Written by Jay Turo on Wednesday, January 15, 2014
As has always been the case, most commercial and neighborhood banks only lend against quickly “liquidatable” assets or at a small multiple of historical cash flow.
Given that most startups and small businesses have neither of these, for them attaining traditional bank financing has such a low probability of success that it is rarely even worth the time to pursue.
So, where should the creative and committed small business owner go for funding when the banks say no?
Here are three places to look:
1. Crowdfunding. Donation - based crowdfunding platforms like Kickstarter allow entrepreneurs to raise capital from one's social and professional networks.
And Equity-Based Crowdfunding, approved by Congress in April 2012, is very close to being through SEC rule-making.
While investor appetite will take time to develop, as it does the available pool of investable angel and venture capital (currently approximately $50 billion annually) will expand dramatically, and in turn closing the gap between the tens of thousands of companies seeking capital and the investors interested in providing it.
2. Family and Friends. Since time immemorial by far the most popular funding source for new and small businesses is to ask those that know you best to stake your entrepreneurial journey.
For sure it is emotionally loaded, as so many of us don't want to mix our personal and professional lives, but it does provide a great “gut check” as to how serious, committed, and “sold” you really are on your business.
Well, it is one thing to lose the money of strangers, quite another to do so of Uncle Jed who you'll be seeing each holiday season.
A way to “reverse the frame” in these family and friends dialogues is to recognize that while yes, a relative or friend is doing you a big favor by investing in your business, you in turn are returning the favor and more by providing an opportunity for an outsized investment return along with the unique excitement of being a stakeholder in a small business.
3. Sell Services. Especially for technology and consumer product companies, the long pathway of research, product development, and establishing distribution mean that often years can go by in the dreaded “pre-revenue” stage.
So as opposed to relying solely on investment capital to “deficit finance” this gestation period, how about generating some cash through selling consulting services in the interim?
As examples, a company building a new and proprietary mobile application could in parallel build apps for others, a new restaurant could do catering, or a consumer product business could sell research services regarding their market niche.
And, if structured right, in addition to paying the bills, consulting projects like these can also be utilized to iterate one’s product development forward.
Use these three strategies - and do so as with all matters related to starting and growing a business with creativity, determination, and persistence - and soon you will be laughing all the way to the bank.
This blog post is a reprint of an article written by Jay Turo in Vistaprint.com’s Small Business Blog.
Written by Dave Lavinsky on Wednesday, January 15, 2014
“Social proof” is a critical psychological principle that savvy business owners can use to dramatically increase sales and grow their businesses. The principle simply states that people are more likely to do something when they see others doing it. For example, after entering a new restaurant, customers are more prone to sit down and eat if they see others in the restaurant versus if it was completely empty.
Interestingly, there’s one famous example when the power of social proof caused unintended and negative results. The example was Nancy Reagan’s ‘Say No to Drugs’ campaign in the 1980s. While the campaign hoped to decrease drug use, the opposite actually happened. Yes, teen drug use actually increased in the 1980s as the campaign implied that many teens were using drugs. This social proof made other teens think it was ok if they tried drugs too.
On the other hand, there are countless examples of using social proof for benefit, such as the following:
1. Social Proof from Other Users/Customers
Showing other users and customers is the most common form of social proof. Here are some examples:
- Showing the number of Facebook Likes you have
- A bartender placing a few bills in their tip jar at the start of their shift
- A bouncer at a bar not letting everyone inside (even when there’s room) so a line forms outside
- Taping pictures of customers on your store’s walls
Even more powerful is when you get your customers to invite their friends to become customers. Hotmail did this extremely effectively by putting “join Hotmail” advertisements in the footer of all email messages. This prompted Hotmail to grow from 500,000 users at the start of 2007 to over 12 million users by year’s end. Likewise, allowing friends to invite friends to play through Facebook helped Zynga grow over 10 times, from 3 million to 41 million average daily users, in just one year.
2. Social Proof from Experts
This form of social proof is when you show approval of your product or service from credible experts.
I used this form of social proof when marketing my book, Start at the End. Specifically, I received, and subsequently promoted, reviews from several experts such as: Marshall Goldsmith, Kevin Harrington, John Jantsch and Brad Feld among others.
A similar example is Sensodyne toothpaste promoting that “9 out of 10 Dentists Recommend Sensodyne” for sensitive teeth.
