The thought of compiling a formal business plan can be quite daunting to the entrepreneur. Many of us see ourselves as the creative type rather than the formal intellectual and we might have an inbuilt tendency to try and fly by the “seat of our pants”. In spite of the pain, perceived or otherwise, involved in its creation, we must invest the time and effort to come up with a formal business plan. It is not as hard as you think, there are plenty of good books on the subject and some really great software packages, such as Business Plan Pro, for example.

So what are the most common errors people face when writing a business plan? Apart from the obvious - procrastination - you should always make sure that you include the necessary items. Make sure that you do devote time to creating the plan and don’t use any excuses, such as your busy schedule. You must look at the bigger picture, which includes the need to craft a formal projection of where you want to go.

When constructing your business plan, think in terms of cash rather than profits. Even though you may come up with a projection which you like – income being greater than expenses – you must understand cash flow. A profit and loss statement should be almost secondary to your cash flow statement, as you must ensure that you have enough cash in hand on a day-by-day basis to even survive.

Don’t focus too much on your grand idea, but make sure that you have all the fundamentals covered. A bold idea is hard to sell, so you need to stress that you have the available time, common sense and business smarts to succeed. If you are looking for investors, they will be more interested in you and/or your people, rather than the idea.

When you’re compiling a business plan, leave out the hype. Do not use any colorful language or preconceived notions. People who will be looking at your business plan will want to see hard, solid facts, backed up by very reasonable assumptions. Milestones must be set, tasks established and sound logic applied to your reasoning.

Remember that you must focus and not come up with an unachievable list of too many priorities. Your strategies are very important and you will only be kidding yourself if you try and cast your net too wide.

It’s an obvious goal to project growth, make sure that it is realistic and that any growth spurts are tied and referenced to understandable and realistic events. Your projections must be conservative at all times and you must be able to defend them.

Always make sure that you are not living in a bubble and that you are thoroughly aware of your business competition. If your business plan is too inwardly focused, you run the risk of ignoring other companies in your marketplace at your peril.

Don’t base your business plan and your very success on one mega-deal. This is known colloquially as putting “all your eggs in one basket” and should you, or your clients drop this basket, you will be doomed!

Remember, this does not have to be rocket science. A business plan is based, first and foremost, on common sense. You must, deep down within yourself, believe in all the assertions and assumptions that you’re making. Take time to sit down in a quiet room and really think it all through, before committing to paper. Solid preparation now puts you in good stead for the future.

Share your experiences on writing a business plan.

Adam Toren

First impressions are everything. We know this from our daily life experience, where we are constantly discovering new people, places, products and services and making instantaneous, subconscious, assumptions. When it comes to your business, one of the first impressions that a client gets to see is your logo. It should be a well conceived, well designed instant interpretation of everything that your business stands for. So, when it comes to designing a logo, there’s no pressure, right?

It’s crucial to understand several key elements when it comes to designing a great logo for your business. Firstly, you should do some soul-searching. Do you have the funds or resources to be able to employ the services of a professional logo designer? Whilst this person or company may be the answer to your problem, many new businesses rarely have the funds available to go down this route. As this is often the case, here are some of those key elements to consider as you come up with your own masterpiece.

Choose your logotype.

You can simply choose to portray your business name in one of the very many thousands of different fonts available. Or, you could choose to incorporate a visual image representing your business type - for example, you could include a graphic of a paintbrush if you are an artist. Thirdly, you could merely base your logo around a custom-made symbol of some kind, but this is not advisable as in your early days you need your logo to be instantly identifiable and to relate to your specific business enterprise.

Get your message across.

You need to be very clear what your message is, to start off with. Keep this message firmly in your mind when you are creating your logo and try to get it across in graphic form.

Make your logo aesthetically pleasing.

Your finished result should be balanced, clean, distinctive, and functional. Your logo should “work” when reproduced through any medium, in monochrome as well as in color.

Avoid a generic look.

Don’t be tempted to use clip art, and come up with a redundant look. Be creative!

Be cost effective.

Don’t go over the top and create a masterpiece of design with deep colors using a rainbow spectrum. Remember that you are going to have to reproduce your logo in many different formats and you might not be too pleased with the accompanying costs.

Make sure it is usable.

If you do not have a natural eye for design, bring in a friend who does, or better still someone who has some expertise in this area to get their advice. Will your logo translate into all potential environments? For example, how will it look when reproduced on a polo shirt?

