by Ryan Blair
There are a number of steps for starting a business—choosing a name, business card, Web site, office space, telephone number—yes, all those things are important for launching your business. I used to obsess about these steps, but now that I’ve achieved a certain level of success and comfort with the process, I would recommend keeping these basics as simple as possible. You can always go back and improve them.
For instance, your company’s Web site: every business, no matter how small, no matter what, should have a Web site. If you do not have one, potential clients are going to think you’re not capitalized enough. The site can be as simple as one page with a logo, a short description of your business, and contact information. As long as you have something professional on the Web, people will feel secure doing business with you. The same designer whom you hired to work on your Web site may also be able to help you put together a professional-looking logo. Focus on clean lines and a limited number of colors. This makes it simpler to reproduce and gives you a color palette from which you can work when designing the rest of your materials. Think about school colors and sports teams. Two or three colors are able to establish a kind of brand recognition. Try to be consistent with these colors in your advertising, company literature, and labels.
If you can get your head around this important step, then you can start using Facebook, Twitter, and other social media to promote your business immediately. But keep track and build a database; otherwise you’ll have no idea who is interested, who is being exposed to your message, and who might be stalking your Facebook page every day just waiting for an opportunity to purchase.
What you want to avoid is thinking that you have to have a fifty-page Web site in order to start doing business. I often did that when I was insecure about the size of my company because I was competing with companies like IBM and Microsoft. I was always trying to make my company look bigger and bigger. And it worked in those times when the use of the Web was new. Someone might take a look at a fifty-page Web site and think, wow, they must be really big. I’m not saying that you can’t have a fifty-page Web site, but if your site is big, just make sure your message is very simple.
The trend has changed. Because of savvier consumers, companies are learning to leverage the art of under promotion. The goal is to be more deliberate and more meaningful. These days, strategically it’s just as much of an art not to talk about things as it is to talk about things. And there is a reason for this simplicity: we can no longer retain so much information because we are bombarded by so many sources. For instance, have you ever been in a situation where you recognized a company, but couldn’t remember where you were first introduced to it? Did you see its logo in an ad? Was it a Facebook post? Was it on Twitter? Did you see it on someone’s T-shirt at a festival? Maybe it was in that damn airplane magazine you got stuck reading because you had nothing else to do during the flight?
Today, the attention span of the end user is so short and so fragmented that you have to first determine how you’re going to get them to pay attention to you, and then in that one magic second, how you’re going to get them to remember you. Humans can remember lyrics and rhymes, catch phrases and clichés easily. Expressions such as “It is what it is” and “You gotta do what you gotta do” come to mind. We are designed to remember simple repeatable statements. Would this approach to advertising work for your company?
We are moving, as a society, toward buying products and services based on word of mouth. Instead of listening to actors pretending they are having success or enjoyment from using a product, we are buying from friends and listening to recommendations from people we trust. That’s why it’s so important to make sure your message is repeatable, because not only do your consumers have to buy your product, but they have to be able to explain and recommend your company to their friends in a way that will be easily understood and remembered.
Most action-oriented people don’t take the time to think. As you’re preparing to launch your business, my advice is that you go away for a week—pitch a tent in the backyard if you have to, but get out of the house—and critically think about how you are going to approach the marketplace. Focus on creating a single solution for a single problem in our society—in the simplest way possible. Consumers want companies to focus on a particular problem, not solve all their problems. Complex, intelligent people like us who start their own companies tend to overthink and overcommunicate our ideas when all the world really wants is a simple solution. Some of the most intelligent people I know are the ones who have learned to make complex concepts simple. If you can apply the “sum up your life in six words” approach to describing the problem your company will solve for its customers, you’re golden.
THAT’S MY STORY, AND I’M STICKING WITH IT
As I said at the start of this chapter, everyone loves an urban legend. Feel free to embrace your own.
Michael Dell built computers in his garage when he was a teenager and started a computer company in his dorm room at UT Austin; now he has an estimated net worth of $12.3 billion. Stories like his grab us because they play to the fantasy of striking out on our own and actually succeeding. Remember, of the millions who dream of doing it, very few people ever actually make that leap into entrepreneurship. Are you an ex-salesperson for IBM who was annoyed at the inefficiencies of certain software, so you invented a product to solve the problem? That’s perfect. Are you a stay-at-home mom who was struck by the lack of heirloomquality children’s clothing in your area, so you decided to launch your own boutique? Great—that makes me want to learn more about you and your company.
Keep in mind, too, that you want to make it clear what kind of industry you are in. Give your company a clear identity so its name will become synonymous with the product or service you are offering.
