Tag Archives: Starting Out

Designer Tip – Getting the contacts you need

Starting out on your own can be an extremely daunting exercise. Top of the list of all things scary has got to be all the people that you know you need to know, but just don’t know: those elusive contacts that can make your business. The buyers of department stores, planners, merchandising, suppliers, and all the other players in the fashion business value chain.

To help finding these people, and importantly, securing their contact details I was told of a super simple and effective trick. Nothing unlawful, just playing the game… (note that this technique can work wonders outside of fashion). It may not always work and it has downfalls, but if you’re being blocked in an organisation it might just be worth a try.

Step 1: Know who you want

Find the company you need an in with. Maybe it is a supplier or large department store in a target market or city.

Look on their website, or online directory for the contact phone number of their HQ.

You want the number that puts you through to reception or equivalent.

Step 2: Call the HQ of above company and ask for the name of the person/ role you are targeting 

a) Call the reception at HQ.

b) Say who you are and where you are calling from.

c) Ask one question and one question only. “What is the name of the [buyer, merchandiser, accounts person etc…]?”

d) Write the name down and thank reception for their time.

 

Why: Reception is often trained to filter calls. They are gatekeepers. If you can’t prove you are someone they won’t let you through. But in the vast majority of case they will give you a name as this does not affect their role requirements.

Step 3: Wait a full day then call back

a) Wait a full day before calling back.

b) Again call HQ (you don’t have the direct contact yet) and tell the receptionist that you were “just on the phone with [Mr/Mrs Buyer, merchandiser, accounts etc…] and the call cut-out. The number didn’t come up on your phone. It was an urgent call and you need to call them back.” you can make up your own story, but you get the point.

c) Again in the vast majority of cases this is enough to clear the requirements of the gatekeeper and either give you the number/ email or put you through to the person. If possible try to avoid being put through. It could backfire if reception puts you through and tells your contact that you were just on the phone to them and you were not. This is a risk of this technique.

d) Call or email the person you need directly. Happy times.

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3 Interview Questions That Reveal Everything

No designer, irrespective of skill set, networks, creativity, or any other born or learned trait can go out in the world and build their brand, their product, their DNA, without help. At some point in time if you’re on the road of a label you’re going to have to employee someone. Alternatively if you’re working within a label there will probably come a time when you need to hire someone.

It is this reality that leads to this post. Sourced from inc.com this is a great little article on some simple, yet (almost brutally) effective interview questions.

Originally written by Jeff Haden, and published Jul 18, 2012. The full article can be found here http://www.inc.com/jeff-haden/3-interview-questions-that-reveal-everything.html

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Interviewing job candidates is tough, especially because some candidates are a lot better at interviewing than they are at working.

To get the core info you need about the candidates you interview, here’s a simple but incredibly effective interview technique I learned from John Younger, the CEO ofAccolo, a cloud recruiting solutions provider. (If you think you’ve conducted a lot of interviews, think again: Younger has interviewed thousands of people.)

Here’s how it works. Just start from the beginning of the candidate’s work history and work your way through each subsequent job. Move quickly, and don’t ask for detail. And don’t ask follow-up questions, at least not yet.

Go through each job and ask the same three questions:

1. How did you find out about the job?

2. What did you like about the job before you started?

3. Why did you leave?

“What’s amazing,” Younger says, “is that after a few minutes, you will always have learned something about the candidate–whether positive or negative–that you would never have learned otherwise.”

Here’s why:

How did you find out about the job?

Job boards, general postings, online listings, job fairs–most people find their first few jobs that way, so that’s certainly not a red flag.

But a candidate who continues to find each successive job from general postings probably hasn’t figured out what he or she wants to do–and where he or she would like to do it.

He or she is just looking for a job; often, any job.

And that probably means he or she isn’t particularly eager to work for you. He or she just wants a job. Yours will do–until something else comes along.

“Plus, by the time you get to Job Three, Four, or Five in your career, and you haven’t been pulled into a job by someone you previously worked for, that’s a red flag,” Younger says. “That shows you didn’t build relationships, develop trust, and show a level of competence that made someone go out of their way to bring you into their organization.”

On the flip side, being pulled in is like a great reference–without the letter.

What did you like about the job before you started?

In time, interviewees should describe the reason they took a particular job for more specific reasons than “great opportunity,” “chance to learn about the industry,” or “next step in my career.”

