Do I Need a Business Plan?

March 8, 2010

Clay

As in just about every area of life, the importance of planning really can’t be overemphasized for the entrepreneur.  This old saying is very true:  Failure to plan is a plan for failure.  Even though some entrepreneurs may “luck” into success without going through the process, a lack of planning really is a formula for failure.

The business plan does not need to be complex or long, but it is necessary.  In simple terms, a business plan is a written description of your business, a document that describes what you plan to do and how you plan to do it.

What is included?

  • A business plan conveys the business goals and the strategies you’ll use to meet them.
  • It discusses the potential problems and risks that may confront your business and ways to solve them.
  • The plan highlights the organizational structure of your business and who the team members are.
  • It demonstrates that there is a market for your product or service and that you know how to tap that market.
  • The plan highlights how the product or service will be produced.
  • It also discusses the amount of capital required to finance your venture and where you expect that money will come from.

Clay Hickson advises a TowsonGlobal business

Business plans have several purposes. They’re used to seek support from potential lenders or investors.  They also may be used to attract key team members, win new business, work with suppliers, and understand how to manage the business better.  However, just because you have a plan doesn’t mean that everything is covered and that there won’t be surprises.  It does mean you will be much better prepared and more likely to achieve success.  Even so, once you have the plan in place, it doesn’t mean that all your work is done.  A business plan is a living document that should be regularly revised as conditions and goals change.

There are numerous resources available for guidance on developing a business plan.  Small Business Development Centers have workshops that teach all the basics.  Their counselors and those of a Small Business Resource Center or of the Service Corps of Retired Executives also can help.  Of course, there also are templates and other resources available on line, such as from the Small Business Administration.  In addition, participation in a business incubator program like TowsonGlobal can provide an entrepreneur significant help in fine tuning his or her business plan.

This nautical analogy sums it up pretty well:  “It’s better to be 5 or even 10 degrees off your charted destination than to have no port in mind at all.  After all, the point of sailing is to get somewhere, and without a plan, you’ll wander the seas aimlessly, sometimes finding dry land but more often than not floundering in a vast ocean.  Sea captains without a chart are rarely remembered for discovering anything but the ocean floor!”

Do you need a business plan?  Yes!

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Posted by Clay Hickson

Two Diverse New Entrepreneurial Ventures Latest to join Towson University’s Global Business Incubator

February 8, 2010

Clay

Demonstrating that the entrepreneurial spirit is alive and strong in Baltimore County, Vulcan Furniture, Inc. and Study Abroad Counselor, LLC, have become the latest companies to join TowsonGlobal, Towson University’s international incubator for startup ventures.

Vulcan Furniture, Inc. specializes in the supply and wholesale of office furniture, systems, seating, cabinets and accessories.  The company provides office furnishing solutions to architects, designers and businesses seeking an upscale image. The firm represents high-end international brand manufacturers, primarily from Asia.  Vulcan is a U.S.-incorporated affiliate of an established furniture company in Pakistan.  According to Shoaib Mastoor, CEO, his grandfather established Vulcan as a steel fabrication company in 1948 after immigrating from neighboring India.

Study Abroad Counselor, LLC, (SAC) is an online-based organization dedicated to assisting students around the world in pursuing studies outside their respective countries. Initially, the company will target smaller colleges in the Mid-Atlantic region and focus on programs in Spain. SAC’s founder Amine Faridi developed the concept for this one-stop-shop web-based business in light of his own experience of being a foreign student in Spain and in helping many other students prepare for study abroad opportunities, while realizing there was no easy way to navigate through all the information spread around the Internet.

Although these companies work within separate industries, both will bring valuable products and services to our region as well as internationally.  And, importantly, they will create new jobs and contribute to the overall economic strength of Baltimore County.

Since the mission at TowsonGlobal is to help both domestic and foreign entrepreneurial ventures learn how to compete in the global economy, we are excited to add both companies to the already diverse mix of startups here at the incubator.

View the press release here.

