But will it make money
I was watching an episode of Dragons’ Den on CBC the other day when one of the venture capitalists brought up a seemingly obvious point that is oftentimes overlooked by entrepreneurs.
For those of you who are not as familiar with the show, Dragons’ Den allows entrepreneurs and small business owners to pitch their ideas to a number of investors. The hope is that the venture capitalists will be willing to invest in their companies for a percentage share of the company’s ownership. We see everything from iPod sleeves to barbecue sauces on this show.
In the episode that I saw, one of the entrepreneurs presented her idea for a dog fancier’s trade show and carnival. She said that she had already successfully hosted a number of these shows and that she was ready to take it to the next level. As it stood, the show had free admission, was small scale, and under-charged the advertising vendors like Purina and Iams.
The budding entrepreneur said that the next step would include larger indoor venues, charged admission rates, and an expansion of the concept with merchandise sales, among other ideas. The venture capitalists questioned the profitability of such a show, saying that while it may be popular with free admission, it is unproven as a money-making business.
It’s easy for entrepreneurs to lose sight of the end goal. They can get caught up in the enthusiasm of the idea without paying enough attention to whether or not the business can make money. Nowhere is this more prevalent than with web-based businesses. Twitter and Facebook are hugely popular, for example, but they’re far from being immensely profitable.
For your business to succeed, it needs more than just popularity; it needs to be economically sound and it needs to financially viable.
About the author: http://michaelkwan.com” target=”_blank”>Michael Kwan is a professional freelance writer based out of Vancouver, Canada. He can be found blogging at http://btr.michaelkwan.com” target=”_blank”>Beyond the Rhetoric.
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The importance of mentoring in a coworking space
While many people may think that coworking is merely working on your own projects while sitting around other entrepreneurs and sharing a workspace, there are many additional benefits to coworking. In previous posts I have mused about the importance of sharing library resources, and even having a coffee break and hanging out with other entrepreneurs at the office.
Depending on the type of coworking space you have, you may or may not have mentorship activities built within. In the case of The Network Hub, entrepreneurs not only have a shared space and the resources to build their business (wireless, physical mailbox, etc.) They can also benefit from mentorship activities.
My own experience as a coworker at The Network Hub has been strongly enhanced by the fact that I have regular meetings with Minna Van, one of the co-owners of this coworking space. We meet about once a week, and we talk about our business. We discuss how things are going, in terms of how we use the time, particular challenges, and all the while, respecting the privacy and anonymity of our clients.
Having these mentoring meetings is definitely one of the best benefits of a launch pad like The Network Hub. While not every coworking space is modeled this way, even if the formal element of mentorship is not incorporated, it’s always good to have at least informal gatherings of entrepreneurs where they can share concerns, ideas, thoughts and challenges. It’s good to have a support group!
Dr. Raul Pacheco-Vega is a Vancouver-based researcher, educator and consultant in the environmental public policy field. He conducts research in water governance, urban sustainability, comparative environmental policy and economic geography. Dr. Pacheco-Vega’s consulting studio has a home at The Network Hub.
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Shared caffeine? Coworking and community building around coffee breaks
Caffeine is a great resource for anybody who needs to wake up in the morning and do work. Personally, I like my coffee strong, black, without cream nor sugar. And more importantly, I like having my coffee surrounded by people. I find that great ideas start to float in my head whenever I am having a coffee break.
But I always wondered if this could be a central element around which coworkers could grow community. A few weeks ago, I asked the members of the Coworking Google Groups whether they thought that having a shared coffee maker would help build community around a coffee break. I got a few responses back, everyone agreeing that it was a good idea.
The thing that really struck me was this thought from Alex Hillman, the co-founder of Indy Hall and widely respected as one of the early builders of the coworking movement. Alex replied to my email saying, amongst other things:
I wouldn’t dismiss the coffee pot (or a water cool) as a social/community building tool so quickly. Having community “places” within the office, no matter how small, provide a reason for someone to get up from their desk and bump into/converse with someone.
