Tuesday, August 31, 2010

Friends and Family: Largest Startup Funding Source

By Adam Hoeksema

According to a report distributed by the Angel Capital Education Foundation, total startup funding from venture capital funds, state funds, and angel investors totals approximately $20.8 billion annually. Surprisingly, friends and family contributed nearly three times the amount of capital to thousands of startups each year. With approximately $60 billion in startup funding coming from friends and family, entrepreneurs must consider this as an option as they seek to launch new businesses.

Money issues between friends and family can ruin relationships. Due to the risk involved with investing in a startup, if you are requesting investment from friends and family, be sure to consider these five steps before you begin the capital raising process:

  1. Prepare a pitch. Just because you are requesting investment from your mom or a group of your college buddies doesn’t give you an excuse to be unprofessional. Take this opportunity and the potential risk taken by your investor seriously. Do your homework, and prepare a professional, persuasive and passionate presentation. You want your friends and family to buy into your vision, not just hand over some cash because they feel obligated or pressured.

  2. Have a game plan. When you are seeking angel investment or venture capital investment, you will need a strong business plan, but do you really need a business plan for your friends and family? Instead, you might consider a vision, strategy, and tactics plan. You will start by developing a vision for the future of your business, then strategies to reach your vision, and finally day-to-day tactics to accomplish your strategies. For example, assume that you have a vision of becoming the leading online retailer of picture frames. One strategy may be to utilize search engine traffic to bring in customers. Finally, you will develop tactics such as building quality links to your website through social media and professional article writing to boost your rankings in the search engines.

  3. Have an exit strategy. Angel investors and venture capitalists want to know how you intend to grow their investment. They want to know when and how you intend to repay them, with interest. Your friends and family should be no different. Although you want to disclose the fact that investing in a startup is risky, you should also outline a detailed strategy for the investor to exit profitably. Maybe you will structure the capital as a high interest loan, or maybe they will own a percentage of the business and be repaid through the profits. No matter the structure, you should have a detailed plan for repayment.

  4. Consider making it official. Depending on the size of the investment you may consider hiring a lawyer to file the necessary paperwork to make everything official. Obviously this will give the investor peace of mind, and it should help you in the future as you seek angel investment. Making it official gives you credibility for future rounds of investment. Remember to use judgment though, if your buddy is going to invest $10,000, and the legal fees amount to $2,500, you may want to resort to a firm handshake.

  5. Follow through. Again, investing in a startup is risky, and your friends and family probably know that, but they should expect to earn a return on their investment. Don’t view this capital as a gift, instead follow through with what you promised. If things don’t go exactly as planned, be sure to communicate regularly so that they know what to expect. If at all possible, follow through. If you fail to deliver as promised you risk your entire relationship and your ability to raise capital in the future.

As you seek capital for your startup don’t neglect the $60 billion opportunity represented by friends and family, but tread carefully as you risk something far greater than the failure of your business--your relationships.

Today's guest blog is by Adam Hoeksema, founder of the ExecutivePlan. Adam is the author of a blog that primarily assists entrepreneurs in the process of writing powerful executive summaries, preparing elevator pitches, and hurdling the many obstacles encountered during the startup phase of a business. His blog is http://www.theexecutiveplan.com .


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Saturday, August 28, 2010

Reinvent But Don’t Eliminate Your Staff Meetings

By Ernst Gemassmer

Most of us view weekly staff meetings today with a degree of trepidation and frustration. Without clear expectations, two-way communication, and effective execution, they are too often a waste of time for all participants. Many have suggested that it is time re-engineer this process, or eliminate the meetings entirely.

In an old survey on staff meeting obstacles conducted by GroupSystems, I found the following not-so-surprising statistics for the average 50 minute staff meeting:

  • Much time wasted on inefficient process – over 30% of the total time
  • No meeting minutes or decisions recorded – 59% of the cases
  • Nothing usable gained from meeting – 68% of respondents

These kind of statistics are often used to suggest that staff meetings be eliminated, but I don’t agree. I would assert that these meetings are necessary to run a company of any size, and should not be considered a necessary evil. The alternative is pure chaos, or purely autocratic leadership.

