Your business is where your heart is

Last month Kathy posted on the topic of where to start your business, citing a recent Fortune Small Business and Kauffman Foundation report titled "Best Places to Launch." While Kathy (and Fortune and Kauffman) certainly has a point -- that some areas of the country may be better than others to start and grow a business -- I think there's more to it than that.

For many entrepreneurs, business really is where their heart is. Just because a town 1,000 miles across the country from where you live offers a better business tax rate, or an easier building permit process, or a better art museum than your town, that doesn't necessarily mean that you should pull up stakes and make the move. Countless successful entrepreneurs have decided to stay right where they are and build their businesses in communities with which they are familiar, leveraging their existing networks of business and personal relationships while building new ones. For example, Steve Jobs and Steve Wozniak didn't consult a list of best places to set up their business when they started Apple Computer in Steve Jobs' parents' garage in Los Altos, California. By (literally) staying close to home, the two Steves got a free place to assemble their first computers, they tapped into a vibrant local community of computer hobbiests (some of whom eventually became their customers, and others who became their employees), they were able to make their first big sale to a local computer shop -- the Byte Shop in nearby Mountain View -- and they were physically close to Xerox's famous Palo Alto Research Center (PARC), which invented many of the innovations that Apple Computer designed into its groundbreaking Macintosh.

So, while I can understand why "Where to start?" is a question that many entrepreneurs ask themselves, my suggestion is that they first look close to home. They may find everything there they need to succeed -- and much, much more.

Character does count

I was so distressed when I read Peter's recent post about Kiva.org (A little less love for Kiva.org) because I am a Kiva lender and I've given Kiva gift certificates to people to get them involved in helping others start or run their small businesses.  Peter wrote about how big business Kiva has become and how the very thing that drew most people to them (one-to-one lending) is the very thing they tinkered with to the dismay of many of their most loyal customers. The precarious position that Kiva has put itself in reminds me of how often some entrepreneurs foresake the core values that were the very reason for starting the business in order to grow and make more money.

Whenever I see businesses make excuses for unethical behavior, which Kiva is doing as a reaction to the bad press,  I think about Michael Josephson, founder of the Josephson Institute for Ethics.  Michael is the originator of the famous Character Counts! program that is now used in thousands of schools to teach kids the importance of integrity and ethics. He founded the Josephson Institute in 1987 to honor his parents, and I have had the pleasure of meeting him and having him in the classroom.  His message is very powerful.  For example, in an article called "The Hidden Costs of Unethical Behavior," he reports on all the ways that unethical behavior can hurt your business.  Here are a few of them:

• Unethical behavior hurts sales because 80 percent of people say they buy from firms they believe are ethical.
• 74 percent of people decide whether to invest in a company's stock based on the perception of ethical behavior
• "Once the public views a company as corrupt, the taint can be permanent."
• Employee fraud from unethical behavior costs firms $600 billion a year.

The report contains four pages of negative outcomes from unethical behavior.  Time will tell if Kiva will recover from the new perception that people have.  I suggest they spend some time on Michael Josephson's site where there are a lot of great resources for insuring that the messages  your company sends show that you believe Character Counts!  In fact, I recommend they invite Michael in to speak to their company; he is an inspiring speaker.  What's more, he has helped many companies develop leadership programs focused on the six pillars of Character Counts!  It couldn't hurt.