P. Simon Mahler is a small business influencer and SCORE mentor. For 15 years, he has been a consultant for or founded several of his own start-up companies that have amassed more than $30 million in annual revenues.
How do I create a business plan and then get the money to finance it?
As for financing, if your credit history is challenged, look at alternative sources like LendingClub.com, Kickstarter.com, Kabbage.com, and Crowdfunder.com. Consider these platforms to start looking at and doing some research.
How should one find the funds to start a business? Should ideas be clear from the start or can someone go with the flow for some of the decisions?
You must be very clear and concise with your vision and have it all down on paper. Would you buy a car without ever seeing it? Your idea needs to be very clear.
To find the funds to start a business, my obvious choice is to see who is around you that would be interested in going in with you. My second mission would be the SBA to see if there were any grants available. The third method is probably where I would be most successful and have the most fun, but it can be a daunting task and that is to put together a Kickstarter campaign to see if people will donate funds to your venture. The issue with this route is that you have to be different. You need to be creative. You only get one shot for these people and you either share it in a special manner or you lose out on the opportunity. I like this approach because it brings some sort of validation as well to the idea or business being launched.
How soon before opening a business should you launch a Kickstarter or other fundraising campaign? Do lenders want to see guaranteed personal funds to be used for the business?
Is your business ready to go? Do you have your product ready for launch? Most Kickstarter campaigns are measured in terms of success by what levels investors contribute to what they get in return.
For example, what do they get if they donate $500 to the cause? Is your small business ready to distribute goods and services right now? If not, I would tighten up those areas first and foremost before making the one shot impression on any Kickstarter campaign.
To answer your question regarding lenders, 9 out of 10 times lenders will want to see guaranteed funds that you are contributing to a start-up business idea. The promise of funds is never a good reality to live off of when starting a business. Lenders and investors will not go off promised funds.
At what point does one need to get an accountant or CPA, and is a tax attorney better?
I always immediately find my CPA team when starting a business. When I take the time to find the right people from the beginning, I tend to get better performance from my team. I really enjoy working with a CPA firm or having a tax attorney. I have not used an independent tax accountant that is not a CPA or some large box store business to manage that side of my business. You want good guidance and protection if the need ever arises.
At what point should you draw a salary (beyond necessities & household expenses)?
It depends on the startup business. Most investors and bankers acknowledge the fact that you need money to live on however being excessive is what usually kills the deals and ultimately the business. Numerous reports have been published on this subject matter.
My experience has taught me that unless the business can support a salary, then don’t give yourself a check. Too many people get caught up on this idea.
What I have always done is create a deferment salary, meaning from day one, I know my wage is $5,000/month, but I will not take a paycheck until our gross revenues can justify a check being cut. By the third or fourth quarter, you can start recouping some of those deferred payments back to you if the business is booming. If you want to create a paycheck to keep you motivated, then make sure the amount of the paycheck is in balance with the growth of the company. There is no real exact science to this. Just don’t kill the business because of your salary, which, unfortunately, happens all too often.
How should one prioritize limited funds?
I would look at the importance of branding in your community and go that route. I would create a technology following that sees the value in the information you provide and send out press releases constantly to grow your business.
You need to be public in the community and provide tools for non-profits to succeed as well -- contribute in as many ways as possible. Public awareness is key for anyone starting a business on limited funds. PR! PR! PR! It is so critical and since some of it can be done for free, there is no reason not to make it happen.
What grant writing resources for non-profits would you recommend?
There are a few resources that are great, but beware, grant writers themselves can come at a tremendous cost.
What I suggest doing is checking with a local college to see if you could grab a graduate student to assist in your endeavor. I have heard good things going this route. Another suggestion might be to look at Purdue, Wisconsin, and UC Davis as they have some published material available online to help a non-profit get going with some grant writing resources.
As an entrepreneur, where does one start researching market trends and saturation levels in the field of public relations?
Start looking at various online news sources. I get a lot of knowledge from INC., Forbes, Entrepreneur, Fast Company, The Wall Street Journal, and various blogs. The blogs I pay attention to have direct influence in the industry
Next, find a few top-rated professionals in your industry and start to ask them questions. I do this utilizing my LinkedIn and finding quality business leaders who might have some insight on industry trends. Lastly, I look at the county, state, regional, and national numbers on how my industry and sector is performing year to year. SBA has some great resources and so does your local SCORE office.
Does one need to register their company name? How does a small business owner protect their original artistic products?
