The reading level for this article is Novice
Editor: Rich Battle-Baxter, Rutgers University
Publisher: Ryan P. Allis, University of North Carolina at Chapel Hill
Sponsors: Center for Entrepreneurship & Technology Venturing, The Entrepreneurs’ Coalition
“Whatever the mind of man can conceive and believe it can achieve.” – Napoleon Hill, best-selling author and motivational speaker
:: CONTENTS
1. Message from the Editor
2. A Checklist for Starting a Business
3. Should I Go to College: Part Two
4. Book Review: The Student Success Manifesto by Michael Simmons
5. Interview with Alston Gardner
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Section One
Message from the Editor
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Welcome to the fifth issue of ‘The Young Entrepreneurship Herald.’
In this issue we include ‘A Checklist for Starting a Business’ from the Business 101 Series, an article by young entrepreneur Ryan Allis on his first year at college, a review of Michael Simmons’ new book, The Student Success Manifesto, and an interview with OnTarget founder and successful entrepreneur Alston Gardner.
Along with this issue, we will be sending in a separate email an article by zeromillion.com founder Ryan Allis, ‘And So the Journey Begins,’ which highlights the exciting things that he and our team will be up to over the next year. We encourage you to look for this article and send any comments directly to Ryan at ryan@ryanallis.com.
This issue, along with all past issues, can be found online in the Young Entrepreneurship Resource Center at http://www.zeromillion.com/young/.
I thank you for reading this issue and being a subscriber of The Young Entrepreneurship Herald. Please do forward this on to your friends and colleagues.
Cordially yours,
Richard Battle-Baxter
Rutgers University
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Section Two
A Checklist for Starting a Business
Provided by youngentrepreneur.com
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With few exceptions, every business begins as a small business. Some stay small, others grow as the years go by. Profitability and future growth of a business are based on the ability to understand business operations and make good decisions. Good business planning is focused on a vision of the future while recognizing current resources, intended activities, and financial realities. It also reflects foreseeable changes within and outside the business that will affect the business and its future vitality.
Given all those realities of business life, it’s important to get off to a good start. Before diving headfirst into setting up your own small business, it’s important to understand what is involved. This checklist provides some guidance for your initial business planning. Identify and carefully consider the advantages and disadvantages of owning and operating your own business.
1. Identify and think through your motives for going into business. Make one list of specific advantages and another list of specific disadvantages of owning a business.
2. Assess your entrepreneurial qualities. Think about the longer term. How long and how complete a commitment to your proposed business are you willing to make?
3. Assess your business skills. Consider your skills, your experiences, and your qualifications for completing marketing, financing, planning and management functions. List your strengths and weaknesses. Determine what you need to learn, or to hire someone else to do.
4. Do enough market research to identify the market for product(s) or service(s) of the type you are expecting to sell. Read and complete the worksheet.
5. Discuss your proposed business activity and the level of your potential involvement in business operations with your family. Are you prepared to work long hours throughout the first year or two? Is your family willing for you to do so? If needed, are you willing to work long hours for the next five or ten years? Is your family willing for you to do so? Think seriously about the demands that will be placed on your time and energy by the business operations.
6. Find the best location for your business. Keep in mind the locations of your competitors and your customers as you do so. Place priority on a location suitable for the product(s) or service(s) you intend to supply. If you are launching an e-business then ensure you have a proper website designed and hosted.
7. Before making a commitment for a site, check with city/county officials to determine whether your proposed site is zoned for the use you propose. Select a site and develop a plan that complies with local zoning.
8. Based on your plan, obtain local permits and/or variances from city/county zoning officials, pay the required fees, and have the permits in hand before paying for the site and/or making improvements to property as needed for your business. Consider making an offer to buy property conditional upon a permit or variance being secured.
9. Select a name for your business that is appropriate and memorable. Avoid words or phrases that might offend others. Avoid using a name that’s the same or very similar to the name of an already established business. Develop your logo.
10. Select the appropriate form of business organization (sole proprietorship, partnership, S or C corporation or limited liability company) for your business. Consult with an attorney who has business clients and is able to provide you with advice on the type of business organization most suitable for your business activities. Incorporation can be done online or through your attorney.
