startups | The Barefoot Spirit

The 50-Word Blurb and the 5-Slide Deck

Michael Houlihan & Bonnie Harvey — Mon, 04 Feb 2019 19:16:43 +0000

All startups agree on one thing: They need more money. Over the past decade, we’ve worked with many startups. Even though we offer three decades of hard knocks business experience and a ton of contacts, what do you think is the first thing they want from us? You guessed it, money!

They typically ask for an NDA right off the bat, then present us with over 1,000 words of copy, and a 30+ slide deck. They try to anticipate as many questions as they can in advance and they go into extensive detail on how and why their solution is what the world needs.

Although we appreciate the time involved preparing all this documentation, we are almost discouraged by the sheer time commitment we have to make before we have determined if we’re interested. It forces us to drag our heads through a lot of information that we may not even be looking for. The sheer size of the presentation also discourages us from sending it around to folks in our network.

To read the complete article, please visit Entrepreneur

Who We Are

Michael Houlihan and Bonnie Harvey co-authored the New York Times bestselling business book, The Barefoot Spirit: How Hardship, Hustle, and Heart Built America’s #1 Wine Brand. The book has been selected as recommended reading in the CEO Library for CEO Forum, the C-Suite Book Club, and numerous university classes on business and entrepreneurship. It chronicles their humble beginnings from the laundry room of a rented Sonoma County farmhouse to the board room of E&J Gallo, who ultimately acquired their brand and engaged them as brand consultants. Barefoot is now the world’s largest wine brand.

Beginning with virtually no money and no wine industry experience, they employed innovative ideas to overcome obstacles, create new markets and forge strategic alliances. They pioneered Worthy Cause Marketing and performance-based compensation. They built an internationally bestselling brand and received their industry’s “Hot Brand” award for several consecutive years.

They offer their Guiding Principles for Success (GPS) to help entrepreneurs become successful. Their book, The Entrepreneurial Culture: 23 Ways To Engage and Empower Your People, helps corporations maximize the value of their human resources.

Currently they travel the world leading workshops, trainings, & keynoting at business schools, corporations, conferences. They are regular media guests and contributors to international publications and professional journals. They are C-Suite Network Advisors & Contributing Editors. Visit their popular brand building site at www.consumerbrandbuilders.com.

To make inquiries for keynote speaking, trainings or consulting, please contact sales@thebarefootspirit.com.

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The 5-Slide Deck and the 50 Word Blurb

Michael Houlihan & Bonnie Harvey — Thu, 10 Jan 2019 18:00:16 +0000

Drawing Investors’ Attention

Possibly the biggest challenge that entrepreneurs face is not raising capital. It’s getting the people with the capital to sit still for a presentation! Most of them see hundreds of presentations, have very short attention spans, and may turn down a perfectly good business proposition simply because they can’t stay interested long enough to get through the deck.

We have been working diligently with start-up, build-up, and build-out level businesses to help them better present themselves in a way that gets the attention of potential investors. They typically come to us with multipage descriptions, tons of charts, and a 30+ slide deck.

This approach to “overkill” and “heading objections off in the pass” may work later, once you get their attention and they have asked for more. But initially, it’s a turn off. The key is to give them just enough to pique their interest and compel them to do just that, ask for more!

Keep Your Initial Presentation Short

From our experience, we don’t believe the initial deck should be more than five slides. And we advise our clients to keep the initial blurb at 50 words. Why? Because the reader is more likely to give your initial proposal more time and attention when the end is in sight. This is why the latest trend in audio and video is to state the duration in direct association with the title as if to say, “Don’t worry, this won’t go on forever – you can see the end – it’s doable!”

When someone is reviewing hundreds of applications, a message like this is like a breath of fresh air. The reader is naturally drawn to brevity. The reader thinks, “Now here’s a proposal I can focus on without getting sucked into a lot of details (when I may not even be interested in this type of investment anyway!). Unlike the others, this one doesn’t ask a lot from me up front.”

