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The Investment Lifecycle of a Company

Dishen — Mon, 18 Oct 2021 05:29:32 +0000

The following excerpt is from Ross O’Brien’s book Cannabis Capital. Buy it now from Amazon | Barnes & Noble | iTunes

There are countless stories of entrepreneurship that can be traced back to a point in time when the founders wrote out their business plan on the back of a napkin. So many, in fact, that it has become a common trope for describing the ideation and planning phase of a business startup. It’s a great example of how a business is often little more than an idea; it’s so small you can write it on a napkin. And when you have the ability to take that initial napkin idea and develop it into an operating company, the business will grow and change.

At each phase of the cycle, there are specific dynamics that need to be managed and common strategic options and outcomes, along with sources of financing, that are specific to the needs of a company. It’s helpful to understand how companies develop, not only for the purposes of raising capital, but also for managing and building value over time. Here are the five key phases, along with the primary elements and types of financing that make the most sense:

Seed

Company elements: Founders are developing ideas about what the company will be. There are limited resources with no product or service ready, and no revenues being generated. The company is run by the founders and isn’t capitalized to acquire staff or other resources. It’s without contracted suppliers, customers, or vendors.
Types of financing: Equity from founders’ friends, family and angels, and debt from credit cards (founders’ personal resources)

Development

Company elements: The founders are refining the product or services to deliver, along with the operating model. Any R&D and technology development is scoped out and underway. The operational plan is defined, and resourcing requirements have been identified. Early adopter customers are identified and in discussions, but the company is still in a pre-revenue phase.
Types of financing: Equity from founders’ friends, family and angels, and equity from high-risk venture capital

Related: How to Raise Cannabis Venture Capital

Go-to-market

Company elements: The company is generating revenue, but it’s not yet profitable or just at break even.
Types of financing: Equity from founders’ friends, family and angels; debt from credit cards (founders’ personal resources); equity from high-risk venture capital; equity from private equity funds or family offices; bank debt

Expansion

Company elements: The company achieves profitability and meaningful customer adoption.
Types of financing: Equity from high-risk venture capital; equity from private equity funds or family offices; bank debt; strategic financing from corporate partners

Exit

Company elements: When a company has core value drivers such that a buyer will want to acquire it, exit opportunities are pursued, and early-stage risk is largely mitigated.
Types of financing: Equity from high-risk venture capital; equity from private equity funds or family offices; bank debt; strategic financing from corporate partners, access to the public markets

Two important terms that reflect where a company is in its lifecycle are “pre-revenue” and “post-revenue.” These terms are widely used by investors to quickly identify a company’s stage. When a company has demonstrated that it can produce revenue, it implies that there’s a developed market-ready product or service and all the work has been done to get to a point where an external customer is willing to pay money for the product or service.

If a company hasn’t yet reached that point, it’s considered a “pre-revenue company.” Many investors define their investment parameters by stating whether they will invest in pre-revenue companies, meaning whether they are willing to take on earlier stage risk.

A “post-revenue company” will require investment for a completely different set of activities, so using revenue as a benchmark allows investors to quickly characterize what their investment will likely go to fund, what the next set of outcomes will likely be, and in what anticipated time frame they will occur. Companies with revenue are broadly managing how to scale while pre-revenue companies are managing developing products and an organization in anticipation of scaling.

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How to Drive Growth — With or Without VC Funding

Dishen — Mon, 11 Oct 2021 05:42:37 +0000

Is venture capital funding becoming obsolete? As The New York Times reports, some entrepreneurs are starting to reject offers of funding, suggesting that founders are trending away from the traditional VC model.

More than that, we’re seeing leaders in the startup space outwardly express the need to shift focus away from VC funding. Bryce Roberts, co-founder of O’Reilly AlphaTech Ventures, for example, suggests that startups reconsider VC funding or avoid it altogether, while MeUndies founder Jonathan Shokrian urges entrepreneurs to find alternate paths to success.

In my experience as a founder, CEO and investor, I’ve found that the path to success is the middle ground between depending on VC funding and rejecting it altogether. Venture capital is valuable to a fledgling company, but even well-funded startups fail without smart leaders to guide their growth.

Big checks from venture capital firms still offer plenty of appeal. VC funding provides social validation, which helps founders recruit better talent. More money can also extend the runway for companies to find a scalable product-market fit.

But outside funding also means outside expectations. Those same checks that empower startups to scale often pressure them to do so at any cost. High-dollar investments in an immature company can tank operating discipline while founders chase top-line growth despite massive operating losses.

Before jumping at new funding opportunities, founders should step back and consider whether their companies genuinely need more funding or whether continued lean operations would be more effective for long-term growth.

Slow creep of VC dependence.

During my years on the entrepreneurial scene, I have learned to recognize the signs that a direct-to-consumer company is becoming overly dependent on VC funding. It happens in three phases of investment and growth, ending with untenable situations for both founders and investors.

The first phase — a new company acquires a bunch of cash, finds a good use for the money and starts to rapidly grow — is fun. We saw this eight years ago when companies like Birchbox and Warby Parker, among others, had tremendous early revenue growth and a singular focus on scaling channels at any cost. As channels grow, however, companies need even more money to sustain the momentum. Warby Parker, for example, needed to raise another $75 million last year despite its already impressive size.

As the market becomes saturated, we enter a second phase in which once-reliable channels become less capital-efficient. But companies have to keep feeding the machine, because their funding is based on the promise of continued revenue growth. That creates mounting pressure on businesses to scale at all costs. Add to that the difficulty of shifting from a focus on shareholder returns to one on profitability and long-term viability, and it’s clear why Birchbox needed to raise new money and wipe out existing investors last year.

