This annual presentation was given to a very gifted class of seniors at the University of Rochester. Always fun to work with those who are willing to listen ...

1. Hugh J. Rundle
hjrundle@topdownconservation.com
A Guide to Become a
Successful Entrepreneur

2. HJR background
Xerox Corp
PriceWaterhouse Coopers
Founded 8 technology & service businesses
Sold 5 businesses
A Guide to Become a Successful Entrepreneur, (c) 2014 2

3. Small business experience
Who has owned or run a small business?
A Guide to Become a Successful Entrepreneur, (c) 2014 3

4. Small business experience
Who has owned or run a small business?
You have if you’ve
• Owned a check book
• Great cash flow experience
A Guide to Become a Successful Entrepreneur, (c) 2014 4

5. The Customer experience
“The customer is always right”
Actually they are not
• But without them, you have no business
• Ensure they feel right
A Guide to Become a Successful Entrepreneur, (c) 2014 5

6. Commitment vs. passion
What’s the difference?
A Guide to Become a Successful Entrepreneur, (c) 2014 6

7. Commitment vs. Passion
Commitment = you wake up for a job
Passion = can’t wait to wake up
to go to work
Be passionate at what you love …
A Guide to Become a Successful Entrepreneur, (c) 2014 7

8. Entrepreneurial drivers
• Honesty … esp. with your self
• Vision
• No fear of failure … learn by it … move on
• Independent thinking
• Eliminating naysayers & negative influences
• Being passionate about your beliefs
• Perseverance
• Good communications skills … in & out
• Admitting you do not have all the answers
• Surrounding yourself w/ smarter people
A Guide to Become a Successful Entrepreneur, (c) 2014 8

9. Business startup framework
Get Agreements in writing early on
• Who does what w/ defined expectations
Definition of Friendship
• Changes as sales increase
Get pre-nup agreements with business partners
“DON’T YOU TRUST ME”
• “In God We Trust,” all others have contracts
• Contracts are for successors
A Guide to Become a Successful Entrepreneur, (c) 2014 9

10. Problem solving approaches:
Thinking vs. Doing
• Thinker
• 95% solution upfront
• 2 years later
– 100% best solution
– Zero market share
• Doer
• 60% solution upfront
• 2 years later - owns the market
• DON’T OVERTHINK THE SOLUTION
• You won’t get it right the first time
• Consumers don’t care about 100%
A Guide to Become a Successful Entrepreneur, (c) 2014 10

11. Product Success Cycle is Endless
Listen to
Customers
Develop
Product
Market, Sell &
Distribute
Listen to
Customers
Enhance
Product
A Guide to Become a Successful Entrepreneur, (c) 2014 11

12. The key to profitability
• REDUCE ALL CYCLE TIMES
– Sales
– Receivables
– Supply chain
– Manufacturing
– Customer service
– Investor ROI
– Time to make customer happy
• Applies to product & service
• The shorter the cycle, the more $ you make
• DEVELOP ANNUITY REVENUE
A Guide to Become a Successful Entrepreneur, (c) 2014 12

13. Sales, money, emotions & the sine curve
• A Sine curve has defined upper & lower bounds
– Life & business do not
• Anything that accelerates at ‘x’ will decelerate
at 2-3x minimum
A Guide to Become a Successful Entrepreneur, (c) 2014 13

14. Importing - What’s in my landed cost
• Cost of product
• Insurance
• Freight to US port
• Freight to distribution center
• Import duties & taxes
• Bank fees
• Brokerage fees
• Other fees
• Import/export documentation must all be in order, else
delay of payments
• Supply chain delays = increased costs
A Guide to Become a Successful Entrepreneur, (c) 2014 14

15. Product-to-Market Factors
• What’s your product line strategy
• Who will buy
• Why
• How much will they pay
• Marketing plan
• Supply chain costs
• Landed
• Lead times
• Sales/distribution channel costs
– Variable
– Retail shelf space & spiffs
A Guide to Become a Successful Entrepreneur, (c) 2014 15

16. What’s more important
Sales or Net Profit
A Guide to Become a Successful Entrepreneur, (c) 2014 16

17. What’s more important
Sales or Net Profit
DEPENDS ON THE STAGE
• Start up Sales
• Early stage Sales
• Growth Sales & profit
• Established Sales & profit
A Guide to Become a Successful Entrepreneur, (c) 2014 17

18. What investors look for …
• Sales, sales & more sales …
• Concept: Validated or still an idea
• Scalable & Annuity opportunities
• Patents (US & PCT)
• Risk
• Competition
• Debt
• High margins
• Inventor’s time & investment
• Management team & salaries
A Guide to Become a Successful Entrepreneur, (c) 2014 18

19. Company Valuation
HIGHER if you have:
• Sales
• Patents & IP
• Experienced management team
• Lower risk
LOWER if you have:
• No sales or pattern of acceptance
• No IP
• Inexperienced management team
• Higher risk
A Guide to Become a Successful Entrepreneur, (c) 2014 19

20. The Path to Become a
Successful Entrepreneur
• Never fall in love with an asset
• Follow your dream
• Get others to buy into your passion
• Know your customers
• Why they buy
• Sales, sales & more sales …
• Smell the roses …
A Guide to Become a Successful Entrepreneur, (c) 2014 20

21. Resources: Innovation Institute
http://www.wini2.com/
• Evaluates ideas for US $250 / $270 Int’l
– Good Go/No-Go evaluation report
• Founded by Sam Walton (Walmart)
• Formerly Wal-Mart Innovation Network
A Guide to Become a Successful Entrepreneur, (c) 2014 21

22. Questions
A Guide to Become a Successful Entrepreneur, (c) 2014 22