An entrepreneur is one who organizes, manages and assumes the risk of running a business enterprise. Statistics tell us that most entrepreneurs will fail in their attempts. There are many reasons for these failures, but I believe that there is something communities can do to reduce the failure rate. Let’s call it the Community Entrepreneurship Task Force (CETF).
When I was in graduate business school I was on a team assigned to meet with a local business owner and provide advice and consultation on operating her business. (For purposes of privacy certain details of the business have been changed in this column.)
The owner was a middle-aged woman who had opened a small retail business that sold soccer supplies. Her products included team uniforms, shoes, T-shirts, gloves, posters, watches and every imaginable accessory that a soccer player or fan could possibly need or desire.
The store was located on a once-busy traffic artery that was now being occupied with the fourth wave of new businesses. That is to say that the neighborhood was going down. The building that she rented began life as a service station in the days when full-service meant just that. It went on to become a muffler shop, a donut shop, a music store and several other uses before “the soccer lady” rented it for a song.
Our team noticed on our first visit that the store was clean, well stocked, had adequate parking and was not very busy with customers.
We interviewed the store owner and discovered that she went into this business because she had two sons and one daughter who played soccer over a period of several years. She became fanatic about soccer organization and happenings.
One of the problems she noticed was that there was not a good source of soccer equipment and accessories in the local area. Like any good entrepreneur, she saw an opportunity and opened her store several years later after her children were high school age. She had never owned or operated any kind of business in the past. This was her first job.
Like many entrepreneurs she knew a lot about her products and the people who used them. She just didn’t know very much about running a business. Consequently, she had gotten to the point that she was barely breaking even and wanted some assistance in how to increase sales and operate her business more profitably.
Oh, I should mention that she was the only employee and that she was at the store from 10 a.m. to 6 p.m. every day. If she had to leave, the store was closed.
Some of our team’s recommendations were that she move her store to a better location, preferably near the local soccer complex, install a business accounting software system, hire a clerk so that she could do outside marketing as the need arose, and redirect all her advertising to the soccer programs and fields from the local newspaper.
The last time I checked she was still in business in her new location.
On a more personal note, I had the privilege, joy and pain of being an entrepreneur and operating my own business for several years. One of the most valuable lessons I learned is to involve others in the enterprise. I took advantage of some clients and acquaintances and set up an advisory board to my little business. There were four of them, a CPA, an attorney, another business owner and a college professor.
Every six months I would take them to dinner at a nice restaurant get a private room and make a presentation to them on the results of the past six months and what I had planned for the next six months. They would then ask questions, make suggestions and give advice. Their participation in my business cost them very little time and me very little money. The result was that it forced me to have to evaluate my business every six months and make a presentation to an outside group that was interested in my success.
By the way, I also received a lot of new business from their recommendations.
These two cases illustrate how a community can do essentially the same thing. A Community Entrepreneurship Task Force would consist of a cadre of business people who could give advice to the new business owner in town. The CETF would also be available for the entrepreneur to make regular presentations and receive counsel.
The CETF could be a committee of the chamber of commerce, the local Main Street organization or economic development agency. It should not cost anything other than time.
For the entrepreneur it would be as if a free consulting organization from the community was there to help his or her business succeed. Communities that had a CETF just might be able to draw new businesses as a result.
If done correctly, a CETF might well improve the chances for success for a community’s small businesses.
Phil Hardwick’s column on Mississippi Business appears regularly in the Mississippi Business Journal. His e-mail address is firstname.lastname@example.org.