1. What is ActSeed?

ActSeed is an online business service and professional community dedicated to helping seed (early) stage companies. The mission of ActSeed is to:

1. Bring together all relevant individuals and resources that are dedicated to new business creation and seed stage growth into a dynamic community,
2. Provide a scored/rated profiling process to guide seed stage preparation and planning, and
3. Give each member the means to efficiently connect with other members.

2. Who should join?

ActSeed is for everyone who participates in or derives a livelihood from new business creation and building businesses at the seed stage through their investments of time, expertise, capital and entrepreneurship.  We emphasize our intent to provide a valuable service to everyone, everywhere - not just hi-tech companies in Silicon Valley.  ActSeed is committed to helping create and build businesses in all 50 states and around the world in every market – from manufacturing to retailing; from hard goods to services. 

Entrepreneurs are at the center of the ActSeed community.  Experienced entrepreneurs will find value in the efficiencies we create within business-building.  First time entrepreneurs will also benefit from the structure and guidance.  The rest of us should join because we each have some value to contribute to seed stage growth, including labor, capital, services and mentorship.

ActSeed: An "Entrepreneur-Centric Value Exchange"

3. How do I use it?

ActSeed is simple in concept and in application:

1. Register
2. Join one or more of ActSeed’s five Groups
3. Complete profiles for Groups you’ve joined
4. Review your ActSeed Scores for insight on your state of preparation and core value proposition
5. Anonymously search for other ActSeed members who can help you with your defined needs and goals
6. Communicate with them using your ActSeed username; reveal your real identity only when you believe there’s a fit for professional interaction
7. Constantly utilize the other professional resources: library, forum, events calendar, blog…

4. What problems does ActSeed solve?

Strategically, ActSeed addresses the 2 greatest challenges that seed stage companies face:

1. Proper planning and preparation: making sure you’re addressing all the right issues
2. Finding the right resources: labor, capital, services, mentorship, etc.

This strategic focus includes helping everyone in the “seed stage ecosystem” (see image in FAQ #2) find and engage startups and emerging companies that best fit their interests and capabilities.

Tactically, ActSeed confronts these challenges by:

1. Providing an online template that enables every member to articulate their value, identify strategic gaps and evaluate the completeness of their preparation through a proprietary scoring process and
2. Maintaining a growing, comprehensive community of seed stage resources that can efficiently search for and connect with each other based upon profile information, scores and other preferences.

5. How much does it cost?

It costs nothing to join ActSeed’s membership.

Members can join ActSeed’s Investor Group, Available to Work Group and access the Events Calendar – all without paying any fees.

If you are building a business or have a business idea, the ActSeed Entrepreneur Group gives you unlimited access to all of our planning tools and resources - including the ability to search for Investors and people in other Groups - for only $39 per month and no long term commitment.  A year’s worth Entrepreneur Group access is benchmarked to roughly one billable hour from an attorney and costs less than a registration fee for a typical entrepreneur seminar.  If $39 is unaffordable, email us at GroupAdmin.Entrepreneur@ActSeed.com; we have “charter member” programs that allow some entrepreneurs to have fees waived.

If you provide professional services or products to small businesses (e.g. legal, accounting, insurance, office supplies, etc.), the Service Provider Group enables you to profile your business and search for entrepreneurs who may need your services.  The fee for this Group is $30 per month with no long term commitment.

Six select sponsors per US region help support the costs of our operation. We don’t push advertising, nor will we ever sell or barter your profile details (see privacy policy).  Running a sustainable business ensures our ability to evolve and serve you.

6. Why should I join before the community has thousands or millions of members?

There is significant value right now with the tools that are immediately available, including profiling, scoring and other informational resources.  This value will grow as others join.  During our first few months, we will be able to provide a much more hands-on approach with each member, including the possibility of some 1-1 strategic coaching and personally connecting prepared entrepreneurs with our personal networks of investors, service providers and professional talent.

7. Where do I sign up?

CLICK HERE

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This post tells you how ActSeed is designed to do this for you.

Our goal is to deliver unparalleled value to seed (early) stage entrepreneurs at a fraction of what this value would cost in a conventional consulting / professional services model. ActSeed couples informational resources and a profiling/scoring system with a dynamic community application that helps entrepreneurs locate people who can help them build their business, including investors, workers, mentors/consultants and professional service providers.

The “FAQ for the Short Attention Span” article is a good overview of how ActSeed works. Let’s now take a more focused look at the specific value we deliver to entrepreneurs and their companies.

Dual, Integrated Value Propositions for the Entrepreneur

Value Proposition #1: Preparatory Framework and Business Profiling

The first value proposition for entrepreneurs is providing a framework for business planning and preparation. This is not a canned solution or a “business-in-a-box” service. Our goal is to help guide both novice and seasoned entrepreneurs through a structured and systematically scored business planning and preparation process.

Investor Prep. ActSeed’s Entrepreneur Group is designed to help you understand what most investors expect, then help prepare and position your company to attract seed investment. Almost every seed stage entrepreneur includes raising capital as a high priority. About 2% of all startup companies secure funding; 98% of all companies fail to secure investor funds. We want to dramatically improve this success rate.

ActSeed’s founders have a combined 40+ years of early stage business experience. We have founded venture-backed, corporate-backed and fully-bootstrapped startups. ActSeed reflects lessons learned from pitching to over 60 venture capital firms and angels as well as preparing detailed financial projections and business plans/presentations for over 30 companies across many different industries.

