We talk to many prospective entrepreneurs every week. Many have decided that they want to go into their own business and be their own boss. After that decision is made, they must then decide if they want to enter the business world as an independent by launching (or buying) a one-of-a-kind business or by buying into a proven franchise. We don’t have an opinion as to whether one approach is better than the other because there are so many issues (both personal and business) to consider. We believe that there are advantages to each. However, there are some particularly attractive reasons to buy a franchise that we’d like to share with you:

• When you purchase a franchise, you get to do your due diligence before you buy. In the U.S., Federal and State laws require franchisors to fully disclose all of the pertinent details about a franchise before you buy.
• A franchise, unless it is a new one, is a proven model or system. By the time you buy your franchise, all of the bugs should have been worked out.
• Most franchises are existing brands that many people have already heard of, so when you hang your sign and open your doors your prospective customers know about you and know what to expect. In addition, you get marketing assistance from the franchisor.
• When you buy a franchise, the franchisor has the responsibility of providing training and on-going support. That is one of the key things that you are paying for through your upfront franchise fee and royalty payments.
• If you are in a retail business that requires a physical location, a franchisor will be able to provide assistance with site selection, real estate services, and construction.
• Franchisees have purchasing power when they source inventory and supplies through a corporate-wide buying program.
• Some franchisors will provide access to capital.
• Many communities will provide benefits to franchisees that are willing to locate in their community and hire their residents.
• Franchisees who wish to sell their businesses will often have a quicker and more lucrative exit because the business they are selling will often have an established market value and name recognition.
• Franchisees usually experience reduced risk of failure and increased chances of success due to the fact that they will have been properly trained by the franchisor and the franchisor has provided the franchisee with a proven operating system.

It is important to remember that the benefits of buying a franchise are all dependent on the franchisor being successful. Not all franchisors are equal. Branded franchise concepts can be great business opportunities or can be catastrophic business failures in which you have invested your time, passion, energy, and capital. In next week’s blog post, “Consider these Criteria before You Buy a Franchise,” we will offer our thoughts on the important criteria a franchise should meet before you buy. You may also want to visit the Business Plans for Franchisees page on our website.

Fans of AMC’s Mad Men may be forgiven for thinking marketing is a glamorous field – a celebration of consumption and style in the ‘60s. Unfortunately, marketing in the 21st century has little to do with what is portrayed in this engaging TV series.

Today’s marketer needs to be part artist and part scientist. Artist, because creativity is still a valuable commodity. Scientist, because analytics rule in the modern world of marketing where everything can be tracked and measured.

Recently we came across a very interesting infographic in a blog on Salesforce.com (click on the image to view full size). It depicts the dual personality of the modern marketer: part artist, part scientist.

The Artist in a marketer is involved with:

• Written content: Your website needs to tell a compelling story. Every piece of collateral you produce needs to convey the same message in a way that moves your audience to action.
• Visuals: Attention grabbing visuals help you rise above the noise. Your prospect is being bombarded with marketing messages every second. You need to stand out with memorable visuals.
• Social media: This 21^st century innovation is becoming one of the main ways businesses interact with their customers. Consumers are able to provide real-time feedback to businesses using social media, and businesses need to respond deftly.
• Email marketing: It is still the predominant way to reach your customers. It is critical to be concise, persuasive, and informative.

The Scientist in a marketer does the following:

• Performance tracking: It used to be said that half of all marketing budgets are wasted; managers simply had no way of telling which half. Given the rise of Internet as a predominant marketing medium, it is much easier to track performance and decide which tactics work better than others.
• Operations: Marketers need to be operations savvy. They need to understand the nuts and bolts of the four P’s of marketing: product, price, place and promotion. Marketing is so much more than mere communication.
• Analytics: Data mining is the greatest new weapon in a marketer’s arsenal. Now you can target your customers with greater focus than ever. It is important to keep on top of trends and figure out how to ride new trends.
• Campaign performance: Companies such as salesforce.com can help marketers analyze campaign performance in detail. You can track how customers are reacting to your company’s message in social media, online, radio, and TV, via modern campaign performance tools.