The opposite of chaos is some type of democratic leadership, which I would argue requires regular meetings of all teams at every level, on a regular basis. In my experience, these can be very productive for all concerned if the following basic principles are followed:

  1. Communicate the time, purpose and process. The CEO or team leader who sanctions the meeting must set expectations clearly and often. People need to know what they are expected of provide and communicate, what they will hear, and when to be there.

  2. Schedule in advance, and stick to the schedule. Schedule meetings at least one to two weeks in advance, include start time, stop time, and topics. Start on time, even if everyone is not present. Demonstrate respect for the people who show up on time by beginning promptly. Individuals that come late can 'catch-up' later.

  3. Don’t delegate and don’t derail your own meeting. Except in an emergency, you should show up on time, conduct your own meetings personally, or cancel the meeting. There is nothing so frustrating or ineffective as a meeting run by a surrogate, used for personal tirades, or dragged off track by a vocal member.

  4. Everyone has a voice, with a moderator for action items. I recommend a fixed agenda segment where each attendee distributes and discusses a one page written report. The report is to follow a specific format including progress, problems, and plans. Action items are logged by the leader or scribe.

  5. If decisions are required, close the loop on each one. A group decision does not require a total group consensus, but it does require a process that is agreed, understood, and followed by all. How many meetings have you left where no one knows what was decided, or worse yet, everyone has his own view of the outcome?

  6. Moderate the discussion and the filter agenda items. Staff meetings are definitely not the place to discuss individual performance (handing out praise is fine), or spending time on specific projects that relate only to a few individuals. It is the place to communicate goals for the following period, and acknowledge accomplishments for the past period.

It may well take you several weeks to reinvent your staff meetings along the lines recommended above. However, you will quickly note that the team will cooperate more than before, and will more likely surface critical issues, determine alternatives, and avoid surprises.

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Today’s article is presented by one of the founders of our Startup Professionals team, Ernst H. Gemassmer. He resides on the West Coast, and has long helped entrepreneurs there, as well as providing turn-around assistance as interim CEO, and International coaching. You can contact him directly at ernst@startupprofessionals.com .


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Thursday, August 26, 2010

Funding Your Startup: Are You a Zero or a One?

By Akira Hirai

Startup funding is a binary event. In the binary language of computers, a zero represents the “off” state and a one represents the “on” state.

When I say that funding is a binary event, I mean that there are only two possible outcomes: either you succeed in getting funding, or you don’t. You win or you lose – there is no second place. All or nothing.

If you are an entrepreneur seeking capital to grow your business, let me explain why this simple concept should drive some important choices you will need to make.

Chances are, acquiring capital is an important part of your growth strategy. Many elements must be present to create a successful venture, and capital is usually one of them. If you don’t succeed at raising capital, there’s not much point in trying to build the business.

It should be obvious, then, that you should do everything in your power to maximize your chances of raising the necessary capital.

This means you need to do two things. First, you must create a venture that an investor will want to invest in. Second, you must communicate the opportunity to potential investors in the most compelling manner possible. Value creation and value communication.

Value creation is about filling a real need in the market in a way that allows you to enjoy some sustainable competitive advantage. This is what entrepreneurship is all about.

Value communication is about helping capital providers see the “Aha!” moment quickly, before they lose interest, followed by a clear and thoughtful expression of the value you’ve created. This is usually in the form of an elevator pitch, an executive summary, a pitch deck, a financial forecast, and a business plan.

Every shortcut you take in value creation and value communication reduces your chances of raising the capital you need to execute your vision.

Most funding sources – both investors and lenders – have a nearly endless supply of deals to choose from. They have no incentive to try to fix a flawed deal. They are looking for obvious reasons to say “no” because that moves them closer to the bottom of the haystack. And once they say no, they almost never give you a second chance.

You may think you’re being smart by cutting corners and saving a few bucks here and there. After all, until you’ve secured outside capital, you’re still funding things out of your own pocket. Thrift is usually a good thing.

But think about this: if you do things on the cheap, there’s a much greater chance that you’ll never get that outside capital. That means that everything you’ve put in up to that point – your time and money – will have been wasted. Poorly executed value communication gets you nowhere.

