According to various government statistics, up to 80% of businesses will fail within their first five years of operation. That number is staggering to me.

At the same time, when I look at most business owners, most of them do not have a business plan for where they want to go. When you ask entrepreneurs why they don’t have a business plan, most of them will say something like: “it’s too much work”, “I’m not trying to raise money”, “it’s all in my head already”, or “my business changes too often for a business plan to be worthwhile.”

Sound familiar?

While it’s true that a business plan can be a lengthy document that takes away from you running your business, a lack of a plan can lead you in all sorts of different directions and take your focus away from being able to build a solid company.

There are three types of business plans that I have found useful over my career as an entrepreneur. I will discuss one today and finish with the other two next week.

1) Starting a new business

Everyone has ideas about what would make a successful product or service but there are a lot of unknown quantities when you are first thinking about creating a new business.

You should do a full business plan that looks at how you are going to make money, who your competition is, how you are going to be different, what your big vision for your company will be, what your mission is, and what steps you are going to take to get there.

The plan will change as you start running the business - especially a lot of the operational details - but the initial plan will help you decide if you have a real opportunity on your hands or not.

I suspect that a lot of new entrepreneurs fail because they don’t do the proper research before getting started. They don’t know if they will be able to make money or not, have no idea how to market their products, and don’t do any kind of competitive analysis. Suddenly they start the business, realize it’s a lot harder than they thought it would be, lose a lot of money, and close down.

Every entrepreneur should do a full business plan before getting started to help understand if the idea really has any legs or if it’s going to be a dud. The extra energy spent preparing at the beginning will pay off handsomely for you down the line.

I will continue with the two other types of business plans entrepreneurs should create in Part 2 of this series next week.

Did you write a business plan for your company when you first started? Are you planning on doing it for your new business idea?

Evan Carmichael

“I am simply trying to struggle through life; trying to do God’s bidding,” says George Lucas.

Lucas’ struggle first began on May 14, 1944 when he was born in the relatively humdrum city of Modesto, California to parents George Walton Lucas, Sr. and Ellinore Bomberger Lucas. He grew up on a walnut farm and was destined to take over the small office supply store owned by his father.

The young Lucas didn’t go to many movies nor did his family have a TV until he was 11-years old. Little did his parents, or anyone else know that Lucas would go on to become one of the world’s most successful and well-respected filmmakers in history.

From quiet, humble beginnings in Modesto, California to a multi-million dollar ranch and hub of activity in Nicasio, Lucas has taken the film industry by storm.

From his technological innovations to his business strategies to his beloved science fiction androids, Lucas has become a household name and an immortal part of American cinematic history. “Good luck has its storms,” Lucas once said. But, his success has had little to do with luck. How did he do it?

“When I first got to college, I was very interested in the social sciences, anthropology, sociology, psychology, those kinds of things. And I was still interested in art and photography. I didn’t know that I could actually put them all together in one occupation and love it.

Suddenly everything came together in one place. All my likes, everything I actually seemed to have talent for was right there.

I’m extremely grateful that I discovered my passion. I love movies. I love to watch them, I love to make them.

I thought it [Star Wars] was too wacky for the general public. Right or wrong this is my movie, this is my decision, and this is my creative vision, and if people don’t like it, they don’t have to see it.

You have to find something that you love enough to be able to take risks, jump over hurdles and break through the brick walls that are always going to be placed in front of you. Otherwise, you’ll stop at the first giant hurdle.

Talent is a combination of something you love a great deal, something you can lose yourself in – something that you can start at 9 in the morning, look up from your work and it’s 10 o’clock at night – and something that you have a natural ability to do very well.

My first six years in the business were hopeless. There are a lot of times when you sit and you say ‘Why am I doing this? I’ll never make it. It’s just not going to happen. I should go out and get a real job and try to survive’.

If you want to be successful in a particular field of endeavor, I think perseverance is one of the key qualities. You have to have a thick enough skin to cope with criticism.

The secret is not to give up hope. It’s very hard not to because if you’re really doing something worthwhile I think you will be pushed to the brink of hopelessness before you come through the other side. You just have to hang in through that.

You simply have to put one foot in front of the other and keep going. Put blinders on and plow right ahead.“

Would you push for over six years, face constant failure, and continue trying to build your business not knowing if it will ever become anything substantial?

Evan Carmichael

Most entrepreneurs start their businesses up on a shoe string budget and end up having to negotiate smartly to stretch their dollars as far as they can go.

For this edition of Entrepreneur University we turn to business communications expert Gordon Veniard. For more than 20 years Gordon has been a trainer covering a wide range of business communication, promotion, sales, negotiation, customer service, leadership and management subjects.

