1Hour Key Steps To Start A New Business Journey || Business & Entrepreneurship Podcast 2021.

1Hour Key Steps To Start A New Business Journey || Business & Entrepreneurship Podcast 2021.

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Hey, everyone. Welcome and thanks for tuning into our podcast. And this is Gema Channel. I'm Bob, your host for today. And on this episode, I'm going to help you get one hour key steps for starting a business...

through in-depth entrepreneur startup packs. If you're like many new passionate entrepreneurs, most probably you're excited and fired up about your business idea and eager to launch your company into the world. Moving right in the beginning can help you to avoid major headaches later on. Welcome to Gema Consult! Your friends in entrepreneurship! You'll get exclusive insider tips and tricks from entrepreneurs who have walked the path before you, whether you're just starting your journey or have already launched and are looking to grow. Join our community of inspiring game changers who are ready to make their Mark on the world.

Let's start with commitment, the need of commitment and overcoming challenges... involved in a business is puzzling. Starting a business is a huge commitment...

where entrepreneurs repeatedly fail to appreciate the significant amount of time, resources... and energy needed to start right and grow a business. We'll throw you spoilers or biggest challenges you're about to face when starting and growing a business.

Like it or not, you have to come up with a great and unique product or service. Have a strong plan and vision for the business. Have sufficient capital and cashflow. Find great employees.

Fire bad employees quickly in a way that doesn't resolve in legal liability, Working load and time more than you expect. Not getting discouraged by rejections from customers. Manage your time efficiently. Maintain a reasonable work-life balance. Know when to pivot your strategy. Maintain the stamina to keep going even when it's tough.

Do you think those are hard to do? Well, wait until I reveal all my notes here, since this is only the teaser. Start it right. Do you know what you're doing? I mean, did you come with a fresh unique idea? Or did you make a business out of an existing concept or idea? Which one are you and which one is the correct move to start? The answer is both are doable.

If you bring a unique idea to run a startup company, then you are an entrepreneur. A businessman is a person who starts a business on an old concept or idea. A businessman makes his place in the market with his efforts and dedication, while an entrepreneur creates the market for his own business.

The difference is subtle, but with knowing what you're doing, it will save you time... and of course, money, when you develop your product or service due to sets of plan changes. In case you're an entrepreneur, make sure someone hasn't already invented your great new idea. Great, new invention idea should be saved with proper moves, such as doing a Google search related to your invention.

At least check the patent and trademark. Make sure you're not breaching any. If nothing comes up and you want to get a patent for your idea, hire a patent lawyer. Keep refining the concept of the invention. As version 1 of your idea probably can be improved...

and enhanced through version 2 and version 3. Once you've made up your mind, you can move forward, come up with a great name for your business. Choosing the appropriate name for your startup can have a significant impact. It may seem like this is an insignificant thing to do, but the wrong name could trick you into overwhelming legal and business complications. So how can you make it right? Well, you can avoid hard-to-spell names...

or something that could be a limitation at the time your business grows. You could spend time to search on a proposed name and see whether it's being taken. You can purchase a website, domain name where possible. Have a thorough trademark search.

You can make sure everyone will be happy saying the name, including your employees. You can also get the best practice with testing the market towards the designated names, through the help from prospective employees, partners, investors, and potential customers. Do you feel tired that every name seems to have been taken? Prepare and come up with three or five names as alternatives... so you can save your time. When you're done with selecting your business name, then you can jump to the next stage.

Prepare your war zone and research your competition. Keep on top of new developments and announcements from your competitors… with thorough research of competitive products or services. Is it painful? Maybe yes.

If you forgot to use technology as your best friend. Make your life easier with setting up a Google alert… to notify any new information about these companies when it shows up online. Don't be too naive with expecting perspective partners or investors in your company… asking questions about your competitors. Any entrepreneurs dare to say “we don’t have competitors”… are those who have credibility problems. So anticipate these questions from them. Who are the company’s principal competitors? What traction have these competitors obtained? What gives your company the competitive advantage? Compared to these other companies, how do you compete with respect… to price, features, and performance? What are the barriers to entry in your market? Being able to answer those questions means it’s a time saver for your product R&D.

It’s no secret, everyone knows, a good R&D can help you to implement the company lean start. Is R&D a little bit of a lot? Well, here’s where you can pivot how R&D works. Focus in developing great product, but don’t take forever to launch.

We all know to avoid failure at launch, your product or service… must be at least good if not great. Offerings must be differentiated in some meaningful and important way to win a competition. Everything else follows from this key principle. Having a “beta” test product works for many startups to identify “bugs” and user reactions… and when it comes to improvements, early customer feedback… is one of the best ways to help develop your product. However, schedule a packed schedule for your R&D process… and set the date when the most suitable time is to launch your product.

As Sheryl Sandberg, the COO of Facebook has said, “Done is better than perfect.” So it’s a realistic move to prepare your development versus your launch schedule. But how to make your business come to life? Make it real. Make it real, make it happen. Without predictable rules and patterns to follow, doing business would be chaotic.

Assemble multiple aspects in a well-organized manner can be frantic, especially when it comes to establishing for how to act and operate. Deep inside, you also know without proper arrangements, your business has not been officially existing yet. To avoid further chaos, start it with the simplest yet most critical point, that business owner frequently slips on the basics. Protect your personal assets by making the business a corporation. Never start a business without a proper legal vehicle… which can result in your personal assets being at risk… for the debts and liabilities of the business.

None of company incorporation are particularly expensive or difficult to set up. as long as the willingness and budget is there. Many business owners, however, are under the mistaken impression… from planning the appropriate yet practical legal vehicle. Here’s the myths. Number one.

Skip the company incorporation equals time and money saver. This is not true. The process simplification of company incorporation… does not completely protect the business owners. Legal issue is much more expensive than having everything in place at the beginning.

