“I have a great idea, but I don’t have any money to start up”, is one of the most common things heard in the entrepreneurial world. If that’s you, don’t worry, you’re not alone, many entrepreneurs have been in that position, especially when first starting out. Unfortunately, it does take money to start a business and it does take money to make it grow. The good news: if you don’t have very much, or none at all, it’s not a deal breaker. There are many ways you can start a business with very little to no money.
Get a Loan
Many startups begin with a loan. There are a number of different options out there for small business loans including banks, your network, and other agencies.
Banks – Banks typically require a complete business plan, good credit, and some sort of
security like a co-signor to ensure the loan will get paid back. They may also want to see
some proof of results.
Personal Network – Don’t be afraid to go to your personal network, you never know if
there is someone there that would be willing to help, even if you have to put
together a number of small loans from multiple people.
Other Agencies - There are also a number of agencies and organizations that offer
business loans, such as the Small Business Administration in the U.S. These
agencies are great options for small businesses that have trouble getting a loan
from a bank. Each typically has its own requirements.
Most loans require that you’ve done the work to prepare a good business plan, and some kind of backing that you’ll be able to pay the loan back. The great thing about loans is that you maintain complete ownership over your business.
Search for Business Grants
There are a number of programs, non-profit organizations and other business groups that offer grants to entrepreneurs starting a business. They are usually offered regionally and often geared at specific fields and industries. Each typically has its own specific set of requirements in order to qualify, with many requiring a business plan or raising capital to match the amount of the grant. Some grants require you to submit ongoing updates and results as you start out. The great thing about grants is that you don’t have to pay them back and you retain full ownership of your business. It may take some research to find some business grants in your area, but could be well worth it.
Platforms like Kickstarter and Indiegogo allow someone to source funds from others in exchange for some kind of reward, usually related to your product or business. All you really need is a good idea or product and some things to get people excited like a good video and pictures. Crowdfunding is usually all or nothing, so if you don’t raise your target amount, you get nothing. On the plus side, with crowdfunding you can start to build some excitement behind your business and product, and like a loan, you maintain full ownership.
If you’re willing to part with some ownership of your business, it could be a good option to seek out angel investors or venture capitalists. Angel investors are wealthy individuals (need to have minimum net worth of $1M and an annual income of $200,000), that invest in startups, typically with their own money. Venture capitalists are similar to angel investors, but typically use a pool of money from multiple investors rather than just their own. In both cases they would receive a percentage of ownership of the business in exchange for the investment. You would need a good business plan, and may need some proof of results or proof of concept. With investors, although you are giving up a percentage of your business, the trade off is capital behind your business, and often access to more resources that can help you.
Get a Business Partner
Another way to get investment would be to look for a business partner. Unlike investors, a business partner would typically be a lot more involved in the day-to-day operations of the business. You could require the partner to bring capital in exchange for a percentage of the business. A business partner can be an asset in a startup as there is often a lot that needs to get done early on, and typically no one will work as hard as a person that has ownership. On the flip side partnerships can be challenging to manage at times, and if you don’t have the right partner and a very clear agreement, may cause more problems than it’s worth.
Apply to an Incubator/Accelerator
Incubators and accelerators, like Launch365’s Business Partnership Program, provide investment to startups through grants and seed money. The advantage of being accepted to such a program is that many offer additional resources, direct coaching, and mentorship to ensure a successful start. Most incubators/accelerators require some equity in your business, though some, like Launch365, are based on royalty which means you only pay if you’re getting results and allows you to retain full ownership. Regardless, if you are able to get into an accelerator or incubator, the equity or royalty is well worth the additional help and support you from experienced startup professionals. Accelerators and incubators are often competitive, so ensure you read their application requirements and provide your best work.
Generate and Use Revenue
If you’re unable to secure any significant investment, you can always try to generate some revenue and use that revenue to cover future costs. There are a few different ways you could do this.
Slow and Steady – Start with as much product as you can afford, and sell that, then
use that revenue to buy more product, and so on. Because you’re only buying
a limited amount of product at a time your costs should be minimal, and
each time you should have a bit more money to buy even more product and
generate more revenue.
Advanced Sales – Sell your product before a launch date. Put your initial money into
marketing so that you can generate as many advanced sales as possible, and use that
revenue to pay for your product and fund the rest of your business.