11. Compile historic and projected financial statements and complete a business plan. Apply for needed credit.
12. Open a business checking account under the name of your business. Use it to receive and pay out the funds from or for all business transactions.
13. Select an insurance agent with expertise to match your insurance needs. With the help of this agent, select insurance providers with solid reputations who offer the specialized coverage you need for your business at competitive premium costs.
14. Set up a bookkeeping system that “fits” your business — one you understand and will use to record all transactions and related information. Use a method that allows you to easily draw information from your records and use it when you make management decisions. Place priority on having a system of bookkeeping and financial management that minimizes the time and effort required to maintain complete records.
15. Use a bookkeeping system to record information for your business only. Do not combine with personal or other business information. Establish the system early in the process of planning your business activity.
16. Design an advertising and promotion program that doesn’t exceed your budget and will reach the target audience for your sales message.
17. Compile estimates of your costs for each of your products or services. Then, set your prices to cover all costs plus a reasonable level of profit.
18. Borrow, buy, or lease office equipment as needed. Compile telephone system and equipment information and select a system and equipment that will meet your needs and the needs of your customers.
19. Write employee job descriptions, clearly defining the duties, responsibilities, special requirements, and work conditions for each position. When your business is underway, use these job descriptions when you hire employees and as a basis for appraising each
Think through and write down your principal business policies. Doing so will help you establish order and will provide guidelines for your day-to-day business activities. Later, when you have employees, be sure they know and understand your business policies so you and they will operate in the same way as business is conducted.
When you have addressed all the items on this checklist and also have taken care of all the other issues that will emerge as you plan to start your own business, take a little time to think again about your ability and willingness to make the commitment required to start and maintain a business. Consider your family and their willingness to accept your business involvements and provide the financial and psychological support you will need as your business starts and grows. If you conclude it’s time to start up your own business, move ahead with anticipation. Having your own business will be challenging and difficult at times, but with good planning and good luck it also will be great fun!
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Section Three
Should I Go to College: Part Two
by Ryan P. M. Allis
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Article online at http://www.zeromillion.com/young/college.html
On November 14, 2002, I came to the conclusion in my article, ‘Should I Go to College’ that I had made the right decision in going to college. As I noted, however, this decision had not come easily. In fact, until early November, I was very much in doubt about whether I had made the right choice.
In late September I wrote in my journal, "Now in college, I have begun to develop a helpless, poor man’s attitude of dependency. I have not had the time to do interviews or make many business contacts here. I have lost all the momentum I had when I left Bradenton. If I would have stayed I could have made $200,000 this year, bought a house, invested in real world education, and traveled the world at my leisure. Now, I am just a normal college student. Why am I here?"
By the time I wrote ‘Should I Go to College,’ however, I had by then changed my mind. I noted that had finally met some young entrepreneurs, discovered the Carolina Entrepreneurship Club, and was learning how to take care of myself and live without my parents. Although I had given up a lot in going to college, I was beginning to see the value of college.
This article, one could say, is the follow up, the part two of ‘Should I Go to College.’ Now with the year finished, what do I think about my decision? Do I still believe that I was right to go to college? In the end, what did I gain and lose? Will I be returning next year?
First, let me unequivocally state that going to college was absolutely the right decision for me. What I have gained this past year has many times outweighed what I have lost. The relationships I have been able to build, the friends made, the fun had, the perspective gained, the learning done, the progress towards a degree achieved, and the personal development accomplished all have been invaluable to me. I have come out with better psychological health, a new philosophy on life, and a growing network. Let me analyze each of these.
Time Was Money
My senior year in high school was different from that of most. Each weekday I would wake up at 6:30am, go to school for four hours, and then go to work for eight hours. I’d then come home and talk to my girlfriend on the phone, finish any homework, and fall asleep at midnight. Much of my life was dedicated to building the company I was working with. Having a crucial role in building this company from $0 in sales to $1MM in sales during this year was a wonderful learning experience. It did, however, have some negatives.
