NEXTSEED BLOG

Business Plans 101

What is it? 

Suppose you have a great idea for a new type of high-end frozen yogurt shop and want to start putting pen to paper – where do you begin? For starters, you will need to create a formal business plan. A business plan is a document that consolidates all the planning and research that you’ve done to open a new business or expand an existing business.

Why does it exist? 

Business plans are a tool to help an entrepreneur or business communicate the aspects related to a new venture in a consolidated and efficient manner. The audience for a business plan can be varied, but it is often used as a preliminary review by lenders and investors in order to better understand the proposed business model and relevant details.

 So how do I write a business plan? 

Although a business plan is not a strictly defined document (i.e. there is no one way to write it), including certain fundamental topics will help the reader understand your business. Using our frozen yogurt example from earlier, some of the questions that might come to mind include: 

  • Who are the people trying to start this new frozen yogurt shop? 
  • Why do they believe this business will succeed? 
  • Do they have experience running businesses like this in the past? 
  • What factors would support the business to be successful? 
  • What factors might prevent the business from being successful? 

As you can imagine, this line of questioning can go on indefinitely and one way to structure a plan is to think through the types of questions that may be asked so you can aggregate your content to address them in sections. We’ve outlined some of the more common sections of a business plan below.  

  Example Sections of a Business Plan: 

  1. Overview of Business Model – How does the frozen yogurt shop plan to make money? What differentiates it from other current dessert shops? Does it have revenue streams besides selling frozen yogurt? What are some of the unique sales and marketing tactics that will drive these revenue streams? 
  2. Market Research – Who are your key customers? What is this target market size and why is your frozen yogurt going to appeal to them? Are there direct competitors (i.e. other high-end yogurt shops) or indirect competitors (i.e. other dessert shops) nearby? Has the market for frozen desserts been growing recently or is has it actually experienced some rough patches?
  3. Team Structure – Who are the people on your team that will be supporting you on this journey? Do you have the right mixture of background, experience and skill sets to make this business successful? 
  4. Breakdown of Funding Usage – How much capital do you estimate is required in order to start this business? What are the current sources of capital that is being contributed in order to support this venture (e.g., cash from partners, other loans)?
  5. Implementation Timeline – What are the key milestones related to your venture (e.g., build-out of a brick & mortar location, opening date, revenue goals) and how long does it take before you plan to achieve them? 
  6. Key Risks & Assumptions – What are the things that may cause your venture to experience difficulties? Are there any major assumptions you’re making about market share / expected customer base during the implementation timeline that are worth calling out?  
  7. Financial Forecasts – Based on all the research you’ve done and the assumptions you’ve made, how is this reflected in terms of projected annual performance?  

Formatting the Business Plan 

A good business plan is often dictated by the substance of the report (i.e. how thorough is the research, how much background is provided, how valid are some of the growth assumptions), however there’s also a little bit of style at play. The inclusion of graphical references such as concept of design renderings, maps for location analyses, etc., can often help a reader gain a stronger understanding on certain selling points associated with your business. For example – if you’re an upper-scale restaurant planning to lease in a prime location, using google maps to highlight the complementary shops and restaurants alongside your store would be a good way to show others how you’re thinking about the location advantage. 

What Next? 

Writing a business plan can be a time-consuming process but it helps to remember that the steps that go into creating a good business plan (i.e. spending the time to do the appropriate research and making sure you have the right elements for success) are also what will enable you to succeed once you’ve started. As part of NextSeed’s dedication to supporting small and growing businesses, we are developing a series of articles to further dive in to creating strong sections of a business plan, including Market Research and Financial Forecasting. 

In addition to what we look to be producing, there are also an endless supply of resources currently online and available for both new and entrepreneurs to tap in to that we have outlined below: 

Other Online Resources: 

This blog article is provided for general informational purposes only, and not a promotion of NextSeed US LLC (“NextSeed”), any offering on NextSeed or any specific business.  Blog posts should not be construed as an endorsement or recommendation for any purpose. Blog posts does not take into account the specific objectives, financial situation or needs of any particular business. Past performance of one business is not a guarantee of future results of another business, and should not be relied upon or interpreted to be a prediction of performance of investments offered through NextSeed. In making any investment decision, investors should rely on their own examination of each issuer and the terms of each offering, including the merits and risks involved.

