How to Take Your Startup Global
Exports as a means of company growth has gotten a lot of attention in the news recently with Obama’s National Export Initiative, one in which the President plans to double exports over the next five years to support two million jobs in America.
In the following Q&A, Damon Schechter, founder and CEO of Shipwire e-commerce product fulfillment service, addresses the “why” and “how” small businesses can begin selling their products around the world.
Q: I understand that your company has seen a surge in exports by small businesses. Can you please tell us a little more about that including ways in which smaller business can grow their businesses by “going global”?
According to our research, sales to foreign buyers – as a percentage of overall sales – by small to medium sized e-commerce merchants has grown from virtually 0 in 2007, to 9% in 2008, to 20% in 2009. And, we’re seeing even greater number of small businesses export in 2010. Though shipments have been spread to destinations around the world, the primary ones are to major markets in Canada and the U.K. We’re also beginning to see a lot of demand for American exports in Asia Pac, and Australia, specifically.
Q: We always hear about globalization; but, isn’t that just impacting big companies?
Not anymore! For years, big companies have seen large markets overseas and had the supply chain and sales experience to enter these growth markets. However, small businesses now are seeing global opportunities that they were either a) unaware of or b) were simply unprepared to take advantage of. Today, if a company has a fast selling product that they think they can sell in another country the only thing that stops them from entering that market is the degree of their desire. These newly global businesses can tap into known marketplaces or a trusted distributor, get their local advertising on demand from Google and store and ship product in the local market with a third party logistics company.
Q: What does “globalization” really mean when it comes to e-commerce?
When it comes to selling over the internet there is a “push and a pull” effect. The pull effect is customer demand. So, if you have a globally attractive product, overseas buyers may pull you into an overseas market with demand. This is especially true with the viral “border-less” nature of some marketing campaigns. The push effect is when a business looks at an overseas market and sees future profits. Today there is nothing to stop them from entering into that market and competing. Because of the “borderless” nature of online selling, smaller e-commerce companies are going to be the vanguard for SMB globalization.
Q: Why is Globalization now starting to accelerate for smaller businesses?
It seems that the tools are now in place to allow businesses of all sizes to have a global supply chain. It’s no longer true that you need a multi-million dollar product line or budget to benefit from overseas sourcing and selling. There are a suite of on-demand tools for managing everything from advertising to shipping.
Q: What is the biggest obstacle facing the overseas seller?
Successful overseas sellers are the ones who can find buyers at the least cost and get the product into those buyers’ hands in the shortest amount of time and with the least hassles. There are only a few ways to get the product into the buyers’ hands. International shipping by some method has always been the default; however, the distance makes it expensive and it can take days or weeks to get the product to the buyer which isn’t good for repeat business. If the buyer needs to return the product for whatever reason, international shipping back is a poor option for buyer and seller. Small businesses need to take a page from the playbook of the largest sellers and store product in the local market in a local warehouse. Shipping from a local warehouse means that there is no international shipping cost, the product gets to the buyer in a reasonable amount of time and the product can be returned to a local warehouse. Ideally, a small seller will have instant access to a global warehouse network service so it can cut its shipping costs and delivery time-lines. Such services are modeled on the success based, pay only for what you use offerings pioneered to SMBs by Google and PayPal.
Q: What are the things small businesses need to consider before moving products overseas for sale?
Assuming there is some market demand for the product and/or the business has a marketing plan, typically it’s best to focus on one’s top selling products. For most businesses, 20% of the product catalog will generate 80% of the sales. Focusing on just the best sellers will help limit the problem set. Businesses should also think about the customs and duties implications of bulk shipping into a local market. Borders are a reality in the physical world even when online software and the Internet has made borders less of a concern for closing business online. Sellers that do their homework can be assured that their products won’t get held up in customs.
Damon Schechter is the founder and CEO or Shipwire, a provider of outsourced e-commerce product fulfillment with warehouses in the United States, Canada and Europe. Outsourcing storage and shipping hassles allows businesses to focus on global expansion and keeps costs down. Reach shipwire at www.shipwire.com
Photo Credit: fdecomite
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Small Business Start-Up Priority #1: Your Office Desk
The Small Business Boom
With all the funding available these days for starting your own business, it is no wonder so many people are choosing to do so. And with so many new businesses around, it is important to ensure that you have the edge it takes to draw a profit in your market. For any business the bottom line is of paramount importance but for a business start-up even more so.
The smart way to surviving and prospering in the early years is by spending the necessary time planning and making smart investments.
