http://iveylocal:8888/index.php/articles/ en ejanssen@ivey.uwo.ca Copyright 2009 2009-11-30T16:49:05+00:00 http://www.iveyentrepreneur.ca/index.php/site/ivey_entrepreneur_newsletter_winter_2010/ http://www.iveyentrepreneur.ca/index.php/site/ivey_entrepreneur_newsletter_winter_2010/#When:16:49:05Z “I am consistently impressed by the capacity of our entrepreneurial students, alumni and supporters to create value not only for the advancement of their own new venture interests, but also in support of the broader community of entrepreneurs throughout the world.”  Click the image above for a full PDF copy of the Winter 2010 Newsletter. Institute BuzzBy Stewart Thornhill, Executive Director, Pierre L. Morrissette Institute for Entrepreneurship I am consistently impressed and amazed by the capacity of our entrepreneurial students, alumni and supporters to create value not only for the advancement of their own new venture interests, but also in support of the broader community of entrepreneurs across Canada and throughout the world. In this edition of Ivey Entrepreneur, you’ll read about one group of enterprising students who are raising funds in support of person-to-person micro-lending, and another who are contributing their time and expertise to educate and enable the next generation of entrepreneurs in developing economies. PhD candidate Marlene Le Ber discusses her research on hybrid organizations and how social entrepreneurs are blurring the lines between business and philanthropy. And with sadness and appreciation, our ‘Alumni Spotlight’ illuminates the life and contributions of Teddy Rosenberg, HBA ’73 whose twin passions for entrepreneurship and education contributed immensely to the development of the Institute’s programs and initiatives. The third week of November 2009 was designated Global Entrepreneurship Week. Hosted in Canada by the Canada Youth Business Foundation (CYBF), the initiative has been adopted in more than 100 countries around the world. Prominent among the activities in Canada were Venture Forums organized by Ivey Alumni Association Chapters in Vancouver and Toronto. I had the privilege of attending both events and I can’t help but be delighted and inspired by what I experienced in BC as well as Ontario. Despite the geographic distance, the two events had a great deal in common; both featured presentations by entrepreneurs seeking investment capital with which to build their businesses; both were standing room only, indicating the high level of interest and enthusiasm for this type of forum; and both were characterized by high quality pitches and seasoned panellists, backed by the power and energy of the Ivey Alumni Network. Congratulations and thanks to the organizers in Vancouver and Toronto! I hope we’ll continue to see many more events in the years to come. Business News, Ivey Entrepreneurs in the News, Lessons for Entrepeneurs 2009-11-30T16:49:05+00:00 http://www.iveyentrepreneur.ca/index.php/site/generating_cash_in_a_tough_economy_part_2/ http://www.iveyentrepreneur.ca/index.php/site/generating_cash_in_a_tough_economy_part_2/#When:00:06:08Z Eric Morse, Associate Dean, Programs, and the JR Shaw Professor in Entrepreneurship and Family-Owned Business, Richard Ivey School of Business.Don’t forget suppliers and customers This is the second  of two columns on Generating Cash Flow during difficult economic times. Economic downturns pose problems for all firms, and successful entrepreneurs are no exception. Many are finding it hard to generate the cash needed to take advantage of the opportunities in the current environment or are having trouble getting the credit they need to simply operate business as usual. So what can entrepreneurs do to increase the cash position in their organizations? In last week’s column, we looked at building relationships with traditional lenders and angel investors. This week, the focus is on two non-traditional sources: Customers/Suppliers and Cost Reduction as a means to generate needed cash flow. Don’t forget your customers and suppliers. If you have invested appropriately in these relationships, a credit crunch may be the time to tap well-positioned customers or suppliers for more favourable terms or even a line of credit. Think about what you can do to create additional value for these partners: faster delivery, preferred service appointments, etc. Peers (other entrepreneurs within your network) may also be a source of temporary funding, although they are more likely to be of help in reducing your cash outflow through shared buying, marketing or service partnerships. Rethink your growth strategy. Reducing costs is the other way entrepreneurs can improve their cash positions. Think carefully about implementing growth plans and be sure they generate sufficient cash in a number of scenarios. Outsource or take on partners in areas of your business where you have cost disadvantages. Rethink your views on competitors; perhaps there are ways you can work together to decrease costs (buying groups) or serve different segments of the market more effectively. Overall, remember to keep operating expenses as low as possible. A quick operational audit can often find quick wins for cash savings. Rethink your hiring needs. If business has slowed or you foresee a slowdown in the future, perhaps you can continue to get by with fewer people. As an alternative to full-time employment, look to your local university. Many business schools now offer entrepreneurship programming, and students in these programs are eager to gain experience working with entrepreneurs. The students can be hired on a reduced or no-salary basis, as they often have to complete research or consulting projects as part of