Home Wealth Project

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A recent safari in the Serengeti was supposed to get my mind off of work. I figured that being thousands of miles away from the office, with no connectivity or even a phone, I would be able to completely detach myself from any thoughts relating to business.

Instead, as I was watching wildebeests, lion, elephants and zebras in their natural habitat, I couldn’t help but be struck by how much of their behavior reflects the competitive nature of an entrepreneurial business.

I know this probably sounds crazy, but hear me out.

Watching these animals fighting for survival, I was struck by how they were able to not just survive, but thrive by using many of the same tactics that are used by successful businesses. Whether it was watching lions stalking their prey, zebras and wildebeests co-existing to each other’s benefit, or even watching a vulture patiently waiting for a zebra to die, there were strategies in place that would work for almost any business in the world.

Let me give you a few examples:

1. Strong and Decisive Leadership Is Essential to Success

In virtually every species I observed, leadership was in the hands (hooves, paws?) of an alpha male or group of alpha males.

This kind of leadership resulted in efficient and orderly behaviors that benefited the group as a whole. When it was time to move to new territory, when it was time to rest, when it was time to eat were all determined by the alpha male. The rewards of leadership? The alpha was always the first to eat recently killed prey and, of course, the first to mate.

While I am not advocating this kind of autocratic leadership in business, I saw compelling evidence of how strong, decisive leadership can work to the benefit of the whole team. Forgive the pun, but there’s a reason why CEOs get the lion’s share of the profits.

2. When Opportunity Presents Itself, Jump In

I had a chance to see a zebra that had survived a lion attack, but just barely. As it bled from a wound on its left rear quarters, a vulture dropped in and crouched on the ground, barely 10 feet from the zebra. The vulture waited patiently for the zebra to die, just sitting and staring. I didn’t see the end of this drama, but I have the distinct feeling that the vulture did not go home hungry.

While I’m not saying that entrepreneurs should be vultures, they should be ready to pounce on opportunities when they arise. Keep your eyes open, stay on top of your competition, and jump right in when you see a weakness to exploit.

3. Don’t Be Too Proud to Take the Leftovers From the Big Boys

Hyenas are often portrayed as one of the lowest forms of animals. They tend to follow prides of lions (at a safe distance) and get their sustenance by waiting for the scraps left behind after the lions are finished with the animals they kill.

There are dozens of other scavengers in the wild who rely on the scraps left behind by the animals higher up on the food chain.

As an entrepreneur, being a “scavenger” isn’t necessarily a bad thing. This is especially true when you are a service provider. You are going to have much larger competitors in your market, and they are going to get the bulk of the work from the largest clients. It’s a fact of life.

That doesn’t mean you can’t take advantage of opportunities presented when the big boys are satisfied. Big competitors often don’t want to be bothered by smaller projects, and big clients always have smaller jobs they’ll give to smaller companies.

Entrepreneurs should see this as a chance to get your foot in the door. Take on the small project for the big client, do great work and you’ll find that the smaller projects will soon become bigger projects.

4. Find Ways to Survive in Difficult Times

Difficult times are built in to the life cycle on the Serengeti. Every year there is a dry season which tests the survival instincts of every species. Difficult times make for hard choices. Lions have been known to eat their own young. Elephants will cover many miles in a day just to find a drink of water. Weak members of the herd who can’t keep up are left behind to die.

No matter what business you are in, there will be difficult times. But even in the most difficult times, great entrepreneurs find ways to stay ahead. It may mean cutting down on overhead. It may mean being more creative with marketing and advertising budgets. It may just mean outworking the competition. Those who learn to adjust and adapt find ways to keep going.

Just as many animals fail to survive dry spells, so do many businesses. For the resident wildlife of the Serengeti, survival is a matter of life and death. Entrepreneurs who succeed in difficult times survive because of a “life and death” mentality.

5. Don’t Let Anything Get in Your Way

A common site on the Serengeti is acres of trees that are snapped in half or simply knocked over. Perplexed by this sight, I asked our Masai guide what the reason was.

“You’ll see soon enough,” was his cryptic response.

True to his word, he led us to a bend in the road where we could glimpse a herd of elephants coming in our direction. Because this was the tail end of the dry season, the elephants were in hot pursuit of water.

