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Have A Plan, Understand Your Market And Network

Written by: Robert Iachetta

Article Overview: It’s important to have a plan in place where you’ve mapped out where you want to take your business. Set clear goals so that once you meet them you can justify spending money to get you to the next step.

Have A Plan, Understand Your Market And Network

How Innivity Was Started - Innivity Marketing Group Inc. was created from the words Innovation and Creativity and was founded by my partner Rob Dawson. The business idea came from Rob Dawson while he was in university. I had reviewed his business plan and helped him launch the business out of Sarnia, Ontario with his original partner who had a background in the promotional marketing industry. His original partnership lasted about eight months and that’s when I became a full partner of Innivity. The first year we grew through our local network in Sarnia, while running a home office in Toronto. We moved into a commercial building in Toronto in our second year. Growing the business came from having a one stop shop for marketing services. We provide one point of contact for companies that were looking for marketing functions being outsourced. We incorporated an up front strategy for clients and help them with their marketing plan and execution of marketing initiatives. In essence we write the strategy and then execute it with them..

When selling business to business, we have been successful through personal selling. We get to know the decision maker and the company as a whole. We build a trust and working relationship with them. We learn who their clients are and think about how we can help them grow. It’s an approach that’s been successful for us.

Advice For Startups - Have A Plan - It’s important to have a plan in place where you’ve mapped out where you want to take your business. Set clear goals so that once you meet them you can justify spending money to get you to the next step.

At what sales level do you consider hiring somebody? Create the decision points ahead of time because as you start growing you need to know when to invest in people and technology and plan out the return on these investments.

Understand Your Market & Networking - Understand your market and have personal contacts that you can talk with to try and land your first customer. Networking is crucial for young startups. When you have no track record you’re selling yourself. If they believe in you then in turn, they believe in your company. The key is to build both your personal and company brand and align them together to create a corporate culture. In networking, it is vital to stay in touch with people that you meet and don’t be afraid to ask for help and ask for their business.

Line Up The Financing - Having the financial aspect figured out is also very important. You need to utilize your relationships with family, friends, angel investors, and have a good relationship you’re your banker. We used the personal investments of the partners as well as money from friends and family to get started. We’ve had a small line of credit with the bank that this year we’ll have the track record to go for a higher amount. We built a relationship with our banker and now she believes in us. You need to have the financial resources and cash flow to support your business. This is extremely important when you have employees because now you have salaries to pay – it’s no longer just sweat equity. Cash flow management is the hardest in the first two years. Try to collect your accounts receivable within 30 to 45 days. Have a credit policy in place and do credit checks. Try to establish credit with your suppliers. It’s hard when you’re a startup so you need to prepay a lot up front but now we’ve established a relationship and have credit with them.

Give Back - Get involved and give back to the community that you live in. It’s helped us grow tremendously. We’re very community based and get involved in many charity events. We are strong supporters of our Not for Profit clients like Goodwill, Children’s Wish Foundation and the Canadian Breast Cancer Society. We volunteer our time with them and donate our services and try to give them a price break on the products and services we offer. We’re going to launch a non-profit program in the New Year.

Tap Your Human Resources - We try to get the opinions of our staff, clients, and advisors to help us continually grow our business. We meet monthly as a management team to go over our numbers and have a monthly partners meeting as well as a quarterly staff meeting. We have an open door policy so we share our financials with our company and have team bonuses. If we hit our targets, everyone wins. We also have a board of advisors who have helped us with important issues like hiring people and letting them go, making investment decisions, and our financial numbers. Every entrepreneur should have one or two people to draw on as advisors or business coach. Look for support from areas where you’re not strong.

Have Fun - Having fun is important especially in the first couple of years of business. The novelty factor of owning your own businesses eventually wears off when your business starts to grow and the stress of maintaining and growing the business can be sometimes over whelming. You need to have a culture that is fun and a work place that is enjoyable to go to everyday. Separate work from life as well. Maintain a balance of life.

Mistakes To Avoid - Manage Client Expectations - Manage the level of expectation of your clients – say what you can and can’t do. Be prepared before going into a meeting or presentation. Young entrepreneurs often fly by the seat of their pants but you need a solid process in place to get the order. You need consistency in your message and how you portray your company. It’s also important to understand the time value of your clients and prospects that you are going to meet. When we were getting started we weren’t ready to a pitch a client one time and were 6 months away from having everything in place that we said we could deliver. We pitched all our services anyway and weren’t ready for the questions that followed from our client. We learned a lot from that experience and now are always prepared. We’ve also learned to keep everything concise. Prospects don’t want to read a 30 page document. It’s important to understand how transactions take place and how to pitch to your prospect. Another important element is to know how your clients buy. In the construction industry, for example, the buyer is typically a dominant male who is very old school, quick to the point, and wants to know how you can help him save money. Forget the glitz and glamour. In the hospitality or tourism industry though they value things like brand identity, brand awareness, and brand loyalty so you need to incorporate that into your pitch. Know how your prospects make decisions and what they value before you pitch to them.

Assess Employee Fit - One of the hardest things to do is assess employee fit. We had to let a key employee go early on because the company had out grown their capabilities to take us to the next level. We became personal friends with this person but it’s important to separate the business from the personal. It was one of the hardest things we had to do but recognizing that it was a problem in the first place was also very difficult. You have to have a plan for growth and need to constantly assess the model and see if you have the right people in place to accomplish it.

Assess Your Partners - If you have partners, assess the individual role of each partner. There are four of us now and we all have different responsibilities. Within the partners, business is business. We’re friends but we know why we’re all at the table. Criticisms will happen as will times when things get heated. You cannot take it personally and need to truly understand the essence of making decisions for the betterment of the company. It’s also important to check your ego at the door. None of us have the “this is my company” persona. We all have the same goals to grow the company. You need to trust your partners, your employees, and management teams. You have to trust that they will make the right decisions because you can’t be involved in every decision that they make.

Own Up To Your Mistakes - If you don’t have all the answers or if you make a mistake, own up to it with your clients. Find the answers and correct the problem quickly. Honesty is one of the best things you can have in your business. Hopefully you have clients and vendors who appreciate honesty.

Know What You’re Getting Into - When you work for yourself there are a lot of long hours that you’ll need to put in and you’ll need to make a lot tough decisions. There is tremendous pressure and stress because you’re responsible for the lives of not only yourself and your family but your employees. The lifestyle is different. You’re reporting to partners and shareholders and not to a boss. Assess why you want to be your own boss and make sure you keep those values with you through out the growth of the business.

If I Were To Start A New Business… - Areas of growth I see for entrepreneurs today are intellectual knowledge, alternative energy, utilities, healthcare, computer and data software & processing. Intellectual knowledge and the capacity to learn quickly are so important.

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