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startup-investor

Article Contributed by Jayne Blake

Entrepreneurs needing the help of investors commonly feel compelled to take whatever money comes along, no matter who is offering it.

While funding is understandably critical to the successful operation of a startup, there are times when accepting money is the wrong decision for a company. If you think of investors as relationships, then the reality of entering into a bad relationship that you won’t be able to walk away from for possibly several years should be sobering.

Here are a few tips that will help you make the right decision when it comes to choosing the right investor for your business.

The questions you should ask of any would-be investor

You want to evaluate each investor as though you were looking to enter into a long-term relationship. In other words, it’s important to know if they are going to be the right fit for your company. For that reason, don’t be shy about asking the questions that will get you the information you need.

  • What companies have you invested in in the past? And, where are you currently investing?
  • Would you mind if I reached out to those CEOs?
  • Other than money, what type of support do you provide the businesses you back?
  • What type of experience do you have with a company like mine?
  • What is it about my business that interests you?
  • Have you invested in similar companies in the past? How did it go?

Look beyond the money to see what else the investor has to offer

The best types of investors will take an interest in your business and be concerned about finding areas where they can help out. Investors should be introducing you to as many other investors, partners, and potential customers as they can.

In short, you want them to act as though they have your company’s best interests at heart. If they aren’t interested in finding out what areas or issues you might be struggling with and offering to see how they can help, that should be a concern.

What information about yourself should you share with investors?

In order for an investor to be excited about investing in your business, you need to give them something to get excited about. That means you need to share your story: how you got your BIG IDEA, how your team met, what makes your team ‘special’, how well you work together, and why you are the right team to make your big idea work.

It is important to make your business story as personal and passionate as you can. At the end of the day, investors are investing in your team and your vision as much as anything. Don’t make it all about dry numbers and figures if you hope to inspire.

What portion of your business should you expect to have to give up to an investor?

This can be a tricky area. The answer varies according to the level of investment you are seeking, and how much progress you’ve already achieved toward your goals.

David Cohen, co-founder of the startup accelerator TechStars mentions that entrepreneurs should expect to give up anywhere between 5% and 40%, with 20% to 30% being the reasonable rule of thumb for every round of investment given.

Cohen warns, however, that businesses should be wary of any investor who comes along and expects to take half or more of your company. In the end, you need to be assured that you are receiving more value from the investor than you are surrendering.

Jayne Blake works as a Communications Manager at Prospa, Australia’s largest online



 
  


atoryteller

Article Contributed by Daniel S. Williams

When I was younger I loved the Dr. Seuss stories—The Lorax, Green Eggs and Ham, all of them. Featuring colorful depictions alongside fictional storylines, I found them intriguing with a special “something” about the widely popular works. Though a pseudo-name, Dr. Seuss was a masterful teller of stories, a visionary of sorts from the treatment of environmental concerns to trying new things. The entrepreneurial ecosystem can learn much from the crafting of such powerful stories. As an entrepreneur, it is your responsibility to convey that vision, not unlike the storyteller genius himself, Dr. Seuss.

Tell your tale – As the entrepreneur you have the most intimate connection to your vision as you envision it. Embedded in any good story is a tale that engages and leaves one inspired, as many of the Dr. Seuss works often left me. Not every startup or idea takes off to become the next “unicorn” of the Valley. But every entrepreneur grows their idea chiefly as the byproduct of conveying a profound vision. Making some measurable impact. Often the best storytellers become so by being immensely acquainted with the tale—having told it over and over. Such iterative practice is what an entrepreneur performs—telling your vision to anyone who will listen to it, and hopefully partake in it too. How convincingly one tells the story makes a world of difference, with passion and drive often leading the way.

A professor of mine once said that entrepreneurs often have two distinct “categories” of traits: Rigor and vigor. This is the passion and drive fueling the tale as it unravels. It can either be a story that is uneventful and dull, or it can be one of intrigue and captivation.

Write the future chapters – As an entrepreneur, the story is far from being over. You have worked on the opening few chapters to set the stage for your idea, moved into the middle pages where you may have even developed the vision beyond pencil-and-paper, but there is the second half that remains. It is the most important part where you can craft the vision to incorporate customer feedback, adapt the initial prototypes through a great deal of iteration. Chris Sacca, billionaire entrepreneur and investor, once said on an episode of Shark Tank(on ABC Television) that “ideas are easy” and “execution is the hard part.”

