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21 Posts authored by: Steve Strauss

It’s amazing what a fresh set of eyes can do.woman-shopping-1727684.jpg

 

One of the dangers of owning a business and being the boss is that one can tend to get myopic; you see what you see and know what you know and getting a fresh, outside perspective can sometimes be challenging.

 

That came to light for me recently while coaching some MBA students. Their big idea? Creating a platform that would be a better way for businesses to offer free demonstrations in their stores.

 

“What problem does that solve,” I asked.

 

“It gets people into stores!” they replied.

 

Good point.

 

And that got me to thinking about the state of business in this new decade. If you are going to be starting a business, which makes more sense – an online store or a brick-and mortar store? Well, let’s consider the pros and cons of each:

 

Brick-and-mortar pros and cons

 

We hear a lot about the so-called “death of retail.” My take is that there is of course some truth there, if exaggerated. Yes, big box stores like Sears and J. Crew are in deep trouble, but, that said, small business is as healthy as ever.

 

This is especially true in this robust economy, and that too is no small thing. People have money, and are spending it, and they are still spending it in physical stores, despite what the naysayers say.

 

Consider the bookstore. If ever there was a type of business that seemed destined for the scrapheap of history, it was the physical bookstore. Such an antiquated, cute notion – wandering and browsing through a shop with a limited number of titles and retail prices.

 

Not long ago, the headlines screamed that huge competitors like Barnes & Noble were going to put them out of business. Didn’t happen. Then it was surely going to be Amazon who was going to swallow them all up.

 

That didn’t happen either.

 

According to the New York Times, “The American Booksellers Association, a trade group for independent bookstores, has grown to 1,887 members with 2,524 locations as of May 15 [2019], the highest participation since at least 2009.”

 

So that’s the good news. People still like going into stores, and if the store is well run and competitive on price, it can thrive.

 

The downside is that it is considerably more expensive to own and run a brick-and-mortar store. Labor, rent, insurance, etc. are all overhead costs not matched by their online equivalent.

 

E-Commerce pros and cons

 

Despite the above, we all know that the trend in shopping is towards e-commerce. Amazon isn’t Amazon for nothing, and Alphabet, the parent company of Google, just topped a trillion dollars in valuation because of all those little ads pointing people to online stores.

 

The pros are obvious: People love to shop online and are only going to do more of it. The cost of entry is significantly lower than getting into a physical store. And, for example, with something called “drop shipping,” you do not even have to carry inventory to stock your online shelves.

 

But the good news is also the bad news. Yes, there are a lot of people shopping online, and yes that is where things are headed. But that also means that there is a lot of competition.  Getting heard above the din is no easy feat online. Getting people to your little online store, and then getting them to buy from you and not someone else is challenging.

 

So, what’s the best choice? How about both? Open a store and sell online. Heck, if Jeff Bezos is now selling both online and off (Amazon Go, Whole Foods, Amazon Bookstores), it might not be such a bad idea.

 

Steven D. Strauss is one of the world's leading experts on small business and is a lawyer, writer, and speaker. The senior small business columnist for USA Today, his Ask an Expert Steve+Strauss+Headshot+SBC.pngcolumn is one of the most highly-syndicated business columns in the country. He is the best-selling author of 17 books, including his latest, The Small Business Bible, now out in a completely updated third edition. You can also listen to his weekly podcast, Small Business SuccessSteven D. Strauss.

 

Web: www.theselfemployed.com or Twitter: @SteveStrauss

You can read more articles from Steve Strauss by clicking here

 

Bank of America, N.A. engages with Steve Strauss to provide materials for informational purposes only, and is not responsible for, and does not guarantee or endorse any of the third-party products or services mentioned.  All third-party logos and company names mentioned herein are the property of their respective owners and are used under license from Mari Smith.

 

Bank of America, N.A. Member FDIC. ©2017 Bank of America Corporation

It is difficult to comprehend just how far and fast WeWork went from nothing to something and then from something to nothing.chuttersnap-cGXdjyP6-NU-unsplash.jpg

 

But let’s try, because in WeWork’s epic rise and fall, there is a vital lesson for small business people. Consider:

 

  • WeWork was founded in 2010 by Adam Neumann and Miguel McKelvey. Their big idea was this: Because office space in New York is so expensive and finding, furnishing, and maintaining a nice office was cost prohibitive, WeWork would buy or rent offices, make them cool, and then lease shared office space to tenants. The idea took off.
  • By 2014, WeWork was considered “the fastest-growing lessee of new office space in New York” and was on track to become “the fastest-growing lessee of new space in America.”
  • By January 2015, WeWork had 51 coworking locations across the U.S. and Europe - twice as many as in 2014. WeWork was named one of the “most innovative companies” of 2015 by Fast Company magazine.
  • In 2016, the company raised $430 million in investment capital and had a valuation of $10 billion.
  • In 2018, SoftBank invested $3 billion in WeWork, and another $2 billion a year later.
  • In January 2019, WeWork was valued at $47 billion. Its IPO prospectus said, in part, “Our mission is to elevate the world's consciousness.”

 

And that is when the wheels began to fall off.

 

So flush with money was WeWork that it started spending in extravagant, crazy ways. How crazy? Let me share a personal story:

 

Two years ago, I was asked by WeWork to attend its Creator Awards in New York. It was a wild night; unlike anything I had ever seen, and emblematic of everything that was to go wrong.

 

WeWork’s CEO Adam Neuman was supposed to award one winner $1 million, that, in and of itself was wildly extravagant. But so overwhelmed was he by the 13 finalists, that he spontaneously decided to award a second winner another $1 million, and then he decided to give each runner up about $250,000 each.

 

The $1 million night became a $4 million night, and it happened in 45 seconds.

 

Multiply that by private jets, excessive growth (We Work bought the storied Lord & Taylor building on 5th avenue for its headquarters for $850 million) and crazy policies (Neumann sold the “We” trademark to his own company for $5.9 million) and you can see why its plan for an IPO in 2019 started to go up in smoke. In a few short months, WeWork’s profligate spending came under intense scrutiny and before long:

 

  • Its $47 billion valuation fell to $8 billion in nine months
  • Neumann resigned as CEO
  • The IPO was shelved
  • SoftBank took control of the company

 

What Went Wrong (Besides Everything)?

 

First, obviously, their spending was out of control, but it was more than that. Clearly, Neumann never graduated from the entrepreneur stage to the businessperson/CEO stage.

 

Entrepreneurs like Neumann are necessary. Their vision, passion, and energy are needed to get a company launched. But that is not enough. Vision doesn’t pay the bills. Before long, if you want to last, you need to learn and master the more mundane parts of business – law and taxes, insurance and finances, hiring and firing, and so on. WeWork never did.

 

Second, WeWork grew too big, too fast. That too is a danger to be avoided. Scaling a business is not easy. To go from one person (where most business start) to 2 to 10 to 100 and beyond requires planning, infrastructure, training, policies, financing and much more. Most of all, it requires time. Setting the foundation in place properly is the best way to create lasting success. Moving too fast allows one loose Jenga piece to topple the whole structure.

 

Third, hype and hyperbole do not a business make. Oh sure, we all like buzz and attention, and that can help grow a business but attention, if not managed, is just so much hot air.

 

Example: I once helped a pizza joint get the attention of a local food critic. One Friday, the critic wrote a glowing review of the restaurant. That weekend, the place was slammed, but because they weren’t ready, they didn’t have enough wait staff, ran out of dough, and pissed off a lot of customers.

 

Buzz can be a buzzkill if not managed properly.

