Dash for cash
I’m the founder of a company and we’ve developed an amazing new product. We’ve got a wide range of potential and actual customers and we’re growing fast, but for now we still need to support ourselves by offering consulting services, and we’re struggling with the cost and length of time it takes to sell our product. I want to raise some money so we can focus on selling rather than consulting. How do I do that? – Potential, Auckland
You aren’t alone, and indeed this is a remarkably common situation. With startups it’s tempting and perhaps even only possible to finance the growth using a non-core business activity. It helps start the company and pay the bills, but it always distracts from delivering to the main customer cause.
Now you’ve got a product you believe in, it’s time to reassess. Take a look at your lifestyle and costs. How much do you really need to pay yourself, and how much overhead can you prune from the business? Cut back on everything that doesn’t contribute to the sales process, and get used to a two-minute noodle diet.
Look also at the potential client list and how you’re selling. Be brutally honest about the short-term prospects of your potential customers and focus all of your energy on those that could deliver cash soon. Now is not the time to chase giant low-probability deals. Instead, steadily build a customer base, proving demand through smaller yet more frequent sales. Keep prioritising and focusing your sales efforts, and when you find one or two customer segments that are the most responsive, seek to deeply understand their end requirements and sales process. Spend time on selling rather than raising money. Not only are customers the easiest and cheapest places to raise money, but a track record of sales is the one thing that will generate attention from potential investors.
Take the leap into the uncomfortable world of uncertain revenue. Slow or completely stop the lucrative yet distracting consulting, and start focusing on shifting products. This is the painful year every successful businessperson talks about, the year that created the successful business. Get through it and you’ll be talking about it at conferences for the rest of your career.
I’m an editor at New Zealand’s coolest little business innovation magazine. Our design is awesome and our writers superb and we keep uncovering the companies that everyone else discovers a year later. But we are only read by a few thousand people, and we should be much bigger than that. How do we get more readers? – Anxious Editor, Auckland
Hi Hazel. [Hey! This was just between us, Lance!] As you know, finding more readers is easy – simply publish online, which you already do. So let’s focus on how you get more print readers, as that’ll help you spread the good work further, raise more money from advertisers who still value print more, and help that subscription revenue line.
Like every magazine and newspaper in the market you’re missing a trick by making it too hard to subscribe and renew. The easiest way to increase print subscriptions is to start with not screwing up re-subscriptions. Right now it is far too hard to resubscribe to Idealog. Take a trick from the NBR, who, after I fail to pay any of the bills they mail, simply call me up and ask if I’d like to roll over the subscription using the credit card they have on file. The total call time takes 30 seconds, but at the end of it NBR retains a customer.
Of course, they do waste effort and time by sending physical invoices in envelopes, as if they expected me to rip out a chequebook and mail a cheque. I haven’t used either of those institutions in several years, and I imagine Idealog readers would be the same.
So go beyond the NBR’s effective but old-school methods, and automatically roll over subscriptions year to year. For those without current credit cards on file, send email reminders that allow one click to a pre-filled page, entering of a credit card number and hey presto. Make it a beautiful site that reflects your own design values, and one we can trust.
While there, make it much easier to subscribe from your site. It should be blindingly obvious not only how I can subscribe, but what the benefits are. At the moment it seems as if you want me to call an 0800 number, after I click on the subscribe link, whereas I expect to see a beautiful page asking for my name, address and credit card number. Use the website and emails to lift subscribers away from third party distributors that take your margins, and bring them across to your own system. The reason I know all of this? I’ve now been a subscriber twice to Idealog, and each time the subscription has lapsed at the end of a year.
Make it easy for me and I might just resubscribe rather than hassle you for more freebies. [We’re working on it, Lance – watch this space.]
The muppet show
I’m not challenged at work. I’ve been here for 23 months, and while it was challenging at the beginning, things are boring now. I watch the managers with dismay as they make dumb decisions, promote the muppets and are just so slow to get anything done. What should I do? – Bored of Auckland Central
Early career is a time of rapid learning, but often employers forget that you need constant pressure and change. It’s time to seek that pressure and change for yourself, and to keep doing so for the rest of your life.
Firstly, tell your bosses about it – that you’re not challenged, maybe not the muppet bit. Ask for more things to do and more responsibilities. If they don’t listen, or if they keep making dumb decisions, leave and find another gig. Of course, if you think everyone around you is a fool, take a hard look in the mirror first. There are quality people in every business, and you can carve a great career by learning from them.
In this situation give yourself a time limit, a few months, to resolve the issues. Be firm with yourself and your employer when the time is up, leave on good terms and seek new challenges elsewhere – another job, a new location or even overseas travel. The absolute worst thing you can do is to let the situation stay as it is.