Entrepreneurs accept greater risks to operate their own business. In return, successful entrepreneurs can enjoy greater independence over their activities, greatly increase their income, and gain greater control over how and where they do business.
Entrepreneurs: Is it Time for You to Start Your Own Business?
Prior to entering recruiting, I worked for two terrific consumer products companies.
I took pride in the leading brands that I represented. The travel was terrific. I loved giving presentations. On two brand introductions, I gave product presentations on a local television station. Additionally, I found joy in absolutely crushing the competition in shelf space, ad space, and in sales.
My Frustrations
However, I had two frustrations.
- Income: No matter how great my performance or the evaluations of my performance, there was little difference between my income and the income of my peers. At one company, I led in sales performance for 15 consecutive months and got the same bonus and same pay raise as everyone else. My first year at my second company, I led the nation in sales against quota. My bonus was 17% of my salary. The lowest bonus was 12% of salary.
- Location: Where my family and I lived had to fit the needs of the companies where I worked. I wanted the freedom to live where my wife and I wanted to live.
Self-employment provided me with these three things.
- Allow me to live where I wanted to live
- Connect with contacts and knowledge I already had and every year build on those relationships and that knowledge
- Tie my income directly to my performance
The Broker Business Model
The broker business model is simple. Brokers find a person with a need and a person with a product or service and make a commission from putting them together. Sales people have the straightforward opportunity to go from an employee to a broker entrepreneur, because they typically have an established network for connecting people who are in their business sector. Furthermore, they have the training and experience in selling products and services to the buyers who may be their future clients.
Furthermore, not just sales people, but many people have a network and the skills to meet needs within that network. For example, software developers have the skills to offer their service on a project basis. If a software developer or other highly skilled person has built a network in their field, they have a list of potential clients.
Given the power of Internet, entrepreneurs have the opportunity not only to sell products online, but the power to promote their business in social media and on their own business website.
For me, LinkedIn has proved to be a powerful resource for promoting my business.
- When I started my business, I enjoyed many of the benefits of an independent broker. I started with a network of people I had known from the companies where I had worked. Additionally, I had a network of people who worked for other companies the enormous consumer products sector.
- I did not have to have a warehouse for product inventory. As recruiter, I worked as a liaison between the hiring companies and the people I sourced and referred to these companies. I did not have the burden a storefront, warehouse, or inventory. For the first fifteen years in business, the only two things I needed were a phone and file card system for tracking candidates and clients.
Learning from Others
Meeting my first successful entrepreneur was a real revelation. Before becoming an entrepreneur, this person had a career in selling by-product waste chemicals to companies that used these products to make new products. The company where he worked was a multi-billion-dollar international company.
He took the risks of stepping away from a steady salary plus benefits in a large established company office. Additionally, he stepped away from the security of having a large company take all the risks and pay all the business expenses.
Today, the company that he founded is an international chemical company that sells a diverse range of chemical products.
The Securities of Self Employment
Job Security: If you want job security, be the best at exceeding the expectations of your clients or company. For example, if you are a salesperson, be the best at selling and delivering what people want. ~ www.jaywren.com
You may find that starting a company offers more security than getting a job. A member of my family was a successful sales person for a consumer company until another company bought his employer. He found himself in the same place in which many people find themselves. I had seen what happened to him also happen to other people.
Particularly during the last quarter of the 20th century, companies in every business sector were acquiring long-established companies. Another company bought his company, consolidated the operations, and eliminated positions.
Rather than pursue another job and face the risk of yet another job loss through an acquisition, he set up a brokerage operation for consumer products. He established contracts with a network of companies that would ship to and bill retail customers. He had no shipping or inventory complications. The companies whose products he sold paid his commissions directly to him. Thus, he did not have the burden of accounts payable for his buyers. Wherever he goes, he can stop in a retailer who sells the type of products he represents.
He quadrupled his income.
Service Companies
Not every entrepreneur is a sales person. Many entrepreneurs have experience in company operations. They can apply that experience to solve operational problems for other companies. First, you recognize a need, particularly a need where you have skills to fill that need. I once spoke with an entrepreneur who started a paper shredding company. He had worked for a large company that found it challenging to shred and dispose of documents. As he spoke with executives at other companies, he learned that his company was not the only company facing the challenge of securely disposing of outdated documents. He developed a system of shredding documents on site and then selling the shredded documents to paper recyclers.
Keep Focus. Stick to Your Sweet Spot.
Small companies should focus on goods and services that are in high demand in a specific sector or industry. As they don’t always broaden their product line or change their business model. However, these companies expand their company by finding new markets for their successful products. They cohesively work with a small product mix but find new sectors for those products.
In 1997, when Steve Jobs returned to Apple, the company was on the verge of bankruptcy. The Apple he had created in 1976 only made a few high-quality products. In his absence, Apple became a diversified. The company made dozens of products, some of which would never reach the marketplace. Jobs eliminated these products to focus on making a few exciting, high-quality products. Apple’s limited product lineup includes Mac, iPod, Apple Watch, Apple TV, iPhone, and iPad and a few effective software applications and cloud services.
Amazon started as an online mail-order book store. Today Amazon has the same business model. Amazon has added tens of thousands of new products. However, the company has cohesively stayed with the same online system that made them it successful initially. I remember reading articles about Amazon’s growth with a broader product mix. Writers questioned whether Amazon executives really knew the direction of their company. However, they went from a niche book seller, to an online superstore for consumer goods.
Realizing the need for online data management and storage for its own business, Amazon has added Amazon Web Services that enables other companies to use Amazon’s systems.
Today, Apple and Amazon are in the top five most valuable companies in the world.
Do Things You Love
During a terrific vacation in Hawaii, my wife and I spent a day on the beach. There was a beachside snack service and souvenir shop on the beach.
Later that year, my wife and I attended a comedy club near our home. Prior to the show, I chatted with the owner of the club. He told me that he had built his businesses on things that he enjoyed. Not only did he own the comedy club, he told me that he owned the souvenir and sandwich shop on the beach where my wife and I had vacationed. Having the two businesses enabled him to own a home in his hometown and a second home in Hawaii.
