Growthink Blog

Grants for Your Business: An Exciting Truth Amongst Lies & Misinformation


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As you may have figured by now, I'm on a quest to help all business owners and entrepreneurs get funding for their businesses.

I believe that all entrepreneurs who are willing to invest their time and their lives into starting a new or growing an existing venture should be given the opportunity to do so. Clearly, their business concept must be viable, their business plan must lay out a pathway to success, and they must invest the resources in learning how to raise capital. But once these conditions are satisfied, I find it very saddening when entrepreneurs put in a solid effort but are still unable to raise the capital they need.

In my quest to solve the eternal funding issue, my team and I have been working on really figuring out an elusive form of capital: grants.

Grants, as you may know, are given to thousands upon thousands of companies each year totaling billions of dollars. Furthermore, they don't need to be paid back. So, on the surface, grants are a really interesting funding source for businesses. As you can imagine, when we started putting together our report entitled the "Step-by-Step Guide to Raising Capital for Your Business from Grants," we were really excited.

But, the excitement faded a bit when we learned about all the lies and misinformation there is out there regarding grants. Let me tell you the two that frustrated me the most.

Myth 1: Grants are offered to businesses owned by women, minorities and the disabled. This statement is 100% FALSE. In fact, NO grants are set aside specifically for small businesses run by women, minorities and the disabled; all grants from the federal government are open to a multitude of groups which include these businesses.

There ARE loans and government contracts reserved for women, minorities and the disabled, but NOT grants.

Myth 2: Grants for businesses are available from both the government (federal, state and local) and private and public foundations.

This too is false. The truth is that with few exceptions, grants offered by private or public foundations are NOT available to for-profit businesses. They are exclusively reserved for non-profits.

There is a silver lining here however. While we have found all the misinformation discouraging, we have uncovered that billions of dollars ARE given to small businesses each year via federal, state and local government grants, and more importantly, we've uncovered the formula that entrepreneurs and business owners can use to gain these dollars.

My team and I have been hard at work finishing the "Step-by-Step Guide to Raising Capital for Your Business from Grants." The report is now available, and you can download it here.

5 Tools to Improve Your Productivity, Creativity & Efficiency


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We could all use tools to increase our productivity, creativity and efficiency. Below are five tools that I have either been using for years, or just adopted, that have helped me, as I'm sure they can help you too.

1. 99designs.com

99designs is a site that I was recently turned onto and it's really cool. If you need a great logo designed for your business, this is the way to go. Before I tell you how it works, let me tell you about the old way of getting a new logo. The old way was to first look at several designers' portfolios to see which one had created logos that you liked. Then you would hire one designer. Next you would write down and give them your design specifications. Then, you would hope that they came back to you with a solid design, or one that was good enough that with a few tweaks could be improved.

Needless to say, the process took a long time, and more times than not (I say this from lots of experience) produced less than optimal designs.

Now, let me tell you how 99designs.com does it. First, you post a design brief, which is easy to do since the site leads you through some questions.

Next, you set your budget (amounts generally range from $100 to $600). Then, designers from around the world submit design concepts to compete for your business. During this process, you can rate the designs and provide feedback to help the designers deliver what you want. In the final step, you choose the winning design and pay the designer the amount you set, and the designer sends you their completed design (along with copyright to the original art work).

So the key points are 1) you don't have to spend hours finding designers and judging portfolios, 2) you don't pay anything (except the $39 fee to 99designs.com) until AFTER you see the design you want, 3) you get lots of designs to choose from, at least one of which is usually great (the higher your budget the more designs you get; for $300 you can get up to 100 submissions usually).

2. PDF995


PDF995, located at pdf995.com allows you to transform any document (e.g., Word file, Excel file, web page, etc.) into a PDF document. Best of all, there's no cost to download it. I used to use the official program from Adobe, but it's expensive and constantly crashed my computer.

I often use PDF995 to convert Word files to PDF files. This usually makes the file size smaller and ensures compatibility for whoever wants to view the file. It is also good for copyright protection (makes it harder for others to copy your work). I also use PDF995 a lot for converting web pages into PDF files. A lot of times I come across web pages that I want to reference later. Sometimes I bookmark them, but oftentimes the page may change. So, I PDF the page and file it away so I can access it whenever I want in the future.

