6 steps to being your own boss

Young entrepreneurs have to work hard to overcome inexperience and gain credibility. These tips increase your odds of success when starting out and starting up.

By Kiplinger's Personal Finance Magazine

Got that entrepreneurial spirit? You aren't alone. In fact, two out of three teen-agers who completed last year's Junior Achievement "Interprise" Poll on Teens and Entrepreneurship said they hope to start their own business one day. But it takes more than a good idea and a desire to be your own boss to launch a successful venture.
Just ask Max Durovic. At 18, he increased his odds of making it with formal and thorough business planning. By taking the right steps, he built a booming business before he even graduated from college.
While a sophomore at Georgetown University, Durovic founded the inventive street-advertising company Aarrow Advertising. He began hiring 14- to 24-year-old students to carry sandwich-board sign ads for nearby retail chains and to perform trademarked tricks, spinning and tossing the signs to attract attention. The sign spinners received hourly pay with a 10-cent increase for mastering each new trick. Durovic turned the idea into a booming livelihood by crafting a complementary team with an expert mentor, meticulously writing a business plan to focus his vision, following the financial feedback and continuing to plan. Now at age 22, he leads 200 employees in five cities and has revenues that have grown at an average rate of 10% per month.
Early on, Durovic faced one of the biggest challenges of enterprising young adults: the credibility gap. Most entrepreneurs endure long hours, challenging management decisions and months without income, but young entrepreneurs may face larger hurdles. With minimal work experience, limited financial resources, fledgling credit histories and no startup experience, they often have difficulty convincing people to take their business ideas seriously. Startups are already risky -- inexperience adds more risk. In fact, one in three new businesses fails by their second year.
How can you minimize your risks? Use our checklist to get ready. We'll help you carefully weigh whether to trade valuable years of traditional work experience for your new business dream -- and then how to pull it off when you're ready.

Get some experience

If you've never clocked a day of work in your life, you might consider taking a job before striking out on your own -- even if the thought of doing time in a cubicle makes you shudder. Work experience in the field you want to break into may be the most productive use of your energy. Think of it as a paid research position. In a couple of years, you can give your business a go. By then, you'll have learned the ins and outs of the real world and reduced the risk of total inexperience.

"Financial literacy is the language of owning a business," says Irwin Rudick, the vice president of the San Diego chapter of SCORE, a nonprofit firm that gives advice and training to small business owners. So, if you're still in school, take classes in business, management or entrepreneurship. If you've already graduated, sign up for night classes. Durovic, an international business and marketing major, says that his formal business education has been integral to his success. "Nothing brings the classes to life like running your own business," he says.

Build a winning team

Bring on people who complement your skills and fill in the gaps. Mary Beth Metrey, a 24-year-old Spanish literature master's student at Georgetown University, had always dreamed of opening a boutique, but her short stint in retail didn't provide all of the details of running a shop. But Heather White, her hometown friend from Wyckoff, N.J., had studied fashion design and merchandizing. Naturally, Metrey asked White to be her business partner when she opened her charming new shop, Valise, in Georgetown this spring.

Fight inexperience with advice

Universities and alumni networks are great sources for mentors. Durovic found business plan help in a Georgetown entrepreneurship class, and he continues to consult with his former professor on business decisions. Ryan Comfort, a 22-year-old grad of the University of Pennsylvania's Wharton School and founder of the online art sales business Comfort2020.com also found cost-cutting connections through his school's alumni network.

The Internet is another great place to get free advice. SCORE, for example, boasts a mentor network of more than 10,000 mostly retired entrepreneurs nationwide. You can search by related background and meet the mentor locally or by email. You can also get feedback online from 12,000 peer entrepreneurs at YoungEntrepreneur.com.
And seek out local organizations. This spring, New Yorker Leah Alani, 27, founded SophieSays.com, an online boutique for stationery and gifts for special events. She gained the confidence and the practical skills to accelerate the startup date after taking a four-week class with Ladies Who Launch, which has local chapters in metropolitan areas.

Write a bulletproof business plan

One of the biggest mistakes a young entrepreneur can make is simply failing to write a business plan. There is no other single process that can be more useful in beginning business problem-solving than addressing the risks and thoughtfully forecasting by writing the plan. Don't fall into the excuse that you have the business plan in your head. "That's a fantasy," says SCORE's Rudick. "It only becomes a reality when you put it into writing because when it's in your head, no one else can see it."