Investor Access.  ActSeed is a new community. The value to Entrepreneurs will grow as more and more investors join. As we build our Investor Group membership during our first few months, we will help our “charter member” Entrepreneurs identify prospective investors through our own professional networks and by highlighting our Entrepreneur Group companies in our Investor seminars, workshops and other recruiting activities. In other words, early adopters will receive a much more hands-on approach to helping with their capital raising efforts.

Preparing and Profiling Your Company.  ActSeed helps you address the question, “Am I prepared?” ActSeed segments preparatory activity into two profile templates. The first template is called the “Company Public Profile” and is viewable by the ActSeed community. The second template is called “Company Private Profile” and is only available to those who the entrepreneur explicitly grants viewing permission. Profile templates can be printed for offline review.

Entrepreneur Company Scores. ActSeed generates a numeric score between 0-100 for each preparatory topic (see “Framework” image). These scores help identify where your business needs attention and can be used by others, including investors, as a benchmark to qualify deal interest.

Entrepreneur-Exclusive Resources.  Members of the Entrepreneur Group have exclusive access to (1) a digital library of content and links and (2) a forum for peer collaboration.

Value Proposition #2: Dynamic Community of People with Capital, Labor, Services

The second value proposition for entrepreneurs is the community portion of our application we refer to as the “entrepreneur-centric value exchange”.

Entrepreneur Centric.  As an Entrepreneur Group member, you can search for and engage people in all other core groups and all other groups can search for your company. ActSeed places the entrepreneur in control at the center of the community.

Advanced Search.  To find and interact with others in the ActSeed community, we provide an advanced search screen that allows you to use a comprehensive set of search parameters. You can have results sent to your email inbox on a daily or weekly basis. Imagine having a service that addresses, “I am looking for an investor within a __ radius of my location who is looking to invest in a __ stage company within the __ industry and is looking to invest $__ into a deal within the next __ days.”

Messaging & Member Interaction. When you identify prospects, you can send them messages within the system without revealing your actual identity until you are ready. Recipients of your message can view your public profile and reply back to you. If you both decide to escalate talks, you can then share identifying information (phone/email).

Professional Contact Designation. You can designate other members as ActSeed Professional Contacts, which enables them to review your company’s private profile information. This is similar to the social media action commonly called “friending”. It’s not designed to help you accumulate thousands of connections, but enable you to selectively share private profile data to help move a possible deal toward successful closure. Professional Contacts are meant to be constantly activated and terminated, not accumulated.

Membership Details

If you are building a business or have a business idea, the ActSeed Entrepreneur Group gives you unlimited access to all of our planning tools and resources – including the ability to search for Investors and people in other Groups – for only $39 per month and no long term commitment. Payment information is completely handled within PayPal’s secure transaction system.

One Year = One Hour.  A year’s worth Entrepreneur Group access is benchmarked to roughly one hour from an attorney and costs less than a registration fee for a typical entrepreneur seminar. We do not intend to displace startup consultants or attorneys, but ActSeed’s resources may help you avoid thousands of dollars of startup planning costs that can otherwise be applied to areas your ActSeed profile identifies as needing attention.

If $39 is unaffordable, email us at GroupAdmin.Entrepreneur@ActSeed.com; we have “charter member” programs that allow some entrepreneurs to have fees waived.

Conclusion

The essence of entrepreneurship is identifying and filling a need that has sufficient demand to establish a sustainable business. Beyond this concept is an enormously complex and challenging path that derails many great ideas for lack of proper planning and execution. ActSeed wasn’t designed to be a networking alternative to LinkedIn or similar sites. We are big supporters of other professional networking sites, but we provide a different value proposition to the Entrepreneur: organizing critical resources and processes that a seed/early stage company needs to survive and thrive, which means helping you connect with the few people who really matter at the moment, not connecting you to thousands to may matter one day in the future.

If the value we can provide to you and your burgeoning company is still not evident, please send us an email to GroupAdmin.Entrepreneur@ActSeed.com and let us know how we can earn your business.

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• Find well-prepared seed stage investment opportunities.
• 15 minutes to set up your ActSeed membership.
• No fees.
• Spam controlled.
• Register here.
• No reason not to. You are a valuable part of new business creation and this community needs you.

People, plan, execution and intensity. Good ideas and large addressable markets alone don’t get funded. Those of us with capital don’t invest or lend or grant until we know if the idea has the right combination of talent and preparation. ActSeed helps you quickly sift through deal flow in an efficient, methodical manner and even track entire industry segments of emerging business activity.

What types of “capital providers” should join ActSeed?

• Angels, angel groups, accredited investors
• Non-accredited investors, too
• Seed stage VC firms
• Later stage VCs tracking early stage deal activity
• Small business / commercial lending banks
• Venture leasing firms
• Corporate investment / M&A departments looking for early stage strategic investments or acquisitions

What kind of seed-stage company does ActSeed recruit?

• All industries (not just high-tech/biotech)
• Focusing on US companies, but we’re beneficial and available to startups worldwide
• Growth stages segmented as follows:

1. Conception (“I have an idea.”)
2. Development (“We’re getting ready for market.”)
3. Birth (“We’re entering the market.”)
4. Infancy (“We’re focused on achieving profitability.”)
5. Growth (“We’re profitable and focused on market share.”)

Do I have to be actively seeking investment opportunities?

