By Vaclav Muchna, co-founder and CEO of Y Soft Corporation
Entrepreneurs often have a lot going on when starting a new company – from developing a new product or service to trying to get market traction and hiring the right people. Needless to say, it can be very stressful and requires a lot of hard work and dedication.
While a crucial part of working in the startup world is to learn from your mistakes, the ultimate goal for any young entrepreneurs is to avoid making major mistakes that not only hurt the company itself but those who have chosen to follow them in their venture.This includes investors, employees, early adopters and the support of loyal family members.Here are some of my early experiences, mistakes and lessons that I have learned along the way as an entrepreneur:
Have a vision and be ready to fight for it
I began my journey in early 1998 in The Czech Republic, where entrepreneurs at the time had a bad reputation and were often known as people who would illegally steal other people’s money. So, you can imagine what my parents felt like when I told them that I wanted to become one.However, I legally needed their approval as I was required to register a business address as a limited liability company. My parents finally agreed under one condition, which was to continue with my university studies and get a degree.
At the time I was studying IT, which was a new topic at the university I was attending. While it was an interesting course, it was almost impossible to keep up with the university work while trying to set up a business. I was extremely passionate about my new venture and dedicated all my time to it. Shortly after, I got kicked out of the university, mostly for the fact that I didn’t show up much (Note: this was Masaryk University which my company now extensively works with, ironically).
The point I’m trying to make here is that you will have doubters and obstacles – a lot of obstacles – but you just have to be clear on your vision and be ready to fight for it. At the early stages of my company’s development I would take on almost any projects slightly linked to custom software development in order to make money. I had various projects going on at the same time and while some clients paid in cash, others would pay in shares. At one point my team and I had five global projects all at once and I felt like the king of the world. However, we failed in all five projects, all at the same time. It was devastating and shortly after my long-term business partner decided to give up on us. Luckily, I had another business partner. However, over the coming years we lost various employees along the way and it took us five years in total to grow and become a sustainable business of three employees.
We didn’t grow overnight but we never gave up because we had a vision and we worked really hard for it.
Know when to ask for help
From the early days of starting my company I knew that I wanted to expand and become a global company. I always thought to myself that country borders were defined by politicians and that there shouldn’t be any borders when it came to business. When it was time to scale the business, I decided to sell through channel partners. I developed several partnerships and through multiple references and connections we started to spread around Europe, mostly in Central and Eastern Europe. We weren’t able to tackle Western Europe until 2008.
The key to our success was knowing our limitations and asking for help when it was needed. You cannot grow into a multi-million company without others and their help and this means different things for different companies. For example, for some companies this may mean taking the avenue of selling part of their company in shares in order to grow, while others may look for external investors or, in our case partners who assist with the sales channel. Whatever it is, decide what is important for you and don’t be afraid to go after it.
Always think ahead and innovate
Since the early days of my company, people kept predicting that paper printing would come to an end. It’s 2019 now and printing is still going strong, with recent research from Quocirca stating that the majority (64 per cent) of business users expect printing to still be important by 2025.
Still, you should therefore always think ahead of the sector you’re in and innovate as much as possible. Come up with complicated ideas that no one else has thought about and dare to make them a reality. While I knew that printing would remain as a crucial part of every company’s existence, I knew that we needed to diversify. 3D printing was not a new invention when I decided to explore it but with time and careful thinking, we managed to develop the world’s first 3D print management service.
Know your company values
As entrepreneurs we have a greater responsibility to create and manage our company values because one, we set out an example for others within the company to follow and two, company values are closely tied to performance. You might think that you are a young, fun and hardworking company but it’s only your employees that can tell you how things really are.In one of our company surveys, our employees ranked openness and innovation as our core values. We then decided to implement these core values into performance by offering financial rewards to those who exemplify these values.The bonuses at our company are now based on three areas: company performance, team performance and company culture fit. These bonuses are given quarterly and our employees’performance is judged based on group opinion, as well as individual performance and their personal KPIs. All this goes to show that culture really matters. If you want to make your organisation an inspiring place to be show it to your employees with your actions.
Always plan for the future
We now sell in over 100 countries and have 16 offices worldwide. Although this success did not come overnight, we had a strong vision from the beginning, we worked very hard to get there and I don’t have any plans to slow down anytime soon. Looking at the future, our core focus is in the US and China, but we’re always interested in exploring new countries such as India and Brazil. Whatever it is that you do, always remember to plan for the future. A sudden success or a client win might make you think that you’ve got it all figured out but if you want to build a sustainable business you have to be prepared for the future.
It all starts with a vision, hard work and planning.
Battling Covid collateral damage, Renault says 2021 will be volatile
By Gilles Guillaume
PARIS (Reuters) – Renault said on Friday it is still fighting the lingering effects of the COVID-19 pandemic, including a shortage of semiconductor chips, that could make for another rough year for the French carmaker.
Renault reported an 8 billion euro ($9.7 billion) loss for 2020 which, combined with gloomy take on the market, sent its shares down more than 5% in late morning trading.
“We are in the midst of a battle to try to manage a difficult year in terms of supply chains, of components,” Chief Executive Luca de Meo told reporters. “This is all the collateral damage of the Covid pandemic… we will have a fairly volatile year.”
De Meo, who took over last July, is looking at ways to boost profitability and sales at Renault while pushing ahead with cost cuts. There were early signs of improving momentum as margins inched up in the second half of 2020.
