I continue to be amazed how time after time Entrepreneurs will walk into their commercial bank, sit down with the commercial loan officer and try to explain their need for a loan to help them fund either the start up of their business venture, expansion, or more recently, their pressing and legitimate need for working capital during the current recession. The response recited to them by the banker, the same in almost every case, is the need for them to develop and prepare a business plan for what they are trying to accomplish, whether start up, business acquisition, business expansion, or maintain current operations.

The business plan requirement has been standard operating procedures for some U.S. government agencies including the Small Business Administration which works directly with the lenders by guaranteeing commercial loans approved and funded to Entrepreneurs for their small businesses by commercial banks.

I cannot imagine why any Entrepreneur would knowingly asking for a loan without a detailed business plan to present to everyone involved (including themselves) with the loan approval process, providing answers to all their questions and issues with the related risks.

How can any entity from the smallest, to ones the size of the U.S. Automobile Manufacturers (General Motors, Chrysler) ask for any amount of money, especially from the people of the United States without a detailed Business Plan outlining the funding needed, defining the “use of proceeds” for the funding, and what they think the results will be, based on a set of general assumptions developed through experience and research (i.e. jobs created, retained, capital formation, etc.).

In looking back over the events of the early recession, the auto makers behaved like they had been told by someone to just show up, ask, and no problem, they would get the funding they wanted with not too many questions in the process, but to their surprise they were told to come back when they had prepared a business plan explaining why they should get the loans and how changes to their business models if any, would result in positive cash flow, associated net profits and positive effects to the balance sheet. This is one of the greatest examples ever, that not having a formal Business Plan is a major weakness in all but the simplest and smallest of self-funded business models.

A detailed Business Plan was also missing for the stimulus package and many questions about the package details were simply met with shrugs and statements like “details would be provided” after funding has been approved, which makes it no wonder that consumer confidence has been shaken to extremely low levels.

Business Plans are never easy to prepare and shouldn’t be taken lightly as a major business tool, even after one has prepared hundreds of detailed plans for projects from businesses representing all major industries and levels of spending, but the planning principles remain the same, just as the principles of successful business models remain the same, resulting in profit, cash flow, increased equity, and associated wealth and job creation.

You should always remember that Business Plans should be prepared to provide feasibility information for the process of determining whether funding should even be pursued at all, and if so, what type of funding, and successful Business Plans not only help Entrepreneurs and businesses potentially realize their greatest dreams, but also avoid their worst nightmares as well.

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If you haven’t heard of the live video streaming platform Ustream yet, chances are you will be noticing it more in the future, as Ustream has just announced that it has been able to raise $20 million ($20 Million with option to invest up to additional $55 Million) in a Series B round led by Softbank, a telecom firm based out of Japan, and additional funding from investors that have provided previous funds remains pending.

Ustream is a website which consists of network of diverse channels providing a platform for lifecasting and live video streaming of events online. The website has over 3,000,000 registered users who generate 1,500,000+ hours of live streamed content per month with over ten million unique hits per month, and received $11.1 million in Series A funding for new product development from DCM and investors Labrador Ventures and Band of Angels, and plans to use the new funding to expand their live video platform beyond the states and into Asia.

Ustream Raises $75 Million in Funding

Ustream’s Actual Round: $20 Million Now, An Option for $55 Million Later

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That’s right! $100 Million in funding based on a recent valuation of $1 Billion for the wildly popular micro-blogging platform, in spite of the fact Twitter has yet to implement a revenue model, although potential revenue streams are being developed as part of a model under work.

WSJ – Breaking News: Twitter to Raise $100 Million from Insight, T. Rowe Price, and Other Investors

Mashable – WOW: Twitter to Raise $100 Million in New Funding

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The most difficult task that an Entrepreneur faces when starting a business is the building of a client base, as they will find that many prospective clients are already established with other companies, or simply just not interested in taking a risk with the new business, and these types of challenges they face are typical and definitely to be expected, so the real task for the Entrepreneur is to maintain focus and rise above the challenges and build the business’s reputation in its own right, and here are a few tips to follow.

Put yourself in your potential customer’s place and ask yourself, if you were considering becoming a customer of a new business, what would factor into your decision making process, and what could be said that would persuade you to switch allegiance to a new business? The more answers that you can develop to questions like these, the better results you and your business will achieve during the initial stages of the business’s progress.

Research Your Competition

• You’ve probably heard it many times before and it doesn’t hurt to be reminded again to do your research, and start by investigating the competition in your industry by looking online at their websites, as this can grant you access to a huge amount of information including mission statements, vision statements, product attributes, customer testimonials, and other very important information you need, since you want to emulate the techniques they are doing right and seem to be working for them, as well as stay away from any negative issues you find.

Request Feedback from Your Customers

• Ask your potential customers about any of their experiences with your competition, as they can offer some real insight on their likes and dislikes, and this provides you with extremely valuable feedback that you can then incorporate as part of your mission and vision statements, but be prepared to at least match or in most cases exceed the competition’s services, as no customer switches loyalty to a new company without enticing incentives that give them a reason to change.

Develop Strategies Specific to Your Target Market

• After you have gathered enough customer feedback you can start by tailoring your marketing position to their responses, for example, if everyone you talk to insists on the need for 24 hour customer service, this is an indicator of a courtesy you should strongly consider implementing, as words are meaningless unless you take action to back up your intent, and this shows the customers that what they think really matters.

Free Stuff

• As most of the business world has known for years there’s nothing a potential customer likes better than getting free stuff, and what you receive in return for your investment with the customer’s business pays off in future dividends, for instance, if you are starting a business that offers monogramming, be sure and offer free name engraving on any item purchased, as this is a relatively small and insignificant expense to you, but has the huge potential to drive a lot of new business your way.

Business Funding

• Everyone knows that with any business, money is the name of the game, and to get a new business off the ground and operating you need to have appropriate initial funding. It is important for you to figure out just how much money you currently have and how much money you are going to need, as studies show new startup businesses that have less than $50,000 in funding have higher value or rates, and your plan should be to have enough financial assets in the way of initial startup funds and working capital for your business to have a solid foundation to start and build with.

Road Map of the Future

• Last but certainly not least is something that should never be overlooked and is critical to any Entrepreneur that wants to experience long-term success, and that is a business plan, as getting a new business off the ground and successfully operating requires a comprehensive and unbiased analysis of everything from the Entrepreneur’s capabilities and business responsibilities, and you need to have a clear focused strategy for the marketing and operating aspects of the business.

Any starting business that has a realistic outlook and well-planned strategies has greater chances of survival, and having the vision of your expectations and backup plans for unexpected developments and circumstances is the best path to take, and be assured it can make the difference between a business that is successful and prosperous, and one that collapses and fails.

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