Got an Entrepreneurial Dream? Here’s Your First Important Step

Strong cash flow is critical for entrepreneurial success.

But 50 percent of all small businesses crash within five years because their founders are weak in financial literacy, according to a report by the JPMorgan Chase Institute.

“Growth, Vitality, and Cash Flows: High-Frequency Evidence from One Million Small Businesses,” stems from data compiled from accounts at JPMorgan Chase.

It’s the nation’s largest bank and is an advocate for small-business education programs.

The report makes it clear that such small-business failures stem from a lack of knowledge about cash flow and maintaining a cash buffer.

“Small businesses don’t fail because it’s a bad business,” Chris Wheat, director of business research for the JPMorgan Chase Institute and the lead researcher on the study.

“They fail because of cash flow problems,” he explains.

The report’s conclusions emphasize establishing and maintaining an emergency fund, and fully understanding how to sustain cash flow – that’s income and expenditures.

Least successful startups

Mr. Wheat analyzed the businesses that suffer from poor cash flow. Restaurants fare the worst.

The study indicates restaurants only last 3.7 years. That’s the shortest lifespan of a dozen industries that were studied.


Restaurants typically are hit by unanticipated expenses while trying to cope with irregular income.

Negative surprises occur because restaurants must continually buy supplies at constantly changing prices vs. an unpredictable flow of customers. Changing seasons are a factor.

“Restaurants we consistently find have more pronounced small-business challenges,” says Mr. Wheat.

“Restaurants tend not to be holding a lot of cash in their accounts. And if you put that together with any amount of volatility, it’s not surprising to see they have the highest likelihood of exiting,” he adds.

Most-successful startups

On the other hand, the study shows the most-successful businesses are real estate firms. They average a nine-year lifespan.

Their income and expenses are more predictable and stable. That means they find it easier to maintain a good cash flow.

So, if you’ve got an entrepreneurial idea, make certain you’re strong in understanding finance. Get a mentor and take whatever financial training programs you can.

Do this, and your dream will come true.

From the Coach’s Corner, here are relevant tips for entrepreneurial success:

You Can Creatively Manage Your Cash Flow 7 Ways – If you’re taking the pulse of your business, of course, the first thing to consider is your cash flow. If your cash flow is poor, you feel poor because you can’t pay the bills nor can you use money for what you’d like to do.

For the Best Cash Flow, Manage Your Inventory Costs with 8 Tips – With proper inventory management, you can lower your expenses and increase your cash flow. For many businesses, it means taking a look at your inventory costs.

Checklist — 11 Tips to Increase Your Startup’s Cash Flow – Cash flow is the salient dynamic that leads to the failure or success of a business. Here are 11 Biz Coach ways to maintain positive cash flow.

Angel Investor: Tips for Increasing Cash Flow, Profits — A successful angel investor shares his tips for good cash flow and other profit issues.

Small Business Options for Year-End Cash Flow, Tax Benefits – The fourth quarter is the time for small business owners to reflect on options for year-end cash flow and tax benefits. In general, here are items to discuss with your accountant and tax advisor.

11 Tips to Win Your Entrepreneurial (Marathon) Race – For successful small firms, strong cash flow doesn’t just happen. Advertising firms to tech startups have a system. They plan and implement with precision. Using these strategies, you, too, will win.

12 of the Best Financial-Planning Tips for Entrepreneurs – Typically, there are critical mistakes made by entrepreneurs. In essence, they’re so busy putting out fires, they leave their financial security in doubt.

“Starting your own business is like riding a roller coaster. There are highs and lows and every turn you take is another twist. The lows are really low, but the highs can be really high. You have to be strong, keep your stomach tight, and ride along with the roller coaster that you started.”

-Lindsay Manseau


Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

Is SEC on Track to Make Fundraising Easier for Startups?

July 27, 2013

The Jumpstart Our Business Startups Act, or more simply known as the JOBS Act, was supposed to make it less complicated for entrepreneurs to raise capital by easing security regulations.

You might recall it passed on bipartisan support, and became law in April 2012.

But under the law, unless the U.S. Securities and Exchange Commission (SEC) reverses its philosophy, startups will find it even more challenging to raise capital, says Seattle attorney Joe Wallin.

He’s a partner in the Seattle office of Davis Wright Tremaine.

Mr. Wallin agrees the JOBS Act treats accredited investors favorably in the offerings with the law’s repeal of the ban on general solicitation.

However, he points out startups will find it too arduous to raise funds, if the SEC adopts its proposed rules. The rules would amend Regulation D and Form D for entrepreneurs.

