Carlton Brown

Getting Businesses to Advertise on your Website

2012-03-15T14:41:00.000-04:00

One question I get asked frequently is: How can I get other companies to advertise on my website? Monetizing your website with ads is a challenging business model. The best way to be attractive to an advertiser is to make sure your website generates more qualified traffic than your advertisers can generate on their own. Still, there are a few ways you can make your ads interesting and available while you're building up your traffic:

Using advertising networks: One way to monetize websites with smaller traffic is to sell your space to an advertising network such as Google AdSense. AdSense provides you with code to display ads created by Google customers that you can place on your site and in your videos. You get a small commission for every click.

Other ad networks include Yahoo! Publisher Network, OpenX and AdBrite.

Pricing your ads based on actions: If you want to sell your own ads without using a network, there are three basic advertising pricing models. Cost Per Thousand (CPM) charges the advertiser for every 1,000 times the ad displays or loads on a page. Cost Per Click (CPC) charges the advertiser for every one click on an ad. Cost Per Action (CPA) charges the advertiser when a click on an ad results in an action such as a purchase or someone filling out a form with an email address.

Generally, actions are the most valuable to an advertiser, followed by clicks and then impressions. Since you are taking more risk by offering a CPA pricing model, theoretically you can make more margin on charging for actions.

For example, an advertiser who makes $100 on every sale might not be willing to pay $10 per thousand impressions or even $.10 per click, but they may be more than willing to pay $50 or $75 per action because they are virtually guaranteed a profit when they receive a sale that results directly from an advertisement.

Working out the math: To get a ballpark idea of how much traffic you'll need to make the kind of money you want by charging for actions, take the average click-through rate (CTR) and multiply by the average conversion rate you think you can get for an advertiser.

For example, the average CTR on display ads is around .07 percent, so you'll need around 1,429 visitors to get a click on one of your ads. If you can convert 5 percent of your clicks into a sale or a lead for your advertiser, you'll need 28,580 visitors to get one sale or lead for your advertiser. The more valuable the sale or lead, the more you can charge for the action.

If you want to charge for clicks, take the average CTR and multiply by the average Cost-Per-Click (CPC) an advertiser is willing to pay. For example, if the average CTR is .07 percent and the average CPC is $.25, you'll earn around $1 for every 5,716 visitors.

Have a question for Carlton about your small business? Contact Carlton Brown & Associates today.

Acquire a New Business in 8 Easy Steps

2012-03-13T15:37:00.001-04:00

Just as we look at products or services in unique ways, so too do we consider starting or buying a company in unique and sometimes unbelievable ways. When considering purchasing a company remember Sun Tzu's quote: "....avail yourself also of any helpful circumstances over and beyond the ordinary rules."

We have had a terrible economy that has wreaked havoc on small business. Many are still operating but are at or near complete failure. How do you put this information to good use? Well if you're looking at going out on your own here is one method.

Talk to CPA's, bank special asset groups and others that are aware of companies in financial distress. Ethically, they cannot tell you the companies to look at, but they can advise their clients that they are aware of people who may be worth talking to.

Within the limits of your focus (industry or company) watch what is going on in the marketplace. Finding a distressed company is not difficult these days, you may be working for one.

Assume you find a company whose banking/lending relationship is stressed. Frequently the bank has moved the relationship to special assets.

Meet with the owner and if there is mutual interest complete your due diligence. Note: Be very careful here and make sure you do a thorough job; I highly recommend working with an A.V.A. (Accredited Valuation Analyst).

Consider an asset purchase. This means that you are not acquiring the company's liabilities except those noted in the purchase agreement; this also means that accounts payable are the responsibility of the previous owner. Have a good lawyer help you with this document.

Recognize if the company's loans are in special assets you will actually need to negotiate the purchase from the bank. That's good news. Banks don't want to be in business other than banking. If they have to liquidate then they will take a bath...pun intended. You may be their salvation.

Banks will likely have completed a provision for loan loss. Meaning they have already written down the value of the loan; in some cases to $0. This creates an opportunity for leverage in negotiating. All you have to do is ask, "Have you already included this loan in your provision for loan loss?" If they have reduced the loan value to $0, then any gain is recovery to the bank. You can frequently make a purchase that includes the company's name, trademarks, copyrights, marketing information, customer base and more for pennies on the dollar.

If the company still has a solid reputation among its customers then you can continue using the company name, renegotiate with vendors who will probably be relieved that you are there and have a ready-made customer base!

From start to finish the process can vary from as little as two months up to six. Most of the companies in distress won't last longer than that. Need additional advice on acquiring a new business? Contact Carlton Brown & Associates today.

Should You Fix a Client Relationship Gone Bad?

2012-03-08T14:52:00.001-05:00

It has happened to almost everyone who has ever been in business -- unfortunately. A client that you have provided outstanding customer service to "throws you under the bus" to his or her higher-ups without bringing the issue to your attention first. What should you do? Try to fix the situation or walk away? Here are my suggestions for trying to repair a shaky customer relationship.

Your first move should be most likely to have a conversation with your customer. Sometimes nuance and certain hints in conversations can be missed. If the person has someone else to answer to, and he or she is on the spot, the person might go into "flight mode" rather than fight for you.

Here's what you need to think about:

Is this relationship a major account that I need to save?

Is this person that I thought I had a great relationship with worth working with? If so, what do I need to do to find out how to help them repair their relationship with his or her superiors?

If I let this go, will it wreck any other relationships that I have in the marketplace? Can I repair them if they do get compromised?

How much revenue do I have to generate if I do let this go?

Businesses are built on relationships. If this relationship was really that strong, would this person have done this? Does he or she have any intention of communicating with you to get things fixed so you can get that business back in line?

Once you realize the value is in the relationship rather than the account revenue, you'll be able to figure out whether or not the account is truly saving. Then you can plan out your actions from there.
Find the value in the relationship and then find the value in the business.

Need additional advice on managing customer relationships? Carlton Brown & Associates is here to help.

4 Tips for Selling your Business

2012-03-06T12:35:00.000-05:00

As a serial entrepreneur, I have started -- and sold -- a number of businesses over the years. But for many small business owners who may be ready to sell their companies, the past few years have been a time to cut unnecessary expenses, make ends meet and to patiently wait for the market to rebound. There simply was no use in trying to sell the business when company revenues and profits were down. Low purchase-price valuations only made matters worse.

But as we enter 2012, financing options are improving for buyers and banks are putting a new focus on lending. So, if you're thinking of selling your business this year, here are four tips to maximize your profit.

Plan Ahead
Like they do for any big purchase, business buyers will do their research before signing on the dotted line. That means it's important for sellers to be ready to demonstrate their business is worth the asking price. Make sure your financial records are in order. Keep a minimum of three years of documents, including tax returns and expense records. These are essential to establish buyer trust in the economic history of the business. Also, be sure to resolve any outstanding business issues. These can include short-term lease agreements, over-reliance on one or a few key customers and any outstanding legal issues.

Don't forget the physical elements of the business as well. Take care of any building improvements such as painting the storefront, cleaning up the distribution facility or re-decorating the interior. The physical appearance is often the first impression a buyer gets, so make sure it's a positive one.

Understand the Market
To set your asking price accurately, you need to know where your business stands in the market compared to other businesses for sale. Overestimating your value can lead to a long and difficult sale process, while underestimating will leave money on the table. Expect an improved selling environment in 2011, but don't make the mistake of asking for pre-recessionary prices.

To determine the right price, find out what similar businesses have sold for or listed for recently. Websites like BizBuySell.com and BizQuest.com allow you to search for similar listings based on factors such as industry, size and location. You can also purchase a valuation report to see detailed information on recent local sales.

Take a look at your own financials as well. If your business' revenue and cash flow have declined, take that into consideration. Buyers will. Don't be fooled into thinking they'll pay you based on business results prior to the downturn. The goal is to set a price that will attract the greatest number of serious buyers and enable you to close a deal at the highest possible price.

Get the Word Out
One way to get a leg up on the competition and ensure the best possible outcome is to hire an accomplished business broker like Carlton Brown & Associates. Check broker references carefully and see if you can find additional references they don't provide themselves.

If you choose to sell on your own then market aggressively. Put together a full marketing plan, including but not limited to getting your listings posted online, in the local newspapers and appropriate trade publications, and networking through friends and family.

Be Prepared To Offer Financing
In today's market, seller financing is essential. While lending from local and national banks will continue to loosen based on the economic stimulus and the Small Business Jobs Act of 2010, banks are still almost universally requiring that seller financing is part of any deal they fund.

That means you'll be required to take a minimum of 20 percent of the sale price in the form of a buyer note that the buyer will pay back over time, with interest. This also means that you'll have an investment in the business even after the sale. The buyer and lender will expect you to participate in a successful transition with the new owner and to help get them off to a strong start.

8 Ways to Drive Away Customers

2012-03-02T12:03:00.000-05:00

The backbone of any small business is its customers, and your most profitable customers are almost always long-term customers. Don’t lose them by making any of the following mistakes:

1. Change too many players. It’s tempting to assume long-term customers love your brand. More often than not they love your employees.

Customers don’t buy from companies. They buy from people—your people.

Since relationships are the lifeblood of a small business, don't rotate salespeople, customer service reps, or key contacts unless you have to. Do everything possible to protect and foster the relationships your employees forge. Employees are rarely interchangeable where strong business relationships with customers are concerned.

2. Treat new and existing customers too differently. Offering discounts or incentives to land new customers is often necessary, but existing customers can quickly resent the fact their loyalty is not rewarded.

Think hard about the carrots you offer new customers and make sure you “reward” existing customers just as much—if not more. Never forget that while new customers create an immediate top-line impact, sales to existing customers typically result in a bigger impact on your bottom line.

3. Focus too heavily on price. Being the low-cost provider is a definite competitive advantage. Good luck maintaining that advantage. Somewhere, someone is planning to steal your customers through lower prices.

Your goal is to provide the best value. Value is an advantage you can maintain through a combination of price, schedule, service, and relationships. If your marketing focuses mostly on price you'll train customers to constantly look for a lower price, both from you and your competition.

Spend at least as much time finding ways to increase value as you do finding ways to lower costs and prices.

4. Push too hard to grow same-customer revenue. Trying to sell more to existing customers is smart, but don't do so blindly. First know what each customer needs and only then try to meet those needs. Never suggest a product or service a customer doesn't need.

And never ask, “Is there anything else we could do for you?” unless you already know the answer and are ready to provide a great solution.

Otherwise you're just pushing, and customers hate being pushed.

5. Accept high employee turnover. While high turnover is a fact of life in a few industries, in most cases employees leave because they aren't treated well.

So do customers.

Unless systems truly drive your business, you can’t expect to have long-term customers unless you first have long-term employees. If turnover is high, find ways to fix it. Otherwise customer turnover will always be high, too.

6. Forget what keeps the lights on. Every business has principal products or services that form the foundation of the business. Every business also has key customers that form a foundation.

Over time key products and services—and key customers—can get taken for granted while newer, sexier, higher profile initiatives get all the focus.

Make a list of the customers you can't afford to lose. Then list what those customers buy. That list is the foundation of your business.

Never forget what keeps your lights on.

7. Reward the wrong employee behaviors. This happens most often in sales, like when commission rates are much higher for new customers than existing customers. If that's the case and I'm a salesman, why should I work to maintain existing accounts when I get paid a lot more to find new ones? That approach only works if your systems ensure someone else takes over the responsibility for forging great relationships with existing customers.

Think about the incentives you provide and goals you set for your employees, and make sure they encourage the outcomes you really want.

8. Make problem resolution painful. Policies and guidelines are great for ensuring that employees comply, but a customer with a problem doesn't care about your policies. She just wants her problem fixed.

Let employees use complaint-resolution policies as guidelines rather than rules. Give employees the freedom to make judgment calls.

Resolving a customer problem or complaint can help your business establish an even stronger customer relationship when you give employees the freedom to make that happen.

Need additional business advice? Contact Carlton Brown & Associates for a free consultations.

5 Reasons I Recommend Meeting in Person

2012-03-01T12:43:00.001-05:00

No matter what industry we’re in, we’re all in the people business. We’ll only be successful if we really get to know our customers and colleagues. Many of my clients are so busy that they now prefer texting to even e-mails or calls. Skype, WebEx and audio calls are convenient and create the illusion we’re actually having a meeting -- but nothing beats the power of a truly personal, face-to-face connection.

What can you learn from an in-person meeting that you can’t from a virtual one? In one word: plenty.

1. You're off the record. In many places nowadays, there are few private offices. Many of my clients work in cubes and can’t have private telephone conversations with me or anyone else. This means that when I talk to them on the phone, I might not get to hear the most important information that they need to share with me. Over coffee or lunch, my clients can let me know more -- with more color -- than they can over the telephone or in an email.

2. Make use of not-so-small talk. Most business conversations are focused on solving a problem quickly and efficiently, while business relationships are built when people take the time to share and learn more about each other. That happens more naturally in person than over the phone or in an email. What cements a bond between people? Small talk about a favorite team, passion for pecan pie, relationship challenges, and the other bits and pieces that make us unique and interesting.

3. Make an impression. One of my clients, a woman, has this down to an art. For example, she started carrying a new handbag. It’s faux croc and dark red. (Yes, I know what faux croc is.) She has received compliments on it from every person she has met with in the past two weeks. Who knew a handbag that a friend had given her would be such a great conversation starter and deliver such a strong personal statement? How do you do that over Skype? If you're a man, consider wearing a striking tie -- anything that makes you stand a part from the crowd.

4. Read the body language. Facial expressions often communicate so much more than words. I find this is especially true during sales calls. You can see confidence, empathy, fear, friendliness, sincerity, even whether someone is going to buy or not, all from their face. The ability to “read” a potential client is a huge competitive advantage for us.

5. Learn where the action is. I find out so much when I visit one of my potential clients in their office. Is the lobby bright and inviting with recent accolades proudly displayed? Do employees seem happy? Is there free juice and healthy snacks in the cafeteria? Brand new Herman Miller chairs in the conference room? Is everyone moving in slow motion or is there a palpable buzz? The environment speaks volumes and may factor into your business proposal or sales meeting. By understanding company dynamics, we can communicate more effectively to meet their needs.

I love new technologies that allow me communicate with others more freely and quickly. But as a business owner, I try to remember customers want to work with someone they can relate to, not just buy from. If you need assistance in getting your small business off the ground or have a question for me, contact Carlton Brown & Associates today.

Starting your Small Business Over

2012-02-29T11:36:00.000-05:00

As an entrepreneur, you face the possibility of your business either being a success or a failure. Many times new business owners have little or no experience, which can lead to declining revenues after a couple of years. But instead of closing the doors on a business that you have sunk your heart and soul into, consider starting over.

Starting over can be smart, but also difficult. There's no set formula that applies. There are a lot of different ways to get there, but nothing is certain, nothing comes without risk and nothing is automatic.

Finding a new manager or someone to run your business is a good idea -- especially someone who is knowledgeable and has experience. But the right person might be hard to motivate, meaning it will cost money, which means more risk. There's no guarantee.

Another good idea is to develop a business plan. A business plan doesn't have to be a big document like a term paper -- it can be a short collection of steps, objectives, projections, market strategy, programs and so on. Most importantly, it can help you take a fresh look and see the business from a different angle.

Have additional questions about starting your small business over over or creating a start-up from scratch? Carlton Brown Associates is here to help. Contact us for a free consultation.

What Makes an Employee Remarkable

2012-02-28T14:55:00.000-05:00

After working with hundreds of employees over the course of my career, I have finally come to realize that there are great employees, then there are remarkable ones. Great employees are reliable, dependable, proactive, diligent, great leaders and great followers ... they possess a wide range of easily-defined—but hard to find—qualities.

A few hit the next level. Some employees are remarkable, possessing qualities that may not appear on performance appraisals but nonetheless make a major impact on performance.