Sell a Non-Core Product – Find other products or services you could sell that could
generate revenue for the business outside your core product. Although this can
distract from your core product and business, many businesses start with a
small product before moving towards their core product.
Although this method of organic growth is typically not the fastest, when you’re unable to secure needed investment, it’s still a great option to get your business going.
Grind It Out on a Budget
Another option, when having trouble securing investment is to grind it out on a budget. If you need to take this approach, your budget should only include what’s absolutely needed to get your business started. Some key things when working with a small budget:
Use low cost services – take as much time as needed to find low cost services that
provide what you need. Though these services may not always be the best option
long-term, they can be great when first starting.
Negotiate everything – don’t be afraid to ask for a discount/lower price. The worst that
could happen is you may get a “no”. If there are parts of the service that you don’t
need, see if you can remove those things for a better price.
Barter for what you need – try offering something other than money in exchange for
the things you need. Maybe there is something that that business needs that
you could provide in exchange for what you need.
Although working on a small budget can also take more time to get going and grow, many successful businesses have started this way.
If you have a great idea for a business, don’t let a lack of money be the restrainer to getting started. Many great businesses have started out with very little to no money. If you’re in the same position use the ways above to get your business off to the races.
Launch365 specializes in training, coaching and mentoring entrepreneurs through business startup and on core business skills. We help many entrepreneurs secure needed funding and startups accepted to our Business Partnership Program can receive up to $10,000 in grants and seed money. If you would like to discuss how we could help you with your business, contact us at: www.launch365.ca/contact-us. To download our business startup guide titled “Startup Success Blueprint” for free go to: www.launch365.ca/startup-success.
In today’s world, the customer matters more than ever. Great companies understand that happy customers will continue to buy from them, buy more, and tell others. Focusing on customer satisfaction and building brand loyalty can be a sales strategy in itself that can lead to long-time success. So, how do you determine your customer’s loyalty? More than two thirds of Fortune 1000 companies are now turning to Net Promoter Score (NPS), developed by Fred Reichold, Bain & Company. NPS is an alternative to traditional customer satisfaction research that can give you a real sense of how your customer’s feel about your brand.
Calculating NPS to Measure Customer Satisfaction and Brand Loyalty
To determine NPS customers are surveyed on one single question: “On a scale of 0 to 10, how likely are you to recommend this company’s product or service to a friend or colleague?” The customer’s response will then classify them into 3 different categories: promoters, passives, and detractors.
Promoters are customers that gave a 9 or 10 rating. They love the company and its
products, and are likely to tell other potential buyers about their great experience.
Passives are customers that gave a 7 or 8 rating. They are somewhat satisfied, but
would very likely switch to a competitor if they were given a reason to switch.
Passives are not saying anything negative, but also not promoting to others.
Detractors are customers that gave a 0 to 6 rating. These customers are not happy
with their experience with the business or product. They are the customers that
won’t be buying again, and will likely tell others about their negative experience.
The Net Promoter Score is calculated by subtracting the percentage of detractors from the percentage of promoters. Let’s look at an example calculation:
“Example Company” surveys 300 customers
Ratings Returned: 10/10 = 39 4/10 = 4
9/10 = 54 3/10 = 4
8/10 = 68 2/10 = 2
7/10 = 58 1/10 = 11
6/10 = 25 0/10 = 17
5/10 = 15
Total Promoters (9 or 10 ratings): 39 + 54 = 93
Promoter % = 93 / 300 = 31%
Total Passives (7 or 8 ratings): 68 + 58 = 126
Passive % = 126 / 300 = 42%
Total Detractors (0 to 6 ratings): 25 + 15 + 4 + 4 + 2 + 14 + 17 = 81
Detractor % = 81 / 300 = 27%
Net Promoter = 31% - 27% = 4%
Deciphering Your Results
Net Promoter Score can generate a score between +100% (everyone is a promoter) to -100% (everyone is a detractor. So, what’s a good score? Typically, a score that is positive (above 0%) is considered good, and a score of 50% or more is considered excellent, though scores are highly variant on many factors including the type of business, country, culture, what you’re using NPS for, and even where you ask your customers in your survey. For example telecommunications services are much more likely to generate lower scores than travel services, and mobile services in Europe have a much greater NPS than mobile services in Australia. So, although it’s nice to have something external to bump up against, using external benchmarks is not a good idea. The best use of your NPS is as an internal measure to understand where your customer’s loyalty is with your business. Be consistent in when you ask your customers, how you ask your customers, and the survey you use. The more consistent you are the more accurate and valuable your score will be. Once you have your NPS, work to move it up and increase your brand loyalty.
