmee Denters as the
label’s first artist.
7) Jennifer Lopez
After succeeding in music, J.Lo launched a clothing line in
2003, and made everything from jeans to lingerie to gloves. Lopez
also launched various accessory lines,
a jewelry line, 9 fragrance lines, and even a children’s clothing line,
resulting in a net worth of over $250 million.
In addition to her fashion businesses, Lopez owns a production company
Nuyorican Productions. The company has
produced both reality shows and feature films.
In 2002, Lopez opened a restaurant called Madre’s in Pasadena, CA. She helped design the
interior, and many of
the dishes are inspired by her grandmother’s cooking.
6) Jermaine Dupri
As a teenager, Jermaine Dupri became a successful producer when
he discovered the 12-year old rap sensations Kriss Kross. He went
on to produce hits by TLC, Janet
Jackson and Mariah Carey, among others. Along
the way, Dupri founded So So Def Recordings, and became one of the most
respected figures in music. He started
So So Def Sports, a sports management company.
He is owner and partner of 3 Vodka Distilling, makers of high-end
alcohol. In 2007, he released an
autobiography. And on top of these
entrepreneurial ventures, Dupri was appointed President of Island Records’ urban division in
5) Pete Wentz
Wentz, the bassist for Fall Out Boy and idol to teenage
girls worldwide, is also an active entrepreneur. Wentz runs his
own record label, Decaydence
Records, which is currently thriving despite the declining state of the music
industry. Wentz also started a clothing
company called Clandestine Industries in 2004.
His clothes are extremely popular amongst fans of the emo/punk genre.
Wentz is also an author, having published a fictional book
titled The Boy With The Thorn In His Side. Last year, Wentz
opened a bar in Manhattan called Angels
& Kings. He plans on putting out
another book and opening a hair salon in the near future.
4) Master P
Percy Miller, a.k.a. Master P, started No Limit Records in 1990 with $10,000 that
received from a wrongful death lawsuit after his grandfather passed away.
By the late 90s, Miller was a
multi-millionaire and No Limits was worth an estimated $661 million.
Among the company’s holding were a clothing
line, a film company, a sports management agency, and a real estate
company. Master P even tried to play in the NBA,
nearly making the Charlotte Hornets’ roster in 1998.
Master P’s career has cooled down considerably since the
90s, and No Limit was reorganized in 2004, but Miller is still involved in many
entrepreneurial ventures. He is
currently developing a video game, and he also releases music via a new label,
Guttar Music. Miller co-founded Guttar
Music along with his son Romeo, who is a freshman at USC.
3) 50 Cent
Curtis Jackson is one of the most popular and
rappers of the decade, but he’s actually made most of his money outside of
music. Jackson developed the G-Unit Clothing Company
in 2003 and signed a deal with Reebok to distribute his G-Unit sneaker
line. Along with the beverage company Glacéau, Jackson created and
marketed a Vitamin Water flavor called “Formula 50.” When Glacéau
was purchased by Coca-Cola in
2007, Jackson reportedly made over $100 million
after taxes as part of the deal.
Like so many others on this list, 50 has his own record label, G-Unit
Records. He is also an actor and author.
Shawn Carter co-founded Roc-A-Fella Records in 1996, and
over the past 12 years he has grown the fledgling label into a massive empire
both his musical abilities and his business savvy. Roc-A-Fella now
features a production company
and a Spanish music label, and the company also owns U.S.
distribution rights for the high-end
Scottish vodka Armadale. Jay-Z and
Roc-A-Fella famously created Roc-A-Wear, an incredibly popular clothing line
that was sold last year for
$204 million dollars.
In 2004, Jay-Z sold his stake in Roc-A-Fella and became
President and CEO of Def Jam Recordings, where he remained until a few months
ago. Jay is also part owner of the New
Jersey Nets, and the 40/40 Club in New
York City. Currently
worth over $500 million, Jay-Z shows no signs of slowing down.
