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3 Keys to Selling a Startup

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Is there any chance you may want to sell your startup anytime soon?

If the answer is yes, do you know what is necessary to get this all-important task done?

Making sure everything falls into place is critical to say the least.

The last thing you want is hassles that can end up costing you time, money and more.

With that in mind, are you going to be selling sooner than later?

What Will Make for a Better Sale?

When you are thinking of preparing your startup for acquisition, here are three keys you want to zero in on:

  1. Is now the right time? – Above all else, be as sure as you can that now in fact is the right time to sell. There are a myriad of factors that can and often do come into play with such an important thing to consider. For one, is the market in your particular industry good for selling now? If such sales are sluggish right now, you may well decide it is best to hold off. In the event many startups in your industry are on the market, you may also decide now is the best time to cash-in on this. You also want to think about what a sale will mean to your professional and personal lives. Do you have another business to turn to? Will you go work for someone else? If you are getting up there in years, is retirement a possibility now? Weigh everything in play to see if selling a startup now makes sense.
  2. Where do your workers go? – Unless your company is void of employees, what happens to your workers when selling is key. The last thing you want is to leave them hanging. That said you typically would have a few options to look at. First, you may be buying another startup soon. If so, will you offer to take your current employees with you? Second, you may include some language in the sale of your startup. Language that says the buyer will at least offer your workers jobs. For some sellers of startups, they will not do either. If this is where you are leaning to; at least give your employees as much notice as possible. This allows them more time to see what else is out there on the job front.
  3. Charting your next course of action – Last, you want to have a good idea of what is next in store for you. Are you looking at buying something else? Would you go and work for someone else? If you are up there in age, could retirement be in the cards for you sooner than later? By having a good sense of what it is you want and can do, you are in a better position moving ahead.

Once you have made the decision it is a go to sell your startup, a lot needs to come together.

With that in mind, you want to put together a checklist.

Be sure to check the appropriate boxes as you move along.

In selling your startup, you more than likely have options on the table to what will come next.

About the Author: Dave Thomas covers business topics on the web.

 

 

 

Book Review: The Art of the Start 2.0, by Guy Kawasaki

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Have you ever wished you could pick Guy Kawasaki’s brain?

Like, sit down with a pitcher of beer and just pepper him with questions until the pub closes or his head explodes?

This is your lucky day. Guy has done a “brain dump” in the form of an update to his 2004 book, The Art of the Start.

However, The Art of the Start 2.0 is not just a quickly busted-out update, it’s a complete overhaul. It covers everything you want to know about starting a new business, from idea to exit, written by someone who has literally been-there, done-that.

I would recommend it for anyone who is considering answering that little voice in their head, telling them to start something.

Art of the Start 2.0 book review

Guy Kawasaki was the first person I ever knew to hold the job title “Evangelist.” He has been on the giving and receiving end of pitches, and advised companies large and small. He’s seen the heights of the tech boom and the lows of the bubble burst.

He’s the person who will stand over your shoulder and remind you to spend more time on the product than on the furniture in your conference room.

The style of the book brings you right into Guy’s world. There are pithy stories, lessons-learned, exercises, and Q&A galore. It’s not the type of page-turner that you spend a weekend curled up with; it’s a manual that you dog-ear, highlight, and refer to over and over again.

Each chapter ends with recommended reading, so you can dive deeper into any subject as necessary.

“Customers don’t care if you want to destroy the competition. They want to know what benefits they derive from using your product. Also, evangelism is about what you do for your customers–not about what you want to become.” Guy Kawasaki

There is solid business advice in The Art of the Start 2.0, but by far my favorite bits were the hard-won little insider tips.

Remember to bring two thumb drives to your presentations, pick a company name with “verb potential,” and find your Morpheus (someone who will tell it like it is).

Some of the major topics covered include:

  • The Art of Starting Up
  • The Art of Launching
  • The Art of Leading
  • The Art of Bootstrapping
  • The Art of Fund-raising
  • The Art of Pitching
  • The Art of Building a Team
  • The Art of Evangelizing
  • The Art of Socializing
  • The Art of Rainmaking
  • The Art of Partnering
  • The Art of Enduring
  • The Art of Being a Mensch

In my own 20 years of business experience, I’ve been in many of the situations described in the book. It can be intimidating navigating conversations with potential investors, knowing when to hire more staff, and figuring out how to get the word out about your project.