Here are eight qualities of remarkable employees:

1. They ignore job descriptions. The smaller the company, the more important it is that employees can think on their feet, adapt quickly to shifting priorities, and do whatever it takes, regardless of role or position, to get things done.

When a key customer's project is in jeopardy, remarkable employees know without being told there's a problem and jump in without being asked—even if it's not their job.

2. They’re eccentric... The best employees are often a little different: quirky, sometimes irreverent, even delighted to be unusual. They seem slightly odd, but in a really good way. Unusual personalities shake things up, make work more fun, and transform a plain-vanilla group into a team with flair and flavor.

People who aren't afraid to be different naturally stretch boundaries and challenge the status quo, and they often come up with the best ideas.

3. But they know when to dial it back. An unusual personality is a lot of fun... until it isn't. When a major challenge pops up or a situation gets stressful, the best employees stop expressing their individuality and fit seamlessly into the team.

Remarkable employees know when to play and when to be serious; when to be irreverent and when to conform; and when to challenge and when to back off. It’s a tough balance to strike, but a rare few can walk that fine line with ease.

4. They publicly praise... Praise from a boss feels good. Praise from a peer feels awesome, especially when you look up to that person.

Remarkable employees recognize the contributions of others, especially in group settings where the impact of their words is even greater.

5. And they privately complain. We all want employees to bring issues forward, but some problems are better handled in private. Great employees often get more latitude to bring up controversial subjects in a group setting because their performance allows greater freedom.

Remarkable employees come to you before or after a meeting to discuss a sensitive issue, knowing that bringing it up in a group setting could set off a firestorm.

6. They speak when others won’t. Some employees are hesitant to speak up in meetings. Some are even hesitant to speak up privately. Remarkable employees have an innate feel for the issues and concerns of those around them, and step up to ask questions or raise important issues when others hesitate.

7. They like to prove others wrong. Self-motivation often springs from a desire to show that doubters are wrong. The kid without a college degree or the woman who was told she didn't have leadership potential often possess a burning desire to prove other people wrong.

Education, intelligence, talent, and skill are important, but drive is critical. Remarkable employees are driven by something deeper and more personal than just the desire to do a good job.

8. They’re always fiddling. Some people are rarely satisfied (I mean that in a good way) and are constantly tinkering with something: Reworking a timeline, adjusting a process, tweaking a workflow.
Great employees follow processes. Remarkable employees find ways to make those processes even better, not only because they are expected to… but because they just can't help it.

Have questions about starting your own small business or hiring great employees? Contact Carlton Brown Associates for a free consultation.

How To Keep Yourself Motivated

2012-02-27T14:00:00.000-05:00

When you are an entrepreneur, success often takes longer than you would like. If you're not careful, it's easy to become discouraged, and that makes it harder to achieve success.

Here's a simple, seven-step plan to get your motivation back:

1. Define your purpose. Why are you working? Why are you doing this work? Only you can answer these questions. Some individuals are drawn to certain kinds of work, while others are individuals are simply looking for a payday or to feed their families. No purpose is inherently “better” than any other–but you need to know your purpose, so that the prospect of fulfilling of that purpose keeps you motivated.

2. Tie your purpose to your company's goals. Now that you’ve identified why you’re working, deliberately envision your company's offering (what it makes, provides or sells) as the vehicle through which you can fulfill your purpose. The more closely you associate, in your mind, your purpose with your company's product, the easier you’ll be able to motivate yourself to do what’s necessary to get your job done.

3. Tie your purpose to your team's success. If you're working with other people, they're depending upon you to get your job done. Fulfilling your purpose thus helps them become successful too–which means that you're having a positive impact on other people's lives.

4. Create ambitious goals for yourself. Now that you’ve got everything aligned, it’s time to set ambitious goals that, if achieved, will create success for yourself, your products, and your company. Pick exciting goals that will will inspire you to achieve them.

5. Create a workable but flexible plan. Now that you've got goals, create a step-by-step plan that constantly brings you closer to your goals. That will help you build additional confidence, commitment and the feeling that you’re in control of your destiny. Hint: If you aren’t sure how to build a plan that will work, get the help of somebody who’s already achieved what you want to achieve.

6. Take massive action ... starting now. Success is now just a matter of executing that plan, adjusting as necessary to achieve your goals. To start on the right foot, as soon as your write your plan, immediately take some action to achieve that plan. Motivation feeds on action. You want to build momentum that will continue to carry you toward your goal.

The main point here is to do all of this consciously, to make certain that everything in your work life is aligned. If you are losing your mojo or need advice on starting a small business, contact Carlton Brown Associates today.

Motivating Your Employees

2012-02-24T11:24:00.000-05:00

If you are a small business owner, it may feel like it takes you less time to do something than if you were to give the job to an employee. Whether they're freelancers or full-time employees, slow-moving, uninspired workers are the bane of many small business's existence.

How can you get workers fired up and motivated to achieve your company's goals? Here are seven tips:

Hire right. Start down the road to motivated employees by hiring the right person for the right job. Too often, time-strapped entrepreneurs will hire a neighbor or acquaintance because they don't want to sift through a big stack of resumes. Instead, take the time to properly vet candidates. Then, hire someone who is qualified for the job and, more importantly, is a fit with your company's culture.
Offer clear goals. Do your workers know what their top priorities are, and what needs to be done by what deadline? Vagueness is a big motivation-killer.
Manage by walking around. Constantly pop into your various store or office locations with no set schedule. Productivity will stay high, as workers never know when you'll be back.
Share your finances. Many entrepreneurs who have an "open book" policy at their company, where they share revenue, expenses and other financial figures with workers. This transparency can be a big win -- workers feel they're privy to inside information, and they understand exactly how much business they need to get in the door for the company to grow. This makes profit-sharing programs really work, as employees know exactly what it takes to hit the profit point.
Do incentives right. Incentive programs can backfire if they are a way to entice workers to do something that makes them uncomfortable or that they feel is not achievable. Set realistic benchmarks and make sure they are relevant and enticing to your staff, or the program may just lead to more lethargy and inaction.
Build trust. Workers do things for leaders they believe in. To increase trust, admit your own mistakes, show empathy for workers' concerns, and be honest about how difficult it will be to meet your goals. Instead of making pronouncements, listen and involve workers in decisions.
Treat workers like people. Do you know your workers' personal aspirations? Tap into their personal desires, and you will be able to motivate them to excel.

Want to learn more about how to manage your small business? Carlton Brown Associates can help. Contact us today.

Connecting Your Website and Online Store

2012-02-23T13:16:00.002-05:00

One question I am asked often by entrepreneurs who are just starting out is if their website and online store should be connected. A good website exists for one reason: to convert visitors into paying customers. Whether you convert visitors to customers by a link to a separate online store or by driving directions to a physical store shouldn't matter much. What does matter is whether your website content and the user experience work in tandem, making it compelling and easy for visitors to make a purchase.

From an external marketing perspective, separate websites may prove more difficult than one combined website for a number of reasons. First, marketing involves analyzing visitor traffic to see if you can increase the number of visitors who buy while also decreasing the cost of those visitors. If you have two separate websites, you may not be able to effectively track every customer from a click on an online advertisement all the way through to a purchase.

Second, people with purchase intent often demonstrate hesitation when shopping online because they need more information about your company or your products to feel confident enough to go through with a transaction. If your two websites make it challenging for people to go back and forth between watching product videos, reading company information and shopping or adding items to a shopping cart, you may be losing customers.

Third, your two websites may be confusing to search engines. Talk to a search engine optimization (SEO) expert like EntreServ to make sure your websites appear properly in search results and are not being penalized by Google and other search engines for duplicate content.

Have additional questions for Carlton about starting a small business? Contact Carlton Brown Associates today.

5 Ways to Conquer Fear

2012-02-20T11:50:00.000-05:00

If there's one thing I have learned over the years watching other entrepreneurs, it's that most people aren't as successful as they might be, simply because their fear is keeping them from taking action.

Maybe it's a fear of rejection, or maybe it's fear of failure. Maybe it's fear of doing the wrong thing, or fear of the boss, or a customer. The end result is the same: You don't take the risks necessary to make yourself successful.

This is not to say that being completely fearless is a good idea. Fearless people do stupid things; as the saying goes, they "rush in where angels fear to tread." When it comes to fears, the trick is to understand them, know why they're there–and then overcome them when it's necessary to take action in order to achieve your goals.

There are five basic ways to do this:

1. Increase Your Familiarity

The more you do something that scares you, the easier it becomes. Take, for example, the most common fear for people who are selling: fear of closing. Treating a sales cycle as a series of small closes makes closing the deal easier when it's finally time to ask for the business.

2. Rehearse Courage Mentally

When it comes to emotions, including fear, your brain can't differentiate between what it imagines and what's actually happened in the real world. If you repeatedly rehearse something in your mind, while at the same time visualizing yourself as being calm, confident and collected, your behavior in the real world will imitate your imagination.

3. Reframe the Fear

Create a comparison in your mind that makes your fear seem trivial. For example: There are millions of people in this world who have to worry about whether they're going to eat today. Against that perspective, what have you got to be afraid of? I mean, really?

4. Reassociate the Fear

Ever been to a Six Flags amusement park? If so, you probably paid a fair amount of money ... for the privilege of being frightened out of your wits. Taking risks in business is, in fact, a lot like getting on a roller coaster — except that you get to do some steering, so you're actually a bit more in control. It turns out that fear you're feeling isn't really fear after all. It's excitement!

5. Make the Fear Useful

Far from being a debilitating emotion, fear–when viewed from the right perspective–is actually just a signal that you need to do something. If you're afraid to ask for the business, for example, it's just your subconscious mind telling you that it's getting close to the point where you need to ask for the business. It may sound trite, but it's true: "Feel the fear, then do it anyway."

Put the above techniques in your mental bag of tricks, and your fears—no matter what they are—will stop holding you back.

On extra hint: These techniques are best applied in combination. For example, here's a specific routine that I have seen work for many people:

I notice that I'm putting something off because of a fear that it won't happen.
I reconfirm that the goal is worth pursuing.
I "remember" that the fear is just a signal that this is a desirable goal.
I feel grateful that I have the opportunity to achieve that goal.
I briefly think about all the things that I don't have to be afraid about.
I recall all the times that I've overcome similar fears.
I imagine myself taking the action that I've been putting off because of fear.
I repeat the above step five times, visualizing a successful outcome.
Finally, I use the momentum of all of the above to push me forward.

If fear is keeping you from starting your own business or you need help getting your idea off the ground, contact Carlton Brown Associates today.

7 Ways to Free Up Cash

2012-02-17T15:20:00.000-05:00

As a small business owner it's easy to get caught up in the day-to-day minutae of running a company and forget about the financial side of things. But what if you need cash to grow your company? Here are seven ways you can free up cash that you already have:

1. Read your credit card agreements. If there's something you don't understand, now is a good time to dial up customer service and ask for clarification. Sometimes the answers are obvious--but sometimes they're not.

2. Check your service levels. Are you still paying for a gym membership you no longer use? Forking over a fortune for deluxe cable TV when you mainly watch Hulu? Go through your monthly bills and cancel the services you don't need.

3. Ask for lower rates. As you review your bills, pick up the phone and ask (politely) for a discount. It takes only a few minutes to call the cable company, and they just might cut you a break. But remember: You always have the right to ask for a discount, but it's not your right to receive one. If the answer is no, don't be a jerk. Thank the representative and move on.

4. Optimize your bank accounts. I had a friend who for 17 years was an account holder at a large national bank. He paid an $8 service charge every month, yet received terrible service and earned no interest. Eventually he wised up and switched his checking account to a local credit union and moved his savings to an online high-yield savings account. You should, too. To find the best deals, check out Bankrate.com or MoneyRates.com.

5. Inspect your investments. Examine investment balances and asset allocation to ensure that things are going according to your investment plan. Don't have an investment plan? Start by reading a good introduction, such as Burton Malkiel's The Random Walk Guide to Invetsing.

6. Review your insurance. Are you carrying policies with three different companies? Consolidate. Check the deductibles on your auto and homeowners insurance. Can you afford to raise them and pay the first $1,000 in case of loss? Is your liability coverage high enough?

7. Reread your lease or rental agreement. If you rent your home or office, make sure you're clear on the terms. While you're at it, consider asking for a rent reduction. Sound crazy? If you're a good tenant and regularly pay on time, it's not so far-fetched.

These tasks may be boring, but they're important. Terms and conditions change frequently, as does your own finacial situation Spending one day a year to review your agreements may keep you from getting trapped in pricey contracts and help free up money that you could be investing back into your business.

Need additional advice on growing your small business? Consult Carlton Brown Associates.

How to Avoid Sales Stalls

2012-02-16T13:29:00.001-05:00

If you've ever tried to sell anything, you've heard one of these comments—either from your own prospects or via your sales people:

"It's not in the budget right now."
"I have to speak with the owner."
"It's not our No. 1 priority."
"We will get back to you ..."

Or maybe they just don't call back at all.

These are all known as "stalls"—and if you can't figure out how to get past them, your deal is doomed. I've learned that in any economy, getting in the door and closing business is a challenge when any of these five fundamental elements are missing:

1. Passion and Enthusiasm

You see in so many examples of sales success ... and there is a reason. Enthusiasm is contagious; it affects everyone around you—including customers. It helps you through the rejections, objections, setbacks and everything else that affects attitude and approach.

Dig deep into the solutions and benefits that you offer your customers. That will strengthen your beliefs in your business, and that transfers to your actions.

2. A Solid Plan

Having an efficient process to manage your sales cycle keeps you focused and on track. Every day you need to have a clear map of activities laid out. Break down your yearly and monthly goals into daily activities.

3. Resiliency

If you can't bounce back from setbacks and rejection with a positive attitude it becomes more and more difficult to break through to new business. People can sense your confidence level, whether high or low. Resiliency also improves when you focus on qualified accounts--and walk away from the ones where the return on investment is low.

Try asking your reps, or your prospects: "What's our next step?" Often the prospect can give a better way to move through the sales cycle. Don't be afraid of rejection--that's important information to understand.

4. Added Value ... at Every Step

Each time you make any type of follow-up call with a prospect, make sure you have a new idea or information that will be valuable to the contact. Becoming a pest—say, by calling every week and asking for your purchase order—does more damage than you think.

Throughout every stage of your sales cycle—down to every phone conversation—you should be focused on how you, your product and your company provide value to your customers.

5. Hard Work

One of the biggest reasons you break through the door: You earn it. Tenacity and hard work with a purpose wakes people up. In a study from the National Association of Purchasing Managers, buyers ranked "Hard Work" as one of the top 10 things they found most helpful in salespeople. Customers appreciate sales people who put in long and hard hours, even occasional weekends. They want to know that they will get 110 percent effort from a rep who cares about them and their business.

Passion, planning, resiliency, adding value and hard work are the keys to opening doors and building your business and will be the foundation in helping eliminate many sales stalls.

Need additional advice on how to run or grow your small business? Contact Carlton Brown Associates today.

10 Tips for Pitching to Investors - Part II

2012-02-15T13:36:00.002-05:00

An entrepreneur's enthusiasm can only get them so far when it comes to pitching successfully to investors. Yesterday we looked at my first five tips for pitching, today we conclude with my final five.

6. Don't sit on your assets. If your company has valuable intellectual property -- a patent, trademark or proprietary piece of software, for instance -- play that up. Investors like a company with a hard asset that could be sold off if the business doesn't make it on its own.

7. Mention your own investment. Investors like owners to have "skin in the game" – that is, their own money on the line. When you invest in your own company, outside investors know you're committed to your idea. The pitch "I have a great idea but no money, why don't you give me yours?" doesn't usually get very far.

8. Make realistic projections. Investors are often skeptical about hockey-stick shaped growth charts. Be ready to explain your forecasting methods and why you're confident sales will rise.

