One in particular is Microsoft’s launch of its WebsiteSpark program.  The program is geared toward small web design firms of ten or less employees and allows them to tap into the full resources of Microsoft for a mere $100 exit fee after program completion.  Website Spark not only puts you in touch with Microsoft’s network of partners and experts for training and sales leads, but it also gives you the opportunity to showcase your work in their marketing and networking events.  The real beauty of the program, however, is the free access and training for their full-featured software such as Expression, Silverlight, SQL Server, Windows Server, and Visual Studio.  That alone is a goldmine to any cash deprived start-up.

While Microsoft’s new effort certainly isn’t completely altruistic, it is well received.  They are looking to build brand loyalty that will translate into lifelong Microsoft customers and who could blame them.  I commend their efforts supporting the web design and development community and I can’t wait to see how the WebsiteSpark program graduates fair in the real world.  A new era of David and Goliath has been born.

(click to watch video)

Have your heard of any other tales of big business’ helping small business? If so, I’d love to hear them!  Just comment below or email me heather@glamajama.com

Franchising, like starting any small business, requires a financial investment and risk. I like to use the old adage … if it were easy, everyone would do it. With a large small business lender struggling, franchisors are getting more creative with their ability to help franchisees and others use a proven business model to own their own business. A good example of that is Marco’s Pizza.

Marco’s has decided to take the issue of financing into their own hands. According to a press release, to help current and potential franchisees overcome the credit crunch, Marco’s Pizza has created several innovative financing tools.

To help with store down payments, Marco’s introduced a private equity fund that can invest $50,000 to $100,000 per store. The company is also developing a $50,000,000 private equity fund that would finance up to $250,000 of a new store’s costs, depending upon the franchisee’s investment. Those eligible for both programs must either have proven experience in the franchised food service industry or be current Marco’s Pizza franchisees.

“Marco’s Pizza’s year-to-date growth is outstanding given the tight credit environment,” said Marco’s CEO Jack Butorac. The company achieved more than ten percent chain growth in the first half of 2009. “These financing tools were recently introduced to help increase Marco’s growth rate through franchisee candidates and expanding franchisees facing credit challenges.”

“The due diligence of our credit providers is impressive and, I believe, a major validation of Marco’s business,” CFO Ken Switzer added.

Marco’s also offers franchisees the opportunity to lease complete stores through its captive leasing company. The program can provide up to $200,000 in financing for a new store. Marco’s is also developing a new leasing program that can provide up to $125,000 of equipment-only financing per store.

Many other franchisors assist in financing. Some home-based franchise opportunities will help finance the franchise fee and others will provide short term loans to help you get your business off the ground. As the credit markets continue to evolve and as people continue starting new businesses, be sure you thoroughly investigate financing options to give yourself the lowest interest rate and the best opportunity for success!

Links

http://www.washingtonpost.com/wp-dyn/content/article/2009/07/20/AR2009072000962.html?nav=rss_business

http://www.pmq.com/news/news.php?id=13166

I just moderated an expert panel on video as part of the Wells Fargo Webcast Series on this very topic and believe it’s a great way to get a snapshot of residential and commercial real estate realities and strategies. The program discusses how real estate can be a tool for reducing expenses as well as generating revenue. It also sheds light on the new rules of the road, including federal initiatives that impact us. Learn about:

• Lowering monthly payments by refinancing or renegotiating
• Mitigating commercial property tenant vacancies
• Reducing overall operating expenses and discovering true cost savings for your business
• Adapting to the current residential and commercial property markets

1. Why will people pay you? (money, votes, donations)
2. What does it cost you to sell your item…margins?
3. What protects you from competition, price-feature battles?
4. How will you turn an agnostic audience into loyal customers?

Early on when transactions had no costs, doing anything at a huge scale was very cheap. In order to be successful (a subjective term), you didn’t have to be very big at all. Some efforts don’t look at revenue as the only sign of success, and it’s probably safe to assume they have no real business model.

Identifying tribes and determining the success of working with them is not a new idea; the concept of tribe mentality or acting in a way that benefits the tribe has been around since cavemen. But, the concept of bringing people together, of building tribes, makes the internet is the best friend of people focusing on the third component, differentiating yourself from the competition. Once a network is in place, it is extremely difficult for someone else to disrupt it. I’ll add to this that the network must be active, relevant and provide value. 

