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I have been observing more and more business owners who, although their businesses have survived the economic downturn, seem to be losing heart.

The stress and strain caused by these difficult times has worn on them. But doing business in today's economy requires a steady hand, a sharp eye and most of all -- a calm mind. There are four steps that can be taken to help to cope with the emotional toll of being an entrepreneur in difficult times.

First, adjust your expectations. The growth in revenues and profits that you experienced during the good times may not return for quite some time, if ever.

Don't burden your business with unrealistic profit goals. It is time to reset your personal budgets to reflect the new reality of what your business can generate for you in terms of income. Also, be patient and understand that it will probably take longer for you to get to retirement.

Creating wealth from your business will be a longer process that will take careful management and planning.

Second, celebrate each small step forward. Set short-term, realistic milestones for your business. What can you get done this week, this month, to make modest improvements in the performance of your business?

While you still may have big dreams for your business, take the time to enjoy the smaller accomplishments. For over time, it is those small victories that will lead to achieving your long-term goals.

Third, focus on the things that really matter. There is so much more to your life than your business. Work hard at being a good spouse. Strive to become a better parent.

Pay attention to your friends. Be a good citizen in your community. These are the things that ultimately define who you are as a person, not how big you can grow your business.

Finally, let go of the things outside your control. Even under the best of times, entrepreneurs who have been well trained in what it takes to start and grow a successful business still face about a 20 percent failure rate. Failure comes from many things that you cannot predict or plan for. Call it uncertainty, call it risk, or call it plain old bad luck.

The reality of 2010 is that entrepreneurs face much tougher odds. Nationally, the prolonged recession has led to skyrocketing business failure rates. And Nashville small-business owners face the added pressures created by the recent floods. For years, I have put a prayer on the syllabus for every entrepreneurship class I teach. It reads:

"God, grant me the serenity to accept the things I cannot change,
the courage to change the things I can,
and the wisdom to know the difference."

It is known by many as the "Serenity Prayer," but I like to call it the "Entrepreneur's Prayer" as it helps entrepreneurs remember that the best course is to focus on those things that they can control.

While times may be tough, it's still possible to truly enjoy the entrepreneurial journey.

(This post ran as a column this week in the Tennessean).

A new survey of 511 entrepreneurs with 2-100 employees from SnagAJob.com offers some interesting insights into the journey of entrepreneurship.  Almost two-thirds (63%) say that starting their own business has been more personally fulfilling than they ever thought it would be. 

Among the primary reasons they cited for becoming entrepreneurs -- 91% said "being their own boss" was a top motivating factor and 72% said earning a higher income was an important driving force.

The results from this survey suggest that growth brings financial rewards.  Even in these challenging economic times 40% of small business owners with 11 to 100 employees say starting a small business has been more financially rewarding than they expected, compared to only 21% of those entrepreneurs with 10 or fewer employees.

But, growth comes with a personal cost.  Small business owners with 11 to 100 employees report spending an average of 69 hours a week working on and in their business, versus 58 hours a week at smaller firms.  Most of the entrepreneurs surveyed reported running their business was more difficult than they had imagined before starting the venture.

Think you want to join these folks in being your own boss?  While I am generally not a big fan of "entrepreneurship quizzes", Belmont alum Joe Ormont passed along a quiz from bnet.com that actually captures important aspects of entrepreneurial thinking.  You can take the quiz here.

I am here in Louisville with twenty-eight of our Belmont students at the annual International Career Development Conference of the collegiate division of DECA, Delta Epsilon Chi.

Interest in entrepreneurship continues to be strong at this conference.  I was amazed to see the high level of interest this year in the conference-long event called the Entrepreneurship Challenge.

Each year the students participating in this event are given a specific prompt and told to develop a new business that takes advantage of the issue in the prompt.  Here is this year's challenge:

"The Challenge is simple--create a business concept that capitalizes on the new Louisville Downtown Arena currently being built right next to the Galt House Hotel. NOTE: Your business concept, whether it's a product or service, may not be "located" inside the arena itself."

The student teams will be making their initial pitches this afternoon in a speed dating style format developed by my friend George Solomon from George Washington University. 

The top teams from the preliminary rounds will then refine their pitches for the finals tomorrow.

The entrepreneurial energy and the optimism of these students is motivational to all of us involved with the event.

Let me share a little entrepreneurial inspiration with all of you this morning.  Ben Cunningham sent along a video that was posted at Club for Growth that brought a smile to my face this early morning:

Sam's Club is a regular stop for many small business owners. 

Sam's Club has launched a new program called Giving Made Simple that should be near and dear to many entrepreneurs.  The program supports education and entrepreneurship, as Sam's Club believes they are essential to the growth of our economy and communities. 

Giving Made Simple is a online voting campaign that allows Sam's Club members and associates to determine how Sam's Club will distribute $4 million in charitable contributions to eight selected nonprofit organizations dedicated to youth education and entrepreneurship.

