On Internet Business

Epitaph for an Entrepreneur

Posted by Michael under Business Growth, Entrepreneur Resources, Leadership

Steve Blank has posted an amazingly honest and powerful statement, perhaps even a testament, on the difficulties he faced being a husband, father and entrepreneur. Like all personal stories, it will resonate with different people in different ways, but what I took from his life story of being a serial startup entrepreneur and a father of two daughters was three things.

The first was confirmation of what I already knew: it’s tough to balance work and family as an entrepreneur.

The second was his take on an epitaph. Thinking about what you want people to say about you when you die is a great way to establish your own priorities. Blank talks about how he found that visualising the kind of epitaph he wanted was one way of putting his work/life balance into a perspective that ensure he made the right decisions in both areas. The step beyond that is to turn your life priorities into your personal mission statement and to work on that with the same dedication and integrity as you do with your business plan.

The third thing I took from his statement is the value of personal support. I’ve found it essential to have peer support, to share learning and to bounce ideas and situations off a selection of people who know what the world of entrepreneurship is like. I get my peer support at the Entrepreneurs Organization and believe it’s invaluable to have an organisation that works with, for and in line with entrepreneurs and recognises their needs and what drives them.

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How to stop wasting time and focus on key priorities

Posted by Michael under Entrepreneur Resources

What is Teamly?

Not just another web-based tool is the answer. There’s a plethora of systems that are meant to help companies with time management. But Teamly aims to do something else: help individuals in companies become more focused and productive, and provide managers with a quick and easy way to see what their team considers their top priorities.

What makes it different from other task list software?

Instead of facilitating the creation of long lists which never get completed, Teamly works to keep individuals focused and effective and to allow managers to ensure their team is focused on what truly matters without micro-management or depending on top-heavy and bureaucratic HR systems.

It encourages employees to identify their top priorities and then share them with their manager and team-mates. Each Teamly user enter a maximum of 5 priorities per time period which can be as long as a month, a week or just a day.

Then the employee is sent emails, timed to allow them to review how well they did in achieving their priorities, and to define their priorities for the next period of time.

Managers are given a web-based ‘dashboard’ allowing single-glance management of their team’s priorities with access to deeper statistics on priorities completed. Individuals also get progress reports that can be printed or viewed online

How much does it cost?

Teamly is free of charge for one user and when charging begins, the site says multi-user accounts will be $8 per user, per month with the first month free – at present though, Teamly is still in beta and no charges are being made.

The Teamly team promise they will give users a month’s notice before they start to charge and that the Teamly charging structure will offer a pay-as-you-go cancel at any time system.

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Why Pre-pack Administrations are bad for business

Posted by Michael under Business Growth, Entrepreneur Resources

A pre-pack administration can sound like the ideal answer for a failing business, but is it really such a great solution for the business, and for the economy?

What is a pre-pack?

A pre-pack administration is a package that allows for the selling the assets of a company immediately after it has entered administration. In many cases, the previous directors or management purchase the assets of the company from the administrator and set up a new company. In a recent example, directors of Kiss Travel which collapsed in August, had bought assets from another travel company, XL Leisure group, which folded back in 2008, and which at least one director of Kiss had also been involved with at board level. The intention is to allow the administrator realise the greatest possible amount for the assets because the asset buying process allows for business continuity and the goodwill inherent in the company is both preserved and transferred. It is often the case that some or all of employees of the company transfer  to the new company, thus preserving jobs.

Why pre-pack should cease

The pre-pack system has rightly attracted criticism because it allows companies to continued without their creditors which gives, at very least, an appearance of failing to meet the minimum standards of business ethics. As a result, SIP 16 was introduced in 2009 to assist Insolvency Practitioners in pre-pack cases. It was designed to make the process more transparent to creditors and to ensure that fair value was obtained for the assets. However, from my personal experience, the opposite has happened because the pre-pack process removes any competitive activity around the assets being sold, because there is no scope for anybody outside the company to compete to buy them.

Pre-packs in retreat

In KBB, the trade magazine for the kitchen, bedroom and bathroom trade Danielle McCormick, a retail solicitor, has a different but equally uncomfortable view of pre-packs. She describes the pre-pack as a diet pill allowing failing companies ‘… to trim down on the unwanted calories in order to fit into next season’s mini, or ‘newco’ (new company)’.

