Jerome Katz Coleman Foundation Professor in Entrepreneurship John Cook School of Business

entrepreneurship@slu

COLEMAN FELLOWS SUMMIT 2014: "It's Not As

Foreign As You Think! (a.k.a. The Seven Secrets

of Success for Independent Professionals)

Jerome KatzColeman Foundation Professor

in EntrepreneurshipJohn Cook School of Business

Saint Louis University


Objectives for Today

1. Identify & leverage A/S skills for your own business.

2. Identify key resources and supports for the small business.

3. Clarify the critical success factors and pitfalls to avoid in your own business.


Arts & Science Based Self-Employeds

Percentage Occupation70% Model makers

66% Non-MD Health practitioners

61% Misc. entertainers, sports & related workers

60% Photographers

58% Artists and related workers

56% Animal trainers

51% Musicians, singers, and related workers

46% Writers and authors

42% Massage therapists

29% Child care workers


The Good News: You Have Skills

• All– Planning Skills

• Classes, programs, etc.

– Opportunity Recog. Skills• Funding, presentation venues…

– Prognosis Skills• Bulletproofing our work

– Veridical Thinking Skills• How things really work in our area


What Do You Teach Grad Students In Your Field?

• How to find jobs, grants and opportunities

• How to match these to your skills & strengths

• How to assess which of these are “best”

• How to pursue these opportunities


What Do You Teach Grad Students In Your Field?

What You Teach

• How to find jobs, grants and opportunities

• How to match these to your skills & strengths

• How to assess which of these are “best”

• How to pursue these opportunities

Entrepreneurship Version

• Opportunity Search

• Capability Assessment (or competitive analysis)

• Opportunity evaluation

• Marketing & Impression Management


More Good News: More Skills• Humanities & Arts

– Expressive Skills– Communication Skills

• Sciences – Quantitative Skills– General Scientific/Tech

Knowledge/Skills

• Arts & Sciences– Making things


Two Divers of Entrepreneurship

• Opportunities (“Pulls”)– Passion-driven– Technique-driven– Usually more innovative

• Necessities (“Pushes”)– Financially driven– Demand driven– Usually less innovative


How the Drivers Play Out

• Opportunity = Wealth Creation– Full-time, growth-oriented,

employs others

• Necessity– Income Supplementing

• Part-time self-employment

– Income Substitution• Full-time self-employment for

yourself


Today’s Secrets

1. Act to Open2. Pick a Market3. Craft an Entering Strategy4. Price & Haggle5. Think Strategically6. Plan to Move Up7. Help Helps. Get some.


S1 - Getting In: To Act You Need To Open

• Types of businesses– Professional practices

• Delivers standard services

– Consulting • Delivers specialized services

– Workshops (Inventors) /Studios (Artists)

– Retail/Wholesale Stores– Today any could be bricks,

clicks or both


Key : Deciding What You Can Sell

• What do you like to do?– Can you do it now or do you

need to learn something 1st?

• What will people pay for?– You may need to look for

your customer somewhere else

• The sweet spot is where the two come together.


Keep Your Eyes Open!

• Baby boomers are going to be retiring by the millions

• Those that own businesses will either sell them or have to close them down.

• You might be able to get these at great prices.


S1(c) - Getting Into Business: Opening

• Get a Team– Prof. Association

• Inventors, Artists, Professions, etc.

– Mentor• Look for alums & locals big on

giving back, also from Prof. Assocs.

– Attorney: General vs. Specialized– Bookkeeper or Accountant

• Get referrals from people already in the business


S2 - Marketing Basics

• Market as key– Best: Client in hand at start– Use 6 degrees of separation

• Work, Schools, Church, Family

– Prospect via Internet, connect personally


Marketing = Selling

• For most A&S driven firms, customers come from personal connections and contacts.

• The more people you know, the more likely you are to find customers.


How Do You Find People?

• Alums (esp. successful ones)– Why alumni offices might like to

help you!

• In-class speakers & judges

• Family, friends & their friends

• Social network acquaintances

• Ask yourself – who can your product or service help?


Prospecting Using LinkedIn


Search For Alums


Fine Tuning Location


S2(b) - Marketing Basics

• Your package– Business Cards – get online or at

Office Depot– Pamphlet – you, your product or

service– Bio/Resume– Website

• Informational (2-3 pages can do it)• Go cheap but buy your domain (~$8), e.g.

www.jeromekatz.com - this also gives you your name as your email.


Next: You Need An Irresistible Product


S3 - Entering Strategy

• What will you offer?– Fit to your clients’ needs

• What do they want?• Don’t know? Ask!

– Think features, not price• If it is “right”, people will pay more

– Look for products (vs. services)• E.g. instead of personally checking

grammar, sell an template add-on to word that checks what you would.