Understanding the Truth in the Results
Although 50% is generally considered excellent, don’t get too wrapped up in the number, and don’t get caught patting yourself on the back too quickly. Let’s look at what 50% really means. For a score of 50% NPS there are only so many ways you can get this score. Let’s look at these scenarios.
Scenario A Scenario B Scenario C
100 customers surveyed 100 customers surveyed In between options A and B
50% give 9 or 10 rating 75% give a 9 or 10 rating
50% give a 7 or 8 rating 0% give a 7 or 8 rating
0% give a 0 to 6 rating 25% give a 0 to 6 rating
NPS = 50% - 0% = 50% NPS = 75% - 25% = 50%
Which scenario is better? Although in Scenario B you have more highly loyal customers, you also have more highly dissatisfied customers. If you use a the general rule that highly satisfied customers tell 1-2 other people and highly unsatisfied customers tell 5-10 others, in this scenario you have 75-150 others being told how great you are, and 125-250 others being told how bad you are. That doesn’t sound so great. On the flip side, in Scenario A, you have 50-100 people being told how great you are and no one being told you are bad. Sounds much better, and definitely the better scenario, but if you really think about it, even in Scenario A you only have 50% of your customers truly excited about you. That doesn’t seem like the ultimate goal to be striving for. So, before you go jumping up and down for the number you get, think about what it really means and what your opportunity is moving forward. Keep your celebrations and high fives for improving on your previous result.
Making NPS Work
In order for Net Promoter Score to really help you improve your brand loyalty follow these guidelines:
Company Adoption – ensure that everyone understands NPS, what it means, and how
to calculate it. From senior management through the entire organization it’s important
to eat, sleep, and breathe NPS and its importance.
Analyse the Data and Why – as stated above, don’t just focus on the number but dig
deeper to what’s really going on and why you’re getting the scores you’re getting.
Follow up with customers from all ends of the ratings to understand why they gave the
rating they did.
Empower Action – employees need to be given the power to act on NPS feedback
received. Give all employees the ability to make it right. Empower them to do what’s
needed to turn the detractors into passives and the passives into promoters.
Rewards and Recognition – recognize employees that generate high NPS scores and
those that turn customer’s experiences around. Reward them as much as you’d reward
sales and other areas of your business for high performance (or maybe even more so).
Be Consistent – be consistent in your commitment to NPS, how you speak about NPS,
and how you use NPS (when, where, how). The more consistent you are the more
accurate results you will get and the more impact it will have on your business.
Other Applications of NPS
NPS can be used to measure satisfaction and loyalty beyond customers that have bought your product or service. It could be used to better understand the experience of your non-buying customers, for example those that came to your store but didn’t buy. This could give you a better understanding of how those customers feel about you, and maybe even some indicators as to why they’re not buying. NPS could also be used to measure satisfaction and loyalty of employees, by asking them the same question as the customer NPS question: “On a scale of 0 to 10 how likely are you to recommend this job to a friend or colleague?” There are a number of different areas that NPS can be used to increase satisfaction and loyalty to your business.
Understanding and achieving brand loyalty is not easy, but in today’s business is central to success. High customer loyalty and satisfaction means customers that buy again, buy more, and tell others, and ultimately continued results and growth year after year. Net Promoter Score is the secret management tool that many great businesses are using to measure and increase their customer’s loyalty, why not do the same?
Launch365 specializes in training, coaching and mentoring entrepreneurs through business startup and on core business skills. We provide training and coaching on using Net Promoter Score to build brand loyalty. If you would like to discuss how we could help you with your business or on these skills, contact us at: www.launch365.ca/contact-us. To download our startup guide titled “Startup Success Blueprint” for free go to: www.launch365.ca/startup-success.
Finding the right people is one of the most important, but most challenging things to do. Many entrepreneurs have at one point or another hired the wrong person. Determining who is right for a particular position and your business as a whole, and who is not, is tough. Not only are candidates more prepared for interviews than they have ever been before, but it’s also the one place that you can guarantee they will be putting their absolute best foot forward. So, how do you get through all of that and determine if they are the right fit? Here are some keys that can help you hire the right people and avoid the wrong ones.
