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  • Small Business Trends: 7 Key Principles for Small Business Success

    Melinda Emerson is the author of Become Your Own Boss in 12 Months , and she offers up advice to small business owners and entrepreneurs via #Smallbizchat on Twitter. So she's a bit of an evangelist for entrepreneurship. And she has found there are seven core principles for successful small business owners. In other words, she finds that successful small business leaders have: An entrepreneurial mindset, Strict fiscal discipline, A kitchen cabinet of advisors, A defined brand, A niche market, Excellent customer service, and Cash position and a good banking relationship. Read Emerson's analysis of these key principles at Small Business Trends , here .

  • Basic Guidelines for Buying a Small Business

    Entrepreneurs with the desire to run a small business have two choices: start their own company or buy and run a company. Among the advantages of taking over an existing business: you don't have to birth the company, you just have to make it grow up. But Entrepreneur 's Jennifer Wang warns that you better buy a company that is healthy. Citing data from a Northeastern University study, Wang places the failure rate for purchasers hoping to turn around a struggling startup at 85%. Wang shares some valuable advice from a business matchmaker: Buying a profitable business, on the other hand, is another matter entirely. You've got cash flow from Day One, an established reputation and, if you're lucky, a seller who will help finance the deal, says Ted Leverette, president of "Partner" On-Call, a franchise based in North Palm Beach, Fla., that matches buyers with sellers of small and midsize businesses. Leverette has several baseline requirements for a business purchase. First, no matter how glowing the sales talk, don't buy anything that hasn't been profitable for the last five years--and that includes the Great Recession. "Absolutely don't buy anything that has an annual pretax net cash flow under $100,000," he says. "That's the smallest you want to go." Read the full article here .

  • From Entrepreneur to Trusted Resource

    David Garland of The Rise to the Top is comfortable pushing for attention, and he thinks all entrepreneurs should embrace celebrity. Not the US Weekly version of celebrity, but rather celebrity as a "trusted resource," and a "go-to person and company," as Garland writes at Small Business Trends . And Garland believes a trusted resource does the following: Educates, entertains and inspires. Makes a lot of money because people know, like and trust him or her. Is often a person as opposed to a faceless company. Is accessible and transparent on social media sites, via e-mail, etc. Is not all-knowing and stuffy, but instead friendly and helpful. Read Garland's advice on how to become a trusted resource here .

  • Efforts to Measure the Effectiveness of Entrepreneurship Training

    How essential is entrepreneurship training? Is it better to learn how to start a company in a classroom or by starting a company? Scott Shane --Professor of Entrepreneurial Studies at Case Western Reserve University --surveys some of the recent research into the effectiveness of entrepreneurship training and he seems to conclude...that we need more research: Researchers have conducted a few randomized experiments to look at the effect of entrepreneurial training. One study by Dean Karlan of Yale University and Martin Valdivia of Grupo de Análisis para el Desarrollo randomly assigned entrepreneurship classes to female micro-entrepreneurs in Peru participating in a micro-credit program. The researchers found mixed results for the effects of training. The entrepreneurs who received training showed higher sales, but did not have higher profit margins or more employees. The trained entrepreneurs also scored higher on “keeping records of their withdrawals from their business, an index of business knowledge questions, the proportion that report using profits for business growth, and implementation of innovations in the business.” But they were scored no differently on “changes in tax formality, paid fixed salary to self, number of sales locations, level of diversification, allowing sales on credit, keeping records of payments to workers, started new business, proportion of clients who faced problems with business and proportion of clients who planned innovations in their businesses.” Lars Oppedal Berge Kjetil Bjorvatn and Bertil Tungodden of the Norwegian School of Economics and Business Administration randomly assigned recipients of microcredit in Tanzania to entrepreneurship training. They also found mixed results. They observed no significant effect of training on sales or the number of employees, but found that training increased the entrepreneurs’ record keeping, tendency to use bonuses to incentivize employees, and willingness to change their product mix. Read Does Entrepreneurship Education Make People Better Entrepreneurs? at Small Business Trends , here .

  • Small Business Role Models: Amish Entrepreneurs

    America's best entrepreneurs may be largely off the grid and out of sight of most analysts. Geoff Williams has an interesting article on Amish businesses in CNNMoney , and he shares a staggering statistic from Erik Wesner , author of Success Made Simple: An Inside Look at Why Amish Businesses Thrive . Wesner's research shows that more than 90% of Amish start-ups survive at the first five years after opening. Williams writes: It's a statistic he backs up with a variety of academic surveys, drawing particularly on a 2009 report by Elizabethtown College sociology professor Donald Kraybill. Studying several Amish settlements, Kraybill found failure rates ranging from 2.6% and 4.2%; interviews with loan officers, accountants and industry professions in other Amish regions yielded additional anecdotal evidence of closure rates significantly south of 10%. Compare that to the average five-year survival rate for new businesses across the United States, which hovers just under 50%. So what's the secret? Wesner, who worked in business management and sales before immersing himself in all things Amish, thinks it lies in the culture, which emphasizes "qualities like hard work and cooperation." Networking through Facebook doesn't exactly have the same community-building pull as teaming up with neighbors to build a barn, and few Americans these days can point to a childhood where they awoke regularly at dawn to milk the cows. Here's Erik Wesner and some Amish businesspeople discussing small business success in their community: Read Why Amish Businesses Don't Fail here .

