Il Sole 24 Ore – 13 gennaio 2012

Prove di società semplificata a responsabilità limitata senza l’intervento del notaio. Nelle bozze di decreto sulle liberalizzazioni, questa nuova forma societaria sarebbe riservata alle persone fisiche che alla data della costituzione non abbiano compiuto i 35 anni. La società può essere costituita con una comunicazione in via telematica al Registro delle imprese.

Gian Paolo Tosoni

Prove di società semplificata a responsabilità limitata senza l’intervento del notaio. Nelle bozze di decreto sulle liberalizzazioni arriva infatti l’articolo 2463-bis in aggiunta alla norma del Codice civile che regola la costituzione delle società a responsabilità limitata. Questa nuova forma societaria sarebbe riservata alle persone fisiche che alla data della costituzione non abbiano compiuto i 35 anni. La società deve conservare una compagine sociale giovane, in quanto al compimento del 35esimo anno il socio è escluso di diritto dalla società (viene richiamata la norma codicistica che regola l’esclusione del socio per giusta causa). Il vantaggio di questa nuova forma societaria è che non viene previsto un capitale sociale minimo, ma solo la misura simbolica di un euro. Ovviamente questa circostanza indebolisce la società, che non avrà facilmente la possibilità di attingere capitali dal sistema creditizio; essa sarà pertanto destinata ad attività di servizio in cui non sono richiesti particolari investimenti. Un’altra semplificazione è la costituzione senza l’intervento di un notaio, ma solo mediante la comunicazione unica telematica al Registro delle imprese. La bozza esonera dal pagamento dei diritti di segreteria e di bollo. La costituzione deve risultare comunque da un atto nel quale vengono indicati gli elementi previsti dall’articolo 2463 del Codice civile, oltre all’attestazione del possesso dei requisiti di età e l’ammontare del capitale versato. Inoltre nella denominazione deve risultare che si tratta di «società semplificata a responsabilità limitata». La norma prevede che si applichino gli articolo 2462 e seguenti del Codice civile in materia di Srl. Ad esempio, quindi, non vi è il rischio patrimoniale personale dei soci. Anche sotto il profilo fiscale questo nuovo soggetto giuridico rientra nell’ambito dell’imposta sulle società (Ires). L’esclusione al raggiungimento del 35esimo anno comporterà una forte rotazione dei soci, circostanza che può essere positiva per l’arrivo di nuove risorse umane, ma potrebbe causare la perdita di professionalità dopo che si sono formate e hanno caratterizzato la società. La norma non regola le modalità della liquidazione della quota, per cui si dovrà ricorrere alle regole generali (articolo 2473 del Codice civile); in sostanza il socio che ha compiuto i 35 anni, avrà diritto al rimborso della partecipazione in proporzione al patrimonio sociale. Ogni volta in cui un socio recede si dovrebbe quindi quantificare il patrimonio della società per la liquidazione. Tuttavia la norma prevede che al compimento del 35esimo anno è possibile evitare il recesso: in questo caso la società deve trasformarsi in una normale società a responsabilità limitata, oppure in società per azioni. Nella fattispecie, tuttavia, il socio assente o dissenziente ha diritto di recesso nei quindici giorni successivi alla trasformazione.

Source: http://icpressroom.wordpress.com/2012/01/13/start-up-senza-notaio-per-i-giovani/

Investors seek familiar investments that are analogous to companies that they admire. They would like to believe that you can be successful because you are like another company that has been successful. Therefore, when you create your business plan, base it on a successful, public company that is similar to yours. (Public is preferable, because you will have access to their business model.)

Here is how to build a 5 year financial model using this scenario:

1. Create A Model Based on Ratios

Find the company’s SEC public filing document (S-1). The advantage of the S-1 is that it reveals financial information for years prior to when the company went public.  These numbers will be useful in building your model.

Make sure they are similar to yours in terms of business model, potential margins, capital efficiency, human capital costs, etc. Ask yourself if you can rationalize those kind of margins and other important financial ratios. If the answer is yes, then that is your model

2. Unit Economics and Drivers

Use unit economics, which include revenue per customer sale, customer acquisition cost, cost of goods sold (COGS), number of employees, and cost per employee.  Include how the revenue and cost drivers change with scale.

3. Determine Your Realistic Top-Line Revenue 5 Years From Now

Size the market. What is the total addressable market for your product? How many potential users? What can you charge? How much of that market can you realistically expect to capture in 5 years?

4. Create a 5 Year Plan

Using the 5 year revenue number, apply the ratios from the model to determine what your financials would look like in year 5. That includes revenue, salaries and bonuses, COGS, marketing, number of employees by department, etc.

5. Create a 1 Year Financial Plan

Build a bottom-up plan based on what you believe you will do in year one based on your knowledge of how many people you must hire, what equipment you will rent and buy, customer acquisition costs and revenues.

6. Fill in Years 2 – 4

For each year after 1 and before 5, rationalize each line item to get to the model number of year 5.  In each succeeding year, you should make realistic changes to the expense ratios closer to the year 5 target.

Every experienced investor will discount your projections.  They will give your revenue projections a hair cut, and they will increase your expenses. The proverbial hockey stick is as much of a startup pitch cliche as a win-win, facebook-killing, thought-leadership, paradigm-shifting game changer. Yet the key to execution of a plan is to have one. The key to reaching a goal is to set one. This method enables an entrepreneur to sign up for a target and monitor progress against that target. Having a sound financial vision based on a model company allows you to set goals, monitor progress, and adjust to reality.

A company should build a financial plan based on a target model whether they are pitching for venture capital or just trying to execute a plan.  Without a model, you don’t have a destination and without a destination, you’ll never know whether you got there.

In the days before brand management entailed extensive online efforts, companies and corporations had things a bit easier. With television, printed press and radio being the 3 biggest media platforms before the internet, big companies could simply dish out their big bucks for positive brand advertising, press releases, and radio commercials. These companies had much more control over combating negative events. Brand name rivals rarely could get away with random slander and libel. Companies could usually recover quickly from a “shocking” news story, bad review, or even a televised, hour long 20/20 investigative story – like the behind-the-scenes story that revealed the horrible health code violations of Pizza Hut and other chain pizzerias in the 90′s.

Did that 20/20 story sink Pizza Hut’s business – then or now? Obviously not, since it is still going strong. However, the internet is a much different animal. Negative events can happen anytime, and are largely out of a company’s control. Can a brand control if and when there will be reputation-damaging blogs and articles that start popping up in the search results of their brand name? Can they control whether or not consumers read those damaging blogs and articles, and decide to take their business elsewhere?

These kinds of factors about internet search and search results make online brandreputation management critically imperative. While it can take effort to boost a company’s SERP ranking, it takes much more effort to combat top ranking negative or damaging search results attached to a company brand name. Any business owner can panic when a Google search of their brand name returns first page results with even a few articles, blogs, or social media content that directly or indirectly advises users against the brand. Even a top ranking positive blog or review can be overturned if the comment section is filled with heated, angry comments -whether true or not.

Below is a review and discussion about online brand reputation and brand management, and how SEO plays a major and necessary role. The following discussion will also identify strategies for online brand management, and the various ways negative or damaging content makes its way into top ranking SERPs. Once negative or harmful content is identified and researched, then a company can begin to use online reputation and brand management to combat the negative content. In addition, the following will review negative Google Suggest terms that can severely damage a brand name – such as “brand name + scandal.” Lastly, you’ll find below how to identify and implement approaches and strategies that can turn brand reputation around.

