When you use an acronym for your phone number in your marketing mediums, you must keep in mind the behavior and resources of your prospects and understand that due to handheld device limitations, not all mobile users will have the ability to respond to your acronym and conveniently initiate a call to your company via a vanity number.

I seldom use my home phone even if I am at home, I often reach for my Blackberry where my minutes are unlimited and my contact information, calendar and email are all just a key stroke away.  I am one of approximately 29 million blackberry users according to a 2009 article on twice.com.  But, one of the drawbacks of my Blackberry is that the keyboard is configured more like a computer keyboard than a phone, therefore the alphabet is not listed on the 8 primary number keys on my device.

This is important information for both small business entrepreneurs and large corporate marketers to know when selecting and implementing the all so popular vanity phone numbers.  When marketing your business effectively, you must consider the consumer’s resources when attempting to drive sales or services.  Instead of inspiring customers to call you, your catchy vanity phone number could be frustrating prospects (who like me use a Blackberry) resulting in missed marketing opportunities and reduced engagement.

I can’t tell you how many times I have found myself in a situation where I was unable to respond to an advertisement for a business using my Blackberry because the ad gave a vanity phone number.  Actually, this article is a result of those many bouts of personal frustration where I was unable to call everyone from my credit card company to the plumber who was in front of me in traffic.  I reason that If I cannot call them using my Blackberry handheld, it stands to reason that there are at least 28,999,999 other people who can’t as well.  And that is a message worth sharing with my fellow entrepreneurs.

One way businesses can maximize their vanity phone numbers for an increasingly diverse mobile society is to offer the numbers in addition to the vanity letters.  For instance 888 555 BUGS should be 888 555 BUGS (2847) underneath or after.  Using this method you provide convenience for non-mobile and mobile users regardless of their device and ensure that your vanity acronym serves its purpose of reinforcing your brand recognition, creating ease of contact and driving customer engagement.

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About the Blogger:

Will Corrente is “The Connection Optimizer™” and Managing Director of Corrente Consulting International Inc. a small business entrepreneur consulting firm and professional connection company based in West Palm Beach, FL.  Feel free to email him questions, comments or suggested stories and follow him on Twitter @willcorrente.

A reference business is any business that in part or as a whole represents the operation and/or economics of the business in which you intend to start.  The reference business can be in the same industry but often is not.  Successful business models in one industry often are copied and implemented by others.  Traditional brick and mortar businesses are responsible for many of the existing successful business models.

• Advertising – provide content for free mixed with advertising paid by vendors interested in reaching the content provider’s audience (i.e. broadcast television and radio, etc.).
• Brokerage – create a market that connects buyers and sellers, receiving a percentage of every transaction (i.e. equity and debt transactions, real estate purchase and rental, etc.).
• Franchising – charge fee or royalty for using an established brand, process and procedures for delivering a specific business product and/or services (i.e. restaurants, convenience stores, cleaning services, etc.)
• Membership/subscription –charge user periodic fee to gain access to product and/or services (i.e. clubs, associations, cable television, etc.)
• Licensing – charge user fee or royalty for permission to use intellectual property (i.e. patent, trademark, copyright) for product or service use or sale (i.e. product merchandising, invention, etc.).
• Multi-level marketing – receive commission for product and/or service individual sells as well as for product and/or service other sell under the individual in the organization’s hierarchy (i.e. cosmetics, vitamins etc.).
• Utility –charge user fee for amount of use of a specific product and/or service (i.e. electricity, gas, water)

The Internet provides another medium to employ and/or enhance the above mentioned business models.  It also has created some of its own, two of which follow:

Freemium – offers basic Web services or a basic downloadable digital product, for free, while charging a premium for advanced or special features. (Source: Wikipedia) Many well known online services use the freemium model; LinkedIn (Business networking), Skype (Real time communication), Pandora (Music), Flickr (Photo sharing), Wall Street Journal Online (News), etc.

Crowdsourcing – takes a job traditionally performed by a designated agent (usually an employee) and outsources it to an undefined, generally large group of people in the form of an open call. (Source: Jeff Howe Blog) Crowdsourcing sites make money in various ways, from direct sales to taking percentage of every transaction to advertising. Some crowdsourcing examples are Threadless (Apparel), Crowdspring (Design), Kickstarter (Funding), IMDB (Media), istockphoto (Media).

