by: Geoff Ficke

Sourcing and Defining Volume Pricing Is an Absolute Must for Aspiring Consumer Product Entrepreneurs

I have been mentoring a young female entrepreneur for several months. She is not a client of my Consumer Product Branding and Marketing Consulting firm. This earnest lady has a very interesting concept in the Infant and Juvenile product space. Like so many aspiring first time business owners she is confused about how to best organize her enterprise and move from a hobby project to a fully commercial model.

As we discuss her projects status she states that her cost of goods is too high. This is because she is producing in very low volumes and utilizing domestic manufacturing sources. The test marketing and focus groups she has conducted are thus flawed. In order to gain proper due diligence from which to construct an accurate Sales Model, entrepreneurs must be able to ascertain an absolutely tight Cost of Goods.

Short run, hobby business-like volumes represent a distortion of the Sales Model. Unless the entrepreneur wishes to operate a low volume artisanal business it is vitally important to find the best sources of supply and manufacturing and to develop the accurate cost of mass production in hand with the chosen supplier.

We ask our sources of supply for dead-net Cost of Goods pricing for production runs that would approximate mass market distribution models. Dead-net Cost of Goods includes the total amount charged to fully assemble and package an item, plus international freight, customs, duties (if any) and local freight to a Fulfillment center.

The young lady I am mentoring has made the very common mistake of utilizing the much higher Cost of Goods she is currently absorbing based on low volume production and trying to force her Infant travel accessory items to market at a price point that is not viable. Test markets are only useful if the data received is based on solid Marketing fundamentals. Most test markets are not conducted with a goal of making profit. They are laboratories to learn about consumer acceptance, pricing objections, Branding effectiveness, etc. Test marketing saves time, money and mistakes when a product is finally launched after alterations to Marketing Strategies are made.

Take a simple component such as a 12 ounce plastic food bottle. The purchase of a stock Boston Round bottle in quantities of one hundred for testing might be $.25. In purchase volumes of 25,000 the price may drop to $.15 per unit. This type of differential, when applied to every component listed on a Consumer Product’s Bill of Materials will reflect a huge pricing differential. This has a massive effect on the ultimate optimal retail price that consumers will pay for the product.

One of the reasons usually stated for not obtaining a mass production Cost of Goods is a lack of knowledge. The entrepreneur does not know of specific factories or sources of supplies. The internet, social media and business directories today make this work so much easier than when I started my first business 36 years ago. The information and networks exist that actually make this process straightforward today.

Unless pricing for a full channel of distribution is not gleaned none of the assumptions that are used to create a business model will hold up. Sales projections, Business Plan elements, procuring investment from Venture capital sources,  Marketing Strategies and many more enterprise building blocks will crumble. Take the time and expend the energy to diligently uncover the most accurate Cost of Goods for your products.

by: Geoff Ficke

Brand Extension Can Be a Key to Growing and Evolving a Consumer Product Line or Service

Switzerland is the couture watch capital of the world. A visit to Geneva and its surrounding cantons exposes the traveler to the hundreds of exotic watch brands made in this famous horology center. Eponymous watch stores, displays, advertisements and billboards and jewelry stores are ubiquitous. Each brand prides itself on the customization, detail, amazing complications and old world craftsmanship that is present in each artisanal timepiece produced.

Rolex, Frank Muller, Constantine Vacheron, Piaget, Chopard, and scores of other producers offer pieces that retail for thousands, to hundreds of thousands of dollars. Exclusivity of distribution is practiced with military-like diligence. Into this clubby world, in the late 20^th century an outlier sprang forth. The amazing Swatch watch line was born.

Swatch is everything that Audemars Piguet and Breitling are not. Mass produced, simple mechanical movements, plastic bands, unlimited and gaudy color combinations and very low retail price points mark Swatch as a watch for everyone. No exclusivity here.

Swatch became an international hit almost immediately. Consumers loved the quirky, whimsical look of the time pieces. And then Swatch did something that seemed counter-intuitive: the Company teamed up with Mercedes Benz to create the Swatch automobile lineup.

