rants | Paul Wallbank - Communications Professional

So you want to be an entrepreneur?

Do you really want to start your own business?

There’s a school of thought that starting your own business is the passport to independence from the rat race or liberation from the servitude of employment.

A lot of blogs, books and writers encourage this idea and there’s no shortage of multi level marketers telling you self employment is the pathway to wealth and status.

On his Planning Business Stories blog, Tim Berry looked at one of the other sides of self-employment, that you’ll become unemployable.

Tim’s observations are right, but there’s a few other downsides to consider before trashing your cubicle, cashing out your savings and establishing that radical startup or buying a doughnut franchise.

I don’t want to work for a boss anymore
If you think your boss is an unreasonable swine wait until you deal with customers, particularly those who don’t pay their bills. Then there’s shareholders, business partners, suppliers and the taxman.

You’re leaving the rat race
No you aren’t. As a business owner you’ll find there’s a lot more rats than you thought when you worked for The Man, as the man employs lawyers, debt collectors and HR staff to deal with the rats.

The sad thing is you’ll probably end up being even more in the rat race, it’s just that you may not realise you’re racing the other rats as you aren’t stuck in traffic with them anymore.

I want to be the boss
That’s a noble and fair aspiration. Just be aware that in your own business, you take the risks and responsibilities too.

The boss at BigCorp can often mess up and move onto bigger and better things as the organisation is usually big enough to hide the mistakes and it’s often in senior management’s interest to hide their subordinates’ mistakes from the shareholders or taxpayers. In your own enterprise, it’s your own assets at stake.

I’ll get a better share of my rate
A common gripe with skilled workers, like plumbers and lawyers, is they get ripped off by their employer who pockets 3/4 of their hourly rate.

When you start your own operation, you’ll learn the existence of overheads and soon realise why you were only paid a quarter of what you were charged out for.

The only way to get rich is to work for yourself
Kind of sort of true, except there’s a big survivor bias in that saying. The people who do really well out of building a business receive accolades and boasting rights, those who don’t get quietly on with their lives if they are lucky.

In a capitalist society we reward risk, and the biggest risk you can take is setting up your own business. If you’re successful you’ll be rewarded, but the risk of comparative failure is high which is why successful entrepreneurs get more money and accolades than successful managers or politicians.

You’ll work fewer hours
This is probably the greatest myth of all, usually perpetuated by someone selling a multi level marketing scheme. In truth, you’ll work longer hours and many of those will be unpaid as you chase up debts and fill in government paperwork.

On the rare occasions you do get to sit down and catch up on the news, you’ll learn to dread reports that the government is going to “simplify” or “reform” something. This will almost certainly mean more paperwork for you.

Keep in mind that no politician – be they Republican, Democrat, Conservative, Liberal, New Labor or Labor – is “business friendly”. At best they are sympathetic in the way a non-lethal host parasite is to a warm mammal.

You’ll never work in this town again
Tim’s article makes this point well, that if you spend any considerable time working in your own business – be it a startup, consultancy or small business – you’ll find it difficult to get a job in the corporate sector.

I personally found this after 12 years of running a moderately successful business, basically I was told all of that experience was irrelevant to a corporate management position. In big business terms, I’d have made a better career move if I had been driving a bus for those dozen years.

All of this isn’t to say you shouldn’t strike out and build your own business, for many of us it’s the course in life that suits us and what we work best at. But it isn’t the lifestyle for everyone.

We certainly shouldn’t be saying those who aren’t suited to this lifestyle are bad or inferior people; most folk simply don’t want to take the risks and demands on family, finances and nerves that running your own business entails and this is fair, sane attitude to take particularly in a time of uncertainty.

Successful entrepreneurs have certain skill sets and a focus which can be tough on families, friends and children. For many there’s an element timing and luck as well.

For the success of a capitalist society, we need to celebrate and reward the entrepreneurs and risk takers, but before anyone dives into a start up or small business it’s best to understand the risks and costs involved.

Good luck.

The good news story

We have some great tales to tell. It’s time to do it.

Last night, 700 children gathered at the Sydney Opera House for The Festival of Choral Music. Over the four days the event is run, over 2,000 kids will have performed in the choirs, bands and ensembles.

Why aren’t we telling these stories of talent, potential, happiness and beauty? Why are we bogged down in the negative, backward looking view of the world we see in much of our commentary of the world?

Maybe it’s time for a rethink about the stories we tell.

The Sleazy Carnival

Seth Godin set up a friends computer and found “the digital world, even the high end brands, has become a sleazy carnival”

Seth Godin set up a friends computer and found “the digital world, even the high end brands, has become a sleazy carnival” as he clicked his way through dozens of pop ups, offers and confirmation windows.

The only real surprise is Seth can’t have set up a Windows computer for some time as crapware has been the bane of IT techs for years. At the 2007 Consumer Electronic Show Micheal Dell notoriously pointed out this crapware was worth $60 per computer.