their programs. You get smart, young talent to help with pressing issues, and through your mentorship, the students get invaluable experience working in a downturn. This is definitely a win-win experience. Lastly, keep operating expenses as low as possible. A quick operational audit can often find quick wins for cash savings. Focus on the long-term. The best advice I can give you is to stay focused on the long-term success of your company. Downturns don’t last forever and the actions you take now should position you to prosper as the economy turns around. If you can do these things you will be well positioned to prosper. Here’s a brief summary of the main points to remember from both this and last week’s columns: Maximizing your cash Think cash flow – if you can’t increase cash coming in, can you reduce the cash going out? Always work on relationships with traditional lenders – not just when times are tough, but all the time. Consider angel investors What about customers & suppliers? Try to reduce costs through outsourcing or partnerships Eric Morse is Associate Dean, Programs, and the JR Shaw Professor in Entrepreneurship and Family-Owned Business, at the Richard Ivey School of Business. This an excerpted version of an article that first appeared in the Ivey Business Journal. Lessons for Entrepeneurs 2009-11-25T00:06:08+00:00 http://www.iveyentrepreneur.ca/index.php/site/generating_cash_in_a_tough_economy/ http://www.iveyentrepreneur.ca/index.php/site/generating_cash_in_a_tough_economy/#When:13:23:32Z Eric Morse, Associate Dean, Programs, and the JR Shaw Professor in Entrepreneurship and Family-Owned Business, Richard Ivey School of BusinessBuild on relationships and personal networks Over the past several years I have had the privilege of working with entrepreneurs who are the leaders of a number of successful high-growth companies. Most of these entrepreneurs don’t like to take on debt or give up equity to grow their businesses. They are more comfortable growing organically, at a measured pace, because they are in it for the long haul and are not in a hurry to harvest the value they have created through private sale or public markets. For the most part, these are the value creators, or builders, of the Canadian economy, and collectively they have a significant impact on the quality of life that each of us enjoys. Cash on hand is perhaps the greatest and most important challenge in today’s credit poor environment. So what can entrepreneurs do to increase the cash position in their organizations?   Here are three suggestions to get you started: Keep it simple – think cash flow. Cash flow is your lifeblood and if you can manage your cash flow effectively today, you will position yourself well for the inevitable upturn. You can increase your cash position by adding to the cash coming into the business or by reducing the cash being used. Cash is king in most entrepreneurial endeavours and it is even more important when dealing with the current limited availability of credit. To some extent, entrepreneurs have an advantage over their older corporate counterparts who have never had to bootstrap a business. Build relationships. Obtaining cash from traditional credit lenders is difficult for entrepreneurs under the best of circumstances (e.g. an ongoing relationship with a lender where you have a great track record; operation in a stable and growing industry; solid asset base). Given most entrepreneurs’ bias against debt, many will not have developed the relationships or track records necessary to get significant credit from traditional lenders. In today’s market this is even more unlikely for all but the completely risk-free bets. This doesn’t mean you should not begin or continue to build this relationship. If you cannot qualify for a large loan or line of credit, start small (better if you don’t need the money now) and build the track record and relationship. Engage Angel Investors. Depending on your needs, you may still be able to engage angel investors to help improve your cash flow. They may be willing to help you convert debt to equity or give you more favourable terms than your current creditors. They may also be willing to inject the capital necessary to qualify for further financing. There are others currently searching for great partners. The key for entrepreneurs is to search out those who look to take long-term positions and grow value with the entrepreneurs running the business. Use your networks and do your due diligence before partnering with anyone. Stay away from the traders and speculators who at best recycle the value you’ve already created. In next week’s second of two articles in this series, we’ll examine in more detail two other sources to tap into or generate cash from during a tough business environment—Customers/suppliers and Cost Reduction. Eric Morse is Associate Dean, Programs, and the JR Shaw Professor in Entrepreneurship and Family-Owned Business, at the Richard Ivey School of Business. This an excerpted version of an article that first appeared in the Ivey Business Journal. Lessons for Entrepeneurs 2009-10-20T13:23:32+00:00 http://www.iveyentrepreneur.ca/index.php/site/understanding_how_we_communicate_is_key/ http://www.iveyentrepreneur.ca/index.php/site/understanding_how_we_communicate_is_key/#When:13:28:33Z Michael Sider is an Assistant Professor of Management Communications at the Richard Ivey School of Business.  He teaches at the HBA and the MBA level, and his research interests include conflict management, difficult conversations, and presentation skills.During the U.S. election, Barack Obama’s “presence” was universally praised. The techniques he used are skills that can propel anyone’s career forward.  