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Start-up Advice

The 5 Stages Start-ups Must Go Through to Make That First R1 Million

What stage of business is your start-up in?

Entrepreneur

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We all want our start-up businesses to hit that coveted R1 million per year in revenue. The unfortunate truth is that only 4 percent of us actually make that goal.

This past year my company scaled LeadQuizzes, our lead generation software, past the R1 million mark in less than six months. Having hit that sales mark, I now know how important it is to maintain an awareness of where you are in your business.

That means really understanding: 1) The stage of business you’re in; 2) the fears and limiting beliefs holding you back; and 3) the keys to growing into that next sales bracket. Having this awareness creates more confidence and allows you to prioritise and take action.

Here are the five stages I believe that you and your start-up must go through to reach that understanding and hit that R1 million in sales.

Stage 1. Searching for product market fit

Your goal at this stage should be finding a product market fit. You’re likely excited at this point, but scared. Now that you’ve jumped in to starting your business, your plan for how to grow isn’t as clear as you’d thought. What’s more, you’re not making much money yet, which is scary.

You’re also starting to get distracted by lots of different opportunities for making money. Don’t let that happen; focus on your plan. And when talking about your business don’t feel you have to “fake it” and act more successful than you actually are, even though you’re worried whether things will work out.

Related: 10 Businesses You Can Start Part-Time

Daniel Tyre of HubSpot For Startups told me that the key to success is to start by proving your value and attracting customers. He recommended offering discounts or doing work for free to create case studies and a track record of results.

Focus on the lowest hanging fruit, he said. And ask friends and family for referrals.

Stage 2. Moving from a part-time to full-time business

start-up-to-success

You made it out of stage one. You’ve built a small reputation for getting results. Most importantly, you’ve got customers.

At this stage, you’re most likely becoming overwhelmed from having to sell and fulfill those orders. You’re finding it difficult to keep up.

You know you need to bring on some help, but you’re barely paying yourself as it is. You’re not sure how long that steady stream of referrals and sales will continue. You also worry you’ll have a hard time letting someone else take over because you haven’t yet established repeatable systems.

Loren Howard of LLH Development and Real Estate told me that the key to graduating from this stage is to push through. Things will feel uncomfortable, he said, but if you can spend 70 percent of your time on sales-generating activities, you will feel more confident and able to bring on a virtual assistant, then, potentially, a full-time employee.

As your expenses and reputation increase, you should be able to increase the pricing discounts you offered your first customers, Howard said.

Stage 3. Establishing a scalable business model

If you’ve made it to stage three, your primary goal now is to establish a scalable and predictable business model.

At this stage, you’re most likely still feeling overwhelmed. You may have employees, but you’re personally wearing many hats. You need to hire more support, but you’re worried about generating enough consistent work, as you are still mostly reliant on referrals.

Related: 21 Steps To Start-Up

This makes it difficult to see the path ahead where you can scale. At the same time, you’re not extremely happy with your team’s performance because you haven’t created effective training procedures or clearly defined employees’ job roles and how they are to be held accountable.

To make it out of this stage, Emily LaRusch of Back Office Betties told me, you should make a major effort to shift from a referral basis to a predictable and scalable source of leads and sales. To do this, she said, use a tool like advertising. This is likely going to be one of the most difficult transitions in your business to date, she told me.

Continue to spend 70 percent of your time on sales-generating activities. You will need to set up basic tracking and systems to manage your sales and team around your new scalable business model.

Stage 4. Building systems and infrastructure for growth

business-systems-and-processes-building

If you’ve made it to stage four, then you need to start establishing better systems and infrastructure for growth. At this stage, most decisions are emotional ones because your tracking and metrics haven’t yet been established.

Now that a scalable business model is in place, you can focus on moving into stage five. Chris Ronzio of Organize Chaos told me you should focus at this point on creating job descriptions, standard operating procedures and key performance indicators for each role.

Once those things are in place, he said, you can begin to hire and increase your capacity. At this stage, you should improve your lead and sales tracking. You should also optimise your sales model and increase the amount of revenue you make per customer. As you improve, you will be able to scale your advertisements and hire sales reps.

Stage 5. Scaling your team and proven systems

Once you make it to stage five, it’s time to scale your team and proven systems. In stage five, your growth is probably limited by your technology and your people. Cash flow is still a stressor as you make more expensive hires and invest in technology and infrastructure to grow.

Once you gain clarity around what you need to do, and understand your finances, the stress will be reduced.