No. Even if you are currently “on the sidelines”, being part of ActSeed now gives you a chance to monitor entrepreneurial activity and trending. With one quick edit to profile Question #9 (“looking to invest within…”), you can change your investment appetite from “Beyond 90 days” to “Immediately”.

Do I have to pay anything?

No. Beyond connecting needs and resources, we stay completely out of deals. No cash or equity or other form of success fee.  Investor Group membership is free.  Entrepreneurs pay a small monthly fee for access to the tools and resources we have developed to help them prepare their company for investment, market entry and sustainable corporate discipline – enough we believe to build and maintain this community without need for subsidy.

As an investor, I see lots of inbound, unsolicited deal flow that doesn’t intersect with my investment priorities or needs some preparatory work before they are ready to pursue funding. Can I refer these entrepreneurs to you?

Absolutely. Going through ActSeed’s “Preparatory Framework” will help them identify gaps and articulate value. You can keep an eye on them and their ActSeed scores; maybe they become a viable investment in the future. As you know, entrepreneurs appreciate when a “pass” or “no” is followed by a constructive referral, and ActSeed’s mission is to prep more deals to be “funding-worthy”.

How does ActSeed prevent me from getting spammed with unsolicited communication from those who might attempt to misuse the system?

ActSeed is designed to keep your investor identity completely anonymous. Your Investor profile only outlines your investor preferences (industry, typical funding amount, company stage, etc.) and what kind of investor you are (angel, accredited, VC, etc.) unless you decide to share specifics.

Entrepreneurs search for you based upon general profile criteria and can send you messages only within ActSeed (you can choose to have a copy pushed to your email if you want). If you like the profile of a given company, you can ask the entrepreneur to share more info. You are in complete control of whether you share your actual information (name, email, phone, etc).  ActSeed doesn’t allow users to randomly browse other users, thereby mitigating screen-scraping your info and sending you an unsolicited message.  There is no mass-messaging.  Search results are limited (results per screen and total returned) to prevent generic searching and encourage users to adhere to the intent of ActSeed: for members to find “the few who matter”, not “the masses who may matter one day.”

To terminate contact with any user, simply use the “Block User” link next to the user’s profile image and they won’t be able to see your profile or send you further messages. If you believe a user is overly abusive of ActSeed’s community, please report the user to us using our “Report Abuse” link that’s available at the bottom of every screen.

Our goal is to offer to Investors discretion without compromising accessibility, and hopefully our FAQ answer here gives you comfort that we will meet this goal.

Specifically how does ActSeed help me find deals?

A search screen with advanced search features as further described below.

What search parameters are included in your search tool?

• Location (mileage radius from your location zip, by state, nationally and internationally)
• Business stages
• Specialty designations (green, minority owned, woman owned, veteran owned, etc.)
• Industry sectors (25 choices)
• Amount of funding sought
• ActSeed Entrepreneur Scores
• Other parameters like “business plan complete”, “financial plan complete”, etc.)

Can I save my search parameters so I don’t have to create the search every time?

Yes. You can create up to five saved searches.

Can I get results pushed to my email inbox?

Yes. Daily or weekly.

Is ActSeed easy to use? How much time to set up?

1. Register and add basic info: <3 minutes.
2. Join the Investor Group: 20 seconds
3. Set up your investor profile: <4 minutes.
4. Set up your search preferences; name and save them: <10 minutes.
5. Review the profile of an interesting company and send an inquiry: 30 seconds

 If you like visuals, the screen shot below shows the four key areas to use as an Investor:

1. Home: Click here from any screen to return to your “Main Dashboard”
2. Join: Click here to join the Investor group
3. Edit Profile: Click here to find the brown Investor Profile tab where you can set up your profile
4. Search: Click here to access all of the search functionality

What if I need help getting my account set up or have questions?

Email us: GroupAdmin.Investor@ActSeed.com. If you want us to call you back, include your phone number. We’re glad to help optimize your ActSeed experience. Your capital is vital to new business creation and future generations of successful companies. Hopefully ActSeed can help cultivate the most promising ideas and bring them to your attention as a well-prepared funding opportunity.

Ready?

REGISTER HERE

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Tom thought it might be too remedial for me, but that it might be good for the members of ActSeed’s community who may be new to the application of social media in business. Tom was right to think I’d enjoy this book, but not as correct when thinking it was too remedial.

Trust Agents is an important read for both novice and seasoned business people.

This book articulates the key constructs of how we must interact with our customers and our peers in a very new way, thanks to how social media has started to bring us into a “community” instead of a “network”.

We’ve posted this book in ActSeed’s marketplace, which is powered by Amazon.com, so you can purchase the book in either hard copy or e-book/Kindle format.  Buy this book and read it in your spare time. It’s an easy read and a valuable one. I’ll get you started with one of the conclusions: “Be helpful.”

…and that’s what I hope to do here by recommending Trust Agents.

In my previous article I provided an approach for creating integrated functional strategies and goals.  This article describes how to use these functional strategies and goals as the input to define operational metrics and create a financial plan.

Spreadsheet software makes it easy for anyone to spin up a financial model and “show” interesting results.  However, your credibility will be challenged unless you can communicate and defend your financial presentation and the  reasonableness of your model’s underlying assumptions.  I recommend that you follow the general approach outlined in the following graphic.

Assign one person with central coordinating responsibility.  It may seem obvious to have your senior finance person take the lead.  However, don’t hesitate getting someone from the outside involved if they have relevant experience, a general understanding of your business model, good spreadsheet modeling skills, and the ability to engage with your functional managers.  Make sure you start off with the proper expectations.  You may not need a full set of financial statements, or that need may be some time in the future.  Think a step at a time and focus first on operational metrics and a cash view of profit and loss.