As an entrepreneur, one of the many things you’ll need to become very good at is picking priorities. You need to assess risk vs. reward; cost vs. benefit. Some things, like legal matters or the business plan that serves as the foundation of your venture, are worth doing well. They are investments you need to make in your venture before you’ll get an outside investor to take you seriously. If you hire an outside vendor to help you, be sure to check credentials and track records, and hire the best person you can.

Fund raising is a tough game. You want to do everything you can to be the “one” and not the “zero.” If you’re going to do it, then do it well and give yourself a fighting chance. All or nothing.

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Today's guest blog is by Akira Hirai, founder of Cayenne Consulting, a firm that helps entrepreneurs prepare for the fund raising process by developing strategies, business plans, financial forecasts, and presentation materials. His website is http://www.caycon.com.


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Sunday, August 22, 2010

Lon Safko – Entrepreneur, Inventor, and Author

Lon_Safko_TSMB A couple of weeks ago I was privileged to meet Lon Safko, probably most recognized as the author of his best-selling book “The Social Media Bible.” In reality, he is also a serial entrepreneur, inventor, and international speaker. Lon is the founder of 14 companies, 19 inventions, and he holds three patents. His “First Computer To Save A Human Life,” and more than 30,000 of Lon‘s papers are in the Smithsonian in Washington, D.C.

Marty: Welcome to Startup Professionals interviews. Tell us what you do these days.

Lon: I’m just getting ready to release my updated book “The Social Media Bible Second Edition” and I just started a new company last week called Extreme Digital Marketing. I’m also a professional speaker so I have been traveling around a lot.

Marty: Tell us a little bit about your entrée into the world of entrepreneurs and some of your companies.

Lon: Being an entrepreneur is my real passion. I have always been an entrepreneur. I think the first sign is that I was really a lousy employee (laughter). I’ve never been able to stay with a company for more than three years; that seems to be the max. But I love being an entrepreneur. I’ve built 14 companies. My most recent was Extreme Digital Marketing. And I’ve also been very lucky.

I developed the first computer to save a human life. That was a company that I ran the longest. I was first to do voice recognition and environmental control. You see that little thing called “tool tips” where when you click on or move your cursor over a button a little window pops up and tells you what it does. That’s mine.

Marty: Which do you enjoy most – the entrepreneur role, author, or speaker/educator?

Lon: You know I enjoyed all of it! I love being an entrepreneur, and building my speaking career is also an entrepreneurial venture. That’s another company that I actually happen to run and it’s got its own set of books and I love that.

But you know what I love the most about all of this is just really helping people. I love to share experiences and about what I’ve done wrong in my career. And that list is actually bigger than what I’ve done right! And if I can help other people become successful and follow their passion…!

Marty: Is there anything in your personal background that drove you to the accomplishments that you have made?

Lon: You’ve heard the term, “The school of hard knocks?” When I was 17-years-old I was living out of the back of my car and I thought it was a big deal when I moved into an abandoned house! So that was my beginnings. But you know, I just got out there and put myself through college by working at part-time jobs, and after I graduated college I started my first company. I was an engineer so I started a surveying company, because that’s what I knew.

But then the other thing was the marketing side of it. I got really passionate about that. I just got my most recent patent about a week ago, on three-dimensional Internet advertising! Staying on the cutting edge of marketing is how I got into social media.

Marty: What do you think is the most difficult challenge for new entrepreneurs to get over?

Lon: The first thing is really, truly understanding your product; knowing it well enough to not have “blue sky syndrome.” It’s going to take twice as much money and twice as much time and nine out of 10 businesses fail.

You’ve got to have capital or know how to bootstrap it. You’ve got to know how to market; you’ve got to know how to sell. That was one of the things that I had to learn early on. I’m good at a lot of stuff and I’m proud of it, but I’m not good at everything. So early on I had to identify what my weaknesses were and then surround myself with those kinds of people who brought that kind of value.

So it’s getting that balance, and too many entrepreneurs think they can do it all.

Marty: How has the social networking world changed since you started your first book on the subject?