So, here then is our format for what we think is an effective initial presentation. Remember, the whole purpose of the deck is to hold their attention through the end of the presentation, qualify them as an interested party, and get them to ask for more.

We advise our clients to keep it general. Identify the industry and the point of attack, but leave the specifics that may require an onerous and interest-killing NDA until they’ve committed to wanting to know more (i.e., shown a real interest).

The 50 Word Blurb: 3-4 sentences

In very few sentences, identify the market potential, the unique problem and pain that your product or service will alleviate, how you solve it in general terms, and the benefits your solution provides.

The Deck: 5-Slides

Keep your text uniform. Use 18 font size minimum. Use not more than 3 or 4 bullets per slide. Keep your graphics simple and easy to read with lots of white space. Your ideal slide has a title with 3 points to the left of a graphic. We like white font on a “Twitter” blue background. It’s calming, non-threatening, professional, and easy to read.

Slide One: Identify the problem (and/or the pain caused by no solution)

Slide Two: Identify the industry and its size (Show the potential opportunity for a solution)

Slide Three: Identify what the solution does more than how it works (don’t disclose any IP)

Slide Four: Identify the alternatives and the current competitive options to solve the problem

Slide Five: Call to action (what you ask and what you offer – they can get more info with an NDA)

This approach will quickly identify the few, truly interested parties, compel them to know more about the details of your solution, marketing plans, and business model. The simplicity and generalization of this approach will make it easier for your network to distribute to their contacts. Thus, your initial proposal can reach a wider audience that may be more likely to contain that interested investor you’re looking for!

You’re still far from a home run, but if you use these techniques, you’re more likely to get to first base!

Who We Are

To make inquiries for keynote speaking, trainings or consulting, please contact sales@thebarefootspirit.com.

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Entrepreneur – Startups That Overlook the Cost of Sales … Fail!

Michael Houlihan & Bonnie Harvey — Wed, 12 Sep 2018 15:52:19 +0000

You often see line items on business plans for the cost of goods sold, also known as COGS. Most startups are painfully aware of the cost of goods. But there is another cost that is even more painful if it’s overlooked. That is the cost of sales.

In today’s “scale fast and fail fast” world of entrepreneurship, it’s easy to scale fast and fail permanently when you don’t appreciate the true cost of sales. Part of the problem of scaling fast is that you can scale so fast that you actually make sales you can’t sustain.

Why? Because you inadvertently chose to make sales to a customer or in a territory with costs you can’t afford. But you didn’t know those costs when you made those sales. In fact, you were probably thrilled to make any sales and couldn’t wait to get back to your investors with the news!

To read the complete article, please visit Entrepreneur

Who We Are

To make inquiries for keynote speaking, trainings or consulting, please contact sales@thebarefootspirit.com.

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3 Ways to Get Your Vendors to Reduce Your Need for Cash

Michael Houlihan & Bonnie Harvey — Wed, 05 Sep 2018 23:05:22 +0000

When we talk to young startups these days, we repeatedly hear them asking for the same thing — cash.

It’s true that a certain amount of cash is necessary for any startup. But when we press them and ask if they have taken full advantage of their hidden resources, they look back with vacant stares. Most have never thought about using their hidden resources. Or worse, many don’t even know what their hidden resources might be or where to look for them.

Sure, we refer to them as “hidden” resources because they are not necessarily taught in school nor are they heralded by the entrepreneurial press. On the contrary, young people today are inundated with the idea that they can’t start a business unless they raise tons of cash. They are being told that they must borrow huge sums, take in large investors, or trade their equity for VC money. In fact, there’s an entire industry based on this premise.

To read the complete article, please visit The Business Journals

Who We Are

To make inquiries for keynote speaking, trainings or consulting, please contact sales@thebarefootspirit.com.

