What comes to mind when you hear the word “entrepreneur”? Many people think an entrepreneur is someone who has a start-up business based on some new technology or innovation that is going to be the next big thing. Miriam Webster defines it as, “one who organizes, manages, and assumes the risk of a business or enterprise.”
State and city governments are falling all over themselves, and sometimes in misdirected ways, to attract entrepreneurs because of the jobs they create and the economic growth they spur. But we are missing a lot of opportunities to foster entrepreneurship (and reap its economic benefits), and it’s partly because “entrepreneur” has become a buzzword whose real definition seems to have gotten lost.
Now, I’m about to say something that many presently reject: entrepreneurship is not just about starting new companies, or about new technologies or concepts nobody’s ever heard before. It also means transforming an ordinary business into an extraordinary business.
Daniel Eisenberg, founder of the Babson Entrepreneurial Ecosystem Project, echoes that thought in this Inc. magazine article by Adam Vaccaro. He says, “What I’m trying to get back is what entrepreneurship really means: doing something that is out of the ordinary in terms of value creation.”
Entrepreneurs are about creating value. It can be in an established, unglamorous industry which people never give a second thought, but when an entrepreneur grows a company from ten jobs to 500 over a period of a few years, he has created real value.
Now, if a new company moved in and created that many jobs, there would be a press release, a big public ceremony, and photos of grinning politicians with silver-plated shovels in all the papers. In my view, there are hundreds of opportunities to help local entrepreneurs create businesses like that in every state, but we miss those opportunities.
Entrepreneurs I know and work with are (for the most part) not startup companies. They don’t have headline-making ideas, they are not app-inventors, or private-equity stars. But they are creating value. Some have been in business five years, others 65 years. They may be second or third generation family firms, or two or three people who have been partners for a while, or a business that may have been acquired from a retiring baby-boomer. They may be in a big city, a small town, or a rural area.
Regardless of who and where they are, they have big ideas and are willing to build a real business that employs people. And there are thousands of others just like them across the state that have no hope of receiving a fraction of the substantial help that is gleefully doled out to out-of-state companies considering relocation. Yet we spend hundreds of thousands of dollars to entice a single new company to locate in our city/state with little guarantee of a return on that investment.
I’m not saying we shouldn’t work to attract new industry, but what if we dedicated some of our resources to encouraging and fostering entrepreneurship – the creation of extraordinary value – in companies that are already here? Just taking ten existing “small” businesses and helping them grow could create hundreds, or even thousands of jobs.
Thankfully, Governor Bentley has seen the need and recently called for the development of State incentives for existing businesses, especially when it will keep a company from leaving the State. That’s would be a great start, but we need more than that. We need incentives that would provide the kind of assistance the City of Tuscaloosa gave an existing local company last year: the City’s help with a $14.6 million expansion resulted in 85 new jobs and prevented ZF Industries from losing a Mercedes contract to a competitor in another state.
If you agree, I encourage you to join me in writing your legislators. If you don’t know who yours are, you can find them here. Ask them to help us reclaim the true meaning of entrepreneurship and start directing energy and dollars toward helping existing Alabama entrepreneurs become world class competitors.