NZ Entrepreneur - Issue 44

NEW ZEALAND’S E-MAG FOR ENTREPRENEURS AND BUSINESS OWNERS

10 QUESTIONS August 2016

with Mitch Lowe of Audiolodgy

Touring

Entrepreneur lessons: How to avoid cash flow crises Don’t Mistake Good Leadership for Good Management ... and more! www.nzentrepreneur.co.nz

ABOUT / Short and sharp, New Zealand Entrepreneur is a free

CONTENTS

e-magazine delivering thought provoking and enlightening articles, industry news and information to forward-thinking entrepreneurs.

EDITOR / Richard Liew

4 6

From the Editor 10 Questions with Mitch Lowe

ART DIRECTOR / Jodi Olsson GROUP EDITOR / Colin Kennedy CHIEF FINANCIAL OFFICER / Alastair Noble CONTENT ENQUIRIES /

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Don’t Mistake Good

Phone Richard on 021 994 136 or

Leadership for Good Management

ADVERTISING ENQUIRIES /

email richardl@espiremedia.com

Jennifer on 0274 398 100 or email

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Entrepreneurs: 6 Ways To Ensure

Your Written Content Delivers

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From Cash Flow Crisis to Creative

26

Orion Scott: No Excuses

38

9 Alternatives for Raising Capital

44

Parting Shot

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jenniferl@espiremedia.com WEBSITE / nzentrepreneur.co.nz

ISSN 2253-5683 NZ Entrepreneur is a GREEN MAG created and distributed without the use of paper so it’s environmentally friendly.

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EDITORIAL

THIS MONTH WE meet two young #nzentrepreneurs building businesses in music and fashion and who have inspired me with their abundance of that ‘holy grail’ of entrepreneurial gifts, youthful enthusiasm.

sharing insights and attitudes we can all learn from.

This month I also take a look at a challenge for entrepreneurs that I am all too often reminded of - the difference between good management and leadership.

Nathan Rose overviews Our feature interview is with the nine different means music and events promoter for acquiring capital and Mitch Lowe, 26, and our Sandy Geyer shows why profile of the month is on cashflow forecasts are an up and coming fashion entrepreneur, Orion Scott, 18. essential tool in any serious entrepreneurs’ belt.

While both have achieved Please enjoy and if you’d like notable success given their to get in touch email me at respective ages, to me it is richardl@espiremedia.com. their respective mindsets that are most impressive, with both Mitch and Orion

Richard Liew

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INTERVIEW

10 QUESTIONS with

Mitch Lowe ofAudiolodgy Touring

SBTRKT, RONI SIZE, London Elektricity, John Digweed, Gorillaz, Mobb Deep, Ghostface Killah…

If you love your electronic and hip hop beats like we do, we reckon you might just be a tad jealous of this month’s feature #nzentrepreneur Mitch Lowe.

He’s made a business out of having fun, running events and gigs with artists like the ones just listed and managing and promoting a whole lot more. Now aged just 26, and with offices in Sydney and Auckland, Mitch’s Audiology Touring has put on over 500 events since he accidentally fell into this notoriously brutal business as a teenager in 2008. And judging from some of the awesome entrepreneur insights Mitch shared with us, we have a feeling he’s just warming up.

Mitch, can you tell our readers a bit about Audiology Touring and your other businesses? What do you do?

Essentially, all of my companies (Audiology Touring, Talk Later, Tenfold Agency, Forgotten Island Events and Bay Dreams) aim to provide entertainment across NZ and Australia in the form of concerts, festivals and weekly club events.

We also work closely with managing and developing artists in the industry.

How and when did you get started in the industry?

Ironically, I had no intention of running events originally.

I always knew I would take a creative path, though, and set out to study graphic design straight from school.

Upon gaining a diploma, I learned that the industry roles offered for fresh graduates were not as ‘creative’ as they were made out to be, so I launched a clothing line.

With very little money at the time, it only made sense to throw a ‘launch party’ to get the brand name out in public. It seemed like a cost effective marketing strategy.

The launch party had over 600 attendees and made a profit; it was at that moment I realised I could turn this into a full-time business, with clothing soon becoming my secondary focus.

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Persistence beats failure, every time. I truly believe that anything is possible with the right attitude and the right work ethic.

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You were very young and had no prior business experience - what made you think you could be successful in an industry where so many others have failed?

Persistence beats failure, every time. I truly believe that anything is possible with the right attitude and the right work ethic. I was confident in my personality and my relationships with people even at a young age.

