BOBBY FLAY and STEVE ELLS (W Barrett)
Bobby Flay is one of America’s top chefs and restaurant owners. Currently Flay owns six high-end restaurants that gross millions of dollars yearly and five fast casual dining called Bobby’s Burger Palace. At the age of 17, Flay took a job at Joe Allen’s restaurant where his father was a partner. Mr. Allen was highly impressed with Flay that he paid for his tuition to the French Culinary Institute. Flay currently acts as a spokesperson and Master Chef for the school. Over the past several years, Flay has become partners in opening up restaurants, including Mesa Grill and BOLO. Flay has published three books since 1994. These include Bold American Food, From My Kitchen to Your Table, and Boy Meets Grill. Flay has also launched and starred in three national cooking shows. They include Grillin’ & Chillin’ on Food Network, The Main Ingredient with Bobby Flay on Lifetime, and Hot Off the Grill with Bobby Flay on Food Network. He has an “incredible ability to create and retain the individual characteristics of each of his projects, keeping them unique and always one step ahead of the trend” (Star Chefs). He is now the leading investor in the new hit series on NBC’s, America’s Great Next Restaurant.
Steve Ells founded Chipotle in 1993 with a loan from his father for $85,000. He is the co-Chief Executive Officer and was appointed Chairman of the Board in 2005. Prior to the launch of Chipotle, Ells worked for two years at Stars restaurant in San Francisco. Ells graduated from the University of Colorado with a Bachelors of Art degree in art history. He is also a 1990 graduate from the Culinary Institute of America. He is also [SB1]currently a top investor on the new hit series on NBC’s, America’s Great Next Restaurant.
The investors on America’s Great Next Restaurant are looking for the best concept to invest millions of dollars into opening three restaurants in Los Angeles, Minneapolis, and New York City. There are key and critical components that the investors are currently looking for in the business plans to make the concept work. One of the key concepts is the name. With the name of the company, it must represent who the owner is and the concept the owner is trying to portray. It must connect the food concept with the name. The owner must be careful in not offending a certain age group. For example, a competitor on the show has a concept called Saucy Balls. It could potentially be offensive to the older generation and not be inviting to that demographic. Another concept was named W3’s (Woods, Waffles, and Wings), however, a gumbo dish was prepared and wasn’t incorporated with the name. If the name of the company does not connect with the food product, consumers will be confused and potentially not return to the restaurant.
The logo must be simple and to the point in order for it to be appealing. It must also connect with the food concept. The logo must be unique, eye catching, and mouth watering. A unique logo idea without a connection to the product is not appealing to the consumers. Meltworks, a grilled cheese company in the competition had a logo derived around a machinery concept. The investors did not understand the connection between the two. A logo that has a lot of writing surrounding the name is very unattractive. The logo must be short, concise, and too the point.
The slogan needs to be catchy and unique. The slogan needs to take the consumer on a journey and needs to be well rounded with the concept. It needs to a short, simple phrase that connects the name, logo, food concept, and what the business is all in one. Creativity is key in developing the name, logo, and slogan. Without each of these developed first, there is no concept for the business.
The pitfalls have surrounded[SB2] around the concept of the company, the marketability, the ability of teamwork, the leadership skills, and the communication. Each of the investors has seen pitfalls in each of the contestants on the show. Pitfalls will come when developing a business plan. In order to invest in a company, the business owner must be willing to take critical advice and risks.
There must be a concept for the company that is unique and marketable. Without a concept that is marketable, there is no chance in surviving in the competition. The business owner must have the confidence, drive, and passion in the business concept. An unclear concept makes it hard for investors to invest millions of dollars into a business plan with no vision and marketing plan. For example, a bar-b-que joint needs to remain focused on bar-b-que and not stray from the concept to grilled meats. The owner must have a solid concept before investors will invest. It must also be communicated properly for the investors to want to take a risk with the business concept.
The company must have a marketable aspect in order to gain exposure and consumers attention. The idea must have a marketing plan available for all generations in various regions. For example, an idea focused around selling soups as the main product would not work easily in parts of the country that are warm year round. The turnover rate would be too high to invest in a product that doesn’t work around the country. Geography and demographics are important in determining the product that will be developed and made.
The ability to work in a team is critical and you must possess outstanding leadership skills. Investors are willing to work with you in order to make the company a success. They will give critical advice and you need to be willing to listen and accept the advice that is given. A business owner cannot afford to be resistant to investors. The owner must also be able to show leadership skills in tough situations and take risks. An example is firing a head chef in order for the concept to have an opportunity. Being a risk taker with outstanding leadership skills will impress investors.
