Category Archives: Start-Ups

Great Blog Tools for Beginning or Advanced Internet Entrepreneurs

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I attended a fun opening meeting for a blog incubator group called, Incublogger. It was a lot of fun to meet energetic and excited internet entrepreneurs. I really enjoy being surrounded by talented, ambitious and community minded people.

In addition to learning about the basics of how to blog, there were some very helpful hints for more advanced bloggers. I would certainly recommend that beginning or advanced bloggers, or just readers interested in blogging should check it out.

One of the fun tools they discussed was Blog Desk. It is a free and fun tool to improve your website and simplify some of the more difficult aspects of design and content setting.  (like inserting this image :) )

Mortgage and Real Estate Entrepreneurship…

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A friend recently asked me to evaluate an interesting Utah Business Opportunity. Like many proclaimed self employment opportunities in Utah, this business is perhaps a little vague at first glance, offers incredible returns, but requires that you sign up and speak with a representative to get more information.

Although it is difficult to really see the entire model from the website, my initial research leads me to understand that this is a multi-level marketing company that sells a promotion package to refinance mortgages my making minimum payments and investing the remainder in their sales packages. It should be noted that I have signed up for their online seminar, but until I get cleared/contacted for the link, this review needs a follow-up…

Anyone who knows me, also understands that I will defend multi-level-marketing as a legitimate, if not more specifically, an effective form of marketing sales and distribution. There are however some basic economics of this utah mortgage business opportunity which a person should be made aware of when making decisions about his or her involvement.

From an economic stand point of this business opportunity a few key indicators should be noted:

First the upside: Mortgages are pre-assigned money and offer big marginal returns for Distributors. Just about everyone has a mortgage. These people are all making scheduled payments on their mortgages. The money is already cut out of their checks budgets and this means that a single sale or sign-up can make a significant difference in your bottom line.

Now some downside: Low barriers to entry in a very regulated industry. Finance can be complicated and involve a large percentage of an individual or family income. I this circumstance low barriers to entry may not be a good thing. This means means fierce competition from relatively inexperienced distributors and significant potential for unprofessionalism. A business that says, no experience required, anyone can do it, means most often that people without experience can and will get involved. This can lead to people skewing the information they recieved to assist in closing a sale. In terms of a basic product and product information that can sell itself this is generally not an issue, family and friends cant get too angry if they don’t lose the desired weight or their hair doesn’t grow back–however, when dealing with something that can be as complicated as home mortgages and investment financing, regulation, professionalism and transparancy are a must. Low barriers to entry should raise some red flags to the consumer themself.

Futureopp is certainly not the first company to undertake something of this nature. Another similar model, may be found in the World Financial Group or WFG. They also “empower people from all walks of life” to purchase and invest in financial management tools.

So there you have it, but really check it out yourself and let me know what you think.

Mormons and Business… An Arrington Perspective for Development?

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Utah is popular for a number of different things: The Utah Jazz, (the almost-made-it team of the NBA), The hosting of the Winter Olympics,Skiing, astronomic bankruptcy and of course, Mormons.

Now whether you are starting a business or keeping one running in Utah, it can be helpful to remember the depth of the culture you are dealing with.

Although Utah’s economy is now very strong, it has certainly not always been the case and actually has gone through a number of very interesting evolutions to become what it is today. Moreover it serves as a model that that can demonstrate the building of an impoverished economy.

In a book written by David Arrington, entitled, The Great Basin Kingdom, the economic history of early mormon settlers is reviewed. Faiths or bias aside it is an extremely interesting, (although very dense) read.

Below is a paper I once wrote as a review of this book. Feel free to skim it or read it in depth.

Great Basin Kingdom
An Economic History of the Latter-day Saints
By Leonard J. Arrington
________________________________________

INTRODUCTION
The factors of cultural and social development are among some of the more complicated and controversial topics found in present day sociology and economics. Although when discussing social and economic development our minds may instantly turn to Africa, South America or East Asia, we often overlook the incredible, “Mormon Miracle” which took place right, (and arguably is still taking place), right here in the Great Basin Valley. The development of formidable deserts among a destitute people could be considered one of the greatest development stories of all times.