Key Inputs:  Your coordinator should start with clear expectations for timeline and an understanding of the functional plans. 

Step One:  The coordinator should determine the time increments to be used for planning, for example monthly for 3 years or quarterly for two years, depending on the desired use for the final deliverables.  Then the coordinator should work from functional plans to construct a basic metrics interpretation of the cost drivers and assumptions for each cost driver by major category.  Major categories might include headcount by role, outside service or development costs, contract labor, equipment costs, raw material, purchase of partial or final assembled components, channel partner costs, IT infrastructure and services, commissions, training, etc.   At this point, the coordinator should focus on the operational activities that will drive costs included in Gross Margin.  In situations where functional plans describe alternatives, such as “build it ourselves” or “outsource”, these options should be included in the metrics model.  Organize your model horizontally to display Units (for example headcount by role), Unit Costs (for example the monthly base salary for each Unit), and if the cost is fixed (a one to one basis to Unit increases), variable (relative to a relationship to another Unit such as production), or step variable (relative to Unit breakpoints such as sales thresholds).  A simply conceived spreadsheet will allow you to efficiently engage each functional lead in the interpretation of their functional plan.   

Step Two:  The coordinator should meet with each functional manager responsible for the completed functional plans.  Given top management’s plan for sales and production, the coordinator should engage the functional manager in the build-out of the metrics model for their functional plan.  The discussion should focus on refining the list of cost drivers, estimating the units relative to the sales and production targets over the planning timeline, and expectations for direct costs (but not yet fringe benefit or other corporate overhead) for each cost driver.  The coordinator should challenge the functional manager so that the units and costs are reasonable given the sales and production targets.  Also the challenge whether the model is complete and captures all inputs and costs.  The functional manager needs to understand that this rough metrics model will become a basic budget for their operations and adjustments, and that this is not just an academic exercise.  Finally, the model should include referenced footnotes that describe basic assumptions that drive the metrics model.      

Step Three:  After completing the function-level metric model, the coordinator should create a consolidating spreadsheet tab that portrays a company-level view of the sales and production targets, units, and units costs on a cash basis for the specified time increments.  This spreadsheet tab should also include a quarterly or annual summation of units and costs.  As a second effort, the coordinator should create an additional corporate tab for costs such as management, space, utilities, employee acquisition or fringe benefit costs, insurance, and other overhead.  Some of these overhead items (for example employee fringe benefits) can then be allocated back to the functional models (for example as a percentage of direct labor).  If distinct functional options exist (for example “build it ourselves” or “outsource”) two or more consolidated tabs should be created and marked accordingly.  The summary model(s) and updated functional models will be easier for the coordinator to model the impact of changes in assumptions.

Step Four:  The next step is a review of the rough cut model with management.  This discussion should begin with a review of the functional metrics models, assumptions, and the summary model(s).  The key questions for management should be “Are we capturing all cost drivers?”, “Are our assumptions reasonable?”, and “Does this model accurately represent our business and expectations for operations and expenditures?”  Responses might lead to some refinements in how the model captures and consolidates metrics and costs.

Step Five:  After the model is determined to be workable, the next step is to seek management challenge for key assumptions and impacts on targets and costs.  This is essentially the real “what if” phase of refining the model.  A few examples of challenges here might include “What if we slow down our timeline for market introduction?”, “What if we use more contract labor?”, and “How can we reduce our pre-breakeven cash burn to the funding level we have or anticipate?”.  Each of these macro questions will have impacts on assumptions for each functional model.  This step enables management to refine or model alternatives and challenge the functional managers.

Step Six:  Next is a second round of discussions with functional managers to answer questions and focus on how the functional plans can be reasonably refined to meet the modeling objectives of management.  In other words, “Given management’s refined plans and constraints, what is the level of activity and costs that will allow you to achieve these targets?”.  Functional managers need to understand that this step in the process will require them to make commitments for reaching targets and operating within constraints.  In some situations this may result in push-back to management, indicating with supporting justification, that “This is the most efficient plan and use of all resources to achieve company-wide targets”.

Step Seven:  Input from functional managers should be incorporated into the functional and consolidated models.  Care should be taken to maintain version control over all models.  In my fifth and final article I will present some ideas for managing documents, collaboration, editing, and approvals.

Step Eight:  The new iteration of the model should be reviewed with management to demonstrate the impacts of changes and the commitment and input from functional managers.  This may be done in a meeting where functional managers present their refinements and assumptions.  There may be additional iterations, but the end product should be a dynamic model that can be used in budgeting, operational projection, and financial presentation.  Management needs to declare that one version of the model is “official” and that the underlying assumptions will be the standard for budgeting and projection.  And as plans change, this model will be the basis for modeling current and future state for these changes.

Develop Deliverables – Operational and Metrics:  The coordinator can now interpret the final model into performance targets, budgets, and metrics for each function and also for the company.  This deliverable can remain in spreadsheet format or be incorporated into a formal budget and financial management system.  Then each functional manager can be accountable for monthly and annual performance to plan.  And as circumstances change, these changes can readily reflected in the functional and company level models.       

