It was Daymond John, CEO of FUBU and an investor on the ABC reality TV series “Shark Tank,” who famously said, “An entrepreneur must pitch a potential investor for what the company is worth as well as sell the dream on how much of a profit can be made.”
But no amount of passion from an entrepreneur, or even an established business owner, can fully quell the nerves that come with pitching before a group of investors. Everything from the length of the PowerPoint presentation to what you wear is heavily scrutinized, and there is no guarantee that every business will receive funding on the first pitch.
Practice makes perfect when it comes to pitching, so before you go in for the final presentation, focus on prepping yourself in the following four areas.
Keep it short and sweet
This applies to every aspect of your presentation. From your elevator pitch — one minute, maximum — to the PowerPoint presentation you’ve prepared. While it’s important to get investors to notice the problems your business can solve or the needs it will meet, adding tons of detail clutters and hurries the pitch. Keep it simple, clean and straight to the point.
As well-known entrepreneur and “Shark Tank” investor Mark Cuban told The Washington Post, “When it comes to business, there is a simple scorecard. Are you making money or are you not making money? Are you succeeding or are you not? So when you go to raise money, always, always catch yourself and eliminate the backstory.”
Don’t over-disclose upfront
Knowing the financial figures behind your business is important, but there’s no need to share all of your exact numbers at the outset. Instead, show a commitment to metrics and analytics.
Investor Mark Cohen says that while measuring metrics is not easy to do, it’s important to believe in the value of what the metrics will reveal and be willing to adapt to what is uncovered.
Be specific about your strategies
As mentioned before, entrepreneurs need to be in tune with the problem their business is solving or the needs it is meeting. Prep your strategies beforehand and know what you’re working on today and how you anticipate growth in the future. It’s also important to know your market and customer base and what they think of the product or service — specifically if they recognize that your company is solving a problem for them that they would be willing to pay for.
The average window for a pitch meeting with investors is about 10 to 15 minutes. So once you’ve confidently and passionately knocked out the “three magical P’s,” which according to investment banker Gary Spirer including people, product and potential, it’s time to ask questions of your own.
What is the investor’s specific investment strategy? How does the investor typically structure investment in a company? Is the investor focused on a particular industry, business size and/or growth rate? How does the investor get involved in the business after an investment?
Remember that once the pitch is over the only bad question to ask is no question. So be sure to grill your potential investors!
Deborah Sweeney is the CEO of MyCorporation.com, a leader in online legal filing services for entrepreneurs and businesses, providing startup bundles that include corporation and LLC formation, registered agent, DBA, and trademark and copyright filing services. For more information, please visit www.mycorporation.com or follow on Twitter at @MyCorporation
Fall is a great time for sports fans. The World Series takes place in baseball, and the regular seasons for the NFL, NBA and NHL begin.
The end of the year is also one of the most important times for small businesses. A lot of entrepreneurs look back on 2013 and wonder what could be improved and what should be changed. Luckily, there are plenty of business lessons to learn from professional sports.
There is no “I” in team
Chances are good that you’ve run the entire show from day one, so as you add employees, it can feel a bit uncomfortable to put some of your former responsibilities into their hands. That’s why people micromanage — they assume that they, and only they, know how to do a task correctly.
You need to get into the habit of trusting your employees and backing away. Give them room to surprise you and rise to the occasion, and start building a team in earnest.
Avoid “Hail Mary’s”
It is awesome to see a crazy play work out beautifully. But, more often than not, we just get stuck watching the wide receiver fumble the ball and lose the game. It can be tempting to try your own Hail Mary pass at the end of the year to boost your numbers and round out 2013 on a high note, but marketing gimmicks are a real gamble.
Instead, drum up business with time-tested, reasonable marketing practices. The end of the year is not the time for a business to experiment with its customer base.
Don’t be a Monday morning quarterback
We all know Monday morning quarterbacks. They are the ones who know the plays that should’ve been made and mistakes that should’ve been avoided. Advice based on hindsight can get pretty annoying, especially in a small business.
You want your team to like working for you because if morale drops, so do sales. Constructive, end-of-the-year criticism is appreciated. If all you do is point out your employee’s mistakes without giving them room or advice to grow, however, they are going to be put off.