Lon: There is more noise and confusion. The one thing I think is really important is having a good strategy. Just because you send out a couple of Tweets and you are on Facebook; you have to have some kind of logical strategy. You’ve got to have a goal, a conversion strategy. From a huge arena of different kinds of tools, we're now down to Facebook, Twitter and blogs…these are the three most important things. And you need to understand those three and you need to know how to integrate them with conventional marketing.

Marty: Any advice you would like to give to someone contemplating a startup?

Lon: Follow your passion! If you are passionate about it you will be successful. If you are doing it for the money or if you are doing it because you don’t want to work nine-to-five in the long run you are not going to have what it takes. Then, as you heard earlier, don’t give up. You cannot lose if you don’t quit!

Build a business plan first. I strongly recommend it because going through that process is amazing, and if you are looking to build an advisory board, if you are looking for investment capital you, have to have a well-prepared business plan.

Marty: Lon, thank you very much for your insights and your continuing role-model leadership for all of us, and best of luck in all your ventures! For more, you can contact Lon directly via email or his personal website.

Marty Zwilling

Extended interview video or audio only...


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Saturday, August 21, 2010

Strategy and Tactics Make Dreams A Reality

By Ernst Gemassmer

Some entrepreneurs are so caught up in their dream that they jump immediately into implementation, with no focus on strategy and tactics first. The result is that when they hit the first obstacle (and there will be many), it seems like the end of the road. They don’t have any idea which way to turn.

Based on my own experience, there is real value in spending time early on building the overall strategy and tactics for your business, before you charge ahead. These are key to transforming your vision into a solid written plan, soliciting the initial funding, and adapting to required changes during implementation.

Here is a summary of the steps I recommend along the way:

  1. Turn your dream into a vision. What is the difference between a dream and a vision? A dream is a fantasy, while a vision has to be grounded in reality. You have to think about your dream, discuss it with friends, partners, and experts until it finally becomes more definitive and concrete. Thus, your initial dream gets turned into your personal vision.

  2. Convert your vision into a strategy and plan. With the help of trusted friends and associates you can now convert the vision into a written plan with a definitive strategy. Now the vision has become understandable to potential funding partners. They can clearly see that you have done your homework, understand the marketplace and have assembled a virtual team, i.e. a real team, subject to funding.

  3. Find friends, Angels, or VCs to fund your plan. Count on numerous presentations and pitches, but the next step is to convert your vision into a detailed strategy for implementation, and obtain the initial funding you need. Even with this vision and strategy, you still won’t see and be able to navigate many of the obstacles ahead.

  4. Now is the time to develop tactics to support your strategy. This is where your leadership is critical in working with the new team on implementation tactics. During this process you are looking for affordable space, defining the roles of your team members, defining the product/service, developing initial sales channels and customers. These efforts are time consuming and take all of the energy you and your new team can muster. Don’t get lost in the details and loose sight of the overall strategy.

  5. Change tactics, adapt the strategy, but don’t lose the vision. You, the founder and leader of the new team should periodically sit back and remind yourself of the ultimate objective and the strategy to reach this goal. Do not fail to review the assumptions underlying your initial strategy. If one or more of the key assumptions have changed, do not fail to adapt your strategy, modify your tactics, and iterate.

In my own experience I have at times been frustrated by fundamental changes affecting my business, which I did note in passing, but failed to properly evaluate. Of special importance are changes in the following areas: technology, competition and new legislation affecting your planned business. Pay attention to change signals at every step.

My recommendation is for you to pursue your dream, develop a vision, followed by a strategy and hopefully successful implementation. You as the leader should lead your team from the front, by sharing your vision, strategy and tactics. It is fine to modify or change implementation if the overall situation changes, as long as the ultimate goal is still achievable and meaningful. In leading from the front you will focus on adapting your tactics to achieve success, rather than looking for something or someone to blame for a failed dream.

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Today’s article is presented by one of the founders of our Startup Professionals team, Ernst H. Gemassmer. He resides on the West Coast, and has long helped entrepreneurs there, as well as providing turn-around assistance as interim CEO, and International coaching. You can contact him directly at ernst@startupprofessionals.com.