Not only is it a good planning tool, but a solid business plan is also your key to raising capital -- the money you need to get your show on the road. Although you may not have had time to build a long credit history to show that you are financially responsible, you can demonstrate your penchant for using sound judgment by crafting a document that sells your business and lures financers on board. It's your greatest opportunity to fill the credibility gap.
A business plan will showcase your product or service, how you plan to make a profit and the exceptional team who can bring the business to success. It should include market data and tests to show the service or product will sell, the essential skills that will drive profits, estimates for startup costs, projections for sales and profits, a break-even analysis and long-term goals for the company.
If, while writing the business plan, you decide from your research that the business isn't as sensible or profitable as you originally thought, the plan has served its purpose. Rather than cost you money and effort, you've spared yourself any loss. Once you've crafted a plan that satisfies you, show it to your mentor or entrepreneur friends and ask for their input on how to improve it.
Find inspiration from sample plans at bplans.com. But be sure your plan shows your original thinking for the unique situation so that readers can see how the team problem-solves and relates to the business, says Stever Robbins, business consultant and startup veteran of nine companies.
The top-rated Business Plan Pro 2006 ($100 and up) from Palo Alto Software will walk you through the entire planning process. It includes cash-flow projections and a useful tool to help you understand when you'll break even. With the $200 Premier edition, you can collaborate with other teammates and split up specific parts of the plan to streamline the process. Best of all, it includes freebies like a company logo crafter and a guide to small business law.

Raise money

Your business plan should overestimate how much money you will need from the beginning because it's easier to raise money before the launch than it is after you've failed to meet projections. To minimize risk, limit the amount of personal money that you put into the business, says H. Irving Grousbeck, co-director of the Center for Entrepreneurial Studies at Stanford Business School. Also, you'll be tempted to use credit cards, but credit-card debt is the most expensive debt you can have. Try to steer clear.

Clutching a business plan that sells, go first to a bank to request a loan. "Banks are conservative, and they're still in business," says Robbins. If you have a FICO credit score of 680 or more and you're seeking a loan for less than $50,000, you'll likely be granted the loan, says SCORE's Rudick. Even if the banker can't offer you a loan, ask for his or her advice about how to improve the plan so you can try again.
If your credit history is too short, friends and family may be your best shot. But tread carefully: Set the loan up like a formal business transaction that explicitly states when it will be repaid. A smart way to manage a loan between family or friends is with a professionally-administered loan from CircleLending. The company will send statements and track payments -- and provide healthy distance.

Follow the money

Count on a cash cushion to live on for at least the first six months because you likely won't have an income. Conserve your money before you start. (See Build Your Financial Foundation to learn more about how to build your stash -- and where to keep it.) Once the business launches, regularly compare your actual income and expenses to your original forecasts to take the pulse of your company. Intuit's QuickBooks software ($200 and up for Pro and more advanced versions) features many bookkeeping tools and services such as expense tracking, check printing and payroll managing. Another plus is that you can export your information to Business Plan Pro to simplify your comparisons.

And stay focused on your financial goals. One of the biggest causes of failure is diffusion of focus, Grousbeck says. The first year you should have two overarching goals: meeting or exceeding your projections and treating your customers right.
By Elizabeth Kountze

More Schools Have Learning Community Management Systems for Parents to Check on Schoolwork - WSJ.com

 

Ryan Collerd for The Wall Street Journal

Clare Girton, left, and her 11-year-old, Teddy, in their Wayne, Pa., kitchen. Ms. Girton can check her four kids' assignments and grades by using the district's parent portal.

When Debbie Sumner Mahle, an Atlanta mother, wants to know what her sons, ages 6, 7 and 10, are working on in school, she turns on her computer and logs into NetClassroom. The portal lets her see not just their school assignments but also their attendance and grades.

More public and private school systems are wiring up data-management systems, and school work is just the tip of the iceberg. Parent-accessible websites and "learning community management systems"—or LCMSs, in the age of no jargon left behind—are increasingly handling schools' scheduling, emergency contacts, immunizations, academic assessments and even meals, with some offering a daily nutritional breakdown of lunch.

Molly Baker on Lunch Break looks at the dynamic between parents and school-age children changes now that parents can see homework assignments, grades, and curriculum in real-time by logging onto the computer systems schools are implementing.

Ms. Sumner Mahle receives email reminders to place her sons' requests at orderlunches.com, which manages the meal program at their school, the Davis Academy. If she wants to work a shift as a cafeteria monitor, or bring cupcakes to a Halloween party, she signs up at volunteerspot.com.

"The sites make volunteering and keeping up on things at school a lot easier. It saves people from the endless chain of emails," Ms. Sumner Mahle says. "But the amount of time you spend online with these things is insane."

As districts look to save money by going paperless outside the classroom, the digital push is picking up steam. One immediate result is a new wave of user names and passwords for families to keep track of. Longer term, the change is requiring parents to become active seekers of information, not recipients of mailings or notes sent home from school. And there are opportunities for overuse.

Ryan Collerd for The Wall Street Journal

The district portal

More than 100,000 of the country's 125,000-plus elementary and secondary schools rely on some sort of Web presence, says Sanjeev Ahuja of Edline, one of the largest providers of website management and support to schools whose systems include Edline and SchoolFusion. The other systems out there typically have a parent portal with a name like iParent, Homelink or MyBackPack and the offerings can be customized.

