When you are applying for a grant, loan, etc., you will be required to provide financial statements (income statement, balance sheet, cash flow).  An area that can be problematic is providing expense data (since the business is not yet off the ground).  Performance Plus provides you with an accurate cost structure of similar businesses in your industry. You can also analyze expenses based on different revenue levels and thus project how your cost structure may change as your business grows.  Existing companies have the option of entering their business data (revenue, expenses, assets, liabilities, etc.) which can then be used to benchmark their company against industry averages.  This can help them identify areas in which their business deviates from the industry (e.g. not spending enough on advertising).

Another powerful free tool that should not be overlooked!

I was very impressed with the mentor.  He seemed very eager to help the young man succeed.  I thought to myself that he is exactly the kind of person I am looking for in a mentor.  I wondered if he would be willing to take on a similar mentoring role with me.  I read the article again to see if it mentioned his contact information.  It didn’t.  All I had was his name and where he worked (BDC).  I then went on the BDC website to search for his name.  Nothing either.  I could start calling each BDC branch one at a time, but it would be time consuming. Besides, I wouldn’t know what to say to him.  Personally, I’m a big fan of email.  I like getting a conversation going through email first before a face to face meeting.  It allows the exchange of basic information.  There is also less pressure on both sides and it is less intrusive (I find it annoying when I receive a call from someone, who wasn’t referred to me by somone I know, asking to meet me…it doesn’t seem natural).  If the email exchange goes well, I then suggest a meeting in person.

The problem here was that I couldn’t find the gentleman’s email address anywhere.  I then had a great idea…a real ‘long shot’.  Anyone with a corporate email address will notice that  it usually follows one of several patterns:  lastname.firstname@company.com, firstname@company.com, “x”lastname@company.com (where ‘x’ is the first letter of the first name), etc.  What I decided to do was to send an email to all these different email combinations, hoping at least one of them would hit.  I kept the email very simple.  I talked briefly about my startup and the progress I made so far.  I also included a link to my website, in case he was interested in learning more about me.  Here is the email I sent:

Like I mentioned, this was a long shot.  The odds of reaching this person was small and the odds he would reply even smaller.  However, within a few days, the gentleman replied.  Not only was he willing to answer my questions, he insisted we meet in person the following week.  Our meeting went extremely well.  Pending some administrative stuff, we will start our mentoring partenership shortly.  This just goes to show that every once in a while, we need to take long shots in life (whether in our personal or professional lives).  It’s only our fear of rejection that is keeping us from taking these risks.

Why not just pick up the phone and ask to speak with the president of a big company to explain why your product or service can make his or her life easier?  Don’t think it will work?  It worked for a friend of mine who has his own business planning software company.  A few years ago, he called up the then President and CEO of Corel, Michael Cowpland.  He didn’t know Mr. Cowpland in person so he called the general number and talked to the receptionist.  Amazingly, there were very few barriers and within a few minutes, he was speaking directly to Mr. Cowpland himself.  He introduced himself and explained how including his software alongside Corel Wordperfect could make Corel’s product offering more competitive and help differentiate if from MS Office.  Mr. Cowpland asked him to visit his office that same afternoon.  My friend then met with Mr. Cowpland, along with senior members of his product development team.  Shortly thereafter, he won a licensing contract to include a copy of his business planning software with Corel Wordperfect.

Take long shots every once in a while (i.e. huge potential payoff, little chance of success but zero downside).  You’d be surprised at how a seemingly crazy idea may end up being one of the greatest decisions you’ve ever made.  Someone once told me that when you take risks, things happen.  You disrupt the status quo and set things in motion.  You create ripples in otherwise calm waters. Yet, one of those ripples can potentially transform itself into a powerful wave.  It’s true that the odds are not in your favor.  But then again, what have you got to lose?

