Do you want to be your own boss? You might be surprised to know that it is not as difficult as you think. Establishing a home-based business isn't easy but it isn't impossible to do. Here are a few tips on starting a business for aspiring home-based entrepreneurs:
If there's one thing every entrepreneur will agree on, it's that hiring great people is critical to success.
Building great companies is a group effort, and even the most talented entrepreneur will never be able to do everything. So you have to have a great team.
And building one is tough.
In addition to raw skills, you need an intensity that borders on obsession--an attribute that is not a prerequisite for success at a larger company.
Basically, you need people who do their jobs as if the life of the company were on the line.
Because the life of the company is on the line. Every day. The day you forget that is the day you'll be headed for the scrap heap.
Many talented folks from big companies are seduced by the idea of startup life...right up until the time they actually start working for one. Then they realize that the company depends on them in a way that a larger company never will, and they find the responsibility (and workload) overwhelming.
A great startup executive, meanwhile, wants to carry the fate of the company in his or her hands.
You need to find the latter folks. And you'll find them, in part, though trial and error. Interviewing and reference-checking helps, but you won't know for sure that you've hired a winner until they hit the ground and start sprinting.
In the two-year life of the Business Insider, we've hired several talented people who turned out to be better suited for companies that didn't depend on them every day for their survival. All of them have since moved on. We have also hired many talented people who are thrilled that we depend on them every day for our very survival. They wouldn't have it any other way.
How do we know when we've found the right folks?
They have a passion for effectiveness that borders on obsession.
In editorial, for example, our successful writers and editors know that they if they don't produce stuff people want to read, we're toast. So they check their readership numbers obsessively. And when they find themselves low on the readership list, they do something about it.
One morning about a year ago, for example, I woke up at my usual time--5am--to discover that several stories had already been posted to the site. This was a new and welcome experience. Previously, at that hour, I had had the site to myself.
I had never asked the new writer responsible for those posts, Joe Weisenthal, to start at that hour. He had just been annoyed to see that I was up before he was--and getting read more--so he started getting up earlier than I did. Now, thanks to Joe's intensity, as well as that of several other amazing folks on our editorial team, the site's in good hands with or without me.
The same intensity is fueling our sales and tech teams. Earlier this week, we heard whoops and hollers from the sales offices when they re-signed a huge client after several months of courting. Our tech folks, meanwhile, emerged from their coding cave a couple of months ago to be greeted by actual applause in the newsroom for yet another major site improvement.
This intensity, by the way, doesn't come and go. When you have the right people, it's there every day.
Yesterday, I awoke at 5:30 to find not one or two new posts on the site but what seemed like a full day's work, with the first post having hit the site around 3AM.
I asked our new Deputy Editor, Joe Weisenthal, what had gotten into him.
"Honestly," he said, "I dreamt that Tiger Woods had given up golf. And I had to get up to see if it was true."
THAT's the sort of intensity you need.
If you really want to learn how to move up in the business world, you’ve got relatively few sources of expert information. And when you’re done with all the MBA BS, the business self-help books, and God help us - the life coaches - ask somebody who’s done it, and he’ll tell you.
Come to think of it, if you think you can learn what works in the real world from anyone but someone who actually succeeded in the real world, well, let’s just say you might want to rethink your management potential.
In the past we’ve talked about all kinds of management tools and leadership qualities, but this time, we’re going to cut right to the chase. You won’t find these five tips anywhere else, since you’re the first ones to read them. Moreover, these are indeed CEO best practices that I’ve observed in few middle managers - those with CEO potential.
5 Ways to Manage Like a CEO
1. Focus on critical, trouble areas and leave everything else alone. Successful CEOs have learned to rapidly determine when a direct report or functional area is in trouble. Then, with laser-like precision, they go to work on determining what’s wrong and resolving the issue with all due haste. Because of the focus required, too many problem areas can spell trouble, which leads us to the next point.
2. Hire functional experts who are also solid, upcoming managers. The order and choice of words is critical here. You can mentor capable, upcoming managers, but you probably can’t teach them a functional expertise, nor should you or will you have the time. If they’re not eminently capable, you can end up with multiple critical simultaneous problems, which could be job or even career-ending.
3. Business comes first. Business and customers always, always, always comes first. Now, that doesn’t mean you let morale get out of control or internal processes fall apart, but you must recognize that the primary function of the business is business, and that means customers and sales. Any manager who doesn’t get that is doomed to mediocrity and stagnation.
4. Manage up. A critical function of any manager is to provide his boss with what she needs to succeed, and in a manner that fosters a compatible and mutually beneficial relationship. And frankly, that goes for peers, too. If you sense your boss and peers are not getting what they need from you, meet one-on-one and ask. Successful CEOs work with their boards and other key stakeholders the same way.
