Jay Sachetti joined Jeff O’Brien, partner at Husch Blackwell and Dyanne Ross-Hanson, president of Exit Planning Strategies talked about the market for mergers and acquisitions, exit planning opportunities for companies that don’t end up for sale and how companies can maximize their eventual sale price during an early October panel at the first Upsize on Tap event at Summit Brewing Co. in St. Paul.
When the state Legislature passed a law requiring employers to provide paid leave and safe time for employees, Justin Bieganek started hearing differing details from friends, colleagues and peers.
Tom Salonek,
Intertech:
651.994.8558
ts******@*******ch.com
www.intertech.com
DURING THE LAST 30 YEARS, nearly all (net) new U.S. jobs were created by startups. Ironically, though, there are 1.1 million fewer self-employed Americans today than when the Great Recession began.
According to the Bureau of Labor Statistics, the most severe losses have been among the one third of the self-employed who head corporations. In December 2007 there were 589,000 more incorporated self-employed Americans than there are today.
What gives? Have we lost our ability to innovate or to take a calculated risk? I’m not sure why fewer people are starting their own companies, but I do know something about founding and running a successful startup. Running your own operation takes a tremendous amount of work and time, but it is one of the most satisfying things you can do in your business life.
My company was founded 20 years ago in a spare bedroom of my old apartment. It was a lean operation, to say the least, but I hung in there and today Intertech is one of the fastest growing small businesses in the country. Today we employ 60 Minnesotans and work with hundreds of wonderful clients in the state and around the country.
None of it would have been possible, though, without adhering to some very basic principles. Here are the five “secrets” I consider most vital for any new startup:
In my company, which provides software training and consulting services, putting money into technology is most important. After all, how can we train other developers on the latest technologies if we do not use them ourselves? How can our clients expect cutting-edge IT solutions from us if we do not continually upgrade what we offer?
If your startup provides marketing services, maybe your spare dollars should go into training your staff on the latest integrated marketing strategies. If you run a coffee shop, investing in the very best beans may be the way to go. In other words, only spend discretionary funds (which most likely are in short supply!) on things that help your company gain a competitive difference.
For example, when I started my company, I didn’t waste a penny on frills like office furniture. It’s funny to think about now, but I actually made my first office desk out of 2x4s. It was about six inches too high for my chair. Not wanting to waste money on a new chair, I put two phone books on the chair to make it high enough for the desk. Meanwhile, I was one of the first technology consultants in the Twin Cities to have a laptop.
No matter how brilliant your product or service, it doesn’t mean a thing without paying customers. In the services world, this means building a book of business. In the product world, it could mean finding distribution channels or selling your product yourself.
Those of us in the technology space easily can lose sight of this important principle. We can get so excited about developing our service or product that we fail to neglect the equally critical role of sales and marketing support.
Of course, if you’re like most entrepreneurs, you’re probably trying to do it all yourself or with an extremely lean team. The human tendency is to only do the things that come naturally and to engage in “magical thinking” about everything else-if you ignore something it still (magically) will get done or cease to matter. Don’t believe in magical thinking, particularly around something as critical as building your customer base. You must find a way to do it all.
Back in the early days, I would carve out time during regular business hours to make cold calls on my service. I literally opened the Yellow Pages and “dialed and smiled” for an hour each day. I’d “make up the time” by working later at night when client prospects were at home and couldn’t be reached for a sales call.
Hiring employees is one of the most cash- and time-intensive aspects of running your own business. Hiring someone who isn’t a good fit can cost you customers, not to mention the lost time and aggravation involved in letting someone go and then finding a replacement.
My startup advice is to try working with all potential employees on a part-time basis before hiring him or her as a full-time employee. I worked with three potential employees on a part-time basis before I found my first full-time employee. I needed to know that whomever I hired would be willing to go the extra mile on a regular basis, which leads me to principle No. 4.
In the beginning of any venture, you only have total control over two things: your attitude and your hours. It goes without saying that you must have a positive attitude. You also must be willing to work long hours and sacrifice time with family and friends.
While couples therapists might not approve, my first wedding anniversary “dinner” was a 15-minute takeout meal. It wasn’t the most romantic occasion, but I was working hard to hit a crucial deadline. Since the business has become successful, I have been able to make it up to my wife. (I think she’s forgiven me!).
There’s no substitute for being frugal and watching expenses. When looking at profitability in a startup, or any firm, the impact of saving money is a factor bigger than selling. For example, consider a lean startup with a 2 percent net profit (for every dollar earned, two cents are profit). For profit, this means the impact of figuring out a way to save one cent is the same as earning 50 cents. So keep your eye on every expense, no matter how seemingly inconsequential.
The little things really do add up.
