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Description
Learn how to start a business, from A to Z. Evaluate your business idea, pitch to investors, hire your first employees, court mentors, attract excellent board members, hire an amazing first team, monetize your product, track your revenue, market on a budget, get customers and keep them!
Document Sample
How to Start a Business
by
Jason
Nazar
You will learn how to...
Create an action plan to start your
business within 90 days.
If you’ve already started a
business, learn how to fill in the
blanks.
Build and provide a quality
product or service
Fund or raise money for
your business
Get and keep customers
Based on
a lecture by...
Jason Nazar
Edited & designed by Rochelle Bailis
The use of a trademark in this eBook does not signify or suggest the endorsement,
affiliation, or sponsorship, of or by us of those trademark owners or their products or
services, or they of us or ours. Docstoc® is a registered trademark of Docstoc, Inc.
Other names, logos, and marks may be trademarks of their respective owners.
Table of Contents
1.
Overview:
What
You’ll
Gain
From
This
Course
a) Who
am
I
and
How
Can
I
Help?
2.
Why
Start
a
Business
a) Passion:
What’s
Your
Why?
b) Sustaining
Urgency
and
Momentum
for
Success
c) The
Only
Failure
is
Not
to
Start
3.
IdeaPon:
Evaluate
the
PotenPal
a) The
Fallacy
of
the
“Good
Idea”
b) The
Idea
Checklist:
Does
Your
Idea
Make
the
Cut?
c) Lifestyle
vs.
Liquidity
Business
4.
ProtecPng
Your
Idea
a) When
to
Share
Your
Idea
b) Understanding
Copyrights,
Trademarks,
Patents
and
Trade
Secrets
c) Sharing
InformaPon
Safely
with
NDAs
5.
Business
Plans
that
Will
Get
You
Funded
a) 10
Key
QuesPons
to
Address
in
a
Business
Plan
b) A
Business
Plan
Deck
that
Will
Impress
Investors
c) CreaPng
Accurate
Financials
6.
Se`ng
Up
the
Business
Properly
a) Choosing
the
Right
Structure
for
Your
Business
b) EssenPal
Filing
and
Business
Checking
c) Licenses
&
Business
Insurance
7.
Building
Brand
IdenPty
a) Register
the
Perfect
Name
and
Logo
b) The
Best
Tools
for
Physical
Collateral
&
Phones
c) Secure
Online
Presence:
Website,
Email
and
Social
Media
8.
Beeer
Business
OperaPons
a) IdenPfying
and
Securing
a
the
Best
LocaPon
b) Tips
for
Working
with
Professional
Vendors
c) Tools
and
Services
to
Streamline
OperaPons
9.
Service
Based
Businesses
a) You
are
Your
Product
b) Go
Right
to
Ge`ng
Customers
c) Scale
Expenses
Along
with
Demand
10.
Building
and
Selling
Physical
Products
a) Leveraging
Slideware
and
Prototypes
to
Garner
Interest
b) Securing
Pre-‐Sales
Contracts
to
Increase
Growth
c) Easily
Selling
Your
Products
Online
11.
Building
and
Growing
an
Online
Product
a) 3
Golden
Rules
b) Keys
to
Building
a
Superior
Online
Product
c) Ge`ng
Feedback
and
GeneraPng
Users
12.
Raising
Money
and
Financing
a) The
5P’s:
Selling
Yourself
b) Understand
and
Find
Sources
of
Capital
c) Mastering
the
Pitch
13.
Building
an
Amazing
Team
a) The
Standard
for
Partners,
Employees
and
Investors
b) The
Best
Way
to
Recruit
c) Issues
with
Partners,
Early
Employees
and
Equity
14.
HR
EssenPals:
Beeer
Management
a) QuesPons
for
Interviewing
Candidates
b) Properly
Hiring
and
Firing
Employees
c) Issuing
Payroll
and
Benefits
15.
Guide
to
Ge`ng
Customers
a) #1
Reason
Why
Businesses
Fail
b) Why
You
Can’t
Outsource
Sales
and
MarkePng
c) What
Has
to
Be
Your
#1
Priority?
16.
Increasing
Sales
a) The
5
Step
Sales
Process
b) ProspecPng
Made
Easy
17.
MarkePng
and
PR
That
Pulls
In
Customers
a) Free
and
Paid
Online
MarkePng
Tips
b) Leveraging
PR
to
Boost
Awareness
18.
Smart
Financial
Planning
and
AccounPng
a) Key
Financial
Statements
b) CriPcal
Bookkeeping
Skills
c) Being
Prepared:
Tax
Planning
19.
The
Business
Dashboard:
Tracking
Growth
a) Defining
and
Reaching
Your
KPI’s
b) Example
1:
Tea
Time
c) Example
2:
Online
Magazine
20.
Prevent
Risk:
Primary
Legal
ConsideraPons
a) Saving
Money
When
Working
with
Business
Aeorneys
b) PrevenPng
and
Managing
Lawsuits
c) Enforcing
Your
Legal
Rights
21.
Gathering
Great
Mentors,
Advisors
and
Board
a) What
You
Don’t
Know,
You
Don’t
Know
b) CourPng
Advisors
c) Working
with
a
Board
of
Directors
22.
Buying
and
Selling
Business
a) Finding
Good
Businesses
to
Buy
b) Valuing
a
Business
c) Selling
Your
Business
23.
Strategy:
Make
the
Right
Moves
a) How
to
Make
the
Right
Business
Decisions
b) Stay
in
the
Game:
Protect
Your
Downside
Risk
24.
Philosophies
a) The
Entrepreneurs
Dilemma:
Where
do
You
Fall?
1. Overview
So who am I to lecture you on entrepreneurship?
Wherever you are in the process of starting your own business,
I’ve been there. Maybe you want to start your own company, but
you’re not sure how. You may be scared to leave your job, doubt
the validity your idea, or fear the struggles that lie ahead.
The reality is, once you start your own company, the
uncertainties only grow. How do you get funding to build your
product? Hire the best employees? Get your first set of
customers? Become profitable?
I’ve been there. I’ve asked myself these exact same questions,
and found answers through hard work, mistakes and constant
improvement. You will make mistakes too, but many of them can
be avoided by following this course.
Five years ago, after earning my JD/MBA at Pepperdine
University, I launched Docstoc with my co-founder, Alon
Shwartz. Docstoc developed from a simple document storage
site to an online resource with millions of documents, expert
videos, courses and productivity tools to make every small
business better. Docstoc grew into one of the top 500 most
visited websites, and currently has over 25 million users.
I’ve done hundreds of lectures on how to raise money, build a
business plan, grow and track revenue, etc. My goal today is to
combine all of my experiences and presentations into one
comprehensive guide on how to start a business, from A to Z.
2. Why Start a Business
StarPng
a
business
is
a
huge
undertaking.
Whether
you’re
planning
to
sell
your
business
or
live
off
the
revenue,
it
could
take
you
5
to
10
years
to
build
up
your
company
to
a
point
where
it’s
actually
profitable.
I
have
discovered
the
one
thing
that
will
moPvate
you
through
the
arduous
journey
of
entrepreneurship,
through
the
all-‐nighters,
the
doubt,
the
strain
on
your
relaPonships,
and
I
will
share
this
secret
with
you
in
this
chapter.
I’ll
also
be
talking
about
speed
and
urgency,
and
why
they
are
more
criPcal
than
perfecPonism,
genius
or
any
other
qualiPes
that
you
may
assume
lead
to
success.
What’s Your Why
A
lot
of
people
ask
successful
business
leaders
“how
did
you
do
it?”
But
the
secret
behind
their
achievement
isn’t
in
their
methods.
When
you’re
taking
on
a
huge
endeavor
like
creaPng
a
business,
the
most
important
quesPon
to
ask
yourself
isn’t
how,
but
why.
If
you
don’t
have
a
big
“why”
constantly
pushing
you
forward,
you’re
always
going
to
use
the
“what”
and
the
“how”
as
an
excuse
for
not
doing
what
you
set
out
to
do.
What’s
driving
you?
Why
are
you
starPng
a
business?
Maybe
you
want
to...
• Make
enough
money
to
never
work
again
• Create
a
product
or
service
that
helps
people
• Work
for
yourself,
and
break
out
of
the
pack
Think
about
a
why
that
resonates
with
you;
because
if
a
why
isn’t
constantly
driving
you,
you’ll
get
hung
up
on
how.
You’ll
end
up
saying
something
along
the
lines
of,
“I
was
going
to
start
this
business
but
I
couldn’t
raise
the
money.”
That’s
an
excuse.
Other
people
raised
the
money.
You
just
didn’t
have
a
big
enough
why.
Once
you
have
a
“why,”
keep
it
close;
you’ll
need
it
when
the
goings
get
rough.
The
first
two
years
of
running
DocStoc
I
was
in
that
office
every
day
15
to
16
hours
a
day,
and
today
I
sPll
work
on
average
12
hours
a
day
in
the
office.
I
remind
myself
every
day
that
anything
worth
working
for
is
going
to
be
difficult.
Chapter 2: Why Start a Business
Urgency and Momentum
As
an
entrepreneur,
perfecPon
isn’t
as
important
as
speed
and
momentum.
They
are
the
only
things
that
keep
you
ahead.
As
a
business
owner
you’re
constantly
running
against
the
wind.
If
you
stop
or
slow
down,
the
force
of
the
wind
will
knock
you
down,
and
others
will
get
ahead.
To
break
past
the
windshield
you
need
a
sense
of
urgency,
a
drive
to
keep
working,
to
improve,
to
push
forward.
I
literally
wake
up
every
single
morning
feeling
like
there’s
a
clock
of
my
life
that’s
Pcking
down.
I
believe
that
every
second
passing
is
one
less
moment
I
have
to
work
towards
building
a
successful
business.
When
I’m
not
working
towards
it,
I’m
wasPng
that
precious
second.
The Only Failure is Not Starting
The
majority
of
businesses
fail,
not
because
of
metrics,
money
or
other
inadequacies.
They
failed
because
they
were
never
started.
I’ve
been
an
entrepreneur
for
most
of
my
career,
and
I
really
don't
know
anyone
that
regrets
ever
star>ng
a
business.
I
do,
however,
meet
people
who
regret
never
trying
to
start
one.
Chapter 2: Why Start a Business
3. Ideation
There
are
thousands
of
businesses
out
there,
it
seems
like
the
only
way
to
succeed
in
business
is
to
come
up
with
an
incredibly
original
idea.
Right?
Wrong.
In
this
chapter
we
talk
about
the
fallacy
of
the
good
idea
and
what
really
maeers
when
it
comes
to
business
potenPal.
I
also
weigh
the
merits
of
sharing
your
idea,
and
present
a
handy
checklist
to
help
you
vet
the
strength
of
your
business
idea.
Finally,
I’ll
review
the
differences
between
a
lifestyle
and
a
liquidity
business,
and
how
they
affect
the
direcPon
your
business
will
take
you.
The Fallacy of the Good Idea
Ideas
Don’t
Maeer
How
many
Pmes
have
you
heard
somebody
say
“I’ve
got
a
great
idea
for
a
business?”
or
“I
want
to
start
a
business,
but
I’m
waiPng
for
the
right
idea.”
I’m
here
to
tell
you
that
ideas
don’t
ma@er,
execu>on
does.
The
truth
is,
most
successful
businesses
out
there
weren’t
born
from
from
amazing,
original,
genius
ideas.
They
were
culPvated
by
great
teams,
owners
and
an
extraordinary
work
ethic.
I’ve
seen
some
ideas
I
thought
would
never
work
become
top
businesses,
and
I’ve
seen
what
I
thought
were
great
ideas
fall
apart.
Don’t
get
too
caught
up
on
your
idea.
Too
many
people
say,
“Oh,
I
want
to
start
a
business,
but
I
don’t
have
an
original
idea
yet.”
Don’t
fall
into
this
trap
of
waiPng
for
a
brilliant
light
bulb
moment.
Quick Tip
If
you’re
looking
for
an
idea,
remember
this:
the
best,
most
successful
businesses
Get some tips from
are
based
on
taking
something
else
that's
an investor how to
successful
and
figuring
out
how
to
do
it
settle on the right
different
and
be@er. business idea.
Chapter 3: Ideation
Sharing
Your
Idea
It
can
be
difficult
to
decide
if
and
when
to
share
your
idea.
There
are
two
schools
of
thought
when
it
comes
to
this
dilemma:
1)
Keep
your
idea
secret
out
of
fear
it
will
be
stolen
2)
Share
your
idea
with
everybody
for
feedback
Guarding
your
idea
is
an
tempPng
approach,
because
it
prevents
people
from
taking
your
idea,
or
criPcizing
it.
However,
by
telling
everyone
your
plans,
you
open
up
to
a
variety
of
valuable
opportuniPes
including:
1)
Making
connec>ons
with
people
who
might
be
able
to
help
you
2) Ge`ng
valuable
feedback
from
a
large
pool
of
people
3) Adding
social
pressure
to
follow
through
with
your
goals
The
final
benefit
is
key
because;
if
you
have
any
integrity
and
self-‐
worth,
you’ll
be
more
likely
to
actually
kick
off
your
business.
Put
yourself
in
a
posiPon
where
you
feel
as
much
pressure
as
possible
to
follow
through,
and
you’re
more
likely
to
get
through
the
hardest
part
of
running
a
business:
starPng
it.
Chapter 3: Ideation
The Idea Checklist
□ Does
it
solve
other
peoples’
problems
□ Do
a
lot
of
people
have
this
problem
□ Am
I
passionate
about
the
idea
□ Am
I
willing
to
commit
the
next
5-‐10
years
of
my
life
to
this
idea
□ Are
others
successfully
doing
something
similar
□ Does
it
have
too
many
compePtors
□ Can
I
do
something
substanPally
different
or
beeer
than
others
□ Can
I
build
the
businesses
on
my
capital
resources
□ Could
I
have
an
product
and
customers
in
90
days
or
less
□ Are
potenPal
customers
giving
overall
posiPve
feedback
over
75%
of
the
Pme
□ Do
I
have
a
background
&
skill
set
compaPble
with
this
business
□ Do
I
have
compePPve
advantage
on
how
to
get
customers
□ If
I
don’t
start
this,
will
someone
else
□ Can
I
court
mentors
who
have
been
successful
doing
something
similar
□ Does
it
have
a
high
likelihood
of
success
□ Does
the
business
risk/reward
match
my
personal
risk/reward
□ Does
it
help
me
fulfill
my
purpose
Chapter 3: Ideation
Lifestyle vs. Liquidity Business
Lifestyle
Business
A
lifestyle
business
is
a
smaller
company
that
is
usually
funded
personally
or
Examples:
through
a
bank
loan.
Lifestyle
businesses
steadily
generate
profit
throughout
their
life,
and
are
built
to
be
sustainable. A boutique shop,
a small-scale
retail store, a
salon, a
specialized
consultancy, a
daycare
Chapter 3: Ideation
Liquidity
Business
A
liquidity
business
is
a
high-‐
Examples: growth
business
idea
that
oten
requires
large-‐scale
Websites, mobile funding,
including
angel
and
technology such as venture
capital
rounds.
This
apps, large scale business
usually
makes
the
manufacturing or most
of
its
money
through
a
production large
liquidity
event.
Resources Recap
•
Seeling
on
a
business
idea
(video)
•
When
to
share
your
business
idea
(video)
•
Is
your
business
fit
for
venture
capital?
(video)
•
Bonus:
(Startups
Lecture)
•
The
Idea
Checklist
(Doc)
Chapter 3: Ideation
4. Protecting Your Idea
So
you
want
to
get
feedback
on
your
business
idea,
but
how
do
you
share
it
safely?
Maybe
you
decided
on
a
catchy
business
name
and
slogan.
How
do
you
protect
them
from
being
stolen
by
a
compePtor?
In
this
chapter
I
walk
through
how
and
when
to
protect
your
intellectual
property,
including
trademarks,
copyright,
trade
secrets
and
patents.
We
will
also
explore
NDAs
(Non-‐
Disclosure
Agreements),
and
how
they
can
help
you
rest
a
liele
easier
when
sharing
your
idea
with
other
people.
Keep
your
ideas
safe,
and
keep
your
mind
at
ease!
Intellectual Property
Intellectual
Property
is
ownership
of
something
intangible,
such
as
an
idea,
design,
concept
or
formula.
Entrepreneurs
use
intellectual
property
to
protect
their
business,
here
are
its
4
forms:
Type of work Examples
a
work
of
literature,
source
1. Copyright code,
a
musical
authorship
composiPon
a
sign
or
indicator
logos,
slogans,
2. Trademark associated
with
a
or
brand
images
brand
a
work
of
a
machine,
3. Patent process
or
invenPon
physical
product
a
process
or
formula
that
the
Coca
Cola
4. Trade Secret recipe
retains
value
by
remaining
secret
Chapter 4: Protect Your Idea
Copyright Symbol: ©
Copyright
applies
to
original
works
of
authorship
such
as
a
book
or
a
play,
but
it
also
covers
creaPve
art
including
photographs,
painPngs,
drawings
and
sculptures.
Legally,
your
content
is
copyrighted
upon
creaPon.
That
means,
the
poem
or
doodle
you
scribbled
into
your
notebook
automaPcally
belongs
to
you
under
copyright
law.
The
important
trick
in
cases
of
dispute,
however,
is
proving
that
you
created
the
work
first.
Some
people
seal
and
mail
works
of
authorship
to
themselves
in
order
to
create
a
clear
date
stamp.
You
can
also
register
with
the
US
Copyright
Office
for
about
$35
per
work.
This
allows
you
to
more
easily
sue
those
who
infringe
upon
your
copyright
for
damages.
Trademark Pending: ™ Symbol: ®
Trademarks
apply
to
logos,
slogans
and
other
clear
designaPons
of
a
brand
or
individual.
For
example,
both
the
word
“docstoc”
and
our
logo
are
trademarked.
You
can
trademark
a
single
word,
or
an
enPre
phrase,
like
Nike’s
renowned
“Just
do
it.”
Trademarks
can
be
filed
with
the
government
for
about
$300
at
the
US
Patent
and
Trademark
Office.
Like
a
copyright,
filing
a
trademark
is
a
fairly
simple
process,
and
can
most
likely
be
done
on
your
own.
Chapter 4: Protect Your Idea
Patent
Patents
apply
to
new
and
useful
invenPons,
and
are
more
complicated
to
file
than
copyrights
or
trademarks.
They
are
also
filed
through
the
US
Patent
and
Trademark
Office,
Quick Tip
and
many
cases
it
is
advisable
to
involve
an
You can check if
aeorney
in
a
patent
applicaPon.
your idea for a
business name, a
It
is
for
this
reason
that
I
advise
99%
of
domain or patent
business
owners
to
not
focus
too
intently
on
has been taken yet
ge`ng
a
patent
immediately.
You
should
by searching
direct
that
energy
on
ge`ng
customers
and
Trademarkia.
building
out
your
product.
I
oten
come
across
people
who’ve
put
Pme
into
ge`ng
several
patents,
but
sPll
haven’t
goeen
any
customers.
In
this
case,
prioriPzing
patents
ended
up
being
detrimental
to
their
business.
Trade
Secret
Trade
Secrets
are
processes,
formulas
or
designs
that
must
be
kept
secret
in
order
to
retain
their
value.
The
classic
example
is
the
Coca
Cola
formula.
If
its
formula
were
to
be
released,
compePtors
could
reproduce
their
classic
taste
and
Coca
Cola
would
have
a
case
for
lost
damages.
Chapter 4: Protect Your Idea
Non-Disclosure Agreements
I
menPoned
in
the
“IdeaPon”
secPon
that
sharing
your
idea
with
others
is
a
great
way
to
vet
it.
It
can
be
helpful
to
share
your
concept
or
design
with
a
potenPal
partner
before
you’ve
launched
it,
or
someone
in
the
field
who
can
provide
helpful
feedback.
Whether
your
idea
is
original
or
an
improvement
of
what’s
out
there,
you
may
be
interested
in
keeping
your
product
or
approach
secret
while
it’s
in
development.
One
way
to
maintain
some
level
of
security
when
you
share
your
ideas
is
Quick Tip through
an
NDA
(Non-‐Disclosure
Agreement).
NDA’s are great, but
The
NDA
details
the
sensiPve
material
keep in mind that
being
discussed,
and
legally
requires
almost no investors
confidenPality
from
all
parPes
involved.
will be willing to
sign an NDA, so
In
the
case
of
business
deals
or
don’t expect that
partnerships,
where
both
enPPes
are
when sharing your
sharing
classified
informaPon,
parPes
idea with a venture usually
sign
a
mutual
NDA,
which
or angel investor. means
both
companies
share
and
keep
the
informaPon
secret.
