Hi again. I have an inspiring story for you.
It was 1982, and a young man named Kenneth Cole wanted to launch a shoe company.
But, like many entrepreneurs, he had no money. He thought about going to U.S. banks and factories for capital, but feared that this was a long shot for him.
So, instead, he found a small Italian shoe production facility that had been hit hard by the 80s economy and desperately needed more clients. The company offered Kenneth a line of credit, and they immediately started manufacturing shoes.
But now, he had to figure out how to sell them.
So here's what he did (in his own words):
"At the time, a shoe company had two options. You could get a room at the Hilton [during the NY Shoe Expo] and become 1 of about 1100 shoe companies selling their goods. This didn't provide the identity or image I felt necessary for a new company, and it cost a lot more money than I had to spend. The other way was to do what the big companies do and get a fancy showroom in Midtown Manhattan not far from the Hilton. More identity, much more money too.
I had an idea.
I called a friend in the trucking business and asked to borrow one of his trucks to park in Midtown Manhattan. He said sure, but good luck getting permission. I went to the Mayor's office, Koch at the time, and asked how one gets permission to park a 40 foot trailer truck in Midtown Manhattan. He said one doesn't. The only people the city gives parking permits to are production companies shooting full length motion pictures and utility companies like Con Ed or AT&T. So that day I went to the stationery store and changed our company letterhead from Kenneth Cole, Inc. to Kenneth Cole Productions, Inc. and the next day I applied for a permit to shoot a full length film entitled "The Birth of a Shoe Company."
With Kenneth Cole Productions painted on the side of the truck, we parked at 1370 6th Avenue, across from the New York Hilton, the day of shoe show. We opened for business with a fully furnished 40 ft trailer, a director (Sometimes there was film in the camera, sometimes there wasn't), models as actresses, and two of New York's finest, compliments of Mayor Koch, as our doormen. We sold 40 thousand pairs of shoes in two and a half days (the entire available production) and we were off and running.
To this day the company is still named Kenneth Cole Productions, Inc. and serves as a reminder to the importance of resourcefulness and innovative problem solving."
Creativity enabled Kenneth Cole to gain financing and massive sales. Without these creative ideas, we wouldn't know the name Kenneth Cole today.
As an entrepreneur, you are most likely blessed with lots of creative energy. Keep a notebook handy and write down all your ideas. Don't only think of ideas for great products and services, but for financing, marketing, sales, operations, etc.
There are no limits to what you can achieve when you come up with ideas and execute on them.
To join a very creative mastermind, visit http://www.AndrewBarden.com and click on my button to connect with me on LinkedIn
Thursday, October 30, 2008
Hi again. I have an inspiring story for you.
Thursday, October 16, 2008
Hello. If you are thinking about starting your first business, writing a business plan can seem, ...well... overwhelming! If you feel you are not a researcher and writer, you'll likely want to hire someone who "plays" at doing those things. If you are a good researcher and writer, here are some tips that will help you develop a much better business plan. The more thorough and better written the plan, the more likely you'll both greatly increase the speed and amount of sales as well as significantly increase the likelihood that you'll get funded.
Looking for start up capital? Well, lately, just about the only banks giving businesses loans are those that are guaranteed by the Small Business Administration (SBA). Soooo... if you are smart, you'll visit your local SBDC (Small Business Development Center) and get your first draft of a business plan reviewed by trained experts.
Ok. So, here are the tips, written in the order of a typical plan outline. Keep in mind that the executive summary may be placed in the beginning but it is always written in the end, after you've written almost everything else.
Tip #1: What sets your apart from your competition? What is your Unique Selling Proposition (USP)?
Think about the number of business plans your readers must plow through each day (if they are angel investors, venture capitalists, or bankers). An average venture capitalists, for example, usually sees about 1,000 plans a year and likley invests in up about 10! What distinguishes yours from the rest of the stack?
Highlight the qualities that set you apart from all the other businesses early on in your Executive Summary. Put your winning concept up front and make sure your readers get it. Really emphasize that you've done your marketing research and concisely explain why you will dominate your particular market (with sufficient capital to send the message out, of course!).
Tip #2 The eye loves white space. Give your words breathing room.
Separate out your summary into paragraphs that mirror the sections of your business plan, giving at least 1/2 an inch of white space between each topic. It gives the reader's mind a chance to breath. Summaries are best written very dense, with the lease words possible to say the most important things. So, the reader will want to take a moment to soak it in. Give them the white space to take a "mental breath" before taking on the next big gulp of information.
Tip #3 Inc and grow rich.