Operating a business in Quebec means sometimes having to write documents in both English and French.  Since most people are usually native speakers in only one language (in my case, English), writing in their second language can sometimes be problematic.  I usually have friends double check my French documents (e.g. emails) before sending them out.  However, this whole review process can be time consuming.

Enter a new feature from Google Docs.  At the click of a button, you can translate your text into your choice of 42 languages.  All have to do is select the text in your Google document, click ‘Translate Document’ and then select your language.

I haven’t tried all 42 languages, but I can definitely vouch for the English to French and French to English translators. I remember how not too long ago, the quality of online translators was extremely poor, sometimes even comical.  Since then, however, there has been some major improvements.

I still wouldn’t rely on this tool as my sole translator.  In other words, it is still necessary for a native speaker to proofread the translation.  However, it is much better than starting a translation from scratch. From my experience, It also reduces the time needed for proofreading by at least 50%.

A thumbs up once again to Google for thinking of another cool way to make our lives easier.

Every company needs a strong UVP.  Benefits include greater differentiation from competitors, an increase in the quantity and quality of leads, and greater market share.  Once again, remember to include tangible results in your UVP.  Statements like “the most technologically advanced system in the market” and “best in its class” don’t mean much in today’s world.  Every other company uses a similar statement and there is no way of knowing who is telling the truth and who isn’t. Ask yourself:  “What makes me different from everyone else?”, “What need am I satisfying for my target market that others have not addressed?”  You can also ask your existing clients.  Their perspectives on why they do business with you might point you in the right direction.  The following is an example of a great value proposition:

“Our company is the exclusive provider of patent-pending project management software for paving contractors, saving U.S. contractors over $34M in 2005.”

The statement is specific.  It sets the company apart (exclusive provider, patent-pending software) and it demonstrates tangible results ($34M in savings in 2005).  It answers the questions who, what, and why all in one sentence.  Here are a few other good ones:

“Tectronica offers solutions that will improve productivity by 22%.”

“Our clients are able to reduce staff by 18% and maintain productivity levels.  In most cases, their productivity actually increases.”

“Our clients have experienced pay back periods of just nine months when investing in our technology.”

I attended a great workshop at YES Montreal a few months back on negotiation, an important skill for a small business owner.  It’s a skill we can put it to use in many different situations from our dealings with suppliers and customers to exchanges with our employees.

A key part of the negotiation process is preparation and the side that is best prepared normally has the upper hand.  This includes having a clear list of your objectives and the areas that you are willing to compromise.  It also means researching your adversary, their objectives and the underlying rationale.  The more information you have, the better.  The icing on the cake is to anticipate potential areas of disagreement and having alternative solutions ready.

A key concept introduced in the workshop was the concept of “Wish, Want, Walk”.  Before any negotiation, have these 3 things ready.  The ‘wish’ is your dream goal or result.  The ‘want’ is where you think the negotiation will end based on external market forces.  This is where a majority of negotiations are closed.  The ‘walk’ is the point at which it is better for you to leave the table.  In other words, you are losing too much money, pride, status, etc. and are simply not worth it.

It is important to frame an offer before actually making one.  By framing, I mean creating a positive atmosphere and building attraction towards the offer.  It can be viewed as the momentum building phase that leads to the offer.  An example from daily life is the rousing speech given by a presenter just before the big comedian, singer, etc. comes on stage.

Contrary to what most people think, your first offer should be well above your ‘wish’ point.  For example, if your dream result is to sell your company for $1 million, your first offer should be well above this point (e.g. $1.5 or $2 million).  Studies have shown that when one side throws out a number that is higher or lower than expected, the other party has a tendency to move their opening position closer to the opening offer.

Never make the first offer if you are unprepared.  You may be setting yourself up for a big loss.  Conversely, your opponent might call your bluff and ask you for your rationale, which will reveal your inexperience and lack of preparation.  The most advantageous situation is to make the first offer (above ‘wish’ point) and being prepared at the same time.  After you make your first offer, it is important not to say anything.  You already framed your offer and elaborated your points.  There is no further need to justify yourself.  It’s now up to the other side to make the next move.  This also applies for any counter offer you make.

