3 Elements of Every Successful Business Plan

Lauren Hockenson2013-04-15 15:37:30 UTC

So you have a great product, platform or business that you’re stoked to start up. It can be an exciting and thrilling opportunity to get your own company up and running, but it’s also filled with stress and anxiety — that road can be full of obstacles and a lot of confusion.

Well, first things first: Have you done your business plan yet?

It sounds trite, but the business plan is really the roadmap to success. When done correctly and thoroughly, that document can not only put you on track to proper growth and healthy strategies, but it can also be the perfect way to introduce your company to potential investors.

Here’s a list of guidelines that will help you craft the right business plan for your organization. Keep in mind: All businesses are unique and have their own specific challenges that must be met. But, if you stick with these characteristics, you will already be miles ahead from where you started.

What’s your business plan must-have? Let us know in the comments.

Many people consider a business plan to be the novelization of their ideal path to creating a company, jamming all hopes, dreams and projected profits into a pages-long document that, frankly, no one is interested in reading. A business plan doesn’t have to be filled with everything you’ve ever wanted in your business — it just needs to be straightforward.

“People think that a business plan needs to be a multi-page document that’s poetic in nature, and that’s not the case

“People think that a business plan needs to be a multi-page document that’s poetic in nature, and that’s not the case," says Barbara Findlay Schenck, author of Business Plans Kit For Dummies. “What you need to have is a piece of paper that details the main things that will keep your business on course.”

Schenck says the myth of the business plan as a lengthy document doesn’t match reality. In fact, just writing down the basics of your business is enough to think about your company’s pathway clearly, and how exactly you or your team will move forward.

Business plan specialist Greg Goodman agrees that excessive detail in a business plan, including month over month statistics or intense data projections, can not only be a burden on the company but also set unrealistic expectations for investors. An even worse mistake can be a business plan that includes a restrictive NDA.

“There’s a great grey area, and most VCs I’ve encountered will not sign one,” Goodman says. “They’re not going to sign it because they have the same liability issues as a company looking at an outside product. What if they’re already looking at developing it internally? Do they want to get sued by someone from Pennsylvania who thinks they have the greatest thing since sliced bread, but in fact they’re duplicative of something they’re already working on? It’s not worth it to them.”

Simple doesn’t mean sparse — the best business plan will be diligent in outlining the characteristics of the company that are most important. Hammering down the basics of your business, everything from a personnel onboarding plan to securing the proper name rights and trademarks, will ensure no important detail is left unchecked.

In her book, Schenck says that there are must-do tasks to make the business plan a useful document:

Describe the business.

Describe the product or service.

Describe the competitive environment of the product.

Describe how the business will make money through a business model.

Describe how to market the business.

Describe how you’re going to produce the product.

Describe the business team, whether it’s you or a small team.

Describe the financial projection, including how much money you need and how much money you will profit.

These tentpole concepts may seem obvious to some, but Schenck says she is surprised at how often these characteristics are missing from business plans of all kinds.

“It’s amazing how many businesses start without that knowledge and fail without that knowledge,” Schenck says.

Goodman says that even though it’s trite, the “roadmap” analogy is the most accurate way to approach the development of a business plan. By outlining all of the major points and remaining stringent about your details, you can have a solid pathway without the need for unnecessary details — and perhaps learn more about your own business in the process.

“You always should have a business plan just so that you guide your own steps,” Goodman explains. “The reality is that it has a certain value — it’s not just plotting out Step A to Step B to Step C. Once you start putting details on paper, you see stuff you wouldn’t have seen otherwise.”

No two businesses are alike, so business plans are not one-size-fits-all. Although it may be tempting to rip off a boilerplate business plan or to copy the plan from a successful business, that denies you the ability to address the unique challenges of your particular company. Worse, an untailored business plan is an easy way to set yourself up for failure.

“The business plan needs to mirror the proposed business endeavor

“The business plan needs to mirror the proposed business endeavor,” Goodman explains. “So, what goes into it is everything that is necessary to depict that particular proposition, whether it’s a candy store or some high-tech venture.”

