GURBAKSH CHAHAL'S 27 LESSONS ON ENTREPRENEURSHIP

He is an Indian-American self-made entrepreneur, author, TV personality, and motivational speaker. By the age of 25, he founded two advertising companies worth $340 million. In his interview with Oprah Winfrey, she introduced him as "one of the youngest and also the wealthiest entrepreneurs on the planet Earth." He is now the Founder, Chairman & CEO of gWallet, Inc.

They following are 27 lessons on entrepreneurship, as discussed in G's book - The Dream:

1. Listen to your heart.
2. Forget noble motivations (one I disagree with)
3. Adjust your attitude
4. Figure out what you’re good at
5. Trust your gut
6. Do your homework
7. Be frugal
8. But don’t be frugal with hiring
9. Hire smart people
10. Don’t expect perfection, but strive for it
11. Learn to listen
12. Own your mistakes
13. Never compromise your morality
14. Never lose sign of the competition
15. Watch your back
16. Don’t procastinate
17. Don’t do anything by half-measures
18. Be nice to people
19. Negotiate from a position of strength
20. Expect the unexpected
21. Perception is reality
22. Don’t get emotional
23. Be fearless
24. Pick your battles
25. Grow a think skin
26. Take chances
27. When you commit, you really have to commit.

Source: Ryan Allis

HOW TO BOOTSTRAP YOUR BUSINESS

Bootstrapping, the act of avoiding external investors, means going solo in the financing department, all the while keeping expenses to a minimum. Many business schools widely promote the use of external investors. They teach you to write a lengthy, in-depth business plan and then pitch it to investors. This isn’t always an option for many entrepreneurs, however, nor is it always the smartest route. 


Finding outside investments, like venture capital or bank loans can be tough, not to mention time consuming.

Getting a small business loan from a bank is difficult because startups are risky ventures, and banks are not known for their risk taking. That’s not to say that small-business loans aren’t out there, just don’t hold your breath. 

Small business grants from the government work similarly. They’re hard to come by, and the time it takes to search for them could be better spent working on the business itself.

Most startups try to go the route of venture capitalists or angel investors (also known as angels), but these two types of external investors can also be a tough sell. Venture capitalists invest billions, but they do so for only a select number of ventures. They’re generally interested in larger investments and are more willing to invest money in companies that already have a solid base. An angel is typically an affluent inpidual who provides capital for startups. The problem with pitching an angel is that it can be very difficult to find the right one and then actually grab his or her attention.

Financing your business the conventional way—with someone else’s money—involves spending a lot of time chasing deep-pocketed investors who are statistically not likely to be interested. Bootstrappers, on the other hand, focus their energy on making money and being smart with it. Along the way they tend to learn more about money management and finance than those who start out with loads of someone else’s cash.

Bootstrappers get financing in several different ways. Some of the more common forms are credit cards, second mortgages, personal savings, or friends and family. This may sound risky, but there is a reason bootstrapping is increasing in popularity.

Bootstrappers maintain a customer-focused mentality from day one. Externally-funded business owners are often fooled into thinking that they already have a business because they can pay salaries and rent, but the truth is you only have a business when you have paying customers. Bootstrappers have nothing but their customers to focus on. They also build cost-effective businesses right off the bat. You can't waste much money when there isn't much money to waste. Bootstrapping is a solid investment for anyone with the determination and brainpower to find a way to make it work.

Tips to ease the process:

1. Plan ahead for your startup needs by establishing good credit. Being an entrepreneur is risk enough for many creditors; don’t give them another reason to deny you.
2. Cut your overhead costs down to the bare essentials. Every penny you unnecessarily spend cuts into your ability to succeed.
3. Do it yourself as much as you possibly can. Even if you don’t know a lot about a particular subject matter, you can always read up on it.
4. Plan for success, not for failure. Planning ahead for failure seems like the smart thing to do, but by removing all possibility of failure from your mind, you’ll be more likely to succeed.
5. Getting things right is important, but it’s still more important to get them done than get them perfect, so don’t be afraid to be a little “reckless” in that regard.