9. Know what you'll do with the money. How will this funding help your company grow? Provide a precise answer, as in, "With this money, we'll hire 50 new sales reps in new territories."

10. Make an "ask." Have a precise figure in mind, and close by asking for it.

If you follow these guidelines and go in to your next meeting feeling confident about your business, the likelihood of your success will be greatly increased. If you need additional advice on pitching or growing your small business, contact Carlton Brown Associates today. We can help your great idea become a reality.

10 Tips for Pitching to Investors - Part I

2012-02-14T11:40:00.000-05:00

If there's one thing I've learned from a couple decades of starting new companies and running them, it's that entrepreneurs are always excited about their business. But translating that enthusiasm into a pitch that makes investors plunk down their money is a whole different ballgame. Appealing to investors is a skill unto itself, but it can be learned. Here are ten tips, starting with the first five, on how to craft your investor pitch:
1. Keep it short. You should be able to quickly describe what your company does and why it's innovative in 30 to 60 seconds. Be engaging and let your enthusiasm show.
2. Pitch the right investor. Most venture-capital firms and angel investors have an industry they know well and they make most of their investments there. Concentrate on finding an investor who knows your business and can offer expertise, not just cash.
3. Know the competition. Be prepared to describe the size of your market, who the major players are, their market share and how your offering will be different and make customers want to switch.
4. Have your numbers ready. How many customers do you have? What's your customer-acquisition cost? What are your revenue projections? How much free cash flow is the business generating? If you can't supply these basic financial metrics, you're in trouble.
5. Pitch your experience. Many investors want to see that you have prior experience that will help keep you from making newbie mistakes with their money. Previous leadership at a startup that successfully went public is ideal. Though, if you don't have that, pitch your team's collective attributes. For instance, experience in the industry, experience in business management at a bigger company or at a previous startup can also look attractive.
Tomorrow we will look at the next five tips for pitching to investors. If you are starting a new business and need advice on how to pitch, contact Carlton Brown Associates. We are here to help entrepreneurs.

How to Be More Profitable - Part II

2012-02-13T13:51:00.000-05:00

Last Thursday we started looking at 12 tricks that will help make your small business more profitable. Today we conclude the article with the last six. Here they are:

7. Stop chasing garbage trucks. A real prospect must have the budget to buy and a need that massively justifies the spending. If those two elements aren't both present, you’ll never be a priority–so you'd best move on.

8. Reward yourself for disqualifying a lead. Remember, every lead you eliminate from your list is a victory–because it means you won’t be wasting your time. So celebrate the winnowing process.

9. Research the competition. Selling to a fully qualified lead (see items above) is always a matter of outselling the competition. Ask the prospect who else is calling on them, and adapt your approach to compensate.

10. Keep track of key players. The most frequent reason sales reps are outsold is that they didn’t talk to the right people—and the competitor did. Keep notes of who's who and what's expected of you–and when.

11. Improve your follow-through. If you make a commitment, log it in your schedule, and make sure that you do it, no matter what. Follow-through is the only way that a potential customer can learn to trust you.

12. Use discounts sparingly. Extraordinary discounts offered merely to secure a sale have two downsides: They make the current deal smaller, and if word gets out, they can result in more discounts (and smaller deals) from future customers.

Need additional advice on how to make your small business more profitable? Contact Carlton Brown Associates today. We are here to help entrepreneurs.

How To Be More Profitable - Part I

2012-02-09T12:55:00.000-05:00

If your small business' bottom line is not where you'd like it to be, don't despair. Here are 12 quick, easy, and absolutely foolproof sales tweaks that are guaranteed to increase your profitability. Let's look at the first six.

1. Hone your sales lead criteria. Confirm that you’re going after the right leads. Revisit how you score your sales leads and observe—based on your current experience—what's working and what's not. Make changes as necessary.

2. Enhance your sales technology. Revisit the online tools that you’re using to find leads and to research companies and individuals. Take more advantage of the free (and almost free) tools that run on smartphones and tablets.

3. Revisit your network. Friends and colleagues who previously didn’t know of any prospects may know of some now. You’ve also built up a customer base; enlist their aid in expanding your network and finding new customers.

4. Hone your sales messages. No sales message is perfect. Revisit your core sales message, your elevator pitch, your qualifying questions, and so forth. Make them better, shorter, and more effective.

5. Eliminating more bad leads. Save valuable sales time by realigning initial conversations with sales leads so that they're focused on quickly identifying whether a lead is unlikely to buy.

6. Improve your listening skills. When a potential customer is speaking, listen carefully to what’s actually being said, rather than waiting for something that will give you hope of making a sale.

Need additional advice on increasing sales and making your business more profitable? Contact Carlton Brown today.

Six Clues It's Time to Hire More Employees

2012-02-08T11:57:00.002-05:00

As a small business owner, one of your most important tasks is workforce management. It's your job to make sure you have the right people--and the right number of people--to keep your company running smoothly. Now let's say your business is growing and you're sensing you need to hire new employees. How can you really be sure the time is right to bring in additional staff? There are at least six common clues:

1.Your employees are working very hard--perhaps too hard--and they're letting you know--or complaining--that they have too much to do. Complaints of this nature aren't uncommon, but your task is to determine if they're legitimate. How can you do that? Try talking to your employees and asking them to validate their concerns of being "overworked." Then look at attendance and productivity indicators to substantiate their claims. If what you find confirms their feedback, then you might decide to reorganize and restructure roles and responsibilities to better deal with the workflow. Or you could use your new knowledge as a guide to hiring additional employees.

2.Employees claim they want to take on more tasks or spend additional time on current ones--if only they had the time.

3.The growth curve for your products or services is increasing, and you identify that as a positive trend, not just a blip on the consumer radar.

4.You see an opportunity for growth and expansion in your industry or related industries, and decide that now's the time to take a calculated risk to expand. But current employees aren't available to assume additional responsibilities.

5.You determine that your employee's existing job skills and knowledge are fine for your company's current level of productivity, but to expand, you'll need either increased skills and knowledge or a new and different set of skills and knowledge.

6.Revenue is at or above target and you project it to continue; other than financially rewarding yourself and/or your employees, you wonder what to do with the increased revenue.

Take a long hard look at your business and decide if more employees is really what you need, then go out and hire them. Need additional advice on how to run your small business? Contact Carlton Brown Associates today.

Top 10 Business Plan Mistakes - Part II

2012-02-07T11:08:00.001-05:00

Welcome to part II of my article on the top 10 business plan mistakes. Yesterday we looked at the first 5 mistakes you should avoid when writing a business plan, today let's examine the last 5.

6. The plan makes unfounded or unrealistic assumptions. By their very nature, business plans are full of assumptions. The most important assumption, of course, is that your business will succeed! The best business plans highlight critical assumptions and provide some sort of rationalization for them. The worst business plans bury assumptions throughout the plan so no one can tell where the assumptions end and the facts begin. Market size, acceptable pricing, customer purchasing behavior, time to commercialization--these all involve assumptions. Wherever possible, make sure you check your assumptions against benchmarks from the same industry, a similar industry or some other acceptable standard. Tie your assumptions to facts.

7. The plan includes inadequate research. Just as it's important to tie your assumptions to facts, it's equally important to make sure your facts are, well, facts. Learn everything you can about your business and your industry--customer purchasing habits, motivations and fears; competitor positioning, size and market share; and overall market trends. You don't want to get bogged down by the facts, but you should have some numbers, charts and statistics to back up any assumptions or projections you make. Well-prepared investors will check your numbers against industry data or third party studies--if your numbers don't jibe with their numbers, your plan probably won't get funded.

8. You claim there's no risk involved in your new venture. Any sensible investor understands there's really no such thing as a "no risk" business. There are always risks. You must understand them before presenting your plan to investors or lenders. Since a business plan is more of a marketing tool than anything else, I'd recommend minimizing the discussion of risks in your plan. If you do mention any risks, be sure to emphasize how you'll minimize or mitigate them. And be well prepared for questions about risks in later discussions with investors.

9. You claim you have no competition. It's absolutely amazing how many potential business owners include this statement in their business plans: "We have no competition."

If that's what you think, you couldn't be further from the truth. Every successful business has competitors, both direct and indirect. You should plan for stiff competition from the beginning. If you can't find any direct competitors today, try to imagine how the marketplace might look once you're successful. Identify ways you can compete, and accentuate your competitive advantages in the business plan.

10. The business plan is really no plan at all. A good business plan presents an overview of the business--now, in the short term, and in the long term. However, it doesn't just describe what the business looks like at each of those stages; it also describes how you'll get from one stage to the next. In other words, the plan provides a "roadmap" for the business, a roadmap that should be as specific as possible. It should contain definite milestones--major targets that have real meaning for your business.

Smoothing Out the Rough SpotsOnce you know what mistakes not to make, there are still a few steps you need to take to make your business plan "bulletproof." Be sure you:

•Think it through. You might have a great idea, but have you carefully mapped out all the steps you'll need to take to make the business a reality? Think about building your management team, hiring salespeople, setting up operations, getting your first customer, protecting yourself from lawsuits, outmaneuvering your competition, and so on. Think about cash flow and what measures you can take to minimize your expenses and maximize your revenue.

•Do your research. Investigate everything you can about your proposed business before you start writing your business plan--and long before you start the business. You'll also need to continue your research while you write the business plan, since inevitably, things will change as you uncover critical information. And while you're researching, be sure to consult multiple sources since many times the experts will disagree.

•Research your potential customers and competitors. Is your product or service something people really want or need, or is it just "cool"? Study your market. Is it growing or shrinking? Could some sort of disruptive technology or regulatory change alter the market in fundamental ways? Why do you think people will buy your product or service? If you don't have any customers or clients yet, you'll need to convince investors that you have something people really want or need, and more important, that they'll buy it at the price you expect.

•Get feedback. Obtain as much feedback as you can from trusted friends, colleagues, nonprofit organizations, and potential investors or lenders. You'll quickly find that almost everyone thinks they're an expert and they all could do a better job than you. This may be annoying, but it's just part of the feedback process. You'll know when you're done when you've heard the same questions and criticisms again and again and have a good answer to almost everything anyone can throw at you.

•Hire professional help. Find a professional you trust like Carlton Brown to help guide you through the entire process, fill in knowledge gaps (for instance, if you know marketing but not finance, you should hire a finance expert), provide additional, unbiased feedback, and package your plan in an attractive, professional format.

Writing a business plan is hard work--many people spend a year or more writing their plan. In the early, drafting stages, business plan software can be very helpful. But the hard part is developing a coherent picture of the business that makes sense, is appealing to others and provides a reasonable road map for the future. Your products, services, business model, customers, marketing and sales plan, internal operations, management team and financial projections must all tie together seamlessly. If they don't, you may not ever get your business off the ground.

Top 10 Business Plan Mistakes - Part I

2012-02-06T11:20:00.002-05:00

As a serial entrepreneur who has started several businesses, I have learned a thing or two when it comes to writing a business plan. Mainly I have learned from my mistakes what NOT to do. So here is a list of the top 10 business plan mistakes. Today we will start with the first five.

1. Misunderstanding the purpose: It’s the planning that matters, not just the document. You engage in planning your business because planning becomes management. Planning is a process of setting goals and establishing specific measures of progress, then tracking your progress and following up with course corrections. The plan itself is just the first step; it is reviewed and revised often. Don’t even print it unless you absolutely have to. Leave it on a digital network instead.

2. Doing it in one big push; do it in pieces and steps. The plan is a set of connected modules, like blocks. Start anywhere and get going. Do the part that interests you most, or the part that provides the most immediate benefit. That might be strategy, concepts, target markets, business offerings, projections, mantra, vision, whatever ... just get going.

3. Finishing your plan. If your plan is done, then your business is done. That most recent version is just a snapshot of what the plan was then. It should always be alive and changing to reflect changing assumptions.

4. Hiding your plan from your team. It’s a management tool. Use common sense about what you share with everybody on your team, keeping some information, such as individual salaries, confidential. But do share the goals and measurements, using the planning to build team spirit and peer collaboration. That doesn’t mean sharing the plan with outsiders, except when you have to, such as when you’re seeking capital.

5. Confusing cash with profits. There's a huge difference between the two. Waiting for customers to pay can cripple your financial situation without affecting your profits. Loading your inventory absorbs money without changing profits. Profits are an accounting concept; cash is money in the bank. You don't pay your bills with profits.

Tomorrow we will examine the next five business plan mistakes so that you can know what not to do. If you need additional help with business planning, contact Carlton Brown Associates for a free consultation. We are here to help entrepreneurs every step of the way.

How to Pitch to Investors

2012-02-03T13:56:00.001-05:00

As a serial entrepreneur I have made a lot of pitches to a lot of potential investors, and have made my share of mistakes along the way. Now whenever I pitch to investors I remember these six hard-earned lessons.

1.Less is always more.
An elevator pitch is vital. Verbose presentations and lengthy explanations will not impress investors, and most likely will turn them off. Present your business in a manner that's short, sweet and to the point. Investors need to be confident that your business will attract and retain customers. If they don't grasp your concept in a short time span, they may presume that customers won't understand it either.

2.Never hypothesize. Execute, execute, execute.
Inspire confidence with facts, not fiction. Most investors seek out low-risk businesses with proven managers that are as close to guarantees as possible. A company with cash flow, a track record and real-world experience has a better chance of getting investors than a business plan forecasting large returns. Find ways to test your business's viability on a shoestring budget, and turn your idea into a functional business before you seek investment.

3.Leave the hockey sticks on the ice.
Excite investors about your big picture, but be reasonable and responsible. Avoid hockey stick projections. Respectable investors will not take you seriously if you present them with nonsensical financial graphs that claim your company's revenues will grow from $100,000 to $50 million in three years. Show investors that you have a grasp on reality with three versions of financial projections: best case, moderate case and worst case. Base each of these models on facts, past and present performance data, industry and competitor analyses and a series of well-thought-out, defendable assumptions.

4.Learn to love discount stores.
Being cheap is chic. In an age where spending is out of control, you'll need to prove that you are a fiscally responsible manager who knows how to get the most out of a buck. Give yourself wiggle room in your operations and marketing budgets, but avoid being excessive. Never ask for a large salary or big-budget perks. Investors want you to be in a position where everything is on the line.

5.Rome wasn't built in a day. Your business won't be either.
Investors are wary of funding over-eager businesses that seem destined to bite off more than they can chew. Before asking for millions of dollars to fund 50 divisions and hundreds of product lines, prove how well you can create, manage and fulfill demand for a single product. Demonstrate that your business can crawl before you say it can walk. Perfect your marketing tactics, sales strategies and operational procedures. Investors appreciate companies with sustainable step-and-repeat business models that are poised for exponential growth.

6.Choose not to be the smartest person in the room.
Know what you know, know what you don't know and find the people who know what you don't know. Build a team of credible experts. The smartest leaders in the world are those who surround themselves with smarter people. Investors are funding a management team as much as they are investing in a great business concept.

Would you like to know more about pitching to investors? Contact Carlton Brown today for a free consultation and let him share his wealth of experience with you.

How to Become an Online Expert

2012-02-02T11:46:00.002-05:00

One of the best ways to increase business is to become an expert in your field online. Of course, first you need the expertise. But once you have it, you should yell from it the hills.

Rather than going after hard-to-get media contacts, offer your expertise to a community of your target customers. There are many websites that facilitate these opportunities, but we are going to look at three: Yahoo Answers, Answers.com, and LinkedIn Groups.

“Answer” Sites

On both Yahoo Answers and Answers.com, users actively solicit answers to business questions. Using the search feature on each, you can find people asking questions related to your particular expertise. On Yahoo Answers, you build up points each time you answer questions and get bonus points if your answer is selected as the “best.”

Not only does it give you the chance to provide an intelligent, useful answer, but also one that clearly demonstrates expertise. On top of that, it gives you the opportunity to provide a backlink to your business’s website.