Goodman says that when writing a business plan, it’s important to write to your particular audience. If the business plan is a strictly internal document meant to keep the performance and growth of your company on track, then it should emphasize internal information that will help that (such as hiring order or important partnerships). If the business plan is an external document, then it’s all about writing about your business as attractively as possible to get investors intrigued.

“Even seasoned people don’t necessarily get that you need to think about who is reading your document,” Goodman says. “Your audience is different, and your audience can only be judged in relationship to yourself. If you’re Joe or Susie Smith and nobody knows your background, you need to write differently and make a different pitch for venture firms.”

Schenck says understanding the nature of the business is key to producing a great business plan. It’s important for founders to think about the purpose of the business, what they’re selling, who their audience is, and how it will make money. Those are questions that need to be answered right on paper, although Schenck asserts many businesses can’t answer them right away.

“These questions can be answered on the back of a napkin for all I care, but when you’ve answered them, you’re in business.” Schenck says. “Those questions answer what you’re doing, who you’re doing it for, how you’re doing it and how you’re going to make money doing it.”

Remember, your business is unique and deserves special care when crafting a plan for success. Making a fair assessment of your needs and planning accordingly will ensure that your plan is stable enough to get you off the ground.

Image via istockphoto, fotostorm

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How to Host a Successful Reddit AMA

Ryan Holiday2013-03-25 19:27:16 UTC

Ryan Holiday is the bestselling author of Trust Me I’m Lying: Confessions of a Media Manipulator, and a PR strategist for brands and writers. He gives monthly book recommendations at RyanHoliday.net.

What was once a fascinating yet relatively obscure subsection on a fledgling social news site is now one of the most coveted interview spots in our media world. Properly done, the Reddit AMA (short for "Ask Me Anything") can generate hundreds of thousands of impressions and drive fans into a frenzy. It can reinvigorate an established persona or hoist a completely obscure or unusual person into the Internet spotlight.

What is an AMA? It's a thread of questions within Reddit, hosted by an interesting person who declares "I Am [Person X], Ask Me Anything." The Reddit community responds with the type of honest, earnest and provoking questions that would rarely show up in your typical media interview. Anyone can participate, from the host to the casual Reddit user to the fans who simply upvote questions.

People from all kinds of backgrounds are trying their hands at AMAs. In the last several months alone President Obama, Bill Gates, Al Gore, Arnold Schwarzenegger, Snoop Lion, Tony Hawk, Dan Rather, astronauts currently in orbit, Playboy models, Iranian presidential candidates and Dwight from The Office have all taken turns in the AMA spotlight.

After Gerard Butler’s AMA on March 18, the actor was so moved by the experience, he uploaded a video thanking Reddit for the opportunity, calling the process “one of the most fun, inspiring interviews he ever did.” (And that video consequently made it to the No. 1 spot on the Reddit homepage, and earned more than 674,000 YouTube views.)

The AMA has quickly become a powerful and appealing tool for a host of A-list figures — chiefly because it's unlike any other form of media.

The AMA has quickly become a powerful and appealing tool for a host of A-list figures — chiefly because it's unlike any other form of media.

But how does the Reddit AMA really work? What makes it successful? And what is it like to host one?

Now that I have actually completed an AMA of my own and advised several clients and friends on theirs, I feel qualified to share insight about the unique Reddit experience. Perhaps most importantly, I can also advise your brand how to share in the experience (and access the massive audience).

Let’s explore this new medium and what makes it tick — why some AMAs are fascinating, organic conversations that spike book sales, promote movies, help political causes and spread messages. And why others, well, flop.

First off, the Reddit AMA suffers from the classic Wikipedia problem: Even though Reddit may seem simple for Internet natives, for others, it can appear pretty intimidating. To wit, I doubt that Larry King did his AMA without significant help (a few years ago he didn't know how to use the Internet). But in reality, Reddit is actually quite simple.

So, how does one actually go about getting an AMA? Technically, anyone can post — just start a thread on the forum and see if Redditors care to learn more. But the best way is to plan ahead and talk to the people in charge.

Pick a time and date and schedule your AMA with Reddit’s moderators in advance (all it takes is a private message). You can get placed on Reddit's “upcoming AMA” sidebar, which is seen by almost 3 million subscribers. In other words, don't make an amateur mistake and “surprise” Reddit with your AMA. Get maximum exposure by planning ahead.