Take time to address the fundamentals and enjoy the process of logo creation. It can be a lot of fun, but you should remember to keep your customers in mind with a focus on the very purpose for your business when you put everything together. Your logo will help you to build valuable equity, establish credibility and achieve success.

How did you choose your logo?

Matthew Toren

Much has been written about the ways to write a “killer” press release. You can get advice about form, formats, the title, the heading, the various technical specs - such as city of announcement, date and time - and even the best way to signoff. Don’t spend all your time focusing on the creation of your press release. Make sure that you have all the elements in place to ensure that your PR campaign is successful and extends beyond the simple creation of a press release itself.

Consider the four “Ps” when it comes to establishing the groundwork for a successful PR campaign. Make sure that you are prepared for the follow-up. Line up all these elements in advance — photography, pitch, profile and pack.

Make sure that you have a great selection of photography available. This will include projects, screenshots, shots of the spokesperson, and anything else that is relevant. Try and have a good selection of photographs available, rather than using the same one, which might be reproduced many times in the media. Make sure that you have high-quality content. Many journalists use digital images, so make sure that these are provided with a resolution of at least 300 dots per inch (300 dpi).

Don’t be surprised if the phone rings and a member of the media is on the other end. At this time you will need to make sure that your pitch is prepared. Journalists often call and will be looking for a quote and some additional news, so you need to make sure that you have something prepared as there is nothing worse than fumbling through a phone call.

Make sure that your corporate profile is up-to-date, that you have your company background together and don’t assume that any journalist will know all about your company. They have to deal with a great deal of information each day and can be forgiven for getting some information wrong, especially if you do not provide an accurate and comprehensive profile.

A press pack should be prepared to give journalists additional background information to help them prepare a story or an interview. You should opt to prepare a traditional printed pack as well as an online version. Include the same information — background, biographies, images, database structure and data sheets, a company brochure. Keep this pack up to date at all times, so the journalist can easily find what he or she is looking for, when preparing a story.

Make sure that you pay attention to the four “Ps”, and be prepared for a successful PR campaign.

Share with us your tips on how to deliver a great PR campaign!

Matthew Toren

Knowing as much as you can about your competition enables you to better position your company to succeed. Since so much of today’s business is done over the Internet, evaluating how your competitors position themselves online will reveal valuable information that will help you enhance traffic to your website.

Do you know the leaders in your industry? It’s good information to have because they are the ones setting the pace in your line of business. By analyzing their product offerings, presentation and inventive approaches, you can establish your business so it is perceived by customers to be better than theirs. A good place to start is a competitor’s website. Here are 3 key strategies for analyzing a competitor’s website so you can enhance your own:

1. Identify the major players in the industry in which you do business.

The Yahoo directory is a good starting point. Visit the websites of these leaders to see show they position themselves online. Media Metrix 500 and Alexa are two good sites to use to learn how much traffic the competition receives to their website and how it ranks with others in the industry. You might also consider searching for articles, interviews, or speeches from key players in a competing company to see if they discuss anything related to their website strategy.

2. Evaluate the competition.

Choose about 10 of your top competitors and analyze their websites coming from a customer’s viewpoint. Compare products and services. Is there something that they’re not offering that you can? Maneuver through the site and evaluate its ease of use, functionality and appearance. Note strengths and weaknesses that you can capitalize on. Take note of any advertising campaigns or what their overall web strategy may be.

3. Counter the competition.

Once you’ve completed your analysis, develop ways in which you can counter the strategies of your competition. Perhaps it’s product selection or pricing. Revise your marketing plan to reflect methods you plan to use to increase your ranking with search engines.

All companies have vulnerabilities in which they are not completely serving the customer. In order to compete among the major players, you need to capitalize on these weaknesses and create niches that fill in the gaps.

When it comes to doing business online, you can be a company that competes with the competition or finds another niche to focus on. Just remember, small businesses have the ability to be more flexible and to implement measures faster and more cost effectively than big companies. The key is to analyze a competitor’s website to determine how they are not serving the needs of customers and then take steps to meet customer demand.

Leave us a comment on how you overcame the competition and followed your own path.

Matthew  Toren

If there’s one lesson all entrepreneurs have learned over their years in business, it’s the importance of a marketing plan. What your business is, who your target audience is and how you attract your target market are essential elements to a successful business plan. A marketing plan also enables you to focus your action steps on these key areas.

In defining a marketing plan, there are probably as many different answers to what the perfect marketing plan is as there are entrepreneurs. Some follow the textbook definition, while others customize a plan based on their business, budget and goals. The key is to create a plan that works for you and will keep your marketing action steps on track.

