Experts Views on the Value of Business Plans

Expert Kevin O’Leary says that having a great idea is not enough. The idea is just the start. The entrepreneur then has to stay focused on the end result. Staying focused means sacrificing certain things, for example a social life. These distractions will not only delay success but they might hinder it entirely. He also says to not be afraid of failure. Failure sparks innovation. Doing the same thing over and over but expecting different results is the definition of insanity. Try something new after you fail and succeed at that then you will no longer be a failure.

I believe the most important section of a business plan to an investor is financials. Investors want to see the money. They want to know when they will make their money back if they decide to invest in your business. Investors want to know the price point of the items sold, how much inventory can you sell, and what is the net profit in the end. My business plan has changed to accommodate enough profit for the investor after they have seen the financials.

After financials the investor is looking at the branding of the business. Branding explains what the business is, and how it is marketed to the masses. Branding is very important, it is the identity of the business, and how it distinguishes itself from the competition.

Expert Barbara Corcoran is more concerned about the person behind the plan. She wants to see the drive, work ethic and qualifications. The management section of the business plan is important to her. She also wants to see who is doing a good job and who isn’t. Corcoran is concerned about the team around the business. If one member is not up to scratch then in brings the company down.

The bottom line is to have a business plan that lays out everything in your business so that there are no surprises to the investors or to the entrepreneur.

Kevin O'Leary and Barbara Corcoran

Kevin O’Leary and Barbara Corcoran are two of the five investors on the ABC television show Shark Tank. Robert Herjavec, Daymond John and Mark Cuban are the other three investors. The premise of the show Shark Tank is to listen to business pitches, and for an investor to make a deal with the owner of the company.

Kevin O’Leary started a software company called SoftKey in his basement, which he later sold it to Mattel for $3.2 billion dollars. “Barbara Corcoran turned a thousand dollar loan into a real estate empire in Manhattan.”

When deciding on which entrepreneur to back, O’Leary and Corcoran have different criteria. In a video entitled “Shark Tank Season 3 Set Visit: The Sharks Tell All!” from June 15, 2012 Corcoran mentions how O’Leary is just after the money or return on investment. Whereas, Corcoran claims that she cares more about the entrepreneur and the product.

O’Leary himself backs up Corcoran’s claim in his article “How to Win in Business Negotiations: Never Forget, it’s All About the Money!” Here are some of his tips from the article. Know what you want and can accept from the deal. Be reasonable in your demands. If you don’t know what you want, how can you explain why you want it? If you set up the negotiation showing the other side what is in it for them they will be more inclined to accept your offer. Finally don’t’ let greed get in the way of closing on a good deal. If it is a good deal take it. Don’t try to push for more and then lose it.

Corcoran credits her success to being able to develop great advertising hooks. She says that the hook is the key. Once you bring the people in then you have to find a way to make them trust you. She says “If people trust you, they’re going to buy from you, if they trust you they’re going to recommend you—and it’s in the recommending that build the empires.” On of Corcoran’s strategies for expanding her business was to publish a report on what she wanted to accomplish. For example she wanted celebrity clients so she published the “Madonna Report”. Because that ran in the paper Richard Gere became a client of hers.

Corcoran says, “I think entrepreneurs have to be born with the talent to work with people. A lot of people that want to be entrepreneurs, but they don't have the people talents, and I think the part that's made is your background, how hungry you are to succeed.”

I agree with this quote for Corcoran, but I would like to add that motivation is more important then the people skills. People skill can be learned, however, motivation can only come from within you.