8 Questions Business Leaders Should Ask Themselves Every Day

Leadership is not prescriptive and what works for one person may not work for another. There is one trait, however, that many successful business leaders and entrepreneurs share: They are constantly asking themselves questions to stay relevant and perceptive.

Whether you’re running a company, heading up a startup or leading a team, your ability to analyze and critique your workday and approach is critical to success. Keeping tabs on your own development might help  figure out areas for improvement, deepen your understanding of your industry and set a good example to the people you manage.

Asking yourself these questions every day will help you grow as an individual and as a leader:

1. What did I achieve?

At the end of each working day, take a step back and ask what you’ve achieved. Keeping tabs on your accomplishments is a great positivity and productivity booster. Strive to undertake at least one meaningful task each day that will directly help you reach your end goals. If you believe you could have achieved more, harness your disappointment and channel that energy to help you work harder the next day.

2. What mistakes did I make and how can I learn from them?

Not every decision you make will be the right one. And in such instances, holding your hands up and admitting you have made a mistake is the best thing to do. There is a saying, “More people would learn from their mistakes if they weren’t so busy denying that they made them.” And these words of wisdom are important to remember. Everyone makes mistakes. It’s how you respond to them that defines you.

3. Did I help someone else succeed today?

Good leaders focus on the success of those around them as well as their own personal achievements. Make it your mantra to help others succeed or provide them with opportunities each day. It doesn’t always have to be a grand gesture. It could be something as simple such as spending 20 minutes with an employee to discuss his or her performance and progress. Building the strength of those working for you will ultimately enhance your company.

4. What motivated me?

Running a business and leading a team can be difficult and during the tough times, reach for the motivation that keeps you going and encourages you to strive for betterment. Take note of the things that inspire you and draw on them when you need renewed enthusiasm. Good leaders are acutely aware of the things that fuel their personal motivation and use that knowledge to their benefit.

5. Did I work toward my goals?

When you’re at the helm of a ship, it’s wise to keep destination in mind. Likewise when you’re running a business or leading a team, you should have goals to keep everyone focused and moving in the same direction. Outline your business aims and ask yourself every day if you’ve worked toward them. If not, figure out why not and how you’ll change tack to put everything on the right trajectory. Never lose sight of your goals.

6. What stumbling blocks did I come across?

What are your sticking points? Is there a particular division of the business that you struggle with? Are you unable to come up with a workable strategy for a particular function? If so, identify the areas that require improvement or the resources that will go a long way toward overcoming the problem.

Once you understand where your weaknesses lie, create a small team and talk about the areas of concern. Share ideas and work through the issues together in a constructive way. This is great for team building and getting everyone on the same page. It will also get the problem solved so you can move on.

7. What do I need to let go of?

You’re setting yourself up for failure if you take on too much. Business owners and department heads can be guilty of the notion that they need to be directly involved with every decision made at their business. Part of being a leader is being able to recruit effectively.

Build a team around you that you trust to make decisions and get things done. Don’t be removed from your business. Instead allow your employees to shoulder some of the burden. This not only means that progress will happen quicker. But by sharing the responsibility, you”ll build a more collaborative company culture. Ask yourself today, What can I hand over?

8. What legacy do I want to leave behind?

Finally, how do you want to be remembered? Keep this in mind every day and work toward that end goal. Are you happy with the way you conducted yourself today? Remember that character rules.

You’re not born with the qualities that make up your character, but develop them as you go through your experiences, failures and successes. Govern reactions to events to develop the character you’d like to have.

-Courtesy: Entrepreneur.com

5 Things You Can Learn From Other Top Investors

No matter how well your investments may be going, there is always room for improvement. There’s always something that you can learn from other investors in any field–after all, watching your competitors is always the best way to learn. You can avoid masking the same mistakes that they’ve made and even commandeer their successful strategies for your own benefit. These are five things that you can learn from other top investors to help you improve your own portfolio.

Buy and Hold Good Stocks Over Trading Fast

Many investors would rather have their money go through the market and back into their pockets in a rapid-fire manner. While this can be a good way to turn a profit on stocks, you should hold on to stable stocks to limit a risk in your investment portfolio. They’re a good way to keep a hold of some wealth while you experiment with another segment of your wealth.

