If you’re the leader of an SME, how should you react when a young manager approaches you with an intriguing concept for a new venture within your company?
Many product-oriented leaders of new ventures only hope to gradually receive enough funding to continue the development of their products. That's how inventors think. Inventors focus too much on the product and not enough on funding and the marketplace.
A new venture will actually be relegated to selling in very low volume until it is fully funded, gets into volume production and expands its marketing. The key is the funding. Experienced entrepreneurs know that.
A part of the new-venture leader’s mind should function like that of a professional sales director who is in charge of signing up equity buyers. If you are one, you'll have instant answers to these questions.
I'm a consultant to Voga Coffee, a new venture in the Bay Area. We're working together on the business plan and a five-year pro forma that will form the basis of a $1 million equity offering.
Although it's hard to find a new venture that's perfect, Voga comes close, in at least six different ways.
(1) Voga's founders are smart and experienced. They're human, so they have weak areas, but to offset what they don't know, (2) they've surrounded themselves with a half-dozen terrific advisors.
Three legacy companies dominate the arena they're entering (batch-type commercial-size coffee brewers). Voga's key (3) "unfair marketing advantage" is a large one; Ground ControlTM, a brewing system that enables coffee bars to reduce consumption of ground coffee by 30%. That is a huge savings.
(4) Three pre-production prototypes are already being field tested at reputable food service operations and Voga has applied for (5) significant and well-written patents designed to hamstring their legacy competitors. And there's one more thing: the Voga team has (6) first-rate connects to angel investors.
It's a pleasure to interact with a client like Voga. The rewards come every day to me, and their other advisors, in ways both big and small.
I'm doing a full business plan and a complete 5-year forecast for the brilliant-but-really-busy founders of Voga Coffee, an emerging manufacturing company based in the Bay Area. The company’s line of Ground ControlTM commercial-size batch-coffee brewers appears to me to be the right solution to major problems in the brewed-coffee trade.
Ground ControlTM was introduced at this year’s SCAA conference. Pre-production prototypes are now operating at three busy coffee bars in California.
Start-up business consultants love entrepreneur-clients like Voga. When the client is savvy, organized and receptive, the consultant’s work becomes twice as effective and the planning process moves along quickly.
On the other hand, when the entrepreneur is inexperienced, disorganized and ego-centric, the consultant is forced into remedial mode, to enable the client to provide the information that the consultant needs and to build appreciation for the benefits of being receptive to new ideas. It’s still worthwhile relationship, but progress is slower.
Both types of entrepreneurs get very real value from working with consultants and both types make quantum leaps forward; the savvy, organized, receptive entrepreneur gets the best value.
4 coffee roasting plants and 13 coffee bars in 60 minutes?! I did exactly that on foot this afternoon in Seattle, guiding BBC Radio journalists Sarah Treanor and Edwin Lane. During our walk, they managed to do a recorded interview with me about the early years of Starbucks and current developments in coffee and entrepreneurship. This was the second time this year that I've served as a resource to BBC Radio.