Flying the Coop – Starting Your Business

I’m on a boogie board. Crashing into my 11 year old as he spins around on the wave next me. He banks left then slams into me again. This time my sunglasses fall off and I have to slip into the surf to find them. With my eyes open I reach down and grab them as a second wave knocks me over. I’m bounced along for a while and I feel myself smiling. Middle-aged, balding, overweight (like I note, are most Australian males) but surprisingly happy. And I reflect on why.

Cause it’s a beautiful day and I’m here having fun. And it’s a Friday, just after lunch. Yes, the kids were taken out of school early. Yes, I’m a bad Dad. Yes, I should be at work….

And I would be if I was employed by a big company. This is the fundamental reason you set up a business for yourself. So you can decide how and where to spend your time. It’s not the money, although it can come. It’s not just the fuck you to your current employers. It’s the freedom to steer your own ship. Or not, as the case may be, for a few hours…

Are you a chicken? A battery hen? Are you sitting there, coffee slowly going cold. Laptop slowly wearing your eyes out. Seat, slowly making your bum sore. Life slowly dribbling away. Bored.

Is it time to free-range? Time to do something that may change the world, or at least will change yours? Is it time to put yours on the block. To start your own operation? I can feel a tingle coming on all over my feathers. I’d better close my office door.

Every marketing person I’ve ever met did their course or started their career with this goal firmly in their mind. (Not firmly in their hand.) One day they would be their own boss, be the chief engine and steering wheel of the great ship ‘Existence’. Most marketers want to run their own show and so, I’m betting, you do too.
But what to choose?

Assuming for a moment you are not a single-minded git with a burning desire to set up something truly off the wall like panty-sniffing vending machines on railway stations (Very popular in Japan) Assuming you are interested in a few different options, how do you choose which one to start?

Many people start with personal preferences. Having been given a book on managing your life called something like ‘Six steps to Success and Sexiness’ for Christmas – there’s always a chapter on ‘do what you enjoy doing’.

Do what you love?

So say you like fishing. You say to yourself, ‘I could just go buy a boat and map out where to get whiting or snapper, then hire myself out as a fishing charter boat and off I’d go. Only need a couple of extra rods and an ad in the Yellow Pages…’

This is true. And a commendable venture, given you can take me out and get me near them. But the ‘’cause I love it’ approach has several major draw-backs for the true marketer. Firstly, there’s often stuff all marketing in it and you’ll have that intellectual side of your career totally frustrated. And there’s often stuff all money in it, so your spouse will murder you in about 3 months. But the worst part of it, which is why almost everybody who sets up a business around their hobby hates it eventually, is that if you do what you love too often, it destroys it. Try listening to your favourite song 200 times in a row.

Do what you like

You need to find something that you can still get kind of excited about, but all the analytical bits of your brain think makes sense too. Hard call, I know, but it sure beats doing something that no analysis says works or that you already hate to start with. This leaves about 2 million businesses, so we should get to analysing what to choose.

What to look for

To be very serious for a moment, the business to look for has four key elements going for it.

Firstly, it should buck a trend. A contrarian, or someone who runs against a market flow, invariably does way better than a fashion follower. Ie. If everybody is getting out of an industry, get into it.

Secondly, it ought to be inherently big. A volume game. An old saying is ‘If you make for the classes, you eat with the masses. If you make for the masses, you eat with the classes’.

Thirdly, it ought to scare other people off – by it’s complexity or by the cost or by the technology needed or something else that stops other people competing with you. There’s 1200 personnel companies in Melbourne alone. Cause they’re easy to start. Ask yourself, do we need another?

Lastly, the other players ought to be vulnerable. Look at what Virgin targets. Airlines were inflexible and had ugly old hostesses. Credit cards were too expensive and up themselves.

