Small Business | money news blog

19 07 2008

LinkedIn launches self-service, targeted advertising

Posted by: in Small Business

Filed under: Marketing and advertising, Small business

From some of the companies I’ve talked to, the results from advertising on LinkedIn have been fairly strong. Then again, the website is the largest and fastest growing professional network, making it much easier for targeting.

Well, LinkedIn is improving things even more. That’s, the company has launched LinkedIn DirectAds. As the name implies, this is a self-service system.

Of course, this may not be the best option for major advertisers that need sophisticated campaigns. But, for small companies, this solution can be ideal (hey, just look at the success of Google AdWords).

And the targeting for DirectAds is highly granular. For example, you can choose a myriad of industry categories, such as CPAs, graphic designers, and so on. Or, perhaps you want to focus on sales executives or CEOs? Keep in mind that LinkedIn has 20 million registered users (with extensive profile information on each).

Getting started is simple. The process takes a few minutes and the minimum fee is $25.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar On the web Guide to Decoding Financial Statements. He also operates MergerBook.com.

17 07 2008

Entrepreneur’s Journal: Pitching the media

Posted by: in Small Business

Filed under: Google (GOOG), salesforce.com inc (CRM), Small business

Every day, I get a variety of media pitches from companies and PR folks. No doubt, I try to evaluate all of them.

The problem: some of the pitches don’t work. As a result, a company might miss an opportunity to get some exposure.

However, there are some strategies to improve things. So, let’s take a look:

Know the journalist: Most of us focus on certain topics (or have a so-called beat). Thus, read some of a journalist’s work. If he or she doesn’t cover your industry or market focus, then it’s probably a waste of time to make a pitch.

Now, for those who are a right fit: put the journalist’s name in a notebook or a database (there are free on the web offerings, such as Zoho). You might also look at other publications the journalist writes for. Oh, and it’s a good idea to keep reading the journalist’s work. To this end, you might set a filter with something like Google (NASDAQ: GOOG) News.

Craft a personalized pitch: OK, I’ll respond to a canned pitch. But, it superior be highly targeted.

Even though, if you want to improve your odds, try to find ways to show that you understand my focus and work.

For example, you could begin a pitch with: “Hi Tom, I saw that you recently wrote a piece about on-demand software operator, Salesforce.com (NYSE: CRM). I think you might be interested in another company in the space, which is called…..”

Believe me, I’ll pay attention.

Keep it short: I’ve seen pitches that have hundreds of words. Don’t do it. Instead, I like pitches that are just a couple paragraphs.

Basically, find a way to grab me and then perhaps have a press release (but don’t have it as an attachment — I’m scared of opening them because of security concerns).

Provide a hook: I get press releases on such topics as new-hires of executives and other typical stuff. But, unless the hire is a big-time person, does it matter? Probably not.

In other words, consider the following: what is the angle (that is, the hook)? Why would I be interested in writing about your pitch?

In fact, try to state the hook in an email’s subject line.

Don’t pitch every day: Yes, I get some of these. And it’s annoying. It means that you are really not targeting me; rather, it’s kind of like spam.

Some resources: To go further, there are certainly good books on dealing with the media, such as Media Training 101: A Guide to Meeting the Press and The New Rules of Marketing and PR: How to Use News Releases, Blogs, Podcasting, Viral Marketing and On the internet Media to Reach Buyers Directly.

16 07 2008

Dimdim drums up $6.4 million

Posted by: in Small Business

Filed under: Microsoft (MSFT), Cisco Systems (CSCO), Next large thing, Adobe Systems (ADBE), Small business

A group of tech veterans — DD Ganguly, Jayant Pandit, Saurav Mohapatra, Sundar Subramanian and Rohit Shankar - have worked on various projects, despite being in far-flung places across the globe. They did so by leveraging free technologies such as Skype to help manage things.

However, they also wanted to share screens, but couldn’t find anything for it as the conferencing software was either too high-priced or complicated. So, they started a new company: Dimdim.

