This innovative Nairoba gal has killed two birds with one idea, one brilliant creative idea.
You can too!
From left photo… To right product…
This innovative Nairoba gal has killed two birds with one idea, one brilliant creative idea.
You can too!
From left photo… To right product…
Mentorship might seem like a quaint idea reserved for young, fledgling professionals just starting to spread their wings. Studies have found, however, that mentors predict a greater chance of success even for entrepreneurs who already have considerable experience of their own. Successful startups are more likely to be led by entrepreneurs that have been taken under the wing by a more experienced mentor.
These findings beg the question: How does one find a mentor? Finding a mentor seems particularly problematic for more experienced entrepreneurs and executives. We are no longer rookies or interns who can learn on the job from our superiors. We are the superiors. Fortunately, the growth of mentorship among entrepreneurs and the C-suite provides some guidance on finding a mentor right for you.
Check your egoFirst, check your ego at the door, even if that door opens to your exclusive corner office. In my experience, many executives and entrepreneurs consider a mentorship to be a sign of weakness. This bias is positively correlated to the more experience, and success, they have achieved. Why seek guidance from another when you have already succeeded? My only answer to this is consider Bill Gates. Gates has publicly acknowledged his continuing mentee/mentor relationship with Warren Buffet. Gates knows that, no matter how much success he has achieved, he can always learn more. Setting your ego aside is the first step to finding a mentor who can expand your knowledge.
“Strong opinions, loosely held.” It’s a phrase my co-founder, Lucas Dickey, says regularly. It’s not his saying, but rather a framework developed by futurist Paul Saffo at Stanford for making decisions with incomplete information. And if anything defines the life of an entrepreneur, it is incomplete information. One way that I have continually found helpful in closing this information gap is through a strong network of mentors, which in my experience come in three varieties: 1. external mentors, 2. internal mentors, and 3. customers.
External mentors are what people typically think of when you describe “mentors.” They can be family, friends, investors, advisors, executive coaches and so on. They take an active role in shaping you and your business from the outside in by providing perspectives across a vast array of experiences. This can be a huge value-add to us as entrepreneurs given we are fairly localized experts in a specific market, software, or solution. Recruiting a strong network of external mentors takes significant time and energy — and it also requires humility, a high degree of self-awareness, and strong listening skills. You need to convince the most relevant individuals you can find that you are eager to absorb and apply their knowledge to challenges your business faces. I “recruited” two of my closest external mentors — Stuart Epstein (former CFO at NBCUniversal) and Sean Atkins (former President at MTV) — early on in my career with a mix of networking and persistence. They provided excellent initial advice around managing my transition out of a career in finance into an early stage startup, and have both continued to provide valuable perspective as I’ve gone on to found and build my own company.
Startup accelerators like Techstars are actually built around external mentors, and Techstars embodies this in its mission statement of “Give First.” Fernish, the furniture-as-a-service company I co-founded, participated in a Techstars Accelerator in our first year of business. The program not only jump-started our company’s external mentor network but also helped me refine the skills around active listening and self-awareness that ultimately made me a better mentee and business person. After being featured on Entrepreneur Elevator Pitch, our company landed a $30 million round led by RET Ventures and involved Amazon Worldwide Consumer CEO Jeff Wilke, Intuit Founder Scott Cook and TechStars.
But even when you have a great network of external mentors at your back, the complexity of being the entrepreneur is sifting through the various opinions of an incredibly smart group and determining the right path for your specific business.
I am a strong believer in building a team of the most impressive people you can find, people you would proudly work for under different circumstances. If you are successful at this, your team becomes a group of high-touch, day-to-day mentors from whom you can absorb some highly relevant skills and knowledge. At Fernish, the first hire I made was my co-founder, Lucas. I regularly describe Lucas as the smartest person I know given his deep understanding of technology, organizational management, and a proven ability to methodically build and scale a business. Lucas and I had worked together at a previous startup, Atom Tickets, where we built an excellent working relationship — but it was still a months-long recruiting process to get him to join me and start Fernish. I could have chosen another co-founder and might have got the business off the ground earlier, but the uncertainty around working relationship and skill set would have just added to the already risky nature of starting a business.
We’ve focused on hiring a group of overqualified, fairly senior individuals who are happy to be individual contributors while getting our company into a position to scale. Similar to external mentors, the way to find and convince a team of bar-raising individuals to join you is through a combination of storytelling and humility. And, like in the case of my co-founder, it can take a while. But having strict discipline in hiring that is rooted in rigorous recruiting and screening processes will yield a group that will accelerate both your business trajectory and your entire teams’ learning curve.
