Written by Dave Lavinsky on Thursday, September 10, 2009
As a reader of my blog, I'm sure you're aware of my "Definitive Guide to Creative & Alternative Financing Sources." The Guide presents 28 unique ways to raise money to start or grow your business.
I knew the Guide was really good (since it took me so long to create and since buyers have continually praised it), but I didn't know just how impactful it would be.
Well, a month ago, CNN found out about the Guide, and a CNN Money Reporter contacted me.
What resulted was a full story on ONE of my creative and alternative financing sources: customer financing.
You can read the article here: http://money.cnn.com/2009/09/08/smallbusiness/barnraising_a_business.fsb/
What I liked most about the article is that Helaine (the reporter) gave numerous examples of customer financings. This will hopefully give you more ideas on how customer financing might be right for your business.
If customer financing is not right for you, or if you want to tap 27 more unique and proven alternative and creative financing sources, download Growthink's "Definitive Guide to Creative & Alternative Financing Sources."
Written by Dave Lavinsky on Friday, September 4, 2009
I recently had the opportunity to interview Jack Burkman, the founder and president of Burkman Associates LLC.
You may have heard of Burkman since he appears frequently on ABC, CNBC, MSNBC, ESPN, and many other networks. He was also a former FOX News political analyst.
Jack Burkman has been raising capital for companies using an extremely rare technique - government lobbying.
According to Burkman, money for many types of companies can be raised from congress and government agencies (e.g., Department of Energy, Department of Homeland Security, etc.).
Written by Dave Lavinsky on Wednesday, September 2, 2009
I recently had the opportunity to speak with expert entrepreneur and founder/CEO of Lending Club, Renaud Laplanche.
Written by Dave Lavinsky on Wednesday, September 2, 2009
If you are managing an early stage or growing company, it typically means that you are cash restrained.
And, as a result, you are often unable to pay employees salaries commensurate with what they would earn at larger organizations.
So, how do you manage this and hire and retain the best staff?
In order to do this, you need to understand and manage the four core factors that effect an employee's satisfaction and thus willingness to join your company and/or stay with you.
The first key factor is financial compensation, which includes the employee's salary plus benefits such as healthcare, and any significant perks. For the most part, early stage companies can't compete with larger entities when it comes to these salaries.
However, with stock options and/or profit sharing, smaller companies can better motivate employees and give them the potential to earn even more money then their large organization counterparts should the company succeed.
The second key factor effecting employee satisfaction is lifestyle. Specifically, how does your organization accommodate the employee's lifestyle? Do you offer daycare? Flexible schedules? For some employees, the ability of the employer to accommodate their lifestyle is of critical importance.
The third key factor that employees consider when assessing whether to stay with a company is how much they enjoy their jobs and coming to work every day. Clearly there are millions of workers that hate their jobs. But, for the most part, these aren't the best workers. If they were, they would have lots of other job opportunities.
It is up to the small business owner to create an environment whereby employees enjoy their work. They must enjoy working with the other members of the company, the types of work they are doing, and their work conditions. They must feel that they are a part of the overall company culture. They must get along with their co-workers, and feel their boss appreciates them and treats all employees equally and fairly. And they must receive adequate communications as to company policies and decision-making.
The final factor with regards to satisfying your employees is to ensure that they are learning and developing skills that will further their careers, whether or not their futures lie with your organization or with another organization (preferably they see advancement opportunities within your organization).
Employees need to be continuously trained and have the ability to continually learn so that they become more valuable assets. This training can be formal, and/or it can include learning from trying new tasks and projects.
It is up to the business owner to ensure that employees are given training and projects that expand and improve their skills.
As an entrepreneur and/or business owner, it is your duty to hire and retain the best staff. Since, no one person has the ability to grow a massive empire with the help of others. In building your teams, consider and constantly revisit these four key factors and make sure you create and foster and environment that gives your firm a competitive advantage in each of these areas. In doing so, you will maximize your chances of building a truly superstar company.