If you’re in a direct sales company, you would be creating a team name instead of a company name. For instance, to use an example from ViSalus, one of the distributors named their team the Generational Wealth Builders. They’ve successfully branded themselves and their team within the company.
Next, create a pitch that helps people understand exactly what your place is within the industry. For example, if you provide standardized-test tutoring for students, the big industry is education, but the specialization is test preparation. Anyone who reads your literature or checks out your Web site should know exactly who your target demographic is—in this case, college-prep students and the parents of those students.
Building off this, you should also make sure that your marketing plan clearly identifies who you are not. Commonly, one of the biggest mistakes new businesses make with their marketing is trying to reach too broadly to capture every possible facet of their industry. While it’s great to have broad vision, don’t let your company develop an identity crisis.
Use your “what we’re not” statement as a positive attribute for creating your brand image. If your business is test preparation, then try including a sentence or two that says, “Ours is a rigorous program designed for focused and intensive SAT/ACT preparation for university-bound students.” With that sentence, you are immediately making a statement that identifies your target as students and parents with serious interest and high expectations.
The other thing to consider is your own title within the organization. If you are the founder of the company, it seems logical that you would be the president or CEO. However, you may want to consider bypassing that title until your company becomes a little bit more established. The reasoning behind this is the same for using “we” as opposed to “I” in discussing your company. If you are the only person in your company for the time being, or even if you have a few other employees, a potential client or investor is going to discern very quickly that yours is a very small company; and he or she may make any number of unfair judgments about your company as a result.
Once your company has grown and established solid footing within the market, you should feel free to use whatever title you choose. But in the earliest days,
it may be advisable to print a slightly less impressive title on your business cards for the sake of creating a stronger impression.
When I launched 24/7 Tech, I chose the company’s name because I thought it conveyed a sense of our mission, which was to provide around-the-clock service. The domain name was available, so I purchased it immediately and set about designing our Web site. I did a little research to find out who owned the phone number 877-247-TECH and was able to negotiate a very cheap deal (under $100) to buy it from the owner because he was not using it. I went to a design company and had a logo created for the company.
I was incredibly proud of all of my start-up legwork, but instead of insisting on the CEO title I had earned, I wanted to be a vice president. I knew that if I, a young man, walked into someone’s office and said I was the CEO, he or she would know this was a very new and small operation before I’d even started my pitch. Many clients will be a little suspicious if the CEO sits down and talks with them at their first meeting, because that implies that the company is either just getting started and is therefore a risky gamble or that the company is desperate, which gives the other person all of the power in the negotiations.
However, by the time I’d exited 24/7 Tech and established SkyPipeline, I had a few more years on me, not to mention a lot more experience. I had a few newspaper and magazine articles to my name, and I had a reputation as an up-and-coming entrepreneur. Because of that, even though we were still a small company, I felt I could take over the CEO title without giving investors the impression that we were too small or too new to be taken seriously. In reality it was confidence that I needed.
My sales angle was different, too. I made sure that potential clients understood the positive aspect of working with the company I was heading. At some point in each sales pitch, I’d ask them, “When was the last time the CEO of AT&T, MCI, or Verizon showed up to actually talk to you about working on an account with them?” The answer was always that it never happened, because the companies were too big to operate that way.
“It’s not that they’re too big to meet with you,” I’d explain. “It’s that they are too big to provide one-on-one, personalized service.” I would give clients my cell phone number and tell them they could call me anytime. That was my first step in assuring them that instead of dealing with some big corporation that probably outsources its call center, we would provide customer service unlike anything they had ever had before.
I’m a regular on MSNBC’s Your Business, a show where they have me stand in an elevator with aspiring entrepreneurs as they pitch me their businesses—“The Elevator Pitch.” I am often very surprised at how poorly these entrepreneurs communicate their company’s product or service. My advice is that it shouldn’t sound scripted or overrehearsed, and that you should have a clear sense of how you want to present yourself, whether you’re in an elevator or out making sales calls.
The best elevator pitches get people asking questions. For example, if someone asks me what ViSalus does, I’ll say that we market the Body By Vi ninety-day weight-loss challenge, and we’ve helped hundreds of thousands of Americans lose millions of pounds. Ideally, the person then asks me how it works. And depending on how long the metaphorical elevator ride lasts, I can either continue talking or get the person’s contact information and follow up later. You never know whom you’re going to meet in an elevator.
SELL FIRST, ASK QUESTIONS LATER
My final piece of advice for starting your business is to sell first and ask questions later. In other words, if you have a product or service that is ready to go, and you have customers already lining up to purchase it, don’t delay until you have every detail spelled out. Go ahead and sell! That’s the whole point of everything else you’re working on, anyway.
