But the numbers of American companies that don’t do their homework is another thing.

Not finishing your homework in business is dangerous. It is irresponsible. And it can be fatal.

When we talk about doing your homework as an entrepreneur, we mean doing the research and doing the thinking about your business strategy to make it work.  Here’s an example from the history books:

In 1998 an entrepreneur named Greg McLemore started pets.com, an online store for pet supplies featuring a sock puppet in its famous (and famously expensive) TV ad campaign.  Pets.com raised more than $300 million in venture capital during the dot-com bubble, before collapsing spectacularly.

Pets.com seemed to have all the right stuff.  They had buzz – one Super Bowl television spot cost more than $1.2 million.  Leading VCs like Hummer Winblad, and Amazon founder Jeff Bezos were big investors.  Julie Wainwright, a hot young CEO hired by the VCs, was put in charge.  The team at Pets.com was bold, brash and seemingly smart.

But somewhere along the line, they were ignorant.  Not necessarily stupid, but definitely ignorant.  Ask yourself a simple question: If Sparky is out of dog food, do you really want to go online and pay an $8 shipping fee to have a bag of food drop-kicked to your door?  When there is a 7-11 three blocks around the corner?   Think about that business model – or in that popular phrase (I can’t resist here) – will the dogs eat the dog food?

Business strategy does not always rest on the latest focus group (think Apple and Steve Jobs).  But it does rest on vision.  Market knowledge, intuition, and careful planning are required.  Market research is indispensable in the broad sense that you must understand your customer, know your competitors, and have a vision for the future.

Pet.com investors put in more than $300 million, and got nothing in return.  As I tell my MBA students, stop all this frenetic doing, and spend some time to just think.  Develop your vision.  Have a well-reasoned plan.  Finish your homework.

And then, don’t forget to turn it in.

“We know that half of all your advertising dollars are wasted.  We just don’t know which half.”

That was never more true than today, in a down-market that is also rapidly changing.  The world of advertising is morphing into those of us who “get it” about changing viewer habits, and those of us who don’t.  There are a lot of senior executives out there who don’t get it.

Luckily, many of these same executives actually know they are missing “something” about the new media and the new ways of doing business.

A lot of the differences in the advertising world today are generational.  The twenty-something’s “get it” when it comes to new media.  They have jumped from emails to MySpace to Facebook to Twitter with the ease of an Olympic gymnast.  The thirty-something’s are catching up fast.  The forty- and fifty-something’s?  Well, not so much.

Traditional media (newspapers, magazines, broadcast television) are shrinking.  On May 1 the Poynter Institute reported that newspaper circulation figures were up.  But the fine print revealed that the Audit Bureau of Circulations had actually changed the method of counting in 2010. Yes, digital and online views were way up (and are now added to circulation statistics). But paper versions of the newspaper are just not selling. The Washington Post had circulation decline of 7.84%, including online, in 2010. The Philadelphia Inquirer was down 5.36%; the Chicago Tribune down 5.17%. Paper readership has been declining for decades.

Magazines are even weaker. Magazine circulation was down 1.4% in 2010, and 2.25% in 2009. In 2010 Reader’s Digest lost 22% of its circulation; Newsweek lost 31%. Of the top 25 magazines, only Game Informer Magazine had a double digit increase in sales in 2010. (A print magazine to help you go online.)

And during the same time – as you already guessed – U.S. Internet advertising hit another all-time high. The Interactive Advertising Bureau showed a third quarter 2010 jump of 17% in ad revenues over the same period in 2009. Even twitter – once the domain of tweens talking about boy bands – has become a serious tool of politics and business.

So, as you re-think your marketing during this new age of advertising, is there any firm ground left? Is there any strategy that can keep your advertising decisions from becoming a joke?

Actually, there is, and it follows that other old management maxim:

“Keep it simple, stupid.”

The “KISS” method of management says that every business decision should be boiled down to its simplest form. For advertising and communications, that means knowing who you are and what to say about yourself. Know your product (often, the technology) and know your ideal audience (the market). Put the two together, and you will know exactly what to say (your brand). Leverage your brand to maximize your profit (your business strategy).

With a clear message, the choice of the best tool for delivery – online or offline, new media or old – becomes simple. With the right business strategy, the choice of advertising media becomes much easier. But without the right strategic thinking, your ad dollars will be wasted.

Yes, it’s a strange world out there in new media. Technology is changing daily.  But if you craft the right business strategy, you can become that change in the market that others fear.

This semester I am coordinating the MBA Entrepreneurship Laboratory. In this 1.5 credit class we have small teams of MBA students looking at area firms raising angel capital, or planning to raise capital. Students review business plans (if they exist yet), conduct independent market research, and generally critique the companies. Recommendations are given for improvements or additions to the companies’ plans. Students also help revise a firm’s “pitch” to prospective investors.

We are always looking for new companies to work with. These could be established companies seeking to raise their first outside funding, or even successful ventures seeking their second or third round. We also help startups that are little more than a plan on a napkin and a compelling story.

There are many issues to consider and hurdles to overcome in raising money. Business plans need to be complete. Financial projections must be reasonable. And proper legal representation is a must. For those who have never been through this process, just getting the checklist together can seem a big task.

Once these early steps are taken, there are several area groups who can assist in the fundraising. NVTC now runs an angel investor group that screens selected companies. The Mid Atlantic Venture Association (MAVA) has a regular investor breakfast to vet well organized companies. And TIE-DC has recently taken over the long-standing Grubstake Breakfast for matching investors with entrepreneurs.

But before approaching these groups, the rookie entrepreneur needs to do some homework. Who better to help than a Mason MBA student?

So if you know a budding entrepreneur starting to think about outside funding, give us a call. You may help someone (or yourself) become the next Steve Case or Ted Leonsis of Washington. Wouldn’t that be a nice way to start the New Year?