3. Social Proof from Celebrities
An estimated 25% of television commercials in the US now use celebrities. For example, you’ve probably seen Catherine Zeta-Jones promote T-Mobile over the years. You may have also seen Beyonce promoting milk and William Shatner promoting PriceLine.com.
Even if you don’t have the funds to afford to big celebrity, you can use this form of social proof to your advantage. For example, when luxury pillow manufacturer Pillo1 received positive publicity from Oprah on Oprah.com, Pillo1 effectively showed this on their website.
4. Social Proof from Research and Past Results
Showing research and past results gives positive social proof to spur new customers to buy your offerings. Here are some examples:
- Showing customer reviews and testimonials (in print and/or preferably video format)
- Offering star ratings on your product or service (ideally your ratings are good)
- Before and after photos from past clients (we see this all the time in weight loss advertisements)
- Internal research: the following message in a hotel, “Almost 75% of other guests help by using their towels more than once,” had 25% better results than any other message tested.
- Industry research: for example, promoting “a study by the American Institutes for Cancer Research that eating whole grains can reduce your risk of cancer,” gives positive social proof to customers.
5. Social Proof from “Borrowed Trust”
A final form of social proof is when you “borrow” trust from other brands. Examples of this include:
- Using a “buy button” that looks similar to Amazon.com’s famous buy button
- Being a member of a popular association (e.g., a gun manufacturer promoting that they’re a member of the NRA)
- Having a seal such as the Good Housekeeping Seal of Approval or Cheerios cereal stating “Certified by the American Heart Association” on its boxes
As you can see, there are numerous ways to use social proof to influence others to take the actions you want. Use these examples as a starting point in brainstorming ideas to leverage social proof in your business. And then use the other proven marketing tactics to take your business to the next level.
Written by Dave Lavinsky on Sunday, January 5, 2014
It was not very long ago that the United States Postal Service was the only means by which to ship physical packages in the US. While this service had been invaluable, its quality had progressively declined over the years. Letters were lost, packages were damaged and customer service was nearly non-existent. This opened the door for private corporations to pick up the slack.
FedEx was hardly the first private parcel delivery service but it quickly became the market leader. With regional, national and international services, FedEx has been filling the need for a reliable way to send packages. Over the years it has expanded its reach through acquisition of similar companies as well as adding retail locations.
FedEx’s success has been due to the satisfaction of both its customers and employees. When a customer hires FedEx, they know their package will be delivered on time. And the company’s competitive employee benefits and professional work environment have created an army of loyal employees that are fully dedicated to the company’s mission.
Combined with an intense focus on the quality of their work and a close relationship with customers, FedEx has become synonymous with quality and dependability.
The Big Screen
FedEx’s commitment to quality and excellence is typified by the movie Cast Away, starring Tom Hanks. This movie, released in 2000, tells the story of Chuck Nolan, a systems analyst for FedEx. His job of resolving problems and improving service sends him on a trip to Malaysia. During the flight, a storm hits and the plane goes down. Chuck finds himself washed up on the shore of a deserted island with nothing but a few damaged packages.
After four years on the island, Chuck resolves to make an escape. Building a raft from material he scavenged from the area, he is rescued by a passing cargo vessel. The only possession he manages to save is an unopened and, as yet, undelivered FedEx package. The final scene of the movie shows Chuck delivering that package, late but still intact.
The most surprising aspect of this movie is that FedEx paid absolutely nothing for the product placement. In fact, upon hearing of the plot of the movie, FedEx was reluctant to give its approval. After reading the script, however, the company realized what a great marketing opportunity this movie really was. FedEx had become so well known for its dedication to service and reliability that an entire movie was built around it.
Lesson #1: A Culture of Excellence
FedEx gained its reputation through a culture of excellence, from top to bottom. While there are multiple aspects to this company, they are all overseen by a main office that focuses on keeping the machine running smoothly.
Even the character portrayed by Tom Hanks had the responsibility of analyzing the entire system and improving its functionality. This dedication to excellence is part of why FedEx is as powerful as it is today.
FedEx strives to offer the best possible experience to all its constituents. From corporate employees to delivery personnel and even retail location customers, FedEx has become known as a corporation which never settles for mediocrity. This commitment to quality is so pervasive that it has become a part of the entire brand itself.
When a customer sees the FedEx logo, they know they are dealing with a company that will do what it promises, no matter what challenges it faces.