If the business model you intend to use is new to your industry, look to other business/es outside your industry that most resembles yours.  Then follow the same recommendations that I outlined in my previous blog on competition to help build and validate your economic model.

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About the Blogger:

Jeff Maglin is a partner at Vokse, a business consulting firm that specializes in developing business plans for start-ups and early stage ventures.  Jeff has over 10 years of business plan writing development experience, working in a range of industries and across business functions. Prior to his current role, Jeff held management positions in product management, marketing and sales. Jeff also is active in the New York City entrepreneurship community.

Jeff has a BA from the University of Michigan and an MBA from Carnegie Mellon University.

As entrepreneurs, we are guaranteed to find ourselves amidst massive periods of change from time to time.

The ebb and flow in supply and demand for your products, services or system may find you at times feeling like you are in a freefall with no safe landing place in sight.

What do you do when change strikes?

In the wake of making things happen, be sure you have a grounding statement that is true that you can repeat to yourself. For example, a simple one is: “Everything is going to be okay.”

Whatever is happening is a result and outcome of the choices you made, which means you really can handle it. Reset your mindset so you can move forward quickly and effectively from here. It’s the best way to accelerate change.

Think of a moment from the past when you experienced a great change and challenge in your business – and even in your life. Remember how temporary that situation was? And all you really did was make a new choice and move forward, didn’t you?

Whatever you’re experiencing right now and the challenges you’re facing as an entrepreneur – whether you’ve lost a support team member or are feeling financial pressure and facing your fears; if you don’t feel secure and if you are starting to lose your faith and confidence, remind yourself that … really … everything is going to be okay.

Take a deep breath, exhale, make a new choice and leap forward into your next entrepreneurial adventure.

You’ve done it before. Go do it again. Everything is going to be okay.

You Can Do It!

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About the Blogger:

Jennifer S. Wilkov knows what it takes to be a successful entrepreneur and live the life you love in the face of any challenge. She shares the insights, knowledge and wisdom from her vast experience with 5 individual entrepreneurs a month through her Make It Happen Program so participants take action, leap powerfully into their lives and at last run the business and live the life they’ve imagined.  See what Jennifer is making happen in the world.

While his decision made some people jump for joy, other break down crying and others bashing him for this overly orchestrated event, there are many lessons that can be taken from what watching the whole process of Lebron going through free agency, some positive and others, negative.

Here are four very important lessons that an entrepreneur should take away from this “event”-

Surround yourself with an experienced team – Looking back at the process of Lebron’s free agency, the one thing that came out of it was how his team miscalculated many things, specifically the image that was portrayed during the ESPN interview. When starting a business or entering into partnerships or new lines of business, you need to talk to people that have experience and have been there before. These people can help guide you and help you figure out the best way to approach things.

Many entrepreneurs partner with friends or other entrepreneurs to get themselves started, especially since it is very hard to hire people with no money. But create a board of advisors or a network of people with experience that can help you.

Don’t burn bridges – When you leave a job, turn down a partnership or decline to work with an angel or venture capital firm, it is essential that you do it with class and respect. These people have helped you along the way and you never know whom you will need help from later on. Lebron managed to turn an entire city from friend into hated enemies in a matter of seconds as a result of the manor in which he chose his new team. While he may have upset them by leaving, even without the spectacle, doing it respectfully and in a manner similar how he was treated by the fans for seven years, he may be able to return home.

As an entrepreneur, you may not want partners now, but you may need a partners help down the road. You may not want and investor’s money in the first round of financing, but there may be a second, third or an exit that you need those people along the way. Keep those relationships strong and never burn those bridges.

Never forget those who helped you along the way – Apparently, in order to protect the secrecy of his decision, Lebron didn’t let anyone know what he chose until the last few minutes before he announced it. At that point, he had one of his associates call his old boss, Dan Gilbert of the Cavaliers, to tell him Lebron is leaving. And as we all know, Lebron rejected his hometown and previous employer in one of the biggest television events of the year. Entrepreneurs start out as people with ideas and dreams, just like a basketball player.

While your company may become a success, many people help you get there by providing you guidance, flexibility and mentoring along the way.