Written by Dave Lavinsky on Wednesday, September 2, 2009
I read a very interesting blog post the other day about "survivor bias," an important statistical principle that could greatly affect your future success.
In brief, survivor bias occurs when an analysis excludes information since that information no longer exists.
Let me give you an example...
The English forces, during World War II, sent planes each day to bomb the Germans. As you might expect, several of these planes were shot down. And, the ones that did come back typically returned with multiple bullet holes.
Now, the English obviously wanted to maximize the chances of its planes and soldiers returning home. So English engineers studied the planes that returned. In doing so, they found patterns among the bullet holes. Specifically they found lots of holes on the wings and tail of the plan, but few in the cockpit or fuel tanks.
As a result, the English added armored plating to the wings and tail.
As you might have already concluded, this was the wrong thing to do. The better decision would have been to add armored plating to the cockpit and fuel tanks. For, the planes that were shot in those places were the planes that were shot down and never returned.
The English engineers' analysis missed this data because these were the planes that they were unable to examine. This is "survivor bias"-- their inability to include this critical data in their analysis since it was unavailable or didn't "survive."
So why does this matter to you?
It matters because as you start and/or grow your businesses, you will have to hire service providers and staff. And naturally, you will want to hire those with a track record of success.
But, when you hire staff who have only worked at successful companies, you may fall victim to survivor bias. That is, they have not learned many of the lessons that individuals and companies learn when they fail.
Likewise, when you hire a service provider that claims that every one of their clients has been successful, maybe they haven't learned from client failures.
They say that you learn more from failure than from success.
While that can be debated, from personal experience I can say that I've learned a ton from both failure and success. From successes, I have learned principles and formulas that worked. The ones I strive to replicate on a daily basis.
And from failures, I have learned things to avoid. I have learned flaws in my thinking. But importantly, many of my successes have come out of failure. From tinkering ideas and plans that weren't quite working. And making them work. And, these new ideas would never have come to me had I not failed first.
Now, clearly my advice is not to hire failures or those with a habit of failure. But, likewise, it's not to hire staff or service providers who claim to always succeed. Since a balance between success and failure often provides that winning combination of wisdom.
So, the next time you are interviewing a key hire or service provider, make sure to ask about their failures. Ask about tasks and jobs that they or their companies failed at. And find out what they learned from that failure.
Ideally they are the types of candidates that learned a lot from their failures and were able to overcome them. This is because the vast majority of growing companies fail at things over and over again. It is their ability to constantly modify and improve their businesses that enables them to excel. Surround yourself with people that have this ability.
Written by Dave Lavinsky on Wednesday, August 26, 2009
According to the book "How To Be Like Mike: Life Lessons About Basketball's Best," Jordan's practice habits and conditioning regimen amounted to an "almost alarming harshness."
In fact, many experts, such as Florida State University professor K. Anders Ericsson, argue that practice continually trumps talent. Prominent examples of success attributed to continuous practice besides Jordan include:
These same practicing principles apply when you are selling your company and your products/services to investors, customers, partners and/or employees.
With regards to your elevator pitch, which is often your opening communications with all outside constituents, practice it over and over again until it flows from your mouth and causes prospects to nod in agreement and understanding each and every time.
With regards to your investor presentations, you should practice them over and over again. And when you practice them, you should think about the goals of your presentation and simulate the questions you might be asked.
For example, you should be thinking:
By practicing your presentation over and over, you will get better and better at it. Just hearing yourself saying the words out loud will help. You will hear what sounds good and what doesn't.
Likewise, you should practice your presentation on real people -- your advisors, friends or family members. And after these mock presentations, ask them to recite back to you the key points you made. Importantly, make sure they recall the key points that you want to convey. If not, continue to improve your presentation content and your delivery until it reaches perfection.
Written by Dave Lavinsky on Tuesday, August 18, 2009
I attended a great online marketing conference a few months ago and learned a lot about marketing your business via Twitter.
