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.

Happy Thanksgiving

Each year I share the original proclamation for our American Thanksgiving holiday.  Even in difficult times we have so much to be thankful for.  This is still a land of bountiful opportunities.  President Washington’s words remind us the importance of giving thanks to God for all of his blessings with a humble heart.

“Whereas it is the duty of all nations to acknowledge the providence of Almighty God, to obey His will, to be grateful for His benefits, and humbly to implore His protection and favor; and Whereas both Houses of Congress have, by their joint committee, requested me to recommend to the people of the United States a day of public thanksgiving and prayer, to be observed by acknowledging with grateful hearts the many and signal favors of Almighty God, especially by affording them an opportunity peaceably to establish a form of government for their safety and happiness:

“Now, therefore, I do recommend and assign Thursday, the 26th day of November next, to be devoted by the people of these States to the service of that great and glorious Being who is the beneficent author of all the good that was, that is, or that will be; that we may then all unite in rendering unto Him our sincere and humble thanks for His kind care and protection of the people of this country previous to their becoming a nation; for the signal and manifold mercies and the favorable interpositions of His providence in the course and conclusion of the late war; for the great degree of tranquility, union, and plenty which we have since enjoyed; for the peaceable and rational manner in which we have been enable to establish constitutions of government for our safety and happiness, and particularly the national one now lately instituted for the civil and religious liberty with which we are blessed, and the means we have of acquiring and diffusing useful knowledge; and, in general, for all the great and various favors which He has been pleased to confer upon us.

“And also that we may then unite in most humbly offering our prayers and supplications to the great Lord and Ruler of Nations and beseech Him to pardon our national and other transgressions; to enable us all, whether in public or private stations, to perform our several and relative duties properly and punctually; to render our National Government a blessing to all the people by constantly being a Government of wise, just, and constitutional laws, discreetly and faithfully executed and obeyed; to protect and guide all sovereigns and nations (especially such as have shown kindness to us), and to bless them with good governments, peace, and concord; to promote the knowledge and practice of true religion and virtue, and the increase of science among them and us; and, generally to grant unto all mankind such a degree of temporal prosperity as He alone knows to be best.

“Given under my hand, at the city of New York, the 3rd day of October, A.D. 1789.”

George Washington

Why Cash is King

Here is the first of my three columns for the Tennessean that will be focusing on managing cash flow in tough times:

The phrase “Cash is King” has become a mantra in today’s tougher economic times. Several readers of this column have begun to ask specific questions about why cash is so important. They want to know how they can improve cash flow, and what to do with the cash they’re able to build up in their businesses.

There are four key reasons why watching cash flow in a business is more important than ever.

First, you can anticipate greater uncertainty of sales over the next several months. Most businesses are seeing smaller and less frequent purchases by customers.

Where a strong cash position is particularly important is during “sales shocks,” which can occur when large, steady customers suddenly stop ordering. If this is because they have found a better price from a competitor, you have a chance to win them back. But, more and more businesses are waking up one morning to discover that one of their longtime customers has suffered a business failure.

Secondly, as I have written about in the past, bank credit is getting more difficult for small businesses to obtain and some entrepreneurs are beginning to have their loans called by their banks.

SBA loans are drying up

The news last week that the Small Business Administration loan program funding also is drying up makes finding credit even tougher. SBA loan funding is down more than 50 percent from this time last year. The SBA program offers guarantees for qualified small-business loans.

Third, just as your business may be feeling the effects of the economic slowdown, so are your suppliers. You should anticipate that your suppliers may begin to tighten their terms on trade credit to help shore up their cash flow.

Some may even begin to refuse to sell to you on credit, even if you have been paying on a timely basis in the past.

Finally, even in a bad economy you may find new opportunities. Don’t count on any external sources such as banks or investors to fund new initiatives.

If you do not have the cash to fund expanding into new products, new markets, or even to buy up struggling competitors, you may not be able to pursue these opportunities.

If you do not do so already, watch your cash flow statements very carefully. And if the business starts to have consistent negative cash flow, you need to also measure and monitor how long your current cash will last.

Develop weekly, monthly and quarterly cash budgets to help make decisions on which bills need to get paid, or can get paid, and when.

In my next column, I will offer specific steps that can help to improve cash flow for a small business, even in a weak economy.

November’s Great Ideas

There are more great ideas in the running for the ,000 prize at ideablob.  Make sure to check out the November finalists and cast your vote!

By the way, we will be hosting a “Blob Live” event in Nashville.