The ideal marketer combines the two personas – artist and scientist – in a way that blends the best of both worlds. It is not about being left-brained or right brained. It is about using your whole brain.

Virtually every document we write requires a strong personal biography of each member of the client’s management team.

The reason is that investors, bankers, and other interested stakeholders usually believe that the strength of the team is the most important factor in predicting the success of an enterprise.

Yes, even more important than product or market.

“A great team can fix a mediocre idea, but a mediocre team can’t execute a great idea,” as the saying goes.

Not surprisingly, it is very difficult to write someone else’s bio simply because we do not know the individual’s background, experiences, and strengths. Even if they provide an up-to-date resume full of dates, activities, and accomplishments. Only the subject of the bio has a true sense of herself that will allow her to project credibility and trust. A biography will always be more interesting and compelling if at least the first draft is written by the subject.

We usually ask our clients to write the first draft of their own bios. We tell them what to include and what not to include. Once we have a first draft, we can usually do a pretty good job of making it more readable, interesting, and credible.

And yet, time after time, drafting a bio proves to be a considerable challenge for many clients.

Before we get into specific tips, let us explain why a compelling bio is so important:

• Your bio is your brand. It allows you to position yourself in the market. It allows you to shape how the reader perceives you – which is critical, because perception often becomes reality.
• Your bio is the heart of your online presence. Today your potential customers, employers, investors, dates, and others are checking your bio on sites lilke LinkedIn and Facebook to determine whether or not you’re a good fit.

There isn’t a single “best” way to structure a bio, but here are some guidelines we often find successful:

• Keep it short – certainly no longer than around 500 words.
• It should begin with a chronological listing of what you did to get to today in terms of jobs or assignments of increasing responsibility. Mention organization names and titles, and certainly mention accomplishments.
• Don’t tell the reader how great you are – let them come to that conclusion because of the results you’ve produced.
• Include your educational accomplishments.
• Write in the third person perspective to give a sense of impartiality and professionalism.
• In a final paragraph, describe your role in the organization and why your background makes you the best person for the role. If you are responsible for new customer acquisition, describe the home runs you’ve hit in landing customers for a previous employer.

Remember, your bio is your brand; your way to make a great first impression. Keep it relevant, compelling, and brief. Don’t just use it to provide information. Use it to sell yourself in a professional and credible way.

The idea behind an elevator pitch is simple: You happen to be in the same elevator as a dream prospect. You have sixty seconds to gain the prospect’s attention. What should you say?

The pitch you make needs to be well prepared and rehearsed. You need a succinct six-sentence summary of your customer value proposition, and what you are asking for.

What are the six magic sentences?

1. Hook: You need a one-sentence hook that will catch the prospect’s attention. Your business idea may not be greatest thing since sliced bread, but it needs to matter to the prospect. It needs to be conveyed in terms that appeal to the prospect. You may enjoy chocolate mousse, but if you plan to go fishing, you will catch more fish with worms as bait rather than the finest Swiss chocolate.
2. Need: What problem is your customer trying to solve? A customer needs a quarter-inch hole, not a quarter-inch drill bit. People want to build a home or a driveway, they do not want to buy cement, per se. Step into your customer’s shoes and feel her pain. Then describe that pain in the customer’s terms.
3. Approach: How are you alleviating that pain? Are you going beyond merely a faster or cheaper solution? Do you have a substantially better way to solve the problem? Vinod Khosla, ex-partner at Kleiner-Perkins and now founder of Khosla Ventures, looks for 10x solutions: solutions that are 10 times better than what is currently available in the market. When I was VP of marketing at Corvis, a Kliener-Perkins funded startup, Vinod pushed us to think big. Don’t just be slightly better than the competition — be an order of magnitude better.
4. Benefit: Most entrepreneurs think in terms of features. What matters to the customer is the benefit.What customer benefits does your solution provide in customer’s own terms? Most car buyers don’t care how many cylinders a car has, or whether or not it is turbocharged – but they do care about having enough power to pass safely and to have an enjoyable driving experience. Always describe the benefit in terms of how it meets user needs, and not in terms of product features.
5. Competition: Why are the benefits you provide better than those of the competitive offering? Customers have choices. You need to be able to connect with the customer in terms of a substantial competitive advantage. Just being slightly cheaper or faster is not going to cut it. A customer needs a significant reason to switch brands or solution providers.
6. Ask: This is the most important piece many entrepreneurs forget. What are you asking for? Make it short and memorable. “We are seeking $1.5 million in first round of funding” is a better way to state your “ask” than just saying, “we are currently raising our first round.”

