Dan W Bliss

The Entrepreneur Event of the Year

Today we announced the Top 50 pitches for The Perfect Pitch 2009 conference.  Congratulations to all of these amazing entrepreneurs.  Here is a link to the Top 50 entrepreneurs:

THE PERFECT PITCH 2009 TOP 50

This is a great lineup that includes a broad range of entrepreneurs.

The Perfect Pitch 2009 Conference tickets are going fast.  This event will be sold out soon.  As you know, Virgin’s Richard Branson is our keynote speaker, and we have 20 other amazing speakers, including big-name entrepreneurs and investors.  This event will change lives.  CLICK HERE to order your tickets.

I hope to see you there.

We came up with a fantastic idea that’s resonating with Twitterers.  (Damn, that’s hard to say!)

Our Twitter Icon

We are offering a $2,500 trip to Los Angeles for the best “microPITCH”.  We figured that Twitter invented micro-blogging.  We’re going to invent “microPITCHING.”

The winner of our competition wins airfare, hotel, PerfectBusiness Gold membership, consulting services and tickets to The Perfect Pitch 2009 Entrepreneur & Investor Conference.  Sir Richard Branson will be the keynote speaker, so this adds to the excitement.

We launched this competition just two days ago, and it’s spreading like wildfire.  I’m starting to gain a fonder appreciation for what Twitter is capable of.  We posted the rules and a feed on our conference site.  It’s fun to watch all of the activity.  You can see it here: http://www.perfectbusiness.com/theperfectpitch/twitter.cfm

If you are a Twitter user, please tweet the following:

@perfectbusiness Tweet a creative business idea under 140 characters & win a $2,500 trip to LA. http://bit.ly/micropitch #micropitch

I have always loved off-the-beaten-path marketing tactics.  It will be interesting to see where this goes.

He'll be here - in person!

If you haven’t heard yet, we are organizing a conference in Los Angeles with some really big hitters!  Richard Branson of Virgin will be our keynote speaker.  Here’s the basics:

The Perfect Pitch 2009 Entrepreneur & Investor Conference

October 26th, 2009 at The Ritz-Carlton in Marina del Rey

We are allowing entrepreneurs to submit online pitches for a chance to present their businesses to our live audience.  We have an amazing group of speakers, and more will be announced soon.  Stay tuned!

For more info, go to www.ThePerfectPitch.com.

Take 'em to lunch!

When I was in my mid-twenties, I was unable to convince one of my best friends to help me renovate my first restaurant.  For the life of me, I simply couldn’t understand why he wouldn’t help.  I later realized that he was a bad influence.

He was a good friend.  He would do anything for me if I ran into hard times.  However, he wasn’t there to give me a boost whenever I pursued a dream.  He was fun to be around, but he had an aura of negativity.  His humor was often based on bringing others down.  He was holding me back.

I made the difficult decision to stop spending time with this friend, and my career has prospered ever since.

Over the years, I have become keenly aware of the people that surround me.  I have learned how to surround myself with positive people.  Guess what….. most successful people make the same assessment about the people in their lives.

I believe that a positive attitude breeds success, which leads to wealth.  Becoming a positive and successful person can happen in an instant.  JUST DECIDE.  As you work toward your goals and build relationships with other successful and wealthy people, your wealth will come.

If you want to surround yourself with wealthy people (and become one yourself), just follow these steps:
1.  STOP COMPLAINING.  Nobody likes complainers, especially successful people.
2.  STOP COMPLAINING.  Too many people find common ground by complaining.  It’s a BAD habit.  It is easy to complain about traffic, weather, the economy and articles that repeat something just to make a point!  Frankly, a better habit is to disagree with complainers and watch them change their tune.
3.  Attend events and conferences.  Network and get to know outstanding people.  Prepare before you arrive, so you know who will be in attendance.
4.  Ask for advice.  Push your ego out of the way and ask successful people to share their wisdom.  You’ll be surprised at how generous they will be with their knowledge.
5.  Ask how they did it.  People love talking about their personal success stories.  It’s true.  If you are genuinely fascinated by their stories, most people will be glad to talk to you.
6.  Offer to buy lunch, dinner or drinks.  Get together socially and get to know successful/wealthy people.
7.  Don’t suck up.  Successful people don’t want sidekicks that agree with everything and laugh at every bad joke.  (Well, maybe some do.)  Just be yourself.
8.  Treat everyone equally.  Don’t look down on waiters and kiss up to executives.  People are people, and everyone deserves your respect.
9.  Be confident, but not cocky.  Shyness and insecurity won’t get you anywhere.  Stand tall.
10.  Don’t be a leech.  Pay your own way.  Don’t allow your wealthy friends to cover your tab again and again.  If you can’t afford that expensive dinner or golf outing, it’s better to make other plans and explain that you can’t make it.
11.  Be giving.  Try offering to help without asking for anything in return.  Be genuine in your help.  If you recognize a way to help a successful business owner, and you offer that help for free, you will be remembered and appreciated.
12.  Be comfortable talking about money and business.  Wealthy people enjoy talking about money and business.  These subjects are interesting to them.  These should be your interests as well.