Myth number two. They can run from tax with having the business under “personal trade”. This is not true either. Income tax is applied both to the corporation and personal trading activities. Myth number three. They are completely protected from personal liability by filing a nominee… to make their business under someone else’s name with a nominee binding agreement.

This is also not true. You can level up the risk of losing your investment… because you are legally handed over your assets to be someone else… if you choose this path. Now if you already know the cost versus benefit, the risk versus the return, let’s assume that you’re choosing to incorporate the limited liability company. If we’re talking that the business runs in Indonesia, the form of business is called PT for locals, and PT PMA for foreign investors.

PT owners than can lessen the likelihood of such personal or shareholder liability… with adhering to certain procedures. Use the corporate name on every document. When you are making contracts, issuing invoices, or having any document used by the corporation, use the name of the corporation in full name including “PT”.

This clearly indicates the existence of the corporation as a separate entity. that the liable party is the company instead of yourself, individually. Also avoid only putting your brand name… since this is unacceptable for government related purposes or in legal point of view. Use a proper signature.

When you sign on behalf of the corporation, put your name and your title in the company, and also state the name of the corporation. Follow all corporate formalities. This includes following bylaws, issuing stock properly, holding meetings of the Board of Directors, recording the meeting minutes, and following other corporate formalities. Having every documents in place can always save you from any unfavorable situations. You had the document formalities, then what? Make sure to keep funds separate. Corporate funds and the funds of individual shareholders… should not be in the same accounts or combined for any reason.

Many people who has never been accepting visits from governments for audit, or applying business loan to the bank, don’t make this a priority. But who likes to pay higher tax or to be rejected from a bank, having lower business value upon transaction from potential partners or investors, due to the absence of corporate track record? I think nobody. And also, make sure to keep taxation separate. The company taxes should be paid entirely from corporate accounts. We found that many third parties offer to arrange the payment from your account… and reimburse it to you later. We suggest to avoid this because normally it’s quite difficult… to obtain the official tax payment proof issued by the government.

Also, separate tax returns filed for the corporation only can be achieved… if all transactions made by the corporation are being clearly separated… from any individual transactions. Essentially, by never blurring the line between individual shareholders, owners or the Board of Directors, and the company, which stands as a separate entity, you run less risk of any personal liabilities for the debts of the business. Well guys, those were the basics of protecting your personal asset through top critical risks, and just to share, as a business grows, there are many cases where business owners realize… taking shortcuts become less and less important.

Especially… when it comes to sensitive talks between founders. So what to do next? Make the deal clear with co-founders. If you start your company with co-founders, you should agree early on… about the details of your business relationship. Not doing so can potentially cause significant legal problems down the road. A really good example of this is the infamous Zuckerberg/Winklevoss Facebook litigation.

In a way, think of the founder agreement as a form of the air quote “pre-nuptial agreement.” If you don’t know where to start in writing one, just for your brief insight, a written founder agreement needs to clearly arrange these key deal terms. First thing first. The money.

How is the equity to be split among the founders? Is the percentage of ownership subject to vesting based on continued participation in the business? What assets or cash does each founder contribute or invest into the business? Then it’s about the work. What are the roles and responsibilities of the founders? How much time commitment to the business is expected of each founder? What salaries, if any, are the founders entitled to? And how can that be changed? How are key decisions and day-to-day decisions of the business to be made? By majority vote, unanimous vote, or are certain decisions solely in the hands of the CEO? Also, don’t forget to arrange a goodbye scenario. Under what circumstances can a founder be removed as an employee of the business? Usually, this would be a Board decision.

If one founder leaves, does the company or the other founder have the right… to buy back that founder’s shares? And at what price? What happens if one founder isn’t living up to expectations under the founder agreement? And how will it be resolved? If one founder wants to leave the business, does the company have the right to buy back his or her shares? And at what price? And other business practice arrangement to prepare a business growth. Things like… how will a sale of the business be decided? How can new investors join the company? What is the overall goal and vision for the business? And so on. Now you know what you should write down under the agreement, it’s also good if you know that… founders agreements are commonly called as “Shareholders Agreements” at some business cases. Some says this process is quite time consuming especially when it comes to scenario discussion. But hey look at the benefit! Having founders agreement in place will safeguard and protect the interests of both the founder… and co-founder in case of any misunderstanding and dispute… and thereby develop a diplomatic understanding among partners of the same business. Agreement signing also will make it legally binding… and it will ensure an organized manner of work.

Well, having the path is clear for the founders during the journey. So let’s pick the most common regular example… when this agreement becomes very useful for everyone. It’s the time when the business generates a good amount of profits… and the founders want to enjoy the withdrawal. Do you know the most efficient process? Well, determine how to divide equity among the startup’s co-founders… from the very beginning when your business is started.

One right answer to the question of how equity should be divided… among a company’s co-founders is never been available. But everyone involved should discuss this issue and come to an agreement up front… to avoid misunderstandings later on. If you are the original founder and brains behind the idea, a good argument can be made for more than 50% ownership. To give you some idea, the split should take into account the following things.

The relative value of the contributions of the co-founders. Assigning dependent upon continued participation in the business. You don’t want to give away 25% of the company to someone who leaves after a few months. The amount of time to be committed to the business.

The cash compensation to be paid as an employee. Whether the co-founders will be contributing cash as an investment in the business. Whether one person wants to maintain control over decision-making. The fair payment schedule and safeguard reserve amount also significant to be determined, so no one is starting a rat race. When endless, self-defeating, or pointless pursuit have no place between founders, the company growth will be easily moving to a clear and concise direction. and let you focus on the real race.

How much your products or services will sell. Now we’re gonna be moving to selling your product. Selling skills are critical in organizations that rely on ongoing buying from customers or clients. The ability to build relationships with customers, to persuade them to make purchases and… generate repeat business is at the heart of selling. Sales is a component of a company's marketing and promotions. It’s not too much to say, you need to be a strong salesperson.

