Posts Tagged ‘entrepreneurship’
Fearless Living …and Working
Wednesday, April 18th, 2012
Q. Would you be able to point me to a resource – book, website, etc. – that I could learn about risk taking and how to do it?
A. Check out a book called “Fearless Living“. The author has a lot of interesting things to say about fear and risk; they kind of go hand-in-hand.
Stretch, Risk, Die.
Rhonda explains the zones of fear and comfort (“stretch, risk and die”) in a very straightforward way. Fear is often as much a part of an entrepreneur’s life as risk. Building a startup often has daunting moments. Starting a business can be intimidating. Managing, coping or resolving fear is critical, and Rhonda Britten’s approach is one of the best.
……………………………..
Is Your Business UPS or USPS?
Wednesday, February 29th, 2012The business world is a sea of constant change. To survive, entrepreneurs and businesses have to be proactive and adaptable to the changes.
Recently, there was a debate on Capitol Hill regarding another bailout for the United States Postal System - an entity that has repeatedly refused to adapt its strategies to accommodate the current market.
I won’t debate if the post office should be granted further subsidies with our tax dollars. Nonetheless, the recent request from the USPS did stir some thoughts on their continual failure to remain both competitive and profitable. This led to a recent discussion I had with a colleague regarding how much more effective private companies are doing the same work than an organization funded with tax dollars does.
A prime example is United Parcel Post. UPS is a massive organization in the package delivery business. Similarly to post office, UPS has longstanding ties in this country; both have labor unions to negotiate with, and other similar operating costs. While UPS and USPS have many similarities, only one, UPS, has been profitable. In 2010, UPS posted a net profit of almost 3.5 billion dollars while USPS reported losses of over $300 million. This amount is even more remarkable when you consider that despite billions of dollars in Federal bailouts, the post office can’t seem to make a profit. On the contrary, UPS has made steady profits for decades in spite of growing competition from Federal Express and other carriers – including the Post Office. This is a prime example of the private sector working more efficiently than a publicly funded entity and that, in this instance, bailouts have not worked.
But how does UPS succeed where the Post Office doesn’t?
I would argue that innovation is fundamental for entrepreneurs to to survive greater competition. Innovation forces even large companies like UPS to continually usher in change to its corporate infrastructure. When was the last time you heard the post office inventing something as oppose to always playing catch up with everyone else? 
So how can a small business, or startup, or any private company be innovative with new businesses techniques and avoid the trap of catching up? There are many answers but I routinely utilize the following:
- Think outside the box. Looking at a situation or problem from all sides and taking it apart can lead to new breakthroughs and answers to questions or problems.
- Hire people that question the organization rather than simply saying “yes sir.” The best employees I have ever had argue and challenge me. It also demonstrates to me they care about the company enough to take on “the boss” and not just blindly comply for the sake of a paycheck.
- Look at what your competitors are doing. You don’t have to be the one who created the mousetrap to be successful – just make it better. Apple never invented the mouse for the computer.
Looking at the history of UPS, I am sure you will find many instances where creative thinking, a staff that questions the status quo, and inventing better products and services has made them far more successful than the Post Office.
At your next team meeting, ask the staff, “Are we UPS or USPS?” and see what kind of response you get.
[NOTE: Thanks to Michael S. Duell for this guest author contribution. Mr. Duell is the Director of Business Operations at Ruyle & Ruyle, a firm that includes small business corporate law as one of its specialities. If you are looking for a good boutique law firm that caters to small businesses and startups, consider Ruyle & Ruyle.]
Q&A: Pricing for a Startup
Wednesday, November 30th, 2011
Question:
How can a start-up business figure out what to price their service? I started an online/app advertising company for bars and restaurants. I need to figure out what to charge these businesses to be listed after their free trial is up at the end of the year.
Answer:
Pricing a new product is a common challenge of many startups; we completely empathize with your situation.
First, you may want to extend your free trial for an extra month or so if you don’t feel you have the right pricing strategy.
Now, to figure out your ideal pricing strategy, have you done any test marketing or “voice of the customer” / focus group type events? Polls? Do you have a large base of free trial users? If so, you might tap some of them for an open discussion in return for an extended free use period.
We also suggest some paid adword activity with varying “calls to action” at different price points to see what the pull is. This can be done on Facebook or Google. You can also test marketing messages this way. If you can spend some money on a direct email to a list that fits your industry, it’s also a way to test pricing in the message to see how many click-throughs you receive.