If you are presenting a business plan to someone other than your friend or relative, be sure to have incorporated already. Have your incorporation information listed in the Company Description section of the website. Telling the reader that you have yet to incorporate could lead them to think that you're not taking your business seriously. When you show that you have at least an LLC (which can later be converted to a C Corp or S Corp), then they see that "you mean business." Now, which state to incorporate in? Did you know that there are good reasons NOT to incorporate in the state in which you currently reside? Talk to a good business attorney and ask about which states give the most protection in court. Also, never sell more than 49% of your stocks unless you are willing to give up all control to other stock holders.
Tip #4 Milestones show maturity.
You'll want to develop a history of your company that makes you look smart. You'll want to list milestones that you've already achieved. For example, show a chronology of the following, providing the dates of when you:
Completed your prototype
Shipped your first product
Secured major accounts / customers
Secured key strategic partnerships
Reached a significant sales level
You'll want to indicate at what phase of development your company is currently. Choose one of the following that best describes where you are:
Seed Company: The business concept is developed, but the product or service is not yet finalized. Not yet making sales.
Start-Up: In the early state of operation. Securing first customers.
Expanding: Established company adding new products, services, or branches. Rapidly increasing sales growth.
Stable: Established company with modest ongoing sales growth.
Retrenchment: Consolidating or repositioning product lines. Little or no sales growth.
Tip #5 Avoid Disclosing Sensitive Information
Be careful about putting highly proprietary or technical details in your plan, even if your reader has signed a non-disclosure agreement. You can present these details at a later stage of discussion.
Tip #5 Research, Research, Research - spot trends before they take you out of the game
Researching industry trends enables you to provide facts supporting your claims for your company's potential success. You'll need to show that your industry is growing instead of dying or flat. Even more convincing are sales figures for similar companies in the industry.
Tip #6 Invest in Yourself
Most lenders and investors want to see that the business owners have already made a significant personal financial investment in their own company. Many loan programs require owners to contribute 20 to 30% towards any funds sought. So, make certain you highlight the amount of money--as well as the time and other resources--you've already committed to your company.
Tip #7 Targeting your Market Shows Exactly How You'll Reach Certain People
A strong target market definition is:
Definable: It identifies the specific characteristics potential customers have in common
Meaningful: These characteristics directly relate to purchasing decisions
Sizable: The number of those potential customers is large enough to sustain your business.
Reachable: You can affordably and effectively market to them and have proven they will respond via cost effective marketing campaigns.
MORE TIPS TO COME... that's it for now, but, I'll post more tips soon... be sure to sign up for my RSS feed
Monday, October 6, 2008
Hi again. I wanted to give you... especially if you are a new entrepreneur... some tips that will greatly increase your likelihood of succeeding in your new venture.
The entrepreneur needs to study psychology to be most effective. Sure, it is possible to be lucky enough to offer the right product at the right time to the right people. And you may even have done years of research to understand your market. But, you really need to understand yourself if you are going to consistently take the right actions in the right order to produce the results you want in your business.
Everything begins in thought—how often have we heard those words? The question remains, are your thoughts supporting your success, or are self-limiting beliefs and behaviors sabotaging your growth? There is an entire logistical approach as well as mindset to success. It isn’t merely what you do, it is how you think! Those thoughts produce the actions that lead to success.
Let’s review the basic preliminaries of the actual product or service itself:
The decision of a particular type of business to get into is critical. Focus on products or services that people want; whether they need them or not, is not an essential element, believe it or not.
Businesses that offer products or services that lend themselves to repeat sales provide a much greater opportunity for profitable sustenance and growth potential. Taking these points into consideration, don’t assume that because your product is in demand, you have yourself a winner. It isn’t the product that is the winner, it is the business that you create--it's the marketing message that compels people to take action and respond to your offer. It's the irresistible offer that is a "no brainer" exchange of value where they come out the winner.
Did you know that there are actually common practices and a winning mindset that are prevalent among individuals that have achieved huge financial success? They view opportunity and money in a very different way.
My team and I have actually isolated key differences that separate achieving mindsets from the mass majority. Where do you stand?
1. Take a moment and reflect on your thoughts concerning money.
Are you critical of wealthy people? Do you feel guilty when people give you money? Are you uncomfortable? Those feelings are actually limiting your success. On some level, you will never be able to achieve the level of success that you want if you are critical or uncomfortable with the idea of wealth or making money at the expense of your customers. Reframe your product or service by feeling that you owe your prospects the opportunity to hear about your product.
2. What is your approach to failure?
When Michael Jackson was asked how he viewed failure, he told the interviewer that the word failure did not exist in his vocabulary. Many of us are irrationally, immobilized by a fear of failure.
