The U.S. is no longer tops in the world for entrepreneurship — and large companies are partly to blame, concludes a new Small Business Administration study released Thursday.

The report – titled “Global Entrepreneurship and the United States” – compares U.S. entrepreneurship and performance against 70 other countries. It found that large companies account for an ever-increasing chunk of business activity, which “made it harder to new businesses to get started and for existing ones to prosper,” study authors Zoltan Acs and Laslo Szerb wrote.

The U.S. ranked a respectable third overall, behind Denmark and Canada. Additionally, the U.S. still ranks first for entrepreneurial aspirations, or the degree to which entrepreneurial activity is directed toward innovation, high growth, and globalization. However, it comes in at No. 6 for entrepreneurial attitudes — how the population thinks about entrepreneurs, opportunity potential and the risk of failure. The U.S. has also slumped to No. 8 for entrepreneurial activity, defined by this study as technology firms created to respond to business opportunities in a competitive environment.

The authors found the U.S.’s relatively low score on entrepreneurial activity “a surprise and a possible cause for concern.”

“It is an indicator that over the last decade the United States may have been lagging behind in terms of opportunity startups and quality of the workforce, as well as its activities within the tech sector,” Acs and Szerb wrote. “It is not just that the rest of the world has caught up, the United States seems to have abandoned [the tech sector].”

Why the slowdown in the sector? The bursting of the dotcom bubble, plus the September 11 terrorist attacks, which caused the U.S. to roll up the welcome mat for skilled workers from other countries. And while the U.S. was closing its doors, other countries “have been more pragmatic by giving strong incentives to attract educated, skilled workers to their shores – whether doctors, engineers, or academic researchers – and to keep them there with offers of residency and citizenship,” the study says.

It doesn’t help that there’s less cultural support for entrepreneurship, which means the “best and the brightest individuals” bypass entrepreneurship for another profession. (The odds that the average American knows a entrepreneur “is no more likely than in a developing country,” says the study.) Also, fear of failure in the U.S. is increasing, something the authors suggest may be rooted in changing demographics: as the population ages it becomes more risk averse.

The study distinguishes between small business and entrepreneurship, with the authors arguing that the development of a “small number of extraordinary high-growth entrepreneurial ventures” – which it refers to as “gazelles” – is more important for job growth than “the creation of numerous tiny businesses.”

Wrote Acs and Szerb: “The United States does not simply need more new businesses; it needs more highly productive ventures.”

Business – United States – Small business – Entrepreneur – Small Business Administration

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SBA: U.S. Slipping in Entrepreneurship | Start-up

An industrial engineer and former Starbucks executive (as a “director of profit improvement”) Mike Caswell has long thought that there were things in the coffee industry that were just never offered to customers, namely freshness and choice. Historically, he says, companies marketed their coffee as fresh off the basis of when their coffee was brewed or how freshly ground it was. However, that’s not really what makes the difference.

“For a long time, everybody was ignoring how long ago the beans were actually roasted,” Caswell says. “Industry insiders will acknowledge how important that is to quality, much like the freshness of bread. But because there hasn’t been an industry-wide adoption of how to best provide fresh coffee, people don’t want to talk about it.”

That’s when Caswell’s engineering background came into play. He began tinkering with disassembled vacuum cleaner parts in his basement in 2003, and with a lot of time and some help from some mechanical and electrical engineering friends, he created what has officially been patented worldwide as the Javabot. The Javabot combines every aspect of the coffee roasting experience, transporting beans through Caswell’s store via a maze of clear tubes and pressure, sending raw green beans to a roaster, roasted beans to holding chambers, and small amounts of precisely measured roasted beans to Swiss-made brewers for grinding and eventually brewing.

When the Javabot was ready for public consumption in 2007, he opened his first store, aptly named Roasting Plant, in Manhattan’s Greenwich Village. Many early investors asked Caswell why they should invest in his shop, which is located less than a block away from an existing Starbucks. What would keep customers coming back instead of walking right down the street to the familiar chain?

“My answer then was that you have to offer a differentiated and legitimate experience for the customer,” Caswell says. “And I wouldn’t answer differently today. I was convinced this business would work in New York because the city just has a really active coffee culture. At the time, Starbucks was just cranking along and opening stores every day. But I saw vulnerability because they weren’t focusing on freshness or choice. Additionally, New Yorkers are one of the few populations on the planet that are always looking for something better, newer and more interesting, a higher contribution to a higher quality of life I guess you could say.”

The entire experience at Roasting Plant is unique. When you enter, you’ll be greeted by friendly baristas (Caswell says a non-intimidating employee defines his “legitimate experience”). Then it’s time to make a choice—deciding from 11 different types of beans onsite—before watching your selection fly through the Javabot above your head and into the roaster. Depending on the roast, you’ll have your drink within a few minutes. If hungry, you can opt for award-winning pastries from the locally revered Tom Cat Bakery or settle into one of their many modern seating areas, including long couches, high stools and individual tables, with plenty of outlets and free wi-fi for the computer-toting clientele.

