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When Approaching Investors Here are Some Things to Be Mindful of

When Approaching Investors Here are Some Things to Be Mindful of

 

It’s a scenario that viewers see every week on the popular reality TV show, “Shark Tank.” Aspiring entrepreneurs pitch their company or product to a panel of tough-minded investors that include billionaire mogul/Dallas Mavericks owner Mark Cuban and real estate magnate Barbara Corcoran. Offering a percentage stake of their business at a certain valuation, entrepreneurs will often encounter resistance from the “sharks” who may either not be interested in their startup or want a higher equity in the business to justify their investment.

Although the show’s fans might consider the entrepreneur/investor dynamic to be exaggerated and full of histrionics created to appeal to a TV audience, the truth is that it’s not that far from the reality. Yet there is one glaring difference. Where the show’s investors tend to gravitate toward companies that have proven profit potential as demonstrated by six- or seven-figure sales, very often in the real world that isn’t the case. Sometimes, an idea is all it takes to catch an investor’s interest.

John Frankel, a founding partner at the New York City-based venture firm ff Venture Capital, has funded many startups and early-stage firms and says it’s a fallacy to think that investors will only back companies generating healthy revenue streams. In fact, he says, small business owners should approach investors early on.

“We believe you should talk to investors early to get a sense of what they’re looking for,” he maintains. To illustrate his point, Frankel cites the $80 million in venture funding that was recently raised by Quora, a five-year-old question-and-answer website that he says, “still doesn’t have a revenue model.” (Translation: It has yet to generate revenue or even create a plan on how to do so).

Find investors who have an interest in your industry

Just as you would investigate a company thoroughly before a job interview, you should also learn all you need to know about a potential investor and their history before you even consider phoning him or her.

“Do your homework. Don’t waste your time or theirs on meeting someone not interested in you,” advises Panu Keski-Pukkila, CEO and co-founder of Caktus, a startup that provides “optimal hydration” solutions for health-conscious consumers. Recently, Caktus received $200,000 in seed funding where the lead investor was European venture firm Kima Ventures.

Frankel strongly agrees. “If you’re trying to approach an investor, find out everything about them,” he urges. “What do they like? What interests them?”

Investors_PQ.jpg

Get referrals

Ask trusted colleagues and friends for names of investors you should approach. Solicit feedback from industry peers who are familiar with these investors.

“This works so much better than cold-calling,” says Keski-Pukkila. “If someone is ready to give you an introduction, the investors will be willing to find that 10 to 20 minutes to review your deck [from your PowerPoint presentation] or executive summary.”

Because Keski-Pukkila’s company Caktus was part of an accelerator program, which offers resources and advice that help small businesses grow, he says they were constantly being introduced to potential investors as well as being mentored by them.

In addition to asking people you know for referrals, Keski-Pukkila also recommends having a presence on AngelList, a website that helps startups raise funding from accredited investors (defined in the U.S. as having a net worth of at least $1 million or an income of at least $200,000 for the last two years).

“Investors will contact you if they like what you do,” he says. “That’s how our lead investor got into touch with us.”

Be truthful

Whether it’s overstating your company’s revenue projections or obscuring a detail concerning your product, never mislead potential investors when meeting with them. Chances are more than probable that your deception will be discovered, which will be the end of your ever securing funding from these backers. Many of them are shrewd and savvy and will ask for evidence to support your claims. Avoid the temptation to lie to impress. You will only hurt yourself in the end.

Keski-Pukkila echoes this sentiment, qualifying it with a warning.

“[Investors] will call your bluff, sooner or later,” he cautions. “The word will spread in the investor circles and you won’t get any further meetings.”

Adjust your pitch to your audience

In general, your pitch should contain the basics: brief company history and overview that explains why you are keen about this product or business, market projections, and exit opportunities for investors (how the investor will recoup their investments). However, depending on the audience, you might want to tailor your pitch based on what you think will resonate with them.

For instance, if your company is a tech startup and you’re meeting with investors that have a history of backing these types of firms, then you’ll want to play up the tech components of your company. However, if you’re meeting with early-stage investors that are far more eclectic in their investments, you may do a general pitch that either de-emphasizes the technology or puts it on an equal footing with the other elements you’re covering.

Although he admits it’s an ongoing challenge, Ben Hertzog, president and CEO of Procyrion, a Houston-based medical device startup that recently raised $2.9 million, finds this best practice to be an imperative for all entrepreneurs who are serious about getting outside backing.

“Do your best to tweak your pitch to the audience,” he counsels. “But don’t get caught in the endless cycle of reactionary edits. Just because a potential investor on Monday told you that your presentation was too technical, doesn¹t mean that the potential investor on Tuesday will agree.”

Pay attention to feedback or lack thereof

If an investor thinks you’re not ready to raise funding for your company, then you will need to respect that. Don’t overstay your welcome. Thank him or her for their time and leave. You will not help your case if you press on, notes Frankel.

“Sometimes investors might say this is not a good fit for them and [the entrepreneurs will] carry on and be like a broken record,” he adds.

If investors offer you constructive criticism, listen to them. Use the takeaways as invaluable lessons learned the next time you meet with investors.

However, if they do like you, make sure you remain on their radar, exhorts Keski-Pukkila.

“If you like a potential investor and get useful feedback, ask him to join as an advisor,” he says. “That way he is more committed to your startup, but does not have to invest money yet.”

Approaching an investor can be an exciting and heady proposition for a small business owner. Do your due diligence and always be honest in your meetings. And who knows, you might end up securing a considerable amount of funding.

May 18, 2014 Today's Business, , , , , , , , 0 Read more >

Things To Think About When You Are Approaching An Angel Investor

Things To Think About When You Are Approaching An Angel Investor

 
t’s a scenario that viewers see every week on the popular reality TV show, “Shark Tank.” Aspiring entrepreneurs pitch their company or product to a panel of tough-minded investors that include billionaire mogul/Dallas Mavericks owner Mark Cuban and real estate magnate Barbara Corcoran. Offering a percentage stake of their business at a certain valuation, entrepreneurs will often encounter resistance from the “sharks” who may either not be interested in their startup or want a higher equity in the business to justify their investment.