For some parents, the systems are a way to feel more involved in their children's education. This isn't always a good thing for their children.

"I find it to be a really good communication tool for me. But it can also be used for evil," says Kammy Hambrick, who uses the Henrico County Public School website, outside Richmond, Va., to track the work of her two sons, ages 12 and 9. "These tools give parents more opportunity to hover, and I was completely guilty."

Ms. Hambrick says she was logging in every day to check on homework assignments, grade averages and upcoming tests and projects. "I knew what time individual teachers updated, and I would be on there at 4:01," she says. "It was bad."

Ryan Collerd for The Wall Street Journal

Clare Girton says she misses the human connection when using the district portal to keep up with happenings at school.

This school year, her 12-year-old, Jack, called her on her habit. "He said, 'Mom, you need to stay off my HCPS link. I can do it myself.' And he's right. Part of middle school is crashing and burning, and learning how not to crash and burn," she says. The two did agree that Ms. Hambrick would have the right to make random checks.

As they get older, though, students often become the ones who hover. "Sometimes you'll hear in school, 'Oh first period got their tests back,' so then everyone will race to their phone or a computer and check," says Meg Girton, a junior at Radnor High School in Radnor, Pa. "I'm starting to look at colleges and I do care about my grades."

Clare Girton, Meg's mother, says in her household, the district's system isn't a seamless communications tool yet. The Girtons' seven-year-old Dell PC sits in the corner of a second-floor bedroom—far from the family command center in the kitchen, where most of the planning and decision-making about the four children takes place.

Ms. Girton uses a double-page Month-At-A-Glance paper calendar to keep track of her family's busy back-to-school routine of homework, hockey bags, baseballs and soccer balls, lunches, backpacks and SAT-prep books. "What I don't need is another password," she says.

Ryan Collerd for The Wall Street Journal

Meg Girton, left, says some of the most avid users are students checking their own grades.

"All of these emails come from school and I can never open them because my computer is too old," Ms. Girton says. "If I want to get any information from the high school, I first ask my high-schooler's permission to use her laptop. Then I usually have to ask her to log in for me, because I don't know the family password."

Teddy, Ms. Girton's fifth-grader, wants to know if he should pack his lunch or buy. It depends: Are they serving "breakfast for lunch" or veggie lasagna? The monthly menu used to hang on the refrigerator door. Now, it's all online.

"He's going to have to take his chances because I can't be checking it all the time," Ms. Girton says.

What concerns Ms. Girton and some parents is the sense that community bonds are weakened when the district gets wired up. "Sure it streamlines it, because you don't have to talk to somebody," Ms. Girton says. "But sometimes, isn't that part of it—talking to somebody?"

Typically, privacy concerns don't surface as a barrier to acceptance, providers say, possibly because people are now accustomed to having so much of their banking and medical business online. Security and student privacy are a priority, they say, and the systems are continually upgraded.

School districts credit these systems for huge savings in paper, mailing and office expenses. Teachers praise their ability to relay the same information to all parents at the same time.

"There are parents who are divorced or separated, you've got working parents, or you could have a parent stationed in Iraq. Now they all have access to the same information," says Edline's Mr. Ahuja. "It can make for a much more meaningful conversation with children about school."

"Being up on technology is not considered a luxury or an option anymore," says Kristin Hayman, a teacher at the Haverford School in Haverford, Pa. "It used to be just young teachers or the parents who were really advanced who used the systems."

For families that lack home Internet access, many districts and schools keep computer-lab hours in the evenings. And many providers offer mobile versions of their portals, so parents can access them using smartphones.

"It's about getting parents involved not just at the end of the quarter and at report card time," says Rob Wilson, president of Edupoint, whose biggest product is the Genesis system, which manages student-information systems for more than 200 school districts.

Steve Jobs: Parting Quotes For Today's Entrepreneurs | Inc.com

Posted by Renee Oricchio@oricchio at 2:00 PM

 

By now you've likely heard that Steve Jobs has resigned as CEO of Apple and plans to continue as chairmen of the board.  COO, Tim Cook, who has filled in for Jobs in recent years during his various medical leaves while he first battled pancreatic cancer and then recovered from a liver transplant, will step in as CEO.

There is much to be analyzed and reported on regarding this announcement. Every newspaper, blog and tech news outlet in the world is weighing in right now with their take on what this means for Apple, the tech industry itself, Steve Jobs and his legacy.

In today's world of 2011, we tend to focus on only Steve Jobs, the CEO. The CEO of one of the largest companies in the world (tech or otherwise, keep in mind Apple just surpassed Exxon).  It's easy to forget he was once one of you, the audience we target-- the entrepreneur, the small business owner, the self-employed maverick going your own way.

MBA students will be studying Jobs the CEO for generations to come. But you and people like you, dear reader, will likly bump into Steve Jobs the entrepreneur for inspiration and wisdom for many years to come, as well.

