Category Archives: Business

Business Loan Applicants Tips

When it comes to obtaining financing to start a new business, minorities are facing an uphill battle, new research shows.

Minorities seeking small business loans are treated differently than their white counterparts, despite having identical qualifications on paper, according to a new study that appears online in the Journal of Consumer Research.

“There is a general belief among Americans that we’re the land of opportunity and that anyone can pull themselves up by their bootstraps,” said study co-author Glenn Christensen, an associate professor of marketing at Brigham Young University. “It is a land of opportunity, but that opportunity is not always equally accessible.”

As part of the study, the researchers recruited three black, three Hispanic and three white small-business owners to try and secure loans. The entrepreneurs wore the same clothes, asked for identical $60,000 loans to expand identical businesses and had nearly identical backgrounds.

The study’s authors found that the minority loan seekers were given less information on loan terms, were asked more questions about their personal finances and were offered less application assistance by loan officers.

“If you are white and set out to get financing for an entrepreneurial venture, it might be a tough journey,” Christensen said. “But, generally speaking, you would experience fewer obstacles and find more help along the way than if you came from an African-American or Hispanic background.”

In the second part of the study, the researchers conducted in-depth interviews with 39 small business owners — 16 white, 13 Hispanic and 10 black — about their experiences seeking funding. They discovered that the denial, rejection and restricted access to loans for minorities led to self-questioning and diminished self-worth and self-esteem.

“While racial and ethnic minorities have made significant progress in terms of race relations over the past several decades, the harsh reality is that there still are remnants of discrimination in society,” said co-author Jerome Williams, director of the Center of Urban Entrepreneurship and Economic Development at Rutgers University. “It is appropriate to continue asking the question, ‘Is the glass half empty, or is the glass half full?’ in terms of progress being made in eradicating discrimination in the marketplace?”

The researchers said the study offers evidence that choice is not open, unrestricted and available to everyone in the United States.

“Many consumers are driven to start their own business as part of their journey for the American Dream,” said study co-author Sterling Bone, a professor of business at Utah State University. “They knock doors, and they chase after this dream, only to find that because they are a minority, their ability to lay hold of that dream for themselves and their families is frustrated.”

 

E Commerce Platform for Businesses Tips

To test e commerce software, we signed up for our own business account on several platforms. We found Shopify to be supereasy to use, and we were able to set up our account in seconds.

When you sign in to Shopify, you’ll be greeted with a simple dashboard with a side navigation menu, which makes it easy to get around and quickly get to a specific task. The dashboard home page also has shortcuts to commonly used features, so you don’t have to waste time going through each section — for instance, to add products or edit your website.

Using Shopify, you can launch your online store in three steps: add products, customize the look of your website and set up your domain. Adding products is as simple as entering details like product descriptions, pricing and options (size, color, model, etc.), and then uploading product images.

Plus, you don’t need any tech skills to build, design or edit your website. You can choose from more than 100 ready-made themes, and then just add your logo and pick colors that match your branding using a color picker. You can also customize its look and feel using menu options located in the Themes section or with HTML/CSS if you’re a more advanced user.

E-commerce features

In addition to letting you create a professional storefront, Shopify offers all the tools you need to manage and grow your e-commerce business. These includes an online shopping cart, the ability to sell on social media, reports and analytics, marketing tools and mobile access.

Shopify’s online shopping cart lets you easily accept credit card and PayPal payments, as well as automate sales to save you time. First, the service has its own payment gateway, so you don’t need to set up any third-party processors. The sales rep we spoke to said this means you can start making sales as soon as your online store launches and get paid fast into your merchant account.

Shopify also automates sales while giving customers fast, painless checkout. Products are saved into shopping carts, and when customers are ready to check out, all they have to do is choose their shipping method — preset by you or by using automatic carrier shipping rates — and enter their payment information. Everything works in the background, and orders are automatically added to the Orders section of your dashboard, so all you have to do is take care of shipping your products to the right customers.

In addition, Shopify offers all types of merchant tools to help you run and grow your online business. For instance, you can use its reports and analytics tools to measure the performance of your store and website. There’s also a search engine optimization (SEO) wizard that helps potential customers easily find your store, and individual products on Google and other search engines.