In the book, Great Basin Kingdom, Leonard J. Arrington explores the development of the Great Basin Valley from 1830 – 1900. By reviewing the religious, social, political and environmental factors of the day, Arrington identifies what he feels are the key principles to the success of the Mormon Pioneers. Quite different from the general growth found in the Harrod Domar model discussed in class, it is clear to see that although increased investment and capital definitely play a role in the development of an economy, their role is only secondary to the great importance of the elusive passion and desire which fuel success: more along the lines of the “mo-jo” or Total Factor Productivity as identified by my economics professor, Professor Frank McIntyre.

DESIGN OF THE KINGDOM
The Mormon perspective the Kingdom of God was spiritual and literal. Indeed Arrington identified that Mormons saw the spiritual and temporal as being a nearly inseparable distinction. The Kingdom of God was to be resurrected on the Earth and it would need the hearts, mind and logistical infrastructure to support it.

Incentives of The Kingdom. Economics is based on the trade off of incentives and the Mormon theology, though peculiar, was no exception. Mormon theology was deeply engrained with the concept of unity and mutual wealth. To be saved and gain eternal happiness, was only possible through service and selfless development of ones families and other brethren. By stressing the long term, indeed post life perspective, the incentive of eternal happiness was extremely great and strong enough to endure the hardships of today for something greater in the next life.

Economic Programs of The Kingdom. A considerable amount of revelation received through Joseph Smith and Brigham young had directly to do with the economic development and programs of the saints. These were originally established to encourage self-dependence, equality and prosperity among Mormon believers.

From an economic standpoint, the different institutions and programs could be considered savings or investment and institutions for stability and distribution of capital. Although not all of these programs could be considered successful, it can be seen and inferred by the large number of them that the development of the Great Basin Area was a dynamic process that ran with those things that worked and if something failed they quickly adapted to revise or throw it out. A few of the different programs and institutions integral to the economic logistics of The Kingdom include the following:
• The Law of Consecration/ United Order: All things are the Lord’s and were consecrated to the building up of his Kingdom.
• The Law of Tithing: One Tenth of all the “increase” received by believers was to be donated back to the Church for the building up of the kingdom. This was done “in kind”, manual labor or by cash. (p. 18, 138)
• The United Order of Enoch: One of several variations of the United Order that encouraged trade and industrial development among members but condemned trade and development with non-members. (p. 321-322)
• Perpetual Emigration Fund: A Fund developed for the transportation of immigrant members to join with the saints. Expenses were expected to be paid back when the newly arrived saints could repay. (p. 77-79)
• Public Works: A program set up to develop the city and give work to the huge influx of migrant members. (p. 154-155)
• The School of The Prophets: An education program and school established for members of the priesthood to be trained and work together. (p. 245, 251)
• The Council of Fifty: An institution influential of members and nonmembers that worked together to shape policy and petitions for the development of the church. It was a predecessor to the school of the prophets. (p. 31, 245)
• Development and Settlement Programs: Saints were called on missions to develop different geographical areas and industries. Primarily in the agricultural sector although it did increase to include other avenues.
• The Relief Society: An institution to organize the labor and skills of women. This Society provided a system of support for needy members as well as a means to develop industry especially in silk and textiles. (p. 31, 254)
• A Deseret Banking and Fiscal Policy: Promissory notes, coins, tithing notes and in kind trade credit were among the different policies instituted among members to establish a self-sufficient economy. (191-192)
• Church Bonds and Quasi-Business Ventures: The Church as an extensive trust was able to fund a number of different business ventures and establish and sell church bonds for funding of those industrial and agricultural undertakings.

