The Entrepreneurial Mind

Mission statements can be a real conundrum for most entrepreneurs. They are so excited about what they do and want to capture every little detail when asked, "So, tell me about your business." So in response, many an entrepreneur will go on, and on, and on.....

The key is to capture your business in a succinct, yet powerful statement that can communicate to the world who you are. Now there is a blog site, Man on a Mission, dedicated to mission statements. It is a great place to explore examples of mission statement and good practices in developing your own.

Posted by Jeff Cornwall at 04:06 PM | Permalink

Check out ValuePundit to see how Judge Souter will personally reap what he has sewn in the Kelo Decision.

"The idea is to condemn his property to build a hotel, which would give the city Souter lives in more tax revenue. They are calling the hotel 'Liberty Hotel'."

What the heck, let's start a chain. I can think of four other prime locations for a "Liberty Hotel."

Posted by Jeff Cornwall at 09:47 AM | Permalink

In addition to the shift to niche markets and start-ups I wrote about yesterday, Entrepreneur.com says that there is a definitive shift away from just high-tech toward more low-tech and even no-tech investments by many VC firms.

"Behind the headlines, many VCs are investing in low-tech (or no-tech) companies that offer prospects of rapid growth, job creation and excellent economic return. In fact, well-managed companies in any industry can score VC dollars if they know where to look."

They offer profiles of three examples: a supplier of "air-powered guns called "markers" for the sport of paintball", a sewing company, and a cosmetics company. An interesting read and a good lesson in what investors really want: growth potential and sound leadership.

Posted by Jeff Cornwall at 07:22 AM | Permalink | TrackBacks (1)

Growing companies find the need to add key managers, but often find it hard to offer competitive salaries. Does that mean they cannot compete? Not necessarily.

One of the ways that smaller companies can compete for staff is to make them convenient and flexible places to work by offering perks that employees want. StartupJournal has a good overview of the types of conveniences that many growing companies offer, including on-site laundries, haircuts or car services. Many of these the employer simply has to make them available, as the employees pay for the actual services provided, so the cost is minimal.

There are other ways to attract good talent. I found that just listening to what the employee really wants and being flexible in how you structure the offer and the job can be very effective.

There was a manager I wanted to hire to run a new program we were starting, as he was one of the best in our industry. He worked for a large, national company. I knew I could not match his salary, but I did not give up.

I got to know him and found out what he was really looking for in his career and in a job. He wanted to have more control over his department. That was easy as we were small and our structure was quite decentralized. He wanted to have some real ownership in the business he worked in. We could do that, too, as we set up separate corporations for each new program we started and we had already planned to offer a small ownership stake for the right manager.

There was one more thing he wanted, however, and it was clear it was a deal breaker for him. His current employer had very strict rules on vacations and holidays. He was a Viet Nam veteran and had wanted to go to Washington, DC each Veterans Day to remember his fallen comrades. His current employer's rules did not make it possible to guarantee that, and he had missed the last two Veterans Day observances. So, in my offer I promised him that he would be guaranteed Veterans Day and one work day on either side of it off each and every year (they were counted as vacation days). That was all it took to convince him that we were the best place for him to work. He came to work for us taking a significant cut in base salary from what he had been making before.

I also find that being able to work in an entrepreneurial company with a team that is excited and committed to what they are doing attracts many managers to smaller companies. So when you interview prospective management candidates make sure to use your team as not just part of the interview process, but to sell the prospective employee on the benefits of working in your company.

Finding management talent in the first place can be a daunting challenge. For example, where should you look to find a Controller, a Marketing Director, or a Human Resource Manager for your company? I recommend using your network. Talk to your CPAs and your attorneys. Talk to your advisory board. Talk to other entrepreneurs that you know. Talk to people you trust in your industry. That is usually the best way for entrepreneurs to get a good pool of candidates for their growing businesses.

