To V.C. or not to V.C.? The New York Times profiles two successful tech start-ups—GoodData, which at its start raised more than $50 million in venture capital funding, and RJ Metrics, which held out with self-financing for as long as possible—that went after the same market at the same time, and contrasts their approaches to finance.

Q. & A. on lean start-ups: The Times continues the venture capital conversation with Steve Blank, a serial entrepreneur and founder of the lean start-up movement.

Anxious about the Affordable Care Act? You’re not alone. As the state health insurance exchanges prepare to open their doors later this year, they’re reaching out to small business owners to answer questions and relieve some stress.

“How a Mentor Can Help Your Business”: NFL Hall-of-Famer and entrepreneur Fran Tarkenton will host today’s National Small Business Week event on coaching and mentorship in small business. You can stream the event live at 4 p.m. today EST.

But what about micro businesses? When reporting success stories and planning programs, the U.S. government’s definition of “small” business includes companies with 1,500 employees and $35 million in annual revenue—maybe we should be talking about helping “micro” businesses instead.

It seems like 2012 was the year of social media. Not only did we have even more new players, but there was more pressure than ever for businesses to get on the bandwagon of posting and tweeting to their market.

And just when it seemed that your average business owner managed to get their Twitter and Facebook accounts put together, Pinterest and Google+ showed up on their radar. Not to mention that Facebook, Twitter and LinkedIn all had facelifts, meaning previous profiles needed a tune up.

Every time I spoke this year the #1 burning question remained the same – “How am I, the small business owner, supposed to keep up on all this stuff and how is it going to help me get more business?”

I would say that 2012 was more accurately “the year of social media tools maturing in the small business marketplace”, but 2013 is definitely the beginning of an Online Renaissance. A time when business owners can finally find their voice and yell their message from the online rooftops.

Stop worrying about where you should be online and how long a post should be. That will overwhelm you rather than motivate. Instead, start thinking of what your passion, your company and you can bring to the table to help your target market.

You have the ability to become the “new” media. You have the ability to influence people in a positive way. You have the ability to make a difference. Isn’t that really why you got into your business to begin with?

So what is the key to successful social media in today’s environment? Create a strong strategy instead of focusing or worrying about the tactics. Leverage social media.

As less and less people are turning on their television sets, or reading blogs and magazine websites in lieu of regular old print, the influence of traditional media is giving way to bloggers and what’s trending on Twitter. Start thinking strategically about what you want to post and not so much about which site that’s going to happen on.

How can you do this?

Chris Brogan and Julien Smith, authors of the New York Times bestseller “Trust Agents”, launched their latest book in 2012 called “The Impact Equation”.  They talk about the concept of pretending you own a TV channel, and building your strategy for social media by thinking about what types of programs you would air. Are you NBC, MTV, FOX News, Comedy Central, or Lifetime? Each channel is distinct—you tune in because you’re looking for a certain kind of TV show. That’s how your social media should work: Customers will tune in to you because they’re looking for a certain kind of content.

Maybe one program (or series of posts or categories) is “interesting clients”. Another might be a “how to” show. Yet another might be a talk show that shares conflicting opinions on a specific topic. How about the daily or weekly news?

The premise here is that if you focus on your passion and everything you can bring to the table to share that passion, the followers and customers will follow. Remember: people are smart and savvy shoppers. They will buy from you because they like and trust what you are standing for, not because what you’re offering is the cheapest.

So find that voice, get excited about it and get it out there and share it. People are dying to tune in and start watching!

Technology today affords us the opportunity to initiate contact with a lot of potential customers online, but many businesses fall short of actually converting these customers because they fail to truly engage them. The days when large companies could just blanket the airwaves with their sales pitches and actually expect a return from such advertising are gone. People are tired of being sold to. They want companies to listen to them and slowly gain their trust over time before they’ll open their wallet to them.

Once initial contact is made with a potential customer online, someone has to engage that customer by providing relevant and useful information in a personable manner to build trust. Outlined below are some creative and effective ideas for individuals and companies to interact and engage with their customers online.