Don’t write off the use of external investors. For some startups they’re the right choice, but so few startups have that choice. Instead the majority of them are forced to start with little or no money. Don’t be discouraged if you’re one of those entrepreneurs, it’s probably a blessing in disguise. Bootstrapping is a risky venture, but the payoff is usually worth it in the end.

Source: Partnerup Communities

BEFORE EMBARKING INTO FRANCHISING

Before you decide to embark into franchising, the followings are some cautionary thoughts to be considered;

To the Prospective Franchisor

Franchising is no miracle cure. If the product or services is not competitive, franchising will not make it so;

* The effects of a successful formula may wear off. Changes in consumer preferences or technical progress may necessitate adaptations in the franchise system;

* What works in one country may not work on another. A thorough feasibility study will show the prospects of successfully transplanting a product or service. But, conventional wisdom about what will not work maybe wrong. (Remember, many people thought that hamburgers would never sell in China and Japan!);

* Success in franchising takes time. The high up-front costs of a franchises can mean that it may take longer to become profitable;

* Franchising requires continuing initiative and commitment of franchisor's resources. Franchisors that do not adequately support and control their franchisees are asking for trouble. It is safer to recruit franchisees through a well-targeted campaign than to rely on unsolicited applications;

* Franchising requires dedicated staff at headquarters. The managers of the franchising effort should not be distracted by other responsibilities. Depending on the nature of the business, they should be prepared to spend much of their time on the road inspecting and helping franchisees.


To the Prospective Franchisee

* A franchise does not bring automatic business success. Although the average franchisee's start-up is much more likely to succeed than that of other businessmen, but to ensure this, he must contribute four critical elements:

* Thorough preparation,
* Eagerness to learn,
* Adherence to the "system",
* Hard work

* The largest and best-known franchisors are not necessarily the best to do business with. Being one of hundreds of franchisees carries less weight than being one of a much smaller circle, but in term of economies of scale, there is no advantage in being one of a few franchisees of an unsuccessful franchisor;

* Franchisees are and are not independent businessmen. They operate their own business, but they commit themselves to doing this according to someone else's rule. But, they assume risks and their business may fail, even though other franchisees may prosper;

* The first franchisees in a country where franchising is not well known may have to cope with ignorance, or even hostility, from several sides:

* Government ministries,
* Competitors
* Customs authorities
* Legislators
* Banks

Source: BPG Development Centre, Malaysian Franchise Magazine.

FOOTSTEPS TO FRANCHISING

Step 1: Self and Business Audit

ARE YOU PSYCHOLOGICALLY ready to turn your business into a franchise? This is the most crucial question an entrepreneur should ask before jumping into franchising.

Some of the questions that you should ask yourself are: 'Am I willing to commit myself to it?' or, 'Am I willing to share the business with a partner (franchisee)?' In other words, before starting a franchise you should 'know' what you are getting yourself into. And furthermore, you should realize the risks and problems that come with franchising a business.

When starting a franchise, you need the right attitude and behaviour because you are going to set the example for franchisees to follow. For instance, you should be able to show them that you are a highly motivated and confident person who believes in hard work and discipline in order to succeed. There should not be any room for negative attitude in franchising.

A business owner must also audit his or her business standing. Is the business physically fit to become a franchise? Do I have to employ experts? Do I have the resources and technical know-how to concentrate on developing a franchise business? Do I need to create a new franchise department for the company?

A franchise department can stand on its own. But, it would be most effective when it is managed under the marketing department of the business. The reason is because franchising as an intermediary between the manufacturer and the consumers, somewhat similar to retailing.

Step 2: Developing the Business Model

DEVELOPING A BUSINESS model should be the next step in starting your franchise. A business model is just like a blue print of the franchise.

