I heard a comment this month that entrepreneurialism is a viral condition. The idea is that all you need to do is come in contact with someone who’s mind has opened up to entrepreneurial opportunity, to catch that virus—which I’ll define here as the condition of seeing opportunity all around you. I know this is true in my life. Just knowing that my Millionaire Mentors took an idea from start-up to a successful exit strategy in nine years seemed to give me insight, or maybe the permission, into believing that I could do it too. It was as if a door had opened in a room that I had become accustomed to living in my whole life—get a job, a career, buy the big house and SUV—to reveal a whole other part of a house that I had never seen before, with bigger rooms and lots more light. Suddenly I saw the possibility of so much more freedom and satisfaction in my life by becoming an entrepreneur.
I saw an example of this at my speaking engagement this week at a conference on entrepreneurship at E2Detroit www.e2Detroit.com. A male student was there as an employee of Barnes & Noble for the purpose of selling my book during my book signing. He was a physics major, with a heady interest in theoretical physics as it related to time, yet after hearing my speech, he came up to me to tell me two ideas he had for products, one which could possibly revolutionize the way we look at and use energy in our own homes. After hearing his second great idea, I had to stop him and ask him if had seriously evaluated the opportunity. Example, what was the cost for creating his revolutionary home energy-generating system, what was the Return on Investment (ROI) for the homeowner, meaning how long would it take to recover the cost of installing the system in through energy savings. Essentially, I was asking him, have you evaluated the opportunity completely by writing a business plan?
If entrepreneurialism is a virus, then the cure has got to be in a Business Plan.
Getting the virus comes from seeing opportunity in an idea. Curing the virus requires writing a Business Plan and forcing yourself to answer all the questions that go along with turning that great idea into a reality.
Which brings me to a question posted on the www.MommyMillionaire.com Message Board this week about Business Plans and prototypes. Christine wrote to me to ask about the best way to write a business plan. There are lots of different business plan templates out there, but you can visit www.mommymillionaire.com where you can download my preferred version for starting out on the Templates page. When you’re writing your Business Plan, the message is “don’t get overwhelmed.” This is not going to happen overnight. It can take you weeks to complete the research necessary just to adequately evaluate your COGS or Cost of Goods Sold. Building a Cash Flow Spreadsheet, and providing the rest of the required financial documents for obtaining funding, can take you additional weeks. I go into this in detail in my book MOMMY MILLIONAIRE, so if you need additional guidance on writing your business plan and obtaining funding, pick up a copy today and read it.
Christine was primarily concerned about writing a business plan that would satisfy a potential angel investor. Angel investors are sophisticated investors licensed by the SEC or Securities and Exchange Commission to make investments in small to mid-size companies for the purpose of capturing returns of typically 30% on their investment, as well as to stimulate economic growth in their communities. Writing a business plan that will satisfy sophisticated private equity investors is going to require help from additional sources, particularly your local Small Business Development Center. I tell you how to locate your local office of the SBDC in my book, and online at www.mommymillionaire.com on the Templates Page. The question, as brought to my attention today by a friend who emailed me an article in the NY Times on raising capital for women-owned businesses is this: Would you really be willing to trade control of your company for money to fund its growth from angel investors?
Besides Christine struggling with her Business Plan, she admitted being stuck on creating a prototype, which is a dilemma a lot of entrepreneurs encounter. I address the prototype question in a separate topic on the www.mommymillionaire.com Forum, so log on today if you want to read it. However what needs to be emphasized here again is the necessity for at least a Nondisclosure Agreement, or a Provisional Patent Application while you talk to various individuals in your beginning stages of creating your prototype or taking it to market. Christine talks about her dealing with an individual who refuses to sign one, and asks for advice. My advice would be this: don’t ever give anyone proprietary information about your great idea or product without them first signing an NDA, unless you’ve got a Provisional Patent Application in place. A PPA costs under $100, is only 3 pages long, and gives you patent-pending protection in the marketplace for a year while you investigate these prototype issues. I know it’s hard to hold your line—even I’ve trusted people with confidential or proprietary information, when I thought there was serious opportunity with a good-faith intent to move forward. Not one of these opportunities has delivered any results—all the good-faith intent disappeared the minute I gave them my information--and I’ve learned to regret each instance.
In the end, there are no easy answers to difficult problems. Just take your time and do the work that is necessary to evaluate the opportunity before you give it away. There is just no short-cut around writing the business plan.
What do you think about the question of the day? Would you really be willing to trade control of your company for money to fund its growth from angel investors? Join the www.mommymillionaire.com forum on the Message Board and let me know.
Copyright 2007: Kim Lavine
Kim is the President and Founder of Green Daisy, Inc—a lifestyle brand focused on balancing life with love ™--and the best selling author of Mommy Millionaire. Kim has appeared on The Today Show, Rachel Ray, NBC & ABC news, CNN, CNBC's "The Big Idea" with Donny Deutsch, NPR, Oprah & Friends Radio Network, LifetimeTV.com, and has been featured in USA Today, Country Living, Guideposts, Women's World, and American Baby to name a few. Kim is on a mission to encourage women to follow their dreams, inspiring them with hope, honesty and faith.
Kim’s book has been called by Publisher’s Weekly in a Starred Review: “A top-notch, how-to guide on launching a business. Lavine’s human and authoritative story make this one of the most engaging and useful resources available for readers hoping to convert their passion into a healthy company…a rare gem.” USA Today says ““Mommy Millionaire is loaded with resources for a fledgling business person…armed with a good idea and boundless energy.” Barbara De Angelis, PH.D.—#1 New York Times Bestselling Author says, “Mommy Millionaire is an inspiring gift and road map to success for anyone who’s ever had a dream.”
"Everything begins with a search for something better--a dream, an idea, the
courage to face a challenge, and the passion to get it done.
You can do it.
Believe in yourself.
Change the rules.
Join the revolution."
From MOMMY MILLIONAIRE, by Kim Lavine
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