Posted by Jeff Cornwall at 06:24 AM | Permalink | TrackBacks (1)

Red Herring reports on a new study issued by Deloitte and Touche on foreign investments by VCs.

"The vast majority of U.S. venture capitalists plan to keep their investments inside the United States....Only 20 percent of VCs planned to increase investments outside the U.S. over the next five years."

Actually, I was quite surprised to see that there are 20% of VCs who would consider overseas investments. The VCs that I know well tend to favor limiting as much extraneous risk as possible, as there is enough business risk in each deal. Therefore they tend to favor specific industries that they know well to minimize their industry risk. Many also limit the geographical reach of their investments, which allows them to keep closer watch over their stable of companies.

International investments add multiple layers of risk that most VCs just do not want to add to the mix. The fact that one in five would invest outside the US tells me that there really is a large overhang in many firms. That is, they have more cash than they can invest in their traditional profile. So we see more VCs chasing start-ups and now a significant number investing overseas.

Posted by Jeff Cornwall at 06:03 AM | Permalink

The Kelo Decision is one of the most important cases affecting the rights of small business owners in years, but many of the major news and advocacy sites for entrepreneurs are still silent on the matter. I typed in "Kelo" into the search engines at Inc.com, NFIB, the SBA, Fortune Small Business, Entrepreneur.com, and StartupJournal.com and got.....nothing! Two of the 42 BizJournal sites ran the original story, but no follow-up.

Come on guys! This decision hits at the heart of small business -- free enterprise and the right to own property. Kelo is the first step toward a model in which government is considered the ultimate owner of all property and we are merely being allowed its use. The government no longer serves the people -- we serve the government and if we don't do this to their satisfaction they can take it back and reallocate to a "better use." Convince the government that you can offer them more taxes on a piece of land and they can take if from the current owner and sell it to you. The case will cast a chill over our entrepreneurial economy.

It is a fallacy to believe that homeowners and business owners will be paid justly under the Kelo Decision. If that was true, then the developer should be able to bid for the property on the free and open market without the strong arm of the government getting involved. Kelo lets developers and large corporations by-pass the free market and collude with local governments to cherry pick properties they want without the hassle of dealing with the free market.

I have no problem with developers and large corporations doing what they do--expand and develop. But, they should do so within the free market. Need a piece of land? Then work through the open market to buy it just like the rest of us.

Posted by Jeff Cornwall at 07:02 AM | Permalink | Comments (1) | TrackBacks (2)

More venture capitalists are moving into new territories. The majority of VC firms still stick with established ventures looking for later stage funding, but some are starting to specialize in niche financing markets.

National Dialogue on Entrepreneurship points out that there is a shift to more VC funds going into start-ups. There are a significant number of start-up focused VCs listed in the Entrepreneur magazine Top 100 Venture Capital firms.

The challenge for start-ups getting VC money is that VCs are, by nature, very impatient. They want growth rather quickly and they expect you to hit your projections and hit them on time. If not, they will fire you and hire someone they believe can make your concept meet their expectations.

NDE also links to the web site of a VC firm that is focusing on funding businesses wanting to franchise a business model. From the web site:

"Franchising Ventures Group is comprised of a group of individuals who have extensive experience in business-building, franchising, marketing, and finance. In the course of investigating an array of possible business ventures and market opportunities, they became convinced that many companies had great potential for franchising but that most would never reach that potential.

"To us, the next step was obvious - form a venture to provide the capital and the skilled management needed to create, market and manage franchise programs in a joint effort with companies that had the potential for great success."

Franchising a business concept is a risky endeavor, with litigation rates quite high even with successful franchises. Franchisees get restless and quickly believe the fees they pay are not worth what they get in return. So if you pursue VC funding for a franchise be ready to be stuck between a rock and a hard place as the VC expects quick growth and each of your growing number of franchisees expect you to treat them with specialized attention in return for the fees they pay you every month.