While external mentors provide a breadth of applicable perspective and internal mentors propel growth and learnings day-to-day, your customers are actually the most important mentors you can have. Customer development and understanding isn’t just critical to your business, it is your business! How are you speaking to your customers? How often are you doing so? How do you synthesize that information and act upon it? What do your customers value? What motivates them? What hesitations do they have about using your product or service? How do you get them over the hump to do so? These are not easy questions to answer. At Fernish, we have a methodical approach to customer development — for both active customers and those who don’t quite make it to the bottom of our funnel. It involves a combination of surveys and interviews across a refined list of questions with measurable inputs and actionable outputs. For instance, we’ve found out there is actually a lot to be learned from how much customers are willing to spend on a latte (correlations rather than causations, but who would have thought!). The concept of “customers as mentors” can lead to some tough decisions that go against internal theses and legacy product development. However, these decisions will both align you more closely with your customer and start to fill some of the gaps in information asymmetry.
Building a network of mentors in each of the above varieties is a challenging, time-intensive, and intentional process. But it will provide you with an essential perspective when making decisions with incomplete information. And as you go through this process, I think you will find that engaging with a robust, interdisciplinary mentor network is one of the most rewarding parts of entrepreneurship.
The method you use to take funds out of your business depends, in large part, on your entity type.
If you’re a sole proprietor, a partner in a partnership, or a member of a standard LLC, you’ll likely pay yourself with an owner’s draw. This is the most flexible payment method, allowing you to withdraw cash from your company’s equity account (your business earnings plus any capital you’ve invested in the business) at any time.
If you’re the owner of a business taxed as an S-corp or a C-corp—and you’re actively involved in running the company—the rules are bit more rigid. The IRS requires employee-shareholders of corporations to be paid reasonable compensation for their work, in the form of W-2 wages.
In the process of starting a new venture? You’ll want to reflect on your preferred method of taking funds out of the business before you settle on an entity type.
Business owners looking for a middle ground should note that there is a little leeway when it comes to S-corps. In a business taxed as an S-corp, owners have the option to supplement their regular salary with an owner’s draw.
As noted earlier, being a sole proprietor, a partner in a partnership, or the owner of an LLC means using an owner’s draw to pay yourself—at least in most cases. While this may be the simplest way to take money out of your business, you should be aware of a few guidelines and best practices for each business type.
For business owners operating as sole proprietors, the owner’s draw is the only legally-allowed payment method.
You can take funds out of your business at regular intervals (or anytime they’re needed) by writing yourself a check, making a cash withdrawal at the bank, or transferring a sum from your business account to your personal one.
Careful record-keeping is critical: each time you withdraw cash from your business for personal use, be sure to note the amount on your company’s balance sheet. Maintaining a clear separation between your business and personal finances will give you a clearer picture of your company’s profitability and remaining equity.
Planning ahead for tax time is also key. Any money you receive from your business in the form of owner’s draws will be taxed on your personal income tax return, at the self-employment rate of 15.3 percent. This means that for each cash withdrawal, you’ll need to set aside this percentage for your annual or quarterly tax payments to the IRS (most business owners pay their taxes quarterly).
Partnerships are pass-through entities—each partner’s share of the business profits flows through to their personal income tax return. As with a sole-proprietorship, you’ll use an owner’s draw to pay yourself, and will owe self-employment taxes on these funds come tax time.
Where partners differ from sole proprietors is that each partner’s equity is distinct. You can only withdraw funds up to the amount of the capital that you, as an individual, have contributed to the business.
In addition to taking an owner’s draw, partners have the option of being compensated through guaranteed payments. These are regular payments made to an individual partner for their services or investment in the partnership, made regardless of whether or not the company is successful. Unlike an owner’s draw, a guaranteed payment is considered a deductible business expense and reduces the net profit of the business.
By default, LLCs are generally treated like partnerships in terms of taxation, and owners (called members) cannot be compensated with W-2 wages. As an owner of an LLC, you’ll pay yourself with an owner’s draw.
To safeguard your liability protection, you’ll need to do your best to keep personal and business accounts separate. This means carefully recording every owner’s draw you take.
If you’d prefer to pay yourself a salary or wages as an LLC owner, this option is available to you. However, you would first need to apply for S-corp or C-corp tax treatment—which may have other tax implications for your business.
There’s more to paying yourself with an LLC than meets the eye, and you’ll want to sit down with your accountant or tax professional to determine the method that will result in the greatest tax savings and business growth.
