Not all entrepreneurs have the language of business at their fingertips.  There are so many different disciplines involved.  So many acronyms and abbreviations.  But most dictionaries are organized by subject–such as finance, accounting, marketing, law, statistics.  And some dictionaries give too much information.

We’re providing a quick definition and then using the term in a sentence.  It’s a quick hit but enough to give content and context.

Add a comment with feedback or terms, phrases, acronyms, or abbreviations to be included.   Execuspeak Dictionary

PLEASE NOTE:  The market trial is not the place to see if your service actually works.  There’s a difference.  Imagine you’re selling a carpet cleaning service which requires a hand operated cleaning machine.  Before going to market it is imperative that the equipment be tested AND that the process of carpet cleaning be understood AND the lotions and potions be used so quantities and reactions are understood.  Doing all of that testing at a customer location is not a market trial… that would be a recipe for failure.  Truth be told, if the equipment and the process and the lotions and potions are being tested, then either put your own carpet at risk, buy a cheap remnant or used carpet and practice, or pay someone for the privilege of putting their carpet at risk.

On the other hand, if you’re selling a carpet cleaning truck, it might be a good idea to do some research first.  Creating a truck for a single purpose is expensive and time consuming.

And yes, it is all about the money.  Spending $5,000 on research doesn’t make any sense if the entire investment in the business opportunity is $500.

In a market trial the customer gets to vote with its dollars.  If the market adopts and then keeps the service, then the market is pleased.   If the market does not adopt or does not keep the service, then the market is not pleased.  No hypothetical service, no hypothetical market.  The real thing.

The overall number of active VC firms dropped to 794 in 2009 from a high of 1,023 in 2005. “We’ll see a continued shakeout as a lot of firms that aren’t the top firms won’t be around,” said Rebecca Lynn of Morgenthaler Ventures. The Wall Street Journal (3/9)

What does all this mean to you?

It depends.  If you’re looking for millions of dollars of investment from Venture Capital firms then the pool of money just got that much smaller.

So let’s think about the odds of your small business being sold.

Brace yourself.

First, only 50% of start up businesses are still going 5 years later.  A business has to succeed before it can be sold.

What does this mean?  If 1000 small businesses start up today, only 500 will be around and operating 5 years from now.  If only 1% get sold, then that means only 5 of the original 1000 might be sold 5 or more years from now.

Why dwell on this?  WHAT is your business?  What is your goal and objective? If your goal is to sell your business, then exactly WHAT is the buyer going to buy?  If your business and your business model is wholly dependent on you then there are two choices:  Rethink your goal or rethink your business.

Let’s review the basic choices:

• One-time fee
• Recurring monthly charge
• Annual membership or subscription
• Series of payments for large expenses
• Add-on fees (one-time or recurring) for premium services

Need more detail than just a list?  Then it’s time to look at your competitors again.  What are they doing?

The next question?  Think about your customers.

The option you choose will have a huge impact on your business model.  Nothing says  you can have to select one option.  Your customers might want a choice.

It’s not just about getting all the info into a short and brief sentence or two.  It’s more than writing a couple of great sentences that cover all the bases.  It’s about being able to speak those sentences and sound natural.

Think in terms of a script. Start out by writing the script.

NOW speak it.  Are you tripping over your words?  Probably.

NOW simplify it.  Practice it again and again.  Practice it at a networking event.  Notice how it changes just a bit each time you say it?  That’s natural and normal.  It’s not about sounding like a robot.  It’s about informing and engaging in conversation.

The purpose of an elevator speech is not to close a deal, but to pique your listener’s attention enough to agree to move to the next level of commitment.  Even if the next “level of commitment” is no more than a pleasant conversation. Afer all, one pleasant conversation after another is the beginning of a relationship.

This post is to ask WHY.  Why do you want VC funding?  Because it’s sexy?  Most likely.  You’ve got your own list of reason why you want VC funding.   Let’s review some issues.

1)  Venture Capital money doesn’t think small.  If your business idea only requires thousands of dollars (tens of thousands or hundreds of thousands) then it’s too small.  VC’s are looking to invest millions.  And they want to make millions more.

If you’re thinking that it would be good to have a few hundred thousand dollars to get going then you’re thinking too small.  The VC vocabulary is a whole other world – and the entire focus is on on INVESTMENT and PAYOUT.  The first couple hundred grand is called seed money.  Maybe that’s where the “angels” fit in.  Then there is mezzanine financing.  Then there is the actual VC investment, first round, second round…

2)  Their goal is to grow your company, take it public (or sell it to a larger firm), and cash out. This is an important detail.  Their goal is to invest their money and then get their money out.  Venture Capitalists do not want to be your lifelong partner.

VC money isn’t a requirement to go public.  Maybe you’d like to keep your multi-million dollar business private.  Maybe you’d like to make the public/private decision at your discretion. Maybe you want to retain 100% ownership and 100% of the assets.

3)  Each VC firm specializes in very discrete and finite segments of business.  One VC firm only works with telecommunications products that are designed for utilities.  Another firm only looks at veterinary products for farm animals.  There are fashions in the VC community just as there are fashions in clothing.  This is why venture capital is such a good option for highly specialized, large revenue generating specific industry concepts.

If your business idea is last year’s model then you’re wasting your time.  If your business idea is next year’s model then they might have already funded it three years ago. VCs are looking for the idea they haven’t seen and can absolutely believe in.

Maybe it’s time to reconsider your funding goals and requirements.   A loan from someone you know or a loan from the bank., self financing or bootstrapping.  Recognize that VC money is NOT an easy fix.  There’s a lot of hard work associated with getting funded by a VC.  In the end, you have twice the experts and half the ownership. Sometimes that’s a good trade. Other times, not so much.

Ever hear the story about how Eskimos have 95 words to describe “snow?”  Business professionals have 95 (at least) different ways to analyze the market.  Each describes something different.

Skiers want snow like powder.  Ice sculptors want wet snow.  Get the picture?

Once you get the hang of it, it will become apparent that each different type of analysis is actually describing something different and something that might be important to you.

Not only that, when you’re looking at all the piles or files of research that you’ve collected, the different types of analysis will help you sort all that information into usable topics.

Try this:

Set up five file folders:

• Customer Description
• Competitor Description
• Market Description
• Trends,
• Competitive Products

Now sort your stuff.

Maybe you’ve got lots of information that doesn’t fit into the five folders listed above.  Don’t throw it away!  Look at it…Is there a common theme to those documents?  When you figure that out just open up another file.  Chances are it’s an important category of information for your business.

When you review the materials thisway it’s just easier to understand what’s relevant, what’s important, and what’s not.