Chapter 4: Protect Your Idea
Vocabulary:
Other
Terms
to
Consider
Blurring:
When
an
adverPser’s
disPncPve
mark
is
used
on
unauthorized
products
Dilu>on:
Lessening
the
capacity
of
a
famous
mark
to
idenPfy
and
disPnguish
a
business
Inventor’s
Notebook:
Used
by
inventors,
scienPsts
and
engineers
to
record
their
invenPon
process
to
help
establish
dates
of
concepPon
for
patent
contestaPons
Parody:
An
imitaPve
work
created
to
mock
or
comment
on
a
target,
protected
under
the
First
Amendment
Sa>re:
A
funny
piece
of
literature
or
art
lined
with
sarcasm
and
irony
to
criPque
a
target,
where
use
of
trademarks
are
not
legally
protected
under
the
First
Amendment
Subpoena:
A
request
to
provide
tesPmony
or
evidence
to
the
courts
Tarnishment:
When
a
mark
becomes
linked
to
products
of
inferior
quality,
or
is
portrayed
in
an
unsavory
context
Term:
Amount
of
Pme
IP
is
protected
(for
example,
a
patent
term
is
20
years)
Chapter 4: Protect Your Idea
Resources Recap
•
US
Copyright
Office
•
US
Patent
and
Trademark
Office
•
Trademarkia
•
Intellectual
Property
Agreements
(legal
document
package)
•
How
to
protect
your
idea
(course)
•
Safely
start
a
business
while
you’re
employed
(video)(video)
•
NDA
(custom
legal
document)
•
Copyrights
•
What
is
a
copyright?
(video)
•
Copyright
Licensing
Agreement
(custom
legal
document)
•
Trademark
•
What
is
a
trademark?
(video)
•
Trademark
Licensing
Agreement
(custom
legal
document)
•
Patents
•
What
is
a
patent?
(video)
•
Parts
of
a
patent
applicaPon
(video)
•
Cease
and
Desist:
re:
Patent
(custom
legal
document)
Chapter 4: Protect Your Idea
5. Business Plans
Your
business
plan
is
more
than
just
a
piece
of
paper,
it’s
the
foundaPon
of
your
business.
It’s
not
only
a
roadmap
for
your
business
strategy,
it’s
a
powerful
sales
tool
that
will
help
you
get
funding
and
develop
interest
in
your
product.
In
this
chapter
I
walk
through
the
top
ten
key
quesPons
to
ask
about
your
business
that
will
help
you
develop
a
winning
business
plan.
We’ll
review
key
terms
that
are
covered
in
most
business
plans,
and
explore
resources
that
will
help
you
perfect
your
pitch.
10 Key Questions To Address
1)
What
is
the
product?
Answer
in
30
seconds
or
less.
2)
What
is
the
unique
value
proposi>on?
What
makes
you
different
or
beeer
than
your
compePtors?
3)
What’s
the
market
opportunity?
What
problem
are
you
solving?
How
large
is
the
market
opportunity?
How
many
dollars
are
spent
on
it
every
year?
How
fast
is
it
growing?
4)
How
will
this
idea
make
money?
Is
it
a
subscripPon
service,
or
do
you
sell
one-‐off
products?
Do
you
make
money
on
ads?
5)
What
is
your
long-‐term
strategy?
Where
do
you
see
your
company
in
5,
10
or
15
years?
What
are
the
key
metrics
you
plan
to
hit?
6)
How
will
you
sell
or
market
your
product?
How
will
you
get
customers?
7)
How
much
capital
do
you
need
to
raise
in
order
to
become
profitable?
8)
Who
is
your
team?
Why
are
your
skills
uniquely
qualified
for
this
business?
9)
What’s
the
preliminary
evalua>on
of
your
company?
10)
What
are
the
prices
for
your
products?
Chapter 5: Business Plans
The Business Plan Deck
A
business
plan
is
a
great
exercise
and
guideline
for
you
to
follow,
but
most
people
don’t
want
to
read
a
huge
40
page
document
in
order
to
understand
what
your
company
does.
A
business
plan
deck
is
a
visual
representa>on
of
your
business
plan,
usually
designed
on
PowerPoint.
It’s
mainly
a
sales
tool
used
to
pitch
your
business
idea
to
investors.
A
few
keys
to
you
business
deck:
• Keep
it
around
15
slides
• Address
each
of
the
10
ques>ons
laid
on
on
the
previous
page
• Spend
a
few
slides
on
your
product,
detailing
examples
• Don’t
exceed
30
words
per
slide
• Include
aeracPve
pictures
and
graphics
Business Deck Resources
If you’re ready to get started making your business deck, check
out this a business deck template, and be sure to avoid these
business plan mistakes that will turn off investors.
Chapter 5: Business Plans
The Financials
The
part
of
the
business
plan
that
usually
trips
people
up
are
the
financials.
The
key
thing
you
want
to
idenPfy
are
your
core
metrics.
How
will
you
idenPfy
when
you’ve
been
successful?
What
metrics
will
you
use
to
benchmark
your
success?
Whether
or
not
you’re
math
oriented,
it’s
criPcal
Quick Tip
that
you
understand
the
basic
assump>ons
that
For a jumping-off
drive
you
financial
model.
point, check out this
spreadsheet of
You
may
choose
to
hire
a
Financial Model
consultant
or
get
other
Projections.
help
wriPng
your
business
plan,
but
it’s
sPll
criPcal
that
you
understand
the
financial
drivers
that
will
Let the COO of
ulPmately
lead
to
the
success
of
your
business.
Docstoc guide you
through creating
accurate financial
If
you
don’t
have
a
strong
forecasts in this helpful
grasp
on
this,
you
won’t
be
able
to
properly
operate
video.
your
business.
Chapter 5: Business Plans
Vocabulary:
Terms
to
Know
Assets:
A
resource
with
economic
value
that
an
individual,
corporaPon
or
country
owns
with
the
expectaPon
that
it
will
provide
future
benefit
Business
Plan
Deck:
A
slideshow
breaking
down
a
business
model,
oten
using
powerpoint
Budge>ng:
A
financial
plan
and
a
list
of
all
planned
expenses
and
revenues,
used
to
provide
a
forecast
of
revenues,
and
enable
cost
constraints
Capital
Expenditure
(CAPEX):
Funds
used
by
a
company
to
acquire
or
upgrade
physical
assets
such
as
property,
industrial
buildings
or
equipment
COS/COGS:
Cost
of
goods
sold
(or
cost
of
sales),
meaning
the
cost
of
purchasing
materials,
developing
and
finishing
your
product
CPA:
Cost
per
acquisiPon
Current
Assets:
Assets
that
can
be
converted
into
cash
within
one
year
in
the
normal
course
of
business,
including
money,
accounts
receivable,
inventory,
marketable
securiPes,
prepaid
expenses
and
other
liquid
assets
Current
Liabili>es:
A
company's
debts
or
obligaPons
that
are
due
within
one
year.
Current
liabiliPes
appear
on
the
company's
balance
sheet
and
include
short
term
debt,
accounts
payable,
accrued
liabiliPes
and
other
debts
Differen>a>on:
A
markePng
process
that
showcases
the
differences
between
products
Equity:
On
a
company's
balance
sheet,
the
amount
of
the
funds
contributed
by
the
owners
(the
stockholders)
plus
the
retained
earnings
(or
losses)
Chapter 5: Business Plans
Execu>ve
Summary:
A
short
secPon
of
a
business
plan
that
summarizes
it
in
such
a
way
that
readers
can
rapidly
become
acquainted
with
the
full
plan
Financials:
A
summary
form
of
a
company's
earnings
statement,
balance
sheet
and
cash
flow
statement
Liabili>es:
The
aggregate
of
all
debts
an
individual
or
company
is
liable
for.
Calculated
by
summing
all
short
and
long-‐term
debt,
along
with
any
off
balance
sheet
liabiliPes
that
have
been
incurred.
Mone>za>on:
To
convert
into
money.
Net
Income
(Profit):
Business
revenues
minus
expenses,
a
more
accurate
view
of
your
revenue.
Opera>ng
Expenses:
A
category
of
expenditure
that
a
business
incurs
as
a
result
of
performing
its
normal
business
operaPons.
Product:
The
thing
produced
by
labor
or
effort,
to
be
sold
and
distributed
for
profit.
Profit
Margin:
A
measurement
of
business
profitability
determined
by
calculaPng
the
net
profit
as
a
percentage
of
the
revenue.
(Net
Income
/
Revenue)
x
(100)
Sales
Profit
(Gross
Profit):
A
company's
revenue
minus
its
cost
of
goods
sold.
Segmenta>on:
A
markePng
term
referring
to
the
dividing
of
prospecPve
buyers
into
groups
(segments)
that
have
common
needs
and
will
respond
similarly
to
a
markePng
acPon.
Service:
Intangible
equivalent
of
goods,
to
be
commodiPzed
and
sold
for
a
business
Target
Customer
(Target
Market):
The
consumers
a
company
wants
to
sell
its
products
and
services
to,
and
to
whom
it
directs
its
markePng
efforts.
Chapter 5: Business Plans
Resources Recap
•
Business
Plans
•
Business
Plan
Starter
Kit
(legal
document
package)
•
Business
Plans:
Perfect
the
Pitch
(course)
•
Business
Plan
Template
(document)
•
Market
research
for
a
business
plan
(video)
• EvaluaPng
market
size
and
compePPon
(video)
•
Product
descripPon
for
a
business
plan
(video)
•
Business
Plan
Deck
•
Business
Plan
PresentaPon
Template
(PPT)
•
How
to
create
a
winning
pitch
deck
(video)
•
Mistakes
to
avoid
in
your
business
plan
(video)
•
Financials
•
Financial
Model
ProjecPons
(document)
•
CreaPng
accurate
financial
forecasts
(video)
•
Accurately
determining
business
plan
expenses
(video)
•
Mistakes
to
avoid
with
financial
projecPons
(video)
Chapter 5: Business Plans
6. Setting Up the Business
StarPng
a
business
involves
a
lot
more
than
simply
wriPng
a
business
plan
then
diving
in.
Se`ng
up
and
registering
your
business
isn’t
a
glamorous
process,
but
it’s
criPcal
to
take
care
of
before
you
start
operaPng.
First
and
foremost,
you
need
to
select
a
business
en>ty,
such
as
a
C-‐Corp
or
an
LLC.
Once
you
have
a
structure,
you
must
register
with
your
state
and
federal
government,
and
may
be
required
to
obtain
certain
licenses
and
permits
to
maintain
compliance.
You
may
also
want
to
consider
insurance
opPons
to
protect
your
business
in
case
of
liability.
One
costly
lawsuit
could
mean
the
end
of
your
business—don’t
get
caught
unprepared.
Choosing the Right Structure
All
businesses
must
be
legally
recognized
as
an
enPty,
here’s
an
overview
of
the
different
types
of
structures
you
can
choose
from:
an
unincorporated
business
run
by
1. Sole Proprietorship an
individual
who
is
personally
liable
for
any
financial
debts
similar
to
a
sole
proprietorship,
but
2. General Partnership between
two
or
more
individuals
a
Limited
Liability
Company
allows
owners
limited
personal
liability,
3. LLC doesn’t
have
stock,
and
enjoys
pass-‐
through
taxa>on
like
a
partnership
a
company
whose
owners
own
4. C-Corp shares
of
stock,
subject
to
double
taxa>on
a
corporaPon
that
qualifies
to
avoid
5. S-Corp
double
taxaPon
a
Limited
Liability
Partnership
is
a
business
partnership
in
which
one
of
6. LLP more
partners
have
limited
liability
Chapter 6: Setting Up Your Business
Sole
Proprietorship
A
Sole
Proprietor
is
a
business
of
one,
and
is
actually
the
most
common
business
type
in
the
US.
Examples
of
sole
proprietors
include
aeorneys,
plumbers
and
consultants.
By
simply
selling
a
service
or
product,
you
are
a
sole
proprietor.
It
is
the
most
basic
form
of
a
business,
and
doesn’t
require
complicated
filing.
A
couple
registraPon
steps
recommended
for
a
sole
proprietor
are:
1) Get
a
business
license
from
your
city
or
county.
You
can
do
this
by
simply
searching
“Los
Angeles
City
business
license”
and
following
the
steps.
2)
Unless
you’d
like
your
business
to
be
idenPfied
by
your
name,
register
for
a
ficPPous
business
name
(DBA,
Doing
Business
As).
DBA
registraPon
procedure
varies
by
state,
see
the
Small
Business
AdministraPon
website
on
how
to
register
in
your
area.
Chapter 6: Setting Up Your Business
General
Partnership
General
Partnerships
are
simple
business
structures
similar
to
sole
proprietorships
except
that
they
are
run
by
two
or
more
individuals.
The
key
to
a
successful
partnership
is
drating
a
solid
partnership
agreement
that
covers
terms
of
the
business
partnership,
such
as
ownership
percentages
and
who
collects
the
profits.
For
more
helpful
documents
related
to
partnerships
check
out
this
package.
Know the Risks: Personal Liability
Both partnerships and sole proprietors enjoy easy registration
and operation procedures, but they carry significant risks
when it comes to lawsuits or financial debt.
Owners of sole proprietorships and partnerships have primary
personal liability for the expenses and debts of their
company.
Unlike with corporate entities, which are recognized as
separate from the owner, if somebody sues your sole
proprietorship they can go after your personal assets.
The most popular entity that avoids this risk is an LLC, read
on to see if that option fits for your business.
Chapter 6: Setting Up Your Business
Limited
Liability
Company
(LLC)
An
LLC
is
somewhat
of
a
blend
between
a
partnership
and
a
corporaPon.
Unlike
sole
proprietorships
and
partnerships,
it
does
require
registraPon
on
the
state
and
federal
level,
but
it
provides
several
benefits
worth
considering:
1) Low
set-‐up
fee:
It
costs
less
to
register
for
an
LLC
than
for
a
corporaPon.
RegistraPon
fees
can
range
anywhere
from
$100-‐800
depending
on
the
state.
LLCs
also
usually
pay
several
hundred
dollars
of
annual
filing
fees.
2) Pass-‐through
tax
en>ty:
In
an
LLC,
you
are
only
taxed
on
your
personal
income,
not
the
enPre
profits
of
the
company.
3) Limited
liability:
For
example,
if
your
LLC
is
sued,
the
prosecutor
can
only
sue
for
your
business
assets,
not
your
personal
assets
such
as
your
home
or
personal
savings.
LimitaPon
of
liability
(the
protecPon
of
“the
corporate
veil”
)
is
an
advantage
that
LLCs
and
corporaPons
share.
The
corporate
veil
recognizes
the
company
as
a
separate
enPty
from
the
individual.
The
LLC
is
an
aeracPve
opPon
for
many
business
owners
as
it
offers
the
best
of
both
worlds:
savings
from
pass-‐through
taxaPon
and
protecPon
from
liability.
It
is
a
popular
choice
for
retail
stores,
real
estate
business
or
growing
consulPng
firms.
If
you’re
considering
selling
product
online,
consider
forming
an
LLP
(limited
liability
partnership).
Click
here
to
review
helpful
documents
for
se`ng
up
your
LLC.
Chapter 6: Setting Up Your Business
C-‐CorporaPon
C-‐CorporaPons
are
ideal
for
big
companies,
or
those
with
the
potenPal
to
grow
into
much
larger
businesses.
Although
your
corporaPon
may
expand
elsewhere,
you
should
incorporate
your
business
in
the
state
where
you’ll
be
handling
most
of
your
operaPons.
The
corporaPon
is
broken
down
into
3
key
parPes:
Board of Directors Shareholders Officers
The directors Partial owners Managers of a
of the in the company put
company who company. in place by the
are ultimately Each owns board to run
responsible for “shares” or the business,
the major percentages of includes the
decisions of the company. CEO, CFO and
the company. CTO.
In
a
smaller
company,
one
person
may
be
all
three
of
these
posiPons.
For
those
seeking
large-‐scale
funding,
corporaPons
are
ideal
because
they
can
more
raise
capital
from
a
greater
number
of
investors.
It
also
offers
the
protecPon
of
personal
assets
through
the
corporate
veil.
Chapter 6: Setting Up Your Business
A
disadvantage
of
C-‐CorporaPons
is
double
taxa>on;
this
means
that
both
income
of
the
company
and
the
dividends
of
shareholders
(owners)
are
taxed.
CorporaPons
are
also
responsible
for
more
reports
and
filings,
as
well
as
the
fees
associated
with
those
procedures.
CorporaPons
must
maintain
beeer
records
than
an
LLC
or
proprietorship,
such
as
meePng
minutes.
S-‐CorporaPon
An
S-‐CorporaPon
is
similar
to
a
C-‐Corp,
but
avoids
double
taxa>on.
To
file
as
an
S-‐CorporaPon,
you
must
file
as
a
corporaPon
first,
and
the
shareholders
must
sign
and
file
Form
2553
to
become
an
S-‐Corp.
Know the Risks: Piercing the Corporate Veil
LLCs and corporations are afforded the protection of the
corporate veil, which separates personal and business assets.
However, it’s absolutely critical that you keep your personal and
business finances separate (separate bank accounts etc). If you
do not, the the corporate veil can be pierced, which means the
law no longer recognizes the owner and the business as separate
entities. In those cases, your personal assets may be at risk.
Chapter 6: Setting Up Your Business
Filing & Business Checking
Once
you’ve
decided
on
the
enPty
that’s
right
for
you,
it’s
important
that
you
properly
register
your
business,
and
set
up
a
company
bank
account.
These
acPons
both
require
a
variety
of
steps
depending
on
your
company
type,
starPng
with
registering
your
business.
For
sole
proprietorships
and
partnerships
it
isn’t
necessary
to
file
with
the
state,
however
for
an
LLC
and
corporaPon
you
will
need
two
key
documents
to
file.
Most
of
these
documents
and
resources
can
be
found
on
the
website
of
your
Secretary
of
State.
For
an
LLC,
you
will
need
to
file
the
ArPcles
of
OrganizaPon
and
an
OperaPng
Agreement
with
the
state.
The
Ar>cles
of
Organiza>on
is
a
fairly
straigh{orward
document
containing
iniPal
required
statements
to
form
an
LLC.
The
Opera>ng
Agreement
breaks
down
important
aspects
of
your
business,
such
as
the
percentage
of
ownership,
distribuPons,
responsibiliPes
and
rights.
For
an
C-‐Corp,
you
will
need
to
submit
the
ArPcles
of
IncorporaPon
and
Bylaws,
which
are
similar
to
the
two
documents
filed
for
an
LLC.
In
order
to
open
a
bank
account
you’ll
also
typically
need
to
submit
meePng
minutes,
and
a
corporate
resoluPon
authorizing
you
to
open
the
account.
A
general
partnership
does
not
need
to
file
with
the
state,
but
will
typically
need
a
Partnership
Agreement
to
open
a
bank
account.
Once
you’ve
incorporated
your
business,
you’re
going
to
have
to
file
for
an
EIN,
which
can
be
obtained
here
,
which
is
a
federal
taxpayer
ID
used
to
track
your
employee
payments.
For
a
visual
flowchart
on
this
process
see
the
next
page.
Chapter 6: Setting Up Your Business
Flowchart:
Steps
for
Filing
&
Checking
LLC: Corpora>on:
You
must
file
these
forms
You
must
file
these
forms
with
the
state: with
the
state:
1)
Ar>cles
of
Organiza>on
1)
Ar>cles
of
Incorpora>on
2)
Opera>ng
Agreement 2)
Bylaws
Sole
Proprietor
or
Partnerships:
Obtain
a
business
license
from
your
File
for
an
EIN
(federal
taxpayer
ID)
city,
and
a
ficPPous
name
or
DBA
Create
a
company
bank
account,
which
is
an
essenPal
step
for
keeping
business
and
personal
expenses
separate.
Chapter 6: Setting Up Your Business
Licenses & Business Insurance
Licenses
and
Permits
Every
company
is
required
to
have
a
business
license
from
the
city
it
operates
in.
You
can
do
this
fairly
easily
by
searching
online
for
“business
license
(the
name
of
your
city)”
and
following
direcPons
for
registering.
Depending
on
the
type
of
business,
you
may
be
required
Quick Tip
to
obtain
certain
federal,
state
License123 is an
and
local
licenses
and
permits
easy tool for finding
to
legally
operate.
the required licenses
and permits for your
It
is
important
to
make
sure
you
business type and
are
compliant
with
all
legal
location, and
requirements
to
run
your
learning how and
business
in
order
to
avoid
costly
where to file them.
penalPes
and
fines.
Chapter 6: Setting Up Your Business
Business
Insurance
Especially
as
your
company
expands,
it’s
a
good
idea
to
have
insurance
covering
the
variety
of
business
lawsuits
that
could
arise.
These
are
several
common
types
of
insurance,
for
more
informaPon
see
this
video
or
contact
an
insurance
agent.
