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Sunday, August 17, 2008

How to Research Your Business Idea

Your brilliant idea may indeed be brilliant--or it may need some work. Here's how to find out whether you're ready for startup.

By: Karen E. Spaeder | 4/18/2007

Somewhere between scribbling your idea on a cocktail napkin and actually starting a business, there's a process you need to carry out that essentially determines either your success or failure in business. Oftentimes, would-be entrepreneurs get so excited about their "epiphanies"-the moments when they imagine the possibilities of a given idea-that they forget to find out whether that idea is viable.

Of course, sometimes the idea works anyway, in spite of a lack of market research. Unfortunately, other times, the idea crashes and burns, halting a business in its tracks. We'd like to help you avoid the latter. This how to on researching your business idea is just what you need to keep your business goals on track.

The Idea Stage

For some entrepreneurs, getting the idea-and imagining the possibilities-is the easy part. It's the market research that doesn't come so naturally. "It's a big red flag when someone outlines the size of the market-multibillion dollars-but doesn't clearly articulate a plan for how the idea will meet an unmet need in the marketplace," says Aaron Keller, an adjunct professor of marketing at the University of St. Thomas in neighboring St. Paul and a managing principal of Capsule, a Minneapolis-based brand development firm.

That kind of full-throttle approach can cost you. "Entrepreneurs are often so passionate about their ideas, they can lose objectivity," adds Nancy A. Shenker, president of the ONswitch LLC, a full-service marketing firm in Westchester, New York. "Rather than taking the time to thoroughly plan and research, they sometimes plow ahead with execution, only to spend valuable dollars on unfocused or untargeted activities."

Market research, then, can prove invaluable in determining your idea's potential. You can gather information from industry associations, Web searches, periodicals, federal and state agencies, and so forth. A trip to the library or a few hours online can set you on your way to really understanding your market. Your aim is to gain a general sense of the type of customer your product or service will serve-or at least to being willing to find out through the research process. "For example," says Shenker, "if you don't know if your product will appeal to the youth market, make sure you include a sample of that population in your research efforts."

Your research plan should spell out the objectives of the research and give you the information you need to either go ahead with your idea, fine-tune it or take it back to the drawing board. Create a list of questions you need to answer in your research, and create a plan for answering them. "Utilize experts in planning and conducting research sessions," Shenker advises. "They can recommend what type of research is most appropriate, help you develop statistically valid samples and write questionnaires, and provide you with an objective and neutral source of information."

The type of information you'll be gathering depends on the type of product or service you want to sell as well as your overall research goals. You can use your research to determine a potential market, to size up the competition, or to test the usefulness and positioning of your product or service. "If, for example, the product is a tangible item, letting the target audience see and touch a prototype could be extremely valuable," notes Shenker. "For intangible products, exposing prospective customers to descriptive copy or a draft Web site could aid in developing clear communications."


When working with firms on brand development, Keller first looks at a business idea from four perspectives: company, customer, competitor and collaborator. This approach allows Keller to scrutinize a business idea before even approaching the topic of brand development. Here's what he looks at for each of the four issues:

1. Company. Think of your idea in terms of its product/service features, the benefits to customers, the personality of your company, what key messages you'll be relaying and the core promises you'll be making to customers.

2. Customer. There are three different customers you'll need to think about in relation to your idea: purchasers (those who make the decision or write the check), influencers (the individual, organization or group of people who influence the purchasing decision), and the end users (the person or group of people who will directly interact with your product or service).

3. Competitor. Again, there are three different groups you'll need to keep in mind: primary, secondary and tertiary. Their placement within each level is based on how often your business would compete with them and how you would tailor your messages when competing with each of these groups.

4. Collaborators. Think of organizations and people who may have an interest in your success but aren't directly paid or rewarded for any success your business might realize, such as associations, the media and other organizations that sell to your customers.

Another approach is to research is SWOT analysis, meaning analysis of the strengths of your industry, your product or service; the weaknesses of your product (such as design flaws) or service (such as high prices); and potential threats (such as the economy). "[SWOT] enables you to understand the strengths and flaws, [everything] from internal information such as bureaucracy, product development and cost to external factors such as foreign exchange rates, politics, culture, etc.," says Drew Stevens, a St. Louis professional speaker and consultant who works with entrepreneurs in researching and marketing their ideas. "SWOT enables an entrepreneur to quickly understand whether their product or service will make it in the current environment."

Whatever your approach to evaluating your idea, just be sure you're meeting the research objectives you've outlined for your product or service. With those goals always top-of-mind, your analysis will help you discover whether your idea has any holes that need patching.

Checking Out the Competition

Assuming your research process has helped you uncover your competition, you now need to find out what they're up to. Shenker advises becoming a customer of the competition, whether by shopping them yourself or by enlisting the help of a friend. "Visit their Web site and put yourself on their list," she says. "Talk to your competitor's customers, too-ask them what they like or don't like about your competitor's product or service. If you conduct formal research, include a question like 'Where do you currently go for that product or service? Why?'"

Your aim is to understand what your competition is doing so you can do it better. Maybe their service is poor. Maybe their product has some flaws-something you'll only know if you try it out yourself. Or maybe you've figured out a way to do things better, smarter, more cost-effectively. Find your selling point. It's going to be the core of your marketing program, if and when you're ready for that step. It's also going to be what sets you apart and lures customers your way.

Karen E. Spaeder is a freelance business writer in Southern California.

Conversations With a Teen Entrepreneur

Ben Cathers shares his tips and tactics for successfully marketing your business.

By Devlin Smith, Mar. 2004

Ben Catherswas just 12 when he started his first business, a Web marketing and advertising firm geared towards teenagers that eventually grew into two offices and 10 employees. Not ready to stop there, Cathers also launched a nationally syndicated radio show, again with teenagers as his target audience.

Now 19 and a student at the Boston University School of Management, Cathers is launching his third venture, a software company that recently raised a round of venture capital. He's also written Conversations with Teen Entrepreneurs(iUniverse Inc.), a book of discussions about business topics-from marketing to funding-with experienced teenaged businesspeople.

Because marketing in particular is such a crucial part of business success, we decided to speak with Cathers about it, focusing on some of the common mistakes teen entrepreneurs make in order to learn the essentials of successful marketing. Is there one main marketing mistake you see teen entrepreneurs making over and over?

Ben Cathers: The main thing I see is, [entrepreneurs] just not knowing who their customers are, not knowing who they're marketing to, not knowing what they want. Sometimes entrepreneurs take the cheapest route possible thinking, "Marketing is marketing," but I've seen a lot of people who have skimped on their marketing budgets and have had just absolutely no results [compared to] the people who put a little extra out. You can buy ads online, just a general ad that will appear on any site that's not that expensive, and think, "I'm marketing, I'm advertising. Obviously, I'm doing well." But if you do that, you don't know who your customers are-you're just doing blind ads.

If you don't know who your customers are, if you don't know how you're going to market to them or what they want, then there's absolutely no way to reach them. I had somebody on my radio show advertise once. He was representing an eye care company, and he bought the ad because we offered him a good package, but he didn't get any sales, and he complained to us and I said, "Look, you knew that all the people listening to the show were teenagers. You marketed a product toward 45-year-olds-there's obviously not going to be a connection." Mistakes like that are what really hurt people in marketing. How can teen entrepreneurs figure out who their marketing should target?

Cathers: They should first develop a marketing plan-they should really research who their customers are and see what they're doing. If they're targeting teenagers, they have an advantage because they know how they get their information: They know that teenagers don't really click on online ads, that they look more at magazines, that they like getting fliers handed out to them.

If they're marketing to adults, they need to do some research. For example, if they're marketing to 25- to 30-year-olds, [they need to determine how] they'd rather get their messages: Would they rather get them through a magazine, through TV, through radio? They need to research that target market first to understand what influences them-is it word of mouth, should you start a guerilla marketing campaign where you have people telling them what to do, should you do a push campaign or a pull campaign. If you don't research your target market and you don't know how you [should be] marketing, the probability of it working is low. Do you think it's easier for teen entrepreneurs to go after customers their own age?

