Achieving Product/Market Fit

For any startup to succeed, achieving a good product/market fit is among the most vital of goals. But verifying that your product meets a strong market need and can stand up to competitors is not an exact science, nor does it typically happen in one grand a-ha moment. Likewise, building momentum in a market requires patience and comes with no guarantees as customers’ needs, regulatory landscapes, and competitive pressures change over time.

“Consider that your business will only succeed if it adds real value for the user. In this case ‘value’ means that businesses or individuals will understand they need or want it enough to pay you a price that will give you profit and success,” advises SCORE mentor and marketing expert Sue Phalen. “Start by understanding your target market's need and then whether you will be a better solution than your competition.”

There are some actions you can take to increase your success in accomplishing product/market fit.

Do your homework to understand your customers’ current needs and anticipate what they’ll need in the future. Research your target demographic by spending time with prospective customers, read industry blogs and print publications, attend industry tradeshows and webinars, and seek out a professional in your industry who might serve as a mentor to you as you develop your products and services. SCORE is a good place to seek a mentor with the background you need.

Focus on one primary and critical value proposition. It’s impossible to be all things to all customers. By homing in on what’s most important to your target customers, analyzing significant trends in your industry, and identifying where competitors are falling short in solving customers’ problems, you can deliver value out of the gate. If you’re solving a pain point for your customers from the start, they will be more patient in waiting for you to add other features and options.

Have a business plan, but be open to change as you listen to feedback and ideas from your early customers. Learning from what they’re telling you can improve your products or services. And be prepared to adapt your systems and processes to make your business more viable and sustainable. 

According to Phalen, “Good planning and research will pay off in costs avoided and a far better marketing strategy and tactics that will resound in your customers’ minds. It is not ‘how’ you bring your product or service but rather what the benefits are in the language the customer understands.”

____________________________________________________________________________ SCORE is a nonprofit association whose volunteers help start and improve small businesses. Send questions or volunteer inquiries to scorehouston@gmail.com.

Emerging Leaders Initiative

After getting off to a good start and proven your concept with ample unfilled demand for your service, it may be time to prepare your small business to substantially grow. That’s when you need the expert training and mentoring that is required to make that leap forward to compete at a higher level. Fortunately, there’s a successful program in its second year in Houston that can prepare you for the challenges you face.

The Small Business Administration’s (SBA) Emerging Leaders Initiative is a federal training initiative conducted in 48 communities since 2008. The program specifically focuses on executives of businesses poised for growth. The initiative provides these executives with the organizational framework, resource network, and motivation required to build sustainable businesses and promote the economic development within urban communities.

Hundreds of graduates have reported revenue growth, $17 million in new financing, created new jobs or retained all existing jobs, and over $700 million secured in federal, state, local, tribal and corporate contract awards.

Over the course of seven months, participants are given the opportunity to work with experienced mentors, attend specialized workshops and develop connections with their peers, city leaders, and the financial community. The Initiative incorporates a research-based curriculum specifically designed to stimulate and support the development and expansion of your business including options for accessing new capital and securing government contracts. 

The Emerging Leaders Initiative is for established business owners and is not for start-ups. The series is open to small business owners and executives that: have annual revenues of at least $400,000, have been in business for at least 3 years, and have at least one employee, other than self. All types of businesses can participate.

At the conclusion of the training, entrepreneurs produce a three-year strategic growth action plan with benchmarks and performance targets that will help them access the necessary support and resources to move forward.  The end result of the executive education prepares and encourages small businesses to move to the next level on their growth trajectory.  

Participation in the Initiative is free. The only cost is your time and commitment to complete the curriculum over the course of seven months. All other costs are covered by the SBA and SCORE who is sponsoring this event and providing mentoring services. 

Business executives interested in participating should register before March 7 at www.interise.org/sbaemergingleaders. Classes begin in April. For information, contact Stephen Curry at Stephen.Curry@sba.gov or (713) 773-6542. _________________________________________________________________________ SCORE is a nonprofit association whose volunteers help start and improve small businesses. Send questions or volunteer inquiries to scorehouston@gmail.com.

