INSANITY VERSUS CASH FLOW!

I recently was listening to a podcast of the Frank Peters show focusing on Angel Investing. The guest on his show, Permjot Valia, is an early stage investor. He has an interesting perspective on the start-up and Angel investing worlds.

He had a very interesting philosophy with regards to what financial metrics are most important in a start-up. Often entrepreneurs manage their entire business around the profit and loss statement. Permjot recommends managing from a cash flow perspective.

Here's his philosophy in summary:

- Focusing on Revenue = Insanity
- Focusing on Profit = Sanity
- Focusing on Cash Flow = Reality

Here's a good article from Entreprenuer that started with this question...

Q: Can you give me some tips on managing the cash flow of my new business?

VATORTV VENTURE CAPITAL STATUS!

Here's a good video from Vator.tv about the current status of transactions in the Venture Capital world.

See this video on Vator.tv »

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AVOID THESE SELLING ERRORS!

I was just talking with a few folks here at Start-Up Smart about this article to take a random and unscientific survey. Of the half dozen people that I spoke with all of them said they have been on both sides of the "table" that is outlined below...

This article below comes from Aaron with SmartDraw.com.

How Not to Make a Marketing Presentation

Recently, one of my coworkers slid a handout from a marketing presentation he had attended across my desk and asked me what I thought of the material. This company was trying to sell us something that would increase our revenue, cut our costs, etc… the typical promises in every business-to-business pitch. This company was trying to sell us on some new advertising opportunities, specifically, and we receive at least a dozen proposals of this sort per week.
The marketing materials were very polished and it was clear that the salespeople from this company had done their homework on the nature of our business—well, most of their homework anyway. The pitch was very detailed; it told us exactly what we were paying for and outlined how we would potentially benefit from this company’s services. It was, in my book, one of the best-presented pitches I’ve ever seen. But it contained a handful of fatal errors that forced me and others to say “no thanks.”

Error #1: Make Your Customers Feel like Soviet Space Dogs

The first mistake this company made was not including any testimonials from other customers who tried this service and had a good experience. The proposal in this instance was extraordinarily expensive, and the company didn’t do much to assuage our concerns over the price tag by way of sharing the hopefully positive experiences of other customers.
No customer wants to feel like a guinea pig or a Soviet space dog. They want to know that other customers who’ve tried your product or service have achieved positive results and satisfaction. If you fail to provide that kind of reassurance over the course of your presentation, it leaves each potential customer feeling exposed. No amount of good presentation skills or masterfully-designed PowerPoint® slides will be able to overcome the lack of assurance left by not including any meaningful, specific testimonial information.

Error #2: Don’t Stand By Your Product

If a customer asks you “so, if we agree to spend all of this money on your product, what will you do if it doesn’t deliver everything that you’ve promised?” during the course of a marketing or sales presentation, you should probably avoid all of the following responses:

• “We can’t guarantee that it will work, but we’re pretty sure that it will work!”


• “Well, it may not work out the first time; you might actually have to use the service a couple of times before you get the results that you’re looking for. But we’re sure that we can deliver them eventually.”


• “Well we won’t be able to refund your money, but we will be able to help you figure out how to use the service better down the road!”

The little handout I read made it clear that we had to pay for the service upfront and all of the risk was on us. When faced with a risky or expensive proposal, customers want to know that there’s a degree of shared risk between both the vendor and the buyer; it helps ease whatever concerns customers may have about purchasing your product, knowing they won’t absorb the full damage if the product or service doesn't pan out.

There are a number of ways to let customers get a taste of whether or not your product will work for them, and it’s an easier sell when you can offer them a guarantee or a trial of some kind. Telling your prospects to essentially roll the dice on you, however, is the last thing you should do—unless you’re presenting to tourists in Las Vegas.

Customers want to feel safe and confident when they commit to a purchase—especially large ones. And this company, despite their professional-looking slide deck and knowledge of how our company works, actually made us feel more uncomfortable about committing to a large advertising purchase. This is because they did nothing to mitigate our concerns about the risks.

This presentation didn’t fail because of bad design aesthetics or because it looked unprofessional; the presentation failed because it lacked the critical substance of testimonials and risk-sharing opportunities. Presentation can’t mend the gaps created by lack of substance.

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LEAVE ME A MESSAGE...BEEP!

As entrepreneurs, we wear a lot of hats. One of those hats is to fill the role of a Sales Person. As sales people, we leave a lot of voicemail messages in our endless pursuit to turn potential customers into revenue streams and build client relationships. When leaving voicemails for a prospect or a customer, you can dramatically increase your chances of a return call by putting yourself in their shoes. In other words leave a message that speaks to their perspective.

One of the most common mistakes sales people make when leaving messages for potential customers is talking too much about themselves and their company. BLAH BLAH BLAH. If you consider what your prospect might be thinking when they listen to your message, you want to avoid thoughts like, "So what?" or "How will that help me?"

Using a valid business reason is an effective way to craft a compelling reason for your client or prospective client to call you back. Your potential customers are as busy as you are, so messages longer than 20 seconds will start to decrease your chance of a call back right out of the gate.

Criteria for a good message:
- Impacts what your recipient wants to accomplish.
- Sets the call as a high priority.
- States "what’s in it for me" to the recipient.
- Is clear, concise, and complete.