Archive for the 'Exploration' Category

Am I Too Young To Be An Entrepreneur?

Topic: Analysis, Exploration, Helpful Ideas| 2 Comments »

According to a recent study by the Kauffman Foundation, the answer is yes. Kind of. By the way, if your aren’t familiar with the foundation, check them out NOW because they have tons of great resources for entrepreneurs, young and old alike. At any rate, I must admit I was quite surprised by the findings of their study on the correlation between age, education, and forming a tech startup. As you know, I focus more on the needs of student startups, but as it turns out they are the minority – even when it comes to technology based startups.

What does this mean for you and your pursuit of the next great student startup? A couple things, actually. First off, the findings of this survey suggest that you (and I) are well ahead of the game. The small business experiences we are endeavoring in will only further the chances of success in the long run. Think about it this way, most people wait until they are in their late 30’s or early 40’s to take the leap into entrepreneurialism – many of whom will fail for a variety of reasons. But by starting young, you benefit from the fact that failing is virtually meaningless (financially speaking). You can then learn from your mistakes and build upon your successes and failures so that your next venture will be that much more successful.

So take the study with a grain of salt and do not give up your pursuit of creating the next great startup! Class dismissed.

Interview with an Entrepreneur

Topic: Exploration, Helpful Ideas, Startups| Comments Off on Interview with an Entrepreneur

I was scouring my favorite small business blogs when I came across an interview with Raj Jaswa, an entrepreneur from Arizona. It was a quick interview, but packed with great advice, so I would like to share it with you. Enjoy the excerpt below:

Question: Given your experience and the entrepreneurs you’ve observed, what are the fundamental attributes of a good entrepreneur?

Answer: Entrepreneurs need to develop three skills, and they are very learnable:

First is networking. You have to learn to connect with as many people as you can. Be committed to building your Rolodex.

Second is education and learning. You have to really like learning and reading random stuff. Become knowledgeable, not in depth but on the surface, because you’re going to be working with everybody.

Third is accessing mentors and people you can learn from. The fewer bad decisions you make, the better chance your company has.

Question: What does the economic slowdown mean to entrepreneurs and Silicon Valley?

Answer: Boom times are bad because it can be hard for entrepreneurs to get access to engineering talent, space and people who will listen.

No recession lasts forever. It’s a business cycle. It cleans out bad habits and practices, and then you have a much better environment.

Question: Where do you see the emerging opportunities for innovators and entrepreneurs?

Answer: Opportunities come from seeing problems around you and in your lifestyle . . . that you would like to do something about. Instead of doing it as an employee or a volunteer, do it as a company. I recommend the book Built to Last. General Electric, Sony, they all started because the founders wanted to build a company.

That’s all for today, class dismissed.

10 Tips for Setting Priorities

Topic: Exploration, Strategies, Top 10| Comments Off on 10 Tips for Setting Priorities

As a student and entrepreneur, it can be quite tough attempting to juggle all of the tasks on my todo list.  Below are some great tips on setting priorities written by home office expert Lisa Kanarek.

  1. Use a paper-based, electronic or computerized list to keep track of your tasks, instead of relying on your memory.  A list will give you a clear idea of what you need to accomplish.
  2. Which tasks could you handle another day?  If you would face no consequences by moving a task forward, move it ahead another day or another week.  But be careful not to put it off too long!
  3. Know the difference between important and urgent.  Important means a task needs to be done, while urgent means it must be done immediately.  Knowing the difference between the two will make prioritizing easier.
  4. Realize that you can’t do everything.  This will help you to realistically prioritize your tasks.
  5. Determine if postponing the task would affect other projects you are working on.  Tasks and projects can have a domino effect.  If you do one task, yet fail to do another, you may have wasted effort on the first task.
  6. Set clear goals.  There’s a saying, “If you don’t know where you’re going, how will you know when you get there?”  By not setting clear goals, you may be accomplishing tasks with short-term benefits.
  7. Decide if the task will help you achieve your goals.  If so, give it a higher priority.
  8. Are you making a task a top priority because i’s easy?  Don’t be fooled by easy tasks, especially when they could be done days or weeks later.
  9. Focus on quality, not quantity of tasks.  Accomplishing a few tasks that are a higher priority is better than accomplishing several lower priority tasks.
  10. Which task will increase your income?  If the task will only serve to keep you busy, it is not a top priority.  Think in terms of how the task will improve your productivity and performance.

Part 2: The Complete Guide to Business Formation

Topic: Exploration, Startups, Strategies| Comments Off on Part 2: The Complete Guide to Business Formation

In the second part of The Complete Guide to Business Formation we will discuss Limited Liability Companies along with Corporations.  From there, you will have the opportunity to leave comments about what type of business you want to start and I will gladly help you determine which method of formation works best for you! 

