Your role and perspective is important - owner with the idea, investor, consultant, partner, etc. There a couple of things that shouldn't be skimped on or skipped over during the "diligence" phase.
-- Be careful about "believing your own internal press" and work to understand and validate the going-into-business and go-to-market assumptions.
-- Develop your purpose and vision for the business, and why you want to be in it besides making more money. Is there an end game?
-- Go beyond market research and engage prospects and customers to understand real needs, perceptions, problems, and buyers motivations
-- Get the overall business models - revenue, sales, marketing, and customer experience and process figured out before investing heavily in product or service development
-- Resist the urge to make strategic decisions based on what the competition is doing (see comment on assumptions!)
-- Engage prospects early and often and don't hesitate to shift your solution based on their input/feedback.
I have seen quite a number of start ups focus solely on creating plans to get the funding, and fail to adequately flush out the customer/marketing/sales models and lose sight of why they went into business.
Do your market research. If you can, develop a prototype or develop a proposed menu of services & proposed price list, etc. and get feedback from the prospective customers you will be targeting.
Remember that people love it when you ask advice so really listen to these survey takers and be open minded. I have seen some start-up businesses get such enthusiastic feedback from this kind of market research that they created a customer list with pre-orders in one example, and got multiple free consulting offers & business referrals ($100Ks in sales) in another example.
Do your market research by talking to not only potential clients or customers, but also your competitors. Find out what they are doing right, what do you like about their services - and can you offer that too. Find out what they are doing wrong -or how you can provide the same service in a better or more efficient manner. This also allows you to make personal and business connections, in addition to allowing you to "test the waters".
Showing posts with label Business Start-Up. Show all posts
Showing posts with label Business Start-Up. Show all posts
Monday, February 13, 2012
Tuesday, January 19, 2010
Advice For The Start-Up Entrepreneur
This advice isn’t meant to be all inclusive …. but should give you a good foundation to jump off from. Hopefully it’ll help you avoid some of the problems or issues you face when you begin.
For starters (pun intended) …. Read "Art of the Start" by Guy Kawasaki to give you the right foundation.
My number one piece of advice would be to do your research BEFORE you start. Talk to potential customers, suppliers, and industry associations. Find out for sure if your business model is in demand - especially in this economy.
Is there too much competition? Are profit margins adequate? What are the key skills needed to suceed and do you have those?
In short - find out about the business before you start.
Some very general but practical tips are …..
1. Whatever it is you are trying to build, build it fast (even a prototype) and hit the market right away. You will almost never get it right the first time. But if you are lucky you will get a lot of feedback from the customers about your product.
2. Best thing that can happen to a start up is getting an industry leader as your beta customer. If you can find one, you have got a game to play.
3. If you are product company, invest in your first few accounts. Don't start being transactional and look for profit from day one. (if you can afford to do this). Products only make money when there is scale. Remember, all you are looking for from your first customers is "yee ha! this product rocks." comment. Ensure you get it.
4. When the going gets tough (and invariably it will), have the patience and the determination to stick through.
Another piece of wisdom that deserves stand alone mention for anyone starting a business is ….. "Find out what the customer wants and give it to them'. Which means listening to prospective customers and making changes to your product and service - fast.
The faster you do this the faster you will grow.
The problem is most people start a company for their own reasons and are slow to accept 'change'.
Some final insights to keep in mind are ……
1. Find something that you enjoy doing, that you are really good at and tweak it to provide a product or service of real value to people that people really need.
2. People who are looking for solutions to their problems can often be your best customers if you can squarely meet their need and add value.
3. The cost of your product or service should be a small fraction of the value they receive and you need to think of scale to drive more revenue in most cases.
4. In a competitive market find what the others are not doing well or find a segment that they are not serving and focus on that niche.
5. In real estate it is all about location, location, location. In entrepreneurship and small business it is all about specialization and niche marketing. You cannot do everything equally well.