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Posted by Clay Hickson

My First Business

January 13, 2010

Clay

I started my first business when I was in fourth grade, but having grown up on a ranch in Texas, many of the usual ways a kid earns money weren’t really available to me.  I couldn’t have a lemonade stand or a paper route or mow the neighbors’ lawns.  What were my options?  I had to work with what was available if I wanted to earn a few extra dollars.  Well, along with the beef cattle, we also had a flock of chickens.  I’d been taking care of them since as long as I could remember, so I thought maybe I could sell eggs in town.

After talking it over with my parents, they agreed to support my entrepreneurial initiative.  Someone nearby was selling some of their older hens, and with some of my own money and an “investment” from my parents, I bought 20 of them.  We set up a separate chicken coop with nests in a part of one of the barns and fenced in an adjoining new chicken yard.  I went to town to find customers for my farm-fresh, free-range eggs and was able to get several people to sign up, including my school bus driver.

left to right: Aaron and Clay Hickson

Every evening I gathered the eggs, cleaned them, and stored them in cartons in an old refrigerator that gave me an electrical zap every time I touched the handle.  Each Saturday I’d load the eggs into the car, and one of my parents would take me on my delivery route in town. [Eventually, I would drive myself since the country lane into town was not paved, and no driver’s license was required for that.]

Naturally, those tired old hens didn’t produce for long, so I had to invest in some younger pullets in order to keep my supply coming.  While replenishing my “producers” was an occasional expense, I really didn’t have too many other expenses… except for chicken feed.  Skyrocketing input prices are what eventually put me out of business.  While I did gradually raise my prices, I couldn’t keep pace with the increase in the price of feed.  After about five years, the prices I needed to charge to break even, even considering the subsidy from my parents, were well above the prices in the grocery store.  I think my price got as high as $1.25, not much higher than super market prices of just a few years ago.  Alas, the chickens flew the coop, and I went out of business.

Even though I didn’t make much money over those years, I did learn some valuable lessons.

  • I learned the concept of supply and demand;
  • the importance of having a support network, of planning, and of monitoring competition;
  • and that you don’t always have to have the best of everything to do something well.

Of course, there also is that old adage:  Don’t put all your eggs in one basket!

from stock.xchng by bartozzi

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Posted by Clay Hickson

What is an Entrepreneur?

October 15, 2009
Clay

Clay

The term entrepreneur comes from the French word, entrependre, which means “to undertake,” and this is precisely the basic principle of entrepreneurship.  An entrepreneur is one who has a vision of an opportunity and takes the initiative to capitalize on it.  In simple terms, he or she organizes, manages, and assumes the risks of a business.  Surprisingly, there actually is debate over exactly what the term means, but few would argue that anyone who embarks on a new venture in order to create a new business would be considered an entrepreneur.

Entrepreneurs and other small businesses are the driving force behind the US economy, creating jobs and innovative technologies.  These businesses “represent 99.7% of all employers, employ more than half of the private sector workers, account for 39% of high-tech jobs, and create 60-80% of the net new jobs annually,” says Entrepreneur magazine.

A true entrepreneur has a vision to seize an opportunity with passion and diligence.  And these traits are crucial to success.  If you are thinking to yourself:   “This whole entrepreneurial thing is a piece of cake!  It can’t be a complicated process?  I can make millions effortlessly!”  Well, you are sadly mistaken.  Experience, knowledge, and most importantly, planning breed success.

from Flickr MartinPhotoSport

from Flickr MartinPhotoSport

Entrepreneurs often are innovators, creating new products, new production methods, new markets, new forms of organization….  However, being an innovator doesn’t ensure success.   People come up with new ideas everyday that we never even hear about.

Planning is the key to success.  Even though some entrepreneurs may “luck” into success, a lack of planning really is a recipe for failure.  There must be a market for whatever the idea is, and the product/service must actually be successfully produced and marketed.  And then there is the competition; someone may already be doing something very similar, or may learn how to do it better very quickly, stealing the market away.  The successful entrepreneur has a pretty good handle on all of these elements because he’s done his homework, he has planned.

towsonglobalMany entrepreneurs find that obtaining the support of an incubator can help them move more quickly along the path to success.  Incubators like TowsonGlobal provide a wide range of support, including affordable office facilities; business counseling & mentoring; networking assistance; and workshops and other educational forums.

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Posted by Clay Hickson