For past editions, visit the SHELTOWEE NEWS ARCHIVES

By Alex Day

Having a business plan is an absolute necessity for any business.  Now the concept of the "Business Plan" has changed over the years.  The venture capital model on the West Coast requires such high throughput that the whole concept of the business plan has changed. We in the mid-west like to adopt concepts that develop in Silicon Valley, so we like doing "Business Canvases" as well.  These are abbreviated business plans and allow venture capitalists who need to churn through hundreds of deals, to make quick evaluations as to their interest, by reviewing a minimal amount of information.  I am a big fan of condensing down your message, but I also hold on to some of the traditional notions of needing a "real" business plan, not just the Cliff Notes.

Also remember that there is a difference in "Planning your Business" and your "Business Plan".  The business plan is a result of planning your business.  It is the document that is used to communicate what your business is, how it will ...     continue reading  

Raising Capital:  Understanding Key Terms & Financing Approaches

By Dawn Yankeelov

As we enter the workforce, there is a presumption that we are old enough to understand everything there is to know about money.  As an entrepreneur launching a new business, you begin to appreciate that this is simply not a given; we must work for the knowledge we need to succeed.

The fundraising process for an entrepreneur seems straightforward at a glance:  (a) come up with an idea; (b) develop a plan; (c) develop a pitch; (d) pitch your plan (e) get someone interested; (g) go through due diligence; and (h) close the deal.  Let’s not forget assembling your team to get the business up and running—for which you may need some or most of your dollars. 

However you must understand the different types of funding; the types of people that could potentially invest; the inherent risks of being in deals with these people; and the lexicon of terms associated with raising capital.

Below is a quick primer overview with key definitions, provided by Sheltowee Business Network Founder & CEO Alex Day, with support from Wikipedia, and other resources.  He has designed a workshop format, both live and online, that allows for a deeper dive into...     continue reading  

8 Things Every Entrepreneur Needs to Know About Credit

By Alex Day

Getting a business off the ground requires capital.  One of the most often used means of funding an early stage business is with credit. Credit is probably the easiest way to access capital for your business.  Below are some of the things that every entrepreneur should know about credit.

1.  Know your credit score.  If you have a realistic shot at getting credit to fund your business, you need to know your credit score.  There are numerous different algorithms for how credit scores are calculated.  Essentially the different items that are taken into consideration are:

• How much credit you have access to- How many credit cards and lines of credit?
• How much credit you are using- How close are you to the limits on your credit cards?
• Your payment history- Do you pay on time or have you defaulted?

This is an oversimplification, but these are essentially the things that impact your score.  If you have a bankruptcy or judgments against you, these items can have a major detrimental impact on your score. 

2. Know the difference between your "credit report" and your credit score.  The federal government passed a law that you are entitled to your credit report once a year, or any time you have been declined credit.  The credit reporting companies have not made it easy to access these free reports, and even when you do, they do not come with the credit score.  This is something that is calculated differently by different groups.  So you can get a free credit report, but you can NOT get a free credit score.

3. Know your score from the three main credit reporting agencies.  Although many different groups may generate their own method for calculating a credit score for you from your credit report, you should know your score from Experian, Transunion and Equifax.  These are the three main credit reporting agencies and you should know your scores from them.  If there are major discrepancies between these, then there is probably a mistake somewhere.  Also keep in mind that most of these sites automatically sign you up for monthly credit monitoring (which I believe is worth the money), and you usually have to opt out or you will be charged a monthly fee to get the score and other related data each month.

4. You can improve your credit score.  Once you understand the science behind how credit scores are calculated you can take steps to improve your score.  There are some things that are counter intuitive about your credit score.  For instance if you get a credit card paid down and then cancel it, this can actually negatively impact your score.  That is because part of the factor in your score is the ratio of the amount of revolving credit you have available to the amount you have used.  So if you have 3 credit cards maxed out, you pay one off, but keep it open, it has positively impacted your score.  If you pay it off and then close it, so that the amount of available credit you have available goes down, it can decrease your credit score, even though you paid off that big credit card. 

5. Know the difference between secured debt and unsecured debt.  Credit cards are unsecured debt.  If you fail to pay them, it is...     continue reading  

What An Entrepreneur Can Learn From David Bowie

By J.R. Rose

“Huh?”  You might be saying?  David Bowie, that weird guy from the 70’s who had a couple of hits?  Well you ought to be saying “wow that guy who amassed a fortune of $100+ million” (when $100 million dollars was a lot of money), yeah, what can I learn from him?”  Well I’m here to tell you that you can learn a great deal.

My 3-P’s of David Bowie for Entrepreneurs: (1) Pivot, (2) Partner, and (3) Passion. These 3-P’s can be seen over and over again through the career and genius that was David Bowie.

#1 Pivot

Learn how and when to Pivot and don’t be afraid to.  David was the master at pivoting.  Most who consider themselves David Bowie fans have never heard of or heard the song ‘Rubber Band’ which I alluded to earlier, or ‘Love You till Tuesday’ or ‘Sell Me a Coat,” all great songs off his first album.  In fact, I’d be pretty safe in guessing that most “fans” would not have given Bowie a second look if they had bought that first album because it was very, very different from the music they would later hear on top 40 stations from David.  David knew how to keep his music changing, keep it fresh, experiment and not to rest on his current ‘Fame.’

In business we need to do the same thing, especially startups.  Apple is always changing and innovating and look at where they are now.  Blockbuster refused to see the future and the changes on the horizon.  They tried to keep milking the same old song.  Look where they are now (hey, where are they exactly?)

Keith Aichele, a Greater Chicago friend and business associate of mine who is a marketing and business consultant, often says “make your product obsolete or someone else will!”  This is good advice and Bowie literally lived by this mantra.  He pivoted and reinvented many times over his professional career always giving his customers something new, something fresh.  Remember Blockbuster at your next company strategic planning meeting and start figuring out how your company is going to grow and ‘Ch…Ch…Ch…Change!’

#2 Partner

David Bowie didn’t do what he did in a vacuum.  He reached out to other talented musicians at the time and...     continue reading  

MEMBER SPOTLIGHT:

Sheltowee Business Network Partners With Louisville Business First to Expand Ecosystem

The Sheltowee Business Network has partnered with Louisville Business First to assist in establishing the Entrepreneurs and Innovators section.  Entrepreneurship in Louisville has more momentum than ever.  Louisville Business First has always done a great job of covering business news in Louisville, but Alex Day, the founder of the Sheltowee Business Network, believed that recent developments in the entrepreneurial space deserved a more focused approach.   

In May of 2019 Alex Day met with Lisa Benson to discuss the need for a more focused approach to entrepreneurial news.  A few weeks later Lisa proposed the Entrepreneurs and Innovators section.  The Sheltowee Business Network agreed to purchase space opposite of the Entrepreneurs and Innovators page to provide additional information under the Sheltowee News heading.  Under this partnership Sheltowee hopes to work with Louisville Business First to bring this format to other markets where the American City Business Journals (the parent company of Louisville Business First) has a presence, as well as other markets where the Sheltowee Business Network has a presence.   

The Sheltowee Business Network is proud to partner with Louisville Business First on this new endeavor, and we hope to provide helpful information and resources to the entrepreneurial ecosystem.  We look forward to hearing feedback from our readers on how we are doing.  Please send comments to info@sheltowee.com.