The Austin Entrepreneur

Grad School - Update

2008-11-18T12:35:00.000-08:00

I enjoy taking on new challenges. Many times that includes personal development and growth. That can be accomplished in any number of ways. This time I decided that I would continue my education with St. Edward’s University in their Master of Business Administration program. I chose the concentration of Entrepreneurship in hopes that I can continue to increase my level of understanding in small business management and growth.

So far, the program has been rewarding. I am nearing completion of my second semester and the coursework has been very interesting. Perhaps the most challenging class I have taken so far is managerial finance. If I had to summarize the class in a single word I would label it, interesting.

I will let you know how the program develops. I was waived out of the first phase, and am two semesters into the second phase. With four semesters to go in the program, I still have quite a bit of a journey ahead of me.

Grad School

2008-05-04T21:21:00.000-07:00

Since the day I received my first car from my parents, I have been either working or competing in sports. I quickly found that if I was in control of my day to day activities at work, I could enjoy myself immensely; sometimes more than playing sports. In fact, I would turn down Football Scholarships to run a small business. Education was important to me, but it would have to take place in the evening, I had a business to run.

Over the next several years, I would hop from one college to the next, taking classes and changing majors with each new experience I had in the “real world”. Eventually I would settle at St. Edward’s University (http://www.stedwards.edu) in Austin, Texas where I would obtain an Undergraduate Degree in Business with a concentration in Entrepreneurship. Fitting.

The degree has come in handy, but in ways that most people would probably not imagine. Networking has been a big key. Due in large part to the size and atmosphere at St. Edward’s, I have been able to make many lasting and influential contacts. The actual education for me was hot and cold usually because I already had direct experience or exposure in the “real world” with the application, theory, or concept we were going over in class.

I have set out and accomplished what many people search for in small business ownership. I have helped people grow businesses into large corporations, watched dreams come true, and even seen people retire. But I have also experienced what every Entrepreneur has also seen, failure.

One of my current ventures is on the edge of really taking it to the next level. I can feel it. I can see it every day in emails, the marketplace, and even the people around me. I can feel the electricity in the air. While this excites me, I feel a need to grow myself personally. Seeking out new stimulus, new ideas, and furthering the foundation I have in practical experience, along with education theory interests me greatly. That is why I have decided to go back to St. Edward’s to get my MBS in their Entrepreneurship program. Fitting.

Currently ranked #20 in the West for Masters Granting Institutions (http://www.usnews.com/sections/rankings), St. Edward’s is a wonderfully groomed campus, ideally located, with a tenured faculty that interacts directly with the student body. The value of the MBA is obvious when you inspect a resume. However, since I plan to never interview for a “job” ever again, the degree itself is less valuable to me. The experience, the actual education, and the people I will meet along the way are the true value I seek.

Never Above, Never Again

2008-04-20T19:03:00.000-07:00

When your company’s data is critical, locating your servers and infrastructure in a collocation facility can limit liability, give you the uptime guarantee you need, and provide added value for your business. They are scattered around the country all pushing many of the same “vale adds” for your business. However, a few of them have a slight differentiator like being located in a former underground manmade cavern.

This past week I visited eCavern (http://www.ecavern.com). A collocation facility located in the city limits of Louisville Kentucky. This is unique in that the facility is both underground, and centrally located within a major metropolitan area. Louisville is a great location for collocation and hosting facilities. The city is home to several of them. Before last week, I would also say this is a relatively stable geological area until we felt an earthquake that occurred in St. Louis (http://folkworm.ceri.memphis.edu/recenteqs). This aside, the facility was met without harm.

The tour was pretty remarkable. We drove down a ramp into the former entrance of the mining facility (under a K-mart of all things) and were met by security guards who had us sign in and park our vehicle. We were them allowed entrance into the facility only after visual recognition of one of the Principles in the company. What was on the other side I was not prepared for; an office build out with more money per square foot than many office spaces I have seen.

The tour of the server facility was rather brief due to its only recent launch. They have a small client list and were very careful not to mention any names. The more entertaining part of the tour for me occurred when we piled into an electric powered industrial golf cart and drove some of the partially occupied three million square foot chamber.

Since I am not endorsing the product per say, I will not include any pricing information but I am sure it can all be found on the website. We met with the President of the company, Mark. He has a great video that can be found on the site explaining the entire product.