 

The moral? Grow fast and furious, get high on your own success, get into debt you can’t manage, over promise and under deliver, and you will go from we work to no work in a hurry.

 

About Steve Strauss

 

Steven D. Strauss is one of the world's leading experts on small business and is a lawyer, writer, and speaker. The senior small business columnist for USA Today, his Ask an Expert Steve+Strauss+Headshot+SBC.pngcolumn is one of the most highly-syndicated business columns in the country. He is the best-selling author of 17 books, including his latest, The Small Business Bible, now out in a completely updated third edition. You can also listen to his weekly podcast, Small Business SuccessSteven D. Strauss.

 

Web: www.theselfemployed.com or Twitter: @SteveStrauss

You can read more articles from Steve Strauss by clicking here

 

Bank of America, N.A. engages with Steve Strauss to provide informational materials for your discussion or review purposes only. Steve Strauss is a registered trademark, used pursuant to license. The third parties within articles are used under license from Steve Strauss. Consult your financial, legal and accounting advisors, as neither Bank of America, its affiliates, nor their employees provide legal, accounting and tax advice.

 

Bank of America, N.A. Member FDIC. ©2017 Bank of America Corporation

A recession within the coming year seems more than likely. While the economy is great today, more than a few economists believe a 2020 recession is quite possible. Recession Businesses.jpg

 

And that begs these questions:

 

1. What if you are looking to start a business today?

 

2. Are there businesses that you could start – or branch into – that are more likely than others to weather the storm?

 

Indeed, there are. Here are the eight industries that thrive under recession conditions:

 

1. Candy: Yes, you heard right. Candy and recessions go hand in hand. Both Three Musketeers and Snickers were invented during the 1930’s depression, and in the U.S., candy sales went up by billions of dollars during the 2009 recession. When people can’t afford larger luxuries, they turn to the smallest - and sweetest - kinds. And that means a retail business can launch, or grow, using candy as a lure.

 

2. Repairs: During a recession, because buying new is not always a possibility, repairing items already owned become far more popular. For instance, while car sales historically go down during a recession, automotive repairs go up. The same can be said for computers, furniture, and the like. For those who are handy, this can be a boon.

 

3. Childcare: Some of the best industries during a recession are the ones people can’t live without. When people have children and jobs, they are more than likely to need childcare, especially as they tend to take whatever work (and hours) they can get. This could mean daycare, or an after-school program, or even babysitting – all of these industries remain crucial during times of recession.

 

4. Niche food stores: In a recession, you might expect the most expensive grocery stores would go belly-up. But this wasn’t the case in 2008. In fact, specialty food stores experienced growth throughout the recession. When someone really loves something (like candy!) buying it during a recession becomes a refuge. As such, specially made, hard to come by, or totally niche items can work.

 

5. Freelance and temp work: Among the first casualties of a recession is the full-time employee. Many businesses switch to hiring freelance and temp workers to fill the gaps. As such, one of the best industries during recessionary periods is the freelance market, where independent contractors provide businesses the ability to keep going, as they are more affordable than their full-time counterparts. The time to start your side-gig is now.

 

6. Static businesses: The boring, the mundane, or downright dirty. Some may call them these names, but others call them recession-proof. Businesses like tax preparation, junk hauling, senior care, accountants, funeral homes, and so on provide services that will always be necessary, even during an economic downturn. People will always pay taxes, throw away garbage, and die. While these industries aren’t sexy, they provide a sense of stability in unstable times.

 

7. Health and fitness: In 2008, many industries came to a screeching halt. But not in this sector. Businesses that helped people remain healthy and fit maintained steady growth during that era. This was particularly true for yoga and Pilates studios.

 

8. “Sin” industries: When the going gets tough, people crave vices. During downtimes, sales of alcohol boom, and casinos do well. It makes sense, no? When people are feeling down, they often turn to something to help ease their discomfort. Any of these ‘sin’ industries tend to have steady growth during a recession.

 

Although this is not a comprehensive list by any means, it can give you some clues as to what is and isn’t recession-proof.

 

About Steve Strauss

 

Steven D. Strauss is one of the world's leading experts on small business and is a lawyer, writer, and speaker. The senior small business columnist for USA Today, his Ask an Expert Steve+Strauss+Headshot+SBC.pngcolumn is one of the most highly-syndicated business columns in the country. He is the best-selling author of 17 books, including his latest, The Small Business Bible, now out in a completely updated third edition. You can also listen to his weekly podcast, Small Business SuccessSteven D. Strauss.

 

Web: www.theselfemployed.com or Twitter: @SteveStrauss

You can read more articles from Steve Strauss by clicking here

 

Bank of America, N.A. engages with Steve Strauss to provide informational materials for your discussion or review purposes only. Steve Strauss is a registered trademark, used pursuant to license. The third parties within articles are used under license from Steve Strauss. Consult your financial, legal and accounting advisors, as neither Bank of America, its affiliates, nor their employees provide legal, accounting and tax advice.

 

Bank of America, N.A. Member FDIC. ©2017 Bank of America Corporation

Want to grow your social media following? Don’t do what I did.

 

Although I have been on Twitter for over a decade, I was still late to the party. Like many people, I didn’t really understand social media and I especially didn’t get Twitter. So, while I was early and fortunate enough to capture my name as my Twitter handle, I spent very little time back then tweeting, following, getting followers and the like.

background-blur-chat-433617.jpg

 

Dumb.

 

Some of my contemporaries were not so short-sighted and they jumped on the Twitter bandwagon with zeal. And it paid off. Anyone back then who had even a little buzz or presence was able to amass a huge Twitter following in fairly short order (in the hundreds of thousands.) And, frankly, not a few people got a large following even though they didn’t really have the chops or expertise to deserve it, but they were at the right place at the right time.

 

Once I realized that social media was not just some passing fad, I started doing the hard work of growing my social profile and presence. I did everything I was supposed to do (until I didn’t, more on that in a moment):

 

    • I created good looking social media homepages
    • I shared relevant content
    • I engaged with my followers

 

That said, I was frustrated that my following was not bigger or growing faster. So, I decided to do something about it – I bought some followers.

 

Dumb x 2.

 

I found a service and paid $99 for 1,000 Twitter followers. What a mistake. Little did I know but these were not real followers. My account was flooded with bots and fake accounts that took almost another year to clean up.

 

The lesson: There is a right way, and a wrong way, to grow your social media profile. Here’s what to do:

 

Post quality content: This is the most important rule. What you want to do is to create a feed that offers your followers content they can use. Whether you create the content or share someone else’s matters little. The important thing is to post content that people will like – that’s how you get people to follow you.

 

Mix it up: Post blogs, videos, podcasts, etc. Mix it up. Infographics and visuals especially are liked and shared, another important way to get followers: When others share your content, it is the ultimate digital word of mouth.

 

By the same token, it probably behooves you to mix up your tone as well. Sharing funny or otherwise emotional content works. Guy Kawasaki is great at this.


Use the 80-20 rule: The 80-20 rule says that 80 percent of your profit comes from 20 percent of your customers or products. The same idea should be in play here – 80 percent  of your social posting should be about your followers customers or other interests, while only 20 percent, at most, should be about you or your business.

 

Engage: People generally want to interact with you and/or your brand. Thus, the more you engage by chatting with them, re-posting their content, retweeting their tweets, and otherwise interacting with them, the more your organic following will grow.

 

Include social icons on you site, email, etc.: Include the icons of your social handles on your website, email, business card, etc. This allows those who come in contact with you to like and follow you.

 

Follow followers: This is one of my favorite tricks. There is a “Twittiquette” that says if someone follows you, you should follow them back. Now, this is by no means a hard and fast rule, but it is generally something that is followed.

