How to forecast success without looking like you've smoked something. AMA!

Karl Llewellyn
Jun 13, 2018

I started my first business in 1988. sold it in 1992.  since then I've had five more,  2 trade sales, 2 closures and I'm still working my fifth and best -

So, how do start-ups impress potential investors with their sales potential, without creating the hockey stick and looking like they are on speed?

  • 'But if I just get 1% of a billion $$ market  that's €10m..thats doable ..right??'
  • Is it ok to lose money and for how long?
  • When cash is king, what do I buy  ( when I need so much!!)
  • How do I price my product and why not 'cost+'?

I'm not an accountant! My opinion is only about how to frame your numbers,  from the many mistakes I've made...And stuff like that...

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What makes a successful marketing strategy? What are the principles to start?
Jun 17, 7:27PM EDT0

what makes it is quantifiable results.  what principles - same,  be able to quantify your outputs ( sales/leads)  from your inputs  ( effort/money).  I always believe in a strong brand, socially active leadership and inbound marketing give the best early returns.

Jun 18, 11:35AM EDT0
How can one improve customer service in one's business?
Jun 17, 5:32AM EDT0

couple of early wins for a start-up:

round robin the contacts  ( ie everyone answers the phone,  so we all talk to customers and get the insight)

empower customer service to make decisions - refund, discount etc..

admit failings to customers and ask them to work with you to improve.

record everything in a central crm  ( most are free to start)

Jun 18, 11:38AM EDT0
If you had the chance to start your career over again, what would you do differently?
Jun 16, 5:51PM EDT0

hindsight is 20/20 :)  lots we can change, but the experience is the true skill that grows every year. One bit of advice I  give myself and share: Start-ups nearly always take longer to gain any meaningful momentum, spend as little as possible and do anything to get the first big client.  The IDEAL  scenario is always getting the client to buy off the plans  NOT the prototype :)  or worst! - the shelf!

Jun 18, 11:45AM EDT0
What are some tips to building a successful customer base?
Jun 16, 7:08AM EDT0
Why is a business plan important when launching a business and who should write it?
Jun 15, 6:40AM EDT0

its your playbook.  if you hav'nt thought out at least a couple of plays ahead, how are you going to know where you are going and how you are going to get there?  AND as you grow, if you can't hand this playbook to others, you'll end up with a group of free radicals and not a team.  I think get lots of input (contributors) to the plan, with one editor - that way, everyone is signing up to it.  ( BTW - don't over think it in the beginning)

Jun 18, 12:05PM EDT0
What factors were decisive into the closure of two of your businesses? What did you learn from those experiences?
Jun 13, 11:05PM EDT0

1 - Ran out of cash  when we needed to pivot from the original business plan...lesson - cash is king and know your cash runway

2 - an idea too soon  ( specialist homeworking recruitment in 2002)...'be the pilgrim, never the pioneer' 

Jun 14, 9:39AM EDT0
What is the average expected net revenue for a small business? How do you make those calculations?
Jun 13, 3:25PM EDT0

Net being after all costs, including saying you a small but fair salary? i'd say - or0%  for 1-3 years growing to X% yrs 4-5 and maybe low teens % after that if you stabilise the overhead.  Thats not going to attract an investor  -but you did say small business.

Jun 14, 9:37AM EDT0
What's the biggest challenge of building a sales team at a new startup?
Jun 13, 2:16PM EDT0

Hiring quality talent away from security.

There is a lot of sh*t outthere.  I'm a sales guy so I can say this:  we're inherently greedy and lie, particularly about our own ability. couple of tips:

If you are not a sales guy,  get a friend who is,  to hire/recruit test for you. secondly,  get someone who is passionate about using your product, not just selling it. and finally agree 100-day goals - if they're not hit - need a good reason not to end it.

Build on strong principles and practices  ( we get rules, goals and sidelines) and your team will culture correctly.  Finally,  hire good sales guys first, good sales manager much later.

Jun 14, 9:33AM EDT0
What are the best ways for a small business to obtain start-up capital?
Jun 13, 10:30AM EDT0


I think as answered below - friends, fans and family. write a tight teaser  ( as in NOT the full plan, keep that until qualified interest) pitch and do a one minute video and share everywhere. see what pingbacks you get.  Big mistake I've made in the past is not asking everyone that if they thought the idea was good, would they like in on the journey.  once again, crowdfunding or Converting loan notes make this easier. 