The internet, it’s “isms” and even some of our online behaviors are permeating our culture. It is affecting business models offline as well. Local t-shirt and records stores, traditional advertising firms, and political campaign have different business model than they did ten years ago—can you imagine Dukakis, Stockton, Bush Snr, or Dan Quayle, figuring out what tweeting means?

Viral marketing and the growth of cash-free marketing means that people can spread an idea farther and faster than ever before. It also makes it far cheaper for a competitor to enter the market.

Here are three examples of companies leveraging online to create mini movements:

What mini movement is driving your business?

Traditionally, companies that “do good” are generally non profits, and when people find out that a traditional small business is also “doing good” they feel like somehow the company must be taking advantage of the community it is serving if it is also turning a profit. I do not believe this to be the case and formed my consulting company based on the premise that small businesses would contribute to a triple bottom line if they knew where to find it.

Creative Capitalism has been around for a while. Formerly known as social entrepreneurism, it is a concept newly labeled by Bill Gates, Warren Buffet and other market leaders and the premise is that “we should attempt to stretch the reach of market forces so that more companies can benefit from doing work that makes more people better off.” The book is available on Amazon (unsure of where the profits go). So far, it’s a pretty foreign concept to most bottom-line discussions. Having spent time reviewing the giving trends of big tycoons in the past (land trusts, libraries, parks), there is something different about the timing of this idea: the generation that is receiving it.  

The 30 and 20-somethings have grown disillusioned with where the 1980s consumption and 1990s holding on behavior have gotten us. Those that have the means to get out and travel, see the disparity in the world, come back and want to do something about it. With technology to reflect back their experiences they are twittering, facebooking, myspacing and texting what they are seeing to one another – and a small group are doing something about it.

Why profile TOMS?

Two reasons: 1) Anyone who has seen true the true spirit of leadership in play knows it is the eagerness to lose oneself in the group for the good of the group. This quality is best exemplified in Blake Mycoskie for the simple reason: that is where the heart of his business began. One for One, from day One. 2) Any size business should learn that a social model (something that takes into account the community in which it survives) thrives 10-fold compared to businesses that have tunnel-vision on bottom line sales. There is something to be said for karma.

About the Company

TOMS Shoes promises to give to children in need a pair of shoes for each pair it sells. The company  has given over 140,000 pairs of shoes and expects to give more than 300,000 pairs this year.

TOMS Shoes launched in Venice, California and sold 10,000 pairs during the first year in business. As a result, Blake returned to Argentina in October of 2006 with family and friends and unveiled the second phase of his business plan: the Shoe Drop Tour. To meet demand, TOMS now offers Shoe Drop Tours throughout diverse regions of Argentina. These are volunteer opportunities where TOMS Shoes supporters hand-deliver shoes to children. Since its beginning, TOMS has given over 140,000 shoes to children in need around the world. 

Here is a bit of my discussion with Blake:

Why shoes?
BLAKE: Walking is the primary mode of transportation in developing countries. Children walk miles just to get food and water, to make their way to school, or to reach medical help. In some communities, children can’t even attend school unless they have proper footwear. And the leading plague in these countries is soil-transmitted parasites. Shoes are such a simple answer to these problems children face every day.

See TOMS educational videos: One Day Without Shoes and Why Ethiopia (warning on the second video for graphic images)

Technology is required in today’s job market. Is TOMS Shoes looking to attract a blended workforce, or does the average age of the workers in the company reflect a standard .com?
BLAKE: For the first few years, our staff reflected the young, evolving company that we were. But as we grow, TOMS is definitely looking to attract a diverse workforce. We’ve become much more aware of our needs, and therefore able to hire individuals with specific skill sets, relevant experience, and worthy knowledge. I am still the CEO and Chief Shoe Giver, and I continue to immerse myself in TOMS because it’s my passion. I have creative ideas and feverish curiosity, and my team is receptive to that. But I definitely have trust in those who are facilitating the every day, drafting direction, and establishing strategies.

