The Entrepreneurial Mind

I have been writing my advice to entrepreneurs on what they need to do to weather the current and near future economic storms. But just what are they all actually doing? A new poll from NFIB offers some insight.

Here are a few of the findings:

- 20 percent of small employers have reduced, postponed or cancelled a planned investment or reinvestment in the last six months; the slowing economy is the primary reason in more than half of these cases. They are becoming much more prudent in their resource commitments for expansion.

- Increased marketing and sales activity is a common strategy to combat an economic downturn. However, this is one of the least frequent approaches a small business owner uses. This is a big concern to me. Now is not the time to reduce marketing efforts!

- 44 percent of small business owners are spending more time at their businesses today than six months ago.

- Over the past six months, small business owners are highly likely to have become more attentive to their cash flow and inventory status. This is key, and should also include cutting overhead and debt.

Posted by Jeff Cornwall at 10:39 AM | Permalink | Comments (2)

Most often entrepreneurs measure their work in terms of time. I have been as guilty as anyone.

When I was lead my seminar for entrepreneurs owning high growth companies I always start with a discussion of why they are all in my class. The answers seem to involve the number of work hours that each entrepreneur is putting in his or her business. "Sixty hours." "Seventy hours." "Eighty hours." They each drift into this familiar litany.

One time one of the entrepreneurs in class looked perplexed through this discussion. When it came to his turn, he said, "I must be doing something wrong. I never put in more than 40 hours. My business has been growing every year and we have good profitability. I always seem to have time every evening for my family." You could have heard a pin drop. It was like he had broken the worst taboo of entrepreneurs.

Over the next several weeks we learned his secret. He was an engineer by training, and looked at his work as an entrepreneur with the same process/outcome precision that learned in his professional training. He measured his success in terms of outcomes and results, not in terms of hours worked or sacrifices made.

Many in the class began to admit that they often put in time that had no purpose and no direction. They said it made them feel like they were doing something to deal with all of the uncertainty that comes with growing a business.

Ben Cunningham sent me a link to an article in Behance Magazine that reflects on the issue of results and effort:

We often assume that the number of hours spent at work are an indication of one's effort, interest, and accomplishment. However, in reality, the greatest ideas and the execution of these ideas happen in spurts. The best ideas often do not require a lengthy conception, and the most productive days are seldom the longest.

Good advice!

Posted by Jeff Cornwall at 06:46 AM | Permalink | Comments (2)

Imagine moving to a foreign country where the people speak a different language from your own. While you may be able to get by for a while without learning the language of this country, you will be severely hampered. Asking for and receiving simple information will be a tedious and frustrating task. For example, assume you want to go to a movie. How do you get to the movie theater? How do you order a medium box of popcorn? What are the actors in the movie saying? More complex tasks are even a bigger challenge. Imagine trying to rent an apartment. What does the landlord expect from you as a tenant? The contract she is requiring you to sign is completely unintelligible to you. Even an interpreter will only help so much. Your interpreter can translate, but the process is slow. And it would be impossible to rely on your interpreter all of the time.

Accounting is called the “language of business.” Much of what is communicated about a business is done in this financial language. And yet to many entrepreneurs this is a language as foreign to them as the language was to the traveler in this story.

This summer I am learning this "cultural experience" from the opposite perspective. I am teaching our required graduate Entrepreneurship course. But instead of teaching it to our MBA students, I am teaching to a section that has only graduate students in our Master of Accountancy program. As I teach them about entrepreneurship, I now appreciate that many of them experience my world of entrepreneurship as a strange and confusing place.

Their world is order and precision. Mine is change and chaos. Their world is historic measurement of what has happened. Mine is the hope and dreams of what might be. Neither is better or worse, and neither is right or wrong. And in today's entrepreneurial economy we need each other more than ever.

We teachers always like to say that we learn as much from our classes as do our students. This summer I know I am learning much more than my students. Given the importance of entrepreneurs really knowing and understanding their numbers, I know that what I learn from my accounting students will help me to better prepare my entrepreneurship students for the for their frequent and critical trips into the Land of Accounting.

Posted by Jeff Cornwall at 06:40 AM | Permalink | Comments (4)

My column in the Tennessean this week looks at the challenges of having partners in a venture:

Partnerships in business can be one of the most difficult issues an entrepreneur faces.

Whom the entrepreneur chooses as a partner should be given as much consideration as which products the business makes or what markets the business enters.

Continue reading "Partners" »

Posted by Jeff Cornwall at 09:38 AM | Permalink

Parents calling professors about their college students' homework. Parents showing up in place of their college children for orientation. Parents going with their college graduated students on interviews -- and then calling the HR department to complain when their kids don't get the jobs.

These are but a few of the true stories about today's helicopter parents.

I am in wet Wisconsin this week for my in-laws surprise 80th birthday bash put on by my wife and her two brothers. While here I read a great editorial on helicopter parents in USA Today written by a "reformed helicopter parent."

And then when the kids made it to a decent college, many of us remained fixed in hover position. I still remember a few rounds of a paper on Othello from one kid, and another on the divine command theory from another.

The result: Little Susie has made it through four years at her respected university. Phew.

She's ready to launch, right? Not so fast. Many of these helicopter young'uns have absolutely no blooming idea what they should do next. They've been so busy with their internships and tests and labs that they've missed the essential purpose of all that frantic activity -- figuring out their passion, following a stream as it flows into a larger river and then jumping on a boat and seeing where it takes them.

Well said! We now have to introduce failure into our curriculum so our aspiring entrepreneurs have a clue as to what might await them -- they have no experience with failure as children of helicopter parents. Worrisome, no?

Posted by Jeff Cornwall at 08:14 AM | Permalink | Comments (1)

After giving a speech to a business group yesterday, I was reminded by one of the participants of an unexpected benefit of finding a safe little market niche. Many established businesses that you might normally think of as your competitors can become your sales force.

Find a niche that is a part of the market that established businesses don't really want to serve. The customers may be too small for their operation, or serving them may be just too inefficient for their size. I have seen this recently in new law practices, landscapers, healthcare, web design, food distributors, etc., etc. Look for needs to serve not just in customers, but also in the businesses already establsihed in the market.

What seems like crumbs to them can become your feast. Actively market to them. You will make them look good, as they will have an easy referral outlet for business that does not fit their model. That keeps them looking like a good guy to their referral sources.

Posted by Jeff Cornwall at 06:42 AM | Permalink | Comments (2)

From my column this week in the Tennessean:

One of the expenses that entrepreneurs are tempted to cut back on is marketing. However, a weak economy is not the time to cut back on communicating with your existing and potential customers.

Now that the economy has slowed, consumers are thinking twice about spending money. Employment is less secure and inflation is eating up more of the family budget on necessities such as food and gasoline. This creates a much more competitive environment as consumers are more careful about spending and much less willing to take on additional debt.

Posted by Jeff Cornwall at 05:22 AM | Permalink

Benchmarking is something that is a challenge for many small business owners. It is hard to get general information about specific issues faced by entrepreneurs as their businesses grow.

Denny Dennis with the NFIB Research Foundation has introduced a great tool called 411 Small Business Facts to allow for specific searches of all of the small business polls that they have conducted over the years. It is a great tool that allows us to tap into a wealth of information. I have been using this tool as I do research for my new textbook on Bootstrapping.

Next time you have a question about what other entrepreneurs are doing about health insurance, marketing, banking, etc., etc., you now have a tool to make finding out much easier.

Posted by Jeff Cornwall at 07:23 AM | Permalink | Comments (3)

Having endured more than my share of hurricanes and ice storms when I was in business in North Carolina, I like to pass along advice on how to protect your business against such events. The SBA issued this press release today:

As several states recover from the destruction and loss of life caused by recent tornadoes, floods and wildfires, and other areas prepare for the beginning of the 2008 Atlantic Hurricane Season on June 1, the U.S. Small Business Administration is urging the public to develop an emergency plan before the disaster hits.

"Every threat, from wind storms, floods and wildfires, to power outages and computer system failures, reminds us to be proactive when it comes to planning strategies to survive a disaster and recover quickly," said SBA Deputy Administrator Jovita Carranza. "The catastrophic events of the last few years demonstrate the need for preparedness at the individual level, to diminish the risk to life and property."

The SBA stands ready to help communities recover in the aftermath of a disaster. Following the Gulf Coast Hurricanes of 2005, the SBA approved more than $5 billion in disaster loans to 102,700 homeowners and renters in the region. Businesses in the area were approved for 16,780 business disaster loans worth $1.6 billion.

During the past two years the SBA has been preparing to respond to major disasters by reengineering the Disaster Assistance program with a significant focus on customer service, direct accountability, and new technologies that have quadrupled processing capacity. In June 2007 the agency completed its Disaster Recovery Plan, which includes procedures to better handle future catastrophic disasters, and has begun testing this plan through simulations conducted with outside experts.

Disasters strike in all seasons. Since Oct. 1, the SBA has responded to 137 declared disasters, including those for drought. Of those, 118 are open at present.

Disaster preparedness for homes and businesses should include:

- A solid emergency response plan. Find evacuation routes from the home or business and establish meeting places. Make sure everyone understands the plan beforehand. Keep emergency phone numbers handy. Business owners should designate a contact person to communicate with other employees, customers and vendors. Ask an out-of-state friend or family member to be your “post-disaster” point of contact – a person to call to provide information on your safety and whereabouts.

- Adequate insurance. Disaster preparedness begins with having adequate insurance coverage—at least enough to rebuild your home or business. Homeowners and business owners should review their policies to see what is or isn’t covered. Businesses should consider “business interruption insurance,” which helps cover operating costs during the post-disaster shutdown period. Flood insurance is essential. To find out more about the National Flood Insurance Program, visit the Web site at www.floodsmart.gov.

- Making copies of important records. It’s a good idea to back up vital records and information saved on computer hard drives, and store that information at a distant offsite location. Computer data should be backed up routinely. Copies of important documents and CDs should be stored in fire-proof safe deposit boxes offsite.

- Protection of windows, doors and roofing. Installing impact-resistant window and door systems, or simple plywood shutters installed before the storm hits can enhance their ability to resist impacts from wind-borne debris. Hire a professional to evaluate your roof to make sure it can weather a major storm.

- A "Disaster Survival Kit." The kit should include a flashlight, a portable radio, extra batteries, a first-aid kit, non-perishable packaged and canned food, bottled water, a basic tool kit, plastic bags, cash, and a disposable camera to take pictures of the property damage after the storm.

More information from the SBA can be found at their website.

Posted by Jeff Cornwall at 09:35 AM | Permalink

In cleaning out the hundreds of e-mails that amassed during my recent vacation that took me off the grid I came across an interesting study. (By the way, I highly recommend a complete break from email, voice mail, etc. at least once a year -- you will be amazed at how calming it can be).

In the 2008 American Express OPEN Spring Monitor, they found a sharp contrast between business owners over sixty and the small business population at large as they manage their way through the current economic uncertainty.

The over sixty age group holds the most optimistic outlook among entrepreneurs surveyed, perhaps due to having endured downturns in the past. For these business owners the biggest challenge to growth is not an uncertain economy, cited by nearly one third of small business owners overall (30%), but the rising costs of doing business cited by 27% of over sixty year olds. Those of us over 50 (Let's be clear -- I am not yet in the over 60 crowd) have been through many economic ups and downs. We also remember the frustration and challenges that come with prolonged inflation. Younger entrepreneurs have no frame of reference for what inflation can do to small businesses.

Entrepreneurs over sixty are taking actions that show they learned from their past experiences with inflation. Although they are generally more optimistic, they are nonetheless being more cautious in their business decisions:

- 27% of business owners over sixty report plans to hire over the next six
months vs. 38% of small business owners overall; 58% of business owners aged 18-34 report plans to hire

- 42% of business owners over sixty report plans to make capital investments over the next six months vs. 53% of entrepreneurs overall

- 43% of entrepreneurs over sixty are willing to take on a financial risk to grow their business vs. 51% of small business owners overall

Posted by Jeff Cornwall at 07:49 AM | Permalink | Comments (1)

Matt Bandyk, a reporter at US News, has started a new blog on entrepreneurship called Risky Business. Matt's blog takes a similar balance of practical ideas with public policy issues that impact the entrepreneurial economy as I have tried to do at this blog. It is definitely worth a read.

Posted by Jeff Cornwall at 08:05 AM | Permalink

My column in Sunday's Tennessean outlined some basic steps to help entrepreneurs weather the current economic storm.

Posted by Jeff Cornwall at 07:13 AM | Permalink

I've been told that I have a face for radio and a voice for newspaper......

That being said, you can hear an interview I did for the podcast Patrons of Change here.

For those of you who are technology challenged just click the "play" button directly under the title. I say this only because it took this Luddite blogger about 10 minutes to figure out how to make it play....

Posted by Jeff Cornwall at 02:43 PM | Permalink

Last evening we went to hear a group of songwriters at the Bluebird Cafe here in Nashville as part of the Folk Alliance (their website is folk.org, which seems to be down this morning as I write this post). One of them performing last night, James Lee Stanley, is one we first heard over thirty years ago -- I blogged about him a couple of months ago.

What a wonderful evening of music and an affirmation that the music industry is alive and well. The three featured songwriters had all been writing and performing since the 1970s. Are they rich and famous? No. Have they been making a living pursuing what gives them passion? Absolutely.

There is a good lesson here for entrepreneurs in any industry.

Too much attention is given to celebrity and fame. We see it in entertainment and more and more we see it in the world of entrepreneurship. The vast majority of our economic growth is coming from entrepreneurs working in small businesses across the country. It is hard work. It is not very glamorous. But, it has created economic independence for these entrepreneurs and the people working with them.

The same is true in music. There are thousands of songwriters and performers toiling away out there. Many are fortunate and have become successful enough to make a living at it.

The vast majority of entrepreneurs will not reach the heights of Gates, Dell, Jobs, and others whose little ventures grew into empires. In fact, most won't even make their local list of "leading entrepreneurs" in their community.

But, most entrepreneurs don't really care about fame and recognition. That is not what drives them. That is not how they measure their success.

What a blessing it is to be able to share in real success -- the songwriters who continue to hone their craft -- the entrepreneurs who pursue their passion and find fulfillment in the businesses they create.

Posted by Jeff Cornwall at 07:04 AM | Permalink

Last evening we went to hear a group of songwriters at the Bluebird Cafe here in Nashville as part of the Folk Alliance (their website is folk.org, which seems to be down this morning as I write this post). One of them performing last night, James Lee Stanley, is one we first heard over thirty years ago -- I blogged about him a couple of months ago.

What a wonderful evening of music and an affirmation that the music industry is alive and well. The three featured songwriters had all been writing and performing since the 1970s. Are they rich and famous? No. Have they been making a living pursuing what gives them passion? Absolutely.

There is a good lesson here for entrepreneurs in any industry.

Too much attention is given to celebrity and fame. We see it in entertainment and more and more we see it in the world of entrepreneurship. The vast majority of our economic growth is coming from entrepreneurs working in small businesses across the country. It is hard work. It is not very glamorous. But, it has created economic independence for these entrepreneurs and the people working with them.

The same is true in music. There are thousands of songwriters and performers toiling away out there. Many are fortunate and have become successful enough to make a living at it.

The vast majority of entrepreneurs will not reach the heights of Gates, Dell, Jobs, and others whose little ventures grew into empires. In fact, most won't even make their local list of "leading entrepreneurs" in their community.

But, most entrepreneurs don't really care about fame and recognition. That is not what drives them. That is not how they measure their success.

What a blessing it is to be able to share in real success -- the songwriters who continue to hone their craft -- the entrepreneurs who pursue their passion and find fulfillment in the businesses they create.

Posted by Jeff Cornwall at 07:04 AM | Permalink

My column in this week's Tennessean looks at the ins and outs of niche markets.

Generally, a niche strategy is a good way to enter the market for a new business. It usually takes fewer resources for the startup because of lower marketing costs and the ability to start on a smaller scale.

Success rates tend to be higher for niche businesses since they have less direct competition.

Without much competition, niche businesses often can charge higher prices, which allows for quicker positive cash flow during startup and better margins once the company is profitable.

But, entrepreneurs also should be cautious when picking a niche. Here are some things to consider.

My column offers five key tips for finding success in a niche market.

Posted by Jeff Cornwall at 06:05 AM | Permalink | Comments (1)

Could you use $100,000 for your small business? Check out Forbes Boost Your Business contest. You can find the official rules for this competition here.

Posted by Jeff Cornwall at 05:49 AM | Permalink

Monroe Carell, former CEO of Central Parking, talked to our students this morning about his journey of taking the eight parking lots his father owned and turning it into the largest parking company in the world.

It was interesting to hear him talk to our students about the importance of patience, especially given the impatience of GenY that I talked about in my recent interview with Inc magazine. He believes that patience is probably the most important trait of successful entrepreneurs. I agree. This will probably be the biggest lesson that the entrepreneurial Generation Y will need to learn if they hope to be success over the long-run.

Posted by Jeff Cornwall at 12:51 PM | Permalink

The music industry is facing an interesting puzzle these days How do you run a business where customers do not want to pay and they do not want advertising? From today's Tennessean:

Efforts to sell music by subscription have mainly failed.

Yahoo recently gave up on its Music Unlimited subscription service and sent its customers to Rhapsody, another struggling music provider.

But traditional radio's offer of free music surrounded by audio advertising also is being rejected by a generation that resents undesirable interruptions.

"They want to be the program director, and they insist that the program be free," says Jerry Del Colliano, a professor of music industry at the University of Southern California and a former executive at Top 40 WIBG in Philadelphia.

The big boys in the industry do what big boys do in any industry undergoing fundamental change -- they try to get the government to protect their interests. From TechCrunch (via Andy Tabar):

Warner Music, fully aware that the days of charging for recorded music are coming to an end, is now pushing for a music tax.

This isn’t the first time someone has called for a music tax. Peter Jenner argued for it in Europe in 2006. Trent Reznor said the same thing last year (as did the Songwriters Association of Canada)....

But Warner Music is doing more than just talking about a music tax. They’ve hired industry veteran Jim Griffin to create a new entity that would create a pool of money from user fees to be distributed to artists and copyright holders.

We may be witnessing the end of the structure of the music industry as we know it. The mass produced, mass marketed music is becoming a relic of the past. And what does the future hold?

The predictions from the Institutue for the Future about the future of small business might offer a glimpse into the future of music:

Today, there are 26 million small businesses in the U.S. that generate roughly $5 trillion in annual sales. If they were a country that would make them the 2nd largest economy in the world! Those numbers will continue to grow over the next decade as small businesses re-emerge as artisans with even more economic force.

