It Ain’t Over ’til it’s Over

“Don’t count your chickens until they’re hatched.”
“There is many a slip between the cup and the lip.”
The wisdom of these says came home to me last evening. My wife and I went to watch the Belmont men’s basketball team play down the road at Middle Tennessee State University. After leading for most of the game, Belmont lost to MTSU as our team’s offense went cold. When we got home our beloved Green Bay Packers were playing on Monday Night Football. They were up 21 – 12 in the third quarter. But then, Seattle scored a touchdown — and then another. That victory that had already played out in our minds, was also taken away from us.
The lessons here should be taken to heart by any entrepreneur. I can remember so many times when I was active in business letting my mind run ahead of where we actually were. So many big contracts that I was sure we would secure, never came to pass. And countless business deals that were “sure things’ didn’t turn out the way we thought they would. And when we first began talking with folks about selling our business, how many times I began to imagine what I would do with all the money we assumed we would be getting, only to have the deal go bad.
As I’ve said many times before, entrepreneurship is so much like playing golf. You birdie the first hole and begin thinking you are going to play a great round, only to score a 8 on the next hole. Or you follow a 39 on the front nine with a 52 on the back. (Both of these examples come from my personal memories,,,), One great shot never seems to determine the match, but one bad one can.
“That’s why we play 18 holes.”
Just because you score a victory today against your competition does not mean that you will have continued success tomorrow. Keep yourself grounded. Talk about a deal does not guarantee a final contract. Encouraging words from a customer does not always mean a sale.
“Keep your mind in the present.”
Why are there so many sayings that relate to this same message? Because for many of us, it is human nature to be optimistic. And although optimism is a good trait to have when you are an entrepreneur, that same optimism can lead you to “get ahead of yourself.” Although these thoughts are impossible to avoid, we must be diligent to never act on them carelessly. I have seen too many business owners commit to expenses for a contract that never gets signed. Or they start spending money assuming their business is about to sell, only to have that final deal not come to pass.
Remember….
“It isn’t over until the fat lady sings.”

Giving Thanks

Since we are about to enter a day of complete gluttony, followed by a day of consumerism gone mad, I thought it might be good to reflect again on the original intent behind the Thanksgiving holiday:
“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

Technology in Small Business

In a study released by American Express last month, there was some interesting survey results related to technology that seemed to get overlooked (healthcare and taxes were the headline issues from this survey).
A majority of small business owners (51%) believe that “technology has transformed the way business is conducted” over the last 20 years, according to the OPEN from American Express Semi-annual Small Business
Monitor.
About 40% of small business owners plan on some form of technology investment over the next six months. What is interesting is that much of this investment is for what can be considered the standard workhorse technology for business (desktop computers, laptops, printers, phone systems, and software. This level of investment seems consistent with a growing optimism among small business owners.
Interestingly, a fairly small percentage (12%) were planning on buying the newer generations gadgets, such as PDAs and “smart phones.” This is not surprising to me, as small business owners tend to lag in adopting new technology. Most seem to have a “show-me” mentality. Technology has to have a clear return on investment, as those are dollars that could be spent on creating more sales or simply put in the owners pockets as profits. (Thus, by stubborn resistance to the fax machine in the 1980s).
Only 13% of owners/managers read blogs relating to their business and less than one in ten maintain blogs for their business (7%). Again, unless they find clear value-added, they are slow to adopt.

Culture Matters

When I talk to colleagues who teach Entrepreneurship outside the US, or look at a text on Entrepreneurship written specifically for a foreign market, I am often struck by how differently they have to approach the topic. Much of their time is spent trying to create more entrepreneurs. The entrepreneurial spirit is not endemic to their culture. They try to find ways to entice and cajole people into entrepreneurial endeavors.
A recently released study from the Global Entrepreneurship Monitor reinforces this observation. Unlike the US where we see a tremendous increase in young entrepreneurs including more and more young women, young women (18-24) in the UK are actually less likely to have entrepreneurial aspirations than other age groups. Given the trend toward a more entrepreneurially based world economy, this will prove to be a major barrier to future economic growth in cultures and societies that do not foster the entrepreneurial spirit.