Jun 13, 10:37AM EDT0

Hi !

a popular question  - answered a couple of times below - hope that helps

Jun 14, 9:25AM EDT0
What are the usual mistakes new business owners make? How can you prevent yourself from making them?
Jun 13, 10:12AM EDT0

We are all guilty of being delusional. Being an entrepreneur  requires stubborn determination, but you have got to seek out and really listen to feedback - if someone cares enough to tell you why it doesn't 'work' for them..listen  HARD - its sometimes the best advice you'll get on your marketing or offering

Jun 13, 10:41AM EDT0
What are the key factors that provoke some businesses to fail?
Jun 13, 8:21AM EDT0

Pretty much always running out of cash. I mean - the way you goto market and the product 1.0  will need changing, maybe a major pivot,  but there is nearly always something good and commercial there..its just do you have the cash runway to see it through?

Jun 13, 9:11AM EDT0
How can one determine what business model to choose for their startup?
Jun 13, 5:11AM EDT0

To broad a question for a quick answer.  But always worth researching the competition (best in class in your industry or another) and copy them...'the airbnb  for millionaires'  the 'the ben&jerrys for weightlifters'

Jun 13, 6:32AM EDT0
What are some of the things that can never be said to a potential investor?
Jun 13, 1:09AM EDT0

great question...investors want you to be passionate,  but they don't care about your sacrifice or your family..don't get moany about all the sacrifice you and your family have made to get you this far.  also, they want their money back with lots of upsides - so you'll need to prove your willing to sell when the time is right

Jun 13, 6:10AM EDT0
Why do you consider Sanctifly to be your best business yet?
Jun 13, 12:47AM EDT0

Becuase it can scale without investment in asset or capex.  In the world of Airbnb and uber, Sanctifly has become the worlds largest airport gym and wellness network without owning a single bar-bell.  Plus its kinda good thing- promoting travel wellness

Jun 13, 6:12AM EDT0
How do you get an investor to take a chance on a risky business?
Jun 13, 12:01AM EDT0

If you find out, let me know!  seed and early round is risk money - that's really friends, fans and family who believe in you first, idea second. Really its for emotionally involved investors.  Seek 'em out and sell the dream - crowdfunding is great for this.

Jun 13, 6:15AM EDT0
What are the best ways to do market research for a new business idea in 2018?
Jun 12, 11:56PM EDT0

I'm a huge fan of writing up the persona  you belive will want the product  ( gender, age, income, role,  everything!)  find a few and go interview them. face to face.  they will meet you - people are always happy to give their opinion, help and guidence to a pre product start-up.

IMPORTANT - ask them how much they would pay for the product and how they would pay for it? and what they might give up to buy yours instead?  That your playbook.

Jun 13, 6:28AM EDT0
What has been your biggest failure in business and how did you turn it around?
Jun 12, 10:18PM EDT0

I co-founded Luckebox in 2010. an employee incentive company where the reward as genrally a themed 'surpise'  from a TV to a USB stick.  Fun, engaging and tax efficient.  After early wins with great clients in bombed, in a poor economy people just wanted cash and certainty - so the timing was off.  also, I made the critical mistake of buying stock before we had customers - 60% of it want to the liquidator in 2012.

So  did'nt turn it around,  but knew when to quit

Jun 13, 6:19AM EDT1
How has your approach to start up new companies developed from the time you created your first business to your fifth?
Jun 12, 9:32PM EDT0

Definatly,  starting a business in your 20s is hugely different to yoru 40s,  the risk now is much great - you can afford to learn less on the fly, do fewer pivots.  But I still get too passionate about my own ideas.  A  went to a good friend when at a junction on the current business looking for advise and he said - Karl your the best guy to give you direction on that,  try and step out of the emotional attachment for a minute and coldly, what would you advise your self to do?  I  now try and do that once a month, particularly when assessing my own work rate and performance.

Jun 13, 6:24AM EDT0
What are the elements that must be present in a pitch to an investor?
Jun 12, 12:11PM EDT0

pretty standard:

problem, solution, market, cost, return.

couple of points:

Make sure the problem has the budget and is a real need  ( ie be the drug not the vitamin).

There is always competition (for budget), find the dominant research the and explain are you going to eat their mkt or create new.  Eating theirs is sometimes more interesting as its much easier to identify.

investors always want their money back, 3-5 yrs..know how that is going to happen, exactly.

Jun 12, 1:12PM EDT0
In your opinion, what is the most affordable and most effective marketing technique a startup can use to increase their sales revenue?
Jun 12, 1:17AM EDT0

increase revenue or volumes? I'd always try and get more customers before more revenue. the best way, I've found is to bundle with an existing non competing brand to the same market.  in the bundle, you get to defend your price point whilst getting maximum exposure. Think laterally here!  I've bundled leisure with insurance :)

Jun 12, 1:07PM EDT0
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