THREATS TO THE KINGDOM
Although the church had a number of different effective programs for capital, investment and institutional guarantees, there were a number of different factors that could not be controlled. These external factors threatened and hurt the development of church programs thus preventing them from being successful in the economic growth and stability.

Environmental threats. The Great Basin Area was a very harsh and undeveloped region. Terrible droughts and location near cricket breeding grounds made agricultural developments very difficult. Many important crop harvests were nearly obliterated due to these harsh conditions. (p. 49-50, 151-156) Powerful floods and other extreme climate conditions made many mining and horticultural undertakings difficult as well

Social threats. Angry non-mormons would try to undo what they could of the Mormon Kingdom by introducing different commercial or entertainment aspects into The Kingdom. Many people were confident that the introduction of the Railroad through Utah would actually end up flooding the Mormon Kingdom with so much outside influence that the Mormon incentives for unity, hard work and sacrifice would dissolve. In addition to the growing number of unhappy capitalists who could not compete with the growing monopoly of the Church, there was a great anti-polygamy sentiment that was growing among the neighbors in the territory and created powerful incentive for anti-Mormons to band together to eliminate the Mormon question.

Political threats. The Utah war definitely raised people’s awareness of the Mormons and just how far they were willing to go to defend their beliefs. A number of different political policies were put into play to address what was perceived as the growing Mormon threat: (p. 349-350)
• The Wade Bill
• The Cullom Bill
• The Ashley Bill
• The Poland Act
• The Edmunds Tucker Act

The final and most deadly act, the Edmunds Tucker Act, essentially gave the United States power to dismantle the expressed financial and some religious, (cohabitional) institutions that were sanctioned by the church. Cash, credit and capital were ravaged by the church and many leaders went to prison or hiding during this political pressure.

THE KINGDOM ADAPTS
Through the development of The Kingdom, The Church had failed in many different ventures and policies, only to adapt and develop stronger or more appropriate policies. The bounce back from the set backs of the Edmunds Tucker act and subsequent hardships were no exception to this characteristic.

Religious policies were changed to no longer sanction polygamy, thus alleviating a large amount of the social and political pressure on their organization. Without the existing trusts and financial protection of the church, members were encouraged to learn and work together with “gentiles” in different educational, political and business ventures. Many business ventures were sold off or dissolved and energies and stress on the literal logistics and building of The Kingdom were transferred to more spiritual and doctrinal unity and realization.

Although a completely different development than other parts of the territory up until that point, (meaning not a free market or capitalistic development), Utah did make the transition, (slowly but surely) similarly to that of its western neighbors.

Dissolved of much of its financial interests, The Church still remained a financial powerhouse and out of debt since 1900, growing to become one of the largest private supporters of social relief, humanitarian relief and welfare training in the world today.

THE MODELS OF THE KINGDOM
There is no question that the development of The Great Basin is one of the more significant success stories in American History; but why? What is it that made it so successful? By exploring a few of the different development models we have discussed in class, we can attempt identify the unique variable to this success.

Harrod Domar: In the terms of building The Kingdom, there are number of different fallacies in trying to apply this model. This model has no diminishing returns, and gives a tremendous amount of weight to the growth population and depreciation. There are only so many saints that can be working or on involved in one or more projects at one time. Even though there was a pretty constant flow of saints and capital investment, there was not an equal enough distribution for constant return to scale. Also the population growth rates in the Mormon community was extremely high and the depreciation rates were also extremely high, (when taking famine and things into consideration), and yet the growth rates for The Kingdom certainly did not respond according to the Harrod Domar model.

Solow: Although this model does take into consideration diminishing returns, there are still some fallacies in the response of The Kingdom economy to this model. In the long run, the growth rates of an economy based on the Solow model are zero, and yet clearly the economy responded with even more endogenous variables and even with basic agricultural technologies Mormons were continuing to increase their settlements and standards of living. In addition, this model does not recognize the importance of the level of capabilities of the population and labor.

