BYU NewsNet - More BYU students opt to become business entrepreneurs

With the unemployment rate climbing, GM being sold to the Federal Government and foreign investors buying up U.S. firms like a fast-paced Monopoly game, students may wonder where their future careers are headed when they graduate.

Fortunately, for many BYU-student entrepreneurs, such concerns may be irrelevant.

“To an entrepreneur, the [current] economy may be the perfect timing for a new venture,” said Bill Price, executive director of the Center for Entrepreneurship and Technology in the Marriott School. “People who want to control their destinies become entrepreneurs,” he said.

Entrepreneurs are motivated individuals who create small business ventures with big aspirations. According to the Oxford English dictionary, entrepreneur means “a person who takes the risk of profit or loss” and comes from a French verb which means “to undertake.”

Price said big manufacturing businesses — such as the auto and steel industries — have been on the decline for years, while small companies started by entrepreneurs have seen high growth recently.

As the economy continues to spiral in who-knows-what direction, BYU student ventures are increasing, with the Entrepreneurship Center being aware of more than 200 ventures.

“We help teach the entrepreneur to turn a small business into a medium or large business,” Price said. “It has a huge impact, not only on the entrepreneurs, but also on the economy as well.”

Enter one such small business venture, Hansen Ties, where pre-business major Steven Hansen acts as an entrepreneur for his family’s rubber railroad ties company.

Hansen said his family got the idea for their product when he and his brothers worked in the railroad maintenance industry before his mission and noticed how often wooden railroad ties needed to be replaced. Hansen’s family just happened to be in the tire-recycling industry, and within years, they patented the world’s first rubber railroad tie.

“It’s a fun process,” Hansen said. “But I don’t know how to do everything myself, so I surrounded myself with those that do.”

Hansen approached Nile Hatch, an entrepreneurship professor who mentored him on topics from writing the business plan to understanding the manufacturing logistics.

“One of the things mentors do is help bring those tasks into a manageable bundle,” Hatch said. “Even our business students need mentors.”

But many BYU entrepreneurs aren’t business majors at all. They range from computer science majors to engineers who are seeking to market their novel ideas, taking on big risks and possibly bigger upsides as well.

“Many of our very best entrepreneurs are not business majors,” said Jim Brau, finance professor. “But getting a business minor may be the difference in successfully launching your venture.”

An entrepreneurial venture is started by finding a unique product or service that is typically first-to-market. According to the Small Business Administration Web site, entrepreneurs must first create a viable business plan which proposes everything from company goals to financial cash flows.

Students first fund the businesses through “bootstrapping,” which is to creatively find ways to fund the venture or by relying on “families, friends and fools,” Price said.

After bootstrapping, entrepreneurs then find hopeful private investors, called “angels,” who personally invest in the ventures, expecting high returns. The last step is to find venture capital.

Brau, who specializes in entrepreneurial finance, said the hardest part about securing venture capital is competing with the sheer number of other great ideas out there. He said BYU’s Business Plan Competition, held annually since 1993, helps students propel their ventures to get noticed.

“The [competition] has the potential to give students a step up, leapfrogging them through the system we have built,” he said.

One such venture that got recognized by venture capitalists after placing first in 1995’s competition was started by two BYU students who were weary of replacing expensive contact lenses. Today the Draper-based company is known as 1-800 CONTACTS and has sold products to more than 5 million customers with $249 million in sales, according to their Web site.

While this year’s winners Xeromax and KT Tape got to compete internationally for investor’s pocketbooks, Price said the Entrepreneurship Center’s main emphasis is on guiding the students to appropriate mentors.

To aid students in their aspirations, the center hosts the Bus M 371R entrepreneurship lecture series every fall and winter, catering to more than 500 students a week.

The next event the center will host is the Entrepreneur of the Year award during Fall semester. Students interested in pursuing business ventures can visit the Center for Entrepreneurship and Technology in 470 Tanner Building.

While Brau said only 66 percent of new businesses survive the first two years and only half survive the first four, BYU entrepreneurs may expect to become the next big name such as J Dawgs, DearElder.com or Omniture — all of which came out of BYU.

After all, the last phase in entrepreneurship may be the best part: once the venture grows and reaches maturity, entrepreneurs seek to harvest the company by selling it for huge returns. And that may be something students might want to “pass go and collect $200” for.