Although the show’s fans might consider the entrepreneur/investor dynamic to be exaggerated and full of histrionics created to appeal to a TV audience, the truth is that it’s not that far from the reality. Yet there is one glaring difference. Where the show’s investors tend to gravitate toward companies that have proven profit potential as demonstrated by six- or seven-figure sales, very often in the real world that isn’t the case. Sometimes, an idea is all it takes to catch an investor’s interest.

John Frankel, a founding partner at the New York City-based venture firm ff Venture Capital, has funded many startups and early-stage firms and says it’s a fallacy to think that investors will only back companies generating healthy revenue streams. In fact, he says, small business owners should approach investors early on.

“We believe you should talk to investors early to get a sense of what they’re looking for,” he maintains. To illustrate his point, Frankel cites the $80 million in venture funding that was recently raised by Quora, a five-year-old question-and-answer website that he says, “still doesn’t have a revenue model.” (Translation: It has yet to generate revenue or even create a plan on how to do so).

Find investors who have an interest in your industry

Just as you would investigate a company thoroughly before a job interview, you should also learn all you need to know about a potential investor and their history before you even consider phoning him or her.

“Do your homework. Don’t waste your time or theirs on meeting someone not interested in you,” advises Panu Keski-Pukkila, CEO and co-founder of Caktus, a startup that provides “optimal hydration” solutions for health-conscious consumers. Recently, Caktus received $200,000 in seed funding where the lead investor was European venture firm Kima Ventures.Frankel strongly agrees. “If you’re trying to approach an investor, find out everything about them,” he urges. “What do they like? What interests them?”
Get referrals

Ask trusted colleagues and friends for names of investors you should approach. Solicit feedback from industry peers who are familiar with these investors.

“This works so much better than cold-calling,” says Keski-Pukkila. “If someone is ready to give you an introduction, the investors will be willing to find that 10 to 20 minutes to review your deck [from your PowerPoint presentation] or executive summary.”

Because Keski-Pukkila’s company Caktus was part of an accelerator program, which offers resources and advice that help small businesses grow, he says they were constantly being introduced to potential investors as well as being mentored by them.

In addition to asking people you know for referrals, Keski-Pukkila also recommends having a presence on AngelList, a website that helps startups raise funding from accredited investors (defined in the U.S. as having a net worth of at least $1 million or an income of at least $200,000 for the last two years).

“Investors will contact you if they like what you do,” he says. “That’s how our lead investor got into touch with us.”

Be truthful

Whether it’s overstating your company’s revenue projections or obscuring a detail concerning your product, never mislead potential investors when meeting with them. Chances are more than probable that your deception will be discovered, which will be the end of your ever securing funding from these backers. Many of them are shrewd and savvy and will ask for evidence to support your claims. Avoid the temptation to lie to impress. You will only hurt yourself in the end.

Keski-Pukkila echoes this sentiment, qualifying it with a warning.

“[Investors] will call your bluff, sooner or later,” he cautions. “The word will spread in the investor circles and you won’t get any further meetings.”

Adjust your pitch to your audience

In general, your pitch should contain the basics: brief company history and overview that explains why you are keen about this product or business, market projections, and exit opportunities for investors (how the investor will recoup their investments). However, depending on the audience, you might want to tailor your pitch based on what you think will resonate with them.

For instance, if your company is a tech startup and you’re meeting with investors that have a history of backing these types of firms, then you’ll want to play up the tech components of your company. However, if you’re meeting with early-stage investors that are far more eclectic in their investments, you may do a general pitch that either de-emphasizes the technology or puts it on an equal footing with the other elements you’re covering.

Although he admits it’s an ongoing challenge, Ben Hertzog, president and CEO of Procyrion, a Houston-based medical device startup that recently raised $2.9 million, finds this best practice to be an imperative for all entrepreneurs who are serious about getting outside backing.

“Do your best to tweak your pitch to the audience,” he counsels. “But don’t get caught in the endless cycle of reactionary edits. Just because a potential investor on Monday told you that your presentation was too technical, doesn¹t mean that the potential investor on Tuesday will agree.”

Pay attention to feedback or lack thereof

If an investor thinks you’re not ready to raise funding for your company, then you will need to respect that. Don’t overstay your welcome. Thank him or her for their time and leave. You will not help your case if you press on, notes Frankel.

“Sometimes investors might say this is not a good fit for them and [the entrepreneurs will] carry on and be like a broken record,” he adds.

If investors offer you constructive criticism, listen to them. Use the takeaways as invaluable lessons learned the next time you meet with investors.

However, if they do like you, make sure you remain on their radar, exhorts Keski-Pukkila.

“If you like a potential investor and get useful feedback, ask him to join as an advisor,” he says. “That way he is more committed to your startup, but does not have to invest money yet.”

Approaching an investor can be an exciting and heady proposition for a small business owner. Do your due diligence and always be honest in your meetings. And who knows, you might end up securing a considerable amount of funding.

May 13, 2014 Today's Business, , , , , , , , 0 Read more >

Small Business Thinking Out of Crisis-Mode

Small Business Thinking Out of Crisis-ModSmall Business Thinking Out of Crisis-Mode

by Erin McDermott.

 

Small Business Thinking Out of Crisis-Mode. Your business has weathered a tough and challenging cycle. Now it’s time to start breaking out of crisis mode. How do you do it?  As with any kind of upheaval, it’s difficult to get past fears born out of a bad experience. A brush with the demise of a business falls into its own traumatic category, with your professional, financial, legal, and personal life seemingly on the line. But how you deal with the aftermath of that tough situation is important, too. Afraid of committing to an expansion or new segment of customers? Lingering resentments over what went wrong and who’s to blame? Unable to lead staffers in a clear direction?