Money isn’t everything – And no, it’s not the only thing. Money is great, especially when going through an exit for your company. But as we saw from Lebron, sometimes, taking a little less to be in a better situation is the best exit strategy. When you are selling your company or bringing in investors, you need to consider what your goal is; to make as much money as possible or see your company grow into something bigger and better with lasting success.

Dress for success – When people come to you for a meeting or especially when you go to them, keep in mind that how you dress tells a lot about you. Asking executives from 6 teams to come to you for a meeting and presentation and then showing up in shorts and a t-shirt gives off a very negative impression. It portrays you as childish and a lack of professionalism. You ultimately want to be the face of your brand and grow it into an empire, so dress that way. Imagine that any second some big deal could close and you can be on television or in the paper. What impression do you want to give off? People perceive you but the first impression and what you wear makes a huge difference.

While outsiders may not like our decision or you have to leave friends behind, doing so with dignity and class will help leave a favorable impression. As an entrepreneur, that impression could help make you a success. Learn from this Lebron fiasco and do things the quietly and effectively. Earn the respect of others because at the end of the day, how people perceive you is really all that matters.

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About the Blogger

Aron Schoenfeld is the founder of Do It In Person, a unique media brand focusing on the importance of in person communication skills and face-to-face time for individuals and families.

Morgan Freeman—1937, actor

We all know raising money can be really tough. But some entrepreneurs make it look easy. Ron and David are two of those people.

We were chatting over the weekend as they are on my finance panel for next week’s Green Entrepreneur Summit. Ron last month raised a whopping eight-figure sum in only six months!  David raised $2MM in one of the more creative ways I had heard before.

How they did it can be helpful for any green/non-green entrepreneur looking for capital.

Ron Bergamini, CEO of Action Environmental Services, one of the greenest carting companies in the country, is a very modest guy.  He would never let on to what it took to raise more money than any small business I have known.  That modesty showed up again today when I saw him speak on a panel with the founder of MeetUp.com and several other like-minded NYC entrepreneurs.

All Ron said on today’s panel was “it was tough raising it.”

What he didn’t mention is the banks put him through the ringer.  Big time.  What should have taken weeks took months.  They didn’t double-check his finances, they triple-checked them.  He told me, “Two years ago when you were just off on your projections, it was a simple call to the bank to explain things.  Now the banks call me as soon as the slightest thing goes awry.”

Makes it tough to run a company that way.  But now that he is very well capitalized, he is ready for his aggressive expansion plans.

David Kistner, Founder of Green Apple Cleaners, one of the biggest and greenest “wet cleaning” (environmental dry cleaning) businesses in the US, had a completely different experience.  David raised about $2MM a couple of years ago in his second round of financing.  How he did it was one of the more creative ways I’ve heard.   He’ll be explaining this story next week at the event.

Like Ron, David is a very laid back guy, who would never let on how difficult raising capital was for him.

But the real lesson for him came after he raised his capital. He actually had to downsize from 10 locations to his current three.

The reason why reminded me of what I went through ten years earlier with my green retail stores.

He expanded too quickly.  In his case it was because he could not keep up with the demand and maintain quality with his state-of-the-art environmental cleaning process for clothing.

This created serious log jams in his production, which in turn started to jeopardize Green Apple’s brand and image.

But speaking with him all I heard was his excitement.  He now has a more grounded company with a solid infrastructure.  And is ready to expand again! Going through these experiences can make good entrepreneurs great, depending on how they handle the lessons.  Lessons that can never be learned in school.

For both Ron and David, their experiences are helping them become environmental business leaders in their industries.

Here are some of the key challenges to deal with when raising capital:

1. Balancing Your Time— one of the biggest shocks to entrepreneurs when first raising capital is how much time it takes to write the business plan and then meetings and more meetings with prospective investors.  Each one wants different information and/or have it in a different way.  All this while you are trying to grow your business and expand your customer base.
2. Enough is Not Enough—one of the hardest things to do is get a check from an investor and NOT spend it right away.  To put it in escrow until the right amount of money is raised.  If it IS raised, then spend it.  If it is NOT raised, then give it back.
3. Valuating the Company—every entrepreneur wants to tell their investors their investment is now worth more.  But when raising money and you say your company is worth X, if that number is not accurate the next time you raise money, the company’s value may be lower than the previous round.  You risk upsetting your investors.
4. Blue Skying—when raising money, investors want to know your growth potential.  How much you can scale up.  It is easy to say your market potential is far greater than reality.  When doing this, it can look great on paper, but when it comes to delivering, you may have a very hard time explaining your failings to your investors.
5. Teaming Up—there is nothing more difficult than bringing on the wrong key management.  If they don’t “get” your vision (especially green businesses) or have a very different strategy of getting there, it will be a rocky road. And if you’re not careful, your investors may fire you because of it.  Remember when Steve Jobs was fired by Apple’s board in the 1980s?
6. Good vs Bad Money—when someone is dangling a check in front of you, it can be VERY difficult to say, “No thank you!”  Yet if the check dangler is not in alignment with your company’s vision or strategy for growth, down the road it may come back to bite you in the you-know-what.  This is especially true for green companies who are often on a different growth trajectory than traditional companies.

Ron and David are excited about what they are building and to teach it to us.  Along the other equally great finance and marketing experts, they will be sharing lessons learned and things to avoid next Thursday, July 22^nd in Manhattan.

If you have a green business and want to learn from these folks as well as meet other great entrepreneurs just like you, Be UnReasonable and come. As a dedicated NYEW reader, just use special code SDPC01 for a massive discount (I’m embarrassed to say what it is!)

Check out the Green Entrepreneur Summit:  Scaling Up Without Selling Out and use the discount code while we still have seats.

Action Steps for the Week

Raising capital are you?  How seriously have you crunched your numbers?  How prepared are you for being on the grill by experienced bankers/investors?

Ready, well then, OK!  Start by making a list of what will most likely trip you up from the six Key Challenges above.

Mostly likely you will have elements of all six. For each, create a strategy to keep your ambitions in check as you move forward. Almost like when you are trying to lose weight and you ask your partner to stop you from ordering that dessert at the restaurant, make sure you have something in place to keep you in check as things start to heat up.

You’ll be glad you did.

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About the blogger:

Since 1987, Stefan Doering has been pioneering new approaches to environmental business and sustainability.

After starting one of the first green retail businesses in the country and growing it to one of the largest, Doering has worked with hundreds of green businesses as well as teaches green entrepreneurism for various NYC programs and at Columbia University’s Center for Environmental Research and Conservation.

Stefan has been featured on the CBS Evening News, Good Morning America, The New York Times, Wall Street Journal, Bloomberg TV, and dozens more.

The results showed the various reasons people first became entrepreneurs and how these motivations are linked to success. Interestingly, one of the least cited reasons is the only one that is linked to success.

*Based on 1,497 Columbia Business School alumni

Some of our survey highlights from this question revealed:

• “The desire to build something” is the single motivator that predicts ultimate success. Only 5 percent of entrepreneurs cite this motivation.

• Two commonly cited reasons for becoming an entrepreneur are actually associated with lesser performance or profitability. “Frustration with a corporate career” and “motivation based on lifestyle” are associated with less success. Both are understandable. People driven to entrepreneurship through lack of other attractive alternatives or people whose prime motivation is lifestyle might well be expected to build smaller, less profitable businesses.

• Several other common motivations have no link to performance. Being “motivated by financial gain” was not a predictor of success. Neither was “the desire for autonomy, challenge and excitement,” “creativity,” “having a great business idea” or “entrepreneurship as a life goal.” There are many myths about entrepreneurship being glamorous. The truth is entrepreneurship is 1 percent inspiration and 99 percent perspiration. Those who start for glamorous reasons may find themselves in for a surprise.

What is your motivation for starting a business now?

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About the Blogger:

Professor Murray Low is the director of the Eugene Lang Entrepreneurship Center at Columbia Business School.  He is an experienced entrepreneur and a leading authority on entrepreneurship in independent, corporate and not-for-profit settings. Starting businesses in several industries led him to study how the entrepreneurial process differs by context. His current research examines the dynamics of entrepreneurial careers.

As the founder of the Columbia Entrepreneurship Program, he has worked to make entrepreneurship a viable career option for MBA graduates. Low consults to both small and large companies, family businesses and not-for-profits. He teaches executive seminars in the areas of entrepreneurship and strategic management and makes frequent presentations to academic and industry groups. He has published widely in academic and practitioner journals and is a regular commentator in the media.