Of course, the most compelling part of an AMA is the headline. This is how celebs (and interesting weirdos) let Reddit know who they are, what they do and why users should be interested. But you have to be concise: 30 words or less.

Don’t these examples make you want to click?

I am Astronaut Chris Hadfield, currently orbiting planet Earth.

I am Wayne Brady, Emmy winner and Grammy nominated actor and singer – AMA.

I am Peter Moore, the longest held hostage in Iraq, kept captive for over 2.5 years. AMA.

I am Benjaman Kyle, an amnesiac who woke up with no memories in 2004. AMA.

We are two men who spent 42 years in prison for crimes we did not commit. AMA.

I spent 17 months in a 3rd world country jail because of a YouTube video I made. AMA.

I am Stoya, adult performer and generally naked lady. AMA.

I am Daryl Davis, "Black Man Who Befriended KKK Members" AMA.

I am South Korean Singer, Rapper, Composer, Dancer and Creator of Gangnam Style PSY. AMA.

The best AMAs put equal consideration into the body of the post, too. Rightfully, the hosts never assume Reddit knows anything about who they are or what they do. Therefore, hint at topics you're qualified to talk about, and detail what you want to talk about. Links to your work can generate higher quantity and quality of questions.

Be sure to prepare. When I did my AMA, I tried to anticipate the most frequently asked questions and generated a few replies ahead of time. Keep in mind that the first few questions you answer are likely to be the the most upvoted, and therefore, seen by the most number of people. (This isn’t cheating; it’s thinking ahead.)

Once that’s done, all that’s left is to step into the ring. When I first posted the link, questions piled up fast, about one every minute. After the AMA hit the front page, that number jumped to 3-5 per minute.

Don't feel that you have to answer every single question. However, you’ll get in trouble if you’re dodgy, as Rachel Maddow discovered, when she declined to answer most of the more political questions on her AMA.

All the attention from an AMA feels flattering, if not addictive, even to the most jaded celebrities and public figures. Media interviews can be inherently gratifying — after all, a journalist has researched a subject and wants his or her thoughts. But multiply that by the power of 1.6 million listeners, factor in a completely open and safe environment, and you have the Reddit AMA.

Strict promotion is never the reason to do an AMA — Woody Harrelson experienced backlash when he pushed his movie too hard. But coordinating your Reddit appearance with a launch or a release is clearly the strategy behind many AMAs. A book release, a new product, a business launch or an announcement can actually help prompt people to think of questions.

But keep in mind, this isn’t The Tonight Show. It’s far better to view the AMA as a chance to participate in a vibrant community, rather than a sales pitch. Prepare yourself for all types of questions, the operative word being “anything.” As Neil deGrasse Tyson told me, Reddit is “a raging community of people with boundless curiosity.”

By all means, link to your product. Answer questions about it. Talk about it. But be prepared for that boundless curiosity and don’t fight it. Reddit loves to explore tangents and unexpected directions. You, as the interviewee, are powerless to control the direction of these tangents. Often that means the conversation will steer away from what you're promoting. And attempts to fight that usually don’t go well.

One of the most popular questions during my AMA asked how much American Apparel pays its models. That has nothing to do with me, nothing to do with my book, and in my opinion, is pretty boring. But the community wanted to talk about it, so they did.

Finally, Reddit AMA participants should heed this tip from Reddit CEO Yishan Wong: “Ask people what other famous/awesome/cool person you know that they would like to see an AMA from, take a top-voted couple answers and convince that person to do an AMA, too.”

You’d think an AMA hosted by the president of the United States would be the pinnacle for the medium. But I’m not sure that it is. The Reddit AMA is still very much a trend on its ascendency. Many people still have no idea that this rich tool and gratifying experience even exists.

But when you look at the Reddit AMA leaderboard, the quality and quantity of upcoming names is getting better every day.

In the words of Gerard Butler, the Reddit AMA “made me think about my own life and where I am at and where I came from.”

Image composit via iStockphoto, tumpikuja

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