Hillary Johnson writes a very entertaining article from a regular business blog reader’s viewpoint:
My habit these days is to make a cup of Lapsang souchong before sunrise, then curl up with my laptop to read e-mail and peruse the collection of business-related weblogs I follow on a regular basis….When I tell people that I read blogs, they usually say something vaguely condescending to the effect that “it must be nice to have so much free time.” Most people think of blogs as public diaries kept by the kinds of egotists who make loud, inappropriate political comments at family barbecues or hog the discussion at book clubs, or wannabe journalists who post inflammatory stories with no fact-checking….The truth is that I recently quit my day job to start a company of my own and have absolutely no free time. The business blogs I read aren’t written by, or for, fools. Reading them is something I consider part–granted, an entertaining part–of my “job.”
As a “blogg-er,” it is wonderful to hear the perspective of an avid “blog-ee.”
The US House voted in favor of the Small Business Health Fairness Act…for the eighth time….It seems that the US Senate has yet to see the logic of this bill.
This legislation would “make health insurance more affordable for small-business owners and their employees by allowing them to band together across state lines to purchase Small-Business Health Plans,” according to the NFIB.
Small-Business Health Plans would level the playing field by giving small business the same access to cost benefits that Fortune 500 companies and unions have enjoyed for decades.
Rep. Sam Johnson (3rd dist.-Texas) sponsored yesterday’s bill. “It’s time to increase the insured and give small business the same access to affordable health care that big business already enjoys,” Johnson said. “As I like to say, ‘If it’s good enough for Wall Street, it’s good enough for Main Street.'”
The bill would allow small businesses to band together to negotiate for better rates and plans. Is this a fix for health care? No. But, it is a temporary reprieve for small businesses and their employees.
In the first quarter, venture investments in Net-related startups rose 36% to $753.8 million from a year earlier….The jump in spending followed a 30% hike in the fourth quarter and a 17% rise in the third quarter.
While the magnitude of the spending doesn’t yet compare with the Internet bubble, VCs say they are increasingly convinced big money can be made on the Net. They also claim to be seeing better thought out businesses with substantial revenue and none of the speculative ideas sketched on napkins that attracted money during the spending heyday five years ago.
Richland, LLC is a custom steel manufacturer and industrial contractor located in Pulaski, TN. It employs 65 people and has projected 2005 sales of $6.2 million. It is a service business that combines modern know-how and old-fashion work ethics. Since opening, the company has provided custom steel fabrications as well as becoming an industrial contractor with experienced craftsmen in machinery moving and installation (in and out of the United States), mechanical piping, electrical installation, concrete (forming and finishing), and machine coolant systems. Richland, LLC’s products and services are used in the construction of automotive manufacturing, wastewater treatment, heating and cooling systems and other end-use industries. Jim Greene (Belmont University MBA ’04) recently succeeded his father as President of this family business.
Jim is an engineer by training. He began his career working in large engineering firms, doing substantial work with NASA, DOD and the telecom industry.
Jim knew that he needed to distinguish himself from the rest of the engineers in the market to continue to advance in his field. He considered getting a graduate degree in Engineering, but decided that an MBA would differentiate him best. He chose Belmont because it has “high quality and an entrepreneurship program.” In fact, he liked it so much that his wife started her MBA, as well.
After graduation, Jim was still employed by a large engineering firm, but knew he wanted to set out on his own. It was a contact of his father’s that got him started. His father had been contacted by a German firm called GoGaS that was manufacturing a new high-capacity infra-red burner for use in the paper industry. Using new technology to burn at a higher temperature and with the same efficiency how to buy topamax in canada that is currently on the market, this burner can save substantial time, especially when one considers that a single hour of down time in the paper industry can cost $100,000 to $1,000,000. When Jim realized the opportunity offered by this product, he quit his job and was on a plane to Germany the next day.