To achieve a perfect marketing plan, there are a few essential components to include. Here are five easy steps to follow to create your successful marketing strategy.

1. Define Your Market.

In a few sentences, describe who your customers are going to be. Ask yourself what types of people are more likely to buy your product or service. Be as specific as possible in terms of gender, age, occupation, lifestyle, buying habits, etc. Identifying your market is the basis for all your other marketing activities.

2. Identify Ways To Attract Your Customers.

List ways you plan to go after your target market. What do you plan on doing to get their attention? This step requires a lot of thought because you need to identify what sets you apart from your competitors and how you plan to communicate these advantages. Once you determine your niche, then you need to incorporate this core message into all your marketing materials, including your packaging, phone message, website, letterhead and other means and materials that go out to customers.

3. Go Prospecting.

Your marketing and advertising efforts need to pique a customer’s interest in your company. Your advertisements, in particular, should encourage your targeted audience to ask for more information about your product or service. The goal is relationship marketing. Many businesses make the mistake of going for the immediate sell in their advertisements. But for customer retention purposes, you want to attract a large number of prospects rather than a few sales. With prospects, you can educate the consumer about why your product is better than the others. This will naturally lead to a sale, but your education-based approach leaves the customer with a better understanding of the value they are receiving. That’s means repeat business for you.

4. Exposure.

Think of all the possible ways you can get your message out to your targeted market. If your advertising budget is small, you can market your business just as effectively through free exposure in an article in the newspaper or a reference quote in a radio or television story. Get to know the newspaper journalists and radio and television news reporters who cover your local area or industry. By building a trusting relationship with them, they will turn to you as a reliable resource when they need a quote or sound bite when a story develops in your field of interest. You can also pitch your own story ideas pertaining to a particular seasonal issue or event.

5. Establish Referrals.

Customers who enjoy doing business with you are more than happy to spread the word. Within your business structure, create referral marketing processes that maximize the potential for customer referrals.

Once you have identified your marketing plan, create an annual calendar and put in reminders of the daily, weekly and monthly marketing activities that need to take place to keep your marketing plan on track.

With your perfect marketing plan in place and a vehicle for keeping it on track, you will be well on your way towards attracting new business, fostering repeat business and retaining existing customers.

What do you have in your marketing plan which has really made a difference?

Matthew Toren

SproutBox came to my attention the other day because of the really great work it is doing investing in startup companies. But as it helps out entrepreneurs, not to be overlooked is how entrepreneurial it is in offering a new approach to venture capital.

When the SproutBox founders established the entrepreneur investment firm, they knew they didn’t want to be just another venture capitalist that simply wrote a check. So they set out to redefine the term by actually investing their expertise into the company’s success.

The founders have an extensive background in business, technology development, software engineering, product development and creative marketing and design. Most are successful entrepreneurs in their own right and have an insider’s perspective of the challenges budding entrepreneurs face under the current startup culture. So they’ve basically set out to change it.

With the SproutBox formula, they invest their talent in exchange for equity at the idea stage, as opposed to the traditional product implementation stage. For startup companies, that means you can focus your attention on turning your idea into a money maker without having to worry about business functions, like accounting, product production, hiring, raising funds, workspace issues, human resources and legal matters.

Under the SproutBox model, the business is ready to exit after a few months of SproutBox guidance with a marketable product or service and a healthy revenue stream. This is achieved by enabling ideas to develop and generate revenue without having to worry about large reoccurring costs, like overhead and personnel, while trying to get your product to market.

SproutBox is particularly interested in working with entrepreneurs with Web, mobile, or desktop business ideas since these types of applications are best suited for its venture capital model.

As the traditional venture capital model is redefined to better meet the needs of entrepreneurs, it’s reassuring to see that entrepreneurs are a major part of the change by bringing a first-hand innovative focus to the concept.

Although SproutBox is relatively new, entrepreneurs should be excited about its possibilities for providing valuable financial help to startups. What do you think about the concept? Leave us your thoughts and comments.

Matthew Toren

Just about any entrepreneur, whether starting a business or expanding an existing one, can use some financial intervention. When traditional lending avenues turn you down, angel investors can be the break you need to finance your business plan.

Angel investors are individuals from all walks of life who invest money in businesses. They might be wealthy individuals with the ability to take a risk, or a group of successful business people looking to help another entrepreneur start or expand a business. According to the U.S. Small Business Administration, there are about 250,000 angel investors nationwide, funding an estimated 30,000 small companies annually.

