Opportunities tend to shine the brightest during the worst times. But sometimes, the hard part isn’t identifying those opportunity’s, rather, it’s not letting the bad times keep you from pursuing them.

As a student with no job experience, it’s difficult for me to identify times where I have been tested with difficult circumstances. I haven’t had the chance to really face the fire and find a way to get through it. I have, however, been blessed with the opportunity to talk to people who have, and to get their advice on how they got through difficult times.

Bill Ogawa, or as he is better known, Battery Bill, is the owner of a battery selling operation in Mapunapuna (Oahu, Hawaii). He has been running his business for the better part of the last 30 years – pretty amazing, considering all he started out with was just $5,000 and an idea.

He has a battery for almost anything you could think of – cars, trucks, boats, camera’s, phones, camera phones, back up batteries … you get the picture. But he didn’t start out with all those types of batteries. His business grew from selling just a handful of different types of batteries to eventually filling the demand of customers throughout the entire state of Hawaii. So what were the keys to his successful career in entrepreneurship? I went to go see him in person to ask.

The day I came in to interview him,  was a busy one. It was 3 in the afternoon and he had customers coming in and out almost non-stop. He told me that we were going to do the interview on the fly, which meant that I would be asking him questions in between his time he spent helping his customers.

It was difficult at first. I started asking him about background information – how he got started, how long he had been in business for, etc. Our conversations would start, but then would have to be interrupted because of the endless stream of customers. After a while, Bill would come back and we would forget what we were talking about. I decided that if this was how we had to conduct the interview, I would not be able to get all the information I wanted, and decided to just get to the real questions that I wanted to ask. So I asked him:

“What is the best advice you would give someone who wanted to start their own business?”

Bill took a minute to think about the question and then gave me two very important pieces of advice that I know I will remember for a long time to come.

“Number one,” he said.

“Don’t say no too quickly,” double underlining each of those words.

The most important factor for his successful growth, he explained, was to listen to his customers. When they would come in and ask him if he had a certain type of battery, he would not say no too quickly and would do his best to find that type of battery to fill the demand.

His inventory diversification was purely market driven and it was the key to expanding his customer base.

The second piece of advice he gave me was a slightly more existential one.

“Number two, you gotta believe that nothing is impossible.” Immediately after, he wrote down the word “ATTITUDE” and underlined it with a passion.

“It’s all about attitude,” he said.

I was not quite sure what Bill meant by what he said so I asked him to elaborate.

Entrepreneurs, by nature, assume a lot more risk than people in other careers. When things go great, things really take off, but when things go bad, your ship will submarine faster than the Titanic. Just like everyone else who has had experience starting their own business, bad things can and do happen. Bill was no exception. But what helped him during those tough times more than anything else was his attitude.

When things would go wrong, Bill would make a conscious decision to not let the negative emotions consume him, and to instead direct that energy into concrete steps that moved him towards the future. It was his ability to turn his back on negative circumstances that were out of his control and to look forward to opportunities in the future that kept his business alive for 30 years.

It was this statement that I felt struck a chord with me. Everything I had seen and read about entrepreneurship talked about the importance of attitude — the bottomless well of optimism and hope that a person must have to deal with the risk and uncertainty of an entrepreneurial career.

We finished our discussion as customers continued to come through his door. Obviously, Bill was doing something right. I walked away hoping that, when I am no longer a student, and am hopefully running my own business, I’ll remember Bill’s advice and not let difficult times keep me from moving forward.

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1. Writing your own business plan can be intimidating…ask Bill

The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man.

- GEORGE BERNARD SHAW, Maxims for Revolutionists

I was nervous.

I had never conducted an interview before. I was not exactly sure which questions I was going to ask, and in which order I was going to ask them. All I knew was that I was graduating soon and, in the future, I wanted to be an entrepreneur. I wanted to have the opportunity to meet and learn from as many entrepreneurs as I could.

The first person I was going to interview was Jeannette Hereniko, the founding director of the Hawaii International Film Festival and creator of the website asiapacificfilms.com. I could not have been more excited.

Knowing that I wanted to make a good impression, I had to be prepared. I had done all the research a couple days before, prepared my list of questions and wrote a rough outline of how I wanted the interview to go. I even prepared my camera phone to record the audio so I would not miss a single word. I expected everything to go as I had planned.