Sadly, many people without money are convinced that wealth leads to classism.  While this may be true in some cases, there are two bigger reasons why wealthy people don’t hang out with poor people:  (1) poor people don’t enjoy talking about money and business, and (2) poor people complain too much.

Wealthy people enjoy spending time with up-and-comers.  A person who is flat broke with a positive attitude and big ideas will have no trouble finding wealthy people to hang with.

Robert Kiyosaki of Rich Dad Poor Dad fame says, “Being poor is permanent.  Being broke is temporary.”  If you don’t have any money, don’t think of yourself as poor.  Think of yourself as temporarily broke, but on your way to big things!  That’s the attitude you need to attract wealthy friends.

Celebrate your own restaurant!

In last week’s article, I discussed financing both a restaurant and a concert venue, while starting with no money.  Now I’ll tell you how I did it.

I have received incredible feedback from dozens of people.  Some have asked for suggestions on how to do it themselves.  Well, here it is.

First of all, I must emphasize how important it is to have a good business plan.  If you don’t write it down and think it through, it will never happen.

I bought or built six restaurants or bars by the time I was 30.  Every time, I had to devise creative methods to raise funds.  On several occasions, I used business plans to get investors on board.  Other times, I created plans and raised the necessary funds through a combination of tactics.

Here are 20 methods I’ve personally used to pay for restaurants or bars:

1.  Equity Investors - To secure investors, read the two secrets revealed at the end of this article.
2.  Seller Financing - If you buy an existing business, the seller will almost always accept payments on 30% to 60% of the purchase price.  Negotiate the best terms you can get.
3.  Buy the Building - You may be able to get a better deal on the business if you buy the building too.  Real estate can sometimes be easier to finance than a business alone.  It may also be easier to attract investors in a building AND business deal.
4.  Shared Commissions - If you have a real estate license, and you are buying an existing business and/or real estate, you may be able to receive a share of the commission.  Make sure you explain up front that you are acting as a representative of the buyers (which happen to be you and your business partners).  I once took this idea a step further by convincing the seller to pay the commissions over time.  The seller’s broker agreed to this as well.  This enabled the seller to accept a smaller down payment.
5.  Deferred Rent - If you aren’t buying the building, explore the possibility of getting the landlord to defer some of the rent.  This can be done in exchange for paying higher rent later or extending the lease.  Most importantly, it will reduce your cost of getting up and running.
6.  Build-Out Allowance - Some landlords will provide build-out allowances for reliable tenants to pay for improvements.  Shopping centers do not typically give allowances.  However, an entrepreneurial landlord or an office building with retail space might be willing to provide an allowance and amortize it over the term of your lease.
7.  Credit Cards - Use this method sparingly, because interest rates can be pretty painful!
8.  Other Credit - I’ve bought furniture, equipment, building supplies, flooring and carpet on credit.  I once had to buy carpet from two stores, because one store wouldn’t extend enough credit.  (Did you know that competing stores are supplied by the same carpet mills?  If you want two orders to match, make sure they come from the same die run.)
9.  Leasing Equipment - Expensive equipment and copy machines are often leased.  Fast-growing business may even want to explore leasing desks and cubicles.  Refurbished and leased office furniture can help you reduce your startup costs and gain flexibility.
10.  Equipment-for-Equity - Used restaurant/kitchen/bar equipment moves very slowly.  A closing restaurant or a used equipment retailer will consider all kinds of creative deals.  If the worst-case scenario is they get the used equipment back, the risk to work with you is minimal.  Offer equity and partial payment.  Only accept equipment you need.
11.  Vendors - Rather than buying your own video games, pool tables or jukeboxes, a vendor will supply these for free, in exchange for a 50-50 split of the revenues.  In many cases, a vendor might even lend you $5,000 to $15,000 to get your business.
12.  Sponsors - Beer, liquor and cigarette companies are often willing to pay for exclusivity or premium exposure in your business.  Every state has different rules.  High volume businesses can easily collect $5,000 to $20,000 per year in sponsorship deals.  Some businesses can generate $100,000 or more per year.  Take care of your sponsors if you want them to renew their deals in future years.
13.  Advertising - Many restaurants and bars are able to sell indoor advertising in restrooms and public areas.  Advances may be difficult to get, but you can start discussions early and get paid even before your grand opening.
14.  Subleases - Convince a smaller business, such as a kiosk or ATM to sublease space from you.  If you have a kitchen, a caterer might be willing to lease your kitchen during off-hours.  Get this commitment before opening to offset your monthly overhead.
15.  Contractor Financing - If a contractor needs work, you can sometimes offer to pay slightly higher rates, plus interest, to get a contractor to accept terms on a portion of the construction costs.  Note, they need to have enough cash to pay for materials and labor.  They will usually only accept terms on the profits.
16.  Neighbors - Who are your neighbors?  Is there anything you can do for them?  We once sold a long-term easement for a fire exit through our patio.  It allowed a neighboring bar to increase their occupancy, and it helped us pay for the construction of a new nightclub.
17.  Pre-Booking - Rent your facility to event organizers, promoters and filmmakers in advance for a reduced rate.  You will need to include a contingency clause in the agreement to explain that you will return the money if the business doesn’t open.
18.  Sell Equipment - If you are buying a business, sell unnecessary furniture and equipment to help pay for renovations.  Hint: Sell your vending equipment to a vendor, and ask the same vendor for a loan.
19.  Barter - Be willing to offer facility rental or bar/restaurant tabs in exchange for ANYTHING you need.
20.  Sweat - You and your friends can all grab a paintbrush and chip in.  You may need to offer pizza and beer as payment, but this is much cheaper than paying professionals.

