All posts with the tag 'Entrepeneurs'

Top 5 Tips When Creating A Virtual Business

Here's to "Your Virtual Success"!

Perhaps you’re considering creating a business or expanding a current business. As with many businesses, investing in inventory, product development or warehouse space might seem requisite. And perhaps this appears to be a reasonable or even logical approach, borrowing the famous quote from Field of Dreams, “if you build it, they will come.” After all, your simple business plan projects profits after only a modest startup period. My advice is to think about this again. When creating a new business, it’s highly advantageous to operate in a way that is both conducive to a flexible lifestyle while mitigating downside risk, including ramp up time or significant upfront investment.

Then again, you might be thinking that you can alleviate the risk by securing a bank loan, tapping into your home equity or even attracting venture capital. My advice, once again, is to think about another path, preferably one revolving around the golden rules above. Yes, there are a select few who can beat the traditional small business odds which are often estimated at 5 to 1, where only 20% of new businesses succeeded in the first 3 years. Venture capital odds are surely the worst, where many experts maintain the odds that you will succeed (find VC funding, maintain control of your company and enjoy a positive liquidation event) are about 5,000 to 1. How difficult are these odds? At roughly 5,000 to 1, you would odds comparable to getting struck by lightning.

Bootstrapping your virtual business should be much easier than funding a traditional brick and mortar business. Before opening a traditional storefront, or investing in a physical office, ask yourself if you can work from a home office, or if you can adjust your operations to accommodate a virtual business model. Instead of getting on a plane or train, are you sure a “face to face” Skype conference call wouldn’t suffice? At a cost of about $5 per month, you can simultaneously video conference with multiple people, regardless of their location. Instead of investing up front in capital equipment, can your new business secure orders in advance, or even deposits in advance of delivery?

  1. A short path to the money (limited ramp-up or development time)
  2. No upfront capital
  3. Customer deposits in advance of delivery
  4. Contractor based assistance for delivery
  5. Niche marketing opportunity (it’s much easier to target a vertical than a horizontal)

When thinking about your next venture, think about the Top 5 virtual business startup tips and if possible, find a virtual business model that leverages these for your new or existing business. Try to follow some or all of these.

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The Art of the Start, The Time-Tested, Battle-Hardened Guide for Anyone Starting Anything – Book Review

The Art of the Start, The Time-Tested, Battle-Hardened Guide for Anyone Starting Anything, offers readers both good news and bad news on starting up a company. The good news offered by Guy Kawasaki rests upon his background as a venture capitalist. Kawasaki is the managing director of Garage Technology Ventures, an early stage venture capital firm. According to their web site, “Garage Technology Ventures is a seed-stage and early-stage venture capital fund. We’re looking to invest in extraordinary entrepreneurs who have the ability to build great teams and great companies.” Thus the good news revolves around strategies to pitch business ideas to venture capitalists, positioning your company, writing a business plan, “making mantra”, etc. These are all important activities and based on sound advice. Kawasaki offers exercises, tidbits and suggestions on redefining thinking in entrepreneurial terms, all helpful to early stage entrepreneurs.

The bad news revolved around bootstrapping and the fact that there was only one chapter on this truly important topic. The Art of the Start seemed slanted toward the “come up with an idea, write the business plan, pitch to venture capitalists, secure early stage venture, increase sales, find additional venture, liquidation event road”. I strongly favor bootstrapping, self funding and virtual business ideas over the borrow tons of venture capital funds to succeed path, and fully understand that reader bias could have crept into this perspective.

If your entrepreneurial idea absolutely requires the significant capitalization that venture capitalists offer, The Art of the Start should definitely be at the top of your list. There is an excellent section on pitching to venture capitalists complete with the questions which are likely to be asked and suggestions on the best answers to offer would be venture investors. I found the book to be well written and thought provoking, particularly enjoying the final chapter, The Art of Being a Mensch (and the three foundations of menschhood), which you may want to read first. So, the good news is, though there are more aspects to this book than venture funding, you should definitely read this book if you’re thinking of venture capital funding. The bad news is that statistically, entrepreneurs are better off finding alternatives to venture capital funding and might be better off reading books focused on alternatives to venture capital funding. Regardless, I enjoyed The Art of the Start and found it an interesting read.

For more information on start-ups, read Your Virtual Success (Career Press) or visit: http://www.yourvirtualsuccess.net.

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The Days of Person to Person Selling are Coming to a Close for Many B2B Businesses

Last week, I was discussing an eMarketing, Web seminar and warm call strategy with one of my sales agents, who I will refer to as Joe. He’s worked with me for almost 6 months, and has done very well. We were discussing our outbound lead generation programs when the conversation turned to our mutual and virtual business lifestyle. He started by commenting about his car. “I was driving almost 30,000 miles per year, each year for the last three years”, he said. I was lucky to keep a car for more than three years, and when I traded it in, the value had dropped like a rock.”

