Entrepreneurship Builds Character

Virtual Entrepreneur reflects on some of the ways that entrepreneurship builds a person’s character in a post about the non-financial rewards of starting a business.

While there is no guarantee of riches, through the pursuit, you will obtain rewards of character. And the development of sound character is perhaps the most important perk of entrepreneurship. At the end of the day, no one really cares how much money you made. They care about who you are.

I could not agree more.  And we need to be deliberate in our decision making and actions in business, as each one shapes our character.  From Bringing Your Business to Life:

[T]he moral and spiritual character of an entrepreneur or businessperson will be captured in the responsible relationships he has forged with others in the actions of running his business. More specifically, this can be shaped by the opportunities he pursues, who he chooses to do business with, who he hires, decisions he makes about products and markets, decisions about whether and how fast to grow, the corporate culture he builds, and his engagement with the community as a leader and/or citizen.

Two Sides of Risk in Current Economic Conditions

My column in today’s Tennessean examines risk in these difficult economic times:

Risk. It seems to be at the heart of entrepreneurship. Whenever I ask a group to describe entrepreneurship, the word risk is always one of the first things people mention.

Most often people associate risk with failure. This is commonly called “sinking-the-boat risk.” It is the risk of putting your money, your time and your reputation into a new business only to have it fail.

Continue reading Two Sides of Risk in Current Economic Conditions

August TOP 9 Questions from NFIB

Here are the Top 9 questions from the NFIB Research Foundation for August 2008 from their searhable database 411 Small Business Facts:

 

1.

 

2. INFORMATION SOURCES – What is the most important media source of business news and information for small employers? (Vol. 7, Iss. 6, Q#6).

 

3. EMPLOYEE OBESITY – Do small employers consider employee obesity a business issue or a personal issue? (Vol. 4, Iss. 3, Q#11).

 

4. ECONOMY – How many small employers have made a business decision in the prior six months directly as a result of action taken by the Federal Reserve Board? (Vol. 8, Iss. 1, Q#19a).

 

5. POLITICS – How interested are small employers in public affairs and politics? (Vol. 5, Iss. 4, Q#1).

 

6. INCOME – What portion of small employers obtain 95 percent or more of their entire personal income from owning their (primary) business? (Vol. 7, Iss7, Q#7).

 

7. PRIVACY – How many small employers maintain information on customers or potential customers that reasonable people would consider personal or confidential? (Vol 1, Iss. 8, Q#6).

 

8. INSURANCE – What do small employers think is the largest problem with business insurance? (Vol.2, Iss. 7, Q#1).

 

9. EMPLOYEE TRAINING – How many small employers in the prior three years sent at least one employee to a four year college to obtain or upgrade job skills? (Vol. 5, Iss 1, Q#26a).

 

Employee Discount Programs for Smaller Employers

Smaller employers seem to struggle with offering comparable benefit packages to those that larger employers can provide to employees.  An employee discount program is one benefit that has grown in popularity in recent years that can be cumbersome for smaller employers to manage.

 

Belmont alumnus Brian Roland and his brother launched a business called Abenity in 2006 that is a turn-key solution to help organizations and businesses, particularly smaller ones, offer corporate discounts to their employees.  

 

“This is a great time for a company like Abenity to advance in the market because with a slow economy, companies of all sizes are looking for cost-effective ways to provide additional compensation and benefits to their employees. Now even small companies can offer a world class employee discount program for their employees. It isn’t just the Fortune 500 companies that have access to this kind of program anymore,” Abenity President and CEO Brian Roland said.  “In addition, many companies are operating with a very lean staff right now.  We manage the entire employee discount program so that corporate staff can focus on day-to-day business challenges.”

 

Abenity‘s national vendor network provides each participating organization and their employees with discounts from over 18,000 hotels, 9,000 florists, 5,500 car dealerships, over 6,000 restaurants, and 90,000 concerts & events in 50 countries. Abenity has partnerships with national retailers including Costco, Target.com, Brinks Home Security, PODS, LifeLock, Kaplan, DishNetwork, TiVO, Overstock.com, Brooks Brothers, Philips Consumer Electronics, and BlockBuster. The Perkline network also includes discounts to over 120 national attractions and theme parks.

 

What is particularly impressive is that the Roland brothers have been able to build this competitive business through bootstrapping.  They provide quality service to over 45,000 members (and counting) with very little overhead, helping to keep this benefit affordable to small employers around the country.

Strategic Alliances

It can be hard for entrepreneurs to get their heads around what a strategic alliance can look like.  After all, what could a small entrepreneurial venture offer to a big corporation?

A good example can be seen in a new alliance that involves one of my former students from the University of St. Thomas.  From the New York Times:

Is it possible for a global corporation to become a local favorite?

Origins is about to find out with its new concept store here where shoppers are encouraged to linger over a mug of steaming tea, get a free chair massage and appreciate a kind of slow beauty experience a world apart from a quick jaunt at a department-store counter.

