The Hypothetical Entrepreneur – A Little Help From My Friends

From Adam Scouse:

While I have an idea about starting a ginseng business, I have never had any formal business start-up experience.  In his blog, So you want to launch a business…, Jim Flowers recommends mentors.

I sought mentors.

I stopped by and visited Dr. Tom Hammett , Non-Timber Forest Products professor at Virginia Tech, to get a little bit of expertise.

Dr. Tom Hammett recommended a reference guide, A Planning Guide for Small and Medium Size Wood Products Companies.  The publication strongly emphasizes the need for formal business planning.  It states, "Research has shown that a formal planning process is a key to the success of manufacturing companies, especially with regard to developing new products and new markets.” 

How does a small business accelerate itself?  If it is located in the New River Valley, that business can always visit business acceleration center VT Knowledge Works, located in Virginia Tech’s Corporate Research Center.  I caught the CRC bus out that way to meet up with the director of business acceleration, Jim Flowers

Inside the VT KnowledgeWorks conference room, Mr. Flowers and I scribbled over the white board while asking questions about ginseng and the path it follows to get to the end user.  The brainstorming session also addressed key issues such as harvesting regulations, acquiring required permits, and the availability of other harvestable plants.  Each of these subjects would need to be researched and planned out before I would be able to set my business plan into action.

We discussed possible business opportunities and the elements needed to be a successful entrepreneur.  I walked out with a head crammed full of new knowledge and ideas.

I concluded that ginseng was a viable product that has a specific need, specifically in Chinese markets.  The next consideration would be researching the steps needed to transform ginseng from a plant out in the woods into a product on a retailer’s shelf.   

To help me better understand how a ginseng root gets to a customer, I consulted Non-Timber Forest Product Research Specialist Dr. Jim Chamberlain.  He revealed to me a network of relationships between different levels of ginseng diggers and dealers, dealers and brokers, and brokers and exporters or retailers.  As the ginseng moves through the different levels, the number of people involved at that level decrease while the product amasses.

Dr. Chamberlain asked me to consider that the number of dealers and brokers the product must travel through is variable, depending upon who has a relationship with an exporter or retailer.  A visual representation of the network of ginseng handlers is shown below:

Levels of Ginseng Handlers, diagram by Adam Scouse   

Dr. Chamberlain also informed me that many dealers and brokers do business with more than just ginseng.   He suggested I continue to look toward other possible Non-Timber Forest Products available for harvest alongside of the herb.   

If all this sounds too technical, Building a Ginseng Business In Harmony With Nature by Chris Bolgiano from Appalachian Voices might be useful.  It profiles "sang" hunter Sylvester Yunker and sheds light on how much moxie–a term Jim Flowers uses in his blog–it actually takes to be a "sang" grower today.

You can follow the full series of posts by Adam Scouse for Handshake 2.0 at The Hypothetical Entrepreneur.

Adam Scouse is an intern for Handshake 2.0, a member company of business acceleration center VT KnowledgeWorks, located in the Virginia Tech Corporate Research Center, a technology, research, and science park on the Virginia Tech campus in Blacksburg, Virginia.  The research park provides high-technology companies access to university faculty, facilities, and equipment and business-related support services.  The Virginia Tech Corporate Research Center fosters commercialization and technology transfer of university research for both high-tech start-up companies and established technology businesses.

Entrepreneurial Summit 2008 at Radford University
Handshake 1.0 - Automation Creations, Inc.

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