Your principal, whether it consists of loans or your own saved cash, is the fuel that will get your business off the ground. The more you invest initially, the longer it will take for you to start turning out profits, but the more properly equipped for success you will be, assuming you plan well.
Your Office Set Up
Most home office set-up investments are used to purchase a few basic things:
A personal computer
An office desk
Peripherals (printers, scanners, extra speakers, fax machines, etc.)
Other job-specific necessities (computer programs, envelopes, etc.)
Of these, the most consistently needed are the first two: a computer and a desk. With the speed at which technology is constantly changing and developing, it is important to know what to look for in a computer, fortunately there is lots of information out there to help you with your PC purchase. Office desks, on the other hand, serve a more basic, less complex function, but there is surprisingly little to be found in the way of advice about this essential purchase, this is what I would like to spend some time on in this article.
When Shopping For an Office Desk
Keep in mind every aspect of your business throughout the process of shopping for your desk. Ideally you need to know how much business you expect to be doing, what the realistic requirements of that business would be, how much time you intend to spend at your desk each day and doing what tasks, and what your relationships with your customers and associates will be like.
A Desk That Speaks Success
Ultimately, the customer is the most important element in the success of any business. The more personable your business appears to your customers, the more likely they will be to choose your product or service.
So of course having an attractive office desk is important where you have a business that requires you to be meeting customers in person on a regular basis. An executive desk may well be your best bet, a Dmi executive desk for instance. Typically a traditional desk in Cherry Veneer, Mahogany or Walnut Veneer will do wonders for your credibility.
Some businesses, however, are run entirely online, and if this is the case then your top priority is that your desk be functional.
You can save a lot of money by buying a more plain-looking contemporary office desk, but which is also packed full of features, like; a hutch, under the desk storage space, grommets for cable management, lateral files, adjustable shelves, keyboard tray and computer tower storage.
The Right Desk for the Job
I reality your choice may not be as clear cut as I have suggested here. That’s to say you may never be receiving customers in your office but you may like to have something that still looks good. There are some nice metal and glass office desks which are inexpensive and offer great functionality.
There is an enormous range of available desks tailored to every imaginable function; in order to know what desk is right for you, you have to make a lot of decisions about what exactly your business is going to do. How extensive will your customer relations be? Will you correspond via email, telephone, fax, conventional mail, or all of these? Will you be shipping packages regularly? How much storage space will you be needing?
Each of these decisions has implications concerning what you will need in a desk, and under-planning by overlooking any of these details can be a costly mistake at worst and a pain in the rear end at best.
Used office desks are not easy to sell, and new ones are not cheap to buy. Make sure you know what equipment besides a personal computer your desk will have to accommodate.
You Know What Desk Is Best for You
While all of these factors are important, there is another overriding one, the way you feel about the desk you are thinking of purchasing. Starting your own businesses is one of the hardest things you can do. If you are serious about doing it without getting burnt out, you need to be satisfied with your work environment. Having the right office desk improves your attitude toward your business, increasing your chances for success.
Finally, because of the long hours required of entrepreneurs, it is important that you find a desk that fits your body type. Injuries related to computer use and other tasks that involve repetitive motions of the hands are no joke. The last thing you need is constant pain holding you back from accomplishing all you are capable of in your market. Take your time and find the right desk for you.
About the Author
Lloyd Burrell is an expert in office desk furniture and other office-related subjects and he is also publisher of the leading office desk review website. Lloyd is British, but currently lives on the West Coast of France with his wife and two children. His hobbies include traveling, enjoying French cuisine and culture, and keeping fit. Whether you are wanting to buy a DMI executive office desk or a ready to assemble office desk, Lloyd can help you find the right product for you.
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7 Ways to Save Big Money When Starting Your Business
Do you think you have a great new business idea? It is easier than ever to start a great company that looks and sounds professional for peanuts. With all the virtual services available today, you do not need many of the things that were traditionally required in years past. And to top it off, some are even free.
There are countless business owners starting companies with very little money and turning them into a multi-million dollar companies years later. Here are some tools and services you can use to help start your adventure.
Business Identity
First things first. Before your business can have any sort of existence, you need a company name, logo and identity. You can have a professional custom logo made for as low as $99 to $149. Thelogocompany.net has an impressive portfolio and are relatively cheap compared to others for how many different mockups you receive. Once you have a logo, you will need some business cards printed. Overnightprints.com will do it for as low as $10.
