Despite poor economy, local entrepreneurs seem optimistic
Tuesday, November 03, 2009, 9:03am
By CRAIG FREILICH
POTSDAM –If the local residents attending Marc Compeau’s “My Small Business 101” class are any indication, the local economy just might be looking up.
The Forbes.com columnist and Clarkson University business professor’s latest class of local entrepreneurs is the largest since he started teaching the evening course in 2005. This class has 87 students, up from 60 in last February’s class. And the optimism in their outlook is rising too.
Some of the students are trying to expand their businesses during challenging times, Compeau said, and “in a glass-half-full picture, there are people looking to take advantage as the economy emerges from difficulty.
“This is a very optimistic group, not ‘woe-is-me’ as we’ve seen in the past, especially just prior to Walmart’s arrival,” Compeau said.
Back then, he said, “they were in a terrified mood, so much so that we had to set ground rules: no complaining about big box stores, but just move forward.
“It’s a different environment now. People are looking for ways to be successful.”
He said there are students in the current class who clearly believe the economy is on the upswing and they want to get on for the ride upward.
“It’s interesting to note that 58 percent are actually practicing entrepreneurs. So 42 percent are just starting out. It speaks to where we are as the economy recovers.”
They are a diverse group, too, he says.
Farmers, Retailers and Professionals
“There’s a neat mix. There are students from Clarkson’s Physical Therapy Department who are about to get their degrees and set up their practices. There are farmers – farmers have always participated in these classes. And lots of retailers.”
The course for local people operating small businesses, or wanting to get started, began with support from Clarkson and help from a grant from the Coleman Foundation in 2005. Since then, help has come from the Fresh Sound Foundation, “and a significant contribution from David Reh, a Clarkson alumnus who was in industrial distribution in the Rochester area. He loves the North Country and wants to give back.”
Compeau is giving back too. In addition to the degrees he has earned, he has put his ideas to work in the local business arena, most recently with Go Mascots!, the Market Street college and high school logowear shop he opened last summer with former classmate and longtime friend Chuck Lamon of Victory Promotions. His education and experience combine to allow him to lead other small business owners and those who want to get into business.
The free My Small Business 101 classes cover the basics of “common, critical elements of business operation,” such as strategic planning, managing people, managing cash flow, media planning, and putting technology to work. This is done through 90-minute sessions once a week for four weeks.
Compeau tries to tailor the course to each group’s needs also taking into account the community in which they will operate. Some municipalities assist the students with scholarships or stipends through Community Development funds, grant submissions, or chamber of commerce support.
Focus on Customer Needs
So what single bit of advice would Compeau give to people starting out or looking to expand?
“I was just interviewed by Investor’s Business Daily and they asked that. What I have seen is so much doom and gloom due to cutbacks. But what I’m noticing is the businesses that are focusing on market orientation – consumers’ wants and needs – and they are the ones that are thriving.
“In basic business education, we say there are only two ways to grow profit: cut costs, and increase revenue.
“Managing costs is critical, especially in a downturn, but you can’t ignore revenue.” Cuts can help the bottom line, Compeau says, but it would be easy to cut too far.
“Be very aware of what the customer wants. If there was ever a time for market orientation, it’s now.”
And what about the most common mistake first-timers make?
“Undercapitalization,” he said – not enough money to carry the business through the first months or years to profitability, or once a business is established, trying to expand too quickly.
“Many companies try to grow too fast. There are significant costs with growth -- increasing production lines, adding locations, increasing inventory, hiring more people. So many entrepreneurs say they will make more money, and they might, but they have added significant new expenses that can outpace the revenue side.”
Add to that a collapsing credit market, when an expanding company can’t get a loan when they most need it, and disaster can ensue, Compeau says, as a great many businesses here and around the country have discovered in the last year or two.
So his emphasis is on “customer service, not just as the customer is purchasing the product but during the whole experience.”
It’s axiomatic in many businesses that the revenue core comes from the customers that come back again and again.
“Businesses that recognize this, from the customer’s first exposure through post-purchase satisfaction, are more likely to be successful. It’s the whole experience, not just the moment when you’re taking their money.”
Internet Marketing Promising
Compeau also sees some promise for the North Country in many of his students’ interest in the World Wide Web as a marketing tool.
“Quite a few are looking at web-based applications. It means that talented people are looking at making the North Country their home but reaching beyond the region to a broader audience for revenue.”
This echoes the emphasis Clarkson University is placing on its “Wired Forever” initiative, to entice business people to do just that, and the effort that former Sen. Hilary Clinton and the St. Lawrence County Chamber of Commerce began with the Northern Adirondack Trading Cooperative, to get local producers on the web so they can draw customers in from far away.
He’s also seeing organic and holistic-style farmers in his classes looking to expand, and “lots of people from Massena. I’m not sure exactly why – it could the closing of the GM plant, but I’m not sure. But it’s great.”
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