After a few weeks of waiting for some software fixes to be put in place, my blog site is now open for comments! I felt badly about having to shut off the comments, but we were getting some really nasty Spam attacks. Let’s just say that they were links to sites that are not what a Baptist university would want to see on one of their hosted blog sites!!
So, please have at it. I missed hearing from all of you.
Even Business Week gets it!
Business Week recently spotlighted its “100 Hot Growth Companies”. My favorite part of the article was the acknowledgement by this bastion of the old corporate economy that it is the small companies that are driving things these days:
“Over the past few years, smaller companies generally have played an outsized role in bolstering a shaky U.S. marketplace. Strengthened by low interest rates on their borrowings and a focus on consumers who kept on spending, smaller players were vital to the overall economy in the recent down years. “Small businesses have been a source of stability to a very troubled economy, and more recently a key source of growth,” says Mark Zandi, chief economist of consulting firm Economy.com Inc. Just as important, the group has been an incubator of new ideas, some of which will undoubtedly change our world. Alumni of our Hot Growth list include network titan Cisco Systems (CSCO ), video game leader Electronic Arts (ERTS ), and such familiar names as Black Entertainment Television (VIA ), Papa John’s International (PZZA ), and eBay (EBAY ).”
My personal favorite Reaganism
President Reagan was once asked the difference between a big business and a small business. He said that a big business is what a small business wants to become if the government would just get out of the way.
Rest in peace. His journey is now complete.
Carnival of the Capitalists
Here it is, Carnival of the Capitalists for this week at the Window Manager. A great set of posts again this week. A couple to make sure to look at:
Professor Bainbridge (a very thoughtful and well-written site, by the way) looks at family business succession using the Mondavi wine business as a case study.
Small Business Trends has a post about the knitting boom going on today. Who knew?? A great example of how the simplest ideas are often the best. “Swing easy and it will go farther.”
More good news on employment
There were a quarter of a million new jobs new jobs last month!
Here are the details:
“The Department of Labor reported today that payroll employment increased by 248,000 jobs in May following even larger job gains in both April (346,000 new jobs) and March (353,000 jobs).
“Highlights:
* Over 1.1 million new jobs have been created in 2004. If this pace of job growth continues, over 2.8 million new jobs will be created this year.
* Since August 2003, payrolls have risen by 1.4 million jobs.
* Employment continued to expand in manufacturing, rising by 32,000 jobs in May. There have been 91,000 manufacturing jobs created in the past four months.
* April statewide data from the Department of Labor also showed that the unemployment rate has fallen in 47 states over the past year.
Here is the full report and here is a quick look at the trends.
The entrepreneurial economic recovery rolls on!
The Freedom Myth
Entrepreneurial ventures can remind us of babies. They seem to need constant care and attention, and even if they don’t for short periods of time we still worry about them. Although physical time off is possible, many entrepreneurs find they cannot mentally take time off from their businesses.
A study in StartupJournal.com reported that of the entrepreneurs surveyed “22% want to forget it all for a while and won’t check back with their company, but 33% will be calling in — or checking by e-mail — once a day, 22% several times a day, 17% every few days, and 4% weekly. For one small group, 2%, perhaps staying at work would be more relaxing — they’ll be calling in every hour.” Another article at the same site offers advice from a consultant on how to take time off from his business. But, his advice seems to imply that even proper rest is simply a way to improve performance when we get back to work.
Temperance is a virtue that is often forgotten about in today’s 24/7 world. This article from Inc.com describes the problem quite clearly:
“So, do you really need to be at the office 24-7??The most dominant myth of this society is the Protestant work ethic,’ says Al Gini, author of The Importance of Being Lazy. ‘Entrepreneurs say, ‘This is my baby. I have to do this myself with huge amounts of sweat equity.’ They’re right, but there has to be some moderation.’ Gini advocates taking time to rest, recreate, and re-create, but if that only means a few days off, checking in constantly before plunging right back into an all-consuming schedule, what’s the point?”
