Written by Dave Lavinsky on Tuesday, January 13, 2009
What traits and skills really make Richard Branson, Bill Gates, Donald Trump, and countless other entrepreneurs so successful?
Over the past decade, we've identified key ingredients that lead to success, which we've observed both in celebrity entrepreneurs and in our most successful clients. When it's all said and done, they have all of the following critical skills, which are essential to entrepreneurial success:
Vision & Leadership: Entrepreneurs must have a vision of where the company will be in the future. In addition, you must be able to communicate you vision so as to motivate employees, investors, and partners to help you achieve that vision. You must be able to identify staffing needs, expertly fill them, and lead your team to success. Rarely do entrepreneurs build successful companies all by themselves.
Focus & Execution: Entrepreneurs must focus to make sure that goals are achieved, customers are satisfied, and employees are motivated. For most entrepreneurs, staying focused is harder than it sounds. Be careful not to be seduced by the next exciting opportunity without executing on the priorities at hand. And don't let perfectionism prevent you from taking action, either; at the end of the day, a product on the market is better than a product shelved due to lack of focus, execution, or perfectionism. Get to market and get feedback from your customers as soon as possible.
Persistence & Passion: As an entrepreneur, you must be passionate about what you are trying to accomplish. In addition, you must be willing to commit whatever is needed of them, whether it's time, energy, money, or other resources. You must persist through trying times (which will be frequent), and fight as much as needed to achieve the goals you have set for yourself and your team.
Technical skills: As the owner of your firm, you may not need to be the most skilled technicion on your team. But you need to have necessary foundational knowledge to be able to lead your technical team and make informed decisions.
Flexibility: Successful entrepreneurs understand that the world and the environment in which they operate are constantly changing. While you must focus on the end game, you also must adapt your strategies and offerings to meet changing market conditions.
There has often been debate regarding whether entrepreneurship can be taught. Can you really teach persistence or passion? Perhaps you can't. But if you understand the importance of these entrepreneurial traits, you can focus on them and make the necessary adjustments to succeed in your entrepreneurial endeavors.
What about you -- what skills or traits do you think make entrepreneurs successful?
Written by Dave Lavinsky on Monday, January 12, 2009
Just for a moment, consider the following press release headlines:
"Company X Receives Top Marks in Bloomberg Article..."
"Company X Ranked #1 Global Provider...Second Year Running"
"Company X Acquires Leading Provider of..."
"Company X Launches Philippines Operations"
"Company X Names Industry Veteran as Vice President..."
Now imagine what it would feel like to be the founder of Company X. For one Growthink client, Liam Brown, this isn't a dream - it's a reality.
A few years ago, Liam had the vision to come to Growthink for assistance with a business plan for his vision - a company named Integreon
. Liam, with a solid business plan, turned his vision into a business, raised capital, and attracted a highly motivated work force. Today, Integreon is a leading business process outsourcing (BPO) service firm that employs over 2000 people, with offices ranging from Mumbai to Fargo and New Delhi to midtown Manhattan.
Even with an amazing business plan, heights and milestones like the ones listed above cannot be achieved without vision. Simply put, you must have a vision of where you want your business to be in the future. You must be able to communicate your vision in an exciting manner to employees and investors, so that they too share your vision and are motivated to help you achieve it.
Unlike your business plan, your vision doesn't provide a specific roadmap for your business. Rather, your vision paints a picture of what the your business strives to become in the future. A leader with a strong vision motivates his or her team to achieve this picture, regardless of the action plan that will be employed.
Vision provides motivation to both the leader and employees. It gives employees something that they can believe in and rally around. While it doesn't tell the employees exactly what to do to achieve it, having vision instilled in them helps positively mold their decision-making when problems must be solved that don't have clear answers.
A strong vision combined with a strong business plan is critical to the success of a growing venture. The vision motivates everyone to achieve success, while the plan guides them to where they need to go. In addition, the plan is significant in that it documents the vision. By "cementing" the vision on paper, the team gains more confidence that the vision will not be easily changed and that the organization is truly committed to achieving it.
Written by Dave Lavinsky on Friday, January 9, 2009
In my previous post, I explained how getting an outside perspective improves your chances of raising capital.
There is a second, equally important, benefit of retaining a business planning consultant to develop your business plan: it improves your business strategy.
Let's start with some facts...
Fact #1: There are 24 million businesses in the United States alone.
Fact #2: History tends to repeat itself.
What I mean is, if you have an idea, whether it's a marketing idea, operations idea -- anything really -- chances are it's been tried before. Chances are also that if it failed the first time, it will most likely fail again.
