NxBizSuccess » Small Business

Another Plug for Bootstrapping

Marilyn — Wed, 09 Jun 2010 14:14:05 +0000

An interesting article came out this week from Techcrunch.com on the benefits of bootstrapping a business to stay lean and hungry. Guest writer, Vivek Wadhwa, an entrepreneur turned academic, talks about his experiences starting companies with venture capital. He found that his decisions were about pleasing the board members rather than pleasing the customers. Wadhwa states, “Pleasing board members became an unnecessary priority.“ In the long-run the focus should be on building customer relations for long-term growth.

Research conducted by David Townsend, NC State University and Lowell Busenitz, University of Oklahoma, also showed that acquiring investment capital did not guarantee success. Is venture capital wrong? By no means, no. Venture capital can be a breath of life for a cash-strapped company that has huge manufacturing or other start-up costs. Each entrepreneur should research and critically assess their need for and type of capital investment that would best work for their business.

Wadhwa’s article reminds me of an interview I conducted with Derrick Eells last fall. Derrick and Jeffrey Eells own TenDot Travel, a Lincoln-based corporate incentive travel company. Bootstrapping was the name of the game to getting this business started. If what Wadhwa states is true that “capital starvation leads to innovation,” then TenDot Travel is the epitome of innovation. Derrick and Jeff started their business the day after they quit their jobs. Living out of their house, the Eellses began cold calling and competing against the industry giants. They had new innovative products that were making the industry clients rethink their prior relationships. Through determination and persistence, they won businesses over. To ramp up and keep costs down, they hired contractors instead of employees. They also looked to family and mentors to help with the business operations and decisions. As the business continues to grow, now reaching over the $1 million sales mark, the Eellses continue to stay lean and hungry for new opportunities.

Check out the Eellses’ videos : Passion, Culture and Sales, and Sales Tips for the Service Business and let me know your thoughts on bootstrapping the company, the pros and cons, and how you best bootstrap to save costs.

Until next time,

Marilyn Schlake, Associate Director, NebraskaEDGE Program, University of Nebraska-Lincoln

Terry Jones speaks at Governor’s Conference On Rural Development

Marilyn — Fri, 06 Nov 2009 17:39:00 +0000

On November 6th, 2009 at the Nebraska Governor’s Conference on Rural Developmentin Kearney NE, Terry Jones, founder of Travelocity.com and chairman of Kayak.com spoke about technology changing how we conduct business. It was a great presentation on innovation, rethinking and redesigning the customer relationship and our interaction with that customer.

Terry spoke of how the consumer is now in the driver’s seat and that we, as business owners, must listen to the consumer in order to survive, let alone be successful.

Terry termed the change as working in the “3rd Channel” (which will be a new book written by Jones). The 3rd Channel, or the Internet, is forcing businesses to provide the personal service that has commonly been identified with the traditional small store and combining it with the Big Box model of wide selection and low prices. The Internet makes it possible. Face to face interaction is no longer enough, business owners need to build digital relationships with their customers…they are expecting it. Today’s consumers use multi-channels to shop. Although they are still visiting the stores, they are also shopping by phone and online. To take advantage of these multi-channel shoppers, a business owner needs to provide multiple access points to their business. Listen to your customers and discover what they want, how they want the product/service delivered and what added benefits you can provide to make their lives easier. Convenience and service are basic demands of the customer.

If you have found great ways to capture the multi-channel shopper, please share your ideas. I would love to hear some practical ideas that really work.

To access Terry Jone’s presentation, please click on the link provided: http://www.neded.org/files/NCIP/2009/091104_Neb_Gov_Conf.pdf.

Until later,

Marilyn Schlake, Associate Director, NebraskaEDGE

How to Use Others’ Assets to Attract Buyers

Marilyn — Mon, 10 Aug 2009 19:48:49 +0000

Bundle Up. Use others’ assets to start your own company.

“I lost my job, so I’m looking for something entrepreneuerial that I can do. But I don’t have many resources. Any suggestions?” As the host of NxBizSuccess, I hear this question a lot.One idea is to become a packager of specialty products or component services that a buyer would prefer in a single, convenient solution….to become a ‘gateway’ or “switchboard.’ No equipment or capital is required, really. All it takes is the ability to make enough industry connections to achieve leverage with both seller and buyer. To begin, you must have a sales personality and use it to aggregate other small companies that are willing to work together (under your supervision) in order to generate sales they couldn’t have gotten without you.

Again, the key: Have enough subcontractors and customer prospects to create a concentration of power. It probably requires that you, the entrepreneur, have 15% or 20% of the subcontractors or vendors in a marketspace working with you in order to have leverage with the buyer. Relationship-building, trust (especially on pricing) and momentum are
the key.

This business model is used in the building trades, in Hollywood and in many creative or consulting businesses. But it’s becoming more popular in almost any industry where there are lots of parts and pieces and buyers value an integrated solution. Consider becoming a middle-man and a talent integrator if you lack the resources to build your own brick and mortar company from scratch.

Lynn Hinderaker, Host, NxBizSuccess

President, OmegaPointMarketing

Which is Best: Nimble or Powerful

Marilyn — Mon, 10 Aug 2009 18:18:36 +0000

Given the state of our economy right now, would you rather be a very small company or a very large company? When I interview small business owners and advisors on NBS (NxBizSuccess.com), I wonder how they would adapt to this turbulent situation if they were running GE, for instance. Would they fare any better than Jeff Immelt, who has a very
drawn look on his face these days?If you’re small, you should be extra-nimble. It should be easier to test a new product than if you are a large company. But large companies have resources. Industry association leaders pay extra attention to them, so they hear about new trends faster than their small competitors. For instance, P&G has created a world wide ‘innovation network,’ linking them to scientists, cool hunters and even street vendors around the world. This allows them to pick and choose among cutting edge trends as they emerge on the fringe of society.

If you had maximum freedom, would you choose to run a biggie – where established practices would slow you down, but you might eventually make a huge difference – or a start up, where you may toil forever in obscurity, no matter how good your leadership or product is?

Weigh in! Join the NBS blog community and make a difference right here, right now.

Lynn Hinderaker, Host, NxBizSuccess video training series

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