Radio Free Enterprise

20 Ways To Land VC Funding

2006-11-27T08:52:00.000-05:00

Many entrepreneurs dream of attracting millions of dollars in venture capital (VC) funding to bring their innovative business concept to the world.

It's not until they've gone through the meat-grinder process of pitching VCs, negotiating with VCs, working with VCs, giving up huge chunks of equity to VCs and taking orders from VCs that they realize that their dream was at least one part nightmare.

Venture Capitalists are not interested in seeing you fulfill your dreams. They're interested in making money. If you're able to fulfill your dreams and make some money for yourself along the way, all the better. But those two criteria are not necessary for them to judge one of their investments to have been a success.

This short rant is my way of saying Be Careful What You Wish For when it comes to landing VC funding.

With that off my chest, pray allow me to relate an intersting article I came across on the Money magazine web site. Reporters from Money asked a group of successful venture capitalists to share their ideas on what types of companies they would fund if they could just find the right people and business plans. The result of the survey was a list of 20 concepts which can be reviewed by clicking on the headline of this posting.

Two things I found particularly interesting:

1) Most of the numbers and timelines (as in how much money they would invest over what period of time) the VCs cited were unrealistic. For example: $5 million to fund a 20-person team over the course of 3 years to develop a heads-up display to retrofit on automobiles. Payroll and overhead for a 20-person team in any high-cost metropolitan area is going to bust that budget long before we even talk about doing any research and development.

2) The idea of VCs pitching their own ideas and recruiting entrepreneurs to come in and make them happen turns the usual approach on its head. Entrepreneurs are generally willing to put up with all the hell and dilution of ownership that accompanies VC participation in order to make their own dreams or business ideas manifest - not those of someone else. Now, if an entrepreneur sees an item on this list that is in direct alignment with what he is currently working on - great! Otherwise, I just don't get it.

You see, more likely than not, after spending 3 years and $5 million, that heads-up display venture will be no more. Without a dream providing at least the mirage of light at the end of the tunnel, the people on the team are going to have a hard time coming into work every day.

All Things Audio

2006-12-02T09:10:00.000-05:00

Behind the scenes here at Radio Free Enterprise, I've been producing and posting some podcasts.

I've only shared them with a small group of people so far, as I work on refining the theme and sound of my show, and won't post them publicly or distribute them via RSS until after this blog is redesigned and relaunched somewhere around the turn of the year.

I am also working to launch Radio Free Enterprise as a live call-in weekend radio show here in the Washington, DC area with the intention of growing it into a nationally syndicated show over the coming years. I'll let you know if and when we hit the airwaves.

So, if neither of these projects are yet a reality, why am I sharing them with you now? To underscore my belief in the power of audio content to connect you with your target market (audience), and to strongly encourage you to begin investigating how you might use it in your business sooner rather than later.

I often use the metaphor of the layers of an onion when describing how best to make sense of a complex topic. You can't expect to grasp all the subtleties and complexities of a given subject all at once, so you have to surrender yourself to only seeking to understand one layer at a time and continuing to peel your way down as your brain grasps each stratum.

That metaphor certainly applies to my personal education regarding all things audio - from production to broadcasting to sponsorships to podcasting - and I believe it will apply to your journey as well if you choose to take it. The sooner you start examining your own personal audio onion, the better for your hopes of tapping into this long-powerful and newly-reenergized medium.

In the days and weeks ahead I'll be sharing more regarding how I am applying audio in my business, how you can use it in yours, and where to find the resources you need to make it happen.

Stay tuned...

Google Radio?

2006-11-08T06:52:00.000-05:00

Nobody seems very excited about traditional radio these days.

In an era of streaming video, satellite radio, podcasts and scores of entertainment alternatives from on-demand movies to the XBox 360, good old fashioned terrestrial radio (as in AM and FM) seems like a dusty afterthought from an age gone by.

So why is it that Google, the standard-bearer for all things leading-edge, is reportedly hiring up to 1,000 people to lead their charge into an industry that produced it's first commercial broadcast in 1927?

I've got to figure they see money in there somewhere.

While Google is notoriously tight-lipped about their plans in all of their ventures, it is being reported that they are putting a great deal of effort into hiring veteran radio ad salespeople and paying them up to 50% more than radio firms to sell the same spots. The company also recently paid over $1 billion to acquire DMarc Broadcasting, which automates the radio spot buying process for advertisers.

Reports are also coming out that Google may be interested in purchasing a stake in Clear Channel Communications, which owns local radio stations across the country and controls approximately 20% of all local radio advertising inventory.

Radio is a uniquely personal medium which makes it an excellent advertising channel. Listeners are paying attention to what's coming live from their speakers and local stations lend an element of connection that satellite companies and recorded programs cannot match.

I've been a fan since listening to crackly nighttime baseball broadcasts on a transistor radio as a kid and have also had the great fortune to be behind the microphone many times on both AM and FM. This lifelong love affair makes it difficult for me to be objective about the future of what for me is a cherished medium - one whose demise would be heartbreaking.

Google's huge move in support of traditional, terrestrial radio is music to my ears.

What Does Internet Video Really Mean to Business Owners?

2006-10-28T09:04:00.000-04:00

Since the advent of the "Talkies" in 1927, it has been abundantly clear that nothing tells a story more completely in a short period of time than moving pictures with sound.

For the next half-century the problem was that very few people had access to the tools, knowledge or distribution channels to tell their story this way.