 

As such, if you look at the followers of the leaders of your industry and follow them, they just may follow you back. Similarly, look for hashtags that are often used in your business and follow those people who use those hashtags. They too may follow you back.

 

Buy paid advertising: This is completely different from the mistake I made. On Facebook, you can buy Facebook ads that are designed to increase your Likes, and it works.

 

The great news is that, while all these efforts take time, they don’t cost much (even the ads are affordable.) As such, growing your social following can be one of the cheapest, easiest ways to find and get more customers.

 

Even better, they are real, as opposed to fake bots.

 

Follow @SteveStrauss and all the rest of our Small Business Community contributors on Twitter!

 

Read next:

 

About Steve Strauss

 

Steve Strauss Headshot New.pngSteven D. Strauss is one of the world's leading experts on small business and is a lawyer, writer, and speaker. The senior small business columnist for USA Today, his Ask an Expert column is one of the most highly-syndicated business columns in the country. He is the best-selling author of 17 books, including his latest, The Small Business Bible, now out in a completely updated third edition. You can also listen to his weekly podcast, Small Business SuccessSteven D. Strauss

 

Web: www.theselfemployed.com or Twitter: @SteveStrauss

You can read more articles from Steve Strauss by clicking here

 

Bank of America, N.A. engages with Steve Strauss to provide informational materials for your discussion or review purposes only. Steve Strauss is a registered trademark, used pursuant to license. The third parties within articles are used under license from Steve Strauss. Consult your financial, legal and accounting advisors, as neither Bank of America, its affiliates, nor their employees provide legal, accounting and tax advice. Bank of America, N.A. Member FDIC.  ©2019 Bank of America Corporation

In 1996, Larry Page and Sergey Brin, students at Stanford, came up with an idea for a better search engine. Page and Brin’s insight was that a webpage was likely more valuable if a lot of other webpages linked to it. Accordingly, their new search engine – Google.Stanford.edu– ranked highly-linked pages higher, thus offering better search results.

achievement-adult-agreement-1243521.jpg

The two young founders were soon asked to give a demonstration of their work to legendary Silicon Valley investor Andy Bechtolsheim. He was so impressed that he wrote out a check for $100,000 on the spot, to “Google, Inc.”

 

The problem was that the two young founders were unable to deposit the check because they had forgotten to incorporate their business, so the check sat in Sergei’s desk drawer for two weeks until they completed that step.

 

I’m sure you’re thinking that Google is a unique story, but I am here to tell you it is not; it’s almost an ordinary one. It’s not unusual for a startup to get a sudden influx of cash from inverstors and they must be prepared to process that investment when they do.

 

This all then begs the question: What exactly makes a business a good investment to a so-called “angel investor?” If you’re looking for investors, here are some of the top things they look for in a business:

 

1. Opportunity: Bechtolsheim saw an opportunity in Google unlike any other, and while that is rare, what Bechtolsheim was seeking was not: namely, an opportunity to invest his money and make a good return.

 

Do you ever watch Shark Tank? Same thing.

 

Presenting your business as a great opportunity is vital. Investors need to see that by helping you, they can help themselves, and that comes from not wanting to miss a golden opportunity. Your job then, as the entrepreneur, is to show them that your idea/business is that opportunityand offers something unique to the marketplace.

 

2. The competition: Google, at the time of its initial investment, had competitors in an emerging field, but none that dominated the market. Remember AltaVista, Ask Jeeves or Lycos? Today, in most industries, there is a lot of competition. As such, you need to show investors that you not only know who the competitors are, but that you are better than them.

 

3. The financials: Again, let’s think about Shark Tank. Kevin O’Leary, Mr. Wonderful himself, is all about one thing: Money. And the money is based on financials. Does the business show enough promise and profit that the investor will see a substantial return in a short amount of time (a few years at most)?

 

The financials will tell you.

 

Knowing your numbers is critical in showing investors you mean business. Investors want to know what you’re doing with their money, and why. Having a business plan with realistic financials is critical.

 

4. The team: Bechtolsheim believed in Page and Brin, and indeed, few things impress investors more than a great team. Often that is what the investor is really investing in, the team. As such, the quality of your team is vital in selling your company’s worth to an investor. A great team has credentials, experience, smarts, contacts, charisma and mad skills.

 

5. You: In order to run with the big dogs, you need to act like one. Show investors you belong. Explain why you deserve their money, and what they can gain from investing in YOU. Because in the end, you are your businesses biggest asset.

 

Bottom line: There are a lot of ways to find investors these days, and it can be a challenging process. Making sure that you have these five things down pat will go a long way to ensuring that when you do find that right investor, and get to make that all-important pitch, you will stand out from the crowd.

 

Investors are out there, and they wantto invest in great businesses. Give them that chance. Prepare to impress, and then prepare some more.

 

 

About Steve Strauss

 

Steve Strauss Headshot New.pngSteven D. Strauss is one of the world's leading experts on small business and is a lawyer, writer, and speaker. The senior small business columnist for USA Today, his Ask an Expert column is one of the most highly-syndicated business columns in the country. He is the best-selling author of 17 books, including his latest, The Small Business Bible, now out in a completely updated third edition. You can also listen to his weekly podcast, Small Business SuccessSteven D. Strauss

   

Web: www.theselfemployed.com or Twitter: @SteveStrauss

You can read more articles from Steve Strauss by clicking here

  

Bank of America, N.A. engages with Steve Strauss to provide informational materials for your discussion or review purposes only. Steve Strauss is a registered trademark, used pursuant to license. The third parties within articles are used under license from Steve Strauss. Consult your financial, legal and accounting advisors, as neither Bank of America, its affiliates, nor their employees provide legal, accounting and tax advice. Bank of America, N.A. Member FDIC.  ©2019 Bank of America Corporation

A few years ago, I wrote a book with 15 co-authors from around the world called Planet Entrepreneur. I learned many lessons from that experience (including not to try and write Starting a Charity.jpga book with 15 other people).

 

More importantly, I discovered the many ways entrepreneurs act on their inherent idealism.

 

Globally, this is often called “social entrepreneurship,” meaning, using entrepreneurial skills and tactics to accomplish societal goals. For instance, one of my co-authors was using his MBA to bring electrical lighting to rural India; not something you usually associate with entrepreneurship.

 

Here at home, social entrepreneurship often takes the form of starting a non-profit or a charity. Is it difficult? Well, how is this for an answer: It is no more or less difficult than starting a business.

 

Here are the steps to take if this is your goal:

 

1. Have a specific vision and goal: There is a local sportscaster where I live who started a non-profit intended to help disadvantaged kids get into youth sports. He raises money to give them footballs, basketballs, soccer uniforms, and so on. It is a specific goal that fits his passion and brand. That’s the ticket.

 

The point is, if you want to start a charity, you should have a specific goal or purpose in mind. Make it narrow enough that it is easy to understand, and important enough that people will want to help you accomplish it.

 

That last point is vital. As the creator of the charity, you will necessarily be in front. You must get people excited with your vision. So, make sure you choose a focus that revs your motor and people can get behind.

 

As with a business, you will know what is unique and different about your intended charity. The National Center for Charitable Statistics states there are 1.5 million non-profits in the U.S. That is a lot of competition – for eyeballs, buzz, funding, and so on.

 

To stand out, you must do something different, special.

 

2. Draft a business plan: Just as with a for-profit business, a charity or non-profit needs a business plan. You will use it to define your vision, raise money, and give specific action steps to your lofty goals.

