I was doing my continuing legal credits - always a thrill as you know. For two days I'm sitting in a class filled with lawyers getting get information on the "How to Start a Business." It was very well done, and included how to find new clients; what you need to have in terms of insurance; location of the business; and the distinguishing features of a franchise..but was was DRASTICALLY missing is ....How to ASK for money!
Anyone starting a new business or counseling people on how to start a new business has to know how to ASK and there are many steps that need to be taken to make the right Ask of the right prospective investor.
Step one - PRIORTIZE who you will ASK and in what order
Step two - what is your SCRIPT to do the ASK it needs to be written and practiced
Step Three - it has to be for a Specific Amount or if it is a percentage of projected revenue...then what number is the projected revenue
I offered to teach this section in their next class on How to Start a Business because I spoke to some of my fellow lawyer attendees and light bulbs burst - gee - "didn't think about that" was the general reaction. So if you are starting a business or counseling people on starting a business, I strongly suggest you invest the time to learn How to Ask.
Great piece Laura! As an entrepreneur and business consultant, I run into so many individuals who are starting a business and seem to expect that people will just help them out because they have a good idea and assume they will take care of them in return when they make it big. Well, most of them never make it big because they aren't willing to pay for professional help--you get what you pay for and fee advice is often worthless. There is also a difference in what you get from the same person when they are being paid for the expertise versus when you are just asking for a favor.
ReplyDeleteI learned a long time ago that the money question needs to be raised relatively early in the relationship or it just gets muddy from there. I lay out the different ways that I can be compensated in the first meeting with a new consulting prospect and in the second meeting I present the contract document. Then I wait for the signed agreement and deposit before I start working, an wait for further payment to continue work if they use up the retainer. It does scare away some prospects, because there are so many people who will "help" or give advice for free. And all I can say is, when someone is not asking for compensation and doing it professionally, their advice is only as professional as their behavior are in the relationship.