In the final phase, companies are sitting on significant capital raises with no exit in sight. They’ve raised too much capital to slow down revenue growth in their current business model, but they can’t make the leap to acquisition because of inflated valuation expectations from the VCs funding them. Buyers look at the opportunity and pass because excessively pursuing funding has made the business unsustainable.

My company used to prioritize the same things as everyone else, but over the years, I have discovered that lean operating proficiency predicts success better than any other trait. Companies that cannot thrive on a limited budget rarely thrive on a larger one. Efficiency, not comfort, predicts growth. To make the most of your capital, follow these essential tips:

1. Partner up to reach new audiences.

To grow an early-stage business, you need customers — not only active users, but paying loyalists — in order to survive without relying on VC funds.

Audiences don’t fall in love with unknown brands overnight, however. Marketing partnerships can help two brands with common ground grow large audiences on small budgets. Casper, for example, had already become a major brand by 2016, but when it partnered with West Elm, Casper got its products into stores, where consumers could try them in real life.

This kind of partnership marketing, in which one company partners with another to provide mutual benefits and exposure, helped Caspar tap into a large audience of potential buyers. West Elm moved on to Leesa Sleep a year later, but Casper leveraged the limited exposure to boost growth without big spend. It was a partnership that was helped by VC funding, but it allowed the company to build a viable business for the long term.

2. Resist the siren call of rapid scaling.

Companies relying on VC funding are often pressured to shift focus away from their niche and scale in a way that doesn’t make sense. To stay on course, think back to the problem the company originally set out to solve. MailChimp got off the ground when co-founder Ben Chestnut designed an email tool to streamline a tedious process at his old job. Unnecessary funding could have turned MailChimp into another failed marketing agency, but maintaining focus kept MailChimp at the top of its niche.

When you keep scaling as a peripheral goal, you can make building a loyal customer base the center of your strategy. When you build trust and engage customers consistently, you develop loyalists who boost the return on every marketing dollar –just a five percent increase in customer retention can boost profits by 25 percent to 95 percent.

At my company, we discovered that regular content creation provides a cost-effective way to develop affinity within an existing audience. We use news, knowledge and education pieces to build a relationship of trust before we ask for a purchase. Users also provide feedback through content channels, which helps us test new product ideas and take the pulse of our audience. This is only possible, however, if you keep a steady focus on your niche and resist outside pressure to scale too quickly.

3. Foster an efficiency-first culture.

To develop a sustainable business model that doesn’t rely on endless rounds of VC fundraising, make efficiency — and efficient growth — a priority. Hire people who share a vision for efficient growth while keeping a core operating team of leaders who encourage one another to keep the vision on track in the face of temptations to go off-course.

For efficient growth, identify and own repeatable processes instead of outsourcing important functions. Dating site Plenty of Fish could have joined the fray of the dating site boom and abandoned its core values anytime after its founding in 2003. However, by focusing on the fight against spam accounts, Plenty of Fish maintained a good reputation and sold for $575 million to Match Group in 2015.

Extra money always sounds nice — until it causes more problems than it solves. Focus on your core mission, build an audience and invest carefully in the development of the brand’s biggest fans. Investors will always want a piece, but founders who build their companies with limited help get to keep more of the rewards.

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4 Things to Understand When Buying a Business

Dishen — Mon, 04 Oct 2021 05:31:26 +0000

Have you been at a job for a few years, but think you want to be your own boss? One way to achieve this is by owning a business.

You might not have the stamina to start a company from scratch. However, you can buy a business that already has credibility and make it your own.

Before you look for companies to buy, there are some key things to understand. For most, this will be a large investment, so you want to make the best choice. Here’s what you need to know when buying a company.

Seek out businesses that align with your passion

When you decide to own a business, it needs to be about more than just money. You should be passionate about it, so that the work won’t feel like work.

When are you the happiest? Is it when you’re cooking for family, or maybe brewing beer with friends? Perhaps it’s when you’re on the water or browsing unique boutiques.

Whatever it is that excites you, this is what your business should be about. You can own your own restaurant, brewery, marina, or store. When you love what you do, you’ll have more passion, which usually portends better outcomes.

Thoroughly research businesses for sale

Once you determine what type of company you want to own, the next step is to look for established businesses for sale.

Some factors to look for are location, price range, and reputation. Are you willing to travel or even re-locate? Unless you wait for a business near you to go up for sale, you’ll likely have to move around. Think about what you’re willing to do for your new investment.

Next, look at price. What’s your budget? You’ll want to aim for the ideal balance between location and price range. It might be beneficial to wait until these factors align, rather than make impulsive decisions.

When you find a promising company, you should research its reputation. What’s wrong with the business, and how can you improve it? Remember that even when the ownership changes hands, you’ll take on some of these issues.

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Coronavirus Survival Guide for Startups

Dishen — Mon, 27 Sep 2021 11:58:59 +0000

Running a startup company is a damn hard thing. However, in times of crisis, it becomes a question of bare survival by any means. The coronavirus pandemic is a serious crisis, and it will impact your startup. It’s time to switch to wartime CEO.

During the 2008 financial crisis, we were in a similar situation with our startup, kooaba. Actually, when it hit, we were in a due diligence phase with a potential acquirer. They suddenly faced financial challenges themselves and drew back. We ended up running out of cash, and it was impossible to raise any money as most investors stopped all activities. Moreover, we still had to pay the horrendous fees of our lawyers for the due diligence. We faced nine months of bare survival. Thanks to a great team and a lot of luck, we managed to raise the necessary cash at the very last minute to carry on. Kooaba became a success and was acquired early 2014 by Qualcomm and is today part of the AR platform Vuforia.

