The Luckiest People On Earth


 

The Luckiest People On Earth

This two-and-a-half-minute video has had nearly 8 million views on YouTube so far.

My sister had to stop watching it half way; it made her anxious.

I looked at it VERY differently -- from the perspective of an entrepreneur.

Here it is:

As an entrepreneur, watching this video made me think of the great quote from Samuel Goldwyn: "The harder I work, the luckier I get."

You see, that's what frustrates me about the video. I'm not a big fan of luck that's not predicated by hard work.

Because it sends the wrong message. It sends the message that you can attain success via luck. Which is sometimes, but rarely, true.

To be a successful entrepreneur, you need to create your own luck like Goldwyn did (Goldwyn was born in Warsaw, Poland without a penny to his name). 

You need to work hard and try lots of things. Importantly, you must realize that MOST of the things you try will fail. But with persistence, success will come. Funny enough, a lot of people consider this "luck." 

Was Edison "lucky" when he created the light bulb? Sure he was. In each of his experiments, I'm sure he hoped that he would get "lucky" and invent one which worked. If his first try would have worked, it clearly would have been at least a little lucky. But what about his second, his tenth, or his hundredth tries? Clearly, when he experimented over 1,000 times, it was hard work and not luck that prevailed.

I think that a simple timeline is one of an entrepreneur's greatest tools, and one that helps ensure that you will get "lucky" from good planning and hard work.

This timeline should start with where your business is right now. And it should end with where you want your business to be in 5 years. In creating your timeline, you should provide much more detail for the next 12 months, as you have more control over this time period. What do you hope to accomplish? What dates should you set to accomplish each goal? And so on.

By going through this exercise, you start to realize the numerous steps you'll need to take to achieve your goals. You'll start to better understand the things that might go wrong, or that might be more challenging than you initially thought. And you will have a roadmap to follow. But importantly, remember that many of your attempts will fail or take longer than planned. So build this into your timeline.

And when time passes and you attain your goals at the end of the timeline, many people will call you lucky. But you and I will know that luck had nothing to do with it!

(To improve your "luck" dramatically, have a written plan. See our featured resource below to easily make this a reality for you.)

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Crowdlending for Entrepreneurs Is Finally Here


 

What Is Crowdlending?

In brief, Crowdlending is when individuals lend you money.

This is important because oftentimes banks don't want to lend money to entrepreneurs and small business owners.

Crowdlending eliminates the banks as an intermediary and allows individuals to lend money to other individuals. Another name for Crowdlending is "peer to peer" lending.

A Brief History of Crowdlending

Crowdlending has been around for several years. The biggest two Crowdlending companies/websites are Prosper and Lending Club.

While the crowd-loans on these sites are structured as personal loans to the business owner, they can be used for business use. For example, small business owner and clothing designer Lara Miller has received three loans via Prosper which she used to launch her new website and clothing lines.

Clearly, you could consider taking a loan for your business from a friend or family member. However, with Crowdlending, you have a much larger number of potential lenders. Also, while not being able to repay your loan is always a terrible situation, it's clearly worse when you know and see the lender often.

Additionally, many individual lenders on Crowdlending websites take a portfolio approach. That is, they lend to several people. So one of their loans defaulting may not be devastating to them as it might to a friend or family member making just one loan.

Debt Versus Equity


In brief, raising equity is selling shares of your company. You are not required to pay interest on the funding or the principal back. However, the investor owns a piece of your company and if/when you exit, they will take their share.

Conversely, with debt, you have to pay both interest and the principle back.

It is important to note that equity is oftentimes MUCH more expensive than debt in the long-run. Let me give you a simple example.

Let's say you sell 40% of the equity in your business for $1 million. A year later, you are able to sell your company for $10 million. The investor would get $4 million of the sales price (40%). So, the cost to you of the $1 million investment was $4 million.

Conversely, let's say the investor lent you the $1 million at 10% interest. In that case, the cost of the funding would have been $1.1 million - which is the principle and interest you would have to pay back.

