Categories
Small Business Work

Start Your Business Tomorrow

Many of my readers desire to work for themselves, either by building a business or starting some kind of side hustle. However, out of 100 people who say they want to start a business, maybe 1 actually does.

The problem is people put too much pressure on themselves. They look at their desired end state from miles away and fail to take the first step. Frankly, it’s daunting. Where do you start?

A business is formed by pushing an idea into the marketplace and adjusting based on feedback.

People also over-think what it is they want to do. Instead of thinking like a startup, they think like an established business with 50 employees. Instead of starting with a single action, they ruminate over the 100 things they’d like to do.

Often, the best businesses start off as a single simple idea. Forget the plan for the future. Instead, choose your mission and pick a single task to help bring that mission to life. Most importantly, take action. Don’t strive for perfection – there’s no such thing. At the beginning, action is your success metric.

Here’s the thing: businesses aren’t built on a linear path. Many successful businesses end up being quite different from the original idea. A business is formed by pushing an idea into the marketplace and adjusting based on feedback. Of course, I’m not saying someone doing web design for local retailers will end up manufacturing next gen batteries. There has to be some continuity around the mission. Instead, it’s the delivery that adapts.

A web designer providing services to local retailers exists to help small businesses. Perhaps they start by offering web design services, but discover that sole proprietors need full marketing services or staffing assistance or who knows what else. Or perhaps the web designer starts by providing customized services to local retailers, but then builds pre-made DIY templates that can be used to drive world-wide ecommerce.

Of course, none of that would happen without taking the first step of approaching the local sushi shop that lacks a basic web presence.

Stop thinking about the business you want to build. Instead think of the purpose you want to serve, the skill you want to share or the mission you want to accomplish. That becomes your centre of gravity. Allow the supporting activities to evolve as you test out your idea.

Now pick your mission and identify one way to move your mission forward. And do it tomorrow.

Categories
Small Business

Why I Would Never Start a Bricks and Mortar Retail Business

Those of us growing up watching sitcoms like Friends have, at some time or another, had the thought of starting a cozy coffee shop. Running a local gathering spot, hanging out with customers who become friends, toying with decorating ideas and promos, picking the music playlist…it all sounds more like fun than work.

Central Perk Coffee Shops Are One Step Closer to Being a ...

Others have romanticized about boutique clothing stores, cannabis dispensaries, record stores and so on. The dream of opening a sweet little local spot sounds great, assuming everything falls into place. However, so many things have to go right in order for a bricks-and-mortar retail store to succeed.

The problem with physical retail is that you can have a great idea and a viable business but still fail.

==> A great business in a bad location will fail.

==> A great business opened off season or at the wrong time (e.g. when there’s road construction) will fail.

==> A great business not promoted properly will fail.

==> A great business with the wrong merchandise mix or pricing will fail.

==> A great business with weird hours will fail.

You get the point.

There are tons of ways a bricks-and-mortar retail business can fail, despite being a great concept. Of course, many of these problems are fixable over time. Unfortunately, the bills – rent, heat, hydro, staffing, etc. – don’t stop while you figure things out. Once the doors open, the countdown to bankruptcy begins.

Even if you luck out and successfully launch a bricks-and-mortar business, you’re still vulnerable to the changing physical environment. I’ve seen numerous local business collapse due to unexpected traffic changes, construction or criminal activity. The obvious wild card today is the lockdown due to Covid-19. The pandemic simply isn’t survivable for many retail business, many of which existed for years.

Sweep away all the negativity for a minute and let’s say you manage to build a profitable retail business that survives for years. Believe it or not, you’re still probably SOL over the long run. Once a retail business becomes successful, landlords see the opportunity and try to grab a share of the profits by raising rent once the lease is up for renewal. I’ve seen landlords triple rents on successful small business, squeezing every drop from the business. Given this, even the most successful bricks and mortar businesses are fleeting.

The few small retailers that actually last decades often own their physical location. Unless you’re a national chain, there simply isn’t any other way around it.

I love the flavour local retailers bring to a neighbourhood. I enjoy interacting with proprietors and supporting these businesses with my money. However, I warn anyone expressing interest in opening a retail business with a physical location. The chance of building something long term is so slim it just doesn’t seem worth the effort.

Edit (October 8th, 2020): As I was walking today I remembered another major reason I would never start a bricks-and-mortar business. You need to be there ALL THE TIME. Depending on the type of business, opening hours might be 10-12hrs daily. That’s 10-12 hours a day, sometimes 7 days a week you need to be present, regardless of how sick or tired you feel. Have a migraine? Tough. Want to take a vacation? Tough. Bricks-and-mortar retail needs boots on the ground, and if they’re not the owner’s boots it can get prohibitively expensive.

Categories
Investing Small Business Work

The Great Wealth Transfer to Big Tech

Apple, Amazon, Facebook and Alphabet all reported blowout quarterly results this evening, with all beating analyst revenue expectations by billions of dollars. The market completely underestimated the growing market power these companies command.

This momentum – at a time when GDP declined by 32.9% – suggests the recent massive stock market out-performance of these companies vs most other companies might be justified. The economy has rapidly shifted from “face-to-face” to “virtual” and a relatively small proportion of companies are benefiting at the expense of the rest.

Much of this shift is permanent. I mean, virus or no virus, is anyone really excited about going to a fucking mall again? Or take the crowded bus? Even meetings are more tolerable now.

Nah, I’ll spend my commute time on doing something pointless on my phone, possibly even spending money. And when I’m working I’ll use MS Teams instead of airplanes to meet people. People and businesses have discovered cost savings they should have known existed.

And the companies that don’t benefit? Commercial real estate. Travel. Restaurants. All the places that sell the things we realized we didn’t need while under quarantine. Many are small businesses. Maybe eventually these businesses will recover, but until then it’s big tech’s time to gather all the nuts.

Is it any wonder why Amazon, Apple, Facebook and Alphabet have done so well? We’re witnessing a great wealth transfer to big tech.

Apple

Amazon

Facebook

Alphabet