We are introducing a new seminar for entrepreneurs of growing companies. Over eight evenings, the course explores the challenges faced entrepreneurs who own growing ventures. I developed this class as a result of my own experiences in managing growth, and look forward to working with entrepreneurs who now face the same issues in their businesses.
There is a challenging point in any business’ development when its owners must further develop the skills necessary to successfully grow the business to the next level. This transition includes improving systems, bringing in new talent, and enhancing the infrastructure of the company. The owner also begins a transition into very different roles. This seminar gives you the tools to enhance your skills and make growth transitions more effective.
If you are an owner of a growing company in Middle Tennessee please visit this web site for more information.
“The Resiliency Spring”
We are delighted to welcome Barry Moltz to our campus today. He will be speaking on the the ‘Resiliency Spring’. From his web site:
[F]our foundations for developing true business confidence:
1. Failure is an Option. Never set out expecting to fail, but recognize, accept, and embrace that failures will almost certainly come.
2. Develop the ‘Resiliency Spring’ through the willingness to endure failure for failure’s sake. Resiliency will arrive when you are able to observe and learn the lessons that failure teaches you, without blaming or condemning yourself because you failed.
3. Retrain Your Ego and Develop Humility. Humility is the freedom from the burden of personal arrogance that tells us that we are the only one who determines our future business outcome.
4. The Courage to Experience: View failure as a different kind of success.
Stop imagining how terrible it would be to failure and replace that with the willingness to experience whatever outcome arrives. Be willing to blur the lines between failure and success.
So Why are They so Grumpy?
The NFIB released their latest small business poll and it shows that small business owners are in a grumpy mood. One would think that they would be in a more upbeat frame of mind given the fact that they are planning to expand by hiring and creating new jobs.
So why are they so sour on things right now? Even though they want and need to hire, they are finding significantly higher labor costs and fewer qualified workers. They also are needing to borrow more money, but finding it slightly more difficult to do so as banks tighten credit in reaction to a weaker economy. They would like to increase prices to offset weaker sales, but we all could tell them that that will never work.
Overall so far in 2006 they have had a generally good year in terms of profits and sales. But, they just don’t have the cash in the bank one would expect from a good financial year, according to their reports on liquidity.
The Tatum Partners, a firm that provides temporary executive and executive services to companies, finds in a survey of their partners that the economy is getting weaker:
Overall conditions are flattening out at what we believe to be a sub-2% GDP growth rate in the third quarter, probably closer to zero. Residential housing is retreating particularly in markets that had experienced irrational exuberance in the past three years resulting in a speculative bubble that has burst. Commercial and industrial construction markets have remained relatively strong. We continue to sense the most probable near term outlook is for a soft landing with very slow growth in the third and fourth quarters.
Even though employment remains fairly strong right now and commercial real estate is healthy, they may be lagging indicators. All other signs indicate a rocky road in the months to come.
Is Entrepreneurship the Best Road to Wealth?
Scott Burns recently wrote a column on wealth. In it, he reports on a survey on wealth in America that has some very interesting findings. The young in this country are getting less wealthy, and the old are getting wealthier. As we would expect, our wealth peaks in our 60s as many of us begin our retirement. But, the most intriguing finding to me is related to business ownership:
Citing data from other sources, Mr. Murphy observed that 50 percent of all households with a net worth of $1 million to $10 million were business owners. But 76 percent of those with $10 million to $50 million owned a business, and 89 percent of those worth more than $50 million owned a business.
Burns includes a summary table of the wealth scorecard from this report in his article.
(Thanks to John Russell for passing this along).
Women are Joining the Entrepreneurial Economy in Chile
A new study from the Global Entrepreneurship Monitor, a report on Women and Entrepreneurship in Chile – 2005/2006, led by Universidad del Desarrollo, shows that entrepreneurship among women has risen 68% in the last 3 years despite an adverse setting. If this phenomenon continues, women could outnumber men in new enterprises by 2010.
Although Chilean women believe they have less opportunity to become entrepreneurs than men, they have nonetheless forcefully begun to start companies, and the rates of growth are nearly 20% annually, higher even than egalitarian developed countries like Germany or Spain.
This report constitutes the first detailed analysis of female entrepreneurship in Chile. The report is part of the Global Entrepreneurship Monitor, which is led by Babson College and the London Business School.
Today, it is estimated that there are 513,000 women entrepreneurs in Chile, equal to 33% of all entrepreneurs in the nation. Three years ago the percentage was just 20%.
If the high growth rates persist, by 2010 female entrepreneurs will equal male entrepreneurs and create more than 50% of jobs in new enterprises in the country.
Where women are equal to men is in readiness: 85% say they have the same level of knowledge and skills as men in beginning a business.
Remember….
Top 10 Small Busines Myths
From time to time I have written about myths that I see when dealing with aspiring entrepreneurs. Entrepreneur.com has put together their own Top 10 list of Small business Myths that are worth a read for anyone thinking about starting a business.
