Friday, June 23, 2017

New Crowdfunding Methods to Raise Cash for Both Startups and Mature Businesses

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 Do you have an idea that you believe could sell millions of units, but you just lack the money to bring it to market? I have been faced with that dilemma multiple times in my life. The resources generally available until just this decade are listed below and I have done all of them, some of them multiple times or continuously:



·      Credit Cards

·      Friends and family equity or loans

·      Borrowing against personal assets like your home

·      Bank borrowing using personal guarantee, personal or business assets

·      Small Business Administration Loan

·      Selling stock to qualified investors with SEC filing

·      Asset lending on accounts receivable, inventory, or purchase orders

·      Customer advanced payments



All of these are still valid methods and commonly used, but there are limits and companies are commonly not able to use these approaches for all the opportunities or crises they encounter.



Now there are two more methods that are creating massive funding for companies, products, and services that don’t require any assets or much cash. Both involve crowdfunding online. One method uses “rewards” that are paid for in advance based on a HOPE that the company will actually deliver the rewards as promised, someday. Almost generically known as Kickstarter, the most common reward is a new product that the funding is designed to help the entrepreneur bring to market.



The other is raising equity or loans from qualified and non-qualified investors in amounts as little as $100 at a time. The investors are found online as part of a crowd of folks that like to take these kinds of risks.



Let’s take a look at these one at a time.



Over the course of the last 40+ years I have brought multiplied hundreds of products to market and either owned or worked with 180 companies that offered products are services. In the course of these years they new company or new product process worked something like this:



·      Idea

·      Business plan for development

·      Cash requirements analysis

·      Personnel and facilities requirement to launch

·      Source of cash analysis

·      Timeline

·      Raise cash, execute on personnel and facilities

·      Spend money on design, tools, packaging, inventory

·      Take idea to buyers and attempt to create pre-orders based on brochures or prototypes

·      Make initial buy of inventory with no idea how fast product will move through distribution and off the shelves.

·      Ship and wait for results – manage results to best extent possible

·      Evaluate and shift as necessary regarding product, packaging, POP displays, distribution channel marketing, price, competitive shifts, etc.

·      Evaluate movement and begin to plan inventory rotation based on sales



Kickstarter and other websites like this are now firmly established with outstanding records for raising amounts as small as a few thousand dollars to multiple millions. The advantages for any company launching a new product using Kickstarter are huge:



·      Almost all of the risk is shifted to those seeking the reward (product.) With other methods the entire risk generally falls on the company and/or owner.

·      You can test market the product prior to spending more than a few dollars on copy, artwork, videos, etc., about the proposed product

·      The product gets displayed on a website where thousands of potential consumers can see your concept and potentially take a risk by placing an order for the “reward.”

·      The marketing content that you create for a successful Kickstarter campaign is now tested and ready to be used to sell in the future in traditional “stores.”



What does it take to create a successful Kickstarter type campaign?




·      A solid and serious new product or service idea that has an element of inspiration around it. There needs to be something seriously new and innovative.

·      Your own large following on social media, preferably including a big email list of folks who would be interested in the product or at least with helping you out.

·      A well thought out and creative pitch that can be translated into Great Copy, videos, spec sheets, etc

·      Rewards – This would include variations of your product, but might also include T shirts, thank you letters, etc.

·      A serious fund raising goal

·      Evidence of trustworthiness



What if there is no “amazing” new product, but you have a great company idea, or an existing company with a track record. If you would like to issue stock, you can go traditional routes similar to what John just outlined with friends, family, associates, venture capitalists, etc. But congress passed a bill which provides a new route.



You can now use online resources, including social media, to “advertise” your stock offering to both qualified and non-qualified investors. The stock can be preferred or common, voting or non-voting, it can even be bundled so that you are only dealing with one entity instead of thousands of individual share holders.



Under these new rules, these stock offerings do not have any of the onerous SEC requirements that earlier offerings require. Sadly, you are limited to only raising $2m per year. LOL



How does this process work?  What do you need to be successful?



While there are those who only try to raise a few thousand dollars using this approach, I would recommend sticking to credit cards and Mom if that’s all you need. Personally, I would suggest a minimum raise of $25,000 or even $50,000 for this type of stock offering.