Lesson #2: Driven to Improvement
Here is another little known fact about FedEx: when the fax machine became a standard, FedEx’s business declined by 50%. FedEx had a choice: fold or evolve. It studied the market and made a simple realization – not everything can be faxed.
FedEx redesigned its model to focus on documents that required a live signature and packages. Then it catapulted itself to the top of the food chain by making deliveries fast and reliable.
FedEx has never stopped trying to improve what it does. Every step of the process is constantly analyzed and there are employees who exist only to refine and improve the way in which people send and receive packages.
One reason why FedEx has been so effective in accomplishing this is because it really listens to it customers. The company understands how important customer satisfaction is and strives to give customers exactly what they want. From its inception, FedEx saw a need and filled it, and then it kept working hard to fill that need in a better way.
Lesson 3: Checks and Balances
All of FedEx’s improvements, however, would do little good if they were not constantly monitored. Before it was rebranded as FedEx, the logistics of the company was overseen by FDX. Over time, it acquired a few more logistics companies and formed FedEx Global Logistics.
This portion of the company was created to oversee the vast operations of all the subsidiary organizations. Creating this allowed the company to consolidate the entire command infrastructure to better ensure that constant improvements were implemented correctly.
There are redundant processes in place to track even the smallest package. If a package is at risk of being misdirected, alarms go off. Think of your own business. If you were about to miss an appointment, what systems are in place to let you know and allow you to correct the problem?
The FedEx Test
Every business can learn a lot from FedEx. Nearly every business can be improved in many ways and there are a few simple questions that can help get a smart business owner on the path to FedEx’s level of success.
1. Is work delivered on time? Delivering packages on time is one of the most important elements in the success FedEx has enjoyed. When work is promised on a given deadline, customers and clients are relying on that promise.
No matter what it may be, all deadlines need to be followed as strictly as possible. This will help build a reputation for dependability and will create a group of loyal customers.
2. Is the quality consistent? Customers need to know that a company will always produce the same quality of work. It is imperative that quality be a main focus of any business.
Fluctuations in quality are the surest way to lose any loyal customers. If clients and customers cannot rely on consistent quality they will turn to a competitor who is more reliable.
3. Is improvement ongoing? Every business can be improved. Redundancies can be consolidated, procedures can be simplified and processes can be refined.
Constantly improving a business is an important aspect of long-term success. Markets will always change and customers will always want more. Improvement is something that should be a part of your daily operations and every employee needs to be engaged.
4. What do the customers think? The best barometer of success and satisfaction is your customers. If a business is not listening to its customers then all improvements are simply theoretical.
Offering incentives to encourage customers and clients to fill out surveys and questionnaires is one of the easiest ways to find out how they feel about your business and what they would like to see in the future.
Not up to writing a survey? Then pick up the phone and call your last 5 customers. Be friendly and ask them what they thought of your service. Avoid interrupting them. Listen, take notes, and do not argue. If you get a poor review, apologize and make it right.
Putting your business to the FedEx test is a great way to find out how to turn a good business into a great one. These simple questions will often reveal weaknesses in your company while offering suggestions for improvement.
By following the lessons of FedEx, smart business owners can set themselves up for long-term success based on a reputation for excellence and a solid base of loyal customers.
Written by Jay Turo on Monday, December 30, 2013
This time of year offers many blessings - one of them being the pageantry of New Year’s Day college football.
I am excited to be rising before the sun on Wednesday and traveling to Pasadena with my six and seven-year old sons to their 1st Rose Bowl parade.
In the spirit of the day and of the year soon to be left in our care, here are a few of my favorite sports quotes that apply so well to the challenges and opportunities of life and business.
"Great moments are born from great opportunity…You were born to be hockey players -- every one of you. And you were meant to be here tonight. This is YOUR time.
- Coach Herb Brooks, 1980 U.S. Olympic Hockey Team Soviet Pre-Game Speech
My comment: this is the time and age of Entrepreneurs! Go for it!
"Funerals End Today”
- Marshall Coach Jack Lengyel, addressing the remaining members of his football team not long after 75 people, including most of the team and coaching staff - died in a 1970 plane crash.
My comment: Lengyel reminds us that the best to way to honor those that have passed is to live, to strive, to win.
"Leaders aren't born, they are made. And they are made just like anything else, through hard work. And that's the price we'll have to pay to achieve that goal, or any goal."
- Vince Lombardi
My comment: Hard work is the given, the base. It is a high value in itself and accomplishments of greatness and meaning are impossible without it.
