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Is Your Business Worth a $100,000 Investment?

Is Your Business Worth a $100,000 Investment?

June 20, 2013

Is Your Business Worth a $100,000 Investment?

Last week, on a trip to Brooklyn, NY, I watched three business owners receive funding for over $100,000 each…and the whole thing happened in less than an hour!

Even if you’re not seeking funding and have no plans to sell, you still want your business to be investment-worthy. Here’s why:

An investment-worthy business is an asset. It produces a better product, gives you more freedom and generates more buzz among your followers.  If you can’t convince someone that it’s worth it to invest $100,000 in your business there is something wrong! You’ve heard me say it before: build your business to sell or keep, but an asset you shall reap.

In this eletter I’ll give you 6 strategies to make your business investment-worthy.

This is like many homeowners who put hardwood floors in the dining room and granite counter tops in the kitchen, not only because they like the look and feel, but because it increases the value of the house. If your home is not an asset, you’re a tenant.  Likewise, if your business is not an asset, you’ve got a Glorified Job.

So there I was on June 11th in Brooklyn, NY.  Here’s what I discovered. 

A Shark Tank in Brooklyn

No, I did not have time to visit Brooklyn’s famed aquarium, but instead I went to speak at, and attend, a conference billed as the LTB (Let’s Talk Business) 2013 Business Summit. 

LTB 2013 was organized for Jewish business professionals by the Ptex Group, a premier marketing agency, and a Brand Launcher client.  The goal was to attract 500 attendees. Here’s to Meny and Wolf who are amazing guys and got more than 650 people to show up!

The day-long conference included some very business-savvy speakers. Gary Vaynerchuk, Scott Ginsberg and Charlie Harary were just some of the other speakers, and I was proud to be included in this unique conference.The program then culminated with what was billed as the Launch Pad, a very realistic version of the television series Shark Tank.  So authentic, in fact, that it even included Kevin Harrington, who spent three years on the popular program, and is now Chairman of As Seen on TV, Inc. 

As this grand finale approached, there was a growing anticipation of things to come. Five wealthy investors were poised to listen to the proposals of six eager entrepreneurs.  The panelists could buy the whole company, or invest in a percentage of it. 

One entrepreneur, named Eli Rosenberg, is a neighbor of mine from Baltimore.  He has solved the problem of converting standard mini vans to those that can accommodate wheelchair passengers. Brilliant!  His idea generated $300,000 from the panel.

But it was the presentation by Ari Ben Shimon, an entrepreneur who holds five different patents for his products, that fascinated me the most.  Ben Shimon has tackled the age-old problem of running out of gas with a simple product he calls Extra Fuel. Since gasoline is flammable, toxic, combustible and quite simply very dangerous, it is illegal to carry it around in your vehicle.  But, what if you can carry it around in a brand new container that is non-flammable, non-toxic and non-combustible?  Ben Shimon posed this question to the audience, asking if they would buy such a product for $29.95.  More than two thirds of the 600+ in attendance raised their hands.  Ben Shimon’s ingenuity landed him $100,000 from the panel and applause from the crowd.

So, Is Your Business Worth a $100,000 Investment?  If Not, You Must Keep Reading

The big question is: What can I do to make my business investment-worthy? Below is a list of tips from Kevin Harrington and yours truly. 

  1. Solve problems.  People are less likely to buy prevention than they are to buy solutions.This explains why it is more difficult to sell vitamins then aspirin. Solutions to running out of gas or getting wheelchairs into standard vans are what make a business investable.

  2. Illustrate transformationJust like the popular before-and-after photos you see for weight-loss products or for acne treatments, you need to be able to illustrate how your product or service makes a transformation.
     

Check out how easily the Magic Bullet transforms fruit into smoothies. 

  1. Show drama in your presentation.  Can you visualize it?  I use what I call the Sharpie test.  If you can’t draw it on a piece of paper, then what you are selling will not be crystal clear to potential investors. 

  2. Have proof of your concept.  Is there \ research or clinical studies that support the claims that your product or service works?  We’ve all heard commercials stating that “four out of five doctors agree” — now you need to have some evidence from those four doctors.

  3. Include testimonials.No one believes the promises we hear on commercials anymore.  Therefore, you need a reason to believe.  This is where testimonials are so important.  They are, in essence, real people and real businesses giving your products and services validation. 

  4. Highlight the strengths of your leadership team. Technology notwithstanding, business is still about the people behind the logo.  In fact, in horse racing, many investors bet on the jockey.   

  5. Make sure your business is scalable.  Investors want to see that a business has growth potential.  If you’ve already peaked, the value of the business will diminish.  Look for ways in which you can re-launch your business to show growth potential.

    Are You Ready?

           You don’t need to be an expert salesperson if your business is worthy of investor interest.  Like those impressive hardwoodfloors and granite countertops, your business can be an asset if you know what would make it appealing to investors. Growth potential, strong leadership, solutions to problems, and a business that gives customers a reason to believe are among the selling points that add value.  

    Even if your company is not about to be acquired by a corporate giant, you still want your business to be an investor-worthy asset because it creates value that enhances your brand and also, customers are drawn to something of value.