Are you really an entrepreneur?

I’ve heard the definition of an entrepreneur is someone that sees a need or problem and designs something to fix said problem.  Sounds easy enough, right?  I see problems every day – I could do this!  You’re thinking, piece of cake, I could too! Just how do you know if you’re an entrepreneur? Take Dan Isenberg’s Two Minute Entrepreneur Test to see if you’re destined to be an entrepreneur or if you may want to do some more soul searching.  Love #15, Can you start without gobs of money?

Then, if you want a second opinion, you can also answer 20 questions by Seth Kravitz, SecondCityCEO, that delve further into the realities and sacrifices many entrepreneurs face.   Warning – this test really goes for the ‘gut check’, for example are you willing to miss your kids’ baseball games and dance recitals?  Put personal relationships at risk? Live without a vacation for years?  I love his question #2, I embrace Failure.  I’ll admit, I failed this test with flying colors.

Many people consider themselves entrepreneurs or as ‘having the entrepreneurial spirit’.  One thing I’ve learned in working with this population is that many entrepreneurs have a distinct and unique personality, yet there are some common traits and characteristics (definitely a topic for a future blog).

I would also surmise that there are entrepreneurs out there that have been turned down for financing, scored low on assessments and driven their friends and families crazy, yet ended up with a successful idea or invention.  I recently read that Apple, eBay and Google (among many others) were initially turned down for venture financing.  It takes perseverance, passion, drive and common sense to keep pushing your idea.

In response to the two tests, what other considerations are important for entrepreneurs?

Show me the Money!

Unless you have a rich uncle that has left you a large inheritance, you will most likely need to look at your own bank account to find the money to start your business.  One of the biggest misconceptions for financing a business are that there is FREE government money available to start a business, especially in the form of a grant.   Unfortunately, the truth about grants and loans is that they are not readily available and even if you are able to get a loan, you are going to have to have to use your own resources.  The average entrepreneur needs about $20,000 (at least) of their own funds (borrowing from family & friends, maxing out credit cards, using personal savings) to get a business venture going.  If you think that you don’t need any cash on hand to get started, you may want to think again and run some financial projections.

According to an article by US Bank, “Getting a small business loan from a bank is difficult because start-ups are risky ventures and banks are not known for their risk taking.  That’s not to say that small business loans aren’t out there, just don’t hold your breath.  Grants from the government work similarly.  They’re hard to come by and the time it takes to search for them could be better spent working on the business itself.” With the tight credit market and tough economy, bootstrapping, or the process of starting a business without any outside financing, is becoming the only option for many entrepreneurs.  Do you have any advice for other entrepreneurs?

If you’re not familiar with the term ‘bootstrapping’, you may want to attend a short workshop on March 3rd to learn more about your options for financing a business.  This is the third workshop in the Yakima Valley Entrepreneur Network’s ‘Working Lunch Series’, presented in partnership with SCORE.   This class will focus on financing options for getting your business off the ground, how to prepare a loan package and the truth about grants and free money.  Workshops are taught by professionals with real-world business experience.

• Financing your Business, Wednesday, March 3rd, 2010.  11:30 a.m. to 1:00 p.m.

Held at the Central Washington Business Resource Center, 10 North 9th Street, Yakima 98901.  Classes are $10.00 each if you pre-register or $15.00 at the door and includes the price of lunch.  To register or for more information, call me at 509.575.1140 or email tammy@ycda.com.

Business Plan=Plan your Business

Just how important is a written business plan?  Do you really need to spend all that time with a plan, I mean, you know exactly what you want to do, it’s all in your head, right?  Understanding what goes into a business plan is almost as important as the plan itself. If you know you should do a plan but aren’t sure how or where to start, we’ve got a workshop for you.   I would also emphasize that if you are going to be seeking ANY outside funding, a business plan is essential.

Business Plan Basics is the second workshop in our ‘Working Lunch Series’.   If you are thinking about starting a business, these workshops are for you.  Attend one or all of the sessions to learn what you need to get started.  This class will focus on business plans and you will learn the basic components of what goes into a business plan.  Workshops are presented in partnership with the Yakima Valley SCORE Chapter and taught by professionals with real-world business experience.

• Business Plan Basics, Wednesday, February 17th, 2010.  11:30 a.m. to 1:00 p.m.
• Financing your Business, Wednesday, March 3rd, 2010.  11:30 a.m. to 1:00 p.m.
• Marketing your Business, Wednesday, March 17, 2010.  11:30 a.m. to 1:00 p.m.

Held at the Central Washington Business Resource Center, 10 North 9th Street, Yakima 98901.  Classes are $10.00 each if you pre-register or $15.00 at the door and includes the price of lunch. Register online or for more information, call me at 509.575.1140 or email tammy@ycda.com.

You can also get assistance from  the YVEN Business Plan Assistance Page, meet with a SCORE or SBDC counselor or use a software program.  I was thinking about starting a home-based business on the side a few years ago and ran the projections and numbers through Business Plan Pro and realized that I would be making less than a dollar an hour.  Needless to say, that was quite a bit different than the $50 an hour I thought I would be making!  What are your best tips for preparing a business plan?  In your experience was it necessary and/or helpful?

