Why would I seek venture capital for my company? If you are experiencing or expecting rapid growth, you may need financing that exceeds your personal resources and is more than you can borrow from traditional lending institutions.

What does it cost? It’s not unusual for a VC firm to target a return of five times their initial investment over the expected life of their investment. They make most of this money when they sell their investment, and they like an “exit strategy” that materializes within 3 – 7 years.

Would my company be attractive to venture capitalists? VC’s look for:
- product or service that is unique and has high growth potential –
- product or service that is “scalable” in that revenues can be quickly expanded
- management team that is “coachable”
- product or service has been proven as a concept and there is a market.

How would I choose a venture capital partner? Look for those with experience in your industry, have contacts that could help you, etc. Remember that the VC will  likely have a presence on your Board. Be sure that you’ll work well together and that they will be in a position to add value. You should also check on the reputation of the VC.

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With Google Voice, there is no software to load or hardware to purchase and no new telephone equipment is required.  Voice calls are never sent through your computer so you don’t have to wear headphones. You simply use the normal telephone(s) you already have. 

You just sign-up online with Google and select a telephone number to use.  I had many local numbers to choose from and picked one that is easy to remember.  Some people might prefer to select a non-local number like the West Coast.

Once your new Google account is established, you place outgoing phone calls by using a computer for just a few seconds to open a web browser, navigate to http://www.google.com/voice/, click on CALL and then specify the phone number you wish to call.  You do this by simply clicking on a name or number in your personal directory or by entering the phone number manually. Google then calls your personal telephone or from whatever telephone you specify.

When you answer, Google Voice immediately calls the other telephone number you specified and connects the two lines together.  When the party you are calling answers you start talking in the same manner as you would using any regular telephone.  Now, the computer isn’t being used any more.  In fact, you could even turn the computer off while talking.  It’s that simple.

 Google Voice includes free outgoing calls, free voice mail online, and can transcribe your voicemail to text, free call forwarding, free call recording, free three-way conferencing, free call screening, free call blocking of unwanted callers, free texting, and more.  For incoming calls, your single Google phone number can be set to ring any or all of your phones simultaneously on up to 5 different phone numbers (home phone, office phone, cell phone, Skype phone, and any other phones you want to specify).  This would allow you to answer wherever you are in the country without the caller having to hunt you down.

 If you do not answer your phone, the call goes to voice mail and is recorded, and then a computer-generated transcription of the message, along with an MP3 recording of the same message, is sent to your email address.  You can both read it and hear it when you check your e-mails.

You have an Inbox with your Google account that shows your voice mails and call history.  You can add notes to the transcribed messages.  You can even return calls, and text callers or send your recorded voice mail messages to others by e-mail directly from the Inbox.

With Google Voice you can select your phone number for any part of the country.  So, for example, if you maintain two residences you can select a local phone number for the area where most of your friends and relatives live so they can make local calls to contact you.  You would still use that same number to make free outgoing calls no matter where you are located.

This is truly an amazing free phone service.  And, it is free.

From Chris Cane, SCORE member:

I have been using Google Voice as a Blackberry application for a year or more and it allows me to make calls to Europe and Israel very inexpensively from my cell phone. I used to have Verizon, and their rates to Canada were ridiculous so I even used Google Voice on my Blackberry to call Canada for free.

 Thanks to Paul Holzschuher for this material.

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1. Contact information including company name, address, phone and fax numbers, e-mail address and web site.
2. Marketing information such as: “Bonded and Insured”,“Work Guaranteed”, “Fully Covered by Workman’s Compensation, etc.
3. Proposal Number
4. Proposal submitted to: Name and address of Client
5. Detailed description of goods and services to be supplied:
   –Include any special conditions such as services to provided by the client (water, power, access, etc…)
   –Who will obtain and provide licenses and permits.
   –When the work will be performed and its duration.
   –Specify cleanup to be provided and equipment to be removed
   –Other…
6. Pricing and payment terms
7. List any specific items that are excluded.
8. The level of client support/participation to be provided.
9. Statement that any changes/additions to the specific items listed are subject to a negotiated price change.
10. Name, title and signature of proposer, including date of proposal.
11. Term for which the proposal remains valid (10, 30, 60 days)
12. Sgnature of buyer and date of acceptance
13. Any notices of the right of the seller or buyer to cancel the proposal or agreement (such as: the buyer’s property becomes unavailable (fire, flood, destruction, etc..)

The original of the signed agreement is retained by the Seller and a signed copy is given to the buyer.

