Written by Dave Lavinsky on Tuesday, January 13, 2009
What traits and skills really make Richard Branson, Bill Gates, Donald Trump, and countless other entrepreneurs so successful?
Written by Dave Lavinsky on Monday, January 12, 2009
Just for a moment, consider the following press release headlines:
"Company X Receives Top Marks in Bloomberg Article..."
"Company X Ranked #1 Global Provider...Second Year Running"
"Company X Acquires Leading Provider of..."
"Company X Launches Philippines Operations"
"Company X Names Industry Veteran as Vice President..."
Now imagine what it would feel like to be the founder of Company X. For one Growthink client, Liam Brown, this isn't a dream - it's a reality.
A few years ago, Liam had the vision to come to Growthink for assistance with a business plan for his vision - a company named Integreon. Liam, with a solid business plan, turned his vision into a business, raised capital, and attracted a highly motivated work force. Today, Integreon is a leading business process outsourcing (BPO) service firm that employs over 2000 people, with offices ranging from Mumbai to Fargo and New Delhi to midtown Manhattan.
Even with an amazing business plan, heights and milestones like the ones listed above cannot be achieved without vision. Simply put, you must have a vision of where you want your business to be in the future. You must be able to communicate your vision in an exciting manner to employees and investors, so that they too share your vision and are motivated to help you achieve it.
Unlike your business plan, your vision doesn't provide a specific roadmap for your business. Rather, your vision paints a picture of what the your business strives to become in the future. A leader with a strong vision motivates his or her team to achieve this picture, regardless of the action plan that will be employed.
Vision provides motivation to both the leader and employees. It gives employees something that they can believe in and rally around. While it doesn't tell the employees exactly what to do to achieve it, having vision instilled in them helps positively mold their decision-making when problems must be solved that don't have clear answers.
A strong vision combined with a strong business plan is critical to the success of a growing venture. The vision motivates everyone to achieve success, while the plan guides them to where they need to go. In addition, the plan is significant in that it documents the vision. By "cementing" the vision on paper, the team gains more confidence that the vision will not be easily changed and that the organization is truly committed to achieving it.
Written by Dave Lavinsky on Friday, January 9, 2009
In my previous post, I explained how getting an outside perspective improves your chances of raising capital.
Related post: How Business Plan Writers Help You Raise Capital
Written by Dave Lavinsky on Thursday, January 8, 2009
Yesterday I was looking at an online forum that deals with all aspects of entrepreneurship. I quickly found the capital-raising section and started reading a post from someone who was considering outsourcing the development of their business plan to an outside firm.
Written by Dave Lavinsky on Wednesday, September 10, 2008
Are you looking to enter new markets or better serve your existing markets? If so, here's a technique that will allow you to gain insightful market research and learn best practices REALLY QUICKLY.
Written by Dave Lavinsky on Wednesday, April 30, 2008
On 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?
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 the browser.
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 engine.
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 users.
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:
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 Dave Lavinsky on Thursday, March 6, 2008
There have been many articles written on the subject of why businesses fail, and most of them point to the same reasons, such as:
These reasons are widespread and no doubt cause many businesses to fail. However, the reason for a company’s failure is not always something so obvious. Here are 6 lesser-known reasons why a business might fail.
Why do these reasons remain untold? Simple. Most of the time, the business owner doesn’t realize that these reasons are what caused their failure, and consultants generally don’t ask the kinds of questions that would identify them.
1) Focusing on Short-Term Profits Rather than Building Long-Term Value
It’s important to be profitable, but NOT when short-term profits come at the expense of the long-term value of the business and the lifetime value of the customer.
Here’s a real-life example: In the late 1990s, there was a franchise of a national smoothie shop located in West Los Angeles, CA. At this store, smoothies sold for about $4. They cost only around $1 to make, resulting in a solid profit. However, certain ingredients, like mangoes and berries, cost more than the other ingredients, such as juice and frozen yogurt. Since juice and frozen yogurt were cheap, the franchisee put more of these ingredients in their smoothies and less of the expensive ingredients. By doing this, their profit margin per smoothie grew by approximately 20 cents, which seemed great… on paper. Unfortunately for the store, customers weren’t satisfied with the taste of the lower cost smoothies, people stopped going there, and the store eventually went out of business.