Shopify also features several marketing tools to help you find and retain customers, including the following:

  • Discount code and coupon generators
  • Custom gift cards
  • Social network integration
  • Facebook selling
  • Targeted email marketing
  • Product reviews
  • Google ads

Other benefits

One of the biggest benefits of using e-commerce software is that you can easily run your entire business without having to purchase additional solutions or worry about the back end or IT aspects of running an online store.

First, Shopify is an all-inclusive e-commerce software that provides much more than an online store and shopping cart. It also offers the following:

  • Customer relationship management (CRM) tools to help you manage customers
  • A content management system (CMS) so you can enrich your website with multimedia, additional pages and even a full-featured blog
  • Third-party integration so you can connect apps you already use

Second, the company takes care of the infrastructure and security side of your online store and website. We were told that its servers are not only fast, but also guarantee a 99.94 percent uptime, so your store is always live and accessible. In addition, upgrades are installed automatically, so you don’t have to worry about manually installing the latest features and updates.

When we asked about data accessibility and security, Shopify confirmed that the company automatically performs daily backups of all data — which includes product information and inventory, orders and customer information — in its secure servers. Shopify also keeps your business’s and customers’ information safe with 24/7 monitoring, Level-1 Payment Card Industry (PCI) compliance for secure credit card processing, and 256-bit SSL certificate for data protection.

Is Small Businesse Need a Customer Service

TeleDirect offers nearly every service you could expect from a call center. TeleDirect’s inbound services include reliable customer support, order processing, media support, tech support, reservation services and help desk services. The outbound services are equally robust, including lead generation, customer retention efforts, market research, appointment setting, telemarketing, follow-up calls and survey conducting. A unique feature of TeleDirect’s outbound services is cold-calling, which helps to forge new customer relationships and expand your base; most other services do not perform cold-calling in addition to their other outbound functions. This slate of services made TeleDirect one of the most comprehensive call center service we reviewed.

24/7 availability

TeleDirect is available 24/7/365, providing a constant destination for your customers’ phone calls, regardless of your business hours or time zone. Not only is constant availability a boon for cementing customer relationships, but it also means a representative will always be available on holidays and weekends.

Our customer-service experience with TeleDirect was satisfactory. Agents were knowledgeable and able to answer any questions we had, though our interactions did lack a personal touch or a friendliness that might leave an even better impact on a customer. However, we never had to wait and always obtained the information we needed quickly.

Dedicated agents

TeleDirect employs any combination of shared, blended or dedicated agents, depending on what your needs are. Having the option to use dedicated agents, which are call center employees specifically assigned to work for your business, can help ensure more accurate and engaging service. Shared agents manage several different accounts with the call center service, meaning they have to pay attention to more than just your business. Blended agents, as the name suggests, are a mix of shared and dedicated agents for your campaign.

Working with a dedicated agent ensures not only that your customers are of particular importance to the agent, but also helps to improve the call center’s individual accountability.

Multiple languages

TeleDirect’s agents can field calls in multiple languages, not just English and Spanish like many other call centers. If your business engages with a clientele that speaks a different language, TeleDirect is likely able to accommodate them. If your customers often speak a foreign language, TeleDirect is a great option for staying in constant communication with them in their native tongue.

Limitations

No live-chat support

One minor drawback to TeleDirect’s service is that there is no live-chat option in the event you require support. Of course, there is a customer-support phone number, and the company also offers an email address. Overall, we found this limitation to be relatively insignificant, especially when compared with the list of services TeleDirect offers.

Monthly volume minimum

TeleDirect requires your business to use its services for a minimum of 29 minutes each month in order to continue working together. While you’ll need to consider whether your average call volume hits this mark or not, the 29-minute requirement is not very prohibitive compared to some comparable companies’ requirements – overall, TeleDirect’s call volume minimum represents a minor consideration.

Best customer service Tips

Best call center service for small business

TeleDirect was selected as our best overall call center service for small businesses primarily because it boasts a complete selection of both inbound and outbound services, including some of the harder-to-find features like cold-calling services. TeleDirect’s services are also available 24/7/365, meaning your customers will always have someone to speak with, even on weekends and holidays. Depending on your particular needs, you can select shared agents, who conduct multiple campaigns, or dedicated agents, who will be focused solely on your business. TeleDirect also supports English and Spanish, as well as a number of other languages depending on the requirements of your clientele. Find out more about TeleDirect on the call center service’s website, or see our full review for more information.