The organizations that were selected to participate in this program are Kiva, Community Reinvestment Fund, USA (CRF USA), Corporation for Enterprise Development (CFED), Accion USA, Junior Achievement, YMCA, Girls, Inc. and Network for Teaching Entrepreneurship (NFTE).

Sam's Club members and associates can log onto http://www.samsclub.com/giving, and vote for the non-profit organization they would like to see win the largest donation.

The latest semi-annual survey American Express OPEN Small Business Monitor was released today.  Overall, the mood of small business owners is not good.  Fewer entrepreneurs see the economy improving with expanding opportunities for their business when compared to the findings of six months ago (18% vs. 26% last fall). 

A couple of the specific findings show some modest improvements over the past six months:
 

• Nearly half of small business owners (48%) plan to make capital investments in their businesses, nearing spring 2008 levels (53%) when investment plans began their steady decline;
• More than one-quarter have plans to hire (28%), up from the historically low twenty three percent in fall 2009;

One bright spot on the subject of sentiment is among younger entrepreneurs, 72% of whom are optimistic about their business prospects and the economy.  This is consistent with other findings I have reported on and with our own observations as entrepreneurship educators.

The SBA Office of Advocacy released two reports today related to retirement planing in small businesses.

The first report,written by SBA economist Jules Lichtenstein, looks at planning by small business owners for their own retirement.

The author's results offer substantial evidence for concern that business owners are not saving enough and that their retirement savings may be inadequate.  Some of the findings:

• Individual-based (outside work) retirement account ownership, contribution activity and employment-based participation (at work) among business owners are low. IRA ownership rate for business owners is only about 36 percent, and only one-third of business owners with an IRA contributed for the 2005 tax year. Less than 2 percent of business owners own a Keogh plan. Only about 18 percent of business owners participated in a 401(k)/Thrift plan.
• Business owners are more likely to own or contribute to retirement accounts if they are older, non-minority, educated, have more established business(es) (e.g., larger, older, profitable), and own more than one business.
• Having a micro-business with fewer than 10 employees reduces the probability of an owner having a 401(k)/Thrift plan from 17.4 percent to 10 percent, all else equal.

A second study released by the SBA looks at employee participation in retirement plans in small businesses. Some of the highlights of this study, authored by Kathryn Kobe, included: 

• Almost 72 percent of workers in small companies have no retirement plan available through the company; an additional 9 percent have a company-sponsored plan available but do not participate. Only 19.5 percent of workers in small private sector companies report participating in a retirement plan.
• Age, marriage, and educational attainment positively affect the likelihood of participating in a firm's retirement plan. This holds true for full-time and part-time workers.
• Defined benefit plans are most likely to be sponsored by large businesses; almost 32 percent of workers in large firms report the availability of a DB plan compared to 25 percent of the workers in small businesses. Defined contribution plans are the type of plan most often reported by both groups. About 75 percent of small business workers and 70 percent of large business workers report that their firms sponsor such a plan.
• One of the reasons why smaller firms may not offer retirement plans to their workers is the cost of setting up and running a retirement plan. Workers who do not participate in employer-sponsored plans frequently cite eligibility requirements and an inability to afford contributions as reasons why.
• A number of government programs have sought to simplify retirement plans in order to encourage more small businesses to sponsor them. These efforts have met with limited success and come with a cost.

Given the increasing strains and questionable viability of social security going forward, both of these studies should cause concern given that 50% of Americans now work for small businesses.

Entrepreneurship is more than just a driver of economic development. It can help build communities.

Two recent examples from Tennessee universities help illustrate this important lesson.

The first one comes from Jackson. In fall 2007, a group of entrepreneurially minded students at Union University came together to create a vision for the school's first campus-based business.

The students represented majors from all over campus, including business, art, communications and philosophy. They wanted to create a space on campus to foster conversations and collaboration among academic departments and social groups.

After months of planning and preparation, Barefoots Joe -- a coffeehouse and concert hall -- was proposed to the administration. But a lack of finances delayed construction.

Then on Feb. 5, 2008, an F-4 tornado devastated the campus, causing millions of dollars of damage. Only hours after the tornado, Dean of Students Kimberly Thornbury began to search for a common place for faculty and students to come together to deal with all that had happened.

The administration invited the student team to implement its idea for Barefoots Joe. With donations from the community for funding, materials, equipment and time, the team began to implement its plan.

On March 1, just three weeks after the tornado, the coffeehouse and concert hall opened. More than 500 curious and excited students gathered to celebrate the grand opening and start the process of rebuilding the Union University community.

Two years later, Barefoots Joe continues to be a meaningful space that helps foster community spirit and collaboration.

