Tips for Launching a Startup

By Cynthia Kocialski

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I love startups and all the wonderful gadgets they make. The problem is, most of these wonderful things never make it because the entrepreneur is in love with the technology and lacks an understanding of the business. It’s one thing to develop a product that does something cool, but entrepreneurs need to ask whether it actually solves a problem. Ultimately, the business determines the ultimate success or failure of the product.

Here are some tips for anyone considering launching or financing a startup:

It’s Not About the Product

The product may be the heart of the company, but the product no more makes a company than a heart makes a human being. There are many components to a company that all have to work together harmoniously to succeed.

Have the Courage to Discover

The early-stage startup process is one of discovery, not step-by-step execution. Many first-time entrepreneurs believe you come up with a great product idea, then a detailed business plan, and finally hire people to execute the plan. Discovery is the starting point from which the product and business will evolve, iterate, and be refined as the concept meets the customers, the market, and the investors.

Retool and Revise

The first idea is never the final product. The worst work you will ever do is the first work you do. Press forward past the first iteration, and make use of the lessons you learn along the way.

Build Your Team

You need a team, but not just any team. You need the right team for that stage of a company's life. You wouldn't hire a college professor to teach kindergarten. For that, you need early elementary teachers. Startups also need to find the right people for the right jobs. Those people need to have the right attitude and need to be at a stage of their careers that makes them a match for a startup.

Think Like an Investor

Investing in a startup is risky. If investors wanted a moderate return, they'd invest in public companies like IBM and Coca-Cola. What entrepreneurs don't get is that, to an investor, the company is the product. Entrepreneurs need to understand the investor's perspective. Entrepreneurs create end products, but they also need to create the company. Investors buy companies, not products. For an investor, the best-case scenario is a tested, proven business with a market poised to grow rapidly.

The spirit of American business is embodied in the startup. Innovation and guts are the foundation of the startup, and those qualities also happen to be characteristic of the most successful mega-firms. Let those qualities form the dynamic of your startup. and you’ll be off to a good start.

Cynthia Kocialski has founded three high-tech companies and now is a consultant for startups. She is the author of Startup from the Ground Up.

C12's 2011 Leaders Conference back in Central Florida

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C12 launched here in Central Florida in 1992. Now, after hosting its national conference in cities across the U.S., the 2011 Leaders Conference: Standing in the Gap will be held here, at the Gaylord Palms Resort & Convention Center in Kissimmee Oct. 27-29.

This event is a time of targeted, practical equipping for both superior business performance and workplace ministry. Attendees will also experience rich fellowship with like-minded peers from across America and from abroad.

The conference kicks off Thursday with a keynote dinner featuring Kris Den Besten, an Orlando Christian CEO and author of SHINE: Five Empowering Principles for a Rewarding Life.

Friday features a full day of conference and breakout sessions, wrapping up with a fellowship dinner.

The conference concludes Saturday morning with a plenary session, followed by the C12 Open golf scramble at Celebration Golf Club from 1-6 p.m.

Special room rates of $129 are available. Early registration discounts expire Sept 15. Details are on the C12 website.

The C12 Group of Central Florida is a personal advisory board of Christian business owners and CEOs, all committed to your personal, business and eternal success.

Seeking great entrepreneurs

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Entrepreneur magazine looking for business owners to enter its Entrepreneur of 2011 contest sponsored by The UPS Store. The contest seeks small business owners who can share how their business makes a difference in their industries and communities and to their employees.

The criteria for the three award categories is as follows:

Entrepreneur of 2011: No more than 100 employees; gross sales revenue of at least $3 million in 2010

Emerging Entrepreneur of 2011: No more than 12 employees; at least $350,000 in gross sales revenue in 2010.

College Entrepreneur of 2011: Entrants must be either an undergraduate or graduate student between the ages of 18 and 25 during the time of submission. College students may pitch their business ideas for a shot at $5,000 in startup capital.

Last year's winners included Entrepreneur of 2010 Daniel Lubetzky of Kind Healthy Snacks, Emerging Entrepreneur of 2010 Derek Zobrist of Enovative Kontrol Systems, and College Entrepreneur of 2010 Allen Kim of Bebarang. Learn more about their businesses, read their stories and watch videos about their experiences at the magazine's website.

Judges include representatives from Entrepreneur's editorial department and Mail Boxes Etc. Inc., franchisor of The UPS Store. The panel will base its decision on several criteria, including business growth, effect on industry, community, employees, and customers.

