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EA-TOKYO SEMINAR SUMMARIES
Being An Entrepreneur in Japan
Mr. Terrie Lloyd
(Profile)
August 2003

Stories, opinions, and advice on Japan and entrepreneurship taken from 20 years of experience in starting, operating and eventually selling businesses here in Japan - Terrie Lloyd shared his wisdom at the EA-Tokyo August Seminar and told us "How to Survive and Succeed as an Entrepreneur in Tokyo".

Quotes:
Isao Kato - “That was the best presentation I have heard in the last 6 months. I think that didn’t just fit into my interst but also matched perfectly with the reason people attended the seminar - enterpreneurship needs to survive in today’s Japan. Ebr>
Jim Hunter -  EA great presentation last night. Terrie provided some great insight in doing business in Japan. And, he shared some very valuable tips and advice...Terrie really walks his talk. Ebr>
P. Philip - “Terrie’s credentials are good because he has built business systems. I think this is the true sign of an entrepreneur - someone who can build an asset, made up of systems and people, and then have someone else see enough value in it to pay a heap of money for it. If you can find more people like that, the wisdom they can impart will be of great value to your audience. Ebr>
Since the age of 25, Terrie has been building companies from the ground floor up. In total he has started 10 companies in Japan and 5 in other Asian countries. His companies focus on technology and information businesses and are driven by his personal mission of opening up Japan to other countries.

Terrie covered a vast number of topics and in surprising detail, given the duration of the presentation. Because of the detail and relevancy of his topics, creating a summary has proved to be very difficult. Thus, we have highlighted parts of his presentation and hopefully we will have a full summary, or the entire presentation available on the EA-Tokyo web site in the near future.

START-UP DESIGN DECISIONS

What do you want to do? How badly do you want to do it? What will you do to achieve it? Do you want it badly enough you will borrow from your family? mortgage your home? Are you really ready to do this? Do you want big or small, alone or with employees?

Plan Backwards

What do you want as your final goal? In 5 or 10 years time how much money do you want to be making? What size is the company?

If you know that then you can say my business is going to make a 30% increase each year and then you just go back down and go down and down until you reach zero. That’s how long it will take you to grow the business. It’s very simple. I always start with the goal and then sales and then how much costs would be if I had a 15% profit out of those sales. I normally take 70-80% as being the people cost and that tells me how many people I can have. This idea of working backwards if very easy and logical.

Mentors
Take out your power point and make a ‘SALES Epresentation to contacts, friends and families who might be customers and get their reactions.

LEVERAGE & MASS PRODUCTION

“If I could give you one secret of success it would be “Mass Production E If you can do this you can make money. If you are employer you must find ways of dumbing down the processes to lower costs. Ebr>

Resources, Processes and Goals

“Quality of the lever is your processes. If you don’t have good processes it doesn’t matter how good your positioning else is. “___“If you have a friend who has a company. Why don’t you ask them if you can use their systems. i.e. ∁Eforms for hiring, accounting. Ebr>
PLANNING TIPS
LLoyd’s rule of thumb:
* JPY 5m capital for every person employed in first year
* Overheads of JPY350k per person
* Find industry co. size threshold and grow it quickly
* 1 to 10 - One manager per 10 team members
* When you get to 100 people you have two layers of management
* Number 1 resource is people, spend 80% of time finding “top gun Eemployees and never stop
* Diversity for survival (nobody likes this advice)
* Remember the 33%-67% rule in terms of a BoD power struggles (If you own 33% of the company you can veto the BoD when deciding how much you are paid.

Another number is 18% - that’s the figure when the holding becomes relevant on their balance sheet. Don’t ask corporate investment for over this amount, you are asking too much.)

GETTING FINANCE

Japan is an interesting place, you don’t have to have a visa. For KK you need one resident. As long as one member has a hanko, you can go to the Peoples Finance Corporation. You need one year of clear operation but you don’t even need to make profits, and you can borrow anywhere from 200,000-300,000 YEN. I usually recommend spending between 5,000,000-10,000,000 YEN and try not to lose too much money. It helps to be in the black in the last three months. The least you can expect to get is 10% of your last years revenue and the most is somewhere around 30%.

Also if you can raise a million dollar letter of credit from a foreign affiliated businesses you can use that letter to take a bank loan for a million dollars in Japan.

At the end of his presentation Terrie advised us all that the bottom of the business cycle is the best time to start a business (to be well positioned for the recovery) but entrepreneurship is not for everyone because it takes a serious toll on your personal life. “When you’re an entrepreneur you’re obsessed. If you don’t have that kind of obsession you should probably stick with a regular job. Especially when you get started if you aren’t working until 12:00 every night you probably don’t believe enough to get things done fast enough or quick enough to get things off the ground. EHowever, the results of becoming an entrepreneur are that, if you are successful, the success will beyond your wildest dreams. You can find Terrie’s personal commentary at http://www.terrie.com

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