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To Plan Or Not To Plan

Professor with the University of Missouri, College of Business

A few weeks ago I took 14 enthusiastic college students to the annual Collegiate Entrepreneurs Organization’s annual conference and elevator-pitch competition in Chicago.  What an experience!

I have attended the last five years but this year was especially interesting…and troubling.  First, I take students to see the pitch competition.  According to C-E-O.org, The CEO Elevator Pitch Competition presents students with a great opportunity to pitch their business idea to a panel of judges and a chance to win cash prizes. Elevator pitch is a frequently used term, which literally means “tell me about your business within the time that it would take to ride up an elevator.” Presenting yourself effectively is an essential tool in the business arena. A well-planned elevator pitch can open the doors to success in your future endeavors. The ideas pitched may be at any stage of development from creation of concepts or ideas to an established business.

Each year, several students from the University of Missouri – Columbia, and specifically, the Flegel Academy for Aspiring Entrepreneurs attend and compete.  These are students who might simply have a venture idea, or who might have already started a business.

A large part of the conference is devoted to plenary speakers such as:

  • Omar Soliman, founder of College Hunks Hauling Junk, is a published author, entrepreneur and TV personality. College Hunks Hauling Junk is on the INC 500 list of fastest growing companies in the nation. Omar was named Top 30 Entrepreneurs in America Under 30 by INC Magazine and is an Ernst and Young Entrepreneur of the Year Award Finalist.
  • Cary Chessick, president and CEO of Restaurant.com. Named Ernst & Young’s 2010 Midwest Entrepreneur of the Year. Cary grew Restaurant.com over the past decade to become the trusted and valued source connecting restaurants and diners nationwide.
  • Marshall Haas, founder of AllRendered.  By outsourcing production of his company’s core service, architectural renderings, to artists and architects located in the Philippines he was able to startup with almost no funding.
  • Jimmy John Liautaud, owner of Jimmy John’s Gourmet Sandwiches.  Jimmy has grown his company from a one-person operation to now more than 1000 stores in 39 states. Liautaud opened his first restaurant in Charleston, Illinois, when he was 19 years old and promoted his sandwich stand by giving away free food to college students at nearby Eastern Illinois University.
  • Dr. Demirjian, President, CEO and founder of zuChem, Inc – a Midwest-based biotechnology Company that develops innovative carbohydrate products for human health and nutrition. He is a previous winner of the Research Director’s Association of Chicago “Entrepreneur of the Year Award” and recipient of the U.S. SBA “Tibbets Award” for successful commercialization of technology developed under the Federal SBIR grant program.

  • Troy Henikoff, Excelerate.  Troy gave the students an overview of how a VC firm works, what they are looking for and how VC financing differs from other types of financing, highlighting the costs and benefits of taking this route.  Troy is a seasoned entrepreneur who has built multiple successful technology-based businesses from the ground-up over a 20+ year period. He has financed these businesses with everything from bootstrapping his first business to raising $17 Million in Venture Capital for SurePayroll. Most recently Troy was a co-founder of Excelerate in Chicago, a 13 week boot camp for early stage ventures.

  • Edward Domain, Flyover Geeks .  Drawing on his mistakes in a previous business startup and his success in his current one, Edward Domain will offer advice on what it takes to successfully get a new economy business off the ground as well as pitfalls to avoid.  Edward is the founder of FlyoverGeeks.com and an entrepreneur. Flyover Geeks is the Midwest’s answer to TechCrunch and since launch has been quoted in the Chicago Tribune, The India Times, and Inc. Magazine.

Such a diversified, yet successful, group of young speakers is an inspirational experience for the 20-something college entrepreneur.  However, and that is a BIG however, some of these speakers completely discounted the notion of the business planning process.  In their energetic manner, many were just trying to engage students in entrepreneurship by getting them to just get started…just do it!

It makes me cringe to hear successful entrepreneurs teaching others to ignore the planning process.  They are ignoring the gazillion (unsuccessful) entrepreneurs who just did it with no plan…and wasted time and money in the process.  While I don’t believe that every aspect of the business needs to be documented in a lengthy business plan neither you, nor investors, will ever read, I do believe that it is imperative to research some key aspects of the business venture you are considering.  For example, who is your target market?  Who is your competition?  What will you provide, in terms of product or service that others aren’t?  How will you monetize the venture?  How much money will it take?  When will you actually make a profit?  Where should you locate?  What skills do you have to make this a success?  What skills do you lack…where you may need to involve others to supplement your skills?

The business plan organizes the thought process into a coherent structure as some of these critical questions get answered.  To ignore the process…to ignore the practical nature of understanding what you are getting into… doesn’t give anyone the confidence they need to be successful.  Can you successfully ignore the business planning process?  I suppose.  Some of these speakers had.  But the list of speakers who failed because they didn’t plan would take a year-long conference to present their mistakes.  That would be a depressing conference to attend.

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