Posted by Jeff Cornwall at 05:18 AM | Permalink | TrackBacks (1)

It seems that the IRS is not part of the movement to help small businesses by easing some of the regulatory burden that can eat up so much of the two resources that are most scarce for entrepreneurs: time and money. The Tax Foundation tells how the paperwork burden is increasing for small businesses when it comes to taxes.

"If the objective is to reduce paperwork, this objective has failed. The small business community still spends a disproportionate share of resources (time, personnel and dollars) in order to comply with the regulatory process.

"These additional costs are either passed on to the consumer or deducted from the small business owner's ability to pay himself/herself an adequate wage or give well-earned raises to the employees."

(Thanks to Ben Cunningham for passing this along).

Posted by Jeff Cornwall at 08:51 AM | Permalink

COTC can be found at BusinessBlogCast this week.

Posted by Jeff Cornwall at 08:49 AM | Permalink

Neal Boortz, a national talk show host, suggests that the place to fight the loss of property rights that follows the Kelo Decision is at the local ballot box. He is exactly right.

The only way that property can be taken away under Kelo is by local officials. Small business owners must become vigilant in helping to elect city and county officials who promise that they will not collude with developers and large corporations to take away private property in the name of "public good." Once elected, they must hold them to this promise.

Here are a couple of websites of organizations trying to find ways to overcome the devastating ruling by the Supreme Court in the Kelo Decision recommended by Boortz:

Institute for Justice

Castle Coalition

Posted by Jeff Cornwall at 07:02 AM | Permalink | TrackBacks (2)

The Williamson County insert in the Sunday Tennessean ran a story about a group of young entrepreneurs gone bad.

They had started a business installing audiovisual systems in people's homes in the Nashville suburb of Brentwood. As an entrepreneurship professor I love to hear about young folks exploring the world of entrepreneurship. I developed a couple of small businesses when I was young and I know that is part of the reason I caught my life-long passion for entrepreneurship.

However, it seems these young boys were after more than a little experience and spare cash. They got greedy. The profits they made from their work were not enough.

"The alleged robbery happened last week while the owner of a Belle Meade home where the company had done work in the past was out of town, according to Brentwood Police.

"The teens entered the client's garage and stole a new Mercedes-Benz that was delivered while the homeowner was away. The suspects allegedly returned a second night, broke into the house and took more than $100,000 worth of property including jewelry, plasma televisions, computers and other personal items."

While I encourage young entrepreneurs to dream about the financial gains they can make as entrepreneurs, it is critical to ground their ambitions, the skills they develop, and the lessons they learn in values.

Entrepreneurs have no corporate code of ethics or even basic rules to follow in their work unless they develop them on their own. That is why it is so very important to understand how to integrate a sense of right and wrong, fair and unfair, just and unjust into your business from the very beginning. You set the rules and you enforce them.

I try to help my students understand the importance of this and how it can be accomplished in every class I teach. Sadly, it seems clear that these kids never got this lesson.

Posted by Jeff Cornwall at 06:41 AM | Permalink

The Kelo Decision, which has effectively taken away private property rights, is getting heated attention in the blog-sphere, but only passing attention in the main-stream media. Inc.com has yet to even run a story on this decision, which has more impact on the fundamental rights of small business than any other decision in recent memory.

Why the fuss? Justice O'Conner captured the magnitude of the impact of this decision in her writing for the dissent:

"Today the Court abandons this long-held, basic limitation on government power. Under the banner of economic development, all private property is now vulnerable to being taken and transferred to another private owner, so long as it might be upgraded--i.e., given to an owner who will use it in a way that the legislature deems more beneficial to the public--in the process. To reason, as the Court does, that the incidental public benefits resulting from the subsequent ordinary use of private property render economic development takings "for public use" is to wash out any distinction between private and public use of property--and thereby effectively to delete the words "for public use" from the Takings Clause of the Fifth Amendment."

