If you’ve never been to a business plan competition or angel conference, you really should try to find one to attend. They’re excellent networking events and great opportunities to see what other entrepreneurs are up to. But more importantly, they give you the rare chance to hear what potential investors like and don’t like about businesses,  business plans, and pitches.

At last week’s Willamette Angel Conference, five finalist companies presented their 10 minute pitches to the audience and investors. The investment fund members had already conducted a six-week due diligence process prior to choosing these finalist, so they were quite familiar with all the details of the businesses. If you’re even considering seeking funding from investors, here are some things we learned last week that should be helpful.

Investors love good teams.
The first comments after each presentation were, without fail, about the management team. The panel clearly wanted to see motivated, experienced leaders behind the businesses before they’d consider investing.

Get investors to get more investors.
When presenting companies had interest from other investors or had already secured some investment, it was a definite plus for the Willamette angels. It validates the business, and the fact that it’s got money in the bank already doesn’t hurt either!

Be in the right place at the right time.
Several times, investors commented on pitches that were for products that met an emerging consumer need or were coming at the right time. Play up how much people need your product to get investors on board.

Be aware of the competition.
One negative note investors sounded more than once had to do with competition. Some businesses had a low barrier to entry, others were looking to get into an already crowded space. Investors appeared wary of putting their money into these businesses.

Show how it will scale.
Several of the entrepreneurs who presented were asked pointed questions about whether their business would be able to scale up efficiently. It seems like a high-class problem to have to worry about meeting high demand, but investors know that many businesses fail because they can’t ramp up fast enough.

It’s all about the exit.
Investors loved the pitch that presented multiple exit possibilities, and appeared less interested in businesses that didn’t have a clear exit plan. Don’t forget to include how and when you plan to exit, and who potential buyers might be.

Don’t forget sales and marketing.
Even the best ideas won’t sell themselves. Investors know this and they expect you to know it too. Several times presenters were asked for more information about their marketing plans and what they’d do if their products didn’t simply sell themselves.

As you can see, a few hours spent at an event like an angel conference could make the difference between wowing  investors or leaving them cold. Whether you follow the advice above or seek out a local angel conference to attend, pay attention to what investors are looking for and make sure you give it to them.

In product design, mistakes are costly, and the longer it takes to discover a problem, the more costly it becomes.

I came across an article written by Dr. David M. Anderson about Design for Manufacturability where he talks about “The Rule of 10“.  He claims that it costs 10 times more to find and repair a defect at the next stage of assembly, and then it costs 10 times more at each subsequent stage of assembly. So following his rule of 10 it goes something like this…

While you can have your own multiplier, whether it be 10, 6, or anywhere in between, the principle is right on.  I would actually  take this concept and back up in time to the engineering stages of a product.

You should have a cost target in mind from day one of engineering, and not just a “throw a dart at the wall” cost target, but a true educated guess as to what you believe the product should cost.

As time progresses during the engineering, any items that could/should have been taken care of at a previous stage are just collecting money until they show their ugly head. If these items end up requiring a redesign to any tooling or fixtures, then you could potentially be looking at $1,000′s to change the design.

This isn’t to say that mistakes can never happen. We’re all human, after all. But it is saying that you should catch those mistakes as early as possible. Bring your manufacturing team into the Product Design stage so that concurrent engineering can take place and you will be able to utilize the knowledge that they bring to your team (you chose them for a reason didn’t you?).

Blueprint image from homepage courtesy of Shutterstock

When asked what’s the most important thing to a website owner for building their site, often the response revolves around ad revenues or social media management tools. But both of these answers ignore the most fundamental part of ensuring long-term growth: trust between the site and the visitors. Without trust, why should readers return? Why would they give you an email address or open an email from you? Trust is critical, and the best way to earn it is with quality website content that readers or customers can rely on.

Bear in mind that building trust with quality website content is highly dependent upon the kind of website you’re managing. If yours is a news site, make sure your news is trustworthy and reliable. If yours is a site with a strong voice — humor or opinion pieces, for example — deliver consistent results so the readers know what they’re getting every time. If your website acts as a storefront, you still need company and product information that shows customers you are trustworthy.

No matter what type of website or blog you own, though, all can benefit from following some important copy essentials. Use the checklist below to make sure the quality of your website content meets the goal of building trust with your visitors.

