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Posts Tagged ‘making money’

While we’ve been talking about the deep ocean of business plans that investors struggle to filter through, entrepreneurs rarely do themselves any favors with their pitch materials. It’s sometimes difficult for an entrepreneur to sell bleeding technologies or culturally noteworthy ideas to traditional investors. Why? Well, while many of these investors were once successful entrepreneurs, technology has made the principles of creating businesses and the pace of the economy much, much faster.

Instead of wasting time trying to teach the old dogs new tricks, let’s just be clearer when explaining your concept to them. Some investors may be older than you, but that doesn’t mean they’re stupid and out of touch. If you can’t explain your business concept in one sentence, how do you seriously expect an investor (or a consumer) to spend money or time with you? Let’s take this point a few steps further, if your presentation materials are confusing, lack clarity, compelling content, and look like they were pulled together on a Commodore 64, why should an investor think that your company will offer up anything but a clunky and confusing product? commodore64

Don’t pitch your business as the next “Apple” and then hand over documents that look like you’ve never opened up an Apple box in your lifetime. The investor’s belief in your ability to brand and market a product starts with the first time they look at your materials. Entrepreneurs could do themselves a world of good by investing real time (and capital) into their presentation materials. Yes, Apple has the benefit of teams of graphic designers who work on everything they bring to market. While these resources aren’t cheap, they also aren’t too hard to mimic. There are countless resources available on everything from concise presentation structure to graphic design. Take the time to do some research into what a successful pitch deck looks like and maybe investors will believe you are the right person to play the leading role.

Entrepreneurs may also want to take heed from Hollywood. In the late 80s, the Bruce Willis blockbuster Die Hard became the industry standard for describing the plot of many of the screenplays and films that came in its wake. For example, 1994’s Speed was called Die Hard on a bus, and 1996’s The Rock was dubbed Die Hard on an island. If an investor is going to have a hard time understanding your new school idea, find a successful, well-known venture to compare it to. You may be proud of and wildly impressed by the technical details of your product or service, but instead of explaining it and risk losing the attention of your audience, instead focus on the single sentence of your business that will connect with the audience in a simple and effective way.diehardposter

Remember, investors (like Hollywood studio executives) see and hear of thousands of deals a year and have very little time to spend on them. If your idea doesn’t fit into their “box of knowledge”, it’s going to be quite difficult to break through and earn a second meeting. If you can’t narrow down your business to a sticky single sentence, you’re probably not ready to get in front of an investor anyway. Bonus Tip; You may want to check out the book Made to Stick, Why Some Ideas Survive While Others Die by Chip and Dan Heath.

Funny exercise, but play along; look at the top start-up company names and logos funded after 2000 versus those started before 1980. While the color palettes have changed and billion dollar companies can now be started out of garages, the principles of what makes a sound business have not. When meeting with investors, don’t lose them by talking about how cool and complex your venture is, break it down, simplify, and wow them with “how” and “why” you’re going to make fistfuls of money. They like that.

Excerpt taken from Breaking Through The Broken: The Transparent Guide To Overcoming The Inefficiencies In Early Stage Venture Capital.

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MAKING THE REGISTER RING

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Sales and marketing is the knife’s edge for all companies, as these two disciplines can make or break any business. It’s always easier to manage growth when there is top line revenue and some cash flow rolling in. A few key elements to look for in the Sales & Marketing strategy: 1) Leveraged sales; is the sales strategy set up in such a way that the business can gain access to an existing pool of potential customers quickly?; 2) Sampling; while there are many products that can be effectively sold without the consumer getting a hands on experience? Do successful products lend themselves to an extremely low barrier of entry?; 3) Viral marketing and distribution strategies or strategic channel partners; one of the most common problems when launching a new business is finding the budgets for marketing the new product or service. Smart entrepreneurs often find highly leveraged, strong word of mouth, strategic partnerships or other distribution channels; and 4) Clear and compelling brand strategy; a unified brand can provide a powerful springboard for all sales and marketing initiatives.

The only way for a company to make money, and let me emphasize this, the ONLY way to make money is through sales.  Everything else (marketing, customer service, etc) either facilitates or supports your sales efforts.  What and how you sell whatever it is you’re selling is up to you, but if you want to make that register ring then  go SELL, SELL, SELL.

This is just one of the key criteria forward-thinking investors use when evaluating the strength of entrepreneurs and their new ventures. How do you measure up? Go to www.venturephenomeproject.com to read all 80 criteria and swap knowledge with other entrepreneurs & investors.

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