Smallbiz Mag by Fetish Creative Design

small biz GO GETTERS VISIONARIES Start ups ENTREPRENURES

FOR THOSE WHO DREAM BIG

KSHS 100 | FEBRUARY 2008 | ISSUE 1

Branding your business Building a website that works Building a website that works

Kinuthia Murugu My passion for the young entreprenure

Thinking beyond loans Funding for young entreprenures

“Many a small thing has been made large by the right kind of advertising” Mark Twain

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Contents Get some - inspiration, motivation, knowledge -books -products -ispiration article

Profile

Interview

Coverstory

Can young entreprenures get funding?

Getting started -starting the biz the idea location financing

Finance - business and personal finance -loans -tax -credit cashf low personal finance

Sales and Marketing - promoting your business sales branding advertising etc

Start up

A brilliant start up that is experiencing growth

Leadership

leadersship tips for entreprenures./ management

Technology

internet computers communication new products

Leisure - entertainment and light news events humour travel and entertainment

www.smallbiz.co.ke | small biz magazine | March 2009

publishers’s rant

Welcome to the prototype

his is the prototype of Small and Medium Business magazine. Its meantto be used for test marketing and soliciting for finance. Advertisements in this issue are for demonstration only.

Small and Medium Business Magazine is a bimonthly publication that serves as a source of information to help small business owners run their businesses as well as stay abreast of new developments and trends in small business management on their behalf. This Magazine highlights and explains ideas and technologies that help entrepreneurs define what is success, what is important in the end, in the beginning and now. It aims to serve as a valuable resource to small business owners to help them grow and succeed

Jackson

The team Publisher

Layout And Design

Editorial Advisory

Editor

Advertising Coordinator

Phoptography

This publication is published by Fetish Creative Studios Mobile: 0723 616 616 fetishcreative@gmail.com fetishcreative.biz

Circulation

All material publshed in this magazine is copirighted.

Jackson Ndung’u

Writers

John Doe Jane Doe

Raphael Khisa

Creative Director

Jackson Ndung’u

Nobert Weku

John Doe

www.smallbiz.co.ke | small biz magazine | March 2009

Reader speak

Have your say!

e would love to here from our readers. we believe by listening to you we will be able to prepare a better publication for you our leader.

You can express your thoughts, concers, and suggestions to the editor by email at editor@ fetishcreative.biz. Only afew letters will be published in each issue.

www.smallbiz.co.ke | small biz magazine | March 2009

Coverstory

Can

Young

When customers are few, earnings are scarce and business assets are immaterial, it takes energy and creativity to locate the necessary funds.

Entrepreneurs Get Funding?

www.smallbiz.co.ke | small biz magazine | March 2009

When it comes to bank loans, you're required to have a good credit history, submit a personal financial statement, and sometimes make an equity investment in your business--all of which may not be easy for most young entrepreneurs to accomplish.

ll entrepreneurs have to overcome hurdles when it comes to finding capital for their new business. When customers are few, earnings are scarce and business assets are immaterial, it takes energy and creativity to locate the necessary funds. And these challenges are heightened for entrepreneurs in their 20s, who are often involved with their first formal business venture or just out of school with limited work experience. In previous columns, I've advised entrepreneurs how to get bank loans guaranteed by the SBA, how to make a "kitchen table pitch" to relatives and friends, and how to approach angel investors. Much of this advice applies equally well to young entrepreneurs; however, there are typically a few extra hurdles that make these sources of financing more difficult to attain for the younger generation of business owners. Some of this difficulty is simply perception, but some of it is a reality. When it comes to bank loans, you're required to have a good credit history, submit a personal financial statement, and sometimes make an equity investment in your business--all of which may not be easy for most young entrepreneurs to accomplish. For example, a few stains on your credit report from late payments in college could hurt your loan application. And since most twenty-somethings don't own a home or have much equity built up, relying on home equity lines of credit is also not an option. So the fallback position for many young entrepreneurs is to get bank financing in the form of credit card debt. As I've written in previous columns, this is a dangerous path to go down if your business is in its startup stage and your earnings are unpredictable. Instead, I would recommend getting a debit card rather than a credit card for the first few months of business startup until you're confident that you can forecast earnings and until you develop the habit of making your payments on time. I'd also caution young entrepreneurs from using more than $5,000 per month on their debit or credit card. Anything over that will put you in a different risk category with most credit card companies and, if you end up in delinquency, could really impact your ability to get future financing. Financing from relatives and friends is also a bit more difficult to obtain for twenty-somethings rather than thirty- or fortysomethings with more extensive networks. Typically, I hear www.smallbiz.co.ke | small biz magazine | March 2009