For a few months now, at The Network Hub, we’ve begun to share our coffee breaks as we now have a brand new, sleek and stylish coffee maker (espresso/drip) at the office. I named it “Monique” in honor of a dear friend of mine and a fellow entrepreneur, Monique Trottier. Monique Trottier is a wonderful, brilliant entrepreneur, who also has a fantastic sense of style. Since Monique (the coffee maker) is also sleek and beautiful, I thought the name was appropriate. And yes, I think that sharing coffee breaks has in a way helped continue growing the relationship between the community of entrepreneurs at The Network Hub.
Dr. Raul Pacheco-Vega is a Vancouver-based researcher, educator and consultant in the environmental public policy field. He conducts research in water governance, urban sustainability, comparative environmental policy and economic geography. Dr. Pacheco-Vega’s consulting studio has a home at The Network Hub.
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Before you launch; things to consider before opening a business
For years I’ve worked with entrepreneurs as they go from bright idea to start-up business. Some people agonize over whether or not to launch. Others become reluctant entrepreneurs by inheriting a business or due to the sudden need for additional income. The decision to open a business can be complex both personally and professionally and for this reason the pre-start-up issues occupy a great deal of time in my introductory workshops. Start by asking yourself some questions. First, why are you starting this business? Is this an outgrowth of another career, do you have the “better mouse trap” the world is waiting for, or are you seeking a new stream of income?
Before opening a business there’s a lot of homework to be done. You need to thoroughly research your industry and your competition. After you launch is the wrong time to find out you don’t know who your target market is. Whether or not you plan to seek outside funding, your financial house should be in order as well. Your business plan should include a realistic view of projected cash flow and you need a good understanding of the responsible use of credit.
Do a personal assessment of your skills and talents. How are you going to fill in the gaps in your skill set? Most successful entrepreneurs have team around them to provide the specialized knowledge and abilities outside their core business talent. You will have to budget for and pay for some of these experts to do things like set-up your books or file your taxes. What’s your business model? Some businesses require you maintain an office, while others can be operated totally online. Are you looking at renting a storefront or will virtual office space be smarter? Location and communication methods are dependent upon knowing your market and how and where they shop.
The self-employed are some of the happiest people around. But like any major life decision you need to think carefully before taking the path of entrepreneurship. Consider how running a business will fit into your life and how you will pay bills during the start-up phase.
About the author: “Karen Southall Watts
has been training and coaching entrepreneurs for over a decade. She teaches business courses for Bellingham Technical College.”
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The magic of word-of-mouth marketing
People are funny. No matter how smart or logical we consider ourselves we still prefer to buy products and services from those we feel we know and trust. This is true even if we “know” them by association only. This desire to do business with people we feel a connection to is the foundation of word-of-mouth marketing. A referral or recommendation is a powerful thing. When someone recommends a business to us we assume they have already vetted the business and it passed the test.
Once you understand how important word-of-mouth marketing can be you must beware of what I call the “angry customer rule”. It turns out that customers who feel cheated or feel they received low quality goods or services are far more eager to talk about their experiences than satisfied customers. Call it human nature, but we just don’t seem to be able to resist sharing our bad business war stories with anyone and everyone who will listen. Getting happy customers to talk up your business is a bit more difficult, and we all know it. This is the reason a recommendation carries so much weight. So what can you do to encourage customers to share their delight in your business?
- Ask your customers to refer people to you—thank them EVERY time they provide you with a lead
- Follow up on leads in a timely manner—don’t make people wait for your call for days and days
- Be responsive to your customers’ comments and concerns—show willingness for constant improvement
- Provide referrals to others freely—word-of-mouth marketing is based on relationships and you need to do your share
Whether you call it generating buzz or turning customers into fans, word-of-mouth marketing is an essential part of your marketing mix. Recommendations are golden.
About the author: “Karen Southall Watts has been training and coaching entrepreneurs for over a decade. She teaches business courses for Bellingham Technical College.”
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