Table of Contents

Introduction: Passion and Reality for Business Success

Chapter 1: Are you really an entrepreneur?

How to really, really know

Chapter 2: Passion, reality and starting a business

Chapter 3: The elevator speech (or the “pitch”)

Chapter 4: The business plan, or “The Map”

About the author

Recommended books

StartupConnection.net Links

Disclaimer

This book provides a thorough list of what an entrepreneur needs to consider when starting a business. There will be unforeseen issues that arise, so it is wise to consult with a business or financial expert before making any investment.

 

 

PASSION AND REALITY

FOR

BUSINESS SUCCESS

By Dr. Bert Shlensky

Introduction

“Get Passionate about your business. But keep it REAL.”

What I mean by that is to combine the two. Stay excited about your business idea, but keep one foot on the ground. Most businesses, whether an apple orchard or a gym, begin because someone has an extreme amount of passion for an idea, and wants to translate that idea into an income producing enterprise. That inner spark that nags you to start a business and keeps you excited is what I call passion. Remember the excitement about starting your business, breathe it in, and put up reminders up in your office, in your car so you don’t forget it.

Hand in hand with passion is reality. It’s the proper balance of both that adds up to a successful business. Too many businesses fail because the founder did not have a proper dose of each. It’s the passion that gets the business owner up each morning excited about the day, dreaming about future expansions, improving the product or services. But, it’s the reality that ensures the business “map” is in order, the right monies are in place, with contingency plans for the unexpected. As that saying goes, “things happen” and “forewarned is forearmed.”

Nine out of ten startup ideas never get off the ground or fail simply because visionary and well-intentioned entrepreneurs lack the practical expertise, experience and resources they need to succeed. As our title suggests, Passion and Reality takes a deep dive into both sides of the entrepreneurial experience. It brings together the visionary and practical considerations that every entrepreneur should know as they give life to their business idea. Rather than providing “success tips” that focus on the “what”  

 

 

and the “why” of starting a business, Passion and Reality offers the how, as in”how to resolve the challenges of successfully operating a business.”

Specifically, I’ll be focusing on these key reminders and principles:

• Starting and running a business is an active and a multi-faceted process; many parts moving together to become a well-oiled machine. It’s a jagged road with successes, failures and mistakes. Testing, adaptation, and listening to customers must be a top priority.

• Remember to focus on maximizing capabilities and opportunities, and that “risk =

rewards.” • Success takes time, analysis, a practical operation, capital (cash), and

commitment. But you also need expertise and experience to avoid unnecessary challenges -- and patience, patience, patience. How to get that expertise and experience? Just like anything, getting in there, checking under the hood, getting dirty, and knowing that every day you run your business makes you a smarter and wiser CEO.

• Lastly, for specialty tasks that you have little or no knowledge of, like accounting and hiring, do yourself a favor: outsource, look outside for experts in these fields. “Outsourcing” is not a dirty word.

• The bottom line: this book is to encourage the entrepreneur. As Ralph Waldo Emerson said, “To believe your own thought, to believe that what is true for you in your private heart is true for all men - that is genius.” That is also true of successful entrepreneurs.

What You’ll Find Inside This Book The book is divided into four chapters: 1. Entrepreneurial Requirements and Resources or “The Things You Gotta Know and

Where To Find Them” 2. The Elevator Speech or “Give Me Your Business Idea In 30 Seconds or Less” 3. Passion and Reality or “The Part of Your Business You Love, and the Part You

Don’t” 4. The Business Map or “What To Know To Move Your Business Forward’ I hope this book “prods” you, if you don’t mind the term, to consider, analyze and develop successful “how-to” practices. They’re easy to learn and you will soon make them your own. You’ll find required recommendations to make the startup process easier, more efficient, and more profitable.

 

Why do I say “prod? This particular term is meant to explain how specific target areas will need “prodding” or nudging because, let’s face it, some of them are dull or downright scary. With gentle suggestions, you will get right to the heart of the issue, you will know where to turn, when to duck, when to move, and when to slow down.

In short, what follows are common sense, practical and proven tips and suggestions that if given your full and undivided attention, and put into serious practice, your business has the best chance to succeed. At the end of each chapter, I’ve noted links to specific pages at www.startupconnection.com, which will provide valuable and more detailed information. The CEO of one of the best and brightest companies to come out of the technical age said the following statement; this sums up the successful mindset that you’ll need as you pursue your dreams.

“Taking risks, choosing growth and challenging ourselves are all important elements of managing our careers. Do not wait for power to be offered. It might never be offered. “

- Sheryl Sandberg, Facebook’s CEO and author of Leaning In

 

Chapter 1 Are You Really an Entrepreneur? How to really, really know?

There is a certain breed that likes to think of themselves as entrepreneurs. And, once success comes, entrepreneurs are viewed as the wise ones of the business world, considered almost like a celebrity.

