Tuesday, August 6, 2013

10 Business Etiquette Tips for Entrepreneurs

Have you ever experienced a business situation or witnessed an event that left you thinking, “Really? You’ve got to be kidding me!” Has someone ever called you thirty minutes late, looped in a third-party to a private email conversation or said something terribly inappropriate in a business meeting? You’re not alone. We have all run into our fair share of bad business etiquette.

Most people operate with an unspoken code of behavior that delineates expectations for social behavior. While, this code may be a lost art form to some – it is deeply engrained in others.

A sale, a partnership and even the long-term growth of your small business is often hinged on how well you understand the importance of business etiquette. If it’s so important then why do most entrepreneurs ignore it?

Some entrepreneurs are etiquette pros, while others live by the adage, “It’s easier to ask forgiveness than it is to get permission.” Whichever the case may be, we’ve asked entrepreneurs to share their woes and offer up their #1 tips to help you master etiquette in professional situations.

Here are 10 business etiquette tips to help you operate your small business successfully and confidently – without pissing people off.

#1 – Don’t Be a Social Spammer!

“Don’t go around posting your sales pitch on a company’s or individual’s Facebook wall. Social media is for connecting, but after discovering a prospective client via social media, it is then time to approach them privately and personally, not publicly.  Not only will approaching them personally increase your chance of a sealing a deal, it will prevent you from looking spammy and unrespectable to onlookers.”

#2 – Keep Email Short and to the Point

“Email etiquette has eluded many otherwise successful entrepreneurs. Emails should be kept short and to the point. Everyone is busy, and forcing them to sift through irrelevant information to find the point to your email is both disrespectful of their time and could result in lost business. Take the time to edit your writing after you finish it. Your recipients will thank you!”

#3 – Save the Sales Pitch for Later

“Don’t try to sell your services to someone from the first moment you meet them. Networking is about meeting potential connections, partners, and developing quality relationships- it is not about closing the deal at that moment.”

#4 – Let Me Opt-in to Your Marketing List

How to launch a startup business that lasts

Like quite a few successful technology companies, the story began with a teenager starting a business in his bedroom equipped just with a PC and a dial-up modem. That teenager was me and I was 14 when I started a web-hosting business.

Since then I've grown my company, 4D, into a fully fledged co-location and connectivity provider with data centres in London, Surrey and Kent. Here are my top tips for launching a startup business that lasts.

Work 24/7

I left school at 17 to devote more time to the business; being an entrepreneur is a full-time job and if you are serious, you have to forget evenings and weekends or nine to five. Think 24/7 – or something that is quite near to that.

Think big

By the time I was 21, the business had grown to a six-figure turnover but I realised that most of my revenues were being absorbed by renting space in other suppliers' data centres. This led to the idea of buying one of my own.

The only problem was where would I get the money?

I thought the business concept might appeal to one or more private investors. So the first step, and with hindsight the most important one, was to prepare a credible business plan. To do this I bought an off-the-shelf package and simply followed the instructions. Step-by-step, the business plan emerged with a financial model which turned out to be remarkably accurate.

On the basis of the business plan I was able to convince a private investor to put up the money, not just to acquire the building, but also to finance the growth of the business during the first two to three years following the acquisition of the new premises.

The funding of the initial working capital was important because my business plan showed substantial losses until sufficient revenue could be generated to cover the very significant running costs. Unfortunately, the overheads have to be paid from day one, whether you have one or 100 clients.

Read more

Expert tips on funding your startup

Remember why you're getting funding in the first place: 

It's to support and extend the delivery and success of the startup. That means it's not just about money, but about support, networks and so on. Of course some businesses/social enterprises are built by individuals and teams who have that expertise already, but the vast majority benefit from finding new networks, mentors etc. Organised funding (grants, venture capital, social investment) often comes with this additional support, which can be vital to success.

Grants are and option:  

If your venture is working to address any social problem, markets might not be easy to find, which means other forms of investment might not be suitable (or forthcoming) – this is where grants are really well suited. Not because sustainability or growth aren't possible, but because they can take longer to identify and realise.

Investment is in many ways about risk: backing an unknown team; investing in an unproven idea. Where there's more risk and where the rewards aren't necessarily financial, this again is where grants are particularly useful.

Put yourself in the shoes of your potential funders:  

If you understand their economic and social motivations, you will have the best chance of determining what type of funding to raise (and succeeding at doing so).

Are you a high-risk, high-growth business? Then your investors want meaningful enough upside to compensate for the risk. Are you confident of steady returns? Then a debt instrument is likely to appeal to investors. Maybe you're doing something cool and fun with no particular economic return – in that case, the social motivations of rewards-based crowdfunding (like Kickstarter) might be right for you. Understand your funders, and the rest will fall into place.