Nothing, I would soon see, would get in their way. Much larger than any elephants I had ever seen in a zoo, the males simply barreled through the trees, snapping them as if they were twigs. It was an awesome sight, but one that reminded me of the determination I had seen from many of the entrepreneurs I have known or worked with over the years. To get where you want to be, there are times you just have to push forward, having the confidence to knocking away obstacles as opposed to delicately sidestepping them.

6. Forge Mutually Beneficial Partnerships

One thing you learn about animals in the wild is that many species have natural partners. These partnerships (symbiotic relationships) work to the benefit of both species, playing a key role in their survival.

Any time you see a herd of zebras in the Serengeti, you are sure to find wildebeests close by. Why? The two groups work perfectly together. Both get their nutrition from grasses, but get it in very different ways. Zebras feed on tall grass, while the wildebeests eat short. The zebras clear away the tall grass for the wildebeests, which then munch on the shorter grass left behind.

Similarly, there are birds that get their sustenance by eating ticks found on larger, grazing animals. The larger animals are happy to be rid of the nuisance of the ticks, while the birds are happy for the meal.

As any entrepreneur knows, there will always be times when you need to rely on outside expertise to advance your business goals. While nature has chosen the “business partners” for the zebras, entrepreneurs have to be smart in choosing the service providers and consultants that work with their businesses. A great partner can be worth their weight in gold. A lousy one can damage or even destroy your business.

7. Cut the Deadwood

This may sound harsh, but nature can be harsh, and business can be harsh.

On the seventh morning of the safari, I had a chance to witness a large pond teeming with hippopotamus and another pond with just two hippos basking in a corner. Our Masai guide explained that the large pond was filled with a handful of alpha males and dozens of females, while the other pond was populated by two “loser males.”

The loser males had proved unable to protect the group and offered little in the way of getting food or procreating. As a result, they were forcibly banished.

Most every business, at one time or another, will have a few “losers” on staff. They don’t contribute, are usually unhappy, and are bad for the overall morale and performance of the company. While firing employees is one of the hardest things for an entrepreneur to do, failing to remove a bad employee is bad business.

Survival Skills

Survival in the Serengeti is a daily battle. Animals fight for sustenance, for power and for their very lives. In the wild, merely living to face another day is a victory.

In business, of course, survival has a very different meaning. But the tactics for surviving in the Serengeti can provide real lessons for those of us trying to keep our businesses not only afloat, but thriving.

Seven Entrepreneurial Lessons Learned on the Serengeti

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Military Vets Reporting for Entrepreneurial Duties

May 25th

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With Memorial Day on the horizon, now seems an appropriate time to report on a new study out from the SBA’s Office of Advocacy that examined entrepreneurship among military veterans. Factors Affecting Entrepreneurship among Veterans found that veterans are at least 45 percent more likely, and as much as 88 percent more likely, to be self-employed than civilians who have never served in the military.

“Entrepreneurship is a choice made by many of our men and women in uniform when they move into civilian life,” says Chief Counsel for Advocacy Winslow Sargeant in announcing the study. “Knowing more about the factors behind veterans’ self-employment offers opportunities to lay the groundwork for successful ventures.”

Veterans with four or fewer years of service were most likely to be self-employed, while career military (five or more years of service) were about 33 percent less likely to be self-employed than those who left after one enlistment. “This result suggests that higher rates of self-employment among veterans may be due to individual characteristics, rather than training, education or other qualities imparted by military service,” the report states.

An exception was found among career military retirees with 20 years or more of service. For this group, the longer they served in the military, the more likely they were to be self-employed. The study authors theorize this might be because they have larger pensions, improving their ability to pursue entrepreneurship. Among military retirees, officers are 55.6 percent more likely than enlisted personnel to be self-employed—probably due to differences in in education level.

Are you a military veteran who owns a business, or is thinking of starting one? There are more sources of support than ever before. Whether you need help starting or growing your company, here are some sites to get you started:

The IFA’s VetFran program makes buying a franchise easier to do by offering incentives and discounts for qualified military veterans from participating franchisors.

The Entrepreneurship Bootcamp for Veterans with Disabilities program provides training to post-9/11 disabled veterans via on online self-study course and a nine-day residency at a participating university.

The SBA’s Office of Veterans Business Development helps “veterans, service-disabled veterans, reserve component members, and their dependents or survivors” take full advantage of all the SBA’s programs.

The SBA’s Patriot Express loan program provides streamlined and expedited loan procedures for active duty military personnel and veterans.

The U.S. Department of Veterans’ Affairs’ VetBiz.gov portal has links, resources and information on starting a business, doing business with the government, getting certified as a veteran-owned business and more.

