Small Business Entrepreneur blog

Commenting on How to Select a Startup Person?

2008-08-18T18:56:40Z

I’ve discovered that I wrote about 5-6 articles on hiring in a small business. But that should stop me from adding more resources to it - simply because hiring is one of the most important steps a small business should take to grow.

This time I’m commenting on an article called How to Select a Startup Person? that appeared on Indian Startups, Entrepreneurship, Web2.0 blog. I’m happy to see that most of the views on hiring are common no matter the geography. Lets see:

Right Mindset : For any startup, understanding the mind-set of prospective employee/partner is very important. It takes special peoples to work in a startup. I should know best, I’m some sort of startup junkie, loving to do the hard work in the beginning and getting bored once everything is set up. Even if you are a simple employee, working in a startup is harder and riskier. There is no saying if the company won’t go under and next thing you hear is that you have a dark spot on your resume. Of course, it doesn’t mean the company went under because of you, but in a way you were part of the things that didn’t go well.
Financial expectations : People with startup mind-set would prefer to delay their financial gains. It’s way harder for a startup company to match the benefits an established company could offer. Luckily, the start-up employees take brain food from accomplishing things and making things matter.
Higher Responsibilities : A Startup person would always emphasize his worth and capability to take higher responsibilities. You get to do a little bit of everything. And that especially good if you think about this as a learning experience. If I think well, most of the things I have an idea about today are things that I have experimented while being employed at my first start-up. Better than any college or anything.
True Reflection of his aspirations/skill-set : A startup person would try to bring-out real aspirations in front of decision makers. Hm. What?
Flexible Mind-set : A startup person is always open to new ideas and approaches. Chances are that sometimes you don’t know how to make things because they haven’t been done before. Or you have to make them different because of limited resources, or because you have enough liberty to do that. No matter how you put this, you’re walking paths than have never been traveled before.
Innovation : A startup person would always think in innovative direction. He/She won’t try to solve problems in usual manner. Or as I said, you don’t know how to do stuff, and you… innovate

Good article. Now let me list the other articles I wrote about hiring in a small business.

ADDITIONAL RESOURCES:

Commenting on Jeff Chavez 11 Killer Instincts of Entrepreneurship

2008-08-17T19:41:51Z

Jeff Chavez came up with an interesting article on what he calls 11 Killer Instincts of Entrepreneurship. As usual, I’m copying them over so I could give you my feedback.

The Solution Instinct: This is about ideas and always seeing them. Indeed entrepreneurs should be problem solvers - it’s an ability that can be developed over the years. Most of the times, only the most complicated problems make it up to the entrepreneur level (the rest being hopefully resolved by the employees) and even more, they aren’t limited to an area of activity. You have to solve problems from hiring to electricity problems if there are. If you are looking for a big cool place to store a birthday cake and you think the servers room can do the job (server rooms being especially cooled) then you have the Solution instinct in you.
The Detective Instinct: This is about fact-finding and due-diligence. Yes, every decision is based on real life factors. But I believe what sets apart entrepreneurs from regular employees is that they can take decisions based on inspiration, overruling the obvious factors. Sometimes you have to play by your feelings.
The Great Communicator Instinct: This is about connecting and constantly selling. While I’m probably missing most of the communicator instinct, I wrote before that the only ability an entrepreneurs can’t miss is the power of selling. As an entrepreneur you start selling even before the products is out on the market, you sell when you hire your first employee and you sell when you a pitching for investment.
The Youthful Genius Instinct: This is about doing what you love. Yes, and still there is something wrong with the entrepreneurs minds.

The Entrepreneurial Heritage Instinct: This is about how our heritage can reveal some or our natural gifts. I’m not sure about that. Where do entrepreneurship comes from in Easter Europe where we didn’t have entrepreneurship for like 50 years? Sure, I can agree that an Entrepreneurship oriented society can mean a lot as the paths have been traveled before!
The Risk-Taker Instinct: This is about going out on a ledge. I had some previous thought on this, and still I’m not convinced that Entrepreneurs are natural risk takers. In fact, in a way they might have a very well developed adversity to risk as everything they do is a calculated decision. And in a way, even if you are an employee and you decide to flip jobs you take kind of the same risks.
The Work-Horse Instinct: This is about paying the price. Yah, again, there is something wrong with the entrepreneurs minds.
The Thick-Skinned Instinct: This is about being tough. Besides the power of starting something up, an undeniable entrepreneur quality is the power of keep things going even in tough times, just like a marriage: for better and for worse.