About half way through the hour, thoroughly engaged in the conversation, I realized that I was not following my outline at all. On top of that, my phone’s auto-sleep function went off and stopped recording after only ten minutes. Not wanting to break the flow of conversation, I abandoned all my attempts to follow my outline, and did not bother with resetting my camera phone. I improvised the rest of the interview and adapted the questions to what I was most interested in asking at that moment. By the end of the hour, all I had were my hand-written notes and the satisfaction of meeting a distinguished local entrepreneur.

Almost nothing went the way I had planned yet I felt I gained much more value improvising than what I might have received had I tried to desperately stick to my prepared outline. When things went wrong, I chose to be flexible and adapted, while always keeping in mind why I was there – and that was to learn. Coincidentally, those were the same guiding principles Jeannette told me she had learned to follow throughout her own experience as an entrepreneur.

Jeannette Hereniko seems to embody the entrepreneurial spirit. She is a visionary who dreams big but also has the ability to take action and execute. When I asked her for the most important character traits that helped her get to where she is, she told me that you have to have passion, tenacity, perseverance and focus … but you must also be flexible and willing to adapt to change, while still staying true to your larger goals. In fact, her new venture, asiapacificfilms.com grew out of forward thinking and Jeannette’s ability to see the direction of the industry and her ability to adapt.

Jeannette served as the director of the Hawaii International Film Festival for 16 years with the vision of connecting film makers from around Asia and the Pacific to viewers in the West through hosting an annual film festival in Hawaii. Following the huge success and growth of HIFF, she chose to expand her original vision from just an Asia-Pacific focus to providing an outlet for under represented film makers from cultures around the world through the internet.

However, during this time, the internet had not developed the infrastructure needed to share such a high volume of video with such a large number of people in an efficient way. So, Jeannette invested much of her own capital into building an online database of films that would later become the basis for asiapacificfilms.com. Over the next couple years, with the development of the internet as a cheaper, further reaching distribution channel, she was able to adapt to the new market circumstances and share her database with subscribers worldwide.

Throughout the website’s initial stages of development, she received a lot of funding from governmental and non-governmental organizations. However, she soon realized she would need to start seeking outside funding in order to grow.

She started writing the business plan in 2007 and started pitching her ideas to local investors. She contacted the Hawaii Angels and was invited by them to make a 20 minute presentation. She had been writing and revising her business plan for 6-8 months previously multiple times. However, she was rejected by the angels on her first try. The angels offered to work with her for another 6 months to improve her planning and presentations. She presented a second time, and managed to secure a total of $300,000 of funding from angel investors on Oahu and Maui.

Today, Jeannette is in the process of finishing up presentations for a second round of funding from new venture capital firms.

The ability to envision new market trends and to adapt to new circumstances has been the key factor in allowing Jeannette to move forward into the new era of online media — with her dream of sharing stories with the world. Her journey as an entrepreneur was inspiring for me to hear in person.

At the end of the interview, all I walked away with were two-pages of barely coherent notes. The interview had gone off track, my camera phone did not get any usable audio and I was not sure whether or not I would be able to translate that experience into a single coherent message.

But sometimes – most of the time – things do not go according to plan. I realized that I had to work with what I had, and maybe, walk away with a valuable lesson in adaptation.

Jeannette Hereniko was awarded the Entrepreneur of the Year award in digital media for 2009 by the Hawaii Venture Capital Association.

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1. Writing your own business plan can be intimidating…ask Bill

Boy, was I wrong. My projects were repeatedly marked down. No body said to me that the reason for this was their lack of visual appeal, but the explanations that I got were not satisfying to me. Confident in my knowledge I knew that it had to be the fact that my documents were not very attractive looking, at best they were plane, most times they were plane ugly.

I learned quickly that professors are suckers for good looking papers. They are impressed by little pictures on the cover page, colorful graphs, beautiful pie charts and neatly organized and structured text.  So much so that I dare to say that sometimes it seems that this was more important to them in giving me a good grade than the actual content.

“Why do I care about this?”, you ask. Because the same is true for investors and anybody else who reads documents  of any kind, be it business plans, grand proposals, school papers, or a magazine. People are visual beings, in some areas men more then women, but when it comes to the look of  a business plan, women are just as attracted to good looking, easy to read, well organized business plans as are men.

