What Now?
Have the days of making it on your own come and gone? A new breed of partnership may be the way of the future.
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.
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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.
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