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A cutting-edge biotech company using transgenic mice to produce treatments for life-threatening diseases can spend years working hard toward a sensible business goal before seeing real profits. Still, when its stock soars 4000 percent in one year, investors sit up and take notice. Under the circumstances, a strategic plan and statistical models go a long way toward keeping the real value of the business in perspective.
Founding a business was so much fun for three Harvard juniors that they did it several times--until they found something that worked. They begged, bartered and borrowed resources, with a little help from their folks. And, because they knew their industry and added value as managers, they grew their temp agency for Web professionals into a permanent, international leader.
Kay Koplovitz saw few peers in broadcasting when she negotiated national cable rights to major-league sports as the founder of USA Networks. Today, as chair of the National Women's Business Council, she's working to help other entrepreneurial women form the networks they need to gain access to financing. To make sure more doors open wider, women's venture-capital forums and investment clubs are building strategic connections, providing money and changing the way lenders keep score. Still, says Koplovitz, there's more to accomplish in the coming years.
When Frieda Caplan went into business for herself, she was the only woman in the produce industry. That gave her a national presence, but the real reason for her success was that her company filled an important niche. Now it's the leading distributor of specialty fruits and vegetables. Along the way, the founder learned some important lessons about financing. And she's still going to work every day-with her daughters.
Sue Hesse left a corporate career and started her own business so she could cut down on her travel schedule and raise her children. By the time she sold it to spend more time with them, she had learned that even in an old-fashioned industry, numbers could outweigh gender. Performance-based incentive compensation turned out to be the strategy that propelled her and other women forward. Getting support from other entrepreneurs, male or female, is her other key to success.
When cash flow turned positive and profits started coming in, the co-founder of an Internet start-up sought his advisory board's approval for new expenses. What he got was a barrage of questions: "Where are next year's projections? What's your mission statement?" As the business grew, the board made sure it stayed on track financially, raising prices as well as morale. And when the company was acquired, everybody cashed in.
Everything a computer person needs to learn for her business, she can get from her mentors--when they become members of her advisory board. First they provide expertise in sales, marketing, management and money matters. Then, morphing into a board of directors, they keep her on budget, on time and focused on her exit strategy. But perhaps their best lesson is that learning should be passed along to others.
Even an experienced serial entrepreneur can run into glitches when he starts a company dependent on complex software. Sales soared right away at this online computer business, leaving suppliers and customer-service staffers struggling to keep up. The solution--sell the business and start up another one with even more innovative technology--could only have worked in a virtual operation unburdened by infrastructure.
Financiers decode business plans, looking for the secrets of probable success. If yours shows a customer-driven opportunity that your company's talent, passion and skin in the game can actually pull off, they're more likely to be impressed.
Two hardworking entrepreneurs start an online publishing venture as a virtual company. They think they can communicate because they're wired. So, why are they always meeting at the local coffee shop? Profitable but inefficient, their business needs office space in order to grow beyond the launch phase--and, like parents, the founders have to get out of its way.
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