If you are like most entrepreneurs, you have BIG plans. The success journey can be a long one and you are eager to take that first step. The question is…which one should it be? Like a toddler who is taking those first tentative steps, some will be met with words of encouragement and applause and others many have you landing on your backside with a thud. Either way, if you don’t pull yourself up and step forward, you will never get anywhere. Read the rest of this entry »
In his recent remarks on the October Jobs Report, President Obama said…
“I am open to any idea, any proposal, any way we can get the economy growing faster…”
(If you can not see the video, you can find it here on YouTube.)
Thank you for asking Mr. President, here is my list:
First and foremost, focus on the sectors that are proven job creators.
Research from the Kauffman Foundation shows that newly created and young companies are the primary drivers of job creation in the United States. Added to this, data from the Edward Lowe Foundation and their research on Second Stage Companies that shows that establishments with 10 – 100 employees and $1 million to $100 million in revenue have created the vast majority of the net new jobs over time. (Take a look at the data at www.youreconomy.org)
So if you are looking for job growth, focus on providing early stage and second stage companies what they need – and the American people will get what they need – more jobs.
These businesses need access to capital to grow and to create jobs.
The fuel that drives job growth in these growth sectors is capital. When there is a steady supply of capital, there is a steady supply of new jobs. It is capital that funds innovation, that purchases resources for manufacturing and supplies the catalyst for future growth.
Where does the money come from?
The capital that fuels growth in early stage and second stage businesses comes from the following areas – the life savings of the business owner (including IRA’s and 401K’s with penalties), credit cards of the business owner (personal or business issue), F&F (Friends and Family), Angel Investors, Private Equity/Venture Capital, SBA Loans, Traditional Lending, Public Equity Markets and most important of all CUSTOMERS.
In addition, the capital for growth often comes from operational cut backs and efficiencies inside the business, and more often than many would think, a business owner that is forgoing a paycheck while working 60 – 70 hours a week to keep things growing until the cash flow problem gets fixed.
So if we need capital to grow these businesses and create jobs here are some suggestions:
Life Savings and 401K’s
Forgive penalties on withdrawals from IRA’s, 401K’s, and the like made by business owners for the business or to feed their families while they personally went without wages to keep the business alive AND allow them to put the money back in when things get better again.
Extend the protections in the CONSUMER CREDIT PROTECTION ACT to include credit cards and charge cards that are issued to a business IF the card is personally guaranteed by the individual card holder. These “business cards” are actively marketed to small business owners yet do not carry the same protections as those issued to “consumers”.
Friends, Family, and Angels
After the business owner, the most common form of early stage capital infusion comes from friends, family and Angel investors. Interestingly these are the same people that will be adversely affected if the Bush Tax cuts are not renewed AND these are often the same people that are paying the lion’s share of taxes already. It is critically important the that Bush Tax Cuts be made permanent. The goal should not be to have a few people pay more – the goal needs to be stimulate job growth so that more people can pay something!
Private Equity and Venture Capital
Private Equity and Venture Capital have played major roles in the growth spurts of high growth and high potential companies. These American businesses and private investors invest in American businesses and can be a supercharger on our growth engine. Lynn Tilton, chairman and founder of Patriarch Partners, traveled to Washington with a plan to help companies and spur job growth based on a proven model that she uses in her own companies. This process is so unique that the US Patent Office issued a patent for it. (Click to view Lynn Tilton’s patent.)
Administrator Karen Mills and her team at the SBA are making real progress with the expansion of the SBIC program but wouldn’t it be great to have more leaders and investors involved in this effort to create a lasting solution? Perhaps it time to take another look at her proposed SME Rescue Loan Plan or perhaps give her a call.
Tax breaks for small businesses
Mr. President, you often speak of your support of tax breaks for small business. Any tax break that allows businesses of any size to reinvest in the business and create more jobs is a good thing. BUT, it is important to remember the tax breaks only benefit companies that are making profits to pay taxes on. Many of the companies that will grow and create jobs now and in the future are investing ahead of the curve and are not yet profitable. For these companies, a tax break is an empty promise.
Instead perhaps a good idea would be tax breaks, tax credits, or other incentives for private equity and angel investors to motivate more of them to get out of the “parking lot” they are currently in and put their money to work in businesses that are creating jobs. The American people have invested in Wall Street Bailouts, Cash for Clunkers, and credits for energy efficient appliances. Perhaps its time we invested in American investors who are putting their hard earned money into American businesses.