I’ve listed 20 funding ideas above, and I haven’t even mentioned personal funds or business loans.  If you have cash or the ability to secure SBA or traditional loans, then go for it.  If not, the list above should get you pretty far.

If you are seeking equity investors for your restaurant or bar, I have two secrets to share with you.  These come from direct personal experience:
SECRET #1 - Investors are rarely drawn to restaurants and bars for the profits.  They invest for the social benefits of owning a restaurant or bar.
SECRET #2 - (and this relates to Secret #1)  You need to show investors 3 things:  (1) how investors will get their money back at some point down the road, (2) your trustworthiness, and (3) how fun it will be for investors to enjoy a meal or a drink in their own establishment.

Yes, restaurants and bars can be very profitable.  They also have a high failure rate.  Investors know this.  If you emphasize the financials and the return on investment, investors will analyze the potential profits and risks.  The deal will fall apart.

To close deals with investors, you must focus on trust and the emotional aspects of owning a restaurant or bar.

Cheers!

Persistence pays off!

I’m a big admirer of Thomas Edison.  His unrelenting effort changed the world.

His persistence is legendary, but I believe that his unwillingness to recognize failure is the source of his enthusiasm.  He believed down to the bone that every failure was a positive learning experience.  He once said, “If I find 10,000 ways something won’t work, I haven’t failed.  I am not discouraged, because every wrong attempt discarded is another step forward.”

When I was getting started in business and trying to raise capital, I thought about Edison every day.  Maintaining the right attitude about rejection after rejection allowed me to move forward without even a notion of quitting.

In 1995, I had no money, extended credit and had just opened my first restaurant on a shoestring budget.  My business partner and I began negotiating to buy a famous concert venue AND the building it occupied.  Frankly, we had no business even inquiring about it, but we began negotiating anyways.

I vividly remember one particular lunch with the sellers.  I cleaned my suit with a lint brush, because I couldn’t afford the dry cleaning.  I had no gas money, and I was praying that they would pick up the check, because I certainly couldn’t afford it.  Yet, I was supposed to be buying their business and building!

After writing my business plan, I worked feverishly to secure investors.  After talking with over 110 investors, I landed 13 people to get on board.