Office Space
If your business requires a place to conduct your work and meet with clients in a professional atmosphere, the cheapest way is to use what they call executive office suites. You are renting an individual office or room in a building housing a number of other offices all rented to other business owners. Many of them have common amenities such as furniture, phone, Internet, kitchen and meeting rooms. Web sites like readyoffices.com should help you find what is available in your area.
Telephone System
Technology has really improved and help advance telecom systems. Do you want your business to sound like a fortune 500 company with a phone system? You can with a service they call a virtual pbx or phone system. You can have your own toll-free number with an auto attendant. No matter where you are, you can sound professional and stay connected. Companies like grasshopper.com have plans starting at only $10 a month. There is also a service called Google Voice that is fairly cool and free. It allows you to pick a local number that you can have forwarded to as many land lines or cell phones as you want.
Faxing
Buying a fax machine is so 1990 and using a digital or virtual fax service online is so 2010. You can receive faxes and download or have them emailed to you. Faxesanywhere.com is a good choice for only $7.95 a month.
Credit Card Merchant Services
Like most businesses, you may need to accept credit cards as one of your payment methods. If you need this ability, we recommend obtaining a merchant account. This is a professional way to accept credit cards as well as having the most products to choose from to process your cards. Such products can be terminals, Internet gateways, wireless terminals, electronic registers, etc. There are hundreds of processors to choose from including many of your local banks. MerchantMaverick.com is a great review site that has reviewed almost a hundred different processors and should help you find a solid, reliable processor.
Making it Legal
Many businesses should opt to incorporate their business. Forming an LLC has become the most popular option in recent years. It has a lot of benefits over other structure types and is relatively easy to do. You can use a service like legalzoom.com or do it yourself for free. You will still have to pay the state fee regardless of how it is done. To do it yourself, simply go to your Secretary of State’s web site. Follow their instructions on how to file, fill out the articles of organization form and submit the papers. If you are a sole operation, it is not necessary to file the Operating Agreement. This agreement spells out the financial and management rights & responsibilities of the LLC members. You can file this anytime after you form your LLC, but it is recommend to work out the details before hand with any other partners to avoid any agreement issues. You can find templates for this file online for very cheap and even free possibly.
Number Crunching the Easy Way
Hiring someone to do your book keeping can be expensive. You can do it yourself for not very much. There are several online services that charge very reasonable prices, such as outright.com and freshbooks.com. Freeshbooks even has a free plan to get you started.
About the Author: Curtis Stevens is with Gotmerchant.com, a merchant account provider that helps merchants accept credit cards. They also provide ecommerce tips to businesses through their company blog.
Photo Credit: krossbow
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Three Keys to Startup Success
Once the lightbulb turns on, there is no stopping a determined entrepreneur. He works diligently, night and day, to outline the business plan, the product plan and brainstorms how to find funding. He bursts with excitement when telling others about his great idea, and quickly gets his business off the ground and headed toward startup business success.
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What’s missing from the scenario above? If you answered “everything in the middle” you’d be right. Within any startup business, there are many factors that go into ensuring business success. Each of these ingredients can be brought together to build one, solid business foundation to grow the success of the business as a whole.
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Assuming you already have a strong product or service offering and you have the resources to start the business, there are 3 key ingredients that can mean the success or failure of the business recipe: The Right People, The Right Tools and The Right Energy.
The Right People
Having the right people in your business is huge! When hiring a team to help bring your business increased success, make sure they have the following:
- A can-do attitude
- A roll-up-your-sleeves mentality
- The brains to improve the business and processes
- The guts to take chances
- The desire to succeed
This might seem like a lot to ask, but if you don’t see these traits in the people you are interviewing, do not hire them. It will cost you time, money and energy just to find out that the decision to bring them on board was a bad one.
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However, if you hire people who exemplify the traits above, you have just scored yourself a big win. These team members will work hard for you, will be dedicated to the business and the product and will bring your team forward toward greater business success.
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You can’t take chances here. Make sure you hire the right people right off the bat and watch how they help shape your business for the better.
The Right Tools
It’s no longer enough to give your employees a computer, a phone, an email address, a desk and chair and expect them to work efficiently. You now need to give them access to the right tools with which to communicate, stay organized and keep on task.
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How do you prefer to communicate with others in your business? Is email working as well as you’d like? My guess is probably not. Outline communication processes and look for online solutions that facilitate greater communication and collaboration. Social media-like services mixed with instant messaging and communication storage can greatly increase the outcome of each online conversation, and bring team members together.