I thought this would be a good time to share some of his best quotes from over the years; specifically sage wisdom for you, the David who dreams of one day being the Goliath.

Apply these words from the 90's to this economy

“The cure for Apple is not cost-cutting. The cure for Apple is to innovate its way out of its current predicament.”

On you and the other guys

"We're gambling on our vision, and we would rather do that than make "me too" products. Let some other companies do that. For us, it's always the next dream."

On selling your startup

“So when these people sell out, even though they get fabulously rich, they’re gypping themselves out of one of the potentially most rewarding experiences of their unfolding lives. Without it, they may never know their values or how to keep their newfound wealth in perspective.”

On attitude

“It’s more fun to be a pirate than to join the navy."

On resting on your laurels

“I think if you do something and it turns out pretty good, then you should go do something else wonderful, not dwell on it for too long. Just figure out what’s next.”

On humility

“But it’s a disservice to constantly put things in this radical new light — that it’s going to change everything. Things don’t have to change the world to be important.”

On how innovation really happens

“But innovation comes from people meeting up in the hallways or calling each other at 10:30 at night with a new idea, or because they realized something that shoots holes in how we’ve been thinking about a problem. It’s ad hoc meetings of six people called by someone who thinks he has figured out the coolest new thing ever and who wants to know what other people think of his idea."

On quality

"Pretty much, Apple and Dell are the only ones in this industry making money. They make it by being Wal-Mart. We make it by innovation."

"Be a yardstick of quality."

On designing products

“Design is a funny word. Some people think design means how it looks. But of course, if you dig deeper, it’s really how it works... To design something really well, you have to get it. You have to really grok what it’s all about. It takes a passionate commitment to really thoroughly understand something, chew it up, not just quickly swallow it. Most people don’t take the time to do that."

On pride in your work

(Regarding the Mac OS X ) “We made the buttons on the screen look so good you’ll want to lick them.”

Should you rethink focus groups?

"It’s really hard to design products by focus groups. A lot of times, people don’t know what they want until you show it to them.”

"You can't just ask customers what they want and then try to give that to them. By the time you get it built, they'll want something new."

On creativity

“Creativity is just connecting things. When you ask creative people how they did something, they feel a little guilty because they didn’t really do it, they just saw something.

The Tao of Steve

“You can’t connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future."

This is truly historic; a bookend to the end of an era in technology, business and pop culture. On a human level, let's hope Mr. Jobs is allowed many years to enjoy a well-deserved retirement. I will certainly miss writing about him.

Education Tech: Skype's Vision for a More Connected Classroom

by Sarah Kessler

Since becoming the CEO of Skype last October, Tony Bates has overseen the launch of a Wi-Fi hotspot service, a partnership with Facebook that produced the social network’s first video chat feature, and a pending acquisition by Microsoft.

Though it didn’t make as many headlines, Skype also launched its formal education initiative under Bate’s leadership. Skype in the Classroom, a dedicated teacher network, came out of beta in March with about 4,000 teachers already signed up. It now has more than 15,000 teachers sharing more than 779 projects on the site.

Mashable recently asked Bates about Skype’s new education initiatives and the developing education technology space. Bates will also be speaking at Mashable’s Social Good Summit in September.

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Q&A With Tony Bates, CEO of Skype

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What does video chat have to do with education?

The education process is moving beyond the traditional classroom/lecture setting. More and more teachers are seeking tools and techniques to engage their classes and enrich their lessons. Video calling is one of these tools, as it removes barriers to communication and lets students move beyond the boundaries of their classrooms. With Skype video calling, teachers can provide their students with first-hand knowledge from experts around the world and with other classes who are studying the same subject halfway across the world.

Personally, have you ever learned something via Skype that you wouldn’t have been able to learn without it?

Absolutely. One of my first days at Skype, my anxiety about not having a desk phone was quickly erased after I had a Skype (video) call with an important partner. [It] would have taken months to arrange a face-to-face physical meeting. The immediacy of video contact allowed the two of us to understand each other better and that really cemented for me the power of Skype. Every day at Skype, I am able to connect with employees from around the world and engage with them on a level that just is not possible through a conference call or email. When I speak to an engineer in Stockholm, he is able to talk me through a new product he is working on. The amount of education, in the most basic sense of the word, I receive on a daily basis through Skype amazes me. The technology is one of the reasons I wanted to join Skype and am eager to get Skype into every classroom around the globe.

Do you think that there’s still a resistance from schools when it comes to incorporating technologies?

There is always a certain amount of resistance when people try to introduce new technologies and methods of communication in any setting. The biggest cause of this resistance is usually a lack of awareness about ease of use and concerns about costs.

More broadly speaking, what are some applications of technology in education that you’re excited about?

