In this article, I'm going to give you the secret to highly effective marketing.
Let me start with an example.
Let's say your competitor runs an advertisement that reaches 10,000 target customers and gets these results.
Assuming the ad reached 10,000 target customers, your competitor's gross profit from the ad would have been $8,662.50 (minus the cost of the ad).
Now let's assume that your company did a 20 percent better job on each of these factors. Your results would be as follows:
Now let's look at the results.
If your ad reached the same 10,000 target customers, your gross profit would be $19,596.
That's 2.3 times greater than your competitor's.
Now, what would happen if you generated 2.3 times greater profits than your competitors every time you ran an ad?
The answer is that you would absolutely dominate them.
Now, the key marketing secret that I'm sharing with you here is that you don't have to revolutionize your marketing system. Rather, small, 20% improvements in each part of your system lead to revolutionary results.
So, here are some ways in which you can improve each part of your marketing system:
The more you know about your customers' wants and needs, the more easily you can design advertisements that appeals to them.
And the more you know about them, the better you could craft a unique selling proposition (USP) to attract them.
For example, if you are local hardware company and you know your typical buyer is a busy male with a wife, kids, and dog, you could easily craft ads with a higher response rate.
You could also boost response rates by developing better offers that attract customers, such as an offer for a 90-day money-back guarantee.
Remember, conversion rates are the percentage of prospective customers that you converted into actual customers.
A few ways you could increase conversion rates include having a better process in place for training your staff and sales team, providing better employee incentives (e.g., commissions or bonuses for closing sales), or by developing and testing sales scripts that boost results.
Number of Widgets Per Buyer
To increase the number of units purchased per transition (including purchasing more widgets or related items), you can rely on similar tactics to increasing conversion rates such as better hiring, training, sales scripts and so on.
Remember McDonalds doubled its profits when it started asking "would you like fries with that?" and increased them again when it starting asking "would you like to supersize that?"
Better systematizing your business and implementing the right processes and procedures will allow you to generate higher profits per sale than your competitors.
Finally, to increase repurchase rates, do a better job of communicating with your clients and showing them how special they are. For example, send them emails, call them, or send them letters in the mail to educate them and remind them that you have products and services that can help them.
As you just witnessed, making small improvements to each part of your marketing system is incredible powerful and massively increases your profits. If you want to learn more, check out our "Double Your Profits" program which provides detailed training on how to make these improvements in your business.
Today's article was written by my son, Max. Max is 12 years old. I did not edit the article at all. He wrote it for his seventh grade English class.
I personally was inspired by his article. And it made me think about you and all the other entrepreneurs I strive to help succeed. As entrepreneurs, we will experience countless ups and downs. And throughout this process, we need to stay optimistic and have a positive attitude. And we need to enjoy the journey as much as the destination we hope to achieve. Maybe Max has the answer to this.
"This I Believe"
by Max Lavinsky
"LIVE FROM NEW YORK... ITS SATURDAY NIGHT!" The jazz music starts blaring, and I'm in New York City surrounded by mobs of people, walking briskly to where they need to go. I see the faces of hilarious comedians like Bill Hader and Jay Pharaoh. I feel like I'm living in a carefree world. I believe in Saturday Night Live. It can teach us more meaningful lessons than you would expect.
As a young child I had always heard from my parents about this hilarious show called "Saturday Night Live." I can remember being shown little clips of skits from time to time. I instantly fell in love with them. I dreamed of the day when I could watch a full episode, or go into New York City to see a show live. This first time I was able to fulfill this dream, I was in the fifth grade. I had a fever, and I was home from school. I was going in and out of sleep when my mom came in and told me that I could watch something. I turned on the TV and came across Saturday Night Live. Without any hesitation, I turned it on and started watching. Jim Carey was hosting, and in my opinion he is one of the funniest actors ever. In the next hour, I laughed more than I normally would in a month. I forgot about all of my pain. It was crude and offensive, but I couldn't seem to wipe the smile off of my face. After the show ended, I wanted to keep watching.. I had to turn it off of course, but I knew I had just found something I loved.