The group gave no financial guidance for this year, although it said it might reach a target of achieving 2 billion euros in costs cuts by 2023 ahead of time, possibly by December.
Executives said they were confident the carmaker could be profitable in the second half of 2021, but that they lacked sufficient market visibility to provide a forecast.
Renault struck a cautious note, saying it was focused on its recovery but warned orders had faltered in early 2021 as pandemic restrictions continued in some countries.
The group is facing new challenges as the European Union tightens emissions regulations and after rivals PSA and Fiat Chrysler joined forces to create Stellantis, the world’s fourth-biggest automaker.
The auto industry endured a tough 2020 but a swift rebound in premium car sales in China helped companies such as Volkswagen and Daimler to weather the storm.
Auto companies globally have since been hit by a shortage of semiconductors that has forced production cuts worldwide.
“The beginning of the year has shown some signs of weakness,” De Meo told analysts, but added the chip shortage should be resolved by the second half of 2021. “We have taken the necessary measures to anticipate and overcome challenges.”
Renault estimated the chip shortage could reduce its production by about 100,000 vehicles this year.
The group was already loss-making in 2019, but took a sharp hit in 2020 during lockdowns to fight the pandemic, which also hurt its Japanese partner Nissan.
Analysts polled by Refinitiv had expected a 7.4 billion euro loss for 2020. The group posted negative free cash flow for 2020.
The 2018 arrest of Carlos Ghosn, who formerly lead the alliance between Renault and Nissan, plunged the automakers into turmoil.
In a further sign that the companies have been working to repair the alliance, De Meo told journalists that Renault and Nissan will announce new joint products together in the coming weeks or months.
Renault has begun to raise prices on some car models, and group operating profit, which was negative for 2020 as a whole, improved in the last six months of the year, reaching 866 million euros or 3.5% of revenue.
Analysts at Jefferies said the operating performance was better than expected. Sales were still falling in the second half, but less sharply.
Renault is slashing jobs and trimming its range of cars, allowing it to slice spending in areas like research and development as it focuses on redressing its finances. It is also pivoting more towards electric cars as part of its revamp.
It was already struggling more than some rivals with sliding sales before the pandemic, after years of a vast expansion drive it is now trying to rein in, focusing on profitable markets.
De Meo told journalists on Friday that the French carmaker will make three new higher-margin models at its Palencia plant in Spain, where manufacturing costs are lower, between 2022 and 2024.
($1 = 0.8269 euros)
(Reporting by Gilles Guillaume and Sarah White in Paris, Nick Carey in London; Editing by Christopher Cushing, David Evans and Jan Harvey)
UK delays review of business rates tax until autumn
LONDON (Reuters) – Britain’s finance ministry said it would delay publication of its review of business rates – a tax paid by companies based on the value of the property they occupy – until the autumn when the economic outlook should be clearer.
Many companies are demanding reductions in their business rates to help them compete with online retailers.
“Due to the ongoing and wide-ranging impacts of the pandemic and economic uncertainty, the government said the review’s final report would be released later in the year when there is more clarity on the long-term state of the economy and the public finances,” the ministry said.
Finance minister Rishi Sunak has granted a temporary business rates exemption to companies in the retail, hospitality, and leisure sectors, costing over 10 billion pounds ($14 billion). Sunak is due to announce his next round of support measures for the economy on March 3.
($1 = 0.7152 pounds)
(Writing by William Schomberg, editing by David Milliken)
Discounter Pepco has all of Europe in its sights
By James Davey
LONDON (Reuters) – Pepco Group, which owns British discount retailer Poundland, has targeted 400 store openings across Europe in its 2020-21 financial year as it expands its PEPCO brand beyond central and eastern Europe, its boss said on Friday.
The group opened a net 327 new stores in its 2019-20 year, taking the total to 3,021 in 15 countries. The PEPCO brand entered western Europe for the first time with openings in Italy and it plans its first foray into Spain in April or May.
Chief Executive Andy Bond said its five stores in Italy have traded “super well” so far.
“That’s given us a lot of confidence that we can now start building PEPCO into western Europe and that expands our market opportunity from roughly 100 million people (in central and eastern Europe) to roughly 500 million people,” he told Reuters.
To further illustrate the brand’s potential he noted that the group has more than 1,000 PEPCO shops in Poland, which has a significantly smaller population and gross domestic product than Italy or Spain.
The company, which also owns the Dealz brand in Europe but does not trade online, has already opened more than 100 of the targeted 400 new stores this financial year.
Pepco Group is part of South African conglomerate Steinhoff, which is still battling the fallout of a 2017 accounting scandal.
Since 2019 Steinhoff and its creditors have been evaluating a range of strategic options for Pepco Group, including a potential public listing, private equity sale or trade sale.
That process was delayed by the pandemic, but Steinhoff said last month that it had resumed.
“The business will be up for sale at the right time. It’s a case of when, rather than if,” said Bond, a former boss of British supermarket chain Asda.
Pepco Group on Friday reported a 31% drop in full-year core earnings, citing temporary coronavirus-related store closures.
Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) were 229 million euros ($277 million) for the year to Sept. 30, against 331 million euros the previous year.
Sales rose 3% to 3.5 billion euros, reflecting new store openings.
($1 = 0.8279 euros)
(Reporting by James Davey; Editing by David Goodman)
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