Raising Money To Start A Company, Part I

How To Know When You're Ready for A Cash Infusion?

Frankly, you probably aren't ready to ask for money. Why? Because usually the problem with launching a business or product ISN'T whether you have enough money, but more rather how much VALUE you're providing. And, most entrepreneurs who are drawn to raising quick money aren't serious about keeping their business or building a strong business in the first place.

I have a few questions to determine whether you're ready:

Have you articulated your message well?

Are you delivering high quality products and services on time and under budget?

Do you have a solid team built who can help you grow your business?

Do you have a stream of customers starting to line up outside your door?

If so, your word-of-mouth will grow your business, and you may never need money. However, that is when you will most likely be able to receive money. If you don't have "yes" answers to the above questions, I'd suggest you tighten up your business FIRST before going after the money.

I often receive inquiries from entrepreneurs about how to raise money for their business. Well, I can help you write a business plan. I can also help you approach entrepreneurs. But if you haven't addressed the above information properly, it won't matter. No matter how much money you have, if you don't have a good business model you won't success. On the flip-side, if you DO have a good business model and you ARE winning new clients, getting funding will be much easier.

Then, it's simply a matter of making sure your financial numbers and projections are in order, and approaching the appropriate resources for the cash infusion you seek to GROW your business.

The problem with most people who are seeking to get money quickly is they are ignoring business basics and failing to develop a solid base of business BEFORE going for the cash. Now, in the case of the dot-com era, there was an exception to the rule. Many companies wanted to get online quickly and build it first, so they could establish market dominance. However, if you notice, there is still probably room for a company to sell books online successfully, even though Amazon, Borders, and Barnes & Noble already have a strong market established. In addition, there is probably still a market for a better or faster web browser, although my guess is that the next killer application online won't be a browser at all.

True innovation often leads to breakthrough products and services. Have you put out the effort to innovate? If so, you'll attract the business you need to succeed.

Now, if your situation is that you've covered your bases, you have a basic business plan, you've built a team, you have a product, you're making sales and making money, and want to raise money, then let's talk about getting you quick money for your business.

You'll need to answer the questions:

"How much do you need?"

"Why should they give it to you?"

"How soon can you pay it back?"

Once you can answer these questions, and you have a stream of happy customers starting to line up outside your door, then email me and we'll go from there. Stay tuned for Raising Money To Start A Company Part II (coming soon).
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Be A Better Entrepreneur: The Savvy Entrepreneur Series, Part II

If you have an inkling of an idea, you might be considering becoming an entrepreneur.

Entrepreneurs have an interesting life, without a doubt. If you want to be an entrepreneur, you'll learn many skills you might not posses from the corporate world, for sure. And, thankfully, there are wise owls willing to share their experience with us. For my part, I'll share what I've learned with you, and point out several aspects of entrepreneurialism I discovered the old-fashioned way: from the school of hard knocks!

Keys To Becoming A Better Entrepreneur

1. Your "Big Idea" is just that. Somewhere between 5 and 500 other people in the world may have had the exact same light bulb moment you did. The only difference is who will ACT on their big idea.

2. Your "Big Idea" is just a beginning. Where do you go from here? How do you create a plan? What ways might you implement your strategy? Who will you hire? Where will you base your headquarters? Who should you hire to help? There are so many questions facing entrepreneurs - start to make a list of ways you think you might need help. Then seek out resources to help you in your journey.

3. Most companies do not fail because their idea stinks. Most companies fail because their execution stinks. What am I talking about? Well, for starters, how well are you managing your money? This is the #1 place businesses fail.

(# Months) Life of business = $ in bank - burn rate per month + new money in.

This is the bottom line. Yep, cash IS king! If you're able to get your ego out of the way, you might look at this first:

a. How much money are you bringing in versus how much money are you spending?

When you can answer that question and the money in is greater than the money out, you're getting somewhere!

