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					How to Start a Business
                  by	
  Jason	
  Nazar
How to Start a Business
                  by	
  Jason	
  Nazar
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)

				
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