A question I get asked very frequently by young entrepreneurs is:

“How do I know if my business idea is any good?”

I thought today I would share some of the advice that I usually give.

1) You Love It

Almost every famous entrepreneur that we’ve profiled said that if you go into business just for the money, you won’t make very much of it. You have to pick an industry that fascinates your endlessly. Money usually doesn’t come right away so if you don’t love what you’re doing it’s going to be hard to stick with it when the times are tough. Also, being an entrepreneur allows you to do whatever you choose - why not choose something you love to do?

2) You Have A Customer

The best way to start a business is around a paying customer. Too many new entrepreneurs start up with great ideas but no clients. Find a way to make money as soon as possible. Your vision will likely be way bigger than what you’re doing to start off but if you don’t have customers and money coming in then you won’t be around in business for very long. Paying customers also give you feedback on what to improve on which will help you get new ideas to grow your business.

3) It Doesn’t Cost Too Much To Set Up

Some businesses are very capital intensive while others don’t need as much to get going. Unless you’re already independently wealthy (which I’m assuming most startup entrepreneurs are not!) you don’t want to tie up too much of the money you have in starting up. A new business can quickly burn a massive hole in your wallet and the longer it takes you to get to profitability, the less likely you will be able to stick with it. If you’re planning on entering a capital intensive industry, find a way to start smaller by either outsourcing or offering a related service to build up your cash flow before making any large investments.

4) You Can Do It All Yourself Or Have A Team In Place

There’s nothing worse than starting a new business and not knowing how to succeed in your industry. I’ve seen countless entrepreneurs set up online businesses, for example, and not even know how to edit a website. You can’t have a hope at success unless you either know how to run your business or have people who can do it for you. Most startups don’t have the money to go out and hire people right away and, in my opinion, if you don’t know about the industry you’re getting into, you should learn about it first before diving head into starting a business. That’s why so many restaurants fail. People think it’s easy to be a restaurant owner, underestimate the costs and time involved, and end up folding.

5) You Have Something That Sets You Apart

If you’re selling the same product, the same way, to the same customers as your competition then you don’t have much of a chance of success. It’s difficult for new entrepreneurs to compete on price alone and it’s much harder to maintain price as a long term sustainable competitive advantage. You need to find another way to stand out and justify a respectible price for yoru customers. Are you providing extra service? Do you have a unique product nobody else sells? What makes you different from the rest? If you don’t have a good answer then you don’t have a good business idea.

It’s time for another SEO Advice post! Last month, I offered free SEO advice to soundsofrock.com. I’m going to continue my SEO Advice series today by helping out another YoungEntrepreneur.com blog reader Gareth May, from 21st Century Boy.

Gareth May - www.21st-century-boy.co.uk

Hey Evan,

I launched my website. Basically it’s aimed at young men between 16-26 (although not exclusively) whom for whatever reason - fatherless family, lack of role models (footballers are now millionaire teenagers with no foot hold in reality), computer game obsessed, saturated schools with less support - need a helping hand in life or some growing up advice. I’ve tried to make it informative, through humour, about issues which I don’t think young men really have realistic access to. And by realistic I mean without it being patronising or from an authoritative figure. But it’s also got a lot of fun stuff on there like videos, articles and stories as well as tips on how to buy your girlfriend lingerie without looking like a pervert, how to get served at a busy bar and how to check for testicular cancer to name just a few. I think you’ll see what I mean if you visit it.

www.21st-century-boy.co.uk
Cheers for now.

Gareth May.

My Recommendations

After the one liner messages from Brenn and Michael it was great to see a request with a little more meat on the bones and one that provided some context as to what the website is trying to achieve. Kudos to you Gareth! Here are my suggestions for you:

1) Use A Better Title Tag

The top left of page (above the url box) is one of the most important elements that Google looks at it. Don’t waste it by putting 21st Centure Boy at the front of each page. If you have 100 characters to make an impression you want to put your most important keywords up here. If you have to use 21st Century Boy on each page, put it on the right most part of the title tag instead of the left. Repeating title tags won’t help you rank your different pages in Google.

2) Make Your Tips Longer and Put Them On Their Own Pages

I love the Tips section on your site. You’re covering popular “how to” topics like “How to fry the perfect steak” and “How to slow dance with confidence”. I like the tips much more than the articles because people love “how to” articles and yours are short and to the point. I think they could be a big traffic driver for you if you could make them just a little bit longer (aim for 300 words) and put each one on its own page. Make sure that each page has the keywords in the url as well as the title tag.

3) Get Some PageRank!