 

In it, you should discuss:

 

  • What the charity will be
  • How it is unique
  • Why it is needed
  • Who it will serve
  • Strategies for funding
  • Likely donors

 

And so on. My favorite tool for business planning is BplansThey have a good article on the subject here.

 

3. Make it legal: First, you will need a name. Choose wisely. Make it memorable.

 

Next, you will need to create a 501(c)(3). This is the section of the tax code that deals with charities and non-profits. A 501(c)(3) is the legal structure your charity needs to take. It is akin to incorporating. You can create it yourself using a site like LegalZoom, or work with an attorney.

 

After, you will file the non-profit’s Articles of Incorporation with your state, and then you will need to apply for tax-exempt status from both the IRS as well as your particular state.

 

4. Choose a board of directors: Your board helps set policy and direction and should be a major help with fundraising.

 

5. Get funded: Funding is the challenging part for most non-profits. It is an ongoing process. You will need funding to launch, and continued funding for operations. There are all sorts of models out there that you will need to learn about, including foundations, grants, individual giving, legacy giving, and so on.

 

The good news is that people want to help. If you have a strong and unique vision, a lean operation (meaning, most money goes to those you are trying to help and not your overhead), and a solid plan, you should find plenty of people and organizations who will want to assist you.

 

About Steve Strauss

 

Steve Strauss Headshot New.png

Steven D. Strauss is one of the world's leading experts on small business and is a lawyer, writer, and speaker. The senior small business columnist for USA Today, his Ask an Expert column is one of the most highly-syndicated business columns in the country. He is the best-selling author of 17 books, including his latest, The Small Business Bible, now out in a completely updated third edition. You can also listen to his weekly podcast, Small Business SuccessSteven D. Strauss.

 

Web: www.theselfemployed.com or Twitter: @SteveStrauss

You can read more articles from Steve Strauss by clicking here

 

Bank of America, N.A. engages with Steve Strauss to provide informational materials for your discussion or review purposes only. Steve Strauss is a registered trademark, used pursuant to license. The third parties within articles are used under license from Steve Strauss. Consult your financial, legal and accounting advisors, as neither Bank of America, its affiliates, nor their employees provide legal, accounting and tax advice.

 

Bank of America, N.A. Member FDIC.  ©2018 Bank of America Corporation

It’s easy to think, when you examine successful companies like Apple or Starbucks, that they were Apple and Starbucks from the start.

 

They weren’t.

 

Apple started in a garage. The original owners of Starbucks were content owning four stores until Howard Schultz showed up. What’s important to remember about these types of businesses and entrepreneurs is that they started off small…very small! It took time, patience and energy for those businesses to become big.

 

Take Richard Branson of Virgin, for example. Nowadays, the Virgin Group is huge – comprised of over 200 companies in more than 30 countries, specializing in air travel, mobile technology and much more. What you may not realize is that Virgin began as a tiny record company above a shoe shop in London and Branson had to barter his rent.

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Originally, Branson started Virgin Records as a means of funding his culture magazine, Student. Virgin Records only found mild success, but it was enough for Branson to take the next steps toward expansion when he started an actual record studio. Branson took things slowly, step-by-step, but eventually bands like the Rolling Stones and the Sex Pistols signed with Virgin Music.

 

One of the keys to Branson’s success is that he created multiple profit centers. That is, he paid attention to what the world needed and made a point to fill niches. That is how Virgin Records also became Virgin Atlantic, Virgin Megastores and Virgin Radio; similarly, it is why Virgin didn’t go under when digital music took over. Branson has even added space travel onto the Virgin empire, with Virgin Galactic.

 

Talk about one small step for man.

 

CLICK HERE TO READ MORE FROM SMALL BUSINESS EXPERT STEVE STRAUSS

 

Bill Gates has a similar story. Nowadays, we automatically associate the name “Bill Gates” with massive wealth and success, but what many people don’t know is that Gates’ first company, started with his friend Paul Allen, was a dud. “Traf-o-Data” was supposed to analyze traffic patterns. It stalled.

 

After dropping out of Harvard and moving to New Mexico, Gates and Allen tried again, this time starting “Micro-Soft.” The first several years of Microsoft weren’t easy. Gates and Allen struggled to make a profit, and found themselves in a couple legal battles as well. With only 25 employees, Microsoft relocated outside of Seattle in 1979 – this is where they would eventually become successful. Gates’ mother, Mary, connected Bill to her IBM colleagues, to whom Gates would eventually sell a product called MS-DOS. It was those IBM connections that catalyzed Microsoft’s first success.

 

Before Microsoft got big, Bill Gates had to rely on family connections.

 

Or what about Martha Stewart? She is another one of the great small-to-big entrepreneurial tales. Stewart grew up in New Jersey and came from modest beginnings. As a teenager, she did some modeling to make some extra money, but eventually went to Barnard and graduated in 1962. Stewart finished her degree in European and Architectural History.

 

Martha worked on Wall Street for several years until she realized her true love was gourmet cooking. She decided to put her lucrative career aside to pursue her calling. She trained herself with Julia Child’s cookbook and started her own small catering company. It took about ten years before Martha Stewart became Martha Stewart, and notably, like Richard Branson and Bill Gates, Martha Stewart created many profit centers for her business – books, a magazine, hosting her own TV show, radio, and so on.

 

All of these anecdotes should be great inspiration to any entrepreneurial-minded folk with a big vision. As long as you’re OK with starting small, and only becoming bigger after time and hard work, then you have every reason to think that you can go out there and make your dream a reality.

 

READ GREAT ENTREPRENEURS WHO STARTED SMALL PART I

 

About Steve Strauss

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Steven D. Strauss is one of the world's leading experts on small business and is a lawyer, writer, and speaker. The senior small business columnist for USA Today, his Ask an Expert column is one of the most highly-syndicated business columns in the country. He is the best-selling author of 17 books, including his latest, The Small Business Bible, now out in a completely updated third edition. You can also listen to his weekly podcast, Small Business SuccessSteven D. Strauss.                                        

 

Web: www.theselfemployed.com or Twitter: @SteveStrauss

You can read more articles from Steve Strauss by clicking here

 

Bank of America, N.A. engages with Steve Strauss to provide informational materials for your discussion or review purposes only. Steve Strauss is a registered trademark, used pursuant to license. The third parties within articles are used under license from Steve Strauss. Consult your financial, legal and accounting advisors, as neither Bank of America, its affiliates, nor their employees provide legal, accounting and tax advice.

 

Bank of America, N.A. Member FDIC. ©2017 Bank of America Corporation

You can count me as one of those experts who paints a fairly rosy picture of entrepreneurship. I do so because I truly believe entrepreneurship can be a fulfilling, happy and lucrative endeavor.

 

But, as is the case with any positive enterprise, there are also pieces of the puzzle that one doesn’t often see. Here are my top five things that you need to know, but may not be told, before starting your own business.

 

Tips.png1. You will need more money than you think: One of the main issues entrepreneurs face when starting a new business is that it does indeed take money to make money. And the first question, of course, is where does that money come from? The usual suspects are yourself (savings, cashing out), friends and family, credit cards, SBA loans or a loan from your bank. The good news is that banks want to lend— it is their business, after all. It’s therefore your job to make your venture as solid as possible.

 

But another issue that often crops up for the new entrepreneur, as far as financing goes, is figuring out the amount of money that will actually be needed to launch the venture. This amount will likely be more than you suspect. You will need enough to open the doors, buy product, get inventory, market the business and pay yourself for at least 6 months, which is the minimum amount of time it takes to start, get the word out, get business and start the money cycle.

 

And as is the case with anything that requires a worthwhile investment— things will go wrong, mistakes will be made, unforeseen problems will arise. That is why you need to be prepared financially.

