Certain events are surefire catalysts in spurring would-be entrepreneurs to launch their own companies. Layoffs from once-secure jobs have led many to take the plunge. The arrival of a watershed 30th, 40th or 50th birthday has done the trick for others.
But some entrepreneurs have required nothing more momentous than the start of a new year. And if you’re among those who’ve greeted 1999 with dreams of running your own show sometime this year, experts on business startups have encouraging news.
This looks to be an excellent time to get a new business off the ground, they report. In fact, for those willing to study the market and competition, engage in a degree of healthy self-analysis and stay the course, it may be the best time ever to start an entrepreneurial venture.
Among those who feel the time is ripe for entrepreneurs is Barry Merkin, clinical professor of entrepreneurship at Northwestern University’s Kellogg Graduate School of Management in Evanston, and a former entrepreneur who launched four successful businesses himself.
“It’s the all-time best time, because everything is up for grabs,” he commented. “There’s a current phenomenon I haven’t seen in my lifetime, and the big word is change. It is hard to believe the magnitude of the changes we’ve seen, the speed of the changes we’ve seen and the surprises in the changes we’ve seen. An entrepreneur who is in a place and a time frame where things are stagnant is up against a much tougher environment than the entrepreneur in this wild world of tornado-like change.”
Today, he added, Americans expect change. As a result, the entrepreneur is no longer the iconoclast but part of the mainstream. “To some extent, he’s fashionable,” Merkin said. “I don’t think parents are embarrassed to say, `My son’s not a doctor, he’s an entrepreneur.’ “
Another expert who believes this is an opportune time for those with entrepreneurial interests is Jay Goltz, CEO of Artists’ Frame Service, Jayson Home & Garden and Chicago Art Source, as well as the founder of Boss School and the author of “The Street-Smart Entrepreneur” (Addicus Books, 1998).
Goltz, who started Artists’ Frame Service right out of college 20 years ago, said the time was right then and still is–especially for those launching service businesses.
“If you’re (starting) a smaller business where service is the business, you’ve got a leg up. If you work hard, you’ll be much more effective than the big business. There are few economies of scale in service. There’s nothing more beautiful than a 20- or 30-person well-oiled machine.”
Also touting the current environment for entrepreneurs is Gary Leff, who has entered the ranks of successful entrepreneurs only recently. Leff cooked up his first Stir Crazy Cafe restaurant in Oak Brook in 1995, and since has added locations in Northbrook and Schaumburg. Two more Stir Crazy Cafes, in Detroit and Boca Raton, Fla., will open this year.
“I think it’s actually a great time,” Leff remarked. “The last two years, the trends have really favored entrepreneurs. There’s a lot of venture money out there, looking for a good idea or good management. So there’s good access to capital.”
In addition, he said, technology has enabled many budding business owners to outsource critical functions, such as marketing, accounting and human resources. That means that a large investment in infrastructure isn’t as necessary as it was years ago.
“Your risk is lower,” he noted. “It allows you to be a lot more flexible, for less money. Your human resources don’t have to reside in your own office, for example.”
Not even the relative shortage of good employees in the current tight labor market is likely to set back the right entrepreneurs. Promising, exciting business concepts can attract people who want to be part of a swiftly growing company, Leff observed.
Another reason this is a good time to become an entrepreneur is that there are more college and business school courses on entrepreneurship than ever before, said Steven Rogers, professor of entrepreneurial finance at Kellogg.
“More than 600 schools across the country teach at least one entrepreneurship course today, compared to fewer than 100 in the late ’70s,” Rogers noted. “This is important because would-be entrepreneurs can learn about entrepreneurship today in the classroom before risking everything and learning about it on the job, which can be a very expensive and mistake-laden way to learn such key entrepreneurial skills as cash flow management.”
But even during what may be a golden age for entrepreneurs, the old cautions still apply. Before setting sail on an entrepreneurial voyage, say the experts, make sure you have the intestinal fortitude to weather the near-certain storms and have studied the prevailing currents.
“You need to be a fighter,” said Leff. “It’s a lot tougher road than people think. You have to fight through rejection, and ups and downs. You have to be the type who’s persistent, who will persevere and (remain) passionate about what you’re doing.”
Goltz and Merkin are equally insistent about the need for thorough introspection before launching a business. According to Goltz, would-be entrepreneurs must be able to convince themselves that they’ll be able to wear many hats with equal aplomb.
“You have to be a jack of all trades,” he said. “You have to be a salesperson, generating sales and attracting and keeping customers. You also have to be a manager, which requires you to occasionally fire people.
“And you have to understand the financial side of the business, such as pricing, how to borrow money from a bank and how to oversee the accounting of your business.
“People say, `How can you do all three things well?’ ” he continued. “Most people can’t. That’s why only about 20 percent (of them) succeed. To succeed, you have to do everything right. To fail, all you have to do is one thing wrong–one thing you can’t recover from.”
For his part, Merkin tells entrepreneurial hopefuls to look within themselves for three Ps: passion, persistence and pride. All are essential attributes of a successful entrepreneur.
“How are you on those things?” he asked. “How much rejection can you handle, how much tolerance do you have for failure after failure? Do you have a family, and can they weather it with you? And how’s your health: mental, emotional and physical? This is a draining game.”
Pointing out that entrepreneurship doesn’t necessarily mean starting a company from scratch, Rogers urges would-be entrepreneurs to weigh different routes to running their own show. Franchisees and those who purchase existing businesses (Wayne Huizenga of Blockbuster Video and Ray Kroc of McDonald’s are two of the most famous examples) are also considered entrepreneurs, he observed.
“A person should determine in advance if he is suited to be a startup entrepreneur, where the entrepreneurial risks are the greatest; a franchisee, where the risk is the lowest (80 to 94 percent succeed); or an acquirer,” he reported.
ENTREPRENEUR HELP ON THE WEB
There are many Web sites with information geared toward owning your own business. Here’s a sampling:
– Moneytree (www.cargobay.com/moneytree)–Provides listing for businesses up for sale, links to franchise information and a variety of financial resources.
– Small & Home-Based Business Links (www.bizoffice.com)–Offers insights on small or home-based businesses and where to find financing. Also contains library with articles devoted to owning your own business.
– The Franchise Market (www.entremkt.com/access/index.html)–
Contains list of companies that offer franchise opportunities, from hobby stores to computer training businesses.
– Be The Boss (www.betheboss.com/main.htm)–Search by location, business category and investment range to find the right business in your preferred area.
– The Business Place (www.thebusinessplace.com/compan es.html)–
Lists companies for sale classified by the nature of the work. Provides vital details about the company’s history, assets and financial performance, but does not give the business establishment’s name.
— Knight-Ridder/Tribune