I’m surprised you’re not getting a higher score from Google’s PageRank (2/10) considering the social context of the material you write. It’s the kind of stuff people would want to tell their friends about. What are you doing to market your site? Get on the different forums and blogs and let people know you exist! Eventually you’ll get some champions to help you promote your site but when it’s in startup mode you have to do it yourself. Build those links to your site and establish PageRank so you can get more respect as well as higher rankings in Google!

Good luck Gareth!

Readers, what do you think about 21st Century Boy?

To learn more about how to get SEO tips for your website please read my post: Need SEO Advice? Submit Your Site!

I had an interesting conversation this afternoon with a friend of mine who is currently working for me and we’re considering expanding his position and making it more of a full time role.

I have always loved working with family and friends and they have been my best source of help. I’ve had my sister working for me for over 3 years and have a joint venture with my father. I bought my office space with my mother and she uses one half of it. Also, most of my hires - for long term or short term projects - have all been friends that I’ve known for a while.

Here is why I love working with friends or family:

1) They Care

Friends and family don’t just think about themselves. They spend more time thinking about what you’re going through and how they can help the business. My team has had to stay late, take weekend time and work hard to finish projects on tight deadlines and they did so willingly because they wanted to see me succeed.

2) You Can Trust Them

Ever wonder if your staff is working hard when you’re not there? Are you able to give over responsibility of major projects to your team and trust that they will be able to perform? I’ve never had to worry about somebody not completing their tasks or following through on something they said they were going to do. As long as you treat them with respect and communicate they will grind tooth and nail to finish the project properly.

3) You Know What They Are Really Like

I’m not suggesting hiring all your friends. You know there are some people who work diligently and others who are slackers. You know who you could spend all night hanging out with and who you wouldn’t be able to stand for more than a couple of hours before they get on your nerves. In a job interview people are always on their best behavior so you can’t realy get to know them. You already know the true personalities of your friends and will be able to tell in advance if there is a potential to work together or not.

4) You Know What They Want

You never want to hire someone just because they need a job - regardless of if they are you friend or not. You always want people who are genuinely interested in the position you have available and want to learn from you. Think about your friends and family - do they ask about your business? Are they excited by it? If they’re not passionate about working in your business then don’t even think about hiring them.

5) They Will Tell You The Truth

Another great thing about friends and family is that they tell you the truth. Many employees are afraid of their boss and say things that they think he / she wants to hear. Nobody wants to hire “yes men” - people who only give you the good news and cover up the bad. Your friends and family know you and will be far more honest with important information which might be painful to hear but will only help grow your business.

6) They Are More Loyal

If you have a position where your friend or family member is genuinely involved in because you’ve followed the above steps then you’ll also have a much more loyal worker. You won’t have people taking other projects while at your office. They won’t leave the company at the first chance when someone comes and offers them higher pay. They’ll have your back and will be more committed to making your business a success than someone who you don’t have that kind of relationship with.

Considering all the above points, I’m also assuming that you are a fair boss and treat everyone with respect. If you’re a control freak who makes life hell for employees then you deserve to have them run out on you.

What do you think? Have you worked with friends or family? What was your experience?

Dave Thomas starred in 652 commercials for Wendy’s Old Fashioned Hamburgers, more than any other person in television history.

But, he wasn’t just that friendly face you saw on TV with his white shirts and red ties; Thomas built his multi-billion dollar fast-food restaurant chain from the ground up, earning him a reputation as one of the most successful and loved entrepreneurs in American history.

Thomas’ father once told him, “You’ll never keep a job! I’ll be supporting you for the rest of your life.”

From being an anonymous baby who was unwanted by his birth parents to becoming a multi-million dollar CEO, Thomas made the vision he outlined as a 15 year old come true.

Through a combination of hard work, desire and his unique personality, Thomas rose to the top of the food chain. What were his success factors?

“When I was eight years old, I dreamed that I would one day own the best restaurant in the world. My restaurant would serve great tasting hamburgers made just the way you like them, and all of the customers would love the food and come back again and again. - From a school essay he wrote at 15 yrs called “The Pursuit of happiness.” I thought if I owned a restaurant, I could eat for free.

Only in America would a guy like me, from humble beginnings and without a high school diploma become successful. America gave me a chance to life the life I want and work to make my dreams come true. We should never take our freedoms for granted, and we should seize every opportunity presented to us. 

What do you need to start a business? Three simple things: know your product better than anyone. Know your customer, and have a burning desire to succeed. Take care of your business and your business will take care of you.

It all comes back to the basic. Serve customers the best-tasting food at a good value in a clean, comfortable restaurant, and they’ll keep coming back. Anytime I had any doubts, you know what I would do? I’d have a double cheese with mustard, pickle and onion, a bowl of chili and a Frosty. And I’d say, ‘I know we can sell this. It’s fantastic.’