Artisans, historically defined as skilled craftsmen who fashioned goods by hand, will re-emerge as an influential force in the coming decade. These next-gen artisans will craft their goods and shape the economy -- through upswings and downturns -- with an effect reaching far beyond their neighborhoods, or even their nations. They'll work differently than their medieval counterparts, combining brain with brawn as advances in technology and the reaches of globalization give them greater opportunities to succeed.

What would a musical artisan look like? Probably a lot like James Lee Stanley.

My wife and I first heard James Lee Stanley at a "coffee house" in the 1970s when we were attending the University of Wisconsin -- Stevens Point (WAY up north!!). James Lee was one of many songwriters who made the circuit performing on college campuses at coffee house events. (As a note of Entrepreneurial Mind trivia, I played in a couple of coffee house sessions myself). The songwriters/musicians got a small payment from the school and were allowed to sell their record albums (for the younger generation -- that is what we used to call "vinyl").

Fast forward to 2008. One of my winter projects was to convert many of our old vinyl albums into digital. When I got to our collection of records from our coffee house days, I decided to "Google" the songwriters to see what happened to them. Many had faded into obscurity before the Internet was able to immortalize them in digital splendor.

James Lee Stanley on the other hand was alive and well and still making the circuit. He had survived as an artisan in the music industry. He's got a website. And he has a blog offering "tips, hints, clues and info for the artist in us all." His blog chronicles the life of a musical artisan offering his thoughts on touring, performing, writing, studio work, contracts, stringing guitars, and so forth. He still writes music, still records and still tours.

Why does he continue to perform for well over thirty years? Not for possible fame and not for financial wealth.

What I know is that following your bliss is more rewarding than making a bunch of money at something you absolutely hate doing. I don’t feel that I’ve wasted my life or that I could have been more successful at something else. I love what I do and I love trying to get better at it and I love it that at my stage of life I still have so much passion for what I do and I love how vibrant and alive it keeps me.

So what is the future of the music industry? I hope it is not an industry propped up by government intervention as Warner Music would have it.

Instead, I hope that it is an industry sustained by talented artists -- and successful artisans -- who help us understand love, heart ache, happiness, sadness, joy, despair. I hope it is full of people like James Lee Stanley, whose view of success in his career is one we all can learn something from, be we musicians or be we entrepreneurs.

Posted by Jeff Cornwall at 10:12 AM | Permalink | Comments (1)

Some new entrepreneurs give the name of their new business almost no thought. Others agonize over the best name to capture the true essence of their business. I always tended to fall into the latter category. With one new start up we brainstormed and debated for weeks over the best name for our new program. But then, it often takes my family days to even come up with the a name for a new dog.

The Wall Street Journal offers several factors to think about when picking a name.

There's so much riding on a company's name. It has to stand out, and be easy to remember and look up. And the pitfalls are many.... [A] bad name can fail to engage customers, or become outdated as the company grows and adds products and services.

Some of their tips:

- Be unique

- Don't be obscure

- Don't be mundane

- Make sure it hasn't been used and is open as a domain name

- And test it out on objective outsiders

Posted by Jeff Cornwall at 01:28 PM | Permalink | Comments (2)

Michael Lee Stallard has just released a new e-book on the power of emotional ties in business -- he calls it the connection culture. Stallard's e-book is now available for downloading for free at changethis.com. Here is a brief description from the author:

I want to share something with you I've learned over the last decade of my life that I believe can be as helpful to you as it has been to me. In a nutshell, one of the most powerful and least understood aspects of business is how an emotional connection between management, employees and customers provides a competitive advantage. Unless the people who are part of a business feel a sense of connection -- an emotional bond that promotes trust, cooperation and esprit de corps -- they will never reach their potential as individuals, nor will the organization.

Posted by Jeff Cornwall at 06:02 AM | Permalink

Over twenty years ago, I participated in research that looked into factors that made some organizations more entrepreneurial than others. Of particular interest to me was why large organizations differed in their innovativeness and entrepreneurial activities.

We found that in general entrepreneurial organizations differed from what we termed "traditional" organizations in several ways:

- View of the external environment -- Entrepreneurial organizations seek to Identify opportunities. They tend to actively seek out change that can create new initiatives. Traditional organizations look at the external environment for threats to their core business, rather than for new opportunities.

- Strategy -- Entrepreneurial organizations have a more proactive strategic posture, while traditional organizations take a more defensive position focusing on protecting their core business.

- Control Systems -- Traditional organizations control primarily through expense-based budgets, while entrepreneurial organizations also look at longer-term business planning and forecasting to guide the business.

- Structure and Communication -- Traditional organizations tend to be hierarchical, centralized and formal, while entrepreneurial organizations are more decentralized and have informal communication flow.

In short, these organizations have fundamentally different cultures.

So the question then becomes can a business that has become "traditional" over time as it grows and matures become entrepreneurial again?

My experience in working with many large businesses on this is that very few are willing to take the concerted and long-term efforts necessary to truly change their culture. Most often, they simply asked me to "make their managers more entrepreneurial." But, without a supportive culture for innovation and entrepreneurship, these efforts are doomed to fail from the beginning. A few organizations have been able to change to a more entrepreneurial culture, but the larger the business the harder it becomes to make such a fundamental transformation.

My best advice is this -- if you have an entrepreneurial culture make every effort you can to preserve it. You do this by:

- hiring people with entrepreneurial orientations and who already practice "entrepreneurial thinking."

- reward innovative and creative actions independent of immediate success or outcomes.

- delegate, delegate, delegate.

- lead by example, making sure your words and actions speak loudly about your commitment to being an entrepreneurial business.

Posted by Jeff Cornwall at 06:43 AM | Permalink

I started, but then deleted, several posts about Brett Favre's retirement. Brian Leaf sent along a post by Jacqui Banaszynski about Brett from a journalist's blog called Poynter Online. Although she takes a journalist/editor slant, the lessons she takes from Favre's career aptly apply to anyone in a position of leadership, including entrepreneurs.

Here is a sample of just one of the leadership lessons from Banaszynski's post:

Favre loved the job. He brought joy to work every day and let it show. He dared to grin on the field and whoop when whooping was called for and get knocked down and pop back up laughing. There was almost always a smile behind the bars of his helmet, even when he was losing.

This is what I call the "shock absorber roll" the entrepreneurial leader needs to take on. No matter how bad things get, the entrepreneur has to be the "keeper of the faith" for the venture. In an entrepreneurial venture, most of the employees know how bad things are. The business is too small to keep many secrets. They look to the entrepreneur to give them confidence that they can get through the tough times, no matter how dire things might seem.

At some point I hope to capture my own thoughts on what we can learn about leadership from Brett's career. Thanks to Banaszynski for sharing hers.

Go Pack!!!

Posted by Jeff Cornwall at 08:28 AM | Permalink

Rieva Lesonsky, Senior Vice President and Editorial Director of Entrepreneur magazine resigned this week. She told me that she is starting a new venture called SMB Connects. Its website askrieva.com should be live at the end of the month.

Posted by Jeff Cornwall at 04:34 PM | Permalink

The flip side of the pricing post I wrote yesterday involves what I call apologizing to the market.

When we enter the market with prices well below the rest of the competitive landscape, we make a statement to the customer. "We are not as good as the rest, but hope our low price gets you to buy our product anyway." "Our quality is not up to the competitors' standards so we cannot ask the same price."

Set a price that puts you where you want to be in the customers' minds. "We are as good as the rest." Or, "We are better than the rest."

Once you position your product compared to the rest with your price, clearly offer them a temporary discount -- through a sale, coupons, etc. Make it clear that the discount is to introduce the product so they give you a try.

Posted by Jeff Cornwall at 07:04 AM | Permalink

Part of how we communicate about our products it through our pricing. A new study about placebos reinforces the psychological power of pricing. From Science Daily:

[Researchers] used a standard protocol for administering light electric shock to participants' wrists to measure their subjective rating of pain. The 82 study subjects were tested before getting the placebo and after. Half the participants were given a brochure describing the pill as a newly-approved pain-killer which cost $2.50 per dose and half were given a brochure describing it as marked down to 10 cents, without saying why.

In the full-price group, 85 percent of subjects experienced a reduction in pain after taking the placebo. In the low-price group, 61 percent said the pain was less.

Why the significant difference in the power of the placebo with the higher price?

Customers use pricing as a cue for the quality of the product or service.

There is a great example that comes from the story of a psychiatrist who tried to use pricing to phase out his practice. He was getting ready to move toward retirement. So he decided to double his rate for any new clients, assuming that nobody would pay that much for his services. But, the opposite occurred. Referrals and new patients came in at the highest rate he had ever experienced in his long career in practice. So he raised his rates again hoping this would do the trick and keep away any more new patients. However, you guessed it -- referrals increased even more.

It seems that when it is hard to objectively evaluate quality, such as the case with service businesses, consumers look to other ways to judge quality. And pricing can be one of the most powerful tools to communicate quality.

Posted by Jeff Cornwall at 06:01 AM | Permalink | Comments (1)

A sticky issue for many small employers revolves around who is an employee versus who is an independent contractor.

Many smaller companies use independent contractors to keep employee expenses lower. Independent contractors are engaged for specific projects, so there are only costs to the company hiring them when there is specific work to be performed. In addition, independent contractors do not have to be covered under workers’ compensation insurance or other employee benefits, and the company does not have to pay the employer portion of Social Security and Medicare taxes.

However, the Internal Revenue Service and the courts have established strict guidelines on who can be considered a true independent contractor in recent years. This has come in large part because of employers who used the status of independent contractor on people who were really employees simply to reduce their costs by saving on benefit costs and the expense associated with the employer Social Security match. The status of independent contractor versus employee is not guided by a specific law, but by a series of court cases. There is no simple checklist, but rather a growing list of criteria that help determine independent contractor status. Therefore, a certified public accountant or an attorney should be consulted to help assure that a business is in compliance with the current interpretation of this area of tax law.

According to the Internal Revenue Service, "A general rule is that you, the payer, have the right to control or direct only the result of the work done by an independent contractor, and not the means and methods of accomplishing the result."

Additional guidelines on who can be considered an independent contractor versus an employee are as follows (from the IRS website):

- Individuals will likely be considered employees if they receive ‘extensive’ (note that the definition of this term is left up to interpretation by the IRS) instruction on:

* how, when or where to do the work they will perform
* what tools or equipment to use
* where to purchase supplies and services

- Individuals will likely be considered employees if they receive training about required procedures and methods.

- Individuals will likely be considered independent contractors if they:

* make significant investment in their work
* do not get directly reimbursed for expenses
* have the ability to make profit or loss on their work
* receive no benefits from the company, such as health insurance and paid vacation.

In the past, the IRS would allow people to be considered independent contractors if they met some portion of these rules. But over time the IRS has gotten much stricter in their interpretation. Now it is generally considered that all of the rules must be met to classify an individual as a true independent contractor and not an employee. Written contracts between the company and the individual that clearly define the relationship using the above criteria can also help support that a person is a true independent contractor.

What happens if you get this wrong? Significant interest and penalties for back taxes not paid for starters! So, again, don't try to work this all out on your own -- get help from your CPA or employment attorney.

Posted by Jeff Cornwall at 03:08 PM | Permalink | Comments (1)

In addition to eVenturing, which I have referred to many times over the past couple of years, the Kauffman Foundation sponsors another good resource for those interested in entrepreneurship . The Entrepreneurial Research & Policy Network (ERPN) at the Social Science Research Network provides access to over 4,300 scholarly articles through a fairly user friendly search engine. The articles are more of the academic flavor, but many have some interesting insights for anyone wanting to learn more about entrepreneurship.

Posted by Jeff Cornwall at 02:32 PM | Permalink

Melissa Chang has an amusing post about the less than desirable personality traits -- paranoid, obsessive, and delusional, just to name a few -- that many entrepreneurs exhibit from time to time (or for some, all the time).

While the most important trait of an entrepreneur must be his or her flexibility and adaptability, it's also true that people who found start-ups often have some less-than-stellar qualities that help them be successful in their ventures.

Here's a look at 10 qualities that some entrepreneurs share that may help them be great at starting a company, but not so great at existing in normal society.

Posted by Jeff Cornwall at 04:05 PM | Permalink

Entrepreneurship Week is almost here again. It starts on Saturday. Where did the year go?

Like last year, I look at this week with mixed emotions. While I am pleased at the attention it draws to entrepreneurs in our economy, it saddens me that we relegate entrepreneurs to simply one week. After all, entrepreneurship is over 50% of the economy.

Having only our own week puts entrepreneurship right there in the mix with National Fresh Squeezed Juice Week, National Pancake Week, National Cleaning Week, National Condom Week (I am not making these up...), National Headache Awareness Week, National Fig Week, National Backyard Games Week, National Business Etiquette Week, Improve Your Home Office Week, National Pollinators Week, and National Chestnut Week.

Why not give us a whole month? That would at least put us up there with National Hot Tea Month, National Bird Feeding Month, National Umbrella Month, Prune Breakfast Month, National Stamp Collecting Month, National Sweet Potato Month, National Kite Month, National Sweet Vidalia Month, National Bikini Month, National Library Lovers Month, National Noodle Month, National Asparagus Month, Country Music Month, National Baked Bean Month, National Horseradish Month, and last but not least, National Pomegranate Month.

Any way....Happy Entrepreneurship Week!

Posted by Jeff Cornwall at 05:18 PM | Permalink

Advanta Corp. announced last night that Naomi Bar-Yam of Newton, MA has been named January’s $10,000 ideablob.com monthly contest winner for the best business idea. Bar-Yam is co-founder of the Boston-based Mother’s Milk Bank of New England, a newly-formed milk bank serving babies, hospitals and families throughout New England.

Bar-Yam garnered the support of the ideablob community for her idea to create a milk bank that would provide screened and pasteurized breast milk to premature and critically ill babies in the New England area. According to Bar-Yam, studies show that premature babies who receive banked milk are far less likely to suffer life-threatening complications and have much faster recovery rates.

"Our milk bank is in the startup stage and ideablob helped us get the word out," explained Bar-Yam. "The $10,000 prize will enable us to purchase equipment and educate the community about what we do and how we will help premature and sick babies."

Two Belmont social entrepreneurs have qualified for the February finals to be held later this month. Stay tuned....

Posted by Jeff Cornwall at 01:27 PM | Permalink

The good folks at the Institute for the Future in California have issued their third and final installment of the Future of Small Business reports. This project was funded by Intuit.

Today, there are 26 million small businesses in the U.S. that generate roughly $5 trillion in annual sales. If they were a country that would make them the 2nd largest economy in the world! Those numbers will continue to grow over the next decade as small businesses re-emerge as artisans with even more economic force.

Artisans, historically defined as skilled craftsmen who fashioned goods by hand, will re-emerge as an influential force in the coming decade. These next-gen artisans will craft their goods and shape the economy -- through upswings and downturns -- with an effect reaching far beyond their neighborhoods, or even their nations. They'll work differently than their medieval counterparts, combining brain with brawn as advances in technology and the reaches of globalization give them greater opportunities to succeed.

This series offers a fascinating look at the future of out entrepreneurial economy.

Here is a link to the second installment.

Here is a link to the first installment.

Posted by Jeff Cornwall at 02:34 PM | Permalink | Comments (4)

One of the highlights from the International Franchise Association meeting was the chance to hear Colin Powell give a keynote speech.

The part of his address that hit home most with me was when he talked about his personal transformation.

He described the feeling of going from one day being the Secretary of State, with his personal entourage and body guards, his own jet at his disposal, people calling him all day long hoping to get even the briefest bit of his time -- to the next day simply being Colin Powell, average citizen, sitting at his kitchen table wondering what to do with the rest of his life.

Like many entrepreneurs who exit their businesses, he felt a real sense of emptiness.

He thought about jumping right back into public life, but his wife said 'no' to his thought of running for office. She made him take time to determine where he should next with his life. To think of other ways he could use his gifts and experience. My wife reacted the same way after we sold our business. I was ready to jump right back in and do another deal. But, The General and I were both put in "time out".

Both of us benefited greatly from the wisdom of our wives. I found my way into teaching, and have found so much fulfillment. The General now is involved with a venture capital firm, leads various charities, writes books, and benefits from lucrative speaking engagements.

What I think I enjoyed most from General Powell's address was seeing how genuinely happy and healthy he looked. He is having fun!

I am a firm believer in the importance of seeking wise counsel. Both General Powell and I are blessed with the wisest of counsel -- our wives.

Thanks, Honey, and Happy Birthday!!

Posted by Jeff Cornwall at 06:38 AM | Permalink

I am blogging today from Orlando at the annual conference of the International Franchise Association.

It seems like an ideal opportunity to write about an article in the most recent issue of the Journal of Small Business Management that looks at franchising and business failure rates.

Professors Michael and Combs find that franchise restaurants have significantly higher success rates that stand-alone independent restaurants. This seems to be due to the structures they provide and the access to key resources.

So if you are going to start a new restaurant, a franchise may be your best bet to reduce risk.

Posted by Jeff Cornwall at 06:56 AM | Permalink

Marginal Revolution has a post on a paper that suggests that Brazilian entrepreneurs. The authors of this paper report the following:

We find that family characteristics have the strongest influence on becoming an entrepreneur. In contrast, success as an entrepreneur is primarily determined by the individual’s smartness and higher education in the family. Entrepreneurs are not more self-confident than non-entrepreneurs; and overconfidence is bad for business success.

The paper also reports that social networks help determine who becomes an entrepreneur, but not how much success they will enjoy once they start their ventures.

These findings are certainly consistent with findings in other places around the globe. Culture and family background point you toward a career as an entrepreneur, but your wits and education are what lead to success.

Culture plays a major role in fostering entrepreneurship. Culture begins with the family and then extends to the community. This study suggests that family and social relationships are the strongest predictor for entrepreneurial activity. Note the lack of any findings on the importance comprehensive government planning in this paper!

Of course, there are those out there who seem to interpret these findings as evidence that entrepreneurship is only an avenue for the economic elites. The blog Stumbling and Mumbling sees it this way).:

In other words, what makes an entrepreneur is access to capital - the sort of access that comes from having a wealthy background.

We all know where this type of perspective often takes us.

It is a long stretch to conclude that since entrepreneurs often come from successful parents, it must be the capital they give to them that makes their children more likely to become entrepreneurs.

Access to capital does not correlate very highly with entrepreneurial outcomes. That is, more money at start-up does not predict more entrepreneurial success. If that were true I would suspect that venture captialists and angels would have much higher than the typcial 10% success rates that they often see in their rather sizable investments.