Keep Up On Your Quarterly Statements

Use these to monitor your fees and back out of areas that are becoming too expensive in order to manage your money better and maximize the returns going into your pocket. Banks and brokerages know that not many people read the statements that are sent to them, so be one of the few that is in the know on information that is publicly available!

Do Not Buy Into Hot Stocks

Just because a stock is doing well one year does not mean that that track record will continue in the future. In fact, a stock peaking radically one year generally means that it will crash in a few years to come–many “hot stocks” of the year can be risky investments in the future that become worthless stocks in good time.

Diversifying Your Portfolio Is Not Hollow Advice

Though you have heard it time and time again, you can always improve your investment standing by diversifying your portfolio. This does not mean just having stocks from different areas of the market, but it means diversifying your sources of wealth (having mutual funds in addition to single stocks, venture capital, et cetera) as well.

Raise Your Exposure to Surprises That Will Increase Your Wealth

Sometimes taking a small portion of your wealth and investing it into a risky area can expose you to stocks that will raise exponentially in value. Though this is not how you should rely on making your money on the market, it definitely has its place in increasing your invested wealth.

When it comes down to it, there are plenty of tips and tricks that you can take from other top investors to increase the value of your own investment practice, but the five tips listed above will lie at the core of other more tailored advice for where your investment portfolio is focused. By adhering to these five tips, you are sure to find success in your investments, no matter what the state of the market is!

 

-Courtesy: Inc.com

4 Secrets to Success Richard Branson Learned From Nelson Mandela

 
 

As Virgin America announced plans for its long-awaited IPO, Sir Richard Branson confided over a late-night beer just how maddening it can be to launch any high-flying business, even with more than 350 other companies under the Virgin brand. Back when the Bay Area-based airline was getting started, Virgin America’s competitors viciously contested the newcomer’s arrival for what seemed like an eternity. Price wars, lawsuits, and regulatory battles all soaked up precious resources.

“The knee-jerk reaction you feel when you’re under attack is to assume a siege mentality,” Branson said. But your fight-or-flight instincts are “a self-indulgent waste of time and money.” Instead, the legendary entrepreneur and his partners focused on reinventing the customer experience for domestic air travel, eventually winning share in the insanely competitive airline industry.

Branson said that rather than ever feel threatened or even sorry for himself, he’s always comforted by four principles that guided his longtime mentor, Nelson Mandela, whose circumstances were obviously far more desperate than any of us will ever experience.

1. Let your mission, not your nightmare, define you.

“Resentment is like drinking poison and then hoping it will kill your enemies,” Mandela once said.  Vengefulness and victimhood would not erase the crimes done to him in the past, nor would they help him build a better future. Mandela could have emerged from decades of jail “still imprisoned by bitterness,” Branson said. “Instead he devoted every ounce of creativity to building a lasting legacy–just as each of us should during our lifetimes. Get over it and build a great business!”

2. Focus on what you’re for (the customer), not what you’re against (the competition).

Rather than getting sucked into a protracted, bitter feud with competitors and the government, it’s much better to let your adversaries waste their energy fighting each other. Virgin America didn’t get distracted by turf battles and name calling, and instead focused on building a community of customers who loved Virgin’s fresh, edgy vibe.

3. Being persistent does not mean being inflexible.

“Do not judge me by my successes,” Mandela admonished. “Judge me by how many times I fell down and got back up again.” When you’re suffering a setback in your startup, imagine how much worse Mandela had it–and just how creative he had to be in a cramped cell every night. From dawn to dusk, he dragged stones in the blinding heat. You can’t steel yourself year after year dreaming that hopeless circumstances will change, he said. You have to change the way you deal with the circumstances. Being flexible in finding a new door every time the last one slams shut is the difference between those who find their way and those who self-destruct. “That’s the kind of grit and creativity you need to be an entrepreneur,” Branson insists.

