Beth: When it comes to starting a business, there are different types of start ups. And as an entrepreneur, it’s important to understand what they are. To provide insight into the different types is Tim Berry, successful business owner, author and consultant. Tim is the founder of Palowellso Software which produces the nations leading business planning software, and he has given seminars on business planning for entrepreneurs in 15 countries on 4 continents, and he’s here with us today. Welcome to SBTV.com Tim. What are the different types of start ups?
Tim: What’s really important here Beth is that, that we recognized that they are. And I think the problem, beginning with say me as an expert and other experts, is we tend to, we tend to talk about start ups as, as if they’re all the same thing, but I could never list all the different types, but let’s do three. There’s the small service oriented, one person, graphic artist, landscape architect, gardener, or whatever as one, and I’ll go back to there. And then there’s medium restaurant, dry cleaner, retail store, and then there’s high end. And these are just examples, but to give you a range, high end as in high tech venture capital, high prestige. And I said I’d go back to them, what this one needs to start up is customers. It doesn’t take a lot of start up expense, they don’t need equipment, they don’t need packaging, many customers. I started a business planning business myself many years ago, and what I needed was my first client, my first job, right. In the middle, that sort of second type, think about a restaurant, a retail, whatever, we’re talking about several hundred thousand dollars by the time your locations, cooking, whatever, you know, whatever it is in the middle. And unless you’re wealthy, that means you need investors, but we’re not talking about major capital high tech, we’re talking about something that now a planning becomes much more important because other people have to prove the plan and there’s capital involved, and investment involved, so that’s the middle. And the third, of course there’s only, these are the elite, there’s like 5 or 6,000 businesses every year that get venture capital, out of 6 or 700,000 that starts. And they have to have track records, they have to have something really different and high tech, and they have to have that high growth and there’s a whole bunch of things, so. I find talking about three types is useful.
Beth: What kind of question should someone ask of themselves to determine what kind of start up they are?
Tim: There’s a nice way to start thinking about it, instead of big generalities and blue sky type stuff, start thinking with a list in your own mind of what checks you have to write to get this business started. And you’ll see, type one, computer website maybe or whatever it’s pretty cheap. Type two’s, suddenly you’ll start thinking about equipment, signage, location, fix up furniture, tadatadatadatada, then, with type three, you’re gonna start thinking about millions of dollars in many cases. Although web 2.0 these days is a few hundred thousands and Guy Kawasaki says, started tumors for 10,000, you know, I mean it’s different, but that’s a good way, and we can generalize on that. Which one are you? Well how much money do you need? What kind of investors do you need? And what kind of access do you have?
Beth: So for different types of start ups, are there different types of business plan?
Tim: Yes, there is a different type of business plan. The content ultimately, you notice I stopped a little bit, coz it’s hard, it’s hard, but the content ultimately is the same kind of core. Part of it is marketing and then steps and they all have to deal with cash flow, but the type one start up involve fewer people and frequently just one person. They wanna go through the same thing but the format might be different, because they may not have anybody else reading it. The type two and the type three are in both cases needing to get investment in, So, those investors want and deserve to have some where, where they can get pretty good details about who you are or what you planned to do? How much money you need? How are you gonna spend it? Those two have more of what we called the formal business plan, and all types, if they’re going to succeed, need to really have the core of the business plan.
Beth: Alright, Tim, thanks for joining us today. Be sure to visit www.timberry.com to learn more about Tim’s books, his works and to read his blog, and you can find more segments with Tim Berry in the Small Business Growth series here in SBTV.com, where small business is our only business.
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