bizthreads.net: Business Information for Entrepreneurs by an Entrepreneur

This week, I'm answering a few readers' questions.

From: Mark

“I had a question for you about venture capital. I read recently in the Los Angeles Times an article where many VC firms are ramping up their funding of high tech Internet companies once again.

Some of the companies being funded are startups, with what appears to be very little in terms of history, track record, experience and the like.

My question is, do you think it is possible that a VC firm would fund a startup with a good business plan that did not have a history, experienced management, or even an office?”

Response from Buzz:

Hi Mark!

In the tech bubble of 1999-2001, it seemed like all you needed behind your name was a “dot-com” and you became the recipient of mountains of venture capitalist (VC) money. Some companies didn't even have a business model that would earn them a profit… and they still got money! Of course, today things are very different.

I think that VCs today will continue to take risks and invest in high-tech but will be far more measured than those early days of the “Wild West” of the web. Many VCs will want to see that history or experienced management, but I suspect that some will even willingly forgo history and experienced management as long as they can identify two things: a profitable business model and a ready market… two things that the VCs of the 1999-2001 tech bubble didn't always look for.

If you are looking to get VC money, don't worry if you don't have the history or the experienced management. But make sure your business model has profit built into its forecast AND that there are real people looking to buy your product.

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I hear this term a lot: “fake it till you make it”

I've heard it often as part of sales training courses. If you want to be successful, you have to pretend to be successful. After all, clients may not want to do business with you if you have no track record of success.

The challenge is when do you draw the line?

This can be an ethical challenge for some entrepreneurs who want to show that they are experienced and successful but do not have years of experience under their belts.

My advice to brand new entrepreneurs is to avoid lying — because it will become very obvious at some point while you're working with customers — but you may want to consider spinning your past experience in a different way.

For example, if you worked in customer service for a decade before starting your own business, it's not okay to say you've been working in the business for 10 years but it is okay to say that you've got a decade of customer service experience that allows you to keep your current customers happy. It becomes even easier if you have worked in the same industry that you now own a business; you can say that you have over a decade of industry experience.

And of course, you need to dress the part and make sure your website is professional looking, even if you don't have any customers yet.

Without lying, I think you CAN “fake it till you make it” but make sure that you're always honest.

Today’s blog is not about software that I recommend you download but rather a useful tool you can use to build your business. It's a PDF file of “The Mackay 66”.

Designed by Harvey Mackay of well-known business books including How To Swim With The Sharks Without Being Eaten Alive and Beware The Naked Man Who Offers You His Shirt, this tool will help you build your business.

This document, found here, www.harveymackay.com/pdfs/mackay66.pdf lists the 66 questions Mackay feels will help you know your customer better than they know themselves and you can use this knowledge to help you build rapport, make the sale, and surprise them with great service.

It includes such questions as “Favorite places for lunch” and “conversation interests” and “social organizations”… 66 questions in all that will give you the edge on your competition when it comes to knowing your customers.

I find myself typing the same thing over and over again when I engage customers and vendors in email dialogue. To help avoid this time consuming task, I have started writing my ideas in templates and simply pasting them into my conversations with people.

I've heard that there are computer programs that let you do this (dedicated clipboards, for example, that store dozens of items) but I didn't feel like searching through tucows.com for a free download so I just use a couple of very basic notepad files in a folder with the phrases in them. It's not perfect, some might point out, but it works for me and that's the most important thing.

All I do is open the file and copy and paste the phrase I'm looking for.

Now, if you're thinking that I simply send out form letters, I don't and I don't recommend it. Instead, I find that I periodically include a paragraph in my emails and I ALWAYS proofread my emails to make sure that my “boilerplate” paragraph makes sense and is integrated into the email.

If you are a small business owner, you ARE your company. So if you're considering developing your company's brand, you should really think about branding yourself.

A brand is an emotion that people feel when they are around you based on everything about you… your clothes, your attitude, your marketing materials, your products… everything. Hollywood celebrities and sports celebrities already have this idea mastered.

Peter Montoya's book The Brand Called You looks at the idea of building a brand out of YOURSELF in order to build your business. It can work for everyone from the smallest operator to someone like Bill Gates.

What I really like about this book is that it is so practical, and is filled with success stories and advice that can guide you through the process. The book is highly comprehensive, starting at the very beginning by identifying what is a brand and how a good brand can benefit you and taking you right through the concepts to talk about developing websites and marketing material, public relations, networking. There's also a section on defending your brand should you fall under excessive scrutiny.

What's too bad about this book is that the title may not immediately win you over so that you might pass right by it on the bookshelf on your way to another book that looks like it has more to do with branding your business.

This book is highly recommended.

As a small business owner, you may find yourself occasionally on the road traveling… and other times you're chained to your desk longer than you'd like. There are times when you want to access your email online… and there are times when you want to access your email with your desktop email program.

