“Entrepreneur” App Helpful Resource

I have been exploring the app for Entrepreneur magazine.  It is a free iPad app that brings the magazine and other content through a single source.

I really like the search function in the “Library”.  That is what I always tended to use at their website, so this is an app that truly eliminates the need for me to go to that website.  At this point it seems that it can only go back to content from 2010 and 2011.  There is some really good content from Entrepreneur that dates back a few years.  Hopefully they will build up the archives available through the app so I won’t have to also search at the website.

Navigation in the app is a bit clunky and slow.  For example, with articles presented in the “Feeds” section it provides links to the web article.  “OK”, I thought. “I will get some more meaty content there.”  But often it is the same article I just read in the app version.  Time wasted.  It is also hard to get out of a specific article once you use the search feature. 

Within an issue it would be great to be able to click on an article and go to it from the contents.  Instead you have to “page through” to get to it.  Quicker to read the hard copy magazine in this case.

I also think it would help to streamline their Feeds.  There are three buttons to choose from that seem to be more convenience for them than easy for the user.  I really don’t care about difference between what is a “Daily Dose” versus a “New Article”.  So why make me click between them.

Navigation is a bit awkward, especially since I go to this app right after I have been using some really slick content apps like USA Today and Fox News apps that are easy and intuitive. 

All in all a good start.  A useful tool that should get easier to use over time.  In spite of it being less the user friendly, it gives some great content.

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Cyber Crooks Target Small Business

Criminals take the path of least resistance. 

If your car door is locked, they tend to go to the car that was left open.

If your house looks dark and empty, it is the one they will probably break into.

Same is true for your business.  For years cyber crooks went after large business.  After all, that is where all the cyber money is.  But over time corporate America has tightened its Internet security to the point that it is no longer easy pickings.

So now they are bypassing the corporate firewalls and coming after small businesses.

An article from USA Today on cyber criminals coming after small business has gotten a lot of attention. (Hopefully not from dumb crooks who have not figured this out yet).

There is lots of information out there that can help make your business less appealing to cyber crooks out trolling for an easy mark.  For example, NFIB has a long list of articles at their site on how to improve your IT security, Visa offers tips for small merchants on data security, and the SBA offers some tips of their own.

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Job Creation from June is not Encouraging

Two reports on small business job creation were released today.  The bottom line is that there is little evidence that small businesses are ready to lead us out of this long and hard recession.

The Intuit Small Business Employment Index rose ever so slightly in June, showing employers adding a small number of jobs and slight increases in hours worked and compensation.

But the NFIB survey were less encouraging.

“Seasonally adjusted,
9 percent of owners hired new employees last month, a 1 point decline from May,
while 16 percent reduced employment, a 3 point increase”, said
William Dunkelberg, Chief Economist of the NFIB.  The remaining 75
percent of owners made no change in employment. Manufacturing was the only
winning sector to post average positive net growth; but job losses were posted
by firms in financial, non-professional services, construction, negating any
gains made.”

Both surveys found some hope for July, but we have seen the optimism among entrepreneurs rise and fall throughout this long economic morass. 

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Legal Definitions of Partnership not Enough

It is very common for entrepreneurs to take on partners.

They may be co-founders of the company, key personnel who are given an ownership stake as part of compensation, family and friends who offer some startup support or outside investors.

In any of these circumstances, these people become owners of the business.

And the foundation of working with a group of owners should be a sound legal agreement among all the owners.

This agreement should lay out the basic rights and responsibilities among partners as it pertains to the business they own together, such as what decisions are required to be voted on, what happens when a partner leaves or passes away, and what information those who run the business must provide to the partners.

The best time to set up a partnership agreement is when you first start the business. At this point in time, there is little to squabble over. The business exists only on paper, so finding a fair way to deal with an exiting partner seems much easier.

But such a document only lays out the minimum requirements. There should also be an ethical set of standards that goes beyond the basic legal requirements.

This is particularly true for those in the partnership who have ownership control by holding a majority of the shares.

The heart of working successfully with partners of any kind is communication.

Many partnership agreements establish the minimum requirement of providing everyone with annual financial summaries and holding an annual formal meeting. While this meets the legal requirements of most agreements, it falls short of commonly accepted ethical standards.

Communication with fellow owners should be frequent and predictable. Common practice is that the managing partner should ensure that every owner gets a monthly set of financial statements. It is also good practice to include a narrative summary of business activity over the past month.

If there are partners in the business who are not actively involved in running the company, quarterly or monthly meetings are a good way to keep everyone informed. These also allow for discussion of important issues.

Communication with partners should always be completely honest, open and proactive. The managing partner should view his or her role as a steward of the company for all of the ownership.

With that comes the responsibility of keeping everyone informed of major accomplishments and significant problems or crises. This type of communication shouldn’t wait for the monthly report.

Partners should always be among the very first to know about such things.

Communication should be comprehensive. While monthly reporting may provide a fairly succinct summary, at least once a year partners should be given a thorough overview of the business’ past, present and future.

Too often partnerships that are guided solely by the legal requirements of their formal agreements tend to end up in a legal mess trying to resolve conflicts and disagreements.

Entrepreneurs who view themselves as stewards for the other owners — and who follow a higher standard of communicating — are better able to resolve issues among themselves or avoid such problems altogether due to a strong sense of trust.

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Good Start, But This App Needs a Few Pivots

The stars all seemed to be converging for me as a fan of the Business Model Canvas.

I am refining the 3.0 version of my syllabus for my planning class that has become largely centered around the Business Model Generation framework.  I have never been more energized going into a new academic year.  My class no longer looks like a traditional old business planning class.  Instead, students learn to develop a business model and pivot until the cows come home.  My old slide decks have been filed away and I have all new PowerPoints with fresh lessons, images, videos, and of course, Dilbert cartoons.

I have organized a group of faculty from across the US and Canada to present how we use the business modeling to teach our students how to successfully launch a venture that is responsive to the market.  We will be offering a pre-conference session at USASBE this coming January

I have been exploring how we might do some research into business modeling with a few colleagues.

Students and alumni who have been using the business model generation framework have been raving about its power and utility.

And then for Father’s Day, my wonderful family gave me an iPad.  Now I can finally get the Business Model Toolbox App.  I imagined connecting my new iPad to the LCD in the classroom so I had the ability to bring the business model canvas to life for my students.

But alas, even at the hefty price of $30, this app falls well short of what I hoped for. 

Is it a great tool for developing a business model?  Yes, but mostly if you work alone.  It is not easily shared unless you pass around your iPad and cannot be shown live and in motion via and external monitor or better yet LCD projector. (NOTE:  My friends at Aloompa tell me that it can work with an HDMI cable).

The beauty of the business model canvas is that it allows you to create a large visual representation of the business on a whiteboard or on the wall with sticky notes.  Then you, your partners, your team, and your advisers can all look at the same picture and refine it, improve it, or quite often pivot it entirely.

I am glad I bought the app, as it will be a great tool to work with students and alumni one-on-one in my office.  And I know my Apple-minded, shall I call them Apple-zealot, students will likely find it a great tool to learn how to use this incredibly useful tool.

But it has a ways to go to be a true app version of the original.

So for the entrepreneur on a tight budget, bootstrapping your way to launch, I still recommend the paper version and all of the free information available on the web.

The business model for this app needs a few more pivots before I recommend it as an essential tool worth $30.

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Exposure to Entrepreneurship in School Matters

The findings of a recent study by Babson College suggests that exposure to entrepreneurship in school increases the intention to become an entrepreneur.

This is consistent with preliminary findings we are seeing in data we have gathered here at Belmont.

Increasing exposure to entrepreneurship is a driving force behind our inclusion of entrepreneurship coursework for all students pursing either undergraduate or graduate degrees in business at our school.  It opens students’ eyes to business ownership as a career path. 

We are also trying to take our efforts to integrate entrepreneurship into other programs across our campus.  While we cannot get entire courses into other academic programs, we can help integrate the topic into existing courses by working with faculty from other disciplines.  In fact, cross-campus entrepreneurship education is a trend happening at colleges and universities around the globe.

Those students studying engineering, medicine and other areas of healthcare, art and music, the sciences, and so forth, all need exposure to entrepreneurship.  For with exposure we can increase the number of business owners in an economy.  We can offer these students a better understanding of what entrepreneurship really is and what it takes to launch and grow a venture.  We can demystify it and help dispell some of the myths and misconceptions they have about entrepreneurship.  This is why I included entrepreneurship education as one of the five
points in my recent post about my agenda for utilizing entrepreneurship to
help rebuild our economy. 

While some level of entrepreneurship does “just happen”, educating students about business ownership and free enterprise will amplify entrepreneurial activity. 

Teach entrepreneurship not only gives them the skills they need, it actually increases their confidence that they can be successful at business ownership and increases the likelihood that they will in fact start a business of their own.

Strategies for Pricing as Inflation Looms

I wrote in a post yesterday about the growing trend found in the latest NFIB survey of small business owners increasing prices in the face of increasing inflation in the economy.

A common question I get asked is just how to go about raising prices, especially given the weak demand as the recession lingers.

Barbara Findlay Schenck offers some very specific tips in an article at Business on Main, which are well worth a read.  Whatever steps you take to increase pricing, Findlay offers this advice:

As you announce new prices, understand and be prepared to define the
reason behind increases — but don’t apologize. Keep your focus on the
high value you’re delivering, the unique quality you provide and the
options available to ease your customers’ purchase decisions.

Remember that customer service is the competitive advantage that most small businesses have over their larger competitors.  Never lose sight of the importance of this as you move toward increasing prices to offset inflation.

I will be writing a post on this topic early next week.

(My blog is a part of an online influencer network for Business on Main. I receive incentives to share my views on a monthly basis.)

From Happiness to Panic: Entrepreneurs Set the Tone

One of the tools I use to teach is story telling.  It is not the kind of war stories that have become infamous among some of us who used to “do” and now “teach.”

Rather, when I am trying to bring some concept or lesson to life for my students I tend to either use experiential exercises or stories from my own or other entrepreneurs’ experiences.  I find that both approaches can be effective ways to make key points memorable.

One of my students’ favorite stories is one I tell about a time that I was very discouraged and down in the dumps.  I was tired of always being the person to keep everyone else “up.”  I decided that I deserved a good old-fashioned pout.  We were going throw a particularly rough patch in our growth and were once again feeling the stresses and strains of managing a high growth venture that was too often short on cash.

So when I got to work that morning I trudged across the parking lot.  When I got off the elevator on the fifth floor where our offices were, I grunted something inaudible to the receptionist.  I then proceeded to walk right through the various office spaces between the front door and my office — accounts payable, billing, marketing, and HR — without doing anything but hang my head low, ignoring everyone along the way.  Finally, I plopped myself in my chair ready to spend the morning feeling sorry for myself.

Right about then one of our longest term employees burst into my office.

“Don’t you ever walk in here again like that,” she stated sternly.  “We all know how tough things are right now.  The only thing that keeps us going, keeps us hopeful for the future, is watching you come in everyday with a smile and look of complete confidence.  If you give up, we will all give up.”

She was right.  I made sure to never show my fear or worries again.  Entrepreneurs need to be the emotional spark plugs for their team.

An article by Jeff Wuorio from Business on Main reinforces the importance of this role for the entrepreneur.

But a small-business owner’s enthusiasm for his
entrepreneurial goal isn’t just a source of drive and energy. It also sets an
example for partners and employees, building a sense of shared effort toward
something of bona fide value. And this feeling can be utterly contagious.

“When employees see happy employers, the vibe carries over,”
says Renee Chronister, owner of Parameter Security, a St. Louis online security
firm. “The best way to kill morale is to be unhappy. Remember, you set the
example and standard in the organization that others follow.”

The author also explains how it cannot be only the entrepreneur’s job to create a happy climate.  We should strive to build a happy culture, which all begins with the people we hire.  He offers some great tips on hiring for a happy and positive workforce.

(My blog is a part of an online influencer network for Business on Main. I receive incentives to share my views on a monthly basis.) 

Third Leg of the Stool

In two previous columns, we began looking at the “three-legged-stool” — that is, whom small businesses need as supporting advisers. The first two legs were a business-minded attorney and a CPA.

The final leg of the stool is a business banker.

Because bankers are generally not able to lend money until businesses are well established, many entrepreneurs seem to be in no hurry to establish a relationship with a specific business banker.

However, Allan Joiner, senior vice president, relationship manager commercial and industrial banking with Avenue Bank, identifies two main reasons to connect with a banker early in your venture.

“First, your banker is your advocate,” Joiner said. “Having an advocate within the bank can not only demystify some of the finance world for you but will be your champion inside the bank for future requests.

“Second, a good banker will become a trusted financial adviser. Because bankers are exposed to multiple business and industries, they can be a great sounding board for ideas and help strategize on ways to reach financial objectives.”

With all the Web-based resources out there, including completely online banks, a personal relationship with a business banker may seem less important.

“Developing a personal relationship with a banker can make all the difference when you have an urgent need or run into difficulty,” Joiner said. “There is no substitute for the service a dedicated banker can provide who has a vested interest in you and your business.”

Successfully working with a banker requires a proactive, intentional plan. There are specific steps that entrepreneurs should follow to build a strong long-term relationship with their bank.

“Developing any relationship takes mutual effort and understanding,” Joiner said. “For starters, it is just as important for entrepreneurs to interview the prospective bank to make sure the fit is right as it is for the bank to evaluate the entrepreneur.

“From there, strong banking relationships are built over time through regular two-way communication and performing within mutually agreed-upon expectations. While developing a good relationship with a banker cannot prevent occasional difficulties or (ensure) that the answer to every request will be yes, a constructive relationship with the bank is infinitely more beneficial than an adversarial one for both parties.”

One of the most common mistakes made by entrepreneurs is not understanding how bankers think — and specifically how they make decisions on business loans.

“Banks are not in business to take equity risk,” Joiner said. “Banking is a low-risk industry. Because we fund loans largely with depositors’ dollars, banks are not in a position to extend credit without a minimum of two readily identifiable repayment sources.

“Most startup businesses will not be eligible for traditional bank financing because there is no history of cash flow and often little, if any, residual collateral to retire the debt if the business fails.”

There are many other advisers who can be essential for the success of entrepreneurs. But, as my father always stressed, the foundation of any successful business is usually built on a strong relationship with your attorney, CPA and banker.

Why Free Enterprise Matters

One of my colleagues, Jose Gonzalez, was co-founder of Conexion Americas here in Nashville before he joined our faculty.

The video below reinforces why for generations people have come to the U.S. — to find economic freedom and the opportunity to prosper.  This video captures why we must fight so hard to protect our liberty and our free enterprise system.