Brand Management Online and How SEO is Important

If you are still being schooled on the topic of SEO, then you probably wonder, like many others – what does SEO (Search Engine Optimization) have to do with brand reputation and management? Well, in a word – everything. Without upkeep of SEO implementation, no matter how beautiful or valuable your company brand, or how much your website sparkles of potential high conversion rates – if SEO does not make your site visible, and can’t be found through search – then online brand management will not get very far.

As search users, we consciously or subconsciously assume that brands, companies and services found at the top of search results are the most successful in their field, business or industry. Those who are placed there obviously have good SEO methods, or else they wouldn’t be there. In order to manage an online reputation, you first must have one – which means consumers and customers must be able to find you. Without visibility, good SERP rankings, and a little buzz within appropriate, relevant online platforms – brand reputation management is nonexistent, because there is no reputation. SEO must be the first step for any company’s online brand reputation management.

Additionally, the very meaning of online reputation management is to maintain a positive image of your company or brand name on the web, and to combat negative events as they arise. This can only be done through SEO methods. The content from links found on the first several SERP listings, is that which people not only read, but also tend to trust or believe. They are equivalent to current affairs, daily news and conversations. What is on the first page of search results for any given search is what will shape user public opinion about the topic or subject of the search. If “Jane” conducts a search for “best online shoe store” – the first ten results are going to shape Jane’s opinion about the best place to buy shoes. The same will be true for related search terms like, “best shoes online,” and “best shoe e-store.” A smart online shoe company will optimize all relevant keyword phrases possible, which gives them a better chance at consistent high ranking in SERP for all relevant searches for online shoe purchases.

The same applies to your business or company brand name. By maximizing keyword phrases related to your brand name, while also keeping highly competitive keyword phrases at a minimum, even smaller businesses can work their way up to optimum SERP rankings for targeted search terms. However, it’s important to remember that SEO is an on-going, constant necessity for any website to maintain visibility and good search engine rankings. Just as brand reputation management requires efforts of consistency, so do the tools and methods that establish that reputation.

Rival Tactics and Disgruntled Consumers

Unfortunately in today’s competitive market and economy, some businesses use unethical and underhanded approaches in attempt to steal consumer brand loyalty. This can be done all too easily, with the amount of blogs that have open comments, and social media steadily gaining influence in SERP.Unethical methods for defaming a brand name frequently include posting malicious, untrue, or otherwise damaging comments on any number of blogs, which are then linked back to high profile sites, with an anchor text to the blog such as ” scam.” When enough of this term becomes searched for and found in search results, something very damaging can happen: Google will list that term in their suggestion box as a user types the brand name. More on that will be covered a bit later.

Other methods that circulate negative content for a brand name is when just one or two disgruntled consumers – which every business is bound to have – write negative reviews, post blogs or use social media to spread their dissatisfaction. This can often spread very quickly, given the nature of the internet. It spreads all the faster when users publish negative content on social bookmarking sites and microblogs like Digg, Tumblr, Del.icio.us. – this often causes the company to lose even more business. Even more destructive is when a rival will as far as to create one or even many social media pages solely dedicated to slandering a brand name, disguised as disgruntled customers. Is this legal? No. But given the anonymity of the internet, most usually get away with it.

So, how does a business neutralize all that negative content out there, especially when it ranks high in SERPs for the company brand name search?

A good way to explain the answer is through example and step-by-step solution.

Google Suggestion and Its Risk to Brand Management

Brand name companies often face a severe problem and lose business due to the Google Suggestion box. For example, when “scandal” or “scam” are one of the first Google suggestions given when a brand name is typed in – this can quickly build negative circulation.

This is not to say that Google suggests these terms to purposefully harm the reputation of certain companies. “Scandal” would not appear in the suggestion box if it were not typed in by users. Brands do not necessarily have a lot of search users that are searching for “Company-Brand-Name + Scandal”- but at some point, all it takes is just enough to make it into the suggestions box. And, if enough rival competitors know this, and are willing to use dirty methods, they can even potentially help that suggestion along. Once the term “scandal” is in the Google Suggestion as the brand name is typed, users usually click on the “scandal” suggestion simply out of curiosity. This in turn, raises the “scandal” suggestion to the highest term, because Google interprets the increased number of clicks on that suggestion as being the most relevant related to the brand name. When consumers start to type the brand name into Google search, and they see “scandal,” as the top suggestion, many of them will click on it. As a result, they are scared away from the purchase or the company business.

Online Management of Negative SERP Content

SEO efforts in full force need to be applied in order to take back control of brand reputation and management.
The way to do this is to carefully examine all aspects. Begin with what needs to be changed. While most people might start planning how to remove the word “scandal” from Google suggestion tool, this would entail a ton of effort, take a lot of time, and in the meantime the business will continue to suffer – and even then simply removing the suggestion word “scandal” may not necessarily be the best fix.

Instead, focusing on what appears in top ranking SERP for the search “Company-Brand-Name Scandal,” is an approach that allows for much more control over what users find under the term “scandal” when it is attached to the brand name.

Since company brands tend to be high ranking to begin with for their target terms, it means they already have pre-existing content online to work with. In addition, new content also needs to be added strategically.

Using Pre-Existing Content for Re-Establishing Brand Reputation Management

Examples of pre-existing content that can be used to target and optimize for the “Company-Brand-Name “Scandal” keyword phrases are:

- News articles and positive high-ranking reviews

If the company has been reviewed or mentioned in a news article, even though the article does not contain the actual target keyword, creating an anchor text from additional high-ranking sites to the news article, can often be enough to get it ranked within the top 20 results.

- Blogs

Inevitably brand companies will already have one or more blogs devoted to any number of niches and subject areas. However, this also includes any positive blog posts that also have zero negative comments, or better yet, have comments disabled. This prevents any negative comments from being made to a top ranking result in the future.

- Sub domains

It is possible that a brand may already have sub domains. If not, sub domains can be created to either address the accusations or negative events directly, or indirectly with keyword optimization. The best approach is probably the former, so as not to feed any “cover-up” stories.

- Wikis

Not all companies will have their own wiki page within an industry niche, but this is a very good content source in the case of negative content circulation. It may be a good idea to be proactive and have an industry or niche wiki page created for your company, so you’ll have this among your arsenal of SEO tools. By inserting the target keyword phrase naturally into the content of the wiki page, you’ll easily have another positive link that ranks high in SERPs.

- Social media pages

This can also fall under new content as well, depending upon the approach. While new Tweets and statuses would be considered “New content,” if there is business page set up under Facebook, this can be used to address the issue and use the target keyword phrase, and also be part of the interlinking system. Social bookmarking sites and microblogs can also be used to reinforce positive websites and use for interlinking.

New Content to Use for Brand Reputation Management

- Website Content

This is the most obvious tool for optimizing the negative keyword phrase, since Google usually places brand name website at the top of SERP for a brand name search. Generating good quality articles with information and naturally used target keywords is the best approach.

- Articles and Article Directories

Some webmasters may be reluctant to use eZineArticles, Squidoo and Hubpages since the Panda updates. However, if good quality articles have been consistently published on these sites in relation to the company brand name, there is nothing to fear. Using unique articles for each article site, and natural use of the keyword phrase(s) is the best approach.