 

Troy Hazard compares it to what he’s learned from racing cars. The serial entrepreneur, business consultant, and author has been taking classes at tracks for years. But one instructor’s advice resonated with both of his passions. The lesson: Don’t obsess over the first turn, or getting into an accident. Think about what you intend to do to attack the curve that’s two turns ahead, because that’s what will help you win the race. Small Business Thinking Out of Crisis-Mode

 

“The biggest challenge most businesses have now is the hit they took back in 2008,” he says. “There’s such a fear about ‘What if it happens again?’ And the answer is: It’s going to happen again. It’s happened every seven to 10 years for the last 70 years. The problem is we’re so reactive to things that are drama today instead of focusing on a strategy for tomorrow.”

 

His advice to clients: Take time every day—“walking the dog, even that 15 minutes in the shower”—to think about where you want to be in five years or 10 years, and what changes you might make now to reach that goal. Small Business Thinking Out of Crisis-Mode

 

Jeffrey Kadlic works with companies in the wake of a crisis. His small business private equity fund, Evolution Capital Partners, based in Cleveland, uses a system of five “pillars” to take a company out of what he calls “no man’s land.” Small Business Thinking Out of Crisis-Mode

 

Kadlic’s five steps to getting back to business:

1. Get timely and accurate financials

“You can’t have any sense of what you’re doing or where you’re going until you measure where you’re at and what your performance has been,” Kadlic says. Some important questions: Where do you stand compared to your peer group? How profitable are you really?

 

2. Create a plan

Most companies start with a short-term plan, going out at least a few pay periods to evaluate their cash cycles. Kadlic suggests a 100-day plan, which should be enough time to see tangible results from the changes you’re implementing.

 

3. Put the right people in the right seats

Kadlic equates it to football: How can you create a roster if you don’t yet have a playbook? Once you know the market you’re about to attack, then it’s time to put the right specialists in your lineup to get it done.

 

4. Be transparent

This part can be difficult for a small business owner who’s used to making most of the decisions. But to have your key staff understand where they fit in this new plan is essential, Kadlic explains. “Show them the big picture and how they’re contributing to the results as a whole,” he says. He recommends monthly meetings to show where everyone stands in proximity to their goal. “It gives people a sense of ownership in what’s going on,” he adds.

 

5. Be accountable

Give employees a realistic goal against which they can be measured, he says. It sets expectations for old and new staffers. Plus, if someone isn’t working out as you’re trying to get back on track, those benchmarks make a dismissal less of a surprise to the employee and an easier way to define what a successor will need to do, Kadlic says.

At all of the businesses he’s bought over the years—most of which he’s entered during crisis mode, “because that’s where the opportunity is”—Hazard says he’s implemented not only a routine of not-to-miss Monday morning meetings, but also a “daily huddle” that keeps the focus on what’s down the road. In that 10-minute meet-up, teams from finance to operations come together to answer the question: What are the things you see that are strategic roadblocks for you right now? “It brings up the things that are going to affect the business long-term,” he says, “but it also gives everyone a chance to help overcome these obstacles and collaborate on a solution.” Small Business Thinking Out of Crisis-Mode

 

Hazard likens it to what he’s learned on the racetrack. “It takes the day-to-day issues and turns them into longer-term strategies,” he says. “That’s what changes the culture.” Small Business Thinking Out of Crisis-Mode

November 19, 2013 Today's Business, , , , , , , 0 Read more >

How Much To Ask When Applying For A Small Business Loan

How Much To Ask When Applying For A Small Business LoanHow Much To Ask When Applying For A Small Business Loan

It’s a question that besets many small business owners when applying for business loans: how much should I ask for? More so than deciding on which lender to approach, not having a sound estimate of how much capital you need to borrow could lead to cash flow problems—which could lead to your business shutting down. How Much To Ask When Applying For A Small Business Loan

How then can small business owners determine how much financing they need when approaching lenders? What factors should they take into account when calculating the ideal sum of their business loan?

Be clear on the reason for the loan

Are you launching a startup? Or do you need the loan as additional working capital to make improvements in your business? Answering yes to either question is critical when deciding on how much you need.

Denise Beeson, a small business-funding consultant who previously lent her services to a local SBA-administered Small Business Development Center, a provider of mostly free resources and training to small business entrepreneurs, in Santa Rosa, California, always asks her small business clients the previous questions whenever they come to her about wanting to apply for loans. For those with startups, she does issue a caveat: “If this is a start-up, I remind them that an SBA preferred lender does not fund startups,” says Beeson “We then discuss where they may find funding, such as peer-to-peer lending options, tapping into their personal resources, or asking family and friends.”

If the small business owner is seeking to buy a business from another, Beeson notes that the seller may fund the loan. How Much To Ask When Applying For A Small Business Loan

 

Also, if the small business owner is seeking working capital for myriad reasons, which might include increasing the marketing budget, making renovations, or paying off debt, Beeson says she will ask clients if they can produce documentation verifying that the debt was accrued as a result of the business.

 

Without providing the necessary paper trail needed to accompany a loan application, small business owners could hurt their chances of getting financing from a lender, insists Beeson. To prove her point, she offers the following anecdote:

 

“Recently a restaurant client was interested in an SBA loan to consolidate debt based on improvements to the premises,” she recalls. “They had almost $100,000 in debt including credit card debt that was claimed as accumulated to the business during the recession. However, when we looked at the statements, the entries were not clear when and what had been done. In addition they could not produce any paid invoices from contractors or suppliers linked to the credit card statements. Unfortunately, we could not move forward because the borrower could not provide the needed documentation to the preferred SBA lender.” How Much To Ask When Applying For A Small Business Loan

Consult trusted financial professionals

If you are unsure or confused about how much you should ask for when applying for a business loan, it might behoove you to visit a financial expert such as a reliable bookkeeper or a CPA that regularly deals with small business clients. By reviewing your financials, he or she can then approximate how much financing you will need, taking into account existing debt obligations and operating revenue. And a word of caution: don’t be lax or lazy when it comes to understanding your financials. Sloppy bookkeeping or a lack of knowledge about your books or tax returns will prevent you from acquiring a loan.

