A business planning exercise as a model for success

May 10, 2010

As someone who teaches entrepreneurship in The Sam M. Walton College of Business at the University of Arkansas, one of my responsibilities is to mentor students who enter business plan competitions. In these competitions, students cook up a plan for a hypothetical new venture that is then judged by several different panels of experts— including bankers, entrepreneurs, and senior managers from a wide variety of industries. Most recently, I had three teams competing in the Donald L. Reynolds Governor’s Cup here in Arkansas. Out of 59 teams submitting, two of my teams made it to the shortlist of 12 invited to present in Little Rock, and my other team made it to the final five in the agriculture-related business track, where they also got to present their plan live in Little Rock. My two teams on the shortlist made it to a final shortlist of six and made their presentations a second time to a new panel of judges. And recently, we all returned to Little Rock for the results. One of my teams, Hydrosym Farms won the agricultural prize of $5,000, and another of my teams, Arkansas Auto Fluff, won first place overall, and cash prizes of $21,000. Arkansas Auto Fluff is now heading to Las Vegas to present its plan once again in a Tri-state competition where they could win up to another $27,000 in cash. Before I go further, I need to tell you about their venture. Arkansas Auto Fluff’s plan involves recycling the plastic that comes from “end of life” vehicles (i.e., junked cars). Plastic makes up about 20% of a junked vehicle and currently, most of it is simply shredded and placed in a landfill. Arkansas Auto Fluff will save shredders on average $100K per year, while at the same time creating several useful re-grind products that can be used to make new plastic parts that can be put right back into new vehicles, as well as other products. The venture would save money, clean up the environment, and conserve natural resources, and at the same time create a business that grows like a weed, makes a good profit, and has significant enterprise value. It’s a true “win-win” all around! Needless to say, these young people (three men and one woman, 21-22 years old) are feeling pretty good right now! And they should be— they created something from nothing and were able to impress more than a couple dozen real businesspeople with their thinking. Not only do they win the money and have the satisfaction of victory, they now have an honest, well-thought-out opportunity in front of them to actually start this business. And, if they do decide to get jobs after graduating vs. doing their own thing, they have something meaningful to put on their resumes that will differentiate them from everyone else. When I look at what makes this team successful, it is clearly three things: They work well together as a team. Each of the four members had a clearly defined role and place to fill in the organization. And they all communicated continuously with each other, as well as respected each other’s contributions. There was no one glory-seeker who had to be successful at the expense of the others. They were extremely receptive to outside input. They listened to potential clients and suppliers and incorporated their feedback into the plan. Every suggestion I made to them was followed, and every comment or suggestion made by the judges was taken seriously without team members getting defensive. You can’t beat that kind of attitude if you want to win in this type of competition. They worked hard! They burned the midnight oil to work out all the kinks, refine their financials, and polish their presentation. You cannot help but win when you have the discipline to put in the effort that it really takes to shine above all others. There is no doubt in my mind that these students will be successful in whatever they pursue. I think there are lessons for all of us in how important teamwork, openness to criticism, and hard work really are if you want to do anything worthwhile. Our businesses all need more of these three things IF we really want to succeed in the world we live in today. Originally published 5/10/2010

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Zweig Group, a four-time Inc. 500/5000 honoree, is the premiere authority in AEC management consulting, the go-to source for industry research, and the leading provider of customized learning and training. Zweig Group specializes in four core consulting areas: Talent, Performance, Growth, and Transition, including innovative solutions in mergers and acquisitions, strategic planning, financial management, ownership transition, executive search, business development, valuation, and more. Zweig Group exists to help AEC firms succeed in a competitive marketplace. The firm has offices in Dallas and Fayetteville, Arkansas.