Tag Archives: Business Plan

This Is the Biggest Mistake Entrepreneurs Make, According to Mark Cuban

According to a billionaire, the ‘number one sin’ an entrepreneur can make when starting their own business begins with money.

Dallas Mavericks owner and an essential investor on hit show Shark Tank, Mark Cuban, provided some good career advice on a podcast interview with Ryan Seacrest.

He told Ryan Seacrest that the biggest mistake an entrepreneur can make is thinking they need to raise money.

“I think the biggest mistake people make is once they have an idea and the goal of starting a business, they think they have to raise money.” – Mark Cuban pointed out.

“Once you raise money, that’s not an accomplishment, that’s an obligation. Now, you’re reporting to whoever you raised money from.” – He continued.

Mr Cuban indicated that by getting outside help, it adds further pressure to business owners since they have added another voice in the room – which complicates the dynamics of decision making.

He went on advising entrepreneurs to grow a business the old-fashioned way – which is to hustle and grind all the way from bottom.

“If you can go out there and start it on your own — like I started out by selling garbage bags — whatever it is … try to find something that you can make or that you can buy yourself and sell to people around you, then ask for referrals and grow the business that way, and you can turn it into something enormous,” Cuban insisted.

My Final Two Cent

While I agree the points made by Mr Cuban, I do like to argue that there are businesses that become a success after raising funds.

Yes, sometimes having another voice in the decision making process can slow things down, but if that ‘other’ voice brings in a lot of value to the table (e.g. expertise, network, experience etc), then, that changes everything.

I don’t think Mr Cuban is completely right in this case. But I don’t feel I’m completely wrong either.

One thing I’ve learned from my time running businesses, is that you’re often wrong on day one. It is your job to figure things out and become less wrong through trial and error – as Mr Elon Musk puts it. It’s just the way business works.

Top Seven Deadly Reasons of Business Failures and How to Avoid?

A survey by CB Insights has compiled ranges of study on businesses that failed. The report found 20 top reasons, naming absence of market, lack of capital and a startup team which did not fit for the job in the top three.

Whilst the report listed 20 reasons, I decided to only focus on 7 most deadly reasons you need to pay more attention to and how to overcome it:

Continue reading Top Seven Deadly Reasons of Business Failures and How to Avoid?

Top Seven Deadly Reasons of Business Failures and How to Avoid?

A survey by CB Insights has compiled ranges of study on businesses that failed. The report found 20 top reasons, naming absence of market, lack of capital and a startup team which did not fit for the job in the top three.

Whilst the report listed 20 reasons, I decided to only focus on 7 most deadly reasons you need to pay more attention to and how to overcome it:

Continue reading Top Seven Deadly Reasons of Business Failures and How to Avoid?

How Starbucks Did It? (5 Must-Learn Best Business Lessons)

“We’re taking time to perfect our espresso. Great espresso requires practice. That’s why we are dedicating ourselves to honing our craft.”

February 2008, Starbucks made it on top news headline that it has shut down its US operations. Speculations and rumors started brewing in the media fearing for the worse.

For Howard, apart from the headache he suffered from the company’s recent losses, he knew the operation shutdown happened for right reasons. The losses and problems made him to take drastic measures for the company he built. In short, he ordered the shutdown because he cared.

Here’s the four must-learn best lessons from Starbucks’ shutdown in 2008:

Continue reading How Starbucks Did It? (5 Must-Learn Best Business Lessons)

8 Things Poor People Do That The Rich Don’t

To become rich, first, you need to stop doing things that make you poor.
In today’s article, I’d like to share with you the 10 things poor people do that the rich don’t. Let’s do this.

1. Poor People Focus On Saving

In truth, if you’re broke you need to make more, not save more. One of the things poor people do is stress over money.
On the other hand, rich people see it as a tool, a resource that can be used to get to where they need to be – which is to make more money.
Saved money does not grow, you need to put your money to work, don’t squirrel it away for when you’re too old to live your best life. Put into investment that gives good returns if you find the idea of running business is too challenging.

2. Poor People Get Paid Based On Time

It’s important to grasp that results are the real currency of the world, not effort. For some this is a shocking revelation.
It does not matter if you are the best at your specific job. If you are not contributing to the bigger picture you will be seen as just another number.
Don’t be afraid of making big moves, shock everyone and change the world.

3. Poor People Blame Others 

Don’t fall into the blame trap. Blaming external circumstances take away your power!
No matter the challenge, it is your responsibility to change it.
Rich people gain self confidence from knowing that their lives are in their own hands if they want better lives, they do better. Stop blaming, start acting.

4. Poor People Think They Have All The Answers

If you ask a poor person why they are poor they will give an answer or rather their belief, why they are poor giving mostly excuses. I may sound harsh, but if you listen, they never really talk about what they should have done, instead, they give reasons which they believe are valid.
One of the things poor people do is talking about other people rather than ideas. They’ll say they are not lucky or even go further to say rich people become who they are by lying and cheat. Poor people tend to be highly-opinionated about anything that is outside their realm of influence.
Rich people are continuously learning, continuously growing and stepping out over their own boundaries in the search for self development.
What’s worse than people than have an opinion on everything?
People that listen to them! It does not matter how perfectly you do things or how successful you become there will ALWAYS be haters.
Haters will drag you down to their level if you let them, that’s all they want, to feel equal.
Put the blinkers on, don’t look back, you’re not going that way.