Up until this decision, government could only take private property for what was considered truly "the common good," such as roads, hospitals, military bases, or utilities. Now those limitations are gone. Large corporations (such as the Best Buy case I wrote about yesterday) and developers with deep pockets can collude with local governments to hatch all kinds of plans to take away property. Some are arguing that governmental officials will surely use common sense. But we know better.

Again from Justice O'Conner:

"The Court rightfully admits, however, that the judiciary cannot get bogged down in predictive judgments about whether the public will actually be better off after a property transfer. In any event, this constraint has no realistic import. For who among us can say she already makes the most productive or attractive possible use of her property? The specter of condemnation hangs over all property. Nothing is to prevent the State from replacing any Motel 6 with a Ritz-Carlton, any home with a shopping mall, or any farm with a factory."

But, there is a glimmer of hope in all of the gloom that surrounds this decision. The door was left open for states to enact laws that specifically restrict seizing property in the name of private economic development. A handful of states already have such laws. It is my hope that groups like NFIB and the Office of Advocacy of the SBA lead the same kind of charge that they have for regulatory flexibility. We need a national movement to block the effects of the Kelo Decision state-by-state, so that all small business owners and home owners can regain their rights to private property.

Posted by Jeff Cornwall at 07:00 AM | Permalink | Comments (2) | TrackBacks (4)

I remember how angry I felt the day that the city of Richfield, MN announced that they would move to condemn people's houses and small businesses to allow Best Buy to build a new corporate headquarters. I did not know any of these people personally, but I was still angry about such an abuse of power. Private property is the foundation of our economy and our society. While there may be public projects important enough to require such drastic action, building a new corporate headquarters was not such a critical public good.

What was even more frustrating was that at that time I held an endowed chair in entrepreneurship and small business named after the late wife of Best Buy founder Richard Schulze.

Today the Supreme Court made such moves the law of the land. Not only will we now have to subsidize large corporations through tax breaks, but local governments can sweeten the deal even more by taking away our homes and our businesses to make way for these corporate giants to build their buildings wherever they like.

The Connecticut case was a working class neighborhood that local officials wanted to condemn to make way for a health club, a hotel and office buildings. This is similar to the Best Buy land grab in Richfield in which middle class homes and many small businesses were wiped away in the name of development.

The Fifth Amendment speaks of public use being the only just cause for property being taken away from our citizens. From this day forward large corporations can claim "public use" and join with governmental officials to take away our property and name the price they will pay in compensation.

Today is a sad day for the economic freedom of both the small businesses and the individual citizens of America.

Posted by Jeff Cornwall at 03:17 PM | Permalink | TrackBacks (1)

The 2005 Presidential Green Chemistry Challenge Award for small business was presented this week to Metabolix, Inc by the SBA's Chief Counsel for Advocacy, Thomas M. Sullivan. Metabolix is a small business that is turning plant materials into usable plastics for a variety of applications.

The Metabolix web site describes their core technology as applying "the cutting edge tools of biotechnology to create a new generation of highly versatile, sustainable, biobased, biodegradable, natural plastics and chemicals."

The Presidential Green Chemistry Challenge Awards provide national recognition of outstanding chemical technologies that incorporate the principles of green chemistry into chemical design, manufacture, and use, and that have been or can be utilized by industry in achieving their pollution prevention goals.

Hat's off to Metabolix for being a pioneer in what may become a major new industry over the coming years. Could they have done it without this award? Certainly, since the company has been working on this technology since 1992 and has entered into strategic alliances with companies such as BP and ADM to apply their technology to different markets.

Seems like the EPA is simply after a little positive p.r. with this one. Maybe we should just keep the overhead that it takes to run an award program like this in the private sector.

Posted by Jeff Cornwall at 07:41 AM | Permalink | TrackBacks (1)

StartupJournal has a story based on an NFIB survey showing that S-corp is still the most common form of small business organizational structure. Generally, it is still my choice of default, although there are situations where an LLC or C-corp makes more sense.

What is interesting from this study is that small businesses do not really use their legal boards as they are intended, to provide oversite, with 68% saying they have a board only because they have to under the law.

