By Pedro Neira

On my way to my third Internet Start-Up here are some of the things I’ve learned so far as an online entrepreneur. I hope they can be useful for your ventures…

1. Invest your time wisely: Do not invest your time in tasks that are NOT DIRECTLY RELATED TO GENERATE SALES or improve your bottom line results. Until you reach break even, nothing else matters. “Strategic” or “Long term Goals” are fine for mature companies in mature markets. Start-Ups must focus almost exclusively in reaching break even and reaffirming their survival. After that you can count to 10… take a deep breath… and start focusing on mid/long term strategy, corporate culture, board room structuring, your ERP, etc. But not before. You’ll be a dead company if you start focusing your energies in things other than financial independence.

2. Bet on People: I know this is the most used cliché in Business Jargon. Everybody says all the time that “people is the most important resource”. Believe me, In a Start-Up this is 10,000 times more important. ONLY if you manage to get the very best people at least for your key positions, you’ll be able to make it. Even if you do hire the best of the best, you still have a very high chance of failure… the thing is that if you don’t, your chance of failure becomes 100%. Don’t believe the old saying that Star-Ups must pay lower than average wages. Do what it takes to attract the people you need. If it’s a higher wage, a higher stock option or a higher variable pay, don’t hesitate, go for it. These people are the only reason that will make your company successful at the end, not the fact that you saved 10% or 15% on salaries.

3. Don’t be afraid to dilute: Percentages mean nothing, what matters is that your stake grows in dollar terms with every new investor. If you had 60% of a $100,000 company and you went to a 10% stake on a $1′000,000 company you did just great: you went from $60,000 worth of stock to $100,000 worth of stock. You made money. Dilution is necessary, otherwise is impossible to bring new people or investors on board. Helps a lot to plan from the beginning how much of your stock you’ll give away and at which price, but usually you’ll need to give up more. Don’t be afraid. Remember that “%’s” don’t buy things… “dollars” do.

4. Make all costs variable: Avoid fix costs as if they were the devil. When you start a new business, especially if it’s a little bit of a breakthrough and you don’t have solid benchmarks to compare with, you don’t know what will work and what won’t. You need to keep everything variable so you can get out of it if it doesn’t work. You try, and after a while when you know by experience (not by what says on the Business Plan) what works and what doesn’t, you can decide on investing on a longer term and make a variable cost fixed. Never at the beginning.

5. Raise serious money AFTER you have a prototype/dummy version: Ideas are worth nothing, companies do. How much would you pay me if I told you I have an Idea for the next Search Engine Application that will change the world? Nothing. How much would you pay me if I had that application already programmed and could show you how it works? A bit more Don’t you think?… You might have brilliant ideas, but is important that you know that Ideas can’t be patented, registered or sold. As hard as it may sound for you, it’s important that in real life, Ideas by themselves are worth nothing until they become something tangible, something you can show, in other words, until they are implemented. Investors know that and either they invest in your idea asking you a much higher premium if you don’t have a prototype or demo version… or they just don’t invest at all. Try to make a demo version with your own resources (use the 3 F’s to raise your initial funds: Friends, Fools and Family) and then go out to raise the serious money.

6. Be ready to flexible: It doesn’t matter how well you make your business plan, how expert the people on board you have, if you’re making an innovative business model YOUR BUSINESS WILL NEVER GO AS PLANNED. Don’t be afraid. Some things will go better than expected and usually more things will go worse than planned, but you have to be flexible enough to adjust quickly. Flexibility is your only advantage against more established companies, with more stable clients and more resources.

7. Be humble: This one goes especially for those High flying executives from technology firms that have been fired or want to leave the corporate world and start their own business. Here’s some important news: Most of your acquired knowledge and competences ARE NOT TRANSFERABLE to the start-up environment. You might have been employee of the year ten times in a row, or had a meteoric corporate career, but most of what you needed to advance in your corporate world career, will be useless when setting up a Start-Up. Don’t think that because of your successful prior experience you’re qualified to set up a business… you’ll be wrong. It’s better to be humble and assume that this role requires you to learn a new set of skills, usually skills that you don’t have.

By Mary Townsend

Business growth requires that you to make some definite decisions about where you want to take your business next. Before you can map a clear and successful route, you also need to know where you are starting from. Take a closer look at everyone that comes in contact with you and your business.

1. Market Concentration
There is always great potential for business growth in existing markets, so start by looking at your existing customers to see where you can increase your sales.  What have their needs been so far?  Are you providing other complementary products or services that they are not yet utilizing? If that’s the case you need to ask yourself a few questions.

Could it be that they are unaware of exactly what solutions you offer? You need to make sure that all your existing customers know the full range of your products or services. Are they receiving those products and services elsewhere? If that’s the case you need to find out why they prefer your competitor. Are they supplying a better/cheaper/later version?

Once you know you can start to think of ways to persuade your existing customers to buy these extras from you instead. Selling existing customers more of what you already provide is the most economical route to business growth there is.

Could your customers benefit by purchasing larger amounts of what they already get from you? Could using your product more frequently give them better success or faster results? Could you offer an incentive for bulk purchases or discover new ways your product could be used?

2. Listen
By listening to your customers, employees and suppliers you can find some great ideas for new products or related services that will grow your company quickly and easily. If customers keep asking if they can put a down payment on a particular item, maybe a payment plan is a service you should be offering.

Are you supplying DIY items like flat pack furniture? An employee may mention that a lot of people are asking if someone is available to build it for them. If you are already getting inquiries, it means there is a demand and potential to grow your business in that area.

A supplier mentions he’s been selling a lot more oriental sauces this year. Should you expand your range of oriental food products; include a range of woks, oriental serving dishes, utensils and recipe books or, if you own a restaurant, should you add an oriental dish to your menu?

3. Revitalize
Potential for growth may be right under your nose. Take an old product line and give some thought to presenting it in a new way. Perhaps you could package it differently to stimulate new interest in the product.

Do you have another complementary item that you could couple it with to start getting it noticed again?  Emphasize a new angle to it. Does it fit with a current trend or topic? Is it safer, healthier or a more eco friendly model than newer items on the market?

4. Add value
You can increase customers’ perception of value with optional extras. Just make sure they are complementary to the existing product or service, or at least relevant to the same type of customer.

Could you grow your business and serve your customers better by offering different types of services or product ranges? Think about Platinum, Gold, Silver or Deluxe, Standard and Economy. Would the seasons or other time considerations add that little extra, like a Christmas or Limited Edition?

Do you have products that can be personalized with a name and/or a special message, or made special in some other way with the customers own photo or artwork? If you find there’s a market for it, what investment would it take to grow your business in that direction?

5. Complement
Think about providing items or services that would really complement your core business. If you own a bookstore, you might also sell writing material and designer pens.

You have a natural health outlet selling mainly vitamins. Could you locate a lovely natural hair product range and sell it alongside your women’s hair loss treatment tablets? Package some appropriate products together into a luxury gift pack.

6. Cross Sell
Offer more services to your customers. These could be supplied by you under license from others. Or you could refer your customers to a complementary service for a commission. The latter is a great way to grow your business without having to incur extra expense.

Do make sure any other service you are recommending meets your standards and doesn’t offer anything else that your customers are currently getting from you.

7. New Markets
Research to find other markets that could use your product or service in a slightly different way. Perhaps you are supplying a component to motor manufacturers that would be equally as useful in the aircraft industry.

Have you developed a process or a piece of software for use in your business that you could sell or license to others that are not in direct competition to you?