Related: 46 Facts You Should Know About Entrepreneurship (Infographic)

Scott Oldford of Infinitus recommended that you will most likely shift more focus toward hiring and training new team members at this point. That means more of your time will be spent on management. You will need to improve your technology to handle more advanced reporting and tracking. You’ll get the opportunity to finally accelerate and scale what is working.

If you don’t have an awareness of where you are in your business, and follow this framework to break into what the next stage is for you, then the chances will be greater that you’ll give up, not realising how close you actually were to achieving success.

This article was originally posted here on Entrepreneur.com.

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Start-up Advice

Selling To A Corporate: The B2B Battlefield

If you can apply some of these, you may be able to stop your hair from going grey or halt that premature baldness more effectively than me.

Jordan Stephanou

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So you’re running a start-up that targets corporate clients. All you need is a few corporate signatures on that paper, and all of a sudden you’ll have a sky-rocketing business with an exciting guaranteed revenue stream every month, right? Right… But it’s not quite that easy.

Maybe you decided against a B2C (Business to Consumer model) because the marketing spend to win over one consumer at a time was not worth it, or that the South African consumer market is not big enough in your industry, or that it’s better to get 10 paying corporates rather than a million paying individuals. You’re not alone, and you’re not wrong.

Both models have their major pros and their major cons. Trust me, I know. But here are some of the learnings I’ve had by pursuing the B2B model.

The pitch: Anything other than a resounding ‘yes’ is likely a ‘no’

First step is to get the pitch. There is a huge temptation to go about it as passively as possible, hoping that the deal will fall in your lap with a well written email. Reality is a little different however. To secure most pitches, a combination (or all) of in-person approach, phone call, linked-in message and email could be required. Once you’ve secured the pitch, book it in both parties’ calendars and hope that there’s no last minute cancellation. The exciting part awaits.

Related: Beauty Of Failure: The Art Of Embracing Rejection

The sad fact of human nature is that people don’t always say what they mean, or mean what they say. Possibly it’s because we don’t like to hurt each other, or it’s because we avoid uncomfortable discussion as if it’s the plague.

Whatever the reason, it’s quite rare to receive “hard no’s”. The reality is that after a pitch, anything other than a resounding yes, or a “when can we start”, or “where can I sign?”, is likely to be a soft no; they have no interest in doing business with you. The entrepreneurial spirit is one that looks at the positive in everything, so it could be very dangerous for a glass half-full entrepreneur to receive a soft no, because this person will very much believe the deal is still alive.

Once again, trust me, I know. I recommend tempering the enthusiasm by looking out for any sign of an excuse during the pitch, and addressing it then and there. You know how hard you worked to get that meeting – so make sure you leave with no question unanswered, knowing that you did everything you could to win that business, or learnt everything you could to enhance your product, service or pitch to win future business. If you don’t get their business, it just means you didn’t get their business right now. Extract the positives and move forward.

1. Balance patience & momentum: They don’t operate like start-ups

It’s often said that a corporate is the most important thing to a startup, but a startup is far from the most important thing to a corporate.

As start-ups or SMMEs, we just have to accept that. Where we would respond to an email in a heartbeat, it may take our corporate contact 2 weeks to respond; especially if they are decision-maker. They don’t need our business, but we need theirs. As such, it’s important to remember when following up on a successful pitch that they are big, they are busy, and they have multiple balls being juggled at once. It’s likely that our proposition is the least important to them, and may be seen as a luxury.

Remember, they didn’t pursue you, you pursued them. So we have to be patient. But this is the difficult part; we have to balance patience with the desire to keep momentum. It’s an oft-said phrase that “time kills deals”. As start-ups, we need to be respectful that our prospective client is busy, but also very direct and honest with them in terms of our position and our goals and objectives.

If we are direct about when we want to conclude a deal and why, it could scare them away, or it could lead to them prioritising the deal as a priority. Either way, it’s better to know where you stand rather than have something drag on in that mythical pipeline for months or years as false hope.

2. Their emails are not their priority

emailsAfter the pitch, it’s easy to get in an unhealthy pattern. That pattern could look something like this: Send follow up documents directly after the pitch; hear nothing back from the prospective client; send a follow-up email the following week; hear nothing back; send another follow-up email the following week; hear nothing back; send another follow-up email the following week etc. into perpetuity until you go crazy and re-apply for your old job.

I have learnt that busy decision-makers in the corporate environment don’t just sit at their desk all day reading and responding to emails. They’re on the move, in important meeting after important meeting, flying to London followed by a quick trip to Doha and then 10 days in New York. They’re not setting the wheels in motion in response to your proposal in that spare 30 minutes in the airport.