"Pro-sumer" video equipment began appearing in the early 1980s and by the late 1990s the Mini-DV format brought the promise of digital video and non-linear editing to the masses. Over the past 24 months, the emergence of the Internet as a virtually no-cost distribution medium has completed the movement of movie production from the realm of a privileged few to within the grasp of the vast majority of the developed world.

But what does all this mean for the average business owner? How can he or she put this powerful new medium to use for the benefit of their firm? By letting it do what it does best: tell a story. Your story.

The Age of The Video Brochure
For years we business owners have tried to communicate the essential benefits of our offering to our target market through the written word; brochures, sales letters, direct mail packages, presentation folders filled with all manner of print collateral and, most recently, static web sites filled with pages of text that no one has time to read.

I believe that every business owner in operation today should produce a video message explaining who they are and what they do that is great and then post it on the home page of their web site as well as to every video directory site they can find (Google Video, YouTube, Yahoo Video, etc.). That message should be between 60 and 150 seconds long and it should include a call to action along with everything a prospective customer needs to know in order to contact their firm and do business with it.

After producing and posting your video online, the next step is to let everyone in creation know about it. Adding the text of the script to every page where the video appears will make it much easier for web searchers to find it. Announcing the video to every one of your customers and prospects via email and direct mail will drive tremendous traffic. And distributing a press release online - with follow-up phone calls to local newspapers and broadcast outlets - will complete the circle of not only creating the video but making sure people see it.

In addition to the obvious promotional activity that surrounds this concept, there is another extremely important benefit which accrues - that of having to explain what you do and why it's great in less than three minutes. I am continually amazed at the impact that writing a promotional script has on my thinking regarding the product or service being advertised.

In addition to producing a number of video brochures, I have also spent many hours writing and producing 30-second and 60-second radio spots. Trying to communicate a message and a call to action in less than a minute - with only sound and no pictures - is, to say the least, a discipline. Adding another two minutes - and colorful images - gives you a lot more room to work with but still forces you to focus on what the essential benefits are of doing business with your company.

In addition to your prospects and customers, this is information your employees and even you may be surprised to learn.

One last benefit of producing a video brochure: 30- and 60-second versions can be used as local cable TV insert spots on targeted channels including CNN, The Food Network - you name it - for prices much lower than you might think.

I am available to help you produce this project or, if you want to take a shot at it on your own, you can start by purchasing the Web Site Video Secrets training package at: http://www.WebSiteVideoSecrets.com.

I'm ready for my close-up Mr. DeMille.

A Thought from the Wizard of Ads

2005-11-14T08:10:00.000-05:00

My belief is that the only way to increase your sales is to change your behavior. And, most times, changing your behavior starts with changing your perspective.

The text below is quoted in its entirety from this week's "Wizard of Ads" ezine, which is written and posted every Monday morning by Roy H. Williams, founder of the Wizard Academy in Texas. You can subscribe to Roy's "Monday Morning Wizard of Ads" email newsletter by clicking on the headline above.

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It was Christmas Eve, 1513. In just two more years, 78 year-old architect Giovanni Giocondo would be dead, having filled Europe with magnificent buildings and bridges that continue to stand unweathered in the year 2005. During that night he wrote a note to his friend, Allagia Aldobrandeschi. The note, like his other work, remains:

I am your friend and my love for you goes deep. There is nothing I can give you which you have not got, but there is much, very much, that, while I cannot give it, you can take.

No heaven can come to us unless our hearts find rest in today. Take heaven!

No peace lies in the future that is not hidden in this present little instant. Take peace!

The gloom of the world is but a shadow. Behind it, yet within our reach is joy. There is radiance and glory in the darkness could we but see - and to see we have only to look. I beseech you to look!

Life is so generous a giver, but we, judging its gifts by the covering, cast them away as ugly, or heavy or hard. Welcome it, grasp it, touch the angel's hand that brings it to you. Everything we call a trial, a sorrow, or a duty, believe me, that angel's hand is there, the gift is there, and the wonder of an overshadowing presence.

Life is so full of meaning and purpose, so full of beauty - beneath its covering - that you will find earth but cloaks your heaven.

Courage, then, to claim it, that is all. But courage you have, and the knowledge that we are all pilgrims together, wending through unknown country, home.

And so, at this time, I greet you. Not quite as the world sends greetings, but with profound esteem and with the prayer that for you now and forever, the day breaks, and the shadows flee away.

The American Idol of Marketing: QVC Product Search

2005-11-15T09:23:00.000-05:00

I recently participated in the American Idol talent search of product marketing: The QVC Product Search event in Washington, DC.

For those who don't watch much TV, QVC is a cable television marketing behemoth. Literally a 24-hour commercial, QVC sells billions of dollars annually of products ranging from food and kitchen gadgets to jewelry, cosmetics and power tools. Having your product featured on QVC is to direct-response marketing what getting shelf space at Wal-Mart is to retailing.

But that's just the question: How can you get your product featured on QVC?

Well, you can contact them through their web site, follow the instructions, submit your product to a faceless reviewer and hope for the best. Or you can come out to one of the small number of QVC Product Search events they hold across the country each year. I wasn't even aware that such events existed until I saw a television ad last week describing how to register to have your product reviewed by QVC buyers at the Sheraton Crystal City Hotel in Arlington, Virginia.

Unfortunately, I saw the ad just one day before the event was to take place. When I tried to register online, the system accepted all of my information but told me it was too late to participate after I hit the "Submit" button. Thanks for letting me spend twenty minutes trying to answer every question with percision and describe why QVC will love my product in 200 words or less!

