Page 171 - Business Plans that Work A Guide for Small Business

160 • Business Plans that Work

This strong relationship has led to a promise by Continental-Girbau to
provide debt financing to Lazybones and its franchisees for the equipment
to open new stores. One of the most difficult tasks that an entrepreneur
faces is financing growth. Using a combination of equipment financing
along with the franchisees’ capital to build new stores will help Lazy-
bones secure the capital it needs for its aggressive growth strategy. How-
ever, Continental-Girbau also provides Lazybones with intelligence. The
supplier can help Dan keep abreast of the latest on new equipment, such
as energy- and water-saving machines to understand the tradeoff between
the likely higher price and the savings from lower energy and water bills.
Continental-Girbau probably also sells to current and potential com-
petitors. Thus a strong relationship may lead to intelligence on who is
entering new locations and, maybe even more valuable, who is exiting
locations (closing down). Although vendors would never divulge trade
secrets—nor should you press them to—you can gain insight into how
your competitors operate. If you have an innovative product—one that
you believe nobody else has—you may learn through vendors of “stealth”
competitors; companies that are in the prelaunch period who have yet to
sell product or service. Vendors are often knowledgeable of other suppli-
ers you might need, or what distribution channels might work. They can
also provide a different perspective on what your customer wants. It is
never too early to start talking to potential vendors.
Dan can also use his contacts at universities to gain valuable intel-
ligence. In the case of Lazybones, universities are basically their dis-
tribution partners because they connect the company to its end users.
Universities have a deep knowledge of their students and their parents
and can help Dan better understand his end customer. Even though Lazy-
bones has a long operating history, customers in Wisconsin and Syracuse
may not be exactly the same as students from universities in other parts
of the country. Keeping close connection to these universities helps Dan
not only pick the best locations for growth but also to modify Lazybones
services to best meet their needs. Likewise, you should keep in close con-
tact with your distribution partners, who can provide you with insight
into your end user.
Like all successful entrepreneurs Dan has done an excellent job of
broadening his cast of advisers beyond experts in his field (franchising).
He has leveraged all of his business school professors (including us) by
meeting with us outside of class and even after graduation. Dan has used
his network to identify a lawyer who helped in contracting with ven-