Startup Tips: 5 Simple Ways To Collect Customer Feedback

Guest Post, YEC, Startups, Statup TipsSteve Jobs is famous for downplaying the importance of customer input, claiming customers don’t know what they want until they’ve seen it. While that philosophy has so far worked phenomenally well for Apple, most products can’t be developed in a bubble.

Even before we built our first product prototype, we spent countless hours speaking to would-be customers to gather suggestions, feedback and input. While most founders see the value in conducting market research in one way or another at the start of the development process, all too often they fail to continue this interaction. Companies should make a point of gathering feedback from customers throughout the entire development cycle — basically as long as you’re in business.

Here are five easy ways to get feedback on your product:

1. Customer Surveys

The most efficient way to garner feedback from customers is through surveys. To ensure the highest response rate possible (usually a typical rate of response is around 5 percent, and 10 percent or higher is exceptional), we recommend keeping the survey to a maximum of 15 questions. Include questions that relate to the overall industry your product fits into and whether or not customers would like to participate in any future product testing or marketing events. We use Google Forms for short questionnaires and SurveyMonkey for more in-depth surveys.

We used information from our latest survey to not only improve our product, but to ask for product reviews, case studies, more in depth feedback calls and of course to gain a larger picture of the space we play in — Google Apps.

2. Support Forums

Support forums aren’t a revolutionary idea, but the most successful forums are highly interactive. Customers should be able to give their input, comment on others’ ideas and see that you and your support team are taking active roles by responding to every single request. We use Zendesk for our forum, as well as ticketing and overall product support.

We’ve already added 15 of the most popular customer suggestions left in the forum to our product and have another 15 slated for development in the coming months. Could we have thought of those 30 ideas on our own? Probably. But ideas are generated a lot faster when you can ask a customer base of 12,000 companies what they’d like to see. Plus, you never have to worry if you’re adding features people will actually use.

3. Let Customers Provide Feedback Inside the Product

To make sure you’re gathering input from customers on an ongoing basis, include an easy way to leave feedback directly within your product. While some companies choose to pop up a review or feedback form on the third or fourth login, we chose to add a feedback window users can view or hide as they please. The widget is set up to track the exact page users leave feedback for, giving us an even better understanding of issues, suggestions and engagement on different facets of the product.

4. Wireframe Reviews

In the earliest stages of product development, we showed wireframes — the bare bones of the product UI — to “trusted testers” using Protoshare and GoToMeeting. Our user experience designer actually gave control of his mouse and keyboard to the tester, giving them a task to accomplish within the application and closely watching how they went about accomplishing said task. Feedback from these initial reviews surfaced several early problems with the product layout, including a very unpopular “edit” icon.

Today, we continue to create wireframes and set up UX and creative reviews for every new feature we develop. Everything from colors, layout and copy are up for criticism.

No matter what your product is, if you’re solving a real problem, there are people out there who want to see it solved too. Comb through user groups and forums to find your first trusted testers. These people should be experts on the area your product addresses and have real experience working with competitive products or their own self-made workarounds. Keep in mind that if you can’t find at least a handful of people willing to help with wireframe reviews, it may be time to take your idea back to the drawing board.

After you’ve released your product and have actual customers walking through wireframes, find a few unhappy customers who aren’t afraid to voice their concerns. Don’t take criticism personally — it only helps to move your product further along.

5. Feature Contests

Feedback has been so abundant that we decided to launch a feature contest. During the month of the contest, 59 feature requests, 155 votes, 87 comments and over 2,500 views were counted. We incentivized our customers to participate by ensuring the winning feature would actually be built into our product before the end of the year.

Participation was so high that we decided to choose not one, but two winners and shared the results with our entire customer base via the company blog, social media outlets, an email newsletter and even through a Google Hangout On Air.

If you make an ongoing effort to gather customer feedback throughout the product development process, at the end of the day, you’re left with better ideas, a more robust product — and a loyal customer base who knows you actually care about their opinions.

David Politis is the founder and CEO of BetterCloud, the maker of FlashPanel, the number one cloud management tool for Google Apps, and the Google Apps resource site, AsktheGooru.com. Follow him @DavePolitis.

The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, the YEC recently launched #StartupLab, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses via live video chats, an expert content library and email lessons.

Where do you go offline to connect with other entrepreneurs and startups?

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Founder Spotlight: Steph Beer, Co-Founder NSight2 Day

StephBeerUsing our consumer-facing platform, 4MeNU, nsight2day helps individuals and organizations truly engage with one another. Using innovative tags, users can share information with their network in context. We call these messages Gems. Follow her @stephbeer.

Who is your hero? 

My grandfather, who is Swiss (this makes sense if you know me).

What’s the single best piece of business advice that helped shape who you are as an entrepreneur today, and why?

Don’t be low-end. This means low margin, but it also means don’t behave badly. The other piece of advice I love is don’t “trade up” when it comes to who you spend your time with. Your friends matter more than ever when you’re starting a business, and just because you meet flashy people doesn’t mean that the originals aren’t worth their weight in gold for you as a person and an entrepreneur.

What’s the biggest mistake you ever made in your business, and what did you learn from it that others can learn from too?

We were a B2B team that tried to build a B2C platform. Stick to your strengths. Also, build a few similar offerings for several different types of client/customer groups and then see how hard it is to sell to each. There are big differences between selling to an individual, a university, and a Fortune 500 company. Each is a unique challenge; you may be better or, um, less well-positioned to sell to them.

sneakertacoWhat do you do during the first hour of your business day and why?

Yoga. Setting your mind straight can make or break your morning.

What’s your best financial or cash-flow related tip for entrepreneurs just getting started?

Always try to pay based on performance and limit all your fixed costs. Try not to sign a lease (that goes for yourself and for your business).

Quick: What’s ONE thing you recommend ALL aspiring or current entrepreneurs do right now to take their biz to the next level?

Stop going to tech meetups (unless you’re recruiting) and start talking to more senior people who have decades of business experience. More pointedly, stop listening to people who have launched successful businesses by “asking my friends from my financial services days to invest.”

There are a lot of people who are professionally/socially well-positioned to win in the startup environment, and their stories aren’t that interesting or helpful to most entrepreneurs. Actually, just avoid the whole “founders cult” to the greatest extent possible (this gets back to staying close with old friends).

What’s your definition of success? How will you know when you’ve finally “succeeded” in your business?

When we have consistent revenue that covers our costs and lets our original investor make his money back (and returns that are greater than or equal to the returns he would have gotten had he put his money into an index fund) — that’s it.

The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, the YEC recently launched #StartupLab, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses via live video chats, an expert content library and email lessons.

EE-FORENTREPRENEURS

How To Avoid Hiring The Wrong Person For Your Startup

Startup Tips, Guest Post, YEC“He sounded so capable in the interview!”

“I just don’t know what happened. It seemed like she had exactly the right experience we were looking for!”

“The whole team loved him, so we just went with it.”