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Step 2: Get out  and study your competitors . Visit  locations where their product is offered. Analyze the location, customer volumes, traffic patterns, hours of operation, busy periods, prices, quality of their goods and services, product or services offered, promotional techniques, positioning and  handouts. If feasible, talk to customers and  staff. You may want to contact a similar business in another city.

Step 3: Use your research to estimate your sales on a monthly basis for your first year. The basis for your sales forecast can be the average monthly sales of a similar-sized competitor’s operations operating in a similar market. Make adjustments for this year’s predicted trend for the industry. Be sure to reduce your figures by about 50% a month for the start-up months. Consider how well your competition satisfies the needs of potential customers in your  area. Determine how you fit into this picture and what niche you plan to fill. Will you offer a better location, convenience, a better price, later hours, better quality, better service? Consider population and economic growth in your  area. Using your research, make an educated guess at market growth over time and your market share. If possible, determine the number of customers you need to reach your sales goals..

Ask SCORE for help. In Cincinnati phone (513) 684-2812.

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In a recent marketing workshop I attended, I discovered that most business owners rely on just two or three marketing strategies to attract new business. However, there is a multitude of ways to drive new business to your door. Here are a few:

Networking. Networking is perhaps the most commonly used approach by small business owners. However, it is often poorly executed. Many people attend a networking function and take the wrong approach by trying to meet as many people as they can. They bounce from person to person, handing out business cards like it is an Olympic event and they are vying for the gold medal. They fail to realize that the most effective way to network is to cultivate relationships and give referrals to other members first.

Referrals. This marketing strategy places a close second in preferred methods of generating new business leads. The key here is to ensure that you take a proactive approach rather than a passive one. Instead of assuming that a satisfied client will refer someone to you, ask for that referral. Tell people who your ideal client is and ask for their help in finding these types of clients. The real estate agent who represented the seller when we bought our house sends us a card every year and reminds us that she loves referrals. It is not pushy, does not sound like she’s begging, and I’m confident it helps generate new leads.

Writing. This often under-utilized marketing strategy is an excellent way to become recognized as an industry expert. Every industry has trade magazines and most are hungry for good content. The Internet is also filled with websites and e-zines looking for material to send to their subscribers and customers. I now write at least one article every month and send it to more than two hundred publications. This marketing strategy alone has helped drive more traffic to my website more than anything else. It is sometimes challenging to come up with ideas and to write an 800 word article but the investment of time and effort is definitely worth it.

Newsletters. This is another powerful marketing strategy to keep your name in front of your customers and prospects. Provide key insight into business challenges and offer solutions to them. In other words, help your prospects and customers solve problems. Some newsletters are nothing more than advertising so be sure to provide valuable information to your customer. Although it is less expensive to send a newsletter electronically, you can issue it in paper format. A local real estate agent regularly sends out a one-page update of the housing market in our neighborhood. (More: Newsletters Are Smart Marketing.)

Cold calling. Without a doubt, this is usually the most challenging way to market a business – I know very few people who actually enjoy cold calling. However, it can be a good way to uncover qualified prospects in a relatively short period of time. Be sure to start your conversation with a good opening to capture the other person’s attention. (See 10 Cold Calling Tips.)

Give free information. At the marketing workshop I attended, the facilitator suggested giving information to interested prospects. Using this marketing strategy on my website, I have quadrupled the number of subscribers to my newsletter in the last year. You do not need to give away all the information relevant to your product or service. Instead, offer information that will help your target market with their problems. For example, when people sign up to my e-zine, they receive a report that outlines 100 tips they can use to increase their sales.

Offer a guarantee. A concern many people have when changing suppliers is the risk associated with the change. They may not be completely satisfied with their existing supplier but the risk of choosing a supplier who may be worse can prevent them from changing. Eliminate this concern and offer a guarantee.

Advertising. This can be a great marketing strategy if you know how to create a good ad. The best marketers know that great sales copy is what makes the difference; I have experienced this first-hand. When I began selling my book on my website, I generated mediocre results for the first two years. I eventually changed the copy on my site and sales have soared every since. Glance through the ads in your trade magazine and you will quickly notice that most ads focus on the company’s product features instead of on the customer’s problem. Create a great ad by concentrating on the problem you can solve.

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2)    Always give the customer/client a choice of two different product/services, either one of which is fine with you. Otherwise their decision is between yes and no.

3)      Always be closing with small trial closes.

4)      The Take-a-way…”Probably not right for you, even if most of your competitors are benefiting from it. No, there may be something else…”

5)     The Ben Franklin close…List the benefits on the left and the objections on the right…Obviously you will help them think of the benefits but not the objections.