Answers.com provides very similar functionality. If you provide enough answers, you’ll earn the label of “top contributor,” thus enhancing your reputation in the community.

LinkedIn Groups

If you want to find a more narrowly targeted audience, LinkedIn is your site. With over 130 million members and thousands of groups to join, LinkedIn provides numerous opportunities to demonstrate your expertise.

Answering questions often leads to requests to connect and it can quickly get the ball rolling on a business relationship. Search the Groups function to find your desired niche audience.

If you provide services to small businesses, there are literally dozens of groups that target entrepreneurs and start-ups. Join them, look carefully for questions to which you are equipped to provide useful answers, and dive in.

Answering Etiquette

Keep in mind that even a whiff of self-promotion can backfire terribly, so you need to strike a delicate balance between being helpful and blatantly selling your own services/products.

The best approach is to treat the person asking the question as you would a friend or acquaintance. Here are a few things to keep in mind:

•Be a clearinghouse for information. Put links in your answers that take readers to a great article or blog post. Most times, these links shouldn’t go back to ones you’ve written yourself. You’ll build trust with your audience if you act in a way that isn’t self-serving. If you do link back to your own material, be doubly sure the information is relevant to solving the problem.

•Give away free and useful advice. Offer specific and detailed answers as to how to solve the problem presented by the questioner. Give away some trade secrets that demonstrate your industry knowledge.

•Never give a partial answer or a “teaser” that requires the reader to get directly in touch with you. Writing something like, “We deal with that all the time—give us a call” doesn’t offer readers a compelling reason to trust you. If your answers are truly helpful, you won’t need to ask for business; it will come to you.

So get out there and start promoting yourself as an online expert. If you would like additional advice from Carlton on selling yourself as an expert, contact Carlton Brown Associates for a free consultation.

How to Win Over your Employees in 3 Steps

2012-02-01T11:51:00.001-05:00

As a serial entrepreneur who has run several businesses, I have learned a few things about interacting with employees along the way. So, how do you build strong relationships with your employees? Are you nicer to them? Tougher on them? Do you pay them more money?

In my experience, it's none of these. Outstanding business leaders know that strong professional relationships are built on mutual understanding, mutual trust and mutual respect. Here are three steps you can follow to build those feelings with key members of your staff.

1. Open up. Tell your employees something about yourself that will help them better understand you. Relate a story about your background and life story. Tell them a bit about your hopes, worries and idiosyncrasies.

Some executives bristle at this suggestion. They believe leaders should be stoic and guarded. I believe that following this stereotype makes it harder for your people to know you and trust you.

Self disclosure signals to employees that you respect them enough to invest in the relationship. It sets you up for more in-depth conversations about the business. It also tells them that it's okay to reveal a bit of themselves to you and their colleagues. It helps to create an environment where people better understand what you want and, as a result, operate at a much higher level of effectiveness.

2. But stop talking about yourself long enough to show interest in them. Get in the habit of asking a question of an employee that would help you understand them better. Many executives share plane rides with subordinates and never use the opportunity to learn about the person. Instead, they make small talk.

Most employees are actually waiting for you to ask them a question about themselves. It gives them permission to explain to you their own hopes, fears and life story. If they have a special needs child or other particular challenges, it gives them a window to tell you. I have seen highly valued employees quit because of special circumstances that they never felt comfortable disclosing to the boss, because they assumed he or she didn't care.

This isn't just about being warm and fuzzy. Asking after employees creates opportunities for you to better match key jobs with the talents of your staff. It also encourages your employees to raise bad news sooner than they otherwise would so that you can address problems before they do real damage to your company.

3. Ask for advice (and then don't forget to listen). Too often, business leaders just don't do this. They are accustomed to dominating conversations and often mistake silence for agreement.

Do you create an atmosphere where key employees candidly disagree and express their views? Do you ask for advice or do you passively wait for it? Maybe asking for advice makes you feel uncomfortable?

Superb leaders seek opinions, sometimes in group discussions and other times in one-on-one seesions. Getting candid views and advice helps them make better decisions.

Better yet, this practice is enormously motivating to your people. It signals that you respect their views. It encourages them to be more forthcoming and candid. It trains them to do the same thing with their own subordinates. It encourages employees to put themselves in your shoes and act more like owners.

Try these three simple steps. Trust me, you will see a marked improvement in the quality of your professional relationships as well as the atmosphere and culture of your organization. You will understand your people better, they will understand and trust you more, and you will become less isolated. You will become a more effective leader. And you might just like coming to work more.

Need additional advice on managing your business relationships? Or starting your own business? Contact Carlton Brown Associates today for a free consultation.

When Not To Buy a Franchise: The Warning Signs

2012-01-31T12:54:00.000-05:00

Do you remember about a decade ago when meal-prepation franchises like Dinner by Design and Entree Vous seemed like the next big thing? After all, they offered time-strapped mothers heat-and-serve dinners they could take home to their families. However, can you name one of those commercial kitchen franchises today? They have all closed their franchising operations, tweaked their offerings or fielded lawsuits from disgruntled franchisees. Of course, hindsight is 20/20, especially when it comes to the spotting "fad" franchises.

It can be difficult to discern what franchises have staying power -- or the ability to change with the times -- and what concepts are destined for the trash bin. And, as with any investment, where there is uncertainty there is often more opportunity. Still, before you buy into a relatively new and fast-growing concept, ask yourself whether any of the following red flags apply. If they do, stop and reconsider.

Here's a few of the warning signs:

The franchise has limited offerings. Many great businesses have thrived because they do one thing well, but a one-trick pony is most vulnerable to consumers' whims. That's a big reason why meal-prep kitchens flopped; more recently, ink-cartridge stores have also suffered because of a singular focus.

The owners are rookies. Franchise companies are often born with a novel business idea that gets packaged and sold before the operators prove their broader business acumen. Look at management strength and history before you work with a franchise. If they have vision -- and capital -- they will know how to tweak the business model to change with the times. If their experience is limited to a single widget or service, however, they may flounder.

The growth can be described as "too much too soon." As with any bubble, whether it's home values or gourmet hamburgers, a sudden boom in the market is always a warning sign. Case in point: self-serve yogurt franchises. It doesn't mean the whole segment is doomed to fail, but it does mean franchisees need to be extra diligent about picking the right flavor.

The franchise's product or service isn't a necessity. If a franchise is focused on a discretionary product or service, investigate why your customers will keep spending even when times are tough, especially in today's tough economy. Notable exceptions include fitness franchises, which have held up relatively well despite hard times, as well as franchises related to caring for seniors, educating kids, such as our EntreServ BizBox client, Mathnasium of the Triangle, and pampering dogs.

Have other concerns or questions about buying a franchise? Contact Carlton Brown today for a free consultation.

What Not to Say During Negotiations

2012-01-30T16:24:00.000-05:00

If you are an entrepreneur you are sure to spend time haggling, whether it is with customers, suppliers, investors or would-be employees. Most small business owners are street smart and naturally perform well in negotiations. You probably have a trick or two up your sleeve-—some magic phrases-—that can help you gain the upperhand. But, often, the moment you get into trouble in a negotiation is when something careless just slips out. If you are new to negotiation, or feel it is an area where you can improve, check out these tips on precisely what not to say.

1. The word "between." It often feels reasonable—-and therefore like progress—-to throw out a range. With a customer, that may mean saying "I can do this for between $10,000 and $15,000." With a potential hire, you could be tempted to say, "You can start between April 1 and April 15." But that word between tends to be tantamount to a concession, and any shrewd negotiator with whom you deal will swiftly zero-in on the cheaper price or the later deadline. In other words, you will find that by saying the word between you will automatically have conceded ground without extracting anything in return.

2. "I think we're close." We've all experienced deal fatigue: The moment when you want so badly to complete a deal that you signal to the other side that you are ready to settle on the details and move forward. The problem with arriving at this crossroads, and announcing you're there, is that you have just indicated that you value simply reaching an agreement over getting what you actually want. And a skilled negotiator on the other side may well use this moment as an opportunity to stall, and thus to negotiate further concessions. Unless you actually face extreme time pressure, you shouldn't be the party to point out that the clock is loudly ticking in the background. Create a situation in which your counterpart is as eager to finalize the negotiation (or, better yet: more eager!) than you are.

3. "Why don't you throw out a number?" There are differing schools of thought on this, and many people believe you should never be the first person in a negotiation to quote a price. Let the other side start the bidding, the thinking goes, and they will be forced to show their hands, which will provide you with an advantage. But some research has indicated that the result of a negotiation is often closer to what the first mover proposed than to the number the other party had in mind; the first number uttered in a negotiation (so long as it is not ridiculous) has the effect of "anchoring the conversation." And one's role in the negotiation can matter, too. In the book Negotiation, Adam D. Galinsky of Northwestern's Kellogg School of Management and Roderick I. Swaab of INSEAD in France write: "In our studies, we found that the final outcome of a negotiation is affected by whether the buyer or the seller makes the first offer. Specifically, when a seller makes the first offer, the final settlement price tends to be higher than when the buyer makes the first offer."

4. "I'm the final decision maker." At the beginning of many negotiations, someone will typically ask, "Who are the key stakeholders on your side, and is everyone needed to make the decision in the room?" For most entrepreneurs, the answer, of course, is yes. Who besides you is ever needed to make a decision? Isn't one of the joys of being an entrepreneur that you get to call the shots? Yet in negotiations, particularly with larger organizations, this can be a trap. You almost always want to establish at the beginning of a negotiation that there is some higher authority with whom you must speak prior to saying yes. In a business owner's case, that mysterious overlord could be a key investor, a partner, or the members of your advisory board. The point is, while you will almost certainly be making the decision yourself, you do not want the opposing negotiators to know that you are the final decision maker, just in case you get cornered as the conversation develops. Particularly in a high-stakes deal, you will almost certainly benefit from taking an extra 24 hours to think through the terms. For once, be (falsely) humble: pretend like you aren't the person who makes all of the decisions.

5. "F*@% you." The savviest negotiators take nothing personally; they are impervious to criticism and impossible to fluster. And because they seem unmoved by the whole situation and unimpressed with the stakes involved, they have a way of unnerving less-experienced counterparts. This can be an effective weapon when used against entrepreneurs, because entrepreneurs tend to take every aspect of their businesses very personally. Entrepreneurs often style themselves as frank, no-nonsense individuals, and they can at times have thin skin. But whenever you negotiate, remember that it pays to stay calm, to never show that an absurdly low counter-offer or an annoying stalling tactic has upset you. Use your equanimity to unnerve the person who is negotiating with you. And if he or she becomes angry or peeved, don't take the bait to strike back. Just take heart: You've grabbed the emotional advantage in the situation. Now go close that deal.

Are you a small business person in need of help with negotiations? Contact Carlton Brown today for a free consultation.

Signs You're Losing a Sale

2012-01-26T13:52:00.003-05:00

If you are like most small businesses, every sale counts and you can't afford to lose a deal. Knowing when a sale is going downhill takes savvy. Here are five signs you are losing a sale and strategies for turning it around:

No. 1: If a Potential Client Seems Indifferent
A client who is interested in doing business with you should have questions and concerns. If they don't outright reject you but don't have any questions either, be on the alert.

To resolve this problem, create more of an advisory relationship with clients. You can let them know that you'll help either to solve their problem or point them in the direction of another business that might be a better fit. Offering to help people find other vendors might seem counterintuitive, but it can go a long way to earn the trust you may need to win over a client,

No. 2: If There's No Hard Deadline For a Decision
Having urgency around a sale is important. Early in the process, ask potential clients about their timeframe. You want to prioritize those companies that have a hard deadline.

You can find ways to firm up deadlines. Try limited-time offers or discounts to create urgency around a sale. Perhaps point out what the competition is doing, or identify the financial risk involved in not acting quickly on the sale.

No. 3: If You Aren't Dealing With the Decision Maker
You may start out talking with a junior-level employee who is vetting options, but beware if you aren't put in touch with the decision maker after a few conversations. It's probably a sign the company isn't serious about buying.

Getting past that roadblock can be challenging. The bigger the organization you are dealing with, the more layers of management you likely will have to penetrate. Create a presentation that your initial contact can easily show to upper management. You also might request a quick conference call with the senior-level person involved.

No. 4: If Your Price is Too High
People generally object to a price because they believe they can find the same product or service for less or because you're trying to sell more than they need.

If your competitors are offering a lower price, focus on how you can provide added value. But if you're offering more than a client needs, you may need to scale back the initial proposal. You also could offer creative payment alternatives, such as incentives on the first purchase if the customer continues to buy more.

No. 5: If You're Asked For a Proposal Instead of a Conversation
When potential clients ask for a proposal before agreeing to talk with you, it's usually a sign they're simply gathering price quotes from vendors.

Before submitting a proposal, ask what the client is looking for and what criteria will be used to make the decision. Reaching a verbal understanding on those issues increases the likelihood that you'll get the sale.

Need additional advice on starting or running your small business? Contact Carlton Brown today.

Negotiating Noncompete Contracts

2012-01-25T11:34:00.002-05:00

Entrepreneurs with one-track minds don't want to hop between industries--they want to stay where their passions lie. But if you're looking to sell one business only to start a similar one, you may run into trouble. Most buyers will want you to sign a noncompete agreement dictating that you won't operate in the same or similar business for a certain period of time within a specific geographic area. Noncompetes may also come into play when employees leave a company to work for a competitor.

But signing a noncompete doesn't mean you have to start from scratch or leave your field of interest; you can negotiate terms that don't restrict you entirely. Here are a few ways sellers can carve out some wiggle room.

Hire an attorney, and read up. Noncompetes are complicated documents that vary greatly depending on situation and industry, so seek legal guidance. Before going into negotiations, it may help to check out how the courts in your jurisdiction have ruled on previous cases in your industry.

Get specific. Carve out as many exceptions as you can during the negotiation process; ultimately, this benefits both parties, as a court may remove contractual language it deems invalid or strike an overbroad contract altogether. As the seller, try to limit the noncompete to cover only specific types of work or products in a way that allows you to maintain some involvement in the industry. Also, try to limit the geographic area and time period the document covers; the latter should generally be no more than five years.

Ask for a non-solicitation agreement instead. This restricts you from soliciting employees or customers of your business after you leave. Alternatively, you may be able to restrict only the specific product or service you were selling at the time.

Consider an earn-out. You may opt for an earn-out--a provision stating that the seller will receive additional future compensation based on the business achieving certain financial goals--instead of signing a noncompete.

Need additional advice on noncompete agreements or how to finance a new business? Contact Carlton Brown.

How to Manage a Sales Team

2012-01-24T09:27:00.002-05:00

Want to boost your business? It's time to set your salespeople free. Just trust me on this.

As economic times become more uncertain, companies are increasingly seeking to boost their sales operations to try to capture more market share. But properly running a successful sales department requires a special touch and technique.

As a consultant, I've spent years studying the behavior of successful salespeople. In many cases, high-performing salespeople have strong personalities. They're the types of people described as social and verbally aggressive. They're optimistic, good persuaders, visionaries of the big picture, people-oriented, and team-oriented.

Great salespeople also tend to be into solving problems and driving for results. They're positive in their attitude, powerful and authoritative.
The traits that make them so great at sales also can lead to traits that present difficulties for managers. They can be impulsive, demanding and unrealistic in their expectations. They may lack attention to detail and are often disorganized.

If you are more methodical, analytical or process oriented, you may get easily frustrated running a sales department. But those who are good at running a sales department learn how to manage around these issues.

There are certain styles of management that I've often found are a good fit for sales departments. Here are four tips for managing successful sales pros.

•Avoid rulemaking. Great salespeople generally want freedom. They want autonomy. Compliance doesn't work for these people. The better you're able to remove the obstacles and set them up to produce those results, the more successful they will be -- and you will be. Don't ever tell them what they can't do, because they will simply focus their creativity on finding ways to overcome your rules.