Military Vets Reporting for Entrepreneurial Duties

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Fresh List of Entrepreneurial Contests

Apr 17th

2 comments

This list of contests, competitions and awards for small businesses is brought to you every other week as a community service by Small Business Trends and Smallbiztechnology.com.

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Start-Up, Boot-Up
Enter by April 25, 2011

Here’s a chance to get your start-up out of the garage with over $75,000 in servers and development tools! Some of the greatest start-up ideas were born in a greasy garage or cramped basement. But Start-Up, Boot-Up™ will take one winner out of that environment and put them in a modern office with access to the servers and development tools to take their idea to the next level: reality. See website for full list of prizes and entry details.

AMD Visionary of the Year Awards
Enter by April 30, 2011

AMD has announced its first ever VISIONary of the Year Awards, honoring innovation in the three passion categories of Foodie, Photography and Entrepreneurship.

Eligible voters can vote and enter to win one-of-a-kind category prizes, including the ultimate culinary trip to New York City (Foodie category), a $4,000 technology shopping spree (Entrepreneurship category), a $4,000 camera (Photographer category), as well as AMD’s $10,000 grand prize.

Recognize an Administrative Professional
Nominate by April 26, 2011

Chances are you rely on one or more administrative professionals to conduct business. A great virtual assistant, administrative assistant or other administrative professional can be a big part of your success. Show your appreciation. Nominate someone deserving, in honor of Administrative Professionals’ Day (which is April 27). The person with the most nominations gets a $2,500 American Express Gift Card. Another 100 nominees will be randomly selected to win $25 Gift Cards.

2011 Small Business Awards
Enter by May 20, 2011

In its 6th year, The New York Enterprise Report Small Business Awards honors the achievements and accomplishments of the 500,000+ small businesses throughout the tri-state New York area. In addition to the Best of the Year Categories, the New York Enterprise Report Small Business Awards will honor nine small businesses for their accomplishments and best practices.

National Association for Moms in Business Grant Competition
Enter starting March 1st, Competition runs May 1 – June 15, 2011

Business grant competition via crowdfunding to give mom entrepreneurs a better chance at launching a new or current business project. All participants win a half-page feature in Moms In Business Magazine, publicity on peerbackers.com and momsinbusinessgrant.com, and a $2,000 publicity toolkit from PRNewswire. When the crowdfunding competition ends, all grant applicants who raised 80% or more of their funding goal will become semi-finalists. A team of mom executives and entrepreneurs will judge each application to determine the $10,000 Grand Prize Grant Package winner. Competitors must be a member of NAFMIB.

Ernst & Young’s Entrepreneurial Winning Women Competition
Enter by June 30, 2011

Ten winners will be paired with advisers and resources for growing their businesses and they’ll get to participate in a customized executive-leadership program. In addition, winners will receive an all-expenses paid trip to the Ernst & Young Strategic Growth Forum 2011 in Palm Springs, Calif., in November.

The contest is being run in collaboration with the Women Presidents’ Organization, Women’s Business Enterprise National Council, the Committee of 200, National Association of Women Business Owners and Babson College.

The Conway Center for Family Business Awards
Enter by August 4, 2011

The Conway Center for Family Business Awards Program was established in 1998 to recognize excellence in family business and has honored more than 115 Central Ohio family businesses during its first 11 years.

The program honors recipients in categories consistent with the success and longevity of a family business: leadership, planning, communication, support and community service. For more details, see the website.

To find more small business events, contests and awards, visit our Small Business Events Calendar. In addition, we also have a giveaways page; click to learn more about our small business giveaways section.

If you are putting on a small business contest, award or competition, and want to get the word out to the community, please submit it through our Small Business Event and Contests Form. (We do not charge a fee to be included in this listing. )

Please note: The descriptions provided here are for convenience only and are NOT the official rules. ALWAYS read official rules carefully at the site holding the competition, contest or award.

Fresh List of Entrepreneurial Contests

View full post on Small Business News, Tips, Advice – Small Business Trends

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Fresh List of Entrepreneurial Contests

Apr 17th

This list of contests, competitions and awards for small businesses is brought to you every other week as a community service by Small Business Trends and Smallbiztechnology.com.

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* * * * *

Start-Up, Boot-Up
Enter by April 25, 2011

AMD Visionary of the Year Awards
Enter by April 30, 2011

AMD has announced its first ever VISIONary of the Year Awards, honoring innovation in the three passion categories of Foodie, Photography and Entrepreneurship.