1. Build a Community or Group
There are several great ways to build an online community to more effectively interact and engage with your customers. Forums have been around for years and are still a widely used method of engaging with customers and allowing customers to engage with each other. Forums will likely still be around for the foreseeable future, but many companies are now finding it more advantageous to connect with customers on various social networks. Customers are already on these social networks every day, so instead of relying on customers to regularly visit your forum to interact and engage with you, why not bring the conversation to them on their social networks of choice?

Google+ Communities, Facebook Groups, and LinkedIn Groups are just a few of the many social networking sites that allow individuals and companies the ability to set up topic or brand communities.

2. Host a Webinar or Google Hangout
A webinar or Google Hangout is another innovative and effective way of engaging with your customers. They allow you to reach a large target audience on a platform that is very user-friendly and interactive. People love the visual aspects of a webinar with live video of the presenter, slides, graphics, and other interactive options. Webinars and hangouts also allow you to make a very personal connection with your current or potential customers. You as the presenter of the webinar or hangout can also be more passionate, entertaining, and engaging than you could otherwise be by just writing a blog post and short e-book.

Pro Tip: Allowing users to tweet or email their questions or comments to you during or after the webinar is a great way to encourage more interaction with your audience.

3. Co-Create
Planning to release an e-book, redesign your website, or launch a new product? Consider reaching out to your customers to help you co-create something or at least provide their input and suggestions. While this would not be advisable in all situations, getting your customers’ input and assistance can really help you develop a much stronger bond. They will feel proud that they were part of the effort and process that made your product better.

When you encourage customer participation on a project, just be sure to reward the people whose ideas and input you implemented. Try to turn it into some sort of contest and recognize the people who helped. You can reward the key contributors with a prize, but sometimes recognition alone is a good enough reward for certain people.

4. Celebrate Together
Did you just reach 5,000 registered users on your site? Did you attract 25,000 new visitors to your site last month?  When your company reaches milestones like these, celebrate your success with your customers and make them feel like they contributed to your success.

The reason some people are so passionate about sports is because they feel as if they are literally part of their favorite sports team. When the team wins, they win. Instead of saying, “The Cowboys played a great game last night,” a real Cowboys fan will say “We played a great game last night.” That’s the mentality you need to develop with your customers—make them feel part of your winning team, and thank them for helping your site to be a success.

5. Offer Exclusive Content
Create content that is not available to the general public—content that is so special and exclusive, that only members can view it. Require users to login to this area. You don’t necessarily have to charge for access to this content, but require users to at least go through a registration process to gain access to it. It will make them feel special and part of your exclusive group.

You may also want to offer special discounts and pricing to this group as well. A members-only forum where registered users can discuss industry-related topics is also a great way to build unity and engage your customers.

6. Solve a Problem Together
Is there a particular problem in your industry that needs to be solved? Suppose you own a resource site for web developers, and you discover a group of your users are all having the same problem with a particular software program or programming language. Ask for user interaction and input, and solve the problem together as a group. This will create a stronger bond, and everyone will feel more like a team.

7. Offer Ways to Interact
If you have a blog, allow visitors to leave comments on your blog. There is nothing more discouraging than reading a great blog post that a reader can’t leave a comment or question on. Sure, you’ll get some spam comments by allowing people to comment, but there are a lot of great plugins and programs to help filter spam out, and it’s well worth the time and effort to publish good comments.

When people do leave good insightful comments, be sure to respond to them and thank them for participating in the conversation. If someone leaves a question for you in a comment, be sure to respond to their question. It looks bad to other visitors to see questions go unanswered.

Your site should also include links to your social profiles on sites such a Google+, Twitter, and Facebook. This will allow your visitors to interact with you in more ways than one.

Technology today offers so many great ways to interact and engage with customers online. Take advantage of all the free tools and resources available today and devise a plan to better engage and interact with your customers online. If you don’t, your competition will.

What other ways have you found to be effective in engaging with your customers online? 

Congratulations! This week marks the 50th anniversary of National Small Business Week. The U.S. Small Business Administration will be hosting workshops and mentoring match-ups today in Dallas/Ft. Worth and later this week in St. Louis, Pittsburgh and Washington, D.C., and events (featuring entrepreneurs like Jack Dorsey of Square and Twitter and Angie Hicks of Angie’s List) will stream live here.

