Analyzing Customers in Your Business Plan

The Customer Analysis section must convey the needs of your customers, and demonstrate how your company satisfies those needs. This video teaches how to analyze your company's customers for the purpose of gaining credibility with investors.


Web 2.0... Still? Trends in Early Stage Financing

It's almost mid-way through 2008 and the investment ideas that VCs are excited about sound awfully reminiscent of those that were hot two, three years ago: digital media, social networking, Web 2.0 companies. In fact, when asking most VCs what sectors they are actively pursuing, the only one that sounds vaguely zeitgeisty is clean/green technology.

While the sectors that VCs are looking at may have remained the same over the past several years, their approach to them has changed. Very little "traditional" VC investing actually takes place anymore, so VCs need to be guaranteed returns of 200% or 300% of their investments in order to make a play. If your company can only offer 20% or 30% returns to an investor, it is better suited for an earlier stage investment from an angel investor or friends and family.

However, angel investors should always expect to get diluted in a valuation or further investment of the company. Some guidelines follow:

  • 20%-30% of a bridge loan should be expected to be given up as a discount to angels

  • With strategic capital, anywhere from 10%-50%, with an average of 20%-30% can be given up

Also, VCs anticipate company valuations to come down in line with the recent credit crunch, with an expectation that deal valuations will drop as credit markets tighten. Based on the current market environment, cash is king.

We Just Made $94 Billion Dollars... Now What?


Q: We just made $94 billion dollars this year. What should we do next?

Create a new business plan.

It's never too late to update your business plan.

Car manufacturer Nissan (NASDAQ: NSANY) demonstrated that fact this morning when they announced a new five-year business plan. With a projected mix of market expansion, cutting-edge technologies, and growing product lines, Nissan will strive to significantly increase per-share dividend, and achieve five percent revenue growth on average over the next five years.

The new strategy plan is called Nissan GT 2012, with "G" representing growth and "T" for trust. In addition to their product development goals, Nissan is also shining a light in-house, and will put effort into improving management, brand and service quality.

Typically, business plan creation is associated with up and coming ventures, or existing companies eager to expand into uncharted waters. Why then would Nissan, a company with clear expertise in the automobile arena, and which raked in over $94 billion last year, commit to such an intense overhaul?

Well, for starters, a business plan is a static document. There is no doubt that business plans are integral to the proper conceptualization of your business, the mapping of your desired financial trajectory, and the fabrication of the strategies you will implement and execute upon day in and day out. Much like your favorite jeans from high school, however, it is possible to outgrow your current business plan. In fact, it might be time for you to re-evaluate your current business strategy today.

While especially crucial for technology companies in industries like automotives or computer hardware, where revolutionary progress is made at a break-neck pace, even companies in more traditional areas might be in need of a refresher. For instance, a bank that did not create a strategy to institute secure online banking as an option for their customers may be in danger of losing customers to more tech-savvy competitors.

A new business plan can be just what's needed to refresh your approach and effectively restructure your business to gain competitive edge.


Business Plan Video: How to Write the Industry Analysis Section


This video teaches you how to create a convincing Industry Analysis section for your business plan that demonstrates a real need for your new product or service.





The Importance of Educational Marketing


There are many companies that can thrive following the tried and true methods of traditional marketing initiatives. If you are one of those companies, it makes sense to place yourself in the most familiar arenas, where potential customers expect to see you. That is, if your intention is to compete with Coca-Cola for mindshare, it is probably in your best interest to utilize bold advertisements in print and television media.

But many other companies are learning that traditional approaches are no longer sufficient to convey their message and effectively convert the casual shopper into a paying customer or even better, a brand evangelist. It used to be that you could distinguish your company through lowest prices or a sparkling slogan. Now, however, these old silver bullets will barely leave a dent in the mind of the modern consumer. What can your company do today to stand out above the noise and clutter?

Enter: Educational Marketing

Education-Based marketing is the act of creating marketing materials and executing on strategies that distinguish your company as a knowledgeable authority and resource in your area of expertise. Notice the inclusion of "resource", as it is uncharacteristic to antiquated marketing approaches. It follows the revised premise that to be an active and valuable participant in the information age, one must become an information center.

With multiple, seemingly identical solutions popping up everyday in various industries, those that will shine are those that can lend a hand to their audience, rather than using that same hand to bludgeon their audience with an exhausted sales pitch.

Author David Frey has outlined not only how the average customer has become numb to the sales pitch, but also the underlying goals and burgeoning techniques of Educational Marketing. Your mission, should you choose to accept it, is to flip the script, and focus on the questions of customers rather than the sensational hype associated with a typical sales pitch.