The Flexibility Instinct: This is about being willing to change. As an entrepreneur you have to do what you have to do to make things work. This means that today you could be the janitor or the secretary is this needs to be done. And as you are the ultimate goal accomplisher, you will work on your weak spots to improve them, not necessarily as a personal development process, but as an opportunity enhancement process.
The Human Instinct: This is about people. Attracting the best people is more important than the business model itself. Well, if you are an entrepreneur you don’t really want to work. Therefore you just need to find the best people for the job that you are sure are able to implement your… dreams.
The Knowledge-Quest Instinct: This is about constantly learning. Reading, thinking, listening, observing, absorbing, and applying is a hallmark trait of a great entrepreneur. If you are already reading this, then I don’t have to comment!

European Entrepreneurs miss… selling lemonade

2008-08-17T13:26:22Z

I’m reading a very interesting article on Entrepreneurship in Europe, called “Europe desperately lacking ‘positive entrepreneurship culture’ “. The main idea of the article is “the EU must work towards changing its attitudes towards entrepreneurship and create a positive culture which encourages people to take risks,” and the positions presented are quite interesting:

EU Education Commissioner Ján Figel’ said: “We need to promote creative thinking in kids’ minds, teach them ability to learn, sense of initiative and capacity to take responsibility to turn ideas into action.”

Matti Heikkonen, chair of the Finnish software entrepreneurs’ association argued instead that: “entrepreneurship is not an educational issue. “You can’t teach a person how to become an entrepreneur,”" and had the idea that as you get more educated you realize more the risks involved in entrepreneurship: “most entrepreneurs are not those with the highest university qualifications and perfect diplomas, precisely because the better qualified the person, the more risks linked with turning ideas into action he or she will see. Entrepreneurs are often generalists who have dropped out from university, who just have an idea they want to realize and go for it, without spending time calculating risks and fearing failure.” he sees a role for the education system in helping “to change attitudes towards entrepreneurship in general and to show both success stories and failures”

Asked whether future global leaders and entrepreneurs are born or made, the president of Microsoft International, Jean-Philippe Courtois, said successful entrepreneurs are immediately ambitious, with the drive to go global from the start. “They take risks, have failed before and are good at attracting talented scientists and other people around them.”

Talking about financing, investing, Mr. Peter Jungen, co-president of the SME UNION, “angel investor”, said that business angels invested some €24 billion in the US and only 200-300 million in Europe.

Thing is that in the same time I was reading an US article on “Young entrepreneurs sell lemonade to raise money for party” - The Blue Buddies Class at Childcare Network at 4225 Brambleton Avenue were excited about selling lemonade, especially Victoria Barefoot and Jennifer Asbury members of the Blue Buddies Class for ages 5 and 6. Rod McGough, teacher of the Blue Buddies class and his assistant Brittany Loyd, use the lemonade stand as a way to teach the children how to county money.

I think most European Entrepreneurs miss… selling lemonade while being children. Selling lemonade gives you the feeling that you can go out there and do money if that’s what you want. Opportunities are around and just wait for someone to start-up.

Commenting on an Are you an Entrepreneur article

2008-08-17T10:48:37Z

Funny how you get different perspectives on the same thing. I would like now to comment on an article written by Earl Stringer & Rachel Bishop - Are you an Entrepreneur? I will copy paste the main ideas below and give you my comments:

Entrepreneurs can be any shape, size, age, race or religion. They do, but always there are at least some business environment factors that alter the entrepreneurship ways. For example, Eastern Europeans are less entrepreneurial than Western Europeans.
What makes an entrepreneur an entrepreneur is commitment, the willingness to lead and the passion to succeed. And money (or the desire of have some)
Great Focus - True entrepreneurs have great focus. I have to agree, my mentors became successful as entrepreneurs in the moment they discovered something to focus on. They didn’t get that from the beginning but somewhere on their entrepreneurship life they discovered the right direction and they focused on following that path.
Creative - Most entrepreneurs have a seemingly effortless way of being creative. Creativity and business innovation is what makes companies stand a part and take the lion share on a market. This doesn’t necessarily mean coming with a completely new idea for a product or a service, just getting to do something better and serve a need somewhere in the simplest way possible.
Good With Money - Being able to keep track and manage money wisely is another well-known characteristic of an entrepreneur. If as an employee you’re probably thinking to buy a new car, buy a vacation or something like this once you got a rise, a real entrepreneur will always think about new investment opportunities or about growing the business. This doesn’t mean that entrepreneurs do not lose money or make mistakes, they do, but they think about money as a resource for even better bigger things.
Decision Maker - One who can make big decisions on their own without worrying about others opinions. Well, if you are in a decision making position as an employee, you probably got about half of what taking a decision mean to an entrepreneur. First of all, when you are an entrepreneur, chances are that only the most difficult decisions make it to you. Second, because you are not an employee you could take decisions in a different way - an employee will follow the rules, while you might not.
The Ability To Lead - Most entrepreneurs put themselves in the position of being the boss. No matter if you hire the best managers to control your business, you will still have the lead position. Sometimes people do not expect management decisions from you, the entrepreneur, but expect to be a leader.
Always Learning - True entrepreneurs never stop learning. I’ve always thought about things and ways to do things as a learning experience for something bigger that sits around the corner. And this way of thinking that there is something else to follow teaches you to learn from anything that happens, good or bad.
Fearless - Having no fear is definitely a characteristic of a entrepreneur. I completely disagree with this. Fear of failing, fear of risks is what a real entrepreneur feels. Entrepreneurs are not real risk takers, because everything they do is after a calculated thinking. Sure things might work or not, but fear is real, it just matter how you are handling fear.