  • With Help from Social Media, Young Entrepreneur Finds Mobile Business Model with Cupcake Delivery Business

    Lev Ekster graduated from law school last year and faced a bleak hiring picture for newly minted lawyers. So he made the most of a bad situation. Specifically, he made cupcakes. And he started Cupcakestop.com , a mobile business in New York that delivers baked goods direct to customers. Ekster spoke last week at World Entrepreneurship Day . He talked about his experience starting the company, and the way he relies on social media tools to foster business (video from Fora.tv):

  • What Late Night Hosts Can Teach Entrepreneurs About the Art of the Pitch

    The key to being a successful entrepreneur isn't simply about people buying your product, but about them buying your ideas. And the marketing blog Right Ideas/Bright Ideas has a tip: learn the art of the pitch from Jay Leno (or, for those of us who have trouble watching Leno, learn from Letterman, or even Conan, when he gets back on the air). Some of the basic rules of stand-up comedy apply: "Know the room"; "Rock the house"; "Always leave them laughing"; and, most importantly, "Always bring your A game": They aren't buying you or your idea. They are buying all the things the idea will do for them. So describe it in the simplest terms. They have to understand it, see the value, personalize the value and appreciate the value. They don't need every detail. Don't fall in love with your ideas or overestimate the benefits. Test the idea before you get there. Every comic tests her or his material before the big show. Don't fall into, "I came up with the idea all they have to do is make it work." It doesn't matter if your presentation and persuasion skills are in the Guinness Book of World Records a well-tested idea trumps you everytime. Read Pitch Like Jay Leno - Sell Your Ideas, Messages, Strategic Plans And Corporate Vision here .

  • Forbes Profile: Young Chinese Entrepreneurs

    Sometime in the next five years, the number of people in China under 30 years old will come close to matching the EU's total population, writes Hannah Seligson of Forbes. And she says a lot of them are "embracing entrepreneurship" rather than idolizing Mao: The incomes of twenty-somethings in China grew 34% in the past three years, the largest growth of any age group, according to a survey by Credit Suisse ( CS - news - people ). While large industries in China--such as banking, steel, telecommunications and electricity generation--are still essentially state-owned, a growing chunk of new wealth being created comes from the hard work and vision of scrappy upstarts. Seligson profiles nine young Chinese entrepreneurs, from several new leaders in social-media, to a market-research firm that works with multinational giants like Nokia and PepsiCo to learn about the habits of China's youth. Take a look here .

  • Back to Business Plans

    Over at Entrepreneur , Tim Berry says business plans are back. While planning may have fallen out of favor for some, Berry says his specialty (he's the business plans coach at Entrepreneur.com) is going to be the reason for many turnarounds this year. This is the year for getting key planning elements defined and understood, for regular plan review and course correction, and for more focus on the planning process. All of which means, in a nutshell, that more businesses will benefit from better planning processes. Ultimately, that means more businesses, more jobs and more success. Berry goes on to list three key factors behind his prediction: 1) The natural backlash of the 'don't plan' fad: "The more you see experts harping about the straw-man business plan that wasn't that useful, the more we're going to see people turning to real business planning because they need it." 2) Back to planning fundamentals: "...good planning increases your ability to manage change by providing you clear visibility of how everything links together." 3) New age of accountability: "You can't assume that showing up is enough anymore; things have to get done. And that means getting done remotely, or virtually, or wherever and whenever." Read the full article here .

  • An Entrepreneur and his Mistakes

    We keep hearing the same message from a lot of successful entrepreneurs: the road to success is paved with many many mistakes. James Sherman founded Shermans Travel Media in 2002. And he has a list of things he'd do differently if he had a time machine. Watch the full Big Think interview with Sherman here .

  • Small Business Index, State by State

    Every year for the past 13 years, the Small Business and Entrepreneurship Council judges which states it says are friendliest to small businesses and entrepreneurship. They call the rankings the Small Business Survival Index . For 2008, South Dakota was ranked the best state, followed by Nevada, Wyoming, Florida, and Washington (state). Those five states were the top five in last year's index as well, with Washington fourth and Florida fifth. The bottom five states are Minnesota, Rhode Island, Maine, California, and New Jersey (The District of Columbia ranks 51st). This is of course just one group's ranking system, and it isn't clear how the ranking really stack up against the number of start-ups state by state. The index appears to be heavily weighted toward tax policy--an issue that has long been at the center of the SBEC's lobbying efforts. States with lower taxes across the board--from diesel tax to capital gains--are deemed to be much friendlier toward small businesses and entrepreneurs in the index. Government spending counts against a state's rating. Another interesting piece of the SBEC's metrics is population growth. In terms of population growth, from 2000 to 2007, total U.S. population grew by 6.9%. As for the top 25 states in the 2008 Index, population growth over this period registered 8.4%, while among the bottom 26 (including the District of Columbia), population growth registered 5.0%. Therefore, the population in the top 25 states on the Index grew at a 68 percent faster pace than the bottom 26 on the Index over the period of 2000 to 2007. In terms of raw numbers, the top 25 added 13.2 million in population, while the bottom 26 added 6.3 million. The full report is here .