Great employees don’t work hard because of lofty titles or huge salaries. They work hard because they appreciate their work environment and enjoy what they do. (Titles and salary are just icing on the fulfillment cake.)

That means they know the kind of environment they will thrive in, and they know the type of work that motivates and challenges them–and not only can they describe it, they actively seek it.

Why did you leave?

Sometimes people leave for a better opportunity. Sometimes they leave for more money.

Often, though, they leave because an employer is too demanding. Or the employee doesn’t get along with his or her boss. Or the employee doesn’t get along with co-workers.

When that is the case, don’t be judgmental. Resist the temptation to ask for detail. Hang on to follow-ups. Stick to the rhythm of the three questions. That makes it natural for candidates to be more open and candid.

In the process, many candidates will describe issues with management or disagreements with other employees or with taking responsibility–issues they otherwise would not have shared.

Then follow up on patterns that concern you.

“It’s a quick way to get to get to the heart of a candidate’s sense of teamwork and responsibility,” Younger says. “Some people never take ownership and always see problems as someone else’s problem. And some candidates have consistently had problems with their bosses–which means they’ll also have issues with you.”

And a bonus question:

How many people have you hired, and where did you find them?

Say you’re interviewing candidates for a leadership position. Want to know how their direct reports feel about them?

Don’t look only for candidates who were brought into an organization by someone else; look for candidates who brought employees into their organization.

“Great employees go out of their way to work with great leaders,” Younger says. “If you’re tough but fair, and you treat people well, they will go out of their way to work with you. The fact that employees changed jobs just so they could work for you speaks volumes to your leadership and people skills.”

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Business Tools for Designers – Mastering Negotiation

The following is a great summary of some classic negotiation skills from former lawyer and author Matthew Swyers. During the career f any designer in any market there will be a need to negotiate. Throughout the production, distribution, and sales process, making sure your needs are meet, along with the needs of your various stakeholders will be crucial to success.

Please note this post was first written on inc.com, published 26 July 2012.

Basic Skills

1. Listen

To negotiate, you must learn how to listen and apply what you hear to formulate your next move. Every word has a purpose. Every statement a hidden tell. If you listen carefully, I mean really carefully, you will be able to hear and understand what your opponent in the negotiation truly wants. Listening is the bare minimum skill you must have to start building your abilities as a good negotiator.

2.  Be Willing to Walk Away

When two sides are negotiating, one of the other most basic skills you must retain is the ability to walk away if the deal does not satisfy your requirements. Some may think this is axiomatic, but it is not.

Once I was assisting a friend in negotiating the purchase of a new car. At the end we were close, but the dealer refused to remove some extra charge that was just more fat on the bone for his sales price. After much back-and-forth over this item, we reached an impasse: The salesman would not take it out of the price, and I would not move on him taking it out. I stood up, politely thanked him for his time, and said to my friend, “Let’s go.”

To my surprise, my friend remained seated, turned his eyes toward me, his expression quickly changing to that of a child’s wanting a toy in a toy store, and said, “But I really want the car.” At that point, any chance of continuing to negotiate a better deal evaporated like a puddle on a hot Southern summer afternoon. If he would have stood and walked, we would have never made it to the door before that item was taken off the cost. But by not being willing to walk away, we gave the other side a critical advantage: He knew we would not walk. Always be willing to walk away from a deal, and let it be known in either a subtle or not so subtle manner, as the situation dictates.

Intermediate Skills

1.  Feign Indifference, Don’t be Indifferent

Obviously we care about the thing we are negotiating for, otherwise there would not be a negotiation. But just as we must be willing to walk away from the deal, equally as important is that you must never let the other party know how much you want or need to make the deal.

For example, for anyone who is familiar with my other writings you may recall that I am a trial attorney who has tried hundreds of cases in my career and litigated thousands more. At some juncture during the course of litigation, the parties will discuss settlement. Irrespective of my client’s concerns and directives, I always feign indifference during settlement discussion. Why? Because if the other side ever gets a whiff that you are not willing to try the case, it will have a decided advantage over you in the negotiation process.

So no matter if my client is ready to take the case to the mat or can’t afford or does not want to move forward anymore, opposing counsel gets the same routine from me every time: “We can try to settle the case or just go to trial. I’m good with whatever.” The goal in feigning indifference is to be as difficult to read as a blank page. In the end, however, it is a valuable skill to have in any negotiation. So you may not be indifferent, but never let them know.