"Don't measure yourself by what you have accomplished, but by what you should have accomplished with your ability.”
- John Wooden
My comment: To those to whom much is given, much is rightfully expected. We live in a global, golden age of opportunity. Think, dream, and do BIG!
Happy New Year, and may 2014 be the best year of all of our lives!
Written by Dave Lavinsky on Sunday, December 29, 2013
Today I thought it would be helpful if I detailed what I do at the end of December each year. This works very well for me, and I hope it will for you too.
1. Look back at the past year
The first thing I do is look back at the past year. I start with the annual goals that I set at the beginning of last year. Which goals did I accomplish? Which didn't I?
Next I go through each of my monthly goal documents. Fortunately my team and I create monthly goals each month. Seeing what our goals were in March 2013, for example, is very interesting. Perhaps more importantly, when I go through the monthly goal documents, I see just how much we accomplished this past year.
2. Be grateful
In viewing last year's annual and monthly goals, I'm never fully satisfied. That's just my personality, since I set aggressive goals that are hard to attain. So, chances are (and it's true again this year) that I didn't accomplish everything I had hoped for during the year.
But rather than focus on that, I always take a moment to be grateful for that which we DID accomplish. I think about all the hard work and all the great things we did do in 2013. I also like to think about how much better the company is now than it was 12 months ago.
3. Look ahead
Next I like to revisit my long-term goals. That is, where do I want my company to be in 5 years? Importantly, since I do this exercise annually, I simply pull up my answer to this question from last year. I decide whether my long-term goals have changed, and why. I then document my new 5-year goals.
I then work backwards to figure out what I must accomplish next year. I start by asking what I need to accomplish in 2014 to make it a great year and to put me on the path to achieving my long-term goals.
I think about financial metric goals such as the revenue and profits I'd like to generate in 2014. And I look at the business assets I must create in 2014. I think about what new products I must create in the coming year. I assess how many new clients I'd like to bring on. I document how many new employees I should recruit hire, and train in the next twelve months. And so on.
4. Plan out the year
I then start mapping my 2014 goals in a Gantt chart so I know exactly what has to be done and when. I document what I must accomplish in January, in February, and so on. Sure, I'll never get this exactly right, and during each month next year, I'll adjust my precise monthly goals. But this exercise gives me a great handle on what's possible to achieve in 2014.
A lot of what I've described herein is goal planning; setting goals, trying to achieve them, and then assessing your results. Importantly, goal planning takes practice. That is, the more often you set goals, try to achieve them, and then assess results, the better you get at setting goals that you actually can achieve.
As a result, every year I set and assess goals, I get better at planning out the next year, understanding what I can and cannot accomplish in 12 months, and maximizing my productivity so I build a great company. I hope you are able to do the same for your company. So plan out your long-term goals and 2014 goals now, and I wish you the best of success in achieving them!
Written by Dave Lavinsky on Thursday, December 19, 2013
Both Crowdfunding and Peer-to-Peer Lending are great new ways to raise money for your business. Below I explain the differences, and some of the advantages and disadvantages of each. I end by determining which is better.
Peer-to-Peer (or P2P) Lending is one person lending money to another person at a pre-defined interest rate. It's basically debt capital without the bank or traditional "middle man."
The benefit of P2P Lending is that 1) the interest rates are typically lower, and 2) the likelihood of getting the loan is greater than the likelihood of getting a traditional bank loan.
There are several popular websites that connect borrowers and lenders directly. The biggest two are:
The downside of P2P lending is that you need to repay the loan and that there are limits to how much you can raise (generally only $25K at a time).
Crowdfunding is raising money from the "crowd" or general population. In Crowdfunding, you don't need to repay the amount raised. Rather, you give rewards (usually the product you want to develop) or equity to those who fund you.
The most established rewards-based Crowdfunding websites are:
- Kickstarter is the largest Crowdfunding site. The downside of Kickstarter is that not every project is accepted and they charge a success fee of 8% in the event you get funding.
- Rockethub is primarily for funding creative projects. Their network is not as large as Kickstarter's, but is still pretty big. They accept more projects, and also have a success fee of 8%.
- GoFundMe is a large and growing Crowdfunding site. It is unique in that it doesn't charge a success fee if you get funded. GoFundMe does charge a $9 fixed monthly fee.
- IndieGoGo is another very large Crowdfunding platform. It has more creative (e.g., film, music) projects than some of the other sites.