Ultimately I was an eager 18-year-old ready to risk it all, and sometimes that’s all it takes, that initial leap with a ‘what’s the worst that can happen?’ approach.

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Many people put off starting a business because they don’t have any money. Does it really take money to make money?

You do not need (a lot) of money to make money. I truly believe this is a false perception. To use myself as an example, I was earning $10 an hour at a store, barely able to fill my car up with petrol, but I knew that if I started small and built up, I would eventually get there. For me it was key to do it on my own, for others, there’s an opportunity to call on investors. I started with shows that cost $300 to put on and built up to running shows that now cost $300,000 to put on.

As long as you are making a small profit and reinvesting into yourself and your company you can only move forward. That’s not to say there won’t be truly difficult financial times. I clearly remember the odd show emptying my bank account, and I was having to pay off contractors, but that’s exactly it, if I had bailed then, I wouldn’t be here now.

Pay your debt, regroup, and relaunch, and above all keep healthy relationships which will allow you to push forward.

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You do not need (a lot) of money to make money. I truly believe this is a false perception. To use myself as an example, I was earning $10 an hour at a store, barely able to fill my car up with petrol, but I knew that if I started small and built up, I would eventually get there.

A lot of people believe building businesses is too risky for the average person. Do you agree?

We are all wired differently; some of us thrive on the risk, and some of us play it safe.

There’s no right or wrong way, just differently personality types that should play to their strength. Personally, I could lose every cent I have ever made tomorrow, and it would barely phase me, as long as I maintain the relationships I have built along the way it means I can get back up on my feet relatively

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quickly. My security is not in my bank balance; it is in my staff, friends, family and business model. Events and promotion is undoubtedly one of the riskiest industries in the world, so it’s imperative I have this perception.

There are so many variables and to make a loss on a project that you work hard on is common. For me it’s about understanding the bigger picture, knowing that losses lead to wins and just trying to find that balance whilst steering the ship in the right direction.

Learning from our mistakes is essential if we are to grow as entrepreneurs. What’s one of the biggest mistakes you’ve made as an entrepreneur and what lessons did you take away from it?

I have made more ‘mistakes’ than I have had hot dinners (haha)... Again, this is a matter of perception as I only ever see these as learning curves.

I justify it to myself, treating it as my ‘university degree’ that I never paid for. The biggest mistake I have ever made was taking on an artist/show that I wasn’t passionate about, purely due to believing it would turn a profit. It lost so much that it took six months to come back from. Never do something just to make money! You must have your heart in it as well. I have found time and time again that the shows I am passionate about are most successful.

What comes first – confidence or success?

For me, confidence came first, although I see the ‘chicken or the egg’ scenario here. I have always been confident because I believe so heavily in

my values as a person, more so than I do my ability to run a company. As small amounts of success start to come, you definitely deal with things differently, I find. Rather than begging for something to be done, you can simply request it, because you know what you stand for, and you understand the value of your company.

Starting and building a business is one of the most stressful things most people are ever faced with what do you do to cope with stress?

I’ve never been much of a stress-head, but I travel. Lots.

For me success is based on how much of the world I can see, I’ve been around the world 10 or so times now, and whilst it’s for personal enjoyment I always make a point of meeting with potential clients, catching up with artists, and checking out festivals to get inspired and take away ideas. Due to travelling I now have the opportunity to take my companies global, which I intend on doing by next year.

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Lead by example: Make sure you represent your brand and its values, and your staff will do the same. After all, it’s something you created, and you know better than anyone how it should be portrayed to the public.

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Do you believe anyone can be a successful entrepreneur?

I believe that anyone with the right attitude that understands the level of risk can be a successful entrepreneur. If you’re prepared to make your work your life, then you can achieve anything. There is no such thing as a nine to five in your own business. Case in point: Right now I am in a taxi on the way to the airport.

What are the three most important personal qualities you would advise up and coming entrepreneurs to develop?

Positive perception: As I touched on before, it is easy to view mistakes as failures, but they are learning curves.

Make every single problem an opportunity. It really is your choice as to which one it’ll be. I choose not to believe in problems.

Be nice: It may seem simple, but too many people forget this in business. Your goal is to build healthy relationships that are fruitful; you don’t have the headspace or time to work with idiots.

Lead by example: Make sure you represent your brand and its values, and your staff will do the same. After all, it’s something you created, and you know better than anyone how it should be portrayed to the public. 