If your business is taxed as a corporation, you’re required to pay yourself W-2 wages, and these wages will be subject to tax withholding.
Unfortunately, the IRS doesn’t provide a clear-cut definition of what constitutes “reasonable compensation,” so it will be up to you (and perhaps your accountant or tax professional) to determine a reasonable wage based on what other companies are paying their officers.
Keep in mind that reasonable compensation is based on the value of services provided, not the company’s profitability.
Outsourcing your payroll to a third-party provider can help to take some of the guesswork out of paying yourself (and any other employees) and set you up for an easier tax season.
In addition to paying themselves a reasonable wage, owners of S-corps can supplement their income with an owner’s draw (referred to as a distribution, in this case).
However, things can get tricky if an S-corp has multiple shareholder-employees, and if distributions between all shareholders aren’t equal. This is because S-corps are legally required to have only one class of stock, and the IRS views disproportionate distributions as evidence that a corporation has a second class of stock.
If the IRS believes this is the case with your company, you could be taxed as a C-corp (at the rate of 21 percent).
As the owner of a C-corp, your salary needs to meet the IRS guidelines on reasonable compensation mentioned above. If you need to withdraw money from the company (above your salary) it must be paid out as a dividend, as the owner’s draw method is not legally allowed.
Another option available to you is supplementing your income in the form of bonuses. A bonus, like your salary, is a tax-deductible expense and will lower your corporation’s total taxable income.
Just be careful to not pay yourself “unreasonably high” compensation (via your salary or bonuses), as the IRS views excessive compensation as disguised dividends, which are not tax-deductible.
Tax rules for corporations are complex—once you’ve mapped out your personal expenses and have an idea of what you want to pay yourself (and how you want to do so), work with your CPA or tax professional to ensure your corporation is tax-compliant.
Courtesy of SCORE Newsletter by Drake Forester, Legal Strategy Officer
We don’t talk much about COVID-19 here. Which, of course, doesn’t mean it’s not affecting pretty much everything most/all of us do. On our end, the one thing we hear consistently from our clients these days is this: With the whole remote work situation, productivity has shot way up. It looks like people do get a bunch more work done from home than if they were in an office — and that even though working from home, for many, isn’t a walk in the park (and for quite a few outright impossible). And while productivity is up, creativity is down… Probably not surprisingly, creative endeavors need a certain amount of messiness, serendipity, bouncing ideas off of each other, and maybe even some goofing around. All incredibly hard (not impossible — but hard) to do in a remote work environment.
Which brings me to a comment Prof. Dr. Marc Oliver Bettzüge, Director and General Manager at the EWI — Institute of Energy Economics at the University of Cologne (my alma mater) made in a session we did together this morning:
The companies which will figure out how to tame the polarity between productivity and creativity, between working from home (for focus) and in the office (for collaboration), will be the ones who will see outsized gains and advances compared to their peers.
I believe this to be true — and a massive opportunity for those of us who are nimble and quick, who can experiment to get the formula right (and “right” will look different for every company) — and something we have to get started on now. As we like to say in our keynotes: The future is a paradox.
Contributed by Pascal Finette, Chair of Singularity University Entrepreneurship
Watching your business flourish in your town is an incredible experience. Starting a local business doesn’t just give you a chance to further your career — it also provides an opportunity for you to build up your community; bring goods, business, and jobs to your neighbors; and make your mark on the place you call home. That said, it’s not an easy task. Here’s a look at some of what you’ll need to know before you get started, presented by guest blogger Marissa Perez.
Laying the Groundwork – Give your business a stable foundation:
The Early Days – Your business’s first several years might be a challenge. These resources will help you through:
Making a Long-Term Impact
Once your business is established, look for ways to give back to your community:
Local businesses have a lot of power when it comes to raising up the community and building a better tomorrow. We hope these resources help you to reach your goals and make your mark.
email@example.com Photo Credit: Pexels
Disruption led many to find new ways to serve their customers by Randa Kriss
Small businesses that survived the COVID-19 pandemic still face a long road to recovery, but some of the innovations business owners adopted last year may outlast the pandemic itself. “If you make it through this, you ask, you learn, you adapt, and I think it only makes you stronger,” says Keith Hall president and CEO of the National Association for the Self-Employed. Here are four ways small businesses adapted in response to the pandemic that may have long-lasting effects on future operations, according to industry experts and business owners.