As you progress through the negotiation process, don’t forget your ‘wish, want, walk’ list.  As well, be sure to really listen to what the other side has to say.  If things heat up, you can always leave the negotiation table and take a break.   When things cool down, you can resume talks.  A key thing to remember is that you should never get emotional or take things personally.  Negotiation is an everyday process and you should view it as such.  Furthermore, if you are well prepared, an offer you consider outrageous or ridiculous will be very easy to ‘deconstruct’.

Secondly, the negotiation process will go a lot smoother if parties adopt a ‘win win’ attitude.  It is always better when both parties leave the negotiation table content with the settlement.  They may not have won on every point, but they don’t feel cheated.  An exception to this is when one party has a clear need for the deal.  Naturally, the ‘needy’ side will have to compromise a lot more than the ‘less needy’ side.  For example, in the recent $4.75 billion purchase of NB Power by Hydro Quebec, many people were shocked at the thought of giving up energy sovereignty to an outside province.  However, the ‘needy side’, in this case, NB Power, had been crippled by financial debt and was a financial disaster in the making for many years. One side clearly needed the deal to be done.  The process described in this post is more applicable when two parties are on more ‘equal terms’.

Keep all these principles in mind the next time you are negotiating with a supplier for lower prices or an employee wanting a big raise.  It will increase your chances of success and make the overall process a lot less stressful.

In the area of entrepreneurship, I often seek out advice from people with more experience than me.  Naturally, I give their opinions a lot of weight since being a new entrepreneur, I can’t really counter their advice with experiences of my own.  A dilemma arose when I found that I was receiving conflicting advice from my ‘circle of experts’.

The topic of controversy was sales strategies.  I wanted to know the best ways to generate sales for a new  business.  The first expert told me to use the direct mail and cold calling methods.  “Sales are a pretty much a numbers game”, I was told.  “You make X number of calls from which you can expect to book X number of appointments, leading to the final result: X number of contracts.  Typically the conversion rate is around 10%, which can vary depending on the industry, the quality of the leads, etc.”  I was eager to apply this new knowledge but doubts began to surface when I spoke to the next expert.  “Forget direct mail and cold calling”, I was told.  “They simply don’t work.  Most people will throw it out your expensive brochure without even looking at it.  The key is to develop relationships with your prospects, which takes time.  In the end, they don’t care about the product being sold. The most important thing is the person behind the product.”

By the time I met with the third expert, a marketing expert, I was outright confused.  “Think of something that sets your company apart.  Then, think of ways to communicate that.  If your company provides an ‘edge’ in language training, then you must find ways to communicate that (e.g. through seminars, newsletters, etc.).  Once you do that, sales will naturally increase.”  What I had on my plate was three different sets of advice from three equally qualified people.  Who do I listen to?

After several days of confusion, what I realized was this:  there’s no fixed formula for generating sales.  Each of these experts had their distinct likes and dislikes.  One could argue for hours whether one strategy is better than the next, but since each person was successful with their approach, nothing would be settled.  At the end of the day, we should do what gets us results.  We can experiment with different strategies and then pick and choose our favourites.  The key is to generate sales and to do it consistently.

A broader lesson in all this is that even as new entrepreneurs, we should think critically about the advice we receive.  What I’m realizing more and more is that in many cases, there is no right or wrong answer.  As a small business owner, one has to develop the ability to think critically about the problems and accept responsibility for the final decision.  If  we depend too much on the opinion of ‘experts’, we run the risk of confusion.  In a certain sense, we also no longer accept responsibility for the final decision.  If the consequences turn out to be negative, we can always blame the ‘experts’ and their ‘flawed advice’.