Growing confidence: In the UK small business confidence is at a three-year high, and in the U.S., six out of ten small business owners say they expect their businesses to be “thriving” in five years.

Tough environment: Most UK small business owners still report a “very poor” credit market, and the majority of small business owners in the U.S. say it’s harder to run their business now than it was five years ago.

Slowing sales? Over at The New York Times, Paul Downs is running a four-part series on his decision to hire a sales consultant. You can read yesterday’s introductory post here, and today’s post on how his sales process broke down here.

“Speed dating for businesses” in New Zealand: Innovest Auckland 2013 is matching 59 pre-approved small-to-medium businesses seeking growth capital with 112 investors.

Imagine piloting an airplane: you taxi to the runway, prepare for takeoff, and as you’re rapidly speeding up to get airborne you notice a construction crew frantically working to build out the rest of the runway.

This just about sums up the financial stress of being an entrepreneur. While a certain amount of discomfort is just part of the lifestyle, being able to answer these key questions should help you sleep soundly at night.

(We’ll be using LivePlan to display these metrics. LivePlan’s cloud-based Scoreboard feature enables you to track your finances on the go. You can take LivePlan for a spin here.)

Are we hitting our targets?

Begin with the sales and expenses first: are you ahead or behind on your monthly goal? Compare your Month-to-Date sales and expenses to your End-of-Month goals to see if you’re on track.

Can we pay our bills this month?

Look at your cash balance and Accounts Payable. Just because you’re profitable doesn’t mean you don’t have to worry. Profitable companies run out of cash too. Keep an eye on both your monthly burn rate and any major payables to make sure you’re financially viable in the immediate future.

How much runway do we have?

If you are running a monthly net loss, you need to closely monitor how much of your expenses aren’t being funded from revenues. Looking at your burn rate again (monthly ongoing expenses), project forward to see how much runway you have until you run out of cash. Comparing last month’s actuals to the projections in your business plan will generate valuable discussion for your executive team.

Do we have enough cash to get to break-even?

Financial break-even is a major milestone that you should monitor and adjust constantly as your situation changes. Closely track net profit vs. your business plan projections, taking a 12-month view to get a better picture of the trend. Keep in mind your runway projection – if you don’t have enough cash to get to your breakeven date, your runway will end before you get off the ground. Start plans to raise money and look at ways to cut your expenses.

There’s a saying: “An entrepreneur has to learn to be comfortable feeling uncomfortable much of the time.” Finances are usually the largest source of that anxiety, but you can keep it to a minimum by spending a few minutes a day checking your financial health.

Entrepreneurs are a funny lot. As the most passionate, energetic people in the room, they are attracted to big ideas and often pursue businesses because they like to build. This desire to chase ideas and build is a requirement of getting a business off the ground.

But, once that business is up and running, the same instincts that built it can become a hindrance. Now, the entrepreneur has to focus, forgoing lots of “good” ideas to stabilize and grow the one he has already invested in.

A college friend of mine was considered the guy most likely to succeed in business. He was way ahead of the rest of us in social media, technology, and online marketing. He split his time among all his ventures, while he could have been devoting the most of his time to the venture that had the best chance of success.

He had ambition without focus or a concept of the time he spent on each cause, which landed him in an ad agency, building someone else’s business. Without managing your time properly — using tools such as time logging — your chances of success are very slim. My friend found out the hard way.

The Startup Killer

When you chase every idea, you and your business run the risk of becoming a “jack of all trades, master of none.” A business doesn’t make money by launching projects. The money comes when you optimize a successful project.

Also, when a founder jumps from project to project, morale plummets. Want to know the quickest way to demotivate and eventually lose the great team you’ve built? Constantly put your team members on projects that never get finished. The simplest way to fix this is by implementing a personal time log.

The Startup Savior

Maybe it sounds overly dramatic, but that personal time log can save your startup. It’s the same psychology that goes into food logs for those trying to lose weight. While there is a lot of disagreement about the best way to lose weight, everyone agrees that accountability is key.

Time logs work the same way. They put — right in front of your face — what you are actually doing each minute.