A market research must be conducted in order to define the competition, target market, political or social surroundings, as well as the economic and legal environment. The results will serve as beacons for the business so it can be steered safely towards a successful end.

The blue print must touch on every aspect of the business including how the business should be conducted, right down to the nitty-gritty details, like how the personnel should smile when greeting a customer or client, or how the windows and floors should be cleaned.

The reason behind this is because the business model will serve as the franchise's Operation Manual if they are unsure of any procedure or process.

However, like any other scientific theories, the business model has to be tested before proven valid. There may be some major flaws that are overlooked in the business model at this stage, and testing the Operating Manual will be the best method to pick them out and make the necessary rectifications before proceeding.

Step 3: Test the Business Model

THIS IS THE STAGE WHERE your theory is tested. A real franchise outlet is put into operation. Here is where all the procedures and process, including the nitty gritty details are implemented in real life.

As expected, there will be problems in the business which are not stated in the operating manual. Thus, problem-solving and evaluation is the major activity at this stage. Corrections made should be documented in the operation manual. This process will usually take about 18 to 24 months in order for the Operation Manual to be stabilized and perfected.

Step 4: Marketing the Franchise

AFTER AT LEAST TWO YEARS, or when your prototype has been proven valid and successful, it is now time for extensive marketing. A well developed marketing strategy should be the to success at this stage. Perhaps a grand launching by a prominent political or social figure will give the business the boost it needs.

Attractive remunerations must be highlighted to catch the attention of franchisee-to-be. For example, the low capital investment needed to start the franchise business, or a guaranteed monthly income for the first few months.

But, what is more important is that the franchisor is ready to answer any enquiries from the public regarding the business. A disclosure of documents and legal agreements should be prepared before the marketing begins. Bear in mind that marketing does not end after you have successfully launched your franchise.

Step 5: Selection of Franchisees

THIS IS A PROCESS WHICH cannot be taken lightly by the franchisor. A franchisee-to-be might have all the resources, but do they have the makings of a successful business owner.

Similar to the first step, the franchisees must be physically and psychologically fit to become a franchisee. Checklists and written tests are one way to find out. But, an effective method of selection is by putting them through training. McDonalds for example, train their franchisee-to-be by putting them in outlets where they start from sweeping the floor to managing the outlet. If they were to give up during the process, they are automatically rejected as they do not have the commitment and drive to manage the business.

Note that the training modules and processes should have been developed and tested during the second and third steps to franchising.

Step 6: Managing the Franchisees

MANAGEMENT PROBLEMS would not be a major problem if the selection process is effective. However, problems do crop-up and solutions must be found immediately in order for the business to run smoothly.

The relationship between franchisor and franchisee, it needs to be rejuvenated time and again as quarrels and disputes will occur.

Disputes that arise among the franchisees must be settled within 24 hours to prevent it from getting worse. Franchisors are recommended to provide training, hold meetings or gatherings and discussions with franchisees to ensure effective communication, as well as developing good ties with them.

Source: BPG Development Centre, Malaysian Franchise Magazine.

5 WAYS TO START YOUR BUSINESS WITH NO MONEY!

If you count yourself as one of the masses that is sick and tired of the daily grind of your mindless job, then getting out and starting your own business is a real possibility. It may seem like a daunting task; but you can get into business on your own with as little as $5,000.

Erase the notion that you need hundreds of thousands or millions of dollars to make it on your own. Here are some tips for you to get started on opening your own business:

1. You’ll need more than an idea.

Once you’ve created your business model you’ll have to develop the skills necessary to make it in this nitty-gritty world of the unknown. Pure smarts aren’t enough to be successful. You need to rely on determination, guts, tough skin and confidence. You are sure to encounter many roadblocks along the way, as such, you have to be ready to face these head on.

2. Scrape together your dough.

You have to assess how long you can get by with little or no income. Aside from turning into a frugal being, you have to be completely honest with yourself when it comes to your personal finances. Make sure your credit is in good order as this will help you when it comes to applying for bank loans.