•Become a coach. That means asking, not telling your high performers what to do. Ask them to put themselves in your shoes over a particular issue, and discuss a variety of possible options. Let them own the solution to whatever obstacle is at hand.

•Let them do what they do best. In order to motivate and lead salespeople effectively, you want to think about what's important to them and what drives them. If you have employees who are not great at details and writing proposals but they're great at selling, then let them sell. Find someone else to compensate in some way to support them on the detail.

•Give them pats on the back. You need to recognize them. Especially with top-performing salespeople, money isn't often the main driver. It's really about being respected. It's achieving and getting those results.
If you adapt your management style to meet their needs, and understand the behaviors needed to do it, you'll have a lot fewer headaches. And your salespeople will thrive.

Need more advice? Contact Carlton Brown for a free business consultation today.

Making Price Increases More Tolerable

2012-01-23T10:51:00.003-05:00

As the economy remains stricken, overhead costs continue to rise: everything from payroll and health insurance to the price of many basic materials. As a small business owner you may have no choice but to raise prices for your products and/or services in order for your business to remain profitable. If you're an entrepreneur, you have faced or will soon face this problem: How can you sell customers on a price hike?

Here are five ideas:

1. Phase it in. Let customers know prices are going up next month, or next quarter. Drive some extra sales volume now, and then the party's over and the new price goes into effect. Give clients a chance to buy in volume ahead of time to save money. It feels like a deal, but, sooner or later, customers still end up paying the new price.

2.Offer valued-customer discounts. Take a page from grocery stores and offer one price for your loyal frequent shoppers, and a higher one for occasional users. That way you can start grossing more without alienating your core customer base. Don't make those customers haul around a loyalty card, either -- keep the information on who gets the good prices on file yourself.

3.Revamp or repackage old products or services. Add new features, bundle existing products to create a new one or redesign your packaging. Freshen it up, and you've added value -- or at least created the appearance of added value -- and can command a better price for it.

4.Introduce new products. One of the biggest problems in retail is the lack of unique products. What can you sell that your competitors don't? Add fresh items that can't be easily price compared and you can charge a better markup on them.

5.Review and retool your product assortment. Do you know which of your products has the lowest margins, and which has the highest? If not, find out. Then drop slower-moving, low-net products and add more high-end ones. Also review competitors' pricing to see whether some products are priced unnecessarily low. Small, strategic increases on a few popular items can add up quickly, while customers may barely notice the difference.

Need additional advice on running your small business? Carlton Brown can help you with marketing and business plans, budgets and analysis, business brokerage, and business development.

Funding your Startup

2012-01-20T14:06:00.003-05:00

Raising capital for a startup venture during these difficult economic times has been a major obstacle for many aspiring entrepreneurs. But it's not impossible.

There are several steps budding business owners can take to get in front of prospective investors and to help make sure they pony over the cash you need.

Here are our best tips for landing the money you'll need to get your business off the ground:

Know the different types of investors. There are three types of people who might invest their money in your business idea: friendly investors, hobby angels and professional investors. Friendly investors are the people you know personally, namely friends and family. Hobby angels are individual investors who are most likely professionals themselves who have some money to spare. Professional investors, of course, include venture capitalists, angels and banks.

Make a list of prospects. Scour your industry and your professional network to put together a first group of people and test your business pitch. If the people in this initial group appear to be interested, expand your list of prospects from there.

Keep track of your contacts, your meetings and your goals for each of the meetings. Keep in touch with the contacts throughout the pitching process.

Set a closing date. Determine a specific, official date for when interested professional investors need to get you the money they promised -- and hold them to it. When dealing with friendly and hobby angels, try a rolling closing date, meaning that you'll accept the investment money as soon as they're willing to give it. Also, be sure to be clear with friendly investors about what happens if the money they invest isn't paid back on time or at all.

Use middle men carefully. Third-party groups can be great for two things, Advani says. They can help connect entrepreneurs to individual investors they didn't otherwise know. Examples include peer lending and investing sites Lending Club and Prosper.

Crowd funding sites are another option. These services -- including Pro Founder and Peerbackers -- can help entrepreneurs collect numerous investments from people via social networks.

But be careful about sharing your business idea online. Remember that everyone will know what you're planning to do.

Need additional advice on funding your small business idea? Call Carlton Brown today.

Closing the Sale - Part II

2012-01-19T11:30:00.002-05:00

Sorry fo the delay in the second part of this article on closing the sale. Here it is:

7. Ask one more time. Figuring out another way to circle back and reposition negotiations after being told "no" ultimately will make you a great closer. It is not rude to persist; it is the sign of success and prosperity. Because I continue to ask in another way for a "yes" after being told "no" does not mean I did not listen. It only means I am more sold on my view than I am the other's view.

8. Stay with the buyer. Each time you leave the customer to check on something, it creates doubt and uncertainty in their mind. It can create undue antagonism in the negotiations, lower perceived value, and extend the closing time. But keep in mind, this does not mean there is not an appropriate time to leave a buyer and use an authority for a close, as this can be very powerful as long as it is not overused

9. Always treat prospects like buyers. Regardless of the circumstances: no money, no budget, not the decision maker -- always treat the buyer like he is a buyer. I always survey the prospect for signs that demonstrate they have bought in the past. The watch, the shirt, the suit, the necklace, the car they drove, the house they live in, the credit card they use, and others. All are evidence that this prospect has actually demonstrated the ability and history of closing. I always tell myself, "Every buyer is a buyer. Treat them as a buyer and they will turn into a buyer."

10. Stay confident. I always maintain that we can come to an agreement, no matter what I am told by the buyer or those around me. The saying goes: "Where there is a will, there is a way." This mindset of knowing you will reach an agreement requires you to eliminate all negativity from your environment as though it were a disease that kills, and be assured, it does.

11. Be positive. No matter how the buyer responds, keep it light and maintain a can-do attitude throughout the negotiations. When you go negative due to the buyer being negative there is only one outcome and it's not good. Negativity always succumbs to positivity.

12. Always smile. This is not just about your attitude, but also your physical manifestation. For the next week, practice smiling with everyone in every situation you encounter. Do this until you are able to argue with a smile, disagree with a smile, negotiate, overcome objections and close with a smile. Have you ever noticed that very successful people are smiling all the time? It is not because they are successful that they are smiling, it's how they got successful. This is a million dollar tip: Smile.

Have more questions about your small business? Contact Carlton Brown.

Branding Yourself - Part II

2012-01-18T08:54:00.002-05:00

3. Learn how to be a good source.
Find out which media sources your audience reads, listens to or watches, research the types of content they provide and locate the exact gatekeeper to pitch. You or your publicist can also e-mail journalists and editors in response to one of their articles, with a note that you are available to comment on future articles. If and when a journalist e-mails or calls you for an interview, respond with haste because they are typically on deadline for their stories. Answer their questions thoroughly, while making sure that you get your message across.

When you're interviewed by the media, you will always be able to promote your company through your byline, which will help build both yours and your company's brand. Once the interview is complete, send a follow-up e-mail asking if they have any more questions, and make sure you include your bio and your picture.

4. Generate brand awareness through networking.
You should be connecting with other entrepreneurs in your industry using social networks, such as Sprouter.com, and commenting on their blogs. Networking is one of the best ways to become known in your industry. By forming relationships with people in your audience you can grow your business and your brand long-term.

The four rules of networking that you should keep in mind are mutualism, giving, targeting and reconnecting.

•Mutualism: You have to create win-win relationships in business, making sure that you don't benefit more than the other party.
•Giving: Help someone out, before asking for anything in return. This makes people want to support you.
•Targeting: You want to be very specific with the types of people you network with, in order to save time and to attract the right people to your brand.
•Reconnecting: Never lose touch, that way networking contacts remember you when new opportunities surface.
These days, branding your company isn't enough. The world wants to hear what you have to say, If you aren't building your own brand, your company will suffer. If you want your company to succeed, become an expert in your field, claim a website under your own domain name, connect with the media, and build relationships with your audience.

Need further guidance on how to brand yourself or market your samll business? Call Carlton Brown today.

How to brand yourself - Part I

2012-01-16T12:24:00.003-05:00

Entrepreneurs have always been interested in building the brand names of their companies, and naturally so. How else would people know they exist, what they offer and even where they're located? Some entrepreneurs invest in expensive PR companies, hoping for publicity in mainstream news outlets. Others, such as bootstrapper entrepreneurs, use guerilla marketing tactics to generate interest with almost no budget. We're living in a world where consumers and journalists alike are looking to connect directly with entrepreneurs and hear their stories. It's not just about what your company does, but why you started it, its purpose and your vision. Social technologies, such as blogs, Facebook and Twitter, have enabled entrepreneurs to become known, connect directly with their audience and build relationships on a global scale. As an entrepreneur, you need to become the brand.

1. Become an expert on something that relates to your business.Entrepreneurs looking to garner media attention, attract new clients and build their businesses should focus on becoming an expert in their field. Avoid establishing an expertise that's irrelevant to your corporate mission, goals, and vision because you'll be wasting your time. If you own a record label, it's probably not wise to brand yourself as a nutrition expert.

2. Establish a website or blog under your full name.The media and your customers both use search engines to research you, connect with you and potentially either do business with you or interview you. That's why you need to purchase your full name as a domain name (yourfullname.com). By developing either a static website or a blog under your domain name, you will own the first result for your name in Google and other search engines. This should be a separate site than your company's website. After purchasing your domain name, add your picture, a bio, your e-mail address and links to the rest of your online presence (i.e. Facebook, LinkedIn, Twitter). This way, people can get in touch with you in their medium of choice. Claim your name before someone else does.

Tune in tomorrow to read the second part of this article. Until then, if you need help with branding your small business, contact Carlton Brown today!

Top 10 Reasons You Need a Business Plan

2012-01-13T11:51:00.003-05:00

Why do you need a business plan? You already know the obvious reasons, but there are so many other good reasons to create a business plan that many business owners don't know about. Here are the top 10.

10. Decide whether you need new assets, how many, and whether to buy or lease them. Use your business plan to help decide what's going to happen in the long term, which should be an important input to the classic make vs. buy. How long will this important purchase last in your plan?

9. Share and explain business objectives with your management team, employees and new hires. Make selected portions of your business plan part of your new employee training.

8. Develop new business alliances. Use your plan to set targets for new alliances, and selected portions of your plan to communicate with those alliances.

7. Deal with professionals. Share selected highlights or your plans with your attorneys and accountants, and, if this is relevant to you, consultants.

6. Sell your business. Usually the business plan is a very important part of selling the business. Help buyers understand what you have, what it's worth and why they want it.

5. Valuation of the business for formal transactions related to divorce, inheritance, estate planning and tax issues. Valuation is the term for establishing how much your business is worth. Usually that takes a business plan, as well as a professional with experience. The plan tells the valuation expert what your business is doing, when, why and how much that will cost and how much it will produce.

4. Create a new business. Use a plan to establish the right steps to starting a new business, including what you need to do, what resources will be required, and what you expect to happen.

3. Seek investment for a business, whether it's a startup or not. Investors need to see a business plan before they decide whether or not to invest. They'll expect the plan to cover all the main points.

2. Back up a business loan application. Like investors, lenders want to see the plan and will expect the plan to cover the main points.

1. Grow your existing business. Establish strategy and allocate resources according to strategic priority.

If you need help with business planning, contact Carlton Brown Companies today.

Closing the Sale - Part I

2012-01-12T09:15:00.003-05:00

Like any game there are rules to selling, especially when it comes to closing a sale. To ensure sales success in your business, whether you're a startup or an established entrepreneur, here are a dozen of my best commandments for sealing the deal.

1. Remain seated. The saying goes, present the product, service or idea on your feet, but always negotiate from your seat. Even if your prospect stands up, remain seated. Going from a seating position to standing up suggests something has changed and allows your prospect to exit and end the negotiations.

2. Always present a proposal in writing. People do not believe what they hear, they believe what they see. Always have a contract available and a writing pad. Anything offered or points of value that are included should be written down to show buyers what they get when they make a decision with you.

3. Communicate clearly. No one will trust a person who cannot communicate clearly and confidently. I practiced using recorders and video for years and then played them back to ensure my communication was coming across the way I intended.

4. Make eye contact. This is a discipline instilled only through practice, and you can perfect it by recording yourself. If you want to be believed, it is vital to make eye contact with your prospect. It suggests interest in them and confidence in yourself, your products, your services, and in what you are proposing.

5. Always carry a pen. I remember once I was closing a deal, and I reached for my pen in my jacket but it was gone. The prospect took this as sign that he shouldn't sign — and didn't. I was devastated, and now I refuse to go anywhere without my pen in hand. All agreements require signatures and that requires ink. Keep a pen available at all times. In fact, always have a back-up pen, too.

6. Use humor. Any humor that can make people feel good, inspired or hopeful is always appropriate during the close. Everyone loves a good story, and people are more likely to make decisions when they are less serious. You will close more deals if you can get your client to lighten up and laugh.

Join us tomorrow, for part II of this article. Have a business concern or question? Contact Carlton Brown.

Conducting Market Research

2012-01-10T12:24:00.006-05:00

Giving birth to a new business idea is usually a heady experience as you scribble those first thoughts on a cocktail napkin, but to make your ephiphany become a bankable idea, you have work to do. That is where market research comes in.

Market research is neccessary to determine your idea's potential. You can gather information from a myriad of resources: industry associations, Web searches, periodicals, federal and state agencies,etc. A trip to the library or a few hours online can start you on the way. Your goal is to gain a general sense of the type of customer your product or service will serve.

Next you need to formulate a research plan, which should spell out the objectives of the research and give you the information you need to either go ahead with your idea, fine-tune it or take it back to the drawing board. Create a list of questions you need to answer in your research and plan on answering them. The type of information you'll be gathering depends on certain factors -- the type of product or service you want to sell, as well as your overall research goals. You can use your research to determine a potential market, to size up the competition, or to test the usefulness and positioning of your product or service.

Analysis
Look at your business idea from four perspectives: company, customer, competitor and collaborator. This allows you to scrutinize a business idea before even approaching the topic of brand development.

1. Company. Think of your idea in terms of its product/service features, the benefits to customers, the personality of your company, what key messages you'll be relaying and the core promises you'll be making to customers.

2. Customer. There are three different customers you'll need to think about in relation to your idea: purchasers (those who make the decision or write the check), influencers (the individual, organization or group of people who influence the purchasing decision), and the end users (the person or group of people who will directly interact with your product or service).

3. Competitor. Again, there are three different groups you'll need to keep in mind: primary, secondary and tertiary. Their placement within each level is based on how often your business would compete with them and how you would tailor your messages when competing with each of these groups.

4. Collaborators. Think of organizations and people who may have an interest in your success but aren't directly paid or rewarded for any success your business might realize, such as associations, the media and other organizations that sell to your customers.

Another approach to market research is SWOT analysis, meaning analysis of the strengths of your industry, your product or service; the weaknesses of your product (such as design flaws) or service (such as high prices); and potential threats (such as the economy).

Whatever your approach to evaluating your idea, just be sure you're meeting the research objectives you've outlined for your product or service. With those goals always in mind, your analysis will help you discover whether your idea has any gaps.

Check Out the Competition
Hopefully, your research process has helped you uncover your competition, so now you need to find out what they're up to. You do this by becoming a customer of the competition, whether by shopping them yourself or enlisting the help of a friend.

Your aim is to understand what your competition is doing, so you can go out and do it better. Maybe their service is poor or their product has some flaws(which you'll only know if you test it out yourself). Or maybe you've figured out a way to do things better, smarter, cheaper. Discover your selling point. It's going to be at the heart of your marketing program, if and when you're ready for that step. It's also going to be what sets you apart and attracts customers to your business.

5 Steps to Starting a Business Plan

2012-01-10T09:15:00.002-05:00

Have you been putting off the business planning? You know who you are. Do you mean to start managing better, but keep getting distracted by fires to put out? Here are five quick and easy ways to start planning today.