Cathers: That was one of my advantages when I ran my Internet company because I targeted teenagers. It was very easy, because all I ever thought about was, "This is how I get my information." When you start a business, there are hundreds of people begging you to buy ads from them, and I knew that I would never get a response from some of the [companies] who contacted me-I knew those weren't going to work for my customers because it wouldn't work for me. Sometimes, though, experts warn against basing your strategies too much on yourself. Do you think that may be a problem, if entrepreneurs take for granted that, "I do everything this way, so all 16-year-olds must be like me"?

Cathers: You can't just rely on one source. If you market to teenagers and you're marketing based on yourself, your research is based on just one person and that won't work because the teenage demographic is very big and very different and very diverse. You have to base your research on a larger target group. If you base your marketing research on just one person, no matter who that is, that's a bad strategy. Most teenage entrepreneurs don't have a lot of start-up funds, so what would you suggest as free or inexpensive ways to do market research?

Cathers: Most of the research is available online for free. If you do a Google search for market research, you'll find that most of these sites have basic demographic information available for free, and that demographic information alone is helpful. If you have an idea-for example, that you want to target people in their early 20s-you find a magazine that you know is read by 20-somethings, then go to their rate card or media kit. Those companies have already done all the research you need, and you can use their research to help you plan your strategies as well. Most of what you need is available for free or at a very, very low cost, and if you put the effort into it and you search around, you'll definitely be able to find it. If somebody did have the funds available, would you suggest they use a third party or consultants to help with their market research and campaign?

Cathers: It really depends. If it's going to be a large-scale marketing campaign and you've dedicated a large portion of your funds to marketing, [using an outside source] is going to give you the most accurate results. If you get someone who really knows statistics and really knows marketing well and they can do some kind of market analysis for you, that would be fantastic.

But if you could also get it cheaper and put those funds into something else, that's also very efficient. I just actually raised a large amount of financing [recently] for a company I've started, and I can tell you we've dedicated almost nothing to marketing because we know we can do most of the marketing at very low costs. We're developing a software company, so if we do that, we can divert more funds into the software itself and help the main business.

If you're targeting a very different or very hard-to-reach group and there's not a lot of information available, like if you get very specific and you're looking strictly for teenagers aged 16 to 18 who don't drink and don't smoke and live on the East Coast, then obviously that's when you might have to look at paying for [market research]. How do you determine how much money and time you should put into your marketing?

Cathers: When you write your business plan or your plan of action or your strategy, that's one of the things you're going to have to look into-you're going to have to do some research on the costs. If you contact a market research company, they can give you an estimate or you can ask around to find out what the average prices are. It really depends on what kind of business you have-some marketing is 1 percent of the budget because marketing isn't that important. But if you're a consumer company that's just released a new product, you're probably going to have to dedicate 40 or 50 percent of your budget to marketing.

I can't just say you should be 10 percent in because 10 percent for one business might not be enough for another business. If you know you have to reach massive amounts of people to be able to make a profit, then obviously put more into marketing. In your book, you focused quite a bit on Internet marketing. Do you think that's the most effective way for teenager entrepreneurs to market their businesses?

Cathers: For teenagers, absolutely, because the reason why Internet marketing works so well is that you don't have to spend much money and you pay only for results. Focusing on search engine marketing, which is basically paying for positions in a search engine, is probably one of the best ways you can go because when people use a search engine, they're specifically looking for your product. If somebody types in "video games," they're obviously looking for video games, and then if you have a video game sponsor, you can broadcast your message on video games only to the people who are looking for video games. From there, you only pay when somebody actually comes to your site and does business with you. It really minimizes your risk because if you buy an ad in a magazine, there are no guarantees; if you buy an ad on TV, there are no guarantees. But if you buy an ad on a search engine, you're getting a guarantee that someone's going to visit your site. Then it's up to you to make the sale or not. If you find you have a lot of people coming to your site and you can't make a sale, there's something wrong on your end and you'll have to do research to find out why aren't people buying. For teen entrepreneurs with a Web site for their brick-and-mortar business, is Internet marketing effective for them as well?

Cathers: This is where research is really important, because you can find out how many people search for that product online. Let's say you're selling baseballs and you only sell those baseballs in your store. If you find out people are searching for information about baseballs and that [keyword is] searched 20,000 times a month, then Internet marketing is still going to work for you because there are 20,000 people searching for information on baseballs.

It still works because it's still very cheap: You can start Internet marketing for as low as $50-most entrepreneurs have an advertising budget of $50. It's also effective, and at least then you're exposing your product to people who have an interest in your product. If you go and buy an ad in ESPN magazine, readers might not be interested in your baseball products. At least with the Internet, you're guaranteed you're going to have somewhat of a match. This is the cheapest way to get somewhat of a guarantee of results.

Proven Ways to Expand Your Business

These entrepreneurs found a variety of approaches to successful growth.
By: Eve Gumpel

You've worked hard to create a successful business, and now you're ready to take it to another level. There are plenty of ways to expand; you just have to decide which method is right for you.

To help you work through the problem, we shed light on several entrepreneurs who found ways to grow their businesses and boost their profits.

1. Merge with or acquire another business. When Jayne Hancock Group acquired 14-year-old Townsend Inc. in July 2007, it was simply the next logical step in a 2-year-old relationship.

The two agencies had been working under the same roof for two-and-a-half years. Jayne Hancock's firm was a fast-growing marketing group specializing in media, sports and technology, while Jackie Townsend's was a leading technology PR firm focused on branding and PR.

"It was almost like a no-brainer. It was almost like, we can't do this and not come together," Hancock says.

The company that emerged out of the acquisition, JHG-Townsend, helps companies create their branding and messaging, then helps them apply it in traditional and new media markets.

Hancock and Townsend decided against a co-CEO setup for the new company.

"You don't want any cloudiness about the structure and who's going to make the decisions," Townsend said. So Hancock took the top position, and Townsend became executive vice president.

Both say the merger thus far has been terrific. "Everybody's starting to feel and see an energy that we all visualized by doing this," Hancock says. JHG projects $8 million in earnings for 2008.

If you're considering an acquisition, Townsend says you should get to know your potential partner well before committing to a relationship.

"Know what it's going to be like to work things out in the tough times," she says. "If you know you can get through the difficult conversations you need to have, then you know you can get through a partnership." Such conversations, Hancock says, involve strategic or operational decisions, ranging from investing in new systems to opening a new office, bringing in a new hire or making an acquisition.

2. Spin off new profit centers. Jocelyn Silverman started 304 Media, a boutique advertising agency, six-and-a-half years ago. Since then, she's branched out with two more companies: Short Run Cards and Creative-Juice. Short Run Cards can produce small runs of plastic, personalized VIP cards in only two days. The cards are used for loyalty programs that offer discounts or points to cardholders. Creative-Juice offers creative outsourcing solutions that produce design services for larger advertising and PR agencies.

Short Run Cards came about after 304 Media ordered its own set of VIP cards.

"No one could do the turnaround on the cards," Silverman, 28, says. So, like many an entrepreneur, Silverman decided to do it herself. She purchased equipment, and leverages her employees' free time to design the cards and print them in-house. Now 2-and-a-half years old, Short Run Cards made a small profit its first year and has gained traction each year.

Creative-Juice was born out of necessity in March 2007, to make up for the loss of a client that provided 30 percent of 304 Media's business. The gamble is working well.

"Every month has been better than the last month," Silverman says. The three companies combined grossed nearly $400,000 last year, and Silverman anticipates a 40 percent increase in 2008.

With the success of her spinoff businesses, Silverman will launch another related business,, this month. It will produce birth announcement magnets online. It's the ultimate example of leveraging resources, Silverman says, because all of the design and programming are already complete and the website is completely automated. In fact, Silverman expects StorkMagnets to quickly become her primary source of revenue.

"We have received incredible feedback through our initial testing and have several people anxious to place orders," she says.

3. Use subcontractors. Kris Putnam-Walkerly founded Putnam Community Investment Consulting in 1999 to help foundations and other nonprofits develop effective grant-making programs and initiatives. She has a full-time office manager and an executive assistant but relies on subcontractors to provide the consulting expertise needed on various projects.