If you are a small business owner, and you house your own data, you are asking for problems with your clients. Find a collocation facility close to your IT personnel, and allow someone else to
manage your uptime guarantee.

Gentrification

2008-02-03T21:24:00.000-08:00

The restoration and upgrading of deteriorated urban property by middle-class or affluent people, often resulting in displacement of lower-income people.

Recently my business partner and I for Order Experts moved our office to the “Eastside” of Austin, Texas. This traditionally lower income area of town is undergoing a renaissance of sorts bringing the artistic community, new development, and retail to an area that can hardly afford to keep the streets safe. Why did we move there? It was close to downtown, and affordable.

Like all instances of gentrification, the area is mixed with recently renovated or entirely new development, with other existing buildings that range from condemned to being perfectly suitable for a family or small business. However, this mixture of middle and lower income populations rarely coexist without friction.

At my office, our frontage is all glass and faces East Cesar Chavez Street in Austin, Texas. We are greeted daily with large snot filled collections of saliva on the glass, shouts from cars ranging from “Fuck you Yuppies!” to “Die white boy”. Last week there was a new “posting” on the light pole at the intersection of our office.

Since I have employees, I had to call it in to the Police. I was met by two officers who found the situation unremarkable, but were at least impressed that they didn’t have to explain to me the local situation. I was a little surprised when I found that both Police Officers were excited about the spread of gentrification, but I guess for them the result has a direct impact on lowered crime.

As I sit in my office tomorrow, and I watch the large collection of middle and high school aged students walk by when school lets out, I will again notice that they are all wearing either black or white because their school is too worried about gang colors to allow the personal freedom of expression. I will again notice that not a single one of them is Caucasian. And I will again watch as one of them spits on the window, or throws a rock at the sign outside our office.

While I have made no points or amazing conclusions in this post, I will say this: Gentrification brings out many problems with our communities. And while the result may improve the local area, the reason is not the new buildings, or the improved services. It’s the literal change in the local population. And that is about the worst possible solution I could envision.

Beware Big Business, Big City

2007-10-14T20:52:00.000-07:00

Remember when Intel was coming to downtown Austin? How about the other large employers drawn to Austin with tax incentives such as AMD? Well some of them made it, and others… well others left us with concrete scaffolds perfect for Lapis Light (http://www.bluelapislight.org) show.

What about Computer Sciences Corporation? Well, take a look at our beloved “green” City Hall. Built partly with money from CSC, it is now flanked by two buildings that CSC never fully took over. But fear not, recently, Silicon Labs took up residency in one of the buildings. This, after Microsoft pulled the plug on another CSC building tenant, Digital Anvil. Ever wonder how all the small shops along the new 2nd street district can make it? That’s an easy one: Tax incentives. But at least there is something there, and the City leadership realized it needed to act.

Sometimes Big Business can leave a city with an eyesore that only creative minds like Lapis can do anything with. Thankfully the City has decided to erect a new building on this city block, the new Federal Courthouse. But on the other hand, sometimes Big Business can leave us with improved infrastructure like CSC did. I think a lot of this has to do with the leadership of the City, and how well they interact and negotiate with large businesses.

I wonder, now that Google has secured space in the Scarborough building at 6^th and Congress, what did the City get out of this deal? Probably nothing since they are leasing existing space. My point is… the city should be leveraging these businesses towards responsible growth for Austin. Consider, what objectives can the city achieve with the W, or with The Austonian? Large footprint developments like this can really shape a city the size of Austin.

Vacant Land and New Construction

2007-10-13T13:09:00.000-07:00

Working with a lot of investors and builders gives me ample experience in dealing with vacant land. Recently, I was discussing ways that buyers could reduce the cost of purchasing a newly constructed home with a co-worker of mine. We came up with a lot of the typical incentives that builders use to lure buyers such as: Rebates, Home Warranties, Preferred Lenders, Free Appliances, and even Golf Memberships. While all of these things are nice, if the bottom dollar is a concern for you, there is an obvious way to save money that a lot of buyers seem to miss; purchasing the land yourself.

One area where a builder makes their money is finding a plot of land to build on, cheap. I see a lot of builders spending considerable amounts of time finding that special lot. But I ask myself, why can’t a buyer do the same thing? The simple answer is they can, it’s really just a matter of knowing what to look for, and having the time do it. While it does take away some of the profit, I have found that very few builders will shy away from an opportunity to build a home for a buyer that brings their own plot of land.