1.Do a SWOT AnalysisSWOT stands for strengths, weaknesses, opportunities, and threats. It's a great way to break out of that planning inertia. It's especially good when there's a team involved. Take an hour or two and jot down bullet points under each of these four categories.

Don't spend all day, much less all week. A couple of hours should work fine.

Don't argue about what goes where. Don't criticize contributions. It's brainstorming. Just jot down the points and record them. Strategy follows. You can't help it. You do a SWOT, and strategy follows.

And now you're planning.

2.Compare plans to actual sales.
Think through what turned out differently and what didn't, and why. Soon, you'll be thinking about your marketing strategy, target markets, marketing messages, customers, channels, packaging, delivery, complaints and competitors. I'm amazed at how much of business, and the business planning process, pivots around the difference between planned and actual sales.

And now you're planning.

3.Talk to 10 well-chosen people
Funny how much time goes by for most business owners without really talking even to your customers, much less to a few people who aren't your customers but could be. I was shocked the first time I did it. I felt like I talked to customers often, but that's nothing to what you get when you dedicate time and have a real conversation.

First make a good list. Don't cheat yourself and talk only to the people you always talk to anyway. Stretch yourself further and find some people you don't know, so you get a fresh look. Ask them for their time, not as a survey taker but as the owner or manager of the business. A lot of people will turn you down (I probably would), but if the conversation is framed right, you'll find some people interested.

Start the conversation with interesting questions. The first couple of questions are critical to the success of the talk. Grab their interest. Wake their curiosity.

And now you're planning.

4.Imagine a customer story
That's right: I say "imagine," not find or tell a customer story. This isn't a testimonial for use by marketing.

Imagine your ideal customer. Give her a gender, occupation, family (or not), children (or not), route to work, favorite magazines, television shows, hobbies, websites, music, and movies. If she owns a car, what make, what model. Imagine favorite vacations.

Now imagine how she finds your business. What does he like about you, and what does she dislike? What prompts him to look for you. Where does she look? What does he tell other people about your business?

How do you want to be described by your customers to their friends? What do you want to make them set you apart, in their minds?

Think about that, imagine that, and now you're planning.

5.Visualize a better future
Where your business might be three years from now if things go really well. What will your office or store or plant look like three years from now? What will you be selling? How different is it from what you're selling today? Who will you be selling too? How different will that be from who you sell to today?

Some would call this dreaming. But dreaming ahead, dreaming the future, is a vital part of business planning. Dream it, then focus, set the steps to make it happen. Then track and follow up, and manage.

And now you're planning.

Need help with your business plan? Contact Carlton Brown today.

3 tips for finding a business mentor

2012-01-09T09:56:00.004-05:00

Great business mentors can have an enormous impact on early-stage startups. Their connections can open doors that would otherwise be closed and their experiences can save entrepreneurs from suffering from the same startup mistakes they've already made.

But finding the best mentor for your business isn't as simple as picking a name from a hat. You'll need to be able to recognize what makes a great mentor, know how to approach one and then how to maximize the relationship.

Here are three steps for finding the most experienced mentor to help bring your startup idea to the next level:

1. Recognize what makes a great mentor.
We've found that the best mentors are those who ask a lot of tough questions and challenge you to exceed your goals. In doing so, they should share their own experiences and help you uncover new opportunities.

But the best mentors shouldn't tell you exactly what to do. They understand their role as an advisor and that it's your company to run, not theirs. Those who tell entrepreneurs what to do, and become upset when their instructions aren't followed, often cause more damage than good.

Sometimes a mentor may ask to be compensated for his or her help and advice. But the best mentors will usually never ask for compensation and will be satisfied just by helping out.

2. Find a good fit.
A common mistake we've seen is going straight at the busiest, most well-known, most visible mentors. While this may occasionally work, it's often more productive to analyze your own close network and look locally for mentors whom you respect with relevant experience.

Think about approaching the founders and key executives of companies in your space who you admire. Those people are usually more likely to invest time in your business than those with crushing demand from strangers.

To make that first connection, you might try sending a short email explaining what your startup is doing and why you are reaching out. Avoid "form" emails and always make it relevant and easy for the prospective mentor to help. Take a few minutes to read the person's blog or Twitter account and learn about his or her background so you can personalize your note.

Most of the cold emails I receive from entrepreneurs start off by requesting a meeting over coffee. While this might seem like a good first request, it isn't always. For example, I'm an introvert who doesn't drink coffee. Even if I did, I'd have to leave my office to meet with the person and most busy mentors won't initially have time to meet.

Build up to that first meeting by establishing a rhythm of interesting and thought-provoking email communication. Demonstrate that you're making regular progress on your product and close the feedback loop so the mentor knows you're listening, analyzing and reacting. When you do eventually ask to speak face-to-face, request a 15-minute meeting at his or her office.

Approaching a smaller number of mentors who have an actual connection to your business or your market and making sure they understand that connection early on usually leads to better long-term engagement between the mentor and the mentee.

3. Maximize the mentor relationship.
Once you've established a connection, and there is interest from both sides, it's important to build a relationship over time. One way to do this is to check in regularly by email. Mentors should love to see your progress and take pride in knowing that their input has been helpful. Send a monthly email that reminds them of your past conversations and updates them on your progress.

Ask one new question in these emails to ensure the conversation continues. It's important to keep these check-in emails short and to the point and not ask for too much at a time. For example, requesting a two-hour phone call once a week is probably going to be an unrealistic demand. Getting together at the mentor's office for 30 minutes once a quarter can be an easier request to be fulfilled once you've established a real relationship.

Need a business mentor? Carlton Brown is here to help you start your own business.

When and how to hire new employees

2012-01-06T09:18:00.003-05:00

As a business owner, one of your most important tasks is workforce management. It's your job to make sure you have the right people--and the right number of people--to keep your company running smoothly. Now let's say your business is growing and you're sensing you need to hire new employees. How can you really be sure the time is right to bring in additional staff? There are at least seven common clues:

1.Your employees are working very hard--perhaps too hard--and they're letting you know--or complaining--that they have too much to do. Complaints of this nature aren't uncommon, but your task is to determine if they're legitimate. How can you do that? Try talking to your employees and asking them to validate their concerns of being "overworked." Then look at attendance and productivity indicators to substantiate their claims. If what you find confirms their feedback, then you might decide to reorganize and restructure roles and responsibilities to better deal with the workflow. Or you could use your new knowledge as a guide to hiring additional employees.

2.Employees claim they want to take on more tasks or spend additional time on current ones--if only they had the time.

3.The growth curve for your products or services is increasing, and you identify that as a positive trend, not just a blip on the consumer radar.

4.You see an opportunity for growth and expansion in your industry or related industries, and decide that now's the time to take a calculated risk to expand. But current employees aren't available to assume additional responsibilities.

5.You determine that your employee's existing job skills and knowledge are fine for your company's current level of productivity, but to expand, you'll need either increased skills and knowledge or a new and different set of skills and knowledge.

6.Revenue is at or above target and you project it to continue; other than financially rewarding yourself and/or your employees, you wonder what to do with the increased revenue.

After taking a long, hard look at the state of your business, you decide to expand by hiring additional employees. But what do you have to take into account and do when adding a new position and a new hire? First, you need to create a comprehensive, clearly written job description that includes these factors:

Need additional advice? Contact Carlton Brown today with any of your small business questions.

Establishing business credit

2012-01-05T09:33:00.004-05:00

As an entrepreneur, did you know you have a unique opportunity to build, maintain and acquire credit both individually and as a business owner? That's good news if you're trying to build and grow a company because you won't have to rely solely on your personal credit to do that.

As a member of the business credit industry, it's been my experience that fewer then 10 percent of all entrepreneurs know about or truly understand how business credit is established and tracked-and how it affects their lives and businesses.

So let's first take a look at how personal credit differs from business credit. Then we'll discuss some steps you can take to build your business credit.

Personal Vs. Business Credit
At the point an individual with a social security number accepts their first job or applies for their first credit card, a credit profile is started with the personal credit reporting agencies. This profile, otherwise known as a credit report, is added to with every credit inquiry, credit application submitted, change of address and job change. The information is typically reported to the credit bureaus by those who are issuing credit. Eventually, the credit report becomes a statement of an individual's ability to pay back a debt.

In some cases, the same is true for businesses. When a business issues another business credit, it's referred to as trade credit. Trade, or business, credit is the single largest source of lending in the world.

Information about trade credit transactions is gathered by the business credit bureaus to create your business credit report using your business name, address and federal tax identification number (FIN), also known as an employer identification number (EIN), which you get from the IRS. The business credit bureaus use this compiled data to generate a report about your company's business credit transactions. In many cases, those issuing credit to you will rely on your business credit report to determine if they want to grant you credit and how much credit they'll give.

The major business credit bureaus that compile and provide copies of the reports are:

•Dun & Bradstreet
•Experian Business
•Equifax Business

Unfortunately, because the information provided to the business credit bureaus is sent in voluntarily--no business is required to send it in--the credit bureaus may never receive all or even any information about your business credit transactions. In fact, you could go for years racking up business credit without any of it being reported to the credit bureaus.

Establishing Business Credit
Let's start by talking about your business credit score. Business credit scores range on a scale from 0 to 100 with 75 or more considered an excellent rating. Personal credit scores, on the other hand, range from 300 to 850 with a score of 680 or high considered excellent.

It's important to note that there are many factors that affect a credit score; it's based on more than just whether you pay your bills on time. Your score can be affected by the amount of available credit you have on bank lines of credit and credit cards, the length of time you've had a credit profile, the number of inquiries made on your credit profile and more. You can find out more about what factors affect your credit rating by visiting www.myfico.com.

The mistake many business owners make is using their personal information to apply for business credit, leases and loans. By doing so, they risk having a lower personal credit score.

Why is that? The average consumer credit report gets just one inquiry per year and has 11 credit obligations, typically broken down as 7 credit cards and 4 installment loans. Business owners are not your average consumer, however, because they carry both personal and business credit. This typically doubles the number of inquiries made to their personal credit profile and the number of credit obligations they carry at any given time, all of which negatively impact their personal credit score. And because business inquiries and personal inquiries aren't separated on their personal credit report, the scores, again, is negatively affected. At the same time, by using their personal credit history to get business credit, they're not able to build their business score, which could help them attain critical business credit in the future.

The key to establishing a business credit profile and score is to find companies that will establish credit for your business without using your personal credit information and then report the payment experiences to the business credit bureaus. By reporting the information to the proper agencies, they'll help you establish your business credit profile.

The following are the basic steps you need to take to establish your business credit profile and score:

1. Form a corporation or LLC to operate your business under and obtain an FIN or EIN from the IRS. You can apply for an EIN number at the IRS website.

I'm suggesting you form a corporation or LLC as opposed to structuring your business as a sole proprietorship or partnership because with a sole proprietorship or partnership, your personal credit information could be included on your business credit report--and vice-versa. In addition, as a sole proprietor or partner in a partnership, you're personally liable for the debts of the business and all your personal assets are at risk in the event of litigation.

Corporations and LLCs, on the other hand, afford business owners liability protection, and you can build a business credit profile that's separate from your personal debts. You may be able to apply for credit under your business's name and obtain credit without a personal credit check or guarantee if the credit grantor will do so--and it's been my experience that often all you have to do is ask.

2. Register your company with the business credit bureaus.

3. Comply with the business credit market requirements. It's extremely important for businesses to meet all the requirements of the credit market in order to ensure a higher likelihood of credit approval. In fact, not being in compliance with the credit market can raise red flags with both credit bureaus and grantors. The red flags include such simple things as not having a business license or a phone line. Most businesses will not grant credit to another business that hasn't taken the steps to set the company up with the proper licenses and local, state and federal requirements. You can research the list of business credit market requirements at iBank.com.

4. Prepare financial statements and a professional business plan. These documents are often required by many credit grantors.

5. Find companies willing to grant credit to your business without a personal credit check or guarantee.

When a company grants your business credit, be certain they report the payment experiences you have with them to the business credit bureau to help build your business credit report and a financial foundation for your company.

6. Manage your debt so you don't fall into trouble making your payments, which will negatively affect your credit score.

7. Make monthly payments to credit grantors to keep your business credit profile active.

At some point, almost every business needs some type of credit. To avoid having to use your personal credit history or guarantees and to obtain the best possible terms, start the steps necessary to build a business credit profile now before you really need it.

Have additional questions about your small business? Contact Carlton Brown.

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Surviving a price war

2012-01-04T11:28:00.004-05:00

What do you do when your competitors change their prices? You really have only two choices: respond or ignore them.

If the competitor’s price goes up or down, it seems intuitive that you should move your price up or down as well. But slow down and think before you act. Consider these three issues.

1. Can you segment your customers? Price segmentation is simply charging different prices to different people for the same or a similar product or service, like student or senior discounts, VIP tickets, or coupons.

Revisit customer segmentation now. Does your competitor really serve the same customers as you? If so, can you segment the market so you lower prices only to customers who really consider this competitor?

For example, when Southwest Airlines would enter a new market offering lower prices, the major airlines responded with lower prices, but not across the board. It didn’t have to lower its first-class price, nor did it have to lower its prices for loyal business customers used to frequent-flyer perks.

Notice in this example products that are highly differentiated don’t need to be discounted, nor do products that are targeted to different customer groups. If you want to be somewhat immune to competitive price pressure, focus on differentiating your products, in other words, adding value, and targeting customer segments with offerings designed for them.

2. Do your customers know? Often your customers don’t know the prices of your competitor’s products. You need to respond only if your customers know.

3. Why did they do it? Read the industry news and your competitor's press releases. Try to find out why your competitor made a price change. It may be attempting to get rid of excess inventory or trying to fill a factory. Its costs may have gone up. The price change may be temporary and not necessary for you to follow suit.

The most common cause of price wars is someone trying to increase market share, which usually means taking share from your competitors. The fastest way to do that is by lowering your prices. You reduce your price, more people choose your offering over those of your competitors, and voilà, your market share goes up.

But usually, your competitors will lower their prices in response. They're not going to sit back and let you take their share. Now both companies have the same market share as before, only at lower prices. Certainly it wasn’t worth it.

The initial aggressor may do this repeatedly (after all, the business wants to grow market share) until it finally realizes it will not “win” a price war. By then, the damage is done.

Don’t use price as a lever to increase market share unless you are certain you are in a position to win a price war.

What does it mean to win a price war? It doesn’t mean putting your competitor out of business. What it should mean is ending up with more profit when the price war is over than when it started. But now your prices are lower, so if your profits are to be higher, you must make them up in three places: increased market share, market growth and lower costs.

These are three places where you should look for percolating price wars. While price wars are always ill-advised, you need to recognize conditions in which a competitor may choose to start and likely win a price war, and to realize when you’re in a position to win the war.

•Increased market share: Significantly increased market share is possible only for companies that don’t have large market share today. A dominant company with more than 50 percent share is less likely to start a price war than a company with 20 percent share. It’s much more painful for a dominant company to initiate or respond to price decreases.

•Market growth: In many new markets, lowering prices makes the market grow more quickly. The flat panel TV market is a recent example where the prices started high and as the prices fell, more and more people purchased them. In markets where the demand curve is steep (small price changes significantly affect overall demand), driving down prices increases the number of customers, which can grow the size of the overall pie.

•Lower costs: If a company can dramatically lower its costs by increasing volume, then it’s more likely to start a price war. Although its price per unit is lower, so is its cost per unit. This could result in an overall gross margin that’s the same or even higher than before.

You don’t have to win a price war; you have to survive it. To survive, simply get out of the way. This doesn’t mean quit the business or leave the market. It means differentiate your products and segment your customers.

In the Southwest Airlines story above, American Airlines didn’t have to lower its prices on first-class tickets because Southwest didn’t offer first-class service. It was also able to charge high prices to business travelers because Southwest didn't cater to them. Know which customers are willing to pay for what you offer.

