By Dr. Harry Tennant


by Harry Tennant
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Entries with keyword: entrepreneurship
Posts 1 - 3 of 3

Monday, April 18, 2011

Developing a business and developing a course

Here’s a sketch of how a small business might work. An entrepreneur has an idea for a product. She makes a few. Customers love it and want more. She makes more and sells more. Pretty soon she’s selling so much she needs to hire people to help her make even more. She’s growing and on her way to success.

What is her product? It could be anything. It might be delicious fudge just like her grandmother used to make. At Disney World the product is a fun day with the family that will be remembered for years. At Massage Envy the product is a relaxing massage in a clean and comfortable environment. At Dell Computer the product is a custom-assembled computer with just the features each customer wants.

The sketch above is a common image of entrepreneurship but it isn’t how successful companies are created. The problem is that the story above treats making and selling the product as the point of the business. It’s not.

Making and selling the product is necessary to creating a business but the business is actually the processes for making and selling the product. That’s what successful entrepreneurs do. They make the processes that are the business and then run the processes. Why? Because it’s far more repeatable and efficient for everyone involved.

An entrepreneur’s business processes needn’t be complex. Imagine a binder labeled How We Do It. In that binder are the steps for each process. Most of them are very simple: just a sequence of steps. Some are simple checklists. Some are recipes. Some may be more elaborate spreadsheets or even directions for operating purpose-built automated machinery.

The great advantage of the How We Do It binder is that someone other than the entrepreneur herself can open it up to a certain process and do that job. Getting the work done no longer depends on the entrepreneur herself. When an entrepreneur buys a franchise for hundreds of thousands or millions of dollars, that’s most of what she’s getting: the process, the How We Do It binder. (The other part is the brand name but that need not concern us here.) So there is a lot of value in the processes.

What does all this have to do with teaching? I am suggesting that you should create a set of processes, the product of which is children who understand algebra or who can write a lucid paragraph. Does it sound impersonal and cold? It shouldn’t. Disney has processes for reliably creating memorable family experiences. Massage Envy has processes for consistently delivering relaxing massages. There is nothing cold or impersonal about these businesses and there need be nothing cold or impersonal about your class. There is no reason why you can’t create processes for instilling in students an appreciation for the works of Shakespeare and then repeat it year after year.

Does thinking in terms of process imply mass-production education? No, just the opposite. Dell Computer builds each computer to order. Their processes allow for flexibility and customized products. Your teaching processes can do exactly the same, if you so choose. But just as Dell could never support custom computers without the appropriate computer support to manage the complexity, so should you realize that the appropriate tools can help you achieve new results in your classroom.

A well organized classroom gets the job done while giving you more time for individual instruction and making personal connections, not fewer.

Posted at 12:00 AM (permalink) 6 Comments View/Leave Comment Share this post with email Share this post on Facebook Share this post on Twitter Share this post on LinkedIn
Keywords: entrepreneurship, processes


Monday, March 21, 2011

In-school entrepreneurs

Despite big business getting all the attention, our economy runs on small business. And small business comes from entrepreneurs.

If a student wants to be an entrepreneur, what should she do? First, there is no need to wait. There is no minimum age limit to start a business or even a corporation.

Just like you can't learn to program without doing some programming, if you really want to learn about starting a business, start a business! You've got the summer off, start a business. You've just taken a week off for spring break. You could have started a business. You have some free time in the evenings that you piddle away watching Dancing with the Stars. You could start a business. Not only will you learn about entrepreneurship, you can make some money!

Summer business: My son made a bundle in high school during the summer by mowing lawns. But it wasn't just regular lawn mowing. He went around to realtors and asked if they had unoccupied houses that needed their lawns mowed. By going to realtors, he minimized the number of people he had to sell to and could maximize his time cutting grass, or hiring others to cut the grass.

Spring break business: Hey, you don't want to start a business during spring break! You want to go skiing with your buddies, right? Well, you and your buddies have to get there and you have to stay somewhere and you have to eat something. Ron, a friend of mine in college, used to arrange all that stuff, get a gang to sign up and pay for his trip and then some. He went skiing and had a spring break business.

TV time business: Often the computers on the shelf have not exactly the right components for the buyer's needs. I don't need that expensive graphics board because I don't play games. You don't need that huge disk because all you do is play games. So, custom assembled computers let us both mix and match the components we want and get exactly the computers we need. Sticking components into a computer motherboard is something that can literally be done while watching Dancing with the Stars (best of both worlds?) And that's what Mike started doing in his spare time in college. It worked out pretty well for him. It became Dell Computer.

If you're interested in learning how to start a business from scratch, I recommend Mike Michalowicz' The Toilet Paper Entrepreneur. It's full of good advice about how to start a business with next to nothing. It's also full of scatological humor as the title indicates which I don't find appealing, but if you're a kid in high school, you might love it.

Posted at 12:00 AM (permalink) 1 Comments View/Leave Comment Share this post with email Share this post on Facebook Share this post on Twitter Share this post on LinkedIn
Keywords: entrepreneurship


Thursday, March 17, 2011

What is a business?

The way I see it: a business is an organization that applies limited resources to create customer value and sustainable profit.

Customer value
It starts with creating customer value...creating something that somebody wants. How do you know that you've created something that somebody wants? Traditionally, you know somebody wants something if they're willing to pay for it. In other words, if they're willing to become a customer. Why? Because it costs something to create the product, convince people to buy it and get it into their hands. So the customer is doing her part by paying for it.

But the economics have shifted. With certain online products, product distribution is so inexpensive that many are given away for free. Lots of software and online services work this way. Download software to use for free, and maybe send a contribution if you like it. Or use it for free for 30 days and then buy it if you like it. Or maybe use it for free forever but get ads displayed in the margins. Or use the basic system for free forever but pay for the premium version with a few more useful features.

This is great stuff for several reasons. Customers get a better idea of what they would eventually buy before they buy it. Yet it costs the software provider next to nothing to do. The software provider gets to learn a lot about the market, even if sales are disappointing. How many are downloading it? What do they like or not like? What kind of software would they love to see? Do you realize how expensive and uncertain it was to gather this kind of information in the old days?

Limited resources
Every business has limited resources and some small businesses do better because they have limited resources. Big corporations often create products that are the dream of some vice president. And because she's a vice president in a big corporation, she has the clout to throw a lot of advertising money at the product to make it successful. But the really successful products are the ones that don't need a lot of advertising to get started. A few people try it and can't wait to tell their friends, who try it, and the sales grow. This is because the product is just exactly what some customers have been needing. Are corporate vice presidents likely to identify this kind of need? Nope. They spend their days in financial meetings and quarterly reviews. It's the people deep in the corporation, or, better, the people with the needs, that identify and understand them. That's how limited resources can actually be better than buckets of money.

Sustainable profit
Whether profits are sustainable mainly depend upon how the market will change and how competitors will react. With baby boomers aging, the market for retirement homes and medical facilities will increase. If you're on the right side of market trends, sustainable profits can be a lot easier. If your product is going to clobber some rich, existing competitor, watch out. Even if your product is better, they may have the resources to crush you or at least delay you until your money runs out. So, for sustainable profit, look for markets where the big guys aren't. Look for markets where somebody who needs something just can't find it. Or look for markets where the only available products are big and high priced but where there are some customers who just want little and cheap. Then you may have the potential for profits well into the future.

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Keywords: entrepreneurship

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