Check out our first podcast ever as we discuss three crucial pieces of advice for new entrepreneurs.
Transcription: Hello and welcome this is Alex Iglesias of ALTO Solutions Group and you are listening to the Entrepreneur Expedition.
For my first ever podcast I would like to discuss some of the most common things that people looking to start their own businesses ask me so for some backstory.
I started at ALTO Solutions Group at the young age of 22 I was still a senior in college at the time and I could have done things better. We started out as a normal bookkeeping company kind of, you know, your run-of-the-mill type of bookkeeping company (not not to say that bookkeeping companies I aren’t special or innovative) but mine wasn’t. So, between a lackluster idea and the fact that I was 22 years old — I was in college. I was spending a lot more money on things that were unnecessary and unimportant I made a lot of mistakes — and part of my goal, with ALTO Solutions Group is to make sure that people whether they’ve already started their companies and are operating or they’re looking to start their companies. I want to make sure that people don’t make the same mistakes that I made.
Getting Started
So, the first thing that almost everyone asks me (maybe it’s not the first thing, but, almost everyone asks me) is how do you decide what products or services to offer? This is a really interesting question because the great thing about starting up a business is that it’s literally all up to you. I never really know how to answer this question, but I do know this: make sure it’s something you’re passionate about in my opinion.
Be Passionate
It’s better to operate in an industry or create a product that you’re super into and not as good about (from a performance or manufacturing standpoint) than it is to offer products or services that you’ve mastered but you’re not passionate about. The reason is, and you might not have thought about this, the reason is that your welfare when you’re starting out is hugely determined by your enthusiasm. If you’re trying to sell yourself — the bright look in your eyes and the energy when you’re talking — that tells the buyer a lot more about you and your company and your future success than your claims of mastery.
Whether you’re talking to an investor or a person or a company you’d like to partner with or someone you’d hope would buy your product or service in the future — they’ll care way more about: is this guy into it, does this guy love his company, does he have faith in this company? You don’t care more about that than talking about how great you are about at doing what you’re what you’re trying to do. This, of course, is not to discount the value of being able to perform properly — a bad product or service can’t be combated by enthusiasm and excitement, but so much — and this is where the next part of my advice to new entrepreneurs begins.
Entrepreneur Expedition Tip #1: Learn your stuff
Well, yeah, just kidding. Find someone else who knows their stuff. Business process engineers, industry veterans or experts, whoever you want, just make sure you don’t go into things alone. You could know more about your product than anyone else in the world, but someone elsewhere, almost everyone else, will know a lot more about something else than you do. Supply chain marketing, business processes, finance, accounting, come on, your chances of success increased dramatically by forming a team from the start. If you’re serious about becoming a successful entrepreneur once your ideas flushed out well enough to explain to other people start your team building even just one other person can take your company miles farther.
Entrepreneur Expedition Tip #2: Raising Capital
The second biggest thing that future entrepreneurs ask me about is capital: how do you raise it, where does it come from, do all successful business owners really have to save up every penny they make to launch. Now for young entrepreneurs, especially, I do highly advise saving as much as you can and building your credit while you’re near the early adult years. I mean, this is general good life practice in general, but especially for people who want to be entrepreneurs. The credit part is especially important because if you do eventually want to try to get business loans from a bank. It’s on you as the business owner to be able to acquire that loan and they tap into your personal credit so if your personal credit’s not good then you can’t get the loan.
Believe In Yourself
So, if you’re kind of relying on that whatever I did, guess but yeah so, this part right ties into the last point: if you believe in yourself in your product you can raise capital. Sometimes, all it takes is that family friend or a random stranger you meet in casual conversation at the airport. Life experience right there: to contribute a few thousand dollars or even a couple hundred, you know, if you get investments like that, small investments, everyone likes the big investments, obviously, but if you can get anything, you’re on your way.
Why Raise Capital?
Raising capital from external sources is great for a few reasons. First off, and, obviously, it takes some of the pressure off yourself as an entrepreneur to come up with the money. This might mean that you don’t have to start working a second job or go through unfavorable measures that can take you away from building your company and building your model. Secondly, from a psychological standpoint, it puts pressure on you — it makes you really want to succeed, or at least be smart about the money. It makes you want to be smarter with that money than if it was out of your own pocket.
Consider this point: if you go to the casino with your own money versus going with your friend’s money your friend who spotted you with the intention of getting it back. Specifically, how are you gonna handle the situation whose money are you gonna be more careful and conservative with obviously your friend if you go to the casino you already knew that you had that money to blow and it’s not going to mean as much to you if you lose it as it will if you lose your friend’s money.
Entrepreneur Expedition Tip #3: Mitigating Risk Factors
And the third thing, and related with the last point, that people seem to bring up is the risk factor of entrepreneurship people tend to believe that entrepreneurship is for risk takers you know the people who are willing to lose it all for their business sure there are seemingly endless stories of people who experience this but I’m here to tell you it’s kind of bogus sure there’s risk but there’s risk in everything you do driving to and from work or the grocery store. That’s a risk.
An anecdote
Fun life story: when I was 19 years old I’d crashed my car at 11:30 at night driving back from buying tea bags at the grocery store of all things you know eating food in a restaurant is a risk if you consider food-borne illness but the risk and entrepreneurship is actually very minimal if you do it right almost all risk can be dodged with proper planning first off make sure you develop your idea as much as possible simply getting an idea isn’t good enough like I was saying earlier try your best to find at least one advisor work with. Your advisor on building: you’re again developing your model and processes.
Create a budget and develop a model
If you can develop your model and processes before you start worrying about money and quitting your normal 9:00 to 5:00 or whatever job you’re gonna do a lot better once you can develop your processes and offerings. Create a budget, again, likely with the advice and assistance from the people around you. Dig deep into the cracks and find what you need financially and determine a monetary goal for your capital do research or see if you can get in touch with an accountant to discuss things like taxes and other costs that you might not know enough about to figure out from the get-go.
Managing the risk
But if you do this effectively you’ll know how much money you need to save or raise and that will pretty much single-handedly take out all of the risk in your operation if you do these things effectively your chances of succeeding increase dramatically and your general risk is diminished to almost nothing. You lose what you know you might lose, and past that you can assess from there you can ramp things up or you can, well, I’d hate to see anyone try to stop their operation, but if it gets to that point, you haven’t lost as much as you would have if you went to the bank. You know, you’re sitting around, you get an idea, you start thinking about your idea a little bit, you try to handle it all on your own, and the bank can pull out a loan for a hundred thousand.
That’s risk. That’s huge risk, but if you follow these steps, if you just keep these things in mind if you just develop your process talk about it with people talk about it with a lot of people and then create a budget and just run these numbers run these numbers run these numbers you’ll be fine.
But with that said that pretty much wraps up my first podcast here. Once again, my name is Alex Iglesias, and you are listening to the Entrepreneur Expedition. Thank you so much for listening and I’ll see you next week.