The photographs ranged from $6,000 – $75,000 or more. The price blew me away! $6,000 for a picture?? So, my friend and I proceeded to question the gallery worker as to how the artist sets his prices. The worker, an extremely well informed young lady, explained to us the process that the artist goes through to make the prints. It is painstakingly hard, and takes a great amount of effort, time and cost. After the explanation, the prices that were set seemed very fair and made a ton of sense. That’s the sign of someone who is really good at what they do after all – making your output look effortless even though it is of high quality. That is how I look at myself as a User Experience Designer.

When you hire a UX Designer, what are you paying for? As the person hiring, this is important to know. You are not just paying for the designs, wireframes, user flows, user requirements documents (the physical outputs). Like the artist mentioned in my example above, UX Designers go through intensive work day in and day out to understand the best ways to influence the behaviors of users in a digital space.

UX Designers are physically focused on a completely different point of view – the user & human behavior. It may seem as though we are simply drawing a wireframe out of thin air, but, again like the artist, we are making our output look effortless because of our endless search for knowledge regarding user behavior.

Simply put – you are paying for:

• The mesh of knowledge that we have regarding your customer base
• Expertise in knowing how to influence your customers to use your product or service
• Knowledge regarding how to uncover what your users need from you, and how they want to pay for it. To me, this seems like a pretty good deal in the end. Having someone that is a direct input into your making more money.

So the next time you get a wireframe, a document or a powerpoint from a UXD and you think to yourself, “this is what I’m paying for?” Keep in mind that what you are holding is only the output of years or hard work and knowledge gathering.

What you are paying for is the ability to not have to worry about an entire aspect of your business - well at least not worry as much!

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About the Blogger

Lis is the Founder of Hubert Experience Design, a boutique user experience firm based in NYC. Her firm has worked with a wide range of organizations, from Fortune 500 to start-up. Hubert Experience Design takes pride in making websites better and easier to use.

However, whatever your reasons for considering entrepreneurship instead of formal employment, there are a few traits you will need to cultivate in order to succeed.

1. Passion

It sounds like a no brainer, but the most important factor in your success in entrepreneurship is passion for your business. We’ve all had jobs we hate, and let’s face it – it doesn’t inspire you to work incredibly hard, or give your all, does it? Don’t think just because you are working for yourself, that will change!

If you’re bored to tears or just plain hate working on your business, you’re unlikely to give it the energy it needs to succeed. So find something you love doing, and you will have a solid foundation for building a successful new business venture.

2. Plan, Plan, and Then Plan Some More

There’s an old saying ‘Those who fail to plan, plan to fail.’ That’s never been more true than when applied to entrepreneurship.

You need concrete, quantifiable goals, as well as a 30, 60, 90 day strategy on how to get there. Having a plan provides a framework, something fixed to work toward, which will help keep you focused. Get your eyes on the prize and a plan onto paper before you start trying to set up your new business. A handy trick is to imagine your goal is already achieved, and then think back through the steps it took to get there.

3. Be Disciplined

It sounds romantic and exciting to “be the boss,” doesn’t it? Trust me – it’s not, especially at first anyway. In fact, before you get to that fancy corner office with five assistants, there is going to be a lot of blood, sweat and tears poured into your entrepreneurship dream. You need to work harder for yourself, and your business goals, than you ever would for any boss. That means an unlimited and indefinite amount of hours dedicated toward achieving your goal – keeping your nose firmly to the grindstone. Remember, luck is an accumulation of hard work.

4. Be a Cheapskate

Whether you have a big budget or not when you first venture into the game of entrepreneurship, you need to learn the value of frugality – bootstrap your way to success. Most small businesses fail to take time to break-even, let alone become profitable. Thus, when you’re starting out, finding cheaper and more innovative ways to accomplish tasks is one of the best skills you can learn. Think outside of the box and in terms of leverage. The longer you can stretch your capital, and the more you can save – the better for your business and your mental sanity.

5. Understand That You Are Always Marketing and Selling

ABS – Always Be Selling. Most of us think that marketing and sales is a task. However, when you jump into the wonderful world of entrepreneurship – more than at any other time in your life – everything is about marketing and selling. Don’t be shy to network, discover what your clients want, and broadcast to others that you want their business.

