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Fatal Flaws in Your Business Plan

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A business plan is the blueprint that guides aspiring entrepreneurs as they build their new business ventures. From 2008 – 2010, I taught a 20-week business plan writing course at an SBA-affiliated women’s business development organization. We met for three hours each week and students wrote their plans week by week, guided by the lessons.

When evaluating a business concept, unrealistic expectations or flawed thinking could creep in and undermine the planning. Excitement about the idea might distort one’s ability to see potential obstacles. What follows are scenarios that entrepreneurs-in-the-making should beware.

Unrealistic expectations

While it is sometimes true that using yourself as the ideal customer is a smart idea, since you understand the value and availability of that product or service, you might misinterpret the size of the market and the traction that can be achieved beyond a select group of true believers.

Insufficient information

Confirm the need for your products or services when you research and verify the number of potential customers who have the money and motive to buy from you.

Furthermore, make sure that you understand the buying process. Who green-lights the sale? What is the sweet spot price range? Lastly, where do potential customers obtain these products or services now?

Access to customers

Access to customers is everything and some industries or target customers seem impenetrable. You may identify the right customers, understand how your products or services fit their needs and know how to price and deliver. But if potential customers do not have the confidence to work with you because you lack an endorsement from a trusted source, you’ll starve.

Overestimating cash-flow

Usually, businesses won’t achieve desirable gross sales and or show a net profit in the first year of operations. Businesses that require high start-up costs especially will require long ramping-up periods. The business plan must acknowledge the potential for negative cash-flow and demonstrate how fixed and variable expenses will be met during that time. One must know how inventory will be financed, payroll will be met and office rent will be paid.

When writing your business plan, conservative financial projections are strongly advised. Customer acquisition may take longer than expected and the size of their purchases may initially be small. Moreover, it’s possible for a venture to be profitable on paper and still suffer from cash-flow problems, if customers do not pay on time.

Underestimating start-up costs

Developing a reasonable estimate of how much it will cost to get the venture up and running is essential. You must be prepared to meet the cost of all permits, equipment, inventory and staffing necessary to conduct business. If you plan to hire employees, it’s important to have a good idea of your minimum staffing needs up front (you can hire more as revenues increase).

“Magical thinking” business model

The business model illustrates how your venture will become profitable. Well thought-out interactions between marketing, financial and operations processes will promote and sustain profitability and you must map out how these will occur. The business model describes the core functions of the venture.

Likewise, the value proposition of your products or services must be articulated. The overall marketing strategy and selected tactics and resources that will promote the value proposition—intellectual property, patent rights, key relationships, or capital—will be accounted for. Sales distribution channels will be detailed.

Getting to Plan B (2009), by Randy Komisar and John Mullins, details the key business model components and advises business plan writers to segment their models into sub-headings:

  • The Revenue Model, to describe what you’ll sell, your marketing plans and how you expect to generate revenue
  • The Operating Model, to detail where you’ll do business and how day-to-day operations will function
  • The Working Capital model, meaning the business cash-flow requirements. Understanding cash-flow helps you know when money will be available to meet expenses like rent and payroll (it is distinct from revenue). A business can generate adequate revenue (sales) and still suffer from cash-flow problems.

Your business model will keep you organized and your priorities realistic. Matters such as quality control, collecting accounts receivable, inventory management and identifying strategic partners will mean much more than your number of Facebook followers, for example. Best of luck to you and your new business!

Thanks for reading,

Kim

Six Most Economical and Best Selling Hybrid Cars

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If you are planning to go green, then you should take that passion and apply it to your automobiles too. Nowadays, you will find multitudes of fuel efficient cars that consume less fuel than regular ones, thus help in conserving the environment. These hybrid cars are equipped with a gasoline engine and an electric motor. But going green does not necessarily mean skipping out on style and exterior. As manufacturers now have started to combine both, hybrid cars are selling like hot cakes.

Here is my list of the most popular and top notch hybrid cars. The following six best selling hybrid cars have many luxury features too, which make them so attractive and expensive of course.

Toyota Prius Hybrid:

It is definitely not as large as the Cadillac Escalade Hybrid (mentioned later), but Escalade’s sales are nothing as compared to the selling power of Prius. Actually, Prius is the number one selling hybrid car in the market. Green loving people adore it for its excellent fuel economy and exterior design which has become its signature style. The latest version is larger and more comfortable and also has solar panels on the roof (which do not ruin its overall look if you are concerned about that). The cheapest of all on the list, it has an attractive price of $24,200.

Cadillac Hybrid Escalade:

This fabulous car is a perfect example of how you do not have to skip out on the bling to save the environment. It is the world’s first full size luxury hybrid SUV and hence has a whopping price of $73,850. I would not skip out on this one if I were you because it has features that are totally worth the price. It has a powerful V-8 engine and can seat up to eight passengers. Its high tech interior features include: an ultra-sonic rear parking assist, a rear camera vision and music control that automatically adjusts to background noise. It comes with a 25% enhancement on fuel economy when evaluated to the standard Escalade. Obviously, it does not save as much fuel as the standard smaller sized hybrid cars, but if you are looking to combine luxury, space and utility and a more environmental friendly vehicle, then I would highly recommend the Cadillac Escalade Hybrid.

