Discussing his field of "entrepreneurial acquisitions," Alum Phil Schiavoni, EN '71, returned to Tufts on Tuesday to share his experiences with approximately 25 students in the Career Services center. Schiavoni discussed the career path that led him to establish PAS Associates, a company that focuses on the private acquisition and turnaround of struggling or stagnant businesses.
Schiavoni emphasized that it is not necessary to have a completely new idea or product to be an entrepreneur, but rather to have a vision of how to remodel an existing service or product in order to enlarge the market.
He stressed that entrepreneurship can involve bringing new direction to existing companies rather than developing a completely new industry. As an example, he used a purchase that he is considering in the English as a Second Language industry.
"If you look at it from an entrepreneurial standpoint and have a vision," Shiavoni explained, "you find that [ESL services] is a big market, a growing market, and an underserved market. Most people look at ESL as a language issue, but an entrepreneur sees it as an opportunity to become the primary provider [in the field]."
According to Schiavoni, having a vision and plan to reformat the way a product is presented is vital in seeking funding for an acquisition. An entrepreneur, he said, must demonstrate that the growth of the purchased company will exceed the growth rate of the rest of the industry. "Value creation," bringing profits to the company, is the key to being funded, he said.
"You can acquire a company but you haven't really done anything at that point. You haven't created any value," he said.
"I think Mr.Schiavoni's enthusiasm for entrepreneurship inspired students from all academic backgrounds to dream big dreams and consider less conventional, more creative career paths," Development Office Associate Director Elaine Brzycki said.
She said that Schiavoni gave great examples of analyzing opportunities, developing a vision, and leading a team to higher success. "He demonstrated entrepreneurial thinking that is useful for any career."
Students in attendance asked Schiavoni questions during and following the presentation. Their questions ranged from inquiries into the demands of his lifestyle and what kind of preparation they could undertake in pursuing a similar career. In response to the nature of the job, Schiavoni said, "Even though there was intense pressure and demand it was less stressful [than my previous jobs] because I had control."
In regard to how students could prepare to enter the field of entrepreneurship, Schiavoni had several pieces of advice. He said any managing experience, even if it is just running the local pizza shop, is necessary. Students should also spend a few years in the corporate world performing what he called a staff job, such as financial analysis or strategic planning. Experiences in staff jobs, Schiavoni said, allow people to understand how the business world operates. He added that business school, while not absolutely necessary, is a natural fit and that Tufts's Entrepreneurial Leadership program offers a strong background in the basics of the field.
Schiavoni graduated from Tufts as a mechanical engineering major and knew that he wanted to go into a different field. "I had done enough differential equations in four years... I didn't want to be doing them for the rest of my life," he said.
He went on to earn his masters from Boston University in manufacturing engineering, which he described as a combined business and engineering program. After receiving his MBA, Schiavoni worked as project manager of a Boston firm that specialized in highway, bridge, and tunnel construction.
Schiavoni worked in the corporate world for 15 years prior to founding PAS Associates in 1989, and described how he and friends spent hours at a time futilely trying to think of alternatives to the monotony of going to work for a boss and following the same routine every day. He regrets that he was not "more sensitive earlier on to the opportunities [available for entrepreneurs]."
Another important stage for entrepreneurs once they have a vision for a company is funding, where they often turn to private equity groups. These are firms that invest individuals' pensions a company, with the hope that it will grow. Growth of the company leads to a return in the private equity group's investment and the growth of its clients' pensions.
Private equity groups finance the venture along with the entrepreneur's own monetary contribution. If the entrepreneur can provide enough cash through these means, banks will allow the entrepreneur to take out a loan to produce the remainder needed to purchase the company.
