7 TIPS TO GUIDE YOUNG ENTREPRENEURS

By: John Pilmer

The world needs new entrepreneurs. Entrepreneurs create jobs, lift the standard of living, usher new technology into society, and keep competition alive in the marketplace. Starting a business is difficult, and it’s crucial that the next generation has as much ammunition as possible. We are all relying on you to carry on the proud tradition of innovation.

 

As the CEO of a successful startup myself, with decades of experience launching prosperous companies, I know what it takes to make it. If I could go back and give my 20-something self a bit of advice about starting out as an entrepreneur, these are the seven tips I’d start with:

1. Passion. You will fail. That is part of the game. Your failures are most likely to lead to success if you get involved with something you believe in. Starting a business just for its own sake will leave you directionless, burned out and ultimately, back where you started. Choose an interest that you can be passionate about. Marrying charity to traditional business models may be a great way to combine the things you – and potential consumers – care most about.

2. Define your market. You’ve heard this before. It’s one of the most common mistakes that entrepreneurs make. Go with something that makes sense for your scope. If you’re a small startup and still a student, staying local or targeting fellow students might be the best direction. The Internet gives us almost infinite reach, but it’s vital to narrow your market down to what is realistic, and stick with those who have a reason to be interested.

3. Price point. Risk taking is important in any new business venture, provided that it is sensible. Consider providing your product or service at the most basic level possible (also called minimum viable product). A small investment up front can hook new customers/donations before risking more money. Your target defines the ideal price. Survey your defined market and adjust accordingly. You can always reevaluate your prices as you grow.

4. Be honest. This advice applies to yourself, your employees and your customers. Be honest about what you can commit to your business. It doesn’t do any good to over-extend yourself when in truth; you don’t have the cash or the hours to commit to a project. Be honest about what your partners can expect from, and what you expect in return. And be honest with clients. At PilmerPR, our #1 rule is “First be good, then talk about it.”

5. Utilize, but don’t over-use, social media. Young people are always eager to jump online, and that’s not a bad thing. But it is important to think carefully before plastering marketing materials on the Internet. Social media is obviously a powerful tool. Focusing it on your business can get word out quickly and cheaply. That said, be careful not to put all of your eggs in the online basket. Experiment and measure results, then constantly evaluate and decide what is working, and what you are wasting resources on.

6. Don’t forget PR. Traditional and online press relations can yield coverage that has longer shelf life and costs less than advertising. Think about what makes your product new, interesting, and relevant. Then, talk to the media about it. You might get great reviews, mentions on blogs, or even appear on news segments. Many media outlets have sections dedicated to people in the community doing outstanding things. Even an article in your campus newspaper can be a valuable source of publicity.

7. Look for mentors. The beginning of any venture can be exhilarating, frustrating, liberating and terrifying all at once. Remember, although younger generations can be more tech-savvy than those who have been in business for years, there are still basic principles that are refined by experience. Many communities offer networking opportunities for entrepreneurs young and old. Take advantage of this, and you may be surprised at the wealth of knowledge your colleagues have to offer.

These tips won’t earn you certain success, but every bit of knowledge you can gather before you begin your entrepreneurial career can help you avoid serious mistakes.

3 MUST-TRACK METRICS FOR BUSINESS SURVIVAL

"Businesses are separate legal entities". When most entrepreneurs hear this, they don't think beyond "...yes, my business can sue or be sued" however, there is more to the statement than meets the eye. Having looked deeply into it, I have uncovered something even more powerful.

Every human being is born with a survival instinct. We do not need to be lectured on the need to breathe, eat, or create value to get money, these things are found out almost naturally. To continue to exist and live well, we need to make sure we breathe, eat, and create value.

In the same vein, businesses (as intangible persons) also needs to survive by making sure that it breathes, eats, and create value. These three components are vital to business survival and growth so every entrepreneur must pay close attention to it. So what does a business breathe, what does a business eat, and how does it create value? What  are those metrics you need to monitor to ensure your business doesn't die? Here.

1. CASH-FLOW: Cash is king, and even more importantly, cash is air. If you have a startup or you run a business, you will agree that everything revolves around cash; thus it is referred to as the air of the business. With enough cash, the business lives, with no cash, it dies.

Because  cash-flow is so important, the first metric every entrepreneur must monitor closely is the cash-burn rate. The cash burn rate tells you how long before your business will run out of cash. It details how much cash you have available, the biggest bills you must pay  and when the payments are due.
If you have more than a year's worth of cash in the till, you are in good shape. If you have between eleven months and three months before you run out, you should be getting nervous. And if there's less than three months, you have a cash crisis that will require a big financial infusion, huge layoff, or an orderly shutdown.

2. CUSTOMER BASE: Every business feeds on (or off) its customers, and every customer is important. No matter the industry, every business is designed to sell something to certain people. So if there is no one (or too few) to sell to, such businesses are on the highway to demise. It is therefore highly important for businesses to track the growth of their business through the Customer-growth monitor.
The customer-growth monitor tracks the growth rate in number of customers and revenue. It details the number of users of your product and  how frequently they use it, how many of them are recommending your product to people in their network, how many of them are paying for it and how much they shell out.
Your customer-growth monitor is flashing a green light if more people are using your product frequently, if many of them are recommending it to their network and if an increasing proportion is paying a higher price for it. If customers are not recommending the product and very few are willing to pay for it, find out why and change your product. And if you’re not getting more customers or they’re not paying for your product, then you need to take more radical measures.

3. PRODUCT: It is the job of every business to create value and solve problems; that is how money is earned in return. The value being created can either be a product, a service, or both but whatever it is, it has to give people a compelling reason to give money in exchange, which is why every business needs a Product-development tracker. The product-development tracker lets you know whether you are on schedule for building the right products. It details the timeline for your products, whether your team is meeting its milestones and if not, what’s holding things up and the feedback you’re getting from
customers about the prototypes you're releasing to them.
Your product-development tracker will flash green if you are ahead of schedule and customers are giving useful feedback on the prototype. If you are falling behind on the
schedule and not getting customer feedback on the prototype, you're in trouble -- and should investigate why and make changes

Its vital for every businesses to pay close attention to these metrics. They should be monitored at all times, and not at the end of the year. Every other thing can wait till then but not these.
As Peter Cohan puts it, put them on your business dashboard. This will help you to spot danger signs and respond to them in timely fashion.

Cheers to your business' success