Posts Tagged entrepreneurial passion
Entrepreneurs do best in the face of uncertain conditions, but mature firms have a hard time with uncertain conditions because they plan for what is certain and has worked for them in the past. Entrepreneurs can succeed by doing what they do best and creating uncertain conditions for mature competitors.
ImproMed is one such company that has made “attack never defend” its mantra. Ron Detjen, ImproMed’s founder and president, says his company continues to grow and add employees because it keeps a competitive attitude. Detjen argues companies that go on the defensive can never grow as fast as companies that go on the offensive. Detjen encourages his employees to go on the offensive by finding something they excel at and keep working on it (Anonymous, 2011). What an excellent approach!
ImproMed is a company that helps veterinary practices deal with complex recordkeeping needs and has developed the world’s leader software products for both the business and medical needs of veterinary practices. ImproMed stresses a consultative approach for its employees is the key to its extraordinary growth (Anonymous, 2011).
A company that focuses on what its employees do well wins. Employees are critical to a small company because they are responsible for how the company performs. Encouraging employees to focus on strengths puts competitors at a distinct disadvantage because they do not know what to expect. A good entrepreneur works from his or her strengths and not weaknesses.
How does your company attack? I would love to hear your comments. If you want to know more about how you can design a way to attack using strengths you can learn more here.
Anonymous. (2011). 2011 Winners small business success stories Corporate Report Wisconsin, 26(7), 30-35. Retrieved from http://search.proquest.com/docview/864104598?accountid=35812
Economic recovery depends on restoring middle class workers to the prominence they once had. Many large firms have moved operations overseas leaving holes in the market both from the absence of middle class jobs and tax revenues lost from large companies that moved overseas. The logical choice to fill these holes comes from small business. Small businesses quickly adapt to market voids and offer the creativity to fill holes, but small businesses grow into larger firms and lose their flexibility. Schumpeter (1975) coined the term “creative destruction” to describe when large firms falter and lose their adaptability to create. A blurred line exists about when “creative destruction” happens, but this condition is a normal part of the business cycle.
Most of the goods and services produced in the United States up to the mid-19th century came from small business. By 1914, firms with 500 or more employees accounted for about a third of the industrial workers with another third working in firms with 100 to 499 workers. Smaller firms developed market niches or supplied larger companies with 500 or more employees to compete in the markets until the mid-20th century (“The Limits of Small Business,” 1992).
From 1952 to 1979 the percentage of business receipts from small businesses plummeted from 52% to just 29%, but by the late 1970s and early 1980s the United States experienced a resurgence of small businesses. For example, out of 17 million businesses less than 10,000 firms employed more than 500 workers. By 1986 small firms produced 64% of the 10.5 million new jobs created (“The Limits of Small Business,” 1992). History repeats itself.
The time has come for another resurgence to replace the void left by large firm that have migrated overseas and take the country back to its roots. Small business is in the right place because small business is closest to consumers and has the ability to adapt and create what consumers want and need. The resurgence takes time to gather steam to propel the United States economy out of the recession. Small business entrepreneurs can sense holes in the market and will rebuild what the market has lost to “creative destruction.”
Are you up for the challenge? Learn more.
The Limits of Small Business. (1992). Available from EBSCOhost lkh. (03633276). Retrieved Summer92, from Woodrow Wilson International Center for Scholars http://search.ebscohost.com/login.aspx?direct=true&db=lkh&AN=10129578&site=lrc-plus
Schumpeter, J. A. (Ed.). (1975). Creative destruction from capitalism, socialism and democracy. New York: Harper.
Entrepreneurs can do extraordinary things no one ever imagined! Often people believe to succeed in an established industry bigness matters. Judith Rosen (2005) dispels this notion explaining how several successful writers like Walter Mosley do well using small publishers instead of “big six” publishers. Rosen noted that each year some of the best books come from the smaller publishing houses.
As an example, 82-year old Kurt Vonnegut, one of America’s most popular writers, used Seven Stories Press, a small publisher, to find his success. America knows Vonnegut for his Slaughterhouse 5 and Cat’s Cradle. Similarly, Steve Kaplan used Bard Press for his book Bag the Elephant on how to woo big clients. Bard Press had expected this book to land on the best sellers’ list which would make it the 12th publication out of 25 to achieve this status (Rosen, 2005).
Rosen (2005) offered four other titles, which became successes through smaller publishing houses. Publishing is just one industry, but the point is big does not mean better. Other industries can compete with the big guys just like the smaller publishers do with the “big six.”
The key is to develop products the big guys have not thought of or did not wish to invest in because they thought no market existed for them. Entrepreneurs take the risk to go where the big guys fear to tread. Entrepreneurs have an advantage because they are closer to consumers and understand what they want.
Are you a sleeper waiting for consumers to discover what you have to offer? Learn more.
Rosen, J. (2005, 2005/08/29/). Six sleepers for fall. Publishers Weekly, 252, 27+.
Errico (2010) shared the following story about the Great Hill:
Before time was time, there was a Great Hill.
And on the Great Hill there lived the Yolks.
The Yolks spent their entire lives climbing the Great Hill, trying to reach the top.
Some Yolks climbed fast.
Some Yolks climbed slowly.
One Yolk in particular was a very slow climber. He was different than the rest of the Yolks.
When he climbed, all the other Yolks passed him.
It was hard for him to watch them pass by.
He felt like the worst climber in the world.
Some Yolks made fun of him as they passed.
Some Yolks wanted to help him climb but he didn’t let them.
It was hard for him to climb. It was even harder when it rained because the ground got slippery. Sometimes it seemed like it was only raining on him.