Cash is the fuel of a company. When a startup runs out of cash, it will have to stop operating and is doomed to close its doors. A crisis is, by definition, “a time of intense difficulty or danger.” Nobody knows how long it will last or how bad it will get. Therefore, startups need to react as soon and as resolutely as possible in order to survive. Now we are in such a situation. The coronavirus kills people, and it will kill companies. Therefore, foremost make sure to stay healthy. Then you need to do everything possible to reduce cash burn and maximize revenue to keep your company afloat until the market gets better.

Here are some options for startups in times of crisis. Some of them we applied ourselves, others I observed in other startups.

1. Reduce cash burn

Stop paying bills immediately. This is the easiest and most short-term measure you can take. Of course, you will have to pay the bills someday — when the situation looks better and the markets recover. However, always pay the social insurance fees for your employees.
Reduce employees’ hours temporarily. If there is a lack of work, you can temporarily reduce or cancel your employees’ working hours in certain countries. Your company only pays a part of the salary and the state compensates for the whole or parts of the rest (in Switzerland it’s 80 percent). The good thing is that you keep your staff. The bad thing is that they work less.
Reduce salaries. This is more a credit from your employees rather than really reducing salaries. Ask your team if they are OK if you pay them less salary for the coming months if you reimburse once the crisis is over. You will need written consent, and it’s a great commitment from each individual employee. Still, you will have to pay social insurance for the full salary. Founders could go as far as reducing their personal spending however possible and put every dollar they have in the company.
For ETH spin-off companies, you might be able to temporarily change the contracts of some employees to ETH contracts. This makes sense for research and postdoctoral stuff. Your employees will have to work for ETH Zurich, but you won’t lose them.
Reduce headcount. This is the last measure, but you might have to take it. Better earlier than when it’s too late. It’s hard to let go of good employees, but they will understand, and if you’re lucky, you can hire them back after the crisis.
Get a job. If you are in an early stage of the company, it’s possible to get a job. I saw this many times when founders took a day job for the sake of the company’s survival. They worked on their startups during their spare time until times got better. If you’re in an early stage, consider looking for a job.

2. Maximize cash influx

Always be closing. If you already have a sellable product and your market is not negatively influenced by the pandemic, focus on sales. I saw companies that put the whole team, including all developers, on sales. Everyone had to pick up the phone and call prospects.
Credit from customers. Ask your customers to pay in advance. This one you can use even if you don’t have a product yet. Take pre-orders. It’s a risky thing, but it’s better than closing the doors.
Start consulting or other activities to drive short-term revenue. If your product is not yet in a sellable state, go for consulting assignments. This might give you the necessary time to survive the crisis.
Sell company assets (computers, machines, equipment) and rent them in the meantime. It’s not much, but it might just give you an extra month.
Startup competitions. Take part in every startup competition where you can win cash. It might take some time, but sometimes you’re lucky and win it just in time.
Bridge round with existing investors. If you already have investors, ask them for a bridge round. Fastest is a credit.
Friends and family round. Explain the situation to your friends and family and ask for their support. Again, fastest is a credit.
Foundation can be a faster source of cash than equity investments.
Bank credits. They might be harder to get now, but they are often easier and faster than equity investments.

Hope this helps to give you one idea or the other. Try everything you can to survive as long as you can. Crises separate the sheep from the goats. Make sure you increase the chances of success with everything you do.

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How the Beauty Industry Has Pivoted Since the Pandemic

Dishen — Mon, 20 Sep 2021 12:09:25 +0000

Since the onset of the pandemic, the course of economies worldwide, along with businesses of all industries and individual livelihoods, took a very sharp and unexpected turn that most were not prepared for, but were left with no choice but to shoulder.

The beauty industry, which was normally considered future-proofed, was hit in its own unique way. Lockdowns, phased reopenings and regulations on social distancing have all caused foot traffic to come to a screeching halt. In turn, brands were forced to get creative or risk losing everything.

Beauty businesses of all sizes ended up making drastic changes to their sales and marketing plans in order to weather the storm and ultimately survive. I spoke with some founders behind beauty brands to gain deeper insights on how they chose to pivot during the pandemic and was surprised to learn that all their approaches were far more than just a quick fix for these testing times. The pivots made way for a “new normal” within the beauty space and sparked a shift in perspective as well.

Increased focus on online communities

What must brands do when their customers can’t physically get to them: digitally reach the customers at scale. Bonus points if the brand is able to radiate positive sentiments.

“Right away, we realized that the value of at-home care and little luxuries was going to go up, so we began showing our customers how our products can help them still create enjoyment despite a trying situation,” says Julie Longyear, founder of Blissoma, a holistic and botanical skincare brand.

Longyear adds that while most of us cannot change the big things going on in the world, we can at least manage our day-to-day lives. A great skincare routine is one of those constants that can dramatically improve our sense of normalcy, grounding and nourishment.

Multiple approaches across multiple touchpoints

If you continue doing what you have always done, you’ll continue getting what you have always gotten. The marketing tactics of yesteryear can no longer be applied the same way. All efforts must be elevated, especially for brands that are launching in the post-pandemic world.