You will want professional help. Start Engine Is one of the largest, but there are many. Each has their own niche, so it is hard for me to say which would be better for you. The reasons you need help:

·      Unless you think your friends and fans will fork over all you need, these online companies are followed by investors looking for these types of opportunities.

·      They will help you with the legal filings and what you need on your listing

·      For a fee, some will help you with the marketing (Start Engine $4000)

·      There are also issues of timing, how much to ask for, how to value your company preoffering and what that will look like post offering.

·      The actual type of stock, limitations, etc., are other legal issues you may get help on



To be successful, you either need a killer idea, a great company story, an amazing leadership team or all of the above. Then you need to tell your story within the bounds of legal and ethical constraints. In other words, you are not allowed to puff your deal.



Consider this scenario, which is exactly what I’m doing with a current client. 



1.   You have a new product or service idea

2.   You have $10,000 available from friends, family, credit cards, cash flow

3.   You raise $50,000 through a stock offering (cost $7000)  Net $43,000

4.   You put the new product concept up on Kickstarter – cost $5000

5.   You raise $100,000 (cost of goods $50,000) net $45,000

6.   You now have $98,000 in working capital ($88,000 if you repay the $10,000)

7.   You finish the research, make the tooling, buy the goods and ship the orders.

8.   You may have spent some of the $98,000 on the make ready and overhead.  Let’s say you have $50,000 left. You can now use the $50,000 to buy inventory, set up the product on Amazon and eBay, and start selling.
















Friday, March 17, 2017

No Matter What Your Business, Your Business Is About People


Time to be real. Business owners are not always very good with people. The very fact that someone choose to run their own show generally points to the fact that they don’t want to work for or be managed by people. Entrepreneurs are almost by definition rule breakers who play to the beat of a very different drum.

To be sure, some owners are great at sales. Many restaurant owners love to chat up their patrons. And we’ve all seen the owners whose employees stay for decades, because they love the boss.

Whether or not you are “good” with people, a huge percent of the major issues you will deal with each day have to do with customers, suppliers, and staff…people. And there is always room for improvement in knowing how to manage all these unique and interesting folks.

So back to being real. Rate yourself from 1-10 with 10 being best on the following:

  •         Hiring great personnel
  •         Managing my staff
  •         Managing my employees who also happen to be my childrent
  •         Managing sales staff
  •         Managing managers
  •         Working with suppliers
  •         Customer relations
  •         Personal sales skills
  •         Planning for business transitions
  •         Planning an exit strategy
  •         Setting goals
  •         Helping others set goals
  •         Holding others accountable
  •         Training
  •         Delegating tasks
  •         Delegating responsibility
  •         Delegating authority
How did you do? This is the short list, and not exhaustive my any means. Think bankers, investors, and so much more.

Everybody has strengths and weakness. A great CEO recognizes clearly where he/she has deficiencies and works to fill those places with outstanding associates, either on the payroll or as outsourced service providers and consultants.

As a consultant, I commonly see huge gaps in the people skills of the owners I work with. Sometimes these are very damaging to the prospects of the company. For instance, imagine the impact of poor customer service today, when every mistake is blown up on Yelp. Or think about the legal consequences of inappropriate behavior among the top management. I have personally witnessed the destructive potential of an employee who is a negative Nellie or who undermines the owner. And the damage that can be done by poorly managed sales people is no secret.





If you feel like the time has come to deal with some of your personal shortfalls in the people skills area, or if you have employees that need such help, please give us a call. We can help with this and other management and marketing issues.   310-910-1848   That is my personal cell.
Randy kirk
All of the above skills can be trained, hired, or outsourced, and this is but a fraction of the ways that

Monday, September 14, 2015

Understanding Your Financial Statements Is Critical to Great Marketing!!!

You can't manage what you can't count

One of my clients owns a botique bookkeeping, accounting, and payroll processing business in Los Angeles. She is very successful, but needed help with her online effort. As part of that effort I authored a series of blog posts relating to the importance of using income statements (aka, profit and loss) and balance sheets to increase profits in any small business. Here are the headlines. Click through to read the details.

Increase Your Profits Tip #1 - Margins Matter

Increase Your Profits Tip 2 – Margin Analysis – Case Study

Increase Your Profits Tip 3 – Financial Reports Reveal Luxuries

Increase Your Profits Tip 4 – Financial Reports Reveal Fantasy Thinking

Increase Your Profits Tip 5 - Six Numbers You Need to Run Any Business from Maui

Increase Your Profits Tip 6 - "Risk comes from not knowing what you're doing." Warren Buffet

Increase Your Profits Tip 7 – Count This and That and Even This 

Increase Your Profits Tip 8 – “That Was Really Dumb” App

Increase Your Profits Tip 9 - What Were Your Sales Last Year Same Month? The Year Before?