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ENTREPRENEURSHIP

Don’t Mistake Good Leadership for Good Management

BY Richard Liew

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THERE IS PLENTY OF advice out there for employees about the importance of not mistaking good management for good leadership. For example, “Management is doing things right, leadership is doing the right things” from Peter Drucker, and “A leader is one who knows the way, goes the way and shows the way” from John C Maxwell.

But I think entrepreneurs also need to be reminded that good leadership is not the same as good management.

Because while leadership may come naturally to many entrepreneurs, management is an entirely different ball game.

As an entrepreneur, the very act of starting a business or venture from scratch - grabbing the bull by the horns and getting on with making something happen - is a demonstration of your leadership.

with speed, passion and determination that will inspire others to join your cause.

As for management, well in the early days, there’s not very much for you to manage as nothing exists until you have created it! Regarding a team, it’s probably just yourself, or if you’re lucky one or two others.

Decisions can be (and need to be) made quickly and easily.

You can change strategy, direction and approach as many times as you like without causing too much disruption to the ‘team’ - because there is very little in place to disrupt.

But as your business and team starts to grow, and you start to make the transition from startup mode to growth mode, your ability to be a great manager as well as a great leader will become crucial because effective management is not just about charging fearlessly off into the unknown.

Now instead of just three or Almost by definition, as the four people in your team, founder, you will be ‘being’ there are 10 or 20. Instead a leader. You’ve seen the opportunity; you have a vision of just ideas for a product, you actually have products. for the future, and you’ve set about knocking off the You will have customers, you tasks and obstacles needed will have customer service to make that vision a reality and delivery systems, you will

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have suppliers, you will have partners, you will have sales, marketing and finance systems.

All of a sudden what used to be a relatively simple little team to manage is now a complex, interrelated, living breathing organism with (gasp!) real people and all the emotions, egos, and complexity you get when a bunch of human beings come together with different skill sets, mindsets, values, habits, and personalities.

In the startup phase, your business was a speedboat - or maybe even a jet ski! It was just you and your copilots - you were fast, nimble, light and you could change your direction, speed, shape, colour, name and setup of your speedboat as often as you needed while you were searching for that magic formula. Hell at that stage you could even change the whole boat without too much drama!

But soon enough your speedboat becomes more like a racing yacht (on it’s inevitable journey to becoming a cruise liner) - larger, with more working parts, running a longer race on a predetermined course, with more

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team members and more complexity. To get the boat to full speed and across the finish line as efficiently as possible everyone needs to pull together, doing the right things in the right order at the right time, at a sustainable pace.

Changing direction or speed too often causes confusion and slows the boat down.

New ideas distract team members from the current plan. Getting new crew members on or off the vessel causes friction as other team members help them learn their roles or take up the slack.

Working at too fast a pace tires everyone out, leading to underperformance, mistakes and low morale - or mutiny!

Your job as the founder now is no longer so much about figuring out which direction you need to go in but how to get everyone from A to B in a cohesive, organised and hopefully stress-free manner.

Before it was all about creation where are we going to go? Now it’s all about execution - how do we get there fastest? And as we know, most great ideas fail to become great businesses because of poor execution!

What to do about it?

The key thing is to understand that as your business evolves, the very skills and personal characteristics that enabled you to lead a small team in startup phase can actually be a liability in managing a growing team in the growth phase and maturity.

Your impatience for achievement, relentless drive and frenetic pace, your tendency to say “yes” to everything and work on many different things at once, and ability to change decisions and directions in a flash, are the opposite of what you need to be a good manager.

Namely patient, calm, steady, priority focused (which means saying “no” to many new and exciting things!), people oriented instead of just goal oriented - and the ability to choose just one path from all possible paths and stick to it.

next. Your role as the founder is quite simply to ensure the business has the right ingredients for success at the right time. Knowing that you may not necessarily be the best one to manage the crew once you’re out of startup phase, you essentially have two options: 1. Learn to be a great manager. You will soon discover whether you are good at it and enjoy it. Or like many entrepreneurs, you’ll find the challenge of adjusting just too difficult and you will find it extremely stressful. (Hint - if you hate it you probably shouldn’t be doing it.)

2. Probably the best option, though, is for you to stick to what you’re great at, and find a great manager to join your cause and take over the day to day management of the team, so you to get back to what Just by understanding this you you do best - plotting and are better prepared to make planning for the next race! a decision about what to do Richard Liew, founder of NZ Entrepreneur and Espire Media - www.espiremedia.com

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SALES & MARKETING

ENTREPRENEURS 6 Ways To Ensure Your Written Content Delivers

BY Sarah Bell

IN A CONSTANT stream of communication, it’s imperative to ensure your communications are on point.

