When I teach about entrepreneurship, I stress the importance of starting with one’s aspirations and goals. For more and more people, these aspirations go well beyond financial goals they hope to achieve through their new business. Lifestyle and family issues are increasingly being identified as key issues as new entrepreneurs plan their businesses.
For many of the young women I work with, planning for a business that allows them to be active mothers for their children is a fundamental goal for their entrepreneurial careers. An article in today’s Tennessean highlights this trend.
“You can’t swing a diaper bag on a playground without it landing firmly at the foot of a woman running, or thinking about running, her own business – whether that business be knitting blankets to sell at a craft fair, selling cookware at home parties, or nailing down advertisers for a franchise entertainment coupon book that grosses six figures.”
There is a popular website that offers support and ideas for women looking to integrate entrepreneurship and motherhood called MompreneursOnline. (Caution: Some opportunistic person associated with this site made sure that they trademarked “Mompreneur”….).
Blogging as a Business Tool
Blogs are becoming more popular as tools for business. Blogs can be places to place advertising, places to seek free p.r., a mode of intra-company communication, and as a substitute for newsletters to market a business.
Anita at Small Business Trends offers some useful posts to help understand the basics of blogging, including how to write a blog, how to get p.r. on a blog site, and how to use a blog for intra-company communication.
Neatness Pays
I have known a couple of folks who started businesses offering their services as professional organizers. This article at StartupJournal shows how much financial opportunity and satisfaction that there may be for this type of business.
“‘I keep doing it because I love it; it’s instant gratification,’ says Sally Allen, owner of A Place For Everything LLC in Golden, Colo. Maria Gracia, founder of Get Organized Now! in Watertown, Wis., says, ‘It’s a very rewarding field emotionally, and it can also be financially rewarding.’ And Barry Izsak, president of Arranging It All in Austin, Texas, concludes, ‘My life is so good. I never dreamed I’d be doing something that is so easy for me, and making so much money.'”
For many of these organizers, their businesses are growing much larger than they at first imagined. Many report that they are adding subcontractors and offering products to go along with their organizing (storage systems, books they have developed on how to keep organized, etc.).
As Barry Moltz likes to say, the best business opportunities are those that solve other people’s pain. I guess too much stuff is quite painful to a lot of people these days!
SBA Lending Strong
Those critics who predicted doom and gloom for SBA lending due to increased fees seemed to be proved wrong as reported at Inc.com.
“Despite rising interest rates and higher fees, small business owners tapped a record number of Small Business Administration-backed loans in the first quarter of fiscal year 2005.
“In the quarter, which began October 1, 2004 and ended December 31, 2004, the Small Business Administration (SBA) and its partner banks approved 23,197 loans worth .56 billion, a 23% increase in volume and a 14% increase in value over the same period a year ago.”
Fees were raised to offset a new budget model for the SBA that was passed to try and create more long-term stability in its lending programs.
Environmental Entrepreneurs
Fortune Small Business highlights three entrepreneurial ventures with an environmental focus.
* “One solution to America’s energy crisis just may be gobbling away at a poultry farm near you. Changing World Technologies has developed a working system to convert turkey guts and scraps into fuel oil.”
* “IdleAire is the big dog in an emerging pack of companies that provide technology to reduce pollution at truck stops. Badgett’s firm installs a system of gray control consoles attached to bright-yellow tubes suspended from an overhead rack. Drivers pull up, turn off their rumbling engines, latch the unit onto a $10 adapter that fits in their passenger window, and open a clamshell-like control console that pipes in climate-controlled air, electricity, broadband Internet access, satellite TV, and long-distance phone service.”
* “Tony Rogers is a member of the rose-bud Sioux tribe who lives on the tribe’s South Dakota reservation. He doesn’t have an engineering degree, hasn’t worked for a power station, and has never invested in the energy markets. Yet Rogers is an entrepreneur at the cutting edge of green energy development. He is director of the Rosebud Sioux Tribe Utility Commission—the group responsible for building the first wind turbine on a Native American reservation.”
Three nice examples of how the private sector can solve broader societal problems even while making a profit or creating self-sustaining non-profits. A definite win-win.
Life Science IPOs up in 2004
New venture start-ups in the health care industry have been in the doldrums for the past couple of years. However, in an article from Private Capital Advisors shows that IPOs in Life Sciences is up significantly in 2004.
Venture capital activity in health care deals has also increased. All of this has created much stronger valuation multiples in the industry.
“All four sub segments within the healthcare services industry experienced LTM EBITDA multiple expansion. The most significant increase in median multiples came from the long-term care segment, which increased 21 percent to 7.5x from 6.2x.”
This is good news for the health care industry, which seems to be regaining momentum in new business development.
Economic Updates
Here are the most recent economic reports from this week (from the Joint Economic Committee of Congress):
State Employment Statistics:
* Non-farm payroll employment increased in 32 states in December. The states with the largest employment gains were Florida (+12,100), Texas (+7,000), Georgia (+5,600), Colorado (+5,400), and New York (+12,100).
* Employment increased in 48 states during 2004. The largest gains in 2004 occurred in Florida (+172,300), California (+152,300), Texas (+124,800), Virginia (+79,500), and North Carolina (+76,400).
* Over the past year, the unemployment rate has fallen in 43 states.