We weren’t out of the woods yet.  We also needed to get a bank loan to buy the building.  Keep in mind that banks don’t like to make loans to businesses in the “restaurant/bar” category, and they certainly don’t like financing real estate with a single restaurant/bar tenant.  It only made it worse that the tenant was me!

I convinced the sellers to carry a note and subordinate it to a 2nd mortgage position.  This meant that the bank would have a 1st mortgage and a strong position.  Easy, right?

I personally met with 43 banks!  No after No after No after No!!!!!  These were respectable bank executives telling me that I lacked the creditworthiness and reputation needed to finance a single-tenant restaurant/bar property.  What kept me going?  Thomas Edison.

As the list of banks grew, I proudly checked off each bank that rejected us and noted the reasons for the rejection.  In my mind, I successfully narrowed the field of prospective banks!  I was getting closer to identifying the ONE BANK that would say “Yes.”

Of course, I found that bank, and the deal went through.  Two guys with no money, no credibility and little experience made it happen through sheer will power.

To this day, I fall back on this memory each and every time I struggle.  Most people would have given up after talking to 10 investors and 5 banks.  Sometimes, I think it was the hardest thing I’ll ever do.  Consistent rejection from over 100 people is hard to overcome!  Without the attitude borrowed from Mr. Edison, there’s no way I would have done it.

Feel free to borrow it for yourself.

Look for the green grass!

People are cattle.  This does not mean that an individual person can’t think on his or her own.  This simply means that the general population behaves like a herd of cattle.  (Feel free to substitute flock of birds, school of fish or any other groups of animals that move together.)

People tend to go with the herd.  Using the cattle analogy, if the herd is heading up the hill for greener grass to eat, a cow in the back of the herd thinks, “Someone up front must know what’s going on,” so the cow follows.  Of course, by the time the full herd arrives there, the best grass is gone.  Usually, the cow in the middle or back of the herd is happy with the remnants, because this cow has demonstrated an appetite for remnants.  As a result, this cow has learned to watch the flow of the herd more attentively.  By watching the “market for green grass,” this cow has discovered a way to get better remnants.  In this way, the wisdom of the herd has provided positive results for the cow.

What the cow doesn’t realize is that the best grass isn’t found by watching other cows.  It’s found by looking for GREEN GRASS!

Sadly, most people act in the same way, and it is reflected in the markets.  This applies to the stock market, commodities market, housing market and the demand for virtually anything.

When the market is hot, then everyone wants in.  Even when prices get irrationally high, people keep buying.

When the markets go south, everyone wants out.  Even when prices get irrationally low, people keep selling.

The secret is that people tend to project these trends higher and lower than they really deserve to be.  To capitalize on this, it’s up to you to stop watching the “herd” and start looking for the “green grass.”

When the market goes up and everyone is buying, you can capitalize by being the only one selling.  Ask a high price.  Let people come and get it.  If they really want it, and the emotions of the market sink in, buyers will meet your asking price.

When the market is down and everyone is selling.  Evaluate deals on the principles.  Make low offers.  Sellers in a down market will often fear the worst.  Their fear of the continued trend will allow you to find deals never before possible.

Now, I’m not suggesting that you should exploit people or take advantage of the situation in an unethical way.  I’m simply reminding you to avoid watching PEOPLE when evaluating your business decisions.  If you are buying or selling an investment in any environment, it’s important to know the economic climate, but it’s even more essential to make your decisions on the merits of the deal.

The smart cow finds the green grass and allows the herd to follow.

Empty Pockets?

Not having money is no excuse to put off your business dreams.  As they say, there is more than one way to skin a cat.  Whether you are unemployed, or employed and overextended, you CAN start a business without any money.

I know some of you are saying, “No way!  I’m completely broke, and my plans are big.”  Here’s a little dose of reality for you…  It’s not always easy.  An investor or lender isn’t going to swoop down out of the sky and give you a million dollars with a little pat on the back!  You are going to have to WORK, and you’re going to have to THINK.  Based on your circumstances, you may need to adapt your business to match your circumstances.  This means that you may need to start Phase 1 on a modest level, then Phase 2 on a bigger level, etc.