Want my 2 cents?

Take the time to beautify your business plan, it will pay off. Here some points to consider when you take your business plan for a spa treatment:

• Make sure your cover page is attractive, by including your company logo, a picture or just writing the name of the company in a way that looks good. Click here to read on what information you should include on your ‘Cover Page’.
• Bullet points are my favorite. They help the readers easily find the main points that you would like to emphasize.
• Use of charts and graphs should be simple and easy to read.
• Font type and size changes should be limited and subtle.
• Make sure your plan prints well in black and white. Consider using shading and texture for graphs and charts.
• If you have many contributors developing the business plan, make sure you have one writing voice.
• Make sure a third party proofreads your business plan before you submit it anywhere.
• Support assumptions whenever possible.
• Always use positive word choices. Avoid “might”, “maybe”, “probably”,  etc.
• Don’t overstate and exaggerate.

Complete – No missing sections.

Clear – Concept of your product/service, its market, and business model are explained completely during the first read of the plan.

Credible – The plan makes ‘sense’.  No crazy revenue projections, outrageous market share claims, belief in a lack of any competition, etc.

Compelling – Draws the reader into the business concept the way a good novel draws in a reader.  The reader buys into your idea because your plan is convincing and your narrative is persuasive.

Customer Focused – Show you understand your customer and how you will relieve their pain.

Concern for Investor/Lender – Show how, and when, debt/equity is returned and return on investment (ROI) is developed.

I find the 6Cs incredibly useful and whenever I write a business plan I make sure that it covers all of them.

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1. Writing the Product/Services Section of Your Business Plan

I will repeat this again, as this is very important and could make or break a deal with an investor: The financial projections should be realistic and based upon the business plan findings.

The financial projections should cover these elements:

• Your company’s past financial statement (balance sheets, profit and loss statements, tax forms, funds applications) for up to three years. This is for an existing business.
• Key Assumptions – Interest rates, Accounts receivable, Firm tax status, payroll burden, GET status, Inventory levels, Working cash levels, etc.
• Use and source of initial capital – start-up expenses, capital purchases and working capital and assumed funding sources and their terms.
• Revenue projections
• Direct cost schedule
• Payroll expenses
• Operating expenses
• Projected income statement
• Projected cash flow statement
• Balance sheet projections
• Venture valuation – Net Present Value and Venture Valuation Method
• Project Evaluators – NPV, IRR and Break-Even Analysis

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1. Business Plan Checklist
2. Funding Options from Loan Sources
3. Executive Summary – What is the Critical Information that Investors are Looking for?

On the other hand it is also possible that as a start up company your management team  may not yet be complete. For example you may be lacking a competent CEO who has experience in starting new ventures and/or is an expert in the particular industry. If this is the case, you should acknowledge this gap in your management team section of your business plan and explain that a portion of the investor’s money will go towards attracting the most competent person to lead your company. This will show investors two things:

1. They will be impressed by the fact that you acknowledge your weaknesses and you are looking for alternatives to turn these weaknesses into strengths.
2. They will know that your ego will not stand in the way of your ability to change the direction of the business should things don’t go as planned and you will be open to new opportunities.

Many times the company’s founder may be the inventor of the product, or the technology and may not be particularly business savvy, but to my surprise, he/she still insists on managing the company on her own. This may work at beginning but if the venture is to grow, an experienced CEO is a must! This is especially true for high-growth companies, requiring a series of venture capital funding. I am always surprised by people  who are experts in one field but they believe that business just happens and not much experience or knowledge is needed. The truth is that business doesn’t just happen, it is created, and although a business degree is not necessarily a recipe for success, business experience is usually a good indicator. So if you don’t have the business knowledge, or the business experience, hire someone who does and focus your efforts on your your product/technology or whatever it is that you do best.

Pertinent information to include in the management portion of your business plan is:

• Venture management/expertise needs.
• Job descriptions for all key management employees.
• Eduction, experience, skills of the team.
• Acknowledge skills gaps and how you will overcome them – hire, contract, etc.
• Organizational chart.
• List any strategic alliances.
• Staffing plans and employment agreements.