The thing is, most successful entrepreneurs have had to take their lumps, so to speak, and just like you had to take the chance in the beginning, go step by step, and learning new concepts, and having their own sleepless nights.

But, what really is an entrepreneur? Underneath all the hoopla and fancy shoes, how is the word defined?

According to Merriam-Webster, an entrepreneur is “one who organizes, manages, and assumes the risks of a business enterprise.” Read that again. Let it sink in.

 

This just touches the surface of the entrepreneur concept. Let’s dig a little deeper.

Business 101: The Myths and Realities Let’s consider some of the myths that surround starting a business:

• All you need is a good idea to be a successful entrepreneur. • If you go out on your own, you won’t have to work so hard or such long hours. • You’ll be able to deduct everything, so you don’t have to pay taxes. • If you work independently, you won’t have to report to a boss. • Business owners get to do the work they want to do, and only what they find

interesting.

How many of the above have you said to yourself?

The reality is far different. Starting a business requires hard work, endless hours, and interminable patience. When you start a business, you have no choice but to be a jack-of-all- trades; you can’t just focus on what you know, what you’re good at, and/or what you enjoy to do. As an entrepreneur, you need to know that mistakes will happen, which is key to the entrepreneurial learning process. Unfortunately, that’s where I lose some of our most promising entrepreneurs at the first sign of a mistake they run, embarrassed, their confidence shaken.

Here are just some of the trials and errors a number of famous entrepreneurs had to endure:

• Steve Jobs, co-founder of the original Apple Computer, was fired from the firm. • James Dyson, inventor of the Dyson Vacuum Cleaner, failed in the first 5,000

attempts of his invention. • Thomas Edison, one of the greatest inventors of all time, had 10,000 failed trials

with his light bulb. • Richard Branson, Virgin Airlines founder, failed to succeed with over 400

companies before Virgin Galactic. • Stephen Spielberg, famed movie director, went solo after being rejected three

times from the University of California. • Bill Gates and Mark Zuckerberg, both college-dropouts, went on to, well you

know what.

Entrepreneurial Predictors There are critical factors that can predict entrepreneurial success. Consider the following as you evaluate your entrepreneurial potential. It’s a general list, but one can overcome any limitations when other skills are strong, and the “passion and reality” are working together. A key method to overcoming limitations is to surround yourself with resources and experts that will help improve your total effort. Passion, commitment and energy can overcome a lot of obstacles.

 

When considering an entrepreneurial idea or opportunity, take stock of where you excel, where you don’t, and frankly, where you need to delegate. (Oh, yes, you’ll need to be a strong delegator.) Make sure to answer all of the following questions. If you can’t answer “yes,” to any, make a mental note that you will need to cross that bridge eventually. In Walter Isaacson’s book, The Innovators, he writes how dedication, collaboration and even friction among diverse participants were behind some of the greatest successes we’ve seen. This may go against established myths that startup businesses are run by a group who are in tune with each other. Diverse experiences and opinions do work well. In Doris Kearns Goodwin’s Team of Rivals, she tells us that Lincoln appointed those who opposed him just so he would have lively debate and different viewpoints to consider as he governed.

Personal Characteristics

• Are you a self-starter? • Do you have will power and self-discipline? • Do you enjoy making decisions? • Are you a good planner; can you adapt to change? • Do you manage your finances well? • Are you willing to work 12-14 hour days, often 6 to 7 days a week?

Skill Requirements

• Do you easily interact with others? • Do you know, AND possess, the specific skills needed for success in your

chosen business? • Have you ever worked in a supervisory or managerial capacity? • Do you have any experience in a business similar to the one you want to

operate? • Have you had any business training in school? • Are you able to learn effectively by seeking new ideas and continuing to test,

learn, and adapt as necessary?

Compatibility with Standard Predictors of Success

• Do you take your work seriously, but understand the value of taking time off? • Can you plan every detail, but understand that flexibility is crucial? (This was

mentioned earlier, but it’s a personal as well as a business skill.) • Can your ego understand that you must know your customers, remembering that

it’s all about them? • Can you keep up with technology? • Can you make yourself available to department heads? • Do you possess a rock-solid reputation and image? • Do you understand the importance of developing a suitable and organized

workplace with appropriate staff, up-to-date technology, and a neat presentation?

 

• Do you understand that you must establish, revise, measure, and modify goals constantly?

• Can you accept that you will make mistakes?

The Three Key Questions to Ask Regularly: 1) How is your business different?

2) How to you communicate that to your customers?

3) Do they care?

(And, I mean it! Ask yourself these three questions at least once a month!)

 

Chapter 2 Passion, Reality and Starting a Business

Passion and Reality will be discussed a lot in this book; their importance can’t be emphasized enough. Eventually, it will become a mantra that you live by. PASSION Passion was best described by Steve Jobs when he said,

“…because the people who are crazy enough to think they can change the world are the ones who do.”

