Geeks in business: business plans

[druid]

I know this topic might be completely alien to most and considered utterly non-geeky. I also know that some people here have their own businesses so it's not that far fetched.

I'm on a software business course which includes coming up with an idea and making a business plan. There's also an option to "go real" with this. If anyone gets high enough marks from the exam they can participate in the voluntary Software Entrepreneurship Seminar which in turn preps participants for the annual Venture Cup (http://www.venturecup.org/).

Our group had a little brainstorming yesterday and we came up with a moderately good idea which we shall research further before starting to write the plan. I might share the idea once we've formulated it to ourselves first and done some research. I'm not all that interested in starting a business (yet) but it's an interesting possibility.

So how many of you here have made a business plan? Be it for real, for school or for the desk drawer I'd like to know. How did your plans match with reality (I'd assume the financing side is easy to get wrong)? What kind of market study did you conduct etc?

Share your experiences.

[dozer]

i did a business plan way back when i was on a real winner, but my supplier went bankrupt and it all went to shite.

yes finance is sometimes quite wrong because all of your figurs must be forecasts and most people bump them up because they want to do well. extra unforseen costs also tend to creep in but i am sure you are aware of that.

the market study conducted was to first survey businesses doing the same and then cost their product and how they do what they did swot style. we then approaced businesses who we thought would buy or product, gave them free samples and then surveyed them about price and units they could forsee buying and so forth.

i have another plan shelved and awaiting funding atm.

[druid]

What were your experienced on asking for financing? How many elevator pitches and PowerPoint shows did you have to do before hitting the deal? Or did you perhaps start with only your own funding?

Thanks for the details on market study. We won't be doing a comprehensive one because it is out of scope and would require a hell of a lot more time than is available. Most likely we'll compile a list of known competitors and try to estimate how big the market is. Might even get second hand info on a few potential clients.

Also, I was amazed to find out that some small to midsize (is there a term in English to combine those two?) companies here get information about competitors by talking to them. I'm not sure how it would work out in the beginning because a startup doesn't have much info to offer.

[dozer]

little funding was required due to 90 day credit relationship with the supplier, maybe that was their downfall. small costs were covered by us and we predicted invoices paid in 30 days to generate our initial cashflow. I have had some freinds who are right into pitching their own businesses and banks seemed to not come to the party.

Yes the best way to read the market is contact potential clients, I needed to get their statements in writing to say they would be interested, or the assesors would not pass my plan. Turnover figures and other shareholder info should be public knowledge for companies, that is also a good source of info.

Its crazy working in IT the amount of businesses that phone up to conduct surveys offering free magazines and alike to get info. If you have a skilled operator on the phone you can get a lot of information if you are a hungry competitor.

[BlueBoy]

Originally posted by druid
Also, I was amazed to find out that some small to midsize (is there a term in English to combine those two?) companies here get information about competitors by talking to them.

We call them Small to Medium Enterprises (SMEs) or Small to Medium Businesses (SMBs). Depending on the State.

[crescent]

We opened the doors on our new venture in July 2003. Research was undertaken of selected competitors through "ghost" telephone enquiries (success of this depends on the industry you are entering), which was very good for us. We surveyed over 50 firms, which assisted greatly in seeing where our pricing policy fit, as well as helping to establish our own poition in the market.

The financial side is always the hardest, but my professional life has beein is this area, so it was completed relatively easily. The key is to ground your forecasts on reasonable assumptions, and to have a good grasp of the costs involved before you start. We are presently breaking even, and should start paying ourselves salaries in the next month or two, slightly ahead of budget.

As for funding - we cashed out the equity on our house, so it was easy. Getting seed capital or venture capital is a royal pain in the arse, as is obtaining a business loan from the bank. Get a good broker to advise on the best way to raise the funds you need, as it will all depend on the type and nature of the venture you are starting.

[hazza]

Hmm

ive done a business plan for school and so have most of the state of nsw if they did business studies in yr 11 at school.

Do a search for "business plan outlines" or something at google.com.au and u will find heaps under the topic of "HSC PRELIM"


Theres literally hundreds of fake ones floating around which all have the right terminology and ethics e.t.c to use for a business plan.

[mrwest]

I consider my business plan a living document of sorts. It's main purpose is to make it clear in your own head, and to others who read it, exactly what it is you're trying to do. One of the most important steps in getting a business of the ground.

Things will never happen the way you planned, and the document needs to be revisited often and updated to reflect how things have changed. Reviewing it every 3-6 months is a good habit to get into. The hard part is having the discipline to keep it up to date.