After having watched Saturday Night Live, I look at everything a little bit differently. The glass is always half full. There is always a little bit of sun peeking out between the clouds. Now, I tend to laugh more. It has also taught me deeper and more important lessons, though. Saturday Night Live can be racist, bias, use terrible stereotypes, and just be flat out horrible. While this is certainly a bad thing, there is some good. It teaches us to laugh at ourselves, and to be able to deal with getting made fun of. This is a skill that many people lack, and it makes them uptight, and without a full sense of humor. If everyone was able to laugh at themselves, maybe nobody would fight. Maybe, we could all live in peace. Maybe, if we could just do something as simple as laugh at ourselves, our world could be perfect. To think that Saturday Night Live could make a perfect world may sound outrageous, but it is not. Things as little as a TV show can change us. To some people that seems irrelevant, and it did to me once. But that of course, was before I watched Saturday Night Live.
So Saturday Night Live definitely has its cons. But while it embarrasses and offends us, it teaches us how laugh at ourselves. Will Ferrell once called Saturday Night Live a "comedy boot camp" because it teaches us how to have a sense of humor and appreciate comedy. So try something new. Watch Saturday Night Live and laugh.
"Knowledge is power." This is a well known saying commonly attributed to Sir Francis Bacon, who was an English philosopher, statesman, scientist and author.
In business, knowledge certainly is power. For example, if you knew where your market was heading, you would have a massive leg up on your competition.
So, how can you gain more knowledge to outsmart your competition? Here are 7 ways.
1. Learn from your customers. Marketing consultant Jay Abraham once said, "your customers are geniuses; they know exactly what they want."
Because your customers know what they want, speak to them. And don't just speak to your current customers, but speak to your competitors' customers too. Learn to listen deeply to your customers and to ask probing questions. And when you hear consistent feedback (and not just one customer saying something), take action.
2. Learn from your competitors. Watch your competitors closely and learn from them. What do they seem to be doing well, and how can you better emulate them in this respect? What are they doing poorly that you can capitalize on?
Importantly, don't just copy your competitors until you know that what they are doing works. For example, if a competitor starts offering a 25% off discount for new customers, don't copy them right away. Rather, wait and see what happens. If the competitor stops offering the discount quickly, then the promotion probably didn't work. Conversely, if the competitor is still offering the discount 6 months later, it probably did work. Only copy the competitor's "winners."
Also try to figure out what competitors are saying about you. And, if criticism from a competitor gets back to you, don't become defense or dismiss it casually. Rather, engage critically with it. The criticism may prove to be quite helpful. A competitor may be aware of your weaknesses in a way a friend or customer cannot be. So don't disregard negative feedback, but rather consider it carefully, and take corrective action as appropriate.
3. Learn from your employees. Oftentimes your employees have a lot more information than you do. They are the ones who are interacting with customers, and they are the ones that are building your products and providing your services.
Speak to your employees and get their feedback, ideas and suggestions. As an example, nearly all new innovation at Toyota comes from front-line employees. Encourage your employees to come up with ideas and give you feedback. They may also alert you to changes in the marketplace and customer behavior that you need to understand in order to adapt.
4. Learn from your community. This is particularly true for local businesses. Find out what is going on in your community. For example, if your community is heavily involved in recycling, or if the local high school football team just won a championship, then you need to know about it since these are things your community cares about. Importantly, leverage this information. In these two examples, you could offer a sale related to the football team's victory. Or post signs explaining how your business recycles. These actions would position you as part of the community and cause customers to flock to your business.