All three winning entrepreneurs will receive two round-trip tickets within the continental U.S. and a profile in the January 2012 issue of Entrepreneur magazine. The three winners will also be honored at an awards luncheon and ceremony in January at Entrepreneur's fourth-annual Growth Conference. In addition, the winners will receive a gift certificate for $500 in free services at The UPS Store, a three-year subscription to Entrepreneur magazine and a selection of Entrepreneur Press books.

Entry criteria and the complete rules can be found on entrepreneur.com/e2011/rules, or for the college contest, entrepreneur.com/e2011college. The deadline is June 15.

Four ways to accelerate cash flow

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"Traditional methods to increase cash flow are not working," said Lisa Anderson, founder and president of LMA Consulting Group Inc. "When customers demand increased service and value, innovative strategies are required to succeed."

There are countless ways entrepreneurs can increase cash flow through supply chain improvements, but it's important to prioritize in a way that will drive results. "Resources are lean, so it’s vital to focus on what provides the best return on investment," said Anderson.

Here are a few strategies she says drive the bulk of results:

1. Inventory management

Anderson said the key is not only to reduce inventory but to do it while improving customer service. Otherwise, you lose valued customers. Each company requires a different approach, but, said Anderson, "After reducing inventory levels 40 percent or more in multiple companies in various industries, I've found that big picture areas were identical: people, processes, and systems."

2. Supply chain collaboration

Anderson shares some collaboration case studies: “We implemented vendor-managed inventory with a key customer, improving not only our cash flow but also the customer's. In another example, we partnered with suppliers and customers to develop innovative product and packaging that reduced cost -- increasing cash flow -- and improved performance. Lastly, we partnered with key customers and carriers to develop a transportation model that reduced freight costs -- increasing cash flow -- while improving service."

3. Know when to fire a client

Not all customers are good customers. "Negative profitability customers should be reviewed in detail. Is there a compelling strategy to keep them? Focus efforts on profitable customers," said Anderson. Similarly, if a few customers are tying up significant amounts of cash, try to improve the relationships.

4. Cost cutting isn’t everything

Even Anderson admits that cost reduction can’t be the sole focus in improving cash flow. “If you spent the same amount of time and energy on increasing revenue, you could be one of the companies to leapfrog the competition in the new normal."

Do you have expert advice to share? E-mail Kristen.

Disney center provides help for businesses

I attended a talk recently by Jerry Ross, executive director of the Disney Entrepreneur Center in Orlando. He said that just as businesses need to cut costs to deliver more profit to the bottom line, nonprofits need to reduce costs to deliver more services. That’s what the participants in the DEC have done.

By sharing overhead costs and support staff, the organizations that make up the DEC are able to do more for their clients. That also makes the DEC your one-stop shop for a variety of business help:

• Bookkeeping
• Business planning
• Certification
• Finding capital
• Insurance
• Marketing

Service providers based at the DEC include the Hispanic Business Initiative Fund, Central Florida Urban League, National Association of Women Business Owners, Service Corps of Retired Executives. The University of Central Florida is a major partner, offering its business incubation program and the Small Business Development Center. Orange County Government and the U.S. Department of Commerce are also participants.

The DEC hosts a variety of low-cost seminars, as well as one-on-one counseling and networking opportunities. Take a look at the calendar to find events that meet your needs. Services are available for all sorts of businesses, not just small startups.

The DEC is presently located at One Landmark Center in downtown Orlando, but will be moving in April to Fashion Square Mall. Ross expects the center will have a grand opening event in May. He said the reason for the move is primarily to reduce costs. An added benefit for the center’s clients -- who are also trying to cut costs -- will be free parking.

And a little child shall lead the gadget design market

One of my favorite verses is Proverbs 21:5--“The plans of the diligent lead to profit as surely as haste leads to poverty.” It’s a reminder that accomplishing business goals takes time, planning, and hard work.

Photo of dzdock One by dzlabs

This ingenious gadget, designed by an 11-year-old, is evidence of what such diligence can lead to. Dino Zaharakis noticed that many iPad and iPhone holders don’t accommodate devices in a case or with the cord attached. He also noticed that although many products are designed in the USA, few are made here.

Instead of just bemoaning the trade deficit, Zaharakis applied himself to designing a "one for all” gadget stand. His design is a wonder of simplicity. Then his dad helped bring this idea into reality.

The Zaharakis family lives the not-so-fondly named “rust belt.” They chose local companies to manufacture the final product. As the dzdock website says, “American-made. American-designed. Yes, we can still do it!”

In applying diligence to bring his concept to fruition, Dino Zaharakis reminds me of another great verse: 1 Timothy 4:12--“Don't let anyone look down on you because you are young, but set an example…”

Do you have a product manufactured locally? Tell us your story.