"It's an effective way to bring on people for a short period of time," she says. It gives her a wide pool of experts. It also allowed her to grow the business while raising children "and not grow into a crazy person," she says.

All subcontractors use an e-mail address linked to Putnam and also rely on Putnam's 800 number to make the organization look seamless.

4. Open a second, virtual office. Putnam achieved a new level of growth in 2007, when Putnam-Walkerly moved from Oakland to Ohio to join her fiancé. She opened a virtual office in San Francisco in place of her Oakland office and announced that Putnam was expanding nationally to serve clients better.

"It didn't hurt my California business at all," she says. In fact, Putnam-Walkerly says, she grossed $800,000 in 2007, twice the amount amassed the previous year. She hopes to exceed $1 million this year.

The virtual office in San Francisco keeps expenses down. The rental company provides a phone number and a receptionist, plus office space and equipment that Putnam-Walkerly can use when she's visiting California.

5. Launch a new division. Kristen Marie Schuerlein is founder and CEO of Affirmagy, which sells cuddly blankets with inspirational messages. Affirmagy, which launched on Valentine's Day 2005, sells direct to consumers through its website and also wholesales the blankets to independent retail shops, including church bookstores.

After a couple of churches used the blankets as profitable youth group fundraisers, word started to spread. Shortly thereafter, Schuerlein realized that 60 percent of her wholesale sales could be attributed to church fundraisers.

"My business partner and I looked at each other and said, 'Wouldn't it be extraordinary if we built a turnkey way to be in service to this community of people and grow our business through fundraising?' "

That idea led to Positively Fundraising, launched as a separate division in March 2008.

"It's an effortless way to encourage and take advantage of the natural buzz and word-of-mouth that was taking place with our product," Schuerlein says.

It's also in alignment with Affirmagy's core philosophy of service to others.

"From my perspective, it's a really cool way to grow my company. It feels right," Schuerlein says.

Saturday, June 28, 2008

Room for Hire: A Bed and Breakfast Business

June 8, 2008, By Syndicated Columnist Cathy Harris

So often in the past, I have spoken to people who had a home in foreclosure. They often made the statement “if I had only taken in a border.”

This is definitely an option for people who can’t afford their mortgage notes and have extra rooms or a basement at their homes.

The biggest dilemma about taking in a border is that no one wants to take in anyone who has children, since children are often destructive to properties. But for many, it’s been a very big mistake!

Now due to this continuous failing economy and administration, it’s time to be strategic and your number one goal should be to keep a roof over your head. If you have food on the table, and you are in fairly good health and have a roof over your head, then you need to count your blessings everyday.

Do you have an extra room or two or a basement that you could rent out? If you do, then you can be in the Bed and Breakfast (B&B) business.

In these times, in order to keep their heads above water, many families are building extra rooms on their homes to offer to paying family members or tenants.

You can turn your home into a Bed and Breakfast business or restore a building that has the potential of being rental units. You might have to reside at the property, managing and maintaining the business and satisfying license requirements.

For people with rentals (condos, houses, etc.) that they can’t sell, you can turn them into a Bed and Breakfast business for short term or long term lodging.

Remember this is your B&B and you might just want to look into long term lodging options such as boarding for 30, 60, 90 days or even 6 months or longer.

For short term lodging options, you will need to decide if you are going to accept one night stays on Friday and Saturday night or should you wait to try to get a 2 night booking for your rooms every weekend.

Remember the weekdays might be emptier than the weekends but you need to consider your market before adopting this sort of strategy. For example, if you’re next to a wedding venue, you may need to be more flexible about one night stays as these guests tend to only want to come for one night.
When you first set up your B&B, you may want to test the waters and see what sort of guests you get before you make a decision about whether to exclude, for example, children. Running the B&B should not adversely affect your business if you except children under 12.

Can you or should you risk turning anyone away? Remember you can always put new terms and conditions in place. After all you are the boss!

If you're right next to the best children's theme park in the country, you will probably benefit from having a children friendly B&B.

It may actually improve your bookings if you have a ‘no children policy’ for many parents staying for a romantic break that have left their own kids at home. If people have gone to the effort of finding a babysitter for a childfree weekend, they will probably not want to be faced by someone else's 5 year old over breakfast.

Creating a home away from home which is often more beautiful than where they are traveling from will ensure many return customers.

This is a great business you can start without too much hassle. If you live near a college town, a tourist attraction, the beach, a lake, a mountain for skiing, etc., it makes your B&B much easier to market. Peak and off-season will have a significant impact on your monthly earnings.

Similar to tourists who choose to stay in traditional hotels, customers who patronize B&Bs seek out relaxation, fun and stress management while on vacation.

The B&B industry offers a unique lodging environment, which caters to an ever-increasing group of travelers. They create a climate of home, where guests become temporary members of a larger family.

In a B&B, a guest is a guest in one's home, not a customer. It becomes a place to return to at the end of a day, or during the next vacation (like going home). This type of customer also prefers comfortable accommodations in a cozy, family environment. These patrons are more social, they love meeting new people while at the same time require enough privacy to enjoy their vacation.

Guests will have the right mix of membership and privacy. The goal is to be dutiful without being intrusive which can be a delicate balance and one that owners have mastered in their various walks of life.

A B&B opens itself to guests, allowing them to participate and share in the richness of a community, while still allowing whatever degree of privacy is preferred.

A variety of settings available in the B&B are situated to enable individuals or small groups to locate the perfect setting for whatever mood or activity one is pursuing (reading, watching television, playing board games, etc.).

You could eventually expand your services to the residents by offering adjourning rooms which open creating a large area, ideal for formal or informal gatherings (i.e. wedding receptions, office parties, Christmas parties, etc.).

You don’t have to serve a huge breakfast. In fact, a bowl of cereal with coffee and some juice is acceptable. Meals can be shared with the innkeepers and other travelers allowing new relationships to be created and old ones enriched. Or, meals can be taken in the privacy of the guest's room.

You don’t necessarily have to provide a private bath, but it is a nice touch.

B&B tenants every need should be met to ensure his/her comfort. For special occasions, catered meals, chilled wine, etc., can be provided for an additional stipend. During the weekends, guests can return to the B&B in the evening and find cheese, fruit, and wine for snacking before turning in.

Some other items you could offer your guests are a complimentary music CD for each room that the guest may keep (copy included in packet): 1) An extensive video and audio library for guest use, 2) CD stereo systems and VCRs in each room, 3) Starbucks coffee, 4) A variety of herbal teas, 5) Daily fresh-baked muffins and fresh fruit, and 6) Links to other businesses, attractions and services in the area.

If you are considering this idea, you should call your insurance company and ask them to review your policy. Should you beef up your liability coverage?
Do tenants need to sign contracts for long term lodging? Should you hire a private investigator to run a background on your guests? Should you check credit references?

Remember you are going to be the one setting up the rules so first of all you have to make sure you are not breaking the law and, secondly, how the rules you set will affect your business.

You need to check into legislation to ensure you and your tourism business stay on the right side of the law. For example, you need to ensure that the rules you set do not break any discrimination laws by not allowing people on grounds of race, sex, sexual orientation or disability to stay at your B&B. And you also need to be careful that you aren't discriminating against people.

You also need to consider how the rules you set will affect your business. Some of the things you need to think about is will you be flexible allowing children, assistance dogs, one night stays, cooking evening meals, etc.

In order to be successful in a B&B, you can offer packages and special rates. You need to build a strong market position among the local patrons. With the right exposure, it is probably an untapped market of vacationers that can be enticed to your B&B.

B&B can sell its rooms directly to repeat customers, as well as via traditional travel agents and through the internet. Repeat customers will have the privilege of priority reservations during the high season. Subscriptions to various web services will provide international exposure to potential customers for annual fees.

You can find out more about how to set up, run and market a B&B by reading books at the libraries and bookstores, conducting research at or and networking and talking to business owners who actually run a B&B.