Recognize an Administrative Professional
Nominate by April 26, 2011

2011 Small Business Awards
Enter by May 20, 2011

National Association for Moms in Business Grant Competition
Enter starting March 1st, Competition runs May 1 – June 15, 2011

Ernst & Young’s Entrepreneurial Winning Women Competition
Enter by June 30, 2011

The Conway Center for Family Business Awards
Enter by August 4, 2011

Please note: The descriptions provided here are for convenience only and are NOT the official rules. ALWAYS read official rules carefully at the site holding the competition, contest or award.

Fresh List of Entrepreneurial Contests

View full post on Small Business News, Tips, Advice – Small Business Trends

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List of Entrepreneurial Contests and Awards

Feb 19th

This list of contests, competitions and awards for small businesses is brought to you every other week as a community service by Small Business Trends and Smallbiztechnology.com.

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* * * * *

31st Annual Small Business Awards
Enter by February 23, 2011

The Memphis Business Journal is now accepting nominations for the 31st Annual Small Business Awards. Past winners of Memphis Business Journal’s Small Business Awards have run the gamut from a hubcap retailer to a distributor of office and janitorial supplies.

Small Business Teaming Pilot Program
Apply by February 25, 2011

The Small Business Administration (SBA) offers information on small business loans, grants, bonds and other financial assistance, but does not make loans directly. Now, SBA is accepting grant-funding proposals from qualified and well-established national organizations that are interested in providing training, guidance, counseling, mentoring and procurement assistance for small businesses in “teaming arrangements.” Established by Congress under the Small Business Jobs Act of 2010, SBA’s new “Small Business Teaming Pilot” program allows “teams” in the form of a joint venture, or prime and subcontractor relationship.

SBA expects to make 10 to 20 grant awards in the range of $250,000 to $500,000, totaling up to $5 million for fiscal year 2011.

Albany-Colonie Chamber Small Business Awards
Enter by February 25, 2011

The Chamber is seeking nominations for small businesses with fewer than 100 employees in three categories:

Small Business of the Year Award: A small business that has exceeded even their own expectations, experiencing business growth and employment growth while employing sound business practices and community involvement
Ingenuity Award of Excellence: A cutting-edge company that has come up with a unique approach, product or service to business that has resulted in a strategic advantage in the marketplace
Micro-enterprise Award: A micro-enterprise with five or fewer employees and a demonstrated track record of success

New Year, New Office Contest
Enter by February 28, 2011

Contestants who own or work at a small business registered in the United States that has 50 employees or less can enter to win a new OFM office chair, desk and storage unit by submitting a photo of their current office and a brief description of why they deserve a makeover. To enter, contestants must email newyear@ofminc.comwith a photo in JPEG format of their current office space and a brief paragraph explaining why they deserve to win. Then they must follow OFM on Facebook. Qualifying photos will be posted on OFM’s Facebook page where contestants can encourage their friends, family and coworkers to “like” their photo.

NEC’s $25,000 Technology Makeover
Enter by February 28, 2011

NEC wants to see how badly your small-to-midsized business’s conference room needs a technology upgrade. Just fill out the registration form and submit a video of your business in need. NEC will choose five businesses as finalists, then the voting is up to the public. Public voting will begin in March 2011.

The winner will be announced April 4, 2011. And if you win, you get a choice of 25,000 in NEC products to outfit your office. Second-place through fifth-place winners will receive an E321, 32-inch NEC LCD for their offices!

2011 Small Business Online Marketing Contest
Enter by February 28, 2011

The Chicago Treasurer’s Office is partnering with Constant Contact to offer over $10,000 in cash and prizes to businesses submitting the top two winning entries for best promotional practices in two categories: Best Business Email Marketing and Best Overall Use of Social Media.

New England Innovation Awards
Enter by February 28, 2011

This award recognizes the intrinsic value that innovation possesses in driving the New England economy. SBANE utilizes its highly competitive Innovation awards program to showcase technology-driven enterprises that are potentially “game changers” in their marketplace niche. Application here.

Small Business of the Year Awards
Enter by March 1, 2011

The Naperville Area Chamber of Commerce Small Business of the Year Awards is the business community’s way of recognizing the outstanding work of its peers. The Awards process is of, for and by the Members. Members nominate one another, a blue ribbon panel of previous winners selects the best, and all nominees are congratulated and recognized at the celebration in May attended by over 350 peers. See website for entry criteria.