young entrepreneurs tell me that their "family and friend" circle consists of their parents and a handful of close friends--all of whom are either too poor or too uninterested in funding their business venture. My advice for these entrepreneurs? Open your mind and expand your circle; think about all the different people you know, including friends of friends, who could help fund your business. Many of the country's most well known businesses, including Atlantic Records, Walmart and Subway, were funded after the entrepreneur expanded his financing circle beyond his parents. The founder of Atlantic Records, for instance, landed a loan from his family dentist! Private investors, or so-called "business angels", are more likely to invest large sums of money with an experienced business owner than with a young entrepreneur. However, there are some business angels who prefer to spread their wealth in smaller investment amounts to young entrepreneurs with promising ideas. So raising $25,000 from business angels is a very achievable goal for most twenty-somethings with a good business concept and solid business plan (though raising $100,000 would be considerably more difficult). When raising money from high-net-worth investors, young entrepreneurs should aim to pull together small rounds of funding in succession (for instance, $100,000 to $500,000 per round) rather than trying to complete their total capital raise in one fell swoop. Fair warning: It takes longer to close smaller investors than larger investors mainly because the investment isn't a very high priority for the investor (even though it might be your highest priority). One well-regarded organization that teaches younger entrepreneurs about small-business financing is the National Foundation for Teaching Entrepreneurship. Their website has some good books on the topic of youth and entrepreneurship, many of which are written by their founder, Steve Mariotti, who is a guru in this field. The Entrepreneurs' Organization, formerly the Young Entrepreneurs Organization, is a great networking resource with more than 6,000 members and 120-plus chapters worldwide. Finally, I'd also recommend spending some time on the SCORE website to get financing advice from more experienced entrepreneurs who've lived through the ups and downs of life as a young entrepreneur.

getting started

Confessions of Serial

Entrepreneurs I It takes a special kind of person to delve into the wilds of business startup. It takes an even more driven person to start business after business. Why do serial entrepreneurs do what they do?

t's hard to quantify how much of their souls entrepreneurs offer up in exchange for bringing a company to life, but for most business owners, a one-time transaction is quite enough. Serial entrepreneurs, though, seem reluctant to stay on-board for the easy part, preferring to hand off the finished product and start over again.

A symptom of ADD? Major commitment issues? The real answer is simply this: Serial entrepreneurs love to start businesses, and they're really, really good at it.

