Opinions expressed by Entrepreneur contributors are their own.
We’re in the middle of the richest time in human history.
Half of the relevant industries and companies that we see now didn’t even exist just 10 years ago. It’s been transformative. Money moves faster now, and companies sell faster now.
And that wealth effect has transcended to millions of ordinary people globally have been beneficiaries just by standing in the wake of decentralized and digital commerce.
But deep below the surface, there is much more that’s happening. Looking back after two years, the pandemic was the catalyst for a lot of personal and societal changes.
Related: The Key to Staying Positive in the High-Pressure World of Entrepreneurship
The impact of the pandemic
For professionals, the pandemic created a new movement initiated by the new work-from-home white-collar norms; this entrepreneurial class has formally splintered from the middle-class. For the motivated who wanted to start a business, they suddenly realized that it’s never been easier before in the history of humanity to start a business and generate revenue on your own.
Yesterday’s entrepreneurs had to worry about operating capital, getting started, finding clients and customers. To bring a product to market was expensive and one failure could wipe you out. Today’s entrepreneurs can test messages, products and pictures on social media, get an immediate response and change course immediately. We see this with politicians more and more now, too.
Today, it’s not about making a new widget. It’s almost all about owning your media. Case in point, one of the new entrants to NFL ownership happens to be hip-hop mogul Jay Z, and he got there by not being shy, nor by taking any company public. Well, yet.
Related: Understanding Cultural Entrepreneurship
The middle class has a resume. Entrepreneurs have a brand.
Media in general has been a tremendous wealth creator for most. Think about it: Owning your media is perhaps one of the easiest levers of socioeconomic mobility readily available to the poor and middle class. That’s very different than it was in the ’60s and ’70s. Back then, if you had a Ph.D. or an MD, that amounted to a much higher social status and that mobility was all but certain. You were a professional, and that meant there was a market for your specialized skillset.
Which begs the question: Does this new entrepreneur class have a different set of values from the middle class that is left working in cubicle still working for a salary? Certainly. Because the entrepreneur has a brand, which is a function of their value system. Their brand is their promise, and that is what drives the foundation for influencers today.
White-collar workers, on the other hand, don’t have a brand. They have a resume with limited skills that they’ve been pigeonholed into.
Influencers today have a higher status amongst their middle-class brothers and sisters because they control and monetize their media. Like a business. If you have 3.5 million followers on Instagram, then you’re monetizing that at any and every available moment you can. The skills are in the salesmanship, marketing and branding. If you find a way to engage with people in a way that makes them want to pay you, that is a fundamental human transaction.
To these emerging and established entrepreneurs, the only math that matters is when it shows up in their bank account.
Using Web 3.0 as a proxy, it is easier to sell just about anything today than ever before. Decentralization finance and other innovative structures are only going to make this even easier. Kids today will not be compelled to work in an office environment unless compelled by their parents’ aspirational ego, because those kids will look at white-collar middle management jobs in corporate America the same way we look at coal miners back in the 1920s: frightened, muted but much more indebted.
They say that there’s never a right time to start anything. While that’s true, today it’s never been easier to create your own leverageable brand or business.
Related: 4 Entrepreneurship Lessons You Won’t Learn In a Classroom
Opinions expressed by Entrepreneur contributors are their own.
Ask any founder about their top three business priorities, and I guarantee one of them will be hiring the right people. And yet, despite the importance we give it (and money we spend on it — an average of $4,129 per job in the United States), it seems that we still struggle to get recruiting right, evidenced by high turnover rates and general frustration on both sides of the process.
On top of that, recent research shows that hiring is particularly critical for startups and smaller companies — but they’re the ones that are vulnerable to hiring challenges, especially during economic downturns. High-quality candidates tend to prefer the security of larger, more established firms and are even willing to make compromises for the perceived safety. As the researchers observed, “people were broadening other search criteria to include lower-paid roles, part-time jobs, and jobs in different locations and industries.”
If you’re just starting out or looking to scale, entrepreneurs cannot afford to give short shrift to their hiring process. Here, a few expert-backed strategies for hiring top-quality talent for your company.
Related: 8 Bulletproof Ways of Turning a Startup Into a Thriving Business
1. Hire as you grow
As CEO of my company Jotform for nearly 16 years and counting, one of the most common questions I get from early-stage founders is: When do I make my first hire?
The answer: when you’re on the verge of scaling your company — even if it doesn’t necessarily feel like the right time to hire. Here’s why.
For early-stage founders, it’s tempting to want to handle everything yourself. But when you’re ready to grow, it’s critical to bring on new people, and in particular, a product team. As Deepika Yerragunta, head of platform products at PepsiCo, writes, at that point, “your company needs you. It’s not you and your co-founder and a handful of customers anymore. There are things that need to be taken care of — sales, marketing, customer support, employee issues — payroll, finances etc, fundraising to be taken care of.” Hiring good people will free you up to focus on the things you need to take your company to the next level.