The management plan must convince the investor that capable management team is in place and to show that your organization is set to meet the growth that you planned for.

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1. Gaps in your management team are not necessarily a turn off. Don’t let your ego stand in the way.

It was a young lady in her mid 20s, who was presenting a business on a quite complex topic – gene therapy. The business plan was about a new gene insertion method, which for a number of reasons was better than anything else currently available. If proven to work on humans, this new gene insertion method had the potential to cure a number of genetic disorders, such as diabetes, cancer, and other deadly diseases.

The presenter skillfully and convincingly explained why their product is better, what is the market pain and why other similar products are not able to achieve the same success rate, she wowed the audience with the great market potential and her professionally designed  PowerPoint presentation.  I am sure everyone was thinking, “what a great product”. But, I am also sure that everyone was a bit concerned about the fact that the lady presenting was fresh out of college with virtually no experience in starting and growing a company. Now, that may seem a bit judgmental but I have to agree with the investors; when it comes to investing  millions of dollars (in this case, the company needed $5 million in Round A funding), an investor has a right to be a bit judgmental.

The moment this young entrepreneur had the audience convinced that this business is worth investing in, was the moment she described the company’s management team. She was a small part of the management team, backed up by an experienced CEO who had a number of years of experience raising money, growing and selling successful companies, a CTO, who was also the inventor of the technology and who’s work was published in the most reputable scientific journals in addition to a couple of seasoned  genetic engineers and business individuals with numerous years of experience.

The combination of skills and expertise among the company’s management team was so impressive, that they might have as well sold potatoes, investors were still going to be convinced that this group of people would be able to make them money. In the case of this particular company they not only had a great management team but a promising product, which is a good indicator for success.

But why did investors put so much emphasis on the management team? Well investors regard the management team of a start-up company as its greatest asset for two reasons:

1. Investors know that in case the technology, the product, or service, turn out not be as well accepted as projected, or the economic conditions change and are not that favorable anymore, a savvy management team will be able to find or create new opportunities, which minimizes the risk for their investment.
2. Statistics show that most businesses fail in the first five years either because of ineffective management or insufficient capital.

In the history of great companies often there was no management team in the beginning. For example Microsoft was run for years by its founder Bill Gates who had no experience managing companies. So how did these guys do it? How were they able to convince investors that they will be successful? The answer is: they were willing to give up control.

Investors realize that when a start-up is scrambling for money it is often times difficult to attract an experienced CEO who has years of experience. Thus, if you are lacking some key members in your management team, don’t panic. As long as you acknowledge in your business plan that there are gaps in the management team and that a portion of the investor’s money will go into attracting and building a strong team, investors will still consider investing, given that all the other pieces of your business plan puzzle are in place.

I have worked with many inventors of great technologies manly coming out of the university and I repeatedly have come across a mistake that many of them make – they know a lot about their technology, they know nothing about business, but they don’t want to give up any of the control and insist on managing and growing their company alone. On the contrary of the common believe, investors are not risk takers, investors are always looking for ways to minimize their risk and unexperienced CEO raises a red flag immediately.

It is sad how many great business ideas never come to live because someone’s ego stands in the way.

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1. Management Team

Bill was completely intimidated by the thought of writing even a few sentences about his business concept, but given the chance, he could talk about it for hours.  His thoughts were racing and he was jumping from one idea to the next confusing not only me but himself.  Most times after Bill would tell me with excited and somewhat convincing voice about all of his ideas on approaching his customers, having a marketing campaign, and making millions of bucks overnight I would bring him back to earth by asking him a simple question such as “Bill, so who would you say will be your customer?”. Eighty percent of the time Bill would either not have an answer to my question or his answer would not be complete or backed up by any hard data.  I realized that as a business consultant many things seemed very simple to me, but to Bill, just trying to figure out what industry he is in, was a real challenge.

I met with him every day for an hour and we went over the outline of his plan, business terminology, information that he should include and also things that he should avoid.  I prepared a business plan checklist for him with questions that he needed to answer before he actually started writing his plan in order to put his thoughts in some order, learn the ins and outs of the industry he was in and his competitors, understand the importance of having a clearly defined target market, put some logic behind his financial projections by backing his numbers with an extensive market research, and many other questions which would help him understand his business better.

