May 13, 2015

Advice to Entrepreneurs and Job Applicants

I served as a speaker and panelist at the International Biz-Tech Forum at the University of Washington on April 4, 2015. Organized by the Technology and Business Association at the University of Washington (TBAUW), the primary purpose of the event was to help students gain experience and knowledge in both academic and industrial fields in order to prepare themselves after they graduate and enter the job market. While my presentation covered a variety of topics including the risk and rewards of entrepreneurship, operational and financial strategies for early-stage companies, and recommendations for those planning to enter the job market, there are some aspects of my presentation that I wish to discuss in this post.

Photo: In-Between
Photography and TBAUW
It is important that would-be entrepreneurs understand the sacrifice involved in creating and building a business. I believe many people enter entrepreneurship for three reasons: (1) Be their own boss, (2) be in creative control of their service or product, and (3) the opportunity to make a lot of money. Whether I am advising entrepreneurs or investing in their dream to launch a business that will provide exceptional customer service, create a product or service of the highest quality, and build shareholder value, most entrepreneurs fail if making a lot of money is any part of their motivation to create a start-up. Being monetarily-motivated can lead to a grave consequence for an entrepreneur.

Quite simply, the passion and sacrifice required in building a business rarely corresponds to the monetary results entrepreneurs are seeking. Sure, most tech entrepreneurs desire to build the next billion dollar empire, but the reality is most businesses fail within the first few years of its existence.

Many new or would-be entrepreneurs seek my advice and/or financial support. While the individual thinks they are submitting their business (or concept thereof) for my advice or consideration, it is often difficult to determine if their idea is a hobby or a business that will generate sustainable revenue. During my presentation, I advised the attendees to contemplate the following questions if they are considering starting their own enterprise:
  • Why you (and your idea) and why now?
  • Who are your customers?
  • How will people know about you?
  • How will you make money?
  • How will you retain customers, while at the same time, grow your business?
  • How will you achieve and sustain profitability?

Photo: In-Between
Photography and TBAUW
This led me to another important point of my presentation: "HAVE A PLAN!!!" For reasons that I have yet to understand, many entrepreneurs whom I meet do not have a business plan nor do they plan to draft one. A business plan is not only necessary if the owners are seeking financial backing from investors, a business plan provides a greater value by serving as a road map for each and every individual involved with the company. For example, every one of my colleagues at ROI3, Inc., irrespective of their place on the company's organizational chart, is presented with a copy of the latest draft of our business plan and he or she is given the opportunity to provide critical feedback. I use the word 'draft' deliberately since a business plan is always evolving.

I subsequently explained to the attendees the requirement of forming a team to build a business that will produce revenue and achieve profitability. It is important to note that the team is not limited to employees only, but it consists of mentors and advisors, family members, and friends. In addition to emphasizing the requirement of forming a team to build a company of value, my slide titled "It Takes a Team" emphasized the need to "surround yourself with people smarter than you." The ability of every entrepreneur to lead their business effectively often lies in the awareness of their personal and professional strengths and weaknesses alike. I learned long ago that building a successful business requires building a team with people whom are smarter than me and provide the support (financial and/or emotional) when the company, or I as its leader, encounter obstacles that often appear unexpectedly.

"If you do not know your numbers, you do not know your business" was another important point of my presentation. While many businesses fail for a variety of reasons, the management team's inability to understand their financial plan is often a common cause of business failure. A company's operational plan is only as strong as its financial plan, the latter of which is required to implement the former. Business owners who do not understand the numbers, which should be expressed through a profit and loss (P&L) statement, cash flow statement, and balance sheet, will see the demise of their hopes and dreams of becoming a successful entrepreneur. Ideas alone will not build a business that will produce revenue and achieve profitability. Business success requires a sound operational strategy complemented by a realistic financial plan.

Photo: In-Between
Photography and TBAUW
As part of my discussion regarding a company having a financial plan, I emphasized the importance of a company providing a timeline for operational and financial milestones including its break-even point and plans for sustained profitability. In addition, a company building for successful future should convey its operating expenses segmented by (1) sales and marketing, (2) general and administrative, and (3) research and development, as well as knowing its cost of revenue (sales) and the percentage of its cost of revenue as it relates to the company's gross revenue.

For those attendees preparing to enter the job market, I provided some advice about looking for a job and writing a résumé that will stand-out from the dozens or hundreds of résumés submitted to hiring managers. It is important for job seekers to not just network with people affiliated with a specific sector, but building meaningful relationships. Utilizing social platforms like LinkedIn is important, but going the extra step to meet with sector or business leaders, and the applicant's willingness to learn from these leaders, is essential to building strong long-term relationships.

Citing an article from Entrepreneur magazine, I noted one in four and one in ten HR managers receive 50 résumés or one in ten résumé per job listing, respectively. The article also provided the following list of criteria HR managers are looking for from job applicants:
  • 77% - relevant experience;
  • 48% - specific accomplishments; and
  • 41% - résumé was customized to the open position or not.
Again citing the article, I provided the percentage of HR managers who look for specific keywords in résumés:
  • 56% - problem solving;
  • 44% - leadership;
  • 40% - oral and written communication;
  • 33% - team building; and
  • 31% - performance & productivity improvement.

Photo: In-Between
Photography and TBA
Speaking from my perspective as an employer, I explained that I will spend no more than 30 seconds looking at a résumé and the applicant's résumé is poorly-written if I have to "read" it. While each career services department provides useful guidelines about constructing an effective résumé, I think a two-page résumé is acceptable (and do not include an objective statement). More importantly, the content of the applicant's résumé should be consistent with their LinkedIn profile. And yes, I do look at the applicant's Facebook, Twitter, and Weibo pages.

I enjoyed the experience of presenting at the 2015 International Biz-Tech Forum at the University of Washington and I want to convey my sincerest appreciation to the members and leaders of TBAUW for providing me with the opportunity. The slides from my presentation may be found below.

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