Belmont University

March 30, 2004

Reverb "off the wall": Now that we have our space, what do we do with it?

The reverbmedia crew is busy doing some space planning and trying to figure out the best way to build inventory in this posting.

After our equipment was delivered and put into storage, it was time to get to work putting together the inside of the store. New member Heather Stohl, a talented art major, took the reigns in gathering the materials and in putting together a plan for painting the store and putting in the equipment.

For four days, members worked in shifts to lay down the layers of sky-blue paint on three sides of the room (the fourth side consisted of large windows). After this, we placed a warmer, red paint into an alcove in the back; this would be our sitting/lounging area. After the first layers were dry, Heather went back and painted a vertical design on opposite walls?short rectangles that slowly contorted into larger squares near the ceiling and floor. This imitated the sound signals found on recording consoles, and also kept with the ?square? theme while adding accents of warmth in the store.

While the team worked on this, we also began planning an event to continue gaining inventory. We actually held the event before we began painting the store.

We planned a luncheon event on campus in conjunction with the Curb Caf鬠the hot new eating place on campus. The Caf頷ould offer a special buffet deal on pizza, and we would set up a booth to buy used CDs. It seemed like a good idea for college students?get money for CDs, and use the money to buy food! We posted fliers around campus, put mail-outs in most student mailboxes, placed an announcement on the Belmont website, and attempted to post fliers on nearby college campuses (this attempt was ultimately thwarted by rainstorms that blew through the area, drenching our efforts). However, despite all the publicity and the offer of food, the endeavor was a flop. I don?t think we focused enough on the people outside of Belmont?s campus; also, a round of door-to-door visits might have been more convenient for students because their CDs would have been right there. You have to take chances?sometimes they work, sometimes they don?t.

On the bright side, we did have our first customer; Joe Drake bought a Clay Walker CD that someone brought in during the luncheon. We took his pic right there in the Caf頡nd started playing the CD there on Geoff?s laptop. I think part of being a capable entrepreneur is looking at any situation and bringing good out of it; the Curb Caf頦lop may not have been good for our inventory, but it was good for our team. It gave us time to get to know each other better outside of meetings; it helped us to become a closer-knit band of entrepreneurs instead of a large group of students.

We were aware, however, that there was a large risk that we could fall short on inventory even with events like the luncheon, so we had continued looking for wholesale suppliers specializing in used CDs. We also looked on E-bay again to find deals on bulk cases of CDs that we could buy instead of bid on. We found a several small packs (around 75-100) that we considered, but only bought a couple. Eventually Joe Drake found a supplier in New York who listed each of his CDs there on the website. This was great because we knew exactly what we would be getting. The CDs were all in good condition and came shrink-wrapped. After obtaining price quotes and other information from him, we had a late night business meeting to determine how many ?current? CDs (late 90s-present) we should purchase and how many ?older? ones. We decided on a mix of about 2/3 older CDs and 1/3 of the newer ones, because the newer ones were a bit more expensive. We put in our order the next day.

Catch the entire reverb story at this link.

Jessica Phillips


March 29, 2004

Business Planning versus a Business Plan

An article in Inc.com tells a story about entrepreneur Craig Knouf who reportedly has revised his business plan more than 120 times. While this might seem a bit extreme (or as my student Joe called it, ?compulsive?), I think that it illustrates a critical function of business plans.

I would much rather see an entrepreneur make the business plan as a process, not an event. By continually tweaking, adjusting and improving his plan, this entrepreneur is making business planning an integral part of how he runs his business. Too often, the business plan is a document that once written, sits on a shelf gathering dust.

The business plan is best if it is a living document. In my businesses, there were many times when you couldn?t find a full and current copy of a business plan bound and sitting on my desk. But you could find all of the key elements at work with my partners and our staff, and alive in our meetings every week. It was evident throughout all of our business, but not to be found in a single place. That is how we brought our plan to life in our business. For Knouf it was to continuously improve the document and use it to guide his business. Either way, it makes the business plan an evolving part of an ever changing business venture.

This illustrates why I have always shied away from writing business plans as a consultant. The process of the development of the plan can be one of the most important tasks an entrepreneur performs. But it is the process, and not the outcome, of business planning that truly matters.