Cars are extremely expensive to operate, with the IRS using a current figure of approximately 50 cents per mile to cover the cost of operating a car. At 50 cents a mile, Joe was spending about $15,000 per year on auto expenses alone, and to make matters worse, the company he was working for did not reimburse him for car expenses. From Joe’s perspective, that meant an income stream of say $100,000 per year dropped to $85,000. But it was actually worse than that, because it takes at least $20,000 in income to net earnings of $15,000. So he felt his effective income had dropped to about $80,000. Joe continued, “These days, I drive less than 100 miles a week, and even then, most of the mileage is optional.” Joe’s virtual business lifestyle allows him to work far more productively than the old days of a suit and tie, drive to the prospect, shake hands and drive to the next prospect type selling. And of course, this also meant fewer suits, shirts, ties, dry cleaning bills, restaurants and fast food meals, etc.

Recently we were on a web meeting with a prospective client, the CEO of an insurance agency, and he commented on the difficulty of obtaining on site appointments with prospects. He said it was getting progressively harder to secure an on-site meeting; fewer and fewer executives were willing to meet him in person to discuss their business insurance needs. He was both surprised and frustrated, though his comment made perfect sense to us. On-site meetings are becoming an outdated concept for many businesses, and this is being caused by both buyer and seller alike.

Our case in point is Joe. Should Joe spend $15,000 per year to drive to his prospects? He was selling business insurance at the time, nothing needed to be physically present to accomplish this. It wasn’t a tactile job, he wasn’t repairing a car engine or painting a house, it was a conceptual or informational sale. Relationship building is easier in person, but expertise and professionalism can still be conveyed by phone, and can be conveyed even easier in a web meeting. Personally, I think the days of commuting, selling and buying in person are coming to a close for many businesses. Though this may not be true for everything, for example you can’t test drive a car virtually (at least not yet), it is true for many, many, many, products, services and solutions. And we think the time to be test driving the virtual sales model for your business is today.

For more information read Your Virtual Success on www.alanblume.com

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Leveraging Brick & Mortar Unemployable

We were looking for someone with the following qualifications and attributes:

Seasoned sales professional, articulate and intelligent, strong sales track record, enjoys prospecting and working remotely with prospects, good written communication skills, superior verbal communication skills, strong closing skills, Bachelors degree, Microsoft Office literate, work from home venue, self motivated, independent – AND – and that they would be willing to work with no initial compensation on a commission only basis (or nominal draw against commission).

Impossible to fill this position you might say. But in the virtual world, this position is not difficult to fill. We can tap into stay at home moms, stay at home dads, retired or semi-retired professionals, and those who just cannot leave their homes for a myriad of reasons. So we posted a free ad on Craigslist, received a couple of dozen responses, closely reviewed four and have now hired a superbly experienced individual to work with us. This individual sought a stay at home professional position, extreme flexibility, and compelling income opportunity through a commission only program. We offer – flexibility, opportunity and income potential. They can meet their children when they get off the school bus without concern about punching the clock or reporting there whereabouts. We have used this model successfully for five years. We enjoy a competitive advantage by working with superior, highly qualified people that traditional brick and mortar businesses cannot employ.

This makes us flexible, profitable, and able to easily expand or contract when necessary. We don’t invest in offices, furniture, heat or lights – just people and technology.  And nobody gets paid until they produce something – if someone is earning – they are producing. It’s a better model and a better lifestyle for everyone we work with.  www.alanblume.com

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Micro Market Yes – Micro Manage No

In a Virtual Business Model, highly targeted, extremely specific, micro marketing is a great way to differentiate your company and message from the competitive throngs. For example, why market to high tech organizations, when you can market to software companies? Why market to software companies when you can target your marketing to smaller software companies between $5 Million and $25 Million in revenues. Why market to those companies when you can micro market to SaaS software companies (Software as a Service) for example? Now we have a very specific, highly targeted group and we can tailor a message specifically to them. We can even go the extra distance and create a buyer persona for the specific titles we are targeting: CEO, VP Business Development, VP Marketing, etc.
Conversely, in a virtual model we should focus on virtual employee or contractor goals, not their working schedule or process. A graphic artist for example should be paid on a completion date for a final deliverable. Set the goal and the date; don’t manage their time or methodology. Telesales people can be paid upon call production or appointment setting efficacy. Don’t tie them down to specific calling hours (other than it must be general business hours). Let them operate at their peak times and periods of peak efficiency. If you’re using web designers, create a simple process for your personal imprint, initial mockup, full scale mockup and approval. Create a series of milestones (and dates), and manage the results, not their time.
Leveraging the Virtual Model and simplifying your own management process should help optimize your time. After all, you should be virtually managing the results, not the personnel. The Virtual Model minimizes office politics, water cooler time, non productive marathon meetings, and the peripheral gripe sessions. Be more efficient – go virtual.  www.startupselling.com

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