Mercedes Benz and Swatch seem like strange business bed partners. And yet, this has become an international example of a successful Brand Extension that is ripe with benefits for both Companies.

Mercedes Benz has been able to keep production flourishing, develop small car manufacturing technologies that could never be perfected on their high end, exclusive luxury models, profit handsomely and still keep their Mercedes Benz Brand name and heritage pristine. The car they produce is known by consumers as a Swatch car, not a Mercedes Benz Swatch.

Swatch, having no capability to produce such complex machines as automobiles, gained the luster and panache of having a Mercedes Benz produced vehicle to sell. The Branding of the cars, the fun, hip color combinations of the interiors and exteriors of Swatch cars stand out in a sea of look alike, dull, even ugly mini-car offerings. It is fun to own and drive a Swatch,
practical too as a miserly fuel sipper and an easy vehicle to maneuver in crowded cities.

The Swatch car has further extended the fame and Branding of the Swatch watch business. The very word Swatch creates instantaneous thoughts of bright, cool and fun products with great design cues. Swatch is by far the largest selling watch Brand in the world.

Rossignol is a famous producer of skis. Many Olympic champions, professional and serious skiers prefer Rossignol skis to any other Brand. This is one of the most famous sporting good brand names in the world.

Some years ago Rossignol, having conquered the ski slopes, decided to enter another arena. They began to produce Tennis rackets. Rossignol tennis rackets are now ubiquitous on the men’s and women’s international professional tennis tours. This is another obvious example of utilizing the concept of Brand Extensions to grow a mature firms business in another space.

Branding Extension can be hurtful to a business franchise. A famous example of this is demonstrated in the history of the venerable Pierre Cardin fashion business. Cardin was one of the earliest proponents of licensing his name. In the 1970’s, at its zenith, Pierre Cardin was generating over $400 million dollars annually in sales turnover of his couture men’s and ladies Clothing and Fragrance lines. Then the pursuit of licensing began.

Over a period of about 20 years, the fashion franchise that Pierre Cardin had arduously built began to crumble. The extension of his brand became an industry joke. The formerly famous Pierre Cardin logo began to appear on a slew of wholly unrelated, unfashionable, cheaply made products. Sport bags, running shoes, cheap Asian ties, mass market plastic tableware, bath towels and hundreds of other products began to flood discount stores with low end goods carrying the iconic PC logo. Department stores and luxury boutiques took notice and discontinued the Pierre Cardin lines they had carried proudly for years.

Mercedes Benz has enhanced their business by extending to partner with the Swatch. Pierre Cardin did not police his brand and his extension into rubber flip flop-type products meant death to his fashion house.

Brand Extension is a technique that we have practiced on our products and for client Consumer Product brands for many years. It is a wonderful way to grow a mature business. But remember, the Brand Extension must make sense to your most important asset, your customers and clients. Do no harm!

by: Geoff Ficke

The Most Useful Funding Technique for Funding a Business Startup Is the Oldest: Bootstrapping

My Consumer Product Development and Marketing Consulting firm is approached almost daily by entrepreneurs seeking to launch a new enterprise. For many of these aspiring business owners their primary concern is the funding requirements they believe will be required to enable execution of a proper launch. Many assume they need to raise funding from angel investors, venture capital or banking sources. Very few will succeed by taking this path.

Capital is extremely selective in placing highly prized investments in untried startup businesses, run by anything less than experienced entrepreneurs. It rarely happens. The expectations of professional investment sources is simply too difficult for most novices to be able to satisfy steep requirements for Return on Investment,  Use of Funds, Professional Management Teams or First Mover Advantage.

When we explain to first time seekers of capital the complexities and difficulties that they will face in successfully securing a funding round, we almost always are confronted by resignation. The inevitable query we hear is, “Well, how do you get started”? There are many options but the simplest, and oldest is the concept of “bootstrapping”.