In this scenario, debt funding would have cost you ONLY $1.1 million, nearly 75% less than the $4 million cost of equity funding.

Crowdlending Versus Debt


Crowdlending, gives you several benefits over traditional debt or bank loans:

1) Your chances of raising Crowdlending are much higher since banks reject many more loan applications

2) Crowdlending gets you lower interest rates than banks because you are eliminating the bank as a "middle man"

3) Crowdlending has much fewer requirements with regards to the application and documents you need to submit

4) Crowdlending dollars are generally raised much faster than bank loans

Crowdlending For Businesses

I have been telling entrepreneurs about Prosper and Lending Club for years. Because they are relatively easy and low-cost forms of funding. However, they both have a big negative, in that you can generally only raise loans less than $35,000.

That's why I will thrilled when I recently spoke with Endurance Lending Network.

Endurance has amassed a bunch of non-bank lenders including successful entrepreneurs, wealthy individuals, family offices and institutional investors. And, these individuals lend between $25,000 and $500,000 to businesses - the amounts entrepreneurs and business owners actually need.

Conclusion

Crowdlending is a great new way to raise money to start or grow your business. It's much easier, faster and less expensive than both bank loans and equity funding, making it a perfect choice for most entrepreneurs and business owners.


 

How Reverse Logic Doubled Profits


 

How Reverse Logic Doubled Profits

I find it amazing how many entrepreneurs and business owners get burned by thinking about things incorrectly.
 
Here’s an example from a recent conversation I had with an entrepreneur who sells professional services. His sales were strong, but his profits were weak. In trying to figure out a solution, he started by suggesting he layoff part of his staff. If he cut his staff, costs would go down and profits would go up.
 
However, he then realized that if he had less staff members, he couldn’t close as many sales nor complete as many projects. So, sales would go down about the same as costs, and profits would remain flat.
 
The solution I gave him was to cut costs by reducing his staff (either through layoffs or natural attrition) and to boost employee productivity. Because if he were able to serve the same number of clients with a smaller staff, then profits would rise. In fact, if the staff were pared down enough, he could even afford to pay each staff member more than they currently make.

There are several great example of this “reverse logic” of paying employees more to increase profits.
 
One example is The Container Store. The Container Store has just one employee for every three their competitors have. But, they pay their employees double the industry average and spend 160 hours training them.
 
What is the result of this strategy? The Container Store employees are better trained and happier, and thus provide superior service. All this at a 33% lower cost than competitors.

Interestingly, when The Container Store opened in New York City, it had 100 times more applications than available positions. With numbers like that, they can hire the best of the best each time.

Similarly, Harry Seifert, CEO of Winter Garden Salads gives employees bonuses just before Memorial Day, when demand for its products peak. The bonuses boost morale and cause the company's productivity to jump 50% during the busy period.

Paying employees more to improve performance and boost company-wide profits is a historically proven tactic. In fact, back in 1913, Henry Ford doubled employee wages from $2.50 to $5.00 per day. The move boosted employee morale and productivity and caused thousands of potential new workers to move to Detroit.

Your employees can and should be a source of your competitive advantage. Recruit them slowly and wisely. Train them well. Give them a voice in your company and respect them. And pay them well. When you do this, you’ll have employees that perform at three times the level of your competition. And even if you pay them double the industry average, you’ll still have huge profits and outperform your competitors.

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My #1 Tip for Super Fast Business Growth

What’s my best secret for accelerating your business growth?

It’s simple, actually: Get other people to build your business for you.

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Most entrepreneurs are making a big mistake: they’re trying to do everything themselves.

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To build a truly successful business, you need a “Dream Team” to help you turn your vision into reality.

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How to Replicate Billionaire Entrepreneurs


 

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

Sara Blakely's story is one of my favorites. Sara is the founder of Spanx, a multi-million dollar undergarment company. At age 47, she is one of the youngest self-made billionaires in the world, and last year she was among the top 100 most influential people in the world.

Sara Blakely's business is worth an estimated $1 billion, and her products are sold in more than 11,500 stores in over 40 countries. Spanx generates $250 million in revenue a year, and the company has registered huge business growth within the first few years.