I decided to try just showing up to see how the whole deal worked and try to get my product reviewed without a reservation. My ploy worked. I learned a great deal and did get my product in front of a living, breathing QVC buyer named Katherine. In between I joined hundreds of other aspiring marketeers in a long, slow-moving line, swapping stories and product descriptions and looking for the break of a lifetime.

The entrepreneurs around me included a guy marketing cheese straws (cheese straws?), a Brit hawking "The most reflective safety fabric in the world," and, the person who had the best luck in the room, an extremely trim young man marketing decorative displays which hold commemerative golf balls purchased by visiting golfers at the pro shops of courses they've played. Who knew?

What product was I hawking you ask? Box Time is the answer. Box Time is actually two products in one: First it's a 30-minute Barney-like children's video which features costumed characters, animation and live actors including children; Secondly it's a one-hour family project which lets parents and children spend time together building and painting a playhouse made from cardboard.

If you remember the joy of playing in big empty boxes as a child, you understand the appeal of Box Time. Kids love boxes. And they love creating fantasy worlds where their box is a castle or a fort or an airplane or a race car or a speed boat or whatever their imagination wants it to be. The Box Time DVD takes that concept one step further by showing three kids actually entering the fantasy world of Boxville where wonderful characters facilitate their dream of building their own play house - the same play house packaged with the DVD which includes cardboard, glue, tape, paint, brushes, printed instructions and a tap light.

I really like this product and have been involved in trying to get it launched for over a year. In 2004 we presented Box Time to a $300-million childrens products company at their headquarters in Columbus, OH. They really liked both the video and the family kit project but they couldn't see how to market them both together as a single product. It's kind of like the old Saturday NIght Live skit: is it a dessert topping or a floor polish? We got the same reaction from video distributors who liked the video but couldn't see how to link or display the playhouse which is a large, oddly-shaped package.

The unusual nature of the product is why the Box Time team has come to the conclusion that TV-based direct-response marketing is the best way to market this product. On TV we can show clips from the video, show families working together to build the playhouse, show how much kids love both elements and how much parents enjoy the time spent working together with their kids. Believe me folks, this product is a winner just looking for a break.

Unfortunately that break did not come at the QVC event. Being as I had less than 24-hours to prepare, my presentation was not all it could have been. As a walk-on, my appearance was at the very end of the day and the QVC buyer I spoke to looked like she was ready to pack it in for the day. Without a battery-operated TV/DVD player I couldn't show any clips, etc., etc., ad nauseum. I could give you a whole long list of excuses but the bottom line is I didn't close the deal. I didn't even get the buyer engaged with my story.

As usual when making mistakes, I learned a great deal and will relate some tips on how to do your best when presenting to QVC in a future blog posting. In the meantime, I'm coaching my Box Time teammates in Los Angeles on how to give a better pitch when QVC comes to LA on February 15th.

Stay tuned!

The Seven Deadly Sins of Small Business Marketing

2005-11-16T06:57:00.000-05:00

In recent years, as my hair has grown increasingly gray, more and more small business owners have been approaching me for advice on how to increase their sales. Unfortunately, my suggestions often revolve around the necessity for behavioral changes on their part.

What's wrong with their sales is usually tied to a shortcoming in their personal approach to their business. But people don't want to hear that. And they certainly don't want to change. They just want a magic wand that will make their sales go up.

After discovering and refining a silver bullet system called The Customer Factory, I thought I had found a way around human nature. But, after seeing even its sure-fire, time-tested approach rejected by entrepreneurs who desperately needed help growing sales, I realized there are some problems which are beyond the power of modern science to cure.

I've boiled down all of the errors of omission (the things you didn't do but should have) and errors of commission (the things you knew you shouldn't do but did anyway) that I've seen hundreds of entrepreneurs - including myself -commit over the past 30 years into what I call:

The Seven Deadly Sins of Small Business Marketing

1. Ignorance: They just flat didn't know how to market their business.

2. Sloth: They weren't willing to take the time necessary to study the subject and put in the hard work required to create, refine and work a systematic approach.

3. Fear: They were afraid of change, afraid of failure - or success, were too shy to introduce themselves to new people, were afraid of rejection, competition, the stigma of being seen as too promotional - or worst of all - as a salesman! Often they were just afraid of making promises to prospective customers that they didn't think their team could deliver on.

4. Risk Aversion: This is a nice way of saying that they simply weren't willing to invest the required amount of money.

5. Inconsistency: They wouldn't stick with a program - even if it was working!

6. Pride: They were too prideful to ask a peer or expert for help or to ask prospective customers for the sale.

7. Greed: Once they found something that did work, they killed the Golden Goose by trying to squeeze their marketing partners or changing their best sales rep's commission plan because he was "making too much money."

Just so you don't think I'm any more of a pompous ass than I am, let me repeat: I have been guilty of all of these sins myself on innumerable occasions throughout my career.

The only thing I can say in my own defense is that, no matter how I struggled, I always tried to learn from my mistakes and have committed myself to being a lifelong student of business, marketing and sales.

In my next post I'm going to outline what I've learned about marketing from successful entrepreneurs in what I call: The Seven Virtues of the Enlightened Entrepreneur.

The Seven Virtues of the Enlightened Marketeer

2005-11-16T07:19:00.000-05:00

Just as I have seen many small business owners allow their behavior to stunt their companies' growth, I have also known a number of entrepreneurs whose mindsets have created enormous success. Their belief systems distill down into what I call:

The Seven Virtues of the Enlightened Marketeer

1. Personal Growth: As smart and successful as these people are, they are humble enough to recognize their shortcomings and realize that the only way to improve over time is through a lifelong commitment to learning. As a result, they never stop asking questions, attending seminars, role-modeling after other successful people and reading everything they can get their hands on.

