The importance of social media for a small business is well-known. We bet you’ve heard so many things about why you should join any given social network. Maybe you have a few social networks you like for your small business. Maybe you’re unsure.
A recent article titled A Guide To Building Your Business Through Social Networks helps to clear up some confusion. It lays out facts about social media in small business, offers useful advice for getting started in social media, and how to interact with and satisfy your followers once you have them. Don’t forget, your followers in social media are also customers for your small business, so keeping them engaged and happy is key!
From the article:
Things that once seemed intangible, such as Facebook likes, Yelp reviews, and tweets, are now proof that customers respond to your brand. In turn, these same customers reward your business with public approval and open ended discussions of your business. Not only can you put this direct input into practice, your potential customers can turn to the resources and quickly get what your business is all about.
“Where do I get the money to start my business?” is perhaps the most common question entrepreneurs ask. Of course, this question assumes that they know how much money they need to start their business in the first place.
Develop a plan that outlines funding sources for your small business
Where you go for funding can be different for every small business. Several factors influence the type, cost and suitability of financing for your small business, including:
Stage of the venture process. Are you in the start-up phase? Are you growing your small business? Is your business well-established?
Your small business’ achievements and financial performance to date
The state of the industry your business is in
The type of technology your business is based on (if any)
Potential growth of your venture
Number of years before an exit strategy is available for investors
Investors’ required rate of return on their money
Amount of money you need
What your company is worth
Your goals for your company
Investors’ terms and conditions
There are many other factors that will come into play when it comes to choosing the most appropriate sources of funding for your business.
Generally, a new small business can be funded in one of two ways: equity (ownership) or debt (loan). With equity financing, you exchange a piece of ownership of your business for the investment capital – you’re giving up part of your company to receive money to start or grow. The amount of your company you give up is negotiable, but it’s related to the size of the investment and the value of your company. If you fail, investors lose their money – you’re under no obligation to repay the investment. With debt financing, you borrow money and repay it over time to the lender. If you fail, you’re still obligated to repay the loan in full.
Money is just one factor of a successful small business
Most new entrepreneurs believe that if they have enough money, they can make any business model into a successful business. Sadly, there is nothing further from the truth. A bad idea is a bad idea is a bad idea, no matter how much money you throw at it.
The reality is sufficient start-up capital is only one element of a successful new business. Research shows that the small business owner’s reputation and depth of their social network are important to securing financial help. Not all businesses need start-up capital – but for most, the need for money comes at some point in their business’ life. So, develop a solid financial strategy, but remember that money is but one pillar of a strong small business.
Being an entrepreneur doesn’t always mean going it alone. You may find you need assistance in launching your business, and that’s where a founding team comes in. A founding team is made up of the colleagues and/or partners who will help get your small business off the ground. And they’re important people to have, too – it’s been said that investors would rather part with their money for a first-rate team with a second-rate idea, instead of a second-rate team with a first-rate idea.
So what makes a good founding team?
Experience. The person in charge of your financials had better know her stuff, especially when you’re pitching to investors. Really understand what skills you’re after, and look for people who are experienced in their field to give your small business the best chance of success.
Smarts. The right people doing the right things in the right way goes miles (or kilometres) for small business success. Look for people who are bright, driven and are able to eloquently express what they do for your business.
Personality. Part of what makes investors eager to work with a small business is the personalities of the people involved. And it should be no different for you. Do you enjoy working with your founding team? If not, that could have serious ramifications for the health of your business.
The right amount of people. Your small business may not need a sales person in the founding team. Others might need two. Different businesses and different industries demand different things. Evaluate what your small business needs right out of the gate, and how many people can fill these roles.
Similar values and goals. You’re going to spend hours of your life with your founding team, and you’re going to experience the highs and lows of entrepreneurship together. Do everyone a favour and make sure you all share similar goals and values.
Passion. Each member of your founding team should be so excited about your small business that they can’t help but talk about how great it is and how it will work. After all, that’s a huge chunk of pitching to investors, isn’t it? Look for people who take your small business idea as seriously as you do.
What do you think? What makes a good founding team in your small business?
Many of us start small businesses to follow our passions: bookkeeping, fixing cars, teaching children – anything. However, some entrepreneurs also start small businesses to pursue an activity or interest they like, but may not be an expert in.
At GoForth Institute, we are firm believers in jumping into a small business venture with your eyes wide open. That means education, research and planning. You don’t have to know your industry inside and out, but if you’re a dog lover interested in opening up a dog grooming business, you need to prepare yourself as much as you possibly can. And that could very well mean you’re not the one doing the actual grooming. Part of being a successful entrepreneur is knowing where your strengths and weaknesses lie – wouldn’t you rather have the best groomers in town working for you, instead of you hacking away at poor Rover’s fur and then charging $200? Of course, you should still have a passion for your small business. You’ll still be working just as hard as any other entrepreneur, after all.
Our GoForth Expert Norman Leach has recently answered a question from an entrepreneur interested in starting up a cafe, but who doesn’t have any cooking or baking experience. Check out the advice Norman gives about starting up a small business in which you may not be an expert.
Being an entrepreneur is about more than acting on your great small business idea. Often, you have to hire employees to help you run your small business. And, of course, you also have to be a great manager, inspiring your team to the great things you know they’re capable of.
Managing your small business is a multi-faceted thing, with many variables to consider. With that in mind, we’ve written four quick articles to help you along the way:
Want more small business advice from entrepreneurs just like you? Our Entrepreneur Library has loads of small business advice from fellow entrepreneurs. Let us know if you have any suggestions, and we hope you enjoy!