Sara started as a sales trainer by day and a stand-up comedian at night, then she slowly began to educate herself about pantyhose patents - she wrote the patent alone, it was approved, and then she trademarked her products under the name Spanx.

Sara started from scratch and she did everything alone, from designing the product to advertising it. The keys to her success include: she had enough ambition and determination to launch her own business, she had an original idea that was unique and stands out, and she did a great job branding her product.

2. Sheri Schmelzer
 
Initially a stay-at-home mom, Sheri Schmelzer is now a millionaire. Her secret? She managed to build an empire on Crocs! Sheri started a basement business named Jibbitz, where she sold mini faux flowers and other accessories for the highly popular footwear Crocs.

In the first year, she managed to sell 8 million pieces worldwide!

Everything started when Sheri and her children decided to do something to decorate their Crocs and make them look more appealing. People started seeing the accessories and wanted to buy them. Several months later, the Crocs Company agreed to buy the family business for $10 million, with a commitment to pay another $10 million in the future based on result.

Her key to success was that Sheri simply was able to carve out a niche, leveraged her creativity, was able to quickly scale her company based on early success, and worked hard to make sure her company succeeded.

3. Mark Zuckerberg


Mark Zuckerberg is perhaps the most popular self-made millionaire of recent times. He is the founder and CEO of Facebook. Mark is one of the youngest billionaires in the world - his personal wealth is currently estimated at $72.8 billion.

Initially, Facebook started as a social network designed for Harvard University students only - now, it is the largest social networking platform in the world, with over 2.19 billion monthly active users worldwide.

The idea of creating this website came from a desire to connect with others - he did not create the website for money, but rather, because he wanted to create an open information flow for people. He was subsequently able to properly scale the business, raise funding, and modify his business model to bring in revenues and profits.

4. Stacey Bendet

Stacey Bendet is the founder of Alice + Olivia, a very successful women's clothing and accessory brand which generates annual revenues exceeding $50 million. Stacey started the business with her classmate, Rebecca Matchett, and their collections are now sold in over 800 stores worldwide.

The success of the company relies massively on Stacey's creativity and vision - she has always been very sophisticated and she wanted to share her creativity with the entire world. She's also a hard worker that surrounds herself with other hard workers and great thinkers.

5. Andrew Mason

Last, but certainly not least, Andrew Mason is another popular millionaire whose company generates annual revenues exceeding $350 million. Andrew Mason is the founder of Groupon, the most popular and most accessed coupon site which has been valued at $1.2 billion.

Known for its massive business growth, Groupon is available in major cities throughout the world and offers discounts from local businesses.

Andrew Mason was born in Pittsburgh and he was brought up in a family of entrepreneurs. Mason identified the bargain hunting trend on the Internet, and he used it in his best interest.  He created Groupon for people who wanted to get the best value for their money, and for business owners who wanted to raise brand awareness.

Mason identified an opportunity, capitalized on it, and became a highly successful entrepreneur.

Now It's Your Turn


How can you replicate the success of these five entrepreneurs?

Whether you are building a company based on labor of love, innate talent, or a perceive market trend, the opportunity for explosive growth and massive wealth is out there.  Millionaires are made every day, even in "bad" economies.  Creativity and perseverance can and will transform your ideas into empires.


 

Are You a Stealth Manager?


 

Are You a Stealth Manager

My first job, 25 years ago, was at a market research firm.

About six months into the job, I had an idea for a new product.

My idea -- rather than giving clients access to a large database of information, I took the database and created pre-defined reports that allowed them to access key pieces of data quickly and easily.

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.

And the result?

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.

------------------------------------------------------------

My #1 Tip for Super Fast Business Growth

What’s my best secret for accelerating your business growth?

It’s simple, actually: Get other people to build your business for you.

In other words, Build Your Dream Team <-- Click Here

Most entrepreneurs are making a big mistake: they’re trying to do everything themselves.

But that’s not a recipe for business success -- it’s a recipe for burnout, frustration and failure.

