Episode #6 | Fundraising, Choosing an Attorney, Ad Rates, Competitive Positioning
Podcast: Play in new window | Download (40.4MB)
This week we talk with guests about competitive positioning and differentiation for businesses, fundraising opportunities, advertising rates and even how to choose an attorney or other professional service provider.
Show Notes
Standing Out Among the Competition
What is the best way to differentiate yourself as a service provider in a highly competitive market, other than on price?
- Scott Ellis
Well, first of all, we all need to remember to put the “service” back in service provider. American Airlines is a great example of what NOT to do. I’ve been either a Gold or Platinum member for years, but at least 50% of the time when I get on a plane there are rude flight attendants on board. But go try an Asian airline and you’ll get a whole different level of service. In fact, it’s “real” service.
So the first way to differentiate yourself is to pay attention to your client, serve their needs thoroughly, and just be likable.
Specialization is also often important to prospective buyers. You don’t go to a Podiatrist when you have an ear ache, so find ways of letting your customers look at you as if you completely understand exactly what they need while pointing out that your competition lacks the focus to really understand and meet their needs. Double this up with the service issue and gain unfair competitive advantage.
Other ways to differentiate
- Quality
- Features
- Customization
- “Being Green”
- Guarantees
Starting Capital
What is the best way to get small capital needed to start a company that needs less then $50,000 to start?
- Dustin Mathisen
First of all, there is no such thing as “small capital”. Every single dollar invested in starting a company is one that could have been saved or invested elsewhere. Before starting any kind of company you had better be certain that you’re willing to invest your own money in it.
Indeed, the best place to get small capital, is from your own account. Nothing focuses the entrepreneur more than having their own capital at risk.
Having said all of that, lets talk a little about financing. There are really three primary sources for taking investment for small businesses:
- Friends and Family. For small businesses with “small capital” needs, the best place to find cash is the people you know. It’s also the best way to remain focused on the goal. If you take money from your loved ones, you better be very, very certain that you are going to pay it back or you will ruin a relationship. If you need less than $250k, home is where the money is.
- Angel Investors. If you need cash, but you don’t know anyone who has enough to pitch in, or you need more than you can raise from Friends and Family, Angel investors might be the way to go. Usually this is a wealthy individual who is willing to take on risk for a healthy reward. If you need to find an Angel, try the Angel Capital Association..
- Venture Capital or Investment Banking firms. VCs differ from Angels in that they are usually a fund of various investors resources that are managed by a third party. VCs are usually only looking for deals at the $1-2 million and up range. They’re easy to find with a simple Google search.
Keep in mind that any time you are going to take in money, you better be prepared to give up a sizeable amount of the company in terms of ownership, and also control. Yet another reason that investing your own money is best.
Choosing the RIGHT Attorney, CPA
How do you find a CPA/Attorney that’s right for your business?
- Sheryl Schuff
For me, these questions both boil down to mainly two things: rates, and resources.
When you start a relationship with a new accountant or attorney, you are putting a tremendous amount of faith in them. Not only in their expertise, but also their ability to deliver. For this reason, I advise people not to rush into anything.
Every CPA or Attorney I’ve ever hired has involved a series of interviews prior to engagement. In fact, I treat it just as if I were hiring an employee:
- I learn about their educational background to determine if they are actually qualified. In today’s world of fraud and shiesters there is no need to take risks. Ask to see degrees and certifications is completely fine and if the service provider doesn’t readily volunteer their resume, there is something very wrong.
- I ask about their areas of specialization. If you are going to do some patents, you better get a pattent attorney! If you have an international company, you better get a CPA who knows the international tax laws.
- Always ask for references. If they are even marginally good, they should be able to drum up a number of references for you quite fast.
The National Federation of Independant Businesses has a pretty good article on choosing an attorney here.
Remember, if you end up with a bad CPA or Attorney, it’s only because you choose them! There is a lot of culpability to go around for bad decisions.
Determining Advertising Rates
How does one determine the worth of an advertising spot on a podcast/ webcast / blog?
- Ben Eadie
We talked a little about Web site valuations on the last show, but to answer this question directly, the value of an ad is becoming pretty standard based on market demand.
Advertisers are constantly searching for the right place to put their ads, at the cheapest possible price, so they can get a high return on their investment. So the best way to determine what your ad is worth is by visiting some of the large advertising sites and searching for current publisher rates on sites that are similar to yours.
- Google AdSense – you can get started with this one easily, and after a couple of months Google will pretty much tell you what your CPM, or cost per thousand impressions, is worth.
- AdBright – one of Google’s biggest competitors. Might as well sign up here and see how the results fare compared to Google’s.
- Text Link Ads – offer a text only ad format, and it’s pretty easy to do comparative analysis to find out what your site is worth.
- BlogAds – this is a specialty network designed soley for Blogs, but that is one of the things that makes it so easy to search for similar programs.
Besides those, John Chow has a very extensive list of online ad networks.
Keep in mind that specialty sites will often have much higher valuations because the advertisers can really narrow in on a particular demographic. This can make them 3-5 times more costly than generalized sites.
Photograph credit: Soller Photo
Related Articles
Is it just me or you forgot to include a direct download link? I don’t use iTunes and like to download the files directly into my computer. Could you please add the option? Thanks.
@fakinasjol – We’ve updated all the posts to include a direct download link. Thanks for letting us know!
As a lawyer, I’d like to throw in my two cents on finding a lawyer. I have written about this topic on my site, and the main thing to look for is experience. Does the lawyer practice in the particular area you need help in? How long has the lawyer practiced in this area? And, what percentage of the lawyer’s work is in that area?
I agree with the idea of a good fit between yourself and the lawyer. It does not matter how qualified the lawyer is, if you do not get along, move on. Trust me, the lawyer also wants a good fit.
On the subject of free consultations, John’s comment that a lawyer should be willing sit down and talk with you if you are a serious business is true. But, you have to meet the second part of that statement. If you have a business and may be a future source of revenue (lawyers have rent to pay too), a lawyer should meet with you so you can decide if there is a good fit. But, if you have no intention of ever hiring the lawyer, don’t mislead the lawyer. It’s not justified, and you have just burned that bridge. This may be difficult, but come right out and say, “I can’t afford to hire you, but would you be willing to give me 15 minutes of your time?” Some will say no, but some will be willing to meet with you. In those 15 minutes, you can cut out all the pretense of wanting to hire the lawyer, and just ask the questions you really want answered. You are not going to get a contract written either way. But, if you are honest, you are setting the foundation for a future working relationship.
Regarding asking about education or asking to see diplomas, these generally suggest an unsophisticated consumer. Lawyers become good lawyers through experience. Law schools only teach how to be a lawyer, not how to be a “business” lawyer, or a “personal injury” lawyer, or any other kind of lawyer. The law school and the diploma is largely irrelevant; it is the experience that counts – and this is a topic you should definitely ask about. If you want to verify that the person really is a lawyer, look them on your state’s Supreme Court attorney regulation website, or state bar association.
As far as references, I cannot think of a single lawyer who provides these. Part of this is because of confidentiality issues, part is that clients pay to get a particular job done and then to be left alone. More common are satisfaction surveys and pull quotes. Of course, these can be gamed, but then again, so can references.
If you are looking for a lawyer, ask your friends and colleagues for recommendations, but also find some lawyers on your own. Make sure they work in the area you need help in. Set up some consultations to verify the lawyers experience and to gauge your comfort level. And last, be honest about your needs and what you can afford.