6. Starting a company is not just knowng all about the product or service. It is also accounting, finance, strategy, cash flows, banking, taxation, contracts, legal issues, intellectual property, human resources and a lot of other things. You need the right resources.
7. Many people feel threatened by people who are smarter than them but if you need to be succesful you need to surround yourself with real smart people and you need to manage and reward them well.
8. Be generous and big hearted else the high achievers may not stay with you for long but will look for other prospects.
9. Understand your customer's needs and position your product well in the market to meet your segment's needs.
10. Be aware of barriers to entry to your market for others and think about how you can build sustainable long term competitive advantage.
Commit to your idea 100%. Dabbling in it, worrying about your day job, telling yourself you just can't afford to work at it full time because it doesn't pay yet - that will kill your business.
If you tell yourself you just can't afford to go all in, all at once, then it's just a hobby. You only get out of it what you put in.
Watch and track cash like a hawk...especially as growth increases (that is when you are most likely to run out of cash).
Be marketing and selling continuously.
Under-promise and over-deliver.
Clearly communicate why you're different than your competitors - and why they should choose you over your competitors or just doing nothing (or staying with their current provider).
When you hire, hire good people who are willing to chip in to do whatever is required - you won't be at the point for hiring specialists until you get much larger.
Enjoy the excitement and fun of a startup enterprise. As you build your business you'll think back to this time with fond memories (and forget some of the painful ones and long days).
For starters (pun intended) …. Read "Art of the Start" by Guy Kawasaki to give you the right foundation.
My number one piece of advice would be to do your research BEFORE you start. Talk to potential customers, suppliers, and industry associations. Find out for sure if your business model is in demand - especially in this economy.
Is there too much competition? Are profit margins adequate? What are the key skills needed to suceed and do you have those?
In short - find out about the business before you start.
Some very general but practical tips are …..
1. Whatever it is you are trying to build, build it fast (even a prototype) and hit the market right away. You will almost never get it right the first time. But if you are lucky you will get a lot of feedback from the customers about your product.
2. Best thing that can happen to a start up is getting an industry leader as your beta customer. If you can find one, you have got a game to play.
3. If you are product company, invest in your first few accounts. Don't start being transactional and look for profit from day one. (if you can afford to do this). Products only make money when there is scale. Remember, all you are looking for from your first customers is "yee ha! this product rocks." comment. Ensure you get it.
4. When the going gets tough (and invariably it will), have the patience and the determination to stick through.
Another piece of wisdom that deserves stand alone mention for anyone starting a business is ….. "Find out what the customer wants and give it to them'. Which means listening to prospective customers and making changes to your product and service - fast.
The faster you do this the faster you will grow.
The problem is most people start a company for their own reasons and are slow to accept 'change'.
Some final insights to keep in mind are ……
1. Find something that you enjoy doing, that you are really good at and tweak it to provide a product or service of real value to people that people really need.
2. People who are looking for solutions to their problems can often be your best customers if you can squarely meet their need and add value.
3. The cost of your product or service should be a small fraction of the value they receive and you need to think of scale to drive more revenue in most cases.
4. In a competitive market find what the others are not doing well or find a segment that they are not serving and focus on that niche.
5. In real estate it is all about location, location, location. In entrepreneurship and small business it is all about specialization and niche marketing. You cannot do everything equally well.
6. Starting a company is not just knowng all about the product or service. It is also accounting, finance, strategy, cash flows, banking, taxation, contracts, legal issues, intellectual property, human resources and a lot of other things. You need the right resources.
7. Many people feel threatened by people who are smarter than them but if you need to be succesful you need to surround yourself with real smart people and you need to manage and reward them well.
8. Be generous and big hearted else the high achievers may not stay with you for long but will look for other prospects.
9. Understand your customer's needs and position your product well in the market to meet your segment's needs.
10. Be aware of barriers to entry to your market for others and think about how you can build sustainable long term competitive advantage.
