Nevertheless, "people are more aware than ever that you are judged on the quality of your product above all," maintains certified public accountant Paul Hense, based in Grand Rapids. His clients are primarily regional small businesses. Hense says one client has even grown his dental business by implementing a quality program that measures customer satisfaction, employee morale, compensation, and the effectiveness of his billing practices.
They're Resourceful
It doesn't matter whether some parts of the assembly kit are homemade or subcontracted; more businesses appear to be fully capable from the get-go. "They are more balanced," says Susan Davis, executive director of Investors' Circle, a network of socially responsible private investors who consider start-ups. "If they don't have the expertise themselves, they go out and get it." A huge array of services for start-ups and small businesses are enabling entrepreneurs to find, acquire, or absorb the skills and intellectual tools they lack.
Those newly available services and tools include those offered by National Institute of Standards and Technology field agents and Small Business Development Center counselors, as well as the Committee on Economic Development's annual report card and a range of publications geared to entrepreneurs. Small Business Development Center counselor and incubator manager Kim S. Pierce in Macomb, Ill., notes, "People come in today much more aware of business because of all the workshops and agencies out there."
Many of those agents help would-be entrepreneurs with such tasks as writing business plans to qualify for bank loans. Or they provide turnkey tools like Pierce's "One-Stop Shopping Kit" from the State of Illinois, which consolidates all the permits and forms needed from a new company.
Higher up the food chain, agencies help emerging businesses link up with complementary talent. "You don't see solitary individuals starting companies -- you see teams of two to five people," says John Freyhof of the Enterprise Corp. of Pittsburgh, which was formed in 1983 to help entrepreneurs find venture capital and technical support.
Even beyond the start-up phase businesses tap into networks that enable them to solve problems they couldn't tackle solo. "We are seeing more clustering of companies around one problem, such as ISO 9000," says Joseph A. Holroyd, a manager at Industrial Technology Extension Services, a New York State agency. Spurred by that agency, for instance, a group of ceramics companies recently banded together to discuss joint disposal of their hazardous waste.
They're Planned
A direct result of the new information market is that many small companies know where they fit in their market and where they want to go. "Ten years ago Sears could get very sophisticated demographics about potential customers. Today I can, too, at a reasonable price," Hense says, referring to a client of his who provides small businesses with crystalline data on market niches. "Even businesses that never had market plans -- like plumbers or CPAs -- have them today," Hense says. His clients now ask him for comparative statistics on how they stack up in such areas as labor costs or cost of goods sold. "I can answer questions like 'Should I lease or should I buy?' I have all those computations at my fingertips," he says.
Market Mapping Plus president David Fant provides the services Hense describes. Fant uses a demographic database that he customizes for small businesses. Recently, he completed a site analysis for an entrepreneur looking to open a bar and restaurant. First Fant took a set of criteria and generated locations that correlated to the owner's specs; then, once he'd found a site, Fant gave the owner a detailed plan. "When he went in for a loan, he had demographics and traffic counts -- even the exact location," says Fant. "He had a complete picture of what the market potential was at that site."
They're Experienced
As corporate refugees apply their business skills and experience to start-ups, they are creating baby companies with far better links to big business, access to partners and capital, and knowledge of a particular market or product.
"So many entrepreneurs are 'glass-ceilinged' out of the corporate world, and they take with them incredibly high standards," says Susan Davis. She says those high-caliber pros bring full Rolodexes with them, and they're "more inclined toward strategic partnering." Davis formed her company in 1990 with three crucial alliances. She hooked up with entrepreneurs to manage her company's conferences, to run the investment committee, and to make sure that members did network.
IBM alone, over the past couple of years, has released tens of thousands of experienced businesspeople into the economy. According to Alexander Auerbach, publisher of Out of the Blue, the newsletter for former IBM employees, many IBM cast-offs emerge with several advantages. First, he says, "there was a high ambient level of skills and training" at a company that already had high selection standards. Second, many employees went through rigorous internal planning ventures at IBM, which demands full (and perhaps excessive) forecasts and projections for its own projects. And third, many of those who left the company did so with capital to invest in a venture -- either a large nest egg from the stock IBM encouraged its employees to buy, or IBM retirement income.
