Book Review: The $100 Startup

Reinvent the way you make a living, do what you love, and create a new future

By Chris Guillebeau

Reviewed by Chris Wendel

Hardcover: 304 pages, $23.00     Kindle Version: $11.99

Publisher: Crown Business (May 8, 2012)

At first glance The $100 Startup may seem more like a gimmicky give-away from a late-night infomercial than a practical business book. It is clear that this book will never be confused with any late night promise of instant wealth or government grants. Instead, it delivers a set of realistic resources for those wanting to know how a small business actually works.

Written by 30 something whiz kid Chris Guillebeau, The $100 Startup centers on the testimony of 1,500 individuals who built businesses earning $50,000 or more from modest investments (in many cases $100 or less). Guillebeau chooses the 50 most intriguing from this group of 1500 and identifies the commonalities of people starting businesses based on their lifestyle, personal expertise, and passion.

The rise of the micro-business is the new reality of many people still crippled by the economic upheaval of 3-4 years ago. Long gone are the days of borrowing to the hilt, betting the farm (or home), or quitting one’s job to test a business idea. Entrepreneurs looking to make a living on their own terms and the advent of the internet have been the catalysts to this significant new wave of small business development.

Guillebeau reinforces this idea through his interviews with his case studies. Some of those profiled are accidental entrepreneurs that had a service that consumers wanted more of. Many devised ways of doing what they truly wanted to do while prioritizing their families and other personal interests.

The $100 Startup spends a lot of time discussing the expertise that each business owner had and how they matched skill set with a product or service that people wanted to pay for. Starting on a smaller scale, an idea can be tested for feasibility in the market before larger investments (including money and time) are taken on.

It is the book’s entrepreneur profiles that provide its most interesting component. Guillebeau stresses that not everything one is passionate about is that interesting to everyone else (“I may be passionate about eating pizza, but no one is going to pay me to do it.”).

Take the Excel spreadsheet expert that built an online business of downloadable guides and trainings that nets him $136,000 annually.  Or the veteran sales executive that is laid off and then starts a successful business selling bed mattress that he delivers by bicycle.  Then there’s the woman from Omaha who makes and sells custom made wedding dresses to brides all over the world. In each case the business was built around the owner’s interests and lifestyle with limited start-up overhead.

The $100 Startup lays out how much money these entrepreneurs needed to get their projects started, how they generated funding, and key mistakes they made along the way.  Much of this start small mentality is possible because of niche demands of today’s market place. Guillebeau’s examples are easy to relate to because they aren’t all “pie in the sky”. Many are cautionary tales that readers can read and learn from. He also includes with each chapter, bulleted summaries of pivotal areas such as pricing, business plans, marketing, business expansion and a relevant summary of how to write a mission statement.

This minimalist approach to business development counters many prevailing theories of job creation. Many of these are individuals choose to live in our region, patterning their business around their expertise and families, while spending money locally, paying taxes, and sending their children to our local schools. Some of these small start-up businesses grow from home-based businesses (Hagerty Insurance and baa baa ZuZu come td) into larger companies that provide a significant employment. Either way, it is clear that the micro-businesses phenomenon is playing out in a positive way for northern Michigan.

Chris Wendel is a consultant and lender with Northern Initiative in Traverse City. Northern Initiatives is a private, non-profit community development corporation that provides entrepreneurs with access to capital, information, and new markets.

Book Review: Ahead of the Curve, Two Years at Harvard Business School

• Hardcover: 304 pages
• Publisher: Penguin Press
• Four Stars (out of five)

Reviewed by Chris Wendel

The allure of a Masters of Business Administration (MBA) attracts many, as both a catalyst for career advancement and a ticket to a lucrative career. The number of MBA’s graduated from American universities has grown from 5000 in 1960, to 100,000 in 2000.

Regardless of the explosion of MBA degrees, the most revered (then and now) is the MBA program at Harvard University’s Business School (HBS). With a long list of accomplished alumni (George W. Bush, Mitt Romney, Henry Paulson, Michael Bloomberg, Robert McNamara), it’s worth noting that 20% of the CEOs of Fortune 500 companies have their MBAs from HBS.

Ahead of the Curve is an acclaimed first person narrative of Philip Delves Broughton, writer and Paris bureau chief for the London Daily Telegraph. After covering world events, Delves Broughton took a flyer with his career and applied to HBS.

