williamstoyota.com

I hear politicians right now talking about the jobless recovery and what can be done to stimulate job growth.  Sort term, there is probably nothing that can be done, especially since government itself is now letting workers go.  Our federal government cannot afford to employ all the unemployed people so the only solution is private sector job creation.  And are you going to go poof and create jobs?  No, the truth is that no matter what you do, business will not hire people they don’t need.

In this country, we need more skilled workers.  The ranks of the unemployed are nearly all unskilled or trades people.  There are many, many more openings for people with math, science, and technology skills than people to fill them… perhaps not as many as in the past, but there is still a need that is not fillable.  And I understand that you can say “Here in Detroit (or Houston, etc.) there are no jobs of any kind”, and you might be right.  But as a whole, the US has jobs for skilled workers that cannot be filled.  If we had more skilled workers and less unskilled, we would be closer to having a match between jobs and workers of all kinds.

There might be a difficult time retraining older workers for various reasons, and maybe those barriers need to be defined and broken down.  That’s one place where government could possibly help.  But even more importantly, we need to make sure that all graduating seniors that want to go to college get the opportunity to go without being burdened by a lifetime worth of debt.  More kids going into college in 2011 means fewer looking for a full time job, and more openings for older adults who need jobs.

Ok, nothing is solved in September 2010 by increasing college attendance in 2011, but it could help the unemployment rate next year a bit.  If there is really an effort to increase post-secondary education over the next few years, we might yet again achieve full employment in the United States, with the unemployment rate down around 4%.  Right now we’re near 10%.

If our federal government is going to throw money around and not help more kids go to college, shame on them for overlooking the one, and probably only, area that can be helped by government.

Please note that I have a child in college now and another one going next year, but I really don’t think I would be helped much directly by new education programs.  My thought is to help our society as a whole by making positive changes with education.

climate-changer.com

There is nothing wrong with a little analysis.  Until it becomes analysis paralysis.  Ultimately, in the end, you must take some sort of action.  A decision not made is a decision made for you.

This is especially important when you are trying to decide what direction your company should take.  If you have employees, they are looking to you for leadership.  You set the direction and communicate it to the troops.  They execute their job functions to push the company in that direction.  Lack of leadership usually means that nothing gets done.

If you are just starting your own business, you may have several different business options you are considering.  My advice?  Take action and set off in a direction.  If it is the wrong direction, you start over with a new opportunity.  Taking weeks, months, or years to make a decision means that you don’t start a business for that long and you could be spending the time learning.  Yes, there is some expense to making mistakes and setting off in the wrong direction, but indecision can be far more costly.

Spend some time doing research about what your choices are, which ones have merrit, and any other information you find pertinent, but give yourself a deadline for making a decision.  Then take action!  Do your dream!  Go for it!

matchstic.com

Courage is being able to do something in the face of obvious danger.  I have been discussing some politics the last couple of weeks and the main thing I wish is that politicians would have the courage to do the right thing in the face of political pressure to do the wrong thing.  Sometimes people get it wrong.  Especially masses of people who develop a mob mentality about a particular subject.  Unfortunately, we the people elect politicians.  It is a blessing and a curse to live a democratic society.  On the plus side, we help decide public policy so there is no taxation without representation.  On the minus side, we live in our own little worlds and often do not see the bigger picture.  That’s why the President and members of congress need to have the political will to set a particular direction and communicate the need for the direction to the people.  President Kennedy said that we need to go to the moon, not because it is easy, but because it is hard.  Political courage and leadership does not exist like that today.

There are three kinds of people when it comes to courage.  Those who lack courage, those who act knowing the dangers, and those who act because they have no clue or choose to have no clue.  The first group we call workers who trade their time for money because it seems like the safest way to go.  The third group is probably the most likely group to contain entrepreneurs because they act with no sense of danger.  The second group probably contains business manager types because they feel the danger and seek to understand it before acting.

As an entrepreneur, you want to try stuff knowing that you’re going to fail 90% of the time because there’s really not that much to lose.  But knowing that you’re going to fail means that you must be working with a net.  You must have a fallback position to take when everything goes to hell in a hand basket.  Even after you start succeeding, there is a danger that things will fall apart, so your fallback must be there probably for the first 5 years of a successful business.  After that, you must become a business manager.