Best Call Center Service for Low-Volume Calling: Xact Telesolutions

If your business doesn’t field a lot of calls, it can be difficult to find a call center service that will truly be cost-effective. Xact Telesolutions has no monthly invoice requirements or call minimums, meaning you can pay only for the services you use and nothing more. Xact’s agents are prepared to answer calls 24/7/365, and the company enables you to monitor any phone call in real time using a supervisory tool. Xact also offers one of the most comprehensive language services, with agents fluent in English and Spanish, and a third-party translation partner that can support more than 100 additional languages. Find out more about Xact Telesolutions on the call center service’s website, or see our full review for more information.

Best Answering Service for Medical Practices: Specialty Answering Services

Medical practices have unique needs in communications. Not only do medical practices have to ensure security, but they also have to do so in accordance with the federally required HIPAA standards. Specialty Answering Service offers a HIPAA-compliant answering service at affordable rates. There are a number of plans to choose from based on your expected call volume, from the pay-as-you-go economy plan all the way up to the massive 10,000-minute plan. Specialty Answering Service also offers an extremely effective appointment scheduler, complete with follow-ups, which adds a layer of redundancy to your practice-management system’s scheduler. Find out more about Specialty Answering Service on the answering service’s website, or see our full review for more information.

Our methodology

We take the process of recommending vendors seriously, so we invested substantial time in researching various call center services and their features. We gave each vendor equal consideration.

We started the process by coming up with a comprehensive list of vendors that offer call center services. To do this, we searched the web and consulted other lists and reviews of the most popular vendors. We ended up with a list of about 30 call center services to examine further.

From there, we visited the websites of each vendor to compare pricing and features. We looked at all of the details, including inbound services, outbound services, invoice requirements, call minimums and additional features. We used this information to narrow down our field of 30 candidates to 15 finalists.

Next, we called all the services we were considering, posing as a customer. Beyond just the marketing rhetoric on websites, we wanted to get a feel for how the companies handle actual customer interactions. We asked all of the customer service reps the same set of questions about features, options and pricing, and we noted our reactions to the experience. Company representatives who were friendly and forthcoming got higher marks, and those who were less than helpful or too pushy scored lower.

For our overall best picks, the decision came down to which company offered the best balance of affordability, useful features and effectiveness of call center agents.

Telesolutions For Customer Service

The key for a low-call-volume business is to find a call center with no monthly minimums or invoice requirements. With Xact Telesolutions, you’ll pay only for the services you use. Many other call center services require either a minimum number of calls or minutes on the phone, while others charge you a base fee regardless of how much of their service you use. Small businesses that don’t regularly meet these minimums or don’t require the base level of services would be better off going with a no-minimum service like Xact.

Customizable

Xact Telesolutions, like all of the call center services we recommended in our reviews, is a customizable service, so it includes only the functions your business requires. The rate you pay will vary depending on which services you choose, so you’ll need to speak with a representative to obtain a quote for your individualized plan.

Inbound services to choose from include appointment management, customer service, order processing, credit card processing, technical support, loyalty programs and follow-up scheduling.

Outbound services offered by Xact Telesolutions include lead generation, appointment reminders, collection reminders, online and print marketing campaigns, customer feedback, and surveys.

Xact Telesolutions also maintains a disaster recovery center, which will ensure your business remains operational during natural or man-made disasters.

Support for multiple languages

Call center agents at Xact are accent-neutral English speakers, and they have employees fluent in Spanish as well. For other languages, Xact partners with a third-party translation service that supports more than 100 languages, ensuring that any of your non-English-speaking customers will have somebody available to accommodate them.

Customer support

Xact Telesolutions utilizes an automated system to queue callers, but our call was answered immediately. The agents were friendly, enthusiastic and knowledgeable. We were pleased that our questions were answered by one customer service representative instead of having our call passed to multiple representatives.

Live monitoring

An especially attractive feature offered by Xact Telesolutions is live monitoring, which you can use to listen in on customer service calls in real time. In addition to the online reports the center generates for your review, it’s easy to use the Supervisory Tool provided by the company to make sure agents are living up to your expectations when speaking with your customers. Whether you’re just curious or a customer filed a complaint regarding his or her treatment by an agent, live monitoring is an indispensable tool to hold the call center accountable and ensure you’re receiving the quality service your business deserves.