There are a number of different technologies and applications that are being used right now that I am very excited about. One Laptop Per Child is a visionary program that is leveraging technology to make an impact on a global scale. Additionally, Blackboard is a company that is using enterprise technology to find ways to benefit students and teachers. Khan Academy is a truly exciting new method of … reaching students in new and exciting ways. Coming from Cisco and understanding the benefit of enterprise-level technology, I am always encouraged to see the ways enterprise technologies can be leveraged for the classroom.

What changes would you like to see in the way that schools implement technology?

I think an open dialog between educators, administrators and school districts would go a long way in removing the obstacles that are traditionally faced in introducing a new technology into a school or classroom. Many of the technological solutions that are available to teachers right now can be easily and affordably implemented in almost any setting. By working with school districts to educate their decision makers on the technologies that are available to educators — and exactly how they will benefit — would go a long way in increasing the rate of adoption in schools.

Five Lessons Olympic Athletes Can Teach Business Leaders - The Source - WSJ

 

British rowing athlete Greg Searle first won gold at the 1992 Barcelona Olympics with his brother Jonny. In the 1996 Atlanta Olympics he finished third in the coxless four event. After a fourth-place finish in Sydney in 2000 he retired from top-level rowing to concentrate on his career as a practice director of performance development consultancy, Lane4.

Now at the age of 39 he is back in exhaustive training to qualify for London 2012 and the chance to once again compete for Olympic gold.

He describes how the strategies used by elite athletes are very much the same employed by business leaders to compete at the very top.

1.  Find a vision; set short term goals to achieve overall success.

I am in the midst of training for an Olympic comeback 20 years to the day after I won gold in 1992. Winning that medal is the compelling vision that sits above everything else. I was also inspired by London winning the games and I thought, “I want to be a part of that.”

I thought I still have the raw potential to be an athlete for the 2012 games so took the risk and started training again with that goal in mind. Another big part was imagining winning a gold medal 20 years after winning my first, which no one else has ever done.

However, the real work is to achieve smaller goals before that overall target is within reach, such as rowing 2,000 meters in six minutes on a rowing machine, performing well in trials, sticking painstakingly to my training program and getting enough rest. These day-to-day behaviors may sometimes be difficult—but because there is the compelling vision of competing at London 2012 Olympics, it provides the inspiration for the difficult things I need to do.

So many leaders talk about goals and talk about a vision but they don’t make it exciting, compelling or engaging enough for people to want to achieve it. The great leaders are the ones that can create that enthusiasm for long term success which drives everyday behaviors in their team.

Rowing on a machine is really tough, and in itself it isn’t exciting. What “is” exciting is knowing and seeing the benefit of the hard work once I get into the boat, or at the next training session.

2. Feedback is your best friend.

The difference now in British sport compared to when I first competed is astonishing. We have the chance to win several gold medals next year while in 1996 we only won just one.

The major difference is the amount of support we get from our coaching teams. This is an important point for businesses and their leaders as many companies don’t use the support function as well as they ought to.

I receive constant feedback measured against the goals that I set at the beginning of the year. Everything is meticulously measured: nutrition, psychology, and physiology, but it’s the personal feedback regarding my impact—how I behave around the team and influence them, as well as how I move the boat—that I receive from my coach and fellow athletes that is most valuable.

It’s not always the case that this has been done well. I remember on one occasion I received feedback that caused me to jump out of the boat, swim to the bank and say I would never row with that person again.

Now however, feedback is given in a much more sophisticated way and people are asked to comment on their own individual performance. The people who want to improve are ready to identify their weaknesses and ask others for constructive criticism.

In a corporate environment however, people can be reluctant to invite feedback because they are nervous about how they are going to be judged.

In sport, the higher the level you perform at, the greater the level of support. But in business the higher you are in an organization the less support you receive, or people will not offer feedback as they may be wary of you. You might employ someone outside the company who can give impartial feedback that might not otherwise be possible.

3. Unshakeable self-belief: Self-confidence versus self-esteem

When I came fourth in Sydney in 2000, I had the feeling that I had failed. I had to be helped to recognize that I hadn’t become a bad performer—or even a bad person—because I lost a race.

The respect you earn as a sportsman or in your career has been gained over the course of years. It’s important to remember that respect can’t be lost in the blink of an eye.

Many of you will have experienced the “school of hard knocks” and you must expect to lose as often as you win—maybe more. But you have to put those performances into context as steps toward the ultimate goal.

On an individual basis, self-esteem is deep lying and built upon successes and setbacks over the course of a lifetime. As such it will not be affected by things that happen day-to-day but will be swayed over longer periods of time.

Self-confidence however, is affected in the short-term by everyday events. Self confidence can afford to take a few knocks, but it’s vital to maintain self-esteem by reminding yourself of your successes in the past and that overall, your quality will shine through.

4. Controlling the controllable.

As a leader or a sportsman it’s important to be prepared by addressing the things that are within your control. There is so much out there that you think could be relevant to make you perform, but, the real trick is to recognize the things that will really make a difference and make them your focus.