The original article.

Elevator Pitch for Entrepreneurs

2008-08-17T10:24:01Z

I’m sure you know what an Elevator pitch is. Wikipedia says:

“An elevator pitch (or elevator speech) is an overview of an idea for a product, service, or project. The name reflects the fact that an elevator pitch can be delivered in the time span of an elevator ride (for example, thirty seconds or 100-150 words).

The term is typically used in the context of an entrepreneur pitching an idea to a venture capitalist to receive funding. Venture capitalists often judge the quality of an idea and team on the basis of the quality of its elevator pitch, and will ask entrepreneurs for the elevator pitch to quickly weed out bad ideas.”

To me, an elevator pitch is just like a blind date. You are pitching to a person that you don’t know and met by chance. And just like on a blind date, the first impression counts and it needs to bring you a “second date”.

I’m not what you could say en expert on elevator pitching as here were I live (Eastern Europe), investment and funding happens on a much different way. However, even without knowing it, almost everybody does at least a couple of elevator pitches at family reunions, social or business meeting when you are asked: “So what do you do?”. And you have to come up with a very rapid answer, that is not complicated and explains in a few words what you are doing.

In this environment (family or social meetings) you have to prove yourself that you are worthy and did something with your life. In real cases scenarios when you pitch a potential investor, things are a little complicated: you have to make them give their money to you.

There are plenty of articles on how to make an elevator pitch. I do however think that an elevator pitch is not a “poem you should learn”, but it gets self-crafted over a series of trials and errors pitches during your entrepreneurship life. My 2008 elevator pitch is way different from the one I did 2007. And the 2005 elevator pitch actually makes me laugh.

There are some things you should have in mind when getting out your elevator pitch: what needs do you cover, what’s unique about the way you are fulfilling the need and how much money it will make.

Here is a story about a successful pitch and a video that says things better than I do.

Good news: Small Businesses can hire part time or project based

2008-08-15T20:18:53Z

One of the biggest challenges when running a small business is hiring. Not only that is hard to offer the same level of benefits a bigger company does, but, no matter what, you will have to provide enough revenue so you can pay your employees. Last year, hiring was one of the hardest business decision we had to make for our small business.

Then, I realized something. While for a bigger company hiring part time or on project base might not be acceptable (usually you need to have all the resources available during working hours), for a small business is perfectly acceptable to have part time employees or project based people. I think there are several reasons for this:

You don’t necessarily have so many customers that require that particular thing your part time employee is doing. Like for example if you are building sites, you won’t necessarily need a designer every day
Small business owners are capable of handling little bit of everything. Usually a small business is started based on the abilities of the founder. This means that for the most of the things you might have short term solutions
It’s cheaper. You don’t have to pay a full salary and you don’t have to pay for the dead times an employee has. Basically if you hire full time, not only that you have the challenge to have enough money in the bank each month, but you also pay sick days, smoking breaks and so on. A project based employee gets paid only for the work that gets done

It’s easier to get abilities in a multitude of directions. Because you don’t have to accumulate all the knowledge in your company, you could have a part time employee or project based for each important task. If you are not forced to hire full time, then you can have a best PR person, a best designer, a best everything.
Someone else is paying most of your employee money. Chances are that a part time or project based employee already has a 9 to 5 job that pays most of the money he needs. So no matter how often or how much you are paying, that person already has some level of satisfaction and security.

There are some downsides as well. While I believe for a small business the benefits of hiring part time are much bigger than the downsides, let me list some of them:

Your not building a company culture. Because that part time employee does not really care of your company culture, for them it’s just another place to work and get paid
Part time or project based people might be unavailable. They have less commitment towards your business, so you will have to carefully plan projects, delivery times and so on.
They are harder to motivate. Because they don’t care of your company culture, have less commitment, how else can you motivate them than money?

Innovative business ideas - friend or foe?

2008-08-14T05:48:54Z

If you ask me, waiting for an innovative business idea to come is the number one deadliest entrepreneurship mistakes as in about 90% of the cases never leads to anything, and even prevents you to start a business. I’ve always said that is better to start with something, anything and if there is something nice to do, it will come along.