“The proposed rules are deeply flawed in that they will substantially increase the cost and complexity for startups trying to raise money,” writes attorney Wallin in his Startup Law Blog.

In what way are they flawed?

“The proposed rules make it harder for companies to conduct both non-solicited and generally solicited offerings,” Mr. Wallin explains.

A caveat requires startups to take a tortuous route — to determine and confirm that securities’ purchasers are indeed accredited investors.

“Originally, Section 201(a) of the JOBS Act simply instructed the SEC to repeal the ban on general solicitation for all accredited offerings, and did nothing more,” he writes. “In a hearing in the House, there was discussion, and a decision to add one sentence.”

What is the additional sentence?

Such rules shall require the issuer to take reasonable steps to verify that purchasers of the securities are accredited investors, using such methods as determined by the Commission.

“The SEC has now determined, in light of comments it received “and the magnitude of the change that the elimination of the prohibition against general solicitation represents to the Rule 506 market”, to re-legislate the deal,” Mr. Wallin asserts. “I am pretty sure Congress understood the magnitude of what it was doing and it added one sentence and one sentence only.”

He explains the proposed rules:

  1. Make myriad new Form D filings at different stages in an offering for all offerings.
  2. File in advance with the SEC all solicitation materials for generally solicited offerings.
  3. Prominently include lengthy legends in any written solicitation materials for generally solicited offerings (forget Tweeting, the legends are too long).
  4. Include substantially more information on Form D for all offerings.

“Most unfortunate of all of these items, the proposed rules impose a 1 year prohibition on using Rule 506 in your next offering if you miss a 15 day filing deadline and don’t cure it within 30 days – or if you do cure the miss, you then miss another deadline in the same offering,” Mr. Wallin warns.

He maintains the SEC is off track from the intent of the law, and is making its rules more onerous.

What’s his recommendation?

“The SEC should re-visit its entire premise behind issuing these new proposed rules. The proposed rules do not reflect the deal Congress made when it passed the JOBS Act,” he concludes.

What can you do about it? Contact your representatives in Congress and the SEC.

From the Coach’s Corner, Mr. Wallin has been a strong advocate for entrepreneurs:

How Seattle Attorneys Helped Startups Get a Reprieve from Financial ‘Reform’ – Analysis: The angel investment ecosystem for entrepreneurs and job creation return to business as usual.

How Sen. Dodd’s Financial Reform Almost Killed Financing of Startups – An attorney helps lead the fight against job-killing provisions in Sen. Dodd’s financial regulatory bill.

“Everything takes three times longer than it should. Especially the money part.”

-Hugh MacLeod


Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry. 

Planning – Tips for Avoiding Growing Pains in Your Startup

After reading my article, How to Start a New Business Before You Quit Your Job, a reader asks:

Q: Terry, Going into management and learning leadership skills (self-develop and mentored) are great tools no doubt. These can be vital once your new biz is off the ground. Can you explain how to fill the void between start-up to when you have your first employee(s)? Also examples of when the right time to “pull the plug” on your job without burning bridges? TIA

A: Good questions and they require a complex response. Every situation is different, so here are some broad answers.

stockimages hairBy filling the “void” I assume you mean how to get work done. Starting and operating a business is the most difficult undertaking of anyone’s career choices. It’s not easy.

The void is filled by working long hours with full support – if there’s a family situation – and outsourcing where necessary.

That’s also assuming there’s enough cash flow for freelance help and the ability to sustain it – with the preparation of sound financial statements and knowing what drives profits.

Unpaid interns can be useful, in general, as long as they’re not used to create business profit and the work experience clearly benefits and complements their education.

It’s important to be a good entrepreneur, and also avoid the wrath of regulators. (See Unpaid Interns: Safeguards to Avoid Legal Issues.) Candidly, in my experience as a consultant, interns require too much direction and time.)

Knowing when to hire

Expanding entrepreneurs should have an awareness of where the talented employees are. Before hiring, there must be a need but an adequate cash flow.

That means a full command of budgeting basics, maximizing prices for goods and services, knowing the break-even point and profit margins to cover all costs associated with employees.

When to resign

The time to resign is when a person has all the underpinnings for success, which includes an action plan. I can’t emphasize cash flow enough – to have adequate income from marketing and customer retention — and minimizing costs.

Incidentally, no employer is thrilled to lose a valued employee who’s destined to become a competitor.