All other content producers are competitors vying for the attention of your readers. How do you ensure your content stands out above the rest?

Here are six ways to ensure your written content delivers in 2016.

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Image-Driven Popular content is imagedriven. Readers scan for eyecatching images, so make it appealing. You could use stock photography, such as Pexels, but the best choice is to create your own. If you’re selling something, use your product. Take it outdoors, use

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natural light, or incorporate colour. As an extension of your advertising, your image must be on point. But don’t just stop at static images. You could create a gif or create a short video. Motion catches the eye; use it.

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Direct Readers scan for interesting images. Surprisingly, they also scan your written pieces, too. Keep it on topic, keep it concise; longer is not always better. If you can explain yourself in fewer words, then do so! Give your work a punch; put the main point at the beginning rather than the end. Respect your readers’ time; they will appreciate it.

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Appropriate Platform Identify which platforms are popular with your target market and use them. If you are having trouble managing multiple accounts, you can choose a social media management service that combines them, such as Mavsocial. This allows you to schedule across multiple platforms, allowing you to be consistent while also cutting down the amount of time spent on social media.

The Right Time There’s no use sharing a message at a time when the bulk of your readers aren’t going to be present. Utilising your social media scheduling tools allows you to post at the most appropriate time of day, and if you use platforms such as WordPress, you can easily access the site’s statistics to find out not only your most popular time of the day but also your most popular day of the week. Use this information when planning the release of new content, and watch your engagement soar.

5 Provide Value As entrepreneurs, you know the importance of value. But often, that focus is lost in communications.

When planning your communications, ask yourself what value you are offering your customer. What are they going to gain? If it’s a photo of your lunch and you aren’t a lunch provider, then it won’t be providing value.

In fact, it will devalue your brand as a place where you have enough time on your hands (aka no customers!) to post trivial things. Value is key, provide value across everything you do.

Relevant and New

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You should know what your customers care about, and if you don’t know – ask! Engage with your customers. Provide them with communications that are relevant to their occupations. But don’t always go over information that has already been covered, ask yourself what has not been covered and then deliver it! ■

Sarah Bell is a New Zealand journalist and communications consultant based in Seoul. She also coaches business people and trade graduates in effective and persuasive speech and you can visit her website at www.themscript.com

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MANAGEMENT

From Cash Flow Crisis to Creative

By Sandy Geyer

THERE ARE MANY business writers/mentors and coaches who encourage business owners to try and stay in a ‘cash flow crisis’ space. Why? Surely this is one of the most stressful, lonely and desperate places to be? I agree - but it’s a space that insists that we function creatively.

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I have a story from my book Path of the Lion, which illustrates this process which I am going to share at the end of this article.

Before we get there, let’s explore the following set of ‘entrepreneurial intelligence’ guidelines designed to transform us from panicstricken to creative:

a simple cash 1 1. Use flow template that includes all factors which influence the money that we will have available at any given time (for example, provisional taxes, GST/VAT, loans and bonuses). most cases, a 22. Inmonthly cash flow template is effective, but this should be monitored and updated on a daily basis as the real world scenarios meet the forecasted ones.

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3. As the business owner, we need to set up our cash flow forecast and understand it 100% or it will be useless to us.

out expected 44. Work inflows and outflows of cash from previous months where possible.

Include any strategies and influences already in place.

the ‘cash flow 55. Identify holes’ and plan in advance to fill them. The further away we see them coming, the more likely we are to approach them rationally and still have time to try out what might not work. sure that the ‘final’ 66. Make end balance matches the cash needed for the annual company growth rate you want. For more advanced companies, filling ‘cash flow holes’ can sometimes be ‘filling profit holes’, well in advance.

77. Make this process a

personal discipline as the business leader regardless of any cash flow dangers- the focus it provides is necessary to stay in Lion territory.

88. Be conservative with

withdrawals and disciplined with this monitoring and planning process. Staying cash positive is our full responsibility to our pride.

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It’s February 2004, late on a beautiful summer’s Friday afternoon in Cape Town, and I am sitting in my study completing my cash flow forecast for the 2004/2005 financial year ahead. It’s almost six years after our meeting that led to our change in accountants, and I am now well practised at setting up my annual cash flows to give me an accurate picture of what lies ahead based on what I know today.