Basic Grammar and Spelling

If you want to avoid setting off warning bells with your readers right away, then please do a quick spell check and review for basic grammar. Your readers are smarter than you may think. They pick up on those issues, creating an immediate credibility issue for you.

Unless they are long-standing readers with whom you’ve already developed a relationship, you may find a strong correlation between high exit rates from your pages that have spelling and grammar problems. Most web browsers even have spell check, so there’s no excuse for bad spelling these days. Spell check does not correct grammar (such as using “their” when “they’re” or “there” should have been used), so either learn your weak areas and improve them or have someone with a strong grammar background review every sentence before publishing to your site.

Consistent Presentation

Your site is its own brand. If readers skip from one page to the next and get a different sense of the kind of information they’re reading, they will be less likely to connect with your site’s brand or, in other words, your site’s unique message and way of presenting information.

No matter what kind of information your site contains — funny, informative, product-based — the presentation should be consistent. If you use images, make sure to use them consistently. If you have a distinct voice (style of writing) in your posts, try to deliver this voice every time.

Neutral Opinion…Maybe

Unless your website is geared specifically towards strong opinion or humor pieces, it’s important to keep a neutral tone. As soon as a reader is aware of a bias, they tend to immediately over-compensate and over-filter your message. So keep your message balanced when possible, presenting facts, points, and counter-points.

Keeping a neutral tone will mean something slightly different for sales copy. You want to make your product sound phenomenal, but do so without sounding pushy or overly opinionated. Instead, give facts, comparisons, statistics, and customer reviews to make your point in a matter-of-fact tone. Show how your product or services can improve a client’s lifestyle, using strong verbs and powerful words, but without sounding desperate.

Resources for Following

Make it easy for readers to stay in touch. Give them an RSS feed, social media links, and a way to enroll to follow your blog via email. Every site that provides a consistent stream of fresh content should provide a simple way for anyone to subscribe. If you have a WordPress or Joomla site, adding plugins to make subscriptions simple is a breeze.

Then you have to make sure you update your social media consistently. This means that any time you post new content or you have a discount or company update to broadcast, you broadcast it via Twitter, Facebook, and  Google+ (to name just a few options). Most of this can be managed automatically with plugins for whatever platform you’re using. Being timely with your posts and updates lets clients know that you are a serious, legitimate company that cares about informing and keeping up with clients.

Legitimate Content

Be sure that any content you place on your website, any posts you publish, or even your social media updates only contain information that is relevant to your readers and customers. If your readers keep seeing content that is not useful or is uninteresting to them, they will quit paying attention to you. Keep in mind, though, that you will inevitably post content that readers do not like. If this happens and you see a stream of negative comments, respond kindly to comments and know to avoid content of a similar nature in the future.

Also make sure the source of your information is something that your readers can trust. This includes resources you provide for your readers. Whether you provide a link to more information, an infographic, or just images on your posts, make sure the sources are trustworthy. This will depend strongly upon your readers and the type content on your site. News pieces should have quotes from respected sources and products should have reviews from trusted third parties (and real people).

Careful Ad Selection

When possible, be selective about what advertisements are displayed on your site. Just about every automatic advertising system, banner, or text, has a method for helping provide high quality ads. It can be incredibly distracting when someone is reading about one topic and the ads are completely irrelevant. This conflict unfortunately reflects on your company even if you have no control over which ads are displayed, since Google ads often look for the search terms or inbound links to generate the ad content.

But you can generally control which ads are displayed for sidebar banners and other key areas of your site since you may be selling these directly. The key here is to make sure these advertisements are ideal for your customers. Some companies will pay to put an ad on your site just to help with search engine optimization, but are these the kinds of ads that will help your readers ? This also goes for placing affiliate links within your content. Make sure you check out each affiliate before agreeing to a partnership. Then make sure the link fits with the content of the post. Finally, make sure that you limit that amount of affiliate links in the content of each page, since too many will make you look like a spam/scam artist.

Final Thoughts

Trust is the most important commodity for any website. The instant readers quit trusting your content, for whatever reason, you’ve lost them — probably for good. Trust is one aspect that can almost never be earned again with a reader or customer, depending on the level of betrayal. From proper spelling and grammar to careful selection of ads, everything you do should be to build trust. In turn, this trust will translate to long-term relationships between you and your readers or customers, meaning more revenue for you.

