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Dear Athol Haas,
Welcome
to the CBAN Newsletter for February 2010.
This month we have several
new ideas looking for funding ranging from specialist recruitment, vehicle
repair and maintenance, software development and commercial land purchasing
right the way through to hospital/medical wear and renewable energy! All of
these businesses are expected to have completed their full business plan
and cash flows within the next two to three weeks and they will then be
circulated around our investor members. If any of them sound interesting to
you now, please email us and register your
interest.
The
early bird often grabs the best deals!
Angels sign in record numbers!
 January
2010 was a record month for CBAN with 73 new Angels joining the
network. They include several very well known Angel syndicates and Venture
Capital firms as well as many private high net worth individuals. The Angel
numbers are always growing as more and more people learn about and sign up
to the advantages and opportunities that CBAN brings to their portfolios.
If you have not yet signed
up to the network and are interested in investing in existing or start-up
ventures, please visit the site www.cban.co.uk and click "register" to sign up with no cost,
no obligation and absolute discretion assured.
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What's new for February?
We have signed up a variety
of business ideas this month and these will be distributed around investor
members towards the end of the each month as usual. The opportunities so
far this month come from sectors as varied as specialist recruitment,
construction, environmental consultancy and mobile telephone software
application design.
If
you are looking for funding, it is important to
understand that CBAN is a service designed to put your idea into a
professional and presentable format and to distribute that plan amongst
suitable investors. We are not here to comment or advise and every
opportunity is treated with equal zeal.
Please contact us for more
information.
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Common start-up pitfalls
When
an enterprise is ready to be launched, it makes a lot of sense to take a
little time to look at things from the customers viewpoint in order to
enhance the ventures chances of success. It can be hard for a manufacturer
to step into the customers shoes, and involvement in technical and
logistical details may blur the most important factor in running a business customer satisfaction. Let us look at the common mistakes made by
start-up companies, and see how best they can be rectified or avoided.
These mistakes all have one
thing in common the customer is not the focus in such cases. The primary
objective of sales material is to engage the customer at the first level of
interest, and this interest should be followed up appropriately. But in
order to get the prospective customers attention in the first place, you
should avoid making the mistakes discussed below.
Website that waxes eloquent
about the companys achievements rather than offering customer focused
information
A website that blows its own trumpet without giving the customer or
prospect the information being sought, defeats its own purpose. While
details of the teams hard work or the managers brilliance may be riveting
to those within the company, such information is of little or no use to the
customer and can actually put him or her off.
How
do you avoid this mistake? When you are constructing
your website, you need to make a conscious effort to put yourself in your
customers shoes. Think about what he or she is looking for, think about
what would be the keywords used when a prospect is using a search engine,
and how best to ensure that your company shows up high on the list of
results. And if a customer does visit your website, it is essential that he
or she finds what is needed in the first few seconds of landing there.
Fancy graphics, an animated logo and a home page that uses a lot of words
to say very little may please the CEO of the company, but they are not what
the customer is looking for. The website needs to provide the details the customer
really wants as quickly and simply as possible further information can be
provided at a later stage. Make sure that your website is customer-centric
rather than ego-centric.
Online
and print sales material that over-emphasise technical and engineering
aspects
A potential customer needs to know what the start-up company is offering.
Sales material should be presented in such a way that the customer gets a
clear picture of what he or she will get. Benefits should be presented
up-front, and technical details can be minimised. Complicated engineering
aspects may not be the information the customer is looking for at all, and
boasting about these areas rather than showcasing benefits will have a
negative or neutral effect.
The idea of the product has
to be sold effectively on the website, and this is not done by overloading
the prospect with technical information that does not directly affect his
or her buying decision.
Passive
selling
While a product or service may be showcased well on a website, this is not
enough for effective selling. Customers need to be led to the point of
purchase.
Active selling is necessary; a product may be innovative, useful and
reasonably priced, but unless marketing efforts are planned and a well
thought out marketing strategy implemented, the product is unlikely to
succeed. Its not enough to merely offer a description of the product or
service and then sit back and expect the world to beat a path to your door.
You have to draw your prospect in, and convent prospects into sales by
active selling processes.
Over-generalisation
of the product
This mistake is frequently made by entrepreneurs who believe that it is
better not to be too specific about a product to keep as many customers as
possible interested, but this could have the opposite of the desired
result.
In the efforts to avoid
risk of missing out on some customers, the product is described so vaguely
that the real prospects are left cold. It is very important to identify
your target audience, understand your most likely customer thoroughly, and
direct marketing efforts, product descriptions, advertising and so on to a
specific group of people who are likely to buy. This will be much more
effective than trying to spread your efforts over too large a market, and
then failing to get a good market share.
Information
overload
Often, too many details about the product are force-fed to the prospect at
a single time. Sales material should tantalise as well as attract, and too
much information can cause a loss of interest.
In this context, ideally,
it is important to focus on a specific area that will be projected to
potential customers through sales and advertising material. Since the
primary objective here is getting the customer interested in the product or
service, a brochure, for instance, should tell the reader just enough to
pique his interest and make him want to learn more. There should be a call
to action included, with details on how the prospective customer can get
more information, or meet with sales personnel. Once the customer evinces
interest, it is the sales forces job to convert that interest into a
purchase.
At different stages, different kinds of sales material and marketing may be
used. One medium could be used to attract new customers, while a regular
customer could be rewarded for loyalty in another medium. A comprehensive,
effective marketing plan will be one with material that tells the customer
what he or she wants to hear at his or her stage of engagement in the sales
process. Thus, a new prospect should be given a concise introduction to the
product, someone who has asked for further information could be given
information about the company and the edge the product has over
competition. So marketing needs to be attended to diligently and strategies
evolved by an expert in the field.
