Lessons I Learned Today 6/26/09 – Entrepreneurship; Chicks with Credit Cards

This is a digest and recap of highlights, quotes, and comments from articles and discussions posted on this date on the Applied Entrepreneurship, LinkedIn group site.

 

*Family Business & Diversity: How 6th Generation Owners Continue the Legacy by Mark Obermeyer

“Simon Huber came to Starlight, Indiana in 1843 and settled the tract of land where Huber’s Orchard, Winery, & Vineyards stands today. Carl Huber was the 4th generation and brought up the 5th generation of seven children in the hard labor of harvesting all of the fruits and vegetables raised on the farm. Carl Huber passed away in 1966, causing the 5th generation to continue managing the business along with their mother Marcella. As in many family businesses, the next generation had “other ideas” to make money. This was the start of the “pick your own” product.”

“Ted and Greg Huber of the 6th generation, who worked in the business their entire lives, began working full-time in the mid to late ‘80s and worked with the 5th generation for 10 years, side by side. Ted and Greg were then appointed co-owners of the business in 1991.”

“Ted and Greg understood that diversifying makes sense if the plan matches your business model. The thought of becoming a distillery also seemed to fit well in the business model. They did a tremendous amount of research and traveled around the country. They found that one of the advantages they have is that they control the manner in which fruit is grown and harvested. They found that they were the first ones to pursue a distillery and winery license in Indiana.”

Dana Huber said “A hurdle is to always keep our eye on quality and never let our business plan stray us from our goal of ‘outstanding customer service and high quality products.’ Sometimes diversity can also be our challenge or hurdle, many things to do and manage. A hurdle would be to diversify our business in ways that only match our business plan.”

  

*What You Need to Grow Your Business: An Interview with Jazzercise Founder Judi Sheppard Missett by Merrin Muxlow

“What do you need to start a successful business?”

“It’s a question almost all entrepreneurs have pondered. Do you need a business plan before you start, funding to fall back on, or a detailed strategy for how your company will grow? Nearly half of all small businesses fail within the first year of operation- what’s the difference between those that fail and those that succeed?”

Judi Sheppard Missett built Jazzercise from a one-woman operation into an international corporation with over 7500 franchises worldwide. “I didn’t even get a business loan,” she told me- something virtually unheard of in many entrepreneurial circles.

“Too many business owners come up with an idea and try to find a market. Missett proves that the other way around is usually more successful- listen to what customers want, and figure out a way to give it to them. Do research on customer patterns, find a way to track behavior by hiring an online marketing company or tracking marketing campaigns and sales strategically.”

“Be willing to adapt and change to customer needs.”

“Planning and development aren’t just for startups. If your customer base is growing or changing, you need to grow and change, too.”

“Don’t wait to be in the right place at the right time- evaluate the resources you already have, and try to create opportunities for yourself.” As Judi Sheppard Missett says, “We are all in the right place at the right time, we just need to be aware of it.”

 

*Simple Strategies to Viral Marketing Online by Michelle Ulrich

Nice outline of strategies and some links.

 

*Young Guns: A Video Startup That Helps Others Prosper by Chrisitna Scotti

“Peter Chatmon, a 32-year-old filmmaker and founder of Double7 Film, thinks you do. Almost by chance, he stumbled on a niche business: creating short commercials for small companies–a trendy new take on the generic corporate video that his clients can then spread virally on the web.”

Q         “What one life lesson did you learn that helped you build your business?”

A         “Do unto others. It’s the simplest of principles that serves as the strongest foundation for any good relationship. We’re helping to build companies, but companies are made up of people, and people deserve respect. Respect feeds creativity as well as output and performance.”

Q         What do you wish you had more of: time or money?

A         Time. Money comes and goes but you can always get it back if you have good ideas, persistence, and offer something of value to someone other than yourself. You can’t get back time, and there is more value and reward by spending your time wisely than you could ever receive by spending your money wisely. Sleeping four hours a night is a clear sign that I need more time to do this thing I love so much!

Q         What is the one word your employees would use to describe you?

A         “Determined. In my opinion, no problem is too complex to be solved if I apply a continuous stream of creativity toward its resolution.”

 

*Store brands gaining in popularity

“The recession has been a boon to stores selling their own brands. A new survey found 91 percent of shoppers who switched to store-brand products from name brands will keep buying the store brand, even after the recession ends.”

“Quality is a big factor, and a poll found nine out of 10 shoppers said the store-brand products are just as good, or better, than name-brand products.”

 

*SBA alters loan refinance terms by David Bertola

“Small businesses looking to expand are now able to refinance existing loans to buy real estate and other fixed assets as a result of permanent changes to the U.S. Small Business Administration’s 504 Certified Development Company loan program.”

“The legislation allows 504 program projects to include a limited amount of debt refinancing if there is a business expansion and the debt refinanced does not exceed 50 percent of the projected expansion cost. The following are some conditions under which borrowers will be eligible for refinancing:”

• The debt being refinanced was incurred to acquire land, to construct a building or to purchase equipment. The assets acquired must be eligible for financing under the 504 program.