Your company is for-profit. What sort of profit sharing model exists for the employees and how did you arrive at the decision to not do a nonprofit?
BLAKE: My earnings from other businesses I had started before TOMS are what kept us afloat in the earlier days- TOMS was not funded by an outside 3rd party. I never had to present a business plan or get approval, I just had trust in myself and the One for One concept. Of course people laughed when I said TOMS would give a pair of shoes away for every pair we sold, but now TOMS is proving One for One as a viable business model. Our customers have been amazing supporters since day 1.

I created TOMS as a for-profit business to ensure a sustainable way of giving. We’re able to give shoes weekly in Ethiopia, and monthly in Argentina. I also wanted to prove that you can build giving into your business model from day one and still be profitable. We get a lot of inquiries from all types of organizations wanting to get involved with TOMS in one way or another. It’s a blessing, really, but we have to be careful in these first critical years of building our brand.

You are an example of an individual whose actions will help define the generation they are in. Your generation is described as both the “me generation” and the “giving generation.” How do you think your generation should be characterized?
BLAKE: This generation is one that thrives off of action. We don’t dream about change, we make it happen. We don’t imagine a way to incorporate giving in to our daily lives- we do it. TOMS has so many young supporters who are passionate about the One for One movement, and who share the story and inspire others every day they wear their TOMS. Seeing them support this business model is proof that this generation is ready and able to create a better tomorrow.

People connect with TOMS beyond just owning another pair of shoes. There’s something more every time you slip on a pair, every time you share the story, every time you suggest a pair of TOMS as a gift because no matter what brought you to purchasing a pair of TOMS, you are making an impact on a child’s life. Will there be saturation of cause-based marketing? Most likely, but TOMS has paved the way for other entrepreneurs to incorporate giving in to their businesses.

The One for One mission is sticking with this generation, and causing a new way of thinking. We grew up with parents who were taking those first small steps, and now we are just charging full speed ahead towards a better tomorrow. We have to. One for One is proving that you can bring closure to an issue by incorporating a conscious decision in to the actions you already take- whether its as a consumer purchasing a product, or a business looking for ways to inspire a better tomorrow. It makes consumerism and philanthropy come together full circle.

Carpe Diem!

To survive you’ll have to make the most of your time (which you likely have more of as a result of less customer activity) and take into account the impact of your business bolstering efforts today as well as in the long term.

Here are tried and true survival strategies used by successful entrepreneurs:

1. Cozy up with Customers. They’re your lifeblood. But much like you, your customers are under duress. Take them to lunch and commiserate. Provide a giveaway recognizing their past patronage using inventory that’s collecting dust. If you take the time to listen to customers’ needs and show them you genuinely care about their welfare and success, you’ll likely uncover immediate business opportunities as well as engender future loyalty.

2. Experiment. The worst thing to do during tough times is lose your entrepreneurial spirit. Use the extra time on hand to conduct otherwise too time-consuming ideas you’ve always wanted to explore. For example, it could be a strategic alliance with a complementary business or a special buy-one-get-one-free email marketing campaign (we recommend VerticalResponse), just about anything product-, operational- or marketing-related that you’ve simply never had the time to try because you were too busy.

3. Loop in Financiers. With the overall economy in a recession, it’s likely your business is taking a hit, too. Rather than recoiling into the shadows, proactively share exactly what’s happening and what your plan is with your banker or other capital sources. Ensuring that they understand your business and are well attuned to your future plans will help you avoid financial surprises that often occur when parties aren’t well informed.

4. Trim Hours Not Staff. If lower revenue is a reality, consider cutting hours of your employees rather than firing them outright. It not only shows you care about their welfare, but strategically it also helps you retain your most valuable asset – your people – for when the economy inevitably turns around and you need 100%+ hours from them. Firing is difficult, but hiring quality people and training them is a huge burden on a business you should avoid if you can.

5. Stretch Your Spend. To make every dollar go as far as possible, review all of your vendor contracts. Where reasonable ask for breaks on pricing. Everyone’s in this together and though your heroics have made you the leader of your company, and a shining example of an American entrepreneur, don’t let your pride keep you from taking advantage of these potential savings. Every dollar saved will be critical during the down year to come.

Now we’re taking that legacy of sometimes good, sometimes awful, but always courageous pitches and turning it into an online contest at StartupNation.