Equity crowdfunding is a good first step on the equity ladder: 

By raising initial capital through platforms like Seedrs, a startup gets not only the money it needs to take a first step but also an installed base of supporters who can help test the product, spread the word and make connections. From there, the business can go on to raise angel money, venture capital, join an accelerator or pursue any of a range of different funding options.
Scott Sage, partner, DFJ Esprit

The pros and cons of venture capital:

5 Reasons a Young Entrepreneur Should Raise Outside Funding

Many entrepreneurs cringe at the idea of seeking outside financing, as a deal will most likely require giving up control and equity. They want keep their business under lock and key and forgo investor scrutinizing their every move.

But there are times when you have to look outside for financing because you’re quickly running out of cash or your goals for your venture’s expansion exceed its capital resources.

If you need to turn to venture capitalists, don't wait until the last minute. Instead, you should start the process of talking to potential capital providers at least six months before you actually need the funds.

Here are five situations when you should kick into capital raising mode:

1. You can't convert users to buyers.

If you are a startup using a freemium model -- one that offers free basic services but requires people to pay for added features -- and you're not getting any conversions, you are going to hit a revenue wall. Depending on the rate at which you are burning through cash, most likely you will need to go outside to raise capital before you run out.

This situation can be tricky, as investors aren't going to want to put their money in a sinking ship. Do not approach those investors until you have a clear idea of how many potential customers might be willing to pay for your product, what price you can charge and the details of the additional features you’ll need to persuade future customers to pay.

2. You lost a big customer.

Big customers can cause big problems when they decide to cut ties with your startup. If your company is getting a big percentage of revenue from one customer and one day they say sayonara, you better act quickly.

When approaching investors, any potential outside capital provider is going to need to understand why you lost the big customer. You'll also need to explain how you are going to use that capital to make your business even bigger and more successful than it was before.

3. You have intense price competition from rivals.

4 Necessary Small Business Resources And The Creative Approach To Get Them

Small businesses are the economic engine that drives the U.S. economy, with more than 27 million small firms providing 60 to 80 percent of the new jobs in our country.  New survey data from Constant Contact®, Inc. found that 59 percent of small businesses believe it’s harder to run a business today than five years ago. Why?

Small business owners lack many of the resources large companies have at their fingertips. We’ve encountered many struggles and spent a significant amount of time getting these resources in order to move our startup, Chatalog, to the next level.  Below are the most basic needs we had to acquire to get our business going.  These should be no surprise to most small businesses, but it’s the creativity in getting access to them without having to pay the high fees that hopefully is helpful:

1. Mentorship.

In starting a business there are frequent questions, ideas and opinions needing to get answered.  Find mentors you can go to and get honest advice and feedback.

But when first starting out, where do you go?  Spend time looking through your network to find who has the expertise in the areas that are lacking.  Go outside your comfort zone and reach out to those individuals, whether through friend introductions or approaching them at conferences and events.

2. Capital.

The most important element in starting a business and probably the number one resource small business owners lack.  Access to capital can be challenging to say the least.  It’s hard work and almost a full time job to get access to external capital.

Although stressful, we bootstrapped the company for as long as possible while having conversations with potential investors. It’s important to  understand what needs to get accomplished before a company can reasonably ask for outside investment.  Set goals, reach them and then reach out to outside investors with results in hand.

3. Talent.

6 Things You Need to Know About Raising Capital for a Small Business

"Money makes the world go around, of that we can be sure," sang Alan Cummings in the popular stage play "Cabaret." Certainly, the half-million Americans starting new businesses in 2012 have reason to suspect the truth of those lyrics since raising capital, whether to fund a new
technological marvel or open a franchised restaurant, is one of the most challenging aspects of starting a new business.

Unfortunately, the need for capital never ends. This means that understanding how to find and shake the "money tree" is critical. And before you begin your search, there are a number of crucial questions you must ask yourself - and answer.
Questions to Ask When Raising Business Capital

1. How Much Capital Do I Need?

Although many resources provide information on starting a business with no or little money in the bank, remember that if something sounds too good to be true, it probably is. Don't be misled by the popular literature - having little or no capital is a primary reason why businesses fail.

"Bootstrapping a business when you're not drawing a salary and depleting whatever savings you have is one of the most difficult things to do," says Toby Stuart, professor at the Haas School of Business at the University of California, Berkeley. Even an independent cell phone app developer has to eat until the application has been designed, programmed, and marketed before any revenues begin. If your startup business requires even minimal outlays for offices, equipment, or employees, the amount of capital needed before opening your doors for business is likely to be significant.