Starting a business is not easy. An entrepreneur needs to understand and express his/her passion and concrete ways it will stay afloat. To do so requires a mission statement and a business road map.

But that’s just the tip of the iceberg. Starting a business also requires high levels of enthusiasm, energy, and persistence to advertise (convince others that your product/service is the better choice), and sell (make money!) to customers and potential investors. For an entrepreneur to succeed today, he has to be willing to be like that

 

juggler who keeps many plates spinning. If he lets his eye off one plate for too long, it starts to wobble and needs immediate attention. Just like your business. If you let your eye off one aspect of your business for too long, it could spell trouble. But take heart, being prepared and acquiring experience will allow you to know when to spin your plates.

REALITY When we understand reality, we understand the problems, limitations, and constraints associated with any undertaking. As Thomas Edison said,

“A vision without execution is hallucination.” Good ideas are a dime a dozen. Your best friend might have the next million dollar app idea. And, while new ideas are great and the true engines of innovation, an entrepreneur needs to determine whether an idea can be executed and make enough sales to continue and thrive. While excitement and energy drives a start-up, slow and steady wins the race. How can entrepreneurs balance Passion and Reality? Entrepreneurs are often superb when describing how their company is head and shoulders above the rest. Typically, the best sections of business maps tend to be the description of the product or service, and the expertise of the corporate staff. On the other hand, the weakest sections of those same business plans are consistently the competitive analysis, the market research, and marketing and distribution. When these key elements lack specifics and analytics, the start-ups will fail. Avoid these pitfalls by considering the following: THREE CRITICAL ELEMENTS (These are so critical, you’ll hear them repeated throughout this book.) 1. How is your business different?

Think of where people get their coffee: Dunkin’ Donuts, Starbucks, Seattle’s Best, or the corner coffee shop. If you conducted a survey about the pros and cons of each, you’d find that people can go on for hours about the value, the differences and advantages of flavor, prices, and how the coffee is advertised. This exercise illustrates two things: how people perceive differences and what’s important to them. By the way, except for bottled water and designer purses, the price or perceived value, (what the customer is willing to pay for it), is more important than we think.

2. How can you communicate your difference to your target audience?

This is one of the most difficult tasks of launching a new product. We all get excited about our differences but does anyone understand them? Take all the techy gadgets and services that are out there, some are even in a “cloud.” Most sales staff can’t even explain the product or   service   entirely.   Yet, we buy them because we saw and

 

Three Key Elements Critical to Starting a Business:

1. How is your business different?

2. How can you communicate your difference to your target audience?

3. Do enough customers care about your difference to change their behavior?

 

understood how it would change our lives for the better. Look around at your belongings, you probably have no idea how they work, but you saw and understood its benefit, and the price was one you were willing to pay. Now, that is what I call “good marketing.”

3. Do enough customers care about the difference between your product and your competitor’s to change their behavior?

We hate change. How do I know this? Consider the following well-used quotes:

“If it ain’t broke, don’t fix it.” “We have always done it this way.” “The devil you know is better than the devil you don’t.”

I’m amazed to see friends buy a Chevy time after time because they always bought a Chevy, or because their father always bought a Chevy. Similarly, we visit the same stores because we get into habits and need a real reason to change.

STARTING A BUSINESS After Passion and Reality, here are the other key necessities to consider as you sit down and layout your business: Having an internet presence is crucial, Can you make money, Can you deliver what you sell, and How will you let people know you exist. The Internet is a critical aspect of almost any entrepreneurial pursuit. Your business must be able to reach customers via the internet and personal devices like tablets and cell phones. Why? Read on:

• Consumers today rely on their computers, laptops, and cell phones for virtually

everything, e.g., information, research, purchasing, networking, and communication.

• Consumers, more than ever before, shop with their cell phones and compare prices on the spot, and can also make the purchase right on their phones.

• Your business must have a website, a social media campaign which includes some sort of email communication. Customers expect this.

• Selling on the web is an inexpensive way to start a business and test how your product is received by the market.

Can your business make money? Not at first. Sorry to say. But a well thought-out business map will figure that in so that unnecessary expenditures are not added in.

 

There are several aspects of startup finances that need to be considered:

• Make a detail list of every potential startup expense, including office equipment (purchase or rent?), staff salaries, website development, product development, administration, miscellaneous pre-payments, real estate expenses (if opening a brick and mortar operation is your plan).

• Divide marketing into different categories: upfront marketing, special promotions, public relations, and research; provide a budget for each.

It’s easy to get caught up in product development and marketing. Early in the process, entrepreneurs need to project (at least have some idea) when their product will start to make money. Without steady revenue streams, businesses can stall before they can really get started.

Can you deliver what you sell?

