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THE SEARCH BAR

What happens to baby boomers' businesses when they retire?

| 26 minutes | Media Contact: University Communications

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Summary

What are some of the most important skills for an entrepreneur to have, and what do you need to know when launching or acquiring your own business? 

Guest: Julie Messing, Director of the Isabella Bank Institute for Entrepreneurship at Central Michigan University. 

Summary 

In this episode of The Search Bar, Julie Messing, Director of the Isabella Bank Institute for Entrepreneurship at Central Michigan University, discusses the concept of entrepreneurship and the skills needed to be a successful entrepreneur. She emphasizes that entrepreneurship is a mindset and involves problem-solving and seeing opportunities. Messing also highlights the importance of soft skills, such as communication and networking, in addition to business skills. She suggests that aspiring entrepreneurs start by connecting with local resources, such as small business development centers and incubators, and attending trade shows and networking events. Messing also discusses the potential for entrepreneurship in the gig economy and the value of intrapreneurship within established companies. She encourages individuals to support entrepreneurs in their communities by attending events, shopping at local businesses, and offering mentorship or financial support. 

Transcript

Chapters 

Introduction

Julie: People ask, “Can you teach entrepreneurship?” And I was like, I can provide you the skills and if you already have the fire in the belly, I can help stoke that and help it grow. I can't give the fire to you. You have it or you don't. 

Adam: What are some of the most important skills for an entrepreneur to have, and what do you need to know when launching or acquiring your own business? Welcome to The Search Bar. I'm your host, Adam Sparkes, and on today's episode, we are talking with Julie Messing, Director of the Isabella Bank Institute for Entrepreneurship at Central Michigan University. Well, thanks for coming in today, Julie. I'm excited for you to be here. 

Julie: Well, thank you. It was my pleasure to be here. Looking forward to our conversation. 

Adam: So, I wanted to — which is becoming kind of a theme here for The Search Bar — is, kind of, level set to talk about our topic, but give our topic a definition for folks that might not be familiar. We're here today to talk about entrepreneurship, and in thinking about it, it dawned on me that it's a pretty broad term and it might be something that, depending on how you look at it professionally, some of us might be applying it inappropriately. So, I was curious what entrepreneurship is to you. 

What is entrepreneurship?

Julie: Entrepreneurship is, in my opinion, a mindset. It really starts with the way that you solve problems, the way that you see the world, really. Are you looking at things from a point of view that you can find an opportunity in something? That's being entrepreneurial, which really comes to becoming entrepreneurship. Some people will act on it and become the entrepreneur and others may not, but they can still be entrepreneurial. 

Adam: I would take that as you kind of have — it's a broad definition, right? You could be an entrepreneur or be entrepreneur… entrepreneur… — I'm going to say that wrong — entrepreneurial in a lot of different settings, right? It's not just, necessarily — I think, when I initially thought about it, I thought about it as a person who takes the principal risk, and probably the principal financial risk, in starting a business venture, if I had to write it myself. But that's not exactly it, is it? 

Julie: No, it's more than that, but that is a very common perspective. And the way that we even teach it here at CMU is we look at it from multiple journeys or multiple pathways to becoming that entrepreneur, starting with the mindset. But you can do it through starting a business like you mentioned, but you can also become an entrepreneur by buying a business, innovating within a current organization or a franchise, or it could be a social mission. 

What skills do an entrepreneur need?

Adam: So, when you talk about it being a mindset, [can you] explain, can you elaborate on that a little bit? If you had certain traits when it comes to tackling problems are starting up a new idea and pushing it forward, how does the entrepreneur do that? How do they think about those things? 

Julie: Excellent. They really have to practice and be comfortable with approaching struggles, problems, challenges as a potential opportunity. It really comes to opening those horizons, to things that you see or experience in the world. And it can come down to everyday things. It can come down to things you're doing in your kitchen. Something may be frustrating about a process or a tool that you have and you can think about a way to improve it. If I'm frustrated by this, how many other people are? 

Adam: So, it sounded like curiosity, right? 

Julie: Curiosity is huge in there. The thinking, the persistence, a sense of tenacity, being able to pick yourself back up again because a lot of ups and downs. So, when you get to the bottom part of the journey, can you help pick yourself back up? Can you elevate yourself again? 

Adam: Not just the mindset, what are the skills? Like, what are the skill sets that you hope someone who is going to have an entrepreneurial path — what do you want to see them — if they're a student here, what do they need to leave with? 