The key Twitter advice that was given was to treat Twitter interactions just as if they were offline in the "real world." That is, act just like you'd act as if you were meeting at a cocktail party.
For example, at a cocktail party you wouldn't go up to someone and start screaming "this is what I do" and "buy my product now." (A lot of people do this on Twitter.)
Rather, you would get to know the person, ask them some questions, and hopefully provide some valuable information and advice. This process builds rapport, shows them that you care about them, and positions them to reciprocate in the form of wanting to learn more about and support your business.
So, how does this relate to pitching investors?
Well, I recently read an interesting blog post by Nic Brisbourne, a venture capitalist based on the UK. The key message of Brisbourne's post was that entrepreneurs should pitch him as if they were pitching their best friend.
In doing so, entrepreneurs should:
Like in your Twitter conversations, it's not all about you. You need to listen to the needs of your investor audience before you pitch them. You must develop rapport. And you can't pitch, pitch, pitch. You need to slow down and deliver your pitch in a more integrated fashion (such as giving some information, allowing the investor to ask questions, and responding as appropriate).
So, before you speak with your next prospective investor, you should create a checklist in your mind. Make sure you understand the needs of the investor, make sure you ask questions and do a lot of listening, and make sure that you effectively convey your message without being overbearing.
Written by Dave Lavinsky on Tuesday, August 11, 2009
I came across a very interesting advertisement in my Sunday paper the other day.
Start learning now to start, finance, grow, and exit your company.
2) Have a monthly income of $5,000.00
Start a business. Work hard. Make it successful. $5,000/month is nothing if you have a successful business.
3) Win enough money to never have to work again
Build a successful company. Sell it.
4) See my kids do really well in their studies
Work hard in starting and growing your successful company. Because you are the boss, you can spend more time with your kids helping them. Your hard work will also provide the funds to hire a tutor as needed.
5) Be on TV
Once you've started that successful company I've mentioned a couple of times- hire a good PR firm.
6) Attract men/women
Working hard and being successful will give you the confidence to better attract members of the opposite sex.
In fact, the majority of things on this "wish" list...
Written by Dave Lavinsky on Monday, August 10, 2009
Several months ago, I came across YouNoodle, a website which offers tools and a platform to help startup companies succeed. What I was initially drawn to was their Startup Predictor tool. The idea of a tool that could help predict the success, or lack thereof, of a new company really intrigued me.
Written by Dave Lavinsky on Monday, August 3, 2009
I'll be the first to admit that this fundraising strategy isn't for me. But I have a wife and kids, so maybe, a few years back, I would have given this one a shot.
The strategy: renting out the extra space in my apartment or house to travelers on a budget.
For three entrepreneurs, this fundraising strategy took on a life of its own. The three entrepreneurs, Joe Gebbia, Brian Chesky, and Nathan Blecharczyk, used this creative fundraising strategy (renting out the extra space in their apartments) to generate revenue after they quit their jobs to become entrepreneurs.
But, interestingly, they found the strategy so successful, that that turned it into a business that is now thriving.
The business, Airbnb is essentially the "eBay of space." It works like this...People list their apartments and houses (if they aren't going to be home), and even spare guest rooms, futons, and couches on the site and set a price per night. And then travelers who are looking for a place to stay search the listings for an accommodation that's right for them.
So, real estate owners and renters earn money, travelers get a discount, and Airbnb earns a 10% fee on all transactions. A true win-win-win. As you might imagine, Airbnb is doing very well, and is now in over 1150 cities in 82 countries.
My takeaways/lessons here are two-fold: first, if you have extra space or are traveling, you should consider listing your space on Airbnb to generate some revenues to invest in your business. Second, as this company illustrates, you can never be too creative in coming up with ideas to fund your business.
If you want to see a brief video of the Airbnb team, including their story of how Barry Manilow's drummer is one of their top users, here is a cool clip:
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