Develop Deliverables – Financial Model:  The coordinator should work with the senior finance officer or outside resources to make the model adjustments required for the desired set of financial projection deliverables.  These adjustments might address cash to accrual basis for accounting, capitalization, depreciation, valuation of intellectual property, estimates of tax liability, or a myriad of other topics that do not directly impact the scope of influence for functional managers.  In many situations, an accurate projection of cash sources and cash uses may be adequate.  In the other extreme, a full set of independently reviewed financial projections (profit and loss, statement of changes in cash, sources and uses, and balance sheet) might be required.  Once again, it is critical that you begin this exercise with a clear definition of the final financial deliverables required.

This structured approach will deliver many benefits to your company.  Even if you do not need a full set of projected financial statements you will have developed a clear and shared company-wide view, commitment among management and functional managers, and mechanism for review and refinement.  Stakeholders outside of your company will appreciate and value this analytic interpretation of your company’s plans.

In my previous article I highlighted the importance of a structured planning process.  This article includes tips on the mechanics for creating strategy and setting goals by business function.  This exercise will create the level of detail and consensus required for effective operational and financial modeling.

Function planning has traditionally taken the form of bottoms-up activity-based modeling.  The premise was that a set of operational and financial goal were provided to a functional manager, the manager identified general resource requirements (people, equipment, infrastructure, capital, and technology) to meet the unit output and cost goals.  By setting the fixed and variable costs of each requirement, the manager could produce an operational model.  This model could then be tweaked to reflect revisions in goals and cost assumptions. 

 The traditional approach is still relevant, but the new options for technology and delivery chain procurement and management require a more dynamic and creative approach.  Recent history is full of examples where someone in an industry changed the paradigm by modifying their production, sales, or delivery chain.  Often turning on a dime.  Are the shorter business cycles and plethora of options a reason not to plan?  Quite on the contrary, it is a reason to plan creatively.

 Too often people get confused when thinking about the relationship between goals, objectives, and strategies.  I’d like to keep it simple by using an analogy.             

Get your leadership team into the mindset of developing a battle plan.  You’ve already begun by setting some primary direction for your company and products.  Your next step is to operationalize this direction by major company function.  This will allow you to make actionable plans that have associated activities, costs, and timelines.  The example provided in the graphic “Functional Goal Setting” first addresses the difference between goals, objectives, and strategies.  GOALS asks the question “where are we headed?”.  OBJECTIVES asks the question “how can we put some numbers to this?”.  STRATEGY asks the question “what do we need to do?”.   After addressing goals, objectives, and strategy, your team’s next challenge should be to consider alternate approaches to execute, monitor, and adjust.  LEVERAGE asks the question “how can we take advantage of internal strengths and external options to be better, faster, or cheaper?”.  RISK asks the question “what can we do to improve the likelihood of reaching our goals?”.   For each major functional goal you will likely have subsets of objectives, strategies, leverage options, and associated risks.  For example, you may choose to outsource a set of functions but you may at the same time be giving up some control over execution.  Ultimately the greatest benefit will come with your leadership group’s spirited debate on how they will work together to execute and fine tune, within their spheres of control, to achieve your corporate level imperatives.

 Using the battle plan analogy, think of the Army, Navy, Coast Guard, Marines, and Homeland Security executing a coordinated and responsive field campaign.  Each has resources and executable orders.  They may also be working with NATO forces (your channel and supply-execution chain partners).  Don’t hesitate getting your team leads into discussions with these third parties (assuming you have a reasonable level of trust and non-disclosure in place).  They may provide you with options or examples that your own group may not have considered.  Also, their ability to coordinate and work with you will be enhanced if they understand your execution model.  Each party need to go into battle expecting that their best, most detailed plans will be refined and adjusted.  But their shared understanding of the end game and functional game plans can only make these changes more efficient.  How many business school case studies have been based on a company with a great product idea and no ability to execute?  Was it because they weren’t smart enough or didn’t understand their market?  Sometimes, but not often.  Typically the problems compound from day one due to the lack of a coordinated execution plan.  What do investors look for now more than ever?  Ideas and talent, as well as a thought-through, creative, and achievable execution plan.  Now I’ll get off my soap box.           

 Finally, don’t provide some vague instructions to your team and expect them to come back with high quality functional plans.  Spend some time and provide them with a format of the topics you’d like them to address, a common deliverables format, and some examples for discussion.  It may also be helpful to provide some basic and general assumptions – such as the rate to be used for labor overhead or the costs for contracted personnel or services.  Don’t prematurely ask your team to develop a detailed financial model.  Have them focus on outcomes, activities, cost drivers, and alternatives. 

 In the graphic I’ve provided a few simple examples.  Make sure your functional leads have a clear understanding of the deliverable.  Assure them that you want them to be creative, but at the same time not waste time on esoteric analysis.  Your team will likely find this exercise to be a bit tedious at first, but will find it much easier and efficient if they work through an example and finally “get in the groove” to start populating the deliverable.  This exercise is also a great way to gauge the facilitation and analytic skills of your team members.  Functional planning and coordination can be an important component of your performance management process.

 In my next article I’ll provide some perspective on translating your planning deliverables into refined financial and metrics models.

 In my previous article I highlighted the importance of understanding the needs and interests of your audience targets.  The next step is putting a process in place to develop and iterate your plan, including assessment of your business and operating environment.

Efficiency and integration of ideas should be your major goals in developing a business plan.  Each of your key team members, including yourself, have other responsibilities, so a clear set of deliverables, activities, and timeline will minimize distractions and delays.  There are three primary areas of focus as you organize the process and assess your environment: 

1. The first is definition of the product/service concept, target market, and related technical development. 
2. The second is the specification of an execution and delivery model. 
3. The third is the iteration and integration of functional execution plans for translation into a financial model.

