Industry Disruptions

Entrepreneurs often miss market disruptions once they’re in business, and today, disruptions are everywhere. “There is no safe industry,” says Jeff Cornwall, director of the Center for Entrepreneurship at Belmont University. “We can’t assume we’re going to find a safe little niche to operate in.”

This is from an article that Chris Penttila wrote for this month’s Entrepreneur magazine about industry disruption.
Change creates most of the opportunities that drive the 50% of our economy in the hands of entrepreneurs. And that process of change doesn’t stop once we open the doors to our new business. Change and industry disruption are a given in almost every corner of our economy. We live in an age that Peter Vaill once described as “permanent white water.”
While change and disruption are the fuels that drive entrepreneurial opportunity, they can also sew the seeds of failure for entrepreneurs who do not recognize that they have to keep moving.
Entrepreneurs should think of themselves as sharks — if they stop swimming forward, they will drown.
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Ideablob

I came across a site that if you have not visited, you need to. It is called Ideablob. One recent visitor called it a place for idea junkies. Each month people submit their ideas for new businesses. Visitors to the site then get to vote on the best idea for that month. Think of it as Survivor meets the elevator pitch. Each monthly winner gets a $10,000 check to help with their business idea.
The site is funded and sponsored by Avanta. They are being very low key about their connection, however. Marketing of the site has been solely through viral means to this point, such as Facebook, blogs, etc.

Home-based Business Ideas

There are millions of Americans running businesses from home. A recent SBA report estimated that 52% of all registered American businesses are home-based. Are you ready to end your commute and work from home? Need an idea or some inspiration on what kind of home-based business you might be able to start? StartupNation has posted their Home-based 100 ranking, which shows the creativity and innovation that is going on in kitchens, garages, basements, and bedrooms all across the US.
The list is broken into several categories, including the best financial performers, the most innovative, the yummiest, and “boomers back in business.” One of my favorites is from the Wackiest category. OK, maybe it is because it is from right here in Nashville and it involves dogs, but it is certainly fun and creative. The business is called Nashville Lappy Hour:

The venue, more often than not, is a local Nashville watering hole. Clough provides a way for dog lovers to meet other dog lovers in an environment that’s more fun than a dog park or a training class. The variety of sizes and breeds that attend provide plenty of entertainment, along with plenty of comedy, kisses and drool. Call it Barktoberfest.

Thanks to fellow Nashville blogger Ben Cunningham for passing this one along!

Best of the Entrepreneurial Generation for 2007

Business Week released their list of the top entrepreneurs 25 and under. The entrepreneurial generation is alive and well! These kids are not a fluke. Our entrepreneurship program here at Belmont continues to grow, just as so many other programs are around the country.
With each new class arriving on campus we see a stronger commitment to entrepreneurship and self-employment. Not only is this an economic phenomenon — it is part of a social revolution that this generation is quietly leading through their actions.

Near Future Not Looking Good from the Perspective of Small Business Owners

The NFIB released its October survey of small business owners and the mood is… well, shall we say less that upbeat.
“Things were looking good until September 18 when the Fed warned that the economy was sinking,” said NFIB Chief Economist William Dunkelberg. “The logical response of small-business owners was to cut hiring, capital spending and other growth-related activities.”
Owners did try to hire and fill needed positions in October, but with little success. Fourteen percent reported increasing employment an average of 2.9 workers per firm compared to 11 percent who reported workforce reductions averaging 4.2 workers, an average decrease of about 0.1 employees per firm.
Things seem a little worse for jobs in the construction industry, with 11 percent reporting that they increased the size of their workforce, while 16 percent cut employment. Although it was not all bad news in construction, where there are signs of some firming of demand. In July of 2006, a net 40 percent of the construction firms were raising prices, compared to a net 1 percent reporting higher prices in September 2007. Now, more firms are raising prices, indicating stronger support from non-residential construction and home additions and repairs.
With entrepreneurs being the job engine in this economy, this is not good news for the near future.
Twenty-two percent reported unfilled job openings, down three points from September. Over the next three months, 15 percent plan to create new jobs (down three points), and 10 percent plan workforce reductions (up one point), yielding a seasonally adjusted net 11 percent of owners planning to create new jobs — down three points.
“Jobs disappear when owners don’t expect sales to grow,” Dunkelberg said. Fourteen percent of the owners reported that the availability of qualified labor was their top business problem, down three points from September.
And now for the news that put a chill down my spine. The net percent of owners reporting higher average selling prices rose six points to 15 percent of all firms. Plans to raise prices also gained a point to 22 percent of all owners.
“The Fed may be preoccupied with recession but small-business owners’ reports of price hikes suggest that inflation can’t be dismissed,” said Dunkelberg. “The historic relationship between inflation and the percent of owners reporting higher prices suggests that inflation will be showing some new, unwanted, vitality.”
Indeed! And in case you missed my caution about inflation, read this…..

Disaster Planning

As I have said many times at this site, disasters happen. It is not if, but when. Business TN Magazine posted an article about how to prepare for the worst.

For a growing business, one major setback can spell life or death. Preventing a natural disaster is outside the scope of even the largest firms, so what can a small business owner do to protect against catastrophic events? Every industry has unique vulnerabilities, and each company particular needs.