Operations and logistics are frequently viewed as secondary functions that can be outsourced. In reality, they present a huge opportunity for a business to become more efficient and unique.

• Balancing and managing inventory to meet demand, but also knowing when to take on staff for seasonal spikes will save money, stress, and unnecessary surplus for the clearance rack.

• Reducing lead times, improving flexibility, and planning can improve effectiveness and lower costs.

• Many operations experts have shown that 80% of sales are derived from 20% of offered products or services. Entrepreneurs waste time, money, and frequently add confusion by adding too much complexity to their business models. When and if possible, always go the KIS Method (Keep it Simple).

How will you let people know you exist?

A business venture without a marketing map – even a draft -- is doomed. Investors have told me that they will decline an offer to buy into a company once they hear that there is no money set aside for marketing. Want to get your investor to say “NO!” on the spot: Explain your business that projects multi-million dollar sales with hardly any money set aside for marketing. When making estimates about pricing, costs, and revenue, make sure to have your reasoning at the ready so you can back up your projections.

Starting a business is an exciting and potentially profitable effort. However, it takes time, analysis, capital, and commitment. Entrepreneurs must allow their passion to drive them

 

while staying vigilantly in touch with reality. The next chapter describes the beginning of the process of identifying your goals and defining your next steps.

 

Chapter 3 The Elevator Speech (or “The Pitch”)

A Simple yet Critical Tool to Your New Business Success

We live in a rapidly paced world and time is of the essence; “sound bites” and “tweets” need to say a lot in a short amount of time. Even a three-minute YouTube video is considered too long. Time is our most valuable commodity and getting your message across quickly is key. “The Elevator Speech” is a term to describe very short synopsis of your business, so named because it should be delivered quickly, accurately, and concisely, to a possible investor, customer, or press person in the time it takes for the elevator to reach the desired floor. The “elevator speech” or what is also your sales “pitch,” is a carefully worded and well-practiced description about your product that is created to attract interest in 60 seconds or less. Learning how to give a great pitch is a skill to master. It’s a great way to refine the essence of your company as well as a reminder to key staff of the business’ mission.

 

It’s as essential as a business card. You need to clearly and rapidly be able to communicate who you are, what you do, what you are interested in doing, and how you can be a resource to your listener.  Questions a Good Pitch Should Answer Before you can convince anyone of your business proposition, YOU need to know exactly what that business proposition is. You need to define precisely what you’re offering, what problems you’re solving, and what benefits you’re bringing to prospective customers or clients. The sales pitch should address the following: 1. Who you are and what your business is all about. 2. Your product/s and service/s and your business’ strength. 3. Easy to understand way to describe the company. 4. Your target market. 5. The problem your business solves. 6. Your business model and strategy. 7. Your competition and why your business is better. It sounds like a lot, huh? Well, it IS a lot, a lot of good information that you should always have at the ready for when the opportunity arises. And, if you don’t know the answer to any of the above points, find out. Practice your pitch often (in the car, hey, even in an elevator). Memorize it. Here’s an example of a successful elevator speech: “It costs you nothing, takes up little time, and creates a new opportunity for you to make money. My business is providing home medical equipment to drug stores like yours. I developed a program specifically for local drugstores. You’ll receive free signs for your store informing customers that they can get any type of home medical equipment through you. By a simple call to our 1-800 number, I will then ship the product out and delivered directly to the customer or to you. I show them how to use it, file the insurance paperwork, and maintain the equipment. All you do is let your customers know that they should buy home-medical equipment through you. I'll call next week to discuss details, and answer any questions. Here is my card. Thank you for your time.”

 

Once you’ve developed a good pitch, you’ll be amazed at how handy it is and how often you’ll use it. Elements of a Great Pitch Here is a checklist of important elements to consider as you create your speech:

• The “Hook”: Open your speech by getting the listener’s attention with a “hook,” or a statement or question that piques their interest. Start with a surprising or amazing fact. For example, if your marketing a product geared towards entrepreneurs, you might start with “One out of every two Americans works for, or owns a small business.”

Another approach would be to open with a series of rhetorical questions, like: “How do you explain when things don't go as we assume?” Or “Why is Apple so innovative?”

This forces the recipient to think; it draws them, and makes them consider the answers. In the example pitch earlier, I say: “It costs you nothing, takes up little time, and creates a new opportunity for you to make money.” THAT is a great hook.

• Length: Your pitch should go no longer than 60 seconds. If the sales pitch runs on longer, you risk losing the interest of your target audience. Get to the point.

• Passion: Listeners will expect energy and dedication in your speech. If you aren’t excited about your idea, why should the listener be? Why is this idea exciting, and how will it benefit your target audience? This must be conveyed in your pitch.

• Request: At the end of your pitch, there should be an action. Be specific. Do you want to make a sales call? Do you need to raise capital or attract strategic partners? Want to enter a new market? Use this time to your advantage and be ready to make the offer that entices them to close the deal on the spot. Don’t let them leave without your business card.