It is more likely that these economically successful parents have instilled ethics and values in their children that reinforce the importance of success, self-reliance, and education.

(Thanks to Nathan Ratcliff for pointing me toward this discussion).

Posted by Jeff Cornwall at 06:38 AM | Permalink | Comments (1)

The ideablob.com team is here at Belmont tonight and all day tomorrow.

They are hosting a get together at Bongo Java this evening and will be speaking in our classes all day tomorrow. If you're in Nashville come on over to Bongo Java tonight!

I'll blog more on their visit tomorrow....

Posted by Jeff Cornwall at 06:39 PM | Permalink

Most entrepreneurs make major errors when it comes to terminating employees. Such errors can quickly become quite costly to even a small employer.

Fortune Small Business offers seven basic steps to start to develop a human resource system in a small business:

1. Know the law -- entrepreneurs often do not know even the basics of employment law. We made the decision a long time ago in our program that all of our entrepreneurship students will take a class in Human Resource Management. Employment law is complex and can get even a small employer in deep trouble.

2. Develop a simple employee handbook

3. Don't use employment contracts -- most often they will hurt you, not help you as the employer

4. Keep careful and complete written personnel records -- having clear and complete records saved me more than once when employees tried to fight termination

5. Don't think that moving an employee to a new position can fix their poor performance or problem behaviors

6. Hire people more carefully in the first place -- hire not only for skills but for fit in your organizational culture.

7. Be proactive -- don't wait too long to act on a problem employee. Entrepreneurs seem to have big hearts (and sometimes weak backbones) when it comes to problem employees. We think that if we just keep them on a little longer we can help them turn around their poor performance. Most of this is more of an attempt to postpone the inevitable -- that is, firing the employee -- then it is any realistic attempt to "fix" the employee. For the kind-hearted entrepreneur, by the time he finally admits that he should start to move toward terminating a problem employee, he has probably already waited several weeks or even months too long. In reality, such delays help no one. You are not doing that employee any favor. And you are hurting the performance of your business and diminishing your leadership stature with your other employees.

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

Most of us have gotten the message about "phishing" as it applies to mass e-mails sent to get folks to give out bank and credit card info to thieves hoping to snag a few unsuspecting victims.

Their latest approach is to use one of our biggest fears as bait -- an IRS audit.

KraftCPA sent me a sample of the e-mails these folks are sending out:

----Original Message----- From: Internal Revenue Service

Date: Fri, 18 Jan 2008 21:17:18

Subject: Audit and Examination procedure scheduled

After reviewing your latest Tax declaration forms, our office decided to schedule an Audit and Examination procedure of your tax declaration and income forms. In order to view the date scheduled for your Audit and necessary documents for Examination, as well as a list of IRS officers, please visit . . .

It goes on to tell you your "rights" and explains audits using language from actual IRS documents. It all looks rather official. The phishing e-mail will end with something like this:

Examination Methods An examination may be conducted by mail or through an in-person interview and review of the taxpayer's records. The interview may be at an IRS office (office audit) or at the taxpayer's home, place of business, or accountant's office (field audit). Taxpayers may make audio recordings of interviews, provided they give the IRS advance notice. If the time, place, or method that the IRS schedules is not convenient, the taxpayer may request a change, including a change to another IRS office if the taxpayer has moved or business records are there. You are courteously advised to review the information provided (attached) and to contact your local IRS office if you require further assistance.

The IRS does not send out unsolicited e-mails or ask for detailed personal and financial information. Additionally, the IRS never asks people for the PIN numbers, passwords or similar secret access information for their credit card, bank or other financial accounts.

If you get an e-mail like this, DO NOT OPEN THE ATTACHMENT!! Instead, forward the e-mails to phishing@irs.gov (visit the IRS website for specific instructions).

These e-mails often target small business owners, as they are the most common targets of IRS audits.

Posted by Jeff Cornwall at 10:40 AM | Permalink

Got a business model that depends on shelf space in a "big box" retailer?

Fortune Small Business offers some good tips. Although the column is based on a reader trying to get into Home Depot, the advice is useful for small companies trying to sell to any of the big box retailers.

(Thanks to Natalie Wozniak up in Minne-so-cold for passing this along).

Posted by Jeff Cornwall at 05:35 PM | Permalink

We are still floating on air around here after our award this weekend. To be honest, we thought it would take several more years to reach this level. Thanks to everyone for their kind words. Thanks to Anita Campbell for her nice write up at her blog site. She has become a good friend over my years of blogging.

Here is a picture of our team from San Antonio. That look you see in my eyes is total shock and amazement!!

Posted by Jeff Cornwall at 09:46 AM | Permalink

Our kick-off speaker this morning at USASBE was Guy Kawasaki.

Guy Kawasaki is a managing director of Garage Technology Ventures, an early-stage venture capital firm, and a columnist for Entrepreneur Magazine. In addition to his blog, which I know many of you frequent, Guy is the author of several books including The Art of the Start.

Guy began his career as an Apple Fellow at Apple Computer, Inc., where for four years he evangelized Macintosh to software and hardware developers and led the charge against world-wide domination by IBM. Guy left Apple to start a Macintosh database company called ACIUS, which published a product called 4th Dimension.

Later, he returned to Apple as an Apple Fellow, where his main task was to maintain and rejuvenate Macintosh customers. A few years later, he left Apple to co-found Garage Technology Ventures, a venture capital firm and making direct investments in early-stage technology companies.

Guy offered many pearls of wisdom, but one of the best that I had not heard from him before was this:

"An old Chinese proverb says this: 'If you wait by the river eventually the body of your enemy will float by.'"

Too many entrepreneurs are impatient and impulsive. They lock themselves into a cat and mouse game with competitors. In doing so, they become too clever by half. Put your energy into your employees and your customers.

Good things take time. It takes time to build a successful business and it takes time to build wealth. Take the high road, work hard, stick to your vision, make your customers your evangelists, and all those competitors you are obsessing about will take care of themselves.

Posted by Jeff Cornwall at 09:26 AM | Permalink | Comments (2)

This evening I had the distinct honor of introducing Cordia Harrington, founder of Tennessee Bun Company, as the kick-off keynote speaker at USASBE.

Cordia Harrington, best known as The Bun Lady, is the President and CEO of Tennessee Bun Company. Founded in 1996, Tennessee Bun Company (TBC) produces 60,000 buns an hour and supplies these to restaurants such as McDonalds, Chili’s and Pepperidge Farm. TBC is one of the most highly automated bakeries in the world, producing 1,000 buns per minute, and ships to 40 states east of the Rockies and to the Caribbean. In 1999, Harrington also opened Nashville Bun Company, a producer of English muffins for McDonalds, Sheetz, Perkins, and Wolferman's Gourmet English Muffins. She added a Hearth line to Nashville Bun Company in 2005 to supply McDonalds and O'Charleys.

Prior to baking, she owned three highly successful McDonald's restaurants in Illinois. Cordia's enthusiasm and passion for her work are highly contagious and laid the foundation for her success. Cordia is a graduate of University of Arkansas, Kansai Gaidai and Osaka Japan, and Hamburger University. She has built several successful companies including real estate, fast-food restaurants and commercial bakeries from start-up.

Cordia offered humor, wisdom, and inspiration in telling her story of going from bootstrapping her real estate business through the $50 million multi-national company she operates today. If you ever get the chance to hear her speak, make sure to take advantage of it. It is rare that an entrepreneur can wow a group of academics -- but, Cordia pulled it off.

At the end of her speech, Cordia was named the USASBE Woman Entrepreneur of the Year for 2008. A well deserved honor, indeed!

Posted by Jeff Cornwall at 10:58 PM | Permalink | Comments (1)

I am blogging the rest of this week from the 2008 annual meeting of the United States Association of Small Business and Entrepreneurship (USASBE) being held this year in San Antonio.

USASBE is the leading voice in entrepreneurship research, teaching, and application. USASBE's mission is to advance knowledge and foster business development through entrepreneurship education and research.

I will be posting the highlights of the conference for the next several days.

Today should prove to be an exciting opening. Belmont has organized a pre-conference session today that will be hearing about a variety of exciting new innovations in entrepreneurship education from schools from across the country. This pre-conference is sponsored by a grant from the Coleman Foundation.

Then this evening I have the honor of introducing one of my favorite entrepreneurs from Middle Tennessee. Cordia Harrington, best known as The Bun Lady, is the President and CEO of Tennessee Bun Company. Founded in 1996, Tennessee Bun Company (TBC) produces 60,000 buns an hour and supplies these to restaurants such as McDonalds, Chili’s and Pepperidge Farm. TBC is one of the most highly automated bakeries in the world, producing 1,000 buns per minute, and ships to 40 states east of the Rockies and to the Caribbean. In 1999, Harrington also opened Nashville Bun Company, a producer of English muffins for McDonalds, Sheetz, Perkins, and Wolferman’s Gourmet English Muffins. She added a Hearth line to Nashville Bun Company in 2005 to supply McDonalds and O’Charleys.

Cordia is a regular speaker to our classes at Belmont.

Posted by Jeff Cornwall at 05:54 AM | Permalink

Being a life-long Green Bay Packer fan, I remember fondly the Vince Lombardi days. A couple of Lombardi memorabilia adorn our Rec Room, which has become our Packer shrine. And I still will throw in one of his quotes about leadership now and then in one of my lectures.

It might be time to say move over Vince and make room for Mike. Green Bay Packer coach Mike McCarthy seems to set the leadership tone just right up in the frozen tundra.

From Mike Vandermause's column at PackerNews.com:

If you're searching for reasons why the Packers are 13-3 this season, start with the second-year coach's no-nonsense approach that includes a twist.

McCarthy demands commitment and production, but he trusts his players and treats them like adults.

Too many coaches make the mistake of micromanaging, which can have a suffocating effect on a team. McCarthy seems to have struck the perfect balance between setting a high standard and giving his players the freedom to carry it out.

Set high standards, communicate those standards clearly, expect results, and most importantly, treat people with respect and trust that they will perform. This is a great leadership formula. Does it result in 100% success? Of course not. No leader can ever make that happen. There is too much random chance out of our control, and people are people. Adjust to the surprises that come your way, and if people do not respond to being treated with respect and autonomy, find new people who will.

Treat your employees with respect, and they will respect you. Your job is not to be their friend, but to be their leader. Listen to the words of veteran defensive tackle Ryan Pickett from Vandermause's column:

"I like it that he's approachable. He's tough, he means what he says, says what he means. At the same time, the guys can all go to him, and he listens. And players, they rally behind a guy like that. It's easy to play for a coach like that. Everybody respects him."

And don't forget to have some fun. Much of a leader's role using this style is to keep everyone loose and foster a positive culture.

Go Pack!!!!

(A note a full disclosure -- I am also a shareholder of the Green Bay Packers. But no worry. I am not trying to push up the value of my stock. Once you buy the stock you can never sell it and it will never pay a dividend. But it makes a really cool addition to our Packer collection in the Rec Room!)

Posted by Jeff Cornwall at 06:39 AM | Permalink | Comments (1)

I have always tended to believe that the titles we assign to positions in our businesses are a cheap currency we can use to attract and reward employees. There were many times over the years that I actually asked a prospective new hire to suggest to me the title that would best fit what they would be doing in the position. As long as it helped accurately communicate what they did to other employees and outsiders that they interacted with in their work, I tried to be rather flexible.

The Wall Street Journal has a story that show just how far some companies take create titles:

Princess paysalot (payables, purchasing and asset manager), cultural curator (office manager) and supreme sorceress of syntax (copywriting team lead) are among the jobs at privately held board-game maker Cranium Inc....

The "cool" factor is one driver behind the trend. "Whenever someone sees my business card, they say, 'Wow, you must work for a really cool company!'" says Mr. Tait, whose company has about 80 employees.

Recruiting may be another. "When compared to other companies, it makes us stand out," says Robert Stephens, founder of Geek Squad, a 24-hour technology-services provider acquired by Best Buy Inc. in 2002. Some jobs at the company: counter-intelligence agent, double agent, mission controller, covert operator and public defender. Mr. Stephens calls himself chief inspector.

As long as a title does not misrepresent what someone does, cause too much confusion, or delegitimize the company to the outside world, have some fun!

I wonder what the university would think about this title for me -- The Pied Piper of Free Enterprise.....

Posted by Jeff Cornwall at 12:49 PM | Permalink | Comments (1)

The TaxingTennessee blog has a post about an interesting analysis at the Lunch Over IP blog based on Doc Searls' The Cluetrain Manifesto. (Lots of links, I know, but this whole blog thing is supposed to be a conversation after all).

Searls makes the case that with advances in the Internet, markets have become "conversations." It is a remarkable look into what he believes is the future of how markets behave. Click on through and read about his views. They are an important perspective on what our economy might become.

Past predictions were that the growth in the use of the Internet was leading to an era of depersonalization. Searls believes that the future is just the opposite as we move from the 'static web' to the 'live web.' As our on-line world advances it is leading to an even more personal relationship with customers. He goes so far as to say that advertising as we know it will soon cease to exist.

A good example of how things are changing on-line can be seen in this article from the Wall Street Journal.

Small online retailers are chatting up customers to get them to stick around on a site longer -- and buy something.

A case in point: Backcountry.com, a seller of high-end outdoor gear and apparel. The retailer's staff regularly talks live with customers online about the site's offerings, as well as provides buying tips and addresses any service issue.

"It's an interaction opportunity," says Sam Bruni, director of customer experience at the Park City, Utah-based company.

The world is in a time of dramatic economic transformation. Every business owner must keep his or her entrepreneurial skills tightly honed. Small business may well be the ultimate winner from this transformation as markets shift from being mass markets to relationships with customers directly in charge of what they want.

Small business is best equipped to engage in this type of relationship. Entrepreneurs are best equipped to continually react and adjust to what will likely become a wild ride, indeed!

Posted by Jeff Cornwall at 08:29 AM | Permalink | Comments (1)

I wrote a post early this month about an inspiring young entrepreneur, Louis Barnett, who did not let his dyslexia get in his way of success. Ben Cunningham sent along an update.

First, here is is a bit of history on young Louis from his website:

Louis Barnett is something of a wunderkind. The traditional rags-to-riches story has been told over and over, but then Louis’s story isn’t exactly traditional, more a case of self-belief and hard work.

After suffering from problems at school, Louis was diagnosed with Dyslexia Dyspraxia and a high I.Q. After this, he was taken out of mainstream education in order to be home educated, a decision that he’s now reaping the benefits from.

One day, Louis came across a book on cakes and decorations, which ignited a previously dormant passion for making handmade Belgian chocolate cakes. From cake decorating, Louis then moved into the tempering side of making chocolate, which in turn led to him producing limited quantities of chocolates for his family and friends.

Well, it seems his chocolate business is running smoothly (pun intended...). From the blog Nothing To Do With Arbroath:

The plucky confectioner has opened the factory and employed members of staff to help keep up with demand after his company "Chokolit" attracted worldwide interest.

He now has a website where you can order his yummy products packed in edible boxes. Clearly, he didn't let his disability stop him from tasting the sweetness of success (sorry, but this pun was also intended).

Posted by Jeff Cornwall at 08:39 AM | Permalink | Comments (1)

Some interesting findings were reported in the New York Times from a recent study of entrepreneurs:

It has long been known that dyslexics are drawn to running their own businesses, where they can get around their weaknesses in reading and writing and play on their strengths. But a new study of entrepreneurs in the United States suggests that dyslexia is much more common among small-business owners than even the experts had thought.

The report, compiled by Julie Logan, a professor of entrepreneurship at the Cass Business School in London, found that more than a third of the entrepreneurs she had surveyed -- 35 percent -- identified themselves as dyslexic. The study also concluded that dyslexics were more likely than nondyslexics to delegate authority, to excel in oral communication and problem solving and were twice as likely to own two or more businesses.

(Thanks to Jennie Bowman for passing this along).

Posted by Jeff Cornwall at 12:04 PM | Permalink

If you ever want to get a lot of free books, start writing a blog. I have gotten a mountain of books to review on my desk this fall. Here are a few that might be worth a read over the Holidays:

How to Talk to Customers, by Berenbuam and Larkin.

Learning how to think like and talk to your customers is probably the essential skill for most start-ups. A good book to help with those selling skills.

First, Best, or Different by John Bradley Jackson.

I nice set of short lessons on effective niche marketing.

My Start-up Life, by Ben Casnocha.

See the start-up process from the eyes of a "very" young entrepreneur. A good read for entrepreneurs -- young and old.

Fired Up or Burned Out, by Michael Lee Stallard and Fire Them Up! by Carmine Gallo.

Need to give your team a shot in the arm? Both of these books offer some good advice on what works to communicate vision and passion in business.

For the social entrepreneurs out there I suggest New Day Revolution by Sam Davidson and Stephen Moseley.

I have had the pleasure to get to know Sam. These guys are among the new pioneers of for-profit social enterprises. A great read!

Product Idea to Product Success by Matthew Yubas.

The author outlines the process of going from an idea to a marketed product.

Simple Solutions by Tom Schmitt and Arnold Perl.

A fresh approach to leadership is the focus of this book.

PEAK, by Chip Conley.

Conley takes us back to Psychology 101 to show the lessons we can learn from Maslow on how to lead a great company.

Clear and to the Point, by Stephen Kosslyn.

Keeping with that same theme, Kosslyn uses psychological principles to help us finally get PowerPoint presentations right.

When You Mean Business, by Ray Capp.

Capp offers some simple, but powerful lessons we can learn from successful businesses.

And finally a recommendation from my father. Richistan, by Robert Frank.

Join Wall Street Journal columnist Robert Frank in his journey through the world of America's new rich. Some fascinating stories!

There. I am caught up on my reading and have cleaned off at least one stack from my desk.... Happy reading!!

Posted by Jeff Cornwall at 02:38 PM | Permalink | Comments (3)

Feeling like you were dealt a bad hand in life? Read the inspiring story from BBC News about one boy who decided to not let his disability get in his way in life.

A 12-year-old boy has started his own business after becoming fed up with suggestions that his dyslexia might affect his chances of a good job.

Tom Sweet, from Lampeter, Ceredigion, set up a market stall importing foreign herbs and spices earlier this month.

(Thanks to Ben Cunningham for passing this along).

Posted by Jeff Cornwall at 06:11 AM | Permalink | Comments (1)

Entrepreneur Ted Leonsis gave a keynote address to Wharton's Entrepreneurship Conference a couple of weeks ago. Leonsis rose to leadership in AOL after that company bought his business in 1993. An article summarizing his address has been posted at the Wharton site.

