Market research

So you have a great idea, huh? Good start. I dont know how many times I've heard this... "I have an idea for XYZ - and it's the first of it's kind in the world! No one has done it before!" That might be true, or it may be that you just haven't searched hard enough. You'll find that when courting investors, they want a "No BS" approach on who your competitors are and how you will beat them at their own game. If you tell the investors you have absolutely no competitors - they're likely to giggle and have you move on.

Think about it... Google got funding while having a heap of competitors. Yahoo, MSN, Web Crawler, Ask.com, etc. Although Google was able to get their funding quite easily (I only wish the world were that simple), you can rest assured they knew their competition. Yes, Google is quite the example, but in all reality - they came from nothing, and that's what makes them my prime example for most things.

The point here is that you need to do your research. I mean, really do it! If you don't think you have a direct competitor, you'd better evaluate who your close competitors are. If you are making XYZ widgets, and the closest you can find are XY widgets, then rip apart their business model, price structure, background information, management information and personnel, public records, etc. Find out how they operate, who they have working for them, why they sell what they sell, and then beat them.

I am very competitive, and I heartily believe that business is war. The companies that stay on top are those that crush their competition, utilize their leverage (whether it be size, monetary assets, etc), and overtake their competitors. Everyone loves to hate Walmart. Why? Because they run little mom and pop shops out of business. It's unfortunate, but it's business. Unless mom and pop can compete with inventory and prices, they're usually doomed. Walmart just does it bigger, better, and cheaper than most other companies... that's how the world works, and that's where the small guys get stomped on.

If you think for one second that Walmart, Google, Yahoo, Amazon, Zappos, or any other major player does not keep tabs on their competitors - you are terribly wrong. Even the big boys need to know who is sipping from their Kool Aid. If you sleep, you slip. Take it as a lesson to keep on your toes and know and understand your market and competitors. If you don't... well, you should just close the door and turn off the lights, because it's officially game over.

John Hancock

If you didn't document it, it never happened, right? Right! I have heard horror stories about poor little ol' business partners that get burned, simply because they didn't have documentation in place to protect themselves. Whether you are the owner, a co-owner, a partner - whatever your role may be - you must protect yourself!

How can I do this, you ask? Well, you document and sign everything! Non-Disclosure Agreements do wonders for those of you in business with other interested parties. Likewise, Non-Compete Agreements can save you from an interested party with way too much information. You simply have to protect yourself these days, as everyone is looking to make a buck. Are you really too lazy to draw up a document and risk losing your livelihood? I'm not!

If you do a simple Google search for examples of NDAs or Non-Competes, you will see that they're rather simple documents that can be edited and applied in a very short amount of time. Before I divulge intimate information regarding my business, I require people to sign an NDA. The only time I do not require an NDA is when I am pitching investors. VCs and AIs simply will not sign them. Frankly, they have better things to do than to try and copy your "great idea."

A great example: When I put up a job posting for our Chief Marketing Officer position for Site2Street, I had about 30 applicants. Every single one of them was required to sign the NDA prior to the interview! The easiest way I accomplished this was with the use of an online signatory agent. I use EchoSign (www.echosign.com) and I love them! They offer 5 free signatures before you need to make your account a 'paid account', and their service is just amazingly simple and intuitive. You upload your document, place the signature blocks on the document, sign it, and then it automatically sends an e-mail to the other person to sign the document electronically. It's easy, efficient, and cheap!

Be very careful with whom you discuss important private business information with. Sharks lurk where you least expect them, and you don't want to get bit simply because you didn't have a document in place.

Registering, Forms, Fees, Oh My!

What is the one thing I usually hear from people wanting to start a business? "I don't know how."
Needless to say, I've kicked this dead horse enough. What we will deal with today is how and when to register, what to do with taxes, business licenses, and more.

If I were to describe every type of business entity, it would take pages and pages to show you the pros/cons of each, as well as the regulations and taxation benefits of each. If you need information on each of the types of entities, please do your research before committing!

