Belmont Entrepreneurial Showcase: February 2005 Archives

Sova Catering is a family owned business serving the Nashville, Tennessee area. Sova specializes in Kosher Cuisine and provides a wide variety of services, including full service catering, cooking classes, private dinners, Bar/Bat Mitzvahs, and weddings.

Kevin Alexandroni, Founder and Executive Chef, was Kosher trained in Israel and is a graduate of the Culinary Institute of America. Kevin graduated from Belmont in 2004. He was the inaugural recipient of the Union Planters Outstanding Belmont Student Entrepreneur during his final semester of study.

Since Kevin's graduation, Sova Catering has continued to grow. His wife, Theresa, recently left her job to become a full-time employee of Sova. Sova has hired two additional full-time and three part-time employees. They have opened a cafe at the Gordon Jewish Community Center in Nashville to showcase for their product and services.

"In honesty, I must say that I did not set out to start a kosher catering company," said Kevin about the start-up of Sova. "Initially I was trying to make some extra money while a finished my degree. However, it became clear that there was a demand for another kosher caterer in town. The actual creation of the company coincided with my participation in an entrepreneurship course at Belmont University. It was while taking that class, and working on another similar project, that we realized that SOVA was a feasible enterprise, catering (no pun intended) to a defined niche market."

Kevin and Theresa faced many of the typical challenges faced by many entrepreneurs. For example, they planned to bootstrap their business start-up. When trying to hire the right professionals, such as an accountant and an attorney, they found that many billed start-up entrepreneurs at their full rates and billed "by the hour" for even the simplest questions. They did not have the cash to pay professionals who would bill them using these common standards.

"Another set of challenges we faced was to try and understand the huge volume of regulations that different authorities required our business," said Kevin. "Federal, state and county governments all host an unbelievable amount of requirements on a new business. Business taxes, sales taxes, franchise fees, licenses, health department inspections, federal tax ID, tax exemption certificates, unemployment, payroll tax, Medicare, social security, insurance, disability insurance, and more. This does not leave much time to start a business. And you really can't make any mistakes by not addressing all of these requirements."

Kevin and Theresa plan to continue to explore ways to expand the services offered by Sova Catering, including a meal replacement program, a retail outlet, and a summer pool concession. They also hope to find ways to broaden their base of customers.

Linden Manor is a Nashville Bed and Breakfast located in the heart of Nashville, Tennessee. Linden Manor Bed & Breakfast is only blocks from Vanderbilt and Belmont Universities and Music Row. Catherine and Tom Favreau (Tom was class of 2003, Belmont MBA) established their business in a Victorian home that was originally built in 1893. Linden Manor B&B has been completely renovated and offers modern amenities.

Linden Manor Bed and Breakfast had been a dream of Catherine's for thirteen years. Catherine was a trailing military wife of Tom, who was in the United State Coast Guard. Upon Catherine and Tom's first B&B visit, Catherine fell in love with the B&B concept and announced to Tom the next morning that she, one day, would own her own B&B. Catherine and Tom were both business majors in college and often disused owning their own business. Tom and Catherine moved every two years with the Coast Guard and knew it was not feasible to own a B&B until retirement.

During those years, Tom and Catherine studied and researched the B&B industry. They attended conferences and seminars, as well as read B&B business journals and books on the subject. Tom was medically discharged from the Coast Guard earlier then expected and, when deciding what their further would be, there was no question what Catherine wanted to do. She had waited thirteen years for this opportunity and thus Linden Manor Bed and Breakfast was born.

One of the biggest challenges Catherine and Tom have faced with Linden Manor is the City of Nashville's zoning regulation limiting operations to three guest rooms. Linden Manor has the demand to fill 5 to 7 rooms with an occupancy rate of 70% but because of zoning it is only allowed to operate three rooms, which limits revenues and profitability. It is unheard of in the B&B industry, according to the Professional Association of Innkeepers International (Paii), for a three room B&B to be profitable. Linden Manor is running profitably on three rooms, but it is a constant struggle.

Catherine and Tom could not have anticipated how 9-11 would change the B&B industry, which is now struggling with an insurance crisis. Linden Manor's insurance rates have risen at a rate of 50% per year since 9-11. There is only one insurance company, known to the B&B community, which insures B&B's. As a monopoly, this insurance company is able to charge inflated rates. The challenge, perhaps the largest challenge in six years of operation, was to find an alternative insurance source with a more competitive rate in order to control costs and remain profitable.

After months of research and many phone calls, Catherine was able to secure commercial B&B insurance from another company at a much more competitive rate. Catherine believes that this relief in insurance rates may be only short-term, and is very concerned about another increase in premiums next year.

Catherine understands that she must continue to change, proactively, as the industry evolves. Her most important goal is to work with the city to change the B&B overlay that limits operations to three guest rooms and see if they will increase the limit to five rooms. She is in the process of working with her council person on changing the overlay and has the cooperation and support from other B&B's in the Nashville area.

Linden Manor shows us how small business owners must understand the macro forces that shape their industry, sometimes quite unpredictably and with very little warning. And even a small venture like Linden Manor can try to proactively have an impact on their environment, as seen by Catherine's efforts to secure more affordable insurance and to change local regulations that have an adverse impact on their business.

