Berkonomics

Selling your business? Find the emotional buyer

Berkonomics

This is one of my favorite insights, since I lived this one in a positive exit from my computer business. Types of business buyers expanded. Most people will tell you that there are two kinds of eventual buyers for your business: financial and strategic. A financial buyer will analyze your numbers, past and forecast, to the n’th degree, and calculate the price based upon the result, after carefully comparing your numbers with those of others in the same and similar industries.

Three qualities of a great leader

Berkonomics

There are lots of ways to measure a great leader. Here are three that should resonate with you as leader and with those who follow you.

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Why not share your liquidity success with those who got you there?

Berkonomics

So, you are close to selling your company, and counting the profits a bit early. Well, that’s human nature. Here’s a thought for you to recall later when and if the event happens. Remember those who got you there. And for tax reasons, remember them before the closing of the deal, so that you can do so by sharing a bit of your proceeds without paying personal income tax upon those amounts. Formal option plans for some.

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Hit the hardest issues first!

Berkonomics

Reorder your priorities for maximum impact. There are two reasons to consider reordering your priorities to attack your most critical issues first, before the easiest ones to knock off the list.

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Can You Ask for Office Rent Relief? How to Manage Your Lease During COVID-19

Office leases are one of companies’ largest expenses, and if your whole team is working from home with no clear end in sight, you may be wondering what to do about your lease.

Can you stretch the truth to make your point?

Berkonomics

How easily it happens…. Sometimes it is easy for someone to make a statement that, in the enthusiasm of the moment or to make a point, crosses the line between fact and fiction. Sometimes it seems to you to be just an unimportant little stretch of the facts.

Do you really want to be the first to market?

Berkonomics

My stories of missing the context of the times. Over the years, as I managed my several computer companies as CEO or executive chairman, I made the decision to go to market with a brand-new product that had never before been exposed to my customer’s marketplace.

Your time is as valuable as your money.

Berkonomics

Enterprise time as a measurable commodity. Let’s examine the challenges to a CEO in making use of enterprise time, one of your most valuable and often misused assets.

Extending your Runway!

Berkonomics

Several years ago, I wrote a book entitled, Extending the Runway , using parallels to piloting a plane to equate to the process of creating and building a small company, making maximum use of resources to get to and beyond breakeven. It is worth revisiting the most.

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The tender issue of stealing time

Berkonomics

It’s a big issue within any company. . With easy access to Internet shopping, games, social networks and more, employees can find many ways to focus on personal issues while at work, detracting from productivity and demonstrating a disrespect for the time paid for by their employer.

Have you heard? Eyeballs aren’t everything.

Berkonomics

Remember when? Back when we were all trying to figure out the real value of traffic on the web, investors – and acquiring companies – got a bit crazy with metrics used to value acquisitions and investments.

Some great coaches are younger than you are.

Berkonomics

Especially for social media-based businesses, we all need to recalibrate our thinking about who is the teacher and who is the student. There is nothing wrong with a manager slowing a conversation to ask for more background when speaking to an often-younger and more involved associate.

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How often do you say, “Great job?”

Berkonomics

How we usually do this in our businesses. The best managers we all know are the ones who take the time to praise good work in public, before an employee’s peers. Most of us have a monthly award for the top person in a group of employees.

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Do you “over-welcome” your new employees?

Berkonomics

A story of a CEO attuned to creating great company culture. A CEO friend of mine who managed her one-hundred-person remote workforce as a virtual company told me her story of how she welcomed new employees as she grew her firm. Strike that. She over-welcomed her new employees.

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Your “drop dead” question for a customer survey

Berkonomics

Here’s the question: Sean Ellis, the marketing guru behind DropBox and other successes, advises clients that “The most important question on a survey is , ‘How would you feel if you could no longer use this product?’” He goes on to quantify the response.

Six ways to make your site-app-product go viral.

Berkonomics

It doesn’t happen by accident. Not every new game-related site is a Steam, and surely not every social network is a Facebook. And not every texting application is a Twitter. A story of an app from nowhere to near dominance.

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When to pivot from your original plan?

Berkonomics

Plans do not often work as devised. . We are not always smart about the market or the product. We may miss the context of the times and come to market too soon or too late. We might not have researched the market diligently or used a focus group or other market research.

Switching costs: A competitive advantage?

Berkonomics

We know that one of the ways we hold onto our customers is if there are high switching costs to move away to a competitor. But how about the other side of the coin? Do you have an estimate of the cost for a potential customer to switch to your side?

Entrepreneurism is all about personal risk.

Berkonomics

Well, of course it is. So, let’s dig a bit deeper.

Have you heard the rule of the thirds?

Berkonomics

It starts with sharing the opportunity and upside. Think of startups and early stage businesses whose entrepreneurs you know.

“LALA” – A short lesson in marketing

Berkonomics

Focus upon you as marketing genius. Let’s focus not upon the process of marketing and positioning, but on you. How should you become the best marketer you can be, even if you are a first-time entrepreneur or a seasoned CEO? There’s an answer for that.