He offered his views of the future of the global Internet economy.

...[C]onsumers now see the Internet as a routine and indispensable part of their work and home life, spending 23% of their time hooked up to the web, compared to seven minutes a day when he began with AOL, he said. Latinos and African Americans are the fastest-growing groups online. And the U.S. is only part of the story. He noted that North America now accounts for just 16% of worldwide Internet users, down from 35% in 2000. "China has more Internet connections than the U.S., and most of them are on their phones.... If you're building products and services just for the U.S. market, you're giving up 80% of the market," he told the audience. Even though the global potential for online services is huge, he doesn't see enough business plans that have "an international vision of globalization."

He concluded his remarks by saying: "I wish I was 25 again... I think it's the greatest time to be an entrepreneur."

Amen!!

(via Robin at the-venture-pad-collective).

Posted by Jeff Cornwall at 06:01 AM | Permalink

The Wall Street Jounral has an interesting article on new developments in health insurance for small businesses.

Insurers are offering more varied plans that include less-expensive options. Nonprofit groups and legislators have paved the way for small companies to band together in purchasing cooperatives to get lower rates. A handful of states now offer subsidies and credits to small businesses that offer health insurance -- and others have begun levying fines on those that don't.

Posted by Jeff Cornwall at 06:05 AM | Permalink

Entrepreneurs don't like to think about it. They almost never want to talk about it. And they never seem to plan for it.

Failure.

It is a word that is even hard for this entrepreneurship blogger to type.

I bumped up against ithe topic of failure in a recent post I wrote about worst-case planning.

When I see worst cases presented in most business plans, they are almost always not the worst case scenario. They are most often a less optimistic variation of what the entrepreneur thinks will actually happen. The real worst case should be this: if things don't go as planned and the deal fails, what is the outcome for investors and lenders?

Entrepreneurs seem to operate under the assumption that if they don't plan for failure, it can't happen. If they don't ever address the real worst case, investors and lenders won't think about it.

Failure is a fact of life for entrepreneurs. Only about half of all start-ups last five years. When it happens, it hurts. Some describe it has humbling, while others would characterize it more as humiliating.

Ben Cunningham passed along a blog posting that got me thinking about entrepreneurial failure. It is an interview with a social networking entrepreneur whose venture failed. Colorado Startups blog ran an interview with Derek Scruggs, founder and CEO of The Enthusiast Group. Here is what he learned from his deal's failure:

If you have a business idea, show it to as many people as possible. Most ideas aren't very good, so it's good to get outside feedback very early in the process so you don't waste your time on something that doesn't work. And recognize that they may be wrong too. We got lots of positive response to our business plan, but that didn't translate into success.

In the course of showing your idea around, you will meet a lot of sharp people and build relationships that will pay off years later. I moved to Boulder in early '99 after 12 years in Chicago. For the first year or so I was kind of lazy about meeting people, but since then I've been a networking maniac.... That paid off bigtime when we started looking for investors, and now that I'm forced to look for a job it's an even bigger help.

Entrepreneurs need to think of failure in its proper perspective. This requires reflecting honestly about some hard questions.

Why did the business fail? Were there things that were in my control that in hindsight I see I could have done better or differently? Was this a business model that failed, or was it a failure of me as the entrepreneur? What can I take from this failure to help me in my next venture to improve my chances of success?

Did I have integrity throughout the downward slide of my business? Did I compromise my values and ethics for the sake of the business? Did this failure help strengthen my character or take me down a path that I am not proud of?

Why did we consider our venture to be a failure? After all, every business has a life cycle. Nothing is forever. So while the business was operating, how was it successful? Was the end of this business really true failure, or simply a deal that ran its course?

I find it a big challenge to talk about failure with today's young entrepreneurs. The Millennial Generation has been insulated from failure by their helicopter parents. They are in denial of failure to a degree that at times can be alarming. I have had to find ways to expose them to failure. It has become one of our goals for our experiential learning.

We have our students work through a cash flow exercise that presents the students with a situation that is, in a word, hopeless. They want me to change the rules. They search for solutions to avoid the inevitable. But soon they realize that the critical lesson is how they act in the face of failure -- did they act with character as they made decisions for this dying business?

Again, from the interview with Derek Scruggs:

Companies come and go, but relationships usually last through several companies, jobs and sometimes even spouses. Cultivate those relationships and you'll find happiness whether your company fails or ends up being the next Google. The journey is the reward.

That is a healthy view of failure. And more importantly it reminds of what is true success. That a lesson that all of us can learn from.

Posted by Jeff Cornwall at 06:08 AM | Permalink | Comments (1)

From the National Dialogue on Entrepreneurship:

Coupled with the announcement of Global Entrepreneurship Week/USA, the Kauffman Foundation released the findings from a survey that shows America's young people want to be their own boss. The Foundation commissioned Harris Interactive to conduct an online survey of 2,438 youth ages 8 to 21 about entrepreneurship. It shows that four in 10 young people would like to start their own business in the future, while another 37 percent believe starting their own business is a possibility. Those who want to have their own business say their top reasons are to use their skills and abilities (92 percent), build something for their future (89 percent), be their own boss (87 percent), see their ideas realized (81 percent) and earn lots of money (85 percent). In the United States, 63 percent of respondents in the Harris survey already believe that, if they work hard, they can be entrepreneurs.

Posted by Jeff Cornwall at 12:45 PM | Permalink

Business Week released their list of the top entrepreneurs 25 and under. The entrepreneurial generation is alive and well! These kids are not a fluke. Our entrepreneurship program here at Belmont continues to grow, just as so many other programs are around the country.

With each new class arriving on campus we see a stronger commitment to entrepreneurship and self-employment. Not only is this an economic phenomenon -- it is part of a social revolution that this generation is quietly leading through their actions.

Posted by Jeff Cornwall at 06:06 AM | Permalink

As I have said many times at this site, disasters happen. It is not if, but when. Business TN Magazine posted an article about how to prepare for the worst.

For a growing business, one major setback can spell life or death. Preventing a natural disaster is outside the scope of even the largest firms, so what can a small business owner do to protect against catastrophic events? Every industry has unique vulnerabilities, and each company particular needs.

Having the right insurance and working with the right law firm are two important means of insulating a small business from the brunt of the impact of a catastrophic event.

(Just for the record -- the author calls me an economist. I may be a lot of things, but I am NOT and economist!!)

Posted by Jeff Cornwall at 12:19 PM | Permalink | Comments (1)

The leaders of America’s small- and mid-sized businesses (SME's) are working long hours, concerned about keeping up with the latest technology. The UPS Business Monitor - United States shows they also think the economy and healthcare reform are the nation's most pressing problems. About two-thirds of the companies surveyed have sales between $250,000 and $5 million, with the remaining third between $5 million - $50 million.

Some highlights from this survey:

- SME executives work an average of 53 hours a week, with one-third (34%) working 60 hours or more.

- 59% say their top technology worry is just keeping up with the pace of technological change, although 53% also worry about Internet security breaches.

- Cell phones are clearly considered the most-needed technology device.

- The respondents are evenly split when asked if they expect difficulty in the future finding skilled employees.

- And the group clearly believes political leaders should be paying the most attention to sustaining economic growth, changing the healthcare system, and securing future energy supplies, in that order.

Posted by Jeff Cornwall at 05:40 AM | Permalink

I have written before about the risks of going into business with friends. But what if you find yourself becoming friends with employees you hire in your business? This is the question that one of our student entrepreneurs asked while we were chatting in my office the other day. He had observed other young entrepreneurs becoming buddies with his employees and wasn't so sure that was a good practice.

In a small business becoming friends with employees is natural. A small group of people working closely with each other toward common goals often develop friendships. You all suffer together through the trials and travails of start-up and early growth, which can create strong bonds. We know that facing common adversity is powerful for building teams. Such camaraderie can be a critical element in building a strong culture in the business and in creating loyalty among your staff.

But it is important for the entrepreneur to keep certain boundaries as such friendships develop.

No matter how strong the team becomes, the entrepreneur is the one person who is ultimately responsible for the outcomes of the business -- the one who personally has everything on the line. Hard decisions will have to be made at critical points in the growth of the business. And no matter how hard it may be, the entrepreneur must make the best decision for the future of the business even if it may not be in the best personal interest of all the individual employees.

Although employees can become intensely committed to your business, they are never as invested in the business as the entrepreneur. At some point to them it is just a job. Even if they become your friends, their loyalty will have its limits and at some point their self-interest will kick in. While the entrepreneur has no real ability to exercise a better option if one comes along, any and every employee does.

There are certain things you should never share with your employees, even if they have also become your friends. Because they become your friends you may feel that you can share with them your deepest fears about the business. This is a mistake. First and foremost you are their leader. It is your job to communicate confidence and commitment to the vision, even when times are tough. You need to be what I call their emotional shock absorber through the tough times. They will know when things are not going well. Your confidence and commitment will be what can keep them on task doing what needs to get done to make it through rocky times. If you share your fears and doubts as you might with a good friend, you run the real risk of creating a climate of hopelessness and defeat in your company.

To understand what friendships between employees and entrepreneurs are all about, we have to understand the root of friendships in business. Some are true friendships -- they transcend and outlive the limits of the business relationship. I wrote a while back about such a true friendship between my father and his mentor. While their friendship began through work, it endured for many decades after their work life together had ended.

Some friendships at work are more instrumental in nature. Being your friend is part of the whole package of employment or some other business relationship. At its core it is a friendship tied by economic bonds.

The difficult aspect of friendships in business is that you never know which type is which. Is it a true friendship or an instrumental one? Most entrepreneurs who have been through an exit, be it through a sale or through closing a business, talk about how very quiet the phone can get after they exit the business. Many comment how much more open their social calendars become.

The good news is that those who remain friends are people who are truly your friends. One entrepreneur told me how surprised he was as to who these true friends were. They were not the people who had seemed so intensely connected to them when they were in their business. Rather, it was people who had seemed a bit more on the periphery. So we may never really know which are merely instrumental until the economic nature of the friendship is severed.

At the end of our discussion my advice to the student entrepreneur was that it was okay to become friendly with employees, but to maintain certain limits. It is alright to socialize, but remember that you are the owner and the boss 24 hours a day, seven days a week. It is not unlike the parent/child relationship as the child moves into early adulthood. While parent and child find their relationship can evolve more and more into one of friendship, their remains a certain boundary based on their familial relationship. Friendships with your employees need to also have these boundaries.

Posted by Jeff Cornwall at 05:58 AM | Permalink | Comments (1)

Baby Boomers and Millennials are two generations that are over-represented in the ranks of entrepreneurs. The Boomers in Canada seem to be no exception to this phenomena. From an IPSOS poll of Canadian boomers:

[S]ome Boomer entrepreneurs intend to operate their business until they die (15%). Further, one in five (21%) intend on running their business for more than ten years into their so-called retirement, while four in ten (38%) intend to do so for somewhere between six and ten years. Just 16% say that they will engage in this activity for less than five years.

And what drives these graying Canadian?

...Boomers are wishing to stay active in their retirement years, with four in ten (40%) indicating that the need to keep occupied was the reason why they intended to or have started their own business. Other reasons include fulfilling a life-long dream (29%), needing the money (26%), or just a general inclination between themselves and their partners to start their own business.

Nice to see my fellow boomers to the North are jumping on the entrepreneurial bank wagon, ey?

(Thanks to Ben Cunningham for passing this poll along).

Posted by Jeff Cornwall at 06:39 AM | Permalink | Comments (1)

I have the honor and pleasure of having Joe Keeley here on campus as our Entrepreneur in Residence this week. Joe is founder of College Nannies and Tutors, headquartered in Minnesota. From their website:

We serve the short and long-term childcare needs of today's working families as well as foster the growth of children's education and development through our experienced nannies. Our services are designed to provide busy parents with the childcare support they need at each developmental stage of their child's life. We provide a safe and easy means for families to find a qualified nanny to work in their home.

They currently have over franchise locations operating or under development in 13 states.

Seven years ago Joe was a sophomore at the University of St. Thomas where I used to teach. He wandered into my office with what he thought might be a way to make some extra cash during the summer. He was working as a nanny for a family in Edina, MN. Several families in the neighborhood told him that they would pay him money if he could find a college student to be a nanny for their kids. The next summer Joe continued to nanny, but also placed 12 college students as nannies for a $300 finders fee. Thus was born his concept.

He worked on the business while a student in our program. And when he graduated took the risk of running the business full-time. During the first year he entered every business plan competition he could find. He says that he generated more cash from awards in his first year than he did from revenue from the business. But, that cash was enough to make it through the start-up period. It got him to the point where he had a proven business model that attracted the investment capital he needed to scale up the venture.

What a thrill it is to be able to have a former student come to campus to teach our current students.

Here are some of the lessons Joe has learned over the past seven years that he shared:

- The importance of a business's revenue model. This is the hardest part of planning a business, but in the end is the most important. Getting the revenue model right assures the cash flow you need to survive the difficult early years. Joe learned that his original model of only getting placement fees was too limiting. He eventually found a way to employ the nannies and take a percentage of each dollar they billed out.

- Think! -- Knee jerk reactions are not a good strategy. Impulsive decisions rarely work out very well. As Joe told our students, the old wisdom of the importance of sleeping on a major decision has always served him well.

- Investor relations. Investors should offer so much more to your business than just their money. Their expertise and connections can often be as valuable as the cash they bring into the business. Joe added a partner to his business after he graduated. Although the partner infused needed capital, he says that the experience and wisdom that his partner has shared has brought even more value to his business.

- Scalability - what's right for you? Know your own personal aspirations and build a business model that fits what you want out of your business and the life style you want to live. Not every entrepreneur aspires to build a national company.

- Remember the 3 M's Joe told our students to evaluate their ideas on: 1) Money - how much to start, how much returned, 2) Market - is there one? How big?, and 3) Me - does this fit with your personal goals, values, interests? Are you passionate? Those of you who read this blog regularly know how important I believe this kind of thinking is when evaluating ideas.

- The importance of creating long term value. To build real value you need to build a business that can run without you. That requires systems. Joe has a goal of removing one task from his job every six months by building a system to make sure that task will get accomplished by someone in his organization.

- Finding the balance between putting out immediate fires and "fire proofing" projects. This is sound management advise for any business.

Joe has learned his lessons well. Although I am proud of all that he has accomplished in business, I am even more proud of the level of integrity he has shown at each step along the way.

Posted by Jeff Cornwall at 12:27 PM | Permalink

Ephren Taylor will be speaking this afternoon at Belmont (5:00 in the Maddox Grand Atrium -- 4:30 reception). He started his first business venture at age 12, when he began making video games. By age 17, he built a multi-million dollar technology company; GoFerretGo.com. At his current venture, City Capital Corporation, Taylor oversees over $150 million in assets, serving a diverse client list ranging from Wall Street investors, top executives, professional athletes and even entertainment icons. Quite a resume for a young man still in his early twenties!

His talk is open to the public.

Posted by Jeff Cornwall at 07:49 AM | Permalink | Comments (2)

Many entrepreneurship programs seem to see the need to offer separate programming for women entrepreneurs. The logic is that they face a different situation and have different needs.

However, in most of my conversations with women entrepreneurs I hear that they don't want to be treated differently -- they just want to be treated as entrepreneurs. This is particularly true among the young entrepreneurs we work with.

Entrepreneurship researchers also crank out study after study looking for "gender differences" in the entrepreneurial experiences. While some subtle differences can be observed, fundamentally the experiences and issues entrepreneurs face seem to be remarkably similar.

A new study was just released by the SBA on gender differences among entrepreneurs. The authors found differing expectations, reasons for starting a business, motivations, opportunities sought and types of businesses between men and women -- and these result in differing outcomes. They go on to recommend that such observations should be taken into account when comparing the outcomes of ventures across genders.

That makes sense, but so does taking account differences in age, life stage, life style, marital status, rural versus urban location, etc., etc., etc.

That is why I start out every entrepreneur in their journey with a careful reflection on their aspirations, goals, financial needs, and non-financial needs. The outcome of this discernment should be foundational in any business plan. The business should reflect what you want and need to get out of the venture -- it is yours, after all.

So if women tend to want to pursue a venture of their own to allow for more flexibility in their family life -- a common theme I see with many female students in my classes -- then so be it. My job is to teach them the processes and skills that will help them achieve their goals. And those are the same process and goals that I teach any aspiring entrepreneur, whether they want to retire at 30 or simply provide a family with supplemental income from owning a business.

Think of it this way -- the same basic tools and materials are used to build a small starter home that are used to build a 20,000 square foot mansion.

Posted by Jeff Cornwall at 05:53 AM | Permalink | Comments (2)

Anita Campbell shares some wonderful quotes on entrepreneurship at her blog Small Business Trends. Here is one of my favorites:

Joanna Meiseles, CEO, Snip-its Hair Salons for Kids -- "When I started my business I did not know what EBITDA was. I had no business experience. I was not a hairdresser. I just was a Mom with an idea, and I knew there was a customer need for a kids’ hair salon."

Make sure to check out the rest at Anita's site.

Posted by Jeff Cornwall at 09:00 AM | Permalink

It is always interesting to see what issues catch people's attention. The Wall Street Journal ran a story on serial entrepreneurs that generated several e-mails to me about this topic. From this article:

In 2000, Mr. Stewart published a study with two other researchers looking for common traits among serial entrepreneurs -- which he defined as those who had owned and operated three or more businesses. Of the 664 entrepreneurs studied, only 12% fit the bill. But those who did scored higher in all three categories examined: They had a higher propensity for risk, innovation and achievement. They were less scared of failure. And they were more able to recover when they did fail.

Beyond that, many serial-preneurs bring tactical advantages from their first venture to apply the second and third time around. For instance, they recruit top talent from their original companies to subsequent ventures. They double-dip financially, getting money -- and connections -- from people who backed their earlier brainstorms. Several lean heavily on a trusted partner for financial, professional and emotional support in whatever endeavor they undertake.

This was our experience with the health care ventures that we started in the 1980s and early 1990s. With each venture we started we learned from our successes and missteps. We became more confident in our ability to execute. There is much talk of the learning curve within a new type of business, but I am convinced that there is a start-up learning curve that cuts across specific businesses and brings down the time and cost of any new start-up you pursue. We also built a reputation that helped attract talent and resources.

By the way -- I want to thank the Journal for creating links that allow free access to such articles for bloggers to use for their readers. This has opened up more of their content to those beyond their subscribers.

Posted by Jeff Cornwall at 10:26 AM | Permalink | Comments (1)

I have been really enjoying golf lately. And much of that has to do with technology.