Washington Best Places to Work 2011
Enter by March 1, 2011

Nominations are now open for the Best Places to Work awards from Washington Business Journal. Each year the program honors 50 companies that are the most successful in building enjoyable and meaningful work environments for their employees.

Amazing Entrepreneur Business Plan Competition
Enter by March 10, 2011

The Amazing Entrepreneur Business Plan Competition sponsored by CEO Business Centers in partnership with the Gwinnett Chamber Economic Development and the Small Business Development Center is open to individuals who currently own and manage a new small business in Gwinnett County. The grand prize includes one free year in an office at a CEO Business Center site, a one-year Gwinnett Chamber membership, participation in the Chamber’s small business program, and thousands of dollars in in-kind professional services and accounting software. Finalists will receive certificates for services at CEO Business Centers.

To be considered, submit your business plan by March 10th. Visit the CEO Business Centers website for guidelines and information about where to send your application. The winner will be announced on April 29th at the Gwinnett Chamber’s Pinnacle Small Business Awards.

Uprinting’s Small Business Sweepstakes
Enter by March 13, 2011

“Like” Uprinting on Facebook for a chance to win a 16GB Apple iPad with WiFi to help you manage your business on the go and $1,000 worth of printing to market and promote your business.

Cartier Women’s Initiative Awards
Enter by March 15, 2011

The Cartier Women’s Initiative Awards is an international business plan competition that every year recognizes five female entrepreneurs, one for each region: Africa, Asia, Europe, Latin America and North America. Each Laureate receives coaching support for a full year, in addition to $20,000 in funding and an exclusive trophy designed by Cartier.

The business project to be considered for The Cartier Women’s Initiative Awards is as follows:
- An original for-profit business creation
- In the startup phase (at least one year old, no older than three)
- The main leadership position must be filled by a woman

BLOB – Best Locally Owned Business Awards
Enter by March 18, 2011

The 2011 BLOB Awards are hosted by Fresno Regional Independent Business Alliance (FRIBA), a group of local business owners who have joined together to educate the community about why it is important to support locally owned and independent businesses. See website for details and voting categories.

Small Business Excellence Awards
Enter by March 25, 2011

Each year the Chamber recognizes the accomplishments and innovation found in the small business segment of our business community at its Small Business Excellence Awards. This year’s awards will be presented on Tuesday, May 24, 2011, at the Millennium Hotel in downtown Cincinnati. Companies can apply for consideration in two of the following categories:

• Emerging Business of the Year – must be in business five years or less
• Minority Business of the Year – must be a certified MBE
• Nonprofit of the Year – must submit a 501(c) form
• 10 Under 10 – 10 businesses with fewer than 10 employees
• Small Business of the Year – 1 to 50 employees
• Small Business of the Year – 51 to 250 employees
• Community Involvement Award

Ninth Annual American Business Awards
Enter by March 31, 2011

The American Business Awards are the only all-encompassing awards program that honors outstanding performances in the American workplace. All organizations operating in the U.S. are eligible to submit nominations – public and private, for-profit and nonprofit, large and small. The 2011 awards will honor work since the beginning of 2010, and the awards will be announced on June 20 at the Marriott Marquis Hotel in New York City.

Nominations are accepted in various categories including management awards, public relations awards, marketing awards, new product awards, HR awards, IT awards, website awards and more. New categories in 2011 include Executive of the Year – Health Products & Services and Best New Product or Service of the Year – Health Products & Services, as well as more than 40 new Marketing Campaign of the Year categories.

R U Gen Z (Generation Zuckerberg) Video Contest
Enter by April 1, 2011

Internet entrepreneur Marc Ostrofsky has launched the R U Gen Z (Generation Zuckerberg) video contest offering over $10,000 in prizes. The R U Gen Z video contest encourages students and struggling job seekers who have the drive and desire to be their own boss to embrace their Zuckerberg-like passion for entrepreneurship. In these videos, students are invited to express frustrations with today’s economy and tout the benefits of being one’s own boss.

Videos can be submitted online immediately at the contest website and will be judged by a group of panelists made up of students from the University of Houston’s Wolff Center for Entrepreneurship. The first-place winner will receive $5,000; $2,500 will go to the second-place winner, and numerous other $1,000 prizes will be distributed.