And another maxim that has worked for me: Hire only when you have a full year’s salary for the new hire in the bank. That will keep your burn rate low and ensure your company has the bandwidth to take on a new hire for the long term.
2. Ditch traditional interviews
Though I’ve had my own company for over a decade and a half, I still remember interviewing for other people’s companies as if it were yesterday: the sweaty palms; the tense environment; the feeling like I failed to communicate just how much I had to offer. Studies consistently show that those (stressful) traditional interviews don’t effectively predict a candidate’s success in the role.
That’s why I love the idea of ditching traditional interviews, for the most part, and finding creative ways to get to really know job candidates. For example, serial entrepreneur and investor Dinesh Moorjani reports inviting candidates to participate in 48-hour hack-a-thons with his team. “The events provided a way to observe and assess candidates’ ability to work with others in the frenzied environment they would normally encounter as part of a Hatch team,” explains the Rock Center Startup Guide.
Or, you might invite a candidate to a more informal social event with members of their prospective team. The key is getting to know candidates and what they bring to the table. As Nick Weaver, CEO and co-founder of home networking company Eero, told Time magazine, “I think in the recruitment process, a lot of people are pretty transactional. And if you really take the time to get to know people, you have a materially different outcome.”
Investing the time to really connect with job candidates will pay off later.
Related: 8 Practical Tips for Successfully Launching Your Startup
3. Don’t overlook “imperfect” candidates
Working in a startup requires a certain level of flexibility that isn’t valued as much in larger, more traditional companies. For that reason, a seemingly “perfect” hire — the candidate with a resume that checks all of the boxes — might not be a fit for your organization.
Consider the example of Quincy Apparel. The founders lacked apparel industry experience, so they hired a few veterans, assuming they could successfully take on multiple roles. The outcome was the opposite. Harvard Business Review explains that, “accustomed to the high levels of specialization in mature apparel companies, Quincy’s employees weren’t flexible about tackling tasks outside their areas of expertise.” This was one of the factors in its eventual downfall.
On the other hand, a candidate who seems imperfect on paper might have the traits your company needs to thrive, such as flexibility, resilience, ambition and stamina.
Related: Why Everyone Should Work for a Startup at Least Once
4. Always be on the lookout
Some entrepreneurs make the mistake of only focusing on meeting new candidates when a new position opens up in their organization. But experts say you should be on the lookout for potential hires at all times.
Nowadays, top talent tends to be sought out by companies, rather than vice versa. According to Lara Hodgson, co-founder, president and CEO at Now Corp, a B2B payments company, “Almost everyone we’ve hired, we went out and found them. They didn’t find us.”
Connecting with those candidates, many of whom are not active job seekers, requires a relentless commitment to meeting potential hires, and adding them to your mental rolodex for openings down the road. So be on the lookout wherever you are: networking events, lectures and even at the local coffee shop.
5. Track the outcomes
You might be surprised to discover that most companies fail to track the outcomes of their hires — only about a third of U.S. companies report monitoring whether their hiring practices lead to good employees. As Peter Capelli writes for Harvard Business Review, “Imagine if the CEO asked how an advertising campaign had gone, and the response was ‘We have a good idea how long it took to roll out and what it cost, but we haven’t looked to see whether we’re selling more.’” Almost unthinkable.
It’s no wonder the process is so frustrating for employers and jobseekers alike if we fail to check what’s working and how we might do it better. To improve your hiring system, keep track of the outcomes of your new hires. Measure things like: where your candidates came from (applications through job boards, recruiters, internal hires, etc.); how long employees stay; and employee performance.
That way you’ll have a clearer picture of which sources tend to produce the best new hires.
Final thoughts
Hiring might be challenging, but it’s not a mystery. Implementing a few solid practices, such as tracking results, mixing up the interview process and having an eye out for potential hires at all times, will ensure that your company is recruiting the best possible talent for your growing team.
Related: Want to Build a Great Business? Find the Right People.
Opinions expressed by Entrepreneur contributors are their own.
Startup businesses are essential to the economy. They are job creators, innovators and filled with creators who bring new ideas to market. If you are leading a startup company, you know that it’s not easy and there are so many hats you need to wear as a business owner.
One of the most critical and often overlooked areas in business that you must pay attention to is business management. But don’t overlook it because good business management skills will keep your business growing and thriving for years to come.
Good business management can be complex for startup companies for various reasons. Primarily, because business owners started their businesses to tap into the skill they have to offer the world. They put their offer out into the world and earn a living from what they do best, whether selling a product or service. Chances are you did not take a business class or enough of them to manage a business effectively.
And that’s okay. You can’t be an expert at everything in business.
However, every company needs good business management. It can feel inaccessible to get help for SMBs, either due to being outpriced for services or not knowing where to turn. Many business coaches are qualified to help, but you need to know what you need help with to meet your business needs.
Related: 8 Financial Tips for Entrepreneurs Launching a Startup
The top business management tips that can help your business:
1. Create your vision and goals for your business
Business management is most effective and efficient when you have a vision and plan that give you direction and goals to work towards. Plan out how much revenue you want to earn throughout the year. Also, plan out the business expenses and your expected profit margins.