Julie: We like them to leave with a toolkit of skills and experiences. Those skills, some of them come from the business perspective of things. How do you look at things from the business or the economic side of it? What makes sense? What kind of business model? Who is your customer? But you also need, what I often call, the power skills, or some people call soft skills. What are your communication skills? How can you articulate your idea? How can you work with a customer through challenges? You want to be able to build those up as well. You want to be able to network. What can you learn from other people and what can you contribute yourself? 

Adam: Talk a little bit more about some of those soft skills and those networking skills, because that — I think, depending on what angle you come at this from, this can be disheartening or encouraging, because it depends on whether you really like to talk to people or not. But sometimes in business they say it's who you know. How do you prescribe for people to get to know them? The royal them. 

How can you build people skills and confidence?

Julie: The royal them. We offer as many opportunities as we can and we look at it as, not necessarily fail-safe, but low risk for the students. So, we surround them by people that will work with them and help them build their network, but also aren't going to necessarily judge them or make it rough if they're not up to scale yet. We want them to grow, we want them to learn, so we open up the horizons. We have an amazing alumni network, as well as others that are just purely interested in working with student entrepreneurs, that volunteer and offer their time to come in and work with students. We host events, they come in as speakers and we encourage the engagement in the classroom. We do things like fireside chats that are very casual and comfortable. We'll do evening activities like dinner, or bowling, or a mocktail cocktail hour kind of thing, and let people start to get to know each other and comfortable. They have the chance to pitch, to present in front and share their ideas. And then, when they see these people in the audience giving them really positive feedback, or really constructive ideas or criticisms, then they start building that confidence, which is one of the other skills we really need to see. And we want to see that elevate during their time here, is their self-confidence increase. 

Adam: Confidence is probably a huge one, I think. Act like you've been there even if you haven't been there. That whole thing where it's like sometimes that's half the plan, trust me. 

Julie: Right. And we talk about the imposter syndrome a lot. A lot of us feel that way and we have it, and we hear from people that felt that way into their careers. And how do they overcome that? And how that is in our heads, and we sometimes just have to step out of our own heads. 

What is the value of failure?

Adam: When you fail at something like that, how much value is there in the failure? If I had this idea, I had a business I spent two or three years on. I had a product idea or a process idea and it kind of fell apart, and I either had to walk away from it temporarily, or whatever. What's the value there? How important is that? 

Julie: Huge. Huge. And we don't give enough credit to those that fail. And so much to the point, we had a group of students, we have these Wakeling Gendron Entrepreneur Students, Scholars, and they put together a couple of events, and one of them they really wanted this year and just held was a fail panel. They brought in entrepreneurs that did nothing but talk about their fail points or ventures they've had that have failed, because there's so much to learn from that — how you overcome it and how that helps drive you for the next one. 

How do you get a new business off the ground?

Adam: Sometimes the products and the brands that pop up and surprise us, and stuff, it probably — I know, if I'm being honest with myself, I feel like a lot of it is like, it's kind of a corporate product driven by another corporate money source. So, I think, when you're somebody and you're, kind of, like, “It's just me and my partner who's starting this business up,” it probably seems insurmountable. But it doesn't, necessarily, have to be, right? You can have the success, you can find the money to get it done, or the exposure to get it out there. 

Julie: And connecting with others and being open to other alternative ways to get there. You don't have to always, if you're going to manufacture something, you don't have to own the equipment, you don't have to be the manufacturer. If you're going to need space, you don't have to own the real estate. There are ways you can get started and then scale up. 

Adam: So, I want to talk a little bit about getting your business off the ground. What advice would you give a new entrepreneur? 

