Entrepreneurship Is THE Key To Recovery
Deciding To Do "It"
Yesterday the U.S. government announced first time unemployment claims were once again over 428,000. New jobs created were a dismal 45,000. Fixing the problem by government hand out programs isn't going to happen. That is pretty well proven with the trillions of dollars already handed out in what have been covert reparation programs targeting specific political groups and supporters, and not targeting the real problems.
What we really need is what has always brought the United States for one - and any other free country in the world for others - out of the doldrums. We need entrepreneurs to step up and make the decision to open that new business opportunity and make their new opportunity happen. This is the ONLY way we will see sustainable progress long term.
The First Step
The biggest issue I hear from prospective entrepreneurs is to take that first step. There is so much misinformation out there about how someone can lose everything by opening up a small business that it scares off a lot of folks. There are "advisers" at all levels - family, friends, bankers, accountants, clergy, and other business people that will tell you why not to do something in this market. Much of the time, these advisers wouldn't take the risk of walking across the street if they were giving away ten dollar bills. Keep this in mind when making your own decisions.
Get Good Advice and Advisors
That is the point, I believe, that you must make your own decisions. Keep in mind, I also believe strongly that you should seek advice before doing anything involving money or investment - but not just one source. You really need to find someone in the business you intend to enter - but in a market area that you will not be infringing - and talk it over with them. Often, a successful businessman in the same industry will jump at the chance to mentor you. There is a sense of pride that someone is recognized as successful - that someone is being asked for advice - that makes this happen. But keep in mind, they should only be one source of your information. Read up on similar companies. It takes some time to find information about some smaller niche' businesses. Take the time to find out.
Creating a Business Plan
The next step, as you collect the information is to create a business plan. Don't quit reading now - this is important. It is not difficult or daunting as it may seem. There are basically two main parts to this process. Figuring out what service or product you are going to be producing and marketing and being able to put that information down on paper will force you to narrow your scope to reality. For example, "I'm going to open a restaurant!" Sounds great - so what are you going to serve? "Everything!" Really? Breakfast, lunch, dinner, snacks - mid-morning, late afternoon and at mid-night when I want some ice cream? "No, I'm only going to be open for breakfast." Oh, so not really everything - but only pancakes, waffles, danish, toast, home made jams and jellies, tarts, hot tea (hundreds of varieties), coffee from around the world, a dozen or so different meats, eggs from free range chickens, and fruit cups with seasonal fresh fruit, right? "No, not really. I'm thinking biscuits, toast, ham, bacon or sausage, eggs - just regular eggs, coffee and your choice of white or chocolate milk." Will you serve them on paper or washable plates and coffee in paper or ceramic mugs? "Both, I guess." Can I get take-out? "Sure!" So you have bags and something to put them in to keep them warm? "Will have."
I'm sure you realize in this simulated interview we have just gone through much of the basics of a business plan. The person opening the restaurant probably knows much of the answers than they thought they did when first asked to make out a business plan. Really, it is that simple - put the ideas down on paper. Once it is all narrowed down - and makes pretty good sense - begin the financial applications putting numbers to it. Let's go back to the interview:
So how do you know you can just serve those items and be profitable? "I know a lot of people that wish there was a place nearby to eat breakfast. I think I can make a bundle serving them." Reasonable enough - but just how many people is that? "There are 22,000 people, according to the highway count I found by asking my Department of Transportation, going by my proposed location every morning between 6am and 10am. I believe that is significant enough of a population that I can get 220 people in the door each day." So you believe in getting 1% of the folks in the building every day? "No, half will come through the drive through, half will come inside." So there is space for 110 cars to come through the drive through in 4 hours? "Yes" And enough parking for 55 cars over 4 hours - figure 30 minutes per so you have 8 segments allowing two people per car. So do you have 7-8 parking spaces? "No, only 6. We plan on faster service and more people per car." Hmmm. What is the average cost of the average meal? "We anticipate half of the people eating in will have a full meal, half will only have a biscuit and some meat or jelly. All will drink something. In the drive through, we anticipate one quarter will want a full breakfast, three quarters will want just a biscuit and coffee."
Now we have the basis for a financial calculation. We can figure our revenue estimate. We can also figure out our estimated cost of goods. We also now know we have a facility - so there is cost associated including licenses, taxes, inspections, fees, delivery, freezers, coolers, all the serving items and all the cooking equipment. Put all of these on the paper. Cut your estimated income side by 1/4 and increase your costs by 1/3 - if you still show a potential profit, you may be on the right track. If not, review all of your inputs and make sure they are realistic.