Continuing with the company until the week I left for college, I was still in work-mode when I began university. All my friends, besides one, were over twenty-seven. I viewed everything in terms of opportunity cost, and this took a heavy toll on my psychological health. I honestly could not relax for if I did I would see myself as losing money. While it was good that I had a tremendous work ethic, I soon realized that all I was doing was working, either on school or business, eating, or sleeping. I felt guilty the few times I did relax as I felt that I as long as so many persons in other countries were suffering and did not have the opportunities that I had, I had no right to relax.
At this same time, I was confronted with a big challenge. For the first time in my life, I found myself having to take care of myself. I had no father to wake me up and no mother to make dinner for me. I had to buy my own food and wash my own clothes. I had no car and thus little freedom, and upon arriving in Chapel Hill did not know a single person. In short for most of August and September 2002, I was psychologically strained and a bit depressed. I was a workaholic and not all too happy. I was debating whether or not I had made the right decision. Fortunately, however, as I noted in my November article, things soon took a turn for the better.
A New Philosophy and New Opportunities
By January, out of necessity I had developed a new philosophy. In short, I stopped viewing everything as having a monetary opportunity cost and further realized the importance of relationships and psychological health. I realized that if I did not have a little fun and invest time in making friends I would never have the health or contacts to help anyone else. I discovered that I would be okay if I did not accomplish all my life goals before age 20. I took things much easier during the second semester and benefited greatly from it.
With the new semester beginning I had many new opportunities. I had finished with the dreaded calculus, accounting, and statistics classes and could finally take some humanities and economics classes that were much more attuned to my right-brained self (and that did not start at 8am). I also had developed a great relationship with Jeff Reid from UNC’s Center for Entrepreneurship and Technology Venturing. I had talked to him about doing an Independent Study in Entrepreneurship and working as a research assistant and volunteer with his organization. Beginning in January, these activities would prove to be a source of tremendous joy for me.
Through my Independent Study in Entrepreneurship I discovered many good books which will help me make Zero to One Million a better book including New Venture Creation, Entrepreneurship, HBR on Entrepreneurship, Innovation and Entrepreneurship, Political Ideologies and the Democratic Ideal, The Young Entrepreneurs’ Edge, The Young Entrepreneurs’ Guide to Starting and Running a Business, How to Win Friends and Influence People, and The Student Success Manifesto, among others.
With Jeff’s help I was able to sit in on three MBA classes this past semester—‘Venture Capital Deal Structure,’ ‘Legal Issues for High-Technology Start-ups’ and ‘Managing Small Businesses.’ I was also able to start an interview series with successful entrepreneurs and as Vice President of the Carolina Entrepreneurship Club build the fledgling club to over fifty dues paying members. I was back into the entrepreneurial game, laying the foundations with a new friend of mine for a software venture, and was actually going out on Friday and Saturday nights with friends my own age.
From these experiences I learned three important lessons. First, to have friends, one must invest time and be a friend. Second, life goes on. If you are depressed one moment, change a few things and your mental attitude and wait a few weeks. You’ll likely be better. Finally, if I had all the money in the world, I would want to be exactly where I was—in college, living in a dorm with all my friends. I should not have been in such a hurry to get out of there.
By the end of the year, while I still worked hard, I did not work all the time. I took time to enjoy life, built strong friendships, and made memories I will have with me for the rest of my life. Taking it easier and focusing on building friends and relationships made me a much happier person.
How I’ve Developed
This year at UNC has been very important in my personal development. I left Florida in August as someone who knew web marketing. I’ve come out the other end as a full-fledged entrepreneur that understands the entire process of starting a business. Incorporating my first company in October, Virante, Inc, taking accounting, reading two entrepreneurship textbooks, adding content to zeromillion.com, and sitting in on those three MBA classes has taught me a great deal.
I came to Chapel Hill as someone not all too confident in his public speaking ability. My body would shake when I talked in front of more than three or four people and I had to read off note cards. By taking a communications class first semester, and more importantly being the Vice President of the Carolina Entrepreneurship Club and speaking to the members at each meeting, I have overcome these fears and am now a very good, non-shaking, and confident public speaker.