Consulting with ‘experts’ is always a good thing.  But take it for what it is:  a consultation.  Listen carefully to the advice being given but the final decision is for you and you alone to make.  If it ends up being the right decision, pat yourself on the back.  If not, learn from the experience and move on.  Often times, there’s no right or wrong answer.  It all depends…

Keeping costs down in the first year or two of operations is crucial for any new start up.  Since new businesses typically have small revenue streams, they need to stay lean, especially in the first year or two of operations.  This is why having a ‘virtual office’ can go a long way in keeping administration costs down.  What do I mean by a virtual office?  It means essentially outsourcing all functions of an office from the phone number to the civic address to where you hold your business meetings.

Lets start with your business office.  In the beginning, most new startups operate their businesses from home.  It saves money and there are also numerous tax advantages (e.g expensing a portion of the monthly mortgage).   The problem with having a home office is that it is not very professional to meet potential clients in your living room or at your kitchen table.  Furthermore, for privacy reasons, not everyone is comfortable putting their civic address on their business card.  You can also imagine a client’s surprise after deciding to ‘drop by’ your office and finding themselves on a residential street filled with detached homes.

Enter companies like ExecuSpace and Global PrimeOffice Network.  The creative people behind these companies created a profitable business model by renting office space and conference rooms by the hour ($20 and $25 respectively at ExecuSpace).  They also ’sell’ business addresses in prime locations that you can use instead of your civic address.  At ExecuSpace for example, for $50 per month, you can put their business address (prime office space located in downtown Montreal) as your own business address.  They will keep all your mail for you and you can pick it up any time between regular business hours (9am to 5pm).  An add-on service would be to sign up for personalized telephone answering where a professional secretary can answer basic questions and forward calls to your business number (involves the monthly charge as well as  signing up for a regular business line).

Note:  An even cheaper alternative to a business address is to go to your nearest Canada Post office and sign up for a P.O. Box.  For $16 a month ($47 every three months), you can have your own P.O. Box and receive all your business related mail.

Now that a professional business location is taken care of, lets look at telephone service.  You can always use your house phone or cell phone to receive business calls.  However, what if your child answers the phone at home?  What if a personal friend calls your cellphone and the first thing they hear is is “XYZ Inc., John speaking. How may I help you?”.  There are clearly some disadvantages to mixing your personal life with your professional life.  Lets look at the alternative.  A basic business line with a carrier like Bell or Videotron will cost you at least $70 per month (doesn’t include long distance plan).  This is manageable, but what if I told you that there was a way to get your own business number and unlimited local and long distance calls anywhere in Canada and the US for about $10 per month?

Some of you may have heard of Skype In, a feature of Skype that allows users to get a local number and receive the call online on your Skype account. The problem is that in Canada, this service is not available.  There is a way to get around this restriction.  JetNumbers is an international company that provides local numbers to users for a low rate of $5.95 per month.  It works like any normal number except that when people call the number, the call is automatically forwarded to your Skype account.  As I mentioned, most owners of a new businesses usually work from home so this feature can be very convenient.  If you are away from your computer, you can send JetNumber a professionally sounding personal greeting that they can add to your voicemail.  If that’s not enough, all new voicemails are recorded and sent automatically to an email address of your choice in wav format.  Too good to be true?  Wait, there’s more…

Skype has a long distance plan where you can make unlimited calls to the Canada and & US for $2.95 a month.  I’ve already used this service, and the quality is excellent.  So lets do the math.  When you sign up for this plan in addition to JetNumbers, you have unlimited incoming calls to your business number and unlimited outgoing calls to Canada and the US for less than $10 per month.  Now that’s a deal!

Obviously, when you start generating revenues on a consistent basis, you can opt for a regular office with its own business line, etc.  In the mean time, consider using some of the services above.  Don’t forget that being a startup does not excuse you from having a poor professional image.  For a new business with no established brand in the marketplace, this can be a crucial factor.  Don’t hurt your chances of securing a new client by having a meeting at your kitchen table or having your 5 year old answer the phone call of a prospect.  You can stay lean while having a professional image at the same time.