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Mind Your Business

Michael Houlihan & Bonnie Harvey — Thu, 16 Aug 2018 17:00:26 +0000

Last Sunday Michael was the guest of Yitzchok Saflas on his Mind Your Business radio show on 77 WABC in New York. Yitzchoks’ show is a great place to hear the business minds of our time. And Michael was honored to be chosen to be among such great company. The show is also currently number five in the top 10 Nielsen ratings. Michael’s interview is also available online at http://www.mybradio.com/michael-houlihan/.

The show covered the answers to the most common questions asked when building a startup: “How to go from ideation to monetization,” and Michael’s personal favorite, “How to decipher your true cost of sales.”

How to decipher your true cost of sales

Most startups understand their cost of goods, also known simply as COGS. This is what it costs to assemble, build, or manufacture the product you are selling. The budget will have a line item for COGS.

Other expenses such as advertising, taxes, shipping, and returns are simply lumped together into the general budget or even “overhead.” From our perspective, this is the biggest single mistake that startups make and it leads to a cascade of misconceptions that can put them out of business.

The cost of doing business is different in different territories. The selling costs, including taxes, shipping, promotions, representation, and distribution management, just to name a few, can vary widely from market to market. A fatal mistake we see startups making on a regular basis is underestimating the cost of sales in each market, not the cost of goods, but the cost of sales!

Our Barefoot Wine experience (or inexperience)

When we started Barefoot Wine, we knew there’d be some advertising, promotion, and merchandising costs. But we weren’t ready for the costs of airfare, car rentals, hotels, meals, samples, taxes, freight, not to mention salary and expenses for a representative in the territory. We found out about all these costs the hard way.

Fast sellers do not necessarily get reordered

Our product was a fast seller, so it sold out. That was the good news. The bad news was it didn’t get reordered after it sold out. It sold out and remained out of stock because we didn’t have a representative in each territory looking out for our products. We were shocked!

“Ya mean to say that even if retailers and distributors have a hot new product that is selling fast they won’t automatically reorder it?” we complained. The answer was demonstrated by their behavior. It could just run out and not be reordered. We had to pay to have a representative in every major territory. This was a big cost of sales. We wish we had known this going in. It wasn’t enough just to get into the big stores, now we had to pay big bucks just to stay in.

Don’t Forget Taxes and Shipping & Handling Costs

We had one big chain store in the Midwest that said they wanted to put our product on special for $5.99 in five different states. We were thrilled! We thought it would be a slam dunk. But as Bonnie says, “It was just a slam!” It turned out that in order to achieve the $5.99 sale price in two of the five states, we had to lose money on every sale. The taxes in those states were much higher, so was the shipping and handling. Instead of making a killing, we just got killed – by the cost of sales.

Michael’s Advice to Startups

One of the last questions that Yitzchok asked Michael was, “What advice would you give new startups today?” Michael’s answer was, “Start in a small place. Learn from your mistakes locally where you won’t fatally hurt your brand. Learn the cost of sales. Hire a cost accountant to analyze those costs ahead of time for each expansion scenario. Then, ‘All ahead slow’ with your eyes wide open and your notepad at the ready. You might find out it’s cheaper to do business in South Carolina than it is in New York!”

Who We Are

To make inquiries for keynote speaking, trainings or consulting, please contact sales@thebarefootspirit.com.

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5 Ways to Deal with Frustration When Your Work is Stopped by Another Team

Michael Houlihan & Bonnie Harvey — Mon, 23 Apr 2018 18:30:26 +0000

We have all been there, the place where we feel stuck, the place where our work seems to be stopped, the place where we just want to scream, “Dang it!” and tear our hair out.

Entrepreneurs spend a lot of time in that place. It’s called frustration.

One thing we learned about frustration is that it can be blinding. It can blind you to alternatives and solutions that you can’t see when all you’re seeing is red.

So much of entrepreneurship is just a grind. You have to get through a period where you seem to be putting out a lot of energy and money for very little return. It’s like trying to move the Queen Mary with one hand. You could push for years before you finally overcome the inertia and it begins to move.

