Dr Jeff Cornwall

In May of this year, Peter Thiel, a co-founder of PayPal and an early investor in Facebook, awarded 24 young, aspiring entrepreneurs $100,000 to “drop out of school and become world-changing visionaries.”

Now that the publicity has settled down, I thought it would be a good time to offer the perspective of three entrepreneurs who dropped out of Belmont’s entrepreneurship program.

None of them was part of Thiel’s program, but each dropped out to chase his entrepreneurial dreams. However, all three eventually decided to return to school to finish their degrees.

John Price and Sam Dryden dropped out of the entrepreneurship program to pursue their photography and video-related businesses.

“I have never been a typical student, and I often found myself frustrated with classwork,” Dryden said. “When it looked like my business was going to be a success, I jumped at the opportunity to pursue something that at the time I decided was more important than a degree.

“We are told to study hard so you can get a degree and then a job. Hey, I already had income, so why waste time in school, right?”

Both of them saw a choice: stay in school and be a student, or pursue their careers as entrepreneurs.

“I knew that I wouldn’t be able to reach my business goals while attending a university and splitting the time,” Price said.

Timothy Weber left the Belmont entrepreneurship program to pursue his Web-based business, GoodMusicAllDay, full time. However, it wasn’t long before he decided leaving school might not have been a wise choice.

“After just one year out of college, I realized how little of a business background I had and how many ‘lessons’ I could have learned in a classroom instead of after they had already negatively impacted my business,” Weber said.

All three entrepreneurs believe the business experience they gained while out of school enhanced their learning curve when they returned.

“Leaving school gave me crucial experience that in my opinion made the return to Belmont more valuable than if I had never left,” Dryden said. “My experiences out in the ‘real world’ gave my professors leverage to turn class time into very meaningful time for me. It was no longer homework, and it was instead a focused business workshop that had actual repercussions in life.”

At Belmont, as in many other entrepreneurship programs across the country, professors encourage students to start ventures while in school to enhance what the course work offers them.

“The entrepreneurship program allowed me to understand my business before spending all my money and time pursuing it,” Price said. “The time in college provided me with the opportunity to focus on the bones of my business before I applied it to the real world.

“The time I would spend talking through my business ideas with other students was some of best feedback I could have gathered.”

These three entrepreneurs learned an important lesson when they dropped out of college. It does not have to become a choice between pursuing your dreams and advancing your education, as both work better when pursued hand in hand.

Consumer confidence continues to languish, which is leading economists to: 1) worry about a double dip recession, 2) worry about a new recession, 3) or finally agree with most of us that we are still in a recession.

Cautious customers are not spending their money.  This is leading many small business owners to continue to see their businesses go nowhere, fast.

Based on how their businesses are performing, more than one-third of small business owners (38%) believe we are still in recession, according to the just-released American Express OPEN® Small Business Monitor.

Economic sluggishness is impacting the psyche of entrepreneurs: 27 percent say they do not plan to grow in the next six months (up from 21% in the spring) and just 77 percent describe themselves as glass-half-full optimists (down from 85% a year ago).  I have heard a few even begin to exclaim, “What glass!!!???”

The survey did find a few signs that those who have survived are getting ready for continued difficult times.  Cash flow is more under control: 55% have concerns, down from 66% in the spring.

Starting a business right out of college has challenges — being light on experience and low on cash come immediately to mind.

But it offers a very important advantage.  These young entrepreneurs have very low personal overhead. 

Typically my MBA students and other older entrepreneurs we work with have a mortgage, car payments, tuition, and so forth to pay every month.  When they start a business this personal overhead, in effect, becomes part of the overall overhead of their business.  To break even they have to cover not only the costs of the business, but their own monthly expenses, as well.

On the other hand, my undergraduate students don’t bring much personal overhead to their new start-ups.  They are used to living on ramen noodles and sleeping on couches.  Because their monthly personal expenses are so low, the breakeven point of the business (when it can cover business expenses and cover the salary the entrepreneur’s needs to get by) is much, much lower than their older competitors.  This makes getting cashflow positive a much easier task, thus increasing the odds that they will survive the trials of starting the venture.