But it wasn’t.
There were times when he felt like he wasn’t moving at all.
But he was.
Then one day he met another Yolk who climbed even slower than he did.
He helped the slower Yolk climb.
“Thank You,” said the slower Yolk.
“You’re Welcome,” said the slow Yolk, “I can’t be of much help to anyone else since I climb so slowly.”
“Slowly?” asked the slower Yolk.
“Well yes. I watch other Yolks pass me all the time.”
“I do not know if you are slow or fast, but I do know that you helped me, and that you are still climbing.”
The slow Yolk said goodbye to the slower Yolk, and kept climbing.
“Still climbing,” he thought to himself.
“That is true.”
And he smiled.
So the Yolk kept climbing. He climbed when it was nice out, he climbed when it rained, and he even climbed when it snowed.
As he kept climbing he got better and better.
Sometimes he would pass other Yolks and sometimes they would pass him.
He had stopped paying attention.
He also noticed that some Yolks were no longer climbing.
When a yolk stops climbing it stays where it is.
Some Yolks stop climbing because they are happy with how far they have gone.
Others stop climbing because they don’t want to climb anymore.
The Yolks that had stopped climbing did not like to be passed, and they made it harder to get by.
But the Yolk kept climbing, right over them!
There were still times when the Yolk thought he was climbing an impossible hill, but he kept climbing.
Always, always, climbing.
Do you think he made the top ?
The Great Hill story highlights the entrepreneurial journey. Often entrepreneurs climb slowly to get to the top of the hill, but must persist to reach the top. Entrepreneurship is about persistence and keeping focused on the end goal (to reach the top of the hill). Some entrepreneurs climb more slowly than others, but the challenge is in the journey to the top.
Entrepreneurs recognize others want to trounce them and say, “I told you so,” but filter out the negativity and keep moving on the journey despite the odds against them. Few entrepreneurs are on the fast track, but advance at their own pace. Successful entrepreneurs preserve their passion by settling at a comfortable pace instead of racing to the top of the hill.
Most important, successful entrepreneurs do not let the competition intimidate them. Successful entrepreneurs want to help others succeed in their journey. The key is to keep moving toward the top of the hill no matter what position the entrepreneur is in at a given time.
As the entrepreneur approaches the top of the hill he or she notices other entrepreneurs quitting or conceding on their journey. The successful entrepreneur just keeps going no matter what the pace. The successful entrepreneur knows his or her limits and works within them.
Think about the Great Hill story! How do you describe your entrepreneurial journey? Are you working within your limits at a comfortable pace or are you trying to race to the top of the hill? If you want to get to the top of the hill and avoid stalling before getting there, let us help you find a comfortable pace and help you work within your limits. Learn more.
Errico, D. (2010, December 7). The great hill. Free Children Stories. Retrieved from http://www.freechildrenstories.com/story_details.php?st_id=156
I have heard the words “employees are our most valuable asset” many times, but have rarely seen accountants embrace the idea of capitalizing human capital as an asset on the balance sheet. The theory goes that companies expense wages as employees earn them. If employees are an asset I believe the part of workers’ employment cost that adds value to the organization should appear on the balance sheet.
Although accounting rules forbid capitalizing human capital, they only recognize human capital on the income statement. Despite this oversight, many call accounting the language of business. At least one article admitted the problem and recommended alternatives for capitalizing human capital. Chen and Ku (2004) concluded, “The succession of the human intellect over machines and equipment in the contribution to industrial value makes a financial statement that relegates human capital expenditure to expenses inadequate if not obsolete” (p. 129). If accounting is the language of business why is the value of its most valuable asset excluded from the balance sheet?
This disparity leads one to believe companies’ accounting standards look at employees not as an asset, but as a liabilities. For example, in finance the main goal of the firm is to maximize shareholder wealth and accounting rules treat human capital as a period cost (expense) instead of an asset. In recent years many companies have reconsidered the view shareholders are the only stakeholders in a firm, and have expanded stakeholders to include customers, suppliers, and employees. Even with the coming of triple bottom-line reporting I have not seen accounting rule-making bodies espouse the capitalizing human capital (Elkington, 1994; Slaper & Hall, 2011).
Similarly, Reimers-Hild, Fritz, and King (2007) described human capital as a continuous investment leading to increased earning power. Reimers-Hild et al. further described human capital as responsible for innovation, creativity, and keeping pace with change. Chen and Ku (2004) developed a theoretical classification framework that would capitalize certain formation and acquisition costs in early stages of development, learning costs in middle stages of development, and replacement costs in final stages. Chen and Ku argued for disclosing these costs as investments if the costs are unique and add value.
Do you believe employees are your greatest asset? I would like to hear your thoughts. Should your greatest asset show on the balance sheet? Please let leave your comments? Click here if you want to understand more about accounting for human capital.
Chen, H. M., & Ku, J. M. (2004). The role of human capital cost in accounting. Journal of Intellectual Capital, 5(1), 116-130. doi: 10.1108/14691930410512950
Elkington, J. (1994). Towards the sustainable corporation: Win-win-win business strategies for sustainable development. California Management Review, 36(2), 90-100. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=9410213932&site=ehost-live
Reimers-Hild, C. I., Fritz, S. M., & King, J. W. (2007). Entrepreneurial Career Development: Using Human Capital, Social Capital, and Distance Education to Achieve Success. Advancing Women in Leadership, 24, 1-N_A.
Slaper, T. F., & Hall, T. J. (2011). The triple bottom line: What is it and how does it work? Indiana Business Review, 86(1), 4-8. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=66506015&site=ehost-live