Take into account your other non-related business expenses

To determine how much you’ll be able to repay and the length of the loan’s duration, small business owners need to do a cash flow analysis of all their expenses, including mortgage payments or auto loan payments. By doing so, a business owner will be able to develop a more viable estimate of how much they’ll need to borrow from a lender.

 

Rohit Arora, CEO of the six-year-old Biz2Credit.com, feels this is an imperative step for all small business owners to take when deciding on how much of a loan they should apply for.

 

“A lot of business owners don’t take [their miscellaneous non-business expenses into account when deciding how much money they should borrow,” he says. “Everything boils down to your repayment capacity. So if you feel that you can borrow some money and there’s some good opportunity that will help you make money off it, that’s good. But that calculation is not a certainty.” How Much To Ask When Applying For A Small Business Loan

Carefully consider payment terms

After you analyze your financial situation, both on a personal and business level, you will also need to decide on how long you want to pay off your loan. By following this best practice, you will be able to produce a rational figure as opposed to an amount that you will never be able to discharge in light of your finances and debts.

Arora agrees, offering a hypothetical scenario: “Let’s say a business owner is borrowing $100,000 and they have to pay back everything in one year,” he explains. “Then the amount of repayment they have to make in terms of speed is pretty steep. Typically for small businesses, the cash flow is their bloodline.”

Similarly, Arora says small business owners need to exercise extreme caution, particularly if they’re planning on borrowing from alternative lenders. “A lot of times they want their money back pretty quickly,” he warns.

Know the lender

When figuring out how much money you need to borrow, it’s vital that you research your lending options. Which banks or lenders are amenable to small business owners in your sector? Just conjuring up a random number for a loan will not help you if the lender is not open to your industry, says Beeson, who advises business owners to also explore nontraditional lending options.

If you need to figure out how much of a business loan you should ask for, you will need to know offhand all of your business and non-business expenses. Not only is this information essential for maintaining good credit—a prerequisite for getting a loan—but it will help you come up with a realistic number that will allow you to comfortably fulfill repayment terms and not disrupt your cash flow. How Much To Ask When Applying For A Small Business Loan

November 19, 2013 Today's Business, , , , , , , , , , , , , , , , , , , 0 Read more >

Turning Down a Customer: When Is It Smart!

Turning Down a Customer When Is It Smart!Turning Down a Customer: When Is It Smart!

by Erin McDermott.

 

Yoga is supposed to be an escape to mindfulness and physical rejuvenation.

 

But running a yoga studio is like any business, and Patrice Simon has had to refuse some customers. Once, she even had to summon police to her busy Costa Mesa, California, spot, Bikram Yoga Studio, when a student became alarmingly verbally abusive.

 

“It’s been a lesson in psychology for me. There are individuals who intentionally raise their voice at the desk or become insulting—and they do it so an audience can hear them,” explains Simon “I don’t let it get that far. I say, ‘You need to leave, and now.’ I get a vibe from dealing with people at this point. This individual went far over the line.” Turning Down a Customer: When Is It Smart!

 

It may seem counter-intuitive, but sometimes it’s best to turn down a customer. Many business owners say it’s rarely as straightforward as encountering an unruly person at the other side of the counter. It could be that the limits of your own enterprise are overstretched, or their deadline is impossible to meet. Mostly, it’s just one of those things that only your gut can tell you. Turning Down a Customer: When Is It Smart!

 

Everyone’s in business to make money, but when are those dollars just not worth it? Here are four situations that small business owners say they’ve encountered on the road to saying “no thanks” to new customers. Turning Down a Customer: When Is It Smart!

 

1)  It’s never going to be profitable

 

Some projects require an investment to keep relationships with big potential growing. And there are times when you have to hold your nose and say yes in order to keep your doors open. But those numbers need to add up somewhere on the horizon.

 

Michael Bremmer is founder and CEO of TelecomQuotes.com, a Marino Valley, California telecommunications-solutions provider for small and midsize businesses. He says 20 years of trial and error have led him to ask three questions of himself for any new customer: 1) What’s his gut feeling about the individual or business? (“Every time I’ve ignored my gut, I’ve paid the price,” he says.) 2) How reasonable are their requests? and 3) Is the amount of profit worth the time and effort?  “Even if you’re struggling to start your business, you have to choose so wisely because your time is your most valuable asset,” Bremmer says. Turning Down a Customer: When Is It Smart!

 

For example, Bremmer has had to send some customers to competitors or outright “fire” others. He says he recently had to cut off a longtime family friend who became unreasonable about pricing. He struggled with the decision because he could see how stress had made her irrational, but “the client who keeps you awake at 3 a.m.—that’s the one you’ve got to fire.” Turning Down a Customer: When Is It Smart!

 

2)  Haggling over price

 

John Olson calls them “the price hunters” and he’s learned to turn them away over his 20 years in business. They’re the people who call or email GrayStone Industries, his pond and fountain-supply company in Cleveland, Georgia,, with eyes only on the price tag. He says his staff gets calls from people who say they’ve contacted them and their competitors, and will buy from whoever has the lowest price.

 

In those cases, Olson says “we will not even provide a quote, which would force some other poor seller into beating it by sacrificing their own profit. That’s not the way we want to do business.”  His products and these projects, he says, require a “modicum of intelligence” from customers, and his staff is constantly trained to assist anyone with questions before or after a sale. So forget about a retail race to the bottom, he explains. “Anyone who cares more about the price than the company selling these type of products is setting themselves up for failure—it will come back to haunt any company who caters to this type of customer.”