Each year to date has been a monumental struggle, but I am sure we should be nearing the end of our cashflow challenges, as we have strengthened slowly but consistently, and I am feeling less nervous than usual about completing this planning and tracking tool.

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Here’s an illustration I experienced personally within our educational publishing business.

Each year to date has been a monumental struggle, but I am sure we should be nearing the end of our cash-flow challenges, as we have strengthened slowly but consistently, and I am feeling less nervous than usual about completing this planning and tracking tool.

After entering all the costs, we should incur to facilitate the growth we are planning for the year ahead and adding in the revenue to match last year’s trends and this year’s projects, my heart misses a beat when I see the results for August and November.

In fact, it feels as if it has stopped beating altogether.

These two months each show the biggest negative number I have ever had to face.

I re-check my calculations, readd all the formulas and then send it to my business partner with a panicked note asking him to do the same. Have I forgotten anything? What have I missed?

His response isn’t the one I was hoping for. I haven’t missed anything. By all indications we are heading for a rather big ‘hole’, and we will tumble into it at the end of August when the second provisional tax payment becomes due.

Once I have calmed down, I start to think about how we can overcome this challenge.

Having done my cash flow tracking before the new financial year starts, I have allowed myself time to plan for it, and the first ‘hole’ is five months away. I start considering regions that we have not yet entered in terms of sales, and my partner and I revisit our range of products to investigate possible new ones that might sell during our quieter months ahead.

It becomes apparent to us as we explore our options that the best plan of action is to enter a territory we have not yet covered with our direct sales staff. The area concerned is right in the middle of South Africa, with many schools, but the schools are spread out and difficult to allocate to a fulltime salesperson.

Three months later our marketing manager, our sales manager and I embark on a ‘road show’ to cover as many of these schools as we can over a five day period, using the Sunday and Saturday each side for the longest travelling times.

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Once I have calmed down, I start to think about how we can overcome this challenge.

Having done my cash flow tracking before the new financial year starts, I have allowed myself time to plan for it, and the first ‘hole’ is five months away.

We are all married with small children, and I can see the same concern on their husband’s faces when I collect them, as I saw on my husband’s face as I pulled out of our driveway early that morning.

I suspect the concern is also directed towards the childcare and school lunch duties they are to be left with, but there is also no doubt that there is a certain risk to travelling such a long way on our own. Our vehicle is packed to capacity with boxes, each containing samples of subjects and languages to suit each school we will be visiting.

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The workshop staff, who are struggling to fit all these boxes into the vehicle the day before our departure, joke about giving us each a box to fit in our clothes. I do insist that they find space for the box of red wine I am determined to take, too.

The sales manager has planned our itinerary to the last detail, and each school has received notification in advance advising them of our arrival.

Regardless of whether they respond, we turn up, and the sales manager gets us in front of the right teachers each time, using a mixture of pathetic pleas, due to the distance we have travelled and professional courtesy requests, due to our efforts to advise them of our visit beforehand.

After each visit, the boxes have to be repacked, and we struggle in the heat and unfamiliar surroundings to keep to our appointment times and to keep our energy levels up. In many cases, I drop each colleague at a different school and rush off to another one myself, only to circle around to fetch them again in a few hours as we charge for the next town.

Five days later we journey back. All boxes are empty, including the red wine box, and we have sold enough to not only fill the first cash flow hole in August but to seriously dent the second, bigger hole in November.

Over the next few weeks, some diary orders follow from the sales presentations done on the trip to completely fill the November hole.

As happens in business, the dedicated and positive energy generated on this trip invites additional, unexpected sales from the universe, and by June of that year I am safe in the knowledge that although I still need to adjust the forecasted ‘ins’ and ‘outs’ to the actual ones as we go, in all likelihood we have enough room to sleep soundly until the next cash-flow forecast due to be completed the following February. ■

Sandy Geyer is an entrepreneur and mentor and teaches the principles of entrepreneurial intelligence (EnQ), to entrepreneurs in New Zealand, Australia and South Africa. You can visit Sandy’s website at www.enqpractice.com

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ENTREPRENEURSHIP PROFILE

Orion Scott: No Excuses

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Orion, to start with can you please tell our readers a bit about yourself and your label Orion Kendal?

STORIES OF TEENAGERS making, altering and designing their own clothing are nothing new, but we thought this one was well worthy of sharing.

With dreams of designing for the catwalks of Paris, 18-yearold Orion Scott from Otaki on the Kapiti Coast realised that entrepreneurship was the quickest way to get started on her journey.