After that, it is simply a case of controlling your reaction to everything else.

In my sport it is a case of moving the boat as fast as you can down your lane. What the other boats do in their lanes is their concern.

Any strategy needs to be based upon what we can do to make a difference to our performance to get the best result.

I must admit that in Sydney in 2000, I thought our boat was inferior to our competitors’ boats. I remember that I let my mind drift and think about other things that were beyond my control.

We came fourth. It was a lesson learned.

5. Recognizing pressure as a positive

I know that I can perform at my best when I am under pressure. I don’t necessarily like it. I still get racked with self-doubt and nerves—but I know when I am in that situation I have to accept that feeling as it produces the best from me.

It’s only halfway through the race that I realize I have found strength that I didn’t know was there.

In a business environment there are high pressure situations to be dealt with every day, but often that pressure can help you become focused, sharp and at your best. The key is to recognize the symptoms and embrace them. You have to reframe the situation so it ceases to be a threat and becomes an opportunity.

A vital coping strategy is to ensure you have other things in your life. I am a father with two kids. I can keep pressure in perspective. As I sit on the start line, I think about my daughter who was recently in her first swimming gala. When it comes to the Olympics, I will be in a boat with eight of my mates doing something that I have been doing for the last 20 years. I think that what I do isn’t tough compared to a 10 year-old facing the world and competing for the first time.

Greg Searle director of performance development at consultancy Lane4. He draws upon his commercial experience and elite sporting background to deliver programs in the fields of leadership and team development.

How to Write a Business Plan for a Consulting Business | Inc.com

 

There are four key areas that you should focus on when developing a business plan for your consulting business.

By Darren Dahl |  Apr 14, 2011

If you've found yourself holding a pink slip from your corporate employer or perhaps are just tired of the old 9 to 5 grind, one of the best ways to get back on your feet might be turning your experience and skills into a consulting gig since just about anyone who possesses specialized skills can hang out a shingle of their own. But before you do, you might want to consider taking the time to create a business plan for your new venture, which will not only help you map out the opportunities before you, but also the threats.
While business plans doesn't appeal to everyone, especially if you don't ever expect to raise capital for your business, it can be a critical factor in getting your business off the ground, says Jennifer Leake, a certified management consultant and founder of Consultants Gold, an online community dedicated to helping consultants run their ventures successfully.
That's why, as you get started, Leake offers the following tips for developing a plan:

1. Write it! "Putting it on paper requires far more thought than just having it in your head," says Leake.
2. Keep it simple so that you revisit it often—so don't make it too long or too complex, she warns.
3. Spend the lion's share of your time defining your niche and why you are uniquely situated to serve it. "If you can't succinctly articulate what your business is selling, you'll never get people to buy," says Leake. 
4. Don't create your plan in a vacuum. "You'll develop a better business plan if you have feedback, and you'll be more likely to take action if you have accountability from mentors, coaches, or success partners," she says.

But crafting a business plan for your new consulting company doesn't mean you should stick to the average template you can find online, as you should spend your time focusing on the elements that most often make or break companies in your industry.
"Writing a business plan for a consulting firm sounds fairly straightforward because there are so many who call themselves 'consultants,' but it can be quite difficult for many reasons," says Michael Hermens, president of Finance Forward, a financial advisory firm in Dallas.
That's why Hermens says that you should focus on four key areas when fleshing out your business plan:

1. Value Proposition
Answer this question: What is your specific value proposition?
"Thousands of ex-IT programmers are now 'Social Media Consultants,' " says Hermens. "What do you do that thousands of other people don't?"
The keys to building a solid value proposition are to give decision makers solace that they made the right decision, he says, which can be done in three ways: 1. Offer a service guarantee, 2. Build and take prospects through a well-defined methodology, or 3. Specialize so narrowly that it is easier to increase your stature. "The challenge with a guarantee is that larger firms don't normally purchase on that basis and smaller firms generally take a service guarantee as a tacit admittance of being mistake prone," says Hermens. "A well defined methodology or approach takes a while to build, but is well worth it for prospects who do not know you. Narrow focus helps potential consultants gain exposure, increased stature helps clients be satisfied with their hiring decision."

Dig Deeper: Nobody Buys a Value Proposition

2. Target Market
Answer this question: What is the best target market for you, or do you hunt every potential client that might possibly need your services?
"Understanding your target market is the most difficult planning activity," says Hermens. But developing an understanding of the competitive landscape is crucial, particularly go-to-market and pricing strategies, as well as the specific problems that the industry or market segment is trying to solve. "Gaining insight into how companies in your industry go to market, the basis on which consulting firms compete, matters," he says. "In strategy consulting, it might be references of former clients or the published knowledge share that gets clients interested. In large IT deployments, it is probably the strength of the methodology. With forensic consulting, your name and personal credibility is a huge selling point." In other words, determining how you should go to market, how (or how much) you charge your clients, and your familiarity with specific industry jargon and problems the industry is trying to solve, are crucial in planning your consulting business, according to Hermens.
One approach offered by Beth Corson, founder of Your FundingKey Advisors, is to choose a few industries and then outline the size and type of businesses that you'd like to work within those industries. "Rather than the desperate approach of taking any client that comes along, be selective and create a clear road map of where you want to go," she says. "Several years from now, your client roster should be fairly close to the plan that you make now. By working with similar clients in a specific industry, your company creates a level of expertise that makes it easier to perform well and get new clients because you understand their unique challenges and how to overcome them."

