The Business Plan: Make A Change

In my most recent post, I discussed valuable tips from capital investors Martin Zwilling and Shervin Pishevar in regards to securing investment funding for your new venture or project. I’d like to expand on that discussion with some practical applications of this professional advice. Without spilling the beans on the details of my own venture, I will highlight some useful ways to beef up your business plan when pitching to investors with references to my own business plan.

First and foremost is the social media factor. If you haven’t discovered the value that a strong social network has for your business yet, then I’d suggest you research some success stories that have resulted from smart social media utilization. After reading through the confusing yet inspirational email composed by Pishevar a few times, I decided to add some more kick to the social media portion of my business plan, especially as it pertains to marketing efforts. I did so by adding a “Gamification” segment.

We’ve discussed Gamification in the past, and there’s no denying the fact that this concept of making every day life less boring by adding gaming elements to the mix is catching on with businesses on a global level. If utilized properly, Gamification can bolster a social marketing campaign by providing visitors with incentives to delve deeper into a company’s products and services. For example, instead of offering promotional codes to Facebook account holders simply for “liking” my page, I will encourage them to go one step further and truly discover the company with a brief but enjoyable social game that allows them to earn discounts by inviting other friends to play the game. While this strategy may seem somewhat lacking in imagination, it still provides me with a unique opportunity to educate my target market without forcing them to dig for information on the company. What’s really cool about it is that you can inject whatever content you choose to in social games, such as embedded links to various landing pages on your website. It also creates a self-perpetuating method of driving more traffic to your Facebook page through invites to friends.

Of course, there is also Zwilling’s advice on providing logical and reasonable numbers that clearly demonstrate return on investment. This can be accomplished easily enough by mass amounts of research. Here are some questions that I have attempted to answer throughout the course of my own business plan: How are similar products and services selling in my target market? What sales strategies are my competitors using and how effective are they? Finally, what are my advantages over my competitors, and how can I capitalize on those advantages and turn them into net income? These questions are best answered in the financials, sales, and operations sections of the business plan, assuming you are following some type of “successful business plan” template.

Of course, I have chosen these areas to make changes based upon the advice of the professionals because I believe they are key points in my business plan. How I intend to market my business and generate revenue are two questions that any investor will ask, and they represent what I feel are the greatest strengths of my business. Naturally, just as each business is different, so too is each business plan. So, it’s important to understand every aspect of your business before finalizing your business plan and presenting it to investors, because it will allow you to pinpoint the strengths of your own business and what you feel will be the most important aspects of the plan that will really drive it home for investors.

Easy, right?

Gaming Entrepreneurs, Meet The Investors

I will be the first to admit that, as much as I have enjoyed playing video games in my time, the only game I ever created was a C++ text-based Pimp Quest spinoff in my sophomore year of high school. I have an idea of the sheer amount of time and hard work involved in developing a console or PC game from the ground up. But I am far from capable of creating the next big MMORPG.

Let's talk dollars and cents, for a moment. Assuming my cruddy, embarrassing sophomore project could have a value attached to it, I might get away with charging $.01 for it. A penny, no more. It might have taken me three hours of solid work to make the game, and I believe minimum wage at the time was $5.15 or so. In the realm of game design, I was worth less than that. How much do you suppose the developers at Infinity Ward were paid by Activision? The publishing giant shelled out $42 million to 38 employees when the legal fiasco first took off, so I imagine their time was worth far more than mine.

Let's say you're a designer who has just put a team together and launched your start-up game development studio. You have an awesome concept and the right group of people to make the idea a reality, and you don't want to waste time struggling through the channels to gain recognition and build funding for this awesome game. But you want to compete with the giants like EA and Activision, not work for them. So what do you do? At this point, it's safe to assume that this game will cost you hundreds of thousands - if not millions - of dollars.

Maybe, if your idea is original and appealing enough, you have some excellent plans for marketing and selling the game, and you can demonstrate a superb understanding of the industry and why your game will sell so well, you might be able to land seed funding from an angel investor or venture capitalist. Now there's a right way and a wrong way to approach an investor and ask if you can use a large amount of their money to satisfy your business needs. Shervin Pishevar and Martin Zwilling are two investors who have been on both sides of the business pitching table, and they offer some useful information to those who are willing to pay attention. If you plan on going after their money, you might want to take their advice, first.

Shervin Pishevar received his B.A. in interdisciplinary studies from the University of California at Berkeley, and is the managing director at Menlo Ventures. He founded the Social Gaming Network , and has raised over $50 million in capital for other start-ups. He has invested in over 40 companies since becoming an angel investor, and it's safe to assume he has read through and rejected far more business plans. Pishevar is also an immigrant entrepreneur. His unique perspective as an immigrant provides him with equally unique ideas, such as recruiting entrepreneurs on a global level. In a moving email to friends shared on Tech Crunch in 2008, Pishevar reveals the depth of his entrepreneurial spirit, as well as the depth of his focus on social platforms.

While I encourage you to read the email, the point that I took away from it was that any new venture should place a great amount of focus on current trends in social technology. In 2008, in the middle of a lonely night away from home, the one thing on Pishevar's mind was his family, and how easily he could connect with them through Facebook, no matter where he was in the world. Today, the trends are shifting towards mobile gaming, which is simply an evolution of social gaming. If your game has a unique and innovative social factor, be sure to drive that home with investors, because it shows you've done your research and you know how to play nice with the rapidly changing technological landscape.

Martin Zwilling boasts an impressive track record serving in various business capacities over the past 30 years, and now serves on the selection committee of two different angel investor firms. He maintains a blog on Forbes.com, and recently published his first book, Do YOU Have What It Takes To Be An Entrepreneur? Zwilling shares some slightly more practical advice for entrepreneurs seeking investment capital in his blog post, "Top Ten Investor Turnoffs Around Business Plans." In this post, he highlights some simple mistakes that many entrepreneurs make that immediately exclude them from consideration, including grammatical errors, a business plan that lacks an executive summary (or consists entirely of an executive summary), too many appendices, and negativity, in any form. I think the most valuable piece of information to be taken from Zwilling's post is the most obvious tip: don't forget to show the investor how they will recoup their money. If you cannot show them how your game will make money, they won't bother investing in it.

Any business plan should consist of certain sections that are key to getting the "plan" across; how will you market it?; how will you sell it?; to whom will you sell it?; and where is the money going? Keep in mind that most investors will care about the product or service that you are offering, but not as much as they care about you. So be sure to do an adequate job of selling yourself and your team, as well. If an investor has confidence in you, they will have more confidence in your business.