Bootstrapping is simply self-funding. Some of the greatest successes in the history of business were self-funded by Bootstrapping. The most famous is MicroSoft, followed closely by Hewlett Packard. Leslie Wexner launched The Limited in Columbus, OH in the 1960’s by bootstrapping a single dress shop in a strip mall. Estee Lauder created the world’s most successful Cosmetic brand at her kitchen table in the Bronx. King Gillette did much the same in the 1890’s when he launched his eponymous shaving brand. There are hundreds of publicly traded companies around the world that were nurtured to life initially by bootstrapping.

The beauty of not accepting, or seeking an equity investment partner is obvious: There is no partner to share ownership and the necessity to hit performance marks required to obtain funding is eliminated.

True, bootstrapping can hinder the rapidity of growth. But the process of bootstrapping demands discipline and enforces controls on spending that become part of the DNA of the firm as growth occurs. Expenditures are weighed and considered before very dear capital is committed.

The three Magi were bootstrapping incense merchants. Every pioneering farmer or blacksmith was initially a bootstrapping business person. Your insurance agent, realtor, most salesmen, lawyers, shop owners or artisans are bootstrapping for their income. To the extent that capital is required to open a restaurant, coffee shop, day spa, sales agency, franchise a business or set up a landscaping firm the funding required to be able to bootstrap these opportunities comes from friends, family or personal savings.

The Venture Capital community has a well-known phrase to describe the source of seed funding: “Startup monies come from Friends, Family and Fools”. Money flows easily to new, novel business concepts, but only after there is a confirmation of a proof of concept and sales traction is demonstrated.

Bootstrapping is not glamorous. It requires total commitment and focus. Fancy offices, fresh cut flowers in the reception area, expense account lunches and leased luxury automobiles are not line budget expense items for bootstrapping Companies. Credit cards may need to be tapped. Home equity utilized. Aunt Jane approached for a loan. If the entrepreneur is driven, there is nothing that will deny them the opportunity to convert their concept in to a going concern. Bootstrapping is the simplest, oldest, and in most instances, the only strategy available to start a new business.

Duquesa Marketing

www.duquesamarketing.com

Press Release

For Immediate Release

Contact: Geoff Ficke
859-567-1609

gficke@msn.com

Geoff Ficke to Be Interviewed on The Morning Show with Host Jae Nash on May 9th at 11:15 am CT

Duquesa Marketing Founder and Expert to Discuss 5 Personality Traits to Success

Florence, KY  Nancy Ficke, General Manager, announced today that her Branding and Product Development firm Duquesa Marketing has scheduled another in a series of national radio interviews for Company President and Founder Geoff Ficke.

“Geoff Ficke will appear on The Morning Show with Host Jae Nash May 9th at 11:15 am CT”, said Mrs Ficke. “The discussion will be about the 5 Personality Traits to Success. Mr. Ficke will explain if your idea or business is a good one and if you have what it takes to succeed. Do you have a product idea but just aren’t sure where to start? Is your business ready to move to the next level, but you don’t have the connections to make that happen? Geoff Ficke has been helping hundreds of people make their business dreams come true.

Through his 40 years of practical experience Geoff has been mentoring, teaching and consulting with small and micro-businesses, entrepreneurs and inventors to enable them to turn dreams and ideas into products and successful commercial opportunities. Geoff and his team have worked with products from skin care to cupcakes to health supplements and more.

Duquesa Marketing has assisted numerous individuals and enterprises start and expand Consumer Product opportunities over the past four decades. The award winning firm
has vast experience in all Sales and distribution channels in the United States and internationally.

Duquesa Marketing

www.duquesamarketing.com

Press Release

For Immediate Release

Contact: Geoff Ficke
859-567-1609

gficke@msn.com

Geoff Ficke to Be Interviewed on Blog Talk Radio Successipes Show on April 25th at 3:30 PT

Duquesa Marketing Founder and Expert to Discuss 5 Personality Traits to Success

Florence, KY  Nancy Ficke, General Manager, announced today that her Branding and Product Development firm Duquesa Marketing has scheduled another in a series of national radio interviews for Company President and Founder Geoff Ficke.

