David Thomas Roberts's Blog, page 3

Overcoming "Crab Mentality"

I've had my share of detractors in life.You will too.It's so easy for people to be negative about someone else's dreams - especially those that don't have any.Ask any entrepreneur and they will tell you that had they listened to all of those who gave them unsolicited advice about their business idea, startup or invention - they would have never taken the first step to get it off the ground.The very minute you choose to be different, you will be treated differently.  For the ambitious person who has the energy, drive, persistence and desire - anything is possible.Unfortunately for many, those closest to them subscribe to the "Crab Theory" I detail in a chapter of my book, "Unemployable!".You can safely put dozens of live crabs in a bucket with little worry any will escape as the very minute one pulls itself up by their claws to edge of the bucket, those beneath them will latch on to the crab reaching for freedom and bring them down off edge of escape.Unfortunately for many, those pulling you back could be the ones you love the most.  I have seen it time and time again where close friends, family and even spouses work dutifully to destroy the dream of the entrepreneur.Is it jealousy, guilt or some other reason people will try to dash your dreams?  If you succeed, what does that make those sitting on the sidelines of life?Of course, not everyone is destined to be an entrepreneur, but the fact is anyone can be if they sincerely desire to break out from the accepted norms of "getting a good education" and then finding a "good job".A true mentor or someone who loves you won't dash your dreams but will instead support them.There is a big difference between constructive criticism (asked for - but not volunteered).  But, be careful who you ask what.  A family member, however, might be a good resource to test a product or service idea, but if they have never successfully run their own business you should be careful about the advice you solicit from them.Look for people who have the experience, lifestyle and success you want to emulate.  Those are the people in which to seek advice.  Even experienced business owners can sometimes give bad advice, but for different reasons, typically than the "Crab Mentality".Weigh your options and when considering everything, an entrepreneur always bets on themselves.Don't hang around those who bring you back into the bucket!  Learn to associate with those who have positive attitudes about you and your ideas.You too, can escape that bucket we call the accepted norms of society.Go for it!If  you have a business idea, visit my websitemy websiteand sign up for updates  to my blog.Get 40% off of my book Unemployable!  VisitDefiance Press and Publishingand use promo code RENEGADE.

Can Your Hobby be a Viable Business?

It depends.Remember this always - "Entrepreneurs bring value to an idea."One of the most common types of startup businesses is when someone decides they want to make their hobby into a business.But let's be clear here.  Not all hobbies translate well into a business that creates an income.  I always advise fledgling entrepreneurs to follow their "interests", which may not exactly be a hobby.For instance, if my hobby was collecting sewing thimbles or drink shot glasses from all over the world - that may make for an interesting hobby but it's doubtful I could get anyone to invest in it.The great thing about business principals is that you can apply the same questions to a bootstrapped startup as you can a major startup funded by $10 million from a venture capitalist.Ultimately, who is your customer?  How do you acquire/market to those identified customers?  What is your profit on each unit or service sold?  Do you have enough capital to sustain the business?  What makes your business unique or why would someone buy your product or service as opposed to your competitors?Few people have hobbies they can convert to a stream of money, but more people can turn their "interests" into businesses.  For me, telecom technology was not a hobby but it definitely was a business interest.If you have an interest or hobby you believe can be turned into a business, ask yourself the questions posed in the preceding paragraphs.  If you can articulate clearly how turning this hobby or interest into a profitable business, then you have a plan.Many people use their business interests so they make enough money to pursue their hobbies. The business interest was a means to end, to pursue traveling or collector rare cars, etc.If you believe you have a hobby that would translate into a business, then go for it!Never lose sight of the fact that your dreams of pursuing your own business are yours - and do not be sidetracked by detractors, provided you have a well-thought out business plan and the perseverance to see it through!

What an Investor is Looking for in a Business Plan

The emergence and popularity of the TV show "Shark Tank" has helped to crystalize the thought processes used by potential businesses to evaluate investment opportunities in early stage or start-up businesses.I've received business plans on a napkin (really!) and business plans that are hundreds of pages.It's really quite simple to grab an investor's attention with the right mix of quality information about your business or start-up.First, we need to clearly understand what it is the business does?  Can this be described in a few sentences?   If not, work on it.  Secondly, does the business have any revenue or profits yet?  If it doesn't it certainly isn't a deal killer for me personally, but my focus is on startups whereas many investors focus on later stage funding.  Revenue and profits help however, because it demonstrates there is at least "some" demand for the product or service and there is "some" evidence you can deliver it.Next is how much are you looking for?  I'm not a bank, so a deal that involves straight debt (repay with minimal interest) doesn't excite me.  There is a very high risk in start-up venture funding, therefore, even if there is a debt repayment component it has to include some equity.Be very clear how much of the company you are willing to exchange in equity for the investment you are seeking.  If you watch "Shark Tank", you will see where most entrepreneurs fail on this point. They simply overstate the valuation of the business making an investment by an investor impossible.   The challenge always with a startup is to assess "potential" valuation without any existing revenue or profit.  This is why projected revenue & profit forecasting is important.  Projections forward like this are called "Pro Forma Financials" and come with certain assumptions which much be carefully thought out.  The less proven revenue you have the more equity will have to be offered to get the desired investment.Many times I get quoted certain figures an entrepreneur wants for an investment in his or her company but can't tell me in detail how they would use those funds.  Many investors will want proof that any funds were spent on the mutually agreed use of those funds. Deals that involve salaries to the owners immediately as any part of the use of funds will typically kill my interest.  In many of my ventures I never took a salary during early startup periods.  I'm rarely excited about someone quitting their job to go full time in their new venture without proven revenue, otherwise the owners' financial problems start to impact my investment and increase the rate of failure.  Have a demonstrable plan on how YOUR finances stay intact during a startup.A definitive marketing plan should be part of any presentation.  An investor needs to understand how customers will find your product or service?  Is there funds budgeted to market properly?  Key strategies with social media, websites, packaging and branding can't be afterthoughts.Finally, I look at the entrepreneur.  Have they had other successes in their life?  It doesn't have to be as an owner of a business but a record of achievement, integrity and reliability go a long way.  Is the entrepreneur stable in their personal life and personal finances?The bottom line?  If communicated properly, a one page document that answers these questions in a concise and succinct manner can be enough for me, as an investor to go to the next step in the process.