As we’re not experts on pricing, we recommend two good books (click on each title below to find each book) that address pricing as part of startup marketing:
Marketing That Works (Wharton School Publishing)
and
Real Time Marketing for Business Growth
Ask your own question to the ActSeed team here: http://actseed.com/contact-us/
Marketing That Works
Monday, November 28th, 2011
This is one of our favorite marketing reference books for entrepreneurs and startups.
Make sure this book is in your own entrepreneurial library.
This book explains how the good steak can sizzle without leaving you with just an aroma. “Marketing that Works” was written by some of the best minds in startup marketing who have held prominent positions in blockbuster startups, idealab!, Wharton and venture capital: Howard Morgan of First Round Capital, Leonard Lodish of Wharton and Shellye Archambeau, former president of Blockbuster’s e-commerce division.
This book includes practical approaches (not just theoretical!) to developing business ideas, pricing, market validation, distribution and channel strategies, product launches and more.
To buy a paper copy or download a Kindle version from our bookstore partner, Amazon.com, click here.
TEC – How One ActSeed Entrepreneur Group Member is Sparking the Economy
Friday, November 11th, 2011
Sometimes, an ActSeed Entrepreneur Group member not only has a promising business, but is also an ally in ActSeed’s mission to assist people in building exceptional companies of all types. The TEC Center is one such partner that has the potential to make a positive impact on our economy.
There are a lot of folks hurting for work and wanting an opportunity to leap out-and-up from their current economic situation. As many big companies sit on the sideline for hiring, a growing number of disenfranchised people aspire to take control of their future and create their own job by starting a business or joining a startup. The trouble is: where do they turn? Where can they acquire the knowledge to be a business owner, a business partner, an entrepreneur?
Entrepreneurship is not a reserved for a “ruling class” or exclusive to the highly-educated. At its core, entrepreneurship is about building something of value that others want to purchase and accepting the risks inherent in the process of moving from “idea to implementation”. This includes butchers and bakers, not just iPhone app makers. Just as ActSeed is dedicated to assisting regular people build exceptional businesses, TEC is committed to training regular people to become business partners.
We interviewed Jack Finkelstein, the co-founder and President of TEC – which is as much a movement for positive change as it is a promising young business. We have provided Jack’s contact information at the end of the interview so you can reach him directly and explore how to get involved.
Q. Describe your “Eureka Moment”. What was the market opportunity that drove your decision to form a company around this product/service?
A. The Eureka Moment came when we realized that every one of our graduates will be guaranteed a job. This is a powerful statement to make in the middle of a recession. We also realized that not only are there millions who need our service, but every year an additional 2 million young adults enter our target market zone.
Q. How did you fund the company to its current state?
My partner and I have self-funded the project till now. We have also formed a 501(c)3 not-for-profit corporation, held seminars with Operation Hope in Harlem to test market our program, acquired an office at 590 Madison Avenue in New York City, and started some of the businesses that our graduates will participate in.
Q. ActSeed champions the need for solid planning and preparation from the very beginning. How important is planning and prep to your company’s success? Can you share an example or two?
A. Planning and preparation is important to the success of any new corporation. The seminars we held at Operation Hope and some of the high schools resulted in the following: Young adults in the inner cities with a high school degree or GED degree desperately want and need the TEC Center Program. Not only will they be guaranteed jobs but they will also become partners in the business that they will work in. Our target market currently has an unemployment rate of close to 20%. The TEC Center Program is a valuable program that can provide them with the type of success they may otherwise only dream about.
Q. How long did it take to get your idea into the market from initial concept to first customer?
A. This has been a 3 year labor of love that not only is about a great business venture – but also a “movement.” From understanding the inner city individual to determining which businesses can be formed and remain successful in the inner city has taken up the majority of our time. The last 6 months have been spent in looking for the right nationally accredited school with the proper accreditation, and Title IV abilities that we require for our program.
Q. What influence have the internet and new media had on the way you are marketing, selling and supporting your products/services?
A. An advantage we have is that we know how to reach our target market. Every high school graduating class, every GED class, and even the colleges represent potential students for our program. It is not a surprise that these individuals all have email addresses and a cell phone. We also utilize the internet as a research tool to teach entrepreneurialism to our students.
Q. Describe the challenges you faced as you built your customer base, including defining the customer target, establishing the right price and pricing strategy and of course, closing the first few deals. Any wisdom to share with other entrepreneurs on this subject?
A. Defining and reaching our customer base is perhaps our easiest task. We decided primarily on young adults in the inner cities because they can utilize our services more than college grads. The cost of tuition is covered through Title IV Federal Student Loan Program. Students pay back the loan after they graduate and begin working. Since all students will be working for one of our company-sponsored startups, we do not anticipate any issues in paying back the loan.
