Do you have what it takes to be an entrepreneur? REDnews talked to 3 young Kiwi entrepreneurs about the skills you need to turn a bright idea into burgeoning business.
Setbacks, bad news, and unexpected problems are all part and parcel of running your own company, and any budding entrepreneur needs to learn how to persevere in the face of adversity, says Young Enterprise Trust CEO Terry Shubkin.
“If you’re not prepared for the tough times, you won’t push yourself, or your business, hard enough to succeed.”
Rees Vinsen knows this all too well. He started a social media consultancy business in late 2012 as part of the Young Enterprise Scheme at his school. That company branched out to become Adduco Design, which now has 7 employees and “a torrent of demand” – and Vinsen is still a teenager.
As impressive as it sounds, Vinsen says the reality is far less glamorous: “You have to put in a lot of hours and effort, and it’s crap at the start. The first year I made nothing, and I felt ready to give up. I felt terrible. But you have to hang in there and keep working hard. Success is right around the corner – it sounds cheesy, but it’s true.”
Managing the day-to-day expenses of your business is one of the most challenging aspects of entrepreneurship. You must be able to forecast income, budget for taxes, and invest in growth – without running out of cash to pay the day-to-day bills.
“Managing financially is one of the hardest things,” says Anna Guenther, co-founder and Chief Bubble Blower at local crowdfunding platform PledgeMe. Guenther founded her business at the age of 27, and since then it’s raised over $3.3 million for more than 600 projects.
“Managing cashflow and doing budgets; these are things you don’t get taught but you need to think about.”
Learning about the ups and downs of the market started early for Vinsen, who began “playing around with virtual microportfolios” when he was just 12. Now he’s playing with real money, Vinsen says he scrutinises every expense: “Money is the biggest factor to making it work.”
And while cashflow is one of the biggest headaches for start-ups, debt is another problem you’ll need to give serious thought to. Entrepreneurs who borrow money or sell shares may find they are suddenly accountable to the bank or their investors – who may want to have a say in how the business and/or its finances are run.
“I should have been more diligent about debt – I think you should make it non-negotiable to have no debt,” says Jonny Wilson, who began his music tutoring business as a 21-year-old music student with just 15 pupils. Goodtime Music Academy now has 780 students across 3 Wellington sites and his other divisions, Rad Rhythm and NZ Music Missions, are bringing music lessons to an increasing number of Kiwi kids – the goal for this year is to provide free lessons to 1,000 underprivileged children.
Wilson wishes he’d had a better understanding of his company’s finances in the early days: “I borrowed a sizeable amount and I’ve been making my way out of debt over the past few years. I’ll be debt free by the end of the year, but if I knew then what I know now, I could have done it without any debt. Learn how to manage your money properly and stay out of debt.”
The right advice
Guidance and advice are essential to the success of any start-up, whether it’s a formal mentorship or a group of friends full of bright ideas. Wilson doesn’t use professional consultants, and instead goes straight to New Zealand’s best and brightest for advice and inspiration. (He also subscribes to podcasts for advice; his favourites are EntreLeadership and This is Your Life).
“Last week I Skyped Wendy Pye, and I said, ‘I’m in awe of what you’re doing, I want to talk to you and be your friend’,” says Wilson, laughing. “Now we’re going to catch up semi-regularly. Don’t bother hiring someone – just call people who are successful and ask if you can buy them lunch.”
For the team at PledgeMe, finding business mentors, investors, and good advice is simply a matter of reaching out to the crowd. So far it’s worked well, although Guenther says there’s no way she can follow all the advice she receives.
“People love to be involved and that's been powerful, but you can get a lot of conflicting advice,” she says. “You need a bit of a filter, because you are the only one who knows all about your business and you are the one who needs to make the decisions.”
Team building skills
New Zealand is quick to praise its serial entrepreneurs, says Guenther, but someone who can build a solid and successful business is far more valuable than someone who simply has a series of bright ideas.
“People often focus too much on product and not enough on marketing, team-building and delivery,” she says. “They create something golden but they don’t figure out how to deliver it.”
That lack of follow-through is something Shubkin sees in entrepreneurs of all ages, but you need to be more than an ‘ideas person’. Even outstanding ideas will fizzle out without a solid business plan, a structure for growth and a team to implement the strategy and take care of the little details.
A smart entrepreneur will create a pool of talent who can work to turn a flash of genius into a sustainable long-term business.
“We tend to focus on innovation – and don’t get me wrong, it’s really important,” says Shubkin. “An innovative product gets you to the start line, but not past it. You need teamwork and dynamics; you need a diverse team of people who complement your skills. Rod Drury told me he dropped out of Young Enterprise when he was at school – we laughed about it, and I said, ‘You would have had a whole bunch of friends just like you, full of big ideas, and nothing got done’.”
Finally, many of the best entrepreneurs have the kind of try-anything mindset that Shubkin calls ‘the cheeky factor’. It’s the quality that leads Wilson to cold-call his business idols and Guenther to instigate ‘Onsie Wednesdays’.
Innovative entrepreneurs don’t feel bound to the conventional ways of doing business, and love to find ways to disrupt their industry.
“You’ve got to have a can-do attitude and see opportunities, not problems,” says Shubkin. “Like anything, if you want it, and work hard for it, and have some talent, you can do it.”