With Guy’s advice in your arsenal, you’ll be ahead of the game.

Author’s Bio: Rosemary O’Neill is an insightful spirit who works for Social Strata — makers of the Hoop.la community platform. Check out the Social Strata blog. You can find Rosemary on Google+ and on Twitter as @rhogroupee

Disclosure: I was given a digital copy of the book for purposes of this review. My opinion is my own.

Stop trying to be like everyone else – grow your business faster

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By Brian Morris

A few years ago, two friends started a small business in my hometown. Like so many local entrepreneurs that came before and after, they failed. Within a year of opening their doors, their business was dead. They listened to business advice from the wrong people, people whose own businesses were struggling, people who kept telling them to be patient, and they were forced to shut their doors.

If you’ve ever researched starting your own business, you know that one of the most discouraging bits of information consistently recycled by small business gurus is that it will take two to three years for your business to be profitable. That’s a kick in the teeth to otherwise-motivated entrepreneurs who don’t have three years of income built up – or, most of the living universe.

And it’s hogwash. Look, this is the digital age. You can turn a profit today.

Now, I don’t want to oversimplify the process of building a profitable business, and I’m well aware that start-up costs and overhead for, say, a refrigerated trucking company are vast in comparison to, say, a graphic design firm. But the reason I think it takes so many entrepreneurs so long to turn a profit is that they’re trying to be like everyone else.

It all comes down to marketing. You see what the successful businesses are doing, and you try to do it, too. There are three ways people market in my hometown, which boasts a population of around 8,000 people: television, radio and newspaper.

To that I say: expensive, ineffective and wasted effort, respectively. It’s literally been years since I’ve received a direct-mail postcard from a local company, despite the fact that I get postcards every day from national brands. And door hangers? Please…

No one hosts publicity stunts. No one markets effectively on the web. No one posts massive vinyl banners at the busiest intersections, which witness traffic figures easily 10 times the population every single day.

And guess what? Most of our start-ups fail. They blame their failure on so many things: the economy, lack of support for local businesses, the “death” of our downtown, Amazon.com. Few ever blame the real culprits: themselves.

Instead of marketing where everyone else does, try something new. Distribute door hangers door-to-door. Print vinyl banners and place them in high-traffic areas. Brainstorm a fun and engaging publicity stunt, and get awesome PR for it. These are all cheap. These are all highly effective.

What happened to my two friends? Well, one decided to start another business. He opened an office and began to toil, plying his service using the same failed strategies. His mindset, I think, was that the business wasn’t profitable because two people were one too many to get by on their profits.

The other likewise started another business, but adopted a different, more bold marketing strategy. He walked the city with door hangers, began submitting press releases to the local paper, joined networking groups, volunteered in the community, and always has a nice big banner prominently displayed.

Five years later, the friend who opted to keep going down the path of slow and steady lives in an apartment on the wrong side of town. He works out of his rental unit, the downtown studio long gone. The other has bought a new home in a good neighborhood (and I think he’s got at least $30,000 wrapped up in a new addition) and is well-known, respected, and liked throughout the community. His business, it seems, is thriving.

To the best of my knowledge, both of my friends are capable of producing high-quality work, but only one is willing to do what his competitors will not. You hear NFL players talk about playing with a sense of urgency. My friend worked with a sense of urgency – a do-or-die, now-or-never approach – and grew his business rapidly.

Go guerrilla. Market aggressively and on the cheap. Be a grassroots business. Push for business growth without wasteful marketing efforts.

Be bold, and do what your competitors will not do. Don’t do what failed businesses have tried.

Stop trying to be like everyone else. Don’t fail by taking the well-worn path. Be new, different, better. Grow your business faster.

Author’s Bio: Author’s Bio: Brian Morris writes for the PsPrint Design & Printing Blog. PsPrint is an online commercial printing company. Follow PsPrint on Twitter @PsPrint.

Starting an Online Business When You’re in Debt

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By Julian Hills

So you want to start an online business?

Startups have a positive effect on the economy. A recent article from the Consumer Financial Protection Bureau found that each new startup added about 5.3 new jobs over the past decade.

That’s a good thing, but financial fears may be putting a drag on that statistic.

In the period between 2007 and 2010 — the height of the recession — the number of startups fell by 23 percent. The economic climate caused many would-be entrepreneurs in the technology sector to defer their dreams, specifically because of rising student loan debt. Student loan borrowers have lower credit scores than peers with no student debt.