I have to admit, working with Bill wasn’t easy. He is a software guy, he had just come up with a great technology and all he wanted to do was talk about his technology. But, here I was, asking him what to him seemed like questions of secondary importance such as “What are your marketing objectives?”, “What is the current industry business model?”, or “What is your technology’s competitive advantages?”. Bill was so frustrated with all of my questions that he probably felt that I was trying to shoot his business idea down. He even told me that he feels that I am putting so much weight on things such as industry growth, competitors, business model, customers buying habits, that I am diminishing the importance of his technology and that we have written only one short paragraph describing it, when to him this should be the focal point of his plan.

He was convinced that if he told investors about all the details involved in the development of the technology and how it works they will be trowing their money at him. What he didn’t understand is that although investors are impressed with a good technology, or a product, or  a service, what they care the most about is the answer to the question: “How is your brilliant technology going to make me richer?”. As a consultant, convincing Bill of this fact was my most difficult task. I did not to take it personally as I knew from experience that if he wanted to be successful just having a good technology, product, or service is not enough, he needed to learn about his business from every angle.

In the end Bill was able to finish his plan and I am happy to report that  he is off to the next phase – presenting his business plan to potential investors. Although Bill didn’t particularly enjoy writing his business plan, he admitted to me that in the process he has learned essential things about his business that he never even thought about before. He also understood why the business plan should be viewed as a living document which needs to be updated constantly. I promised Bill I will help him polish his presentation. I realize that we have a long way to go and I hope in the end Bill will not only get the funding that he needs but that him and I will stay friends.

Being a business consultant is not always easy…I have worked with many Bills who were completely convinced that there is no way that they too can write a business plan.  I like to challenge my clients with many questions not because I want to put them down but because I know that once they are in front of the investors they will be challenged to the max and cannot afford not to be prepared. Writing your own business plan may seem impossible to you now, but with a little guidance, you too, just like Bill could be well on your way to impressing investors. Check my articles from the series “Writing a Business Plan – A Step by Step Guide”.

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1. Writing the Product/Services Section of Your Business Plan

If you always think the way you’ve always thought, you will always feel the way you have always felt.

If you always feel the way you’ve always felt, you will always do what you’ve always done.

If you always do what you’ve always done, you will always get what you’ve always gotten.

If there is no change

There is no change”.

Unknown

I always thought of myself as an adventurous person, a person who seeks new experiences and  lives by the motto that CHANGE is not only good but is the spice of life. I have lived in five different countries, I have switched four different high schools and each was taught in a different language, I have changed homes, friends, jobs, and lifestyles and I have been able to adapt and survive. Yet, I am attached to my 12 year old green VW Cabrio, (which by the way is falling apart) and I don’t want to look for a new car, I have favorite restaurants where I aways order the same thing, I live in an overpriced rental apartment but I am terrified to move to a cheaper place which will provide me with a similar comfort.

Why?

What I have come to realize is that although CHANGE may be good it is not always painless. Some might enjoy change and I admire them because in general these people have an easier time meeting live’s different challenges, but I am not one of them. However because I know that CHANGE is necessary, I do force my self to undertake new directions because I know that “if there is no change, there is no change”.

Due to my own struggle with change I was thinking about some of the things that would motivate me to undertake change with more ease at the work place and how in term I would motivate my subordinates. Of course since I am my own boss and I have no subordinates (besides my husband and my dog ) it is all hypothetical, nevertheless I firmly believe that adopting an attitude  of change will help any manager achieve better organizational moral and improved bottom line: Here is what I have come up with:

As a manager I will establish a variety of channels of communication so that my subordinates feel comfortable to come with their comments, concerns, and new ideas, anytime. I will involve them in the process of change. I will educate them and communicate to them the need for change and the steps that we need to take. I will use empathy and I will go above and beyond in assisting my subordinates into a smoother transition of their new roles. I will reinforce the change by continuously communicating. I will focus my efforts on allowing my subordinates to develop their potentials and talents. I will reward them not only through monetary compensations, but also by always providing them with feed back and always recognizing and acknowledging their efforts. I will encourage open communication and face to face discussions of new ideas about the strategy and operations of the company.