Your ideas will change along the way, malleable to the feedback and inputs of countless individuals from angels, to mentors and advisors, to potential first customers. Regardless of this sometimes radical change the entrepreneur must be able to incorporate the adaptations along the journey into the revised vision. As each tweak is made a new chapter of the story is crafted. Only the story lacks a clearly-defined ending so long as you always seek to make an impact with your venture. There is not a limit to what your idea can be; the limit is how well an entrepreneur is able to define the vision. Each chapter will prove immensely valuable in teaching the entrepreneur something as well—one of the less emphasized benefits of growing your startup venture.

Go and start on your entrepreneurial tale. If you ever need guidance on the way, Dr. Seuss may shed some light on how to get there.

About the Author:

Daniel S. Williams is currently an Advanced-Standing senior at Boston College, majoring in Management with a concentration in Finance in the Carroll School of Management. He also is actively involved in serial entrepreneurial pursuits, including Sandbox SEF and Xperii.


disaster

With the weather volatility on the East Coast during this El Niño and other climate-change-induced disasters in the media lately, disaster preparedness should be on our minds, not only as individuals but as owners of business entities as well. Disasters can range from the super-sized Hurricane Sandy variety on down to the office fire caused by a coffee burner left on overnight. In respect to all sizes and scopes, every responsible business should have a disaster recovery plan of some kind. At the risk of beating a dead-horse-epigram, it’s worth it to remember that the best defense is a good offense. Having a solid plan ahead of time is like reading the book before you see the movie. Sure, the movie version will vary some from the book, and there will be some unexpected surprises, but you know how the plot goes and how it all ends–such is the security you receive by forming a business continuity plan.

That’s what Insurance is for, Right?

You might reason that this is the very purpose you keep paying your monthly business insurance premiums. Having the right coverage is a good start, but your insurance isn’t going to tell you where to find temporary office space, how to keep your customers from deserting to the competition, or ensure you have a complete backup of all your electronic records. To do that you need…

A Business Continuity Plan

A business continuity plan acts as a roadmap when normal business operations are interrupted by an unexpected event. Such events could include large non-specific disasters like storms, earthquakes, floods, epidemics, acts of terrorism, or civil disorder and unrest. Other threats specific to a company include fire, utility outage, theft, supply chain disruption, sabotage, and cyber-attack.

The first step in putting together a comprehensive plan is to identify the threats to your business, such as those listed above. The next step is developing a set of impact scenarios which takes a pragmatic view of how those threats will directly impact your business operations. For example, if you are in the business of shipping and contamination/recall occurs, you need to calculate how much money you’ll be losing per day. Be specific and plan for the worst case scenario. In the contamination scenario, your company should not only be insured but should have plenty put away in escrow to comp for employee hours.

After identifying how each of the scenarios will impact your business, the next logical step is to identify the means by which you will recover. This step will focus on picking up the pieces and starting over. It will address concerns such as where to find temporary office space in the event of a fire or where to find alternative vendors in the event of a supply chain disruption. Start preparing for these situations now by drawing up lists of these vendors and developing the necessary partnerships for that “just-in-case” moment. Most importantly, make sure that your most important documents are backed up and stored offsite so that even if you lost your office space, you don’t lose all of your important documents.

Peace of Mind

Nobody wants to dwell on the negative. Even the time spent on a recovery plan can seem like a downer. It’s a tedious process that can eat up time you’d rather spend on more immediate concerns. But look at it this way: running a business is a lot like being a tightrope walker. You have to stay focused and maintain your balance at all times. And like a professional tightrope walker, you pay as little attention to the safety net below you as possible. Nevertheless, the security in the back of your mind provided by that net is invaluable, and you can bet you’ll thank your lucky stars if you ever lose balance and happen to fall off.


dreamteam

Article Contributed by Dr. Joey Faucette

It’s as familiar as the chorus of American Pie by Don Mclean, only instead of “the day the music died,” it’s “the day the employee died.”

It begins with something like, “She’s just not working out…” and wraps up with “It’s just hard to find the right person today.”

Whether you’re a small business owner or a C-Level Executive of a Fortune 50, you’re in search mode 24/7 for the right person in the right place at the right time for the right reasons. The conundrum lies in focusing too much on the person with little regard for the place, time, and reasons in your business.

Here are four questions you must ask to discover your Work Positive Dream Team:

Where is the Place?

Place refers to the position on the team. Every football team has one quarterback, one center, two guards, two tackles, etc. Their places are defined clearly. Their assignments emerge from their places on the field. They are trained to know what to do when.

Does the position you’re seeking to fill have a complete description? Did the team participate in writing it? Is everyone’s mind clear about how the team Works Positive once it’s filled?