“Geoff Ficke will appear on Successipes Show with Host Lori Wilk April 25th at 3:30 pm PT”, said Mrs Ficke. “The discussion will be about the 5 Personality Traits to Success. Mr. Ficke will explain if your idea or business is a good one and if you have what it takes to succeed. Do you have a product idea but just aren’t sure where to start? Is your business ready to move to the next level, but you don’t have the connections to make that happen? Geoff Ficke has been helping hundreds of people make their business dreams come true.

Through his 40 years of practical experience Geoff has been mentoring, teaching and consulting with small and micro-businesses, entrepreneurs and inventors to enable them to turn dreams and ideas into products and successful commercial opportunities. Geoff and his team have worked with products from skin care to cupcakes to health supplements and more.

Duquesa Marketing has assisted numerous individuals and enterprises start and expand Consumer Product opportunities over the past four decades. The award winning firm
has vast experience in all Sales and distribution channels in the United States and internationally.

Geoff Ficke Discusses Five Personality Traits to Success!

See if Your Idea makes the cut…

Do you have a product idea but just aren’t sure where to start?  Is your business ready to move to the next level, but you don’t have the connections to make that happen? Geoff Ficke has been helping hundreds of people make their business dreams come true!

Through his 40 years of practical experience Geoff has been  mentoring, teaching and consulting with small and micro-businesses, entrepreneurs and inventors to enable them to turn dreams and ideas into products and successful commercial opportunities. Some of his Consumer Product Clients include some of the world’s most recognized companies.  He’s worked with products from skin care to cupcakes to health supplements and more. And he’ll share his wisdom with your listeners!

Phones will light up about with listeners calling in with their questions on this hot topic!

Let Geoff Ficke answer their questions about how to get their business idea to market

Suggested Show Topics for Geoff Ficke:

• How to get funding for your business idea
• What makes a product or business idea successful
• How to get your product or business idea to market

Questions for Geoff Ficke:

1.   Is now the best time to start a new business?

2.   How do I find funding?

3.   Do I really need a business plan?

4.   Where do I go to get a prototype of my product made?

5.   Can I sell or license my business idea?

6.   Should I go to one of those invention services advertised on television?

7.   Where can I find manufacturers for my product?

8.   Do I have to patent my idea? How much does that cost and what do I do?

9.   What 5 personal traits are essential for achieving entrepreneurial success?

10. Can I bootstrap my way to success?

11. Tell us some of your success stories.

12. I’m ready! How do I get a hold of you to help me make my business idea happen?!

Geoff Ficke and his consulting firm, Duquesa Marketing,  (www.duquesamarketing.com) has assisted businesses large and small, domestic and international, entrepreneurs, inventors,  students in new product development, capital formation, licensing, marketing, sales and business plans and successful implementation of his customized strategies. He is a Senior Fellow at the Page Center for Entrepreneurial Studies, Business School, Miami University, Oxford, Ohio.

Contact Alexis Bruning to schedule an interview with Geoff Ficke at 513-602-9040.

by: Geoff Ficke

Consumer Product Market Penetration is Much Easier If Exclusivity Is Key to the Lines Branding Strategy

Recently I had the opportunity to visit and work several Trade Shows while on an extended business trip through Europe. One was a huge Beauty Product expo in Italy, another a jewelry fair in Switzerland, and a Gourmet Food Show in England completed the itinerary. Each of the venues would be considered apex convocations within their industry space. Each offered a range of products touching many price points.

As any consumer of economic news knows, today Europe is struggling and in a severe commercial downturn. Consumers are caught in a severe pinch between sky high government taxes and budget deficits, slowing growth, job losses and a real decline in personal incomes. The fear is palpable in many obvious ways, even to a foreign traveler.

