http://www.JobSpectrum.org/job_weekly.html Start Me Up: Is Small Business Entrepreneurship in Your Future? Nan Knight |
Ask college students majoring in the sciences about "mainstream" employment for scientists in the United States and they're likely to point to the large corporations that set up recruiting booths on campus. "This is a widely held misconception," says Sharon V. Vercellotti, President and Founder, V-LABS, INC., of Covington, Louisiana, and Chair-Elect of the American Chemical Society (ACS) Division of Small Chemical Businesses. "In chemistry, almost half of all recent graduates go to work for small businesses. Not only are small businesses a part of the great American scientific entrepreneurial tradition, but they provide a surprising preponderance of the jobs that are available." In 1999, the federal government listed 13,534 chemical employers. Only 2.3% were classified as big businesses, and 42% had less than 20 employees. Today, more than 99% of employees in chemical businesses work for companies with fewer than 500 employees.
Even in an economic downturn, most analysts agree that business prospects can be bright for small chemical enterprises. If you have an original idea, a unique or in-demand set of skills, or an innovative approach, starting your own business may offer new horizons of freedom and rewarding challenges. Making the leap to small business ownership requires a careful analysis of tangible and not-so-tangible assets and a realistic assessment of your capabilities and prospects. A number of small chemical business owners spoke with JobSpectrum.org and offered advice about the rewards and pitfalls of going out on your own.
Sidebar: How Big Is Small?
The Best-Looking Boss is the One in the Mirror
"The first advantage to owning a small business is that you're the boss-you decide where the company goes and what it does," says Donald Lorenz, PhD, founder of Ridge Scientific Enterprises, Basking Ridge, NJ. Lorenz left his job at a large scientific corporation in 1991. "In a large-scale industry, you can find yourself buttonholed into one narrow area of focus. If the company is yours, you can decide to take on new challenges and new areas of investigation." Vercellotti agrees that being able to choose new horizons makes small business ownership especially attractive: "Not only are you in charge of the company's areas of focus and direction, but this flexibility means that you are better equipped to adapt to satisfy the specific needs of individual customers, something that the structure of large corporations often makes very difficult."
The advantages of this freedom extend to work environment and culture. As the boss, you're free to choose your co-workers and decide how you'd like your workplace to look and function. If you've always wanted an office with a pinball machine or cappuccino maker, this is your chance. If you want to locate the workplace in a scenic rural area, that's your call, too. None of these decisions can be made without considering the consequences, but if you're the boss, they're your decisions to make.
Whether you start your business alone or with partners, the most obvious advantage is that success can bring you direct financial gain. If the company prospers, you prosper. For many entrepreneurs the return on hard work has been exponential and increasing financial rewards far beyond any income they might have made in traditional salaried positions. In addition to earnings and profits, a successful company is a valuable asset. Managed well, the sale of such a company may provide lifelong income.
Sidebar: The Shape of Small Business
Is the Risk Right for You?
Risk taking and entrepreneurship are closely connected: if you aren't comfortable with the first you probably won't succeed with the second. "Even after you've done substantial research and have a solid strategic plan in place, you still have to be a risk taker to make this leap," says David Armbruster, PhD, of Armbruster Associates, Inc., of Summit, NJ. Armbruster is past president of the Association of Consulting Chemists and Chemical Engineers (ACC&CE) and Chairman of the Board of the New Jersey Group of Small Chemical Businesses.
The Small Business Administration (SBA), which provides an umbrella of financial, informational, and other support services for entrepreneurs, emphasizes that not everyone is cut out for starting a new business. The SBA Web site offers a checklist of questions to rate your own entrepreneurial spirit, recommending that you look carefully to decide if you are:
Advice from the Experts: Be Prepared
Experience: Even if you've really invented
that better mousetrap, making the world beat a path to your door can be a challenge,
especially if you're a new graduate and have little experience in your industry.
People who have previous work experience run the most successful startups in
chemistry. "Most of our members became consultants and small business owners
after having been employed in chemical and pertinent areas for a number of years,"
says Linda Townsend, Executive Secretary of ACC&CE. Armbruster agrees: "It's
hard to do this right out of school. You need experience. The biggest obstacles
to starting a successful small business revolve around the responsibilities
that become yours and yours alone as the owner and operator."