Roasting Plant now has two locations in lower Manhattan, and many of the regular customers consider Roasting Plant’s coffee the best they’ve ever had.

According to a recent Yelp review by Jeni Y., “dorky engineering + delicious coffee = love!! I gravitate towards Roasting Plant whenever I’m within a five block radius, pulled in by the wonderful, gadgety, and incredibly genius way that my coffee is prepared. I’m now spoiled rotten and demand that ALL coffee I drink in my future be first flown above my head.”

Financially, Caswell is projecting growth of 51 percent, year-over-year, in 2010. From an on-the-ground retail perspective, the businesses are doing great, it’s just a matter of growing to more locations.

On the other side of the equation, Starbucks has seen unprecedented competition in the market in recent years, with Dunkin’ Donuts, McDonald’s and other fast-food chains offering a similar grab-and-go product. According to a company spokesperson, Starbucks opened their 182nd franchise on Manhattan’s Upper East Side this week, so clearly they are not going to cede their market share. They still drive the industry because of their reach and their take-home and brew business, but independent shops are in a completely different segment of the market.

“In the last few years there’s been a leap forward here in America for an understanding of coffee, what makes good coffee and what the proper preparation techniques are,” says Andrew Hetzel, an industry expert and founder of Cafemakers, a consulting business for the coffee industry. “As a result of the economic downturn, the overall number of coffee shops has probably declined as has the number of businesses starting. But that’s not a bad thing, because the shops who are doing a good job have survived and are prospering.”

In the ultra-competitive coffee market, low-cost operations and successful branding are important to maintain profitability, due to the obvious low margins in a single cup of coffee. But as Americans continue to learn more about java, about what they like and don’t like, the smaller shops that focus on quality, freshness and customer experience are the ones that are continuing to succeed.

So while Starbucks and independent coffee shops exist in different segments of the market, much of the credit for wetting Americans’ palettes (or perhaps it was a re-introduction) to stronger, bolder, European-style coffee goes to the Seattle-based behemoths. Unfortunately because of the limited supply of high-end beans in the market, Starbucks is unable to buy some of those batches. And that’s where smaller shops hold the advantage. If you think about it like fine wine, there just are not enough aged bottles to be sold in bulk, which is what drives up the price but also the quality. Coffee is quite similar.

“Many independent coffee shops across America actively seek out those locations where Starbucks operates, as it will have already done the ground work of establishing a coffee shop culture in that area,” Billy Hulkower, a spokesman for consumer intelligence insight at Mintel, said in 2005. “Starbucks’ rampant expansion has created an ever increasing demand for premium coffee, while opening the market up for competitors as well.”

For Caswell, he learned a lot of entrepreneurial lessons along the way that are not specific to the coffee industry, struggling to raise capital with potential investors early on by convincing them his business could succeed.

“As I reflect back now, the critical things I learned were to have passion, persistence and patience,” he says. “You have to believe with all of your being that what you’re trying to achieve and what you’re pitching to people is legitimate and will succeed. That’s something you need to do over and over again, and then to learn to deal with the many rejections that will come and not to take them personally. I kept my end goal square in sight and kept going, and I think regardless of the industry you’re in, you need to commit yourself with unending effort and passion.”

As premium coffee and a passion to attain it grows here in the U.S., independent shops like Caswell’s will continue to succeed. And while his immediate goals remain on maintaining a high quality experience for his two stores in New York City, Caswell has fielded calls from every part of the world to both franchise his stores or to license out the Javabot. He admits that the company’s next challenge is their growth and how to handle it, but as an entrepreneur, that’s not a bad problem to deal with.

And to answer the question of how fresh your coffee should be is a matter of opinion and preference for each individual consumer, says Caswell.

“Somewhere between one day and seven days is optimal. Again, coffee is like a really good wine in that it improves a little bit with age. If we’re talking about my personal preference, I lose interest once the coffee has been out of the roaster for seven days. After that, it just doesn’t deliver the flavor any longer.”

Starbucks – Business – Dunkin’ Donuts – Coffee – Upper East Side

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Engineering a Better Cup of Coffee | Start-up

As a psychologist and a tenured professor who specialized in researching and devising strategies for teaching troubled children, Stewart Pisecco was doing the work he loved. But then he had an idea for something he thought could reach more children: software that lets teachers and school administrators easily track and manage the implementation of behavioral improvement strategies. And he had to decide: Is it worth risking one dream to pursue another?

I knew I wanted to be a psychologist from the time I took a psychology class as a junior in high school. And I knew as a sophomore or junior in college that I had a real interest in academia. I loved research and statistics and combining the ideas of research and social sciences.

