Two small business experts answer give our readers advice.
You may already be familiar with Robert Herjavec from the hit television show "Shark Tank," where he hears pitches from entrepreneurs looking for investors. For his latest project, Harjavec teams up with Amanda Brinkman, vice president and chief brand and communications officer at Deluxe, for "Small Business Revolution." Each season one small town wins a $500,000 investment to invest in revitalizing its business community from Deluxe and coaching from Brinkman and Herjavec. This season, Herjavec, Brinkman and their team worked with small business owners in Bristol Borough, Pennsylvania. We recently asked Business.com readers to help us interview Herjavec and Brinkman. Below are their questions and ours.
Q: Where can you find investors?
Robert: Well, I think it depends on the size of your company [and] where you are going. Most small businesses start with an angel round, which is just a fancy word that means friends and family invest in your business. After that, there are investor groups, lots of venture capital banks and so on. It just depends on where you are in the life cycle of your business.
Q: How do you know how much to pay yourself, and how much to reinvest back into the company?
Amanda: It depends on where you are at from a profitability perspective. A lot of people, when they start their businesses, feel they will be drawing a paycheck right away, which is often times not the case. You want the goal to be to pay yourself.
It's great to run a business you are passionate about, but at the end of the day, it's a business, and it needs to pay you. So, I think it depends on the size of your business. You need to work that in when you are figuring out how much you need to charge and how much you need to make as a business. You have to think about how much you want to be drawing from a salary perspective.
Robert: The last person to get paid in a business is the owner.
Q: What should entrepreneurs learn from this season of "Small Business Revolution?"
Amanda: Business owners will see themselves in these episodes. You know, the businesses that we worked with – they were struggling with their numbers, maybe operations, trying to figure out how to grow their marketing.
Some of the biggest lessons will be taking some of those tips. How to think about your numbers. How to make sure you are incorporating your website. Making sure you are findable online, that you have a consistent brand. [Small business owners] will not only be educated by the series but inspired. It's a little affirming to see other business owners struggling at the same things that you might be.
Q: How do you know if a business idea is worthpursuing?
Robert: I think it depends. Every idea is good, but it depends if you can execute and take it to market, who your customers are, all those kinds of things.
Q: What can small businesses do to promote brand loyalty?
Amanda: First, they need to think about the customer experience end to end. So, it's not just about having a great website or making sure you are on social [media]. It's about how you answer the phone. If you are brick and mortar, what is the business like in your store? What does your packaging look like? It's really about that consistency.
Your brand is really your opportunity to tell people how you are different, why they should buy from you and what the experience will be like. For business owners, it's really about finding a brand that is unique and honorable to you and then being consistent about it.
Q: What advice did you give to the small business owners in this season's winning town?
Robert: The commonality is that many small businesses don't really understand their numbers, and they struggle with what their brand is. They think there is a difference between their brand in the local community and on a global scale.
Amanda and her team did a really great job of going in and fixing the brand, and the level of consistency. Not only from how they answer the phone but to their letterhead, their logo, their color.
People need to know what your business does before they walk into the door. On the flip side, we also worked a lot with them in terms of their numbers and understanding what is important to them.
Q: How do you take a business from the startup stage to the growth stage?
Robert: It depends on how you define a startup. Every small business is always going through spurts of growth, spurts of decline and spurts of startup. The challenge of running a small business is it never ends.
A business is like a child – you can't leave it alone in the corner. When it needs to eat, it needs to eat. I think it's challenging because it is all-encompassing.
Q: What should small businesses convey to potential investors?
Robert: You need to tell people about your business, what it is, what it does and what the value is. When you bring a new investor in, they need to know how they are going to make their money back and how they benefit.