2. Manage your business finances
Effective business management includes the cost-effective control of your finances. As the CEO of your business, you do not need to get stuck in the weeds of financial activity. Still, you need a high-level understanding of your business finances to make profitable decisions for your business. The purpose of business is to create profit, and the higher the profit margins, the more profit you will have.
Related: How Entrepreneurs Can Manage Their Business Finances With …
3. Set up automation in your business
Automations are excellent time savers and can be cost-effective. With today’s technology and a plethora of time-saving products, you need to take advantage of the technology and set yourself up for success.
4. Listen to your customers
Your customers are the drivers of your business, so pay attention when offering you feedback. Respond to their changing needs and make improvements that they suggest to deliver an excellent customer experience. Happy customers spread the word and bring in new business.
5. Listen to your team
Visionary CEOs hire intelligent people. You do a disservice to the business when you are not listening and implementing your team’s feedback and suggestions. Don’t surround yourself with yes people; surround yourself with people who have new ideas that are not afraid to express them. New and innovative thinking helps the business grow.
6. Build good relationships
People don’t like working with jerks, regardless of how intelligent or successful they are. Business is enjoyable, especially when we keep the human element as part of the business. You can have the most intelligent person on your team, but if they kill your team’s morale, the company will suffer.
7. Above all, be resilient
Resiliency is critical in business, as market demand changes rapidly and what worked today may no longer work tomorrow. It would be best to flow with the changes and alter your plan accordingly to survive.
The bottom line is that there are so many areas in your business that need attention to flow together successfully. Yes, generating revenue is a vital component of business. But, don’t forget about the backend office activities that require attention. Every action in your business affects the bottom line, whether it’s directly or indirectly. Be sure you have tightened up your backend services to ensure you are meeting the highest profit potential in your business.
Related: Starting a Small Business? Welcome to Financial Management 101.
Opinions expressed by Entrepreneur contributors are their own.
Entrepreneurship goes hand-in-hand with a lot of things. Determination. Dreaming big. An embrace of failure and risk. And, in my personal experience: insomnia.
I’ve found this is especially true for the creators and side hustlers I know. Night is often when you can get uninterrupted work done, especially if you’ve got a day job. Once you’ve been in the groove for a few hours, it’s very hard to turn off. The endless to-do lists. And the rollercoaster of excitement and dejection that go along with running a business make it especially hard for your brain to shut down. I worked long hours as a securities lawyer early in my career, and loved it. But, I never had trouble leaving things at the office…until I started building my own business.
All of which is to say: while I’m encouraged to see so many people turning to entrepreneurship and the creator economy over the last few years, I also know first-hand that this is a path that can bring sleep challenges. That’s why I’m interested in sharing my own journey here. I may not be an expert. But I am a creator and entrepreneur who has wrestled with insomnia while scaling our company to hundreds of employees and tens of thousands of users. And though I still have the occasional sleepless night, I can say with certainty my sleep is better than it’s ever been. Here’s how I corrected course (…mostly).
From thriving night owl to struggling and sleep-deprived
I think I’ve always naturally been a night owl. I was someone who thrived on the late nights of college — it wouldn’t be unusual to find me at the library, cracking my textbook at 4:00 am. Even as I was developing my first online LSAT course, it wasn’t that tough to pull long hours after my day job to get work done.
But as my entrepreneurial ventures transformed into a full-fledged business, my schedule started to shift. I had stuff I had to get up for in the morning, people who needed me to be present and engaged at 6:00 am meetings and early morning flights to catch. Then my kids came along, and that added another layer of responsibility to my morning schedule. Suffice to say, I knew that all-nighters were no longer an option. But by that point, it was extremely challenging to shift my habits and wiring.
I’d lie awake, watching the clock, growing more and more alarmed. By morning, I’d be exhausted and depleted. It wasn’t just uncomfortable to be under-slept. It was impacting my ability to do my job. Countless studies back this up: when we lack sleep, we’re less equipped to process information, use logic, spot errors…or even drive safely.
Relationships suffer as well. Sleep deprivation makes moderating emotions challenging, and it’s almost impossible to build connections and respond thoughtfully (instead of emotionally). More than once, I had to apologize to the leadership team after a morning where I just wasn’t being myself. It was no way to run a business…or live a life.
Related: Why Entrepreneurs Should Never Feel Guilty for Sleeping
Finally taking sleeping seriously
Over the years, I’ve learned both why sleep matters (Why We Sleep by Matthew Walker is a must-read) and how to conquer those nights when it seems unachievable.
My biggest revelation: acceptance comes first.
Sleepless nights are going to happen, and learning to be okay with that is so much more comfortable than fighting it. In the early days of my company, I’d be stressed about money, about product-market fit and about feedback from our customers. My mind would be spinning so much that even if I hopped into bed at 11:00 pm, I’d find myself still wide awake at 2:00 am.
