Financial Planning: Be Sure Your New Product Gets Traction



So you’ve created a new product and want to launch a company. That’s great.

But be aware most entrepreneurs learn a very painful lesson: Lack of money and financial planning are the biggest obstacles to success.

For entrepreneurs, often the most difficult part of launching a business is preparing financial projections. It may not be the most enjoyable task, but budgeting is imperative for maximizing performance.

adamr applicantAs you create a budget, make allowances for your new venture. You have to make sure you know how much money you need and when you’ll generate revenue.

It’s imperative to understand the risks from business expenses – fixed and unplanned costs.

Here’s what you need to do:

Write a business plan, or at least a budget

There are many valid reasons to write a business plan. They’re not necessarily to attract capital.

They’re also necessary as a road map. Avoid writing a mediocre document. To ensure success, write a great business plan.

Anticipate risks

“Eight out of 10 companies fail in the first two years due to insufficient cash,” warns esteemed financial consultant Roni Fischer (www.rlfassociates.com).

Consider your short-term and long-term risks in budget planning. The risks are many from reliance on employees to possible natural disasters.

Overestimate expenses

Budget more than you anticipate for line-item costs. Why? There are always surprises.

Whether you’re a service or product business, every client has different needs and expectations that can add to your uncertainties.

Accurately forecast sales cycles

Be prepared – in case your sales pipeline dries up or if your sales slow down. You’ll have to account for your expenses in all scenarios.

Some business advisors suggest ramping up your marketing during slow times. However, in my experience, marketing must be a continuous, ongoing effort. And that means identifying your right target audience and constantly thinking about how attract new customers.

Anticipate big expenses carefully

Commonly, businesses always incur major expenses when they least expect it. Your insurance rates skyrocket, or your computer system dies or your facility is hit by a fire.

But some major expenses can be anticipated, such as a new software system or building renovation.

Up-to-date budget projections are vital.

“Eight out of 10 companies fail in the first two years due to insufficient cash.”

-Roni Fischer

Factor in your time costs

Time is money. If you underestimate your time costs, you’ll encounter unnecessary hardship. In all projects you run the risk of mission creep.

One overlooked time-cost is customer service. Plan to give your clients adequate time to listen and address their concerns. Their feedback is important.

Budget your time so you’re rarely working against deadlines, which are a huge time-waster. Give yourself some wiggle room.

If you expect to complete a client project on Wednesday, promise a Thursday delivery date. If you can deliver the product on Wednesday – that’s terrific. But if you encounter last-minute problems and need an extra day, you’ll still be a hero.

Monitor your budget regularly

As you grow, your cash flow needs will change. So make adjustments accordingly. You always have to be mindful to control your finances.

Create a safety net

Use additional profit to start a savings plan. You’ll have money to take care of unexpected business and family expenses or to take vacations.

Remember, you cannot afford not to take vacations. Entrepreneurs have a stressful career. You’ll need R&R to recharge mentally.

From the Coach’s Corner, here are related tips:

How Bloggers Help Startups Get Venture Capital — Multi-million dollar venture-capital financing decisions are affected by bloggers and social media. That’s the conclusion from an academic study, “Putting Money Where The Mouths Are: The Relation Between Venture Financing and Electronic Word-of-Mouth.”

Startup Financial Planning: How to Get a Pragmatic Forecast — Unless you have a lot of startup experience, it can be a little tricky to make down-to-earth financial projections for your new company. Pragmatic assumptions are important in such a forecast.

Checklist to Increase Your Startup’s Cash Flow — It’s true that cash flow is the salient dynamic that leads to the failure or success of a business. Whether your new company’s performance is stagnant or you’re growing quickly, cash flow is paramount. There are at least 11 ways you can increase cash flow for your business to function properly.

Why Startup Companies Fail – How to Win — It’s vital to conduct a thorough needs-assessment of strengths, weaknesses, opportunities and threats – followed by development and implementation of a strategic action plan. Here’s more.