Treat every moment as a selling opportunity, and you will see results:

• Carry business cards with you everywhere
• Have a thirty second pitch ready at all times
• Make a point of meeting people who are your target market – those who should buy your product/service

6. Know That Your Client Is the Most Important Person in Your Business

Success or failure in entrepreneurship hinges on your ability to make your clients want to do business with you. Since repeat business is the backbone of any successful business – your client’s happiness should be priority number one.

Remember the little things. Something as simple as calling a customer back can swing the balance in your favor. Always, always, always put your client first. Build relationships, and you will see your business grow right alongside them.

7. Remember That In Business, Image Is Important

Okay, this one is a bit of a catch twenty-two. You need a professional business image, but you haven’t got the budget. Luckily though, projecting the right image is not all about flashy cars and the right business address. With the information age, you can work from your living room and still have a professional image.

All you need to do is:

• Make sure you are always well dressed and well spoken
• Have a professional looking (not necessarily expensive) website and email address
• Have professional looking business cards

When you’re first starting out, simply focus on little things – those which you can control with the resources you have. The fancy business address can come later, but make sure to get the basics right first.

And Now for the Good News

If you’re reading this and wondering where to start on your quest for entrepreneurship, there is one good piece of news for you. Entrepreneurs are not born – they are made.

If some of these things seem beyond you, learn them. Take a course in selling if you have to. Download planning software if you need some help becoming organized. Figure out where your weaknesses are, and work on them in small bits each and every day. In the aggregate you will achieve an exponential return on your investment.

Everyone has the capacity for entrepreneurship in some respect, if you want it bad enough (and you can), success will undoubtedly find you.

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Stop At Nothing. Achieve Everything.

Gary Whitehill is the Founder of The Relentless Foundation and New York Entrepreneur Week (NYEW), both of which reflect his entrepreneurial drive and relentless energy.

In 2009, The Relentless Foundation inspired the creation of New York Entrepreneur Week (NYEW), an unprecedented gathering of entrepreneurs, from innovation-minded start-ups to multi-million dollar revenue generators who are given the chance to learn, connect and leverage opportunities to help drive economic change.

The Entrepreneur Week movement continues to grow, with events planned in more US cities and around the world.

Additionally, Gary believes kids should have the ability to create the world they want, and that those who are driven to achieve must also be given tools such as entrepreneurship to learn, grow and express themselves.

Gary supports people and companies invested in driving social and economic change.

Professional networking sites such as Linkedin and personal networking sites such as Facebook are helping small business owners, entrepreneurs and professionals connect and network with colleagues, customers and friends.  However, as a small business entrepreneur one of the most effective means of marketing has always been in person connecting and networking.

At a recent networking event hosted by Aron Schoenfeld of Do it in Person during this past New York Entrepreneur Week (NYEW) , Schoenfeld pointed out that we cannot let technology replace good old fashioned face-to-face time,“Getting out and networking is the surest way to develop relationships that will benefit you in both the short and long term. The interaction and getting to know people on a personal level is something that people look forward to and cannot be replaced by technology.”

The need for in person connecting and networking was also echoed by New Jersey entrepreneur Ron Denequolo of Magic Cleaning Concepts in Pequannock, NJ who uses in person networking via a local BNI chapter to grow his business.  “The in person interaction of the weekly meetings has been great at helping me connect and spread the word about my business” , says Denequolo.

In person connecting and networking can take place in a variety of settings and through a variety of organizations.  There are many networking opportunities available to small business entrepreneurs by joining one or more clubs and organizations or participating in social events, some of which include:

• Community Service Organizations – Kiwanis and Rotary are community service clubs that provide an opportunity for business owners to network while volunteering their time and effort for the improvement of specific charitable causes.
• Business Networking Clubs – BNI and LeTip are traditional business networking organizations where members pay a fee to be a part of the chapter and the chapter operates for the exclusive purpose of allowing members to network, connect and refer business to one another.
• Chambers of Commerce- although not specifically designed for networking, your local chamber usually hosts events, meetings and other activities to foster member to member networking.
• Professional Associations- such as the American Bar Association,  American Medical Association, or local organizations such as the Bergen County Bar Association  offer member to member networking opportunities for a specific industry or profession.
• Meet Up Groups- a relatively new concept of networking where a group is created  around a specific purpose to “meet-up”.  Check the web for a local business related meet up group in your area.
• Entrepreneur Conferences –groups that host informational and social events with groups of successful entrepreneurs such as New York Entrepreneur Week, Renaissance Weekend, and Summit Series
• Alumni Associations- connecting and networking with fellow alumni of your college or university provides an excellent forum for networking and relationship building.