Presence, which creates buy-in and influence, is an intangible confidence that makes people pay attention. Understanding how we communicate is key to understanding presence because most of what we communicate isn’t in words. It is our bodies and our vocal intonation that do most of the talking. Paralinguistics, the features that accompany speech , such as vocal quality, loudness, and tempo; and body language, including gestures, postures, and facial expressions matter more than the actual words a person speaks. Some studies say words account for just seven per cent of meaning.  The remaining 93% comes from paralinguistics (38%) and body language (55%). It’s difficult to fool your audience. They know very quickly if you have presence.  Our tendency to assess others quickly comes from thousands of years of evolutionary psychology that encouraged snap judgements in deciding if a creature was a friend or foe. The good news is that presence can be learned.  Most of us aren’t born with great presence, but acquire it through practice.    Here are five steps to rehearse that will help you exude presence. Eye contact.Audiences like speakers who make the right kind of eye contact. Many business presenters merely scan their audiences, fearing to make the more intimate contact that acknowledges each member of the audience as special. Good presenters focus on one set of eyes at a time, often holding the eyes for four to six seconds, making that person feel as if she were the most important person in the room.  Speak an entire sentence to the person, being sure not to break eye contact before the thought is finished. But be aware of the point at which tension develops – the point where eye contact has become uncomfortable for the other person – and move on before that contact causes tension. Hand gestures. Hand gestures increase presence by animating the speaker’s body, showing through the hands. Gestures also give visual impact to a speaker’s words. Used well, the hands flow along the current of speech, helping shape the speaker’s meaning. Speakers who stand with their hands in their pockets, clasped rigidly in front of them, or awkwardly behind them are chaining in one of our most powerful means of persuasion. A study I am currently conducting shows that many of the world’s greatest CEOs use a wide and constant range of gestures to enhance their message.  Carly Fiorina, former Chairman & CEO of Hewlett-Packard, will often use twelve different gestures in a four-minute period of speech.  Jack Welch, former Chairman & CEO, General Electric uses even more—up to nineteen in four minutes. Show your body. Great speakers look poised and natural.  They hold their head up, square their shoulders, and, when they’re not using them, let their hands hang comfortably by their sides. They move with energy.  They even stand with energy.  Some speech coaches teach presenters to stand with their weight on the balls of their feet, rather than on their heels, so they show athletic grace. Vary your voice. An important way to increase your presence is to work on your voice and delivery. Rich, full tones are generated by breathing from the abdomen, like an opera singer. The voices of good speakers sound natural rather than artificial, and their intonation is congruent with the message and mood they’re trying to convey. Perhaps most importantly, good speakers are comfortable with silence:  they embrace pauses as a means of conveying meaning, emotion, and confidence.  Too often, speakers rush through their speech when they should slow down and use pauses to allow their audience time to digest what they’re saying. Be natural: lead with your feelings. Part of being a good communicator means having a powerful or persuasive personality that invites others to share the speaker’s passions.  Great speakers have the ability to draw others into their rhythms and dictate the terms of the interaction. The key to effective presentations is making it all seem natural – even though your presentation skills are the result of a lot of practice. Michael Sider is an Assistant Professor of Management Communications at the Richard Ivey School of Business.  He teaches at the HBA and the MBA level, and his research interests include conflict management, difficult conversations, and presentation skills. Lessons for Entrepeneurs 2009-10-18T13:28:33+00:00 http://www.iveyentrepreneur.ca/index.php/site/2009_annual_report_-_pierre_l._morrissette_institute_for_entrepreneurship/ http://www.iveyentrepreneur.ca/index.php/site/2009_annual_report_-_pierre_l._morrissette_institute_for_entrepreneurship/#When:18:00:35Z Much of the activity of the 2008-2009 academic year was inspired by change,providing a unique opportunity to review the aspirations and core values of the Pierre L. Morrissette Institute for Entrepreneurship.Message from the Council Chair Full Annual Report HERE Much of the activity of the 2008-2009 academic year was inspired by change,providing a unique opportunity to review the aspirations and core values of the Pierre L. Morrissette Institute for Entrepreneurship. In July 2008, Professor Stewart Thornhill was appointed Executive Director of the Institute. Stewart’s expertise in strategicleadership enabled the Institute to look with fresh eyes and retune it’s core offerings in response to the increasingly complex challenges faced by Ivey students and alumni entrepreneurs. The Institute also welcomed Ron Close, HBA ’81, as Executive Entrepreneur-in-Residence, and Professor Simon Parker, as Director of the Driving Growth through Entrepreneurship and Innovation Cross-Enterprise Leadership Centre. A successful entrepreneur, Ron brought enormous practical experience