At first glance this may be alarming, but in reality most small corporations choose to include only shareholders as board members. However, given the legal liability that boards now face, this is probably a wise choice.

If the legal board of directors is only a nominal board and not really providing any oversite, it is critical for entrepreneurs to create an informal advisory board. Objective and honest outside viewpoints helps to keep our thinking clear and our assumptions well tested.

Posted by Jeff Cornwall at 07:13 AM | Permalink | TrackBacks (1)

One consulting job I will never take, no matter what the fee, is writing a business plan for someone else. John at new dog old trick offers his take on outsourcing business plan writing.

"Even more importantly, the entrepreneur must own the process of planning. The plan document is an artifact - an output of the planning process. Nobody can own the content, the substance behind the planning process, except the entrepreneur. That's where all the time and energy need to be focused. On the process of planning, not on the document itself. Yes, the document is important, but confusing the plan with the planning process is a triumph of form over substance that too many entrepreneurs fall victim to."

Well said!

Posted by Jeff Cornwall at 07:00 AM | Permalink | Comments (1) | TrackBacks (1)

Jason is moving ahead with his coffee shop in Bozeman, MT. If you haven't visited his blog site in a while make sure to stop by and see his progress.

Posted by Jeff Cornwall at 06:57 AM | Permalink

Anita at Small Business Trends tells us that business start-up activity is alive and well in the US. While the numbers are somewhat below the peak of the dot.com days, they are still strong and reflect more true entrepreneurial activity. Most dot.com corporations generated very little revenue and even fewer had any profits. Most were simply financial gimmicks and in some cases financial scams.

"...18 million people in the United States are actively engaged in startups (versus 31 million engaged in startups and established small businesses.)"

Posted by Jeff Cornwall at 06:49 AM | Permalink

Inc.com reports on an alarming trend in tax policy--decoupling state tax codes from the federal code.

"For all the talk in Washington about tax simplification, perhaps the thorniest tax issue today is the one that nobody's talking about -- the increasing gulf between the ways that states calculate your tax bill and the way that the Internal Revenue Service does.

"For most of the 92 years since the federal income tax was established, the states followed Washington's lead concerning how to tax people and businesses. That ended in 1981, when 21 states adopted their own rules on depreciation in response to a Reagan tax cut. Many of these renegades -- California being a notable exception -- later went back to a more uniform tax code. But the precedent was set. When Congress began slashing federal rates in 2001, many cash-strapped state legislatures opted to go their own way once again."

Just as the states are finally paying attention to regulatory flexibility for small business, they throw this mess at entrepreneurs. Complex tax laws and heavy tax burdens inhibit entrepreneurial economic activity, and state decoupling has an impact on both.

(Thanks to Ben Cunningham for sending this along when I was out of town).

Posted by Jeff Cornwall at 03:05 PM | Permalink

Ben Cunningham sent me a link to an interesting blog post on collaborative R&D through the Internet when I was away in Washington last week. Scientists are becoming free agent entrepreneurs with their intellectual capital.

Posted by Jeff Cornwall at 02:52 PM | Permalink

The European venture capital market has been touted recently for its success in doing deals. But now Red Herring reports that European VCs are finding that they do not have a ready public market to serve as a vehicle to exit the deals they are funding. Watch the deal flow in Europe slow to a trickle until they sort this issue out over the next year or two.

Posted by Jeff Cornwall at 02:10 PM | Permalink

The Congressional Joint Economic Committee has released a very positive economic report this week. Some highlights:

- Payroll employment rose by 78,000 in May. The unemployment rate edged down to 5.1%.

- Markets expect that the Fed will continue to raise its target for overnight interest rates, which it has raised from 1% in late June 2004 to the current 3% in a sequence of quarter-point increases.

Posted by Jeff Cornwall at 01:58 PM | Permalink

There are many groups still fighting the recent changes in the bankruptcy laws, including (no surprise) several law schools. So how are they continuing the fight for their cause? Why by confusion through statistics, of course.

