The Women Entrepreneurs Blog @ Simon

What Entrepreneurs Can Learn from Sex and the City

by Marita Greenidge

Carrie: Oh my God… cccome come back! What is this? Why is this happening? My computer just crashed right in the middle of my work!

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Apple Tech: When was the last time you backed up your work?

Carrie: Um… I don’t do that

Aidan: You don’t back up?

Carrie: No

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Carrie: Hi… You remember me? I am number P438W, you have my computer.

Apple Tech: Yup… okay and this is what we could recover from your hard drive. Any of that look familiar to you?

Carrie: and there it was, my past… it was a mess..can you please tell me why this happened in the first place?

Apple Tech: Ah I dunno… sometimes these things… they just crash. Now we can replace your motherboard but you have to get yourself a backup system. Get a zip drive, start saving… next time you won’t lose everything.

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If you’re a Sex and the City fan like I am, you remember the above scenes surrounding Carrie’s computer crash. She lost all her data! On Saturday morning, January 23, I could completely relate to Carrie’s pain – my computer refused to start. Well that is a bit inaccurate. It tried to start; unfortunately, it only mustered enough energy to remain on for 2 seconds… then it shut down. Every time I hit the power button, it did the same thing – 2 seconds on and the next second shut down.

I called my computer technician, thinking it probably couldn’t be that serious and would only require a few changes here or there to make it as good as new. Unfortunately, my technician said my computer had reached the end of its useful life. Like Carrie I questioned, “Why did it crash?!” Similar to the Apple Tech, my technician told me “Sometimes, these things happen. I’ve seen it before.”

What an opportune time to crash; I had a board meeting in a few days, and the first class for the new graduate marketing course I was about to start teaching was also only a few days away.

Luckily, one and half years ago I decided to watch the much talked about Sex and the City. I read a ton of entrepreneurship blogs and articles and all of them at one point or the other tells you – “back up your data.” However, it was only that episode of Sex and City, when Carrie lost all her files, that it suddenly hit home.

“My gosh! If I lost all my files I have no idea what I’d do!”

I immediately went to Mozy.com and started an unlimited back up subscription. Now whenever my computer is idle, my files are backed up. This works well for me because I am not the kind of person who would remember to intermittently back up my files on a storage device. Plus, between back up schedules I could have potentially lost a lot of files. With Mozy, my last back up was a few hours before the crash so I was very much assured that all my work was saved.

Were this not the case, I’d be in some serious trouble. I would have had to redo all the analyses and presentations prepared for my Board meeting, and I would have had to redo all my lecture slides!

Everyone needs their own stimulus to actually do what needs to be done. Mine was a Sex and the City episode, perhaps yours will be this blog post. Whatever it takes, I seriously recommend backing up your data; you can save yourself a lot of time and frustration should something happen to your computer. Here's a link to five of the best online backup tools.

Taking the Plunge—Timing the Risk to Optimize Success

by Elisabeth Hager, MD

You have a great idea for a company, but you also have a great job, or a family that depends on you, or other realities that must be considered before you take the plunge into entrepreneurship. So how do you know when it’s time to take the risk?

The answer depends on a few factors. To define your risk, it helps to consider your current and potential income, your preference for independence, your current and expected work effort, your tolerance for risk, and other working conditions.

For new entrepreneurial ventures, many of these variables are unknown and have to be estimated. It is the combination of these factors that influences your decision to start your own company. Comparing the present (your current work environment) with the future (your anticipated work environment) can help you determine your probable risk. Think of these variables as an equation:

U = f(Y, I, W, R, O) where U is the utility function, Y is income, I is independence, W is work effort, R is risk and O is other working conditions.

Of course, the actual utility is accomplished over time so, while ignoring variable O, an Entrepreneurial Attractiveness Index (EA) can be calculated as:

EA = ∫ⁿ₀(w1Y + w2I - w3W - w4R)dt where w = weighting factors and w1 + w2 + w3 + w4 = 1.

Both w3 and w4 have negative signs because Work and Risk are dis-utility factors, or they work against the likelihood of taking the plunge. Because everyone is different, it is important to know how each individual would assign the weights to these variables. If you are risk adverse, for instance, you would assign a w4 = 0.8.

