Entrepreneur Ready Claremore

As I've posted previously, the Innovation Center at RSU has been working with city leaders and stakeholders since May 2011 on the Entrepreneur Ready Community Certification process.

Becoming an entrepreneur ready community means the overall business climate is supportive and business resources are available and easy to find.

Throughout the last twenty months, a Leadership Team has been working diligently to ensure our community is ready for business. The team conducted a survey of entrepreneurs to determine their needs. The team also conducted a focus group, interviewing successful business owners about the business environment in Claremore. The city developed a business resource page on their website that serves as a central location for information and services related to starting and operating a business in Claremore. Local Finance professionals have been working together to ensure business finance resources are available and easy to find.

Claremore has many assets to leverage for growth and continued prosperity. It is important that all stakeholders in the community take a positive and proactive business approach in ensuring policies, procedures and the general environment are conducive to business and sustainable growth.

Here’s a list of the Leadership Team members who have made this possible.

• Bill Biard
• Bryan Bradley
• Dr. Ray Brown
• Dell Davis
• Daryl Golbek
• David King
• Odessa Parks
• Terri Peters
• Dale Peterson
• Matt Mason
• Del McClung
• Bill Salwaechter
• Bill Shortridge
• Lynn Wilson
• Cassie Woods

So where do we go from here? Well, in some ways our work is only beginning. The leadership team will continue to meet on a quarterly basis to carry our projects forward. If you are interested in being involved, please do not hesitate to contact myself or one of the team members. We welcome your feedback, time and expertise. 

Mommy, where do jobs come from?

I'm about six weeks late in posting this. My new job has been eating my lunch. So I'm blogging today to answer the question, 'where do jobs come from'. You may remember the Virginia campaign stop our current President made about six weeks ago. In his speech, he recommended everyone take the time to thank those who've helped make us successful. This is a great suggestion and I highly recommend we all do this regularly in our life.

He then went on to say that if you have a successful business, you didn't build that. Someone was there to help you along the way. This caused a great stirring of debates, some of which suggested his words were taken out of context. I was watching the speech, live on my tv. I actually pushed the pause button on my remote when those course words left his mouth. I hit the rewind button all the way to the very beginning of his speech. I wanted to fully grasp the entire context of the speech. No, my ears weren't mistaken. The President of the United States just suggested entrepreneurs do not build businesses.  So I thought this a prime opportunity to cover a fundamental belief that all economic developers need to understand.

Only entrepreneurs create jobs. Period. 

Sure, there are other jobs out there. Mine for example. I work for a state institution. My institution taxes entrepreneurs to write my paycheck. The President of the United States works for people he taxes to receive his paycheck. 

Then there are those who work for someone who owns a company. When my husband sold his business, he went to work for a guy that has the largest privately owned manufacturing company in his industry - worldwide. The founder of the company has 600 employees now yet he started the business from the back of a pickup truck.

The last type of business someone can work for is a charitable organization. These groups rely on support from the entrepreneurs who create the jobs or from the general public (who work for someone who built a business).

So to recap - only entrepreneurs create jobs. All others either work for somebody who owns a company, or work for an institution that taxes somebody that owns a company or work for someone who relies on charitable contributions from someone who owns a company. So if you own a business, did you build that? Let's break it down...

Did you pull money out of your personal savings account to put down on a loan for the business? 

Have you ever lost sleep over how to make payroll the next day?

Did you miss a kids soccer game so you could help a customer or client?

Did you turn in a 8-5 job for a 24/7 responsibility?

Do you sign paychecks?

Do you pay taxes?

Sure there's people along the way that helped, but did you build it? Only you can answer that. 

As for me and my former business...yeah, I built it. I would love to have some comments from actual business owners on this one. 

Crowdfunding

This past April, President Obama signed the Jumpstart Our Business Startups (JOBS) act. The act wipes away many of the regulatory restrictions on small businesses where investments are concerned and covers the following investment areas: IPO, solicitation, regulation, thresholds and crowdfunding.

Crowdfunding, inspired by crowdsourcing, describes the cooperation of people to pool their money together, usually via the Internet, in order to support efforts initiated by other people or organizations. Crowdfunding can occur for a variety of purposes, from disaster relief to social entrepreneurship to artists seeking support, to political campaigns. Crowdfunding enables entrepreneurs to raise money in relatively small amounts from large numbers of interested investors.

