* How much of that market can you realistically service?
The Team Who Doesn’t Quit
I always hear Angel and Venture Capital investors say “We invest in teams”. It’s important the founding team have the right mix of skill sets to develop products and services, market them, and handle the day to day operational aspects of the above.
But…. Especially important is the investor knowing that when the going gets tough (and it will sooner or later), the founding team will dig in and persevere.
Investors do not want to take over businesses and run them day to day. That’s your job. Their job is to provide capital, guidance, advice, and other forms of support. If you fail to do your part, they lose their investment. So you must project an attitude of commitment to your ideas.
If this “just” an idea to you, or are you “all in”? How do you convey this idea of being “all in” to potential investors?
The Business Model
Your business fundaments must make sense.
If you sell something for $15, it better cost you $7.50 or less to make it.
If you sell a SaaS (Software as a Service) app that is free to most people and premium to some, you better have a mechanism built in that encourages users to share with others.
If your business fundamentals are unclear, or even worse terrible, you will be hard pressed to find investors.
Traction
Maybe last, but definitely not least, you must demonstrate that real people will exchange real money for whatever it is that you sell.
The way you do this is by having real people pay real money. The more people and the more money the better.
I’ve heard investors refer to “The Experiment”. This is the proof that there is a market for your goods and services.
There was a time that investors were willing to fund The Experiment. I’ve heard investors say (repeatedly) that often turned out badly.
When the entrepreneur was performing The Experiment with someone else’s money, they did not design the experiment to be as inexpensive as possible. When the entrepreneur uses their own money to fund The Experiment, they get really creative about keeping the cost down.
For that reason, the cost of this experiment rests with you.
I’ve been to many pitch events, and startup businesses with zero customers and zero revenue do not get follow up meetings with potential investors.
The ones who say things like “In the past 6 months we’ve received $50K from 3 customers and have 7 more customers in the sales pipeline” do.
Ever Heard of Inbound Marketing?
If not, you should. Inbound Marketing is a means of attracting your desired audience to your website via organic search traffic, and converting some of those website visitors into prospects for your business.
HubSpot is an Inbound Marketing tool vendor who did a study showing that leads from Inbound sources are 61% cheaper than leads from others sources.
For this reason alone, you should care. You should learn more.
However, the HubSpot tool is rather costly (starts at $800 a month) for early stage startups carefully watching their cash.
To learn how you can harness the power of Inbound Marketing on the cheap, please check out Inbound Marketing University, an online school and community devoted to teaching small businesses and early stage startups how to grow their online presence and generate leads.
Borders went bankrupt because they failed to realize the importance of a strong online presence. Learn to be like Amazon instead, and learn how to create an amazing online presence for your startup.
You need traction? Inbound Marketing will do that for you.
About The Author
Kevin Carney is an expert in Inbound Marketing who writes on the topics of Inbound Marketing, SEO, and WordPress. Kevin runs Inbound Marketing University, the online school and community where people learn how to attract their desired audience to their website and convert website visitors into prospects. Kevin can be followed on social media at @ kevinbcarney, +KevinCarney, and Linked In , and contacted on the Inbound Marketing University Website.
3 Business Investments Every Entrepreneur Should Make
By Rieva Lesonsky
If you’re like most entrepreneurs, you may not be investing in your retirement (at least for now) because you’re too busy putting every penny into your business. Good news for hard-working small business owners: A survey by The Principal Financial Group reports entrepreneurs are feeling more optimistic than they have in three years.
More than half (53 percent) of business owners say their company’s financials have improved compared to last year; about the same number predict that their business financials will improve in the coming year; and almost nine in 10 (88 percent) say the financial health of their business is either stable or improving.
There’s good reason for the optimism: Almost three-fourths (71 percent) of small business owners polled say they have surplus business capital on hand. That’s up from 62 percent last year. Where are small business owners planning to reinvest this extra capital? There are three smart places all entrepreneurs should be investing:
1. Invest in Your Business
Almost half (46 percent) of entrepreneurs in the survey will invest excess capital into their businesses, with 37 percent making purchases to improve their companies’ technology and 36 percent taking steps to protect their businesses from loss. Since insurance and technology are places where many growing businesses fall short, this is good news.
2. Invest in Your Employees
You wouldn’t have your business without your employees, so investing in them is important, too. Last year, 41 percent of business owners hired new staff, citing customer demand, high volume of business and confidence in future growth as their top reasons for doing so. In the next 12 months, the same percentage will hire full-time employees.
Existing employees deserve an investment in their happiness, of course. Forty-three percent of business owners say retaining talented employees is a challenge for them. To help improve loyalty, 33 percent offer competitive benefits packages, and in the next 12 months, 33 percent of entrepreneurs plan to add more employee benefits, up from 16 percent last year.
3. Invest in Yourself
Last, but not least, don’t forget to invest in yourself. Too often, business owners support the business by taking money out of their own salaries (or not taking a salary at all). Not only can this cause family strife and leave you without adequate retirement resources, it can also be a sign of a poor business model. This year, 75 percent of business owners say their personal finances and household finances are healthy- up 4 percentage points from last year. That’s really good news.
Investing in yourself has a psychological component as well. I’m happy to see that 48 percent of small business owners report either taking vacation time or using technology to work anywhere they want. In addition, 43 percent regularly make time for exercise, and 39 percent have enough staff so that they can leave work without worrying.
About the Author
Rieva Lesonsky is CEO of GrowBiz Media, a media and custom content company focusing on small business and entrepreneurship. Email Rieva at [email protected], follow her on Google+ and Twitter @Rieva, and visit her website SmallBizDaily.com to get the scoop on business trends and sign up for Rieva’s free TrendCast reports.
Which is the Right Startup Funding Option for You?
By Travis Levell
When running a startup a hurdle that most, if not all founders have to overcome is how to fund it. Raising funding is a challenging task for any founder, whether they are trying to do so from friends and family or venture capitalists. This infographic that we've designed explains the most common funding options for startups and what you need to obtain them.
In summary 5 types of funding are covered in relation to how difficult they are to obtain.
Successful Startup 101 Magazine - Volume 2, Issue 1 Page 7