For entrepreneurs, wasting time is akin to sneaking snacks while on a diet. You might spend a few minutes checking email, a few minutes on this project, a few minutes on Facebook, or a few minutes “learning” by reading useless articles. Before you know it, you’ve put in a 10-hour day accomplishing nothing.

The solution? Keep a time log for seven days.

The time log should include the start time, end time, duration, and description of everything you do (except, maybe, going to the bathroom). Track everything from personal activities like eating breakfast to every little thing you do for your business, even changing the coffee filter.

For example, say you want to work on your main money-making project. Record in your time log what time you started and what you’re specifically doing.

Want to check Facebook for no reason? Put a stop time on your main project, along with how long you worked before deciding to waste time. Then, start a new line with your Facebook start time.

The work involved in keeping this kind of log could stop you from wasting time in the first place.

The seven-day log isn’t just good for curbing time wasters. If you find yourself pulled in all directions on different projects, you can use the log to track the amount of time you’re spending on each one. After seven days, you should be able to see how your time is used most effectively.

Startups thrive on ideas, but money is made on execution. It’s your job as a founder to focus yourself and your business on the money-making venture. A time log can protect your startup from the very thing that made it possible in the first place: your ambition.

News Flash: investors don’t believe your ROI projections. News at 11.

Why is this news? It shouldn’t be. But recently I joined two other angel investor members of our local group in a conference call giving companies feedback on why they didn’t make the final rounds in our annual event.

As the session got into open-ended questions, I was surprised, and even shocked, by a frustration shared by several of the entrepreneurs. Several of them seemed to think that we were comparing different plans, and making decisions, based on what the entrepreneurs projected as our return on investment; as if they were cheated, somehow, by not having the highest projected ROI win.

The three of us said about the same thing: the high projections weren’t credible, so we ignored them. We looked at the product, the market, and the management team, with some attention to defensibility and scalability, and we made our own intuitive comparisons of possible ROI.

Then I got the same thing again this year, more than in the past, in the business plan contests I judge. As if we were obligated to rank companies according to projected returns.

I find myself mildly offended by the idea that I’m supposed to give real importance to numbers for five years in the future produced by unbelievably high sales projections coupled with unbelievably high profitability rates and linked with hypothetical valuations based on high multiples of sales or profits. I’ll look at your plan instead and figure out what I think you can do. I trust my judgment on that.

And Internal Rate of Return (IRR)? Come on, I went to business school too, and I know the academics like it, but it depends on a realistic sales projection, realistic costs and expenses, plus a discount rate … so many unknowns. It’s a complete waste of time.

If you’re the one telling entrepreneurs they need to show some fantastic return on investment, stop it. It isn’t helping them.

As everything goes digital, it becomes more and more important to establish new methods for quickly disseminating information. It isn’t enough to simply store files on a hard drive; they need to be accessible and well-organized.

A well-managed file system can help ensure that nothing falls through the cracks, and giving the right people constant access to certain files and computer systems can stop potential catastrophes before any serious damage can be done. Businesses need digital data rooms, and the ones that delay getting on board have the most to lose.

1. Preserving documents

Paper decays fairly rapidly, and it takes far longer to sort through files by hand than it does to track them down within a computer system. Existing companies already have mountains of paper records, and the problem only compounds with time. Digital storage completely eliminates many of the hassles that go with traditional record keeping, and so long as businesses maintain multiple backups of everything through the present day, there’s virtually no chance that anything will ever be lost.

2. Accountability

Data rooms make it easy to display all of the pertinent information investors might ask to see. Investors don’t like risk, and having everything gathered in one place projects the image that a company stays on top of things and that it is ultimately trustworthy. The relationships that companies can build with investors through a well-structured data room is worth the time and effort in and of itself.

3. Investors can gain access from anywhere

Data rooms don’t have to be put online, but the ease of communication makes it a tempting prospect. Security is a major concern, but there are programs that are able to deal with any potential threats, and having someone on staff who understands the inner workings of the data center enables a company to keep major threats from breaking through. Yet again, the major benefit is accessibility, and being able to share information with bidders from around the world can only benefit a business.