Perhaps you’ve uttered these words yourself, or heard them from a hiring manager who is experiencing frustration and buyer’s remorse when a new hire turns out to be a dud. Hiring someone who fails to meet expectations is a huge headache, especially when it was your job to vet them in the first place.

But there are ways of making sure that you don’t get snowed by someone who is good at making a first impression, but bad at delivering results. Here are the key things to do when hiring that’ll guarantee you never hire a dud again:

1. Make them show, not tell.

After your initial screen of incoming candidates, you should have everyone that you are seriously considering do a trial task that is representative of the work that they’ll be doing if hired. The point here isn’t to get free work done from candidates, it’s to see what they will actually do when presented with certain goals and constraints.

Choose something that takes two to three hours, requires a familiarity with relevant skills, networks, or industry knowledge, and will force them to draw upon resources that they’ll have at their disposal while working for you. Simulate a mini version of their work as closely as possible.

If I were hiring a director of development, I may ask them to a) identify a likely funder of my organization, and b) outline a proposal to see how they organized their approach. If I were hiring a manager of partnerships, I would have them a) identify three new organizations that they think would make good partners for me, and b) ask them to show me how they’d make first contact with these organizations.

Tell the candidates they can ask you questions as they are working on the trial. Good people will nail the project, but great people will hit it out of the park after clarifying a few things with you and asking for guidance on key points.

Have all of the candidates do the same task, so that you’re comparing apples to apples. You’ll find that only the most motivated candidates do the task, and you’ll immediately see who is more thorough and puts time into it. You’ll also see whose judgment is most aligned with your actual work. You can teach skills, but judgment is hard. Design the task to show how good their judgment is.

2. Be painfully thorough.

Everyone likes to ask things like, “What would you do in this situation?” or “How do you think we should face this challenge?” These questions show insight into how a candidate thinks and reacts to your organization’s realities.

Far less popular are the simple, boring, background questions—the grungy details of their past work—that actually illustrate what they’ve been able to accomplish. By the time someone is a finalist under consideration, you should be able to answer each of the following questions for, at the very least, their last three jobs:

  • What were they hired to do?
  • What resources were they given to work with?
  • What challenges did they face?
  • What outcomes did they create, or what accomplishments did they achieve?
  • Why did they leave that role?

If you ask these questions to your top two or three finalists, you will get a much better sense of which of them has actually accomplished more relevant things.

Yes, this takes time. Yes, it can get boring. But until you have a clear sense of these things, you don’t really know what you’re dealing with in their history. It’s easy to assume things about someone’s past; it’s harder to take the time to uncover those details. This is critical information.

3. Be consistent.

Whatever your interview process, make sure it is consistent across all incoming candidates. Choose your interview questions wisely, and seek help on this if you aren’t sure what to ask. Once you have the questions, you should develop a basic rubric—even if it is qualitative—so that scores are at least mostly consistent across interviewers and across candidates.

When you are narrowing in on finalists, you should have them interview with your entire team (if it’s small enough), or at least everyone they will be working with closely. Make sure you give your team members specific, unique questions and rubrics to use, otherwise they’ll likely ask repetitive questions and re-run the same conversations with the candidate over and over—which limits your ability to get new insights and further evaluate how good of a fit that candidate would be.

4. Resist optimism.

The biggest mistake the hiring managers make is being optimistic, hoping that this candidate is “the one” and not objectively trying to determine if they really have the skills and background required to do the job. Making idle small talk, using favorite “oddball” questions (e.g. “If you were a kitchen appliance, which one would you be?”), and spending too much time selling them on the opportunity are all unhelpful things that hiring managers do when they are clouded by optimism and eagerness to hire.

And the opposite isn’t smart, either. Using hardball questions, intimidation tactics, and giving trick questions or tests are equally unhelpful.

The best approach is to be calm, measured, balanced, and consistent. Your gut reaction to people is relevant, but is not substitute for measured due diligence. Take your time and be thorough—you’ll thank yourself later!

Nathaniel Koloc is co-founder and CEO at ReWork, a Colorado-based start-up that connectes talented professionals to hiring managers at for-impact companies. Nathaniel is an 2011 Unreasonable Fellow and a member of the YEC.

The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, the YEC recently launched #StartupLab, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses via live video chats, an expert content library and email lessons.

This huge startup conference is all about startups everywhere else, do you have your early bird tickets?

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image: YEC

Meet The Man Behind NY Dress Startup BlueGala

Bluegala, NY startup,startup interview, Guest Post, YECJosh Weiss is the Founder and President of Bluegala, an online retailer of prom dresses, evening, party, and cocktail dresses. Previously, he worked for Lehman Brothers as a High Yield Credit Research Analyst. Josh graduated from the University of Virginia with a B.S. in Commerce with a concentration in Finance. Follow him @bluegala.

Who is your hero? 

Steve Jobs.

What’s the single best piece of business advice that helped shape who you are as an entrepreneur today, and why?

Match and exceed. Always keep a close watch on your competitors and make sure to match and exceed them in everything they do.

What’s the biggest mistake you ever made in your business, and what did you learn from it that others can learn from too?

When we first launched Bluegala, we placed a large order for lower-priced dresses before doing any research to see if we could actually compete in the market selling them. In hindsight, we should have placed a smaller order and tested the waters with a small PPC campaign. The lesson learned is to walk before you run and test everything.

sneakertacoWhat do you do during the first hour of your business day and why?

Check orders from overnight and go through the previous day in Google Analytics. I do this to keep a handle on what’s selling and if there are any issues. Google Analytics helps me to constantly get a sense of where our traffic/sales are coming from and if there are any red flags causing consumers to bounce off the site.

What’s your best financial/cash-flow related tip for entrepreneurs just getting started? 

Bootstrap your business for as long as you can and try to scale it from there. If you eventually need money, you want the business to be as profitable as possible to get the best valuation, and you want to hold onto the most equity you can.

Quick: What’s ONE thing you recommend ALL aspiring or current entrepreneurs do right now to take their biz to the next level?

Dive into your analytics. If you don’t know what to look for, there are tons of books and blogs that can point you in the right direction.

What’s your definition of success? How will you know when you’ve finally “succeeded” in your business?

I define success as being one of the dominant players (if not the most dominant) within a certain industry or niche. Success is accomplishing what others were unable to accomplish and thriving where others have failed.

I will know my business has succeeded when Bluegala is the go-to resource for social occasion gowns. We have had a lot of growth since our founding in 2009, but there is still a long way to go before we establish dominance in the sector. Each year that passes allows us to learn more and more about what it will take to establish dominance and I am confident we will get there eventually.

The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, the YEC recently launched #StartupLab, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses via live video chats, an expert content library and email lessons.

EE-FORENTREPRENEURS

How To Measure The Potential Of Your Startup Idea

Guest Post, YEC, Startup TipsYou have a business idea that you feel has tremendous potential. You probably got the insight by solving a problem that you had. Brilliant. Most successful companies today were created because of this very insight.