Another example comes from a group of Belmont University students who traveled to Guatemala as part of their entrepreneurship studies.
Effort improves farmers' lives

The town of Chajul, located in the mountainous region of Quiche in northern Guatemala, suffered some of the most brutal violence of the country's 30-year civil war. Its predominantly indigenous community continues to be one of the most economically distressed in Guatemala.

The Belmont students, led by College of Business Administration faculty Jose Gonzalez and Marieta Velikova, traveled to Chajul earlier this year and worked with the farmers who are seeking to diversify away from their reliance on coffee by adding fair trade honey production.

What started as a small initiative to support coffee farmers is beginning to have a major impact on the economic and social development in the region.

The students are now seeking funding from a social innovation competition sponsored by Dell to fund expansion of the project. They also want to use the funding to support the expansion of a micro-loan fund.

Funding from the competition is based on votes at this Web site: http://www.dellsocialinnovationcompetition.com/ideaList?lsi=3.

Some 85 percent of the population of Quiche lives on less than $2 a day. Creating a more efficient opportunity for revenue growth for a cooperative that is a central part of the community will greatly improve the livelihood of the honeybee farmers, their families and the community.

Given the depths of this recession, we need to help entrepreneurs around the globe once again thrive. Small business growth is the key to rebuilding communities that have been devastated by unemployment.

(This post ran as a column in today's Tennessean).

We were privileged to have Barry Moltz on campus again today here at Belmont University.  Barry is an entrepreneur, author and motivational speaker. 

He is always so gracious to our students, taking the time to get to know them and help them take that next step in their entrepreneurial journey.

If you have never heard Barry speak, do so when you next get the chance.  If you have never read one of his books, order one today (I promise I get no kick-back for this endorsement!!!).

Barry offers Honest, practical wisdom that any entrepreneur can benefit from, and he does so with a clarity that makes it possible to put his ideas right to work for you today.

Thanks, Barry!  We will have you back again, soon.

My friend and fellow blogger Barry Moltz has a new blog he is writing for Chicago Now website (from the Chicago Tribune) called It's a Small Business World.  He has a post at his new site on his top ten small business trends of the past decade.

As always, Barry provides brings an upbeat voice to the forces that have shaped small business.  His list includes trends related to how we work and new ways small businesses can compete.

While all of his trends are good ones, here are the top 10 small business trends from my alter ego, Professor Gloom:

1. Washington is looking to small business owners to pay for expanding government programs through higher income tax rates.
2. Washington is looking to add new taxes that will impact small businesses such as VAT and other new taxes and fees.
   
3. Regulation of business comes back in style and hits small business with its wide brush.
4. Property rights erode in the wake of the Kelo decision by the Supreme Court.
5. Policy makers loose faith in free enterprise.
6. Deficits grow and threaten to create inflation or even hyper-inflation.
7. The small business job creation engine grinds to a halt.
8. New venture creation rates drop while business failures sky rocket.
   
9. The movement toward healthcare reform threatens to burden small businesses with increasing costs and regulations.
10. Small business optimism reaches record lows.

There are two resources that I would like to recommend that provide some insight on how to prepare for what looks like another difficult year in 2010.  One has an unconventional title and the other is unconventional in almost every way you can think of, but both offer important ways to help entrepreneurs sharpen their saws. 

Due to the worries and challenges of the prolonged recession, consumers are looking things that create better value for their spending.  The first resource is a book looks at how to create better value through customer service. 

Barry Moltz and Mary Jane Grinstead's book B-A-M!: Delivering Customer Service in a Self-Service World may have an unconventional title, but it presents recipe for customer service that can help entrepreneurs differentiate their businesses.

Moltz and Grinstead fill the book with clear, concise lessons that can help entrepreneurs truly add value to their offerings through excellence in customer service.

The second resource is both a book and a blog that were developed in an unconventional way and is presented in an unconventional format. Getting business models right has never been more important than during this long and difficult recession. 

Business Model Generation is the book version of a project that helps capture the very best thinking on developing a business model that has a better chance of entering the market and staying relevant during the turbulent and dynamic times ahead.  It was co-authored collaboratively by 470 (that's right, 470) strategy practitioners from around the globe.  From their website:

Business Model Generation will teach you powerful and practical innovation techniques used today by leading companies worldwide. You will learn how to systematically understand, design, and implement a new business model -- or analyze and renovate an old one.

The book is visually different than most traditional books -- it if full of colorful graphics that help use visual learners see the processes that these experts from around the globe agreed upon as a set of processes that can help any business -- from start-up to large corporation --  develop more effective business models.

The original book is already out of stock, but their will be a new edition that will be available soon through Amazon.  You can get on their waiting list at the website.

In the meantime, one of the leaders of the project, Alexander Osterwalder, offers a lot of the pertinent information from the project at his blog called the Business Model Alchemist.   There is more than enough information there to get started in defining or redefining your business model.  But, I would still suggest you order the book when it becomes available through Amazon.