Once you have written down these six sentences, practice delivering the pitch until it becomes second nature. Seek feedback from your colleagues and mentors. Iterate until you have the perfect pitch. Now you are ready for that chance encounter with your dream prospect.

A client of ours recently mentioned that he identified a venture capital fund that he thought would be a perfect investor for his new mobile app. He said that the fund’s portfolio seemed to be loaded with similar apps and that they would probably think that he is a good fit for them. He wondered, though, what is the best way to get a meeting with the VC. We told him that, hands down, the best way was to be introduced by somebody the VC already knows and trusts.

As you know, most venture capital funds specialize by market or product, geographical area, and stage of development. So, for example, some only do early stage B2B technology deals in Silicon Valley, while others only invest in health care technology companies around Boston that have a minimum of $10 million in annual revenue. Once you have identified a VC who you believe invests in your kind of deal, you will want to closely examine the fund’s portfolio to find companies that have something in common with your enterprise. Most funds list their portfolio companies on their website. If they don’t, you usually find them using Google or tools like ChubbyBrain.

The next step is to check out the management team members on each portfolio company’s site and see if you happen to know any of those individuals. If you do, call them and see if they will introduce you to the investor at the venture fund that sits on their Board, or with whom they have the most contact. That’s it!

Chances are, you probably don’t know anyone who works at one of these portfolio companies. But that’s ok. You can still meet them. How? Virtually everyone in business (including you, we hope) is on LinkedIn. So locate these people on LinkedIn and see if you have any acquaintances in common who can introduce you. If not, you can use LinkedIn to send them a message. Let them know that you run a company similar to theirs, and that you would like to have a brief conversation. Hopefully you can get them excited about your startup and willing to make an enthusiastic introduction to their investor. It’s time consuming, but it’s a great way to build your network and you’ll probably identify some new opportunities that have nothing to do with being introduced to a VC.

Before you begin networking and seeking introductions to fund managers, however, you must be certain that your company is “investor ready.” It’s not enough just to have a brilliant idea. You need, at a minimum, a strong team, a working prototype, and preferably some actual paying customers. You will also need to prepare some materials to help investors understand and evaluate your business. At a minimum you will need a well-developed pitch deck, executive summary, and business plan that explain where you are going with this business and how you are going to get there. You will also need a 5-year financial forecast based on defensible assumptions. When preparing these materials, be sure to avoid these common mistakes.

For additional information and advice on raising capital, please see the Funding Your Business resources on our website. Good luck!

Public discourse in recent years has revolved around the question of creativity: how to foster it, how to harness it, and whether our society suffers a critical lack of it. Corporate consultants have also been expanding their repertoire to offer workshops that promise the secret to unleashing creativity.

While the art museum may seem an unconventional venue for business professionals, consider that the works on display in an art museum are the result of countless individual lives dedicated to creation and expression.

It is this—and the kind of creative thinking that artworks embody and help viewers to develop—that has led companies such as Pepsi, DDB, and The University of Chicago Hospitals to take part in museum–based workshops co-led by art educators and corporate trainers.