 

2. Make sure your e-presence is robust from the start: You must have a good website and a strong social media presence when you launch your business— this is not something that can wait for later, nor can it be done poorly. Nab the Twitter and Facebook domain names for your business as soon as you know what that name is. Get a good-looking website up and running before you have your grand opening party. You may even want to have some videos to post on the site and an e-newsletter ready to go for day one.

 

These days, your customers will find your company online as much as they will offline, maybe more so, so your online offering has to be top-notch.

 

3. You’ll need to use all your skills: Whatever your specialty at work is and whatever skills you’ve learned along the way, you’ll need to use those in business right from the very beginning. When you start, your resources and help will be limited, and you’ll wear a lot of hats. Whether you’ve always been good at accounting or have a knack for marketing, don’t discount your tried and true abilities even while you learn new ones.

 

4. You will need to get customers, pronto: Before you launch, no one knows about your new business, and you don’t have a built-in base of customers. You need to let everyone know that you exist. One way to start is by contacting everyone you know. Online platforms such as your website, Twitter, Facebook and LinkedIn can help spread the word as well. Marketing and PR are another way, as is Pay-Per-Click. I suggest you come up with a multi-pronged approach to bring in customers before you launch.

 

5. Don’t forget to be patient: As you can see, it takes time, faith and perseverance— you must keep at it every day and stay true to your plan. It almost always pays off, especially if you were ready right from the start. Rome wasn’t built in a day, and your new business won’t be either.

 

 


 

About Steve Strauss

Steve Strauss Headshot SBC.png

Steven D. Strauss is one of the world's leading experts on small business and is a lawyer, writer, and speaker. The senior small business columnist for USA Today, his Ask an Expert column is one of the most highly-syndicated business columns in the country. He is the best-selling author of 17 books, including his latest, The Small Business Bible, now out in a completely updated third edition. You can also listen to his weekly podcast, Small Business SuccessSteven D. Strauss.

 

Web: www.theselfemployed.com or Twitter: @SteveStrauss

You can read more articles from Steve Strauss by clicking here

 

Bank of America, N.A. engages with Steve Strauss to provide informational materials for your discussion or review purposes only. Steve Strauss is a registered trademark, used pursuant to license. The third parties within articles are used under license from Steve Strauss. Consult your financial, legal and accounting advisors, as neither Bank of America, its affiliates, nor their employees provide legal, accounting and tax advice.

 

Bank of America, N.A. Member FDIC. ©2017 Bank of America Corporation

What makes someone start a small business?

 

There are plenty of traits that go into being an entrepreneur, that’s for sure. For starters, if you want to start a business, you better have a lot of initiative. The fact of the matter is no one is going to tell you what to do, or what you should do, once you start your own business. You need to be able to come up with ideas and follow through on those ideas, all on your own.

 

Which leads to the next two required traits:

 

  • Creativity: When you read about entrepreneurship, this is an often overlooked trait, but in my experience, an essential one. It takes creativity to come up with a viable business idea, marketing plans, employee retention strategies, and all the rest.

 

  • Work ethic: Yes, we are all working very hard these days, but small business owners work that much harder. The willingness to put in the time necessary and to do whatever it is that is needed is one thing that distinguishes the successful small business owner.

 

Other things that go into the small business equation include willingness to live with uncertainty, risk-taking, and fortitude.

 

But I would suggest that the No. 1 requirement is confidence.

 

To leave your job that has the comfort of a regular paycheck and benefits, to use your money to come up with a vision and then move mountains to bring it to fruition requires one thing: Confidence. Confidence in yourself, confidence in those around you, and confidence in the economy as a whole are necessary to take the risks needed to create a startup.

 

That sort of entrepreneurial bullish confidence is one of the things that make this country great.

 

And it is just that sort of confidence that we see in the Fall 2015 Bank of America Small Business Owner Report. The SBOR is a fascinating survey. Twice a year since 2012, Bank of America has taken the pulse of 1,000 small business owners and come away with some really interesting results.

 

In the latest edition of the SBOR, we see small business confidence on display in spades. Consider these impressive stats:

 

  • Nearly eight in 10 (78%) of small business owners are reporting plans to grow their business over the next five years

 

  • Nearly three-quarters (72%) of small business owners say they expect their revenues to increase in the upcoming year

 

  • Millennials are the most optimistic generation, with 80% expecting an increase in revenues and 88% saying they planned on growing their businesses over the next five years. And Baby Boomers are the generation “least likely” to say they plan on growing their business. But still, the majority (56%) of them say they planned on doing so. What about Gen-Xers? They are a very confident lot too – 86% plan on growing their business in the next few years

 

Consider too this amazing statistic from the latest SBOR: “Small business owners’ confidence in the national economy rose 11% year-over-year, from 45% in 2014 to 56% in 2015, representing the highest increase since the inception of our survey in 2012.” (Emphasis added.)Steve-Strauss--in-article-Medium.png

 

Talk about confidence.

 

To me, the one thing that indicates whether a small business owner is truly confident relates to, not surprisingly, money. The willingness to take out a loan is the surest sign I know of that someone is confident in both themself as well as the economy as a whole. Entrepreneurship, after all, requires the willingness to take a risk with money to make money. If someone is truly willing to do that, he or she is truly an entrepreneur.

 

And once again, that is precisely what this edition of the SBOR indicates. “More small business owners intend to apply for a loan in 2016 than in previous years, with one in three (35%) indicating intent to apply for a loan in 2016, a considerable (11%) jump year over year. In addition, the number of small business owners who report they have applied for a loan in the past two years has increased by more than 50%in the last 12 months, rising from 29 to 44%.”

 

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With loan applications expected to jump by a whopping 11% this year alone, and one in three small business owners intending to take on debt to grow their business, we are seeing this natural confidence of small business owners heading to new heights, and that’s good news for all of us.

 

Indeed, it’s great that small business owners tend to be a very confident group, but it’s even better that there’s a lot to be confident about these days.

 

About Steve Strauss

Steven D. Strauss is one of the world's leading experts on small business and is a lawyer, writer, and speaker. The senior small business columnist for USA Today, his Ask an Expert column is one of the most highly-syndicated business columns in the country. He is the best-selling author of 17 books, including his latest,The Small Business Bible, now out in a completely updated third edition. You can listen to his weekly podcast, Small Business Success, visit his new website TheSelfEmployed, and follow him on Twitter. © Steven D. Strauss.

You can read more articles from Steve Strauss by clicking here

 


Bank of America, N.A. engages with Steve Strauss to provide informational materials for your discussion or review purposes only. Steve Strauss is a registered trademark, used pursuant to license. The third parties within articles are used under license from Steve Strauss. Consult your financial, legal and accounting advisors, as neither Bank of America, its affiliates, nor their employees provide legal, accounting and tax advice.

 

Bank of America, N.A. Member FDIC.

©2015 Bank of America Corporation

 

This is the time of year for making a list – and checking it twice!

 

Whether it is a list of gifts for the family or things you need to get done before festivities and vacations begin, making lists seems to be part and parcel of the holiday season. Yet, of all the lists you make this time of year, getting the digital side of your business in order should be at the top.

 

Why? Because with the holiday season, especially this e-holiday season, it’s shaping up to be the busiest ever. Cyber Monday is only a decade old, yet last year sales topped almost $3 billion, with the average order hitting $124 (source, Investopedia.)

 

According to the Fall 2015 Bank of America Small Business Owner Report, small businesses are poised to benefit from the holiday shopping season this year. The SBOR found that 31% of entrepreneurs surveyed are expecting Black Friday to provide a bump in sales (compared with only 17% last year), and 43% are expecting Cyber Monday to follow that up with a positive impact on their bottom line (compared to only 29% last year).

