Business Plan Expert Advice

Different CEO’s will focus on different aspects of a business plan.  Simon Sinek is all about passion and leadership.  Sinek is a trained ethnographer and motivational business speaker who studies why people and organizations behave the way that they do.  From his studies, Sinek consults with leaders and their companies about how to make their businesses better by understanding both consumer and managerial behaviors and by creating inspiration.  He is active in arts and not-for-profit organizations, and his book “Start With Why” was published by Penguin Books in 2009.

In a “Ted Talk” delivered in support of his book, Shinek discusses the importance of identifying a core value for a leader and a company.  The notion is that most companies operate outside in.  That is, they define themselves first by what they produce, then by how they produce it and then by why they are producing it in the first place.  That approach touches the customer first, and can (and often does) produce loyalty to an individual product.  But if the company can define itself first by its core value – by the why it operates – then it operates from the inside out, and creates not just consumers, but loyal consumers that will follow the company or the leaders just about wherever it goes.

Sinek talks about instilling this in every aspect of a business plan, as well as in business operation and workflow.  The primary notion: if a company can convey its sense of mission to itself, then it can convey that sense of mission to its investors in its business plan, which will secure funding and approval.  Eventually, it will secure followers as consumers.  This is a creative take on business plan writing, and it emphasizes the importance of establishing trust and confidence in those leading the project.

Paul Ferris is the co-founder and General Partner of Azure Capital, a venture capital firm that invests in early stage technology companies that operate in sectors from cloud services to healthcare technology to gaming platforms to financial services.  His background is in investment banking.

Azure Capital is a highly selective firm.  The company receives thousands of pitches for angel investment funding every year.  The company will interview dozens of early stage businesspersons, but will only invest in four to six projects every year.

Ferris and his partners have a strategy within Azure that is essentially two-fold (with many subtopics), but unlike Sinek their strategy is far less emotional than it is analytical.  Ferris and his partners are looking for data to formulate a plan from the beginning of a journey to its very last step.  Up front, the primary focus is on research.  The research in technology subsectors helps Azure create its investment roadmap, increase their knowledge of any particular tech area, and identify whether or not a company has a real opportunity worth pursuing.

         On the back end, Azure operates with an understanding that the business plan needs an exit strategy.  In their industry, they attempt to fund little fish that they believe will become medium-sized fish that in turn pose a creative and market share threat to the biggest fish.  Thus, the strategy for most of their investments is that they will eventually sell to strategic competitors or partners.  As such, Ferris likes to see plans that acknowledge this outcome and that incorporate that as a strategy in the very early stages of company planning.  In short, under Ferris’ direction, Azure needs plans that will be clinical in their execution.

          Sinek and Ferris stress different aspects of business plans, though both are important to the successful outcome.  Writers of business plans should heed the advice of both, and keep both elements in mind when self-evaluating their proposals.

REFERENCES

1. CAA speakers: Simon Sinek, author of "Start with Why". (2009). Retrieved from www.caaspeakers.com/simon-sinek/bio
2. Ferris, P. (2012). Azure capital :: Paul ferris. Retrieved from http://www.azurecap.com/team/team-member/Paul_Ferris
3. Lester, C. (2009, July 27). Another view: A golden age for dcs. New York Times. Retrieved from http://dealbook.nytimes.com/2009/07/27/another-view-a-golden-age-for-venture-capital/
4. Locke, L. (2011, September 29). Twitter video-sharing service nabs $6.5 million. CNet News, DOI: news.cnet.com
5. Simon Sinek. (2009, September). [Video Tape Recording]. Simon Sinek: How great leaders inspire action., Retrieved from http://www.ted.com/talks/simon_sinek_how_great_leaders_inspire_action.html

Who Makes Connections in Sports Team Sponsorships?

The world of sports team sponsorships is growing ever more complex.  In the old business model, going back 30 and 40 years, companies simply bought advertising time on television and radio stations that broadcast games and sent one message through one or two distribution channels in order to align their company and product with the team, or the sport, and its' customers.  Today, there are more and more opportunities for companies to reach potential customers, because there are more products available with which to associate through sports team sponsorships, and more opportunities to be able to reach to targeted audiences.  This offers companies the chance to be more efficient in their sponsorships, but it becomes increasingly difficult and labor-intensive for the companies and the teams to negotiate this new minefield themselves.

So with more and more frequency, both sides of these types of transactions are reaching out to middlemen for assistance.  From the team side, this is in part because they are working hard to create new revenue streams through products, merchandise, ticket sales, new media rights and more.  As an example, the NBA is in the process of becoming the first major American Professional sports league to allow jersey sponsorships (following in the path of MLS Soccer teams and European leagues of all sports).  The teams and the league have yet to figure out who controls the inventory, the potential value of the sponsorships or what kinds of companies and products would be interested in the sponsorships (Lombardo and Lefton, 2012).  This kind of uncertainty causes confusion, even though it is borne of opportunity.

Similarly, companies that wish to advertise through sports also have difficulty understanding all of the possibilities that are now available for them within sports team sponsorships, even as the technology to track the data can give them complete analytics about fan behavior and how fans interact with various parts of the sports viewing experience both in stadiums and at home.  Companies that are big spenders in title sponsorships, traditional and digital media strategy and more, such as Met Life for example, as well as smaller spenders like AAA Automobile Club that are slightly more selective about which properties they sponsor, all have vested interest in working these sponsorships efficiently, where they can get the best value for their money by targeting their audiences in areas and through products where they know those audiences are going to congregate (Ourand, 2012).

With more and more options available, and with more and more data available, the technology and opportunity is there to decrease the waste in the system, and to make all sides increase their winning percentages in these kinds of deals.  So it is little surprise that there is a business opportunity for agencies that can align companies not only with properties but also individual strategies within properties that can deliver business to them.  These agencies may be small, relatively new companies that employ no more than a dozen people and concentrate on a handful of clients on each side.  They may be design firms which have now incorporated their own brand activation departments, because stadium activation has become such an important revenue stream that it needs to be built into the design process.  Or they may be established marketing and media agencies that have simply recognized the opportunity and increased resources in this area.

Though a handful of metaphorical predators have entered this ocean, it is still very much a blue ocean because so much of it is unexplored and undiscovered.  In the next few years, those who follow sports business and sports team sponsorships are going to hear a lot from the big fish who spout their triumphs, but they should know there will be plenty of other fish under the surface getting fat on all the opportunities that exist.

Other References

Lombardo, J. & Lefton, T. (2012, September 24). NBA clubs hire firms to help sell patches. Sports Business Journal, DOI: sportsbusinessdaily.com

Ourand, J. (2012, May 28). What's worked. Sports Business Journal, DOI: sportsbusinessdaily.com

Photos:
1. From Sportsnetworker.com
2. From Freshnessmag.com