Notes From a Business Plan Competition Part 2 – Cliff Ennico

During the afternoon session of last week’s Business Plan Competition sponsored by The Entrepreneurship Foundation (www.entrepreneurshipfoundation.org), the focus was on “personal businesses” (retail and service concepts that weren’t likely to grow beyond a local or regional market).  Here are my “judge’s notes” on some of the more interesting business plans that were presented at the event.
Plan # 7:  “Light Show” Projection Company. The Concept:  An event company that, using special projectors, projects promotional videos, light shows and other content onto walls and other large flat surfaces. What I Liked:  A business like this has very low startup costs, and the demand is certainly there (some of the “Occupy Wall Street” protests popularized this method of broadcasting their message to commuters in New York City). What I Didn’t Like:  Because of the low startup costs, anyone can get into this business.  The future of this business is the content:  developing proprietary images and producing customized videos for each event that could be licensed to other similar companies.  Hey, this is how the movie industry began in the late 1800s! Other Concerns:  Local zoning laws may prohibit this type of production without a license, which the company will need to obtain for its clients.  Also, I had a concern that images like this could be another source of distraction for already-multitasking drivers. Plan # 8:  Letterpress Design House. The Concept:  A letterpress printing firm creating wedding invitations, marketing brochures and other small-run items for people and companies looking to create a distinctive, high-quality image. What I Liked:  Letterpress is truly beautiful, and much preferable to mass-produced invitations. What I Didn’t Like:  Each order will be for only a small quantity (100 to 300 items on average), and will require unique press plates to be prepared.  This will be both labor- and cost-intensive, and there may be issues about who owns the intellectual property rights to the plates.   Plan # 9:  “Glow in the Dark” Gloves for Bicycle Riders. The Concept:  Gloves containing multi-colored LED lights for bicycle riders who want to give “turning signals” to drivers behind them. What I Liked:  High-end bicycle riders will pay just about anything for devices that will improve their safety on the road. What I Didn’t Like:  A number of competitors are already offering LED-lit jackets and other full-body riding wear that will probably be easier to see.  Also I had questions about whether or not the LED lights would be visible in broad daylight.  If I can’t see your arm making a turn signal, having your hand light up won’t help much. Plan # 10:  Decorative Flower Pots for Fence Posts. The Concept:  A flower pot that fits neatly over a fence post. What I Liked:  The concept has the potential to be a “line” of products instead of just a “one off”. What I Didn’t Like:  This is an item that would sell best in Wal-Mart, Lowe’s and Home Depot stores.  Raising the capital necessary to produce the thousands of pots that would be necessary to satisfy these stores’ huge inventory needs will be difficult.  Also, I couldn’t see anything patentable about the product, so it is sure to generate low-cost Asian competition. Plan # 11:  iPad Application for High School Athletes. The Concept:  An iPad “app” that enables high school athletes and their coaches to upload statistics and other performance data to a cloud-based database in “real time” as an athletic event is taking place. What I Liked:  There would be huge demand for this product, especially from high school athletic programs eager to publicize their athletes’ standing to potential college recruiters. What I Didn’t Like:  High school athletes may be somewhat prone to “inflating” their performance statistics, and the “app” didn’t seem to have a reliable method for correcting or changing data once posted to the “cloud”.  Also, I wasn’t clear what the company could do for an encore once every high school athletic department in the country had invested in this technology. Plan # 12:  “Healthy Snack” Vending Machines. The Concept:  Vending machines offering all-natural, organic and other “healthy” snacks at health clubs, gymnasiums, and school cafeterias. What I Liked:  The demand is definitely there, along with a large surplus of used vending machines that can be purchased and “repurposed” at relatively little cost. What I Didn’t Like:  Several companies in California have already rolled out such a program, making it imperative that this company “get big fast” and saturate those markets in the United States that haven’t already been penetrated.  Also, organic and all-natural snacks have a much shorter shelf life than their competitors, requiring more frequent restocking of the vending machines. Another Comment:  This type of business lends itself well to a “business opportunity” model, in which entrepreneurs purchase the vending machines and the snacks from the company but are responsible for “selling” and placing the machines in health clubs and other appropriate locations within a clearly-defined territory.  
Cliff Ennico (www.succeedinginyourbusiness.com), a leading expert on small business law and taxes, is the author of “Small Business Survival Guide,” “The eBay Seller’s Tax and Legal Answer Book” and 15 other books.

