Enterprising entrepreneurs can successfully blaze new trails — in good times and bad
By Amy Lynn Smith
Entrepreneurship is alive and well, despite the economic challenges facing today’s business community.
In fact, times like these may force people to think about being an entrepreneur, says Jim Schrager, SBA ’70, a strategy researcher and clinical professor of entrepreneurship and strategic management at the University of Chicago Booth School of Business.
“If you’ve got a great idea — a very well thought-out concept — it’s always a good time to start a business,” he explains.
No matter what the economic environment, Schrager says, three fundamental components are required for a business to succeed: leadership, strategy and luck. “Very rarely can any one of these things by itself end up a big success,” he explains.
Strong leadership, no matter how it’s carried out, is essential. Then there’s strategy. You need a good idea, one that’s innovative and not imitative. Last but not least is luck. It’s not something you can control, Schrager says, but you need to understand when luck plays a role and account for it.
Being an entrepreneur requires some other essential attributes, too. One of these is unwavering willingness to work hard. “Entrepreneurs who fail are those who believe it’s an easy road to riches,” he explains.
But entrepreneurs reap certain benefits usually not found in corporate jobs. For one thing, stress is decreased when you control more of your life, Schrager says. “Entrepreneurs deal with stress because of the marketplace, but they don’t have the stress of uncertainty from above,” he explains.
Perhaps most important, entrepreneurs may just be happier. “The people I’ve been lucky enough to talk with who have the most wonderful lives are always entrepreneurs,” Schrager says.
Here, we profile four OU alumni -- two from the SBA -- who are outstanding examples of the fundamentals of successful entrepreneurship in action.
Johnna Goodwin, owner, Changing Places Moving
It’s been said that every home needs a feminine touch. Although Johnna Goodwin, SBA ’85, brings much more to her business than her gender, it’s definitely been an asset.
Goodwin took over Changing Places Moving in 2002, after being a partner in the Waterford, Mich.-based business for 17 years. Being the sole provider for her three children — whose support she credits for a large share of her success — Goodwin knew she needed to find a unique angle to help the business grow. Although she earned her bachelor’s degree in accounting, Goodwin says marketing “came very naturally” to her.
She began networking with real estate agents, mortgage companies, bankers and area Chambers of Commerce. “My goal was to meet one hundred people every week, and my referral base just started to grow,” Goodwin explains.
In her first year running the company, about 12 percent of its business came from the real estate community. Today, that figure has soared to 87 percent.
Being a woman in a male-dominated marketplace doesn’t hurt, either. For one thing, women tend to be the ones negotiating the moving deals. Goodwin also believes she has enhanced the company’s attention to detail and sensitivity, a mindset she extends to her crews through ongoing training.
“Moving is right up there with death and divorce as being one of the most traumatic events in life,” she explains. “We wanted to take the horror out of moving.”
Changing Places Moving has grown steadily and customizes its services to the needs of each client and their budget — something that’s proving especially attractive to consumers today.
Although she admits these are challenging times, Goodwin sees the opportunity to be creative, and is exploring avenues for continued growth such as companies that are relocating. “Staying current with industry changes and networking is really important,” she says. “And most of all, you have to be ready and willing to change when the situation calls for it.”
For proof that entrepreneurship takes many forms, consider Jim Schrager, SBA ’70, who engages in three different “jobs” in a typical week.
The first is teaching corporate strategy and entrepreneurial strategy — two related but entirely different subjects, he says — at the University of Chicago Booth School of Business, where he’s been a clinical professor since 1997. Second is his work as a researcher, studying companies and seeking new solutions to business problems. The third endeavor is his consulting work with start-up businesses and established companies, sharing the expertise and knowledge he has acquired over more than 25 years as a researcher, teacher and adviser.
“Strategy is equally important to start-ups and corporations, so I work with both to help them make sure their strategy is going to serve them well,” says Schrager, who earned a bachelor’s degree in economics from OU. His other degrees include a Ph.D. in organization behavior and policy from the University of Chicago; an MBA in accounting from the University of Colorado; a JD (Juris Doctor); and a CPA Certificate from the State of Illinois.
No two days are the same for Schrager. During a recent week, he spent one day developing strategies for a very large law firm’s individual practice groups, and another day helping a start-up company figure out how to fund clinical trials for a new vaccine.
Ultimately, Schrager says, strategy is an essential component to starting or running a business, and is more beneficial today than ever before in helping people make better decisions.
Since mid-2008, demand for Schrager’s consulting services has increased dramatically. “Companies of all sizes are realizing that to get through this economy, they have to have the absolute sharpest ideas possible,” he explains. “I don’t make decisions for them, but I ask them questions that help them determine if their ideas are worth pursuing.”
Three entrepreneurial essentials
Jim Schrager offers three tips for aspiring entrepreneurs that apply to any industry or economic environment:
1. Develop your idea on all levels. For example: How will you build your product? Sell it? Who’s going to buy it? How will they find out about it? What’s the competition doing?
2. Don’t develop your idea in isolation. Find other smart, interesting, experienced people and get honest feedback. “The idea will be much better,” Schrager says.
3. Find a way to test your idea without betting the farm. Ideally, try your idea on a modest scale while keeping your day job. That will give you a sense of whether your idea can go the distance.
And if anyone understands the emotional component of business, it’s Derbabian. After all, she acquired a double major in business and psychology from Michigan’s Albion College before earning a master’s degree in counseling at OU.
Derbabian applies this combination of skills as the owner of Integrity Communications in Birmingham, Mich., which she founded in 2004. Her marketing, branding and public relations practice helps companies create a strong brand, and communicate that brand using traditional and digital media and communications to foster growth.
Having worked in the industry for nearly 20 years before establishing Integrity Communications, Derbabian had plenty of experience — and plenty of ideas about how she wanted to run her company.
“I’ve always been someone who really likes to think out of the box, and I thought if I was my own boss I could come up with ideas and just fly with them,” she explains.
Derbabian uses what she calls a “virtual model,” bringing in specialists with the talent each project requires. “Whether it’s a graphic designer or Web site developer,” she says, “our clients are getting senior-level expertise.”
She leverages her counseling skills in her marketing practice, too — especially in recent months.
“At a time when so many business owners are fearful and seeking steps that lead them toward growth and success, I appreciate providing strategic and proactive marketing guidance, encouragement, and the most necessary component — hope,” Derbabian says.
This understanding of the human element of her business has contributed significantly to Derbabian’s success. And it most certainly makes her work meaningful. “Part of my goal is to help people create the life and the company they’re meant to have,” Derbabian says. “When I look back, I want to believe that I’ve been able to impact people, organizations and the world for the better.”
Leonard Magro, president, Magro International
Sometimes, timing really is everything. Before he started his own company in 2005, Leonard Magro, SECS ’01, was putting his master’s degree in electrical and computer engineering from OU to good use working in the automotive industry. But sensing the industry’s volatility, he and his wife decided it was an ideal time for Magro to start his own company: Magro International, an Internet marketing firm.
According to Magro, the company’s primary goal is to help businesses harness the Internet. “If you don’t have a comprehensive Internet marketing strategy, a Web site on its own isn’t going to do much for you,” he explains. “You need an online presence, and then you need to build traffic to that online presence and convert that traffic into customers.”
Even in a tough economy, Magro International has expanded from a home-office operation into a business with office space in downtown Rochester, Mich., and hired a third employee in 2008. Magro attributes much of the company’s success to the industry itself.
“Internet marketing is a growing field, and a lot of businesses are diverting their marketing budgets away from traditional media to the online world,” he explains. “So I think we are definitely in the right place at the right time.”
The company’s primary emphasis is on building relationships with companies that want to implement ongoing Internet marketing strategies. Magro hopes the company will continue to grow, partly by constantly evolving in step with emerging technologies, such as online video and social media.
“We work hard but we also have a lot of fun,” Magro says. “Our focus is on making the companies we serve successful — and if they’re successful, we will be, too.”