Make an honest assessment of your staff and those directly involved in your enterprise.  Very few early stage companies can claim (or afford) to have strong representation across all aspects of their venture.  Yet, strong functional representation and relevant experience (particularly venture and emerging company experience) is critical in developing a solid, integrated plan.  For this reason, you should begin early to create and manage an informal, yet involved “Advisory Board”.  You can think of it as a “Delphi” group providing input and perhaps even completing deliverables for your plan.  Members can also provide “eyes and ears” on potential competitors and partners, and also facilitate introductions to partners, vendors, and investors.  Members may later serve in a more formal capacity on a Board of Directors.  A workable number of advisors is typically three to seven people, ideally representing expertise in the spectrum of your market, product,/service, funding sources, and execution model.  Advisors are often given a nominal stock position or options, depending on the level of their involvement.  The purpose of this group is to provide coverage where you need it, alternatives, and also honest, objective feedback on the viability of product/service and execution model.

The following two graphics together describe an iterative process for business planning.

The purpose of the Initial Definitional and Planning stage is to develop a rough-cut, but integrated outline of your key business dimensions.  In this example, I’ve grouped them into Product/Service/Market, Execution, and Administration.  No effective plan can be static, so I recommend three planning horizons, including Development, Introduction, and Expansion.  You can call them anything you want, as long as you express them as assumed timelines for developing your product/service, initially introducing it to the market, and then expanding your operations.  The key questions posed for each dimension are fundamental. 

In the Development horizon key questions include:  What is the product/service concept, requirements to develop, and target markets?  What market will we bring this to, and how will we sell it?  What basic business and compliance functions do we need, and what are the implications for staffing or professional services?

In the Introduction horizon key questions include:  Are there opportunities to phase the development and introduction of the product/service, both\for financial and time to market reasons?  How we organize and operate distribution and provide the required forms of support, including technical and customer service?  How will we obtain the human resources and infrastructure required to support product/service introduction?

Finally, in the Expansion horizon, key questions include:  Which enhancements or extensions of the product/service will allow us to capitalize on the market and financial opportunity?  How will we expand our market and channel operations to efficiently meet sales and operational goals?  What insight and infrastructure do we need to efficiently manage our enterprise?

You may not have direct team coverage for each of the Planning Leads identified in the graphic.  This is where your Advisory Board can be valuable.  Get their involvement to cover the identified disciplines where you lack coverage or strength.  Your Initial Definition and Planning Iteration should generate an outline view of your business model and plan, identify major issues and risks, key assumptions, and general enterprise requirements as you move through the planning horizons.  The rough-cut initial iteration should provide enough detail to support a subsequent, function-based planning iteration.

The purpose of the Subsequent, Integrated Planning Iterations is to develop more detail in functional sub-plans and integrate these sub-plans with regard to the operational intelligence you’ll need to operate efficiently and effectively.  The graphic shows a typical set of linear operational functions – yours may be somewhat different.  Think of this as breaking your Initial and Definition and Planning function and team into sub-groups focused on relatively discreet functional components.  Using the rough-cut plan as a starting point, these sub-teams should be tasked with developing the next level of plan details.  Avoid having your sub-teams write any lengthy narrative about this next level.  Instead, their efforts will be more efficient and consistent if you provide them with an outline of objectives, topics, and a simplified, consistent reporting format.  Planning Leads should obviously represent your grouping of operational functions.

Sub-teams can begin a new planning cycle by developing the next level of detail for their function.  After assigned tasks are completed, the next step is to integrate the sub-team deliverables across functions.  In the graphic I show this as a non-linear Operational Intelligence process, focused on level-setting the plans and identifying the information needed to operate as an integrated enterprise.  A good approach to integration is a structured, facilitated session represented by each of the Planning Leads.  The session should be lead by a good facilitator who can provide structure on the objectives, structure, and deliverables for the facilitated session.  Without this structure your session may go off on tangents or levels of detail that will keep you from achieving closure of the planning cycle.  There are many ways to organize the session; however, one of the best is to have each Planning Lead present their sub-group deliverables while the other Planning Leads make notes on assumptions, issues, and dependencies.  Then, in a second round of discussion each of the Planning Leads can field questions from each of the other Planning Leads to refine and level-set assumptions and dependencies of each sub-team deliverable.  In a third round, the discussion should address the information and systems needed to operate the integrated enterprise.  A successful integration session should generate the target level of planning detail.  If not, a second cycle may be scheduled to drive to the next level.  It is the responsibility of the top management team to specify the planning horizon, level of target detail, and timeline for each planning cycle. 

The structured, disciplined approach I’ve described may sound a bit onerous, but it can be scaled to any situation.  The benefits you’ll derive from structure and discipline include better and more actionable results, a faster timeline, and a shared level of understanding and buy-in.           

More details on functional-level strategy, goals, and the role of the financial model will be included in my next article.

 In 1993 I co-wrote a book (with Grant Thornton colleagues) titled “How To Prepare A Results-Driven Business Plan”.  At Grant Thornton we observed that most clients seeking bank or investment funding took either a cookie cutter or overly academic approach to preparing their business plans and supporting documents.  These business plans typically took a great deal of time to prepare, yet seldom “closed the deal” when presented for financing.  In many cases, the “worst” business plans were prepared by a third party.  The objective behind our book was to provide models and a leading practice approach that closely integrated business concepts and strategy to defendable finance and operating details – hence the “results-driven” premise.