• General
Liability
Insurance:
covers
a
variety
of
legal
hassles
due
to
accident,
injuries
and
claims
of
negligence
• Product
Liability
Insurance:
protects
against
financial
loss
as
a
result
of
a
defect
product
that
causes
injury
or
bodily
harm
• Professional
Liability
Insurance:
protects
your
against
malpracPce,
errors,
and
negligence
in
provision
of
services
to
your
customers
• Worker’s
Compensa>on
Insurance:
covers
your
business
from
liability
for
injuries
incurred
by
your
employees
while
working.
• Property
Insurance:
covers
everything
related
to
the
loss
and
damage
of
company
property
due
to
a
variety
of
catastrophic
events
• Health
Insurance:
a
variety
of
HMO
and
PPO
plans
that
cover
the
health
needs
of
employees
• Life
&
Disability
Insurance:
ensures
that
an
employee’s
income
and
family
are
protected
in
the
case
of
injury
or
death
Chapter 6: Setting Up Your Business
Review:
Key
Vocabulary
Terms
Ar>cles
of
Incorpora>on:
Rules
to
be
filed
with
state
idenPfying
informaPon
about
a
corporaPon,
such
as
the
name,
address,
purpose
and
number
of
shares
Ar>cles
of
Organiza>on:
Rules
to
be
filed
with
the
state
to
idenPfy
informaPon
about
an
LLC,
detailing
the
company
informaPon
and
management
Bylaws:
Laws
that
provide
the
internal
operaPng
procedures
for
the
governance
of
the
corporaPon
DBA:
Doing
Business
As,
a
ficPPous
name
under
which
a
sole
proprietor
does
business
Double
Taxa>on:
Tax
on
both
the
profits
of
a
corporaPon
and
the
dividends
paid
to
shareholders
EIN:
Employer
IdenPficaPon
Number
used
to
track
employee
payments,
obtained
by
filing
IRS
Form
SS-‐4
Opera>ng
Agreement:
Details
of
ownership,
distribuPon
payment
and
member’s
responsibiliPes
and
rights
Pass-‐Through
Taxa>on:
Taxes
of
a
business
are
“passed
through”
to
the
owner,
unlike
double
taxaPon
of
corporaPons
Piercing
the
Corporate
Veil:
A
legal
decision
in
which
a
corporaPon
is
no
longer
treated
as
a
separate
legal
person
Chapter 6: Setting Up Your Business
Resources Recap
•
Choosing
a
Structure
•
Full
Guide
to
and
Registering
Your
Business
(course)
•
Picking
a
Corporate
EnPty
(video)
•
Comparing
Business
Structure
Choices
(arPcle)
•
What
is
Sole
Proprietorship?
(video)
•
Sole
Proprietorship
vs.
General
Partnerships
(video)
•
LLCs
vs.
Partnerships
(video)
•
Business
Partnerships
Starter
Toolkit
(legal
doc
package)
•
What
is
an
LLC?
(video)
•
LLC
Agreement
(custom
legal
document)
•
StarPng
&
Forming
an
LLC
(legal
document
package)
•
What
is
an
S-‐CorporaPon?
(video)
•
S
-‐Corp
Shareholder’s
Agreement
(legal
document)
•
What
is
a
C-‐CorporaPon?
(video)
•
IncorporaPon
Starter
Kit
(legal
document
package)
•
Filings
&
Business
Checking
•
Opening
Your
Business
Bank
Account
(video)
•
How
to
Get
an
EIN
Number
(arPcle)
•
EssenPal
ID
Numbers
for
Your
Business
(video)
•
Licenses
&
Insurance
•
Determine
what
licenses/permits
you
need
(License
Tool)
•
Choosing
Business
Insurance
(video)
Chapter 6: Setting Up Your Business
7. Brand Identity
You’ve
taken
care
of
the
technical
details,
from
financials
to
filing,
it’s
Pme
to
give
your
company
some
personality
and
presence.
If
you
haven’t
already,
it’s
Pme
to
come
up
with
a
business
name
and
logo,
and
register
them
properly.
I’ll
discuss
simple
tools
for
creaPng
a
professional
business
presence,
including
a
company
phone
number
and
affordable
business
cards.
You’ll
also
learn
how
to
start
carving
out
an
online
presence;
website,
social
media
and
emailing
opPons.
Let’s
dive
in!
Names and Logos
The
first
step
in
coming
up
with
a
corporate
presence
is
creaPng
and
registering
your
name
and
logo.
Here
are
some
important
steps
to
lay
the
groundwork.
Come
Up
With
a
Name
• Come
up
with
a
business
name
that’s
meaningful
to
you.
• If
you’re
having
trouble,
consider
a
Ptle
that
in
some
way
describes
your
product,
or
is
based
off
your
own
name.
• Make
sure
it’s
something
that
people
will
remember,
without
being
too
confusing
or
difficult
to
pronounce.
Check
if
Your
Business
Name
is
Taken
• In
Chapter
4,
I
menPoned
Trademarkia
is
a
great
tool
to
check
whether
or
not
a
business
name
or
domain
has
been
taken.
• If
you
find
a
business
with
the
same
name
but
in
a
completely
different
market,
you
might
be
alright.
Check
with
a
lawyer
to
be
sure.
Chapter 7: Brand Identity
Register
Your
Domain
• Whether
or
not
you’re
ready
to
built
out
your
website,
you
should
register
the
domain
that
matches
your
company
name.
• Easily
register
a
domain
on
GoDaddy
for
about
$10.
Create
Social
Media
Accounts
• Register
for
any
social
media
accounts
you
might
uPlize
now
or
in
the
future,
just
to
save
those
names.
• PotenPal
social
media
sites
include
Facebook,
Twieer,
LinkedIn,
Youtube
and
Pinterest
Design
a
Logo
• You
may
choose
to
design
your
logo
yourself,
or
have
it
custom
created
Quick Tip
by
a
designer My favorite option for getting a
• Get
your
logo
logo designed is 99designs,
trademarked
through
the
which provides a variety of
USPTO
website. options at a cost effective price.
Chapter 7: Brand Identity
Physical Collateral & Phones
Professional
physical
collateral
and
solid
phone
system
will
help
bring
legiPmacy
to
your
business
communicaPons.
Here
are
my
suggesPons
for
the
top
services
and
items
to
consider:
Physical Collateral Phone System
Customized
physical
collateral
If
you’re
looking
to
get
a
phone
you
may
want
to
purchase: system
set
up
quickly,
you
have
a
variety
of
choices
that
will:
• Business
Cards
• Provide
you
with
an
1-‐800
• StaPonary
(Leeerheads) number
• Brochures • Let
you
record
a
greePng
• Invoices • Allow
you
set
up
mulPple
• Fax
Cover
Sheets mailboxes
Tool: Tools:
•
Vistaprint • Google
Voice
• Onebox
• Ring
Central
Chapter 7: Brand Identity
Websites, Email & Social Media
Once
you’ve
printed
business
cards
and
staked
your
claim
with
domains
and
social
media
accounts,
it’s
Pme
to
actually
get
a
website
built
out
and
an
email
campaign
system
going.
These
are
invaluable
tools
for
establishing
your
online
presence:
Website Creators
In
many
cases
you
don’t
need
to
hire
a
developer
to
create
your
first
website,
especially
if
your
business
isn’t
run
primarily
online.
There
are
great
services
that
allow
you
to
you
build
a
nice
website
very
quickly
and
easily:
Stock Photos
• Weebly You
will
probably
need
• Wix images
to
populate
your
website.
This
stock
photo
• Site
Kreator site
allows
you
to
pay
a
• WordPress flat
fee
per
image:
• Intuit
• iStockPhoto
Chapter 7: Brand Identity
Email Services E-Commerce Store
This
is
my
favorite
tool
to
As
your
business
grows,
set
up
an
e-‐commerce
it’s
important
that
you
store
quickly:
have
an
easy
way
to
maintain
and
manage
your
email
• Shopify
communicaPons
and
lists:
• Mail
Chimp
• Constant
Contact
• SendGrid
Quick Tip
Nothing will happen by
simply creating a social
media account. If you
are active on social
Payment Processing media, however, it can
become a great tool for
If
you
prefer
to
handle
communicating and
payments
and
shipping
connecting with
yourself,
these
are
customers, and gaining
popular
credit
card
processing
services: referral traffic. To learn
more about how to
• PayPal grow your presence
check out this Social
• Google
Checkout Media Course.
Chapter 7: Brand Identity
Resources Recap
•
Names
and
Logos
•
Check
business
name:
Trademarkia
•
Register
your
domain:
GoDaddy
•
Design
a
Logo:
Design
Course
•
Register
your
trademark:
USPTO
Office
• Hire
a
designer
99designs
•
Physical
Collateral
&
Phones
• Business
cards
and
physical
collateral:
Vistaprint
• Phone
Systems:
Google
Voice
,
Ring
Central,
Onebox
•
Websites
&
Email
• Site
creators:
Weebly,
Wix,
Site
Kreator,
WordPress,
Intuit
• Stock
photos:
iStockPhoto
• Email
Services:
Mail
Chimp,
Constant
Contact,
SendGrid
• E-‐commerce
soluPon:
Shopify
• Payment
Processing:
PayPal,
Google
Checkout
• Social
Media
Course
Chapter 7: Brand Identity
8. Business Operations
Business
operaPons
encompasses
everything
from
your
loca>on
to
the
services
that
help
you
organize
internal
processes.
Your
operaPons
are
the
cogs
that
keep
your
business
running
smoothly.
In
this
chapter
I
explore
how
to
find
a
space
that’s
properly
fits
your
needs,
spaPally
and
financially.
I
also
reveal
some
of
the
best
organizaPonal
and
operaPonal
tools
on
the
market,
to
manage
anything
from
your
sales
forces
to
online
meePngs.
Learn
how
to
get
the
most
out
of
your
professional
vendors,
and
take
full
control
of
operaPons
on
a
budget.
Identify & Secure a Location
There
are
two
types
of
locaPons
you
will
consider
as
a
business,
an
office
or
a
retail
space.
There
are
two
very
different
approaches
to
leasing
depending
on
which
of
these
spaces
you
require.
Office
Space
Maybe
your
home
office
has
goeen
a
liele
too
claustrophobic,
your
staff
is
expanding,
or
it’s
important
for
you
to
have
some
sort
of
office
space
from
the
get-‐go.
Either
way,
your
office
space
should
be
pracPcal,
useful,
and
suited
to
your
needs.
My
big
Pp
for
office
spaces
is
to
find
something
affordable
unPl
you’ve
proven
out
that
you
can
bring
in
customers
and
revenue.
Especially
in
a
world
where
most
interacPons
can
be
carried
out
online,
the
space
where
you
work
is
becoming
less
and
less
important.
It’s
also
advisable
to
look
for
a
short
lease,
try
to
keep
it
at
1
year
to
prevent
yourself
from
being
locked
in
to
a
longer
lease
you
can’t
afford
or
won’t
need
long-‐term.
If
you
really
like
the
space
you
may
have
the
opPon
to
extend
your
lease
down
the
line,
so
if
you’re
enjoying
your
office
consider
discussing
this
possibility
with
your
building
manager.
Chapter 8: Business Operations
Retail
Space
A
retail
space
is
different
than
an
office
in
that
your
space
is
your
product.
Whether
you’re
running
a
bouPque
store,
a
salon
or
a
daycare,
the
appearance,
size
and
loca>on
of
your
space
is
criPcal.
You
should
put
more
thought
into
selecPng
your
retail
space
than
an
office.
It
may
be
worth
it
to
pay
more
for
a
beeer
locaPon,
or
a
bigger
space
that
will
allow
you
to
hold
more
customers.
Weigh
the
costs
against
the
benefits
of
a
nicer
or
centrally-‐located
space.
If
you
secure
a
longer-‐term
lease
you
can
usually
lock
in
be@er
rates,
and
this
will
also
give
you
leeway
to
built
out
and
improve
the
design
of
your
space.
Found the right space?
Check out this lease
agreement for a retail
store.
Chapter 8: Business Operations
Working with Professional Vendors
Part
of
your
business
operaPons
will
inevitably
involve
working
with
professional
vendors,
such
as
lawyers
and
accountants.
Legal Doc
This
can
be
nerve-‐racking
for
a
small
• General Power
business
owner,
because
aeorney’s
fees
are
of Attorney
steep
and
tend
to
rack
up.
We
will
discuss
• Limited Power
how
to
select
the
best
aeorney
for
you
in
of Attorney
Chapter
20,
but
properly
managing
your
Pme
with
aeorneys
is
relevant
to
business
operaPons
so
I’m
going
to
stress
this
point
here:
The
most
effecPve
way
to
work
with
aeorneys
and
accountants
is
to
make
sure
that
you
over-‐
communicate
the
expecta>on
of
the
deliverable,
and
the
price
Helpful Videos that
will
be
incurred
for
it.
• Tips for working with a lawyer Very
clearly
walk
through
• Choose the right attorney what
you
expect
them
to
complete,
and
don’t
be
shy
• Choose the right accountant
to
put
a
cap
on
the
amount
• How to Manage Attorney Fees of
hours
an
aeorney
can
work
before
they
check
in
with
you.
Chapter 8: Business Operations
Tools and Services
There
are
a
variety
of
tools
and
services
that
can
help
you
streamline
your
business
operaPons,
from
accounPng
to
HR.
Here
are
some
of
my
favorite
services
for
beeer
management.
Payroll Online Meeting
Payroll
can
be
a
pain
to
handle
This
sotware
allows
you
yourself.
These
services
to
hold
online
meePngs
manage
company
payroll
and
and
share
your
desktop:
take
out
required
taxes:
• GoToMeePng
• ADP
• Paychex
• Trinet
Online Storage
Use
these
services
to
Sales Management store
and
share
your
digital
files
online:
A
great
customer
relaPonship
management
system: • Dropbox
• Salesforce • Box
Chapter 8: Business Operations
Customer Surveys Project Management
A
free
survey
tool
that
The
best
project
allows
you
to
gather
management
sotware
I’ve
feedback
from
customers: found
out
there:
• SurveyMonkey • Basecamp
Business Credit Card Recruiting
Post
jobs
and
manage
The
ideal
credit
card
for
responses
across
mulPple
small
businesses
because
it
job
boards:
has
a
high
credit
limit:
• American
Express • Ziprecruiter
Chapter 8: Business Operations
Resources Recap
• Business
OperaPons
Forms
(legal
documents
package)
• Office
Space:
Lease
Agreement
(legal
doc)
•
Working
with
Professional
Vendors
• Tips
for
Working
with
a
Lawyer:
(video)
• Choose
the
Right
Aeorney:
(video)
• Choose
the
Right
Accountant:
(video)
• Manage
Aeorney’s
Fees
(video)
• General
Power
of
Aeorney
(legal
doc)
• Limited
Power
of
Aeorney
(legal
doc)
•
OperaPons
Tools
•
Payroll:
ADP,
Paychex,
Trinet
•
Online
MeePngs:
GoToMeePng
• Sales
Management:
Salesforce
• Online
Storage:
Dropbox,
Box
• Customer
Surveys:
SurveyMonkey
• Project
Management:
Basecamp
• Business
Credit
Card:
American
Express
• RecruiPng:
Ziprecruiter
Chapter 8: Business Operations
9. Service-Based Businesses
Service-‐based
businesses
are
different
than
other
businesses
in
that
your
product
isn’t
a
actually
product,
it’s
you!
It’s
important
that
you
recognize
the
differences
between
service-‐based
companies
and
other
businesses,
and
properly
prioriPze
your
goals.
In
this
chapter
I
explore
how
to
maintain
excellent
client-‐vendor
relaPons,
and
clearly
define
deliverables,
>ming
and
other
expecta>ons.
I
will
also
explain
how
to
increase
your
credibility
as
a
service
provider,
and
set
the
right
price
for
your
services.
You are your Product
Service-‐based
businesses
include
independent
professionals
such
as
designers,
consultants
and
aeorneys.
If
you
start
a
service-‐based
business,
the
key
thing
to
remember
is
that
you
are
your
product.
You’re
not
making
a
physical
good,
or
making
money
off
ads.
The
only
thing
people
will
judge
your
business
by,
is
you.
That
means
that
you
must
always
represent
yourself
in
the
absolute
highest
light,
and
provide
the
highest
quality
work.
Here
are
other
Pps
to
remember:
Understand
Your
Client’s
Needs
The
best
way
to
provide
high
quality
service
is
to
really
focus
on
the
needs
of
your
client.
Quick Tip Don’t
just
take
their
list
of
tasks
and
knock
them
out;
anyone
can
do
that.
Take
the
Pme
Watch this video to
speak
with
them
and
ask
exactly
what
for tips on they
need,
and
more
importantly,
show
maintaining a them
that
you
understand
what
they
need.
successful
consulting Most
service-‐based
relaPonships
break
relationship. down
from
a
lack
of
communicaPon
of
the
expectaPons.
Chapter 9: Service-Based Business
Help
the
Client
Shape
Their
ExpectaPons
CommunicaPon
is
criPcal
in
services
for
outlining
what
needs
to
be
accomplished,
as
well
as
the
Pme
frame.
When
it
comes
to
deliverables,
you
shouldn’t
as
a
service
provider
leave
it
up
to
your
client
to
dictate
the
expecta>ons
of
a
project.
This
is
because:
1)
Your
client
won’t
know
exactly
what
they
want
2)
Or
what
they
want
will
change
The
goal
of
great
service
providers
isn’t
to
simply
do
what
they’re
told,
but
to
help
clients
figure
out
what
they
need,
and
help
them
set
expectaPons.
Never
assume
you
know
what
your
client
needs,
but
constantly
over-‐
communicate
with
them
what
you’re
working
on,
how
it
fits
what
they
want,
and
when
it
will
be
completed.
They
will
be
pleased
with
your
transparency
and
accountability,
and
you
also
prevent
them
from
being
dissaPsfied
with
your
deliverable
down
the
line.
Chapter 9: Service-Based Business
The
3
Components
of
Services
In
any
service-‐based
interacPon,
there
are
three
key
components
that
must
be
spelled
out
clearly:
1) The
final
deliverable
2)
Deadline
for
delivery
3) The
final
cost
The
reason
some
service-‐based
businesses
flourish
where
others
fail,
is
that
they
consistently
over-‐communicate
surrounding
these
three
requirements,
then
over-‐deliver
on
value.
If
you’re
having
difficulty
with
a
client,
try
asking
these
quesPons:
What
is
it
you
need
done?
What
are
all
the
different
components?
What’s
your
budget?
When
do
you
need
it
completed?
If
you
understand
the
person’s
Pmeline,
budget
and
expectaPons
you
will
be
golden.
Don’t Forget: Consulting Agreement
One final thing you want when working with a client is a
solid consulting agreement. This helps prevent arguments
over specific and financial disputes regarding services
rendered. Learn more about service contracts here.
Chapter 9: Service-Based Business
Go Right to Getting Customers
In
service-‐based
businesses
especially,
it’s
criPcal
that
you
go
straight
to
geing
customers.
You
may
not
be
compensated
very
well
at
first,
but
it’s
criPcal
that
you
get
as
much
experience
as
you
can,
and
over-‐deliver
in
terms
of
value.
Even
before
developing
a
strong
corporate
presence
(a
nice
website,
business
cards,
etc.)
prove
that
you
can
deliver.
Back
in
business
school
I
started
a
consulPng
firm,
and
we
jumped
to
acquiring
3
clients
in
our
first
2
days.
During
my
first
project,
I
probably
put
in
100
hours
of
work
for
$500
worth
of
work,
less
than
minimum
wage,
but
I
was
fixated
on
making
the
client
happy.
We
didn’t
have
business
cards
yet,
and
were
sPll
developing
the
concept
of
what
exactly
our
consultancy
did.
We
simply
asked
people
what
they
needed
help
on,
and
then
fulfilled
that
need.
Once
we
saw
paeerns
in
the
help
people
required,
we
focused
on
that
service.
The
biggest
mistake
you
can
make
is
spending
weeks
and
months
incorporaPng
your
business,
ge`ng
leeerheads,
etc.
before
ge`ng
customers.
Find
your
potenPal
customers,
and
don’t
be
afraid
to
offer
them
help.
People
create
too
many
barriers
before
asking
for
the
sale;
if
you
provide
useful
services,
never
back
away
from
asking
for
the
sale.
Be
confident
in
saying
“here’s
my
service,
here’s
why
you
need
it,
let’s
get
started.”
Chapter 9: Service-Based Business
Scale Expenses With Demand
There
are
a
few
key
points
to
remember
when
it
comes
to
managing
finances
of
a
service-‐based
company.
You
Don’t
Need
a
Lot
of
Capital
Up
Front
There
is
no
reason
a
service-‐based
business
should
require
a
lot
of
investment
up
front,
or
that
your
expenses
should
vastly
exceed
your
revenue.