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Find easy online solutions to store business documents, customer files and training information as well. And try to keep all this organized in the same system in which you manage work. Scheduling tasks, managing projects and organizing work with documents and communications only increases the efficiency of the work tools you use, and you will love the way it easily brings people and work together.
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Giving your team access to these types of solutions will start them off on the right foot and increase their ability to stay organized, on task and increase successful business communications.
The Right Energy
Startups thrive off of the energy and entrepreneurial spirit of their people. It takes a lot of nights and weekends to make a startup business successful, and without the right energy in your team and your business, that work either won’t get done or won’t be of high quality.
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So how do you keep the people in your business energized and excited to tackle the work at hand? Here are a few tips to do just that:
- Work together
- Stay organized
- Celebrate success
- Have fun
Building up the positive energy in your team and showing them the fruits of their labor can dramatically increase their desire to continue working and to put forth the effort it takes to increase your startup success.
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By ensuring you are including the right people, tools and energy in your startup, you are virtually guaranteeing yourself great business success. So roll up your sleeves, get to work and watch your business turn into something great!
About the Author: Dana Larson is the Marketing and Community Manager at OnePlace, an online business collaboration and organization solution that increases the effectiveness of business communications and team productivity.
A smart and outgoing gal, Dana and the rest of the OnePlace team blog regularly about team collaboration, business techniques and productivity solutions at http://blog.oneplacehome.com
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Photo Credit: otodo
5 Survival Tips for Today’s Savvy Entrepreneur
My joy was short lived. After waiting about a month for a client to pay me on a (5 day net) creative project, the check came in the mail. I did the “happy dance” ‘til I was dizzy!
Getting paid would allow me to catch up on some of my obligations as a small business owner myself, already struggling in a struggling economy.
I began to figure out my bills and hope for a few left over dollars to do a
mini-splurge at the local thrift store.
Before the ink could dry on the check, the client contacted me. She asked me not to cash it, as the funds would not “officially” be available for another week due to an unanticipated emergency. Needless to say, I was shocked and devastated.
The check was already late, and based upon my income projections, I promised to pay several of my vendors. Her not honoring her word prevented me from honoring mine. And unfortunately, it wasn’t the first time.
Not long before that, a publisher with whom I had enjoyed a long-term business relationship, came down with a bad bout of the flu, and extended his apologies for not being able to issue checks because he was bed-ridden for two weeks.
Life happens. That goes without saying. But just because you’re a “small” business owner doesn’t mean you should be “small time” in the way you conduct your business or handle crisis management. In fact, you should be more prepared for mishaps due to fewer resources. The buck stops with you!
Not providing for “the worst case scenario” can cause irreparable damage and affect your ability to compete with larger businesses; ultimately costing you in terms of customer loyalty, client confidence, and bottom line objectives.
After all, folks figure if you can’t handle your business challenges, why should they trust you with theirs?
Whether you manage a staff of one or 91, here are a few business practices you should employ to cover your assets and protect your bottom line.
EXPECT THE BEST BUT PREPARE FOR THE WORST
Do you have a back up if your files are destroyed on your hard drive? Do you have systems and people in place if you become ill or need to take a vacation? Are your records well kept if someone needs to temporarily assume your duties, or establish a paper trail of your activities? Could your business recover if you lost a key client? These are all points to consider in your strategic planning. Always have a plan B.
HAVE AN EMERGENCY FUND
“Save for a rainy day” has become more than a cliché; in today’s economic climate it’s as crucial as a commandment! Experts differ in the exact amount an “emergency fund” constitutes—some say the equivalent of three months salary, others advise six months. Apply it to your individual lifestyle and circumstances, then act accordingly. Today.
EMPOWER YOUR STAFF
Hire competent people and give them the training and resources to act independently in resolving small customer issues. Assigning them responsibility and accountability helps them to develop personally and professionally, and improves the efficiency of your organization. Understaffed? Hire an intern.
ESTABLISH SUPPORTIVE ALLIANCES
Don’t perceive all your peers as a competitive threat. Seek out owners with whom you have a compatible work ethic and similar visions and values, and find ways to enhance each other. This can be accomplished through online groups or networking associations dedicated to your particular field or trade.