If we take care of our customers every day and exceed their expectations, we’ll earn their loyalty. It all comes back to the basics: serve customers the best tasting food at a good value in a clean, comfortable restaurant and they’ll keep coming back. 

Hard work is good for the soul, and it keeps you from feeling sorry for yourself because you don’t have time. I think the harder you work, the more luck you have. If you want it bad enough…and try hard enough…you can get it. You can make your dreams come true.

If there are things you don’t like in the world you grew up in, make your own life different. You can do what you want to do. You can be what you want to be. There’s no one to stop you but yourself. Believe in your dream. People may tell you that you won’t make it, that you’re wasting your time. If you keep your dream in mind, have done your research and are willing to work hard, you can make it come true.“

This week’s Entrepreneur University comes thanks to Mike Michalowicz who  is the author of The Toilet Paper Entrepreneur and has written two other posts for the Young Entrepreneur Blog.

Congratulations! Your company has officially turned a profit! What? You didn’t get the memo? You thought your business was months, years away from the blessed black? Whoa! You must be thrilled to get this news. You must feel like doing a little happy dance, maybe even hopping down to the corner store for a celebratory six-pack.

Hold on, bucko. You’ve got two teeny, tiny, no-big-deal steps to take before you can count your chickens, err, cash. It will take all of five minutes, I promise. And then you can call your Mom.

•    First, open an interest-bearing escrow account online, one that even the entire Ocean’s Eleven team can’t access. You’ve got to guard those pennies from that thief in your office – YOU.

•    Next, transfer 5% of your last deposit into the account. That’s it. You’re done. (Until your next deposit, that is.)

Yeah!!! Tell all your Facebook friends, write your hometown newspaper, and stop total strangers on the street. Your business just officially turned a profit!  And will do it CONSISTENTLY!

The simple truth about cultivating a profitable business is you already have a profitable business, you’re just putting the profit back in the pool to be spent on new desk chairs and late night pizza runs. You’ve got to take that profit FIRST and put it where the sun don’t shine – or in the bank. Whatever you prefer.

This system, what I refer to as the Profit First Account (PFA), allows you to make a profit off of every sale. Not bad. Not bad at all. I know, I know, you’re wondering how the heck you’re supposed to run your business when you’re skimming 5% off the top? Easy. You adjust.

Five percent is doable. After a few weeks, you won’t even notice. You will adjust your spending, planning, and even your thinking to accommodate the swelling profits in your PFA. You’ll forget about the things you thought you needed and make do with what you have. (Come on, do you really need all of those paper clips? Join Office Depot Anonymous and get on with your life!)

Better yet, you will come up with scathingly brilliant ideas about how to best use the remaining 95% of your inbound revenue. In fact, you may actually come up with a remarkable innovation, one that could, say, catapult your business into the stratosphere of success. Imagine that.

The cherry on top of the PFA? Every quarter you get to take some of the money out and distribute it – TO YOURSELF. Eventually you’ll increase your percentage, transferring 10%-20% of each deposit into your PFA (at my company, we take 20% of every deposit). Whoa! Now you’re turning a massive profit for every single sale, building a multi-million dollar business one deposit at a time. Nice.

So, are you ready to party? Or you do you need to wait a minute for that transfer to go through?

Congrats!

Today we passed the 1,000 RSS reader mark (officially at 1,019)! Thank you for reading our blog, subscribing and, of course, commenting and adding your thoughts to our posts! I wanted to celebrate today by highlighting some of the most popular posts that I’ve created as judged by the number of page views.

We only installed Google Analytics in November of 2007 so the following results showcase posts from November 2007 to yesterday:

Over 80,000 Page Views (we hit the 1st page of Digg with this post)

• The Top 10 Mistakes People Make When Starting A Business

5,000 - 10,000 Page Views

• Pursue Your Passion - Pierre Omidyar (founder of eBay)

2,500 - 5,000 Page Views

• Live With No Regrets - Jeff Bezos
• The 6 Common Mistakes Entrepreneurs Make - Entrepreneur University
• Color Your Call To Action
• How Dov Charney Started American Apparel
• Top 10 Movies For Entrepreneurs
• 30 Internet Millionaires Under 30
• 2008 Link Love

1,000 - 2,500  Page Views

• 7 Insanely Helpful Websites for Venture Start-Ups
• Business Savvy - Part 4
• How To Make Money With SecondLife
• Top Ways to Get a Fresh Business Idea Off the Ground
• Top The 21 Celebrity Entrepreneurs
• Think Big - Donald Trump
• Obama or McCain - Who is More Small Business Friendly?
• 5 Tips To Sell Online Advertising
• 11 Ways To Find Products To Sell On eBay - Entrepreneur University

Thank you again for your loyalty to our blog! I’m looking forward to continuing to provide valuable ideas and motivational posts to help you build and grow your business. Next step is 2,000!

