From Greg's Head

Note: Running Fridays in FromGregsHead.com, is a continuing series of tips brought to you by Greg Price. These run Saturday mornings during the BusinessMaker’s Radio Show on KPRC 950AM. Audio files can be found on the Entrepreneur's Playbook™ page of the PKF Texas website.

Effective market research is becoming increasingly important as companies look to launch products and services during an economic lull. With the costs of developing and launching a product on the rise, you want to make sure you are producing something that your target market needs or wants to buy.

Market research allows you to determine the need for your service, a product’s likelihood to sell, target demographics and geographic locations for points of purchase.

Ask yourself these questions:

• Who, if anyone, has a need for the product or service?
• How large is the customer base?
• What is the price point that will meet the needs of my business and the customer?

There are several ways to uncover the information you need.  These include:

• Online research
• Focus groups
• Surveys

One great resource in Houston is Saurage Research.  Visit their website at SaurageResearch.com. 

If you are resourceful, your market research shouldn’t be a budget buster.  The failure to adequately research your target market can be costly.  Does anyone remember “New Coke”?

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The Rice Business Plan Competition is rapidly approaching. This year’s competition will be held from April 16-18. I’m judge again this year, and I wanted to share with you the most up-to-date information I have. 

If you would like to be one of the 36 teams selected to compete in April, the deadline to submit your Intent to Compete form with your executive summary is Friday, March 6^th at 5:00pm CST.

Teams can compete in any industry including the following:

- Energy & Clean Technology

 - Sustainability

 - Social Ventures & Social Entrepreneurship

 - Life Sciences (diagnostics, medical devices, therapeutics, biotech, drug development)

 - Information Technology (including Web 2.0, software, hardware, internet, RFID, etc.)

 - Nanotechnology

 - Advanced Materials (including coatings, sensors, etc.)

 - Consumer Products

The RBPC continues to be the largest and richest business plan competition in the world! This year $800,000 will be awarded including the $350,000 grand prize. This year’s prize breakdown is below:

Competition Prizes – $800,000 in total prizes, including:
        Every team that is accepted to compete is guaranteed to win cash awards

• $125,000 Investment Grand Prize – Sponsored by The GOOSE Society of Texas
• $100,000 Life Sciences Investment Prize
        – Sponsored by Opportunity Houston^SM  and Greater Houston Partnership
• $100,000 Technology Investment Prize
        – Energy/Clean Technology, IT, Nanotechnology, and Aerospace/Aviation
        – Sponsored by Opportunity Houston^SM and Greater Houston Partnership
• $100,000 DFJ Mercury Tech Transfer Investment Prize  

Special Cash Prize Categories include:

• $20,000 Dow Sustainability Award
      - Best plan to address world challenges for affordable housing, food,
          clean water, health & safety, and alternative/sustainable energy
• $20,000 NASA Earth/Space Life Science Award
   - Best life science plan with application in earth and space
• $60,000 NASA Earth/Space Engineering Innovation Prizes – (3 - $20,000 prizes)
      - Best engineering plan with application in earth and space
• $10,000 Sheafor-Lindsay Social Venture Award
      - Best business plan for a Social Venture will win $10,000

Special Cash Prizes to the best teams in the following categories:

• $2,500 – Life Science  
• $2,500 – Medical Devices
• $2,500 – Energy
• $2,500 – Information Technology
• $2,500 – Intellectual Property
• $2,500 – Hispanic Business Plan
• $2,500 – International Team

Other Special Cash Prizes:

• $2,500 – Best Sales & Marketing Plan
• $2,500 – Best Written Business Plan
• $2,500 – Best Executive Summary

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The Houston Technology Center is celebrating its 10th Anniversary this year. There will be a celebration gala, “A Celebration of Entrepreneurs,” held on Thursday, May 14th at the InterContinental Hotel. Below is the description of the event.

“Spotlighting our Honoree, Robert C. McNair, Founder and CEO of the Houston Texans, as well as 60 of Houston's landmark entrepreneurs, this year's event will be a red carpet gala to remember. We are extremely pleased to have Javier & Lucinda Loya, Dan & Allison Parsley, and Steve & Leticia Trauber as co-chairs for the event. Joining them, as honorary co-chairs, are Michael Holthouse, Anne Mendelsohn, John Mendelsohn, Walter E. Johnson, L.E. Simmons and Matthew R. Simmons. The evening will also feature the presentation of 5 outstanding achievement awards.”

PKF Texas was one of the first sponsors of the HTC 10 years ago. Like the FastTech 50, it’s been great to see how the HTC has grown. In the past 10 years the HTC has provided feedback to well over 1,000 companies and coached more than 200 companies, helping them raise in excess of $500 million and create over 3,000 jobs.

They are supported by more than 300 corporations and organizations, Houston's leading academic institutions, Greater Houston Partnership, Texas Medical Center, NASA-Johnson Space Center and the City of Houston, HTC has become Houston’s center of technology entrepreneurship by assisting companies within several key sectors: Energy, Technology, Life Sciences, Nanotechnology, and NASA/Aerospace technologies.

