The recent boom years were good while they lasted. Making money was easy: Just strap your fortune to the overall economy, and ride the rocket to riches. And just because Alan Greenspan took the punchbowl away, that doesn't mean the party has to end for entrepreneurs.
"The opportunity for fast growth, profits and accumulation of wealth is still possible," says Nina McLemore, chair of the National Foundation for Women Business Owners and president of Regent Capital Partners LP in New York City.
However, you shouldn't expect to grow your business in overfarmed fields. Yes, some of you will still be able find venture capital, but you are the exotic breeds. If entrepreneurs want to achieve 20 to 30 percent annual growth, most of them will have to find a new way.
The old business model relied on large capital inputs to offset high fixed costs, says Elizabeth Gatewood, the Jack M. Gill chair of entrepreneurship at Indiana University, Bloomington's Kelly School of Business. "If the VC spigot is turned off," she notes, "you've got to look to a different model: lower fixed costs, higher variable costs."
If that approach sounds vaguely familiar, it's because businesses worked this way before, oh, 1995. Back to the basics is the new mantra. And one cornerstone of the old-time strategy for building a business is the alliance. But before you go pulling out your college economics textbooks for a refresher course on running a business, recognize that the Internet revolution made drastic changes in all our familiar business concepts-including the partnership.