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How to Survive Thirty Years in Business: Ideas to Help You Succeed with Self Employment.
The Fallacy of the Great Goldmine for Sale
July 2011 will be a landmark month for me.
In July 1981, I began to plan my first business venture. I had bought one of the first home computers then available in Britain a Sinclair ZX81. In those days you even had to build the thing yourself from a box full of parts. It took several hours and it worked, I was hooked on the little black box, with 1K memory, yes 1k expandable to 16K. No Keyboard just a flat pastic contact strip and backup to a cassette recorder which rarely worked and the TV as a monitor.
My first idea was to sell the software, with so few computers around it was a ridiculous idea, but I learned from the failure, made contacts who taught me a lot about business and here I am thirty years later, still playing with computers, still trying business ideas, still learning but I hope that now I can share some of the knowledge I have gained to some of you who may be thinking problems in business are unique and have only happened to you.
The Goldmine Fallacy
Perhaps the most common fallacy in the world of business is what I call the "Goldmine Fallacy"
The Goldmine Fallacy is the one where they, you will always find a they, tell you they have a secret to creating wealth, follow their rules and you Will succeed beyond your wildest dreams. You will open the secret to find a goldmine of opportunity. For $25, the price of a phone call, "For as little as ..." Add your own follow up. You will probably know several reasons why you should buy now!
Of course they all have the answer to the question, "Why are you selling me this?" You'll hear that this is the REAL Opportunity, the others are fake, I am honest believe me though others have lied.
Be critical and skeptical, goldmines rarely come up for sale. Why would you sell your goldmine if you were making good money? The goldmine fallacy is an old scam, it is old because it works. The seller always has one advantage over you, he knows that if you won't buy there are a million others who will.
The Real Goldmines That Come Up for Sale.
Sometimes you will find a real goldmine for sale. I did once, it was a small convenience store (Mom & Pop), open seven days a week and 364 days per year. It was a real brick and mortar store, on a busy junction, businesses not far away for office staff and passing trade. Together with this it had nearby residential property and the only local competition was on top of a steep hill. I owned that store for eleven years, increased it's worth to near a quarter of a million pounds in turnover per year and added one very important day to the years opening times.
I opened Christmas Day, so for seven years I worked 365 days per year from 5am until 9pm.
The moral of this story is, if you do find a goldmine, it needs hard work. I worked almost alone with some help from family in the evenings. The store was not hard to maintain only about 144 square feet, smaller than some of your living rooms possibly.
After eleven years of work learning about the business and seven years working on building it, I was exhausted. That is when a goldmine might come up for sale. A genuine one of a kind offer, not open to everyone for a few dollars down. You will pay for this one, in cash and in blood,sweat and tears, but if you do happen across it, your tears could be ones of joy.
Starting In Business
Now To Basics What You Need to Know
- Know why you want to be in business
- Get educated, learn basic book-keepin or accounting principle
- Follow ALL the rules
- Accept advice graciously, then make your own plans.
- Work with your customers.
- Watch for trends.
Know Why you want to be in Business
This is one of the most important factors in your business.
Why do you want to be in business?
Some people see being in business as a means to climb the social ladder, some people believe being in business leads to a life of leisure and wealth. Some people just want some control over their own life, no boss watching them 8 hours per day.
Whatever your reason, you need to examine this question closely, critically and with honesty.
For instance: If your answer is to have more control in your life, no boss telling me what to do.
You may become your own boss, with your own business, you build a name, a brand or service. But think carefully, you will have a boss, you are to blame for all failures, acclaimed for all successes.
But also your customers become your boss too. Get it right and they will come back again and again. They may tell their friends and colleagues how good you are, but don't count on that.
Get it wrong, even just once, in moments word will fly around town or the world that you did something bad. The public as a boss is unwilling to forgive even the slightest misdemeanor.
For the public there is only one right way and that is theirs. They are a much harsher judge than that dragon you know from work.
When you are in business you need to know how to find information readily. The most readily available sources of information sre business accounts.
Business accounts in the form of Profit and Loss (P/L), balance sheets, day ledgers, sales ledgers etc take a lot of getting used to. You as the business owner need to know how to read them.
You can employ others to create your accounts, book-keepers or accountants.
You however need to know what your accounts are telling you about your business, is that boost in sales due to the advertising or was there a bus stopped in a traffic jam right outside the store. That happened to me once; wow what a great day!
Using good accounts will help you see trends, maybe your sales go up over the holiday period, maybe they rise over the spring and summer.
Whatever, your accountant and book-keeper might not be able to help you in interpreting the accounts. That is your responsibility.
A course in business accounting or book-keeping at Community College will cost you very little, you don't have to take the whole business course if you don't want too. But invest in the time for such basic courses and it will pay you back with interest throughout your business career.
Follow ALL The Rules.