To give you an example, YouTube was founded by Chad Hurley, Steve Chen, and Jawed Karim, who were all early employees of PayPal. According to an oft-cited story, Hurley and Chen developed the idea for YouTube during the early months of 2005, after they had experienced difficulty sharing videos that had been shot at a dinner party.

When you’re solving your own problem or one that you feel is the pain point of a certain target audience, how do you know whether there is a large enough pool of people that face the same problems or challenges that you are trying to solve? If you’re just selling a product, you’re better off creating it and getting it to the market. But if you want to build a business out of it, you need to have a sizeable market for scalability.

So the question is, how do you determine the market demand for your startup idea? Read on for several ways to get the answers you need.

Google

Yes, it can be as simple as looking it up on Google. Haven’t you heard that Google is God? It has most of the answers that you are looking for. So how do you get Google to help you? Use the Google Adwords keyword tool to look for the number of people seeking out what you’re trying to do.

Put the keyword(s) in the search box, select the target country or countries and Google will show you the number of average local and global monthly searches. This is a good indicator of demand.

Minimum Viable Product

Market research and business planning are overrated. The best market research is putting a product out and seeing if people will buy it. The best business plan is to create something great and sell it fast,” says Guy Kawasaki.

Writing a business plan with projections through market research is a sure-shot way to a startup doomsday. Nothing beats an actual customer using your product or service. So how do you get to the customer when you’re at the idea stage and don’t want to spend a huge sum building something they might not want?

Build a minimum viable product or a prototype. The idea is to put out something that offers the core value or your startup or that solves the core problem of your customers.

The MVP could be a PowerPoint slide, a dialogue box or just a landing page. This is something that you can often build it in a day or a week. A prototype can be an actual functioning product with the core features offered.

Share this with your network and see the response. Are people excited to use it? Do they actually feel their needs or problems are resolved by using your product? Is it easy to use?

EE-FORENTREPRENEURSLanding Page

You don’t have a product yet but still want to get customer buy-ins? Then landing pages are your best friend. Create a teaser or promotional landing page, which highlights the core proposition of your startup.

Ask for their email addresses in return for an offer or simply to be updated about when the startup is launched. Here’s a great example of a landing page that does just that. The number of email subscribers will determine how many people are interested in your startup. Try using Launchrock to create your landing page. Or use KickoffLabs.

To increase traffic, one method is to create a Google Adwords and a Facebook marketing campaign. Point the adverts to this landing page to drive traffic. Use Google Search and Network Partners to spread the campaign among a huge number of people.

You would much rather spend a little money to be sure than spend fortunes building a product that customers don’t want.

Crowdfunding

Crowdfunding is an excellent means to get actual buy-in for your product. This concept has increasingly becoming popular with the likes of KickstarterRocketHubIndiegogo launching their platforms on the Internet that bring together startups looking for funding and individuals who are interested in contributing towards an idea or a product.

Apart from securing funding for your startup, you also get to know how many people are actually interested in your product or service. Interested enough to pledge their money. Here’s a list that showcases the most funded projects.

Whatever be your path, make sure you build on something that your customers want. As Kawasaki puts it, “This isn’t rocket science. It’s mostly hard work and luck.

This post originally appeared on the author’s blog.

Rahul Varshneya is a startup coach and the co-founder of Arkenea, an enterprise mobility and cloud solutions provider. He writes on starting up and mobile strategy at http://rahulvarshneya.com/blog.

The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, the YEC recently launched #StartupLab, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses via live video chats, an expert content library and email lessons.

When it comes to communications, startups need the whole package.

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idea image: earlmcadoo.com

Founder Spotlight: Brittany Hodak CoFounder ‘ZinePak

ZinePak, Brittany hodak, Guest Post, YEC, startupsBrittany Hodak, alongside Kim Kaupe, is co-founder of ‘ZinePak, a company that creates custom publications for entertainers, brands, and celebrities. The ‘ZinePak configuration combines a small-format magazine with one or more CDs and exclusive merchandise items together into one engaging, exclusive package. Follow her @zinepak.

Who is your hero? 

My heroes are all the men and women who enlist in the Armed Forces. People tell me all the time that it takes courage to start a business; while that is probably true on some level, it doesn’t even begin to compare to the courage it takes to fight for one’s country.

What’s the single best piece of business advice that helped shape who you are as an entrepreneur today?

“It’s easier to get forgiveness than permission.” This is something my dad said to me for the first time when I was about 13. I remember thinking how profound it was, and how it could work as a “free pass” for just about anything. More than 15 years later, I still live by this mantra every day.

When you’re an entrepreneur, it often means writing your own rules and getting creative in the ways you go about getting things done. Sometimes this means ignoring a chain of command, moving forward on a project without formal sign-off, or any number of other “violations” of the training of otherwise well-meaning soldiers of Corporate America. When given the choice between trying to get something approved the “right” way (e.g. submitting a formal proposal and spending six weeks pitching the same idea to successively senior team members) or the “wrong” way (e.g. happening to bump into the CEO at Starbucks and pitching her the idea over a latte), we always choose the latter.

There is very little that can’t be smoothed over with a heartfelt “oops” email or a nice Edible Arrangement when someone’s corporate feathers have been ruffled!

What’s the biggest mistake you ever made in your business? What did you learn from it that others can learn from too?

One of the biggest mistakes Kim and I made with ‘ZinePak was not hiring enough staff quickly enough to support the company’s growth. In a startup where there isn’t a huge amount of funding, founders are often faced with “the chicken or the egg” scenario of when to expand the full-time employee count. Is it better to hire help in anticipation of new work materializing, or secure the business first and then worry about the man (or woman!) power?

For our first big experience with growth, we chose the latter. The decision led us to experience several weeks in a row where everyone was working 18-hour days just to keep our heads above the water.

Luckily, we were able to learn from the experience. We made the strategic decision to take about eight weeks off from actively working on projects and hire two more full-time team members. This break gave us plenty of time to find amazing support staff and get them totally up to speed before the next wave of projects began.

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What do you do during the first hour of your business day?

As an entrepreneur, every day is different and often unpredictable. I try to spend the first hour of each day catching up on entertainment trades and news and sending quick notes to anyone whose names come up during that reading. For example, I’ve found that early mornings are a great time to send someone a quick note congratulating them on a recent promotion or campaign that’s been covered in the press. I also try to drink at least 16 ounces of water in the first hour of the day, because if I don’t set the pace early I won’t stay hydrated throughout the day.

What’s your best financial/cash-flow related tip for entrepreneurs just getting started? 

Hire an accountant right away! We tried to manage our own books online when we started ‘ZinePak, and we quickly got in over our heads. There are so many things to worry about when starting a business, from product development to lead generation to sales to marking to contracts, etc. — the list goes on and on. Time is a very precious commodity, and it is wise to spend your time on things can’t be easily outsourced to someone else.

Even if you have an accounting background, take the time to find a great CPA or bookkeeper to help you keep tabs on your business. He or she can offer strategic advice about cash flow, growth, and spending, and, most importantly, free up your time to work on closing deals instead of itemizing credit card statements.