Ahead of the Curve draws you in for two reasons. 1. Delves Broughton is an immensely gifted writer. 2. As an outsider, Delves Broughton enters into one of the world’s most influential global business institutions with an open mind.

The storyline follows the two years of Delves Broughton’s life as a Harvard MBA student. Thrown into the cauldron of financial case study analysis, Delves Broughton realizes he is a woefully behind his peers in reading financial statements and the simple navigation of an excel spreadsheet. To his credit, he is able to learn on the fly and adjust his technical skills to not just keep up but to also earn good grades.

It is the HBS culture that Delves Broughton struggles with. His commentary on the motives of many of the students, professors and HBS itself creates the bulk of the book’s interesting narrative.

Delves Broughton is older than the majority of his classmates at HBS, married with two very young children. His unique background and relative lack of business experience creates an insightful experience for readers. In the beginning Broughton is at odds with students that think that a Harvard MBA is a stepping stone to comfortable careers as hedge fund managers and venture capitalists than incorporating the HBS mission to “…educate leaders to make a difference in the world”.

At first Delves Broughton gravitates towards many of the foreign students who are appalled at the late party antics of the American students and take HBS’ claim as an international program as bunk. He loathes the profit motivated attitudes of students in his class projects and discussions, until late in his second year when he catches himself acting the same way. To his credit, during the two year curriculum, Delves Broughton absorbs enough to let go and critically observe both sides of the “How can I succeed without losing my soul?” discussion.

Delves Broughton’s experience with his professors is mixed. He concludes that the superior instructors have relevant business experience. The entrepreneurial course Delves Broughton seeks out is taught by a professor who has never started or run a business. When he and a colleague come to the professor with a viable start-up business concept, the professor shows nothing more than dismissive disinterest.

After his class graduates, Delves Broughton still grapples with the next steps in his own career. Most of his classmates have taken high powered jobs with luxurious salaries. To the outsider this is no surprise, yet in the end, Broughton cannot find a position that balances his professional career and his personal life.

Ahead of the Curve may be Delves Broughton’s way of finally parlaying his Harvard Business School education into a lucrative project. The book serves as the ultimate behind the curtain experience for those pondering a MBA. Delves Broughton’s money versus having-a-life discussions also make a great read for those at a professional crossroads or those seeking reassurance in the job they presently have.

 

Chris Wendel is the Regional Director for Michigan Small Business & Technology Development Center (MI-SBTDC). The MI-SBTDC assists businesses with business consulting, market research information, and entrepreneurial training. The Northwest Michigan Council of Governments is the host organization for the MI-SBTDC in the Grand Traverse region.

Half-baked or True Business Concepts

by Chris Wendel

Over the years, I’ve heard all kind of business concepts. Some never made it past the scribbled napkin stage, while others had little promise. The point is frankly, no one knows at first glance if a business concept is worth its salt until its market and financial feasibility is determined.

With this in mind, we are presenting a new segment in our weekly radio show “Small Business Focus”. This new feature is called “half-baked or true business concept”, featuring a business model that is an actual functioning business –or- one that is totally fabricated. We’ve tried this twice with interesting reactions from our audience.

The first “half-baked or true business concept” was called Mobile Dolphin Tank. It was actually an idea borrowed from Kevin Wildes, a recent guest on a www.grantland.com pod cast with Bill Simmons. The concept involves an 18 wheel truck that travels from town to town with tanks of dolphins. Like a circus the Mobile Dolphin Tank sets up shop for a few days and children are able to fulfill their life-long dream of cuddling and kissing a live dolphin, similar to an expensive SeaWorld experience.

The second week’s “half-baked or true business concept” was a combination laundry mat and adult entertainment center called Dirty Laundry. The idea was that one could wash their clothes, drink a beer or two, and well…you get the idea.

 Vic McCarty, the co- host for the “Small Business Focus” guessed correctly when he believed that both concepts were made up. Join us this week from 10:30 – 11 am on WMKT 1270 AM to hear the latest “half-baked or true business concept”.

Small Business Development Centers and SCORE, A Quick Orientation

It’s surprising how many people are in businesses that are unaware of the tremendous resources that are available to them. The obvious place that most entrepreneurs go to first is a local chamber of commerce. This is a good choice, but slightly under the radar are two organizations that offer no cost business consulting.