Beside my personal story - started a company 4 years ago that changed focus and the domain of activity 2 times - I have some more to share. Nowadays in IT mostly people think about starting a business with the single purpose of getting that innovative idea, start things then sell to Google (or whatever) for outrageous amounts of money. While this sometimes is the source of creation of some very interesting services or products, it fails 99.99% of times. And I have an example.

Some years ago (God, time flies fast!), I used to work as Project Manager for InterAKT, a company doing Dreamweaver extensions that was later acquired by Adobe. And guess what, when they started, the company was doing something else, to be more precisely , outsourcing and web development.

But while developing a mini CRM for a client, they were very inefficient in building the interfaces, even thought they were using Dreamweaver. To make things worse, at that time, Dreamweaver did not support PHP and PostgreSQL (if it’s too technical it doesn’t matter, that’s not the point here). So they developed a Dreamweaver extension which they gave away for free that enabled people to use Dreamweaver, PHP and whatever database they liked. Successful, but free.

As I was saying, they were developing that CRM and was very time consuming. So next thing they created was another Dreamweaver extension to build lists and to edit them. That was making things much more easier!

Probably along the way, they decided, ok, let’s put this online, and see if it sells. Somewhere around that time I’ve joined them (I was the only non geek guy in the company for a while). I do remember quite clearly, the products were actually making less money than the outsourcing. We didn’t know what the extensions will mean for the future.

Making a long story short, well, selling extensions become much more profitable than outsourcing. Business innovation was happening along the way, without us realising. And they sold the company to Adobe.

Anyway, I’ve got an interesting article of accidental business innovations if you want to read more. But is that (looking to find an innovative business idea) friend or foe?

Well, I think that if you are an entrepreneur, you are always looking for business ideas. I don’t think that this is a purpose in itself, just you can stop thinking about how to do things better or find new areas to work on. Sometimes this makes you rich, sometimes this just bring a little more revenues and sometimes it fails. No matter the outcome, business innovation is your friend, because it gives you opportunities.

But is this foe as well? It is. Especially when it prevents you from starting anything (very common amongst wanna-be entrepreneurs: I can’t start a business, I don’t have any ideas, and doing something that anybody else is doing is not going to be profitable) or when it slows you down from doing what you are already doing ok.

Starting a business in US

2008-08-14T05:07:10Z

Requirements to start a business are very different from country to country. Australia seems to be the place where is most easy to start a business, but I believe US is good as well. If you ever wondered what are the requirements to do business in US, Alex Iskold prepared a very comprehensive report that talks about:

Business entities - the ways you can do business and register a company in US - Sole proprietorship, Limited Liability Partnerships (LLP), Corporations
Shareholders, Directors and Management
Key Documents - Articles of Incorporation, Shareholders Agreement,Corporate Bylaws
Legal and Finance, talking about the complexity of accounting and keeping up with the legal requirements
Venture Financing or raising money for your business

The article gets all this together, it not very detailed but it helps you get a nice overview on what it takes to stat a business in US. The article is here.

Is fustration a good reason for entrepreneurship?

2008-08-12T20:34:21Z

I’m quite amazed that hardly anyone mentions frustration as a source of entrepreneurship, business ideas and innovation. Most of the times, the closest thing to frustration is mentioning about finding or fulfilling a need in the market.

Frustration should be the most beloved word for any entrepreneur. I think frustration should be considered the number one driving force for entrepreneurship.

frustration is more than a need on the market. It’s a sure sign something is done badly and needs improvement fast. You don’t need to create the need or even investigate if it’s a valid need only need to approach the current frustrated users and you can easily build a base of potential sales.
frustration is available anywhere. When was the last time your car wasn’t serviced right? Or when you had to walk for miles to get a nice cup of coffee? Or anything?
When was the last time when you though: if I were to have run this business myself, I would have done this differently and much more better.
When was the last time when you realized that a so called “market leader” provides a much weaker service than you could? Realizing you could do better doesn’t make you wish you start a business of your own?
Frustration might keep you motivated. If you start a business because there is “market potential”, the excitement and driving force might fade away. But if you have to solve a frustration, your commitment never goes away until you see things done.

Now, most businesses are not about innovation how you might think, they are about doing something a little better. They solve frustrations, and the ones that do this well, even in the simplest ways available are the ones that hit gold. Frustration is gold

So send me your frustrations so I can get rich!

Best small business in Hawaii

2008-08-10T17:37:27Z

No, I’m not going to tell you what’s the best small business in Hawaii. Hawaii Business Magazine is now accepting nominations for the third annual Hawaii Business SmallBiz Success Awards.