Cathy Harris is a Motivational Speaker,, and is available for seminars, workshops and consultations. She is also the author of a 3-part empowerment book series “How To Take Control of Your Own Life” ( and can be reached through her company at Angels Press, P.O. Box 870849, Stone Mountain, GA 30087, Phone: (770) 873-2072, Toll Free (800) 797-8663, Fax: (678) 254-5018, Website: and Email:

Tuesday, May 20, 2008

The Essentials of Guerrilla Marketing

Implement these building blocks to create a successful campaign.

By Jay Conrad Levinson | April 30, 2008

As marketing continues to change, the secrets of guerrilla marketing continue to change. There are 18 guerilla marketing secrets, and they guarantee you will exceed your most optimistic projections.

Memorize these words, then live by them. I'm giving you a memory crutch so that you'll never forget these major guerrilla marketing secrets. All these words end in "-ent." Run your business by the guerrilla concepts they represent and reap the rewards.


You should know that a mediocre marketing program with commitment will always prove more profitable than a brilliant marketing program without commitment. Commitment makes it happen.


Marketing is not an expense, but an investment--the best investment available in business if you do it right. With the 18 secrets of guerrilla marketing to guide you, you'll be doing it right.


It takes awhile for prospects to trust you. If you change your marketing, media and identity, you're hard to trust. Restraint and repetition are two great allies of the guerrilla.


In a nationwide test to determine why people buy, price came in fifth, selection fourth, service third, quality second, and, in first place, people said they patronize businesses in which they have confidence.


Unless the person running your marketing is patient, it will be difficult to practice commitment, view marketing as an investment, be consistent, and make prospects confident. Patience is a guerrilla virtue.


Guerrillas know that individual marketing weapons rarely work on their own, but marketing combinations do work. A wide assortment of marketing tools is required to woo and win customers.


People know that time is not money--it's far more valuable than money. Respect this by being easy to do business with and running your company for the convenience of your customers, not yourself.


The real profits come after you've made the sale, in the form of repeat and referral business. Non-guerrillas think marketing ends when they've made the sale. Guerrillas know that's when marketing begins.


There are elements of your business that you take for granted, but prospects would be amazed if they knew the details. Be sure your marketing reflects that amazement.


You can potentially double your profits by measuring the results of your marketing. Some weapons hit bull's-eyes. Others miss the target. Unless you measure, you won't know which is which.


This describes the relationship between you and your customers--and it is a relationship. You prove your involvement by following up; they prove theirs by patronizing and recommending you.


The guerrilla's job is not to compete but to cooperate with other businesses. Market them in return for them marketing you. Set up tie-ins with others. Become dependent to market more and invest less.


Armament is defined as "the equipment necessary to wage and win battles." The armament of guerrillas is technology: computers, current software, cell phones, pagers, fax machines. If you're technophobic, see a techno-shrink.


In an era of non-stop interruption marketing, the key to success is first to gain consent for your marketing materials and market only to those who have given you that consent.


To succeed online, augment your website with offline and online promotion along with constant maintenance of your site.


Don’t believe that old adage, "Sell the sizzle, not the steak." Sophisticated consumers these days know the sizzle from the steak and prefer the steak every time. Your substance, not your style, will carry the day for you.


It’s not enough for you to know these 18 secrets. The key is to take action on them, all of them.


Be certain that all your marketing is saying the same thing and pulling in the same direction. Don’t undermine what you do with marketing that marches to the beat of a different strategist.

These concepts are the reason many startup guerrillas now run highly successful companies. They are the cornerstone of guerrilla marketing. They might look like just words, but each one is nuclear-powered and capable of propelling you into the land of your dreams.

Jay Conrad Levinson is the author of the Guerrilla Marketing series of books.

More minorities going it alone- Self-employment gains favor


A growing number of black, Indian, Hispanic and women baby boomers are walking away from corporate jobs and taking their skills, experience and pay to launch new businesses.

The most recent data from the U.S. Census Bureau show the total number of black-owned businesses, for example, totaled 6,941 in 2002 in the Cincinnati metropolitan statistical area, up nearly 47 percent from 1997.

During the same time, the number of women-owned firms rose about 28 percent, to 40,008, while Hispanic-owned firms jumped 65 percent, to 1,238. Butler County in Ohio, Bracken County in Kentucky, and Franklin County in Indiana were added to the 2002 data.

Moreover, the percentage of self-employed people between ages 55 and 65 climbed 33 percent last year from 2006, according to the U.S. Bureau of Labor Statistics.

There are now at least 3 million entrepreneurs 55 and older, up one-third from 2000, according to the labor bureau.

"The number of baby boomers starting their own businesses is surging," says Kathy Keller, a spokeswoman for the advocacy group AARP Ohio.

As more companies are downsizing and outsourcing jobs, more veteran minority professionals are choosing self-employment as an option to generate income, says Rea Waldon, senior vice president of the Urban League of Greater Cincinnati's Economic Empowerment Center.

She said many baby boomers are taking severance packages and using them to start their own businesses, or are investing in other businesses as silent partners.

"Some of these baby boomers might also start their own businesses because of their age and changing personal values," Waldon said.

Majid Dosani, owner of ACE Products LLC, started his company in 2001 in his basement while working as an engineer for a local environmental engineering firm.

ACE Products is a Blue Ash-based office-supply company that sells more than 50,000 items, including office and printing supplies and business machines.

Dosani landed a contract in 2003 to provide office supplies to Cincinnati Public Schools as part of its supplier diversity program. He invested between $5,000 and $10,000 to open his Blue Ash location that year and left his corporate job in 2004 after 17 years.

Dosani, 50, says changing his lifestyle to run the business was among his biggest challenges.

Though he had to learn the office-supply business quickly, Dosani says the challenge of doing something different has made the gamble worth it. His store is expected to post sales of over $1.5 million this year, up from about $1 million last year, he said.

But like other baby boomers, Dosani has no plans to retire soon, though his income is higher now than when he had a corporate job.

He plans to stay in business until he can put his children - ages 17, 14 and 11 - through college.

"It will be at least another 10 years before I retire, but the good thing is I'm enjoying what I do," Dosani says.

Brenda J. England, owner of England's Elegant Attire, initially opened the business in 1996 and operated it part time while working as an associate engineer at Procter & Gamble Co.

She left P&G in 2000 after 25 years to expand her business.

England's business has grown from being a formal-wear consignment shop in North College Hill to a bridal and formal-wear business in Northgate Mall in Colerain Township.

Her current store is 3,900 square feet - about twice as big as her previous store - and it offers many more services, she said.

England, 58, says her time at P&G gave her the income, multi-tasking ability and people skills to run her own business.

She estimates she has invested about $20,000 of her own money into the business.

"The corporate experience gave me the assertiveness I needed to be an entrepreneur," England says.

While more minorities are becoming entrepreneurs, they still face barriers and challenges as new businesses owners, the Urban League's Waldon says.

She listed access to capital, being able to land projects, and failure to solicit managerial support and resources outside of the businesses among the biggest challenges.

"Those are real challenges for many minority entrepreneurs because they are cornerstones for growing your business," she says.

Outsourcing to Grow Your Home Business

Getting over the do-it-yourself syndrome by delegating to others reveals a higher level of potential for you and your company.

By Lesley Spencer Pyle | May 13, 2008

Most people go into business desiring success and better balance in their lives. Spending endless hours commuting and dealing with corporate politics isn't exactly the American Dream. But when starting a new business, juggling the demands of business and personal obligations can sometimes be just as exhausting.

The thought of hiring and managing people may make you weak in the knees, but building a staff isn't the only option. Consider outsourcing your needs to a specialized group or individual. That way you can hire as needed without having to worry about hiring, firing, payroll taxes, etc.

The hardest part of outsourcing is giving up the reins on your "baby." The easiest way to start comfortably delegating to others is to make a list of all of the tasks you do on a daily, weekly and monthly basis. Of those items, determine what you don't like to do and what's taking up the majority of your time.

Among the options available to contract help on an hourly, project or set-fee basis are:


Professional writers can create content for your website, blogs, press releases, e-mails and marketing materials. They can also ghostwrite for you. For example, Lisa Otto from focuses on small businesses and offers affordable rates to give a small business a professional image.