There is no ‘I’ in Entrepreneur

If you are an entrepreneur or small business owner and haven’t formed a business team yet, you should consider it.  I attended the Northwest Entrepreneur Network Think Tank last week that had presentations from two emerging businesses that were recent winners of NWEN’s First Look Forum.  They both stressed the importance of building your business team, from a CEO, CFO, CPA, to M-O-M whether it is to help run the business, gain financing or even just for moral support so you don’t have to go at it all alone.

Many entrepreneurs have an idea that they want to protect so they are hesitant to bring in an outside person.  This is understandable, so it is wise to choose your team carefully.  The best example was from one of the presenters who said he just wants to be the ‘crazy inventor guy’ so he needed a business partner to run day-to-day operations and, more importantly, come across as more ‘business-like’ in pursuing financing.  In his case, he has a team member that runs the business end of it, and a Chief Financial Officer.

Other key team members you should have access to would be an accountant or CPA, an attorney, a banker, and if you’re married, it might make things easier on the home front to have your spouse on board (maybe not involved in the business, but at least supportive of your efforts!).  Keep in mind that there is free business counseling available through our local SCORE Chapter and the Small Business Development Center.

What other key people should be involved?  Do you have any experience with forming your business team and if so, what lessons did you learn?

Do you want to BYOB?

Or in other words, do you want to Be Your Own Boss?  If you are thinking about starting your own business, our workshop on February  3rd is just for you.  Attend the first workshop in the Yakima Valley Entrepreneur Network’s ‘Working Lunch Series’, presented in partnership with SCORE.   If you want to start a business, attend one or all of the sessions to learn what you need to get going.  This class is perfect for you if you want to start a business, but are not sure where to start.  It also includes a brief self-assessment to evaluate your readiness for starting a business.  Workshops are taught by professionals with real-world business experience.

• Thinking about starting a business?  Wednesday, February 3rd, 2010.  11:30 a.m. to 1:00 p.m.
• Business Plan Basics, Wednesday, February 17th, 2010.  11:30 a.m. to 1:00 p.m.
• Financing your Business, Wednesday, March 3rd, 2010.  11:30 a.m. to 1:00 p.m.
• Marketing your Business, Wednesday, March 17, 2010.  11:30 a.m. to 1:00 p.m.

Held at the Central Washington Business Resource Center, 10 North 9th Street, Yakima 98901.  Classes are $10.00 each if you pre-register or $15.00 at the door and includes the price of lunch.

Register online or for more information, call Tammy Everts, Business Development Director at 509.575.1140 or email tammy@ycda.com.

Penny for your (original) thoughts

Do you think you’ve got the next great original idea or invention?  This is more difficult than one thinks.  If you think it’s easy, just try to come up with a unique name for a business or website.  Chances are, if you have thought of the next best product, website, retail idea or invention, someone else has too.  I’ve thought I’ve had some one-of-a-kind ideas and talked to people that also have, only to find out upon further research that there is sometimes the exact name or identical product already out there.

It can really be discouraging to the potential business owner to find out another person had their great business name, idea or product that he or she was going to make or sell and become a household name.  The good news is that there are some free tools you can use to search patents, trademarks, business names and more.

• Washington State Trade Name Search:  Before you license a business in Washington, you should verify that the trade name is available.
• Here’s an excellent page on Patents, Trademarks and Copyrights – Business.Gov/Intellectual Property
• Free patent search US Government Patent Office or Google Patent Search. Read more about the US Patent Process.  Be wary of these websites that offer assistance with ‘free patents’, they could be too good to be true.
• Free trademark search:  US Government Trademark Home Page
• Find out if you need a copyright for that blog, movie, book, etc. US Copyright Office.  There is an excellent FAQ page.
• There are numerous free website domain name searches available.  Two that I’ve used are godaddy.com and networksolutions.com.

These links are just a starting point when it comes to innovation and business assistance.  What are your favorite websites for business resources?

One of our Entrepreneur Network strategies for 2010 is to identify and assist Yakima Valley entrepreneurs, inventors and emerging businesses.  We realize that we can’t recruit a large 500-employer company to the region every year and are making a concentrated effort to ‘grow our own’ companies.  If we can assist ten emerging companies that will grow to 10, 20 or 100+ employees, it will only help to diversify and stabilize our economy.

Stay tuned for more on assisting inventors and entrepreneurs and for more exciting news on our first business plan competition this fall – we’ll have details soon.

Skin in the Game

College basketball season is here and for some reason when teams have similar colors it makes me think back to my junior high days when the boy’s basketball team would scrimmage and teams would be divided up into ’shirts’ and ’skins’.  The more I learn about bootstrap financing, the more I’ve heard about  ’skin in the game’.  This expression is now a business term attributed to the well known investor Warren Buffett referring to a situation in which high-ranking insiders use their own money to buy stock in the company they are running.