To build a truly successful business, you need a “Dream Team” to help you turn your vision into reality.

And I created this training to show you how to do it right.

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How to Find a Venture Capitalist: The 5 Best Places


 

How to Find a Venture Capitalists The 5 Best Places

Do you have a great business or business idea?

That, with an infusion of millions of dollars could become a huge success story?

If so, you should be talking with venture capitalists or VCs. As you probably know, VCs are the folks with the big checkbooks. Who have funded numerous successful companies like Google, Yahoo, Ebay, Twitter, Federal Express, and more.

So, how can you meet a venture capitalist?

Well, the best way to meet a VC is to be introduced to them. Perhaps you have a consultant that knows a VC. Or a lawyer that knows a VC. Or a Board Member that knows one. Etc.

But, even if you are extremely well connected, it's virtually impossible to have a connection to every VC you want to meet.

So, below I've included the six best places to meet VCs.

1. Meet Them on Their Blog

Most of the top venture capitalists maintain their own blogs. For example, VC Brad Feld's blog is located at www.feld.com, while VC Fred Wilson's blog is located at www.avc.com.

Once you find the blog of the VC you would like to fund your company, read their blog posts. And then comment on them. Your comments should add valuable insights to the posts; showing that you're smart and someone the VC would want to know. After a few comments, the VC will start to recognize you. And when they respond to one of your comments directly, you'll have the chance to respond asking them if they'd like to meet in person.

2. Meet Them on Twitter

Many VCs are active on Twitter.  So find them on Twitter and then follow them. See what they're posting about and use that to start a dialogue with them (via direct messaging, replying to a tweet, etc.).

3. Meet Them on LinkedIn

LinkedIn makes it very easy to find and get connected with VCs. As you grow your LinkedIn network, you'll gain more and more connections to VCs.

Once the targeted VC is in your network, send them a LinkedIn message.

4. Meet them at Industry Events

All industries have events. And at these events venture capitalists who are interested in funding companies in that sector will come.

For example, next month I will be attending the AdTech conference in NYC to learn about the newest online advertising technologies. One of the speakers at the event will be Tim Chang, the Managing Director of Mayfield Fund.  In addition to Tim, I'm sure lots of other venture capitalists will be there.

5. Meet them at Local Events

Every major city has local technology and other events that attract venture capitalists.

One of the best ways to find out about these events is at http://www.meetup.com/.

I just searched on "venture capital" within New York City and found tons of local events that VCs will be at. Most smaller cities have less, but still plenty of events for you to attend to meet the right VCs for your business.

6. Meet them via Email

The final way to meet venture capitalists is via email.

Many VCs still list their email addresses on their websites. If not, subscribe to a database that offers them, or simply call the VC firm and ask for the email address.

VCs get tons of emails, so just send them a teaser email with no attachments (teaser emails give just a few exciting points about your company to get the VC interested).

So, there you have it. Even if you don't have any connections to VCs, you now have six places you can go to find them and contact them. And once you do, you could be on your way to a multi-million dollar funding check which allows you to build a phenomenally successful business.

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How to Raise $1 Million or More

If you need millions of dollars in funding to build your business, you should raise venture capital.

Click here to discover the proven formula for raising venture capital funding.

When you click, you'll learn why the "old fashioned" way of raising venture capital is dead.

You'll learn why mastering the "T-Factor" is key to raising venture capital.

And you'll learn much more when you click here.

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The One Thing Every Venture Capitalist Wants


 

The One Thing Every Venture Capitalist Wants

A venture capital firm is a financial institution that focuses on providing capital, in the form of equity, to companies who offer them the prospects of significant growth. 

The partners and associates at venture capital firms are known as venture capitalists. The term "VC" or "VCs" applies to both venture capital firms and venture capitalists. 

Unlike angel investors, who invest their own money, VCs are professional institutions that invest other people's money. VC firms raise capital for their own funds from sources which primarily include pension funds, financial and insurance companies, endowments and foundations, individuals and families, and corporations.

