Failure is a part of life, especially for entrepreneurs. Most new businesses fail within the first few years, and even if your business is one that survives that harsh initial trial, you’ll experience plenty of smaller failures along the way.
Seasoned entrepreneurs know that no single failure could ever be enough to compromise the success of a dedicated mind. Instead, failures are merely temporary obstacles in a long journey. They are experiences to be learned from, and mistakes that improve our abilities.
1. Neglecting a portion of your research
Research is going to form the foundation of your expectations, plans and goals. Market research, competitive research and pricing research are just some of the in-depth forms of research you’ll perform – and they all have vulnerabilities.
Whether you misjudge the strength of a potential market sector or completely neglect a factor in your initial research, that failure is going to affect your business negatively.
Fortunately, even the most egregious research mistakes can be corrected through re-evaluation and subsequent adjustment.
2. Missing an important deadline
Many deadlines are arbitrary, but there are some that can’t be missed. For example, if your investors are expecting your technology to launch by a certain date, or if your clients depend on you hitting a certain production volume, a missed deadline could mean the collapse of an entire segment of your business.
When you miss a deadline, and inevitably, you will, don’t dwell on the failure. Determine what went wrong, make up for what you can, and correct your procedures to prevent it from happening again.
3. Losing an opportunity
Whether it’s a major client leaving due to unmet expectations or a major PR opportunity that slipped past you, at some point you’re going to lose a major opportunity, and it’s going to feel terrible. Depending on how you’ve structured your business, the loss could be relatively minor, or devastating.
If you’re going to recover in the short term, you’ll need to look for a replacement to serve as a bandage for the wound. If you’re going to recover in the long term, you’ll need to diversify your opportunity pool with more clients or a wider outlook to hedge your bets against such a loss.
4. Hiring the wrong person
Finding good help is difficult, and eventually you’re going to hire someone who isn’t a good fit for your organization. A lack of productivity, motivation or the presence of a negative attitude could ruin what would otherwise be an outstanding working relationship.
Don’t let negative employees compromise your workforce – acknowledge your failure in hiring them, and either correct the problem or move on.
5. Forgetting or overlooking a key disruption
It might be an old competitor who has a greater reputation than you expected, or a new technology that’s making waves in ways you hadn’t anticipated. When disruptors in your industry start to make their moves, it’s easy to lose ground quickly.
No matter how prepared you are or how much you try to anticipate the patterns of the future, there will always be something to confound your expectations and interrupt your business flow.
All you can do is mitigate the immediate consequences and implement new strategies to accommodate your new challenges.
Before creating the now wildly successful brand of wearable cameras – GoPro, Nick Woodman failed in great style with two online start-ups.
“I mean nobody likes to fail, but the worst thing was I lost my investors’ money and these were people that believed in this young guy that was passionate about this idea… you start to question: are my ideas really good?” Woodman says.
6. Mismanaging your operations
There are hundreds of ways that your operating process can go wrong. You could have a flawed sales flow, an inefficient production schedule, an unsupervised segment of operations or just a bad model, and you might not realize it until it’s too late.
At some point throughout your career, you’ll look back and realise how much ground you’ve lost because of a critical failure in your plan for operations.
Take heart that there is always time to turn things around – look for opportunities to make positive changes, and make those changes a priority.
7. Missing your financial projections
There are two big reasons for missing your financial projections: overestimating the amount of sales and revenue your company was going to bring in, or underperforming compared to your goals. Either one can leave you with a sense of dread and a fear for the future of the business.
Keep in mind that projections are only projections, and as long as you’re stable enough to keep moving forward, you’ll have more chances to adjust your expectations and improve your company’s performance.
Don’t ever let failure hold you back. Some of the most successful companies in the world, including Microsoft, Apple and Virgin Group, were founded and guided by entrepreneurs who encountered a crushing failure and kept working hard to achieve their dreams.
Learn from your mistakes, lead without regrets and keep moving forward toward your ultimate goals.
This article was originally posted here on Entrepreneur.com.
6 Hacks For Getting Clients To Pay You Faster
Almost everybody pays eventually but almost nobody pays sooner than they have to. That’s a problem.
Getting your clients to pay you on time is a real hassle. After a sale, it is easy to think you did your job and just relax. Nothing is set in stone until the payment is final.
Not getting your payment on time can be detrimental to your company. This is especially so if you need or were expecting that money to come within a certain timeframe. It is frustrating, and there is a fine line because often you are working with people who could be recurring, valuable customers.
Therefore, it is critical to you find ways to get paid on time. Here are seven hacks to avoid the hassle and get paid faster:
1. Set payment expectations early and give gentle reminders
From the onset, ensure that your clients know what their cost and payment schedule look like. You do not want to give them any reason for confusion or an excuse not to pay on time. Make it crystal clear when they need to pay by and how much they will need to pay. It will properly set their expectations to avoid surprises.