This type of frustration is ongoing for most startups. It goes with the territory and is to be expected.

To read the complete article, please visit The Business Journals

Who We Are

To make inquiries for keynote speaking, trainings or consulting, please contact sales@thebarefootspirit.com.

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7 Ways The Gig Economy Affects Your Business

Michael Houlihan & Bonnie Harvey — Wed, 27 Dec 2017 18:18:47 +0000

Most startups fail because they have too much overhead and not enough sales — period.

In fact, in our program, The Barefoot Startup, we advise our clients to outsource everything but sales, accounting and quality control. Overhead expenses are earned by sales, not the other way around.

We recently had the pleasure of attending the Conference on The Gig Economy hosted by the San Francisco Chapter of the Global Chamber of Commerce. The chamber is keen on keeping its members abreast of the latest developments in the international trade space.

What we enjoyed the most was the first panel discussion that included leaders from government and industry, large and small, who focused on their experience with contingency, or “gig,” workers. It was an eye-opener and has special significance for startups looking to reduce their need for capital to cover overhead by outsourcing certain kinds of work.

To read the complete article, please visit The Business Journals

Who We Are

To make inquiries for keynote speaking, trainings or consulting, please contact sales@thebarefootspirit.com.

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7 Aspects of the Gig Economy

Michael Houlihan & Bonnie Harvey — Thu, 23 Nov 2017 18:00:45 +0000

Most startups fail because they have too much overhead and not enough sales – period! In fact, in The Barefoot Startup, we advise our clients to outsource everything but sales, accounting, and quality control. Overhead expenses are earned by sales, not the other way around!

We recently had the pleasure of attending the Conference on The Gig Economy hosted by the San Francisco Chapter of the Global Chamber of Commerce. The Chamber is keen on keeping their members abreast of the latest developments in the international trade space.

When you think of gig work, names like Lyft and Uber naturally come to mind with all their legal issues that continue to unfold. The conference did a great job of exploring those issues and the ramifications to its members and attendees.

What we enjoyed the most was the first panel discussion that included leaders from government and industry, large and small, who focused on their experience with contingency, or “gig” workers. It was an eyeopener and has special significance for startups looking to reduce their need for capital to cover overhead by outsourcing certain kinds of work. The panel thoughtfully examined several aspects of gig work and the implications businesses should be aware of.

Batch Work. Because these folks are working on a temporary basis, it’s best to give them work that has a beginning, a middle, and an end. Be clear about the parameters, deadlines, and formats.
Free Agents. Since they work for many clients, they have to shuffle priorities. Make sure your work is on their priority list. Also, be aware that you can lose them after you have invested training time.
Timing. They may work in different time zones making real time communication difficult. They may choose to work when they want. You may have to accommodate their existing schedules to get your job done.
Legalities. There appears to be a fine line between independent contractors and full-time employees. It’s still being adjudicated all over the world. Different countries have different laws one must be aware of. Generally, the more restraints you put on gig workers, the more likely they are to be considered employees. For those who are employees, the governing bodies want insurance, and taxes and employer contributions – and the battle goes on in each jurisdiction.
Up-To-Date. Gig workers tend to be more current on their job skills and stay on top of the latest unfolding technology, even more so than your own employees who, over time, may become lax in updating their education.
Cultural Impact. Contingency workers tend to work harder and faster than many of your own people. This tends to influence your folks to work harder. But on the other hand, gig workers can lack an understanding and appreciation for your company culture, policies, and procedures. They can be out of step with your people. Especially if they are working directly with your employees, this can be a problem.
Proving Ground. Many companies use a gig worker for a trial period to see if they will fit into their company as a full-time employee. It’s also a way of securing trained folks and their knowledge of your company without having to first make them an employee. This way, you get a sample of their work without a commitment.

What we like about the gig economy is that, especially for cash strapped startups, it can be an excellent way of paying for work as needed and not having to support a “payroll” that is due every two weeks whether or not you have made sales!

