New Business Plan

Wow, you guys are a tough crowd! So, what do you suggest? Get the inital $400 USD temselves, THEN try to talk to investors to get them interested for additional funds, THEN go with the contract?

Seems like a good idea to me.

You know, just so I know when its time to start begging for money.

I, too, would love to see a copy of the business plan if it's available. Whether it is or not seems to be unclear.

If the profit-making projections look so good, why wouldn't you just front yourselves the 400 USD using RL credit? If the returns are projected to outperform the interest rate, you'll still make money.

This is you and your partner's business. How much of the initial investment risk do you plan to assume yourselves? If your real need is 1200 USD, both of you can manage 400 USD, and you're merely looking for investors to raise the remaining third, that's one thing. If your need is only the 400 USD and you're trying to get others to front ALL the money yet have no say in the operation of the business... that's another thing entirely.

Thanks for those who offered constructive comments. This is merely a proposal to seek investors, we are finalizing our plan, we have completed start-up costs, income statements, and we are adjusting cash flow projections. We wish to have a realistic package for serious investors. We certainly are not begging here, the approach is not unlike any start-up business in RL, seeking investors. We have calculated our own financial committment, and we anticipate a significant cash outlay from ourselves for the first six months, so we thought it may be prudent to see if there were investors, or possible partners who would like involvement in a business but not necessarily have the responsibility of being "hands on". Again, this plan will not be posted here, we have already some interested people, and we will make the plan available to those who we feel are serious.

Why on earth do you need investors? Startup costs are very low in SL. And what SL business experience do you and your partner have? Anyone can put a document together, with projections of this and that, but you are are brand new to SL and you haven't any experience at all.

See above - about anyone being able to throw a document together.

I am - I am begging to differ with you. It certainly looks to me like you are begging. You're asking strangers to give you money, based on you total lack of experience. It sure sounds like begging to me.

Perhaps not, but RL ventures usually entail significant costs - equipment, brick and mortar, etc. SL isn't like that at all. The cost here is very little - so little that the two of you could finance it yourselves if you are convinced it will succeed - which speaks volumes to me.

I suggest you finance it and take all the risks yourselves. *If* it's worth doing, and *if* you put the effort into it, you *may* succeed, but the chances of it not succeeding are very high in SL.

What additional funds? You were going for L$100,000 back on the first post.

If the business plan includes repaying outside investers, any return on their investment comes directly out of the profit of the venture. On the other hand, if the plan is to not pay back outside investors, it's fraud. No offense, but SL history has a lot more of the latter than the former.

Which, come to think of it, is another option: there are still a few pretend "capital exchanges" (read: competitive con-artist role-play); maybe they'd be interested. Just watch your wallet during any discussions.

Woah woah, buddy. Back up. I'M not asking for anything. Check your names my friend. The person seeking investors was Browser Bruno, not myself.



On a side note, its a bad pitch for investors to only talk money, Broswer. There COULD be possible intersted parties in your endevor Browser, but you haven't given enough information to generate any amount of trust. Especially for a platform as unique as SL. Best of luck, but in the future if may not be the best idea to toss out 'Interested people looking to make losts of money, come look at my business plan.'

Most definately, repayment to investors will commence in the first three months, full repayment, along with a healthy investment return, will be complete within a year. Again, i am listening to all your comments, and will take all into consideration. I imagine there are a lot of scams here, and this proposal may seem that way, but we wish to build a relationship with investors, prior to any exchange of funds, so investors are secure that it's genuine and worthwhile.

Phil, I'm gonna disagree with you on this one (even though I normally agree with everything you say). I mean this with the greatest respect.

A good, well thought out business plan is realistic and often times pessamistic with an ending 'break even' analysis. You can spot a good business plan and something that was thrown together a mile away. Thousands of business plans are submitted to RL banks and investors every year, and 3 might get past the first reading. There is a ton of reasearch involved in studying the market in which the product or service is trying to be introduced. Many times, if the research is done properly, the soon to be business owner finds out that maybe their business wasn't as good an idea as they first thought.

I'd be interested in seeing this business plan simply to see the market research thats been done. I haven't been able to find alot of stats on the types of people that are on SL. (Anybody got a link??)

Those that contacted these people, be wary. Ask lots of questions. If the plan looks 'too good to be true', it probably is. Seed investment money needs to have alot of FACTS and market research to back the request for the investment.

I realize this is all sort of a given, but I wanted to say it on the forums anyway.

How much market research can someone who joined SL less than a month ago have done?

SL is nothing like RL anyway. Markets can change direction in SL faster than some people change their underwear, and the percentage of businesses that survive for the long term is a lot smaller than it is in RL. Because start-up costs are so low, anyone who hits upon a new "niche" market that proves popular will quickly find themselves with a number of competitors and imitators trying to cash in. Any SL business plan that doesn't take this into account is going to be flawed from the outset.

Thats my point. I guess I didn't state that clearly.
They couldn't have done the research themselves, but others may have that they sited and used perhaps.

However, Bowser could be an alt? Maybe? Though not likely from their inital post.

Oh, jeez Bunni, I didn't realize that was your post, not the OP's. Well, obviously, I guess. Anyway, very sorry about the confusion.

(In which case I'm back to the initial puzzlement of why seek outside investors to front only L$100K.)

I'm guessing those of us who are asking this question aren't deemed "serious" enough by the OP to receive a copy of the business plan.