2. Fearlessness: Everyone experiences fear, uncertainty and doubt (FUD), but the Enlightened Marketeer never lets the knot in their stomach stop them from trying or doing what they feel is right. They know that, even if they "fail," they will learn lessons that will help them succeed the next time.

3. Generosity: Successful small business owners cast their bread upon the water and know that the value will be returned to them many times over. They treat their partners, vendors, employees, salespeople and customers with respect, and deliver overwhelming value - even if they might not make a profit on that one deal.

4. Industriousness: You will never find a successful small business person who is not a hard worker. Because they believe in and enjoy what they do, the hours they spend hardly resemble what most people think of as "work," and their unspoken example is followed by everyone they touch.

5. Commitment: The Enlightened Marketeer is in it for the long haul - never giving up before giving an idea or program every opportunity to succeed. They develop marketing programs which they intend to work and improve over time. You will see them doing the same things - only better - for many years.

6. Abundance Mentality: Your glass must be half-full or your life will never be fulfilled. Enlightened Marketeers never dwell too long on a rejected proposal or lost customer because they see their world as full of business and the next great opportunity as just around the corner.

7. Calculated Risk Engagement: Successful small business owners understand the risk-reward relationship and know that marketing requires financial resources as much as production or payroll. They are not risk-averse, but they hedge their bets by following the example of successful people who have gone before them and they carefully track the results of their marketing investments to increase their returns over time.

All of us display some combination of the Seven Deadly Sins of Small Business Marketing and The Seven Virtues of The Enlightened Entrepreneur. The goal should be to recognize yourself in each and always be striving to move from the former to the latter.

Google: Get On Board or Get Out of The Way!

2005-11-18T06:05:00.000-05:00

Could it be possible that Google is one of the most-reported business stories of the past few years, yet most don't really know what the company is doing? Yes. Yes, it could.

What Google is up to, in short, is the complete disruption of every industry it lays its hand to.

And no matter what field your company is in, you will soon be affected by, if not flat-out competing with, Google.

Google is using their huge war chest of cash to hire thousands of the smartest people on the planet and buy resources (like nationwide cords of "dark" fibre optic cable) and companies to provide services at no charge which had previously been lucrative profit centers for other companies - or entire industries. The effect is astounding.

Once Google Mail started offering 1 gigabyte of free storage, Yahoo and Hotmail (and countless smaller firms) could no longer charge for their "premium" offerings that provided far less space.

Google Analytics now offers a free web site traffic tracking service which is easily the equal of WebTrends or ClickTracks - services which charge hundreds of dollars per year.

Google is moving to offer free wireless Internet access in San Francisco, a tactic which will cost the local telecom firms tens of millions in lost annual revenue.

But don't think their moves are limited to "digital" industries. Wal-Mart is frightened of the impact of their customers being able to scan product bar codes with their cell phones which then connect to a Google database to tell them where the same could be purchased for less.

Madison Avenue and the media giants are getting their butts kicked as billions of advertising dollars are moving from broadcast and print media to the web.

Real estate brokers and agents will soon see themselves competing with a Google service that combines Google Earth and Google Maps with MLS listings to provide the best searchable database of homes ever seen by buyers.

The lesson for small business owners: No matter what your industry, you need to either get your firm in alignment with Google and its mission of providing free information and digital services to the world, or get the heck out of the way. If they're not already in your neighborhood, they will be. Soon.

Greasing The Wheels Of Industry

2005-11-21T06:22:00.000-05:00

I was first introduced to the concept of small business in 1972 when my mother opened a copy shop in our home town. She knew nothing about running a business or the printing industry. She just thought it would be a good idea to have a store that "sold copies." Being that this was right about the same time Kinko's was founded (though she had never heard of them) I'd say she was right.

We immediately ran into the financial realities of starting a small business: paying for storefront space, renting copy machines, paying for supplies and service, doing advertising, etc. - all before doing a single dollar's worth of sales - much less putting any money in our pockets.

For those of you considering starting a business just a scant 33 years later, things are quite a bit easier - and cheaper.

I would venture to say that never have there been fewer barriers to entry for the aspiring entrepreneur. You can start an online business selling anything you can imagine in your spare time with virtually no start-up cost and market your wares to the entire world 24/7 without dropping a dime on payroll. You can also advertise for next to nothing and sometimes not even pay for your marketing effort until after someone buys from you. Yes, things have changed.

Whether you sell yard sale treasures on eBay or create a specialized bookstore from Amazon or enter into any one of thousands of other affiliate relationships with companies who will happily ding your customers credit cards and ship product, you have little to fear in terms of any possible "business failure." Didn't work? No problem. It's not like you're going to lose your house. Just move on to the next product idea.

On the other hand, when you prove online that something does work (as Brad Fallon did with MyWeddingFavors.com) you can build it into a multi-million dollar enterprise complete with office and warehouse space and scores of worker bees.

Things are better from a buyer's perspective too: it has never been easier to find what you want, purchase it and have it delivered directly to your home. Fewer trips to the mall or the grocery store. No need to get dressed or put your face on.

In essence, the ability to buy and sell goods on the Internet has had the effect of reducing what economists call "transaction costs," minimizing friction between buyers and sellers as they negotiate their quid pro quo and exchange money for goods and services. This increase in transactional efficiency is great for buyers but puts the squeeze on "less efficient" sellers whose past success had relied on specialized knowledge or exclusive access to certain suppliers.

The lesson for small business owners: Avoid fixed costs, overhead and payroll until you have proven your model will work - online. Keep trying and testing until you find something that will work for you and then build it to whatever size fits your lifestyle.