Planning – Tips for Avoiding Growing Pains in Your Startup — After reading my article, How to Start a New Business Before You Quit Your Job, a reader asks: Q: Terry, Going into management and learning leadership skills (self-develop and mentored) are great tools no doubt. These can be vital once your new biz is off the ground.

Tips for Moms Who Want to be Entrepreneurs from Home — So, you have a job and would like to fire your boss to work at home. Let me caution you. Starting a business at home might be the biggest challenge of your life. Starting a home-based business has risks. It can sap your energy and time.

“It ain’t how much you make. It’s how much you bring home.”

-Douglas Hughes


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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.





Photo courtesy of adamr at www.freedigitalphotos.net

Entrepreneur: You Can Avoid Using Expensive Research Tools



If you’re hoping to introduce a new product or service, there are many factors you must evaluate first – if you want to be profitable and experience growth.

Why?

When it comes to product or service utility, your prospective customers will evaluate your offerings on several factors.

True, you can use formal research tools to get your answers, such as focus groups or prototype testing.

business-idea-plan actionBut as a cash-strapped entrepreneur you’ll want to save time and money, right?

You can avoid using expensive research tools if you’re diligent in asking the right questions about your strengths, weaknesses, opportunities and threats in a SWOT analysis.

So start thinking about the relevant typical questions: Is it practical? What are the obstacles to success? What is needed to guarantee customer satisfaction? What are the unknown contingencies?

Especially, consider eight categories:

1. Assess your personal and employee capabilities

Businesspeople who love what they do have greater odds for success. But that’s not enough to consider. You should conduct a SWOT analysis of your strengths and weaknesses.

Why? You and your employees who engage customers will disproportionately determine your success.

Eighteen percent of customers will only buy at the cheapest price. So target the 82 percent who consider value.

The five value perceptions of what your customers sub-consciously think in motivating them to buy from you:

Employees, Spokespersons – 52 percent. The key characteristics are integrity, judgment, friendliness and knowledge. Remember, about 70 percent of your customers will buy elsewhere because they feel they’re being taken for granted by your employees. And customers normally will not tell you why they switched to your competitor.

Image of Company – 15 percent. They are concerned about the image of your company in the community. Cause-related marketing is a big plus in forging a positive image. So is cleanliness and good organization.

Quality of Product or Service Utility – 13 percent. The customer is asking the question – “What will this do for me?”

Convenience –12 percent. Customers like easy accessibility to do business with you. That includes your Web site, telephoning you, and the convenience of patronizing your business.

Price – 8 percent. Price is important, but it’s the least concern among the five value-motivating perceptions.

2. Filling a marketplace need

Make sure your products create a demand by adequately solving a need.

3. Competition

Competition is healthy. However, if your competitors have a head start and are already selling products at Amazon, Overstock or WalMart, you face overwhelming odds.

4. Size and Weight

If you face competition, you’ll want a favorable size and weight. This affects consumer acceptance and shipping costs.

In our economic environment, e-commerce customers increasingly disdain paying for shipping. Many e-commerce businesses have suffered from shopping-cart abandonment for that very reason.

Paying for shipping will affect your profit margins.

5. Product durability

Not only are fragile products unpopular with customers, brittle products increase inventory costs and are high maintenance in packaging and shipping.

6. SKUs

Assess how many SKUs (stock keeping unit) you want to market. The SKU is determined by the color, size and variation of your products.

If you have too many or unnecessary SKUs, you’ll be saddled with extra time and sales-opportunity costs in keeping track of your inventory.

7. Product lifespan

If you sell perishable products, you can benefit more easily from repeat sales but it gets really tricky. If your churn rate is low, you won’t be successful.

You’ll have to overcome built-in barriers – in production, storage and shipping.

Take into account your ordering processes. And make sure your branding gives you a competitive edge.

8. Seasonality

Will your sales be affected by the seasons of the year? If so, you’ll have to concentrate on timely promotions, limited time offers and anticipating potential shipping obstacles.

From the Coach’s Corner, here are related sources of information:

To Realize Your Business Vision, 8 Best Practices for Setting Goals – Whatever your situation, to realize your vision, focusing on the right details is a skill conducive for strategically setting goals. Here are eight best practices.

