Posted tagged ‘Social Media – Small Business’

Small Business Guide – Personal Evaluation Part I

July 6, 2010

You see things; and say, “Why?” But I dream things that never were; and I say “Why not?” – George Bernard Shaw

Although there is no exact profile for a successful business-owner, the following evaluation will assist you in determining if you have the inherent aptitude and skill sets to be a successful entrepreneur.

WHO AM I? (In terms of self-employment)

In each question, check the answer that says what you feel comes closest to describing you. Be honest! This is for YOU!

1.    Am I a self-starter?
* I like to do things on my own. Nobody has to tell me to get going.
* Once someone gets me started, I can keep things going OK.
* Usually, people have to keep after me to get me moving.

2.    How do I feel about other people?
* I like other people. I can get along with just about anyone.
* I have a group of friends, and no one else matters.
* Most people bug me.

3.    How do I act as a leader?
* Usually I can get others to go along with me on things.
* I can give people orders.
* I like for others to get things going. Then I decide whether I want to join in.

4.    Do I take responsibility well?
* I like to take charge of things and see them through to the end.
* I’ll take over if necessary, but I’d rather someone else did.
* I usually try to get someone else to do the work.

5.    How good of a worker am I?
* I can keep going as long as I want. I don’t mind working hard.
* I work hard for a while, but when I’ve had enough, that’s it.
* I don’t think hard work necessarily gets you anywhere.

6.    Can people trust what I say?
* I don’t say things I don’t mean.
* I try to be on the level most of the time. Sometimes, though, I say whatever is easiest.
* If the other person doesn’t know the difference, why sweat it?

7.    Can I stick with it?
* If I make up my mind to do something, nothing stops me.
* I usually finish what I start – if it doesn’t gel fouled up.
* If it doesn’t go right, why beat your head against a wall? Give up.

8.    How do I usually handle an emergency?
* I step in and take charge.
* I help where l can.
* I panic and let someone else take over.

9.    How do I feel about asking for payment for my product?
* I feel comfortable, because I know my product is worth.
* I am uncomfortable asking, but I do it.
* I prefer to wait for the person to offer to pay.

10.   How good of an organizer am I with a new task?
* I prefer to plan it from beginning to end.
* I look at the general issues and start.
* I go for it and plan as I go.

11.   How do I react to new tasks?
* I love to brainstorm, create and implement something new.
* Once the brainstorming and creative part is done, I’m bored and have trouble following through.
* I like to implement something that has already been designed.

12.   How do I usually make decisions?
* I identify alternatives and research each one.
* I research the decision, but have difficulty making up my mind.
* I avoid making decisions whenever possible.

13.   Can I make good decisions?
* I can makeup my own quickly if I have the right information. It usually turns out OK.
* I can if I have plenty of time. If I have to decide fast, I later doubt my decision.
* I usually make spur-of-the-moment decisions and follow my gut level feeling at the moment.

14.   How do feel about competition?
* I work best when there is competition. It keeps me motivated.
* I prefer team efforts and want everyone to come out ahead.
* I don’t like competitive situations. They make me nervous.

15.   Can I influence other people?
* When I am right I can usually convince others.
* Sometimes I can influence others.
* Be reasonable; you can’t change someone else’s mind.

16.   What is my attitude toward success?
* If I work hard and plan well, I can succeed
* My success depends largely on others.
* Success is a matter of luck.

17.   What do I usually do when given a new task?
* I usually dig right in and get started.
* I do a little at a time.
* I procrastinate until the very last minute.

18.   What do I do when faced with failure?
* I usually try to come up with a new approach or angle.
* It shows me that I should stick to what works.
* I realize that I never should have tried in the first place and abandon the idea.

19.   How do I feel about failure?
* It’s a good learning experience.
* I avoid dealing with it at all costs.
* I take it as a personal rejection and retreat.

20.   How do I feel about meeting new people?
* I like being around new acquaintances and usually can get along well with people I’ve just met.
* I am uncomfortable if I am not with my friends.
* I hate meeting new people; usually I just don’t say anything when in a new group.

21.   How do I react to pressure?
* I work well under pressure; it keeps me moving.
* I don’t like pressure, but deal with it if I have to.
* I crumble under pressure.

22.   How good is my health?
* Great
* I have the energy to do most of the things I want to do.
* I tend to run out of juice.