Simply
put,
you
should
not
be
spending
$100,000
on
a
nice
office,
or
even
hundreds
of
dollars
on
fancy
staPonary
or
an
expensive
phone
system,
before
you
have
any
clients.
As
we
discussed
earlier,
you
are
the
most
important
aspect
of
your
product,
not
your
website
or
your
office.
My
recommendaPon
is
to
get
a
few
customers,
make
your
first
few
thousand,
and
then
slowly
build
out
your
corporate
presence.
As
you
grow,
you
can
divert
a
greater
porPon
of
your
revenue
into
basic
expenses,
business
cards,
office
supplies
etc.
This
leads
to
our
next
point.
Chapter 9: Service-Based Business
Charge
More
When
Demand
Increases
It
can
be
confusing
determining
how
much
to
charge
for
services.
This
rule
is
simple:
as
you
get
more
clients
and
your
demand
increases,
charge
more.
You
may
lose
some
customers,
but
you
will
balance
this
out
by
making
more
money
per
hour.
For
example,
if
you’ve
been
working
for
$50
an
hour
and
you’ve
got
more
clients
than
you
can
handle,
you
can
increase
your
price
to
$100
an
hour.
You
may
lose
1/3
of
your
clients
ater
the
price
hike,
but
you
are
also
earning
twice
as
much
per
hour,
and
this
frees
up
your
Pme
for
higher-‐
paying
clients.
Through
trial
and
error
you
will
feel
out
how
much
you
can
raise
your
price;
at
some
point
the
market
will
no
longer
budge.
Chapter 9: Service-Based Business
Greater
Prices,
Greater
Credibility
The
more
you
work
and
the
more
you
charge,
the
more
credibility
you
have.
This
is
based
on
basic
human
psychology;
if
somebody
offers
to
complete
a
service
for
$10
and
another
person
charges
$1,000,
you
will
automaPcally
assume
that
the
person
charging
more
money
is
more
credible.
You
assume
that
a
person’s
market
rate
jus>fies
their
experience.
You
figure
that,
if
they
are
able
to
make
a
living
charging
$1,000
for
their
service,
they
must
be
damn
good
at
it.
When
you
hike
your
rates,
you
may
need
to
turn
down
potenPal
clients
who
can’t
meet
your
price.
This
may
be
tough
when
you’re
first
starPng
out,
but
if
you’re
confident
about
the
rates
you
charge,
don’t
compromise.
You
will
be
surprised
what
people
are
willing
to
pay
for
what
they
feel
are
credible
services.
The
rule
of
thumb
I
always
follow
regarding
choosing
your
price
is
to
charge
a
price
that
you
can
say
while
looking
your
client
dead
in
the
eye,
without
flinching.
If
someone
asks
you
how
much
you
charge,
and
you
respond
ater
hesitaPng,
or
with
your
eyes
darPng
around
the
room,
you
are
probably
charging
more
than
you
believe
you’re
worth.
Chapter 9: Service-Based Business
Resources Recap
•
Services
•
Service
Agreements
&
Contracts
(video)
•
How
to
NegoPate
Services
Deals
(video)
•
ConsulPng
Agreement
(doc)
•
Customizable
ConsulPng
Agreement
(custom
legal
document)
•
ConsulPng
RelaPonship
Tips
(video)
•
Finances
•
How
to
Price
Your
Services
(arPcle)
•
Services
Types:
•
Legal
(arPcle)
•
Financial
(arPcle)
•
Rental
&
Lease
(arPcle)
•
Farming
&
Agriculture
(arPcle)
•
Consumer
Product
(arPcle)
•
Business
(arPcle)
Chapter 9: Service-Based Business
10. Building & Selling
Physical Products
Building
a
product
can
be
an
expensive
endeavor,
but
many
products
won’t
get
investment
or
manufacturing
deals
without
a
prototype.
Here
I
explore
how
to
get
a
prototype
off
the
ground,
or
leverage
Slideware
if
you
iniPally
can’t
afford
to
build
your
product.
Learn
how
to
use
pre-‐
sales
contracts
to
get
upfront
payouts
before
your
product
has
been
made.
I
will
also
dive
into
selling
and
distribuPng
your
product,
and
the
best
way
to
get
customer
feedback
on
your
product
before
you
produce
the
next
round.
Leverage Slideware & Prototypes
Developing
a
physical
product
can
be
a
significant
investment,
but
most
investors
and
distributors
will
require
a
prototype
before
invesPng
in
producPon.
These
are
several
opPons
for
developing
prototypes
on
a
budget.
Sourcing
Sites
&
Prototype
ConstrucPon
If
you
want
to
get
started
selling
products,
these
are
a
few
services
that
allow
you
to
get
your
physical
Quick Tip
product
sourced
and
built
for
a
reasonable
price:
If you’re looking to
develop a unique
product, check out
• Alibaba
this article called
• TradeKey “Nine Ways to
Make a New
• Global
Sources Product.” It offers
• DhGate great suggestions
for services that
• Made
In
China will create your
physical prototype.
• MFG
Chapter 10: Physical Products
Slideware
Depending
on
the
complexity
or
cost
of
materials,
the
opPon
of
building
an
actual
product
may
be
out
of
your
price
range.
In
this
circumstance
you
can
use
Slideware,
which
is
essenPally
a
PowerPoint
deck
with
a
visual
representa>on
of
your
product.
Once
it’s
created,
you
leverage
the
Slideware
prototype
design
to
secure
your
first
set
of
sales.
Read
more
on
how
to
secure
pre-‐
sales
contracts
in
the
following
secPon.
You
may
not
be
able
to
spend
hundreds
of
thousands
to
build
out
mulPple
versions
of
your
product,
but
you
can
probably
afford
a
few
thousand
dollars
to
get
a
detailed
mockup
or
basic
prototype
built
out.
Chapter 10: Physical Products
Pre-Sales Contracts
Once
you
have
a
prototype,
you
want
to
leverage
pre-‐sales
contracts
to
pay
for
your
inventory.
Show
your
product
to
prospecPve
buyer
and
ask
them,
“Do
you
want
to
buy
100
of
these
products?
Or
1,000?
10,000?”
Your
goal
is
to
lock
them
down
in
a
contract.
Once
you
have
one
in
place,
try
to
get
a
Quick Tip
posiPve
return
on
the
amount
you’re
paid
out. When leveraging
pre-sales contracts,
be sure to get a
You
might
get
half
of
your
solid attorney to
payment
upfront,
and
then
draft and/or review
half
upon
delivery
of
the
your contract and
product.
You
can
then
use
submit your patents.
the
first
half
to
pay
for
the
For more product-
first
set
of
orders
on
the
related legal
assumpPon
that
they’re
documents see this
going
to
sell,
and
then
use
collection.
the
second
half
to
pay
off
any
expenses,
then
re-‐invest
in
building
more
products.
People
use
this
tacPc
start
building
and
selling
a
products
before
they
can
afford
to
have
the
product
manufactured
on
a
larger
scale.
Chapter 10: Physical Products
Selling Your Products Online
You
can
always
sell
your
products
online
through
sites
I
menPoned
earlier,
such
as
Amazon,
eBay,
Magento,
or
using
payment
services
like
Google
Checkout
and
PayPal.
Be
sure
that
the
product
packaging
and
photography
are
aeracPve
and
will
catch
the
customer’s
eye.
Just
as
important
as
pu`ng
your
product
up
for
sale,
however,
is
ge`ng
feedback
from
100
poten>al
customers.
Before
you
invest
in
building
out
another
set
of
products,
you
want
to
be
assured
that
the
product
resonates
with
its
target
market.
If
over
75%
of
those
poten>al
customers
say
they
want
this
product,
you’re
onto
something.
You
can
also
use
surveys
Feedback Tools to
measure
pricing.
You
can
either
ask
prospecPve
If you’re looking to get feedback customers
how
much
they
and conduct research for your would
pay,
or
ask
ranges:
product online, consider using “Would
you
pay
$5-‐10?”
one of these tools: or
“Would
you
pay
$20-‐50?”
• GetSatisfaction
• Ask Your Target Market For
more
Pps
on
tesPng
your
product
in
the
• SurveyMonkey marketplace,
check
out
this
video.
Chapter 10: Physical Products
Resources Recap
• Build,
Sell
&
Promote
a
Physical
Product
(course)(package)
• Manufacturing
•
Manufacturing
websites:
Alibaba,
TradeKey,
Global
Sources,
DhGate,
Made
In
China,
MFG
•
Prototypes
•
Nine
Ways
to
Make
a
New
Product
(online
arPcle)
•
Market
research
tools
• GetSaPsfacPon
• Ask
Your
Target
Market
• SurveyMonkey
•
Selling
Online:
•
Tips
for
selling
your
products
online
(video)
•
e-‐Commerce
sites:
Amazon,
eBay,
Magento
•
Payment
services:
Google
Checkout
,
PayPal
•
Product
photography
(video)
•
Product
packaging
(video)
•
TesPng
your
product
in
the
marketplace
(video)
Chapter 10: Physical Products
11. Building Online Products
An
“online
product”
simply
means
that
your
website
is
your
product.
This
is
the
case
with
my
company;
Docstoc
doesn’t
sell
physical
goods
or
offer
human
services,
our
products
are
the
digital
documents
and
resources
available
on
our
website.
In
this
chapter
I
will
review
important
rules
to
remember
when
building
out
your
online
product.
I’ll
also
discuss
key
processes
for
building
a
great
online
product,
including
wireframing,
design,
development,
and
online
hos>ng.
I’ll
then
dive
into
the
best
way
to
improve
upon
your
website
to
increase
traffic
and
sales.
3 Golden Rules
As
the
CEO
of
a
website
and
an
acPve
member
of
the
startup
community
for
years,
I’ve
seen
some
online
products
flourish,
and
many
others
fail.
Based
on
my
own
experience
and
the
paths
I’ve
witnessed
different
companies
take,
I’ve
developed
three
criPcal
rules
for
building
a
scalable
and
successful
online
product.
10-‐50
Thousand
Dollars
The
first
rule
of
thumb
is,
you
should
plan
to
spend
somewhere
in
the
range
of
$10-‐50,000
dollars
on
your
first
web-‐based
product.
Your
beta
version
won’t
have
a
lot
of
fancy
funcPonaliPes,
but
it
should
have
a
meaningful
enough
amount
of
user
interacPon.
This
range
is
enough
to
get
a
first
version
off
the
ground,
one
that’s
complete
enough
for
people
to
play
around
with
and
offer
feedback
on.
$10-‐50,000
is
also
the
amount
the
average
person
can
probably
scrounge
together,
between
savings,
credit
cards,
a
side
job,
loans,
family
and
friends...
I
used
all
of
these
things
to
help
me
build
out
the
beta
version
of
Docstoc,
and
subsequently
raise
enough
money
to
build
out
the
product
further.
Chapter 11: Online Products
No
More
Than
3-‐6
Months
Time
is
your
most
precious
resource
when
working
on
a
website.
Technology
moves
quickly,
and
you
must
too.
It’s
criPcal
that
you
give
yourself
3
to
6
months
to
get
your
first
product
online,
and
not
much
longer
than
that.
The
biggest
mistake
I
see
people
make
is
spending
a
year
or
more
to
get
their
first
product
online.
This
process
is
costly,
and
uses
up
Pme
that
should
be
spent
tesPng
the
product
in
the
marketplace.
Don’t
build
out
more
features;
you’ll
be
surprised
how
many
of
the
features
customers
actually
end
up
using.
If
it’s
looking
like
you
will
not
meet
the
6
month
deadline,
narrow
your
feature
scope.
Get
Paying
Customers
or
Scale
Free
Users
The
final
rule
applies
when
you
get
that
beta
version
of
your
website
out
in
the
market:
you
either
need
to
start
geing
paying
customers
immediately,
or
scale
users
very
quickly.
Only
these
two
avenues
can
lead
to
sustainable
growth;
you
can
either
start
making
revenue
through
subscripPon,
adverPsing,
or
other
channels,
or
you
must
acquire
enough
users
to
jusPfy
investment.
That
money
will
then
be
funneled
into
conPnuing
to
build
out
your
product.
Chapter 11: Online Products
How to Build an Online Product
So
you
have
a
Pmeline
and
financial
benchmarks
for
building
your
online
product,
how
do
you
actually
build
it?
These
are
five
key
components
required
for
any
online
product.
1)
Product
Requirements
Document
The
product
requirements
document
is
a
long
outline
that
details
every
single
thing
that
needs
to
be
built
for
your
website.
It
should
include
a
road
map
of
key
pages
such
as
a
home
page,
informaPon
page
and
registraPon
page,
and
it
should
detail
the
key
funcPonaliPes
of
each
page.
2)
Wireframes
A
wireframe
is
a
non-‐graphical
visual
representa>on
of
your
website,
similar
to
a
blueprint
for
a
house.
It
doesn’t
show
the
design,
but
it
does
show
you
the
basic
layout,
and
the
framework
of
how
it’s
built.
See
some
examples
of
wireframes
here
and
here.
Chapter 11: Online Products
3)
Design
Once
you
have
the
wireframes
complete,
you
want
to
hand
them
to
a
designer
to
create
the
actual
visual
webpage.
Have
in
mind
the
basic
style
and
color
scheme
you’d
like,
and
then
find
a
designer
to
drat
up
a
first
layout.
You
can
use
99designs,
the
a
design
site
I
menPoned
earlier
where
different
designers
compete
to
create
the
product
you
really
want.
This
allows
you
to
affordably
select
between
different
opPons.
To learn more
about your
design options,
check out this
course.
Chapter 11: Online Products
4)
Development
Once
you
have
the
Product
Requirements
Document,
the
Quick Tip Wireframes,
and
the
Design,
you
hand
these
three
over
to
developers
to
synthesize
the
three
parts
and
build
Find the developers
the
actual
online
product.
you need with
websites such as
Elance, Guru, Top Development
is
divided
into
to
types
Coder, and oDesk. of
coding:
front-‐end
and
back-‐end.
Front-‐end
developers
code
what
users
will
see
and
interact
with.
Back-‐end
developers
focus
on
building
out
and
organizing
the
database
that
holds
all
of
the
website’s
informaPon.
5)
HosPng
Finally,
the
website
you
build
out
needs
to
be
hosted
on
a
cloud
server,
such
as
Media
Temple
or
Rackspace.
You
may
also
consider
ColocaPon,
which
is
where
you
share
your
bandwidth
with
a
larger
company.
Chapter 11: Online Products
Getting Feedback and Users
Once
you’ve
built
the
first
version
of
your
product,
the
most
important
things
you
want
to
focus
on
are
geing
user
feed
back,
and
then
acquiring
more
users.
Think
about
the
creaPon
of
a
movie;
the
screenwriter,
director,
cast
and
editors
might
all
spend
2
years
making
it,
and
then
the
product
is
complete;
an
unchanging
piece,
set
for
the
rest
of
Pme.
A
website,
however,
is
a
living
and
growing
en>ty.
The
beta
version
of
my
website
hardly
looks
anything
like
it
does
today,
and
that’s
okay.
Your
goal
is
to
get
that
first
version
up
as
quickly
as
possible
(hence
the
3-‐6
month
Pme
limit
set
earlier),
and
start
7 Ways to
driving
traffic
to
it.
Drive Traffic
Once
you
get
users
on
your
Learn seven free ways to
site,
you’ll
oten
realize
that
drive online traffic to your
people
will
end
up
using
your
website in this eBook,
site
differently
than
you
which explores how to
expected,
and
focus
on
leverage SEO, Social
different
features
than
you
Media and Biz Dev for
anPcipated.
You
will
then
have
growth. For a more
the
ability
to
go
in
and
start
detailed break-down, see
focusing
and
targePng
on
what
the Marketing chapter.
the
users
are
actually
doing.
Chapter 11: Online Products
Resources Recap
•
Building
an
Online
Product
(package)
•
How
to
Build
an
Online
Product
(course)
•
Build
a
Great
Internet
Company
(Lecture)
•
3
Golden
Rules
(video)
•
How
to
Build
an
Online
Product
(video)
•
What
are
Wireframes?
(doc)
•
Wireframe
examples
(doc)
(doc)
•
Elements
of
Design
(course)
•
Design
Resources
•
99
Designs
•
Freelance
Developer
Recruitment
•
Elance,
Guru,
Top
Coder,
and
oDesk
•
HosPng
OpPons
•
Media
Temple,
Rackspace
and
ColocaPon
•
Ge`ng
USers
•
7
Ways
to
Get
Traffic
Online
for
Free
(eBook)
•
Search
Engines
(course)
(PPT)(doc)
•
Social
Media
(course)
•
Partnerships
&
BD
Deals
(course)
(video)
(doc)
Chapter 11: Online Products
12. Raising Money & Financing
Every
business
needs
some
amount
of
capital
to
get
off
the
ground.
In
some
rare
cases
the
founder
can
fund
the
enPre
venture
themselves,
but
for
the
rest
of
us
I’m
going
to
explore
methods
and
sources
to
acquire
business
capital.
I
will
begin
by
explaining
my
philosophy
on
raising
money,
and
defining
the
personal
traits
that
will
be
criPcal
for
you
to
gain
the
trust
of
investors.
Then
I’ll
explore
different
sources
of
capital,
such
as
seed
funding,
angel
and
VC
funding.
Finally,
we’ll
talk
about
mastering
your
pitch,
and
the
one
approach
that
I
guarantee
will
get
you
the
money
you
need.
The Five P’s
Over
the
years
I
managed
to
raised
several
million
dollars
for
Docstoc
by
remembering
these
5
P’s,
which
are
all
criPcal
to
inspiring
investors
and
ge`ng
funding.
For
more
details
on
raising
money,
check
out
this
course,
and
browse
this
resource
package.
1)
People
The
first
thing
an
angel
or
VC
will
invest
in
isn’t
an
idea,
it’s
the
person.
So
when
you’re
raising
money,
before
diving
into
your
great
idea
and
business
model,
sell
yourself
first.
Investors
are
be`ng
on
you
as
an
entrepreneur,
on
your
work
ethic,
your
leadership,
and
your
team.
Because
a
lot
of
invesPng
involves
trust,
it
helps
to
meet
an
investor
as
a
warm
referral,
through
a
recommendaPon
or
mutual
connecPon.
It’s
also
much
easier
to
raise
money
if
you
have
experience
in
the
field
you’re
starPng
a
business,
and
a
track
record
of
success.
If
you
don’t
have
that,
it’s
important
that
you’re
like-‐able
and
create
an
idea
that
will
catch
an
investor’s
eye.
Chapter 12: Raising Money
2)
Product
If
you
don’t
have
much
experience
or
connecPons,
focus
on
creaPng
an
idea
investors
can
get
behind.
They
generally
will
not
invest
in
your
idea
without
a
product
to
look
at.
If
you
have
a
website,
they
want
to
be
able
to
log
on
and
play
around
with
it.
If
it’s
a
retail
or
physical
space,
they
want
to
see
a
mock-‐up
or
the
actual
store.
If
it’s
a
product,
they’ll
want
to
see
a
prototype.
An
investor
is
looking
for
a
product
that
other
people
want,
that’s
engaging,
that’s
different
and
be@er
than
other
products
on
the
market.
Your
goal
is
to
help
them
see
potenPal
for
growth,
and
show
them
that
their
capital
will
help
you
get
that
next
set
of
customers
needed
to
get
your
business
off
the
ground.
3)
Progress
Investors
want
to
see
momentum,
and
resourcefulness.
If
you
come
to
them
and
say
“I
have
a
great
idea,
I
just
need
the
money
to
built
it
out
and
get
customers”
that
shows
much
less
moPvaPon
Chapter 12: Raising Money
than
“I
had
a
great
idea,
so
I
wrote
this
business
plan
and
put
what
liele
resources
I
had
into
building
out
this
prototype.”
Even
more
impressive
to
an
investor,
is
if
you
can
show
them
that
you’ve
go@en
your
first
set
of
customers,
and
even
started
making
a
li@le
money.
If
you
do
that,
you’ll
demonstrate
a
quality
that
investors
will
want
to
invest
in;
the
ability
to
do
more
with
limited
resources.
This
gives
you
the
leverage
to
say,
“look
what
I
did
with
$10,000,
imagine
what
I
can
do
with
$100,000.”
4)
Passion
People
buy
things
on
emo>on,
and
jus>fy
their
decision
anerwards
with
logic.
Investors
work
the
same
way.
They
will
invest
based
on
their
feelings,
and
raPonalize
their
decisions
later.
What
emoPons
guide
them?
“I
like
this
this
person.
I
like
his
idea.
I
get
a
good
feeling
from
him.
I
think
he’ll
make
the
most
of
my
money.”
These
are
insPncts,
not
raPonale.
But
if
you
get
on
the
wrong
side
of
these
feelings,
and
an
investor
doesn’t
like
you,
they
will
not
invest
in
your
idea.