What’s the point, indeed? Being at rest is not simply a means of recharging your batteries for the next round of work. Rest nourishes the soul. Rest gives us the opportunity to focus on many things that are, dare I say it, even more important than our businesses. Family, faith, and friendships are not respites from work. But we too often treat them simply like a time-out from work.
If all we do–work, rest, sleep, recreation–are simply means to improving the financial performance of our businesses, our lives are not really being lived well. My good friend Mike Naughton tells the story when he was giving a talk about celebrating the Sabbath. An executive in the audience spoke up and adamantly stated that he could never “give up” Sunday–it was his competitive advantage.
As summer vacations draws near, take time to think about why you are doing all that you do. Why do you work? How do you rest? If all of your answers come back to your business it is time to do some genuine reflection on your life. Business is exciting, invigorating, and even fun. But, it is simply a means and not the ultimate ends in our lives. Temperance in our work can help put such things in their proper order.
Another Example of a Niche Bank
There are more and more niche banks popping up like mushrooms after the rain. They focus on serving women, hispanics, etc., etc. There is a new one here in Nashville reported in the Tennessean that is focused on Asian immigrants and health care. These banks are playing a significant role in our entrepreneurial economic boom.
The VC Myth
Part of the mythology of entrepreneurship is that VC’s play a major role in new venture development in this country. The myth has evry entrepreneur thinking there is a VC out there for them. I have met small retail start-ups that actually think they can get VC funding. (In case you still believe this myth yourself, there has never been a small retail business funding by VC money–ever!!). While VC’s play an important role, I would even go so far as to say a critical role, they are a niche player. They only work with businesses that have large capital needs and show great promise of very rapid growth.
Anita Campbell has a fascinating post over at Small Business Trends that really brings this to life. She cites a report stating that in 2002 only 38 out of 100,000 new businesses had VC money behind them. That is .038%! She also links to an article on VC’s over at Forbes.com that is worth a read.
What was most heartening was that she stated that entrepreneurs seem to be understanding that VC’s are not part of the real world for most start-ups. Maybe the VC myth is finally becoming debunked! Over 80% of funding comes from the entrepreneurs themselves and their friends and family. Most of the rest comes from a variety of sources such as leasing companies, limited bank financing, etc. If I were to draw a pie diagram of this, VC’s would be a really thin line at best. They are important, but not for the vast majority of entrepreneurs. I wish my fellow teachers of entrepreneurship would give up this myth and teach about what really funds most business start-ups. The VC process is complex and sexy so it makes great stuff for college classrooms. But, we need to get real and teach entrepreneurs about what is fact, not myth.
Fast Growing Companies include “good” entrepreneurs
It is encouraging to see that this year’s Entrepreneur magazine Hot 100 companies includes many companies that have integrated strong values into their company cultures.
“At a time when each day’s headlines seem to bring new corporate scandals to light, it’s heartening to know that being “good guys” has paid off for our Hot 100 companies. We were impressed by the number of entrepreneurs in this year’s listing who credited their success to their employees and spoke passionately about the importance of treating customers and staff well. Proving they not only talk the talk, but walk the walk, the number of companies offering employee benefits such as health insurance, 401(k) plans and stock options increased this year.”
Gas Prices are up, but there are now alternatives
Over at the Inc.com web site two articles caught my eye that seem to offer a problem and an alternative.
The problem: gas prices are going up and up and up, which is starting to pinch small businesses.
An alternative: new software makes virtual meetings over the Internet easy for small business people.
Although Inc.com didn’t link these two stories, I thought it showed the power of the market to offer creative solutions for those willing to look hard enough. We learned that price controls don’t work back in the Nixon era (I’m showing my age…). Gas prices are causing short-term pain, but let markets work and amazing things might develop! Maybe the market can begin to offer some alternative fuels sources and technological innovations. Who knows–maybe this crisis can lead us to a new and exciting era in our economic history. Every successful entrepreneur knows that out of chaos and change come opportunity.