Tuesday, April 29, 2014

Start-up Tips from Successful Entrepreneurs

With a start-up, your company's beginning is 0.
I've never been a "start-up" entrepreneur before now. I'd always bought properties or companies and scaled them. However, I am now operating a start-up, The Resourceful CEOTM, and find the journey quite interesting. Here are a few featured tips for you (and I) from renowned entrepreneurs to help on this start-up journey. 



Sara Blakely

First up, Sara Blakely of Spanx:



Her 5 tips:
  1. Differentiate yourself (and your company, products). Why are you different? 
  2. Visualize where you're headed. "Take a polaroid picture of where you're going to be in a few years."
  3. Trust your gut, even after you can afford advisors.
  4. Treat people kindly and be fair.
  5. "...Embrace what you don't know, especially in the beginning."
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Tim Ferriss

From a different perspective, following is an interview with Tim Ferriss, author of "The 4-Hour" Series of which "The 4-Hour Work Week" is the most well-known. (I read it and really enjoyed it. However, I did not lay on the sidewalk to get comfortable with feeling uncomfortable. I took a 1-week trip to Colombia all by myself - no tour - instead. But I digress.)



According to Tim, the following are important:
  1. Burning enthusiasm/passion for what you are building.
  2. A diversified identity. This means do not tie all your self-worth into the success of your business.
  3. Know your particular strengths and delegate the rest. (This may have to wait until you have more money, but as soon as you have it, do it.)
  4. Team members need to have the same vision AND end goal, especially team members with an equity stake in the company.
  5. Focus on being effective not efficient. Prioritize, prioritize.
  6. Track 1-2 numbers weekly, whether it's cash flow to conversion. This helps retain focus.
  7. Be careful not to be reactive to email. Use email as a tool, not a distraction.
  8. To be most effective, use the DSSS tool
  • Deconstruction - breaking big goals into smaller tasks
  • Selection - choosing the 20% that drives 80% of the goals
  • Sequencing - practicing/doing activities in the right order
  • Stakes - consequences that impact you to motivate you to take consistent action


Pay attention! You may be tested on these tips later!

Now for my tips:

I have been called strong-willed and highly opinionated, generally only when solicited for feedback! Not the same as stubborn. However, these are often key traits for an entrepreneur. So many of the people who know us like to weigh in on what we're doing or how we're doing it. Long ago I decided the following: 

  1. If the advice-giver has a successful track record in the area they are giving advice in, I will listen with high receptivity.
  2. If the advice-giver has a poor track record or no track record in the area they are giving advice, I will no longer fight them as this makes them dig in. I will just nod and essentially ignore everything they say. Remember, resistance begets resistance. Go with the flow but do not let that person's ignorance and fear become yours!
  3. If the person has no track record in the advice area but generally has a good track record in other areas, I will listen to all they have to say. 
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Tuesday, April 22, 2014

Business Cash Flow Management

Do you continually wonder what accountants and financial personnel mean when they say "cash flow"? Do you think that cash flow equals cash in the bank? Do you need a simple, straightforward explanation on why financial types (like me!) make such a big deal about having sufficient business cash flow? Do you not understand what are the crucial differences between operational cash flow and profit? For example, why your business could have highly positive operational cash flow yet be unprofitable and potentially continue like this for years (ala Amazon for many of its early years)? And why the reverse - having a highly profitable business but consistently negative operational cash flow - could cause your business to shut down in months or even weeks?

Watch this video to get the answers to all these questions.
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Thursday, April 17, 2014

Startup Funding - What to Do First

http://theresourcefulceo.hs-sites.com/the-funding-is-out-there?__hstc=20225191.34749a2808cc1f77d5a66456c2c4cca6.1394819369009.1397531152266.1397668738410.67&__hssc=20225191.3.1397668738410&__hsfp=807540300
In general, I do not work with small business start-ups. In this case, by "business start-up" I am referring to businesses that are only a concept and have not generated any revenue. I will typically refer these new owners to entities or individuals that focus on startups. If your business is pre-revenue, you must target those angel investors who have expertise or a strong interest in your chosen field. If you are not offering a product or service that is clearly differentiated  from the competition, you will have an extremely difficult time attracting angel investors. If you do not have a brand new service offering, new technology, new product or new process or methodology that serves your target market in a new way, then I HIGHLY recommend you focus on generating revenue before pursuing any outside funding. 



If you can pre-sell any amount of your product or service, you demonstrate the viability of your product or service to those who would potentially invest. I am not a sales person; my skill set lies in finance, strategy and operations. However, I do have persuasive skills and have been able to pre-sell products and services. Even if you are a horrible sales person, if you believe in your product or service, you can at least generate a few hundred or thousand dollars in sales to prove your new business start-up's viability (depending on pricing). If you cannot, why should I invest? If you cannot sell one thing, how could I possibly believe that you'll do better when you have more money?

