An Entrepreneur's Guide

We recently had an ocassion to help one of our client companies in a sales process.
At the end of the 2 month process, we found out that they lost the sale.

Stuff happens. You win some. You loose many.
Thats why we are known as risk-takers.

However, this lost sale led to some introspection and helped their management understand how they could better define their solutions and better target their pitches.
Needless to say, there was a ton of information to glean from this introspection and at the end of a weekend-long brainstorming marathon, everyone felt better.

Barry's blog entry (link below) led me to write of our own experiences.
And it is important to continue with the process of getting the next sale lined up.

This is what a dear friend of mine refers to as 'continuing to fill the funnel'. Make sure there are enough leads that you can keep contacting and selling to.

Some will come through. Most won't.
Thats why we are known as risk-takers.

Everyone will tell a startup owner to go out and network. They will tell you that THAT is the best way of generating business.
What no one ever tells you is how tough it is going to be. Networking to generate business is undoubtedly the best way of generating business but it is also the one that requires the most patience.
Out of every 10 people you meet, 9 will say no. However, 1/10 is TEN TIMES greater than 1/100 [the usual ratio of leads from direct mail]
The way to deal with 90% rejection is to tell yourself that the more people who say No, the closer you get to the person who will say Yes.

This strategy works for many successfull networkers.

New Jersey Technology Council (NJTC) held it's 2005 Venture Fair on the 8th of March 2005 at the Garden State Exhibit & Convention Center in Somerset, NJ.

Though MindPillar (the company running this blog) didn't find it necessary to present/host a booth at the event, it was an interesting day to talk to a lot of the who's who of the Venture Community of New Jersey. So we showed up!

Formal Presentations started around 10am and continued throughout the day till about 4pm.
There were quiet a few people in attendance, even with the snow and inclement weather warnings. I believe the crowd would have been larger if the weather wasn't so bad.

Walking around, I could see a lot of more senior people than one would expect at a show titled "Venture Fair". Maybe it's just how I saw it. I think this is a good sign.
A lot of the people I spoke with were onto their 2nd or 3rd startups and the experience definitely shone through in the ideas they spoke about and ways they presented their companies on the floor.

I believe entrepreneur's and small business owners should go to such events if only to learn about these events work and get a better grasp of what the expectations are and what they need to prepare. A few companies I spoke to looked like they had never seen corporate booths, let alone presenting at one. They need to clean up their "selling image". No matter how cool your product and how revolutionary your service, if you cannot market yourself and your company right, you will be left behind. Or worse, deemed irrevelant.

Look at how the companies dress up their booths. Look at what kind of marketing handouts they have (even the branded stationary helps). Listen to the way they describe their products. They are not making a single sale of a single unit. They are trying to sell their entire companies to VC's. It's a subtle but critical difference.

These events do not always have to be a sales event. I was there primarily as a marketing/networking exercise. Just to get to know so many different people in a short span of a few hours is incredibly useful.
Again. Don't sell your product. Sell yourself. Talk about your company and talk about your product. Thats ok. Let the other person think "Hmm, MindPillar seems interesting. I think they can help me with X or Y or . Let me contact them"

Given the idea of a "Venture" fair, it was surprising that there weren't as many software startups presenting and almost no web-based non-B2B companies. The few software companies, like Tabletsoft (www.tabletsoft.com), Habitat Technologies (www.habitattech.com) , Exactor (www.exactor.com) and VR Meetings (www.vrmeetings.com) looked like they had pretty stable version 1 (or higher) products that had some market acceptance in form of sales or licensing or integration testing.

There were a number of engineering firms, such as S-Bond Technologies (www.s-bond.com) and Thor Power Corp (www.bonnerbusiness.com). The biomedical firms had a sizeable representation but that sector is still a little shady in what they sell vs. what they pitch. Too dot-commish, if you ask me.

Interestingly, there were many legal and financial advisory firms and Emerging Business Consultancy firms present. Geller and Company (www.gellerco.com), Saiber Schlesinger Satz and Goldstein (www.saiber.com) and Sonnenschein (www.sonnenschein.com) were amongst the most interesting ones. The lady at the PricewaterhouseCoopers (www.pwc.com) booth didn't seem very interested in presenting. Same problem with the people at Commerce Bank. The Wachovia (www.wachovia.com) booth only had a placard with their name. No show?!