If the business is to become successful, you are going to have to learn… how to “sell” your business. Not only to customers but also to prospective investors… and even to potential employees. It’s important to be positive, trustworthy, and to learn how to listen.

You must practice your sales pitch, get feedback from a variety of people, and then refine your pitch. Even if you are not naturally an extrovert, you need to show confidence, follow up, and ask for the sale. Then level it up, market your business like crazy. Continually be attracting, building, and even educating your target market… is not a one-day job, so the sooner you start the better.

Make sure your marketing strategy includes key aspects of both traditional and marketing tools. What moves have never been over-rated since day one? Learning the fundamentals of SEO, search engine optimization, so that people searching for your products and services online… might find you near the top of search results. Use social media to promote your business. Think LinkedIn, Facebook, Twitter, Pinterest, etc. Engage in content marketing by writing guest articles for relevant websites.

Issue press releases for any significant events. And network continually, and make it grow. For most businesses, marketing and advertising are huge expenses. The central idea behind the lean startup… is that it’s better to find a “minimal viable product” and launch it using trial and error, avoiding costs where possible. Of course, you want a lean start-up to begin with… but even that product should be good and differentiated from the competition.

Think about success story of Kylie Jenner. She built Kylie Cosmetics and achieved the net-worth company value… making it a billion-dollar company from only 12 employees. She outsources work where possible instead of hiring employees. It’s quicker, cheaper, and more efficient. Instead of manufacturing and packaging its own products, Kylie Cosmetics passes the job on to a private-label company. Already, that’s a huge chunk of the work done.

Here’s the thing. She has 219 million Instagram followers at the time of this podcast, and she use it well. Instead of paying for ads or paying other influencers to promote her products, Kylie can simply post about her range on her own account. That’s exactly what she does, extremely frequently when launches are upcoming. Now if only 1% of her 200 million followers decides to make a purchase, that’s still 2 million people. So it’s not hard to see why Kylie Jenner Cosmetics is a billion-dollar company.

Although Kylie Cosmetics deserves credit for her phenomenal business success, it would be silly to pretend that she doesn’t have a huge advantage over the rest of us. Kylie just so happened to be born into one of the most famous families in the world, appearing on “Keeping Up With the Kardashians” for the first time when she was just ten years old. And, most importantly, she had an Instagram following of over 100 million… by the time she launched her company. That’s entrepreneurship on easy mode. Still, it doesn’t mean we can’t learn anything from her.

Operating a lean company with outsourced services… and a killer social media is clearly the way to go. But, back to reality. If you weigh your resources as a drop as the ocean to Kylie Jenner, how about start it small but prudent? Build a great website for your company.

Devote time and effort to building a great website for your business. Period. Prospective investors, customers, and partners are going to check out your site, and you want to impress them with a professional product. Before you dial your website developer or IT consultant, you can make a framework and plan first about how your website is going to be.

Of course this will save your time because your web developer… might not have a given-psychic power in reading your mind, how your brand standard should be implemented, and at what level your marketing budget is available. So spend a day in getting to know and be familiar with how digital marketing works... and make a good plan about it. You can have a benchmark. You can check out competitor sites and obtain and use a memorable “.com” domain name.

Come up with 5-6 sites you can share with your web site developer to convey what you like. Produce high-quality original content so your website will not be a blank canvas. Have a killer website in production.

Start by sketching out a template for your site. Make sure your site is optimized for mobile devices. Make sure the site loads quickly. Make the navigation bars prominent.

Keep it clean and simple. Visual clutter will drive visitors away. Make the site visually interesting. Make sure it’s easy for site visitors to contact you or buy your product. Be sure the site is search engine optimized, and thus more likely to show up early on Google search results.

And make sure you have a Terms of Use Agreement and a Privacy Policy. Once everything’s good to go, drive traffic to your website. There is many ways to Rome. And it’s no secret that you can… pay Google, Bing, Yahoo, or other search engines to send you traffic...

such as through the Google AdWords program. But build a great site with lots of high-quality, original content that is search engine optimized. Have a smart social media plan to drive traffic from Facebook, Twitter, LinkedIn, and other free social media sites. And get links to your site from other high-quality sites. Again, it’s not a one-day job to achieve this.

Rome wasn’t built in one day. But remember the previous quote, “Done is better than perfect.” And make sure to keep making a packed plan and budget, therefore you can implement marketing strategy under your radar.

This radar is actually needed to function, so… understand financial statements and budgets. It’s important to keep on top of your expenses... and you need to learn how to thoroughly understand financial statements and budgeting.

Many startups fail because the entrepreneur isn’t able to adjust their spending... to avoid running out of cash. Establishing a detailed, month-by-month budget is crucial, and this budget must be reviewed regularly. Understanding your financial statements will also help you answer questions from prospective investors. Here’s the top secret revealed for you, sets of financial statement questions... you can expect to get from investors.

What are the company’s three-year projections? What are the key assumptions underlying your projections? How much equity and debt has the company raised, and what is the capitalization structure? What future equity or debt financing will be necessary? How much of a stock option pool is being set aside for employees? When will the company get to profitability? How much “burn”, losses will occur until the company gets to profitability? What are your unit economics? What are the key factors that limit faster growth? What are the key metrics that the management team focuses on? Well it’s fair to say, being finance literate is at high demand. And for sure, it becomes a need. Having BS words like “I don’t understand accounting, finance, taxes." and, "Interpreting numbers is just not for me.” is so old school. Mature mentality with leading and making decisions based on numbers... is a quality that differs one business owner to another.