Previously, entrepreneurs couldn't sell shares of their business (stock or equity) to the general public. Now, with limited restrictions, small businesses can raise up to $1 million from small-time investors. However, existing crowdfunding can't be used to sell stock or equity in a business. At least not until all the regulations are finalized through the act. Here's a list of a handful of crowdfunding sites. There are hundreds out there, most focusing on a specific niche.

www.kickstarter.com – first online platform and currently the world’s largest
www.indiegogo.com – creative projects
www.appsfunder.com – for mobile web apps
www.launcht.com – allows others to create their own crowdfunding platform
www.crowdcube.com – equity based crowdfunding platform
www.quirky.com – for inventors
www.rockethub.com – for creative projects
www.wefunder.com - for start-ups in general 
www.startupaddict.com – for start-ups in general  
www.newjelly.com – for artists
http://mycofolio.com/ – local crowdfunding
www.startsomegood.com – social entrepreneurs
http://peerbackers.com/ - crowdfunding using social media platforms
http://www.eppela.com/eng/ - based in Italy
http://www.pozible.com/ - based in Australia 

I recently posted about the Oklahoma business survey in which the #2 challenge was access to capital. This isn't breaking news because when surveyed, entrepreneurs and business owners will most likely say one of the their greatest challenges is access to capital. With all the funding options available, it's not clear to me that a shortage truly exists for funding viable start-ups. Banks and personal investors are lending and investing at usual rates. One thing I do know for a fact, it's not easy. There is massive risk involved which is why some could find it complicated. Quick and easy isn't good when it comes to funding. Fifty percent of all angel funded deals fail without a penny returned to the investor. Only ten percent of those deals are home runs.

The purpose of this post is to capture this moment in time, not necessarily provide my own opinion. Many new challenges and opportunities will arise from this and it could be a game changer. It could also be a bubble that will burst. I'm curious but cautious. 

And the survey says...

I've been talking about the concept of Economic Gardening (EG) in a few of my previous blog posts (and here and again here). The concept is based on growing your own businesses vs. spending time and resources to attract outside businesses in. Economic development is a three-legged stool, thus requiring a balanced approach to maintain stability. One leg represents recruitment/attraction; one leg represents business retention/expansion; the last leg represents entrepreneurship. Economic gardening has been compared to the business retention/expansion leg however one large difference occurs. Business retention and expansion is still movement focused. Business recruitment/attraction is also movement focused. It seems movement focused strategies aren't viable for rural communities and they're not sustainable for economies in general. If we can woo a business to town, what's to keep another community from wooing the same business? Chris Gibbons has proven this after twenty five years in Littleton, Colorado. Other communities have followed suit and proven it as well. 

The governor of Oklahoma recently surveyed business owners across the state. The survey was quite comprehensive and regardless of your political affiliation, the survey results are intriguing (data is data regardless of what side of the aisle you stand on, that's the beauty of data).

Here are some interesting highlights from the survey:

• 92% of respondents were employers with less than 100 employees. 46% of that had less than 5 employees.
• Greatest strength – quality of higher education (yay! because I work in higher education)
• Greatest challenges - #1 workers comp costs; #2 access to capital; #3 business incentives and #4 business assistance programs
• 73% of respondents have not used any of the Oklahoma incentives available

The survey results are important to the EG concept. First of all, economic gardening puts a focus on entrepreneurial businesses, specifically 2nd stage growth businesses (those with 10-99 employees). As represented above, 92% of those who took the survey would fall into these classifications (entrepreneurial or 2nd stage growth). 

Secondly, economic gardening focuses on pouring resources into these businesses in your community as opposed to spending resources to attract from outside. One of the top five challenges expressed in the survey is access to business assistance programs. Having worked for a business assistance program for the last seven years, I can tell you first hand that business assistance programs are a) important and b) underutilized. Have you ever met someone who desperately needed the help of a professionally, licensed counselor for personal issues but refuses to seek assistance? Same concept applies here. There are businesses who need professional assistance but refuse to seek the assistance. I completely understand where they're coming from. It's very difficult to ask for help. Back in the day when I signed paychecks I probably wouldn't be standing in the business assistance line. Makes me wonder if respondents aren't satisfied with current business assistance programs or if they're unaware of the programs that currently exist. I guess I have work to do in this area. 

Thirdly, the businesses say they need more business incentives (challenge #3) but 73% of the respondents have not taken advantage of business incentives out there. Does this mean the Oklahoma business incentives are irrelevant and need to be re-vamped? Or are they unaware? I do believe further investigations should occur. One interesting perspective can be seen in the state of Michigan. You may remember the auto industry crash in 2008. At that time, Michigan relied on the auto industry much like we in Oklahoma rely on the oil/gas industry. Reviving the state took more than a band-aid. They needed a serious strategy focused on diversification and sustainability. In 2010, the governor of Michigan, Rick Snyder, removed every state-wide incentive available for businesses. This type of action is unheard of in typical economic development. He replaced all incentives with business support in the form of....you guessed it...Economic Gardening. Thus far, the progress has been amazing. He's speaking at a national conference next week on the numbers but jobs and businesses are up. Industries are expanding. Communities are diversifying. Way to go Michigan!

Now to convince Oklahoma legislatures and Department of Commerce to consider Economic Gardening...wish me luck : ) If the concept of Economic Gardening has intrigued you (or offended you) save the date to attend our third-annual statewide Economic Gardening conference November 15, 2012 at Rogers State University in Claremore.   