3. Cut corners.

As much as you’d want to have a luxurious office, you still have to be reasonable. Work out of your home and set up an office that has all the amenities minus the rental costs. If you need space for conferences or meetings then ask around and see if you can share their space for cheap. Remember you will have to have some face-to-face meetings, so plan accordingly.

4. Make do with what you’ve got.

A new computer system could cost upwards of $2,000 so maybe what you’ve already got could be sufficient. If you really need a new system, then lease instead of buy.

5. Think outside the box.

There are many ways to be frugal without looking cheap. Search bargain outlets for office materials, scour the internet for deals and just keep your eyes and ears open for opportunities as they come knocking because the best deals aren’t advertised but are found out through word of mouth!

HOW-TO START A BUSINESS

"You want to start your own business, but don't know where to start. Follow these steps and you'll be well on your way."

STEP 1: Business Idea

To start a business you will need to choose or create a business idea. While this is an obvious step many people who want their own business don't have an idea, just the desire to be an entrepreneur. For the budding entrepreneur, there are many options; buying a franchise or an existing business, or looking to others for ideas for a start-up business. Once you have decided on the business you wish to start, then the real work begins.

STEP 2: Business Plan

Writing a business plan is your next and most important step, this is how you and others will evaluate your business. When seeking financing, the investors or lenders will want to read your plan before they supply you with funding. If you're financing the business yourself, you will still want to have a written plan to develop business strategies and financial projections. A key element within the business plan is the marketing plan, which explains marketing strategies that will be used to advertise and promote the products or services.

STEP 3: Financing

With your business plan in hand, you are ready to go find yourself some capital. Most small businesses have three options for financing - friends & family, investors or bank loans. Each of these options has different considerations for the business. Investors and even friends & family usually want ownership and control of their portion of the business. Bank loans burden the business with an additional expense of the loan payment, which can erode the business profits.

STEP 4: Getting Started

You've gotten the plan, the money and the enthusiasm; you're ready, right? Not yet, as with everything you need to take the legal issues into consideration. First you should choose a legal business structure: Sole Proprietorship, Partnership, or Corporation. Your financing decisions will have an effect on what business structure you choose. Now you can file with the state to incorporate and obtain a federal Identification number.

STEP 5: Opening The Doors

Okay, it's time to get on the road to making some money; this of course means spending money. Where are you going to run your business? Will a home office do? Or is commercial space needed to service your customers? Do you need to hire employees to help you run the business? What are your bookkeeping needs, do you need an accountant? Finally, what taxes do you have to pay and collect? Now that your business is through the start-up phase, you can now look forward to the issues of managing a small business.

10 STEPS TO STARTING A BUSINESS

Starting a business involves making key financial decisions and completing a series of legal activities. Here are basic ideas to help you plan, prepare, and manage your business.

Step 1: Research and Plan Your Business
Use the necessary tools and resources to help you prepare your business plan and become a successful business owner.

Step 2: Get Business Assistance and Training
Take advantage of free training and counselling services, from preparing a business plan to getting financing, and help expanding and relocating a business.

Step 3: Choose a Business Location
Get advice about choosing a customer-friendly location and complying with zoning laws.

Step 4: Finance Your Business
Find government backed loans, venture capital and research grants to help you get started.

Step 5: Determine the Legal Structure of Your Business
Decide whether you are going to form a sole proprietorship, partnership, LLC, corporation, non-profit or cooperative.

Step 6: Register a Business Name
Register your business name with your state government.

Step 7: Get a Tax Identification Number
Learn which tax identification number you'll need to obtain from the IRS and your state revenue agency.

Step 8: Register for State and Local Taxes
Register with your state to obtain a tax identification number, workers' compensation, unemployment and disability insurance.

Step 9: Obtain Business Licenses and Permits
Get a list of federal, state and local licenses and permits required for your business.

Step 10: Employer Responsibilities
Learn the legal steps you need to take to hire employees.