Quick: What’s ONE thing you recommend ALL aspiring or current entrepreneurs do right now to take their biz to the next level?

Email three interesting people from your past who you haven’t seen in at least two years and ask them to get together for lunch or coffee dates. Some of the best business connections can come from the sources you least expect. Plus, reconnecting with old acquaintances is almost always a good time.

What’s your definition of success? How will you know when you’ve finally “succeeded” in your business?

My definition of success is being happy, confident, and secure in my own venture. When Kim and I started ‘ZinePak, our paramount goal was to not have to report in to bosses who treated us poorly. We set a definition of success as, “let’s quit our jobs, start a company, and try not to make significantly less money this year than we would if we kept our jobs.”

Two years later, we’ve passed the $3 million revenue mark and sold almost $15 million of product in the United States and 17 other countries. The feeling of success comes from knowing that we’ve built an awesome company and no longer have to answer to anyone other than ourselves.

The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, the YEC recently launched #StartupLab, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses via live video chats, an expert content library and email lessons.

 

Bad ass startup chick Denver Hutt reminds us we’re entrepreneurs not super heroes.

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Startups: How Youth Can Be Your Biggest Asset Of All

Guest Post, Startup Tips, YECBeing a young entrepreneur in business today is exciting. Youth is your biggest asset; you should rock it to your advantage. But how do you overcome the preconceived notions that come with being a younger contender — like assumptions that you’re inexperienced, naive and in for a rude awakening by the industry?

The answer is simple — you turn them into strengths. Everyone always talks about how retaining youthful characteristics like curiosity and optimism is a great way to succeed. Why can’t those who truly embody those characteristics also reap the rewards?

Why Your Age Is Actually an Asset

As a twenty-something Canadian entrepreneur with a funded startup and past experience at a well-known social news company — who was literally thrown into a pit of extremely successful American entrepreneurs — I’ve had my share of challenges and benefits as the new (and incredibly young-looking) kid on the block. People sometimes view the fact that I’m “too young” or “don’t know enough about life” as a flaw, but I actually believe it’s helped me succeed.  When you have no knowledge of the boundaries that exist, you’re able to think bigger; you’re able to be truly and genuinely audacious. That kind of bold, optimistic creativity doesn’t come from being jaded or experienced; it comes from being completely unaware of what lies ahead of you.

Even more so, young people have the fresh ability to learn new skills quickly and retain a ton of information at a time. You can learn a language in a month while you’re younger, but when you’re older, it’s much harder to pick these things up. I try to take full advantage of that, and I’ve seen it happen right in front of me in the tech space. Young people are changing the world through their combination of youth and entrepreneurship. They’re able to establish multi-billion dollar companies because they just don’t see any boundaries, and they can adapt to an evolving landscape quickly.

Young entrepreneurs sometimes tell themselves, “I’m young. No one is going to take me seriously. I don’t have enough money. No one is going to let me do this. I don’t have enough knowledge.” You can solve all those things yourself, without doing anything absurd or fake, like growing facial hair, putting on more makeup or trying to “sound older.” No one ever gets very far by pretending to be something or someone they’re not. The older folks in the room will see right through that, and that’s far worse than being young. Here are three ways to get others to take you seriously — despite your age — while still staying true to yourself:

1. Trust your instincts

Entrepreneurship is inherently instinctual – you’re devoting your life to something unknown and ambiguous. Your decisions and “strategy” are most often a culmination of your basic instincts and parallel, but not directly relevant, data. It’s a very subtle feeling that can be mistaken for many other things – but once you can focus on it, you’ll find your decisions not only for the best, but consistent and wired to your thinking. That intuition, in turn, shapes the vision and culture of the organization you are trying to build. Deviating from your instincts brings unrest not only for you, but among your stakeholders as well.

EE-FORENTREPRENEURS2. Use your youth

Being young isn’t all about age. It’s about curiosity, capacity, and ultimately, your limits. Test them. There might never be a time in your life where you can stretch your mind and your physical capabilities to their maximum without consequence. As a result, you can leapfrog your success, build amazing products, and live life to its fullest while bringing others along with you.

People often ask me, “How has your youth prevented you from achieving certain things?” I almost always view my youth as an enabler rather than a barrier. Many will assume the latter simply because business/experience/age has gone hand in hand in the last decade. But with the Internet, we are no longer operating on a linear curve of growth of knowledge and numerical age. We are now living in the era of exponential knowledge.

In fact, the younger you are, the more likely you will be viewed as innovative. Don’t conceal or hide your ideas – let them flow and mingle with others, especially during the conception stage. Being young is finally a good thing in the consumer web space. Let’s all make sure that we continue to honor the stage that has been set for us, and continue to innovate incessantly.

3. Generate serendipity

If you create your own luck, there is no sense of reliance. I really, truly, believe in people who understand how to build the right relationships,  thrive in the right environments, and believe in their own capacity and propensity to create. The last few years of my life contain a string of events that came from taking a few extra forks along the path of my life — forks where I could have chosen to simply stay still. The doors that open for you may be just the serendipity you need.

For me, being a young entrepreneur is all about asking how I can make things happen by actually executing on my word. Many young entrepreneurs like to talk. I like talking too, but I’d rather show and prove my abilities. The challenges really aren’t challenges at all unless you view them as such. It’s all about perspective.

Brian Wong is the CEO and co-founder of kiip (pronounced “keep”), a category-creating mobile rewards network backed by Relay Ventures, Interpublic Group, Hummer Winblad and others. Kiip has raised over $15.4 million in funding to date and was named one of the world’s 50 Most Innovative Companies by Fast Company in 2013.

The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, the YEC recently launched #StartupLab, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses via live video chats, an expert content library and email lessons.

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5 Tips For Succeeding In An Emerging Industry

Startup Tips, Guest Post, YECWouldn’t it be great if someone would hand you a road map when you decide to launch your own business in an emerging or unproven industry? Of course, that doesn’t happen, but I have found, as many entrepreneurs have, that with a lot of hard work and determination, an emerging industry can become a profitable one. Here are five keys to success I’ve learned along the way while building my digital agency, The1stMovement, in the emerging digital marketing/advertising industry and having the honor of leading it to become one of Inc. 500 “fastest growing companies in America”:

  1. “Fish where the fish are.” Focus on meeting an existing demand instead of creating one. This is one of the most important lessons I learned from going through the dot-com bust while working in Silicon Valley in the early 2000s. It’s far better to address an existing need in the marketplace than it is to create a product or service that you think people need and then try to generate demand for it. I started at a time when I felt like the advertising industry was “craving” technology excellence. So my decision to move from Silicon Valley, with my “geeky” technical background, to Los Angeles, known for its creativity but not so much for technical execution, proved to be a perfect springboard for me to start my business.
  2. Improvise and innovate. Find new ways of doing the same old things. Instead of trying to reinvent our competitors’ products and services, we believe in observing their successes and mistakes, then come up with innovative new ways do it better and more efficiently. In a time when Los Angeles advertising agencies were competing for the attention of big Hollywood Studios by pitching their best “ideas,” we focused our efforts on getting the attention of well-funded Fortune 50 clients like Adobe and Cisco with our technical expertise and track record for getting things done. That “sales pitch” proved to work and we continue to lead with technology, but complement it with ROI-driven strategies and sexy creative for all of our clients.
  3. Adopt the mindset of a bootstrapper. Even if you have millions in funding from outside investors, run your business as though every dime is coming from your own pocket. You’ll quickly find that you’ll be forced to be more creative and innovative in your decision making. Not only will you avoid wasteful spending (another dot-com lesson), but your funds will go much, much further toward meeting your business objectives. Challenges will arise, as they have for us. Right before the recession, we were forced to let go of some staff because I opted not to go for investment. It was one of the most painful professional experiences I’ve ever had to personally go through, but it forced us to re-look at our structure and be nimble and flexible in a tough, unknown economy.
  4. Never forget that execution is everything. Even the best idea in the world is worthless if it just stays on the drawing board. As Thomas Edison once said, “The value of an idea lies in the using of it.” Yes, putting an idea into action takes a lot of hard work, research and testing, and there are obvious risks. But if you execute your ideas with a “bootstrapper” mindset, you will be able to minimize your risks and the payoff could be significantly larger in the long run.
  5. Keep moving forward. Indecision is far worse than making the wrong decision. Fear of failure can be a paralyzing influence when it comes to making business decisions. Yet an entrepreneur and a strong leader can never move a business forward by being indecisive. I have made my fair share of mistakes in my business decision making, but keeping my business nimble, flexible, and most importantly, independent, has allowed us to correct our mistakes quickly and move on.

Entrepreneurs who are starting a business in an emerging industry are like pioneers who are navigating a new landscape where not many people or firms know what they’re doing. But the good news is that the greatest rewards will go to those who are willing to work the hardest, take calculated risks, and believe in their ability to succeed. As the Zen saying states, “Leap and the net will appear.”

This post originally appeared on the author’s blog.

As CEO of The1stMovement, Ming Chan was named as one of the “Top 10 Asian Entrepreneurs in America” by Inc. Magazine and has led the agency to numerous accolades including 3-time Inc. 500 “Fastest Growing Private Companies in America”, 3-time “Best Places to work” in Los Angeles, “Top 20 agencies” in LA & Denver, and 5000% growth in 5 years with his passion for innovation and company culture.

The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, the YEC recently launched #StartupLab, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses via live video chats, an expert content library and email lessons.

We’re using Chicago startup Centup here’s why.

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5 Tips For Growing Your Startup At The Right Pace

Growing your startup, Startup Tips, YEC, Guest PostStartups are often in a rush: bigger, better, faster. I see it all the time: businesses striving to scale, to accelerate the growth of their business as quickly as possible — consequences be damned! Scaling is certainly a goal for businesses at some point, but scaling as soon as possible isn’t the answer. Scaling will require your company to use more resources. If you’re not prepared, scaling too quickly can be dangerous — leading to failure instead of success.

If you haven’t yet found a viable business model that will allow you to acquire customers at a lower cost than the lifetime value of that customer, you simply are not ready to scale. But you can ready your company by focusing on your finances first. Consider the following suggestions to help you to refocus your company development in a thoughtful and calculated way:

  1. Understand how growth will impact your cash burn. Your burn rate is simply how much capital you go through every month. Staying on top of your burn rate is essential all the time, and, perhaps, even more so when you’re considering scaling. When you scale, your cash burn will be amplified. Any issues you have with your working capital requirements will be magnified exponentially. So keep a close watch on your cash-flow statement and a tight rein on your expenses. Bootstrap as much as possible to keep your business lean.
  2. Hire only as needed. When you scale, you will need to expand your staff to support your acceleration. But before you scale, it’s a good practice to get into the habit of only hiring when absolutely necessary. Hiring is a significant cost — not only payroll, but the costs of recruiting, training, retention, etc. To cut costs, outsource as much as possible, especially non-core functions like accounting, finance, and human resources.
  3. Create milestones for your company.  Identify target milestones, create a realistic timeline,  and then manage your cash to those milestones. In some cases, this may mean that you need to raise the cash to match and support these milestones. If you’ve already raised cash or are bootstrapping, you’ll need to reduce your burn rate so you can achieve the milestone before your cash is gone. Once your milestones are set, don’t let them slip. Your main focus must be executing to these milestones.
  4. Get systems in place. Before scaling, make sure you have a solid infrastructure for managing financial processes. How will you manage billing and invoicing on a larger scale? Or, the bigger potential headache of payment collection? If your customer base and earned revenue are still small, that’s when you need to find and establish successful systems and processes.
  5. Plan for cash-flow positive. If you have revenue, create a plan to help you understand how and when you’ll be able to get cash-flow positive. Scaling requires an increase in cash flow. You need to be prepared to match this with earned revenue.

If you think you’re ready to scale, you may be right. But before you press on that gas pedal, ask yourself: are you sure you have a viable business model, your processes are repeatable, and the market is ready? Once you scale, you’ll be entrenched much more deeply in your processes and making changes will be much more difficult. So take these early days to establish your company model and processes, and gain an understanding of — and control over — your finances, before rushing to scale.

David Ehrenberg is the founder and CEO of Early Growth Financial Services, a financial services firm providing a complete suite of financial services to companies at every stage of the development process. He’s a financial expert and startup mentor, whose passion is helping businesses focus on what they do best. Follow David @EarlyGrowthFS.

The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, the YEC recently launched #StartupLab, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses via live video chats, an expert content library and email lessons.

Now check out “The Case For Remote Work”

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Image: YEC

Where Do You Go Offline To Connect With Other Entrepreneurs & Startups

YEC, Guest Post, Startup Tips, CoWorking, Entrepreneurs

Donna Harris, co-founder of 1776dc chatting with an entrepreneur (photo: NMI 2013)

 

Where do you go in your city/region (or online) to connect with other entrepreneurs and learn from them?

The following answers are provided by the Young Entrepreneur Council (YEC) (http://theyec.org), an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, the YEC recently launched #StartupLab (http://mystartuplab.com/), a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses via live video chats, an expert content library and email lessons.

1. Co-working Spaces and Meetups

In Phoenix, we have an awesome coworking space downtown. Co+Hoots is full of entrepreneurs and creatives; they all are welcoming. Find a coworking or collaborative workspace, and entrepreneurs will be there! In my city, we also have startup incubators and local organizations that host events or meetups. Find these events via social media in your town. Ask around and join in!

– Kyle Clayton ( http://twitter.com/KyleClaytonGore ), Jackrabbit Janitorial ( http://www.JackrabbitJanitorial.com )

 

2. Mixergy

My investment in Mixergy’s premium membership has paid itself back 1 million times over. I have learned so much from the interviews, the classes and the discussions. I’ve gained an MBA-type network without the $200K tag. Andrew Warner, the owner of Mixergy, is great at getting guests who can contribute tangible advice to other entrepreneurs, regardless of what industry they are in.