HONOR YOUR WORD
Many small business owners go to great lengths to overcome perception issues and convey a professional image. They invest in elaborate web sites, purchase fancy business cards, and go the whole nine yards to recruit clients and impress associates. But all these measures can be in vain if they establish a reputation of repeatedly not honoring their word– whether it’s to a client, a vendor, a business partner, or employee. Never over promise and under deliver. Don’t say one thing and do another. Always strive to keep your end of the bargain because ultimately your livelihood affects others.
Follow these five tips and you’ll successfully navigate the many “obstacle courses” that come with owning a small business, and you’ll breathe easier too.
About the Author: Jennifer Brown Banks is a veteran freelance writer who teaches at Coffeehouseforwriters.com and blogs at Bloggingpro.com
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Photo Credit: eflon
7 Secrets to Keeping Your Start-Up Supercharged
When you start a new business, there is a certain “energy” in the air. Although there is a lot to get done, you and your team are excited about the work. How do you keep that energy going?
Here are the 7 secrets to keep your start-up supercharged through team collaboration and business organization best practices, so you and your team can focus on moving forward and increasing your business success.
1. Work Hard
With a start-up, you know you will have to work your tail off to build your business, brand and success. Know that the blood, sweat and tears that you put into your new business will be well worth it in the end. That’s enough to keep you energized and working toward your goals.
2. Have Fun
Never stop having fun. This is the best way to keep that energy up. Learn how to mix business with pleasure. If playing pranks on your teammates gives your office that lighthearted feeling, go for it. Maybe even take an afternoon off every once in a while and go on an all team activity or dinner. Find ways to inject some fun and excitement into your business, and the energy will skyrocket.
3. Stay Organized
One main benefit of keeping your business organized is that you won’t be distracted by the chaos and mess of disorganization. Store your business documents securely, manage projects and tasks with an online project management system and keep communications and collaborations in the same place as the work that is being done. You will save yourself a lot of searching time if you organize everything well right off the bat.
4. Collaborate
Work together. Talk to each other. Include all hands on each project. Find ways that bring team members together and listen to everyone’s suggestions on how to make the business better and more successful. This way everyone has a hand in the success of the business, and the pride they feel will keep them working hard toward future success.
5. Keep Learning
Business techniques, strategies and best practices are changing all the time. Continue learning – either through additional business classes or hands-on trial and error – to keep your mind active and the better ideas flowing. Offer continued education opportunities to your employees as well, to make sure you have the cutting edge of business knowledge on your team.
6. Hire Good People
Don’t be afraid to invest in the right talent. Having good, dedicated and intelligent people on your team will only better the organization as a whole. Along with almost guaranteeing great business success, the right team members will encourage and excite others to reach their greatest business potential as well.
7. Celebrate Success
Excellent – you’ve achieved a goal! Good for you! Don’t forget to celebrate that success by honoring the team lead or those who worked hard on the project with recognition or a small token of appreciation. And here is another great opportunity for a team event to celebrate that success, and inject a bit of fun and energy in your day, to keep your team working hard toward even greater success.
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With continued high energy in your office, your people will have fun while working hard toward increasing your business’s success. Whether your company is still in start-up mode or has been going strong for 20 years, following these steps will inject some productive energy into your team and you’ll love the outcome you see!
About the Author: Dana Larson is the Marketing and Community Manager at OnePlace, an online collaboration and business organization solution that increases the effectiveness of business communications and team productivity. A smart and outgoing gal, Dana and the rest of the OnePlace team blog regularly about team collaboration, project management, business techniques and productivity solutions at http://blog.oneplacehome.com
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Is My Idea Good Enough to Start a Business From?
Today is the second part of our four part series in response to a reader’s question. If you missed part 1, you can catch up here.
The question at hand today is “Is your business idea good enough”? As we all know, “good enough” is relative, but I will provide some ideas for you to think through in answering that question for yourself.
Ask the Question Another Way
I hear this a lot, “do you think my idea is good enough to start a business?”…and normally what people mean is “do you think I’ll make money doing this?”.
The short answer is- most ideas you can think of are good enough to start a business around – in short you can probably make some money doing almost anything.
The real question is whether or not your business idea is worth the risk, and will provide adequate reward if it works out. For sake of argument let’s say adequate return is enough money for you to live on, at least replacing your current income.
So now the question changes once again, this time to “given my idea, what is the potential?” We’ll talk about potential in a minute, but first let’s dispel some myths about what your business idea should be.
Business Idea Myths
To make an adequate return, your business idea doesn’t need to be:
- Revolutionary
- Totally unique
- Game changing
- Competition free
Now, you’ll make a heck of a lot more money if your idea happens to be one of the above – but the honest truth is very few of us will invent the new wheel, or be so unique we become our own category.