That's not to be discouraging, because there's a decent chance that it wasn't executed properly the first time, or lacked the nuances you bring to the idea. Regardless -- if your idea has been tested before, I bet you want to know about it.
When you are aware of the earlier attempts of an idea, you can quickly learn from them and either 1) Determine that it won't work (and cut your losses) or 2) refine the strategy and make it work. But, if you never know about those other attempts, your chances of failure are increased.
A competent business plan advisor can provide a lot of value during this research and discovery phase. Reputable business plan consultants not only perform market research, they leverage their existing knowledge and experiences regarding their own businesses and the businesses of their colleagues. This positions them to point out those potential pitfalls and strategies which have failed in the past, as well as strategies that have been proven to work.
This is very important, because unrealistic assumptions can kill a business.
To explore this, let's take an example from a company I just spoke with yesterday. This firm is about to launch a new division offering BPO (business process outsourcing) services. When I asked about their expected sales cycle (the time it takes from when they contact a prospective customer to when they secure the client) they answered 3 to 6 months.
Well, 3 to 6 months is a reasonable sales cycle in this industry. But what if they told me 3 to 6 weeks? Worse yet, what if they went out and succeeded in raising financing -- expecting revenues to come in within a 3 to 6 week period?
Most likely, they would have raised too little money and gone bankrupt while anxiously waiting for prospects to become customers.
There's another piece to business strategy consulting, which involves taking interesting (or even seemingly mundane) ideas from other industries and finding creative ways to adapt them to your business. These types of insights are frequently offered by outside advisors and have been known to result in breakthroughs responsible for transforming entire industries.
Consider roll-on deodorant. The "roll-on" part was inspired by the ball-point pen. Before that, deodorant was packaged in cream form. Or, consider Fred Smith's Fedex. Smith applied the banking industry's method of clearing overnight checks to the overnight delivery of packages. Each of these cross-industry breakthroughs resulted in billion dollar industries.
I'll admit it... As a kid, I hated history class. I couldn't imagine information less relevant to my life than what happened in Europe 600 years ago. But you can't be ignorant about what has happened in the past or what is happening around you -- even half-way across the globe -- because it does affect you. Knowing what other companies are doing, what's working and what's failed -- that's the information that will prevent you from repeating failures and allow you to replicate success.
Who knows? A well-researched busines strategy might just result in a breakthrough that establishes your place in business history.
Related post: How Business Plan Writers Help You Raise Capital
Written by Pete Kennedy on Wednesday, January 7, 2009
10) Keep Launching, Innovating and Growing
2008 was a tumultuous year, and most observers agree that we're now in one of the worst recessions in decades.
While the economy may be in for a bumpy ride, make sure you keep it in perspective
. Don't let all the negative news stop you from moving forward with your entrepreneurial initiatives.
History has shown that a downturn can be a great time to start a new venture. General Electric traces its roots to the Panic of 1873. William Hewlett and David Packard founded HP during the Great Depression. Microsoft launched during the recession of the early 1980s. Disney, Oracle, and Cisco, and countless others took the leap during difficult economic times, and reaped tremendous rewards for their efforts.
One reason that recessions provide opportunities for entrepreneurial companies is because established firms decide to cut back on innovation and growth plans. Don't make that mistake! The key is to be running and growing your business successfully before the market comes back -- so that when it does, you have gained market share and are poised for explosive growth. As we've said before, persistence and optimism
are critical for entrepreneurial success.
For more thoughts on launching a business during a recession, read entrepreneur and investor Andy Liu's excellent entry The Secret to Starting a Successful Company
9) Maximize Your Time and Resources
Running and growing a successful business requires that numerous jobs be performed at once, and well. The start of a new year provides an opportunity to take stock of your most precious commodity: your time.
What are you best at? Where do you add the most value?
Learn how and when to delegate or outsource certain tasks and responsibilities.
8) Build and Improve Systems and Processes
Most successful businesses are successful because they have effective systems in place. For example, if you walk into any McDonalds across the country, and order a Big Mac, you know exactly what to expect.
As Michael Gerber points out in The E-Myth Revisited, it’s critical that entrepreneurs build businesses, rather building an ever-increasingly stressful and taxing J-O-B.
Especially if you're interested in selling your business, you want to be able to walk away from the business and have it continue to run.
7) Build and Nurture an In-House Email List
Whether you run a dental practice, a restaurant, a software company or a social networking website, chances are you could be getting more out of your website traffic.