4. You don’t have to be perfect to make a difference.

I will never forget Mandela’s warm embrace as he almost collapsed in my arms after midnight during his last visit to the World Economic Forum, the invitation-only summit in the Swiss Alps where CEOs, presidents of nations, noble laureates, artists, educators, and billionaires convene every winter. I was executive producer of Schwab.com, and I was writing a book interviewing hundreds of leaders in Davos for my sequel to Built to Last with Stanford professor Jerry Porras. Almost every thought leader I met pointed to Mandela as a role model for leadership. With a smirk, Mandela told me that perfection was never a part of his plan and he “never achieved it.”

In the years before Mandela, an activist lawyer, had been sent to a death camp, he was rarely without zealous overconfidence about his mission to end apartheid. Although Mandela initially advocated a peaceful solution, he eventually took up arms when the path of peace appeared to be a dead-end. In 1964, he was convicted of conspiracy and sabotage and sentenced to life in prison. The fact that he didn’t start out as a complete saint with perfect grace or humility before his long walk to freedom, makes his journey even more useful to the rest of us.

“You have enduring impact not because you are perfect or lucky,” Sir Richard sighed as he finished a beer, “but because you have the courage to stay focused on building a better future rather than dwell in the past.”

-Courtesy: Inc.com

15 Signs You’re an Entrepreneur

15 Signs You're an Entrepreneur

Pressed to describe the stereotypical entrepreneur, which words would you use? Passionate? Dedicated? Optimistic? Sure, those apply. But insecure and troublemaker are more accurate, according to ‘treps who know a success when they see one. Do the following traits, characteristics and quirks describe you? Well then, you might be an entrepreneur (at heart, if not yet in practice).

1. You take action.

Barbara Corcoran, founder of The Corcoran Group, co-star of TV’s Shark Tank and author of Shark Tales: How I Turned $1,000 into a Billion Dollar Business, says people who have a concept but not necessarily a detailed strategy are more likely to have that entrepreneurial je ne sais quoi. “I hate entrepreneurs with beautiful business plans,” she says.

Barbara Corcoran

Barbara Corcoran

Corcoran’s recommendation? “Invent as [you] go,” rather than spending time writing a plan at your desk. In fact, she believes that people with life experience have an active problem-solving ability and think-on-your-feet resourcefulness that can be more valuable than book smarts alone. Those who study business may be prone to overanalyzing situations rather than taking action.

2. You’re insecure.

“Many entrepreneurs judged as ambitious are really insecure underneath,” Corcoran says. When evaluating potential investments, she adds, “I want someone who is scared to death.” Those who are nervous about failing can become hyperfocused and willing to do whatever it takes to succeed. If you feel insecure, use that emotion to drive you to achieve your business goals.

3. You’re crafty.

“One of my favorite TV shows growing up was MacGyver,” confides Tony Hsieh, CEO of Las Vegas-based Zappos, “because he never had exactly the resources he needed but would somehow figure out how to make everything work out.”

Always resourceful: Zappos chief Tony Hsieh.

Always resourceful: Zappos chief Tony Hsieh.

A lifelong entrepreneur, Hsieh has done everything from starting a worm farm to making buttons and selling pizzas, so he admires MacGyver’s “combination of creativity, optimism and street smarts. Ultimately, I think that’s what being an entrepreneur is all about–playing MacGyver, but for business.” It’s not about having enough resources, he explains, but being resourceful with what you do have.

4. You’re obsessed With cash flow.

Before founding Brainshark, a Waltham, Mass.-based developer of technology for business presentations, Joe Gustafson bootstrapped a venture called Relational Courseware. “All I ever thought about was cash flow and liquidity,” he says, admitting, “there were seven times in [the company's] eight-year history when I was days or hours away from payroll and didn’t have enough cash to make it.”

How did he respond? “In the early days, you could step up and put expenses on your personal credit card, but that can only go so far,” he says. “You need cash–even if you have the best company and the best receivables in the world–to fight the battle one more day.” Other strategies he recommends include working with a partner who can provide cash advances on projects and maintaining close communication with suppliers.

5. You get into hot water.

Stephane Bourque, founder and CEO of Vancouver, British Columbia-based Incognito Software, says true entrepreneurial types are more likely to ask for forgiveness than permission, forging ahead to address the opportunities or issues they recognize, even without approval from higher-ups.