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Wednesday, August 18, 2010

Six Management Strategies That Work With Gen-Y

What positives does Gen-Y (Millennials) bring to your startup, and what management strategies will work most effectively and productively with them? Everyone is quick to point out their shortcomings and idiosyncrasies, but I see some attractive attributes from a business perspective, including the following:

  • Confidence. Raised by parents believing in the importance of self-esteem, they characteristically consider themselves ready to solve the world’s problems and leap tall buildings.
  • Goal and achievement oriented. Some Gen-Y team members will arrive their first day with personal goals already documented. They expect a workplace that is technically challenging, creative, fun, and financially rewarding.
  • Collaborative. Gen-Y is used to being team organizations—and are taught that no one is left behind. A minor consideration is that their favorite collaboration tool is Facebook.
  • Multicultural. They expect to earn a living in a workplace that is fair to all, where diversity is the norm—and they’ll use their collective power if they feel someone is treated unfairly.
  • Civic-minded. They were taught to think in terms of the greater good. They have a high rate of volunteerism. They expect companies to contribute to their communities—and to operate in ways that create a sustainable environment.

Your challenge, then, is to capitalize on these positive attributes in your business. Here are six management strategies and work recommendations which I believe you will find good for your business, as well as effective in attracting, retaining, and motivating all workers, including Gen-Y:

  1. Provide real leadership. This generation has grown up with parents who were role models, and provided structure and supervision. Gen-Y is expecting to find leaders with honesty and integrity. It’s not that they don’t want to be leaders themselves, they’d just like some great role models first.

  2. Challenge your employees. Gen-Y wants learning opportunities. They want to be assigned to projects they can learn from. A recent Randstad employee survey found that “trying new things” was the most popular item. They’re looking for growth, development, a career path.

  3. Foster family relationship with workers. Gen-Y says they want to work with people they click with. They like being friends with coworkers. Consider setting up a mentoring and reverse mentoring program to foster relationships between workers of different generations.

  4. Make the workplace fun and enjoyable. A little humor, a bit of silliness, even a little irreverence will make your work environment more attractive. Lay out the office so that Gen-Y finds it easy to interact with peers and share ideas.

  5. Show respect to everyone. Gen-Y expects their approaches and ideas to be treated with respect, even though they are new and inexperienced. Assign projects to teams of people who are measured as a group for specific goals. They love praise as the highest sign of respect, so use it constructively.

  6. Be flexible. The busiest generation ever isn’t going to give up its activities just because of jobs. A rigid schedule is a sure-fire way to lose your Gen-Y employees. Take advantage of the lessons already learned by many startups, who have flexible work weeks, flexible start times, and work at home opportunities.

In this struggling economy and highly competitive business environment, companies around the world recognize that the differentiator is their people. The Gen-Y is here – you can’t ignore them. Make your Gen-Y people your competitive edge.

Marty Zwilling


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Monday, August 16, 2010

Michael A. Wolf – Angel Investor and Entrepreneur

Mike Wolf picture Mike Wolf is a mentor of mine, and a role model for many technology entrepreneurs and investors in the Phoenix, Arizona, area. He is a 26-year software veteran who has survived both startups and big companies. More recently, he has invested in numerous local startups, while mentoring and advising hundreds of young entrepreneurs. He was recently nominated for this year’s Arizona Governor's Celebration of Innovation Lifetime Achievement Award, which honors an individual who has greatly impacted the technology industry in Arizona (vote for him here).

Marty: Welcome to Startup Professionals interviews. Tell us what you really do these days.

Mike: In general, I help young companies with their execution strategies. This usually involves some level of CEO advising/mentoring, business plan development, market definition, money raising, team building, etc. I am active on a number of Boards of organizations that support entrepreneurship. I chair the Selection Committee of the Arizona Angels, and have been an active Angel investor as General Partner of Lobodos Ventures over the last thirteen years.

Marty: How many different entrepreneurial roles have you experienced in your career?

Mike: My first job out of school was with Ross Perot’s Electronic Data Systems (EDS). Although it grew to be a very large and successful company, at the time, the culture was extremely entrepreneurial. At Capex, the company was in a post startup phase, but growing rapidly in the independent system software marketplace. We eventually sold the company to Computer Associates, beginning the consolidation phase in the enterprise software space.