Donna Cole, President and CEO of Cole
Chemical & Distributing, Inc., Houston, Texas, recommends a minimum
of 5 to 10 years work experience before starting out on your own. During this
time, future entrepreneurs learn "policies and procedures to implement
in their own organizations, develop relationships, learn about products (test
methods, R&D, sampling, statistics, what works and what doesn't) and how
to determine exactly what kind of small business they'd like to have,"
she says.
Previous work experience is also likely to impart a broader view of the field
you are about to enter, an asset that's especially valuable in today's fast-paced
scientific environment. "You need a broad background," says Lorenz.
"The more narrowly you define your area of expertise, the more likely that
your opportunities may be limited. Sometimes a business is started because there's
an initial large demand, but this can then wear out." Armbruster, whose
business has expanded from a consultancy to include international seminars,
emphasizes that a wide perspective on the field can help with future flexibility:
"Sometimes the business you started may not be the business you end up
with."
Networking: If you're leaving one company to found your own, the experts advise that you don't burn any bridges. One of the most important elements in your success will be your ability to network-to leverage the contacts you have into new contacts that will expand your business. In many cases, your old company may be a customer of your new enterprise. Sometimes companies choose to spin off entire divisions, awarding the business to ex-employees or making current employees into consultants.
Both Vercellotti and Armbruster recommend membership and attendance in professional organizations as an excellent method for keeping up a strong network of contacts and support. "The American Chemical Society offers an array of services and programs through the Division of Small Chemical Businesses and through programming and other divisions that help out those going into business for themselves," says Vercellotti. "And attendance at local and national meetings helps in meeting people who can direct you to new business or advise you based on their own expertise."
ACC&CE extends the networking concept to an active mentoring program. "Each of our new members is assigned a mentor," says Armbruster, who was instrumental in starting this initiative. "Every new member of our organization gets a mentor who is available for advice on a whole range of topics, from finance and taxes to strategic planning." Armbruster notes that networking extends to ALL your contacts as a small business owner. Good relations with customers, suppliers, colleagues, and consultants are important in keeping the lines open for new and continued business.
Strategic Planning: Even with the best idea or product and a stable network of support, you need a solid, long-range plan in place before you make the move to start your own business. Without such a plan, you won't be ready to meet unexpected contingencies and you almost certainly won't have the necessary documentation needed to secure financing. SBA offers an excellent start-up kit that includes guides for strategic planning. Available in abbreviated form online, the kit provides a complete how-to document, including downloadable forms, glossaries, FAQs and self-assessments, and an essential list of resources and contacts. Of special interest to every small business owner is the description of financial and advisory services SBA provides on an ongoing basis.
"Everyone has questions when starting out a business," says Lorenz. "How much to charge? How to find customers? Although mentors and others can help identify the answers to these questions, strategic planning is important in laying solid groundwork for future development."
Be careful of hidden agendas when getting advice on starting up a new company. A number of businesses market start-up kits, financial advice, business plans, and other tools, some at costs that can become major investments. Consider first whether you can get these same kinds of materials free from SBA or by doing a little research yourself. And consult your lawyer before making any long-term or substantial financial commitment to a business advisor.
Financing: Whether you're about to start a one-person consultancy or a 300-person manufacturing company, you'll need to have your financing in order before you begin. Vercellotti and others advise at least a one- or two-year personal financial cushion, because you can't count on your new business returning a profit that matches your previous income. Money for start-ups can come directly from a bank, from your own savings, through loans directly from or guaranteed by SBA, or through investment by other individuals or companies. The services of a financial expert who has worked previously with companies of the size and type you are starting are essential in this process. He or she can advise you on the restrictions and obligations that come with some types of funding and point out how your company should be organized to best protect your investments. Careful financial planning and support can see you over the initial rough spots in business ownership and put you in a position for future expansion.
Experts advise that start-up finance plans should also cover initial insurance
needs. If you are a manufacturer, you'll need product liability insurance, which
requires substantial research and airtight legal advice. If your services involve
consulting, you'll need professional
liability insurance, which ACS offers to its members. In addition, if you
have employees, you'll need to provide health insurance and other coverage according
to federal, state, and local requirements.