For the Best Cash Flow, Manage Your Inventory Costs with 8 Tips – With proper inventory management, you can lower your expenses and increase your cash flow. For many businesses, that means taking a look at your inventory costs. When your products aren’t selling, obviously, it hurts. Products just lurking and collecting dust in your warehouse are costing you money. Your investment in such products declines in value.

Big Data, Though a Trite Term, Helps in 6 Types of Analytics – To understand, forecast, and improve business performance, you need to know how to use data in analytics. Based on the most-popular Biz Coach articles since 2009 and the myriad of issues that cause CEOs to sleep at night, it’s worth noting top-performing companies have six significant ways to make use of big data in analytics.

For Profits, Manage Your Growth at the Right Pace – Entrepreneurs frequently try to rush their business growth. Certainly, growth is great but if you scale too fast, you’re looking for trouble. The key is to prepare.

Your Supply Chain Can Meet the Expected Standards of Customers, If… A company that fails to meet customer expectations on store inventory and delivery has problems in supply chain management. Such a company minimizes its profits. Worse, it’s a red flag about competitiveness and long-term sustainability.

“The entrepreneur always searches for change, responds to it, and exploits it as an opportunity.”

-Peter Drucker

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Author Terry Corbell has written innumerable online business-enhancement articles, and is also a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

How Bloggers Help Startups Get Venture Capital



Multi-million dollar venture-capital financing decisions are affected by bloggers and social media.

That’s the conclusion from an academic study, “Putting Money Where The Mouths Are: The Relation Between Venture Financing and Electronic Word-of-Mouth.” See the 2012 report here.

But blog coverage can be tricky. The research shows VC applicants should be strategic in soliciting publicity. The right strategy yields a higher funding amount and valuation.

bwoman stockimages at www.freedigitalphotos.netPublished in Information Systems Research, the study was led by Rohit Aggarwal, an Operations and Information Systems professor at the University of Utah.

“I talked to VCs from many top VC groups, and VCs in general rely on few popular blogs such as TechCrunch, GigaOm, and Venturebeat,” said Professor Aggarwal. “Given their reading behavior, these findings totally make sense.”

But there’s a downside. Beware of the possibility of negative blogger reviews.

“After all it is more of a rejection process than a selection process,” explained the professor. “VCs want to sift through the pile of startup plans on their desks quickly, and are essentially looking for a reason to reject a plan and move on.”

But there’s a downside. Beware of the possibility of negative blogger reviews.

Early funding rounds 

He indicates blog coverage has a strong effect in the early funding rounds. But the impact of the publicity diminishes in later rounds.

“This makes sense, because in the early stages, all they may have is a dream of what they could be,” explained Professor Aggarwal. “As time passes, users, usage, and other accounting measures start to give a better signal about their actual potential.”

To be sure, private equity funding has been a successful approach for the world’s biggest technology companies, such as Amazon, Apple, Google and Microsoft.

Startups need the funding to develop products, recruit employees, pay vendors, and for marketing. In the dot.com heyday, an aggregate $135 billion was raised from VCs in one year.

Since 2000, the total annual VC funding has been more than $25 billion annually. The beneficiaries typically have been IT entrepreneurs.

The study’s co-authors are Harpreet Singh of the University of Texas-Dallas, Ram Gopal of the University of Connecticut and Alok Gupta of the University of Minnesota.

It’s also interesting to note the University of Utah’s David Eccles School of Business has programs in entrepreneurship, technology innovation and venture capital management. It launched the country’s largest student-run venture capital fund with $18.3 million.

From the Coach’s Corner, here’s additional recommended reading:

Eight Strategies to Consider Before Starting A Tech Business — Before you launch a tech business, here are eight salient strategies to remember.

What No One Tells You about Raising Investment Capital — Downturn or not, investment capital is indeed available. That’s true during all economic cycles, according to leading consultant Joey Tamer.