While you may or may not want to crank through an equation to determine if the timing is right to found your company, keeping in mind these very real variables and assessing the strengths of each can help you realistically determine if the timing is right to leave your day job for your dream job.

Source: Douglas, et al, Journal of Business Venturing, 1999 in Dorf, et al, Technology Ventures, 2008

What did I get myself into?!

by Claire Siegrist

I’ve had a frustrating couple of weeks in the YEA program. We’re now in week 14 and time is going fast. Entrepreneurship is not for sissies!

My original idea was to establish an indoor off-leash dog-park. I loved the concept of a climate-controlled, big, safe space where owners and their dogs could stay active all year long. A dog-sitting option would be available as well, where customers could leave their dog for pick up later.

I believe that there is a market opportunity where busy people can drop off their dogs and quickly get to Wegmans, the library, etc. While they are doing their errands, their dogs will be thoroughly exercised by park staff.  

But then reality hit me. My DBA, Fetch, Run and Play! was listed in the newspaper 1/11/10. 

As I researched the costs and responsibilities of running a facility like this, I became overwhelmed. How is a shy, 13 year old going to make this happen? So, I scaled it down to a lower-cost, more flexible model with much quicker start-up potential and scalability. (More in future posts!) 

Most of the other YEA students develop a thing; I made a place. I love stuff as much as anybody. But, when we decided on business ideas last October, I couldn’t dream up a thing that the world needed but I hadn’t seen before. 
 
My life would be a lot simpler if I was working on a widget.

Who is My Competition?

by Victoria Reynolds

Business takes place in a highly competitive, volatile environment, so it is important to understand the competition. As always, you must continually assess who your nearest direct competitors are. You should also know your indirect competitors - is their business growing, steady, or declining? What can you learn from their operations or advertising? What are their strengths and weaknesses? How does their product or service differ from yours?

What to Address in Your Competitor Analysis

• Names of competitors: List all of your current competitors and research any that might enter the market during the next year.
• Summary of each competitor's products: This should include location, quality, advertising, staff, distribution methods, promotional strategies, customer service, etc.
• Competitors' strengths and weaknesses: List their strengths and weaknesses from the customer's viewpoint. State how you will capitalize on their weaknesses and meet the challenges represented by their strengths.
• Competitors' strategies and objectives: This information might be easily obtained by getting a copy of their annual report. It might take the analysis of many information sources to understand competitors' strategies and objectives.
• Strength of the market: Is the market for your product growing sufficiently so there are enough customers for all players?

Tips for Gathering Competitive Information 

• Internet: The Internet is a powerful tool for finding information on a variety of topics.
• Personal visits: If possible, visit your competitors' locations. Observe how employees interact with customers. What do their premises look like? How are their products displayed and priced?
• Talk to customers: Your sales staff is in regular contact with customers and prospects, as is your competition. Learn what your customers and prospects are saying about your competitors.
• Competitors' ads: Analyze competitors' ads to learn about their target audience, market position, product features, benefits, prices, etc.
• Speeches or presentations: Attend speeches or presentations made by representatives of your competitors.
• Trade show displays: View your competitor's display from a potential customer's point of view. What does their display say about the company? Observing which specific trade shows or industry events competitors attend provides information on their marketing strategy and target market.
• Written sources: Use general business publications, marketing and advertising publications, local newspapers and business journals, industry and trade association publications, industry research and surveys, and computer databases (available at many public libraries).

Even if you’re convinced that your product or service is unique, it’s highly likely that your potential customers can already find it in one form or another. Your job is to assess thoroughly and objectively who your competition is, what they offer and what factors make your product/service superior to theirs (i.e., your competitive advantage). And finally, once you now the “who”, “what”, “why” and “how” of your competition, the key to success is convincing potential customers that they should come to you instead.

*SBA’s participation in this blog does not constitute an endorsement of the William E. Simon Graduate School of Business Administration or any other person or entity.  SBA’s programs and services are provided to the public on a non-discriminatory basis.

Discovering Untapped Markets

by Lauren Dixon

While 2010 is the "The Year of the Tiger," it might also be the year for businesses to discover untapped markets!

The fragmentation of media and technology presents an exciting mix of challenges and opportunities, allowing companies to target specific customers in unique ways. Technology makes it easier than ever for entrepreneurs to self-market using social networks and websites, but how can they best earn customer loyalty and trust while maintaining a focus on their core businesses? 