Whether it is a thought fulfilling prophesy or simply blocking our attempts to achieve, failure is weakened through an active mindset of focus and persistence. A plan of action, strategy, and effort combat this immensely debilitating and self-sabotaging belief.
3. How well do you influence? Do you have the ability to influence affectively and with integrity? Are you hesitant about selling?
Become knowledgeable as to establishing rapport and understanding how and why individuals buy. One key filter is big picture thinking verse the detail-oriented person. Filters can help you to determine how people may react. Realizing that your customers may need finite details or prefer to be inspired through a conceptual experience is a key element to motivating your buyer to purchase.
4. Do you have the ability to take action fast?
High achievers may make a list, but they act simultaneously, not sequentially. This practice includes their approach to strategy; they implement several key factors at once.
5. Give yourself deadlines and launch dates.
If necessary, work backwards form the launch date, to ensure that the actions necessary for implementation are conducted in a timely manner.
6. Do you ascertain the lessons from each of your (opportunities for greater learning)
Take the time to assess the growth elements to your challenging experiences. Don’t repeat them. Fool hearty is doing the same thing over and over again, and expecting a different result!
7. Embrace marketing, become good at it.
Learn to write well. Always test your marketing on a small scale. Consistently try new methods in a low risk way. Marketing is essentially telling audiences about your product/service and creating demand. You are consistently branding your business with every person you meet. Understand the importance of representation and the opportunities to tell everyone about your product.
8. Know the internet.
The internet needs to be a core element of your communication. You can now find people everywhere and establish an ongoing relationship in a multimedia way. The internet is a critical communication tool. Master it.
9. Always include a high-end offering in your product offerings.
Do you have a product or a line extension that targets a wealthy audience? For some buyers, price is not an issue. Develop a high margin platinum tier. Always consider that people do not buy on price. Perceived value is the key element that induces a purchase.
10. Make the most of your time.
To grow a successful business, the bulk of your time contributes to your business vision, strategy/growth and direction, values, and disciplines. Learn to manage effectively and hire responsible team players that share your passion. Are you thinking big enough? Does your strategy incorporate your values and beliefs for your organization? Investing in these principles will enable you to be pro-active to your market. Consider that your business will come to be as identifiable as you are. Possessing a greater understanding of your beliefs and values and creating a powerful mindset enables you to create the greatest opportunity for success. Ideally, this conceptual understanding to your business is a powerful strategic tool that enables
you to grow your business through a culture of authenticity and individual purpose. Don’t leave your business to guesswork and “fly by the seat of your pants” mentality. Decide to be profitable, learn from the success of others and be pro-active.
There are two kinds of people in the world: those who make excuses and those who get results.
An excuse person will find any excuse for why a job was not done, and a results person will find
any reason why it can be done. Be a creator, not a reactor.
-- Alan Cohen, A Deep Breath Of Life
Let me know if you found this post compelling. I'm available to coach you through your first year as an entrepreneur. Register for a risk-free one-on-one telephone session with me at www.AndrewBarden.com
Sunday, October 5, 2008
1. Make basic mistakes: If you leave out key info or get basic facts wrong, you'll mess up your entire business plan. Your readers will then begin looking for other obvious mistakes in your research and will discredit your ability to understand your position in the market and how to reach your target audience. Do your homework so you're familiar with standard industry practices. Educate yourself about distribution channels, price mark-ups, regulations, and legal and accounting matters. One error can ruin all your projections and assumptions.
2. Underestimate the competition: The worst thing you can say in a business plan is "There is no competition." No matter how unique or terrific your product or service, if you don't have competition, it means there's no market for what you're selling. Be sure to consider potential future competition once you've proven the concept.
3. Overestimate sales: When you launch a product or service that's better, faster, or cheaper than the competitions', it's natural to assume customers will beat a path to your door. They won't. Be realistic, even conservative, about how difficult it will be to build a customer base and how long it will take.
4. Plan more than one business at a time: Even though your business may eventually have a number of revenue streams, concentrate on one part of it at a time. Show you can be successful in one area before branching out.
5. Go it alone: Nobody can build a successful business alone. Strategic alliances, particularly with strong existing businesses, can improve your chances of success. And if you want your business to grow, you'll need to attract and keep capable management and personnel. Show you can work well and creatively with others to leverage your resources.
6. Use "phantom" numbers: Don't use financial projections just because they sound good. Don't use "boilerplate" numbers: industry averages might not apply in your situation. Be able to substantiate where you got your numbers and why you made your financial assumptions. Always overestimate expenses and underestimate income.