 

So the question is not whether this holiday season is going to be a super busy one, rather the question is, are you prepared to take advantage of this unique moment?

 

Let me suggest that if you want to really be ready for the holidays, it would behoove you to make one more list, and get these things checked off in the next few weeks:

 

  1. 1. Make cybersecurity a priority: The Fall 2015 SBOR contained some fascinating results, including this digital nugget: More than one in 10 small business owners report having been the victim of a cybersecurity breach. Even more alarmingly, 59% expressed concern over protecting their proprietary data.

 

That is real cause for concern as we head into the holiday season because the online threat to your business is very real, too real. According to the National Cybersecurity Institute, “Cybercrimes [in 2015] are not decreasing. Rather, more crimes will be committed. Recovery [for the small business] will be painful and disruptive.”

 

What can you do? The easiest and best thing is to purchase a cybersecurity software suite. An online search will reveal numerous excellent, respected online cloud services that can protect your vital business info 24/7/365.

 

Get one today.

 

  1. 2. Give your website an audit: As the SBOR finds, with people increasingly shopping online, more and more are going to be visiting your website. Even if you don’t engage in e-commerce, folks will be finding you online. As such, it is incumbent upon you to make a great first impression when they get there.

 

What can you do?

 

  • Add some fresh content
  • Make and post a video or two
  • Update your About page – make it current, friendly
  • Take down and post some new pictures

 

Aside from simply making your site more attractive to customers, doing the above will have the added benefit of upgrading your site in the eyes of search engines.

 

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  1. 3. Hire a techie: In terms of technology and computers, too many small business owners plod along, getting by with computers that almost work right, cords that look too messy, websites that are a tad clumsy, spotty wireless connections, and all the rest. Especially during the busy holiday shopping season, you don’t want that.

 

And it is just so easy these days to get the tech help you need. For example, Craigslist in your area has a list of very affordable techies who can help you sort through your issues.

 

  1. 4. Try out a different social media platform: If you use Facebook, consider giving Twitter a try. If you use Twitter, check out Instagram. Potential new customers are out there on these different platforms.

 

You don’t have time or the ability to do that right now? That’s OK, that’s what interns and outsourcing are for. Again, a lot of people have mastered social media and they stand ready to help you.

 

The last bit of good news is that if you check just these few things off of your digital holiday to-do list, you will also be sure to be better prepared for managing the digital side of your business.

 

About Steve Strauss

Steven D. Strauss is one of the world's leading experts on small business and is a lawyer, writer, and speaker. The senior small business columnist for USA Today, his Ask an Expert column is one of the most highly-syndicated business columns in the country. He is the best-selling author of 17 books, including his latest,The Small Business Bible, now out in a completely updated third edition. You can listen to his weekly podcast, Small Business Success, visit his new website TheSelfEmployed, and follow him on Twitter. © Steven D. Strauss.

You can read more articles from Steve Strauss by clicking here

 

 

Bank of America, N.A. engages with Steve Strauss to provide informational materials for your discussion or review purposes only. Steve Strauss is a registered trademark, used pursuant to license. The third parties within articles are used under license from Steve Strauss. Consult your financial, legal and accounting advisors, as neither Bank of America, its affiliates, nor their employees provide legal, accounting and tax advice.

 

Bank of America, N.A. Member FDIC.

©2015 Bank of America Corporation

 

The fact that we are living in an era when technology dictates much of what we do with our small businesses is not news. We are living through one of the most fundamental shifts in business ever. So the question is not whether technology is changing your business, because of course it is.

 

Rather, the question is, how can you best and most easily harness technology for your benefit? Steve-Strauss--in-article-Medium.png

 

The number of options when it comes to technology can be overwhelming. Let me suggest four easy things you can do today to, if not get ahead of the technology curve, then to at least stay up with the times.

 

1. Update your website: There was a time not long ago when I would have told you to “get a website!” But fortunately, that moment has seemed to have passed; most entrepreneurs understand that they must have a website.

 

But that begs the question: When is the last time you gave yourself a website audit? Take a look at your site:

 

  • Does it still say “© 2012” at the bottom? (It better not!)
  • How does your “About” page read? (It needs to be current.)
  • Do you have video on your homepage? (You should.)

 

Your website really is your window to the world these days, and the good news is that getting a new one or updating your old one requires neither a lot of time nor a lot of money. But it will yield a lot of results.

 

2. Dive into a new social media site: By the same token, many small business owners seem to have gotten the memo that social media is truly a unique and valuable opportunity. Even if they have not mastered exactly how to get it to impact their bottom line, many entrepreneurs have hopped on the social media bandwagon and at least mastered one of the platforms.

 

If that describes you, one easy way to use this technology revolution to your benefit is to take the time to learn another social media platform. If you are posting specials on Facebook, maybe Instagram might be a good addition, or Twitter, or Pinterest, for example.

 

The point is, there is a segment of your audience on these other sites right now, and if you begin to lock-in on them at platforms they are using, you likely will create a new profit center for yourself.

 

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3. Upgrade some tech: At my site The Self Employed, we used to have a hosting plan that made sense when the site was launched. But after a few years, we were having tons of problems. The site had grown so much and was getting much more traffic and serving up a lot more pages, so it started to load slow and then eventually crashed.

 

But the cost of a server upgrade was not appetizing.

 

Too bad for me.

 

Eventually, we had to get a significant server upgrade. And boy are we glad we did. The site is a huge part of my business, and it runs like a champ now. So the question of course for you is, what part of your technology package could use an upgrade, and what sort of difference might it make?

 

4. Learn something new: There is simply so much new information that comes down the pike every day that it would be impossible to give one recommendation over another. For instance, I recently learned about a new product called Sway that really makes presentations pop. Learning about it will definitely improve my business.

 

What about yours?

 

Do a search for apps and products that strike your fancy or fit the bill. Check them out. I can guarantee there is something out there right now that you don’t know about that will either make your life easier, your business better, or both.

 

About Steve Strauss

Steven D. Strauss is one of the world's leading experts on small business and is a lawyer, writer, and speaker. The senior small business columnist for USA Today, his Ask an Expert column is one of the most highly-syndicated business columns in the country. He is the best-selling author of 17 books, including his latest,The Small Business Bible, now out in a completely updated third edition. You can listen to his weekly podcast, Small Business Success, visit his new website TheSelfEmployed, and follow him on Twitter. © Steven D. Strauss.

You can read more articles from Steve Strauss by clicking here

 


Bank of America, N.A. engages with Steve Strauss to provide informational materials for your discussion or review purposes only. Steve Strauss is a registered trademark, used pursuant to license. The third parties within articles are used under license from Steve Strauss. Consult your financial, legal and accounting advisors, as neither Bank of America, its affiliates, nor their employees provide legal, accounting and tax advice.

 

Bank of America, N.A. Member FDIC.

©2015 Bank of America Corporation

Steve Strauss

Writing a business plan

Posted by Steve Strauss Mar 16, 2015

I’ve got some news for you: you need to write a business plan.

 

I know you don’t want to. I didn’t want to either. Really, no one does. But the fact is, whether we want to or not, all entrepreneurs and small business owners need to create a business plan. The only way to get one is to sit down, crunch the numbers, analyze the data, review the competition, map out your strategy, do the work, and pound it out.