Anyway, if you’re start to put interest in finance literacy, drop a comment so we can know if we need to make a special episode based on that topic. But back to investors questions. We frequently find business owners fail to answer investor’s million-dollar questions...

and this becomes a common pitfall. The data itself is not even exist! Then the pitfall trend is becoming a plague. Start-up companies without a vision tend to put too much importance on maximizing profit... such as that they always want to do most of the jobs, their business entails. Also at many cases doing their accounting, finance, and tax reports...

by themselves, even though it's not their strong suit. In other cases, it's quite true that you can be multitalented, have the rare gift of multi-discipline expertise and multitasking capabilities. But the truth still remains that there is a limit to how far you can go on your solo run. At some point in your business growth, you will have to hire extra hands... to give you the opportunity to think bigger and also improve your productivity. We’re going to give you an example.

Brian is a very talented business executive with strong flair for computer appreciation. He established a small lounge and bar business... where he attends to an average of 30 customers in a day. His books and taxes are prepared solely by him after the closing time. As people started enjoying his services, they started telling other people of...

his excellent service and his customers doubled within few weeks to his amazement. Now unknown to him, he thought he could still perform as excellent... as when he was having only 30 persons to attend to. And not to imagine that Brian missed to file the tax reports...

he used to prepare by himself and later on, he got a “friendly” visit from the tax authorities. He could barely cope with the growth in his business... and he refused to hire more hands... to assist him in delivering more excellent services to his now enlarged customer numbers, Largely because he was still trying to minimize cost and increase his profit margin. It isn’t too surprising that he lost almost all his customers... within the space of another two weeks or thereabouts.

Now do you know why? It is simply because his once excellent service declined deplorably not intentionally... but because he could not cope with the size of his customers alone anymore. His once great service delivery that earned him 5 star reviews from almost all his customers... became so poor that the reviews started turning sour and customers trooped away just the same way to came. So you as the chief executive of the business should be able to think bigger and work on enlarging...

and expanding the business, networking with potential investors and partners. And of course, able to answer their million-dollar questions, while still retaining your client base. Speaking about client base, if you do your numbers right, you can... focus on offering exceptional customer experience. Companies such as Zappos and Virgin America became hugely successful...

because they focused on providing excellent customer service and support. Customer experience is your customer's holistic perception of their experience... with your business or brand, and it’s hugely important for any business. The better experience customers have, the more repeat customer and positive reviews you'll receive, while simultaneously reducing the friction of customer complaints and returns. So having this in place is quickly moving to the forefront of considerations... that are required for exceptional marketing.

It directly impacts the perception of your brand in the eyes of... your prospective, current, and past customers. All business models can benefit from improving the customer experience. Subscription businesses can increase retention and reduce business shaky and bumpy roads ahead, ecommerce marketplaces can increase repeat custom and reduce returns, and service industries can gain recommendations and reduce complaints. You want your early customers to give referrals and sing your praises to their friends and colleagues. Thank your customers personally by email.

Go the extra mile to show your appreciation! Let’s say you already have a good client base. Customer loyalty, word-of-mouth marketing has already been moving with auto-pilot, tons of positive reviews and recommendations. But did you miss something? Were you aware that someone can steal your business? Consider the steps you should take to protect your intellectual property. It is important to protect your company’s intellectual property.

Minimizing burn rate, startups may be tempted to defer investment in intellectual property protection. Some simple and cost-effective techniques can minimize the anxiety, yet help protect core assets. Protecting intellectual property feels complex and expensive for those who have not tried to do so. Too often, startups end up forfeiting intellectual property rights by neglecting...

to protect their ideas and inventions. Companies sometimes think that patent protection is the only way to protect themselves. Technology startups frequently ignore the value of non-patent intellectual property. While patents can be incredibly valuable, it does not necessarily ensure that a company’s product... is a good product or that it will sell well.

Trade secrets, cybersecurity policies, trademarks, and copyrights can all be forms of... intellectual property that can be protected. Types of intellectual property protections available, they vary. So to ease you, I'm going to summarize a bit for you here. Patents.

So patents are the best protection you can get for a new product. A patent gives its inventor the right to prevent others from making, using, or selling the patented subject matter described in the patent’s claims. So the key issues in determining whether you can get a patent are... only the concrete embodiment of an idea, formula, or product is patentable. The invention must be new or novel. The invention must not have been patented or described in a printed publication previously and...

the invention must have some useful purpose. Now, this process can take several years and be complicated... and you typically need a patent lawyer to draw up the patent application for you. The downside of patents is that they can be expensive to obtain and take several years. Copyrights. Copyrights cover original works of authorship, such as art, advertising copy, books, articles, music, movies, software, etc.

A copyright gives the owner the exclusive right to make copies of the work... and to prepare derivative works, such as sequels or revisions based on the work. Trademarks. A trademark right protects the symbolic value of a word, name, symbol, or device... that the trademark owner uses to identify or distinguish its goods from those of others. Some well-known trademarks include the Coca-Cola trademark, American Express trademark, and IBM trademark.

You obtain rights to a trademark by actually using the mark in commerce. Then you register a mark with the Ministry of Law and Human Rights in Indonesia. Service marks. Service marks resemble trademarks and are used to identify services. Trade secrets.

Trade secrets can be a great asset for startups. They are cost effective and last for as long as the trade secret maintains its confidential status... and derives value through its secrecy. Now trade secret right allows the owner of the right to take action against anyone... who breaches an agreement or confidential relationship, or who steals or uses other improper means to obtain secret information. Trade secrets can range from computer programs...

all the way through to customer lists to the formula for Coca-Cola. Confidentiality agreements. These can sometimes also be referred to as Non-Disclosure Agreements or NDAs. The purpose of the agreement is to allow the holder of confidential information, such as a product or business idea to share it with a third party.

But then the third party is obligated to keep the information confidential... and not use it whatsoever, unless allowed by the owner of the information. There are usually standard exceptions to the confidentiality obligations... such as if the information is already in the public domain. Confidentiality agreement for employees and consultants.

Every employee and consultant should be required... to sign such an agreement, as discussed above. Terms of service and privacy policy.