But eventually, I realized that stressing about drifting off was never going to help me get in the zone. So I started just accepting that it would be a low-sleep night. Hopping out of bed for a walk (yes, even at 3:00 am) or reading a book, and trying again in a few hours. (I tried watching a movie sometimes as well, but that generally made it worse.)
Once I found acceptance, I was able to finally begin taking more active steps to address the root causes of the issue. While books and research helped (I’d also recommend Boundless by Ben Greenfield, or Dave Asprey’s Super Human), I truly have my kids to thank here. Routine plays a powerful role in getting a good night’s sleep — and having kids forced me to abandon my hectic nighttime schedule and institute a regular routine. Over the months and years, the nightly ritual of bath-pajamas-story has helped set my own internal clock to wind down. I even have an alarm that goes off a couple of hours before bed, to remind me to start getting in the zone.
That’s expanded to other critical interventions (though I’m of course not saying this will work for everyone). I’ve got an 8:00 pm cut-off for eating; I avoid caffeine after noon; I’ve cut out alcoholic drinks in the evenings. In the bedroom, I’ve blocked out even the tiniest sources of light to make sure it’s as dark as can be. None of this is really rocket science, nor is it a panacea — but, collectively, these approaches have made a real difference.
This is only the tip of the iceberg. There’s a whole range of more elaborate biohacks out there for those seeking further interventions. For example, though it sounds a little extreme, I’ve found that cold plunges in the evening help relax my whole system. And, they regulate my core body temperature so I’m in the right physical state for drifting off comfortably.
Related: Getting a Good Night’s Sleep Starts These 4 Morning Habits
The payoff of putting sleep first
I’ll be honest: it’s rare that I have a day that I do everything just right. But most days, I do most of these things. And when I am tossing and turning, I can at least pinpoint what I did — like drinking a double Americano at 3:00 pm. Having that insight and these tools to reach for when I really need to get serious about clocking some shut-eye has paid off big-time.
For instance, when we were going public as a company. I was staring down a months-long stretch of back-to-back 12-hour days packed with meetings and an investor roadshow. Because I was equipped with the right toolkit to optimize sleep, I was able to get the right amount of rest to come to work ready to go.
In the end, I can honestly say that knowing how to get a good night’s sleep has made me a better entrepreneur. And not just in the sense that I’m more creative or productive: it’s also dramatically improved my relationships with my wife, kids, colleagues, partners, team members, users and investors. With a good foundation of sleep, I’m equipped to grapple with the inevitable (and healthy!) conflicts that arise during the day in the most productive way possible. Passionate debate is one of our core values, so to be able to have the cognitive function, patience and empathy to dig into the issues in a results-oriented way is a huge payoff for me.
For creators and entrepreneurs, I’ll offer one final insight. Getting a better night’s sleep also comes down to cultivating a healthier relationship with your business. Learning how to unplug, how to retain perspective and how to sustain some semblance of work-life balance will better equip you to wind down and turn your whirring brain off at night. While easier said than done, it’s this kind of outlook that sustains you over the long haul. All-nighters and furious sprints might work at first. But a business built to last requires the sustained and focused energy that only a good night’s sleep can bring.
Opinions expressed by Entrepreneur contributors are their own.
A recent study of startup postmortems revealed a key reason why so many fail: bad bedfellows — or, essentially, less-than-ideal partners.
Harvard Business School professor Tom Eisenmann explained in his assessment that the success of a business doesn’t ride on the shoulders of its founders alone. It’s not even entirely dependent on that founder’s main mission or idea. Instead, many stakeholders are often accountable for a startup’s demise.
I’ve seen this ring true time and time again in my own experience as an entrepreneur. I couldn’t have started my business without my network of supportive partners. It comes down to the fact that without people, you’ve got nothing. So if you’re not actively focused on building solid, trusting relationships first, then you’re already headed in the wrong direction.
Related: You Got This: Why Running Your Own Business Doesn’t Need to Be So Scary
Of course, developing the right relationships to help your business succeed is no easy task. The people who can help you the most are likely the busiest. Plenty of top performers barely have enough space on their calendar to take a breather between Zoom meetings. They’re protective of their time, and rightly so. If you want their time and attention, you better show them a damn good reason to give it to you.
Even as people are busier than ever, however, there are some upsides to our current working circumstances that make building quality relationships a bit easier. Our new world of primarily virtual connection opens new possibilities. We can connect with anyone anywhere, whereas before we might have put off conversations to have in-person later.
The time to set the groundwork for building solid relationships that will help your business grow into the future is now. These tips helped me along the way:
1. Treat time like currency
The National Bureau of Economic Research reported that the length of the average workday, along with the frequency and number of meetings, has increased since more people started working remotely. The need to be respectful and thoughtful about others’ time is greater than ever, so forget the chitchat when you’re meeting with a mentor or partner. Come prepared with an agenda, have a plan for how to get what you need and be sure to follow up as needed. You want to show the other person that you care about their time and are committed to taking up as little of it as possible to get what you need. You’ll also want to show them it’s not a one-way street by delivering value in return.