On the equity side, Crowdfunding if still extremely new and still only limited to accredited investors (expect this to change shortly). Crowdfunder is one of the leaders in the equity based Crowdfunding market now. We will see how it grows and other sites pop-up as non-accredited investors enter the market in 2014.
So, Which is Better?
I prefer Crowdfunding over Peer to Peer Lending because of the potential to raise more money through a larger group of people, and not having to pay the money back. I also like that all the people who crowdfund you 1) are potential future customers, and 2) can spread the word about your business.
However, the two funding sources are NOT mutually exclusive, so definitely consider using BOTH Crowdfunding and Peer to Peer Lending, since both are great forms of funding.
Suggested Resource: Do you want Crowdfunding? If so, don't try to raise it from scratch -- the 14-step blueprint already exists. Get the Crowdfunding blueprint here.
Written by Dave Lavinsky on Tuesday, December 17, 2013
Your website is a critical component of your marketing strategy. If set up properly, your website can be the source of tons of new customer leads. And even if they hear of you elsewhere, in many cases, customers will still visit your website to learn more about you.
So here are 5 quick and easy ways to make your website more effective.
#1: Establish a blog
Setting up a blog is the easiest way for you to continually add new content to your website.
And each piece of content you add is another opportunity for someone to do a search (on Google.com, etc.) and find your company.
Also, your blog posts can be used to show your subject matter credibility, and further prove to prospective customers that you are the best provider in the market.
#2: Promote your blog posts
In addition to adding new blog posts (ideally once per week, and at a minimum twice per month), make sure to promote your posts.
You can promote your posts by posting them on Facebook, Twitter and other social media sites.
Your goal is to drive more traffic to your blog posts. Also, try to get visitors to comment and/or ask questions about your posts. And then, respond to their questions and comments.
Finally, remember that each question posed by your visitors may be a great topic for a future blog post.
#3: Create videos
Particularly if you don't like to write, create videos.
Videos that teach prospective customers how to do something are extremely valuable. And they can be used to "soft-sell" your product and/or services.
For example, let's say you offer carpet cleaning services. A short video teaching people how to tell if their carpet is in need of cleaning would be extremely valuable. And, people who watched it would be prone to purchase your service.
#4: Add sharing buttons
Particularly if the content on your blog is good, make sure it's easy for visitors to share it.
You can quickly and easily accomplish this by adding buttons that allow people to share your posts on Facebook, Twitter, LinkedIn, StumbleUpon, and other social media networks.
This is how blog posts go viral; by making it easy for others to share them.
#5: Make your website mobile and tablet friendly
More and more people are visiting websites from their mobile devices and tablets. But not all website look good on these sources.
Make sure your website does. If it doesn't, there are some inexpensive services that manage this for you. Such services can tell when a visitor is not coming from a desktop, and will automatically push them to a version of your website (which they create and host) that is more mobile/tablet friendly.
Each of these five tips can be implemented very quickly and easily. And they will result in more customers and sales. So make completing this a priority.
Suggested Resource: Want to learn my complete strategy for methodically maximizing your online traffic, leads, sales and profits? Then check out my Ultimate Internet Marketing System.
Written by Dave Lavinsky on Friday, December 13, 2013
Publicity is an extremely powerful form of marketing. Not only is it free, but it gives you and your business great credibility. Specifically, when potential customers hear about you in the media sources they read/watch/listen to, it gives you incredible legitimacy in their eyes.
And perhaps most importantly, it gets customers to find you and purchase your products and/or services.
There are many ways of getting publicity. And when you do get it, there are several varieties. For example, a journalist may give you a simple quote in their article. Or, they may quote you several times or attribute the entire theme of their article to you. Or, in the best case, they write an article solely about you, your company and/or your products or services.
The key point to note, even though it may be obvious, is that the more the article talks about you, the more likely the reader will seek you out after reading it.
One concern many entrepreneurs and business owners have when first considering publicity is what the journalist will write about you. However, you really shouldn't worry about this. The journalist will nearly always position your company in a positive light. But even if they don't, the saying "there's no such thing as bad publicity" is generally true.
Importantly, there's one way to accomplish both the goals mentioned above: getting publicity (particularly articles) that fully discusses you and your company AND gaining 100% control of what the article says about you.
This way is to write the article yourself.
Articles are a great way to spread the word about your company. And there's no advertising cost; just the cost of writing the article which is minimal.
What should you write about in your article?