There are many important considerations when buying a plot of land to build on. This is one area that a buyer does not have to worry about when using a full service home builder. For example, certain trees can be restricted and may not be able to be removed. Another problem that builders face is the flood plain. And finally, City code for set back and easements can really restrict your building potential.

Building a home can be a lot of fun, but it can easily turn into a nightmare. If there is a time you value the expected, it would be when building a home. If you are going to purchase land for the purpose of building on it make sure you do your homework, and make sure you are working with a Realtor that has done it before.

Condo Inventory in the Austin Market and Indirect City Controls

2007-09-29T10:47:00.000-07:00

One of the questions I keep hearing from a lot of my buyers is, “When will the supply exceed the demand in the downtown Austin condo market?” And the honest truth is no one is sure, or if it will. But there are a lot of factors in place that people are not considering.

Perhaps the largest hidden factor that most consumers and even lenders and realtors are not considering is the cost control that the City of Austin exhibits over developers in the downtown area. I am not talking about hard costs like concrete and steel which are also climbing, or the permitting costs, or even the hard dollars the City will ask for to use for “general improvement” but the infrastructure charges. For example, let’s say you wanted to develop a tower in the parking lot on West between 5^th and 6^th street; A great location for a new tower. The problem is, the City has already upgraded and installed new infrastructure for other approved and planned building in that area. For you to bring a new tower into the equation throws everything off. The City combats this with higher infrastructure costs. For your new tower, the cost of infrastructure such as water, waist, and power could be many times more expensive than the guy across the street that had City approval years prior.

This is an example of one inventory control that people are not taking into consideration. There are many other factors governing the Downtown Austin Condo market that I think people are missing such as the local economy, city incentives, improved safety, State Legislature Offices, and new business.

Purchasing real estate always carries a degree of risk. You have to decide for yourself if you are willing to take that risk in exchange for the actual or perceived reward. As a buyer you have to remember, caveat emptor, “let the buyer beware”.

Office Space

2007-05-18T21:13:00.000-07:00

Today, two of my business partners and I from Order Experts LLC, (http://www.orderexperts.com) looked at new office space. We are about to double the company in terms of personnel (not really that big of a deal when we are currently at 5) so we need more space. Additionally, our current office space isn’t really anything to brag about (operated by PS Business Parks: http://www.psbusinessparks.com). I have had office space in the North Lamar Austin complex for one of my businesses, or one of my associate’s businesses since 2000. Strangely, as my lease expiration approaches, my landlord has made no effort to discuss our future plans for tenancy.

My business partners and I are all about density. When I say “density”, I mean lots of people and “living spaces”. A lot of fun buzz words flying around many metro areas trying to describe the idea of living downtown. The idea isn’t anything new, but with gas prices, being able to talk to the places to want to hang out at, and the idea of walking to work all in the same place, everyone seems to be on the band wagon. This of course has created a high demand for downtown living and many changes to the Austin feel (http://www.ci.austin.tx.us/planning).

We looked at some interesting commercial spaces at the new Brazos Place development (http://www.brazosplacecondos.com) on 8^th and Brazos in the former Commodore Hotel Building (circa 1950). The pricing was pretty decent at $199/sq. ft. on the 5^th floor, but going up a floor priced at $219/sq. ft. allowed for a large improvement to the view. Here is a quick view of the Brazos Place Condos in case you refused to click on the link above:

Moving downtown is a great idea for corporate culture, but be prepared to pay for it. There is a reason that downtown city centers seem to gather bankers and lawyers; they’re the only one’s that can afford to pay for it.

Blogging

2007-03-05T18:28:00.000-08:00

I was reminded by a friend of mind who is planning on going into the deep desert on a vision quest (!), that blogging only works (by works I mean creates a “viewership”) when at the very least, is performed regularly. This of course created the urge to update my bog.

At first I started looking at what I last wrote. I soon realized why I hadn’t updated in so long was because I really didn’t want to talk about what I said I would next; that is - how to limit your tax liability and owning 1% of a corporation.

I will admit that since writing this last blog I have spent a considerable amount of time with several attorneys in rooms overlooking town lake about setting up my holding company and various shell corporations, but I don’t find myself very compelled to write on the subject any longer. Besides, as my new corporate law attorney points out… “Diagrams work much better for this sort of thing”.

So, the topic of this post will be posting itself.