You can make your adequate return, and then some, if within your business idea you can see your unique selling proposition.
Unique Selling Proposition
Simply put your unique selling proposition (USP) is the reason I’d buy from you and not a competitor. What makes you special, why do you deserve a share of the market?
For example let’s say you want to start a lawn care business. You know lawns, your tomato plants are huge, and the azalea’s in your yard are the envy of the neighborhood.
Great – you’d probably make a very good lawn care person, and make money doing it. But, will you make an adequate return?
Probably not if just doing lawn care is eh extent of your idea.
Take for example: Where I live there are literally 1000’s of lawn care people. Why am I buying from you, what’s your USP?
Your potential USP’s may be:
- Creativity
- Service
- Convenience
- Price
HINT – Best not build your USP around price. It’s a very hard way to compete, and only a matter of time before somebody bigger and more efficient comes in a does it cheaper than you. Don’t believe me? Try selling toilet paper cheaper than Costco.
Okay, so you tell me “Matt, my Lawn Care business will focus on organic lawn care that is pesticide free. I offer free same day quotes for service, and tailor my schedule around the homeowners.”
Hey, now we’re on to something. You’ve taken your idea which 1000’s of people do and turned it into a special offering. If I’m into pesticide free gardening, I’m using you and not your competition who killed my cat with chemicals last spring.
The Market Potential
Once you have your business idea, and understand what your USP is, the last piece of the puzzle in deciding whether your idea is good enough is to look at the market potential and assess if it will provide your adequate return.
Three questions to ask when assessing market potential.
1) How big is the market?
2) What share can I get?
3) Is that enough?
Back to your lawn care business.
You know your area has 10,000 homeowners. There are only 2 people in your area providing organic lawn care, and you’ve heard they aren’t very shall we say “customer orientated” – given that you think you can get between 2-5% of the lawn contracts in your neighborhood (a small amount, but you are offering a very specialized service).
That means you can get around 300 contracts from your market. You also know that each lawn is worth about $200/month in profit, which works out to a profit of $60,000/month or $720,000/ year. Is that enough? Is your business idea “good enough”? That’s for you to decide when you run the numbers yourself.
I know, I know, you couldn’t do 300 lawns a month yourself so you’d have to hire people which would cut your profit, but that’s a blog post for another day.
To Summarize
You can see that deciding whether an idea is good enough to start a business around is a relative question. The good news is most ideas have the potential to make some money, they don’t need to be revolutionary, and quite often you won’t be the “game changer”. If you know your USP, and your market well enough I’m sure you can see how an “ordinary” idea could turn into extra-ordinary profits.
Your job is:
- To decide how much you need for an adequate return,
- Do you have a USP, and
- Do the market dynamics offer enough potential to pursue it?
Coming Up
Coming up next in this series we’ll look at:
Stay tuned…
Photo Credit: alancleaver_2000
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Small Business Questions from a Reader
A reader of Small Biz Bee, Josef, recently asked me a very good question.
“I think a pretty interesting topic with rather limited coverage is how to decide whether an idea is worth starting a business. How to decide it’s worth quitting a safe, well paid day job? Should the idea be revolutionary? Or at least novel? Or it may be rather ordinary, just betting on good execution? Should I start only once I have a detailed business plan with detailed market research, or is that just a perfection paralysis and I should rely more on gut feelings? What are the signs it could go well or all wrong? Starting a new business may well be the most important decision in people’s life so no wonder it’s surrounded by endless questions and any guidance is highly appreciated.”
No doubt Josef is dealing with the myriad of questions that anyone thinking of starting a business goes through. And I agree, there is limited “real world” advice on the subject.
So, instead of answering all of Josef’s questions via email I’m going to answer them all right here in a four part series beginning tomorrow.
What We’ll Cover
- How to decide it’s worth quitting the safe, well paid day job to start a business
- Is your business idea “good enough”?
- Overcoming perfection paralysis
- Following the signs – early signs that your venture could go well, or all wrong.
Stay Tuned
That’s what we have on the docket in the next few days. I invite all of you to stop back by and check out the articles, and please lend your own expertise and opions to the subject in the comments of each.
Want Your Question Answered?
Do you have a business question you’d like answered “on air” here at Small Biz Bee? Drop us a line, we’d love to hear from you.