By the way, if you missed Part 1, click here.

Let’s start off with a basic understanding of the types of corporations.  A corporation is a legal entity that keeps personal assets of the shareholders from the firm’s assets.  As you can see, this is a big step in the way of limiting your liability as opposed to sole proprietorships and partnerships. 

A Limited Liability Corporation (or Company – the terms can be used interchangeably with this type of formation) is an organization owned by the “members”.  With an LLC, the corporation’s assets can be seized; however they have no recourse against the shareholders’ personal assets.  The great thing about an LLC is that earnings can be taxed at the personal income tax rates of the members.  By the way, my company, Brett Adams Design is an LLC. 

A Subchapter-S Corporation provides limited liability for shareholders plus corporate income is taxed like personal income to the shareholders.  This is a great choice for a number of business types and may provide positive tax treatment, but does involve additional paperwork compared to an LLC. 

Now that we understand the types of corporations, let’s take a look at some reasons why incorporation makes sense for most people: 

  • You limit your personal liability
  • By placing Inc. or LLC. at the end of your business’ name, you clearly upgrade your image
  • To have the opportunity to channel some heavy expenses
  • It guarantees continuity, even after your death, if set up properly
  • You can offer internal financial incentives

At this point, between parts 1 and 2 you should have a basic understanding of the different types of entities.  Below, I’ve put together a list showing some of the associated attributes for each entity type including liability, capital sources, firm lifetime, and taxation. 

  • Proprietorship
    • One owner, with a short amount of time to set up and low cost
    • Unlimited liability
    • Most equity capital will come from the owner
    • Life of the business parallels life of the proprietor and transfer of ownership is difficult
    • Taxed at one’s personal tax rate
  • Partnership
    • Two or more owners, with a moderate startup time and cost
    • Unlimited liability
    • Capital sources include other partners, family, and friends
    • Life is determined by the partners and again, transfer of ownership is difficult
    • Taxed at partner’s personal tax rate
  • Corporation (C)
    • One or more owners, with a high cost and time to set up
    • Liability is limited to shareholders’ investments
    • Capital investments may come from venture investors and common stock shareholders
    • Business life is unlimited and ownership transfer is easier
    • Corporate taxation; dividends subject to personal tax rates
  • Subchapter S Corporation (S)
    • Less than 75 owners, with a high cost and time to set up
    • Liability is limited to shareholders’ investments
    • Venture investors & Subchapter S investors can supply capital
    • Unlimited business life and ownership transfer is moderately difficult
    • Income flows to shareholders; taxed at personal tax rates
  • Limited Liability Company (LLC)
    • One or more owners, with a high cost and time to set up
    • Liability is limited to members’ investments
    • Equity capital sources include venture investors and equity offerings to members
    • Business lifetime is set by the members, transfer is difficult
    • Income flows to shareholders; taxed at personal tax rates

Again, please feel free to comment with the type of business you are interested in starting and I’d be happy to offer my opinion.  Class dismissed.

The Complete Guide to Business Formation Part 1

Topic: Exploration, Startups, Strategies| 2 Comments »

This is the first part of a multi part series that I should have started long ago, and I apologize for not doing so.  This is more of a refresher course for some of you, but I feel it’s important to have this chronicled for those new to entrepreneurship.

When creating the next great startup, at an early stage you will come to a crossroads and must choose how to form your business.  Which option you choose will have a number of ramifications and each will be discussed in detail over the coming days.  There are four types of business formation methods that can be considered (although I wouldn’t recommend a couple of them).  Your choices are:

  • Sole Proprietorship
  • Partnership
    • General
    • Limited
  • Limited Liability Corporation
  • Corporations
    • C corporations
    • Subchapter S corporations

When deciding which is best for you, keep in mind some of the following:

  • Will I be conducting any business internationally?
  • Are there any tax implications?
  • What liabilities must I be aware of?
  • Might I be faced with litigation at some point in association with customers, employees, or other businesses?
  • What are my plans for future growth?
  • What types of relationships are present with potential partners?
  • Do I have a grasp on my capital requirements?
  • What is my exit strategy?

While pondering those questions, lets take a further look into proprietorships and partnerships.

A sole proprietorship is a business venture that is solely owned by an individual.  That person is also solely liable for any of the venture’s possible liabilities.  This means that you have a personal liability to pay off anything not covered by your assets.  Honestly, there are very few situations where this type of formation makes sense.

A partnership is a venture that is owned by two or more individuals.  Like the above, each owner is fully liable.  When we talk about a limited partnership, the limited partner is only liable for his/her capital investment. 

