
For many small business owners, the process of budgeting is limited to figuring out where to get the cash to meet next week's payroll.
There are so many financial fires to put out in a given week that it's hard to find the time to do any short-or long-range financial planning. But failing to plan financially might mean that you are unknowingly planning to fail.
Business budgeting is one of the most powerful financial tools available to any small-business owner. Put simply, maintaining a good short- and long-range financial plan enables you to control your cash flow instead of having it control you.
The most effective financial budget includes both a short-range month-to-month plan for at least a calendar year and a long-range quarter-to-quarter plan you use for financial statement reporting. It should be prepared during the two months preceding the fiscal year-end to allow ample time for sufficient information-gathering.
The long-range plan should cover a period of at least three years (some go up to five years) on a quarterly basis, or even an annual basis. The long-term budget should be updated when the short-range plan is prepared.
While some owners prefer to leave the one-year budget unchanged for the year in which it provides projections, others adjust the budget during the year based on certain financial occurrences, such as an unplanned equipment purchase or a larger-than-expected upward sales trend.
Using the budget as an ongoing planning tool during a given year certainly is recommended. However, here is a word to the wise: budgeting is vital, but it is important to avoid getting so caught up in the budget process that you forget to keep doing business.
It is important to budget both the income statement and balance sheet. This enables you to consider potential cash-flow needs for our entire operation, not just as they pertain to income and expenses. For instance, if you had already been in business for a couple of years and were adding a new product line, you would need to consider the impact of inventory purchases on cash flow.
Budgeting only the income statement also doesn't allow a full analysis of the effect of potential capital expenditures on your financial picture. For instance, if you are planning to purchase real estate for your operation, you need to budget the effect the debt service will have on cash flow.
In the future, a budget can also help you determine the potential effects of expanding your facilities and the resulting higher rent payments of debt service.
In the startup phase, you will have to make reasonable assumptions about your business in establishing your budget. You will need to ask questions such as:
- How much can be sold in the first year?
- How much will sales grow in the following year?
- How will the products and/or services you are selling be priced?
- How much will it cost to produce your product? How much inventory will you need?
- What will your operating expenses be?
- How many employees will you need? How much will you pay them? How much will you pay yourself? What benefits will you offer? What will your payroll or unemployment taxes be?
- What will the income tax rate be? Will your business be an S corporation or a C corporation?
- What will your facilities needs be? How much will it cost you in rent or debt service for these facilities?
- What equipment will be needed to start the business? How much will it cost? Will there be additional equipment needs in subsequent years?
- What payment terms will you offer customers if you sell on credit? What payment terms will your suppliers give you?
- How much will you need to borrow? What will the collateral be? What will the interest rate be?
As for the actual preparation of the budget, you can create it manually or with the budgeting function that comes with most bookkeeping software packages.

From the late Steve Jobs to Twitter's Jack Dorsey, certain entrepreneurs seem to spring from the womb predisposed to success. Not only are they exceptionally smart, but they also have a dogged belief in their own abilities and a similar unrelenting passion for achieving their vision.
Put simply, they don't do things like "regular" people. Case in point: Los Altos, Calif.-based Aaron Levie, the 28-year-old co-founder of online data-storage company Box, now valued at more than $1 billion. As a student at the University of Southern California, Levie shunned the typical college social scene. "If people were going out on Saturday night, I preferred to be on my computer and working on the next internet idea," he says. "I just recognized that I was a bit different than everyone else."
While Levie is hardly alone, he's certainly not in the majority among entrepreneurs. "They're a different breed," claims Jeff Cornwall, Belmont University's director of the Center for Entrepreneurship in Nashville, Tenn. "In the last four years, I can only identify five undergrad students [like Levie] that could fit into that high-growth entrepreneur category."
With odds like that, the question isn't whether founders like Levie are different or special -- it's obvious that they are -- it's whether mere mortals like the rest of us stand a chance at helming fast-growth, trailblazing startups. Fortunately, the answer is a qualified yes.

You may not be as technologically brilliant as Levie and his ilk, but you can nurture the other trait behind their successes: intense competitiveness, in which losing is not an option.
"Just like in big-league sports, a lot of people don't make it," Cornwall says, and not because these people don't have talent. "They don't have that absolute drive and competitive edge."
But if you've got the drive, channeling it into a career as a successful entrepreneur is easier than ever thanks to more than 200 universities worldwide offering entrepreneurship as a study focus, countless meet-up groups in various cities, and seminars and workshops that teach you how to launch a business.
Many of these programs will also help you hone your competitive edge with pitch- and business-plan contests to focus your new company's direction and target market.