5. Help to “manage the company.” This is a critical mindset that can make all the difference in your career. If you have a strong silo mentality - my group is all that matters - you will never move up. But if you always remember that one of your priorities is to help “manage the company,” then your chances are great increased. Why? That mindset gives you a broader perspective that will indeed help the company and be positively perceived by peers and executive management.
Okay, so what do all you up-and-comers out there think I missed?
A Virtual Assistant (VA) is a highly-trained entrepreneur and an independent contractor - a talented professional with strong administrative and organizational skills who partners with other business owners and individuals to provide high quality one time or ongoing, collaborative-style business support services. Virtual Assistants operate remotely from their own places of business and work closely with their clients by utilizing today's state of the art technology such as internet, email, voice mail, fax, and other online collaboration tools to deliver a full range of services and to communicate with their clients and meet the needs of businesses all over the world. Virtual Assistants are administrative experts mostly, but there are also many with other skills, such as, Graphics, Event Planning, Database Creation & Management, Social Networking, etc.
A Virtual Assistant (VA) could manage many things for your business: a personal or executive assistant; a secretary; a marketing executive; an administration coordinator; a copywriter; an editor; a proofreader; a bookkeeper; a project manager; a public relations assistant. Your Virtual Assistant is more likely a combination of a few of these professions, all rolled into one efficient, loyal and dedicated professional VA. Virtual Assistants are in the business of offering right hand administrative expertise in helping you to succeed in your business.
The odds are you may never meet your VA because they are nowhere near you! In an age where technology has made the world a much smaller place and where more professionals are working from their homes or in satellite offices, the former 'Assistant' has become 'Virtual' and we are as close as your fingertips. A Virtual Assistant is NOT an employee. When you work with a VA you should look at it like hiring any other type of contractor; an accountant, a website designer, or a consultant. In order for the client/VA relationship to be successful, the client has to have faith and trust in the VA and their skills. If the client can’t hand tasks off to the VA and relax in the comfortable mindset that everything is in order, then the relationship will be a disaster. Virtual Assistants are business owners and they understand what is important when it comes to supporting business needs. A VA, if trusted and relied on, will become a business partner - a key player in the success of your company. A VA will learn all about your business and after working together on a regular basis will begin to anticipate your needs. Because a VA is self-employed, they have a vested interest in the success of your business. The better you do with their help, the more that adds to their success. There's a real incentive to help you achieve your business goals. When any business addresses it's office support needs, it considers employing full time, part time, job-share or temporary staff to fill requirements. Regardless of the level of service, with all these scenarios there are substantial set up costs i.e. office space; office equipment; training and so on. What if there was a more cost-effective and time saving way for you to get the same, customized, flexible and personal level of service without having to bare the above costs at all? Virtual Assistants are freelancers who work from their own office, using their own desk, phone, computer and software. They pay their own expenses; pay to keep their skills training current and they handle their own taxation responsibilities. No more paying for lunch breaks, idle chit chat, quiet days, sick days, holidays, and personal phone calls. Virtual Assistants are dedicated, driven, highly skilled administrative professionals. They assist business owners by allowing them to be flexible with their employment needs while at the same time concentrating on generating revenue instead of being bogged down with administrative tasks. A Virtual Assistant can offer a helping hand to neglected areas of your business. YOU can focus on what YOU do best, running a successful and profitable business.
This is part of my ongoing series of posts and I need to file this one under both Raising Venture Capital and Startup Advice.I remember going to an Under the Radar conference in 2006 in the heat of the Web 2.0 craze. There were tons of young entrepreneurs showing their latest Web 2.0 wares. Ajax was the new buzzword and many companies went overboard. People mistook extra doses of Ajax for a successful product.
Unfortunately this was reinforced by the many conferences that rushed to espouse the benefits of Web 2.0 and the subsequent acquisition sprees of companies like Google, Yahoo!, Cisco and others went out to fill out their Web 2.0 portfolios. Many of these businesses were what First Round Capital called FNACs (features, not companies – this acronym has always stuck with me).
The last 12 months has seen the rise of many new trends. Facebook Apps, iPhone Apps, Social Games and now The Real-time Web (finally a new, sexier buzzword to replace Web 2.0. RIP 2.0. Sorry Tim O’Reilly – you’ll have to work at coining the next trend. )
The last couple of years has also seen the huge initial success of Ycombinator, the Lean Startup and many other product driven approaches to going to market.
Broadly speaking this last trend has been healthy as it has brought an increase focus on launching products that you can test with the market and on capital efficiency. It has also brought about my favorite new term – Ramen Profitable. Someone remind me to do a future post on why I think the Ramen Profitable approach has actually hurt some businesses.
In all of these new product and cost-focused new trends, a big problem has emerged that all of these movements have not addressed. In an era of “launch and learn” is there a need for a business plan?
Short answer: absofuckinglutely. I have seen really great product people espouse the death of the business plan. Do so at your peril.