And yet, the Trade Shows I attended were each doing their most brisk commerce in the categories that offered the more expensive, exclusive product offerings. I queried any number of vendors from across a broad range of retail price positions. Inevitably the higher end products on offer reported that they were doing well. The mid-market brands seemed to be suffering most. The mass market lines were of course also doing well as many middle class shoppers were trading down in these uncertain times, although many mentioned that they were cutting margins to maintain market share.

It is a fact that in many product categories, exclusivity as a marketing strategy can be an easier route to store shelves than almost any other model. In higher-end markets there is less pricing resistance, and thus greater opportunities to enjoy fatter profit margins. Competition can be much less severe. Obstacles to gaining distribution are much less in specialty
stores and boutiques than exist in chains and mass market discounters.

Pet products that cater to passionate owners often seem eccentric. Jewelry, cashmere sweaters for dogs, Halloween outfits for cats and luxury pet beds seem extreme. But, they sell. A visit to any Pet industry Trade Show will confirm this fact.

Cosmetics, Jewelry, Couture Fashion, Footwear, Automobiles, Gourmet Foods and Drinks, Electronics, Luggage, and many other product categories that provide exclusive brands are booming. Brands in the mid-market range are being squeezed. Private label offerings are picking up market share, though margins are squeezed in order to lower and hit needed price points.

The market for Skin Care products priced over $100 per ounce is sizzling. Gourmet Food brands are enjoying a golden age thanks to the popularity of celebrity chefs and food networks. Jimmy Choo and Manolo Blahnik, among other show designers, have elevated more than the heels on their products. An order for a new Ferrari or McLaren sport car, paid up-front with cash, will earn the buyer a spot on a waiting list with a 2-year wait for delivery of their vehicle. Every Hermes Birkin bag is pre-sold each season before the purses ever hit store shelves. The valet parking concession at Harrods and Harvey Nichols in London is constantly backed up with a constant cue of chauffeur driven Rolls Royce and Bentley automobiles.

Launching Consumer Products with an Exclusivity distribution Marketing Strategy and Sales Model is a course we often we choose for client projects. Once a market has been  penetrated, and consumer demand is stimulated for a product it is always an option to replicate the item in a lower price point presentation. You can always come down in price.

by: Geoff Ficke

Consumer Product Marketing Success Depends Much More on Being First and Executing than Simply Being First

Recently I had the opportunity to review a new beverage concept submitted for consideration by an entrepreneur. This young chap had collected reams of information, concrete data on his drink’s wellness benefits, packaging renderings and marketing trend information on the mass market soft drink category. His due diligence was impressive and seemed indicative of a driven, passionate innovator.

My staff came away from the meeting impressed on every level. We had spent several hours advising on the various options and strategies that could possibly be utilized to fully  commercialize the drink. The beverage was in concept form, so a turn-key product development menu of work elements needed to be detailed. The entrepreneur taped the meeting and took copious notes as we essentially provided him with an oral business model and a rudimentary business plan.

Before the initial meeting we had not seen or been appraised the content of the proposed beverages unique selling proposition. Once unveiled, we immediately searched the internet to discover competitors. We found only one direct competitor.

In a category as wide and deep as drinks, to find but one direct competitor in a space is unusual. The normal rule for seizing and commercializing a Unique Selling Proposition is that we look for an identifiable niche in a broad category. Even though the concept we were reviewing had an existing competitive brand, we could easily customize a strategy to potentially command this niche.

As we reviewed the competitive brand we had discovered, one thing became immediately apparent; the owner of the existing drink had gotten to market first, but had not executed any type of strategy that was leading to sales success. Our Consumer Product Development and Marketing Consulting firm uses a proprietary system to analyze the commercial
viability of concepts and small and micro-brands. When we applied these key measurements to the extant beverage brand we saw error after error in marketing execution working to the detriment of the product.

