Microfinance Program

Adam Smith blog writes about a new program that allows people to make direct microfinance loans. The program is called Kiva. From their website:

Kiva lets you connect with and loan money to unique small businesses in the developing world. By choosing a business on Kiva.org, you can “sponsor a business” and help the world’s working poor make great strides towards economic independence. Throughout the course of the loan (usually 6-12 months), you can receive email journal updates from the business you’ve sponsored. As loans are repaid, you get your loan money back.

Why participate in such a project? Tom Clougherty at Adam Smith explains it this way:

The great thing about microfinance is that it is based on the philosophy of the hand-up rather than the handout. As I wrote for the GI: “Microfinance is not a top-down solution to poverty, it is a bottom-up approach that aims to empower the poor, harnessing their individual aspirations and abilities and creating an environment in which they can realize the true benefits of the market economy.” That’s why microfinance has been so successful where traditional aid has failed to make an impact.

Talk on The Good Entrepreneur

For those of you in the Middle Tennessee area, I will be giving a talk today on the new book that I co-authored with Mike Naughton, Bringing Your Business to Life: The Four Virtues that Will Help You Build a Better Business–and a Better Life, which is part of our Good Entrepreneur Project. The book is scheduled to be released next summer.
I will be talking at Christ Church Cathedral in downtown Nashville at 6:30 p.m.

American Small and Medium Enterprises Rely on US Markets

A new survey released by UPS finds that most of America’s small and mid-sized businesses have failed to explore the significant growth opportunities offered by an increasingly global economy. Specifically, 67 percent of the nation’s small-to-mid-sized enterprises (SMEs) are still relying solely on the U.S. economy. This figure is surprisingly low given the increasing ease of importing and exporting in today’s economy.
Of the 33 percent reported participating in any cross-border trade, 15 percent are importers, nine percent exporters, and nine percent do both.
Survey respondents cite many reasons for not engaging in international trade, including a perception that it is too risky, a lack of knowledge about international markets, unfamiliarity with customs regulations and disinterest in expanding business beyond U.S. borders.
Among businesses that either import or export, 45 percent perceive global trade as a benefit while 18 percent see it as a disadvantage. 52 percent say global expansion will help them remain competitive or create an opportunity to increase profits. One out of every four believes that global expansion could lead to competition that will cut into profits.
The results regarding global trade represent the initial findings of a survey that will be released in full later this fall.
UPS Business Monitor has previously released small and medium enterprise studies on businesses in Asia, Latin America, and Europe

Small Business Owners Still Cautious

The latest survey of small business owners from the NFIB reveals that small business owners are still cautious about the economy. The optimism index is still below the historic average, although it did improve a bit from last month.
On the employment front, small business owners tried to fill jobs in September, but with little success. Thirteen percent of those responding to the monthly NFIB Small-Business Economic Trends survey increased employment an average of 3.7 workers per firm, but 14 percent had reductions of 3 workers. Three-fourths of the reported payroll jobs were in medical care, education and government, industries not dominated by small firms, where hiring was weak.
Many are still reporting difficulty in attracting qualified workers. A seasonally adjusted 25 percent reported unfilled job openings, unchanged from August, keeping the unemployment rate low.
Eighteen percent of firms plan to create new jobs over the next three months, up a point over August numbers, while 9 percent plan reductions, up a point. This produced a seasonally adjusted net 14 percent of owners who plan to create new jobs, down a point from August but very solid. Fifty-seven percent said they hired or tried to hire new workers, up four points from August, but 84 percent of those trying to hire reported few or no qualified applicants.

“Market Misperceptions”

Nathan Griffith ponders about “markets” at our LockeSmith blog:

We’ve all heard about “the market” doing this to people, doing that to people…But I labor under the impression that most folk don’t have a good conception of the fact that “the market” is shorthand for a much more complicated idea. For example, most people think the market rewards those with money. In fact, the market defines what a good decision is, and then rewards those who make good decisions.

My How Plans Can Change

According to our original business plan, I would probably just now be exiting our health care business. But the exit ended up happening about twelve years earlier than we had thought. As carefully as we plan, the same change that creates the opportunity can lead us in unexpected twists and turns.
A great example of this can be found in the story of Chipotle told by its founder Steve Ells in a recent issue of Time.