Increase Your Profits Tip 10 - Where Did All My Cash Go?

No matter what kind of company you have or where you are in the US, you may want to give ATPP a call to discuss whether they would be a good fit to do your payroll processing, bookkeeping, and are accounting for you. You can reach them at

ATPP Accounting Tax Payroll Partners 
20058 Ventura Blvd #118
Woodland Hills CA 91364
phone: 818-436-2775

Thursday, June 11, 2015

Should You Use a Payroll Service Provider?


A rule my grandfather taught me in 1964

Walter, or TW to his friends, Kirk inspired much of my entrepreneurial passion. As far as I know he only had one business, TW Kirk and sons, which was the 2nd largest brick contractor in St Louis. I do know that during the depression (not much call for building contractors), he made money selling neck ties door-to-door and offering bridge and poker lessons on cruise ships (the rich always have money!)

He left me with many wise sayings, but this is one I have come back to over and over during my years of starting small businesses: "Don't ever do a job that you can't afford to do." He would further point out that his time was worth maybe $10 an hour in those days when labor was $1.00 an hour. There was no way he could afford to pay himself $10 an hour to do work he could get done for $1.00.  However, he went on to say that the hardest decision in starting a new business is "when to make the first hire."

Nothing has changed half a century later. It is still tough to make that first hire and take on a payroll. However, one decision should be very, very easy. Once you have three or more employees, why would you ever spend a minute figuring out payroll matters. In fact, even if you have a competent staffer making $12.00 or so an hour or a solid bookkeeper making $20 an hour, you will be paying them way too much to figure out and process a payroll compared to what an outside firm will charge.

One thing has changed in the 40+ years I've been employing folks - payroll has become more and more complex. According to BusinessNewsDaily.com these are just some of the advantages of taking your payroll processing outside:
  • Cost savings: Vladimir Gendelman, founder and CEO of Company Folders, an online service that that creates custom folders and other print marketing materials, said it’s much cheaper to use a payroll service than to do the work himself or hire a bookkeeper to do it.
  • Saving time: Katherine Niefeld, the president and founder of blink PR, estimates she saves several hours a week by using her payroll service.
  • Focusing on core competencies: Not having to spend time becoming an expert on the payroll process is what attracted David Johnson, a partner with the online Pickleball store PickleballCentral.com, to payroll services.
  • Employee access: Greg Szymanski, human resources director for real estate development and home construction management company Geonerco Management LLC, said that with payroll services, his staff members can log into their accounts on their own when changes need to be made.
  • Mobile access: Ty McLaughlin, chief financial officer for Web-based application provider OnceLogix LLC, likes that he can log into his payroll service from anywhere.
  • Error reduction: David Sabot, president of CheapHumidors.com, said he likes using online payroll services because it ensures no manual errors occur when writing out employee checks. He said using an
automated payroll service has allowed his company to navigate the often-complicated waters regarding payroll taxes, withholdings, insurance, profit-sharing and 401(k)s.
 We spoke to a Maya Konviser, owner of a botique payroll service in Los Angeles, CA, Accounting, Taxes, and Payroll Partners. She pointed to the benefits of using a smaller payroll company:
For the most part, when you turn over your payroll to a service company, you usually want to give them the data in a timely fashion and then forget about it. You are then freeing up your time and your energy for more important issues. Any payroll service provider can do that for you.
But there will always be times when you need to speak with someone at the payroll service provider about a payroll question. It is at those times when you will be much happier with a small company like ours. You are assigned to a highly qualified payroll tax specialist who will be your permanent contact. They will know your business and your issues. As a result, you will get fast and efficient resolutions of any issue that comes up. And that extra level of service commonly costs no more than the huge companies.
If you are currently doing your own payroll, follow my Grandpa Kirk's advice. and give Maya a call. You can reach her at (818) 436-2775 ext 103. Or if you are using a payroll company, but are not happy with their service for any reason, Maya might have a better solution.
 



