In this week's video I share why so many small businesses are afraid of Obamacare.
Monthly Archive for October, 2013
The order of my list is intentional. Liberty is prime because it makes the other two possible. And business ownership has produced a jobs-creating economy, making homeownership a reality for millions of Americans. Liberty is our inalienable right as Americans, while homeownership is possible for all Americans, but not guaranteed. Business ownership, however, clearly is not for everyone.
For most of us, when the entrepreneurial sap starts rising in our bark the first thought is typically to start from scratch—a.k.a. a start-up. It’s a natural process to envision your new business and then set about creating it out of whole cloth. But maybe someone has already created it. Consider these three points before you start from scratch.
1. Think of your local marketplace as a Honda Civic with five really big guys already crammed in it and you want to get in that car with them. It’s possible, but guess who’s gonna get squeezed? That’s right—and you get the console. Ouch!
That’s what it feels like when you add a new business to a marketplace. The folks already there have the best seats, and you get what’s left. I’m not saying it can’t be done—I did it—but it’s a rough ride. And remember, the console doesn’t have a seat belt.
2. Look at that fully-occupied Civic another way. Let’s say you talk one of those five big guys into selling his seat. This time you get a real seat, with a seat belt. In the marketplace, that seat represents an existing location, a known brand, phone numbers, website, vendor relationships, experienced staff, and most importantly, customers and cash flow, which represent your seat belt and air bags. With this plan, your first day as a new owner won’t be day-one of your business.
3. The biggest lament for every small business dreamer is, “How do I get the capital to fund my new business?” Here’s some really good news: almost all small business sales involve some seller financing. So when you’re talking to that big guy about selling his seat, be prepared to discuss how the two of you can be creative in developing a multi-year payment plan that combines your investment and his financing.
And before you convince yourself that the price tag of that seat is too high, compare it to the cost of replicating the existing customers, cash flow, contacts and good will that come with that acquisition.
Remember: even if you buy a business instead of creating one, you’re still going to have the hardest job in the world.
Check out my latest segment below from The Small Business Advocate Show® where I talk more in-depth about buying your American Dream.
Who do you think bears the most responsibility for the government shutdown?
16% - Republican Party
18% - House Republicans
18%- President Obama
49% - Obama and Senate Democrats
In our recent poll question, we asked our small business audience this question: “Who do you think bears the most responsibility for the government shutdown?” Two-thirds of our respondents blame the president and his party, while the rest blame Republicans. It’s interesting that national polls of the general population put more of the blame on Republicans.
But here’s what I think: It doesn’t matter–they’re all to blame. Washington is not just broken, it’s rotten. Even the good guys, regardless of which side of the aisle they’re on, can’t find a way to make a difference by demonstrating leadership.
Once upon a time, a great American president invoked this notion regarding the relationship between the government and the governed, “… of the people, by the people, for the people.” A century and a half later, the political class has inverted this beautiful tenet into what is surely the ugliest form of narcissism ever observed in a democracy: of the small minded, by the petulant, for the ideology. And every day they pursue this agenda without any sense of shame.
In a conversation with Steve Forbes this year, I asked him what it will take to get America back on track. He said, “It will have to come from the grassroots.” Indeed. As I’ve said in this space before, Main Street, especially the small business sector, has to band together to take back America from the political class in Washington, to protect ourselves from the digital greed of Wall Street, and demand honest reporting from what has become the most corrupt media in the history of America.
When I say “band together,” it’s not as big a challenge as you might think. In the 2012 presidential election, approximately 126 million votes were cast for the two major parties. If you add up all of the owners and employees of small businesses in the U.S., that number would be approximately 100 million. I’m not saying anyone should change parties. But couldn’t the small business sector agree on this one thing: Demand the government run its business the way we have to run ours. The application of that demand on presidential candidates and members of Congress would go a long way toward ridding America of the embarrassing and destructive Kabuki theatre we’ve been watching for way too long.
Small business owners, let’s take back America! And our model is Main Street, where honesty, transparency and integrity are the coins of the realm.
If we don’t, I fear it won’t happen.