But she points out those left in its wake are now fighting back.

1.  Landlords have won recent cases in which administrators of collapsed retailers were ordered to pay rent quarterly in advance, rather than paying rent weekly – clearly the latter gave them a massive advantage on potential outlay and cash flow. 

2. Banks are starting to reject pre-pack processes too – and because a pre-pack requires the agreement of the company’s main banker, this tougher line can stop pre-packs in their tracks.

3. Finally, HM Revenue and Customs appear to be intervening, they have apparently begun to ask for a winding up petition in some cases, rather than becoming an unpaid creditor following a pre-pack.

Pre-packs can be serial disasters

MPs have expressed concerns that it inadequately run businesses can avoid not only paying their debts, but the tax burden that should support the economy’s growth. For competitors it’s an even worse scenario – badly-run, failing, debt-laden and uncompetitive businesses are able to suddenly ditch their debts and return with a huge competitive advantage against competitors. This serial failure behaviour then adds to the pressure on financially sound and well-run businesses who are forced to compete against a pre-pack phoenix in a recession economy. The pre-pack process also prevents failing businesses being acquired by better-run and well-managed competitors

It is not right and the process needs to change.

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The EB5 visa program for entrepreneurs

Posted by Michael under Entrepreneur Resources, Leadership

EB5 is a visa program that offers permanent residency in the US for foreign entrepreneurs and investors. Under this scheme, entrepreneurs who create a new commercial enterprise or invest in a ‘troubled’ business in the US are entitled to US residency and eventual citizenship.

The purpose of the program

This visa preference category allows immigrants to enter the United States in order to invest in a new commercial enterprise that will benefit the US economy and create at least 10 full-time jobs or to invest in a troubled enterprise. Essentially it’s a preference system to boost the current economy or drive new growth.

EB5 Criteria

To qualify for the new business entrance you must:

1. Invest or be in the process of investing at least $1,000,000 or $500,000 in a designated target areas.
2. Benefit the U.S. economy by providing goods or services to U.S. markets.
3. Create full-time employment for at least 10 U.S. workers.  This includes U.S. citizens, Green Card holders (lawful permanent residents) and other individuals lawfully authorized to work in the U.S, but not you, your spouse, or children.
4. Be involved in the day-to-day management of the new business or directly manage it through formulating business policy.

Troubled business investment criteria are that you must:

1. Invest in a business that has existed for at least two years.
2. Invest in a business that has incurred a net loss, based on generally accepted accounting principles, for the 12 to 24 month period before you filed the Form I-526 Immigrant Petition by an Alien Entrepreneur and that loss must be equal to 20% of the business’s net worth before the loss.
3. Maintain the number of jobs at no less than the pre-investment level for a period of at least two years.
4. Be involved in the day-to-day management of the troubled business or directly manage it through formulating business policy. 
5. The same investment requirements of the new commercial enterprise investment apply to a troubled business investment ($1,000,000 or $500,000 in a targeted employment area).

What are the drawbacks?

1. The EB-5 visa program is currently due to end in 2012 and average time from application to approval is six to nine months so it’s necessary to allow enough time for your application.
2. You may find the administrative load heavy – a vast amount of paperwork is needed to maintain your green card status.
3. Many people have found they need to hire a legal specialist to complete their application and this can add substantially to the cost of the programme.
4. Unlike Europe where tax payments depends on the country where you reside, the USA charges income tax on all US citizens and permanent residents based on worldwide income irrespective of where they live.

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Startup Support in Profile: Microsoft BizSpark

Posted by Michael under Business Growth, Entrepreneur Resources, Leadership

This global programme aims to let startups in the software based industries really boost their development efforts by providing three key benefits, for free!

What You Get

1. Software – startups who enrol in the programme are given free access to Microsoft’s development tools and platform technologies
2. Support – meaning that network partners around the planet are on call to offer advice, networking and development synergies
3. Visibility – a worldwide audience of potential investors, clients and partners are linked to the startups through Microsoft’s virtual networks.

There are other benefits too, such as technical training and access to Azure, Microsoft’s own cloud platform for problem-solving.

Are You Eligible?

