Author: Jeff Cornwall

Dr. Jeff Cornwall is the inaugural Jack C. Massey Chair in Entrepreneurship at Belmont University in Nashville, Tenn. Dr. Cornwall's current research and teaching interests include entrepreneurial finance and entrepreneurial ethics.

Dr. Jeff Cornwall is the inaugural Jack C. Massey Chair in Entrepreneurship at Belmont University in Nashville, Tenn. Dr. Cornwall's current research and teaching interests include entrepreneurial finance and entrepreneurial ethics.

Dorm Room Entrepreneurs

One of my former dorm room entrepreneurs, Andy Tabar, sent me a story from CNN.com about the growing trend of students starting businesses on campus:

While the founders of Google built success in their garages,
these college students found it in their dorms. In addition to their course
work, studying for midterms and balancing extracurricular activities, they wrote
business proposals and figured out financing.

We are working with dozens of student entrepreneurs, operating out of their dorms and apartments.  We also give them some resources on campus to help create a runway for their ventures.  Below is a picture one of two hatcheries where our student entrepreneurs work on launching their businesses and forging a path into their post-college careers that is part of a system of co-curricular programs we have created to support our student entrepreneurs (click here for more detail).

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Culture and Labs

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This past Friday I led a seminar for our local chapter of EO called “An Intentional Culture.”

Whenever I talk about culture I always am reminded of a chocolate Labrador retriever we used to have named Jazzmyn.  While she was one of the sweetest dogs we have ever owned, anyone who has had a lab will tell you that they are a very high maintenance dog. 

Training is a life-long process with many labs.  If you ever let up, they will begin to go their own way — labs have a strong will and a mind of their own!

That is why Labrador retrievers are the best metaphor I can think of for the culture within a business.  Culture also can seem like it has a mind of its own.  Your culture will be shaped by everyone you hire, your market, your customers, and even investors. 

If you don’t continue to pay very close attention to your culture, it will begin to drift away from what you had intended.  Just like our old lab Jazzmyn, you can never take your eye off your culture.

Some entrepreneurs are driven by the desire to create a certain type of culture in the business.  For example, Nashville businesses like Emma (e-mail marketing) and redpepper (advertising and strategic marketing agency) consider building and sustaining their cultures to be one of their top priorities.  To make that happen, the founders and their team relentlessly work to build and sustain their cultures.

What is Keeping Entrepreneurs Awake at Night?

SmartBrief conducted a survey to find out what stresses entrepreneurs most these days.  Here is what entrepreneurs told SmartBrief causes them the most stress:

Complying with government regulations   28.76% 
Staying ahead of the competition   20.80% 
Managing employees/contractors   19.47% 
Making payroll   15.49% 
Dealing with customer issues   15.49%

Here is their take on these findings:

Employees, customers and payroll worries may keep you up at night, but they
lagged far behind the biggest stress factor of all: government regulations. Even
the competition (which, theoretically, is trying to put you out of business),
causes less stress than the government (which, theoretically, is trying to help
your business). In other words, government loans and educational programs may be
nice, but if Washington really wants to encourage entrepreneurial risk-taking,
it needs to get out of the way so you can get a decent night’s sleep.

The results are quite revealing, especially given the study I cited
earlier this week that shows the real state of regulation in the U.S.

I wish we’d follow Europe’s lead when it comes to business regulation (rather than socialized healthcare) — they are slashing small business regulations to help spur new business formation all over the continent.

Bootstrapping Lessons for College Graduates

Carl Lavin, managing editor at Forbes.com, has posed a question to those of us in the blog network:

Recently, the U.S. Bureau of Labor Statistics reported a jump in the unemployment rate to 10.2%.Some economists think we could be looking at 10.5% by early next year.  

Given these grim forecasts, how do you counsel recent college graduates and others entering the job market for the first time in this employment climate? Is there any advice or strategies you find particularly useful?

I tell my students and recent alumni that the age of entitlement is over. 

For my students — those who study entrepreneurship — this is not necessarily a bad thing.  The best chance they have to forge their way in this long a deep recession is to find their own path.  For many it is starting their own business.  While this is a tough time to start a business, it is a time that will highly favor those who know their way around the entrepreneurial block.  Entrepreneurs can no longer rely on the wave of high economic growth to carry them.  But if they have studied what we offer them in our classes, and applied it properly, they have a much better chance than the average entrepreneur of making it in what has become a cold and difficult world.

Even if a young person entering the workplace is not going to start a business, they need to look at themselves as a product that they are introducing to the market.  What are the needs in the market? Which of those needs do they have the ability to address?  How can they position themselves to take advantage of the opportunities that are out there?   

And rather than assume that the ideal job that will offer them instant fulfillment and gratification is just around the corner — because it is not — they need to view their career just like a scrappy, bootstrapping entrepreneur approaches them market.