What Should You Divulge When Asking for Investment Capital? — If your startup is the next big thing, but you want venture capital, you can start smiling. Yes, financing has been difficult to obtain in recent years. But entrepreneurs wanting venture capital have reasons for at least a small celebration – the money is starting to flow again after the Great Recession took its toll.

How to Attract an Angel Investor — Now that a UNH study indicates early stage financing by angel investors is more advantageous than venture capital money, what now? An angel investor offers seven tips.

Why Women Receive Less Angel Funding Than Men — It’s well-known that women receive less angel funding than men, but it isn’t because of a male-oriented bias.

“Persistence, persistence, persistence. I’m surprised how few entrepreneurs follow up.”

-Mark Suster


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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.





Photo by stockimages at www.freedigitalphotos.net

Startup: 8 Tips to Organically Grow Your Business



Organically growing a business is a lot like organic farming. Organic farmers pay attention to the signs of nature as a planting guide. They use rich sources of organic matter to build and maintain soil fertility.

If you’re like many entrepreneurs, it probably makes sense to grow organically. You might not have another choice.

Assuming you don’t have an angel investor, you’re not independently wealthy or you’re able to purchase an expensive franchise, organic growth is your likely option. Why?

File:Fall Line Farms, cooperative, co-op, Richmond, VA. - Flickr - USDAgov.jpgBank funds aren’t usually available. Even if a bank would loan you the cash, it would be inadvisable to finance your operations with a bank loan.

So how can you organically grow your startup?

Pull your business up by the proverbial bootstraps. Operate as affordably as possible as you strive to get ahead without help from others.

To grow organically, here are eight strategies:

1. Consider a business that’s inexpensive to start and operate. For example, a restaurant is more expensive than other businesses to launch. That probably might means starting a home-based business. You’d have a short commute and would save on overhead.

2. Do a SWOT analysis to assess your strengths, weaknesses, opportunities and threats. Focus on the easy-to-pick fruit for a fast start.

3. Review your personal finances to see your liquid options for startup capital. But don’t tap into your credit cards or home equity.

4. Manage your cash flow. Control your expenses. Evaluate even the smallest of costs. Ask if you need each item to be productive.

5. Keep your day job. If you can, start your company on a daily part-time basis. Keep your job until your company is making enough to support your salary.

6. Look for trade-out opportunities. If you’re able to trade for products and services, you’ll conserve assets.

If you’re like many entrepreneurs, it probably makes sense to grow organically. You might not have another choice.

7. Half or more of expenses of all business expenses are usually in human resources. Recruit freelance workers to save on benefits and salaries. But beware of the federal and your state’s approach on employment laws. Typically, a person can’t be an independent contractor if you’re managing their work and they use your equipment.

8. Become savvy in public relations and the use of social media. Here are 10 best marketing tips for growth even on a tight budget.

You might be interested in more advice on taking an entrepreneurial leap (an interview of me in The New York Times).

Good luck on your organic growth.

From the Coach’s Corner, here are additional resource links:

Checklist to Increase Your Startup’s Cash Flow — It’s true that cash flow is the salient dynamic that leads to the failure or success of a business. Whether your new company’s performance is stagnant or you’re growing quickly, cash flow is paramount. There are at least 11 ways you can increase cash flow for your business to function properly.

Startup Financial Planning: How to Get a Pragmatic Forecast — Unless you have a lot of startup experience, it can be a little tricky to make down-to-earth financial projections for your new company. Pragmatic assumptions are important in such a forecast. Internet startups When in doubt, start by decreasing your assumptions.

11 Sales Strategies to Outsell Your Big Competitors — Big companies have obvious advantages over small businesses. Their brands are well-known. They can afford sales training, sales-support staff and customer-relationship management software.

Convert More Prospects with 10 Best Marketing Tips (Even on a Tight Budget) — So you’ve got a pile of business cards from prospects, but you haven’t converted them? Great sales stem from great marketing. You can’t grow crops until you plant the right seeds.

 “I have not failed. I’ve just found 10,000 ways that won’t work.”

-Thomas Edison


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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.