I never used to play any woods. I found them too hard for me to hit. So I slogged my way around the course hitting irons. Luckily I hit them fairly well most of the time.

But this year I decided to make a change -- I guess it is an age thing, as I noticed my irons were not going as far as they used to.

First I tried one of the new hybrid clubs. What an easy club it was to hit! So I bought another, and another, and then another. I hit them all so well that I stuck my 1-4 irons (yes, I even carried a 1 iron) in the garage. Then I did the unthinkable. I started hitting one of those really big-headed drivers. I had not hit a driver since high school, and even then could not hit it very well. But, are the new drivers easy to hit.

Now you still have to make a good swing. They don't hit it for you. But when you swing well it goes farther. And when you are little off, you hardly notice and it still goes pretty far.

The same thing is true for technology in business. It can't make a poor business model work, or an incompetent manager any better. But the right technology in the right hands can improve productivity and performance. It makes you more efficient.

I still think it is wise to be a late adopter. All of these golf clubs have been around for a while -- many of you probably chuckled when I called them "new." I waited for two things to happen. I wanted them to get the kinks out of the new clubs, and I wanted the prices to come down.

That is also how technology can work best for a small business. Wait until they get it right and wait until the wild-eyed first adopters are done bidding the prices for the latest and greatest gadget up. I was one of the last people I knew in business to get a fax machine in the 1980s. But by the time I bought one they worked really well and the prices had fallen through the floor.

My new driver was a gift from a golf buddy. He got it at Wal-Mart for $19.96. I hit it as far as any $400 driver. And my hybrids were all last year model on close-out in the bargain bin.

Always remember that efficiency is a simple ratio of performance over cost. Since I am not the brightest business person, and definitely not a very talented athlete, I always work on getting the bottom number of that ratio as low as possible. I wait for the cost of any technology, be it for golf, business or entertainment, to go down -- way down. That always puts the efficiency ratio in my favor!

Posted by Jeff Cornwall at 05:46 AM | Permalink | Comments (1)

We are honored and excited to announce that we will be hosting a premiere of the documentary film from the Acton Institute, The Call the Entrepreneur, here in Nashville, TN.

If you are not in Tennessee or even in the US, there are several other premieres scheduled around the US and around the world.

UPDATE: Here are the details of our premiere:

Date: Monday, September 10, 2007
Time: 5:00 p.m. CDT
Location: Beaman Center, Room A/B on the Belmont Campus in Nashville, TN

Posted by Jeff Cornwall at 09:45 AM | Permalink | Comments (2)

One common practice that many small business owners have chosen as a means of helping employees get health insurance is to encourage them to buy their own policy and then get reimbursed by the business. StartupJournal examines the pros and cons of this approach. The article suggests that a small business owner in Utah is the first to use this approach, but I have heard of many small businesses reimbursing employees for health insurance over the past couple of years.

How does it work?

The tax wrinkle used...involves something called a health reimbursement arrangement, or HRA. Employers set aside a certain sum every month, say $200, that employees can use for health expenses. The employer can write off the expense for tax purposes, just like traditional health benefits, and the money doesn't count as taxable income for the employee.

The tax advantages of HRAs resemble the better-known health savings accounts, or HSAs. Both plans are sometimes used by large employers that offer comprehensive benefits and want to supplement it by giving employees tax-free dollars for noncovered medical costs.

The key difference is that employees can use the money in an HRA, but generally not an HSA, to buy health insurance. That's why an HRA can be used not just to supplement health insurance but also to buy it.

At a business with generally healthy employees, an HRA plan, in effect, allows the owner to cover a good chunk of most people's insurance bills at a fraction of the cost of a traditional group insurance plan. The idea is especially attractive to small businesses that don't have the leverage to drive a good bargain for group coverage.

One of the shortcoming of this approach according to critics is that it can be difficult for employees with pre-existing conditions to purchase affordable coverage. Also, there are questions being raised about the legality of this approach to helping employees get health insurance coverage.

I believe that this is a positive innovation in the market. It has promise as a means to help move health care back into the free market. Each employee can shop for the level and type of coverage that they want to purchase. This is a much better direction than the calls for socialized health care we are now hearing from so many politicians.

Posted by Jeff Cornwall at 10:00 AM | Permalink | Comments (1)

Many small business owners are turning to tools like Google Earth as a bootstrapping tool to bid jobs and prospect for clients. These tools allow free access to areal images that can offer amazing detail of specific locations. Many of these tools are free, but some charge a small annual fee to get premium services.

From the Wall Street Journal:

Roofers aren't the only ones taking advantage of aerial mapping -- landscapers, pool maintenance people, real-estate agents and insurance companies are also using such services. In some cases, they're checking out specific locations where they're bidding for or working on a job. In others, they're perusing the images for signs -- such as pools or big lawns -- indicating homes that might be potential clients for their services.

Here is a sample of an image from one of these tools, zilow.com, which is geared toward real estate. The image is of Belmont University. My office is in the complex of buildings toward the top, right center of the image (the dark roofed building that looks like a backwards "L"). To illustrate that these images are very accurate, take a look at the parking lot to the right of the building complex in the upper right of the image -- you can make out cars in the lot. To illustrate that these images can be dated, those parking lots are now our new Inman Health Sciences building that has been open for about a year.

Here is the same image from Google Earth (also missing the new building):

To illustrate how these tools can be used, here is an example. We recently fenced in our backyard. We needed to get the fence stained, so I called a couple of painters recommended by the local paint store. One of them had to drive about 50 miles round trip just to take about five minutes to measure the backyard. He could have used one of these tools to get a view of our yard and placed a bid based on what would be a fairly accurate measurement. Since he could not see the fence this way, he would have been wise to make the bid contingent on the height and style of the fence being what I told him over the phone. The really bad news for him was that after taking over an hour to drive to my house to get the information he needed to make a bid, he did not get the job.

Posted by Jeff Cornwall at 07:23 AM | Permalink | Comments (1)

Each year Inc.com runs a story on 30 entrepreneurs under the age of 30. In her story on this year's 30 under 30, Donna Fenn presents an impressive roster from the Entrepreneurial Generation. I had the pleasure of talking with her about the young entrepreneurs of today for this story.

No wonder that a recent study by The Global Entrepreneurship Monitor shows that 18- to 24-year-olds in the United States are starting businesses at a faster rate than 35- to 44-year-olds. The college campus is now a fertile breeding ground for company builders. "Forty percent or more of students who come into our undergraduate entrepreneurship program as freshmen already have a business," says Jeff Cornwall, the Massey Chair in Entrepreneurship at Belmont University in Nashville. "It's a whole new world...."

They're often so antsy, in fact, that it's not unusual for them to bail out of college to devote themselves to their businesses full time....[T]hat kind of defection may tell us something about entrepreneurship education. "The old model was, go off and study liberal arts and when you're a junior, we'll give you an entrepreneurship course," Cornwall says. "Now, if I wait until junior year, I'll loose them. They want fulfillment and success and they're not willing to wait 10 or 15 years. They want it today."

Posted by Jeff Cornwall at 08:30 AM | Permalink | Comments (1)

There were a couple of interesting findings In a study released by the SBA Office of Advocacy.

Contrary to previous findings, this study did not find any evidence that having parents who were entrepreneurs increased start-up rates. If this is supported in future studies, it may signal a shift in the profile of entrepreneurs. Growing up in an entrepreneurial household used to be seen as a major predictor of who will become an entrepreneur. But, with the explosion of entrepreneurship in our economy it may be coming more of a mainstream career choice.

Also, the impact of the existing wealth of the entrepreneur on start-up rates was much more subtle than the researchers seemed to think going into the study. There was some impact of wealth when the data was scrutinized (as we used to say in my doctoral program, "torture the data long enough and it will talk"). So the old adage of "it takes money to make money," while somewhat supported in one slice of the data, is not as strong as is commonly thought. Another victory for bootstrapping!!

Posted by Jeff Cornwall at 05:49 AM | Permalink | Comments (1)

In the 1960s there was a series of studies that tried to find the traits that created effective leaders -- things like height, hair, sex, etc. What they realized was that these traits were correlated with ALL leaders, because we had a bias on who we thought made good leaders. We soon realized that it was what leaders did and how they behaved that commanded true leadership.

In the 1980s we went through the same drill with entrepreneurs -- they just had to be born that way due to some sort of combination of traits. Again, this line of thinking led nowhere. Success in entrepreneurship is also based on how you act and behave.

USA Today ran a story that suggested that taller CEOs are more powerful.

Le Gourmet Gift Basket CEO Cynthia McKay wears 3-inch heels even though she's 5-foot-9 in bare feet.

Why? For the same reason that 6-foot-3 Don Peebles, CEO of The Peebles Corporation, the nation's largest African-American-owned real estate development company, puts his hand on the shoulder of shorter adversaries and crowds into their personal space when negotiating a key deal.

But again, this thinking is flawed. Just because they seem more powerful does not mean that over the long-term they will be any more effective as CEOs. They might be able to be better bullies, but not more effective at leading, inspiring others, and creating positive cultures in their companies.

(Thanks to Tahirah King for passing this along).

Posted by Jeff Cornwall at 06:43 AM | Permalink | Comments (1)

You can now cast your vote among the 10 semi-finalists for the Microsoft Home Office Makeover contest that I posted about a few weeks ago. One winner will receive a home office makeover from HGTV's Vern Yip and the latest home office technology from Microsoft and HP (valued at $25,000).

Entrants were required to submit an essay of 250 words or less describing how a Microsoft Home Office Makeover would create an overall positive change in entrant's personal and/or business life. Voting closes July 31, 2007 and finalists will be announced and posted online on or about August 1, 2007.

Here are the top 10 finalists:

1. Rebecka (Lincoln, Neb.) -- Rebecka (an accountant) and her video-producer husband squeeze into a crowded, cluttered, uninviting office space -- not ideal when the couple enjoys inviting family and friends into their home office to view his creations.

2. Brandon (Greenville, S.C.) -- Brandon works 10-hour days, five days a week from his home office "loft," (read: no doors!) where he oversees an e-commerce website and remotely manages a Microsoft network, all the while attempting to tune out the noisy washing machine, two energetic young boys running around the house and his wife's voice trying to control the chaos.

3. Nancy (Vista, Calif.) -- Nancy virtually manages a team of registered nurses from her home office bedroom. She is surrounded by her family, pets and photography, but every attempt she makes to bring order to this messy corner of her bedroom is unsuccessful.

4. Crile (Wheatland, Wyo.) -- His web design is edgy and sleek; his desk, a clunker. His Internet access is state-of-the-art; his filing system, Caveman 1.0. Crile seeks office supplies that will keep up with him so that he can avoid the four-hour round trip to town when something breaks down.

5. Kristine (San Antonio, Texas) -- It's Three's Company at Kristine's home office event-planning company: her fifth-grader surfs the web, her husband berates his slow computer while trying to start up his homebuilding company, and Kristine bemoans the office's odd layout made difficult by built-ins, a bar and a sliding glass door.

6. Christopher (Silver Spring, Md.) -- Christopher has a new, roomy home office -- with only one bookshelf, a card table that serves as a desk and a four-year-old archaic laptop. As an attorney, his billables will suffer if he keeps working from home in this environment.

7. KK (Round Rock, Texas) -- Markers, crafts and lesson plans are strewn about KK's home office. This special education teacher for elementary school children is looking to put some order to her creative processes.

8. Sandy (Morton, Ill.) -- While their schedules are organized -- Sandy's husband uses MS Office applications to track the kids' basketball, baseball and social activities -- the home office is not. It's a hodgepodge of new/used furniture in desperate need of some feng shui, as the family spends a lot of time in this room online and watching TV.

9. Robert M. (Albany, Calif.) -- Robert runs four enterprises (including a literacy non-profit) out of a home office that measures 12' by 13'. Every square foot is spoken for, and he has to be careful when he swivels at his desk so that he doesn't knock over a day's work.

10. William (Los Angeles, Calif.) -- Due to lack of space, William spends a great deal of time just keeping things organized in his home office. The result? He's less productive in the few hours he has at home -- hours he'd rather spend with his wife and two daughters.

To learn more about the contest and the semi-finalists click here.

Right now I am leaning toward Brandon and his loft (my home office is a loft) or Robert M. because he sounds like a deserving guy (and my Dad's name is Robert M. -- but please be assured that this Robert M. is no relation to me that I know of). But there are a few days to vote, so I may change my mind by the 31st.

Posted by Jeff Cornwall at 06:32 AM | Permalink | Comments (3)

Rev. Sirico and the Acton Institute have a new project that is about to be released: a documentary film. It's title is The Call of the Entrepreneur. Even though this film will never get the attention of a Michael Moore's films, this one is a whole lot better -- trust me!

You can get more information on this film here at their web site, including premiere information and a trailer of the film. We are working on hosting a premiere here in Nashville -- more to follow if we can work it out.

Posted by Jeff Cornwall at 05:35 AM | Permalink

I wrote a post about the Intuit/IFTF report on small business and technology last month.

This week the International Office of the International Council for Small Business (ICSB) announced the results of a Global Technology Study conducted in collaboration with DELL Inc. The study included a 12 country survey of small business owners and decision makers and a targeted survey of international small business researchers, practitioners, and consultants conducted by ICSB. The study confirms that IT is extremely important in the growth of small businesses world-wide.

"The survey results reinforce the fact that small business owners and the experts both acknowledge the importance of IT on a global level," said Rob van der Horst, President of the ICSB. "Small businesses are using IT for multiple reasons, to better serve their customers and also to better compete in the marketplace."

According to the survey, covering Australia, Brazil, Canada, France, China, Germany, India, Japan Mexico, New Zealand, the UK, and the US, sixty-six percent (66%) of small business owners indicate that IT is extremely important to their business. At the same time, fifty-seven percent (57%) of small business experts, researchers and educators surveyed by ICSB state that IT plays an extremely important role in the growth of small businesses. The ICSB portion of the study also shows that eighty-eight percent (88%) of small business experts think that most small business owners could financially benefit from a greater awareness of IT options.

The No. 1 reason small businesses use technology is to better serve customers, followed by growth of their business and, finally, to enable them to better compete in the marketplace. Additionally, small business owners around the world indicate that when it comes to IT:

- They prefer simple service solutions because they do not have full-time dedicated IT staff and are, therefore, installing their most sophisticated IT products on their own.

- They do not have time to explore new IT products/possibilities.

- Their top IT Pain Points include: managing costs of technology, product complexity making them too dependent on an outside company for support, and issues with trial-ware installed on new computers.

Posted by Jeff Cornwall at 05:47 AM | Permalink | Comments (1)

In the 1800s businesses set up operation along rivers to make distribution more convenient. Eventually the preference for location switched to tie in with the expanding railroad system. In the mid 1900s the preference for location again switched to either being near the new Interstate highway system or near an airport. It seems that in the age of instant gratification that we now find ourselves living in, more small businesses are setting up operations in Memphis to tie into Federal Express' main distribution center.

From the Wall Street Journal:

Many large companies have distribution centers in Memphis to maximize delivery time frames. But a growing number of smaller companies...are now moving to Memphis or adding a branch there to serve their customers faster. Small businesses are realizing that having a centralized distribution center in a city like Memphis can give them a competitive advantage. And it also provides a marketing opportunity, as companies pitch the logistical efficiency to potential clients.

Posted by Jeff Cornwall at 08:24 AM | Permalink

Although many in Generation Y (or those that many of us call the Entrepreneurial Generation) want to own a business, the odds are good that a number will never be entrepreneurs. They will need to find jobs.

But, the unique nature of this generation is proving make it quite challenging when it comes to recruiting and retaining them as employees.

Fortune on-line examines the unique nature of this new generation of workers:

"This is the most high-maintenance workforce in the history of the world," says Bruce Tulgan, the founder of leading generational-research firm RainmakerThinking. "The good news is they're also going to be the most high-performing workforce in the history of the world. They walk in with more information in their heads, more information at their fingertips - and, sure, they have high expectations, but they have the highest expectations first and foremost for themselves."

To call the change in management philosophy a true paradigm shift may be a bit strong, but it isn't that far from the truth.

Never mind that they often need an entire team - and a couple of cheerleaders - to do anything. For some of them the concept "work ethic" needs rethinking. "I had a conversation with the CFO of a big company in New York," says Tamara Erickson, co-author of the 2006 book "Workforce Crisis," "and he said, 'I can't find anyone to hire who's willing to work 60 hours a week. Can you talk to them?' And I said, "Why don't I start by talking to you? What they're really telling you is that they're sorry it takes you so long to get your work done.'"

If you have even just one position in your business to keep staffed, you need to learn about the generation coming to age and entering the workforce. They will be challenging much of what you think you know about managing workers. This article is a good start.

Thanks to Rob Hill for passing this along.

Posted by Jeff Cornwall at 05:41 PM | Permalink | Comments (2)

Business Week recently called me to make my pitch for people who should be on the Top 30 Entrepreneurs of all time. Here is a link to their final list and here is a link to the complete slide show.

I urged them to look beyond just the amount of wealth that an entrepreneur created, and to examine how they create and what they do with that wealth:

Some founders won recognition not just for their companies' success, but for what they did with the wealth they accumulated. For Jeff Cornwall, director of the Center for Entrepreneurship at Belmont University, entrepreneurs-turned-philanthropists like Andrew Carnegie and Bill Gates made the top of his list.

"Look at entrepreneurs who had a profound impact that goes beyond just raw business success, as we often define it on Wall Street," says Cornwall, whose book on the subject, The Good Entrepreneur (Regal), will be published next year. "The great ones to me are the ones that understood they were building more than just that wealth."

Many of the pioneers we chose also created businesses that in turn encouraged others to start their own enterprises. Microloans from Muhammad Yunus' Grameen Bank have helped thousands of poor Bangladeshi women lift themselves from destitution (see BusinessWeek.com, 10/13/06, "What the Nobel Means for Microcredit"). And how many businesses has Pierre Omidyar's eBay (EBAY) made possible? "He wants to encourage free enterprise around the world," Cornwall said.

Who would your picks be for this list? Why would you choose to include them?

Posted by Jeff Cornwall at 03:30 PM | Permalink | Comments (4)

Business owners like to think that their employees are honest and care about the business almost as much as the owners do. Employee theft and dishonesty is only a problem for big business. However, the fact is that employee theft is a real issue for businesses of all sizes.