Making the transition from an entrepreneur to a business manager is a tough one.  Often entrepreneurs will build their business to a certain point then sell it to a business manager, or hire a business manager to run it for them.  Very few non-manager entrepreneurs succeed at being a business manager… but personally I would try.  Of course I have my MBA so I do know what it takes to run a business… I am an entrepreneur because I try and try and try again, regardless of how many times I fail.  Not too many MBA’s are truly entrepreneurs, but I was an entrepreneur before I was an MBA, so I haven’t been tainted by the education.

Normal people do have things that they don’t want to lose.  You have your home and your family.  You drive a nice car.  You take vacations every spring.  Being an entrepreneur will take some sacrifice.  No doubt about it.  But you want to do things so that you don’t end up falling to rock bottom and losing everything you have.  You can start your business while you are still working.  You can separate your business from your personal finances (recommended).  You can set up an emergency account.  Or you can think of some other way to create a safety net to catch you when you fall.  Remember, you are going to fail, so be ready.

If you work a normal job, I applaud you.  You have much more courage than I do my friend.  You depend on one employer, who on a whim could wipe out your whole division and put you into the unemployment line.  Just like mine did last spring.  I was lucky enough to have a consulting business that caught me and has been supporting my family the last two months.  I didn’t think it would but I found out how many friends I had, and how much business I could really generate.  I depend on myself now, with the help of a few friends, and I see business into the forseeable future.

Are you still worried about when the pink slip will come?  I’m not.

solidprinciples.com

Several things have to happen for me to decide to hire: 1) I have to have the business to support the new employee, 2) I have to have work for that new employee to do, 3) I have to be able to know that the employee is doing an appropriate amount of work, 4) I have to be able to find a qualified person, 5) I have to have no other choices.

I have to have the business to support the new employee. For my consulting business, I need a new project that I can place an employee at, that I probably cannot take on myself with my current workload.  There may be a day when I hire to support the consultants in the field, but right now it’s about getting business that a new consultant will do.  Getting this business may be about proper marketing and sales, and I am not sure what our government could do to help me get new business except for overall growth in the economy.

I have to have work for that new employee to do. Today this means getting that new project.  Tomorrow it may mean supporting the business by answering telephones, filing, paperwork, and billing.  There has to be some need to fill.  Government is not going to create needs within my business to fill unless they make things more complex for me, meaning that I am hiring to do things that will not add value to the business.  Adding value makes me more money, adding complexity and administration ultimately helps nobody.

I have to be able to know that the employee is doing an appropriate amount of work. People are different.  One may love to work and will get tons done and another may have many distractions and will do little for you.  While you don’t need to crack the whip, you need to be aware of what value employees are adding to the business, or if they are just dead weight around your neck.  They do not have the motivation (profit) that you do, and there is nothing you can do to change that.  Even something like profit sharing will mean nothing if the employee does not feel that they contribute to profit.  They can and often do, but that can be difficult to communicate.  So employees do need to be managed.  In my case, I might just call them regularly to see how everything is going or follow up with the client.  Not sure what government can do to help me manage employees.

I have to be able to find a qualified person. As much as some people would disagree, it can be extremely difficult to find the right person to fill an opening.  In the past few weeks I have been trying to create a network of people I am willing to work with and I have asked for resumes of potential consultants for projects.  I have gotten one resume.  I have also asked people flat out, people I know are being cut from their position soon, if they would be interested in doing consulting for my company.  I have actually gotten very little interest in return.  I tried to fill a marketing position with an independent consultant and spent weeks trying, and finally I found somebody but why is it so hard?  It might be my particular small business that is not appealing.  However, with 10% unemployment in this country you would think people would be jumping at a potential job… and note that I have been extremely negotiable on salary or rate… The problem is that there is a shortage of qualified people for knowledge jobs.  Government can help by getting more American citizens trained.  There are so many people who want to go to college, or to be trained in other ways, but they are frightened by the costs.  And they should be.  Who wants to wind up with $100,000 in debt for a BS?  We need more of our population educated, and not loaded down by all kinds of debt.

I have to have no other choices. I am not going to hire a person where I can easily do the task myself.  Or maybe I’m overwhelmed by admin today, but I can improve my situation with technology.  I don’t want to spend money for an employee to do things that can be handled a different way.  Even at $10 per hour, an employee ultimately will cost at least double that with employer-side taxes, unemployment insurance, benefits, office space, computer, etc.  So if software means that I don’t have to hire, software it is.  Spending $5000 on software to avoid a hire will pay for itself very quickly.  Because of technology in the past 20 years, many manual jobs have been eliminated.  And businesses have benefited in productivity.  Goods of all kinds are much cheaper than they used to be because technology has helped us squeeze out costs.  This is all good except for the people who have not been retrained for doing thinking jobs rather than muscle jobs.