I had been at the University of Houston for five years when I got tenure. I had my doctorate by 28 and was tenured by the time I was 34. At the time, I could never have imagined doing anything different. It was what I loved to do, and I had worked my entire professional career to get to that point.

I thought I’d be crazy to leave. I had pretty much a good job for life, was doing what I wanted to do, and had lots of security. At the same time, I was relatively young and thought I could take some risks.

The idea for our company came from one of those chance experiences. I was doing my taxes with TurboTax and just reading research literature on the typical reasons teachers struggle with behavioral intervention. And I thought, Why can’t we come up with a software system like TurboTax that would guide teachers through the process of designing good behavioral strategies for their kids and then allow the administrators to monitor how the kids are responding to intervention approaches?

Most faculty members have a part-time private practice that they work on one day a week, but in 2000, I began committing that time to working on the business. I spent a couple of years researching the effectiveness of the software and then a couple of years working with teachers to refine the implementation process. But most of that work was getting crunched into the one day a week.

I thought it would definitely be a gamble to leave, but I read the market and got the sense that momentum was building. I always thought it was really important to chase your dreams, and this was my new dream. As I began seeing more results and as I felt like we were making a really good impact with kids, the decision became easier.

I always felt that we would do well. But I do remember driving out to an appointment about two years in and saying to myself, If we don’t get this deal, it might be tough to get this thing going. A main struggle for us was dealing with the seasonality of cash flow. It’s not a very transactional business, so it’s very lumpy how we get our cash flow. Luckily, we had as a shareholder a group that did a bridge loan until the company got paid, and it didn’t cost us equity. You don’t find a lot of folks who will do that.

Now we’re at the point where my vision has been laid out and is being embraced and adopted by customers. The excitement that comes with that far outweighs the sadness of leaving academia. So I’ve realized this is also something I really like to do. And it’s very satisfying.

Social sciences – University of Houston – Psychology – Education – Professor

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Why I Traded One Dream for Another | Inc. 5000 Companies

When Ryan Abood looked at the books for his parents’ New Hampshire flower shop, one number popped out. Without a bit of advertising, sales of gift baskets had grown 400 percent. For a year and a half, he worked a hundred hours a week to make his spinoff, GourmetGiftBaskets.com, into the third-largest player in his niche. Then, one day, he woke up to find that Google, the source of 80 percent of the company’s revenue, had banished his site from its search results. His company ended up the better for it.

On November 11, 2008, I woke up at 6 o’clock and did a Google search on my phone, like I do every morning. We’re usually one or two for just about every industry keyword. But we were nowhere to be found. I opened up my laptop. We weren’t in the first thousand results. This was right before the holiday season, when we typically make 40 to 60 percent of our annual revenue. It was really, really devastating.

We weren’t sure what had happened. Occasionally, Google will drop a site from the index — just algorithmically forget about you for a few days. People said, “You either have some type of temporary exclusion, or you have a penalty.”

I called the two companies we hired to improve our ranking. In the past, I’d done all our search-engine optimization myself. But as we grew, we started paying companies to reach out to relevant sites and ask them for links. Instead, one of the companies admitted it was paying for links. Google looks at that like buying an election.

Google has a form called the re-inclusion request. We call it the Google confessional. We said, “These are the links that were paid; these are the links that weren’t paid. We’ve obviously violated your trust, and we’re taking steps to remedy it.”

That holiday season, we pay-per-clicked out the wang. We spent a lot of money. They penalize you organically, but they still let you buy ads. We leaned on our affiliate channel. Meanwhile, we were slashing inventory, letting people go, getting neat and trim. It ended up costing us $2 million in sales that winter and another couple million in 2009.

Before the penalty, we had zero social media presence. We sort of looked at it like, “It must be nice to have the time to do that.” Now, as part of our whole strategy of never buying a link again, we blog about anything. We’re up to 3,200 Facebook fans. We Twitter every day.

This March, we also hired a manager of comparison shopping, a social media manager, an affiliate marketing manager; and we have someone in-house to watch our link portfolio. If somebody might misinterpret a link as paid, we take it down. We’re not messing around.

We didn’t see the kind of ratings we had before the penalty until Google’s Caffeine update, this June. That was our final pardon. Now we’re back at the top.

Without the Google penalty, we wouldn’t be anywhere near as far along as we are. You have two choices: You can roll over and die, or you can grow beyond it.

Google – Search engine optimization – Web search engine – New Hampshire – Twitter

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How Google Cost Me $4 Million | Inc. 5000 Companies

Bill Bartmann has known great success, but he is best remembered for losing some $3.5 billion in paper wealth and his status as one of the richest people in the U.S. That was 12 years ago, when his debt-collection company, Commercial Financial Services, collapsed in scandal. But Bartmann has been climbing back, using Bill Bartmann Enterprises first to tell his story through books and on the speaking circuit, then to teach other people how to make money collecting debt the way he did with CFS. And now, at 61, he has yet another big idea.

