Digital Media Buzz > Web Startup 101: Get a Business Plan

Web Startup 101: Get a Business Plan

Posted: December 02, 2009

Image courtesy of Growthink

By Sheila Shayon

Dave Lavinsky, co-founder of Growthink and president of Growthink Publishing, is a serial entrepreneur, with several successful ventures to his credit such as Emerge Juice and Nutrition Systems - a wellness products developer and distributor; Shoutmouth - a niche music-focused social networking site; Z Reporter LLC - owner of more than 3,000 niche-focused information websites; and TopPayingKeywords - a Search Engine Marketing & Optimization research data firm.

Growthink, a company he founded with Jay Turo, CEO, specializes in strategy consulting, investment banking and market research services. Headquartered in Los Angeles, with offices in Seattle, San Francisco and New York, Growthink has caught the attention of mainstream media including CNN.com, Businessweek.com, CNN Money, and made Top 50 and Top 100 Lists in Annual ‘Inc. 5000′ Business Surveys.

Calling themselves “idealistic capitalists,” they believe that the best ideas, products and services delivered to the market the best possible way make the most money. Their clients include entrepreneurs, startups, small businesses, venture capital and private equity firms, middle market organizations and Fortune 500 companies. In the last decade, Growthink has completed more than 2,000 engagements with such clients as: Deutsche Bank, Hooters, Paramount Parks, Porsche Design and The Salvation Army.

What gives your company a strategic edge in today’s marketplace?
Our team is comprised of entrepreneurs - we’ve all started and grown businesses, we are experienced, calculated risk-takers, who’ve had failures and successes. We’ve all had hands-on learning - strategic and tactical, and understand the why, what and how of creating and growing a business.

What are the main qualities you look for in a working relationship with a client?
First, we bet on the jockey, not on the horse. It’s not always about a track record - just look at Google, Apple, You Tube. The entrepreneurs behind those businesses didn’t have success stories - yet, but they had vision, passion and strong levels of commitment.

Second, we look at the market size and check there’s enough revenue potential for this idea, and that there’s a real need for the product or service.

What’s the biggest learning experience you’ve had in the last year?
We worked with an organization from soup to nuts - growing it to 100 people in 18 months. Everything was going well until the funding vaporized. You can never have too much money. With enough capital you will never fail - but you need multiple forms and sources of it. If your competition has 3X the capital you do - can you compete?

And the biggest success?
Growing a small company from a handful of employees to several thousand internationally. There was real ‘market pain,’ customers asking for a solution. We jumped in and learned the business first-hand from the inside. We were not distracted from our focus, kept to a specific vision, followed the business plan - but checked it every month to see if the goals were being met and if modifications were needed.

Has the pace/timeframe for raising capital changed significantly in the last few years?
Yes. The traditional VC timeline has elongated - it takes longer to raise money today than it did in 2000, or even five years ago. But, in the first half of 2009, there were 140,000 angel investor-funded deals of emerging companies. Raising capital is simple, but requires creativity and multiple sources - debt, equity, banks and often credit cards.

Growthink’s most used service is business plan consulting. Why is this the case?
A business plan documents your vision on paper; it’s the strategy of your business. But is it also the best marketing strategy? Does it have the right human resources perspective? Does it include the right people and functions to hire for operations? Who are your customers? Your competitors?

99 percent of a business plan must be answered on page one - how are you uniquely qualified? What is your advantage? And because business plans are marketing documents, you must have the bells and whistles - the graphics - and not be bland.

Is there a greater need than ever when starting a business to clearly know your competition?
Yes. There’s more competition than ever before as it’s so easy to start a business today. You have to find a competitive niche - is there a market need here, a customer need, can I solve it better than anybody else? You must do your research.

Any predictions of who or what to watch for in 2010?
I think we’ll see multiple vertical successes, in the social, non-profit arena, with tech companies - and with surprise entrepreneurs like Kevin Plank and Under Armour, which is now a $700 million company that took on Nike, Reebok and Adidas.

What defines an entrepreneurial ’skill set’?