 

Here’s why:

 

Your business plan is your roadmap to success. It tells you, and others, how you plan to get from Point A to Point Z. Ask yourself this question: Would you ever get in your car before a long road trip and put a bag over your head before heading out? Of course not. With a bag over your head, you would never know if you were headed in the right direction, if you had enough gas, if a red warning light comes on, nothing.

 

Writing a business plan allows you to take the bag off of your head and see clearly where you are headed and how you plan on getting there. It is your blueprint for how you will get to where you want to go. It will allow you to really think through your enterprise, set goals, create benchmarks, and figure out what resources you will need to get those things accomplished. For that reason alone, a business plan is a valuable tool for anyone in business – whether they are just starting out or are a seasoned pro.

Steve-Strauss--in-article-Medium.png

But even beyond that, a business plan is a necessary and valuable tool if you ever want to get outside funding for your enterprise. A banker will definitely want to see your business plan, as would any sort of angel investor.

 

So, how do you actually write a business plan? There are all sorts of ways to get one done. You can Google it, of course, and find many samples, but better than that, I suggest to use some business planning software that will walk you, step-by-step, thought the process. I am partial to the products put out by Palo Alto Software, especially their online site and tools, Bplans. I think they make it as easy and painless as possible.

 

What will be in your plan? Essentially, it should cover the following areas (note: while your actual business plan will probably be around 30 pages, we have added in some excerpts below so you can get an idea of what each section might look like):

 

Executive summary: This is the “greatest hits” of your business. What is your secret sauce, why is your business special, why should someone be interested in what you are doing, how will you make a profit? Put your best foot forward here.

 

As a specialty coffee retailer that will be providing hot and cold beverages at drive-through locations throughout the metro area, The Daily Perc (TDP) will tap into the growing trend for specialty coffee. Using only the best beans and ingredients, as well as daily specials, TDP will drive sales by targeting both daily commuters as well as the casual coffee drinker.

 

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Business and industry overview: Tell us about your business in more detail, and how it fits into the marketplace and competitive landscape. Is this a thriving industry? What are you bringing to the party?

 

The coffee industry has grown by tremendous amounts in the U.S. over the past decade. Starbucks, the national leader, had net reveue sales in excess of $14 billion last year, and even across-the-board coffee sales generally have increased.

 

Competition and competitive advantage: Explain here who your competition is and who you think it will be in the future, and how you expect to deal with them and gain market share.

 

There are four major competitors in TDP’s drive-through market. They are the national chains of Starbucks and Panera, as well as two local businesses. The advantage that TDP will offer is that we will have Starbucks’ quality at grocery store prices.

 

Customer acquisition and marketing: In this section of your business plan, you will think through whom your customers will likely be, how you will market to them, and your strategy for capturing their attention, and dollar.

 

Additionally, because digital is so important now, you will also outline your Web strategy here, any social media marketing plans, and so on.

 

The Daily Perc will penetrate the commuter and casual coffee market by deploying a two-fold strategy. First, our locations will only be found in highly trafficked locations, and our distinctive blue and gold motif will draw attention to the stores. Second, we will be hiring a local digital marketing company to spearhead a robust social media marketing campaign

 

Financials: For most entrepreneurs, this is the tough stuff. In this section you will need to outline your startup costs, operating budget, cash flow, break-even analysis, income and expenses, profit and loss statements, and so on.

 

How do you know this information if you are a new startup? The answer is the same as with the rest of your business plan – research. No, you don’t know exactly how much you will make in Year 1 (let alone Year 5), so all you can do is estimate to the best of your ability. (A word of caution – do not exaggerate. Experienced business people can see through puffed-up numbers in a flash.)

 

The Daily Perc’s financial picture is quite promising. Initial cost outlays will be reduced given that the two planned locations have already been secured and were previously remolded as drive through locations.

 

[Add financials here.]

 

Benchmarks: Throughout the plan, you will list what you will want to accomplish, and by when. Benchmarks might be income, profit, Web traffic . . . it all depends.

 

By the end of Year 1, the two locations will have generated 288,000 tickets, resulting in $588,000 in revenue. Sales are expected to grow by nearly 400% in the second year due to the addition of two more locations. On the marketing front, our social media campaign should result in 50,000 Facebook Likes by Year Two, and Website traffic of 10,000 pageviews a month.

 

As you can see, a business plan is a valuable tool for all sorts of reasons, but the main one is this: It reduces the risk of your enterprise. By thoroughly thinking through your venture, you lower the odds of making a big mistake; by taking the bag off of your head, you will see things more clearly.



About Steve Strauss

Steven D. Strauss is one of the world's leading experts on small business and is a lawyer, writer, and speaker. The senior small business columnist for USA Today, his Ask an Expert column is one of the most highly-syndicated business columns in the country. He is the best-selling author of 17 books, including his latest,The Small Business Bible, now out in a completely updated third edition. You can listen to his weekly podcast, Small Business Success, visit his new website TheSelfEmployed, and follow him on Twitter. © Steven D. Strauss.

http://www.smallbusinessonlinecommunity.bankofamerica.com/people/Steve%20Strauss/content

You can read more articles from Steve Strauss by clicking here


About a month ago, I shared a story about Dr. Spencer Silver of 3M who invented a unique type of glue that wasn’t very sticky. It took him and his colleagues almost a decade to eventually figure out how to turn the unique substance into a profitable, useful idea. The company eventually developed Post-Its, one of 3M’s best products ever.

 

The point of the story is that the big idea is often the easiest part of innovation. Who hasn’t had a great idea or seen a product or business and said, “I thought of that!”? We all have. But how many of us brought our genius idea to market? Not many.

 

While big ideas are great, the real trick is the next step, the part after you have your “Eureka Moment” – the actual manifestation of that idea into a viable, commercial product, service, or business. Thomas Edison had it right when he said that “genius is 1% inspiration and 99% perspiration.”Steve-Strauss--in-article-Medium.png

 

What do you do after inspiration hits? Here are the steps:

 

1. Get feedback: I will reiterate this point from Part 1 because I think it is very important. As entrepreneurs, we tend to be an optimistic, enthusiastic, rose-colored-glasses group. But that can also be our blind spot and downfall.

 

Before investing a ton of time, energy, or money into your visionary idea, make sure that other people like it too. No, they may not see what you see (that is the nature of having a big, unique idea), but you still want to make certain that people whose opinion you trust agree that it is an idea worth pursuing, and that it is commercially viable.

 

2. Make a prototype / test it: The next step depends on what type of idea you have:

 

  • If it is an idea for a business, you will want to test it with a small group to see if it will work on a larger scale. There is a very popular book out right now which explains how to do this, called The Lean Startup.

 

  • If it is a product that you want to make, then you will need to make a prototype. Tiffany Krumins went on the first episode ever of Shark Tank to pitch her product,  Ava the Elephant –

 

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3. Protect your idea: First, you will want to protect your idea by obtaining a non-disclosure agreement (NDA). An NDA is a legal document that tells people that you will be sharing confidential, proprietary information with them and they cannot use it in any way without your prior written consent. You can find and tailor an NDA to your needs fairly easily online. One place you could check out is LegalZoom.com.

 

Next, and this part is not as easy, you will need a copyright, and maybe a patent. Copyrights protect writing, designs, logos, brand names and more. You can apply for a copyright online at the United States Patent and Trademark Office.

 

Patents protect products; if you have a unique product that you want to legally protect, you will need to get one. This will require the assistance of an attorney and can be costly.

 

4. Get your business funded: Needless to say, you will need capital to get your new business or product off of the ground. A small business loan or other funding mechanisms will help you receive legal assistance to protect your idea fund the prototype, which allow you to get your business up and running.