Innovation is my personal passion. My definition of innovation is simple. Innovation is doing something in a new way that makes life better. Just as we as business owners, investors and innovators need to focus on changes that make things better – we need you to do the same in Washington. This includes:
- Reversing the provision in the Healthcare Bill that will require all businesses to file a 1099 for EVERY supplier over $600. At a time when you need us to run faster, you are tying our ankles together with red tape. I know that Congress is the team that needs to fix this problem – but could you whisper in their ear?
- Cut down on the red tape in general. From an ever growing list of regulations on how we get things done to a multitude of forms in triplicate or worse when we do business with government agencies, it is getting harder to do business when we need it to get easier.
- Work with Congress to fully support the SBIR program on an ongoing basis instead of continually placing Band-Aid on it to keep it going. According to the NSBA, “small R&D companies employ 38 percent of all scientists and engineers in America. This is more than all U.S. universities and more than all large businesses. Furthermore, these small companies produce five times as many patents per dollar as large companies and 20 times as many as universities—and more small-business innovations are commercialized. Yet small companies receive only 4.3 percent of the federal government’s R&D dollars. The SBIR program provides more than half of this amount.” Here’s a suggested innovation – set a permanent requirement to allocate government innovation contacts and SBIR awards to small business based on the proportionate share of innovators they employ. If we generate results like these at just over 4%, just imagine what would happen if we had almost 40^% to work with.
- Create a fast track program for new technologies and innovations moving from Phase I to Phase II contracts with government agencies. With today’s backlog, some very promising companies and the technologies they have created could disappear due to delays that in some cases have been more than a year.
- Drive innovation within the US Patent Office to take the costs out of what we need to do to protect American innovation. Many small businesses can not afford the cost, time and expense as it is. And for many of them, a patent is a of little value since most small businesses can not afford the cost to defend it. (Small business patents are being violated on a regular basis and the response from big business is “sue me” when they well know that the small business could never afford to go the distance or carry the burden hundreds of thousands if not millions of dollars in legal fees.)
So Mr. President, you asked for suggestions. These are mine. I don’t know if you will ever see them, but I truly hope that someone on your team is listening. We’re all in this together after all.
About the author:
Joan Koerber-Walker, MBA is a small business owner and an angel investor who makes her home in Phoenix, Arizona. As a blogger she has personally interviewed Lynn Tilton on several occasions and has personally worked with Patriarch Partners and its portfolio companies and seen the results of what the Patriarch process can do first hand. In addition she is a past CEO of the Arizona Small Business Association and a past member of the board of trustees for the National Small Business Association. During that time she met with and shared ideas with hundreds of small businesses and second stage companies on key issues including health care, workforce development, regulation, taxation, and access to capital. She currently serves the small business community as a volunteer ambassador for SCORE in Phoenix, Arizona, as chairman of the Opportunity Through Entrepreneurship Foundation and as co-chair of the Arizona Entrepreneurship Conferences (AZEC10) which will gather together over 300 entrepreneurs, small business owners and investors together to share ideas, connect, and hit the “reset” button on their businesses on November 17, 2010 in Phoenix, Arizona.
To contact Joan Koerber-Walker, click here.
Each year in January, I try to plan my calendar to meet with friends in the first two weeks. I have a diverse group of friends ranging from entrepreneurs to folks from corporate America, from local community volunteers to national leaders, and from neighbors to old school chums.
By reaching out, reconnecting, asking questions, and listening, I get a really good cross section of what is happening and what is on people’s minds. It also gives me a pretty good feel for what to expect in the year to come.
It probably comes as no surprise that, when I did this is January of 2009, there were lots of rumblings of rough weather ahead. People where battening down the hatches and preparing to hold on to investments, jobs, and businesses by sheer will. Folks that I talked to did not know what to expect – but one thing was pretty consistent… they we not expecting it to be good.
Yet, this year, there is a different feeling in the conversations. I don’t know what it is – the stars in alignment, something in the water, or just the impact of moving into a new decade, but once again a message is emerging from all of these conversations – a common statement and theme that I am hearing from others…
2010 will be MY year!
