Jonathan Santomauro ’11 explains his method for outlining a new business.
Jonathan Santomauro, a Cornell alumnus who is now the president of Global Procurement Strategies, which is a tactical outsourcing firm that creates partnerships with major corporations to increase the efficiency of their procurement divisions, was a student entrepreneur during his time at Cornell. Having experience developing a business plan and growing his company from scratch, he explains in an eclips interview his method for outlining a new business venture :
“Basically you start with a general idea of what you want your company to do. You have goals for it, you have what you think it should be doing and then you have what market you want to answer. So those are the … What I consider the biggest three things that you need to have when you write a business plan and then from that you need to think first of all who your competition is, if there’s any and how you’re going to structure your company, so that’s it’s differentiable from them in some way. So when I’m writing the business plan for my outsourcing company, I first had to look at… alright, I want to be a tactical outsourcing firm. I want to work with major corporations. So I’ve defined what it is that I do and what my market is. That’s fairly easy. Now the hard part is elaborating that to make it make sense to anyone, to potential investor, to your management team and even to yourself. So by doing that you really need to think like I said before, exactly what your concept is. A lot of times, it’s easy to say I’m a tactical outsourcing firm. Easy words to say but what exactly does that imply. Does that mean you replace an entire division, does that mean you place small amounts of it? That’s basically the question that you need to answer for that. Once you’ve done that you can analyze what market you want to enter. So for me it’s the large corporations, large corporate markets and I think I’ve estimated to be about 3 or 4 trillion dollar a year in total buying for procurement in corporations. That’s been identified. You need to determine what aspect of that you’re going to go for. Obviously no company is going to get 4 trillion dollars in business. So you need … you need to come up with I guess a sales plan and a revenue program to determine how your company is going to succeed and how it’s eventually going to make you money and your investors money, and I guess the biggest challenge you’re going to encounter when you do that is to avoid grandiosity in your predictions. So if I’m saying I’m running a tactical outsourcing firm, I want it do theoretical number, 100 billion dollars after two years. That’s probably not going to happen and it’s very easy to get carried away with the numbers and I’ve noticed… myself, I do that quite often is I start creating big numbers that will never happen and just keeping your focus the whole way through writing the business plan is probably the most essential portion of it. Stay away from the grandiosity and keep yourself on track with your company.”