5. Learn from coaches and consultants. The right coach and/or consultant will have lots of knowledge that you don't. They will have worked with other business owners and "been there, done that" - that is, they will have seen challenges and overcome them already. Because you won't have to "reinvent the wheel," these paid experts can allow you to make the right decisions, avoid mistakes, and grow more quickly. Plus, paid experts can give your business a reality check and keep you focused and accountable.
6. Learn from mentors. The right mentor serves a similar function as a paid coach and/or consultant in that they have experience, expertise and connections that allow you to avoid mistakes and grow your business more quickly. The challenge is finding the right mentor, and setting up the appropriate structure to get ongoing feedback (this naturally happens when you pay a coach or consultant).
7. Learn from other business owners. In previous articles, I have mentioned the massive power of mastermind groups. Mastermind groups are groups of business owners who work together to grow everyone's business. Mastermind groups are incredibly powerful since other members of the group will have already overcome the challenges you face, and thus can give you the answers you need.
Likewise, in many cases, skills and knowledge that have taken other business owners months or years to learn can be transferred to you in minutes. So, you gain massive knowledge quickly, and gain a support group that all shares the common goal of building a great company.
Knowledge certainly is power. Leverage these seven ways to gain knowledge, and you will be able to outsmart and dominate your competition.
Becoming a millionaire entrepreneur is possible, and many people have shown us how they managed to quickly build empires.
If you are an entrepreneur and are looking for inspiration, then these 5 modern success stories will certainly motivate you.
1. Sara Blakely
For the past 5 years, I have been part of several mastermind groups that have helped me dramatically grow several of my own businesses.
Below I will explain to you what mastermind groups are and how they can benefit you and your business.
What is a Mastermind Group?
As you may recall from last year, the Jumpstart Our Business Startups Act (called the JOBS Act) was passed and signed by President Obama in April, 2012.
The JOBS Act makes equity-based crowdfunding much easier
The JOBS Act makes it possible to raise funds from investors and donors through certain crowdfunding sites in exchange for equity in your company.
This was supposed to start on January 1st 2013. (more on this below).
The key to the JOBS Act is this: it opens up more possibilities in equity funding without the tedious requirements to register your funding as a public offering with the Securities & Exchange Commission (SEC).
If you have tried to raise funds in the past by going the public offering route, you'll know that it's expensive. Being able to bypass all that is huge, especially if you are raising smaller amounts of funding that don't justify such expenses.
The passing of the JOBS Act also means you won't have to seek out accredited investors specifically (people with incomes of $200,000 or more, or a net worth of $1,000,000 or more-not including their residence). Rather, you will be able to get funding from people of all income ranges, which makes the pool of potential investors MUCH bigger.
Imagine how many regular people are out there, who might want to reallocate some of the funds they already have invested in savings, stocks, mutual funds, or other investments that aren't paying so well at present. In the future, funding other businesses might be a much more common way to diversify your capital-that anyone can do and not just accredited investors. Even you!
So, what's the latest?
As mentioned above, equity based crowdfunding was supposed to go live on January 1st 2013. This was predicated on the SEC writing the crowdfunding regulations by December 31 2012 like they were supposed to.
But this never happened. The two key issues regarding why this didn't happen were: 1) a lack of consensus within the SEC decision-makers about the regulations, and 2) the recent resignation of the former chair of the SEC.
Both of these issues are expected to be resolved with the recent appointment of Mary Jo White to head the SEC. White is one serious woman - her career includes serving as the New York prosecutor who brought down John Gotti and put many terrorists in jail.
So, it is expected that within the next 60 to 90 days that Mary Jo White will take the helm and help the SEC write the regulations that make equity based crowdfunding legal in the United States.
How can you prepare for this now?
If you want to raise equity capital later this year and beyond, here's a quick list of things you can do now to be ready when the time comes:
Broaden your network
One advantage crowdfunding sites offer you is having access to more investors and donors than there already are in your personal network. These sites generate their own traffic, and a percentage of your funding will come from people searching those sites or stumbling across it.