That was in 2006 and, as of now, Dimdim is getting lots of traction. In fact, the firm has raised $6.4 million in venture capital. The investors include: Index Ventures, Nexus India Capital and Draper Richards.

Dimdim is available as downloadable open source software. There is also an on-demand version.

For the most part, Dimdim is gunning for a massive market opportunity. For example, Cisco (NASDAQ: CSCO) purchased WebEx for a whopping $3.2 billion. Other major players in the space include Microsoft (NASDAQ: MSFT), Citrix (NASDAQ: CTXS) and Adobe (NASDAQ: ADBE).

So, if Dimdim can develop an enterprise-ready version and can provide it on a low-cost basis, the impact could be highly disruptive. And now, the company has some capital to give it a try.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar On the web Guide to Decoding Financial Statements. He also operates MergerBook.com.

13 07 2008

Entrepreneur’s Journal: So, what’s your business worth?

Posted by: in Small Business

Filed under: Small business

Let’s state you want to sell or buy a business. Or, suppose you want to gift a piece of your business to your family. Maybe you want to raise capital?

Well, you’ll need to determine the value of your business.

So, to get some perspective on the topic, I spoke to Scott Gabehart. He has valued over 700 businesses since 1991 and has written several books on the topic, such as The Business Valuation Book (with CD-ROM).

According to him, there are several approaches to getting a valuation:

Do-It-Yourself: Yes, the valuation process can be extremely complex. But Gabehart has an simple system that’ll provide a rough estimate.

First, you’ll need to calculate your company’s adjusted cash flow (ACF). This is:

Net income
+ Your salary
+ Your perks (personal travel, discretionary expenses)
+ Depreciation
+ Interest expense

After all, it’s common for owners to use their business to pay for personal expenses. Thus, it’s important to factor our certain items (for example, depreciation is a non-cash expense).

Now, once you have the ACF, you need to multiply it by a multiple. Generally, the higher the ACF, the higher the multiple.

Here are some guidelines from Gabehart:

ACF up to $250K, multiples of 1 to 3
ACF between $250K and $500K, multiples of 3 to 5
ACF between $500K and $1m, multiples of 5 to 7
ACF over $1m, multiples over 7

On the web Services: There are some web sites that generate basic valuations, which are usually based on real transactions. Examples include: BizBuySell.com and BizComps.com.

However, you need to be wary. According to David C. Baker (who operates ReCourses), valuation web services may “essentially be billboards to get you to hire a consulting firm, with very little hard content from a thought leadership perspective.”

Hire a Valuation Firm: Like any consulting industry, there are varying degrees of quality (yes, some valuation firms are fairly mediocre).

So, when selecting a valuation expert, look for the following:

Is the person certified? The main organizations include: Institute of Business Appraisers, National Association of Certified Valuation Analysts, American Institute of Certified Public Accountants and American Society of Appraisers.
Does the firm have a web site? This shows that the firm is serious.
References? Don’t be afraid to ask for them.
Costs? These should range from $2,000 to $15,000, depending on the reason for the valuation and the scope. Also, don’t pay the fee up-front; instead, pay based on different stages (the first may be the initial meetings for data input and the second could be the actual report).

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

12 07 2008

Challenge gets $4.5 million to play games

Posted by: in Small Business

Filed under: Next huge thing, Small business

Andrew Busey has been a part of some key web technologies over the past 15 years, such as Mosaic (the first web browser) and iChat (one of the first IM apps). He also co-founded Pluck.

Yet, Busey’s passion is gaming. So, a couple years ago, he started a new company in the space: Challenge Games.

In fact, this week the firm raised $4.5 million from Sequoia Capital (keep in mind that the firm has invested in such break-out companies like Atari, Electronic Arts and nVidia). The venture capitalist on the deal, Roelof Botha, learned about the company while playing its popular title, Duels.

