“If you have the courage to begin,
you have the courage to succeed.”
– Unknown Author
ACTUAL “CASE HISTORIES”: In recent years, I have assisted numerous clients – many of whom either lost their positions due to seismic shifts in their industries or just decided “there has to be a better way” – establish their own businesses. In fact, that is precisely what I did when I decided, decades ago, that working for a large law firm was not my “cup of tea.” Instead, I struck out on my own, and have never looked back.
Opening your own business, whether on your own or with others, is not an easy task. Being an owner is surely quite different from being an employee. Being a business owner requires a dedication and a discipline that can try even the hardiest of souls.
One client I helped about seven years ago, Carrie, had fourteen years experience in assisting construction firms locate and acquire construction materials, from concrete to copper. She had to know various sources worldwide, their reliability, their quality, and the ever-changing price of goods, on a daily basis. She was literally “on call” 24 hours a day, leaving little time for her family and personal pursuits. One day Carrie decided “there just has to be a better way,” and decided to establish her own firm to consult for construction firms who, quite simply, needed to know what she knew in choosing sources of materials.
Carrie now has her own consulting firm, with four full-time employees, and a roster of large, blue-chip construction firms as clients. Although she says she sees the world quite differently than she did when she was an employee, Carrie says the same attributes that made her a good employee – focus on client needs, dedication to quality over quantity, and thinking “a few miles down the road” each and every day – have lead to her success as a business owner.
Business owners have to think a lot about, seemingly every waking moment. But continually assessing “direction” is among the most difficult. Just as it helps for an employee to have a sense of what he or she wants “at the end of the rainbow,” so too must a business owner have a sense of the business’s “ultimate path.”
I hear from Carrie every now and then when she has a question about negotiation, or seeks counsel about leaving behind the “employee mentality” and thinking, instead, “like an owner.” Over the course of my conversations with Carrie and the many other former clients who I have helped open their own business, it seems there are four general “paths” small businesses may pursue as they daily compete for success in the business world.
These four potential paths are not mutually exclusive – one does not permanently preclude the other – but each has its sense of direction, some fitting the owners better than others.
LESSON TO LEARN: If you are considering leaving “employee life” and striking out on your own, or have previously done so, give a bit of thought to these four small business “paths to pursue.” Have a clear sense of direction, and focus upon an ultimate goal, will help you deal effectively with changing circumstances, altered business conditions, and mayhem of the markets in your industry. It’s like having a “compass” during a never-ending “storm.”
1. Path One: Simply Seek Size. Just like Wal-Mart started out with a single store and grew to over 11,000 stores in 27 countries, most small business owners dream of becoming the largest company, employing the largest number of employees, with the largest revenue. That surely makes sense for a company that has low-priced retail wares, but surely might not make sense for a company that provides a specialized service for an elite clientele. Nor might it make sense for a business person who doesn’t want to manage people. Thus, some businesses and business owners are well-suited to pursue a path of unlimited growth, while some are not.
The pursuit of growth as a primary path is most common among small business owners, but not necessarily your best path. It is not that rare to hear even founders of large companies say, “I wish it was like it used to be, just the six of us, working together, like a family. This is just not the fun it used to be.”
Size is just not what it once was; the concept of “scalability” is presently in vogue. Facebook, with billions of revenues, employs just 2,000 or so people. The concept of scalability – that is, the ability to sell to many with few fixed costs – is more important than ever in a highly competitive world. Even Wal-Mart may one day want to downsize by selling more goods online, and less employees in less “bricks-and-mortar” stores.
2. Path Two: From Day One, Seek to Be Sold. It is not at all unusual for a new business to be established and operated with one target in mind: being sold as soon as the ability to sell exists. I’ve watched some of my clients do this several times, over and over again, as an intentional business model. Their pursued path has not been growth in size, and their desire is not to stay in business, but rather an intention to be acquired by a larger company, and with that specific goal in mind from the day the doors are open for business.
I’ve seen people do this most often in industries that not are particularly suitable to the sale of customer accounts, or client accounts, such as (a) home health care agencies, (b) temporary staffing companies, (c) brokerage of business services or products, (d) warranty sales and servicing outfits, and (e) collection agencies.
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3. Path Three: Seek Out a Specialty Niche: If you have what I call “unique human capital,” that is, (a) a unique skillset, (b) an unusual knowledge base, (c) very valuable relations, or (d) have had an experience that gives you a distinct edge in your industry, consider a true niche business. While niche businesses can be copied, it is hard to replicate the savvy, the insight and the cunning that can only come from “being there” that you may have, and few if any others do.