The information we had gathered convinced us that our prospective client had an excellent opportunity to seize the space if he executed a disciplined, customized Marketing and Branding strategy. Every year new waters, soft drink, energy, teas, coffees, juices and wellness drink brands are launched and find varying levels of success. Though the category would seem to be saturated, the actuality is that there are always new entrants and stores are always seeking the next new and fresh thing. The missing element for those that fail is always
the failure to properly execute.

This applies to every consumer product category in which we work. From Pet Products, to Cosmetics, to Jewelry, to Giftware, to Sporting Goods and many others, the market craves novel products that offer fresh features and benefits. The key to success in Marketing Consumer Products is to get to market as quickly as possible AND execute a strategy that supports the Business and Sales Model.

We see many entrepreneurs confuse the importance of being first (and it is important) with the more crucial goal of being first and executing on strategy. One without the other is like a beautiful sports car without access to fuel. Neither goes very far.

by: Geoff Ficke

10 Bullet Point Options for Bootstrapping Your Small Business or Consumer Product Opportunity

Almost every small or micro-business, entrepreneur or inventor faces a harsh financial reality when starting out. They have little or no access to venture capital, financing or grant money. The funding source that is realistically available to them is family, friends and their own ability to bootstrap their business.

Bootstrapping a business is not glamorous, but it is the most useful, and practical method to grow a new business or product that is available to any driven entrepreneur. This is the technique I utilized to start my first business many years ago. If the strategy is successfully executed it can quickly lead to doors opening to investors and funding options.

In my Consumer Product Development and Marketing Consulting firm I review hundreds of new business and product concepts every year. Only a tiny fraction has full funding out of the gate. The vast majority spend a great deal of time and energy seeking investment tranches which will never develop. I am always amazed that they do not bootstrap their ideas in order to gain early sales traction.

The following are 10 Bullet Point Option tips that can be utilized to Bootstrap a new business or self-employment opportunity. They can be adapted and customized to fit a vast array of circumstances, consumer products and services.

1. Turn your hobby or passion into a business. If you love to bake, or sew, for instance, customize products for local church events, fund raisers, special events (retirements, jubilees, weddings, etc.).

2. Bring the product or service to the client/consumer. People are busy. Offer convenience and a quality product or service delivered to the client’s place of work or home. A man with a pick-up truck, a tool box and a ladder is a potential successful small businessman.

3. Support each successful step forward with free, local Publicity. Use a PR template (there are hundreds of samples on my website www.DuquesaMarketing.com). Circulate the releases to local media, weekly papers, social groups and churches. This is FREE!

4. Use local fairs, home shows, festivals and civic events to sell and showcase your products. A woman we worked with started in this manner selling her line of organic Bath, Body Care and Aromatherapy products. Within 30 months her line was carried by a regional department store.

5. Mall kiosks are an amazing, affordable vehicle to expose and leverage sales of your Consumer Product or Business Service. We have seen clients start by offering a line of Gift items on one cart, expand to more and then jump into traditional retail distribution.

6. Personalize products: In a world of impersonal mass production, people enjoy goods or services that offer intimacy, uniqueness. A past client built a wonderful income by creating personalized Baby and Infant items like bags, blankets, sleepers, etc.

7. Sample, sample, sample! If your product is good, and you believe in the item and yourself, demonstrate and sample relentlessly. A couple we consulted for were passionate about their Gourmet Sauces and Marinades. They built their business by attending every art and foodie event possible and constantly sampling their products while generating sales with value packs and on-site sale coupons.

8. Pre-sell. This is a technique we use every year to launch under-funded clients. Build prototypes or production quality samples, fully packaged and take orders before you build expensive inventory.  Big box retailers have the ability to buy on the local level and love to do so, if you offer a well-conceived prototype for them to review.

9. Make yourself the “authority” on the space you want to enter. Properly managed social media, publicity, small print advertorials and compelling web-sites are only a few tools available to create stronger bona-fides.

10. Network, Network, Network! Every person you know or meet is a potential client for a good or service you might be able to produce. Brand yourself and your product and professionally let others know about your business, and ask about theirs.

