According to the White House’s Startup America Campaign one of the biggest challenges facing entrepreneurs is getting access to experts. Good advice is hard to come by, so Under30CEO teamed up with GPlus and brought in their database of experts to answer the toughest questions about your business.
This month, if you ask a question in our new forum you’ll have a chance to win $300 to the Apple Store and one hour of free consulting from serial entrepreneur Steve Kaplan who has sold 26 of his 30 companies. To enter: ask a question and email the link to jared (at) under30ceo.com.
Take a look at these 3 Questions Every Entrepreneur Should Answer…
“How do you know when a client is not worth working with any longer?” – Kelsey Meyer, DigitalTalentAgents.com
When I have dealt with similar situations, I usually find that clients are OK once you detail for them how much time is being spent and, rather than being confrontational, try to incorporate them into finding a solution – most people are reasonable and realize you don’t work for free. I start off by detailing how many hours you spend with them. I assume that you are charging on a per project basis, in which case you need to explain that the pricing for that service assumes a certain average amount of time per project. You are happy to spend more time with him, but will need to charge him for that time, or maybe you can agree on how much time you will spend and he will need to work for hiimself on revisions etc. Try to put yourself in their position, if it has not been clear to them how much of your time is “too much” I don’t blame him for trying to get as much help from you as possible. I would expect that once you explain the boundries and willingness to work with him on a fair arrangement it will be OK, especially if you emphasize the value you are delivering.
I have never had a problem with this approach, though some client may grumble and be a little cranky. If they argue with you, you need to stand your ground and say you are sorry, but that is how you need to run your business and you are more than happy to help him transition to another provider and sorry it didn’t work out. I suspect he is not going to find a better alternative and will chose to be reasonable, but you need to take a firm, but positive position. Not sure about your business, but at a minimum this is costing you $, at worst, it is burning out your employees which are hard to replace and need you to look out for them (and will appreciate your doing so).
Good luck!
-Answer from Peter Kemp of Old Greenwich Partners
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“What should be the entrepreneurs (founders) salary when they present the business plan to investors?” – Nuno Dhiren, KapeConsulting
The main consideration is to be reasonable. First and foremost, there is no need to pay yourself the proverbial “$1 a year” salary. Any investor group that requires this is asking too much, and taking advantage of the perception that founders should expect to take a reduced salary given their large equity positions. On the flip side, if you require many times more than you make in your current job, you are probably asking too much.
One trap to avoid is someone telling you that your salary has to be in line with certain “metrics.” Although there probably is a range for founder salaries in early stage startups of anywhere from $60,000 to about $200,000 per year, it truly depends on the particular circumstances. Also, using ratios that may make sense at larger or public companies, such as that “SG&A should be about 15% of revenues” simply do not make much sense in early stage companies.
-Answer from Charles F. McCormick of McCormick & O’Brien, LLP
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“What are some effective ways for an emerging company to create “pre-launch hype”? – Justin Crowe, Dizbe Inc.
“Hype” comes in two forms: Buzz and media. They operate differently, but occationally symbiotically.
Buzz is organic and is generated via people commicating as peers. To generate buzz requires finding people who are passionately involved in your product/brand, then helping them share/communicate with others. This is where Facebook shines as it is all about enabling sharing.
Tagent to this is guerilla and experiential marketing, whereby you generate buzz through visible, local, tangible actions. For a good case study see the company that first included cameras in cell phones and how they used street-marketing to generate buzz (and media).
Media thives on the concepts of controversy, newness and style. If you are launching social media, controversy is not a good option (unless you claim to be a Facebook slayer, which would get some people’s attention). Claims of “new” and “hip” are so overused that you must be truely unique and compeling to get a reporter to bite.
My favorite tactic combines video with beta-users. Creating videos that hint/tease at the differentiation of your business and which your alpha/beta users would share will generate hype. Use it to gather email addresses, then tease them one or two times more before the launch.
-Answer from Guy Smith of Silicon Strategies Marketing
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Win $300 to the Apple Store and one hour of free consulting from serial entrepreneur Steve Kaplan, who has sold 26 of his 30 companies. To enter: ask a question and email the link to jared (at) under30ceo.com.