The first time I heard it expressed by a friend with such confidence that I felt it too, I thought – ‘Wow, good for you.’ Then I heard it again – this time by a business owner – “This will be OUR year”. And then again from an entrepreneur, then a scientist, then a developer, then a non profit leader, and so on. The words were slightly different each time, but the theme kept repeating over and over again. 2010 was going to be the year when they made a break through, grew their business, did something new, made a difference.
So, will 2010 be YOUR year?
We all have the chance to make 2010 our year. Here are a few things you might want to put to work for you.
1. Write down your goals and put them somewhere where you see them every day. A series of small goals that build on one another are better that one great big one. That way, as you achieve each small goal or milestone, the sense of accomplishment gives you more incentive and energy to tackle the next one.
2. Gather Great People Around You. Whether you call them a team, a posse, a workgroup or just friends, surround yourself with people who share your values AND your goals. By working together – things happen faster. The shared experiences of your team can also help you avoid pitfalls and mistakes that might shift you off course.
3. Focus in on the things that will make the biggest impact. It is too easy to be distracted by little things that can keep you from doing the important ones. Take the time to understand how you are most productive and then work with others to delegate or off load non core activities. Paying someone else to do the time consuming nuisance projects can save BIG money in the long run or free you up for more impactful or productive activities.
4. Use Processes and Systems to Your Advantage. The best businesses, projects, and ideas are those you can replicate over and over again. Figure out what works best, get it down on paper and integrate it into HOW you get things done. By creating repeatable systems or processes, you save time, save money and often by analyzing the system – continue to improve it.
Never forget that “2010 will be MY year”.
Stay positive and positive things happen. Don’t let anyone tell you differently.
Make 2010 your year.
Thanks for stopping by. Stay Tuned.
You’ve probably had the experience where through the diverse objectives and perspectives of the people on your team, what you set out to create and what you got where not exactly the same. As concessions are made to reach a point of consensus, a completely different animal begins to takes shape.
It has been said that “a camel is horse designed by a committee.”
Interestingly, having researched this much quoted maxim, there is no true consensus on WHO actually said it first.
As leaders, be it in our home, in our business, or in our community, we are often in a position requiring a promise or commitment. In many cases, to keep that promise or commitment will require the help of others, and often to get that help, you face a compromise.
When you look at the definition of the words as indicated in the links above, I found something interesting. They both come from the same Latin root – promissus which means to send forth and compromissus which means to send forth mutually or together.
Over the last two years, watching national and world events, I have seen many examples of this, but no better examples than what we have all watched unfold in Washington D.C.
Throughout 2008, we heard a lot of promises from candidates ranging from local offices up to the highest office in the land. But, then that is to be expected. We as a people have come to elect people based on what they say they will do as opposed to what they have done or what they can actually do. Seem confusing? Here is an example…
On January 11, 2009, the New York Times published a list of Candidate Obama’s Campaign Promises. They made a truly impressive list. Yet for the most part, the list was a list of objectives that acting alone, no U.S. President could keep. (To be fair, if you go back to the ‘promises’ made by the other side, the list was equally impressive and if acting alone, equally unsupported.) For the reality is, in the United States, we have a system of checks and balances between the Executive Branch, Congress, and The Judiciary. The Legislative branch makes the law. The Executive branch executes the law. The Judicial branch interprets the law. Each branch has an effect on the other and for any campaign promise to be kept, all three must be in agreement.
To reach that agreement, there often must be concessions and compromises before we can move forward together. It can be challenging to get TWO people to agree on a contentious issue. Imagine how much harder it becomes when you are looking at creating consensus among one President, 100 Senators, 435 Congressional Representatives, and ultimately if needed 9 Supreme Court Justices. Add to that truly monumental challenges like access to affordable healthcare, a less than popular war, a financial collapse, a national deficit so large that the numbers can not be conceived by the average person, and some of our largest states on the verge of financial insolvency.
Looking at it from that perspective, does it come as a surprise that concessions and trade offs are being made to get ANYTHING accomplished?
Over lunch with a friend last week, we were discussing what it takes to get things done. Not just in Washington, but in our businesses and in our communities. Often, no matter what you do, no one is completely happy with the final result. In life, just as in Washington, there are trade offs and compromises that must often be made to that we can move forward. In one way or another, progress comes at a price.
The true challenge, as individuals and leaders, is to have a clear understanding, BEFORE you make a promise, of what will be needed to gain consensus and to get all the support you need to make it happen. Otherwise, instead of ending up with a sleek and agile Horse, you just may end up spending your days with a Camel!
