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Category Archives: Starting Up

Business Planning in a Down Economy

By | Business By The Book, Buying a Business, Buying a Franchise, Growing a Business, Growth Strategy, Increasing Profitability, Investing in Small Businesses, Planning, Starting Up, Valuing a Small Business, Writing a Business Plan | No Comments
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Q: Should the economic forecast be an important factor in determining the type of business to start or acquire? A: Most businesses that are acquired or started are done so with a long time horizon in mind. Add to that the fact of the typical continuous cycles of any economy: (downturn, bottom out, upturn, and peak). Given that long-term view and the necessary expectation of economic cycles that almost defy the ability to forecast the timing of those trends, it’s more important to pick an industry/market in which you have loads of experience and create a superior offering with a…

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Successful B2B Startups Always Ask These Two Questions

By | Business By The Book, Coming Up with an Idea, Planning, Starting Up | No Comments
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During a mentoring session with some interns, one of them brought up an idea he was working on based on informal market research he had conducted by striking up conversations with prospective customers in his target industry. He was zeroing in on a particular process that was the most frustrating part of the life of his prospects in the daily life of running their business – his target customer’s “pain.” If there is sufficient “pain” in the life of a business owner, they will usually seek a solution to that pain and if there are enough such prospective customers with the…

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Warning! Don’t Marry an Entrepreneur, Unless…

By | Business By The Book, Ownership & Purpose, Running a Business, Starting Up | No Comments
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I was in the middle of the dot com crash and the emotional journey from the heady days of preparing my company for an initial public offering to the disheartening task of cutting a massive cash burn rate. The company had chewed up $30 million in the race to be first to market in our chosen space. Not only were we out of cash, but we owed millions more in unpaid bills and our lead investors were refusing to invest additional capital. I felt the crushing weight of 335 employees in offices across the U.S. and Europe (many of whom…

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How to Start a Successful Service Business with No Capital

By | Business By The Book, Planning, Starting Up | No Comments
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I often hear the lament “If I only had more capital…” and I must admit that in most of my bigger ventures, I have fallen prey to operating that way as well – devising business plans that require massive amounts of capital – call it the MBA curse if you will. But there is hope for the less capitalized in that there are countless businesses that can be started with very little money. These businesses are service businesses that do not require any investment in manufacturing infrastructure, nor do they require any inventory that chews up working capital. Instead, these…

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What Exactly Are You Selling?

By | Business By The Book, Financing a Startup, Sales, Sales, Starting Up | No Comments
What Are You Selling?

As an entrepreneur, your most precious resource is your time and how you invest it. You can invest your time trying to get customers (by solving their problems) and/or you can invest your time trying to get investors. The more time you spend getting customers (selling your product), the less time you will need to spend getting investors (selling your stock). And if you spend enough time getting customers, you will not need investors. And just at the point that you don’t need investors is when they will start pestering you to let them invest. But of course by then…

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This Startup Strategy is Guaranteed to Succeed

By | Business By The Book, Education, Planning, Starting Up | No Comments
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I was recently asked by a young aspiring entrepreneur about his next steps upon graduating from college with a degree in entrepreneurship. He was eager for the next phase of his life and wanted to exercise his entrepreneurial muscle while continuing to learn. Besides the obvious answer of “go to work for a startup with a compelling offering and a great leadership team and learn from the situation (which often means you are just a grunt and don’t really observe or learn all that much), I suggested that he also consider the following: maintain a college budget of living on next to nothing…

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How Hard Can It Be to Start a New Insurance Agency?

By | Business By The Book, Growth Strategy, Leadership, Ownership & Purpose, Sales & Marketing, Starting Up | No Comments
Insurance Agency

Q: Thank you for all of the resources on sales and marketing that you offer. I am planning on becoming an independent insurance agent for a large insurance company. Will your resources here, including Venture Academy help me get leads and will that be my biggest obstacle in selling supplemental insurance? A: Our sales and marketing resources and video training do not include “leads”, but cover how to think about your sales pipeline and how to manage it in order to build your business. Selling insurance and building a book of business is a long, slow process. In my opinion,…

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Raising Small Amounts of Capital

By | Business By The Book, Financing a Small Business, Financing a Startup, Planning | No Comments
Seed Capital

One of the most frequent questions I get is how to raise relatively small amounts of capital, such as $25k to $500k. Believe it or not, raising small amounts of capital is actually harder than raising large amounts of capital. The reason small amounts are more difficult are manifold, but here are a few: Amounts below $5m fall below normal “institutional” fund minimums and the institutional equity financing process, therefore the entrepreneur is left to chase down angel investors, which is a fairly difficult process because they usually do other things for a living rather than getting paid to invest…

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Nuts and Bolts of Corporate Taxes

By | Business By The Book, Finance, Incorporating a Business, Legal Issues | No Comments
Form of Incorporation

When starting a business, many entrepreneurs wrestle with the question of what corporate structure is business best. Legal pros and cons aside, there are various tax and financial matters to consider when choosing.  (Note that these are general guidelines and in no way comprehensive). The limited liability company (LLC) is a very popular form of business structure and one most entrepreneurs have at least heard of.  It offers liability protection while being flexible in the taxation department. But what many budding business owners don’t realize is that choosing to operate as an LLC isn’t the only decision to make; you…

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