2.  Have the Ammunition You Need

In litigation, this is about having your case ready to go to trial if it does not settle and making sure the other party knows you are ready. In other negotiations, such as in real estate, it’s about letting a prospective purchaser know you have another buyer on the line and that if he does not meet your terms, you’ll just sell it to the other guy. In any negotiation that involves an alternative action if the terms are not met, you must let the other party know you can, and will, do a specific act it does not want you to do in the event terms are not met. In short, let the other party know that you have your ammo and are willing to use it.

Many years ago, my then firm represented a man who had been horrifically injured by a product. Our firm was brought in to represent his interests against the manufacturer. Because of certain confidentiality provisions, I cannot mention the product or even the type of product it was. Suffice to say, however, it was the first case of its kind and had significant national exposure on not only a media level but political as well. Well, as in any litigation case, the parties are required to exchange documents whether they are detrimental or not to your case.

We knew that the defendants were holding out on us and saying that these specific very damaging reports did not exist despite the fact we had witnesses that testified to the contrary. We knew if we got our hands on these reports, they would be shaking in their boots. Well, to make a long story short while referencing a great episode from Seinfeld,we employed a special team of people to “retrieve” the reports for us, and “yadda yadda yadda,” we appeared at pretrial with these ultra-damaging reports in hand. The case, one of the most contentious and longest I had ever been involved in, settled minutes later. Why? Because we had the ammo.

So it does not matter if it is litigation, real estate sales with an alternative buyer, or otherwise, always have the ammo—or appearance thereof—to support your side in the negotiation.

Advanced Skills

1.  What Motivates the Other Party? Use It

As a prerequisite, you must always listen. Listening, as stated above, is critical to hearing what the other side wants. But on a higher level, you must strive to understandwhy. What is motivating the why? If you can listen between the lines to understand that which truly motivates the other party, you will gain a decided advantage in the negotiation of the deal.

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From Big Idea To Launch

Written by Áslaug Magnúsdóttir, the co-founder and CEO of Moda Operandi for the Business of Fashion.

In February 2011, I launched an online store — Moda Operandi — with my business partner, Lauren Santo Domingo. Moda Operandi (M’O) was the first of its kind, offering the latest runway styles for immediate pre-order following their presentation at fashion shows in New York, London, Milan and Paris. The site was the result of an idea that I had back in the Fall of 2009 while I was running the premium division at Gilt Groupe: why not allow fashion lovers to buy anything off the runway, in any size offered by the designer, from the comfort and privacy of home? That idea became an obsession that I knew I had to see through to fruition. And I did: Friday last week, M’O announced a Series C round of financing in the amount of $36 million. Investors in the round included venture capital firms RRE, NEA and NAV, as well as strategic investors Condé Nast, LVMH and IMG. Champagne was uncorked. M’O was cemented as a real business.

While celebrating the closing of our latest round, I sat down for coffee with my friend and former McKinsey colleague, Imran Amed, founder of The Business of Fashion.  Imran suggested I write a column for BoF about my experience as a founder and CEO of a fashion startup. Our conversation got me thinking about my career, M’O and how it all came to be. Specifically, what are the key requirements for success as an entrepreneur? Why do some start-ups prosper while others fail? How much of it is a result of planning and skill, and how much is just dumb luck?

There is no perfect script for launching a business and I don’t pretend to have all the answers to these questions. But I do hope that sharing my thoughts and experience over the weeks to come can shed some light on the issues that fashion start-ups face and tease out some lessons learned. And, most important, I hope that my story might help others obsessed with an idea to take the plunge to see it through.

1. SOLVE A PROBLEM, EVEN IF OTHERS ARE ALSO PRESENT

You have heard it before and you will hear it again: a start-up that solves a problem, addresses a need and/or fills a void is one that is best positioned for success. The fact that M’O fills a gap in the market has been one of the key factors that has taken us this far. M’O also is unique in that it is the only business specializing in letting consumers pre-order the latest designer runway styles. But if solving a problem is critical to a company’s success, is uniqueness a requirement as well? Absolutely not. Many examples exist of successful companies that were not the first of their kind. In the online fashion space, Gilt Groupe is a good example of this. Gilt took its concept (selling exclusive fashion at a discounted price through limited-time “flash sales”) from a business previously launched in Europe, Vente-Privée, but shaped the concept to address the needs of a US customer base. And Gilt is not alone: flash sale sites have taken the US by storm, delivering discounted goods and services to customers who crave them. The bottom line is that while filling a void is key, being first to do it is not.