Basically, Challenge Games focuses on web-based short-form games, which can be played in three-to-ten minute increments. The goal is to create content that appeals to the casual gaming to the hardcore player.

To this end, it helps to partner with major brands. In fact, Challenge Games has struck a multi-year deal with Major League Baseball Advanced Media to launch a new game, Baseball Boss. This title involves a blend of baseball card collecting and fantasy sports activities. Monetization comes from buying and selling virtual goods.

Actually, with the capital infusion, Challenge plans to launch a new game each quarter, which is a smart strategy. Basically, it looks like casual gaming is getting traction. After all, Duels has snagged 250,000 loyal users in ten months.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar On the internet Guide to Decoding Financial Statements. He also operates MergerBook.com.

12 07 2008

Trulia lands $15 million

Posted by: in Small Business

Filed under: Next massive thing, Small business

I’ve been using Zillow for a while. The site allows you to check the value of your home - as well as other people’s homes. It’s a lot of fun and yes, kind of voyeuristic.

But, I recently learned about a similar site: Trulia. Actually, this week, the company raised $15 million in venture capital. The lead investor on the round was Deep Fork Capital. In all, Trulia has raised $33 million.

It’s definitely impressive - especially in light of the terrible real estate industry. Then again, Trulia is attempting to transform an industry - which, if successful, could result in a big payday.

Something else: Trulia has built a division for real estate professionals. That is, with the large amounts of data and traffic (about five million one-of-a-kind visitors per month), there are several opportunities for advertising revenues. Keep in mind that real estate brokers spend $11 billion per year on marketing.

So why raise the $15 million? Actually, Trulia put together a blog post on it:

“We know from our industry partners that they are transitioning their marketing efforts and services online, massive time. We’ve recently launched the Trulia Advertising Network and Trulia Pro and we plan to aggressively expand our advertising opportunities to give the real estate community hyper-targeted and cost effective ways to make the marketing transition on the web.

“Real estate agents are not just spending their dollars on the web, but increasingly they’re working to build their ‘online presence’–answering questions, blogging, participating on forums and building out their web sites. This is happening swiftly and it’s important that we move swiftly to meet the demand.”

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar On the web Guide to Decoding Financial Statements. He also operates MergerBook.com.

12 07 2008

Entrepreneur’s Journal: When raising capital, beware of the ‘advance fee’ scheme

Posted by: in Small Business

Filed under: Small business

I recently talked to a business owner who was in the process of raising capital. To this end, she paid a $20,000 upfront fee to a finder (a person who brokers equity investments and loans).

The result? Nothing. The finder stated that a variety of banks were not interested in the deal.

Oh, and that $20,000 fee? Unfortunately, that was non-refundable.

With the credit crunch — and slowing economy — entrepreneurs are certainly having trouble raising money. But, there also appears to be a rise in so-called “advance fee schemes” (this is according to a current piece in the Wall Street Journal, which is a paid publication).

In fact, the FBI is investigating the matter (and also has some helpful resources on its website). Even though it could actually be pretty tough to prove fraud. Essentially, there must be evidence that the finder had no intention of raising the capital.

So, how can you protect yourself? Here are some tips:

Verify: Do a background check on the finder, such as by using an on the web service. Also, does the finder have a website? A real physical address - not a PO Box? Customer references?
Payment: A small upfront free is OK. However, you should really be paying for performance; that’s, a solid introduction to a financing source.
Contract: Sign one and have an attorney review it.
Be wary of language like “guaranteed”: In the world of finance - especially with small businesses - there are no guarantees. Simply put, raising capital is extremely tough. So, don’t get sucked into grandiose promises.

Then again, you must ask yourself: why do you need a finder anyway? After all, if your business is credit-worthy, why can’t you go directly to the bank? Hey, many business owners do this successfully, right?

Perhaps a better approach is to hire an expert to help fill out the loan documents and prepare a business plan. For such services, the fees can range from $1,000 to $10,000 or so (again, make sure you do a background check and don’t pay the full amount upfront).