Small Business Development Centers (SBDCs) and SCORE were started by the Small Business Administration (SBA) to partner with local organizations and resources with the aim of providing “educational services for small business owners and aspiring entrepreneurs.”

Every state has a network of Small Business Development Centers, typically based at a university or community college. In Michigan a technology component was added several years ago to assist with emerging technology, thus changing the name to the Michigan Small Business & Technology Development Center (SBTDC).

Locally, the SBTDC has a Regional Office in Traverse City with satellite offices in Boyne City, Northwestern Michigan College, and Manistee. What’s important to remember is that the SBTDC has business consulting services from qualified consultants who have owned their own businesses and have gone through rigorous training. In addition the Michigan SBTDC provides market research information, business resource centers, and entrepreneurial training.

SCORE is nationwide network of volunteers that also offer their own no-cost business expertise to entrepreneurs. In Northwest Lower Michigan there are SCORE offices in Traverse City, Petoskey, and Ludington.

Last Chance to Get on the FastTrac® – Sign Up Today!

Fast Trac® New Venture® 
Entrepreneur Workshops

This intensive entrepreneur training is co-sponsored by the Michigan Small Business and Technology Development Centers (MI-SBTDC) and the Michigan Economic Development Corporation (MEDC).  Fast Trac® New Venture® will lead entrepreneurs from evaluation of a current business or concept to intensive instruction on all aspects of small business operations.

Fast Trac® New Venture® is a program of the Ewing Marion Kauffman Foundation, one of the nation’s leading organizations in advancing entrepreneurship. Students must have a current business or concept to enroll, as they will be producing a business plan as part of the course requirements.

Key Objectives

• Test your business idea.
• Broaden your understanding of business
• Plan your financial needs to avoid cash flow problems.
• Structure your business operations for efficiency.
• Develop entrepreneurial skills by learning from other entrepreneurs.

Program Features

• Ten weekly 3-hour sessions.
• Small group activities and hands-on coaching during each session.
• Text and online training materials are from the nationally recognized FastTrac^® New Venture™ program proven through use with thousands of businesses.
• Entrepreneur guest speakers.

Program Benefits

• Provide process to launch your business with confidence.
• Identify opportunities to start your business.
• Learn new concepts to apply to your business each week.
• Addresses individual planning needs.

Get on track fast! Orientation January 12, 2012 from 6-7:30p.m. at NMC’s Aero Park Campus, Parson-Stulen Building room 226. Pre-registration is required; register at Northwestern Michigan College or by calling (231)995-1700 with code 11559. For more information, please contact Meg at 231-922-3780 or meghavenga@nwm.cog.mi.us. The normal $700 per student fee has been reduced through scholarship funding provided by the MEDC; students pay only $140. Class size will be strictly limited, so please register early.

Book Review: The Coming Jobs War

The Coming Jobs War: What every leader must know about the future of job creation

Written by Jim Clifton, CEO of Gallup,

Reviewed by Chris Wendel

“The global war for jobs will determine the leader of the free world and if the United States allows China or any   country or region to out-enterprise it, out-job-create it, out-grow its GDP, everything changes.  This is America’s next  war for everything. From “The Coming Jobs War” by Jim Clifton

Job creation is a topic that still dominates the national media as well as state and local news. While there is plenty of rhetoric to go around with job creation discussions, few pundits have been able to quantify how serious our national employment situation may be in coming decades.

Written by Jim Clifton the Chairman and CEO of Gallup, The Coming Jobs War begins by laying out the perilous job forecast for the U.S. The book’s doom and gloom analysis will leave many readers detached and hopeless until Clifton turns more personable and positive in Chapter 4.

Perhaps it was Clifton’s intention to start out with a flurry of attention getting Gallup information (the man has after all, six years of comprehensive global research at his fingertips). His prediction going forward is that the world’s growing population will want 3 billion jobs, while the available supply will only provide 1.2 billion jobs. With jobs being today the main factor for people defining themselves, the society with the most jobs will come out on top. Clifton’s major point is that jobs are now the currency for economic might and if we as a country simply maintain the status quo, then we are in fact in deep trouble.