2. ACTUALLY, IT’S REALLY ALL ABOUT THE TEAM

When I started thinking about the concept for M’O, I immediately knew that Lauren was the perfect business partner. We had both worked in the fashion industry for a long time and we had complementary skills. My background was steeped in the business side of fashion, having worked as both an investor and consultant to fashion brands. Lauren’s expertise was in the creative side: a long time stylist and editor, she has an exceptional eye for fashion and deep relationships with designers around the world. We knew that technology was our weak spot, so we embarked on the notoriously difficult task of finding a qualified CTO in New York. Once this problem was solved, we knew we had the key skill sets covered. We could then move on to building our initial website with a small, but highly qualified team of passionate people.

The key take-away? Your initial team is everything. Nail down the key people at the get go who are critical to success and then get going with it. Don’t get bogged down with hiring in non-essentials at the early stages. Outsource other needs or just acknowledge to your investors and partners you aren’t wasting time on those areas now and will address them later.

3. PASSION WILL GET YOU FAR

People often ask me what it is like to be a founder and CEO of a start-up and whether this is a path I recommend. My answer is simple: don’t start and run a company unless there is nothing else in the world you want to do. Being the CEO of a start-up is all consuming. You no longer have weekends, holidays or a truly carefree drink after work. You are on constant alert, thinking about the people who work for you, planning out the future of your company, fussing over every small detail that might contribute to the success (or demise) of your business. The ups and downs are real and extreme. So the one thing you absolutely need to keep yourself and your team motivated is complete and utter conviction in and passion for what you are doing. Anything short of that and your team will smell it, your partners will smell it, your customers will smell it and you will fail.

Years ago, while living in London, a business partner and I spent several months researching and developing a concept for a healthy fast food chain. Despite it being a solid business concept that catered to a real need in the market, it just wasn’t my passion. And when things started to get tough, I didn’t have the conviction to keep myself going. M’O, on the other hand, has captivated me from the day I picked up the phone to call Lauren. With that kind of love for our company, I am motivated to wake up every day to nurture and grow the company.

4. LIKE IT OR NOT, CASH IS KING

At the risk of stating the obvious: you might have a wonderful business idea, but unless you are independently wealthy or able to convince someone else to fund your idea, it is unlikely to go much further than the drawing pad. Raising money is like most things in life, an acquired skill that requires practice and dedication. When I moved to New York in 2006, I started an investment company, TSM Capital, with retail legend Marvin Traub. TSM invested in fashion brands, such as Matthew Williamson and Rachel Roy, and I spent a good deal of time (and heartache) raising capital for early stage fashion companies. This was an extraordinarily difficult task, as many investors were not comfortable assessing the competitive advantage of individual fashion brands. I had to hone my fund raising skills by learning the do’s and don’ts of selling brands to investors: what motivates them, what scares them. That learning was critical during M’O’s fund raising process and we have been blessed with the ability to access capital to fund our growth and development, having raised nearly $50 million in under two years. Without this money — and without knowing how to raise money — the beautiful idea behind M’O would have stayed a sketch on the drawing pad.

5. LIFE IS ALL ABOUT TIMING

This lesson is may be the hardest. Timing is everything, too. Some ideas are great but they are just too far ahead of their time and they fail. Some ideas are great but they arrive at the party too late and they fail. This is as true in the online fashion world as anywhere else. Gilt got its timing completely right, launching just when the economy was experiencing a significant downturn and full price luxury sales were suffering heavily. As a result, Gilt’s business, selling discounted fashion merchandise from previous seasons, was an instant success.

At M’O, we knew our time was now. We saw the writing on the wall. Consumers were demanding online access not just to commodity products from Amazon but luxury goods from designers. With the economy rebounding, we worked hard to get to market fast — even at the expense of making mistakes along the way. As a result, M’O has been able to generate the sales and financing required to put the company in a unique place. In short, while you can’t time everything, do your homework to determine the right moment for your idea. Once you see that wave coming, paddle as hard as you can to catch it. There might not be another big one on the horizon for some time.

