Ten Things You Can’t Afford NOT to Invest In

Entrepreneurs and startups, by nature, have tight budgets. There aren’t many $500 schmoozing dinners with clients, nor unnecessary business flights. But you shouldn’t automatically write off these ten things, as they’re imperative for your business.

1. Marketing

You assume marketing your company is a costly effort, so you don’t bother doing any marketing at all. Your competitors will be thrilled, but this is the worst possible thing you can do for your company. And actually, many marketing techniques are completely free and just require your time and effort, like social media.

If you do have a little money you can commit to marketing, start with five to 10% of your revenues. Experiment to see what works, and invest more as your revenues grow. Read More

Don’t Be a Firecracker: Tips Toward Career Independence

With the Fourth of July just a couple of days away, it’s natural to think about fireworks. Beautiful and volatile things, those fireworks. But they’re quick to go off, which can be dangerous.

This analogy is headed toward those of you who are still working 9-to-5s but dream of starting your own businesses. Take it from me: the Firework Approach to leaving your job (jumping out of it sooner than you’re ready) is not one that will benefit you. Instead, use the Tortoise Approach: slow and steady wins the race.

1. Decide What You Want

If you’re sick of your boss, and spend your work hours daydreaming of the day you can bid him sayonara in favor of running your own business, dig deeper into that thought. Is business ownership really what you want, or is the fantasy of being able to be your own boss what’s pulling  you toward it?

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Should I Start or Buy a Business?

If you’re considering starting a business, you might be trying to decide between starting one from scratch or buying an existing business. Each has its own benefits and drawbacks, so let’s take a closer look.

Starting from Scratch: More Work and More Control

If the idea of starting your business with a blank canvas appeals to you, as well as the vast amount of work that’s required to establish and grow a new business, starting from scratch might be right for you. As the owner of a newbie business, you’ll have ultimate control over the direction you take your company. And while having a large marketing and operations budget would be nice, you can get along on a shoestring budget, since you’re the one setting the rules.

Want to work from home? Or Iceland? It’s your call. You can start or move your new business anywhere in the world you want, as you don’t yet have established employees in a specific location to worry about.

On the flip side, a lot more work goes into starting a business from scratch. You’ll have to do plenty of R&D if you’re going to sell products, and until you have the capital, you’ll be taking on a lot more than just the role of CEO. Speaking of money: if you don’t already have plenty of it, it may be hard to take out a loan for an unproven business.

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What an Entrepreneur Looks Like

While there’s not one single profile of what an entrepreneur looks and acts like, there are certain characteristics that are pretty consistent across the board. How many of these can you identify with?

This list is adapted from Making the Jump into Small Business Ownership, by Jeff Levy and David Nilssen.

1. Competitiveness. We’re not always competitive with others; sometimes we want to best ourselves. As Levy and Nilssen say in the book: “Entrepreneurs love winning. They see challenge as the journey and enjoy the victory as much as – or even more than—the actual reward.”

2. Decisiveness. My husband calls this characteristic in me “bossiness.” Many employees don’t like making decisions, because they know someone else will make them for them. That would be us entrepreneurs. We’re accountable for our decisions and try to learn from our mistakes. It’s been a lesson for me, but when we’re not defensive about our mistakes, we can identify the unique opportunities they present.

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5 Things We Can Learn from George Washington About Entrepreneurship

Today we celebrate George Washington’s birthday. And while fifth-grade history taught us that he was a great military man and our first President, we know less about his life as an entrepreneur. Technology may have made the game different, but we can still learn a lot from the man about entrepreneurship.

1. Find a need and fill it. Over the years, Washington ran a fishing operation, a flour mill and a whiskey distillery. He found tremendous success with these ventures, simply because there was a need for them. Rather than taking the easy path (he knew nothing about whiskey), he took the path most likely to lead to success.

Lesson learned: Look for markets that aren’t oversaturated, or find a new angle to address an existing need.

2. Know when to fold them. After realizing that his tobacco crop was too highly taxed to turn a good profit, he cut it out in favor of wheat. He recognized that continuing to raise a crop with low margin wasn’t worth his time, so he stopped raising tobacco.

Lesson learned: It can be hard to let a product or business go after you’ve invested in it, but if the negatives of keeping it outweigh the positives, move past your emotional attachment to it.

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Are You an Entrepreneur for Life?