Nominating a company for the SmallBiz Success Award is a terrific opportunity for small businesses to receive coverage in Hawaii Business. Self nominations are welcome. Nominees should somehow exemplify the concept of “small business success”, be headquartered in Hawaii, and have fewer than 100 employees. The simple-to-complete SmallBiz nomination form is found at: http://hawaiibusiness.com/Hawaii-Business/Events/Small-Business-Awards-Nomination/

How do you decide what to pay your employees in a small business?

2008-08-09T20:31:57Z

While my previous writings talk about making your employees happy and hiring in a small business, the wage you pay has one more meaning and importance that I haven’t covered before. Sure, when you are small, is hard to compete with big business in offering strong packages to your employees, insurance and benefits. Even more difficult when you are bootstrapping along the way, growing your business without outside investment.

But that’s not what I want to talk about today. The wages you pay have another important meaning as well: value. Sometimes people tend to evaluate their professional and social position depending on the amount of money they get. Sometimes it doesn’t matter you are a manager or whatever at a great company, because if your friend has a better payment at an unknown company, then it might be that he is more valuable than you. Or at least that how some people think.

If the amount of money you are paying your employees is a sign of their value, then how much should you pay them? Because no matter how many evaluations you make, sometimes the real value of an employee is more than you can measure - might not be the very best on standard evaluation terms, but might be just the ones are building the long term value of your company.

Well, I really have no idea. You can measure how much money they bring, what would be the costs of hiring a new person, or whatever else, but how can you translate their value in money?

The boostrapers yahoo group

2008-08-09T20:17:49Z

The Yahoo Boostrapers Group is a knowledge resource for anybody looking to start a business on the cheap, without a upfront big investment. I’ve wanted to mention it a long time ago, but never had the inspiration what to write about it. The group is lead by Shawn Hessinger from www.bootstrapme.com

The Yahoo Boostrapers Group is for:

1. The bootstrapping entrepreneur using a variety of personal or other available resources to start a new venture without the benefit of external funding

2. The bootstrapper already operating a business and using bootstrapping techniques to grow his/her venture

3. Anyone who is planning or has ever dreamed of starting a small business but believes it will require too much money or hard-to-get external investment to make that dream a reality.

4. Those friendly to the efforts of bootstrap entrepreneurs either with experience and background in business or some related field who can offer help, support or advice to those starting or growing a business with little or no financing or outside investment.

The group is open for anyone to join here: http://finance.groups.yahoo.com/group/thebootstrappersgroup/

When being laid off can spark your entrepreneurial spirit

2008-08-06T21:40:01Z

Most of the people have negative thoughts about being laid off - understandable - it’s never easy to lose your income. I do however know at least a couple of happy cases when being laid off sparked the entrepreneurial spirit and people became successful entrepreneurs. I could say that in these cases, being employed actually imposed some limitations that only become obvious after being able to do things at your best as an entrepreneur.

Scott Law started Zotec Solutions in 1998 after losing his job at Anthem Inc.’s medical billing subsidiary, Allmed Financial. Anthem pulled the plug on that division, leaving many employees like Law out of work. But this was only a temporary setback. He recognized an unlikely opportunity, and decided to take this chance to start his own company.

Ten years later, Law has navigated Zotec from a small one-person shop to the largest privately held medical billing company in the country. In 2007 alone, Zotec added nearly 500 employees and had a revenue growth rate more than 221%.

Here is the interview with Scott.

Innovative business ideas: SMS messaging for groups

2008-07-20T15:41:55Z

You would say that sending text messages from your mobile phone is old technology and that is way too hard to type in something to make it worthwhile. And then, we have mobile phone advertising - I guess this is not news either, and that you saw everything that could be done there.

But… Hold on. We then have young entrepreneur Derek Johnson that while being a college student that in 2007 saw an opportunity to grow a business around text messaging for groups: “We started Tatango to solve a simple problem that many of us faced trying to manage and organize groups we belonged to. We needed an easier way to communicate with fellow group members who were constantly on the go and not in front of a computer. We knew what we had developed was pretty amazing, but never could have imagined it spreading to athletic teams, bloggers, politicians, schools, celebrities, parents, churches, musicians and organizations which are so diverse from one another.”

The service grew within a few months of launch to over 400,000 users and over 15 million text messages. That’s quite amazing for a business started in the parents basement.

See Derek’s interview on Entrepreneur-interviews to find out how you can turn a simple idea into an innovative business.

Work “on” your business and not “in” your business

2008-07-16T18:23:50Z

In my article Promote your small business with a press release I’ve said “Being a small business founder I know that sometimes you are so busy with doing the actual work that needs to put cash in your bank that you don’t even get to think at some business processes that are not really so hard.”