Being Realistic

Entrepreneurs are often wild-eyed optimists, an often necessary attitude to get their ventures off the ground. But instead of a unique product, record sales, and slow competitors they usually envision, the real world is quite different.

The truth is that no new business succeeds without a detailed and thorough business plan that recognizes where you are today, where you want to be tomorrow, what problems might arise, and how you are going to resolve them. The value of a business plan is that you are forced to think about your potential business critically, challenge your assumptions, and research when you're not sure of your facts. A complete plan identifies and quantifies the capital that is likely to be required to reach break-even and beyond. It is absolutely essential when soliciting investors.

Read more

How to Turn Your Million Dollar Idea Into a Startup

Based on my own experience and feedback from friends, every investor is approached by at least ten entrepreneurs with a “hot idea” for a new business, for every one who has a real “plan” for a new business. That’s why I often say that ideas are worth nothing, until they are put in the context of a business plan and real people committed to executing the plan.

In fact, you can find websites full of ideas, like these “Free Innovative Ideas,” by serial entrepreneur Kim E. Lumbard of CalTech. Or you can find books of free ideas, like “Ideas,” by Matt Schoenherr, providing 101 great ideas for increasing your visibility and profitability. Most investors will tell you that they rarely see a new idea that they haven’t heard before.

I’m sure you all realize that there is quite a distance between a good idea and a good business, or even a plan for a business. Here are a few tips on how to bridge the gap. The first step is to pick one idea (idea people find it hard to focus on only one), and go to work along the following lines:

  • Do some specific market research. Scan the Internet for existing patents and some “credible unbiased third party” data that confirms there is really a market for a solution resulting from your idea. Just because you or your friends think it is a great idea or great technology, that doesn’t mean that a large number of customers will buy it.
  • Make sure the idea is technically viable. I hear many ideas that sound more like dreams, rather than products. It’s not hard to come up with the idea that a cure for cancer would make a great business, but some things are harder than they look. You need some evidence of a real solution before any business plan makes sense.
  • Draft a business plan summary. Rather than starting with a full business plan, I recommend that you start with an executive summary of a couple of pages, or an executive level presentation of maybe ten charts. It’s easier to see the big picture, and find out if your strategy can excite people before you work on a detailed plan.

Monday, August 5, 2013

5 Startup Ideas for Your Own Small, Home-Based Business

Vacation times are meant for much-needed recharging and resting. However, productivity should not stop when everything else seems to come to a halt. Why not take the opportunity to add new skills and knowledge to turn productive ideas into fruitful endeavors, like starting and running your own business.

This summer, you need not spend big on business books or enroll in a crash business course. Here are great business starter references you can check out online – from traditional home-based businesses to service-based vocations and other fresh additional income ideas.  Stock up on easy, simple and quick to-do guides to start building your very own business empire.

1. Home-Based Businesses 

Over half of all U.S. businesses are based out of the owner’s home, and some of the biggest corporations today started out as small home-based businesses, like Apple Computer, Ford Motors and Mary Kay. This article is a good primer for the future business owner, offering step-by-step guides on how to prepare, plan and start a small home business.

Guides include practical pre-opening reminders (consisting of simple to do yet useful self-assessment tools) that will help you determine if you are ready to take on the business owner role, no matter how small it is at first. The guide moves to details on important phases of rolling out your plan, from starting and financing to marketing your small business. It also include pertinent information like filing taxes for your small home business.

2. 10 Legitimate Businesses You Can Start for Under $20

An additional income stream is always welcome, especially if you have spare time and some talent and practical skills to create something marketable. This article presents 10 possible new businesses to consider that someone with basic entrepreneurial spirit can pull off with just $20 or less as start-up capital.

Each entry on the list is expounded by general information on what it is about, the skills it entail and how to jumpstart it in a small scale. There are smart marketing ideas supporting each list plus suggestions on where to allocate the $20 seed fund to spark the profits. The article also cautions readers about falling into small home-based business scams that ask for advance purchases of starter kits, supplies or promotional materials.

3. 106 Business Ideas: Service Businesses

4 Creative Ways to Reduce Small Business Startup Costs

Small businesses are great. They allow individuals to follow their passions, be their own bosses and build their ideas from the ground up. They are the backbone of the economy.

They are also expensive. But becoming an entrepreneur needn’t mean decimating your savings or robbing a bank—in fact, there are four main strategies you can use to start a business on a budget:

1. Track everything

It is wise for anyone planning to start a business to keep track of expenses from the very beginning. A business owner should track every single expense, from the purchase of equipment, furnishings and supplies to advertising and other marketing expenses to services rendered by lawyers and design consultants—any business-related expense is important to note, no matter how small.