3. Firefox Plugins

For those who have not yet tried the Firefox browser, I highly recommend it. Not only is it very fast and stable, but there are tons of plugins that make it more productive. A few plugins that I use are MeasureIt (allows you to quickly measure the dimensions of anything on the web page you are visiting), ColorZilla (allows you to click on any pixel on the web page to see its precise color) and FireShot (allows you to quickly take a screen shot and manipulate it (e.g., crop out sections; add comments; save file).

These are just the tip of the iceberg. Here is a full directory of Firefox plugins: https://addons.mozilla.org/en-US/firefox/

4. Bubbl.us

A mind map is a visual diagram used to represent words, ideas, tasks, or other items linked to and arranged radially around a central key word or idea. Creating mind maps are great for mapping out new projects or ideas, particularly if they are not linear. For example, if you want to create a new ebook, you may start with the word ebook in the center. Then you may draw a line to "creation" which will then have sub-sections for research, writing, etc. Another sub-section of the word ebook would be marketing, which would then have its own sub-sections. Etc.

My frustration with mind mapping is that, while easily done using pen and paper, I prefer a digital copy so that I can distribute it to my colleagues and/or modify it over time. And traditionally, creating mind maps with programs such as PowerPoint, took forever.

Enter Bubbl.us, a new online tool that allows you to create, save and modify mind maps REALLY easily. Give it a try. You'll be amazed at how easily it works and it's totally intuitive to use. And currently there are no fees.

5. Springwise.com


The final tool I'd like to tell you about today is Springwise.com. Springwise has created a network of 8,000 "spotters" from around the world who "scan the globe for smart new business ideas, delivering instant inspiration to entrepreneurial minds." On the site, you'll learn about businesses like Wonderpizza, a pizza vending machine developed in Italy, and Dogtree (dogtree.com.au), an Australian social network that helps dog owners find playmates and walking friends for their dogs.

Springwise is great for inspiration and brainstorming. It gives you unique concepts and ideas that can really get your creative juices flowing.

I hope you can use these tools and ideas to help you and your business. If you have any comments or questions, or want to post your own tips to help your fellow entrepreneurs, please add them in the comment section below.

Naming Your New Company or Product


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I recently read a great blog post, from a company called The Name Inspector, about how to name your company or product. Whether your goal is to raise capital or gain the interest of partners or customers, the names of your company and products are critical.

In fact, when we first launched Growthink a decade ago, we started with the name BestBizPlan since we initially focused just on developing business plans. Realizing that we would expand beyond business planning, we changed the name to Growthink to reflect our desire and skill sets in helping entrepreneurs and business owners in growing their businesses via planning, capital raising, marketing, strategy and more.

The Growthink name has a better connotation and helps client, prospective clients, partners and employees better understand and relate to our mission. While I cannot attribute our company's success solely to our name, it certainly has helped us.

So, here are the ten ways for you to create great company (and/or product) names as suggested by The Name Inspector:

1. Use Real Words: These are names that are simply repurposed words. (e.g., Adobe, Amazon, Fox, Yelp)

This category also includes misspelled words (e.g., Digg (dig), flickr (flicker)) and foreign words (e.g., Vox (Latin 'voice').

2. Use Compounds: These names consist of two words put together (e.g., Firefox, Facebook).

3. Phrases: These names follow normal rules for combining words (but are not compounds) (e.g., MySpace, StumbleUpon).

4. Use Blends: Blended names have two parts, at least one of which can be recognized as a part of a real word (e.g., Netscape (net + landscape); Wikipedia (wiki + encyclopedia)).

5. Use Tweaked Words: Tweaked word names are derived from words that have been slightly changed in pronunciation and spelling - commonly derived from adding or replacing a letter (e.g., ebay, iTunes).

6. Use Affixed Words: These are unique names that result from taking a real word and adding a suffix or prefix (e.g., Friendster, Omnidrive).

7. Use Made Up or Obscure Origin Words: These names are generally short names that are either completely made up, or, since their origins are so obscure, they may as well have been made up (e.g., Bebo, Plaxo).

8. Use Puns: Puns are names that modify words/phrases to suggest a different meaning (e.g., Farecast (forecast, fore -> fare), Writely (rightly, right -> write))

9. Use People's Names: using a general name or the name from a personal connection (e.g., Ning (a Chinese name), Wendy's (founder Dave Thomas' daughter's nickname)).

10. Use Initials and Acronyms: names derived from the first letter of each word in the longer, more official name (e.g., AOL (America Online), FIM (Fox Interactive Media)).