 

3) Negative or abusive comments

 

The customer is always right? Let’s hope not, judging by the unprecedented abuse that business owners say they’re experiencing via the Internet. Melinda West, founder and CEO of SwagsGalore.com, a curtain and window-treatment ecommerce site based in Lakeville, Pennsylvania., says she has a greatest-hits collection of the crude, angry, or wacky messages she’s seen from the site’s order-comments box since she opened in 1999.

 

“People seem to have no problem leaving messages, but in person they likely wouldn’t be that crass,” West says. “The comments are so rude or bizarre that you don’t know whether to take them seriously.” So she’s had to block some users’ IP numbers from the site, canceled orders with a brief note, or told the pushiest ones that their goods were out of stock—just to make them go away. Though West says the overwhelming majority of the company’s orders are pleasant or at least uneventful, cutting off negative new customers no longer keeps her up at night. “Sometimes people are nasty and they don’t even order anything—how can they be so irate over curtains?” Turning Down a Customer: When Is It Smart!

 

4) A bad fit

 

Maybe the work is too outside your specialty, the budget is a tough stretch, or ethical or personal lines are crossed. Don’t ignore the red flags. Frank Ebysen, a founder of Santa Monica, California-based OnClick Marketing, an SEO and social media services company, says he’s adopted a “serious person” test, a concept his business partner learned from co-workers at a company overseas. For example, there are clients who have good ideas, but the lack of a sound game plan makes them problematic, he says. Now when they discuss whether to take on a client or turn them away, it comes down to whether the person is genuine and worth their expertise, or if they come off as “not a serious person.”

 

Or you could turn the tables. One PR agency executive says her small agency has started asking potential clients for a list of their references before they agree to do business. “They’ll get the feeling that you are selective and not just looking to make a buck. You’ll appear to be the leader in the situation—but mostly it helps to ward off the ones who will be a headache,” she says.

Perhaps turning away someone’s business could possibly help make that customer look within, to see that they were —gasp!—wrong. Simon says that yoga client who sparked the police call came back to her studio a year later, seeking forgiveness and promising to behave. He’s been a regular on the mats there for years now.

 

She says it’s added to the meaning of her business. “You never know what’s going on in someone’s life. There are students I see that are in such despair and in a heightened state of anxiety. They are coming to me to take care of that,” Simon says. “When you can understand that, then you’re doing your job.”

November 17, 2013 Today's Business, , , , , , , , , 0 Read more >

Veteran Entrepreneurs Small Business Resources

Veteran Entrepreneurs Small Business Resources.

Veteran Entrepreneurs Small Business Resources.Veteran Entrepreneurs Small Business Resources.

With Veterans Day around the corner, I am reminded of one of the questions I got the most during the past decade writing my USA TODAY column: why aren’t more small business owners hiring veterans?

It was a very legitimate question. The fact is, since 9/11, American veterans have come home to a very icy employment picture. For much of that time, veteran unemployment figures typically were several percentage points higher than the national average. For instance, in 2011, the number of veterans out of work stood at 12.1%. In 2012, it fell to 9.9%, but even that was several points higher than the national average. Happily, veteran unemployment continues to fall. Today it hovers around 7%.

Veteran Entrepreneurs Small Business Resources.

 

So yes, the good news is that employers seem to be warming up to the idea of hiring vets. The only real question is why did it take so long? Veterans generally make very good employees, especially because of their training and background.

 

And, if you think about it, that same training also means that veterans tend to be excellent entrepreneurs and small business owners:

 

  • Veterans understand how to create a plan, implement and execute it
  • Many are trained to be leaders
  • They understand systems
  • Hard work and commitment are in their bonesYet veterans face the same challenges that all small business owners face, as well as some unique to the veteran experience. Like all small businesses, finding the training and assistance needed to succeed can be tough. Beyond that, veteran entrepreneurs who are disabled or have other trauma-related issues have their own, unique set of issues to deal with.

     

    Pull Quote.png

     

    So for all of the men and women who were brave enough to both serve our country, as well as who want to start a business (or have), here is a list of resources to make your entrepreneurial life easier:

     

November 11, 2013 Today's Business, , , , , , , , , 0 Read more >

Breaking Out of Crisis-Mode Thinking

Breaking Out of Crisis-Mode Thinking

Breaking Out of Crisis-Mode Thinkingby Erin McDermott.

Breaking Out of Crisis-Mode Thinking. Your business has weathered a tough and challenging cycle. Now it’s time to start breaking out of crisis mode. How do you do it?

As with any kind of upheaval, it’s difficult to get past fears born out of a bad experience. A brush with the demise of a business falls into its own traumatic category, with your professional, financial, legal, and personal life seemingly on the line. But how you deal with the aftermath of that tough situation is important, too. Afraid of committing to an expansion or new segment of customers? Lingering resentments over what went wrong and who’s to blame? Unable to lead staffers in a clear direction? Breaking Out of Crisis-Mode Thinking

Troy Hazard compares it to what he’s learned from racing cars. The serial entrepreneur, business consultant, and author has been taking classes at tracks for years. But one instructor’s advice resonated with both of his passions. The lesson: Don’t obsess over the first turn, or getting into an accident. Think about what you intend to do to attack the curve that’s two turns ahead, because that’s what will help you win the race. Breaking Out of Crisis-Mode Thinking

“The biggest challenge most businesses have now is the hit they took back in 2008,” he says. “There’s such a fear about ‘What if it happens again?’ And the answer is: It’s going to happen again. It’s happened every seven to 10 years for the last 70 years. The problem is we’re so reactive to things that are drama today instead of focusing on a strategy for tomorrow.” Breaking Out of Crisis-Mode Thinking

His advice to clients: Take time every day—“walking the dog, even that 15 minutes in the shower”—to think about where you want to be in five years or 10 years, and what changes you might make now to reach that goal.