Small Biz TV Ads On The Net

2005-11-23T13:53:00.000-05:00

Communicating with video on the Internet has always seemed like a no-brainer to me. Luckily, technology and bandwidth now allow all us no-brainers to run ads on the web.

I can't remember the first time I posted a video file online but I have several relatively recent samples available for viewing at: http://www.thecustomerfactory.com/gallery/video.html. One of these is a "video brochure" I produced for a catering company which is also available via a link on his homepage at: http://www.FlavorsCatering.com.

Recent advances in Flash video compression and delivery, along with the success of video offerings on iTunes, mean that many small businesses should be considering adding online TV commercials to their marketing mix.

An R-rated version can be found at http://www.TheKidFromBrooklyn.com and tools for creating and posting your own spots on the web can be found at: http://www.InternetVideoGuy.com And what about running a 24/7 QVC-like infomercial on the web? Check out: http://www.BuyCostumes.tv.

The lesson for small business: If a picture paints a thousand words, imagine what moving pictures with sound can do to tell your story on the Internet. Video technology is cheap and editing is easy to learn. Give it a shot! What do you have to lose?

The Six Disciplines of Small Business

2005-11-25T12:42:00.000-05:00

This blog centers around what I believe are the six dicsiplines every small business owner must - to one degree or another - understand and master in order to succeed. In this post I list them in what I believe is their relative order of importance and quickly define what each means to me.

I'll be writing in more detail on each of the six disciplines later. This posting is long enough as it is!

1. What Do You Want From Life?
Also known by the acronym WDYWFL - pronounced Waddy-Waffle!

It is critically important that your business objectives be in alignment with what makes you happy. We have all known people who have achieved financial success but been miserable in their personal lives, often because the demands of their business life forced them to almost abandon their family life. Don't let this happen to you.

Another aspect of this discipline involves creating a business which will not require you to do things on a daily basis which you find personally distasteful. For example, if you are a poor manager or communicator - or just don't play well with others - you need to stay away from businesses which require significant staffing. If you hate sales or "being too self-promotional" you definitely don't want to get into a business which requires you to pitch yourself to strangers on a daily basis (though this might indicate that you shouldn't be in business for yourself no matter what).

2. Marketing
The Five Ps Plus Sales

I place Marketing right behind Waddy-Waffle in order of importance because it has come to my attention over the past 30+ years that if you can't get anyone to buy what you're selling then nothing else matters.

The Five Ps of Marketing are: Product - What is it that we're selling? What's great about it? What problems does it solve or benefits does it produce and for whom?; Placement - How does this product relate to its competition? Where can it be found? How do people perceive it?; Price - How much are we selling it for? How sensitive will demand be to changes in price? Is this a commodity or a luxury good?; Packaging - Does it come individually wrapped or in the family value size, or both? Does our package help sell our product or is it just protective? Could we sell more candy bars if we dropped the weight by one ounce?; Promotion - Everything you normally think of when you hear the word Marketing: Advertising, public relations, special offers, etc.

Even though Sales is really part of the fifth P (Promotion) I give it its own category because, in my opinion and based on my experience, Sales is a world unto itself.

3. Finance
Having enough capital to get started and sufficient cash flow to keep going.

Some people might say that Finance should at least be number two on the list - maybe even number one! After all, how can you possibly be in business with no money?

It's a good question. First I would say that if you don't know what you want from life or how running your own business would help, then you shouldn't be in business at all. I feel the same way regarding a person's inability to aritculate their value proposition on paper or in person. And, I have seen people's ability to sell allow them to create their own start-up capital from pre-orders and vendor financing.

One of my favorite sayings is that "Profit is a matter of opinion but cash flow is a matter of fact." You need to have money - real money, hard money - to start your business, and more money to keep it going, and that's a fact.

Borrowing start-up money from banks, friends and family, investors or venture capitalists is a slippery business. They all have this funny attitude about wanting to get paid back! My recommendation is to determine how much money you need to start your business and get it to the point where it is more than breaking even, then figure out how long it will take you to save that amount. If it's your hard-earned money you'll be much more careful with it and won't have to share your success with others when it comes.

4. Production
Delivering The Goods

If you have mastered the discipline of Marketing and have created demand for your product, your next step is getting the product to those who demand it. No amount of marketing can make the second sale to a customer who had a bad first purchase.

Production includes dealing with vendors, bringing together whatever factors of production are required such as machinery, operators, raw materials, packaging, etc. You also have know how to get the goods delivered in a timely manner. I know many stories of printing jobs, for example, which required incredible effort and resources to be produced, but never made it to the customer on time and so were worthless.

5. Management
Hiring, Firing, Motivating and Communicating

You may be surprised that I put this discipline so far down the list but the fact is that I have seen scores of small business owners who were terrible managers succeed in spite of themselves. Another reason I place such a low priority on it may be because I know it is not one of my strong points personally.

You should think twice before hiring anyone and should never even place an ad in the paper until you have created a written job description including specific duties, expectations, frequency and method of evaluation of performance, etc. If you're not clear on what that person will do or how their efforts will benefit your company you have no business offering them a job.

6. Administration
Books, Bills, Forms and Filings

It's a sad fact that small business ownership involves a lot of paperwork. From creating your corporation or LLC to getting your business license and FEIN to filing reports to every state, local and federal agency on a weekly, monthly, quarterly and annual basis, entrepreneurship requires a lot of administration.