“Entrepreneurs are never satisfied with the status quo,” says Bourque, who discovered he was not destined for the corporate world when he kept coming up with new and better ways of doing things–ideas that were not necessarily appreciated by his bosses and often were interpreted as unwanted criticism. Now, he says, “I wish my employees would get into more trouble,” because it shows they are on the lookout for opportunities to improve themselves or company operations.

6. You’re fearless.

Where most avoid risk, entrepreneurs see potential, says Robert Irvine, chef and host of Food Network’s Restaurant: Impossible. True ‘treps are not afraid to leverage their houses and run up their credit card balances in order to amass the funds they need to create a new venture. In some ways, he says, they are the ultimate optimists, because they operate under the belief that their investments of time and money will eventually pay off.

7. You can’t sit still.

Entrepreneurs have unbridled energy that fuels them long past the time when their employees have gone home. They are eager, excited and energized about business in a way that makes them stand out. Irvine would know: He owns a restaurant in South Carolina, is opening another in the Pentagon and has a line of food and clothing products, on top of hosting his TV show.

8. You’re malleable.

“If you have only one acceptable outcome in mind, your chances of making it are slim,” cautions Rosemary Camposano, president and CEO of Silicon Valley chain Halo Blow Dry Bars. If you are willing to listen, your clients will show you which of your products or services provide the most value.

Her original vision for Halo was part blow-dry bar, part gift shop, “to help busy women multitask,” she explains. But she quickly learned that the gift shop was causing confusion about the nature of her business, so she took it out, replaced it with an extra blow-dry chair, and things took off. Smart entrepreneurs constantly evolve, tweaking their business concepts in response to market feedback.

9. You enjoy navel gazing.

Without direct supervisors, entrepreneurs need to be comfortable with the process of evaluating their own performance, says Laura Novak Meyer, owner of Pennsylvania’s Little Nest Portraits. That requires “a willingness to solicit feedback from those around you to self-improve,” she says, as well as paying close attention to feedback you may not have asked for, such as customer complaints or being outpaced by competitors. Little Nest surveys every client to ask for opportunities for improvement, and Meyer has worked closely with a business coach for the past five years to identify personal areas where she needs to improve.

10. You’re motivated by challenges.

When confronted by problems, many employees try to pass the buck or otherwise wash their hands of the situation. Entrepreneurs, on the other hand, rise to the occasion. “Challenges motivate them to work harder,” says Jeff Platt, CEO of the Sky Zone Indoor Trampoline Park franchise. “An entrepreneur doesn’t think anything is insurmountable … He looks adversity in the eye and keeps going.”

Candace Nelson, founder of Sprinkles Cupcakes, agrees. Despite naysayers who questioned her idea for a bakery in the midst of the carb-fearing early-2000s, she persevered and now has locations in eight states. In fact, she was one of the first entrepreneurs in a business that became an ongoing craze, sparking numerous copycats.

11. You consider yourself an outsider.

Entrepreneurs aren’t always accepted, says Vincent Petryk, founder of J.P. Licks, a Boston chain of ice-cream shops. They may be seen as opinionated, quirky and demanding–but that is not necessarily a bad thing. “They are often rejected for being different in some way, and that just makes them work harder,” Petryk says. When his former boss didn’t approve of his off-duty research into ice-cream quality, he went out on his own to develop a made-from-scratch dessert in bold flavors. Rather than copying what most other ice-cream shops were doing, including buying from the same well-known suppliers, Petryk forged his own path. His early competitors? All but one are no longer in business.

12 . You recover quickly.

It’s a popular notion that successful entrepreneurs fail fast and fail often. For Corcoran, the trick is in the speed of recovery: If you fail, resist the urge to mope or feel sorry for yourself. Don’t wallow; move on to the next big thing immediately.

13. You fulfill needs.

Many people recognize marketplace holes, but it is the true entrepreneur who takes them from cocktail napkin to reality, says Jennifer Dawn, partner in New York City-based Savor the Success, a business network for women. “Entrepreneurs think of a way to fix it and take steps to fix it. They are innovators.” So when Savor’s network of women began asking for advice and input from co-founder Angela Jia Kim, she and Dawn created a new product: Savor Circles. These mastermind groups connect four members who give each other tailored input and expertise; even better, they provide Savor the Success with a new revenue stream.

