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

1. COLEMAN FELLOWS SUMMIT 2014: "It's Not As Foreign As You Think! (a.k.a. The Seven Secrets of Success for Independent Professionals) Jerome Katz Coleman Foundation Professor in Entrepreneurship John Cook School of Business Saint Louis University

3. Objectives for Today • Identify & leverage A/S skills for your own business. • Identify key resources and supports for the small business. • Clarify the critical success factors and pitfalls to avoid in your own business.

4. Arts & Science Based Self-Employeds

5. 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

6. 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

7. What Do You Teach Grad Students In Your Field? What You Teach Entrepreneurship Version Opportunity Search Capability Assessment (or competitive analysis) Opportunity evaluation Marketing & Impression Management • 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

8. More Good News: More Skills • Humanities & Arts • Expressive Skills • Communication Skills • Sciences • Quantitative Skills • General Scientific/Tech Knowledge/Skills • Arts & Sciences • Making things

9. Two Divers of Entrepreneurship • Opportunities (“Pulls”) • Passion-driven • Technique-driven • Usually more innovative • Necessities (“Pushes”) • Financially driven • Demand driven • Usually less innovative

10. 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

11. Today’s Secrets • Act to Open • Pick a Market • Craft an Entering Strategy • Price & Haggle • Think Strategically • Plan to Move Up • Help Helps. Get some.

12. 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

13. 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.

14. 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.

15. 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

17. 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

18. 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.

19. 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?

20. Prospecting Using LinkedIn

21. Prospecting Using LinkedIn

22. Search For Alums

24. Fine Tuning Location

25. 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.

26. Next: You Need An Irresistible Product

27. 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.

28. 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

32. 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!

33. 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!

34. 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

35. 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!

37. 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

38. 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.

39. 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

45. 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 hours81.73 * 1.6 = $131 / hr.

47. 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)

48. 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

49. 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

50. 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