Our prior entry below from the Florida Small Business Leadership Conference, first paragraph, introduced many to the notion of “Model Mash”. Many want a further explanation, and we aim to please:
Summary of Concept
Combining the Business Model Canvas (BMC Circa 2010) with the SWOT (reversed = TOWS, Circa 1960s) improves entrepreneurship creation planning. Each of the nine components in the BMC goes much deeper, and its use of growing a new business doubles or triples the outcome.
Dr. Randy Blass, Ex. Director of the Jim Moran Institute (JMI) at Florida State brought this idea to ERI-Clint Day in a breakout session at the 2021 Florida Small Business Leadership Conference in Orlando. Having struggled to use the BMC for 2nd stage growth, it hit this editor like a ton of bricks. Huge impact on the usefulness of the BMC.
Models help us simplify complexity. Decisions inside the “front side”of the canvas (or the customer interface on the right), the “backside” (infrastructure on the left side), and the cost and revenues at bottom are easier and better made by adding TOWS analysis to the process. Not to mention the all-important VP or Value Proposition, which with the CS or Customer Segment make-up the critical product-market it.
As example consider analysis of that part of the value proposition from the standpoint of threats, how easy will it be for competitors to duplicate the value idea? Can the product or service satisfy the needs of the customer or are there other opportunities to expand the idea for more product fits?
Together these two tools focus an entrepreneur or his team on the WHY that defines new businesses and frames missions. Components delineated using TOWS create an operating model from strategic plans to use the critical difference upon which the BMC is based, validation. Only the end-user who will actually pay for the product or service can input weakness and threats discovered through questioning. The same can be said for strengths and opportunities inside each component of the canvas (can costs be predicted, are there backup providers for key resources, etc.)?
Dr. Blass uses this “Model Mash” practice in JMI advisory roles helping Florida businesses grow and thrive. He is also kind enough to offer details on Dropbox at the link below and to give credit to Alexander Osterwalder (Strategzer.com) for the concept.
Business Model Canvas
By Clinton E. Day, MBA Editor of Current in Entrepreneurship on clintoneday.com. Dropbox link for tools & details = https://www.dropbox.com/sh/79htxt4x1xarhed/AADw-6XIY- 1tw6tTcHK87Ausa?dl=0.
After a year off for COVID-19, the best state conference for small businesses and entrepreneurs came roaring back last week in Orlando at the J. W. Marriott Grande Lakes resort. Sponsored by the Jim Moran Institute (JMI) and the Florida SBDCs (Small Business Development Centers), it always provides the most useful information. This year was no exception with topics like Cyber Risk in a Small Business World, 5 Key Elements in Marketing, Agility in a Time of Pandemic, Communications in a Virtual Environment, Data Analytics for Business Leaders, Post-COVID-19 Marketing Survival, Design Thinking, Business Resiliency, Digital Marketing for a Changing World, Marketing to the Government, Profit Mastery, Access to Capital, Mitigating Risk, Five C’s of Storytelling, Nonprofit Consultation, and two sessions on the BMC, business model canvas. One of the latter taught by Dr. Randy Blass, chair of the JIM, Jim Moran Institute, was titled “Model Mash” and blew the lid off your editor. It combines the well worn SWOT with the BMC in the sense each component of the BMC is broken into threats, opportunities, strengths and opportunities. This combination technique is super powerful, increasing the innovation of each model component. Case in point, under VP or Value Proposition, threats include analysis of substitute product or services available in the market, do competitors offer better prices or value; under the VP opportunity, are recurring revenues possible by converting products into services? Using SWOT inside the BMC adds a dynamic dimension to improve the design of a needed product or solve a problem more effectively.
Besides powerful breakout sessions, the stage provided keynotes from the likes of Amanda Brinkman from the Hulu smash hit “Small Business Revolution” (left) whose show illustrates the importance of communicating with your customers. Scott Price, founder of A-LIGN, a cybersecurity and privacy expert, provided insights from 2,500 clients across the globe for SME’s (small to medium sized enterprises) to avoid or mitigate risk. Wayan Vota, a Digital Development Entrepreneur helped explain the importance of failure in eventual success. He espouses failure as a mark of leadership and innovation in pushing the boundaries of what is possible and profitable. There is value in examining our mistakes and learning from failure.
