Street Smarts

The best business education:
start your own business for under $100

by William J. Larsen

One of the articles in Living Business (IC#11)
Autumn 1985, Page 12
Copyright (c)1985, 1997 by Context Institute | To order this issue ...

Most of us are remarkably blind to the business opportunities that surround us. Here are some eye opening suggestions from an experienced small business educator and writer. Should you want to dig any deeper into this well of ideas, he can be reached via Life Success Systems, Box 1052, Bellingham, WA 98227.

It takes no great insight to see that we are living in a time of rapid change. Nowhere is this more obvious than in the world of work. Five years ago, when I began giving seminars on self-reliance, textbooks on the subject said that the average worker would face three major career changes in a lifetime. I predicted five. Last Fall, a Seattle newspaper article mentioned that the average worker now holds a job an average of only 1 1/2 years.

Our notions about livelihood are shifting, too, as are its patterns. Roughly 85% of the people who work for money work for someone else. They are employees. Psychologists estimate that perhaps as many as four out of five (80%) employees are actively dissatisfied with their jobs. Many people who come to me look to starting a business as an alternative. They regard their own business as a way to achieve happiness, to "take charge of their lives," to "demonstrate their effectiveness in the world," to find "fulfillment," and an assortment of other laudable and lofty ideals. The problem is: They have no background - and for good reason: Their "education" has been devoted almost exclusively to preparation for employment - to take orders and follow them, not to take initiative. (Every public high school graduate has been subjected to over 15,000 hours of conditioning for dependency.)

The result is a general feeling that one's own criteria can't be counted on (if indeed one knows what they are), that worthwhile work is invariably dull, that deviation from standard behavior involves "risk," that failure nearly always involves penalties, that organization is dictated by some Great Lesson Plan In The Sky, that the "average person" is powerless, that it's useless to try to change the System, and that it's "cheating" to look in The Back Of The Book for help of any kind.

The people I talk with are nearly all nice folks: Grownup professional men and women between the ages of thirty and sixty. They feel frustration about self-reliance (''What's going on?" "What can I do?"). They admit to ignorance (''How does anyone get ideas?" "What works?" "How do I get started?" "What do I do then?" "Where do I find experts to help me?" "Aren't they awfully expensive?"). They express fear: The oppressive and pessimistic fear of failure ("I know what to do, but I can't get started." "What if things don't work out?"). The equally immobilizing but optimistic fear of success ("What if it works? I want time for me, too!").

On facing unemployment, personal stagnation, or simple craziness, these folks may eventually risk asserting themselves, find and read books and articles or watch programs on entrepreneurism. In doing so, most become merely stimulus rich. They remain experience poor.

What is needed, I think, is a way to gather experience relatively painlessly, free from the stresses we associate with Making A Living or Going Into Business For Myself. One way is to play a game. The game I suggest is: Start A Business on a Shoestring, for under $100.

Financial risk is minimal: the price of a couple of pairs of designer jeans and a few dinners out. You know when you're winning: a look at the profit/loss column tells all. As an identified game, it can be played for fun.

For starters, it helps to know the essential qualities of a successful business idea.

1) It should be something that interests and excites you. Whether it's running a beer can collector's newsletter or setting up a fancy restaurant, you need heartfelt enthusiasm to keep you motivated long enough to get established.

2) A demand must exist or you must be able to create one. Few people will buy what you have to sell simply to make you successful. They will buy what you have to sell if it will help make them more successful in some way.

3) It must be something you do well. If it isn't, you'll have a hard time staying in business and if your idea is a truly bright one, someone who does do it well will soon put you out of business anyway.

Those are musts for any new business. Starting a business for under $100 adds some extra challenges and requires ingenuity. Here are twenty suggestions to help stretch your sense of the possible:

1) Put your idea in its least tangible form. Talk about it: sell, lecture, consult, or give seminars and workshops. Run an "on-paper" business: sell from a catalog made of illustrations provided by wholesalers, solicit orders at in-home sales "parties," and have products drop-shipped directly to your customers. Instead of building and selling houses, sell plans. Instead of operating a cider mill, write articles about how to run one. Take a tip from airplane manufacturers: build a prototype of your idea and sell from it. Become a premium broker by finding well-made crafts and selling large orders to be given away by banks, savings and loan associations, and other companies.

2) Make "something" out of "nothing." Look for free raw materials: surpluses, messes, problems, information, wasted talent, unused space, garage sale leftovers, events which may act as a stage for your idea. A northern California couple does well manufacturing compost from fish by-products and sawdust, both of which are problems that need handling in their area.

3) Look for free help. Hard times can be the best time for starting a business on a shoestring. The prospect of something is nearly always better than the dead certainty of nothing. People with leisure time are often willing to speculate and work with you if there is the possibility of a payoff later. Check with your family, friends, co-workers, churches, schools, social service organizations, senior citizen and youth groups, organizations that aid the handicapped or rehabilitated, and your potential customers or clientele.