Here is a wonderful video I found on YouTube from Big Vision Show that drives home the point.



This is why entrepreneurs starting from absolute zero nearly always use their savings or income from another another source - i.e., a job - to start a business. Entrepreneurs also often inject a lot of "sweat equity" to get to the next stage. This is also why entrepeneurs first turn to friends and family after their own savings. Friends and family will invest in you and often don't need a full proof of concept to invest.

This is also why so many inventors have a difficult time attracting investment. Inventors focus on creating products that are cool to them and often have no concept of what the market wants. Unfortunately, often there is little or no market need or interest for the product.
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Friday, April 11, 2014

Revised Video: The Funding Is Out There!

Here is the revised version of The Funding Is Out There! video.



DO NOT Watch This Video or Contribute to our The Funding Is Out There! Crowdfunding Campaign UNLESS You Meet the Following Five Criteria:
  1. You Own a Business and are Increasingly FRUSTRATED Seeking Funding! 
  2. You Have a GREAT BUSINESS – But it seems Nobody Will Help You to Grow It! 
  3. You Want to Find Out about OTHER OPTIONS as Well as Traditional Sources of Funding! 
  4. You Need a to-the-point, concise, Guide to Securing Funding! 
  5. You wish to have access to INSIDE KNOWLEDGE from an INDUSTRY LEADER!
 If You Meet These Criteria, Then you MUST watch our introductory video and see how I can help you – RIGHT NOW!
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Thursday, April 3, 2014

Not a Young Tech Entrepreneur? Still, The Funding Is Out There!

Venture capitalists and angel investors get a lot of coverage in the technology industry. We continually read articles about how ubiquitous the funding is for tech start-ups. Although it is not a case of "snap your fingers and the money shows up," tech companies with passionate founders, a big yet viable vision, a proven concept (proven via beta tests, early adopters, pre-orders, etc.) and a strong network often find it relatively easier to find investors. "Relative" is the operative word here. Watch this video for some insights.



Not a tech entrepreneur? You still have numerous options. Contribute to The Funding Is Out There! crowdfunding campaign on Indiego to access those options. http://igg.me/at/thefundingisoutthere
Want to share the word? Tweet this: Not a young tech entrepreneur? Still, The Funding Is Out There! Get your business funded. #crowdfunding #Indiegogo http://bit.ly/1j5r9uw (138 characters!)
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Tuesday, April 1, 2014

Financing for a Small Business

Financing for your business can come in the form of debt, equity
or other alternatives.
Here's a guest post by Matthew Deutsch that discusses alternatives for financing a small business. According to studies conducted by the Small Business Administration and Kauffman Foundation, lack of capital is the issue that business owners point to the most as the reason for their business' failure. - TCW


Financing for a Small Business

There are many different ways that you can obtain financing for a small business. Most entrepreneurs initially go to a bank in order to receive the capital that they need in order to launch or expand a business. However, given the current credit market environment, many small business owners have had significant trouble as it relates to obtaining the money that they need from lending institutions. As such, one of the most popular alternatives to using a bank loan to start a business is to work with private investors. However, it is should be noted that these investors will require a significant amount of equity as it relates to providing capital to your business.

http://theresourcefulceo.hs-sites.com/business-financing-mistakes

If you are a company that is already in operation then it may be in your best interest to first work with a lending institution as having a proven track record can ameliorate a vast majority of the risks associated with paying interest and principal back on a monthly basis. This is especially true if you have a significant amount of built up equity in your business. It should be noted that most banks and financial institutions are going to want to see a tremendous amount of tangible assets as it relates to your business. There is always going to be a need for collateral when you are working with a traditional financial institution.

When you are working with a private investor the most important issue to note is that your business must be economically viable. If your business does not or will not produce a profit that will sustain a 20% year on year return on investment then you may find that you are going to have significant trouble finding investors that are willing to put capital into your business. This is primarily due to the fact that the risks associated with small business investing is extremely high. As such, you should focus on how you intend to manage risk if you take capital from an angel investor or other type of private funding source.

The final methodology of financing a small business is to use your existing lines of credit. This may include credit cards and home equity loans that come with a low to moderate interest rate. Many of the best small businesses were started this way, and although the personal financial risk is high, this type of financing may come with far fewer expenses. We are going to continue to discuss creative ways that you can finance your business on an ongoing basis as it relates to getting capital for your new or ongoing venture. Angel Investor List Download. No registration required! Includes Free Business Plan Template.

Article Source: Financing for a Small Business


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