Q. What techniques have you used to establish credibility in the eyes of customers, investors, partners, personnel and the general public?
A. The TEC Center Program speaks for itself. Guaranteed government funding for every one of our students (each student gets pre-qualified for the funding). Guaranteed jobs for all graduates. The government spends approximately $100 Billion dollars every year on education and we anticipate that this will continue for a long time. This is virtually a no-risk, low cost business to enter. A classroom of 32 students can be turned around 3 times a day (each class is 3 ½ hours long). This represents enough revenue to support full operations and the company-initiated small businesses. Direct overhead is approximately 20%. Investors salivate over these statistics.
Q. Have government, University, or other community / economic development programs been useful? If so, how?
A. We believe that educators are good at educating but do not make the best entrepreneurs. Most have never owned or operated a successful business. While high schools mostly concentrate on math and science to prepare students for college, we concentrate on entrepreneurship and prepare our students to become partners in a business – a business that they will enter as a partner, without being required to apply any of their own savings. Most inner city economic development offices attempt to convince large businesses to move into their district in order to create jobs (mostly low level jobs). The TEC Center Program provides the tools, entrepreneurial education, training and a myriad of jobs and businesses that students can choose from.
Q. What is the most important thing people never tell you about joining or founding an early-stage company?
A. Most people do not know enough to give sound advice about founding an early-stage company. Entrepreneurs and optimists tell you to “go for it.” Non-entrepreneurs and pessimists tell you that “most new businesses fail.” The real key to success is to keep your expenses down, understand your target market and product (or service) better than anyone else, don’t hesitate to continually challenge all of your assumptions, and have plenty of contingency plans if things do not go as expected.
Q. Is there anything else you’d like to share that we didn’t ask you in the questions above?
A. In addition to an expected healthy financial return to our investors TEC is a shining example of a social value enterprise: a profitable venture that address a major public need and gives back to the community. The success of the TEC Center Program will also help reduce the dramatic high school drop-out rate, especially in the inner cities. Nationally, the high school drop-out rate is 25% to 50%, over 50% in the inner cities. In addition, 50% of college students drop out of college – 30% the first year alone. This dropout rate is called “The Silent Epidemic” because few people are talking about it. These individuals can now learn how to become entrepreneurs and partners in a business. TEC will be instrumental in training the unemployed, single parent families, returning G.I. veterans, and individuals who have been released from a correctional institution as long as they have a high school or GED degree. Something has to be done now. The TEC Center Program takes a major step forward in solving this very serious situation. Having just 1,000 students in each state represents a major contribution to job creation and the economic growth in each stage. We are not in a high-tech business; we are in a high-value business.
Our thoughts about ActSeed: “ActSeed is very professional and I strongly believe that its CEO, Bill Attinger, truly cares about our program. ActSeed has been involved in every aspect of the processes that are required to present the TEC Center Program as good as possible. You can’t go wrong by giving ActSeed the opportunity of matching your program to possible investors.”
For more information about The TEC Center, please contact Jack Finkelstein, founder and President, at jack@theteccenter.com or visit their web site at http://www.tecmembers.com.
……………………….
See You Tonight At StartupCircle!
Tuesday, July 19th, 2011If you are in San Diego this evening, please stop by the monthly StartupCircle event.
This month, Parand Darugar will be speaking. Parand is the founder and CEO of Xpenser a mobile expense management solution: manage time, expenses, and receipts via email, SMS, voice (call and say your expense), Twitter, iPhone, IM (Yahoo, MSN, AIM, Google Talk), or the web.
Prior to Xpenser he spent 4 years at Yahoo! as one of the core architects of the Panama project, as manager of the platform groups (Yahoo! wide centers of expertise providing Java, Database, and other platform technologies), and as the scaling / grid architect for the Apex/Apt project.
Before Yahoo!, he was co-founder and Chief Architect of Blue Titan Software, a venture backed Web Services infrastructure company. Blue Titan was sold to SOA Software in 2005.
Prior to Blue Titan, Parand was co-founder and Chief Architect of VelociGen Inc, a venture backed Web application acceleration and scaling software company.
Positive Impact 365: Big Brands Helping Small Business
Thursday, May 19th, 2011ActSeed has developed a program to help large enterprises and governmental agencies foster entrepreneurship and build early relationships with today’s emerging small businesses and tomorrow’s most promising startups.
There is a natural symbiosis between large enterprises and an “Innovation Economy” full of startups and emerging businesses.
Tomorrow’s market leaders are hard at work today, building companies that will grow our economy by generating taxable profits, creating jobs and contributing to free enterprise. Today’s “big brands” want to engage those young companies that are taking steps to build a solid business foundation for a long life. The same big brands want to avoid companies that show signs of being “here today but gone tomorrow”.