She understood that her success in fashion would rely as much on her business acumen as it would on her design skills.

Launching her label under her fashion alter-ego ‘Orion Kendal’ in March 2016, Orion has already sold over 200 items and is already looking for retailers to carry her brand.

What’s more, Orion has a social cause, her designs riffing on the issue of gender neutrality and she’s doing it all from her dorm at boarding school, with no money, no prior experience and NO EXCUSES!

From making what I thought would be suitable outfits to walk Paris fashion week out of mums towels at the age of 11, I have always loved to make and create. Lacking ‘cool’ t-shirts in my wardrobe I paired my love for fashion and art together. With a blank tee and a fabric marker in hand, I created my label ‘Orion Kendal’ in March this year.

Orion Kendal is aimed at the youth of today, not only to emphasise individuality through style but to also shed light on gender neutrality, a major issue in today’s society. I have chosen to enter the market with an affordable vision, as I believe your bank account balance shouldn’t determine your style.

By incorporating my name into each piece of product, I am promoting myself and business in one. Therefore quality control is my main focus, aiming for each item to be to a standard that would be fit for my fashion idol, Her Royal Highness Queen Elizabeth II, to open.

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What entrepreneurial experience if any did you have prior to starting Orion Kendal and how did the business come into being?

With aspirations of studying fashion in France, I was hit with the realisation that this came with a rather expensive price tag. In my mind the best way to fund this was to start a business, forgetting that any normal teenager would apply to New World and scan groceries. I remember being in town when I was asked where I got the top that I was wearing

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from. It was a $5 Warehouse t-shirt chopped off at the bottom and doodled on with vivid, and this is where the idea for Orion Kendal begun.

Apart from taking Year 12 Business Studies at school, my knowledge for starting a business was almost slim to none, and to be honest, it still is! Stuck for advice and guidance, I have relied mainly on my school business teacher and many business magazine articles, both steering me in the right direction, and to where I am now.

What have been your three biggest challenges in getting the business to where it is now?

My biggest and ongoing challenge would be lacking knowledge in particular fields, such as finance and marketing.

Although challenging these are my favourite parts of the business, alongside designing, as I approach them with a ‘trial and error’ attitude.

Following closely behind, my next challenge would definitely have to be lack of space and resources.

Running a business out of your boarding school bedroom has proven to be

very cramped, especially when your wardrobe is filled with boxes of t-shirts as opposed to school uniforms.

However, I’ve become an expert of wrapping and packing shirts on a desk the size of a coffee table, so it’s not all bad!

Time would be my third challenge. If I could, I would devote all my time to developing Orion Kendal and making it grow into a recognisable establishment.

But unfortunately this isn’t a subject that will help me pass NCEA level 3, so balancing business matters and school matters makes for a very busy week.

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I am always making and creating, working on new designs daily, and I hope to expand my product range from t-shirts to other apparel items which would contribute to establishing my brand in the market place.

And what have been the achievements you’re most proud of so far?

In the early stages of creating my product, I was approached by a band who liked my designs and asked if I would be interested in creating their album cover. To me, this was a major stepping-stone in my business venture as it made me realise that other people like my designs besides my Mum and myself.

Another would have to be my first sale to a complete stranger, seeing an email come through that wasn’t from a school friend or relative got me ready to expand Orion Kendal and see where it could go.

What is your business goal over the next few years and what key challenges are you working on right now?

Orion Kendal is still only very small, operating through an online store, I am looking to expand and have my brand stocked in retail stores. Alongside growing and establishing my brand I want to keep my business aims honest and loyal, promoting issues to the community, which could one day contribute to a social change regarding stereotypical gender issues.

At the moment I’m focused on promoting my products and getting feedback and advice on how I could better and improve my products and business.

I am always making and creating, working on new designs daily, and I hope to expand my product range from t-shirts to other apparel items which would contribute to establishing my brand in the market place.

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DON’T LET YOUR AGE HOLD YOU BACK. Although only 18 I’m aware of my capabilities even when others aren’t.

Don’t let your age determine your place among others, fake it till you make it, the less people know, the better. .

Given everything you’ve learnt so far, what would your advice be for other young entrepreneurs thinking of trying to turn an idea into a business?

Another piece of advice is to welcome failure. My first business venture was making makeup bags and selling them to my school friends.

DON’T LET YOUR AGE HOLD YOU BACK. Although only 18 I’m aware of my capabilities even when others aren’t. Don’t let your age determine your place among others, fake it till you make it, the less people know, the better.