6)      The Assumptive Close…Assume at all times that they are going to buy, answer all their questions, start “processing” the order, watch for buying signals and ask how many they want.

7)      Get agreement…ask a series of questions that that evoke a positive response. It is hard to say no after agreeing with everything.

8)      Get a commitment…”Oh, price is the problem? If I could get an additional 10% off for you, would you go ahead with it? Great, initial here and I will see what I can do for you”.

9)      Agree with their objection…”You are right. I felt that way as did many of our customers. However, When they compared the true value…”

10)   “Forgive me, I have failed. I know that you are not going to buy today. So, please help me. Where did I go wrong? If I had done my job, you would be as happy as all our other customers…So, if it wasn’t for the color, you would have bought today…So you are saying that if I could get that color in here tomorrow…”

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By Jeff McKinney – jmckinney@enquirer.com

Before Karla Lalosh opened A Salon Named Desire, she needed guidance to become an entrepreneur.

Lalosh and her partners knew how to provide professional beauty-care services like cutting, styling and coloring hair, but lacked some fundamentals to run a business.

The trio found their solution by working with Bob Wiwi and Linda Ulrey, volunteer counselors for SCORE, counselors to small businesses, in Cincinnati. Wiwi and Ulrey worked with the partners for six months before they opened their shop in Pleasant Ridge in January 2008 as the recession started taking hold.

Among other things, the partners were taught how to make money and use their sales to properly cover payroll, buy products and pay utilities.

Lalosh of Pleasant Ridge owns the shop with Madeira residents Samantha Carter and Julie Duggins. The partners used their savings and got $50,000 in private funding to open their business.

“We probably would not have opened without their direction,” Lalosh says.

A Salon Named Desire and other local firms have relied on SCORE in recent years to help them start up, survive and overcome the recession.

The Cincinnati chapter includes 87 retired and working executives who provide free advice to help businesses open or expand in Southwest Ohio, Northern Kentucky and southeast Indiana.

In 2009, the chapter assisted more than 1,600 new clients, says Tom Moon, the chapter’s chairman. It provided 4,000 sessions to local entrepreneurs in person or online last year.

Based on U.S. Small Business Administration studies, it’s estimated that Cincinnati SCORE services last year helped create 230 jobs and more than 180 new small businesses.

“In the current economy, the assistance provided by SCORE is more important than ever,” Moon

says.

For Jim Mullaney, CEO and president of Edoc Marketing, a Fairfield-based business marketing firm

that started in 1997, SCORE’s assistance was vital.

Mullaney says SCORE counselor Ralph Lowenstein offered input to help cut the firm’s expenses.

Those actions included reducing the salaries of the firm’s two highest paid employees by 30 percent and getting the company’s two largest vendors to cut their fees for services.

Mullaney says sales in 2009 were $602,000, down 5 percent from $632,000 the prior year. But “acting in a timely manner allowed us to break even profit-wise,” he says.

This year Mullaney expects to have record sales and profits from doing more business with existing

clients. He expects sales this year to top $1 million.

“We expect to be debt free and have a very strong balance sheet this year,” Mullaney says.

Mullaney, who has worked with Lowenstein for 10 years, advises potential entrepreneurs to contact SCORE very early in their business start-ups for “intervention and direction.”

SCORE’s assistance made the difference for Berrece Andrews, who sought the volunteers’ help 18 months ago after launching NextLevel Vacations in 2005.

An African-American-owned firm, NextLevel Vacations of Mason is a wholesale vacation supply firm that buys vacation trips from resort networks in the Caribbean and sells them to customers. Andrews, a Procter & Gamble retiree, says he and his SCORE counselor Bill Haman determined that the company should serve multiple segments of the population instead of just focusing on consumers.

Today, the company also markets to travel agents, event planners, charity fund raisers and business incentive and award programs.

Andrews says sales in 2009 dropped about 30 percent from 2008 as travelers chose domestic vacations over international ones. Were it not for his diverse clientele, Andrews is sure his sales would have dropped even more.

“Identifying my market was critical because it helped diversify my sales,” he says.

Andrews expects sales this year to improve slightly from last year as people continue to take vacations and the economic recovery continues.

“As people get more discretionarily income, we’re hopeful that will result in more business for us,” he says.

“What SCORE does is allow you to play bigger sooner than what you may have planned.”