14. You surround yourself with advisors.

Actress Jessica Alba, co-founder and president of Santa Monica, Calif.-based The Honest Company, which sells baby, home and personal-care products, notes that “it’s important to surround yourself with people smarter than you and to listen to ideas that aren’t yours. I’m open to ideas that aren’t mine and people that know what I don’t, because I think success takes communication, collaboration and, sometimes, failure.”

“Success takes communication, collaboration and, sometimes, failure.”
–Jessica Alba, The Honest Company

In other words: True ‘treps don’t hire yes men; they talk to those with experience and conduct thorough research, gathering as much information as they can to make informed decisions rather than taking a shot in the dark.

15. You work and play hard.

“Entrepreneurs fall down and pick themselves up until they get it right,” says Micha Kaufman, who snowboards and sails in addition to runningFiverr, the fast-growth online freelance marketplace he co-founded.

You know the type: Micha Kaufman of Fiverr.

You know the type: Micha Kaufman of Fiverr.

Like in sports, the key to success in business is staying super-focused, the CEO notes. During Fiverr’s launch, instead of trying to deal with “an endless number of potential challenges,” Kaufman and his team focused on “the single biggest challenge every marketplace has: building liquidity.

Without liquidity, there is no marketplace. It’s like worrying about the skills needed for frontside-360 jumps before getting on a snowboard and learning the basics.”

-Courtesy: Entrepreneur.com 

The Unexpected Trait That Moves Leaders From Good to Great

In the popular imagination, successful leaders are not shy flowers. Confidence and bluster–sometimes in excess–are more likely to be associated with executives and other top business leaders.

But, it turns out, what we imagine we want from a leader and what actually makes one effective in real life are often at odds. Now a new study has confirmed what other researchers have been insisting–quieter, less remarked on traits determine the success of those at the top more often than highlyvisible qualities like charm and conviction.

The latest research published in Administrative Science Quarterly looked at the leaders of 63 Chinese companies and their employees and discovered that, when it comes to high functioning teams, the humility of leaders is key.

The Power of Being Humble

In case you need a working definition, the study authors note that “humility is manifested in self-awareness, openness to feedback, appreciation of others, low self-focus, and pursuit of self-transcendence. Humble people willingly seek accurate self-knowledge and accept their imperfections while remaining fully aware of their talents and abilities. They appreciate others’ positive worth, strengths, and contributions and thus have no need for entitlement or dominance over others.”

Accepts feedback? Appreciates others? Focused on service not self? Clear-headed about their limitations? Appealing qualities all, so perhaps it’s no wonder than humility, though undersung, is so powerful. But what exact effect did it have? PsyBlog sums up the researchers’ findings: “CEOs who were humble were more likely to empower the top management team, which in turn enabled the management team to be better integrated. The empowering organisational climate then trickled down through the middle managers which increased their job performance, commitment and engagement with work.”

No Shortage of Evidence

Lest you think this is only true in culturally distinct China, PsyBlog also stresses that earlier studies here in the U.S. uncoveredmuch the same thing. One study of Fortune 1000 executives “found that one important factor which lifted leaders from ‘good to great’ was modesty,” for instance.

This isn’t the first time humility has come up as a leadership essential here on Inc.com either. We’ve featured experts insisting the key to bringing out greatness in your team is to stop acting like a stereotypical leader and focus on letting others shine instead, quoted Harvard professors on leading less and following more, and covered research out of Google showing one of the most essential traits of successful leaders is also one of the most boring–being predictable and getting out of people’s way.