You will want to look for: Sole Proprietor (the most basic of business entities); Limited Liability Company (I prefer this type, and I have used this for most of my businesses); Partnership; C-Corporation; S-Corporation; Non-profit. A great site for information: About.com - Inc Info

As you can see, there are a ton of options. The biggest point I want to make is - please do not pay some company to file your papers for you! You're paying someone else to file papers that would take you 20 minutes to do. All you need to do is Do Your Research!
I register in Nevada since my principal business is in Nevada - along with all of the benefits that Nevada offers. A lot of people will go with Nevada or Delaware simply because those states offer great benefits to businesses... but you may hit some snags along the way if you decide to incorporate out of state. I personally don't recommend incorporating outside of your current state.

Some basics you will want to cover:
- Business license for your city, county, state
- DBA registration (doing business as) if you intend to do business other than your assigned name
- Business entity registration and members list (if other than sole proprietor)
- EIN tax registration via the IRS

I feel like I'm forgetting something here, so I'll update when I have a clear head! :)

You may find yourself wondering if you should really register with all the appropriate authorities and such. The short answer is YES! When you cut corners, avoid registering with certain authorities, and you try to keep your operation under the radar, then you're setting yourself up for trouble. If you're still lost - I encourage you to look at those legal filing places online, see what they would file for you, and take that information and do it yourself! Why pay someone $700, what would cost you $250 to do yourself?

Know your niche

Let's try a little exercise... Select a topic you are very knowledgeable on. Think about how much you know about that topic. Now think about how much you don't know. Most people believe they're an "expert" or highly-skilled/knowledgeable on at least one topic. That's all well and good, but there is always something more you can learn.

Let's really think about this, and let's say you're an expert on jeans. You know where to buy them at a discounted price (ie: reputable supplier), you know the marketing techniques behind selling them, your target market, price points, when to enact sales, seasonal peaks and valleys, etc. So you're an expert, right? Not so fast.

You may know a lot about those jeans, prices, marketing techniques, target market, price points, etc... but do you know where the jeans originated from? Do you know from who your supplier purchased them? What materials they're made from? The cost to make them? I can keep going here, but you get the idea.

When you think you know all there is to know about a certain product or niche, you need to ensure you find out even more. The more you know about your niche, the better off your company will be. I strongly believe that you can never know enough about what it is you're selling, because knowledge truly is power.

You may say, "I don't need to know the background behind my product... I just need to know enough to push them out the door and put money in my pocket." Sure, you can take that approach, but your competitor did a little more research than you, and the knowledge he's gained has enabled him to outsell and outperform you. Now it's only a matter of time before he researches your business and puts you out on the streets... all because you were too close-minded to do your homework.

Business is do-or-die, life-or-death. It's the difference between being independent and working to make someone else richer. The more you know, the higher you'll fly. The less you know, the deeper you'll sink.

Business networking and relationships

This is one of the topics I'm most passionate about! Meeting business associates, interacting with other business owners, leveraging contacts to enhance your bottom line... it's all fun! A lot of people think of building a business, but they just don't know where to begin when it comes to finding suppliers, distributors, competitors, allies, and associates in general. It's unfortunate, because all you have to do is make that first phone call or send that first e-mail.

I'll tell you a little story about how I began my first business... I was 14 years old and I was quite the computer geek. I loved designing websites and I wanted to make money doing it. I went ahead and searched around (we didn't have Google at that time!) for a website that looked outdated, or simply needed a revamp. I stumbled upon a site called "CarAudioSecurity.com" (I'm sure it's changed owners since I designed it), and I shot the owner an e-mail. I told him I thought his site could use a revamp, product database, content management system, and a few other goodies to enhance his web presence.