“For us, 2020 was our launch year,” explains Lela Kelly, founder of Volto Urbano, a climate-defense skincare brand. Her efforts were eclipsed by the growing pandemic, and by March, they were completely dead in the water. Seeing that traditional launch channels were closed in a completely unique business-disruption environment, she and her team explored alternatives to penetrate people’s minds, including philanthropy, multiple advertising approaches and original content creation. But, she says, “Despite our best efforts, we were not making a dent. All through the process, we have continued to refine what resonates with our existing and soon-to be customers.”

She then decided to bring on new talents, both internally and externally, to help get the visibility Volto needed. “Over the last 60 days, we’ve made headway through a new PR firm, hiring our own in-house advertising and email-marketing staff,” Kelly reports. “We’ve brought almost all marketing in-house, bringing on recent college grads who just need a shot to prove themselves. Their influx of energy and fresh perspective has vastly improved our social media presence and sharpened our messaging.”

Temporary service pivots for the current landscape

Sometimes, the best move a company can make is by pivoting to an entirely different service, even if temporarily, to cater to the most current landscape. This was seen as clothing manufacturers began making face masks, and when hotels started housing Covid-19 patients and the homeless during the pandemic.

“When the pandemic started, hand sanitizers were impossible to find,” recalls Jasmin El Kordi, CEO of Bluelene, an anti-aging skincare brand. “We quickly created a moisturizing hand sanitizer and sent it to our customers with each product order. We intended to simply help, but ended up making it a permanent part of our product line.”

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4 Pillars of the New eCommerce Frontier Entrepreneurs Need to Embrace

Dishen — Mon, 13 Sep 2021 10:10:56 +0000

History has proven that pandemics and outbreaks have pushed forward the evolution of ecommerce.

In 2003, Alibaba had to quarantine almost all its staff due to the positive SARS diagnosis of one staff member. This period became the incubation period where Jack Ma perfected the Taobao website and launched his first C2C eCom platform. The SARS coronavirus pandemic was a buffer for Taobao and Alibaba as a whole, as they registered immense profits.

During pandemics, online transactions become habitual for a large chunk of the world’s population. The Covid-19 pandemic isn’t much different from SARS, they both originated from China and they have both caused a shift in the e-commerce space.

However, 2020 is about much more than Covid-19. The massive shifts in customer behavior that we have observed go beyond Covid and they are so extensive that they are predicted to become the pillars of the new ecommerce frontier. These are expressions of customer behavior that every new and old ecommerce entrepreneur should take into account in 2021 and beyond.

1. Video marketing takes center stage

Ecommerce Marketing once revolved around text and copy, then it gradually became Image-based, now video marketing is taking center stage as the main medium for on-site marketing for ecommerce businesses.

This was always the destination of on-site marketing and product reviews and in 2021, we just might see it take over the mainstream. Creating the perfect on-site experience is critical to ecommerce businesses’ success and is an important determinant to the final sales numbers.

Product videos are comprehensive in nature without feeling bulky or tedious. They bring storytelling to life while offering a comprehensive view of the product in action and answering customer questions all in one go. When done right Product Videos are a combination of Marketing, Reviews, and Answers to FAQs.

The statistics now tilt overwhelmingly in the favor of video marketing, making it impossible to ignore in the new frontier of ecommerce.

People are 4 times more likely to watch a product video than read a product description
73% of consumers are more likely to go ahead in purchasing a product after watching a video of it in action.
Bounce rate falls dramatically on websites that feature product videos, with the average visitor session time increasing by over 340%
Watching Product videos make consumers more confident about their purchase, according to 52% of shoppers.

These numbers reveal one clear truth, Video Marketing is going to define ecommerce for this decade and probably beyond.

2. Voice commerce has become a defining force

The increased use of voice-assisted devices like Google Assistant, Siri, and Alexa has become a defining feature of many of our lives. In the last 3 years, we have seen the reliance on these systems spread into product searches and even purchase.

This has become increasingly popular, largely due to the increased effectiveness and accuracy of this technology. With Amazon and Google now pushing regional languages, it has led ecommerce businesses to begin to adapt quickly.

It is predicted that 75% of U.S households would have smart speakers by 2025 and that sales via voice commerce will rise to a massive $40 billion by 2022.

The realities of this evolution are clear, ecommerce businesses who have their websites optimized for voice searches will have an increasing chunk of customers fall freely into their conversion funnel.

Ecommerce businesses should begin creating content that increases the probability of appearing in voice searches and should begin offering voice-based in-app and on-site navigation amongst other things. This way, you get your slice of the huge $40 billion pie beginning from 2021.

3. Social shopping and commerce becomes a mainstay

87% of ecommerce shoppers believe that Social Media helps them make a buying decision. This trend is buoyed by the rapid rise in mobile usage and shopping, with 73% of total ecommerce sales predicted to be executed on mobile by the end of 2021.

In 2019 Instagram launched its e-commerce checkout feature. This did not become an instant hit but has gradually grown popular with marketers overtime.

Facebook, Pinterest, and even Tiktok have caught on and are now beginning to integrate or popularize their in-app purchasing capabilities so that customers can buy items without ever leaving the social media app.

4. The rise of AR in ecommerce

If you have used the common silly Snapchat filters or tried to catch a pokemon before, then you have already used Augmented Reality (AR)in some way.

Augmented Reality has existed for a very long time, some even argue before social media, but it is only now coming mainstream and it is likely going to be a defining feature of ecommerce in 2021 and beyond.

A Statista study projects that by 2023, AR technology would have become an $18 billion industry. It also predicts that consumer spending on AR-embedded mobile apps will reach $15 million by 2022.