Congratulations HTC!

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Note: Running Fridays in FromGregsHead.com, is a continuing series of tips brought to you by Greg Price. These run Saturday mornings during the BusinessMaker’s Radio Show on KPRC 950AM. Audio files can be found on the Entrepreneur's Playbook™ page of the PKF Texas website.

The turbulent times we face today shakes confidence, diminishes the value of financial assets, and creates uncertainty for businesses, consumers, and governments.  History however, informs us that shifts in the economic landscape also offer unique opportunities for those able to look past the near-term difficulties and seek out opportunities.   As Warren Buffet once said, “Make money by selling when people are buying, and buying when people are selling.”

Organizations can choose to retrench, or they can choose to prepare for success and leadership roles.  If they take the latter approach, returns from those hard fought battles will turn into better business processes and provide the positioning to fill new niches or those surrendered by competitors. Based upon their customer experiences Microsoft has developed a framework from which you can build for the future. This includes:

• Getting more out of your IT investments, driving efficiencies and managing costs.
• Mapping IT investments with strategic priorities.
• Replace aging systems that cannot grow when the economy recovers.
• Ensuring a strong environment of collaboration.
• Invest in business analytics to understand what the numbers are telling you.
   

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I want to thank Opportunity Houston for their excellent article about the FastTech 50 in the January/February 2009 issue of the Opportunity Houston magazine. You can check out the article here.

I am proud PKF Texas co-founded and continues to be associated with such a successful program. The growth we’ve seen, both in size of the event and threshold for entry, is phenomenal. I’m eager to see what happens this year.

Houston is still one of the best places to do business in the country. There are many opportunities here to jump on; you just have to take that leap. To quote from the article, “The Houston region has long been acknowledged as a place of ‘can-do’ attitudes and the idea climate for launching new enterprises.” I couldn’t agree more.

We’ll open the nomination process for the 2009 FastTech 50 class in June, so watch this space for more information.

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You've come to expect me to provide you with information about valuable marketplace events.

On May 22, 2009, the Houston Business Journal will honor the Houston area's outstanding CFOs as corporate financial stewards with the Best CFOs of the Year Awards.

PKF Texas along with co-sponsors Insurance Alliance, Financial Executives International, and the Houston CPA Society, would like to invite you to nominate your CFO or a friend of your firm.

To nominate your own CFO or a friend of your firm, please see the criteria below, then

• Email the nominee's name and their CEO name and contact information to LeeAnn Semmel, lasemmel@bizjournals.com. Or,
• Fill out the nomination form yourself on the Houston Business Journal website.

Nominations are due by Friday, March 12, 2009.

Nomination Criteria:

The nominee must be a chief financial officer or hold equivalent position in the greater Houston area which includes Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery, Waller, Austin and San Jacinto counties.

In order to qualify, nominees should effectively show how they act as a corporate financial steward by:

• Successfully implementing a strategic innovation plan
• Achieving profitable growth
• Creating stability in the firm
• Restoring life to an ailing firm
• Identifying and managing risks
• Being a visionary leader
• Being a team player
• Focusing on the company's strengths
• Possessing a strong philanthropic mentality
   

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Note: Running Fridays in FromGregsHead.com, is a continuing series of tips brought to you by Greg Price. These run Saturday mornings during the BusinessMaker’s Radio Show on KPRC 950AM. Audio files can be found on the Entrepreneur's Playbook™ page of the PKF Texas website.

The Computing Technology Industry Association reports that the demand for mobility in the workplace combined with the downturn in the economy has led to many companies developing, or enhancing their telecommuting policies.

Telecommuting offers employers the chance to save money as well as recruit from a geographically diverse—and potentially cheaper—talent pool. With fewer people in an office environment, companies can occupy a smaller space, saving money on expenses like rent, utilities, and furniture.

When developing a telecommuting policy, the first thing you need to do is clearly define job duties that can be accomplished remotely and emphasize the results you as a manager/owner need to see. It's important to clearly communicate a well-organized concept of tasks and target deadlines and their interdependencies.

Provide your telecommuters with the tools they need, such as lap-tops, software, printers, internet connectivity, and a portal to connect to your internal network.

The key to telecommuting is trusting your people. How can you hold people responsible and accountable to you and your organization if you can't trust them?

With telecommuting, a reasonable amount of face-to-face time should still be required. Quarterly meetings tend to be the norm. 

If you get telecommuting right, you'll have a crew of independent team members who get their jobs done efficiently and produce results to improve your bottom line.

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I’ve been fairly consistent in my praise of Google’s many innovations, but I just have to question their Street View and Latitude programs.