The VCs are then charged with providing a solid return on investment on this money. This is the one thing that every VC wants. By providing a solid ROI to their investors, VCs earn bonuses and raise more funds so they can stay in business.

VCs earn returns for their investors by finding high growth companies, making investments in them at favorable terms, guiding and nurturing them, and enacting a liquidity event (e.g., selling the company or having it complete an initial public offering).

Because they are utilizing other people's money, and are judged and compensated by the performance of their investments, venture capitalists are extremely rigorous in their investment decision-making process.

Importantly, VCs tend to only invest in companies with significant market potential of $50 million, $100 million or more. 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 to 100 times or more on their investment.

Industry insiders sometimes refer to the 2:6:2 rule. This rule is that an average portfolio of ten VC investments will include two losses (e.g., companies go bankrupt), six moderately performing companies (may break-even on the investment or lose a little) and two very successful returns.

In fact, an analysis by Bygrave and Timmons of VC funding found that just 6.8% of investments returned ten times or more on the invested capital (these "home runs" are what give VCs high overall returns). Conversely over 60% of investments lost money or failed to exceed the amount of money earned if the capital had been put in an interest-bearing bank account.

The result of this analysis is that typically a venture capitalist will want to see the ability to get 10X their money back or more from investing in your company (they are seeking "home run" investments which compensate for the 60% of their investments that don't pan out) . As such, for every $1 million you are seeking from VCs, you must show them a realistic scenario where you can turn it into $10 million.

So, importantly, when approaching venture capitalists, remember 1) their primary goal is to make significant money from investing in you; and 2) you need to show them how they can earn a 10X return.

Now, if your company can potentially give VCs a 10X return, then seeking venture capital might be right for you. However, raising 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 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.

------------------------------------------------------------

How to Raise $1 Million or More

If you need millions of dollars in funding to build your business, you should raise venture capital.

Click here to discover the proven formula for raising venture capital funding.

When you click, you'll learn why the "old fashioned" way of raising venture capital is dead.

You'll learn why mastering the "T-Factor" is key to raising venture capital.

And you'll learn much more when you click here.

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The Two Most Important Quotes In Business


 

If you don't know Peter Drucker, you should: he's known as the man who invented modern business management.  He wrote 39 books on the subject and is widely regarded as the greatest management thinker of all time.

And Peter Drucker is credited with two of the most important quotes in business management.

Here's the first: "If you can't measure it, you can't improve it."

When you think about this quote, it should immediately become apparent how true it is. Because, if you can't measure something, and know the results, you can't possibly get better at it. For example, it's nearly impossible to lose weight without stepping on a scale once in a while to measure your results - if you don't, you have no idea if you are succeeding or not.

Or it's like trying to improve your golf game, but never keeping score, so you don't know if you're actually getting better or not. Makes sense, right?

Now, in business, Drucker's quote is particularly true. If you can't measure every part of your business, you can't manage or grow it.

For example

  • Do you know the number of new website visitors you received in the last 30 days?

  • And do you know what percentage of them turned into new paying customers?

  • And do you know how the level of satisfaction among your customers has fluctuated over time?

  • And do you know the precise average lifetime value of your customers?

There are nearly 50 questions such as these that measure each aspect of your business.

And if you don't know the answers, if you can't measure them, then you can't possibly manage or improve them.

And that's why your sales are too low, profits are too low, employee performance isn't high enough, and you need to work too hard and can't take enough time off.

Now, let's move on to Peter Drucker's second famous quote: "Management is doing things right; leadership is doing the right things."

Let's start with the first piece of this critical quote. "Management is doing things right." Well, as we learned from Drucker's first quote, you can't manage and you can't do things right in your business if you're not measuring it. So that's not happening and it's hurting your business.

And now the second piece: "leadership is doing the right things." So, my question for you is this: are you doing the right things in your business? Now before you answer this, let me ask you this: do you know exactly what you should be doing, every single day, to generate the most value from your time?

For example

  • Do you know when you should focus on improving your website?

  • Do you know when you need to spend time on improving customer satisfaction?