Your customers' first contact with your company is vital. Hire an individual or firm that can take your company calls. This can set you apart because:
a. Your company appears larger than the one-person show you are operating.
b. Your calls are answered by a professional vs. an answering machine.


As a one-person show, you can only touch so many potential customers. By contracting with a sales representative, you can take advantage of their experience as well as their extensive list of contacts. And if you're paying on a commission basis, you'll be saving while bringing in additional money.

Graphic Designers

Whether you've already idealized your logo or not, a graphic designer can assist in leaving a memorable impression of your company by creating powerful logos, websites and other marketing materials.

Fulfillment Centers

If you're pole vaulting over piles of business materials and products in your own kitchen or frantically hiding things under your bed when you have company you may need the help of a fulfillment center, like Trending Solutions. These places make sure your customers won't call you looking for their order because it took you four days to ship it.


A marketing guru can get your press releases and announcements in the right hands of the media. They can get your foot in the door so you can follow up and nail the sale. They'll also assist with creative approaches to get the word out about your company.

Virtual Assistant

A VA can be a lifesaver when it comes to handling communications with your customers, doing your accounting, invoicing your customers and any administrative tasks you may find yourself putting aside.

You don't need to be a hero by showing that you can do it all. You may just find, like so many of us, that outsourcing enables you to focus on what you do best and grow your business and income. By delegating day-to-day tasks, you can run your business and maintain your personal life.

Outsourcing provides you with more flexibility as your company grows. There are so many options available and many resources on the internet to help you find the perfect candidate.

Lesley Spencer Pyle is the founder and president of the Inc. Network.

Wednesday, March 19, 2008

Getting Your Startup Paperwork in Order

Entrepreneurs aren't known for being lazy, but most entrepreneurs I know are notoriously lazy about doing legal paperwork. But there's no place for laziness when it comes to getting licenses and permits for your business. It might seem like an insignificant detail or a waste of money, but it's necessary. This article provides some information on the types of licenses and permits that small businesses need and how to go about getting them cost-effectively.

The majority of small businesses in operation today are required to have one or more permits to ensure that they meet government-mandated guidelines for safety, soundness and tax. Generally, there are licenses and permits that you need to be aware of on the federal, state and local levels.

Federal Registrations and Licenses

Small businesses typically don't have to worry about safety and soundness licenses on the federal level, but every business should be aware of federal tax registrations. The first tax registration is the application for an Employer Identification Number. This is done on Form SS-4, found on the IRS's website, and should be filed by every business. If you're a sole proprietorship, you can use your social security number instead of getting an Employer Identification Number; however, this is not advisable if you want to keep your personal and business affairs separate. If you like the idea of separating business and personal but are concerned about the impact this separation will have on your taxes, consider incorporating as an S corporation, which will allow you to flow certain business losses to your personal income. You can learn more about how to register as an S corporation and how this varies from other forms of incorporation here. If you decide to register as an S corporation, you'll need to file Form 2553with the IRS.

State Registrations and Licenses

Besides the licensing of professional occupations such as doctors and lawyers, many states require licenses for people such as hairdressers, mechanics, private investigators, real estate agents, tax preparers and more. Since the list changes across the different states, you'll need to check with the state you live in to find out the specific requirements. If you have the funds to consult with an attorney, this is the safest course of action. The least expensive way to get this information is to check with your local SCOREchapter or local SBDC, since the individuals who work in these offices will have guidebooks on licensing for your state. For example, the Pioneer Institutehas produced a detailed guidebookon licensing procedures and regulations for small-business owners in Boston. It's useful to read through this free guidebook to get a sense of the types of regulations and permits you might need, particularly if you're starting one of the following types of businesses: day-care center, barber shop, beauty salon, caterer, cleaning service, sewing shop, shoe repair, flower shop, livery, small grocery store, street vendor or TV repair shop.

Some permits are registered under the name of the business, while others, such as permits for hairdressers or accountants, place obligations on the individual entrepreneur to register in his or her name. Generally, permits for the individual are needed for occupations and trades that require specific skills, examinations or ethical guidelines that are linked to the individual providing the services-such as standardized testing for accountants or proof of training for doctors. Keep in mind that both individual and business licenses expire and may require retesting before renewal is allowed.

State tax registration is another issue you'll have to make arrangements for, unless you live in one of the few states that don't assess income taxes. Otherwise, you'll need to register under your state's income tax laws. Check the website for your state's Treasury Department or Department of Revenue for details and forms for doing this.

If your business needs employees, your state's Labor Department can grant you the appropriate registration as an employer. Generally, if you use a payroll company to process checks to employees, this registration is provided. Even if you do your own payroll, once you file a tax return, your state's Labor Department will usually send you a form.

Local Licenses and Permits

Although usually not a huge concern, local taxes can be thorns in your side when you're trying to start a company, particularly if you don't address them right away. The city or town may leverage property taxes on the equipment and other assets that your business owns. Some cities charge taxes on inventory, gross receipts and income. Be careful about avoiding these taxes by claiming ignorance. You may be liable for back taxes.

In addition to the Department of Revenue, there are other departments on a local level that grant licenses, including:

- The Health Department: If your business is a restaurant, catering service or other establishment that provides food preparation or sales, you'll need to be licensed through your local Health Department.

- The police or fire department: If your business attracts large amounts of people, you may need to obtain a license from the local police or fire department.

-The building and safety department: Renovation of any kind almost always requires a permit that states you're complying with local building ordinances and codes.

There's no doubt it's cumbersome to track down all the relevant licenses and permits you may need for your business. Despite my advice, I know that most of the entrepreneurs reading this column will sidestep the licensing process and consciously take on the risk of having to pay back taxes or penalty fees for noncompliance. I suppose that's better than ignoring licensing because of laziness.

Asheesh Advani is president ofCircleLending, a loan administration company that facilitates personal loans, small-business loans, and mortgages. He and his company have written theSmall Business Financing Guidefor startups and have helped small businesses in more than 30 states launch and finance their growth.

The opinions expressed in this column are those of the author, not of

Raising Funds For Your Invention

Fund raising is an important step in the invention process, and one that should not be taken lightly. Accepting money from outsiders often comes with strings attached. Therefore, it is important to A) decide the absolute lowest amount of money you can work with, and B) take not a penny more.

That said, there are several potential funding sources that are worth discussing. We will begin with the most glamorized (and also least understood) source: venture capital.

A venture capitalist is someone who invests large sums of money (usually $500,000-$2,000,000 at a time) into a business in exchange for a significant equity stake. In effect, they are "buying" a piece of the company. Venture capital often seems like a very attractive financing option because, entrepreneurs reason, "with all that money, how can we go wrong?" However, there is more to a venture capital investment than the dollar figures involved. Many of them are extremely controlling and insist upon inserting their own personell into the company. Take this quote from a 2002 Wall Street Journal article, written by Barnaby Federer:

"If you ask a VC what value they add, and you get them after a few drinks, they'll say, 'We replace the CEO' ", he said. And that, he indicated, does not vary with the economic climate.

Clearly, this is something to be mindful of when seeking VC funding. Still, there are definitely situations where VC funding makes sense and is beneficial to use. If your invention is very capital-intensive, for example, there is often no other way. Many venture capitalists also have invaluable industry connections that will make your life easier. Still others (like Y Combinator) reject the typical controlling mindset and more or less let the founders man the controls. So how can you increase your chances of getting funding from them? In a word: cash flow. If you do not have cash flow from your business already, you want to demonstrate, as concretely as possible, how you will get it and get it soon. To a VC, cash flow is king: it separates dreamers from doers. Therefore, this is what you want to emphasize in your business plan. The more clearly you can illustrate how their investment will lead to significant profits, the more likely you are to get funding. You should also only target venture capitalists in your sector. No matter how great your pitch is, it wont get funding if the investor in question does not work in that field.

