4 Big Ideas for Attracting Venture Capital to a Small Company

It seems like every entrepreneur’s dream: a big VC firm writes a giant check and the business quickly rockets to success.

For most business owners, of course, reality will never match the dream. Saying that most businesses will not be funded is to understate the obvious.  In fact, less than 1 in 1,000 companies are funded by VC -- and that is of those that bother to apply.

Nonetheless, just as athletes dream of Olympic Gold and climbers pine to scale Mt. Everest, entrepreneurs will always strive to attract VC dollars.  If you find yourself dreaming of venture capital, dream big, and follow these simple rules:

1. Spot the Big Trends

Venture capitalists succeed by staying ahead of the curve.  The nature of their business demands that they invest in markets and industries that are rapidly expanding. If you are not in today’s hot markets, it’s unlikely you will get the attention of early stage investors.

It’s generally accepted that technology firms make good venture investments, but those in the fastest growing segments, like biotechnology or nanotechnology, will have an even better chance of attracting attention.  Industries that are in vogue with VC change, however, so beware.  Keep an eye out for the big trends that will shape your market, and align your business to take advantage of these trends.

In the end, even if a venture fund does not take a shine to your company, this strategy can pay off in faster growth.  So keep the wind at your back and your eye on the horizon.

2. Target a Big Market

The corollary to being part of a big trend is having a big market.  To justify a large venture investment you’ll nee to project a big return in a small amount of time.  There’s no way to do that without selling into in a large, lucrative market.

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Estimating Startup Costs for a New Business

Confounded over how much money you'll require for your startup business? Well, don't fret. There's an easy approach to breaking this mystery down and creating a clear picture of the funds that your startup business will need.

Startup cost categories

Bear in mind that different small businesses will have different types of startup costs. For example, a furniture retailer might need a storefront and staff to man it, while a toy manufacturer might need manufacturing equipment, a warehouse and staff that is trained to operate the equipment. And then again, if you're operating an online retail business, you might be doing it at home in your PJs, and don’t need a facility or staff at all.

Costs for a startup business can be divvied up into six major categories:

• Cost of sales:  Product inventory, raw materials, manufacturing equipment, shipping, packaging, shipping insurance, warehousing

• Professional fees:  Setting up a legal structure for your business (e.g. LLC, corporation), trademarks, copyrights, patents, drafting partnership and non-disclosure agreements, attorney fees for ongoing consultation, retaining an accountant

• Technology costs:  Computer hardware, computer software, printers, cell phones, PDAs, website development and maintenance, high-speed internet access, servers, security measures, IT consulting

• Administrative costs:  Various types of business insurance, office supplies, licenses and permits, express shipping and postage, product packaging, parking, rent, utilities, phones, copier, fax machine, desks, chairs, filing cabinets – anything else you need to have on a daily basis to operate a business

• Sales and marketing costs: Printing of stationery, marketing materials, advertising, public relations, event or trade show attendance or sponsorship, trade association or chamber of commerce membership fees, travel and entertainment for client meetings, mailing or lead lists

• Wages and benefits:  Employee salaries, payroll taxes, benefits, workers compensation

Factor in the time to get your startup business off the ground

How is Your Startup Unique or Different?

In a competitive landscape, a key consideration is standing out from the crowd.

For startups, this is important because the barriers to entry are relatively low, while new or innovative ideas can quickly be replicated by agile rivals.

It means startups needs to discovery how they are unique and different to position the brand and carve out a competitive edge. If this can’t be achieved, the a startup can come across as just a me-too product.

Being unique or different, however, is not easy. There is so much competition that startups have to be creative, flexible and bold.

So how do startups discover what makes these different or unique?

It begins with looking into competitive landscape to explore how rivals are positioned. Who rises above the crowd, and how do they do it? What are the things that every rival claims – e.g user-friendly, intuitive, efficient. etc.?

To get a better grasp of where everyone sits, it might even help to create a graph that places companies in different buckets (e.g. free, freemium, premium, SMB, etc.)

By doing a competitive analysis, a startup can see the best opportunities to stake a claim on how it different or unique.

A good example of a startup that successfully managed to establish its uniqueness is 500px, which plays in the competitive photo-sharing market. So how does a startup find a place where it can be seen as different?

For 500px, the magic happened when it positioned itself as the place where photographers could display their most beautiful photographs. 500px is not a place to show good photographs, but only what you consider to be the best.

By positioning the brand in this way, 500px created a unique place for itself. In the process, it attracted well-known and high-quality photographers who liked the idea of having a place for their best shots. This, in turn, generated significant buzz, which attracted many more photographers who wanted to be part of the community.

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5 Marketing Tips on Communicating With an Ideal Client

Defining your ideal client is the first step to generating quality, qualified leads with your marketing.

The second step is to communicate with your ideal clients effectively — and about your ideal clients effectively.

It’s very difficult for consumers to refer their friends, family, and colleagues to you and your business if they aren’t sure who you serve or what exactly you specialize in. Likewise, it’s difficult for them to see if they are a great fit for your product, program and service.