  • Do you know how much attention you need to give to securing new clients?

  • And do you know when you should focus your time on better training your team?

Unfortunately, most entrepreneurs and business owners don't. Or their businesses would be much more successful than they currently are.

I give you these two Peter Drucker quotes along with their interpretation to help you figure out the answer to the question, what is the #1 Business Mistake you are making.

Which for most entrepreneurs and business owners is this: Your #1 business mistake is that you're running your business blind!

You're not measuring your performance throughout your business, so you can't improve. And worse yet, you don't really know what you should even be focusing on

It's like running around in a maze, and you haven't kept track of where you've been, and you're not sure what to do to get out.

But don't take it personally, virtually all entrepreneurs and business owners operate like this. And that's why business failure statistics are so terrible. As you might know, according to Dun & Bradstreet, 91% of businesses fail within 10 years. And according to United States Census, only 3.9% of businesses make it to $1 million in sales. And only 0.6% of businesses make it to $5 million. And less than 0.1% make it to $10 million and above.

The reason for this lack of success is that these entrepreneurs and business owners are running their businesses blindly. They are not measuring performance, so they can't improve. And they are focusing their time on the wrong areas of their business.

Now the good news is that there is a solution to this common problem of running blind. And it's called BI or Business Intelligence. Business intelligence or BI refers to computer-based techniques used to spot, dig-out, and analyze business data, such as sales, marketing and production in order to make significant improvements.

Importantly Business Intelligence uses the data you already collect in your business. For example, if you have a website, you probably have Google Analytics or another program installed that captures key information like the number of visitors you have to your website each day, where they are coming from, and what pages of your website they are visiting.

And you're probably using an accounting software like Quickbooks that includes information about your revenues, expenses and cash balances. And you might be using a customer relationship management or CRM system like Salesforce.com that identifies the number of leads and sales you generate.

And you might be using an email management system like Constant Contact or MailChimp that shows how many email subscribers you have and how often they open or click on your emails.

With the right Business Intelligence system, all the information from these applications and programs you already use automatically and in real-time is entered and analyzed. So you can quickly see, manage and improve your performance.

Importantly, you not only measure performance so you can improve it, but you instantly spot weaknesses in your company. And those are the areas you should focus your attention on. Remember, "leadership is doing the right things" - now you'll know exactly what you should be doing.

Ready to stop operating blindly? If so, check out Growthink's Business Intelligence solution, The Growthink Dashboard, by clicking here and start expertly managing and growing your business.


 

How to Contact Investors


 

If you've purchased any of my capital-raising products or followed my essays, you've undoubtedly heard me say that you should never send an investor your business plan cold. (By "investor," I'm mainly referring to venture capitalists and angel investors.)      

Rather, you should always start with a "teaser" email. A "teaser" email is an email that "teases" the investor by giving them a bite-sized amount of compelling information about your company.       

The goal of the email is to see if they are interested. If they are, you will follow up with more information (maybe your Executive Summary and/or full business plan) with the goal of getting a face-to-face meeting with the investor.     

There are two reasons you shouldn't send your business plan in your initial email. First, you don't want to "over-shop" your deal. Over-shopping is letting too many investors know about your company. If too many investors know about you, the law of numbers states that many investors will pass on investing in you (remember, most investors passed on the opportunity to invest in Google years ago).

So, if an investor isn't even interested in your market space or teaser email, they certainly won't invest in your company. And here's what can happen -- an interested investor asks this investor (the one who isn't interested in your space) if they've heard of your company. That investor says "yes" (since you unwittingly sent them your plan) and that they weren't interested. And then their disinterest persuades the once interest investor from funding you.

The second reason you don't want to send out your business plan in your initial email is for confidentiality reasons. You just don't want your business plan out there for everyone to see. Rather, wait until the investor shows that they are at least somewhat interested in your venture before sending it.

So, now that you know that you should start by sending investors a "teaser" email, the question is what to include in the teaser.

Here's the answer: the teaser email should include 5 to 6 bullets about your company and should be very short (200 words or less).  The goal, once again is simply to create a general interest in your venture so the investor commits time and energy to learning more about it (by requesting additional documents or setting up a meeting).