Notes From a Business Plan Competition Part 1 – by Cliff Ennico

Cliff EnnicoEach year the Entrepreneurship Foundation (www.entrepreneurshipfoundation.org) hosts a business plan competition in New Haven, Connecticut.

“Teams” from universities throughout New England submit business plans to the competition, and the 25 best are selected for an all-day “pitch” session to a three judge panel consisting of a venture capitalist, an angel investor, and (ahem) myself. I was privileged to judge the 14th annual Connecticut Business Plan Competition (as the event is called) last week.  I judge several business plan competitions throughout the country, and I find a lot of “teams” come up with similar ideas.  So, for those of you readers who are studying entrepreneurship and want to know how judges look at your team’s business plan, here are my handwritten notes on some of the ideas presented at last week’s competition. Plan # 1:  Online Dating Service.   The Concept:  a website that combines the two most common ways couples meet — finding potential partners online who are friends-of-friends. For a small monthly subscription fee, customers upload their Facebook profiles to the site, and people who think someone’s Facebook friend is “hot” can contact that someone for an introduction. What I Liked:  Online dating is too scary for most people, yet people are reluctant to “matchmake” online by recommending their friends to potential dating partners.  This is a “Goldilocks” solution that resolves both problems. What I Didn’t Like:  Too much competition from Match.com, eHarmony.com, and other sites.  Also, if a customer’s Facebook friend doesn’t want to make herself available for online dating, there is no way for the friend to “opt out” of the site’s database (other than “defriending” the customer). Plan # 2:  Skills Certification for Online Hiring: The Concept:  a website where people seeking specific jobs can take an online examination “certifying” them for particular job skills.  The results are published online, so employers seeking specific skills can see how a candidate scored on the examinations for those skills. What I Liked:  From an employer’s perspective, this is a great idea, as it helps them determine if someone claiming to have a particular skill actually has it. What I Didn’t Like:  Several competing sites already test candidates for proficiency in skills that can be quantified (such as knowledge of a particular computer programming language).  It will be difficult if not impossible to come up with an examination that effectively tests skills that cannot be quantified (for example, negotiating and other interpersonal skills). Plan # 3:  “Reviews” Website for Senior Caregivers. The Concept:  A website where senior citizens living at home and their families can rate their in-home caregivers and local caregiver agencies. What I Liked:  There’s a real need for a service like this. What I Didn’t Like:  There’s no way to determine if the reviews are fair or accurate.  Also, I wasn’t sure if anyone would be willing to pay for the service, meaning it would have to rely almost entirely upon advertising revenue. Plan # 4:  Attachment to Video Game Device. The Concept:  A laser attachment for the currently existing motion sensing technology for the Sony PlayStation 3 device called “The Move”. What I Liked:  Third party point of view (POV) videogamers are fanatics who will spend money on anything that will give them a competitive edge. What I Didn’t Like:  Because the attachment must be compatible with the device’s technology, Sony or the device manufacturer would probably have to “authorize” the attachment, and they will want money for that.  Also, nothing prevents Sony or the device’s manufacturer from developing a laser attachment on its own. Plan # 5:  “Parkour” Course.   The Concept:  The development of “parkour” courses, fabricated from abandoned buildings where enthusiasts practice high-risk stunts within safe environments (“parkour” is a gymnastic form of free-running originally designed for the French military, where people rush through urban obstacles as quickly as possible using abnormal movements). What I Liked:  Nobody in the United States is doing this (there are several courses in France and the U.K.). What I Didn’t Like:  “Parkour” is virtually unknown in the U.S., even among extreme sports enthusiasts, so the market size will be extremely small and may not sustain even a small course.  Also, because the nature of “parkour” is to deal with unexpected obstacles as they crop up, the course will need to be changed frequently, at significant expense, so that participants cannot “learn” the course too quickly. Plan # 6:  Device That Eliminates Loose Change. The Concept:  A debit card attachment that automatically deposits loose change into the customer’s account at the point of sale. What I Liked:  The device eliminates coins and encourages saving. What I Didn’t Like:  The customer would still receive bills in change so it’s not a perfect “cashless” solution.  Also, the customer would be required to present two cards at the point of sale instead of one, increasing the time necessary for the cashier to process each transaction.   More next week . . .

Cliff Ennico (www.succeedinginyourbusiness.com), a leading expert on small business law and taxes, is the author of “Small Business Survival Guide,” “The eBay Seller’s Tax and Legal Answer Book” and 15 other books.

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