I will strive to be a good leader.  I would like to be passionate and knowledgeable, demanding but fair. I want to be able to have a strong vision and to communicate it clearly to my subordinates. I would like to exemplify hard work, I will set high but attainable goals. I would like to inspire my subordinated to take charge. I will strive to know my subordinates on one on one basis so that I can nurture their strengths and help improve their weakness. I have know that honesty and integrity are the most valuable qualities in a leader and I will support open communication based on these qualities. I would listen to my subordinates, because I have know the importance of seeing things from the other person’s point of view. While I would expect my team to be devoted to the company and work hard I will set a time to rest, by acknowledging every team member’s birthday, and special events.

When it comes to business, the ability to CHANGE is what sets a successful business from a failing business. In today’s complex business environment organizations must always search new and improved ways of operating. The drive for efficiency, competitive advantage, and shareholder value forces managers to challenge the validity of old practices. Change is at the core of every organization and is the most important quality of a successful management team.

When managing change, mangers need to understand that the key to organizational success lies within the people involved. Creating the right environment by unlocking the potential of the organization’s employees is of key importance for organizational effectiveness.

The questions start popping in my head: ‘Hmmm, I can find some manufacturing facility in China to manufacture my mopeds, but how? and then how will I get the mopeds to port?, how much would it cost to  transport them?, what about taxes and fees?, where will I store them?, how will I sell them?’ and on and on. If I wrote a business plan about selling ultra comfy hybrid mopeds, the answers to theses questions will go into the Operations Plan – section of my business plan. However at this point my business ideas usually die. But, yours, don’t have to. This article aims to explain to you what is an Operations Plan, what information should be included in the Operations Plan, and why it is important.

How will you run your business?

From my experience as I consultant and a business plan reviewer I am amazed to see how many entrepreneurs put so much emphasis on all the other sections of their business plan(which is a good thing) but lack to adequately explain how exactly they are planning to run their business.  This is where the operations plan comes into place – it’s  goal is to tell the readers what are the physical necessities for your business to be successful, such as facilities, offices, manufacturing, suppliers, etc. You need to carefully think of the nuts and bolts of your operations plan and describe them in as much detail as possible if you will be using the document for the company’s internal use. But If you will be using your business plan to get funding for your business it is important that you don’t boar your readers with all the nitty-gritty details, rather convince them that you have a good grasp of the big picture and you have a carefully thought out plan of how you will run your business.

What should the Operations Plan cover?

Some possible questions to answer in your operations plan, include:

• Production plan – where, how, and all the details that go with it
• Patent protection or other means of intellectual property protection if applicable
• Organizational structure – who is doing what in the company
• Who will be your suppliers and vendors
• Distribution channels – how will you get the product to your customers
• Manufacturing requirements, such as facilities, equipment, outsourcing, licensing, etc.
• Inventory – How will you handle inventory, where will you store inventory
• Schedule of key activities

Of course depending on the nature of your business the complexity of your operations plan will be different and not all of the above questions will apply or you may need to think of questions that are not listed above. For example if you are planning to manufacture your own brand of mopeds you will have to think of suppliers and vendors for moped parts, manufacturing facilities, machines, workers, laws and regulations, and I am sure much more information which is way beyond me. If you are importing the mopeds then your operations plan will be completely different, then you will need to think of import issues, transportation, taxes, etc. I am sure you get the point. No matter what your business is, investors and business plan reviewers put much emphasis on the operations plan and a poorly written operations plan could definitely be a deal breaker.

Why is the operations plan so important?

As you see from my confessions about my own creative mind that comes up with business ideas for the sake of daydreaming I can very convincingly tell you why in theory selling comfy hybrid mopeds at a very low price might be a good business. But the fact is that I have no idea how I will  run my business and how I will get my product out of the productions stage to my customers. This, right away will give red flags to my potential investors. In fact they will not even read my business plan any further.  Of coarse the picture that I described is a bit exaggerated and I am sure that you have a much better idea of how you will run your business.  The Operations Plan is very important because the investors want to see how you will translate theory into reality. Investors are known to be risk takers, however they don’t chase after risk, on the contrary they want to take as little risk as possible and knowing that you have done your homework and you have a well thought out and realistic operations plan shows investors that you too are working on mitigating their risk.