One way to improve the efficacy of your website is to offer an email newsletter via an online email submission form.
Building and maintaining an email list could be one of the best ROI decisions you make in 2009. Constant Contact and AWeber are two recommended resources for email communications. And, if you run a blog, you can set up blog-to-email newsletters using services like FeedBlitz.
6) Participate in Online Conversations
If you haven't already done so, start a blog, create an account at Twitter, sign up for Facebook, join LinkedIn... whatever your website or tactic of choice, get online and contribute to the conversations about your industry online.
Issue press releases using PRWeb. For an excellent tutorial in online marketing and PR, I recommend reading David Meerman Scott's The New Rules of Marketing and PR, as well as his blog Web Ink Now.
5) Meet More People (Out in the "Real" Offline World)
Join new networking groups to establish relationships and potential partnerships with people and firms in your area. One great way to jumpstart your offline networking is to leverage MeetUp.com. MeetUp.com has thousands of business networking groups. If you don't see a group in your niche, you can even start your own.
4) Get a Life (Outside of Work)
It's critical that you take breaks from your business to enjoy life.
Make a resolution to enjoy physical as well as mental vacations from
your business every once in a while. This is not only good for your
health and sanity and relationships, it's also good for business!
You'll gain relief the stresses of growing your business, and once you
return, you'll be reinvigorated with a new perspective on your
challenges and opportunities.
3) If It's Not Working, Ditch It
Let’s be honest. Not every marketing strategy, fundraising strategy, partnership, or product line will be a winner. If you tried something in 2008 and it wasn't working, you might want to admit that and move on. Focus your energy and resources towards those priorities that will deliver the greatest return on investment (both in terms of time and money).
2) Learn Something New, Again and Again
Make a commitment to continual education. Stay updated on your industry while branching out into new areas of knowledge. Read blogs, books, newspapers, and magazines. An easy way to incorporate learning into your every day routine is to listen to interviews, audiobooks and podcasts. Summary.com is a great, convenient service for integrating business education into a busy schedule.
1) Continually Update Your Business Plan and “To Do” Lists
Update your business plan weekly, monthly and quarterly, depending on what’s changing in your industry and what you’ve accomplished in your business.
Updating your plan can be a critical factor in both your ability to raise capital and your ability to properly execute on market opportunities. The sections that typically require periodic updates include the milestones, competition, management team and financials sections.
To increase your personal and corporate productivity, take advantage of tools like Basecamp which allow you to track tasks and milestones online in a collaborative "wiki" environment.
For a great read on productivity, we recommend The Ultimate Sales Machine by Chet Holmes. As Chet recommends, focus on the daily tasks that are most critical to your growth, and keep the daily “to do” list brief (no more than 6 items).
That's it! I hope you found this list to be helpful for growing your business. Here's wishing you a prosperous 2009!
What is your New Year's resolution?
Written by Growthink on Tuesday, December 23, 2008
Happy Holidays! In celebration of the season, and the entrepreneurial spirit, Growthink has created a video holiday card which you can view below:
Written by Growthink on Thursday, December 11, 2008
Growthink's Co-Founder Dave Lavinsky had the opportunity to speak with entrepreneurship guru Guy Kawasaki last week. Guy is the Managing Director of Garage Technology Ventures. His blog, "How To Change the World," is ranked among the world's top 100 blogs, and he is a successful author. In 2004, his book "The Art of the Start" was a BusinessWeek bestseller.
You can click here
to listen to the entire interview or download the transcript: http://www.growthinkuniversity.com/public/226.cfm
interview, Guy spoke openly about the things to keep in mind when seeking
venture capital, the words to avoid using in any conversation with a VC, and his
"Reality Check: The Irreverent Guide to Outsmarting, Outmanaging, and Outmarketing Your Competition.
" For those seeking capital, there’s also an interesting eHarmony.com vs.
HotOrNot.com comparison to listen for.
Also, we encourage entrepreneurs to visit Guy's site Alltop.com
, specifically these three sub-categories:
* Venture Capital
To listen to the interview or view the transcript, visit this link:
Written by Growthink on Monday, December 8, 2008
Far too many businesses fail to raise capital because they lack the proper documentation, or because their marketing and offering materials (business plans, private placement memorandum, investor presentations) are unprofessional, unpersuasive, inadequate or incomplete.
If you are raising capital from multiple private ("angel") investors, a private placement memorandum (PPM) is a necessary part of your documentation. Unfortunately, however, the vast majority of entrepreneurs and business owners are not familiar with details of preparing a private placement memorandum and marketing a private placement offering. In too many instances, this lack of knowledge prevents them from raising necessary capital, or -- even worse -- it can create costly liability problems.