These are hard numbers, difficult to ignore, especially when we see how it is being used in ecommerce. For example, Sony electronics recently launched the Envision TV AR app as a way to “try before you use.”

One of the major criticisms of ecommerce over the years has been that customers do not get to “experience” the product before purchase. AR will solve that problem.

Ecommerce businesses in the furniture sales space are already launching AR apps or in-app capabilities that allow customers to see a 3D model of the product, check its size, consider the specs , and to fit it in their space and do their interior design virtually before deciding on buying it.

This technology is still evolving in the way it influences ecommerce, but when I consider the speed of its evolution, it’s pretty clear that it is going to trump even Video.

63% of shoppers say that AR would transform their shopping experience. Another 70% are expected to be more loyal to AR-compliant brands as part of their shopping experience.

The evolution of ecommerce is exciting and its potential is huge. However, it does call for staggering agility from ecommerce businesses and brands.

It seems to me that brands who get a head start will enjoy a larger slice of the pie. My advice? Start today to evolve with the trends.

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What Is a Business Contingency Plan and How to Create One

Dishen — Mon, 06 Sep 2021 07:58:23 +0000

Business Contingency Plan Definition

A business contingency plan identifies potential risks to your business and outlines the steps or course of action your management team and employees would need to take to combat them. Risks can include a global pandemic, natural disaster, loss of a key employee, supply chain breakdown, a new competitor, and more. You can think of a business contingency plan as a Plan B or disaster recovery plan. It gives your business something to fall back on in case things don’t go as planned.

In a perfect world, your business would be immune from disaster. Unfortunately, this is not the case. A disaster such as COVID-19 can strike when you least expect it and leave you in a difficult situation. Unexpected events are virtually a guarantee in business.

That’s where a business contingency plan comes in. Just as your business plan helped you launch your business, a business contingency plan can ensure your organization is well-prepared when times get tough. Let’s dive deeper into what a business contingency plan is and how you can create one.

What Is a Business Contingency Plan?

A business contingency plan is essentially a strategy that outlines the steps or course of action your management team and employees would need to take in the event of a disaster. You can think of it as a Plan B or disaster recovery plan. It gives you something to fall back on in case things don’t go as planned.

Without a business contingency plan, you put your business at risk for a great deal of damage and lost productivity. It may be the difference between continuing operations and completely shutting down. Unfortunately, many organizations forgo business contingency plans because they’d rather put all their time and energy into Plan A. They don’t realize that a Plan B will help them achieve success, rather than hinder it.

The importance of a contingency plan should not be overlooked. After all, if your competitor has a strong business contingency plan in place and you do not, who is likely to survive when a disaster hits? Your competitor.

By putting time and thought into your plan, you can overcome obstacles and keep business stable in the midst of a crisis. Not only does a disaster recovery plan minimize the impact of unforeseen events, but it also creates a plan for running your business after the disaster comes to an end.

When Should You Develop a Business Contingency Plan?

Most organizations focus on contingency planning during their annual planning meeting. At this time, they discuss their strategies for success for the upcoming year and identify what risks they need to prepare for. Some organizations, however, prefer to plan for the unexpected throughout the year as they believe it’s an effective way to cope with various issues.

For example, if you notice a new competitor stealing a great deal of your market share in the middle of the year, you may come up with a contingency plan for that particular situation right then. It wouldn’t make sense to wait until the next annual meeting to tackle a problem happening now.

How to Create a Business Contingency Plan

The keys to a strong contingency plan are thoughtful brainstorming sessions and strong research. If you’d like to create a business contingency plan for your business, here are some steps to follow.

Step 1: Consider Major Risks

Think about the nature of your business, the types of products and services you provide, and the customers you serve. What types of events would negatively impact your organization as well as your employees, equipment, and other resources?

During this step, it’s a good idea to hold multiple meetings with your management team and key employees. If you have the funds, investing in a business consultant who can steer you toward the right direction may be worthwhile. Your risks will likely fall into these categories.

Staffing

People are the lifeblood of your business. Without them, you’d have a tough time earning money and meeting your goals. Consider the management team and employees at your organization. Are there specific people that are essential to your business? What would you do if they unexpectedly quit, sustain an injury, or pass away? Is there one person that knows how to do a certain task that nobody else knows how to do?

Technology

These days, technology plays a vital role in any organization. If you’re a sales-oriented business, what would you do if your customer relationship management (CRM) system breaks down? If you offer software development services, how would you operate if a specific program stopped working? Jot down a list of all the technologies and equipment you need to function optimally.

Inventory

Chances are you have inventory you’d like to safeguard in the event of a disaster. If you sell women’s clothing, for example, this may be the merchandise in your warehouse. If you offer a service like home health care, your inventory may consist of stethoscopes, alcohol wipes, and other tools your nurses take on client visits.

Legalities

There are federal and local laws that your business must follow. Consider what they are as well as any potential lawsuits that you may be susceptible to. You may want to consult an attorney to make sure you have all the legalities of your business covered.

Some of the most common examples of risks include:

Your top sales representative quits
A fire strikes
A less expensive competitor enters the market
Your computer system breaks down
A hacker steals your client’s personal information

Step 2: Prioritize Risks

Once you’ve compiled your list of risks, it’ll be time to prioritize them. So how do you do that? Go through each risk on your list and figure out how likely it is to happen. Then, determine how much it will impact your business if it were to arise. The risks that have a greater probability of occurring and have the potential to cause the most damage should be at the top of your priority list.