• Practice: Be sure to spend time developing, practicing and testing your pitch. Create short videos of your pitch and review your presentation. Have other business contacts review it for their comments. It’s imperative that you convey confidence in your product, and a deep belief that it will benefit the person you’re pitching. Get comfortable with your sales pitch so it flows like a natural conversation and your target will be more engaged.

Once you’ve thought your business through from A to Z, it’s time to talk about the: The Business Plan, or as I call it,

 

The “ever-changing map to your business that’s as flexible as a creation made with Legos.”

But for the sake of space, I’ll just call it “the map.”

 

Chapter 4 The Business Plan or Rather, the “Map”

It's your action plan, the roadmap, the GPS you need to take your business from dream to reality. It clearly defines your business and reveals where many of the potholes are so you don't hit them. A business plan is essential for every entrepreneur with a business idea. Does a builder not need his blueprint? Does a clothes designer not need a pattern? If you don’t think you need one, then you might as well get out of the game. And speaking of games, think of your business like one. Sports have become serious business. Your business is serious business. It's a game of strategy that requires you to know everything about your business, especially your strengths and weaknesses as well as that of your competitor or opponent. That's what a business map does. It gives you a detailed look into you as an entrepreneur, into your company and into your competition. You’ll know who you’re up against, and how to use your strengths to your advantage.

 

Still not convinced? You better realize that as soon as your competition knows you're out there, they're going to make sure they know everything about you. Don’t let them get the upper hand. A business map is an actionable and flexible program for success.  As Mark Victor Hansen, co-author of the Chicken Soup for the Soul book series, said: “By recording your dreams and goals on paper, you set in motion the process of becoming the person you most want to be. Put your future in good hands – your own.” This chapter will give you the nuts and bolts of developing a map that includes clear steps, research tools, and questions you may not have asked yourself, but need to. The map will evolve as you grow, so don’t feel that what you decide or project today is set in cement. It’s a work in progress, a blueprint to be erased and altered as needed.

There are lots of great “how to” guides to preparing business plans. Besides being a process and a roadmap, there are two key differences. First, while most guides include customer service, the internet and operations as subsections, I view them as important enough to have their own separate section. Second, this guide was not meant to be developed from simply filling out forms for third parties, or to sit on a shelf. Rather, to make sure you succeed at this; it focuses on the how to and is full of specific tips.

Keep in mind:

• Developing a business map is an ongoing process, especially after your business is up and running. Things change. So will your business decisions and projections.

• You will make mistakes. Having this map won't make you invincible, but it will help you make better decisions with the ability to adapt and bounce back.

• It will take longer than you think.

• It won't be easy, but it will be worth it. It will allow you to see your dream come true.

• Don't listen to naysayers. They're usually people without dreams.

Several clients and consultants suggest looking at capital (investment money) as an entrepreneur’s first step. But that’s a little backward. Entrepreneurs need to develop a business map that answers key issues first before they worry about raising money. For example: How much does the venture/business need? How and when will funds be paid back? Why should anyone have faith to invest their hard earned money?

Our Business Map is broken down into small steps to make it easier to understand:

 

• Product vision and potential • What is your brand and who is your competition? • Do you have a plan to make money? • What is your marketing plan? • What is your internet plan? • Do you have an operations plan to deliver what you sell? • Do you have the right organization to execute your plan? • How can you develop, test measure and adapt your idea? • Modifying the plan for various users.

Read the following over a few times, let it sink in. Make notes as you read. By completing the suggestions, you’ll be far along, more so than many others, in seeing their business become a beautiful reality.

Product Vision and Potential

Start this map at the end. Why? If you don't know where you're going, how will you know when you get there? You have to know up front what you want to do with your business to set the right tone for your map.

• Do you want to grow the business, and then sell it for a profit later on? • Do you want the business to be a legacy that will last your lifetime, become a

household name? Something to pass to your kids? Your plan should reflect your vision.

Here are the top three key Business Map questions that should become the essence of the document. You’ve heard them before, but they are so worth repeating:

• How are your products/services different? • How will you communicate this difference to your target audience? • Do enough people care about this difference to change their behavior and use

your products/services instead of the ones they already have? These are so important. Write them down, think about them, and then modify what you've written until you feel that you’ve clearly answered them. Your responses may change over time, but you've got to start somewhere. What is your brand, and who is your competition? According to best-selling author, public speaker, and entrepreneur, Seth Godin:

“A brand is the set of expectations, memories, stories, and relationships that, taken together, account for a consumer’s decision to choose one product or service over another. If the consumer (whether it’s a business, a buyer, a voter, or a donor) doesn’t pay a premium, make a selection, or spread the word, then no brand value exists for that consumer.”