At Viasoft, we started with a unique product idea, raised venture capital from world class VC’s, sold into a virgin market, created a world-wide operation, completed a successful IPO, and generated a $1 billion market cap. Vitrix was started in an old tanning salon. We eventually raised money by taking it public, and after several M&A transactions, still exists as several entities today.

Andigilog was bootstrapped by a close friend, developed some initial products, had to resort back to contracting to pay the bills, raised significant outside venture capital, and then was eventually sold off. AttachSoft started with a novel idea, raised $7M in venture funding, but then closed its doors within months of the financing, returning much of the capital raised.

My knowledge and experience is clearly the result of both successes and failures.

Marty: When did you know that you were first destined to be an entrepreneur?

Mike: I’m not sure I ever thought about being “destined” to be an entrepreneur. You just make the leap when you have the chance. At the same time, I believe the environment and the culture that you’re exposed to can dramatically affect when and if you decide to “go for it”.

Marty: Are you willing to share any personal challenges you were able to overcome to get to this point?

Mike: I didn’t grow up in an entrepreneurial family or an entrepreneurial environment. I had to seek out entrepreneurial companies and build relationships with key entrepreneurs, especially here in the Silicon Desert (pun intended).

Marty: What’s the most challenging aspect of being an entrepreneur these days from your perspective?

Mike: Absolutely no question, raising outside capital for your venture. With the IPO market virtually dead, the Venture Capital industry shrinking dramatically, Angel investors reeling from losses in real estate and the economy, and lending institutions doing anything but lending, it’s very difficult to raise money, even for quality deals.

Marty: What’s the most challenging aspect of being an investor?

Mike: With initial startup funds so difficult to obtain, and with no assurance of follow-on financing, the risk to early investors is overwhelming.

Marty: Any advice you would like to give to someone contemplating a startup?

Mike: Be honest about the quality of your idea and your own personal strengths. Surround yourself with high quality people. Learn how to be a great salesman. Be persistent.

Marty: Mike, thank you very much for your insights and your continuing role-model leadership for all of us, and best of luck in all your investments! You can contact Mike directly via email or his personal website.

Marty Zwilling


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Saturday, August 14, 2010

Nine Keys To A Winning Startup Channel Strategy

By Ernst Gemassmer

Once you have succeeded in developing a solution and obtained initial funding, the next challenge is to penetrate the relevant domestic and international markets. For that, you need to implement a winning distribution channel strategy. Common channel strategies include direct to customer, distributor, and joint venture arrangements.

For many markets these days, the channel owns the market. In other words, you may have the best product, but no distribution means no business. Here are the steps I recommend to face this issue successfully, and effectively build or align with productive channels:

  1. Finalize an overall ‘go to market’ strategy before you begin. It is absolutely essential to map out a ‘go to market’ strategy that works for your industry and product. Use this as a roadmap to guide and measure your successes and failures.

  2. Evolve the channel strategy as you grow. The simplest way to start is to identify channel partners (also known as distributors) to handle your business in specific and well-defined geographic regions. As you business grows you will need additional channel partners. You may also want to consider establishing joint ventures or even wholly owned sales channels, but proceed slowly because it is difficult to unwind joint ventures.

  3. Avoid exclusive arrangements. Potential channel partners will do everything possible to obtain an exclusive relationship with your company. You may want to give a channel partners a head start of a certain time period. Avoid exclusive arrangements if at all possible. In many countries terminating an exclusive arrangement can lead to an expensive legal process.

  4. Deal with channel conflict openly. Channel conflict is inevitable as you add additional sales channels. Also, if a US customer exports a significant amount of your product into another market, the local partner may complain. The best recommendation is to openly confront and discuss arising channel conflicts with your partners in a businesslike manner. Generally, conflicts can be resolved in an amicable manner.

  5. Change distribution partners only when required. When a channel partner does not meet his obligations, despite proper training, management and consultation, a change should be considered. Ensure that termination is amicable and is in line with your contractual (distribution contract) obligation as well as in line with local legislation.

  6. A distribution partner is a true partner. Some of the advantages of a distribution partner are the following: thorough understanding of local markets and customers, as well as ability to finance his purchases, thus improving your own cash flow. In addition the partner can assist in product localization as well as providing essential, in country product support. In exchange for all partner services, they generally receive a discount of up to fifty percent from prevailing US list prices. Ensure proper product and technical training.