I learned this lesson at a young age in one of the businesses my father owned. For example, while in high school I worked in the marina that my dad and two other partners owned. I managed the retail part of the business, the pier as we called it, where we sold bait to fishermen, gasoline for boats, snacks, and a various other small items for people enjoying the lake. I hired some of my friends to work for me on the pier. I thought that it would be fun to work with some of my buddies. But, I soon discovered that they were stealing food and gas, and were cheating on time cards. I had to fire some kids that I thought were good friends -- a tough lesson for a sixteen-year-old.

Some instances of employee theft can be small like the ones I experienced, but some can be quite significant even for a small business.

An article in the Arizona Republic highlights the challenges that entrepreneurs face with employee theft:

The 2006 report by the Association of Certified Fraud Examiners showed that businesses with fewer than 100 employees suffered a median of $190,000 in fraud losses. Without safeguards, any business is susceptible to fraud, especially common forms like check tampering, fraudulent billing and stealing money before it's recorded.

The article goes on to list several tips to prevent problems from developing including the need to run background checks, the importance for the entrepreneur to sign all checks (I hand signed hundreds of checks every month in our business just to make sure I had the final review of all expenditures), and critical need to develop strong and consistent control systems even in a small business.

When it comes to employees and the finances of your business, remember the words of Ronald Reagan -- "trust, but verify."

Posted by Jeff Cornwall at 12:29 PM | Permalink | Comments (1)

For many of the 20 million self-employed Americans, many of whom work from home, there career choice is closely tied to creating better balance for their families.

From an article at the Startup Journal:

Parents often have to sacrifice the regular income, employer-sponsored health insurance and other tax-favored benefits that make covering bills, planning for contingencies and saving for retirement easier and automatic. But the upside can be lucrative for people who find a market for their product or service, small-business experts say.

The article goes on list nine tips for people thinking about making the move to a home-based business. Many of these are consistent with any business start-up, which is how such a move should be viewed. Too many people make impulsive decisions to work from home, not realizing that they are in fact setting up a new business. This list of tips is a good outline of what should be considered each step along the way.

Posted by Jeff Cornwall at 07:29 AM | Permalink | Comments (4)

One of my favorite entrepreneurship authors, Barry Moltz, is again helping to sponsor the Pursue Your Passion Tour. Half of all Americans are not satisfied with their jobs. This project is an attempt to help students avoid this same lot in life.

This summer, recent college graduates James Whiting, Noah Pollock and Brett Farmiloe will be traveling 14,000 miles in 90 days on their tour to interview 200 professionals who have a passion for their work.

Here is a schedule of their tour this summer.

Posted by Jeff Cornwall at 07:05 AM | Permalink | Comments (4)

I had the pleasure of participating in an all day discussion last year that examined the future of small business hosted by the Institute for the Future and sponsored by Intuit. In the first report that came out of this project, the changing face of small business ownership was examined.

In the second report, which was just released this morning, the emerging impact that technology will have on small business is explored. Although entrepreneurs have lagged in their use of new technologies in the companies, this report sees small businesses finally embracing the use and application of new technologies in their businesses. Here are a few of the findings:

- Small businesses will become integrated into the "networked" world. Small businesses will embrace technologies that will help them better manage customer relationships, inventory, distribution and employee productivity. Mobile devices will become integral in small business. Small business will have new productivity tools at their fingertips, including new generations of digital assistants.

- On-line tools and applications will become more a part of starting and managing small businesses. Such tools will become simpler to use, enabling small businesses to increase their connections through on-line social networks. This will open up the "virtual world" to any and all entrepreneurs.

- Small business marketing shifts from push to pull. Customers will be able to search for information about what they want with increasing power, no longer just accepting information they receive from the marketplace. The new media for such information will come through devices in cars and through cell phones.

If you want to sharpen your vision of what your business might become in the next ten years, and begin to prepare for what new and existing technologies can offer to keep you competitive, this report is an important first step.

Posted by Jeff Cornwall at 07:33 AM | Permalink

As if the current tax system in the US is not a big enough scam, there are now a couple of Internet tax related scams going around that aim to take even more of your money.

The first looks like it is coming from the IRS Criminal Investigation unit. From the IRS alert:

The e-mail purporting to be from IRS Criminal Investigation falsely states that the person is under a criminal probe for submitting a false tax return to the California Franchise Tax Board. The e-mail seeks to entice people to click on a link or open an attachment to learn more information about the complaint against them. The IRS warned people that the e-mail link and attachment is a Trojan Horse that can take over the person’s computer hard drive and allow someone to have remote access to the computer.

The second scam goes like this:

In another recent scam, consumers have received a "Tax Avoidance Investigation" e-mail claiming to come from the IRS' "Fraud Department" in which the recipient is asked to complete an "investigation form," for which there is a link contained in the e-mail, because of possible fraud that the recipient committed. It is believed that clicking on the link may activate a Trojan Horse.

The IRS offers this sage advice: “not to click the link in the e-mail or open the attachment.”

It is only official if it comes as an official notice in the mail -- or if you are greeted at your front door by IRS agents with automatic weapons drawn wearing full body armor. The IRS does not send out e-mails to tax payers.

(Thanks to KraftCPA for passing this along).

Posted by Jeff Cornwall at 07:37 PM | Permalink

Eric Flamholtz has it right in his book Growing Pains (now in a 4th edition, by the way). In an early stage business almost all of your focus must be on two things:

1) You must get your product or service properly aligned with the market. Our business plans offer our best guess about this, but the reality of the reaction from real customers tells us the truth of what will really work.

2) Selling! We must actively engage the market to gain a customer base. They almost never just "show up" at our doorstep.

Entrepreneur magazine has a great feature story on selling in this month's issue. Included are several specific tips on such topics as selling to department stores, selling on eBay, selling expensive products, creating a buzz and so forth. It is well worth a careful read whether you are starting a new venture or simply trying to expand the sales of your existing business.

Posted by Jeff Cornwall at 05:47 AM | Permalink | Comments (1)

The blog site Marginal Revolution has a post on the entrepreneurial generation and a link to an article he wrote for the New York Times.

American youths are so successful at entrepreneurship in part because so many older and wealthier people are willing to help them. The broader American success at philanthropy, then, lays the groundwork for American entrepreneurship. By global standards, Americans may have looser networks of friends and family, but Americans are more willing to help relative strangers, and this often helps business.

(Thanks to Ben Cunningham for passing this along).

Posted by Jeff Cornwall at 08:56 AM | Permalink

From the 20 million self-employed, to many small business owners, to the growing legion of telecomuters -- more and more of us have home offices. For me it is where I can blog in the morning (when not blogging from our back porch) and write and grade papers on days when I don't need or want to make the 25 mile trek to campus.

Microsoft and former "Trading Spaces" designer Vern Yip will give one deserving winner a $25,000 home office redesign as part of the Microsoft Home Office Makeover contest. The winner will receive some cool gadgets and software, as well as new home decor to enhance to spruce up their "office away from office."

Here is how it works:

Entrant is required to submit an essay of 250 words or less describing how a Microsoft Home Office Makeover will create an overall positive change in entrant's personal and/or business life and one (1) photograph showing entrant in the office space that needs the home office makeover. A video displaying the entrant in the home office space that needs the Microsoft Home Office Makeover may also be submitted to earn five (5) bonus points to be added to the entrant's overall score during Semi-Finalist judging. Submission of a video is optional and not required for entry. Entries will be accepted between June 14, 2007 and July 4, 2007.

Then there is a round of public voting to narrow it down to the finalists.

To get more information and to enter the contest you can go to this site.

Ten semifinalists will be announced on July 17, when public voting begins. Semifinalists will receive Microsoft Office Professional 2007. The entrants selected as finalists will also receive an HP notebook PC with Windows Vista Ultimate. The winner will be announced Sept. 4.

If one of my loyal visitors makes it into the semifinals I will be happy to plug you for votes and post the "before" picture of your office here at the Entrepreneurial Mind.

Posted by Jeff Cornwall at 08:40 AM | Permalink | Comments (1)

I recently suggested a few books that had come across my desk for your summer reading. This week the National Dialogue on Entrepreneurship offers their list. It is a very interesting collection this year, so be sure to check it out.

Posted by Jeff Cornwall at 06:09 AM | Permalink | Comments (1)

The entrepreneurial nature of those under 25 is not just part of the American culture. From Business Week:

Economic growth in Europe is faster than in the U.S. Reform-minded governments are chopping away the red tape that stifles small business. The Internet is knocking down barriers faster than a thousand ponderous directives from Brussels. And mobile young people, nursed on wireless phones and the Web, are fanning out across the continent in search of new business opportunities.

Add it all up, and entrepreneurialism is alive in the Old World.

Just as we have seen in the US ove the past ten to twenty years, entrepreneurship is no longer being viewed as a personality type, but rather has a legitimate career path to many young Europeans.

One startling bit of evidence: A recent study completed for the Global Entrepreneurship Monitor, a program of Babson College and the London Business School, found that 64% of 18- to 24-year-olds in Britain were actively considering entrepreneurship as a career choice--the highest percentage ever measured.

"Entrepreneurship is becoming a credible career path," says Jonathan Kestenbaum, CEO of Britain's National Endowment for Science, Technology & the Arts, the country's largest provider of early-stage startup funding. "It's no longer seen solely as the realm of people with a particular flair."

There is a stronger focus on entrepreneurship in many European universities. Whether this is spurring young people on or just meeting market demand is not clear. But it will help improve their success rates and will certainly reinforce the trend toward more young people pursing entrepreneurial career paths.

Let's hope Europeans keep on knocking down the barriers to business start-up, as they still have a long way to go. It is a shame that the US seems to be moving more in the opposite direction, adding more governmental controls over the entrepreneurial economy.

(Thanks to Ben Cunningham for passing this along).

Posted by Jeff Cornwall at 05:32 AM | Permalink

Here are a few books that have come across my desk over the past couple of months that may be of interest for your summer reading list:

Careers

Penelope Trunk, a columnist at the Boston Globe, has written an intriguing book for those of you still early in your careers called the Brazen Careerist. It captures the true nature of those who are what some call the Entrepreneurial Generation. If you are one of them, this book gives some interesting career strategies. If you are one of those wracking your brains on how to hire and retain young workers today, you really better read this one!

Stuart Skorman shares what he has learned through his career in Confessions of a Serial Entrepreneur.

Entrepreneur Stuart Skorman--the founder of Elephant Pharmacy, Hungryminds.com, Reel.com, and Empire Video--grew up in a retailing family in Ohio. He worked every kind of job, from cab driver to professional poker player to CEO. In this entertaining, personal account of his coming-of- age in the business world, Skorman gives an insider's view of what it takes to start a business from the ground up.

Marketing

John Bradley Jackson has put together an interesting little reference book on niche marketing titled First, Best, or Different. This book packs over one hundred short chapters into a two hundred page book. For those of you who are math challenged, that makes each chapter about two pages long. But, each chapter is targeted to offer concise and useful ideas on a variety of critical topics for any entrepreneur striving to create a niche market for their business.

Berenbaum and Larkin offer their thoughts on How to Talk to Customers.

Filled with case studies and anecdotes, How to Talk to Customers demystifies the most critical aspect of customer service: conversations employees have every day with customers.... Diane Berenbaum and Tom Larkin outline a proven system based on their MAGIC customer service training program. MAGIC, which stands for Make A Great Impression on the Customer, can help anyone become the type of communicator that makes their customers feel special.

Leadership and Innovation

Justin Menkes looks at leadership in Executive Intelligence. While not written specifically for entrepreneurs, this book offers insight into a skill that every executive should have -- whether they work for a Fortune 500 or are the owner of a small business.

Finally, if you want to transform and grow your business through innovation, Erich Joachimsthaler's Hidden in Plain Sight is a good read.

Posted by Jeff Cornwall at 05:34 AM | Permalink

I told you that the Entrepreneurial Generation was different than the rest of us. Read story on a boy named Anshul Samar from Gizmag.com:

Thought YOU were ambitious? How's this from a 13-year-old: "Our goal is to achieve 1 million dollars in revenue by the end of middle school, which is next year." The surprise hit of this year's TiECON, the Elementeo chief has already booked 450 sales of his upcoming first product.

(Thanks to Ben Cunningham for passing this along).

Posted by Jeff Cornwall at 12:42 PM | Permalink

Meetings. Most of us really don't like them, and many entrepreneurs hold off using them in the day-to-day management of their business as long as they can. But at some point, your business will grow large enough where meetings become a key tool to facilitate coordination and communication between a growing staff of managers.

So how do you make your meetings productive? Opinion Research USA has just issued an "Ouch Point" study that examines what makes meetings painful to participants. The top things that make meetings painful:

27 percent -- disorganized, rambling meetings

17 percent -- peers who interrupt and try to dominate meetings

16 percent -- cell phone interruptions

9 percent -- co-workers falling asleep

8 percent -- no bathroom breaks (older respondents)

6 percent -- no refreshments (younger respondents)

5 percent -- people arriving late or leaving early

5 percent -- others checking e-mail on Blackberry

4 percent -- meetings that start late and those that end without distributing a written recap

So if you are at the point of needing meetings in your business remember to be organized with a clear agenda, set some basic rules and expectations about behavior, and if you have any folks my age, for goodness sake offer frequent bathroom breaks!

Posted by Jeff Cornwall at 09:46 AM | Permalink | Comments (3)

There are three small business and entrepreneurship events coming up in Tennessee this month that are worth taking a look at.

The Small Business Chamber (a fairly new organization based out of Tennessee) is hosting two events.

The first is the Memphis Business Fair on May 15th at the Memphis Marriott. This event includes a "luncheon, Seminar, Business Expo and heavy networking opportunities all at one time -- one place -- and scheduled into a few jam packed hours."

The second is a quarterly membership meeting in Nashville on May 17.

Interested small business owners are welcome. I will be speaking on the challenges of growth at both of these events.

I also want to make folks aware of an event that will be held on the Belmont campus on May 14th. Nationally recognized social entrepreneur John Sage, founder of Pura Vida Coffee, will be speaking at 6:30 that evening. His for-profit venture is used to fund non-profits around the world. This event is free and open to the public and will be held in the Massey Board Room.

Posted by Jeff Cornwall at 07:21 AM | Permalink

The SBA Office of Advocacy has released a study conducted by George Haynes, Income and Wealth: How Did Households Owning Small Businesses Fare from 1989 to 2004?

This study extends work previously sponsored by the Office of Advocacy for the study of income and wealth of business owner households using the Survey of Consumer Finance (SCF), the most recently available data being
2004. By examining two sub-periods, from 1989 to 2004 and 1992 to 2004, the study concluded that:

- Families owning businesses remained significantly more likely to be high income earners and high wealth holders than families not owning businesses. In fact, the income gap widened between business and non-business owners during this time.

- Income and wealth for households owning businesses are more sensitive to fluctuations in economic activities. After all, there is risk in owning a business!

- Owning multiple businesses leads to even greater prosperity.

Posted by Jeff Cornwall at 09:30 AM | Permalink | Comments (1)

I wrote a post a while back about how we Baby Boomers have become helicopter parents -- hovering over our children during every step of their development. I also speculated that this could dampen what could become the most entrepreneurial generation in over a century.

At that time I heard some people joke that they could just imagine that some day a "helicopter" parent might hover over their children right into their entrance into the job market. Well, it seems that it is no joke and that day is now here. I have heard first hand accounts of parents showing up at job interviews with their children -- these were graduate students, mind you. In today's USA Today there is a story about parents trying to interject themselves into getting internships, finding full-time jobs, and even try to get directly involved in the negotiating process!

"Psychologically, it's somewhat eroding. When an employer is hiring someone, they're hiring an adult for an adult job, and then they have to deal with a parent," says Charles Wardell in New York, the managing director and head of the northeast region at Korn/Ferry. "There comes a time when you've prepared children, and you need to let go."

In my opinion, letting go should start somewhere around their early teens, not early thirties. Let them stumble, let them fall, and for goodness sake let them learn on their own from life experiences.

As I stressed in an earlier post, "We seem to have forgotten that failure, in fact, builds character. And it is the fear of failure that inhibits creativity and keeps us from learning....You will fail. Failure is a prerequisite for success."

Posted by Jeff Cornwall at 11:34 AM | Permalink

"Get a good mentor."

This is advice that we hear early in our working careers. But sometimes, it is offered in a rather casual way almost like, "find a good dry cleaner and, oh yea, get a mentor while you are at it.' However, a good mentor is like a true friend -- neither comes along that often.

I have been blessed to have had a few good mentors in the various stages of my working life. Some I still keep in touch with, while others I lost contact with over time. One of the important mentors in my entrepreneurial career was my father, Bob Cornwall, who is still active as an entrepreneur himself at 85. My father called me yesterday to tell me that one of the most important mentors in his life, a man named Jack Murray, passed away this past weekend at 93.

My dad worked for over 25 years at a company called Speed Queen in Ripon, Wisconsin. Those of you my age and older probably remember this company as a popular brand of washers and dryers in the mid 1900s. Those of you who are a bit younger may recognize this name from laundromats. Dad started out working there in purchasing not long after the end of World War II.

Early in his career at Speed Queen a man named Jack Murray took my dad under his wing. Jack's grandfather, Joe Barlow, was a co-founder of Speed Queen. My dad progressed through the ranks at Speed Queen under Jack's mentorship. Jack became not only a mentor to my dad, but a close friend.

In the late 1960s Jack took a position with the conglomerate that owned Speed Queen at that time and my father succeeded him as President. Eventually my dad left corporate life and began the entrepreneurial phase of his career, which has been going strong for about the last 30 years. However, even after leaving the corporate world, Jack and my dad kept in touch.

When you find a person who is willing to invest the time and energy it takes to be a true mentor to you in your career, cherish that relationship. I appreciate the support and guidance I received from my father, just as I know he appreciated his relationship with Mr. Murray. May he rest in peace.

Posted by Jeff Cornwall at 05:08 AM | Permalink | Comments (2)

Ben Cunningham passed along a great new blog called FoundRead, which is another blog that chronicles the early stages of an entrepreneurial venture and invites others who are doing the same to join in the conversation.

FoundREAD is a shared resource, where anyone can contribute, either through their posts, or experiences or comments. You can choose to contribute freely or anonymously. Just like a GPS system helps us drive through a maze of freeways, the founders and entrepreneurs help their peers navigate the twisted, confusing roads of company building.

Posted by Jeff Cornwall at 07:52 AM | Permalink | Comments (2)

Several studies over the past few years have hinted that having grown up in an entrepreneurial family increases the chances that children will grow up to be entrepreneurs.

Dmitri Davydov offers a slightly different hypothesis based on his own experience at a post at Nichegeek.com:

Nearly every super-successful entrepreneur I've met started out dead-broke, too. People raised with a silver spoon in their mouth seldom develop that fire-in-the-gut motivation necessary to achieve great things.