Dig Deeper: How to Define Your Target Market

3. Marketing
Answer these questions: How do you market your consulting business? What tactics do you employ to get in front of decision makers to evaluate your offering?
There's no question that in order to get your new consulting venture off the ground, you'll need to market your skills and experience to potential clients. That can be difficult, though, when you're a sole proprietor, since time spent marketing is time you're not billing for. While you can always hire an outside firm to help, your fledgling business might find the cost prohibitive. The answer, then, is to be creative in finding ways to promote your offering. One way to do that could be through landing public speaking engagements, which can be very effective at promoting your knowledge and point of view on your industry's challenges, says Hermens. Another option can be to partner with other companies that might offer complementary services to your own, a tact that may also help you build experience in new areas. But, at some point, you must develop your own client relationships independently if you want to keep your company growing.

Dig Deeper: How to Promote Your Consulting Business

4. Employees
Answer these questions: If you have employees, what is the best way to deploy them, given the reality of project work? Do you plan to pay them hourly, by confirmed project, or salaried?
"The issue here is how do you leverage yourself to grow revenue?" says Hermens. "Consultants who develop their brand can write books and charge an hourly rate, but they still cannot serve two clients simultaneously. Leverage allows your consultancy to flourish as your company takes on more projects." The key, then, is to think about how you align revenue arrangements with employee compensation and how to pay employees to ensure they are available when you need them by asking yourself questions like: Do you pay a salary and risk a lull in projects? Or, perhaps you pay employees on a project basis, only when they work, risking their availability when you get a new contract? "The goal here is to align revenue with employees compensation in the beginning as your consultancy grows," says Hermens. "Once your business becomes large enough, put key people on a salary, with performance bonuses. They will stick with you, have learned your go-to-market strategy, and know your methodology inside and out."

Dig Deeper: The New Rules of Employee Compensation

8 Tips for Nailing Your Next Startup Job Interview

 Alex Berg is the Chief Product Officer of Bonanza and Bags Bonanza. Bonanza is a marketplace focused on creating a browse-friendly experience that helps you discover unique items. Prior to Bonanza, Alex served in leadership positions with Wetpaint, Expedia and Blue Nile.

While unemployment remains high, some sectors are hiring at a breakneck pace. New startups are cropping up in cities across the U.S., with hotspots emerging in New York, Chicago, Austin, Seattle and, of course, San Francisco and Silicon Valley. If you’ve been limiting your job search to more established companies, you might just be missing out. For every Twitter, Groupon and Zynga, there are dozens of smaller-stage companies emerging and hiring everyone from programmers to interns.

However, when it comes to hiring decisions, startups are a breed of their own. With their unique value systems, knowing a startup’s particular “fit” criteria can mean the difference between a second round of interviews and being shown the door. Equally important, of course, is understanding how well the startup fits you.

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1. Why “Fit” Matters

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Startups are for believers. This isn’t to say that Pollyannas abound at your average startup, but most folks are there to make a significant impact. This is true with regard to their own day-to-day roles as well as the impact that their company makes on the world at large. Startups like to disrupt markets and challenge Goliath-like competitors. Getting everyone on board is crucial to their success, and the wrong fit stands out like a red-shirted crew member in a Star Trek landing party.

Fit goes beyond merely finding believers, though. In larger companies, you can often avoid interactions with the office jerk, but the small size and fox hole mentality of a startup can turn a jerk into a real morale killer. Not surprisingly, startups are laser-focused on making sure the fit is right. When there are less than a dozen employees in a company, every one really matters. The challenge is that what constitutes fit varies from startup to startup. Some startups celebrate collaboration and autonomy, while others are manically focused on productivity or technical innovation.

And, of course, fit is a two-way street. It has to be right for you, as well. Find out as much as you can about the culture before you go in. Check out LinkedIn and sniff out info from people in your own network. Read reviews on sites like Glassdoor, but take these with a grain of salt. Company review sites can be a haven for the disgruntled and startups likely don’t have lots of ex-employees anyway. Ask pointed questions of managers and individual contributors and see how their answers line up. Don’t compromise any strongly held beliefs and don’t expect the startup to adapt to you either. If the fit is not right, be ready to walk away — buyer’s remorse of the career variety is the worst kind.