Salon’s Website: http://www.asalonnameddesire.com/

Original Article: http://news.cincinnati.com/article/20100709/BIZ01/7100325/SCORE-adds-up-to-business-start-up-success

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2 Analyze Your Competition – List your competitors, and then list each competitor’s strengths and weak­nesses. Shop your competition to see what they offer customers.

3 Describe Your Market – As precisely as possible, de­scribe your primary market — the type of customer who can bring you the most reward. Describe a few secondary markets — other markets you’d like to service. If your market is other businesses, think of the industries, sectors, channels, and sizes in your base.

4 List Your Marketing Objectives – You should be as specific as possible about your marketing objectives.

5 Create an Action Plan – It’s time to meet your ob­jectives. Keeping your target market in mind, how will you allocate your marketing? Consider the pros and cons of promoting yourself through various market­ing channels like print, radio, and television ads; a website; collateral material such as brochures; direct mail; trade shows; press releases; networking groups; e-mails; and more. What do you want to achieve with each method you select? Develop an affordable strategy and create a time­table for each step.

6 Create a Budget – You have a plan, now you need to fund it. What will it cost to do research, create materials, purchase ad space, or develop a website? If your budget is insufficient, you’ll need to determine if more funds are warranted or if you should change your mix. As a rule of thumb, you should consider set­ting aside about two percent of your gross sales from the previous year

7 Measure Your Progress – Set aside time to periodically evaluate the success of your marketing campaigns and make ad­justments to your plan if necessary. Review your plan quarterly. Focus on fine-tuning your best efforts, and discontinue or adjust strategies that have not succeeded.

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West Chester, Liberty Township lead Cincinnati-Dayton area in SCORE Small Business Counseling

The recession may have encouraged more Type As to declare themselves entrepreneurs.

Small business owners from West Chester and Liberty Township led the pack last year in the number of entrepreneurs seeking free counseling from the Cincinnati chapter of SCORE, an agency of the U.S. Small Business Administration (SBA).

“We get more clients from West Chester and Liberty Townships than any other district geographic area,” said Tom Moon, Cincinnati SCORE chapter 34 chairman. “We need more counselors in those areas.”

The West Chester Chamber Alliance hosted the annual joint meeting of the Cincinnati and Dayton SCORE chapters on June 18. Joe Hinson, president of the West Chester Chamber Alliance, welcomed the 50 SCORE counselors in attendance and thanked them for their efforts on behalf of small business growth in the area.

The joint meeting is in its fourth year, and is a time for the Cincinnati and Dayton chapters to share information and ideas to expand the national nonprofit’s efforts to connect experienced executives with entrepreneurs.

SCORE’s volunteer counselors provide free individual mentoring to business owners in the areas of business management, finance and marketing. Low-cost seminars, group mentoring, and online Webinars are offered as part of the agency’s programs. Both startups and established small business owners can be SCORE clients.

Since SCORE’s West Chester branch office opened in 2005, counselors have conducted more than 400 consultations, according to local SCORE statistics.

Both online and face-to-face attendance at Cincinnati SCORE seminars have doubled from 2009. Dayton’s SCORE chapter representative and outgoing district director Arnold Sandness reported that attendance at its workshops and cyber-counseling sessions are up 36 percent over last year.

In other business, West Chester resident Mary Jane Good was introduced as incoming southern Ohio district director. She will begin her term October 1, 2010. Steve Linham of Newark, Ohio will be assistant director.

Drew Dinkelacker, president of Teakwood Marketing of Cincinnati, presented a marketing workshop for counselors titled, “Five Hidden Marketing Flaws That Cost You Money.” His firm provides marketing services to business owners.

“Business owners have a unique combination of vision and blindness,” he said. “They see the potential of their businesses, but are often blinded to the obstacles.”

The Greater Cincinnati SCORE chapter serves southwest Ohio, Northern Kentucky and southeast Indiana. In 2005, it was recognized as national chapter of the year out of 389 chapters nationwide, and was a runner-up in both 2006 and 2007. The Dayton chapter was similarly recognized in the recent past and was featured on national television last year.

SCORE headquarters is located at 525 Vine St. in downtown Cincinnati, with satellite offices in West Chester, Lebanon, Fairfield and Lawrenceburg, Ind.

During 2009, the Greater Cincinnati SCORE chapter assisted over 1,600 new clients. Based on SBA studies, it is estimated that Cincinnati SCORE services for that period created approximately 230 new jobs and helped create over 180 new small businesses.

For more information about SCORE workshops, individual and team counseling, go to www.scoreworks.org or call the SCORE office at (513) 684-2812.

