Thursday, March 27, 2008

Business Plan Contests

March Madness isn't just for basketball. Colleges have business plan competitions going on, too. The Wall Street Journal recently ran an article on how exciting these competitions can be. Students learn from the process and the feedback. And they have the chance to win seed capital for their ideas in the form of cash prizes.
(I've also shared the article in my sidebar.)

A few years ago, I mentored a business plan team from Wharton one year and was really impressed by the quality of the writing, research, thinking and creativity. Another year, I met the winners of the business plan competition at Princeton. Wow! Were those kids impressive. I often wonder if they actually got their business off the ground.

If you're a student, see if your college has a contest. If not, start one.

Tuesday, March 18, 2008

From Chicken Farmer to Great Entrepreneur

Jon Huntsman's life sounds like the true American dream. He grew up the son of a rural school teacher, which gave him a work ethic. After getting a degree from Wharton, he turned down a job at IBM to sell eggs. He used his experience as a poultry farmer to start and grow more busineesses. He always took unconventional routes. Wharton has posted a video of Huntsman talking about his life and business -- how he went from poultry farmer to starting a container company to founding a chemical company.

I'm a Wharton Graduate School alumna. When I returned for my class reunion, I was amazed at the brand new Jon Huntsman Hall which now housed the latest high tech classrooms and meeting rooms. Regular, good people can make money and share it.

Huntsman says part of his success is due to humility and to being open to new ideas and to learning. We all have a lot to learn from him. video:,


Friday, March 14, 2008

Online Borrowing and Lending

What do you do when you can't get a bank loan or raise equity capital from angels or VCs? You could turn to an online network of lenders. An article in The Wall Street Journal on March 12, 2008, told the stories of several small business owners who did exactly that. One, Jeff Walsh, borrowed $22,000 from His interest rate was 10.25%. The article went on to list other online lending services, or person-to-person lenders: and

These lenders make small, unsecured loans. The field is growing, particularly during the credit crunch, which has dried up many traditional sources. Such companies made about $100 million in new P-to-P loans in the US last year. Even Richard Branson, owner of Virgin Group, has jumped into this market with Virgin Money USA.

To read more, go to the small business section of the online Wall Street Journal. The specific article is at:

Thursday, March 13, 2008

Business Plan Contests

Ideablob is a site where you can enter your business plan to raise seed capital of $10,000. There's a new contest each month. Last month Penn State student Aaron Fleishman won for designing a way to use wireless networks to help sick children in the developing world.

The Ideablob site is run by a bank and is in beta, but it looks worthwhile. Before you enter, though, make sure you read all the instructions and also be sure that you really answer the questions that investors ask. I list the top ten questions on my Upstart Business Planning website:

No matter what stage you're in, keep planning for the future, but take action to realize your goals.

Tuesday, March 11, 2008

Ben Stein on Taxes

Our family have been fans of Ben Stein for a long time. We loved him as the monotone economics teacher in Ferris Bueller's Day Off and as the host of Win Ben Stein's Money on Comedy Central years ago. Ben is not just an actor. He's an economist, lawyer, writer and Republican. I'm a fan of his New York Times column in the Sunday Business section.

His March 9, 2008 column took the form of a letter to John McCain telling McCain what to do with taxes, if he became president.

Basically, Ben took the time to explain why we have a huge deficit and how to fix it. We're spending enormous amounts of money on entitlements, defense and other government-run programs. He went on to say that our nation can't afford to continue to run up deficits by keeping taxes so low. He says we need to tax the people most likely to be able to give up some of their income -- the top earners. He makes a pretty good rebuttal to the editorials in the Wall Street Journal which take the opposite point of view.

But the whole thing got me thinking about taxes. The most punitive, regressive taxes we have are payroll taxes. I mean, even teenagers in part-time or summer jobs or the poorest landscape workers or check-out clerks at Wal-Mart have to pay payroll taxes. They may not make enough to pay income taxes, but payroll taxes are withheld from everyone from the first dollar. Even worse, the employer has to match the tax. This means that employers pay far more than salary for each worker. Small business owners, sole proprietors and entrepreneurs have to pay both sides. Yet, once an salary has exceeded $97,500, the tax (both sides) disappears, giving workers and businesses a sudden boost. These Federal taxes include the Social Security Tax (6.2% from each person, and 6.2% from each business) and Medicare tax (1.45% each).

The way the system is set up creates distortions. It makes people hire workers off the books. It encourages the hiring of illegal immigrants. It hurts growing businesses and low-income workers and nonprofits, who have to pay far more than the minimum wage, once the tax is added in. If we could eliminate these taxes on the lowest-income workers (up to $25,000 in income) and take the income cap off, I believe we could free up a lot of capital that could go to paying off personal debt and funding health insurance. It would spur growth and hiring and reduce the incentive to hire undocumented workers. It would be a very creative way to increase taxes on the highest earners, while ensuring that Social Security and Medicare would remain solvent as the Baby Boomers enter retirement.

I hope that someone who reads this will help spread the word about this idea. Is anyone reading this and agreeing with my idea? Anyone?

Monday, March 10, 2008

Importance of Customer Service

Ad Age ran a great article today on the importance of customer service. A link is in the sidebar and here: But here's the beginning of the piece:

YORK, Pa. ( -- A Harris Interactive poll finds that a whopping 95% of people believe it is at least somewhat important that companies know "who I am, my buying history, past problems or complaints, preferences and billing record." Some 37% said knowledge of personal history is important, and more than a quarter -- 27% -- called it "very important."

This information is really telling. It shows that consumers -- aka, customers -- want to be treated with respect. While the old model of the local bricks and mortar stores where the merchant knows you personnally is practically gone, customers still want to feel a connection to vendors. I sure like it when I call a company with a problem, and they have caller ID that tells them who I am. LL Bean does the best job with this. I also appreciate being greeted and thanked at the grocery store or at Wal-Mart. knows what I've bought in the past and makes recommendations to me. All this creates important connections.

If you're starting a business, keep high quality customer service on the top of your to do list. Make it a part of your marketing plan. It's the face you present to your customers, even when you can't see their faces.

Monday, March 3, 2008

Women-Owned Businesses

Women entrepreneurs unite! Women are the ones who are the biggest engines of growth in this country. A report by the Center for Women's Business Research shows that there are 10.4 million firms owned by women. These businesses generate $1.1 trillion in sales. And they are growing at twice the rate of all firms.

Not only that, women-owned firms without employees generated $167 billion in sales in 2004. This just shows how powerful self-employed women entrepreneurs can be.

I've worked with a number of women entrepreneurs over the years and can say that without a doubt, women tend to do their homework, work hard and make careful purchasing decisions. I also believe that lots of women have started their own businesses because they have more faith in themselves than typical employers tend to have in women employees.