 

What…?? Again, in English please. It means that a brand takes all the products/services offered, connects them to how it can benefit a customer, and then keeps sending out that message in print ads, internet marketing, and publicity. It soon takes on a personality of its own.

Think of Coca-Cola. Coca-Cola is a brand. We know it by the soft drinks, by the ads we see, by the celebrities who drink it, by the programs they sponsor. When we think or hear the name Coca-Cola, or its nickname, “Coke,” we have a picture, so to speak, in our head; we have a perception.

In addition to brand, there is another term to become familiar with: differentiation or how you set yourself apart from your competition. You do have to stand out from your competitors. But you can't do that until you know who your competitors are, and what they're doing. That means research.

We know. You probably still have nightmares about college research papers written hours before they were due. Well, if you think doing research is painful, try losing your business - your dream - because you got lazy. Laziness has no place here.

Develop Effective Market Research Market research is meant to direct you to areas of the marketplace that you should be targeting, and areas you should avoid, possibly due to saturation.

1. Define Your Target Customer/Client

• Who would be the most likely person to use your product or service?

• Identify the particular areas of the total market you’re targeting. Are you appealing to builders, chefs, moms, teens, pet owners?

• What are your target market's demographics, i.e., age, gender, income level, ethnicity, and geographic areas?

• What do your customers have in common? Social status? Values? Attitudes? Beliefs?

• Why will they prefer your product/service over your competitor’s? What problem does your product solve better than theirs?

2. Understand Your Industry, Sector, and Niche

• Clearly identify the general industry for your products or services. Let’s take the

apparel industry, for example.

 

• Now, identify the sector within that industry such as T-shirts.

• Then, identify your niche within that particular sector for your products and

services, like t-shirts that feature major league pitchers.

3. Understand Your Competition

• Who are your competitors?

• How big are they? A local business, a nationally-known business?

• What are their strengths and weaknesses?

• How do your products/services compare to theirs?

Research tools via Google and Amazon can help you understand your competitors, and how you rank in comparison. I cannot tell you how many clients have ignored these resources and failed to recognize their competitors or other lower-priced options.

Once you have this information, update it regularly. This will ensure you continue to strengthen your brand and set yourself apart from your competition. (Visit: www.startupconnection.net/premium-resources/branding-differentiation)

(Visit www.startupconnection.net/premium-resources/market-research-overview) 4. Do you have a plan to make money?

If not, you will. There’s a form you should know about; I’ve included it in this chapter. It’s called a "pro forma income statement." Though it sounds a bit scary, it’s not.

It’s a form that allows you to change your estimates on what you will need to spend, and how it relates to how much profit you will see. For example, price, marketing, sales and profit affect each other. Simply put, the more you project spending on marketing, the more you need to increase sales. This is a model to let you see how the profits and expenditures work.

This pro-forma is what investors know and understand, and so must you. Unfortunately, few entrepreneurs understand the importance of realistic forecasting, and offer up ridiculously over-blown projections. Naturally, you can't know for sure what

 

those numbers are going to be. By using our unique template process, your projections will be realistic, doable and, therefore, refreshing in the eyes of investors.

The form requires specific amounts – as much as you can figure -- that help you put together the monies that go out, and the monies that come in.

• What are your sales volume goals (how much you can realistically make?)

• What is your average selling price?

• What does it cost to produce one unit?

• What are your marketing costs?

• What are your labor and administrative costs?

• What will your profit be? The Operating Profit Model Template in the Financial Statements link below is a valuable tool to help you figure this out; it can be tailored to each individual situation. Like your “business map,” it’s flexible, and will allow you to input various financial scenarios so you can evaluate the results.

 

(Visit: www.startupconnection.net/premium-resources/poor-forecasting-can-sabotage-business-plan) (Visit: www.startupconnection.net/business-templates/financial-statements-templates) (Visit: www.startupconnection.net/premium-resources/financing-a-business)  

 

 

 

 

5. What is your marketing plan?

Can you answer the following multiple choice question?

Q. What is marketing?

A. Advertising your product/service?

B. Making an announcement of a new way to use your product?

C. Being out in the community and in the public eye?

D. Being involved in positive community projects?

E. All of the above.

I’m sure you figured it out that it is: E. All of the above.

Marketing is just about anything that gets your brand name out there whether in newspaper ads, special sale promotions, first year anniversary celebrations, or announcing that your business won the local chamber of commerce’s “best new business” award.

Your marketing must start with a positioning strategy, or where your business fits in the overall marketplace. Consider these questions:

• What part of the marketplace are you targeting?

• What are your key selling points?

• How are you selling your products and services? Via the internet? In a

store? Direct selling?

• What is your pricing and policies regarding promotions, service, delivery practices, warranties, etc.?

• How are you distributing your products and services to your markets?

• What tools are you using to market your business: traditional media, like TV and newspapers; the internet, networking brochures, apps, etc.?

