Here
are just a few tips picked up from some our sponsors
and board members:
If
you have a tip that you want to share with other entrepreneurs,
please email it to us at contact@njef.org.
Please include a little background information about
yourself as well.
Venture
Borrowing Techniques
Venture
capital isn't everything and it isn't always available
anyway. Sometimes you have to consider alternatives,
and think "out of the box."
We
don't address debt financing very often at the Forum
because so many early stage entrepreneurs think only
in terms of equity financing and don't realize there
are people out there who can become involved in other
ways and still provide you with the capital you need.
That's what venture borrowing is all about.
Do
you need a new server or other equipment in order to
host that web site?
Is
working capital running a little thin?
Do
you have an aversion to giving up a lot of equity in
your company but still have a great opportunity - if
you could just secure some additional capital?
Perhaps
venture borrowing or venture leasing is for you. Sometimes
there are advantages of debt financing - like holding
on to your equity and giving up warrants instead of
shares. That way your backers share in your success
instead of hindering it, and they seldom want to be
on your board.
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Taking
Your Compnay to the "Next Level"
by Jeff Milanette of Innovative Partners, Inc.
First and foremost, make a business plan for the New Year.
Think about what you have to accomplish in order to increase
revenues, consider the implications of executing that
strategy for every aspect of your company and plan accordingly.
Invest
in your most important asset - yourself. If you need
some extra skills to manage more effectively, get some
training. There are many business seminars and short
term training opportunities that are offered for business
owners, ranging from accounting to managing tax issues.
Entrepreneur University provides training covering most
of the basic skills in starting, managing and financing
a new company. Find other opportunities in the newspaper,
online, at your local county college, and by word of
mouth. Remember that your employees might become much
more productive with some additional training, too.
Do
a serious sales projection, and think about how many
new customers you could win over by making personal
sales calls (a personal telephone call to the CEO is
a good second choice). Next, make a schedule to contact
those prospects a few at a time over the course of the
next month - then do it!
No
one is indispensable. Train your closest subordinate
to handle the day-to-day managerial tasks in the office
so you can get out more and meet your prospects - and
stay close to your customer. If you get sick this winter
it will be a decided advantage if someone else knows
how to complete those tasks while you're eating chicken
soup.
Invest
in some new equipment and save yourself some time.
If your computer is more than three years old, youÕre
probably spending too much time waiting for programs
to load or getting on the Internet. Just adding another
32 Megabytes of memory could make you think it's a
new machine, so could a cable modem or DSL line? Perhaps
your staff might be more productive too, if they didn't
constantly have to nurse ancient equipment.
What
about some additional financing? Money seldom solves
all problems, but in almost twenty years of business
consulting I have seldom seen a company that couldn't
benefit from an injection of working capital. If you
need some extra cash to buy that new equipment, or expand
your marketing program, consider taking a short-term
loan to cover all or part of the expense. Interest rates
are presently low, and you'll be investing in your own
success.
Get
professional help. Thinking that you can save money
if you do it all yourself frequently costs you more
as you struggle to ascend the learning curve. Why not
hire someone who has the skill set you need rather than
depending on your brother-in-law or one of the kids?
Accountants, attorneys, and consulting professionals
should all be considered part of your management team.
Use them more effectively by assigning them the tasks
you can't do yourself. Sure, it costs you, but not getting
the work done can cost you more in terms of lost business
and dissatisfied clients.
If
you're just starting out, consider moving into a business
incubator as a launching pad or development location
for your business. Incubators can save you a lot of
time and rent by providing shared services so you don't
have to buy a copier or fax machine, or rent a conference
room. Most important, incubators provide the advice
and counsel of an experienced manager who can act as
your advisor. Tenant companies in business incubators
have a survival rate exceeding 80% - a significant contrast
to that of most new companies. (The State of New Jersey
supports incubators at Rutgers University, Stevens Tech,
NJIT, Burlington County College and other locations
as well.)
Look
into establishing a company website. The Internet is
clearly not just a craze, and the ability of a new company
to be more credible and look like a larger company is
obvious. There are plenty of website developers in New
Jersey and you can have a website created for your company
for as little as a few hundred dollars. There are in
excess of 50,000,000 users on the Internet today. How
many are potential customers and clients for your company?
Can you afford not to participate?
In
the end it's all about execution. If you have the time,
talent and dedication you'll eventually be successful,
but clients demand that you provide what you say you
can provide, or service the products you sell them.
Now start your plan!
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Don't Sell Solutions. Sell Problems!
by Marv Preston of NewMarkets, Inc.
Ventures
created around the "better solution" are common. The
excitement of discovery and urgency to implement that
better solution often cause entrepreneurs to overlook
defining and locating the problem.
It's
easy to assume that a big company will purchase the
better solution that you have created. However, a big
company buys nothing – your better solution will
be purchased only by the authorized decision-maker
within the company that has the appropriate problem.
The decision-maker that you need to deal with has the
responsibility for addressing a collection of problems.
He has too little time to learn all about each of the
problems over which he has authority. This individual
will rarely purchase a solution from the aggressive
salesman acting as the zealous advocate of a specific
solution. Instead, solution-pushing salespeople are
viewed as biased noisemakers.
The
more appealing resource for your target decision-maker
is that person who appears to be an expert on the problem
that needs to be addressed. The problem expert (opinion
leader) is more articulate about the requirements of
a solution than anyone in the customer organization.
He provides helpful specific advice to the owner of
the problem. Once he has earned the trust of the decision-maker,
the responsibility to solve the problem will be his
(he will get the order).
Each
new technology-driven venture needs to effect exactly
this kind of positioning in the course of constructing
a lucrative business opportunity around its invention.
Position your company as the master of a problem.
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