Many entrepreneurs are inherently poor at this type of tedious detail work and keep a legion of bookkeepers and accountants permanently employed. Though this discipline is very important to keeping yourself out of dutch with Uncle Sam, I place it at the bottom of the list because it isn't inherently critical to your success.

The lesson for entrepreneurs: List these six disciplines on a sheet of paper and give yourself an honest A-F grade on each one. You need to master them all, so any which you received a C or less on - go get some help, either in the form of education or a vendor or consultant who can do the work for you.

What Do You Want From Life?

2005-11-29T07:30:00.000-05:00

In my previous posting I listed the Six Disciplines of Small Business Mastery, the first and most important of which is What Do You Want From Life?

This is a deep, existential question that most of us avoid - often because we're afraid of learning the answer. But, if you are planning on creating a business that will fulfill your personal, financial, familial and even spiritual objectives, you have to first define those objectives.

Going from the ephemeral to the quantifiable, let's start with how much money you want to make. I like starting with money because it represents a hard number we can all put our arms around and often everything else quickly becomes clearer once we put a stake in the ground here.

In starting your own business, are you simply looking to replace your current income as a salaried employee or are you hoping to create enormous wealth for yourself? I've always worked with a nice round number like $100,000 per year or $20,000 per month. I like these because they give me specific targets I can measure my performance against on a daily, weekly and monthly basis.

Once you've decided how much money you need to make, choosing a business to pursue becomes a little easier. You might want to open a little gift shop on the corner but you'll never make $20,000 a month there. Narrow down your choices to just those things than can fulfill your financial goals within the next five years.

Next, are you planning on starting a growth business or a lifestyle business? Your average storefront or franchise is a lifestyle business where you are tied directly and physically to the premises and workflow on a daily basis and so can't take long vacations or open multiple locations. A growth business is one where you have a new idea or a unique take on an existing industry and plan to grow it locally, regionally nationally or even worldwide. Here you may work 100 hours per week for 3 years in the hope of selling out for millions or eventually going public.

In either case, it's important to start from the end and consider how and for how much you might sell your business in the future. Are you building up equity or have you simply purchased yourself a job that will expire when you turn out the lights? These are tough, but important questions.

Finally, what do you really want to be doing on a daily basis? If you know of a line of work that fascinates and fulfills you, it won't seem like work at all. On the other hand, if you buy a franchise doing something you've never done before and it turns out you hate it, life is going to suck. And it will continue to suck until you find another sucker to take your place.

The lesson for entrepreneurs: Don't even THINK about starting a small business before you have answered the questions above. They aren't easy, but they are essential to building a business that will support the life you want for yourself and your family.

Marketing is a Mystery and Sales is a Dirty Word

2005-12-03T10:53:00.000-05:00

How do you take someone from "Never heard of you," to "Here's my check"? Systematically.

Unfortunately, most small businesses have no specific approach to marketing - systematic or otherwise. To them Marketing is a mystery and Sales is a dirty word. Not only do they not understand the process, they don't like it! And don't want to be associated with anything that even smells of "self-promotion."

If we're not talking about your business, this might make for an interesting philosophical conversation: Why would someone invest thousands of dollars and all of their valuable time into something they didn't know how to promote? How could they be so good at the nuts-and-bolts of their business, and so willing to outsource accounting and other functions that they're not as good at, but completely ignore or avoid the most important success factor of every business?

Two reasons: Fear and Ignorance.

In my book on the sales profession I outline five reasons why people avoid sales as a career. All five boil down to fear, including the fear of talking to strangers, the fear of rejection and the fear of being labeled a "salesman." An additional problem for entrepreneurs is that they are often ignorant of even the most basic marketing principles and so avoid trying anything that might make them look foolish if it doesn't work.

These are legitimate concerns, but they must be overcome if an entrepreneur is to succeed. If you think your business can launch and grow without a complete and consistent answer to the question "How are we going to sell this stuff?" you are mistaken.

The lesson for entrepreneurs: Learn all you can about marketing and sales and proceed confidently. If somebody tells you "you sound like a salesman," tell them "Thank you very much!"

The Real Estate Career Store

2005-12-15T08:22:00.000-05:00

I haven't been posting anything for a number of days because I've been spending just about every waking minute of my "vacation" working on a unique eCommerce site called The Real Estate Career Store.

Targeted at real estate agents and brokers, The Real Estate Career Store offers a variety of home-study courses on audio CD, DVD and multimedia data CD. After meeting the folks at RealNet Learning Services and seeing the quality of their products, I was excited to have the opportunity to work with them to bring this online resources to their tens of thousands of live seminar students as well as the 2 million or so other real estate professionals in the U.S. and Canada.

If you or someone you know is looking for ways to increase their earnings in the real estate biz in 2006, I hope you'll direct them to stop by the site, register for our free e-newsletter and test their "buyer agent" knowledge.

Zen Selling

2005-12-17T06:16:00.000-05:00

In my book on the sales profession, The Greatest Job You Never Thought Of, I listed five reasons why I believe most people avoid sales as a career path.

Each is a fear the person holds, such as fear of rejection or fear of talking to strangers.

One of the biggest roadblocks is the fear of being labeled "A Salesman." It needn't be.

It's true that salesmen are perceived as pushy people who talk too much and don't care a whit for the needs or desires of their customers. They just want to "sell" something so they can stuff more cash in their pockets.

There are salesmen (and women) who deserve this perception, though with each passing year fewer and fewer are able to make a living because of the increasing sophistication of the buying public. For the most part, that approach just doesn't work anymore.

If that's the case, what's a salesman to do? If you can't push someone into making a buying decision, how are you going to sell anything?