- Create New Sites

By creating other sites with a .org and .net address – such as http://www.Company-Brand-Name.org, they can be populated with as much new content regarding the negative keyword phrase as necessary. It may even be a wise idea to create website pages with the target phrase in the URL, such as www.companybrand.org/company-brand-scandal.php. This is especially the case for a .org site, since Google seems to gravitate toward .org domains over some others.

- Social Media

If a brand name is popular enough, they just may be able to use social networking to turn the scandal around into something that reflects upon the company positively. For instance, if a company can begin a campaign against libel and slander on the internet, it just may catch on enough for the brand to win back its audience and reputation. While it may not become a viral sensation, it could be enough to not only reinforce positive brand name search results, but it could also initiate other positive searches that include the brand name, and potentially help push the “scandal” suggestion down to a less visible ranking.
As a proactive approach, social media should always be used to circulate positive efforts being made by the brand, whether through charities it supports, awareness campaigns, or other positive groups that can be populated and built quickly. These efforts can combat negative content proactively and successfully, when the right approaches are used.

- YouTube Videos

This is a fantastic way to promote positive information and content about a company brand. This can also fall under both existing and new content to use in SEO methods, because old videos can undergo content moderation, and new videos can be posted. Be sure to include plenty of text with the video that contains natural use of the targeted phrase, so Google can index the video.

In regards to YouTube videos, they must also be monitored the same way search results are. Because any brand, large or small, can be attacked at any time, it is important to keep an eye on YouTube videos. For example, KFC has been the subject of many, many negative YouTube videos, which film everything from dirty health violations to cruel treatment of chicken, and employee scandals to irate customers. Due to the sheer volume of negative videos, this is a prime example of bad online reputation management, and what not to do. Again, it is wise to be proactive, and publish a few videos once in a while that portray the brand in a positive light, while also monitoring the videos others publish about the company or brand.

Results

When these strides are taken through an aggressive SEO campaign, to combat negative events and content about a company brand which circulates the internet, the negative content is pushed farther down in SERP, while positive content replaces it – even when that “scandal” suggestion appears with a typed search for the brand. By replacing good, positive content for the keyword “Company-Brand-Name Scandal,” the company then regains control of online brand reputation management. It is in this way that SEO is vital not only to regular brand reputation management, but is also the main weapon of defense against damaging content and loss of business.

Unfortunately, small business owners believe a lot of myths about how to run their companies. These are things they assume to be true, but when put into practice, simply don’t work. Here are the top ten business myths, and the truth about each of them.

1. The customer is always right. If the customer was always right, every company would be out of business! Running a business at the whim of the customer will never lead to a profitable company. However, since the customer is always the customer, it is important to see things from their point of view, listen and empathize. The next step is to firmly set their expectations from the start so they will be satisfied at the end.

2. Build it, and they will come. This is not the Field of Dreams! Just because a founder builds it does not mean customers will line up to buy it. The corollary to this myth is that customers will always buy the best product. Success in business is really about building the best distribution and marketing for the product. This is where so many business owners forget to focus.

3. Sales is the most important number. Nonsense! In measuring financial performance, sales are vanity, cash flow is sanity. It makes no sense to grow the sales of a company if they keep losing money over a period of time. Is there less money at the end of the month than at the beginning? Fail! Successful small business owners focus on cash flow and know how to read their cash flow statement.

4. Team work is about building consensus. While the success of the company does depend on building a great team, let’s not get confused. Steve Jobs  always said that consensus is not the same thing as collaboration.  The leader sets the direction and the team needs to be able to effectively work together to accomplish that objective.

5. The financial numbers can be outsourced. No they can’t! Financial statements are the company’s score card. If an owner does not know where they have been, how can they know where they are going? Profit and loss, balance sheets and cash flow statements need to be reviewed and understood every month.

6. Customers only care about low prices. Some of the best companies in the country deliver low price and great customer service—like Wal-Mart, Southwest Airlines and Costco. Since most things are a commodity, small business owners will not be successful competing on price. They need to focus on the value their solution brings to solving the pain of the customer.

7. Under-promise and over-deliver. The myth is that if a company sets the expectations of the customer low, and then subsequently exceeds them, their satisfaction goes up. The truth is that if the expectations are set too low, the company will never have the opportunity to get or retain that customer.

8. Success is about making money. Sure, it’s one of the ways to keep score, but if the small business owner focuses on only getting rich, then he will never achieve it. Build value and cash flow from the company, and the financial rewards will always come.

9. Spend money to make money. The truth is that too much money can actually make the business owner stupid! Throwing a lot of money at a problem is proven to be wasteful and not an answer to any solution. Spend money carefully and measure each investment’s results.

10. Be active on all social networks. The truth is that social media can be a world wide waste of time. The small business owner should find out where his customers' and prospects' conversations are happening. Then, focus consistently on that social media tool to become part of that conversation.

The reason many small businesses fail isn't lack of capital or experience. And it's certainly not a lack of hard work. Most businesses fail because they don’t have a systematic and reliable way of attracting a steady stream of qualified leads.

To make sure this doesn’t happen to you, avoid the five most critical and costly lead-generation mistakes entrepreneurs make:

1. Not speaking directly to your core customers

So many ads never identify the prospect. People seem to expect qualified prospects to just show up. If you want to attract a specific kind of customer, you have to flag them down. A simple headline like this works wonders:

“Attention, Executives Earning More Than $500,000 A Year: Here Are 7 Things You MUST Know About Protecting Your Assets In 2011!”

Just like you can’t attract trophy-sized bass baiting your hook with a ball of bread, you can’t attract great customers with vague messages.

2. Trying to do too many things at once

When speaking to prospects, you should be trying to generate a lead OR make a sale, but not both. With rare exception, no one’s going to buy from you the first time they meet you. If you try to introduce yourself AND make a sale all at once, nothing happens.

You’re far better off generating a lead and then, over time, creating a relationship. The best way to do this is to consistently educate them and make them a better consumer of whatever it is you’re selling.

Since most entrepreneurs aren’t interested in working with customers who are only going to buy one time, there really is no upside to the quick hit. You’ll make much more money and your life will be much easier working with a loyal fan base who will buy from you repeatedly.

3. No call to action

Grab any newspaper or magazine and look at the ads. They say things like “Investments, Retirement, Annuities" or “Microdermabrasion, Facials, Skin Peels.” Then they give you a phone number and a photo of the smiling owner in the corner. Who cares? The answer is: No One!

To generate qualified leads, you have to let your prospects know what you want them to do. Do you want them to go to your website to get a free report? Do you want them to “Come in between 5 p.m. and 7 p.m. this Thursday to sample wines from Australia”?

You MUST have a call to action. Otherwise, you will get the same response most people get when they run ads or try and generate qualified leads: zero.

4. Not putting out a strong offer

It doesn’t matter what you’re selling: the sweeter the offer, the better the response. Your job here is to make your value proposition appear to be heavily one-sided, in favor of your prospects, of course.

So don’t say things like “Come in for your free consultation.” There isn’t a person in the world who doesn’t see that as anything other than what it is: an opportunity for you to try to convince them to hire you.

If you instead offer a “Free Thorough Physical Fitness Evaluation: Find out how old you really are!” then this is a tangible offer that has a perceived value and offers benefits.

"Selling” the freebie is even more important in many ways, because people think free means worthless or that there must be some kind of a catch. So you really have to work on building up your value proposition enough so a qualified prospect will at least say, “Sure, I’ll bite.”

