Experts Views on the Value of Business Plans

The Experts

Two experts caught my attention when discussing views on business plans. The first is Dr. Steven Gedeon. Dr. Gedeon is a highly-regarded entrepreneurship educator and expert who is credited with founding and leading over a dozen private, public, venture capital, and non-profit organizations. He is a much decorated individual with tons of experience with businesses. He does his part by giving back knowledge to the area by publishing books, articles, and blogs. You can see more about Dr. Gedeon here.

Next is Dr. Carl Schramm. Dr. Schramm has founded or co-founded seven companies and served for major companies in crucial roles such as EVP or Fortis. He is the author of several books about business as well as healthcare costs. He has advised major corporations on a national scale about innovation, expanding entrepreneurial activity, and economical growth. He also contributes to the Wall Street Journal and Forbes magazine respectively.

Critical and Key Components

Dr. Gedeon states that critical and key components he looks for in a plan are what is the business doing, and whom is it tailored towards? This can be as simple as selling shoes. Are you selling shoes in general? If so, this may not be something Dr. Gedeon would be interested in. Now if you are selling shoes that are tailored towards runners or even runners with special needs such as runners with heel spurs, turf toe, or anything then it may be more interesting.

This heads to another area he is interested in such as how your business is different from the competitors; which in our example is shoes for those with disabilities or ailments. Lastly, he and any investor is interested in the overall executive summary and the qualifications of the management team. Is John Smith running it with no experience, or is Shawn Myers running it with 20 years experience tailoring shoes towards those with foot ailments? Venture capitalists will also be looking at the overall financials of the business; this section of the plan shows thought and consideration was put into the business.

Dr. Schramm seems to be more concerned about the overall management of the business itself. Carl is quoted in many articles such as this one stating, "Rarely it never makes sense to write a business plan." Now he doesn't mean that business plans are useless, but it is never the case that a formal path in a business plan is the plan a business takes to success. Think about that home improvement project you started over summer. Insert peg A into peg B. Simple right? But myself and other men in the country, usually A never gets into B and C usually gets snapped in half trying to force it into A. This is a direct quote from the Steinvox article. Carl stated that he looks for primary characteristics of the Entrepreneur starting the business, not the business plan. The characteristics include:

1. They are an outsider, they ask the hard questions, and press leaders on the “why” around status quo.
2. They think in terms of disruption, and are often thought to be disruptive by the change-averse.
3. They see things differently, considering untraditional forces that others didn’t see.
4. They are often competent in a completely different field than the field they are working in.
5. They are very widely read, and know lots of facts and information that makes thinking richer.
6. They have worked in multiple places in the world.
7. They have worked in a startup.
8. They have worked in a job they didn’t like.
9. They have worked in multiple industries.

These key areas for each individual tell a different story. For Dr. Gedeon, it tells him the path of the business, where it is going, what market is it in, and who is running it with what money. Dr. Schramm's characteristics and key elements really say who is doing it, what makes them qualified to do it, and what is their resume of successful completions. His characteristics also show the test of a person's grit, integrity, and much more especially their thought patterns.

What's in it for me?

The suggestions I took from each person has actually been resonating with me through my tenure at Full Sail. I have made myself into a well rounded person who strives to get myself involved in local business startups such as my new business Just Crab Cakes. Along with this, I have realized the focus on business plans surrounds the executive summary and financials respectively. What do you do, why do you do it, and why is it better than the others? Those are my key questions to any business that approaches me for help. Those three questions give me a quick summary of what a business is doing, why it's doing what it's doing, and how it will fair in a tough market. Combining both Dr. Schramm and Dr. Gedeon into one business plan is really what I am aiming for. The business plan is a great way to say what you are looking to do and how, but a business plan in my eyes is only as good as the person who wrote it.

Piracy - Fight It or Embrace It?

The Fight of Our Four Fathers

Back in the day, there was a string of commercials stating, "Piracy is a crime!" Featuring all of this mumbo jumbo about you wouldn't steal a movie, a purse, a car, a handbag, etc. Don't recall? Check it out to refresh your memory:

Now our four fathers of the Entertainment Industry were concerned piracy is stealing, which is a very logical statement. Back in the day, the thought was if an album, movie, or book was downloaded off our long lost friend Limewire, then the revenue from that media was long gone thus causing economic harm to the entertainment industry. Let's dive into it a little more though, shall we?