Trust image courtesy of Shutterstock

All companies have their own way of going about meetings.

In some cases, businesses have the employees in their different departments meet on a regular basis in order to make sure everything is in order, people are handling their individual responsibilities, and any and all questions can be asked and hopefully answered.

In other instances, companies will rarely bring their employees together to meet, leaving lots of unanswered questions, and an atmosphere of uncertainty.

So, which road should your business take to best position itself for success?

In looking at the pros and cons of meetings, consider these two factors:

• Meetings should serve a purpose – If your various departments are getting a lot out of the meetings, there should be no reason to do away with them.
• Time is of the essence – If your employees feel like the time devoted to meetings could be better spent elsewhere, are you listening to them?

Here are two examples of companies and why there needs to be an understanding and system in place regarding meetings.

Company A – At this company, meetings are few and far between. The different departments essentially have no idea what each other is doing; hence there is little or no communication. When questions do arise as to who is working on what, there are oftentimes no responses and looks of utter confusion on the faces of employees. The bottom line is the workload is suffering and clients are taking notice of the lack of cohesion within the business.

Company B – At this company, meetings happen around the clock. Every time you turn around either you or another co-worker is being called into a meeting; hence it seems like there is less and less time to get the work done. The bottom line is the workload is suffering and clients are taking notice of backed up schedules.

As you can see in these two examples – there was one common theme – the workload being impacted.

One of the most important goals of any business is to meet its scheduled timelines. If the company’s products and/or services are often being delayed in reaching the client, what is to stop the customer from going elsewhere?

I have worked in both situations in 23 years as an employee with a handful of businesses.

I have seen employees that had no idea what the other one was doing because there was little or no communication going on, meaning meetings were about as rare as a Buffalo heat wave in January.

On the flip side, I have seen employees that were meeting constantly, then wondering why their work was stacked high to the ceiling. Perhaps instead of having so many meetings during the day, the head or heads of the company could have put that time to better use, say letting their employees do what they were hired to do in the first place — work.

Most people would probably agree  that you need to find something in the middle of the road. Yes, your employees should meet from time to time, but not every other hour to the point of where they burn holes in the conference room rug.

At the end of the day, those that run the company should set the tone for how often their various departments meet during the work week.

If they’re smart, they will take input from the employees themselves to determine whether they are meeting just to meet.

In your work experiences, have you found meetings to be beneficial, just a part of the job, or a lot of hot air that ended up cutting into valuable work time?

Photo credit: tbip.net

The BusinessMakers Show will broadcast an interview with Palo Alto Software founder and president, Tim Berry, on Saturday, May 12. Tim will share his experiences and expertise on business planning as well as his personal experiences as an entrepreneur.

The discussion will also look at the importance of succession planning, recounting Tim’s transfer of management of Palo Alto Software to his daughter and current CEO, Sabrina Parsons. The BusinessMakers Show will follow up with an interview with Ms. Parsons that will broadcast on May 19.

Starting this Saturday, you can listen to the interview on the BusinessMakers site. You’ll find an extensive collection of past interviews there as well, making it a great source for inspiration and education.

 Microphone image from homepage courtesy of Shutterstock

It’s never easy to leave a stable job to launch a startup. But sometimes circumstances align and a budding entrepreneur just knows that the time is right to make the leap.

Ben Lamson and Sulaiman Sanni, WeDidIt cofounders

Sulaiman Sanni and his partner Ben Lamson were both working  for Meltwater Group, a large, well known Software as a Service company, Su as a social media consultant and Ben as a sales manager. As Su says “We were both in good positions. We were doing well and we liked working there.” But at the same time, crowdsourcing and crowdfunding were getting attention as viable solutions for businesses, and Su was participating as a lender for some campaigns he found interesting. When one designer raised over $900,000 for his Kickstarter project, Su says,  “Seeing that, it was sort of like a light bulb moment. We said, we should be doing this for nonprofits.” And that’s how WeDidIt was born.