Jeffrey Kadlic works with companies in the wake of a crisis. His small business private equity fund, Evolution Capital Partners, based in Cleveland, uses a system of five “pillars” to take a company out of what he calls “no man’s land.” Breaking Out of Crisis-Mode Thinking

Kadlic’s five steps to getting back to business:

CrisisMode_PQ.jpg1. Get timely and accurate financials
“You can’t have any sense of what you’re doing or where you’re going until you measure where you’re at and what your performance has been,” Kadlic says. Some important questions: Where do you stand compared to your peer group? How profitable are you really?

2. Create a plan
Most companies start with a short-term plan, going out at least a few pay periods to evaluate their cash cycles. Kadlic suggests a 100-day plan, which should be enough time to see tangible results from the changes you’re implementing.

3. Put the right people in the right seats
Kadlic equates it to football: How can you create a roster if you don’t yet have a playbook? Once you know the market you’re about to attack, then it’s time to put the right specialists in your lineup to get it done. Breaking Out of Crisis-Mode Thinking

4. Be transparent
This part can be difficult for a small business owner who’s used to making most of the decisions. But to have your key staff understand where they fit in this new plan is essential, Kadlic explains. “Show them the big picture and how they’re contributing to the results as a whole,” he says. He recommends monthly meetings to show where everyone stands in proximity to their goal. “It gives people a sense of ownership in what’s going on,” he adds.

5. Be accountable
Give employees a realistic goal against which they can be measured, he says. It sets expectations for old and new staffers. Plus, if someone isn’t working out as you’re trying to get back on track, those benchmarks make a dismissal less of a surprise to the employee and an easier way to define what a successor will need to do, Kadlic says.

SBC newsletter logo.gifAt all of the businesses he’s bought over the years—most of which he’s entered during crisis mode, “because that’s where the opportunity is”—Hazard says he’s implemented not only a routine of not-to-miss Monday morning meetings, but also a “daily huddle” that keeps the focus on what’s down the road. In that 10-minute meet-up, teams from finance to operations come together to answer the question: What are the things you see that are strategic roadblocks for you right now? “It brings up the things that are going to affect the business long-term,” he says, “but it also gives everyone a chance to help overcome these obstacles and collaborate on a solution.” Breaking Out of Crisis-Mode Thinking

Hazard likens it to what he’s learned on the racetrack. “It takes the day-to-day issues and turns them into longer-term strategies,” he says. “That’s what changes the culture.” Breaking Out of Crisis-Mode Thinking

November 4, 2013 Today's Business, , , , , , , 0 Read more >

Ways to Engage Your Employees This Summer

Ways to Engage Your Employees This Summer.Ways to Engage Your Employees This Summer

Ways to Engage Your Employees This Summer. One summer, I interned at a law firm in San Francisco. I wanted to impress the partners so that they would offer me a job after I graduated the following year. This was back in the day when law firms really wined-and-dined their potential associates.

 

Man, I loved that summer.

 

The partners took us river rafting, invited us to fancy dinners and drinks at their homes, and yes, they even took us in a hot-air balloon. Oh yeah, we also did a little work too. Needless to say, I really wanted to work at that firm. Well, I got my chance a year later, and let’s just say that the real world was a tad different than my summer of fun. Ways to Engage Your Employees This Summer.

 

It turns out that many businesses are learning that one of the smartest things they can do, especially at this time of year, is to take advantage of the natural rhythms of the season and give employees their own summer fun. Ways to Engage Your Employees This Summer.

 

In fact, if you take a close look at the latest edition of the spring 2013 Bank of America Small Business Owner Report (SBOR), it turns out that many employers are taking this idea of creating a strong culture seriously. The Report found that almost nine in 10 small business owners offer some type of benefits to their employees.

If you want to engage your employees this summer, here are a few tips mentioned in the SBOR that will make your employees feel more engaged:

 

1. Offer flexible work hours: Forty-five percent of the entrepreneurs surveyed in the SBOR said that they reward their staff with flexible hours and/or they let them work from home. While this used to be an exotic idea, it is much more commonplace today. Between the cloud, smart phones, apps and laptops, anyone can work anywhere at any time. Ways to Engage Your Employees This Summer.

 

So let them.

 

Especially during the summer, it makes sense to give employees some flexibility and some time to enjoy the nice weather.  By allowing your employees to get work done at a time more convenient for them, they will reward you with their loyalty and hard work.

 

2. Share amenities like free lunch, massages, etc. When you visit a large, successful Internet company like Google or Facebook, one thing that is very noticeable is the amount of free (or subsidized) food available. No, it’s not cheap, but it is a benefit that keeps people at the office and not taking two-hour lunches.

 

For small businesses, one alternative might be to provide free, healthy snacks like fruit and water, which are affordable and appreciated.

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3. Lead team building events:  According to the SBOR, only about 25 percent of the small business owners surveyed used this tactic, and I think that is a mistake. In the summertime, when everyone is thinking about a lot more than just work, a fun event together away from the office is often just what the doctor ordered. Whether it is going out to dinner, a game, or a concert together, a team-building event is the best way to grow as a team and build a strong culture.

 

4. Allow social media at work: This is a tricky one. Twenty-four percent of those surveyed said they use this tactic to reward employees. However, as we all know, social media can easily gobble up a whole lot more time than one anticipates and potentially decrease productivity in the office. I recommend offering this perk to employees as it is a great way to take a short mental break from work, but certainly speak up if you feel the privilege is being abused.

 

5. Give unexpected freebies: Give employees some free time off. Have a spontaneous contest and give the winner a pair of seats to a game. Buy gift cards from Starbucks and hand them out. Give everyone an unannounced afternoon off.

 

This is the time of year when people like to take advantage of the outdoors. Let them and you and your business will both be rewarded. Ways to Engage Your Employees This Summer.

 

July 18, 2013 Today's Business, , , , , , , , , , 4 Read more >

Tips for running a professional practice without formal business training

Tips for running a professional practice without formal business training

by Jen Hickey.