In October 2008, I was watching television with Kathy, my wife of 38 years. We were watching C-SPAN at the moment Secretary of the Treasury Henry Paulson stood up on a podium and asked Congress for $700 billion. After he said that, we just looked at each other with stupefied looks on our faces that said, “Is this really happening again?”

What Paulson was doing was running the same plays the government did back in the 1980s with the Resolution Trust Corporation after the failure of the savings and loan associations. We had built our company, Commercial Financial Services, at that time by buying up debts from the government on the cheap and then collecting on them. After we experienced that sense of d

My software company, 37signals, is nearly 11 years old. But until now, it’s never really had a place to call its own. For much of that time, we’ve been positively nomadic.

Our first headquarters was in the office of one of our original partners, a Chicago-based graphic designer named Carlos Segura. Carlos’s office also housed his design firm, as well as the T26 Digital Type Foundry and Thickface Records. 37signals lived on a corner of a big desk in a room upstairs. It wasn’t glamorous, but we didn’t need much space. It kept our costs down, too.

After we had been there a year, Carlos left the company, so it was time for us to move on as well. By this time, 37signals was three people — Ernest Kim, Matt Linderman, and me. We were making money and doing well and didn’t require much in the way of an office. So when some friends/clients at a company called Data Harbor invited us to sublease some of their extra space, we said, “Sure.”

A year after that, Data Harbor moved, and we took over the remainder of its lease for a few months. Then we decided to finally get a place of our own. We found it across the street (we could see it from the window of the space we were still occupying). It was too big — 3,500 square feet for just three Chicago-based employees — but the location was good, the rent was fair, and the landlord was a nice guy. Still, it never really felt like home. Rather than investing in the space, we just put some cheap tables together and got DSL. We worked that way for three years. During this time, we brought on a couple more people, but they were working remotely from other cities.

I suppose we were thinking about office space the way most businesses do — as a cost center. After all, between rent, furniture, technology, and the like, it adds up fast, especially for a young company. We were doing fairly well, so $2,500 a month wasn’t much of a burden. At the same time, it was $30,000 a year out the door when we could all have just worked from home, which might have explained our ambivalence.

But over the course of three years in that Spartan space, we learned an important lesson: An office could make you money, not just cost you money. We had a lot of empty space. Our three desks, conference room, and personal space took up only about 25 percent of the office. Perhaps we could turn that empty space into a revenue stream. Not by subleasing it but by using it to host our own workshops and conferences.

For a few years, we’d been sharing our ideas on software design, marketing, and business on our blog, Signal vs. Noise. We’d begun to build a loyal and passionate following. So why not take advantage of that and hold a workshop about the things we were writing about on the blog? We could host it in the spare space in our empty office. And charge for it.

We put together a one-day agenda, charged about $300 a person, and sold about 30 seats. Suddenly, we found ourselves with $9,000 in additional revenue. Our monthly rent at the time was $2,500. In one day, we just paid more than three months’ rent. That was a light-bulb moment. An office can be free — and even a profit center — if you start thinking about your company’s byproducts.

What do I mean by byproducts? Just like the lumber industry can sell its sawdust (a byproduct of milling trees), we discovered that we could sell our knowledge (a byproduct of running a business). And we could sell it in our spare space. Eventually, we packaged this knowledge in book form. All told, the combination of the book and the workshops has brought in revenue of more than $1 million.

But back to our real estate saga. When our lease was up, we decided not to renew. But instead of getting another space of our own, we hooked up with another friendly company we knew: Coudal Partners. I knew Jim Coudal, owner of the advertising and design firm, through a mutual friend. Jim had some extra space, I mentioned that we were looking, and he offered it at a fair price. This was in 2003. For the past seven years, we’ve been working out of that office.

It’s been a wonderful experience. The folks at Coudal Partners are wildly creative. We’ve hired them to shoot and produce some video for us, and we even started a side company together called The Deck, a targeted ad network that helps companies reach graphic designers, Web designers, and other creative professionals.

However, since we’re sharing the space, it’s not ours to do whatever we want with. Holding workshops there has been a logistical challenge, because those events mean that the people at Coudal Partners can’t work at their own office for a day. That doesn’t scale well. We’d like to be able to do a workshop every six weeks. Or maybe host a spontaneous gathering of all our nearby customers. We needed more flexibility.

What’s more, since we’ve expanded from just a few people to 20 (nine of whom are in Chicago), we’ve outgrown the six desks we had been renting. Privacy is another thing you don’t have much of when you share an office with another company. It wasn’t an issue early on, but it is now. Our friends at Coudal Partners have been fair and accommodating, but we decided it was time to move on.

