Should You Start A Company

“What Is Your Start Up Company’s Special Ingredient?”

This is one of the key questions I ask my consulting clients who are starting a new business. What would your answer be to this question? Exactly why WILL prospective customers buy from you instead of continuing to do whatever it is they are currently doing?

Amazingly, most entrepreneurs have not even considered this issue - they rarely even have an answer after they’ve thought about it for a while.   Marginal “me too” improvements over existing solutions will rarely drive sales for a start up company.  This is true even in areas of interest and focus for your prospects.  Even great innovative improvements in areas that are not of interest and focus to your prospects will also rarely drive sales.

I call this your YSI:  Your Special Ingredient.  Sometimes this is called your USP - Your Unique Selling Proposition - a concept and theory that goes back to the 1940s.  Others refer to it with a variety of terms, like KSP - Key Selling Point.  No matter what the acronym, it is still the same basic question:  Why you and your company? (more…)

As an entrepreneur with your business plan in hand, what are the two top priorities you have on every day’s action list as you start up your start up company?

Starting and running a company can be overwhelming. Endless new action items seem to appear magically on your To Do List as you day develops - with all of them either whispering or screaming to be your top priority. And, when the day is done, it often seems that one or more of those unanticipated priorities won - and the most important action items you originally had on your list when you walked into your office this morning did not get done - again.

So, how is an entrepreneur to decide on their priorities - especially when there is so much that needs to be done? The answer is surprisingly easy. (more…)

This one mistake is so critical that it jeopardizes the immediate survivability of your start up company - even before you get started.

What is the second biggest mistake?

Many cost-sensitive entrepreneurs depend on number crunchers, bean counters and newly minted MBAs for their projections - just to save a few dollars.

New start up CEOs doom their new company by pinching pennies in the wrong place. Instead, what they need are pivotal insights from experienced consultants who can provide the guidance the entrepreneur needs for producing a realistic, genuinely implementable business plan.

Your business plan is not some academic document - instead, it is your crucial road map to successful implementation of your vision for your new company.

The most important part of any business plan is the detailed financial projections that are the basis for the entire business model of every new start up company. There are four sets of underlying assumptions that drive all the projections: (more…)

When you want to raise investment funding from private or angel investors, you have GOT to do it the right way - or you could end up with both the federal SEC and 50 state securities boards coming after you - like what happened last month in Pennsylvania.

The risk of major penalties to you and your company are just too great to do this wrong. Look at what happened in this one case: (more…)

This post will give you some idea of the very extensive range of start up industries in which I have consulted and provided business plans, business planning, consulting and mentoring.

One of the many great things about my profession is working with so many bright entrepreneurs and CEOs in so many interesting businesses - and providing them with pivotal help to accelerate the success of their vision. (more…)

Do you still want to start that new company or home based business?

I’m pleased to tell you about my own new company – Start Up Company University – which is a division of Ceo Resource LLC. The first product offered by Start Up Company University might make all the difference to your own company’s future.

Funding Foreplay is a four module audio training course that teaches start up company CEOs like you - how to properly prepare and present the dozen documents you must have to successfully romance and seduce angel investors and VC to invest in your company.

I’ve condensed and distilled down the techniques that have taken me three decades to acquire and fine tune with my own real companies and my own real deals. Funding Foreplay includes over five hours of audio - and over 390 pages of real life, highly confidential, documents you can use as guides for your own dozen documents.

The introductory price of Funding Foreplay will double after the sale of the first 500 courses. You can learn to speak the language of investor love and grab Funding Foreplay at half the price…if you hurry. (more…)

As I get questions from readers from my Ask The Chief Dragon Slayer Campaign, I will take some of the questions that I think might have a broad audience and post them here on the blog.

This one is filed under “Dragons - Fundraising: Can I Use Investor Money To Pay Me Back?”

Question:

Love the blog! Finally someone answering real life startup company questions! I want to raise $1.8 million for my computer business to take it to the next level. Can I use $250,000 of the $1.8 million to pay me back the money that I have already invested in getting my company started?