“There are so many different pieces to this store that invite you to enjoy the lifestyle, enjoy the tea and incredible organic food, wellness services and experience the new products,” said Jane Lauder, the senior vice president and general manager of Origins, part of Estée Lauder Companies.

Paul Cattin’s business Pekoe Sip House, which operates two retail stores in Colorado, is providing the tea shop for this new concept. 

 

Entrepreneurial A.D.D.

There is a phenomenon I like to call Entrepreneurial Attention Deficit Disorder (EADD).

EADD afflicts many entrepreneurs, but is a particular problem for primarily first-timers.

What happens is this — once the entrepreneur starts to understand all of the opportunities that are exist in the marketplace, they become easily distracted from the purpose of their intended start-up venture.

I tell entrepreneurs that EADD is the main reason I have them write and memorize a mission statement.  It is not for outsiders, such as investors and bankers.  The mission statement is for them to keep their focus!

I have often suffered from this condition.  It becomes a compulsive reaction to perceived needs in the market.

I learned over the years (usually the hard way) to control my impulses.  But I am not always successful.

Case in point.  While Mike Naughton and I were working away on our book Bringing Your Business to Life I was approached by the editors of a new series of entrepreneurship texts being developed by Prentice-Hall to write a textbook on Bootstrapping.   How could I say “no” to that??!!  After all, I write and teach about bootstrapping all of the time.  I rationalized to myself that all would go smoothly with the book with Mike and then I could dive into the new book.

Well, as they say in the world of entrepreneurship “stuff happens.”  Mike and I got delayed a bit in our new book due to the decision to make one more major revision (a good decision).  I forgot that entrepreneurs always underestimate the time and cost to get things launched.

And then we got the opportunity to do a second edition of our book Entrepreneurial Financial Management.  How could I resist that opportunity??

And then my good friend Dr. George Solomon at George Washington University approached me about writing another new textbook.  I have never had the chance to write with George, so again, I could not control my impulses and said “yes.”

And so it goes….

I guess I have a chronic and incurable case of EADD….

Back to School

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This is the best time of year to be a professor!

Students are back on campus and classes are getting ready to start this week.

Belmont University is a case in point for the power of publicity.  At the University level, we are coming off our third straight year in the NCAA basketball tournament (we are the team that almost beat Duke last spring).  This fall we will be hosting the third Presidential Debate.  Both of these have given us so much added name recognition.  We have record enrollments this fall.

In our Entrepreneurship program, we have also gotten some wonderful attention in the press, which has added to interest in our growing program.

I am teaching a grad and an undergrad class in business planning.  I try to tweak my classes every semester.  This fall I intend to focus much more heavily on planning for tough economic times.  Bootstrapping will certainly get more attention.  Also, I will be getting them to think more clearly about the upside and downside risks that current economic conditions create.

Should be a great fall!

Great Source of Stories that Offer Insight and Inspiration

The Stanford Technology Ventures Program (STVP) in the School of Engineering at Stanford University offers over 1,200 free, high-quality podcasts and video clips of entrepreneurial thought leaders from Silicon Valley and beyond at its Entrepreneurship Corner (ECorner) web site. The content is great for classroom instruction, research, and general enrichment. They report heavy traffic from entrepreneurs looking for insight from other entrepreneurs. 

 

The site was formerly called Educators Corner, but with the new site and name they have added many new features.  (Make sure to see the Creative Commons license under Terms of Use for guidelines at the bottom of their website).

 

 

Understand Risk in Tough Economic Times

Risk.  It seems to be at the heart of entrepreneurship.  Whenever I ask a group to describe entrepreneurship, the word risk is always one of the first things people mention.

Most often people associate risk with failure — we call it “sinking-the-boat risk.”  We know that only about half of entrepreneurial ventures make it five years (for the record, the 10-20% figures most people cite are urban myths).  The complex and uncertain economic times that we now face only heighten the risk of failure in people’s minds.

The other type of risk is one that is not always given its due.  There is a corresponding risk associate with not pursuing an alternative — we call this “missing-the-boat risk.”  Entrepreneur Charles Hagood, co-founder of TAG and HPP, describes this type of risk in our book Bringing Your Business to Life, “We weren’t as aggressive in the very early days as we probably could have been.  I think we didn’t realize all we had to offer. I think we lost a lot of opportunities in the very early days, not recognizing what was there.”

Just as the risk of failure can increase during tough times, so can the risk that we miss viable opportunities.  People seem to get too cautious during times like these.  But, a slow economy and inflation do not shut down new opportunities.  There are still many great markets that are untapped or underserved and probably fewer competitors willing to take the risk to serve them.

Clearly we need to be more vigilant in assessing opportunities due to the enhanced risk of failure that is a result of these tough economic times.  But there are still many opportunities out there, and those who pursue them prudently can still find great success.