Since advertising is primarily focused on the individual with a personalized approach, there is so much information available to consumers that it is a challenge for businesses to stand out. Where can companies leverage their media dollars and invest their time to get a ROI?

Businesses must not only grab the attention of potential customers through traditional forms of communication and media, but they also have to monitor blogs, social networking sites, and Twitter activity. Collaborating with web experts and media professionals can help companies make sense of the "clutter" while staying focused on their core business. With the breadth and depth of media choices to reach customers, there is unlimited potential for finding untapped markets.

Discovering effective ways to reach busy consumers and attract new customers is a critical part of success in 2010 and beyond!

A Kindergarten Business Education

by Judy Seil

As we start the new year, let's remember that what we learned in kindergarten still applies in the business world (with some added advice):

Share everything. Your knowledge and experience can be helpful to an intern or newbie at the company. The more you give and share, the more you get in return.

Play fair. Honesty, integrity and kindness are attributes will make you a better business person and well respected by others.

Don’t hit people. (Especially when they are down.) If you receive a call from a friend, or friend of a friend, who is looking for a job and trying to network, meet with him or her. You never know when you might be in a similar situation.

Put things back where you found them. Never leave the "filing" to someone else. It is good exercise for you to get out of your chair and put it away.

Clean up your own mess. Don't finger point at others when a mistake has been made. If you are the boss, you need to stick up for others and help them take care of the problem.

Don’t take things that aren’t yours. Don't take credit for others ideas. Encourage free thinking and reward those who come up with good ideas.

Say you’re sorry when you hurt somebody. Don't be stubborn. You know when you have been unreasonable and may have said something cross.

Wash your hands before you eat. Prevent the spread of H1 N1.

Flush. (Of course.)
 
Warm cookies and cold milk are good for you. Treat your employees on a regular basis to goodies or lunch. A little investment goes a long way to help keep your staff happy and productive.

Live a balanced life. Learn and think, draw and paint, sing and dance, and play and work a bit each day. Remember, that at the end of your life, you don't want your tombstone to say, "He/she never missed a day of work." Your employees need to see you enjoy life also.

Take a nap every afternoon. (But wait until your lunch break!) Power naps can refresh and energize you for the rest of the day.

New ideas for a New Year

post by Yvonne DiVita

How did you start of your New Year? Did you get up on January 1, 2010 and greet the day with enthusiasm, even if you'd been out all night partying? Or, did you drag yourself out of bed and remember, as you brushed your teeth, that it was time for those pesky resolutions?

Truth is - it's not time for resolutions. Any good career coach will tell you that it's time to set goals. And, to be realistic. Don't set goals you are unsure of. Give yourself achievable goals, and as you achieve them, step up the pace.

Here's the key: be innovative. We used to call it "thinking outside of the box" and I suppose some people still do, but today the watch-word is innovation and the goal is new ideas. The interesting thing about creating new ideas is that they are often built on the foundation of old ideas. That's right - look at how you've done things in the past, and think carefully about why they worked or didn't work. Throw some caution to the wind and try a completely new idea - a new color - a new flavor of coffee. Look 2010 right in the eye and say, "I can do better. I will do better. In fact, I'll..." then, whatever new idea pops into your head, do it.

No, don't go crazy.  Don't let yourself get carried away trying to be what you're not. Be true to yourself, but be unique about it. Cookie-cutter won't cut it, anymore. Yes, tried and true is still effective - ask anyone in a franchise business. But, everything you do presents opportunity for new ideas, innovative ways to accomplish goals, with open doors beckoning you to walk through. And remember, failure can be a powerful teacher!

You might - rearrange your office, bring your dog to work, start a blog, write letters - real letters - to clients and prospects, instead of sending email. You might - take a day to look over your closet competitor's store or office, and jot down ideas on how the two of you could make a killing in the market if you just poolled your resources.

I'm being innovative and creative this year. I'm working with another blogger to create a place for a niche market to meet and network and get in front of brands. And, I'm expanding my women's marketing blog - to offer educational webinars and training. But, the biggest thing I'm doing is keeping my eyes and ears open - so I can listen to you, and all the other women who write or call me. Because when I do that, when I listen, I learn. I learn how to make new ideas sparkle.