Photo: Fall Line Farms, cooperative, co-op, Richmond, VA. – Flickr – USDAgov.jpg

Startup Financial Planning: How to Get a Pragmatic Forecast



Unless you have a lot of startup experience, it can be a little tricky to make down-to-earth financial projections for your new company. Pragmatic assumptions are important in such a forecast.

Internet startups

When in doubt, start by decreasing your assumptions.

What else can you do as an Internet startup? Excelling in thought leadership, Ms. Joey Tamer is a Los Angeles-based a strategic consultant to entrepreneurs in technology and digital media, and to experienced consultants in all fields to maximize their practices.

Joey Tamer Joey Tamer, www.joeytamer.com


Here are her seven financial-planning suggestions:

  1. Reduce the rate of adoption of your product/service.
  2. Increase the rate of attrition of your customers.
  3. Decrease the rate of conversion of “free” to “premium” customers (if you have that model).
  4. Decrease the time of the conversion of “free” to “premium” customers (if you have that model).
  5. Add significant time (double?) to your ideas about the “time to market” of new features and benefits.
  6. Add significant time to the receipt of subsequent revenue from adoption, conversion and retention of customers, and from their “upsell” to new features, benefits and versions.
  7. Add 10 to 15 percent (or more) to all costs.

In addition, I’d point out that there are good reasons for you to consider why and how to determine your break-even point and to use a business success checklist to work smarter, not harder.

More startup questions to ponder

An esteemed business professor, Neil Delisanti, recommends that startups use the forecast for follow up and to see how they are doing against it. Don’t wait until end of year, he warns, because that’s too late to make changes.

Now retired, Mr. Delisanti has taught at the University of Puget Sound and The Evergreen State College in Washington state, and successfully counseled 2,000 new or young businesses via the Small Business Development Center in Tacoma.

He agrees that it’s best to subtract or add 10 to 15 percent to or from the expected, which can be easily done in an Excel model.

“It is recommended they build a model forecast utilizing cells with variables that will change the results of the entire sheet with just one cell entry,” he adds. “That way by changing just the price, the net profit changes, or change the price and sales volume and the whole thing changes.”

He’s also an advocate of creating contingency scenarios. He’s the consummate devil’s advocate for anticipating unplanned events such as riots, natural disaster, product pulled from shelves or hardship from construction on your street.

More scenarios for which to plan:

  • If you have to stop selling an obsolete product or service
  • If you have to increase taxes/license fees/compliance expenses
  • If you need to increase labor costs and also reduce expected productivity of labor
  • If you face rising costs of resources; petrol/electricity/water/trash collection/etc.

(Note: Both experts are trusted and valued colleagues. Mr. Delisanti and I have worked together for more than 20 years. I know Ms. Tamer well since 2004 via our membership in a professional organization for consultants. )

From the Coach’s Corner, here are more of Ms. Tamer’s related insights:

6 Values for Financial Protection — Debt is the catalyst for all financial woes – for individuals and the aggregate economy in the United States and globally, esteemed associate Joey Tamer astutely reminds us. To illustrate, she asserts the first credit card issued by Bank of America enticed baby boomers into using credit for immoderate purchases. We now know the card as Visa.

Options to Navigate This Marketplace Bedlam — Uncertainties regarding Wall Street, actions by the Federal Reserve, and funding often set off alarm bells. But if you’re looking for capital, there are reasons to hope, according to leading consultant Joey Tamer.

What Should You Divulge When Asking for Investment Capital? — If your startup is the next big thing, but you want venture capital, you can start smiling. Yes, financing has been difficult to obtain in recent years. But entrepreneurs wanting venture capital have reasons for at least a small celebration – the money is starting to flow again after the Great Recession took its toll.

Eight Strategies to Consider Before Starting A Tech Business — So, you’ve got an idea for a tech business, but you’re unsure about your prospects. Do you know what are important strategies to consider before starting a tech business?

What No One Tells You about Raising Investment Capital — Investment capital is available during all economic cycles, according to leading consultant Joey Tamer. Ms. Tamer has proven approaches for raising money. “In good times, risk capital is available from all sources, and they compete and sometimes share hot deals with each other; the practice is termed syndication,” said Ms. Tamer.