If you are a company that conducts its business on the internet, it is important to have a terms of service agreement... that limits what users can or cannot do on your website... and with the information on your site. Closely related is your privacy policy, which sets forth what privacy protections are available to your clients. Being legally protected is every entrepreneur’s dream.

Every step you take is nothing but a prudent move. So how about we continue to talk about growth? Plan an efficient funding. On a certain phase, you want your business to grow with large scale of expansion. And in most of the cases, business expansion requires capital considerably high bar. Surely, it is very tempting for companies... to find and get a large number of capital injections from investors.

Let’s take a look on the news. At the end of February 2020, Tech in Asia reported that JD.id, a subsidiary of a company based in the People’s Republic of China JD.Com... which conducts e-commerce activities in Indonesia has reached a valuation of over US$ 1 billion. Therefore, JD.id becomes the 6th Startup company with Unicorn status in Indonesia, besides Gojek, Tokopedia, Traveloka, Bukalapak, and Ovo.

Capital injections for business activities in Indonesia, especially if your business takes the form of a company Limited Liability Company or “Perseroan Terbatas”... PT in Indonesia, can come from local investors from Indonesia itself or foreign investors. Although in 2019 the investment capital injections into startups in Indonesia fell by 40%... from US$ 4 billion to US$ 2.4 billion, Indonesia remained the Southeast Asian country that received the most investor’s capital injections, with a share of 59% compared to other ASEAN countries.

Not only Startup that holds Unicorn status that constantly looks for funding to run and... expand its operational activities in Indonesia, but also other startups and not to mention... micro, small, and medium enterprises which means to continuously develop commercially.

So this success story could be yours as well. Dare to move? But, where to go for capital financing? One of the biggest mistakes made by startups is not raising sufficient capital... and knocking on the right door. So I will start it with the most reachable business capital sources, and trust me, these are effective.

You can try to reach… personal funds or even credit cards, bank loans, financings, online lenders, equipment loan financing, or angel investors. There are a variety of ways to find angel investors, including AngelList, venture capitalists, investment bankers, lawyers, accountants, other entrepreneurs, or even friends, families and crowdfunding sites like Kickstarter and Indiegogo. The best way to find an angel investor...

is through a warm introduction from a colleague or friend of an angel. Using LinkedIn to ascertain mutual connections can also be helpful. Secure capital to finance your business and make sure you know... the most appropriate funders that match with your capital needs. Consider the most interesting source, Venture Capital firms. Now, these are a group of investors...

who gain income from wealthy people who want to grow their wealth. They take this money and use it... to invest in riskier businesses than a traditional bank is willing to take on.

Venture capital firms work under a specific investment profile. Now if this option is grabbing your attention, make sure you... understand these key points about seeking venture capital financing. Startups seeking financing often turn to venture capital (VC) firms, which can provide capital, strategic assistance, introductions to potential customers, partners, and employees, and much more.

Venture capital financings are not easy to obtain or close. Entrepreneurs will be better prepared to obtain VC financing if they understand the process, the anticipated deal terms, and the potential issues that will arise. To understand the process of obtaining VC financing, it is important to know...

that venture capitalists typically focus their investment efforts... using one or more of the following criteria. Specific industry sectors, software, digital media, semiconductor, mobile, biotech, mobile devices, etc. Stage of company. Early stage seed or series A rounds, or later stage rounds with companies...

that have achieved meaningful revenues and traction. Company location, because for sure this might be their significant consideration... in having the future operations and resource for management meetings, audits, and so on. Before approaching a venture capitalist, try to learn whether his or her focus aligns with your company... and its stage of development. The second key point to understand is that VCs get inundated with investment opportunities, many through unsolicited emails, almost all of those unsolicited emails are ignored.

The best way to get the attention of a VC is to have a warm introduction... through a trusted colleague, entrepreneur, or lawyer friendly to the VC. Startups should also understand that the venture process can be very time consuming... just getting a meeting with a principal of a VC firm can take weeks, followed up with more meetings and conversations, followed by a presentation to all of the partners of the venture capital fund, followed by the issuance and negotiation of a term sheet, with continued due diligence, and finally the drafting and negotiation by lawyers… on both sides of numerous legal documents to evidence the investment. VCs usually want to see that your business has made some progress... and gotten some traction in the market, they will typically not fund a very early stage company or just an idea.

For that, you are better off seeking angel investors. Most venture capitalists won’t agree to sign an NDA, so don’t bother asking. So looking back to the fact that VCs are not for those... who wants to have capital in easy mode, organize a killer attention-grabbing ammo is highly advised. Start with having a great investor pitch deck.

Startups frequently prepare a “pitch deck”… to present their company to prospective angel or venture capital investors. The pitch deck typically consists of 15-20 slides in a PowerPoint presentation… and is intended to showcase the company’s products, technology, and team to the investors. Raising capital from investors is difficult and time consuming.

Therefore, it’s crucial that a startup... absolutely nails its investor pitch deck… and articulates a compelling and interesting story. Too many startups make a number of avoidable mistakes... when creating their investor pitch decks. So here is a list of general do’s and don’ts to keep in mind.

Pitch deck do’s. Create a compelling brand story. Do tell a compelling, memorable, and interesting story that shows your passion for the business. Do convince the viewer of why the market opportunity is large. Do plan to have a demo of your product as part of the in-person presentation. Do show that you have more than just an idea, and that you have gotten early traction on developing the product, getting customers, or signing up partners.

Do have a soundbite for investors to remember you by. Create an eye-pleasing deck. Include visually interesting graphics and images. Use a consistent font size, color, and header title style throughout the slides. Send the pitch deck in a PDF format to prospective investors in advance of a meeting.

Don’t force the investor to get it from Google Docs, Dropbox, or some other online service, as you’re just putting up a barrier to the investor actually reading it. And make it secure, include this wording at the bottom left of the pitch deck cover page. Confidential and proprietary.

Copyright name of company and near all rights reserved. Now keep in mind the don’ts as well. This might save you from series of failure.