The approach has even been adopted in formal business education: at the Harvard Business School, for example, discussions around works of art (donated to the school by alumnus Gerald W. Schwartz) have been incorporated into a course on moral leadership—because through art, Schwartz says, “sometimes you think about a problem differently.”

So how, exactly, do works of art promote creative and innovative thinking? Experts emphasize that creativity involves certain thinking behaviors, and it is these that are developed while viewing and discussing art:

• Reframing problems. Marcel Duchamp’s famously reframed a urinal as art by literally putting it on its side in his Fountain sculpture. Being able to look at a problem from a different perspective is one of the keys to expanding the field of possible solutions, according Tina Seelig, author of inGenius: A Crash on Creativity.
• Challenging assumptions. Revealing the assumptions that underlie our initial, quick answer is essential to generating new ways of thinking about and seeing a problem, says Seelig. Cindy Sherman, in photographs where she depicts female stereotypes from the silver screen, forces us to confront our assumptions about femininity, sexuality, and gender roles.
• Discovering unexpected connections. Creative people connect and combine things in surprising ways. Jasper Johns’s Flag combines a recognizable and honored symbol with incongruous materials, and sparks new ideas when we apply the same “What if” question to other domains.
• Seeking out new experiences and knowledge. Our ability to make connections and think differently hinges on the breadth of our experience and knowledge, upon which creative thinking is based. Confronting challenging works of art and the diversity of others’ perspectives stretches what we know and how we think.
• Enhancing powers of observation. “Pay attention,” Seelig says, because close observation is essential to knowledge and therefore creativity. We are quick to interpret visual cues, and being asked to ground interpretations of painting with visual evidence forces us to pay closer attention to what we observe.
• Take risks. Proposing a new idea, approach, or project is challenging for many, but essential in innovation. Gaining practice in a low-stakes setting—in discussions about a puzzling sculpture—facilitates risk-taking in a more important one.

More and more museums are developing programs designed to cultivate creativity. Art-Work, a program of the Art Institute of Chicago offered in partnership with Catalyst Ranch, Chicago’s creative conference center; the Columbus Museum of Art, which has a new Center for Creativity; and the Virginia Museum of Fine Arts are just a few museums that have launched programs specifically for the business community. The next time you want to inspire inventive thinking in your team, a workshop at an art museum might be just the solution.

Sub-Saharan Africa is hot, and often, very humid. But that is not what we mean by sizzling.

The IMF forecasts that sub-Saharan economies will grow at 5.7%, and the region is home to nine of the world’s 20 fastest-growing economies. That is the central theme of Dealmakers Dream of African Riches, an article appearing in the January 21-January 27, 2013 issue of Bloomberg Businessweek.

The authors of the piece report that Citigroup, Barclays, and Standard Chartered are expanding their presence in Africa in the hopes of taking advantage of agricultural, mining, and telecommunications deals. Cayenne Consulting has completed several telecommunications engagements in Africa in the past year, and is in fairly serious discussions with several other telecom entrepreneurs who plan to access the capital markets in 2013. Other observations that come from the article include:

• According to Barclays, “Africa has emerged as the world’s second-fastest growing region, after Asia and ahead of Latin America and Eastern Europe.”
• “We saw sub-Saharan Africa as being where China was 15 years ago,” says Genevieve Sangudi, the Lagos-based managing director for Carlyle Group’s regional fund.
• According to the Emerging Markets Private Equity Association, private equity transactions jumped 19% in sub-Saharan Africa in the first 9 months of 2012.

Of course, sub-Saharan Africa still has many challenges as the piece points out. Unstable politics, nascent capital markets, and mostly inferior infrastructure such as poor roads, ports, and flight connections are commonplace. Electric grids that often fail during heavy usage are more the norm than the exception. And yet, the opportunity and the increase in activity are, in many ways, very exciting.

So, what does this portend for entrepreneurs in the region who may not be ready for the institutional capital markets but are ready to build meaningful businesses?