Yahoo! Small Business allows you to do that with an enhanced POP system in their email program. This came as the result of a survey of business owners who wanted greater flexibility in accessing their accounts.

http://smallbusiness.yahoo.com/email/

That works great for me: I can access my emails with Microsoft Outlook when I'm in the office and through my web server when I'm on the road.

I don't try to endorse programs on my blog, but I do use Yahoo's email service and I'm glad for this enhancement.

I was on a website recently reading an interview with a celebrity. The site was owned by a major television network and rather than posting the interview in a properly written form, they simply transcribed the interview verbatim and stuck it online. The result? Neither the celebrity nor the interviewer came across as being very bright because their sentences were interjected with words that we say but don't write… and the celebrity said “you know” at the end of nearly every phrase. You'd miss it if you watched it on TV, but because you were reading it, it became very apparent and very annoying.

How do you sound when you sell? Most of us have no idea how we sound when we're speaking. I recommend doing two things:

1. Join a local Toastmasters group to develop your speaking skills. They're a great place to build your skills and network.
2. Record yourself talking. For example, record yourself while you're selling on the phone. (Of course, don't record the phone call… just put the recorder on your desk while you're talking so you catch your side of the conversation only). Then review it. What do you find? Do you interrupt a lot? Do you get interrupted a lot? Do you use words like “you know” or “ummm” in your conversation? I'm willing to bet that you'll be surprised at how you sound.

When hiring, you'll likely be able to find an employee who has the computer skills you want. However, training them on proprietary software could be an issue. If you don't have the staff, it can take time to instruct people to navigate the program they're unfamiliar with.

That's where screen shot and screen cam software come in. Screenshot software will allow you to take a “snapshot” of your software, save it as a picture and insert it directly into a printed document… thereby letting you create a very practical user's manual that is more useful than one that says: “at the top of the screen beside the company name you'll find a menu of three choices”… it lets you show them.

And screen cam software is even better: Screen cam software lets you record what is on your screen so that someone else can watch and learn. They'll see the mouse move to the appropriate place and click it and they'll see what happens next. You can add a voice to guide them as they go. In this way, you'll have a great interactive training manual that can show your employee how to use your software.

Two great free programs for your computer:

• For screenshots, check out Screenshot Pilot which is a free program that is fairly robust and very easy to use:http://www.colorpilot.com/screenshot.html

For screen cams, check out Wink which is a free program that records in flash, will also record your voice for voiceovers, and does screenshots, too:http://www.debugmode.com/wink/

There's a lot of focus on annual goals among employees and quarterly goals among departments and monthly goals among sales staff. This seems to be the habit that the corporate world has fallen into. It works… but could it be improved?

Recently I heard about one company that has a very clever goal. Their staff has to drum up sales through phoning leads. While hourly goals are not always practical (because of appointments, walk-ins, or the disparity between long conversations or no answers), they found that a daily goal (25 contacts) was a struggle to reach and staff was only achieving the bare minimum. Now, they encourage their staff to start around 8:30 and have 10 good conversations with prospects by 10 am. This is promoted as the “10 by 10” rule. They've found that their staff kicks off the day in high gear, and it really promotes their success throughout the week, by using the 10 by 10 rule. Prizes are given out every two weeks for employees who manage to do 10 by 10 for 10 days. What they'd found is that it once took the whole morning for sales staff to make 10 calls: They'd start at 9 and work till noon. But the promotion and the change in hours turned it from a 3 hour exercise into a 1.5 hour exercise… and yet no one feels rushed; just motivated.

Can you use this as inspiration to find your own successful way of encouraging sales staff to get motivated?

The Complete Guide to Memory Mastery By Harry Lorayne

I don't have a very good memory, so I have to write things down… if I can only remember what I did with a pen and paper!

Okay, so maybe my memory isn't that bad but I do try to write things down to avoid forgetting them: names, numbers, important meetings, etc. I've read books about improving your memory in the past, but haven't implemented a lot of practices.

Recently, for another project, I was flipping through a few books about memory improvement and found Lorayne's book… and ended up sitting down and reading the entire thing.

The author takes a good approach, selling me on every chapter… nearly every chapter begins with “It pays to…” (… remember telephone numbers, or … remember dates, etc.). And while some books are overly business oriented or overly personal oriented, this one has a good balance and shows the usefulness of memory in both.

His system is primarily based on the peg system, which means substituting easier to remember words for times, dates, names, etc. That can get a little repetitive and I find it time consuming to put into practice, although over the long term, I'm sure that there is value to it.

Actually, I KNOW there's value to memorizing details when it comes to clients and prospects and having them at the tip of your tongue when you need them.

Now all I have to do is remember to use it!