I think I didn’t really choose the best words to describe the fact that sometimes you don’t see the forest because of the trees - you are so absorbed in doing your daily tasks that you forget that your real job as an entrepreneur is to create value. Katrina Sawa’s article Improve Your Business taught me that there is a better wording to describe this situation: you should be Working “on” your business and not “in” your business: “What I’ve found is that most entrepreneurs are not taking the time to work “on” their businesses, but struggle and stress out “in” it. Unfortunately, I see hundreds of small-business owners and entrepreneurs each month who are struggling to “get it all done.”"

Ok, now, what does this really mean? Shouldn’t you be taking care of your customers and put all efforts into providing the best service available?

Yes you should. But somewhere in the process you should create value. Creating value is actually different that doing the work for a client - probably the easiest way to think about it is what is left if you take all your current customers out.

So if you take all your current customers out, what is left? It doesn’t sound too well not having customers and work to pay the bills. Value means for example if in the process of serving your customers you build up a site that is a great resource. Value could mean a great team - if you are providing services, having the right team of employees is a real asset. Value could mean the company value if you want to sell it today. Value can mean the assets the company has acquired: buildings, vehicles, anything. Value can mean good references from your customer.

Of course you could say that you are already building the value of your company, but when was the last time you did something for your employees not just to improve the quality of the services they do for the customers but just to build up their value?

Sending up a newsletter regularly to your subscribers could be a value if it’s something they expect and use and receive each month at the same date. Not all your customers are a value. But your fans or customers that are happy about your services are a value. Having a branding book is a value. Networking it’s a value.

Everything that remains if you take out your current deals and customers is value. When was the last time you built your value?

9 reasons not to be an entrepreneur (commented)

2008-07-13T17:06:10Z

Yesterday I’ve come across Monika Mundell’s 9 Things That Could Ruin Your Entrepreneur Spirit and I couldn’t resist commenting a little bit on the items. If you remember my older post There is something wrong with entrepreneur’s minds - entrepreneurs are able to postpone the accomplishment of their dreams, or even act against them for the final purpose. So it seems that before getting more time, more money and being your own boss, you have to pass through a time where you don’t get time at all, all the money are invested and every customer is your boss.

Anyway, getting back to the Monika’s article, I will copy the “things” here so I can comment them.

Uncertainty

Entrepreneurship is uncertain business. When you become self employed you don’t know whether your business will take off or not. But if we never try, how do we ever know? This could especially be a problem in the beginning stages. In a young business it is hard to tell whether our ideas will eventually work out.

Correct. Actually I think that if you are an entrepreneur, and even if your business does well, you will always have a degree of uncertainty until the exit day when you can really say it was successful or not. If you are a start-up, chances are that you think that having the first 100k in the bank makes you certain your business is doing great. Until next morning when your competition makes a move and gets your market share. Or until oil prices go up and your fleet is more expensive to run.

Risk of failure

Most of us are afraid of things, situations or even people. Being in business for yourself won’t change this. Especially when our own capital is involved we tend to get very scared.

I have plenty of articles dealing with entrepreneurship fear of failure. As I actually wrote in this article yesterday, “having previous entrepreneurship experience doesn’t make starting up a new business easier. It actually makes it harder. Not only that you know what went wrong with the previous one, but this time you also have something else to loose that can make you more cautious: money and pride. And if you had a great idea once, it’s really so hard getting a new one that is as good as the last one.”

Hard work

If somebody ever told you that being an entrepreneur is easy, they were lying. It isn’t easy. What is easy anyway. Picking your nose perhaps. If you want to step into your own entrepreneurial shoes you need to understand that there is hard work involved. Not necessarily hard as in physical, but mental and tiring.

I’ve already wrote that entrepreneurship is hard work. The bad news is that no matter how many employees you have to work for you, entrepreneurship is hard - you can see the reasons in my article - damn, I’m smart

Long hours

As an entrepreneur myself I work long hours. While some might say; what is the purpose of slaving away from home with the worries about business, if you can work for a boss instead and do half the work, I understand.

Working for yourself means is very hard to draw a line where the workday ends. And even if you get home to your family, an entrepreneurs have a terrible bad time disconnecting from the issues and challenges their business has. It’s almost like an obsession. And being on top of the food-chain means you are the final link in the problem solving process. I mean every problem that doesn’t have a solution - guess what - makes it to you.

Irregular income

As long as you are prepared and put some pennies aside for the slower times you should be fine. Problems start when entrepreneurs burn all their money, thinking it will just keep flowing. While the thought is one I rather like, nature has shown us that it won’t always work that way.

I’ve said it before. You might not realise before starting up, but getting a $300 raise is far more easy if you are an employee than having to build your business to get $300 more. Funny, isn’t that? And you thought entrepreneurs should have more money than you, the 9 to 5 worker, because they “keep all the profits for themselves”. Wrong. I have an article somewhere about this. Can’t find it right now.