After March 2oth, the Top 100 highest vote getters from among all contestants will be judged by a panel of professional investors who sit on a mountain of cash just waiting to be invested into the right deals.

GAME ON! That’s what we say.

Starting today, you can submit your  60-second video or audio elevator pitch. If you must, it can be up to two minutes in length, but preferably, folks, closer to 60 seconds.

Your pitch will be voted on by viewers who scrutinize you just like Mr. Money Bags would. Can you handle the pressure? Can you deliver the goods? Can you hook your dream investor? If you’ve got the right pitch and the right deal, you may be selected as one of the Top 5 Winners by the judge-investors.

The Top 5 Winners will each be given an hour that could be worth millions. They’ll each be given one-hour of dedicated presentation time with the panel of investors. They will also receive a brand new laptop. (See more on this below.)

We’re extremely excited to kick off this contest, especially given the tough financial environment for startups and existing companies alike.

We certainly couldn’t have launched the contest without the sponsorship of GoToMeeting, the online presentation service, and Toshiba, maker of the new Satellite Pro S300 laptop. Their teams have worked closely with us to ensure that entrepreneurs get inspired and informed and that winners receive invaluable prizes to help them achieve success.

Here’s a link to the StartupNation Elevator Pitch Contest:

http://www.startupnation.com/elevator-pitch-2009

Are you going up or going down?

“Banks struggling to recover from multibillion-dollar losses on real estate are curtailing loans to American businesses, depriving even healthy companies of money for expansion and hiring.”

Yep, tough times. We all are well aware of the fact that everyone’s getting more conservative including customers, vendors and financiers, and that puts a pinch on our businesses.

That’s why it’s more important than ever to make sure you’re doing everything possible to manager your business credit and cash flow.

Along these lines, tomorrow at 2p Eastern (11a Pacific), I’m moderating a Wells Fargo Small Business Webcast that will be attended by thousand of existing and start-up business owners who want to ensure that they’re covering all the bases when it comes to strengthening their business credit and perfecting their cash flow strategies.

The webcast is free and will feature a panel discussion with leading financial industry insiders and business owners. The Wells Fargo Small Business Webcast Sound Credit Practices for Your Business provides the definitive overview of what you need to know, why you need to know it, and specific strategies you can put to work right away no matter what the stage of your business is or what the standing of your business credit may be.

Registration for this webcast is now available at www.wellsfargo.com/biz/webcast.

Featured Panelists:

• Michael Billeci, Regional President, Greater Bay Area Region, Wells Fargo
• Scott Anderson, Ph.D. Senior Economist, Wells Fargo
• Gerri Detweiler, Co-founder, BusinessCreditSuccess, and author of great articles on this topic at StartupNation
• Jerry L. Mills, CPA, Founder and CEO, B2B CFO
• Sharon Evans, President and CEO, The Business Resource Group

This market is no “kid’s stuff,” folks. Get as smart as you can to be as resilient as possible in spite of the environment around you. Be sure to tune in.

Rich

Well, I did it. And Dan, if you’re reading this, all I have to say is, IT WORKED!

I am really glad and grateful to have been turned on to such a simple tool for crystalizing an idea and communicating it to other people in a compelling and inviting way.

The “pitch” was to offer a quick solution to increase their content and social networking offerings in a very rapid and inexpensive manner with minimal risk and resources required.

Transcribed onto a piece of paper at the end of the meeting (to be able to share it with you), here are the drawings I drew on the whiteboard:

First, a box - it represented their current website.

I drew a line below it and told the 11-person, multi-departmental group in the room to help me pinpoint some of the issues that have gotten in the way of making progress on their effort to add the features and functionality at their website.

Out of the gate, they said that it required a lot of internal resources and coordination between them. That was slowing things down. So I drew lots of bodies…

 Also, the estimates they’d recieved and/or developed internally were rather pricey. So I drew the universal sign for moola.

There were also concerns about limitations of the current web architecture. I drew a house to represent pre-existing architecture.

Next, they talked about how many layers of approval this was going to have to go through. Compliance was a big deal. I drew a whistle, as in a referee whistling to call a foul. 

Then I just added that all of these issues and realities take extra time. Here was my lame attempt at a turtle to reflect that.