To assist entrepreneurs, we created this report - "The Top 10 Private Placement Memorandum Mistakes" - to help answer some of the most frequently asked questions. We hope the report will help prevent many of the common errors we see businesses make during the process of preparing a private placement memorandum, marketing it to investors, and raising (or failing to raise) capital from private investors.
Some common questions answered in the report include:
- When do you need a private placement memorandum to raise capital?
- What types of disclosures must be made in a PPM?
- How can you market a private offering, while retaining a Regulation D exemption?
- What types of intermediaries and "finders" can promote a private offering?
- What types of investors can participate in a private placement?
- What are your options for preparing a private placement memorandum?
- How often should you edit or update a PPM?
Click here to download the report: Private Placement Memorandum Mistakes
If you are seeking professional assistance with your PPM, Growthink offers professional private placement memorandum writing and consulting services.
Or, if you're writing your PPM yourself, you can use our Sample Private Placement Memorandum Template to finish your PPM quickly and easily, so that you spend less time "preparing," and more time speaking with investors.
Written by Christiana Moffa on Wednesday, November 26, 2008
Recently, we at Growthink have received a flood of inquiries from entrepreneurs and business owners, asking for advice on how to proceed in these turbulent times.
The fact of the matter is that it is hard to reassure anyone, in light of recent economic circumstances, that there is an upside for business owners who are revising short/intermediate goals or looking for capital. Small, medium, and large companies alike are hesitant to put themselves out there in an unstable, cash-constrained environment.
Yet amidst the seeming cynicism, we at Growthink are still seeing extremely positive movement amongst funds – especially around our headquarters here in California – that have not only the moneys to invest, but also the eagerness for new, niche deals.
Historical patterns indicate that downturns, such as the one in which we presently find ourselves, result in some of the highest levels of new company formation.
What this proves is that entrepreneurs – no matter the ebb or flow of Wall Street and Main Street – are consistently creative people, who seize upon circumstances and leverage them to start and/or grow their businesses. They reflect the American Dream so often referred to in the latest Presidential campaign.
Growthink's mission and vision, as founded by such entrepreneurs, is to help aspiring peers build and set forth strategic plans to gain momentum in their marketplace; and to hopefully attract investment dollars from the right people at the right time.
With all of that said, it comes down to a few key characteristics of good deal-making: confidence, relationships, and perseverance. Just because the opportunities are out there, doesn't mean they are easy to find, qualify, negotiate, or transact.
Our expertise, in working with investors on a daily basis, renders us the ability to quickly identify an outreach strategy, to get to a "yes" or a "no"; and to conduct diligence with interested parties, speeding the time to a closed deal. What this enables our clients to do, rather than expending 100% of their efforts on raising capital, is to focus on the day-to-day operations of their businesses. Ultimately, this is where potential investors want to see busy executives utilizing their skills and capabilities.
At Growthink, we welcome the opportunity to speak with you about our investment banking and consulting services. Should you be interested in scheduling a call, please contact us
with the best day, time, and way to reach you, and we will happily accommodate.
Written by Growthink on Wednesday, November 19, 2008
As a supplement to our consulting practice, we're pleased to announce the launch of Growthink University, our new membership club dedicated to teaching entrepreneurs and business owners how to raise capital for their businesses.
The club assembles 10 years of capital raising expertise and methodologies developed and refined by Growthink, and gives entrepreneurs an additional "Do-It-Yourself" option to perfect their business plans.
Growthink University covers topics including, but not limited to:
The biggest mistakes that entrepreneurs make when trying to raise capital and how to avoid them.
How to overcome the capital-raising challenges faced by first-time entrepreneurs.
The difference between pre-and post-money valuations and making sure you don't get taken by investors.
The ten biggest mistakes that companies make in their business plans.
The winning ways to get meetings with investors -- and the most important things to know before sitting down at the table.
What financial projections need to prove about your business
Go to Growthink University (http://www.growthinkuniversity.com) to learn more.
Written by Jay Turo on Wednesday, November 12, 2008
How many times have you heard someone say, "Don't put all your eggs in one basket"?
When it comes to any kind of investing, this is very good advice.
But, if this is the case, why don’t private equity investors diversify?
Unfortunately, most individual investors in private equity significantly under-diversify their portfolios -- investing in one or only a handful of companies. By so doing, they both greatly increase their risk profile and greatly decrease their probabilities of seeing investment return.
If you want to raise capital,
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