The one caveat to charging ahead with these new skills is understanding that it can take years--perhaps an entire career--to polish them. Take Levie, for example. "Every single morning I wake up to e-mails about a new competitor that's launched something, a new service that's trying to compete with us or a change in the marketplace that we ‘have' to pay attention to," he says. "You need to discover what is really noise, what's not going to matter as much and what does. That's taken me eight years to get to 10 percent of the way to understanding what that looks like."
Like this article? Get this issue right now on iPad, Nook or Kindle Fire.
This article was originally published in the September 2013 print edition of Entrepreneur's StartUps with the headline: Put Your Ambition in Drive.
If you were to walk into the typical college dorm room these days, you might hear the CEOs of tomorrow talking about anything from Ramen to revenue.
In 1999, when StudyMode got its start, I was in college, and things weren't so startup centric. Google was founded a year earlier, Napster was immensely popular and the first dot-com boom hadn't yet burst. A group of us decided to build a website that focused on helping students share and review research papers and course notes. We didn't know how to program for the web, but within a few months, we taught ourselves and launched a site that was completely automated. Fourteen years later, we are still working on that dorm-room project.
Creating this type of company is increasingly a top goal for college students worldwide. And with recent advances in technology and web access, students -- armed with just a laptop and a big idea -- really do have an opportunity to become the next Steve Jobs or Bill Gates.
So, how can today's young entrepreneurs best leverage this kind of opportunity to maximize their chances of success? Here are a few tips I learned along the way:
Business takes place on Quora and LinkedIn, not just Facebook.
While most college students focus on Facebook and Instagram to share party stories and midterm nightmares, real business influencers can be found elsewhere, such as Twitter, LinkedIn and Quora. A large, professional social media presence can help you build a name and a brand before you even pitch your product.
You might be surprised how many big name companies will answer questions or give advice when you approach them properly through social media. The key is to get your story and perspective out there early, and always be gracious and respectful when networking with industry leaders in your field.
Related: 5 Easy Ways to Connect With Online InfluencersNo matter if you study psychology, learn how to code...just a little.
We're approaching an age where everyone will need at least some programming knowledge to succeed. This goes double for young entrepreneurs trying to make their way in the tech world.
Consider taking at least one programming class. Or, if your schedule doesn't permit a structured course, make an effort to teach yourself during school breaks. Websites like Codecademy are making this easier than ever, and the time you put in will pay dividends for your future.
Related: How to Become a Technical Co-Founder on the QuickDon't be fooled by Zuckerberg, get the degree.
Any time you think about how icons like Mark Zuckerberg quit college, you should also think about the huge number of ambitious dropouts whose ideas didn't pan out in the way that they expected. A recent article in The Atlantic highlights the fact that American college dropouts are 71 percent more likely to be unemployed and four times more likely to default on student loans than their diploma-wielding counterparts.
Graduating doesn't mean you've sold out. It just means you're forming a backup plan. StudyMode was started in a dorm room, but it grew legs while I worked at a movie studio in Los Angeles and mapped out my next steps.
Related: These 20 Teenagers Are Getting $100,000 Each to Drop Out of School and Become EntrepreneursIf and when you fail, don't give up.
Don't give up. Start a company in school. If it fails, start another one. Being in college is a great time to start a business because many students don't have the financial, family and work responsibilities that they'll have once they graduate.
If nothing else, each failed attempt is a lesson learned. And each lesson learned in college is significantly cheaper than a lesson learned in the real world, both in terms of actual dollars and in opportunity cost.
There is no reason why a college student can't start and maintain a lucrative business from his or her dorm room. It's not easy, but nothing worthwhile is ever easy.
What was your dorm-room startup story? Let us know with a comment.


Even for those who back into entrepreneurship, starting up remains a deliberate act that requires thoughtful planning.
According to Clinical Psychologist Meg Jay in her recent TED Talk, "Why 30 Is Not the New 20," 80 percent of life's most defining moments happen by age 35. Little did I know that, on a recent two-hour plane ride, I would experience one of these moments.
Beginning in late 2012, I caught the entrepreneurial bug. Hearing a mentor speak about his own business and clients gave me an intense desire to innovate. I started discovering more twentysomething entrepreneurs online who were moving their career needle at a rapid pace. I wanted to attain that same influence in the sports business community. But I never quite got my idea off the ground.
Fast forward to June 2nd of this year, the day Dr. Jay's book, The Defining Decade: Why Your 20s Matter & How To Make The Most Of Them Now, landing on my lap as I traveled from Detroit to the Big Apple for an eight-week internship. After 70 pages, Dr. Jay had me convinced: This is the perfect time to start up.
Related: What My Corporate Internship Taught Me About EntrepreneurshipBelow are three key lessons that I learned from Dr. Jay about how to take the plunge into uncertainty and become an entrepreneur. Maybe she will make a believer out of you, too.