Keep your eye on the ball
This idiom always interested me. The point of any game is to score points and win, and a ball is a means to that end. But the idiom isn’t “Keep your eye on the goal,” or “Keep your eye on home plate.” The focus is the ball.
Like in sports, the goal in business is to win by staying in business and supporting your livelihood. But how your business operates, and how it takes advantage of your personal, entrepreneurial style is how your company achieves that end.
Take this time to reflect and remember why you got into business in the first place — a crummy boss, a side passion or a desire to better your community. Whatever the reason, focus on that and use it to guide your growth strategy. If you find your niche, your company will do just fine.
Admittedly, the sports-to-business analogy can be a bit corny, but you have to admit that using some of these fundamental practices can help you improve your business. Focus on them, and 2013 will be a real winner — if you’ll allow me one more sports-related pun before I go.
Deborah Sweeney is the CEO of MyCorporation.com. MyCorporation is a leader in online legal filing services for entrepreneurs and businesses, providing start-up bundles that include corporation and LLC formation, registered agent, DBA, and trademark & copyright filing services.
Your ability to attract investments can make or break your business. Extra capital allows companies to expand their operations and find new customers. Most business owners do eventually reach the point where they need some sort of outside investment — whether it’s from family, a bank or an actual investor — to help them make major purchases and grow.
One of the most common ways for a business to get extra money is by incorporating and then selling stocks. Unlike a loan, issuing stock allows you to raise money without taking on additional debt.
But there are a few things you need to know before you look at raising capital for your business:
You will have to give up some control of your business.
Incorporating a business turns it into its own, separate legal entity. Your ownership of that entity is dependent on how much corporate stock you own. As you sell off that stock, you dilute the ownership of the company. Furthermore, when you incorporate, you have a fiduciary duty to act in the best interest of the stockholders and the corporation.
The interests and desires of the stockholders likely coincide with your own — both parties want to see the business succeed and make money. Just remember that when you do begin to sell stock, you are empowering the holders of that stock to influence major business decisions. Before you begin selling stock, make sure you’re ready to take the opinions of your investors into serious consideration when you are running the company.
You will need actual data to back up your pitches to investors.
If you are at the stage where you are ready to start looking for investors to help you expand, chances are that your business has done pretty well. It’s not enough to point and say, ‘Look, we survived and made money!’ You need hard numbers and data — how much revenue is your business generating? What is your current revenue-to-debt ratio? How will this investment impact your future earnings?
Buying stock in a company is already a gamble because if the company doesn’t do well, the investment could be lost. So be ready to show potential investors that your company is in a position where it can create a good return on their investment.
You will have to pitch yourself, in addition to your company.
Everyone is “passionate” and “committed” about what they do when they run a business — investors have heard those buzzwords plenty of times already. Investors want to know who you are, what your credentials are, and why they should trust you with their money. Sell them on your experience, and the experience of anyone else helping to run the company.
If they are confident in you, they will be confident in your business and be much more willing to invest. Issuing stock and finding investors can be a jarring experience. Once you start selling that stock, you lose some control of your business, and suddenly the needs and demands of your investors must be taken into account when you make major business decisions.
You also have to be ready to prove the worth of both your company, and of yourself as one of the company’s directors. If you are ready to let go, and are prepared to pitch the heck out of your business, your employees and your own career history, you will find investors willing to roll the dice and put some of their own money into your business.
Deborah Sweeney is the CEO of MyCorporation.com. MyCorporation is a leader in online legal filing services for entrepreneurs and businesses, providing start-up bundles that include corporation and LLC formation, registered agent, DBA, and trademark & copyright filing services. Follow her on Google+ and on Twitter @deborahsweeney
It’s 2:30 in the afternoon on a sweaty Wednesday. You answer what feels like millions of emails, check a few items off your to-do list and take a lap around the office to stretch. You look sure that enough time has passed to make it 5 o’clock. But it’s only 2:35. Only five minutes have gone by.
It’s easy to get stuck in a summer rut. Unless there’s a BBQ and lemonade stand in each of your employee’s cubicles, being in the office is probably not an employee’s ideal location on a summer afternoon. It’s harder to stay focused and on track with projects and assignments when it seems like virtually everyone is on vacation or taking on new shift hours.
Don’t let the temperature and the temptation of playing hooky to go to the beach get to your employees before you can. Here are a few tips to keep your team focused while still having fun in the office all summer long.