You should always consider registering your business name, however, the minute you do the clock starts ticking with various government agencies that will confuse you. Register if you intend to launch your business this year. If you are more like a hobbyist, then take your time and really get customer validation before starting the process.
How would you suggest determining whether or not an innovative idea is patentable, without having the idea stolen or spending hundreds for an attorney?
You want to make sure you have a great attorney doing the legwork for you on this if you go this route. I suggest you seek the advice of an intellectual property expert and have a patent attorney do the research. Remember, an idea can always be stolen, but the passion of the person who created it can never be unsold. People are always out there trying to make a quick buck, don’t let that deter you from trying and doing all you can to bring life into your product.
Let's say someone specializes in a very niche service, such as pet sitting or dog walking. How could they grow their business and attract new customers?
This is a great question for a SCORE mentor. I would first ask what you are doing to separate yourself from your competition. What are you doing that is different? You need to be marketing yourself in a special way that has people on notice.
Create a website if you don’t already have one and begin to share blog stories on pet care, pet exercise, etc. that give you the edge in gaining popularity and ultimately more business.
How does one select a Board of Directors while maintaining a well-balanced team?
When finding the right mix for your Board of Directors, you must seek out those you want. You need young and old, men and women to be on your board. To find the right board members, I would contact a local Chamber or Economic Development office to see if they have board member lists. Most of them do and could help you with finding the right people. I would start there before moving on to hand selecting the right people, sending them an invitation, and setting up a meeting with hopes of gaining their acceptance and grow from there. Be selective yet well balanced on all cylinders.
How does a no name, no established reputation, new business start making a name for itself in a high-risk industry like import/export?
You have to brand yourself as an expert on multiple levels. Your most important asset is ‘trust’ and to gain that trust, people need to see that validation through a variety of means, like online blogs, media, and print. You need to make yourself look like a knowledgeable source that people can depend on often.
Just remember, stay consistent with it. Doing it once is as good as dead. This needs to be a weekly or daily activity that becomes a part of your business. Additionally, I would look at connecting with outstanding leaders in your industry that are achieving the same results that you desire. See if they would be willing to have a ten-minute phone conversation and point you in a direction that would be useful to you. LinkedIn is a great resource for that idea that I highly recommended.
How important is a business coach when dealing with the non-profit sector, if you are novice?
If you don’t know much about the non-profit sector, then I would always suggest utilizing the free resources at your disposal, like a great organization called SCORE. Thousands of volunteers can mentor you in the right direction and help you become more knowledgeable and successful in your desired venture.
I think a coach/mentor is critical on all levels to the success of any business. If you can get the resources from a knowledgeable leader in business then you are headed in the right direction. Reach out to SCORE through www.score.org to find the right mentor for you.
Having a coach is a great thing. Accountability and idea sharing can be the lifeblood of your business that keeps it going forward.
How should one go about finding mentors in high-power positions for specific industries?
Long story short, utilizing your LinkedIn account allows you to connect with dynamic leaders in your industry that have either been where you want to go or understand the industry you are trying to make a splash in. Using the search tool LinkedIn provides, comb through those in your industry and find the right people who you feel could add value to your success as a business leader. When you find those people, send them an “InMail” explaining your situation and what you hope to gain from them. People will respond. Pretty soon you will have a team of people who are all very successful, helping you grow your business and providing valuable knowledge along the way.
How does one develop a prospect funnel from LinkedIn groups?
LinkedIn is a critical tool to use when growing any business. The best approach is to get to know your group members. Respond to their stories they share with creative follow-up information that is value-added content. Once they respond with a few “likes” of your responses, then engage with them and talk about your products and services on a more personal level.
To narrow your funnel of prospects down however, I would also suggest responding to the group postings and thoughts shared that are meaningful to you personally and also very meaningful to your purpose and vision you have set for your company.
What is the best way to find a potential business partner? What is the biggest mistake you see entrepreneurs make when getting started?
To find a business partner, I would start talking to people and networking. I would attend social gatherings that were industry related and start talking to people to nurture and foster growth. When people start seeing you around more often, then the right partner might come forward. It takes time.
The biggest mistake I see entrepreneurs making is that they jump in too fast without really identifying their niche and finding the right target market. To find financial details, I suggest you get your information from data sources like SBA and your local city manager’s office. They have great data on average salaries, cost of living and such.
How does one find a committed software engineer/programmer for a share of the business?
I would start showing up at co-working places, accelerators, incubators that are all geared towards technology. Start mingling with the people there and see if you can get anyone to bite on the idea and concept.