Kiva to Launch in the United States


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I recently wrote a blog post about Kiva and all the good it is doing worldwide.

As you may recall, Kiva is "the world's first person-to-person micro-lending website, empowering individuals to lend directly to unique entrepreneurs in the developing world."  Specifically, on their website, individuals who need small loans to start or grow their businesses request funding. And, other individuals from around the world offer this funding in increments as low as $25. To date, nearly 500,000 users have lent almost $65 million, interest-free, to developing-world entrepreneurs through Kiva.org.  $3.5 million was distributed last month alone.

Not surprisingly, since the majority of you are based here in the United States, in response to my email about Kiva I received lots of emails saying that Kiva should launch in the United States. I agreed.

And now, a few weeks later, Fortune Magazine is reporting that Kiva plans to launch in the United States within a few months. This could be a HUGE funding opportunity for American entrepreneurs!

Importantly, while the highest loan amount for entrepreneurs in the developing world is $1200, in the United States, it will be $10,000. One issue that hasn't been fully resolved is vetting. In the developing world, Kiva "uses microfinance institution partners to vet entrepreneurs before allowing them to solicit funding. By asking a series of questions to assess roots in the community and the legitimacy of a business, Kiva is able to establish a risk profile for each entrepreneur. Before offering money to, say, the proprietor of a Dominican fruit stand, any lender can read the entrepreneur¹s profile, history of defaults, and a bit about the business."

In the United States, Kiva says that they are "signing on microfinance partners in the Bay Area and in the Northeast," but have not released who these partners will be or how the vetting process will work.

In any case, this is GREAT news for American entrepreneurs.

You can read the full Fortune article here.

Educating Angels & What That Means for Entrepreneurs


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A few months back, a unique conference called "AngelConf" took place in Silicon Valley. The conference was organized for angel investors and its goal was to educate angel investors on how to invest in startups.

Key questions that the event addressed were:

  • How much are you supposed to invest?

  • What legal agreements do you need?

  • Where do you find startups to invest in?

  • How do you pick winners?

It was this last question that conference organizer Paul Graham from YCombinator agreed was the most important.

Graham's first point on this topic is that angel investors should pick startups that "make things that people want." Seems simple enough. However, Graham went on to say that angels should not invest in things that are already wildly popular. "By then it's too late for angels. VCs will already be onto them. As an angel, you have to pick startups before they've got a hit-either because they've made something great but users don't realize it yet, like Google early on, or because they're still an iteration or two away from the big hit, like Paypal when they were making software for transferring money between PDAs."

As such, angel investors need to be able to predict future market sizes (not just identify markets that are already doing well).

Graham's second point on this topic is that angel investors need to pick founders who are winners. On this point, he said the following:

"What makes a good founder? If there were a word that meant the opposite of hapless, that would be the one. Bad founders seem hapless. They may be smart, or not, but somehow events overwhelm them and they get discouraged and give up. Good founders make things happen the way they want. Which is not to say they force things to happen in a predefined way. Good founders have a healthy respect for reality. But they are relentlessly resourceful. That's the closest I can get to the opposite of hapless. You want to fund people who are relentlessly resourceful."    

Now, what this means to you as the entrepreneur is that this is how you will be judged by many angel investors. They will judge the future potential of your business concept and they will judge the potential of you and/or your management team.

With regards to the potential of your business concept, you must convince them that your market is poised for growth, and in doing so, you MUST cite multiple research and statistical points that confirm your views (I can't reiterate enough how critical great market research is).

With regards to the quality of you, the founder, and/or your management team, you need to show the investor, via past performance and ALL current interaction between you and the investor that you are a winner. You need to show them that you make things happen. Here are some examples of how can you accomplish this:

  • Tell them a current business objective and come back to them two weeks later and show them you have achieved it.

  • Find some way you can help them (e.g., introducing them to a business contact of yours that could help them) and execute on it right away.

  • Ask them about questions they have about your opportunity and/or market and come back to them within 24 hours with great research and answers to their questions.

These smaller, short-term accomplishments which show investors that you can execute and that you are clearly not 'hapless' will massively improve your chances of getting them to invest in you.


Breakthrough Business Idea Generator


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I want to tell you about a technique I picked up, that I can directly attribute to millions of dollars of revenues that I have generated over the years. But, even so, I'm far from mastering it.