Limitations

No cold-calling services

Despite the variety of outbound services offered by Xact, the company does not engage in cold calling. While this isn’t a major drawback, call centers that provide cold-calling services can help forge new relationships and expand your client base. Cold-calling services are relatively difficult to find in a call center service. If you require a call center service that offers cold calling, see our review of TeleDirect, our pick for the best overall call center service for small businesses.

Flowchart Software for Small Businesses Ideas

Are you trying to choose a flowchart software for your business? We’re here to help you find the one that’s right for you. Whereas some systems are appropriate for larger businesses, we found three that we think are best for small businesses’ needs.

What is flowchart software?

Flowchart software can help you easily create diagrams, organization charts, wireframes, process-flow diagrams and more. The charts are suitable for presenting to clients or other stakeholders. Charts can be shared online and some offer interactive features. Flowchart makers provide more features than free software or spreadsheet or presentation programs. Plus, they include helpful templates, symbol libraries and collaboration tools.

Benefits of flowchart software

  • Creates professional flowcharts easily
  • Shares charts online, by PDF or image file
  • Includes numerous templates and symbols
  • Also creates other types of charts
  • Compatible with other business apps

Other types of charts diagram software can create: business process modeling (BPMB), organizational charts, mind maps, SWOT analysis, network diagrams, electrical drawings, engineering drawings, wireframes, mock-ups, Unified modeling language (UML) diagrams, Venn diagrams, workflow diagrams and custom diagrams.

If you have found that you have outgrown free chart creation tools, it may be time to consider an affordable upgrade.

How we evaluated flowchart software

Top Ten Reviews (TTR), a sister site of Business News Daily, has been testing flowchart software since 2011. We spoke with TTRs business review team about their testing of flowchart software and conducted our own research to evaluate flowchart software specifically for small businesses.

The testers considered the flowchart creation process as well as how the charts are shared and viewed. The logic behind these tests was that the software should be simple to use and view for both small businesses and their clients. About 80 hours of testing and research was conducted to discover the software that not only provide a good feature set, but is easy to use and share as well.

After looking over Top Ten Reviews’ research notes and conducting our research, we found three products suitable for small businesses, plus one free option. These products are simple to use, but are also affordable to the small business owner. It should be noted that in many cases flowchart software is not actual tradition software, but most often an online version with a monthly subscription rate.

 

Tips to success on your financial business

Obtaining a small business loan isn’t as easy as you might think. Small business owners looking for capital to take their business to the next level can face issues with eligibility, and the process of both applying for and receiving a loan is lengthy and time-consuming.

Want to speed up the process and make the loan application process go more smoothly? Evan Singer, general manager of small business loan application serviceSmartBiz, shared these tips.

1. Keep your documents in order.

First and foremost, keep your business records straight, Singer said, adding that the application process will be more seamless if you take the time to keep your financial, accounting and tax records up-to-date and accurate. Make sure your business has a system in place to keep everything organized.

2. Maintain good credit.

In addition to keeping track of your documents, make sure to pay your bills on time. You’ll have to meet some type of credit criteria, so it’s important to have the best credit possible. Avoid foreclosures, bankruptcies, charge-offs and late payments. While banks have different credit requirements, good credit is an essential part of the process, Singer said.

3. Know where the money will go.

Are you purchasing real estate or buying a truck? Perhaps you simply need the capital to make an acquisition. No matter the purpose, have a firm idea of why you need the money and how you’ll use it, Singer advised. Be able to clearly present the use of your funds and the specifics of how the money will be used. Lenders have different requirements for the use of proceeds, so be sure to ask your lender before you get started.

4. Demonstrate sufficient cash flow.

If you’re an existing business, banks want to see that you have demonstrated cash flow sufficient to make your monthly loan payments, Singer said. They’ll do this analysis by looking at your past tax returns and existing debt. Singer added that if you’re buying a business or starting one from scratch, you should be able to show detailed financial projections. Provide a financial plan that clearly illustrates you’ll be able to make your monthly loan payments.

Need a Small Business Loan? 6 Tips to Make the Process Go Smoothly
Getting a small business loan can be a challenge. Make sure you go in prepared. / Credit: Money tree image via Shutterstock
Obtaining a small business loan isn’t as easy as you might think. Small business owners looking for capital to take their business to the next level can face issues with eligibility, and the process of both applying for and receiving a loan is lengthy and time-consuming.

Want to speed up the process and make the loan application process go more smoothly? Evan Singer, general manager of small business loan application service SmartBiz, shared these tips.

