Thinking about selling your business?

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Just the other day, I gave a talk to my NetworkNetwork Group on Business Planning as a Strategy for Success. One of the topics I addressed was planning for one’s exit from the business. The NY Times must have heard about my talk because this article in the Personal Business section of the newspaper appeared a few days later! It also talks to small business owners who are planning to sell or have recently sold their business, and I thought it would be worthwhile to share some of the points made in the article with all of you.

  • The first piece of advice is to start running your business as if a buyer will come along at any moment.
  • Another piece of advice is not to run the business as if the deal is done before it is.
  • Part of running a business to be sold is regularly reviewing how it is doing relative to its competition.
  • And, as to the financial offer itself, the amount is always going to vary on the buyer and what the buyer wants from the business owner.

 

I urge you to read the full story here and let me know what you think.

 

 

Bootstrapping or taking venture capital money – that is the question!

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Ron Rudzin self-financed his online mattress company, Saatva. Credit Bryan Anselm for The New York Times

 

Is it possible to grow to a mega-sized company without venture capital or angel funding? Is it possible to grow organically over time, be self-funded and eventually become a mega company?

There are no rights and wrongs, just the risks that start-up company founders have to weigh very carefully before taking any type of investment from a third party, or going it alone with no outside funding.

This article in the NY Times Entrepreneurship column a few weeks ago focused on start-up companies that have taken the road less traveled and did not seek or receive venture capital, but have achieved mega company size.

I encourage you to read the entire article, and let me know if you know of any company in the last twenty years that arrived at an IPO without venture capital or debt financing!

Read full article here

Are We Really Just a Brand?

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As you all know by now, I am an information junkie. I read many different blogs and articles on a regular basis, and more often than not, I get to thinking that I need to share what I read. This piece written by Seth Godin (Full article here) really got me thinking.

Are we really just a brand? Do we always have to market ourselves? Why do we always have to sell ourselves?  What really sets us apart from all the same businesses or people we compete with? How do we stay true to ourselves, but continue to market/sell our services?

I think I can make it simple, but not easy. I do my best to do business with people I like. I love the challenge of working with smart, and even arrogant business owners. But, if I don’t feel a connection, I will end the engagement before they do!

In the end, I may be a brand, but as Seth says, I am a first and foremost a person, and I need to make a personal connection to do the work I do!

Social Skills: Valued Over Technical Ability?

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As technology and automation replace workers, new jobs are created in order to support the machines and adapt to the shift in the economy. But as robots begin to perform surgeries, do your accounting, and manufacture your goods, there will be a shift in skills demanded of workers. Here are a few key changes that can be expected in the coming years:

  • Education: While social skills are not emphasized in today’s curriculum, emphasizing team work can help improve the social skills necessary to survive in today’s job economy.
  • The Current State of Jobs: “Despite the emphasis on teaching computer science, learning math and science is not enough. Jobs that involve those skills but not social skills, like those held by bookkeepers, bank tellers and certain types of engineers, have performed worst in employment growth in recent years for all but the highest-paying jobs.”
  • Women Thriving in the Workplace: “Women seem to have taken particular advantage of the demand for social skills. The decline in routine jobs has hit women harder than men. Yet women have more successfully transitioned into collaborative jobs like managers, doctors and professors.”

At your own workplace, ensure that cooperation and teamwork is emphasized and nurtured. Though your job isn’t likely to be immediately threatened by incoming technology in the immediate future, it may be important to have a backup plan in case it is. This excerpt from the article best summarizes what jobs are under pressure, and which will come to thrive in the coming years: “Jobs that require both socializing and thinking, especially mathematically, have fared best in employment and pay, Mr. Deming found. They include those held by doctors and engineers. The jobs that require social skills but not math skills have also grown; lawyers and child-care workers are an example. The jobs that have been rapidly disappearing are those that require neither social nor math skills, like manual labor.”

Click here to read the full article in The New York Times.

4 Things to Know Before Working for a Startup

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Between the struggle to find work right out of college and the glamorized lifestyle, startups are becoming an attractive option to millennials who are heading out of college. The culture is often seen as a work-hard play-hard environment where power lunches are followed by extravagant outings at night clubs in big city centers. But the truth is most startups take hundred hour weeks to get going, and are often difficult to get paid from. Here are some of the key things to know when you’re thinking about working for one:

Success Won’t Happen Overnight: “The best-kept secret in the startup world is that there is no such thing as an overnight success,” wrote George Bradt, founder of executive onboarding group PrimeGenesis in an article for Forbes. “Success typically takes six to seven years — if you survive the first three.”

Entrepreneurship Comes From Within: Being your own boss may sound great, but you’ll have to wear many hats on your road to success. From learning to code to becoming a proper salesman – you’ll be on top of many things at once.

You Don’t Have to Do it All Yourself: Don’t be afraid to outsource some things that other companies will be doing better and cheaper in order to make your company’s product better.

Funding is Hard Work: Securing funding from any source is a true challenge, and entrepreneurs today are further into debt than any other generation.

Ultimately, starting your own business can be one of the most rewarding things you can do in life. But be prepared to face the risks, uncertainty, and high probability of failure when you jump in, especially at a young age. Make no mistake – there is no such things as overnight success: it takes years of extreme persistence and refining your business in order to achieve success; be prepared for the challenges ahead.

 

Read the full article in The Huffington Post here.