Nothing happens in a vacuum. Be open to the new year. It will reward you with excitement. I promise.

Sometimes Entrepreneurs Need to Make Tough Choices

by Marita Greenidge

In February 2009, I sat in a lecture room at Simon, listening to a presentation from Andrea Marron, founder of Studio 28 Couture. (I wrote about her some time before. You can take a read here.) During that presentation, Andrea told a story of how she had to turn down a “fabulous” business opportunity. Her reason? It wasn’t in line with her long term business goals.

10 months later, I found myself in a similar situation. The opportunity was great, but I turned it down. Like Andrea I refused to sacrifice my long term business goals. 

I was asked to play a significant role in managing a very successful enterprise. This company had a proven world class product, which customers loved! The owner wanted to expand, and there was need for a team of people to facilitate this objective. That’s where I came in; I was seen as someone who could assist in executing the owner’s strategy.

My eyes were ablaze with excitement. Wow, me, Marita Greenidge, being offered this chance? I was ready to have the contract drawn up and sign on the dotted line.

After that initial excitement subsided, reality struck and logical thoughts began to flow.

Concern #1

This company was not operating in an area I was extremely passionate about. I’m a strong believer in doing what you love; it turns work into play.

Concern #2

I recently started a marketing consulting company with the goal of redefining marketing within Barbados and the wider Caribbean. My goal, my company, would disappear if I accepted this proposal. The owner guaranteed that my company would survive. However I did not think it was realistically possible to build 2 excellent enterprises in divergent industries.

Concern #3

Time: Working with my main client, the Barbados Entrepreneurs’ Venture Capital Fund offers an amazing blend of my passions – marketing and entrepreneurship. I advise the Fund on marketing strategies, as well as assist entrepreneurs seeking investment, with developing strategic marketing plans. Furthermore, I was recently inducted into the executive management team, and now I assist with the application screening process and other management related duties. This, as you imagine, requires quite a bit of time. Add to that the fact that I teach at our local University and participate in some local volunteer programmes. Also, the Barbados Entrepreneurs’ Venture Capital Fund is not my only client! Unless I was able to add more hours to the day, pursuing this new opportunity would not have been possible.

With these concerns, I returned to the owner of the enterprise and explained why I had to turn down the opportunity.

As an entrepreneur, many opportunities will arise before you, and with each one you have to weigh the pros and cons of pursuing. Overall, if an opportunity does not add value to your long term goal, it’s not worth it. (Consider what happens when a company drifts away from its mission.) Just remember that as long as you refuse to sacrifice quality in whatever you do, more opportunities will arise, so letting a few that aren’t a good fit slid won’t doom you.

 
*Many thanks to my mother and my mentor, Winston Moore, for entertaining my long conversations as I sought to make a smart business decision. Thanks to Andrea Marron for sharing a valuable story in decision-making.

Women Are the Economy

post by Yvonne DiVita

That's a bold title, but it rings true. Women influence or control the vast majority of spending in this country, and some say around the world. The Shriver Report, issued a few months ago, shows some stats that are worth reporting on:

• For the first time in recorded history, there will be more women in the U.S. workforce than men...this year.
• 21% of families today have a traditional "only husband employed" structure - Mom stays home, in other words.
• And, 22% have a "only wife employed" structure - Dad stays home. New and different, huh?
• 44% of families have both spouses working.
• 63% of all women are now breadwinners.

I especially like the article over at Bersin & Associates, written by Josh Bersin, we suppose, but cannot confirm because the post does not identify the actual writer. At any rate, the article shares two important links that are worth our time: Womenforhire and Hiremymom . Both links are written with women in mind, and with how to succeed in the workforce. Sometimes, you have to be entrepreneurial to succeed in the workforce, and sometimes, sites like those can help entrepreneurs understand what it's like to have employees - so check them out.

I also think a visit to She-conomy is worth your time. Stephanie Holland takes time to explain the way women thing about things. We might believe we don't need to learn that - but, all entrepreneurs can learn something from other women, even us. Women don't always act the way WE think they will. Stephanie talks about games in this article, and how women are "actively engaging with grands as they play some of their favorite online games." She cites Farmville, a Facebook game which is pretty popular right now, but there are others.