4) Emphasize your personal value. Extra time, energy, personality, and attention add value and make your product or service distinctly yours. Use and capitalize on whatever makes you unique and different. It's your "signature." It costs nothing and helps to create a special relationship between you and your clientele. A lot of fairly famous business people have capitalized on what others might regard as "weaknesses": Col. Sanders' age and snow white hair. Barbara Streisand's nose. Woody Allen's wimpy appearance. Richard Kiel's size. Your most valuable resources may be your appearance, style, imagination - even your sleep patterns (Edison reputedly rested only a couple of hours a day)!

5) Concentrate on skills you already have. Employers nearly always look for people to fill specialized spots. The chances are good that your most valuable skills are not those which would get you a job because they are too comprehensive. Tact, personality, endurance, sense of humor, ability to get along with kids - whatever. They may be of great benefit in a business of your own. Many of us downplay ourselves by believing that if we can do something everyone else must be able to do it, too. Clues to your real abilities lie in your answers to such questions as:

• What do I really do best?
  
• What have I wanted to do since I was a kid?
  
• What do I enjoy most?
  
• What do I do most easily?
  
• What is most interesting to me?

By concentrating on skills you already have you may discover you don't need to do anything "special" to start a business for well under $100.

6) See your possessions as tools out of context. Possessions can be facilities for doing more, not just rewards for what you have already done. Your yard can become a display for your edible landscaping service. Your kitchen equipment can act as a learning center for young bakers. Your van can become a delivery/display vehicle. An old barn can act as an indoor yard-sale. Catalog your possessions. Many of them are miniaturizations of commercial equipment. See them in that context.

7) Value access. You don't have to own in order to use. A workplace copy machine can print a short run of your manuscript. School shop equipment can turn out a prototype of your invention. Commuters can make deliveries for you. Your secretary may type your personal business letters.

8) Make up a need survey. Before you spend a dime, ask yourself: What do I really need to start and operate this business? What else will do? Where is it? Can I trade, borrow, or rent it? Purchase only as a last resort. Be sure you don't confuse need with image or tools with toys. Focusing on needs and tools will help you simplify and clarify, making your organizational job easier.

9) Work out of your home, head, or vehicle. By doing that, you:

• Cut costs, commuting, and lunch time.
  
• Eliminate duplicate rent, phone, electricity.
  
• Can keep your present job.
  
• Control overhead by doing things yourself.
  
• Gain a built-in family labor force.
  
• Minimize risk.
  
• Can test before making a large commitment.
  
• Gain mobility.
  
• Can work hours convenient to you.
  
• Minimize the need for and cost of special "uniforms."
  
• Gain space, utilities, and travel tax advantages.
  
• Eliminate long-term lease obligations.
  
• May integrate your work with your life and lifestyle.

10) Avoid becoming an employer. Employers live in a world of regulations, obligation, and often needless expense. Because of Federal and state regulations, employees cost about 1 1/2 times their contracted hourly wage. That cost goes on, whether or not they are actually needed all the time. There are plenty of alternatives: contract for piecework; organize limited partnerships; trade; use part-time help agencies; pay commissions instead of salaries; get your friends, church, or youth groups into your act. Do everything yourself for awhile. You'll become familiar with processes and their problems and get a firm grasp of what a given job is actually worth.

11) Organize for minimal licensing. Sometimes just identifying yourself by an unconventional label lets you out of a regulated, licensed, and taxed "professional" category - but don't count on it. Be sure to check with a lawyer. However, consider using others' regulated facilities (a commercial kitchen during its "down" hours, for example) to offset the need for your own. Some shows acquire "umbrella" licensing which protects all exhibitors. Acting as a module of any already existing business may provide the same protection. Places to check for information are City Hall, the county courthouse, state licensing agencies, the Federal Building, and the nearest Small Business Administration.

12) Use others' ongoing overhead. Some businesses require special equipment which is used only occasionally. You may be able to rent time on that machinery. They may be stuck with an employment contract that binds even when there is no work to do. You may be able to use that help at a fraction of its real cost - and value to you. If you know of these situations, ask about them. You'll be doing a favor for yourself, the other business, and the workers who would otherwise be sitting around bored.

13) Sell first, produce later. Test your idea before you plunge into production. Build a model, draw up a plan, distribute samples, and sell from them. Go where your final customers congregate in large numbers. This may be a convention, trade show, or flea market. Display, demonstrate, and get feedback about what you have to offer. But sell!

14) Get pre-payment. Pre-payment is a way of getting your customers to finance you. If your product or service is really desirable you should have no trouble especially if you add a discount for cash up front. Pre- payment is customary in mail order retail businesses and at home sales parties. Changes of heart and refused C.O.D.'s can nip a budding business before it gets a chance to blossom.

