Business Planning for College Students and First-Time Entrepreneurs

More and more students, both in undergraduate and graduate institutions, are deciding to launch their own ventures upon graduation rather than taking the traditional route of working for another firm. Likewise, more and more individuals are leaving their jobs to fulfill their entrepreneurial dreams.

While these ventures may ultimately be very successful (e.g., Google and Microsoft were both launched by students), they face certain challenges in their business plans and capital raising processes. The foremost challenge is overcoming the lack of experience of the management team. A classis chicken-and-egg problem presents itself ? the management team has no past company successes to point to, and can't prove itself unless given the opportunity to launch the business. While this problem is nearly always the case for graduating students, it also presents itself to many entrepreneurs, particularly those who are launching their first ventures.

To overcome this challenge, these ventures must represent themselves as having a great team by attracting a stellar management team and/or advisors. By attracting a quality management team, even if the team will not start until after financing, it gives investors that confidence that the plan will be properly executed. It also proves that the entrepreneurs have the ability to "sell" others on their vision. The management team need not be complete before seeking capital, since additional members will most likely be added after capital is raised. For instance, shortly after Google raised capital from Sequoia Capital and Kleiner Perkins Caufield & Byers, Omid Kordestani left Netscape to accept a position as vice president of business development and sales, and Urs Hölzle was hired away from UC Santa Barbara as vice president of engineering.

Attracting high-quality advisors builds great credibility since if respected individuals are willing to risk their reputations by taking an advisory position, the venture must have some merit. Advisors can also help with the execution of the business and sometimes will also provide the needed capital. In Google's case, when no major portal was interested in partnering with or funding the company, Larry Page and Sergey Brin were able to convince Andy Bechtolsheim, one of the founders of Sun Microsystems, to become an advisor and investor. Bechtolsheim contributed the initial $100,000 to the company.

Even if the venture is able to attract quality management teams and advisors, it will always be at a disadvantage versus other ventures headed by entrepreneurs who have "been there, done that" successfully in the past. To compensate for this, these ventures must really know their customers, know their market and know their competition. By possessing an in depth knowledge of the external factors that will effect the company's success, the entrepreneurs can both create a solid business strategy and convince investors that an opportunity really exists. If the opportunity truly exists, then investors know that even if the venture is initially mismanaged, then they can hire additional managers later to put it back on course.

In summary, when students or first time entrepreneurs, begin developing their business strategies and plans, they must compensate for the management deficiencies they possess versus established entrepreneurs. By doing this and showing a comprehensive knowledge of their market, these ventures can level the capital raising playing field. Fortunately, these ventures can point to a long list of other successful companies which were launched by students and/or first time entrepreneurs, most notably Google and Microsoft.

As President of Growthink Business Plans, Dave Lavinsky has helped the company become one of the premier business plan development firms. Since its inception, Growthink has developed over 200 business plans. Growthink clients have collectively raised over $750 million in financing, launched numerous new product and service lines and gained competitive advantage and market share.

Related News

Maverick, not Marx - Daily Press Maverick, not Marx Daily Press, VA -Oct 5, 2008 ... of dollars from successful business owners to redistribute wealth will reshape our society from one of entrepreneurialism to revolutionary socialism. ... Toward a new Mayfair - Ottawa Citizen Toward a new Mayfair Ottawa Citizen,  Canada -Sep 29, 2008 The critics of the theatre's closing say the theatre just needs a bit of entrepreneurialism and maybe some expansion of its use to become financially viable ... New Enterprise HQ launch is marked - Shropshire Star Shropshire Star New Enterprise HQ launch is marked Shropshire Star, UK -Sep 29, 2008 The tone of the summit day was about entrepreneurialism, specifically home entrepreneurialism, because in these challenging times, do we really want to be ... AgentShield.com selected as Finalist for ITFlorida's Innovation ... - PR Web (press release) AgentShield.com selected as Finalist for ITFlorida's Innovation ... PR Web (press release), WA -Oct 4, 2008 Agent Shield, Inc. has been recognized as one of only four finalist statewide for the "Innovation and Entrepreneurialism Award" in the annual ITFlorida ... Where to offshore (and why not here?) - Computing Where to offshore (and why not here?) Computing, UK -14 hours ago Perhaps the global downturn may actually encourage more regional talent and entrepreneurialism in countries like the UK, where the conventional wisdom has ... Middle ground fertile for NDP - The Province Queen's Journal Middle ground fertile for NDP The Province, Canada -Oct 6, 2008 ... supported by organized big labour and linked to the party's inherent hatred of big business, corporate profits and the spirit of entrepreneurialism. ... Rick Downes: Working for the common goodQueen's Journal all 2 news articles Self-confidence is key factor in business success - BCLocalNews Self-confidence is key factor in business success BCLocalNews, Canada -Oct 3, 2008 A lot about entrepreneurialism has to do with introspection. This involves taking a good hard look at ourselves and learning about how we operate, ... Regional Economic Summit Announced - MarketWatch Regional Economic Summit Announced MarketWatch -Oct 6, 2008 Attendees will have the opportunity during the two-day summit to participate in general and break-out sessions dealing with entrepreneurialism, ... bbg allies with arab business angels network - Al-Bawaba bbg allies with arab business angels network Al-Bawaba, Jordan -Sep 27, 2008 “Through our alliance with ABAN, we continue to support the growth of entrepreneurialism, innovation and local knowledge creation. ... Sarkozy calls for global crisis summit - Financial Times Sarkozy calls for global crisis summit Financial Times, UK -Sep 29, 2008 ... but he has spoken several times of the need to encourage productive entrepreneurialism and to deter destructive “financial speculationâ€�. ...