While the percentage of small businesses failing may be dropping, the number of failures is increasing. Given the fact that the number of business start-ups per year has grown from 200,000 in the mid-1900s to over 3.2 million today, it is no surprise that the number of bankruptcies is up. And given the improvement in preparation that many entrepreneurs are now able to receive in the form of training, education, counseling and support materials it also is not surprising that success rates are up.

However, that is not even the point. Bankruptcy is a social issue as well as a legal issue. Business failure is traumatic and unfortunate. But, how the owners approach their obligations after a failure speaks volumes about their character. The increasingly casual attitude so many have toward financial obligations signals the deterioration of a key part of our culture and our social contracts we share with each other. A free culture is built upon the collective characters of its citizens. When we abdicate more and more of what was once the domain of our character to the law, we drift away from our freedom.

A free society is built upon trust. The lawyers do not create the increases in litigation and bankruptcies. They are just those who come behind our parade and clean up the mess we leave behind. If our society is sound and just there will be less for the lawyers to scoop up. When we defer to lawyers and the government and do not take responsibility for our own messes, we enter the spiraling decline we now see in our society and our culture. Legislation, litigation and the courts should never be the foundation of culture. That should be the stuff of our character and our shared values.

Our freedoms are vanishing. And through our actions, and more importantly our inactions, we are hastening this process.

Posted by Jeff Cornwall at 07:35 AM | Permalink | TrackBacks (1)

The Bizzmobile is a new initiative to teach kids about business and entrepreneurship being developed by "Dr. Cindy." They paid a visit to the ICSB conference this week.

The Bizzmobile is a great new idea with a lot of potential.

Posted by Jeff Cornwall at 03:21 PM | Permalink

Dr. Robert Lai, Director General of Small and Medium Enterprise Administration, MOEA, Taiwan, presented his country's plan to develop a truly entrepreneurial society. It is a fascinating and comprehensive plan that has much broader implications for many other economies.

To see Dr. Lai's PowerPoint presentation click here. If your computer doesn't have PowerPoint, you can download the free PowerPoint Viewer here.

Posted by Jeff Cornwall at 01:10 PM | Permalink

Dr. Michael Naughton has spoken around the world about the integration of faith and work. I have had the honor and pleasure to write and teach with him about this topic as it relates to entrepreneurship.

Michael Naughton

Dr. Naughton presented this morning at our conference, talking with us about the different approaches we take to work and leisure and our lives.

For some our work is simply a job. We do it only for the economic rewards. In the world of entrepreneurship I talk about this as "entrepreneurs on steroids." These are the entrepreneurs who pursue a business venture solely as a financial transaction to be maximized. For many of them their leisure takes to form of amusements meant to serve as a means of escape from the pressures of pursuing the maximum wealth from the deals they pursue. This becomes a state of having over being.

For others, our work is a career. We seek the psychological rewards that work can give us. Entrepreneurs view work as a means to an end -- to be their own boss. Leisure is viewed as instrumental for the career. It is a time to rest "to sharpen the saw." We measure success in terms of achievements. This becomes a state of doing over being.

Finally, for some our work is a calling -- a vocation. It is a calling to be human, a calling to a state of life, and a calling to a particular kind of work. Leisure takes the form of contemplation. Life becomes integrated and whole. It is not a state of balance between work and leisure; work and our faith. Rather, they become one as we become what Mike calls a contemplative practitioner.

These three states of work are not mutually exclusive. But, viewing work as a job or a career are just not enough to contain us as a whole person.

(For an outline of Dr. Naughton's talk click here).

(For a PowerPoint presentation on Dr. Naughton's talk click here. If your computer doesn't have PowerPoint, you can download the free PowerPoint Viewer here.

For more information on Michael Naughton's writing, click here.