www.smallbiz.co.ke | small biz magazine | March 2009

Stuart Skorman, 60, is in the middle of launching Clerkdogs. com, a concept that combines human intuition with web technology to create the ultimate movie recommendation engine. Although the economic environment isn't in his favor, his extensive experience should be a powerful ally: This is his sixth startup. Before striking out on his own at the age of 36, Skorman was a senior executive at Bread and Circus, now Whole Foods. "I was fighting so much with the owner . . . and from that, I got the courage, or craziness, to start." Until then, he says, his own perceptions were holding him back. "Successful serial entrepreneurs don't make decisions based on emotions like fear, greed or anger--only logic. Because I'm an extremely emotional person, I have to work extremely hard to make logical decisions." Skorman points to several motivators throughout his entrepreneurial career. "I feel a need to prove myself," he says. "I have a lot of energy. I need a lot of stimulation, and for me, this means starting businesses that I feel will make a difference." He's definitely done that. Among his accomplishments are Reel.com, which sold to Hollywood Video for $100 million, and Elephant Pharmacy, acquired by CVS Pharmacies in 2006. Even failure--losing $20 million on dot-com bust Hungryminds.com-didn't deter him from starting over again. "I deserved it," he says. "So I took a year off and saw the world with my wife." Although Skorman devotes himself completely to each of his ventures, he does so knowing he will eventually have to give his companies up. "I have mixed feelings about it," he says, "but I'm an inventor, and I'm only good at that part. I'm the creative guy you want to start with, but I'm not the management guy you want to run it." Judy Johnston, 47, is six years into running her third startup. Like Skorman, she left behind a high-paying position in corporate America to start her own business.. At Hewlett-Packard, Johnston was frustrated that her proposal for a children's printing kit wasn't gaining any traction, so when a friend suggested they go into business themselves, she agreed. "It had never occurred to me before to start my own business," Johnston recalls, but with very little fuss, she quit her job, tapped her life savings of $50,000, and founded PrintPaks (which she sold to Mattel three years later for $26 million).

Though she knows most people may not find the decision easy, she says it helps for entrepreneurs to be "addicted" to productivity. "I'm very comfortable with having a long to-do list, which cannot possibly get finished, but that I can attack daily. That makes me feel good." Blue Lake Publishing, which Johnston founded in 2002, is a company she hopes to sell in the next five years. Her children’s magazine, Tessie and Tab, will eventually need a video program, she says, but that’s for a successor to figure out. “I know it has to be done, but somebody else needs to own the company when it happens,” she says. “There’s only so far I can take it, because I’m not motivated by just making more money. I’m not qualified or interested in running a really big company.” Blue Lake will likely be Johnston’s last for-profit startup, but not her last startup endeavor. “I want to do something that doesn’t involve having to return capital to investors,” she says. Nonprofits are still fair game. Dan Steppe, 66, is the director of the Wolff Center for Entrepreneurship at the University of Houston’s business college. Since he arrived five years ago, the program’s enrollment has jumped from 35 students to more than 3,000. While certainly a great achievement, it’s hardly surprising for a man who founded seven profitable business ventures, ranging from an oil trading company to the Southwest Bank of Texas. Steppe interacts with entrepreneurs daily, and the common thread he notices is curiosity. “To entrepreneurs, the world isn’t a big threatening place. They tend to understand by education or experience what is really going on,” he says. “Even when they don’t like the situation, they’re able to act without fear.” A serial entrepreneur, he continues, doesn’t see a difference between the real estate business, the oil industry or teaching. “It’s a puzzle to unravel, and an opportunity to see if you can interpret the market the right way. I don’t run away from challenges, I kind of run to them,” Steppe says. “It is serious because you have employees, but at the same time, I always think we can do it.” In fact, hearing Steppe recount his resume is like listening to a sing-along, where one easy decision led naturally to the next, and business opportunities “cropped up” at serendipitous moments. It’s as if from the moment he left his post at Exxon for the wilds of entrepreneurship, there were contacts willing to help him, and clear entry and exit signs posted along the way. Most people would probably not have encountered the same prospects, but to serial entrepreneurs, these things seem instinctive. Steppe offers a simple explanation for his own successes: “It’s the big picture that interests me. I just liked ideas, so I hired the best people to do what I didn’t want to do.”

Knowing she's now on her second startup and not averse to more, it's easy to assume risk tolerance isn't a problem for Johnston. "I thought, 'At 32, if it doesn't work, so what? I'll earn more money.'" www.smallbiz.co.ke | small biz magazine | March 2009

Get some - inspiration, motivation and knowledge

Read

my book shelf What well known successful business people read

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