And I threw in one additional drawing to represent their visitors’ expectations. Currently, their visitors come to their site expecting specific services (the butler) and products (the box). I talked to them about how much I respect their primary objectives, which ultimately are to sell more of those services and products and that I was well aware that the value of providing more content and connectivity between users was to serve these primary goals.

At this point in the meeting, I noticed that literally EVERYONE in the room was involved. They were talking to me, talking to each other, contributing - there was total engagement and attentiveness. I’d go so far as to say, they were having fun. Not a typical powerpoint meeting-type experience.

Next I drew what I thought we could provide for them, in two parts:

I started by drawing a much simpler scenario if they were to work with us. I explained that very little resource drain on their side would occur - just a relationship manager and a support person would be needed. That’s the two bodies. Probably should’ve drawn long hair on one to represent a female.

Then I added a circle representing StartupNation (SUN), shining brightly.

And last, a rapidly moving, uhhh, rabbit. Not a very good one. But they got it.

This all took maybe a minute and a half to explain. It was clean and simple. From there, I started illustrating how it would work and specifically what benefits would result.

And here’s the final suite of drawings, coming to life right there in the room, everyone still enrapt.

I hit hard on how we could foster connections between their site users. Thus the circle with all the interconnecting arrows between faces. This time I did draw men and women!

Then I added that we’d be able to use our thousands of pages of business advice to move people from confusion and fear to smart and empowered. I butchered the fearful face.  It was supposed to be sweat and ended up looking like tears. But the face with the light bulb overhead was pretty universal. That worked well.

I drew a heart next with their brand inside it. This represented the very positive brand association they’d enjoy if they did provide all of the StartupNation content and connectivity.

And lastly, I drew lots of happy faces, one with a graduation cap and one holding out out a stack of bills representing how the quality of their user base would be improved and that they’d be inclined to make more informed and more frequent transaction decisions.

When I sat down at the table after this and showed some additional pre-prepared materials, it was clear that the room had great, positive energy in it. We were all working together. The meeting went on for another 45 minutes and concluded with very aggressive action items that would move the opportunity forward.

My first experiment in using drawing to draw people in and create a unified vision was a MAJOR HIT.

Here are a few things I learned in my virgin effort that might be helpful if you want to try drawing a pitch, too:

1) Prepare. Do a lot of sketching before you walk into the meeting. Have a very clear idea of key ideas you want to communicate and how you’ll do that. This will help you look like you’re having fun and know what you’re doing and it will invite others to feel the same and join in.

2) Move it along. Don’t go off the deep-end with sketching intricate stuff. Keep it down and dirty - it’s just to capture ideas and to simplify them. So be quick.

3) Pull attendees into the process. The drawing is fun, so let other people join in, direct you, even take over the white board.

4) Mix in some words. I found that some selective, supporting text went a long way to emphasizing key takeaways.

Have fun drawing and winning business!

How can you grow without an influx of cash?

The hardest thing for a company to do is start up with little money much less grow without a lot of financial backing. This was a position I found myself in from the get go. It is extremely hard to get loans on unproven businesses so “bootstrapping” ends up being the only option in most cases and was definitely the only option in my case. Not qualifying for startup loans and not wanting to give away any ownership in the company also placed me in a tight operating position. Most business experts will tell you to keep as much ownership as possible in case it does grow to be a multi-million dollar company and goes public; you want to have all the shares you can in order to maintain some control. Many, many startups end up with none of their business after investors and venture capitalists get a hold of it. In addition, if you ever do need an investor they want to know that the ownership is solid and with few partners to deal with, with sole proprietorships being the most appealing to a potential investor. Giving away my company after all this work was not something I wanted to do.

Therefore, it took some strategizing. First, I knew there had to be a high ROI (at least 500-700% markup from manufacturing costs to retail price) even though I was a few years from the major players that would eat up my profit, I knew this would give me a huge jumpstart in the business financially. Secondly, I could not incur large overhead expenses so I operated out of my house for the first year. Even when we started growing and added an assistant and shipping manager, they came into my house a limited amount. Having them out of the house and working with their own equipment kept them within the contractor guidelines so we were not obligated to pay outrageous employment taxes. Thirdly, I kept very good relationships with my vendors. Developing these relationships with the vendors was a great investment of time and energy. When I needed them, they were there for me. Fourthly, using stock bottles from suppliers alleviated the need for me to stock them, which freed up cash. Lastly, taking very little out of the company for myself, almost every dollar made rolled back into the company. My family had a meeting and decided to cut expenses so we could operate without my salary knowing this was an investment in our future. It was a family decision and we went for it knowing the first 2 years was going to be tough.