The best articles are often short "how-to" articles teaching customers something they want or should know about.
Where should you send your article?
Send your articles to relevant newspapers, magazines, trade journals and bloggers.
Importantly, add a "bio box" at the end of your article. Your "bio box" includes your name and contact information (e.g., website address and possibly email address, phone number, etc.) so readers can easily contact you.
How to get started
The fastest way to get an article published is to submit it to an online article directory like www.goarticles.com and www.ezinearticles.com. On these websites, online searchers will find your article, and many will click on the links in your bio box that link back to your website.
Here are two important notes for using article directory websites like GoArticles and EzineArticles.
First, search through the sites to see the types of articles already written. Doing so will give you new ideas and show you topics that have already been covered too much.
Second, bigger media sources (e.g., magazines, newspapers) want original content. So, if you have a great idea for an article, pitch it to the more prominent media sources first. Since, once you publish it elsewhere, they won't be interested (although you could then pitch them on another article).
Getting your articles printed in media sources is a simple and great way to get your company in front of lots of potential customers. And, you control the message, and build lots of credibility.
And here's a tip to make this technique even more efficient - don't start by writing the article. Instead, start by simply creating an interesting article title. Then pitch the title to the editors of relevant newspapers and magazines to see if they're interested. You can call them and/or email them to find out. They may say your article title is right on, or they might suggest something a bit different. By following this advice, you'll save time since you'll only write articles you know they'll publish.
One final tip: if you don't like to write or aren't a good writer, don't worry. As long as you're an expert on the subject matter, simple dictate the article. There are tons of apps which allow you to record voice memos directly on your mobile phone. Then, upload and send your audio file to a professional writer on a site like odesk.com or guru.com who can turn your dictation into a well written article for less than $20.
Click here for more tips on publishing articles and getting tons of free publicity for your business.
Written by Dave Lavinsky on Thursday, December 5, 2013
When you're selling something to anyone, be it a prospective investor or prospective customer, there are two main types of selling techniques to employ: emotional selling and logical selling.
In emotional selling, you appeal to the buyer's emotions. For example, if selling a sports car, emotional selling would have the prospective buyer visualize how they will feel when they press down on the accelerator and surge forward, and how the wind will feel in their hair when they put the sun roof down, etc.
Logical selling would appeal to the buyer's logic. A more logical sales pitch, for example, would include factors such as why this sports car is better than others (perhaps better gas mileage, better warrantee, etc.) and why the prospect should buy from this dealer (perhaps better pricing, better service, etc.).
The most effective form of selling is generally to use both emotional selling and logical selling. This holds true for "selling" to investors, even very sophisticated ones.
For example, even the seasoned venture capitalist has emotions. Painting the picture that your company will be the next Facebook or Google will excite them. Getting them to think about how they will feel (the prestige among friends, colleagues, etc.) from being an early investor in such a huge success can prompt action.
However, while emotional selling is helpful, the primary selling technique to motivate most investors is logical selling. Specifically, you need to prove to them why your venture will succeed and how they will get a solid return on their investment.
To win over such investors, your logical selling argument should be packed with irrefutable market research. When you present investors with third party research (i.e., research published by sources other than yourself), they gain the confidence that your venture is in fact worthy.
So, what market research should you conduct to logically prove your case to investors? Here are the eleven core areas to answer:
1. Industry Sizing
Investors need to understand precisely how big your market is. Because if your market is too small, their opportunity for returns might also be small. So, start by determining your market size.
2. Key Market and Industry Trends
Investors also need to know the key trends in your market. For example, if the market is currently small, but it's growing rapidly, this might excite investors. Or if new government regulations have prompted industry changes that support your success, they need to know.
3. Details on Your Top Competitors
Having competition is generally a good thing; it proves that customers are buying solutions like the ones you offer. Importantly detail the strengths and weaknesses of your competitors so you and your investors know what you're up against.
Importantly, you don't have to be better than your competition in every single area; ideally you're better in the areas customers care about most.
4. Website Performance of Top Competitors
In nearly all industries, the web is a great source of leads. Understanding and detailing your competitors' performance on the web gives great insight into them and online opportunities that exist for you.
5. Link Profiles of Top Competitors
Understanding the other websites that link to your competitors is also helpful. You may want to contact and/or partner with similar companies/websites, or use their link profiles to identify other websites to contact to link to you.