Pitch deck don’ts, Based on psychology 101, don’t make the deck more than 15 - 20 slides long. Investors have limited attention spans. So if you feel you need to add more information, include it as an appendix. Don’t have too many wordy slides.

And don’t provide excessive financial details, as that always can be provided in a follow up message. And based on VCs talks, arrogance kills you. So don’t use a lot of jargon or acronyms that the investor may not immediately understand. Don’t underestimate or belittle the competition, and never say we don’t have any competition. And you don't have to cover everything in the pitch deck slides. An in person presentation will give you an opportunity to add and highlight key information.

And hey, design matters! So don’t have your pitch deck look out of date. You don’t want a date on the cover page that is several months old. that is why I avoid putting a date on the cover page at all. And you don’t want information or metrics in the deck about your business… that look stale or outdated. And don’t have a poor layout, bad graphics, or a low-quality “look and feel.”

So think about hiring a graphic designer to give your pitch desk a more professional look. And follow this carefully. Don’t go overboard on a business plan. It’s useful to come up with a business plan to think through what you want to do for the development of the product or service, marketing, financial projections, and more. And you should then get input from trusted business and finance advisors.

But don’t go overboard with a 50 page business plan. In reality, many startups have to deviate from their plan as the business develops. Before you plunged into a shark tank, perfect your elevator pitch. You've just bumped into a former client at the airport. And after exchanging pleasantries, he asks you what your new company does.

You open your mouth, and then pause. Where on earth do you start? Then, as you try to organize your thoughts, his flight is called, and he's on his way. If you'd been better prepared, you're sure that he'd have stayed long enough to schedule a meeting.

This is one situation where it helps to have an elevator pitch. So an elevator pitch is intended to be a concise, compelling introduction to your business. You should be able to slightly modify your elevator pitch… depending on whether you are pitching to prospective investors, customers, employees, or partners. So here are a few tips for developing and delivering a great elevator pitch. Start out strong and be positive and enthusiastic in your delivery.

Convey why your business is unique and pitch the problem you are solving. Keep it to 60 seconds in length and avoid using industry jargon. Invite participation or interruption by the listener, this shows they are interested and engaged. And remember that practice makes perfect. Assuming you’re having a good pitch, what if you don’t have the confidence over the main course the deck material? Use consultants and freelancers to supplement your team. Say no more.

A right supplement to your team might help you in representing brands, speaking, and providing experiences based on the scope they are being experts. Consider this if you think this move helps you to slay the opportunities in having a capital injection. Also, at the early stages of your startup, you will likely want to have a small employee team to minimize expenses. A good way to fill in for specialized expertise is to use freelancers or consultants. That way, you avoid taking on employee costs and benefits payments on managerial level. And there are a variety of sites that can help you access freelancers, such as Freelancer.com,

Guru.com, and Upwork.com, or simply find local consultant nearby with a good reputation. Use their resource well, and get to know more about the pitching and negotiation process for securing your capital source. Generally speaking, they have been preparing the investment decks, doing pitching, due diligence, negotiation more than you ever did. However, some good news! We’re spilling the tea one-two things about how angel investors process information from you. If you are seeking angel investing financing, know these important points.

Angel investors will want to initially see QC passed management from a startup. A clearly articulated elevator pitch for the business. An executive summary or investor pitch deck, a prototype or working model of the company’s product or service, early adopters, customers, or partners. Then if you already catch their attention, angel investors then care more about specific fruitful information from you. In reviewing a prospective investment, they assess… the quality, passion, commitment, and experience of the founders. The market opportunity being addressed...

and the potential for the company to grow to become very big. A clearly thought out business plan and early evidence of early business traction. Interesting intellectual property or technology.

A reasonable valuation for the company. The likelihood of the company being able to raise additional financing in the future if progress is made. I believe you can digest what is the main connectivity elements. They assess thoroughly since they are investing a paradox, a secured breakthrough.

And ever since they see working model of the company’s product or service, having a strong operation in place is mandatory before you go to them. Make sure your business run smoothly and procedures are well delegated to your team. Angel investors do assess how strong you operate meanwhile in the other room of your office, you also processing massive employee turnovers.

If you experienced that, don’t worry. With the increasing number of millennials entering the workforce, prepare yourself for job-hopping. On average, millennials are staying 2 years at a company before leaving. During next year, 36% of employers expect this kind of job-hopping. Employees are more likely to stay if they’re surrounded by like-minded people. Invest time to create an amazing company culture to improve the situation.

It’s not too naïve for business owners to expect job-hopping from their team members. So there are two paths to follow. One is to hold on to the old, which might lead to stagnation. The other path is to adjust and make changes. The new world of work is not in the future, it's already here… and it's shaping the workforce in various angles. Performance management trends cannot guarantee a road to success, but whenever tackling with difficult choices, a fresh change in perspective will help you move forward.

Well before we’re going too far along today, I’m going to give you the people management fundamentals. Hiring 101. Another paradox of new entrepreneurs comes when we talk about establishing the team. Now the founders need sufficient time to grow the business and at the other hand, pile of works is waiting in the corner of the room. The urge to hire great employees become in stake. But when it comes to signing the employee working agreement, the thought of saving some money for hiring a proper headcount exists.

At this point some entrepreneurs pull off the string and cancel the hiring, or some prefers not having the process at all from the beginning. Let me tell you something. When you allow your staff to take up responsibilities… especially when you are available to do the same job, they tend to build their confidence… and they're prepared to hold forth comfortably during the days you will inevitably not be present. Isn’t it what entrepreneurship about? But well, this is a common situation in a new organization.

Some that we found, this situation is not hard to be found in 5+ years running companies. At the other case, employee turnovers inevitably are due to... bad hires or inaccurate headcounts. So, make a breakthrough in managing the new hires! We’ll start to show you the secrets, this is hiring 101.