1. Grab some identity capital.
First a definition: "Identity capital is how we build ourselves -- bit by bit, over time," explains Dr. Jay. Some capital gets placed on a resume, like your undergraduate degree or unpaid internships, while other capital is more personal, such as where we're from or how we interact with our colleagues. Those twentysomethings who embark on exploration eventually develop a stronger sense of self, along with a more nuanced picture of their identities. That in turn, can lead to a more developed sense of purpose and confidence boost.
As I sat there bound for New York City, I quickly realized I needed to grab some identity capital. I wanted more than ever to solidify my identity as a sports career consultant instead of just having a lingering thought that it could happen.
I eventually decided to troll twitter for aspiring sports-business professionals who wanted "free" coaching. The response was overwhelming, as clients started referring friends. To date, I have assisted roughly 15 individuals around topics such as online/personal branding, resume and cover-letter review, and how to leverage social media to advance your career. I did not realize it at the time, but I was investing in myself for my future and who I might want to be next. I now had a clearer sense of myself.
Related: How to Find a Personal Trainer for Your Business2. Engage with weak ties.
Your close circle of friends. Your family. Your significant other. They are your urban tribe and offer you support in times of need. Their similarities are usually their detriment, though. They are unable to offer perspective because they know much of the same information that you do. Where do you then turn? Our weak ties -- those one-time acquaintances, LinkedIn connections, and former employers -- feel very different from our urban tribes. Yet, it is through weak ties that information and opportunity spread, according to Dr. Jay.
None of my family members or close friends are entrepreneurs. Naturally, they wouldn't be too helpful in my quest to start up. That led me to LinkedIn, the best resource for expanding one's network and engaging with your weak ties, in my opinion.
Over the past six weeks, I have been reaching out to sports-business clubs/societies along with sports-management professors. By consistently communicating with individuals, I have developed relationships – effectively strengthening my weak ties in areas where I needed help.
3. Conquer present bias.
During our 20s, the human brain experiences its second growth spurt. In a sense, we rewire ourselves for the remaining years of life. As a result, it can be harder for some people to plan for the future and accept the consequences for present actions. Others continue to stay distracted and avoid making any decisions whatsoever.
Thanks to Dr. Jay's narrative, she ingrained in me a sense of urgency, not to rush life along, but rather, to be intentional with my everyday present actions. The little success I had garnered in the past two years and the positive feedback I received from my "free" clients was enough to convince me to enter the world of entrepreneurship for real.
Related: From Zero to 'Shark Tank' Hero in 3 Months FlatBeginning each month, I outline my plan of action for the next 30 days. Even looking further out, I know how I want the next 60, 90, even 120 days to go. By having a timeline of defined events and benchmarks, I am better able to construct how my future will unfold.
**Apply Now** Are you an enthusiastic college- or graduate-student entrepreneur, eager to share your on-campus experiences? Apply to be a College Treps columnist.The author is an Entrepreneur contributor. The opinions expressed are those of the writer.

As one of TheLadders' original 20 employees, I know first-hand how rewarding and challenging a job at a startup can be, especially when you're new to the workforce. Play your cards right and you will learn more in one year than your friends will pick up in five or more working at larger, more traditional organizations.
The media likes to sensationalize the perks and fun of working at a startup, but startup life is no day at the beach. You'll find that most operate with a "work hard, play hard" mentality. While you'll enjoy plenty of happy hours and ping pong tournaments, you'll also find the work intensely demanding -- likely, far more than anything you've previously experienced.
Here are seven tips I've learned over the years to help you not only survive, but thrive at a startup:
1. Embrace the mission.
The most successful entrepreneurs are incredibly passionate about their work. It's the fire in their bellies that drives them to succeed. Similarly, if you're going to commit to working at a startup, you have to believe in its mission. Look for organizations that are doing something you're interested in. You won't make it at a business if you're not genuinely excited about the work.
2. Acknowledge the long hours -- and accept them.
If you're going to make it in the startup world, you first need to acknowledge that the hours will be long. The second step is to accept this fact. In the beginning, it wasn't unusual for my team to work more than twelve hours a day or come in over the weekend to meet our goals. In a startup, there's always more work to be done and not enough people to take it on. You're not hanging around the office for the sake of face time -- there's work to be done. Accept this fact and you're already in better shape.
3. Set expectations with loved ones.
Not everyone in your circle of friends will understand or appreciate the commitment a startup demands. It's very important to set expectations with your loved ones. Nothing is worse than having your family call at 5:30 p.m. to ask how your day went when your work day is far from over. To avoid these frustrations, set expectations up front such as when people can reach you and through what forms of communication.
4. Take initiative.
On my first day, I was handed my computer in its box and a small packet containing basic instructions for using the company's systems and handling customer service inquiries. That day I learned two things: 1) How to set up a desktop computer on my own, and 2) that if I wanted to make it at this company, I would need to take initiative. Don't expect your company to have it all figured out already; a startup is often still establishing its guidelines and formalizing its business. That's one of the reasons why the work is both exciting and scary. Instead of shying away, embrace the chaos and take an active role in shaping the business.