-Courtesy: Inc.com

What You Wish You’d Known About Startups Before Launching Your Business

Sam Altman, president of seed accelerator Y-Combinator, recently asked a very basic question of his Twitter followers: What could someone have taught you in a class about startups that would have made you a better founder? Within half an hour, he’d received over 50 responses from entrepreneurs across the network. Some were concrete (e.g., “Taxes. How do they even work?”), while others were more abstract (e.g., “communication and empathy.”) Here are 10 of the most noteworthy answers, from business owners who learned the hard way: 

1. How to network.

2. What “disruption” really means.

3. How to deal with the ups and downs (mental toughness), OKRs, and fundraising.

4. The importance of having separate legal counsel for each partner vs. legal counsel for the whole company.

5. How to hire and fire employees.

6. Taxes. How do they even work?

7. How fundraising works/Creative funding.

8. How to think about long-term strategy without derailing your focus.

9. Communication and empathy.

10. Get out of the class. Get your hands dirty. Start. 

-Courtesy: Inc.com

To Succeed, Fill These 5 Roles With the Right People

Look around right now. What do you see? The walls of your home office, gray cubicle partitions or a roomful of caffeinated strangers? Now, ask yourself: how is my environment impacting my success?

Where you work, and with whom you surround yourself, counts. When I started my first software company 17 years ago, it was the era of the solo entrepreneur. Getting access to a community of supporters and mentors, finding capital and recruiting talent was as challenging as growing a plant in a tiny pot with no water or sunlight.

Entrepreneurship is now a team sport, with leagues and teams all across the country. You no longer have to be in Silicon Valley or an alumnus of an Ivy League school to gain access to mentors, developers and peers who can influence and propel your business. In fact, some of the most vibrant communities for startups are in Austin, Boulder, Seattle and Fort Collins, Colorado.

To help you tap into the power of proximity, here are five people you should seek to surround yourself with to succeed.

1. Fellow entrepreneurs. When you’re in a strange place – a new industry, a new city or a foreign country – there’s a certain camaraderie that develops when you find someone in the same situation. Finding your fellow entrepreneurs and connecting with them, human-to-human, can provide a wealth of resources. Swap battle stories, dissect each other’s strategies, commiserate, share resources, tools and knowledge. Your businesses may be different but you’ll likely be surprised at the similarities of your experiences.

2. Someone to hold you accountable. When you’re accountable only to yourself, it’s easy to let things slip. Didn’t reach out to your set number of prospective investors this week? Who cares, only the dog knows. Instead, find an accountability partner who is aware of your goals and isn’t afraid to call you out if you miss a deadline.

Set-up a regular check-in (once a week is ideal) with your partner to review what you’ve accomplished, your next immediate goals and how you’re progressing overall in getting your start-up off the ground.

3. Mentors. You’ve probably heard it before, but it’s worth mentioning again – and again: find mentors. Yes, plural, mentors. I recommend finding many. As you grow personally and as your business grows, your needs change. The mentors who can keep advancing you will change, too. To approach mentorship with this model, be specific about your current challenges. Choose someone who will be authentic and have specific experience in the areas you want to improve.

4. Talent. For most tech companies today, the biggest challenge isn’t funding, it’s finding highly skilled engineers. If you’re the CEO, your number one job is to build your team. To do this, create ties into engineering communities to recruit the best developers. Most great hires come from personal connections and networks. You need to be swimming in a deep pool of intellectual capital to recruit the best employees.

5. Potential Partners. I am not just talking about finding your technical co-founder (although proximity is also key to that too). I am talking about creating key industry relationships that fill in gaps in your business. No company today can afford to cultivate all of its needs internally. Identifying and establishing industry relationships must be part of your growth strategy. Being in close proximity to other entrepreneurs can open doors you never expected.

Entrepreneurs are responsible for designing their own roadmap to success but the days of operating in a silo have come to an end. This list is just a start. There are many ways to access the types of people, tools and support needed to reach your goals. Us the power of proximity to reach the next stage of your venture.

-Courtesy: Entrepreneur.com

Myth Buster: We’ve Got the Relationship Between Risk and Entrepreneurship All Wrong

rock-climbing-1940x900_35298

Entrepreneurs are uniquely comfortable with risk. That’s part of what makes them entrepreneurs, and the rest of us… not.

Except that commonly-held belief isn’t actually true, at least according to a new research paper. The  authors, Matthias Brachert and Walter Hyll, both of the Halle Institute for Economic Research, say that those who study entrepreneurs have long made two classic errors: They assumed that people’s preferences (in this case, risk-tolerance) don’t change, and they mistook correlation (entrepreneurs are comfortable with risk) for causation–that is, comfort with risk is part of what causes certain people to become entrepreneurs.