The largest deficiency I discover almost weekly in my coaching and consulting business is an inadequate understanding by leader, team and candidate of, “Where is the place on the team that this person fills?” Incomplete position descriptions are typically discovered by the candidate in the first 90 days when the “other duties as assigned by leader” take over the previously understood primary tasks.

When is the Time?

Time refers to a couple of realities. First, what happens once the person is hired? Is there a prescribed process for assimilation and integration?

Second, and this is most important, who will take the time in this process to train the new team member? When will the leader receive feedback from the trainer to monitor the process? What are the benchmarks for appropriate progress?

Even if all of the dominant tasks are exactly the same as the candidate performs currently for another company, your business culture is different. That means training is required for team and task integration to occur. Neglect training and you install a revolving door on your team.

What are the Reasons?

Reasons refers to an evaluation of the team opening. Why is this position open on the team now? What was the impact of our relationship with the previous team member on this opening? Is it a new position designed to increase capacity? Then what are the ripple effects on the team, i.e., who relinquishes what and how?

Discover the reasons for this opening by looking back at former teammates’ experiences gathered from exit interviews or a strategic planning process that led to the creation of the position so you forecast accurately for maximum effectiveness.

Who is the Person?

Finally you arrive at the person. Diagnostic tools are readily available to determine the person’s fit and finish with place, time, and reasons. You previously defined place, time, and reasons. Now you define who the person is that fills the position best.

Pursue an understanding of the person and who she or he really is by using case studies and role plays. Do personality indicators. Dig deeply into second-generation referrals. Examine social media content. Inviting someone on your team is analogous to getting married—for better, for worse. The key is to assure as many “better” experiences as possible.

You do just that as you positively ask these four questions and invite your Dream Team to Work Positive.

About the Author

Dr. Joey Faucette is the #1 best-selling author of Work Positive in a Negative World (Entrepreneur Press), Positive Success Coach, & speaker who helps business professionals increase sales with greater productivity so they get out of the office earlier to do what they love with those they love. Discover more at www.GetPositive.Today.


Top Things to Consider for SMEs in 2016

It feels like Christmas was only a blink of an eye ago, but we’ve already reached the end of January. As such, we’re well into 2016. This means that, if you’re yet to start your New Year’s resolutions, now is the perfect time. If your resolutions, like thousands of others, were to grow your SME, then you’re in luck. We’ve put together this list of the top things to consider for SME owners in 2016. Follow them carefully and you’ll easily achieve your resolutions.

Marketing Tactics

Effective marketing is one way that you can organically grow your business. From hiring an SEO agency to boost your visibility in search engine results to effectively running and managing your social media accounts, marketing could be simpler than you think, and it could hugely grow the reach of your business, improving sales.

Be careful though. It’s very easy to spend incredibly high amounts of money on online marketing. As such, plan your spend very carefully. Set a limit and stick to it. Also carefully consider what platforms you’ll use. Be relentless in asking yourself “why” you’re using a certain type of marketing over another and justify every expenditure.

By doing this, you’ll stand the highest possible chance of your marketing tactics succeeding. Targeted marketing can be highly effective, just don’t let your expenditure run away with you. If necessary, hire an expert.

Communications

Secondly, if you’re looking to grow a business, you have to think about how it communicates and whether you can take down any barriers. Effective communication is a great way to grow a business and it can be relatively cost free.

Technological innovations mean that communication is now simpler than ever before. As such, simple 21st century communications such as VoIP from companies like Gradwell are a no-brainer for SME owners. They’re cheaper than conventional phone lines and are far more reliable. Thus, you’re saving time and money as well as increasing your output.

Staff Retention

Finally, if you’re looking to grow your business, then you have to do so organically and naturally. As such, you have to think about staff retention. Without your existing staff members staying, you’re only ever replacing staff and not growing as a business. Plus, you’re actively setting yourself back as you’re losing knowledge.

To retain staff members, you have to ensure that morale remains high. Organise team bonding sessions (this could be something as simple as going to the pub on a Friday afternoon or as adventurous as a big paintballing day out). Also ensure training is in place so staff meet professional development goals. Happy staff members won’t want to leave, and they may even help recruit people they know if they’re in a positive working environment.

To conclude, we may have already reached the end of January but that’s certainly no reason why you shouldn’t be able to complete your SME based New Year’s resolutions. By following the above steps, you’ll maximise not only your chances of keeping your New Year’s resolutions, but you’ll also be able to grow your business. Here’s to the rest of 2016.



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GetEntrepreneurial.com is a small business blog dedicated to providing business advice and resources to our community of aspiring entrepreneurs. Our specially hand-picked panel of GetEntrepreneurial.com Network experts regularly contribute entrepreneurial content and professional tips for small business owners worldwide.