The technique is a brainstorming technique called Assumption Reversal. It is incredibly powerful. It's the technique that has been responsible for, among many others, the ATM machine and Henry Ford's development of an assembly line which revolutionized manufacturing.

The Assumption Reversal brainstorming technique allows you to look at things differently and triggers new, creative ideas. It can be used to develop new business ideas and new product ideas, and for you to overcome virtually any challenge you face, from marketing obstacles to staffing difficulties and more.

I have put together a brief video that walks you through the four steps of the Assumption Reversal brainstorming technique and gives you a real-world example. I think you'll get much more from the video than just reading about it.

Mastering this technique could revolutionize you and your business. Check out the video below:


Exclusive Report: How to Quickly, Easily & Expertly Conduct Zero-Cost Market Research For Your Business


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I started my career in market research. At one point, I was pretty immersed in it. In fact, articles I wrote were published in Quirk's Marketing Research Review and I was a member of SCIP, the Society of Competitive Intelligence Professionals.

Having helped start and grow hundreds of companies since then, I can definitely say that my market research background has been a HUGE asset.

Every successful venture I have launched or help launch leveraged opportunities and strategies based on the industry, customer and competitor research we conducted.

I have also used market research time and time again to find investors and joint venture partners for businesses.

Since market research is so critical to businesses, and since the Internet presents such a goldmine of research for those who know who to find it, I decided to put together a report on how to quickly and expertly conduct market research online.

Some of the report is methodologies I use and other parts include my most prized bookmarks….those “go to” research sites that I visit each time an important research question or project comes out.

Want to learn how you can conduct market research for free instead of paying thousands of dollars to market research firms? Well, I put together a brief video to show you how:



I'm excited to get this report in the hands of as many entrepreneurs and business owners as possible, because I know the value effective and efficient market research has had on my business endeavors.  The report is currently free for current Growthink University members, so if you're a member, you are in luck! Just go to the download center and pick up your copy.

For those of you who aren't members of Growthink University, I would like to make a special offer available to you.  Because I'm in a celebratory mood, (this month is my wife’s birthday) I would like to offer this promotion to those interested in obtaining a copy:

As my wife would never allow me to post her age on my blog, what I have done is incorporate her age into this promotion.  For the next few days, I'm offering this market research report for one CENT for each year of my wife’s age.

As a bonus with your purchase, I’ll also include 30-day access to Growthink University so you can see the wealth of capital raising, business planning information we've assembled for entrepreneurs and business owners just like you. You’ll also gain access to all the Growthink University bonuses like our Ultimate Business Plan Template, special reports, VC Directory and Angel Investor Group Directory.

To order the market research report (and to find out exactly how old my wife is :)),follow this link:
https://www.growthinkuniversity.com/public/268.cfm

Raising Angel Capital The Wrong Way: 1,000 Times Harder Than Harvard Business School?


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The last few weeks have been a little frustrating for me and my team. Why? Well, we've been hard at work developing a new guide on how to raise angel financing. And some of our findings were a bit disturbing (fortunately other findings were very encouraging).

In developing the report, we took some GREAT advice that I encourage each of you to use whenever creating a new product. The advice - find out all the questions that potential customers have and make sure that your product addresses them.

So, using our online market research methodologies, we found all the questions that entrepreneurs and business owners were asking about angel financing.

  • Will an angel investor invest in a ______ (insert restaurant, website, etc.)?
  • Where can we find angel investors for our company?
  • What is the difference between angel investors and venture capitalists?
  • What return on investment do angel investors want?
  • Where can I find angel investors to submit my business plan to online?


It was this last question that really bothered me...the notion that you can simple complete a form online and have angel investors (or venture capitalists) flock to your company. Our research shows that the chance of an angel investor funding your business based on an online form is about 0.01%, or 1,000 times WORSE than the odds of getting into Harvard Business School.

Sure there are many sites that tell you to pay them, submit your plan or complete their form, and that your plan will be sent to thousands of investors. And each of these sites prominently display their success stories. BUT, these success stories are the outliers. They are the 1 in 10,000 businesses that got funding for one reason or another.

The FACT is that angel investors (and venture capital firms) DON'T invest this way.

But, the good news is that tons of angel investor do invest, and in fact, they fund 15 times more companies than venture capital firms. According to the Center for Venture Research at the University of New Hampshire, last year 55,480 ventures were funded by angel investors.

And because the public stock market has being doing so poorly, more and more individuals are considering angel investing.