Commit to your idea 100%. Dabbling in it, worrying about your day job, telling yourself you just can't afford to work at it full time because it doesn't pay yet - that will kill your business.
If you tell yourself you just can't afford to go all in, all at once, then it's just a hobby. You only get out of it what you put in.
Watch and track cash like a hawk...especially as growth increases (that is when you are most likely to run out of cash).
Be marketing and selling continuously.
Under-promise and over-deliver.
Clearly communicate why you're different than your competitors - and why they should choose you over your competitors or just doing nothing (or staying with their current provider).
When you hire, hire good people who are willing to chip in to do whatever is required - you won't be at the point for hiring specialists until you get much larger.
Enjoy the excitement and fun of a startup enterprise. As you build your business you'll think back to this time with fond memories (and forget some of the painful ones and long days).
Monday, July 6, 2009
Recommended Resource For A Small Business Start-Up Kit
You're a new start-up small business filled with excitement and anticipation .... a healthy dose of anxiety and stress too.
So much to do .... so many choices to make .... where do you turn to keep it all together?
What you need is to have everything in one place ... that would make it so much easier to manage and stay on course.
But how can you do that?
Well ..... here's a recommendation:
The LaunchX System is a complete small business startup kit comprised of a Handbook, Workbook, Employer’s Manual, Marketing binder, Business Entity Records, an annual planner, five key software packages, and three marketing reference books. The LaunchX Handbook is the cornerstone of the program, with over 650 pages packed with critical startup know-how. Each topic in the Handbook is coupled with fill-in-the-blanks worksheets in the accompanying Workbook that walk entrepreneurs step-by-step through the planning process.
The Handbook begins with getting organized and determining the image and culture of the new business. As it progresses, the soon-to-be business owner selects and registers their business and domain name, starts networking, and selects their Big Five support professionals. The next major topics are an informal business plan, a complete and detailed marketing plan, and pro forma financial statements. At the end of the planning section is a highly informative chapter covering all the ways to finance a business, starting with your own resources all the way through venture capital.
Once the planning phase is complete, the Handbook contains chapters on putting the plans into action and specific issues that will arise during operations, including financial management, marketing, and ongoing planning. Finally, there are reference chapters that contain more in-depth information on topics such as selecting the correct business entity, operating a business from home, selecting commercial real estate, internet and website development, supporting professionals, and international trade.
In the Employer’s Manual, the same step-by-step processes and fill-in-the-blank worksheets are used to take the entrepreneur through the process of becoming an employer, including legal and tax issues, alternatives to direct employees, writing job descriptions and job advertisements, interviewing, hiring, and managing employees. The included Office Policy software provides a complete collection of HR necessities – policies, forms, posters, and state-specific clauses for the employee manual.
Also included is a tabbed binder to contain all the marketing research and plans along with extra copies of all the marketing Workbook pages so that future marketing campaigns can be planned using the same process. The Business Entity Records Binder contains sample agreements and forms needed by both LLCs and corporations, along with custom tabs to keep it all organized and compliant.
The five software packages cover the areas that all small businesses will need – accounting, marketing, business forms, and human resources. Peachtree Pro accounting software provides a firm foundation for financial management, with its GAAP compliant structure and ease of adding users for growth. ACT! contact manager supports all types of marketing efforts, and allows the small business owner to provide personal service to all their customers. The two packages from TemplateZone contain templates for all types of office and human resources forms, as well as the ability to craft an employee manual quickly and correctly. Finally, The Logo Creator from Laughingbird Software is a quick way for the small business owner to create a logo.
The tone is friendly and accessible, and the system encourages new business owners to maintain control and responsibility throughout the startup process. There is an emphasis on bootstrapping along with a balanced acknowledgement that using outside professionals is sometimes necessary. The workbook pages are designed to be completed by hand rather than on a computer, but the LaunchX argument that writing ideas out longhand increases creativity and clarity has merit. There is a lot of information here, and the majority is relevant to an entrepreneur in any industry.