to the classroom while Simon, a research professor at the Max Planck Institute (Germany) and a fellow of the Amsterdam Center for Entrepreneurship(The Netherlands), broadened the Centre’s research foci. The winds of change stirred Council as well. On May 1, 2009 David Wright, HBA ’83, was appointed Chair. Active on Council for several years, David brings continuity and strong leadership to the role. I would also like to acknowledge outgoing Teaching Committee Chair, Teddy Rosenberg, HBA ’73, who grew that mandate significantly with her dedication for the Institute. Michael Boyd, MBA ’76 and Robert Peterman, MBA ’02 now chair the Teaching and Outreach committees, respectively. Sincere thanks to Lisa Colnett, HBA ’81, Deland Jessop, MBA ’02, John Besterd, HBA ’78 and Russell Payson, MBA ’70 who transitioned off Council this year, and a hearty welcome new members Ian Aitken, HBA ’87, Bob Dhillon, EMBA ’98 and Alexa Nick, MBA ’95. In closing, I thank Council for their active involvement in the classroom and at Institute events, and for their ongoing financial commitment in support of entrepreneurship at Ivey. David S. Anyon, EMBA ‘97 Business News 2009-09-29T18:00:35+00:00 http://www.iveyentrepreneur.ca/index.php/site/keep_it_simple/ http://www.iveyentrepreneur.ca/index.php/site/keep_it_simple/#When:16:17:42Z Stewart Thornhill is Executive Director, Pierre L. Morrissette Institute for Entrepreneurship at The Richard Ivey School of Business. He is an Associate Professor of Strategic Management and ERA Fellow in Entrepreneurship.For Investors, complexity equals risk … and demands a higher payback. Keep it simple. Seldom have truer or more useful words applied to entrepreneurs and their ventures. And it’s not just about the business; it’s also about the people. Keep it simple for your customers. When your product or service strikes an immediate chord and customers understand intuitively how you are creating value for them, no further explanations are necessary. If, instead, the value isn’t obvious and it takes time and energy to explain why someone should part with their hard earned cash in exchange for what you have to offer, then it may be time to step back and figure out a way to simplify either the product or the message. Keep it simple for your investors. Often, your first investors will be your family and friends. They may back you simply because they believe in you. Later, you may need to convince bankers and other financial professionals to support you. They’ll need more than love and faith in your abilities. They’ll need a clear explanation about how you are going to make money, how much of their money it will take, how much they’ll get back, how long it will take, and how you’ll get their initial investment plus a premium back out of your business. While they will understand complexity, that doesn’t mean they will welcome it. For investors, complexity equals risk and risky investments demand higher paybacks than less risky ones. New ventures are risky enough without adding complex financial schemes to the equation. Keep it simple for your staff. If everyone in the business knows what you are trying to do and why you are trying to do it, there’s a reasonable chance that they’ll all work together to help you get there. If they don’t know, or don’t understand the big picture, employee alignment will happen only by accident. It may sound simple, and it is. But that doesn’t mean it’s easy. And it won’t happen unless you make the effort. Keep it simple for yourself. I can juggle three tennis balls. Lots of people can, with a bit of practice. Not many can juggle four. And only really talented professionals can manage five or six. As complexity creeps into your life – and for most, there’s more to life than just business – the ability to do things well can fall sharply. It’s hard enough to do a few things with excellence. Doing many things well is fiendishly difficult. Simple is good. Lessons for Entrepeneurs 2009-09-29T16:17:42+00:00 http://www.iveyentrepreneur.ca/index.php/site/when_presenting_to_investors_analyze_dont_sell/ http://www.iveyentrepreneur.ca/index.php/site/when_presenting_to_investors_analyze_dont_sell/#When:16:00:48Z Ron Close is Executive Entrepreneur-in-Residence at the Richard Ivey School of Business. He is a seasoned entrepreneur, executive, educator, board member and investor and was most recently President at Bell New Ventures where he was responsible for driving material innovation at Bell.This isn’t the time for  presentations that emphasize only the positive. I was recently in the audience as an entrepreneur was pitching his business plan  to angel investors.  He was well-groomed, polished and articulate.  Just as I was warming up to him, he made a critical error.  He slipped into salesman mode. He summarized his first slide by saying “I know that you’re not going to want to miss this incredibly attractive investment opportunity!”  From there he went on to accentuate the positive, discount the concerns and continued to sell himself with misplaced humour and an overly smooth delivery.  I don’t think anyone invested. Don’t blow your chance to secure that needed funding by kicking into sales mode. When considering a business plan investors are analysts first.  They want and need the whole truth.  This is not the time for exaggeration.  This is not the time for one-sided presentations that emphasize only the positive.  This isn’t a job interview in which you want to put your best foot forward. Be an AnalystTo be effective in your investor presentation you must prove that you are an analyst and are willing to share the results of your analysis fully and openly with prospective investors.  