“I realized that nonprofits were struggling with fund raising due to the economic downturn, and they needed a more diversified portfolio for their fundraising. Crowdfunding appeared to fit that need, so we decided to give it a go,” says Su. Now, WeDidIt “helps nonprofits launch online fundraising campaigns. Any organization can visit our site and launch a one-off campaign,” he explains, or subscribe to WeDidIt for unlimited campaigns and premium features like consultation and customized software. “The way we differentiate ourselves is that we’re much more than a platform. We actually consult with each client, and tend to become an extension of their marketing team or development office.”

Su and Ben started plotting their new venture in April of 2011, and were ready to leave their jobs by June. “It was kind of scary, but we really felt the need to do something on our own and put our futures in our own hands.” By August they had filed their incorporation paperwork and started marketing their new business.

For these LivePlan users, the big break came in March when they finished in the top 5 of  the 2012 Miller Coors Urban Entrepreneurs Series, a national business plan competition that has awarded over $1.7 million in grants to emerging businesses since 1999. In addition to the $25,000 they won on the strength of their business plan, they benefited from the experience of pitching and learning from a panel of well-respected judges. “We got to be in front of really quality folks who could vet our business plan and give us some strong feedback.”

The competition did more than educate and  put money in the bank for this otherwise bootstrapped startup. “Since winning the competition, things have almost exploded for us. We got the grant, and since then we’ve gained enough exposure to lead us to paying clients before even launching the 1.0 version, and talking to an advisory board and seed round investors already.”

WeDidIt is poised for growth, with plans for the software to come out of beta soon and for additional tools to be added in the next few months. Beyond that, says Su, “We’re trying to build a company that nonprofits can trust to be there as a source of online funding. For now, we’ve chosen crowdfunding as our foot in the door, but we may end up rolling out other products or services that make the whole fundraising experience easy for organizations and more engaging for the donors.”

The founders of WeDidIt saw an opportunity and a need, and put aside the fears everyone who’s ever struck out on their own faces. And they’re happy they did it. “The move was a bit scary and very uncertain,” says Su, adding “but we got comfortable with that. I think as an entrepreneur you have to get comfortable with not knowing what tomorrow’s going to bring.”

It’s not about taxes or any public policy, or economic statistics, or red tape. The right time to start your new business is …

• When you think you can…
• When you’re pretty sure people will buy what you want to sell…
• When you understand the market… You know why people might make purchasing decisions, and where. That doesn’t mean, by the way, that you necessarily have some fancy expensive market research full of numbers and charts. It does mean that you understand the market.
• When you have at the very least a simple practical business plan, just big enough to cover the key information, that feels like it makes sense, and …
• … that includes reasonable educated guesses about the basic numbers … You don’t have to correctly estimate future sales, by the way — nobody does — but you can’t have no idea. And you ought to have some reasonable estimate of real costs. Don’t forget your rent, overhead, and what you pay yourself. And an estimated guess for the assets and early expenses you need to have. And (this is important) ….
• … you already have or have a way to get the resources your plan says you need…
• When you’re not betting your life or your important relationships on business success.
• When you really want to.
• When you have no other options.

Good luck with it. When it works, it’s great. And if you have no other options, that’s a very powerful reason. But here’s hoping you’re not making bets that you can’t afford to lose.

As a small business owner, you may never see the need to grow your company so that you have more than a few employees. Or maybe you never plan to hire even one employee. So, does this mean that you will never have to develop a training plan? Probably not.

Even if you never hire a single employee, at some point you may need to hire a contractor to take over a few tasks or to help with a project. More than likely, you will need to train him or her in some aspect of your business. For instance, if you hire a student to help you design and print materials for a large marketing campaign, you may need to train him or her on how to collaborate with you, how to send final projects to your online printing company, and how to distribute the materials.

If you do plan to hire employees, the fact of the matter is that you will probably have to train them more than once, on more than one process or topic. No matter your industry, training is just a part of life for any growing company.

A plan for training an employee or contractor is a necessary part of successfully integrating the person or agency into your workflow. Even if you only plan to train once, a plan will ensure a much smoother training session with less time involved.

It’s important to take a step back and evaluate the goals of the “program” before jumping into the actual training plan or outline. Once you know your goals, you can put in place the controls you need to make sure you’re actually getting the job done. If you jump straight into training, you may find that your training program ends up leaving certain trainees behind or missing critical steps, which will then require more training and more valuable time that you could be using to keep the money flowing in.