Rhode Island Business Plan Competition 2011
Enter by April 4, 2011

The Rhode Island Business Plan Competition, open to everyone, seeks to promote entrepreneurship and development of startup and early stage companies. Winners and finalists in the 2010 Competition shared more than $195,000 in prizes.

Small Business Advocate of the Year Award
Enter by April 15, 2011

Each year, the CalChamber recognizes several small business owners who have done an exceptional job with their local, state and national advocacy efforts on behalf of small businesses.

The CalChamber will recognize the award winners at its Business Summit on June 1 in Sacramento. The nomination form is available on the CalChamber website or may be requested from the Local Chamber Department at (916) 444-6670.

Please note: The descriptions provided here are for convenience only and are NOT the official rules. ALWAYS read official rules carefully at the site holding the competition, contest or award.

List of Entrepreneurial Contests and Awards

View full post on Small Business News, Tips, Advice – Small Business Trends

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The 4-Hour Entrepreneurial Body

Jan 4th

Posted by Home Wealth Project in Marketing Tips

The 4-Hour Entrepreneurial Body

This content from: Duct Tape Marketing

Marketing podcast with Tim Ferriss (Click to play or right click and “Save As” to download – Subscribe now via iTunes or subscribe via other RSS device (Google Listen)

This time of year the Internet, media and bookstores are filled with books, stories and advice on losing weight and getting in shape so the timing of this week’s Duct Tape Marketing Podcast should be right in sync.

My guest, Tim Ferriss, is the author of the wildly popular 4-Hour Workweek and the newly released 4-Hour Body: An Uncommon Guide to Rapid Fat-Loss, Incredible Sex, and Becoming Superhuman.

Some might wonder, beyond the fact that Tim’s books are two of the hottest selling in recent years, why I would do a show on weight and conditioning. Owning a business is not for wimps. It’s physically and mentally demanding and I’ve often thrown in posts about the relationship of exercise, eating right, getting enough sleep and staying on top of your game mentally as these are so important if you want to run and grow your business in the long run. And, if you’ve put 50 astern, as I have, it becomes a competitive must.

The book starts with a quote from Virgin’s Richard Branson – when asked what business owners could to to become more productive he stated plainly – exercise.

It should come as no surprise that Tim’s latest book is also stirring a bit controversy. Tim’s methods are often considered odd and his tone can be a seen as cocky, but there’s little denying that he’s built a following that verges on worship and his devotees are singing his praises for the results they’ve achieved using his teachings.

This book, while seemingly an odd follow-up to the 4-Hour Workweek is actually a return to Tim’s roots in the exercise and nutrition industry and probably the book Tim has always wanted to write. (Ironically, the success of the 4-Hour Workweek made it possible.) You can find additional book related content at the 4-Hour Body site.

Since the age of 18 Ferriss has recorded every workout and meal and turned himself into a human guinea pig running test after test and challenging much of the conventional nutrition wisdom. He outlines much of what he has accomplished and presents many quick fix solutions and backs up his research with academic journals and sources.

Like the 4-Hour Workweek some will balk at much of the advice that feels counterintuitive – he actually seems to suggest losing weight by eating more and exercising less in one chapter – but I think you’ve got to look at the big idea here and that is the idea of taking your health, diet and exercise into your own hands and start playing with what works for you and you only.

Self-testing and tracking your diet and exercise using online tools such as Daily Burn and an iPhone is how you find the right balance for optimal performance whether you’re trying to run an actual marathon or the one found inside the walls of the typical small business.

I like this book, but understand you’re free to take parts of it with a grain of salt. The book presents new ideas and challenges old ones and brings the idea of “self-hacking” or open source wellness to the forefront once again. Given people’s fascination with diet related books my guess is this book will sell more than the 4-Hour Workweek.

You can listen to the show by subscribing the feed in iTunes or a variety of other free services such as Google Listen (Use this RSS feed) or you can buy the Duct Tape Marketing iPhone app. (iTunes link – Cost is $2.99) or Android app and listen to the show as well as about ten past shows on your phone.

View full post on Small Business Marketing Blog from Duct Tape Marketing

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4 Key Lessons in Entrepreneurial Finance

Dec 31st

As part of my entrepreneurship classes, I teach my students to raise capital. When people find this out, they often ask one question: What’s the most important thing I need to know about raising money? For entrepreneurs, four lessons are especially important.