The following website is an excellent resource for anyone seeking venture capital. It explains what it truly takes to get funding, drawing on first-hand accounts from real founders who have already done it. Additionally, it is a splendid refutation of the many "layman's myths" people have about venture capital. This, in turn, will make you smarter about what venture capitalists look for and find important. SRC:

Another (less stressful) way to raise funds for your invention is to get an angel investor on the team. An angel investor is a private individual who makes smaller investments (typically $150,000-$1.5 million) to new businesses. They are often a bridge between self-funded stage of the business to the point where your funding needs reach the level a venture capitalist would offer. In addition, angels also provide expertise and industry contacts to help you along. One major advantage of using angels over venture capitalists is angels, generally, take more of a hands-off posture. They will provide money and guidance, but for the most part let you run the business as you see fit.

If angel investors are something you would like to look into, there are directories of them available for free online. This one, from, is segmented by geographic locations so you can find angels in your own area.

The other way to raise money is as old as money itself: getting it from friends and family. While this is often the easiest method, it should not be done on a whim. You should only accept money from friends and relatives if they fully understand and accept the risks, as well as the rewards. New business ventures are far from a sure bet, and it would be dishonest to take money from people who think they are. It could also lead to lawsuits if the business tanks and the friend in question feels cheated. As long as these issues are addressed, however, friends and family are a terrific source of funding for new inventions. The best way to make it happen is to promise them a certain percentage of future profits. The more they give you, the higher the percentage. This way, they can feel that their investment has purchased a tangible claim on future returns.

Of course, which funding option you pursue depends largely on your needs. If you only need a few thousand dollars or so to get started, it would be foolish to seek venture capital funding. By the sake token, if you need to open a factory, there may be no other way. The best approach is to think long and hard about your financial needs and let that determine how you raise money.

Eric Corl is the Founder and CEO of Idea Buyer, a marketplace for new technology and products that allows inventors to showcase their intellectual property to consumer product companies, entrepreneurs, retailers, and manufacturers at You can email him at

Small Business Loans - Get Wings For Your Creative Ventures

Innovation is the name of the game when it comes to the commercial field. Setting up a business and being successful requires conviction in oneself. If you too have some innovative idea that you want to give shape to but are lacking the finance, you can take up small business loans to assist you in your feat.

The borrowers who are interest in setting up a new venture may like to put their idea into practice without putting any of their assets into risk. So for this, these loans seem to be the perfect idea. Since these loans involve small amounts, there is no requirement for the borrowers to pledge any assets with the lenders. This would mean a completely no risk situation for the borrower and thereby be very suitable.

Through these loans, the borrowers can take up money for any purposes that arise in the business of the borrowers. any needs like payment of labor, packaging of finished goods, getting raw materials, purchase of new machines etc can all be fulfilled with the money that is borrowed through these loans.

The borrowers while taking up these loans should rather research well for the lenders of these loans. It is very important to determine the reputation of the lender as there should be no problem in the way of the business of the borrower. Also, this research can help the borrower in getting lower rate deals as there are numerous lenders in the market who are ready to lower their rates.

The borrowers with adverse credit can also take up these loans for their needs easily. The rates that are charged for them on the borrowed money are higher than usual but it is still worth taking up the loans as there is a great chance to restore your good credit by timely repayment. Moreover low rate deals can be researched for easily through the online mode.

With small business loans, the borrowers can get money for their plans and aspirations easily. No collateral is required for the money and bad credit is also not an obstruction.

Michael T. Brian is the author of this article. He is Masters in Business Administration and expert in finance. He writes about various finance related topics.

How To Finance New Business Equipment

Every business requires equipment at some point. Your business may need computers, vehicles, manufacturing machines, factory equipment and is entirely dependent on the type of business you are running.

Imagine the business equipment needs of a simple business like a coffee shop, for example. You'll need to acquire, in addition to business premises, one or more good quality coffee makers or espresso machines, tables and chairs for your customers, refrigeration units, storage units, a dishwasher and mugs and serving ware. That's quite a list, and quite an outlay for a new business - all before you open your doors. There are, however, a number of different ways that you can acquire equipment and other assets for your business without having to part with your liquid assets by making payments up front.

Operating Lease

An operating lease allows you to acquire the equipment you need for your business without a large initial outlay. In addition, you get up to 90% of the resale value.

The advantages of an operating lease include:

-lower rental fees
-the ability to use the equipment without owning it
-there is no need to dig into other lines of credit to finance a purchase
-your rental fees may be deductible from taxes as operating expenses
-there are other tax advantages, including avoidance of depreciation

Asset Finance Lease

A finance lease allows you to use the equipment you need without owning it. When the lease ends, you may get a percentage of the resale profit in the form of a rental rebate.

The advantages of a business asset finance lease for your equipment include:

-Low initial expenses
-Easily arranged through many vendors
-Monthly fees are a fixed expense
-Leased equipment is a balance sheet asset
-Maintenance contract is often included as part of the monthly rental fee
-Use of equipment without ownership
-Rental fees may be deducted from taxes as operating expense
-Frees up or preserves other lines of credit for other uses
-A percentage of resale price may be available as a rental rebate

Hire Purchase

Hire purchase represents an excellent way to acquire equipment without paying the entire cost up front. The advantages of hire purchase include:

immediate use of the equipment that you need
fixed or variable rates of interest available on loans
the interest on your commercial loans may be tax allowable
consistent monthly payments make bookkeeping easier
ownership of the asset at the end of the payment term
can often be tailored with payment holidays or stepping payments to allow the equipment to start generating profits
balance sheet asset

Most manufacturers and suppliers will work with you in many different types of finance and purchase arrangements. Once you know the type of equipment you need, shop around to find out what finance and purchase arrangements are available to you. A trained business consultant may be of use in helping you decide between asset finance and hire options.

Discover how your business can purchase new assets and equipment without affecting working capital using UK asset finance leasing. Visit Cash4Business at to find out how your business could benefit.

Business Fundraising - Network With Your Capital Providers Before You Need The Money

Often entrepreneurs will be in the process of building their businesses and suddenly be struck by a need for cash. The business wins a big contract or general growth has increased in speed. On the down side, the slower economy slows sales growth or customers slow down their payable cycle. Either way, this is not the time to go looking for capital.

If you ever believe you may need capital, the time to start the process is now, be it debt or equity. Take the time to get to know your banker. If you bank at a large bank, such as Bank of America, get to know the local branch manager. Find out how they process business loans. If there is a local loan officer, ask to meet with him or her. Find out what the lending standards are.

Large banks may allow the branch to approve loans up to a certain amount. Higher amounts may be kicked up to the regional or corporate offices. It would be a shame if you were denied a $60,000 loan by a corporate office, but you could have gotten a $50,000 loan approved by the local branch.

Finding a smaller local bank that focuses on commercial accounts will also improve you chance of getting a loan. You can get to know the lending officer personally and keep them informed of your business on a regular basis. If you are meeting your expected revenue milestones, your lending officer will be more likely to believe your plan in the future.

Equity capital is also a relationship business. If you think you may need some friends and family capital in the future, ask your potential candidates to sit on your advisory board. You get their advice and allow them to see you in action. Additionally, you get the experience of working with them, which may lead you to decide that you would not like them to be an owner in your business.

If you are interested in venture capital, make it a point to get to know some venture capitalists. Although reputed to be stand-offish, they are most afraid you are going to ask them for money. If you are just networking, many VCs will be thrilled to meet with you and give you advice and the benefit of their experience.

You can start with networking events put on through your local technology council (or similar state/city entrepreneurship group). You might try presenting at a venture forum. This gives you both practice and gets your name into the venture community. Volunteer to be a mentor in local entrepreneurship organizations. They often hold group meetings and you will get the chance to meet VCs on an equal footing.

Getting a bank loan can take four to eight weeks and raising venture capital can take six months to a year, sometimes more, so having your foot in the door can really help move the process forward. Don't wait until you need money to start looking, it will be too late.

Ms. Worrall is the President of Worrall Consulting, LLC. Worrall Consulting is a finance and business strategy consultancy providing professional services to high growth, early stage companies. The company provides capital formation assistance, market research and business intelligence, and business planning strategy. More information about the company can be found at . Additional financial and strategy advice can be found at

Business Fundraising - Network With Your Capital Providers Before You Need The Money

Often entrepreneurs will be in the process of building their businesses and suddenly be struck by a need for cash. The business wins a big contract or general growth has increased in speed. On the down side, the slower economy slows sales growth or customers slow down their payable cycle. Either way, this is not the time to go looking for capital.