Go on the occasional field trip
During the summer, I like to take my team on a “field trip” every now and then. We’ll walk to the nearest frozen yogurt establishment for a cool treat or to our local Starbucks to get just the right amount of caffeine to finish out the day.
It’s a nice break in the day that everyone appreciates. Sometimes it’s all you need to get motivated to finish out the afternoon strong.
I make it a point to get the team talking on our outing — do a little team building together with some quick exercises. Last summer, I asked my employees to go around and each say a word they associate with starting a small business and their favorite summer memory. Don’t be afraid to get creative!
Be understanding when it comes to time off
I am a firm believer in fully being a boss when I’m at the office and fully being a mom when I’m at home. As long as I work the absolute hardest I can during the day and get everything on my to-do list checked off, there’s no reason why I shouldn’t be able to head out early to catch my son’s soccer game.
I apply that same principle to my employees. As long as they have everything done and done well, early dismissal and later arrivals in the morning every now and then is fine. During the summertime, it’s important to be flexible with everyone’s schedules and work around them.
That’s not to say your employees should get out of the office for every little thing that comes up. But when something important unexpectedly happens, try to accommodate around that moment as best as you can.
Keep the watercooler filled
Obviously, you’ll be doing this for hydration purposes, but what I’m getting at here is to make sure your office has a laidback, summer-friendly atmosphere. Keep plenty of water available for everyone, a steady stream of A/C (with plenty of fans on hand) and a nice refreshing fruit bowl for a healthy summer snack.
It’s the small gestures that let your employees know that you have their best interest at heart, especially when it’s 104 degrees outside.
Deborah Sweeney is the CEO of MyCorporation.com. MyCorporation is a leader in online legal filing services for entrepreneurs and businesses, providing start-up bundles that include corporation and LLC formation, registered agent, DBA, and trademark & copyright filing services. Follow her on Google+ and on Twitter @deborahsweeney and @mycorporation.
One of the biggest differences between running a business on the side and quitting your job to run it full time is that you lose the security of a steady paycheck. That loss of income and the uncertainty as to whether it will ever come back is enough to make anyone pause and reconsider quitting their day job.
But what if your part-time venture is beginning to pick up steam, and you earnestly believe that it needs your full, undivided attention? While it can be scary, there are steps you can take to make such a leap less daunting.
When you begin your business in earnest, take time to reduce your clutter. Working out of a messy office will eat much more time than it takes to get everything organized.
Speaking of time, making the transition to full-time business owner means also becoming much more self-motivated and coordinated. There is no one to remind you to clock in or to hound you about being late.
It’s great to go about the day without being micromanaged, but be careful. It’s just as easy to slip into a state of complacency. Organize your space, set a schedule and stay disciplined.
There is always going to be some element of risk involved in whatever you decide to do next. But there are also actions that a new full-time business owner can take to reduce some of that risk.
As a part-time owner, chances are high that your business is a sole proprietorship — sort of the default business structure. Unfortunately, that means that you are responsible for your business’s debts, and if things go south, debt collectors may start trying to take your personal assets to pay for those business debts.
When you jump to full-time, consider forming an LLC or S corporation. There are different advantages and disadvantages to these structures, but they will help protect your personal property by separating you and your business’s debts.
Make saving a priority
Take full advantage of that steady paycheck for as long as you have it and save. Anyone looking to branch out and start a business has to use every cost-cutting measure out there so they have breathing room when trying to get their new business to turn a profit. Advisers typically recommend having enough saved up to pay for four to six months of living expenses. Luckily, if a business is being run part-time, it may be pulling in money already.
There is no magic number for saving — it just needs to be enough so that you don’t have to dig for change to pay your electric bill. Meet with an accountant, crunch the numbers and make sure you’re comfortable with the recommendations they give on budgeting and working with your financial situation.
Part-time owners know their company can draw customers, sell a product or service and bring in money since it has already been doing just that. This insight makes it very tempting to throw caution to the wind and jump into full-time ownership without making the necessary preparations.
But don’t take a huge leap without ensuring your fall is cushioned. Take your time, get everything in order, protect your assets and meet with an accountant to solidify a plan. Next, take a deep breath and put in your two weeks’ notice — you’re now a full-time business owner.
