Anne Wenzel Designs Strategic Plans for Business Clients

It’s a far cry from becoming a fashion designer with her own boutique in San Francisco, a plan that intrigued her as she began college.  Instead NABE member Anne Wenzel’s focus turned to designs of an economic sort when she decided to start her own consulting firm.

Next April, she will mark the eleventh anniversary of her firm, Econosystems, based in Menlo Park, Calif., that serves primarily small businesses and independent consultants. Even in this challenging economic climate, and sometimes because of unexpected layoffs, she finds her clients want to explore ways to find new markets and cultivate customers.

Active in a number of NABE programs, Wenzel has just begun her third year as president of the San Francisco Chapter and was among a small group of members who worked to revive the chapter after a hiatus of several years.   She is also a team member for Get Connected as she works through chapters and local business groups to boost membership.

NABE Support Critical In Early Career

Wenzel credits her association with NABE with sustaining her interest in economics, particularly early in her career when the group provided critical networking and educational opportunities.  She joined NABE as a newly minted economist who had just discovered Business Economics, the organization’s flagship quarterly research journal.

Soon after graduating from San Francisco State University with a bachelor’s degree in economics, she accepted a job working for the Chemical Economics Handbook Program at SRI International.  “I joined NABE originally because, when I was browsing the periodicals in the library at SRI International, I came across our publication, Business Economics.  I found that the only way to receive a subscription was to become a member.  Since SRI paid for one professional membership per employee, that was the membership I chose, back in 1984,” she said.

 Her association with chapters, initially the Silicon Valley Roundtable, NABE’s chapter in Menlo Park, encouraged her interest in economics. “Thinking back, I honestly have to wonder if I would have remained an economist if it weren’t for NABE.  I find the networking and educational component of the meetings very important for my career.  I was the only economist on staff where I worked, and so I did not have coworkers to bounce ideas off of,” she said.

“Another extremely valuable benefit of NABE membership is the salary survey.  I made my decision to attend graduate school based on the information I found in the surveys, which evolved over time,” she said. Wenzel observed that when she joined NABE in 1984, 20 percent of respondents to the salary survey had only a bachelor’s degree and the 2008 survey shows it is now only 8 percent.  “That finding gave me a sense of urgency to enrolling in and completing the Masters degree program at San Francisco State University,” she said.

In an e-mail exchange with NABE News, Wenzel described her career paths, how she started her consulting firm, and how she is working with clients as the economy continues to shake off the recession.   Here are highlights from the exchange in mid-December:

Q.  Starting with your academic work and early career, how did you become interested in economics?
When I began attending San Francisco State University, my plan was to major in marketing and minor in fashion design, so that I could open a fashion boutique in San Francisco, selling my own fashions.  Turns out I never took a marketing class or a fashion design class:  I took an introduction to microeconomic analysis class as part of the core business curriculum, and really enjoyed it.  I had an excellent professor who was very committed to both teaching economics and providing a high quality education. He later went on to become provost of the university and I really enjoyed his class.  I decided to change my major to economics, as he explained how useful economic analysis can be in many career/business areas.  Even though virtually everyone told me not to major in economics because I’d never get a job in my field, I’ve never looked back.

Q.  How did you come to the decision to start your own firm?  Was it a plan that you had in mind for some time?
My original inspiration, when I enrolled at the state university, was to eventually open my own business.  After switching my major to economics I did not think much of the idea again until I began experiencing childcare problems with the birth of my second son.  In our neighborhood, even poor quality childcare was in extremely short supply. About the same time, I was also becoming very disillusioned with the solitary nature of my research job, something the development of the Internet was intensifying (no need to call people for information any more, it was available at my fingertips via the emerging information websites).  I came across a couple of books providing “how to” information on how to launch and succeed at a home-based business.   I began researching the idea of running a business from a home office, and a few months later was laid off as SRI International began to spin off their unprofitable consulting business.  With six months severance pay and two clients, I launched Econosystems on April 15, 1999 (after receiving only one unemployment check).

Q. What types of clients does your firm Econosystems represent and how do you typically work with them to formulate a plan or strategy?
I primarily work with small businesses and independent consultants.  The bulk of my business is acting as a virtual research associate for economists working as independent consultants.  The remainder of my business is writing business plans and formulating business strategies for entrepreneurs and small business owners.  Normally I let the entrepreneurs indicate their most pressing business needs and our work unfolds from there.  For start-ups, we discuss the basics: legal business structure, insurance, licenses and potential markets.  For existing businesses, we discuss marketing strategies, personnel needs, funding needs, and possible sources of funding.  As I work primarily through the Silicon Valley Small Business Development Center, I can refer my clients to classes at the San Jose Entrepreneur Center and other business advisors working on contract with the SBDC.  The Silicon Valley Small Business Development Center also has a technology advisor program my clients can utilize free of charge.

Q. What have been your biggest challenges working with clients in this tough economy? 
My biggest challenge, while working with my business planning clients, is working with those who are only half-heartedly approaching business planning and launch.  Many are “unintended entrepreneurs.”  They have been laid off from good paying corporate or technology jobs, and would really rather be receiving a regular paycheck with benefits.  While most have had business ideas simmering on the back burner, they understand the risk involved in actually launching a business.  The extension of unemployment insurance benefits has delayed the launch of a few businesses.  People do respond to incentives, and for many the “sure thing” of the unemployment benefits trumps the risk of business launch.

Q. What has most surprised you about the recession and its aftermath? 
The depth and severity of the recession caught me totally off guard.  I knew that the adjustable rate mortgage backed securities were risky, given stagnant wage growth and the burden of repaying such loans once they adjust.  But I did not realize how highly leveraged the banks were, and the large size of the market.  I viewed those securities as very risky, and was surprised to find they were investment grade rated products. Another thing that caught me off guard:  None of us can take the financial intermediaries for granted.  When financial markets don’t function well, the entire, real economy does not function well.
What has surprised me most about the aftermath of the contraction of the credit markets and the deep recession that followed is the delay in re-regulating the financial sector.  The poor functioning of the U.S. credit market led to the first global recession since 1982, and yet there have been no plans for breaking up the too-big-to-fail banks.

Q. How are you helping clients adjust to the "new normal" as the economy improves?
Most of my clients are small business owners or entrepreneurs with pre-business ventures.  Most markets out there are still slow, so I am working with clients to lay a solid foundation for their businesses, to be well prepared for when growth takes off.  Although many small business owners are frustrated with the slow business conditions, I really help them focus on providing value to the markets, keeping costs low, and taking the time to plan operations carefully.  Luck still can play a part in early business success, but fundamental value survives over the long haul.  I really believe businesses launched during such tough economic conditions are more financially successful, as they’re designed from the outset with low cost structures and provide high value to clients.

Q. What advice would you have for newly minted economists or students considering a career in economics?
I’d advise students studying economics to focus on a balance of math, statistics, and principles courses.  I think our science has gotten too far off track focusing on mathematical modeling, to the point where common sense is often ignored.  I once heard economics referred to as the Common Sense Science, and I think we have to get back to it.  I’ve taught upper division economics courses, so I can say that the math is very often easy for students.  Understanding what the math means is very difficult for the same students, and understanding conceptually the real workings of the economy can make the difference between being a mediocre economist versus being an excellent economist.
Also, economics students who want to work in the field should all plan for graduate school.  If the opportunity cost of a Ph.D. program is beyond what they are willing to “pay,” undergraduate students should plan on working two years and then attend a part-time economics or public policy master’s degree program.  I think masters degrees are highly underrated in our society:  I’ve found the additional education and opportunities that having a master’s degree opens up to be invaluable.

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