What's the next biggest area of execution where people fail? They go it alone. It isn't easy to be an entrepreneur. It's even harder to do it by yourself. This is why my firm, ARRiiVE Business Solutions, has two "i" letters (and why they're emphasized) -- because you no longer have to feel you're launching your product by yourself. I help you and we're now a team! i and i is the Rastafarian way of saying "we" so why not "i" and "i" doing it together?! Anyway, decide what kind of help you want on your team: marketing, legal, financial, operational, managerial, sales, support, HR, etc., and go get it. Most companies need help with either marketing or operations. The positions I've hired or outsourced have been marketing 60%, operations 25% and legal and financial the remainder. Make sure, at the least, that you have a good attorney and a good accountant. Their advice is always handy.

b. Get good help. Most entrepreneurs have a difficult time getting past their ego. If you can't get beyond your own "I think I know the answer" problem most entrepreneurs suffer from, you won't ever lift a finger or write a check to get help from people who can and will help you. I'd start with your operations. Make sure you have a solid product or service to offer FIRST, then you'll have a solid way to make money.

c. While you're getting help, make sure your marketing is in order. Most entrepreneurs skimp on part of their marketing. Perhaps they think that saving money in this area is wise, but it is the wrong place to save (I'll say more on that in a bit) but no -- make sure you spend money where you need to in order to have solid marketing.

Critical Marketing Success Tactics

1. Get A Logo. Your logo represents what you do. When I designed my first logo, I hired a graphic designer to help. (See www.AspireNow.com). My second logo, third, fourth, and fifth, I hired out help, too. Now I design logos for others whenever I want the side work, see www.ARRiiVE.com for an example of a logo I designed.

2. Professional Business Card. Hire a professional designer and use proper card stock. You'd be surprised how much more seriously people take you when you make this one simple change. If you're using the Avery ink jet printer cards, stop right now, call me. I can help you. The layout on your card is as important as the stock. I've also seen people skimp thinking they know graphic design (artists, especially) and then after I get through with their card, they always thank me for improving their card design.

3. Professional Website. Get your website right. Don't start big (like I did) start small. Keep it simple. Then focus on getting the word out and building traffic. The good news is that today you can start a website far less expensively and with much more power than when I started AspireNow.com. The bad news is that there are MILLIONS of sites you're now competing with. You'll likely need to hire an expert who knows how to get Top 10 position on Google and can teach you tricks how to drive traffic to your site (hint, hint). I have designed many websites. At ARRiiVE Business Solutions, I still offer web design as a service even though I now outsource 98% of this work. This is a good thing, because you gain extra eyeballs on the site design challenge and also gain another expert's opinion in the process, along with someone who's been there and done that and also understands layout AND sales copy. I find this useful to my clients and they're happy with the end-result.

4. Off-line Promotions. Are you going to trade shows? Are you going door-to-door? Are you speaking publicly about your services or related topics? (Speaking drives a considerable stream of revenue to my business). Have you created a nice 3-part brochure that showcases your product(s) and service(s) properly? Again, hire it out, do it right. But once you have the material to hand someone, you have to take ACTION and get out there. Go to networking events. Leave them with something but always ASK FOR SOMETHING in return. How can they help? Who do they know? Can THEY use your service?

5. Hone your Sales Skills. Entrepreneurs must learn to sell or they will fail - period. You must be a good salesperson. Right now, I offer a lot of sales advice at the ARRiiVE: Innovations In Business blog. You can browse around there, although sign-up for the blog on email because in the future I'll be offering video training to help you improve your sales techniques and grow success.

6. Improve Your Marketing Pitch. When you can say what you do in 20 seconds and people get excited and ask you to meet with them, you've got your pitch refined. Seriously, that's the essence of it, right there. Test it, test it, test it, practice saying it BEFORE that important contact at the mixer you attend, so you have it right on target there and capture what you need from those vital interactions.

