| Business investors are sensitive to at
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| | rapidly becoming popular in other areas
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| least three major constraints when
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| | of the world, the average Japanese
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| evaluating business plans. I call these
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| | kitchen was too small to accommodate the
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| constraints The Three R's: reality,
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| | new appliance. Moreover, the prevailing
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| readiness, and resources.RealityMany
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| | attitude among homemakers was that
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| creative entrepreneurs with ideas for
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| | dishwashers were for the lazy or the idle
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| scientific breakthroughs have ended up
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| | rich. It took over a decade of attitude,
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| frustrated with business investors who
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| | social, and cultural changes before the
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| just don't seem to "get it." The truth
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| | timing was right to successfully
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| is, however, that it's the entrepreneur
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| | introduce dishwashers to the Japanese
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| who's not getting it.Unlike creativity or
| |
| | market.Business plans not only fail to
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| scientific breakthroughs, starting or
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| | gain support when they are premature,
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| expanding a business requires the
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| | they also fail when they are late. Think
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| entrepreneur be keenly aware of their
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| | how many American and European watch,
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| customers, competition, and core
| |
| | automotive, or camera manufacturers lost
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| competencies.Creativity and scientific
| |
| | their competitive advantage in their
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| breakthroughs often disregard the
| |
| | respective international markets because
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| customer, the competition, or a company's
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| | they resisted automation or robotics
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| core competencies, which is why they are
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| | until it was too late. It is unlikely
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| usually risky and often require
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| | that investors would support a U.S.
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| significant capital over several years
| |
| | business plan based on automation or
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| before they are monetized. The opposite
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| | robotics in one of these markets
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| type of investment most business
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| | today.ResourcesIt's amazing how many
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| investors seek.For example, suppose you
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| | entrepreneurs ignore or neglect this
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| had an idea for a new everlasting light
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| | constraint. Perhaps they believe that
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| bulb. After researching the market, you
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| | this is the entrepreneurial way...to know
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| determine that customers do want such a
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| | no obstacles. Although this attitude may
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| bulb and are willing to pay a premium for
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| | impress self-help gurus, it won't impress
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| it. Preliminary manufacturing studies
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| | business investors.The business plan
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| show that you can produce the bulb and
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| | graveyard is filled with plans that
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| profit nicely from it. Would business
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| | failed because their entrepreneurs were
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| investors be receptive to backing a
| |
| | not sensitive to resource limitations. In
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| business plan that puts you up against
| |
| | most cases, these limitations range from
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| the likes of General Electric or
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| | the entrepreneur's lack of sensitivity to
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| Westinghouse? But, you say, your plan is
| |
| | their own internal resources and skills
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| to some day sell your idea to these
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| | to not fully understanding what it takes
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| competitors. Again, how receptive would a
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| | to execute the plan itself.This is
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| GE or Westinghouse be to a plan that
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| | especially true of businesses that are
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| obsoletes a major product line? What
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| | trying to expand through diversification.
|
| would HP do with a plan that killed its
| |
| | The world markets are filled with food
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| aftermarket in print cartridges? Do you
| |
| | companies that have failed trying to
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| see the flaws in such thinking? Business
| |
| | enter pharmaceuticals, chemical companies
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| investors do.That's why business
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| | that have failed trying to enter foods,
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| investors like to invest in business
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| | or electronic component manufacturers
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| plans that are grounded in reality. Plans
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| | that failed trying to enter final
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| based on reasonable risks that can be
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| | assembly.For start-up companies,
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| monetized quickly and generate a return
| |
| | entrepreneurs often fail to adequately
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| on their investment. Although the
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| | estimate cash requirements or the time
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| everlasting light bulb strikes a consumer
| |
| | and resources required to build
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| hot button, it fails the reality test by
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| | distribution channels, win customers, or
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| not addressing the distribution network
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| | to launch or sustain a business.Business
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| and shelf control of large competitors.
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| | investors, experienced ones anyway, are
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| More important, the strategy to sell the
| |
| | all too familiar with the importance of
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| business to one of these competitors is a
| |
| | resource constraints. So, when business
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| flawed exit strategy.ReadinessThe second
| |
| | investors zero in on this area and
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| major consideration that a business
| |
| | challenge your assumptions, don't get too
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| investor wants addressed is readiness or
| |
| | defensive. Instead, listen to their
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| timing. Unless the time is right for the
| |
| | concerns with the knowledge that they can
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| proposed business plan, business
| |
| | help you tighten up your plan and improve
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| investors are not likely to support
| |
| | your chances of success.Mike Elia is a
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| it.Take for example a business plan to
| |
| | chief financial officer and an advisor to
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| introduce dishwashers in Japan in the
| |
| | venture capitalists and leverage buyout
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| early 1970's. When dishwashers were
| |
| | specialists.
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