Now count the checks you mode:
* How many are beside the first answer to the question?
* How many are beside the second answer?
* How many are beside the third?

We find people who check the first answers most frequently have many of the personality traits useful to entrepreneurs. If you have checked several third choices, you should consider developing new skills, or finding a business partner whose skills complement yours. You may even want to consider whether being in business for yourself is the right choice for you.

Small Business Funding, How to fund a startup, Due Diligence (III)

December 4, 2009

Each and every Startup must conduct the Due Diligence phase before meeting VCs  for Venture Funding.  This stage primarily evaluates the viability of the business concept for the investor or an entrepreneur. This largely overlooked, or at the very least underrated task is of utmost importance in the lifecycle of a deal. Before we go investing often-scarce resources on a venture, we must make sure that it can achieve a sustainable competitive advantage in the marketplace. Most entrepreneurs would like to get to market before the competition and so in their haste make a tactical mistake of sacrificing due diligence. It’s that run fast or die mentality again. The reality is that one must not only get to market as expeditiously as possible but also allocate sufficient time to researching the business issues. Otherwise failure is eminent. That having been said, the process of due diligence, which involves a great deal of probing and the asking of thought provoking questions, comprises of the following nine steps:

7. Business economics and financials

 Investors are always looking for 5-year financial projections.  This will enable them to see the revenue growth, predict cash flow requirements and questions the assumptions in the model.  The entrepreneur must take this exercise seriously since the economic viability of the idea is tested here. It is advisable to hire an experienced accountant. One must build a comprehensive model of your business here; a virtual experiment. Any business model must include a detailed cost-revenue structure detailing all assumptions. Revenue, costs of selling, general, administration and marketing.  Double-check your figures! Remember that this may take a while, but you have to do it before meeting with the investors.

8. Funding needs.

Okay, now that you have your business model in place, you should have some idea of how much funding you’ll need. Traditionally, a financial analysis will allow you to validate the business and economic model.  By listing the startup’s key initiatives and objectives for the short and longer term, the entrepreneur can estimate the capital needs.  Armed with the Financial Analysis, the entrepreneur can determine the amount of money required to fund the operation and successfully execute the idea. You’ll probably want to sit down with your business strategist, along with some industry colleagues of yours and prepare a time-line comprising of funding and spending phases for your business. Think of it in terms of six to nine months of spending, then raising additional capital. These stages will be elaborated upon in the Funding chapters.

9. Exit Strategy

A comprehensive business plan must contain a section on an exit strategy for the startup.  This strategy must be well thought out and incorporated into the business model.  An exit strategy enables the entrepreneur to envision where they would like to take the startup.  Depending upon the business mission the exit strategy for a startup may range from achieving revenue targets to capturing a segment of the market or even being acquired by a competitor.  Most startups plan to expand operations and sustain a competitive edge by raising additional capital in the form of an Initial Public Offering (IPO).

Even though it is extremely hard for an entrepreneur to hand over the reigns of the organization to another, one must plan to take the idea to the next level and step away gracefully.  Keep in mind that you probably don’t want to see your idea stagnate by getting stuck with it in a static revenue loop. Another difficult issue, which goes back to Organizational Structure, is the determining of your own level of competency. Remember, you want to do what’s best for your startup, so when should you hand over the reigns to someone more qualified?

Small Business Funding, How to fund a startup, Due Diligence (II)

December 2, 2009

Each and every Startup must conduct the Due Diligence phase before meeting VCs  for Venture Funding.  This stage primarily evaluates the viability of the business concept for the investor or an entrepreneur. This largely overlooked, or at the very least underrated task is of utmost importance in the lifecycle of a deal. Before we go investing often-scarce resources on a venture, we must make sure that it can achieve a sustainable competitive advantage in the marketplace. Most entrepreneurs would like to get to market before the competition and so in their haste make a tactical mistake of sacrificing due diligence. It’s that run fast or die mentality again. The reality is that one must not only get to market as expeditiously as possible but also allocate sufficient time to researching the business issues. Otherwise failure is eminent. That having been said, the process of due diligence, which involves a great deal of probing and the asking of thought provoking questions, comprises of the following nine steps:

4. Marketing strategy

 The primary purpose of the marketing strategy is to convince the investors that the market can be developed and penetrated. The sales projections made in the marketing section will drive the rest of the business plan by estimating the rate of growth of  the operations and the financing required. The marketing strategy revolves around three primary drivers:

  •  Pricing
  • Distribution channels
  • Promotion

 Obviously, the key here is market penetration. Analyze each of the criteria mentioned above in great detail to arrive at factual data.  Then, with Machiavellian passion, we must position our business to achieve competitive advantage and an increasing market share.  Do you want to buy out your competition, or do you simply want to build up your customer base? Also, what’s the optimum amount you should spend on advertisement? This step will involve a lot of money talk; so don’t be afraid to call up that industry veteran or accountant friend of yours. A comprehensive cost analysis of how you will deal with the competition must be made before any actual steps are taken.