5. Talking about features instead of benefits

If you’re speaking about the features of what you’re selling instead of the benefits, you're alienating your prospects. Features are what something is, but benefits are what something does for you.

Here's an example, using the hot topic of SEO (Search Engine Optimization). If you look up SEO on Google, you'll see roughly 473 million results. Look at the first few paid advertisements for this search, and here are some of the words these websites are using to sell their services:

• “… the largest, most experienced SEO centric search engine marketing company in the World”

• “…employs a team of highly trained SEO specialists”

• “analyze your competition's SEO efforts…”

Forget that this sounds like it was written for robots, by robots. Where are the benefits? Simple things like: “get more qualified leads”or “outsmart your competition, instead of outspending them”or “raise your net profits and your net cash-flow.” Buyers do NOT care about your features. All they care about is what’s in it for them.

There is an ongoing debate about the need for a business brand versus a personal brand. After reviewing current literature and crowdsourcing colleagues, the consensus seems to be that you need both – a clearly defined business brand and a compelling personal brand.

A personal brand is essential from the start, but what is the process for crafting a personal brand statement when you are in the introductory stages or even the launch stage of a new business? Don’t you need to know what people are saying about you before you develop a personal brand? Here are some steps to take do develop a personal brand statement from the very beginning.

Start With a Situation Analysis: Define Your Values, Attributes and Passions

First, look internally. What attributes do you bring to the market? What are you passionate about? I use an exercise called the “Values Game” with my students to help discover the value they add to the classroom, and later, to their employer. Use this process to uncover your distinguishing attributes and passions.

• Using a PostIt note, brainstorm and in five minutes, list every personal attribute, value and/or passion that comes to mind. Put one descriptor on each piece of note paper. Challenge yourself to write consistently for the full five minutes without stopping. Aim for quantity in this exercise. If you need help coming up with ideas, scan some websites that list values before you start the activity.
• Sort through your values, attributes and passions and narrow the list to the 12 characteristics that best represent who you are and what you offer to a potential employer or client. Throw away the other notes.
• Narrow the 12 concepts to five. Write the five on a sheet of paper. Next to each, write your definition of the value, attribute or passion and actions you can take that express it.
• Narrow your list to the top three. Imagine that you are known only for these three qualities and no others. These are the three qualities that will represent you, the core of your personal brand.

Plan for the Business You Want to Represent

Your external scan should be forward-thinking. Consider the advice given to interviewees, “Dress for the job you want.” This idea is transferable to your personal brand. Don’t just think about the introductory stage of your job search or your new business. Who do you want to serve five years down the line?

• Use the Internet to research what customers are saying about your competitors.Remember to think about your competitors both now and in the future. What do customers complain about? What makes them loyal? Make a list of the ways your personal qualities (see step above) will help you exceed customer expectations.
• Contact people you’ve done business with in the past and cross-check your ideas against their assumptions and perceptions. You may be at the beginning stages of launching a new business, but you’ve had a history as a professional. What do you know about how people see you? I recommend a tool like this free Johari’s Window tool. By clicking on the values you’ve identified for yourself and then sending the questionnaire to anyone you’ve done business with, you’ll discover two things: First, how well your conscious view of yourself matches those of others, and second, attributes or qualities that you weren’t aware of.
• Gather data from an ad-hoc advisory group through a survey tool or  an informal focus group. Identify the baseline, above-average and exemplary needs of the customers and other stakeholders you will serve in your business. Break your questions down by stakeholder group (community, customer, employee, etc.) so you receive a complete picture of what it takes to succeed in your market.

Perform a Gap Analysis

Put simply, where are you now compared to where you want to be? Plan to bridge that gap using the three qualities you identified as the basis of your personal brand. How can your passion for what you do take you where you want to be?

Determine if there are areas of strength of which you were unaware. What strengths did your contacts see that you did not? How will you use the three elements of your brand to incorporate these strengths into your brand statement?

Identify how businesses want to be served in your industry now and in the future. How do you deliver that value in a way that is purely you?

Write Your Statement

Now, put it all together. As you draft and refine (and refine and refine) your personal brand statement, keep the following in mind:  What will you do?  How will you do it?  Why do you do it?

Here’s an example of how I thought through my personal brand statement. You’ll notice from my biography that it is not my job description or title.

What will I do?: Create a business graduate that is excited about their role in the marketplace and the value he/she offers
How will I do it?: Through a globally focused, rigorous education
Why do I do it?: I am a passionate educator with the needs of my most important customer, the employer, in mind

My personal brand statement is, “I inspire passion for business through rigorous, globally focused education.”

Keep it focused and concise, and you can use your personal brand in all your networking opportunities, whether face-to-face or online.

Craft your personal brand as close to your business plan as possible; don’t wait for others to anchor your value to the market based on externally produced perceptions. Approach the development of your personal brand as you would a strategic plan for your business. However, remember that your personal brand is not a product or service. Your unique qualities and value to the market are what make your personal brand, so focus the planning on you during this exercise.

The Final Word

This may seem like an involved process when you’re busy working on getting your business operational–but it’s important to take the time to do it. Crafting a personal brand has many benefits. It allows you to make decisions about what projects to take on and what tasks to prioritize, because if it doesn’t fit your brand, you don’t need to do it.

1. Discount your core product or service

There are likely products and services from your business which many of your current consumers depend on. Discounting them simply offers your existing customer the same thing at a lower price—a sure recipe to fail. Instead, find products and services that have a higher margin where you can afford to lose some money initially, but will make it back if a customer gets hooked on that product.

2. Sell a longer term product or service

If yours is the kind of business or service that the average consumer might do only a couple of times a year, like hair coloring, that may not be the ideal thing to offer a deep discount on because you will have effectively lost your one chance to interact with that consumer for months.

3. Offer a forgettable discount

While the simplest thing to do may be to offer a coupon where a consumer spends $10 to get $20 of spending power with your business, the reality of a promotion like this is that it is completely forgettable. Instead, if you can tie a promotion to a part of your business—such as offering 3 rounds of golf for $81—it can be much more memorable for consumers who choose to take advantage of it.

4. Focus offer on the item and not your brand

When writing up the offer that you will present for consumers, a common mistake is to only focus on describing your offer without doing a good job of selling your brand along with it. You miss a golden opportunity for building brand recognition among local consumers—presumably a major goal of why you would do the Groupon in the first place. Instead, make sure you try to use a real photo instead of a stock image, include links to positive online reviews, include links in the body of the description of your business and generally do a better job of talking about why your business would be a great one for the consumer to choose not only for this promotion, but in the future as well.

1. Pitusa

Pitusa (pitusa.co.uk) is an internationally influenced, eco-friendly, boho-chic brand in the era of globalization, dedicated to always bringing comfort, quality and originality. With a shortage of choice in the eco-friendly clothing market, especially those tailored towards comfort and cost effectiveness, Pitusa intend to make their mark strongly. The company actively promotes fair trade, fair wages and global business development and pride themselves onkeeping synthetic materials to a bare minimum. Be green or be natural.

2. FlyKly

It seems the future is arriving on two wheels.

There is a revolutionary electric bicycle zipping through the streets of downtown NYC thanks to the efforts of Soho-based startup FlyKly (flykly.com). This stylish new e-bike allows the user to explore their environment easily, enjoyably and above all, simply. The FlyKly allows the user to travel 1,000 miles for a single dollar of electricity! Beat that for value.