The Jim Moran Institute in itself is a wonderful story. Jim Moran, now deceased, was a successful auto dealer who started in Chicago with a Hudson dealership. After growing into the largest Ford dealer in the U. S., he retired in the 60’s and opened a dealership in South Florida. An old friend from Chicago told him Toyota Motors was looking for a way to break into U. S. and needed a network of dealerships in the Southeast using Jacksonville Port. They arranged a territory including five S. E. states, and he sold twenty percent of all Toyotas in the U.S. his first year. About 1984 Jim began philanthropic pursuits beginning with a Heart and Vascular Center, and then, using his passion for entrepreneurship in 1995, he gave Florida State University a gift to provide free services to entrepreneurs. It was a such a successful concept that he solidified it in 2015 with the largest gift in FSU history ($100 million). The gift included the Jim Moran Institute for Global Entrepreneurship and a degree-granting school of entrepreneurship.
Jim Moran’s vision to help small businesses grow lives on through the JMI, and the annual JMI-SBDC Leadership Conference is just one benefactor. I would encourage out-of-state small businesses to attend as well. We are indeed fortunate to have this activity in Florida, another strong reason to base startups in the Sunshine State!
by Editor Clint Day, who tries to attend each year.
(Last photo includes three authors from NACCE’s new book, Impact ED. Closest is the CEO of the National Association for Community College Entrepreneurship, Dr. Becky Corbin, and two professors from the successful entrepreneurship program at the InLab, Hillsborough Community College in Tampa, Professors Beth Kerly and Dr. Andy Gold.)
The fourth summit of global lean entrepreneurship educators was held virtually from UC Berkeley on June 3rd. Hosted by Haas School adjunct emeritus Jerry Engel, there were over 300 lean innovation educators online.
Following their productive format, the keynote speaker, Dr. Laura Tyson, Distinguished Haas Business School Graduate Professor and former Obama and Clinton administrations economic advisor, gave a talk centered on the pandemic impact and the end of real interest rates. Her lasting changes from COVID-19 are a hybrid from work-from-home, e-commerce “blowning-away” real commerce, and A. I. (artificial intelligence) as a business model going forward. She also thought some of the coming increases in productivity could be mirrored and adapted by small business.
As host Engel wrote, “it was in the summer of 2019 when Steve Blank and I agreed to create the Lean Innovation Educators Summit. We had simple goals. We knew that the Lean Innovation movement created a revolution in how entrepreneurship education took place. Having been at the forefront of this revolution, we knew there were few guidelines and limited resources for those creating and leading these programs. And we knew that the best resource was the community of educators—each facing their own challenges, running their own experiments, and adapting and evolving their educational approaches. The challenge was how to capture and share these learnings. The opportunity was to build a resilient community of educators with the proverbial positive feedback loop. Thus, the first Lean Innovation Educators Summit was born.” Each successive summit has expanded the reach of evidenced-based entrepreneurship.
After the Tyson keynote, there were lean educator leaders (many of whom were original I-Corps program founders) impressions for the current landscape including:
Pete Newell and Steve Weinstein reported on the Common Mission growth, now including use of lean launch for the environment (oceans) as well as Hacking for Defense Hacking (H4D®) a university course sponsored by the Department of Defense.
Finally, educators were broken-out into smaller rooms which reported back conclusions -lean is now a truly international community, new disciplines have been created like more student-centric modes, more specific than general each with its own set of solutions.
Here is the full recording -keynote first 37 minutes, the panel of 7 at 45 minutes, discussion groups wrap at 1 hr:12 minutes (valuable). Hope you can join the group at their next summit on Dec. 2nd. Editor
Janice Johnson of On the Bayou
Janice Johnson is the founder and chef at On the Bayou, a prime location for great food, entertainment, special events, and banquets. On the Bayou brings the flavor New Orleans and the skill of a 5-star chef. They offer a variety of dishes that are sure to keep you coming back for more. Whether it’s uniquely battered catfish or the succulent lamp chops, you are sure to find the dish perfect for your taste.
Janet’s entrepreneurial inspiration comes from “Having the freedom to create my own destiny, believing in a product that I know that people would enjoy, and knowing that both my successes and failures are direct results of ME and by ME.” She also says the best part of being a business owner is “seeing people leave with a smile on their face and being recognized as the owner of a business that God appointed me to take care of.”
When COVID hit, it forced Janice to think outside the box and come up with new creative solutions. She was able to restructure her business to make I more successful. Earlier this month, On the Bayou was featured on the Food Network show Restaurant Impossible with Robert Irvine. Janice’s hard work and entrepreneurial spirit led her to enroll in the BizStarts Institute https://bizstarts.com/ bizstarts-institute/) which she graduated from in May. BizStarts is excited to work with Janice and the other Institute entrepreneurs by providing them with resources for them to make their business thrive!