The Women Entrepreneurs Blog @ Simon

The Business of Fashion

Andrea has always been interested in fashion so it’s no surprise that when she started a company it was fashion-related. Andrea is only 23 years old but she is the proud owner of Studio 28 Couture, a website where consumers can design their own dresses and then have their one-of-a-kind pieces tailored to perfection by Andrea’s expert seamstresses.

Andrea started the business in February 2007 when she was just a junior in college and nope she wasn’t studying fashion, she was an Optics major at the University of Rochester. Andrea had few resources and contacts but she knew she wanted to start a business. Studio 28 Couture was the perfect answer. She could draw on her html coding skills to design the website, custom-made dresses meant there would be no need for inventory and best of all the business was in line with Andrea’s interest in fashion.

Web tip of the week – capitalize well

Most often the greatest challenge facing the entrepreneur is a ready source of capital. No doubt you have scoured all of the available sources and have come up short to launch your enterprise.

In today's severe economic environment, borrowing from a commercial bank is going to be even more difficult. It will be hard to secure an uncollateralized loan even if you pledge receivables and inventory. You may have to pledge stock and most likely, sign personally for any loans.

Don't be surprised if your spouse is asked to sign as well and if you have a partner, she/he will be asked to sign personally. A bank note in that form will often permit the bank to pursue either partner to collect on the loan beyond the corporate entity.

In a nutshell, try not to launch the enterprise until you are capitalized to reach specific hurdles.

Make sure you don’t lose the lesson

I run the school magazine – the World According to Simon (WATS) – and let me tell you, “it ain’t no walk in the park.” Don’t get me wrong, I love the magazine to death but producing it definitely isn’t an easy task, especially since we increased frequency from quarterly to monthly. That being said, I wouldn’t change a thing about the experience because it has been so educational from an entrepreneurial perspective. These are some of the lessons I’ve learnt during my time running the magazine:

Choose your team very wisely. These are the people who will support you. They should be excellent at what they do, very committed and complementary to each other. If they aren’t, you will find yourself overburdened with work and putting in longer hours than you expected.  Choosing a great team requires evaluating people on what they bring to the table and forgetting relationships like friends, family, significant other etc. In re-organizing and expanding the WATS team I had to pass over friends who could do a reasonable job for persons who could do an excellent job.

Make sure you have excellent time management skills. There just aren’t enough hours in the day so you better know how to effectively manage the ones you have. I am currently doing three courses, working on this blog, working at the school writing center, managing a magazine, producing a newsletter, helping to run the entrepreneurship club and still working on my business plan. Beyond these duties there are still breakfast, lunch and dinner events to attend as well as guest lectures. Of course you can’t work all the time so I still need to hang out with my friends. My appointment book and Outlook calendar have become my greatest allies. They help me to effectively manage my time so I don’t break commitments left, right and center.

Have a “can do” attitude. Something unexpected will always pop up - someone can’t complete an article on time; someone can’t find the photograph you wanted; someone can’t interview the person you wanted or someone can’t lay out the magazine. As an entrepreneur you’ll have to put out lots of fires so you better think you can handle them. If you don’t, you’ll spend too much time worrying and complaining instead of looking for ways to rectify the situation.

Web tip of the Week – "Don’t be afraid to talk about your idea"

In my entrepreneurship class, we often have to get up in front of the entire class and talk about our ideas. You may think it’s absolutely crazy to tell an entire classroom full of people your idea, but it’s really not. These exercises have three great benefits:

• They force you to express your idea very succinctly and communicate it in a way that people can   easily understand. If they aren’t getting it, then maybe it doesn’t make a whole lot of sense or maybe you aren’t quite clear on what you want to do.
• You get to listen to if your idea sounds like the craziest thing in the world. It’s quite easy for things to sound normal in your head but completely insane when they escape your lips.
• You open yourself to getting some great feedback. Telling your ideas to others can help garner some new perspectives that can help you develop your idea even further.

So, next time you’re thinking of holding your idea close to your chest just consider all the great benefits that can be derived from sharing. And for those of you worrying about people stealing your idea remember one thing – ideas are simple, it’s the execution that’s the tough part.

Belonging to the Entrepreneur's Club

You want to be an entrepreneur and wonder if you have what it takes. What it takes is the incredible desire to belong to one of the most dynamic, thrilling and exclusive clubs in the world.

Getting into the club is easy. You have to start a business, any business, and you have to find other organizations with other business owners to introduce you to other business owners. Sounds reasonable, sounds simple. Not so...this club is different from all other clubs. Let me explain.

Like the game of golf, it's easy to get started but it isn't very easy to stay with it and practice the way you should. So, too, with this club.

Anyone can start a business and anyone can meet other business owners, but the real members of the club share some incredible experiences. Conversation is fast and exciting. The learning curve is steep. It's a great place to belong but best of all, the members become mentors to each other. Every member understands and wants to help the other person succeed.

Sure, you think the competition would be out for the kill, but in the entrepreneur's club, every member knows and shares the same world and wants to share their knowledge.  Of course, to be a member you have to accept the pros and cons of the membership...

What’s in a name?

Well, a whole lot, really. Having a unique and distinctive business name is one of the best ways to stand out in the marketplace. This especially rings true if you operate a business exclusively through the web where a memorable brand is essential not only to help distinguish your business from the millions of other businesses operating on the web, but also to ensure that first-time customers looking to return to your site can find your company easily.