5. The Rich use their time effectively

Poor people spend a lot of their time doing activities that do not bring any value. Browsing facebook, watching television etc.
While watching celebrity gossip might be interesting, it does not bring any value or benefit to you. It does however benefit the rich celebrity who instead of watching TV is on TV.
They are creating more content (gossip) while the poor are consuming it.
Of course not all media is bad, there are educational books, TV shows etc. And sometimes you need to simply disconnect from the World. That is fine.
However, if you are spending a lot of your time consuming mindless content, it could be a sign of something going on in your life that you do not like.
The rich and the succesful work on their growth, their mission and their problems first. Only then do they possibly consume some entertainment.
 

6. Poor people try to look rich

How often have you seen people trying to impress others with the things they own, the new car, the latest phone.
They are trying to look rich to impress those around them, even those that do not know them. These things are meant to show how succesful they are. How rich they are!
In fact, Poor people spend more on trying to look rich instead of working on actually getting rich. And, all of that stuff that they spend money on is holding them back.
These things that they are buying do not bring any real value. These things become a burden, you have to keep working to afford these luxuries.
How often do you see these type of guys ended up selling their expensive cars or homes? You know the answer to that.

7. Poor people don’t look at the bigger picture

While it is a good thing to be present – focusing on future goals is just as important. Truth is, poor people often lack to look into the bigger picture – or the future.
Focusing the smaller picture, or to focus in short term goal, it lacks direction which is an element to failure.

8. Poor people do what everyone else is doing

Lastly, this may sound arrogant, but in reality, if you do what everyone else is doing, you’re mostly gonna end up like EVERYONE ELSE – broke and average.
If you wish to become rich, you gotta do what the 1% does – which is to take road less traveled.

Ending

That’s it guys for today. Let me know what you think about the article and tell me if you think I’ve missed something.
Thank you for stopping by and see you again soon.
Happy weekend! And don’t forget to Execute.

Writing Executive Summary. Why is it Important and How to Write It?

The executive summary is crucial as it allows investors or banks to be able to understand the nature of your business by just reading a few paragraphs. Investors who constantly receive new business proposal do not have the time to read every page of what you submit.

This is where the summary becomes essential. It gives the investors/banks an idea of the nature of your business instantly. Based on it, they will also get to understand your business, what makes you – unique. With enough reasons, they can decide whether to read further or even end up investing.

1. First paragraph

The first paragraph is always the most crucial and the most difficult to write.

Structure systematically about what you want the investors to know about your business. What is the problem you’re trying to solve? What product and which audience? These are the things you need to focus on in the first several sentences.

Then, write about how do you operate and sell? What equipment or assets you have at your disposal to run your business?

Finally, write in one sentence what your business needs from them (investor/bank) to grow? Write in general terms, with little details. Keep it simple. If your investor is interested, they will read further to find out more.

Use the guidelines below to help structure your executive summary. Use them as guidelines, make adjustments to which you feel fit your industry.  

What you want your investors to know about your brand?

  • What problem you’re trying to solve?
  • To which audience?
  • Operation and how you sell?
  • Equipment and asset?
  • Why and where will the money be invested?

2. Second Paragraph

This is where you talk in details about your operations and sales; and how the money invested will be spent on improving your business activities.

Your focus on this one should be inclined more towards how you intend to reach your market and eventually selling your service. This, followed by how you intend to support your selling effort. Inform the investor how your supply chain functions

Remember, always keep in mind how investor’s money will be spent and how it improves your profitability when you write. Just be careful not to be too redundant.

3. Third Paragraph

It’s best I divide this into 2 sections.

In the first few lines, this is where you talk about how you want to grow the business using the money. Where will your business be in another 3 or 5 years?

Then, explain generally how you intend to use the money from the revenue on paying back the investor. Do not over promise your investors about paying back the principal plus dividend. Be realistic and honest. Investors can sense you’re being dishonest if you intend on paying them back quickly as it affects company’s survivability if you do.

4. Fourth Paragraph

Describe briefly where will the money go in supporting your business justifying the amount you request. Write from general perspective. Let the investor know the overview of the money flow.

Imagine yourself in their own shoes, you’d definitely want to know how the money will be spent and how you will be getting paid.

This is the closure of your summary.

5. Other Tips

It becomes a difficult task to write as you need to squeeze in almost everything about your business in one paragraph. Business proposals consist of many content ranging from your financial statements and forecasts to competitive edge. How is it possible to share all the depth of information in one paragraph? Well, it becomes easier if you truly understand the ins and outs of your business. It is why the best person to write the proposal is yourself, the owner. If you feel you lack the stomach to write, be participative when it is being written.

Heard of ‘write your executive summary once you’ve completed your proposal’? Well, it’s true it does help. Do this as soon as you complete writing it as your brain is still fresh from it. If you’re short on time, take note of all the important things that make your business unique. Keep it for when you’re ready. Even then, try not to wait too long to write it down. I’d still recommend to write it immediately after completing the proposal though.

6. My Final Two Cent

Personally, I am surprised to see ‘experts’ advising aspiring entrepreneurs to keep the executive summary to one or one and a-half page. The advise immediately constricts the flow of writing. It does not help the process gets easier.

Instead, focus on what you want the investors to know. Tell them what separates you from the rest. You might end up with one or two or three pages, but the very least, you have done your job on informing them accurately about your business and why you need the money. If you summarize correctly, meaning you remain on point and concise, you will get it done much better than focusing yourself to write one page as advised in the first place.

Most important of all, do not digress. Stay on point.

If you’re looking for an example of the executive summary I wrote back when I started Mirsky Mode, click to download. It’s FREE.