No benefits

But we don’t get sick pay, holiday pay or even 401k benefits. Life insurance is also another topic to consider, as well as work cover if that exists within your country. Basically any benefits we take for granted as an employee will fall away when we go into business for ourselves.

Yah. You should read this: entrepreneurs can’t quit.

Marketing

One problem is that hardly anybody is a born marketer. That means we all have to learn and adapt to our industry as an ongoing learning experience. We can’t afford to rest and have to keep our eyes on the ball to stay competitive and in the game.

Hmmm. Don’t know about that, why should be a problem. I’m a marketing professional, probably that’s why.

Lack of quality time

Ok, this is a biggie. If you have family, pets or friends that are used to seeing you around on birthdays, Xmas and other common holidays, then you might be in for a shock. Sometimes in business we have to keep working when the world parties.

Time? What’s that? I think this is put lightly. Think about weekend work. Think about holiday work. You wouldn’t do that for your employer? Entrepreneurs do that, hoping that sometimes will pay back. And there is no saying if it will ever do.

Missing funds

Depending on the business you seek to run you will need some major funds (even if you start small). Sometimes those funds are simply not available to us and that could be the first major hurdle to face as a budding entrepreneur.

Well, if at your 9 to 5 work you are probably talking about budget (having or not having budget for something), start-up entrepreneurs talk about having enough money in the bank to pay the bills at the end of the month, or pay the wages.

You might want to read Monika Mundell’s original article, so here it is: 9 Things That Could Ruin Your Entrepreneur Spirit

Promote your small business with a press release

2008-07-15T05:14:55Z

Being a small business founder I know that sometimes you are so busy with doing the actual work that needs to put cash in your bank that you don’t even get to think at some business processes that are not really so hard.

Let me ask you this way. When was the last time that your small business did a press release? For example in Romania are around 1800 functional e-commerce sites, and while I’m in this business, I hardly see press releases from these companies (usually very small companies).

You probably think that a press release is very expensive to do, you need a PR company to write it, then distribute it to their network of journalists and spend around 6 months to pitch them to push your releases in the future. Well, that’s true. But then again, you could start by distributing press releases online for free. It’s not going to have the same result, but you will at least send the word out about what you’re doing, and maybe for a small fee you get it syndicated further.

Got your attention? Well, good news is that there are some portals that do just that: allow you to submit a press release for free, then they syndicate it further, or even gets distributed directly to journalists. And even better, some of the portals are packed with tutorials, samples and guidelines about how to write a press release.

Jennifer Mattern from Naked PR, a “PR blog dedicated to cutting through the crap in online public relations and social media issues with blunt honesty, hard questions, and a healthy dose of skepticism” put up a list of free press release sites where you can distribute your news.

You can also watch Mike Arrington, techcrunch godfather, presentation on how to get and how to respond to press for your startup.

Entrepreneurship is like a boomerang: you can’t get rid of it

2008-07-12T17:53:46Z

We have a joke here. “Why Australians never change their boomerang? Because they can’t throw of the old one as it gets back to them”. God knows why we have this joke as we are on the other side of the Earth from Australia.

If you are an entrepreneur and have a business you can always start a new one. But what you can’t get rid of is the entrepreneur-ism. I’ve once said in one of my articles that entrepreneurship is an opportunity enhancement, it doesn’t directly put money into your hands, but it facilitates it. While doing interviews with entrepreneurs on my other blog Entrepreneur-interviews.com I discovered an amazing truth about how entrepreneurship goes in terms of success and failure. If you ask most of the today’s successful entrepreneurs you will soon find out that they went through a series of business flip-ups, failures and missed opportunities before reaching gold. But they got entrepreneurship in their blood, and they couldn’t get rid of it.

Being an opportunity enhancement, even if you fail from time to time, I don’t think you can stop thinking that maybe the next thing will be the next great thing. Still, having previous entrepreneurship experience doesn’t make starting up a new business easier. It actually makes it harder. Not only that you know what went wrong with the previous one, but this time you also have something else to loose that can make you more cautious: money and pride. And if you had a great idea once, it’s really so hard getting a new one that is as good as the last one.

That’s probably one of the differences between a (small) business owner and an entrepreneur. Not all people are looking to develop their business, expand, or start a new one - they run a business that keep them happy and look no further. Entrepreneurs are different. They have the bug, and it’s like a boomerang. They can’t get rid of it, no matter how much they fail or succeed.

Dr. Letitia Wright interviewed on Entrepreneur-interviews.com

2008-07-12T17:01:31Z

Dr. Letitia Wright have been awarded the Business Press Top 100 Women owned Business awards in 1996. Been nominated for a Stevie™ Award in 2004 and was the National Association of Female Executives Entrepreneur of the year. Been nominated for the Reginald Lewis Entrepreneur of the Year Award from the Inland Empire African American Chamber of Commerce.