Perform a comprehensive reference check before you hire an employee. Many employers conduct a limited… and incomplete reference check when interviewing job candidates, which can result in hiring people who are unable to perform their required duties… or who don’t work well with others. A comprehensive reference check includes, strong verifications. So verify their job titles and dates of employment, their educational degrees and dates of attendance at schools, their starting and ending salary. And their prior job role and responsibilities, make sure candidates complete your company’s inquiries.

So ask questions like… why the applicant left the prior employer? What's the applicant’s ability to get along well with other employees and customers? What's the applicant’s ability to take on the new role? And whether punctuality or absenteeism issues exist. And call the right guy. Have conversations with prior supervisors... as to the applicant’s strengths and weaknesses is a must.

Reference checks with other people not listed by the applicant as a reference. Use your network. Usually you’re about to get varies of surprises when you do this. The purpose of these checks is to make sure that the applicant will fit into the company’s culture, and to ensure that they have been truthful and accurate in their resume and employment application. However, the process is carefully regulated by the Ministry of Manpower, and the laws of many states, failure to follow the highly technical process can lead to class action lawsuits. So do consider consulting legal counsel.

It’s also useful to require all prospective employees to complete an employment application. In the case you already select the best candidate, you can move to the next stage, and you better make sure it’s right and professional. A fun fact for you, a professional and a good candidate...

usually can distinguish whether your company is worth to grow with together, or is there something strange behind the chiefs’ offices. They can sense this from the very beginning… whether it’s in recruitment process or offering process. So… use a good form of employee offer letter or employment agreement. Oral agreements often lead to misunderstandings. So if you plan to hire a prospective employee, use a carefully drafted offer letter, which the employee should be encouraged to review carefully before signing. For senior executives, a more detailed employment agreement often makes sense.

A good offer letter or employment agreement have strong arrangements and covers things like the essentials, the job title and role of the employee. Whether the job is full time or part time, when the job will commence, the salary, benefits, and any potential bonuses. The supervisor to whom the employee will report, and whether the position is at will employment… meaning either party is free to terminate the relationship at any time without penalty, Although employers may not terminate employees for legally prohibited reasons, such as for age discrimination or retaliation from sexual harassment allegations, etc.

It also covers mandatory statements, so make sure at least you’re having… confirmation that the at will agreement may not be changed… unless it's signed by an authorized officer of the company. And make sure it has protective language, stating that the offer letter constitutes the entire agreement, and understanding of the parties with respect to the employment relationship, and that there are no other agreements or benefits expected, unless additional provisions are laid out in a handbook, which should be referenced if applicable. And make sure also covers further legal arrangements… such as any stock options to be granted to the employee and the terms of any vesting. Companies should ensure that the employee and the company sign the letter, the confidentiality and invention assignment agreement, and he stock option agreement and any first day paperwork.

If the company chooses, a statement that any disputes between the parties will be resolved solely… and exclusively by confidential binding arbitration. Confirmation that the employee will need to sign a separate confidentiality and invention assignment agreement. If you’re getting a bit lost, don’t be.

I will tell you more about confidentiality and invention assignment agreement. So what is it actually? Well, companies pay employees to come up with ideas, work a product, or create inventions that may be useful to the business. Employees have access to a good deal of their company’s confidential information, which can be very valuable, especially in technology companies. Now one basic way to protect proprietary company information… is through the use of a confidentiality and invention assignment agreement. This type of agreement deals with confidentiality issues, but can also ensure that the ideas, the work product, and inventions the employee creates that are related to company business...

belong to the company, not the employee. A good employee confidentiality and invention assignment agreement... will cover things like intellectual property ownership.

The company is the owner of such inventions, ideas, discoveries, and work product, which the employee must assign to the company. It cover the most important restrictions, such as while employed... The employee will not compete with the company... or perform any services for any competitor of the company.

That the employee’s employment with the company does not and will not breach any agreement or duty… that the employee has with anyone else, nor may the employee disclose to the company or use on its behalf… any confidential information belonging to other people. The employee may not use or disclose any of the company’s confidential information… for their own benefit or use, or for the benefit of others, without authorization. The employee must promptly disclose to the company any inventions, ideas, discoveries, and work product related to the company’s business that they make… during the period of employment.

And in case of resignations. Upon termination of employment, the employee must return any and all confidential information and company property. The employee’s confidentiality and invention assignment obligations under the agreement… will continue after termination of employment. Also don't forget disclaimers, the agreement does not by itself represent any guarantee of continued employment. Venture capitalists and other investors in startups… expect to see that all employees of the company have signed these kinds of agreements.

In an M&A transaction in which the company is sold, the buyer’s due diligence team will also be looking for these agreements... signed by all employees. Similarly, it will be appropriate that all consultants of the company… also sign a confidentiality and invention assignment agreement. And make sure all employees sign these.

Well, your employee hiring’s all set, if you’re doing it right even before the employee candidate started to work, you have one less problem without anxiety. When you’re doing the signing, do it confidently, and when you tell your new employee to start on next Monday, don’t forget to brief them which cubicle they will be assigned to. Anyway, speaking of the office space for the employee to work in… that’s a whole interesting one to discuss about. Your business space. Welcome to the reality of realty.

Landlord, papers, repairs, charges, and rental taxes. Fees can be the the worst nightmare for entrepreneurs... if they are dealing with wrong guy as the landlord. If you plan to lease office space for your business, focus on these key issues. Leasing office space is one of the largest expenses a startup can incur.

Negotiating the best lease possible can save your company enough cash… to hire a few more employees or launch a new marketing campaign. Keep in mind that your ability to negotiate an office lease is dependent on how much leverage you have. Do your homework. Are other companies vying for the same space? Has the space been vacant for a long time? Factors such as these may mean the difference between you calling the shots, or a landlord insisting on onerous terms throughout the lease process. Because no lease is standard, here are some suggestions to help you become… a little more lease savvy and negotiate a favorable office lease for your startup.