Related: 3 Tips for Getting the Most Out of Your Meetings
At real estate operating company North American Properties, managing partner Mark Toro puts a great strategy into practice to keep meetings as direct and efficient as possible. He ends meetings with the question, Who will do what by when? Make sure your agenda answers these questions by highlighting what you need and when, then summarize it at the end to make the next steps clear.
Of course, even with the best time-focused strategies, your first meetings might not always go how you’d hoped. Some will be misses, and some will require you to keep circling back. You’re unlikely to close anything in one deal, after all. Just remember to be thoughtful in your approach and spend every minute wisely.
2. Offer a value exchange
A relationship that really helped me get my business off the ground was with a connection in Hong Kong. Her name is Irene, and she came out of retirement to help me. She helped expand my network by connecting me with a packaging partner, a manufacturing partner and others. And she mentored me along the way.
With Irene and each new partner she connected me with, I thought about how I could offer them value in return. There’s a commerce element of building strong relationships. It’s about keeping the value wheel spinning for everyone who’s connected to your business. That value can come from multiple dimensions. Of course, I paid my packaging and manufacturing partners, but I also recommended them to friends and colleagues and gave them props on social media.
Research people before you meet with them. Check out their social media accounts to uncover some details. What do they like? What schools did they attend? What do they seem to enjoy or value in life? That information can help you figure out how to give value back to them. For example, I learned that Irene loves to make paper designs, so I asked her if I could share some of her work. Small gestures that show you see someone and value their passions can go a long way toward strengthening relationships. And even when the professional nature of the relationship comes to a close, it’s still nice to circle back later on and check in to show them you care.
3. Get clear on your mission and share it
A McKinsey analysis shows that successful partnerships tend to share a mission and general direction alignment. Essentially, people can’t buy into what you’re doing until you make it very clear to them.
Related: How to Write a Killer Mission Statement for Your Company
Present your mission to every potential stakeholder from the get-go. Craft a clear and concise elevator speech that describes the why and the what. Include the immediate goal, the longer-term cause or vision and how you’ll make a difference. When you share that with stakeholders, they can make an informed decision about whether to be in or out. And if they’re in, you know it’s because they believe in your mission and are committed to helping you deliver on it. This can circle back to your value exchange as well. Especially in the entrepreneurial world, people find a lot of value in ideas that invigorate them. When people genuinely care about what you’re doing, conversations can be part of that currency.
Remember that successful entrepreneurial journeys are not solo trips. Find people who believe in your mission and want to join the ride, bring value to the table in exchange for their help and show your appreciation every step of the way.
Opinions expressed by Entrepreneur contributors are their own.
The geographical area of your business can affect operating costs and, ultimately, how much you make. Here are three important factors to consider when establishing a location for your business.
Location
Obviously, it would be best if you were close to the customer. Think about being within walking distance or a short drive away from your target audience. A small town can work within an hour of a large city, but most want access to shopping and entertainment.
Your business also needs to be in a location that is easily accessible. Consider what kind of commute you have to make. You may not be able to afford to operate in the city, but there are still many things you can do to help you be successful.
If you live in the suburbs, you may want to consider a location closer to home. Consider the expenses for gasoline versus public transportation. An electric vehicle will be helpful to cut costs over the long run, but be sure your business has or can obtain charging stations for you and your customers.
You also need a digital place for people to find you online. Give business cards to prospective buyers and promote the website. You need to make sure your customers can find you. People need to know where you are and what you do. The overall look of the physical office is critical, and it isn’t just the location that matters.
Related: Location, Location, Location!
The customer’s problem
I don’t mean this in the sense of “How do we solve their problem?”. I mean this in the sense of “What is the problem they face that needs solving?”
It is possible that your customer doesn’t have a problem, but think they do because they want something that they can’t afford. Your customer is seeking your services because they are trying to solve a problem that you will help them overcome. That is the reason they need to be close to you.
If you do not have any customer problems, it means you have no business to offer them. If you have a product they need but can’t afford, they can always afford other products that your product can complement. The goal of every business is to make money. So your customer needs to tell you what their problem is. They don’t know you until they know what your solution is. If you are unsure, ask them for clarification. But never assume. Ask questions.
Related: How Content Marketing Can Solve Your Customers’ Problems
Business costs in the area
The greater the demand for your product or service, the higher your prices may be.
Three areas will increase your costs: gross sales, revenue, income taxes, employee’s social security and Medicare taxes.
If you are not familiar with these costs, review the Small Business Administration‘s website. Gross sales revenue sales tax is a tax that the State collects on most sales. They usually base it on a percentage of the sale price.
Related: 5 Lessons We’ve Learned From Leading a Hybrid Organization for 8 Years
Opinions expressed by Entrepreneur contributors are their own.
Building a new high-end brand is a nuanced art that luxury brands have achieved over the centuries. Think about the French crystal manufacturer St. Louis, over 250 old, the leather goods Maison Hermes, 180 years old and fashion house Gucci, only 100 years old.