Define the Trainee Level of Knowledge

First off, define your trainees. Are these new employees who may need a thorough orientation or seasoned veterans who simply need a refresher course or a bullet point version? Once you know the level of knowledge of the trainees, you are going to be much better prepared to build or revamp the training.

Topic Classification

Next, classify your topic. This means coming up with a broad description of the topic to be covered. Is this legal training, a technical topic, new employee orientation, or something else? The topic classification helps you determine how you might want to approach the training. You may need to provide extensive support materials, or even pre-test participants to determine who is qualified to take the training.

Train the Trainers

If you have a broad set of training programs that are going to be administered by several people, you will likely need to train your trainers on how you want them to train. Getting in front of a classroom full of peers is not necessarily something that everyone will be good at doing right away. So giving your trainers some instruction on how to lead a program is a critical step in the process.

Resource Development

Based up on the type of training you intend to conduct, there are a number of methodologies for performing the training tasks:

• Prerequisites – providing a list of reading or other resources trainees need to review before attending the meeting.
• Lectures – standing in front of a classroom and walking the group through a presentation.
• Simulation – putting the trainees in a situation similar to one they will experience.
• Discussion – often part of a lecture process to engage trainees in question/answer dialogue.
• Demonstration – trainer shows the trainees how to perform a task.

Once you know how you will deliver the content, you can then develop the in-class and out-of-class resources. These can include:

• A video of the training for later review.
• How-to guides for quick review by trainees.
• Resource links to further study.
• Infographics for fast visual reminders of key topics.
• PowerPoint slides for later review.
• Handouts.
• Measuring the program.

Ideally, you can test participants both before and after training to see how well they absorbed the material. This process can also help the trainees get an idea of the topics you will be covering. As they stumble through the test prior to training they’ll realize what areas they need to focus on as they go.

Most important is the test at the end of the training. This does not have to be complicated. Even multi-day courses can be tested with a consolidated, focused set of questions. While you may need to test comprehensive knowledge, likely you just need to make sure they got the main points. Of course, if you are training a single person, this test may just be a simple “Now you walk through the process on your own” with you guiding where they stumble or have questions.

Evaluate the final tests to see if there is a pattern where trainees consistently did not grasp the important issues. This is where your training will need to be revamped as it indicates an area where either the training wasn’t appropriate or the trainees simply needed more information (which means the training wasn’t as comprehensive as you intended).

Automation

A final point to make about training is that it does not always have to be conducted in person. When building a training program, identify what parts of training may be able to be completed by trainees on their own. More and more companies are shifting towards pre-built training programs for day-to-day word processing and other tasks that are not company-dependent. This frees your staff up to handle their normal activities and lets the trainees engage directly with their training.

You could always write up a list of documents that trainees can read through on their own. These instructions should be clearly written so that trainees can walk through the process easily using the document to guide them. As with other training programs, you can evaluate the effectiveness of your instructions based on how well trainees were able to complete the task without your help.

Overview

Training can be time-consuming but is very often necessary for companies of all sizes. With a proper program in place, you can measure the effectiveness of your training and look for ways to make it more efficient and effective. The key is to take the time to measure the results. Too many small businesses do not perform a quick test of their training programs to evaluate how well they’ve trained their new staff. A little effort in the testing arena can go a long way to a dramatically improved, more efficient training program.

Training image courtesy of Shutterstock

I opened up the bright blue Val-Pack envelope this morning like I sometimes do, more out of a marketer’s curiosity than anything else.  I don’t use coupons; it’s too much of a hassle for me to save a few bucks.  But I do leaf through the coupons just to see who’s advertising, what they’re advertising, and if can find anything in there to blog about. Just kidding. That’s just and added bonus today!

So as I’m perusing endless pizza and car wash coupons  I noticed a huge difference in how the bigger companies advertised compared to the small local companies.

Holy cow – this is exactly what I am always ranting and raving about and here it is in print. In full color even!  Eureka, I’ve struck marketing consultant gold!

But before I get into analyzing the coupons, let’s see if you can spot the difference.  I’ll give you 60 seconds… Ready? GO…

OK, time’s up. What did you come up with???

Give up?

I can best sum it up in one word: VALUE.

Did you notice that the local companies automatically assumed that all we care about is PRICE? And the bigger national companies spoke to our need, want, or pain??? Do you see that?