The congressional defeat of the proposed bailout plan by the Treasury led to one of the worst stock market days in history.

The result was an elimination of trillions of dollars in shareholder wealth.

The main reasoning for the rejection of the plan was that ordinary taxpayers should not have to subsidize the fat cats over on Wall Street.

What are entrepreneurs saying about the bailout plan? Mark Cuban (one of the Top 25 Visionaries, and creator of the The Top 7 Rules For Startups) is an American entrepreneur worth about $2.8 billion.

He is also the owner of the Dallas Mavericks and writes the popular blog, Blog Maverick.

According to Cuban:

“The bailout will boost access to credit quickly to consumers with good credit. For those with less than good credit, it won’t flow for a while. This may actually force people to save and pay down their credit cards. That’s a good thing.

We not only need the bailout, but we need far better transparency and oversight than the current form of the bill offered. You’re going to have to bailout, you’re going to have to inject liquidity, you’re going to have to take the bad loans and all the bad instruments off people’s balance sheets.

If the big three banks - JPMorgan, Citibank and Bank of America - get it wrong because they are not under any more oversight than what got us into this mess in the first place then we may not know we have a disaster with them until it’s too late. They may be too big to bail out.”

What do you think the government should do? Is there a better way to increase accountability and rescue the troubled American financial industry?

The average customer visits their local Costco 22 times a year. The company has become one of the largest in the U.S., with 473 outlets and more than $50 billion in sales, and is also the largest membership warehouse club chain in the world. Its founder and CEO, Jim Sinegal, has been called the Sam Walton of the 21st century for his low-key style and seeming defiance of all things Wall Street. But, whether investors like him or not, America – and much of the rest of the world – has fallen in love with his discount depots.

When Sinegal’s college presented him with its Most Distinguished Alumnus award, the Costco founder was almost left speechless. “I’ve never been told I’m a most distinguished anything,” was all he could say. With his poor grades and lack of focus in high school, it is doubtful that Sinegal’s teachers ever thought he would amount to much. But, today, with a billion dollar corporation under his belt, Sinegal remains not only one of the most accomplished, but also one of the most admired and liked CEOs in the industry. How did this once reckless young boy become the success he is today?

“My test scores were good, but my grades weren’t that good, because I needed focus. It was at San Diego Junior College (now City College) where I regained that focus, and paid attention, because deep down I knew education was important. I’ve never been told I’m a most distinguished anything.

Our business was founded so that small businesses could come in and buy essentially everything they needed for their business under one roof. Café owners could purchase all of their food and drink, cigarettes and candy, cleaning supplies, pots and pans, toilet paper and towels, pads and pencils, and so on.

One time [customers] may come in and see that we have some Coach handbags and they come in the next time and the Coach handbags aren’t there, but perhaps there are some Fila jackets. The attitude is that if you see it, you have got to buy it because it may not be there next time.

Technology has made us much more productive. With computers, fax machines, and cell phones we have more productive time during the course of the whole day and can react to situations more immediately. Sometimes we have so much information it’s more than we can deal with. Our web site and our e-commerce business are also profitable on a fully allocated basis, and that is somewhat of a milestone.

The reason that the dot-com companies didn’t succeed is that they were very good at the science end but they didn’t understand anything about the art of buying and selling merchandise. They thought that was the easy part but it turned out to be the most difficult. If you don’t have the right merchandise in the right place at the right time you can forget about everything else. All the satellites in the world aren’t going to help you. We only have one bullet in our gun, the right product at the right price.

We have said from the very beginning. We’re going to be a company that’s on a first-name basis with everyone. Imagine that you have 120,000 loyal ambassadors out there who are constantly saying good things about Costco. It has to be a significant advantage for you.

Our attitude has always been that if you hire good people and provide good wages and good jobs and more than that – if you provide careers – that good things will happen to your company. I don’t see what’s wrong with an employee earning enough to be able to buy a house or have a health plan for the family.

I think the biggest single thing that causes difficulty in the business world is the short-term view. We become obsessed with it. But it forces bad decisions.

You have to plan the opportunity to think about your business and plan what you’re going to do. You have to schedule it. Otherwise you’re just a hamster running on a treadmill; you’re never going to get anywhere. You’ve got to schedule it. Strategic planning is an important part of running any business and the more so for businesses that operating in multiple states and countries. If you’re a big-picture guy, you’re not in the picture. Retail is detail.“