All luxury companies have one thing in common: They have key features that give them the allure and mysticism required to command respect, attention — and pricing power.
But how can you build something iconic given the exclusive position occupied by these companies in the market? How can you achieve higher brand value and pricing power if you are a startup?
Forget conventional wisdom, marketing strategy and management practices
Conforming to standard business practices doesn’t work if you aim at launching a high-end brand. The reason lies in the purchasing mindset of the luxury consumer. Affiliate marketing, deep discounts and other sales tactics don’t convince the affluent.
The value you create and the delivery needs to be tailored to this niche clientele. Analyze how your ideal customers live, work, entertain and vacation to conduct a study similar to how an anthropologist studies a culture.
Your message at a brand level must resonate with their lifestyle. Only this way, the brand connects on a deeper level with the luxury consumer.
Most importantly, you want to offer them a new universe that enables a transformation in their lives. Do not aim at solving problems. Create a dream instead: A new space to discover and experiment.
Related: Why Luxury Brands Are Eyeing Cryptocurrencies
Embrace your weirdness and secure your brand identity
If an iconic brand inspires emotions, then the inspiration behind your business idea might incite wonder if unique to you as a person.
Think about the impact of the combination “weird + wow”. Everyone has quirks and insights unique to themselves. Do not hide these things. They are what makes you interesting and can make a niche in business.
Identify your story, create it and sell it. The story of you as a founder or something that makes it unique. Luxury consumers value authenticity above all.
Related: Costly Mistakes to Avoid When Pricing for a Luxury Design Startup
Get ready to lose sales
Launching a high-end brand and being successful is not everybody’s cup of tea. Creating exclusivity means resisting the urge to discount and respond to rising demands. In other words, what matters the most is what you leave out.
Are you willing to build a gate that only a selected elite can access? Are you ready to say no to some clients requesting a break on the price?
My experience in the luxury industry taught me that some are tempted to be ok with discounts to secure the sale. They do not realize that earning the respect of high-net-worth individuals means to say no to them. A luxury brand has the power to say no to customers.
As a startup, emphasize exclusivity from the beginning: Most luxury consumers want high-end brands precisely because they are not easily accessible. They value the thrill and delight that we associate with luxury purchases.
Consistent delivery on the superior brand promise
Among the challenges high-end startups face is delivering on the brand’s promises consistently. Luxury customers buy the product and everything the brand represents. Superior quality must permeate all aspects of your business: Think about your product experts on the sales floor, the team of brand curators in the marketing office, your suppliers, your collaborations and your partnerships.
Related: The Rise Of Responsible Luxury
Opinions expressed by Entrepreneur contributors are their own.
If you’re starting a business or thinking about starting one, chances are you have thought about how much money you need to get started. You may also realize that you don’t have sufficient capital on your own to get started. So, what do you do?
Fortunately, there are many ways to obtain outside funding to help you get started. Funding options usually involve one of two concepts. One is a loan (i.e., debt), in which the lender makes its money by you paying the loan back with interest over a term or a specific period of time. The other is an investment (i.e., equity), in which the investor is given an agreed-upon percentage of ownership (i.e., number of shares) in the business in exchange for providing the capital. In this instance, the investor is hoping that the business will grow substantially over time so that their shares in the business will appreciate in value, thereby earning a Return on Investment (ROI).
When you write your business plan, you want to keep in mind who your audience is. A loan and an investment are two substantially different things, and the ways that lenders versus investors make money are different enough to require different business plans. To help you plan accordingly to pursue the funding you need, here are the main differences between a bank business plan and an investor business plan.
Related: Are You Ready to Seek Funding? This 10-Point Checklist Will Decide.
Return on investment (ROI)
If you are seeking investor funding, prospective investor(s) will want to see an ROI scenario that shows the current valuation and estimated future valuation of the business. A business determines its current valuation via the investment amount requested and the percentage of ownership given in return for the investment (e.g., a $200,000 investment for 20 percent ownership, through simple math, means 100 percent ownership is worth a valuation of $1,000,000). It is important to note that when seeking an investment, especially for a start-up, the valuation is largely based on perception, and potential investors may or may not agree with your perceived valuation.
While there are certified business valuators you can hire to determine a precise business valuation for you, you can also approximate your business valuation without hiring one. The latter is commonly done by taking your EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) from a specific year in your income statement and multiplying it by a multiplier (the recommended number to use for your multiplier varies by industry) to determine your future valuation in the same year. Although EBITDA times multiplier is the most common method, some industries have different recommendations for calculating future valuation.
If you are seeking a bank loan, then an ROI scenario isn’t necessary for your business plan. This is because the bank makes money by having the loan paid back with interest. The amount owed to the bank is determined by three things: the amount of the loan, the term on the loan and the interest rate on the loan. Since none of these have to do with the performance of the business, the amount owed to the bank would be the same, whether your business generates $10,000 or $10 billion in revenue.