Carnival of the Capitalists

This week's Carnival of the Capitalists is up and running. Visit it at Admiral Quixote's Roundtable!


What's in a name?

Wharton's on-line newsletter has an article on the generations old practice of entreprneurs naming their businesses after themselves. Companies from Ford to Dell have followed this custom. But, when the founder of one these businesses has significant ethical or legal issues arise, this can create a public relations disaster, such as that now facing Martha Stewart's namesake business. This article examines the marketing a p.r. advantages and disadvantages of naming a business after its founder.


March 28, 2004

Entrepreneurs give back

One of the implicit rules of a healthy free enterprise economy is that those with wealth recognize their obligation to give back to their community and to the broader society in which they live. The National Dialoge on Entrepreneurship reports that the Slate 60, which lists the top sixty philanthropists each year, has good representation of entrepreneurs among this year's honor roll, including "Joan Kroc, widow of McDonalds' Ray Kroc, who donated more than $1.91 billion to various causes such as the Salvation Army and National Public Radio. Michael Dell ranks No. 2; his Dell Foundation made more than $673 million in grants last year. Other big entrepreneurial givers include Ted Turner, Paul Allen, and Pierre Omidyar of Ebay."


March 25, 2004

Tech Start-ups dead? Maybe not!

The day of the technology start-ups is dead. Tech entrepreneurs were the wave in the 1990's, but are no longer being found. If you didn't make your fortune in the dot.com frenzy you are out of luck. Or are you?

Orn Malik recently authored an article (December 2003 Business 2.0 pulled from Gigaom.com) that claims that tech entrepreneurs are alive and well, thank you very much. How are they doing it? By taking advantage of the very commoditization of chips and other hardware that has pushed prices of these goods to rock-bottom prices. Such bargain basement hardware has allowed these new entrepreneurs to create exciting new products with off the shelf components that are running circles around products produced by the giant companies in the technology world, even in areas that they have been dominant like data storage.

Why aren?t we hearing about this trend? It is precisely because of the nature of this new wave of start-ups. Since they buy existing product off the shelf for low prices, they need relatively little start-up money. Technology start-ups have moved from the world of venture capital and IPO?s to the land of bootstrapping. Malik tells of one tech company start-up that needed only $40,000 to get up and running. George Gendron calls bootstrapping entrepreneurship in its purest form. "It's the transformation of human capital into financial capital, sweat equity into bankable equity. That's what we mean when we talk about 'creating value.'"

The strategy of these companies appears to be one that is based on very short product life cycles. The large companies can move very aggressively against these small companies, so they focus on continuously looking for new opportunities in the market.

The fear that Microsoft, Dell and so forth would eventually create monopolies that will lead to higher prices over time may not be here quite yet. These entrepreneurs are keeping the technology market competitive, innovative and nimble. Free market capitalism seems to be alive and well in the tech sector after all. In an industry that most of us had written off, "entrepreneurship in its purest form" is flurishing.

Thanks to Bill Hobbs for sending this article to me.


March 24, 2004

Bootstrapping Long distance costs for small business

Free2Innovate sent me an interesting link regarding the emerging use of VOIP (that means using the Internet for phone calls for those of you, like me, who are not techies) by small businesses for their long distance phone calls. Like many costs, small businesses can pay an average of much more per employee for long distance calls than larger companies so savings offered by new technologies like this can offer real savings for the bootstrapping-minded entrepreneur.


March 22, 2004

Carnival of the Capitalists: March 22, 2004

Here is this week's installment of Carnival of the Capitalists. It is my pleasure to present this wide variety of most interesting posts and commentaries on business, economics, and free enterprise. Next week Carnival of the Capitalists moves on to Admiral Quixote's Roundtable.

Read and enjoy!

A Good Read

Todd at A Penny For... asked me to highlight the second Business Blog Book Tour. The book being featured on this tour is Creating Customer Evangelists by Ben McConnell and Jackie Huba. The tour is going on now and ends on Thursday. Go check it out!

Public Policy Issues

Steve Verdon examines the impact of excessive environmental regulation (he?s against it) on employment. He takes on some of Sen. Kerry?s positions in this lively posting.

Robert Prather talks about the true state of the American Economy (much better than the Democrats are leading us to believe, that you very much) at his site Insults Unpublished.