The point to this is how simple putting together a business plan really is. You must identify just what it is that you are going to do, where you will do it, who is your customer, how much your costs are to do what you will be doing, how much can you really sell this for (revenue), your costs outside of product, taxes, fees, licenses, and then - figure in some solid marketing. The little restaurant may include the cost of a sign - but if they figured out how to "know" who it is coming down the highway past them in the morning and could email a coupon for a special deal.
How much more do you need? Get going - take action. Start small if you want. Review your own personal finances - often for entrepreneurs that doesn't take but a minute or two so don't feel alone - and decide just how big you can go to start. Starting small is fine. Just keep in mind, the smaller you start will require either a longer time to profitability or a longer time to a meaningful profitability, which is perfectly fine. Don't overextend yourself financially. Loans are less valuable than donations. Use your spare change, not your food budget to get started.
Nothing can destroy a friendship faster than becoming a partner in a business. Business is business and rarely allows the opportunity to consider friendship when making other decisions. Think twice - no three times - before considering a partner. Silent partners rarely are silent, but are better than operating partners. Investors are different than partners - they provide capital but not management (normally) and are tough to keep happy for a start-up. Just wanting to make you think before you act regarding partners. Keep in mind, it may slow your initial progress to not accept a partner or an investor, but you still own all of it. Keep this in mind as it is very important.
You don't need to be the fanciest facility in most cases. Garage start-ups have ended up leading the world - Microsoft for example! Literally, it makes no difference where you start, it allows you the possibilities to save money. You need enough space, power, light, access to internet and shipping access to do the business you are involved in. One other good thought - find an incubator or university that may offer space at a reduced rate on a lease to get you going and may share things like copiers, printers, and internet access keeping your costs lower.
Wear all the hats yourself to begin with. It makes you recognize where all the pressure your business is going to feel is going to come from. Add people slowly and do so with the least expensive people first taking you away from licking stamps so you can bring in more revenue. Explore the options of leasing people, hiring part timers, 1099 sales people (not on salary, only on commission) in order to grow the business. You may have to give up more than that same employee would cost you as an employee as far as a wage goes, but when all things are figured in they are probably less expensive.
It is far better to ask your local governing authority about what regulations you must follow then enact procedures that provide for you to do so - then to not act responsibly and find out later just what your fine is for not doing so. Protecting yourself with trademarks, patents, copyrights and other legal processes is good, but often not required. If you are not going to be producing a product worth millions of dollars - just make it and sell it. Patents can cost tens of thousands of dollars (less in some cases) and millions to protect. Trademarks are a bit less expensive to gain and maintain and can offer much more protection. Gatorade™ is recognized worldwide - and the product has no patent - but the name is trademarked and protected! Don't tread on that name!
The Way Out
For the past decade I have started small businesses and maintained a lifestyle. I have had some winners and losers and learned from all of them. I've been in business in the worst ever economy - twice in ten years (post 911 was really bad too). But I have remained flexible, agile, and committed. This is what I believe the US economy and the world economy needs right now.
We, Americans in my vision, must do what we have always done well. We must start now to make the way possible for everyday people to find a way out of joblessness and the stresses of feeding their families and providing for them. It is in this way the whole world will recover - and it doesn't need another stimulus program from the government. The government doesn't have the capability of making money (printing yes, producing no) only sucking it out of working people's efforts. To spend more government money, the government must suck more money out of everyone's pocket just to spread it around to people who can't otherwise get a job - and those people then end up running another government program that requires more taxing of the working folks to pay them. It never ends.
We are on the brink of a great revolution in the United States, and in many countries worldwide. Even Canadians are thinking about being capitalists again! Once this revolution begins, there will be little the government can do to stop it - but why would they anyway? Power. As long as the general public is dependent on the government for everything - the government has the power. As the people gain the power, the government power is lessened and for at least one of the political parties this is critical. The democrat party platform is to make government the basis for all jobs, health care, and food supply. Republicans in general are exactly opposed to this.
Please take the first step. Think through your concept - whatever it might be. Can you start small? What do you need to do to start? What happens if you start - and it isn't good - can you stop? Do the calculations and narrow down your plan to a manageable concept. Then look at the numbers - is there enough profit at a given reasonable price?
I Intend to Make a Change!
I began designing a new plan and I am looking for others to join me. I have a basis for a new medium to explain, train and grow entrepreneurs. I have a partner in progress who has agreed with me that we need to actually teach the "how to" so people can move forward in getting it done. I fully believe there are plenty of dollars available if the right approach is made to get new businesses created and people back to work. We can't afford to wait to get rid of this current administration - we must begin to act now. Join me. Let me know you are interested as we rebuild the economy - first our own, then our community's, then our country's.
I challenge you - go do it!