Federal Budget:
* The budget deficit for fiscal year 2005 is projected to be $368 billion – that’s over $40 billion less than the fiscal year 2004 deficit. CBO projects an even smaller deficit of $295 billion for fiscal year 2006.
* As a percentage of Gross Domestic Product (GDP), the budget deficit will be 3.0% for fiscal year 2005 and 2.3% for fiscal year 2006, significantly lower than the 3.6% level reached during fiscal year 2004. These deficit-to-GDP ratios are significantly lower than levels reached in the 1980s and early 1990s. The most recent highs were 4.7% in 1992, after the Gulf war, and 6.0% in 1983. (In order to compare deficits across different years, it is important to account for the economy’s cheap topamax online capacity to absorb the deficits and the government’s ability to finance them. Both of these factors depend on the size of the economy. For this reason, economists typically measure deficits relative to GDP.)
* The ratio of publicly-held debt to GDP is projected to be 38.1%, a percentage that is still lower than the ratios the U.S. sustained for most of the 1980s and 1990s. Indeed, the debt amounted to almost 43% of GDP as recently as 1998. Since 1940, the highest ratio achieved was 108.6% in 1946.
Economic Expansion
Robust growth in consumer and business investment spending continues to fuel growth in the gross domestic product (GDP) and payroll job gains continue at a healthy pace. Payroll employment has expanded for 16 consecutive months and payroll job gains in 2004 totaled over 2.2 million. Energy prices rose again recently, after a sharp retreat from recent peaks of late October. Higher energy prices have pushed up the dollar value of imports while stagnant growth abroad has hampered export growth. As a result, the U.S. trade deficit hit a record high in dollar terms in November. Despite increases in energy prices last year, inflation remains tame. Forecasters continue to see low inflation along with strong and steady growth at least through next year.
New Twist in Peer-to-Peer Music
Even though from the outside the music industry seems like a wounded giant, it is proving to be fertile ground for entrepreneurs willing to think about new and creative ways of getting music from artists to listeners.
The latest of these new ideas just got venture capital funding, as reported by Red Herring.
“Mercora, of Santa Clara, California received million in Series A funding Monday from Silicon Valley’s Norwest Venture Partners, to finance its Internet radio network. Mercora IM (Individual Modulation) Radio, which uses streaming audio, lets users listen to music from other users’ computers.
“Just like any other peer-to-peer file-swapping service, Mercora allows users to search music by artist or song title. But unlike Kazaa or Morpheus, which have been hobbled by the wrath of the Recording Industry Association of America (RIAA) and several legal challenges, Mercora doesn’t allow users to download songs onto their computers.
“‘It is a network of radio stations that is basically converting your PC into a webcasting station in compliance with copyright laws,’ said Srivats Sampath, co-founder and CEO. With Mercora, every user becomes a broadcaster and their playlist becomes a channel, he said.”
Not only is Mercora rethinking music distribution, but they are even rethinking broadcast radio. This may not be the answer for this industry, but it is definitely the kind of innovation that may help reinvent how music gets from performers to their fans.
The UN is Moving into Entrepreneurship as Economic Development
The National Dialogue on Entrepreneurship reports on the United Nations’ growing interest in entrepreneurship:
“In 2000, UN Secretary-General Kofi Annan chartered a whole host of initiatives tied to the UN’s Millennium Development Goals, a package of plans to reduce poverty and promote new development by 2015. As part of this effort, a UN Task Force on Science, Technology and Innovation was set up; this group has just released a new report entitled Innovation: Applying Knowledge in Development. The report examines the role of science, technology, and innovation in meeting the Millennium Development Goals. The Task Force sees a big role for entrepreneurship, and it encourages UN members to do more to support the development and small and medium-sized enterprises. They also suggest that universities take a more proactive role in supporting development, via support for regional development projects, local support for business creation, and other community development activities.”
Let’s hope that these countries don’t decide to take too big a role in entrepreneurial development. The best they can is to work toward deregulating the entrepreneurial process in their countries. In many parts of the world, including many already developed economies, the hurdles and costs of entrepreneurship make business start-up too complex and too expensive to realistically expect entrepreneurship to spur any significant economic growth.
Garage Technology Founder Offers Advice to Start-ups
Guy Kawasaki, founder of Garage Technology Ventures, offers his words of wisdom for start-ups at Entrepreneur.com this month. Here are a few of the highlights:
– “Do you make meaning? Great companies change the world by fighting the status quo, inertia and ignorance. They make people’s lives better, fix the bad and perpetuate the good. Mediocre and unsuccessful companies start out only to make money. Here’s the acid test: If your company never existed, would it matter to the world?”
– Forget the 25 word mission statement. Kawasaki recommends a three word “mantra” to describe what you do. Getting down to three words would be the ultimate challenge for almost any entrepreneur I know. But, an intriguing idea!
– Understand the economic model of the business. How will it make money?
– “If it takes five years of industry experience to begin to understand what you do, you’ve got a problem. Your parents should be able to explain your product or service. Your grandparents should be able to use it.”
– Find a niche.
He also offers his view on writing a plan, recruiting staff, raising money, and more. A great read for entrepreneurs at any stage of development from a guy who has seen a lot of deals.
Interested in more? His book is a treasure.
(Thanks to Bruce Schierstedt for sending this along).