Posted by Jeff Cornwall at 01:09 PM | Permalink

Ian Levitt left a career in international corporate business to start his automotive parts distribution business named Qualcast in Nashville, TN in 1997. He is still a small business, but has had great success importing and exporting around the world.

Ian highlighted three of the more difficult challenges he has faced as a small business owner dealing with the international market:

- Credit risk. As he began to do business in China, he faced the need to finance large purchases by Chinese customers. He would have to carry their debt until the parts arrived and were weighed and checked. This could mean several weeks to months. Unfortunately, banks view lines of credit on such accounts receivable as too risky to finance even if only for a few weeks. He was able to speed the process along, but had to tie up all of his cash on a single order.

- Currency issues. More of his European customers now do business in Euros rather than dollars. This opened him up to significant currency exchange risks. Even as a small business person, he was able to buy a large stake in Euros for twelve months to stabilize his exchange rate.

- Credit card fraud. Sadly, credit card fraud is a major issue for international trade, and many clients insist on using credit cards for purchases. Ian said that he can no longer accept credit card orders from his international clients due to the high rate of fraud.

In the middle of our discussions about teaching entrepreneurship and shaping public policy to meet their needs, it was refreshing to hear about the real issues faced by a small business in the international arena from someone in the trenches.

Ian Levitt is active in the Nashville business community helping to support other entrepreneurs interested in the international arena.

Posted by Jeff Cornwall at 01:49 PM | Permalink

John Hatch, Founder of FINCA, says that we are now in the middle of the largest economic expansion in history, and that within the next few years small businesses will become "micro-internationals."

Micro lending programs, such as those supported by FINCA, are creating a base new small businesses that will transform the world through a process that Hatch called "globalization from the bottom up." Micro lending benefits communities by improving education, food and housing.

Posted by Jeff Cornwall at 10:21 AM | Permalink | TrackBacks (1)

ICSB 2005 had its opening reception at the World Bank last evening.

Michael Kline, Vice President for Small and Medium Enterprise Development of the World Bank, addressed the reception. He stated that they are working aggressively toward their goal of cutting poverty in half world wide by 2015.

Michael Kline, World Bank

Posted by Jeff Cornwall at 09:54 AM | Permalink

The NFIB and SBA Office of Advocacy sponsored a pre-conference event for ICSB entitled "Global Perspectives on Entrepreneurship Policy."

Chad Moutray, Office of Advocacy SBA

The first set of presenters examined the costs and problems of business entry. One of the presenters was Simeon Djankov of the World Bank, who discussed his findings on "Regulation as an Impediment to Entry in Developing Countries." One of the main barriers to business entry and growth around the world is government regulation of small and medium enterprises. This study and the other presenters provided strong evidence of the impact of regulation on entrepreneurial economic activity. This position was reinforced by a comprehensive report from the Danish Commerce and Companies Agency entitled "Efforts to Reduce Administrative Burdens and Improve Business Regulation."

The World Bank has issued a full report on the impact of regulations on economic growth: Doing Business in 2005.

A variety of other papers on the importance of education, banking deregulation and freer labor markets to support entrepreneurial development were also presented.

Throughout this pre-conference the themes of get government out of the way and educate entrepreneurs was reinforced through a variety of studies and reports.

Denny Dennis, NFIB

Posted by Jeff Cornwall at 03:14 PM | Permalink

Our VIP reception Tuesday night was at the Australian Embassy. The Australian officials spoke about the entrepreneurial spirit of their country and the tradition of small business within their economy. The US and Australians have just signed a free trade agreement (AUSTFA) that is quite favorable to small business.

We heard the story of a creative small business idea that has come to the US from Australia, flavored dog water, which has been able to move quickly into the US market in large part as a result of AUSFTA.

"In just twelve months since its flavoured dog water was developed, Dog Plus has scored a lucrative deal with Nutri-Vet who will distribute Dog Plus products to pet store chain PETCO's 670 stores across the US and Canada," Mr. Billson said.