So, with more than 15 years of water over the dam have the fundamentals of ‘results-driven” business planning changed?  What can you do to fine-tune your business plan in order to obtain funding and support in today’s world?

I’d like to work from the basic premise of the Grant Thornton book and provide some new perspective based on my experiences as a consultant and entrepreneur.  My focus will primarily be  on business plan components used for funding or external support.  I also assume that you have developed a basic business concept and strategy.  For a broader primer on business planning I’d suggest that you take a look at some of the primer resources in the ActSeed Marketplace.

The topics I’ll cover include:

1. Understanding Your Audience
2. Organizing the Process and Assessing Your Environment
3. Strategy and Goal Setting by Function
4. The Financial Plan
5. Assembling and Refining the Components

The first topic is addressed in this article.  The others will be addressed in weekly articles at ActSeed.com.  

 1. Understanding Your Audience

 The business planning process should begin with the identification of your audience and the evaluation of their interests.  By translating their interests into a set of business plan “deliverables” you can efficiently organize the efforts your team efforts in translating your strategy into goal setting and planning.  First you need to identify your audience segments and determine your objectives for meeting and presenting your business concept.  Second, you need to define the information and level of detail they need.  Then you need to use that information to develop a work plan and timeline to develop specific deliverable “components” according to your priorities.  Through interaction with your team (as I will describe in a later article) you can bring together and integrate the components.  Having interim, or in some cases draft, materials is valuable for early stage meetings and web content.      

Most of us would like to think that our great business idea could be grasped by anyone with modest intelligence.  After all, we’ve developed it to the point that we are convinced it is airtight.  What many underestimate is the fact that securing money, talent, organization, and outside support requires an overt and sustained communication to key constituent groups.  The interests of these groups can vary widely, so it is apparent that no one document or level of detail is appropriate to meet all needs:

The primary interests of the internal audience – management, employees, advisors 

• Integrated and actionable operational details
• Financial planning and forecasting
• Performance management

Primary interests of external audience – investors, vendors, and acquirers  

• Viability of product or service in the market
• Achievability of goals
• Organizational capacity and discipline to execute
• Mitigation of risk

While the needs of these two groups might appear reasonably distinct, the growing integration of discontinuous supply and distribution channels has created a hybrid party – the business or channel partner that acts as an operational extension of your company as well as an investor.  This hybrid might help you quickly access new markets or distribution channels, reduce operational costs, and fund the costs of expansion or systems development.

Primary interests of channel hybrid audience – supplier/distributor/funding source

• Operational synergy and cost avoidance
• Elimination of channel redundancy
• Deeper, more real-time market “insight” and increased sell-through

Add to this the opportunities to out-source, off-source pieces of operations, or have third parties host or integrate information systems and data.  Clearly, today’s operational environment can be much more enabling, but also much more complex and integrated.  But, a non-linear business model and supporting plan can be powerful if explained properly.

I suggest preparing a simple matrix with the horizontal axis representing the stakeholders or “audiences” for your business plan, and the vertical access representing the functional topics to be addressed.  After preparing this straw model, get your team and/or advisors involved in a discussion regarding the level of detail required for each stakeholder.  Individual team members will be responsible to prepare drafts for their functional area of responsibility, so a clear definition on the level of detail, timelines to complete, and the process to integrate components is an important step.  Also you’ll want to achieve agreement on the format and method for collecting and keeping version control over draft documents.  The use of software collaboration tools (to be addressed in the next article) can be incredibly valuable, particularly if team members do not reside in one physical location.  After agreement on formats and responsibilities, the next stage of your discussion should address the level of detail required for each stakeholder.

 The following graphic depicts a simplified and iterative approach to developing and refining a set of business plan components.  Stakeholders and key business functions are identified.  A sequence for completion is defined, and the level of detail appropriate to the stakeholder is specified.  The logical sequence for completing and integrating each component into the overall deliverable for each stakeholder should be clear.

Audience Focused Planning

Perhaps the most important thing to consider is that each of the functional components will go through many changes and levels of detail as they are prepared.  There is no such thing as a static business plan, but if you are able to work from solid draft deliverables it will be much easier to make and integrate comprehensive changes.  When changes, such as the opportunity to work with a new channel partner, unfold it is best to re-assemble your team and have a discussion on the implications of the change to each of the business plan components.

 It is easy enough a few copies of business proposal formats used by investors.  However, your business plan will be much stronger and focused if you borrow some of the concepts of Customer Experience Management – beginning with the needs of your customer or stakeholder, then working backwards to efficiently produce the component deliverables that will address their interests and needs.  This will help you avoid time spend on non-relevant topics and allow you to prepare “just in time” content.  It will also enable you to tell a compelling story about your planning process.

More ideas on the planning process and assessment of your environment will be included in my next article.

First, welcome to ActSeed!  By reading this, you’re already participating in an innovative “community of common interest” that is dedicated to helping prepare great business ideas and connect the founders of those ideas with other people who will be necessary to turn the great idea into a successful business through preparation, execution and intensity.  This part of ActSeed will always be open to everyone to read and contribute.  This is ActSeed’s “SIZZLE”. 