 Tips for running a professional practice without formal business training Whether you’re thinking about leaving that big firm or graduation is looming, anybody looking to start their own professional practice should have a grasp of basic business fundamentals. While more colleges and universities are beginning to offer business courses to new doctors, lawyers, dentists, and other professionals, most still don’t. But the resources are out there, if you look for them. Some professional associations like the American Dental Association and the American Bar Association offer tips, information, training and seminars for managing the business side of a practice. Tap into your professional network and seek out advice from veterans in private practice. And don’t forget about the experts, particularly those that specialize in your industry. You can’t put a price on the right accountant or financial adviser. Tips for running a professional practice without formal business training

 

“There are structural differences for professional practices,” notes Mitchell Weiss, author and adjunct professor at University of Hartford, Barney School of Business. And the legal structure of your practice goes beyond taxes. “How you finance the practice and degree of liability and risk go back to the structure of your practice,” explains Weiss. If forming a partnership, make sure you know everything about your potential partner(s), including how much personal debt they’re carrying. “A business partnership is not unlike a marriage,” he says. “If something goes wrong, you’re responsible as a professional and an individual.” Tips for running a professional practice without formal business training

 

With practices that are capital intensive like dentistry, specialty health providers, and certain types of engineering or architectural firms, the equipment and/or software needed to run the practice will likely require some financing. “Speaking as a former lender, there’s only so much debt you can take on,” says Weiss. “Financing has to be done with some thought and deliberation to avoid rolling deficiencies from one loan to the next.” He cautions against the “snowball” effect of taking on too much debt, as equipment can become obsolete long before you’ve paid off the loan to finance it. “At some point, you’ll want to retire or sell the practice,” notes Weiss. “And if you owe more than you own, the value of your practice will diminish.” Tips for running a professional practice without formal business training

 

A few years after Dr. Robert Sorin started his own Manhattan-based cosmetic and restorative dental practice, he attended a seminar in Chicago, where the audience was asked: “Are you entrepreneurs that happen to be dentists, or dentists that happen to be entrepreneurs?” The answer to that question marked the beginning of his entrepreneurial journey as a dentist. “Over the next few days, we were given benchmarks to set a baseline for success,” recalls Dr. Sorin. “While the goals have changed over time, I’m still using those same benchmarks, such as calculating production per day and month, total collections per month and a detailed breakdown of fixed and variable overhead expenses each month, to track my business 25 years later.” Tips for running a professional practice without formal business training

 

Prof&Entre_PQ.jpgOne early misstep Dr. Sorin recalls was hiring too large of a staff. “Overhead costs can get quickly out of hand,” he cautions. “I’ve learned that you can have a smaller staff and get most, if not all, the same work accomplished.” Dr. Sorin also quickly learned the importance of forward budgeting. “By projecting costs one, two, and three years ahead, I’m forced to look at where expenses are going and where income strains may arise,” he explains. “It gives you metrics to ensure that your revenues at least equal or exceed expenses.” Tips for running a professional practice without formal business training

 

“It’s important to have at least a rudimentary understanding of how your financial statements work (income statement, balance sheet, cash flow),” notes Weiss.  Staying on top of your financials not only helps you track performance, but also better positions you to negotiate terms and structure your loan payments. “For example, if you know your company’s revenues are seasonal in nature (high summer months, low winter months), you may then want to negotiate a repayment plan taking that into account to avoid getting squeezed,” explains Weiss. He also recommends comparing your financials against those of other practices in the industry. “There are plenty of peer metrics out there to measure performance.” Tips for running a professional practice without formal business training

 

When attorney Cynthia Johnson Rerko was thinking about leaving her former employer, she was advised by a mentor to wait until she made partner. “People in the legal business and those hiring lawyers want one that’s made partner,” explains Rerko. “It’s a benchmark in a lawyer’s career.” She not only was the first female partner at her old firm, but also made it a year earlier than planned. In 1998, when Rerko left, she made sure she had enough cash reserves and a client list to get her Gainesville, Texas-based practice, which specializes in complex financial restructuring, off the ground. “Once I was comfortable I’d have a core business where I could at least break even, I was ready,” she says. Tips for running a professional practice without formal business training

 

Part of the motivation for starting her own practice was her desire to spend more time with her then 11-year old son. “The law is still very much about billable hours,” explains Rerko. “And when you work in a large firm, it means putting in face time.” Once she was the boss, she didn’t always need to be in the office to run her business. And she was able to rein in her caseload when needed. “I knew my business would be there when I got back,” she says. This also allowed her to tap into a qualified flexible work force of contract lawyers and law students with prior professional experience. Tips for running a professional practice without formal business training

 

Because she enjoys the work, Rerko sometimes had difficulty keeping track of her hours. “It can be a distraction,” she explains. “But when you’re making or breaking it based on collectibles, it’s something you have to do.” To enable her to concentrate on the legal side of her business, Rerko has an accountant that tracks her monthly revenues and expenses and manages her tax obligations. “It’s not the focus of my business,” notes Rerko. “But it’s necessary to keep it running.” Tips for running a professional practice without formal business training

 

Jan Moye also saw an opportunity when she launched her Irving, Texas-based specialty engineering firm Moye Consulting in 2002. Back then, she explains, the introduction of new technologies in security and other building systems created the need for low voltage systems engineering in facilities design. “Suddenly, there was much greater complexity to the data network that needed to be accommodated in new building designs,” notes Moye. Her former employer was very supportive of the move—in fact, they became her first client. “I started the business because I wanted to make money doing what I do well,” she says. “But over the years, I’ve encountered issues and challenges that they didn’t teach you in engineering school.” Tips for running a professional practice without formal business training

 

While her business was profitable from the start, it wasn’t growing enough. “Even though we did a great job on the execution of the technical work, I had to push myself to focus on marketing and networking with potential clients in the beginning,” she recalls. Once the firm had achieved a certain level of growth, she was able to hire a project manager who also handled sales and a marketing coordinator. “As the business got bigger, I could allocate certain jobs to those better suited for them.” Tips for running a professional practice without formal business training