Your bullets should describe what space your company is in and credentials that make you uniquely qualified to succeed (e.g., credentials of management team, customers serving already or showing interest, etc.).

Now one of my subscribers asked me a great question the other day --  what should my subject line be on my teaser emails?

In fact, she said that she felt subject lines such as "Unique Investment Opportunity," "Please Invest in our company," and "Great Investment Opportunity" don't catch investors' attention and/or could turn them off.

And she is 100% correct here.  You should never send emails with subject lines such as these to investors.

So, I put together a few Subject line "templates" for you to use here:

1. Re Your Involvement in XYZ Company

Where XYZ company is a company that the VC has funded and which is in your general space. You would start the email with something such as "based on your investment in XYZ company, I think you will be interested in what we are doing..."

2. "New in XYZ Space" or "XYZ Space Introduction"


Where XYZ is the "space" that you are operating in (e.g., the financial software space). The first line would tie the subject line to what you are doing.

3. Referred by XYZ

Where XYZ is a referral source that knows both you and the investor. This works extremely well, but clearly you must first get the referral.

4. Comment on Your Post About XYZ

Where XYZ is a post that the investor recently wrote on their blog about a subject. In your opening line you explain what you agree with in their post and then tie it to your company.

To summarize, send investors a teaser email instead of your business plan to start. And realizing that they receive hundreds of emails every day asking for funding, make sure your subject line stands out and seems like you're offering them value.

 

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The Big Secret to Raising Venture Capital


 

The Big Secret to Raising Venture Capital

Years ago I served on a funding panel with Tom Clancy. At the time, Tom was a partner at Enterprise Partners Venture Capital in San Diego.

At the time, many venture capital firms were licking their wounds. They had funded a ton of companies during the tech bubble phase, and most of them had failed.
 
This led Clancy to make an important decision. He said that going forward, Enterprise Partners would wait at least six months before funding any new company they met.

The rationale was solid. During the six months, he would see what the entrepreneur was able to accomplish. If the entrepreneur accomplished the milestones set forth in their business plan, than they were deemed worthy and would receive funding. If not, they would not.

So what is the entrepreneur to do during the six months in order to get the investor to write them a check?

Obviously they need to achieve milestones... But what else?

Before I give you an answer, I want you to know how crucially important this is, not only in raising capital, but in securing key partnership and gaining key customers.

Let me give you an example of an entrepreneur who successfully used this technique in order to get a key partner. This entrepreneur’s name was Chet Holmes. And one of the key reasons that Mr. Holmes achieved success was through his partnership with marketing guru Jay Abraham.

How did Holmes get the partnership with Abraham? Like many people, he tried to reach him by phone, fax and mail. But Holmes did it every other week...

...FOR TWO YEARS!!!

Then, he finally got a call from Abraham's business manager for a lunch appointment, flew to Los Angeles for lunch, and established a very profitable partnership.

So, what's the answer to the question of how to woo investors, customers, partners, advisors, key hires, and more over six months?

Effective and persistent communications. In other words...

FOLLOW UP.

You must consistently, over a period of time, hammer home your message to investors, key customers and others.

What exactly does this mean? For investors, once you meet them, you should follow-up with them at least twice per month to update them on your progress. For prospective customers, you should contact them on an ongoing basis to continually give them value and convince them of the benefits of working with you. And of course, don't forget to follow-up with your existing customers.

And a key here is that this follow-up should NEVER END unless or until the costs of the follow-up clearly outweigh the benefits.

Remember that people invest in, buy from, and partner with other people. So, who would you rather work with? Someone who has been contacting you for two years with quality messages regarding why you should partner with them, buy their product or invest in them? Or someone who you just met yesterday and tells you how great they are?

The answer is clear.

Don't stop at the first contact. Choose the appropriate frequency (i.e., you don't want to be perceived as too obnoxious or pushy to potential investors), craft quality messages, achieve your milestones, and convince investors and others to work with you over time.

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