5. Fill in the blanks.
In startup land, priorities and projects can change overnight. Communicate openly and often to avoid confusion. Check in regularly with your team to ensure that everyone is on the same page and working toward the same goal. If you're unsure if a certain task is being taken care of, speak up! Don't assume someone else is working on it. It's better to over-communicate than let something important slip through the cracks.
6. Strive for balance.
I won't lie and say that it's easy to strike the right balance between work and play, but thanks to mobile technology, it's easier than ever before. Identify what matters most to you and look for creative ways to make time for those priorities. For instance, find out if you can work from home on certain evenings so you can eat dinner with your loved ones and still make the standing 8 p.m. conference call with your colleagues. Alternatively, take advantage of mobile apps like FaceTime that allow you to remain connected to your family while putting in long hours at the office.
7. Know when to take a breather.
The job will be stressful at times. That's why it's important to know when to walk away from the laptop so you can come back with a fresh set of eyes. Find an outlet for your stress, whether it's banging on a drum set, meditating for ten minutes in the back of the office or playing a game of darts with a colleague. Recharge your batteries and come back ready to tackle the latest challenge head-on with a fresh perspective.
Take these tips to heart, and you'll be prepared to tackle the hard work involved in a startup – and reap the benefits of the enriching experience.

Are you a serial entrepreneur or a struggling one? What is the difference and does it even matter? Is it more important to play the game or win it? Do you get better at the game as you play it repeatedly?
While only you can truly answer these questions for yourself, they have been nagging me long enough to make me look for evidence. Before delving any further into the issue, though, I must add a caveat.
Success alone cannot define who we are -- especially when playing inherently high-risk games like entrepreneurship, where skill and luck both play their part. Therefore, my purpose here is to examining the likelihood of success for repeat entrepreneurs and offer strategies for those planning to give it another shot.
While the startup community seems absolutely certain that you are more likely to succeed on your second, third and fourth venture than on you first, this view relying on "learning by doing" is not actually borne out by facts. While many entrepreneurs do have an upward trajectory of performance, study after study has found results to the contrary.
Across countries and time, studies have failed to detect any significant beneficial effects of learning from failure. Instead they have found the performance of "newbies" and "seasoned" entrepreneurs to be pretty identical. A study by researchers in the UK showed that there was no difference between the performance of first-time founders and "serial" entrepreneurs, which was similar to the results from two Norwegian studies that did not find any difference in their behavior or performance. A 2006 study in the U.S. compared performance of novice and serial entrepreneurs and found no evidence for either superior performance by serial entrepreneurs or effects of learning from failure. A very comprehensive 2013 study in the U.S. using data that tracked serial entrepreneurs for up to quarter of a century once again did not find any evidence for persistent learning effects.
While some entrepreneurs certainly learn from past ventures and seem to do better on their next ones, most don't. So much for learning from your mistakes. Don't assume that having already experienced "entrepreneurship" will give you what it takes to succeed the next time.
If you call yourself a serial entrepreneur and actually want to get the most out of your past experiences -- consider these five approaches:
1. Don't assume you'll automatically learn from your mistakes. Take active steps to learn from your experiences. Develop a habit of reflecting on and documenting your thoughts on a regular basis.
2. Learn to be productive about your failures. It helps to be able to deconstruct failures into meaningful scenarios for learning and growth.
3. Don't wait too long to dive into your next venture. Research shows the learning benefits from starting your own business are temporary and disappear very quickly. Don't let that happen to you.
4. Don't let past successes get to your head. While everyone talks about not letting past failures weigh you down, people don't really talk about getting carried away with your past successes. Research indicates a tendency of entrepreneurs to fail after being previously successful, which might be caused by overconfidence. Set realistic business goals to help avoid that kind of failure and disappointment.
5. Build your network. At the least, you should be able to maintain personal connections you made when starting your last business, even if it was a failed venture. Keep nurturing these relationships, not just to help you learn and grow, but to give you connections for the business you start next time around.
The author is an Entrepreneur contributor. The opinions expressed are those of the writer.

With a host of companies under his belt, serial entre-preneur Rich Schmelzer launched his latest company, Boulder, Colo.-based GeoPalz, pretty much the only way he knew how. He bootstrapped.
But then a funny thing happened: Schmelzer met the Swoosh.
Yes, that Swoosh--Nike. Schmelzer's company makes the iBitz, a personal activity monitor for kids. And late last year, when Nike announced it was launching a special accelerator for startups developing high-tech solutions that could leverage the Nike+ platform, it was serendipity.
"It literally couldn't have been a better fit," says Schmelzer, who serves as CEO of GeoPalz. "I had done companies the old-fashioned way. It was time to take a different approach."