Bill Hobbs has reported on more evidence of record levels of LLC formation (read about it here and here), an indicator of entrepreneurial activity. But, his report has raised some significant debate. The debate centers around two points. First, is the household survey an important piece of the puzzle in understanding true employment and the entrepreneurial economic recovery (it is and it is). Second, do LLC formations serve as a leading indicator of economic prosperity (it does).

In case you missed it last week, I posted information on the agenda for entrepreneurial economic growth presented by the National Governors Association here at Entrepreneurial Mind.

Goobage reveals a different interpretation of a recent survey on the opinion poll question dealing with state income tax in Tennessee.

The SEC's proposed shareholder access rule is one of the most controversial rule changes in years. The US Chamber of Commerce has announced that if the SEC adopts the proposed rule, as it is widely expected to do, the Chamber will challenge the SEC's authority so to do. In this post, ProfessorBainbridge explains why the Chamber will lose.

Catallarchy argues that eespite the outrage in much of the blogosphere, there are sound economic reasons for charging a wrongly imprisoned individual "room and board" for the time he spent in prison.

The Pro's Edge puts its focus on the Ontario energy crunch in this post.

Finance and Economics

Synergy Fest examines the hotly contested issue of expensing options. Although a challenge, it is clearly something they believe needs to be addressed even if it is difficult, subjective and too easy to fudge.

Arnold Kling investigates an interesting rule of thumb for real estate valuation and its ability to examine real estate pricing in a given market. It may help many to avoid wrongly assuming that real estate is always a good long term investment. It may not always be so?.

Legal Issues in Business

The Interested-Participant web log offers his take on the legal morass that is Microsoft these days.

Interested-Participant muses about a recent lawsuit against Chevron, which gave the lawyers involved a cool $20 million.

Entrepreneurship and Small Business

Bad Money offers his ?two cents? on a turn $1 into $2,000 get rich quick scheme.

Small Business Trends explains how the use of network mapping can be a cost effective way to sell small businesses.

Society and the Economy

My friend and colleague Joe Smolira tackles one of those ?what is the meaning of life? kind of issues with his post on the purpose of business. Joe argues, like any good finance guy, that the purpose of business is to maximize shareholders wealth.

Raising Sand offers a very thoughtful essay on the perils of automation without thought of its social consequences.

Charles Simmins at You Big Mouth, You! examines the social and economic realities of Rochester, New York in light of the radical transformations occurring among its largest employers.

The Big Picture explores the problems that economists are having with job forecasting.

Frank Scavo presents an interesting analysis of why he believes that offshore software development may lead to increases in development and new jobs in the US.

Marketing

At Dispatches from the Frozen North (I love his blog?s name) the importance of shifting the emphasis of customer service from simply a cost to a critical part of effective marketing.

Martin Lindeskog looks at various takes on the role of Google and advertising and marketing on the Internet.

Les Jones gives his latest installment on e-commerce at his blog. He has some interesting information on international e-commerce in this post.

Wordlab recaps a bad week for The Coca-Cola Company's bottled water brand, Dasani, which had to admit publicly that the water they use is simply tap water. This is the ultimate p.r. OUCH!

Fouroboros provides a link to parts one and two of his three part series exploring the relationship of deeply personal motives to corporate brand identity and the challenges faced by "flat" brands.

Competitive Strategies

Rob at BusinessPundit offers a post that deals with the ways a devil's advocate can benefit strategy. Although beneficial, they may give less than their all when it comes time for execution.

HobbsOnline offers a commentary on the changing economics of the news business, and why Bid Media that thwarts reader/viewer involvement is doomed.

David Foster discusses personality assessments and placement in this post.


Predictions

Well...the Packers fell short, the Belmont Bruins came within a couple of games of the NCAA but didn't get there, and Kentucky.........I hope my other predictions do better.....


March 19, 2004

Carnival of the Capitalists will be here next week!

The Entrepreneurial Mind will be hosting the Carnival of the Capitalists next week. I have received many interesting posts already, so it should be a great installment. For those who have not experienced Carnival of the Capitalists, it is a gathering of blog sites in one location that offers a variety of entries dealing with various aspects of business, commerce and economics. It gives you an opportunity to sample many different writers in one location. I have found many new favorites by becoming a regular at this site as it roams about the Internet.