 5. Intellectual Property Considerations (IP)

 This seems to be the issue of the day. In this Internet-driven world, is it really possible to copyright ideas? Well, however you stand on Napster, it is necessary that you create an environment in the market that will protect your idea. Needless to say, protecting intellectual property is foremost on the entrepreneur’s mind. Entrepreneurs are anxious to protect ideas, trade secrets, designs, and innovative techniques along with confidential information. Whether you business will be website-based or not, it is highly recommended that you retain an attorney to draft legal documents to protect your intellectual property.  The following are few of the issues that can be handled by your attorney:

  •  Non-Competition Agreement
  • Confidentiality Agreement
  • Safeguard Trade secrets in accordance with the Uniform Trade Secrets Act
  • Employment Agreement protecting Trade secrets, Inventions and Patents
  • Licensing Agreement
  • Foreign Licensing for Patents and Technical Assistance Agreements
  • Franchise Agreement
  • Research & Development Agreement with Outside Company

 You will want to sit down with your attorney to go over patents and copyright infringement analysis and to develop service documents, such as user agreements and permitted usage rules.

6. Competition

Whether you are first to market or not, each and every product or service will face competition. You should focus on who your competition is and what they or a hypothetical, “best-case-scenario” competitor may have, that you don’t.  With market and timing in mind, you really have to explore why a customer would want to pick you.  To begin with, understand your core competency.  What is your business really good at?  What are the products or services that you are planning to provide? What are the strengths and weaknesses of your offering when compared to your competition?  Capitalize on your strengths and improve upon your weaknesses.  In order to meet and beat the competition you must first and foremost understand your product line or service offering and then the competition. The entrepreneur must explain how the market’s need is currently being met and how the new product will compete against the existing solution.  The venture capitalist will be looking to see how and why the firm will beat the competition.

Small Business, Entrepreneur Advice, Don’t wait until everything is perfect

November 29, 2009

Ask this cfo’s advice to startups, entrepreneurs and small business.

Don’t wait until everything is just right. It will never be perfect. There will always be challenges, obstacles and less than perfect conditions. So what. Get started now. With each step you take, you will grow stronger and stronger, more and more skilled, more and more self-confident and more and more successful.  – Mark Victor Hansen

Small Business Funding, How to fund a startup, Due Diligence (I)

November 28, 2009

Each and every Startup must conduct the Due Diligence phase before meeting VCs  for Venture Funding.  This stage primarily evaluates the viability of the business concept for the investor or an entrepreneur. This largely overlooked, or at the very least underrated task is of utmost importance in the lifecycle of a deal. Before we go investing often-scarce resources on a venture, we must make sure that it can achieve a sustainable competitive advantage in the marketplace. Most entrepreneurs would like to get to market before the competition and so in their haste make a tactical mistake of sacrificing due diligence. It’s that run fast or die mentality again. The reality is that one must not only get to market as expeditiously as possible but also allocate sufficient time to researching the business issues.  Otherwise failure is eminent. That having been said, the process of due diligence, which involves a great deal of probing and the asking of thought provoking questions, comprises of the following nine steps:

1. Concept validation by Subject Matter Experts (SME)

More often than not, would-be entrepreneurs come up with their ideas because they have observed inefficiencies in business operations or are visionaries in their field of expertise, being able to hypothesize the natural evolution of technology and business processes. Simply put, ideas are entrepreneur’s response to finding a solution to a perceived problem.  Whether you are ill or are trying to start a new company, getting a second opinion always helps.  It is an unbiased view on a given situation. That is the essence of concept validation by SME.   One must seek out an independent SME to review the content of the business concept and then have them opine on its viability.  SME’s have the advantage of having deep skills in their area of expertise and can postulate whether the idea can indeed be converted into reality.  Some of the possible outcomes of such validations are:  

  • Excellent idea – can be implemented into a successful business.
  • Current technology is unable to support the idea.
  • Market is already saturated with similar ideas.
  • Idea has been tried before and failed.
  • Great idea but needs improvement.