Your thoughts?

(Thanks to Ben Cunningham for this link).

Posted by Jeff Cornwall at 01:06 PM | Permalink | Comments (3)

In preparing our children to face the new entrepreneurial economy, George Anders at StartupJournal argues in a wonderful essay that we need to instill in them a strong sense of self-confidence. And in many ways this translates in an ability to sell.

On a more formal basis, many of us have been urging children for decades to sell Girl Scout cookies, magazine subscriptions and the like. It's hokey, but it's wonderful, too. Parents quietly line up the best sales prospects ahead of time and then send youngsters to call on those friends and neighbors in search of orders. Kids who are energetic and personable come out of the experience believing they are really good at sales.

So much of taking the leap into entrepreneurship and having success early on is tied to these sales skills -- and they can be instilled through the experiences we offer to our children. We need to be able to sell our idea to investors, prospective customers and employees, and even doubtful spouses whose support we desperately need.

Then when you send your children to me when they are ready for college, you will be amazed how far we can help them go!

Posted by Jeff Cornwall at 08:06 AM | Permalink | Comments (1)

I have been working on my tee shots for the past two years -- to no avail -- until this week. A little adjustment in my swing (courtesy of my son) and all of a sudden I am finally smacking it off the tee box again. But alas, as soon as that problem is corrected, my faithful wedges have abandoned me. Which reminded me of something from my days as an entrepreneur....

As soon as we got through one crisis in our business, it seemed another reared its ugly head. It was a pattern that seemed to occur over and over.

I guess the continual challenge of the next crisis or problem is one of the things that makes golf -- and entrepreneurship -- so fascinating. Perfection is an unrealistic goal for either pursuit.

*******

If you are a golfer and have never played any of the Robert Trent Jones Golf Trail in Alabama I cannot give it a strong enough recommendation. The courses are beautiful and challenging and the service is great. They are also a real bargain! Add it to your to-do list.

Posted by Jeff Cornwall at 07:14 PM | Permalink | Comments (3)

Here is a great listing of various web-based resources for entrepreneurs put together by Marcus Zillman.

Posted by Jeff Cornwall at 07:12 PM | Permalink

So what do I think about on this the 275th anniversary of George Washington's birth? His heroics as a general? His leadership of our new nation? His wooden teeth? Nope. It is Washington's success as an entrepreneur. If you've ever taken the tour of Mount Vernon, you already know the rest of this story. But for the rest of you, read this article at Opinion Journal by John Fund titled Moonshine Patriot: George Washington, whiskey entrepreneur.

"He thought like an American businessman," says Jim Rees, the executive director of Washington's Mount Vernon estate. "He was a true disciple of the free enterprise system, and he sensed that our new system of government would encourage people to think creatively, take chances and invest."

Here is a picture of the archaeological dig site of the distillery at Mount Vernon:

If you want an historic account of George Washington's pursuit of free enterprise read this paper from the Mount Vernon archives.

(Thanks to John Russell for suggesting this post).

Posted by Jeff Cornwall at 05:36 AM | Permalink | Comments (1)

Ben Cunningham sent along a post to a science blog called Gene Expression, which has a post on the genetic nature of the entrepreneurial spirit. It seems that a bit of a debate is raging about a genetic predisposition to being capitalistic.

In a recent paper written by economist Greg Clark, he made the following argument:

Before 1800 all societies, including England, were Malthusian. The average man or woman had 2 surviving children. Such societies were also Darwinian. Some reproductively successful groups produced more than 2 surviving children, increasing their share of the population, while other groups produced less, so that their share declined. But unusually in England, this selection for men was based on economic success from at least 1250, not success in violence as in some other pre-industrial societies. The richest male testators left twice as many children as the poorest. Consequently the modern population of the English is largely descended from the economic upper classes of the middle ages. At the same time, from 1150 to 1800 in England there are clear signs of changes in average economic preferences towards more "capitalist" attitudes. The highly capitalistic nature of English society by 1800 -- individualism, low time preference rates, long work hours, high levels of human capital -- may thus stem from the nature of the Darwinian struggle in a very stable agrarian society in the long run up to the Industrial Revolution. The triumph of capitalism in the modern world thus may lie as much in our genes as in ideology or rationality.

Some have argued that Clark's evidence does not support hie conclusions, including Tyler Cowen at this post found at Marginal Revolution.

I come down strongly on the side of nurture on this one. I believe that there are cultural norms that support entrepreneurial behavior and a capitalistic attitude, and there are even stronger links to family history of entrepreneurship. This all comes from environmental experiences. To say this is encoded in our genome is a leap of logic I just don't see any evidence to support.

Posted by Jeff Cornwall at 10:35 AM | Permalink | Comments (2)

I have had some requests for a copy of my speech at the Forbes Enterprise Awards this past Monday in New York. Here is the text of my remarks:

We are here today to honor a group of entrepreneurial small business owners for their individual successes. I am here to talk briefly about the economic revolution that they, and those who will be following them, are leading in the American economy. We are in the early stages of an entrepreneurially-based transformation of our economy the likes of which we have not seen in this country in over 100 years.

Thank you.

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

The Tennessean (our local Nashville paper) ran a story today about our Entrepreneurship program here at Belmont. They included a side-bar with some quotes from student entrepreneurs. I thought I'd share these quotes so you can see why I enjoy my job!

Why own your own business?

"I have nothing against working for someone else. I just find the idea of owning a business exciting as well as challenging. I would get to know and be involved in all the different elements on the business. I also think it would give me more freedom and allow me to be more creative in my career."
Sally Munns, manager of Reverb Media

"Having my own business is more fulfilling and meaningful to me. I want to be able to call the shots. Even though it's tedious, I want to be involved in every aspect of the business."
Emily Swinson, co-manager of Feedback Clothing Company

What's the biggest lesson this program has taught you about business?

"I would say that this program has taught me the importance of self-confidence. Entrepreneurs are salespeople, we not only sell our ideas and products, but we sell ourselves. If people do not believe me, they will not believe in my product."
Michelle Wilkerson, co-manager of Feedback Clothing Company

"Risk cannot always be eliminated, though it can be reduced and prevented. We pay close attention to where and how others have failed so that we don't follow their footsteps. We are dissecting case studies and looking at current events and trends. I'm working with cash flow in the classroom, and in practice for my business. My experience has allowed me to gain knowledge in the classroom, and feed that growth to my business, on a day-to-day basis. All of this while learning about the entire growth process, starting with exit planning. I recently heard an entrepreneur state that you cannot be largely successful in business life and in family life. What I've learned is that you can, if you plan for it."
Andy Tabar, sophomore, his business is Nashville Creative

Posted by Jeff Cornwall at 10:57 AM | Permalink | Comments (3)

I had the honor of giving an address in New York yesterday at the luncheon for the Forbes Enterprise Awards. Seeing the energy of hundreds of entrepreneurs and their families in one room is always invigorating for me. I shared my thoughts on the entrepreneurial economy and the role that the Entrepreneurial Generation will play in shaping its future for years to come.

Hats off to all of the winners!

Posted by Jeff Cornwall at 06:02 AM | Permalink

A countryman between two lawyers is like a fish between two cats.
(Benjamin Franklin)

Many small business owners will tell you that there are actually three things that are inevitable -- death, taxes........and lawsuits.

Kauffman's eVenturing explores the topic of litigation -- how to try and avoid it and how to deal with it when it happens. Stolen intellectual property, partnerships gone bad, and employees gone mad are all part of this important, albeit painful, collection of stories, how-to's and tools. And, yes, they even talk about when you should think about litigation....

Posted by Jeff Cornwall at 03:18 PM | Permalink

I had the pleasure of participating this past fall in a day long discussion conducted by the Institute for the Future on the future of small business. The first installment of the final report that began with that incredible day of dialogue has now been released. The Intuit Future of Small Business Report provides a fascinating look into the future of our entrepreneurial economy. I encourage anyone who is a small business owner, wants to be a small business owner, works in a small business, or does business with small businesses -- OK, basically everyone -- to read the full report.

The report begins with a discussion of three consecutive eras of transformation that have occurred in the US over the past 40 years -- the social transformation of the 1960s and 1970s, followed by the technological transformation of the 1980s and 1990s, and finally the entrepreneurial economic transformation that began around 2000 and is still underway. Each transformation played an important role in the subsequent one, and together they have fundamentally changed the culture and economy of the US.

Three trends that are shaping the future of small business are examined in the first installment of this report.

The Changing Face of Small Business

There are some distinct demographic patterns in the current entrepreneurial economic transformation. Two age groups are showing significantly higher entrepreneurial activity: the Entre-Boomers and the Generation Y, or what I call the Entrepreneurial Generation.

For the Boomers, entrepreneurship is a form of "un-retirement." According to this report, only 30% of Boomers mention financial needs as their primary reason to keep working. Personal fulfillment and longer production working lives seems to be a major drive behind their entrepreneurial propensity.

The Entrepreneurial Generation tends to reject the corporate world, favoring instead the independence and flexibility that an entrepreneurial career can create. Interestingly, they also tend to believe that an entrepreneurial career is more secure.

The changing face of small business is also reflecting more women entrepreneurs looking for the flexibility that business ownership can create -- mompreneurs, as some call them. It is also being shaped by a growth in immigrant entrepreneurs.

Just as in the last great entrepreneurial age of the late 1800s, immigrants are playing an important role in this economic transition. Many immigrant entrepreneurs are pursuing a global approach with their small business.

The Rise of Personal Business

There are now about 20 million "self-employed" Americans. These are small business without employees. The explosion of this segment of our economy comes from several causes.

1- The traditional employment contract is fading away for many professionals.

2- Many prefer the life of a "free agent", taking their skills from job to job.

3- People want more flexibility to create more work-life balance and see self-employment as the ticket to this change in lifestyle.

4- The accidental entrepreneurs, who did not plan to be self-employed, but come to that point through unplanned events in their lives.

The Emergence of Entrepreneurial Education

This trend is near and dear to this old professor's heart. The IFTF authors say that entrepreneurship education will continue to expand well beyond the 1,600 US universities now offering courses. They see more programs embracing not only the high growth entrepreneur, but also small business owners. More attention will be paid to undergraduate students seeking entrepreneurship education. Several schools, including us here at Belmont University, are seeing a growing number of new freshman coming to school with businesses already operating. Entrepreneurship education is also moving into the trade schools, community colleges, and adult education programs.

More younger children will be exposed to entrepreneurial careers in primary and secondary education. This will create a generation that when they enter the work force, will be much more attuned to careers built on entrepreneurship.

***********

Thanks to the folks at Intuit and at IFTF for allowing me to be a part of this exciting look into the future of small business. I look forward to seeing the future installments of this report.

Posted by Jeff Cornwall at 05:30 AM | Permalink | Comments (3)

There was another story on the growing trend of Entre-Boomers (Baby Boomers who become entrepreneurs late in their careers) in Business Week.

[M]any boomers--or those 78 million Americans born between 1946 and 1964--are leaving corporate jobs to start their own businesses. And it's not just because they're ready to retire; though some have the time and money to try life as an entrepreneur, many don't. They...are often worried about disturbing corporate trends like layoffs and pension cuts that are leaving many in their age bracket with a tough road through retirement.

"Baby boomers are looking at starting real businesses--looking for another 10- to 12- to 15-year career, God willing," says Paul Magelli, senior scholar-in-residence at the Kansas City (Mo.)-based Kauffman Foundation.

We are seeing an interesting trend with two distinct demographic bulges in entrepreneurial activity. The Entrepreneurial Generation, who are in their 20s, and the Entre-Boomers in their 50s and early 60s.

(Thanks to John Russell, a fellow Boomer and former graduate student of mine, for sending this along).

Posted by Jeff Cornwall at 07:33 AM | Permalink

Babson College has released a new Global Entrepreneurship Monitor Report. Entrepreneurial behavior continues to fuel the engine of innovation and growth around the world; and countries with the lowest levels of Gross Domestic Product (GDP) boast higher levels of start-up entrepreneurial activity according to the eighth annual Global Entrepreneurship Monitor (GEM).

Buoyed by a strengthening economy, U.S. entrepreneurs have created most of the 6.8 million new jobs in the nation since 2003. These entrepreneurs are young (under 35), educated (52% with one or more degrees), and continue to choose the entrepreneurial, opportunity-driven lifestyle over more stable -- and frequently -- more lucrative careers.

More U.S. Findings:

- 30% of new business start-ups offer more in terms of innovative products and services compared to established business owners. U.S. entrepreneurs are early-adopters too of current technologies; 32% of start-up companies use the latest compared to just 16% of established businesses.

- Start-up entrepreneurs are the most optimistic--20.1% expect to create more than ten jobs and 50% growth in five years compared to just 7.5% of established business owners.

- VC in the U.S. has leveled out to $22-$24 billion in the last three years--way off its 2000 peak of more than $100 billion--but is a five-fold increase over the level in the early 1990s. New Trends: VC has shifted from software to biotech and the wireless sector of telecom. IPOs remain in the doldrums.

Key Global Findings:

- An entrepreneurial boom exists in China and India. New business start-ups in China are up 16.2% from 13.7% last year; 60 % are opportunity-driven; 70% of the Chinese think entrepreneurship is a good career choice; and 32% expect to start a business in the next three years. Chinese governments and policies are most supportive--new funds, new incubators, science parks are all recent initiatives. Improvements in education, funding, and commercial infrastructure are still in demand.

- The scenario is similar in India where one in every ten is engaged in entrepreneurial activity, and the gender gap narrows in India. But India has the highest level of business exits (15%) among GEM nations in 2006. The communications infrastructure is excellent, yet governmental bureaucracy and the presence of 'big player' companies make it difficult for start-ups to establish themselves. Surprisingly, India is behind in developing new policies in support of entrepreneurs.

- Entrepreneurial activity rises in countries with low GDPs. Countries with similar levels of GDP tend to have similar entrepreneurial activity-- most likely because of the dominance of large businesses.

- Entrepreneurs everywhere are taking advantage of opportunities; still countries with the lowest GDP have the highest levels of necessity-driven entrepreneurs. France and Germany –where necessity entrepreneurship is high--are the exceptions, most likely because of labor reforms which encourage business start-ups over unemployment services.

- The number of new business start-ups is always higher than established business ownership. This is particularly the case in the U.S. where Early-stage entrepreneurship is high compared to Europe where established business ownership is similar.

- Low and middle income countries show higher levels of innovation and technology in Early-stage entrepreneurship than in established businesses. Still, these less-developed countries are not necessarily using technologies that would be considered new in more sophisticated consumer markets of higher income countries.

- Experience and Gender still matter--Early-stagers are young (24-25) and men are more likely to be entrepreneurially active. The exception is women from higher income countries who are less likely to be entrepreneurs than their lower income counterparts.

Here is a link to the full report.

Posted by Jeff Cornwall at 06:41 AM | Permalink | Comments (2)

Business Intelligence Lowdown just published "Lessons from the Lemonade Stand: 101 Common Sense Management Tips" at their website. Some great stuff here that all of us need to remember. After all, common sense is not very common....

Posted by Jeff Cornwall at 03:29 PM | Permalink

Although it does not technically start until sometime in February, 2007 is the Year of the Pig. Here are some quotes about pigs and the wisdom they offer for entrepreneurs.

Pigs and Business Ethics: I learned long ago never to wrestle with a pig. You get dirty, and besides, the pig likes it. (George Bernard Shaw).

The next time you are tempted to follow the lead of a less than scrupulous competitor, especially when it comes to an issue of ethics and your integrity, remember this saying. And also remember that if you you wrestle with too many pigs in the mud, you might start to like it as much as they do.

Pigs and Lawyers: Lawsuit n. A machine which you go into as a pig and come out of as a sausage. (Ambrose Bierce).

When it comes to legal issues, "an ounce of prevention is worth a pound of cure" (a quote than I believe is attributed to Henry de Bracton). Avoiding litigation is never completely possible, but there are some common sense ways to avoid becoming someones sausage. Develop a strong shareholder agreement before you start your business. Continue to develop your personnel systems, and spend a little money on an employment attorney along the way to improve your litigation protection. Develop strong contracts with your attorney. Be honest and always do what you promise to do.

Pigs and Taking the Entrepreneurial Plunge: The difference between 'involvement' and 'commitment' is like an eggs-and-ham breakfast: the chicken was 'involved' - the pig was 'committed' (anon.).

I see too many new entrepreneurs, especially older ones, try to find the easy transition from a job to becoming an entrepreneur. In the world of entrepreneurship, at some time you have to accept that you are like the pig when it comes to breakfast!

Pigs and Finding Opportunities: One has a nose. The nose scents and it chooses. An artist is simply a kind of pig snouting truffles. (Igor Stravinsky).

Most good business opportunities are right there under you nose....

Pigs and Fame: Fame is like a shaved pig with a greased tail, and it is only after it has slipped through the hands of some thousands, that some fellow, by mere chance, holds on to it! (Davy Crockett).

Although it is often unspoken, many entrepreneurs seek fame as one of their goals Be careful what you pray for -- fame often comes for the wrong reason, and your fame can soon turn into infamy. Also, the better known you become, the more competitors you will attract.

Pigs and Exit Planning: You can't fatten the pig on market day. (John Howard).

Building value in your business is a long-term process that takes consistent commitment. There is no magic that can make your business more valuable at the time you are ready to move on. You build a little bit of value every day over many years of hard work.

Happy New Year! As my father likes to say: Pigs get fat and hogs get slaughtered. In 2007, be the pig!

Posted by Jeff Cornwall at 07:05 AM | Permalink | Comments (5)

eVenturing has put together a summary of the various collections they have put together this year. Each collection offers how-to's, stories and tools on a topic area critical to entrepreneurs. They are building a site that can serve as an on-line resource library for entrepreneurs with businesses at all stages of development. Thanks to the Kauffman Foundation for supporting this project.

Posted by Jeff Cornwall at 07:50 AM | Permalink

National Dialogue on Entrepreneurship has posted its "Holiday Books Issue." Several good selections recommended this year. My favorites from their list this year include:

The Entrepreneurial Imperative: How America's Economic Miracle Will Reshape the World -- And Change Your Life

Economic Turbulence: Is a Volatile Economy Good for America?

Purpose: The Starting Point of Great Companies

Posted by Jeff Cornwall at 10:26 AM | Permalink

Roger (not sure where Roger is from) e-mailed me about the age old question: are entrepreneurs born or made? As Roger said in his e-mail:

I am one of those that believe it's impossible to teach anybody how to become an entrepreneur because I believe that they are born and not made.