Petrillo’s says: “Professional Automotive Repair – For Less.”  Translation: We say we’re professional but we don’t expect you to pay us like professionals. We expect you to pay us less than you’d pay a professional…

Lucky Cleaners says : “Stop paying too much for dry cleaning… We’re the Finest Quality Cleaners in Town!”  Translation:  We are the finest quality cleaners in town, but we don’t expect you to pay us like we are.. you can pay us less than you pay the other, not-so-fine, not-so-quality cleaners.

Now in the real world, aren’t “quality” and “cheap” mutually exclusive? Really. Be honest. Think like a consumer not a business owner.  Can you really get quality and cheap?  Not usually. That’s why we buy name brands instead of generic and why we choose Starbucks coffee over McDonald’s, and Safeway over Food4Less.

Cheap to me says it’ll taste bad or it’ll break in a day. Quality says, it’s better, it’ll last a while.  So how can a company be “quality” and cheap?  It can’t.

Now compare that messaging to what the national companies say:

Sports Authority: “Got what you need for Spring? Find all the gear you want here…”  Translation: We know what you need and we know you’re willing to pay for it.  But because this is Valpak and you expect it, we’ll give you 20% off. But nowhere does it say, “Shop us because we’re cheap” – And anyone who has shopped there knows that even with 20% off, it’s far from cheap.

Anderson Windows: “Why deflate your home’s value with cheap, ugly windows?”   Translation: You don’t want your home to look ugly do you? So then why would you buy cheap windows?  We charge more – but we know you’ll pay it because you want to protect the value of your home and you don’t want ugly windows.

Lesson: 

The bigger companies understand VALUE.  They understand that when they communicate to potential customers in their words, on their terms, and with products and services they really need they don’t have to be the cheapest to get their business.

The reason I do what I do is because I’ve worked with huge multinational corporations and I’ve worked with small companies and I wanted to take the tools and practices that the huge companies use and teach small businesses how to stop wasting money chasing bad marketing.  This example makes that point perfectly.

Doing the groundwork is crucial. Studying your customers, your competition, and your market are fundamentals.  Knowing your target market and why they buy what they buy is critical. Figuring out how you’re different from your competition is essential. And learning how to communicate these things effectively is mandatory. Or you will always have to fall back on price.  Who wants to compete on price? Who wants to be CHEAP?  Wouldn’t you rather charge what you’re really worth and be known as the Quality company?

What does your advertising say about your company? Tell us!

You’ve got a great business idea, so now all you need is a great pitch, right? No need to spend time on a business plan, just put together a few slides and a five to ten minute speech and investors will be throwing money at you.

Think again.

A great pitch is important, everyone agrees on that. But with the current trend of startup “experts” saying that business plans are obsolete, the following reminder is necessary:

A pitch without a plan is a bad idea.

Nobody is saying that you should write and print a 30 page business plan document detailing everything that ever might happen in your business. But the act of planning the business will not only better prepare you for actually running the business, it’ll better prepare you to pitch the business successfully.

Think about the content of the pitch and what potential investors are going to want to know. Even if you’re literally pitching your idea in an elevator, you’ll need to talk about your product or service, your team, your market, financial projections, how much investment you’re looking for and how the money will be used (and repayed), and more. If an investor is even remotely interested in your business, they’ll likely have questions, so you’ll need to be ready to back up your pitch with solid research and even more numbers.

Maybe it’s semantics, but if you don’t do any kind of business plan, where do you get all that information? In Pitching Your Business vs. Planning Your Business on Forbes.com, Sabrina Parsons says:

“How in the world can you pitch, and how in the world can you know what to pitch, if you don’t do all the research involved in a plan? Everything you need to include in a pitch deck comes from the research and financials you would do if you were writing a plan.”

Parsons goes on to discuss the ways planning supports the pitch, and uses specific cash flow examples to show how planning continues to pay dividends to companies who embrace it.

In the end, it’s clear the question isn’t really whether or not you need a business plan. If you haven’t been asked for a formal printed document, then maybe you don’t need to create one. But you do still need to spend the time planning your business, thinking through the scenarios and variables you may face, and arming yourself with as much knowledge about your business as possible. Your investors will be able tell that you actually know what you’re talking about, and ultimately the success of your business may depend on it.

Pitcher image courtesy of Shutterstock