Small-business Q&A: First step is deciding what decision to make

Many of the decisions made as a small-business owner can be difficult and stressful. As you gain experience making decisions, you'll be better able to tackle the inevitable choices that are more complex, or must be made quickly.
Here are some tips for making thoughtful, well-informed decisions:
Define clearly what the decision is that needs to be made. Is this really your decision or someone else's and do you really need to make a decision at all? If you do not have at least two options, you have no decision to make.
Brainstorm the alternatives. Draw on all available knowledge resources to learn as much as you can about the implications of each option. Identify contributing factors that potentially can be changed to improve a particular alternative, and those that must be accepted as they are.
Weigh costs versus benefits. The time-tested exercise of listing pros and cons on opposite sides of a piece of paper still works. Try to match up direct causes and effects as much as possible, but also consider intangible influences and outcomes.
Balance your information inputs. Seek out as many perspectives as possible, but remember that many opinions, even those of "experts," are subjective and potentially based on incomplete information. Also, avoid blindly accepting an opinion because it's exactly what you want to hear.
Trust your instincts. Intuition can be your ally, especially if what appears to be a good choice just doesn't feel right. Think about the reasons for the uncertainty and look for further evidence that counters or justifies your concern.
Recognize your limitations. We all have likes and dislikes that can bias our thinking in a certain direction. If you lean toward an alternative simply because "it's always worked," you may be overlooking something.
Divert your attention. Take a break from your decision-making and do something as unrelated as possible. The decision factors may not change in the interim, but a fresh look is sure to make a positive difference in how you evaluate them.
Just do it. Once you have made your decision, get moving on it. Don't agonize about "what ifs" or wonder what someone else might have done. If it turns out that another option was better, so be it. Learn from your mistakes and move on.

Small-business Q&A: Federal agency can help with loans

Starting or expanding a small business takes time, hard work and money. Depending on your type of business and present financial situation, you may need to reach to outside sources for funding. 

One resource you can turn to for assistance in obtaining a loan to start or grow your business is the U.S. Small Business Administration. While the SBA does not directly lend money to small businesses, it can facilitate loans with third-party lenders. Various banks, credit unions, community development organizations and micro lending institutions throughout the U.S. partner with the SBA to provide funding to small businesses without access to other financing options, with reasonable terms.

The agency sets specific guidelines for loans, which are made by its partners, and it guarantees that they'll be repaid by the borrowers. This benefits small business owners by giving them access to much-needed funding, and it eliminates some of the risk to the lending partners.

Points in favor

Among the advantages of SBA loans over conventional loans are lower down payments and longer repayment terms. To qualify for an SBA loan, your business must meet certain criteria regarding business size, financial standing, and others. You must also meet the credit qualifications of the lender.

The SBA 7(a) loan program arranges for loans that may be used to establish a new business or to assist in the acquisition, operation or expansion of an existing business. These loans can be used for various purposes, such as, satisfying short-term or long-term working capital needs; purchasing equipment, machinery and supplies; buying real estate; refinancing existing debt; and more.

The SBA Microloan program provides loans up to $50,000 to help businesses with lower dollar financing needs. You can use microloans for working capital and purchasing inventory, supplies, furniture, equipment, machinery, etc.

For information about SBA loan programs, visit www.sba.gov/loanprograms.

Seminar ahead

Also, learn more about SBA financing by attending the seminar "Business Plans to Launch and Grow & Funding to Make It So," hosted by the Houston Community College and SCORE. This seminar will be held 12:30-3:30 p.m. Jan. 15 at the HCC-Spring Branch campus.

The following senior officials will speak: Tim Jeffcoat, director, SBA Houston District; Nasrullah Khan, chief lending officer of Wallis State Bank, a leading SBA lender; Richard Gianni, regional vice president of LiftFund, a micro lender; and Jeff Jones, president of Advanced Business Brokers and SCORE volunteer.