So last year, we began looking for a place of our own. From the outset, we decided to recall what we had learned years before: We weren’t just going to spend money on the space; we were actually going to make money on it. That requirement became the driving force for finding the right space.

We looked at a bunch of places — houses, lofts, offices that already had been built out, raw traditional office spaces. We almost had a lease done on a large factory that had been turned into a six-bedroom residence (we’d use the bedrooms for private offices). But the deal fell through because of zoning and parking issues.

Eventually, we found a beautiful raw space just six blocks from our current office. It’s a corner space with two enormous walls of windows. Natural light pours in. We hired architects to review the space and draw up plans. We negotiated the lease, paid the lawyers, paid the lawyers some more, and signed the papers.

The design process took a few months, and the build-out took about four months. We finally moved in July. True to our vision, about a third of the 10,000 square feet is dedicated to teaching. We built a theater-style classroom, with 37 seats, in which we can give presentations, hold workshops, and offer training and support classes for our customers. We plan on holding the first of many regular workshops this fall.

For the past few years, we’ve rented out different venues for our workshops. It cost us a few grand for the space, another few grand for the overpriced catering (we had to use each facility’s sanctioned caterer), and another few grand for audio-visual requirements and other logistical considerations. Though we were able to charge about $750 per seat for a one-day event and sell about 50 seats per workshop, renting still took a good chunk of profit out of the equation.

With our own space, we’ll not only save money on the costs side; we can make more money on the profit side. We also believe we’ll be able to charge closer to $1,000 a seat. At 37 seats, that’s $37,000 in revenue. All we’ll have to pay for is catering. All the AV requirements and Internet connectivity are built into the space. And it’s much more attractive than the venues we were renting out before. Just a few of these workshops will cover our rent for the year.

The lesson here is less about real estate than it is about business itself. Whenever you make something, you make something else. Your byproducts may not be as obvious as sawdust, but they’re there. Maybe it’s the knowledge you’ve acquired by running a business. Maybe it’s a piece of software you wound up making when you made another piece of software. It’s there; you just have to look for it. You may even find a business you never knew you had.

Jason Fried is co-founder of 37signals, a Chicago-based software firm, and co-author of the book Rework.

Coudal Partners – Business – 37signals – Real estate – Technology

Continued here: 
The Truth About Real Estate | Start-up

Most growth-oriented entrepreneurs are wired for starting, not running, a business. I call these folks “on-base hitters” because, unlike baseball’s “sluggers,” they focus on earning lots of little wins in the form of starting many small businesses instead of seeking out rare but fantastic successes. (Read more about “on-base hitters” and “sluggers” in Part 1 of this series.)

Yesterday, in Part 2, I described the Kolbe personality test, which allows you to measure yourself on four personality attributes that are predictive of your success and happiness in running a business. People with a high Quick Start score on the Kolbe test thrive in the chaos of a start-up.

One of the reasons Quick Starts rarely grow large businesses is because all of that creativity makes them bad managers. If you’ve ever watched a 230-pound slugger try to lumber his way to first base, you know it’s not a pretty sight. Neither is watching a Quick Start entrepreneur try to manage a large team of employees.

When the boss is a Quick Start, employees get frustrated trying to keep up with all of the new ideas. Employees have trouble determining which brainchild was just a passing thought and which needs their most urgent attention. People with high Fact Finder scores often see their Quick Start boss as an impetuous, superficial risk taker.

That’s why most growth-oriented entrepreneurs are happiest—and most successful—in the start-up phase. In a start-up, new ideas are valued at a premium, and there are only a few employees to manage. To follow our baseball analogy, these types are happiest with the quick, regular success of getting on base a lot rather than hitting a rare home run.

Here’s an informal quiz to identify whether you’re best suited to be an on-base hitter or a home run slugger. Answer each question with a simple “agree” or “disagree.”

I get bored easily.I feel overwhelmed by complexity.I have higher employee turnover than is normal for my industry.I like proposing new ideas that some people think are “off the wall.”I started lots of little businesses before getting into the one I’m running today.I’m a big-picture person.I started a little business when I was in high school or university.I burn out when my business gets too complex.

If you answered “agree” to more than four of the questions above, you’re probably a person who thrives on the variety of the start-up and would flounder running a larger business. Focus on just getting on base by launching the business and creating revenue and a positive cash flow; then either sell it or install a manager.

Clearly, you won’t earn as much from the sale of one small business than you would if you hung on and built it up further, but by getting out quickly, you’ll retain the energy and creativity to devote to a new business. Collectively, a portfolio of successful start-up businesses in a career could easily surpass the financial success of one home run, and you’ll be infinitely happier along the way.