Offering gentle reminders about an upcoming payment can continue to keep their expectations in check. They might not be prepared to pay if they signed their contract three months ago and forgot that their payment date was tomorrow. Instead, put the pieces in place to ensure, with total certainty, that they know how much they will owe and when they will owe it.
Poor communication also sets a poor standard with your clients. It will give them the message that they can receive your services without having to pay on time. It is hard to change this precedent. Therefore, being consistent and straightforward from the very beginning will help you keep these payments coming.
2. Follow up
Do not hesitate to follow up after sending the invoice. Your clients are busy. They likely overlooked a payment if they did not make it. You can send friendly reminders to pay after a few days have gone by. No one minds a gentle follow-up as it demonstrates your ability to act professionally. I built my calendar app for this very reason. Follow up frequently till they pay.
Streamline the payment process as much as possible. There are some awesome tools to help collect payments today. The less time it takes your customers to make the payment, the faster you will get paid and the less hassle you will deal with. It is worth the upfront investment to set up the right systems in order to get faster results.
When possible, take the payment upfront, too. This way there will not even be an issue of getting them to pay. Today, people are more comfortable paying for a service before they see its full value in. Take advantage of that.
3. Offer small incentives for quick payment
Offering incentives for quick payments will speed up the process and build customer loyalty. Customers know they are going to have to pay at some point. If they know that making the payment immediately will give them an additional benefit, then they will often do so.
You can even form these incentives around your product or services. It could be sending company stickers, access to an additional feature, or a free week of service. This will reward them for paying on time and give them further reason to continue coming back.
4. Send the invoice to the right person
At larger companies, it is crucial that you send the invoice to the right person. When your clients are originally agreeing to pay, make sure they know how that payment will take place. It takes two minutes to discuss who will be making the payment, and it will save you significant stress on the back end.
5. Establish personal connections with clients
You might not always have the bandwidth to do this, but getting to know your clients will give you a much easier route to payment collection. In the case that someone has not paid, you will feel more comfortable asking them. It is easier to send a quick reminder to someone that you know than it is when you feel like you have to be more formal. Personal connections with your clients will ensure you get your money faster.
6. Think about the little things
There are a variety of small factors that add up to improve the speed in which you receive payments. Think about the time of day that you are sending the invoices out, the styling of the invoices and the actual content within them.
You can streamline the process with a clean and concise invoice. Make it visually appealing and include descriptions of what they are paying for. The process will slow down if you make mistakes. Instead, take the extra time to make sure that everything looks as it should.
This article was originally posted here on Entrepreneur.com.
Why Bartering Can Be Your Untapped Revenue Source
More organisations are experimenting with cash-free solutions. Here’s how bartering may drive the future of B2B commerce.
Many small- to medium-size business owners have begun to barter, trade and swap goods and services without any cash involved.
Take the city of Portland for example. Unsurprisingly, the culturally tight-knit and self-proclaimed weird city has given rise to a thriving underground bartering network. A recent Rolling Stone article showcased the colorful personalities and supportive business community that is Portland’s bartering economy. Some of them call themselves “swappers,” others simply identify as community-oriented business owners. All of them share a common bond of exchanging goods and services to help each other grow.
The trouble with traditional bartering like this is that it’s incredibly difficult to scale. The idea of a coffee shop exchanging beans for fresh food from a local grower is nice, but any business looking to expand can’t possibly expect that kind of barter to lead to scalable growth.
That’s what gave Bob Bagga, CEO and founder of BizX, the idea to create a community that enables businesses to turn their excess capacity into potential capital. Bagga explains:
“By using the BizX dollar, businesses are able to turn extra business capacity and assets into cash flow, which can, in turn, be spent at member businesses without any cash involved. The goal for us is to reduce waste, maximise member potential and help companies earn new customers.”
By creating a complementary currency to power commerce through the sharing of excess goods and services, Bagga and his team have given business owners a chance to create cash-free lines of capital for little more than their incremental cost of goods sold.
Most business owners have plenty of great ideas to grow, but lack the capital and cash resources needed for those growth initiatives. Take a restauranteur, for example. Expanding or upgrading the restaurant may be their desired path for generating increased revenue, but the cash required for such an undertaking might not be readily available.
What if that same restaurateur was able to exchange empty seats and excess food for a shared currency that they could then spend at other businesses in the network? While trading one meal with a contractor might not result in enough capital to exchange in return for a major overhaul, many units over time will eventually add up.