As you can see here, it’s important to consider the lifetime value of a customer. Repeat business is way more valuable than short-term profits. Saving 20 cents on a smoothie today will cost you big in the long run.
(Another great example of this concept is Google giving preference to relevant ads in order to improve the user experience, even though there are less relevant advertisers willing to pay a higher price per click.)
2) Ego Business vs. Business Opportunity
The foundation of a good business is a good business opportunity. As an entrepreneur, you want to fill a need in the marketplace. Unfortunately, many businesses are started solely to fulfill an entrepreneur’s ego (or, to put it less harshly, to satisfy one of the entrepreneur’s interests).
This can often be seen in the restaurant & bar industry, where too many entrepreneurs open shop because it’s a “cool” thing to do. Such businesses rarely succeed.
3) Life distractions
The best ideas don’t always come between 9 and 5. A person might have a great idea while driving, or in the shower, or while working out. It’s moments like these when an entrepreneur leaves behind the day-to-day tasks of running a business and gains a better perspective of the big picture.
Sadly, there are a lot of things that can disrupt a person’s home life. Illness, death of a family member, divorce, relationship trouble, and problems with a child are just a few of the many issues that can affect a person’s mindset. When things like this occur, moments of clarity are replaced by stress and anxiety.
Many entrepreneurial ventures depend heavily on new ideas and creative thinking, and when an entrepreneur’s head isn’t clear, business can suffer.
4) Bad feedback & white lies
People like spending time with friends and family.
Unfortunately, when it comes to business, friends and family members don’t always give the best advice. This is especially true at the birth of a business. Nobody wants to be a buzz-kill. No one wants to tell an entrepreneur their idea is bad, or their location stinks, or anything else negative. Most people are conditioned to be supportive of their friends and family regardless of the situation.
Plus, nobody wants to be wrong. Imagine your friend has an idea that you think is terrible. You share your objections, but the friend goes ahead with the idea anyways, and it succeeds. Now you’ll always be the naysayer that never believed in them. Nobody wants to be that person.
That’s why you’ll rarely get honest, objective business advice from friends or family members. And yet, oftentimes friends and family are the first people entrepreneurs turn to for advice.
5) Maybe the owner is just a jerk
There are a lot of great people in the business world, but there are also some jerks. And these jerks sometimes start their own companies.
A jerk, in this case, is someone who a lot of people can’t get along with. Maybe it’s because they’re a super-perfectionist, or they yell a lot, or they demand that everything be done in a certain way, or they constantly complain. Or maybe they’re annoying in some other way.
The key is that nobody -- not employees, customers, partners, suppliers, clients, etc. -- wants to give 100% for a jerk. Clients and customers will be turned off, and employees will start cutting corners. Most people believe that life is too short, and don’t want to spend their time working with someone they can’t get along with.
6) The entrepreneur never took the full leap
In most new business attempts, the entrepreneur never leaves their day job, or they create a back-up plan, or they have a job lined up in case the new business fails. In these cases, failure IS an option, as the entrepreneur has a safety net to fall back on. In cases where failure is NOT an option, and the entrepreneur depends on the new business to provide food, shelter and clothing, the business has a greater chance of succeeding.
There’s a great example of this concept in this NY Times article. Xiang Yu was a third century (B.C.) General in the Chinese army. He led his troops into enemy territory by crossing the Yangtze River. Then, in order to inspire his troops, Xiang Yu took some unorthodox measures. He burned all of his troop’s ships and destroyed all of their cooking materials. This left the troops with only two options: Move forward and conquer the enemy, or perish. The maneuver did not make Xiang Yu very popular with his soldiers; nevertheless, the troops advanced and ultimately emerged victorious.
Xiang Yu’s methods might be a little drastic in this day and age, but the moral of the story is what’s important. Author Anita Roddick has said that entrepreneurship is a matter of survival, and the truth is, if you’re not totally committed to your business, your chances for success will be greatly diminished.
Since 1999, Growthink's professional business plan writers have assisted more than 1,500 clients in launching and growing their businesses, and raising more than $1 billion in growth financing.
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