As it turns out, enough projects have been successfully funded (using the donation-based Crowdfunding model, not the equity-based crowdfunding model) for experts to be able to look back and say that your project is much more likely to be successful if the first quarter to third of the funding comes from your existing network first. Reason being, they are the ones most likely to believe in and trust you already, and strangers want to see some social proof and credibility in advance before they jump on board.
Deepen your relationships
Do this for the same reason I mentioned above-to get the ball rolling on your funding from your existing contacts. So in the coming months, you should be out seeking new relationships and strengthening the ones you have-specifically with those who are more likely candidates for funding you, or those who are in a position to spread the word for you.
You don't even have to mention funding during this time. Just spend the time necessary to confirm that they have the means and would be interested in your project, while at the same time showing your willingness to serve them and build trust and experience together.
If you're already in business, keep growing it
As with any kind of funding, you will be in a much stronger position to ask for funds if you can demonstrate success in the past. You will have more data available to work into your plan and forecast. And, people want prefer to invest in something that looks like a sure thing-with the least uncertainty. So keep doing what you're doing and you'll be able to show prospective investors your first-half 2013 financial statements and smile.
Work on your business plan
Also, as always, have a solid plan for how much funding you need, how you will spend it, and what effects it will have on your operations and revenues. People want to lend to someone who has thought things through and looks less likely to run into unforeseen problems-especially strangers online! Remember that.
It will also take some time to craft your presentation and pitch. If you plan on using a slideshow or video of some kind (or even just writing it out on your project's page), it will take some time to put that together in advance. But, it's something you can be doing now.
So there it is...equity-based crowdfunding is one more way to get the funds you need to launch or grow your business. Stay tuned to the developments (you'll hear them from me) and prepare for funding like you normally would. This might just be the key to your company's growth!
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.
An effective marketing plan is necessary to grow your business. Among other things, the right marketing plan details your target customers, your unique selling proposition (USP), and your pricing strategy.
And importantly, your marketing plan covers the "channels" you will use to get new customers (known as your "promotions strategy"). These channels include, among others:
While most of these channels require advertising dollars, there are some additional strategies you can employ that are low or no cost. Four such strategies are detailed below.
1. Get To Know Your Competitors
Regardless of what you're selling or the services you provide, you must know how your competitors are doing it. Why? Simple. Because you want to do it better-or at least not get left behind!
Visit their brick and mortar stores to see what they are doing differently this year. And/or take a real close look at their websites and blogs to see what they're doing and the customers they're serving.
Sneaky Tip: When visiting a competitor's blog, make sure to leave high-quality comments on a number of posts. By doing this, you can also mention your website directly or perhaps just indirectly through the Name and Website fields (they turn into a link when your comment is posted).
Once your comment is approved, everyone who sees your comment will be able to click on your link and visit your website.
2. Create Some YouTube Videos
I recently met with representatives from Google who presented some very interesting information to me. Including the fact that more and more consumers and businesses are relying on video in their decision-making process.
Specifically, more and more people are searching YouTube for videos when thinking about making a purchase. And they showed me specific research stating that "1 in 3 small businesses purchased a product or service as a result of watching the related video."
Which means that you need to create videos.
Importantly, these videos can also bring you a flood of new customers.
Here's an example. I created a video entitled "How to Write an Executive Summary for a Business Plan." On YouTube alone it's been viewed nearly 27,000 times. Here's the link: https://www.youtube.com/watch?v=gLAZpFKRgUg
Once again, I haven't shared this video 27,000 times. Rather, people are finding it by searching Google, searching YouTube, social sharing, etc.
3. Use An Effective LOCAL Search Engine Optimization (SEO) Strategy
An effective search engine optimization strategy will get your website on a top position in the search results pages of all the major search engines, such as Google, Yahoo, and Bing.
While ranking at the top of the search engines on generic phrases (like "business plan") is hard, ranking on these phrases locally is a lot easier.