That’s precisely why business owners are looking for alternatives to traditional financing and venture capital raising. Those models, though effective, often edge out small- to medium-size businesses in favour of rapid growth SaaS companies or user-heavy business models.
As a result, businesses looking at growing should explore growth opportunities that require little to no upfront investment.
The future of B2B commerce
B2B companies often operate at less than their full potential. Bagga pointed out that small businesses in the United States, on average, only run at 80 percent capacity. In many cases, this is simply because connecting with new customers presents a real challenge.
Also, most B2B companies have excess business potential because they offer products or services that could field more customers at a small marginal cost of goods sold. As such, many can afford to accept an alternative form of payment, as long as they can use it for other practical applications.
While traditional bartering usually doesn’t result in additional cash flow, companies that are able to exchange services based on a shared or complementary currency can determine when and how to spend their newfound capital. Many will use that for marketing, advertising and public relations services that would otherwise have been too costly.
Cash flow isn’t always confined to exchanged services either. In many cases, these unique partnerships result in cash business resulting from direct referrals from services rendered in exchange for other goods.
This article was originally posted here on Entrepreneur.com.
The Steps Involved In Joining An Investment Holding Company For High Growth
There are many growth capital avenues available for established entrepreneurs. One of those is joining an investment holding company. Is this the right move for your business?
Let’s say you’re a high-growth, high-impact business that’s reached a ceiling; a point at which you need to seek investment partners as a growth tool. Many mature businesses approach an intersection at which it becomes clear that they need to unlock capital, identify mentors, or collaborate beneficially with other subsidiaries.
If your goal is to join an investment holding company, what are the steps involved and what can you expect from the process?
Sustainability and scalability are the key
To begin with, it’s important to clarify the difference between a private equity (PE) investor and an investment holding company. PE investors need to go into an investment knowing what their exit strategy will be, while groups choose to invest in businesses that have shown themselves to be sustainable and scalable. As long as they continue along that road, the group is more likely to hold onto them. You are also a member of that group, and subject to its board.
In the case of MICROmega, we seek first to understand the business. If we are able to do that, we look for sustainability and scalability, and if these characteristics are clearly evident, we go on to pursue an investment opportunity. This is typical of investment holding companies.
Once we become the investment holding company, we try to remove as many of the subsidiary’s distractions as we can: Alleviating administrative and financing burdens so that business owners are free to focus on growing the business. In our experience, growing businesses become more and more administratively intensive, which can bog entrepreneurs down.
This is ultimately a partnership, so everyone should benefit from the association. At the same time, you need to be sure that the investment holding company shares your values — this is a long-term relationship, and you need to know that you’ll be happy down the line.
What would-be subsidiaries need to do
1Define exactly what you want
While there are some basic strategic values that any partner should be able to bring to the table — namely, access to capital, industry-specific networks, and economies of scale — it’s wise for an investor-seeking business to have a predetermined idea of the specifics that they require from a potential strategic partner.
2Research, and research again
Any long-term investment relationship should begin with extensive research on the investment partner universe. There are many potential investment partners out there, but each has specific investment mandates, sector or industry preferences, and value preferences. Ensure that you can identify and understand these.
3Be clear on your own risk profile
The quantum of funding required will impact the choice of funding partner. When you understand your risk profile relative to the type of returns on offer, you’ll be able to determine, and strive to seek out the most appropriate funding source.
4Unpack your plan for the capital
Businesses seeking to be acquired should be clear on what they will do with the capital to be contributed by the investment partner, and how growth will be achieved.
5Ask the investor the right questions
I’m a firm believer in would-be subsidiaries ensuring that they adequately evaluate potential investors. The starting point is to ensure that the interests of both parties are aligned.
Thereafter, further questions should cover:
- Investors’ detailed track records
- Their investment mandates
- The returns that they target
- Their typical risk profiles
- The origins or sources of their funding.
6Ensure a sense of shared spirit
It is essential that the investor and the organisation’s priorities and approaches are aligned at the outset; that they are on the same page. Many things can go wrong between entrepreneurs and financial partners, and the worst outcome is that the investor crushes the entrepreneur’s pioneering spirit.
In such a scenario, no one wins. This is why I believe that both parties should be happy, with a sincere sense that they have entered into a partnership that will create value on both sides.
Regardless of who your investment holding company is, you should expect it to provide access to capital and support throughout the business; provide mentorship and ideas around innovation; and help you to create an environment in which you are able to focus on innovating, and not on administration management.
- Do you know what you’d like from an investment partner?
- Have you thoroughly researched potential partners in your sector?
- Have you determined your risk profile versus potential returns?
- Do you have a plan on what you intend to do with any capital raised?
- Do you have a clear list of questions to ask any potential investors?
- Have you evaluated whether there is value-alignment?
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