And if you’re curious, or interested, click the picture; it goes back to the source.

I couldn’t resist passing this on, because it’s a novel approach. The product doesn’t work until the larger vendor does something. But here it is.

Seth’s post is called Debt, equity and a third thing that might work better.

It works like this: You have an idea, a fledgling business or a new market to enter. You find an amateur investor (a wealthy dentist, a retired executive) and raise the money to bring it to market. And in return? The investor gets $xx for every unit you sell. From the first one until forever.

This is instead of the classic either-or: You get new money to finance a new business by getting either bank loans or new investment. The problem, of course, is that both of those are hard to secure, at best, and impossible for the vast majority of new businesses.

It turns out that back in 1994, when we were first trying to build Business Plan Pro, we contracted programming help for a fee plus a percent of future revenue. My wife and I didn’t want outside investors; we’d already mortgaged ourselves up to the hilt. But we really wanted to do the new product.

That actually worked for us. Business Plan Pro came out early the next year, and the company grew. The developers ended up making good money, too. Everybody wins.

Seth adds:

My general bias for entrepreneurs starting out is to bootstrap their business, because raising money is so hard and so distracting. But if you’ve set out to do something that needs cash you can’t raise any other way, this is worth exploring. Tell a story to an investor that wants to hear it, and create a cash-flow scenario that makes the investment worth it for both of you.

I agree with that. Good suggestion.

(Photo credit: dedek/Shutterstock)

Last week Business Insider published 10 huge business successes born from early failures. In my experience, these aren’t exceptions to the rule, they are the rule.

Oh, and the successes? Have you heard of them? How about AOL, Twitter, Intel, Microsoft . . . and those are just the first four. Microsoft (the example shown here to the right, an early picture of Microsoft, with Bill Gates at lower left) started doing a BASIC compiler for the Altair 8800, a computer that ceased to exist before the company made any money.

The point is that most businesses evolve. Business plans evolve. You don’t blindly follow the plan; you keep reviewing and revising the plan until you figure out something that works.

(Illustration: from the Business Insider post, 10 huge business successes born from early failures.)

One of the real core values of business planning is filtering ideas to pick out the opportunities. Ideas are of little or no value, and opportunities are potential businesses only if somebody actually makes it happen. In “Beyond Eureka” at BusinessWeek.com, Amy Barrett has an excellent summary of how that process really works in actual cases. She explains:

On the pages that follow, we outline the methodology followed by successful entrepreneurs to find, vet and develop their ideas. We’ll show you how to outline your goals for the business, brainstorm possible concepts, screen opportunities and test your ideas’ viability. Sure, you could wait for a bolt from the blue–but isn’t it better to create your own?

The story breaks it into five steps. For each, the story goes first for the theory, then examples in practice. The following is just a bare summary:

1. Set the stage: Basic parameters, such as lifestyle vs. high-end high-tech, establish your strengths, and directions.
2. Brainstorming ideas: Quantity first, sorting for quality later.
3. Picking a winner: This is selecting from those ideas–based on more research and planning–the one that has the best chance of working.
4. Feasibility: Answer three questions: Can we do it, do they want it and what will they pay.
5. Prototype: Make it real, put it up, get customers, get feedback, get going.

The rest of the story is a good review, step by step, with examples from real people and real companies. And I like this different angle on business planning, which goes right back to some of the core concepts. You might notice, as you read the details, that the planning is very much there; but there’s no talk of the actual plan document.

(Photo linked to the PFSK source)

The explanation, in part:

It’s a unique new effort that offers four different perspectives on the same scene simultaneously. In telling the same story from four distinct points of view, each side of the cube stands alone as an engaging film, and as a piece of a larger puzzle. As viewers move around the cube, they watch the story unfold from different perspectives, forming different perceptions of the characters and plot.

This resonates for me. Everything comes in different points of view, beginning with stories. Did you see the movie called Vantage Point, from 2008, that presented the same 10 to 20 minutes from five or six points of view?

Every story has multiple points of view. You just have to figure out how to tell it.

So now, as a Kindle owner and Kindle reader, I love the Apple iPhone Kindle reader app. It means even without carrying the Kindle around, I always have access to my books. The synchronization works perfectly.

What I need now is a Kindle reader on my laptop. That’s one for Mac, one for Windows. Since I travel with my laptop anyhow, why not plug it in at night and use it to read my books.

Whoops–that’s a business problem for Amazon.com, right? Messes with its Kindle sales? I suppose, but the iPhone does that already. And it would mean I’d buy even more books.

Just a suggestion.

(Image: Helder Almeida/Shutterstock)

However, that’s also the bad news. John makes it seem easy with his step-by-step guide, but then he’s not just a master of this, he also started early in the blog world, he’s really smart and he really works hard, too. For every successful expert blogger, author and coach like John, there are about 10,000 other people trying to do it, but not getting there yet.

