Re: @d:tech World - The Experts' Secrets of Viral Success

From: Robin Lasher <robinlasher_at_hotmail.com>
Date: Wed 29 Nov 2000 11:36:07 -0500

ALEC ELLIS <alece_at_glopro.com> WROTE:
>The little picture is "how much will it make this
>week", where that larger picture is in 12 months how
>many subscribers will I have , and how many 100's of
>millions am I going to sell this dam thing for.

TO WHICH JANET ATTARD REPLIED:
>That's also the philosophy that's behind a whole lot of
>dot-com failures this year. One reason is that it is
>never as easy to reach those hundreds of millions as
>anyone thinks. The business plan is the key, but if
>anyone expects to stay in business it had better be
>based in reality and have some expectation of reaching
>profitability in a reasonable period of time.

TO WHICH JOHN GASKILL REPLIED:
> One of things apparent from the large number of
> spectacular dot-com failures this year is that a
> business plan is not enough. Anyone who read IPO
> prospecti from those no longer in business saw great
> business plans, prepared, beautifully with eventual
> projections of profits.

A problem for many dot-com business plans is
determining what are realistic projections. I_ve seen
some of those beautifully prepared plans that were
able to take advantage of the uncertain Internet
formula for profitability and make assumptions based
on incomplete information. The problem was that no
one else (including venture capitalists) had the
information for a winning recipe either. As a result,
we saw a lot of speculative and subjective forecasts
that raised too few eyebrows but lots of cash.

As Janet pointed out, the business plan is the key. It
must, however, within the operational plan provide a
detailed road map of the company_s goals and exactly
how management intends to reach them. The
effectiveness of the operational plan is dependent on
measurable goals and a management team that is
accountable for reporting the progress towards each
goal preferably on a monthly basis.

Many dot-coms downplayed profit and replaced it with
the elusive _life-time value of the customer_
strategy. Although a key concept for long-term
success, it_s a vague model often with dismal results
for reaching necessary survival goals such as
break-even in a highly competitive market. If you
have very deep pockets, this might work. If you_re
reaching into someone else_s, probably not.

The business plan is the key when it is based on a
viable concept and realistic goals. It needs to be
flexible and able to adapt to the uncertainty of the
Internet business environment, but not revised to
disguise incompetence or flawed forecasts.

As for the advertising element within the marketing
component of the business plan, you can_t fix a
defective business model by throwing more marketing
dollars at it. However, if you identify what works,
funnel the advertising dollars in that direction while
staying within the allocated budget, you_re much more
likely to reach defined goals. Again, the ability to
measure the ROI and your progress in achieving goals
are critical.

So, a business plan based on a realistic concept,
measurable operational and marketing goals, and a
management team accountable for their actions and
decisions is a critical key to growth and
profitability. Great business plans don_t just look
good on paper; they_re a carefully designed and
powerful tool that management faithfully refers to from
start-up through growth, maturity and possibly exit.

Robin Lasher
TCC Small Business Development Center
http://www.smallbusinessplanguide.com





Received on Wed Nov 29 2000 - 10:36:07 CST