How to Maximize Your Business’s Yelp Presence

Everyone’s a critic these days, thanks to the power of social media. But nowhere do those comments and critiques stick faster than a business’s Yelp page.

The online review company is a little controversial in many business circles: some feel unfairly targeted by fake or manipulated reviews, and there are myriad cringe-worthy stories of business owners using the site to brawl with dissatisfied customers. But when utilized effectively, savvily and with a little self-restraint, Yelp is one of the most powerful free tools in building your business’s online presence.

“Yelp is the number one site for finding local businesses because we offer a platform for the consumer voice,” says Damien Smith, Marketing Director of Yelp Boston. “Good, bad or indifferent, your customers have always had the ability to offer their feedback and spread information about your business via word of mouth to those that will listen.”

The people haven’t changed, they’ve just been given a platform. That platform receives over 100 million unique users each month. And that platform, Smith says, allows consumers to make more educated purchasing decisions.

According to a Nielsen report earlier this year, 74 percent of consumers searching online for local businesses use review sites like Yelp at least once a month — and Yelp is ranked as the most trustworthy of all review sites. Not to mention that over 90 percent of those people using Yelp actually make a purchase “at least sometimes, frequently or almost always” after going on the website, and quickly too.

Businesses have always been at the mercy of their consumer kings, and while that may never have felt more pronounced, businesses and entrepreneurs also stand to gain a lot from maintaining a positive, proactive presence on Yelp, Smith says. Below, he offers some of the best ways to do exactly that.

1. Make sure your Yelp page is complete and accurate

It may sound simple, Smith says, “but making sure your listing represents your business fully is paramount. Accurate categories, correct hours, backstory about your business and the owners, uploading photos,” all helps present a credible and professional image online, for what can be many people’s first point of contact with your company. “All of these start with claiming your Yelp listing,” he says, “Which is completely free.”

Utilizing some of Yelp Platform’s additional functionalities, like check in offers, appointment scheduling and delivery orders all encourage consumers — and subsequently review traffic — Smith says, and “make it easier for customers who are already looking into your business to spend their money with you.”

2. Grow from critiques (and be mindful how you respond to them)

No business can please everybody all the time. At the end of the day, they’re run by humans, and we’re difficult creatures. But when muck gets thrown, try to view it more as free fertilizer than an excuse to wrestle in it.

“Negative reviews are important because without them, many businesses would not have the insight to refine and grow,” Smith says. “Try not to focus on one or two negative reviews, instead being mindful of trends in constructive criticisms.”

Responding to reviews is free for business owners on Yelp, but no matter how personal some critiques may feel, be conscious that whatever you say, publicly or privately, you’re representing your business. Responses or the lack thereof, Smith says, are very telling to future patrons as to a business’s professionalism and attention to service in the face of a dissatisfied customer.

3.  Know that the statistics are in your favor

“Almost 80% of the reviews on Yelp skew positive and there are more five star reviews than one-, two- or three-star combined,” Smith says. Despite the stereotype of Yelp users being demanding, entitled, and harsh in their criticisms, they predominantly use the service to give positive reviews.

“People want to talk about their great experiences, and businesses deserve to have access to their customer feedback; Yelp offers both,” Smith says.

4.  Worry about your customers, not your online reputation

All the attention to your Yelp page matters little if you aren’t doing the best job for your customers daily.

“Provide amazing goods and services to your customers: it’s the reason you began your business,” Smith says, “It’s what drives you every day – regardless of how often you interact or review your Yelp listing.”

Internet platforms are no substitute for an outstanding business. The quickest way to grow a great Yelp profile is to take care of the basics, and focus on your consumer’s in-person experiences and interactions.