Essentially, all you need to do is choose the keyword or phrase that best describes your business, add your city or area name, and use it in texts that you post on your website (e.g., Business Plan Development Chicago IL).
Your keyword or phrase should appear in the URL of your website and it has to show up in its meta description tag. For example, even though we don't have an office in Chicago, IL, this page on the Growthink website ranks near the top of Google's results for searches on "Business Plan Development Chicago IL" - http://www.growthink.com/businessplan/help-center/chicago-illinois-business-plan-writers
4. Write Newsletters And Send Them To Your Contacts
Keeping in touch with your customers is critical if you want your business to blossom. Information is crucial nowadays. Therefore, make sure that you keep your customers informed with regard to your products and services.
Some businesses do it with a print newsletter, which is fine if the business you generate is worth the costs. But an email newsletter is a much less expensive and time-consuming way to start.
Invite people to subscribe by offering a small discount or freebie, if they are willing to provide their e-mail address. After that, any message you send them is free advertising!
This does not mean that you will have to send a weekly newsletter-they might not be that interested. Instead, write a newsletter with the sole purpose of informing your customers about new products you are adding to your current offer.
Make sure that you mention discounts and advantages. Send these newsletters weekly or monthly at first (but it is better to under promise and over deliver). This will show your customers that your business is serious and it will help create a long-lasting relationship with your clientele.
In conclusion, add these 4 strategies to your 2013 marketing plan, and start rapidly growing your business.
Suggested Resource: Growthink's Ultimate Marketing Plan Template allows you to quickly and expertly create your marketing plan. This template includes multiple proven strategies for attracting new customers and dramatically boosting your sales and profits. Click here to learn more.
One of my friends works for a multi-billion dollar cable company. And his role is extremely interesting. Specifically, he's charged with figuring out what the company needs do to now so that it will be competitive ten years from now.
Imagine that? 10-year planning. For most businesses, it's inconceivable to do this. But for a cable company, it could take years to implement changes such as installing cables to hundreds of thousands of homes. So, he spends his days researching, analyzing and theorizing over what the world might look like in 10 years and what the company needs to do today to start preparing for it.
And I'd like to think that he, and perhaps those before him, have done a great job at this. Because while 10 years ago I only use my cable company for television service, today I pay my cable company for television, internet access and phone service.
Break-Even Thinking Doesn't Work
But what about your business? Do you need to plan 10 years into the future? The short answer is "no." But it's important to point out that any planning is significantly better than no planning.
In fact, for most small businesses, planning generally tends to be more along the lines of thinking "what do I have to do to have enough revenue to pay the bills for the next month?" Missing from this thinking are the critical long-term decisions and directions on how to grow the business, increase its revenue, and expand market share.
And what inevitably happens is this: if your immediate focus is just trying to break even, your business often ends up just struggling rather than growing.
The solution is to develop a five-year plan, and using it to guide daily operations.
How It Works
A five-year plan is not a set of financial pro-forma statements and twenty pages of text and history on your company. Rather it must incorporate real thinking about 1) what goals you want your company to achieve, and 2) what goals every key division of your company must achieve.
Specifically, you must document the revenues and profits your company seeks to achieve in 5 years and then set similar goals (with different metrics as appropriate) for each operational area (e.g., marketing, fulfillment, etc.).
This in turn becomes the basis of the roadmap you'll use to grow our organization.
Use The Map
Ironically, after putting considerable time and effort into building a 5-year strategic plan, many business owners and managers never look at it again.
To avoid this, work backwards and document shorter term goals. Let me explain. Now that you know what you need to achieve within 5 years, determine what you need to achieve this year in order to make solid progress towards your 5 year goal.
Next, figure out what you must achieve this quarter to progress to your annual goal. You can break this down even further to figure out what you must accomplish this month to reach your quarterly goal.
This process allows you to set monthly goals that progress your business. Document these goals and share them with your team so you can accomplish them.