Flay and Ells have been in the restaurant industry for many years and have a clear understanding of what it takes to be successful. They have differing opinions in which they believe should advance in the show. Flay is looking for the determination, drive, and ambition in the business concept. Ells is looking for the quality of food in the business concept. Together they make a great team in finding the various reasons of why they believe the contestants should advance and they invest millions of dollars into the business plan.
PATTI BROTHERTON and CHUCK BLAKEMAN (TJ Christian)
Patti Brotherton has been a licensed Realtor for 24 years. She has been on the #1 sales list and has led many companies to the top. (Brotherton, n.d.) She has worked to earn many dollars for people she has worked with and herself. Besides a Realtor, she helps many others become successful. Mrs. Brotherton grew up in a family with a mother that set goals and understood how they work. She used that information that was shown to her to provide success in her career. She stated in an article from IRED, International Real Estate Digest, that she takes a few days at the end/beginning of each year to sit down and reflect on what has happened over the last year and the goals that need to be set for the next year. She plans them out, sets a time and date for those that are needed and puts together a plan. “When you have a business plan written down along with your goals for the year. You have all the makings for a tremendously successful year! Especially since you calendared all the activities necessary to make it so.” (Brotherton, n.d.)
Chuck Blakeman, on the other hand, is an example of those that do not back the business plan. Chuck Blakeman is an entrepreneur and heads the business of Crankset Group. Mr. Blakeman states, “The #1 key to success is the speed of execution.” (Blakeman, 2011) He believes that it is not the hours spent writing up information about your business and the days spent gathering data that may, or may not be, correct. Mr. Blakeman believes that it is actually stepping out and taking on the venture when the idea is brought to life. Once you begin your journey, if there is something to tweak, then you can change that as you go and perfect things as they come. “Implement now, perfect as you go.” (Blakeman, 2010) Chuck Blakeman believes that one will waste too much time sitting down and thinking about how a business will perform. Rather than wasting that time, start your business and sit down from time to time and write down some things that are working or not working for your business.
One of the main reasons people develop a business plan are because of funding. Reasons were stated in research as to why people write business plans, but more of the reasons included funding. Investors need to see that they are gaining from their investment. If they have proof that the investment will actually make them money, they are more likely to put their money in the investment. A business plan answers the questions about the company that investors have and shows the investor that you are organized and have done research. Other reasons stated by an article from Small Business were that business plans help to identify potential problems and help solve issues before they begin. (Ellyn, n.d.) No business plan is going to solve all problems for a business by any means, but the planning and implementing of a business plan will bring out many of the problems that may arise and allow a business owner to face those problems and change things accordingly.
Both people stated above have opposite views of business plans and how they work. A similarity, however, is that each one still believes you have to have goals for a business to be successful. Even Chuck Blakeman said, “Knowing the end goal is extremely important – knowing beforehand the path for how you will get there is fortune-telling.” (Blakeman, 2011) Even though you may not want to set a path before you begin, you still have to know where you are going.
NIC BRISBOURNE (Cunningham)
There were two main articles that I read regarding business plans and their importance and what they should encompass. The first article was “Understanding How a Business Plan Is Read” written by Nic Brisbourne. Nic Brisbourne is a partner of DFJ Esprit, which is “a single team of partners all of whom benefit from and contribute to the success of our investments. They are entrepreneurs ourselves and we are proud to have built our firm to its current size and are passionate about continually moving forward, which means backing winning companies and doing everything we can to help them achieve and exceed their ambitions.” (http://www.dfjesprit.com/about-us/). His focus is consumer applications and services.
In this article he focuses on a quote that was spoken at a conference he attended, “We all know that business plans are a sub-genre of science fiction.” Nic identifies the validity of this quote on two levels: 1) At the start of any plan, something will change and the numbers will come in under or over; and 2) a lot of business plans are written with a view to raising investment and contain a lot of forward looking thinking designed to excite and inspire like science fiction. (Brisbourne, p. 1).
One important fact that he brings out is an entrepreneur spends a long time creating the business plan, an investor reads it quickly. This statement has made me re-evaluate my plan and how it is written. I have to write it from not only my perspective of what I think it should be but also the investor’s perspective. Nic mentions that a business plan does help to clarify and enhance thoughts and plans about a business, which is very important. If you really don’t know what your plans are, you cannot effectively convey them to potential partners and investors. As an investor, Nic mentions the parts of the business plan that he looks at when deciding whether to go for that first meeting:
· Summary of product
· Evidence of momentum
· Summary of Financials
· Evidence of Ambition
· Market Dynamics description
After reading this article, I realize there are certain sections that hold higher precedence over other sections and it is important that the key points that investors want to know are descriptive but concise, and effective in their message.