Behavioral economics is the cornerstone of the Clifton’s prescription for competing for future work and prosperity, or as he calls it “our World War III.” Armed with an arsenal of Gallup research, Clifton uses the bulk of The Coming Jobs War to illustrate how solving most of our ills involve an approach far different from classical economics based solutions held so tightly by traditional policy makers.

“So the big leadership breakthrough within behavioral economics is to manage, lead, and build strategies in the before, not the after”. The idea is to more accurately make policy decisions based on more economic and social demands because “…military force, religion, or personal values won’t work in the future like it has in the past.”

Clifton shows how behavioral economic data tracks what goes into a consumer’s buying decision before they purchase a product or service. “All of these small decisions are lost in most of the ways we try to create jobs. Clifton discusses how innovation is great, but without skilled entrepreneurs who can connect the innovation with paying consumers and markets, that innovation is useless.

Entrepreneurship therefore should be revered in our schools instead of standardized tests and the ability of workers to problem-solve and reinvent themselves for market conditions should become the standard.

This approach to job creation includes factors that bode well for the Grand Traverse region and if we pay attention, to Michigan as well. This includes local leadership that can orchestrate people and resources, and entrepreneurial innovation where start-up companies supply the majority of new jobs. Although Clifton claims that major job growth can only be accomplished in cities, that don’t eliminate strong ongoing efforts that are under way in smaller areas like Traverse City.

Clifton ends with a flourish, taking swipes at the unhealthy lifestyles of many Americans (that costs us billions annually) and our failing secondary educational systems. He also offers up reasonable solutions, but not without paradigm shifts for those making major policy decisions.

If you’re looking for a book that will clarify steps for our national economy to take going forward, this is it. The challenge will be getting leaders to read it as well.

Chris Wendel is the Regional Director for Michigan Small Business & Technology Development Center (MI-SBTDC) in Traverse City. The MI-SBTDC assists businesses with one-on-one business consulting, market research information, and entrepreneurial training. The Northwest Michigan Council of Governments is the host organization for the MI-SBTDC in the Grand Traverse region.

The Coming Jobs War, By Jim Clifton

$24.95 hardcover, 225 pages, Gallup Press

Available in most local bookstores

Gazing into the Crystal Ball for 2012

As another year draws to a close, it’s a good time to take stock of some of the new trends that will likely impact small business in the Grand Traverse Region in 2012.

Rural Development: This is a term that the State of Michigan has used frequently in the last year, mostly in regard to food and agriculture. While those sectors will remain important in 2012, our rural towns will be impacted by likely closure of some village post offices by the U.S. Postal Service. As a gathering place for small communities, these closures will negatively impact any future growth in those impacted village centers.

Going Mobile: The development of these same rural areas will be dependent on the continuing emphasis on broad band internet access. Local governments that are aggressive with securing internet access for their villages or the majority of their townships will become more attractive to new businesses and home owners.

The mobile theme will also apply to more urban areas as the popularity of food carts and mobile food vendors grows. We saw the beginnings of this in 2011, but the mobile food movement will create zoning problems for many local governments and conflicts with existing restaurants that feel threatened. Some of these restaurants will fight back with mobile offerings of their own.

Mobile marketing will be even more relevant in the coming year including mobile phone applications and cell phone friendly business web sites that customers will use to choose one business over its competitors. Companies with web sites that do not translate well to smart phone screens (or companies with no web site at all) will be at a huge competitive disadvantage.

Hopefully, mobile methods of credit card payment will become more prevalent for festivals, mobile vendors, and outdoor applications. With fewer people carrying cash, even the Salvation Army volunteers will soon have credit card accepting phone readers to compliment their bell ringing.

Growing Power of Online Reviews: More companies and individuals will become more clued in to how they are perceived online. Monitoring comments made by customers on mobile applications such as Yelp and Yahoo!Local will become a critical factor to the success launch of restaurants and hospitality businesses. Individuals will utilize sites such as Reputation.com to watch negative information on the web that can impact their persona.

Continued Emphasis on Entrepreneurship: The critical skills needed to succeed in starting business will be essential to job creation in the region. There will be more of an emphasis placed on developing entrepreneurship as a life skill at both the secondary school and with adult education levels. The idea of calculated success with the option of self-employment will be become critical to workforce development.

