Friday, August 22, 2008

10 Tips for Starting a Business - Tip # 7 - Your Team

Investors don't invest in products or services. They invest in people. They look at the management team as the most important part of the business.

Even if you aren't going to raise outside capital, you still need a strong team to make your business successful. Of course, the first member of your team is YOU. Why are you the person who will create a business that is successful? Do you have experience as an entrepreneur? Do you have experience in the industry? How about your partners or your advisers?

If you just have an idea or a prototype of an invention, can you tap outside experts to help you produce and market your product? Do you have trusted advisers, such as a lawyer or accountant, who can help you? How about a professional strategic planner or operations expert?

Figure out what people you need, whom you want to work with, then get the team together.

But whatever you do, make sure you work out who will contribute what and what each person will receive in rewards. Pay? Stock? Options? Work it out in advance. Then, put it in writing. Get a lawyer to help you craft a document detailing what will happen if the company grows or if the company goes bust or is sold.

In any event, if you're raising capital, highlight the skills, talents and experience of the management team in all your pitches. That is your key to success.
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