Akira Hirai is the founder and CEO of Cayenne Consulting, a firm that helps entrepreneurs tell their stories to investors and bankers through compelling business plans, pitch decks, and financial forecasts.
Before starting Cayenne in 2001, Akira was the founder of two Silicon Valley Internet companies. Previously, Akira held various management positions at Salomon Brothers, a New York investment bank.
At other points in his career, he has also worked in financial risk management; software engineering; sales management; and advertising and graphic design. Akira earned his B.A. in Engineering Sciences at Harvard University.
Learn more at www.caycon.com.
How to Create a Killer Business Plan
The foundation of every successful business is a solid business plan. Akira Hirai, founder of Cayenne Consulting, knows about business planning. He’s an entrepreneur who founded two Silicon Valley Internet companies at the height of the dot-com bubble.
The first step is to determine whether or not your idea has commercial potential.
“The best way to do this is to build a prototype and get feedback from potential customers as quickly as you can. It’s likely that you’ll need to iteratively make changes based on customer feedback. This is one of the central ideas championed by Eric Ries in his book The Lean Startup,” Akira says.
The next step is to determine a viable business model. You need to figure out a scalable mix of resources, processes, competitive advantages, and value propositions that form the basis of your company.
Akira says that Alexander Osterwalder created an excellent framework for doing this called Business Model Generation. This is the conceptual foundation of your business plan. Committing it to paper is the easy part.
Akira wrote an article several years ago called Why Business Plans Don’t Get Funded. It describes dozens of common business planning mistakes, from content issues to financial model problems to matters of style. “But an even bigger mistake than anything mentioned in that article is the misguided belief that a great business plan is the only thing standing between them and investment dollars,” he says.
Entrepreneurs forget that investors don’t invest in business plans – they invest in businesses, Akira says.
Family and close friends may be willing to invest in an idea, but other investors need to see some proof that you have what it takes to turn an idea into a business, and according to Akira, that’s a strong management team, a functional prototype, or better yet, some paying customers.
“A great business with a crappy business plan is more likely to get funded than a great idea with a great business plan. So focus first on building the business,” he advises.
We tell readers here on the blog and in our knowledge center that proper planning is a key element of business success, but as we learned from Akira, a successful plan needs to be based on a successful business model. Thanks for the excellent advice, Akira, and for taking the time to talk with us.