I’ll give you an example of an early business I started with $0.  After college, I struggled in commercial real estate (mostly because I couldn’t convince businesses to hire a rookie to represent them in buying or leasing property).  With a friend, I started a house painting business.  Our only costs were the DBA registration, business cards and estimate forms that we printed at Kinko’s (total cost less than $100).  We generated clients by contacting homeowners with peeling paint outside – a perfectly targeted audience.  We did some estimates, and we used the deposits from our first two clients to buy ladders, brushes, etc.  We then ran some newspaper ads to hire workers.  In our first month, we went from $0 to $26,000 in sales.  We soon had four crews and more work than we could handle.  We were in business!

If you need to start a business that requires more significant capital, well I’ve done that too.

Here’s a list of ideas on how to launch a business, starting with nothing:

1. (This is my favorite.)  Instead or starting a new business, buy an existing business and improve it.  The seller will often finance more than half of the cost.  Plus, you will be able to use the track record of the business to gain immediate credibility.  Once you buy it, you can change the business to match your vision.
2. Find customers that will give you an advance for future products or services.
3. Talk to your suppliers or manufacturers.  Ask for terms, so you can pay them in 90 or 120 days.  They may even invest in your company.
4. If you are in the restaurant/bar business, vendors who supply pool tables, jukeboxes and video games will often lend $2,000 to $15,000, just to get your account.  The best part is that they will be repaid from the vending income, so you don’t have to worry about making any payments.
5. Good credit can come in handy, and not just for credit cards.  You can often finance furniture, equipment, carpet and building materials to renovate your business.
6. Speaking of renovations, recruit your friends to help you paint and spruce up your business.  These are the only people that will work for pizza and beer.
7. Look for barter opportunities.  Make a list of the things you need, and try to negotiate a fair trade.  Some deals may even require a three-way trade.
8. If your budget requires expensive equipment, consider leasing instead of buying.  This will reduce your startup costs.
9. If you site requires extensive web design and programming, consider giving your programmer a stake in the company or simply ask to pay over time.  If your programmer needs the work, you might get favorable terms.
10. Write an amazing business plan and find investors or partners to participate.  Before approaching anyone, think about it from the investor’s perspective.  Is it worth the risk to invest in your business?  How will they be repaid?  Is the payoff high enough?

Talk to everyone you know.  Seek ideas and referrals to help you formulate ideas to get your business off the ground.  Watch some videos on PerfectBusiness, especially interviews with entrepreneurs in your industry.

Some businesses just need a little bit of seed money for web design concepts, legal costs or even the entire cost of the startup.  I can’t tell you how many people contact me looking for investors of $2,000 to $5,000.  It’s just crazy!  If you don’t have credit or friends that can kick in this amount, then you might simply have to do it the old fashioned way… EARN IT!

1. If you want it bad enough, you’ll do it.  Try these ideas on for size:
2. Sell your car and buy something cheaper
3. Move into a more affordable apartment
4. Get a roommate
5. Sell your giant flat screen TV
6. Pack your lunch and stop drinking $4 coffee every day
7. Quit smoking
8. Get a side job on Saturdays

Sure, it hurts.  But, if you need a little bit of seed money to get your business rolling, you may need to sacrifice.

On a final note, you might want to check out peer-to-peer lending services, such as Prosper.com.  If you decide to borrow from family or friends, but are concerned about awkwardness in your personal life, check out VirginMoney.com.  Virgin Money will act as a middleman to collect payments on behalf of the people that lent you money.

So, now that you know how to solve your lack-of-cash dilemma, get to work!

I’ll try to tread lightly on this subject, but it may not be possible. So, here it goes.

Woman Thinking Like an Investor

It is common for women in relationships to believe that they can change a man for the better. Of course, it is not very easy to do. Men will be men.

In the movie Jerry Maguire, there’s a famous line where Renee Zellweger’s character says, “I love him for the man he wants to be. And I love him for the man he almost is.”

It occurred to me that VC and angel investors often evaluate startups based on upside

potential. While investors may have more influence on a startup than a woman might have on her man (a whole separate debate), I thought the similarities deserved a closer look.

I discovered that women evaluate men similarly to the way investors evaluate startups. Here are six ways they are similar:

1. Women and investors get excited about the upside potential of a prospect.
2. Women and investors often follow their gut instincts.
3. Women and investors confer with a group of advisors.
4. Women and investors regret overlooking negative signals.
5. Women and investors believe that they can change an imperfect prospect.
6. Women and investors prepare an exit strategy before entering a deal.

Of course, this doesn’t apply to ALL investors, nor does it apply to ALL women. It is simply an observation.

I’d love to hear your thoughts on this list.