“A positive Yelp presence will come organically from your satisfied patrons,” Smith says.

Want to learn more? Here are some additional official Yelp help materials Smith recommends all business owners check out.

This blog article is provided for general informational purposes only, and not a promotion of NextSeed US LLC (“NextSeed”), any offering on NextSeed or any specific business.  Blog posts should not be construed as an endorsement or recommendation for any purpose. Blog posts does not take into account the specific objectives, financial situation or needs of any particular business. Past performance of one business is not a guarantee of future results of another business, and should not be relied upon or interpreted to be a prediction of performance of investments offered through NextSeed. In making any investment decision, investors should rely on their own examination of each issuer and the terms of each offering, including the merits and risks involved.

 

Sources:
https://www.eater.com/2016/5/3/11578978/yelp-fake-reviews
https://www.yelpblog.com/wp-content/uploads/2017/05/Nielsen-2017-92.png

Food Halls are No Half-Baked Idea

No matter the news cycle, food is one of the few constants in life that unites, calms and encourages no matter who you are or where you come from. There’s never been a better time to be a diner in the United States: the sheer volume of choice is staggering, the diversity of cuisine is mind-boggling and food halls — like trendy gastronomic galleries — continue to spring up from coast to coast.  

According to Eater, there are over 100 food halls across the country as of 2017, expected to double in the next few years. Gotham West Market, Grand Central Market and Reading Terminal Market are some of the most recognizable names. Each of them are like gentrified marketplaces of yore, with an unmatched diversity of cuisine distinct to American cities, and an energized atmosphere usually found at the likes of food truck festivals.  

Reading Terminal Market in Philadelphia, originally founded in 1893, is one of the most iconic food halls in the country. Photo by R. Kennedy for Visit Philadelphia.

Mini-restaurants cohabit spaces with boutique food and beverage retailers and local produce vendors. While not dissimilar to mall food courts in concept, the fare on offer at food halls skews toward the gourmet, with not a Sbarro in sight. A Foodie hall would be a better way to describe them. They’re also hubs of community, buzz and foot traffic.  

Indeed, one of the biggest critiques of them is that they’re often crowded — which only speaks to their popularity. The food hall is on its way to becoming a staple of any city worth its flaky sea salt, but what makes them so appealing in urban locales with already-robust culinary scenes? 

The allure for restaurateurs both new and experienced is obvious. The smaller scale environment presents a lower risk way to introduce a new concept to the public, be it an entire brand, or just a new dish. The most recent example of just how popular food hall outposts have become with the established restaurant crowd: NYC’s famed Katz’s Delicatessen recently opened its first satellite location in Brooklyn’s DeKalb Market Hall.  

Like the impetus behind the food truck wave a few years back, renting a slot at a food hall is drastically cheaper than raising the often prohibitively large sum required to open a sit-down, or even fast-casual, eatery. Vendors lease a stall space from their respective markets, applying for competitive slots with detailed business concepts, small menus and attractive stall designs. It varies by specific food hall, but for their part, landlords typically provide communal seating, event bookings and a general alcohol license for the premises. 

There’s arguably more competition to contend with, given the proximity of the neighboring opposition, but with centralization comes high volumes of guaranteed traffic — hungry traffic, at that. Which means chefs and restauranteurs can spend less time focusing on marketing campaigns and media buzz and put more of their attention toward doing what they do best: making outstanding eats. 

It’s no coincidence that the rise of the food hall has coincided with the U.S.’s general increase in consciousness toward its food consumption; where it comes from, how it’s produced and how it tastes. With their highly interactive setting, food halls serve excellent opportunities for retailers and chefs to converse with the public about the produce and meals they’re eating, as well as about the brands they’re buying.  

Fareground, opening soon in the heart of downtown Austin, will feature new concepts from top local chefs. Rendering courtesy of Fareground / Michael Hsu Office of Architecture.