Four ways to create marketing excellence

Berkonomics

First, let’s recall the four “P’s” of marketing. Marketing is a science devised to help drive customers to your door. There are lots of ways to define how to market well, including the four P’s of marketing (1): product, price, promotion and place.

Could you achieve ten percent net income each month?

Berkonomics

How planning is done today. Most entrepreneurs and managers, when modeling their business operations using a spreadsheet, start with expected revenue by month. Then they calculate cost of sales, and then project their expenses, to find the bottom-line profit or loss each projected month.

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Can you defend your plan without being defensive?

Berkonomics

When meeting with investors or even your board, during the period devoted to feedback after your presentation, you will hear comments and recommendations that don’t resonate with you. Some will be from a misunderstanding of your explanation. Some listeners will challenge your assumptions.

Don’t get hung up on early stage valuation.

Berkonomics

Here’s the “what.”. I can’t tell you how many times I’ve walked away from deals where the entrepreneur insists on a start-up pre-money valuation that is so high, no angel could expect to make a return upon the investment, even with a reasonable sales price for the company down the road.

Please don’t overestimate your audience’s knowledge

Berkonomics

Ask the important question first. When making a presentation to a new audience, the smart thing to do, if there is an opportunity, is to ask your audience by show of hands, if they have some knowledge of your industry or space.

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Raising money? Find your champion.

Berkonomics

Increasing your chances of success.

Financing with grants, not equity or debt

Berkonomics

First, an example of grant-based financing . I was chairman of a company that, for twelve years never took a dollar of outside investment. The company was funded entirely by grants from the National Institute of Health, amounting to millions of non-dilutive dollars in all.

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Use creative fundraising instead of equity or debt?

Berkonomics

Use creative fundraising instead of equity or debt? By Dave Berkus. First, my story as an example. Let me tell you the story of how I raised $100,000 to fill a gap needed to purchase a new home for my young family years ago.

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When should you go for equity financing?

Berkonomics

Let’s take a few minutes to examine the kind of equity financing available to small or early stage businesses. In most cases, these applicants for equity funding must be rooted in technology to apply to this limited discussion. Friends and family investors.

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Three Important Issues for Your Business Plan

Berkonomics

Some professional advice . Here’s more advice from professional investors for aspiring entrepreneurs. Each of us has a list of things we look for early on when identifying whether we want to go to the next step in analyzing a plan.

Three questions to answer about your COVID response

Berkonomics

Most of us are affected by this current crisis. Many businesses threatened with closure forever. Small businesses are the most vulnerable, even though most have furloughed employees. Rent and other fixed costs continue, even when revenues have dried up – a fatal combination.

Are you innovating because of need or inspiration?

Berkonomics

Most innovations come from responding to a customer’s needs, or finding a niche where products need improvement or extension. It is rare to innovate using a blank sheet of paper in a room with bare walls and no other contributors. A thought exercise.

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Is it your brilliant plan or your execution?

Berkonomics

Mike Tyson: brilliant business savant. Everybody’s got a plan – until they are punched in the face,” famously stated boxer Mike Tyson.

Create a great product – the three-step dance method

Berkonomics

Can you create a product in a vacuum? Creating a new product in a relative vacuum is an exercise in complete trust that you know what’s best for the customer, perhaps even without interaction with such a customer.

A million things can kill the deal.

Berkonomics

So, you’ve found the buyer, received a letter of interest, signed it, and exclusively tied your company up for a period to complete the deal. Everyone on the board is anxious to close this. You’ve committed time to do whatever is needed.

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Ready, fire, aim. Really?

Berkonomics

You’ve surely heard the variations on this theme. Ready, fire aim” was popular in the 1990’s, accredited to any of several authors.

My dad said: “Never take on a business partner.”

Berkonomics

My dad was a smart businessman, even if not formally trained. He occasionally gave me advice that turned out to be more than wise, looking back at subsequent experience and events.

Should you include your sweat equity in a business plan?

Berkonomics

Investors love it when entrepreneurs draw little or no money from their startups. It extends the cash available for research and other necessary fixed costs and gives the fragile, young company more “runway” to get to breakeven. What are you worth to the business?

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Have you lost (some) enthusiasm for the job?

Berkonomics

So, you’ve been at this for years through thick and thin, great days and days in which you’ve had better times. Much of your job has become routine. But it feels good to see your “baby” grow and others buy into your vision. That daily routine.

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What is your biggest error in company planning?

Berkonomics

The biggest error in planning may not be spreadsheet calculation error. Or cost estimation. It is most often missed assumptions about the market, the competition, the speed of adoption, or other critical metrics you’ve researched, or selected, or even just guessed at to create your plan.

What’s the Most Important Thing in a Young Business?

Berkonomics

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Crowdsourcing, collaboration, support groups. Oh my.

Berkonomics

At the MIT Center of Collective Intelligence, professors and graduate students are wrestling with an important opportunity – and gaining ground. With new collaborative tools available for use in the cloud, people are no longer isolated in their creative endeavors.