We have Bootstrapped businesses in Cosmetics, Fragrance, Toys, Oral Care, Fashion, Jewelry, Juvenile Products, Hardware, Gifts, Foods and Drinks, Sporting Goods, Pet Products and many more categories. A number of these businesses were able to gain sales traction and leverage into traditional retail distribution. Consider this technique as the realistic and
practical way to be the tortoise and win success slowly.

by: Geoff Ficke

Business Plan Mills Turn Out Documents That Are Expensive–and—Mostly Useless to Entrepreneurs!

The Business Plan, and the process involved in crafting these essential documents, is one of the most maligned areas in all of small business. Many start-up firms and entrepreneurs reflexively believe that a plan of some sort is crucial to developing their project. They proceed to download internet templates and fill in the blanks with half vetted due diligence and guesstimates. Others retain reputed business plan writers to craft their documents from incomplete guidance they provide. In both cases, the plans are useless at best, and often harmful to the project.

In its simplest definition a Business Plan is a series of assumptions that are well qualified, well quantified and well narrated. No more. No less.

Assumptions are the skeleton of the plan. Realistic assumptions that can support revenue and financial projections are mandatory. The only way to verify your assumptions is by doing the best possible job of researching every element of the product category, competition and trends in the space you seek to enter. This can be easily accomplished but not by taking the shortcuts we see in almost every amateur plan new review. The homework, preparation and detail that professionals provide is what makes a quality Business Plan work and drives the reader at investment and funding sources to want to read and learn more about an opportunity.

Well qualified assumptions are supported by hard data that can withstand the harshest scrutiny. How did you support the market penetration for year one, two and three that you project? How did you project annual sales turnover? What schedule are you using to define expenses? These are just a few of the assumptions that must be made, then qualified in order to present an exciting, well supported strategy.

The ability to quantify numerical projections is another chasm that most amateur plan writers cannot overcome. Investors are number skeptics. They will hold the most brutal light to the assumptions used to create the income statements, cash flows and balance sheets provided to support the financial underpinnings of the plan. The key to quantifying a Business Plan starts with knowing (really knowing, not guessing) the dead net cost of the good or service you are seeking to offer. We almost never see this type of specificity in amateur plans and this sinks the whole edifice.

In order to produce a well narrated plan you will need excellent writing and communication skills. There are many excellent copy writers that purport to produce professional Business Plans. Unless they understand the process involved in crafting a series of assumptions that can be well qualified, quantified and narrated, they will most assuredly produce a document that falls short of the needed mark. Good writing as opposed to good Business Plan writing is as similar as Karl Marx and Ayn Rand. Your product story should be brisk, interesting (without gratuitous cheerleading) and make the reader want to learn more.

Just this week I was presented a Business Plan by a very enthusiastic entrepreneur. He had developed a vanity organizer product that almost every woman would find useful. I was keen on the product. Then I read the Business Plan.

The document was 77 pages (before exhibits). Too long! The assumptions seemed shaky. I quizzed the gentleman and he advised that he had paid $3500 to have the plan professionally written. I advised that it was very well written from a grammatical standpoint. It just would not stand investment scrutiny.

For instance, the Cost of Goods number was not realistic. I asked how they had agreed on the stated number. Had the author created a Bill of Materials? The owner did not know what a Bill of Materials was. Had the author organized 3D CAD art? Release Packets? Contacted a number of factories? Gotten mass production costing? Figured freight, customs, duties and local in-country freight? None of these queries could be answered. Their Cost of Goods was a guess.

When Cost of Goods is not known to the fifth decimal point for each penny of materiel involved in producing a product every single number beneath this line is wrong. The Business Plan is of no use. This entrepreneurs $3500 had been wasted.

Do not take shortcuts. Perform more, not less due diligence. If your project has value, and you believe it is worth investment consideration, give it the support it deserves. You would not buy a house with a leaky foundation. Likewise, investors, licensors, venture capital and strategic alliances will not touch leaky Business Plan propositions.