There's so much more to being an entrepreneur... if I could leave you with one super-valuable piece of advice I learned the hard way: downsize your expenses immediately. Many entrepreneurs only give themselves 6 months worth of money to make it. We all read how it takes entrepreneurs up to 5 - 10 years to succeed, but then why would we only allow our self only six months? This is stupid. It is ego. Take out your ego and downsize immediately if you are serious about making this dream a reality. Sell your house, drive a less-expensive car, get rid of HBO, do whatever it takes, but downsize your bills. Figure out how to give yourself a 5 year money plan and then spend your money wisely.

If I had done this one step of advice I just gave you, I would have incurred zero debt during my first five years of business. Instead, I continued to live in an expensive house, drive a nice truck, and kept the cable bill on. Be smart with your money, and then figure out how to make more money quickly, and build, and improve, and learn, and improve. Notice I said "learn" not fail. I don't view failure as failure unless I failed to learn from it. So, I say learn, build, improve, learn, build, improve... it's a multi-part process. We will take a step back once in a while. But learn and then go two or three steps forward.

Take a deep breath... exciting days are ahead of you!

Coming soon:

Be Different: The Savvy Entrepreneur Series, part 3 of 10.
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The Value Of Starting Small - The Savvy Entrepreneur Series, part 1 of 10

Welcome to "The Savvy Entrepreneur Series - Part 1 of 10 - The Value of Starting Small"!



It is valuable to start small if you aspire to be a savvy entrepreneur.

When entrepreneurs dream, they often dream large. Is that good or bad? Well, if you ask many people, the problem with dreaming large is that large projects require large money to get off the ground. I recall my first seminar I launched. Rather than start small, with a handful of people in the room, I "dreamed large" and booked a room that held 600, scheduled guest speakers, booked a band, and so forth. I then went on the radio and promoted this seminar. Several days prior to the big event, we had less than 20 sign-ups for this seminar and realized I ought to have dreamed a little smaller when I launched the seminar. Or, at least I could have started smaller and held the bigger dream as a future goal. I ended up pulling the plug on that seminar after I realized a small turnout wouldn't cover overhead and lost about $2,000 in promotion fees plus a considerable amount of valuable time. It also gave me a little egg on my face at the time, too.

My point: start small.

The biggest mistake entrepreneurs make is starting too big, or even "acting" like they're big. Hey, if you're small, that means you're nimble. Be quick. Be nimble. And be DIFFERENT. This is the value of being small. Capitalize on that value. Start small and ACT like you're small.

Match your marketing with what you offer:

Don't act big when you're not big. Act small and promote the strength of being small to your clients.

If you're seeking ways to grow your business, don't be afraid to admit you're not a huge company. I'll admit that ARRiiVE Business Solutions is not a big company at the time of this writing. Will it grow? Probably. Do I need to act bigger to succeed with my products and services? Not really. Because people who hire me KNOW that I have an extensive network of resources at my fingertips. If my team can't get the job done, we know who to outsource work out to in order to complete stellar work at a highly reasonable fee.

Make sure you deliver what you need to deliver:

Maximize what you can do. Outsource what you can't do that is directly related to what you can do and need to deliver. Don't do the rest.

Make sure that you know your products and services. Build your team to deliver those services. And, if you can't hire permanent employees, build a network of outsourcing partners who enable you to deliver high quality work. I've been doing this successfully at ARRiiVE Business Solutions for several years, now.

Keep your start-up costs low:

When we start small, we can keep our cost structure low, develop a core service, then repeat and grow our marketing message until a massive number of customers consider us a valued business partner. From there, we can grow bigger. Use your noggin and be a quick, nimble, savvy small fish in a small pond and you'll eventually grow to be a bigger fish who can jump to a bigger pond.

Coming soon:

Be A Better Entrepreneur: The Savvy Entrepreneur Series, part 2 of 10. ________________________________________

Copyright © 1999-2008 by ARRiiVE Business Solutions. All Rights Reserved. SUBSCRIBE.