“Think small and act small, and we’ll get bigger. Think big and act big, and we’ll get smaller.”

-Herb Kelleher


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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.




Best Business Strategies to Get Tech Funding



If you have a tech startup looking for funds, you already know the competition is intense. But there are strategies that will help you to get funded. Investors revealed their preferences for funding technology firms at the 2012 Consumer Electronics Show (CES) in Las Vegas.

On her blog, the chair of the CES venture capital panel, Joey Tamer, writes “each early stage fund planned to invest in a Series A for four or five new early stage companies during this year.”

Ms. Tamer is a strategic consultant to entrepreneurs in technology and digital media, and to experienced consultants in all fields to maximize their practices (www.joeytamer.com).

Joey Tamer

        Joey Tamer

“In the case of Jerusalem Venture Partners, Yoav Tzruya reported that this number represents no more than 1 percent of the 600 companies JVP reviews each year for its early stage fund,” says Ms. Tamer.

“Kevin Spain of Emergence Capital which has a focus on B2B applications, and Chris Petrovic of GameStop Digital which is a strategic investor/acquirer of game companies, as well as Habib Kairouz of Rho Capital agreed with the plan for four to five new deals this year,” she adds.

Improved environment

“We are in a boom period again, this time for the number of early stage companies in play in the market,” Ms. Tamer explains. “The continuing trend that allows for new technologies and applications to be built with many off-the-shelf tools, using world-wide technical expertise, for much less capital, has created many new companies competing for the funding resources available.

“The new trend of incubating companies in accelerators has added some seed capital to these concept-companies to get them through their initial product development,” she says. “But then these companies need to get some traction in the market, hopefully to significant revenue, before they can hope to move from seed capital to Series A.”

Optional strategies

Ms. Tamer indicates you have options to consider if you can’t get from seed to Series A or from Series A to Series B.

“Early stage companies not attracting that critical Series A or Series B funding should consider connecting strategically or through acquisition or merger with other similar-stage companies to create a stronger offering for funding,” she advises. “Aligning with other early companies that would enhance your market position or extend your product offerings or brand, you might attract that essential next stage of funding.”

She explains a developing trend.

“Kevin Spain added a new point, that he sees a strong emerging trend in B2B and enterprise applications using the new technologies that are mostly focused on the consumer market now,” she writes. “He advised companies to look for those B2B market opportunities for their current B2C products and applications. A doubling of your target markets, which rise and fall under different economic conditions, may present a strong offering to investors.”

She explains the motivation of two investors.

“Scott English from Hearst and Chris Petrovic of GameStop approach their investments as strategic additions to their portfolios, rather than as pure venture investments –even though each has a different priority for these investments,” she explains.

“The first point made was to conduct your due diligence about how strategic investors value their target companies,” Ms. Tamer says. “Hearst, for example, is a later stage investor focused on financial ROI to Hearst first, and strategic value to the portfolio second. GameStop, focused on early stage game companies, values its acquisition targets first as an operational addition to its portfolio plan (does the company add to GameStop’s infrastructure, product mix, learning about new markets, or strategy) before financial and ROI considerations.”

She explains some lessons:

  1. Do your homework about your company’s “fit” with what an investment group might be seeking.
  2. Talk with other companies in the investor’s portfolio.
  3. Narrow down your list and your efforts to those investors that prefer your company’s stage, market sector, and your possible enhancement of their portfolio’s current companies.
  4. Some strategic and corporate investors function very much like venture capitalists, and others have different priorities. So, after your due diligence, and as you enter discussions, read the deal’s restrictions and the detailed legal conditions before negotiating or accepting any investment.

Critical factors to help you win

“Norm Fogelsong of Institutional Venture Partners, a later-stage venture fund, insisted that your company’s vision must be big, very big, to attract the rounds of capital needed to become a major player,” she points out.

“The panelists agreed that they are very focused on execution, in particular execution on market penetration,” Ms. Tamer advises. “After you have been funded on your product’s unique value, it is time to turn your attention to your market, especially your customer acquisition and retention strategies, tactics and results.”