 

5. Bring it to market: A product will need to be produced and distributed. A business will need to launch and find customers. This is the critical step. Everything else was the foundation for getting to this place.

 

6. Analyze, and pivot if necessary: The invention or business you originally thought of may not be the same as the one you bring to market. Great businesses see what works, and what doesn’t, and then make changes as needed.

 

7. Throw a party! Very few people get to this place, so be sure to celebrate your perseverance, smarts, vision, and good fortune.



About Steve Strauss

Steven D. Strauss is one of the world's leading experts on small business and is a lawyer, writer, and speaker. The senior small business columnist for USA Today, his Ask an Expert column is one of the most highly-syndicated business columns in the country. He is the best-selling author of 17 books, including his latest,The Small Business Bible, now out in a completely updated third edition. You can listen to his weekly podcast, Small Business Success, visit his new website TheSelfEmployed, and follow him on Twitter. © Steven D. Strauss.

http://www.smallbusinessonlinecommunity.bankofamerica.com/people/Steve%20Strauss/content

You can read more articles from Steve Strauss by clicking here





In 1968, a research scientist named Dr. Spencer Silver with the 3M Company experimented with different configurations of compounds in an effort to create a sticky glue. One day, the scientist ended up with glue that was practically the opposite of what he was trying to create – it wasn’t very sticky at all.

 

However, Dr. Silver’s new glue was unique since it stayed somewhat sticky, even after repeated use. Dr. Silver knew that he had created something interesting and potentially valuable, but wondered what it could be used for. Since he was unsure of the full potential of this glue, he conducted internal demonstrations within 3M, hoping someone could figure out a use for the glue.Steve-Strauss--in-article-Medium.png

 

That someone turned out to be fellow 3M employee, Art Fry. Fry happened to be a singer in his church choir. He often marked his hymnal with paper bookmarks. One day while at church, Fry mistakenly tipped the book upside down and all of his bookmarks fell out. It was then that he said to himself, “I sure wish I had a sticky bookmark.”

 

Eureka!

 

Fry realized that Dr. Silver’s sort-of-sticky glue would be perfect. While it would still take several years and lots of work, in the end, the Post-It became one of the most successful products in 3M history.

 

The problems faced by Stuart Silver and Art Fry were not unique. Lots of people have great ideas, but the real question then is, how do you capitalize on it?

Several years ago, I wrote a book on this very subject called
The Big Idea: How Business Innovators Get Great Ideas to Market. The book looked at everything from Post-Its to Silly Putty to the Xerox machine – all ideas that were ahead of the curve. The question for these innovators was the same one that Silver and Fry had, and the same you or I would have after coming up with a big idea. That question is:  “What’s next?”

 

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One thing I learned while developing the book is that the next step is to make sure other people think it is a great idea too because not every big idea is a great idea. If you have ever watched the TV show Shark Tank, you know what I am referring to . Different entrepreneurs come on the show with exciting, innovative, commercial ideas and products that the Sharks love and want to invest in. Other times contestants have invested time and money into a product idea that should never have been pursued.

 

Yes, entrepreneurs are dreamers and visionaries, but there is a fine line between vision and myopia, and the latter can be dangerous.

 

So the first step after the big idea is to make sure other people think it is a great idea too; you don’t want to invest a lot of time and money into an idea that only you think is extraordinary. Share your idea with your spouse and speak with business associates. You want to see whether others share your enthusiasm and understand your vision.

 

Specifically and importantly, you want to gauge whether the idea is commercially viable.  Will people actually pay money for it?

 

After that, the next initial step is to analyze what resources you will need to get from Point A to Point Z. The process of actually manifesting that idea is usually not an easy, quick, or inexpensive one. George DeMestral looked at some burrs in his sock under a microscope and had a vision for what would become a new fastener – Velcro. But this took a decade and he almost went bankrupt twice before the idea became one of the most successful products in history.

 

So those are your initial steps – analyze and then clarify the idea.

 

After that, it is a matter of logistics – making a prototype, legally protecting your idea (though this could also be done earlier in the process to protect your idea prior to sharing it with business professionals), receiving funding, and then introducing it to market.

 

That’s what we will look at in my next article. Stick around!


About Steve Strauss

Steven D. Strauss is one of the world's leading experts on small business and is a lawyer, writer, and speaker. The senior small business columnist for USA Today, his Ask an Expert column is one of the most highly-syndicated business columns in the country. He is the best-selling author of 17 books, including his latest,The Small Business Bible, now out in a completely updated third edition. You can listen to his weekly podcast, Small Business Success, visit his new website TheSelfEmployed, and follow him on Twitter. © Steven D. Strauss.

http://www.smallbusinessonlinecommunity.bankofamerica.com/people/Steve%20Strauss/content

You can read more articles from Steve Strauss by clicking here






With the kids back in school, summer vacation is a warm memory and the leaves on the trees are beginning to change color just a bit; fall always seems like a new beginning and a good time to think ahead.

 

While business planning is well intentioned, it can leave us with ideas that either go unexecuted or fit into a deliberate business strategy.

 

So let me suggest a process that is easy, quick and will be sure to not only keep you on track, but make the most of the valuable time you spend planning that is most likely taken away from your “day job”. I learned this process from real estate mogul Barbara Corcoran, from Shark Tank. Barbara famously took a $1,000 loan from her mother and parlayed that into a New York real estate empire worth millions.

 

Impressive of course, but the thing to remember is that she started small.

 

So, how did she grow her business big? Barbara says that every year, she would ask herself and her team a few simple questions.

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The first had to do with the direction of the business:

 

“Where do we want to be in one year? In five years?”

 

How easy is that? Yes, it takes some forethought and time to answer, but it crystallizes everything into one basic sentence. It is the sort of question that could be answered in a few minutes if you really know where you are headed, or it could take a few hours to hammer out. Either way, you can see that the answer is quite valuable.

 

Let’s say you own a cupcake shop. Undoubtedly, you spend the majority of your time baking, taking orders, delivering cupcakes and all the rest. How much time do you really have for a brainstorming and business overview? Probably not much.

 

But that is why this first question is so great. It should not really be that tough to answer, and yet the answer can become a compass for your endeavors. If you want to open a new cupcake shop in the next year, and two more in the next five, then having that in the back of your mind will help guide your daily activities.


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Barbara’s second question is:

“Given the answer to the first question, what resources do we need to get there?”

 

And, boiled down, that’s all we really need to know, isn’t it? You might say, “Well, to open a second cupcake shop, I will need to get a loan, and also find a great location.” And that, in turn, should give structure to your efforts over the next twelve months. Of course, you will need to bake and sell, but having answered these two critical questions, you can now gear your daily efforts towards realizing your goal. There is no long, complicated process necessary.

 

Most small business owners are just so busy with their business that they really don’t have a lot of time to focus on the big picture. That is why Michael Gerber famously advised in his book The E-Myth that we should try and spend more time working on our business than in our business.

 

And that is what you might want to consider doing too, with this simple exercise:

 

1. Where do you want your business to be in a year?

 

2. What resources do you need to get there?


About Steve Strauss

Steven D. Strauss is one of the world's leading experts on small business and is a lawyer, writer, and speaker. The senior small business columnist for USA Today, his Ask an Expert column is one of the most highly-syndicated business columns in the country. He is the best-selling author of 17 books, including his latest,The Small Business Bible, now out in a completely updated third edition. You can listen to his weekly podcast, Small Business Success, visit his new website TheSelfEmployed, and follow him on Twitter. © Steven D. Strauss.

http://www.smallbusinessonlinecommunity.bankofamerica.com/people/Steve%20Strauss/content

You can read more articles from Steve Strauss by clicking here



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