Dell’s point was valid in one respect; if you are selling at unsustainable price points then you have to do everything you can to improve your profit margins.

At the beginning of 2010, Dell find itself locked in the low value, low margin end of the industry with a declining market share at a time when US consumers are banging shut their wallets. It’s fair to say Micheal has reaped what he sowed.

It’s unfair to just single Dell out – cost cutting, upselling and downright double dealing is endemic in the IT and electronics industry and the vendors only have themselves to blame as they trained customers to fixate on price and then struggled to claw back a decent profit.

The tech sector has betrayed its customers and only has itself to blame for the lack of trust and declining profits.

Spam of the year

While cleaning out the IT Queries mailbox I came across a funny spam

While cleaning out the mailbox of IT Queries I found this among the spam messages;

HELP! I’m currently being held prisoner by the Russian mafia and being forced to post spam comments on blogs! If you don’t approve this they will kill me. They’re coming back now. Please send help!

Sometimes you can’t help but laugh.

The basics of service

Cathy’s saga shows how people skills are as important as competency when you’re running a service business. You need manners and respect to match your skills.

Of course, if you don’t have any skills to start with, you might want to consider doing something else.

Recently I wrote about the things you should look for when choosing an IT service provider. Shortly after writing that column I caught up with Cathy (names changed to protect the guilty) and found out what happened in her search for a tech.

The results weren’t pretty and the reasons why are a lesson for anyone in a service industry. Let’s start with the most fundamental.

Respect
I find it hard to believe I actually have to write this, but I’ve seen it too often myself. Cathy’s first computer tech treated her with contempt and didn’t listen to her problem and needs.

You might think your clients are beneath you and maybe you are right. After all, that dumb customer doesn’t know how to use a mouse, fill in a BAS, fix a cistern or carry out root canal therapy.

But that dumb customer also pays your wage, so quit the attitude and show some manners and respect.

You should also respect your competitors, a point I forgot in last week’s column. Scoffing at the previous guy’s work is bad form and good clients will show you the door if they have any sense.

Competence
Don’t take on jobs you don’t understand. This is particularly common with computer techs who have a habit of saying: “yeah, I can fix anything” when a client calls.

In Cathy’s case she had a Windows 2003 Small Business Server which superficially looks like Windows XP but is a very different beast under the bonnet. The tech was experienced enough to know better.

Funnily, the tech I referred to Cathy declined the job because he felt her requirements were outside his skills. If the first guy Cathy called had shown the same humility and competence it would have saved everybody a lot of distress.

Appearance
In an industry known for cowboys, wearing boots that would look straight out of Rawhide is a big mistake. Clients are conservative creatures and many will turn away if you are too different to their expectations.

Dress how a customer expects you to dress- an accountant wears a suit, a computer tech has the blue shirt, dark pants combo and a bricklayer wears a pair of stubbies revealing more than you care for when the brickie bends over.

When you’re in an industry where people are afraid of being ripped off, showing up in a flash car confirms their fears. Leave the Porsche at home and show up in a cheap hatchback, the things are easier to park anyway. As you’ve probably guessed, Cathy’s tech drove up in a Mercedes.

Billing
Last week I advised avoiding the “no fix-no fee” crowd. However, that’s different from standing by your work.

If you’ve screwed up, as Cathy’s tech did, then bleating: “I sweated for you” is plain silly. If the customer is unhappy, waive or discount the bill.
Sure, sometimes you end up copping the pain when an unreasonable customer complains but billing issues are a reliable early warning a client is going to be a major pain. Refund their money and get them out of your lives.

The story does end well though. Finally Cathy found someone who was polite, competent and barely raised an eyebrow when they saw the mess made by the first tech.

Cathy’s saga shows how people skills are as important as competency when you’re running a service business. You need manners and respect to match your skills.

Of course, if you don’t have any skills to start with, you might want to consider doing something else.

Why innovation rises during a recession

Steve Lohr in the New York Times looks at how innovation rises in downturns. Are the various stimulus packages a roadblock to innovation?

Steve Lohr in the New York Times reports R&D budgets increased for 900 of the United States’ 1,000 largest corporate spenders on research and development.

What stands out is how patent applications rise during economic downturns with an increase of 25% in the 1929-32 period. Steve goes on to point out;

The Depression years yielded fundamental advances in technologies of the future like television, nylon, neoprene, photocopying and electric razors, according to the Thomson Reuters analysis.

A similar trend is true around later, far shorter recessions, when basic work on personal computing and later Internet-related technologies were done.

In this respect, economic downturns are necessary as they clear out the old, inefficient industries and allow new ideas and businesses to take hold.

While governments had to do something to avoid a massive depression when the capital and trade market froze in late 2008, is the propping up of debt laden industries like banks, housing companies and auto manufacturers going to act as roadblock to new ideas and businesses?

Just a thought.

The Depression years yielded fundamental advances in technologies of the future like television, nylon, neoprene, photocopying and electric razors, according to the Thomson Reuters analysis.