Do not get me wrong it was not all a perfectly planned bed of roses. There were still the 3 a.m. cold sweat, panic driven awakenings many nights but looking back, I can tell you it all worked out perfectly and would not have done it any other way. At every corner, I had no idea how the next step would be…would we end up ok or was this the big fall? Every move was risky and had to be done deliberately and boldly in order to achieve my goal of $1 million the first year, $3 million the second year and to sell out for $10 million in the third year. (Note: We are still in year two but we are on track so far, only time will tell). For instance, we had had average success in about month 6 of operations but the product was gaining ground. We still did not have enough dollars for inventory and we were approaching the Christmas season, which is the largest for most wholesalers. Knowing that our stores would not wait 4 weeks for an order to turn during the Christmas season nor would they pre-order a lot until they saw how the product sold, I had to do something to beef up inventory being against a wall of opportunity with nowhere to turn I looked to my suppliers. I called the manufacturer, which is the main supplier and explained the situation honestly asking if they could increase my credit line for the Christmas season (keep in mind I had no credit with them prior but had been nurturing the relationship for months now). They had a meeting and to my surprise, gave us a credit line larger than I could imagine! Not only did they increased the line, they asked if I could send extra bottles that they would make product and store it for me and not bill until they shipped it! This was amazing!

Feeling a bit like Rocky after a knockout, I used this information of the increased credit line with my other suppliers who also upped our limits and another vendor offered the same deal; if I committed to producing the goods, they would make the product and warehouse it, billing only after shipping! Our manufacturers were now investing in our company and that’s better than any bank!

Finally, we had the capacity to produce goods and sell them without a loan! We flew through a profitable and successful Christmas season. Then the January shows came and there was no way of knowing what was coming. We had the fortunate luck of one of our vendors standing up in front of 600 other store owners at a breakfast meeting in Atlanta. Little did I know this was to create a frenzy over the product like very few vendors have seen. Within a few days, we had over $200,000 in new orders and several markets still to go! The next dilemma presented itself: how could we produce the goods before we shipped (our customer pays when we ship) Again, I looked to my suppliers, which rallied up and started production right away. We successfully wrote and shipped over $500,000 of orders (to mom and pop gift shops mind you) in a 2 month period.

Next, we caught the attention of several international distributors, which is amazing being so young. All the international distributors wanted discounts and terms (up to 90 days to pay). After negotiating, I upped their discount for upfront payments and buying in volume by the pallet load, they had to purchase all marketing material at or above my cost; none was free. Also, remember with our markup we had the profit margin to negotiate and still maintain make money on the deal, this is why reducing costs is important from the beginning.

The next logical step was to strengthen the company financially. So while I was at the shows I spent a lot of time not just selling the product but also asking other vendors questions about things like how they carry accounts, how factors work, etc. During this time, I found a factorer and was able to work with them. They charge a flat non-recourse 4%. They buy the invoice and pay me everything when the customer shipped less the 4%. To some financial experts it is considered expensive money but to me, it cheap! I have 96% of the money upfront and remember we had the profit margins built in form the beginning…Beautiful! Currently I have looked into Purchase order funding just in case we get hit with the major vendor orders. Also in preparation of this next step we are looking into outsourcing fulfillment. This will enable us to ship large vendors. Major vendors are notorious for having very strict guidelines’ and your profit can easily be eaten up by errors in freight. Seriously most major vendors have shipping binders with guidelines that must be adhered to or you will be fined for each error on your bill. I have heard of nightmare stories where manufacturers invoiced $120,000 and ended up getting paid only $25,000 after all the penalties were figured. It can break you very quickly.

So my advice is to be strong, think positive, plan for the worst, hope for the best, be honest and aggressive and partner as much as you can with all your suppliers.