4. Online data rooms make transactions easy

The number one rule of business is to give people what they want, and that’s as true with investors as it is with customers. Creating an online data room results in a big uptick in bids, and the bids placed through data rooms are larger on average than bids placed through other channels.

5. Investors get more information

The reason that bids placed through data rooms tend to be larger is because investors get more quality information before they have to make a decision. A mix of higher quality and higher quantity results in monetary gain. Data rooms make transactions so quick and painless that countless investors have begun to use them exclusively when planning deals.

Digital is everything

There are pitfalls to virtual data rooms, and there always will be. Every system has holes. What matters is whether or not the problems posed by new technology outweigh the advantages of adopting it, and virtual data rooms are a prime example of tech that improves on existing models and gets better by the day. Any business that needs to attract new capital should definitely consider going virtual.

Finding the right business partner is no easy feat. You probably have an idealized image in your head of the type of like-minded individual you would like to launch your venture with, but as with a lot of aspects in life, things don’t always work out the way you planned. The stark reality is that you will most likely work your way through multiple business partners as you embark down your desired career path, which isn’t necessarily a bad thing. For one reason or another, some partnerships simply won’t work out and most the time no particular party is to blame.

Due to the continued and rapid growth of the internet and social media, there are more ways than ever to find a partner that shares your goals and aspirations. Below we’ve collected some of the best ways to find your perfect business partner.

Meetup

Meetup is an online networking portal that allows people to organise offline group meetings across the world. Boasting nearly 14 million members, there are groups for every hobby and interest imaginable. Although the majority of people use Meetup for recreational activities, more and more business orientated groups are popping up around major cities and startup hotspots.

Apart from being great places to seek advice, practice your pitching skills and build relationships, these startup focused gatherings are a great way to meet like-minded individuals and potential business partners. They are usually free to attend although some may charge a small entry fee to cover costs of refreshments and food, and it’s not uncommon to have prominent figures presenting or running workshops.

Below are some examples of relevant Meetups that are perfect for finding a partner:

• London Co-Founder Club
• NYC Business Networking Events
• Berlin Startup Culture

Explore Your Own network

One of the best ways to find a partner is to simply start with the people you know. You would be surprised at how often your ideal partner is a friend of a friend or distant acquaintance, and the message that you are on the hunt will soon spread fast.

Begin by assessing your strengths and weakness and work out what you need from a business partner. Teaming up with someone who excels in key areas you fall short in will bolster your business, progressing to a more well-rounded skillset overall. Identifying your requirements will make it easier to portray to your friends, family and associates exactly what you’re looking for, in turn increasing the likely hood of finding the perfect match.

Conferences and Networking Events

Along a similar vein as Meetup, there are an abundance of conferences and networking events that are well worth attending. The tickets to such events can sometimes be quite expensive, especially for a startup on a shoestring budget, but the knowledge offered coupled with the opportunity to network usually makes up for it.

Be sure to capitalize on the short and precious time you have with like-minded individuals and potential customers. Be sure to execute these basic networking tips as a rule of thumb:

• Arm yourself with a fixed number of business cards, and don’t leave until you’ve handed them all out
• Create an elevator pitch for yourself that is no longer than 20 seconds and highlights who you are and what you do
• Ask questions, try to avoid talking about yourself or your business unless asked
• Remember to follow up with the people who you exchange details with

PartnerUp

PartnerUp is a free networking site that encompasses several aspects typically related to small businesses and startups. However as the name suggests, it predominately focusses on connecting potential partners and opportunity discovery. There is a heavy emphasis on communication and the site successfully encourages healthy discussion between entrepreneurially spirited individuals.

Members regularly offer and seek advice about new challenges they must overcome, and there is a real sense of transparency found across all areas of the site. The ability to search for opportunities is well suited to individuals who have the desire to work for a startup or small business, but lack that golden idea to take it to the next level.

PartnerUp succeeds at creating a community driven hub; it’s been running for several years and boasts an impressive user base, however it currently only allows US signups. As with most things on the internet, be sure to execute caution when revealing intimate details of any ideas you may have.

Whether you’re actively seeking a partner or considering sharing the load, it’s important to remember that things won’t always go smoothly. Fights and disagreements are inevitable, and are a healthy way to logically overcome problems and move the company forward. If you feel like you have found the right person, ensure that everything is sound from a legal standpoint. This prevents several complications further down the line when the company starts doing well.