John Warrillow is the author of Built to Sell: Turn Your Business into One You Can Sell. He has started and exited four companies. Most recently John transformed Warrillow & Co. from a boutique consultancy into a recurring revenue model subscription business, which was acquired by The Corporate Executive Board. In 2008 he was recognized by BtoB Magazine’s “Who’s Who” list as one of America’s most influential business-to-business marketers.

Business – Small business – Quick Start – United States – High school

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What Kind of Entrepreneur Are You? Part 3 | Start-up

When the entire market focuses on one niche, and you choose another, you’re either a bold innovator, or a failure. Henry Ford’s quote about building cars for people wanting “faster horses” comes to mind. Last week I stopped by the BlogHer conference in New York, a highly popular national event which was full of energy, women bloggers and large consumer brands trying to reach those women. Many of the attendees are often characterized (rightly or wrongly) as “Mom bloggers.” But in the crowd I ran into a woman I’ve met in NYC several times, and who zigs where others have zagged. Instead of tapping into the power of the mom market, she’s discovered her own niche – “PANKS” or “Professional Aunt No KidS.”

Former print beauty editor and marketing communications executive Melanie Notkin is an aunt herself, and was frustrated by the lack of information sources for women who cared about kids, but weren’t their primary caregivers. She started Savvy Auntie in 2008 and has created her own establishment – with a pretty large demographic to back her up.

Howard Greenstein: How did you identify the need for your company?

Melanie Notkin: Savvy Auntie is a multi-platform lifestyle company for the nearly 50% of American women who are not moms but love a child in their life. At first, the desire to create this company came from my own experience realizing that my nephew and nieces were the most important and happiest aspects of my life and yet I had no resources designed for me. And anything out there was cheesy or old and “auntique-y.” Even as a pretty savvy New York City beauty executive, I felt pretty unsavvy about the important things I need to know about the lives of these children, from changing diapers to who the heck Dora the Explorer was.

As a marketer, I saw the potential of the market when I simply looked at US fertility data. 45.1 percent of American women through age 44 do not have children (there’s no data on women 45 plus). 14 percent of those who are mothers have their first child age 35 or over. So there’s a pretty long lifespan for women as aunts without kids of their own even for women who eventually become moms. And that trending is growing and growing, year after year. Plus these women have discretionary income and time relative to moms. So marketers jump at the chance to connect with them. Until Savvy Auntie there was no way to reach them directly. I dubbed this powerful segment: PANKs™.

HG: Did you test the market before starting? How?

MN: A couple of weeks after I decided to start this company, I gathered a number of women in my apartment to learn attitudes about aunthood. A week or two later, I discovered Twitter and began asking women all over America for their thoughts as @SavvyAuntie. Wow – talk about being able to test in Peoria for no cost! While I was able to plug some of that feedback into the development of the brand, I took my 15 plus years of marketing expertise at the time and jumped in. It’s tough to test a market before it self-identifies. I needed to showcase that PANKs were nearly 50% of American women before this segment realized how much they contribute to the American Family Village and the economy.

HG: How did you get your initial funding ?

MN: I am completely self-funded and was profitable in my first full year (2008). My late mother left me some inheritance when she passed away 20 years prior. Back then, even as a teenager, I had the foresight to wait for my dream to leverage it. Investing my life savings in me would have made my mother proud.

HG: What’s been the biggest challenge in starting up a company?

MN: Starting a company. I remember the day I woke up an ‘auntrepreneur.’ It was June 12, 2007. That morning I went to a seminar on business plans. Then I invested in business cards. While I didn’t yet have a name for my company, I felt it was important to invest in identifying my intention. Then I joined other classes and groups. I did everything I could within reason to begin the investment in this dream so I would not back out. I never looked back.

HG: How did you find a lawyer, accountant, developer and others to help you create the company?

MN: I networked with people I trusted for referrals. My developer, for example, was a recommendation from a former colleague.

HG: What tells you your company is on the right path?

MN: I learned I was on the right path rather quickly. Twenty three minutes after I launched SavvyAuntie.com I received an email from the digital media buying agency for PlaySkool. Two hours after I launched, I received and email from Sephora. The next day, Disney’s agency sent me an email. And so on. Two years later, the company and its audience to continue to grow.

HG: What’s your growth plan?

MN: In the two years since launching SavvyAuntie.com, I’ve also introduced Auntie’s Day™ and The Savvy Auntie Coolest Toy Awards. I’ve appeared on national television and have a book coming out on March 22, 2011 with William Morrow/HarperCollins called: The Savvy Auntie Guide to Life – The Ultimate Source for Cool Aunts, Great Aunts, Godmothers and All Women Who Love Kids. Next up is more TV, products and who knows, maybe a movie. There’s no stopping this brand or the sixty million women it potentially serves.

HG: What keeps you up at night?