Building a brand and differentiating yourself from competition are key challenges that every start-up business faces. Marketing requires a much deeper commitment than in days of old when all one had to do was place an eye-catching ad in the newspaper. Besides the price, or a discount program, or how the product is advertised, the customer really needs to understand --without question -- the reasons why YOUR product is far and away the better choice. It also means excellent customer service policies that make the customer happy.

 

Take the pizza shop industry. There could be two pizza restaurants in town, each one makes a great pizza, but each one will have its own identity, maybe a larger eating area, maybe unique staffing, clever menus, and customer service (i.e., what does the owner do if a dish comes out not as the customer requested?). All these play an important part in building and keeping customers. Consider the following:

• Satisfied customers, repeat customers, positive social media, and referrals are the best and least expensive marketing a business can have. There’s no substitute for a satisfied customer.

• In contrast, dissatisfied customers, poor service, and negative referrals can offset the best marketing efforts.

• “You only have one chance to make a first impression.” • Response time is becoming a key measure affecting sales, profitability, and

excellence. It is wasteful to not promptly answer customer requests, have long lines, run out of inventory, etc.

While developing your marketing, consider these additional questions:

• How successful are you at getting your idea across, and meeting consumer needs, or are you trying to sell fleas to a dog? Sounds ridiculous, but make sure you are pitching your product to the right customer.

• Are you selling features instead of benefits? Features tell; benefits sell. Consumers want to know one thing: how will using your products/services benefit them. Period.

• Marketing is always changing. You have to stay on top of new technologies, changing demographics, your competition; you have to adapt as is necessary. Remember, 20 years ago nobody heard of a "website."

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(Visit: www.startupconnection.net/premium-resources/marketing-plan-startups) (Visit: www.startupconnection.net/premium-resources/rethinking-pricing) 6. What is your Internet Plan?

Everyone and I mean everyone that you want as a customer is on the internet.

 

There’s not much you can’t purchase on a website, from a pencil to a car, from pet products to caskets. Customers can learn more about your product AND your competitors within a few minutes of research and a few clicks of the mouse. And, not just on the computer, on their cell phones and other personal devices. You must have a website, plain and simple, because:

• Market research and information are easily accessible for any business.

• A website defines your business and provides information.

• Internet tools like blogs, sharing comments and reviews, advertising on Facebook grows your business. Acquire new customers by using key phrases, staying in touch with customers via newsletters and emails, and selling online.

• Sites like Amazon and eBay are able to sell your products, too. Consider coupon sites, like Groupon, that sell trips or products at low prices because they’ve met their quota purchases.

• Instant feedback/reviews/suggestions about your products and services can help

with word of mouth promotion.

• Offer product support through email or live chat.

There are not many tools in your toolbox as vital as a website. It offers unlimited potential, and not having one can sink your business. (Visit: www.startupconnection.net/premium-resources/startup-business-internet-guide)

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7. Do you have an operations plan to deliver what you sell?

Logistics and operations. These are the two pieces that create your product quickly, and will deliver it wherever it has to go, i.e., directly to customer, on a shelf in a store, to a warehouse.

The number of steps in getting a product or service to market is unique and should be efficient. Testing it regularly helps to find little snafus before they become big headaches. As you grow as the CEO, you will see where improvements can be made in every corner of the business, improving profits, increasing the number of units sold, and doing well in comparison to competition. You need to think about, no matter if you sell a product or perform a service, the following:

• Who are you selling to, and what are your plans for distribution? • What should you outsource? Will you need to acquire parts from other

countries? Will you assemble the product entirely in the US?

• Forecasting the future by knowing how many units you’re selling, your sales and expenses, and staffing needs.

• Top notch customer service practices and friendly return policies, the ease with which customers can get support, etc.

Suggestions to simplify this process include:

• Balance inventory with demand, while minimizing overstock.

• Reduce lead times; streamline processes and planning to raise effectiveness and efficiency that save you money. Tools like direct ship, automating processes, and new distribution methods can all be ways to separate your business and brand.

• Develop a forecast with research to support it.

• A satisfied customer is the best and least expensive marketing tool you have. Therefore, focus your customer service plan to include goals, procedures, training, and policies to keep your customers satisfied and happy.

• Develop timelines and schedules for your programs. You can’t physically and

financially do everything at once.

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8. Do you have the right organization to execute your plan?

Experience and expertise, as I said earlier, are key factors in successful startups. But also surrounding yourself with people who have the skills you lack. Watch and learn from them.

Most successful startups possess talented and committed people with endless energy. In contrast, every failure usually involves poor performance, and lack of diligence in key factors. So:

• Balance your organization. If you're a creative, right-brain thinker, you probably hate everything financial. If so, hire an accountant. On the other hand, if you're an accountant looking for work, find creative, right-brain executives who lack your skills.