The relationship between risk and entrepreneurship may instead be quite different. Risk-tolerant people don’t seek out entrepreneurship. Instead, entrepreneurs learn how to handle risk as part of running their companies, and in the process, become relatively comfortable with it. “Personal willingness to take occupational risks changes over time, [and] it changes differently for people who become entrepreneurs than for non-entrepreneurs,” write the authors. That conclusion also suggests that people who aren’t particularly comfortable with risk can adapt or train themselves to embrace it.

To figure all this out, the researchers used data from the German Socio-Economic Panel Study, a representative survey of 22,000 Germans that began in 1984 and has been conducted every year since. Of course, it’s a major caveat for those interested in U.S. entrepreneurship that the study uses data from Germany. But frankly, we’re unlikely to ever have access to this same kind of data in the U.S. Even the American Community Survey portion of the Census–which Congress has recently threatened to de-fund–doesn’t collect information at all comparable to that of the German, Danish, or Swedish governments.

The survey asks respondents how comfortable they are with risk. It also asks if they work for another company or are self-employed, and if they work for themselves, what share of their income comes from that endeavor. And in some years, the survey has asked people if they anticipate becoming self-employed in the next year or two.

The researchers found no differences in risk tolerance between people who continued to work for other companies and those who went on to become entrepreneurs. They checked to make sure that their entrepreneurial respondents didn’t know they were about to become self-employed, to ensure that they didn’t somehow train themselves to become more risk-tolerant before starting their new ventures.

But five years later, those who had become entrepreneurs were nonetheless more comfortable with risk than those who didn’t. That suggests it’s the act of becoming an entrepreneur, and learning how to work with massive ambiguity, that makes one comfortable with risk. Not the other way around.

There are many other factors, of course, that might affect how happy one is to take on risk. But because the German data is so extensive, the researchers were able to rule out the significance of many of them: gender, what part of Germany (or other country) the respondent originally hails from, education, age, work experience, whether the survey-taker has been unemployed, disability, marital status, income from investments, number of children, height (!), the length of the person’s work history, and whether at age 15 the survey taker’s father was an entrepreneur.

Of course, the researchers couldn’t ask if the respondents had taken any particular measures to make themselves comfortable with risk. But maybe that’s something risk-fearing would-be entrepreneurs should consider.

-Courtesy: Inc.com

10 Pointers Every Young Entrepreneur Needs to Know

50 Tips for Starting Your Own Company

As a former young entrepreneur myself (now I’m 30), I’ve decided to share my insights from my past experiences — all the types of things that I wish someone had passed on to me when I was first starting out.

1. Do what you love.

When I graduated from college I worked at a job that I didn’t like because it paid me well. I hated to go into work each day. I admit that entrepreneurs typically make the worst employees because they want to be out there growing their own enterprise. Figure out what you love and then become the best that there is at it.

Your passion for your product or service will keep you motivated and get you through the tough times. Yes, there will be challenging moments. But when you work on something that you actually care about (as opposed to just trying to make a quick buck), you’ll probably be happy, have direction and fight as hard as you can to make this crazy idea of yours become a reality.

2. Stay focused.

It’s awfully tempting to jump from project to project, especially when it seems as if a million opportunities are flying by. But don’t become distracted from the big picture. Instead of working on multiple projects, stay on track and complete the task at hand. If you’re working on multiple projects, you can spread yourself too thin, which will have an effect on your performance, productivity and resources. Perfect that one thing instead of working on five so-so projects.

3. Exploit online resources.

The Internet is a gold mine of resources. For example, visit the site of the U.S. Small Business Administration for advice about writing business plans, legal considerations, loans and even local resources to help you get that startup off the ground. Other awesome online resources are the websites of SCORE, America’s Small Business Development Center, Bplans, VentureBeat and, of course, Newspodge.com.