So, definition: when I talk about a business plan I’m not talking about a 40-page Word document outlining your market approach. That died with waterfall software development. I’m not even talking about your 12-page Powerpoint presentation that you need to raise venture capital or to talk with potential biz dev partners.
I’m talking about your financial spreadsheet. I will quote a prominent, well-known entrepreneur whom I like and respect and who told me when he was raising money, “I don’t know how much I’m going to charge for my product so why should I create an artificial spreadsheet?”
Here’s why. Your financial model tells a story. Let’s take your revenue line. It should talk about how many customers you think you will acquire and how much you’ll charge for your product. If you can’t estimate the former then I would suggest you haven’t done your homework before building the product. Do you really want to spent $100k building a product to discover through Customer Development that the market is too small?
Don’t know how much you can charge for your product? Let’s start with how much value you think you’ll create for your customer if they use your product in terms of hours saved, costs avoided, extra sales, better conversion rates or whatever. If you have no clue then I would suggest you haven’t thought hard enough about whether there is a real problem you’re solving. Better that you find that out before showing off your wares at the next trendy conference only to smoke your friends & families’ money.
What about your competition – how much do they charge? If you plan to charge more than them I need to know how your product will differentiate to command a premium. Going to charge less? How will you go to market in a cost effective way to achieve similar margins as your competitors.
See I don’t care if your projections prove wrong over time. I care about your assumptions going in. I care about the thought that you’ve given to the customer problem. I care about how much you’ve thought about market share, competitors, adoption rates, etc.
My suggestion is that you do a detailed MONTHLY plan for the first 24 months and then an annual plan for what we call the “out years,” 3,4 and 5. Why do VC’s care about these years? Good ones don’t care about the granular details in a startup but they do care about how big the market is, what share you’ll get and what assumptions you make about pricing over time and other market factors. VCs care that you’ve thought about these issues.
The cost side of the equation is also important. The COGS (costs of goods sold) tells me about how big your customer acquisition costs will be. I should be able to test these assumptions against comparable companies. If you’re a consumer destination the revenue and COGS lines should tell me about how big your funnel is, how you fill the top end of the pipe and what your conversion rates will be. Ditto for enterprise software companies.
Don’t know what LTV is? It’s “lifetime value” of a customer. If you don’t understand why this is important I encourage you to do a little Google research. Not knowing can be the kiss of death in raising money but more frankly the kiss of death in your business. Great product managers who are not great business people still often fail.
What assumptions do you make in the cost lines about people? Usually in a tech / software startup 70-80% of your costs will be people. This is where I spend most of my time. How many people will you hire in the first 24 months and in which sequence. How much will you pay? Don’t know the running rate for engineers? Fail. This information isn’t hard to find.
How will your costs scale as your revenue scales. We see many naive entrepreneurs who tell us, “My revenue will grow to $60 million by year 5 but my costs mostly stay flat. I won’t need to hire many engineers or customer support staff. This stuff is ‘zero gravity.’ Our Net Income will be $40 million.”
Really? 66% Net Operating Margins? Show me companies doing this. I don’t think my job is to teach you economics or financial modeling. And frankly I’m somewhat forgiving of people who are naive about the “out years” like I outline in the last paragraph. But many investors are not so forgiving. Do your financial model and run it by friends or colleagues for feedback.
Finally, one last point about financial models. They are not just for fund raising. They are the most important document you can prepare to align your management team on where you THINK your business will go. They are your map. If you’re flying from SF to NY with no map I can assure you that you won’t get there.
Each quarter you should review your model. What assumptions proved wrong in the last quarter. How does that change your assumptions going forward? Too aggressive about the rate of customer adoption? Better to model that now. You might then slow down your burn rate or raise more money. Your funnel wasn’t wide enough? Do you need to rethink referral deals or do you need to improve your conversation rates to hit the same revenue numbers. Or do you need to raise prices? Or lower revenue assumptions.
You get the point. Financial models are the Lingua Franca of investors. But they should also be the map and the Lingua Franca of your management discussions.
What would you think if you were hired for a job, not because of your skills, your sunny personality, or even (let's just say it) your appearance; because, instead, the company was focusing upon your genes to determine if you're a good match or not? That's exactly what innovative company Arbita is proposing by taking a closer look at how the Human Genome Project could play a role in job recruitment.
Genome Recruitment ProjectArbita is a recruitment marketing company that's decided to participate in the Human Genome Recruitment project to help pinpoint which essential genes relate to specific skills and elements that can help employers determine whether someone will be a good fit for their job or company, or if they should move onto the next candidate.
For those looking to participate in a project that could potentially be the wave of recruitment in the future - there's a survey published on Arbita's website. Some of it seems to be for the progression of their company, while part of it will help researchers
eventually determine how to hire by simply looking at DNA.
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