Overall, the LaunchX System has all the components that a small business startup needs to turn their idea into a successful business and to then build a successful company.
If this sounds like just the "hand up" you need to get off on the right foot .... you can learn more here:
LaunchX System
====================
So much to do .... so many choices to make .... where do you turn to keep it all together?
What you need is to have everything in one place ... that would make it so much easier to manage and stay on course.
But how can you do that?
Well ..... here's a recommendation:
The LaunchX System is a complete small business startup kit comprised of a Handbook, Workbook, Employer’s Manual, Marketing binder, Business Entity Records, an annual planner, five key software packages, and three marketing reference books. The LaunchX Handbook is the cornerstone of the program, with over 650 pages packed with critical startup know-how. Each topic in the Handbook is coupled with fill-in-the-blanks worksheets in the accompanying Workbook that walk entrepreneurs step-by-step through the planning process.
The Handbook begins with getting organized and determining the image and culture of the new business. As it progresses, the soon-to-be business owner selects and registers their business and domain name, starts networking, and selects their Big Five support professionals. The next major topics are an informal business plan, a complete and detailed marketing plan, and pro forma financial statements. At the end of the planning section is a highly informative chapter covering all the ways to finance a business, starting with your own resources all the way through venture capital.
Once the planning phase is complete, the Handbook contains chapters on putting the plans into action and specific issues that will arise during operations, including financial management, marketing, and ongoing planning. Finally, there are reference chapters that contain more in-depth information on topics such as selecting the correct business entity, operating a business from home, selecting commercial real estate, internet and website development, supporting professionals, and international trade.
In the Employer’s Manual, the same step-by-step processes and fill-in-the-blank worksheets are used to take the entrepreneur through the process of becoming an employer, including legal and tax issues, alternatives to direct employees, writing job descriptions and job advertisements, interviewing, hiring, and managing employees. The included Office Policy software provides a complete collection of HR necessities – policies, forms, posters, and state-specific clauses for the employee manual.
Also included is a tabbed binder to contain all the marketing research and plans along with extra copies of all the marketing Workbook pages so that future marketing campaigns can be planned using the same process. The Business Entity Records Binder contains sample agreements and forms needed by both LLCs and corporations, along with custom tabs to keep it all organized and compliant.
The five software packages cover the areas that all small businesses will need – accounting, marketing, business forms, and human resources. Peachtree Pro accounting software provides a firm foundation for financial management, with its GAAP compliant structure and ease of adding users for growth. ACT! contact manager supports all types of marketing efforts, and allows the small business owner to provide personal service to all their customers. The two packages from TemplateZone contain templates for all types of office and human resources forms, as well as the ability to craft an employee manual quickly and correctly. Finally, The Logo Creator from Laughingbird Software is a quick way for the small business owner to create a logo.
The tone is friendly and accessible, and the system encourages new business owners to maintain control and responsibility throughout the startup process. There is an emphasis on bootstrapping along with a balanced acknowledgement that using outside professionals is sometimes necessary. The workbook pages are designed to be completed by hand rather than on a computer, but the LaunchX argument that writing ideas out longhand increases creativity and clarity has merit. There is a lot of information here, and the majority is relevant to an entrepreneur in any industry.
Overall, the LaunchX System has all the components that a small business startup needs to turn their idea into a successful business and to then build a successful company.
If this sounds like just the "hand up" you need to get off on the right foot .... you can learn more here:
LaunchX System
====================
Friday, June 19, 2009
Does It Make Sense To Start-Up A Business During This Recession??
In times of economic turmoil and consequently higher unemployment, it is usual that some of the professionals that were laid off may take the initiative of beginning a new career path ..... as an independent consultant or as entrepreneurs by beginning a small business.