Julie: Someone who's thinking about starting a business and they just have a very raw idea? I would start with some of the local resources. Many communities have things such as a small business development center, or a SCORE office, or maybe a local incubator, business incubator or coworking space. I would start connecting with those spaces, because while you are meeting people, you're building a network that way, you're also seeing the resources that are available in your community that can help you develop your idea out. It can help you, whether you're going to need to do a business plan or you're going to focus on your business model. It can help you with the steps and resources along the way. And many of those, especially those that are federally supported, like the Small Business Development Centers and SBA and SCORE, those come at no charge to the entrepreneur. You just check them out in your community. There are a plethora of those, and most communities, from rural to urban and everything in between, have a variety of resources available. And that's often a good starting point. When you're getting along the way on your venture, those resources and what you have access to can grow. You can go beyond your own region or your own home. You can reach out to local universities for support, help, ideas, resources. You can find, of course, a million of them online, you just search. But anything that you, say, Google search, you have to be careful. You're going to get the junk stuff as well as get the quality stuff. So, you have to be careful to make sure you're getting the quality resources while you're searching. So, your local libraries are a really wonderful resource. Going to any kind of demo day or pitch competition that may be in your region or within your comfort level, find out when they are. Most of them are publicized widely. Go watch them, go meet people, see what's going on. Look at both the good and the bad of pitching presentations and how your community responds. When you get ready for funding, a lot of people think, “Oh, the big VC stuff, I have to do all this.” Usually that doesn't come until a few — only high scale businesses — a few years down the road. You have a lot of levels in between. Usually it starts with yourself, what are you putting in the game just to get it started, to get going? And then the next one, we, kind of, have a friendly term for family, friends and fools or the ‘three Fs’. Those are the people that are closest to you already that may be supportive of you and want to help in one way or another. They may put skin in the game and help you as a professional resource in your business volunteering their time. They may write small checks. And it can be someone that you just happen to meet at one of these networking events and says, “Wow, I'm interested in this.” And they can very comfortably write a check for X amount to show their initial interest. And so, those oftentimes the fools, they're not quite to the level of an angel investor, but they want to be involved. They want to help. 

Adam: It's like your grandmother writing you a check for something, right? 

Julie: Exactly. 

Adam: You can trick her into it, do it. Everything you said I think is really interesting because — and I'm kind of guilty of this mindset too — but there's this idea of, like, Jeff Bezos starts Amazon in a garage and you think of somebody who's just alone and, kind of, befuddled and betwixt by this crazy idea, and they just do it and then someone magically finds it, and it's just not the case. 

Julie: No, and many of those Jeff Bezos, or others at that level, you'll hear them say that their overnight success story took them 10 years. And… 

Adam: And probably hundreds of people that they met along the way. 

Julie: Exactly. They're not the lone ranger. That's what you see out there; it looks like the lone ranger. No, it's not. You're not going to get far, and you're not going to get the street cred if you're all by yourself. You really need to build that team. Maybe it's advisors, maybe it's partners. They may not have any investment in your company, that becomes more of a personal choice, but the lone ranger's not going to get the street credibility to get the funding, because that’s one person, one point of view, one set of skills. 

How does acquisition entrepreneurship work?

Adam: I want to talk a little bit more about, you were talking about the different types of entrepreneurship, and talk about acquisition entrepreneurship. But is that the same thing as, “I took over my dad's farm,” and, “I bought a McDonald's franchise.” Are those the same category, or is it different? 

Julie: Those are two of the examples in that category, and the third one is typically a small business acquisition. We had a guest speaker in class on Monday, for example, who has an economic study, that was presented in the class, that in the state of Michigan, and it's by county, and in the total of Michigan, there's 81,000 businesses owned by folks that are of the baby boomer generation. A majority of those 81,000 have no succession plan for their business. They don't have someone there to take it over. Junior's not taking it over, Juniorette, nieces, nephews, siblings. That's ripe for entrepreneurs to go in and buy something that already exists. It has a market, it has some stability already, it has a history. They can go in and completely change it, improve it, add their own touch. 81,000 right now in the state of Michigan, and a lot of them do not have that plan. And you can look at those numbers by county, you can break it down to where you want to live. You can look at industries. It's there and it is — it’s called the tsunami, the silver tsunami because silver hair, but it’s coming. There's this big wave coming, those businesses, we don't want them in our economy to go away. 

Adam: I don't think anyone who lives in a town that has a lot of community — like we live in a town right here. We both live in the same town. There's a lot of good community businesses throughout the town and it's heartbreaking when you see a community business go out, and you don't always know why. So that's really interesting. I guess I really never thought of it from that standpoint, but to a certain extent, if you are invested in a community or want to be, there's probably a really big opportunity there because, I mean, just birth numbers alone, you only have so many kids and if they don't want to take over your family business, what are you going to do with your pet store? What are you going to do with your bakery? What going to do with your restaurant? I imagine it's those types of businesses too, right? These kinds of community services. 

Julie: And a lot of trades. My dad's the same boat, you know. 

Adam: What's your dad got? 

Julie: A trucking business and mechanics. He sold off a couple pieces of his business, but he's still holding on to one element of it, but neither my brother or I are taking it on, and so he is going to have a buyer. And, again, I wish it were different in some respects, but.... 

Adam: Yeah, but you also — if your heart's not in it, you don't want to take your dad's business and do something with it that he wouldn't be happy with either, right? 