Mark Zuckerberg, Steve Jobs and Sir Richard Branson — the methods they use to run their businesses are so unusual, so against what we typically expect from a CEO, that exposés on their leadership style make for pretty good stories.
But recently, I’ve found it odd that the behaviors of CEOs warrant entire articles. After all, I talk with business owners and managers every day who exhibit what would be considered unconventional traits. More than ever, CEOs are beginning to break the stuffed-suit stereotype for a chance to create a business culture that one day might also be emulated.
Of all the business fads and leadership traits I’ve seen go in and out of style, I am particularly fond of the following three:
Leaders who know when to be led.
It might sound counterintuitive, but people who run businesses have a reputation for being a little thickheaded and stubborn. I’m sure you’ve had a boss in your career that no matter how many times they asked people for advice, they never actually took it. People like having their opinions confirmed. So if the sought-out advice conflicts with that opinion, it tends to get ignored.
And that’s a shame because a real leader should know that there is a time to lead and a time to be led. The managers and employees of a particular department were hired because they brought a certain level of expertise about the department to the business.
When a CEO asks for feedback, they need to actually take what is said into consideration.
Managers and CEOs who give their employees a bit
of breathing room.
Our social media manager likes to let her employees have a bit of downtime while on the clock. For her, it’s important that they have some time to rejuvenate their minds as blogging requires constantly producing new and interesting content.
That downtime can be spent scrolling through Reddit, checking out their Tumblr dashboard, cleaning out their Gmail accounts, whatever they want to do, as long as the time is spent on something that isn’t work.
Typically, having that bit of time helps them break out of routine and ruts that can result in bad writing. The same can be said for those in less creative positions.
For example, someone in sales could get a little too used to saying the same thing over and over again. Suddenly their pitch starts to sound scripted, even if they never had a script to go off of in the first place. Potential clients can pick up on how stiff their speech is, but a quick break away from work to recharge their batteries can help loosen them up.
Leaders who help employees have a life.
There are always things you can do to make your business more profitable — really leaning on your employees to increase their sales, for example, might bring in a little bit more money. But it ends up sacrificing their peace of mind if you push too heavily. Employees will begin to dread coming into work. And when they are at work, they will be a frayed ball of nerves.
In order to achieve long-term success, business owners need to remember that they have to hold onto reliable employees. If businesses have a high turnover rate and are constantly training and retraining people, they’ll never have a chance to grow. Once again, things will stagnate, and that can spell the death of a company when sales inevitably slump.
There are still entrepreneurs who hold onto the old ways, believing that an iron fist and a crazed obsession with perceived profitability will lead them to success. This may be true in the short term. But the resulting turnover and general attitude of their employees will eventually be their downfall.
Deborah Sweeney is the CEO of MyCorporation, an online filing services company that specializes in incorporations and LLCs. Find her online at mycorporation.com and on Twitter @deborahsweeney and @mycorporation.
MyCorporation has always reminded me of a Russian nesting doll — it is a business that helps other business owners start their business. Along with being a tad complicated to explain, this puts me in a unique position as its CEO. I have to be an expert in starting a business, which is an inherently risky venture. I’ve seen great ideas crumble and silly concepts flourish.
I’ve seen the most dedicated become beaten down and weary after only a few days while those who were at first noncommittal to the whole “running a business thing” grasp and cling to their company through every hurdle and hardship.
So when people ask me for my No. 1 piece of advice, all I can say is “protect yourself.” You may be able to influence sales, marketing, reviews and customer satisfaction, but you cannot control them. The amount of protection you give yourself and your business is something you can control. So why would you skimp on something as rudimentary as protecting your intellectual property?
Of course I know exactly why so many people skip filing trademarks and copyrights. It costs money and can be a bit complicated. New business owners keep track of every single cent that they spend — I know I did. You don’t know if you’ll even be able to break even when you first start out, so why would you want to send a fat check to the United States Patent and Trademark Office so early on?
Well, you should. I’ve had plenty of clients who have failed to protect the trademark or brand they spent so much time building. They always say the same thing — that once they are making more money, they’ll think about filling out the paperwork. Then, out of the blue, a competitor is using their intellectual property. And that same competitor has filled out paperwork with the USPTO.