That’s not such a good thing.

Knowing how to manage your resources and using a little creativity could be the key of starting a business while mired in debt.

  • Choose Your Startup Wisely: Select a business that does not require a lot of startup capital. Use equipment, software and supplies you already have. Avoid spending money on new business investments as much as possible.
  • Manage Student Loan Debt: If most of your debt is from student loans you should see if you can lower your payments. Young business owners can often lower their federal loan payments by Income-Based Repayment (IBR.) More information about IBR is available at the U.S. Department of Education’s National Student Loan Data System (NSLDS) website at www.nslds.ed.gov.

Private loan borrowers can see if refinancing at a lower interest rate is an option.

  • Use Free Resources: Go to the library and use their media and business resources. There is also free online software, blog sites and other services that you can take advantage of, and cost you nothing.
  • Find Investors, not Banks: If your business plan is good enough, you may not have to go to banks for investors. There are grants, community programs that help people with limited resources. Crowdfunding is becoming more popular. That involves getting regular people to invest in your company through social networking sites.

The Small Business Association has an entrepreneurial help program called Startup America. It’s a partnership between the public and private sectors aimed at expanding access to startup capital, increasing education, encouraging collaboration between big companies and startups and reducing red-tape. Find out more about the program at their website: http://www.sba.gov/startupamerica.

  • Find Cheap Ways to Market Yourself: Getting out the word about your business is important. You can get business cards printed at relatively inexpensive cost. Using social media, blogging and email to market your startup is free.
  • Don’t Pile on More Debt: The temptation to use credit cards (if you have them) or trying to get more loans or lines of credit is going to be there. It might be wise to raise money by considering selling things you can live without online or at a good old-fashioned yard sale.

Sometimes it takes loads of money to start a business, other times it may just take a laptop. Figuring out what you need or don’t need can trump what you see as limitations caused by debt.

Author’s Bio: Julian Hills is a content writer and blogger for Debt.org. His journalism career has taken him from newspapers to local television news stations and even a 24-hour cable network in the Southeast. Julian is a graduate of Florida State University who enjoys finding new ways of saving money for football season tickets.
Sources:
http://www.consumerfinance.gov/blog/starting-a-small-business-when-you-have-student-debt/
http://smallbusiness.chron.com/start-business-one-debt-2061.html

Setting Up Your Business for Long-Term Success

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Robert Cordray

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Setting Up Your Business for Long-Term Success

Start-up business owners learn two things very quickly. First, the idea that launches an entrepreneurship is invaluable. The seed of a business, or the initial idea, provides a source of motivation and initial direction.

However, the second notion often comes as an unpleasant discovery. The grand idea by itself is not enough to sustain long-term growth and success. No matter how great the business idea is, many other factors influence success and determine whether a business will flourish or fail.

The key to being successful in business is learning to make good business decisions. While success cannot be guaranteed, you can start your business with attention to a few important areas and increase your chances of achieving your goals.

Avoid the most common missteps entrepreneurs tend to make by following these suggestions:

Have a Business Plan

A business plan is an opportunity for business owners to understand their market, as it relates to their product or service, and map out their capabilities. Compiling a thorough business plan requires a bit of effort, but as it will serve as a guideline for your financial expectations and keep you on track, it is an essential part of any new business.

The business plan will also help you in the key area of setting realistic goals for when you will achieve profitability. Know how much time, effort and capital it will reasonably take to reach your goal of being profitable. Conservatively scaling your expectations to match reality will keep you on track and save you from disappointment if your hopes of becoming an overnight success are not realized.

Balance Your Capital

Having enough capital to launch your business is crucial, but you will want to avoid the mistake of taking on sizable loans at the outset. Use your business plan to ensure you have enough resources to see you through until you achieve profitability.

Understand Your Market

As a new business owner, you need to understand who your customers are. How large is your market? Who are your competitors? You will need to know what alternatives to your business are already available to consumers or if you are creating a new market. This will help you in your decisions on strategy.

Choose a Go-to Market Strategy

Having a focus on one strategy for your business will enable you to market your business effectively. Without a focus, you are likely to flounder, but attempting to pursue multiple strategies at once will also doom you to failure. Understand your business and choose one as your goal.

