Six Inspirations for Small Businesses From ICON14

WordItOut-word-cloud-394443Entrepreneurs have always been a rare breed. And, as the U.S. employment rate has improved, the overall rate of business creation has fallen from 0.30 percent in 2012 to 0.28 percent in 2013, according to the annual Kaufman Index of Entrepreneurial Activity. All age and ethnic groups experienced declines, except for the 45 – 54 year-old group. Furthermore, according to the U.S. Small Business Administration, over half of all new businesses fail within five years.

So is it any wonder that many small business owners feel like they are isolated, misunderstood and lacking in the guidance and support they need?

Infusionsoft, which develops marketing automation solutions for small businesses with 25 or fewer employees, can relate to this dilemma—and is committed to helping. The vendor not only provides small businesses with effective, affordable solutions to help “attract, sell and wow customers,” but also offers up an abundance of business guidance and support—key ingredients for lasting business success. To quote Clate Mask (@ClateMask), Infusionsoft’s founder and CEO, “I don’t care about big business! We are totally committed to the true small business market—and changing the definition of success for small business owners.”

ICON14ICON14, held in Phoenix last week, represents Infusionsoft’s flagship commitment to help small businesses. In addition to offering attendees the prerequisite tips and tricks to get the best results from its solutions, Infusionsoft provided its 3,000-plus attendees with insights and expertise needed to create thriving, sustainable businesses and achieve work-life balance.

ICON14 featured both entrepreneurial leaders, including Simon Sinek, Seth Godin, JJ Ramberg, Jay Baer and Peter Shankman, as well as its all-star small business customers, to help guide entrepreneurs to beat the odds and create successful enterprises.

These speakers and Infusionsoft executives imparted many pearls of wisdom during the conference (check out the Twitter hashtag #ICON14 for more). But here are a few that really made an impression on me and that I wanted to share.

  1. Develop a positive corporate culture. Most businesses view happy customers as key to success. Yet what are the odds of creating happy customers if you have miserable or just unmotivated employees? As Simon Sinek (@simonsinek) noted in his talk,“Leaders need to set a circle of safety within their organization so their teams can do wonderful things.” Employees who feel appreciated, included and recognized are your best business advocates. See my interview with Infusionsoft’s VP of People, Anita Grantham (@anitakgran) for great ideas on how to build this type of culture.
  1. Establish a system to grow. Entrepreneurs should take advantage of cloud computing’s “no infrastructure investment required” model to help kick-start and organize their businesses for sustainable growth. Small businesses can use technology to enhance relationships by taking the friction out of process and freeing up more time to focus on customers. Systems also enable small companies to scale more easily and maintain better work-life balance. When the owners of Cleancorp (@CleancorpAU), an Australian commercial cleaning service and the ICON14 winner, did everything manually, they had no time for vacation. Since they began using Infusionsoft to automate sales and marketing, they’ve grown the business 575 percent, and the two co-owners took 9 and 13 weeks of vacation last year.
  1. Once you have a system in place, let go of process and let employees do their jobs. As Clate Mask says, business owners need to spend more time working on the business and less time in it. Or as Christian Isquiedero, CEO of Left Foot Coaching and ICON finalist put it, business owners should ask themselves, are they buying you or your process and mission? “You aren’t scalable, but your process and mission is. So build a system to “Verify, Clarify, Document, Teach and Automate.” Let go of the block and tackle, let employees do their jobs and manage what’s going on via a dashboard.
  1. Remember the sale starts with “No.” Small businesses that succeed follow-up regularly with prospects to stay top of mind for the next opportunity. Keep connecting with people every day, not only to sell, but to be there when the timing is right, according to Peter Shankman (@petershankman). Personalize communications with emails, offers and campaigns tailored to different prospects’ histories and behaviors. And don’t forget to integrate offline communication—phone calls, events, on site meetings, etc. with online activities to help humanize the business.
  1. Be relevant, brief and write well! Also from Shankman: With so many ways for people to get content these days, you need to find out what your audience wants and how they want it. Make sure you communicate relevant information, or people will tune you out. Remember that attention spans are shrinking; you have just 2.3 to 2.7 seconds to capture someone’s attention, so keep it short and sweet. Finally, learn to write or hire someone who can. Poor writing is a turn off.
  1. Make your sales process a customer service process. Heather Lemere (@salonbusiness), owner of Salon Success Strategies, a marketing agency for salons and spas and ICON finalist, uses strategic lead qualification to reduce high sales costs by eliminating bad leads to focus only on the best prospects. With a smaller but better qualified prospect pool, you free up time and resources to turn the sales process into an educational customer service process, which in turn helps close more business.