The aphorism ”A rising tide lifts all boats” applies very well to the level of economic and business activity in Africa. In this context, it means that capital doesn’t just flow to the larger, more established companies. Indeed, we have seen investments from a range of development banks as well as early stage investors moving into attractive, well planned telecommunications, IT, payments, health care, and real estate deals. The entrepreneurs who sponsor these projects are well-educated and have experience in the industries in which they are participating.

Here are some tips for early stage entrepreneurs in Africa that will require external capital in order to launch or expand their enterprises:

• Assemble a great team of individuals, each of whom has an established a track record of success and the ability to execute.
• Have a clearly defined, credible market opportunity and be able to show how that opportunity will be achieved.
• Develop a business plan that will communicate in a very professional way the business and investment opportunities that will accrue to financial and strategic investors.
• Build an awesome network from your attendance at regional and international meetings, from social networking, and from participating in online groups of entrepreneurs with similar goals.

Clearly, the opportunities in Africa for both entrepreneurs and for investors are extraordinary. In a Bain & Company report published in November 2012, A World Awash in Money, the authors point out that “In today’s capital-abundant times, the ability to identify owners of good ideas and help them achieve their full potential will be the hallmarks of investing success.” So, for entrepreneurs in sub-Saharan Africa and beyond, be one of those owners.

We recently completed a feasibility study for a client who wished to immigrate to the United States to establish an import and distribution business. Part of our assignment was to help him decide on the best state to locate the business. We decided that the business should be established near a port and that there should be easy access to an interstate freeway. But what were the other determining factors that went into our recommendation? We decided that we needed to figure out which states were the most business-friendly and that would take us where our client needed to go.

This past summer, CNBC ranked all 50 states according to how open they are to business. To do this they used 51 metrics of competitiveness developed with input from groups such as the National Association of Manufacturers and the Council on Competitiveness. They then grouped the 51 metrics into 10 broad categories:

• Cost of doing business
• Workforce
• Quality of life
• Infrastructure & Transportation
• Economy
• Education
• Technology & Innovation
• Business friendliness
• Access to capital
• Cost of living

According to CNBC, here are the 10 most and 10 least business-friendly states:

That analysis was very informative but we thought that it would be useful to have a look at one or two other sources to see how they compare. We stopped by The Tax Foundation, a non-partisan tax research group formed in 1937 to see what they had to say. We realized that they would rank states primarily on the basis of business tax burden, and yet the rankings turned out to be very similar to CNBC’s. They concluded that “a state that raises sufficient revenue without one of the major taxes will, all things being equal, have an advantage over those states that levy every tax in the state tax collector’s arsenal.”

In December 2012, Forbes ran a story titled Utah Tops Forbes 2012 List of the Best States for Business. Their ranking is based on six vital factors for businesses: costs, labor supply, regulatory environment, current economic climate, growth prospects, and quality of life. It should be obvious from the title that Utah won. The other states that made the top 10 included 2) Virginia, 3) North Dakota, 4) North Carolina, 5) Colorado, 6) Nebraska, 7) Texas, 8) Georgia, 9) Oklahoma, and 10) Iowa.

What did we conclude from all of this? Well, of the three samples that we took, only Utah and Texas scored among the 10 most business friendly states in all three. Wyoming, Nebraska, and Virginia appeared in two of the three top-10 lists so they were worthy of consideration. North Carolina also was among the top 10 in two of the polls, but was among the least business friendly in The Tax Foundation survey. So, we decided to disqualify North Carolina.

Our client will be importing low-cost commodity products from Asia and will then be selling these products to wholesale distributors in major markets. We needed to be near a port and we needed interstate freeway access to major markets. We decided that the port requirement disqualified Utah, Wyoming, and Nebraska. The State of Virginia (Norfolk) is home to one of the best deep water ports on the East Coast. Ultimately, however, we decided that Houston was the best place for our client to locate because of the business climate, the Port of Houston, and the ability to get to all major markets within 15 hours.