If you ever believe you may need capital, the time to start the process is now, be it debt or equity. Take the time to get to know your banker. If you bank at a large bank, such as Bank of America, get to know the local branch manager. Find out how they process business loans. If there is a local loan officer, ask to meet with him or her. Find out what the lending standards are.

Large banks may allow the branch to approve loans up to a certain amount. Higher amounts may be kicked up to the regional or corporate offices. It would be a shame if you were denied a $60,000 loan by a corporate office, but you could have gotten a $50,000 loan approved by the local branch.

Finding a smaller local bank that focuses on commercial accounts will also improve you chance of getting a loan. You can get to know the lending officer personally and keep them informed of your business on a regular basis. If you are meeting your expected revenue milestones, your lending officer will be more likely to believe your plan in the future.

Equity capital is also a relationship business. If you think you may need some friends and family capital in the future, ask your potential candidates to sit on your advisory board. You get their advice and allow them to see you in action. Additionally, you get the experience of working with them, which may lead you to decide that you would not like them to be an owner in your business.

If you are interested in venture capital, make it a point to get to know some venture capitalists. Although reputed to be stand-offish, they are most afraid you are going to ask them for money. If you are just networking, many VCs will be thrilled to meet with you and give you advice and the benefit of their experience.

You can start with networking events put on through your local technology council (or similar state/city entrepreneurship group). You might try presenting at a venture forum. This gives you both practice and gets your name into the venture community. Volunteer to be a mentor in local entrepreneurship organizations. They often hold group meetings and you will get the chance to meet VCs on an equal footing.

Getting a bank loan can take four to eight weeks and raising venture capital can take six months to a year, sometimes more, so having your foot in the door can really help move the process forward. Don't wait until you need money to start looking, it will be too late.

Ms. Worrall is the President of Worrall Consulting, LLC. Worrall Consulting is a finance and business strategy consultancy providing professional services to high growth, early stage companies. The company provides capital formation assistance, market research and business intelligence, and business planning strategy. More information about the company can be found at . Additional financial and strategy advice can be found at

Business Angels vs Venture Capitalists

Have you these amazing ideas which you're sure you can put into practise and make a living out of your ideas. If so you're more than likely looking into financial help to put these ideas into practise. You may think bank loans, credit cards and loans off family and friends are the only options but Business Angels and Venture Capitalists are also a good option to consider.

Business Angels what are they you may ask, they often work as individuals who themselves are entrepreneurs and have made their dream come true in whatever business sector they chose. They have now have the experience and financial backing to help other entrepreneurs to start their own business just like themselves years ago.

Venture Capitalists are very similar to Business Angels they are often from an entrepreneur background have made a successful business and now would like to give back to other entrepreneurs and help them with finance for their new start-up business.

So you're asking what is the difference between them both, they are:

Business Angels - Give you the financial help you need when you need it, and invest their own money in your business. If it works within an angel network the angels will pool together with their investment as well as sharing research they each do. Angels understand the needs of a new business as they have been there themselves and therefore they not only offer financial help but they can offer good advice when no one else will.

Venture Capitalists - Give you the financial help you require when you need it but uses pooled money them and others have in a professionally managed fund. Venture Capitalists like to take an active role in the business they are investing usually being a director or on the management board of the business.

So if you're looking for some financial help for your new start-up business or even your struggling business you don't just have the options of:

• Family
• Friends
• Banks
• Loans
• Credit Cards

You have the option of using a Business Angel or a Venture Capitalist. Which ever one you decide to use the only way you're going to show your serious in wanting their help is to have a well planned and thorough business plan.

A business plan will not only be used to show your investor what you planned ideas are and your predicted returns in the next few years will be it will also be used for you to run your business well. It will show others what your initial goals were and if you succeeded in these as well as any risks you planned for and if any of these actually occurred and if they did, did you cope ok with rectifying the risk.

It shouldn't just be placed in a drawer and forgotten about it should be regularly updated. Your business will continue to change and usually out of your control and you should reflect on these changes within your business plan. You should have contingency plans to deal with any external influences that would affect your business and the way in which you run it.

You should now be a little wiser of the facts of the difference between these and how they can help you.

Jene Pedder is the Webmaster of Angelstartups who specialise in helping you find a Business Angel or Venture Capitalist.

Please feel free to republish this article provided a working hyperlink remains to our site.

Starting a New Business Requires More Than Just A Good Idea

The most important thing you can do to prepare for starting and operating your own business is to develop a business plan. This can take time and energy, but it forces you to really solidify your business idea. You can carefully plot exactly what your business, financial and expansion goals are. And this will help you progress in all other areas of starting your business as well. Without funding for startup costs, many successful businesses would never have been able to even open their doors.

Once you've done this, you will realize the significance of unsecured start up funding. Rarely does an individual have the savings or personal resources to put a business plan into action completely on their own. Often, even when one thinks this is the case, deeper development and planning dissuades this initial thought.

Small business funding can be a rather involved subject, filling shelves upon shelves of books at libraries and bookstores. The truth is though, you don't need a how-to book to get good funding. You simply need a good lender. Being able to determine once is what really counts.

A unsecured small business start up loan gives you the startup funding you need, but getting a startup business loan can sometimes be more difficult than it seems. Most lenders today require collateral for small or large start up business loans, but collateral may be something you have never thought of before. When you obtained a mortgage, your home served as the collateral. When you got a car, the vehicle was the collateral. But when you're seeking a new business loan, you probably don't have the commercial collateral you need yet. Your only option then is to offer your personal assets as security for the loan-which is a risk you understandably may be hesitant about.

Collateral is often the biggest obstacle to the prospective business owner. Not only does a new business not yet have any commercial collateral to provide; but it is asking a lot for an entrepreneur to put his hard earned personal assets at risk in order to start a new business venture. Yet, without collateral, getting a unsecured business loan can sometimes seem impossible.

The good news is, though rare, some companies have specialized programs for exactly this scenario. An unsecured business start up loan can get a new business owner the funding he needs to cover initial business costs, without having to provide collateral and place his or her assets risk. With this type of financing plan, the lender utilizes something the borrower has worked hard for and should be able to take advantage of - his good credit. With this approach, the lender can still an unsecured business start up loan at great rates and with a variety of programs.

The small business loan application process can also be made difficult by the imposition of restrictions on how the loan proceeds can be used. This takes away the borrower's freedom to use the funds as he or she may have seen fit. You can escape these hassles by using an online application for a unsecured small business loan.

Today, web lenders offer a new window of opportunity for small businesses and individuals that need a fast start up loan approval process. Time is money! Lenders now offer cash in as little as 72 hours, with no tax forms, no business plans, and no collateral! Such lenders offer the straightest line to unsecured business loan funding, at great rates. In the modern world, financial products as efficient and dynamic as the business world must be available.

Applying for a unsecured small business loan is easy, all the business owner need to do is just go on line and submit their loan details. Then the lenders will refer back to you with the loan decision in a few days.

Wardell Brooks is a current unsecured small business loan analyst for America Funding Network. He has been working in the financial sector for several years. His experience includes banking, mortgages, and sub prime lending.

Raising Venture Capital - The Alternative Golden Rule

The economic translation of the Golden Rule is "he who has the gold makes the rules." If you are raising venture capital, then you need funding. The more you need it, the less control you will have at the end of the day.

A typical entrepreneur scenario I see is: 1) I have a great idea or product and I'm going to start a company although I have no monetary resources myself to put into it.
2) I can scrounge up a hundred or two hundred thousand dollars through loans, grants, credit cards, a few early sales, etc. 3) I've worked on this for a year now and can really see the potential if I only had the money to hire salespeople, build a factory, hire production employees, buy servers...and 4) I've worked for a year and a half and I am tired of being poor, but I don't want to give up on my idea. Hey, I'll raise venture capital.

At this point, the entrepreneur is pretty close to desperate and is willing to give up just about all control to get a decent, steady salary. The other scenario is the company has already raised some amount of money, either friends and family or angel and the money is running out. This entrepreneur is really desperate and is willing to give up just about all control to keep his or her business alive.

