So you want to launch a business...

2009 - the year of the entrepreneur is at hand

The relative risk of starting your own business has never been lower!

Now that's an audacious proposition.  But I'm pretty sure it's true.  Think about it.

With all the big, old, well-established businesses in dire straits, the risk of losing a "steady" job is pretty darned high.  The risks associated with entrepreneurship have traditionally been viewed as immense compared to the dependable income promised by a career with a blue chip company.  Well, today that just isn't so!

True, the economy is in turmoil; but turmoil creates opportunity.  Little guys can flourish where big guys simply cannot go.  And if we're near the bottom, there's no place to go but up.

Now, don't get me wrong.  All the rules still apply.  You still need a compelling end-user need in a valid Market, and some kind of Magic that will cause buyers to choose your product or service.  And in crazy times experienced Mentors will be more valuable than ever.  Finally, of course (I can't leave this out), you will require an ample supply of MOXIE.  The relative risk may be lower than ever, but the demands of entrepreneurship are still high.

So, this is your chance.  Suck it up and launch that new business.  But don't just do it.  Do it right.  Get your Four Fundamental Factors in order and make me look like a true prophet.

Happy New Year!

Engineers with big ideas - Incubators are for YOU

ASME says, "Incubators represent one of the most attractive alternative paths for entrepreneurial engineers and technical professionals."

For my readers who are not familiar with ASME - "Founded in 1880 as the American Society of Mechanical Engineers, ASME is a not-for-profit professional organization that promotes the art, science and practice of mechanical and multidisciplinary engineering and allied sciences throughout the world."  From the ASME Home Page.

Of course, my favorite incubator is a key part of the VT KnowledgeWorks Business Acceleration Center at Virgina Tech, in beautiful Blacksburg, Virginia.  You can get the real flavor of life in our incubator from our blog, Inside VT KnowledgeWorks, professionally executed for us by Anne Clelland.

Lifestyle companies - HOORAY!

SMEs are at the heart of the global economy.

SMEs means small and medium-sized enterprises.  That translates to fewer than 50 employees for small and under 250 for medium.  According to Wikipedia, in the European Union, SMEs comprise approximately 99% of all firms and employ about 65 million people. In many sectors, SMEs are also responsible for driving innovation and competition. Globally, SMEs account for 99% of business head count and 40% to 50% of Gross Domestic Product.

It has been fashionable in some circles in the US to put down technology-based SMEs as "lifestyle companies."  The notion is that if the company cannot be expected to grow to several hundred employees it is somehow trivial.  50% of GDP is quite obviously not trivial.

A couple of years ago I had an interesting interchange with a successful entrepreneur whose company now qualifies as medium-sized.  I expressed my frustration that entrepreneurs are pointed to huge successes like Microsoft and Google as models to be emulated.  I said, "A nice, little company grossing perhaps $10 million annually and returning $1 million to its owners is clearly a good thing."  He smiled, with a knowing twinkle in his eye, and said, "I know."

How would you feel about an annual income of $1 million?

I was really impressed!

I just returned from an international conference on science-based business incubation.  It was in Paris.  All work and no play, as you might imagine.

Aside from the historic architecture, well-known cuisine, and intrinsic charm of the "city of light," what struck me most was the high professional competence of the conference attendees.  One after another, they shared best practices; and I returned home with a notebook filled with ideas for improving our program here at VT KnowledgeWorks.

What does this all mean for a budding entrepreneur?

Well, there are over 1,100 business incubators in the US, and thousands of others spread around the globe.  Within the European Union, for instance, there are 380 in Germany alone.  These incubators help entrepreneurs reduce the risk in starting a business.  That's it.  Incubators reduce risk.

Mentors are a fundamental need for every business leader.  Incubators provide mentors.

Use them.

Winter can be bad for business.

And it can be worse for the entrepreneur.

In the United State, with the exception of consumer retailing, businesses seem to go to sleep on the Wednesday before Thanksgiving and not wake up until January.  This year's budgets have run out, so purchasing grinds to a halt.  Preparation of annual plans and next year's budgets consume many managers.  Personal holiday issues distract everyone.  Email gets ignored.  Voicemails go un-returned.

Then, when January comes, people are tired out from a month of stressful partying and over-spending.  That's yet another excuse to postpone real work until after the Super Bowl.

Layer in the gray days, and you have a tough time for entrepreneurs.  Your Moxie can drain away.

Here's what Wikipedia has to say about the winter blues.

Seasonal affective disorder (SAD), also known as winter depression or winter blues, is a mood disorder in which people who have normal mental health throughout most of the year experience depressive symptoms in the winter or, less frequently, in the summer, repeatedly, year after year. The US National Library of Medicine notes that "some people experience a serious mood change when the seasons change. They may sleep too much, have little energy, and crave sweets and starchy foods. They may also feel depressed. Though symptoms can be severe, they usually clear up."

This can be a good time to re-visit your Motivation and get a Moxie infusion.

Moxie’s closest relative is Motivation – Motivation and the Commitment that comes with it.  Actually, in a sense, Motivation is Moxie-fuel.  Determination lasts longer if the underlying Motivation is powerful.

So, why do you really want to start this business?

What is the nature of your Motivation?  Your reasons are your own, so own them.  Clear off your desk.  Get a blank sheet of paper.  Now complete this simple sentence.

When you boil it all down, I’m doing this because…

If you simply want to play golf every afternoon, just say so.  It’s OK!  This is private information.  No one will see it other than you.  Not even your mother.  She’s not watching. 

Winter can easily be the toughest test of your Moxie.  Make sure you have enough to last until spring.

Quitting is not the same as failing.

Quitting is voluntary.  And success is NOT non-failure.

Oddly enough the Small Business Administration data on terminations of businesses report exactly that - terminations.  They count the businesses that start and the businesses that stop.  They don't have a good way to figure out which entrepreneurs failed and which ones just quit.  And there is a huge difference.

Here are a few reasons to abandon a business that do not involve failure of the business itself.  Interestingly, they can provide clues as to things to consider BEFORE launching a business.

Would you throw in the towel if ...

• you found something else to do that you liked much, much better?
• you found out that continued success would require you to relocate?
• your partner turned out to be a jerk?
• you found out that entrepreneurship really does take more than 40 hours a week?
• in spite of good money, your work turned out to be unbearably tedious?
• a new competitor appeared and made your job harder?
• it had been fun as a hobby, but turned out to be a drag as a job?
• you won the lottery?
• somebody offered you a fair price to acquire your business?

What do these all have in common?  They involve YOU - your feelings, your integrity, your non-business circumstances, your greed.

Before you start, be as sure as possible that you have a solid chance to create the outcome you truly desire.  And remember, money is never everything.

If you've already started, step back and take a good re-look.  Are you on a path to true success, or only to non-failure?