You both are assessing a possible opportunity and have a common need to understand the picture as fully as possible.  You and your team have spent a lot of time analyzing this opportunity.  Share the results – one analyst to another. When people in your audience sense that you are selling to them they immediately fall into buyer mode.  Caveat emptor. They wonder what you aren’t telling them and if they need to put a discount on the projected growth and sales. They wonder what you’re hiding in your eagerness to close the sale. Walk into your next investor presentation as an analyst, not as a salesperson.  Here is the scenario to have in your mind: You and your team have done a thorough job analyzing what you see as an attractive business opportunity. You are sharing the results of that analysis to see if there might be a fit with the investors’ interests. You will share what you have learned openly and fully, including the elements of your plan that convinced you it is indeed worth pursuing and the elements that still worry you. You are open to any ideas, thoughts or concerns. Your objective is to succeed and the more you learn, the better your chances. The investor would love to know what analysis you did to gain comfort around the key business questions. Share it. Answer key questions including why you choose that market; how customers in that market will be better served by your product and why your competition isn’t taking advantage of this opportunity. In writing your business plan, you and your team have painstakingly worked through all of these issues and developed a point of view.  You have something that your prospective investor needs – a rigorous, fact-based, full and honest analysis of the opportunity.  Give her/him the highest quality product you can deliver.  Your credibility will skyrocket along with your chances of success. Lessons for Entrepeneurs 2009-09-29T16:00:48+00:00 http://www.iveyentrepreneur.ca/index.php/site/toy_maker_plays_with_the_big_boys_now_-_globe_and_mail/ http://www.iveyentrepreneur.ca/index.php/site/toy_maker_plays_with_the_big_boys_now_-_globe_and_mail/#When:12:53:57Z Ivey grad Ben Varadi, product chief for Spin Master, has had some big hits in the worldwide toy market.DIANE JERMYN Ben Varadi never planned to be in toys. “When you’re six years old and you’re playing with toys, you don’t think, ‘When I grow up, I’m going to make toys,’” says Mr. Varadi, who is partner and executive vice president of Spin Master Ltd., one of North America’s top toy manufacturers. Mr. Varadi has been with the company since 1994, Spin Master’s founding year. Immediately after graduating from the University of Western Ontario’s Richard Ivey School of Business, he joined school pals Ronnen Harary and Anton Rabie to help produce and market their first product, the Earth Buddy – a small, pantyhose-covered head filled with grass seeds that sprouted hair when watered. “It’s a very exciting industry because things are constantly changing,” says Mr. Varadi, whose chief role is product selection and development. “You also get to meet extremely crazy people because, if you’re going into toys, chances are the alternative wasn’t banking.” When the partners started, they quickly realized that the only way they were going to survive was by creating their own toys. “We couldn’t get licenses because we had no credibility,” says Mr. Varadi. “No one knew who we were. But one thing we were able to bring was a fresh approach. We didn’t come jaded to the industry. We had an open mind and really wanted to have fun.” While he admits to “a lot of failures,” the company has had some spectacular hits in the worldwide toy market, notably Air Hogs and Bakugan, a game involving magnetic cards and marbles that open into mystical action creatures. Growing up, Mr. Varadi says he was a “big TV watcher” who was always into entertainment. That’s helped in his job, as does having an eye for detail and the ability to fight for things he’s passionate about. So has his creative and youthful approach to life. The 39-year-old is a big fan of cartoons and frequently unwinds with the arcade games that line his office. He’s also passionate about music, playing piano and guitar. “I’m a big hobbyist,” says Mr. Varadi. “I love to write tunes. When I think about being creative in toys, it’s the same as being creative in music. They all feed my desire to be creative.” Mr. Varadi believes that as you get older and have more responsibilities, you have to fight for that personal creative time. “Sunday is my day,” he says. “I need four or five hours to practice my music. You have to make time and cut things out that aren’t adding to your life. You have to be a bit selfish with your time.” Establishing trust with inventors has been one of the most rewarding things for Mr. Varadi personally. “We take all the inventors on these wonderful camaraderie-building trips,” he says. “This year we’re going to Iceland. It’s not that crazy expensive. More companies should do this! Not because it’s good business – the rule is no business – we just laugh so much.” Mr. Varadi says he’s not particularly organized, except when it comes to being disciplined with his time. “Today, I have to be more of a macro thinker – to think more about the strategy of the business and where it’s going and less about following up on the details – so I don’t need as much organization.” Nor does he need to have a good environment to think. “Ideas could hit me in a thunderstorm, in the shower or while I’m shopping for food,” he says. “I was one of the first ADD (attention deficit disorder) cases in Canada. It was 1973 and they said, ‘We have this new drug Ritalin and you should be on it.’ But my mom was nervous and didn’t let them. So I can zone out pretty good and it doesn’t matter where.” When asked about his favourite toys, he picked two. “I’m really proud of the very first Air Hog’s plane because we gave kids access to flight in a way that they didn’t have before. The other is the Stretch Armstrong that I had as a kid. There are no electronics, no sound, no motor. It only has one gimmick. You can pull it and it stretches. It just has great play. It inspires your imagination.” http://www.theglobeandmail.com/report-on-business/the-rules/toy-maker-plays-with-the-big-boys-now/article1246905/ Ivey Entrepreneurs in the News, Entrepreneur Interviews 2009-08-10T12:53:57+00:00 http://www.iveyentrepreneur.ca/index.php/site/lesson_in_startup_success_-_financial_post/ http://www.iveyentrepreneur.ca/index.php/site/lesson_in_startup_success_-_financial_post/#When:12:49:56Z One in three dreams becomes a reality.  Financial Post mentions Ivey students’ entrepreneurial ventures and quotes Ron Close on incubating a project inside a school. KAREN MAZURKEWICH They come armed with ideas and chutzpah. There was the project to protect women’s stiletto heels from outdoor grates. A chain of long-term hotels in industrial districts of India. Fast-food breakfast kiosks. A social-networking site for running fanatics. And a plan to erect solar panels on the roofs of commercial real-estate space both for the property owner to use and to sell power to the grid. Every year, dozens of business students enter school with dreams of entrepreneurial success. But do the ideas cooked up in the classroom work outside the ivory tower? Ricky Zhang, an MBA student at University of Western Ontario’s Richard Ivey School of Business, has not yet graduated but he has already launched a financial-services company, Trans-Asia Investment Partners, with a plan to broker deals between Chinese investors and real-estate funds in Canada. Mr. Zhang, a former associate for AIG Global Real Estate Investment Corp., formulated a plan before starting classes in London, Ont., but he said school contacts were necessary to get it off the ground. “The most difficult thing for me was in Canada, no one trusted me. I have no relatives here, so the school alumni is the only assets I could rely on initially,” he said. Mr. Zhang spent months in the classroom honing the plan. He and his team have identified two sources of revenue: Chinese investors who will pay his company a consulting fee and developers and fund managers in Canada who will pay referral fees and have lined up contacts with immigration agencies and foreign-study consultants. “Immigration would be the biggest source of clients,” he said. A close second are wealthy parents whose children are studying in Canada, although eventually he hopes the firm will attract pure-play investors. There is no lack of ambition in business schools today, but not every plan translates to a new venture. “There are lots of good ideas that make bad businesses,” said Rebecca Reuber, professor of Strategic Management, at the Rotman School of Management at the University of Toronto. There are no statistics on success rates, but professors estimate only one in three projects get traction outside the classroom. Even fewer succeed. “A couple of team leaders get religion about their idea and are excited enough to go out and try to raise financing,” said Ron Close, a professor of entrepreneurship at Ivey, who helps students find mentors and money. The advantage of incubating a project inside school is that you have the time to work through the angles whereas “most entrepreneurs are winging it,” he said. The downside is that some team members view it as an exercise and not a calling. Jennifer Kluger and high school friend Suzie Orol turned their jewellery manufacturing concept into a case study during their fourth year of studies at Ivey. “Once you are out of school it’s hard to have the discipline to sit down and write a business plan,” Ms. Kluger said. While the duo couldn’t do the trade shows during the school year, “we knew we wouldn’t have as many experts in one place who could help us,” she said. They soft-launched their firm, Foxy Originals, while at school and haven’t looked back. Today, the company’s pewter-based hand-filled enamel jewellery, priced from $20 to $48, sells in 500 boutiques around the world, and boasts an online subscriber base of 7,000. Angie Mackie co-founder of The Donnee Group, a marketing agency for not-for-profit agencies, also convinced her 2001 classmates to do a competitive analysis for dream company. Ms. Mackie, who ran fundraising campaigns for the Red Cross Society and Canadian Diabetes Association prior to returning to school, had a strong concept. The problem with pedalling her project at school was “there were six of us with different opinions,” Ms. Mackie said. In the end, she and her partner Gord Muschett (an MBA graduate of Cornell University) did not use all the ideas that emerged from the school project, but the exercise made us modify our plan and “opened our eyes to things we hadn’t thought about fully,” she said. But not all student projects—no matter how great the idea—end well. Mike Russell’s (Ivey MBA 2006) mobile oil and gas rig company, Drill Works, started out well enough. He and his business partner raised $3.5-million in a management offering and had signed a three-year, three-rig deal with North American Oil Sands company. But then came the double-whammy: gas prices took a nose dive in August 2006, which was followed by the government’s Halloween income trust announcement. Who could predict in the classroom bubble that a plan to fly in cottagers to Gravenhurst Bay at the Muskoka Wharf would be foiled by a cottage