The next article was found on AllBusiness.com, which is the world's largest online resource for small businesses, providing essential tools and resources to start, grow, and manage your business. This site has contributors from all over the world with vast knowledge and wisdom on business and business start-up. This article was entitled, “Top 10 Tips for Writing Your Business Plan[SB3]”. Out of the ten tips mentioned in the article, there were a few that I thought were important and useful as I complete my plan.
The first tip mentioned was one that I think is most important, “Create A Vision”. Outlining a clear vision and a coherent set of values for your company is the first step before the details are created. An investor should be able to clearly identify the vision of my company from the first few pages of my plan. The details should be created around the ultimate vision of the company and its mission. The vision should be clearly defined and used to identify the goals and priorities. This vision should be easily identified through the Executive Summary of the business plan.
The next tip was “a budget isn’t the same thing as a plan”. A key point of a budget is that it must be realistic based on the industry, customers, competitors, and market conditions. A budget should be the product of all the other elements of my plan. Additional research in the areas mentioned above may need to be conducted to ensure the budget submitted is realistic, not just one that “looks good” to investors. In today’s economy, you have to take the market and economic situation of potential customers into consideration in preparing your budget. Elevated sales or growth in sales may not be as realistic in these tumultuous economic times as they would have been 7-10 years ago.
The next tip of being prepared to take risks is something that business start-up encompasses and cannot be avoided. Starting a business is a risk, but the key is preparing for those risks, understanding the risks and most importantly, managing the risks. As an owner, your business plan should anticipate possible challenges but having a proactive plan to manage those challenges. One thing the article mentions is that there’s a difference between a calculated risk and recklessness and your plan can make that distinction. A reckless plan will not get the results or attention from investors that you desire, so it’s very important to look at the risks carefully and determine the proper plan to deal with the risks so that the risks don’t overtake your business.
The final tip that I think is very important as well is “expect the unexpected”. The article notes that every business plan needs some wiggle room to allow for unexpected changes. Just like managing risks is important, so is managing the unexpected. The key to being a new business owner and starting a business is to be flexible. A new business will not always go as planned or as written so as an owner, I must be flexible to change different plans that may not be as effective as initially proposed. As an owner, you must adapt to change and also be open to suggestions and critiques from your employees, partners and outside persons that may help your business.
DONALD TRUMP and OPRAH WINFREY (N Gerecitano)
When people think of business, many names come to mind, but there are two that are consistently near the top of the list. Those names are Donald Trump and Oprah Winfrey. Each of these people is known for their vast empires that they have built. Both have major television shows focused on them, with Mr. Trump’s show focusing specifically on business and showing how well the contestants can handle running a company.
Growing up, Mr. Trump was an energetic child and his parents wanted to help him focus that energy into a disciplined mentality. They sent him to the New York Military Academy at age 13 and he rose to be a start athlete and leader among the student body. He then went on to graduate from the University of Pennsylvania with a degree in Economics and eventually followed in his father’s footsteps and entered the real estate industry. (Donald Trump, 2011)
Ms. Winfrey grew up in a troubled home in Mississippi where she was repeatedly sexually abused by family members and friends of her mother. She was eventually able to move away to Nashville to live with her father Vernon, a barber and businessman. In 1971, she entered Tennessee State University and started working in radio and television broadcasting. In 1986, Oprah launched “The Oprah Show” and in its first year, it grossed $125 million in profit. Oprah received $30 million of that for herself and decided to take control of her show from ABC under her Harpo production company. For years, she has had one of the highest grossing daytime television shows in history. (Oprah Winfrey, 2011)
Donald Trump’s stance on business plans is fairly simple: with a business plan, there is a direction and focus. (Williams, 2009) This is such a simple sentence, but it makes complete sense. If there is no business plan, then there is no focus for your business and you are bound to fail. With a plan, you know where you are going, what you are doing, and how you will get where you want to be. The biggest pitfall mentioned is not making a business plan at all. Trump says that if there is no business plan, then the business is bound to fail. It makes sense, especially in this economy that investors would want to see a business plan before investing their funds. Without the plan, any entrepreneur would not even be able to get their feet off the ground.