3. Lufa Farms

Lufa Farms (lufa.com) is the first commercial rooftop greenhouse in the world. This 31,000 square-foot experiment produces fresh vegetables, year-round. Through a membership system, where people can pick up same-day picked produce at specific drop-off points throughout the city, it’s attempting to revolutionize every day eating.

4. Shakespeak

Shakespeak (shakespeak.com) is a software that facilitates direct interaction during presentations between the speaker and the audience. Once a speaker asks a question, the audience responds anonymously through their mobile phone, using text messaging, [mobile] the Internet, or Twitter. Results appear immediately on the screen and from there a dialogue can take off.

5. Bloomtrigger

Bloomtrigger (bloomtrigger.com) is a pioneering a new, visual model of online fundraising which empowers people to help protect the rainforest in a simple, affordable and creative way. ‘The bloomtrigger project’ brings together individuals, businesses and primary school children enabling them to support local forestry communities on the ground by promoting sustainable development and environmental awareness.

Deforestation accounts for one fifth of global carbon emissions responsible for climate change; the single biggest threat facing our lives and our children’s future. Put simply, the bloomtrigger project shows children a concrete example of how they can use the latest digital technology to collaborate and engage their community, in order to tackle the big challenges they will face in their adult lives such as the effects of climate change over the coming decades.

6. Spotless

Spotless (iamspotless.com) are the winners of London’s Start-up summer hosted by YouGov with University College London and Imperial students. In just 6 weeks, with £2,000 at their disposal they managed to design a concept and product, focused on the app-world and skin care, that persuaded a judging panel and venture capitalists that their company had the best potential. Urban Times had the chance to speak with their team members to learn not only about their concept but their business model, their motivation, and the future of Spotless.

7. The Charging Point

If you are keeping up with your car industry reading, you would have probably run into the acronym “EV” and snippets about the Nissan Leaf or Tesla Motors. Yes, the electric car is back – and trying to stick. Consequently, there is a plethora of information out there on EVs. How can one make sense of it? Is there a one-stop shop to educate yourself on the subject? TheChargingPoint.com is the best online destination for all the latest electric vehicle news, reviews and comment.

8. Assemblage

Assemblage (assemblagerestaurant.com) is a restaurant that has recently graced the East London scene in the heart of Shoreditch. The brains behind the company are Alicia Whitby who uses her history of art background to come together with James Knight Pacheco’s apt for cooking to ensure that the food served there is climatic not only on the taste buds but in its unique presentation. They have a strong CSR agenda in place so that they offer local British food which compromises neither on quality nor sustainability. The aim is to provide an experience for the diner so that all boxes of taste, atmosphere and decor can be ticked. With hopes of achieving Michelin Star status Assemblage’s movements are certainly one to be watched this year by foodies and non-foodies alike.

9. Rapanui

Having just won the RSPCA award for Innovation in Fashion, Rapanui (rapanuiclothing.com) is an eco-fashion label that is pushing the boundaries for casual wear which not only exudes style but also promises sustainability. With its eco-labeling and traceability functions; these ensure that all garments are not only made as ethically as possible, but that the consumer knows how and where they are made: from the seed being sown, picked, spun, sewn and transported. Having submitted a proposal to the EU, Rapanui might change the face of fashion forever if eco-labeling becomes imperative for all suppliers. Urban Times spoke with the founders, brothers Rob and Mart Drake Knight, to find out more about the future of Rapanui, and how it originated.

10. Growington

Growington (growington.com) provides a food-mapping system which allows the public to track locations of where food is being grown. The idea is to promote the sharing, swopping and trading of vegetables within local communities by sharing photos and encouraging discussion of different herbs, fruit and vegetables. As this paradigm becomes a contagion Growington hopes that cities can compete with each other based on how many food growing locations they have.

11. Skipso

Skipso (skipso.com) is an online platform and business to business marketplace entirely focused on sustainable innovation. By leveraging the power of the Internet they are in the front-line of propelling the Cleantech revolution forward. By creating an environment where ideas and opportunities can be exchanged they hope to accelerate innovation and bridge the gap between industry and academia by creating an alternative platform for collaboration and knowledge transfer. Skipso endeavours to facilitate the interaction of talented individuals and experts worldwide by providing them with challenging projects to work on. This work supports cleantech companies investing in innovation by giving them access to an expert community to outsource their R&D or sponsor cleantech innovation research.

12. Little Growers

Little Growers (littlegrowers.com) is a horticultural education community interest company working with schools predominantly in the UK but increasingly worldwide.  They provide a range of horticultural equipment, including environmentally friendly irrigation systems, to facilitate children in growing their own produce and understanding where food comes from. Little Growers began in 2008 from a passion in horticulture but also in response to the worrying trend of how disassociated children are becoming from where their food comes from and outdoor learning. Little Growers has also flourished internationally with projects in the Maldives, Japan, South Africa, Gambia and Thailand.  Once Little Growers provides the horticultural equipment, the school can facilitate and adapt the project to their curriculum however they think it best whether the produce be used in cooking lessons, running market stalls, supplying local cafes and restaurants or in science and art lessons.

13. Econogo Electric Scooters

British company econogoTM (www.econogo.co.uk) was formed in 2008 after a lot of obsessive thinking about one of those riddles that seem impossible to solve: “can we build a company that gives people something fun and is also good for our planet?” Now they launch their ‘yogo’; the UK’s first electric scooter that uses a fully detachable and portable lithium battery. For the first time, owners can remove and charge their battery like a mobile phone in their own home, or even at work, making electric two wheelers more suitable for busy lifestyles.

The new yogo (available in two options: a moped and an unrestricted 1500W motorcycle) offers a stylish and bespoke scooter that brings convenience to a market that has been slow to evolve as a result of incumbent fixed batteries. econogoTM has launched at a crucial time when there is strong consumer and political demand for greener alternatives to petro-engines. This, together with its cutting edge design, which offers much-needed convenience to businesses and fleets, will allow it to become a major player in the 50cc-100cc arena and re-shape the current market.

14. Brooklyn Grange

The Brooklyn Grange (brooklyngrangefarm.com) is a commercial organic farm located on New York City rooftops. They grow vegetables in the city and sell them to local people and businesses. Their goal is to improve access to very good food, to connect city people more closely to farms and food production, and to make urban farming a viable enterprise and livelihood. Currently, their one-acre (40,000 square foot) plot is the biggest rooftop farm in the world, but it is early days and they are looking to set up a second venture for which they will need investment.

15. The Startup Lab (SUL)

For the final episode of series one, we will be turning an eye to ourselves as we get ready to launch the new Urban Times vehicle, The Startup Lab (coming in 2012). As with this series, the SUL will spotlight companies that highlight the growing interface between strong entrepreneurship and social and environmental sustainability. We will feature interviews with today’s prominent entrepreneurs as well as those thought-leaders of tomorrow, and Tips for budding brains looking to become social entrepreneurs. As we delve into the challenges and benefits of “Profit with Purpose”, we will uncover the windy path towards a future where all business enterprise is tied directly into social good.

1. How to Program - I spent $100,000 of my own money (via debt, which I paid back in full) majoring in Computer Science. I then went to graduate school in computer science. I then remained in an academic environment for several years doing various computer programming jobs. Finally I hit the real world. I got a job in corporate America. Everyone congratulated me where I worked, “you’re going to the real world,” they said. I was never so happy. I called my friends in NYC, “money is falling from trees here,” they said. I looked for apartments in Hoboken. I looked at my girlfriend with a new feeling of gratefulness—we were going to break up once I moved. I knew it.