John’s seven suggested steps (very abbreviated here, by the way . . . John offers much more detail on his post):

1. Turn your service into a product. Selling services is a little like selling air.

2. Develop a suite of tools and systems. Making it up over and over again with each engagement, writing proposals and reacting to client demands is a very tiring business. When you can guide a client logically through the path to success with a professional process, your business will become more profitable with each new engagement.

3. Build a brand that’s easy to talk about. It’s crucial that you can tell a story worth repeating and make that a foundational marketing element.

4. Push out lots of expert content.

5. Lead generate from multiple outposts. To build a winning practice, you need to generate awareness and trust by appearing everywhere. This means speaking, writing, advertising, PR and referral generation.

6. Perfect your lead conversion close. I’ve found that writing proposals and reacting to what a client thinks they need can drive you nuts. When you take the tangible product approach married with the expert content approach, lead generation is more about getting in front of the right prospects and explaining “this is how we do it” in a way that addresses what you know they need.

7. Construct a killer network. A strong network is also a powerful business tool for the solo entrepreneur to use as a sounding board, sanity check and social outlet to replace the interaction that often comes with working with an internal team.

Going back to the bad news, as I read this, I’m very much afraid that John has skipped the first step: Know what you’re talking about. Get your credentials. Be a real expert. Without that, John’s recipe won’t work.

And perhaps I’ll finish by rocking back over to the good news side: If you do have that kind of expertise, John has packaged his steps exactly as he recommends you do, and you can buy that from him at Duct Tape Marketing to make it much easier to implement. And John isn’t the only one; several others are doing the same thing. For example, Pamela Slim, with her Escape From Cubicle Nation book and workshops, is also sharing huge volumes of good advice on how to do it.

That is, if you have expertise to share.

Last week, Google released yet another gadget that may win them friends with small-business owners. It’s called the Google Checkout store gadget and it essentially allows you to use Google Checkout and Google Docs to to easily create your own online store in a matter of minutes. What makes the gadget especially interesting is that because it’s tied to a Google Docs spreadsheet, small-business owners can keep product inventory without having to use another third-party program like QuickBooks. Something many of us can probably appreciate.

I’m not a store user myself anymore, but I went through this hassle early on in my Web days, working with an Amazon.com store first. Our company grew beyond that and we ended up with a much larger system, but it involved a lot of programming by one hard charger in the beginning and a team of four within a year. Happily, we had revenue to match, so it all worked out.

Since then I’ve often recommended the simple turnkey store option to early-stage entrepreneurs and solopreneurs. Without it, the hassles are enormous. Yahoo! had a good option even 10 years ago, Amazon.com does, I’m told eBay does (but I hear different things on this one) and Lisa Barone’s post makes the Google store option look very good, too.

The simple store option let’s you start selling quickly. Link the store into a simple site and see whether people will buy what you’re selling. And if people do buy, then a store is the best possible market validation.

Lisa lays out the steps very well, and also comments on some tradeoffs:

I don’t think you can call the new Google gadget a PayPal killer any time soon, but if you’re looking to get an online store up and running quickly, this may be a good way for you to go. The gadget does what Google does best–simplifies Web activities so that even us regular people can take advantage of them.

Do practice some caution, though. The gadget is still in beta so we don’t fully know what Google plans to do with it. You don’t want to launch a huge online store, only to have Google decide to take it down or make adjustments to it without telling you. Still, I think it’s worth experimenting with, especially if you’re simply looking for a quick way to get started in the world of e-commerce.

Well written, and very useful.

I clicked and visited the site. I found a very nice-looking site. I’m not sure I’d use it, but I am sure that the look and feel were all positive. I wasn’t sure I’d pay the subscription price, but that’s not the point.

The point is a reminder that a good idea and a market need; necessary but not sufficient conditions for a new business. You can’t make it without that. But having that doesn’t mean you are going to make it. Lots of good ideas with market needs fail.

Of course there’s nothing in any business plan that guarantees success; but the idea alone means nothing without the management team, marketing strategy, financial plan and product/market focus.

Lots of great products, services and website businesses have failed for reasons beyond the basic need or idea.

There’s a good practical list of Five Common Business Models for Social Media Startups by Jun Loayza on Mashable. A good reminder that business models–how you get paid–are part of the game. All five will seem familiar: There’s freemium (give a standard version free, charge for more users or more features), affiliate, subscription, virtual goods (add-ons to free games, like swords and shields and such), and the old standard, advertising.

Facebook, for example, uses advertising to get revenue, and gets relatively little per user. There are a lot of freemium sites, and fewer examples of affiliates and subscriptions.

One of the business plans I reviewed recently had an interesting explanation of why freemium wouldn’t work, and it went subscription only. I worry about that, because there are so many fremium sites.

There’s another common model that this list doesn’t include: Raise investment money, get traffic but no money, raise more money, increasing valuation, get more traffic, raise more money . . . all in the hope that there’s money at the end, when some bigger venture acquires all the stock. Actually, I think we need a tricky word for that business model . . . kite-up? Musical shares? I like that one, because, so often, whoever gets caught with the shares at the end loses.

(Image: Flickr cc image by Chego101)