But whatever the situation, a person can’t be too concerned about resigning. “People-pleasers” don’t make it as entrepreneurs. In any event, I’d give adequate notice and take precautions to keep the relationship on a friendly basis for possible networking in the future.

Hope this is helpful.

From the Coach’s Corner, more resource links:

Tips for Moms Who Want to be Entrepreneurs from Home — So, you have a job and would like to fire your boss to work at home. Let me caution you. Starting a business at home might be the biggest challenge of your life. Starting a home-based business has risks. It can sap your energy and time.

You Have a Great Business Idea, but You’re Stuck in 1st Gear? — New entrepreneurs often have great ideas but many hit self-created stumbling blocks. Here’s how to avoid the pitfalls.

The 8 Best Practices in Small Business Marketing — True, the constant drumbeat of uncertain economic news can be disconcerting. For many small businesspeople, the uncertainty can be so unnerving it leads to fear. But fear can be healthy if used as a motivator to act.

“Always deliver more than expected.”

Larry Page


Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

 Photo courtesy of stockimages at

Alarming Trend — Why Startups No Longer Lead in Job Creation

Startup businesses have long been the king and queen of job creation. But that’s no longer true, according to a review of data from the U.S. Department of Commerce.

Among startups in their first year of operation, jobs have decreased to an all-time low.

The disturbing conclusion comes from a 2012 study, “The Collapse of Startups in Job Creation,” by the nonpartisan policy-research organization, the Hudson Institute.

“Entrepreneurship is down by a third these last four years,” says Hudson’s Chief Economist Tim Kane. “And the decline continued in 2010 and 2011, even after the economy started growing.”

Beginning in 1977 for more than three decades, startups annually created 3 million jobs. But starting two years into the Obama Administration, in 2010, the number of newly created jobs – 2.34 million – plummeted 22 percent.

David Castillo Dominici investigationEconomist Kane lists the reasons:

— Occupational licensing regime

— Higher taxes

— Labor regulation

— General economic uncertainty

In other words, government is the culprit.

Worse, on further review, the study indicates the job-creation figures are actually worse when factoring in the nation’s population increase.

During the presidential administrations of George H.W. Bush and Bill Clinton, 11.3 Americans per thousand were employed at startups. However, during the Obama administration, the number plunged to 7.8 per thousand.

The obvious conclusions:

“Without startup job growth, there simply won’t be overall job growth in the United States,” adds the economist.

The free-enterprise spirit is suffering in America.

Hudson Institute,, describes its work as innovative research and analysis promoting security, prosperity, and freedom.

From the Coach’s Corner, sadly the economy hasn’t improved enough to create jobs. Twenty-three million Americans are unemployed or can only find part-times jobs.

Here more informative articles:

Government Spending Causes Companies to Cut Back, Harvard Study — the Hudson Institute study coincides with troubling research at Harvard University.

The Link – Local TV Journalism, Bad Government Policy, Wall Street Banks and Poor Economy — Do you ever wonder why the economic climate is still questionable? Why the unemployment rate is dubious and why the average American workweek is only 34.6 hours? Or why government policies aren’t conducive to economic growth and the creation of jobs?

7 Steps to Wealth and High Net Worth — Creating wealth and enjoying high net worth doesn’t result from pure luck. It takes a certain mindset and strong action. Here are seven proven steps.

Monopoly in Health Insurance Hurts Employers, Consumers and Doctors — How do you feel about your health insurance? Fasten your seat belt. More problems have unveiled in America’s healthcare system. Patients, physicians and employers have been in the same boat – skyrocketing health insurance costs exacerbated by a lack of competition caused by ObamaCare. Now comes an eye-opening study by the American Medical Association (AMA).

“Government is not reason; it is not eloquent; it is force. Like fire, it is a dangerous servant and a fearful master.”

-George Washington


Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

Photo courtesy David Castillo Dominici at

Funding Options to Navigate This Marketplace Bedlam

Part one of two-part series: “Solutions for a Roller Coaster Marketplace”

Aug. 13, 2011 – 

OK, it’s been a wild ride, right? Uncertainties regarding Wall Street, actions by the Federal Reserve, and funding often set off alarm bells. But if you’re looking for capital, there are reasons to hope, according to leading consultant Joey Tamer.

Ms. Tamer acknowledges that the wildly gyrating stock market and withdrawals of initial public offerings are top-of-mind concerns. “…the change in IPO activity may be the most significant,” she writes in a blog post, “Will stock market chaos create venture capital downturn?