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The Business Plan Is Your Roadmap

This article is a blatant copy and paste job from The Business of Fashion but upon reading it I thought it was such golden information I had to drop it here for future reference.

Written by Áslaug Magnúsdóttir, co-founder and CEO of Moda Operandi.

NEW YORK, United States — Early stage entrepreneurs often ask: is a business plan really that important or can you get away without one?

The quick answer is: yes, it’s really that important, and, no, you cannot get away without one. If you’re looking to third parties to raise capital, they’re understandably going to want to see a plan for what you want to do and how their money is going to be spent, with some very specific topics addressed along the way.

Certainly, there are exceptions to the rule. Friends and family sometimes just want to fund your business no matter what, or maybe you’ve found an angel with such an understanding of your concept that a plan isn’t necessary to get the checkbook out. My partners and I at TSM Capital sometimes invested in fashion brands that did not have business plans, but did have management teams with very clear ideas about growing the business. But even in those situations, our first order of business was always to sit down together and map out a plan. A business plan, at its core, forces the entrepreneur to clearly articulate the business in writing so that the entrepreneur, key team members and investors all stay on the same page in terms of product, strategy and financial expectations.

In short, you’re most likely going to need a business plan to get funded. And if you’re lucky enough to get funded without one, you’re still better off having one as it will serve as a roadmap for your early months.

So beyond wanting exceptional management to be pioneering a high margin, scalable business that takes advantage of an exploding industry trend, what else are investors looking for in a business plan? Here are a few general rules to keep in mind in terms of the presentation of the plan itself:

Be brief. Professional investors like short business plans, generally no more than 10 pages and certainly no more than 20. Remember that you are catering to a short attention span, since these people see lots of plans. Get in, make your points and get out. Yes, there can be exceptions: The investor deck for Moda Operandi’s last round of financing crept up to nearly 70 pages, since we had multiple investors with numerous requests, and, thankfully, we ended-up being oversubscribed. But honestly, what do you accomplish with 70 pages that you can’t with 20?

Be visual. If a picture is worth a thousand words, in a business plan, a picture might be worth a million dollars. Your goal is to make sure your potential investor understands and is focused on the beauty of your concept and good graphics help convey good ideas. I learned this the hard way: an ex-lawyer and a McKinsey alum, I drowned M’O’s first business plan in a sea of microscopic data, lists and charts with very few pretty pictures. One investor, gasping for air, (who, fortunately, did come in on our Series A) asked whether I came from McKinsey’s German office! Your business plan needs to let investors breathe so they can digest what is going on. I now always balance key data with gorgeous visuals, and I have a brilliant art director who helps create this precise aesthetic.

Be numerical. As you might imagine, financial investors are particularly focused on — you guessed it — the finances. Not only do they want to see financial projections, they want to see these same financial projections twisted and contorted into a baffling array of numerical analyses: P&L projections, cash flows, unit economic analysis, customer acquisition costs, customer lifetime value analysis, conversion funnels, etc. At the risk of jeopardizing the brevity point: the more numbers, the better.

If you want to stick to the 10 page rule, below is a framework that works for most businesses:

Page 1 – The Team. Either start with “The team” or “The summary of the concept” (see Page 2 below). I like to start with The Team because when you’re presenting to investors in person, it makes sense to introduce everyone at the beginning of the meeting. The goal is to give investors a quick summary of the experience you and your team bring to the table. Don’t spend more than a minute on this when presenting.

Page 2 – Summary of the concept. Here you want to give the big picture about your concept before diving into details. For example, at M’O, this was a description of an “online trunkshow service that sells luxury clothes and accessories to consumers immediately following their presentation during fashion week,” plus a couple of other points.

Page 3 – The problem you are trying to solve. This is critical. Why is there a need for your business? What real problems does it solve? What voids does it fill? Investors are going to love to debate this one with you so make sure you really drill down to the specific value add your business provides. M’O example: “Customers can only purchase a small percentage of a designer’s overall collection at traditional retail and often only in a limited number of sizes.”

Page 4 – Your solution to the problem. What is your solution to the specific problem? How does it benefit the various stakeholders (customers, businesses etc.) M’O example: “M’O consumers can order any item from our designers’ runway collections in any size the designer offers, from the privacy and comfort of home.”