As a small business entrepreneur, in person connecting and networking can be a boom to your business and to your bottom line.  The key to effective connecting and networking is to build a personal relationship with each person you meet.  Take the time to listen to your new contact; who they are, what they do, and who is their ideal customer, or what need they wish to fill.  Prospects and customers love to put a face with the name and build a relationship with a person as well as a company.

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About the Blogger:

Will Corrente is “The Connection Optimizer™” and Managing Director of Corrente Consulting International Inc. a small business entrepreneur consulting firm and professional connection company based in West Palm Beach, FL.  Feel free to email him questions, comments or suggested stories.

I proposed that building an economic model can be a helpful tool in answering that question.  Start simple using your existing knowledge of revenues and costs.  Next, validate your initial assumptions through market research.  I discussed how market sizing and segmentation can help forecast demand, which is used to calculate both revenue and variable costs.  Below, I will discuss how researching your competition can contribute in building and/or supporting the economic model.

A competitor is any entity that provides the same or similar product or service to the same market or market segment.  Competitors can be direct or indirect.  An example of direct competitors is Dell, Hewlett Packard, Sony, Apple, etc for notebook computers.  An example of indirect competitors is Dropbox.com and Western digital, which provide different but substitute solutions for data storage and backup.   I will not go into details in this article but do not make the mistake of thinking you have no competitors, even if you consider your idea unique.  Everyone has competitors.

Researching competitors can help you support assumptions for both revenues and costs. If the competitor is a public company, most have copies of their annual reports that you can download from their site. You also can find copies of all copies of US public company filings at the SEC Edgar web site.  Annual reports are listed as 10-Ks.

The annual report profit and loss statement and statement descriptions helps you identify the important revenue and cost categories to consider in your economic model.  (Note: It is important to make sure that the companies you choose to research are pure plays, that is, they only own and operate one type of business.  Otherwise, the information contained in the annual report, especially the financials, will be an aggregate of the different business types and not be representative of the business you are trying to understand.)  If you are able to obtain annual reports of three or more competitors, you also can estimate the average percent of sales the different revenue and cost categories represent.  Some industries produce annual operation reports that provide the average establishment revenue and costs or revenue and cost percentages for the industry and/or segments of the industry.  The restaurant and hotel industries are examples of two that do.  Often these reports can be quite expensive.  Therefore, I suggest you do a search online at WorldCat to see if a nearby library carries the reference.

Some industries are comprised only of private companies.  This does make finding information to build and support your economic model more difficult, however, you still can find plenty of public information of these companies online.  Competitor web sites are a great place to start, providing all types of financial and operational information, such as traffic, sales, growth rates, pricing, etc..  In a previous project I worked in the music industry, I was able to determine a privately-held competitor’s music catalog annual size and growth, annual traffic and traffic conversion rates and annual product sold simply by reviewing their periodic press releases.

Industry associations, periodicals and blogs also can be a wealth of financial and operational information through industry surveys, company profiles and interviews with industry insiders.  Business networking sites, such as LinkedIn, allow you direct access to some of these industry experts directly through introductions or indirectly by broadcasting questions.  Members who are knowledgeable in the topic are incentivized to respond by being awarded subject matter expert status on their profile page for best answers.

In summary, competitive information is a great way to check your initial revenue and cost assumptions and to help build and support a more robust economic model for yourself and other stakeholders.  Still, there are some of you who may say that your existing competition is not a good reference as your business model is unique to your industry.  Although this may be true, you still can find existing public information to help build and support your economic model using reference businesses, which I will discuss in my next article.

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About the Blogger:

Jeff Maglin is a partner at vokse, a business consulting firm that specializes in developing business plans for start-ups and early stage ventures.  Jeff has over 10 years of business plan writing development experience, working in a range of industries and across business functions. Prior to his current role, Jeff held management positions in product management, marketing and sales. Jeff also is active in the New York City entrepreneurship community.

Jeff has a BA from the University of Michigan and an MBA from Carnegie Mellon University.