Sunday, February 01, 2015

Twitter for Small Business - What You May Not Know Could Help You

Your Tweets get found on Twitter by keywords - but not on Google


I do a lot of blogging for my clients. These blogs generally get over 10,000 page views per month. Most of those page views do NOT come from Google. They come from Twitter.

You see Google search (Bing, Yahoo, etc.) is totally clogged. The amount of content on the internet is doubling every year, and there is no end in sight. But the amount of content that can be consumed by the folks is not increasing at the same rate. This is making the competition for those eyeballs more and more expensive to acquire. Where I may have posted on a blog five years ago and seen that post on page one under some keywords I cared about. Not so today. Not without a lot of extra work or much more careful selection of the keywords. Even when successful, the readership will be less.

How do we business owners get better at reaching our clients online with that content. We need to find out how they are searching. And the search engines of the future may be more tied to social media than to the wide open spaces like Google.

Twitter's search engine only searches Tweets. If you search by a person or keyword or hashtag, it isn't going to give you results for YouTube or a website or a blog. Because not very many folks are paying attention yet, it is still possible to dominate Twitter search with a few good Tweets per day. These tweets can be linked to your blog, website, video, etc., and can contain a phone number or other ways to directly reach you.

In addition, many Twitter users have set up key word alerts that are always searching for certain words they care about. Commonly this would be their favorite sports team, their college, or their home town. If someone Tweets that there is a great party going on in Columbus Ohio, and you are alerted for Columbus, you'll find out about the party. Google has an alert system like this, but it is not nearly so popular as Twitters, because Twitters content is social and immediate.

Small business owners will find that in today's internet scramble to find new customers, the time and energy will be better spent on YouTube, blogging, Twitter, and Linkedin. If you'd like to be a part of that future, give me a call at 310-910-1848.

Saturday, January 31, 2015

An Alternative to LeTip and BNI - Networking on Steroids

 

Business Networking Power Groups now forming

I recommend that small businesses join local networking groups in my business books. I even used to get out of bed extra early and be ready to do business at 7:00 a.m. every Tuesday morning. During the week I would feel the pressure of bringing a tip or lead or referral. And for all that pressure and effort, I also paid a steep price for membership and breakfast. GOOD NEWS! I got a huge ROI that still brings me income years later. I am a huge fan of networking groups.

REALLY GOOD NEWS!

There is a better way. No more meetings. No more pressure. No more faking like you think the folks in your group are all the best at their craft. And the ROI?  No one can guarantee anything, but the potential for this new approach is staggering...I think you will agree when you hear the details.

Put together a power team of businesses who share many of the same clients!

If you've been to networking groups, many of the members are totally unrelated to your business. In fact, most networking groups advise that an effort be made to form power sub groups within the larger club. Why not start with that idea in mind? Build the networking members 100% from other non-competing businesses who already share connections with your clients.

For example:  
  • The wedding business - photographer, limo service, bakery, jewelery store, flowers, etc.
  • Real estate - RE agent, mortgage broker, insurance agent, escrow officer, etc
  • Health and fitness - gym, spa, chiropractor, bike shop, nutritionist, personal trainer, etc.
  • Building trades - contractor, plumber, electrician, landscaper, painter, interior designer
You get the idea. There are many dozens of similar type groups that you can think of easily. Where does your business fit in? How many other businesses can you think of that share your customers?

Do away with the meetings, the pageantry, and the required leads

I'm not against going to meetings, and maybe your group will decide to meet on occasion for some food and fellowship. And out of those relationships, you may choose to refer one another. GREAT!
Just one such lead a month would likely make joining such a group worthwhile, and even worth paying a few hundred dollars to belong. For most businesses, a single referral from a trusted resource would be worth at least a few hundred dollars.

Reduce the time commitment to almost zero

Most of these meetings take about about 8 hours a month of your precious time. Even if you only bill your time at $50 an hour, that is a $400 a month commitment. Add that to the actual expense! As noted above, even at that cost, my involvement in LeTip paid off big time. But what if I could get a better result, and my time commitment was around two hours a month. And what if I could get out of that two hour commitment by paying an extra $150. Now I'm down to pretty close to zero of my time.

Business Networking Power Groups are almost a miracle

All we need to make it work are these ingredients:
  1. Seven - nine businesses all sharing some of the same customers
  2. Each business must have an email list or be willing to start assembling one
  3. Each business must have 500+ connections on Linkedin or be willing to spend a bit of time or money acquiring those connections. (Under 3 hours if no connections now)
  4. Each business must write two 500 word articles per month relevant to their own business or pay to have that article written ($50 each)
 THAT'S IT! 