Chapter 12: Raising Money
They
are
not
invesPng
in
a
physical
asset,
they’re
invesPng
in
a
businessperson,
which
means
you
need
to
make
an
emoPonal
connecPon,
to
connect
with
their
passion.
The
best
way
to
do
this
is
to
be
passionate
about
your
idea.
Whatever
you’re
most
passionate
about
in
life,
be
twice
as
passionate
about
your
business.
This
passion
is
contagious,
and
you
investor
will
feed
off
your
energy
and
excitement.
In
both
raising
money
and
down
the
line,
your
passion
is
a
commodity
you
can
trade
to
get
things
done
in
your
business.
People
want
to
be
around
passionate
people,
they
will
always
be
willing
to
work
with
someone
they
feel
inspired
by.
5)
Persistence
The
final
key
trait
is
persistence.
Be
ready
to
do
whatever
it
takes
to
raise
the
money
you
need.
There
was
an
investor
who
wasn’t
pu`ng
very
much
money
into
Docstoc,
and
I
conPnued
calling
him
to
set
up
meePngs
and
show
him
our
progress.
I
called
him
so
much,
part
of
the
reason
he
may
have
invested
in
our
business
was
just
so
I
would
leave
him
alone.
But
even
more
importantly,
this
persistence
was
also
an
indicator
of
what
type
of
entrepreneur
I
would
be,
how
dedicated
I
would
be
to
comple>ng
other
goals,
such
as
ge`ng
customers
or
building
a
great
product.
Chapter 12: Raising Money
Sources of Capital
There
are
various
basic
ways
to
raise
money,
some
that
may
be
beeer
suited
for
the
stage
of
growth
and
financial
situaPon
of
your
company.
Here’s
a
list
of
various
sources
of
capital
to
consider,
and
how
to
acquire
them.
Bootstrapping
The
first
and
most
obvious
source
of
capital
is
yourself.
Everybody
has
sources
of
capital
at
their
disposal.
Whenever
I
hear
somebody
say
“I
would
have
started
this
business,
but
I
didn’t
have
the
money,”
I
know
they
aren’t
dedicated
enough
to
their
idea.
You
have
credit
cards,
you
have
savings,
you
have
access
to
money
through
all
sorts
of
creaPve
ways.
People
will
find
money
for
the
things
they
really
want.
When
you’ve
exhausted
your
financial
opPons,
use
what
you
have
and
bootstrap.
Make
the
most
of
the
limited
resources
you
have,
and
build
what
you
can
with
the
money
you
have
pulled
together.
For
more
help
bootstrapping,
check
out
this
live
discussion.
Chapter 12: Raising Money
Seed
Round
Your
seed
round
is
the
next
logical
step
ater
you’ve
scrounged
together
as
much
capital
as
you
can
on
your
own.
The
seed
round
is
when
you
ask
family
and
friends
for
small
amounts
of
money,
anywhere
from
$1,000
to
$50,000.
I
don’t
recommend
raising
money
from
people
who
really
need
it,
or
would
be
compromising
their
savings
by
lending
to
you.
Only
borrow
an
amount
that,
if
lost,
wouldn’t
put
them
in
financial
hardship.
This
isn’t
fair
to
them,
and
will
also
put
unnecessary
pressure
on
you
during
an
already
stressful
process.
Angel
Investors
The
next
source
of
funding
to
consider
ater
your
seed
round
are
angel
investors.
These
are
smaller-‐scale
investors
who
put
capital
in
a
variety
of
different
companies,
and
invest
anywhere
from
$25-‐100,000.
Chapter 12: Raising Money
Bank
Loans
&
Credit
Lines
Unless
you
have
valuable
assets
or
another
successful
business
that
the
bank
can
use
as
collateral,
it
will
be
hard
to
get
a
bank
loan
to
start
your
business.
If
you’re
commieed
to
the
idea
of
a
bank
loan,
you
can
try
to
prove
future
income
using
receivables
and
contracts
outlining
payments
that
will
be
made
for
your
services
or
products.
The
more
credit
you
have
built
up
from
spending
and
paying
off
your
bills
regularly,
the
more
likely
it
is
that
you
can
open
a
business
line
of
credit
star>ng
at
$10,000
a
month.
If
you
are
paying
it
off
regularly,
that
can
probably
increase
to
$20-‐50,000
in
a
year
or
two.
Venture
Capital
Venture
capitalists
are
professional
money
managers
who
raise
money
from
partners
like
pensions
funds,
universiPes,
and
large
private
family
holdings,
and
pull
them
together
to
create
funds
of
50-‐20
million
dollars.
They
use
these
funds
to
invest
in
very
promising,
high-‐growth
companies,
almost
always
through
a
liquidity
event.
Chapter 12: Raising Money
To
determine
if
your
business
is
fit
for
venture
capital,
compare
it
to
other
VC-‐based
companies.
If
you
believe
you
can
scale
to
over
100
million
dollars
in
revenue
in
under
7
years,
you
may
be
qualified
for
VC
investment.
VCs
are
looking
for
companies
with
a
chance
of
becoming
billion-‐
dollar
ventures,
and
which
have
the
potenPal
touch
millions
of
users
if
infused
with
the
right
amount
of
capital.
It
would
have
been
hard
to
scale
Docstoc
into
a
profitable
company
without
the
4
million
dollars
investment
we
received
to
build
out,
test
and
grow
our
product
and
user
base.
From the Mouth of VCs
Listen to John Babcock, a partner at the Venture
Capital firm Rustic Canyon talk about the best way
to pitch investors in this video.
For a more in-depth discussion, check out this
roundtable lecture and Q&A, where a variety of
venture capitalists break down exactly what they
look for in businesses to invest in.
Chapter 12: Raising Money
Mastering the Pitch
I’ve
established
that
most
investors
invest
in
people
rather
than
ideas.
If
investors
know
your
work
ethic,
and
believe
that
you
are
trustworthy,
they
are
more
likely
to
invest
in
you.
But
most
entrepreneurs
don’t
get
to
know
investors
unPl
they
need
capital,
and
therefore
haven’t
had
Pme
to
establish
that
credibility.
My
key
to
success
is
simply
to
reach
out
to
investors
before
you
need
money,
and
talk
to
them.
Ask
them
for
any
mentorship
and
advice
they’d
be
willing
to
share.
Explain
to
them
what
you’re
working
on,
and
tell
them
what
you
plan
to
accomplish
in
the
next
3
months,
including
specific
goals
you’ve
set,
such
as
complePng
your
product
or
ge`ng
your
first
100
customers.
Set
benchmarks
that
you
believe
you
can
very
reasonably
achieve
in
that
period
of
Pme,
and
plan
to
exceed
them.
So
if
you
tell
an
investor
you
plan
to
launch
a
product
and
get
your
first
10
customers
in
3
months,
actually
plan
to
launch
your
product
and
get
100
customers
in
2
months.
Chapter 12: Raising Money
Reach
out
to
them
and
tell
them
what
you
have
achieved,
and
ask
them
for
any
feedback.
Then
tell
them
what
your
next
goals
are.
Once
again,
set
goals
and
over-‐deliver
on
every
metric
you
set
out
to
achieve.
Ater
a
period
of
6
months,
when
you
have
consistently
completed
every
task
you’ve
set
out
to
do
ahead
of
Pme,
you
have
created
a
reputaPon
for
credibility.
Pitching to Investors
Once
they
see
how
much
you
can
For a more detailed overview
achieve
with
$10-‐
of writing a viable business
30,000
they
will
plan deck and pitching it to
actually
believe
in
investors, check out this
how
much
you
can
course.
get
done
with
$100,000
or
more.
Also check out this fireside
They
will
trust
in
chat I held with Diego
your
ability
to
meet
Berdakin and Josh Berman,
goals,
and
will
be
founders of Beachmint and
willing
to
invest
in
former founder of Myspace. In
you
as
a
person.
that discussion they explain
how they raised millions in VC
For
more
on
raising
funding, and helped other
money
your
first
startups raise money as well.
Pme
around,
check
out
this
video.
Chapter 12: Raising Money
Resources Recap
•
Raising
Money
•
Raising
Capital
for
Your
Business
(course)
•
Raising
Capital
Toolkit
(legal
document
package)
•
Raise
Money
(video)
•
Sources
of
capital
(video)
•
Bootstrapping
•
Bootstrap
Your
Business
(ebook)
•
Roundtable
discussion
on
Bootstrapping
(lecture)
•
Venture
Capital
•
How
to
Pitch
to
VCs
(video)
•
How
to
Raise
VC
(lecture)
•
The
Pitch
•
Perfect
the
Pitch
(course)
•
How
to
Pitch
Investors
(lecture)
•
Tips
for
Raising
Money
(PPT)
•
Business
Plan
Deck
Template
(PPT)
•
Raising
money
the
first
Pme
around
(video)
Chapter 12: Raising Money
13. Building a Team
Your
team,
your
employees,
managers
and
co-‐
founders,
are
absolutely
crucial
to
your
company’s
advancement.
Especially
for
small
businesses,
the
few
members
of
your
team
are
keystones
to
your
foundaPon,
and
one
bad
apple
can
make
or
break
your
growing
company.
In
this
chapter
I
explore
what
standards
you
should
hold
when
hiring
employees,
and
the
best
methods
for
recrui>ng
them.
I
also
explore
common
topics
amongst
small
businesses,
including
early
employee
equity
and
advantageous
business
partnerships.
The Bar for Employees
I
have
always
had
three
main
criteria
for
people
I
do
business
with,
especially
employees.
You
may
create
your
own
set
of
standards
for
your
future
employees,
but
what’s
most
important
is
that
you
sPck
with
them
and
never
seele.
Here
are
mine:
They’re
the
Best
at
What
They
Do
I
want
to
work
with
people
that
excel
at
what
they
do,
that
are
extremely
talented
in
their
field.
Every
one
of
my
employees
is
the
best
at
what
they
do,
and
are
passionate
about
conPnuing
to
develop
their
experPse
in
that
role.
No
Assholes
The
second
rule
is
I
maintain
a
no
asshole
policy.
That’s
simply
because
in
a
small
business,
one
bad
person
will
bring
everyone
down.
No
maeer
how
talented
or
amazing
somebody
thinks
they
are,
if
they
won’t
go
the
extra
mile
to
help
a
co-‐worker,
there’s
just
no
room
for
them
in
our
company.
Chapter 13: Building a Team
They
Work
Harder
than
Anybody
Else
And
finally,
my
employees
work
harder
than
anybody
AGPIE: Values
else.
I
worked
insane
hours
when
I
started
At Docstoc we talk a lot about
Docstoc,
and
to
this
company culture, and have
day
sPll
oten
work
developed these 5 values:
12
hours
a
day,
or
on
weekends.
1. Accountability
2. Growth
I
honestly
expect
the
same
level
of
3. Passion
dedicaPon
from
4. Integrity
everybody
in
our
5. Excellence
company.
I
expect
that
my
employees
are
passionate
enough
to
pull
together
for
a
big
push,
and
willing
to
help
out
the
team.
Chapter 13: Building a Team
Recruiting
There
are
two
main
approaches
to
recruiPng
employees:
Referrals Recruiting
& Networking Employees Online
This
is
a
preferable
way
If
you
have
trouble
to
connect
with
meePng
people
prospecPve
employees;
through
referrals
or
either
a
referral
from
meet-‐ups,
or
you
need
someone
you
trust,
or
somebody
quickly,
an
prospecPve
don’t
be
afraid
to
employee
you
met
leverage
online
yourself
through
a
recruiPng.
There
are
a
business
venture
or
variety
of
profession-‐
networking
event.
In
specific
recruiPng
both
cases
you
have
a
websites,
or
you
can
personal
connecPon
that
also
post
on
mulPple
helps
vet
that
candidate
job
boards
using
iniPally.
Search
Meetup,
Ziprecruiter.
Also
Eventbrite
and
even
consider
leveraging
Facebook
events
for
social
networking
sites
relevant
local
meet-‐ups
like
LinkedIn
and
in
your
area. Facebook.
Chapter 13: Building a Team
Partners, Early Employees & Equity
One
of
the
biggest
issues
that
will
arise
with
early
partnerships
and
employees
is
equity.
Equity
is
simply
ownership
in
your
business,
and
it
can
be
used
for
many
things,
including
making
business
decisions
and
compensaPng
early
employees.
Here
are
are
a
few
important
rules
to
follow
and
mistakes
to
avoid.
Business
Partnerships
Whether
you’ve
already
started
your
business
with
a
partner
or
are
considering
bringing
one
on,
a
co-‐founder
can
be
a
great
asset
to
your
business.
It
can
be
extremely
helpful
to
have
somebody
else
to
moPvate
you
and
help
you
realize
your
vision.
However
it’s
essenPal
that
you
have
a
process
in
place
for
how
decisions
will
be
made
when
you
disagree.
One
simple
solu>on
is
that
one
person
has
slightly
more
equity
than
another.
Don’t
go
into
a
partnership
by
saying
“we’ll
make
decisions
together.”
You
and
your
partner
may
get
along
great,
but
at
some
point
down
the
line
you
will
disagree,
and
somePmes
these
disagreements
can
jeopardize
your
business.
Chapter 13: Building a Team
It’s
important
for
you
to
collaborate
and
gather
other
opinions,
but
ulPmately
a
system
needs
to
be
in
place
for
one
person
to
make
the
final
decision.
When
you’re
starPng
a
business
with
another
person,
it’s
important
to
have
a
partnerships
agreement
that
covers
a
lot
of
“if-‐then”
situa>ons.
A
common
situaPon
is
a
co-‐founder
leaving.
A
key
quesPon
to
address
is,
what
are
you
going
to
do
if
one
partner
leaves?
What
percentage
ownership
do
they
take?
What
if
they
leave
one
year
in,
two
years,
or
five
years?
For
a
corporaPon,
this
concern
is
usually
addressed
by
a
ves>ng
period,
where
a
partner
is
set
to
earn
greater
percentages
of
ownership
the
longer
they
stay
with
the
company.
For
a
retail
business,
you
will
have
to
decide
how
much
the
of
the
partner’s
50%
they
get
to
keep
if
they
leave,
and
when
they
leave.
You
may
decide
that
if
either
partner
leaves
in
the
first
year,
they
get
nothing.
Consider
every
possible
issue
that
could
lead
to
a
dissoluPon
of
your
partnership:
if
a
co-‐founder
gets
pregnant
and
wants
to
spend
Pme
with
family,
or
can’t
sustain
themselves
on
their
salary.
Have
something
in
wriPng
that
addresses
as
many
of
these
situaPons
as
you
can
to
avoid
future
liPgaPon,
disputes
and
other
potenPal
threats
to
your
business.
Chapter 13: Building a Team
Early
Employees
&
Equity
You
won’t
always
have
enough
money
to
compensate
early
employees,
and
may
choose
to
give
them
equity
in
exchange
for
their
services.
1. Valuation to Determine Equity
In
order
to
determine
how
much
to
pay
them,
you
need
to
set
and
agree
upon
the
evalua>on
of
your
business.
That’s
simply
determined
by
a
value
the
two
of
you
can
agree
upon
for
the
business.
However,
if
you’ve
had
an
investor
put
money
in
your
company,
you
can
use
that
number
to
evaluate
your
company’s
worth.
If
an
investor
gave
you
$100,000
for
10%
of
your
company,
you
have
a
market
validaPon
of
100%,
1
million
dollars.
If
you
plan
to
pay
somebody
using
equity,
you
use
that
valuaPon
to
determine
what
percentage
they
deserve.
Chapter 13: Building a Team
For
example,
if
you’ve
hired
a
designer
to
make
your
website,
and
the
value
of
their
work
comes
out
to
$10,000
for
that
project,
you
will
pay
them
their
worth
in
equity.
So
if
you’re
company
is
worth
1
million
dollars,
and
they
deserve
$10,000
for
their
work,
you
owe
them
1%
of
your
company.
Now
because
equity
is
a
somewhat
risky
asset,
you’ll
oten
have
to
payout
two
or
three
Pmes
more,
so
you
will
need
to
bump
it
up
to
2
or
3%.
2. Vesting
A
vesPng
agreement
sPpulates
that
an
individual’s
equity
is
paid
out
over
Pme,
during
a
ves>ng
period.
They
oten
last
3
or
4
years,
and
if
the
person
leaves
or
is
terminated
before
their
vesPng
period
ends,
they
only
keep
the
percentage
that
has
been
vested
to
them
thus
far.
VesPng
is
important
for
employees
because
it
encourages
higher
retenPon
rates
and
loyalty
early
in
the
process.
3. When Not to Give Out Equity
Never
give
out
equity
in
its
full
and
present
value
for
a
service
that
gets
paid
out
over
>me.
If
someone
completes
a
project
whose
value
will
become
evident
over
Pme,
or
if
you’d
simply
like
them
to
conPnue
performing
this
service
for
you,
consider
pu`ng
them
on
a
vesPng
schedule
instead.
Chapter 13: Building a Team
Resources Recap
• Hiring
•
3
Golden
Rules
(video)
•
RecruiPng
•
Events
&
Networking
•
Event
Planning
and
Networking
(course)
•
Event
resources:
Facebook,
Eventbrite,
Meetup
• RecruiPng
•
RecruiPng
Secrets
(video)
•
Job
boards:
ZipRecruiter,
LinkedIn
•
Partnerships
•
How
to
Pick
a
Partner
(PPT)
•
Equity
•
Equity
for
Employees
(video)
•
VesPng
Agreement
(legal
doc)
Chapter 13: Building a Team
14. HR Essentials
Interviewing
and
hiring
the
right
employees
can
be
surprisingly
challenging,
but
is
criPcal
for
assembling
the
best
team.
There
are
a
lot
of
candidates
out
there;
in
this
chapter
I
explain
how
to
find
and
hire
the
right
ones
for
your
business
and
posiPon.
I
also
delve
into
some
important
human
resources
procedures,
such
as
proper
methods
and
forms
for
hiring
and
termina>ng
employees,
and
best
tools
for
managing
managing
payroll
and
benefits.
Employees
are
the
bedrock
of
your
business,
learn
how
to
manage
them
properly
for
mutual
benefit.
Interviewing Candidates
Finding,
ve`ng,
interviewing
and
hiring
the
right
candidates
for
a
posiPon
is
more
challenging
than
you
might
expect.
I’ve
conducted
hundreds
of
interviews,
and
sPll
find
it
difficult
to
discern
what
an
employee
will
really
be
like
on
the
job.
It’s
best
if
you
have
a
referral
from
somebody
you
trust,
but
in
cases
where
you
don’t
here
are
a
series
of
quesPons
and
red
flags
that
help
me
separate
the
right
candidates
from
the
wrong
fit:
QuesPons
to
Ask
“What’s your ideal position?”
I
want
to
hear
the
in
candidates’
own
words
what
their
dream
job
is,
or
the
posiPon
they
are
eventually
working
towards
in
their
career.
You’d
be
surprised
how
many
Pmes
people
will
describe
a
posiPon
that
doesn’t
exist
or
is
unrelated
to
your
business;
this
is
probably
an
indicator
that
they
won’t
be
around
long
term.
Chapter 14: HR Essentials
“What do you know about my company?”
This
is
a
common
quesPon,
and
simply
tests
how
much
they
know
about
your
company.
If
they’re
not
familiar
with
the
basics
of
your
company,
such
as
the
service
it
offers
and
how
it
makes
money,
then
they’re
not
taking
the
interview
seriously
enough.
“What do you do better
than anything else?” Quick Tip
This
quesPon
encourages
the
Watch this video and
candidate
to
self-‐idenPfy
their
check out this article
strengths,
so
that
you
can
for a more in-depth
evaluate
how
it
fits
into
your
exploration of topics
company’s
needs. and questions to ask.
“What’s feedback you’ve gotten from a previous
manager on an area you need to improve?”
If
they
say
they’ve
never
goeen
feedback,
ask
them
to
imagine
what
their
manager
would
say.
This
is
a
bit
of
a
semanPc
trick,
because
it
takes
the
self-‐criPcism
out
of
their
hands
and
allows
them
to
describe
their
weaknesses
from
the
perspecPve
of
a
third
person.
They
will
tend
to
be
a
liele
more
honest
about
their
need
for
improvement.
If
they
can’t
idenPfy
any
weaknesses,
this
might
be
a
red
flag
down
the
line;
you
don’t
want
to
work
with
employees
who
aren’t
self
aware,
or
can’t
see
room
for
improvement.
Chapter 14: HR Essentials
One
Strike
Rule
I
have
several
red
flags
that
immediately
ruin
a
candidate
for
me:
If
somebody
is
unprepared
for
the
interview,
I
get
the
sense
that
they’re
not
being
truthful,
or
they
come
off
as
arrogant,
these
usually
eliminate
them
as
potenPal
candidates.
For
me,
I
hire
by
a
one
strike
rule.
