All Articles Tagged "startups"
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Are you starting up a
If you are looking to invest in a new company or start one yourself, you’ll want to consider some of the startup industries where consumers are spending money.
Intuit recently released its Consumer Spending Index, which measures spending habits from January 2009 to April 2013 and shows consumer spending is up nine percent from four years ago, and significantly so in certain sectors, reports Inc.
Among the hot sectors prime for a startup are:
Gourmet Food and Restaurants
The report found that grocery spending is up by 17 percent, partly because of the cost of premium groceries. Spending at “general grocers” is down by three percent. Breaking it down further, there are certain regions where a food industry startup might work best. Californians prefer to buy food at more expensive grocers, such as Whole Foods Market, for instance. And more people are eating out. According to the Index, restaurant spending is up 11 percent. But consider this before going into the restaurant business–eating out is the first thing people eliminate when they want to save money.
According to Inc., spending on healthcare has skyrocketed by an average of more than 30 percent. The Intuit report found that people between 41 and 55 years old spend more than $300 a month on healthcare, but younger people are actually the ones with the biggest increase in health-related costs. In fact, people between the ages of 26 and 31 now pay an average of $252 a month on healthcare, an increase of more than 40 percent since 2009.
There are all kinds of healthcare startup possibilities, such as New York-based Audicus, an online seller of affordable hearing aids that range from $299 to $699. Normally, hearing aids can run into the thousands. The company launched 10 months ago and claims it has saved customers more than $1.5 million and grown to a run rate of more than $1 million a year.
Business for Men V. Women
As we recently reported, men are bigger consumers than women. Men spend on things like alcohol, entertainment, eating out, and gas. But women outspend men by 21 percent when it comes to spending on clothes and apparel. So if you are going for a gender-specific startup consider these numbers. “If you want access to the dollars females are spending, video is a great medium in which to invest. Compared to men, U.S. women watch more video and spend more time online, representing the majority of visitors to career, shopping, and social media sites,” explains Inc.
Women operate 30 percent of all businesses in the United States. Yet, of the businesses with annual incomes of $1 million-plus, only 1.8 percent of those are women-run. But as Julia Pimsleur, founder of the Double Digit Academy, writes in Forbes, this trend might begin to reverse as more and more female entrepreneurs are participating in accelerators, incubators, and in workshops such as the Double Digit Academy. Such workshops train attendees to deliver better pitches and attract capital to launch or boost their businesses. These groups have already helped women increase their businesses. According to a American Express OPEN study of women CEOs, the number of women-run businesses with $10 million in annual revenue has already gone up by over 50 percent in the last decade.
But while women are starting businesses at 2:1 ratio compared to men, some small business experts wonder if they will survive past the five-year or 10-year mark. “This depends in part on their ability to raise funds and to take their companies to the next level,” writes Pimsleur. According to Pimsleur, among the biggest obstacles women feel they face in starting new businesses include:
1) A fear of going all in. Women, according to studies are more risk-averse than men. But in the world of entrepreneurship you have to be willing to take chances.
2) Getting start-up money. It is just a fact, that women hare a harder time at attracting investors for their businesses. “Only about 20% of angel investment is made in women-run businesses and 4% of venture capital,” notes Pimsleur. On top of this, women are more reluctant to ask for money.
5) Inability to be confident in their pitches. According to Pimsleur, she tells women who attend her Academy that when they are presenting to investors to “channel your inner Oprah.”
To get you started, do a quick search on MadameNoire Business for “accelerators” and “incubators” to learn about some of the news and organizations in this are, particularly those focused on women and minorities. Also, take a look at AngelList, a site that has all sorts of information for and about startups.
A new crowdfunding site, currently in beta, is focusing on getting funding and capital for African-American entrepreneurs. BlackStartup.com was started by a group of Morehouse College alumni, all Omega Psi Phi fraternity brothers, and is accepting applications from companies and organizations founded by African Americans.
The companies will use the site as a crowdfunding platform, and BlackStartup.com also has resources and a blog to support business owners. CEO Nate Bennett Fleming, who is an adjunct professor of law at the University of the District of Columbia’s School of Law, researched crowdfunding and African-American business, determining that while African Americans have a lot of business ideas, they often lack the access to capital to get the ideas off the ground.