"The deal is currently worth $50,000 to the small husband and wife business team and is expected to reach an annual $2 million over the next twelve months, providing not only a tremendous boost for the company but also the local economy by generating additional employment."

Posted by Jeff Cornwall at 05:40 AM | Permalink

I will be posting this week from Washington, DC, where I am chairing the 50th Annual Meeting of the International Council for Small Business (ICSB). There will be over 600 attendees exchanging ideas about both educating entrepreneurs and public policy isssues related to entrepreneurship. I will be sharing some of the highlights of what is presented and discussed at this exciting conference throughout this week.

The International Council for Small Business founded in 1955 is the oldest and largest global membership organization dedicated to examining and discussing issues affecting the teaching, research and delivery of entrepreneurship and small and medium enterprise world-wide. Collectively, the over 2,000 members of the ICSB through their eleven national affiliates work and assist tens of thousands of individual currently in business or desiring to start a business relatively soon.

The leading teachers, researchers, policy-makers and practitioners interested in entrepreneurship and small and medium enterprise are attending this conference. It will have attendees from around the world including Europe, Brazil, Japan, Republic of China, Singapore, Korea, Southern Africa, Australia/New Zealand, Canada, Puerto Rico/Caribbean, and the United States.

Posted by Jeff Cornwall at 06:30 AM | Permalink | TrackBacks (1)

Great advice for any golfer is to swing easy. The harder you try to swing the worse your shots become. The easier you swing, the longer the ball seems to go. It seems like a contradiction, but it is true. The same holds for finding a business idea. Swing easy.

Don't go for "the next Microsoft" or for a quick "home-run" idea. Find a need, find a niche, and keep it simple.

I have offered many examples and ideas that fit this advice and USA Today has yet another example this week -- Brian Scudamore who founded 1-800-GOT-JUNK? is a great story of a drop-out who was not afraid fill a need in a less than glamorous business.

"As an 18-year-old, Scudamore was having a difficult time finding a summer job. While at a McDonald's drive-through in 1989, he noticed a beat-up truck of a local hauling company.

"He bought a truck for $700, placed a newspaper ad that said, 'The Rubbish Boys will stash your trash in a flash,' and charged $80 per truckload."

He grew the business with what he had to work with. His advice to entrepreneurs is to "start your business with your own money."

Another tip for the average golfer is to keep your head down and your eye on the ball. In a word -- focus.

Scudamore created a simple business with a clear plan. He never strayed from his original idea. It worked well so he grew it and continued to make the basic idea a little better. His warning to entrepreneurs is, "Don't ever try to build a business without a crystal-clear vision."

A simple idea with a clear vision that he has turned into a franchised business with over 1,000 employees and $72 million in revenues.

Swing easy. Focus.

Posted by Jeff Cornwall at 06:04 AM | Permalink | TrackBacks (1)

National Dialogue on Entrepreneurship offers their suggestions for your summer reading. Here are a couple of their favorites:

A Whole New Mind: Moving from the Information Age to the Conceptual Age, by Daniel H. Pink. Riverhead Books, 2005.

This book takes a new look at the impacts of outsourcing, arguing that entrepreneurial growth will come from artists, designers and innovators.

The Past and Future of America's Economy: Long Waves of Innovation that Power Cycles of Growth, by Robert D. Atkinson. Cheltenham, UK: Edward Elgar, 2004.

"Atkinson argues that we are in the midst of a major technological shift that has only just begun. While economic change is all around us, our political systems and our policy ideas have not shifted in response. Atkinson recommends that policymakers embrace 'growth economics', a whole range of policies that nurture entrepreneurship and innovation."

I haven't read this one yet, but it is on my summer list. It is an $85 book, so you may want to wait for my review in a few weeks. Let's hope his list of policy recommendations begins with less government involvement....

Check out NDE's web site for all of their recommendations.

Posted by Jeff Cornwall at 05:54 AM | Permalink | TrackBacks (1)