The first week or so was good, but then I realised it wasn’t quite for me, so operations stopped, and I was onto necklace making, failing within days then soon followed by Orion Kendal.

I still sign each package addressed from the Orion Kendal team as I want to sound as professional as possible, little do they know there is only one member of the team.

Some things work, and some don’t, as long as you’ve tried everything in your power to try and make it work, you can leave it alone and sleep at night dreaming of another development or approach that could better your idea. ■

You can find Orion Kendal at www.orionkendal.com or www.facebook.com/orionkendal

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ECOSYSTEM

TeenBusinesses CometoLife

Young Enterprise CEO Terry Shubkin shares some of the latest business ideas to come out of The Lion Foundation Young Enterprise Scheme.

THERE ARE ALMOST 3,500 students completing ‘The Lion Foundation Young Enterprise Scheme’ in 2016. All of these students have formed a team, established a small business and are bringing a new product

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or service to the market.

From dog treats to designer clothing – the YES students of 2016 are an unstoppable force. Here are just three examples of what our student entrepreneurs are creating.

Granville Street is a high-end clothing company. They are selling t-shirts which have all been inspired by artwork from children living at Ronald McDonald House. Along with the tee, customers also receive a card displaying the child’s original drawing, as well as the story as to why they live in Ronald McDonald House. The team, which is from Hutt International Boys’ School, is donating 20% of all profits to the charity. www.granvillestreet.co.nz

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Granville Street is a high-end clothing company. They are selling t-shirts which have all been inspired by artwork from children living at Ronald McDonald House.

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Granville Street Clothing

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TukiTuki Thunder Created by Havelock North High School students, TukiTuki Thunder is a spicy take on the NZ classic, tomato sauce. It’s aimed at consumers looking to add some punch to their burgers, fish and chips and any other meals that suit tomato sauce. The students have pitched the product as an alternative to imported sweet chilli sauce. “It’s spicy but not too hot. Everyone who has tasted it so far loves it,” says CEO Tim MacPherson.

The first batch made 1140 bottles, over half of which were sold within a week.

The bottles are 300ml and retail for $10 each. www.tukituki-thunder. myshopify.com

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Ruff Tucker Four Iona College students are turning their love of dogs into a business by making dog treats. The students take meat that is deemed unsuitable for the abattoir and turn it into vet-certified, beef jerky for dogs. Their business is reducing waste and increasing sustainability, with their product used on farms to train working dogs. The Jerky retails at $10 for a 150g bag, and the packaging is recyclable. www.ruff-tucker.mystorbie.com The Lion Foundation Young Enterprise Scheme (YES) offers Year 12 and 13 students the chance to set up and run their own business. The programme is offered nationwide by Young Enterprise Trust and lets students learn valuable business skills before they leave school. ■

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INVESTMENT CORNER

9Alternatives for Raising Capital ONCE YOU HAVE decided whether your business needs money to expand, the next question is how to best do that.

And there are many, many different ways.

Methods like crowdfunding attract a lot of attention because it’s the latest and newest and attracts the social media buzz. But traditional methods may still be a better fit.

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Personal savings

Family and friends

Personal savings allow you to keep full control of your business – meaning your shareholding isn’t diluted.

“Bootstrapping” with private funds is something just about all company founders have needed to do at some stage.

One step beyond your personal resources are the resources of family and friends.

They know you, they can see your passion, and they may back your idea on more favourable terms than those more removed from you.

It’s riskier than raising outside capital because it’s your money at stake, but because of that, you’ll probably be more careful. Doing more with less is a valuable discipline, even once your venture has grown far beyond the need to bootstrap. Another disadvantage is bootstrapping may slow down your growth; sometimes you do need money to grow rapidly, and if your personal resources are not large, your frugality may be a hindrance to your venture’s potential.

Always put terms into writing.

Just because you have a close relationship with family and friends doesn’t mean the agreement can be too informal. Even if they don’t insist on it, you should.

Perhaps your family or friends think of a cash contribution as a gift, more than an investment – if that’s the case, that’s fine, but make it crystal clear what (if any) shareholding they gain.

Still, you do need to show some commitment. One of the first questions that outside investors will ask is: “how much have you personally invested?”. Your answer shouldn’t be “nothing”.

Also, consider the worst-case scenario and whether you and they are prepared to go through that. Losing the capital of financial investors will not be a fun experience, but losing the money of family and friends can be downright miserable if it ruins relationships. Can you handle that prospect?