Checking the Competition

• You can use Google to find websites of competitors– Look for services/products– Look for recurring themes– Look for testimonials for types

of customers to pursue


What do you do next?• Check out competitors online.• Look for reviews on Yelp, Google,

elsewhere…• See what your friends say.• Go visit.• Question: what do you think they

do well? What’s missing?• Think about what you can do

better!


S3 - Entering Strategy

• Why should they pick you?– Trust– Expertise– Providing a distinctive product or

service

– NOTE: You don’t want to be the cheapest!


Why You Need Record Keeping

• To keep track of business– Customer lists, project lists…

• To keep track of money– Are you ahead of the game?

• To pay taxes– Government requires you to

keep track


Record Keeping

• Level 1: Paper ledgers, day-timers– Office Depot

• Level 2: MS Excel – Templates @ office.microsoft.com

• Level 3: Quickbooks or NolaPro Online

• Level 4: Accounting Packages specific to your profession

• KEY: Keep it simple to keep being consistent

• Consider a bookkeeper – barter!


Don’t Freak Out, You Know This…

• Cash Flow – like a checkbook/debit card

• Profit & Loss – like a budget

• Balance Sheet – like a tax return

• Start-Up Costs – like a remodeling estimate


S4 - Pricing: Figuring Hours

• Think “You vs. Employee”• Solo can be slower (fewer

supports) or faster (expertise)• Iceberg rule: they only see a

fraction of what it takes– Usually 2 or 3 to 1– Also true for employees

• That’s why you bill hours + overhead.


Pricing: Figuring Rates

• Comparison Figures (salary.com)

– Was looking for aConsulting Biologist

– Title not used in Salary.com– Looked for biologist– Then looked at the alternate titles– Found it in Biologist V


Pricing: Figuring Rates

• Comparison Figures (salary.com)

– Consulting Biologist (Biologist V)– Average Salary: $103,463– Benefits (33%) $40,000– Overhead (20%) $20,000– Total Hourly Average is $81.73– Assume only 60% billable hours

81.73 * 1.6 = $131 / hr.


Price too high? Haggle

• Clarify in-house cost• Provide extra value (e.g. web

access, faster results, guarantees)

• Stretch out payments• Bundle this service with others

(repeats, this + another service, etc.)

• Get them to find other clients and sell the syndicate a package (or offer a rebate for referrals)

• Offer a “bare bones” version (if you can live with it)


5 - Strategic Thinking

• Master a deliverable, package it, promote it & price it lower or offer it faster– Expectant mothers, diabetics

• Leverage groups you participate in – They trust your hour estimates

• Website/newsletter for visibility• Reading business news like obituaries,

listening to gossip at church– Katrina opportunities

• Distribute products you respect


S6a - Move Up: Income Substitution

• Ride Circuit – Go Outstate • Adjunct Instruct • Go deep in one industry – e.g.

Nursing Home Trade Assoc. for a dietician

• Expertise by web – About.com• Snowball sample – Referral

design


S6b - Move Up: Wealth Creation

• Tech Transfer– Leading edge technologies– Popularization, e.g. California

Mashers, Gatorade

• Go for corp. or govt. money

• Spin-Off/Out

• Leverage Others – referral bonuses, commissions


Can This Be Done?

• Pediatric Education Dietitian Services (pedsinc.com) – Barb Linneman

• Nutriformance – Ellie & Dale Huff

• 1-800-Butterball for ConAgra

`


Why Help

Helps


S7 - Help Helps: Sources

• On campus –Entrepreneurship Centers

• Everywhere – SBDCs, SBA, SCORE, ADA, Consultants, Lawyers, etc.

• Online – business.gov, sba.gov, score.org


Finding that help

• Get Information– http://business.usa.gov/micro-

site/state_resource– SBA.gov– These sites and their help is

free!

– Let’s find some help!


Other Sources of Help

• Legal – Nolo.com, Legalzoom.com,

Rocketlawyer.com, Shakelaw.com

• Online Business Planners (& online training courses)– SBA.gov– Myownbusiness.org


Find Connections for Help

• Gales Directory of Associations– Look for prof/trade associations– Google & LinkedIn search for it

• Freelancer.com

• Entrepreneur.com

• Check the blogosphere


Interesting Sites• Equitynet.com – risk &

valuation calculators• SBA.gov/tools/sizeup –

benchmark your business & map competitors

• City-data.com - Check out area demographics

• Prizm/VALS – customer segments (google for them)


The Secrets

1. Act to Open2. Pick a Market3. Craft an Entering Strategy4. Price & Haggle5. Think Strategically6. Plan to Move Up7. Help Helps. Get some.


Need a book?

• Entrepreneurial Small Business (McGraw-Hill)– Ask your MHHE rep for it– Buy used (and old)


Questions?

Professor Katz, may I

be excused? My brain is

full.

Jerome Katz Coleman Foundation Professor in Entrepreneurship John Cook School of Business

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