Here are some tips:

  1. Take what the market gives you.  A bootstrapping entrepreneur may have lofty dreams, but recognizes that you have to start somewhere.  The first job, like most first ventures, is just the first step of a long journey.  But, you have to be willing to take that first step if you even hope to move ahead and have a chance to reach that ultimate destination. 
  2. Start with what you know and who you know.  The best strategy for launching a first business is to start with something that builds on your experiences and your knowledge.  The same is true about a career these days.  You best next job, or first full-time job coming out of school, is most likely going to build from experiences you already have had and people you already know.  It may not be glamorous, but its a job.
  3. Work with the resources you have.  The millennial generation seems to want to have what their baby boomer parents have spent a career accumulating, and they want it now!  Follow the path that my young bootstrapping entrepreneurs follow.  They are used to being poor college students, so they keep that lifestyle to help bootstrap their first venture.  Their recognize that their personal overhead is really part of the business overhead.  The lower their overhead is, the quicker they can reach break-even.  The same is true with a job.  Keep your lifestyle in poor college student mode — it will open up a world of jobs you might not otherwise consider.  Those jobs will eventually open the door to better ones.  Sure the pay is not what you had hoped you might see, but your goal is to get a track record and become economically independent — period.
  4. Keep on bootstrapping for years to come.  Experienced entrepreneurs learn that bootstrapping can come in handy even as a business grows.  Good times are eventually followed by bad ones — crises can, and will, happen.  Bootstrappers have a good record of weathering the tough times.  So young people entering the workplace should keep that same attitude.  Don’t assume that all the times ahead will be rosy.  Prepare yourself for future tough times.  Over a long career, more than one tough time will happen.
  5. Cash is King!  Save, save, and save some more.  A healthy bank account is a wonderful buffer from life’s slings and arrows.

Better Marketing in Tight Times

Trying to use social media and the latest in personal technology as a means to bootstrap your marketing in these tight economic times? 

Myventurepad offers several useful articles including an overview of why social media is so important for marketing and P.R., six tips for using Facebook more effectively, current trends in mobile web technology, some of the limitations of social media as a tool within traditional marketing systems, and how to manage Twitter more effectively and efficiently.

More on October Employment in Small Business

The NFIB has just released their employment report for October.  It is consistent with other reports we are seeing this week.

William C. Dunkelberg, chief economist for the NFIB, issued the following statement:
 
“Once again, the ‘good news’ is less bad news. Small business owners in October reported a decline in average employment per firm of 0.5 workers (seasonally adjusted) during the third quarter (prior three months to the survey), a marked improvement from the losses of about 0.8 employees reported in the prior three months and much better than the record loss of 1.26 workers posted in May.  

“Eight percent of the owners increased employment by an average of 3.5 workers per firm, but 19 percent reduced employment an average of 4.2 workers per firm (seasonally adjusted); both statistics are better than September readings.  The ‘job generating machine’ is still in reverse.  Sales are not picking up, so survival requires continuous attention to costs and labor costs loom large.  An increase in the minimum wage of more than 10 percent was hardly helpful, as teen unemployment has surged (over 440,000 jobs lost since April, the teen unemployment rate rose to 25.9 percent).  Still, job reductions are fading and job creation will cross the zero line by the end of the year. Eight percent (seasonally adjusted) reported unfilled job openings, unchanged from August and September.  

“Over the next three months, 16 percent plan to reduce employment (unchanged), and 9 percent plan to create new jobs (up 2 points), yielding a seasonally adjusted net negative 1 percent of owners planning to create new jobs, a 3 point improvement, but still more firms are planning to cut jobs than planning to add.”

Hiring Up, But Pay is Down

According to SurePayroll’s monthly Small Business Scorecard survey (customer survey based on 25,000 small businesses nationwide), small business hiring is up slightly in October from the month of September, bringing us to a 2.2 percent increase year-to-date. Unfortunately, small business salaries are headed in the opposite direction, with a year-to-date decline of 7.3 percent. 

Studies like this one reinforce my belief that we are in a prolonged recession from can you buy topamax online which there is no clear end in sight.  Wall Street’s ups and downs do not measure the real economy.  Until small business starts expanding, there is little hope of a sustainable upturn anytime soon.

Also of concern in this survey is the finding that optimism among small business owners surveyed is continuing to decline, dropping to 50 percent – one of the lowest of levels of the year.

Lessons from Maslow

I have found myself quoting good old Abraham Maslow a lot these days.  Maslow was the psychologist who develop the theory on hierarchy of needs as an explanation of what motivates us.
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Maslow said that we have to take care of each level of needs before we worry about dealing with the next level.

This has become a helpful tool to try and explain how the world really works to my Millennial students.  They seem to assume that the lower level needs are a given.  I guess that is the fault of us Boomers who raised them to think that way.

I find myself redirecting our students away from trying to find fulfillment in their careers — if they are lucky that may come so day.  Job one right now is, well, to find “job one” coming out of college.  They may create it through their business or find one that can meet their basic needs — food, shelter, etc.

James Shewmaker sent along a great blog post from Dr. Paul White’s blog that speaks to this:

I continue to “preach” the concept that a student’s career path is the combination of understanding themselves (their abilities, interests, personality style, etc.) and knowledge about the world of work. And I fully believe that we continually overemphasize the individual aspect of the equation. In fact, (although it is a bit of an over-statement) I have come to believe that it really doesn’t matter what a student wants to do.  Ask anyone one of the tens of thousands of individuals who have been laid off, furloughed or who can’t find work.

The issue isn’t “what do I want to do” but “what goods or services are needed that people are willing to pay for”?   As a culture, we have forgotten that the primary purpose of a career is to provide financially for ourselves and our family.  This is accomplished by providing a service (either customers or an employer) that someone needs and is willing to pay for — and obviously, that we are qualified to provide.

The good news is that my students seem to be catching on.  Their plans are getting more realistic and doable, and those who are not pursuing their own ventures are getting much more pragmatic.

What is curious to me is how all of this will impact our entrepreneurial nature of culture in America over the long term.  But more on that in a later post….