When I started my company five years ago, it didn’t occur to me that this might be a permanent thing. In fact for years, it felt like I was just this side of working as a barista at my local coffee shop. It’s only now, five years in, that I realize:

I’m an entrepreneur for life.

Once you own your own business, it’s hard to imagine going back to working for someone else. Sitting in a cubicle, answering to a boss. Getting a steady paycheck (although, yes, that would be nice). Not having the creative license you had as a business owner. Sure, some do it, but my bet is many of us aren’t cut out to go back to that life.

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How to Start a Business

If you’ve already thought about the reasons you shouldn’t start a business, and haven’t been deterred, you’re probably mentally ready to take the plunge. But here are a few things to consider before going full-time as a small business owner.

1. Get Your Finances Straight

You know you need money to start a business, but have you calculated how much you’ll need? Ideally, you’ll have enough saved to pay for your first a year of expenses, which include:

  • Startup costs (equipment, rental, utilities)
  • Overhead (salaries, office rent)
  • Your salary

If you have a healthy bank account and can afford all of these, kudos to you. Otherwise, you’ll need to look at other financing options, like taking out a small business loan or finding investors. If you’re ready to start your business, but don’t have the capital, consider continuing to work at your day job while you slowly grow your business until you can quit to run it full time.

2. Identify Your Product or Services

To be an entrepreneur, you need to have passion for what you want to sell. That could be pools, or software, or consulting services. Whatever it is, be prepared to love it for the foreseeable future. And find a niche. The more you can differentiate yourself from your competition, the more likely you are to succeed. Ask yourself:

  • What makes my product better than the others?
  • What needs are not being addressed by my competitors?
  • How can I market this in a unique way?

3. Hire Smart People

Realistically, you may not be ready to hire employees for a while if you’re just starting out, but have it in your head from the start that you will hire smart people as soon as you can afford to, and you will delegate to them. You will inevitably try to do everything yourself to save money, but trust me: you’re better off having people more competent than you handling the tasks you’re not great at.

4. Learn. Every Single Day

The great thing about the Internet is that it gives you instant access to knowledge. With blogs, webinars and social media, you’ll never be able to complain that you didn’t know about an industry trend or new tool that could grow your business. But it’s up to you to dedicate time each day to learning. Attend industry conferences. Subscribe to blogs. Read. Watch videos. Learn.

5. Know that It’s a Long Road

If you want to start a business because you dream of wealth and lazy days by the pool, you’re in for a rude awakening. Entrepreneurship is about caring enough about something to take the time – often years – to see it culminate into your dream. It can’t be about the money, at least not initially. Running a business has to be about passion and dedication. The money will come later.

Photo: Stock.xchng user ambrosjo. Royalty free.

Happy New Year: How Will You Resolve to Grow in 2012?

Can you believe it’s 2012 already? Where does time go?

Last year, I talked about how having resolutions can help your business. This year I want to give you a few starter resolutions that you can build upon. Most of them are appropriate, no matter what industry you’re in, and no matter what size your business is.

1. Increase Sales by X.

You notice I’m not vague when it comes to increasing sales. It’s easy to not pinpoint a number, but take the high road and actually set a goal. For bigger companies with a sales department, this is easy, as you already have sales metrics in place. But for smaller companies, or for solopreneurs, setting a sales goal may be new to you. Look at your history of sales and try to forecast where you realistically can be by the end of 2012. Then set your sights just a teensy bit higher (shoot for the moon, and all that). At the end of the year, look at how close you actually got to your goal, and use that for next year’s resolution.

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Gen Y Fund Aimed to Help Young Entrepreneurs

The Young Entrepreneur Council recently announced the launch of its Gen Y Fund, an early stage venture accelerator aimed at entrepreneurs 35 and under. The fund’s goal is to support selected startups (30-50 each session) through mentoring, providing access to entrepreneurial resources and funding (each startup receives $250,000 in exchange for equity). But what makes the Gen Y Fund even more unique are a couple of unusual features:

1. Participants can have their student loan obligations covered for up to three years.

2. Participants can live rent-free on one of several participating college campuses during their incubation.

The White House recently announced that its Income Based Repayment Program, which in the past enabled people in low-income jobs to stretch out their loan payments, would also cover entrepreneurs so that they have more cash flow to get their businesses off the ground. The Fund will pay for 2/3 of the loan that is due during the incubation period, while the other third will be removed through the IBR program.

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