The Street View feature of Google maps allows the user to see an address as it looks from the street.  I don’t see the point of having residential neighborhoods as a part of the Street View function.  A couple from Pittsburgh actually sued Google over photographs of their house and several other buildings on their property.  This article from Brian Cooper on IT Business Net discusses the lawsuit and Google’s response. 

What it boils down to is if you don’t want your house shown as part of the Street View you have to click the Report A Concern when viewing the picture of your house.  You can then indicate you have privacy concerns.

Last week, Google launched new software, Google Latitude which allows users to share their location with others using their cell phones as the locator.  You have to sign up for this service, but I can still see issues with it.  How important is for someone to know exactly where you are at a given time?    I just don’t see the need for this type of application.  Though Google addresses some of the privacy concerns it still feels too Big Brother-ish.

What do you think about these types of applications?  Are we simply moving to a society where privacy isn’t paramount?  Will you be removing your house from Google’s Street View?
 

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I attended the standing room only Technology Champions meeting at the Houston Technology Center last week and thought it was an excellent event.

The keynote was Jim “Mattress Mack” McIngvale.  He was as energetic as one would expect from his Gallery Furniture television and radio commercials.  He had a very positive attitude about the economic uncertainty.  He reminded everyone that tough times don’t last, but tough people do.  Even with the state of the economy right now, it’s not as bad as it was in 1983.  One of the most important pieces of advice he gave was that entrepreneurs should try not to use debt to finance growth.  You’ll come out ahead in the long run.

Other items of note from the meeting include an update from Michael Holthouse about Lemonade Day.  The 2008 event saw over 1.2 million glasses of lemonade served, over $1 million raised and about $250,000 was donated back to several Houston charities.

John Beddow gave an update about Celebrate! Enterprise, which this year is being held from May 20-22, 2009.  Look for more information from me in the coming weeks as PKF Texas is very involved.
 

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Note: Running Fridays in FromGregsHead.com, is a continuing series of tips brought to you by Greg Price. These run Saturday mornings during the BusinessMaker’s Radio Show on KPRC 950AM. Audio files can be found on the Entrepreneur's Playbook™ page of the PKF Texas website.

Many successful businesses like Disney, Proctor & Gamble and Texas based law firm, Phillips & Reiter, were all started during a lull in the economy.  Recently traditional methods of financing have become more difficult to obtain, however, there are still options to consider, most notably angel investors. 

Angel investors are high net-worth individuals who invest in entrepreneurial companies, usually at an early stage.

Rather than pulling back in the downturn, angel investors are adapting to it. By following more disciplined-than-usual investment strategies and spreading deals amongst multiple angels, they are often able to get more value for their money.

The cost of starting many types of companies is getting lower. Ventures firms have reduced their seed and early-stage investment, and the tough economic climate is pushing valuations down.

For those looking for angel investors in Houston and Texas, The Houston Angel Network is a great resource.  It is a non-profit organization that provides its members a forum in which to efficiently evaluate promising early-stage investment opportunities. Its membership consists of active and SEC-accredited angel investors who share the goal of making informed, collaborative investments in promising early stage Texas-based companies. 

Visit their website HoustonAngelNetwork.org for more information.

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I mentioned it briefly in the PKF Texas – The Entrepreneur’s Playbook™ last week, but it seems like everywhere I turn, there’s another story about cloud computing.  It’s not a new concept, but with companies like Google, Amazon and Salesforce.com leading the charge, it’s becoming increasingly hard to ignore.

Below are several articles I’ve read recently from Inc.com and InformationWeek that debate the pros and cons of cloud computing.

• Keep Your Head in the Cloud
• Technology: When the Forecast Calls for Clouds
• 10 Cloud Computing Predictions
• Remaking Microsoft: Go All-In In the cloud

I really like the 10 Cloud Computing Predictions article.  It provides insight into where cloud computing is going, and what you should keep an eye out for if you’re looking to make the jump.  The biggest concern all of the articles point out is data security.  That’s something that IT departments need to look at closely when choosing a cloud service provider.  Are there enough checks and safe guards in place to ensure your data is not compromised.

Does your business use cloud computing?  How have you protected your data?  Do you have any best practices for those looking to use cloud computing?

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A couple of weeks ago, PKF Texas hosted a luncheon honoring this year’s FastTech 50 Enterprise Champion finalists.  The discussions we had at that lunch were quite interesting and insightful.  I thank all of those who attended.

There seem to be three different perspectives on the economy in Houston and how their businesses have been and will be affected.

1. Changes are coming
2. Changes may come
3. It’s business as usual

This was somewhat surprising to me, as I would have thought that there wouldn’t be a “business as usual” mindset.  With all the upheaval in our national economy and the price of oil being down, I would have thought most businesses in Houston would fall into the first two categories.

In general our group of honorees seems upbeat and are cautiously optimistic about the next year.  As business owner/operators the key to getting the economy back on track was keeping their employees gainfully employed working on clients/projects/products.

What are your feelings?  Do you have observations about the Houston economy from your perspective?

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