When it comes to price wars, think hard. Who in your industry could start one? How could you survive it? How could you win it? Since you never know what your competitors are thinking, always remain vigilant controlling your costs and doing the best you can at segmenting the market, portfolio pricing, and at differentiating your products.

If you have a question about pricing products, contact Carlton Brown Companies.

Via Entrepreneur

7 Partnership mistakes to avoid

2012-01-03T08:53:00.003-05:00

From powerhouse financiers like Kohlberg Kravis Roberts to retailers like Baskin-Robbins to IT pioneers like Hewlett-Packard, business partnerships have been an important part of entrepreneurship and startup success. The reasons are simple: complementary skill sets, shared equipment or expenses, and the idea that one person with "hard" money capital can create synergy with the intellectual capital of another person so both can profit from their venture.

In theory, a partnership is a great way to start in business. In my experience, however, it's not always the best way for the typical entrepreneur to organize a business.

The tough thing about most partnerships is that they are just like marriages, and if you know anything about those statistics, you know half of all marriages don't survive. Making a marriage work involves handling a volatile mix of partnership issues: ego, money, stress, monthly overhead and day-to-day expenses. Throw in some employees you must manage, and you have a good idea of the work required to make a business partnership successful.

If you're thinking about a partnership, consider the following list and avoid the potential pitfalls:

1. Sharing capital instead of expenses.
Whenever you share your own capital--be it money, resources, information or property--you automatically give away your enterprise ability. In a perfect world, the person you are partnering with is upright, full of integrity, and not at all tempted to take this gift and run with it as his own. However, the world's not perfect. So be careful. Instead, work out an arrangement where expenses are shared in an "associative" arrangement. It also makes it easier to walk away if things go wrong.

2. Partnering with someone because you can't afford to hire.
This is a partnership killer right from the start. The scene is always the same: Bob has a business idea and Fred has the business skills, but Bob can't afford to hire Fred as an employee, so they decide to share duties, expenses and profits. What happens is both Bob and Fred end up working against each other, and Bob finds himself liable for Fred's obligations (financial and otherwise) under the partnership agreement. If you've got the idea and someone else has the skill, simply hire him or work out an independent contractor agreement. Don't give away what you don't have to.

3. Lacking a written and signed partnership agreement. Due to the nature of partnerships, every detail and obligation must be clearly defined and written out, and agreed upon by all parties. This is best done with a written legal agreement drafted by a well-qualified, mutually agreed-upon lawyer. Just make sure the attorney is well-versed in business partnerships, and be sure to keep her card handy at all times. You may need that person again when things go wrong.

4. Overlooking a limited partnership. One of the main downfalls of a partnership agreement is the assumption of liability each partner makes for the other. A way around this is a limited partnership, where the limited partner is not liable for the actions or obligations of the general partner. Again, make sure an attorney well-versed in partnership agreements writes this arrangement.

5. Lacking an out or an exit strategy.
Big-time marriages start with a pre-nuptial agreement. In business and contractual terms, a pre-nup is analogous to an exit agreement. In any partnership agreement, define the terms of an exit strategy that allows you or your partner to walk away from the partnership, or that provides options to buy out the other party. This can be done very clearly and simply--and without imploding the operations of a successful business.

6. Expecting the friendship to outlast the breakup of the partnership.
Again, from the perspective of a marriage, how many ex-couples do you know who are truly friends? Not many, I suspect. So don't go into any partnership with a friend expecting to remain friends after a partnership breakup. It may sound great to do business with your friends, but remember, in the business world, it's always business first and friendships second. Also remember, most times when the business ends, so does the friendship.

7. Having a 50/50 partnership.
Every business, including partnerships, needs a boss. If you decide to go the partnership route, make it a 60/40 or 70/30 split. Then you and the business have a point person for accountability and overall operational control. Also, keep your buyout or exit strategy clear and in your favor--benefitting you and saving problems down the road.

As a final note, I leave you with an interesting solution to the partnership issue from one of the companies mentioned earlier: Baskin-Robbins. Hopefully, it provides additional perspective.

When Burton Baskin and Irvine Robbins first considered partnering in the ice cream business, Robbins' father advised against it, thinking the compromises each man would make in getting the partnership to work would kill the product's potential. So the men each worked on their own businesses for two years before combining Robbins' five shops with Baskin's three stores under one name decided by the flip of a coin. Only after successfully launching and running their own separate businesses did the subsequent partnership actually work.

That's one partnership formula I do know of that proved effective. And if it worked for those two pioneers of retail success, it just may work for you.

Have a question about forming a business partnership? Contact Carlton Brown today.

6 mistakes to avoid when raising startup capital

2011-12-29T11:21:00.003-05:00

In the movie Little Fish, a video store manager played by Cate Blanchett applies for a bank loan to buy the business and expand into online gaming. When her application is rejected, Blanchett hurls a framed photo of the loan officer's child across the room in fury. Anyone who's suffered a similar setback knows the feeling.

The business landscape is littered with would-be entrepreneurs who've stumbled in their search for startup capital. Many requests are denied. Those who pass the test frequently have unacceptable strings attached. Some deals that close come back to bite the business owner in the form of onerous debt, insufficient revenue share or worse.

Part of the problem lies in the nature of the startup endeavor. Freshly minted entrepreneurs are typically major risks for lenders because they lack business experience, collateral to secure the loan or both. Neither family, friends, banks, venture capital firms nor angel investors are interested in losing their investment. You can't blame them for not wanting to take a risk on a venture without a reasonable probability of return.

On the other hand, many financing efforts fail because of avoidable mistakes that are made in pitching potential lenders, structuring the agreement or managing the money once the deal is done.

Steering clear of these missteps can increase your chances of success, both in obtaining startup funds and keeping the money flowing. Be sure to avoid these blunders:

1. Half-baked business plans.
There's nothing worse than going into a money meeting unprepared. If you haven't put the time and energy into writing a full-blown business plan complete with elements, such as a cogent business description, financial projections and a competitive market analysis, the people with the cash won't put the time into evaluating your proposal.

The SBA is a good source for learning how to write a business plan as well as sample formats.

2. Focusing too much on the idea and too little on the management.
It's not enough to convince potential backers that you've invented the next must-have gadget or can't-miss clothing store concept. You also need a team that can generate the revenues to repay a bank loan or provide an exit strategy for a VC or angel investor. Many business novices ignore the second part of the equation; that can doom their money quest.

The greatest racehorse in the world still needs a great jockey to a win a race. The same principle applies in business. Showing that you have recruited a top-notch salesperson, a skilled marketer, an accountant with startup experience, other key personnel, and even outside experts like an attorney or business coach who can supply professional guidance is essential to finding a funding source.

3. Not asking for enough money.
In a 2004 U.S. Bank study of reasons for small business failures, 79 percent cited "starting out with too little money" as one of the causes of their collapse. That's often because entrepreneurs who are wet behind the ears don't realize that they should calculate their borrowing needs based on their worst-case scenario instead of their best-case forecast.

An old accounting axiom says that everything will take twice as long and cost twice as much as you expect. While that may be an exaggeration, new business owners are frequently too optimistic about how soon they will begin to fill their cash pipeline and how fast the money will flow. If you're underfunded, you won't have a cushion to tide you over in the event of slow initial sales or unexpected market conditions.

4. Having too many lenders or investors.
One of the hazards of securing financing from multiple sources is managing too many relationships and expectations. It takes time away from your core business. These not-so-silent partners may have conflicting interests or demands and the consequences can be devastating.

This is particularly true when you raise money from friends and family. One hairdresser I know borrowed money from seven or eight relatives to open her own salon. The business was successful, but there were perpetual battles over how the profits should be distributed. The arguments couldn't be settled to everyone's satisfaction, so the salon was forced to close.

5. Failing to get the proper legal agreements.
This is arguably more important than a prenuptial agreement for a couple with significant individual assets. Every lender or investor eventually will need his money back, and a legal document covering everything from the terms to the timing can avoid the kind of acrimony just described.

6. Poor cash flow management.
Too many new business owners burn through their seed money too quickly and fail to reach cash flow-positive status in a timely manner. Some causal factors, such as late product deliveries and economic downturns may be beyond one's control, but the executive team is clearly at fault for others, such as unnecessary spending and overly optimistic expense/income forecasts. Financial sponsors don't take kindly to that sort of mismanagement. And if they turn off the tap, all of your hard work may go down the drain.

There are other pitfalls to avoid, but the bottom line is this: Play by the lenders' rules to get them to open their checkbook, but protect yourself at the same time. There's no point in launching a business that will eventually sink under the weight of your investors' demands. If your business plan is good enough and you approach the right people, you should be able to whistle all the way to the bank.

If you need help raising startup capital, contact Carlton Brown Companies. We are here to help you -- the entrepreneur -- every step of the way.

So you want to franchise your business ...

2011-12-28T10:43:00.004-05:00

Do you think your business is unique? Are your friends, family--and, more important, your customers--telling you every day that you should franchise your business? They may be right.

But are you sure you really know what franchising is all about? Is your concept really "franchiseable"? How does one go about franchising? What does it cost? And do you have the skills necessary to become a successful franchisor? In this article, we will answer these questions so that you will have a better understanding of franchising as an expansion strategy. And while it's not the right strategy for everyone, for some companies the explosive potential that franchising affords is unparalleled in the world of business growth.

How Franchising Works
Generally speaking, franchising means opening additional outlets through the sale of franchise rights to independent investors who will use your name and operating system. A franchisee pays a franchisor an initial franchise fee in return for the rights to open and operate a business under the franchise trademark and for training in how to operate the business. In some cases, the fee may also cover additional services such as assistance with site selection. In most systems, after the startup period, franchisees also pay an ongoing periodic royalty fee--4 percent to 10 percent of sales on average--for continued support and training in advertising, marketing, sales, operational guidance, financial and human resources consulting, and other services.

Perhaps most important from your perspective, a franchisee furnishes all of the capital required to start the business and assumes all risk for success or failure.

Why Franchise?
Franchising has many attractive features, particularly when compared with more traditional methods of expansion such as opening more outlets on your own. Typically referred to as company stores, you own and operate these locations yourself. You provide the entire investment for the startup, and while you keep all the profits the company store generates, you are also responsible for all the losses. This is great if you are passionate about preserving the values you built into your original operation and believe you are the only one who can do that. But if you want to expand more quickly and get ahead of a competitive curve, it may not be the best way to expand. Opening company locations takes capital and time--sometimes a lot of both--plus you retain all the risk if a unit doesn't do well. And how will you manage operations that may be far from your home base?

Let's look at the issue of capital first. If you have only one or two units operating, or your concept is new or unusual, bankers may not be willing to lend you money for aggressive expansion. Lenders need collateral or a history of demonstrated success over time and in different markets to make taking a chance on you sensible. For a young or unproven business, this may be an obstacle that's impossible to overcome.

And what about running company stores? Does your current organization have sufficient depth to handle the hiring, training and supervision of a number of employees who will be handling your money and your reputation--especially if they will be operating at a distance? Plus, opening company stores can be a slow proposition as it takes time to get each unit open and successfully operational; you can't be everywhere at once. And all too often a business owner spends months looking for and training a new unit manager only to see that manager leave or, worse yet, get hired by the competition.

For all of these reasons, more and more entrepreneurs are finding that franchising is the best way to expand a great business quickly with minimal capital and risk. And franchising offers a number of advantages worth considering:

•You expand using someone else's money.
•Franchisees are responsible for all hiring, leases, and unit-opening expenses, reducing your risk.
•Franchises can open quickly, often getting a new concept out ahead of the competition.
•A franchisee assumes the risk of succeeding or failing.
•Franchise owners are highly motivated operators.
So, with all of this going for it, let's take a closer look at what franchising involves:

Is Your Business "Franchisable"?
Before making the decision to franchise, you must first determine whether franchising is a viable strategy for your particular business. Here are some questions to ask yourself:

Is there a wide market for your concept?
Does the market for your particular product or service transcend your current neighborhood or region? You may need professional advice to see the bigger picture objectively. Many entrepreneurs "just know" they have a hot, new concept and they act on their convictions. But unless you have opened several prototypes in a variety of markets to test those convictions, it is important to ask yourself candidly whether or not your concept will work in other locations under other owners.

Do you have a point of differentiation?
What makes your business special? It doesn't have to be something no one has ever seen before, but it must have something about it that is unique and that will attract the public and investors. Maybe it's gourmet hot dogs, or quick made-to-order sushi or fast furniture repair. Whatever it is, it has to offer something that the public sees as unique and desirable.

Can the concept be duplicated?
How difficult or easy will it be to train inexperienced franchisees to run an operation like yours? Have you streamlined processes to make them easy to teach? Or has your success been the result of years of perseverance and relationship-building that is not readily transferable to a new owner? Will your concept flourish in a wide variety of locations?

Is your concept saleable?
Will investors--potential franchisees--see the value of your offering and be willing to commit to it? Will you be able to offer a program with real advantages for the potential franchise owner?

If you can answer yes to these questions and are interested in franchising your small business, contact Carlton Brown Companies for additional advice.

Read this before you buy a small business

2011-12-27T13:23:00.003-05:00

There's no doubt that buying an existing small business is less risky than starting one from scratch. Why? Because, unlike a startup:

•the business has equipment and inventory;
•the business already has a location, and maybe there's a few more years left on the lease;
•the business has employees, some of whom you may actually want to keep;
•the business has customers, most of whom probably will stick with you (unless this is a professional service business or practice); and
•most importantly, the business has a track record--you can look at the business' books, records and tax returns and get some sense of how much money you will make.
But there's still risk. Whenever you buy an existing business and look at its records, you're looking at the past. There's no guarantee things won't change going forward. If you're negotiating to buy a business and you think the seller is giving you a great deal, be very suspicious--there's probably something heading down the road at 90 miles an hour that will blow this business apart when it hits.

When doing your "due diligence" on a small business you want to buy, consider these five factors:

Demographic and political changes: If lots of business owners in town are looking to sell, there's a reason. How is the community changing? Is the population increasing, or declining? Is the population skewing older, or younger? Is a "miracle mile" shopping strip diverting traffic? Go to the local Planning and Development Office and see if there are any proposed zoning law changes that would change the "permitted use" at the business location.

Owner's Discretionary Income, or ODI: This is what the seller is taking out of the business after paying his suppliers, his employees, his rent, his overhead expenses and his taxes. If you can't live on the current ODI, or if ODI has been declining for several years, watch out! The business is going downhill. If the ODI seems healthy, get the seller to put it in writing, and hold back on naming your purchase price for a few months so you can confirm the seller's ODI numbers are accurate.

Beware the seller who tells you his actual ODI is greater than what he reports--if he's taking extra cash out of the till, understating income on his tax returns, or treating personal expenses as business write-offs, what are the odds he is being scrupulously honest with you?

The location of the nearest big competitor: If you're looking to buy a retail or service business, chances are there's at least one franchise or "big box" competitor that will wipe you off the map if they ever come to town. Where's the nearest outlet or franchisee? If you're buying a local hardware store, don't be afraid to call Home Depot and Lowe's and find out if they have plans to build a local store anytime soon. You might just learn what they're going to build on that 2-acre parcel just off the interstate.

Sales taxes: When you buy the assets of a business, you avoid responsibility for the seller's debts, obligations and liabilities (other than his lease and other debts you expressly agree to assume and continue paying). Except . . . for sales taxes. If your seller has been underreporting his sales taxes, and the state tax authority finds out about it, they can come after you for everything the seller owed. You can sue your seller, of course, but by then he's fled to Timbuktu and can't be tracked down.

Don't pay a penny for a small business until you know the seller has filed all state and local sales tax returns. Ask your attorney if you can get a "clearance certificate" from the state tax authority saying they won't come after you for any sales taxes your seller owed.