 

But when an opportunity arose to improve her business skills, Moye took it. Through a friend, she learned of the SBA Emerging Leaders Initiative, a seven-month-long M.B.A. boot camp. Every year, the SBA accepts about 200 established small business owners into the program who meet certain criteria (e.g. have been in operation at least three years and have annual revenues of at least $300,000). She applied and was accepted in April 2012 and graduated in November. Tips for running a professional practice without formal business training

 

Moye and her classmates were given a curriculum that included employment law, sales/marketing, branding, competitive analysis, and strategic planning, among others. “They’re topics that would be covered in business school,” she explains. “The difference is you get to apply what you’re studying to your own business.”  Moye found the interaction and advice she got from other small business owners of different sizes and industries very helpful. “They saw the challenges and issues I was having from outside the box,” notes Moye. “Those fresh ideas helped me to take the blinders off.”

 

“There’s no right or wrong way [to running a practice],” notes Dr. Sorin. “But you have to decide what’s important to you, how you’re going to allocate your time personally and professionally, what your goals are and set up metrics to meet those goals.” Tips for running a professional practice without formal business training

June 9, 2013 Today's Business, , , , , , 0 Read more >

Facebook’s New Look: What the changes mean for your small business

FacebookFacebook’s New Look: What the changes mean for your small business

by Jennifer Shaheen.

 

Have you noticed lately that Facebook looks different? If your News Feed hasn’t changed yet, don’t worry, it soon will. Since early March, Facebook has slowly been rolling out its new News Feed design, giving users the first meaningful remodel of the site since 2006. What does this mean for you, the small business owner? Facebook’s New Look: What the changes mean for your small business

Facebook’s New Look: What the changes mean for your small business

 

Image is everything

The first thing you’ll notice about the new Facebook News Feed is how much larger and more prominent the pictures are. People can continue to upload photos directly to Facebook, or share their images from other social media sites, such as Instagram or Pinterest. Photos are so central to the new design that Facebook allows users to choose a “Photos Only” view (more about that later). Facebook’s New Look: What the changes mean for your small business

For the small business owner, the new Facebook News Feed means it’s time to embrace visual marketing. “Selecting the right images is key—images get behind our conscious thinking and connect with our emotions,” says Joe Decker, of Rock Slide Photography. “Images of owners or employees at a small business help create a sense of connection with that business, and make it easier for customers to make the first call.” Facebook’s New Look: What the changes mean for your small business

Share your own original images on your business’s Facebook page, but don’t stop there. Your visual marketing strategy can include using photos from your manufacturers or suppliers, buying stock images, sharing existing memes, infographics, and more.

Exercise your emotional intelligence when choosing images for your Facebook page. “Having people smiling, interacting, making eye contact, either with each other or with the viewer help give a sense of happiness for the perfection they seek in their lives,” says Dov Friedmann, of Photography by Dov, who specializes in corporate events photography. “You want to have an eye-catching image or photograph that attracts the viewer and also captures the essence or tells the story of what your company is about.”

How your customers will find you now

Central to Facebook’s new design is an easy to use navigation system that allows users to pick and choose what content they view. Content is sorted into Feeds, only one of which will be displayed at any given time. Switching from Feed to Feed is simple and easy, just like changing the TV channel.

There are six standard Feeds: All Friends, Close Friends, Music, Photos, Following, and Games. Your business page posts will appear on the Following Feed, and the images you post will appear on the Photos Feed as well.

Facebook has always had limited navigation. The redesign makes the navigation more prominent and easier to use. There will be an adjustment period as Facebook users become acclimated to the new system, but in the long term, the revamp may serve small business owners well. The organization of business pages into a centralized stream filters out distractions that compete for your customer’s attention.

Make the most of metrics

Facebook Insights tell page administrators how many people saw a post, how many people liked it, and how many people shared the post with their friends. Use this information to gauge how relevant and meaningful your customers find the images and updates you post.

“Our goal is to engage our fans and sometimes that might be a serious photo of a re-breather diver and other times it could be a scuba diver riding a bike underwater,” says Darren Pace, Director of Marketing for SDI, TDI and ERDI, a dive training organization. “Regardless of what type of images are assumed to work best, always check your insights to make sure your fans feel the same way.”

Move toward mobile

One of the most important changes in Facebook’s new design is one that many small business owners might not even notice. The new site design is responsive, which means Facebook’s appearance and layout will always be consistent, no matter what type of device users choose to use to view the site. Facebook’s New Look: What the changes mean for your small business

 Why did Facebook do this?

Take a look around as you go through the course of your day. How many people do you see that are ‘unplugged’—not actively engaging with any type of mobile device at all? Chances are the number won’t be too high. The reason it looks like everyone is using a smartphone or tablet computer is pretty simple: almost everyone is. Cisco’s Visual Networking Index has projected that there will be more Internet-connected devices than there are people by the end of this year.

A recent Google study found 90 percent of Americans move sequentially across multiple screens in one day to access information and entertainment. Facebook’s adoption of responsive design provides their customers with a satisfying experience no matter where they are. Facebook’s New Look: What the changes mean for your small business

Impact of responsive design

What happens if a customer who is using Facebook on their smartphone or tablet decides to follow one of your links and goes to your website? This is where website design becomes really important. If your business website is responsive, it will adapt automatically to look good on your customer’s viewing device, and they’ll have an optimized experience.

If your business website is not responsive, it may not look good or function well on your customer’s viewing device. The website that looks great on a desktop computer may not render properly on a smartphone. Customers are impatient. They’re not going to try to figure out how your website is supposed to look. They’ll just see that things are out of alignment or too hard to read and move on—and there goes your potential sale. Facebook’s New Look: What the changes mean for your small business

May 30, 2013 Today's Business, , , , , , , , , 0 Read more >