July 21, 2010
The Death of Entrepreneurship?
In business, nothing matters more to me than free enterprise and the success of entrepreneurship across America. The values that entrepreneurs bring to business are what have made this country great over its 234-year history. But I'm concerned that the current business and political environment is so unfriendly to entrepreneurs that the death of entrepreneurship may be imminent.
If entrepreneurship goes down the drain, so too do millions of future jobs. It is well known that the economic recovery, as well as the economic growth of the nation over time, depends on entrepreneurial success.
Large companies do a good job of maintaining operations, combining and acquiring businesses, and stabilizing them, but they aren't known for exceptional results in innovating and launching new enterprises. Big companies try their hand at the "start-up game," but their risk profile and the nature of the expertise they bring to the table is frequently counter-productive with regard to innovation, at least compared to the way that entrepreneurs do it.
The biggest companies count on entrepreneurs to innovate and start enterprises which they can acquire and grow further. It is part of the business lifecycle - and the natural balance that exists between the many strata of companies has worked well. But that balance is in jeopardy.
The government's policies over the last few years have become very unfriendly to entrepreneurs. Starting and operating a business has become more expensive and more complicated. These factors limit the number of people who can enter the entrepreneurial environment, and I fear for entrepreneurs who are trying to organize themselves in these difficult times.
Credit is tight. Entrepreneurs generally have had their balance sheets assaulted — even more heavily than our corporate counterparts. Economies of scale have never been more important and entrepreneurs don't excel when it comes to acquiring these efficiencies. And the requirements for specialization in business have grown multi-fold — another place where entrepreneurs tend not to excel.
My concerns for entrepreneurship have become the basis for much of the business strategy I dispense to clients, friends and fans. It forms the basis for how I have directed my own companies and ventures. This is not a time to lie down and curl up. Tremendous opportunity exists, but new plans and strategies are necessary.
I am not one to rant without a purpose. There is a specific business strategy that has grown out of this unfriendly economy and I want to share it with you so you can take action and use the current environment to your great advantage whether you are in business, film, real estate, or some other aspect of entrepreneurship.
Check back in a few days and I will tell you specifically what entrepreneurs need to do to optimize these tough times.
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About Joel G. Block, President of Growth-Logic, Inc. — Often dubbed a "Growth Architect" by his clients, Joel Block advises companies on explosive growth strategies by driving revenue and sales. Well known in the capital markets, Joel is a successful entrepreneur, speaker, advisor and astute investor. To bring Joel into your company, please visit http://www.joelblock.com
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Comments on The Death of Entrepreneurship? »
Joel I have to be a bit critical. I don't think Entrepreneurship is in any danger. Have times gotten more difficult? Absolutely.
Why? For the same reasons why the housing market has taken a hit, why prices are skyrocketing, unemployment is hovering at a frigid 11% and for the same reasons why everything it seems are wobbly where stability has been the norm.
I track growth and decline trends, markets, spending and several other areas because it affects the money I take home to pay the mortgage, keep the lights on and feed my family.
One of the things that is growing is home-based businesses. The bad news there is that many people are being sucked in to MLM schemes and the boom for social media-based opportunities are rampant.
There are however new business that are starting from homes by people who have been laid off and are taking advantage of the free time and investing in opportunities others offer or are creating opportunities for themselves and others.
It never was easy to begin with. It's supposed to be. I look at difficulty as a dividing line that separates the people who give up and the people who are just looking for a shortcut. I like adversity, but I seriously don't think another service or another website or another revolutionary asset is going to change the problem.
The problem as I see it, is lack of common sense and lack of available education about the pitfalls of becoming an entrepreneur.
I run two businesses and quite successfully, but I know I wouldn't have been successful if I didn't have someone to show me where I was going wrong and someone who prepared me for the obstacles.
I would offer to your readers this. If they are looking to become an entrepreneur, a few simple steps to consider.
Don't get involved in any business where you can make more money bringing people into the business than selling the products/services - simply put, a business takes time and effort to become successful.
Be weary of "name-droppers" - for example, someone who has testimonials and names of people who are successful who you can't contact to verify. Every business, if they are successful and use testimonials should be verifiable - don't just take someone's word that they help x amount of people and have made x amount of money. Talk to the last 4 or 5 people that were involved in the business yourself.
Focus on quality products/services that people need as a base for building profit. People move in two ways. They move towards pleasure or away from pain. The reason they do things is either to do better, get more, etc. or to get out of something like debt.
Consumables and commodities are always a great place to start and I don't mean toilet paper and toothpaste and magic pills or drinks. There are several areas that people need to get things accomplished from hard products, services and yes, even information and advice.
And finally, if you're one of the long term jobless and you are thinking about getting into business - stick with what you know.
I am a musician so I started a music business. I also have a background in development so I start a development business as well.
If you're a mechanic stick with mechanics, if you were an accountant stick with finance, etc.
Unemployment and downsizing has a silver lining - as companies lay off and downsize it leaves a vacuum of services and products unfulfilled that they can no longer provide - it leaves room for you as an entrepreneur to fill that vacuum and profit.
There are currently such vacuums in industries all across the board.
As for real estate? Keep in mind that while the sky is the ceiling for profit, there is also no floor for loss.