– Derek Capo ( ), Next Step China ( http://www.nextstepchina.org )

3. Philly Startup Leaders

Philly Startup Leaders is a strong local organization that connects Philadelphia’s most successful tech innovators with aspiring entrepreneurs. PSL’s regular events allow for an environment that fosters collaboration and community education.

– Robert J. Moore ( https://twitter.com/robertjmoore ), RJMetrics ( http://www.rjmetrics.com )

4. User Groups

I prefer to attend user groups for different technology, rather than straight-up entrepreneurship meetings. You’re more likely to encounter different types of entrepreneurs when you’re looking at a purely technological point of view. You can also avoid some of the super-charged networkers who aren’t quite as useful to connect with.

– Thursday Bram ( http://www.twitter.com/thursdayb ), Hyper Modern Consulting ( http://www.hypermodernconsulting.com )

5. Meetup.com

Meetup.com lists all local meetings for like-minded entrepreneurs, and it presents a great opportunity to learn more, expand your network and build potentially valuable business relationships.

– Andrew Schrage ( https://twitter.com/moneycrashers ), Money Crashers Personal Finance ( http://www.moneycrashers.com )

 

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6. Self-Hosted Events

In today’s connected world, there’s no reason you can’t show up in a city and host your own event. When I was in Phoenix, a place I’d never been, I found a few connections from Twitter, LinkedIn and Facebook and threw an impromptu happy hour. I asked each of them to bring a few interesting people along. Before I knew it, I was fully immersed in the Phoenix entrepreneurial community.

– Matt Wilson ( http://www.twitter.com/MattWilsontv ), Under30Experience

7. Local Organizations

Dyn is located in a great area. In Manchester, I can go to the ABI Innovation Hub, which hosts events, contests and a founders’ series. There are also groups like the NH High Tech Council, the Manchester Young Professionals Network and Stay Work Play that bring people together to share common experiences. We live in a global world, so it’s important to stay connected beyond your own backyard.

– Jeremy Hitchcock ( http://twitter.com/jhitchco ), Dyn ( http://dyn.com )

8. Our Young Entrepreneurs’ Group

I live in a small town, Roseburg, Ore., with 35K people, but we’re creating an entrepreneurial movement here from the ground up. Four years ago, the entrepreneurial culture was struggling. But a group of us are making things happen — one of them being the Young Entrepreneurs Society we started two years ago that’s 104 members strong. Our monthly meetups and book club are awesome.

– Trevor Mauch ( http://www.twitter.com/tmauch ), Automize, LLC ( http://www.automizeit.com )

 

9. Silicon Prairie News

Silicon Prairie News is all about promoting, connecting and perpetuating entrepreneurship in the Midwest. Its Big Series of conferences is a great starting point for getting involved. And, of course, Silicon Prairie News’ website is worthwhile.

– Jake Stutzman ( http://twitter.com/jstutzman ), Elevate ( http://www.elevate.co )

10. A Speakeasy for Geeks

In Indianapolis, we launched The Speak Easy — a place for Indy-based entrepreneurs, startups and the folks who support them to work, play and collaborate. It’s essentially a clubhouse for entrepreneurs, designers and geeks. Bringing these folks together in a fun, productive work environment is the surest way to accelerate the development of high-growth startups.

– Kristian Andersen ( http://www.twitter.com/kristianindy ), KA+A ( www.kaplusa.com )

DC Mayor Vince Gray praised the YEC on Friday night at 1776, DC’s coworking,startup and entrepreneurial epicenter.

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15 Interview Questions To Ask Your Next Startup Hire

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Startup Hiring, Guest Post, YECQuestion: What’s one must-ask interview question for your first few startup hires?

Will You Make Copies?

“At startups, everyone needs to pitch in, including doing the occasional administrative task. By asking prospective hires if they will make copies, you can identify those who have the “do whatever it takes” attitude that will help your startup succeed.”

Bhavin Parikh | CEO, Magoosh Test Prep

 

Past Experience Takes Precedence

“I would want to know, first and foremost, that the hire has had success in the startup environment before. It’s a unique culture that requires a certain mindset and approach.”

Alexandra Levit | President and Founder, Inspiration at Work

 

Where’s Your Initiative?

“”Can you give me an example of when you demonstrated high initiative?” As a startup, you need people that will go above and beyond their role and produce amazing value for the company.”

Jun Loayza | President, Ecommerce Rules

 

Completion Is Key

“How have you worked around resourcing and staffing limitations to accomplish a project? Startups are always trying to juggle multiple priorities and there’s never enough manpower to get stuff done. Asking about times where someone was able to come up with a project, idea, or initiative, and then oversee it to completion — despite obstacles — allows you to discover a lot.”

Matt Mickiewicz | Co-Founder, Flippa and 99designs

 

Find Out About the Formative Years

“I always ask candidates to tell me about a difficult or challenging event from their childhood that they feel has shaped them into who they are today. It gives me insight into who they think they are as a person, what motivates them, and how they deal with unexpected issues that may arise.”

Vanessa Nornberg | President, Metal Mafia 

 

One Word: Why?

“Why do you want to join a startup? Understanding one’s motivation for pursuing a job, particularly an entrepreneurial one, is critical. Make sure your first few hires are risk-tolerant entrepreneurs like yourself, and that your objectives are aligned. You want people who aren’t going to bail at the first bump in the road.”

Michael Tolkin | CEO, Merchant Exchange

 

Stump Them With the Obvious

“Ask them if this a job or is it a career. The two are very different from each other, and can sum up the persons work mentality.”

Jerry Piscitelli | Owner / Inventor, Portopong LLC

 

Do You Get Seasick?

“I would ask the following: “If we had news that the company may go belly up in two weeks, what would you do?” This question will test the person’s stomach for the swaying seas of a startup. If they respond by indicating an “increased” level commitment, then you have a winner. If they allude to retreating and “playing it safe” they may not have the necessary fervor.”

Kent Healy | Founder and CEO, The Uncommon Lif

 

What’s Your Favorite Movie?

“Startup hires need to be almost as passionate as you are about your vision. By asking, “What is your favorite movie?” you can see how they can passionately express themselves. Don’t hire those who are as dead a a door knob when they answer this question.”

Nancy T. Nguyen | President & CEO, Sweet T Salon

 

Identify Their Personality

“Ask simple questions to determine the character of the potential hire. Some startup hires cannot handle the startup mode, not because of education and past experience, but simply because their character does not fit the type of environment one would find in startups. One question to ask is, “Do you want to be in a startup, or do you want to appear to be a in a startup?” It’s an honest question.”

George Mavromaras | Founder and President, Mavro Inc. | Praetor Global LLC. 

 

Make It an RPG

“Ask plenty of role-playing questions — the interviewee will project their motivation for applying to the startup. You’ll also get a deeper understanding of them as an individual and what they can bring to the table.”