Avoid Situational and Future-Oriented Interview Questions
A common mistake for many interviewers is to ask situational and future-oriented questions. A situational question is one where you give a candidate a particular situation and ask them how they’d respond in that situation. These types of questions lead to hypothetical answers, which rarely give any real insight into a candidate. Their answer will tell you whether or not they know how they should handle a particular situation, but it won’t tell you whether or not they’ll actually handle it that way. For example, if you ask a retail applicant how they would handle a disgruntled customer, most would give you an answer that would lead you to believe they’d handle it professionally and gracefully, though we know that’s not always the case. Asking candidates future-oriented questions is asking them to tell you what you want to hear. You will gain very little information that will help you make strong hiring decisions. Instead of asking situational and future-oriented questions, focus your questions on the past.
Focus on Past Behaviour
Although many interviewers ask what someone has done in their past, few really dig into past behaviour; there’s a big difference between the two. For example, knowing that someone has experience working with children does not tell you anything about how they’d perform in such a role. In order to determine how they’d perform, dig into their behaviour while they were in a similar role in the past. Past behaviour is the best predictor of future performance. If they acted in a specific way in the past, it’s highly likely they will act the same way in a similar situation in the future. This is called behavioural interviewing. Here are some examples of behavioural questions you could ask a candidate applying for a role working with children:
Use Real Tests and Exercises
Even better than asking questions to try to determine how someone will perform, is seeing it directly. Although sometimes not practical, real tests will provide the most accurate information about a candidate. Imagine that instead of interviewing candidates you could have them all do the job for a couple of weeks. You’d be able to see how they’d actually perform in each of the job responsibilities, which would probably lead to great hiring decisions. Unfortunately doing that is typically not practical. What you could do instead though is provide real tests and exercises that align with some of the responsibilities of the job. For example, if an important requirement of the position is that they need to hit deadlines, through the interview process you could give them a few different tasks with deadlines. This will give you a real picture of when they complete things in respect to a deadline. As another example, if the job required strong writing skills, you could incorporate a writing component into your interview. By finding ways to really test what you are looking for, you will get information that is much more reliable than you will by asking questions.
Get the References You Want and the Answers You Need
It’s quite common for many interviewers to get references but to not bother calling them. This is probably because most find references to be relatively useless, which makes sense, as a candidate’s likely only going to provide references that would be good for them. That doesn’t mean that references are useless, and in fact they can be a very valuable tool in helping you select the right people. First, don’t be afraid to ask for references that you’d like to talk to rather than just getting references that the candidate provides. “As part of our interview process I’d like to connect with a few references, would it be possible to speak to….?” Second, when doing the reference check, don’t just ask what they think of the candidate or whether or not they’d recommend them, instead, use the reference to validate specific details you’ve learned and to give deeper insight into their character and behaviour. References are a great tool to validate details you’ve been given in an interview, such as specific job responsibilities, their behaviour in specific situations, and awards or recognitions received. Don’t just take their word that they were captain of the team and won the MVP award, instead ask their coach. References are also a great way to get further insight into character and behaviour. Prepare a list of specific questions that you’d like the reference to answer about the candidate. Here are some examples of questions that could provide valuable info on a candidate:
Use a Hiring Assessment Test
Another valuable tool for helping you select the right people is hiring assessment test. Hiring assessments can provide 3rd party insight into a candidate’s ability to perform a particular task or skill, and their personality make-up. These tests are commonly referred to as aptitude tests or personality tests, and there are many options readily available, including free options online and ones that you can have custom built for your roles and positions. Hiring assessments are not tools to replace interviewing a candidate, but can be used to get more information and information that you can match up to what you have learned directly to help you make better hiring decisions.
Ensure It’s a Two-Way Street
When selecting someone it’s important to make sure that both sides believe it is a great fit. Although it’s easy to assume that a candidate applying for a job inherently believes it’s a good fit, that’s not always the case. There could be outside pressure, or maybe a couple of aspects of the job that really appeal to them, but not the entire job. It’s important to make sure that through your interviews you give candidates enough time to ask as many questions as they need about the company and role to make the best decision for them. Often interviews can be too focused on getting the info needed to make the best decision for the company. On the flip side, it’s very easy to get caught up in the excitement of a candidate that really wants the position. Many interviewers have let this excitement mask finding out if the candidate is really a good fit. It’s always great when you have an excited candidate, but be sure to not let that stop you from really digging into their fit. By ensuring that both sides believe it is a great fit, you are much more likely to get the right people.