Lots of GraphsKeeping records allows a businessperson to track unnecessary expenses and do away with them. These records also act as evidence in case of a legal tussle. And if you save every receipt and keep them as record in a safe location, your deductions at tax time will be easy to calculate (and you won’t miss anything!).

Cloud technology has made this aspect of business easier than ever. For example, you can save considerably by subscribing to an online inventory management and order application that integrates with your accounting software, allowing you to track business expenses and payroll as well as orders and shipping, all from one software package. In fact, there are web-based business applications being developed that can easily integrate many of your business operations, from marketing to project management, under just one platform.
Male and Female Business Partners

2. Hire contract professionals

Hiring contract professionals such as accountants is a good money-saving strategy for small businesses. These professionals can help you discover deductions that you may not have been aware of at first. They can also help you effectively track all your business expenses. And the value they add to your business comes at a reduced cost—you only hire a contractor for as long as it takes to get the job done, and you don’t need to pay their social security taxes or offer them benefits such as paid time off. Best of all, you don’t add to your payroll commitments.

3. Prioritize startup costs

Is Venture Capital Funding Right for Your Business?

For any type of business, finding funding is hugely important. True, some businesses are more capital intensive than others, but some amount of money is a necessity for just about any business venture. However, securing financing is sometimes easier said than done.
Some new businesses sometimes have trouble securing business loans, due to their limited credit history. Others would prefer to avoid traditional means of financing.
Venture capital is a popular alternative to traditional business financing methods. But, what is venture capital funding? How does it work? And, is it right for your business?

In It to Win It
Venture capital firms are in the business of profiting from investing in promising businesses during their formative stages. Many venture capital firms specialize in investing in businesses in a specific industry, but there are plenty of venture capital firms out there, so most businesses should be able to find a source of venture capital financing.

Advantages of Venture Capital Funding
If the business succeeds, then venture capital investors stand to profit handsomely. If it fails, they lose their investment. That’s the calculated risk they take on when making an investment.
Businesses that secure financing via venture capital firms are not under any obligation to repay the funds, should the business fail. This is in contrast to a business loan, which must typically be repaid by the business owner, even if the business fails to become profitable.

Securing funding from a venture capitalist can be a great way to build a business’s network of contacts. Most venture capitalists are well-connected in the business world, and businesses that they invest in stand to reap the benefits of their extensive connections.
New businesses may also benefit from the guidance of venture capital investors, who tend to come from successful entrepreneurial backgrounds, often in the industries in which they are investing.
Businesses financed by venture capitalists stand to grow more rapidly than businesses that must wait until their revenue will support expansion. With a stockpile of extra capital on hand, businesses can afford to scale up rather quickly.

Potential Drawbacks

Ways To Think of an Idea for a Startup

Here’s an interesting and deliberate approach to ideation – the creation of an idea – to start your own company. 

Three primary paths to a new business idea

1. The spontaneous idea: 
 It hits you when you’re in the shower, driving in your car, talking with friends, or doodling during a meeting. The dots suddenly connect in a new way and you have an epiphany…your sudden insight is surprising and exciting, and the value of this new idea seems obvious. You can’t believe nobody else has thought of it before!
So you go online and poke around…and…most of the time it turns out that someone has thought of it before. But, you still might be able to do it better…so you keep thinking about it and a day passes, and you start to realize some problems. You share it with a few trusted friends and get feedback about a lot of things you hadn’t thought of yet (e.g., nobody pays for it, it’s a tiny market, etc.). It could turn out to be a great idea, but you don’t know, you have a good job, and it is uncharted territory…so you let the dream slowly die away. Cheer up, that was probably the right decision.

2. The insider idea: 
Maybe you’ve spent the last 7 years building enterprise software for airlines and you’ve noticed some voids in the product stack or issues with how your company brings it to market. You point these deficiencies out to your bosses, but there are other company priorities and nothing changes. Or, say your company pays vendors a lot of money to do some work, but nobody ever seems happy with the results….and you see a way to do it better for less. Or, maybe you witnessed your company kill an amazing new product or feature not because testing didn’t show user interest, but for political or organizational reasons.

You see an opportunity to do it on your own, so you start moonlighting on a solution. You gather more specific information, talk to trusted co-workers and industry contacts, and determine the viability of solving the problem. The good thing is, you’re already knowledgeable and well positioned/networked in the business space…so good luck to you!

3. The deliberate idea: