When he began waiting tables as a part-time job to get him through school, Creed Ford ’75 never dreamed of the successful restaurant empire that he would one day lead. Today, he is the CEO for Carino’s Restaurants. He and his wife and partner, Lynn, have brought casual dining to Texas cities like Bryan-College Station with restaurants such as Carino’s, Rudy’s, and Chili’s, which had previously been seen only in larger metro areas.
Business acumen and work ethic propelled Ford to success in the restaurant industry, but it’s passion that has kept his career from mediocrity, he says. It’s that same passion that keeps the American dream of free enterprise strong, even in tough economic times. With businesses closing their doors daily, it’s hard to believe that this shaky economy could be the perfect environment for starting a business, but that’s just what the experts are saying.
According to Richard Lester, clinical associate professor and executive director of the Center for New Ventures and Entrepreneurship (CNVE) at Texas A&M University’s Mays Business School, the shifting economic environment means the timing couldn’t be better for a new venture. “The economic environment is in such a tremendous upheaval that uncertainty is created in consumers’ minds,” said Lester. “The uncertainty decreases their brand loyalty, and when customers are willing to give their loyalty to someone else, holes are created for entrepreneurs to go in and take market share away from larger, more established companies.”
Grabbing customers, building a business
Consider that when a company’s finances are shaky, the focus shifts to reducing costs and customer service often takes a backseat. When this happens, entrepreneurs can come in and “grab” customers who are being moderately or poorly served as an effect of the cost market, and still be successful.
“When customers are willing to give their loyalty to someone else,” explains Center for New Ventures and Entrepreneurship executive director and clinical associate professor Richard Lester, “holes are created for entrepreneurs to go in and take market share away from larger, more established companies.”
Lester added that these holes give entrepreneurs the chance to move into a niche market and fulfill a need for a specific good or service that may have been missing or unsuccessful until their business arrived. “When unemployment exists, an entrepreneur sees training opportunities in the increased amount of human capital available. The economy is in such a state of flux that small, nimble, flexible entrepreneurs are best positioned to come in and take advantage of those opportunities,” Lester explained.
Lester encourages prospective entrepreneurs to take advantage of available resources. Aside from the entrepreneurship class that Lester teaches at Mays, the Center for New Ventures and Entrepreneurship recently offered a group of evening classes, Start-up 101, to give potential business owners an edge when entering the marketplace. The classes walked would-be entrepreneurs from the A&M campus and community through making an idea a business, with lectures from successful business owners like Ford, as well as Mays faculty members.
It takes more than passion and opportunity to make a business grow. Lester says perhaps the most important part of creating a business is to develop a sound business plan. “Research shows that you’re more likely to be successful if you have a well thought-out business plan,” he said. “It forces you to think about all aspects of the business – how it will be structured, current and future financing, and its ability to survive if only 50 percent of projected sales are reached.” A stable financial projection is crucial, considering one of the reasons many companies fail is because they simply run out of cash. Lester recommends laying out a best, worst, and most-likely case financial scenario to help ensure survival. He added that the business plan is beneficial for determining the network of personal relationships necessary for building a strong business.
“The hard truth is that trying to find a spot in the marketplace is usually short-lived and fraught with peril; this is the reason many start-ups don’t make it,” he said. So, it is of utmost importance to talk to as many professionals as possible to obtain advice when developing a business plan.
Living the dream
Following Lester’s advice, two former Mays MBA students are on their way to successful business ownership. Ohad Nezer, who took Lester’s entrepreneurship class, had always had a passion for the Internet and any corporate opportunities that could come from it. Nezer examined the industry, seeing the lucrative potential of an independent business endeavor. There was a challenge though: Nezer lacked the technical skills to launch such a business. During a study break in the Ag Cafe on the Texas A&M campus, Nezer and classmate Chris Nicolaysen developed the plans for seatkarma.com, their own version of Stubhub or Ticketmaster. Nicolaysen had the technical skills to bring Nezer’s plans to fruition, having years of experience in technical knowledge management.
Nezer and Nicolaysen didn’t rush into things. They began by discussing the functionality of the website and determined their ultimate goal. Then, they chose a name for their business that would develop a brand distinct from their competitors. “We wanted to make sure that we brought value to consumers and ticket buyers, and not put something out there that could be easily duplicated or was already available,” said Nezer. The partners conducted a competitive analysis to see what similar ticketing sites were doing, later brainstorming ideas on how to improve on the competition’s operations.
The entrepreneurs expressed the many challenges that come with building a business from the ground up, warning that for them, the two biggest obstacles were time and money. “You’re getting into a territory where people have knowledge that you don’t have yet because of their experience in the industry,” said Nicolaysen. “It’s important to enter into this very methodically.” Both full-time students at the company’s inception, Nezer and Nicolaysen faced the challenge of finding people to help develop Seatkarma’s technology, as well as the money to pay for everything, while staying on top of their studies.
Despite the time and energy it cost them, the entrepreneurs are certain that their sacrifices were worth it. “It has always been my dream to start a business,” said Nezer. “When you talk about dreams, you don’t always use common sense. You just go ahead and do it.” He added that in today’s economy, it can be very difficult to find a job, so following a business dream makes sense.
Seatkarma.com is faring well, despite the shaky economy. Nezer and Nicolaysen explained that when times are tough, people tend to decrease travel, but still want entertainment. “Entertainment is a release for people, so it would be reasonable to think that our demand would increase right now, even in a recession,” said Nicolaysen.
The Ultimate Goal
These entrepreneurs are focused on more than profits. Nicolaysen emphasized that when looking to fulfill a business dream, he and Nezer wanted to feel good about what they were doing. This desire led them to add a philanthropic spin to the company, which now donates a portion of all profits to charity. “This became a driving force behind the website,” said Nicolaysen. “We are seeing what we can do to not only help ourselves, but also to make a contribution back to society.” He encourages all entrepreneurs to consider this when thinking about their reasons for going into business.
Like Ford and Lester, these young entrepreneurs expressed the necessity of passion when starting up a business. “Eventually, being a successful business owner can lead to a lot of freedom that isn’t there when you’re working for someone else. That’s the ultimate goal – “but until then the passion for what we do keeps it fun. It doesn’t even feel like I’m working,” Nicolaysen added. Lester agrees, stating that building a business isn’t something you are pushed into, but rather, pulled.