Magazine

One Iota


"Going global" has a nice ring--but not necessarily at the cash register. Small companies that stick close to home have growth rates 75% higher than those with the most international activity, says a survey of Young Entrepreneurs' Organization members. "Conventional wisdom says that if you want to grow, you have to be international," says the Kauffman Center for Entrepreneurial Leadership's Larry Cox. "I don't think that's true." PricewaterhouseCoopers' research shows a connection between international activity and growth--but that's among companies with average revenues of $26.9 million. The YEO's sample averaged $3.6 million. PWC's Steve Hamm says overseas expansion may overtax sales and distribution abilities of companies with less than $40 million in revenues. Home sweet home, indeed. Looking for a Web guru or help with your marketing? Fed up with your accountant? The FrankelBiz listserv, at www.frankel-anderson.com, will connect you with other entrepreneurs ready to do business. Branding expert Rob Frankel moderates. Yes, he promotes himself in the process--but could you respect a marketer who didn't? Welfare-to-work has been a mixed blessing--not just for states and recipients, but for small companies looking to hire. The Wirthlin Group says 51% of entrepreneurs either lose money or break even on their welfare hires, compared with 32% of larger companies. And the process of hiring welfare recipients takes 20% longer than for other employees.

It doesn't have to be that way, though. Gale Walker, chief executive of Children of the Rainbow, Inc., a child-care center in San Diego, finds diamonds in the rough among welfare recipients. Half of the 52 employees, like Walker herself, were once on welfare. Walker hires through approved agencies that train in soft skills, such as punctuality. She assigns each welfare hire a mentor and lets employees bring their kids to work. Most workers come from the neighborhood and walk to work. The result: Children of the Rainbow leads to a pot of gold for Walker--more than $1 million in revenues last year. Katherine Catlin of the Catlin Group, co-author of Leading at the Speed of Growth, on leadership:

Why do companies outgrow their founders?

Founders get stuck in habits that worked when they started the company. They made all the decisions, did everything themselves. Now they have to build teams, create plans, build an infrastructure. The founder needs to grow faster than the company.

How can you tell you're not changing fast enough?

A really great employee might leave, saying they've been micromanaged or the place is in chaos. Maybe you're not able to raise money or you lose a big customer.

What are the big psychological hurdles in making the leap from founder to CEO?

One is realizing that everybody does what you say, and watches what you do. I've had clients say, "My gosh, I started a workout program three times a week and now half the company's doing it." Or, "At a meeting last Tuesday I put out some lamebrained idea, and now they've got a proposal to implement it." If you're going to fail as an entrepreneur, you might as well become a star in the process. It helps with the next gig. Just ask Kaleil Isaza Tuzman. As CEO of govWorks.com, which hoped to automate government transactions, Tuzman blew $56 million in venture money, took the company into bankruptcy, and sold it for less than $10 million. A unique tale? No. But Tuzman, 29, is a star in the critically acclaimed art-house documentary Startup.com, so he's a famous failure--and as founder of New York-based turnaround specialists Recognition Group. Now he convinces other entrepreneurs they won't make it either and that they should consider a restructuring. Those who can't do, teach. 39% of small-business owners say we're in a recession

31% say we're not in a recession; 21% aren't sure

68% of those who say there's a recession think it will end within a year

Data: Cicco & Associates Inc. Small Change

Percentage of small companies that say access to credit is their No. 1 problem: 3%

Data: National Federation of Independent Business


The Good Business Issue
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus