Time to buy?

Entrepreneurship involves discovering and exploiting opportunities. In many cases, this involves the start-up of a new business entity. However, entrepreneurship can also involve acquiring a business. In the current economic times, many businesses are being put to the test, and in some cases, not doing so well. This can equate to a great opportunity for someone to come in and take over an existing business with a fresh perspective, strategy and resources.

A recent question posted to BusinessWeek addresses how to buy a struggling company. The key takeaways…Many businesses are available at bargain prices, but be cautious – do your due diligence!!!

One way to identify struggling business is through a certified business broker. However, another more fruitful option is via word-of-mouth (use your networks!). One last suggestion is to be creative --- for instance, you could offer to come on board for free in exchange for a share of the ownership. Or, you could offer to purchase a failing division of the business (not the business in entirety). Don’t be afraid to approach a business owner, but do be respectful as there are many emotions that are associated with running a successful and failing business.

Link for full article: How to Buy a Struggling Company - BusinessWeek

Libraries: An invaluable tool for entrepreneurs

When is the last time you have gone to the library?

As an entrepreneur, or a wanna-be entrepreneur, libraries represent an invaluable tool that I fully endorse. Here are just a few reasons why:

• Quiet place to think and fully concentrate on your business plan
• Free access to computers, programs and the Internet
• Free access to a wealth of knowledge via the librarians (really, they are geniuses that can help you find out nearly ANY piece of information that you need)
• Free access to journals and other documents (that can otherwise be quite costly) that can help provide much needed insight into your market and industry
• If your library doesn’t have the documents you need, they can usually access them from another library for you
• From home, you can still usually access many of the electronic tools
• From home, you can also typically submit a research question/request to the librarian that they’ll work on for you

As this week is deemed National Library Week, I encourage you to reconsider what your local library can do for you today!

Recession Strategies: Cut costs or increase sales?

A recent article published by Scott Latham in the Journal of Small Business Management examined how firms react to a recession. Their study of 137 software firms during the previous economic downturn in 2001-2003 suggests that start-up firms are more apt to focus on increasing sales and other revenue-generating strategies to make it through the touch times. However, larger firms tend to instead focus on cost reductions.

I find this pretty interesting as when I look around at what is happening right now – I am continuously hearing about all the layoffs at the large corporations and yet, many of the smaller businesses are frantically trying to get a bigger piece of the pie in order to make it through.

So, it seems to be an accurate depiction of what is happening in the real world. However, the real question, though, is ‘should it be happening?’ For instance, should small businesses be focusing solely on revenue-generating strategies? Should large businesses solely be cutting costs?

Thinking Entrepreneurially...in a social way

I recently read that the Salvation Army had increased their Red Kettle donations by 10% in 2008, DESPITE the fact that the retailers suffered one of their worst years. How were they able to do this? By thinking and acting entrepreneurially.

The increased donations were the result of (a) increased partnership with Wal-Mart and the NHL, (2) using 'cashless kettle' that accepted credit card donations and (3) a text messaging service that allowed contributions via telephone bills. What neat ideas! These are three creative ways in which the Salvation Army thought 'outside of the box' in order to increase their revenue. 

It is my hope that the many non-profits as well as for-profits are able to maneuver their way through this difficult time economically by doing the same.

Competing with the Big Box Retailers: Yes, it is possible

Today on the radio, I listened to a talk-radio host make the arguments that entrepreneurs are unable to compete with the big box stores such as Wal-Mart. This is nothing new -- as I hear this argument frequently. This always intrigues me -- as I see Wal-Mart as a positive.

First, Wal-Mart (like any other big business) was started by an entrepreneur and we can learn a lot from Mr. Walton.

Second, Wal-Mart offers consumers convenience and lower prices through their economies of scale. Yes, this benefit also applies to all the people living in small town America where Wal-Mart is supposedly ousting all the existing small businesses. I know I appreciate this.

Third, Wal-Mart makes the market more efficient. Sure, many small businesses go under that are no longer able to offer any competitive advantage. But, the real entrepreneurs will simply respond to this change and find a new way to compete.

And, yes, it is easier than you think to compete with Wal-Mart. You just need to think strategically, and think either a low price OR a premium product niche! Here are some examples:

Diapers.com -- They specialize in diapers and other baby products. They match the prices for diapers with the big box retailers and even offer free shipping on orders over $49. They are able to do this by focusing on a niche and not having to spend the big bucks on a retail outlet.

Whole Foods -- Although they offer grocery items just like the Super Wal-Mart, they are able to compete and bring in customers by focusing in on more organic and specialty items.

Reading Recommendations

I am very much an advocate of learning, no matter what the age and no matter where you are in your career. Of course, we all have limited time and the question then becomes -- what should we be reading?

Jack Covert and Todd Sattersten have recently put "The 100 Best" book where they highlight what they feel are the best 100 books to read whether you are a CEO or just entering the business arena. What I like about their book is the classification of books by subject area. For example, here are the books that they feel are notable under the topical area of entrepreneurship:

The Art of the Start by Guy Kawasaki
The E-Myth Revisited by Michael E. Gerber
The Republic of Tea ** by Mel Ziegler, Patricia Ziegler, and Bill Rosenzweig
The Partnership Charter by David Gage
Growing a Business by Paul Hawken
Guerrilla Marketing by Jay Conrad Levinson
The Monk and the Riddle Randy Komisar with Kent Lineback

Happy reading!

Youth Entrepreneurship - the key to economic recovery?

At the World Economic Forum in Switzerland, a panel argued that are key to economic recovery relies on incorporating the teaching of entrepreneurship into the K-12 education system. Pretty interesting huh? I guess starting out young has its benefits.

http://blogs.wsj.com/independentstreet/2009/02/17/teaching-entrepreneurship-in-grade-schools/