June 2017 – EOY

Ten ways to hook investors onto your big idea

Posted on June 30, 2017 by Business Partners Limited

A great many excellent business ideas never get past the spreadsheet stage and into the real world simply because entrepreneurs fail to connect to the people with enough money and risk appetite to help them implement them.

Finding the right investors and pitching your idea effectively is a business skill that can be worked on, says David Morobe, BUSINESS/PARTNERS regional general manager. He offers the following ten tips to get you started:

Get yourself connected and network. Investors are out there, and they are usually only one or two people away from those with whom you do business with anyway. Your accountant or suppliers, for example, can put you in touch with potential investors, or at least someone who knows a potential investor. Emphasize the “work” in “network” – investigate and ask for referrals.

Prepare and sharpen a concise story around your idea that contains no waffle, but only the essential elements that will interest an investor – marketability, sustainability and your own passion for the project. Your value proposition should come through succinctly – what are you offering to whom, and why will they be prepared to buy it.

Make sure that you know all the aspects of your idea, its market and industry. Investors want to know that you are experienced in the industry in which you want them to invest their money. Therefore, the more you have worked on your plan, even to the point of taking your idea to the market on a small scale, the better.

Have a detailed business plan ready. Not only will it help to give you the knowledge mentioned in the previous point, but the fact that you will immediately be able to send or present your plan if someone wants to have a closer look will help to convince potential investors of your readiness. Besides, knowing that you can back up your pitch with a plan will give you confidence.

It helps if your plan has a powerful executive summary, the written equivalent of your verbal pitch mentioned in point 2. It must encapsulate your business plan precisely, without waffle or exaggeration. Chances are that the investors whom you will be targeting have seen many business plans in their lives, and they will not bother to read further if the executive summary does not whet their appetite.

Be prepared for a face-to-face presentation, more detailed than the one in point 2, for when an investor calls you in for a follow-up meeting.

It is almost guaranteed nowadays that an investor who becomes interested in your idea will check up on you on the internet. It helps to have a good website around your idea and a strong presence on social media in which your successes are highlighted, not only in your current business but in previous ventures and jobs. Most astute investors investigate the strength of both the business idea and the prowess of the entrepreneur.

Once you’ve made contact with a potential investor, stay in touch, even if it is just by asking for advice, for example on how an investment of the kind you are looking for can best be structured.

Be open to feedback from potential investors, who would want to see that you are open-minded and adaptable. Besides, chances are that the investors you are pitching to are experienced business people themselves, and can enhance your ideas with their advice whether they decide to invest in your idea or not.

Have a realistic exit strategy for the investor, who unlike you does not necessarily want to remain in the business in the long term. The investor’s thinking is likely to be: “How do I make the best return possible on this investment?” The time frames that most investors work with are between three and seven years.

Cold-calling is a waste of time

Posted on June 30, 2017 by Sanlam

By Jannie Rossouw

Head: Sanlam Business Market

The quest for finding new clients and increasing sales is a reality for any commercial business. There are many different ways to attract new clients to our business. The practice of cold-calling has been and still is part of the sales strategy of most businesses. But is this practice worth our while?

Cold-calling can be perceived as a waste of time for the following reasons:

The client receives an unsolicited and unexpected contact (e-mail, phone call, sales visit).
Clients might be contacted who are not in the target market of the business – a waste of effort and money.
It destroys the “status” of the sales person as a “business equal” of the client.
Valuable time is wasted because the success rate is very low (less than 1 to 5% in most cases).
It puts the sales person on the back foot, as the client will, in most cases, be uncomfortable with the unsolicited contact.

The perfect sales scenario: When a client has a need for our product/service and we are present in that moment to solve the need.

The following client procurement practices are proven to be more productive than cold-calling:

As business owner you firstly need to identify the niche target market most likely to buy your product or service.

The second step is to develop a marketing mix of elements that complement one another and ultimately lead to a directed call to action.

The marketing mix may include one or more of the following elements, depending on the allocated marketing budget:

Radio advertisement(s) – call to action directed at telephone number, e-mail or website
Advertising – call to action directed at telephone number, e-mail or website
Public relations – vest yourself as a knowledge resource and solution to (a) specific client need(s) – call to action is usually not allowed, but you will be recognised as the author of the content, linking it back to your brand and business name.
Client events – vest yourself as a knowledge resource and solution to (a) specific client need(s) – call to action can be directed at you, telephone number, e-mail or website.
Website – the basic elements to be included in any website should be:

What we do and who we are.
How we can resolve your need as client.
Where you can get hold of me/us.

