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

Are You SURE You Want to Start a Business??

Many people daydream of breaking free of the 9 to 5 to “be their own bosses.” But is entrepreneurship as glamorous as all that? If you think running a small business means leisure time and big paychecks, think again. There are few things as difficult as getting a business off the ground, let alone running it long-term. Read my 10 reasons you don’t want to start a business, and if you don’t run off screaming, keep reading this post.

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How Can I Be Sure?

My advice to you is to read and do as much research as possible before you dive in to a new business idea (and burn the bridge to your comfortable day job). A few books that will help you ask yourself the right questions are The Entrepreneur Equation and Making the Jump into Small Business Ownership. Rather than sugarcoating entrepreneurship, both books take a hard look at what is really required day to day.

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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.

5 More Must-Read Books for Startups and Entrepreneurs

I read a lot, as you can gather from my book reviews. While not every book stays on my shelf for future reference, there are some that I constantly refer back to. Here are a few.

1. World Wide Rave by David Meerman Scott

I’ve long been a fan of Scott’s writing, and his books always make my list. This one provides a hard look at getting people to talk about your product. Because you can’t “create” a viral video. It has to become that way. Scott’s acerbic observations always make me want more: “Nobody cares about your products (except you).”

 

2. The Entrepreneur Equation by Carol Roth

Easily my favorite book this year. I seem to go for books that give you the hard truth, rather than sugarcoating it and telling you how to make millions. Roth pushes you to ask yourself whether being an entrepreneur is really for you. Hopefully you’ll come out on the other side.

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Is Passion Enough to Grow Your Business?

You likely love what you do, whether that’s web design, running a bakery or teaching art lessons. But just because you love something and are passionate about it, doesn’t mean you’re a great business owner. No offense! But many people start their businesses because they love doing X so much, they want to do it being their own bosses. Unfortunately, not only do you do less of X when you’re running a business, you also have to be good at the “running” part.

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Passion is of course, the foundation of any business. You have to find something you can immerse yourself in and sell to others every day of your life for the foreseeable future. But you also have to be moderately good at all the business stuff:

  • Marketing and advertising to find new customers
  • Paying employees and vendors
  • Balancing your books
  • Handling employee grievances
  • Making sales

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What Yoga Teaches Us About Business

I’ve been doing yoga for eleven years. In my early days (in my twenties), I was in competition with everyone. I was more worried about how good everyone else looked in their poses than how well I was doing in mine. Now, as my instructor says, my mat is my island. I focus internally and make sure I’m doing my best in each pose.

Business owners could take a lesson in this.

While it’s important to know what the competition is up to, sometimes business owners focus on this more than they should. Certainly, if your biggest competitor is about to release a product equal in success to the iPhone, you need to be prepared, but don’t let worry consume you and keep you from coming up with your own innovation.

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Startup vs. Entrepreneur vs. Small Business

Startup.

Entrepreneur.

Small business.

We hear each of these terms, sometimes used interchangeably, but what really is the difference? Is it just semantics? Here’s my take on the 3.

Startup

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Fifteen years ago, no one ran a startup. I’m not even sure when the term was first coined. I know with the dot com boom, there were startups everywhere. These days, startups tend to be tech services and more often than not are seeking either funding or to be acquired.

What seems to differentiate startups from small businesses and entrepreneurs is their risk/reward level, at least according to Steve Blank. Startups are volatile, and many fail. But investors who do put money into startups often make their money back tenfold. Look at companies like Mint.com, MusicMatch, Groupon. Whether they were bought by giant corporations or are going it alone (as Groupon still is), they certainly prove the risk/reward model.

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