Thanks again!

Walt

Answer:

This is one of the most frequent questions I get from clients: Can I get back all of my money that I have invested so far in starting my company from the new investment dollars I get from angel investors or venture capital?

The short answer is almost never. (more…)

As I get questions from readers from my Ask The Chief Dragon Slayer Campaign, I will take some of the questions that I think might have a broad audience and post them here on the blog.

This one is filed under “Dragons - Fundraising: Can I Spend The Investor Money As I Get It?”

Question:

Thanks for your comments about accredited angel investors. It was very helpful. We just finished your business plan and are starting to pitch our deal to angel investors and venture capital. Since we are already spending money on buying stuff for the company, can we start spending the investor money as we get it?

Steve

Answer:

The first thing you need to buy is a big sword - so you can fight off all the dragons that are getting ready to hatch! Firstly, you didn’t say - but I hope you have a Reg D PPM for a LOT of reasons. Please see FundRaisingDocuments.com

One of the things that should be covered in your Reg D PPM is how you handle

(more…)

As I get questions from readers from my Ask The Chief Dragon Slayer Campaign, I will take some of the questions that I think might have a broad audience and post them here on the blog.

This one is filed under “Dragons - Fundraising: What Are Accredited Investors And Why Should I Only Raise Money From Them For My StartUp Company?”

Question:

I’m getting ready to raise $2 million for my startup real estate company. I’ve finished my business plan but a friend of mine said I should only talk to accredited investors. I’m not exactly sure what an accredited investor is and I don’t understand why I can’t talk to anybody I want to about investing in my company? Please make this one of your questions for your teleseminar.

Thanks,

Mark

Answer:

Thank you for submitting your question at www.StartUpCompanyQuestions.com. There are several critically important implications and potential dragons I gathered from your question. Since I want to keep you from battling some very vicious dragons as a result of your upcoming actions, I am answering it now so you don’t have to wait until the next teleseminar.

The term, accredited investors, has to do with securities laws - both federal and state - and making sure you comply with the very onerous restrictions that go with the fundraising for your start up company. I’ll give you both the short and long answer to what an accredited investor is in a minute. But the first thing you need to know is that if you raising capital from angel (AKA private) investors, you will almost certainly need more than just a business plan. You need what’s known as a Reg D Private Placement Memorandum - PPM - in order to comply with federal and state securities laws. (more…)

As I get questions from readers from my Ask The Chief Dragon Slayer Campaign, I will take some of the questions that I think might have a broad audience and post them here on the blog.

This one is filed under “Dragons - Sales: How Do You Forecast Revenues For A Start Up Company?”

Question:

I am working on a quickie Excel spreadsheet I developed for a business plan for my internet startup company and am clueless how to even start getting a handle on my guessing my revenues for the first year, let alone the second and third years of my new company. I obviously need to hire you for a lot of what I’m doing since I am also clueless about a lot of things and how to implement them - and it looks like you really have already done it all! But I want to at least have a guess on revenues before I take the next step and start spending money. Help!

Dennis

Answer:

I haven’t done it “all”…but in three decades, I have done a LOT when it comes to start up companies! Working with 2,000 start up companies can do that for you!

In answer to your question, projecting future sales for ANY company can be challenging - but it can be especially difficult for a start up company with no history for guidance.

Without spending time, effort and money with validated market research, it will be hard knowing the real size of both your addressed market and your target market. For most small, start-up companies, their target market is substantially larger than the amount that will be actually captured in the first few years. That having been said, you are still faced with the challenge most start up companies have: predicting a realistic sales forecast.

Your sales forecast numbers are probably one of the most important assumptions you make in developing a business model for your new company. Your sales numbers will have an interrelationship on many of the other numbers in your plan: start up costs, personnel needs, advertising and marketing, support costs, how much space you lease, etc.

An excellent way to forecast sales is to (more…)