So the angel investors and money is out there. It's just a matter of knowing how to raise angel capital.

From our recent research and having been raising angel and venture capital for the past decade, we uncovered all the ways that you and your business CAN raise this type of capital. And it doesn't include filling out forms online.

Are you an entrepreneur looking to find angel investors to fund your company? Learn proven strategies and tactics when you download Growthink's Step-By-Step Angel Investor Guide.


How Less Fortunate Businesses Thrive with Focus And Funding


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I for one take a lot of my business resources for granted. The fact that I have high-speed, uninterrupted (well, at least usually) internet access. The fact that I have a quiet office with a desk. The fact that I have a computer and programs that automate a lot of my routine tasks.

These things all help me be much more productive, and give me the ability, when combined with hard work and focus, to accomplish great things.

Like everyone else, most of the things that I do don't go precisely as planned. Like Growthink University. Clearly I was hoping for thousands upon thousands of new members the day we launched. But then, like everything else, I knew that tweaks would have to be made, the service would have to continuously be improved, etc., in order to reap long-term success.

When things get me down, one source of inspiration that I've turned to is Kiva.org. Kiva is "the world's first person-to-person micro-lending website, empowering individuals to lend directly to unique entrepreneurs in the developing world."  Specifically, on their website, individuals who need small loans to start or grow their businesses request funding. And other individuals from around the world offer this funding in increments as low as $25.

The following are some new and completed funding requests I read today:

  • A $1,000 loan request from Mr. Vun Nem, of Cambodia who requires funding since he can't pay for the materials needed to run his construction business.

  • A $625 loan given to Ludmila Boiko of  Kherson, Ukraine. Ludmila has one daughter and sells domestic electrical appliances in a market in Dneprovskyi. Ludmila has paid back 12% of the loan to date.

  • A $1,075 loan given to Norma of Ayacucho, Peru who needed the funds to purchase outfits, polos, pants and blouses. This money was successfully raised on Kiva. In addition, she invested all of her savings to construct a third floor in their house and to buy machines to use in a dressmaking shop. This loan was made on June 30, 2008 and by October 31, 2008, she was able to repay the loan in its entirety.

Equally as inspiring as the entrepreneurs are the individuals who have funded them such as:

Philip, a student from Eaton, NH who lends because, "I am more than willing to help those who want to help themselves."

Judy, a teacher in Manassas, VA who says, "The impact of collective small gifts is breath-taking!"

And

Levi, who lives in Saskatchewan Canada and invests simply because "It works!"

When entrepreneurs throughout the world are able to raise tiny amounts of capital, amounts that I often charge to my credit card without flinching an eye, and are able to execute on their businesses and quickly repay their loans, it is truly inspiring.

What's also interesting is that these entrepreneurs may have more focus than many of us in the Western world. They aren't getting bombarded with phone calls and emails. Rather they are laser-focused on creating a business that provides money to feed, clothe and house themselves and their families. With laser focus often comes success!

Key Man Insurance: Why It Is So Important To Your Business


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Did you know that venture capital firms nearly always require the companies they fund to get key man insurance (KMI)?

Well, understanding the rationale behind this fact should give you insight into improving your business operations and structure.

To begin, Key Man Insurance or KMI is a life insurance policy covering a business owner, president or a key employee. The business is the beneficiary under the policy.

The fact that most venture capital firms require KMI explicitly shows that venture capital firms provide funding to PEOPLE, not firms or ideas. It is the people who are able to execute on the ideas. Remember that a good person with a mediocre idea is often much more successful than a poor person with a great idea.

What this does NOT mean is that you should rush out to purchase key man insurance if you are seeking venture capital. What it does mean is that you need to make sure that you have a management team that is worthy of KMI. A team that is so capable of achieving success that investors are actually frightened that their investment would be in jeopardy if something happened to them.

What it also means, and this applies even if you are not seeking venture capital, is that you should create systems to minimize the business risk of something happening to a key employee.

These systems can include:

  • Training manuals that document key tasks performed by key personnel, so that someone else could take over their job requirements in the event that they were out of the office temporarily or long-term

  • A hiring plan that allows you to efficiently recruit and train new personnel

  • Constantly networking and telling people the exciting aspects of your business so that there is a pent-up demand to work at your company

You and your management team are the lifeblood of your business. You always need to be thinking about how to improve, protect and grow your team, as this will have the greatest impact on the long-term success, or lack thereof, of your business.

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