1. For most entrepreneurs, seeking outside financing isn’t worth your time. Only a small fraction of new businesses obtain money from someone who is not a founder of the business. Therefore, unless your business has a lot of hard assets that can be used as collateral for a loan, or one of a handful of startups that has the super-high growth potential and exit plan to attract accredited angel investors and venture capitalists, seeking outside money is unlikely to be fruitful. You are better off developing a less capital-intensive business model and financing the startup yourself than you are spending your time trying to raise money.

2. Your personal credit and personal collateral matter a great deal when financing a startup. Data from the Federal Reserve’s Survey of Small Business Finances shows that the owners of one quarter of corporations less than five years old, and nearly half of sole proprietorships that age, personally guarantee the debts of their businesses. Given that only a minority of businesses borrows externally at all, this means that most of the capital that entrepreneurs borrow is personally borrowed or personally guaranteed.

With personal debt, the lender’s decision depends less on the potential of the business than on the entrepreneur’s credit and collateral. If you don’t have great personal credit and you have few assets to pledge against a loan, you will have a hard time borrowing to finance your new business, no matter how great your business idea is. So if you want to start a business, be careful about your personal credit.

3. You are more likely to get a loan than an equity investment from an outsider. Because venture capital and angel investments are sexier than bank loans and trade credit, the former gets the lion’s share of attention in books and articles about entrepreneurial finance. However, most of the companies that get outside financing obtain debt, not equity.

Only a tiny percentage of startups are financed by selling equity to accredited angels or venture capitalists. The statistics show that around 1 percent of companies get their financing from these two sources combined. Other informal investors – like friends, family and unaccredited angels – add a few percentage points to the share of businesses that get outside equity, but research shows that these sources are actually more likely to lend money than to take an equity stake. Therefore, unless your business is the type that angels and venture capitalists look for, you shouldn’t waste your time seeking equity investors.

4. Tapping trade creditors is where your odds of obtaining financing for the business itself are highest. According to analysis of the Federal Reserve’s Survey of Small Business Finance, next to having a checking account, trade credit is the most common financial tool used by small businesses. Because trade credit is offered by suppliers to help you buy their products, even the newest businesses can obtain it.

In short, unless you have a rare, super-high-growth business with plans to exit through an initial public offering or acquisition within five to seven years, your best bet is to minimize your capital needs and finance your start-up with your own money, money that you borrow personally, and trade credit.

Editor’s Note: This article was previously published at OPENForum.com under the title: “4 Important Lessons About Entrepreneurial Finance.” It is republished here with permission.

4 Key Lessons in Entrepreneurial Finance

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Entrepreneurial Finance in Recovery

Dec 28th

The Great Recession officially ended in June 2009–at least, so say the economists at the National Bureau of Economic Research. That means it’s time for me to start writing about entrepreneurial finance during the economic recovery. What has happened to small business finance since the end of the recession?

For the most part, entrepreneurial finance looks the same or slightly better now than at the end of the recession, but worse than before the downturn began. Take loan availability, for example. The National Federation of Independent Business’s (NFIB) index of loan availability was at the same level in September 2010 as it was in June 2009. However, the September figure was seven points below where it was in November 2007, the month before the recession began.

The patterns in venture capital look similar. According to the National Venture Capital Association, VCs increased investment from $4.3 billion in 707 deals in Q2 of 2009 to $4.8 billion in 780 deals in Q3 of 2010. Nevertheless, this level of activity remains below the $7.8 billion invested in 1016 deals in Q3 of 2007.

Valuations of VC-financed start-ups show this pattern as well. Data collected by Cooley Goddard, a law firm specializing in venture finance, show that the percentage of venture capital-backed companies experiencing up investment rounds rose from 30 percent in the second three months of 2009 to 58 percent from January through March 2010. However, in the third quarter of 2007, 69 percent of businesses that received additional VC investments experienced up rounds.

The number of venture capital-backed companies exiting has improved since the recession ended, increasing from 83 in second quarter of 2009 to 118 in the third quarter of 2010. However, the number of exits in the most recent quarter remains below the 134 occurring in Q3 of 2007.

Since the recovery began, trade credit has rebounded the most of all small business finance measures. The Association of Credit Manager’s index of trade credit extended increased from 46.1 in June 2009 to 58.7 in September 2010, putting it just slightly below its level of 60.9 in November 2007.