“I wanted to create a solution to address that problem,” he said. “At this point, we do the crowdfunding and address increasing access to capital and as we expand, we’ll create partnerships with on-ground organizations that look to encouraging entrepreneurship and support entrepreneurs to help with mentoring.”
So far, the for-profit BlackStartup.com has received more than 10 applications over the past couple weeks from businesses ranging from technology companies to nonprofits to artistic endeavors.
NewME Accelerator (short for New Media Entrepreneurship) started in 2011 as a 12-week program for startups founded by minority entrepreneurs. Each session, eight startups participate in the program, where they work on their business, network with others in the technology industry, and eventually demo their company for investors and others in the startup community.
Since its inception, 25 companies have “graduated,” with seven more in the Spring 2013 class. Here are 10 of these graduates that have gone on to receive media attention and funding. Learn more about these companies, and what is getting attention from the investment world.
Every once in a while you get a great business idea, one that you are absolutely sure would fly. But you don’t take action. There are a few easy steps to take to turn an idea into a business; nine steps, to be exact, according to Stephen Key, the author of One Simple Idea for Startups and Entrepreneurs.
Inc.com sums up his suggestions:
1. Test quick, test often. “The real test is whether people will reach in their pockets and pull out dollar bills,” Key says.
2. Understand the market. Where your product fits, how it’s different from other products, and whether you can sell at the right price point in that category.
3. Determine the manufacturing cost. Contact manufacturers, send over specs, find out if it can be made and the cost of making it. To protect your idea, have manufacturers sign an NDA or file a provisional patent.
4. Determine your margin. Your profit margin must allow you to compete day in and day out. If it won’t, move on to another idea.
5. Get real feedback. Talk with local retailers and go to regional trade shows.
6. Test before you go into full production. Set up a webpage showing your product, complete with a video. Share it on social media.
7. Then do the math again. Once you understand your manufacturing costs you can put all the pieces together and decide if you really want to take your shot.
8. Start small. Sell one. Then sell two. Start small, learn about your product, see how it looks at retail, determine changes you should make to packaging and marketing.
8. Keep trying.
9. Remember nothing is forever. One product will not build a business. One product is a start.
Not to overwhelm, but Madame Noire has a few more steps to add.
- A business plan is a must. Most experts say that a business plan only increases your odds at success. It gives you a written blueprint, not only for your self but for potential investors and employees as well.
- Immerse yourself in the industry. Network with people in the industry you are about to enter. You will gain valuable insight on the business climate and make key contacts.
- Know when to stop. Some ideas are not great business ideas. If you get poor results during your market test, either redesign your product/service or realize that there is not a market for it.
- Check out the competition. Find out what they are doing right, and what they are doing wrong. Use this data when prepping your own business.
- Surround yourself with the right people. Organize a group of people who believe in your idea and who can help get it off the ground. Having a support system is a must.
You want to convince people to invest in your new business idea. Having a great business plan is a must, but it also takes a great pitch to reel in startup money.
According to The New York Times, some of the elements you need for a great pitch are:
- Delivering concrete figures, numbers and statistics add scale or a benchmark to your opportunities and accomplishments. “Saying that I have raised a lot of capital for companies does not have nearly the impact of stating that I have raised more than a billion dollars,” says the article.
- You are the face of your company. So when you pitch you should be confident about what you want and what you can do.
- Don’t get too complicated. Simple is better. “The more complicated the business opportunity, the more challenging it is to understand and to execute,” states The Times.
- Don’t make the business opportunity sound risky. Explain how you are making money. “Be clear on the business and revenue model,” according to the newspaper.
We agree with all of these but had a few tips of our own:
- Get creative. Potential investors get pitched all the time. Do something different to stand out — nothing extreme but it shouldn’t be the same old, same old. We’ve heard of someone who wanted to get people to invest money in a community music program she was launching. For her pitch, she brought along one of her prospective students to play a classical piece on the violin before and after her pitch to investors in their corporate office.