While some of today’s small businesses will grow up to be big brands and dominant market leaders, most successful small businesses will become customers and partners of large enterprises. In addition to selling products and services to small biz, big corporations constantly look for innovation within small companies to find new products, processes and technologies to invest in, license or even acquire.
With over 50% of all new businesses not even lasting five years, it is important for large enterprises to invest time and money with the companies that are avoiding the behaviors that often lead to failure, including a lack of planning, inadequate preparation and the failure to establish sound business fundamentals from the very beginning.
State and local economic development agencies are also very interested in attracting and nurturing small businesses that have potential to grow, create jobs and contribute to the local economy.
Governmental agencies are not usually interested or able to compete in the “home run ball” game that venture capital firms play with its portfolio of young companies, where one big ”hit” (company) might generate enough returns to account for the remainder of the investment portfolio to be written off or sold at breakeven at best. Economic development agencies don’t manage investment portfolios that must generate returns in a finite amount of time; rather, they want to nurture companies that will contribute to the local economy over generations, even if they don’t “get big fast”.
In summary, large enterprises and governmental agencies can use ActSeed’s “Positive Impact 365™” program to identify and nurture the most promising small businesses in specific industries and at specific growth stages.
If you want to learn more about how you can get your brand or agency involved in the Positive Impact 365 program, please send us an email to positiveimpact365@actseed.com.
Accessing the World from Your Own Back Yard
Monday, May 9th, 2011It’s not uncommon that a startup in the USA has an almost immediate international presence, and it’s also not uncommon that entrepreneurs from other countries are trying to access US markets.
While we often talk about how the Internet shrinks borders and facilitates commerce, sometimes a “good ole fashioned” cross-border support group works well, too.
One good example of cross-border collaboration that is helping entrepreneurs and startup businesses in two countries is the Swedish-American Chamber of Commerce (“SACC”), and ActSeed is proud to be a partner with the San Diego chapter. Founded in 1988, SACC-USA is the umbrella organization for 19 regional Swedish-American Chambers of Commerce across the United States. The SACC serves more than 2,300 members in Sweden and the US. 
The mission of the SACC is to facilitate and support trade, commerce, and investment between the US and Sweden – helping Swedish companies find the right partners in the USA and vice versa. This is achieved through effective industry specific programs and events, corporate programs, trade missions, business matchmaking and lots of ”good old fashioned” networking.
The SACC San Diego was founded in 1989 as one of the first local Swedish chambers in America. The Swedish American Chamber of Commerce in San Diego is a non-profit organization with the goal to promote, develop, and increase the Swedish–American contacts and interactions in the greater San Diego area.
More and more, the San Diego SACC is becoming involved in the local San Diego startup scene. Entrepreneurs from both countries are starting to collaborate on projects and help each other tap new markets and find investors. Through the international partnership between the SACC and ActSeed, we can help make sure entrepreneurs, investors and work-seekers in the US are aware of the opportunities emanating from and within Sweden while also helping entrepreneurs and investors in Sweden learn how to leverage ActSeed to participate in business creation and growth in the US.
You can learn more about the San Diego Swedish American Chamber of Commerce by clicking here.
Also, if you are involved with the San Diego SACC and are interested in joining ActSeed’s “Entrepreneur Group“, you can use discount code “SDSACC12″ to receive a 10% discount on either a monthly or annual membership.
If you are an investor from Sweden and want to find startups or small businesses in the US in which to invest, please join ActSeed’s “Investor Group” and start tracking deals; it takes about 15 minutes to get set up and costs nothing for the investor.
…………………
The Realities of Being an Entrepreneur in One Book
Friday, May 6th, 2011“Most people start businesses simply because they just don’t like working for someone else.”
If this quote resonates with you, or even if you have another motive for becoming an entrepreneur, you should read this book.
Scott Shane packs this book with statistics and information that really helps you understand the realities of building a business. If you are a true entrepreneur, this book should sober your expectations and then bolster your resolve. If you aren’t quite there yet as an entrepreneur, this book will properly discourage you from burning too much of your own time and money (not to mention the time and money of others) until you are truly ready to “do it the right way.”
In this book, Shane shares statistics and data about where funding comes from for new business creation, what impact VC and angels have on new business creation, which industries receive most of their funds and who may likely be the best source of funds for your own business. He shares data about how long it usually takes to “turn the corner” with a new business and the demographics of entrepreneurship, too.