They may be typically housed in historically or architecturally interesting buildings, but food halls are far from just educational institutions. They’re exciting, entertaining, and experiential places to spend time; microcosms of the urban centers in which they’re invariably found, and showcases of their culinary prowess.  

Perhaps most appealingly of all though, they’re the most accessible and efficient way to experience the best a city’s food scene has to offer. As gastro-tourist hubs, the lines for the most renowned vendors can get long, but once you get to the front, you can watch the food being prepared for you — and quickly, too. The service is more streamlined, casual, and unpretentious than many traditionally foodie haunts, and the meals don’t require months of forward thinking to book, or eye-watering bills.  

In many ways, food halls are simply another elegant solution to an economic problem — on the part of both consumers and entrepreneurs. They’re products of urban revival, globalization, and brand accessibility: a climax of cravings for authentic experiences and quality-conscious food that seem to be more than a flash in the pan. The concept’s booming popularity shows people are hungry for more. 

This blog article is provided for general informational purposes only, and not a promotion of NextSeed US LLC (“NextSeed”), any offering on NextSeed or any specific business.  Blog posts should not be construed as an endorsement or recommendation for any purpose. Blog posts does not take into account the specific objectives, financial situation or needs of any particular business. Past performance of one business is not a guarantee of future results of another business, and should not be relied upon or interpreted to be a prediction of performance of investments offered through NextSeed. In making any investment decision, investors should rely on their own examination of each issuer and the terms of each offering, including the merits and risks involved.

 

Sources:
https://www.eater.com/2017/8/30/16181016/food-hall-boom-2017
https://www.nytimes.com/2017/09/12/business/food-hall-development.html?_r=0
https://www.wsj.com/articles/take-control-at-the-food-hall-1500998926
https://www.forbes.com/sites/nancygagliardi/2015/02/18/consumers-want-healthy-foods-and-will-pay-more-for-them/#42ddadaa75c5
https://www.eater.com/2015/3/5/8105295/23-most-anticipated-food-halls-eataly-market-hall-ponce-city-market

Creating Community Through Functional Fitness

by erin paruszewski

Erin Paruszewski is the founder & CEO of Alkalign Studios, which recently raised $100,000 from 125 investors on NextSeed. 

“The journey of a thousand miles begins with one step.” – Lao Tzu 

This is my favorite quote, and one that aptly sums up my journey as an entrepreneur and small business owner. Getting married, buying a house, having kids – these were big decisions in my life. But the most significant decision I have ever made was to take a tremendous risk and open a new fitness concept, Alkalign Studios, in 2015.  

I grew up around small business: my dad is an entrepreneur and a generally innovative and crazy guy, and I was running payroll for the family business when I was 12. He created several businesses from the ground up in completely different industries, and working hard was never an option in my family – it’s just what we did. When I was a kid, I started babysitting and lawn care businesses, and later worked as a waitress and bartender throughout my college years. 

Towards the end of my time at Georgetown, I decided I wanted to work in finance. It was 2000, tech was booming, and I wanted to be in Silicon Valley. It wasn’t easy to get a job in finance without a very specific finance background. It was a frustrating process, I felt like I was smart and capable and could think outside the box – but I had a History degree and we live in a very “if this, then” world. I applied to dozens of firms and didn’t get a single interview.  

I didn’t realize this at the time, but I think that’s why I’m an entrepreneur: I don’t believe in walking in a linear path. I’m a reflection of all the experiences I’ve had and I believe that if you’re of a growth mindset, you can do anything you want.   

I eventually fought my foot into the door at Piper Jaffray and started my first “real job” there as an Equity Research Analyst in their Menlo Park office (ironically, right around the corner from the first Alkalign location). I met some of my dearest friends at Piper and am grateful for everything I learned, including that no matter where I work, I will never be a 9-5er. I’m more of a 5-9er.  

I left Piper for another bank, and then for a finance position at a healthcare company, and continued to work my way up the corporate ladder. I became Six Sigma Black Belt certified and transitioned from finance to product development and marketing positions at Health Net.  