Lexus LS600h

For those of you who would like to opt for a smaller yet equally luxurious car as the Cadilac Hybrid Escalade, this one is for you. It is the largest and most luxurious car produced by Toyota (which is Lexus’ parent company). It is different and unique in both, external and internal aspects. The electric motor can power the car at slower speeds to save gas and provide a power boost to the gas engine fuel economy at its best. I would recommend this if you want to combine a thrilling ride with green driving. Its interior is equally beautiful with a combination of sleek leather and wood. Every Lexus vehicle has a Remote Touch Interface (RTI), but this particular 12.3 inch version is more eye catching than the road. It even has a rear seat entertainment system with an underarm cool rest for cool beverages. Obviously, with all these extravagant features the price of this car is $119,910 which exceeds that of the Escalade.

Toyota Highlander Hybrid:

If you are looking for a family vehicle that can hold a large number of people as well as luggage and is environmental friendly, then Toyota’s Highlander Hybrid is the perfect fit for you. It can seat up to seven people as well as having plenty of space for luggage, sports equipment etc. It has a sophisticated powertrain with a 3.5 liter V6 engine accompanied with two rather than the usual one, electric motors. It gives you up to 37 percent more fuel economy. It is also quite strong externally and is able to weather rough conditions and uneven dirt roads without a hitch. Internally, as mentioned before, it is spacious with adequate leg room. It is equipped with the latest technology like, a “Display Audio” multi-media system with a 6.1-inch touchscreen and Toyota’s Entune service, which offers apps like Bing search services, iheartradio.com and Pandora music. The price $46,370 in my opinion is quite reasonable and affordable considering all the features it has to offer.

Honda Civic Hybrid:

Honda Civic hybrid is one of the most affordable hybrid cars in the market, therefore it automatically earns a place on this list. It is not very different from the standard Civic model which makes it difficult to distinguish. Its gas electric powertrain consists of a 1.5-liter i-VTEC inline-four that teams up with electric motor to give 110 horsepower and 127 lb-ft of torque. The exterior is the same as Civic but the latest model has been upgraded with slightly different features and a better interior too. The air vents have been revised and the cabin has been made more sound proof. Overall, the driving experience is also quite enjoyable; it is easy to handle and accelerates well. It is priced at a fair $24,360. However, lately its price has been trumped by the cheaper Honda Insight.

Toyota Camry Hybrid:

Another Toyota car on the list, which is hardly surprising considering Toyota offers some of the bestselling and popular hybrid cars. Similar to Highlander Hybrid, this all in one type also provides excellent performance and a comfortable and spacious interior. The engine is a 2.5-liter Atkinson cycle inline four-cylinder gasoline combined with an electric motor. The car is available in two trim grades: the LE and the XLE. The former has all the basic features such as A/C, keyless entry, cruise control etc. The XLE is a more advanced version with extra interesting features such as a 6.1 inch touchscreen and a leather strapped steering wheel with audio control. Contrasted to the standard Camry, on the whole, there is a 26 % enhancement in fuel economy. The price is reasonable at $26,140 and the XLE version costs $1530 more.

Gold in Literature

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Gold as a metal has always been a valuable commodity since ancient times. We find numerous references to gold in the ancient Greek literature, and mythology, Roman mythology, Native American, and Egyptian mythology. Man has always been fascinated with this golden metal. Gold in literature is often associated with power, opulence, desire, and a sense of ultimate perfection. An unforgettable tale of the Greek mythology about a king named Midas, explains a lot about human nature. He wished that whatever he touches may turn into gold. Once Dionysus granted his wish, he realised the terrible mistake he had made.

During the renaissance, gold was extensively used in terms of its material value, and for the purpose of symbolism. However, even before that, when English as a language was still in its developmental phase, Geoffrey Chaucer used the term of gold in his famous Canterbury Tales. He says that precious time, which is lost in idleness, is more lamented than losing stores of gold.

Tragic history of Faustus was initiated by his self-conceit, and greed for accumulating gold. Marlowe told, Faustus uttered his greed in the following manner:

‘Be a physician, Faustus; heap up gold’-

(Dr Faustus by Christopher Marlowe)

Shakespeare has given detailed accounts of gold in imagery and symbolism. For example in The Merchant of Venice (Act 2; scene vii) he writes: ‘all that glisters is not gold’, which is an old proverb. However, Shakespeare uses it here in a specific context to explain the significance, and uniqueness of gold, and how sometimes people misjudge others on their face values only.

Gold was always accepted as a metal with great monetary value. Indian literature is full with frequent references to gold as an object to worship, and as a holy gift to their gods and goddesses. Chinese literature has abundant material where gold has been used allegorically, or is referred to physically.

After the Californian gold rush, writers and poets found new avenues to work on. They came up with thrilling, exciting, and adventurous stories, which simply enthralled the readers. Gold thus acquired a new status in literature, but it was a purely materialistic approach to it. The gold hunt stories, and how the fictitious characters in a novel made their journeys from rags to riches, found a great to the readers-especially the young generation.

Mark Twain’s The Californian’s Tale held the attention of every individual when it was first published. It was not only about gold, and its aesthetic, or monetary value. It was a story of a sad man in the backdrop of the Californian gold rush. This short story is about the socio-economic factors surrounding that particular era.

Gold shall always find new dimensions to be expressed in our literature. The reason is its universal and perhaps eternal appeal, which has gripped mankind since ages. Robert Frost though had a different opinion. He was of the view that gold, as all other materials are not forever. In his poem Nothing Gold can Stay, he is referring to the gold color only, but his logic suggests that gold is not something that stays with you forever.