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Black Coffee and Kicking the Furniture (Or, Why Writing a Decent Business Plan is So Hard).

Sunday, September 23rd, 2012

Black Coffee and Kicking the Furniture (Or, Why Writing a Decent Business Plan is So Hard).

Every year investors receive hundreds, thousands even, of business plans.  And most of them are hopeless.  Worse, they’re dull.  They ramble, they waffle, they pad.  They’re flat.  They do not engage.

Why?  It is, as they say, not rocket science (even if it’s about rocket science).  A quick rummage online will turn up good templates, and investors don’t hide what they seek.  So how come we miss the mark so often?

I believe it’s this:  Crafting a new business proposition is fundamentally a creative act.  As with a novel or a painting, there is no surefire route.  There are techniques but no algorithm.  Approaches but no ‘method’.

You size the market, scan the competitors, do your analysis and tot up the numbers.  But it’s in the fusion of all the elements that a business comes alive.  And that’s hard.  In all good business ideas, there is an element of magic, a creative step, that cannot be distilled to paint-by-numbers, to mere ‘work’.  It needs inspiration.  And inspiration comes hard if it comes at all.

Like good art, it’s easier to recognise than to produce.  It includes skill and discipline but goes beyond them.  And in the going beyond is where the black coffee and kicking the furniture come in.  Until at some point the fog finally lifts.  Everything snicks into place to the satisfying ‘pop’ of synapses forging a new connection, and your head clears. 

Sit back in your chair, and swap the coffee for a glass of something cold.

Why needing money is very often the symptom not the disease.

Tuesday, September 4th, 2012

It’s interesting how resistant this one seems to be.  I’ve lost count of how many times I’ve heard speakers say it, books say it, investors say it.   Opportunity starts with customers.   It’s obvious, right?  Yet it’s a perspective that seems to get lost time and again.  The how obscures the why.

I recently sat down with a very talented inventor. “We’re all ready” he said.  “We just need money.”  My alarm bells began dutifully to ring; shortage of capital is more often symptom than it is disease.  So was all he needed really money?

Well, in the narrow sense that they had a product development plan ready to whirr into action if someone put coins in, yes.  But in business terms, no.

As above, a PD plan doth not a business case make.  What was really needed was evidence someone would write cheques for the resulting product.   In this case, the oddity was that he actually had it; he just hadn’t realised its importance.  One potential customer had paid towards the product development, and another had told him he could sell hundreds of a specific variant of his idea.  But this was nowhere in the documents.

It’s embarrassingly simple but it bears repeating.  The first plank of a business case is evidence that someone will buy the product.   Crunchy evidence.  Evidence that cost something to give.  That evidence should go front and centre in the investment pitch.  Everything else is detail; the journey finishes with customers, but it also starts with customers.