Schmelzer and his GeoPalz co-founders--his wife, Sheri, and Alexandra O'Leary--represent a new wave of entrepreneurs launching ventures with a little help from companies who've done it before. Like renowned programs such as Y Combinator and Dreamit Ventures, these corporate-run initiatives help early- and midstage companies get from the concept phase through adolescence and into young adulthood. Some include capital investments; others don't. Most incorporate mentorship. All aim to foster and facilitate innovation across the board.
Why Big Companies Want In
Conceptually, these programs--once called "intrapreneurships," a term now generally considered outdated--are not new. Think of them as incubators or accelerators, developing potentially profitable ideas and offering supportive environments for entrepreneurs--only within the confines of a big company.
They also are becoming more prevalent. While there are no official studies, Cambridge, Mass.-based consulting firm New Markets Advisors says that a "significant" portion of Fortune 500 companies--including Procter & Gamble, IBM, Walgreens and The Hershey Company--likely have some sort of incubator cooking in at least one business unit.
Stephen Wunker, managing director of New Markets Advisors, says that for corporations that must devote their energies to day-to-day operations and quarterly earnings, incubators offer forays into fuzzy, long-term prospects that can come into focus over time. "Given the pace of change that threatens established businesses, incubators are becoming more and more important to create growth options," he says. "For many organizations, having an internal incubator is like an insurance policy--if the market moves, the companies are ready to change directions or grow new business quickly."
Shell launched a corporate incubator as an offshoot of its R&D division almost 20 years ago. Dubbed GameChanger, the program is designed and run like an angel investment fund. About 25 percent of the projects come from inside, but the incubator also evaluates proposals from universities and other outsiders--so long as the startups are focused on new initiatives involving energy.
The typical incubation period ranges from 18 to 24 months, and the average investment is $500,000, according to program manager Russ Conser. The company accepts 30 to 40 new startups per year and aims to capitalize on 10 to 20 percent of them.
"We view success as any company that secures a subsequent round of funding," Conser says, noting that in some cases Shell "funds" a company itself.
There are other benefits for the companies that run these programs. They can cherry-pick projects to extend and amplify the power of their brands. They can launch new firms in their image. They can have a stake in the future.
In the case of Nike, which worked with TechStars to launch the 90-day Nike+ Accelerator earlier this year, the goal was simple: to grow the Nike+ ecosystem. Dan Cherian, general manager of Nike's Sustainable Business & Innovation Lab, says that for startups, the program included relocation to Oregon for the boot camp and a host of opportunities to learn and grow.
"You don't have to do equity deals to make a difference," Cherian says. "We see participation as something bigger, something that can foster an even better relationship long-term."
Benefits for Entrepreneurs
In almost all cases, participation in a corporate incubator or accelerator enables entrepreneurs to leverage the parent company's resources to scale their business, utilize new technologies and access competencies such as regulatory and/or scientific expertise that otherwise might be unavailable to independent startups.
In many instances, involvement with a corporate incubator also can mean sizable financial assistance and professional services (such as legal advice) worth big bucks. For instance, companies participating in Blue Startups, an incubator from Honolulu-based Blue Planet Software, receive $20,000 in cash and a variety of professional services valued at more than $500,000.
Samantha Godfrey, CEO and co-founder of San Diego-based Pharmly, a pharmaceutical bidding marketplace that graduated from the program in June, says her company benefited from mentors who gave guidance for which she would have paid top dollar had she been working on her own, as well as from $60,000 in credit for Microsoft's Azure cloud platform. "Every little bit helped," she says. "And the fact that it was all right there, at our fingertips, enabled us to do in three months what it would have taken us a year to complete otherwise."
There are also intangible benefits to participating in such programs. Schmelzer credits Nike+ Accelerator mentors with helping him transform GeoPalz's investor pitches. Before the tutorials, the pitches made no mention of the GeoPalz founders' previous company, Jibbitz, which made charms for Crocs shoes and eventually sold to Crocs for $20 million. After extensive critiques, Schmelzer changed the script.
"All that time I was afraid of VCs hearing about our experience with consumer goods and telling us we couldn't sell technology," he says. "The feedback helped me realize that the key takeaway was bigger than that--with Jibbitz, we built a business selling to moms and kids, and that's exactly the same audience we're trying to go after today."
In a few cases, the ultimate benefit of corporate incubators is the fast track to acquisition. Wunker of New Markets Advisors likens the process to "buying a vowel" on Wheel of Fortune. "You're giving up a bit of your potential upside of succeeding by IPO, but you're increasing the possibility of succeeding by trade sale or in other ways," he says. "If your goal in life is to get a reasonable exit but not shoot for the moon, going into a corporate incubator might be a good approach."
Inevitable Challenges
Corporate programs are not all unicorns and rainbows. Generally they involve lengthy application processes. They can force companies to focus development on areas that benefit the parent company more than the startup itself.