Oprah’s view on a Business plan is very similar to what has been taught throughout the entire program at Full Sail. She says that writing a business plan will “force you to consider the what-ifs and tiny costs you might overlook”. (Brewster, 2007) She also says that a business plan will force you to see what you need to change to finally start making money with your business. This is probably the best advice and possibly the biggest pitfall mentioned. This is good advice to follow because a business plan is really a living thing. It grows and changes just like we do and the economy. It is a pitfall because if we cannot adapt our plans to the current economic climate, then we will most certainly fail.
The advice from these two people is definitely worth taking to heart. While Donald basically says you have to have a plan or else you will fail, Oprah says that you need to monitor it and adjust it so that you will succeed. These are two different views on business plans but both are saying the same basic information: make sure you have a good, solid business plan so that you do not lose focus on your ultimate goals. This is the ultimate goal of any new entrepreneur.
Looking at what Donald and Oprah have said about business plans just reinforces how important these plans really are in the business world. I knew going in to this program that I would be working on a business plan as my final project and did not really understand what all that meant. When the program first started, I even sat down with the president and founder of the company I currently work for, Charley Humbard, to try and gain an understanding of how someone in the entertainment industry actually started a successful television network. He mentioned his business plan and how he had to modify it as well as the finances needed to start the network, but eventually he found the support and financial backing he needed as well as competent and well respected people to help start the company. I know now that I need to, especially in this economy, focus on the numbers for finance to ensure that I am not asking for too much or too little. If I want to start a production company with a fully functional studio, I know it cannot be done for $100,000 and so will investors. I also know it would not take 10 million dollars to open a small studio and edit facility, so I should not bother asking for that much or else investors will wonder what I am wasting their money on. Charley said his initial business plan started at a $1 million investment and eventually worked its way up to $29 million before he actually was able to sell the idea of the network. From the information gained from Donald, Oprah, and Charley, I know that a good plan is one that is focused and shows exactly what the company will be doing and how much to realistically charge for services. This information will help me create a more solid business plan that investors will actually take the time to look at and possibly invest in. Now that I understand the importance of a business plan and have heard success stories from people within the industry, I know what I have to do to make mine stand apart from the rest. If I can follow what these experts have said and use the knowledge I have gained from this program, I know I will be able to start my own successful business in the near future.
MARK ZWILLING (J Kaplan)
Mark Zwilling is CEO & Founder of Startup Professionals, Inc., Haman Ventures Board Member and Executive in Residence; Advisory Board Member for multiple startups; Arizona Angels Selection Committee; Entrepreneur in Residence at ASU and Thunderbird School of Global Management. He has been published in Forbes, Harvard Business Review, and Business Insider. His article, Top Ten Investor Turnoffs Around Business Plans from his blog discusses things that investors want you to avoid in your business plan.
Zwilling’s view on what key components must be included in the plan are:
· The Executive Summary. Zwilling says some investors will not look at a plan that does not contain the Executive Summary.
· Make sure the business plan is actually a plan.
· Plans that are actually production specifications are not what the investor is looking for.
· Professionalism is important. Make sure your plan is free of typos, misspelling and other errors.
· Keeping the length of the plan around 20 pages seems to work.
Zwilling listed a number of other pitfalls to avoid, but the reason why including an Executive Summary is key is because the investors want that snapshot right up front before they look at the rest of the plan. It is important because if it is missing, your plan will be tossed. More does not have to be said about the importance of an error free and professional looking plan. The point about the plan containing an actual business plan, and not a format or draft for another element of your business or business process is also important.
MARK CUBAN (B Lojewski)
Mark Cuban is the owner of the Dallas Mavericks from the NBA, Landmark Theatres, and the chairman of HDNet. (Forbes) As a child growing up in Pittsburgh, Pennsylvania, Mark already explored business ideas and continued this path throughout his professional career. Mark was not given any particular types of advantages and has made himself in to an extremely successful businessman. He graduated from Indiana University with a bachelor’s degree in business administration. (Forbes) Mark has had his hand in several business opportunities and is a billionaire entrepreneur. He also has acted as an investor in many different companies (including startups). One of his best areas of business is dealing with business revolving around the Internet. (Forbes)
Perhaps the best way to view how these two experts view business plans is by watching them deal with potential investment opportunities on “Shark Tank”. Some of the key aspects these two look for in a business plans is if there is an actual need for the product or service. They then look to see if there is a market for the specific product or service. Another important aspect they will examine is the track record of the person looking for the investment as well as the financial record of the business itself (if there is one available). They will then look to see if the business model has room for potential growth and will consult with the person pitching the product about the potential growth. Finally, they will determine what they can bring to the business financially and with their particular expertise. Business plans that are extremely well developed and produced tend to do much better in gaining either of these experts interest as an investor. These particular concepts are considered key as they demonstrate a well thoughtout business plan. Both experts look for preparation in business plans as a key to see if the business could potentially be something they want to be apart of through investing.