Step 3: Develop a Contingency Plan for Each Risk

After your risks have been prioritized, you’ll need to develop a separate plan of action for each one. Begin with the top priority risks and make your way down to the ones that are lower priority. Each contingency plan you create should outline what you’ll do to prepare for that risk and the steps you’ll take to keep damage to a minimum.

Here’s a business contingency plan example: Let’s say your business involves a call center and one of your risks is that many employees are likely to call out at the same time. You need these employees on the phones or your business will slow down and lose money. In this scenario, you may prepare by creating a “backup list” of employees who can fill in on short notice.

Your “backup list” employees are people that will gladly pick up an extra shift at a moment’s notice. You’ll have them to call and cover for any employees that don’t show up. By creating a contingency plan for each risk, you can achieve some much-needed peace of mind and alleviate stress when you don’t have all the resources you need to succeed.

Step 4: Share and Modify the Plan

Your business contingency plan is no good if you’re the only one who knows about it. As soon as you’ve finalized it, store in a place that your management team and employees can easily access. Also, host a meeting to present it to everyone and address any questions or concerns they may have. You’ll likely find that sharing your business contingency plan with others opens your eyes to new ideas and insights that can improve it.

It’s important to note that your business contingency plan is not set in stone. Unfortunately, it’s not one of those things that you create once and never touch again. As your business evolves and times goes on, you may identify new risks and solutions for your plan. Set up a time every quarter or year to review and modify your business contingency plan as necessary.

Business Contingency Plan Templates and Examples

If you’re new to this concept and need some guidance, this business contingency plan template can be invaluable. You can use it to create a game plan for each risk that you need to strategize for.

Blank Template

When choosing a business contingency plan template to follow, it can be helpful to pick between a few different visual options. Each template below from Creately offers a completely different visual experience and outlines different examples of business contingency plans. One may work better for you than another based on your business needs and your personal style preferences. Take a look at each template and see which one is easiest for you to follow visually.

Example #1

Example #2

Example #3

Where Does a Business Contingency Fit Into Your Overall Business Plan?

Although a business contingency plan is vital for every business, it’s only one piece of your overall business plan. The other components for your plan should include financial planning, strategic planning, and succession planning. When a business contingency plan is paired with them, you can get a good understanding of where your business is headed.

You’ll find that contingency planning complements your financial and strategic planning. After all, your overall vision may not come to fruition if you don’t have a backup plan. A business contingency plan takes a proactive approach to business management and can allow you to survive just about any crisis.

Business Contingency Plan vs. Business Continuity Plan

A business contingency plan is used to identify any potential business risks and clearly identifies what steps need to be taken by staff if one of those risks ever becomes a reality. A business continuity plan sounds similar in name and like a business contingency plan, aims to mitigate risks to the company. Business continuity plans outline a process that can help a company both prevent and recover from any major threats to the company. Ideally, this type of plan will help protect both staff and company assets in the event of some kind of emergency.

The Bottom Line

While you may not realize the importance of a business contingency plan when things are going well, you’ll be so glad you have one when an unforeseen circumstance arises.

If you’d like to protect the health and safety of your employees and customers, minimize interruptions and financial loss, and be able to resume operations quickly, you need a business contingency plan. In today’s unpredictable economic climate and competitive landscape, having a Plan B is not a luxury. It’s a necessity.

The post What Is a Business Contingency Plan and How to Create One appeared first on Edvysor Blog.

Your Brand Is Much More Than Your Logo. Here’s What Really Makes Your Brand Stand Out to Customers.

Dishen — Mon, 30 Aug 2021 06:42:30 +0000

Branding is one of the most vital parts of growing a business. It’s how you differentiate yourself from your competitors. It’s how you stand out from the crowd, and it’s what your customers feel when they think of you. It’s the promise you make to your customers, and your business’s success depends on how well you fulfill that promise.

Your brand is the exact blueprint of how you will represent yourself to your customers. It’s the manual that tells you and anyone in your company who and what your company is not only from a design standpoint but also, who your customers are, what their wants and needs are, what the voice and tone of your marketing efforts and communication will look like.

Branding is the upstream driver of everything that comes underneath a business’s marketing campaign. It drives culture, tells customers what to expect, and ultimately drives a business to succeed or fail.

We’ve all seen brands change and grow throughout the years. Logo changes, changes in marketing messages, new angles and approaches to delivering a product or service — a brand’s changes evolve and mold to fit different changes in the market. Most brands who’ve stood the test of time use these three ways to differentiate themselves and stand above their competitors.

1. Sell emotions

If you look at great brands, you’ll see trends emerge. A mentor I once sought for advice used to say, “success leaves clues,” and while there is a lot left unseen when you look at large corporations… There are many traceable and tangible variables that can be monitored and valuable information to be gleaned from them. First and foremost is that most brands sell emotions.

Coca-Cola sells happiness. So does McDonald’s. Visa sells the feeling of freedom. Toyota sells freedom, reliability, adventure. Many large brands sell you a feeling and deliver it through service or product. They deliver it through an experience.

Understand what emotions your customers are craving, and you will win your branding efforts. Oftentimes, a business’s marketing campaigns focus too much on delivery mechanisms and not the state the customer will be in once they receive the product or service.

Most customers don’t actually want the specific item, service, or product they purchase. They actually want more safety, security, happiness… or less pain, less stress, less time or effort output, and more results. Most customers’ wants and needs are simple. While attempting to stand out, entrepreneurs tend to overcomplicate things and think that because their mechanisms of delivery for their products are so different from their competitors that their customers care as much about it as they do.