The wisdom, camaraderie and energy at Infusionsoft was truly amazing. Not only did it help educate and inspire those of us that are already pursuing our passions as entrepreneurs, but it should also help motivate those who have been tentative about making the leap! Remember, YOU create your own opportunities—don’t wait for an employer to do it for you!

(Disclosure: Infusionsoft covered my travel expenses for ICON14)

 

Agile Self-Ownership: Network Redux’s Growth Story

baroquon_Add_MoneyMany people associate startups with venture capital funding. But, according to a recent Kauffman study, venture capital is the exception, with only 1% of new businesses getting funded by VCs. In addition, many entrepreneurs don’t want to relinquish control and decision-making to investors.

While some entrepreneurs can bootstrap their businesses with their own funds or via bank loans, many startups–especially in the tech industry–need to find alternative ways to fund infrastructure required to build and grow their businesses.

Recently, I had the opportunity to talk to Thomas Brenneke, founder and President of Network Redux about the innovative approach he’s taken to create and grow an “agile self-ownership business” in partnership with Dell.

Network Redux’s Innovator’s Dilemma

nr_logo_300dpiNetwork Redux was founded in 2004. Initially, the Portland, Oregon-based company provided inexpensive, shared web-hosting services for very small businesses. Demand for services was strong, and the business grew. But the market for low-cost services was quickly commoditizing, and according to Brenneke, “becoming a race to the bottom.”

However, as some of Network Redux’s clients grew, they began asking for dedicated hosting services. This offered Brenneke the opportunity to develop new, more profitable business. But it also posed the challenge of funding the much larger capital outlays required to build a dedicated hosting environment for each new client.

Complicating matters further, the timing couldn’t have been worse. It was 2008, and even though Network Redux was profitable and had deals on the table, most banks just weren’t lending to small businesses.

Finally, Brenneke didn’t want to cede control and decision-making to external investors. As he puts it, “We built the business on an outsourcing model from the outset. We didn’t hire a lot of people, we outsourced when possible to avoid debt and interference from investors. I wanted to continue to grow the business, and maintain an “agile self-ownership” model. ” But, Brenneke adds, “I threw my hands up in the air. To execute on these high value contracts, I needed to invest in infrastructure, but I didn’t have a way to fund the investment.

Financing Agile Self-Ownership

Network Redux had been a Dell customer since day one, standardizing on Dell servers and storage. Over the years, Brenneke had formed a strong relationship with his Dell account team. “I looked at Dell more as a partner than a vendor. When I started the company in my twenties, my business experience was limited. I learned so much from Dell about everything I needed to provide strong shared hosting and private cloud services,” notes Brenneke. “I could just pick up the phone and ask, “How do I do this?”, and Dell would teach me. There’s no question that our relationship with Dell helps us provide better service to our customers.”

Brenneke was confident that Dell’s products would continue to provide the cost, reliability, performance and support he would need for competitive, high availability dedicated hosting business. Now, Brenneke decided to share his financing dilemma with Dell. “I explained to my account rep what I needed and why. He connected me to Dell Financial Services (DFS). I had a long conversation with the Dell credit rep, and they looked over my financial statements and business model. For the first time, I had a lender explain to me what they were really looking for when they evaluate loans, and the best way to structure them.”

After due diligence, Dell approved Network Redux for its first, 36-month term loan, tailored to coincide with the lifetime of Network Redux’s client contracts. Four years later, Network Redux has borrowed over $1 million dollars from DFS. “We get the money we need for infrastructure to bring on new clients. As we grow and pay down our loans, Dell raises our loan ceiling, and we keep growing,” explains Brenneke.