If you have advice based on personal experience on finding a business partner, be sure to let us know in the comments below.

When you’re running a small business, it’s always great news to discover that you’ve got more work than you can keep up with. And when an increasing workload doesn’t quite warrant taking on an additional full-employee, outsourcing can be an effective and financially viable solution.

Outsourcing work has its benefits; namely, it can take some of the pressure off your in-house team, but there are obvious concerns about letting an external person, regardless of how qualified or experienced they are, contribute to the running and output of your business.

Assigning tasks to outsourcing providers

Even though you’ve taken the decision to outsource tasks as a result of a mounting workload, it goes without saying that the most important and vital work should definitely remain in house. You’ll have more control and input over what is being produced, and this work will be carried out by individuals who have a more detailed knowledge of your business and how it works.

When an individual is operating outside of a working environment, you naturally have less control and input over the work they are producing and the method by which they are doing it.

If you employ someone on a temporary basis, it’s often the tendency to relax the process by which the person and their skills are evaluated. However, regardless of how short a time period a person is going to be working with a business, their skills and experience should be examined with the same attention to detail as if they were a potential full-time employee.

Use the same procedure and mentality you would if you were hiring a permanent member of full-time staff. Even if an individual is going to be contributing to your business for a relatively short time, request references, samples of their work and a detailed record of their experience and work history to date. You’re paying for their services after all, so you should ensure that they’re capable of providing high-quality work that is going to contribute to your business.

Steve Mezak is CEO of Accelerance, a California based company specialising in helping small companies and businesses to outsource work. Speaking to www.businessweek.com, Mr Mezak said: ”Hiring an outsourcing vendor is like hiring employees […] Think of the offshore team as your own, one that you carefully hire and manage over time to get excellent results.“ Being stringent about who you hire will ensure that money used to outsource work won’t be wasted and that work won’t be improved or redone by permanent employees who are occupied with completing their own responsibilities. In such an instance, outsourcing can essentially increase workload further.

To avoid the necessity of work being modified and improved upon, be specific with regards to the tasks you’re assigning an external employee. The simple fact that they’re not in the working environment removes the opportunity to discuss ideas, requirements and the work that is being produced. Creating a detailed brief of what is expected will save time and money, and it will ensure that the best results are achieved in an efficient time frame.

Taking measures to ensure effective outsourcing

Allocating an external employee a company email address is essential for maintaining contact, outlining expectations and duties, as well as being an accurate way of recording exactly who is responsible for tasks – this will be especially helpful if there is ever a dispute or confusion as to what was expected of an external employee.

When someone is working for your business, they’ll need access to the relevant materials and information to get the job done. That includes access to and use of your businesses’ IT system. If you’ve carried out the necessary background checks and obtained references, you should be in a position to trust an individual to provide them with access to this information.

However, as your workforce grows, including external employees, trust is no longer an adequate line of defence with regards to things like IT security. Though it’s necessary, and indeed vital, that employees have access to relevant material, ensuring that you have adequate restrictions in place will remove any threat that confidential material, including information regarding your client base, could be used inappropriately. Implementing effective IT security, available from companies such as UK-based firm TSG, is an effective way of applying security policies. It allows you to restrict access to specific material, without hindering the output of an employee, permanent or temporary.

While it’s of the utmost importance to outline what is expected of an individual when you’re outsourcing, it’s also equally important to make issues of payment clear to an external employee. As your business grows and outsourcing becomes a recurring necessity to cope with demand, having a standard contract which determines payment and conditions of work is an effective method of controlling this aspect of outsourcing.

However, when you’re outsourcing on a small scale, formally setting out expectations and details of payment on which both parties agree, is more than sufficient. Like all communication between a business and external employees, this should be recorded in the form of emails, so that any disputes can be quickly resolved.

Outsourcing is intended to save you time and effort, contributing to the success and growth of your business. However, taking time and care when selecting employees who will be responsible for your delegated tasks and implementing the necessary measures to remove potential problems, will ensure that outsourcing is a help, rather than a hindrance, to the achievement of your business.