So I am in the process of weaning myself off of TV, ok, not all tv, but a bulk of it. I still need my Parenthood
and The Office
of course, but after that, it’s time to pick up a book. To that end, I picked up The Art of the Start by Guy Kawasaki – an Apple veteran and leader in the blog-o-sphere of entrepreneurial writing. To this point, I am not what you would call a book worm, so take my advice with a few grains of salt. But I really liked the style Kawasaki used to go through the start up process. Much of it is written for tech-based start ups – Silicon Valley style – but quite a bit of it can be translated to anything.
A few nuggets I really enjoyed:
- Build a Board - I think many entrepreneurs have some folks to bounce ideas off of – many of them end up being friends and family. And that is cool if your last name is Gates or Buffet or something, but if it’s not, you might want to think about having some sort of formal/informal Board for your start up. If you are thinking a Board is only for a big corporation or a fast-growing tech firm, then you are way wrong. A Board is set up to provide guidance, advice, and mentoring, and if you think only the big and the fast-growing need those things, then you’ll never get there yourself. A Board can be as loose or as formal as you want, but it is an indispensible part of growing a business.
- Manage your business for Cash Flow, don’t focus on Profitability – Again, this one gets overlooked because everyone is focused on “being in the black” and “making money”. Those are obviously the end goals of any business, but for a start up, you can’t always measure yourself by them to determine your success. Keep the green flowing through your business and eventually it’ll all start showing up in your wallet.
- Finally, and probably most importantly, so I hope you are still with me – Kawasaki offers up and promotes a simple way to see if your ideas might fly. Keep in mind, this isn’t scientifically proven, but rather intended as a guide to help you decide if your idea has some merit. Its really pro-forma cash flow 101 type stuff, but Kawasaki simplifies that to a more basic level. In 4 steps you can have some pretty powerful answers: 1) Figure out your monthly operating costs – include everything! 2) Figure your GROSS PROFIT per unit of product sold. 3) Divide a by b, so that a/b=X, and X is the number of units you need to sell to cover your costs – or close to it anyway (sorry for the algebra lesson, stay with me). 4) Next up, ask a few people (Guy says to specifically ask women) if they think you can sell your X number of units based on your business plan. If you hear a lot of “no’s”, come up with a new business
If you picked up nothing else, try an exercise similar to #3 before getting to far down the path with any idea. You’ll find more of Kawasaki’s nuggests on his site
, over at Open Forum
, and a few other places too.
Next up for me is a new bio on Warren Buffet – The Snowball
. I’ll let you know what I think of that one at some point. Keep in mind its like 700 pages or something, so it could be a while.
Dan Beenken, Director of UNI Small Business Development Center