current administration. I don’t want to delve into politics here, but I want to point out one really important fact:
During the Hoover Depression, people lined up for soup and a cot to sleep on for the night. During the Bush “recession”, people are lining up for the new iPhone or a decaf latte! I’m not making light of the fact that many people are having a difficult time making ends meet, many are losing their homes; I’m just pointing out the vast progress and growth that our economy has made. Just food for thought!
As a public speaker and educator, I am noticing a curious trend with the many people that I speak with throughout my week. It seems that everybody is feeling the current economic crunch (I hate that word “crunch”) and they are looking for ways to supplement their income. What surprises me though, is how few people have any idea of what to do, let alone how to do it. They have “pipe dreams” and they have definite needs – but they just don’t know how to connect the two.
A lot of people are curious about investing in real estate but they all say that without any money they just can’t get started. The first thing I tell them is that real estate investing is not for everyone - regardless of thee many infomercials say. Then I try to explain to them that the money part is the easy part. What they are in the greatest need of is knowledge. What I try to emphasize is that with the proper knowledge of the process, you can really make things happen. Somehow it all seems lost on most I speak with.
And that brings me to the topic of this newsletter: Starting your own business. I thought as a pleasant diversion from real estate, I would spend some time on the business of starting a business. Millions of Americans dream of starting their own business, for a number of reasons:
With apologies to Charles Dickens, there has never been a better time in history to own your own business, and there has never been a worse time in history to own your own business.
WHY THE BEST OF TIMES?
A number of socio-economic trends, some of them unique in history, have combined over the last 20 years to create a “perfect storm” of entrepreneurial fervor and have made the dawning years of the 21st century a perfect time to start a business.
ADVANTAGE #1: RAPID ADVANCES IN TECHNOLOGY
Do you remember how we used to work back in the ‘80’s? If your work involved any kind of paper-shuffling (and what work didn’t?), you did it on a manual or electric typewriter; and often times with carbon paper.
Would you say times have changed somewhat? The computer, software, telecom and wireless communications revolutions of the last 20 years have totally changed the way we work, think, live and plan. Our machines – desktops, laptops, notebooks, PDA’s, cell phones, Blackberrys, Treos, GPS and iPod devices, and more - enable us to do things that people could only have dreamed of 20 years ago. The technology is incredibly affordable and getting more affordable all the time
ADVANTAGE #2: A SURPLUS OF EDUCATION AND INFORMATION
The Baby Boom generation and its rearguard in Generation X and Y are probably the most educated people in American history. I’m not talking about the Baby Boomer’s that never learned to put down that bong and get a hair cut, or the tattooed, body-pierced, mohawked morons that wander through our malls and arcades, rather I speak of the Gen X-er’s and Y-er’s that fully take advantage of the most sophisticated information and institutions in the world.
I have a very close friend who is a family law attorney and her children (ages 14 through 18) have taken advantage of their school’s advanced education programs. The youngest will become a famous fashion designer (without doubt) because she has focused on her passion; the middle son is destined to follow in his father’s footsteps and become an extraordinary doctor; and the oldest is in her first year at University of Florida, majoring in religion. Very impressive…and they are really good kids.
The average corporate executive in the US today has at least 4 years of college, a couple of years of grad school and a welter of “continuing education” programs under his or her belt. Thanks to the wealth of information available on the Internet and a proliferation of self-help books, seminars and Audio/Visual resources, you can become an expert in anything, anytime, in a matter of months if not weeks, for an extremely affordable cost.
ADVANTAGE #3: THE LEGACY OF THE 1960’S
As a card carrying member of that generation, I like to credit the anti-establishment bias of that decade as a leading cause of today’s boom in business ownership. The generations that came of age in the 60’s, 70’s & 80’s were taught, consciously or not, to challenge authority and institutions of all types
and to be highly skeptical of any point of view that threatened individual freedom and autonomy. The idea of working for “the man” is as uncomfortable for today’s young people as it was to the denizens of Haight-Ashbury in San Francisco circa 1967.
WHY THE WORST OF TIMES?
Have you ever noticed that sometimes the thing you really love about someone or something is precisely the same thing that drives you crazy? It’s the same thing here – the very socio-economic trends and developments that have fostered an entrepreneurial culture in the US in the new millennium are also the things that make this the “worst of times” to start or run a business.
PROBLEM #1: RAPID ADVANCES IN TECHNOLOGY
In the 80’s, you needed thousands of employees to run a billion dollar corporation. Today you can run the same corporation with fewer than 100 employees if you have the right information systems, computer hardware and software. And corporate employers have taken note: Hundreds of thousands, if not millions, of corporate employees have lost their jobs to “down-sizings” – not to other companies, divisions or business units, but rather to the little white box that used to sit on their desk.
Do you remember back when people used to think that all of this technology would give us more time to live our lives by eliminating unnecessary or repetitive tasks from the work place? What they forgot to consider was what is called Parkinson’s Law: that work expands, not contracts, to fill the allotted amount of time. If technology makes it possible to work twenty four hours a day, seven days a week, you will!
If technology makes it possible for clients and customers to contact you twenty four hours a day, seven days a week and disrupt whatever you may be doing for other customers and clients, they will! If technology makes it possible to turn documents around in an hour that used to take two days, your clients will demand a one hour turn around.