Human Capital: Investment in human capital was undoubtedly important for Mormons and the development of The Kingdom. Various forms of training through the Relief Society, the Public Works projects, The School of the Prophets and more, increased the skills and abilities of Kingdom Members. Unfortunately, this model does not necessarily identify what it was that held the society together during all of the environmental, social and political conflicts of the time.

Total Factor Productivity (TFP): Initially introduced as a measure of technical progress, TFP could in a sense, be considered as the explainable variable for the unexplainable success or failure of a given model. This “technical progress” could as easily be substituted for progress in “ideology”, “gumption” or “mo-jo”, as one of my college economics professors once referred to it. It is this variable which, in the face of destructive environments, oppressive external forces, failed institutions, high growth rates and gross depreciation, still allowed the development of the Great Basin Kingdom to realize its success. Mormon “mo-jo” becomes the most important variable in the growth function of the Great Basin Kingdom and the deciding factor in its success. A change in that variable (as expressed by the members forsaking their memberships, failing to pay tithing or continue their charitable and communal ways) would undoubtedly have created the biggest difference in Mormon development.

CONCLUSION
Although the factors of social and economic development among The Great Basin Kingdom were extremely complicated and often controversial it turned out to become one of the greatest development success stories in modern history. In the book Great Basin Kingdom, Leonard J. Arrington explores this development and the policies and obstacles that early Mormon founders faced. Unique from normal development models, the greatest reasons for success of this model was identified as being the ideology or of the Mormon people and their unified quest to build the literal and spiritual Kingdom of God. (With plenty of hiccups along way).

This book has given me a deeper perspective of the Mormon economic structure and the development of the Salt Lake Valley. It serves as an interesting model to study and follow for development and fight against global poverty.

It is a book that would be helpful to read before any business start-up, non-profit, for-profit or social venture.

Simplifile Your County Documents

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I have a little sister who works for company that scans and digitizes legal documents. It is a fun little company that requires some initial contracts and some consistent employees, but appears nonetheless to be a relatively low maintenance company. I think that to own a company that only requires management 5 days a week from 9-5 would be really fun.

Intrigued by the idea, I did a little research and threw the idea around with a number of different mentors. Really, the physical space and cost of labor to store, sort and retrieve physical documents can be astounding. As policy and regulations grow in a myriad of industries, so does the need to record, sort and retrieve documents.

Aaron Brown, a quality control specialist, mentioned to me that the sheer amount of work it takes to map out and track work flow management alone is astounding. And often very problematic for businesses. This ofcourse means it can be very expensive to customize into your system. Effective is good, but simple and efficient is better.

I was pleased to find a company online that seems to address, (although in a very specific niche) the need for a simple and cost effective method to electronically backup hard copy documents and expedite and track the often maticulous process of work-flow management.

The company is Simplifile. Their niche is county recording. They offer an electronic filing service for counties, attorneys and people who do titles/deeds/property records. I’m sure it could apply to just about any industry that requires electronic document recording. (Although I think it would be a stretch to apply it in an accounting/financial records setting.)

As long as a company is already fulfilling the need, I can’t see myself trying to pioneer one myself. Probably better just to use their services. Here a link to their new website, (in case anyone is interested) and a couple of articles that tell more about ‘em.

Positive or negative experiences with their services would be helpful.

Thanks!

Three Magic Words

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I was reading a post by a revered entrepreneur Rich Christiansen about Les Miserables and how Javert could not let go of his frustrations and need to chase Jean ValJean. His words reminded me of something that a very wise mentor once shared with me before I got married:

“Remember those three simple words and most things that bother you in marriage will make much more sense. … ‘It doesn’t matter’”

This of course is not encouraging apathy but rather suggests a prioratizing of what really matters in life.

A little thought that could also apply to Richard’s simple four words,Give it up already!

This rule applies in start-ups, interpersonal or partnership relationships and of course the daily grind of operations management.

Call for Social Entrepreneurs Plans

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I have always been fascinated by business models which successfully integrate profitable business practices that measurably improve society.