Although it is probable that most entrepreneurs will fail 2 years after having begun ..... and angel investors with the willingness of contributing with capital will be scarce ..... past history has taught us that many of the innovations that generated new and revolutionary products were initiated in times of economic uncertainty, market instability, and financial restrictions. And were consolidated once the economic landscape began to experience a healthy and sustained recovery.
Being so, the adagio that says that "Necessity is the Mother of the Invention" appears to be true.
In my humble opinion, this wave of innovation happens when talented professionals .... after being laid off from companies where they worked unhappily in the past and without a promising professional future .... feel compelled to be creative, to develop an innovative mindset, and explore beyond their comfort zones to survive, grow, and succeed.
In the long term, small businesses are key for the financial recovery. Irrespectively of the extent and depth of the current economic turmoil .... there are always likelihoods of success in developing an entrepreneurial venture.
In a nascent business, the experience of being an entrepreneur is a role highly emotive and gratifying when its founders are smart, disciplined, and persistent. Plus, when they assume a passionate attitude, build a sense of purpose, share an inspiring vision, and create an exhilarating climate for young professionals who are willing to accept the challenge of growing professionally with a small, although promising company.
A small business offers the unique and valuable opportunity of building from the personality traits, business vision, managerial style, and professional experience of their leaders and founders. The values, principles, policies, and beliefs that are inherent to the organizational culture must be shared in such a way that they become a key factor of success ..... and propel organic growth for the company for the long term.
Small businesses that are successful in creating customer loyalty, are smart in managing their finances, and provide the means to assure employee satisfaction .... may experience the unique opportunity of enjoying extraordinary patterns of organic growth that increase and multiply their valuation as an ongoing business. And the likelihood of being acquired or merged by a bigger company in such a way where all the involved parties greatly benefit.
Highly motivated "former" employees who are close to their customers, and have the willingness to learn, capacity to innovate, and desire to integrate multidisciplinary teams to work hard and with proved efficiency ...... can transform a dream, a project, and illusion into a highly profitable business.
So the short answer .... is yes.
Although it is probable that most entrepreneurs will fail 2 years after having begun ..... and angel investors with the willingness of contributing with capital will be scarce ..... past history has taught us that many of the innovations that generated new and revolutionary products were initiated in times of economic uncertainty, market instability, and financial restrictions. And were consolidated once the economic landscape began to experience a healthy and sustained recovery.
Being so, the adagio that says that "Necessity is the Mother of the Invention" appears to be true.
In my humble opinion, this wave of innovation happens when talented professionals .... after being laid off from companies where they worked unhappily in the past and without a promising professional future .... feel compelled to be creative, to develop an innovative mindset, and explore beyond their comfort zones to survive, grow, and succeed.
In the long term, small businesses are key for the financial recovery. Irrespectively of the extent and depth of the current economic turmoil .... there are always likelihoods of success in developing an entrepreneurial venture.
In a nascent business, the experience of being an entrepreneur is a role highly emotive and gratifying when its founders are smart, disciplined, and persistent. Plus, when they assume a passionate attitude, build a sense of purpose, share an inspiring vision, and create an exhilarating climate for young professionals who are willing to accept the challenge of growing professionally with a small, although promising company.
A small business offers the unique and valuable opportunity of building from the personality traits, business vision, managerial style, and professional experience of their leaders and founders. The values, principles, policies, and beliefs that are inherent to the organizational culture must be shared in such a way that they become a key factor of success ..... and propel organic growth for the company for the long term.
Small businesses that are successful in creating customer loyalty, are smart in managing their finances, and provide the means to assure employee satisfaction .... may experience the unique opportunity of enjoying extraordinary patterns of organic growth that increase and multiply their valuation as an ongoing business. And the likelihood of being acquired or merged by a bigger company in such a way where all the involved parties greatly benefit.
Highly motivated "former" employees who are close to their customers, and have the willingness to learn, capacity to innovate, and desire to integrate multidisciplinary teams to work hard and with proved efficiency ...... can transform a dream, a project, and illusion into a highly profitable business.
So the short answer .... is yes.
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