It’s so easy to see a gap in the market and innately rush to try to fill it. As entrepreneurs, we capitalize on the opportunities we see in front of us. That’s the job of an entrepreneur… It’s to see room for improvement in society and then create that improvement.

When you define your brand, you create a container for your business. You figure out what fits into “the box” that defines who and what your business is and who it serves. You understand what it is that you do you and what you don’t do. When you’ve created this roadmap, it allows you the ability to say no to opportunities that will create inconsistencies in your business.

Define your brand, create a consistent message that speaks to your audience’s emotions, and make sure you continually measure any and all new possible products, services, or marketing channels against who and what your brand is. If it fits, run it. If it doesn’t, you’ll know, and saying no will be so much easier.

3. Create Community

Branding isn’t just about messaging anymore. It’s not just about consistency either. It’s also about creating community. The best brands created communities accidentally. For instance, Costco didn’t intend to create a community with their memberships, but you know if you’re a Costco member and you’ve had a discussion with another member that you’ve likely talked about some product or service they have. Maybe you like their gas or their return policies… Maybe it’s the deals on dried mangos (that’s me). I often find myself sharing tips, tricks, or items I have found valuable there… but it’s only relevant to those that have a membership.

You’ll find that communities are created inadvertently by large brands. If you own a Toyota 4Runner, you’re a part of a club that only 4Runner owners can be in. That community of enthusiasts then created more containers for the community online through forums, Facebook groups, and other places to gather and exchange knowledge.

eBay is another great place to look at community building done through forums. If you google nearly anything about eBay, you’ll find that their forums generally dominate the SERP. In those forums, you’ll find sellers and customers collaborating to find answers to their questions.

Large brands create community by their prominence in society. Just by buying a product or service, you signal to others in the world that you are a person who “does things like that,” as Seth Godin would say.

If you buy a Tesla, you signal to the world that you’re forward-thinking. Maybe you like technology, renewable energy, or you just like fast cars? No matter what emotional reason you bought the car, fun, safety, prestige, status… or any other reason, you still signal to the world that you’re the type of person that would buy a Tesla, and you join a silent club of Tesla owners.

Great brands don’t just silently induct you into communities… Great brands create communities and places for their customers and clients to congregate, communicate and create new relationships. Look at Peloton and the gamification and ability to ride in classes with others or look to Literati, the online book club curated by celebrities and thought leaders that allows you to not only get access to the knowledge that has shaped Stephen Curry, Malala Yousafzai, and Richard Branson’s life’s, but you actually get access to a community where you can speak to other book club members and the curators themselves.

This type of community creates 2 powerful psychological processes.

Habituation
Reliability

The post Your Brand Is Much More Than Your Logo. Here’s What Really Makes Your Brand Stand Out to Customers. appeared first on Edvysor Blog.

Get to Know the 3 Types of Influencers

Dishen — Mon, 23 Aug 2021 06:38:58 +0000

The following is an excerpt from Jason Falls‘ Winfluence: Reframing Influencer Marketing to Ignite Your Brand, which will be released Feb. 23 via Entrepreneur Press. Pre-order your copy now via Amazon | Barnes & Noble | IndieBound | Bookshop

In my experience, the average Joe or Jane Consumer breaks down who they are influenced by into three main buckets:

1. People they know.

2. People who are like them.

3. People who are trying to convince them.

The “people they know” group includes family, friends, co-workers, neighbors and anyone else they identify with in their personal and professional life. These are individuals they have a real-world relationship with and trust intimately.

I don’t know my mayor or Oprah personally. They belong in the next group. “People who are like them” can mean they live in the same town; are similar in age, gender or another demographic; or share a common trait like supporting a certain sports team, musician or even product. This group can also apply to celebrities, politicians, media members or other notable individuals they identify with. The trust factor here derives from their sense of identity. They might trust a product recommendation or news, opinions or ideas they share, but they wouldn’t necessarily invite these people to dinner.

“People who are trying to convince them” includes anyone who doesn’t belong in the first two groups and is trying to sell, persuade, convince or otherwise influence them. Trust is hard to come by here. In fact, I would argue that if a consumer develops trust in someone from this group, that person or entity automatically moves into the second group. This is where your business starts from when approaching prospective customers. The trick, then, is to move into one of the first two groups. That’s a rudimentary explanation of what influence marketing is all about.

Let’s assume that you and your brand won’t get into group one. You can certainly stay in group three and settle for interrupting their day to force a transaction down their throat. While advertising can certainly be effective, it is often transactional and costly. But your influence marketing focus should be to make your way to the second group.

This is a powerful reminder that perhaps the most important step in the marketing process is to know your audience. You need to know what people, organizations, businesses or brands they identify with, have an affinity for and trust — and why. That knowledge will be a potent component of your success in achieving that group-two status.

How to align with people like them

What are the possible paths of affinity and trust? If you break down the various people, organizations, businesses and brands consumers tend to trust, you will get a sense of where to find your people with influence. Just as you visualized circles of influence around your brand, look at your target consumers and their circles of trust. According to Jay Baer and Daniel Lemin’s “Chatter Matters: The 2018 Word of Mouth Report,” the following resources are typically considered most trusted:

1. Yourself.

2. Brands you are familiar with.

3. Friends and family.

4. Online reviews.

5. Expert reviews.

6. Discounts or coupons.

7. The media.

8. Advertisements.

9. Friends’ posts in social media.

10. Brands’ posts in social media.

The only caveat is that those answers derived from a question about who people trust for advice and insight when making significant purchases. Even the vaunted Edelman Trust Barometer is biased toward looking at the trust in employers and brands. What we want to understand is who or what resources consumers trust in general.