I told him a new site would cost him $2,000... he said he could only afford $1,000. I said ok, let's go with $1,000 and you give me all of your dealer prices on the products you stock. My first deal was a success! So here I had cash and a nice "in" for a subsequent venture. At this time in my life, all the kids were looking for nice stereo systems for their cars. So what did I do? I sold car stereos, speakers, subwoofers, and other accessories to local kids. The decks you saw at Circuit City for $300, I got for only $90! What a great business, right? Well, I figured I should do the logical thing and build a website... voila, Audio Fanatik was born.

The point here is that I found an opportunity and created something out of nothing, simply by initiating contact with another business owner. Some people call it uncouth. So I say, "What is normal?" Do you know how I got my great dealer prices on other accessories? I made my competitors my allies. My biggest competitor was eBay. I wondered how in the world sellers on eBay could sell items for less than my dealer price... so I asked. I figured if they could sell it for less than my dealer price and still make a profit, I should find out how they were getting it so cheap! I contacted the seller (usually a company), setup a dealer account with them, and I waited. I waited to place an order with them, and I waited for them to make a mistake. That mistake? Send me an invoice or package with their supplier's address and contact information on it. Then I made my move... I called up their supplier and cut them out of the chain... thus going to the ultimate source. It's simply going up the "business food chain" and using the knowledge you gain to your advantage.

There are so many ways to get in contact with fellow business owners and suppliers, it's ridiculous. Facebook, Linkedin, Twitter, blogs, google, e-mail, and the traditional phone call. Need to know who someone is, or how to get around a "gate keeper"? Jigsaw or Lead411 can help with that. There is absolutely no reason why you shouldn't make a phone call or initiate contact to enhance your business presence or personal knowledge. What's the worst they can say? No... and they won't as long as you're cordial and sincere.

I could talk for days about this topic, but I'll conclude it with this: If you're sitting around waiting for something to happen; if you're waiting for your 'big break'; if you're waiting to figure out how to make your first move... you'll never get anywhere. Stop waiting and start doing. Make the phone call. Send the e-mail. Send a friend invite. Do something... because if you don't, well, you'll just be reading my blog wondering what could have been.

Funding, Oh The Fun of Funding

Possibly one of the most difficult, time consuming, and exhausting parts of business ownership is finding viable funding for your venture. You have Venture Capital, Angel Investors, SBA-backed small business loans, Small Business Loans (bank originated), grants (don't be fooled by good ol' Matthew Lesko and his stupid 'grant book'!), and a heap of other red-tape-restricted funding sources. Well, some entrepreneurs have taken it upon themselves to create some 'out of the box' funding sources.

I'll detail a few of the newer funding sources that have been developed recently, and I'll let you take the pick of where you think your time and energy would be best spent. Let's get started...

Kickstarter | www.kickstarter.com
This funding source is for anyone not starting a business. Crazy, huh?! Well, their premise is to help inventors, musicians, artists, and other 'crunchy' sort of enthusiasts garner money for their cause. As you can see from their site, they have some great projects. The disheartening aspect for me... You can't post a project if it's related to developing your business. Womp womp.

Go Big Network | www.gobignetwork.com
Caution when you visit this site... I haven't really made up my mind on this one. One thing I do know, is they charge an arm, leg, and your first born, for a possibility of connecting with an investor. My thought? Sign up for a free account, get your updates of who is in your industry, their name, location, and then google them! Find out who they are, where they invest, their sector, and all the information possible - and contact them outside of the GoBigNetwork!

Preneuraholics Unite | www.preneuraholics.com
I originally found out about this nifty little site from a forum that I frequent. The business owner is a great gal and she knows her stuff when it comes to financing small businesses. She has a great idea, a great concept, but it's having a little trouble taking off. As you may see on the site, my S2S business is on there. I was curious as to how it may fare, so I was able to cut a deal and get my business represented. The traffic for the site is low at the moment, so I'm not expecting miracles, but we'll see where it's headed in the future.


As you can see from the examples I've given, it looks like we're coming into an age where 'community investing' is coming to light. Rather than asking a single investor for funds - there seems to be a community aspect of getting multiple small investors (or "gifters") at a lower individual investment price. Interesting, but again, not really proven just yet.