In other words, life was going to be great. My mom even told me, “you’re going to shine at your new job.”

Only one problem: when I arrived at the job, after 8 years of learning how to program in an academic environment—I couldn’t program. I won’t get into the details. But I had no clue. I couldn’t even turn on a computer. It was a mess. I think I even ruined people’s lives while trying to do my job. I heard my boss whisper to his boss’s boss, “I don’t know what we’re going to do with him, he has no skills.” And what’s worse is that I was in a cluster of cubicles so everyone around me could hear that whisper also.

So they sent me to two months of remedial programming courses at AT&T in New Jersey. If you’ve never been in an AT&T complex it’s like being a stormtrooper learning how to go to the bathroom in the Death Star where, inconceivably, in six Star Wars movies there is no evidence of any bathrooms. Seriously, you couldn’t find a bathroom in these places. They were mammoth but if you turned down a random corner then, whallah!—there might be an arts & crafts show. The next corner would have a display of patents, like “how to eliminate static on a phone line – 1947″. But I did finally learn how to program.

I know this because I ran into a guy I used to work with ten years ago who works at the same place I used to work at. “Man,” he says, “they still use your code.” And I was like, “really?” “Yeah,” he said, “because its like spaghetti and nobody can figure out how to modify it or even replace it.”

So, everything I dedicated my academic career to was flushed down the toilet. The last time I programmed a computer was 1999. It didn’t work. So I gave up. Goodbye C++. I hope I never see you and your “objects” again.

2. How to Be Betrayed. A girlfriend about 20 years ago wrote in her diary. “I wish James would just die. That would make this so much easier. Whenever I kiss him I’m thinking of X”. Where X was a good friend of mine. Of course I put up with it. We went out for several more months. It’s just a diary, right? She didn’t really mean it! I mean, c’mon. Who would think about someone else when kissing my beautiful face? I confronted her of course. She said, “why would you read through my personal items?” Which was true! Why would I? Don’t have I have any personal items of my own I could read through? Or a good book, for instance, to take up my time and educate myself? Kiss, kiss, kiss.

Why can’t they have a good college course called BETRAYAL 101. I can teach it. Topics we will cover: Betrayal by a business partner, betrayal by investors, betrayal by a girlfriend (I’d bring in a special lecturer to talk about betrayal by men, kind of like how Gwynneth Paltrow does it in Glee), betrayal by children (since they cleverly push the boundaries right at the limit of betrayal and you have to know when to recognize that they’ve stepped over the line, betrayal by friends/family (note to all the friends/family that think I am talking about them, I am not—this is a serious academic proposal about what needs to be taught in college)—you help them, then get betrayed – how to deal with that?

Then there are the more subtle issues of betrayal – self-sabotage. How you can make enough money to live forever and then repeatedly find yourself in soup kitchens, licking envelopes, attending 12 step meetings, taking medications, and finally reaching some sort of spiritual recognition that it all doesn’t matter until the next time you sink even lower. This might be in BETRAYAL 201. Or graduate level studies. I don’t know. Maybe the Department of Defense needs to give me a grant to work on this since that’s who funds much of our education.

3. Oh shoot, I was going to put Self-Sabotage into a third category and not make it a sub-category of How to Be Betrayed. Hmmm, how do I write myself out of this conundrum. College, after all, does teach one how to put ideas into a cohesive “report” that is handed in and graded. Did I form my thesis, argue it correctly, conclude correctly, not diverge into things like “Kim Kardashian will never be the betrayer, only the betrayed.” But this brings me to: Writing. Why can’t college teach people how to actually write. Some of my best friends tell me college taught them how to think. Thinking has a $200,000 price tag apparently and there is no room left over for good writing.

And what is good writing? It’s not an opinion. Or a rant. Or a thesis with logical steps, a deep cavern underneath, beautiful horizons and mountaintops at the top. It’s blood. It’s Carrie-style blood. Where everyone has been fooling you until that exact moment when now, with the psychic power of the written word, you spray pig blood everywhere, at everyone, and most of all you are covered in blood yourself, the same blood that pushed you out of your mother’s womb, until just the act of writing itself is a birth, a separation between the old you and the new you—the you that can no longer take the words back, the words that now must live and breathe and mature and either make something of themselves in life, or remain one of the little blips that reminds us of how small we really are in an infinite universe. [See also, 33 Unusual Tips to Be a Better Writer]

4. Dinner Parties. How come I never learned about dinner parties in college. Sure, there were parties among other people who looked like me and talked like me and thought like me—other college students of my age and rough background. But Dinner Parties as an adult are a whole new beast. There are drinks and snacks beforehand where small talk has to disguise itself as big talk and then there’s the parts where you know that everyone is equally worried about what people think about them but that still doesn’t help at those moments when you talk and you wonder what did people think of me? Nobody cares, you tell yourself, intellectually rifling through pages of self-help blogs in your mind that told you that nobody gives a sh*t about you. But still, why don’t we have a class where there’s Dinner Party after Dinner Party and you learn how to talk at the right moments, say smart things, be quiet at the right moments, learn to excuse yourself during the mingling so you can drift from person to person. Learn how to interrupt a conversation without being rude. Learn how to thank the host so you can be invited to the next party. And so on. Which brings me to:

5. Networking. Did it really take 20 years after I graduated college before someone wrote a book, “Never Eat Alone.” Why didn’t Jesus write that book. Or Plato. Then we might’ve read it in religious school or it would’ve been one of those “big Thinkers” we need to read in college so we can learn how to think. I still don’t know how to network properly so this paragraph is small. I’m classified under the DSM VI as a “social shut-in”. I’d like to get out and be social but when the moment comes, I can only make it out the door about one in ten times. I always say, “I’d love to get together” but then I don’t know how to do it. Perhaps because not one dollar of my $100,000 spent on not learning how to program a computer was also not spent on learning how to network with people. [See also, my recent TechCrunch article, "9 Ways to be a Super-Connector"]

6. Politics. My very first girlfriend, the girl who first laughed hysterically when I showed her a piece of chewing gum I found on the ground that had sculpted itself into the muddy shape of a heart, took me to a movie called “Salvador”. Then there was a discussion group afterwards about how the Contras are bad, or good, I forget, and everyone was nodding and speaking in a Spanish accent. And afterwards my girlfriend was upset, “why aren’t you talking?” Because truth was I was so tired I couldn’t think but nobody ever taught me how to tell the truth so I lied and said, “it moved me so much I’m still absorbing it” and my girlfriend said, “yeah, I can see that.” And nobody ever taught me that there’s more than one acceptable opinion on a college campus.

My roommate for instance would tell me, “Reagan is definitely getting impeached this time.” And I visited his dad’s mansion over Christmas break and he told me all about Trotskyism and the proletariat and I had to work jobs 40 hours a week while taking six courses so I could A) graduate early and B) pay my personal expenses and when I would run into him he had long hair and would nod about how a lot of the college workers (but not the lowest-paid, poorest treated ones—the students who worked) were thinking of unionizing and he was helping with that. “Do you have a job?” I asked and he said, “no time”. And that’s politics in college.