The original article can be found on the Cincinnati.com website:
See  http://local.cincinnati.com/share/news/story.aspx?sid=168070&cid=100050

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 Reference: Business on Main

Do you make more money selling cookies or cupcakes? Who’s more important to your business: the big customer who ties up half your workforce, or the dozen smaller customers who occupy the other half?

Knowing which of your products or services generates the biggest profit margins is critical to building a sustainable business. It helps you determine where you should focus your resources for future growth, and where you should be trying hardest to cut costs or raise prices. Yet surprising numbers of small-business owners overlook this fundamental exercise.

“Too many business owners think in terms of sales and revenues, and not the bottom line,” says Joellen Sommer, a certified public accountant whose New York City-based consulting firm, Your Own CFO, provides clients with on-call, part-time or interim chief financial officers. “They really don’t know what the cost is to produce a certain product, or at least not the all-in cost. If they provide a service, very few track the true cost of their employees who deliver it.”

Sommer recalls working with a firm in the advertising industry that was shocked to discover that its largest client was actually costing the company money. When it came time to rebid the business, her customer let the client go rather than try to hold its prices, then redirected its energy to finding new clients.

Engineer and entrepreneur Robert Sherwood had a similar epiphany several years ago. After a long and successful career in Silicon Valley in which he grew one of his startups to $100 million in revenues in just three years, Sherwood returned to his home state of Kansas and launched SmartText Corp., a small company that sells legal forms and business documents via the internet.

For years, Sherwood assumed that his highest-priced products generated his biggest profit margins. After all, once he’d developed a large and complex document, it cost nothing more to deliver over the internet than one of his simpler forms. What he failed to consider were post-sale costs. It turned out that customers spending $150 on a document were a lot more demanding than customers shelling out $10. When they had trouble figuring out how to download a purchase or save it to a hard drive, they were much more likely to call his company for help.

Sherwood tried beefing up the “frequently asked questions” page on his website and offering alternative delivery methods, such as file transfer protocol, to ease the burden, but to no avail. Finally, he began to position his lower-cost but higher-margin products more prominently on his website. That led to lower revenues as his average selling price fell, but higher profits as customer service calls went down. On sales of about $1 million annually, profits rose by nearly $150,000.

Crunching the numbers
The simplest way to measure the profitability of a product or service is by its gross margin: the sales price less the direct material and labor costs to produce it, divided by the sales price. If, for example, your $25 widgets cost $20 to produce, your profit margin is 20 percent.

For many companies, however, that is only a starting point. The gross margin calculation does not include overhead expenses like rent or equipment costs, or even selling expenses. The more of those costs you factor in–especially where they vary significantly from product to product or service to service–the more accurate a picture you’ll get of your true profit margin.

Using the data
Once you’ve calculated profit margins for your various products or services, you’ll need to decide what to do with the information. In simple terms, you might do one of three things with low-margin elements of your business: cut production costs, raise prices, or, if neither is possible, discontinue offering the product or service. The real world is more complex. Fast-food chains might enjoy their biggest profit margins on french fries and soft drinks, for example, but they’re not about to stop selling cheeseburgers. Most businesses need to offer a well-rounded menu of products and services to attract and retain customers. But there is still much you can do.

Consider the experience of FHI Heat Inc., a Solon, Ohio-based producer of flatirons, blow-dryers and other hair-care products. After joining the company in 2008, CFO Michael Paull began a rigorous analysis of its profit margins by product, product line, distribution channel and customer. Using the results of that analysis, the company has seized opportunities to pair low- and high-margin products together in offers that create higher-blended profit margins while also boosting sales (think of fast-food value meals). It has also negotiated price breaks from vendors where possible, and in some cases raised its selling prices–even at the cost of losing a few low-margin customers. Over the past two years, Paull says, the effort has helped the company double its profit margins.

Are you ready to take a closer look at which goods and services generate your best profits? Here are four tips:

1. Verify the integrity of your data. Unless you have a good handle on your true cost inputs, you can’t hope to calculate profit margins accurately.
2. Share your findings with other decision makers in your organization who can impact what it costs to produce your goods or services and what you charge.
3. Consider the indirect consequences of any changes you make. Just because one product has lower profit margins than another doesn’t necessarily mean it should be dumped. Different products and price points appeal to different customers. And in sufficient volume, low-margin products can generate more profits than high-margin products that are moving slowly.
4. Make margin analysis an ongoing discipline. Your product offerings, costs and pricing power are constantly shifting. Depending upon the nature of your business, consider monitoring margins on a quarterly or monthly basis.

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