MN: Late Night with Jimmy Fallon or a good book. Thankfully, by living my life to my potential, I go to bed every night knowing I’m doing the best I can.

New York City – BlogHer – United States – Henry Ford – Marketing

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This Start-Up is "Auntie" Establishment | Start-up

Angel investors will get a federal tax cut for investing in government-funded technology start-ups under proposed legislation.

Five members of Congress – including Jared Polis, the founder of Proflowers.com and Bluemountain.com and a first-term Democrat from Colorado – are proposing a new tax break that would provide a 25 percent credit for an equity investment in a company that has already qualified for a federal research and development grant program for small businesses.

Under the legislation, introduced July 15 by Rep. Chris Van Hollen, a Maryland Democrat, the credit’s value would be limited to half the size of the Small Business Innovation Research award. (The nearly 30-year-old SBIR spreads federal research largess to small businesses, requiring federal departments and agencies that spend more than $100 million in grants for outside research to set aside 2.5 percent of that for small businesses. Initial grants usually equal about $100,000 to assess the feasibility of an idea and then, at the next stage, grants of $750,000 are provided for research and development.)

The bill, called the Innovation Technologies Investment Incentive Act, is the latest in a string of local, state, and federal incentives to funnel private money toward technology ventures. It’s modeled partly on Van Hollen’s home state of Maryland’s biotech tax credit, which offers investors a tax break valued at 50 percent of the eligible investment. (The state says the credit has helped it leverage $50 million in investment for biotech companies that are less than 12 years old and have fewer than 50 employees.) The proposed program will be capped at $500 million nationally.

The other 3 members of Congress who joined Hollen and Polis in introducing the bill: Maryland Rep. Dutch Ruppersberger, Pennsylvania Rep. Allyson Schwartz, and Minnesota Rep. Betty McCollum, all Democrats. The bill is pending in the House Ways & Means Committee.

How would the legislation help start-ups? “If I get an immediate tax credit, I get an immediate return. I know I would increase my investing if there was a tax credit,” angel investor Stephen Spinelli, co-founder of Jiffy Lube, told Inc. earlier this year.

Don Rainey, a general partner with Grotech Ventures, a venture capital firm based in Vienna, Virginia, told the Washington Business Journal that linking the tax break to the SBIR award is a shrewd move.

“It takes all those federal dollars that will be spent anyway, and causes more private dollars to complement that investment,” he said.

He added: “Start-ups tend to create more start-ups, particularly successful ones. People go into a start-up, see its success, learn what you need to do and they start companies.”

Venture capital – Small business – Grotech Ventures – Don Rainey – Business

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You have moved past the stage in which you have a brilliant business concept; and, you are no longer in the product development phase, where you do the pre- and post-prototype. You have tested your concept by conducting online surveys, focus groups, trade show demonstrations or through some other means to determine if potential customers will buy your product or service. You have refined your concept based on reliable feedback. Now comes the business development, which means you are all geared up to start manufacturing, marketing and selling your product or offering your service.

“I started out with a concept on a piece of paper, now we are in 1,000 uniform stores,” says Gary R. Bronga, president of Miami-based Clipeze Worldwide. The Clipeze is Bronga’s personal design spin on an identification badge that features a bar at the bottom of a lapel pin allowing for custom logos and artwork for companies and associations. Braga had worked in the aerospace industry at Cape Canaveral for 21 years, where wearing identification badges was a routine part of his wardrobe.

After applying for five different design patents, finding a supplier for the prototype, and coming up with a low-cost price point, Braga contacted buyers in catalogs. “The advantage of going to catalogs is that they like new products,” he says. “I conducted a marketing campaign where it was geared toward the individual buyer with a personal letter. I sent samples. I followed up.”

According to Braga, catalogs help in several ways: “They distribute to an entire industry, they provide a stream of income, they keep your product in the catalog as long as it sells, and they open up access to other outlets, including retailers.” Your local library will house directories listing catalogs and mail-order retailers.

“Once you get into that first one, which is always the toughest, other catalogs companies in that category will contact you. If you are good for their competitor you are good enough for them,” adds the author of Bringing A Product To Market From Your Home. Clipeze is in some 20 catalogs. Braga has sold to date over three million of his badge holders. Nurses and other medical professionals are among his biggest supporters.

An analysis of your business will of course dictate if mail-order is the best distribution channel for your particular product. Or if your business is a service then how will you find customers and how will they know about you.

How to Bring Your Concept to Market: Have A Business Plan

There are three resources that must be maximized to ensure your business success — money, strategy, and people. Having a business plan provides a detailed description of the best way to optimize these resources. But this goes beyond a 10 to 20 page document; you need a well thought of plan of action.

What are the mechanics to bringing your product to market: how much will it cost to produce, what price will you sell it at, what is estimated sales volume and profitability? The answers to these questions are where your earlier market research and consumer feedback comes into play.

