Among the enterprising, only the bold launch a startup without access to lots of capital, for it is common knowledge that most new business costs exhaust their investment capital and fail within five years. Entrepreneurs of modest means can take heart, however, from encouraging boons for startups in a recent Securities and Exchange Commission (SEC) decision, the ubiquitous reach of social media, and the availability of valuable online business resources and merchant resources.
The SEC Decision
A recent SEC decision promises to be a godsend for startups raising funds for their expenses. The decision, which removed restrictions on general fundraising solicitation and advertising, could change drastically the way entrepreneurs raise money from investors.
The ban on general solicitation prohibits startups from advertising investment opportunities by traditional and new media for general audiences. Instead, they must present sales of their securities through formal, official financial channels. Removal of the ban allows solicitations of investments through many more media to help investors connect with entrepreneurs, and vice versa. The decision weighs in favor of entrepreneurs and investors outside places where startup fundraising relies on networks and personal connections. Now entrepreneurs should be able to connect with investors much more easily, through social media, for example.
A startup that ignores social media or has no plan to make use of them is definitely at risk of financial demise. A social media strategic plan should consider the startup’s messages to its prospective customers, its target audiences, and how customers benefit from them. An internal social media policy should state standards of employee online behavior. It should include style preferences, and all messages from startup employees should be consistent with company values.
The same rules for classic public relations and branding apply to social media. Startups that create useful, informative content give audiences something they can appreciate in enjoyment, entertainment, new ideas, incentive, and inspiration. Gone are the days when companies could put up static websites little more than electronic business cards. Social media are about dynamic exchanges with customers, not one-shot efforts.
Many startups think that involvement in social media is easy, that anyone who uses the Facebook, YouTube, and Twitter websites for personal networking can use them for business. Personal and business uses require different skill sets. Fortunately, many online resources and services are available to any entrepreneur launching a startup.
Online Business Resources and Merchant Services
To launch a startup, the entrepreneur needs an idea and lots of time, energy, and enthusiasm, and it helps to have web-based services to help startups get off the ground without collapse under crushing overhead expenses. Some of these resources/services are especially popular among tech-savvy companies. Quite a few have combined operations, making exchange of contact data and other information easy:
• Kickstarter: For creative designers, film producers, musicians, and other artistic types, Kickstarter is a medium now open since the SEC decision for fundraising from investors interested in such projects.
• oDesk: A freelancer marketplace for people from all over around the world to help with administrative support, customer service, data entry, legal problems, writing and translation, software programming, web design, and more. Elance is a similar service.
• Google Docs: Like an online Microsoft Office, Google Docs can create documents, presentations, and spreadsheets, and users can share work and collaborate on projects with colleagues far away.
• 99designs: A website for design contests. The customer posts a description of what the startup needs and then gets submissions with bids from designers around the world.
• MailChimp: For e-mails to customers, MailChimp manages e-mail lists and designs e-mail newsletters and flyers, a free service for startups with up to 1,000 subscribers and 6,000 monthly messages.
• Skype: Skype keeps team members in touch by video call, voice call, or instant message no matter how distant from each other they may be.
• SurveyMonkey: Surveys can be helpful for customer service and feedback. SurveyMonkey makes it easy to design surveys and collect their results.
• Dropbox: For startups with workers in various locations, Dropbox helps them share files and control access to them.
• Outright: A accounting service, Outright tracks income and expenses and pays estimated taxes.
With investor connections eased by the SEC, customer contact expanded exponentially by social media, and startup operations made increasingly affordable by available online business resources and merchant services, entrepreneurs of the present enjoy many advantages over those of any time in the past. With these auspicious developments, the business climate for startups is better than ever.