You may have different criteria to consider when you decide where to locate or move your business. Nevertheless, it is good to know what the professionals are thinking when they do their rankings.

A new study by the Kauffman Foundation estimates that the passage of the bipartisan Startup Act 3.0 bill, which expands the number of visas available to foreign-born entrepreneurs who already hold other kinds of visas, would create as many as 1.6 million jobs in the United States over 10 years.

The Kauffman Foundation also produced a brief video that highlights how foreign-born entrepreneurs might have a different view of the startup landscape than domestic entrepreneurs.

You can see Kauffman’s full report here.

Love them or hate them, meetings are a cornerstone of the business world. Every day, we hold staff meetings, pitch meetings, and project meetings, all in the hopes of hammering out the solutions and deals we need to keep growing our business.

But whether we’re sitting in a conference room around a fancy polished table or dialing in from our home office, we’ve all attended meetings that felt like a huge waste of time. There’s nothing like watching the hours slip away irretrievably as your fellow meeting participants struggle to find the right spreadsheet to share, drone on about information that has nothing to do with your objective, or rehash exhausting debates that never get resolved. In the meantime, you’ve got a ton of legitimate work that is begging for attention.

Meetings will never go away. But with a few simple tricks, you can make your meetings more productive while freeing up valuable time for all involved:

1. Draft internal meeting policies and school your staff on them. Request that the meeting moderator speak for only 25% of the meeting and that all participants contribute, with no one person dominating or withdrawing entirely. All input should be succinct and relevant, with the moderator cutting off tangents and meandering conversations. Most importantly, every meeting must result in an outcome.
2. Make sure the right people – and ONLY the right people – are invited to attend. Too many meeting owners invite every person peripherally attached to a project, when many of them aren’t necessary for brainstorming a marketing plan or developing a launch timeline.
3. Always have a written agenda and be realistic about what you can accomplish in one meeting. If you’ve scheduled a one-hour meeting, don’t list every issue you can possibly think of. Most of them won’t get addressed, which creates a feeling of futility. List only your top agenda items and try to resolve the minor stuff one-on-one.
4. For all-day or multi-day meetings, assign a fact-checker who tracks down answers in real time to the questions that arise during the discussion. Being able to resolve those questions during the meeting eliminates follow-up action items and advances the conversation while everyone is present.
5. Schedule Q&A or “sidebar” time at the end of all meetings. This ensures the discussion stays on track, while allowing people to express any related thoughts that arose during the meeting.
6. Follow up even minor meetings with a summary and list of action items including the names of the accountable individuals and due dates. Then follow up on the action items.
7. Schedule downtime between meetings, so you have a few minutes to check your voicemail and recharge. It’s hard to stay attentive and engaged when back-to-back meetings blur into each other without a break.
8. Ask that your staff follow virtual meeting etiquette. Meeting remotely can make scheduling easier and eliminate travel expenses, but communicating clearly requires certain skills. Ask that all participants introduce themselves at the start of each meeting and that each speaker identify themselves when speaking.
9. Also make sure your staff understands how to use web conferencing technology. Given the video and netmeeting tools available today, there’s no reason to fumble through conference calls where everyone has to page through reports on their own. And too many meetings waste time trying to resolve technical issues.
10. Finally, consider scheduling a “no meeting” day each week. It’s rarely productive to dive into projects in the 30 minute increments between meetings; usually the wheels are just starting to crank in your head when it’s time to shut your laptop and move on. But designating an entire day as meeting-free can allow everyone to immerse themselves in work for blissfully uninterrupted hours. Conversely, if you have telecommuters, consider designating an “office meeting day” when everyone comes in for face-to-face time.

Ultimately, the key to both productive meetings and productive work time is respect. By respecting the time and input of your partners, staff, clients, and customers, you will conduct efficient meetings that deliver high-value outcomes – while freeing up more time for other pursuits.