  7. Recognize local laws governing channel partners. All channel partner relationships should be based on written distributor contracts. This contract should be identical for all channel partners, since you would not be able to manage numerous individual contracts. Resolution of disputes should be in your home territory, but obtain local legal advice to ensure that your contract is not in conflict with local legislation.

  8. Joint ventures work but require dedication. Once a local market has developed, you may wish to have more direct participation in another specific market. This can be achieved through a joint venture. Assuming adequate financial resources, the distribution partner could be a good candidate for a joint venture. However, be aware that you will need to dedicate significant human and financial resources to a joint venture.

  9. A wholly-owned channel is expensive but warranted at times. Assuming that your joint venture is a success and yet you desire more control, you may wish to consider buying out your venture partner. At that point you will control the business in totality, with all the challenges and rewards related to doing business in another geography.

My advice is to proceed cautiously and logically through the steps mentioned above. You will enjoy the exciting ride, even though at times it will feel like an out of control roller coaster.

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Today’s article is presented by one of the founders of our Startup Professionals team, Ernst H. Gemassmer. He resides on the West Coast, and has long helped entrepreneurs there, as well as providing turn-around assistance as interim CEO, and International coaching. You can contact him directly at ernst@startupprofessionals.com.


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Wednesday, August 11, 2010

Entrepreneurs Can’t Afford To Be Email Deadbeats

Like it or not, email is still a major business and personal communication vehicle, just like telephone calls. Your business and your integrity are being judged every day by your responsiveness to emails, and no one likes to do business with a dead-letter box. Unresponsive people and businesses lose friends and customers quickly.

If you are one of the “new generation” who simply doesn’t do email, then don’t publish an email address, and delete all email accounts. That way, people won’t send messages, or at least will get an undeliverable notice to trigger follow-up.

The real problem is people who only check their email every few weeks, have ten different email addresses, or have thousands of messages queued in their in-box for storage. Every one of these is a sure-fire way to lose customers and get tagged as a personal deadbeat.

On the positive side, there are some things you can do and should do to manage your email effectively, and be seen as a responsive friend and business:

  • Reroute little used accounts to your primary address. Every reputable email system has a mechanism for rerouting email from a secondary address to one that you monitor daily. Many systems, such as Outlook, allow you to receive from multiple addresses into one inbox. Use it.
  • Use the inbox for staging, not storage. You should move emails needing work to an “Action Items” folder, or a “Read Only” folder, or completed items to a “Log” folder. At the very least, use the “flag for follow-up” feature. Otherwise important items will be overlooked, and you will be discouraged by the sheer volume of items in front of you.

  • Set response time and follow-up goals. I have a personal objective of getting all email messages out of my inbox within 24 hours (like returning every voicemail within 24 hours). Any feedback like “Received your request, but need a couple of weeks for research” will make you a hero. Then just follow-up as promised.

  • Use the auto-response feature. If you are leaving for two weeks of vacation or away on travel, and don’t want to handle email, activate the auto-response feature to instantly reply to every email with “On vacation for two weeks, will respond when I return.”

  • Watch out for aggressive spam filters. We all know that one person’s spam is another person’s favorite joke or message. I recommend you select the most un-aggressive settings, so you have to delete a few extras, but don’t miss an important message.

  • Look for buried questions in your email. Although one could argue that this is the sender’s problem, you can avoid being the bad guy by looking hard for a question or issue that might suggest a response. Some people bury questions in a long message, which you thought was info only, and then tag you for not responding.

The key here is to put yourself in the other person’s shoes. How many times have you sent an email to the contact or support address for a business (info@company.com), never to receive a reply? What a great way to lose customers and friends!

Everyone is busy these days, but we all know people who are “so busy”, but never seem to get anything done, or even answer emails. I subscribe to an old management principle that you should handle mail only once, meaning just do it, don’t shuffle it.

Managing your email queue is just one aspect of time management, and poor time management is a startup killer. Another killer is to get your business or yourself defined as a deadbeat. The opposite of dead is responsive. Be there all the time, every time, and you will be ahead of the pack.

Marty Zwilling


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