Free Advice

Your own business? Yes!

This past summer I went back east for a wedding and some family business. In Minneapolis I picked up a copy of the local paper, The Star Tribune. The front page of the Saturday business section featured an article on a program at The University of St. Thomas for people who want to start their own business. A headline described it as follows, "Schools program called one of the best in U.S. for start-ups."

In the November 18, 2003 issue of the Wall Street Journal there is a study that says 56% of people dream of owning their own business (10% own their own business, 33% have no desire to be business owners and 1% didn't understand the question -- just kidding!). The bottom line is that there are a lot of people wishing they had their own business and many of them are taking action.

Starting a business, investing in a franchise and buying a business are big deals again. Here are some quotes and comments from the Star Tribune article along with my two cents worth.

"I'm not going back to the corporate setting. I've been harboring a good idea for years and thinking, 'If I could be my own boss, this is what I'd do.' "

Sometimes it takes the push from your employer to make that idea look really good. It could be a layoff or a transfer to somewhere undesirable. For those who have good business skills but don't have that "good idea" or specific technical skills, buying a business is the best alternative. You get a proven system, cash flow and the ability to use your management skills. If you don't have the idea and your business skills are less than what you're comfortable with, a franchise offers the guidance, plan and counseling. 

"My first job was 17 years, my second job four years, my third job two years, the fourth a year and one-half and the rest all less than one year."

It doesn't take a PhD to figure out that loyalty is fading in the corporate world. I've previously written about one of my first contacts in my current business (12 years ago). He told me how he was about to turn 50 and he knew what his company had in store for him.

Funny how in your own business customers value longevity. They like the experience and skills that provide them with value, good service and the job done right. No wonder that in October Business Week reported that the economic gains attributed to the consumer spending sector are getting the biggest kick from the business owner and sole proprietor groups. They account for 25% of the growth in spending while only being 10% of the total (number of consumers). In other words, small business owners are, in general, doing well. Better than employees.

"She makes less than she did in the corporate world and the hours are longer."

True, when you start a business there is a lot of this. It's referred to as sweat equity. Too bad there is no value to sweat equity until you turn a profit (above your fair market wage).

That's why a lot of people coming out of the corporate world buy an existing business. They can walk into a salary at least close to what they were making if not above. Combine that with the fun they're having as their own boss and it's a win-win deal.

From the Minneapolis SBA office: "He doesn't know of anyone keeping statistics on the number of laid-off workers who are starting businesses, but he knows it has become a trend."

Yep, it's a trend all right. Especially when compared to 1998-2001, a real (downward) blip in the graph of people entering the self-employment ranks. My opinion is that we've returned to normal. It's similar to the mid-90's and prior. That means a constant flow of people who are fed up with the corporate world (or the corporate world is fed up with them).

Where we are now is nothing unusual and will continue. Corporations aren't going to change, the drive to be ones own boss isn't going to change and the skills and capital accumulated in the corporate world will allow more people to strike out on their own.

The benefits of being in charge are much greater than the risks for a lot of us. So whether it's that idea germinating in your brain or the call to use your management skills to benefit yourself; the lure of control, independence and financial rewards all while having fun will keep attracting more people.  

© Copyright John Martinka 2003. All rights reserved.