It may sound like a campfire story, but it really does happen. We aren’t talking about million-dollar corporate behemoths here. This kind of thing happens between the smaller guys whether it’s two tow-truck drivers in the same town, a couple of restaurant chains or a pair of small Internet start-ups.
Typically, no one involved has the money to bring an infringer to court and prove that they were the first ones to use that particular image or name. So the infringer gets the trademark protection and the infringed has to start from scratch. It’s annoying, and a bit underhanded, but it happens.
Trademarks and copyrights are a lot like insurance — everything is fine until you need it. Then, if you don’t have it, the costs are astronomically higher than what you would have spent on the policy in the first place. “But it won’t happen to me,” you may say, scoffing at the prospect of filing protection for your little brand.
Maybe it won’t, but what if it did? Would you be willing to put as much blood, sweat and tears into building the same level of respect and trust for your new brand? It might not even be a question of would you — it might be one of could you.
We sometimes forget, or choose to block out, how much effort it took to really get our businesses started. It takes a lot out of a person, and I’m not sure if I’d be able to devote that much of my focus and energy again if the original object of my efforts was stolen.
So here is my mantra, repeated to every new business owner seeking my sage wisdom: Protect yourself early and thoroughly. Don’t wait until it is too late, or you have a bit more money or whatever other excuses you might have come up with.
Protect your business, your intellectual property and your future sanity now.
Deborah Sweeney is the CEO of MyCorporation, an online filing services company that specializes in incorporations and LLCs. Find her online at mycorporation.com and on Twitter @deborahsweeney and @mycorporation.
If there is one thing running a business has taught me about being a leader, it is that you have to know when to step back and allow your company to run without constant meddling. Everyone has a story about that one manager who would check in every 30 minutes to make sure everyone was “on task” or the executive who seemed to have lost any human compassion toward people who weren’t sitting around a large, wooden table during a meeting.
Back in April, I was looking to hire a new salesperson to shore up numbers down on the floor. I had an interview in the afternoon right after my son’s baseball game and so I rush into the office in a baseball cap and jeans to meet a potential hire. I see a young woman, fresh out of college, in a pencil skirt, pinstriped blazer and new pumps.
She introduced herself, her name was Heather, and we talked about the position she was interviewing for and her previous experience.
Heather was a writer by trade and had been working for a small ad agency, but she said she just couldn’t handle it anymore. I couldn’t help but laugh as she described her bosses; two nasty egomaniacs that demanded employees beg for their office’s bathroom key and would pump the most horrible music out of the office speakers. It was a sad story, truly, but I just couldn’t believe that people like this existed. They sounded like fairytale trolls.
Personally, I’ve forged some of my strongest employee relationships simply by sitting back and letting them do what they know best. Part of this is really about trusting yourself to make the right decision. If you choose to hire a slacker, then you either have to hound them to make sure they work or fire them. I am running a successful business, so I know I’ve made more good choices than bad ones. If you’re in the same position with your business, chances are you’ve made quite a few good decisions as well.
Part of that success, at least in my case, was making sure I act as more of a guiding force than a totalitarian dictator. After putting in the amount of training that a new employee requires, the last thing I want is for them to run off because of something like a bathroom key.
Of course, that is an extreme example. But I do know other business owners who go home ripping out their hair because their employees aren’t following the strict guidelines they set out. Micromanagement rarely works. It just puts undue pressure on everyone involved.
I’m already running in and out of the office, meeting with aspiring entrepreneurs and trying to spread the word about my business. If I had to sit on the floor and coach people in sales as well, I’d lose my mind.
Heather, by the way, didn’t get the sales job. I made her head of our new social media department, a position she was much better suited for. I trusted my instincts, stepped back and let her blaze her own path in the office and I couldn’t be happier with my decision. So my sagely advice is to remember to not let your leadership position go to your head. Do what you do best. Run your business and give your employees the space necessary to make you proud.
Deborah Sweeney is CEO of MyCorporation Business Services Inc. She is an advocate for protecting personal and business assets for all consumers. With her extensive experience in the field of corporate and intellectual property law, Sweeney can provide insightful commentary on the benefits and barriers to incorporation, as well as who should consider incorporation and trademark registration. Sweeney received her juris doctorate and MBA degrees from Pepperdine University and is a member of the American Bar Association. She also serves on the Board of Regents at California Lutheran University. For more information, go to www.mycorporation.com