This is exactly what it says. Find out the rules in your city, your state and any national rules and regulations for your business and follow them.
Get required licences and permits, register with the various authorities such as the Internal Revenue Service (IRS).
As with all legal questions, Ignorance is no defense! If you break the rules the authorities can close you down.
Accept Advice Graciously
This another case where "they" have a lot to say. They being customers, regular and one time ones.
Always thank your customers for their suggestions. Even if the suggestion is based on a complaint.
Some people will complain about anything and everything. But if a customer has a problem with something, consider it a positive. It may be something that is putting off your other potential customers.
An example for me was the first Christmas Day I opened, I didn't sell batteries. Never had and never considered the matter. A customer had forgotten to buy batteries for his children's toys. I had other items he wanted, but lost a valuable sale in the batteries, several others asked for batteries that day. You can be sure the next Christmas I had a wide variety of batteries placed in a highly visible area for several weeks before Christmas.
Another customer once suggested I get a particular niche magazine about rock music. I knew my regular customers would not buy such a thing and thanked him for the suggestion. He promised to return IF I provided the magazine. After consideration there was no value in fulfilling the request. That customer never returned to see if I had obtained the magazine for him.
So always weight advice. Some like the batteries is good advice, others like the magazine is of little worth. It is your business, you know your businesses customers and it is up to you to make the final decision.
Work with Your Customers
This is an important strategy in business.
Like the matter with the batteries mentioned in the previous section. You customers will build a relationship with you if they see you are open to solve their problems.
Your customers come to you seeking a need that is to be filled. If you have only one solution for their need, that is to sell your product at whatever cosst, they will soon move on to another solution.
If I had tried to sell a can of beans to the man who wanted batteries, How far do you think I would have got? Probably not far and he would then maybe not continued to buy his other items.
As it was he was a regular customer and just before the following Christmas, he was in the store and saw the batteries, he remembered that I had said how much I appreciated his suggestion and in fact bought a pack of batteries that night just incase he forgot again that year.
Customers like that you will work towards filling their needs. Even if you can't provide the perfect solution at the time, they like it when you acknowledge their individuality and are willing to help. Even when helping means letting the sale go.
... For Dummies
Watch for Trends
Businesses have trends. They vary from business to business.
For instance if you have a business in a ski resort, you may find that most business revolves around skiing season, maybe if you are in a beach resort your business grows through the summer. In a town you may see fluctuations from area to area. Trends can be very localized.
For instance in my store, we had a quiet time from January through February, business grew in March and April, levelling through May and June at a yearly high. July and August business fell sharply, (July-First week in September is generally the School Summer cacation time in England) From September to December levels returned to May/June levels with a high spike in December mostly accounted for by Christmas Day opening. (Christmas Daytrading alone often exceeded seven days trading of any other high month. Effectively making December a 38 trading day month).
After a year or two in business you can use your accounts to find such trends. This allows you to effectively forecast and budget for special circumstances. If you are lucky you will even see little variation in degrees of trends. So a $5,000 month one year may become a regular feature for several years.
Watching for such trends can give you warnings of problems, if a month has been consistant year on year and it falls suddenly you need to examine if that was a one of a kind situation or if something is going wrong in your business.
Business Start-up Amazon Store
- Starting in Business - Books
Find all the books and other information you will need in this Business Start-up Amazon Store.
Thank you for reading this far. You should have a lot of basic information at your fingertips right now.
It has been a good thirty years in business for me. I am now involved in some e-business activities and education of those looking to go into online business. I find that there is a great deal of cross-over solutions and problems for both brick and mortar business and e-business. Any and all these ideas can be used within your own business, whether a store, office or online. I wish you all the best.
Examine these basic ideas, and feel free to comment on them or add to them.
Five Questions to Ask Yourself BEFORE Going into Business
- The Top Five Questions to Ask When Planning a New Business
In 1982, I created my first business, it was a computer software store and like many other businesses it failed in just over two years. Why did it fail? I was enthused by my hobby in the new computer world of the early 1980's, I believed everyone nee
Some of my other hubs
- Increase Your Wealth: Multiple Streams of Income
The idea of creating several cash generating opportunities in order to increase your overall wealth.
- Online Business: a New source of Cash from PPC?
The first of three hubs looking at List My 5 as a source of income for cash generation. Be sure to read the two follow up hubs for the full benefit.
Things to Remember
- Do what you love, but when the public don't buy into what you love. KEEP IT A HOBBY.
- Listen to your customers, but take their advice with care.
- Never invest more time, effort or money than you can afford.
- Life often takes a backseat with small business owners. Keep life in perspective, family and other things matter alongside your business.
- Educate yourself in book-keeping.
- Never trust the word of other people when it comes to a sure thing. Things are never as sure as the salesmans commission when hhe gets a dupe to buy.