Entrepreneurship is a state of mind that can be embraced by young and old alike. Successful entrepreneurship almost always starts with a plan – maybe not a 60-page tome that looks like a doctoral thesis, but something in writing that expresses how a person or a team will take an idea and turn it into a viable business.
Last week, I served as one of the judges for the Young Entrepreneurs Project (YEP) Business Plan Competition in San Diego at MiraCosta College. Thank you, Joe Molina, for inviting me to participate with such a thoughtful peer group of judges, and congratulations to all of the high school and college participants for such a rich experience. …and thanks for the opportunity to enable ActSeed to continue supporting entrepreneurship within the community college environment and Small Business Develoment Centers like the North San Diego County SBDC.
Congratulations to the winners. First and second place in both high school and college received a cash prize to pursue their business goals. Third prize winners received a lifetime Entrepreneur Group membership to ActSeed to help them prepare their idea for the rigors of the marketplace.
While this contest showcased a small sliver of the population of entrepreneurs in the world, the opportunities these aspiring entrepreneurs were developing were diverse and creative. I’d like to share a few personal “takeaways” from my experience – thoughts that should be shared beyond the contest with all young entrepreneurs:
- Make sure you can tell your story in one good visual slide. Just one. One contestant presented the perfect slide in his pitch, but didn’t include the same slide in his business plan. Ideally, the perfect visual is either the cover page or at least on the first page.
- Make sure you can tell your story in numbers. Most young entrepreneurs likely don’t have a lot of background in applied business math. This isn’t trig or calculus, but simply being able to model your revenues and expenditures in a way that shows how and when you will make money – and how much money you’ll need to get to that point. Don’t just blindly fill in a template or formula that someone gives you. Rather, I’d recommend building your own rudimentary formula so you can really understand “what goes in, and what comes out (and when!)”. Don’t hesitate to get outside help to get this piece right.
- Yes, you have competition. There is no such thing as a business with no competitors. Competition can be anything that makes someone in your target market decide not to open their wallet for your product or service. Make sure you are very clear how you will differentiate your product or service – in other words, uniquely why someone is buying or will buy from you rather than choose not to.
- It will take longer than you think. Yes, some businesses make $100k in their first month of operation. Just don’t think it will be yours. Whatever you strongly believe about your revenue potential, delay it by 6-12 months (depending upon the type of business) and you’ll likely be closer to what will really happen. Remember that many companies are operational (i.e. fully open for business) for about 2 years before making meaningful revenues. There’s a strong correlation between surviving for two years and being successful, suggesting that you should expect the first two years to be an intense (but ultimately gratifying) struggle.
In summary, I’m grateful to be blessed with the insights that judging the YEP Business Plan Competition offered. I was encouraged by the potential I saw in what I believe are some of the future leaders of our economy.
Maintain focus and tenacity. Balance a healthy dose of dreaming with pragmatism. …and let us know if ActSeed can help you and your startup survive and thrive!