“Moving forward without a written business plan is a common mistake among budding entrepreneurs,” says Jeff Mesquita, chairman of the Atlanta chapter of SCORE (Service Corps or Retired Executives). “A business plan forces you to clarify the strategic plan for business growth,” he adds. It’s also a living document that you should revise more than once over the course of the business.

For help developing your business plan, go to local small business development centers, many of which are affiliated with local colleges or chambers of commerce. Start is with the Association of Small Business Development Centers. Also, SCORE’s Quick Start program assists business start-ups nationwide.

Dig Deeper: Business Plan Template

How to Bring Your Concept to Market: Execute Your Business Concept

Your job now is the implementation. Figure out how to get your product or service into the hands of customers who are your target market. Will you do it yourself or will you outsource manufacturing? Who is going to physically transport your product to customers? If you haven’t already done so, line up suppliers, manufactures, and distributors. Check with the National Association of Manufacturers, Thomas Register of American Manufacturers, or National Association of Wholesaler-Distributors.

What are the methods of distribution: retail, online, and/or catalog purchases? “What’s your understanding of the final consumer, the end-users? Your market research should have revealed more than do you like my product or service but really how and where does your target market buy,” says Suzan Barnett, a consultant and area director of the Small Business Development Center at Valdosta State University in Valdosta, Georgia.

Who will sell it: you, in-house sales staff, independent reps, telemarketers? What about facilities: will you operate from home, a kiosk in the mall, or local storefront? Take into consideration key factors. Foot traffic is a big deal in retailing. Don’t overlook business incubators, which are one-stop shops of space and services, including technical assistance. Contact the National Business Incubation Association.

How will you get the word out about your product or service to your target market, asks Barnett. If they don’t read newspapers but look for information online, then you don’t want to spend money on print advertising (and vice versa), she explains.

Many cash-stamped entrepreneurs are using Google, which provides a host of web-based products, services, servers, and client applications beyond Gmail. Google’s AdWord enables small businesses of all kinds to place ads for as little as $25 a month. Yahoo! has a Small Business Resource Center that offers a wide range of Web hosting, e-commerce storefronts, sales lead generation, and online marketing services.

Dig Deeper: How to Use Sampling and Demos for Customer Feedback

How to Bring Your Concept to Market: Protect Your Concept

Once you have tested your concept and found it to be sound, safeguard your brand name or image by registering it as a service mark or trademark, suggests Richard Stim, attorney and author of Patent, Copyright & Trademark: An Intellectual Property Desk Reference. To protect a unique product you have invented—one that is fully developed and working—register a patent with the U.S. Patent and Trademark Office. Literature, music, art, fashion designs, and software programs are copyrighted and registered with the U.S. Copyright Office.

The most common response by a competitor to a successful product or service is to imitate it. “The best defense is to always strive to be No. 1 in the marketplace,” says Braga. “Most companies will let you gain market share before they copy you.” Have plans in the works for making improvements to your product or your service so that you are prepared when there are competitive threats to your business, he suggests.

Not every product requires a patent. This is a costly process in terms of lawyers and fees– from $3,000 to $15,000. A lot of it depends on how difficult it is to duplicate your idea or reverse engineer your product, says Stim. Coca Cola doesn’t patent their secret formula so that their recipe doesn’t get stolen; it’s treated as a closely held trade secret.

One way to protect your product or service is to position yourself as an expert or go-to person in the industry, says Susan Friedmann, a nichepreneur coach in Lake Placid, New York and author of Riches in Niches: How to Make it Big in a Small Market. Use social media, blogs, Twitter, Facebook. “Those things become important in letting people know who you are and what you do.” Arrange for speaking opportunities at conferences or attend trade shows to let people see how knowledgeable you are even when aren’t selling directly to them.

Dig Deeper: How to File a Trademark

How to Bring Your Concept to Market: Build Your Capital

Bank credit and traditional loans are even harder to access these days in the post financial meltdown economic climate. Which means you’ll probably have to tap into personal savings, equity in your home, or relatives to finance your new enterprise. Braga started his business with $500 and a computer. “I made sure that I didn’t go out and borrow a bunch of money and get into a lot of debt.”

Barnett notes that if you have not positioned your personal credit such that a bank will see you as a strong enough credit risk, they won’t lend to you. “A poor credit score will ruin any chance of qualifying for a loan.”

Starting out, have enough money in savings during the first 6 to 12 months of operation so that you’re not relying on the business to cover personal living expenses. Pour profits back into the business to pay for the business’ expenses.

Keep in mind selling a lot of product or service doesn’t mean your making money. Some businesses spend more than they earn. “Stay on top of your finances,” says Barnett.

Dig Deeper: How to Finance a Business With Your 401K

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How to Bring Your Concept to Market | Start-up