Worldwide Book Drive doesn’t quite fit the criteria for this socially responsible business plan competition primarily because we don’t have any graduate students on the team. It is of course a minor technicality which could certainly be remedied, but not realistically before the deadline in less than 24 hours. .. That is… At least the cost doesn’t outweigh the benefit at this point.

I’m interested to see how things turn out with the Global Social Venture Competition. Should be fun to see who wins…

THE NATURE AND BRIEF HISTORY OF MULTILEVEL MARKETING

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Although multi-level-marketing or MLM often carries a negative connotation, it cannnot be ignored as a significant and legitimate form of marketing in the US and global economy.

What is Multi-Level-Marketing or MLM?

Multilevel marketing is a form of direct marketing where the wholesale and distribution of a product are done by participants in the same marketing plan. The participants in the plan in turn earn their money by recruiting additional participants and supplying the same products to those participants (Canada Competition Bureau, 2003, par. 4). Because firms pay very little to market the product until after a participating distributor has already sold the product, this form of marketing requires relatively little overhead investment for marketing costs, and has proven to be a very effective method of rapid market penetration.

Multilevel marketing originated in the United States in the early 1940s with the introduction of a nutritional supplement company called Nutrilite. The practice of commissions and referral matrices quickly helped Nutrilite products to become successful in the national marketplace, reaching monthly sales revenues of more than US$500,000. Despite such successful sales, problems within their manufacturing and marketing infrastructure significantly hindered the company’s performance (Acidics, 2003, par. 3-6). In 1959 two of Nutrilite’s top distributors, Rich DeVos and Jay Van, established their own multilevel company, the American Way Association, later namedAmway. Often referred to as “direct sales” (Amway, 2003, par. 7), Amway’s model has since been imitated by thousands of companies worldwide, with varying results. Today, approximately 34 million people are engaged in Amway-type direct selling worldwide. The industry has grown into an estimated US$82 billion (Amway, 2003, par. 7).

Multilevel Marketing Perspective

MLM payout and recruitment structures have often been associated with pyramid schemes. A pyramid scheme is an investment scam, “in which the money from later investors is used to pay earlier investors” (Investorwords.com, 2003, p. 1). These scams inevitably collapse due to the exponential increase of investors necessary for each stage of growth.

Although an age-old scheme, this concept was brought to the attention of the American public in the summer of 1920 with the introduction of the “Ponzi Scheme” (Knutson, 1996). Charles Ponzi, an Italian immigrant, recognized that countries whose monetary value was damaged because of World War I had issued postal coupons that could be redeemed in the United States for a much higher value. Charles Ponzi promised a 50% return on investments in only 45 days and investments flooded in. Stamp exchange regulations quickly changed in late summer of 1920, and many investors demanded an instant return on their investments. Charles Ponzi used the money of other investors, without interest, to pay the dividends on earlier investors. On July 24, 1920, Ponzi’s scheme collapsed, he was arrested, his partners were ruined and investors were swindled (Knutson, 1996, par. 59). For this and a number of other reasons, the public perspective of MLM companies has generally been negative (Direct Selling Association, 1997, p. )

It is true that many MLM companies offer commissions and rewards for successful recruiting of additional distributors. This does not, however, indicate that an MLM is necessarily a pyramid scheme. Legitimate MLM companies will provide commission on sales and provide distributors with the opportunity to sell products and receive retail profits.

Starting Your Small Business

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I hear a lot of the statement, “John, I have this great idea…” The simple truth is there are billions of great ideas out there, but the person that makes it happen is truly unique.

Listed below is a basic frame-work I developed to teach an introductory class to help people without prior business experience understand more about about their small business idea and how to make it a reality. (There are a myriad of resources available for people who wish to learn more… More will be forth coming)

Starting Your Small Business

What is your Business? Identify just what it is that your business accomplishes. For example, if Juanita sells beef tacos, she can look at her business and say, “I sell beef tacos.” Or, she can look at her business and say, “I sell quality food services”. The first statement is somewhat restrictive where the second allows the flexibility for Jane to adapt and make the most money from her venture.

