LostJobStartBusiness

This blog helps people who have lost their job to start a business. It contains hints, tips, templates, and ebooks on how to start a business in the current economic situation.



27 March 2009 0 Comments

How to Guide on Financial Projections for a Business Start-up

Here is a “how to” guide on building financial projections for your business plan.

Financial Projections for Your Business Plan Financial Projections for Your Business Plan Feargal Byrne

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26 March 2009 0 Comments

Geithner calls for regulation of Venture Capital

US Treasury Secretary Tim Geithner has called for tougher rules on Private Equity.  These new rules will cover Hedge Funds and also Venture Capital funds. This would require some Venture Capital  firms who manage assets of a certain size to register with the SEC.  However, smaller Venture Capital firms will probably not have to register.

It is unclear how this will pan out. However, I can’t see it having a noticeable impact on business start-ups in the US.  This is more to do with the nature of VC funding rather than the possible new regulations.

The extent and type of the regulation and the size requirements to register with the SEC must be reviewed in order to make any predictions on the future implications of this regulation.

Initially, I think that from a start-up’s perspective things won’t change very much.  It seems that only the largest of VC funds will come under any new regulation.

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18 March 2009 0 Comments

E-books as viral marketing tools for your business.

Major publishers such as Random House and Simon & Schuster have partnered with Scribd to distribute e-books for free. These publishers see huge benefits in using free e-books to generate a buzz about authors.

For more details check out this Wired article by Chris Snyder.

E-books are an important part of your viral marketing arsenal. Providing high quality content that helps people and is related to what you sell is essential to marketing your start-up. You should consider doing this before you spend $1 on advertising.

It always helps if your business is your passion. This gives you the edge in the motivation stakes. The more useful your content, the larger you viral footprint will be. In the new marketing paradigm, what goes around comes around. If you create something that people find helpful or interesting you will be rewarded by word of mouth. The magic words are when someone says “read this”, “watch this” or “try this” to their friends. That’s what you are always trying to achieve.

You should also make it easy for people to recommend your articles, e-books, videos etc. For instance, make it easy for them to share your content on the social networking/bookmarking sites. Remember, word of mouth is the most precious thing for a start-up.

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22 February 2009 0 Comments

NYC Mayor Bloomberg says “follow in my footsteps” to laid off bankers.

Mike Bloomberg is to invest $45 million in financial start ups that are set up by laid off bankers. Some of this money will go on incubator units to help these new start ups get off the ground. Mayor Bloomberg sees opportunity in this recession, and as a result, New York City could become the Silicon Valley of the next decade. This could be the spark that ignites a firestorm of start up activity in NYC.

Hopefully others are watching and will follow suit.

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19 February 2009 1 Comment

Market Research – Scientific vs Organic

I’m sure a lot of you who have sought advice from business experts have been told by them that the first thing you should do is “market research”.  By this they mean a scientific study to determine if your business idea could possibly be made into a profitable business. While such a study does indeed have uses in the word of academia and is used by many large companies to determine investment opportunities, is it sub-optimal for a business start up.Such a study would involve questionnaires, interviews and focus groups along with desk research. There are two ways you could do this. The first one is to pay for a market research professional to do it. However, this is not practical for most start ups because it’s too expensive.

Secondly, you could do it yourself. However, in reality, this is not practical either. It will take months to put together a worthwhile study. When you have it completed, investors won’t believe it because you have done it yourself.  It’s not that they think you are not trustworthy, but that naturally, you are biased even if it’s just on a subconscious level.

Instead of doing scientific market research, I suggest that you do market research in conjunction with the day to day operation of your business.You should get to market as fast as possible and test and measure constantly. You cannot make any solid decisions without real market feedback. You must use this market feedback to change your product and make it better. This results in constant incremental improvement. Also, the main advantage of Organic Market Research is that you have an operating business with real market feedback. You will have traction and be in a much better position to get investment.

Instead of spending months doing market research alone, you spend it developing a real product (prototype, beta), getting early adopters and doing real world market research. It’s pretty obvious which type of market research wins.

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18 February 2009 0 Comments

5 good things about starting a business in this recession

A recession may seem to be a bad time to start a business. However, I beg to differ. Recessions are like naturally occurring forest fires. A lot of dead wood is eliminated and new green shoots soon appear.  It should be your objective to become one of these new green shoots.

We should also remember that it’s 2009, and that technology available to entrepreneurs right now has changed the game. In this recession more and more start ups are looking to leverage the latest technology.

There are many advantages to starting up in this recession.  Here are 5 of the main ones.

1) More scope to negotiate down professional fees.

Unfortunately, professional fees are part and parcel of starting a business. However, in a recession you have more power to negotiate these down.  As a result, should should be able to secure good value for your accounting and legal fees.

2) You can attract high quality hires.

During a boom, most of the good talent are working for large companies. They are paid more than you could ever afford. In a recession, many great people are laid off and therefore are available for a start up to hire.

3) You gotta be lean.

Investment is down, but this is a good thing. It forces you to bootstrap more.  You must build a business model that is extremely lean.  External investment in a recession is likely to happen at a later stage of development than in a boom. This means that you will give up less of your company in exchange for investment.  Although it is harder in the short term, in the long term you and your business will be better off.

4) Marketing has changed, in a good way.

It’s 2009 and marketing has changed.  No longer do you need a massive marketing budget.  The era of agressive advertising is over. A start up can get out there by using the internet to amplify word of mouth.

5) Technology helps cut down on your cash burn.

Using technology such as skype, base camp etc.  instead of paying for a traditional phone and renting office space. Free software can be used such as  OpenOffice, Paint.net, CamStudio etc.

As you can see, you can save thousands a year in start up costs.

All in all, the key is to position your company to take advantage of the next upswing.

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5 February 2009 0 Comments

Changing the “Employee Mentality”

I have noticed time and time again that when people who have previously been in employment “go out on their own” they seem to still carry with them the same culture as the organization they have left. They wear the same clothes to work. They have a similar signature on their email. They still behave as if they are working for a multinational.

These are the symptoms of the “Employee Mentality”. It’s important to change this mindset and move into the “Boss Mentality”. No, I’m not talking about acting like Bruce Springsteen all the time. I’m talking about projecting confidence and controlling your own destiny. I’m talking about being decisive and accepting failure as the natural process of working out the best way to do things.

An important lesson that I have learned is not to get bogged down in formalities. Formalities and start up companies do not like each other, they will never get along and there is no point in trying to make them get along. Why is this? you ask.

Well, speed of decision making and flexibility, in other words lack of formalities are competitive advantages for a small new business. Don’t deny your new business these tools of success just because the company you worked for had formal processes and systems for almost everything.

Remember, the only way to find out if something will work or not, is to try it out in the real world. Business in 2009 is different to business in 1999. It’s also different to business in 2006. Business in 2010 will probably be different to business in 2009. It’s changing and it’s changing fast. You have to be super flexible. The companies that are laying off workers right now all have outdated business models and cost structures that are no longer viable. They can’t adapt.

The single biggest error you can make in starting your business is continuing your “Employee Mentality”. You must change this. However, it’s not easy. You have been living in that environment for the last number of years. It will take time to change your mindset. You need to acclimatize. However, it’s important that you begin to take those incremental steps towards the “Boss Mentality”.

Now is the time for you to fulfill your potential by starting to drop the “Employee Mentality” and assuming the “Boss Mentality”.

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