I'm usually pretty skeptical when it comes to funding for small businesses. I feel that if you have a rock-solid idea, a great business plan, a strong management team, and all the right pieces in place, you have a shot at landing the VC/AI that you really need to propel yourself forward.

I'll leave you with this: I've been developing Site2Street for over two years now. My team and I have revamped our core business model, additional marketing techniques, product lines, services, and all other aspects of the business. We've been through many revisions, and only now am I completely confident that we have the right team in place, along with the other factors, to really land the funding needed. My point is... just because you think you have a great idea, doesnt mean an investor is going to bite. It takes time.

Next up... business networking and relationships! One of my favorite aspects of business!

You are the company you're in

This is what my mother once told me, "You are the company you're in." How absolutely true this statement is. Think about it for a second... all of the phases of your life, the chapters you've closed, and those you've opened. You've been around different types of people, personalities, neighborhoods, work places, etc. Have you ever consciously thought to yourself, "Are these people really my friends? Are they who I want to be associated with? Do they have the same goals as me?"

I have thought about that from time to time, and when I establish that it's time to change my perspective on life, direction of my future, or some other type of introspective babble, I look at those around me.

I consider myself to be a very adaptable person, and I can honestly look around and say that I'm happy with the company I'm in at this time. Over the span of my life, my friends have changed, I've matured, I've grown in various ways, and I've progressed through life with some common goals in mind. To achieve those goals, I need to ensure that I create opportunities to achieve them. In doing this, I have to modify how I live, work, or play. Likewise, in business (and marketing in particular), you have to know who your client/customer base is. What do they like? Where do they work? Where do they play? And most importantly... Who are they?

One of the biggest parts of marketing is: KNOW YOUR AUDIENCE! You really have to tune yourself into the mindset of your target market. To know your customer, you have to think like your customer. To do that, you should go where they go, talk to them, understand them, and really comprehend their needs and wants. Voila. You are the company you're in.

When I started up Site2Street, I needed to know and understand my target market. I went to various online forums to see where those CMOs went to talk, play, and interact. Car forums, marketing forums, yacht forums, networking events in Vegas, etc... I needed to know what they thought and who they were. I'm not saying make "fake friends", rather understand who they are. I have developed meaningful friendships with some of these amazing people and they've been more than willing to help me whenever I need it. I'm not quite the company I'm in, but I'll get there eventually.

2010 and an update!

Wow, so I completely missed any blog post for 2009... who knew?! Time flies when you're having fun... or a baby! I just read my buddy's blog (New Jack Times) and realized I had a blog myself - that I never updated! So here we are, and now I have to find something intelligent to talk about...

How about business? Considering this is "The Biz Addict", it suits the blog, eh? I've come to learn and realize that my family really has an entrepreneurial side to them. My brother, for instance, started his own printing company - Patterson Printing LLC - and he's doing very well with it. I'm helping to consult on some of the business intricacies and graphical/tech side of the house, but he's got one heck of a brain for enterprising his venture.

This leads me to my inquisitive question: Do you think you have an entrepreneurial "brain"? See, I think some people do, but don't realize it. Or they do, but they don't know where to begin. Likewise, there are some people that have no desire to begin a business, and they're content with working to make someone else money. Everyone has their place in life... what's yours?

I met someone about a month ago who has a lot of very good ideas. He just has no idea how to implement them, or where to begin. I am usually very guarded with my experience and business dealings, as I feel it's important to self-disclose only what's necessary in certain situations. I could see that this was a situation where he needed help, so I began to inform him of my past businesses and some of the new ones I've got my hand in. You could see his eyes light up, and the wheels were spinning 100 miles per minute.

That's the type of drive you need, and that's the enthusiasm you need to succeed. If you have ideas, but you don't know how to implement them, all you have to do is ask... or Google it. ;) Trial and error will help you learn and understand more than you know.