association worried about flights taking off and landing regularly at the town’s main dock? That put a damper on Ivey student Lindsay Cross’s original plan to launch Seguin Air, a private charter service to the luxury cottage area in Ontario. The young entrepreneur has worked around the glitch by flying cottagers directly to their private docks. She also partnered with Niagara Air Tours to sidestep all the red tape it was taking to secure an operating certificate. “It was easy to write a business plan, but when you actually get out there you have to be prepared to adapt the original idea,” she added. Prometheus Power Systems, a gem of a clean energy company formed by Ivey alumni Joseph Mocanu and two colleagues, included plans to install solar panels on corporate rooftops. Some of the power would be sold at a discounted rate to the real estate owner, and the rest would be channeled into the power grid. The partners spent three months developing a business plan, power point outline, executive summary and 60-second pitch. They made a pact: They would see the project through if the first solar panels could be installed by the end of this summer. But love, opportunity and political red tape got in the way: One partner moved to New York to be with his finance, another was offered a prestigious job with a consulting firm in Chicago, and an 18-month wait time for thin solar panels put a crimp in their launch plans, the government has still not lifted its freeze on its standard offer program which promised to pay a premium for electricity generated by small-scale renewable energy projects. “It was a viable model, but it was a question of timing,” Mr. Morcanu said, about the project he shelved. However, he is pursuing other ventures. “Being an entrepreneur is in my blood,” he said. http://www.financialpost.com/story.html?id=1810438 Ivey Entrepreneurs in the News, Lessons for Entrepeneurs 2009-07-21T12:49:56+00:00 http://www.iveyentrepreneur.ca/index.php/site/a_job_hunter_decides_nows_the_time_to_become_her_own_boss_-_toronto_star/ http://www.iveyentrepreneur.ca/index.php/site/a_job_hunter_decides_nows_the_time_to_become_her_own_boss_-_toronto_star/#When:02:38:32Z Michelle Romanica of Orangeville, who worked at Air Canada for 32 years, is now working for herself. She calls her new company “Customer Management Experience” where she will focus on customer service.MADHAVI ACARYA-TOM YEW Michelle Romanica says she has a fire in the pit of her belly. That fire is customer service. Before you roll your eyes or laugh out loud, consider this: Romanica spent 32 years on the front lines of customer service at Air Canada. She says the most fulfilling times of her career were the last few years before she left. Those would be the post-9/11 years, when the spectre of terrorism, a slowdown in the economy and plummeting revenues brought the airline industry to its knees. Employee morale was at rock bottom and customer satisfaction wasn’t far behind. But she loved the challenge: “That’s when I was able to give back the most. At the end of the day I was helping people make the situation better. That always spurred me on.” Romanica, who has been looking for work for about a year, recently made a decision. She is about to join the ranks of Canadians who strike out on their own. The economy has shed about 454,000 jobs since the slowdown began last fall. Jobs have been lost in nearly every sector, from manufacturing and construction to tourism and financial services. The one constant source of job creation has been self-employment. In 2008, there were an estimated 2.6 million Canadians who worked for themselves, according to Statistics Canada. In June alone, an estimated 37,000 Canadians became self-employed. That works out to about 1,233 people every day that month making the life-changing decision to be their own boss. It’s tempting to see these job gains as a sign of green shoots in the economy, an indication that the worst of the recession has passed. But economists caution against that. “I think the real sign of recovery will be when you start to see meaningful job gains in private sector employment,” says BMO Capital Markets deputy chief economist Doug Porter. That’s not expected until 2010. Self-employment typically pays less (about 80 per cent of paid employment) and benefits are often non-existent. But it would be a mistake to see the growth in this part of the labour force as wholly negative, economists say. “I see it as a positive,” says Benjamin Tal, senior economist with CIBC World Markets. “The alternative is unemployment. Anything that will give me $1 a month compared to no dollars per month is positive.” In this recession, self-employment has been keeping the overall employment rate lower, economists say, and probably lowering the demand on EI. In the past 12 months, self-employment has grown by about 3 per cent. That’s just slightly above historical levels. Self-employment has been rising at a steady clip – about 2 per cent annually – for about the past 20 years. That rise has to do with a host of factors: the rise of niche markets better served by small companies, the growing ranks of baby boomers and workers who are let go but are not ready to throw in the towel. The Internet, which has changed everything, has changed this, too. “The very existence of the Internet makes self-employment much easier,” Tal says. “You just start something from your basement and you’re connected to the world.” Tal expects the number of Canadians working for themselves – now about 15 per cent of the labour market – to rise to about 20 per cent over the next decade, or even sooner. That means one in five working people will be self-employed. Changes will