After two years, I started to have thoughts about opening my own restaurant–a large-scale place, a “fancy” restaurant. But the economic side of the business was daunting. Knowing that many restaurants fail within a few short years of opening, I wanted some sort of backup, so that’s where the idea for Chipotle came. It wasn’t intended to be my main focus but a cash cow that would help position me to open a full-scale restaurant.

They now have hundreds of restuarants located all across the country. Plans do indeed change….
(Thanks to Sarah Brown for passing this along).

Change in the Music Industry

For years the music industry made its money primarily through the creation of a physical product — first the record and then the CD. But with the evolution of the digital age, the physical nature of music is fast becoming obsolete. Just at vinyl records hold nostalgic value, soon CDs will be a novel relic of a bygone era.
So is this the death of the music industry? Of course not. Music has been written, performed, and enjoyed for centuries. Music is part of culture. In many ways music as a business is thriving more than ever before. It is a period of fundamental change for this industry.
Those who have a vested interest in the current system of packaging and distribution (that is, the CD) are hurting in a big way. Like many large businesses in a rapidly changing environment, they are stuck. They are the proverbial super tanker that can’t change course quickly enough to avert disaster. They are stuck due to their capital and intellectual investments.
So these big companies react to change like we often see in other industries under going fundamental change. Rather than adapt, they attack the change. They try to hold back the forces of change like the little Dutch boy with his finger in the dam trying to hold back the impending flood. How do they respond to the digital age of music? Do they shift their corporate strategy and change their business model to maintain their relevance and competitiveness? No. They sue 14 year old girls for downloading music.
So how will money be made in the new digital era of music? From a post at TechCrunch:

First, other revenue sources can and will be exploited, particularly live music, merchandise and limited edition physical copies of music. The signs are already there – the live music industry is booming this year, and Radiohead is releasing a special edition box set of their new album…simultaneous to the release of their “free” digital album.
Second, artists and labels will stop thinking of digital music as a source of revenue and start thinking about it as a way to market their real products. Users will be encouraged (even paid, as radio stations are today) to download, listen to and share music. Passionate users who download music from the Internet and share it with others will become the most important customers, not targets for ridiculous lawsuits.

Just as in an industry that is undergoing fundamental change, there are opportunities. It just takes open minds, creative thinking, and entrepreneurial nimbleness to find them.
(Thanks to Andy Tabar for passing this link along).

Does the “E” Stand for Entitlement?

The young people now entering the workforce have been called Generation Y. Many of us call them the Entrepreneurial Generation or the “E” Generation due their high rates of business start-up right out of, or even while in school. An article from the Boston Globe argues that the “E” stands for Entitlement just as much as it stands for Entrepreneurial.

They are…the upstarts at the office who put their feet on their desks, voice their opinions frequently and loudly at meetings, and always volunteer — nay, expect — to take charge of the most interesting projects. They are smart, brash, even arrogant, and endowed with a commanding sense of entitlement.

Perhaps their entitled attitudes are part of what is making them so entrepreneurial as seen from this quote from that same article.

“They have been groomed, they’ve been told that they are the best, and they’ve seen people from this same generation make millions of dollars just before them. They think, ‘I want to be the next Google, Amazon, or eBay. After all, these companies were founded by young people. Now it’s my turn.'”

A recent article in the Wall Street Journal examines how employers are changing benefits and perks to meet this new generation of workers.

And family-friendly companies are looking very different today than they did a few years ago. The waning of boomers with their uptight ways, and the rise of the we-want-it-all millennials, are spurring major shifts in employer programs.

Whether they are entrepreneurial, entitled or both, they sure are keeping those of us who teach entrepreneurship busy!
(Thanks to Steve King who writes Small Biz Labs for passing the Globe along).

Pursue the Passion Tour Stops in Nashville

pursue the passion tour.jpg
“Half the American work force is not satisfied with their job, and only a fifth apply a passion towards their career. As this trend trickles to students entering the working world, people continue to pursue a path that leads them further from their true dreams. Pursue the Passion addresses this issue by interviewing people who are propelled by a love for their work.”
Who: 4 recent college graduates are on a 3 month, 14,000 mile cross country journey conducting interviews with people who love their work. Come here about their experiences and tour their RV!
What: Pursue the Passion Tour Nashville Stop
When: Friday October 5, 2007 10 AM
Where: Massey Boardroom, 4th Floor Massey Building, Belmont University