Information is Power in Banking Relationship

Small business owners need to start using the leverage they have with banks. And by leverage, I don’t mean borrowing more money. Rather, small businesses have a growing market power that they need to use to their advantage when negotiating with their existing and with prospective new banks.
For the first time, JD Power has conducted a survey on small business banking satisfaction, which was measured across nine factors: relationship with primary contact; problem resolution; depository services; statements; fees; merchant services; cash management; credit services; and online services. PNC Bank, Wachovia, and SunTrust were the top three in their ranking. Interestingly, American Express, which has been advertising aggressively to small business, also ranked fairly well. The biggest banks tended to rate the lowest with small businesses. Impersonal service, high fees and frequent mergers and changes are the likely reasons.
Although they will not show up on all of these rankings, many communities are seeing growth in start-up niche banks that focus primarily on small business clients. These banks can offer a real alternative to the large regional and national banks for many business owners.
Small business is big business for banks these days, providing a growing source of revenues (for many banks more than their retail accounts). Small businesses need to use information to make better decisions on their banking relationships. They should no longer feel intimidated in their relationship with a bank, passively putting up with poor service and high fees. This new JD Power survey, the SBA’s report on small business lending, and talking with other small business owners can provide insight into what you can and should expect from your bank.
If you are not satisfied with your bank, make sure to let them know. It also may be time to shop around. As we saw in the recent NFIB survey on small business banking, service and credit are the top reasons small businesses change banks. And while changing banks is not an easy process, your new bank can help make the process run smoothly with a little planning.

Homeruns and Heartaches: Learning by Doing

I am in Arizona today with my colleague Becky Gann to make a presentation about our approach to experiential education in entrepreneurship. We will be highlighting our co-curricular programs. Our goal in these programs is to create an environment in which students can learn from successes and failures through hands-on experience with entrepreneurial businesses.
For those students who have their own businesses we offer our student business hatcheries. The three hatcheries on our campus offer student entrepreneurs access to basic business infrastructure (desks, computers, phones, faxes, copier, etc.) on a co-op basis and to a variety of educational opportunities tied directly to their personal entrepreneurial experiences. Faculty, entrepreneur mentors, our accounting faculty, and local attorneys provide support and advice for students participating in this program.
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For those students who want experience, but do not yet have their own business, we have established five campus-based businesses that are “owned” by the university, but are fully student created and student run. This includes three retail businesses, a graphic design firm, and a PR firm. We plan to add one more campus-based business next year.
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These programs were funded in part by a grant from the Coleman Foundation and several local foundations.

New Wealth More Generous Than Old Wealth

My father passed along a news clip about a study called the Bank of America Study of High Net-Worth Philanthropy that compares the giving patterns of entrepreneurs versus those who inherited their wealth. High net-worth is defined in this study as someone having at least $200,000 in income or $1,000,000 in net assets. The conclusion: high net-worth entrepreneurs give on average $232,206 compared with heirs and heiresses who give an average of $109,745. For those of you not ready for mental math this morning, that is over twice as much! The study is long on facts and statistics, and short on any analysis, so I’ll take a stab at it.
Most entrepreneurs I know who have had financial success still pinch themselves once in a while to make sure their successes really happened to them. They often use words like “blessed”, “lucky”, and “fortunate” to describe their success. The days of sweating payroll are still fresh in their minds. They remember how many times they came within days of failure. They remember all of those sleepless nights.
Most entrepreneurs I know understand that they did not make their business a success in a vacuum. It took the hard work of employees who also took a risk by joining their fledgling business. It took investors who took a risk in their idea. It took bankers who believed in their cash flow and their character. And many see God’s hand at work in their fortune, understanding that they are but stewards of what they have been given.
Most entrepreneurs I know viewed success, from the very beginning of their business, to mean much more than profit, a paycheck and “the big payday.” Many talk about the ability to give back if they able to be successful. I do an exercise with aspiring entrepreneurs in which I ask them what they would do if they won the lottery tomorrow. For many, philanthropy is at the top of their list.
I will not even try to judge what is in the hearts of those who inherit their wealth. I will say for many of them, it is a fixed and limited sum. What they get from their inheritance is all they have. Entrepreneurs, on the other hand, build their wealth from a process that they can repeat over and over again.
In this age when out economy is being transformed by entrepreneurs, what a wonderful opportunity to look more and more to them to take on the burdens of our society. What a wonderful opportunity to rethink our broken system of governmental redistribution of wealth that is doomed to entropy, rather than the boundless potential of entrepreneurial wealth created and freely shared.