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2. Getting Noticed

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Once you have your sights set, the first thing to do is get on the radar. Startups’ focus on fit makes them a fairly incestuous lot. They tend to hire friends and former colleagues, so relationships really count. The best way to get noticed is not through the front door. Hop on LinkedIn and comb through your contacts. There’s a good chance that someone in your extended network knows someone who knows someone who can get you in touch directly. Take the burden off of your contact by making it clear you aren’t asking for a recommendation, only that they pass you along.

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3. Spring Cleaning

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While you’re mining your network, make sure your LinkedIn profile is current and nicely polished. A pretty resume template looks very “1997,” and many startups have a bias against those not taking advantage of what they consider superior tools. Besides, at some point, the decision maker is going to pour over your profile looking for someone who can provide an unsolicited reference. So make sure your skills and job history are current and your endorsements are strong.

Lastly, do yourself a favor and Google your own name before they do (and they certainly will). Make sure your online presence is the very best version of you. You don’t need to eliminate your personality, but that late night tweet or old spring break photo might be perceived unflattering.

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4. Do Your Homework

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Before your interview, find out who you will be meeting with. Get the names of your interviewers and research their backgrounds. You might even get lucky and know someone who has worked with them and can give you the inside scoop. When asking for feedback on a company or prospective manager, resist the temptation to send the easy email. Offer to buy a coffee instead. In a world where emails get forwarded fast, you’ll find people understandably reluctant to dish online. When candor matters, cappuccinos are currency. Even if you don’t have a direct connection, understanding your interviewers’ unique backgrounds can give you insights into how they think and what they are looking for.

When candor matters, cappuccinos are currency.

Preparation goes beyond the interviewers, though. Get to know the company’s products and get to know them well. Have pointed questions and suggestions written down and ready for discussion. Candidates who don’t bother to try a company’s products demonstrate an appalling lack of interest and are often shown the door.

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5. Showing You Have What it Takes

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Startups don’t want people who do what’s asked of them and little more. They want people who genuinely love what they do. Be ready to tell multiple stories about how you went above and beyond the call of duty. If you don’t have any examples in your work experience, create one as a side project. Taking on an extracurricular project shows passion, curiosity, and enthusiasm — characteristics that are incredibly attractive to startups. When interviewing engineers, my teams always look for “tinkerers” — engineers dabbling in Ruby on the side, or designers escaping their day-to-day template work with more exciting outside projects. Demonstrate that you’re more than a solid contributor and have all-star potential, and remember that showing is always more powerful than telling.

A close second to having initiative is being adaptable. In a world where terms like “fast failure” and “pivot” are celebrated, you have to be ready to flex. Startups change direction. Sometimes it’s simply a collection of tactics, but on occasion it’s the entire company strategy. Prove you’re not just tolerant of change, but actively embrace it. If you were a part of a new initiative at your previous employer, be ready to tell the story.

Startups also value candidates who are focused on what can be done, rather than on what cannot. This might sound obvious, but early stage startup teams in particular are focused on validating the appeal and market for their products. This requires rapid and repeated trial and error. What makes this possible is a culture that champions what can be done, and done quickly. Startup productivity comes to a grinding halt when the focus shifts from the possibilities to edge cases. Demonstrate your openness to new ideas and creative thinking, taking care to build on the ideas of others rather than tearing them down.

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6. Tilt Your Scale Toward “Work”

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Every company talks about valuing a work/life balance, but the fact of the matter is that most startups’ scales are weighted more heavily toward work. If your situation requires a predictable 9-to-5 schedule and 40 hours a week, a startup probably isn’t the right place for you. If you are accustomed to longer hours and the occasional night or weekend, that’s the kind of thing they want to know.

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7. Beware of the Oncoming Bus

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Take care when referring to your previous employers and managers. While your last manager might have indeed been incompetent, you’re not going to earn any points by throwing them under the bus. If you do, you’ll come across as jaded and start raising big, red “fit flags.” Find the positive in your previous gigs and, when pressed about why you are looking, retain a positive outlook. If the situation warrants it, by all means be candid, but don’t be petty. No one hires that guy.

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8. Follow Up

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Don’t disappear once you’ve left the interview. It’s important that you not only stay top-of-mind but also that you build your own personal momentum as a candidate. Get business cards or email addresses from your interviewers. For extra points, go beyond the mere thank-you note that expresses excitement about the opportunity and add something to the conversation. Flub an answer? This is your chance to fix it. Have an epiphany in the car afterward? Share it. Continue to demonstrate passion and interest and you’ll rise to the top.

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Above all, the most important thing you can do is find out what the startup uniquely values, ensure it aligns with your own interests, and then demonstrate that you’re the perfect fit. Startup teams labor over hiring decisions heavily. The skills conversation takes about five minutes. The fit conversation? That one can take hours.

8 Tips for Nailing Your Next Startup Job Interview