Zen Selling

You never push. You don't have to.

You only communicate - in person - with people who have been qualified as having a genuine need for your valuable offering. These people already have a general idea of the value of your solution (through consistent marketing or advertising messages) and have asked to learn more.

You don't talk, you listen; asking questions to understand your prospect's unique needs.

You don't spit out a pitch full of features, functions, benefits. Confident in the depth of your product knowledge - and your offering's ability to successfully solve your tightly-targeted market's problem - you calmly explain how you can help and how alternative courses of action would not yield the same outcome.

If the prospect chooses not to select your offering, you thank them for their time, learn what you can from the experience and calmly move on to the next qualified pre-qualified appointment, confident that this "no" just got you closer to your next "yes."

If the prospect does choose to become your customer, you make sure that the expectations you created for them about your offering are fulfilled, creating so much satisfaction and confidence on their part that they happily send repeat and referral business your way.

At the end of the purchasing process, your prospect is truly glad that they chose to speak with you about their problem, and chose your offering as the correct solution.

The lesson for entrepreneurs: Selling is not something you do TO someone, it's something you do FOR someone: connecting their need with your solution.

Zen Sellers understand that they bring benefit to everyone they meet and are always happy to bring the good news to anyone qualified to hear it.

And those who do it best, persuading the fish to jump into the boat, are richly rewarded - not in the hereafter but right here during!

Live long and prosper Grasshopper.

Internet TV

2005-12-20T06:59:00.000-05:00

It seems as though the hottest topic in Internet marketing today is video.

VIDEO - VIDEO -VIDEO!

My God! You mean we can watch moving pictures with synchronized sound on a glowing glass tube?

What will they think of next - wireless video?

Oh yeah, that's called Television and it's been around since the 1920s. (Thank you, Grayson Mattingly)

Sorry for the sarcasm. It's just that I've been producing video since the early 1980s and posting it on the Internet for nearly 10 years. If you click on the link at the top of this posting you will see that my most recent Internet video posting was over three years ago.

As has often been the case in my career, I was too far out in front of the curve on this one. Today the pervasiveness of high-bandwidth Internet connections and the Flash plug-in make delivery of video online a much easier proposition than it was "back in the day."

Even the production of video has gotten easier with faster computers, more RAM, bigger hard drives and drag-and-drop video editing software like iMovie and Sony's Movie Studio. My first video projects were edited on 3/4" tape cartridges and even a 2" open reel of videotape. Editing consoles were huge and expensive and each successive copy of the tape caused generational loss of quality. Today's desktop non-linear systems are not only vastly less expensive and easier to use but produce a superior final product.

Sadly, one part of video will never get easier: creating watchable content. The hard work of writing a script, thinking through your shots, lighting, sound capture, memorizing scripts, finding people who can perform, creating edits that make sense and don't jar the viewer, laying down sound effects and music, etc., etc. just refuses to go away.

Sure, you can create a down-and-dirty video that ignore all those tenets. The new Google video store is full of examples. The problem is no one wants to watch that drivel.

Occassionally a breakthrough piece like "The Internet Is Gay" appears where no production values are necessary to create an enjoyable viewing experience. But that is the exception rather than the rule.

The lesson for entrepreneurs: If you want to present video on the Internet which is designed to inform, entertain or persuade (to buy!) you need to learn the fundamentals.

I recommend you visit your local cable access channel and take their courses on directing, lighting, field production - whatever you can. The courses are cheap and the knowledge will pay big dividends in your online TV channel.

Lights, camera, ACTION!

The Marketing Mindset

2006-01-15T13:38:00.000-05:00

I never cease to be surprised and disappointed by business owners who avoid the whole topic of marketing.

At a recent business meeting I attended, six owners of a franchised financial services company sat around the table discussing issues of common interest: production, marketplace conditions, human resources challenges, etc.

They spoke excitedly, engaging with each other on topics that clearly were important and interesting to them.

But when a topic regarding business development was raised, the room went silent. Even though every person in the room could personally profit from the plan being outlined, none were interested in discussing it.

The exact reason why is shrouded in mystery but I can tell you that I have seen similar behavior at other companies many times over the years. When it comes to sales and marketing, most business people just don't want to talk about it.

Common reasons include ignorance, disdain for anything "sales" oriented, a desire not to ask stupid questions and so forth. But I truly believe the biggest reason why they don't want to talk about it is because they just don't care. They just want to handle the nuts and bolts of their businesses and leave revenue increases to divine providence.

This lack of what I call a Marketing Mindset is prevalant throughout most small businesses. In my 30+ years I have seen little change on this front and so anticipate that little ever will.

The lesson to entrepreneurs: Get yourself into the Marketing Mindset. Study everything you can about marketing and sales. Role-model after companies in your industry who excel in these areas. Nothing can have a more beneficial and immediate impact on your business than increased sales. Get with the program!

Book Reviews: Grinding It Out & Behind The Arches

2006-02-16T10:54:00.000-05:00

Have you ever looked at your business like a franchise?

In other words, have you considered what it would take to replicate everything you do in such a way that complete strangers could operate an exact copy of your firm in a distant city with only a few weeks training and an operations manual?

If you haven't, maybe you should. It's an instructive exercise, one recommended by Michael Gerber in The E Myth which will be reviewed in a separate posting.

One man who took this exercise to its logical extreme was Ray Kroc, who saw the success the McDonald brothers were having with their small hamburger stand in San Bernadino, California and dreamed of duplicating it across the country and around the world.

The story of how Kroc happened upon the McDonalds and how McDonald's grew into a global business over the ensuing decades is chronicled from two different perspectives in two great books, both of which I highly recommend you read.