And importantly, use these short-term and long-term goals in your daily decision making. For example, is forging a relationship with a new partner in line with your goals? Or is it another distraction that will take time and prevent you from reaching them?
Also, use the shorter-term goals to measure your success. Are you meeting revenue goals? Do you have the amount of clients you projected for this time of the year? Use objective measurements that will not allow you to fudge your results. Your shorter-term goals give you a black and white, hopefully not red, assessment of where you stand in accordance to your goals.
Keeping your five-year plan alive is like having an up-to-date, accurate map of a foreign city when first walking its streets. It allows you to not just think about breaking even, but to reach specific performance targets and goals.
When people have a clear idea what to strive for and how to get there, even when challenging, they perform better. That translates to improved operations which also eventually improves revenues and profits for your company.
A five-year plan and periodic short-term goals also does away with complacency. When a business is in the "break-even" mode, it's only thinking about the immediate demands, never pushing to do more than just what's needed to meet the given threshold. Processes become routine and complacency sets in.
Your 5-Year Plan Must Be Updated
It's important to remember, however, that your five-year plan needs to be updated regularly. Markets, environments, customers and regulations change over time, all of which have an impact on a business and its profit margins. For example, the recent healthcare laws enacted by the federal government impose new health plan requirements on businesses of a certain size. Clearly, businesses did not consider this regulatory change in their five-year plans back in 2010.
So, update your five-year plan annually to reflect new changes, new ideas and new goals.
Finally, your five-year plan is only as good as the effort you put into it. The components, goals and targets have to be well thought out so as to be realistic and achievable. When you do this, and when you break down your 5 year goals into annual, quarterly and monthly goals, you will know precisely what to do to grow a thriving business. For help with this process, download my strategic planning template.
This is a true and pretty ridiculous story that happened to me at my first job. It was about 20 years ago and I was working at a market research firm.
After working in the job for nearly 6 months, I had an idea for a new product. You see, our company had been selling access to a large database of information to our clients. My idea was to better package the information.
Specifically, my idea was to create pre-defined reports from the information that allowed them to access key
pieces of data quickly and easily. This would not only help existing clients, but it would open the door to new clients who only wanted the specific information rather than paying for full database access.
Instead of asking approval to launch the new product, I used my spare time to actually create it. I then showed it to the VP of my division.
So what do you think happened?
I got yelled at.
Seriously, the VP was angry at me. He questioned my immediate boss as to what
I was doing and why I had invested time in creating something new.
Obviously this was not a very entrepreneurial company.
But what I found most interesting about the event was how much face time I
got with the VP.
You see, that VP was what I consider to be a "stealth manager." That is, he pretty
much sat in his office, door closed, day after day after day.
So he really had no idea what everyone was doing. So he didn't know that I created
the new product after hours, and that between 9 and 5, I was accomplishing all the regular tasks assigned to me.
In fact, he didn't know much about anything that was going on.
And the result -- the employees were not inspired. We were not motivated. We lacked a clear vision of what the organization was trying to achieve.
And all this resulted in lackluster performance.
We didn't go out of business. But we certainly weren't growing like gangbusters like we should have been.
Think about your days. Are you a stealth manager? Are there others at your organization who are stealth managers?
Stealth management doesn't work. Effective leaders and managers walk around and speak to their employees. They listen to them. They inspire them. Because effective leaders know that it's the employees who make or break their companies. They (the leaders) are the conductors of the orchestra -- without the players (the employees), there is no music.
Here are 5 things you can do TODAY to quickly break out of the "stealth manager" mode (and make your team more productive).
1. Walk around the office
Simply walk around to see what everyone is up to. Don't make it seem like you're Big Brother checking up on them. But rather, be very casual about it (the next points will give you some talking points to help with this).