My hypothesis is that a consumer’s circle of trust starts with our family and friends. We trust them for product recommendations, but we also trust them to babysit our children.

Next, we have peer groups. This might be our classmates at school, the people in our bridge club or even fellow members of a professional LinkedIn or Facebook Group. They have earned our trust over time through conversations and connections.

The next circle out is community members. That could be someone who lives in the same town — you know them, or you know of them — but it could also be fellow professionals in your industry whom you may have met at trade shows or conferences. These people share a set of experiences or values, so they have valuable advice for you. Next come experts and service professionals. This includes your doctor, lawyer, accountant, thought leaders in your industry, speakers at a conference and others with a high perceived level of expertise in the topic at hand. You may not know them personally, but you respect their experience and opinion on specific matters.

Beyond subject-matter experts, you look to trusted members of the media, which I argue also includes people with online influence. Note that I’m not referring to celebrities, who have their own ring further out on our circle of trust. I’m talking about reporters, critics, reviewers and even niche-topic entertainers, whose content we seek out to inform our lives. So if you stumble across Gordon Ramsay cooking a recipe on TV and are influenced by that, he’s more likely categorized as a celebrity. But if you proactively follow Ramsay and all his content online, he would fall more into this category of trusted media and online influencers.

This ring is also where you typically find bloggers and marketing experts trying to subdivide people with influence into smaller groups, like “micro” or “nano.” But remember, with Winfluence you are looking at influence from a broader perspective, not just those who have it on social networks. Don’t get caught up in the classification game. Brands come next in the circle of trust. The goal of that term I dislike — “influencer marketing” — is usually to borrow the trust consumers have in online influencers until you can become one yourself. However, many brands have already earned their customers’ trust through great customer service, solid products, or engaging and useful content, so I’ve given them a ring of their own.

Consumers trust some brands, but they have a harder time trusting the next level: advertisements and what I call “professional persuaders.” Professional persuaders are salesmen, government lobbyists, affiliate marketers and similar individuals whose only job is to persuade you to buy some product or idea. They are not interested in you as anything other than a potential customer.

Celebrities fall outside this ring simply because you wouldn’t trust most of them for qualified opinions on product recommendations and other issues. Research on ads using celebrity spokespeople consistently shows that ads with them are less effective than ads without. Valerie O’Regan, a Cal State Fullerton political science professor who studies the impact of celebrity endorsements on politics, wrote in a 2014 paper that young adults are more apt to listen to non-celebrity individuals when deciding how to vote, for example.

Finally, the outermost ring is for strangers. Few of us would trust a stranger to watch our purse or backpack while we went to the bathroom in a restaurant, but we might choose to try KFC’s new concoction on their recommendation. This underlines an important stipulation about the consumer’s circle of trust: The circles for one person may be different for someone else. Some individuals trust celebrities far more than they trust the media, for example. Some don’t trust brands at all, meaning those wouldn’t even appear on their chart. And, yes, in some circumstances even our own circles change, as the stranger in front of us at the convenience store may just persuade us to buy a ticket for the Powerball that day.

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5 Activities to Improve the Well-Being of Your Team

Dishen — Mon, 16 Aug 2021 07:58:41 +0000

This article was translated from our Spanish edition using AI technologies. Errors may exist due to this process.

Opinions expressed by Entrepreneur contributors are their own.

Activities should incentivize your team and promote their comfort.
More than 51% of companies have offered wellness activities to their teams.
All activities can be done remotely.

With the new home office modality, companies have to know how to play their cards properly, in order to be more productive and profitable, that is, they have to properly manage their production process, apply continuous improvement methods, modernize, and to the extent of where possible, innovate to generate added value that differentiates them from the rest. However, to be successful, it is necessary to prioritize the needs of employees, since they are the basis of any organization.

According to the report ” The Future of Work in Latin America “ , produced by the specialized Human Resources platform, Runa, executives are fighting to increase the benefits for their employees. More than 51% have offered activities that promote well-being in their employees, in areas such as: stress management (63%), physical activity (39%) and financial well-being (35%).

Read: Challenge 2021: How to improve the physical and mental well-being of my employees?

“Regardless of the role they play, all employees are an important part of the gear that makes your company move forward, so it is necessary to establish activities that encourage your team and allow their comfort,” says Courtney McColgan, CEO and Founder of Runa.

McColgan, shares five activities that you can offer to your team remotely, so that they maintain their levels of productivity and satisfaction:

Stress management activities: Yoga classes or relaxation exercises at established times can work to relieve the load of stress, release tension and clear the mind of your work team, use platforms that allow the connection of your entire team , from This way they will be able to interact at a distance in sessions of 10 to 15 minutes.
Physical activities: Inactivity from sitting for 8 continuous hours in front of the computer can reduce physical health, with overweight problems, poor posture and even headaches; Therefore, dance, stretching or muscle strength and balance classes can be of great help to maintain health.
Nutrition activities: The body is the engine that drives us day by day, so a good diet is essential, therefore, providing the advice of a nutritionist who provides guidelines on how to improve your health through proper nutrition will help you to stay healthy and productive.
Financial wellness activities: Workshops or courses that encourage them to maintain good financial health is essential, so their worries about expenses at home will be reduced effectively.
Psychological help: The uncertainty about the future can be a great torment for your team ; outings with friends; the return to the office and the vacations, at the moment are not viable, so it can lead to anxiety and stress. Psychological help these days represents a great contribution to the health of employees.

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