As I said last week, complexity is business’s enemy.  But the enemy of the American economy and the reason for high unemployment is the severe lack of skilled workers and the overwhelming numbers of unskilled workers.  We need to do much more for the individual who wants to be educated so they can get what they need and not be burdened with a lifetime worth of debt.

One thing that might help is if more (or all of an education) could be paid with Stafford loans with their current rules.  We could even eliminate subsidized Staffords.  With income sensitive repayments, students are only on the hook for 15% of their income over poverty for 25 years with the remainder of the loan forgiven.  If somebody is extremely successful, the loan is repaid.  If not, they are not overburdened.  It’s really not about helping the individual student, but about helping business, society, and the American economy become stronger.

What do you think can be done to improve conditions for small business now or in the future?

thewhitedsepulcre

I am a small business person now.  I have my own consulting practice and two clients.  I live comfortably and make enough money, although I could always use more.  I make nowhere near $200,000 per year in realized income.  If I did, I really wouldn’t mind sharing more of my income with the federal government, as long as they were using it wisely.

Realizing or showing a $200,000 personal income usually means you’re spending too much.  Your fixed expenses are high.  Maybe you’re living in a million dollar home with a big mortgage.  Maybe you have an expensive car you’re paying for.  Something is causing you to spend a lot of money.  Because I know that if you don’t need to realize a high income you won’t.  You can put as much as $42,000 year year in a 401k.  You can hold money in your business if it is a corporation (and pay corporate taxes on it), unless you have a subchapter S corp.  Even still, you have so many business expense choices to keep you from realizing an income as high as $200,000.

The real killer to the small business person is administration time, the stuff we don’t know, and the stuff that could change.  If you want to do me a favor, get rid of the complexity so that I don’t have to spend so much time working on my business administration and trying to figure out what the tax laws really say.  Do I really need to put an attorney on retainer or use a tax accountant?  I cannot possibly afford either’s fees, so I have to do it myself.  And that takes time away from billing my client and making more money for my business.  This brings down my income much more than a tax increase would.

So to the politicians who say that the small business guy making $200,000 can’t afford a tax increase, you’re probably right.  But it’s his own fault that he can’t afford it.  Otherwise he wouldn’t be realizing that much income.  The vast majority of small business people, though, make nowhere near this.  Some are by choice but most are because they are struggling to get by.

If you really want to help the small business person, the ones who provide most jobs to the economy, make it easier for us to do business.

New companies often avoid marketing.  Or they see sales as marketing, or advertising as marketing.  I hear many people talk about internet marketing, which is actually advertising.  They are getting their message out to a mass audience hoping to get a few leads that they can sell to.  Internet marketing often encompasses marketing and sales directly to the customer, without much effort from the company beyond creating the web presence.  Individuals and companies often sell on the internet without really doing any marketing at all.  I call this brute force selling, not really having a marketing strategy (or having one that came from the top of your head) and just getting a message out there that may sell your product to people.  You might get some feedback from friends about your selling method and make changes based on that feedback.  The feedback is a shallow kind of research but can be very helpful to improving you message.

So you can create a company and do brute force advertising and sales, and you might get lucky.  Or you can learn a lot about the kind of product you sell, the types of people who may be interested, and the messages they will be looking for.  There is a ton of free secondary information on the internet that can really help, but it will take time to wade through it all.  Better than google searching for information is using an article database that specializes in business information.  I typically use the one that I have access to via the University of Phoenix, but I believe you can also pay for access to these article engines.  A couple that I use are EBSCOhost and ProQuest.

Secondary information is articles and research papers, which often refers to primary information.  Primary information is when somebody does direct research with consumers to get a good idea of their preferences.  Primary information often tries to prove or disprove a theory, leading to a confirmation (or not) of a belief.  Primary information can be acquired but is costly, but secondary information is plentiful on the internet.  And the more different articles you get that say the same thing, the more you can feel comfortable that the information is accurate.

All of this information and research can give us good ideas about our marketing strategy, but we have to test this information against our company mission and values and make sure it makes sense.  Assuming it does, we can make sure our advertising and sales processes agree with our marketing strategy.  We may also want to change other things about our company based on what we find out.  For instance, if the kind of customer we sell to expect exceptional customer service by telephone, we need to make sure we are prepared to help our customers in this way.  All of our company processes should be customer-centric, and our marketing research and strategy can be the test to make sure they are.