To see this week's Carnival of the Capitalists you can check it out here.


March 18, 2004

Governors' Entrepreneurship Agenda

The National Governors Association has issued a comprehensive agenda to support entrepreneurial activity in this country. It is important that public policy is beginning to acknowledge the role of entrepreneurship in this economy and that our leaders are wrestling with how to reshape the regulatory morass to free up this engine of economic growth.

The report outlines the role of entrepreneurship today:

1. 70% of economic growth and one-third of differential economic growth comes from entrepreneurial activity.

2. 35% of Fortune 500 companies are displaced every three to four years, and many of the new entrants are companies still operated by the founding entrepreneurs.

3. The INC 500 firms grow at an average rate of 1,312% per year.

The governor?s proposed agenda includes the following recommendations:

1. ?Integrate entrepreneurship into state economic development efforts?. What is most intriguing about this recommendation is that it includes a refocus of traditional state economic development efforts toward the support of entrepreneurial economic development.

2. ?States should use the education system to nurture and encourage future entrepreneurs?. Research has consistently shown that the single most important determinant of entrepreneurial success is education about business formation and growth. This means change in business education at the university level. Rather than teach entrepreneurship as a side discipline over in the corner, we need to reinvent business education to meet the needs of the entrepreneurial economy.

3. ?Incubate entrepreneurial companies?. Businesses benefit from support in their early formation. Such programs need to be carefully planned, as some incubation and support programs have worked much better than others.

4. ?Invest in diverse sources of risk capital for the state?s entrepreneurs and growth companies.? This agenda item is important as it recognizes that too many economic development agencies have historically put all of their eggs in the venture capitalists basket. In some regions, there may never be a deal that fits a venture capitalist. Rural areas may need very specialized approaches to assure that funding is available. So supporting the array of funding options that will meet the myriad of needs that entrepreneurs and growing companies face is essential.

5. ??Get out of the way? through regulatory reform and streamlining?. In addition to educating entrepreneurs, getting out of their way has proven to be the other most important key to unleashing entrepreneurial development. Studies have shown over and over again that small business faces a disproportionate level of governmental regulation. These laws and rules are set up with larger employers in mind, but the impact on smaller businesses is too often overlooked.

This agenda is critically important as it not only helps to support our entrepreneurial economic recovery, but it does so at the state level, which is where the attention needs to be focused for most of these issues.

This report was funded though a grant by the Kauffman Foundation and was reported by the National Dialogue on Entrepreneurship.


March 17, 2004

Ethics and Entrepreneurship Conference At Belmont

The Belmont Center for Business Ethics and our Entrepreneurship Center will be jointly hosting a conference on April 1, 2004 from 7:30 - 11:00 a.m. The conference title is "Integrating Faith and Work: Building your Business on a Solid Moral Foundation". Our keynote speaker is one of my favorite people, Dr. Michael Naughton. This address will be followed by a panel of entrepreneurs discussing how their values have influenced their business practices.

This should be an amazing event, so I hope any of you who are local can attend. Contact gannb -at- mail. belmont.edu for more details on how to register. The cost is only $30 and includes a continental breakfast.


The right kind of growth

Rob over at BusinessPundit recommends a book that I am definintely going to buy: Ram Charan's Profitable Growth. Go for batting average, not for homeruns. Focus on growing profits, not just growing revenues. Some of the best words of wisdom we can off any entrepreneur!


March 16, 2004

LLC formation data supports entrepreneurial recovery assertions

Bill Hobbs has reported on more evidence of record levels of LLC formation (read about it here and here), an indicator of entrepreneurial activity. But, his report has raised some significant debate. The debate centers around two points. First, is the household survey an important piece of the puzzle in understanding true employment and the entrepreneurial economic recovery (it is and it is). Second, do LLC formations serve as a leading indicator of economic prosperity (it does).


March 15, 2004

Best small towns for entrepreneurs

Site Selection magazine has reported its top small towns for entrepreneurial start-ups or business relocation. They are:

Traverse City, MI
Plattsburgh, NY
Bowling Green, KY
Mooresville, NC
Danville, IL
Effingham, IL
Morristown, TX

?In Boomtown USA: The Seven-and-a-Half Keys to Big Success in Small Towns, author Jack Schultz cites the fundamental factors that separate Traverse City from the pack:

? Civic leaders adopt a can-do attitude that promotes change.