Thanks for stopping by…Stay Tuned.
I first met Michael Gerber in November of 2006 when he generously gave of his time and knowledge to come to Phoenix as a volunteer to speak at the First Annual Arizona Entrepreneurship Conference. OTEF was a fledgling organization in those days – but we had a dream – to provide entrepreneurial education, mentoring, and support to at risk populations in finding economic sustainability through entrepreneurship. To do that we needed the funds to offer programs and the conference was a way to share our message and raise the funds to pursue the dream. Our project captured Michael’s imagination.
Since that day, we’ve had the opportunity to get to know each other better. During my years as CEO at the ASBA, Michael was a wonderful supporter, sharing his knowledge on teleconferences with our members, coming, with his wife Luz Delia, to share in the celebration of the 2007 Arizona Companies to Watch, sharing ideas with me and our small business community at the Enterprise Business Conference in 2008 to celebrate Small Business Week, and best of all inviting me to The Dreaming Room and plopping me down in the Hot Seat for a challenging one on one session.
Over the years he has had many titles – but my favorite – is Chief Dreamer. When you get to know him, you see how important the dream is to him and to the tens of thousands of entrepreneurs he has worked with.
In the video below from the Cisco Innovators Forum, Michael shares some of his thoughts on how entrepreneurs can get it right from the beginning. After the video – I have a few questions of my own to ask the one and only Michael Gerber.
“A life without a dream is a life without a purpose. A life without a purpose is a life without meaning.” Michael Gerber
JKW: Michael, in your books, seminars, and programs, you share the secrets of entrepreneurial success. You have spent decades sharing these secrets – WHY do you do it?
MG: What else would I do? Everywhere I look, people are suffering for a lack of direction. During my life I have worked with thousands of those people, and as they begin to see their lives through the entrepreneurial prism dramatic shifts occur. It’s a fantastic feeling to witness those shifts.
JKW: You have made a career helping entrepreneurs succeed in achieving their dreams. Have you always been successful or was there a time when something happened that others would term an entrepreneurial failure? If so, how did you recover?
MG: I’ve had so many failures I can’t count them. In fact, I don’t even want to, the pain is too great. But, at the same time, my failures have always led to successes. Not necessarily connected, perhaps, but the one, the failure, taught the other, the success, that the deliberate straightforward path is not always the best path, that the success is most often realized as an epiphany that arises out of the failure in a completely unexpected fashion. So, I have come to look forward to the unexpected.
JKW: You have written over 13 books for entrepreneurs and you have a new one being released in January 2010. Can you give us a little sneak peak at what it’s all about?
MG: It’s name is The Most Successful Small Business In The World: The Ten Principles. It speaks to the essence of what I believe must exist in an enterprise, and an entrepreneur’s relationship with it, for it to truly flourish. You’ll have to read it to find out the secret.
JKW: When you are not writing, speaking, and inspiring others, I know that you like to read – a lot. Whose book inspires you – and why?
MG: I read fiction, not business. I rarely read anything to do with business. The reason is, I don’t learn from books, I learn from action. On the other hand, I highly recommend that all small business owners and entrepreneurs read my books. Because unlike all other business books, my books are born out of the actions I’ve taken, and the conclusions I’ve reached as a result of those actions. In short, they are less books, than they are cautionary tales.
JKW: You and I have talked about social media, blogs, Facebook, and Twitter as it has been evolving. So Michael, do you tweet?
MG: Not yet, but soon.
JKW: I’ve heard that this year, as a special gift, you are hosting a FREE con call on New Year’s Day with entrepreneurs to help them kick the year off right. How can our readers participate?
MG: Very easy. Just call in at +1 (866) 951-1151 (Conference Code Number: 1984938# )
It starts at 4 p.m. PST and will last 90 minutes. I do this every year, but this year is special, as my new book comes out on January 6th, and during my Teleconference I’ll be sharing The Ten Principles for creating the most successful small business in the world.
JKW: Thanks so much Michael for taking the time to answer a few questions. As you know, I always have more. I guess I’ll just write them down and heave them ready for when I see you in Phoenix for a Meet Up on January 25th. (Readers: Stay tuned to @joankw for more details in January.) Who knows – maybe some of our readers will be there too and have new questions for both of us.
So readers, what do YOU think. Are you ready to kick off the new year right? I’ll be on the call – will you?
Thanks for stopping by. Stay tuned…