Here are the details:

Bloblive Nashville
December 3, 2008 (7:00 PM – 9:00 PM)
Belmont University
Beaman Student Center, Rooms A&B
Nashville, Tennessee
Doors open at 7:00 PM – Idea sharing and collaboration begins at 7:30 PM

You can register for this event here.

Creating Great Workplaces

One of the reasons that many entrepreneurs go into business is to create great places to work.  They want to create an environment where people are treated well and allowed to excel.

Winning Workplaces is a nonprofit committed to helping small and midsize organizations create high-performance workplaces.  They offer many good ideas on how to improve the work climate and culture in entrepreneurial ventures.  In addition to their website, they have a very good blog and a monthly on-line newsletter that you can subscribe to here.

Losing Hope?

If the results of a new survey from Junior Achievement are correct, the youth of today may be losing hope in entrepreneurship as a career path.  From Independent Street:

A poll released yesterday by Junior Achievement USA, a Colorado Springs, Colo., organization that hosts after-school programs for youth, found that fewer teens surveyed were interested in eventually starting their own businesses than just a year earlier. It found 60% of the 712 13- to 18-year-olds surveyed indicated they’d be interested in becoming entrepreneurs, compared with 67% in 2007.

While this percent is still very high historically speaking, the downward trend is alarming.  Entrepreneurship is the hope for our future growth and we need this generation to be ready to lead the way.

Go Pack!!

We have had the pleasure of attending two Green Bay Packer games over the past few weeks. 

Here we are this past Sunday at frozen Lambeau field in Green Bay, Wisconsin.

 

DSCN1402.JPG

 

And here we are from a couple of weeks ago at the Packer game in sunny and warm Nashville.

ann and jeff at titans game.jpg

Real Estate, Like Good Bread, Takes Patience

One of our favorite entrepreneurs at Belmont is Cordia Harrington, a.k.a. “The Bun Lady.”

She has had a successful entrepreneurial career first in real estate, then as a McDonald’s franchisee, and now with her commercial bakeries that are suppliers of buns and other breads to companies such as McDonald’s and O’Charley’s.

She gave a talk in York, PA and touched on the current real estate market.  From Today’s Financial News:

When Harrington started her real estate business when mortgage rates were 17%, they called her crazy. When she bought her first McDonald’s restaurant, a dilapidated low-volume franchise, they called her crazy. When she sold those businesses to build a state-of-the-art bakery from the ground up, they called her crazy.

But Harrington took advantage of fear in the markets to create a small fortune. Now she sees the current financial calamity as another fantastic growth opportunity. And she is urging entrepreneurs to follow in her footsteps.

With the real estate industry in the worst shape we have witnessed in decades, this is an opportunity to make investments that have the potential to pay of for years to come. Just as Harrington’s bread takes time to rise, so will the real estate market.

With the right ingredients, this market has the potential to rise into a fantastic wealth-generating opportunity.

Turning Cell Phones into a Business Platform

Belmont alumnus Colin Polidor and his brother Parker Polidor run a business a called Cell Journalist, which connects media outlets with their audience by providing a platform for sharing citizen journalism.  The Cell Journalist platform is an integrated turnkey solution that allows users to submit images and videos directly from mobile phones or upload from the media outlet’s website.  Features like rate, tag, share, and the contest engine continually drive traffic back to the media outlet’s website.  

 

Recently, Cell Journalist released an iPhone app that will allow each of its clients to have their own branded iPhone app for users to submit images quickly and easily from their iPhones.  Clients include E.W. Scripps Company, Raycom Media, Young Broadcasting, GateHouse Media, and several more independent print publications.

 

Cell Journalist’s technology helped KPLC-TV win the big story during hurricane Ike.   

Get Honest with Yourself

During the recent robust times of economic boom we can all think of entrepreneurs who succeeded in spite of themselves.  Even with a marginal business model and mediocre talent, these lucky entrepreneurs benefited from an economic tide that seemed to float a lot of boats that seemed to be less than seaworthy.  

Now it is time to get realistic and be honest with yourself as you launch and grow your ventures.  I like the words of advice offered by Nathaniel Whittemore at the blog Social Entrepreneurship: 

To be a successful entrepreneur, you need to know not just what you’re good at, but where you flop. Whether your enterprise is social or financial, you need to have a level of self-awareness that demands you surround yourself with folks with complementary strengths. In today’s world especially, there’s nothing more important than the team. Lose the pride, figure out what you suck at, build from there.