I’ve missed more than 9,000 shots in my career.  I’ve lost almost 300 games.  Twenty six times, I’ve been trusted to take the game winning shot and missed.  I have failed over and over again in my life.  And that is why I succeed.

- Unknown

I ran into a friend of mine a few weeks back.  The last time we had talked, he was still finishing up his PhD program in Political Science. As he explained, since our last discussion, he had grown tired of academic life.  He put his doctorate on hold and wanted to get some real work experience.  The tricky part was finding a related job in his field.  Teaching jobs were hard to come by and the current recession definitely didn’t make things easier.

With his bills piling up over the months, he did the one thing that he thought would bring in cash while giving him good leads for future teaching positions:  he became a cleaner at a college where he planned to one day teach.  It was an unusual job search method to the say the least.  However, he was already making progress.  He had apparently already met some big names in the college including the dean of the school, who was slightly confused when he found himself having an academic discussion with the same guy who empties his trash in the evening.

This encounter reminded me of what many entrepreneurs have to go through before seeing light at the end of the tunnel.  Take Mark Cuban for example, the billionaire technology entrepreneur who is now the owner of an NBA franchise, the Dallas Mavericks.  He left his first job after college not too long after he started (the boss did not appreciate his initiatives).  He then shared a 3 bedroom house with 5 of his friends for a few years while working at a computer sales company.  He was eventually fired for refusing to vacuum the place after a long shift.  His first taste of real success came after he launched a computer company with a former client more than 7 years later.

There’s no question that our society tends to glamorize success.  However, we often do it to the point where we completely forget (rather ignore) what the person had to go through before reaching his or her destination.  And more than likely, they were successful not because they were necessarily the brightest star in the field.  Rather, it was because they had a vision and were willing to endure everything along the way to realize it.  They were able to constantly re-adapt to changing circumstances and re-shape their original idea until they found the magical formula that worked.   Successful entrepreneurs are not flawless creatures by any means.  But one thing that new entrepreneurs should learn from these people is that the beginning is never easy.  One has to persevere and learn from the many setbacks along the way.

Perseverance is not something they teach in school.  You can have the greatest business plan in the world, but once you actually start your business and the roof over your head depends on the monthly revenues, it’s a whole new ball game.  So this post goes out to my friend, the PhD candidate who is carefully planning his next move while taking out the trash.  It also goes out to the countless people out there brave enough to let go of the daily comforts in order to pursue their passion or an exciting new opportunity.

By the way, the quote at the beginning of the post was not exactly by an unknown.  It’s by Michael Jordan, arguably the greatest basketball player in history.  If someone like him never had the luxury of avoiding setbacks, neither should the rest of us.

It uses an extremely creative way to market itself to prospective clients:  its free BizLaunch seminars.  Several times a month, in various cities around the country, it offers workshops on issues of importance to entrepreneurs.   These workshops are given on the premises of one of their partners.  For example, next month in Montreal, at the Staples Business Depot in Marché Centrale, the company is offering a free workshop with valuable tax tips for small businesses on how to save money.  I should also mention that it’s beneficial for their partner (in this case, Business Depot), which gains from the exposure  to future potential clients (entrepreneurs will need office supplies and equipment when they launch their business

I’ve had the chance to attend several of the seminars and and they are great learning as well as networking opportunities.  Although the workshops are free, the company gains from the trust and recognition they gain from all those who attend.  The idea of spending valuable start-up money on consulting fees is something that would have made me grimace just a few months back.  However, having good mentors is crucial, especially for first time entrepreneurs who have the drive, but lack the experience and wisdom that can only be acquired with time.

The market is full of companies selling products and services to entrepreneurs.  Kudos to Biz Launch (as well as its partners)  for employing a creative and effective way to differentiate itself from the pack.

Check out their site for more information on upcoming seminars as well as the services they offer to entrepreneurs.  Be sure to also check out their blog, another great source of useful information.