You may notice that the root of this blog is hosted at www.thenewpulp.com. The idea for The New Pulp probably warrants its own business plan (and future posts Im sure), but for this post I will keep it simple. A few friends of mine and I decided that we knew enough people that could create serialized content on a regular basis. The idea - we would setup a portal to help promote various artists and their digital serialized content.

Pretty cool idea to play around with. Very hard idea to actually implement. I have found a direct relationship between people I know who are artsy and creative, and people who fail to get things going on a business level. To keep from categorizing myself in that area, Im updating. Even if the update is for update sake.

Shell Corporations - Liability

2006-09-18T14:48:00.000-07:00

It occurred to me some time ago that starting multiple businesses opened me up for something I was not interested in, liability. For every new business I start, I have to take out a new line of insurance for general liability and/or workman’s compensation coverage. Obviously this gets expensive, but it is necessary.

With each new venture, I open myself up to new risks and new rewards. I needed some way to insulate myself from the risk, and at the same time, limit my tax liability. I met with a few advisors and eventually decided to setup what only the oil industry could pioneer; shell corporations.

Let me explain the idea of a shell corporation. You and your business partner(s) want to begin a business, but you would like to protect yourself from liability should things go wrong. You begin by setting up a Partnership between your business, and a second company (usually an LLC which we will call Parent). At first, you probably think Parent will be owned by you, but it won’t be. Instead Parent will be owned 99% by another LLC (called Grandparent in our example) who will be the General Partner. Keep in mind the General Partner holds all the liability for bad decisions and what not. The other 1% will be owned by you, but you are a Limited Partner, meaning you have little to no liability.

Now let’s take a liability situation and see what happens. You start a construction business and one of your workers cuts his arm off. This is bad (obviously for the worker) because you are liable. Furthermore, you made a bad decision and didn’t carry liability insurance, and the worker is suing you for negligence. Since your construction company is in a partnership with Parent (who is the General Partner), Parent is liable. However, Parent has virtually no assets and is itself in a partnership with two other entities, Grandparent and you. Since you are a limited partner and Grandparent is the General Partner, Grandparent has to take responsibility. Grandparent takes the fall, and of course has no money. So you abolish Grandparent, and form Grandparent (2). Since you are the Limited Partner, you are safe from liability.

Obviously there are ways around this example, but it costs a lot of money to navigate the legal waters. Ethically, you have to feel bad for the guy who cut his arm off, which is why most clients will refuse to give you work unless you carry liability and workman’s comp insurance.

The moral of the story: If you are going to work for someone, make sure they have insurance (and more importantly care about their workers). And if you are the employer, take care of your people; they can be your biggest asset, or your biggest liability.

For my next post, I will talk about how you, as the 1% owner still get paid, and limit your tax liability.

-CR

Do It Yourself Mentality

2006-08-27T15:47:00.000-07:00

This weekend I was reminded why sometimes it is ok to hire someone to perform a task that you know how to perform yourself. At the same time, I see the reason why other entrepreneurs do this so rarely. It is the common life/work balance that few small business owners do well.

The business model for QCI, Castle Photography, and Order Experts is driving us to a point where more internet bandwidth was needed in our office. We decided to use AT&T (formally SBC) as our connection provider for various reasons. We have worked with them in the past and their customer service and business relationship attention I rank fairly high.

I decided that I would ignore all business responsibilities on Saturday and attend a friend of mine’s bachelor party. We had a great time. I also decided that Sunday would be my day to complete the internet project at work. The one variable I was not counting on that entered into my equation was, Im not feeling well. I don’t usually get sick, so when I don’t feel well, it annoys me. But what has more impact, is what it can do to my business.

A project that should have taken me a couple of hours to complete, took nearly six. Obviously, I could have called someone else in to do that job, but that’s just lazy; especially when I can do it myself, even if I feel bad. Here is where the small business owner differs from the corporate employee. I should have put it off, or perhaps hired someone else to do the job, but I did neither. This was a bad choice for me, but a good one for the business. That is unless working through this causes me to miss work.

I leave this story with you with a word of warning to those looking into owning their own business. If you aren’t careful, the business can own you. And don’t ever try to make personal plans without first making sure your bases are covered. A good team around you can make all the difference in the world.

The New Business Hype

2006-08-18T16:52:00.000-07:00

Starting a new business is a lot like a new relationship. Everything is new and exciting with challenges around every corner, and rewards so close you can taste them. Everything either works perfectly or falls apart immediately. Or so it seems.

