Andy Powers-A Professional who cares..About YOU!
Surviving a Depressed Economy-Starting Your Own Business
The Bureau of Labor Statistics reported on November 7, 2008 that, according to household survey data, the number of persons unemployed in America is now a staggering 10.1 million persons and getting worst. In the month of October alone, the number of unemployed Americans increased in 2008 by 2.8 million persons, with 603,000 in the month of October alone. Analysts predict this number to increase by AT LEAST an additional 500,000 before year end! NOTE-As of December 5 this has increased by November 30!
For many Americans, starting their own business may be their best and only option for economic survival in order to prevent losing their homes, cars and other possessions which are, for many, financed to the maximum with property values declining to the point where the value of the property is now less than the amount owed! Additionally, and so vital to the American economy, is the fact that still today, 60% of all jobs are created by small businesses. This is why it baffles me so, that our Government has decided to pour nearly a trillion dollars of OUR taxpayer money into big business while providing no relief for entrepreneurs and small business owners. According to a statement made by Donald Trump last week, while we were told that our money was invested into large banks as Preferred Stock (with no voting rights) for the purpose of being used to reinforce the business and housing economy, banks are refusing to loan out this money for business deals and other purposes to people with perfect credit. In that interview Mr. Trump stated that they are even reneging on loans to which they have already issued commitments!
Starting and owning a small business is probably the most difficult thing you will ever attempt however it could turn out to be better than any job you could imagine. Unfortunately, without a well thought out written business plan and vital information this may well be a financial disaster. This is why Powers & Company is working diligently on preparing Guides to surviving self employment with invaluable information based on questions asked and advise given to self employed clients over decades, which could ensure the success of your business and prevent financial disaster. These guides may be purchased by clicking on the links of our home page or simply by clicking on this link.
In addition to these information guides, I will also be exploring a variety of small business opportunities which will be reviewed on in this site. It is CRITICAL that you fully comprehend the legal, tax and economic ramifications of going into any type of business which is what makes our guides to crucial for your entrepreneurial success. However, this is information you need to know BEFORE you leap into any business opportunity and should only be used as your personal information guide to prepare you for planning your business venture and is not intended to provide legal, tax or financial advice which, again, you should do prior to forming any business or entering into any financial transaction.
Although not intending to be exhaustive and all inclusive, let me share with you now some of what I have seen which has caused businesses to fail (and many jobs lost) over the years that I have been in business.
Inability to balance right and left brain functions: By this I mean that I have met many small business owners, as well as many senior corporate executives, who make business decisions (like what type of business to go into and which to avoid) based on ego or emotion while failing to investigate or ignoring the facts and advice of others. Now, before going any further, I am well aware of the analogy of "crabs in a pot" where people are like crabs trying to climb from a pot of hot water while other "jealous" crabs are trying to drag them down as well as sayings like "winners win because they don't quit, while losers lose because they quit before they have a chance to succeed". I couldn't agree with these sayings more; however they should not be the only decisive factor in making a business decision, as I will explain below.
Unfortunately, I have seen many people invest thousands of dollars, sometimes their life savings and even mortgage their homes to the max) in order to start or expand a small business only to end up losing everything while the only persons who made money were those who sold them the business, or business concept and the employees who they hired to work for them. Unfortunately for the employees, when business turns sour, they end up collecting unemployment benefits as well (assuming they are covered as employees and not self employed independent contractors who can't collect unemployment benefits).
Too often people with no business experience make emotional decisions without taking the time to research the business, learning the facts concerning business ownership responsibilities, and forming a business advisory council from whom they can evaluate their input and suggestions. I have seen people convinced to invest hundreds and sometimes thousands of dollars and a lot of time getting licensed as life insurance agents, registered securities representatives or signing up as a sales representative for a wholesale business where they purchase huge inventories of products "that people already use" but are convinced that these consumers will buy them from them because they give them the opportunity to make money by selling them to others. The sellers of these business concepts always introduce you to the top guy in the chain who was once poor and is now making "millions" after joining this business, and they are always told the story of "crabs in a pot" and discouraged from listening to advice from others because it is human instinct for poor people to want everyone else to be poor as well and not to succeed. Without exception, they suggest that these people purchase and read books like Think and Grow Rich, by Napoleon Hill, or Pushing Up People, by Art Williams. The simple truth is the majority of people who go into these businesses almost ALWAYS fail, while those who sold them the business concept (up the chain) always make money on the backs of others.
I have seen people who have a passion for food decide to open a restaurant or a deli, and spend huge amounts of money entering into a lease, remodeling the premises, purchasing or leasing equipment and furnishings, advertising, hiring people, purchasing inventory, etc. I have made a game of spotting these establishments and predicting just how long it will take for them to close their doors. I don't do this with malice, however rather to see if I am right or wrong. A decision to open a new restaurant or deli should be based on factors such as having potential niche market (the kind of place that others have not opened in the area BUT there exists a NEED or that people living in the area want and will continue to want and continue to return). An example (for success) is a Latino cafe located in an area where the population of Latinos is steadily increasing. If the establishment offers genuine authentic Latin food that this new populous will appreciate and be able to afford they will patronize the establishment on a regular basis and bring their family and friends. On the other hand, in an area already populated by Americans of Italian decent, who are accustomed to authentic Italian food, in which there already exists several restaurants offering good Italian food, at prices people are willing to pay for accompanied by the service they have grown to expect (and they have grown to know the owners and establish customer loyalty), there is no compelling reason for them to search for a new place to eat Italian food and therefore, unless the new establishment offers some special added value and can attract and retain customers, the business is doomed to fail and the investment lost.
These are only some of the factors involved in making prudent business decisions. However, if you have decided you are going into business for yourself there are things you need to know in advance which are available in this web site.
One final point is that I caution you about making business decisions based on free advice from others, including retired executives, who will not be involved throughout the entire phase of your business and know only what you tell them. While they may be an "executive of a large corporation" that may not qualify them to give advice to a small business entrepreneur nor does it mean that they are familiar with the business economics of your community. This is why hiring a seasoned small business advisor who is familiar with your location, your industry, your business and you personally is so vital.