Exit strategy
If you seek investor funding, prospective investor(s) will want to know all the possible scenarios in which they can exit from having a financial interest in the business. One possibility consists of investors selling their shares back to the company at appreciated values at a future point in time. Others include, but are not limited to, the business failing and the investor losing their investment or the business being successful to the point of having an initial public offering (IPO) and having its shares publicly traded on a stock exchange. An investor plan will state each foreseeable possibility to exit.
If you are seeking a bank loan, then an exit strategy isn’t necessary unless you plan to get out of the business before the term on the loan is up (although many lenders would be wary of lending under this circumstance in the first place). An exit strategy isn’t necessary otherwise because the bank only has a vested interest in the business during the term on the loan. Once the term is up and the loan is paid in full, the bank is no longer concerned about the performance of the business because it has earned its compensation in full and has, therefore, exited at that point.
Related: 8 Things to Consider to Find the Right Funding Option for Your Startup
Projections
If you seek a bank loan or other form of debt, the interest expense should be shown in your income statement, while your principal loan repayment would be shown in your cash flow statement. If you are seeking an investment or other equity financing, then the interest expense and principal loan repayment will both be zero.
So, which type of funding should I pursue?
There isn’t a cut-and-dried answer to this. However, banks are more inclined to lend to tried-and-true business models (e.g., restaurants and coffee shops). In contrast, investors are usually more interested in new ideas that can disrupt the business environment in some capacity (e.g., food delivery apps). Another factor to consider is your credit history, as you may have a harder time obtaining a loan if your history is subpar.
Related: 5 Business-Funding ‘Rules’ to Break
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Opinions expressed by Entrepreneur contributors are their own.
I’m an introvert. For me, the lockdown served as a wonderful opportunity to perform my tasks with an intense focus and work on new strategies. Putting business matters aside, I also finally had spare time to catch up on the movies and books on my list.
One book I read during my lovely lockdown was The 40 Rules of Love by Elif Shafak. Released in 2010, the book is now a best seller in Turkey and one of the 100 most influential novels listed by the BBC.
The book narrates the story of Rumi, the great 13th-century Persian poet, and his companion, Shams Tabrizi. There is also a parallel story of a couple in the United States in 2008. The author relates these two stories artistically and recounts the rules of love.
The 40 Rules of Love encompasses love and romantic events, as well as the philosophy of existence, mysticism and social foundations. But as I read, I noticed that lessons reach even beyond love and mysticism, all the way to entrepreneurship. Here are five lessons that apply to entrepreneurship from The 40 Rules of Love.
1. Never give up
“Whatever happens in your life, no matter how troubling things might seem, do not enter the neighborhood of despair. Even when all doors remain closed, God will open up a new path only for you. Be thankful! It is easy to be thankful when all is well. A Sufi is thankful not only for what he has been given but also for all that he has been denied.” — Rule No. 7 of love
“Never give up” is probably the expression that successful entrepreneurs use most. It is ubiquitous in business books and motivational speeches. The real face of entrepreneurship is not as gentle as you might think, and it can grind weak people to dust. This is a game for tough folks only.
As a founder, you will go through difficult times, and it takes a great deal of sacrifice to establish your business in the market. However, even in the darkest times, you can find a gleam of hope to motivate you not to quit. The ability to endure hardships and surmount hurdles is a quality that distinguishes great entrepreneurs from their broken counterparts.
Related: Entrepreneurs – Never Give Up!
2. Make connections
“Loneliness and solitude are two different things. When you are lonely, it is easy to delude yourself into believing that you are on the right path. Solitude is better for us, as it means being alone without feeling lonely. But eventually it is the best to find a person who will be your mirror. Remember only in another person’s heart can you truly see yourself and the presence of God within you.” — Rule No. 6 of love
Success doesn’t occur in a vacuum. All successful entrepreneurs have great connections. Networking is an essential skill in business development and offers you the opportunity to maintain professional relationships with other great people in your area.
Through healthy networking, you can find outstanding people who can provide you with professional guidance in difficult times, as well as help you make rational decisions when everything appears to be hopeless. Receiving meaningful insights, exchanging ideas and increasing your brand’s visibility are some key benefits of business networking.
Related: Improve Your Networking Skills and Pitches
3. Be patient but not passive
“Patience does not mean to passively endure. It means to look at the end of a process. What does patience mean? It means to look at the thorn and see the rose, to look at the night and see the dawn. Impatience means to be shortsighted as to not be able to see the outcome.” — Rule No. 8 of love
As an entrepreneur, you must accept the fact that no success happens overnight. Some billion-dollar brands have waited more than three decades to reach their current growth, and it simply occurs through strategic patience. Entrepreneurship is a long journey and this may frustrate many newcomers. A long-term commitment is key for success.
Of course, patience is important, but that’s not what this is all about. I said strategic patience, which means patience accompanied by active foresight. While you have done your part and are waiting to see the outcome, you need to predict future opportunities proactively to remain well-prepared. Great entrepreneurs have a clear and complete picture of the future.