When considering a partnership, consider the following questions:

  • Who will maintain management and control?
  • What resolutions are in place in case of dispute?
  • Consider the financial and time contributions of each partner.
  • What occurs in the eventual dissolution of the partnership?
  • Can we add new partners?

Again, I don’t think I would ever recommend this type of formation either, but you do tend to see these – especially with professionals such as doctors and lawyers.

In the coming days we will discuss the other types of formations including corporations and LLCs along with suggestions on which type would be best for your type of business.  Class dismissed.

Visualizing Your Customers

Topic: Analysis, Exploration, Self Exploration| 1 Comment »

This is a quick tip I picked up in class recently, and I thought I’d share it with you.  It’s similar to other strategies I’ve discussed for different aspects of your small business, but in this case we’re applying the techniques to your target customer.  It’s pretty simple and even somewhat enjoyable.

By profiling your customers, things inevitably become easier.  You’ll even discover a few “invisible” customers you didn’t even know were lurking.  The technique I’d like to share with you involves building a target market collage.

  • Look through old general interest magazines, industry publications, and those you think your target audience would read.  Cut out twenty of so pictures, phrases, and quotes that seem to represent your target customer.
  • Come up with a list of your target customer’s favorites.  Include TV shows, movies, dining options, hobbies, mucic, books, URL’s, etc.
  • Combine these into a collage

Sounds kinda corny but it helps you to start thinking “outside the box” – opening your eyes to alternative thoughts about your target.  It’s also good to stimulate the “other” side of your brain for a variety of reasons.

Again, quick post today but I just thought some of you might be interested in giving this a shot.  Class dismissed.

Implementing a Niche Stategy

Topic: Exploration, Startups, Strategies| Comments Off on Implementing a Niche Stategy

Good morning Startup Students, today’s post will discuss ways to implement a niche strategy, regardless of the industy. The days of “build it and they will come” are over (think manufacturing industry of decades past). What you should really be thinking is,

“Find your customers and then build exactly what they want.”

If you intend to dominate, not merely compete in a market, you must develop a niche strategy. Here are some quick pointers.

  • Focus on a single market segment, don’t try to take down the 300 pound gorilla!
  • Emphasize a single product or service, you’ll have time to become the global conglomerate sometime in the future.
  • Focus on a tight geographical region withing your market. Even if you run an internet business, you can benefit from having a clearly defined audience in a clearly defined locale.
  • Make your product or service superior to that of the competition. If your competitors are focusing on a larger segment of the market, determine the needs customers in your, more clearly defined, market require and cater to them.

I’d like to offer a quick example. I am currently developing an online solution for the management of full and part time event staff such as those employed by arenas and stadiums. Now, this solution would be perfect for a large spectrum of companies that employ hourly staff, but by narrowly targeting a certain set of facilities I am increasing my chances of success. As the business grows, there is no doubt I’ll begin to tap the secondary markets – but to start off it’s absolutely key to define your niche.

Matrix Analysis: (Finally) Selecting Your Opportunity

Topic: Analysis, Exploration, Startups| 4 Comments »

Good morning. First, sorry for the late posting, I’ve been tied up with a few things all morning. After 7 full days of blogging about opportunity selection, it’s time to finally pick the one that counts. In the coming weeks we’ll take those opportunities and turn them into a solid, viable, high growth potential business with a full fledged business plan and course of action.

I’d like to share with you a quick technique known as Matrix Analysis. Many of you might have performed one of these in school, others might be seeing this for the first time. The idea behind a Matrix Analysis is to mesh objectives with the opportunities you’ve been stewing over.

The analysis is done in grid form and is setup as follows:

  • Down the left side, list your business goals
  • Along the top, list your business opportunities
  • Next, you’ll want to rate the match between each possible opportunity with each objective. You can use “X’s”, a number scale, or any method you like and understand.
  • Now total each column

These totals will generally indicate your best prospect. I really encourage you to do this, it will only take a minute or two of your time, and it’s definitely beneficial in the entrepreneurial process.

Ok students, it’s an early release Wednesday (do you remember those?). Do your homework and I’ll see you tomorrow for a bit more in depth analysis of your selected opportunity. Class dismissed.

Tuesday Top 10: More Opportunity Selection Techniques

Topic: Exploration, Startups, Top 10| Comments Off on Tuesday Top 10: More Opportunity Selection Techniques

Good morning Startup Students! First off, I’m pleased to announce a new partnership with Mind Petals, after just one week of blogging! My posts will now be aggregated onto their homepage daily. If you haven’t visited them in the past, I highly recommend it – there’s some real inspiration to be had around that site.