Local business reputation: Don't rely on just "hard data." Go to the library and skim the local newspapers going back at least five years. Is the business active in the community? Is it written up frequently? Is there negative publicity? Go to the local police station and ask if there are frequent complaints by or against the current owner.

Spend some time talking to the locals--hang out at the local library, senior center, coffee shops and public parks and talk to the "old timers" who congregate there. Yes, it's tedious and time-consuming, but it may save you from making a deal you will live to regret.

Need advice on buying a small business? Contact Carlton Brown today.

Easy ways to find new customers

2011-12-26T10:52:00.002-05:00

For too many people in business, prospecting for clients is like fishing with only a string and a pole. They know if they throw something out there, they'll draw attention. What they don't understand is that you must first be at the right fishing hole. And, second, that you have to use bait that the fish you're trying to catch like.

Let's address the right fishing hole first. Answer this question: Who is your ideal client? You should be able to list at least five criteria of your ideal client without even blinking an eye.

The answers might be something like this:

1.Between the ages of 25 and 35
2.Married
3.Living within five miles of my retail location
4.Has school-aged children
5.Drives at least 30 miles per week

If you can't list at least five characteristics of the people who you need to reach, your business isn't going very far very fast. To get your answer quickly, consider your top three existing clients. What do they have in common? The answer to that question will get you started.

Then, start picturing your clients. Are they grandmas? Businesspeople? Teenagers? Start thinking about them as categories of clients. You just might have a service that teens enjoy, but who invests the money in it? Grandma, mom and dad. So you'll need more than one marketing strategy to make sales, won't you?

Next, you need to know how to reach these people.

If you sell to soccer moms, where will you find them besides soccer fields? Your list might look like this: grocery stores, gas stations, quick-stop stores, car washes, sporting goods stores. You can advertise on the bulletin board at the local car wash or grocery store--preferably ones that are close to soccer or baseball fields. Even better, sponsor a local kids' team. The parents feel obligated to use the services of those who help pay for uniforms, equipment, programs and the various fees involved in children's sports.

If you sell to those who earn very high incomes, where will they be found? Country clubs? The marina? Nice restaurants? Where should you advertise? Where they'll be found, of course. Okay, it might not be feasible to advertise at the country club, but you can certainly advertise in publications that'll be found there. Advertise where the other companies of your caliber advertise. Check to see if you can invest in the mailing list of everyone who docks a boat at the local marina. Mailing lists are often available if you ask at the right place.

No matter who your future product purchasers are, you can get the names of new ones from existing clients. All you need to do is ask. Don't ask if they know anyone, ask: "What other parents of the soccer players might have a need for new tires?" "Who do you most enjoy playing golf with at the country club, Mr. Stevens?"

Or, even better, offer existing clients special discounts or bonuses for sending in new clients. I'm sure you've heard or seen advertising where existing clients are offered a 10% discount or free car wash for sending in three new clients. They're given coupons with codes on them to hand out to others. You don't have to go crazy with this costing you money. You might offer a free $5 Starbucks gift card or a coupon worth a discount on the service of a neighboring business. Chances are that the neighboring business will reciprocate on your behalf. The key to bonuses is offering something good enough that the client will think is worth their while to find others to send your way, even if it's just in a passing conversation.

Once you wrap your mind around the information covered here, you'll know where to find the best fishing holes and what bait to use!

Need additional advice on how to prospect customers? Contact Carlton Brown today.

How to build an awesome sales team

2011-12-22T08:55:00.002-05:00

When you're starting out, you may be sales manager, marketing director and lone salesperson all in one--plus filling whatever other spots exist on the organizational chart. As you grow, however, you'll find you need additional people to handle specialized jobs. These will someday include a chief financial officer and vice president of operations, among others. But one of the first specializations in which you're likely to need to hire is sales. This makes sense because sales are what drive your company's growth. All other things being equal, the more salespeople you have, the more sales you will generate. So adding sales personnel and improving your existing sales staff are essential parts of growing your company.

Evaluating Your Sales Force
Maybe your sales force is fine the way it is. Maybe not. How can you tell? Evaluating your sales force is an important step in the process of deciding whether and how to grow your sales team. If your existing sales force is fine and will be more than adequate to fuel future growth, you still might need some additional training or perhaps a revamped compensation package. On the other hand, your sales force may need to grow by a few heads, or you may choose to stay the same size but have different people filling the sales positions.

Step one in evaluating your sales force is to decide what you want it to do for you. For some companies that do most of their selling through mail order or the Internet, a sales force is strictly an option. In this case, you may expect your sales force to handle only the larger accounts, leaving the smaller orders to customer service personnel and order-takers. For other companies, however, the salesperson is the most visible--and perhaps the only--outward manifestation of the company seen by customers. This type of salesperson carries a heavy load. He or she has to uphold the company's image, hold the customers' hands, interface with delivery and repair departments at headquarters, and, of course, get the sale.

It won't require a lot of thought for you to come up with a good description of what you want your sales force to do. Make sure you're not evaluating your sales force based on some other company's needs. For instance, if your salespeople are primarily charged with following up on leads generated by your advertising, don't penalize them if they aren't making a lot of cold calls. Once you decide what jobs your sales force is intended for, simply check their performance against the requirements. The key measure when it comes to evaluating a sales force is sales productivity.

Measuring Sales Productivity
The simplest measure of sales productivity is the dollar amount of sales per salesperson. That's easy enough to figure out: Just divide the volume of sales by the number of salespeople on staff. That will give you an average sales productivity figure and let you know how the average salesperson in your organization is doing. More useful, though, is to know how each individual salesperson is doing compared to the average. You may have a handful of relatively productive people who are carrying the load for a raft of underperformers. This is the kind of information you'll need to know to decide whether to make a change.

Be warned, though: Sales productivity may involve more than simply generating dollars of sales. Your sales force may be moving a lot of product now but costing you sales later by alienating customers with poor service. They may be making promises you cannot deliver on, overburdening your production and shipping departments. They may be selling a lot of the wrong products (items with low margins or high support costs) while ignoring your more profitable lines. Check to see if certain salespeople have large numbers of returns or tend to sell to customers who don't pass credit checks. These salespeople could be costing you more than they're worth.

Hiring Salespeople
Adding salespeople can result in steadily increasing sales. This can free you up to spend time and energy on other tasks. Hiring salespeople could also hurt sales, erode profits, damage valuable customer relationships, and destroy your image in the marketplace. The difference between these two scenarios is the difference between hiring the right salespeople and the wrong ones.

Salespeople aren't just the people responsible for building your bottom line. They're also your front-line troops, the ones with the most daily contact with your customers. With those caveats in mind, it's important to not only grow your sales force, but to grow it properly.

To start with, understand that there may not be any truly bad salespeople. There may just be good salespeople in the wrong positions. To hire the right salesperson for the job, you have to understand and be able to describe what the job is. That means clarifying whether this sales position is intended to immediately generate sales or perhaps develop contacts for a sales cycle that may stretch into months or years. Do you want someone who is a closer or one who takes more of a consultative approach? Matching your company's sales needs and selling style to your new hires is the first step in getting good salespeople.

Few salespeople are motivated by altruism, and misunderstanding your company's compensation package is one of the main reasons for sales staff dissatisfaction and turnover. For all potential new hires, explain precisely what the compensation plan is. In addition, clarify the territory, your performance expectations, any training you will offer, and any sales tools you will provide. You should also provide candidates with a thumbnail description of the market and the competition. Then you will know that you've explained the opportunity accurately to anyone who's interested.

Don't stop by describing your needs. Imagine the ideal salesperson for the job, including his or her personality, experience, energy level, reputation and abilities. You may not find someone exactly like that, but if you don't know what you want, the odds of making a bad hiring decision are high.

Only now should you actually start looking for salespeople. But before dashing out a three-line ad and calling the classified department of your local newspaper, consider some other options:

•Look internally. You may have technical, support, operations or administrative people who would and could successfully move into sales. Post the ad on a bulletin board and see what happens.
•Ask for employee referrals. Chances are your existing employees know the kind of people who would be happy working for you. They may be able to suggest some people for you to contact.
•Network with suppliers, customers, colleagues, advisors and social contacts. This can be cheaper, faster and more reliable than advertising to the general public.
•Check with professional associations. They may have job lines to help members find employees.
•Try online advertising. The speed, freshness and searchability of online job banks make them attractive options for both candidates and employers.
•Check with your local college. You may be able to hire a recent graduate who's enthusiastic, effective and less expensive than a seasoned professional.
•Contact headhunters. Headhunters specializing in sales personnel aren't cheap, but when labor markets are tight, it may be worth the cost to find a solid salesperson.
Consider using temporary and staffing services. Temporary and staffing services can provide you with sales and marketing personnel on a temporary, temp-to-perm, or permanent direct-hire basis.

Need additional advice on growing your small business? Contact Carlton Brown today.

5 Ways to Save a Sale

2011-12-21T11:36:00.002-05:00

Having a keen eye for when a sale is going sour takes savvy. Here are five red flags and strategies for saving the sale:

No. 1: If a Potential Client Seems IndifferentA client who is interested in doing business with you should have questions and concerns. If they don't outright reject you but don't have any questions either, be on the alert, warns Victor Cheng, author of the book Extreme Revenue Growth (Innovation Press, 2007).

To resolve this problem, he suggests creating more of an advisory relationship with clients. You can let them know that you'll help either to solve their problem or point them in the direction of another business that might be a better fit. Offering to help people find other vendors might seem counterintuitive, but it can go a long way to earn the trust you may need to win over a client, Cheng says. "People will share more with an advisor than a salesperson. It's more of a dialogue than a broadcast."

No. 2: If There's No Hard Deadline For a Decision Having urgency around a sale is important, Cheng believes. Early in the process, ask potential clients about their timeframe. You want to prioritize those companies that have a hard deadline.

You can find ways to firm up deadlines, says Rich Sloan, co-founder of StartupNation.com, a Birmingham, Mich.-based business-advice website. He suggests limited-time offers or discounts to create urgency around a sale. "The only way you get someone engaged is to find their buttons," Sloan says. Perhaps point out what the competition is doing, or identify the financial risk involved in not acting quickly on the sale.

No. 3: If You Aren't Dealing With the Decision MakerYou may start out talking with a junior-level employee who is vetting options, but beware if you aren't put in touch with the decision maker after a few conversations. It's probably a sign the company isn't serious about buying, Cheng says.

Getting past that roadblock can be challenging. The bigger the organization you are dealing with, the more layers of management you likely will have to penetrate, Sloan says. He recommends creating a presentation that your initial contact can easily show to upper management. You also might request a quick conference call with the senior-level person involved. "It's a sticky situation because you need to be respectful of the person you are talking to and not undermine them," Sloan says.

No. 4: If Your Price is Too High People generally object to a price because they believe they can find the same product or service for less or because you're trying to sell more than they need, Cheng says.

If your competitors are offering a lower price, focus on how you can provide added value. But if you're offering more than a client needs, you may need to scale back the initial proposal, Cheng says. You also could offer creative payment alternatives, Sloan suggests, such as incentives on the first purchase if the customer continues to buy more.

No. 5: If You're Asked For a Proposal Instead of a ConversationWhen potential clients ask for a proposal before agreeing to talk with you, it's usually a sign they're simply gathering price quotes from vendors, Cheng says.

Before submitting a proposal, ask what the client is looking for and what criteria will be used to make the decision. Reaching a verbal understanding on those issues increases the likelihood that you'll get the sale. "The problem with a proposal is there is no chance for them to tell you what is wrong with it," Cheng says, "as opposed to working through all the nuances verbally."

Need help with your small business? Contact Carlton Brown today!

Is your business making you overweight?

2011-12-20T12:05:00.002-05:00

Keeping a business afloat in this tough economy can be a big challenge. Lots of owners are putting in more time at work -- and it's taking a toll on their health, a new study shows.

The study of more than 2,000 business owners, from business-research company Manta, showed new business activity rose 12 percent in the third quarter. Overall, business owners declared it a good year -- 72 percent said they had a successful 2011.

But hitting the gym -- not so much.

In the study, 44 percent of respondents said the tougher business conditions this year sent their work/life balance out of whack:

•One in three said they worked out less
•22 percent report they've gained weight
•14 percent said they lose their temper and argue more with family and co-workers

The prime cause of the additional flab and missed gym appointments? More work hours.

Well more than half of respondents -- 63 percent -- said they're averaging more than 40 hours a week at work. Nearly one in ten said they put in more like 70 hours a week.

On a positive note, most business owners surveyed seemed to see 2011 as a dark tunnel from which they expect to shortly emerge. Over 90 percent of the owners were optimistic about their company's growth potential for next year.

Word to the wise: Don't let work knock out your workouts. It's important to stay healthy and fit -- or your health will suffer, and then your business will ultimately suffer, too.

One way to do that is to delegate more. Another is to look at how your business is set up.

Does your business model allow you to walk away from the business and take breaks, or do you have to be there all the time? Maybe take the holidays to think about how your business runs -- and how it could be restructured to need less face time from you.

Need help with your small business? Contact Carlton Brown Companies today!

Are you ready to start your own business?

2011-12-19T15:00:00.005-05:00

If you feel trapped in a cubicle, the thought of being your own boss can be absolutely intoxicating. But are you really ready to declare your independence from that steady paycheck and start your own business?

Consider this seven-point checklist before you make the leap to business ownership. Of course, you don't need to check off every single point on the list to ensure business success, as strengths in one area may offset weaknesses in another. But be warned, if you wait for all stars to align perfectly, you may never take the plunge.

1. Owning a business is all you can think about. If starting your own business is all you can think about, that's a good sign to give it a shot, says Chicago-area startup expert Carol Roth, author of "The Entrepreneur Equation" (Bella Books, 2011). But, she warns, the reality of starting a business is often a lot harder than many could imagine.

"In some cases, people have business 'beer goggles,' " Roth says. "They see an idea and it looks really good to them, so they go for it. Then, they wake up to the reality and it doesn't look so good. You have to know what you're getting into."

2. You've done all the homework. To make sure your business venture is more than just a pipe dream you need to have a firm grasp of what it will take to make your startup a success.

Aside from coming in with previous experience in the sector, Roth says interviewing people who've taken the plunge, reading books and articles about starting a business, and spending time studying the market and potential competition are all essential in the preparation process. If you've done that and you're still as enthusiastic about your idea, you could soon be ready to hang your shingle, she says.

3. All is quiet on the home front. If you're experiencing personal turmoil, such as an illness or other crisis in the family, it's probably not the best time to launch a business, says Niwot, Colo., startup consultant Tommi Wolfe. If you don't have the support of those closest to you, or they are resentful of the sacrifices that a business requires, it's going to make the road to entrepreneurship tougher.

4. You've got a financial cushion and a customer base. Before you say, as the song goes, "Take this job and shove it," it's important to have some resources, including savings and a few customers, says Roth. You need to have enough money to see you through until your business can sustain itself, she adds.

5. You can pinch a penny until it screams. Frugality is a good trait for an entrepreneur, whether you're bootstrapping or starting out with a stash of cash.

"Do the business plan and the financial statements. Figure out how much you'll realistically be making in a year. Understand the expenses and don't be tempted to spend money when you don't need to," Roth says.

6. No one has to tell you what to do. Are you able to get things done without someone telling you to do them? Are you constantly looking for ways to improve operations? Self-motivation is a critical quality for entrepreneurs, says Wolfe. If you have it, that's another sign that you'd do well on your own.

7. You're comfortable with being uncomfortable. Entrepreneurs need to be able to live with the risk and uncertainty that comes with running a business, says Wolfe. If you're risk averse you will have a tougher time riding the roller coaster of business ownership, she says.

At the same time, experts say you're less likely to regret taking the plunge than never taking the chance at all.

"Most successful entrepreneurs have tried and failed many times, but they pressed on and eventually made a success of it," Wolfe says.

If you need guidance in starting your small business, contact Carlton Brown Companies today!