With this year away from home, I feel I can now live on my own. I am ready to move on to the next stage of moving into an apartment and soon after a house. Going straight from living with mom and dad to the real world, without this year of apprenticeship in the dorm, would have been too much. Living in an apartment setting, I would not have been able to find friends, especially if I lived where I was in Florida, far from any good colleges. I am now a bit older, a bit wiser, an inch taller, and thirty-five pounds heavier.
What I’ve Learned
This year at UNC I have learned from both my academic classes and from experiencing life. I have learned about accounting, statistics, calculus, public speaking, organizational management, starting a business, interpersonal relations, personal care, Western History, psychology, venture capital, friendship, fun, economics, and life. Learning about double-entry bookkeeping, derivatives, standard deviations, the Freudian Id, the Reformation, the time value of money, and the Solow economic growth model has been just as important as what I have learned about how to deal with, persuade, and analyze people, how to make friends, how to enjoy myself, how to live without parents, and how to speak to a large group.
I have become a much more conscious person and much better at dealing with, being around, and talking with adults. Living with teenagers and having cable, I have learned about popular culture and how normal teenagers think. I now know about John Mayer, Dashboard Confessional, 50 Cent, Billy Joel, college basketball, and the importance of instant messenger. Most importantly, I have developed a knack for beer pong and a love of clubbing.
Building My Network
Leaving for Carolina in August my network was nearly non-existent. By focusing on building relationships this year I now have some very strong connections and access to nearly anyone I would want to get in contact with, only one or two persons removed. I’ve met three dozen millionaires, very good attorneys, heads of entrepreneurship organizations, future board members, venture capitalists, business professors, student entrepreneurs, media contacts, business partners, and some people who I can just have a good time with. I have built zeromillion.com to a site receiving 53,000 unique visitors each month and the Entrepreneurs’ Chronicle and Young Entrepreneurship Herald newsletters to 9,500 subscribers.
Progress Toward a Degree
If I had not gone to UNC this past year, I may never have made it through college. After just eight months of school and with AP and SAT II credits, I have finished half of what I need to do to graduate. I have 56 credits out of a needed 120 and can graduate with only four more semesters. I have earned a 3.76 GPA overall and furthered my immense interest in economics. Although I will be taking next year off of school to focus on business, writing, and travel, I will be able to graduate with my class in May of 2006.
I do feel confident that I will come back no matter how successful I am in my time off since I want to study economics, business, and history further, and also be able to have an undergraduate degree to I can do an MBA or Ph.D down the road.
But is College for You?
Just because it worked out as the best thing for me this year does not mean going to college will be the right decision for you. While I think at least a year in college would benefit all aspiring entrepreneurs, I must preface these remarks by emphasizing it is not for everyone. Let me quote part one of ‘Should I Go to College’ to further explain this point.
"In case there is anyone reading this that is considering starting their own company and not going to college, let me say this. Be very careful. For most people I would say that both a college degree and the college experience would be extremely beneficial. I feel that I may have been part of a select group that already had such specialized skills and such knowledge about the way the world worked that I might have been fine without going to college. If you feel you are in this group by all means go for it.
However, make sure you have a mentor and a support team to help you along the way. Both of the two young adults I know who have been able to create successful companies without going to college had mentors that helped them with their businesses, developed a support team of lawyers, CPAs, and a board of directors, and hired top quality talent to help manage and grow their businesses. Further, you need a good idea. No matter how hard you work if you cannot provide a service or product that the market demands you will not succeed.
College can be a great time to refine a business plan and build the contacts needed to make it a reality, so choose carefully. However, at all but the best schools it may simply not be the best use of your time if you know exactly what you want to do and feel you have the means to achieve it. There are plenty of ways to network, develop as a person, and to learn what you want to learn without being in a structured educational environment. College is not a prerequisite for success in business by any means. However, if you have other goals such as becoming a teacher, scientist, engineer, or working in Corporate America a degree will be necessary.
On a final note, I have seen many motivated people not go to college and instead of building a support network and successful businesses have fallen into the hands of idleness and in some cases drugs. Do not let this happen to you. Either way, you will reach your dreams. Just keep at it and work hard."