Related: 4 Social Media Tips For B2Bs

As such, when they are available, you need their full attention and you need to get them to commit to the next step. Either a phone call or in-person visit is effective with this. Getting through to them and asking them the difficult questions about the next step is the only way to be top of mind, and to find out if they are serious about this deal or not.

From my learnings, I recommend emails as secondary to the phone call as a way of confirming what was discussed over the phone in terms of next steps.

3. Improve the product / service – become irresistible

With all else said, there is only one way to consistently increase chances of getting a deal over the line. That is, simply, have an incredible product or service that solves a real problem. If you have pitch after pitch where the response is luke-warm, you should ask them before leaving “what would this product have to do / look like for you to sign up right now?”.

Once you’ve had a few meetings like this, you will understand exactly what your market needs. If you build that product or service that the market craves, you’ll be turning away clients because the demand for your business will be so high. Become indispensable. Build something so good that your clients would be crazy to say no to.

4. Build a pipeline

Your business should never rely on one client saying yes. Putting too much emphasis on one deal will make you desperate, and desperation is the easiest way to scare someone away – relationship, business or anything else. Your market should be big enough that a rejection here and there is water under the bridge and simply a learning.

Closing one deal will provide a proof of concept and credibility that can be leveraged to close the next deal. Each subsequent client should, in theory, be easier to win than the previous one.

Finally, if the product or service is constantly being enhanced according to the market’s needs, if there are enough clients in the pipeline, and if the follow-ups after a great pitch are being done effectively, deals should go through systematically. At the end of the day, closing a deal shouldn’t feel like hard work. The best way to win business is by building a great business that solves real problems.

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Start-up Advice

How to Name (Or In Some Cases, Rename) Your Company

Naming a company is hard, and founders often get it wrong.

Jason Feifer

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Jennifer Fitzgerald is co-founder and CEO of Policygenius. But in 2013, when her company was starting out, it had a different name: KnowItOwl.

“We thought it was a clever play on the term know-it-all,” she says. The company helps consumers find the right insurance policy for them, so she wanted a name that suggested wisdom and guidance, with a friendly animal like the GEICO gecko.

“Then we started talking to investors, engaging our first users and talking to vendors and insurance company partners, and we just kept having to repeat the name — spell it, explain it. Pretty soon we were like, We’ve got a problem.”

And it’s not an uncommon problem.

A name is one of the biggest early decisions a company founder will make, and many get it wrong. Best Buy was first called Sound of Music. Nike was Blue Ribbon Sports. Google was BackRub. Each was a mistake in some form — too narrow, too generic, too evocative of the wrong thing. (BackRub?) For Know­ItOwl, the problem was being too clever.

Related: The Do’s And Don’ts Of Naming Your Business (Infographic)

So how should a company pick a name? Fitzgerald did some research and came up with this process.

Step 1: The big name dump

Fitzgerald created a shared Google Doc for her five-person team and over the course of a few weeks sent out prompts to focus people’s creativity — asking for portmanteaus (like Microsoft, the merging of microcomputer and software), names with numbers (like Lot18), themes like references to trees and more.

Step 2: Structure brainstorming

One Saturday, she invited friends in the branding and marketing industry to join her team for pizza, beer and what she calls “structured group brainstorming.”

She’d put up a word that related to her business — say, protection. Everyone in the room had 10 minutes to write down 10 protection-related names.

Related: What You Need To Know About Naming A Start-up

Then they’d pass their list to the person to their left and take seven minutes to create seven names inspired by the other person’s list. They repeated this a few times.

Step 3: Cut the crap

Between the Google Doc and the brainstorming, they had hundreds of names and started eliminating them in phases.

First: “Can you imagine saying your company name to a Wall Street Journal reporter?” That wiped out many. (Bye, “Harmadillo”!)

Then they nixed any similar to competitors’, names that could come off as unintentionally wrong (a classic of the form: Pen Island) and names they couldn’t get a dot-com domain for.

Step 4: Judge by colour

The surviving names were evaluated based on various criteria, including brevity (shorter is better), evocativeness (does it convey meaning?) and searchability (is it unique enough that when searched for, it won’t get lost?).

Related: Checking the Availability of a Company Name with CIPC

Each criterion was marked as red, yellow or green. The name Policygenius, say, got a yellow for brevity. Too many reds meant elimination.

Step 5: Test people’s memories

Will people remember a name? Can they spell it, if they hear it? To test this, the team recorded someone saying the finalist names, posted the audio to Soundcloud, and embedded it in surveys that they paid $2,000 to have sent to 1,000 people.