Small Business Success: The Up Side to the Economic
Downturn
If your stock portfolio has taken a recent drubbing, you may think that this is not the best time to start up a new company. Paradoxically, as the economic indicators edge downward, the opportunities for startups may be expanding. "Many larger companies are closing some of their research and development areas," says Vercellotti. "Their R&D needs won't disappear. They're looking to outsource their problem solving needs, and, increasingly, smaller companies are being tapped for these tasks." Part of the impetus for this move to outsourcing comes from the fast-paced research environment, in which many large companies cannot afford to maintain groups of narrowly focused specialists for what are sometimes only temporary requirements. "The smaller, more specialized company becomes the ideal resource for this kind of work," says Vercellotti. "Such outsourcing often helps the large companies increase speed to market, and ends up increasing the financial performances of both large and small businesses."
The hottest areas for current outsourcing in chemistry, not surprisingly, are the same areas in which the demand is greatest for new employees: biotechnology (especially in areas related to genetics) and new materials. The key for small business owners is to stay on top of the new technologies and identify coming needs. Again, flexibility, networking, and planning are essential in staying ahead of the economic curve.
A Job Well Done
There's always satisfaction in a job well done, but that satisfaction increases markedly when you're doing it for your own company. "I've really enjoyed having the vision to see the big picture, quickly analyzing situations, making decisions and conceptualizing processes and then implementing projects to completion," says Cole of her experiences as a business owner. "I have numerous choices to make and, even though many things happen outside my control, I know that there are many things that I can do to prepare for change and meet change head on." The challenges of charting an individual course in business may not be for everyone. But for those who've asked themselves the right questions, made detailed plans, and secured the right financial and contact support, the rewards can include a stimulating workplace, new scientific and intellectual horizons, and substantial financial compensation.
Nan Knight is a freelance science writer and editor whose credits include Smithsonian exhibits, Discovery Channel Web sites, and a wide range of publications on radiation in medicine.
Related Reading
Chemical Employment in Small Companies. Finding and working for small companies is a unique process. There are ways to find hidden jobs and posted jobs in small companies. This publication from the ACS Department of Career Services offers some insight into the process.
Small-Business Posts Offer Safety Amid Turmoil from CareerJournal.com
Recommended Resources
Your first stop and best new friend will be the Small Business Administration Web site, often called "the most customer-friendly enterprise of the federal government." It's all here: the how-to's, the pitfalls, answers to all your questions, downloadable forms from A to Z, and directions on how and where to get assistance and guidance at an SBA office near you. The SBA also operates a toll-free "Answer Desk" at 1-800-8-ASK-SBA (1- 800-827-5722), to give callers direct referral to appropriate sources of information.
Association of Consulting Chemists and
Chemical Engineers
The members of this New Jersey-based organization are consultants in chemistry
and chemical technologies. The organization provides resources, mentors, networking,
and referrals and publishes The Chemical Consultant.
eWeb Entrepreneurship Education site
at St. Louis University
A short course on small business startup, with good links, educational advice,
and business plans.
Business Owner's Toolkit
This site includes an advice column, references, downloadable checklists, model
business plans, and is especially helpful on federal regulations, tax, finance,
and legal issues.
Idea Café
Excellent small business site with frequently updated content, including news,
articles, and resources. This accessible site makes an especially effective
"point of contact" for owners of sole proprietorships or very small
businesses.
National Technology Transfer Center
University-based site with strong government ties that assists businesses in
taking technologies to the international market through e-commerce. Offers a
number of services, including commercialization strategy development, training,
technology commercialization evaluation, and competitive intelligence reporting.
Small Business Advancement National Center
(not affiliated with SBA)
Affiliated with the University of Central Arkansas, this site offers multifaceted
small business counseling and electronic information resources.
Small Business Resource Center
(not affiliated with SBA)
A private individual with an interest in small business development began this
site. The site has good links and an excellent list of resources, including
sometimes hard-to-find advice for building a Web presence for your company.
StartUpBiz.com
This site offers a seven-step startup program for entrepreneurs. The emphasis
is on risk evaluation and positive action. The site offers a range of other
resources.
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