Or, on the other hand, you can craft your own business plan. And the good news is that there are lots of books on the topic - such as Mike McKeever’s How to Write a Business Plan - as well as software, like Palo Alto’s Business Plan Pro.

12 07 2008

Parascale makes rain from the ‘cloud’

Posted by: in Small Business

Filed under: Google (GOOG), Amazon.com (AMZN), Small business

Over the past couple years, major players like Google (NASDAQ: GOOG) and Amazon.com (NASDAQ: AMZN) have invested in the so-called “cloud.” Basically, they’re leveraging their big infrastructures to provision services - like web hosting, storage and so on - to other companies. Actually, I know many startups that have such deals (helping to cut costs and get to market faster).

But what if you don’t want to outsource this? Well, there is an alternative: Parascale. The company sells cloud software that you can install on your own servers.

As an indication of its power, Parascale has raised $11.37 million in a Series A round. The investors include Charles River Ventures and Menlo Ventures (both firms have extensive backgrounds in the storage area).

Parascale got its begin four years ago. Interestingly enough, it hasn’t been an simple journey. The original team had to get second mortgages and lines of credit to support operations.

But now, it looks like the timing is right. “With the explosion of digital content,” said Sajai Krishnan, who is the CEO of Parascale CEO, “there is a need for more efficient storage systems.”

The Parascale Cloud Storage (PCS) is built on widely followed standards as well as Linux servers. This makes it easier for customers to adapt the technology to their needs (which is not an simple thing to do with Google and Amazon.com).

No doubt, the storage marketplace has gone through several major shifts over the past twenty years. So, with cloud storage, it looks like we might be seeing another shift - and Parascale will now have the resources to become a leader in the space.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar On the internet Guide to Decoding Financial Statements. He also operates MergerBook.com.

12 07 2008

Entrepreneur’s Journal: Virtualizing your business

Posted by: in Small Business

Filed under: Cisco Systems (CSCO), Small business

Darren Shafae operates Paper-Check.Com, which is a proofreading business. Without web-based technologies, his business would probably be far smaller.

“I have taken the best of ideas I have seen, and refined them to meet our needs and improve work flow and customer and employee satisfaction,” stated Shafae.

So, what kinds of applications does Shafae use to improve his business? Well, let’s take a look:

GotVMail: Basically, this is a virtual PBX system. In other words, there’s no need to manage hardware or pay for consultants. Instead, Shafae pays for the service on a subscription basis.

Some of the features include custom greetings, multiple extensions, music-on-hold, toll-free numbers, Dial-By-Name Directory and so on. According to Shafae: “GotVMail offers professional voice talent that gives the impression that there are thousands of operators standing by to address client needs and concerns.”

WebEx: This grants for remote presentations, including PowerPoint slides. The technology, which is now owned by Cisco (NASDAQ: CSCO), is fairly inexpensive for smaller businesses. No doubt, it’s quite useful for Shafae. He uses WebEx for things like customer demos, training and customer support.

Rackspace: This company provides premium managed web hosting services. Basically, as Shafae’s business started to grow, there was a need to allow for custom components - which is only possible in a dedicated server environment.

By using Rackspace, Shafae was able to save the potential costs of hiring an IT expert as well as purchasing high-priced hardware. “Rackspace has saved our business five to seven times this year already,” stated Shafae. “The company continually monitors our server and, if there is a problem, they let us know, after they fix the problem.”

Some advice: Of course, there are always perils when buying web- based applications. To help out, Shafae has some advice:

o. Read the fine print: What if the applications don’t perform according to specifications? Make sure you read the contract and you’ve a way to terminate things without causing much trouble.
o. Do some research: Before making a purchase decision, Shafae checks on the internet venues, such as blogs, message boards and even Twitter. “Most Twitter users are more than happy to give you their two cents,” he said.
o. Buying too much: Because of the low price points, it’s simple to buy too many web-based applications. In other words, focus only on those that’ll make a difference.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.