The German firm held a 9 year patent on the device, and Richland, LLC was offered the exclusive distribution rights for all of North America. His challenge now is to market and distribute these burners through the new product line they have created called GoGas by Richland. Putting his entrepreneurial skills to work, Jim saw applications for the infra-red burner in other industries. Richland, LLC recently completed testing for use in the custom mold industry, where he discovered that the new design system can cure molds up to four times faster than conventional methods. Given this initial success, Jim is confident that Richland, LLC will find many other industries for this product.
Jim projects sales from their GoGas line to reach $3 to 4 million by 2006. Industry experts fully expect this technology to dominate the market in 10 years, meaning that Richland, LLC and its exclusive rights will be well positioned for success.
Jim’s career change has been eye-opening. Jim has been faced with the challenges of taking over the leadership of a successful and thriving business. At the same time, he has been leading the launch of the new product division GoGas, facing its unique challenges of dealing with customs and international law.
“I have learned more in the last 3 months from the Division Managers and Richland, LLC management than I could have learned in 20 years in my old job.”
The Bureau of Labor Statistics released a report this past week on regional and state employment and unemployment for June showing that non-farm payroll employment increased in 43 states. So what does the media focus on? The fact that another large employer scaled back its workforce (see examples here and here and here).
Why are jobs growing even though these large corporations are cutting their workforce? It is because job growth has been coming from entrepreneurs and they have been more than making up for any loss from the old economy. In fact, entrepreneurs have created over 77% of all new jobs over the past twenty years.
Many folks end up becoming entrepreneurs because of a specific hobby, interest or passion. For example, many people enter the restaurant industry because they like to cook. However, they soon find out there is a lot more than good cooking required to make a restaurant succeed. Staffing, inventory management and customer relations all come quickly to the forefront of make or break issues these entrepreneurs face. Many are not prepared, and that is a big part of the reason why the failure rate can be so high.
I observed first-hand another industry that seems to have this same problem of life-style interests meeting the realities of business and market demands. My wife and I have been looking for a new kennel for our dog, Keb.
We used to have two dogs and our old kennel worked fairly well as they seemed to keep each other company. But now that we have only one dog, we are looking for a kennel that can provide a good experience for our dog. We travel most weekends during the fall to watch our daughter play volleyball (now for Belmont), so we want a good place for Keb to stay.
Some of the kennels we visited were clearly started by folks who love dogs. One day they must have said to themselves, “Hey, I love dogs so maybe I should start a kennel!” I find that these places seem to operate around the owner’s life style, rather than their customers’ needs and wants. They set hours that fit their own personal schedules and make policies that make it easier on them. Sometimes it seems that they even lose enthusiasm for their business after a few years in operation.
Other kennels we visited understand that they are competing in a market. Their primary goal is not to meet their own personal needs and wants, but those of their customers. They set hours, offer services, and interact with customers in ways that reflect that they truly understand what their clients want and need for their pets’ stay.
What is the lesson from this? Before you start a business, particularly if it is built around your personal interests and passions, you need to slow down and look at it as a business. Learn to think like your customer and build the business around that understanding. Be realistic on what the business will demand of you. Many service businesses need to be open all year, and sometimes every day, to meet the needs of the market. Be honest with yourself about your willingness and ability to make this kind of commitment over a long period of time.
Finally, remember that your business can only serve your own needs if it first serves the needs of your customers.
One of my students, Erin A., passed along a great article from Entrepreneur.com that really summarizes effective business planning. If you are in the process of developing a plan I strongly recommend you take a look.
Some of the highlights include:
– “Don’t confuse cash with profits”
– Remember that it is not the idea that is crticial, but your execution of the idea.
– Don’t confuse a plan with business planning
– Be honest and be realistic
Our coffee shop entrepreneur and blogger, Jason, is making significant progress and is at the point of some critical steps in getting his business operational. If you haven’t stopped by his blog site to see Cafe Evoke’s progress in a while I would suggest a visit.