They also asked respondents to write down any emotional associations the names created z- “just to make sure nothing was offensive or conjuring up any emotions we didn’t want to conjure up,” she says.

After this, Policygenius had its name. It now employs 130 people and helps a million people each month find insurance, either through its service or content — success that (ahem) owl started with a great name.

This article was originally posted here on Entrepreneur.com.

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Start-up Advice

How To Develop A Unique Brand Name In A Global Marketplace And Protect It

A helpful How-to-Guide on developing a unique brand name and conducting trademark searches.

Julian Diaz

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As a marketer, I know just how important it is to choose the right name for a company or product. It needs to be easy to spell and pronounce (in various languages if you’re going international). If possible, it should have some positive connotations (definitely no negative ones) that can be associated to your company or product. And above all, it must be distinctive and unique.

The question is how do you work out what is unique, beyond a URL search, and then how to protect it? The answer is trademarks. I know what you are going to say…

Do I really need to worry about trademarks?

Yes, for two reasons.

  1. You might be a small business already trading under a name that already exists in the market. And maybe the other company that has trademarked that name in your industry classification won’t ever issue you with a cease and desist letter when you enter their market, because they are nice people and just don’t feel there’s any harm in letting a company by the same name trade in their market. Or maybe they do. It’s a decision that is totally out of your control. Do you really want to take that chance as you build a global brand?
  2. You’ve invested tonnes of money into building your brand in your market and then all of a sudden another company enters the market with the same name. Trademarking your name protects your brand from being copied or from another company riding the wave of your brand awareness you’ve invested so much into building.

Trademarks are important if you want to build a brand on a solid foundation and protect it in the long-term.

Related: When do I register a trademark?

How hard is it to successfully trademark a name?

According to the US Patent & Trademark Office, there have been 182,000 trademark registrations and 312 000 applications in the past 5 months alone. That’s more words than there are entries for in the Oxford Dictionary!

You can imagine how hard it is, and how much harder it gets with each passing month, to dream up a name for your product or company that is unique and distinctive enough that it can be successfully trademarked and protected in large markets like the US or Europe – especially in the technology industry. But there are a couple of routes you can try when developing a new name if you find your chosen one is already trademarked.

How to come up with a unique company name

When coming up with a company or product name, you can either go with:

  • an acronym (IBM, SAP),
  • a family or person’s name (Ford, Dell)
  • an existing word (Amazon, Apple, Salesforce)
  • a misspelled word that looks or sounds like an existing word (Xero, Google), or
  • a completely new word either made up of a combination of existing words (PayPal, Instagram, Accenture), or
  • a completely new word entirely made up (Skype).

Related: (Infographic)Top 10 Reasons To Rebrand Your Business

How to make sure it’s available

Try Google first. If you don’t get any companies coming up that are using that word as a name in your industry, you’re off to a good start. Keep in mind that even if another company does come in the results, it doesn’t necessarily mean they’ve trademarked it.

Check the national trademark search database for the country or countries you want to trade in and search for your name within your industry classification:

If you don’ t come across any trademark registrations for that same word in our classifications, then contact a trademark attorney to conduct a more thorough search using their local experts in those markets and advise you further. You don’t need to work through an attorney as you can register a trademark yourself, but working with one can save you a lot of time and increase your chances of getting your registration through the first time.

In conclusion, some advice

My advice to any company already operating and with ambitions to grow globally is make sure your brand name is trademarked and protected.

If it is not, you should

  • conduct your own search in any of the national IP or trademark offices’ databases (some of which are listed above, others can be found through a simple Google search);
  • hire a credible trademark attorney to either register your name or advise and guide you along the process of registering a new name.

Related: What You Need To Know About Naming A Start-up

If you MUST change your businesses name, then

  • hire a brand development agency for the creative process of developing the right name for you. (We didn’t do this but only because we had no idea how time consuming and difficult it would be. Although it worked out well in the end and we love our new name, it did take up a lot of time and perhaps more importantly “headspace.” I could have been focusing on other pressing things requiring that required this level of strategic thinking or creativity;
  • hire a change management agency or consultant to help with the communication and roll-out process of the new name to all stakeholders: staff, partners, customers, and the market. We managed well on our own, but if you don’t have the internal competency for this, or the time, rather outsource this very important and often neglected step;
  • and finally, just pray to whatever god(s) you believe in that whatever name you finally come with gets the green light from stakeholders and your trademark attorney. (Yes. Seriously.)

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