? Political leaders adopt and clearly articulate a vision for growth.
Infrastructure resources of the community are leveraged to encourage new and expanding industries.

? Strong leaders are grown from within.

? Leadership encourages an entrepreneurial approach to growth and development.

? Planners retain local control over industrial growth policies.

? Marketers build and leverage the community's brand identity.?

These towns have all embraced change and not tried in vain to hang on to failing industries. When government enters into duplicitous relationships with businesses and industries and tries to prop them up when they begin to falter, not only will the companies fail anyway, but the town will suffer. Free markets and entrepreneurial wellsprings are what keep these towns vital and alive.

This report was sited in this week's National Dialogue on Entrepreneurship.


advice to young aspiring entrepreneurs

Ross Mayfileds' Weblog offers some excellent advice for young entrepreneurs. It is directed at collegiate entrepreneurs, but has good words of wisdom for any young aspiring entepreneur.


Tan and rested

Back from vacation and ready to go. This week's Carnival of Capitalists is located at the always informative and interesting TJ's Weblog. This week is packed with interesting posts, so take a visit.


March 04, 2004

Entrepreneurs on vacation: it doesn't have to be an oxymoron

Rest. Entrepreneurs can never seem to get enough of it. Vacations. Not a word that is in many entrepreneurs? vocabularies. Yet true rest and real vacations are essential for the entrepreneur?s health, and quite often the business?s health.

When we first started our business in North Carolina, I met an entrepreneur who had decided that one of the fundamental objectives for her business was to be able to take six weeks vacation a year. Just like any goal, be it profit or valuation for her business, this was a goal that took her time to reach. At first she could hardly take a day off. But, she kept this goal in front of her and began to make decisions and run her business in a way that allowed her to take more time off. First long weekends. Then a week. And finally it got to the point where she could take two to three weeks off two or three times a year. The business ran well in her absence, but only because she had built in systems and hired the right people to make it work. And so you don?t think that she was lazy and did not build her business to its full potential, she became the dominant player in her marketplace and eventually sold her business at a high premium. The fact that it could run without her for extended periods and was so very profitable, provided an earnings multiple that valued her business well beyond most comparable companies in her line of work. She became one of my person heroes!

Rod Walsh and Dan Carrison wrote a wonderful article a few years back that offers some specific ideas on how to move a business in this direction. They recommend the following:

1. Admit that you are not indispensable. ?If you're not taking time to unwind, you're setting a terrible example for your employees. Not taking a vacation is not a sign of an indispensable business owner; it's proof of an ineffective leader. It's the mark of an irritable boss with high employee turnover.?

2. Begin to delegate. ?That you're afraid to take a vacation tells us you've been too active in the mundane day-to-day tasks of your business and have not allowed your employees to grow. If you're doing the same tasks as your employees, stop it immediately?you're the boss, the leader, the visionary.? Identify tasks that others can and should be doing, and begin the process of training your employees. Once trained, let them do what they have learned. They may make mistakes at first, but use this as a chance to coach and teach, not to take back and do it yourself.

3. Start with short vacations, like my hero in the story above, and begin to build toward longer ones as the shorter ones get easier and go smoothly.

4. Choose times that don?t demand your attention. If cash flow is a worry, plan you times away between big check runs and payroll deadlines. If you have quieter times during the month or year, use them for your time off.

5. Give your employees a life line to reach you, but make very clear the rules for such contact. I did this with great success. At times they called to often or at times to little, but again use these as opportunities to coach and teach.

So being one who tries to practice what I preach, I am bidding all of you a brief farewell. I am joining my wonderful wife and two college aged kids on a week in Disney World! During the interim, please feel free to root around in my blog. I hope you can find some entries that you missed in the past that may be of interest today. So until I return on March 15, I wish you all Godspeed.


March 03, 2004

government stifles home-based business development

A study by Henry Beale published and funded by the SBA Department of Advocacy reports that the IRS and local zoning laws create major headaches and hurdles for home-based businesses (thanks to the National Dialogue on Entrepreneurship for featuring this study).

