How do you protect your great ideas? Who are your real competitors? Listen to this thought-provoking advice from business plan expert Tim Berry on protecting your new business or product ideas.
Beth Haselhorst: Entrepreneurs are seen as innovators and problem solvers who deliver the big ideas. But many small business owners makes the mistake of putting too much value on their ideas when it comes to business plans. This according to the man known as the business plans Coach Tim Berry. Tim is not only a successful business author but also founder of Palo Alto Software, which produces the nations leading business-planning software, welcome to sbtv.com Tim. Tim Berry: Thank you very much. Beth Haselhorst: Do you find many people over value the business idea. Tim Berry: Oh, yes, Beth do I ever, there is so much misunderstanding around the business idea, people think that business as a starting businesses is about the ideas. And if you look at successful businesses and in the audience you know look around you and just watch, businesses our built not on the idea but on the showing up everyday, on the returning calls, on the giving people value and you look at even the classics. I was not involved but around when Apple Computer started, it was and obvious idea. There were two personal computer companies before Apple, Steve Job and Steve Wozniak used to go to the computer club at Stanford and all the talked about for years, not just they but all the others is “We need a personal computer company”. So the idea was not really part of it and not just this one but let's go on with this one because it’s a way to make a point lots of people had that idea. And if you have a good idea or you have a good idea, a thousand other people have the same idea. You're in a race to take that idea and make it happened. Make it real, you build the business, you don’t just have the idea. So in the case of Apple Steve Job and Steve Wozniak there was that idea that was running around everywhere but what they did was they built a business plan, they found the investors, they hired Mike Marcolo was the sales genius they got involved with Reggis MacKenna who was PR, they put the pieces together. They put themselves in the line, they got investment, they did the plan, they ran and they got to start, they a build a business. And here is the key thing, why I say ideas aren’t valuable. There were a dime a dozen actually is, it’s not like you could sell and idea. I mean the opposite comes up I get this thing in email well I've got this great idea for a new product but I don’t have the resources to manufacture it, so I want to sell it some large company. That’s just it, okay I know there is always exceptions to rule but that’s not going too happened. Beth Haselhorst: Is it easier to sell a new idea or an existing business concept? Tim Berry: Not always, it’s interesting that—well let's go back to the Apple computer because it’s a useful example they were the third. Sometimes being the first is harder. I had a client back in my consulting days who was just distort because another company had introduced at one of the early Comaxes a product that was very much like her product and they were a big company and she was a start up. And I'm pleased because I was right I told her “Do not worry this is great, your perfectly positioned now you will be able to explain to everybody that yours is just like this other one except yours is way better”. Sometimes being second or third is easier, better, and here again, it goes back to this thing about the idea. Its building the business that makes the idea have value it’s not the idea itself. Beth Haselhorst: When it comes to actual business plan what are some of your best tips for show casing that plan? Tim Berry: Show casing implies to me explaining it to other and I will say that over the years, I have consulted with Venturi Capital and I do this venture contest for the graduate schools that I mean I'm a judge at them. More and more I see if as you try to explain your idea in your business plan. In your elevator speech, in your presentation start with the business need that’s what drives the business. I like to get empathy and start with somebody that sounds like a real person. Here she has this problem and you're listener’s starts empathies with the problem, hear, and think through all you have to see this is a problem where can I get good coffee in Eugene Oregon or whatever. And then you lock the man on the problem and then you show how you're going to solve it and of course, how you're going to solve it differently. And then that flows into the flesh and bones of it, the deadlines and tasks and people on whatever. Beth Haselhorst: Can you reveal too much about the big idea in the business plan? Tim Berry: People are so afraid of that. Now that’s—it’s that problem that makes me say that ideas were diamond dozen. If you look from the point of view of the recipient of the idea, so you have a great idea. You want to get investment, you're going to go through professional investors probably and professional investors aren’t going to sign ahead of time before talking to you anything that guarantees that they won’t be involved with your idea. Why is that? Well I would have said so, ideas are diamond dozen, a thousand people have your idea, you're the only one that doesn’t know it. So if they sign-off to you that they can’t disclose your idea, it turns out that the person they heard two days ago had the same idea and now there is this legal document and so on. And then there is this, the high-end the professional investors, they're not looking for ideas. They have to deal with a thousand times more ideas that they can actually find. They want teams, they want entrepreneurs, they want people who could take an idea and build the business. So in the middle of that, are you afraid to share your idea? And where’s I get paradoxical at the end. You are when you're talking with other people in your industry, other people who might actually take that. You have to be careful with your idea, when you're talking to people who might also run with it. So professional investors aren’t the problem, with big companies they're not going to go anywhere—general motors doesn’t want to hear what you and I think will improve their product if you sign a disclosure and so on because they’ve got engineers. They're spending billions on research all the time, they're going too assumed ahead of time they already have your idea and it’s just a legal problem. So it’s not the big companies because you can't sell an idea to a big company. It’s not the investors where you do want to be careful is the person in the next cue or the person that might be your competitor. And there although there are legal documents and so on, in the real world the best way to protect and idea is not talk about it until you build the business around it. Beth Haselhorst: Tim thanks a lot for joining us today. Be sure to visit www.TimBerry.com to learn more about Tim books, his work and his blog. And you can find more segments with Tim Berry in the Small Business Growth Series here on sbtv.com where small business is our only business.