Biutou Doumbia lives in a tiny village in the West African country of Mali. Biutou (sounds like Bee-oo-too) and her family live in poverty, very close to the line between survival and, well, you know.
Oh, one more thing: Biutou is a small business owner. She makes and sells peanut butter.
You might say that Biutou’s operation is vertically integrated: She grows the peanuts, and then manufactures, sells, and distributes her product.
Over two centuries ago, in The Wealth Of Nations, Adam Smith explained how markets are made by the division of labor. And free markets created capitalism, which Ayn Rand called, “the only system geared to the life of a rational being.”
Biutou doesn’t know Smith or Rand from a warthog - she’s illiterate. But she is one of Rand’s rational beings. And as such, she recognized the efficiencies of division of labor when a diesel-powered grinder/blender was made available.
Now, for 25¢ and a 10-minute wait, Biutou’s 15 pounds of peanuts turn into better peanut butter than she could make pounding all day with a pestle.
One of the things every business must do today is focus on core competencies–what you do that makes your business valuable to customers. Everything else, theoretically, can be outsourced to specialists in your non-core activity.
Take a look at your own operation to see how you can find efficiencies by asking this question: Must this task be done in-house?
Your answer will be found in the answers to other questions like these:
1. How much control do we lose, and can we live with it?
2. What impact will our decision have on customers?
Remember, any decision to outsource–or not–should be driven by the desire to seek efficiencies and improve customer service.
With one quarter left in 2013, how does the rest of the year look for your business?
18% - We’re expecting a great finish to an already great year.
24% - We’re projecting a strong finish to a fair year.
52%- We’re expecting the last quarter to be like the first three - just okay.
6% - If the last quarter isn’t better than the first three, we’re in trouble.
As you can see from our poll response this week, some small businesses are doing well. But alas, more than half are not. Over four years since the end of the Great Recession, this should not be the case. I’m going to have more to say about this in an upcoming Feature Article. Stay tuned and thanks for contributing.
One of the great come-back stories of all time happened recently, but not too many people know about it. Stay with me small business owners, you’re going to like this story.
The world’s oldest trophy in international sports is a yacht race called the America’s Cup, dating to 1851. The 34th America’s Cup was contested recently between the defender, Oracle Team USA (Golden Gate Yacht Club) and the challenger, Emirates Team New Zealand (Royal New Zealand Yacht Squadron). The 162 year-old America’s Cup trophy goes to the first team to post nine race wins over the period of approximately three weeks.
When the competition began in San Francisco Bay September 7, the U.S. team was already in the hole. Due to a previous violation, Oracle Team USA was penalized two points (races), to be applied to their next race. Since the America’s Cup was the next one, the two teams launched their boats for the opening contest with the Kiwis zero and the Yanks -2. Yes, that meant the U.S. team had to win 11 races before the team from down under got to nine.
Small business owners know how the U.S. team must have felt; we’re no strangers to the marketplace equivalent of starting from less than zero before we launch. Like opening up one morning expecting a great day, only to be met with a major customer defection on top of an unexpected expense, both creating a cash flow crisis and a call to, or worse, from the bank. Indeed, the question is not whether a small business will find itself up against seemingly impossible odds, but rather how well the owner will handle the next time.
Back to the race: By September 18, the Kiwis were running away with America’s Cup 2013, amassing an eight-to-one lead. The Yanks actually won races four, eight, and nine, but due to the penalty, only got credit for the ninth race. What happened next is now part of sporting legend and an inspiration to every underdog and small business owner. From September 19-25, the U.S. team shutout the challenger in the next eight races to retain the America’s Cup, 9 to 8. Even the determined, world-class Kiwis took 11 races to win eight points in the early going.
Most small business owners don’t relate to the elite world of yacht racing. But we do relate to long odds. You don’t last long in small business if you don’t subscribe to the profound wisdom of that great sports philosopher, Yogi Berra, who said, “It ain’t over till it’s over.” Even when the fat lady starts warming up her voice in your general direction, never give up. Never give up.
Even when you’re in the hole before you launch, as long as the race isn’t over, you can still win.
Check out my latest radio segment from The Small Business Advocate Show® that goes into more depth about this topic. Click the link below to listen.