On the other hand, some measures of entrepreneurial finance are actually worse now than at the end of the recession. For instance, in September 2010, only 27 percent of the small business owners answering the NFIB’s monthly survey reported that their borrowing needs were satisfied, 3 percentage points worse than in the last month of the recession. Similarly, the percentage of respondents to the Discover Small Business Watch experiencing cash flow problems in their businesses increased from 42 to 46 percent from June 2009 to October 2010.

Data from Angelsoft, the leading provider of angel investment tracking software shows continuing declines in the valuations of angel-group backed companies. In the first three months of 2010, the median valuation of an angel group backed company was $2.2 million, down from $2.4 million in the second three months of 2009, which, in turn, was below the $2.8 million recorded in the third quarter of 2007.

In sum, the story of entrepreneurial finance in the recovery is straightforward. While some measures have gotten better since the end of the recession, improvement has been limited, leaving most indicators well below where they were before the recession began.

Editor’s Note: This article was previously published at OPENForum.com under the title: “Entrepreneurial Finance in the Recovery.” It is republished here with permission.

Entrepreneurial Finance in Recovery

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Small Business News: Entrepreneurial Outlook

Dec 14th

Having an entrepreneurial outlook means looking at the world a bit differently. Everyday policy, trends even philanthropy take on a whole new meaning. But clearly an entrepreneurial outlook also reveals a different set of priorities as well. Here is a sneak peak at some of the most important of those priorities today. Have something to add? Leave a comment below.

Policy

Healthcare reform derailed? A change in U.S. healthcare that has concerned many small business advocate groups may be undone if a federal judge’s ruling that a major part of the legislation is unconstitutional. A federal judge says “Neither the Supreme Court nor any federal circuit court of appeals has extended Commerce Clause power to compel an individual to involuntarily enter the stream of commerce by purchasing a commodity in the private market.” LATimes.com

U.S. tax breaks on the way. A bill that will prevent tax increases beginning at the end of this year by extending tax cuts left over from U.S. President George W. Bush’s administration has passed the U.S. Senate. The move is considered important for small business as well by not only lowering taxes on those businesses but by giving potential customers more spending power. Yahoo! News

Trends

Can’t find a job? Why not make your own? A growing number of young people faced with a daunting job market and apparent lack of career prospects are doing the next best thing. Creating jobs by creating companies may be the new trend when coming out of college in an economy where much of the new employment may be generated on the entrepreneurial level. NYTimes.com

It may be time to start a business but not to buy or sell one. As might be expected, the rough economy has taken its toll on the numbers of businesses changing hands. That’s partly because sellers are waiting for improvement in their valuation or performance or both in an effort to get a sweeter deal at some point in the future. Of course, this is no time to get bummed out about this sort of thing. Start a business now or strengthen your existing business and you’ll be ready when the market comes around. You’re The Boss

Management

Keep evaluating and rewarding good performance.Hard economic times are NOT an excuse to stop looking for ways to reward your best employees. Nor is it a good reason to stop doing the evaluations upon which you make the decision of who you reward. Your employees can be your greatest asset. Fail to invest in them and you may see economic troubles descend upon you as well. LATimes.com

Self-development

How entrepreneurs can stay motivated.Nigerian blogger Samuel Ayodele has some inspiring suggestions for those with an entrepreneurial spirit. How do you get motivated and stay motivated to make your dreams come true. How do you get motivated and stay motivated to change the world. Mega Biz Flakes

Social Entrepreneurship

What social entrepreneurship holds for us all.Once thought of as a purely an altruistic venture outside the realm of true business, social entrepreneurship may be growing up and coming into its own. For a look at past, present and future, one post will bring you up to speed. From Ambition to Action

Startup

Can your business plan withstand the null hypothesis?Instead of spending all your time trying to prove that your great business idea will work, Dr. Jeff Cornwall would like to suggest you spend a little while trying to prove that it won’t. You may just discover some weaknesses in your plan that could end up costing money down the road. Or you could discover you really have no business at all. The Entrepreneurial Mind

Financial

The difference between ownership and employment. Do you know the difference between ownership and employment in your business? You should. How much would it cost to hire someone to do what you do? Is that the amount you’re making? Are you taking home something extra as the owner? Answer these questions and become a better entrepreneur. CFO Wise

Tech Review

A new way to collaborate has a very funny name.Dan Kenitz reviews DimDim, a software creating “easy, open and affordable web conferencing and webinars.” Check out Dan’s thoughts and an overview of the system’s general features. Online collaboration has become an important part of small business and entrepreneurship and securing the proper tools is critical for success. clickfie