What about the real politics of how people try to backstab you at the corporate workplace or VCs never properly explained the “ratchet” concept to you before they kicked you out of the company and then re-financed. Nobody told me a thing about that in three years of college and two years of graduate school. I wish I would’ve known that for my $100,000.

7. Failure. Goes without saying they don’t teach you this. If you are going to pay $100,000, why would you fail? You might think you were wasting your money if the first mandatory elective you had to take was about failure. About wondering how you were going to feed your family after you got fired when something that was not your fault: Post-Traumatic-Lehman-Stress Syndrome, a common medical condition coming up in the DSM VII.

8. Sales. When I was busy learning how to “not program” nobody ever taught me how to sell what it was I was programming. Or sell myself. Or sell out. Or sell my ideas and turn them into money. Or sell a product to someone who might need it. Or even better, sell it to someone who doesn’t need it. Some business programs might have courses on salesmanship but those are BS because everyone automatically gets As in MBA programs so that the schools can demonstrate what good jobs their students get so they then get more applicants and the scam/cycle continues. But sales: how to demonstrate passion behind an idea you had, you built, you signed up for, so that people are willing to pay hard-earned after-tax money for it, is the number one key to any success and I have never seen it taught (properly) in college.

9. Negotiation. You’ve gotten the idea, you executed, you made the sale and now…what’s the price. What part of your body will be amputated in exchange for infinite wisdom. Will you give up one eye? Or your virility? Because something has to go if you are up against a good negotiator? What? You already thought (like most people without any experience do) that you were already a good negotiator. A good negotiator will skin your back, tattoo it with “SUCKA” and hang it up above the fireplace in his pool house if you don’t know what you are doing. The funny thing is, the best sales people (who are just aiming for people to say “Yes!”) are often the worst negotiators (“it’s very hard to say “No” when you are trying to get people to “Yes”). These are things I wish I had learned in school. I’ve been beaten in negotiations on at least five different occasions, which fortunately became five valuable lessons I’ve learned the hard way, instead of studying examples and being forced to think about it for the $100k in debt I got going to college.

People will say, “well, that’s your experience in college. Mine was very different.” And it’s true. You joined the sororities and learned how to network and dinner party and be political and know everything there is to know about betrayal. My college experience was sadly unique and probably different from everyone else’s so you would be completely right to quote me that inane statistic about how college graduates earn 4% more than high school graduates and are consequently 4% happier .

(Another thing, 10. Happiness. We never learn how it’s a combination of the food we eat, our health, our ability to be creative, our ability to have sound emotional relationships, our ability to find something bigger than ourselves and our egos to give up our spiritual virginity to.)

So I can tell you what I wish I did. I wish I had gone to Soviet Russia, and played chess, and then gone to India and learned yoga and health, and I wish I had gone to South America and volunteered for kids with no arms, and did any number of things. But people then say, “haha! but that cost money.” And they would be right. It would cost less than $100,000+ but would still cost some money. I have no idea how much.

But one of these days when the scars of college go away and I truly learn how to think. I might have better comebacks for these people. Or if I truly learn, I would learn not to care at all.

Starting out in business is a great moment for many people and even though the current economic climate is very harsh, people are still successfully making a go for their business dreams. One aspect for all start-ups to consider especially if you do not have large financial backing is to keep costs and overheads down right from the get go.

Watch Out For The Overhead

A large overhead has the ability to kill even the very best business ideas, furthermore large overheads create unnecessary pressure on your business and also your own personal life, so they need to be avoided at all costs. For example even Facebook as a business would have failed if they could not afford to keep the servers up in the first 12 months of their business.

Anyone who has already ventured into setting up their own business will understand this fact much better than any brand new business men or women looking to start out. Outlined below are a few fundamental pitfalls that you need to try to avoid and they could really help you maximize your first 12 month profits, which after all is the aim for all businesses large or small.

Necessities Come First

When you are first starting out whether it is with a very small budget or even with an investor, try to keep the overhead down by looking at what your business actually needs for the first 12 months. So for example if you can do a lot of your business over the phone and via email then you might not need a company car.

Also your business will more than likely need a web presence no matter what size of business you are but the first 12 months you might only need a small brochure website rather than a full blow e-commerce website which would cost thousands to develop and promote.

The idea is to decide what you business really needs and the best way to do this is to outline what you need and why you need it. If there is anything that you can make do without then do because all these costs soon add up and you can be many thousands down before you even start trading if you are not careful.

Do You Need An Office?

An office is a very big cost for a business especially in the first 12 months of trading, so you need to analyze whether you can operate from home initially because this could save you a large amount of money.

If you do need an office because of lack of space at home or for clients visiting you, then make sure you shop around to find the very best deal. Try to negotiate breaks in the contract term because the last thing you want is to be tied up for 3 years especially if you want to expand or downsize. If you do get an office and employ staff this means you will also need to look at health and safety procedures as well which can also bring with it additional costs.

Shop Around For Everything

One of the worst things you can do is to go with the very first quote you get for anything related to your business from offices, marketing costs, website design, to advertising options. As a business owner it is down to you to get the very best deal for any product or service you need and that means going for the best quality, most flexible contract and lowest price. Remember while getting the lowest cost is always a good target, do not compromise quality or your business and brand can suffer as a result of poor quality goods.

Collaborative consumption market places are everywhere: media, car rental, lodging, staffing, textbooks, apparel, custom graphic design and even finance. Netflix shares DVDs among a large subscriber base. ZipCar and GetAround make car sharing easy. Travelers rent a local's apartment for a few days through HomeAway and 9Flats. College students rent textbooks from Chegg. Moms exchange children's clothing on ThredUp. Graphic designers create beautiful paper products and fulfill orders through Minted. Short term borrowers find loans from a community of individual lenders on Zopa and LendingClub.

Loosely defined, collaborative consumption is a business model in which shared goods or services are distributed via a market place to a community of users. Collaborative consumption reshapes markets by changing supply and demand economics. These new market places shrink consumer retail demand. Each shared car eliminates five to 20 cars from circulation. A college textbook rented 10 times over its life will replace between five to seven new copies. At the cost of market size, reuse liberates the environment from excess consumption.

But these models also have the capacity to increase demand and the total market size by addressing new previously unaddressable segments. Netflix serves customers anywhere in the US by managing a single collection of movies and delivering DVDs through the mail. Blockbuster cannot compete with this model or serve sparsely populated, rural America well. The capital required to replicate video libraries across hundreds of additional stores is expensive and unprofitable.

Other collaborative consumption manage two sided market places and use the capital efficiency of these models to address larger, cost-conscious populations. HomeAway and 9Flats allow anyone to rent a room or an apartment to a traveler, typically at a lower price than a hotel. This offering is very attractive to a young, cost-conscious segment of the market and has the potential to cannibalize hotel revenues. In addition, the revenue generated for property owners is meaningful.

As a result of their transformative nature, collaborative consumption market places are rising to preeminence. Rachel Botsman and Roo Rogers recently published What's Mine is Yours, a global survey of collaborative consumption efforts. In the book, the authors extrapolate three categories of collaborative consumption:

1. Product-service systems enable products like DVDs, cars, books or homes to be rented;

2. Redistribution markets are exchanges for used items including clothing;

3. Collaborative living services broker relationships for individuals with service providers.

Spanning goods and services, rental and purchase, geographies and demographics, collaborative consumption is a pliable business model that can be applied to many sectors to great effect. Even the business model itself is evolving.