To some extent, every business is involved in satisfying human needs and desires. Knowing more than others (a) where the need lies, (b) who has the best, most accessible, and most effective method to satisfy that need, may be the unique advantage you can transform to your greatest benefit.
In this regard I often cite the attorney in New York City whose law practice is one that only he knows best: “elevator law.” That is, the legal minutiae of (a) elevator permits, (b) elevator accidents, (c) elevator construction, (d) elevator service contracts, and (e) elevator insurance. If you have an “elevator problem,” he is the attorney to call. And don’t forget: New York is chock full of elevators. Great specialty in New York; not so great in rural Alaska.
While many people will seek to copy a niche business model, there is special value to be enjoyed in being the first pioneer in virgin territory. In fact, those who do so often refer to themselves as in “territory-grab mode.”
4. Path Four: Surf the Crest of a Big Wave: No matter what your business model or industry may be, conditions in every industry are changing more, and changing faster, than ever before. While good-old-fashioned ways of doing things may be the best ways, and make the best business sense, you just can’t close your eyes for a moment to what is going on all around you, and what that might portend to your business model. Heck, I’ve even seen “future-trend consultants” pop up with supposed special skills in extrapolating from existing trends to see into the future.
Whether it is new ways to hail a taxi cab (Start-up Uber has been valued at $17 billion), new ways to secure a dinner reservation (Start-up Open Table was just sold for “$3.5 billion), or new ways to locate a hotel in a faraway city (from Priceline to Travelocity), the old ways are just not making it like they used to. In venture capital circles, they call the ideas behind such cutting edge companies “disruptive business models,” which they most surely are.
Though being born during, capitalizing on, and seeking to take energies from, a seeming state of shifting sands moving in shifting directions, what might seem to comprise little more than disorder and chaos, that is exactly the way some businesses thrive: by staying at or near the crest of the wave of “the next big thing.” In the stock market, they call it “playing momentum.” You can call it a fad or a fling; many call it enormous success.
Often, the most deep-pocketed investors with the most money to put into young companies see such “crest-of-the-wave” enterprises as potential “lottery-winners.” I cannot count the number of times I have read of new business ideas with a jaundiced eye, only to see them flourish like nothing before. The recent meteoric growth of travelers renting out or sharing homes of strangers in the cities they visit – as in AirBnB – seemed to me impossible just months ago, but sure enough, it’s a real business sector, and may very well disrupt at least one end of the hotel industry.
“Wave-crest surfing” is perhaps the most exciting and challenging path to pursue in a small business, because it is a path that requires that you be on your toes every single day, and ready to consider altering – perhaps radically – your business model. It’s not for the feint of heart, but will surely keep you young at heart. A little like being a trapeze artist, without a financial safety net to catch you if you fall.
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These “Four Paths to Ponder” when considering establishing your own small business are not mutually exclusive, but they do represent different paths to success. If nothing more, they are concepts that can only help you decide what to do in establishing a small business, and think of why you do what you do when you do so.
By consciously, mindfully and thoughtfully devising and carrying out a plan for proceeding with a business idea, you are doing all that you can do to ensure a successful outcome, to everyone’s betterment. That’s the goal we always strive for, and that’s the goal that best serves us all. Welcome to SkloverWorkingWisdom.™
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SkloverWorkingWisdom™ emphasizes smart negotiating – and navigating – for yourself at work. Negotiation and navigation of work and career issues requires that you think “out of the box,” and build value and avoid risks at every point in your career. We strive to help you understand what is commonly before you – traps and pitfalls, included – and to avoid the bumps in the road. Knowing how to navigate to achieve success in transferring from employee to independent business person may be, for you and your family, an important part of that knowledge and understanding you need.
Always be proactive. Always be creative. Always be persistent. Always be vigilant. And always do what you can to achieve for yourself, your family, and your career. Take all available steps to increase and secure employment “rewards” and eliminate or reduce employment “risks.” That’s what SkloverWorkingWisdom™ is all about.
*A note about our Actual Case Histories: In order to preserve client confidences, and protect client identities, we alter certain facts, including the name, age, gender, position, date, geographical location, and industry of our clients. The essential facts, the point illustrated and the lesson to be learned, remain actual.
Please Note: This Email Newsletter is not legal advice, but only an effort to provide generalized information about important topics related to employment and the law. Legal advice can only be rendered after formal retention of counsel, and must take into account the facts and circumstances of a particular case. Those in need of legal advice, counsel or representation should retain competent legal counsel licensed to practice law in their locale.
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