The
amount
of
>me,
energy
and
effort
that
you
all
spend
trying
to
improve
an
employee
can
be
very
detrimental
to
your
business.
In
my
experience
I’ve
found
that
a
Quick Tip candidate
either
has
a
set
of
qualiPes
that
you’re
looking
for,
with
the
potenPal
to
grow
into
a
Check out this video great
employee
through
for red flags to look encouragement
and
mentorship,
or
out for during the they
don’t.
interview process.
It
might
be
hard
to
turn
down
candidates,
especially
if
you
really
need
to
fill
a
posiPon,
but
trying
to
force
a
candidate
into
a
posiPon
they
don’t
belong
is
like
trying
to
fit
a
square
peg
in
a
round
hole;
it’s
a
waste
of
>me.
In
the
long
run,
you’ll
save
a
lot
of
Pme,
money
and
energy
by
trusPng
your
insPncts
about
a
candidate.
Over
the
years,
I’ve
found
that
lot
of
being
a
business
owner
is
about
trus>ng
your
ins>ncts
and
inner
voice.
Chapter 14: HR Essentials
Good
Management
As
the
founder
and
CEO
of
my
company,
my
business
is
my
priority
in
life.
When
I’m
working
I
pour
100%
of
myself
into
my
work.
Even
when
I’m
not
at
work,
50%
of
my
brain
is
sPll
thinking
about
my
business.
When
I
first
started
working
with
people,
I
noPced
that
not
everyone
worked
at
the
same
intensity
level
as
myself.
I
started
to
wonder
whether
it
was
something
I
needed
to
accept,
that
these
were
just
different
working
styles.
Ater
six
years
as
a
CEO
and
manager,
I
can
tell
you
that
I’ve
decided
no,
I’m
not
prepared
to
compromise
with
the
caliber
of
people
I
hire.
Your
organizaPon
can
only
be
excepPonal
if
it’s
made
up
of
high
performing
people
who
love
what
they
do,
and
take
tremendous
pride
in
the
quality
of
their
work.
Chapter 14: HR Essentials
People
work
at
my
company,
not
just
because
they
need
to
make
a
living,
but
because
my
company
affords
them
the
opportunity
to
do
something
unique
and
fulfilling
every
day.
Many
of
them
could
find
other
jobs,
or
start
their
own
companies,
but
they
choose
to
stay
and
always
do
their
best
work.
I
can
tell
you
right
now,
the
majority
of
people
are
not
like
this,
and
it’s
difficult
finding
people
who
match
your
level
of
intensity.
Once
you
hire
great
people,
being
the
boss
doesn’t
mean
simply
telling
your
employees
what
to
do.
This
will
lead
to
resentment,
and
doesn’t
foster
a
sense
of
accomplishment,
collaboraPon
and
autonomy.
As
a
leader,
your
role
is
to
set
a
clear
vision
of
overall
goals,
lay
out
the
most
important
tasks
that
need
to
be
completed,
and
then
lead
by
example.
Be
mindful
of
where
employees
are
coming
from;
be
sure
that
you’ve
either
experienced,
or
are
willing
to
carry
out
any
tasks
that
you’ve
delegated
to
someone
else.
Always
communicate
very
clearly
not
only
what
you
want
the
employee
to
do,
but
how
they
are
helping
you
meet
key
goals.
Most
employees
aren’t
looking
to
be
told
what
to
do,
but
for
somebody
to
confirm
what
they’ve
already
planned
to
do.
Chapter 14: HR Essentials
Hiring & Firing Employees
In
this
secPon
I’m
going
to
dive
into
the
nuts
and
bolts
of
hiring
employees
and
le`ng
them
go.
There
are
several
documents
and
procedures
you
should
have
in
place
to
make
sure
these
processes
happen
smoothly,
and
to
avoid
any
issues
down
the
line:
Documents
for
Hiring
&
Firing
Job Application Background Check
You
will
need
a
flow
for
I
would
recommend
candidates
to
find,
ge`ng
a
background
understand
and
apply
for
check
on
any
employee
the
posiPon.
Some
you
hire,
too
keep
an
companies
use
a
job
eye
out
for
any
criminal
applicaPon,
while
others
history
or
red
flags.
just
write
job
descripPons
Note:
you
always
need
with
requirements
and
post
to
get
the
candidate’s
them
on
job
boards
online. permission.
Chapter 14: HR Essentials
Offer Letter Employment Agreement
Once
you’ve
decided
to
The
next
step
ater
the
hire
a
candidate,
you’ll
offer
leeer
is
the
want
to
give
them
an
offer
employment
agreement,
leeer,
a
non-‐binding
which
states
the
terms
of
wrieen
statement
of
the
employment.
The
basic
terms,
the
job,
and
document
will
also
what
compensaPon
you’re
include
a
confidenPality
offering. agreement,
and
a
secPon
where
the
employee
acknowledges
the
fact
that
the
intellectual
property
they
produce
Employee Non-Compete while
working
for
you
belongs
to
the
company.
This
agreement
prevents
To
learn
more
about
employees
from
pursuing
a
important
Employment
similar
profession
with
Agreements,
check
out
compePng
companies. this
video.
Release of Claims
If
you’re
le`ng
an
employee
go,
it’s
important
that
you
get
a
release
of
claims
agreement
signed,
which
means
that
the
employee
is
agreeing
not
to
sue
the
company.
To
get
a
former
employee
to
sign
this,
you
oten
need
to
offer
some
sort
of
benefit,
such
as
a
warm
recommendaPon
for
their
next
job.
Chapter 14: HR Essentials
Types
of
Workers
There
are
two
main
types
of
workers,
employees
vs.
independent
contractors.
Contractors
are
less
hassle
because
they
require
less
work
on
the
part
of
you
as
the
employer,
but
if
a
worker
meets
the
criteria
of
an
employee
you
must
treat
them
as
one:
Employee
An
employee
is
somebody
who
works
for
your
business
under
your
direcPon
and
control.
Employees
tend
to
work
in
the
office,
and
use
company
materials
to
do
their
work.
You
are
required
to
take
the
appropriate
amount
of
federal
and
state
taxes
out
of
their
paycheck.
Independent Contractor
The
main
difference
between
an
employee
and
an
independent
contractor
is
a
contractor
is
paid
a
set
fee
to
complete
a
project
or
series
of
projects,
and
you
don’t
have
to
take
anything
out
of
their
taxes.
They
work
more
independently,
and
don’t
need
to
be
in
your
office.
Chapter 14: HR Essentials
Paid vs. Unpaid Interns
Interns
may
be
a
tempPng
opPon
for
a
business
on
a
budget,
but
keep
in
mind
that
you
may
be
legally
required
to
pay
your
interns,
depending
on
the
state.
You
may,
however,
offer
unpaid
internships
if
they’re
receiving
college
credit
or
significant
training
and
mentorship.
In
either
case,
make
them
feel
like
an
important
part
of
the
team
by
giving
them
an
offer
leeer
and
congratulaPng
them
for
being
chosen.
All
employees
will
fall
into
one
of
two
categories:
Exempt Employee Non-Exempt Employee
An
exempt
employee
is
This
employee
should
be
somebody
that
works
in
paid
hourly,
and
is
a
salaried
posiPon,
and
enPtled
to
overPme
in
can
legally
be
exempt
cases
when
they
work
from
overPme.
Typically
over
40
hours
a
week.
applies
to
managers
or
Typically
applies
to
more
a
technically
trained
task-‐based
jobs
with
less
workers. decision-‐making.
Chapter 14: HR Essentials
A
Final
Note
on
TerminaPon
One
final
thing
to
check
is
whether
your
state
is
an
“at
will”
state.
California
is
an
“at
will”
state,
which
means
employees
are
working
by
their
own
choice,
and
the
employer
is
hiring
them
by
their
own
voliPon
as
well.
Either
party
may
decide
to
end
employment
at
any
>me.
However,
even
when
le`ng
employees
go
in
an
“at
will”
state
can
occasionally
lead
to
a
sPcky
situaPon.
A
former
employee
may,
for
example,
file
a
discrimina>on
claim
arguing
that
they
were
unfairly
terminated
or
treated
improperly.
These
lawsuits
can
be
expensive
and
draining,
so
it’s
important
that
you
‘re
mindful
of
how
you
let
employees
go.
If
you’re
considering
firing
an
employee,
be
sure
that
you’ve
been
giving
them
consistent
feedback
on
the
things
that
you
expect
from
them,
and
where
they
have
fallen
short.
Make
sure
some
of
these
conversaPons
are
on
record,
whether
through
email
or
other
performance
evaluaPons,
so
that
you
can
prove
later
on
that
they
were
terminated
due
to
their
inability
to
perform
at
the
level
that
was
expected.
Chapter 14: HR Essentials
Payroll and Benefits
You
may
be
tempted
to
handle
payroll
yourself,
but
I’d
strongly
suggest
you
let
a
payroll
company
like
those
I
list
below
handle
employee
payroll
and
taxes.
There
are
two
other
things
to
remember
with
regards
to
benefits:
1)
If
you
offer
a
benefit
to
one
employee,
you’re
legally
required
to
offer
similar
benefits
to
the
rest
of
your
employees.
2)
If
you
let
an
employee
go,
they
are
enPtled
to
be
compensated
their
salary
up
un>l
that
point,
as
well
as
any
unpaid
vaca>on
or
bonus
>me.
This
is
something
many
employers
overlook
the
first
Pme,
be
sure
not
to
get
tripped
up
with
this
mistake.
Payroll Services
• ADP
These are popular payroll and
• Trinet
HR services I’d recommend
for your business: • Paychex
Chapter 14: HR Essentials
Resources Recap
•
HR
and
Employee
Management
(course)
•
Interviewing
Candidates
•
QuesPons
to
Ask
(video)
•
Interview
QuesPons
(arPcle)
•
Red
Flags
to
look
out
for
(video)
•
Hiring
and
Firing
•
Hiring
Documents
(document
package)
•
Job
ApplicaPon
(legal
doc)
•
Job
DescripPon
(custom
doc)
•
Employment
ApplicaPon
(legal
doc)
•
Employment
Agreement
(legal
doc)
•
Important
Employee
Agreements
(video)
•
Employee
Non-‐Compete
Agreement
(legal
doc)
•
Employee
Release
Agreement
(legal
doc)
•
Payroll
Services
•
ADP
•
Paychex
•
Trinet
Chapter 14: HR Essentials
15. Getting Customers
Never,
ever
underesPmate
the
urgency
of
ge`ng
customers.
Your
company
might
have
a
great
product,
saPsfied
employees
and
a
decent
amount
of
funding,
but
unPl
you
start
(and
conPnue)
ge`ng
customers,
your
business
is
not
succeeding.
In
my
years
as
an
entrepreneur,
I’ve
found
that
a
single
trait
separates
a
successful
business
from
a
failed
one:
their
ability
to
get
customers.
You
should
be
more
than
willing
to
get
customers,
you
need
to
be
passionate
about
ge`ng
customers,
and
eager
to
do
whatever
it
takes
to
get
more
people
using
your
product
or
service.
Getting Customers
There
are
a
variety
of
tacPcs
and
anecdotes
on
growing
your
business
in
this
book,
but
keep
in
mind
that
nobody
can
ever
tell
you
a
surefire
way
to
get
substanPal
customers
every
Pme.
Why?
Customers: The Basketball Analogy
Imagine that you’ve never played basketball before, and I’ve decided
to tell you how to play.
I sit you down and explain the rules in great detail. I may be the best
basketball player in the world, and give you specific tips on footwork,
how to shoot properly, the best way to defend the basket.
All of my directions may be crystal clear conceptually, and you can be
in good physical shape, but when you step out onto the court you’ll
still be an amateur. You’ll make mistakes, and will only get better by
actually doing drills and playing the game, over and over again.
Now
imagine
that
playing
basketball
is
like
ge`ng
customers.
You
can
learn
approaches,
strategies
and
ideas
for
ge`ng
customers,
but
concepts
mean
nothing
without
a
willingness
to
try
and
try
again.
Chapter 15: Getting Customers
You
Can’t
Outsource
Sales
It’s
not
necessarily
the
best
quality
products
that
end
up
being
used,
it’s
the
best
marketed
products.
I
can
guarantee
you,
there
is
probably
an
amazing
product
or
service
very
similar
to
yours
that
simply
never
saw
the
light
of
day
because
it
wasn’t
marketed
well
enough.
The
key
thing
to
remember
is
that
sales
and
markePng
are
not
something
you
can
outsource,
especially
when
your
business
is
first
starPng
out.
You
should
be
the
#1
advocate
for
your
product
or
service;
if
you’re
not
passionate
enough
about
your
product
to
sell
it
yourself,
how
can
you
expect
anyone
else
to
be?
Make
This
Your
#1
Priority
The
principle
wrieen
on
the
let
is
a
common
adage
in
business
circles,
and
The Pareto Principle
can
be
a
valuable
way
to
think
about
ge`ng
customers.
80 percent of
your results
come from 20 The
Pareto
Principle
general
holds
true
percent of once
your
business
is
large
and
what you do successful.
When
you’re
starPng
a
business,
however,
99
percent
of
your
results
come
from
1
thing
that
you
do.
Chapter 15: Getting Customers
What
is
that
one
focus?
For
a
new
business,
it
can
be
one
of
three
things:
securing
capital,
building
a
great
product/service,
or
ge`ng
customers.
That
last
one,
geing
customers,
is
the
priority
that
is
most
likely
to
secure
your
success.
I
apply
the
1-‐99
principle
with
my
employees
and
with
myself;
we
write
down
one
task
that,
if
completed
within
a
certain
period
of
Pme,
will
make
the
biggest
difference
to
the
business.
I
do
this
because
if
we
don’t
remind
ourselves
every
day
to
focus
on
that
one
thing,
we
will
spend
most
of
our
Pme
doing
other
things.
Why
do
we
consistently
fail
to
do
the
one
thing
we
need
to?
Because
the
most
important
thing
to
complete
is
also
the
hardest.
People
much
prefer
wriPng
a
long
list
of
small
tasks
to
check
off,
so
that
we
feel
accomplished
at
the
end
of
the
day.
The
reality
is
that
those
things
almost
never
make
a
difference
to
Check out
your
business.
this lecture
on getting
customers Ge`ng
customers
on a is
hard,
but
it
is
also
budget! the
lifeline
of
your
business.
If
you’re
not
spending
at
least
50%
of
every
single
day
ge`ng
customers
during
the
first
six
months
of
your
business,
your
business
will
suffer.
Chapter 15: Getting Customers
16. Sales
We’ve
talked
about
the
importance
of
ge`ng
customers,
it’s
Pme
to
explore
how.
Sales,
MarkePng
and
PR
are
the
trifecta
of
skills
that
will
bring
you
customers
and
help
you
maintain
them.
Sales
is
simply
an
exchange
of
value.
Marke>ng
is
the
art
of
ge`ng
people
interested
in
that
exchange
of
value.
PR
is
about
building
awareness
and
legiPmacy
around
your
product
or
service.
The
goal
of
MarkePng
and
PR
is
to
generate
more
sales.
Sales
is
the
most
important
of
the
three,
but
probably
the
hardest
to
master.
In
this
chapter
we
break
down
the
sales
process
to
it’s
most
fundamental
steps.
The 5 Step Sales Process
When
someone
idenPfies
himself
as
a
salesperson,
you
probably
feel
an
almost
knee-‐jerk
reacPon
of
dislike.
That’s
because
we
think
of
salespeople
as
schemers
who
want
to
swindle
us
out
of
our
money
in
exchange
for
a
crappy
product.
The
reason
that
people
are
so
averse
to
sales
is
because
too
oten
salespeople
try
to
sell
us
something
we
don’t
need.
They
don’t
know
our
desires,
or
take
the
Pme
to
understand
what
we
really
want.
Sales
in
it’s
purest
form
is
an
exchange
of
value.
If
you
The 5 Step
have
something
of
real
value
Sales Process
to
your
customer,
they
will
always
find
the
money
for
it.
Nobody
has
everything
they
1. Gain Interest
want.
People
constantly
spend
money
on
a
variety
of
2. Establish Credibility
things;
clothes,
memberships,
food,
entertainment... 3. Establish Need
The
5
Step
Sales
Process
is
4. Offer a Solution
about
discovering,
establishing,
priming
and
5. Have a System for an
selling
people
what
they
Easy Transaction
actually
want.
Chapter 16: Sales
Gain
Interest
Before
you
start
proposing
an
exchange
of
value,
it’s
important
that
you
gain
the
interest
of
the
potenPal
customer.
If
you
lose
or
fail
to
establish
interest,
your
conversaPon
has
essenPally
ended
before
it’s
begun.
The
easiest
way
to
garner
interest
is
to
talk
about
what
people
are
most
interested
in:
themselves.
Listen
to
what
they
say,
and
offer
posiPve
feedback
to
acPvely
show
you
are
paying
aeenPon
to
them.
It
can
also
be
as
simple
as
complimenPng
them,
or
commenPng
posiPvely
on
something
they’ve
accomplished.
This
fosters
an
instant
sense
of
rapport.
Most
people
think
and
worry
about
three
main
things:
health,
love
and
Learn more about money.
You
can
gaining interest almost
always
with this handy grab
their
eBook and lecture aeenPon
by
on the art of resonaPng
with
one
persuasion. of
these
three
deep-‐
seated
concerns.
Chapter 16: Sales
Establish
Credibility
In
order
to
culPvate
trust,
you
need
to
establish
a
sense
of
credibility.
Only
do
this
ater
you’ve
gained
interest;
don’t
start
off
by
talking
about
your
accomplishments
or
experiences.
Once
the
person
is
interested,
however,
you
can
establish
credibility
one
of
two
ways.
1. The
first,
is
through
past
accomplishments
or
past
experiences
that
jusPfy
your
competence
in
that
area.
2. Aside
from
your
achievements
(and
possibly
even
more
importantly)
is
your
certainty
and
confidence.
So
much
of
someone’s
success
can
be
defined
by
their
transparency,
trustworthiness
and
confidence.
If
sales
is
an
exchange
of
value,
think
of
your
certainty
as
a
form
of
currency
that
you
can
trade.
People
find
incredible
value
in
someone
certain
and
genuine.
If
you
have
yet
to
achieve
many
relevant
experiences,
your
certainty
in
what
you
can
offer
or
accomplish
is
worth
almost
more
than
that.
Chapter 16: Sales
Establish
Need
In
some
ways,
women
are
much
beeer
at
this
step
than
men.
There
are
excepPons,
of
course,
but
in
my
experience
I’ve
found
that
women
are
beeer
at
understanding
and
establishing
need.
Think
about
when
you
have
a
rough
day,
and
you
just
want
somebody
to
listen
to
your
experience
and
show
that
they
understand
your
frustraPon.
Men
will
usually
immediately
try
to
fix
a
problem,
somePmes
before
they
truly
understand
the
situaPon.
When
you
don’t
believe
the
person
you’re
speaking
with
truly
understands
where
you’re
coming
from,
you
will
lose
interest
in
the
conversa>on
altogether.
“Understanding”
can
be
as
simple
as
listening
closely
to
someone,
and
then
repea>ng
what
they’ve
told
you.
Don’t
say
“I
understand.”
Don’t
try
to
offer
advice,
or
try
to
fix
it.
Simply
respond
by
saying
“It
sounds
like...”
or
“it
seems
like...”
and
reiterate
their
feelings
and
thoughts
back
to
them.
In
that
moment,
the
person
you’re
listening
to
will
feel
a
sudden
weight
off
their
shoulders,
and
think
“finally,
somebody
understands
me!”
It
is
only
at
this
point
that
people
will
actually
listen
to
your
soluPons,
and
you
can
establish
their
need
for
your
product.
You
may
know
from
the
get-‐go
what
a
person
needs,
but
unPl
they
feel
like
you
truly
understand
them,
what
they
want,
and
how
they
feel,
it
doesn’t
maeer.
Chapter 16: Sales
Offer
a
SoluPon
Once
you
feel
like
you
really
understand
somebody’s
need,
you
simply
offer
a
product
or
service
that
fulfills
that
need.
You
should
not
be
pushing
your
product
on
somebody,
you
should
be
presenPng
a
soluPon
that
you
can
confidently
say
fulfills
their
needs.
Have
a
System
for
an
Easy
TransacPon
The
only
other
step
which
can
prevent
a
sale
is
a
difficult
transacPon.
Once
the
person
is
convinced
of
the
value
of
your
product
and
ready
to
purchase,
make
sure
to
immediately
facilitate
the
transacPon,
simply
and
effecPvely.
Here
are
some
approaches:
Online Over the Phone In Person
Make sure the “Great, let’s get “Let’s step into
amount of your credit my office and
steps to the card number sign some
credit card now, so we papers, and I’ll
page is can have this get you out of
minimal, and shipped to you here with your
very easy to within the next (item) right
follow. 24 hours.” away.”