If you want to succeed in business, you must communicate who you serve, what you do, and how you can help them in a simple, easy to understand, clear way.

Here are 5 marketing tips to help you communicate to, with, and about your ideal clients and target market:

Ideal Client Communication Tip 1: Once you know who your ideal client is, don’t sit around and wait for them. Go out and find them

    Just because you open your doors for business, launch a website, or print a business card, doesn’t mean that you will have any business. No one can hire you ($$$), buy from you ($$), learn from you ($) or join your list if they don’t know you exist. It is your job as a business owner to find your market, customers, and clients, and let them know that you exist and that you can help.

Ideal Client Communication Tip 2: Share who your ideal client is with everyone

    It’s critical that you know who your ideal client is, AND it’s critical that your network and audience also know who your ideal client is. When your audience knows who your ideal client is, they can more quickly and easily identify themselves or a friend as a good fit to work with you, and it will be easier for people to refer others to you. 

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The 51 Best Customer Service Tips For Entrepreneurs

Few things are truly more important to entrepreneurs and small business owners than getting and keeping customers. After all, you’re not even in business unless you have products or services to sell and paying customers to buy them. So for many of us, customer service is no small thing. But we sometimes minimize its importance by dealing with our customers as if we deserve their business.

Newsflash. The days of big business-little customer are long gone. There are far too many competitors in the market for small business owners to handle customers carelessly. Not only that, but digital reputation management is a huge responsibility for entrepreneurs. It’s time to get your best customer service mojo flowing. Poor feedback from even a handful of dissatisfied customers will cost you dozens and even hundreds of would-be customers in the long run.

Here are 51 valuable customer service tips for entrepreneurs that will serve your customers extraordinarily well. Included in this list is everything from attitude to body language to thank you cards . All of it matters.

1. Sit up straight and smile. 
When you are face to face with a customer, good posture and a sincere smile will change your disposition and that’s change customers can feel.

2. Use active listening. 
One of the best experiences customers can have is to know they are understood. Listen to your customers. Let them know you have heard them by rephrasing and communicating what they have told you. This makes sure you and the customer are on the same page and lets customers know they’ve been heard. You both win!

3. Let them rest assured. 
Customers want to feel confident in your ability to guide them through the fray. Let them know that you have their best interest in mind. Be present, communicate often and always follow through.

4. Dump the script.

4 Steps to Ease Your Way Into Entrepreneurship

Becoming an entrepreneur is a fun yet scary proposition. Often, entrepreneurs go against the advice of their friends and family members, in order to follow their dreams and pursue their passion. However, making that leap is a rocky road.

Here are four action steps that you can take right now to make the journey less bumpy:

1. Develop a Personal Mission Statement

A challenging yet exciting thing about entrepreneurship is that you are inundated with ideas and opportunities, but to be effective, you need to choose the ones that work best with what you want out of your life. Create a personal mission statement that will act as a decisive filter. For example, my personal mission statement is "to become a tycoon politically, socially, and economically so that I may have a positive impact on my community." When developing your own, you must ask yourself two questions: What core things are most important to you? Why are those things important? Your answers will help you figure out how to accomplish your goals. Remember that your personal mission statement is not set in stone, so tweak it accordingly as your life's priorities change.

2. Reduce Your Expenses

One of the main reasons many people don't start businesses is because they're afraid of losing their home, car, ability to provide for their families, etc. But the ultimate goal is to generate big wins while reducing your expenses.

A solution to this is to cut your expenses down to the necessities. You don't need to make your life miserable, but simply review your expenses and find affordable alternatives—starting with the most expensive item. Do you really need to pay $1000 per month in rent, or can you share an apartment with a friend to save money?

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5 Steps you must take before you start your business

Once you’ve made the decision to start your own business, the natural instinct for many is to charge headlong into getting it off the ground right away.

Starting your own business might have been something that’s been at the back of your mind for years, and now that you’ve finally decided to take the plunge, you don’t want to waste any more time.

Well, despite the urgency you probably feel, it would be sensible to spend some time examining the true viability of your business. Many people rush into their first business and live to regret it down the line. Important decisions made in haste tend to have implications. And while you shouldn’t use that as an excuse not to get on and make your dream happen, there are five things you must do before you start your business.

1. Research the market

Just because you can do something doesn’t mean people will buy it. Or, just because you can do something doesn’t mean people will pay enough or buy enough of it to make you a profit. There’s nothing smart about working flat out running your business for no profit. You won’t be an entrepreneur, instead just a busy fool.

Sometimes the gap in the market that you’ve spotted is there for a good reason. Maybe it’s difficult to make money from it. That doesn’t mean impossible – there are opportunities everywhere – but if the gap seems obvious, ask yourself why no-one else is capitalising on it. When you go looking, you may find a graveyard full of businesses that did what you intend to do, and failed.

Research can be as simple as talking to potential customers, spending a few hours on the internet, or acting as a potential customer and checking out the competition.

2. Get information