Membership Has Its Benefits

dell founders clubIn 2012, the partnership got even deeper. Network Redux’s Dell account manager thought the company would be a good for Dell’s Founder’s Club, a hand-picked group of innovative entrepreneurs. Unlike Network Redux, most Founders Club members are funded by a venture capital or angel firm. However, all Founder’s Club members view technology as critical to future growth, and have significant technology needs. In addition, according to Brenneke, “Founder’s Club members want to be owners, not exiters.”

Members can take advantage of many benefits, such as concierge-level support, expedited shipping, the opportunity to network with other fast-growing startups, and the Dell Innovator’s Credit Fund, a $100M credit financing program. The idea of the fund is to give entrepreneurs access to technology to help fuel growth, while helping them to preserve equity capital for other business needs. Just as important to Brenneke, “We are treated like a global player. We have access to the best and brightest technical and business resources at Dell for advice and guidance.”

The result? This close vendor partnership has helped Network Redux to increase revenues 100 percent year-over-year. As Brenneke puts it, “This is mutually beneficial–Dell wants us to be a healthy business.”

Perspective

There are many ways to fund a startup and one size does not fit all. However, some startups may not even be aware of external funding options beyond traditional venture capital firms and banks. Furthermore, as this case illustrates, non-traditional financing sources may be a better fit for some businesses.

Network Redux’s technology and financing partnership with Dell illustrates that a synergistic financing partner can provide a startup with more than money. The right partner can also provide services and guidance to help young companies better capitalize on market opportunities.

Tech Tidbits for SMBs: Elance

I’ve had several interesting briefings in the last couple of weeks to tell you about. Since I won’t have the time to sit down and write them all up at once, I thought I’d dash them off as individual snippets instead.

First up is this post about Elance. Do you have too much on your to do list? Elance can help you find a contractor to help you get the job done. Or maybe you’re on the flip side of the coin as a contractor looking for work. Either way, Elance can benefit you. Its mission is to provide companies with “instant access to talent” through an online network of contractors and tools that make it easy to find, hire, manage and pay them.

Since my last briefing with Elance, it has grown at an impressive pace. Today, Elance has 1.3 million tested and rated contractors in its fold, and garners about 2,500 new job posts per day. While its original focus was on IT professionals, Elance has diversified to add lawyers, accountants, designers, writers and accountants on its roster.

No doubt that Elance owes part of its growth to the trend we labeled as that of “The Accidental Entrepreneur” in our SMB Group 2012 Top Ten SMB Technology Predictions. We discussed the fact that as unemployment has increased, so have the number of freelancers, contractors, independent consultants and others choosing to go it alone. According to the Census Bureau, small business without payroll makes up more than 70 percent of America’s 27 million companies, with annual sales of $887 billion.

The good news for these solo entrepreneurs is that Elance recently surveyed 1500 small businesses and found that 73% plan to hire more contractors online in the next 12 months. Why? Because it provides them with the competitive advantage they need to get things done faster, better and at lower costs–and helps them to present a larger, more professional image to their customers.

While it’s always tough to take that first plunge to hire a contractor online, Elance provides a community rating system to help you vet potential candidates. Once you select someone to work with, the Elance platform provides tools, such as a workroom with Skype, to help you connect and work together more easily. Real-time time tracking and status updates are built into the system, as are invoicing and payments. Elance also has an escrow process that protects both parties by pre-funding work and releasing payments only when results are approved. And Elance takes care of basic paperwork (such as 1099 forms) to help ensure compliance.

Whether you’re a small business that needs an extra pair of hands, or a solo entrepreneur looking for a new project, Elance could be a great fit.

Seven Daily Inspirations from Dell’s Women Entrepreneur Network Event

Entrepreneurs are a rare breed. Although start-up activity has been on the upswing, just 0.34 of the adults in the U.S. for example (or 340 out of 100,000) started a new business each month in 2009, according to the Kaufman Index of Entrepreneurial Activity. Women entrepreneurs are even more exceptional, accounting for just 29% of all U.S. businesses, as indicated in a recent American Express study.

Small wonder when you delve deeper.  Women entrepreneurs receive less than 10% of all equity financing, relying instead on their own funds, friends and family, loans and credit cards to bootstrap their businesses. Yet, according to Moira Forbes, Editor and Chief, ForbesWoman, women-run companies outperformed male run companies by 28%. In fact, a Babson College study calculates that if women entrepreneurs had access to he same capital as men, they could add 6 million jobs to the economy in five years.