There’s nothing Sean Combs can’t do. Diddy worked
his way from humble beginnings into Howard University’s
business school. There, he preferred to
spend his time working and making money rather than studying. By
age 21, Diddy was developing talent at
Uptown Records in New
while also working as a back-up dancer in music videos. In 1993 he
left Uptown to form Bad Boy
Records, which became home to many big-time artists, most notably Notorious
Bad Boy is now an empire worth hundreds of millions, and
Diddy has set up many other ventures.
His Sean John clothing line is extremely popular and worth
millions. His Unforgivable fragrance, launched in 2006,
sells for roughly $70 a
bottle. He serves as CEO of Blue Flame Marketing
and Advertising. Last year, Diddy signed
a deal with Diageo PLC to promote Ciroc Vodka.
He’ll have a major role in the vodka’s branding and marketing, and he’ll
split profits 50-50. Diddy also created
(and appears on) the TV series “Making Da Band.” In 2004 he acted
in the Broadway play “A
Raisin in the Sun,” and he recently starred in the Made-For-TV version of the
play. Diddy also owns restaurants in New
York and Atlanta
(named “Justin’s,” after his son). And
if that’s not enough, Diddy holds the
honor of having designed the Dallas Mavericks’ green alternate jerseys.
All of this amounts to a net worth of roughly
While music critics might tell you Diddy can’t rap, few
people will deny that he’s a truly amazing businessperson. As
Diddy himself once said, “Don’t worry if I
write rhymes… I write checks.”
Let us know what you think.
Who is the best musician entrepreneur, and what other musicians deserve
to be on the list?
Written by Dave Lavinsky on Tuesday, March 18, 2008
Over the past few weeks, I've spent a lot of time studying a
field called Landing Page Optimization. It's a fascinating field that deals
with improving landing pages, which are the pages of your website that visitors
come to either organically or through paid marketing initiatives. The goal of Landing
Page Optimization is to maximize conversions (e.g., sales, newsletter signups,
etc.) of these visitors.
One of the guiding principles of landing page optimization
is that landing pages need to be simple. If there is too much information on
the page, the reader gets confused and either clicks the back button or closes
This principle is the same as a guiding principle of
business plan development; mainly that the plan, and particularly the executive
summary, needs to present the business concept concisely so that the audience
quickly understands it. If not, they will simply discard the business plan.
Interestingly a concise message might not only improve your
business plan and your landing page, but your entire business’ success.
Consider the case of Google. The Google homepage has always had very little
text on it. In fact, if you go to it, it doesn’t even say that it is a search engine.
But, by having a big empty box in the middle and having a button underneath it
that says “Google Search”, it is pretty intuitive that Google is a search
Now, when someone was referred for the first time to Google
over the past few years and came to Google.com, what do you think they did?
Well, due to its simplicity, I think we can assume that nearly all people who
came to Google.com typed in a search term and hit the search button. Then, they
instantly saw high quality search results and were sold on the fact that Google
is a great search engine.
So, by keeping their landing page and business
concept/proposition extremely simple, Google was able to get people to try its
product. Because the product is high quality, those trials resulted in loyal
While there are many examples out there, one interesting
company that I think could really improve its business plan, landing page, and
thus chance of success is SpinVox. I first read about SpinVox in this Guy
Kawasaki post in which he says, “This service translates voicemail to text
and then sends a text message to your phone and/or an email to your computer.”
While Guy Kawasaki does a great job clearly explaining
SpinVox in this 22 word sentence, I don’t think SpinVox does. On its homepage, SpinVox has the following text:
"SpinVox captures spoken messages
and cleverly converts them into text. It then delivers your message to a destination
of your choice – inbox, blog, wall or space. Right in the moment. Giving you
the power to Speak Freely... Simply put, we do one thing – turn
voice into text. But it's one thing that can be applied to the many ways you
communicate, from your Voicemail to your Blog. Use the finder below to find the
right one for you."
If I were to come to this page without Guy Kawasaki’s clear
explanation, I would most likely leave without trying the service. It neither
clearly explains the most common use nor the value proposition of the service.
To sum up, KEEP IT SIMPLE. Use simplicity to hook the investor, the customer, the partner, or whoever else you are trying to influence. Once hooked, over time (which could be as little as 2 minutes later), you can tell the full story.