Getting a mission statement. What is the ultimate goal of your business? This mission statement helps everyone involved gain a better understanding of just what it is you wanted to accomplish. It is important that the mission statement provides focus and flexibility. Jennifer should not limit her mission statement to, “Jennifer’s Taco shop wants to sell a lot of tacos”. Rather it should be more specific it outlining her ultimate goal as succinctly as possible. “Jennifer’s Taco shop works to ensure that everyone one in Chicago enjoys Jennifer’s quality beef tacos and unbeatable customer service”.

Basic marketing elements. There are four very important elements to marketing your business, and a few questions to evaluate them.

• Product– What is my product? How is my product different from what other people can offer? What can I do to make my product better? What can I do to make my product more cost efficient?

• Promotion– How do my customers here about my product? What is the most effective way for people to hear about my product and services? What can I do to integrate that into the promotion of my product?

• Price– What is my cost of goods? What is the cost of operation? How much do I charge my customer? What are they willing to pay? What incentives do I offer to buy more product?

• Distribution– How do people get my product? Does the location of the sales of my goods meet with the demand?

Organization:
• Financial: maintain books that show the cash flow in your business. The more detailed you keep the records, the more information you will have to develop your business in the future.

• Tasks: Outline the responsibilities of your business in as much detail as possible. This is important to not only help you be organized, but to also provide the structure by which you can expand or lighten your work load in the future.

• Inventory: Make sure that you keep running count of your inventory. If the amount in your inventory doesn’t match the amount it shows you have in the books, for more or for less, do what you can to figure out what happened.

Remember what you’re doing and why you’re doing it! Your business provides incredible opportunity to learn and grow! Work to have your business work with education and family development, to provide even greater opportunity and freedom in the future.

Save as much money as you can and avoid spending money on things that do not provide benefit for the business or family. (ie. Tobacco, alcohol, entertainment magazines etc.)

Time is money. Do not waste time. Look for opportunities to further your education. Read books, watch videos and listen to audio cds that teach good business principles. Avoid watching television or movies that do not promote family unity, education or good financial practices, (this includes novellas).

A Few Good Men

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Today was phenomenal. I had the opportunity to go with my friend and business associate David Kasteler (an amazing person himself) to meet with some of the most incredible men I have had the privelage to have known. Dan Mabey, Ken Dehyle and Kelly Sheppard. Each of these men are accomplished entrepreneurs and builders of men. After talking with each of them, it was confirmed to me that consistency and work towards a well defined goal is one of the greatest keys to happiness.

I recently had the opportunity to take a little company tour at Sewell Direct with their new President and COO, Preston Wily. Now they are the 4th fastest growing company in Utah –remarkable. I first met Preston years ago, when he was still just an entry level marketer at Sewell. I had always been impressed by his ability to recognize opportunity. Through consistent performance, Preston (and his fellow marketer Dan Caffee) guided and developed Sewell to become what it is today… And what it will soon become. It was no golden ticket for Preston–but consistent learning and work.

All of these individuals have different aspects which I hope to integrate into my own character and understanding. I appreciate their examples and look forward to learning from them in the future.

Worldwide Press Release

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Okay, so maybe 22,000 papers at BYU isn’t much in the global scheme of Worldwide Book Drive, but it was a good and informational article.

It was exciting to see an article put together after the issuing of a little press release. I think we have a pretty simple formula for press releases, but I would love to compare it with some others. I’ve always wanted to find a format for a good press release, but I haven’t seen one before… anyone suggestions?

As a quick side note… I just got back from 10 days in Peru with a very impressive non-profit organization, Eagle Condor Humanitarian. Thanks to an excellent management team, (Jaron Brown) all of the businesses are in tact and life is still clipping along.