Erin Blaskie offers her views of the pros and cons of starting a business right out of college in an article at Business on Main.

With the continued weak economy and little hope of recovery anytime soon, we can expect to see even more “accidental entrepreneurs” emerge. These are unemployed people whose best hope of generating income is to become self-employed or to start a business.

Ami Kassar is a typical accidental entrepreneur. Kassar had spent a decade in senior management with a large, national credit card company based in Philadelphia. When the recession hit in 2008, he suddenly found himself unemployed. His employer did not survive the recession-induced shakeout in the financial industry.

Finding a new job that was similar to his old one did not look very promising, so Kassar decided to launch a business. He started Multifunding, which helps small businesses find debt financing.

Like most entrepreneurs, Kassar faced challenges in the startup of his venture. However, many of his missteps can be traced back to habits and expectations that came directly from his years of working in a corporate setting.

So let me offer a brief job description of an entrepreneur to help those of you who, like Kassar, are facing a career transition:

1. Do everything. The temptation when you start a business is to continue to concentrate on what you did well in the corporate world and bring others in to take care of the rest. However, to build a successful business you need to learn every aspect of your business and perform every job. You need to know the business inside and out, from top to bottom.

2. Become a financial wizard. Set up a sound record-keeping system. Be your own bookkeeper for as long as you can. Just as you need to know every aspect of the operation of the business, you also need to know the numbers. The best way to do this is to make the financial aspects of the business a major part of your job.

3. Minimize overhead. The temptation is to surround yourself with the comforts you had in the corporate world — a nice desk, a new car, a big office, support staff, and the newest and best gadgets. However, paying for all that overhead is what stands in the way of your bringing home a paycheck. So start lean, bootstrap whenever possible and make operating frugally a part of the culture of your business as it grows.

4. Watch your cash flow. As the old saying goes, “The leading cause of business failure is running out of cash.” Learn the rhythm of your cash flow. Watch every expense like a hawk. Treat every dollar as iff it might be your last.

5. Schedule balance. Startups quickly become all-consuming. They can take up every waking moment if you let them. Build time in your life for those things that really matter — your family and your friends.

Fortunately, Ami Kassar is an accidental entrepreneur who is making a successful transition out of a corporate career. Multifunding is now growing and doing well.

To be successful, accidental entrepreneurs have to develop new work habits and an understanding of what the job of an entrepreneur is really all about.

Belmont’s Entrepreneurship program once again made the Top 25 in the country for Entrepreneurship magazine and the Princeton Review.

From over 2,000 schools surveyed by The Princeton Review for Entrepreneur
magazine, Belmont University was recognized as having
one of the top 50 entrepreneurship programs in the country.  We ranked 19 in the undergraduate category
of the survey.

This is the eighth annual ranking of the nation’s top 25
undergraduate and top 25 graduate programs for entrepreneurship.

The creativity, work ethic and entrepreneurial spirit of our
students and alumni is what makes our program work.  Our success is a
direct result of their success.

Belmont’s program was evaluated
based on key criteria in the areas of teaching entrepreneurship business
fundamentals in the classroom, staffing departments with successful entrepreneurs,
excellence in mentorship, providing experiential or entrepreneurial
opportunities outside of the classroom, as well as non-traditional,
distinguishable aspects of their programs.
 

“Behind the top ranked schools is not only a great formal
classroom experience, but a cross-disciplinary approach to teaching
entrepreneurship that embraces and encourages a student’s vision to build a
successful business,” said Robert Franek, The Princeton Review’s Senior Vice
President – Publisher and nationally recognized expert on college admissions.

“The right education enhances and reinforces curiosity and
creative thinking in entrepreneurs,” commented Amy Cosper, vice president and
editor in chief at Entrepreneur.
“This ranking provides a unique look at top schools that offer the type of
training, encouragement and direction that nurtures entrepreneurial skills.
It’s an excellent resource for those interested in academics as a pathway to
their goals, and it can help tremendously in the discovery process to finding the
right program.”

The results of the survey, along with the analysis, appear
in the October issue of Entrepreneur,
which hits newsstands today, September 20^th.

Thanks to all of you who make our program shine!

Dr.C.