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3 Government grants Generous government grants are in place to help foster entrepreneurship and jobs.

In my opinion, they are the most underappreciated of all early-stage company financing options. They are often overlooked as founders find it difficult to navigate all the various programs that are out there; grants can be available from both local and central government, and from many different agencies.

Some programs come with strings attached, and you should make sure you understand these before signing up. But in many cases, government grants are literally non-dilutive free money. The government doesn’t become a shareholder and doesn’t expect you will repay the money in the future.

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4 Bank loan Borrowing money to grow your company costs in interest repayments, but this interest may end up being a lot cheaper than giving up a large piece of equity in your company at a low valuation.

It is rare for companies to get bank financing at the seed stage because they can’t offer enough security for the bank to become comfortable.

Instead, you may be asked to personally guarantee the loan against other assets you have (such as your house).

Personally securing a loan means you’re effectively doing the same thing from a risk point of view as using your personal savings – in both cases, the loss in the event of failure is yours to bear.

Whether you are comfortable with this or not depends entirely on you.

5 Co-founders Any time a company is founded by more than one person, different founders bring different things to the table; you can have a programming co-founder, a marketing co-founder, a business-development cofounder… and you can have a financial backer as a cofounder too.

Those who contribute money instead of day-to-day work are known as ‘silent partners’. However, the best silent partners in early-stage companies are not silent!

The best silent partners will help by determining the strategic direction. Or maybe they’re half-silent, working on the business part-time, but contributing extra capital. The possibilities are only limited to what is acceptable to all parties at the time of the company’s foundation.

6 Incubators/accelerators Depending on the quality of the program, the experience of being in an incubator or accelerator statistically increases the chance of a startup surviving. Many founders find the environment of being around other start-ups to be invigorating, and these programs tend to facilitate a lot of learning in a short amount of time.

Incubators and accelerators usually require founders to apply and commit to relocating themselves from the premises for a set period. For some, this can be disruptive to operations.

The amount of capital they can offer is usually quite low, and companies needing several hundred thousand dollars to expand already-proven businesses will need to look elsewhere. But incubators/ accelerators can provide can help get a ‘foot in the door’ with financial investors who have deeper pockets.

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Weigh those options that are open to you carefully – and always remember that which one you choose will have a big impact on your business beyond the money you raise

7 Financial investors Once ideas are proven, models are tested, and customer interest is engaged, you may be ready for ‘angel investors’, ‘venture capital’ or ‘private equity’ – specific terms for a more general category we can group together as ‘financial investors’.

Before approaching financial investors, you should understand how much money they tend to invest in each company. Many are simply not interested in smaller deals – if

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they’re used to investing $10 million at a time, and you’re seeking $10,000, you won’t get very far. Basic information such as this, along with their past investments can usually be ascertained from their website.

Financial investors reject the vast majority of companies that come through their door, do deep and time-intensive due diligence and negotiate hard on valuation and terms.

On the upside, the companies they work with gain a valuable partner, who will contribute much more than just their money.

9 8 Rewards crowdfunding Rewards crowdfunding does a great job of validating that your product has demand, and raising money to make it happen without getting into debt or giving up a stake in the business.

But rewards crowdfunding is far from easy. Anyone can launch a Kickstarter campaign, but not anyone can close one with a meaningful amount of money raised. When you hear of companies raising hundreds of thousands, or millions, through rewards crowdfunding, remember that these are the exception and not the rule. You’d do well do get advice from campaign managers with a track record.

Equity crowdfunding Equity crowdfunding looks and feels like rewards crowdfunding, but with a significant difference. Those that pledge become owners in the company, rather than buyers of a pre-ordered product. Equity crowdfunding gives substantial publicity benefits, can give a company a large number of strong shareholder advocates, and tends to raise more money than rewards crowdfunding deals.

Equity crowdfunding is a lot of work, but this process in itself is great for strengthening company governance and having a lot of people provide feedback on your business model.

Not every one of these forms of financing will be open to every company. But weigh those options that are open to you carefully – and always remember that which one you choose will have a big impact on your business beyond the money you raise. ■

Nathan Rose is an experienced investment banker, and offers services in financial modelling, building pitch decks, and capital raising analysis for entrepreneurs and small business. Find out more at www.assembleadvisory.com

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PARTING SHOT

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Entrepreneurs must be willing to be misunderstood for long periods of time

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-Jeff Bezos, Amazon

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