To learn more about this seminar and register, visit www.houston.score.org/local workshops.

Business plans are worth the work

A business plan is not only important for starting your business, it's also an indispensable tool for helping you manage and grow your business.

Your business plan is your road map for operating your company, and it's essential if you intend to seek funding from outside sources.

A plan spells out specific details related to your business concept, marketplace, and financials. The length of your business plan can depend on the complexity and scale of your business. Even short one-page business plans have purpose and can affect success.





If you are intimidated by the thought of writing, know that the benefits are well worth the effort. The value of a business plan isn't so much in the document you create, but the discovery process you embark upon to create it. As you work on the plan, you answer key questions about your business that you may not otherwise have considered. That can help you recognize risks and opportunities - and better position you for success.


There are several ways to make writing your business plan less intimidating. First, don't try to do it all at once. If you tackle it in smaller bits and pieces, the project will be more manageable.
Schedule time to work on it. You'll feel less stressed if you reserve time for it on your calendar.




Get feedback along the way. As you work on the different sections of your business plan, ask a SCORE mentor or other unbiased business professional to review it and provide suggestions for improvement and clarity. SCORE mentors are experienced and provide free and confidential mentoring.


Even though writing a business plan will require effort, it doesn't have to be a harrowing experience. With a business plan, you'll be better able to move your business in the right direction from the start and navigate changes more easily in the future.

Crowdfunding - An Alterantive Source of Capital

Over the last several years crowdfunding has become an increasingly popular option for both entrepreneurs and investors trying to raise capital—and public awareness—when launching or growing a small business.

Rather than approaching a single lender to make a significant loan to your business (which you will most likely need to personally guaranty), crowdfunding platforms give you a way to leverage your network of friends, family, social media connections, and the public at large to obtain significant capital in small increments.

It’s a collective online effort that can expand your professional network and introduce your business to potential customers. 

Crowdfunding for businesses presently comes in three primary forms:

·         Rewards-based crowdfunding (such as via Kickstarter and Indiegogo)

·         Equity crowdfunding (such as via CircleUp)

·         Peer-to-peer lending (such as via Lending Club)

With rewards-based crowdfunding, you are only promising your backers some sort of token incentive and the risks are more limited. Whereas with equity crowdfunding, you are giving up equity and the risks can be substantial. With peer-to-peer lending, the business is taking on debt that it is legally obligated to pay back.

Equity crowdfunding and peer-to-peer lending are governed by a complicated web of federal and state securities laws, while rewards-based crowdfunding is generally exempt from those laws.

According to SCORE mentor and Houston entrepreneur Nick Tarte, rewards-based crowdfunding has rapidly become an accepted way to raise capital for small businesses.

“Traditionally, companies raised capital by issuing debt or equity,” says Tarte. “Rewards-based crowdfunding introduced a completely new alternative. The model has shown that the public is willing to contribute capital to worthy projects without any expectation of future profit, which is quite revolutionary.” But be sure to pick the right platform for your rewards-based campaign. Remember, crowdfunding is a form of marketing, and you want to be where your customers are.

Tarte advises to make sure you follow through on your promises. Watchdog groups and state and federal consumer protection bureaus have begun to shift their attention to deceptive crowdfunding campaigns.

Don’t forget about taxes. Proceeds raised from rewards-based crowdfunding campaigns are usually treated as taxable income to the business. For this reason, Tarte advises businesses to consult with their tax advisors before embarking on a crowdfunding campaign.

Nick Tarte will present the details of this increasingly popular but often misunderstood funding option at the SCORE workshop “Crowdfunding – An Alternative Source of Funding” on December 5. To learn more and register for this workshop, go to www.houston.score.org/localworkshops.

____________________________________________________________________________ SCORE is a nonprofit association whose volunteers help start and improve small businesses. Send questions or volunteer inquiries to scorehouston@gmail.com.