Now take your seats, because class is in session. I’m starting a new weekly segment entitled Tuesday Top 10, and to kick things off it’s going to be a Twofer Tuesday. Yesterday we discussed methods for spotting opportunities in your daily environment. Today we’re going to take those opportunities you’ve spotted and work to narrow them down into viable business opportunities.

Here’s 10 pointers to help you do just that:

  1. I mentioned early last week that life and business tend to overlap and that is especially true for young entrepreneurs. Don’t worry if your personal and business objectives mesh – it’s actually a good thing.
  2. So you’ve got a few good ideas, now would be a good time to briefly learn more about each industry. Don’t dive in too deep, that’ll come later. Lot’s of you readers are still in college, and that is fantastic because your library (hopefully) gives you access to expensive databases. Hoovers‘ free section should be good enough for this bit of homework however.
  3. Again, I don’t want you diving in too deep, but put a few of each industry’s segments in the back of your memory banks, they’ll come in handy at a later date
  4. Can you see any potential problems that the industry is overlooking? If so, do they seem like something you could capitalize on?
  5. Do any of the solutions to those potential problems mesh with your personal and business objectives?
  6. This one is kind of a given, but start concentrating on the most promising opportunities.
  7. Find a couple blogs on each industry and subscribe to their RSS feed for a week or two.
  8. If you get a chance, try to interview a couple leaders in those industries. You’ll find that people love talking about how great they are.
  9. Subscribe to some industry related magazines. Every industry has at least one – and they’re usually free to subscribe if you meet the qualifications.
  10. And that leads us to point #10, it’s time to Brainstorm!

The previous points aren’t meant as an exact guide, but should offer a nice stepping stone towards narrowing down your “idea bank”.

Wait! Sit back down Startup Students, it’s a Twofer Tuesday remember!

I’d like to give you a few pointers to help you with brainstorming:

  1. This one is important – never ever say No once the session starts – just write it down!
  2. Don’t critisize anything, get down everything that pops into your head
  3. All ideas are good ideas (at this point).
  4. Go somewhere quiet, and keep the distractions to a minimum
  5. Use your resources only after you’ve exhausted your brain. No browsing the net just yet!
  6. Create a Mind Map while you’re at it
  7. Once you are completely out of ideas and have exhausted your resources, continue writing for at least another five minutes.
  8. Have some structure to your madness. Try numbering each idea – you’ll feel like you are really accomplishing something.
  9. If you’ve got the time, take each idea and make a scrapbook out of it. Magazine clippings, blog posts, newsfeeds, if it is at all related clip it out and put it in the binder. Remember, ideas breed ideas.
  10. Merge your ideas. Decide if two or more can be accomplished with one solution or if some need to be placed on the backburner.

Today was a little bit more “schoolish” than usual – but hey, you are startup students!

Ok, class dismissed.

5 Steps to Spotting Opportunities

Topic: Exploration, Startups| 2 Comments »

As a young entrepreneur, it’s key that you open your eyes and mind to the world around you. I touched on this briefly here and here. Today, we’re going to quickly discuss six steps you can easily take to find that next opportunity in the rough.

  1. Head to the bookstore!
    1. Thumb through five magazines, remember not to focus on one industry or topic, pick magazines that run the gamut.
    2. Take a quick look at the bestsellers list. If something peaks your interest, give it a quick scan.
  2. Now to the music store!
    1. What genres are popular? What’s hot and what not right now? Which artists and genres are getting primo shelf space?
  3. And now off to the mall (if you aren’t already there)
    1. Are there any new stores? Who has the best prices? Highest prices? Best service? Which stores have long lines? What types of advertising methods do you notice? Which demographics are visiting and what are they buying?
  4. Head over to your favorite store
    1. Any products that were not there 3, 6, 12, or 24 months ago? Which products are experiencing high shelf velocity? Again, what’s hot and what’s not?
  5. You’re probably a bit tired at this point, so head home and watch some television.
    1. Watch an hour or two of your favorite cable news outlet. Bonus points for financial talk. Fox News is a great resource on Saturday mornings, and The Big Idea with Donny Deutsch is really inspirational at times. Any stories that represent opportunities you could capitalize on?
  6. This one is easy, you’re doing it right now
    1. Surf the net, read a few blogs, network with other young entrepreneurs and exchange ideas. The blogs and forums over at Mind Petals are a great resource for doing just that.

I challenge you to complete the above, and I can almost guaruntee your mind will be overflowing with potential ideas and thoughts for inspiration. In the coming months we will discuss ways for narrowing down those ideas and shaping them into high growth opportunities.

Class dismissed, and don’t forget to do your homework!