I had the pleasure to interview her on Entrepreneur-interviews.com.

Start a business with your family?

2008-06-28T14:47:41Z

One of the questions you should answer before starting a business without outside investment is where to find workforce willing to work at least for a period without having huge financial demands. You simply don’t have the money to pay for employees in the beginning, so you will have to look elsewhere.

Most likely you will first look at your family and friends - they could be helping you at least for a while, until you make enough money to hire on the open market. But is that good or bad?

In my case, when I founded my company, I’ve started it with my girlfriend and her sister for 2 reasons: we seemed to be doing a very complete team (my girlfriend is a PR specialist, her sister a designer and I was doing a bit of coding and taking care of the legal stuff). And the second, we all where available to work with little or no payment, at least in the beginning.

But was that good in the end? It’s hard to say. We did things that we couldn’t have done if we weren’t “family”, but it also prevented us doing other things that we could have done with regular employees. There are at least a few items that are different when working with family or friends:

The bad parts when starting a business with your family:

it’s very hard to impose a decision. You will basically ending up being more bosses for the same thing and it’s very hard for one person to decide something and the others to follow. Because there are no hierarchies.
Normally, as a company owner having regular employees, you don’t have to worry so much about the profit. Of course you do, but you don’t have to discuss this with all your “employees”.
When things go wrong, it’s hard to blame, and it’s even harder to correct things. Things get personal most of the time

The good parts when starting a business with your family:

No matter if you are away, there is always somebody from your family keeping a careful eye on what’s going on with the business. The level of trust is higher
You could ask your family to do things that a regular employee wouldn’t do. Like staying up all night to finish something. Or spending a weekend for a project.
If it goes well, it goes well for all your family.

I’ve found an interesting article written by Small Business Diva (Donna-Marie Coggins) that talks about Hiring Friends Or Relatives. I will comment on that:

Strong Personal Relationships Are Not Guarantees Of Compatible Working Relationships. Agreed, as I soon found out after founding my company, all 3 of us had very distinctive business approaches. Starting from different goals and up to the way we worked with the customers.
Strong Personal Relationships Are Not Guarantees Of Compatible Working Relationships. Something else that is crucial to consider is how well suited or qualified your friend or family member is for the position he or she will hold. Being a nice person or a deserving person does not make you qualified for a job. Agree as well, having somebody on board that is not qualified will greatly negatively influence the other “regular” employees and the overall outcome.
Preventing And Managing Disagreements And Difficulties. If you are entering into a business partnership with friends or family, you must clearly define the relationship, roles, and responsibilities ahead of time. As mentioned by me earlier, this is probably one of the most difficult things when working with your family.

Here is the rest of the article: Should You Hire Friends Or Relatives?

Trouble finding innovative business ideas?

2008-06-28T06:34:00Z

Most often people are afraid starting a new business because they can’t find that unique idea that would make their business great. They think that if they don’t come up with an innovative idea, they are unable to make money and their business will fail.

I remember having these thought myself 3 years ago when I founded my company. It seemed that everybody was doing the same and that meant a new business couldn’t stand a chance.

Funny thing is that actually most business are completely non-innovative, and my advice is as well to start with something, even if it’s not unique. Starting with something is always better than not doing anything waiting for that great idea to happen.

I have 2 resources to support my thoughts. First would be Jessica Livingston’s book “Founders at work” (my review here). Jessica has collected an impressive set of stories and interviews how big boys (now) actually started their businesses - Hotmail, Bloglines, Gmail and all the rest. If you go through the book, you will get that most of the business that now worth millions started by something simple (i.e. a site done in college years) and some don’t even made money for quite a while. And most importantly, their founders never started thinking it’s going to be the next holly grail, and some failed few times before doing it right.

The second resource, is Angus Loten’s article called “The Accidental Millionaires“. “Some of the best business ideas happen almost by accident. From the inventors of the Slinky to the couple behind the software that powers much of the blogosphere, a look at entrepreneurs who took adversity and half-baked ideas and turned them into wildly successful companies.”

Here are some samples from Angus’s article:

Richard and Betty James
Previous Life: Navy tool worker and homemaker
Big Break: Saw a spring coil fall off a table
Bottom Line: Called it a Slinky and sold 250 million of them
Josh Abramson and Ricky Van Veen
Previous Lives: College students
Big Break: Created a website to trade jokes while attending different colleges
Bottom line: The site now boasts more than 8 million unique visitors a month
Carole Nash
Previous Life: Laid-off receptionist
Lucky Break: Was given a small portfolio of insurance policies as a severance package
Bottom Line: Recently sold her insurance businesses for more than $100 million.

What about me? As probably any entrepreneur out there, I’m still looking for that great idea. But in the meanwhile I’ve founded a “regular business”. And this greatly improves my chances to find that innovative business idea.