2. Ask people what they are working on
Ask people what they are working on, and then really listen to their answers. Ask them why they are completing a task a certain way, and as appropriate, suggest another way they may accomplish it. Not only will they appreciate this mentorship, but you could improve their performance.
3. Tell someone/several people they're doing a good job
Tell at least one person that they're doing a good job. Let them know you found real value in something they accomplished recently.
4. Buy cookies
I don't know many people who don't like cookies. Come back from lunch with cookies, and either hand them out or put them in a main area. In either case, let everyone know that you bought them "just because." Even those on a diet who refrain from eating them will appreciate the gesture.
5. Picture each of your team members as they looked when they were toddlers
This will force you to smile when you see them. And that smile alone will brighten their day.
Great companies are not built by one entrepreneur. They are built by entrepreneurs who inspire their employees to accomplish great things. Make sure you keep this top-of-mind, since if your employees don't succeed, neither can you.
Venture capitalists (VCs), unlike angel investors, are professional investors that invest other people's money. Similar to angel investors, their goal is to earn a solid return on this money. In fact, VCs are judged and compensated by the performance of their investments. As a result, they are extremely rigorous in their investment decision-making process.
Here's how VCs earn returns for their investors:
1. Finding high growth companies
2. Making investments in them at favorable terms
3. Guiding and nurturing them
4. Enacting a liquidity event. This typically occurs by selling the company or taking it public.
VCs swing for the fences and only invest in companies they think can give them a "10X" return or 10 times their money back. This is because even with all their relevant experience, the average venture capital firm will lose money on half the companies they invest in and only break even on a third. Where VCs make their money is on the approximately 20% of companies they invest in that see explosive growth and provide remarkable returns of 10 times or more on their investment.
So, the first criteria when seeking venture capital is that you can offer the potential of a 10X return to them.
The second criterion is that is your company must have significant market potential of $50 million, $100 million or more. Now, you might think that if a venture capitalist invested $100K in your company and got back $1 million (a 10X return) that they would be happy. This is not the case. This is because venture capitalists like to be "hands on" on their investments and help the companies they fund (called "portfolio companies"). And since each partner in the venture capital firm can only nurture so many portfolio companies, they want to invest in fewer companies, each of which can provide not only a 10X return, but a check of $50 million or more when it reaches liquidity.
To summarize, when approaching venture capitalists, remember the 3 hurdles:
1. Their primary goal is to make significant money from investing in you
2. You need to show them how they can earn a 10X return
3. You need to show them how your company can eventually be valued at $50 million or more
Now, if you meet these criteria, you should be a good fit for venture capital. But, raising this type of funding it is virtually impossible if you don't know what you're doing and haven't done it before. So follow this plan:
1. Develop a list of VC firms.
Start by creating a list of venture capital firms.
2. Narrow your list.
Each venture capital firm invests based on particular characteristics (e.g., some only invest in software firms), so you need to make sure your list only includes VCs that are interested in your type of venture.
3. Make sure the VC is active.
Many VC firms that have websites aren't active. That is, they aren't making new investments. You don't want to waste your time contacting and talking with these firms.
4. Find the appropriate person to contact.
This is critical. Venture capital firms are comprised of individual partners and associates. If you contact the wrong one, you'll be dead in the water.
5. Send the VC partner or associate a "teaser" email.
You don't want to send the VC a full business plan or executive summary initially. Rather, you need to send them a "teaser" email to see if they are interested. You don't want to "over shop" your deal.
Once the VC "bites" on your teaser email, the next step is generally to send them your business plan. Following that you'll do an in-person presentation(s), receive and negotiate a term sheet, and then sign a formal agreement and receive your funding check.
The venture capital raising process is a lot of work, but once you receive their multi-million check with which you can dramatically grow your company, you'll agree it's worth the effort.
Suggested Resource: In Venture Capital Pitch Formula, you'll learn exactly how to find and contact venture capitalists, exactly what information to include in your presentations, and how to secure your financing. This video explains more.