We will do the rest. Here is what we promise you will receive for your participation and dues:
  • You will be showcased on the masthead of a website/blog developed specifically for the group
  • You will have additional information about your company on an inside page of the website
  • You will have multiple backlinks from the site to your website that will help your SEO
  • Your business will be viewed on that website/blog a minimum of 10,000 times per month
  • Your business will be tweeted about on various Twitter accounts 72 times per day minimum
  • Your business will be seen on the other members Linkedin updates at least once per day each 
  • Your business will be seen on email blasts that go out to all members email lists twice each month
The total impressions from the above will be at least 20,000 per month by the end of three months. We expect that it will be substantially more than that.

What would you expect to pay for 20,000 impressions per month in such a focused way?

There are all kinds of ways to pay for impressions. Some are 10¢ a piece, but those are usually not nearly so focused as these. But if we use that number, $2000 a month would be reasonable. You know what it takes for you to make that $2000 back. For some, like a real estate broker or a lawyer, it might only take one new client.  For others, like the wedding bakery, it might take 5 new clients.  

We can't guarantee anything, but we would speculate that you will get enough clients just from personal referrals of the group members to pay that $2000. Why? Because it is a power group. You actually provide a excellent service to your client if you can recommend related businesses to help them with their needs. 

Automation makes this deal a steal!

We have created a method for automating this entire effort - except for the article writing. The automation does cost us bunch to set up and then to operate. But while we could probably charge $2000 for this opportunity, we don't have to. In fact, we are highly confident that we would be turning away business if we offered the deal at $995 a month. 

We have honed the process and tested it extensively, and we are excited to be able to offer all of the above benefits: the website, the tweeting, the Linkedin updating, the email blasting, and the organization and backroom needs for much less.  In fact, for the first 25 groups that we set up during February 2015, we are able to set those dues at just $235 a month. 

Call 310-910-1848 to get started on setting up a power networking group for your business.

You could be the lucky business who gets the entire package for FREE!

We need organizers. We need someone who will round up six other businesses and get the club started. We'll help with materials, videos, phone calls, webinars, or whatever else you might need to help get those other six - nine members. (No more than nine to a group) The company who does the organizing gets all the benefits for free. Caveat - the organizer still has to write two articles per month or pay to have those articles written for them. 

If you would like to be an organizer, call 310-910-1848 Now!

Or
Start Your own Business Network Power Groups business - we need business owners or just good organizers who'd like to start up groups as a full-time or part-time business.  Send your resume' or your Linkedin URL to RandyKirk77@gmail.com

Thursday, April 10, 2014

Video Marketing Rocks! 90% of Consumers Use Video in Research

 

ROI on video is off the charts for most small local business owners


According to Media Post Publications:

Consumers Who Watch Product Videos Spend More on the Product

If a brand isn’t offering product videos on its website, it’s missing a potential marketing and engagement opportunity. 
About 90% of consumers watch online videos, and online shoppers are nearly twice as likely to make a purchase than consumers who do not view video, according to new research from video marketing firm Invodo.

Video is also a key opportunity because of its engagement rate. About 65% of video viewers watch videos through to 80% completion. Most videos end on a product tag or logo, so not watching the final seconds isn’t a huge loss. Consumers are responding well to videos on ecommerce sites, where most videos overall generate a 4.3 rating on a 5-star scale, a promising figure that suggests consumers do value the content in them. On average 12% of visitors to an ecommerce web page view a video when one is available. Many of those visitors often spend more money.

As an example, L’Oreal’s Kerastase hair care line runs videos about the products and then links from the videos to a shopping page. The average value of an order for consumers who viewed the hair care videos was 18% higher than for those who did not, Invodo found.

Invodo recommends integrating videos widely across a brand’s site from search results, to category pages, to landing pages, so that the video can meet the consumers wherever they are. Video can also be syndicated to partner sites, mobile apps, in stores, on reseller sites and in email.

Emails with the word  “video” in the  subject line generate 18.5% higher open rates, Invodo adds.

 My clients have the same experience.  Whether a mortgage broker, a tax resolution company, a bike shop or a personal trainer, videos make the phone ring and the door swing.