It’s a high-risk business that can come with high rewards, and Las Vegas is ripe for the next big idea, local experts say.
Tough economic times have made entrepreneurship a tempting business model for enterprising people, one that can pay off in the Las Vegas market in particular, said Andrew Hardin, director of the University of Nevada, Las Vegas’ Center for Entrepreneurship.
“We have the perfect climate for entrepreneurship here,” Hardin said.
The Center for Entrepreneurship was created in 2005 to assist emerging entrepreneurs. It works as an administrative unit within the UNLV Lee Business School to provide opportunities for students, faculty and the community to learn about entrepreneurship.
“We are doing several things with the state and it’s really exciting,” he said.
The center works with the Southern Nevada Business Plan, in conjunction with Las Vegas Business Press, where applicants have a chance to receive more than $50,000 in cash. The center has helped 187 startups in Clark and Lincoln counties.
The center also has the Rebel Venture Fund, which uses a founding gift from Jeff Moskow of $500,000. Deadline for entries is Nov. 30. The Rebel Venture Fund management board consists of local venture capitalists, local attorneys, successful entrepreneurs, business executives and angel investors, who all oversee the investment process in detail.
“For UNLV to have a venture fund, it’s a big deal,” Hardin said. “We’re teaching people about entrepreneurship and angel investors and there are only a few of those in the nation. Within the process we teach the students through real world experience. It’s a really cool program. We can assess people’s needs and send them to the appropriate group and we’re always happy to do that. That’s what we are here for.”
The main reason people want to start their own business is to be their own boss, he said. They may think they have a really good idea, but often people tend to launch into the business and find out later it’s not what the market wants.
“People get afraid their idea may get stolen so they (plunge) ahead,” he said.
His tip? Research, research and more research before even laying out a business plan can give you a head start on other entrepreneurs.
“The first thing they want to do is talk to customers, know if your business has a chance,” he said. “You have to talk to at least 100 people, and it’s also important to talk to competitors to have the best chance of success.”
There’s more to a good idea than the basics. Often it comes down to chance.
“Absolutely, it’s true that there is luck,” he said. “A successful entrepreneur hits upon the right idea at the right time.”
But it’s not just about luck; you have to have faith in your idea.
“It’s very, very important to stick with it if you believe in it,” he said. “If you don’t believe in your product completely, you have a less chance of making it.”
Successful entrepreneurs have had significant failures, something they don’t hide from.
“Most entrepreneurs have had a failure and they brag about it,” he said. “They say they have lots of scars. Entrepreneurs learn from their mistakes. They don’t give up.”
They also are able to persuade creditors to invest in their product. A good investor knows the risk, and is willing to put out the money based on the passion, thorough business plan and embattled experience of the entrepreneur.
“Investors love the excitement of it and look for home runs and they don’t know which one will pay off,” he said. “They know 1 in 10 will make it, so they play the game.”
The investment opportunity in Las Vegas is growing.
“A lot of people see this as a rising place for entrepreneurs,” Hardin said.
The $50 million Silver State Opportunities Fund and the Battle Born Venture are two thriving areas for future startups to explore.
“There is a growing entrepreneur eco system and investors are aware of that,” Hardin said.
Zappos is a good example, said Michael Durant, founder and CEO of Creating Genius, www.creatinggen.com.
“Zappos has set a standard,” said Durant, a longtime Las Vegas business media executive. “From employees to customers, they all get to experience the brand. They do their culture very well.”
The key to any successful business, and particularly starting your own business based on your original idea, is knowing why you are in business.
“If you do it right, there is no way the world can’t notice,” Durant said.
Locally, there is a lot of opportunity for those looking to launch their own business.
“The biggest thing about Las Vegas compared to Los Angeles, New York or San Francisco, is that the sort of level of entry to do anything is so much lower,” he said. “There is no gauntlet. If you have tenacity and a halfway decent idea no one is going to stop you.”
Durant has watched as people have spent thousands to hundreds of thousands of dollars on a business idea and still not succeed.
“They don’t start with their why,” he said. “They have a company that may be doing the same thing as other companies and they aren’t truly coming to the core of why they are doing it.”
For an example of good business, Durant says to take a page from the business and marketing model of Apple and Red Bull.
“They aren’t selling computers and energy drinks, they are selling you an experience,” Durant said. “They are giving you an opportunity to live their brand. People buy it because they want to be a part of that culture.”
They also have large marketing budgets but they are looking at spending their money differently, not just through the basic social media and advertising.
To prepare, research your market and look at other companies that are doing well with social media. Since they already have the model for you, mimic what they are doing.
Although social media is a great platform, don’t try to do everything at once.
“Start with the top four, You Tube, Twitter, Facebook and Instagram,” he said. “Move on to others that are significant to your industry when you get your foundation set.”
Don’t try to sell people, build a relationship with them.
“Every now and then put a bit of your personal info into your social media,” Durant said. “Don’t make it all about selling the product, sell the experience.”
Once you’ve garnered a solid social media following, ask your followers about their likes, their dislikes and get to know them personally.
“They are giving you their wishes, creating business, you are engaging them,” he said. “Keep it light; don’t push the very hard sales. Look at what your market is asking you for. And then respond to them.”
When hiring, don’t employ people based on emotion or simply because someone wants to offer their services for free to be on the ground floor of your great idea.
“Someone will come in and not want to be paid, just want to work for free, and that sounds great, but if you don’t have the foundation you will fail because they will change your vision for you or you will watch people walk out of the door,” he said.
Entrepreneurship isn’t a new idea.
“We are actually going back to what originally what made this country great,” Durant said. “It was about entrepreneurs. I don’t think people should be afraid. Make mistakes, take the risk and keep going. The pay out at the end of being an entrepreneur is better than the end of 10 years working in a job you may not like for someone else.”
If you decide to go into business for yourself, take heed, take notes and be available 24/7.
“Entrepreneurship is a heartbeat; if you flatline, you die,” Durant said. “You have to have passion and empathy, not sympathy. You have to be OK with charging your value and your worth. If someone says no, someone else will say yes. And be OK with that.”