She provides another insight: “Yoav related that he looked for CEOs with deep market savvy, a founder who knows his or her product and its market realities, and has a strong go-to-market strategy.”

Ms. Tamer shares the insights of Sharon Wienbar of Scale Venture Partners, a later stage investor, who wants to minimize risk three ways:

  • Proof of market responsiveness: Does your customer commit to your vision of your product’s value, price and use?
  • A business model that prioritizes customer acquisition and retention: Do you have a plan that acquires each new customer quickly and for less and less cost of acquisition?
  • Compelling metrics: are your projections for market penetration, growth and profitability backed up by proven metrics?

“So, amid the growing competition for capital we are seeing this year, particularly in the consumer market, investors’ focus seems to move quickly from unique technologies and applications to strong execution,” concludes Ms. Tamer. “Early stage companies need strategies to present compelling offerings to investors, and an increasing focus on market execution that leads to growing a big company and taking significant market share.”

Hope you enjoyed these insights. As usual, Ms. Tamer speaks and writes with authority.

(Note: I’m very familiar with Ms. Tamer’s expertise. She is a fellow member of Consultants West, www.consultantswest.com, a roundtable of veteran consultants in the Los Angeles area.)

From the Coach’s Corner, here are more of Ms. Tamer’s valuable insights:

“If you can dream it, you can do it.”

-Walt Disney

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

21 Tips You Can Use to Start a Business in a Slow-Growth Economy



Updated Feb. 2, 2017


Conventional wisdom indicates a weak economic climate is not the best time to start a business. But if you have ever dreamed about it, there might be good reasons why the seed was planted in your mind.

Besides, the U.S. has elected a president who understands economics. He’s already been good for the stock market because investors love his commitment to fiscal reform.

Obviously, the economy and consumer confidence have already started to improve.

So go for it. Good ideas are worth a lot of money, in any economic climate. So why wait?

ID-100202647It’s worth noting many successful companies were launched in economic downturns. They range from General Electric to Hewlett-Packard.

Entrepreneurial personalities do not let fear run their lives.

Think of fear as an acronym, FEAR: Frantic effort to avoid responsibility. Entrepreneurs see a good idea as a responsibility to act.

Plus, a weak economy motivates them to work harder and smarter on developing and executing their ideas.

True, consumer confidence is down, home foreclosures are increasing and the business climate is tepid.

As many companies cut back, new business opportunities appear. But you’ll have to hustle. Successful entrepreneurs do their homework and work as hard as dedicated athletes who train for high performance.

Yes, there are numerous pitfalls for startups, and it will probably be the most difficult undertaking of your life.

Here are the 21 tips on how to start a business in a recession:

1. Pick the right niche. You’ll need to enjoy your work and be passionate about it in order to succeed.

2. Take baby steps. Strategize now while working at your present job. Don’t quit or wait for a layoff. If you’re out-of-work, money is problematic but you might not have a choice. Consider all your options.

Good ideas are worth a lot of money, especially in a recession. So why wait?

3. Develop your vision. Write a one-page vision, which explains where you will want to be. Then, consider a business plan for a roadmap. Do your research and become an expert in your industry. Know your competition.

To determine where you are business-wise, conduct a SWOT analysis to assess your strengths, weaknesses, opportunities and threats. Some firms then develop and implement a strategic plan. A business plan is a management tool vis-a-vis a strategic plan, which is a leadership tool.

This also means learning accounting techniques, forecasting your cash flow, and considering buying good bookkeeping software.

Don’t forget an exit strategy in the event to decide to sell or want to leave at an opportune time.

4. Seek expertise. Read about successful entrepreneurs. Look for a mentor and a qualified sounding board.

Also, contact a Small Business Development Center. The organization has countless offices throughout the country.

5. Get a head start on marketing and selling. Line up customers before you launch. Always remember: Cash flow is paramount.

You might want to read this article, “The Seven Steps to Higher Sales.”

6. Market and sell every day. Establish a marketing budget and stay with it. Many companies lose market share by cutting advertising and promotion. Implement strong public relations.

