a guide to becoming a successful entrepreneur
DESCRIPTION
This annual presentation was given to a very gifted class of seniors at the University of Rochester. Always fun to work with those who are willing to listen ...TRANSCRIPT
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HJR background
Xerox Corp
PriceWaterhouse Coopers
Founded 8 technology & service businesses
Sold 5 businesses
A Guide to Become a Successful Entrepreneur, (c) 2014
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Small business experience
Who has owned or run a small business?
A Guide to Become a Successful Entrepreneur, (c) 2014 4
Small business experience
Who has owned or run a small business?
You have if you’ve
• Owned a check book
• Great cash flow experience
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The Customer experience
“The customer is always right”
Actually they are not
• But without them, you have no business• Ensure they feel right
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Commitment vs. passion
What’s the difference?
A Guide to Become a Successful Entrepreneur, (c) 2014
A Guide to Become a Successful Entrepreneur, (c) 2014 7
Commitment vs. Passion
Commitment = you wake up for a job
Passion = can’t wait to wake up to go to work
Be passionate at what you love …
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Entrepreneurial drivers
• Honesty … esp. with your self• Vision• No fear of failure … learn by it … move on• Independent thinking• Eliminating naysayers & negative influences• Being passionate about your beliefs• Perseverance• Good communications skills … in & out• Admitting you do not have all the answers• Surrounding yourself w/ smarter people
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Business startup framework
Get Agreements in writing early on• Who does what w/ defined expectations
Definition of Friendship• Changes as sales increase
Get pre-nup agreements with business partners
“DON’T YOU TRUST ME” • “In God We Trust,” all others have contracts• Contracts are for successors
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Problem solving approaches:Thinking vs. Doing
• Thinker• 95% solution upfront• 2 years later
– 100% best solution– Zero market share
• Doer• 60% solution upfront• 2 years later - owns the market
• DON’T OVERTHINK THE SOLUTION• You won’t get it right the first time• Consumers don’t care about 100%
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Product Success Cycle is Endless
Listen to Customers
Develop Product
Market, Sell &Distribute
Listen to Customers
Enhance Product
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The key to profitability• REDUCE ALL CYCLE TIMES– Sales– Receivables– Supply chain– Manufacturing– Customer service– Investor ROI– Time to make customer happy
• Applies to product & service• The shorter the cycle, the more $ you make• DEVELOP ANNUITY REVENUE
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Sales, money, emotions & the sine curve
• A Sine curve has defined upper & lower bounds – Life & business do not
• Anything that accelerates at ‘x’ will decelerate at 2-3x minimum
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Importing - What’s in my landed cost
• Cost of product• Insurance• Freight to US port• Freight to distribution center• Import duties & taxes• Bank fees• Brokerage fees• Other fees• Import/export documentation must all be in order, else
delay of payments• Supply chain delays = increased costs
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Product-to-Market Factors
• What’s your product line strategy• Who will buy• Why• How much will they pay• Marketing plan• Supply chain costs• Landed• Lead times
• Sales/distribution channel costs– Variable– Retail shelf space & spiffs
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What’s more important
Sales or Net Profit
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What’s more importantSales or Net Profit
DEPENDS ON THE STAGE• Start up Sales• Early stage Sales• Growth Sales & profit• Established Sales & profit
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What investors look for …
• Sales, sales & more sales …• Concept: Validated or still an idea• Scalable & Annuity opportunities• Patents (US & PCT) • Risk• Competition• Debt• High margins• Inventor’s time & investment• Management team & salaries
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Company Valuation
HIGHER if you have:
• Sales• Patents & IP• Experienced management team• Lower risk
LOWER if you have:
• No sales or pattern of acceptance• No IP• Inexperienced management team• Higher risk
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The Path to Become aSuccessful Entrepreneur
• Never fall in love with an asset• Follow your dream• Get others to buy into your passion• Know your customers• Why they buy• Sales, sales & more sales …• Smell the roses …
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Resources: Innovation Institute
http://www.wini2.com/
• Evaluates ideas for US $250 / $270 Int’l– Good Go/No-Go evaluation report
• Founded by Sam Walton (Walmart)
• Formerly Wal-Mart Innovation Network
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Questions