Julie: Right, right. Right. And he's had that for a couple decades, so he wants to make sure it goes to someone that's going to continue that, and be that focused with the customers, and work with all of the farmers and drivers and everything that are his customers today. He wants to take care of them beyond his time, so I imagine there are more of them out there in that 81,000 number like my dad, that they want the business to continue and they want to turn it over to good hands. Also, from the buyer's perspective, and we share this with the students too, it opens up opportunities for you funding wise that you wouldn't have otherwise because there's a history there. You're more likely to get a loan. A lot of times the business owner will finance for you, or finance part of it, because when they buy it from you, they can afford to part of that be a debt. So if you can't necessarily go down the street to the bank and get as much money as you need, the owner themselves, the seller, may finance it for you or part of that for you, so it opens up so many more ways you can financially obtain the business. 

Adam: How do I prepare myself to take over somebody else's business? What would the first steps be? If I were, either, shopping it or I'm about to make that offer, what would you do? What would you advise someone to do? 

Julie: If you were looking at that pathway, the first thing I'd do is start to look at the different industries that interest you. There are databases of businesses available. You can start, you can just look at it from the comfort of your own home and you can dig into several details there. See what kind of whets your appetite or what kind of trends you're seeing. Another step is to go to some of the trade shows. If you know want something in the trades — like right now, things that are in plumbing and roofing and other trade-related businesses are really at the top in terms of those for sale and that need successors. So, if [you’re interested in] something like that, you may start going to some of those trade shows and you're going to just start meeting people. You want to learn about it. You want to have some level of experience, engagement, knowledge, more than what you can read, in those industries. You don't have to, by any means, be an expert to buy into it, but you still want to be able to learn so you can ask the right questions. That's way more important than what you know, is knowing what questions to ask so that you can then increase your knowledge and start talking to people. The third way is, start talking to professional advisors. Oftentimes when someone is in the position that they're going to need to sell their business or they're getting close age wise, their accountants and attorneys, maybe their insurance agents, are going to be the first to know. Not that they will ever give away confidential information, but if I am socializing with or talking with an accountant in town, I might let that accountant know that I'm on the lookout for a business. I'm looking at acquiring a small business. I'm interested in something in this field, or that serves this customer base, or maybe it's just it's located in Mount Pleasant. And that accountant may know and say, “I might have someone I can put you in touch with. Let me get back to you next week.” Then they go to their client and say, "Hey." 

Adam: "Weren't you thinking about selling that business?" 

Julie: Yeah, you mentioned you're getting to the end of your rope or time with this business and I have somebody that's looking, so if you ever want me to make that connection, I will. So deals come together like that. I had a young entrepreneur that I've met and brought in to speak at different times, and he knew, when he was finishing grad school, he wanted to buy a business, so that's what he did on all his breaks. He went to every event he could to meet people. He first wanted to go to anything that was accountants and attorneys and start putting the word out, and then areas he was interested in. He went to a couple of trade shows. Well, he wound up buying a business in packaging, something he had never had a lick of experience with. He had almost a newly minted MBA, but he did not have a lick of experience with it. But he wound up buying that business and since then has bought four more that are all related. 

Adam: They're all packaging businesses? 

Julie: Or related to it. 

Adam: Corrugated boxes everywhere for this guy. 

Julie: Yeah, and it is growing. And some are based on governmental contracts. They do everything for military. They do everything for this. So, they're all somehow related and connected, but that's been his growth strategy. He was able to start with one small business that was having a succession issue and he found out through that business owner's accountant. 

What is the relationship between entrepreneurship and the ‘gig economy’?

Adam: I'm curious, how do you see the relationship between entrepreneurship and the gig economy? Because the gig economy is this thing we hear about and it's not — you’re not starting a business; you're kind of a cog in it. But, to me, there's a little bit of on-the-job training for doing your own thing, even if you're doing DoorDash or you're doing Uber or something like that. These are huge parts of the American economy, and, I forget what I read, it's something close to 30% of people are employed in this either full-time or part-time. Do you see that being a bridge, or do you see entrepreneurship being something that can help people have more control when they're inside one of these giant gig economy things, or am I just waxing off in a weird direction on this? 

Julie: No, it's an interesting one and I think there's probably a lot of different viewpoints on that. I see it can be an entry point to people. Some people, it opens the door that they never thought they'd need. They get into it because of a different need, not an interest in being an entrepreneur, but I need to make ends meet. I need to put dinner on the table. “Oh, I have a car so I can drive, or I can make package deliveries,” and then sometimes that bug just hits. I like working for myself. I like being able to set my schedule. I like determining how I can do more. 

Adam: There's like an independence, right? 

Julie: Exactly. Then sometimes that drives it, but it's not always the reason people get into it. 