There is no set limit on the amount of money an angel investor will lend to a business. Unlike banks, venture capitalists and other traditional loan sources, angels have much more flexibility in their lending criteria. But the funding does come with some caveats. Most angels require involvement in the business, whether hands-on or as an outside consultant. After all, they are expecting a good return on their investment. For that reason, you need to be sure you’re a good match with your angel, both from a goal-oriented and personality standpoint.

An angel investor’s involvement in your business and their expectations should be discussed early on in the relationship to prevent the angel from taking complete charge of your business. It is reasonable for an angel to expect between a 5% to 25% share in the business, a position on your board of directors, weekly updates and quarterly reports.

To attract an angel investor, it’s important to have a solid business plan that shows your company’s growth potential, the expected revenue projected over five years, how the money would be spent and the experience of management to carry out the business plan.

There are individual angel investors or groups comprised of angel investors in just about every U.S. state. A business attorney generally has connections to local angels, or you can search online for angel networks. Family, friends and business contacts might also be able to put you in touch with angel investors. You should also try your local chamber of commerce or small business administration office for angel contacts.

There are several advantages to turning to angel investors for funding. For new entrepreneurs, angels are more open to investing in risky and new enterprises. In addition to being a viable funding source, angels have a wealth of experience as successful entrepreneurs themselves and can bring valued experience to your business venture.

For some entrepreneurs, angel investors might not be the best route for their business. The biggest disadvantage is giving up a certain amount of control of your company, from equity to hiring decisions. You will also be paying a significant return on investment as part of the angel’s exit strategy.

When researching whether angel investors are the best source of funding for your company, remember that it will be a long-lasting relationship of at least five years or until you can pay back the agreed upon return on investment. But by selecting the right angel, you could make a heavenly deal that brings success to you and your investor.

What do you think of Angel Investors? Would you be prepared to part with a percentage of your company for cash?

Matthew Toren

I have always found that throughout the course of a day, I am certain to meet up with someone who asks ‘So, what do you do?’, whether this be online, in person, or on the phone. Every encounter that you have is a business opportunity. That’s why having a 15-second pitch that tells about yourself and what you do is a must. A 15-second pitch is a business essential. It will sell your business to potential clients, serve as an effective introduction at networking events or seminars, and be the grabber that attracts an investor’s attention.

The length of your pitch is important. You want to draw in your listener, keep them interested and convey essential information about what you do without taking up too much of their time or providing them with too much information at one time. With that said, here’s how you can create the perfect pitch:

First, organize your thoughts. Write down on a piece of paper a few sentences about what you do, what is unique about what you do, who you do it for, the solutions or benefits of what you do, and why you are the best at what you do. Write words or short phrases that best describe what you do, your clients and your significant achievements. But remember, your pitch should only focus on one thing. If, for example, you’re a software developer and website designer, you would need to create two separate pitches.

Second, develop your pitch. Take your descriptive words and develop sentences that specifically convey what you do. The key here is to keep it short, but effective. Your pitch should end with a sentence that invites the listener to respond to a desired action, such as setting up a meeting, providing your business card, or sending them more information. Here’s an example of an effective 15-second pitch: “I make learning fun! I am a software developer for interactive math and reading programs for preschool children. I have 12 years of experience and some of my clients are LeapFrog and Playschool. Would you like my business card?”

Lastly, practice, practice, practice. Recite your 15-second pitch in front of the mirror so you become comfortable with it. You might also want to use a video camera or tape recorder to see and hear how your pitch will sound to others. Practice it on family members or friends. You want to memorize your pitch, but keep it natural so it doesn’t sound staged.

Above all else, make your 15-second pitch memorable. You want your listener to remember your encounter for when the situation arises when they or someone they know needs your services. Delivering a pitch that “wows” them will certainly put you at the top of their list.

Young Entrepreneurs are full of excellent ideas, and there are plenty of people out there looking to find these ideas or worse trying to copycat them! You have to make sure you keep your genius safe, so you can take the credit for your hard work when it comes to cashing in on your invention.

If you developed a new product that is completely different from what’s currently available on the market, then getting a patent for it is of utmost importance. A patent will protect your creation from being replicated or sold by others without your permission. In the United States, patents are issued by the federal government’s U.S. Patent and Trademark Office and are valid for 20 years.

There are two types of patent applications, the Provisional Application for a Patent and the Non-Provisional Application for a Patent. The Provisional Application is the intent to file a Non-Provisional Application within the next 12 months, but gives you the benefit of using the “Patent Pending” designation upon filing the statement.