I have done that myself and it worked. For me, it was all about relationships. If you post an ad, all you will get are people that want to get paid. If you go into their comfort zone to recruit, then you will start making relationships.
Do you have any practical examples of entrepreneurial teams?
I have lots of examples that I could use. Look at Startupweekend.org. You will see teams forming all the time to start a new business. It can work effectively if you have the right pieces in place. You can’t have four programmers working to launch a new gaming business because you need the voice to sell it. You need the leader leading the company.
A team is only as strong as its weakest link and in startups that is certainly the key component. Find the areas of weakness and fill the gaps with solid players.
How can you find a niche market for your startup business?
Well, what are your passions? If you could do any job right now in the world, what would it be as a business owner? What kind of business would you love to own? Start jotting down the answers and then pick one.
You have to be focused when it comes to owning and running a small business. There is no room for error. To become even more successful, you need to find a niche within your industry that will set you apart. What areas of weakness do you see in your industry? Can you solve the pain a customer might be having in that industry? I suggest you always visit your local SCORE chapter and set up a meeting to get you going in the right direction as well.
How do you determine a competitive price for your products or services?
Make sure you do a global search and not just local. You know your price is competitive by the number of people willing pay for your services. I would always suggest calling your competitors and asking for quotes to stay relevant, but also know that you need to set the price based on what keeps your business going and worthwhile to maintain.
For the entrepreneurs that you work with, what is the most common form of organization (sole proprietorship, corporation, or partnership?)
That depends very heavily on the business. Most of us start with an LLC. Look at what is best for the company at a given point and go from there.
If a company cannot hire a full-time or part-time employee at the moment, do you think it is advisable to use a staffing agency to provide employees when needed?
My first source would be local colleges and universities to see if you could get interns to help you grow. My second place would be staffing agencies. The issue there is cost. I would consider posting opportunities on sites like Indeed or even Craigslist to find employees as well.
Is now a good time to start a small farming business? Is it even realistic?
In large cities, organic farmers are doing well utilizing small spaces to grow amazing products. My suggestion is to start small and be unique. Do you have a marketing and business plan in place? I would also like to ask you if you have done any research on the farming industry. What do you see you could do to be different?
I would first read about the effectiveness of having the right campaigns created. You need to understand how they work and what methods have been done to make it a success. I would also try and connect with people via LinkedIn who have experience in this area to see if they would help you find some answers. There is definitely a need for this for any startup business and I wish you success. One final thing to share: stay consistent and relevant with your campaigns.
What are some resources you recommend for gathering relevant demographics for developing a business plan for a startup retail store?
I would visit the city manager’s office for some critical information like areas they are focusing on to grow and enhance and would then look at the census websites to get demographics of people. I would also visit the SBA website as well as SCORE to help you find all the other essential items to really give you a chance to succeed in having the right knowledge for your business plan.
What are the most important aspects that an entrepreneur should focus on when starting a business?
Simple customer validation. They need to validate that their business is solving a pain or a need a customer might have. After that, then I would work on effectively marketing the product.
Would you recommend using an online legal service like LegalZoom to start the paperwork process?
You can certainly go that route. It depends on the business. If it is complicated, then I would try and find a lawyer to set everything up, but if the challenges are minimal and you can get what you need from there, then go for it.
What is a key idea for efficiently identifying a target market regardless of the industry?
I would look and study your demographics in your industry. Visit the Census Bureau and some state sites to grab the information and study them wisely.
Have you helped with home-based businesses? If so, what home-based businesses have you seen be truly successful?
I have helped many home based businesses. The ones that I see that are most exciting in terms of growth and potential are the ones where the owners are really passionate. They eat, sleep, and drink their business year round, all day long. I would start there.
The most success I have seen and witnessed was in consulting. That has been tremendous.
What’s the next step after starting a business?
Marketing, Marketing, Marketing! Start creating and developing relationships to grow your business. Be aggressive on this. People need to know you exist. Share your business with those around you. Just get out there.
Did you intentionally plan to become an entrepreneur or did you suddenly find yourself in an entrepreneur role?
I never intended to become an entrepreneur, it just happened. In looking back at my life, however, I can see how I was led in this direction. I started my first business at age 7 and never looked back.
How did you overcome the fear of opening your own business?
I never went into business with fear. If I had fear, no one could tell. I never go into any business with fear though because it will reflect on so much of your work.
Be fearless when starting your business. Ask yourself this question: What could be the worst thing that happens to you? If you are comfortable with that answer, then you can eliminate any fear.