The Golden Standard

I recently took a business trip and flew with American Airlines. The flight was great but the customer service did not meet my expectations. I'm going to share my experience in an effort to vent my frustrations and remind everyone in business about the golden standard - your customer.

6:30am on a Friday morning prior to spring break - the airport was abuzz at the wee hours of the day, full of college students and church mission trip groups, all eager to visit new places and conquer new experiences. I made my way down the aisle of the extremely crowded plane with a rolling suitcase and a small backpack. I hoisted my suitcase into the overhead storage bin a couple rows ahead of my assigned seat. When flying, I always store my luggage in this fashion which allows me to make a quick exit and not backup passengers behind me when trying to drag a heavy bag down from directly above my head. 

I proceeded to my window seat in which I was confronted by an angry flight attendant. She briskly asked where my seat was. I pointed at seat 19a, where two other passengers were scrambling to get up so I could squeeze in. With all 4 of us now standing in a very cramped space, she asked me why I stored my bag above someone else's seat. I explained my exit strategy very politely. With an angry look on her face, she began to ream me for putting my suitcase there. I calming asked if I should move it. She again ripped into me about where everyone's luggage should go. Again, I asked if I should move it. Going into round 3 of lecture, there was no end in sight. All the while, my two passenger neighbors and I are awkwardly standing in the aisle, which is now completely backed up with other passengers.

I was humiliated. She wasn't offering solutions of any sort and continued to treat me like an absolute criminal. No smile, no 'good morning'...just hatefulness. What happened to the day when the passenger was the customer? When flight attendants would help the passengers? If she didn't want my bag there, could she not have politely asked me to move it, or *gasp* move it for me? I guess she was too busy giving attitude to actually do her job? 

So what's the measuring stick all businesses should use to gauge performance, otherwise known as the golden standard? Customers. That's right. Those annoying people from whom your paycheck comes from (looking at American Airlines on this one). Reality check time: if you don't like your job, find another one!!!! Otherwise, suck it up, eat some cheerios, take a nap and deal with it.

Who's Your Market?

I often drive by businesses or shop in stores and wonder 'who is their target market?'. I wonder if businesses sometimes just open so they can do their hobby for a living. But let's assume a business person wants to make money in business. One of the first questions to answer is: who is your market?

Seems like such an easy question but yet it can be quite vexing to answer. There's the ifs, buts, whens, sometimes, depending on, maybes that get in the way. Keep your questions and answers very clear:

• Who did you get into business to serve? 
• How big is that market? 
• Can that market sustain you and your business?

My husband and I joke about putting a post-it note store in Booneyville USA. Pick a small town and imagine opening a very unique, niche business. That would seem odd wouldn't it?

Yet so many businesses are serving such a unique niche, in a very small market, and wondering why nobody is buying their stuff. Is it the community's fault for not shopping local? Is it the chamber's fault for not promoting your business enough? Is it the government's fault for eating up your money in taxes?

The answer is NO. If you are in business serving a wrong market, at the wrong place, with a wrong product, it's nobody's fault but your own. Analyze where you're at and make adjustments. Sometimes it's as easy as asking customers or potential customers what they want and how they want it. 

I am a firm believer in 'nail it then scale it'. Before you sign a lease a space to sell pigeon-shaped earrings in a town with a population of 500 people - go ahead and survey some people to ensure your business is viable.

There are so many ways to perform proper market research. If you're stuck or need some creative help - give me a call and we'll work out a plan. Whatever you do, take action, be intentional, don't just sit back with a 'build it and they will come' mentality. 

Job Creation

A hot topic right now is jobs.  The economy is still floundering and all the political pundits are screaming about job creation.  There was a republican candidate debate on TV last night and job creation was the most debated topic.  President Obama is set to speak tonight and the highlight of his speech - you guessed it - jobs. 

So where do jobs come from?  To save us all the boredom of a basic economics lesson, let me jump straight into a complicated graph.  Below we have the number of jobs in Oklahoma by year, spanning from 1992 to 2008.  The jobs are broken up into size and type of firm.  At the very bottom, we have the self-employed followed by various stages of business.  Each business stage is determined by number of employees.  Stage 1 businesses have between 2-9 employees.  Stage 2 businesses have between 10-99 employees and so on.  The non-resident stage is businesses with locations and/or employees in Oklahoma but with headquarters outside the state of Oklahoma.

So who creates the most jobs?  Small businesses?  Bigger corporations?  The lime green line at the top signifies Stage 2 businesses (those with 10-99 employees) create the most jobs in the state, followed by Stage 1 businesses (those with 2-9 employees).  Nonresident companies launched to the top around 2001 but took a sharp dive after that, landing them in third place for number of jobs. 

How do these results fit in with your perceptions?  Are you rooting for your community to host the next Google facility, large manufacturing plant or mega big box superstore?  These are great ideas but our support also needs to be given to the smaller businesses - as the data shows - they create the most jobs in Oklahoma.  I'd be interested to do this same analysis for Texas and Massachusetts.  Perhaps I could help Romney and Perry settle their argument :)