What is Gordon’s advice on how to negotiate?:

“Consider how people see themselves - and use the words to fit…

Your first consideration when dealing with others is to try and work out how they see themselves. You can then tie the language you use to their impressions – and to avoid using any words and phrases that might switch them off. Equally, if you understand how you see yourself, you can then ensure you don’t simply use language you find attractive It’s likely that most people would consider themselves to behave in an ethical, honourable, honest way. They would be unlikely to admit (even, often, to themselves) any prejudices they might hold. People will often believe themselves to be more intelligent than the “average”. These are the absolute basics of such self-impressions By watching and listening to the other party to your sales or negotiation situation, you can start to build the picture they have of themselves How to increase people’s receptiveness. Flattery works – along as you don’t make it too obvious! So, the use of words and phrases can help develop an impression of “feeling good about myself” within the other party. Here are some typical examples:

• “You have a reputation for being a tough negotiator”

• “I know you’re not easily impressed by…”

• “As an expert in this area, do you…”

• “I know you’re always receptive to new ideas”

• “As a successful business-owner…”

• “I know I can count on your word in all these things”

• “I appreciate you like to consider all proposals very carefully”

• “With your many years of experience, tell me…”

Only use phrases you feel comfortable using (and to the appropriate “receiver”). The above are examples, you’ll be able to think of more. Allow people to carefully interpret – where possible. In general terms, when you conclude a sale or deal, you surely want there to be no ambiguity at all about the agreement. But, as you are discussing different areas before this point, you don’t always want to be definite. It can be of value to make “suggestions” for debate, discussion or amendment later. Therefore, there is a value in having a range of “possibility” phrases you can adapt & use as appropriate. Some examples:

• “Sometimes, it’s possible to…”

• “It might be that…”

• “It’s often the case that…”

• “Mostly, we tend to…”

• “It’s possible that…”

• “It’s rare for…”

• “It’s quite likely that…”

• “… can happen”

You might use these if you are not sure what can be achieved – or want to give that impression to the other party. But, be careful, not to let such words or phrases slip into your conversation when it’s time to firm-up the negotiation position or conclude a deal or sale!”

What have some of your best negotiations been?

Evan Carmichael

Brothers, Matthew Toren & Adam Toren have truly been ’serial entrepreneurs’ since their early teens. They wanted to assist other fellow entrepreneurial enthusiasts with their businesses and try and guide them through starting, managing and growing successful business ventures so they started www.YoungEntrepreneur.com in 1999.

They created a forum for like-minded individuals and it has grown to almost 30,000 members. I have been a newer addition to the team with the Young Entrepreneur Blog that we kick started in May 2006.

After a lot of hard work and careful thought, Matthew and Adam have launched a new version of their Young Entrepreneur Forum. Some of the cool features include:

• Entrepreneur Videos
• An entrepreneur Arcade
• Entrepreneur Articles
• Legal Forms
• Market Place

Blog readers will also be happy to know that our blog has its own featured section on the Forums now called “Latest updates from the YE blog!” on the right hand side of the Forums. They have used a tool called Feed Digest to help display the three most recent blog posts so you can keep up with what’s happening with our blog.

They are also planning a new section offering Premium Memberships which I am excited to learn more about.

Matthew and Adam are planning on doing an official press release which I will share with you when it comes out. In the meantime check out the new layout of the Forum! The Forum also has almost 30,000 members and over 125,000 posts so you are bound to find like minded young entrepreneurs to connect with about your business ideas.

I would love to hear what your opinions are of the new template! I’m sure Matthew and Adam would also love your feedback if you leave a comment below!

Evan Carmichael

Last week I began a monthly seminar for entrepreneurs who wanted to improve their search engine rankings. We called it SEO for Africa and all the proceeds raised went to support African entrepreneurs who were in need of funds to grow their businesses.

In total we raised over $1,000 and helped over 20 business owners learn how they can improve their online rankings.

We covered a lot of material and many questions were asked and answered. One of the questions was what my favorite blogs on search engine optimization are. I agreed that I would share my list and thought that it would also be valuable to our Young Entrepreneur Blog readers.

In no particular order, here are the blogs that I check on a daily basis. They discuss SEO as well as a number of ways to succeed online:

• Matt Cutts
• Inside AdSense
• SEO Book
• Search Engine Land
• seomoz
• Marketing Pilgrim
• The Link Spiel
• Search Engine Watch
• John Chow
• W Revenue
• StuntDubl
• Johnon
• Jim Boykin
• ProBlogger
• SEO Fast Start
• Dosh Dosh
• Yaro Starak
• How To Change The World
• ShoeMoney

It’s a lot to read and, as you can see, keeping on top of a them can be a full time job! I hope you find the list valuable as you continue building your online presence!

Which blogs do you read on a daily basis?

Evan Carmichael