Top Business Plan Mistakes
Is bank reform bad for start-ups? Fred Wilson thinks so. The VC blogs about two relatively obscure provisions in Senator Chris Dodd's bank reform bill that he thinks will be problematic for start-ups. One raises the minimum capital requirements to be a "qualified investor," and a second allows states to regulate investments. "I have no idea why either of these provisions ended up in a bill designed to regulate the banking industry," Wilson writes. "Entrepreneurs and startups don't use banks to finance them." He suggests de-regulating any investment up to $25,000. "Why does someone have to be a millionaire to invest in a friend's startup?" he asks. "[W]e should not be regulating angel investing."
How to win a business plan competition. For starters, don't pitch a company that relies solely on one product. That's the advice from Madi Ferencz, an entrepreneur, former Nestle executive, and longtime judge at the Wharton Business Plan Competition, who spoke with The New York Times's You're the Boss blog. Ferencz also warns entrepreneurs against "over-simplify their financials...assuming things will go according to plan and not presenting alternatives for a scenario where something goes wrong." For more tips on crafting your business plan, check out our comprehensive guide.
Bono: Good singer, lousy investor. U2 frontman Bono may have the Midas touch when it comes to making music, but as an investor he seems to be slightly off-key. Financial blog 24/7 Wall Street has dubbed him the "Worst Investor in America" for the almost ominous effect he has had on the companies he invests in. Through his investment fund, Elevation Partners, Bono has sunk money into smartphone maker, Palm, which has seen it's value drop thanks to competition from Apple and Google. He has also seen his investments in Forbes Inc. and Move.com flounder. Most recently, Bono invested $25 million in local review site Yelp, only to watch the company turn down a reported $500 million buyout from Google and then become the target of a number of class-action lawsuits from businesses who claim they were treated unfairly. While it might be cool to say you've met Bono, start-ups looking for funding may want to think twice before making a deal with him. (Via Gawker.)
The best ways to cut operating costs. You'd be hard-pressed to find a business today that isn't looking to trim its budget, but your workforce isn't always the first place to start. The Wall Street Journal has offered up a few tips, such as bringing on an in-house person for certain tasks in lieu of retaining entire agencies, and consolidating your workspace. "Not only will you save on real-estate costs but also utilities, cleaning services and other regular expenses," the post says, citing the example of an event management company that saved $5,000 a month by allowing the lease to expire on its second office. The writer goes on to suggest something we here at Inc. recently learned a thing or two about: abandoning the office altogether. "If you're a small enough operation, you might shave costs even more by moving to a home-based office," the post says. Also, don't be afraid to apply some of your own personal bargain-hunting strategies to the way you shop for your company, the article advises. When you research and compare product and service prices, you'll have a little more leverage when haggling with vendors.
How to grow as big and as fast as Mint.com. We've already outlined a few of the secrets behind the success of 30 Under 30 alum Aaron Patzer of Mint.com, but Business Insider has some pointers to add. They advise that if you want to grow big fast, you should have, among other things, a strong blog, a vibrant Facebook page, and kill er SEO. Of course, fast growth might not be ideal for your company. Consult our growth strategy guide to see.
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