Just take a look around you during your morning and afternoon commutes and count the number of “cell phone slaves” who just can’t break free of their office for even a moment.
PROBLEM #2: A SURPLUS OF EDUCATION & INFORMATION
You really have to wonder sometimes if there isn’t a little too much education and information out there. All of us are looking for the “best deal” when it comes to buying goods and services. We only pay more than the “best deal” when the cost of getting a better deal is prohibitive.
Today, with only a few clicks of the mouse, you can access information about all those possible deals in “real time”, meaning RIGHT NOW! If you don’t like the prices or the deals out there for something you want, you can now tell the whole world what you want to pay, and the suppliers from all around the world will compete for your business.
By doing away with those “quaint” inefficiencies (such as personal service) that made our parents and our grandparents sometimes happy to pay more than rock-bottom prices for things, our world of perfect, instant information drives customers to people who offer the lowest prices. Almost always, those people are NOT small businesses. Think about this the next time you buy a cheap knock-off from China, pick up your groceries from Wal-Mart of Costco, or make a $20 bid for a new digital camera on eBay.
PROBLEM #3: THE LEGACY OF THE 1960’S
Far be it from me to criticize the values of the folks who made it through Woodstock and the Summer of Love, yet I sometimes wonder whether the pendulum between “respect for authority and institutions” and respect for “individual freedom and autonomy” hasn’t swung just a little too far in the latter direction.
We live in a world in which everyone has unlimited and unfettered choices, rights and opinions and the right to express them at all times without the shaping force of institutions and cultural norms to limit the available options to a manageable number.
As an example, our parents had “mass media” that was broadcast from “on high”; someone else determined the content of the message, and they had to listen to it, like it or not. We have the Internet and other self-driven media that enables us to choose (or Google) information based on our personal preferences; increasingly, we determine the content of the message and what we will or will not listen to.
As a result, individuals become more and more isolated from their communities and from points of view that differ from their own. They spend less time looking outside themselves for the interests and values they share in common with their neighbors and spend more time looking inside themselves and developing their own individual, personal, unique points of view, interests and systems of values.
Businesses are then inclined to tailor their products and services more and more to the specific needs of individual consumers – a very difficult and expensive thing for small businesses to do with their limited resources. It may be easy for a small business to develop a new type of product, but will it have the ability to quickly roll out fifteen varieties that consumers will almost definitely demand.
In the final analysis, it doesn’t really matter whether it’s the “best of time” or the “worst of times” to run your business. For at some point, every one of us may have to at least think about running our own business, either full time or part time.
Many of our parents worked for large corporations, but you can’t count on them any longer to provide you with a lifetime career. Today’s computer technology has eliminated the need for large corporate staffs. Our global economy often forces corporations to transfer jobs or hire people overseas who can work for a fraction of the salaries and benefits their American competitors need. If only Americans can do the job, many companies prefer to hire them as independent contractors who will not receive benefits, health insurance or other employee “perks”. If only American employees can do the job, many companies will feel pressure to squeeze every last drop of “productivity” (translation: the most work for the least compensation) out of them. In today’s volatile economy, even the most “employee friendly” company can be taken over by a competitor, lose a key product due to obsolescence, or fail due to poor management. All of which are out of your (the employee’s) control.
When it comes to earning a living, sooner or later many of us will be on your own. At some point, we may find ourselves in a situation, at least temporarily, where we must rely on our own efforts to generate the income we need. It is my learned opinion that this can best be done by owning and running your own business.
It takes a lot of courage to step out there into the business world. There will be sleepless nights. But I have worked with many people who have done it and succeeded.
What prevents most people from getting out on their own is cold, naked fear! I have been coaching and tutoring young entrepreneurs for close to a decade and I recognized early on that the biggest fear most people have when they contemplate starting a new business is the fear that someone else will steal their idea, and in turn rob them of their success.
Fear of failure is at least as common as the desire for success. In fact, properly harnessed it can be the energy that drives that drives the wheel. But for many people it can be debilitating. Learning to use fear rather than letting it use you is obviously not just a problem for the entrepreneur but for anyone in business. There is a saying that only the “paranoid” survive in business. Many of these fears are not justified. Sometimes, even the best run businesses fail because of other unforeseen events.
In assessing the decisions I have made that have helped my businesses grow; I realized there was nothing that was exceptionally unique or unconventional. The success I have enjoyed is confirmation that the things that are supposed to work really do work and the things that are not supposed to don’t.
A large part of building your own business is listening to your own common sense (assuming you have common sense) and then taking the necessary steps to turn your theories into practice. Here are 10 very important suggestions that I find are paramount to building a successful business:
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Commit early on to QUALITY
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Be smart enough to know when you are LUCKY
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Grow SLOWLY
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DIVERSIFY your expertise
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Hire the BEST to teach you what you don’t know
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Look to BIG markets
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CHARGE for your expertise
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DIVERSIFY your talent
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Take a second look at TIMING (every day)
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Being a short term thinker can be TERMINAL
Being self employed is the purest from of capitalism and the best way of getting paid what you are truly worth. It also demands a different mind-set, including an awareness that the number of hours you put in is only meaningful in terms of what you do with them. There’s an old cliché that says, “Don’t work harder, work smarter.” The truth is, “work hard, work long and work smart.”
May your investments be profitable. God Bless! |