The Illusions of Entrepreneurship pulls data from a multitude of resources, including the Federal Reserve Survey of Small business Finance and the Center for Venture Research in New Hampshire. Essentially, Scott Shane has condensed thousands of pages of research into a single, coherent book.
This book is one of the first ones you should read if you are contemplating the plunge into the world of entrepreneurship.
You can purchase this book from ActSeed’s Amazon store here.
Enjoy!
Owing Taxes When Your Biz Doesn’t Generate Cash
Friday, March 11th, 2011Yes, this can happen. No cash to you, but Uncle Sam and your state still expects to be paid. Our friend and valued colleague, JoAnne Berg, CPA and founder of Peer Coaching Network Inc., has allowed us to share her thoughts on this topic as we approach Tax Time.
“Understanding Why Your Business Owes Taxes When It Didn’t Generate Any Cash”
by JoAnne Berg, CPA
Peer Coaching Network, Inc.
Your business has several silent partners: Uncle Sam and his state and local cousins. Many of the decisions you make on a daily basis will impact their take, so it’s wise to be at least somewhat familiar with the tax laws when you run your own business.
One of the most important financial metrics for most businesses is “How much cash did we generate”? However, business owners sometimes do not realize how much taxable income (not cash income) their business generated during the year. Then, at the end of the year, they get a tax bill that they do not expect. This can wreak havoc with cash flow and business growth plans.
Here are a few of the situations that can cause this, and some ideas for how to deal with them.
Your business is required to pay taxes based on the accrual method of accounting, but you’re keeping your books on the cash method.
- Under the accrual basis of accounting, you must record income when you make a sale, not when you get paid. In general, this applies to any business that sells goods from their own inventory such as retailers, wholesalers, distributors and manufacturers.
- However, the amounts you pay out for inventory are not deducted from your net income until the inventory is sold. For many businesses, a lot of cash is tied up in inventory, so it’s not hard to see how you could have taxable profits but no cash!
- It’s extremely important to handle your inventory and sales accounting correctly. Be sure to have your bookkeeper or accountant prepare your monthly financial reports using the accrual basis. It’s worth spending a little more money here on good financial reporting.
- From a business planning and management standpoint, this is where good inventory and credit management techniques come in. Learning how to manage your inventory levels so that you don’t have any more goods on hand than you need to run your business profitably, and managing your receivables so that there isn’t a long lag between the time you make a sale and the time you get paid for it, both make a significant difference in your cash flow and your profitability.
You paid off debt, or bills from last year, during the year.
- Debt repayments are NOT tax deductions!
- If you’re finally becoming profitable and are paying off the loans and credit cards that helped you start your business, remember that you already deducted the expenses that those loans and credit cards paid for in a previous year. This means that your taxable income may be more than the net funds generated from the business during the year.
- From a business management perspective, ask your accountant to prepare a Statement of Cash Flows along with your monthly Balance Sheet and Income Statement. This will help you really understand what’s going on in your business because it reconciles your net income with your cash flow.
You’ve invested in equipment, vehicles, or other assets that are needed to run your business.
- The Federal tax law allows for many of these purchases to be deducted immediately from your taxable income instead of being depreciated over time. This is often referred to as the “Section 179 deduction”.
- This is a great deal, but there’s a trap here. Many people do not realize that this is a tax DEFERRAL, not a tax SAVINGS. The tax savings reverses in future years because you won’t have the depreciation deduction in those years– you used it up when you bought the asset.
- If you think your tax rate will be going up, you may be better off taking the depreciation deduction in future years, when it will save you more money.
- If you finance the purchase with debt, you need to be very careful. A typical scenario is that a business owner buys an asset, finances it, and then takes the Section 179 deduction, saving taxes in year one. However, in future years, they have debt repayments, which are non-¬‐deductible, and no depreciation expense to report. The result? Taxable income is higher than the cash generated from the business. This can result in cash flow problems if you haven’t planned for it.
- From a business planning and management standpoint, think of the tax savings from the Section 179 deduction as a loan from the government that you will have to pay back.
These are just a few examples of what can happen. Taxes can become complex very quickly when you have a growing business with multiple types of transactions. To avoid surprises, always have your tax professional do a tax projection for you well before it’s time to pay your taxes, so that you can make informed decisions when you’re running your business – you’ll be glad you did!
JoAnne Berg, CPA is the founder/CEO of Peer Coaching Network, Inc. in Carlsbad, California. She is a trusted business advisor with over 30 years of experience as an entrepreneur, CFO/COO, and CPA/advisor to closely held businesses. Read her blogs at The Art of Small Business. You can follow her on Twitter @JoAnneBerg and on Facebook.