Let me express further express view by quoting my friend and collegiate entrepreneur Ruchit Shah,
"You’ve got all your life to be responsible, well mannered, practical, but you’ve only got four years to be invincible, to spend money with but a dime to your name, to live with your best friends in the world, to take chances with no care for the consequences, to sleep at sunrise and wake at sunset, to love with no regard for anyone but her, to be educated on what you want to learn, to experience what you will only attempt to describe in words later&ldots;to live as if you were to die tomorrow."
If you have the opportunity and are still in high school, work hard so you can get into a good college. It will be a time during which you will meet the friends and contacts you will have for the rest of your life, grow immensely as a person, receive free consulting from business professors, immerse yourself in what you are interested in, and learn about love, life, and people. If you do not or did not have this opportunity you can surely succeed without a degree. You’ll just need extra enthusiasm, diligence, and an ability to learn from life. The key to knowledge is to always know the right questions to ask and be prepared for whom you meet along your journey. The key to psychological health is to invest time in being a friend and having fun, while maintaining a good work ethic. Remember these two keys and you’ll always be okay.
Foundations of Success
Through I will always be a prolific traveler, Chapel Hill is my home now. I have found no truer saying than, "Home is where your friends are—people that know your name and care about you." I am physically and mentally healthy. I am happy. I have laid the foundation which will enable me to over the next fifteen months reach my goals and accomplish some very meaningful things. I have laid the foundation though which I will be able to publish Zero to One Million, build a million dollar company, start my foundation, and be learning from and engaged with life each and every day. I am $9,000 poorer but infinitely richer. I made the right decision.
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Section Four
Book Review: The Student Success Manifesto
By Michael D. Simmons
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The tag line for Michael’s book is the ‘all or nothing, now or never guide to creating a life of passion, purpose, and prosperity.’ A more appropriate description could not be worded for this highly recommended book. Within, the New York University senior explains his ‘Extreme Entrepreneurship’ philosophy, provides an overview of how to succeed in business, explains how he has created a successful company over the past five years, encourages college students to start their own company instead of working for someone else, and creates a curriculum for students to follow as they apply the extreme entrepreneurship philosophy to their everyday lives and venture on the path toward business success.
As a book I will be drawing upon heavily for Zero to One Million, I highly recommend The Student Success Manifesto. The book is available as a 192 page ebook and can be purchased on the web site for $9.95. It is worth every penny and Michael offers a full guarantee.
For more information and to purchase the online version of The Student Success Manifesto, visit http://www.successmanifesto.com.
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Section Five
Distinguished Entrepreneur Interview with Alston Gardner
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What attributes make a successful entrepreneur?
The successful entrepreneur must have the vision to identify a problem no one else is solving, or a market niche no one else is serving, or a strategy no one else is pursuing. They must have passion for solving that problem with riches as the byproduct not the end. The must have the ability to focus all of their time and energy to the exclusion of everything else in their life. They must be willing to risk everything to succeed.
What do you believe are the necessary elements for a business venture to succeed?
A successful business venture starts there and ends with the CUSTOMER. Great ideas, committed people, and capital are important because the ideas will attract the customers, the people will make sure they buy and keep them there, and the capital will allow the entrepreneur to take advantage of the opportunity.
How essential do you see an undergraduate degree or MBA being for an entrepreneur?
Not at all. My degree is in History. Most of my business education came in Exec. Ed classes or reading.
What role has academic education played in your own life versus the role of experiential learning and what has been the relative importance of each?
My academic education provided me analytical/logical frameworks, the capacity to make an argument, and the ability to persuade. My "street" education taught me far more about human behavior, passion, and perseverance. Both are critical for success.
What are the three most important lessons you have learned about business and entrepreneurship in your lifetime?
1. Imagination, passion and hard work trump formal business education every time.
2. Relationships (customers, partners, and employees) are the most important asset and they are not on the Balance Sheet.
3. Leadership is less about the exercise of power and more about serving others – customers, shareholders, and subordinates.
What have been the keys to your success?
1. A lot of great people who believed in my ideas and leadership and were willing to do amazing things to fulfill our mission.
2. Luck
What advice would you give to an aspiring young entrepreneur?