Although I have addressed this issue before, let me try a new angle. My answer is: neither.

First, although I continue to make this mistake, we should avoid using entrepreneur the noun in such discussions. I have written about the risks of viewing any career as a noun in an earlier post. By describing someone simply by what they do for a living misses so much about who they are as a person. I think this might be part of the problem with this on-going debate of nature versus nurture in the context of entrepreneurship.

Entrepreneurship is not in our genes. People come to pursue entrepreneurship by their life experience. For some of us it comes from our family upbringing. I caught the bug at an early age by being involved in family businesses (thanks Dad!). For others, entrepreneurship is the result of some career crisis -- often this means getting fired. Unemployment can be a powerful motivator. Pursuing entrepreneurship may be the logical way out of a frustrating career. Maybe they finally realize they hate their job, don't belong in a cubicle any longer, are sick of "working for the man," etc., etc. You get the scenario. For others, entrepreneurship comes out of an insatiable desire to pursue interests and passions in life. Self employed musicians or artists are great examples of this type.

Another factor that we cannot ignore is the role of our culture. As we see in so many studies, the culture in which we live is a powerful force creating start-ups and fueling entrepreneurial economies.

Entrepreneurship is much more passion than personality. We are not born with passion. It comes from our experiences -- our family, our work, our hobbies, the people around us, the gifts we have been given, and our culture.

But even though they are not born, I cannot make someone choose this path in life, or even inspire someone to pursue a career in entrepreneurship who is not already headed that way. The fire has to be in their belly. Once in a while I have to stoke that fire, or help them see that the fire is there. And when they feel that fire, my job is to help them have a better chance for success. By learning about the process of properly defining and aligning the opportunity, securing the necessary resources, planning the venture, and managing growth effectively, we can increase their chance of financial success by an average of about 50%.

Entrepreneurs are formed -- not born or made. Oh, drat! I made it all the way to the end before I used that pesky noun again! Let me try it one more time. Entrepreneurship is a career that comes out of our life experiences, and with some education, we can improve the success rates of those who start-up new ventures. Not quite as pithy, but hopefully your get the point.

Posted by Jeff Cornwall at 06:54 PM | Permalink | Comments (1)

When we first installed e-mail in our company in the early 1990s, I had to "pull the plug" on the system after just a few months. People were sending incredibly caustic messages, writing things in their messages that they would never say face-to-face. It was a new form of communication, and we had to take the time to train people on how to use it and how to be polite and courteous when communicating via this new medium before "turning it back on."

Fifteen years later it seems that people still don't have a clue on the effective use of e-mail communication. Web Worker Daily offered a wonderful tongue in cheek post on negotiating via e-mail that illustrates how little progress has been made.

In the new world of web work, you might find yourself negotiating by email over a job or project. Most of us know how to screw up phone or face-to-face discussions. Scotching plans by email requires a completely new approach.

Remember that email is asynchronous, impersonal, and only seemingly private. Use these characteristics to best advantage and you'll never have to deal with a pesky email-negotiated business deal again.

It would be even more funny if it weren't so true!!

(Thanks to Ben Cunningham for passing this along).

Posted by Jeff Cornwall at 09:02 AM | Permalink | Comments (1)

"Don't count your chickens until they're hatched."

"There is many a slip between the cup and the lip."

The wisdom of these says came home to me last evening. My wife and I went to watch the Belmont men's basketball team play down the road at Middle Tennessee State University. After leading for most of the game, Belmont lost to MTSU as our team's offense went cold. When we got home our beloved Green Bay Packers were playing on Monday Night Football. They were up 21 - 12 in the third quarter. But then, Seattle scored a touchdown -- and then another. That victory that had already played out in our minds, was also taken away from us.

The lessons here should be taken to heart by any entrepreneur. I can remember so many times when I was active in business letting my mind run ahead of where we actually were. So many big contracts that I was sure we would secure, never came to pass. And countless business deals that were "sure things' didn't turn out the way we thought they would. And when we first began talking with folks about selling our business, how many times I began to imagine what I would do with all the money we assumed we would be getting, only to have the deal go bad.

As I've said many times before, entrepreneurship is so much like playing golf. You birdie the first hole and begin thinking you are going to play a great round, only to score a 8 on the next hole. Or you follow a 39 on the front nine with a 52 on the back. (Both of these examples come from my personal memories,,,), One great shot never seems to determine the match, but one bad one can.

"That's why we play 18 holes."

Just because you score a victory today against your competition does not mean that you will have continued success tomorrow. Keep yourself grounded. Talk about a deal does not guarantee a final contract. Encouraging words from a customer does not always mean a sale.

"Keep your mind in the present."

Why are there so many sayings that relate to this same message? Because for many of us, it is human nature to be optimistic. And although optimism is a good trait to have when you are an entrepreneur, that same optimism can lead you to "get ahead of yourself." Although these thoughts are impossible to avoid, we must be diligent to never act on them carelessly. I have seen too many business owners commit to expenses for a contract that never gets signed. Or they start spending money assuming their business is about to sell, only to have that final deal not come to pass.

Remember....

"It isn't over until the fat lady sings."

Posted by Jeff Cornwall at 05:18 AM | Permalink | Comments (3)

In a study released by American Express last month, there was some interesting survey results related to technology that seemed to get overlooked (healthcare and taxes were the headline issues from this survey).

A majority of small business owners (51%) believe that "technology has transformed the way business is conducted" over the last 20 years, according to the OPEN from American Express Semi-annual Small Business
Monitor.

About 40% of small business owners plan on some form of technology investment over the next six months. What is interesting is that much of this investment is for what can be considered the standard workhorse technology for business (desktop computers, laptops, printers, phone systems, and software. This level of investment seems consistent with a growing optimism among small business owners.

Interestingly, a fairly small percentage (12%) were planning on buying the newer generations gadgets, such as PDAs and "smart phones." This is not surprising to me, as small business owners tend to lag in adopting new technology. Most seem to have a "show-me" mentality. Technology has to have a clear return on investment, as those are dollars that could be spent on creating more sales or simply put in the owners pockets as profits. (Thus, by stubborn resistance to the fax machine in the 1980s).

Only 13% of owners/managers read blogs relating to their business and less than one in ten maintain blogs for their business (7%). Again, unless they find clear value-added, they are slow to adopt.

Posted by Jeff Cornwall at 06:41 AM | Permalink | Comments (2)

When I talk to colleagues who teach Entrepreneurship outside the US, or look at a text on Entrepreneurship written specifically for a foreign market, I am often struck by how differently they have to approach the topic. Much of their time is spent trying to create more entrepreneurs. The entrepreneurial spirit is not endemic to their culture. They try to find ways to entice and cajole people into entrepreneurial endeavors.

A recently released study from the Global Entrepreneurship Monitor reinforces this observation. Unlike the US where we see a tremendous increase in young entrepreneurs including more and more young women, young women (18-24) in the UK are actually less likely to have entrepreneurial aspirations than other age groups. Given the trend toward a more entrepreneurially based world economy, this will prove to be a major barrier to future economic growth in cultures and societies that do not foster the entrepreneurial spirit.

Posted by Jeff Cornwall at 06:07 PM | Permalink | Comments (3)

In case you don't follow college football, there is an amazing story building this season. Rutgers University, a team that for years and years was lucky to win a few games, is undefeated and knocking at the door of a national championship. OK, the odds of the championship are a long-shot at best, but from someone teaching at a small Division I school, this kind of story warms my heart.

It seems that Rutger's success is also warming the bank account of at least one small business owner in New Brunswick, New Jersey. From the Philedelphia Inquirer:

Yesterday afternoon, fans hungry for Scarlet Knights merchandise packed into Scarlet Fever, a popular shop on Somerset Street, where owner Steve Ostergren juggled two ringing phones. The store, teeming with jerseys and sweatshirts and flags, had bare patches where customers had grabbed up gear as fast as workers could unpack it.

"This is the busiest we've been in 18 years," Ostergren said. "It's unbelievable."

Ostergren, a Rutgers alumnus, was thrilled.

So is Ostergren trying to profiteer from the sudden surge in demand for all things that are red and have a big "R" on them? Not in the least. In fact, in an interview with Wall Street Journal Radio this morning he said that he had not only kept his prices in line, but had actually added large quantities of a couple of tee shirts for students that are priced at only $5.

He knows that it is these same customers who will keep him in business in the years to come -- even if the football team falls back into its losing ways. If he treats his customers fairly now, they will remember him later.

By the way -- don't even bother to try and buy anything from Ostergren's web site. His store is so busy that he has temporarily suspended sales via the web.

Posted by Jeff Cornwall at 05:14 AM | Permalink | Comments (1)

Small business owners have improved expectations for economic growth and a need to add to inventories according to the latest National Federation of Independent Business Optimism Index. Five of the 10 components of the index improved, led by a nine-point hike among those who said they expect a better economy in the coming months.

Seasonally adjusted, small firms produced solid growth in October, with 14 percent increasing average employment by 3.1 workers per firm, while 9 percent trimmed workforces by an average 3.5 employees. Fifty-five percent hired, or tried to hire, one or more workers. Twenty-seven percent reported unfilled job openings, another sign of tight labor markets. More than eight in 10 could find few or no qualified applicants for unfilled positions.

The top business problem for 15 percent of those responding was the availability of qualified labor, up another point and the highest reading since 2001. Normally, tight labor markets could renew concerns over wage driven inflation in the months to come if continues. However, the net-percent of firms raising average selling prices fell four points to 16 percent, seasonally adjusted. Since April, the net-percent raising average selling prices has declined 10 points. So far, small businesses have had to absorb their labor challenges and not pass them along in higher prices.

"Price pressures are fading, and it's not just the construction sector that is bringing the pressures down," said NFIB Chief Economist William Dunkelberg, "retail inflation is easing as well."

The net-percent reporting earnings improvements lost six points from September, falling to the average for the year, no surprise in view of weaker reports of sales gains and a decline in the frequency of price hikes. A net 23 percent increased worker compensation, down five points from September.

Inventories, sales forecasts, and capital spending all remain strong. One-fifth of the owners surveyed said they believe the current period is a good time to expand facilities, up seven points from August. A net 11 percent expect business conditions to improve over the next six months, a 19-point gain over August. Owners are confident that the economy will continue to perform well in 2007.

Posted by Jeff Cornwall at 05:53 AM | Permalink

Since we got ourselves solidly back on the road to socialism on Tuesday, I thought it somehow appropriate to take a little peak at how entrepreneurship is doing in the People's Republic of China. From yesterday's ChinaDaily:

Successful entrepreneurs have surpassed pop stars as college students' idols, a recent Fudan University survey has found.

In the survey, which sampled 150 students from different grades and departments in September and October, 96 chose successful entrepreneurs as their idols, 91 added scientists and scholars to the list, while only some 75 opted for stars of stage and screen.

The results toppled the old perception that young college students are most impressed by the stars of shows such as Supergirl Competition.

Considering the extraordinary lengths many student fans go to to generate support for TV talent show stars, such as parading in the street with placards promoting their favourites, the results come as a surprise.

Maybe there is still hope......

(thanks to Ben Cunningham for passing this along)

Posted by Jeff Cornwall at 05:47 AM | Permalink

I love to see free markets working at their best.

The big shipping companies, recognizing that we are moving further into an entrepreneurially-based economy, are finding creative ways to attract small businesses. From the Comumbus Dispatch:

FedEx has quietly become the nation's second-largest producer of signs and banners, and it's about to unveil a service aimed at helping entrepreneurs get into the direct-mail-marketing industry. DHL has begun a smallbusiness magazine and is funding micro-enterprise efforts....And UPS has become one of the top providers of Small Business Administration-backed loans in the country.

A big part of their move into retail operations, FedEx with their Kinko's acquisition and UPS with their Mailboxes, Etc. acquisition, was to position their businesses to capture the exploding small business segment in the economy.

Posted by Jeff Cornwall at 05:58 AM | Permalink

We had the pleasure of welcoming Clint Smith, who is co-founder of an e-mail marketing business called Emma, to one of my classes this week. Just four years old, this Nashville-based business has had impressive growth. At first glance it would seem that they must have built their growth using their own systems -- that is, through e-mail marketing. However, this is not the case, as their system is based on permission -- it is not a spam model. Their system is designed to take contacts that a business already has, and develop a customized system to communicate with them through e-mail. Therefore, as Emma is a new business, they did not have existing businesses to e-mail to. Therein was their challenge.

The approach Clint and his co-founder Will Weaver took to marketing was efficient (like any good bootstrapper strives for) and personal. Clint refers to the personal part of their approach as "karma marketing." They also clearly understood their target market, and designed all of their efforts toward reaching those clients.

The founders of Emma defined their customers from the very beginning as small business and non-profits for which "style" matters. They targeted specific types of business that fit their profile, such as design agencies, non-profits, artists, music venues, universities, and "cool stores and hangouts." And they targeted cities where they believe that style matters.

They filled their message with wit and humor, and made it have a personal feel. Here is an example from Emma's website from one of the profiles of a staff member (and former student of mine):

Sara works with small businesses who've expressed interest in using Emma to help interact with their customers or members. "We're interested," they may have said, sometimes adding an exclamation point on the end for emphasis. And so Sara gives them a tour, often regaling them with tales of Nebraska along the way. Did you know they have a replica of Stonehenge made out of cars? Carhenge. Kid you not. Sara wields a degree in Music Business and Marketing from Belmont University, where she was a member of the (nationally ranked) Belmont Speech and Debate Team and the Belmont Service Corp and the Student Advisory Board and president of her student council in high school. It really is amazing what you can learn about people when you actually read all the way to bottom of their resumes.

Surprisingly, they use very traditional print media for much of their own marketing efforts. They send out postcards to targeted businesses and they use print ads in alternative weekly newspapers. They do some advertising on local public radio stations, as this is the best outlet for their target customer profile. They also go to their target cities and set up events and "chats" at popular local watering holes, inviting existing customers and prospects.

Emma builds good "karma" with existing customers with techniques that are simple, personal and powerful, building strong customer loyalty along the way. Here are some of their tools:

- Visa gift cards (with the Emma logo on it) for referrals, sent in hand written thank you notes
- Free Emma tee shirts for any customer who asks for one
- Discounts for anyone who takes Emma with them to a new employer (called "friendly discounts")
- Sponsorship for selected customer events

They also have a program called "Emma Twenty-five". Each year they ask existing customers to nominate non-profits that need Emma's system, but cannot afford to pay for it. Emma picks the twenty-five most worthy and gives all of them free e-mail marketing services to keep in touch with their contact base -- and they get this for free for as long as they need it.

Why is Emma so successful? They know who their customers are and how best to reach them. Once Emma has them as clients, they find as many ways as they can to make them feel good about working with Emma -- they focus on building loyalty through building "good karma" about Emma as a service and as a company. And they work hard and have fun doing it. A good formula for any small business trying to grow.

Posted by Jeff Cornwall at 06:05 AM | Permalink

The Internet can be a scary place. And that is not just the Luddite in me talking. And no matter how hard we try to stop them, the bad guys seem to keep one step ahead of us. Take for example phishing. Phishing is a variety of tactics to fool people into giving up personal information that allows the bad guys to steal our money and/or our identity. If often starts with a fake e-mail from a bank or from eBay. At first, these attempts were rather clumsy. But because they worked enough of the time, the bad guys improved their techniques to fool even more unsuspecting folks. Remember, if this stuff does not work, they wouldn't keep trying.

The accounting firm Kraft CPAs offers some assistance in sorting this all out. If you have received e-mails that really look like they are from your bank or eBay they offer advice on how to protect yourself and your small business:

Spoofed emails are a method used by scammers and hackers in an effort to obtain personal information from unsuspecting individuals and is commonly known as "phishing." The scam artist crafts an email that appears to originate from a popular and legitimate company to entice the end user to reveal information such as passwords, credit card numbers, social security numbers or other types of personal data.

Even though the example email above appears to originate from member@eBay.com, it actually did not originate from eBay. The sending address can be modified, or spoofed, easily by the sender. Also, the link the scammer wants you to click is embedded in the "Respond Now" button and leads to a website that appears to be eBay, but is actually a site intended to gather your eBay logon information. Just as the sender's email address, the links embedded in the email are easily spoofed, too.

So how do I recognize a spoofed email?

An email stating the company is updating customers' account information is a common ploy. Always be suspicious of emails soliciting personal information. Reputable companies such as eBay will not request personal information from their customers by asking the user to click a link in an email. Your best bet is to ignore them altogether. If you believe the email may be legitimate, make a phone call to the vendor (using a number you know to be genuine) and ask for verification of the validity of the email.

How do I protect myself?

As mentioned previously, ignoring emails requesting personal information is best practice. Other measures you can take to protect yourself and your computer system are:

- Never email personal or financial information.
- Install anti-virus and anti-spyware software, keep them up-to-date, and perform regular scans.
- Install a personal firewall.
- If an email claiming to be from a financial institution is requesting personal information, report it to the financial institution.
- Always err on the side of caution. If a company needs any information from you for a legitimate purpose, they will find you.
- Utilize an email filtering system.

Kraft also recommends these sites as sources for useful information email protection.

www.us-cert.gov
www.antiphishing.org
www.nist.org
www.trendmicro.com/en/security/phishing

(The information from Kraft CPAs was used with permission).

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

The latest collection of articles and how-to's from eVenturing is one that sends a slight chill down my spine. As can be seen by this quote from a previous post, I am a bit of a Luddite:

I used to get teased by my managers, bankers, lawyers, and CPAs about how long I would drag my feet on new technologies. They complained that we were among the last businesses to buy a fax machine (OK, I am dating myself a bit here) and PC work stations. Everybody else had voice mail and e-mail long before we did, so they claimed.

Quite honestly, I was as much concerned about throwing money at new technology that did not deliver or would become obsolete before we even got it fully implemented as I was fearful of new technologies. For small business, cash is tight and we cannot afford to make bad decisions on expensive technology. It really needs to pay for itself through improved performance and/or efficiency. This collection from eVenturing offers some useful information to avoid making costly technology choices that just don't deliver a return on investment.

Posted by Jeff Cornwall at 12:16 PM | Permalink | Comments (1)

The most recent data from the SBA shows that small business is still driving the economy, employing 50.6% of the entire US workforce. The SBA also has a web page that allows you to really dig into the small business statistics from varying sources, looking at industry sectors, number of firms by size (revenues and employment), birth and death rates of small business, and so forth. It also has data by state and metro areas. If you are into data, this is a fascinating site.