Page 42 - Business Plans that Work A Guide for Small Business

Before You Start Planning, Ask the Right Questions • 33

criteria (market size and margins) and how some changes to their original
vision have improved the nature of the opportunity.
All new venture ideas rest on several critical assumptions that will ei-
ther make or break the business. As you view the Lazybones Quick Screen,
you’ll note that the overall assessment is mixed. The laundry industry is
highly fragmented with lots of small mom-and-pop operators, with only
4
6 percent of the industry consisting of firms with 20 or more employees.
The three largest players, National Drycleaning Inc., Dry Clean USA, and
Hangers America, have only 5.4 percent of the market share. Lazybones
5
is driven by the assumption that their professional process in handling
college students’ laundry is of value to potential franchisees. If so, then
the company can secure franchisees and grow. However, considering that
the overall industry isn’t growing, it means that Lazybones’s growth will
come at the expense of competitors. In a highly fragmented industry,
mom-and-pop competitors may not have the resources for a sustained
fight with a larger player. The goal of the Quick Screen is to help you iden-
tify these critical assumptions before you spend considerable time and
effort on a more thorough business planning process. The Quick Screen
raises questions that you should work to answer as you proceed through
the business planning process. As you view Lazybones’s Quick Screen,
what issues do you see? How would you advise Dan to manage these
issues? We have created a Web site for your feedback on Lazybones at
http://businessplansthatwork.groupsite.com. Input your thoughts on Lazy-
bones and see how they compare with those of others who are reading
this book. We have also created a networking site for you to share your
questions and thoughts with other entrepreneurs who are early in their
process. There is also an electronic Quick Screen at the Web site for you
to use in evaluating your own ideas.
Ideally, would-be entrepreneurs have several concepts that they will
screen before deciding which one to pursue. More often than not, how-
ever, entrepreneurs already have a strong vision for an opportunity that
they are driven to pursue, even if the obstacles are many. We applaud both
types of entrepreneurs. In the latter scenario, the Quick Screen will help
you reshape the opportunity so that it is best positioned to succeed. There
is no perfect deal. We find that entrepreneurs often think in terms of what

4 IBISWorld, “IBISWorld Industry Report: Non Coin-Operated Laundromats and Dry
Cleaners in the US,” August 2009. http://www.ibisworld.com.ezproxy.babson.edu/
industryus/default.aspx?indid=1730.
5 Parent company: DCI Management Group Ltd.