Page 5 – The size of the opportunity. This one is also critical. You want the bread baking in the oven and wafting over to the dinner table. While some investors are willing to invest in strategic but financially “small potatoes” opportunities, most VCs are looking to invest in businesses that have the potential to generate hundreds of millions of dollars in revenue. So you need to research and quantify the opportunity and then paint a picture that tells it clearly (and aggressively), i.e. a top down analysis of how big the market is to how big a share your company will take.

Page 6 – Your competitors. Who else has tried to solve the specific problem, or a similar problem, and how have they done it? What makes you unique versus them? How do you position yourself versus them?

Page 7 – Why will your concept succeed. Time to peacock. Why are you good? What is your competitive advantage? What assets — IP, expertise, contractual rights, relationships, technology etc — do you possess that will allow you to demonstrate success? You want to show off here anything that is unique or superior. Don’t be bashful.

Page 8 – Your marketing and customer acquisition plan. Assume in the beginning that you are unlikely to have a significant marketing budget. How are you going to get the word out there about your business without breaking the bank? Think PR, partnerships, customer relationships, social media, etc.

Page 9 – Five year financial projections. Full disclosure: no one has a crystal ball and it is unrealistic to create a perfect (or even near perfect) five year plan for a completely new business. Investors know this, too, but they want to see how YOU think about growing the business; whether you’re really in it to win it. There is no right answer to how you shape these financial projections. Different entrepreneurs have different approaches, ranging from being aggressive (fearing investors will deflate the numbers anyway) to under promising and over delivering (hoping investors will appreciate a conservative tact). Bottom line, the numbers need to look attractive but achievable. You need to show them the money. And if you can’t, then why are you launching this business?

Page 10 – Next steps. Take a deep breath, you’re almost done. Let them know quickly where you are in terms of the product, the team and your timing. “Next steps” is less about what’s on the page and more about how you talk around it: that this is a huge opportunity for investors, that other investors are interested, etc. Remember that fundraising is like dating: honesty is important but go slow. Don’t reveal all of your quirks and flaws on the first date, it is up to the other party to discover those attributes over time. By that point, hopefully both parties will be in love.

 

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Money Tower of Needs

We’ve all heard of Maslow and his tower of needs. Something I penned down today after a conversation with a business owner was my interpretation of the financial needs of a business and it’s owners & stakeholders.

It’s not perfect, but thought it was worth sharing all the same.

Enjoy. EF

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Built to Sell

Here at EF we’re not really about flogging others peoples products, but this one time we felt like this one needs to be out there. Over the weekend we came across a unique business book titled “Built to Sell.”

The book written by John Warrillow is ranked one of the top 10 business books ever written by Inc.com. It explores why a business should be built forever but also always ready for sale, and profiles the story of an advertising agency transforming itself into a sellable business.

This writer personally found it a paradigm shifting read and one that would resonate with almost any boutique or young designer toiling away at building their our  cog in the fashion business machine.

To really understand the implications, reasoning, and steps of making your business sellable you need to read the full story (you can read the book cover to cover in a single day), but below are the core tips of the story.

Follow these to make sure your blood, sweat, tears, passion, and excitement for your design and entrepreneurial zeal are one-day duly rewarded.

 

TIP 1) Don’t generalise, speciliase. If you focus on doing one thing well and hire specialists in that area, the quality of your work will improve and you will stand out among your competitors.

TIP 2) Relying too heavily on one client is risky and will turn off potential buyers. Make sure that no one client makes up more than 15% of your revenue.

TIP 3) Owing a process makes it easier to pitch and puts you in control. Be clear about what you’re selling, and potential customers will be more likely to buy your product.

TIP 4) Don’t become synonymous with your company. IF buyers aren’t confident that your business can run without you in charge, they won’t make their best offer.

TIP 5) Avoid the cash suck. Once you’ve specialised your service, charge up front or use progress billing to create a positive cash flow cycle.

TIP 6) Don’t be afraid to say no to projects. Prove that you’re serious about specialisation by turning down work that falls outside your area of expertise. The more people you say no to, the more referrals you’ll get to people who need your product or service.

TIP 7) Take some time to figure out how many pipeline prospects will likely lead to sales. This number will become essential when you go to sell because it allows the buyer to estimate the size of the market opportunity.