Venture capitalists are not really big risk takers. They carefully evaluate every investment and the management team before deciding to invest. Once they have decided that the business has a decent chance of succeeding, they insist on a variety of controls to ensure that they can keep a tight rein on the business, including replacing management if necessary.

Even if the VC owns only a minority of the shares, they will include in their investor rights agreement certain voting rights and protective provisions (see my post on Elements of a Term Sheet for definitions) that will ensure them the ability to protect their investment.

If you are planning to start a business and believe that you might want to raise venture capital someday, you can do several things to avoid losing your company. First, have a plan for growing your company without venture capital. You may not be able to raise it, but if you are and you don't like the provisions in the term sheet, you can walk away.

Second, if you do raise venture capital, be careful with your selection of investor. Make sure that the investor is honest and treats his or her management teams with respect and fairness. Once you have a term sheet, you can ask for a list of their CEOs' contact info. If the VC is reluctant to give references or will only give a couple, you might want to look for another investor. The CEOs will give you the honest opinion of the VC, so make sure you follow up.

If you are going to put your blood, sweat and tears into a company, you don't want it taken away by an unscrupulous investor just for a few investment dollars.

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Financing Your Company Without Giving Up Equity

Many business owners think that the most effective way to finance their companies is to secure venture (or Angel) financing. Venture capital has a number of advantages, however, there are two major disadvantages that should be considered. The first one is that venture capital is very hard to obtain. The second disadvantage, which is the focus of this article, is that venture capital requires that you give up an equity stake (ownership) and some control to the venture company. Many times, the ownership stakes that VC's require can be substantial, leaving the founders in a minority ownership/control position.

There is an alternative to venture capital that is often overlooked. It's a form of business financing that provides you with the capital you need to cover operating expenses and grow your company. It's easier to obtain than a business loan or conventional venture capital funding. The catch is that it only works for certain types of companies.

Does your company sell its products to other companies or to government entities? If you do, then you are familiar with the fact that most companies pay their invoices in 30 to 60 days. However, while waiting for payment, you still need to pay suppliers and employees. Few startups or growing companies have the necessary reserves to cover expenses while they wait to get paid. This restricts their ability to grow and capitalize opportunities. This is where factoring your accounts receivable can help you dramatically.

Invoice factoring, as it is commonly referred to, provides you with an immediate advance on your invoices. Factoring eliminates the need to wait for payment and provides you with the liquidity to pay suppliers and employees. It gives you a solid financial footing that enables you to take on new business opportunities.

One of the biggest advantages of factoring receivables is that it's fairly easy to obtain. To qualify for it, your company must do business with credit worthy clients, such as large companies or government agencies. This is the most important requirement because your invoices to those clients are used as collateral.

A substantial benefit of receivable factoring is that you will never have to give the factoring company any equity or ownership in your business. Once you meet your business objectives - you can finish your relationship with the factoring company with no further obligation.

The cost of factoring varies based on a number of parameters, such as the amount of financing you need, the credit quality of your clients and the stability of your company. As a rule, monthly rates go from 1.5% to 3% based on these criteria.

If your company sells products and wait up to 90 days to get paid, you should consider factoring as an alternative to finance your company.

About Commercial Capital LLC

Marco Terry is the Managing Director of Commercial Capital LLC, a leading accounts receivable financing company.

Tuesday, January 8, 2008


1. Refusing to Conduct Research: Lack of research is the number one reason for business failure. Most businesses go out of business within 2 to 5 years. If you are not conducting research by going to the library every week, visiting book stores reading books and business magazines, using internet websites or, then chances are you will never be in a position to become a successful business owner.

2. Refusing to Keep Your Books: Every business has a creative side, marketing side and business side of running a business. Poor management ranks in the top three reasons why businesses go out of business. If you can’t sit down every 30 days to see what’s coming in and out of your business, then you need to hire a bookkeeper or a Certified Public Accountant (CPA). You can learn how to do the books yourself by buying the computer program and taking an accounting class.

3. Refusing to Read Non-Fiction Books: If you are not reading non-fiction books for at least 30 minutes to an hour everyday, then you will never have the knowledge to become a business owner. Some of the books recommended: “How To Take Control of Your Own Life” by Cathy Harris, Think and Grow Rich: A Black Choice by Dennis Kimbro, Think and Grow Rich by Napolean Hill, Powernomics by Dr. Claude Anderson.” Other recommended books are located at

4. Refusing to Support Young Entrepreneurs: Most young people are not like adults because they don’t put self-imposed limitations on themselves and can easily open a business within 30 days and start making money. Since 1 out of every 2 marriages end because of finances, someone in your household (you, your spouse or your youth) needs to open a business.

5. Refusing to Surround Yourself with Good People: You should surround yourself with: 1) people who have integrity, 2) people who are humble (teachable), and 3) people who are respectful. Stay away from people who are toxic, destructive or negative.

6. Refusing to Brainstorm: If you are not brainstorming with legal, marketing, and financial advisors, mentors, consultants, coaches, you will have a hard time moving your business to the next level. Remember you don’t have to do everything yourself. If you are the smartest person in your group, you need to get another group. Asking for help doesn’t mean you are weak, it simply means you want to remain strong so ask others for help in your business.

7. Refusing to Create a Lifestyle Change: You need to understand that becoming a business owner is a complete new lifestyle change. Therefore you need to incorporate being a business owner while paying close attention to your health and finances. As part of your new lifestyle change, you need to make short and long range goals and read books and magazines on health and financial education, and watch health and financial networks instead of unproductive television shows. If you are watching television for hours everyday then forget about becoming a business owner.

8. Refusing to Raise Your Credit Score: Only you can clean up your credit so as you build and grow your business, you do need to order your credit reports yearly from the three credit bureaus (Experian, Equifax, TransUnion) at This means you are going to have 3 different credit scores. If your credit scores are between 300 – 500, then you are in bad financial shape. Your goal is to raise your credit score to over 760. It’s estimated that 79% of all credit reports have some type of errors, over 25% have major errors and over 30% have accounts opened that should have been closed.

9. Getting Involved in Multi-Level Marketing: If you still believe that Multi-Level Marketing, also called Network Marketing and Pyramid Schemes, will make you a successful business owner, then you are sadly mistaken. Remember if you are involved in Multi-Level Marketing (noni-juice, melaleuca, pre-paid legal, primerica, YTB travel, Quixstar, ACN, etc.) you DO NOT have your own business. You are working for that person at the top of the pyramid. Never get involved in a business simply because others are doing it. If it’s not your passion, then chances are you will not be happy.

10. Waiting on Grant Money: If you still believe you can get grant money to start or expand a business or non-profit organization simply because it is advertised on black radio shows and websites, you will be waiting a long, long time. If you had conducted research, you would have found out the truth about grant money. There is NO GRANT MONEY to start or expand a business and it’s extremely hard to get money for a non-profit organization, especially if you are an African American. So we need to stop repeating misinformation.

11. Refusing to Write a Business Plan: If you chose not to write a business plan, it’s a red flag that you are not serious about your business. A business plan is a road map and without it you will get lost in your business and go out of business. The key to working with investors is to present a good business plan. Unless you have a good “Executive Summary,” most investors, bankers, financiers will not read the entire business plan.

12. Refusing to Put Up a Website: If you do not choose to put up a website, it will eat away at your creditability. Remember creating a blog and a myspace account does not take the place of a professional website with a domain name. If you have a professional website, then you will look more attractive to investors simply because you chose to take your business online.

This document is copyrighted and was written by Cathy Harris. Cathy Harris is a Motivational Speaker and is known as “The Ethical Black Business Coach” ( She is available for business seminars and workshops. She is also the author of over 20 non-fiction books including the 3-part book series “How To Take Control of Your Own Life” and can be reached through her company at Angels Press, P.O. Box 19282, Austin, TX, 78760, Phone: (770) 873-2072, Website: and Email:

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Cathy Harris is an Empowerment and Motivational Speaker, Non-GMO Health and Wellness Expert, Self-Publishing and Business Coach.