Solving Problems With Your Partner and 4 More Business Tips From the Week
A roundup of the best tips of the week from Entrepreneur.com.
One of the most rewarding but also most challenging relationships in business must surely be the one between partners in a startup. Because so much is riding on this relationship, you'd be wise to take steps at the very beginning to defuse contentious issues. Write them out and work through them as if you were creating a business plan, says Frank Demmler, an adjunct professor of entrepreneurship at Carnegie Mellon University's Tepper School of Business. Issues to address include each partner's time commitment to the business, your salary sizes and equity shares, what to do with company profits and more. Demmler says working things out early on, before any emotional flare-ups, can prevent problems from arising later. "Do it at the beginning when rational minds are engaged," he says. More: How to Manage Your Business Partner
To avoid overconfidence, widen your circle of advisors.
BuildDirect, a Vancouver-based retailer of building materials, launched in 1999, and business was great all through the housing market's boom years. But when the bottom fell out of the market, BuildDirect crashed, says president and chief executive Jeff Booth, who now attributes the downfall to hubris. In order to recover, he and his partner had to break through their own bubble of overconfidence and bring the entire management team into the decision-making process. Only by asking hard questions of themselves and embracing honest answers could they begin to recover. More: How Much Confidence Is Too Much?
When pursuing crowdfunding, keep it simple.
Product designers have gotten a boost from crowdfunding platforms in recent years, giving them the funds to turn their inventions into businesses. But if you don't keep your crowdfunding campaign focused on your core product and message, it is likely to fail, says Ryon Lane, creator of the YogoMat, a foldable yoga mat for on-the-go practitioners. Lane's first campaign for the YogoMat fell short of its funding goal because he diverted attention away from his core product, a yoga mat, with yoga accessories and T-shirts. He also "went way overboard with too much background" on the product and campaign rewards, he says. In Lane's second campaign, he ditched everything but the YogoMat itself and alternated short blocks of text with images so that potential backers wouldn't get overwhelmed and miss the point. More: 5 Lessons I Learned From My Failed Kickstarter Campaign
Consider employee morale before giving yourself a large salary.
Many early-stage startups don't have much money in the bank, so they have to offer equity and other incentives to attract talent. If you're in that boat, it would be wise to apply the same standard of compensation to yourself, says Joan Farre-Mensa, assistant professor of business administration at Harvard Business School. Otherwise you may be signaling to your employees that you want your rewards now because you aren't planning to stick around. "If the entrepreneur is drawing a big salary, this can be interpreted as lack of confidence in the future prospects of the company, negatively affecting employee morale," Farre-Mensa says. More: 10 Questions to Ask When Determining Your Salary
Look to the Coke bottle when designing your packaging.
It might sound obvious, but a product needs packaging that fits its identity. "After you've envisioned your product's characteristics, those consumer touch points should fit the look of its packaging as well," says Debra Kaye, a brand and culture strategist and partner at Lucule, a New York-based innovation consulting firm. She points to the classic curvy Coca-Cola bottle as a perfect example. When first introduced in 1915, that bottle became emblematic of the brand's association with "health, discreet sexiness and vigor," Kaye says. Figure out how you can represent your brand and products visually, and you will be on your way to designing the sort of packaging that flies off store shelves. More: The Secret to Successful Packaging Design? Simplicity.