1. Focus on solving a problem for your customer rather than making money. Your customers, vendors, and employees can tell the difference between commitment to others and greed.
2. Always know how you’re going to make money. Test your business model with disinterested third parties.
3. Surround yourself with smart, committed people. Write out your beliefs and principles and make sure everyone in the organization knows and follows them.
What books would you recommend to aspiring entrepreneurs? Which books have influenced you the most?
In no particular order:
1. Built to Last by Collins will help an aspiring entrepreneur underst and what makes a great enterprise.
2. True Professionalism by David Maister will teach you how to act like a professional.
3. The Marketing Imagination by Ted Levitt will teach you about the "whole product".
4. Selling the Invisible by Harry Beckwith will teach you about customers.
5. SPIN Selling by Neil Rackham will teach you how to handle yourself in sales situations which is the most critical skill in a new enterprise.
6. Please Understand Me by David Keirsey and Marilyn Bates will teach you how Jungian psychology can be applied to day to day life so that you can work with anyone.
7. The Elements of Style by William Strunk and E.B. You will be judged on your writing. You don’t have to be Shakespeare, but you have to get it right.
8. The Bible – especially Ecclesiastes & Solomon from the Old Testament, the New Testament will teach you about leadership.
Describe some of the biggest challenges or obstacles you’ve have encountered as an entrepreneur. How were these overcome?
The biggest challenge I had was changing my role and my leadership style as the company grew. Early on I was obsessed with knowing everything in the business. We didn’t have extra people so I had to know everyone’s job. We couldn’t afford to lose a customer so I knew all of the customers. We were short on cash so I knew every details of the accounts payable and the accounts receivable. This incredible intensity served us very well early on and could have been an impediment to growth. Over time, I had to recruit a leadership team, define a new organization structure every 18 months, and delegate most of my responsibilities. The skills and abilities to succeed in these two environments are almost mutually exclusive. Very few entrepreneurs can do both and most are unwilling to set their egos aside to even try.
I had a great advisory board and an incredible team who grew along with me. Corporate Lifecycles by Ichak Adizes also really helped me understand what the changes I need to make to meet the challenges of each stage of our growth.
What memorable mistakes, if any, have you made in business? What did you learn from them and how can they be avoided?
The mistakes I made usually came from compromising our business principles. Every time I varied, we got burned. It is really important you know what you stand for and what you are unwilling to do. You don’t need a long list or you’ll become inflexible. Six or seven key principles are enough.
What trends and changes do you see occurring in business today? What new technologies and industries will everyone be talking about in twenty years?
1. Information is available to everyone – Customers, vendors, competitors, amd employees have access to all of the same information you do. Competitive advantage will be who you are, what you stand for, and how you do business. These are the most difficult things to emulate.
2. Global and local focus. Every business will be pushed to become global in some respect. Your customers will drive it. Your suppliers will drive it. Your competitors will drive it. While you must know what’s going on around the world, you must deliver a local experience for the customer. For example, bank customers want very expensive technology allowing them to access their accounts from anywhere in the world and they want a personal relationship at the local branch.
Would you rank the following attributes in order of greatest to least importance for an entrepreneur?
1 = Most Important 5 Not Important
1 Persistence
5 A College Degree
4 Knowledge of Accounting and Finance
2 Knowledge of Marketing
1 Confidence
2 Leadership and the Ability to Inspire
2 Ability to Communicate Effectively
3 Integrity
3 Having the Right Advisors
3 Good Networking Skills
1 Motivation and Ambition
2 Having a Good Idea or Plan
1 Being Able to Build a Solid Team
1 Being Able to Execute
1 Having a Bias towards Action
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This concludes issue five of The Young Entrepreneurship Herald. We’ll see you in June.
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Contact Publisher: Email ryan@zeromillion.com
Editor: Rich Battle-Baxter, Rutgers University
Publisher: Ryan P. Allis, University of North Carolina at Chapel Hill
Sponsors: Center for Entrepreneurship & Technology Venturing, The Entrepreneurs’ Coalition
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"Nothing great is ever achieved without enthusiasm." – Ralph Waldo Emerson