Don’t Forget Major Role of Christmas Trees in Local Agriculture

Hidden in the agricultural economy of Northwest Michigan is the production of Christmas trees. So many times we think of cherries and wine, when we think of our local agricultural economy. In fact, nearly 18 percent of all Christmas trees harvested in the United States come from Michigan.*

Michigan ranks third among all states in the production of real Christmas trees, averaging 1.5 million trees grown annually, but grows a larger variety (13) of Christmas trees than any other state.

Within Michigan, Wexford and Missaukee Counties rank number one and two respectively with Kalkaska County ranking a respectable fourth.

The cultivation and production of Christmas trees is a year-round business with planting, irrigation and pruning taking up time in the summer, fall and winter months. Dutchman Christmas Tree Farms has operated out of Manton in Missaukee County for over 30 years as a fully operational tree farm. Driving past their farm, it is amazing to see them in full production mode, fulfilling wholesale demand demonstrated by the loading of tens of thousands of trees in large tractor trailer trucks headed for downstate and out of state locations.

Next time you think of local agriculture, don’t forget the economic impact of our region’s Christmas tree industry.

*Source: National Christmas Tree Association, USDA Census of Agriculture

Small Business Administration to Hold Traverse City Press Conference (Friday 11/18)

SBA Official and Local Small Businesses Will Highlight SBA Assistance

 DETROIT – The U.S. Small Business Administration’s Michigan District Office will host a press conference on November 18, 2011 at the Northwest Michigan College Aero Park Campus, Parsons-Stulen Building, 2600 Aero Park Drive, Traverse City, MI 49686 to highlight how SBA is helping small businesses succeed.  SBA Midwest Regional Administrator Marianne Markowitz, who oversees the delivery of SBA’s programs in six states, will discuss how SBA is helping small businesses prosper.

Sue Burns, Owner of Baa Baa Zuzu in Lake Leelanau received numerous SBA guaranteed loans from participating SBA lenders.  Susan Ball, owner of Zany Kitchen in Cheboygan launched her business with an SBA microloan from Northern Initiatives. Both businesses received consulting services through various SBA funded resource partners.  They will speak about how SBA helped them launch and grow their businesses.

SBA’s loan guaranty program is helping small businesses grow and create jobs both throughout the country and in Northwest Michigan.  The Michigan District Office led all SBA districts in the number of guaranteed loans made through SBA’s 7(a) loan program in fiscal 2011, guaranteeing 2,063 loans for a total of $689 million.  This is a 47% increase in volume and an 80% increase in total dollars.

WHO:  Speakers

• Chris Wendel, Michigan Small Business & Technology Development Center Northwest Region
• Susan Ball, Owner of Zany Kitchen, Cheboygan
• Sue Burns, Co-Owners of Baa Baa Zuzu, Lake Leelanau
• Lori Meeder, Northern Initiatives
• Sandy Bloem, Economic Development Foundation
• Scott Joseph, Huntington Bank
• Marianne Markowitz, SBA Midwest Regional Administrator

WHAT:   An SBA press conference will highlight how small businesses are benefitting from the SBA and its partner programs.  Join us and learn how the SBA is helping companies like Baa Baa Zuzu and Zany Kitchen to create jobs and contribute to the state and national economy.

WHEN:            Friday, November 18, 2011 10:00 a.m. – 11:00 a.m.

                        

WHERE:         Northwest Michigan College Aero Park Campus – Parsons-Stulen Building

                        2600 Aero Park Drive, Traverse City, MI 49686

NOTE:     SBA Midwest Regional Administrator Marianne Markowitz will be available for media interviews from 11:00 a.m. to Noon.  Please RSVP to Nancy Grose (313) 226-6075 x.234 or nancy.grose@sba.gov.  

Business Atlas Provides One Stop Location for Business Inquires

There are a number of public agencies offering assistance for aspiring and existing businesses in the Grand Traverse region. Navigating through the sea of acronyms and organizations in different locations can be confusing and frustrating.

To make sense of all of the available resources, Traverse City has a new way to get small business related questions answered with the unveiling this week of the Northwest Michigan Business Atlas. This new initiative offers:

1. A search driven web site that answers many questions related to small businesses, with relevant answers provided from over a dozen local and state organizations.
2. A physical location for the Northwest Michigan Business Atlas. The Parsons Stullen Building on Aeropark Drive in Traverse City offers business consulting, quick answers to small business related question along with class and seminar space.