We hear all kinds of idioms related to steak and sizzle, such as “Sell the sizzle, not the steak.” and “You can’t sell the steak without the sizzle”.  From my understanding, we can thank the late sales guru and pioneer of persuasion from the mid 20th Century, Elmer Wheeler, for the original phrase.  Simply put, the sizzle is the communication of the value proposition (sales & marketing) and the steak is the desired business value.

ActSeed’s sizzle isn’t a means to an end with a sole intent of getting you to join the coming business community.  Our sizzle should stand independently as a valuable resource.  We want every word and every recommendation on our home page to have value and meaning to you.

The Steak is coming.

To keep true to the sizzle-steak metaphor, if you like the aroma coming from our kitchen, just wait until dinner is served!  [For our vegetarian readers, we did our homework, and there is such a thing as a tofu steak.  Recipes here: http://bit.ly/3eUuBy See? We were thinking of you too when using a steak metaphor!].

Behind our online magazine content, a new “marketplace for the idea economy” is about to be launched.  You can join the Community for free.  Within the Community, we have five primary groups that have specific needs to address and resources to offer:

• Entrepreneurs – business owners who are building and growing a business
• Investors – people and institutions looking to put their cash to work by funding small, growing businesses
• Work seekers – people who are available to work and want to work with or for a small business.  This includes people who want to spend a few hours a week advising a company that needs their core expertise and wisdom.  This includes people looking for full time jobs and those looking to pick up additional hours (part time).  This includes freelancers and contractors.  This includes, essentially, all of us.
• Education and Outreach Programs – public and private organizations that are focused on facilitating and mentoring small businesses.  Groups that carry a mission of new business creation and job creation.  Universities, community colleges, SBA, chambers of commerce, economic development organizations, private incubators and even news organizations - they’re all included here.
• Service Providers – for-profit firms that provide needed services to small business, such as accounting, legal, management consulting, marketing, etc.

Some of the groups within the community are free and some have a membership.  All have a very specific value to you depending upon your current professional situation and near term business goals.  You’ll quickly figure out how to navigate through this community.  It’s based upon contemporary social media / social network functionality.  If you understand Facebook and LinkedIn, then you’ll easily follow.  If you only understand web browsing and email, you’ll still figure out how to use our community with ease.  Oh, and you can join more than one or ALL groups at once.  Most of us hold more than one of these roles already, such as an entrepreneur starting a new business while looking for another 20 hours of work to supplement his/her income, or an investor looking for a company needing working capital and simultaneously looking for advisory roles.

Unlike most of the popular social media sites, ActSeed isn’t another venue to amass as many contacts as you can.  We’re not another potential steady stream of information that you have to worry about digesting.   Instead, ActSeed has a premise that you need to interact with the people who matter to you NOW as quickly and efficiently as possible, and those people may not be in your “six degrees of separation” network, but if you have defined your needs well, and everyone else in the community defines their skills and availability well, then you’ll be doing business much faster.  And if you’re reading this, you likely already know from experience how a small business person has little margin for error in getting to the right people and remaining as prepared as possible.  You also know that your needs are constantly changing, so it’s easy to appreciate that someone you might want to engage today is engaged by someone else tomorrow – thus they may be a good fit for your needs, but no longer available. 

Whether you’re talking about an investor who has a pocket full of cash today and finds an entrepreneur tomorrow or an advisor with expertise and wisdom who’s available today but starts helping someone besides you tomorrow, a big part of small business building is timing.  You want to be that person who finds the investor, service provider, mentor or worker when they matter to you and when they are available to you.  Most social networks are designed for you to spend an unlimited amount of time achieving a never ending goal of expanding your network.  ActSeed is designed for you to spend as little time as possible to engage only those who matter to you at any given moment.

We break ActSeed’s Community Application (our “Steak”) into two value propositions:

Value Proposition #1 = “Framework”: Structured Business Planning & Preparation

ActSeed has a self-profiling process that helps you focus on your preparatory progress in seven key areas.  We don’t try to evaluate the efficacy of your idea or business plan or your professional skills or capital resources.  We’ll make sure to include individuals, companies and outreach / mentoring programs that do that very well.  We will help you score your “completeness of preparation” with an introspective look at what issues you’re confronting and which you have yet to confront.  We’ll even give you a scoring report so you can track progress as your business evolves.  We’ll also use this scoring methodology to help you “reach those who matter” in our community, which we’ll describe in our second value proposition for you, but first we recap our first value proposition: 

• Immediate value delivered to each member, even before interacting with other members, through a comprehensive media library for entrepreneurs and a thorough profile process for everyone
• Methodical format for disciplined business planning, preparation and presentation
• Easy-to-use self-profiling tool; inputs converge on a valuable introspection: “Are you prepared?”
• Unique scoring of the entrepreneur’s completeness of preparation

Value Proposition #2 = “Dynamic Community”: Social Media Applied to Structured Business Interaction, Not Unstructured Networking

Preparation needs an outlet, right?  All dressed up and no place to go doesn’t cut it.  And if you’ve invested some preparatory time before stepping out, you expect others to do the same.  ActSeed’s business “community of common interest” is designed to bring us all together to efficiently do business.  ActSeed is designed to help you find others who matter to you at the moment when you need them and when they are available.  ActSeed protects your privacy until you choose to reveal more information.  A summary of the value we deliver within our second value proposition includes:

• Provide entrepreneur-centric environment for interaction among key resources
• Private messaging & workspace for collaboration & negotiation
• Advanced search / matching capabilities that include profile scoring on each role
• Build valuable knowledge base of user activity & community behavior