Say you were the owner of an oil change store. A standard approach to market your business would be to place ads that say:

Get Your Oil Changed Here for Just $14.95!

By integrating educational marketing into your marketing arsenal, you might instead try:

“A new study finds that changing your oil every three months adds $1,437.81 to the resale value of your automobile. Come in to find out the effect of oil changes on the resale value of YOUR automobile.”

The information and help you can provide your customer is the new hype. The emphasis of such techniques revolves around the establishment of trust. By assisting in the open sharing of information, you become an ally to your consumer, rather than the oft-avoided vacuum cleaner salesman.

One main concern that can come with Educational Marketing initiatives is "How do I monetize these new informed shoppers?" Frey goes on to map out the packaging of one's educational message through multimedia options such as video tapes, email courses, and seminars which can extend the dialogue and thus your marketing window of opportunity. Such long-term, or “drip” campaigns can have a tremendous impact on the duration of your trust-based relationship and the lifetime value of your prospective customers.

What is your educational message?


Writing the Company Analysis Section of Your Business Plan


This video teaches you how to create an effective company analysis section that will educate investors about your company’s history, past accomplishments, and unique qualifications.




Video: How to Write an Executive Summary


Watch the first installation of our new Business Plan Video series.

This video, "How to Write an Executive Summary," provides advice on how to create a compelling executive summary for your business plan.




New Business Plan Video Section on


We are proud to announce the launch of the Growthink Business Plan Video section within our Business Plan Help Center.

These videos walk you through each section of the business plan, providing expert tips and advice on how to construct your business plan to better stimulate, engage, and impress your audience.


Martin Conroy's Billion Dollar Story

storyOn a beautiful late spring afternoon, twenty-five years ago, two young men graduated from the same college. They were very much alike, these two young men. Both had been better than average students, both were personable and both - as young college graduates are - were filled with ambitious dreams for the future.

Recently, these men returned to their college for their 25th reunion.

They were still very much alike. Both were happily married. Both had three children. And both, it turned out, had gone to work for the same Midwestern manufacturing company after graduation, and were still there.

But there was a difference. One of the men was manager of a small department of that company. The other was its president.

What Made The Difference?

Have you ever wondered, as I have, what makes this kind of difference in people’s lives? It isn’t a native intelligence or talent or dedication. It isn’t that one person wants success and the other doesn’t.

The difference lies in what each person knows and how he or she makes use of that knowledge.

And that is why I am writing to you and to people like you about The Wall Street Journal. For that is the whole purpose of The Journal: to give its readers knowledge - knowledge that they can use in business.


The above story/sales letter, written by Martin Conroy, was used by the Wall Street Journal for 25 years starting in 1974. Doing the math regarding how many people this letter was sent to, the percentage of orders that came from it, and the subscription prices, it is estimated that this story resulted in $1 billion in sales for the paper.

So, what’s the point?

The point is that stories are an extremely effective, but often overlooked, sales tool that can allow emerging ventures to compete with large established companies. Stories allow companies to get their prospects involved in their message. It gets them excited. And then they want to learn more.

Here's an example of another startup who crafted a great story...


I’m about to tell you a true story. If you believe me, you will be well rewarded. If you don’t believe me, I will make it worth your while to change your mind. Let me explain.

Lynn is a friend of mine who knows good products. One day he called excited about a pair of sunglasses he owns. “It’s so incredible!” he said. “When you first look through a pair you won’t believe it.” What will I see? I asked. What could be so incredible?

Lynn continued. “When you put on these glasses your vision improves, objects appear sharper, more defined. Everything takes on an enhanced 3D effect and it’s not my imagination. I just want you to see for yourself.”


The story goes on to discuss all the benefits of Joe Sugarman’s BluBocker sunglasses… over 20 million pairs of which have now been sold!

Does your company have a great story?

13 Costly Feasibility Study Mistakes ...And How To Avoid Them


To make your new venture succeed -- whether you are creating a new product, constructing a hotel, or developing a community center -- you must convince investors and/or management to fund your initiatives.

Feasibility studies play a critical role in this early planning and fundraising process.

A feasibility study is a detailed investigation and research analysis of a proposed venture or development project. The purpose of a feasibility study is to determine whether it is technically and financially feasible to move forward with a new project.

An effective feasibility study demonstrates the following:

  • That your ideas are sound

  • That there is a need for your venture

  • That your execution plan is practical

To help you navigate through the feasibility study development process, we have just released a special report titled:

13 Costly Feasibility Study Mistakes – And How To Avoid Them

In this free report, you will learn:

  • The key mistakes to avoid when conducting a feasibility study

  • The important difference between “data” and “intelligence”

  • How entrepreneurial over-confidence can doom a feasibility study

Click here to download the report.

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