“Venture capitalists are excited by a predictable exit market, either strong M&A (mergers and acquisition) activity or several powerful IPOs coming in the near future,” she writes. “If they believe they must wait for these liquidity events, or cannot predict when these will be active, the VCs will become more conservative in their choices, and protect their portfolios.”

Ms. Tamer is imminently qualified to comment. As a trusted source on this business portal, she’s a strategic consultant to entrepreneurs in technology and digital media, and to experienced consultants in all fields to maximize their practices.

Joey TamerJoey Tamer,

Having experienced five downturns, she recalls the trends from the last two recessions – patterns, which could repeat now.

She says the patterns include:

  • Deals that were not completed at that time rarely were completed.
  • VCs took, justifiably, defensive measures to ensure that their existing portfolio companies had enough capital to move forward on their growth cycle.  The VCs allocated much of their existing Funds to those investments already secured.  This left much less for “venturing” into new risks. And the VC’s return on investment (ROI) on their portfolios was threatened, and that ROI is the basis of the VCs being able to raise their next Fund and so to survive.
  • VCs became more conservative in the risks they would take.  On my various VC panels in the tech industry (Digital Hollywood, CES, and others), they admitted (this was 2008 and early 2009) they were “broadening their early stage searches” to include those startups that had revenue and market traction.  This criteria became a standard, leaving seed and Series A capital more and more to angel investors and angel groups.
  • Deal terms became more aggressive against the entrepreneur, to protect the VCs from potential downside.
  • Years of limited capital drove entrepreneurs to bootstrap their companies (since there weren’t jobs for them anyway) and get their companies into a much safer stage once the capital began to flow again.

Ms. Tamer cautions “the cycles of boom and bust are coming too close together.”

Specifically, she warns:

  • After the downturn of 2000/2001, the VCs didn’t get truly active again until 2004.
  • The next bust was 2008, with investment beginning again in 2010, and more actively in 2011.
  • Three to four years of an active investing cycle is not enough time for entrepreneurs to recover from these downturns, especially if the uptick in investing lasts only 3 years going further.  This cycle stresses the VCs and their new Funds as well.
  • VCs are handling portfolios with an exit cycle of 6-8 years from funding.  Entrepreneurs may launch and get traction in 3 years after funding (which means 4-5 years after they begin the company), but they are rarely scaling until year 4 post-funding.
  • Notice the age of the potential IPOs — up to 8-10 years to build value and find a good IPO window (perhaps now closed again).

But as a knowledgeable veteran strategist, she knows fear leading to procrastination is unproductive for entrepreneurs.

I agree and often use two acronyms in illustrating the dangers of yielding to FEAR:

  • “Frantic effort to avoid responsibility”
  • “False evidence appearing real”

So, Ms. Tamer offers these strategies:

  • Keep building your companies, your technologies, your breakthroughs.  Who knows what will happen next week or next month?
  • Consider alternative forms of funding — private funding for an idea re-conceived for this new economic reality; strategic funding from a win/win bigger company that needs what you have; licensing and strategic revenue and no equity or debt funding at all;
  • Consider a different take on your product or service idea, or your target market sector, or your market timing, and create a company that builds wealth for you independent of the vagaries of the stock market and other people’s ideas about capital, risk and what is real. This is my favorite kind of company to build.

See 6 Values for Financial Protection for part 2 of this two-part series: “Solutions for a Roller Coaster Marketplace.”

From the Coach’s Corner, be sure to read Ms. Tamer’s opinions on other topics:

10 Characteristics of a Successful CEO — This is a 10-part series on CEO leadership by Joey Tamer, She is a consultant to experienced consultants in all fields to maximize their practices. She has also been a strategic consultant to entrepreneurs in technology and digital media.

What No One Tells You about Raising Investment Capital — Tepid economy or not, investment capital is indeed available. That’s true during all economic cycles, according to leading consultant Joey Tamer.

What Should You Divulge When Asking for Investment Capital? — For many startups, it makes sense to grow organically. But for others, the answer is to seek capital by making the right presentation to investors. Here’s how.

The 6 Values for Your Financial Protection — Debt is the catalyst of all financial woes, says esteemed associate Joey Tamer. Here are her six values to avoid financial traps.

8 Strategies to Consider Before Starting A Tech Business — Before you launch a tech business, here are eight salient strategies to remember.

“Do the thing we fear, and death of fear is certain.”
-Ralph Waldo Emerson­


Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

Startup Toolkit to Make a Hit on the Internet

First impressions are critical for entrepreneurs. People will buy depending on what they feel about you emotionally.