At Dell’s second annual Women Entrepreneur Network Global event, held June 5-7 in beautiful Rio de Janeiro (which I was lucky enough to attend and moderate a breakout session at), the spotlight was on inspiring women entrepreneurs from around the world to break through the gender barrier—and in the words of Cindy Gallop, Founder and CEO, IfWeRanTheWorld—change the ratio.

The event brought together a global all-star team of female business leaders who are succeeding at this mission, along with a fresh crop of aspiring women entrepreneurs determined to beat the odds and create successful enterprises. Featured speakers and panelists included women who’ve founded and funded businesses across a diverse range of geographies and industries.

Many pearls of wisdom were imparted in this highly interactive and engaging conference (check out the Twitter hashtag #DWEN, which drove 12 million social media impressions in 3 days, according to @Dell and @Radian6). Here are seven that really made an impression on me and that I wanted to share.

1.     Failure is an essential part of success. Women are often more likely than men to take failure personally and give up on an idea or project after rejection. As noted by Arianna Huffington, in her live video presentation: “I love taking about my failures more than my successes….think of failure as stepping stone to success…I was rejected by 35 publishers before getting to yes.” And now look at her as the Huffington Post blasts by the New York Times in unique monthly visits.

2.     Take action to make your dreams come true. “When you cease to dream, you cease to live,” is a celebrated quote from Malcolm S. Forbes. Having big dreams is a key ingredient for launching a successful business, and “taking action is what separates entrepreneurs from people with ideas,” as summed up by his great-grand-daughter, Moira Forbes in this video. How true! How many times have you had a great idea and done nothing with it, only to see someone else take that same idea, run with it, and create a fantastic business?

3.     Be curious. Curiosity is what makes Michael Dell such a great entrepreneur, according to Dell’s Steve Felice, President, Consumer, Small and Medium Business. In my humble and unscientific opinion, most women tend to be more naturally curious than men. The anecdotal evidence I’m basing this on is that I know a lot more male know-it-alls than female ones. Harness your innate curiosity to explore, examine and unearth what people want and need to zero in on market opportunities and propel your business forward.

4.     Pitch your business to its full potential. Lots of great advice on how to do this in the two-part Entrepreneurial Incubator workshops. Springboard Enterprises—which has helped over 400 women-led companies raise more than $5 billion in equity financing since 2000—provided terrific insights and feedback for women seeking equity capital. The top takeaways: don’t second guess yourself, learn to sell, go big or go home. Nail your pitch to convey the passion, power and confidence necessary not only for funding, but to seal the deal in business partnerships, customer sales and media opportunities.

5.     Women have to use our talents, not act like men. Women bring a different attitude and approach to businesses. You can be strong, smart and assertive without acting like a man! For instance, trust your gut–if in doubt, don’t!” Certainly great advice whether it’s in your professional or personal life. As Tina Wells, Founder and CEO, Buzz Marketing Group  discussed, cultivate authenticity, not “authenticitude.” Being the best of who you really are is a more winning formula than trying to re-make yourself into an image of what you think you should be.

6.     Fuel your business with technology. Free and inexpensive online services and social media can kick-start your business. Entrepreneurs can use cloud computing’s “no infrastructure investment required” model to get their businesses off the ground. To gain staying power over time, they also need to fully integrate technology with the business to get streamline processes, gain scalability, and sustain market and competitive advantages.

7.     Peer mentorship is as important as getting venture capital.  Many of the women discussed how refreshing it was to be at an event where openness, sharing and constructive feedback was the norm at this event. The highly successful entrepreneurs at DWEN are generous in sharing their time and advice with new entrepreneurs, via one-on-one interactions, social media and angel investing. And we can all swap stories, trade notes and learn from each other’s experiences. Cindy Gallop’s movement to encourage women to demand more women speakers, panelists, etc. at ALL events is another way we can foster mentoring–check out #changetheratio on Twitter.

The wisdom, camaraderie and energy at DWEN was truly amazing, as was this group of women, who live and lead with these inspirations everyday—and serve as an inspiration for all of us, men and women–as we pursue our goals.

(Disclosure: Dell is an SMB Group client and covered my travel expenses for the DWEN event)

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