Written by Pete Kennedy on Sunday, March 16, 2008
Last week, several theater chains and studios announced they were
nearing an estimated $1.1 billion financing deal to upgrade cinemas to
digital technology. This investment is expected to boost attendance and
save Hollywood billions of dollars in various annual print and delivery
"We're hopeful that in the second quarter we will get it all arranged,"
said Travis Reid, chief executive of Digital Cinema Implementation
DCIP is a joint venture between Regal Entertainment Group, Cinemark Holdings Inc and AMC Entertainment Inc.
Growthink assisted in the development of the strategic business plan for the joint venture.
Read more about DCIP and digital cinema technology here and here.
Written by Growthink on Thursday, March 13, 2008
It's always said that access to funds is the life blood of any company. Going out and securing outside financing to help grow a business is an important step in the life of an emerging organization. Keep in mind, the process of commercial borrowing is best done in preparation for needing the capital, rather than when the request is made in a dire situation. Here are some necessary tips to keep in mind when preparing to seek a loan.
1. Bookkeeping – Install accounting software so you can produce up to the moment financial reports including Balance Statement and Profit Loss Statement. These reports will give the Lender a snapshot of the current financial condition of the company. It also assures that you know enough about accounting to understand the internal cash flows.
2. Customer Credit – Show you have a process in place to check the credit of all your customers. Learn how to avoid issuing credit for more than they are qualified. Sales to customers are what business is all about. Knowing the difference between a solid customer and a bad credit is crucial to long term stability.
3. Borrowing Amount – Know how much capital the business requires to operate. Whatever the business does, whether provide a service or sell a product, you must be aware of the profit margin on these activities. You should have a solid business plan in place with budgets where you can determine the potential short fall and take precautions through financing.
4. Purpose – Your business plan needs to be able to show a purpose for using the capital. This must be very specific. The more details you can provide on where the loaned money will be employed, the better the Lender can determine the viability of your plan. By admitting potential problems and offering contingency suggestions, your business plan will have added dimension.
5. Repayment – In the business plan, give a reasonable timeline for the repayment of the loan. Preparing cash flow Performa will show the road map to ultimate success and profitability. Again, incorporating contingency budgets will help to mitigate potential risk.
6. Team – Make sure the owners, managers have strong bio’s and thorough knowledge of the industry. The Lender must have confidence that the operators of the business plan can perform based on their experience.
7. Loan package – Do your homework, and put all this together with your business plan into a binder so a lender can easily see who, what, where, how this company will deal with a loan. By being pro-active through the entire process you will become a more attractive prospective client to a Lender, and therefore will have some bargaining leverage with regards to the terms of the loan. It’s always a good idea to get involved with a professional to help you through the process.
Guest post by Creative Capital Associates, a leader in account receivables financing.
Learn more about commercial financing here.
Written by Tom Zeleznock on Wednesday, March 12, 2008
There is no simple formula for creating a successful business. Luckily, there is an easy way to improve your chances.
And that’s by listening to the wisdom of those who have done it already.
With that in mind, here are 25 quotes from famous entrepreneurs…
1) "If you can dream it, you can do it."
-Walt Disney, founder of The Walt Disney Company
2) "Business opportunities are like buses, there's always another one coming."
-Richard Branson, founder of Virgin Enterprises
3) “Capital isn't that important in business. Experience isn't that important. You can get both of these things. What is important is ideas.”
-Harvey Firestone, founder of Firestone Tire & Rubber Co.
4) “Your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by dogma - which is living with the results of other people’s thinking. Don’t let the noise of other’s opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.”
-Steve Jobs, co-founder of Apple and Pixar
5) “Find your passion… then it is no longer work!”
-L.A. Reid, co-founder of LaFace Records
6) “I had to make my own living and my own opportunity! But I made it! Don't sit down and wait for the opportunities to come. Get up and make them!"
-Madam C.J. Walker, creator of beauty products and the first female self-made millionaire
7) “The critical ingredient is getting off your butt and doing something. It’s as simple as that. A lot of people have ideas, but there are few who decide to do something about them now. Not tomorrow. Not next week. But today. The true entrepreneur is a doer, not a dreamer.”