Piracy of 2014

2014 has brought a new light onto piracy. The same light shined upon me a few years back as I looked into piracy a little more. The Tribeca Film Festival programmer, Cara Cusumano is quoted in the article on ABC News that: 

"Piracy is less about people not wanting to pay and more about just wanting the immediacy - people saying, 'I want to watch Spiderman right now' and downloading it," she said.

"I think that if companies were willing to put that material out there, moving forward, consumers will follow."

I agree - personally for myself, I HATE going to the movies. I HATE sitting in front of some kid kicking my chair, paying $10 for popcorn and a soda, and potentially seeing a terrible movie that IMDB has ramped up as the "Best film ever!" I would rather download the movie, sit on my nice comfortable couch with my beautiful wife, have a couple drinks, and be safe at home watching a movie that may or may not be terrible. 

Piracy & Me

Now before the FBI kicks my door in, let's expand on my view on piracy. I am a musician, I have created content,  and my content has been downloaded legally and illegally. Am I hurt? No. Was I financially hurt? Yes, but only in the short term. 

The short term?

Yes the short term. Piracy is a wave. Someone downloads a movie, watches it. If it's good, they tell their friends to check it out. If it's not good, they tell their friends to stay away. So let's analyze this in a more elaborated fashion. 

I download The Box Trolls today and LOVED IT. I tell a lot of people I know, some young some old, how awesome it was. The older folks, that don't know the first thing about piracy, go to the movies, purchase the ticket along with the $10 popcorn/soda combo and enjoy the film thus creating revenues for both local and industry businesses. The younger folks might download the movie, or they may take a night out with friends or family and check it out, thus creating more revenues. The ripple effect from their reviews can influence more people to do the same. Now, I know in a perfect world all of these people won't get up and go see the movie, but they may rent it on On Demand services from their local cable provider, or hey maybe they will download it illegally. The exposure of the film a pirated movie receives can in turn generate revenues for the industry.

The Long Term

Didn't we just discuss long term? A little, but let's take it from the music side. This info-graphic from 2012 shows how many music release downloads performed in just 6 months in 2012.

Pretty large numbers, right? They are, but let's take some alternative views on the chart. Back in 2006 I bought myself a nice Breaking Benjamin CD, I listened to it so much in my car and house that the CD became unreadable and scratched. Now, why would I go and buy the content again to pay for music I already 'own'? In this case, I remember downloading the album again, burning it to a CD, and probably scratching about four more copies before the CD was retired from my collection. Is this piracy? By an overall definition, yes, but is it piracy in my scenario? I believe a judge would have to rule on this one, but I would say a jury would say no. 

Second Scenario: I pirate the new August Burns Red album (Rescue and Restore). I love the album, tell my friends, and jam to it for months. August Burns Red goes on tour with Vans Warped Tour, I buy a ticket, pick up some merchandise from the band, and go about my merry way. A few months later they release a vinyl version of their album, I buy it and all the variations of colors they offer which totaled to be about $100 to the band. During this time I am listening to the album, my friend hears the album, likes it, and then purchased the album via iTunes because he doesn't know how to pirate albums or simply doesn't like piracy in general. The cycle from that friend ripples towards new listeners and the revenues climb.

Fight It or Embrace It?

My views as you can see are simple. I feel that the entertainment industry should no longer look to spend millions fighting piracy, but spend money towards researching piracy trends. A simple search on Piratebay.org for the new movie If I Stay shows that there are ten torrents with 2659 seeds sharing the movie. Entertainment industry marketing professionals should take this data, process it into ads or promotions, and capitalize on potential revenue streams. 

An article on Forbes.com analyzes if piracy is the new advertising. In this article, he states an experiment that occurred with a book called American Gods. For one full month, they put the book for free to download or read on the publisher's website. Now in the publishing company's mind this would cause a huge drop in sales, but in this case sales of the book increased 300% one month after the free experiment was done. The article also goes on to re-enforce my views on piracy stating, "if people are exposed to your work and enjoy it—even if they originally pirated it—they will eventually buy your work. Perhaps they won’t buy thework (book, music, etc) they pirated, but they’ll soon enough buy something else."

Final Thoughts

In my opinion, the views on piracy should be re-evaluated by media industries and embraced as a way to reach out to their customers. Maybe companies can capitalize by putting movies or music on piracy sites and adding watermarks or ads within them to advertise where and when to buy the works. Use the internet to distribute the works, but make them pay to get the watermarks removed. Another idea would be to offer discount codes to use for movies, music, or other media within the advertisements. Some revenue is better than no revenue!