• The existing debt is collateralized by fixed assets.

• The existing debt was incurred for the benefit of the small business.

• The new financing provides a substantial benefit to the borrower when prepayment penalties, financing fees, and other financing costs are taken into account.

• The borrower has been current on all payments of existing debt for one year prior to the date of refinancing.

“The permanent changes allow small businesses to restructure eligible debt to help improve their cash flow which, in turn, will enhance their viability and support growth and job creation. The 504 loan program can be used to purchase business real estate or fixed assets, such as heavy equipment or machinery, and expand current development projects.”

“Additionally, on June 15, SBA’s American Recovery Capital loans became available for small businesses facing immediate financial hardship.”

 

*BlogHer blogging network has big plans for $7M venture infusion by Mary Duan

“Lisa Stone, Elisa Camahort Page and Jory Des Jardins were three self-described “chicks with credit cards” who set out to answer the question posed by a Washington Monthly writer: Where are all the women bloggers?”

“Stone, the first Internet journalist awarded a Neiman fellowship by Harvard University; Page, a marketing executive and business blogger; and Des Jardins, a writer and media strategist, knew the women were out there. So the “chicks” used their credit cards to rent out some space at the TechMart in Santa Clara and formed BlogHer LLC with the idea of holding a conference for women bloggers.”

“What started as a single conference with 300 attendees has become a series that routinely sells out, a network of 2,500 bloggers.”

The company now has 30 employees and has raised $15.5 million, including a Series C round of $7 million.

“We bootstrapped and then we had two painful years. We had major sponsors who said we love you, but we need you to be bigger,” Stone said. “We needed to become a nice little conference or we needed to grow.”

“They’ve been able to grow through the fundamental understanding of a few basic facts: women control 83 percent of household dollars, and thanks to the economy, they’re now thinking more about how and where to spend that money, the company says.”

“BlogHer reaches 15 million women a month, Stone said. For its network, the company takes 10 percent off the top from an advertiser, and splits the remaining 90 percent with bloggers who feature a company’s ads.”

“What we have always tried to do is put the user first. We designed BlogHer around what she wanted to do and gave her a way to take it to market,” Stone said. “We have an understanding of what the female consumer wants and developed a way for marketers to work with her.”

BlogHer fills a hole in the ecosystem and is “laser focused” on its customers.

 

What I Think

I think it is pretty cool that three self-described “chicks with credit cards” have been able to find a “hole in the ecosystem,” use their credit cards to start a business which reaches over 15 million women, and have now raised over 15 million dollars, all in under five years. These entrepreneurs were certainly not rookies, but their story is impressive. Their fundamental understanding of the market they went after, and their “laser focus” on their customers, is apparently about to pay huge dividends.

Jazzercise founder, Judi Sheppard Missett, was also able to start her franchise on a shoestring and without need for a business loan. Like “the three chicks,” she had that “lightbulb” moment and adjusted her business to give her customers what they wanted. Rather than coming up with an idea and then trying to sell it to customers, she and the three chicks found out what their respective customers wanted and figured out a way to give it to them.

It can obviously cut down on development time and the need for start-up cash if you simply target the population you want to serve, listen to the customers within that segment to see what they want or need, and then develop the simplest and most effective way to give it to them. In both cases, the entrepreneurs could be considered to have been at the right place at the right time. As Missett says, however, “We are all in the right place at the right time, we just need to be aware of it.”

Creating a customer-driven business also reduces the time between startup and realization of return on investment. As Peter Chatmon says in Chrisitna Scotti’s Young Guns article, “Money comes and goes but you can always get it back if you have good ideas, persistence, and offer something of value to someone other than yourself. You can’t get back time, and there is more value and reward by spending your time wisely than you could ever receive by spending your money wisely.”

 

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If you enjoyed my impression of these articles, why don’t you read them for yourself and see what you and I missed or hit? Join the Applied Entrepreneurship group on LinkedIn. Membership is free and I try to post about ten articles a day there. We have some great discussions going and if you are an entrepreneur, we hope you will join us.

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Posted in Applied Entrepreneurship, entrepreneur, Family business issues, Franchise, Growing a business, Innovation, Planning for a business, Women Business Enterprise
2 comments on “Lessons I Learned Today 6/26/09 – Entrepreneurship; Chicks with Credit Cards
  1. we want to give much care about Credit Cards, it can be misused.

  2. bizlawblog says:

    I totally agree with your comment. I would never recommend to a client that they “fund” their startup or expansion with credit cards. I have quite a few clients who come to me after they are established and have financial problems, only to find they have run up huge personal credit card balances, often with a spouse, in an attempt to “save” their company.

    I understand the tendency of small businesses to try to use this source to handle a temporary cash shortfall, but almost inevitably, in the current economy, this will lead to disaster. Even in a good economy, this is often a warning sign of other, deeper problems. If they had a problem which led them to this point, in my experience, the odds are that the credit card interest payments and rising balance will only lead to bigger problems shortly down the road.

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