 Entrepreneurs tend to get obsessed with their pet projects and loose their objectivity.  Hence, a second opinion is needed.  Have true industry experts who know every facet of the game, test the concept out. Has it been tried in the past, and to what end? Will it work? These expert opinions are key. Listen to them.

 2. Market analysis.

Rather self-explanatory: This task involves deep analysis of not only the environment in which we wish to thrive, but also the competition. After all, in times of a recession, it may not be wise to try and sell luxury goods. First, thoroughly define the target market to be served using recent market data and analysts’ estimates of current and projected size and growth rates (again, don’t be afraid to ask for help from those you trust).  Keep in mind exactly what percent of the market the company plans to capture and envision who will buy the product and why, in light of hypothetical or actual competition. Take note of the distribution/selling strategies used in the industry, and carefully choose which one(s) you plan to use to penetrate the market. The Business Plan chapters will further elaborate upon this topic.

 3. Organizational structure.

Ask yourself tough questions about the organization: what do we want to look like? Of course we want the best for our business. Can we do true justice to our idea? But we need to be careful in choosing the most appropriate people for the job, and not necessarily the “best”. So, who do you want in management? What do you want your creative teams to look like? This is where you want to be very self-critical. You must identify your strengths, weaknesses, and needs; then, you must address them realistically. Also, you will want to start giving thought to your board of directors, and whom you would like to see as your CEO (Chief Executive Officer) and CFO (Chief Financial Officer). You may want a couple of insiders whom you trust in order to make sure that your interests are served.  On the other hand, you may also want some powerful industry-types who know others in the industry: people who can provide extremely valuable input and contacts. And don’t forget: additional subject matter experts and legal contacts can be just as valuable!  Above all you will need to define and build an organization that believes in your vision and will do whatever it takes in making it a success.

Try Again – A Third Grade Lesson for Small Business

November 18, 2009

It is especially important for Small Business Owners, Entrepreneurs to develop an indomitable spirit.  This little poem inspires me when I feel like a hampster on a wheel.

TRY AGAIN
from THE BEACON THIRD READER by James H. Fassett with a copyright dtd: 1914.

Drive the nail aright, boys,
Hit it on the head;
Strike with all your might, boys,
While the iron’s red.

When you’ve work to do, boys,
Do it with a will;
They who reach the top, boys,
First must climb the hill.

Standing at the foot, boys,
Gazing at the sky,
How can you get up, boys,
If you never try?

Though you stumble oft, boys,
Never be downcast;
Try, and try again, boys,
You’ll succeed at last.

Integrated Approach for SMB, Small Business, Startups, Entrepreneurs

November 7, 2009

In the face of continuous technological changes and financial market volatility, it is becoming increasingly important to define business ideas and validate the concept before launching a high technology or eCommerce venture.  The Integrated Approach provides the means to entrepreneurs in objectively analyzing their business ideas.  It enables them to identify the underlying factors that are critical for the longer-term success of the venture and whether their concept is actually a viable business solution.  Additionally, the framework evaluates the allocation of limited resources, especially of cash, and helps determine if the venture can deliver a sustainable competitive advantage.

If you can’t answer the following questions – using no more than the napkin your drink has been served on, the bartender’s pen and a conversation with the person on the stool next to you – then you might want to think again . . .

Business Questions:

  • Who is your customer?
  • What is your revenue model?
  • What is your cost structure?
  • Who is your competition?
  • What is your sustainable competitive advantage?

If you can actually answer the five questions above, then form a team and build a business plan around the answers you’ve scrawled on that drink-soaked napkin.  To form a team you must – you guessed it – answer five more hard questions . . .

Team Questions:

  • Who should be on the team?
  • What are the necessary roles and responsibilities?
  • Who is missing from the team?
  • What are the lines of communication?
  • How will decisions be made?

Starting a business is not an easy process, however by following a diagnostic approach one can actually crystallize the strategic vision, and validate the concept before scarce resources are allocated to the venture. The integrated approach consists of three distinct phases namely due diligence, funding and execution.

Source: James M. Rasmussen, Manager- Global Deal Services at Accenture.