What the owners of most small businesses don’t realize is that they can register as sole proprietors and start selling tomorrow. Then you can worry about opening your bank account. With every company I’ve ever started, the time that I registered it and did all my legal work was when I already had my first check in hand. At some banks, you don’t have to be incorporated to open a business account, so I always went and sold the first deal. That forced my hand to actually do all the other work.
Obviously, it’s best to have as many things in place as possible before you launch your business, but never let a deal go simply because you don’t have things in the order you want them. You can work that out as you go if you need to. Your first sales are something you need to pounce on.
If an entrepreneur showed up at my office looking for advice about how to set all the necessary pieces in place, and he said, “I’ve got one hundred orders and no idea how to legally incorporate,” he’s not just someone whom I would want to mentor, he’s someone in whom I’d want to invest! This is true for almost any kind of company—service-related companies, shops, and any small business in which the founder has nothing to lose. The possible exception would be someone like an engineer who left Microsoft and who wants to reinvent video on the Web. If it is a product that will take awhile to develop, then obviously you can’t start selling right away, although you may be able to begin taking advance orders prior to the product launch.
Not only is the “sell first, ask questions later” approach a solid one, but if you find yourself fortunate enough to be in that position, it also helps eliminate one of the most frustrating remarks that a new entrepreneur often hears: “I don’t want to be the first to buy your product. I want to be the second.” People want the confidence of knowing they are not stepping into the complete unknown when they make a purchase.
Unfortunately, not everyone is going to be lucky enough to be in such a successful position right off the bat, and you may find yourself faced with the “I want to be the second buyer” attitude. If that is the case, try to craft an answer that addresses the issue while assuaging the fear. For example, if someone asks to see your client list before you have one, you could perhaps answer like this: “Let me tell you about my past work experience and the projects I’ve worked on to really give you an idea about how my knowledge and understanding are going to maximize this project’s effectiveness for you.” That lets the potential client know he or she can trust you to do the job because of your relevant experience, and you don’t have to come right out and say, “I’ve never done this before on my own.”
You may be asked point-blank, however, if you have any other accounts lined up. If you do not, you need to be honest and tell them that this would be your company’s first sale. You can explain how this could actually work to your client’s advantage, though, by saying, “We are a new business, and we want you to be our first client. That means we are going to work twice as hard for you. I can offer you a money-back guarantee or whatever it takes to serve you because, as our first client, we’d like to leverage your testimony and help establish our reputation as the hardest-working company in the business. How does that sound to you?” People admire honesty, ambition, passion, and commitment. If you lead with that, people are going to take you seriously.
In the end, as you start your business and take those first steps, you may feel as if the odds are stacked against you. But the truth is that you can successfully navigate your way through the challenges and trials of getting established if you prepare yourself and your business with a smart, calculated marketing plan that will create a buzz around your company, your story, and you as a salesperson, without over promoting yourself. Word of mouth is far and away one of the most effective forms of advertising there is. If you win over your earliest customer with your service, integrity, and hard work, your reputation will precede you as you get deeper and deeper into the market.
Embrace the launch of your business even though it may feel like a fuse has been lit. This is what entrepreneurial urban legends are made of.
16
RAISING MONEY
I’ve raised more than $30,000,000 for my companies, and I’ve invested in many start-ups, and what I’ve learned is that no ide
a, no matter how good, and no business plan, no matter how tightly written, will ever get off the ground without funding from somewhere. In chapter 10, “Tap Those Assets,” we talked about holding on to your own assets, by using other people’s money to get your business started.
Some entrepreneurs I work with don’t want the headache of raising capital, so they choose a route that doesn’t require fund-raising. If you are one of these types, I completely understand, as it can be all consuming and counterproductive to your business goals. Regardless, securing capital for your business is the make-or-break point. If you can raise the funds you need to start out, you will have all the chance in the world at success. If you can’t, you will never get that shot. I’ve raised as little as $15,000 from an investor and as much as $15 million—and I can assure you that no matter the amount, it is all hard work.
The most important advice I can offer as we begin this discussion is that no matter the source of the money, you have to be willing to earn it. If you aren’t willing, then none of what follows in this chapter or this book will be of any use to you because you are not thinking like an entrepreneur.
No matter whom you turn to—whether family, friends, banks, or investors—no one should offer you a dime if you cannot assure them that you will go to your grave trying to earn a return for their money. And if you don’t make that promise, probably no one will invest. Keep that in mind as we outline the process, because that will necessarily color everything else that goes into securing investments.
Often, the biggest challenge is knowing where to start. What do you do when you don’t have a business—just a business plan—and you’re selling an idea rather than a product? How do you start securing those first few investments that give you the momentum to keep going and secure the next possible investor?