In some cases, participation requires entrepreneurs to sign over a portion of equity or accept an ownership stake. There are day-to-day pitfalls, too, such as getting caught up in the politics, dysfunction and/or bureaucracy that run rampant in large entities.
Another potential hurdle: a disconnect between the incubator and its parent company. Matt Bell, president of Houston-based GeoDynamics, which manufactures equipment for the oil and gas industry, experienced this as part of Shell's GameChanger program last decade. Bell, who graduated from the program, had capitalized on a new technology for enhancing the minerals-discovery process. But he says Shell was subsequently slow to adopt the technology, which prompted other potential users to question its usefulness.
"Ultimately we didn't get enough of an endorsement [from] the parent organization," Bell recalls. "It's great to have the name of a big company backing you, but if they don't do something with it, it can become a real problem."
Other challenges are more abstract. A number of entrepreneurs wonder about the extent to which participating in corporate incubators could be construed as "selling out." Others wonder whether industry players would be comfortable purchasing a product that was incubated by a competitor.
Venture capitalists, too, have concerns. Michael Harden, co-founder of Artis Ventures in San Francisco, says that while he likes the concept of corporate incubators, he is "much more likely" to be skeptical of a company that has participated in one (as opposed to a traditional, stand-alone incubator or accelerator).
"If I'm investing in a company that was created and coddled by a big company early on, my presumption is that their market is going to be limited," says Harden, whose firm has invested in YouTube, Practice Fusion and InternMatch. "I'm not saying I wouldn't invest, but I am saying I'd have a lot more questions before feeling comfortable doing so."
What to Look For
So how do you know if a particular program is right for you? According to experts and entrepreneurs who have been through them firsthand, there are a few key issues to consider.
Clearly, it's important that the program you select is focused somewhat on the industry you wish to enter. Pharmly's Godfrey says it simply makes "good business sense" to apply for one that is--at least in some way--connected to your business. "You'll get something out of any incubator or accelerator," she says, "but you'll get more out of one designed to serve the industry you're aiming to join."
Second, you want to identify a potential friend on the inside. Wunker notes that within big organizations, people may not have the same allegiances and priorities--just because they have the same logo on their business cards doesn't mean everyone's goals will align with yours. "Ideally, you want to work with people who understand your business, appreciate how you're approaching the challenges and, ultimately, want to see you succeed," he says. "If you can't find at least one of those advocates at a particular incubator, perhaps it's not the incubator for you."
Next, find a mentor network you can leverage. Schmelzer loves to talk about how mentors at the Nike+ Accelerator forced him and his partners to overhaul their GeoPalz business plan to focus on the lifetime value of their child customers. His advice: Seek programs with ample and accessible mentor rosters, so you can put yourself in a position to soak up as much advice as possible.
"The great thing about an incubator is that you get to pull together all of this great advice and, if you're nimble enough, use it to change," he says. "Sometimes as entrepreneurs we get so stuck on a plan that the best thing for us to do is put ourselves in an environment that questions everything."
Finally, remember that there's no such thing as free money. Bell of GeoDynamics points out that if a corporate incubator agrees to give you funding to help you further your idea, it comes at a cost, whether it is equity, control or something else. If you're not open to that setup, it's better to look for programs through which no money is exchanged. "On some level, many of these relationships end up being quid pro quo," he warns. "The sooner you come to terms with that, the better off you'll be."
Like this article? Get this issue right now on iPad, Nook or Kindle Fire.
This article was originally published in the September 2013 print edition of Entrepreneur with the headline: Inside Job.

My first corporate internship was as a summer analyst at Wells Fargo right before my senior year in college.
Confused about whether I was going to pursue the path of entrepreneurship or work for a company after graduation, I approached my internship with an open mind. I figured the experience might help me identify my strengths and, of course, test the waters before deciding my future career. Turns out, I was right. And the lessons I took away from my internship are some of the greatest assets I use as an entrepreneur today.
For those who have ambitions to run a startup or, maybe you already are, my advice is: Don't underestimate the power of a good internship. Here are the greatest takeaways I learned from my summer job as a banker:
Stick to deadlines. Tim Ferriss is a major advocate for the principal of Parkinson's Law -- which, simply put, posits that a task can become leagues more difficult the longer a deadline. By contrast, a tight deadline will prompt a tight turnaround with less stress over time.
During my internship, I was given strict deadlines for each project assigned to me. Whenever I took on a new project, I was always instructed to make sure I knew when each project was due by. Most of these deadlines were short, and to excel I always made sure I used my time as efficiently as possible -- knowing that a few hours of web surfing and I would be turning in my assignment late.
Related: How to Find a Personal Trainer for Your BusinessAs an entrepreneur, you never have enough time in the day, making it crucial to treasure each hour of your time. When you're manager gives you your first deadline, you'll begin to realize how valuable time really is.