• Empower both your staff and outside resources. Let them be all they can be. Happy employees = happy customers.

• Respect your staff and suppliers, understand that they have lives and families and that occasionally things go wrong. This goes a long way towards high morale and productivity. Create an employee handbook with realistic incentives, offer workshops so staffers can improve in their jobs. Show respect to every person in your organization.

• A quality Human Resources program should offer realistic and fair plans, policies and practices. For example, excellent people are frequently unconventional and tend to work best in environments that supports their energy, but doesn't destroy their unique-ness. Offer as many benefits and time-off as you can comfortably afford.

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9. How can you develop, test, measure and adapt your idea?

This is a process that needs to be reviewed regularly in order to stay current in the marketplace. Consider small tests rather than large ones. They need not be sophisticated, but must be executed well. Make sure you know what questions you need answers to, like, “Is your product just for a specific age? Or can all ages use it?” Test on all ages, and take notes. Other tips include:

• Manufacture small product runs (don’t make more than you can sell)

• Test your marketing tools (i.e., are your methods accurate?)

• Use different pricing (finding that sweet spot, or that amount your customers will pay for your product).

• Focus groups (these are ordinary people who make up your target market and

who volunteer, or get a small fee, to test your product and provide their honest review.)

• Market research tests (scientific methods to determine if your product is being

seen by the people you want to see it.)

• Take advantage of selling on E-Bay, Amazon and Etsy.

Just don’t ask your mother to be part of your test. Nor your Uncle Joe, or best friend. It’s a no-win situation. (Visit: www.startupconnection.net/goals-and-measurement) (Visit: www.startupconnection.net/premium-resources/market-research-overview) 10. Modify the map for various users

While the business map is designed for you, it should offer built-in flexibility to allow data to be tweaked to meet specific needs and interests of investors, bankers, or other parties. For instance, a venture capitalist will want to see an aggressive marketing plan, long term growth, and plenty of information about how this is going to be the next big thing. An “angel” investor or any other kind of individual investor needs to know when they can see an immediate return.

 

I recommend that your basic plan be brief and no longer than 15-25 pages. However one recommendation is to add appendices which can be added or removed as needed, to enhance your arguments and serve different readers. The following are especially requested by investment groups:

• Projected Income Statements, Balance Sheets, and Cash Flow Statements

• Potential challenges and contingency plans • Time Lines of events , expenses and hiring • Marketing Materials and specifics • Technology: Technical drawings, patent information, etc. • Product/Service Detail • Legal descriptions and licenses • Staffing biographies • Partnership and/or Customer Letters • Competitive Reviews • Market Studies

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*** To recap:

• Recognize the need to balance the passion of the idea with the reality of execution.

• Goals, a brand, sales and financial parameters are keys to success. • Plan an integrated process and continually test, measure and adapt. • Logistics, customer service and the internet can be valuable tools in

differentiating yourself and increasing profits. • Excellent programs and people can accelerate your success and

processes. • The goal is to make money! • But, you should also have fun!

"Do what you do so well that they will want to see it again and bring their friends."

-- Walt Disney

 

About the Author: Award-winning* business consultant and mentor, Dr. Bert Shlensky has over 30 years of experience as a results-driven executive leader and in just the last six years (2007-2014) successfully guided five new businesses. Presently, he serves as president of the New York-based consulting firm STARTUPCONNECTIONS.NET. As a business counselor for the Small Business Administration-funded SCORE, Dr. Shlensky mentored emerging entrepreneurs, and conducted in-person and virtual counseling with over 1500 clients. His previous business experience included:

• President and CEO of Sure Fit Products where he grew the business from $50 million to $150 million in sales. He initiated the development of a $60 million direct internet and catalog business during his tenure.

• President of West Point-Pepperell’s Apparel Fabrics Division headed its the $400 million

Cluett Shirt group. A graduate from Roosevelt University (MBA) and the Sloan School of Management at M.I.T (Ph.D.), Dr. Shlensky participated in a number of programs at Harvard’s Kennedy Institute and Lehigh University’s Entrepreneur Program. Dr. Bert Shlensky lives in New York with his wife, Judith. He welcomes questions and comments to bshlensky@startupconnection.net. *HONORS AND AWARDS

Ernst & Young, Entrepreneur of the Year Award DSN Retailing Today, Silver SPARC Award EBAY, Best New Merchant Award Catalog Age, Silver Award Winner

 

Recommended Books

 

Lean In, Sheryl Sandberg (Alfred Knopf, 2013)

A Whole New Mind, Daniel Pink, (Riverhead Books, 2006)

Outliers, Malcolm Gladwell, (Little Brown, 2007)

The Lean Start Up, Eric Rise (Crown Books, 2011)

Start Your Own Business, Entrepreneur Media (Entrepreneur Press, 2010)

The Innovators, Walter Isaacson (Simon and Schuster, 2014)

 

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