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A Great Pitch Can Win the Game
While the task of pitching your company is often used to impress financiers, a good pitch is valuable when you are presenting your company to anyone who can possibly help you get ahead.
This could be customers, suppliers, angel investors, or anyone else who would have an interest in what your company does who can help you in some way.
Getting your pitch together is not hard, but well worth the effort you put into it. You would hate to be like the entrepreneurs Guy Kawasaki is speaking about in the following quote:
As a venture capitalist, I have to listen to hundreds of entrepreneurs pitch their companies. Most of these pitches are crap: sixty slides about a “patent pending,” “first mover advantage,” “all we have to do is get 1% of the people in China to buy our product” startup.
Guy Kawasaki
What does it take to make a great pitch, and impress the right people?
Keep it short
As the quote above illustrates, you don’t need to go into painstaking details about your company when you are pitching it. Let your business plan do that.
Guy Kawasaki recommends no more than 10 slides in your presentation, which cover the following:
- Problem
- Your solution
- Business model
- Underlying magic/technology
- Marketing and sales
- Competition
- Team
- Projections and milestones
- Status and timeline
- Summary and call to action
Focus on problem/solution
There’s a reason that problem and solution are #1 and #2 on Guy’s list.
That’s what a successful business boils down to. What’s the problem, and how does your business provide a solution. Craft your pitch around that idea, and present it in such a way that your audience has the same “ah ha” moment that you did when you were starting up.
Excite and engage
A main goal of the pitch is to get your audience excited about your business, and engaged in what you are saying. How do you do this? First, YOU must be excited and engaged…if you are going through the motions, or aren’t 1000% excited about your company’s prospects, your audience will feel it.
Be Realistic
As business owners it’s in our nature to believe our businesses will one day conquer the world. That is fine as an internal driver, but in your pitch be realistic about your growth, development, and projections. It’s great to be excited about your future, but saying you’ll capture 75% of the market in the next year begins to sound a little lofty, and could dilute your message.
Be Honest
Don’t make anything up! If you are asked a question you don’t know the answer to, fess up to it, but commit to find out. Remember your integrity and your company’s integrity is on the line. Don’t jeopardize that by peppering your pitch with white lies or ½ truths.
Keep these ideas in mind the next time you’re making a pitch for your company, and remember a pitch doesn’t necessarily have to be in front of a bunch of venture capitalist to be effective.
Listen to Yourself Sound Crazy
Below is the fourth article of six in our $100 competition, submitted by Chloe who you can find at sistp.blogspot.com. Good luck to everyone who contributed an article!
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I’ll preface this by stating that I don’t have a business of my own, yet. I’m in the ‘idea phase’. Actually, I have the idea, a great one (in my humble opinion) at that. I’m in the ‘learning phase’, to be perfectly honest. I’m trying to gain as much information about starting up a business as I can; attending open coffees, learning about different forms of capital, joining the appropriate networking sites and groups to build my network, and maybe most importantly, allowing myself to sound ‘crazy’.
There are so many things that would point someone such as myself away from starting a business at this point:
a) I’m 25 (too young! Too risky to start your own business!)
b) The economy sucks (no way to get financing! Money cannot be found!)
c) Just started my current dream job (you just started a great job! Focus on that!)
d) I’m in graduate school (you have no time! That ‘after 5pm’ time slot is filled with school work!)
e) DEBT. (hello, student loans and your amazing non-profit, low-paying job!)
So, at this point, when I have the great idea that also seems feasible, it is most daunting to tell my friends, colleagues, family, and fellow classmates, that yes, actually, I am planning on starting my own business. “Oh, really?” they say. Sometimes it is as though they are just entertaining you. But, and there is always a ‘but’, it is crazy. And that is okay. The world is changing, businesses new and old and large and small all are trying to figure out how to adjust to a changing world, when no one knows exactly what the world is changing into.
So for someone, such as myself, to say ‘hey, I want to build a business that can help people and other businesses work and adapt to these changing times NOW, not later’, it is crazy. But at the end of the day, it’s the crazy ones who will survive these times. It is the crazy ones who can make successful businesses develop, grow and thrive out of situations that seem impossible to overcome. Because if we don’t, who will?
My goal is to create a coworking space in Washington, DC that also provides a space for job retraining, and youth IT/entrepreneurship development. Ideally, the space would also turn into an incubation space for new businesses as well. In this day and age, communities and businesses need to get better at sharing and utilizing resources in ways that are beneficial to the business and also to the larger community or world (for example, start-ups sharing resources such as printers to cut costs or entrepreneurs hiring youth to perform some of their administrative tasks and provide mentorship). So, while I am working on picking up and building skills that will help me start this new venture, I am getting used to hearing myself sound crazy and reminding myself that not only is it okay, but necessary.