-Nolan Bushnell, founder of Atari & Chuck E. Cheese’s
8) “The key is to just get on the bike, and the key to getting on the bike… is to stop thinking about ‘there are a bunch of reasons I might fall off’ and just hop on and peddle the damned thing. You can pick up a map, a tire pump, and better footwear along the way.”
-Dick Costolo, founder of Feedburner.com
9) “The important thing is not being afraid to take a chance. Remember, the greatest failure is to not try.”
-Debbi Fields, founder of Mrs. Fields Cookies
HARD WORK vs. LUCK
10) “Genius is 1% inspiration, and 99% perspiration.”
-Thomas Edison, founder of General Electric (GE)
11) “I made a resolve then that I was going to amount to something if I could. And no hours, nor amount of labor, nor amount of money would deter me from giving the best that there was in me. And I have done that ever since, and I win by it. I know.”
-Colonel Sanders, founder of KFC
12) “Nobody talks of entrepreneurship as survival, but that's exactly what it is.”
-Anita Roddick, founder of The Body Shop
13) “Don’t ever let anyone tell you that something is too competitive. Once you subtract the people who don’t work very hard, or the people who aren’t as good as you, your competition shrinks dramatically.”
-Maggie Mason, founder of Mighty Goods
14) “Life is really simple as far as I’m concerned. There is no luck, you work hard and study things intently. If you do that for long and hard enough you’re successful.”
-Jason Calacanis, founder of Weblogs, Inc.
15) "When you reach an obstacle, turn it into an opportunity. You have the choice. You can overcome and be a winner, or you can allow it to overcome you and be a loser. The choice is yours and yours alone. Refuse to throw in the towel. Go that extra mile that failures refuse to travel. It is far better to be exhausted from success than to be rested from failure."
-Mary Kay Ash, founder of Mary Kay Cosmetics
16) “It doesn’t matter how many times you fail. It doesn’t matter how many times you almost get it right. No one is going to know or care about your failures, and neither should you. All you have to do is learn from them and those around you because all that matters in business is that you get it right once. Then everyone can tell you how lucky you are.”
-Mark Cuban, owner of the Dallas Mavericks, co-founder of Broadcast.com, founder of HDNet
17) “Entrepreneurs are risk takers, willing to roll the dice with their money or reputation on the line in support of an idea or enterprise. They willingly assume responsibility for the success or failure of a venture and are answerable for all its facets.”
-Victor Kiam, owner of Remington Products
18) “The best reason to start an organization is to make meaning; to create a product or service to make the world a better place.”
-Guy Kawasaki, venture capitalist, CEO of Garage Technology Ventures
19) “A friendship founded on business is a good deal better than a business founded on friendship.”
-John D. Rockefeller, founder of Standard Oil
20) “An entrepreneur tends to bite off a little more than he can chew hoping he’ll quickly learn how to chew it.”
-Roy Ash, co-founder of Litton Industries
21) “I've been blessed to find people who are smarter than I am, and they help me to execute the vision I have.”
-Russell Simmons, founder of Def Jam
22) “One of the unique things we small companies have over the big guys is the ability to establish personal relationships. Big companies really can't do that. You read about effective organizations, learning organizations, lean and mean organizations, but small companies can be virtuous. We as small companies can have virtue because we as small companies are basically the embodiment of one or two people, and people can have virtue, while organizations really can't."
-Jim Koch, founder of Boston Beer Company
23) “Experience taught me a few things. One is to listen to your gut, no matter how good something sounds on paper. The second is that you're generally better off sticking with what you know. And the third is that sometimes your best investments are the ones you don't make.”
-Donald Trump, real estate developer
24) “High expectations are the key to everything.”
-Sam Walton, founder of Wal-Mart
25) “I find that when you have a real interest in life and a curious life, that sleep is not the most important thing.”
-Martha Stewart, founder of Omnimedia
Since 1999, Growthink's professional business plan consultants have
assisted more than 1,500 clients in launching and growing their businesses, and
raising more than $1 billion in growth financing.
- Need help with your business plan?
- Looking to raise venture capital?
Speak with a
business plan writer today!