The Technicalities of a ‘Tech’ Startup

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With “tech startups” being everyone’s favorite buzzword – are we simply diluting the term? “Tech” startups like Uber and Airbnb (yes, they are still labeled as startups) are taking over the world,  but what about them makes them a “Tech” company? Of course, technology is a key part of how they do business, but that is true of any company. The truth lies at the core of the word “tech” and what people associate with it: research, innovation, and long term thinking, not necessarily just producing hardware or software. The chief economist at Moody Analytics, Mark Zandi, suggests that the label of “tech” sends the message “you want to work for me. You want to buy things from me at a higher price. You want to give me capital at a lower cost.”

Ultimately, is the classification of “tech” just marketing? Likely so. Alex Payne, an early Twitter engineer and tech investor, wrote in 2012: “Calling practically all growing contemporary businesses ‘technology companies’ is about as useful as calling the enterprises of the industrial era ‘factory companies.’ ” Would calling Uber a transportation startup or Airbnb a hospitality startup be as exciting? Likely not. What is sure is that “tech startups” are looking to revolutionize your way of life no matter what industry they’re doing it through.

Read the full article in the New York Times here.

 

3 Tips to Keep Your Start-Up Afloat

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Here at Voice of Reason, we are no strangers to start ups and start up culture. We see many of them rise and fall, and we know it takes much more than just hard work to really see success. Proper strategy and business will drive results within your company. Here are a few tips to ensure your business is headed in the right direction:

  • Know Your Target Market: Understand your customer and know what matters to them. Knowing what they want from your product is key to delivering what they need.
  • Have a Sound Business Model: Proper strategy for value creation and capture will ensure sustainability in your business. Dumping money into unnecessary products and services will hurt your bottom line.
  • Make Sound, Rational Decisions: It is important to be passionate and dedicated to your business, but ensure your decision making is based on hard data, and not your emotions. Too often charismatic leaders will bring their company to ruins because of ideas that should have been altered or even terminated completely.

Running your own business is one of the most challenging endeavors anyone could possibly take on, but with proper guidance, rationale, and hard work, your business will prosper. Know your customer, understand the value your business creates, and success will follow.

Click here to read the full article in Stanford Business

3 Misconceptions About the Internet That Are Costing You Money

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There is no way your business can avoid using the internet, and understanding its users is key to gearing your product towards your audience. Many business owners tend to keep with tradition and will disregard all the business they’re missing online as they don’t see their customers as online shoppers. But the truth is that there is much to be gained from being online, and there are plenty of shoppers who can’t wait to have your product conveniently delivered to them.  Here are a few misconceptions that many companies have while they’re on the internet:

  • I Can Only Reach Young People: Though it’s often tech savvy millennials who are credited for owning the internet, people of all ages are using the internet now more than ever. While young people were quicker to adopt the internet, this simply isn’t the case anymore. Over 58% of seniors are online today!
  • It’s a Boys Club: Internet usage has reached gender parity, with 85% of men and 84% of women using the internet.
  • My Product is Too High End to be Sold Online: People who are online are much more likely to have attended college. Also, though the gap may have narrowed, there are still far more people on the internet who earn over $75,000 than people who earn below $30,000. This means any product will have plenty of potential customers online!

If you ignore the vast amount of customers waiting for you online, they will simply go to your competitors instead. Don’t let preconceived notions of what you think about the Internet hinder your business. Take advantage of what’s offered online by having a Search Engine Optimized (SEO) website, engaging your customers on social media, and generating sales via an e commerce suite on your website.

See the full article with graphs here.

Unicorn – Magical, Mythical, and a Billion Dollars? Is There a Better Word?

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“Unicorn” is a term in Silicon Valley to describe a company whose net worth has exceeded one billion dollars. Meant to encompass the mystery and excitement of such an explosive venture, Aileen Lee of Cowboy Ventures developed the term to describe firms like Uber and Airbnb which at one time looked like long shots but are now valued in excess of a billion dollars. But with 117 so-called “Unicorns” in the past decade, those firms may actually not be as rare as perceived.

In a social sphere already filled with so much nonsensical jargon, is Silicon Valley simply making buzz words for fun? Probably. But for those who work with startups, interacting with a unicorn is rare enough to merit the title, as fewer than 1% of venture-backed firms end up with the label. So what do you think – is a company valued at billion dollars worth calling a unicorn or is Silicon Valley just clinging onto yet another buzzword?

Read the full article in the New York Times here.

The Key to Entrepreneurship: Patience and Discipline

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The New York Times’ Adam Bryant sat down with Jim Dolce, CEO of mobile security firm Lookout, to ask him about his experience in leadership, and what has led him to his success. As a seasoned entrepreneur, Dolce attributes his patience and company’s structure to his success. Here are a few key points from the interview:

  • On being patient in a fast paced environment: “It takes discipline … When you’re impatient, you attempt to get something done so that you can then, in serial fashion, go to the next thing. Instead, you have to go wide and work multiple issues at the same time and be patient on each of them.”
  • Accountability in Corporate Culture: “If we’re pushing down responsibility into the organization and empowering people to make decisions, then there has to be accountability. Otherwise, you’re just delivering the empowerment into a black hole.”
  • What He’s Learned From Being a Serial Entrepreneur: “When you’re working in a venture-funded start-up, time is of the essence. Investors get impatient. So the lesson there is that real breakthrough innovation is best achieved a step at a time. Technology is something that can be consumed in small bites. You don’t have to take a big bite all at once. “
  • What Advice Would You Give to Would-Be Entrepreneurs? “Make sure you know what you’re getting yourself into and know that this is going to be hard and there’s going to be a lot of heavy lifting and there’s going to be a lot of disappointment.”

Becoming an entrepreneur involves a lot of hard work, stress, and uncertainty. However, there are fewer things more rewarding in life than having your own business succeed. Through patience and realistic expectations, discipline and accountability, you too can find success with your firm.

For the full article on The New York Times click here.