1. Keep your documents in order.

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First and foremost, keep your business records straight, Singer said, adding that the application process will be more seamless if you take the time to keep your financial, accounting and tax records up-to-date and accurate. Make sure your business has a system in place to keep everything organized.

2. Maintain good credit.

In addition to keeping track of your documents, make sure to pay your bills on time. You’ll have to meet some type of credit criteria, so it’s important to have the best credit possible. Avoid foreclosures, bankruptcies, charge-offs and late payments. While banks have different credit requirements, good credit is an essential part of the process, Singer said. [Understanding Different Types of Small Business Loans]

3. Know where the money will go.

Are you purchasing real estate or buying a truck? Perhaps you simply need the capital to make an acquisition. No matter the purpose, have a firm idea of why you need the money and how you’ll use it, Singer advised. Be able to clearly present the use of your funds and the specifics of how the money will be used. Lenders have different requirements for the use of proceeds, so be sure to ask your lender before you get started.

4. Demonstrate sufficient cash flow.

If you’re an existing business, banks want to see that you have demonstrated cash flow sufficient to make your monthly loan payments, Singer said. They’ll do this analysis by looking at your past tax returns and existing debt. Singer added that if you’re buying a business or starting one from scratch, you should be able to show detailed financial projections. Provide a financial plan that clearly illustrates you’ll be able to make your monthly loan payments.

Editor’s Note: Looking for a small business loan for your business? If you’re looking for information to help you choose the one that’s right for you, use the questionnaire below to have our sister site, BuyerZone, provide you with information from a variety of vendors for free:

What type of business financing are you interested in obtaining at this time?
Business loan
Cash advance against credit card income
Loan for equipment purchase

5. Be prepared to outline your professional background.

Lenders will be interested in your business, but they’ll also take a good look at you, Singer said. It’s important to present your professional background in a way that’s relevant to the business and shows that you’re poised for success. If you’ve been in the business a while and have a substantial background in your industry, make that clear.

Choose the Right Customer Service Call Center

Fielding customers’ phone calls is a critical component of any business, but it can be difficult to balance productivity and customer service, especially when your business is growing. To solve this problem, many businesses employ call centers. Of course, most small businesses can’t afford to maintain an in-house call center. That’s where third-party call center services come in. These companies offer services such as answering calls, assisting customers, performing lead generation, conducting surveys and obtaining customer feedback.

More robust call center services can also help to expand your small business’s customer base through marketing, data gathering and the addition of languages to your customer service line. They can also make a business look more professional.

Call center services can vary widely. While some businesses might only need a basic answering service, others might want the most sophisticated outreach options. This guide will help you understand the variety of call center services available and determine which one is right for your business.

Answering services vs. call center services

There are a few important distinctions between call center services and answering services. Knowing the differences between them is key to choosing the right service for your business.

Already know everything you need to know about call center services? Visit Business News Daily’s best picks page to see our recommendations and to take a look at our call center service reviews.

Call center services are broad and general. They usually maintain a large stable of employees and tend to field a higher volume of calls. They are also able to serve almost any industry, compiling orders, offering customer support services and sending the relevant information back to their clients. These services can typically function with a general script and basic information about the client’s business. Call center services will usually archive orders and interactions, and then send the information as part of a report to the client. One example of a business that might employ a call center is a retail company. [See Related Story: Best Overall Call Center Service for Small Businesses]

Answering services, on the other hand, are usually much smaller and often handle complex, specialized tasks. They generally serve specific “vertical markets” that require a more intimate knowledge of the inner workings of the client’s business. Answering services are best equipped to deal with specific industries that might require critical thinking and decision making. Sometimes, answering services will engage in time-sensitive or highly personalized functions. Oftentimes, answering services will immediately relay individual calls to the client. An example of a business that might employ an answering service is a medical practice.

Why employ a call center service?

The primary benefit of hiring a call center service is to free up your staff members, so they can spend all of their time focusing on your business’s productivity, rather than on fielding calls. In addition, if your business would otherwise require a dedicated call center, a third-party service can help reduce the associated costs. Moreover, call center services can be available 24/7 if necessary, allowing your customers to constantly be in touch the moment any issue arises. Finally, a call center service can add a level of professionalism to your small business’s brand, without necessitating the costly creation of your own customer service team.