Fitness has always been a part of my life. I was athletic from a very young age; I ran track and cross country in high school and got into marathon running and then cycling and triathlons when I was in college. But I was always an individual contributor, until I joined a gym for the first time in 2003 and got really into the community and camaraderie and started taking group classes.  

Now that I look back, this is when the puzzle pieces started falling into place for me to have my job today, which I think is the best job in the world. But things don’t always make sense at the time, and it’s important to trust the process.  

I became close friends with an instructor at Equinox, who thought I might make a good fitness instructor and brought me on to start teaching cycling and other classes there. She was launching a fitness concept of her own, and I helped her develop a business plan. She didn’t know how to open a Word doc, and I traded dozens of hours of business consulting for a BOSU ball, which costs $120. But I felt so excited bringing my experience in business and passion for fitness together, even if it was just to help someone else. And by the way, I still have that BOSU ball. 

It was also around this time that I got introduced to barre classes, which I initially thought were total B.S. because I wasn’t sweating and burning a thousand calories per hour. But then I started to change my mindset about movement – I realized that I didn’t need to beat my body into ground.   

The day Obama was inaugurated in 2009, I left my corporate job. I felt like that was a big day of change. I opened two barre studios and loved everything about it: impacting people’s lives in a positive way, being a part of the local community through my business, meeting new people.  

But I wasn’t happy with the underlying business operations of the franchise, and hired a business coach to help me do some soul searching. I wanted to take my experiences with barre and other fitness programs and create a better product based on functional fitness, and a close friend who ultimately ended up acting as my branding firm convinced me to make the jump. Seven weeks later, we had branded the concept, created a website, done photo shoots and launched Alkalign. 

I have more than found something I’m passionate about – I have created something I’m passionate about. It’s amazing to have the freedom to live and work in an environment where I can positively influence peoples’ lives in so many ways. I care about my team and my clients like they are an extension of my family and will do whatever it takes to help them live a more fulfilled life.  

I’ve had plenty of failures along the way, and failure presents the best opportunities to learn and to grow. I think my biggest failure was moving forward with a franchisee who I didn’t trust. It was our second opportunity to franchise and something in my gut told me not to do it. While I feel great that we called it off before it got further down the road, I regret that I didn’t listen to my gut sooner. On the flip side, it confirmed that I will never compromise the culture of Alkalign, the integrity of the brand or my core values for money.  

This isn’t for everyone. When you own your own business, there is no such thing as punching the clock and checking out. Alkalign never sleeps, and I think about it all the time. I love it, so the trade-off is worth it, but there’s no doubt that passion is critical to success as an entrepreneur.   

My goal with Alkalign isn’t to be the biggest fitness brand but rather the most trusted and respected when it comes to doing right by our clients both short and long-term. I’m all about investing for the long-haul, which I think differentiates us from other fitness brands which tend to focus more on the here and now. I believe we are providing something unique to the health and wellness market that is unlike anything else out there. 

Not only is there a huge opportunity in functional fitness and offering sustainable workouts that appeal to a wide range of people (men, women, old, young…everyone can benefit), there is an opportunity to facilitate connections and community in every Alkalign studio. I hope that Alkalign catches on and we can replicate what we’ve started in our four current studios across other communities nationally and internationally.  

The articles in this section are provided for general informational purposes only, and not a promotion of NextSeed US LLC, any offering on NextSeed or any specific business. Prospective investors should NOT rely on information provided herein as investment advice. Past performance of one business is not a guarantee of future results of another business, and should not be relied upon or interpreted to be a prediction of performance of investments offered through NextSeed US LLC. In making any investment decision, investors should rely on their own examination of each issuer and the terms of each offering, including the merits and risks involved.

How to Cultivate and Maintain Employee Happiness

by thomas nguyen

Thomas Nguyen (pictured center) is the co-founder and Brand Boss of Peli Peli, a Houston-based South African fusion restaurant with five locations in Houston, including the fast-casual Peli Peli Kitchen and Peli Deli concepts, with a sixth Austin flagship slated to open this year. 