Length of lease term. Landlords are typically willing to make concessions for longer term leases. However, your company’s needs may change… and you could find yourself locked into a lease for an office space that is too small, too big, or with rent that is above market, if demand for space subsequently declines.

So try to negotiate a shorter term lease with renewal options, a two year lease with a two year renewal option, for instance, rather than a four year lease. Tenant improvements. Your new space may need some improvements or alterations, a new paint job, new carpeting, a reconfiguration of the space. Which party will pay for these improvements depends... on how tight the commercial office space market is in your city. Most form leases specify that the tenant...

can’t make any alterations or improvements without the landlord’s consent. Ask for a clause that says you can make alterations or improvements with the landlord’s consent, and that the consent won’t be unreasonably withheld, delayed, or conditioned. Often you are able to negotiate a tenant improvement allowance, which is an agreed upon sum of money that the landlord will provide for the improvements… and alterations you would like to make. Rent and rent escalations. Some landlords will give free rent for the first month or two of a lease. Fixed rent over longer term leases is relatively rare.

Sometimes landlords insist on annual increases based on the percentage increases in the Consumer Price Index [CPI]. Now if your landlord insists on rent escalations, try to arrange for a CPI rent increase that does not kick in for at least the first two years of the term. Then, try to get a cap on the amount of each year’s increase. If you have to live with a rent escalation clause, try to negotiate a predetermined fixed increase, for example, a rent of $5,000 a month the first year... that would only increase to $5,200 a month the second year… and $5,400 a month the third year.

Repairs, improvements, and replacements. Be very aware of a clause that says that at the end of the lease... you must restore the premises to it’s original condition.

You should try and negotiate a clause that states the following: “The premises will be The premises will be returned to the Landlord at the end of the tenancy… in the same condition as at the beginning of the tenancy, excluding… ordinary wear and tear, damage by fire and unavoidable casualty not the fault of the Tenant, and alterations previously approved by the Landlord. Assignment and subletting. Startup companies should negotiate enough flexibility in the assignment… and subletting clause to allow for mergers, reorganizations, and share ownership changes. Watch out for a clause that says a change in more than 50% of the company’s stock ownership… will be deemed an assignment that is prohibited without the landlord’s prior approval.

As your company grows and new people invest in it, this clause can be inadvertently triggered. Long story short, try to avoid one sided lease provisions. Landlords use form lease agreements that can be very one sided. Be on the lookout and negotiate on these types of provisions that are heavily landlord-favorable.

Common cases that the landlord tries to war even worse, insist on include… lease the premises as is... or tries to disclaim responsibility for compliance with environmental laws… e.g. waste management issues. Require the tenant pay any tax increases resulting from a sale of the property. Reserve the right to terminate the lease at the landlord’s convenience.

Prohibit the possibility of subletting or assignment, and personal guarantee of the key shareholders of the company. Now if all this sounds really horrible to you, you can always consider using a tenant broker. A good tenant broker can be invaluable and will represent your company’s best interests.

He or she will educate you on the current market, locate spaces that meet your stated parameters, arrange tours and accompany you to view these available spaces, and then they'll help to prepare offer letters and negotiate with landlords for all spaces… that work best for your company. In the companies where finance is found in healthy condition, rent usually have 3-5% of your revenue with repair and maintenance around 2-4%. If do the math and you can easily get that this might costs you 5-9%.

At many cases, unplanned business space lease… can cost you up to 20-30%. If you don’t want your facilities eating away your revenue… in a huge portion, you’d better have it all well planned. Stop saying I don’t understand numbers. Noting that you’re investing your money in your business, finance driven decision has been started to be the best option to act. But we also understand finance for non finance person might not be an overnight thing to get familiar with. But… has your knowledge of your company's numbers helped or hurt your career? Do you know the difference between an income statement and a balance sheet? Or understand why a business that's profitable can still be smashed and ruined? Can you digest or use a breakeven analysis? Okay, how about understand the essential first? You can start with most steps that 99% entrepreneurs tell us… that only if they could turn back time and redo what they messed up.

Set up appropriate books and records for your business. You will need to keep multiple books and records for your business, including financial statements, P&L, balance sheet, cash flow, employee records, board and stockholder minutes and consents, stock and options ledger, tax filings and records, federal, state & local income, sales and property taxes, secretary of state filings, certificate of incorporation, annual filings, etc, invoices & contracts, bank accounts, creditor records. We’ll put aside why do you have to do this if the answer is compliance, blah blah blah, it’s boring.

We’re talking about taking your business to the next level! Let the science talk for themselves. Ever heard data driven decision making? Worldwide it’s called as DDDM. This is the process of making organizational decisions based on actual data… rather than intuition or observation, uhm, intuition, alone. Then what does it mean to be data-driven? This term describes a decision making process which involves collecting data, extracting patterns and facts from that data, and utilizing those facts to make readings that influence decision making. Every industry today aims to be data driven. No company, group, or organization says, let’s not use the data, our intuition alone will lead to solid decisions.

Most professionals understand that without data bias and false assumptions, among other issues, can cloud judgment... and lead to poor decision making. And yet, in a recent survey from Northeastern University in Boston, 58 percent of respondents said… that their companies base at least half of their regular business decisions... on gut feel or intuition instead of data. How then, can you ensure you’re making data driven decisions… that are void of bias and focused on clear questions that empower your organization? Number one. Know your mission.

A well rounded data analyst knows the business well... and possess sharp organizational insight. Ask yourself what the problems are in your given industry and competitive market. Establishing this foundational knowledge will furnish you to make better readings with your data later on.

Establishing this foundational knowledge... will furnish you to make better readings with your data later on. Number two. Identify data sources.

Put together the sources from which you’ll be extracting your data. Coordinating your various sources seems simple, but finding common variables among each dataset… can present a tremendously difficult problem. Surprisingly, 80 percent of a

2021-05-05 18:29

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