Throughout the show itself, both experts will poke holes and find pitfalls in the preparation of business plans. Not having projections of finances in advance is a huge issue for both of these experts as they will be weary to invest in something that is not configured properly. Even if there is no true financial track record, they would much rather have some type of projection. If there is no financial information provided they would most likely not have any interest in the business. (Shark Tank)
Even though both Mark and Daymond have some key similarities in how they invest and view business plans, there are still some key differences between the two. Mark tends to be a little more aggressive in how he deals with potential investment opportunities. Since some of his key backgrounds deal with Internet sales he likes to invest in businesses that have some type of relation to it[SB4]. Daymond approaches business plans in a slightly more relaxed manner. Much like Mark, he tends to deal with business plans that are suited to his expertise, which is fashion. However, he is no stranger to other types of business models and plans. (Shark Tank)
FRANK GOLEY (T Miller)
The second person I researched was Frank Goley. Frank alongside Mary McCoy started “ABC Business Consulting.” Frank has been creating business plans and personally managing businesses for over twenty years. Frank has written several books and has more on the way.
Investors looking at plans these days have thousands to choose from. The number of people out their looking for money is staggering. All investors are looking at different aspects of a business plan because not all investors are looking to accomplish the same thing. Some investors are looking to make a quick dollar while others are looking for a long-term growth opportunity. There are, however, several items that most all investors agree upon, including Dave Lavinsky and Frank Goley. These categories include passion, market segment, management team, revenue model, and return on investment.
These concepts are considered key due to their importance of the overall success of a current or future business. Passion is key for investors looking to make money in a business in a “hands off” manner. Since the investor will not take an active roll in the management of the company, they want to be assured the person running the operation is passionate about success. Market segment is important because it will define how large your business can grow in the current state of its particular industry. Management team is another key concept because the experts agree that a company can be built or collapse on the actions of a management team alone. This is proven through former corporations such as Enron and Lehman Brothers. According to Dave Lavinsky, revenue model is the most important concept an investor should look for. The revenue model will tell you how the company makes money, how goods and services are bought and sold, and how the consumer will interact to the company. Lastly, all investors are looking for money, however the experts do not always agree that the return on investment is always the most important aspect of a businesses plan.
According to Dave and Frank, perhaps the biggest pitfall that individuals and companies face with business plans is communication and execution. A business plan must be well written, laid out, formatted, and tailored to your audience. Dave says the number one reason people lose investors that are interested is due to communication. They do not portray their business plan in a smooth, logical manner. According to Dave, people also do not present well. He says the number one mistake people make when presenting a business plan is they start spitting out numbers, facts, and figures. Investors want to know that information, however they want to hear about your business, they want you to talk about your industry, this shows the investors that you have experience and have thoroughly researched your industry.
In addition to communication, the second biggest pitfall agreed upon by the experts is execution. While many look at execution as a “post business plan problem,” Frank Goley says it’s a serious problem that occurs in the planning and development of the business plan itself. Franks motto is “plan, consult, implement.” He points out that to many people spend their effort trying to develop a great business plan or describe what they are going to do and they do not put enough thought and energy into how they are going to do it. Frank tells clients that the majority of your business plan should focus around two things. Your market and your business model strategy. Your market tells you whom you are targeting and your business model tells you how. Without both of these clearly defined in your business plan, you will fail during the execution stage.
Another huge pitfall that Dave and Frank talked about, as well as several other experts’ talk about is “burning need.” A person can have the greatest idea in the world, a phenomenal business plan, passion, and capital, however, if the product or service does not meet a burning need in the lives of the consumer, you will undoubtedly fail.
Dave Lavinsky and Frank Goley both believe that business plans are the corner block to a healthy, long lasting business. They firmly believe that the business plan is the document that you develop, that in turn becomes your “playbook” on running your business. Once completed properly, the business plan will walk you through step by step how to run and manage your business, how and where to market and advertise, as well as provide reminders for you and your employees such as the companies mission or long-term milestones you wish to achieve.
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