Entrepreneurship Advice for the Class of 2010
Congratulations to the graduates of the class of 2010. You have degree in hand and are excited and ready to face the many opportunities that lie ahead of you. Undoubtedly, many of you harbor the desire to fulfill the true American dream and successfully build your own business . True, the current economic climate is tumultuous, but down markets are actually a fantastic time to take risks, as long as they are calculated. But if entrepreneurship were easy, everybody would be doing it, right?
To all of you budding entrepreneurs, here is my advice:
Eighty-two percent of small businesses close their doors within five years. In fact, one in three shut down in their second year of business. Those odds are daunting, but the best indicator of success is to first identify a need in any given market and then figure out how to address that need. Too many companies have failed because they were created based on great technology looking for a home, rather than addressing a business problem. Successful entrepreneurs are maniacally focused on finding and delivering solutions to very specific business problems.
Not only must you be maniacally focused on delivering solutions to a specific problem, but defining the target market as tightly as possible is also important. One of the top reasons small businesses fail is lack of targeting a specific market. Take the time to develop a targeted customer profile . Know what these people think and what their problems are--find a way to speak directly to them. Offer them a solution to a problem at a price point that adds significant value. This is what will grow your customer base and ultimately make you a success.
Networking is an important tool that can help you in a pinch. As an entrepreneur, you'll be expected to wear many hats--you'll find yourself trying to fill the role of chief salesperson, business planner, office manager, payroll manager, human resources manager, brand manager, chief financial officer, technology manager, project manager and bill collector. Don't be afraid to call in the professionals, and don't be afraid to ask for help when you need it.
Entrepreneurs are truly the backbone of the American economy, yet the risk of compliance and liability lawsuits has risen significantly with the recent explosion of new labor laws and employer regulations. High tax rates, excessive regulation, pro-union bias and constraints on capital formation are just some of the challenges stifling innovation and hindering the success of small businesses. Learn these regulations and comply with them completely. If you don't have the time to do this for yourself, find someone who does. A labor advisor or HR expert will be able to protect your company and help you avoid fines or litigation. Dealing with legal actions is not only expensive but robs you of the most important asset you have--your time.
Talk to a lot of people and get a lot of perspectives, but ultimately form your own conclusions. You must believe in yourself before anyone else will.
Always work with people who are as passionate as you are. Demand excellence and ensure that staff is committed to your vision. Building a strong workplace culture will not guarantee business success, but culture is a key determinant in attracting talent.
We're living in an exciting time, and those of you with a true entrepreneurial spirit will go far--ultimately building successful, innovative companies. I wish you all the luck and success on your journey.