The first wave of collaborative consumption companies pursued business-to-consumer (B2C) go-to-market strategies. In this model, a company acquires, maintains and rents products. Zipcar buys, services and rents cars to members. Chegg replicated this model for college textbooks. But the costs of managing car fleets or a library of books are substantial. For example, ZipCar spent 71% of 2010 revenues acquiring and servicing cars.

Of late, peer-to-peer (P2P) collaborative consumption models are blossoming. P2P models are much more capital efficient than their B2C counterparts because they do not require any capital investment to acquire assets. Instead, they rely on a community to supply them, typically in exchange for a revenue share of the transaction.

P2P car sharing enables car owners to rent their own cars. GetAround, a San Francisco based company, operates a market place for P2P car sharing at a fraction of the cost of ZipCar. Car owners use the income from rentals to cover car payments and maintenance costs. A P2P system is much more efficient - fewer cars on the road that are used more often. Nearly everyone benefits.

However, P2P models are more complex than B2C. P2P market places are two sided exchanges and require careful management of demand and supply growth. As a market place grows and strangers begin to transact, eliminating transaction friction by building trust and quality metrics is critical. Similarly, ensuring consistent transaction experiences is essential to building brand and leads to word-of-mouth marketing. Lastly, each exchange must decide whether to guarantee customer satisfaction. While a guarantee will increase liability of fraudulent returns, this promise increases a consumer's propensity to buy.

A pioneer in P2P exchanges, ThredUp has built a community of tens of thousands of moms who exchange children's clothing. Clothing buyers rate the quality and style of the clothes and the data feeds a seller's reputation informing future buyers. ThredUp guarantees satisfaction to decrease initial buyer fear. With careful management, ThredUp has grown their P2P market place successfully.

Technology is the key enabler for this resource allocation optimization. Market places attract customers and build communities using the web. Social networks, proprietary and public, underpin trust among users. With Facebook, it's easy for a host to vet a potential apartment guest's identity, particularly if they have friends in common. When it's time to pay, mobile phones coupled to payment mechanisms, enable transactions to happen anywhere. Since technology enables this resource allocation shift, as smartphones and mobile payments reach mass market penetration in 2011 and 2012, the disruptive potential of collaborative consumption markets will only increase.

One of the biggest challenges when starting a P2P market is delivering initial market liquidity through customer education and brand building. Most successful market places have sought to replicate an offline behavior online. P2P exchanges lend themselves to close interpersonal reactions. Consequently, these market places resonate with customers for emotional reasons. Ask the mothers on ThredUp who wrap their donations in tissue paper before sending the clothes on to the next mom. Or the brides who work with a stay-at-home mom on custom wedding invitations on Minted.

As these markets develop, cost, convenience and selection scale adoption en masse. Why pay for two Tuscan hotel rooms during your family's vacation when you could rent an apartment from a local on 9Flats for less? Why buy a college physics book only to sell it a few months later when you can rent one for a semester? Why pick up a drab economy car at the airport when you can rent a fire red Tesla located just two blocks from your San Francisco hotel? This is the power of the model.

When applied to the right market, collaborative consumption market places effect dramatic changes. To date, the most successful efforts have involved digital currency (lending), goods that can be mailed (clothes, DVDs), time & cost sharing of expensive goods (cars, apartments and books) and services (graphic design, commodity labor).

With time, collaborative consumption market places will continue to grow in these segments. Because many of these services reduce market size dramatically, the most successful market places will need to pursue multibillion dollar markets to generate millions or tens of millions in annual transactional revenue. Services like transaction insurance, additional background checks, and paid-promotion for suppliers present additional, higher margin lines of revenue.

But the revenue models for these exchanges shouldn't be a concern. More interesting will be the incumbent retailers and manufacturers' response to successful P2P markets. I wouldn't be surprised to find automobile dealers offering their cars for rental on collaborative consumption market places. Or hotel chains acquiring apartments to rent them on P2P exchanges.

The ultimate beneficiaries of this competition and additional selection will be the consumer and the environment. Optimizing our resources will change the way we live. In 1900, 41 percent of the natural resources entering the US economy were recycled. Today, that figure is 13 percent. Meanwhile, the US population has increased 357 percent. We simply cannot continue on this path.

One of the best ways to return to a sustainable way of life is to maximize asset use through collaborative consumption market places. By providing economic incentives to maximize efficiency, binding large communities to shared causes and decreasing total consumption, collaborative consumption will become a keystone of a sustainable American society.

This post originally appeared on the MIT Entrepreneurship Review. 

Is your core business delivering disappointing margins and low growth rates? Are you unsure of the path forward to growing your business? If you think big investments outside your core are your only means to accelerate growth, think again. The opportunity for profitable growth may be locked within your core business. Here's how you can unlock that potential.  

Step 1:  Define and understand your core

You first need to identify your core set of customers, products and operations in the following context:

•    Which customers (or segments of customers) are most profitable? These are the people that are most likely to pay a premium for your products and services, most loyal, or most often looking for ways to build a stronger partnership with you.

•    Which products/services routinely command the highest premium, have a strong brand identity with your customers, or are most likely to help you "seal the deal" over competitors?

•    Which parts of your operation are most important to your competitive position, drive your differentiation in the marketplace, or give you a sustainable cost advantage?

To create a view of your core that is backed by facts, not existing biases or assumption, you’ll want to get as granular as possible. Look at the least profitable customer, product and region segments and challenge their inclusion in the core. Identify the most profitable segments and ask: Have we truly done everything we can to grow those segments? Then you can estimate the growth and future margin trends of your core by examining both the attractiveness of your underlying markets and your evolving competitive position in them.

Step 2:  Lower the waterline by restructuring high-cost operations

Restructure or get rid of high-cost operations that don't deliver well-differentiated products and/or highly valuable customers. This will help you to lower the "profitability waterline." 

Step 3:  Pare back your least profitable, non-core customers and products

Virtually every business has a set of customers and products (e.g., the bottom 20 percent) whose profitability is well below average. Ironically, growth efforts and investment are often focused around these segments, while the more profitable core is neglected.  

Ask yourself: If I were forced to eliminate the bottom 20 percent, what resources would that free up? Where else would I invest in the business to make up the lost revenue?  

This may require a radical re-thinking of the business, but a business that can pare back the bottom 20 percent is often in a much better position to drive profitable growth in the core.

Step 4:  Focus your growth efforts on your profitable core

Steps 2 and 3 will free up significant capital, which the management team then should allocate toward the most profitable core segments and operations. Ask yourself:

•    How can I better meet my core customers’ needs? How can I build a better partnership with them? 

•    How can I best supplement my core products and operations to extend my competitive advantage? What organic or M&A investments would strengthen my core?

•    What products, services and customers are adjacent to my core, and do they represent opportunities to expand my core?

This four-step approach can unlock significant profitable growth potential within the core, revitalizing what may have been perceived as a stagnant business.  

Karl Stark and Bill Stewart are Managing Directors and co-founders of Avondale, a strategic advisory firm focused on growing companies. Avondale partners with management teams and investors through consulting, M&A advisory and private equity investments. Karl, based in Chicago, and Bill, based in San Diego, have a combined 30 years' experience helping businesses achieve and sustain profitable growth. Their strategic and financial advice helps companies unlock the value drivers in their business and focus investment around the most profitable growth opportunities. Avondale, based in Chicago, is a high-growth company itself, and is ranked No. 95 on the 2011 Inc. 500 list.