Like other studies on small business, this research clearly shows that these birthing grounds of entrepreneurial activity suffer from a disproportionate share of government intervention and regulation when compared to larger corporations. Why is this important? Just keep in mind the number of highly successful ventures that started in people?s kitchens, garages, basements and bedrooms. While less than 10% of businesses operated out of the home have employees, many of these will create jobs and economic growth as they leave the bootstrapping environment of a home business and move out into the marketplace. Our entrepreneurial recovery needs job creation and new business formation. And home-based businesses have a long history of spawning successful ventures. Once again, let me state that the evidence from all over the world supports the premise that the best role for government in entrepreneurial development is to provide access to education about the process, and then get out of the way!


March 02, 2004

reverb is in the news

reverb also made the news! Check it out at this link. You can follow the reverb story at this link.


March 01, 2004

Another Belmont Student business makes the news!

In addition to the reverb story, which is being featured at this site, we have a group of students who just launched an art gallery and graphic design business as part of their studies on campus. Here is a recent article about this business.


reverb "off the wall": the delivery

Here is the next installment from our students starting up their business. After successfully bidding on E-Bay, they now are waiting for the truck to arrive with their equipment being shipped from Colorado. Catch the entire reverb story at this link.

I got a call from Becky Gann on Friday, January 2, 2004, to tell me that the semi carrying our equipment would be here the next morning. I was supposed to meet the truck at the Public Storage Unit on Charlotte Avenue at 9:00 the next morning. I asked my little brother Jacob if he wanted to go with me since it wasn?t going to take very long. I promised him a meal at Caesar?s Ristorante Italiano after we were finished.

The next morning Jacob and I headed to Nashville from Dickson. We arrived at the storage place and we found our unit. It was all the way in the back. I had to drive through several twists and turns to get back there. We then came back around to the front where we met Becky and one of her friends. She had some more paperwork that the driver needed to be signed. After another five minutes waiting, a blue and white North American Freight semi stopped in the median on Charlotte Avenue. The driver jumped out and met us. He began to look around the place to see if he could pull the semi through. After walking through the path and looking at the diagrams in the main office, he decided that he would give it a try.

This is where the real fun started. The driveway was pretty narrow with concrete curbs on both sides and two yellow metal poles coming out of the pavement on the left. The main office was straight in from the road with the bend in the driveway less than 3 feet from the side wall. He decided to give driving into the place a shot, but he couldn?t make the turn sharp enough. He was just a couple of feet from running straight into the main office building. He got out of the truck and then started to measure the distances on each side of the truck. He then explained to us that his truck had a loading dock attachment at the back. Because of this his back axles were fixed in place. He told us that if he was in a regular truck, he would just move the axles to make the turn sharper.

He decided to try once again, but this time he would try to pull in from the opposite direction. Becky, her friend, and I blocked off traffic on Charlotte Avenue so that he could back up. We saw him driving off into the distance, and then we lost sight of him. About five minutes later we see him coming down the street. He flew past the storage place without even stopping. We all looked at each other thinking what is he doing? Did he forget where we were?

After another five minutes or so he came back in the original direction and he parked the semi in the median again. He got out and told us that he could not make it. He suggested sending the shipment down to Atlanta where they would load it on a smaller truck. This was going to cost a couple of hundred dollars so he also suggested that he could pull over at a vacant Big Lots just down the road. From there we could unload the semi into a smaller truck and then take it over to storage.

Becky called two of her friends who said that they would help. About an hour and a half later (See the next installment for the conversation with the truck driver to see how we wasted this time), they arrived with a small Toyota pickup and a moving van. We had to unload the semi onto the truck and van. Then we had to drive over to the storage place and unload it into our storage unit. The hardest part was handling the metal legs and sides for the CD racks. They were surprisingly heavy. The back of the pickup was riding very low with all the metal in it. We made several trips back and forth between Big Lots and the storage place moving all the racks, boxes, and other equipment.

What I thought was going to take two hours at the most ended up taking almost six and a half hours. We finished up at the storage place about 3:20. I still kept my promise to take my brother to Caesar?s though. We got there right at 3:30 when they started closing up and getting ready for dinner. Jacob and I were the only ones in their while everyone else was cleaning up. Jacob was a big help that day and I felt bad that it took his whole day. I asked him what I could do for him. We decided that I would also get him a Gary Allen CD.

Joe Drake