If I had to guess, it's a casino/club/live music entertainment sim. The 375 or so dollars that would be raised would front the cost for a homestead... or the cost of all the equipment, if it's a massive slingo/zyngo-esque gaming operation. The ongoing outlays that they supposedly intend to pay out of their own pockets would likely be for the live music or just the monthly tier, with musicians being expected to work for tips only, or perhaps under a tip splitting agreement. The only thing remotely lucrative has to be the gaming portion, that would allow them to recover all the funds to start paying within 3 months.

Hi browser,

I for one will assume that you're not a scam artist, just perhaps a little less experienced in setting up a business than you've indicated.

I'm not entirely sure why you've received such a negative reaction, particularly from several supposed "business people" but if you're genuine just ignore it.. entrepreneurs are what SL needs.

Anyway my advice for what it's worth..

1. Get 2 versions of a business plan together, one for you and one for distribution. Yours should be painful to read, obviously the other should paint a rosier picture but still be realistic.

2. Despite what some have said here, don't spend months on market research etc. As has also been pointed out, the whole environment is very volatile and what was true last month may not be true this month. The best strategy really is to build agility and forecasting capability into your core competencies.

3. I'm not against looking for external investment up front. If nothing else a few pitches (and the reaction you recieve) can act as a reality check.. and to be honest just saying the words out loud to a group of people who haven't drunk the koolaid is very valuable. Hell, even if you don't need the money it's valuable to address the investor community just for those reasons.

4. On the other hand, investors will be looking for personal credibility, for you to have some skin in the game, some realistic ROI, and and exit. From your point of view and in your situation, don't just grab money and the people offering it. If you really have a good deal to offer then look for mentorship along with money. Look for someone to believe in you and what you're doing, not just what they can get out of you.. particularly at this early stage.

5. Don't let this lot dictate what you may or may not need to get your business going. As long as you know, can justify it to others and more importantly to yourself.

If you have a great idea, can invest the time and energy and talent but not a penny to your name, then use Other People's Money. It's such a common strategy that it has its own acronym so to hell with this lot.

6. In this case, don't just go handing out your business plan to all and sundry. Your job is to vet prospective investors as much as they vet you. Do a little due dillgence on whoever asks for a squint at your plan. Most will be just plain nosey time wasters, some will be people looking for ideas for their own business, others will be competitors in your prospective space.

7. Finally contracts.. you're going to have to deal with the idea that in SL they mean squat. For a start in RL I'd have strongly suggested a NDA (Non Disclosure Agreement) from anyone wanting to look at a detailed plan. In SL even thinking about that is diverting precious time and investment away from tasks which actually count for something. This just reinforces the idea of due diligence on both sides.. vet "them" as much as they vet you before you even think about handing over your ideas and dreams wrapped in a big bow.

If you're serious, please just go for it. Take the abuse, the flack and learn from the cock ups (of which there'll be many).

Bear in mind that the world is made up of talkers and doers, I'll let you guess which demographic is predominant on these boards.

Good Luck.

a little SL experience and market research is a good thing IMO, otherwise someone might have a grandiose idea that they think will make them a fortune, come in to SL only to find that it isn't really viable here. Things don't work the same way in SL as they do in RL. That's just how it is.

I would never float an SL business plan that requires investors, or invest my money with someone who did so. Here' why...

1. Most SL businesses, even fairly large ones, don't require a lot of startup capital. An individual, or a small partnership, should be able to start the business out of their own pockets.

2. The more investors, the greater the chance for problems. Not only do you have a dilution of profits (you have to pay the investors, after all), but the anonymity of SL carries with the the chance of problems. For every investor you add, the risk of getting scammed (in either direction) increases. Partners should have RL contact information! Know who you are dealing with.

Someone who's been in SL a month doesn't know enough. Do you know your partner? Do you REALLY know the SL business scene? Do you understand how property works? One guy here moaned for months because he'd gone partners with someone on a private estate, and let her have the estate in her name...which gave her the ability to kick him out, which she did, leaving him with nothing.

too many cooks spoil the broth.

That's true. I cut up 4 cooks once and put them in the broth... terrible.

Agreed about external investors. I started my business flipping 16s for a couple of lindens profit at a time, after a few weeks I got big enough to flip a single 512 for a couple 100 lindens in profit and just kept building from there. Now I own a pretty big business and it only took a couple years to get here.

Pretty much anything large you want to do in SL can first be done on a smaller scale. If it works out then expand a little bit at a time until you're where you want to be.

The other problem with investors is not just that you can't trust them but if they rip you off then you have absolutely no recourse. I hear all the time about people who were trusted suddenly vanishing or having a tiff and abandoning someone's land, or deleting someone's shop. If this happens there's pretty much nothing you can do about it.

In RL, starting a business is all about forming partnerships and getting investors.

In most cases SL businesses don’t work like that due to the very low start up costs and the fact that only one person can be the land owner and they get absolute power to expel the others. LL wont get involved in ownership disputes so the land owner always wins.

Sl businesses are usually owned by one person who possibly has helpers.

It seems like a lot of people are just assuming that the OP is not already planning on putting in some of his own money. I don't think he indicated anywhere that he is not. For all we know the OP and his parnter could be each be putting in $400US and they could still be looking for another $400.

Just to throw another perspective in here....there is MUCH more cost in starting a sim than just the initial fees and tier. Contracting scripters, builders, animators, etc can run into the thousands of dollars to make a project come into being. Trying to get investors is actually a wise biz move if that is the case....however the returns are likely to be very small. Investors would be cautioned to invest because they love the idea and want to support it rather than with the plan of making a ton of money from profits.