Don't rely on talent alone. Heading into my internship, I was extremely confident that my talent was going to be my greatest asset. In reality, this couldn't have been further from the truth. Each corporation has a set way of operating, key terms to know, and skills that you must master to really be a standout in your office. Only when I memorized the proper terms, studied the internship curriculum, and continued to learn did I start to stand out.
As an entrepreneur, I have applied this principle when I learn new skills that are needed to help grow our company. As an entrepreneur, talent is important. But the only way to improve, is to constantly focus on refining your skills.
Lead by example. During my internship, I took pride in always being one of the first people in the office and one of the last people to leave. As an intern, you have to prove to your fellow employees that you're willing to go the extra mile to get the job done.
As you begin to grow your own company, employees will look to you as a leader and a role model for your company. The best leaders are the ones who fight down in the trenches with the people that follow them. Learn to prove how far you will go for your team, and you'll build a passionate group of people to support you.
Related: Forget Advisors -- How to Find and Woo a Power MentorSeek out opportunity. There were times during my internship where it appeared that there was nothing left for me to do. Wanting to take on new challenges, I went around the office and asked what I could help with. To my amazement, I was able to take on new assignments and exciting tasks that would not have been offered to me unless I made the effort to request them.
The best entrepreneurs aren't flourishing because an opportunity fell in their laps. They achieved success by going out of their way to make something happen.
Know your customer. Always ask what your customer needs and how you can help. At Wells Fargo, we kept in touch with our customers, figured out what kinds of people they were and how we fit in.
This is a takeaway many entrepreneurs forget. Spending years creating a product that looks amazing but nobody wants isn't helpful. Instead, build something that makes your customers' lives easier, and always look for more ways to serve them.
**Apply Now** Are you an enthusiastic college- or graduate-student entrepreneur, eager to share your on-campus experiences? Apply to be a College Treps columnist.
The internet, unlike your mom, is fickle and ruthless. Attention spans are short, and there's always a cute cat video just a click away. That means you've got to be compelling. And you've absolutely got to make something people actually want or they'll never stick around, let alone come back.
I encounter plenty of startup founders who have a great technology they've engineered and shoehorn that into a solution that they hope people will want. To me, this route is much harder than identifying a real problem first and then solving it as simply as possible.
Worse are the founders who aren't able to build anything yet and are simply brainstorming and drawing mock-ups in the vacuum of their own heads. Find your customers right now and talk to them. Are they just being polite? Bear in mind that most people don't like giving bad or honest feedback. That positive reinforcement about your idea doesn't mean a thing until someone actually pays you or until you see repeat, engaged visitors coming to your website.
So how do you make something that people actually want? Start with a real problem.
Related: 10 Successful Entrepreneurs on How to Be AwesomeObviously it should be a problem for you, but be sure it's also a problem for others. The thing is, sometimes people don't realize they have a problem. And often just telling them they have a problem will only elicit an "Oh, that's good enough for me." As the old cliché goes, we're creatures of habit. It's really hard to persuade someone to try your thing when the status quo is good enough. But put a better solution in front of the same person and suddenly the status quo looks repugnant.
This is precisely what happened with hotel- and flight-booking service hipmunk. Few people Adam Goldstein or Steve Huffman spoke with before launch thought there was a problem with how they searched for flights. They took for granted that you had to sift through tons of terrible flights and hunt across a mess of tabs for the best itinerary. It wasn't until we launched and consumers saw our agony-free alternative that they realized how bad everything else was by comparison.
You've undoubtedly encountered products or services that have frustrated you. Keep a notepad or a tablet handy and write down whatever is upsetting you. There's a good chance you'll find a business in those notes.
For Adam Goldstein, it was his awful experiences booking flights for the MIT debate team motivated him to start hipmunk because he figured there had to be a better way to search for flights online. Similarly, Airbnb got its start because the founders needed to pay their rent and realized there were lots of other people who would pay to rent the founders' unused space.

So many successful companies start out like this: the founders were having a problem, and they found a way to solve it. A company doesn't have to start this way, but it's the easiest place to start. Make something you'd use and, ideally, pay money for. That's what we did in the case of reddit and hipmunk -- the latter being the one having a baked-in business model from the very start.
Related: No Tech Background? No ProblemAnother starting point is to have an idea that very few people other than the founders can actually build. These technical feats provide a natural defense against competition. Remember, every hard problem you solve drops a massive obstacle in front of anyone who'd want to replicate you. Certain problems haven't been solved because none of the few people smart enough to do so have made it happen. Look at something like Google, which co-founders Larry Page and Sergey Brin were technically capable of building at a time when not many people were. Back then, there were very few people smart enough to build their own search engine let alone imbue it with software that could crawl and rank the entire World Wide Web.