4. Be flexible in the face of change
“Try not to resist the changes, which come your way. Instead let life live through you. And do not worry that your life is turning upside down. How do you know that the side you are used to is better than the one to come?” — Rule No. 13 of love
The business environment is in flux and further advancements have accelerated the speed of changes. You can’t stick to your initial plans and expect huge growth when your strategies are outdated and can’t keep pace with the current flow of business. During various growth stages, changes are essential and resisting them may hamper business development.
Flexibility allows you to respond to change and be the master of it, not the victim. Making adjustments paves the way to predicting the future actively and prevents stagnation. Just remove what’s unnecessary and add what is needed. As Rumi said, “Life is a balance between holding on and letting go.”
5. Take that first step
“Fret not where the road will take you. Instead concentrate on the first step. That is the hardest part and that is what you are responsible for. Once you take that step, let everything do what it naturally does and the rest will follow. Don’t go with the flow. Be the flow.” — Rule No. 19 of love
When you are starting a new business, everything looks dark and strange before you take the first step. Once you face your fears and begin, the lights come on and the road becomes visible.
Unstable economic conditions have increased people’s fears around starting a new business, but you need to take the plunge, make necessary changes and never ever give up during hardships. As you go along, the fears disappear and your business finds its own flow.
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Opinions expressed by Entrepreneur contributors are their own.
The year 2020 was a washout — and we’d all like to forget it. But despite the chaos and uncertainty, despite the misery, fear and tension, businesses flourished; 2020 may have been a bad year for health and wellbeing, but it was a great year for startups.
The United States saw a 24% increase in new business launches, and that trend has continued well into 2021. Consumer habits are driving those trends as more customers shop online and use retail therapy as a way of escaping lockdown fatigue.
As a result, there has never been a better time to launch a new business. Here are five tips that will help you join this growing trend and start a business of your own.
1. Use your experience or skills
Starting a successful business isn’t about finding a popular trend and then dumping your savings into stock and development.
You need to know what you’re doing. You must have experience in that field. If not, you’ll constantly be outgunned by your competitors.
Look for ways to use your experience, connections or skills.
Related: The Most Important First Step When Starting a Business
Do you write or design for a living? Build a business around those skills. Do you have experience in programming or developing? Create an app, widget or website.
There are two benefits to this.
Firstly, you can do most of the work yourself, so you don’t need to hire contractors and agencies to do it for you.
Secondly, there’s less chance you’ll make an expensive mistake. You know what you’re doing and how the industry works, so your route to success is more direct.
You don’t need creative skills to make this work. Even if you have spent your life as a car salesman, it still makes more sense to do something based on sales or the automotive industry than it does to sell coffee or start a writing agency.
2. Establish a personal brand
A personal brand isn’t essential for the success of your business, but it’ll make things a lot easier.
Sign up for multiple social-media accounts, post videos, write content and put yourself out there. You’re not trying to become the next Kim Kardashian or PewDiePie. It’s all about making connections with influential people and establishing yourself as an expert in your field.
The more you grow your personal brand, the more trusted you will become. It will connect you with investors, potential buyers, collaborators and brand ambassadors. It will also give you a platform through which you can organically market your business.
If you’re not comfortable in front of the camera, just write blogs and get yourself a LinkedIn account. No one expects you to post mirror selfies and frequent vlogs. It’s just about giving yourself a presence.
3. Set clear and achievable goals
Where do you want to be in six months or a year? What about five years and ten years?
What about next week?
Successful business owners are very organized and goal-oriented individuals. They give themselves targets to meet every day, week, month and year. They know exactly what they want to achieve in the future and what they have achieved in the past.
Setting yourself goals will keep you on the right track. It should make you more productive and allow you to focus on the things that really matter.
Related: The Complete, 12-Step Guide to Starting a Business
An aspiring entrepreneur is someone who wants to do everything. You’ll often hear him or her talk about outlandish ideas and schemes, and he or she will typically jump from one to the other, rarely committing to any of them and giving up on the ones that he or she does take on.
A successful entrepreneur is someone who has clear and defined goals. He or she knows where he or she is going and how to get there.
You need that clarity if you want to succeed in business.
4. Build a team you can rely on
It’s not “me against the world” when it comes to business. It doesn’t matter what you’ve seen on Instagram or what a business book claimed — entrepreneurs don’t make it entirely on their own.
You need a strong team to run a successful company, and once you have that team, you should take them with you everywhere you go.
Reliability is the most important trait, as well as the rarest. Look for people who will always be there when you need them, people who will work hard for your success and never let you down.
5. Don’t be afraid to take calculated risks
Successful entrepreneurs don’t gamble. They take calculated risks. They put their savings into projects they believe in, and they believe in them because they’ve done their research and know they will give it their all.
It’s risky to throw money at a business idea that’s completely new to you and one that you won’t work at. In fact, it borders on being reckless.
It’s much less risky to throw money at a project you’re familiar with and will benefit from your experience and tireless work ethic.
Take risks, but don’t be reckless; don’t be stupid, and always work to turn that risk from a gamble into an investment.