In general, there are three go-to market strategies that businesses use. The first is a focus on operational excellence. These businesses emphasize efficiency in their processes to lower their costs and provide consistency to a wide range of customers.

Another strategy is to develop customer intimacy by establishing strong relationships and fostering repeat business through customer care.

Third, businesses can seek an advantage through product innovation. This aspect depends upon the creation of a new and desirable product or service and founding a business where there are little to no existing competitors. This may be the most difficult of the three for a new entrepreneur to achieve.

Build an Effective Team

The path to becoming a successful entrepreneur should not be a lonely journey. Many businesses fail because the owner tried to manage too many decisions and responsibilities that could have been delegated to others. Find good support for your business such as those you can trust with general tasks while you focus on your role as an executive.

Seeking advice will be necessary, and finding a reliable source for information and direction may seem intimidating. However, there are several people who specialize in guidance and helping entrepreneurs maintain their focus. Through their services, you can rest assured that your business will profit from your well-directed efforts.

Author’s Bio:

Robert Cordray writes about business, entrepreneurship, and living better at noomii.com. He has acquired over 20 years of entrepreneurship and business consulting. You can find him on Twitter @RobertCordray

3 Steps to Start a Successful-Online Business

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Danielle Rodabaugh

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Take Charge

If you have a tech-savvy entrepreneurial spirit paired with an old-fashioned hard work ethic, starting a web-based business might be a great option for you. By managing web-based businesses, innovative entrepreneurs can work from home, set their own schedules and take charge of how much they earn each week. But what does it take to start, and then manage, a web-based business that’s profitable?

1. Choose a product or service in a profitable niche.

The first step to starting and running a successful web-based business is determining the products or services you should sell. As with traditional brick-and-mortar businesses, you’ll have to do a great deal of market research before you even think about starting an online business. If you want to make a profit for the long-term, you need to choose a market in which people consistently spend money. Then you need to find a niche audience within that market to specifically target online.

For example, my boss was interested in starting an online insurance company. He soon realized how difficult it would be to build one from scratch when so many national brands had already claimed substantial ownership of the market. So, he zeroed in on a very specific segment of the industry: bond insurance (http://www.suretybonds.com). This allowed him to market his company to a specific online audience that insurance providers had largely been ignoring.

You can determine whether a niche is profitable by researching keywords related to that market. A variety of free and paid SEO research tools can help you determine what your potential clients are looking for online. These tools can also give you an idea of what the competition looks like within the industry as a whole or one of its specific niches. Once you’ve gathered a comprehensive understanding of how your market works and what it’s missing, you’ll be able to develop a brand.

2. Launch a professional website.<.h3>

Once you’ve selected a niche that has the potential to turn a profit, you’ll need to launch a website that features your products or services. Although you could hire a professional web developer to create a fully customized website for your company, you might not want to invest a significant amount of your start-up capital on web design right away. If you want to keep start-up costs down, consider using a template for your website.

Free templates usually don’t offer many ways to customize the look, feel and navigation of a website; however, you can usually purchase a $100 template that offers a great deal of customization. These templates are simple for beginners to install, and many provide user dashboards that will simplify the way you manage your site’s layout, colors and other features.

3. Implement a commanding online marketing strategy.

Simply setting up a website doesn’t guarantee that customers will find your online business (http://www.sba.gov/content/setting-online-business); you’ll have to heavily market your company to garner traffic that generates sales. Paid placement advertising can drive traffic to your site immediately; however, doing so requires a substantial investment upfront. If you choose to use paid placement ads, start with a small budget and test your options before spending a ton of money.

Setting up free profiles on social media sites such as Google+, Facebook and Twitter is one cost-effective way for you to build interest in your business and attract potential customers. When you work with these sites, though, keep in mind that most of your interactions should build trusting relationships rather than promote products or services. You should focus on promoting your company though on-site content development and other SEO marketing strategies.

As a professional who works with entrepreneurs every day, I’m aware that many more factors go into managing a successful web-based business. However, I firmly believe that developing strategies to achieve these three goals from the beginning will give any new business owner a solid starting point.

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Author’s Bio:
Danielle Rodabaugh writes about surety bonds, business licensing and entrepreneurship at SuretyBonds.com. You can find her on Google+ or Twitter @darodabaugh (https://twitter.com/#!/DaRodabaugh).

Thank you, Danielle, for getting us started!!

–ME “Liz” Strauss