Several of their myths dealing with financing issues:
Myth No. 1: “The government has grants for startups.”
Generally this is not true. There are a few instances where local governments set up programs for disadvantaged people looking to use free enterprise to improve their lives, but they are not that common.
Myth No. 2: “The SBA loans money directly to small businesses.”
Another financing myth busted. You still must go to a bank. Some banks work with the SBA program to get small business loans guaranteed by the SBA.
Myth No. 3: “Venture capitalists loan money to startups.”
VCs fund less than 0.5% of entrepreneurial ventures, and of those, only rarely do they fund a start-up.
Myth No. 5: “I’ll be able to write everything off.”
Actually you can, but you will face interest and penalties from the IRS, so I don’t recommend it either.
Myth No 6: “I can pay myself whatever I want.”
Again, you can, but you’ll be out of business in a few weeks. You can only pay yourself what is left after everything else gets paid. You are last in line if you want to make your business work.
Myth No. 8: “I should be profitable after six months, because I’m an expert at what I do.”
The article states that most businesses take 2-3 years to make a profit. That is also kind of a myth. I have owned businesses that make profit within a few months, and I have had some that took years. It all depends on the business model and the market. That is why a plan is so important to help you understand what you are getting into. Which brings us to another of their myths:
Myth No. 10: “If I’m not getting funding, I don’t need a business plan.”
See my comments above…
They also have a couple of marketing myths:
Myth No. 7: “If I create a website, I’ll get traffic (or the more popular ‘If I build it, they will come.’)”
Myth No. 9: “I don’t need a marketing plan or marketing materials. This product/service sells itself.”
I tell entrepreneurs that they should be prepared to spend 80% of their time selling and marketing early on. Nothing sells itself and no website creates its own traffic.
Finally, one of their myths deals with lifestyle:
Myth No. 4: “I’ll have more time to do what I want.”
You should assume you’ll have some long hours early on. But, if time is important, make sure to build that into your business plans. Plan for slower growth or less ambitious goals if you want to structure time for other things. Also understand that some businesses just demand more of our time by their very nature. For example, if you want to start a restaurant, plan on very few days off, long hours, and no vacations for a LONG time. Know what you are getting into before you start any business and make sure it fits your non-financial and lifestyle goals.
Make sure to go the the Entrepreneur.com article, as it has some great links to more information on all of these topics.
Everyone Must Do Marketing
A common mantra in successful new ventures is that everyone in the company must be a part of marketing. Building customers is the most important activity any start-up engages in.
eVenturing from the Kauffman Foundation has a great collection of articles and tools for on-line marketing in entrepreneurial ventures. This is fast becoming one of the most important aspects of marketing in today’s economy. It gives tips on getting clicks, and helps understand the world of Google and the issues of privacy and security.
Courage?
Every virtue has two ditches that take it beyond virtue and into vice: one ditch is deficiency and the other one is excess. Courage, which is a commonly used virtue for entrepreneurs, is no exception.
Take for example Andre Agassi. What a wonderful career he has had in tennis, winning eight major tournaments that included a career grand slam.
This past weekend he played his last US Open. The word courage seemed to come up every five minutes on TV and in every story written about his efforts this year. For those of you who are not tennis or even sports fans, Agassi played this last year with a severely injured back. But, he played on, in spite of his father publicly stating that he should not.
He was touted as a hero. “Give Agassi credit, he retired swinging”, was one headline.
While he has shown great courage in the past with his comebacks, playing through injuries, and with his incredible work ethic, this weekend Agassi went beyond courage and into the vice of recklessness. Even the commentators who marveled at his “courage,” would say in the next breath that this last tournament could cause serious permanent physical injury.
So why did he go on? It was not the money — he and his wife have more than they can spend. It was not to win another major — even Agassi knew he could not win again in a major.
Sadly, I think society has convinced many of us that being Herculean even when there is no hope of success is somehow noble and good. But this is not true. Every virtue, even courage has limits.
There are good lessons here for the entrepreneur. When taken too far, risk taking can become reckless. Staying with a deal or sticking with a major decision even when it is clear that the best course of action is to move on is not courage, it is recklessness. Taking risk just for the sake of taking risk is not courage, it is recklessness.
Courage has two ditches. And Andre Agassi strayed off the road of courage into the ditch of recklessness.
Good Employment News for Labor Day
There is a hopeful sign that our economy, and particularly our entrepreneurial economy, is bouncing back. After a few months of sluggishness, we are seeing increases in employment.
An overall view of employment shows a drop in unemployment in August, according to data just released by the Bureau of Labor Statistics.
And in the NFIB membership survey for August, just released this morning, there is an indication of a significant strengthening of employment in small business, with 55% of those surveyed reporting that they hired or tried to hire new employees in August. This improvement in small business hiring is critical, as small business is now 50% of our GNP and consistently accounts for about 70-80% of new job creation in the US.