Google AdWords – bid on words and phrases that speak to client needs and direct enquiries to the contact number or e-mail of the business.
Campaign pages – develop a single webpage (hosted on the back of your website, not part of the visible navigation) which addresses a single client need and positions your solution. The call to action is directed to the telephone number and e-mail address of the business.
Email campaigns – work with pre-selected and targeted datasets which are POPI compliant (i.e. clients gave permission to be contacted). The focus is on a client need and how you can resolve it.
LinkedIn – repurpose the articles which you wrote for Public Relations application and post it on the LinkedIn page of your business.
Blog – the same content used for LinkedIn can also be published here. The underlying assumption is that people use different media and communication platforms to inform themselves.

The underlying philosophy is to apply procurement practices which will result in (a) qualified clients and (b) solvable needs.

Some food for thought – The definitions of “Buying” and “Selling” as presented by Frank J. Rumbauskas Jr. (American author, businessman, and satirist).

Buying: The act of willingly acquiring for money something that you want or need. The buyer generally leaves the transaction feeling happy and satisfied.

Selling: Attempting to convince another that they want or need your product or service despite the fact that they may not. The purchaser typically leaves the transaction with a strong feeling of “buyer’s remorse”.

To support business owners with the important task of business planning, Sanlam gives you free access to the book Your Annual Business Game Plan for Success, which provides an easy and straightforward framework needed to draft a well-crafted game plan that will create the positive change and growth necessary for business success.

Go to www.sanlamgameplan.co.za to download your free copy.

What entrepreneurs wish they’d known when they were starting out

Posted on June 30, 2017 by Webmaster

The 2016 Entrepreneur of the Year® winners discuss the advice they would share with their younger selves

In the absence of concrete guidance and mentorship, the path to becoming a successful entrepreneur can be a very lonely one. As such, this path is too often forged solely by way of trial and error – frequently involving costly mistakes and countless sacrifices along the way.

In order to make this path less formidable for ‘up-and-coming’ entrepreneurs, we sat down with the winners of the 2016 Entrepreneur of the Year® competition to discuss the advice that they would share with their younger selves.

Vanessa Jacobs of Sow Delicious® and Emerging Business Entrepreneur of the Year® says that, above all, she would remind her younger self to never trade passion for money. “If you follow the money, it will seem to elude you and leave your life empty, but if you work for the love of it, then the money will follow you instead.

“It is also important to always remain teachable and view every set-back as a gift, because at its very core lies a solution of how to use it to excel to greater heights,” she adds.

This sentiment of remaining teachable is echoed in the advice offered by the owner and founder of Khonology, Michael Roberts, Job Creator of the Year ®. “Understand economics and how the world works, but be open to views, ideas and take advice. Look for inspiration in other people’s success stories and surround yourself with positive and focused people.”

Overall Entrepreneur of the Year®, Johan Eksteen of Agricon, urges young entrepreneurs to realise that they are loose cannons – something that he says is both a good and a bad thing. “Young entrepreneurs have untapped potential as they have not yet been corrupted by the harsh realities of the economy. They dream without limits and are therefore very creative and original. In this lies the caveat that it is both a good and a bad thing to be a loose cannon.

“Many ideas are potentially great ideas, but the key is to implement these ideas in real life. If they listen too much or too often to people with experience, they may be discouraged to even try, and therefore their great innovation may go undeveloped. However, if they do not take up some mentorship and advice, they may have no clue as to how they should turn the idea into a business.”

In this sense, Eksteen points out that strong mentorship encourages and guides a young entrepreneur is important, but also highlights the risk of getting the wrong mentor. “Choosing the right mentor is crucial, as the last thing you need as a young, driven entrepreneur is a passion killer.”

Carl Pretorius, managing director of Just Trees and Medium Business Entrepreneur of the Year®, says that he found having an older mentor whom he could bounce ideas off and get advice from to be very helpful. “When I was younger, I often thought that I knew more about certain matters than I really did. I would encourage young entrepreneurs to be honest with themselves about what they know and do not know, and then get help with or learn about the latter.”

Furthermore, Eksteen says that young entrepreneurs should realise that it can take up to five years to put a solid business concept together and to start making serious money. “In this time, the entrepreneur must remember that they are not managing a ready-made concept, so it requires constant change and sharp entrepreneurial tenacity to succeed.”

Eksteen finishes off with a final piece of advice that can and should be applied at any stage along the entrepreneurial journey: “Most entrepreneurs look down at the road they are on, and forget to check the direction in which they go. So keep your one eye on the potholes and the other on the road.”