15) Be concerned only with the image you present to the public. Your workshop can be a disaster and your mail room a dungeon. If your work is quality and your product does what you claim it will, no one need ever know. Put your money into your sales image.

16) Use contacts, promotion, and publicity instead of advertising. A newspaper article with a captioned photo captures far more interest than an ad of similar size - and costs nothing. Don't be afraid to toot your own horn. Learn how to write publicity releases which draw attention to you and your $100 business. But remember that media wants news. Continually look for unique and newsworthy aspects of who you are and what you do. Very often the qualities on which an ad focuses are interesting enough to provide material for a feature article. Word of mouth is the best advertising you can get. Let people know. If what you do is interesting, valuable, and reliable, that in itself is news these days. Word can get around incredibly quickly.

17) Position your business where what you want to happen is most likely to happen. The best fishermen go where the fish bite, not where they'd like them to be. That means they know fishly behavior. A conventional bookstore may be the worst place for your manual of tips for sailors. A boat or sports show that attracts 25,000 people interested in what you have to say might be among the best. You may sell more books (with less investment) in three days than all the stores in the world would sell in a year. The best burgers may be off the beaten path; the most successful hamburger stands will be on it. Do some market research. Start by identifying your customers. Who are the best most likely to be? If you can't sell to them, you can't sell to anybody. Where do they hang out? What do they read? What shows do they go to? What TV programs do they watch? How much do they spend in the market category you represent?

18) Don't "compete" unnecessarily. Concentrate on positives. Too many unsuccessful business people waste time and energy trying to beat the competition. Real winners concentrate on their customers and making it easy for them to buy. Focus on location, availability, the quality of your product, your uniqueness, your image, and what you are adding to your patrons' quality of life. Be wary of comparisons: Whenever you make one, you give your "competitors" a free plug by mentioning their names - and plant a seed which may provoke a customer to try them instead of you.

19) Invest time instead of money. Flushed with a hot new idea, it's tempting to get it off the ground right away to see if it will fly. There is no surer route to failure than overlooking the obvious, blowing your promotional impact by entering the market too soon, or failing to plan well for unexpected immediate success. Resist the impulse to "try it and see what happens." Spend time, not money - especially at first. Read a bunch of business "how-to's." Know your product inside out. Get a clear vision of what you want. The steps to success will emerge.

20) Start small; work simply; expand by pyramiding your profits, not your investments. Employees spend paychecks. Entrepreneurs invest. My friend Mark, co-author of an "unknown" best-seller, told me his success secrets: "From the first, we did everything ourselves. Typed out the manuscript. Designed the book. Laid out copy. Had a friend do artwork. Used press-on lettering. I figured if we couldn't sell 10 copies, we probably couldn't sell 10,000. We ran off the first ten on the high school copy machine. Bound them by hand. Sold them and used the money to run more. Sold them, and repeated the process till we had enough dough to go to a printer. Found one willing to speculate with us. We paid for paper; he worked our book into odd hours between other jobs on the promise of later payment. We got the book typeset only when we had the money in hand."

Do these strategies work? One example doesn't make a rule, but Mark told me that by following these suggestions he and his wife sold 18,000 copies of their book in 1984, nearly all in person and at retail - controlling printing, distribution, and maximizing the money distance between their cost of production on the one hand and their selling price on the other. They sell mostly at shows and environmental fairs, scheduling their appearances when and where they want to travel. What does 18,000 copies translate to? I know a bit about paper, printing, and travel costs. I figure they net about $4 on each book. You can figure it out.

Is a small-time business for you? No one can say for sure. It's something you have to experience yourself. It's a chance to engage in a whole process from concept to product, an involvement sadly missing from most jobs. An opportunity to design, construct, and operate a real-world workplace of your own instead of consigning yourself to a highly precarious spot in someone else's. It takes a bit of courage, but so does job-hunting. And you could spend $100 in less rewarding ways.

One last suggestion: Treat whatever business you start as an organism living in the overall context of your life and lifestyle. Your creative idea is only a single cell of a growing, changing being. Let your imagination give it nutrition. Tend it and care for it by giving attention to its needs and the needs which it serves. If you do that, magic can happen. You will have helped to give birth to an interactive and co-creative whole system. The money you make will be a healthy, necessary, and natural by-product of your success.

SUGGESTED ADDITIONAL READING

Kamaroff, Bernard, SMALL-TIME OPERATOR (Bell Springs Press).

Larsen, William J., NO MORE 9-5: What to do When You Can't Find A Job, Don't Want A Job, Or Are Unhappy With the Job You Have (Life Success Systems, Box 1052, Bellingham, WA 98227, $20 ppd., add $2.00 for First Class).

Phillips, Michael and Salli Rasberry, HONEST BUSINESS (New York: Random House).

Schumacher, E. F., with Peter N. Gillingham, GOOD WORK (New York: Harper and Row).

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