7. Forget a "Sources and Use of Funds" statement: Financing sources want to see exactly how much money you'll need, how you intend to use it, what money you're contributing, and whether you are expecting to get funds from other sources. If you don't include this information in a clear, concise format, you'll confuse potential investors or lenders.
8. Omit an exit strategy: While you may plan on running your business forever, others who invest in your company want to know how they'll get their money out. It's usually not enough for them to just get an annual return; they will want a way to make their original investment "liquid."
9. Lie: This is the best way to get a business plan rejected, increase the chances of your business failing, and ruin your reputation. While every business plan is developed with a certain degree of optimism, when the plan becomes fiction, you're in trouble.
10. Under-develop the psychographic profile of your ideal client/customer: Money comes from people making decisions. If you don't thoroughly understand the decision-making process of your preferred client or customer (the person who is most likely to buy what you are offering), you are setting yourself up for low ROIs of your marketing capital.
Entrepreneurship in today's constantly changing business environment requires an understanding of cutting edge small business technology and the ability to harness it to generate enterprise growth and profitability. You'll want to take advantage of all the free help you can get, both from the government (http://www.SBDCnetwork.com), non profits like SCORE (http://www.SCORE.org), and local community colleges and universities that offer free or low cost training events.
I'm part of the Los Angeles Regional Network of SBDC, consulting and training people in how to write business plans, develop effective marketing and sales strategies, and general business diagnostics and turn arounds. I'm proud to say that our District Office lead all 68 SBA offices nationwide in providing $1.23 billion in capital to more than 5,100 entrepreneurs and furthered economic development through approximately 30,000 jobs that were either created or retained as a direct result of our help. We also led in financing 3,065 minority-owned businesses in the ammount of $617 million and 1,275 women-owned businesses for $200 million. Additionally, we assisted 64,000 individuals in 2006 with business training and procurement services.
So, what does all of this mean for you? If you're not working with your local SBDC (http://www.SBDCnetwork.com), you're missing out on A LOT of help!
And, if you are not sure if you have what it takes, a thoughtful SBDC counselor can help you do a self-assessment as part of your ongoing counseling they provide, FREE OF CHARGE! You've already paid for the program through your tax dollars, you might as well use our services!
For 54 years, the US Small Business Administration has been a key resource for small businesses across our nation, funding local SBDCs and providing an amazing amount of helpful online and printed content. I urge you to take advantage of the many products and services your local SBDC provides. If you are looking for financing, business counseling, federal procurement opportunities (where the federal government buys from you), or you need help attaining the certifications necessary to compete in today's marketplace, then you'll want to stop by your local Center. You can locate yours by visiting http://www.SBDCnetwork.com
Like most any non-profit or government organization, when you work with an individual in that group they may be great or they may be less than great. It is hit-or-miss. But, just know that it is worth finding that "diamond in the rough," that person whose talent and sincere interest in your success actually makes the difference. So, don't be disheartened like I was many years ago when I made my first appointment with an SBDC counselor in Pennsylvania who turned out to be a dud. Since then, I've not only had amazing counselors but have become one myself, so I know that these positions do attract very effective business counselors.
It is easy to get excited about serving the small business community. People walk into our offices with such energy and hope and talent that you know they will do whatever it takes to succeed! And it usually requires that kind of attitude and persistence in order to make any new business work or to begin to dominate the market and grow your existing business.
Small businesses like yours are the lifeblood of our economy. Did you know that? Small business owners create between 60 to 80 percent of the new jobs in America. It isn't the big businesses that make up most of the GDP, it is the work of small business owners. They help drive our economy, transform communities, create jobs, and e3nable people to realize their dreams. What dream businesses do you want to start?
At the SBDCs, our goal is to help small businesses by giving the mthe tools they need to succeed. Curious about what we can do? Visit: http://www.SBDCnetwork.com to learn more. Whether you are starting or expanding a small businesses and need help developing a business plan, targeting clients that make you more money for your time, or establishing a budget or need additional training (don't you just LOVE to do bookkeeping!) (tee-hee), or you need technical or financial assistance, the SBDCs are here to help.
You see, the role of government is to create an environment in which the entrepreneur can flourish, in which minds can expand, in which technologies can reach new frontiers. Serious, hard-working and successful small business owners create wealth for themselves, their investors, and their employees. Their creativity, hard work, and productivity have combined to produce the most vibrant economy in the world (it's only the banks that have made it unstable lately).
Your local SBDC (Small Business Development Center), one of over 1,000 offices nationwide, are accessible via one of America's largest resource vaults for supporting small business owners at http://www.SBDCnetwork.com. Register for free, watch some training videos, write a business plan, apply for a loan, and a whole lot more. We're here to help.