While most people haven't been to boot camp, we all have an idea of what it's like. And while starting a business isn't the same as crawling on your belly in the mud...well, on second thought, it might be pretty much the same.
David Ronick, a serial entrepreneur and consultant, is the author of Hit the Deck - Create a Business Plan in Half the Time with Twice the Impact. It delivers great advice on how to keep your entrepreneurial socks dry and avoid flying shrapnel from potential investors. The book is part of a larger, more ambitious project: an online school for entrepreneurs that is in the works.
Hit the Deck has a number of critical ideas for anyone starting a business. Here are a few of the most important:
- You need a business plan: Some people believe business plans are old school and unnecessary. But you are highly unlikely to land investors without one.
- The business plan isn't a term paper: These days, investors want a tight 15-slide PowerPoint deck, not a paper-bomb with a 40-page throw weight.
- Messaging is critical: Ronick has great exercises for honing your vocabulary to describe your business to investors and takes you through what you need to include in your pitch, slide by slide.
- Traps are everywhere: There are many traps waiting for entrepreneurs who pitch to investors. Things like:
- confusing the size of the market with the addressable size of the market, which is all that really matters;
- sending out your presentation in advance of your meeting with investors, which results in a bored group of investors when you show up;
- "boiling the ocean" -- that is, claiming your startup will generate revenue from myriad sources rather than focusing on one;
- saying you have no competitors, which can never be true;
- a lack of understanding of your own financial model (especially if you had help from Excel jockeys to cover up your shortcomings in building a P&L). Whatever you do, says Ronick, avoid these words in an investor pitch: "Our financials are conservative." That's how they'll know you're either lying or you're a fool.
Ronick uses a number of really nice devices in his book that make it especially useful. He's got "Word of Caution" boxes throughout, highlighting the biggest potential pitfalls to avoid. "Takeaways" boxes neatly summarize major points. "Ask the Expert" sidebars offer insights from the likes of Tommy Hilfiger, Liz Lange, Dany Levy (founder of DailyCandy), and entrepreneur and venture capitalist Bo Peabody. And "Reality Check" questionnaires ask entrepreneurs the tough questions they may have forgotten to ask themselves, like "What major gaps are there in the skills and experience of your founding team?", "What are the most important milestones your company will hit during the next four calendar quarters?", and "How can you demonstrate that your financial projections are within the realm of reasonability?"If you're committed to starting a business, you owe it to yourself to go no further until you've read Ronick's book and checked out his website.