Just like your bricks and mortar location, your Internet presence will be strong if you always remember why people will buy from you.

It’s important to tap into the psyche of your prospective customers – there are five value perceptions that motivate customers to buy.

ID-100201828 stockimagesThat’s right, customers aren’t even aware of it, but they make a buying decision based on five psychological reasons about value: What they think about your spokespeople, image of your company, product or service utility, convenience, and price.

Yes, you have to implement the best sales techniques as there are a lot of people who will only buy at the cheapest price so ignore them.  

Now that you’ve laid a foundation for sales to make a hit on the Internet, here’s the remainder of your startup toolkit:

1. Create a credible name

Since the Great Recession, businesspeople and consumers have changed their outlook. The dot-com era of quirky names will not work as well these days.

Also, your name has to be relevant and easy-to-remember. That goes for your branding slogan or tagline, and your logo.

Product or service utility is important in a slogan and logo – answer the question that all visitors subconsciously ask, “What’s in it for me?” There’s a link between a simple logo and branding success.

2. Professional image

Your site needs to be low-key, but assertive in telling your story. Include a page that explains what you’re all about. That’s different from being too sales-oriented or ostentatious. Demonstrate you expect to earn your visitors’ business.

Make certain your site’s layout capitalizes on the natural movement of the eye, which is to upper left, over to the right and then down the side.

So a strong element needs to be on the left, too, such as a great graphic of video. The bottom line for profits: Size doesn’t matter but image and professionalism count.

It’s important to tap into the psyche of your prospective customers – there are five value perceptions that motivate customers to buy.

Professionalism also means an informative blog, which will help guarantee that you will have a higher search-engine placement. Encourage interaction.

Ideally, your blog is on your Web site. If you must maintain a separate blog, make sure it’s synchronized with your Web site. At any rate, here are search engine optimization strategies for a No.1 rated blog.

3. Showcase your team

Customers want to feel comfortable dealing with you and your staff. Buyers are impressed if you show pride in your workers. Show their images and bios on your site to point out their expertise.

4. Establish a strong reputation

Demonstrate your expertise as an authoritative resource. Become known as a leader in your industry. Make informed statements in newspaper articles and other online forums.

It’s true more and more people are relying on social media promotions. But publicity in a credible news medium – newspaper, TV or radio – will generate the most respect. Flaunt it. Here’s how to get news media coverage.

5. Testimonials

Become adept at generating testimonials. Go for it.

6. Videos

Relevant videos now play a key role. Here are video tips.

7. Social Media

Your social media – Facebook, Twitter or even LinkedIn – should be coordinated with your site. Again, encourage inter-activity.

There are two reasons to insert sharing buttons. It will enable visitors to share your Web site link with others, and you will be able to share your pages on your social-media accounts, too.

8. Proofread all copy

Obviously, errors do not promote professionalism. That means  you need to budget time to double-check all spelling and links to pages.

9. Fresh looks

Update your content as often as possible. Search engines and visitors will take note. But take care not to extremely change your look so you can continue to capitalize on your previous marketing initiatives.

10. Optimize

Be sure to use search-engine optimization techniques and coordinate your site with your social media. Take advantage of 14 strategies to rock on Google.

11. Contact information

Make it easy, very easy for visitors to get contact information – your location, telephone number and e-mail. But include your information in graphics so unwanted bots and spammers can’t pick up the information simply by crawling your site.

You’ll avoid countless unwanted e-mail spam, phishers, and telephone calls.

12. Prevent online threats

Remember British Petroleum’s online nightmare – the fake BP Twitter account? It generated 10 times the number of visitors than BP’s Twitter account. Use best practices to optimize your brand and manage your global Web reputation

From the Coach’s Corner, here’s more on online marketing:

How Small Businesses Can Capitalize on Cyber Strategies for Profit — Yes, it’s become important for small businesses to capitalize on cyber strategies for profit. Small and even regional retailers should be cognizant of three realities.

5 Strategies to Sell More from Your Web Site — Yes, Internet sales can be challenging. To paraphrase a line from the movie, “Field of Dreams,” it’s not always true that if you build it, they will come. There are many salient elements to keep in mind.

SEO — Google’s Tips to Increase Your Site’s Download Speed — How fast does your Web site download? Google announced that it determines site rankings, in part, by download speed.

“A strong foundation increases the value of everything you do.”

-Aaron Wall


Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

Photo courtesy by stockimages at

Seattle business consultant Terry Corbell provides high-performance management services and strategies.