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Intellectual Property - the do's and
don'ts
During
the due diligence process, a lot of enterprises makes certain errors with
regard to their intellectual property. These mistakes can have long-term
effects on the value of the company, yet a little thought can easily avoid
them. Here are the ten most common intellectual property rights errors
here we discuss how and why these pitfalls should be avoided.
Leaving
patent applications too late
There are certain rules that apply to patent applications, and
non-compliance with these rules could mean that a company loses out on the
advantages offered by protecting intellectual property. It is best to make
patents applications as soon as possible, so that there is no chance of
missing out.
Excessively
narrow claims
Many entrepreneurs make the mistake of making patent claims that are
insufficiently broad in their scope. Such narrow definitions for patent
claims mean that a rival enterprise can easily circumvent the patent
claims, and exploit the invention or innovation for its own ends. It is not
easy to decide on the scope a claim should encompass, but it is important
to include as wide a definition as possible.
Wilful
infringement
Wilful patent infringement will be punished, and enterprises infringing on
another ventures patent will have to pay heavy fines. So steps should be
taken to ensure that neither accidental nor deliberate patent infringement
takes place.
Protecting
software only with copyrights
Copyrights are not very expensive, and safeguarding intellectual property
with the use of copyrights is quite common. But while this is effective for
certain kinds of work, reverse engineering on some material can help a
competitor understand it thoroughly, and use it to his or her own
advantage. In such cases, it is better to protect intellectual property
with a patent as well as a copyright.
Unspecified
ownership of intellectual property
Sometimes the intellectual property of an enterprise is jointly owned by
several parties employees, consultants, customers and vendors may all
have contributed to a particular innovation. So it is important to clearly
identify the ownership of any intellectual property so that problems that
competition could take advantage of do not arise later.
Failing
to take legal implications into account
If the legal implications are not taken into account, especially with
regard to amended claims and scope of patents, various problems can arise.
The doctrine of equivalence should be understood clearly in this context.
Failing
to emphasise the significance of confidentiality
Trade secrets and confidential information that the employees of an
enterprise are privy to should be carefully safeguarded while, for
instance, patents are pending. Non-disclosure agreements with employees
will be useful in this regard. A failure to attend to this aspect of
intellectual property protection could cost an enterprise dearly.
Neglecting
to exploit the benefits of tax shelters
A new enterprise should not omit to use offshore strategies that will cut
down on tax payments. When you want to protect your intellectual property
rights at a global level, you will find that global tax strategies, wisely
applied, will make things easier as far as taxes are concerned.
Slow
response to notifications from patent authorities
To avoid delays, act quickly when required by the patent authorities in
your area. See that legal requirements are met promptly, especially if
there are claims against your patent.
Cost
cutting on legal expenses
With the aim of saving money, some enterprises hire patent professionals
based on the low fees they charge, but this could prove unwise in the long
run. It is essential to hire professionals who are highly competent as well
as experienced, and it is worth paying the higher fees that skilled patent
lawyers charge.
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What are Angels really looking for?
If you want to encourage
investors to put money into your business, understanding the mindset of an
angel investor can be invaluable. Investors can help take a business
forward by leaps an bounds and knowing what they are looking for will help
you get your venture the capital it needs.
The
most important things an angel investor will want to know are:
·
Details
about product or service
·
Details
about prospective customer
·
Benefits
of the product to the customer
·
When
your product is expected to be available for sale in the market
·
Pricing
and methods of payment
·
Likelihood
of repeat customers for your product or service
·
Profit
expected with a time frame
·
Details
about competition
With regard to the
capital to be invested, an angel investor will need to know:
·
Expected
development costs
·
Expected
revenue over the next few years
·
Expected
expenditure over the next few years
·
Projected
sales over the next few years
·
Whether
you as the entrepreneur have invested, or plan to invest capital in the
venture
An investor will
also want:
·
Proof
of customer satisfaction with the product
·
Evidence
that you have the investors interest at heart, in addition to your own
·
Proof
of your skills, leadership abilities and competence
·
A
picture of the positioning of your business in the market in relation to
other companies in the same field
·
An
idea of how you plan to benefit from a market that has been developed by
competitors
Investors are likely
to be deterred from putting money into your business if:
·
You
dont have the necessary qualifications or experience
·
High
levels of complex, advanced technologies are involved routinely in your
venture
·
You
paint too rosy a picture of your ventures future
·
You
are not objective and practical while assessing relevant facts
·
You
have not invested any money yourself
Generally speaking, angel investors prefer to be involved to at least some
extent in the businesses in which they have invested. So the trend is for
angel investors to get into start up ventures or small businesses, where
their skills and experience in business will be useful in taking such an
enterprise ahead.
Look for those who are
successful, experienced, and who are willing to wait till your venture is
ready to offer returns. You also need ensure that your investors have easy
access to the capital they are offering. You should not have to pester your
investor for money it is both time-consuming and counter-productive.
Remember not to agree to accept a smaller amount of money than what is
actually required, and ensure that communication channels between you and
the investor are always clear.
Consider
the following facts of angel investing:
·
Regular
angel investors usually consider only three of the approximately hundred
business investment opportunities they are offered in a year
·
85%
of business plans are badly presented
·
50%
of entrepreneurs do not have the ability to run a business well
Remember not to neglect areas such as banking, vendors, the community your
enterprise belongs to, and corporate social responsibility. All these will
have an effect on your potential investors decision.
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are advocates of social networking and the benefits it can bring to a
business. If you use Facebook and/or Twitter, please click the links below
and join our groups. We hope that you find our discussion threads and
contact lists to be of interest.
For
Facebook click HERE
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Twitter click HERE
Thank you for taking the
time to read our newsletter and to support CBAN. It's appreciated and we
hope that it proves to be beneficial.
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