be needed, Tal says, in lending practices, tax treatment, and overall attitudes. “That means start recognizing self-employment as a normal way of living, not the exception,” he says. It’s true that some go into business for themselves because they simply can’t find any other paying job. Are those folks less likely to succeed as entrepreneurs? Tal’s research has found that the answer is no. “The surprising result is that motivation is not an indicator of future success or failure, and that’s very, very important,” he says. Of the 2.6 million who were self-employed last year, nearly half were unincorporated and had no paid employees, StatsCan figures show. Some start-ups will remain one-person operations. But others will eventually add more workers and contribute greatly to the country’s economic growth, says Stewart Thornhill, director of the Institute for Entrepreneurship at Ivey School of Business at the University of Western Ontario. The trouble is that growth is very difficult to track. Says Thornhill: “What percentage of those people fall into the self-employment category, how many jobs do the high growers actually create? The data on that is awful.” Still, researchers have a pretty good handle on what breeds success. One huge indicator is age: the older you are, the more likely you are to succeed. That’s because the older worker has more experience, money and contacts. You’re also less likely to exaggerate your likelihood of success, Tal says. “Young people, if you ask them what they expect from the business, are totally unrealistic, which, you know is part of being young and innocent.” Thornhill has also studied the common pitfalls. At the top of the list: those who try to do everything by themselves. Successful entrepreneurs tend to be very good at building a trusted group of advisers. “People tend to focus on innovation or technology but the ability to work with people, that soft stuff, doesn’t get nearly the attention it deserves,” Thornhill says. Though it seems counter-intuitive, the recession can be a good time to start a new business, says Gary Prenevost, president of FranNet for Southern Ontario. FranNet helps would-be franchisees find the right business for them. “When somebody starts a business in a recession, they’re going to pay more attention to where to get customers and what keeps them happy,” says Prenevost, who has been an entrepreneur himself, and provides coaching to others. “They have more time to study what’s working and what’s not working, and a savvy operator will make those adjustments immediately.” That focus on customer service has worked for Jason McCague, 31, president of Facility Services Corp. McCague started his company in 2002 offering mostly cleaning and janitorial services. He kept responding to customer requests and adding services, from landscaping to recycling and snow removal. He now has more than 100 clients across the country and his company’s annual revenues top $1 million. “The philosophy is that no matter how big the company, we will service our customers properly,” says McCague. Ultimately, what separates successful entrepreneurs from those who fail is that the successful ones never stop trying, Thornhill says. “They learn from it and they do it better the next time, as opposed to the ones who run into the initial failure and say, `That’s it for me.’ “True entrepreneurs are known for their persistence, their ability to get knocked down and get back up and dust themselves off,” he says. It’s a lesson that hit hard for Donna Hall, a sales and marketing consultant who specializes in financial services firms. She lost a spate of clients in the spring as the recession took hold. “It just hit so quickly and vibrated right down,” Hall says. “In April and May I wasn’t making hardly anything.” Since then she’s expanded her client base to manufacturing and insurance. “I’ve had to learn a lot about new markets, but there is a lot of work for consultants like me,” she says. “You just have to find the right markets.” When Romanica began looking for work, she thought customer service manager would be a natural fit. But these days, customer service work tends to be in call centres, and she hasn’t worked in one of those in 25 years. Romanica sent many resumés but landed few interviews. One prospective employer said that her computer skills didn’t measure up. “In my company, I had years behind me to have created a reputation for myself. My integrity was assumed. My abilities were assumed. My competency was assumed. I was entering a world where I had no reputation and only soft skills,” Romanica says. “I know my value to an organization and I know my capability and I’m not at a point where I’m prepared to accept an entry level. I don’t have time for that. I’m not 20.” Her money – a reduced pension and savings – was running out. Romanica credits Happen Inc., a job search and networking organization, with her decision to start her own company. “It gave me the encouragement and support I needed to not just give into the fear of, `just get any job.’ It allowed me to stay focused on the fire in my belly and my passion.” Romanaica plans to call her company Customer Management Experience. The focus will be on teaching companies how to improve their customer service by first improving their own internal work culture. “I feel I’ve been learning all my life how to get the most from people, whether it was customers or colleagues,” Romanica says. “I’m now at a point where I can give back all I’ve learned, and hopefully people will benefit from that.” http://www.thestar.com/business/article/668235 Ivey Entrepreneurs in the News, Lessons for Entrepeneurs, Entrepreneur Interviews 2009-07-19T02:38:32+00:00