4. Find a mentor.

Whether you turn to a local entrepreneur, a business leader or a weathered vet that you meet through LinkedIn, having a mentor is one of the best resources you can have. Not only might a mentor have experience (such as dealing with venture capitalists), he or she also could possess an extensive network and help you connect with the right people to make your startup a success.

Don’t be afraid to cold call or email a big name in the industry. Many of these big names like to help younger entrepreneurs as a way of giving back. I met my mentor when I was 12. He was the owner of a large carpet store. I was his paper boy. I delivered his paper in the perfect location every day for three months till one day I saw him. I asked him straight up, Will you be my mentor? He said yes. He’s still a mentor to me today along with many other people.

5. Take care of yourself.

I was a young go-getter once. (At age 12 I started my first candy stand and had three at one point.) I know exactly how it is: You think that you’re invincible. Here’s the breaking news: You’re not.

As an entrepreneur, you might find it easy to push aside healthy lifestyle essentials, such as getting exercise, eating a balanced diet and securing enough sleep. But what good will you be if you’re tired or your immune system if weak? Plus, exercise is a great way to relieve some stress.

Don’t forget to make time for yourself. You need to take a break from work or you might burn yourself out. I personally love to listen to books and have since I was a kid. I’m not very good at reading as I have attention deficit hyperactivity disorder so I listen to books. Find what works for you!

6. Define your market.

Failing to define the market is a common mistake of a lot of young entrepreneurs. Always remember to consider if your business plan makes sense for your market. If you’re dreaming up a late-pizza delivery service, do you start it in a business district or a college town? There are a number of ways for you to try to define your market, such as by demographics or psychological factors.

I always hear people in the fashion industry tell me that their world is a $1.2 trillion market. Technically they may be correct. But if your product is hipster pants, the market isn’t $1.2 trillion. How many hipsters are there in the world? How many of them would purchase your product on a yearly basis?

7. Be able to explain your business at a whim.

You never know when you’ll have to explain your business. You could run into an investor in an elevator or end up making a sales pitch to a customer while out to eat. Always be ready to clearly and quickly state your mission, service and product or goals.

This is something I learned from Derek Anderson, the founder of Startup Grind, which hosts events for entrepreneurs. He took me to lunch about three years ago and asked me what I did and the business I was promoting. I really didn’t know how to answer. Since then I have refined my pitch so that when someone asks me what I do, I can tell them in five words or less. Practice your 5-second, 15-second and 1-minute pitch over and over. This will help you be able to explain your business to anyone out there in any situation.

8. Remember, you run a startup.

Just because you secured some funding that doesn’t give you the right to act like you’re a rock star. A luxury home, an office with an actual shark tank or a really fast car are all just a big waste of money, especially in the beginning. Remember, you run a little-known startup (and you’re not Richard Branson overseeing a large successful company). Be careful about managing your cash flow and make sure that you keep track of expenses. That’s not being cheap. It’s being wise. You don’t want to burn through all your cash too early.

9. There are still rules.

A major perk that comes with being an entrepreneur is that you’re the boss. You can make your own hours and develop your vision of a company. In short, you’re doing whatever you want. And it’s awesome. But there are some rules that all entrpereneurs have to follow like registering your business and paying taxes. These are just some of the not-so-much fun things you have to handle. If not, you’re going to be in just a little bit of trouble.

10. Know when to fold ‘em.

Sure, I’ve had success running and selling several different companies, but do you know how many I’ve started and stopped because they weren’t taking off?  Tons. Some say 9 out of every 10 business fail within the first couple years.

Don’t let your pride get in the way of closing your company. I learned this the hard way in college when I launched what became my first failure, Utefan. I knew that what I was doing wasn’t going to work or make money. I kept putting money into it and spending time on it. Eventually I had to give up my pride and stop. Know when to let go.

If you’re not familiar with the classic Kenny Rogers song “The Gambler,”then stop what you’re doing and check it out. It offers some of the best advice ever. Why? Just like any great gambler, you have to know when to fold ‘em. Instead of continuing to work on a fledgling business, it’s best to walk away and reflect on what went wrong. It’s not going to be easy. But it’s inevitable. And you’ll take that lesson with on your next venture.

 

-Courtesy: Entrepreneur.com

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