TIP 8) Two sales reps are always better than one. Usually naturally competitive types, sales reps will try to outdo each other. And having two on staff will prove to a buyer that you have a scalable sales model, not just one good sales rep.

TIP 9) Hire people who are good at selling products, not services. These people will be better able to figure out how your product can meet a client’s needs rather than agreeing to customise your offering to fit what the client wants.

TIP 10) Ignore your P&L in the year you make the switch to a standardised offering even if it means you and your employees will have to forgo a bonus that year. As long as your cash-flow remains consistent and strong, you’ll be back in the black in no time.

TIP 11) You’ll need at least two years of financial statements reflecting your use of the standardised offering model before you sell your company.

TIP 12) Build a management team and offer then a long-term incentive plan that rewards their personal performance and loyalty

TIP 13) Find an adviser for whom you will be neither their largest nor their smallest client. Make sure they know your industry.

TIP 14) Avoid an adviser who offers to broker a discussion with a single client. you want to ensure there is competition for your business and avoid being used as a pawn for your adviser to curry favour with his or her best client.

TIP 15) think big. Write a 3-year business plan that paints a picture of what is possible for your business. Remember, the company that acquires you will have more resources for you to accelerate your growth.

TIP 16) If you want to be a sellable, product orientated business, you need to use the language of one. change words like ‘clients’ to ‘cusotmers’ and ‘firm’ to ‘business’. Rid your website and customer-facing communications of any references that reveal you used to be a generic service business.

TIP 17) Don’t issue stock options to retain key employees after an acquisition. Instead use a simple stay bonus that offers the members of your management team a cash reward if you sell your company. Pay the reward in tow or more instalments only to those who stay so that you ensure your key staff stays on through the transition.

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Starting Out

I recently caught up with a young model looking to develop his personal brand with a line of mens underwear in Australia. with the product, packaging, distribution, and first shoots all done and everything ready to roll out, what was left was the finances, and the management thereof, for the business.
Thinking about our conversation I thought that it would be worth sharing some points discussed for anyone out there looking to add some entrepreneurial zeal to design talents. The points below are simply my thoughts on where to start. The very foundation of your finances and business operations / admin. They are by no means exclusive and may vary depending on the legal requirements of certain geographies.
So here they are:
1) What functionality you need from your finances?
Don’t need to know 100%, but have a think. Will you have employees, do you need iphone syncing from your records, cloud based etc… What do you want from them? From there you can look at the type of system that matches your requirements – i.e. Xero vs. MYOB vs. another bookkeeping system.
2) Test.
Play with the software. Both MYOB and Xero will have demo versions you can trial. Check out the look and feel. You need something that makes sense to you. Your Accountant will understand whatever you give them. Importantly you need to know whats going on. Like driving a car you need instruments and dials that talk to you about whats happening at the high level so you can make decisions.
3) Your Account List. 
Your Accounts List is the list of assets, liabilities, income, expenses, and equity within the business. This is the foundation of your finances and like any foundation if you get this solid from the start you’ll be kicking goals. Your Bookkeeper, Accountant, and of course yourself will be able to inform this. Your chosen bookkeeping software should be able to build this account list for you during the setup process. You can then send it to your Bookkeeper/Accountant for feedback and build something tight.
4) Filling in the details. 
This will be everything from your business details, supplier details, customer details, inventory items, setting up the details in the books etc… to your requirements. I would think most of this you could sort out yourself. It’s fairly simple, but of course White Sky or I could help here. This will be a pure data entry exercise. Takes a bit, but if done right it will make your books and business admin simple, efficient and effective.
5) Business Planning
Looking at the income and expenses in the business and analysing cash flow over a period (say the first 12 months) to see what happens if X, Y, and/or Z occurs. What you’re looking for here is choke points. We’re worried about the downsides. See what they could be ahead of time. Know what they are, then monitor via your books to see how your tracking. This way you can see ahead of time whats going on. This can be as simple or as in depth as you like. If you’re starting out it may just be a high level analysis saying ‘OK I’ll need to sell X units to break even in Y months’ etc…
6) Processing, Reporting, and Admin
How will you monitor, process, and report on your business activity going forward. At the very least you’ll need to cover all your legal, tax, and other compliance obligations. You may not need to know how you’re tracking in ‘real time’, but at the very least having tight control over a) who owes you money, b) who you owe money, c) your cash flow, and d) your profitability.
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