6. Web Traffic to Top Competitors
Among other things, understanding the website traffic of your top competitors will show their traffic trends. For example, is one competitor's traffic rising or decreasing? Do they experience seasonal fluctuations? Etc.
Likewise, understanding which keywords are driving their traffic alerts you to the keywords for which you should focus on ranking.
7. Social Media Profiles of Top Competitors
Social media can tell a lot about a competitor. Do they have a large Facebook following? What about Twitter, or Pinterest, etc.? Understanding their social media profiles alerts you to the types of customers they are serving, and how customers perceive them, among others.
8. Detailed Identification of Key Customer Segments
Customers are the key to any company's success, and investors want to know exactly who your customers are. Importantly, identify the distinct customer segments you are or will target.
9. Demographic Profiles of Customer Segments
Once you detail which customer segment(s) you will target, you must detail their demographic make-up. For example, what gender are they, where do they live, how much money do they make, etc.? If you serve business clients, demographic variables also include the size of their company, what their title is, etc.
10. Ancillary Needs of Key Customer Segments
The final step in assessing your customers is to determine what else they might be buying before, during and/or after purchasing from you. This will help in further understanding their needs, and alert you to potential business partners to contact.
11. Financial Research
Financial Research gives great credibility to your financial model and the potential financial returns to investors. Here you should research and present your industry's average financial metrics, such as average industry costs, profit margins, etc.
In summary, when selling to investors, particularly savvy investors, be sure to appeal to their emotions. But remember that logical selling will generally be more effective. So rigorously conduct your market research so you can present facts and logic that convinces them to invest in your company. Not only will the research prove the viability of your business to investors, but it will give you great market and competitive intelligence that allows you to gain more customers and grow faster.
Suggested Resource: Click here to see a super-brief video that explains how Growthink can conduct a comprehensive 11-Point Market Research Assessment for your company.
Written by Dave Lavinsky on Sunday, December 1, 2013
The other day on my drive to work I heard a song on Pandora. The song was called "Just the Girl." And it's by the band 'The Click Five.' I'd never heard of the band nor the song, but one of the lyrics caught my attention:
"She laughs at my dreams. But I dream about her laughter"
This line caught my attention because it reminded me of two extremely important mindset principles for entrepreneurs.
1. You must separate yourself from people who laugh at your dreams
"She laughs at my dreams." Imagine hanging out with someone who laughed at your dreams. Do you think that would help or hurt you? Clearly it would hurt you. And I think it would be near impossible to achieve your dreams when surrounded by such negativity.
In fact, motivational speaker Jim Rohn once said, "You are the average of the 5 people with whom you spend the most time." This is absolutely true. When you hang out with successful people, the conversation is generally optimistic. You hear what the others are achieving, how they are overcoming obstacles, etc. And you adapt their positive thinking and can-do attitude which prompts your success.
Alternatively, when surrounded by negative people, you hear how they primarily talk about their struggles, how they blame others for their problems, and so on. You get brought down, and you start thinking negatively too. The result: you never achieve your goals.
So, the first lesson here is to separate yourself from losers and hang out with winners. There are many ways to achieve this. One of the easiest is to find and attend local business and entrepreneurial events. Another is to find a mentor or assemble a Board of Advisors. In each of these cases, you'll soon be spending time with winners, and their success and mindset will rub off on you.
2. The Law of Attraction
The Law of Attraction is basically defined as this: you get what you think about most. So, if you're constantly thinking about what can go wrong in life and/or your business, things will go wrong. But, if you constantly stay positive and think about success, you'll achieve success.
"But I dream about her laughter." In this line, the singer is thinking positively. He's dreaming about her laughing; so that is what he'll attract/get.
In your business, you do this by setting goals for what you want to achieve. Then, think about achieving your goals and do it often. Visualize yourself achieving the goals too. Doing so is proven to dramatically improve your success.
Looking at the line as a whole -- "She laughs at my dreams. But I dream about her laughter" -- you can see how clever it is. Even though she's a negative influence in general, he turns it into a positive.
Even more clever is for you to surround yourself with successful entrepreneurs. Their mentality and success will rub off on you. And set your goals and dream about achieving them. When you do these things, you'll start achieving a lot more success. You'll achieve your goals and start creating even bigger and bolder ones.
Suggested Resource: As you just learned, the way you think as an entrepreneur is absolutely critical to your success. In fact, it's arguably the most important factor in your success. Check out our Millionaire Mindset program to learn how to improve the way you think so you achieve more entrepreneurial success.
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