As small business owners, we all know the importance of legal documents. Be it contracts, non-disclosure agreements or operating agreements. It is critical that we have these legal structures in place to maximize interest and maintain focus. Let us not forget, these documents are more of an insurance policy.
There would not be any need to enforce any of them unless the worst happens.

Like an insurance policy, it is extremely important to have these measures in place and active before work commences and before anyone feels incorrectly compensated and accusations made.

It is incredible how many small businesses I have seen over the last few years skip this important step with the idea that "we can always do that later". No, you cannot.
Just last week, a friend of a friend lost a lot in salary, percentage stake in the company and morale when his business partner reneged on all previous verbal deals. The reason the defending person has no legal leverage? They were getting the legal paperwork completed by next week. Next week is not good enough. This should have been completed the day you stepped foot into your new offices.

Legal advice is often expensive and the rule of thumb is that you never bargain with your attorney, your accountant and your dentist. However, it is interesting to note that many attorneys look favorably towards Small Business clients. This is their version of Venture Legal Service. Venture Legal Service is a type of Venture Service, not unlike Venture Capital.
However, unlike Venture Capital, Venture Services are not so much an infusion of cash but of time into the small business. Another important differentiating factor is that Venture Services look for future growth prospects of the small business as a future client, not a direct payback on their investment.

I was recently at an event where I had the chance to speak with Justin Escher Alpert, Esq. of OlenderFeldman LLP, based in Union NJ. He gave me tips on why would a successful Law firm suddenly give out inexpensive services to a Small Business.

Justin’s explanation was simple. If they take a small risk in profits with a Small Business client (which will not have big legal bills for a few years), they have the advantage of getting a foot in the door early on. When your Small Business does expand and is successful, you obviously want to keep your existing lawyers who understood your business and your needs from day one.

At that point, they do not break your bank on the price, but still offer extremely useful legal services at competitive rates. The initial discounts they gave your struggling company are a decent marketing expense that they were willing to expend.

I believe you should go ahead and ask your legal advisors how much risk are they willing to take on your small enterprise and how open they are giving you a more flexible payment plan when you need it most: In the first year of your company.
You might be pleasantly surprised.

Note:
OlenderFeldman is in no way affiliated with MindPillar LLC as of this posting. They are not a service provider or client as of this posting.

Even though outsource has a new connotation to it now, small companies have been faced with the decision of keeping work inhouse vs. outsourcing for a while.

This question can come up at any time, for example should you design your brochures or should you 'outsource' them? Or, should you manage my own payroll or 'outsource' it.

Of course, the general belief is that the you should focus on your core business and outsource everything else. However, this belief quickly comes to a halt as soon as you realise that you are spending $5000 designing a brochure and then some more fixing it up. opportunity cost however, is something which is tough to measure.

The solution ends up being different for every company. If you think you have the time [and the brains] to do your own payroll, then go ahead, save those dollars.

Did you know that legally, only a s-corp can write its name with out the words 'LLC', 'LLP' etc.

So what this means is that if your company's name is TheGreatestCompany and you are an LLC, then you can not print business cards as
TheGreatestCompany
144 California Ave,
Summerville, XY

You HAVE to (and I mean required by law) write
TheGreatestCompany LLC
144 California Ave,
Summerville, XY

When entrepreneurs decide to start their own companies, they are filled with excitement and of course, the 'knowledge' that they can do it better than anyone else.
Three years later, 40% of those still running a business believe that they were right. However, in retrospect, if they had been able to learn someone else's methods, they might have saved all those hours trying to understand and finding the best way of doing stupid tasks.

You see, it is not the major strategic decisions, but the small day to day ones that make the difference between a company that makes it beyond the first and third years.

This blog is to help all those entrepreneurs who are looking for simple answers for simple questions. As all blogs go, we will post our daily musings with these suggestions.

For those interested,
Apply for startup help at our VentureTechnology program:
http://mindpillar.com/venture_technology.php