- Make investors feel confident in your abilities. Now is the time to brag a little about your past achievements. But don’t overdo it; you don’t want to come off as a braggart.
- Dress for success. To be taken seriously, you need to look serious.
- Be friendly. Yes, it is all about business. But set a friendly tone to your pitch. You want the listeners to connect with you. The more they connect, the more they want to believe in your goals and help you achieve them.
- Put your passion on display. Be enthusiastic in your pitch. Show that you are going to give it your all to make this idea a success because you fully believe in your business model.
-The Huffington Post takes a closer look at the deflating situation homeowners in foreclosure find themselves in. Back in February, the Obama administration and the nation’s five largest banks reached a $25 billion settlement to resolve “complaints of unlawful foreclosure practices.” Many say things haven’t changed despite the coming October deadline.
-Mitt Romney and President Obama are appealing to women and the working class during their latest campaign stops. Romney attacked President Obama’s record on welfare.
-Feel like you’re working harder? The Labor Department says worker productivity was up 1.6 percent. That’s a modest figure, but if this keeps up, companies might have to hire. This is a bit of good news following the poor outlook of Monday’s jobs report.
-In Olympics news, Aly Raisman walked away with two more medals, a bronze on the balance beam and a gold medal on the floor exercise, making her the first American to win that individual competition. Gabby Douglas competed on the balance beam, but didn’t medal. Ever gracious, she said, “If it wasn’t my time to shine, it wasn’t my time to shine… I wanted to finish off on a good note. Event finals is something a little extra.” Love her.
Australia’s Sally Pearson beat out her American competitors to take the gold medal in the 100-meter hurdles. Dawn Harper and Kellie Wells, both from the U.S., took silver and bronze respectively. Lolo Jones didn’t medal again, prompting these very sad comments. And now this. Ugh. Allyson Felix competes in the 200-meter race today.
-USA Today offers tips to avoid purchasing a used car that’s been in a wreck.
More on Madame Noire Business!
- The Number of Black-Owned Businesses, and the Need for Resources, Is Growing
- Are You Pinning? Pintrest for Individuals, Small Businesses, and Big Brands
- Sticker Shock! Five Tips to Help You Pay for College
- Are Black Businesses Suffering From an Undeserved Rep for Bad Customer Service?
- How to Tackle Office Enemies
- Small Business Spotlight: Sweet Treats You Don’t Have to Feel Guilty About
A quick thanks to @SFDireWolf for bringing this to our attention: NewMe Accelerator, a startup incubator program that aims to increase diversity in the tech industry, has launched a 12-week boot camp that will offer mentorship, chances to network and educational opportunities. The goal is to fine-tune a startup idea and present it to prospective investors.
The NewMe boot camp (NewMe stands for “New Media Entrepreneurship”) started in 2010 and takes place twice per year in Silicon Valley. The program seeks to improve diversity among groups that are largely left out of the tech landscape, specifically, founders who are women, African American and Latino.
NPR has an in-depth profile of the boot camp project, stating, “One reason Silicon Valley is so homogenous is what’s called the pipeline issue. There just aren’t a lot of women, blacks and Latinos enrolling in science and engineering programs.” One of NewMe’s former students also says there’s an unspoken bias against these groups. In addition, quotes in the story indicate that there’s a belief among these young entrepreneurs that there isn’t a place for minorities in the tech business.
(Wall Street Journal) — It’s been eight months since Startup America was announced, but a major part of the initiative has only recently taken off. The initiative is made up of a series of public-private programs designed to spur small-business growth. The two operations of Startup America have different missions to accomplish the same goal – boost entrepreneurship and job creation. On the private side, a number of initiatives have rolled out over several months including classroom and mentorship programs provided by nonprofits and corporations. But the principal agenda for entrepreneurs, called the Startup America Partnership, launched only this month. It is now allowing entrepreneurs to apply for free or discounted products and resources such as Google Adwords, Intuit payroll services and Salesforce technology. Collectively, there are more than 25 partners who have pledged $730 million worth of in-kind resources to help small firms grow.