When you hire a call center service, you’ll usually be asked to provide the company with a script and as much information as you deem necessary so that their representatives can better serve your customers. Some services will record phone calls so you can review them for quality-assurance purposes. Other services will even provide you with daily reports detailing how many calls were fielded and which issues they involved. When you’re selecting a service, it’s important to find out how well and how often the service intends to keep you in the loop, as you will want to monitor the company’s performance closely.

What to look for in a call center service

Call center services might seem similar on the surface, but the details of each company’s offerings can vary quite widely. Once you start asking specific questions, the differences among the companies will start to become more apparent. To find out which vendor is right for your business, here are a few questions to ask yourself and features to look for in a call center service.

Inbound and outbound services:

A major function of call center services is to accept calls to answer customers’ questions about your business’s products or services. Call centers can often provide information or technical support, as well as take orders and process payments over the phone. Many will also dispatch calls to you in the event a customer needs to speak directly with someone inside the company. All of these services fall under the “inbound services” umbrella.

Some call centers also offer so-called outbound services, which include lead generation, such as cold calling and survey-data compilation. These services can also include follow-ups with previous customers to ensure their satisfaction or to further encourage a successful conversion. Traditionally, call centers were viewed as a necessary expense to preserve existing relationships, but when you consider these additional functions, call centers can actually broaden your customer base, forge new relationships and bring in more money.

Not every business needs both inbound and outbound services, so it’s important to consider your business’s needs. Once you know exactly what you need, be sure to ask each call center service which inbound and outbound services it offers.

Reporting:

You’ll want to monitor the call center service’s performance to be sure it’s operating as expected. After all, the call center will be dealing directly with your customers, meaning it could have a great influence on how they perceive your business. Reporting offers you a window into the day-to-day operations of the call center service you’ve hired.

But not all reporting is created equal. Some companies only offer basic summaries of how many calls they made or received in a given time period, while others provide access to real-time data analytics and even record the audio of calls for review when something goes wrong. Before you sign up with a call center service, it’s important to know how transparent and forthcoming it will be and what you can expect from the company’s self-reporting.

What is the call center’s availability?

Another important question to ask is how often agents at the call center are available. Good services have 24/7/365 availability for your customers. Some call center services even offer disaster recovery services, meaning they can take over completely if your own phone lines go down due to an emergency. Selecting a service that is always available and very reliable should be a major focus for your business.

What is my anticipated call volume per month?

Some call center services have minimum volume requirements that must be met before they will partner with a business. These services might not be suitable for a small company that doesn’t expect many customer service calls, or doesn’t intend to make many outbound calls. However, for a larger company or one that relies heavily on phone contact with customers, these services might make more sense. Try to accurately gauge your call volume and estimate how many call center agents you might need before searching for a call center service.

Many call center services charge by the month, but some are known to charge for a package of minutes. If this is the case with the call center you partner with, you’ll especially want to know how large or small your expected call volume is.

How does a company handle outages?

Call centers are an integral component of many businesses. Downtime can seriously harm your business if your customers are unable to get through to the call center agents. That means you’ll want to partner with a call center that is dependable, with reliable redundancy and a solid disaster-recovery plan so that an outage doesn’t cripple your productivity.

All About Investors Business Tips

Unless you plan to fund your new business from your own bankroll, you most likely will need an investor at some point along the way.

Regardless of how great your business is, if you can’t get someone to invest some money to launch it or help it grow, your venture doesn’t have much chance of succeeding.

As a fund manager, investor and entrepreneur, Shereen Shermak, CEO of Launch Angels, has listened to and been a part of dozens of pitches. She said the key to making a strong impression on potential investors is being able to thoughtfully answer all of the questions they have.

Shermak said that in an investor pitch meeting, there are six questions that every entrepreneur should be prepared to answer, including:

  • What’s your complete competitive landscape look like — beyond just where you’re playing? Entrepreneurs need to demonstrate that they understand, and respect, the competitive environment they are operating in. What sets them apart from the competition? I want to see that companies understand the growth and contraction trends of their competition, especially as it relates to their product or service. As part of understanding the competitive landscape, it’s also very important to understand what areas entrepreneurs choose not to compete in and why they opted not to pursue those areas. Knowing where not to compete (because it is outside the current capabilities of the organization) demonstrates a high level of self-awareness.
  • What’s your competitive advantage? An entrepreneur must be prepared to talk about how his or her solution is better, faster or cheaper than existing solutions, as well as how much better, faster or cheaper it is. He or she should be able to quantify the customer value proposition, validate that the solution is better or provide data to indicate that such items are meaningful to the customer.
  • What are your achievements and milestones? Are goals being met or is the company tracking well to meet them? Have there been setbacks that forced a change in plans? If so, what was learned from those situations? I am also very interested in upcoming milestones and challenges. How will an investment help reach those milestones? What are the biggest challenges, weaknesses and roadblocks, and how are they being addressed and overcome? Examples include key hires, change of revenue model or sales strategy.
  • What are the risks? It’s always better when entrepreneurs let potential investors know about the risks to their venture. It builds trust and again shows self-awareness, as well as a pragmatic view of the overall forces that may impact the company.
  • What’s the exit strategy? Every investor wants to talk about exit strategies, and they want to know that their investment companies have a sophisticated understanding of the exit strategies that would likely be available to the business. As an investor, I want to invest in companies that will have a positive return in a short to moderate time frame, such as three to seven years. Startups need capital, and I need a positive return on my investment. I want to know that the company is thinking about this balance of needs and is actively developing the product, partnerships, and network, and understands the motivations behind M&As in the company’s industry that will facilitate that exit opportunity in the future.
  • Why me? I want to know how an investment from mecan add value to an organization and help meet milestones. In my opinion, a smart entrepreneur has done his or her homework on potential investors and has strategically targeted me for a specific reason.

Startup Investors Tips

Getting someone to invest in your new business takes more than a great idea.

While the idea is critical, investors take much more into consideration when deciding whether or not to hand over some of their cash to a budding entrepreneur.

Michael Mocatta, an entrepreneur mentor in residence at the London Business School and a partner at Neta Ventures, said entrepreneurs need to know what to ask for and how to ask for it when trying to pitch investors on their plan. This includes knowing how to entice investors with their idea and asking for only as much money as is truly needed.

To help entrepreneurs get the most out of their pitch meetings and ensure the relationship is a win-win for both parties, Mocatta offers five tips:

  • Don’t put your idea first the team is most important. Your team is what makes your idea happen. Potential investors are looking at the people behind the idea. Do you have a rock-solid founding team? A common mistake is a team presenting itself to a potential investor with a missing link, such as one that’s still looking for the tech guru. It’s also good to note that a startup doesn’t have to be composed of a bunch of young people in their twenties. In fact, you’ll stand out for the right reasons if the people on your team have experience as well as contacts. A diverse team with complementary strengths is what will turn an idea into reality.
  • Create a simple tagline that clearly shows the benefit of your product or service. Very often entrepreneurs who live and breathe details of innovation find it hard to distill a concept into a simple idea that grabs the imagination of investors. You need to condense the vision of the business into a clear benefit that is compelling and dramatic. While similar to the elevator pitch, a tagline is even more succinct. Have this worked out before presenting your vision to others.
  • Before you go to investors, have a plan for distribution. Having a great idea isn’t worth anything if you can’t get it into the marketplace. When you’re standing in front of investors, you will sound immeasurably more exciting and attractive if you have already taken the steps needed to have a concrete trial market. I often suggest starting with a retail channel niche and then building the product backward. In other words — where do you want to sell your product? Answer that question and then build you product specifically for that market.
  • Ask for only what you need. The vast majority of startups will come in with requests at set levels — and they’re looking for a significant chunk of change. I push startups to ask for less money, however, and change their pitch to focus on a very specific goal, such as getting past proof of concept. Later on, they can do a second round of fundraising. This helps protect their stake in the business. The smaller the amount they ask for, the smaller they give up on equity. When it comes time for a second round of fundraising, the company will be further along in the development stage and therefore worth more. That means it will cost you less in terms of business equity. Demonstrating that you understand this makes you more credible to investors.
  • Avoid the mistake of giving up too much equity too fast. This is a common mistake. An entrepreneur and any initial investors are hoping that the business will grow into something big, but as they go through multiple rounds of funding, their share of the company will really be diluted. By the time you’ve grown, we see founders left with only 5 or 10 percent of their company. In the end, the CEO doesn’t even have sufficient skin in the game to promote a brand’s success. The people driving the business forward should always maintain at least a 50 percent stake in the business. If you don’t maintain a large stake in the company, your “voice” will be diluted and other shareholders could outvote you.