The Non-Provisional Application for a Patent has a lower fee and is designed for individuals, small businesses, or other small entities. Documentation showing you qualify as a small entity needs to be included with your application.

A Non-Provisional Application for a Patent has several components. Before completing the application, it’s recommended that you conduct an online patent search to be sure no one has a patent pending for the development of a similar product. Depending on the type of your product, you will be filing for a utility, a design, or a plant patent. Each type of patent has its own corresponding application requirements.

Besides completing the basic information on the patent application, you will also need to provide written information about the product that includes a description, all its specifications, ingredients or materials, claims and other pertinent information. An oath that you are the inventor of the product is also required. Accompanying the written information of a patent application are drawings or illustrations of your product.

The complete patent application is submitted to the U.S. Patent and Trademark Office, along with the application fee. You will be sent a filing receipt with your application number and filing date.

While waiting for your patent approval, you can begin using the “Patent Pending” phrase on your product to notify buyers that its rights are protected.

Do you have a entrepreneurial question? Ask Entrepreneur University! Send us your request in a comment and we will do our best to answer it for you.

Adam Toren

In this edition of Entrepreneur University we turn to Howard Shore from Activate Group Inc. Howard has developed a track record for helping organizations to accelerate revenue and profit growth rates at levels exceeding 20% annually. As a personal coach, Mr. Shore has helped executives and sales people to increase their personal success.

Today Howard shares with us how you can motivate your staff:

In today’s business environment, it is essential that we find ways to make our organizational resources more productive. In many organizations, the most prominent and expensive resource we have is our people. As a result, a lot of time is spent on creating processes and conditions that drive and motivate our employees.

Over the years, I have observed leaders trying many ways to motivate their people to higher levels of performance. Even the best leaders have experienced the frustration of trying to lead someone who seemed to refuse to live up to expectations. Ironically, their people were probably feeling the same way. The reason: Motivation develops internally from a personal desire to achieve goals that are important both to the individual and to the organization. Motivation is the force that prompts you to take action. If you are having trouble getting someone to achieve your goals, you are probably failing to understand what theirs are.

A lot of research has been conducted over the years to identify the factors that have the most dramatic impact on productivity. While pay, fringe benefits, and working conditions are important, research has shown that absence of these factors produces a lack of motivation, but their presence has no long-range motivational effects. Long-range motivational factors are recognition of a job well done, sense of achievement, growth, participation, challenge, and identification with the company’s goals and vision.

In spite of these facts, leaders and managers spend a lot of time trying to find ways to motivate employees through fear and incentive. The very essence of fear is negative and over time has diminishing effects as employees develop attitudes that lead to a decrease in quality, commitment, and productivity. Fear can be highly motivating, but does not produce positive results for any length of time. Incentive, on the other hand, is a positive motivator, that is, a reward in exchange for a specific behavior. This also has diminishing returns as employees expect fair compensation based on their contributions, and, many times, there is a disconnect between what the employee desires and what the employer is willing to pay. Over time, employees start gravitating toward desiring more of the intangible rewards such as respect, growth, knowledge, prestige, and recognition (to name a few) that ultimately govern their internal motivation. The challenge lies in recognizing each individual’s unique desires.

Here are 15 ideas proven to provide for long-term motivation:

1. Create a clear vision. Identify the organization’s mission and goals, and make sure that everyone understands the rationale behind them and how they contribute toward achieving them.
2. Clearly communicate departmental objectives, and solicit input from your employees on what they can do to help achieve them.
3. Make an effort to compliment each of your direct reports on at least a weekly basis.
4. Make employee development and retention a primary objective of each manager and leader and reward their success accordingly.
5. Ask employees for advice in areas where they have expertise.
6. Involve everyone at all levels in the goal-setting and planning processes, particularly if they are responsible for the results.
7. Let people know what is expected of them, and do everything you can to make them successful.
8. Develop a “servant leader” attitude, and be there for your people rather than having them there for you.
9. Treat everyone with dignity and respect.
10. Stand behind your employees and back their decisions.
11. Show the courage to let your employees learn from their mistakes.
12. Take time to listen carefully to other people’s interests, opinions, concerns, and goals.
13. Meet individually with your employees; help them clarify their personal goals and values; and assist them in identifying the skills they need to achieve their goals.
14. Find ways to enrich the jobs of your employees by increasing their authority or span of control.
15. Encourage employees to expand their comfort zone.

Reference and excerpts taken with permission from Leadership published by Resource Associates Corporation, Mohnton, PA

Evan Carmichael