Finding and hiring the right people is one of the most challenging things to do for many entrepreneurs. It’s also one of the most important, as the people you select will have a direct impact on the results of your business. The above keys will lead you to more info on a candidate than before, more valuable info on a candidate, and better input from references, the candidates themselves, and other resources such as hiring assessments, which ultimately will lead to hiring more of the right people and avoiding the wrong ones.
Launch365 specializes in training, coaching and mentoring entrepreneurs through business startup and on core business skills. We provide training and coaching on all aspects of interviewing and selection. We also build custom solutions for all hiring needs. If you would like to discuss how we could help you with your business or on these skills, contact us at: www.launch365.ca/contact-us. To download our startup guide titled “Startup Success Blueprint” for free go to: www.launch365.ca/startup-success.
Doesn't Everyone Hate Cold Calling? Secrets to Changing Your Perspective and Increasing Your Results
You’re not alone. Many entrepreneurs dislike cold calling. Check that, many entrepreneurs hate cold calling. Why? It’s partly because of the belief that cold calls are unwanted and bothersome, but mostly because of the dislike and fear of social rejection. That being said, cold calling is a proven method that gets results. For a startup, it’s a method that can lead you to faster results than inbound options that require you to wait for interested parties to find you and then come to you. It’s a sure-fire way to get your business off to a quick and successful start. So, here are some secrets to changing your perspective and increasing your cold calling results.
Rejection is Good
Although cold calling does work, inevitably there will be a lot more rejection than immediate success. In fact, many businesses report cold call success at less than 10%. So, you should go in expecting that or worse. 90% or more rejection probably sounds terrible, unless you flip your thinking. Instead, think of if this way: every “No” is one step closer to a “Yes”. Cold calling is really a numbers game. The more “Noes” you get, the more “Yeses” you will end up at. In fact, instead of setting your goals on number of “Yeses”, try setting your goals on the number of “Noes” you want. It will feel very different, when you get a “No” and that “No” is moving you towards your goal.
It’s Not Just About the Yes
What is the purpose of a cold call? Most would say it’s to generate a lead, to get a “Yes”. If that is true, only a small percentage of your cold calls are achieving the goal, which can’t feel very successful. Instead, think of getting a lead as one of the potential positive outcomes from a cold call, but not the entire purpose of the call. The purpose of the cold call is to introduce your business and your products to your market. So the goal is not getting 10 leads, but rather telling 100 people about your business and products. By changing the purpose of your call, you will still achieve the leads you desire, but every call will feel like you are moving the needle. This isn’t just semantics, because every cold call does impact your business. The call may not result in an immediate lead, but it’s a touch from your business and could result in a lead down the line. If you just share your story and your products to the right people, the leads will come.
Attitude is Everything
One of the most important rules when it comes to cold calling is the “Sidewalk Rule”. The sidewalk rule means that you leave everything going on, good and bad, at the sidewalk before making the cold call.
Whether you just lost a big lead, the cold call before was rude, your best employee just quit, or you just lost your tenth deal in a row, ensure you leave it at the sidewalk. No matter what is going on, always bring a friendly and positive attitude to your cold calls. A negative attitude or negative feelings can always be perceived and will result in negative results. On the other hand, friendliness and positivity rub off and tend to lead to better results.
Your Authentic Self
There is definitely a negative perception in the marketplace about cold calling, which typically stems from people feeling like they are just being sold to. You can have an impact on how you are received and perceived by others by bringing your authentic self to your calls. Be real and make it your goal to tell them about your business, not to sell them. When cold calling, don’t read from a script, instead be conversational. This doesn’t mean just wing it. Ensure you know what you want to share and practice it as many times as you need to be comfortable, just don’t read what you want to say, know it instead. If you are genuine and authentic more people will listen, which will impact your results.