In the end, women do influence or control the spending both at home and often at work. Are you taking that into account as you move into 2010? As an entrepreneur, are you watching what women do online and offline, and keeping track of their spending habits? It pays to build the women's touch into your marketing. Regardless of what you sell - and never think you know it all. You and your women's circle may be entirely different than me and my women's circle.

Be proactive by using the online tools available to get to know your women customers. They'll reward you with sales.

Finding Investors to Fund Your Startup

by Victoria Reynolds

Raising capital is the most basic of all business activities, but it may not be easy; in fact, it is often a complex and frustrating process. However, if you have studied and planned effectively, raising money for your business will go as smoothly as possible. 

It is important to explore all of your financing options before making a decision; several sources to consider are:

• Personal Savings: The primary source of capital for most new businesses comes from savings and other personal resources. While credit cards are often used to finance business needs, there are usually better options available, even for very small loans.  

• Friends And Relatives: Many entrepreneurs look to private sources such as friends and family when starting out in a business venture. Often, money is loaned interest-free or at a low interest rate, which can be beneficial when getting started.

• Banks And Credit Unions: The most common sources of funding, banks and credit unions, will provide a loan if you can show that your business proposal is sound.

• Angel Investors And Venture Capital firms: These individuals and firms help expanding companies grow in exchange for equity or partial ownership.


Understanding Venture Capital

Venture capital for new and emerging businesses typically comes from high net worth individuals (“angel investors”) and venture capital firms. These investors usually provide capital unsecured by assets to young, private companies with the potential for rapid growth. This type of investing inherently carries a high degree of risk. However, venture capital is long-term, or “patient capital”, allowing companies the time to mature into profitable organizations.



Venture capital is also an active rather than passive form of financing. These investors seek to add value, in addition to capital, to the companies in which they invest to help them grow and achieve a greater return on the investment. This requires active involvement; almost all venture capitalists will, at a minimum, want a seat on the board of directors.



Although investors are committed to a company for the long haul, that does not mean they are committed indefinitely. The primary objective of equity investors is to achieve a superior rate of return through the eventual and timely disposal of investments. A good investor will be considering potential exit strategies from the time the investment is first presented and investigated.



The Venture Capital Process

A small business looking for venture capital typically can expect the following process:

Submit Business Plan. The venture fund reviews an entrepreneur’s business plan and talks to the business if it meets the fund’s investment criteria. Most funds concentrate on an industry, geographic area, and/or stage of development (e.g., Start-up/Seed, Early, Expansion, and Later).

Due Diligence. If the venture fund is interested in the prospective investment, it performs due diligence on the small business. Due Diligence involves a detailed look at company’s management team, market, products and services, operating history, corporate governance documents, and financial statements. This step can include developing a term sheet describing the terms and conditions under which the fund would make an investment.    

Investment. If at the completion of due diligence the venture fund remains interested, an investment is made in the company in exchange for some of its equity and/or debt. The terms of an investment are usually based on company performance, which help provide benefits to the small business while minimizing risks for the venture fund.

Execution with VC Support. Once a venture fund has invested, it becomes actively involved in the company. Venture funds normally do not make their entire investment in a company at once but do so in “rounds.” As the company meets previously-agreed milestones, further rounds of financing are made available, with adjustments in price as the company executes its plan.

Exit. While venture funds have longer investment horizons than traditional financing sources, they clearly expect to “exit” the company (on average, four to six years after an initial investment), which is generally how they make the most money. Exits are normally performed via mergers, acquisitions, and IPOs (Initial Public Offerings). In many cases, venture funds will help the company exit through their business networks and experience.

One source of venture capital is the SBA's Small Business Investment Company (SBIC) Program. SBICs, licensed and regulated by the SBA, are privately owned and managed investment firms that use their own capital, plus funds borrowed at favorable rates with an SBA guarantee, to make venture capital investments in small businesses.


When it comes to bringing in investors for your business, always keep in mind two golden rules:  Do your research! Identify the most likely candidates by asking your accountant, banker and lawyer.  And finally, keep an open mind—potential investors may be anywhere.

*SBA's participation in this blog does not constitute an endorsement of the William E. Simon Graduate School of Business Administration or any other person or entity.  SBA's programs and services are provided to the public on a non-discriminatory basis.