In conceiving a business name many people gravitate toward generic terms that are literal representations of the product or service being offered (such as AUTO INSURANCE CORP. for automobile insurance services) or descriptive terms that describe a feature or characteristic of the product or service being offered (such as RAISIN BRAN for cereal). Despite the allure of built-in brand marketing, from both a business and legal perspective, these types of business names are what business owners should avoid.

Avoiding generic and descriptive business names may seem counterintuitive. Why wouldn’t you want a name that can sell itself when a prospective customer is searching the yellow pages or the web for your products or services? From a practical standpoint, generic and descriptive business names are troublesome because the common terms that comprise them likely are included in countless business names and promotional materials, thus preventing you from distinguishing your business in the marketplace. 

Do You Have What It Takes?

In business, there are no guarantees. There is simply no way to eliminate all the risks associated with starting a small business- but you can improve your chances of success with good planning, preparation, and insight. Start by evaluating your strengths and weaknesses as a potential owner and manager of a small business. Carefully consider each of the following questions:

• Are you a self-starter?  It will be entirely up to you to develop projects, organize your time, and follow through on details. 


• How well do you get along with different personalities?  Business owners need to develop working relationships with a variety of people including customers, vendors, staff, bankers, and professionals such as lawyers, accountants, or consultants. Can you deal with a demanding client, an unreliable vendor, or a cranky receptionist if your business interests demand it? 


• How good are you at making decisions? Small business owners are required to make decisions constantly--often quickly, independently, and under pressure. 


• Do you have the physical and emotional stamina to run a business? Business ownership can be exciting, but its also a lot of work. Can you face six or seven 12-hour workdays every week? 


• How well do you plan and organize? Research indicates that poor planning is responsible for most business failures.  Good organization of financials, inventory, schedules, and production can help you avoid may pitfalls. 


• Is your drive strong enough? Running a  business can wear you down emotionally.  Some business owners burn out quickly from having to carry all the responsibility for the success of their business on their own shoulders. Strong motivation will help you survive slowdowns and periods of burnout. 


• How will the business affect your family? The first few years of business startup can be hard on family life.  It's important for family members to know what to expect and for you to be able to trust that they will support you during this time. There also may be financial difficulties until the business becomes profitable, which could take months or years. You may have to adjust to a lower standard of living or put family assets at risk in the short-term. 

Why do small businesses fail? 

Web tip of the week - Get a mentor

Last academic year, I decided I was going to develop my magazine publishing idea into a full-blown business plan for the Mark Ain Business Model Competition. I knew the editorial side of publishing but certainly was no expert on the managerial side. Luckily I was able to meet David Mammano, who became an invaluable mentor.

David owns Next Step, a magazine that helps kids transition from high school to college. The magazine has circulation rates of over a million and readership throughout the entire USA. David was able to help guide me through my plan and open my eyes to opportunities and difficulties I had never even thought of. He was quite instrumental in helping me gain a solid understanding of the magazine publishing industry.

I therefore encourage you to get yourself a mentor when starting your business. This person can offer insight on your industry as well as broaden your perspective with regard to your idea. You need someone to support you but keep you grounded and a mentor is definitely great for this.

You Need a Plan

Here at the Simon Graduate School of Business, one of the courses I teach is Entrepreneurship 423, otherwise known as "the business plan" course. At the Simon School our research has revealed that ten years after graduation, approximately one half of our graduates migrate into their own business or some form of entrepreneurial venture.

While not a required course, it is usually a sell-out as entrepreneurially inclined students recognize the importance of knowing how to prepare a business plan. The value of a solid, well conceived business plan cannot be overstated.

All businesses require capital to begin the venture. Whether you are funding the venture privately or soliciting funding elsewhere, the business plan provides the reader with the required information that is critical to understanding many aspects of the business.

The authorship of the plan forces the creator of the business to examine many of its elements by thinking through the process and articulating it on paper. It is designed to detail all of the major elements of the product or service as well as the financial implications, needs, start-up capital, return on investment and income projections. No one, other than a delirious relative is going to advance you any significant amount of money for your venture without having a thorough review of a business plan.

Simply put, a business plan is expected when asking for funds to invest in a new business start up.  A well conceived plan answers most of the questions an investor will have. If there are no outside investors, there is great value in writing the plan for yourself, simply to chart the course for your venture.   

A Dash of Passion with Michelle Robson: Part II

On Monday, we shared the start of the inspiring Michelle Robson story...please visit our Monday post, and then come on back as we conclude the story of EmpowerHer.com...

Fortunately, a firm called Mita Group from Washington DC, a company specializing in website design and development, happened to stumble upon the site. They emailed her expressing their interest in having a meeting regarding her website’s potential. “Three of them flew out to meet me on their own dime,” said Michelle. And they told her that her tiny website could potentially be worth over $100 million.

At this point Michelle decided to seek the advice of someone more knowledgeable about the technology industry. Through personal contacts she was able to get Mita’s proposal in the hands of Shahi Ghanem, former President of DivX, one of the world's leading developers of video compression, security, and distribution technologies, and former CEO of Brickfish, a networking company that regularly hosts competitions in art and design.

Ghanem called her immediately and asked her to fly out to meet him and an attorney the next day. They thought she had a really interesting idea which held great potential if executed correctly.