Make yourself known to your local public officials and news media. Suggest to reporters that they consider interviewing you when they want an authority in your niche. Look for ways to multiple sales with your customers.

Consider networking with larger companies – many outsource to micro-businesses.

7. Make customer service a priority. When customers take their businesses elsewhere, my research shows 7o percent of the time it is because they feel taken for granted.

Practice great customer service for referrals and repeat business. Survey your customers. When a customer pays you a compliment, ask a question such as this: “What are the names of two people just like you who might appreciate my company’s services.” Be sure to follow-up with the referrals.

If you plan to free-lance or become a consultant, consider my “5 Strategies to Build Trust with Clients — Tips for Consultants.”

8. Harness the power of the Internet. Learn blogging and search engine optimization techniques, and how to develop online press releases. A strong Web presence is paramount.

9. Line up your resources. Seek references from trusted associates for a good accountant and lawyer. Plan your policies and procedures. Learn to manage your books.

10. Arrange your financing. You’re unlikely to get a bank loan without a track record. Besides, it’s more economical to use your own resources and start from scratch. Avoid reliance on credit cards and home equity.

If you are seeking investors, consider another column I wrote: “What No One Tells You about Raising Investment Capital.” It features an interview with leading consultant Joey Tamer.

11. Appearances matter. Look professional – pick a good business name, logo, memorable tagline, and a branding-benefit statement that adequately tell your story. That also means quality business cards and stationery, a Web site, and email address using your domain name. For more, see: “Profits: Size Doesn’t Matter but Image, Professionalism Count.”

12. Understand legal requirements. That includes business license and taxes at the local, state and IRS. If you’re planning to hire employees, check with your appropriate state agency.

13. Consider buying a micro business. Avoid buying a company that’s losing money unless you’re certain you’ll succeed. Consider proposing owner-financing in a leveraged buyout. But do your due diligence. Walk away from a prospective seller who shows even a hint of bad practices.

14. Develop backup plans for equipment and operations. You’ll never know when bad weather or misfortune will strike. Fortune favors a prepared mind and business. See:  “19 Tips to Protect Your Core Assets from a Disaster.”

15. If you plan to hire employees, learn best practices in human resources. Hire the best workers, who demonstrate the 3 A’s – attitude, appearance and ability. (Note a good attitude is most important.)

Motivate them to be productive and to make your business look good in the marketplace.

16. Location. Just as in buying a home, there are key points to remember about where to locate (scroll down to the last paragraph for a link).

17. Keep sources of inspiration handy. Bone up on slogans and quotations to keep you motivated.

18. Community service. In addition to your regular routine of hard work, recreation and exercise, you’ll find it gratifying to devote time, talent and/or money to a worthy cause to lessen the misery in your community.

19. Network and join your local chamber and industry associations. Develop relationships and become a spokesperson for your industry. Become known as your industry’s CEO as the “go-to” person for the media and your peers.

And get involved in public policy when events adversely affect your industry. Government agencies are not known for enhancing or even protecting entrepreneurs’ economic and political liberties.

20. Budget time for continuous improvement. It’s vital to regularly reflect on your business and how to evolve in the marketplace. Review your SWOT analysis annually, and fine-tune your planning.

21. Remember to play and rejuvenate your mind. That means you should exercise, engage in your hobbies and do whatever works for you to stay mentally healthy.

Again, if you start a business, it will be the hardest thing you will ever do.

Yes, it’s a lot of footwork. But if you start with these rules, you’ll enjoy a competitive edge.

From the Coach’s Corner, to help you determine your entrepreneurial capabilities and for more insights on starting a business, I was honored when New York Times columnist Brent Bowers featured me in two articles:

  1. Been There… Done That… Here’s How
  2. Advice on Taking an Entrepreneurial Leap” (including tips on where to locate a business) 

“As long as you’re going to be thinking anyway, think big.”

-Donald Trump 


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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.





Photo courtesy of stockimages at www.freedigitalphotos.net

Seattle business consultant Terry Corbell provides high-performance management services and strategies.