Take Someone to Lunch: The Importance of Talking to an Expert Before Starting a New Business

Conversations are very important for people. And this is more important if you are someone who is planning to start a new business. For would-be entrepreneurs, keep in mind that nothing can match the value of wisdom that you could obtain from someone who has experience in the field that you would be entering. Therefore, taking someone to lunch – especially those who have knowledge on what you want to do – is a must if you are thinking about starting your new business.

In the United States, hundreds of entrepreneurs are joining millions who have taken a plunge into the world of business ownership. Unfortunately, however, not everyone knows how to swim.

Perhaps you are excited about what you are planning to do. But are you really ready for this? Ask yourself, do you know all the things that you have to do? If your answer is not a resounding yes, then it’s better for you to take step back and think through things. After all, you would not want to drown, do you?

This is where “taking someone to lunch” comes into action. In the real world, if you don’t know how to swim, you talk to someone who knows how to. You might even look for Continue reading “Take Someone to Lunch: The Importance of Talking to an Expert Before Starting a New Business”

Finding Alternatives to Convertible Bonds

For many startups, convertible bonds (also known as convertible debt) are one of the most common sources of financial support. This type of simple and inexpensive agreement helps entrepreneurs strengthen their companies and prevent it from collapsing immediately after its establishment. Despite its enticing promises, however, there is an apparent negative side to convertible bonds – the presence of debts.

In various articles, several successful entrepreneurs have noted the increase in the number of startups that are burdened with debts because convertible bonds. Perhaps some investors would argue that the bonds are nothing but equity investment. Technically and legally, however, these are still debts which are yet to be converted to equity in a future investment round.

Convertible debt is not an issue in startups that are doing well in the market. However, in bad situations, the bonds (technically, the debt) should not be seen as the company’s savior but rather its possible cause of collapse.

Some well-established entrepreneurs note that the problem with these types of financial support is that it gives the investors the opportunity to call for the debt anytime after the end of the so-called conversion period. Like what was stated, this is not an issue in successful startups. But for those that are facing problems, this might spell the company’s doomsday. Imagine an investor calling for the debt at the time of your company’s struggle to stay in the business – simply unacceptable.

With the increase in the amount of funds funneled into startups across the United States, the problem with the ballooning of debt due to convertible bonds must be addressed. This problem is not obvious in most startups in Silicon Valley. In other areas, however, it is very evident.

With this, company owners should be made aware of the negative aspects of the agreements that they are tempted to accept. In the case of convertible debts, entrepreneurs should consider looking into other possible financing deals such as what some entrepreneurs dub as the “convertible equity.”

While convertible equity has the similar functions of convertible bonds, the former’s difference from the latter is very significant: there is no debt. Convertible equity is the convertible Continue reading “Finding Alternatives to Convertible Bonds”

5 Characteristics Of A Successful Startup

Hundreds, if not thousands, of startups and growth companies are established in the United States each year. And with the rise in their number came the increase of articles that cover every single detail concerning this market. Many of these articles provide tips and other useful information for startup owners. Some articles, for instance, outline things that would-be entrepreneurs must avoid doing. Some, on the other hand, list a number of signs that signal the possible collapse of a startup.

This article is not too different. But instead of showing the negative signs that signal the failure of a company, it opts to enumerate the opposite. Here are five characteristics that signal the apparent success of a startup:

Presence of steady customers

This is very important. Failure to have a steady line of customers who are willing to pay for the products or services spells doom for any company. Thus, before establishing a startup, would-be entrepreneurs are urged to the study their respective markets. Are there enough customers who will sustain the business in the long run? Will the products or services validate the assumptions of the customers about the startup? What will entice the initial customers to return and avail (or re-avail) the products or services?

These are just some of the things that owners must know before starting a company. The point is, the presence of a steady line of paying customers is the most important sign that will signal the success of any startup.

Have clear objectives and strategies

The most successful companies know what they are doing. It’s as simple as that. Startups that operate in panic or simply survive because of instinct will most likely fail. In order to survive and be successful, would-be entrepreneurs must have a solid agenda and a well-thought of strategy. Having a list of objectives, goals, and vision assure that the company will never go astray.

Cautious and Thrifty

The increase in the number of startups and growth companies may be attributed to one thing – the rise in the number of institutions that offer early stage credit or other forms of financial support. Because of the availability of funds, a number of startup owners tend to forget that the one of the purposes of having a company is to earn money. One must never forget that the ability to conserve early stage funds is an important characteristic of a startup that will surely succeed.

 Transparent

It’s understandable for some companies to operate in secret. Coca-Cola and other popular brands, for instance, heavily guard the contents of their respective secret formula or recipes.

And while it is reasonable to keep some things out of the public eye, having too much secret may jeopardize any company. Startup owners must consider the implications of keeping too much from the employees and customers. People tend to get suspicious, especially when there are a lot of question marks surrounding the business. This is definitely not a good way to start a company.

Effective Communication

Finally, companies that exhibit effective communication not only with the customers but also with the employees are bound to succeed. After all, communication is the key to a harmonious working relationship. Owners must realize that communication is not just about sharing positive news concerning the company. It’s also about conversations on problems and challenges that are being faced by the startup. Effective communication in a company, in a nut shell, is about professional people talking about the truth and nothing but the truth.

Unless there are cataclysmic events that would affect the operations of the company, any startup exhibiting these five signs will surely succeed.

 

 

More detailed information and useful advice can be found at Funded.com Created by Mark Favre, it offers expertise and assistance with developing and funding your concept, including a private forum for queries and discussions. If you need access to investors and funding providers, please do check our website.