Having the right insurance and working with the right law firm are two important means of insulating a small business from the brunt of the impact of a catastrophic event.
(Just for the record — the author calls me an economist. I may be a lot of things, but I am NOT and economist!!)

A Good Entrepreneur Chooses a Good Exit Strategy

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If you have spent any time in Nashville you have probably heard of the Bluebird Cafe, the iconic music club founded by Amy Kurland back in 1982.
After twenty-five years, Amy decided it was time to exit her business. From the Tennessean:

Amy Kurland, who started The Bluebird in 1982 as a gourmet restaurant, is selling the now-legendary club to the Nashville Songwriters Association International. The group promises not to change a thing.
“I wanted to retire, but I didn’t want The Bluebird to go away,”‘ said Kurland, 52.

Amy could have sold the club for a lot more money than she did. But, money was not the only kind of wealth that Amy created in her business. She measured her success as much in terms of her ability to create a venue to help launch the careers of struggling songwriters and musicians as she did by the income and wealth that her business generated for her.
Instead of selling to the highest bidder, she sold to a group that would forever keep her vision alive. That is clearly the act of a good entrepreneur.
The list of now famous artists who got their start at Bluebird is unprecedented in the music industry: Faith Hill, Trisha Yearwood, Garth Brooks, Josh Turner…. the list goes on and on.
My first experience with the Bluebird Cafe came while I was being recruited to work at Belmont University. The Dean took me to the Bluebird to give me a taste of what Nashville had to offer. Immediately I was taken back to my college days in the 1970s. Ann and I loved to listen to coffeehouse musicians — singer songwriters just like the Bluebird hosted night after night. (A note of trivia: I tried my hand as a coffeehouse musician a time or two in those days). I was hooked.
We now get season passes every year to go to Bluebird on the Mountain. Bluebird teamed with Vanderbilt University to offer a monthly Bluebird songwriters night under the stars on top of the nob (that is what we call big hills that are not quite mountains here in Tennessee) where Vanderbilt has their observatory. It runs from spring through fall.
Thanks, Amy. Thanks for having the courage to start Bluebird, and thanks for having the courage to insure it will stay the Bluebird now that you are moving on in your life.
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Stay-at-Home Mom’s not the Only Lifestyle Entrepreneurs

We are finding more and more young women being drawn into entrepreneurship as a way to gain more control over the balance between family and careers. This article at the Wall Street Journal shows that is it not just the Moms who are seeking this type of lifestyle balance.

Interviews with men who stayed home with their children for several years, and are now looking back on it, paint a different picture. While much attention has been paid to at-home mothers who opt out of the corporate rat race for good, many at-home dads are quietly doing the same thing — finding flexible alternative work. And while the adjustment can be rough, some of these men discover at-home parenting marks a permanent turning point toward better life balance.

Small Businesses Need to be Aware of Fraud Protection

Although it is a week that I wish we did not need to recognize, next week is National Fraud Awareness Week. SunTrust Bank has partnered with the National Small Business Association (NSBA) to put out the “Foil Fraud” survey.
I followed up with the folks at SunTrust to get some more insight into the nature of fraud in small businesses.
Q: Is the problem of business fraud getting worse for small business owners?
A: It might be. Based on our survey we know that it certainly is a concern for small business owners and that concern is growing. A recent joint study by SunTrust and the National Small Business Association showed that 84 percent of small business owners are concerned about fraud in connection with their businesses’ finances. We also know going into the next year those same small business owners say they feel more vulnerable when it comes to fraud. In the Southeast 1 in 4 small businesses have been affected by fraud and nearly half of all business owners know of some small business that has been hurt by fraud. This fear is growing as businesses become more reliant on the Internet.
Q: What is the most common type of fraud small businesses face?
A: Interestingly, our survey showed that the majority of small business owners were concerned with online identity theft, or online hackers. However, in actuality the most common types of fraud perpetrated on small businesses are credit card fraud and check fraud; and the most common perpetrators of these types of fraud are clients and employees.
Q: What are some simple steps that small businesses can take to prevent fraud?
A: First and foremost, small business owners should talk to their financial institutions to find out what types of fraud protection they offer. Our survey showed that business owners wish banks offered businesses more help in fighting against fraud. A very large percentage of business owners wish there was a way to detect business fraud to prevent or limit loss and are looking for more information about preventing fraud in their business. At SunTrust, we have listened to this and acted, and now have a product to help small business owners detect fraud. Our Online Cash Manager Plus and Premium products now feature Fraud Inspector–a feature that was designed to help small businesses identify fraud and reduce risks before businesses are impacted. The tool gives clients the ability to review paid items that have cleared against their business checking, savings or money market account(s), and request that an item be returned if it is suspected to be fraudulent.
We also encourage small business owners to focus on things like the separation of duties within their office staff and enforce other measurements such as have a fraud policy in place with a fraud hotline or suggestion box. But most importantly business owners should hire the right employees. In doing so, they should conduct background checks on employees, especially those associates that will be dealing with valuable inventory or finances. Also, take the time to call references and verify credentials–too often employers skip this step, and it could mean the difference between a star employee and an employee who could hurt your business.
Finally, get involved. Becoming a member of a national association, like the NSBA, can really help small businesses stay connected to these kinds of key issues.