Now marketing may be blah, blah, blah to you… but it really can help create a focus for a company to make sure the customer comes first, last, and always.  Then sales just start rolling in, and it all seems easy.  Rather that the constant beating your head against a brick wall to make the sale.  Marketing makes a huge difference.

women-unlimited.co.uk

I know that a lot of you are struggling to get your business off the ground: get your first sales, get a little growth in revenue, perhaps hire your first employee.  It is always a struggle to get things going, but sometimes you will have a situation where you will get more business than you can possibly handle.  I have written about our experience with this kind of problem, where our business growth was somewhat out of control because of being listed on Yahoo, but I have also run across another business that had the same situation.  It was a one man shop that brokered logistics services.  The owner ran across some government business, wound up selling millions of dollars, and had a very hard time dealing with it all.  Last year the company grossed between 10 and 15 million dollars with probably half of that gross profit before salaries and such.

The company has only been in business 7 years, since 2003.  The owner is an exceptional sales person but in 2000 – 2001 was basically broke and penniless.  He sold used cars to try to earn enough to support his family.  He also waited tables.  This all happened because the great MLM business we were all doing had collapsed.  Where I went back to work, he had to start again from scratch.

Today the owner of this logistics company has 7 acres of property on a river in Florida, a boat, jet skis, a golf cart to get around his property, a 2006 corvette, a brand new Cadillac Escilade, and two other cars.  He also owns several investment properties.  All of what he has is fully paid for, no debt.  Plus he has enough in secure investments to provide him with income for the rest of his life.  In fact, he bought the Escilade with his American Express.

The business now has 5 total employees: all of the labor, trucking, and other work is brokered out to other companies.  It is still a lot of work and the business has challenges.  After several years, the business may be losing the government work that made them so incredibly busy.  Since they started getting the government logistics work, they had not sold any additional work because they were so incredibly busy.  Now they must devise a strategy and build a sales team and sell again, but motivation to rebuild is definitely an issue.

If you find yourself in this kind of situation, there are people who can help.  I know that you may be an entrepreneur and a sales person, but not a business manager.  You may have a hard time trusting people because you’ve been burned.  I understand.  There are people who can help and I can definitely put you in touch with the right people to help you with your problems.  People who are trustworthy and who will really help, and will help you feel comfortable that you are really going to be helped and not leached upon.

Business consulting is not cheap but will pay dividends.  It will help you get control of your business, your personnel issues, and your business problems.  You will sleep better at night and have the time to think for 5 minutes.  The right business consultant can help you get your business growing again.  And consultants are like temps, they take no benefits and go away once the project is complete.  No need to fire them.

freelancefolder.com

In a job, you typically sell your time for money.  The employer really wants the product of your labor, but pays you on an hourly basis.  Now some people are lucky enough to also be bonused or commissioned based on the results of their efforts, but most people just trade their time for a paycheck.  In multi-level marketing, we called a job Just Over Broke, because you can never really rise above your circumstances by working harder or doing more, and you can’t multiply your “profits” by using technology or brokering the efforts of others.

In my current business, I am actually selling my time for money, but because I am more like a temporary worker, I can get a higher hourly rate and hold back money for when I am not working.  I have also sold more work than I can possibly do, so I am brokering my work out to others in exchange for a small portion of their hourly rate.  I can also get excellent people that are extremely specialized, so ultimately the client will be happier than if I had done the work myself.  It is not always easy finding the right people, but doing this kind of business means that I earn some amount of residual income from my efforts.  Residual income means that I might earn for a month, year, or five years from my efforts today.

My focus is helping my client do what they want to do and I go above and beyond the call of duty to make that happen.  But ultimately the work is performed by others.  So I can spend my time selling work and putting together deals, building my business to an unlimited size, rather than selling my own time where there is a limited amount I can sell.   Selling time for money is a great way to start a business, don’t get me wrong, but ultimately it is a dead end that you need to move away from.

Do you still sell your time for money?

mabryonline.org

I am sorry to have to say this, but I am going to have to get away from my daily postings on this Small Business blog. I simply am too busy right now with consulting. Consulting has been wonderful because I have been unemployed now for 4 weeks and am busier now that at any other time in my life. I really enjoy doing it and I plan to continue for as long as possible.

I am changing my editorial calendar so that I am posting once per week on Monday, but I will not be posting the remainder of the week. The good thing is that it will be all original content, and be written by me, but I will not be using the youtube videos, writing business poems, or posting Dilbert on Sundays. This will strictly be a business blog with content written by me.

I do appreciate my readers and I hope this will be a welcome change. Please let me know what you think.