Grinding It Out is Ray Kroc's autobiography. In it he talks about his childhood and his background selling paper cups for 17 years (yikes!) before acquiring the rights to market a machine called the Multi-Mixer which could produce 5 milkshakes simultaneously. When he received an order for four Multi-Mixers to be delivered to a single small restaurant (who needs to make 20 milshakes at once?), he decided he'd better take a closer look for himself - maybe he could help his other customers sell more milkshakes and himself sell more Multi-Mixers.

The throngs of people lining up to buy hamburgers, french fries and sodas from a single window through the front wall of the store at noon that day changed his plans completely. He no longer wanted to sell Multi-Mixers, he wanted to sell McDonald's restaurants. The rest, as they say, is history.

While Grinding It Out is a lightly romanticized telling of the famous McDonald's story from Kroc's perspective, McDonalds Behind The Arches takes a more dispassionate approach to the tale and offers a more even-handed description of Kroc, warts and all. The stories of disputes with franchisees and the problems Kroc had with the McDonald brothers are told from an outsider's perspective. Interestingly though, both books tell most of the stories the same way - just in different voices and, in the case of Behind The Arches, in much greater detail.

I loved both of these books and recommend you read the shorter Grinding It Out first. Pardon the pun but when you finish that one you'll be hungry for much more information on how a single restaurant was transformed into the biggest food service business in the world. At that point, McDonald's Behind The Arches will really hit the spot.

Eating Crow on Internet Video

2006-03-11T16:55:00.000-05:00

Late last year I posted an artilce to Radio Free Enterprise about what I perceived as the hype surrounding video on the Internet.

I noted how I had been creating video for over 20 years and had been posting it online for so long that the MOST RECENT of my video postings was over 3 years old.

The premise of my post was "What's the big deal? This is not news!"

I was wrong.

What makes the "new" world of online video different is the variety of free distribution channels available and the possibility that hundreds, thousands or even millions of people can and will view your creation on YouTube, Google Video or any of the scores of other online video aggregation sites.

These sites will convert your video to a common format (usually Flash), post it on their site, let you use their servers and their Internet bandwidth, make it available via search engines, and even offer code allowing complete strangers to post your video on their sites - still using the server power and bandwidth of the video aggregator.

The power of this model to transform both entertainment and marketing is profound. YouTube is only 18 months old but already claims to display over 100 million videos per month. That's a lot of eyeballs.

But that's not all: Google and other online advertising media are testing and rolling out video ads which can be placed by small business advertisers in place of text ads on search result pages. While it will take time to find what works best in this new medium, the potential exists for companies of any size to present "television commercials" directly to people who have the most interest in learning about their offering.

I hearby eat crow and promise to keep a close eye on developments in this area - reporting back as I see great ways that business owners are putting the new medium to use.

Stay tuned!

Opening of the BioAccelerator in Springfield, Virginia

2006-04-25T15:27:00.000-04:00

Thanks to the wonders of Google Video I am now able to bring this video I produced in January 2003 to the whole world.

Enjoy, Frank

Stranger, In The House

2006-04-25T15:38:00.000-04:00

What the heck?

While I'm going crazy posting video I've produced in the past to Google Video and then placing it on my blog, why not include this little "home horror movie?"

Enjoy, Frank

Flavors Catering Online Video Brochure

2006-05-25T15:31:00.000-04:00

This video, along with the text from its script, are now posted on Google Video and are receiving hits from scores of people looking for catering services in the greater Washington, DC area.

Imagine what this concept could do for your company!

Enjoy, Frank

The Launch of The Customer Factory

2006-06-30T14:39:00.000-04:00

After two wonderful years helping Monarch Title create a top-rated radio show - and grow from two to eight locations - I'm returning to private practice as a business author, speaker and consultant.

The name of my new company, The Customer Factory, speaks to a conclusion I have reached after 33 years running and helping small companies: Consistently high levels of sales are not achieved accidentally, but systematically.

Every successful business owner I have met has a clear marketing and sales plan, and they work that plan consistently to achieve their goals. I call these strategies Customer Factories and I have seen them pumping out profits in companies of every description nationwide.

The Mystery of Marketing is much like the Mystery of The Pyramids. You don't need help from extraterrestrials, only a clear plan, commitment to investing the necessary resources, and a willingness to perform simple tasks again and again to achieve incredible results.

I'll create the plan. Are you ready to do the rest? Call me at 703-401-3170 to find out.

What Is A Customer Factory?

2006-07-02T10:58:00.000-04:00

As I mentioned in my previous post, my 30+ years of entrepreneurial experience have lead me to the conclusion that the companies who succeed most rapidly are those that take a systematic approach to sales and marketing.

I call those systematic marketing programs Customer Factories and the mission of my new company is to show all business owners how to build Customer Factories of their own which will produce dependable, growing sales results for years to come.

The Customer Factory is not a new marketing technique. It is simply a new way of looking at existing successful marketing programs by employing a well-known model: an assembly-line factory.

Since most business owners are confused by marketing (Marketing is a Mystery and Sales is a Dirty Word) I thought it would be useful to distill the whole process down to what I call:

Four Simple Steps To Lasting Business Success
1. Design Your Customer
2. Pick Your Production Process (Your Marketing Assembly Line)
3. Tool It Up
4. Turn It On

In subsequent postings I will explain each of these steps in further detail. In the meantime, be thinking about the most successful companies in your industry and the marketing techniques they are employing. I think you'll see their entire plan come into clear focus as you learn more about The Customer Factory model.