Submerge Media is an example of the new breed of music business entrepreneurs who are finding success in the shadow of struggling industry giants.

"Submerge Media is a full-service media company that strives to be an all inclusive media provider for its clients by offering what an in-house creative service department would offer. By integrating a consistent design throughout each medium, Submerge provides their clients professional, recognizable, and unique branding."

Craig Countryman (video), Josh Davis (audio), and Chip Hayner (graphic and web design) had all been active as independent contractors in the music industry in Nashville while students at Belmont University. While in school they had gained respect for each other's work and had, from time to time, referred clients to each other. Their original plan was to develop a referral system to support each other as they became established in the industry. But, they began to believe that a company that could integrate audio, video and design services from a single source would be able to offer the music industry the same consistency as when these services had been performed in-house before the recent cutbacks in the music industry.

By bringing audio, video and web-based graphics together in one company, they intended to stand out from the large number of independent contractors working on Music Row in Nashville. They would be able to provide a single "look" to a client's entire media package and eliminate the hassle of coordinating the various components that comprise the entire music "product."

Craig, Josh and Chip graduated from Belmont University in May of 2004 and on June 1, 2004 Submerge Media was officially formed as an S-Corporation. The three founders had something else in common beyond their passion for the music industry. All three wanted to build a business that reflected their Christian faith in the work that they performed for each client and they are growing and building their business with a culture that was based on their shared values. However, they do not want to limit their customer base by specializing in the Christian segment of the industry music. They work in all music genres, while keeping true to their Christian faith.

Since all three of them were initially working out of their homes, one of the biggest challenges they faced was communication and coordination of their work. They met face-to-face every Monday and had daily contact by phone, email and text messaging to schedule jobs and discuss business issues. A local coffee house served as their favorite meeting place.

But, increasingly they recognized the need to move into a shared office space. Although these working arrangements had kept their overhead low, it was beginning to create personal strains for each of them and was creating noticeable inefficiencies in their work together. While billable hours were critical for creating cash flow, they also needed time to work on the business. They found that these two demands were often in conflict.

So, in January of 2005 Submerge Media moved into common space that includes a studio for audio production. By finding space away from Music Row (the heart of the industry in Nashville), they were able to stay within their budget. And, by combining a small SBA loan and careful attention to bootstrapping to equip and furnish their new space, they could offer the level of quality that their clients expect from them.

Since moving into their new space, Submerge Media has experienced continued growth in sales and improved operating efficiencies. They seem to have discovered a balance between the need every start-up has to keep overhead low, while at the same time assuring that they have the tools and space they need to be a quality player in the Nashville music industry.

"Entrepreneurial Showcase" is a new feature of this site, in which we will take a closer look at some of the entrepreneurial ventures founded by Belmont alumni and students.

The first Belmont entrepreneur to be showcased is Charles Hagood (MBA, 1993) who with his partner Mike Brown, founded The Access Group (TAG) in 1996. TAG specializes in lean manufacturing consulting, plant relocation, engineering services, industrial engineering, architecture and design, and maintenance reliability services.

After completing an MBA in 1993, Charles Hagood was still working as an industrial engineer in the aerospace industry. He had just been promoted to program manager of his company's largest project, the V-22 Osprey Aircraft, becoming the youngest program manager in the company's history of a military program. But even with this success, Charles began to realize that he did not want to work for a company for the rest of his life. What he really wanted was to work for himself.

So Charles soon left his employer and began work on his business plan. Mike Brown, who had been his supervisor, shared a similar entrepreneurial aspiration and eventually joined Charles as a co-founder of TAG.

Obtaining the first client in a consulting business proved to be a significant challenge, as they had nothing tangible to show potential clients. During their initial start-up, they decided to save as much of their precious self-funded working capital as possible. They decided to work out of Mike's basement and garage, with their PCs set up on folding tables they had purchased at Sam's Club. Charles joked that "Mike's Chihuahua became our Vice President of Security," as he announced the arrival of each UPS, mail delivery or visitor to their "corporate headquarters." Hagood added, "We were broke but were having a blast. We were never worried that we'd make it. The question was when."

Over the next several years TAG did become a successful venture, expanding their services and growing their staff. They never gave up their bootstrapping mentality, focusing on organic growth with very little use of outside funding.

TAG was named a Music City Future 50 company in 2001 and 2003, Chamber Business of the Year, and ranked the 15th fastest growing company in the mid-south by Nashville Business Magazine during this time.

An important part of the mission of TAG for Charles and Mike, is to not only make their lives better through the success of the business, but the lives of those around them better by giving back. Church sponsored mission trips are a regular occurrence for TAG employees and their families. TAG pays for the expenses related to these church sponsored mission projects for all employees and in some cases their family members. TAG employees and family members have participated in three to four mission trips a year around the world, including Asia, Africa, and the Appalachian region of the U.S.

Charles is currently moving TAG beyond its traditional focus on manufacturing with the formation of an affiliate business Healthcare Performance Partners. This new company focuses on helping health care companies apply lean techniques to their work environments.