Chapter 16: Sales
Prospecting
Create
a
Sales
Funnel
The
goal
of
sales
is
to
match
people’s
needs
with
appropriate
soluPons,
but
everyone
has
different
needs.
So
it
logically
follows
that
not
everybody
will
have
a
need
for
your
product
or
service.
Prospec>ng
is
simply
a
process
of
discerning
who
your
potenPal
customers
are,
and
creaPng
a
flow
for
offering
your
product
to
those
people.
Your
goal
as
a
salesperson
is
to
create
a
wide
enough
funnel
to
keep
this
influx
of
potenPal
customers
growing.
It
may
require
phone
calls,
creaPve
markePng,
emailing,
in-‐person
quesPons—whatever
it
takes,
be
sure
to
keep
that
funnel
of
potenPal
customers
wide.
1
out
of
10
Qualified
People
Will
Buy
The
reason
your
sales
funnel
needs
to
be
wide
is
that
only
1
out
of
10
of
the
people
who
need
your
product
will
actually
buy
it.
This
is
true
across
mulPple
industries,
no
maeer
what
approach
you
take
to
markePng.
Chapter 16: Sales
It
will
be
difficult
pu`ng
in
a
lot
of
work
only
to
hear
“no”
9
Pmes
out
of
10,
but
if
you
are
confident
your
product
matches
people’s
needs
and
you
keep
this
raPo
in
mind,
it
will
get
beeer
moving
forward.
If
you
sPll
dislike
the
idea
of
sales,
it’s
probably
because
of
one
of
the
following
reasons:
The 2 Reasons People Dislike Sales
1. You are forcing a product on customers
If
you’re
a
decent
person,
it
feels
wrong
to
tell
people
they
should
buy
a
product
that
they
actually
don’t
need.
If
they
don’t
need
it,
you
shouldn’t
be
selling
it
to
them.
2. You don’t believe in your product or service
Once
you
idenPfy
what
somebody
needs
and
know
that
your
product
offers
a
viable
soluPon,
you
should
be
eager
to
offer
it
to
them.
If
not,
you
don’t
believe
in
the
usefulness
of
your
product.
Nobody
would
outsource
sales
if
customers
simply
said
“I’m
interested
in
your
product,
how
much
do
you
want
for
it?”
Then
you’d
love
sales!
It
sounds
outrageous,
but
if
you
prove
that
you
understand
what
people
need,
and
offer
a
great
soluPon
for
it,
they
will
start
to
do
this.
Chapter 16: Sales
Resources Recap
•
Sales
Techniques:
From
Pitch
to
Close
(course)
•
Sales
Process
•
5
Step
Sales
Process
(video)
•
Sales
Templates
(legal
document
Package)
•
How
to
Persuade
People
(eBook)
•
How
to
Persuade
People
(lecture)
•
Sell
Ideas,
Not
Products
(video)
•
The
Importance
of
Hiring
Salespeople
(video)
•
Don’t
Hire
Salespeople
too
Fast
(video)
•
ProspecPng
•
ProspecPng
Sales
QuesPons
(video)
•
How
to
Triple
Sales
(video)
•
How
to
Enjoy
ProspecPng
(video)
Chapter 16: Sales
17. Marketing & PR
In
this
chapter
I’ll
be
breaking
down
markePng,
parPcularly
online
marke>ng,
which
can
be
confusing
but
is
an
essenPal
skill
in
the
digital
age.
Learn
the
secrets
of
boosPng
traffic,
from
free
SEO
improvement
tricks
to
partnerships
with
influenPal
online
publicaPons.
When
you’re
ready
to
commit
to
a
paid
adver>sing
strategy,
I’ll
guide
you
through
the
three
key
benchmarks
that
will
help
guide
your
success.
Finally,
I
will
clarify
misconcepPons
regarding
PR,
and
help
you
understand
its
limitaPons
and
advantages
when
it
comes
to
gaining
exposure
and
customers.
Online Marketing
Whether
you
have
a
simple
website
to
market
your
physical
business
or
a
complex
online
product
that
defines
your
business,
ge`ng
traffic
to
your
site
is
criPcal
to
increase
customers.
You
can
always
buy
traffic
into
your
site
by
buying
online
ads,
but
there
are
seven
tacPcs
you
can
try
first
to
drive
traffic
for
free:
1.
SEO
Metadata
The first thing you should be doing to improve SEO is
increasing your visibility to search engines by making your
content easily labeled and searchable. You do this by filling
out your metadata, including the title tag and the H1 tag (also
known as the header). Make sure that each individual piece
of content your site features has it’s own page with distinct
title and header tags that properly describe the content.
Chapter 17: Marketing & PR
Inbound Links
Increasing inbound links (external links that direct to your site)
is crucial for improving SEO. To find which sites are linking to
yours, go to Yahoo and type in “link:
www.yoursitename.com” to see a list of incoming links. You
can also search on Technorati to see what blogs are linking to
you. Track this number, and be sure it’s growing every month.
Indexed Pages
The more pages you have on your website, the more traffic
you will get. It’s that simple. The more pages you build out,
the more can be indexed in search engines, and the more
traffic you will pull.
Chapter 17: Marketing & PR
2.
Press
Inbound
links
may
be
key
to
ge`ng
more
traffic,
but
how
do
you
get
more
people
to
link
to
your
site?
One
way
is
to
get
more
press.
Press
doesn’t
come
from
simply
having
an
outstanding
product
that
reporters
noPce.
It
involves
diligently
encouraging
the
right
news
sources
to
cover
your
site.
Here
are
a
couple
Pps:
Get the Right Coverage Watch Competitors
Technorati is a great tool Make a list of your top ten
for discovering what competitors, then set up a
bloggers are most Google Alert for each of
relevant to your service; these competitors. You will
search keywords and be notified when and
topics that best describe where they’re mentioned
your website, and then in articles, so you can
filter the top blogs in that track what press outlets
field. Start by interacting are covering what they do.
with the bloggers, leave Look up the journalist that
comments on their blog, wrote the article, and the
tweet them, and open a news source, and log this
dialogue. Once you build information on a
a rapport, reach out to spreadsheet. Reach out to
them and ask them if the people on this list
they will cover your latest every month, and be
product. diligent about it.
Chapter 17: Marketing & PR
3.
Social
Media
Everyone
knows
about
tradiPonal
social
media,
like
Facebook
and
Twieer,
but
there
are
enPre
sites
dedicated
to
helping
people
discover
interesPng
content
like
yours,
including
Reddit
and
Stumbleupon.
Leverage
these
link
aggregate
sites
to
get
more
eyes
on
your
most
interesPng
content.
Produce Content Build Community
Spend some time on Spend time engaging the
Reddit, see what type community before
of content makes it to submitting content. Sites
the homepage, and like Stumbleupon are based
what kind of posts on peer-sourced and
people upvote. collaborative content
Understand the sharing, so being an active
community, and then member of the community
create content that is will help you share pages
appropriate for that from your site more
audience. A post on organically and successfully.
the homepage of Stumbleupon activity isn’t
Reddit has the as viral as a single post on
potential to drive up to Reddit, but has the potential
25,000 unique visitors to bring in more consistent
to your site in a day. traffic over a few months.
Chapter 17: Marketing & PR
4.
Partnerships
Partnerships
and
distribuPon
deals
take
more
persistence
than
any
other
efforts,
and
aren’t
guaranteed
to
succeed.
But
if
you
manage
to
make
a
deal
with
a
top
site
in
your
field,
it
has
the
potenPal
to
drive
a
considerable
amount
of
traffic,
as
well
as
exposure.
Learn
about
biz
dev
in
this
video
and
guide,
then
read
these
examples
of
small
startups
that
got
big
companies
to
work
with
them:
Mixx is a news aggregator site, similar to Reddit. The
Founder, Chris McGill, built an incredible product and
then leveraged his ties with the online publishing
world. He made a deal with CNN so that each article
CNN
page contained a Mixx button, so that each piece
could be submitted to Mixx. If you track Mixx’s traffic
during this time, you will find that this subtle move
affected their hits and uniques substantially.
Docstoc noticed that prominent publishers, such as
the New York Times and the Huffington Post, were
NY Times
using a competitor to embed documents for a
prominent news story. So we picked up the phone
and built relationships with these publishers, helped
them embed documents on their site and showed
them how it would improve their user experience.
Chapter 17: Marketing & PR
5.
Refreshing
Content
A
lot
of
what
we
discussed
will
help
you
drive
unique
visitors
to
your
site,
which
is
valuable.
But
it’s
also
very
important
to
keep
customers
coming
back,
so
you
don’t
simply
have
spikes
in
traffic,
but
are
consistently
building
upon
your
traffic.
Consider
this:
why
do
you
return
to
sites
you
love,
or
bookmark
them?
Because
they
have
new,
interesPng
content.
Don’t
let
your
homepage
become
a
staPc
business
card
for
your
website,
find
a
way
to
keep
fresh
content
cycling
through.
Automatic vs. Manual Refreshing
Once you’ve built a repository of content, if you don’t have
the time or resources to sift through it for the best content to
feature, you may choose to automate the process.
At Docstoc we created an algorithm that calculates the
most downloaded documents (which we assume have a
certain level of quality), and surfaces them to the homepage.
In our case, we often rely on user-generated content, which
means we aren’t spending our own resources creating new
content in the first place.
Chapter 17: Marketing & PR
6.
Viral
Loop
A
viral
loop
is
essenPally
any
way
that
you
can
turn
users
into
marketers
for
your
website.
This
is
a
great
example
of
a
viral
loop:
LinkedIn and Contacts
The most classic example of a viral loop was LinkedIn in
2003, when the site was still fairly unknown. Back then I was
in business school, and I created an account on LinkedIn.
While searching the site, I saw another user who had over
500 connections on LinkedIn, and had a little badge next to
his name designating him as a special user.
I wanted a badge too, so I copied my 800 contacts stored
on Outlook and sent them all a message to join my LinkedIn
network. A meaningful percentage of my contacts that day
that signed up for LinkedIn.
Why? Because I was a warm contact, the invite came from
somebody that these people already knew. And many of
them probably sent invites to their contacts, sparking a
chain of outreach that drove tens of thousands of users from
my one decision.
LinkedIn had turned me into a user marketer, who brought
them an exponential boost in traffic for free.
Chapter 17: Marketing & PR
7.
Solve
a
Compelling
Need
This
may
be
the
most
obvious
strategy,
since
everyone
wants
their
product
to
be
useful
and
to
fulfill
their
customer’s
need.
However,
solving
a
compelling
desire
can
be
surprisingly
difficult.
SomePmes
it’s
easy
to
lose
sight
of
human
beings’
most
basic
needs:
1.
Money
2.
Love
3.
Health
We
all
want
to
lose
weight,
to
make
enough
money,
and
to
be
loved.
The
best
networking
plays
off
our
need
to
connect,
to
feel
beauPful,
to
interact
with
those
we
love.
Consider
how
you
can
link
your
product
or
service
to
one
of
those
most
visceral
desires.
Chapter 17: Marketing & PR
Paid
MarkePng
Once
you’ve
mastered
the
free
methods
to
gain
online
traffic
(and
when
you
have
a
source
of
money),
you
can
consider
paid
adverPsing
through
Facebook,
LinkedIn
or
AdWords.
This
strategy
can
apply
to
both
online
products,
physical
products,
and
even
retail
businesses,
who
can
target
their
Google
AdWords
adverPsements
using
geolocaPon.
The
goal
of
paid
marke>ng
is
to
make
sure
that
the
life>me
value
of
the
product
you
sell
is
in
excess
of
the
cost
per
acquisi>on.
This
means
that
whatever
money
you’re
pu`ng
into
acquiring
customers,
make
sure
that
you
consistently
make
more
money
from
the
actual
sales.
These
three
variables
will
determine
if
you’re
meePng
this
standard:
CPC Price CR
Cost Per The price of Conversion
Click, the your Rate: how
amount you’re product, the many people
charged per amount a who click your
click. Usually customer site actually
ranges from 50 will pay you buy the
cents-$1.50 product?
Chapter 17: Marketing & PR
Leveraging Public Relations
You
may
know
about
press
releases
and
“damage
control,”
but
a
lot
of
business
owners
misunderstand
the
purpose
of
PR,
and
what
it
can
do
for
your
business.
PR
will
probably
not
drive
a
lot
of
customers
or
sales,
but
is
important
in
the
long-‐term
for
the
following
benefits:
1.
Building
Awareness
2.
Adding
Credibility
A
mistaken
assumpPon
that
I
hear
a
lot
is
“if
I
just
get
more
press,
we’ll
get
a
boost
in
sales.”
If
you’re
featured
on
Fox
business
or
wrieen
up
in
a
popular
news
source
like
the
New
York
Times
or
Wall
Street
Journal,
your
sales
won’t
necessarily
jump.
You
will,
however,
increase
awareness
of
your
product,
while
adding
credibility
of
being
in
a
recognized
publicaPon.
Chapter 17: Marketing & PR
Resources Recap
•
Free
Ways
to
Drive
Online
Traffic
(PPT)(eBook)
•
SEO
and
Growing
Website
Traffic
(course)(legal
document
package)
•
Press
Tools
•
TechnoraP
•
Google
Alerts
•
Social
Media
(course)
•
Social
Media
MarkePng
Industry
Report
(doc)
•
Link
Aggregate
&
Sharing
sites:
Reddit,
Stumbleupon
•
Partnerships
•
Guide
to
Business
Development
(course)
•
10
Keys
to
Business
Development
(video)
•
Tips
for
Beeer
BD
(doc)
•
Online
AdverPsing
•
AdWords
•
Running
a
Successful
AdWords
Campaign
(course)
•
Public
RelaPons
•
Press
Release
Template
(doc)
Chapter 17: Marketing & PR
18. Financial Planning &
Accounting
Bringing
in
revenue
is
great,
but
in
order
to
be
sure
you’re
profitable
you
must
be
able
to
properly
evaluate
your
income
against
your
expenses.
In
this
chapter
I’ll
review
key
financial
statements
every
business
owner
must
know
inside
and
out,
such
as
income
statements
and
financial
projec>ons.
I’ll
also
walk
through
key
formulas
that
help
you
do
things
like
weigh
assets
against
liabili>es.
Finally,
I’ll
discuss
the
bookkeeping
tools
you
can’t
live
without,
and
provide
resources
that
will
help
you
master
them.
Key Financial Statements
For
any
business,
there
are
three
important
financial
statements
that
are
criPcal
to
properly
running
your
company.
Income
Statement
Your
income
statement,
or
profit
&
loss
statement,
is
a
measurement
of
you
total
costs
against
your
total
revenue
to
determine
your
net
income.
There
are
five
key
components
to
an
income
statement.
See
the
formulas
on
the
next
page
to
understand
how
they
relate
to
one
another.
• Gross
Revenue:
the
total
amount
of
money
that
your
company
brings
in
• Cost
of
Goods:
the
cost
of
materials
to
develop
of
your
product
• Gross
Profit:
gross
revenue
minus
the
cost
of
goods
• Opera>ng
Expenses:
everything
that
supports
the
business
outside
of
the
cost
of
goods,
like
salaries,
rent,
supplies
and
markePng
• Net
Income:
the
actual
revenue
you’re
let
with
ater
goods
and
operaPng
expenses,
the
true
measure
of
profit
Chapter 18: Financial Planning
Gross
Revenue —
Cost of
Goods
= Gross
Profit
Gross
Profit —
Operating
Expenses
= Net
Income
Income Statement Example
Let’s say you sell laptop covers for $20 each. You had 10,000
sales, which equals $200,000 gross revenue. But of the
10,000 products you sold, you owed $5 each for the cost of
goods, so $50,000. You then have a $150,000 of gross profit.
In addition, throughout the year you paid for rent, salaries,
marketing and other operating expenses, which amounted to
$100,000. You are left with $50,000 net income, which you
keep to reinvest in the business.
Chapter 18: Financial Planning
Balance
Sheet
A
balance
sheet
is
a
snapshot
of
your
current
assets
and
liabiliPes
in
relaPon
to
one
another.
It
involves
three
components:
• Assets:
the
total
amount
of
tangible
and
financial
assets.
• Liabili>es:
the
amount
of
debt,
loans
and
other
values
you
owe
• Shareholder
Equity:
assets
minus
liabiliPes,
the
net
worth
of
a
company,
the
shareholder’s
claim.
Shareholder
Total
Assets —
Total
Liabilities = Equity
Financial
ProjecPons
Financial
projecPons
are
essenPally
income
statements
for
the
future,
where
you
make
assump>ons
on
your
financial
metrics.
They’re
used
to
make
projecPons
of
your
income
one,
two
or
even
five
years
in
the
future,
and
will
oten
be
requested
by
investors
interested
in
your
business.
While
they
won’t
necessarily
predict
the
future,
they
provide
a
helpful
guidelines
and
goals
to
work
towards.
Chapter 18: Financial Planning
Bookkeeping & Tax Planning
The
two
key
programs
that
you
absolutely
must
familiarize
yourself
with
as
a
small
business
owner
are
Quickbooks
and
Excel.
Excel
will
allow
you
to
calculate
all
of
the
financial
statements
detailed
earlier
in
this
chapter.
Here
are
some
keyboard
shortcuts
to
save
you
Pme.
Quickbooks
provides
the
basic
building
blocks
for
managing
accounPng
over
a
long
period
of
Pme.
You
should
feel
comfortable
using
Quickbooks
and
analyzing
your
own
chart
of
accounts.
For
more
informaPon
see
this
Tax
Guide
for
Small
Business
Owners.
Chapter 18: Financial Planning
Resources Recap
•
Key
Financial
Forms
•
Financial
Statements
&
ProjecPons
(legal
document
package)
•
Profit
&
Loss
Worksheet
(doc)
•
Income
Statement
(doc)
•
Balance
Sheet
(doc)
•
Financial
ProjecPons
(doc)
•
Financial
Tools
•
Excel
•
Excel
for
Business
(course)
•
Excel
Shortcuts
(doc)
•
Quickbooks
•
Quickbooks
2012
(course)
•
Quickbooks
Shortcuts
(doc)
•
Taxes
•
Tax
Guide
for
the
Small
Business
Owner
(doc)
Chapter 18: Financial Planning
19. The Business Dashboard
This
chapter
explores
the
business
dashboard,
which
is
a
snapshot
of
your
business
progress
based
on
key
performance
indicators.
Key
Performance
Indicators
(KPI’s)
help
you
measure
your
business
success
in
a
variety
of
areas.
Measuring
success
may
seem
as
simple
as
more
money
=
more
success,
but
long-‐term
growth
relies
on
a
variety
of
factors.
In
this
chapter
I’ll
be
detailing
a
variety
of
staPsPcs,
raPngs
and
measurements
that
will
help
you
concretely
track
your
business
success.
Key Performance Indicators
Your
key
performance
indicators
are
the
metrics
that
you
should
track
closely
and
use
to
measure
your
success.
You
should
be
regularly
checking
your...
1. Number
of
customers:
Your
number
of
customers
in
that
moment
or
period
of
Pme.
2. Growth
rate:
How
many
customers
you
have
gained
over
a
period
of
Pme
(month-‐to-‐month).
3. Total
sales:
The
total
amount
of
sales
you’ve
made
in
this
period
of
Pme.
4. Expenses:
The
total
amount
of
expenses
your
business
spends,
on
costs
of
goods
as
operaPng
expenses.
5. Customer
ra>ng:
What
saPsfacPon
raPng
do
customers
give
your
product,
from
1-‐10?
Different
KPI’s
maeer
more
depending
on
what
type
of
business
you
have.
I’m
going
to
review
two
examples,
to
give
you
some
ideas
of
different
types
of
KPI’s
you
might
consider
for
benchmarking
your
own
business.
Chapter 19: The Business Dashboard
SubscripPon
Orders:
Tea
Time
Alexa
makes
tea,
and
has
her
tea
shipped
to
customer’s
door
monthly
via
subscripPon
service.
Important
metrics
for
Alexa
would
be
standard
KPI’s
like
her
number
of
customers
and
growth
rate.
Because
maintaining
subscribers
is
important
to
her
growth,
she
would
also
want
to
focus
on
the
Quick Tip life>me
value
of
a
customer.
How
long
do
most
customers
subscribe
to
her
service?
For dashboard tools
that help you track
KPI, check out What’s
the
cancela>on
rate?
StatsMix, BIRT and The
number
of
requested
Klipfolio. refunds?
Her
goal
should
be
to
constantly
drive
these
numbers
down.
Because
it’s
important
to
maintain
customer
saPsfacPon
in
a
subscripPon-‐based
service,
it’s
important
that
Alexa
conPnues
raPng
customer
sa>sfac>on
and
aims
to
lower
dissaPsfacPon.