We advise our clients to look for the types of work that “fit” the Global Gig Economy. Be aware of the shortcomings as well as the advantages. It just may be the outsource resource you’ve been looking for!

Who We Are

To make inquiries for keynote speaking, trainings or consulting, please contact sales@thebarefootspirit.com.

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How to Spin Up Fast Without Spinning Out of Control

Michael Houlihan & Bonnie Harvey — Wed, 15 Nov 2017 18:42:02 +0000

Startups have been told by investors, advisors and the media to “scale fast!”

The idea is to dominate your space, crush the competition, and become an acquisition target as quickly as possible. You’re even told to “fail fast!”

Seems like everything is fast, fast, fast!

If that’s such great advice, why do nine out of 10 startups fail?

The Highway Patrol will tell you that the leading cause of accidents is excessive speed. Is driving your startup too fast “crusin’ for a bruisin’?”

What makes you think you understand all the ramifications of growth when you hit the accelerator? How did you get the idea that you were ready to “step on it?”

The answers are many:

To read the complete article, please visit The Business Journals

Who We Are

To make inquiries for keynote speaking, trainings or consulting, please contact sales@thebarefootspirit.com.

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Can Legislative Indecision Hurt Small Business?

Michael Houlihan & Bonnie Harvey — Thu, 06 Jul 2017 17:00:21 +0000

A small business owner recently asked us if we thought Washington’s indecision over the health care issue could affect her business. Our answer was not the one she wanted to hear.

It has been the public’s willingness to commit to the purchases of new cars, refrigerators, and houses that has greatly determined the state of the economy since the great depression. This is still the situation today. As long as we continue to make these major purchases, it’s smooth sailing. But will consumers be able to afford the payments on major purchases if they have a major increase in their health care costs?

What if consumers are thinking about that new car or house right now and reading the news about the government’s indecision on health care costs? What if, suddenly, consumers had to fork up another $300-600 per month …or more? Would they be more likely or less likely to make that new car purchase PLUS committing themselves to hundreds of dollars more in monthly payments? Just the specter of this possibility may be enough to make them second guess that next major purchase.

Once a considerable segment of the market decides to postpone these kinds of purchases, the dominoes begin to start falling and sales in most businesses are negatively affected. We saw this in the last recession. Initially the pundits said it would be contained to the real estate sector. But they didn’t factor in that consumers felt less wealthy, even if it their “wealth” was on paper. They immediately cut back on their spending, especially for those major purchases. This trickled down to startups and small businesses, and many jobs were lost.

We fear the potential for this same phenomenon is at work today. Real estate is now in a significant bubble, the stock market is once more overvalued. We have lived long enough to have seen the economy take a big hit, just because the press focused too much news on poor early holiday sales, which created a self-fulfilling prophecy scaring consumers out of their wits and out of the stores. How about governmental indecision on a major part of the consumer’s personal budget?

Whether you agree with the concept of government health care or not, it’s here and it’s here to stay. Americans now expect government health care at some level. So that’s a dead debate. Now the question is, what kind and how much? This is an important enough decision that it requires some bi-party cooperation. There’s no doubt the existing health care plan needs fixing and the new plans obviously need to be better thought out. There’s no simple solution.

No elected official wants to face reelection with their name on a bill that leaves 20 million people uncovered or facing radically increased premiums. Meanwhile, the indecision about the future of health care can cause unnecessary negative effects on the economy. Indecision creates insecurity, and insecurity results in more indecision.

We are pro-business. We especially love to support startups and small businesses. For us, this current situation directly impacts those businesses, since the postponement of major purchases will have a ripple effect that will hurt businesses at every level. We would like to see all elected officials understand that working together to solve this problem quickly is more important than honoring any pre-election pledges made without consideration of the big picture. The economy is fragile, so let’s not spook the consumers!

Who We Are

To make inquiries for keynote speaking, trainings or consulting, please contact sales@thebarefootspirit.com.

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