If you have started your own business, chances are that you contributed a significant amount of your own ’skin’ or money into starting your business.  If an owner doesn’t have something invested, there really isn’t much risk at failing.  Bootstrap financing is another buzzword referring to the same concept – as the owner or entreprenuer you need to tap into other resources such as personal savings, family and friends for start-up capital.  The average entrepreneur invests $30,000 of his or her personal funds.  If you’ve tried to get a loan recently, you are well aware that lending regulations have tightened up!

In Washington State, there are some small business loan programs, microloan programs and grants available for start-ups, but these still require an investment  on the part of the business owner.  Also, you will most likely also need a business plan, financial statements and financial projections for any grant or loan application.  There are extremely limited grants available for the average business venture and unless you have some revolutionary product or are working on a high-tech or technology product, grants are even fewer and farther between.

What is your best advice for someone looking for start-up?  Save what you need? Perfect your pitch to try and access venture capital?  Borrow from mom & dad? Max out credit cards?  We’d love to hear what has worked for you and/or important lessons learned.

EDA Grant to Support Entrepreneurship

We were recently notified that we secured a $100,000 federal grant to support our entrepreneur initiative.  The United States Economic Development Agency (EDA) grant will help us take the Yakima Valley Entrepreneur Network to the next level.  We plan to organize an initiative for inventors and stage two business plan competitions in 2010-2011.  The funds will also allow us to offer special business seminars and help ensure that the initiative works throughout Yakima County.  Our team is quite pleased with how much has been accomplished in our first year and now we have significant new resources to sustain our emerging business initiative.  Stay tuned for more news and updates about New Vision’s entrepreneur network and for contest details.  Check out the video "Help for Entrepreneurs" on KAPP TV’s website. 

If you have any questions or suggestions surrounding this initiative please contact me at 509-575-1140 or Tammy@ycda.com.

Social Media – Fad or Foe?

Are you fighting the invitations to join all the social media networks?  Or are you waiting for them to pass?  According to Guy Kawaski, Founder of Alltop, Inc. and entrepreneur-in residence of GarageTech.com, "Most entrepreneurs still don’t know how to use Twitter. They still think it’s a social network to update their friends on the current state of their pets or the lines at Starbucks. For entrepreneurs, Twitter is the ultimate marketing platform, and they need to embrace tools like Tweetdeck, CoTweet and Objective Marketer".

Social networking and social media are here to stay.  If Facebook has 300+ million users and LinkedIn has over 50 million, just think of who you could reach.  I’ve been reading a lot about how to maximize the social media experience; the most common takeaways I’ve found are to:

1. Strategically choose your social media venues to get the most out of it.  Rather than sign up for everything at once, pick a few to get started.  For example, Facebook, LinkedIn and another one that is industry-specific. 
2. Know your market and who you’re trying to reach.  Who is your customer and what is the best way to reach them?
3. Take it in small steps!  It is easy to get overwhelmed and overloaded if you’re new to social networking.  It’s also easy to get caught up and spend way too much time on these sites.  Learn about applications that you can post to one spot and it will update your Facebook and Twitter accounts.
4. Respect other users and practice good web-etiquette. Constant postings may backfire on you – I know I’ve hidden some Facebook ‘friends’ (businesses included) who posted constantly, and really don’t appreciate getting daily emails (or in some cases, more than once a day) from the same person or group reminding me of upcoming events.     
5. Take advantage of as much FREE social networking as you can.  I’ve always said, "If it’s free, it’s me", why pay if you don’t have to?

Not sure how to start?  Here’s a great link to "How to use Facebook for Businesses" by Hubspot.  It even has a downloadable manual and instructional videos on social media.  What is your most valuable social networking tool?  What is the best thing you’ve learned about social media?

 

Red into Black

It seems anymore that Thanksgiving is now secondary to Black Friday, the biggest shopping day of the year.  The days of stores opening at 5 a.m. have started even earlier – 3 a.m., Midnight, Thanksgiving Day – in efforts to attract shoppers.  Do you know why it’s called Black Friday?  If you think the reason is because shoppers get up in the wee hours and it’s still dark out, think again. 

I struggled with accounting classes in college – I never really understand the whole debit and credit stuff, but I did learn the difference between being in the red and the black, which in the accounting world, black is good and red means you are in the hole.  If you have a business and don’t know where the point on your balance sheet that you go from ‘red’ to ‘black’, you might want to brush up on your financial statements. 

If  Black Friday is historically the day that companies go from being in the hole to turning a profit, does that mean they operate almost ten months in a deficit?  I remember talking with an entrepreneur this summer and asked how business was.  He stated that he was finally in the month where he earned a salary, so things were looking good!  He also knew precisely where he was at dollar-wise to be at his break even point.  One trait of effective managers/owners/CEO’s is that they know every aspect of where their company is fiscally – revenues, expenses, salaries, projections, etc. 

Keep this in mind if you have a business or are looking to start one – you can’t just rely on your accountant or bookkeeper – you need to keep a close eye on your budget for the economic health of your company.  There are free resources for you if you need help or aren’t sure where to start.  Give me a call, contact your local SCORE chapter for a free counseling session, or set up a time to meet with the Small Business Development Center. 

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