Can’t Decide What Small Business To Start?
Want to start your own business, but can’t think of a business to start? Coming up with small business ideas may not be as hard as you think.The following exercise could help you discover that million-dollar idea inside you! I like to call this Focused Brainstorming, and it should get you thinking about businesses to start while focusing your efforts on activities you like to do and things that you are good at.
To Get Started
Take out one piece of paper…draw two lines down the center creating three columns. Label your columns: “Like List”, “Good at List”, and “Business Ideas”.
List Number 1: The Like List
Write down a list of everything you enjoy. What do you do for fun? Have any hobbies? What about topics you like to read about or learn about? Compile a list of everything you find enjoyable, and don’t limit your thinking by saying things like “I like ____ but would never be able to make that into a business”. ANYTHING can be turned into a profitable business, and the more you enjoy the topic the better chance of success you’ll have.
List Number 2: Good at List
Write down things you think you are good at. Anything you believe you have a certain aptitude or skill for should be on the list.
Look for Overlaps
From these two lists you have literally dozens of business ideas, and hopefully you are seeing some overlapping between the two lists. Start making connections between the two.
Business Ideas List
What do you have in the Like List that could be complemented with something in the Good at List. Take the overlapping connections you made, and begin to brainstorm ideas.
Continue to add to each column of this list and you will have numerous ideas for a small business. Keep these lists with you, and as you think of new things you like or are good at make sure to add them. Each “Good at” and “Like” will produce many more small business ideas for you…so think of the list as a work in progress until you find something.
The beauty of brainstorming in this fashion is that you are focusing on things you like to do, and complimenting them with things you are good at. This is a winning combination for you to decide what kind of small business to start.
Startup Cost – What’s it Take to Get Going?
A question I get all the time is, “What’s it cost to get up and running?” And in that phase of startup euphoria usually they don’t even wait for my response before following up with “Well, how much? Huh, give me a number…come on, I got a great idea I need to get on this now!” To which I reply, “It depends”…their face goes blank, they feel they’ve been cheated, what do I mean “it depends”, they just want a number so they can “GO GO GO!!!”
The unfortunate (or fortunate depending on how you look at it) truth is, it really does just depend. It depends on what kind of business you are starting, what your income expectations are from that business, and how (or if) your personal finances are in order. The cost to get going will be much different if you are starting “Fancy, Dancy Micro Chip Factory, LLC” than “Phil’s House of Hot Dogs”
What kind of business are you starting?
The nature of the business will drive much of the initial startup cost. If your business will require heavy machinery, high paid specialist (think Architect), buildings, or loads of inventory (retail) your startup cost are going to be exponentially higher than someone starting a small home based business, or someone providing a service such as consulting, web design, or income tax preparation. The latter is not necessarily better than the former just because it requires less capital up front, but initial expenses (and where that money will come from) should be carefully considered when trying to find the business that’s right for you.
What are your income expectations from the business?
- Is your business going to be producing cash from day one (rare)?
- Will you need some capital reserves to sustain your business, and personal expenses until it starts producing income (more likely)?
- Do you have other sources of income (other job) that will help bridge the gap while you wait for your business to turn a profit?
- When do you expect to see a profit?
- How much profit?
All of the questions above will influence the amount of money you will need in order to get your business up and running. The answers to each will vary depending on your personal situation, the type of business you are running, the market you operate in, and your long-term projections for your business. The general rule of thumb is to have at least 3 months worth of money available to carry you and your business in the beginning.Put it this way, I have never seen a business start with too much money, or have too much money available to them in the startup phase. So three months is definitely the guideline instead of the rule.
Are your personal finances in order?
I’ve seen a lot of businesses fail because the owner’s personal finances are not in order. What could have been a successful venture gets bled dry because the owner expects too much in the way of spendable income from the business than it can sustain in the early phases. The more stable your personal financial situation is the less money you will need during the startup phase. If you will continue working your 9 to 5 job during the startup phase you can afford to have less in capital reserves than if you quit and go full time into the new venture.
Final Words
So you can see we’ve asked about 1,000 questions and have yet to provide a solid number as to what it cost to get going. Feel cheated? We hope not, because as you can see there is a multitude of considerations that will affect the cost associated with getting you up and running.