There's also a third route: think of an idea that is rooted in a perspective that everyone else is missing because they don't see the potential today. A friend and fellow entrepreneur, Chris Dixon, describes the extreme version of this by saying, "The next big thing will start out looking like a toy."
One example of this would be Kickstarter. Its first project, Drawing for Dollars, surpassed its humble $20 goal by raising $35, which came from three backers who bought artwork from an artist in Long Island City. Less than three years later, a team using the same platform raised $10 million in preorders for a futuristic watch called Pebble.
The idea of a group of people pitching in to make something come to fruition is hardly novel, but the way the Kickstarter team leveraged the internet to pitch to millions of people simultaneously -- as opposed to a coterie of traditional investors -- certainly was.
Related: Startup Wisdom From 3 Millionaire EntrepreneursThis article was excerpted from Without Their Permission: How the 21st Century Will Be Made, Not Managed, by Alexis Ohanian (Business Plus, 2013).

It's fall and for college students, you know what that means: It's back to school. If you're girding for bad cafeteria food and all-nighters, you're smart. If you're also pondering a startup idea, you're probably crazy. That said, if you can write a business plan in between term papers, the university setting is one of the richest environments on earth for young entrepreneurs.
“I've been incredibly fortunate in that my university has offered some amazing resources that have helped me grow my business,” says Jonathan Weber, founder of the Stroudsburg, Pa., web-design startup Marathon Studios Inc. A senior at East Stroudsburg University in Pennsylvania, Weber appreciates free office space in an on-campus business accelerator, access to grant money and a network of contacts.
And while it's well known that college entrepreneurs have a great many resources at their fingertips – as Weber can attest – it's less known about the variety of those resources. Here are some of the best resources that await many college entrepreneurs just beyond their dorm rooms:
University-based incubator and accelerator programs: Startup UCLA is an accelerator that aims to connect students at UCLA with the tech scene in Los Angeles. It's particularly clutch for connecting participants with successful alumni, says Emerson Taymor, managing partner at philosophie, a company he founded as a student five years ago. Check to see if there’s an incubator program at your school. Not only can alumni help nurture your seedling of a company, these programs typically also proffer connections to advisors, mentors and venture capitalists.
Related: The Pros and Cons of Working for EquityOther students: College campuses are brimming with co-eds who can not only serve as potential customers and focus group participants, but also valuable connections. “I joined the company I work for now because I was a classmate of one of the co-founders,” says Brandy Anderson, marketing specialist at AppIt Ventures in Denver. Very few startups succeed as individual efforts. Cultivating a group of talented and innovation-minded friends in class and in university organizations is one of the best things a student entrepreneur can do on campus.
Sponsored internships: If a startup can't pay, look to your university. When Claremont McKenna College student Alex Chang connected with the perfect internship after his sophomore year, he feared he wouldn’t be able to do it because the startup that wanted to bring him on for the summer couldn’t pay him. “This is where CMC’s sponsored internship program came in,” he says. “I applied for the sponsorship and they ended up awarding me $2,500 for the summer.”
Free or reduced cost technology, software and apps: Access to valuable equipment is a major bonus of being an entrepreneur still enrolled in school. Bruce Bachenheimer, clinical professor of management at Pace University as well as director of its entrepreneurship program, explains one aspect of why his school's program is so valuable to student startups: “The Entrepreneurship Lab has assembled an impressive collection of technology resources, including high-performance computers, sophisticated software, a professional video studio, a surface computer, and a 3D printer; as well as a wide variety of desktop, laptop and tablet computers.”
And, even if your school doesn’t have a lab dedicated to student entrepreneurs, the fact that you own an email address ending in “.edu” opens doors to freebies. For example, ProjectionHub is free for any college student with a valid .edu email address, says Adam Hoeksema, ProjectionHub's co-founder.
Related: Why You Should Ditch Your Billion-Dollar Business AmbitionsCompetitions: Sometimes, you just need the thrill of a good old fashioned competition to light a fire under your startup concept. “One of the best resources available to entrepreneurs in college is the innovation competition,” says Ethan Meyer of PitchBurner. “These can come in many forms and include submissions that require developing a business plan, quick pitch, or business model to participate.” Young business owners develop skills, receive valuable feedback, and get access to capital by getting involved in these competitions. Look for a listing of events at Bizplancompetitions.com.
Free space: It can be difficult to stay focused on the myriad tasks associated with running a startup when you’re trying to do it out of your apartment or dorm room. Fortunately, many schools are now offering student entrepreneurs the gift of square footage. “I’m a student at Wake Forest University in Winston-Salem, N.C., and one great resource I’ve utilized through my University’s entrepreneurship program is office space at an incubator,” says Austin Evers, student and founder of Appuous.com. “I brought my business to college and Wake Forest has been great about helping me out when I need it.”