Mini-Goals and Breaks
Cold calling can be tough, especially when doing it often, or in big chunks. When you’re cold calling for long periods or have a big goal, rather than doing it all in one or two chunks, break it up by setting mini-goals and taking breaks when you achieve them. This can be an opportunity to recharge and make any adjustments needed to your calls. Having more personal energy and space to make little adjustments as needed can make all the difference in how it feels and the results you get.
Many entrepreneurs dread the idea of cold calling and some even avoid it like the plague. But, there is a reason that many successful businesses use it as a major lead generation tactic: it works. So, rather than carrying that negative feeling when cold calling, or avoiding it all together, trying using these secrets to change your perspective. 1) Shift your purpose to telling others about your business 2) Expect rejection and understand it’s just one step closer to results 3) Maintain a positive and friendly attitude no matter what 4) Bring your authentic self to your calls and be conversation; and 5) Set mini-goals and take breaks to keep your personal energy up and make needed adjustments. These 5 secrets will not only change how you feel about cold calling, but dramatically impact your cold calling results.
Launch365 specializes in training, coaching and mentoring entrepreneurs through business startup and on core business skills. We provide training and coaching on marketing, selling, and leadership of yourself and others. If you would like to discuss how we could help you with your business or on these skills, contact us at: www.launch365.ca/contact-us. Download our FREE guide to starting a business titled “Startup Success Blueprint”: www.launch365.ca/startup-success.
Whether you’re running a business or just working hard to try to get ahead, it’s really easy to let work take over your life. Many people find themselves giving up numerous evening weekends, just to stay afloat, when in reality there’s nothing more you’d like to do than to have that time to spend with your family, do things you enjoy outside of work, and to live your life. So when you find yourself staying late at the office, or having to give up that precious weekend time, here are a few things you can do to take that time back.
Don’t Schedule Too Much
When you schedule and plan your upcoming week, don’t try to be a hero. Be smart and realistic with what you can actually get done each day and through the week. One of the biggest reasons people end up working into their own time is because they were too ambitious with what they planned to get done.
Schedule in Slush and Backup Time
Each day it is important to schedule additional time that you keep open for tasks that go overtime or when something pops up. Your role and your skill level will typically determine how much slush time you need to schedule, but a good starting point would be 10-20%. You could either do it by adding an additional 10-20% of time to each task you have to complete, or by adding 10-20% additional open time throughout the day or at the end of the day.
Prioritize Your Tasks in a Week
It’s important to determine which tasks are “A” priorities and which tasks are “B” priorities. An “A” priority is one that must get done that week. A “B” priority is a task you would like to get done that week, but if needed could be moved to the following week. Schedule your A’s first, followed by your B’s. If something takes longer than expected, or another “A” comes up, it will allow you to easily recognize what should get done, and what can be moved.
Set Firm Deadlines
As you schedule your week or day, it’s important to set firm deadlines for tasks and for the end of your work day. Although it’s admirable to say you’ll work on it for as long as it takes, by setting a firm deadline it teaches you to problem solve how to hit deadlines. Imagine I told you to run to the end of your block. Now, imagine I told you have 1 minute to get to the end of your block. The result for each case would be different. By setting a deadline it forces different behaviour.
Learn How to Say No
Many people find themselves working evenings and weekends because they just have too much work to get done during reasonable hours. Often this excess work is a result of saying ‘yes’ to too many things. It’s up to you to manage the promises you make and what you take on. And although it may seem noble to always say yes to extra work, it’s not good if it affects either your quality of work, or your feeling about the job or company. I’d much rather an employee that says they currently have too much to get done and cannot taken on additional work, than an employee that takes on too much, doesn’t get it done or does it poorly and is unhappy because they feel overworked. Taking on extra work is valuable, but be honest with what you can really handle and be at your best.
Working evenings and weekends is something that many have experienced on the journey to success, and there are definitely times when doing it is needed and makes sense; but that doesn’t mean you have to do it all the time in order to be successful. By developing your skill in priority management and scheduling, and by implementing the keys above, you can start to take some of your precious evenings and weekends back!
Launch365 specializes in coaching and mentoring entrepreneurs through business startup and on core business skills. We provide training and coaching on priority management and scheduling, with a focus on improving both business results and lifestyle. If you would like to discuss how we could help you with your business or on these skills, contact us at: www.launch365.ca/contact-us. To download our startup guide “Startup Success Blueprint” for free go to: www.launch365.ca/startup-success .