One of the hardest parts about a business in the startup phase, is trying to make sense out of what is real, and what is just hype. Many businesses begin with an idea and not a lot of thought for planned execution. A developed business plan can give structure to any business, but let's face it, not many people get excited about writing a business plan, and usually they don't do it at all.

The hype comes when a challenge is overcome much quicker and easier than everyone thought possible. At this point in the game, everyone gets excited and wants to contribute ideas that they thought previously were out of the question. Quickly these ideas are put into production without any thought of fitting into the business strategically.

One of my latest startup projects, Order Experts, is in this exciting phase. We are finally working in the same office, we have employees, and my partner and I are amazed at how quickly the other can accomplish a task that they are responsible for. It's this phase in a company that I crave. Its also the time when some of the biggest mistakes are made. Instead of channeling this energy into productive and meaningful projects, its usually spent on things that have a hard time translating into a product.

Businesses where two or three partners are running a company can stay on task with a few quick meetings a week. This way, all parties know what's going on, what direction they are headed, and what the other(s) is doing. My partner and I do just that with lunch meetings. We discuss topics that need privacy, and also plan out the strategy for the coming week/month/quarter.

Order Experts is quickly developing a product and a platform. Soon, we will be adding a new partner that will help develop a technology infrastructure that will revolutionize how this industry works together. Exciting? Yes! But again, this is the time where businesses are made out of ideas, and ideas are in no short supply.

-CR

The Interns

2006-08-16T19:12:00.000-07:00

Working in a start-up environment can be challenging for many reasons. The number one reason for start-up failure is undercapitalization. That is, not enough money. Usually businesses fail not because they had the wrong idea, or even because they had poor management, but because they simply did not have enough money to push them over the hump into the black.

For this post, I will discuss another challenge small business owners face, human resources. I use that term to mean, finding the right people, or people at all. Usually when starting a business without large amounts of funding from loans or venture capital the last thing you have is enough money to pay for the right person. Or at least, enough of them. One solution to this problem that I will discuss with you tonight is internships.

I went to St. Edwards University for my undergraduate degree, and an internship was required for every business major. It is an opportunity for the student to experience business first hand. From the interview process all the way to seeing if their job will "convert" into a line on the budget.

Currently, Im running various small projects and five businesses. I have decided to give back to my University in many ways, and this time in the form of internships. Because of my connections, I was able to land a meeting with the heads of the career planning office of St. Edwards. This was a great opportunity to explain my background, and possible matches I had for the school.

The meeting went very well. It looks like I could have anywhere from 2-4 internships created for various companies Im working with for this coming fall semester. This is an excellent way for me to augment my staff with eager young minds wanting to get their feet wet professionally, and at the same time, a great way to give back to the University. A word of caution though; hiring an intern requires more work than handing them a job description. Typically it requires working with the student more than a typical employee, filling out evaluation forms for them to turn into their school, and dealing with scheduling conflicts not found in a regular employee.

I encourage every business owner to think about internships seriously. Working with young minds with new ideas and uncultured spirits is rewarding in many ways other than financially. I will post these experiences with the interns on the blog as time goes on.

Until next time...

-CR

A Welcome of Sorts

2006-08-15T21:12:00.000-07:00

With all the books about niche businesses and esoteric subjects people purchase from the shelves of Barnes and Noble Booksellers, it occurred to me that perhaps I should develop my skills as a writer in hopes that some day, you will purchase a book of my own writing.

Allow me to introduce myself. My name is Christopher Ragland, and I am a young entrepreneur in the Austin, Texas area. I have been starting businesses with people from all walks of life for the past ten years. I have had many experiences ranging from utter disaster to something resembling success. In that time I have learned a few things about people, life, and what Im looking for. I will share a lot of what is going on in my professional life with you, in hopes that you will comment, critique, develop, and challenge my decisions and actions.

For my first post, let us leave it at a moderate hello. I will thank Wylie Maercklein of Castle Photography for allowing me to use the photo you see here. I say thank him, but you see ironically, I did not ask because I am a partner in Castle Photography. This allows me some freedom when it comes to stock photography on the company website. Please check out his work. I think you will find it most interesting and unique to say the least. You can find a link to the site on my links section on the right.

I have a very broad base of interest when it comes to business, so if you have a particular topic you would like to see me discuss, please feel free to comment at any time.

-CR