Her
orders
are
filled
online,
so
it’s
important
for
her
to
track
her
web
traffic.
What’s
the
CPA,
cost
per
acquisiPon
of
a
customer
through
her
website?
What’s
her
conversion
rate,
between
customers
who
click
on
her
site
and
those
who
actually
buy?
Chapter 19: The Business Dashboard
Ad-‐Based
Revenue:
Online
Mag
Joe
has
an
online
magazine,
which
makes
money
from
the
adverPsements
placed
on
his
site
through
AdSense.
The
most
important
thing
for
Joe
isn’t
a
physical
product
or
distribuPon,
but
increasing
his
traffic.
Key
metrics
to
follow
are
his
unique
visitors,
page
hits,
and
>me
per
session
of
each
site
visitor.
Depending
on
the
topic
he
covers,
Joe
might
also
want
to
track
the
demographic,
and
make
sure
he’s
targePng
the
right
audience
with
his
content.
If
Joe
hires
writers,
he
wants
to
compare
his
monthly
expenses
against
his
revenue.
The
revenue
from
adverPsements
can
be
tracked
by
his
CPM
(cost
per
thousand
impressions).
If
he’s
making
$20
CPM,
he
knows
he’s
got
a
fantasPc
web-‐based
business.
His
goal
is
to
drive
up
his
CPM
unPl
he
makes
a
sustainable
amount
of
revenue.
Chapter 19: The Business Dashboard
Resources Recap
•
Understanding
KPIs
•
How
KPI’s
Help
your
Business
(arPcle)
•
How
to
Define
Your
KPI’s
(arPcle)
•
Benchmarking
Your
Way
to
Success
(arPcle)
•
Managing
Common
Business
Expenses
(arPcle)
•
Business
(KPI)
Dashboard
Services
•
Statsmix
•
BIRT
Performance
Analysis
•
Klipfolio
•
Benchmarking
•
The
S.M.A.R.T
Way
to
Set
goals
(video)
Chapter 19: The Business Dashboard
20. Primary Legal Considerations
Terrified
of
legal
disputes?
Don’t
be,
every
entrepreneur
has
to
handle
legal
maeers
throughout
the
course
of
managing
their
business.
It’s
a
part
of
the
process.
You
may
be
considering
working
with
an
a@orney,
but
are
worried
about
paying
too
much
for
the
wrong
lawyer.
In
this
chapter
I’ll
explain
how
to
pick
the
right
aeorney
for
you,
and
guarantee
a
good
relaPonship
down
the
line.
I’ll
also
review
how
to
manage
lawsuits,
and
prevent
them
before
they
begin
with
the
help
of
contracts.
Working With Business Attorneys
When
you
need
an
aeorney,
its’s
a
good
idea
to
choose
a
lawyer
through
a
warm
recommendaPon
from
somebody
you
trust.
If
you’re
evaluaPng
this
person
on
there
own,
there
are
two
criteria
by
which
you
can
evaluate
them.
Check
out
this
course
for
more
legal
advice.
Personality
Fit
It
may
seem
trivial,
but
it’s
important
that
you
click
with
your
business
aeorney.
You
want
to
feel
comfortable
calling
them,
and
dealing
with
tough
issues.
If
your
personaliPes
clash,
it
won’t
work
out
long
term.
Competency
in
Your
Field
Most
importantly,
the
aeorney
should
have
experience
with
situaPons
similar
to
yours.
You
want
someone
who
has
already
dealt
with
situaPons
you
expect
to
deal
with
moving
forward;
this
will
give
them
the
ability
to
spot
and
prevent
issues
ahead
of
>me
you
might
not
an>cipate,
and
which
might
hurt
you
later
on.
Chapter 20: Legal Considerations
Preventing & Managing Lawsuits
Your
should
avoid
common
business
mistakes
that
lead
to
ge`ng
sued,
but
you
should
also
embrace
the
fact
that
there’s
a
decent
chance
it
may
happen
to
you
at
some
point
down
the
line.
Lawsuits
happen,
don’t
be
scared
of
them.
They’re
simply
the
process
we
have
whereby
we
solve
grievances
when
they
can’t
be
resolved
any
Quick Tip
other
way.
Leverage waivers and
other legal documents
However
they
do
take
Pme
and
to release your
energy,
and
having
the
right
business
company of liability
aeorney
will
help
you
spot
issues
that
during risky situations.
may
turn
into
court
cases
down
the
line,
and
manage
cases
properly
when
they
do
occur.
In
this
video
watch
Docstoc’s
lawyer
explain
how
you
can
use
contracts
(and
which
ones
to
use)
in
order
to
avoid
costly
legal
baeles
down
the
line.
Chapter 20: Legal Considerations
Resources Recap
•
Working
with
a
Lawyer
•
Choosing
an
Aeorney
(video)
•
Legal
Guide
to
Forming
Your
Business
(course)
•
Legal
Guide
to
Building
Your
Business
(course)
•
Keeping
Your
Personal
and
Business
Aeorney
Separate
(video)
•
PrevenPng
&
Managing
Lawsuits
•
Common
Legal
Mistakes
When
StarPng
a
Business
(arPcle)
•
Assessing
the
Probably
of
Winning
a
Lawsuit
(video)
•
Choosing
the
right
aeorney
for
a
Lawsuit
(video)
•
PrevenPng
Legal
Baeles
with
Contracts
(video)
•
Small
Business
Legal
Toolkit
(legal
document
package)
•
Waiver
of
Liability
(custom
legal
doc)
Chapter 20: Legal Considerations
21. Mentors, Advisors & Board
The
biggest
things
that
will
slow
your
business
down
to
a
crawl
are
the
things
you
can’t
see
coming;
great
advisors
and
board
members
can
help
you
see
them,
and
prepare
for
them.
In
this
chapter
I
review
how
to
court
the
right
mentors
for
your
business,
and
offer
them
a
posiPon
on
your
Board
of
Advisors.
For
those
of
you
looking
to
raise
money
for
your
corporaPon,
understand
the
obligaPons
you
have
to
your
Board
of
Directors.
Learn
how
to
structure,
select
and
orient
a
new
board
members
so
that
they
are
beeer
primed
to
help
you
grow.
What You Don’t Know
There’s
one
thing
that
trips
up
all
new
business
owners:
the
things
that
you
don’t
know
that
you
don’t
know.
Confused?
There
are
things
you
know,
and
skills
that
already
you
have.
There
are
also
things
you
realize
you
don’t
know
yet,
and
plan
to
learn
or
prepare
for.
Then
there’s
a
third
category:
things
you
don’t
even
realize
you
are
unaware
of.
Most
businesses
run
into
real
trouble
in
situaPons
that
they
haven’t
encountered
or
even
considered,
because
they
haven’t
adequately
prepared
for
them.
For
example,
part
of
Docstoc’s
revenue
comes
from
our
online
subscripPon,
and
the
issue
of
chargebacks
was
never
even
on
my
radar.
I
never
considered
pu`ng
a
chargeback
communicaPon
plan
in
place,
because
I
didn’t
know
it
could
be
a
serious
concern.
My
ignorance
lead
to
the
credit
card
company
telling
me
that
they
were
pu`ng
some
of
the
money
we’d
earned
on
hold.
Because
we
were
blindsided,
it
look
us
longer
to
recover
and
learn
from
this
setback.
Those
issues
that
you
never
see
coming,
those
are
the
reasons
you
court
mentors
and
advisors.
Read
on
to
learn
how.
Chapter 21: Mentors, Advisors & Board
Courting Advisors
My
advice
when
seeking
mentors
is
to
find
someone
who’s
done
something
very
similar
to
what
you
are
trying
to
accomplish.
Feel
out
whether
or
not
you
get
along
personally,
and
if
you’d
like
to
work
with
them
in
the
future.
You
can
start
off
lightly,
by
asking
the
person
out
for
some
coffee
so
you
can
chat
and
get
some
advice.
If
you
like
them,
you
can
offer
them
an
official
posiPon
on
your
board
of
advisers,
which
offers
them
equity
and/or
some
other
way
to
compensate
them
for
their
energy
and
contribuPon.
I
made
it
my
goal
from
my
first
day
as
an
entrepreneur
to
build
a
Quick Tip
large
network
of
advisers,
and
consistently
ask
them
for
not
only
For more specific
general
feedback,
but
for
advice
tips on putting
on
anything
I
might
be
missing. together and
leveraging an
Advisory Board,
I
consistently
asked
them
“What
check out this video
am
I
not
seeing
here?
What
issues
or this one.
lay
ahead?
How
can
I
prepare
for
these
problems?”
Chapter 21: Mentors, Advisors & Board
Working with a Board of Directors
To
review
the
chart
in
Chapter
4,
the
structure
of
a
corporaPon
is
broken
down
by:
1)
Shareholders:
the
owners
of
the
company
who
select
the
board
2)
Board
of
directors:
the
fiduciaries,
who
selects
the
officers
3)
Officers:
CEO,
CFO,
CTO
and
others
who
manage
the
company
In
smaller
companies,
people
may
be
a
part
of
more
than
one
of
these
categories.
If
you
go
out
and
raise
money
for
your
company,
you’re
almost
always
going
to
have
a
board
of
directors.
The
key
thing
to
remember
is
that
as
soon
as
you
have
a
board
of
directors,
parPcularly
if
you’re
not
the
majority
owner
of
your
company
anymore,
you
will
have
to
answer
to
the
board.
Chapter 21: Mentors, Advisors & Board
You
can
remain
the
main
operator,
and
be
the
primary
force
driving
your
business
forward,
but
you
need
to
keep
your
board
in
the
loop.
They
will
have
regular
meePngs,
and
a
vested
interest
in
the
success
of
your
company.
When
you
raise
money
for
your
business,
otenPmes
some
of
your
more
acPve
investors
end
up
being
on
your
board.
So
my
advice
is
not
to
think
that
the
sales
process
has
ended
once
you’ve
raised
money;
it
has
just
begun
with
your
board.
A
big
part
of
managing
your
board
of
directors
is
consistently
over
communica>ng,
making
sure
there
are
no
surprises,
and
over
delivering.
Video Tips: Board Selection & Structure
Q: How do I Q: How do I Q: How do I
structure my choose the orient new board
board? right board members?
members?
A: VIDEO A: VIDEO A: VIDEO
Chapter 21: Mentors, Advisors & Board
Resources Recap
•
Advisors
•
Board
of
Advisor
Agreement
(legal
doc)
•
Keys
to
Finding
a
Business
Mentor
(video)
•
How
an
Advisory
Board
Can
Benefit
Your
Company
(video)
•
Pu`ng
Together
a
Great
Advisory
Board
(video)
•
CreaPng
a
Personal
Board
of
Advisors
(video)
•
Board
of
Directors
•
What
does
a
Board
of
Directors
Do?
(arPcle)
•
Minutes
of
a
MeePng
of
the
Board
of
Directors
(legal
doc)
•
How
are
Board
Members
Compensated-‐
Shareholder
Director
Agreements
(arPcle)
•
Structuring
a
Board
of
Directors
(video)
•
Tips
for
SelecPng
Board
Members
(video)
•
CreaPng
OrientaPon
Materials
for
a
New
Board
Member
(video)
Chapter 21: Mentors, Advisors & Board
22. Buying & Selling Businesses
Whether
you’re
looking
to
buy
an
established
business,
or
you’ve
built
up
a
successful
business
from
scratch
and
are
ready
to
sell
it,
there
are
a
few
strategies
I’ll
review
that
you
should
keep
in
mind.
For
those
seeking
to
purchase
a
business,
I
will
provide
resources
for
finding
a
business
online.
If
you’re
selling
your
company,
I
explain
how
to
value
your
business,
so
that
you
get
the
most
for
your
business
without
asking
too
much.
Finally,
I’ll
explore
strategies
for
selling
and
markePng
different
types
of
businesses.
Finding a Business to Buy
Rather
buy
a
business
than
start
one?
These
are
Buy a Business
a
few
websites
where
you
can
search
for
a
business
• Biz Buy Sell
or
franchise
to
buy.
Keep
in
mind
these
red
flags
• Franchise Gator
before
buying.
Valuing a Business
The
most
tradiPonal
way
of
valuing
a
Business Valuation business
is
by
using
a
mul>ple
of
your
net
If you’re struggling with income
or
profits.
For
business valuations, check example,
if
you’re
out this Discounted Cash trying
to
sell
a
service
Flow analysis, which provides corporaPon,
you
will
a model for calculating the probably
sell
worth of your business. something
around
the
value
of
your
gross
receipts
for
a
year.
Chapter 22: Buying & Selling a Business
Selling Your Business
Ready
to
sell
your
business?
Depending
on
the
business,
you
might
get
even
more
than
the
value
of
your
gross
receipts
for
a
year.
For
example,
if
you
have
a
successful
project-‐based
business,
you
might
be
able
to
sell
for
3-‐10
Pmes
the
mulPple
of
your
net
income.
The
circumstance
in
which
you
can
get
a
higher
or
mulPple
of
your
net
income,
is
if
your
business
is
growing.
The
rule
of
thumb
is
the
faster
a
business
is
growing
(the
Sales Contracts higher
the
increase
in
net
income),
the
greater
the
mul>ple
you'll
receive
for
your
If it’s the right time to business.
sell your business,
you may choose to
do so with a simple
Bill of Sale. If you’re
a sole proprietor,
check out this
customizable
Agreement of Sale.
Be sure to avoid
these mistakes when
selling your
business.
Chapter 22: Buying & Selling a Business
Resources Recap
•
Buying
a
Business
•
Buying
a
Business
(legal
document
package)
•
StarPng
vs.
Buying
a
Franchise
(arPcle)
•
What
to
Know
Before
Buying
a
Franchise
(arPcle)
•
Reg
Flags
When
Buying
a
Business
(arPcle)
•
Tools
for
Buying
a
Business
•
BizBuySell
•
Franchise
Gator
•
Selling
a
Business
•
Selling
a
Business
(legal
document
package)
•
Discounted
Cash
Flow
Analysis
(doc)
•
Bill
of
Sale
(custom
legal
doc)
•
Agreement
For
Sale
of
Business
by
Sole
Proprietor
(custom
legal
doc)
•
7
Mistakes
to
Avoid
When
Selling
a
Business
(arPcle)
Chapter 22: Buying & Selling a Business
23. Strategy
Risk
is
an
integral
part
of
every
business,
and
needs
to
be
constantly
evaluated
and
miPgated.
Strategy
is
all
about
making
the
right
decisions,
and
protecPng
yourself
from
too
much
downside
risk.
Deciding
which
risks
to
take,
and
which
ones
to
avoid
can
be
tricky.
How
do
you
make
choices
without
jeopardizing
your
business?
In
this
chapter
I’m
going
to
explore
how
to
protect
yourself
from
a
unnecessary
risk,
while
employing
decision-‐making
strategies
to
help
you
make
the
best
choices
for
your
business.
Learn
how
to
take
the
chances
that
will
get
you
ahead,
not
leave
you
in
the
dust.
Make the Right Business Decisions
I
have
this
Decision
Making
Matrix
up
in
my
office,
because
these
four
factors
help
me
make
choices
for
my
business
every
day.
The
key
is
to
balance
these
four
factors,
make
sure
there’s
enough
of
each
of
them
in
your
strategy.
To
read
more
about
the
four
factors
check
out
this
eBook.
Potential Upside Likelihood of Success
Does this initiative have To balance out the
clear, meaningful potential upside,
potential for growth? evaluate your chances of
It’s very important to actually succeeding. If
weigh this factor they’re low, it’s probably
against the other three. not worth doing.
Effort Involved Strategic Value
How much effort will it How does this decision
take? Even if the potential help you reach your
upside is big, if it takes a ultimate goal in your
year before you know business? If it doesn’t
whether it succeeds, it contribute directly to your
might not be worth it. overall plan, be cautious.
Chapter 23: Strategy
Protect Your Downside Risk
A
lot
of
being
successful
in
businesses
is
just
about
being
able
to
stay
in
the
game
and
see
things
through.
To
survive
the
storm,
you
need
to
protect
your
downside
risk.
I’m
willing
to
take
on
a
lot
of
risk,
as
any
business
owner
is.
Just
look
at
the
message
of
this
book;
I’m
encouraging
you
to
believe
in
your
business
idea,
and
take
out
savings,
credit
cards,
whatever
you
need
to
in
order
to
start
that
business.
I
will
never
encourage
people,
however,
to
take
a
risk
that
doesn’t
have
an
accompanying
payout.
This
is
an
unnecessary
risk.
Don't
take
risks
that
have
a
low
likelihood
of
a
major
reward
or
that
could
poten>ally
cripple
your
business
if
unsuccessful.
A
lot
of
this
has
to
do
with
your
own
resources.
Make
sure
you
always
have
enough
to
get
by,
and
to
fight
another
day.
Your
goal
is
to
take
risks
that
have
a
potenPal
upside,
without
the
downside
risk
being
the
loss
of
your
business,
your
mortgage,
or
your
ability
to
cover
rent
or
living.
Having
those
concerns
weighing
on
your
shoulders
will
make
you
a
worse
businessperson
in
the
long
run.
You
may
perform
well
under
pressure
for
the
first
year,
but
ater
3
or
5
years,
you
will
break
under
the
tension
and
make
poorer
decisions
for
it.
Chapter 23: Strategy
24. Philosophies
There
are
many
philosophies
of
entrepreneurship,
and
these
principles
help
business
leaders
guide
their
overall
sense
of
purpose.
Even
more
important
than
financial
models
and
markePng
strategies,
is
a
solid
overall
vision.
What’s
driving
you
forward?
How
much
do
you
believe
in
the
problem
you’re
trying
to
solve?
Your
dedicaPon
to
your
vision
will
be
the
main
thing
that
drives
you
forward,
and
in
this
chapter
I
explain
how
to
secure
your
fooPng
in
your
business
philosophy,
and
let
it
stabilize
you
as
your
company
grows.
The Entrepreneur’s Dilemma
In
their
journey
to
growing
their
business,
most
entrepreneurs
will
be
conflicted
between
two
opposing
myths
about
leaders:
The Visionary Leader The Flexible Leader
There
is
an
idealized
On
the
other
hand,
we
image
of
great
know
that
a
lot
of
entrepreneurs
as
businesses
that
have
visionaries,
who
succeeded
have
done
maintain
unwavering
so
because
they
will
confidence
in
their
idea.
willing
to
pivot
from
They
push
forward
in
their
original
idea.
spite
of
what
others
say,
When
thing
weren’t
and
end
up
being
working,
they
were
rewarded
for
their
smart
enough
to
perseverance. adapt.
How
do
you
miPgate
these
two
conflicPng
ideas
of
entrepreneurship?
How
can
you
be
an
inspired
visionary
who
fearlessly
pursues
what
nobody
else
sees,
but
have
the
wisdom
to
change
direcPon
at
the
right
Pme?
These
two
polarizing
values
comprise
the
entrepreneur’s
dilemma.
Chapter 24: Philosophies
Luckily
for
you,
there’s
a
soluPon
to
the
entrepreneur’s
dilemma:
“Stay
a@ached
to
the
problem
you're
trying
to
solve
but
be
flexible
in
the
solu>on
to
solve
it.”
Trust
your
insPncts
when
it
comes
to
the
problems
that
your
business
will
solve.
You
can
stay
aeached
to
that
issue,
and
remain
passionate
and
steadfast
about
helping
customers
solve
that
need.
Don’t
let
anyone
undermine
your
dedicaPon
to
the
problem
you’d
like
to
fix.
But
keep
in
mind
that
you’re
going
to
come
up
with
a
lot
of
different,
strange
ideas
for
how
to
solve
it,
and
those
may
need
to
change
down
the
road.
Be
prepared
to
adjust
your
approach,
or
even
change
it
drasPcally
if
you
need
to.
Be
willing
to
take
criPcism
and
suggesPons,
and
don’t
take
them
personally.
The
more
open-‐minded
you
are
about
soluPons
and
strategies
the
beeer
off
you’ll
be
in
the
long-‐run.
Chapter 24: Philosophies
More Resources
•
Entrepreneurship
• The
21
Golden
Rules
of
Entrepreneurship
(eBook)
(lecture)
•
How
to
Break
out
of
the
Pack
(eBook)(lecture)
•
How
to
Persuade
People
(eBook)(lecture)
•
Ten
Lessons
Startups
Can
learn
From
Superheroes
(document)(video)
•
Grow
and
Track
Your
Startup
Revenue
(eBook)
•
Bootstrapping
Your
Business
(eBook)(lecture)
•
Strategy
•
4
Factors
to
Success
(eBook)(video)
•
The
One
Most
Important
Thing
(video)
•
10
Strategies
for
Startup
Success
(eBook)(lecture)
•
The
One
Most
Important
Thing
in
Your
Business
(video)
•
Mistakes
People
Make
Before
StarPng
a
New
Business
(PPT)
