Can I Really Be An Entrepreneur?
When times are tough we often find ourselves trapped in a work environment which we would rather escape. We have bills to pay, debts to dispose of and we are just grateful for a paycheck coming in even though we hate what we do. It can also disrupt your health. In January, I gave a talk to the Financial Women’s Assn. of N.J. at the Harborside Financial Center in Jersey City. It’s prime real estate right along the Hudson River with beautiful views of the downtown NY skyline and the harbor. A big financial firm was the kind host of the event and provided a room and AV equipment. The floor where the room was located was huge and just about empty. It had been a call center for the firm’s customers until all the jobs were shipped to Manila. There were dozens if not hundreds of vacant desks neatly lined up. Places for Americans to be working but the jobs had been exported to a foreign land. There was a small group of fewer than 10 men still toiling in the space. How depressing must that be? You go to work knowing that hundreds of others were working right there and now are sitting at home trying to find jobs.
These are not easy times to find new employment. Every week more companies announce more payroll cuts. For example, Dell has already trimmed tens of thousands of jobs but in late January announced hundreds more cuts at many facilities around the world including its Austin TX headquarters.
How can you fight back and head in a new direction? At times like these when more than 10% of our citizens are unemployed it is probably best to open yourself up to the idea of starting your own company. Tough times create a lot of opportunity if you can spot an unfilled niche. It has long been the case that most new American jobs are created by small businesses, not the large ones. If you want to give manicures and there are already 3 or 4 nail salons right in your neighborhood, then it would be hard to be successful and pay the rent. However, if you have an original idea to do something that others have not thought of or that they are not doing in your community, you have a much better chance of success. If you want to offer a luxury service, then you need to be sure the customer will have a luxury experience in nice surroundings. You must also carefully consider that few people have funds these days to pamper themselves with things they don’t need to have. If your service or idea will solve a problem for people at a reasonable price and make their life better or easier, you are more likely to succeed.
This isn’t a good time to launch a new venture like a restaurant or other business that requires heavy upfront capital expenditures on rent and equipment. It just isn’t the time to take on debt to fund your start-up, assuming you could even get a loan to do it. It would also not be wise to borrow on your credit cards or to drain your bank account to fund it. Those cash reserves are more important now than ever. Many folks are just eating at home right now. But what if you could make some special treat in your own kitchen that you could sell to others to take home? We read often of now huge companies that started in someone’s kitchen.
To start a business you need to think out a business plan. What do you need to start your business? Do you need a license or other credential that you don’t yet have? Do you need some special equipment you will have to order? Can you start it from your home and save a bundle on an office. (see article about working at home). Are you willing to work hard? Owning yYour own business is rarely a 9-5 proposition. You may be holding meetings with the boss in the mirror late at night while you are brushing your teeth and remember that there was something you forgot to do during the day. It will take time to build up customers and sales. You must be prepared to make little money at first. Be sure to check your local unemployment insurance rules. Some states think you are ineligible to collect your benefits if you are the officer of a corporation, even if it is losing money or breaking even. Take the proper legal steps so that the financial responsibility for the business is with the business and doesn’t wipe out your home or other assets that still have value.
Don’t forget the importance of a support system. Twenty five years ago when I was starting Gramercy Capital Mgt., I had a great group of fans and supporters egging me on. In exchange for an ownership interest, some friends with their own brokerage firm offered to bankroll me to get started so I had money coming in. For sure they made a handsome profit on my success. The provided me with office space, phones and someone to answer them. We drew up a carefully considered legal agreement. My children were small but very positive and supportive every night at the dinner table. I spoke daily with my late brother who had been a very successful management consultant. He was a great sounding board and also very positive about my plans. Everybody needs moral support and you must make sure you have that available to you. If you are married, you must have the complete support of your spouse lest you otherwise find that person is subverting your goals and ambitions and dragging you down when you need to be cheered up.
So yes, you can start your own business. It may well be a better alternative than sitting at home and feeling depressed. The best news if you do take the step is that you don’t have to waste a large portion of your day playing corporate politics to get ahead. You can spend that energy on finding customers, improving your product, offering better service.. You will be your own boss. Usually you will have to work much harder than if you work for others. And yes, the hours are likely to be much longer. But your success will be your own and you will reap the profits when your hard work pays off.