To fit into the programme you have to:

• Be in the software development business
• Have existed as a commercial entity for fewer than 3 year
• Be generating annual revenue under USD 1 million. (and see the note below for regional variations and fine print details)

How To Join Up

You can sign up BizSpark through a valid BizSpark Network Partner or a Microsoft BizSpark Champ – either of which can provide you with a BizSpark enrolment code. The entry into the programme is free, but you will pay a USD $100  fee when you leave after three years.

What’s In It For Microsoft?

Well, they get in on the ground floor of a lot of innovative software based development, they hope that startups will go on to license themselves through Microsoft, and they benefit from offering peer-to-peer exchanges to the next generation of commercial enterprises which could lead to useful synergies and cooperative ventures for them.

Small print

Microsoft say that:

[a] Startups cannot be in the business of providing services to others such as hosting, web agency, system integration or outsourced development.
[b] Startups who are actively engaged in software development but have not yet completed the formalities of establishing a business are also eligible for entry into BizSpark.
[c] There are local variances calibrated to economic conditions in the startup’s place of business, below. If a Startups’ place of business is not listed below, then the revenue limit is USD $1 million.
USD $750,000 China
USD $500,000 Greece, Korea, Malaysia, Poland, Russia, Spain, Ukraine
USD $250,000   Egypt, Pakistan, Thailand, Turkey, Vietnam 

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What are the top industries to start a business in?

Posted by Michael under Entrepreneur Resources

The world is changing fast, and new industries emerge as old ones disappear and some go around and around. One of Victorian England’s growth industry was mica, used to make the transparent doors in stoves and fires at that period. After a long decline the mica industry has been resurgent since the plastics industry discovered that ground mica was a lightweight insulator that could suppress sound and vibration and improve the strength of plastic car components.

So what industries are the best to launch a new business today?

• Go green – environmental consulting is expected to grow at 9% a year for at least the next five years, and it’s going to expand into every area of life, from governmental contracts through to individual household assessments and support.
• Be a Babel fish – while Douglas Adams may have coined the creature in Hitchhiker’s Guide to the Galaxy, translation and interpretation are amongst the world’s biggest service industries today with a market growth of nearly 20% last year. It’s an industry fuelled by peace time commerce (think India and China) and wartime negotiations (think Afghanistan and Iraq) and has applications everywhere from serving as an interpreter in a GPs surgery to providing simultaneous translation at War Crimes Tribunals and mobile on demand translation is becoming a very big business indeed.
• Apps mean Opps – For real entry level success, being in on the mobile apps market as a programmer, developer or designer requires no more than skills and a little bit of luck. Allied to this is the indie market for niche computer games: those designed for specialist audiences that won’t sell to the mass market.
• Juicy, smoothie, fizzy, hot – Tea is a growth industry with the explosion in recent years from the teabag market into green and white teas, herbal teas, health teas, detox systems, and other drinks with large potential markets to tap, such as healthy juices and vitamin-enhanced waters.
• Hobby habits – it might be the recession causing nostalgia, or just because people are spending less on complex technological hobbies and more on classic pastimes, but the toy and game industry – excluding computer games – is undergoing a minor surge. It’s a good gamble anyway, because the next inventor who comes up with the equivalent of the Rubik’s Cube or Heelies will soon be a multi-millionaire.
• Intellect building – coaching for kids, mentoring adults and training for teens – tutoring, especially in languages like Russian, Chinese etc is a big growth area at present, as parents hothouse their children and adult learners seek to retrain for fast moving industries.

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Angels Den

Posted by Michael under Business Growth, Entrepreneur Resources

The popularity of TV programmes like Dragons’ Den has led to renewed interest in the role of investors in new business – but the co-founder of Angels Den, Bill Morrow, says that his organisation, which connects fledgling businesses seeking funding with high net worth individuals looking for investment opportunities, hasn’t always benefited from linkage with the TV show because some entrepreneurs fear being ridiculed and humiliated by their potential ‘angels’ but – he claims, nothing could be further from the truth.

How does it work?

Business angels are people with some money to spare and a naturally adventurous nature. From his own experience when seeking Angel funding, Morrow saw that the traditional process of engaging with business angels was overly complicated and too costly.

His online business, Angels’ Den, allows his team to react fast to customer feedback which makes them flexible and innovative. This means that the more than 2,500 Angel Investors and 10,000 entrepreneurs who are registered with Angels’ Den are given a more reflexive service in which both advice and funding can be swiftly exchanged.