Adam: Going, "You know what? I'm kind of already doing this on my own. What else can I do on my own?" 

Julie: I think it can. Again, it can just kind of get that fire going. Sometimes people ask, “Can you teach entrepreneurship?” And I was like, I can provide you the skills, and if you already have the fire in the belly, I can help stoke that and help it grow. I can't give the fire to you. You have it or you don't. And I think that's the same thing if they go from the gig economy to being an entrepreneur in another term, another way. Is — do they have that fire already, and then being that driver or the deliverer or freelancer, does that fuel that fire even more? 

What is intrapreneurship?

Adam: The education that you might've got formally at a place, like Central Michigan University, or that you got from doing the business itself, those are transferable, right? You can become an intrapreneur. Am I saying that right? 

Julie: You sure are. 

Adam: Yeah. Tell me about that. That was my segue. It was awesome. Right? 

Julie: We need a fake clap up there, those little yellow clapping signs. Yeah, yeah. No, intrapreneur is a really fantastic way and that gives people kind of the security of working within a corporate environment. You have your health insurance; you have a weekly/biweekly paycheck. You have the resources that you're not out there scrapping for resources to develop your product or idea or to innovate it because they're already there for you. Now, you also have other barriers you have to work with. You have to work within the corporate confines. You have rules that are there that you wouldn't have if you were working more independently. But that intrapreneur is what's really driving a lot of larger companies’ success these days. It goes back probably about 10 years, or maybe more, but Ford, for example, they had a thing: “innovate or die.” When the automotive industry was having some really big challenges at our last recession, or an earlier recession, and they came through a lot better than a lot. But earlier than that, they started this whole thing, “innovate or die.” We have to innovate, not only our product, but how we're doing business. And companies that take that innovation, which is like intrapreneur, approach, can be lined up for a lot more success in longer term. All at different points in our lives, we're going to have different needs and it's going to balance out differently. I was very much in an intrapreneur role before I switched careers. I call it my second career basically. But as an intrapreneur, we have students, and we often see, and I even, kind of, recommend, look at that. When you're first getting out of school, go to work for a company, learn from them, take advantage of all the training that's available to you as a new employee, and learn how to innovate there before you're a hundred percent on your own dime. 

Adam: Then steal a ream of paper and get out of there. 

Julie: Don't forget the cool mug. 

Adam: And the mug. There'll be a mug and some sharpies, those are expensive. 

Julie: Not encouraging anything like that. 

How can you support entrepreneurs in your community?

Adam: Being an entrepreneur or being an intrapreneur, that's all good and well, but if you're listening to this and you're like, “That's not for me, but I like the idea of these people existing. I like the idea of these community businesses. I like the idea of people innovating and doing new things.” What can you do? What can you do to support these people within your community? 

Julie: Oh, that's fantastic. Some of the first things I do is look to see what their community resources are. Do you have some events and activities coming up where your entrepreneurs gather, where they may present, pitch or have a demo day? And if you don't see them outright, find those providers of them. Find your economic development groups, or your universities, or your Small Business Development Centers and see where they suggest you can step in, because they'll know the lay of the land for your area on how they can help. In our particular campus, for example, we will connect with people quite often that are interested in learning more or giving back or meeting the students. If it's close to this time of year, we always invite them to New Venture Challenge. This is the way; you can come and you can see 200 people. You'll get a scope for what we do, and then let's talk afterwards and see other ways you could be involved in support. Accelerators and incubators that support other groups of entrepreneurs do the same thing. They offer open events for people to come in and learn more. Take advantage of those. Show up. 

Adam: And spend your money. 

Julie: Spend your money. Write that check. Be part of those ‘three Fs’. Yeah, right, 

Adam: Yeah, right, or just shop there. Get your service there. Show up there, right? 

Julie: Yes. Yep, exactly. The Chambers of Commerce often host ribbon cuttings and things like that for new businesses. Those are a great way to meet newer entrepreneurs, learn more, and you'll also see the other people that are supporting them because they show up for events like that. 

Conclusion

Adam: Well, Julie, it's been a great time talking to you about entrepreneurship. I feel ready to quit today; go start another business. 

Julie: This has been fun. 

Adam: It's been a great time. 

Julie: This has been awesome. Yeah. Thank you so much. 

Adam: Thank you. I appreciate you. 

Julie: Appreciate you all. Bye-Bye. 

Adam: Thanks for stopping by The Search Bar. Make sure that you like and subscribe so that you don't have to search for another episode. 

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The views and opinions expressed in these episodes are strictly those of the host and guest speaker.