Creating and maintaining happy, motivated employees is the most important aspect of our organization.

The restaurant industry is extremely competitive in Houston, and at the end of the day, people have thousands of options to choose from that have great food and great ambiance at a similar price point. But what helps create an emotional connection between an establishment and customers? It’s the people behind it.  

When I entered this industry with my co-founders Michael Tran and Paul Friedman, we brought our respective backgrounds into our leadership styles. I was previously in law, Michael was an entrepreneur in restaurant technology and Paul was a seasoned chef. We thought that establishing a strict hierarchy and ruling with fear was the best way to manage our team. Over the years, we learned some alternative approaches that have been much more effective in building up our employees and creating a positive work culture. 

Whether you’re getting ready to open your first restaurant or have years of experience under your belt, I hope you can gain something from our approach and the lessons we’ve learned over the years.  

Employees Come Before Customers 

It’s a simple formula: unhappy employees equals unhappy customers. Instead of customers come first, its actually the employees.  If your servers aren’t genuinely happy when interacting with customers, customers will notice. 

We take reviews very seriously, and when you look at Peli Peli’s reviews on Yelp and TripAdvisor, almost all of them highlight our people just as much as our food. Food can make people feel great, but people feel truly happy when they have a positive experience because of the server/bartender/hostess.  This connection creates a memorable moment that is critical to a restaurant’s overall brand experience.  

Hire for Personality and Heart 

When we made the decision to put people and service at the core of what we do, we quickly learned that it’s impossible to train people to be nice. Someone could have the most impressive resume and know everything there is to know about food and wine – but if they have an attitude problem, that’s nearly impossible to correct.  

On the other hand, if someone comes to us with zero restaurant experience but is extremely kind, passionate and well-spoken, and eager to learn the ropes, we can teach them the fundamentals of food and wine relatively quickly in training. Customers are much more forgiving when dealing with a server as long as that server truly cares about that customer’s needs. If someone is a jerk, or even apathetic at any point during the customer interaction, that damage is impossible to undo.  

Once you’ve hired the right people, it’s crucial to set up review structures and feedback loops so they consistently know where they need to improve – and you understand how you can help them improve. 

It Starts from the Top  

At our first location in Vintage Park, Michael, Paul and I were in operations on a daily basis. As we’ve grown, the three of us have had to learn how to relinquish control and set the tone for our leadership team. It’s completely unreasonable for us to expect our servers to feel fulfilled and have positive attitudes if we aren’t successfully managing the people who manage those servers. We have to walk the walk. 

We also can’t do everything – and we aren’t necessarily the best people to do everything. As your business grows, you must learn when and how to step back and empower other people to lead within your organization. We have incredible managers at Peli Peli, many of whom don’t have any prior management experience and started with us as servers. We trust these managers because we’ve seen their dedication firsthand, and as a result we feel comfortable empowering them to take ownership and make mistakes.  

Cultivate Leaders with the Expectation They Will Leave  

We treat Peli Peli like a family, and in the same way that you would be excited about family members having kids, getting new jobs and generally moving on – we’re excited when our dedicated team members leave us to pursue new professional, educational or personal ventures. 

It’s unrealistic to expect that, just because you invest in someone, they will be with you forever. We focus on maximizing people when they are with us, whether that’s for six months or six years. Focus on the lasting impact you can make on someone’s life who may ultimately go on to lead another organization – it’s not always about what people can do for you.  

For an inside look at Peli Peli’s fun-filled culture, follow Thomas on Instagram: @southafricanasian. 

Note that Thomas provides this blog post for informational purposes only, without promoting or endorsing investments or NextSeed in anyway. NextSeed is not affiliated with Thomas or Peli Peli, and NextSeed is passing along his message for general informational purposes only, without endorsement of his views or Peli Peli. Blog posts should not be construed as an endorsement or recommendation for any purpose. In making any investment decision, investors should rely on their own examination of each issuer and the terms of each offering, including the merits and risks involved.