Before joining up, SMEs and entrepreneurs are invited to attend a free Business Funding Clinic to work through their proposal and ask questions about the nature of business funding. Then, when businesses become members, they are ‘led by the hand’ through the process of putting together a proposal to Angels. Around a fifth of those registering as business have already found an Angel – which Morrow says is ten times the national average. The services offered range from advice clinics to Speed Funding and private meetings organised by regional managers.

What does it cost?

There’s a £799 (plus VAT) registration fee and then, once you achieve funding from and Angel a 5% success fee.

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Big start-ups with small funding

Posted by Michael under Business Growth, Entrepreneur Resources

Y Combinator is venture capital with a difference. Founded by Paul Graham in 2005 it offers seed funding, advice and networking opportunities, largely to technology based start-ups in the USA.

Named after a theoretical functional programming concept, it believes that creation of businesses in the internet-based world is based less on money and more on networking and peer review to drive creativity and functionality.

It has funded nearly 120 start-ups, at an accelerating rate, from eight in 2005 to 26 in 2009. So successful is it that similar start-up/venture capital incubators have now been launched across America and in London too.

How Y Combinator works

People travel from across the USA to spend time at the three month program where they receive a tiny amount of funding and rub shoulders with a whole batch of other similarly funded entrepreneurs.

Y Combinator runs its programs out of Silicon Valley, providing heaven-sent opportunities for tech start-ups to rub shoulders with Silicon Millionairs.

Because it’s based in the USA, the start-ups have to be USA based, but that wouldn’t stop other nationalities taking part: as long as you can get a residence permit and live in the somewhat Spartan conditions the program offers, you just have to convince Graham, in ten minutes, that you deserve a place and you’re in.

What makes it different?

The Y Combinator program gives successful entrants some money, some space to work and crash (and rather bad food, by all accounts) and they then work night and day to get their product ready in three months. After Demo Day, when investors respond to each team’s three month residency output, Y Combinator takes around 6% in common stock of the companies that obtain funding from the wider venture capital community, although this varies from up to 10% and down to 1.5%

Companies Y Combinator has funded

Reddit; Loopt and Posterous are the household names, but there are a number of other bubbling-under ventures like Justin.tv that are ready to break through as big business any day

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Entrepreneur’s resource: Smarta.com

Posted by Michael under Business Growth, Entrepreneur Resources, Leadership

Smarta.com describes itself as a ‘support platform’ which aims to provide a single location for business owners and entrepreneurs to connect, learn and do business. Founded by Shaa Wasmund, formerly a boxing promoter for Chris Eubank, who went on to work for Dyson and Bebo, it offers a range of services, all for free, that support the work of business leaders and active business people.

What makes Smarta special?

The fact that it was founded and is run by entrepreneurs makes it a smart social networking system for business leaders as well a non-stuffy way to learn, share and network.

What does it do best?

1. Smarta’s list of 100 most exciting businesses of the year is a great resource for what’s hot and what’s not, in the world of entrepreneurship.
2. Learning the way you like to is essential for time-limited business leaders: being able to choose from written bite-sized guides, short videos, wikis and online events allows everybody to find a swift chunk of business wisdom in the form that suits them best.
3. Being able to ask the whole Smarta community for an answer to a business question.

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Entrepreneur Resource: School for Startups

Posted by Michael under Entrepreneur Resources

Suppose you don’t want an MBA – suppose you want practical training in setting up your own business; finding investors; designing, marketing and delivering products and services; upscaling your successful startup and managing a growing business? Well School for Startups might be the answer you’re looking for.

Founded by Doug Richard, who is both a successful entrepreneur and an investor in startups, the school offers business training for entrepreneurs with a blend of face-to-face instruction and online workshops. In addition to the training component, there are business networking events designed to bring together small businesses in supportive, self-sustaining hubs.

The intent is to boost the number of innovative small businesses in the UK by giving them access to proven business advice to help them succeed. In 2008 – its first year of operation – the school worked with more than 1000 entrepreneurs in the making.

Doug Richard was an investor in the first two series of Dragons’ Den, and has a range of non-executive directorships around the world. In 2006, he received an honorary Queen’s Award for Enterprise Promotion.

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