Justin Beck | Co-Founder and CEO, PerBlue

 

What Happens When You’re Wrong?

“Ask for an instance of when they were dead wrong about something. How they respond is telling — do they have the ability to admit it, ask for help and move on, or do they try to fix it themselves? Are they willing to admit it happens often? That’s a sign of not being afraid to fail.”

Susan Strayer LaMotte | Founder, exaqueo

 

All Roads Lead to Success

“The first few hires in a startup are crucial, so make sure they’re on-board with your company’s vision, first and foremost. Ask where they see themselves in relation to the company five years down the road. Make sure they envision the company’s destination the same way you do, even if they see the path a little differently.”

Nick Friedman | President, College Hunks Hauling Junk and College Hunks Moving

 

Let’s Talk Numbers

“Ask them how much they want to earn. First, this question usually catches people off-guard, which helps you evaluate how quickly they can adapt. Second, it allows you to see how flexible they are, as well as how committed they are to the company’s growth.”

Nicolas Gremion | CEO, Free-eBooks.net

 

Change Is Constant

“How comfortable are you with change, and how do you handle it? If you run a startup, you need people who are flexible enough to grow with you. If someone doesn’t handle transitions and change well, you need to know that before you invest in them.”

Brent Beshore | Owner/CEO, AdVentures

 

The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, the YEC recently launched #StartupLab, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses via live video chats, an expert content library and email lessons.

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7 Key Elements Of A Successful Crowdfunding Campaign

Fundable, Eric Corl, startup,crowdfunding, Guest Post, YECCrowdfunding can be an effective tool for accomplishing your startup goals. Whether you’re looking to jumpstart your marketing efforts, expand your customer base, or reach out to friends and family for funding, crowdfunding provides a platform to rally support around you and your company. Having worked with hundreds of entrepreneurs who have conducted successful fundraisers, we have distilled seven key strategies for launching a successful crowdfund:

  1. Tell your story. As the old adage goes: facts tell, stories sell. When it comes to eliciting customer engagement, a campaign with a good story is an unparalleled strategy. Did you experience some kind of obstacle on your path to entrepreneurship? Did a major life event influence your career choice or business decisions? Tell your story in your crowdfunding pitch to make a connection with backers and encourage engagement.If you don’t have a personal story to share with your audience, share facts and highlights about your startup, product or vision instead. Describe the problem (and severity of the problem) your product will solve, or discuss the vision for your startup. Keep your tone and messaging personal to make backers feel closely connected to you and your project.
  2. Provide value for value. Crowdfunding campaigns hinge on reciprocity. If your startup offers fantastic products, rewards or opportunities, you’ve created a huge incentive for backers to pledge to your campaign. When choosing your reward tiers, reflect on whether the incentives would appeal to you if you were the consumer; ask friends, family members and business acquaintances for their honest opinions as well.
  3. Introduce scarcity. A basic law of economics dictates that scarce supply inherently creates greater demand. Create greater demand for your startup by limiting one or more of the higher level rewards to just a few — this will inflate demand for those rewards and result in higher pledge amounts for your crowdfunding campaign!
  4. Create a marketing event. People love to feel like they are part of something bigger than themselves. Try to build a feeling of excitement and rally others around your crowdfunding campaign by tying the launch to a large, well known event. You can connect your product to a holiday, sporting event, or season to increase the momentum surrounding your launch. You can leverage the emotional connection surrounding these events to get people excited about your product and engage them in discussions.This is especially useful for connecting with backers through social channels, capitalizing on trending topics and popular hashtags to get more eyes on your fundraise!
  5. Highlight examples of social proof. Going back to the human desire to feel like a part of something bigger than themselves, most people don’t want to be the first or only supporter of a crowdfunding campaign — they want to see other influential advocates joining in. Do you have someone notable as an adviser, backer or endorser of your startup? Share your list of partners and patrons to give confidence to new backers and let them know that they won’t be the only one at your party.
  6. Build credibility and legitimacy. Many backers will believe it when they see it. In other words, they require some kind of evidence  that your startup is legitimate and picking up steam before deciding to back your crowdfunding campaign. Show your backers what they’ll be supporting in detail — how it works, how you came up with the idea, and even pictures or videos if you have a prototype. Remember that you will likely never meet your backers, so the more proof you can provide that your startup is legitimate the better.
  7. Interact with your supporters. Don’t leave your backers in the dark for weeks after they’ve supported your project. Interact with your audience through frequent updates, thank-you emails or social media outreach, and responses to their questions and feedback.You can build anticipation and increase engagement in many ways. Post updates counting down to a big surprise regarding your project, conduct a product giveaway, or even host a contest involving your crowdfunding campaign. The opportunities here are endless and can be tailored for your specific startup.When interacting with your backers, always encourage an open dialogue and engagement. In general, people would rather talk than listen. Treat your updates and outreach as a conversation rather than a one-sided message.

Eric Corl is the Co-Founder and President of the crowdfunding site Fundable.com. Eric has been on the founding team of three successful startups including Fundable, IdeaBuyer and Startups.Co, all of which have focused on getting early-stage startups to market quickly and effectively. He is also a partner at Virtucon Ventures, an early stage incubator that brings new ideas to market.

The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, the YEC recently launched #StartupLab, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses via live video chats, an expert content library and email lessons.

Now that you’ve got that down check out 12 Tips For Crowdfunding Your New Startup

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Deciding Between An LLC Or S Corporation: 6 Key Differences

LLC or S Corp, Guest Post, YEC, startup tips

When starting a business (or growing a business from a sole proprietorship), the limited liability company (LLC) and the S corporation are the go-to entities for small business owners. Both entities provide liability protection (which prevents business creditors and those with a judgment against you from accessing your personal assets) and act as a pass through, which means that all income from LLCs and S-corps are treated as income of the individual owners. However, there are various differences between the LLC and S-corp.

Instead of randomly choosing one or the other, here are some of the differences that may affect which one you choose for your business:

  1. Corporate Formalities: LLCs generally do not have to maintain corporate requirements, even though its good practice to maintain separate company records. In some states, LLC owners are required to file a simple biennial statement with the Secretary of State, but that’s about it. S-corps, on the other hand, are required to maintain corporate formalities in order to keep their liability protection. S-corps must keep meeting minutes, a board of directors, officers, separate business accounts and appropriate records for all of their business transactions.
  2. Allocating Income: This issue only comes up when there are several owners of the business or when additional owners will be added in the future. LLC owners may allocate the business income to its member disproportionately. That means that two owners may split the income 60-40 instead of 50-50. This may be important in situations where each owner contributes to the business differently — for example, where one owner is putting up startup capital and the other is putting in sweat equity. S-corps do not have this flexibility. Owners of an S-corp (also known as shareholders) are required to split the income equally among all of the owners.
  3. Filing Taxes: LLCs with one owner do not have to file separate tax returns for the business. They can typically add a Schedule C to their personal taxes and be done with it. LLCs with more than one owner do have to file separate tax returns, but have the flexibility to file as a partnership or a corporation. S-corps must file information returns every year and their owners have to add a Schedule E to their personal taxes. However, a big tax benefit that S-corps provide is that with the Subchapter S election, you have the option to pay self-employment tax (approximately 15 percent) on only your reasonable salary as the owner, rather than on the entire net revenue  of the business. This can result in big tax savings and is a big incentive to go S-corp rather than LLC for some.
  4. Startup and Operation Costs: Maintaining corporate formalities and filing additional tax returns may increase the costs of running an S-corp. However, in several states the filing fees to create an LLC are substantially more than the fees to create an S-corp. In some states, such as New York, LLC owners are required to publish the name of the LLC in two newspapers which can easily cost well over $1,000. Its important to be aware of the filing requirements and associated costs in your state.
  5. Restrictions on Type of Owners: In most states, LLCs may be owned by individuals, corporations, other LLCs and foreign entities. S-corps are not so flexible. S-corp shareholders must be individuals (not partnerships or corporations) who are U.S. citizens or permanent residents. Additionally, an S-corp can have a maximum of 100 shareholders. Certain types of businesses may not be LLCs or S-corps, including banks and insurance companies.
  6. Psychological Effects and Public Perception: People who may be important to your business’ development can have strong opinions about the different business entities. I have heard from bankers and venture capitalists that they are not fond of LLCs and prefer to invest in corporations. I also know lawyers who think the LLC is the best thing since sliced bread. I think that corporations, with all their formalities, can influence the way you treat your business and the level of professionalism that you maintain. Additionally, public perception of an LLC versus an S-corp may be different. Incorporating may show customers, banks and other potential investors that you are serious about growing your business and that you intend to be around for a long time.

These are just some of the various factors to be considered when selecting a business entity. I highly recommend a consultation with both an accountant and a lawyer to determine which entity will fit your business best.

This article was originally featured in YFS Magazine.

Rachel Rodgers is a business lawyer for women and/or young entrepreneurs. She runs her practice, Rachel Rodgers Law Office, entirely online. In addition to practicing law, Rachel blogs about virtual law offices and teaches a popular workshop for women lawyers who want to practice law online through her website, Her Virtual Law Office.

The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, the YEC recently launched #StartupLab, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses via live video chats, an expert content library and email lessons.

Disclaimer: This article is a resource guide for educational and informational purposes only and should not take the place of hiring an attorney. No information in this article constitues legal advice or creates an attorney-client relationship between the author and the reader.

Image: YEC

This Twin Cities startup takes photo tagging to a new level.

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13 Powerful SEO Tools For Startups

SEO Tools, Guest Post, Startups, YEC

Question: Which SEO tools have been most helpful to your business?

SEOMoz for Everything

SEOMoz’s suite of products has essentially provided us the value of our own personal SEO consultant. We use their tools track keyword rankings, rate on-page optimization, and track links to our site. They also regularly post great tips on their blog and have a Q and A section. By using their tools, we’ve increased our monthly search traffic 10x in the last year.”

Bhavin Parikh | CEO, Magoosh Test Prep

Raving About Raven Tools

“I love Raven Tools. It is one of the key reasons why my company’s website ranks either first or second for most keywords related to our niche. Their research analysis and link-building tools allow me to find untapped niches and capitalize on them through effective organization for outreach.”

Lawrence Watkins | Founder & CEO, Great Black Speakers

Install SEO for Chrome

SEO for Chrome is the go-to tool that I use. It allows me to easily see Page Rank, backlinks, estimated traffic, and even conduct keyword research for a website, all through my Chrome browser. It’s very important to get backlinks for SEO; I use this Chrome app to determine where I will invest my time to develop links back to my site.”

Jun Loayza | President, Ecommerce Rules

Scribe for Content

Scribe is a great tool for SEO-ifying content. We run all of our blog posts through it to make sure that they’re not only educational, but will all be found in the search engines. Right now, we receive more than half of our traffic from relevant Google searches.”

Laura Roeder | Founder, LKR Social Media

Can’t Go Wrong With Google

“SEO is all about content and links, but equally important are the keywords you choose to target. Don’t assume what your users are searching for. Instead, use Google’s free Keyword Tool to determine monthly search volume for keywords in your industry. Once armed with this data, create content and obtain links targeting these keywords and watch your SEO traffic soar.”

Warren Jolly | Co-founder, Affiliate Marketing

Two Birds With One Stone

“YouTube has helped me rank high on certain Google keywords. Not only is it the second highest search engine ever, but it also helps my audience see me and my photography in a more personal setting.”

Angela Pan | Owner/Photographer, Angela B Pan Photography

Join the Fight With Market Samurai

“Ever since I started doing SEO years ago, Market Samurai has been the backbone of my keyword research and analysis process. It is much easier to use than Google’s Keyword Tool and less expensive than other products on the market.”

Sean Ogle | Founder, Location 180, LLC

Open Up Open Site Explorer

“Information is key in improving your SEO efforts; if you don’t know where your inbound links are coming from and what keywords are providing the biggest boost to your search efforts, you can’t work to improve them. Open Site Explorer lets us check which inbound links are giving us the best SEO benefits, perform competitive research, and check backlinks and anchor text almost effortlessly.”

Lauren Fairbanks | Partner, Stunt & Gimmick’s

Go Real-Time on Rank Checker

“I’ve been using Rank Checker, the simple browser plugin for over three years now and haven’t had a need for much else. It’s free and you can download and set it up in a few minutes. You can create multiple website profiles that you want to track keyword SERPs for. It’s super simple and it gives you the most up-to-date results each time you run it. You can also schedule it to run automatically.”

Matthew Ackerson | Founder, Saber Blast

Wordtracker Cuts Out Extra Work

“When it comes to researching which keywords are the most searched for, and how much competition they have, Wordtracker is the way to go. You can find out how many clicks you’d likely get if you got to the front page of Google, and whether it’s worth targeting this keyword or not.”

Nathalie Lussier | Creator, The Website Checkup Tool

Add Platinum SEO to WordPress

“Many of my sites run on WordPress so I use WordPress plugins on them. The best one of these plugins for SEO is definitely Platinum SEO.”

Ben Lang | Founder, Mapped In Israel

Site Strength Indicator Delivers Results

Site Strength Indicator from SearchEngineNews has been incredibly helpful, as it provides a very detailed breakdown of the most important SEO factors and how your site rates for them”

Nicolas Gremion | CEO, Free-eBooks.net

Forget SEO and Hit the Books

“The best SEO tool I’ve ever encountered is The Purple Cow, a book by Seth Godin. This book makes the case that investing your resources into developing an amazing and viral product is better than any marketing or SEO campaigns. Instead of gaming SEO, focus on building a product that goes viral.”

Eric Bahn | Founder, Beat The GMAT

The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, the YEC recently launched #StartupLab, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses via live video chats, an expert content library and email lessons.