Friday’s ELP meeting in Sandy was more than informative; you might say it was a bit unsettling (in a good way). The group was ably guided by Visible Divers CEO, Steve Ellis, to take the next step toward business success. One of the dangers of meeting weekly to discuss entrepreneurial success is that it can become comfortable to do a lot of talking without taking concrete action. Friday’s meeting removed that comfort level as we were each asked to report on certain aspects of our business.
Steve, who has transformed the diving industry with his management software, walked us through an informative presentation he created for investors. He then talked about the tough questions investors are likely to ask. They were:
- Introduce your business. What do you offer?
- Brag: Why are you the one to do it?
- What’s your edge?
- Who is your target customer?
- Do you have any customers?
- What is your hurdle to get one (or the next one)?
- Are you incorporated?
- When am I getting the value back that I want?
- What is your strategy?
Question #6 became an exercise for the group. Each person was asked, “Who is your next customer?” Some in attendance were still in product development and were therefore unable to answer the question. Others were in production mode, currently interfacing with their markets, but still struggled with the question. Steve not only wanted to know who (by name, if possible) was their next customer, he wanted to know when that deal would be struck. If someone was unable to answer the question, the next question was, “What is stopping you from answering that question?” It became obvious to the group that unless you know who your next customer is, you really don’t have one.
Question #7 also became an exercise for the group as those who had not yet incorporated their businesses were asked for their reasons. The answers varied from, “I just haven’t gotten around to it,” to “I don’t have enough money,” to “I guess I don’t know the importance of it.” Steve and others in the group discussed the unnecessary risks involved in being unincorporated. The group agreed that it is well worth the time to study LLC’s and other corporations as ways to shield yourself from liability that could destroy your ability to be in business. It is also relatively inexpensive in Utah to incorporate – only $75. Adequate business insurance was also proffered as a first line of defense against such risk.
Additional tips for new start-ups were discussed, such as:
- It is a requirement to maintain monthly profit/loss records.
- Be aware of your minimum viable offer (MVO) and the ability to bring in revenue even when your product or service is not 100% developed. Consider “chopping up” your products or services in order to take advantage of revenue opportunities early in the process.
- DBA’s are dangerous because they do not replace you as the person who is exposed to the risk.
- There are online legal forms with “wizards” to help you create a rudimentary contract to protect yourself with customers, employees, partners, etc. It is necessary, however, to have an attorney review all of your legal documents at some point. SCORE attorneys can look at your existing contracts and make suggestions but cannot write them for you.
Some very helpful websites were recommended, including:
- http://www.lynda.com/ – Online technical and business courses starting at $25 a month for a membership.
- Managing Finances – http://www.waveapps.com – Invoicing, accounting, payroll, personal, receipts (FREE)
Homework assignments were:
- Obtain your next customer this week.
- Put yourself in the ELP member directory.
- Review each other on Google+, LinkedIn or wherever it makes sense.