A similar trend is true around later, far shorter recessions, when basic work on personal computing and later Internet-related technologies were doneThe Depression years yielded fundamental advances in technologies of the future like television, nylon, neoprene, photocopying and electric razors, according to the Thomson Reuters analysis.

A similar trend is true around later, far shorter recessions, when basic work on personal computing and later Internet-related technologies were done.

The fires of failure

At last night’s Mobile Monday Sydney, I was a chatting to a serial entrepreneur about business success and failure. One thing we both commented on was just how important failure has been in the process.

At last night’s Mobile Monday Sydney, I was a chatting to a serial entrepreneur about business success and failure.

One thing we both commented on was just how important failure has been in the process.

The main thing we’d both taken from the stress and heartache of being in a failing business you learn who your real friends are and how they can be trusted in a crisis.

Some of your friends turn out to be totally rock solid while others go to water. A few surprise you with unexpected talent and genius while some disappoint you at critical moments.

Whatever happens, it’s a great test that help you select the right people for future ventures.

I have to admit it must be nice to hit a home run on your first business venture and be lauded as a genius for the rest of your life, but for most of us mortals failure is part of the learning process and often it’s a painful but essential lesson.

Criticism

One of the odd things about people criticising you on the Internet is how often they read the wrong things into words.

A case in point are the replies to this Smart Company column.

The funny thing is I agree with every point he makes and if he left it at that all would be sweet and the reader better informed.

But he doesn’t and he drops this little bomb;

The notion that it “cost them nothing” is also misleading as unless you think though the consequences of beginning such engagement, say through Twitter, then it can cost you a lot more than you are prepared to give.

Misleading?

Accusing a writer of misleading readers is pretty serious. It’s even more galling when the quote is taken out of context.

This is the strange thing about the Internet, people do silly things and it hurts their credibility.

The Future Summit 2: Artificial divides

I took a lot from the Melbourne Future Summit, many good and some worrying.

One of the worrying aspects was the hostility from the “creative thinkers” towards Engineers and scientists.

I took a lot from the Melbourne Future Summit, much of it good and some of it worrying.

One of the worrying aspects was the hostility from the “creative thinkers” towards Engineers and scientists.

This was apparent in the Innovation Imperative seminar where many of the panel’s and audiences’ comments were notable for their hostility towards Engineers and scientists along with their view it was time for some “creative thinking”.

Most of questioners from the floor went as far to blame Engineers and scientists for the Global Financial Crisis.

This is odd as scientists and Engineers are no more responsible for the banking sector’s financial engineering any more than artists are responsible for the bankers’ creative accounting.

Creating artificial barriers between “creative” and “scientific” thinkers is dangerous and foolish. Our greatest Engineering and scientists are creative thinkers by definition. Many great artists have applied science to their work.

If we force people into these pigeon holes where an Engineer can’t be creative and an artist can’t use science then we are all the poorer for it and less equipped for the challenges ahead of us.

Computer hostility

While at the Sydney CeBIT last week, a speaker made a comment about how getting managers to accept social media is a big step given many proudly complain they know nothing about computers and care even less.

A few days later when flying down to Melbourne for the Future Summit, I read an article by Glenn Wheeler telling how he smashed his computer after getting a virus, an act he said “sent a warm feeling through my body.”

Bizarre.

I’ve long lost count of the people who tell me they are proud to know nothing about computers but I still get rattled by people who are openly and proudly hostile to technology.

The problem for these people is they are being left behind, just like the Luddites they are well on their way to becoming a historical curiousity.

That’s fine for Glenn and other individuals, it’s good not to know anything about anything if you wish to be ignorant. But a business that chooses to ignore technology is quickly losing ground to smarter competitors.

Ignorance isn’t a good look at any time, but it’s even worse when it’s killing your business.

The bravest man in Australia

Federal Finance Minister Lindsay Tanner

Federal Finance minister Lindsay Tanner’s now repeated claim the “worst is over” will either make him a prophet or a fool. Either way, he’s pretty brave to make that statement.

What makes his courage even more impressive is his belief is based on IMF, Treasury and Reserve Bank advice.

These three groups, along with almost the entire economic world, failed to see this crisis coming and have consistently understated the effects since it arrived.

For Australian business owners, more worrying should be policy responses of our politicians.

While China’s stimulus package includes funding for building railways, roads and hospitals, Canberra’s response is to repeat the mistakes of the previous government by ramping the property market.

To compound the problem, the Federal government seems obsessed with keeping Australia in the 1950s. While the Chinese government is encouraging investment in the IT industries, we’re pouring our resources into propping up a vehicle manufacturing industry.

Even worse is the NSW Government’s blind faith in the ratings agencies. It’s a shame Nathan Rees won’t show Lindsay Tanner’s courage in telling these corrupt and incompent fools where to stick their phoney triple A ratings.

Instead he chooses to further reduce our investments on infrastructure and the state’s future.

The lesson to business owners is clear; you’re on your own and you cannot expect any help from the state or Federal governments.