Why franchises are for the cannon fodder

Franchises, a worthy consideration for a blink, are set up for people who have neither marketing or organisational skills. So they buy something that requires little analysis and no branding/operational brains. I’d like to think everybody who reads this magazine is way above franchises, unless it’s to franchise their own business, which we could all probably do in a year or two. But the politics of running a franchise operation, with all those trumped up little bosses…

The first few steps

Plan out what you have in mind on one piece of A4 and on another, do a mud map of what has to happen in what order. This will take about 20 minutes, if you’ve spent a few weeks giving it real consideration while you’re on the loo, in the shower etc. You could even call it a ‘business plan’ if your spouse ever asks if you’ve done one…

Once you’ve done a game plan, register a business name and open a bank account. Put $1,000 in it. Most importantly of all, get some business cards/letterhead. They give everything else legitimacy. Now you’re off. Good luck.

Oh, I forgot to mention maintaining a cash-flow by staying in your current job until things are really swinging, or at least keeping a part-time income going on the side, like a ’consultancy’ gig with the old company.

Now get out there and sell your idea. I’d suggest you look around for some customers and work out how they are going to be persuaded to put their business through you. Have you researched the market? Have you worked out how to make your widget or where to locate your shops? Are there any competitors and how do they operate? Good hint – go and buy a book on starting your own business (or go on the web), there’s thousands of them. They all say the same stuff.
If you can’t sell, don’t bother

This may come as a surprise to many in the corporate world, veiled from the messiness of actually having to ask for an order or shake hands with a smelly customer, but if you can’t close a sale in the real world, you’re dead. This extends to every aspect of your new business, from talking the bank into extending your home loan to employing your first subordinate.
Selling like you aren’t.

On the subject of selling successfully, especially to the bank manager or the first few employees, let alone customers, do it like you aren’t. The best sales people are enthusiastic and know the issues and are good at being friendly, and never seem like they are selling at all. And a tip. Don’t ask if they want to buy something, just hold out your hand and say ‘savings or credit’?
Cashflow is king

Make no mistake, the thing that kills small businesses is cash-flow, or lack of it. Change your payment terms from 30 to 7 days. Take cash if you can. Reduce your out-goings or make multiple payments of larger bills. Stretch it out, make it smooth. Don’t over-commit. Manage your money, or you won’t have any.
Managing people and time

These are the other two key variables. Time management is critical. You need to get the most done in a day you can, without exhausting yourself. If you are tired you make mistakes. And mistakes cost money. And this time it’s yours. Which brings me to the other critical issue, people.
Nobody can do it all

If you find yourself doing something too often, or for too long, hire someone. I know it seems impossible to pay them. I know you could do it and it will only take 3 hours or so, but the little jobs fill up your day and you’re better to have other people doing them.

Hire people (who meet all your criteria) on gut-feel. Do you want to work with them? Will your customers like them?

How many really fail?

The story you get from the corporate world is that 9/10 small businesses fail in the first 12 months – losing their owners their homes, destroying their families and thus scaring the hell out of any employee who thinks the grass might be greener in self employment land.

I saw an interesting (confidential) report a little while ago from a bank. They’d analysed their own records and found something truly amazing. Yes, on the surface, the businesses had ‘disappeared’. They’d changed. Many had gone from a personal name to a trading name. Or a trading name to a P/L. Or to a trust. Or re-named themselves, because it worked better for sales etc. Which means the name on the cheque book had changed and hey presto, the ‘business’ no longer existed. My business was originally …anon advertising, which was very clever, while we were still working for other ad agencies etc., but was unknown by anyone else. Changed it to Starship and more people remembered it. Point is we didn’t fold, we just changed our name. Way fewer start-ups actually fail than the stats would have you believe. Have confidence in yourself and don’t let the bastards scare you.

When is it not a start-up anymore?

a)   When someone offers to buy you for a big sum

b)   When your Mum stops asking you how your hobby is doing?

c)    When your spouse stops pushing/selling the business at school barbeques, and gets the guys in to quote for a new pool

d)   When your HR manager tries to stop you hiring pretty young things at cocktail parties

e)   When you get bumped instantly from a local bank manager to an area manager whenever you have a problem

f)     When people ‘vet’ your calls and say you’re too busy to see mates who’ve dropped in

Momentum – businesses have a life of their own

Something few entrepreneurs believe until it just happens to them, is that businesses have a life of their own. When you get to work and you’ve got 5 or 10 people already there and they are making phone calls and ordering widgets and ringing back customers, you suddenly one day realize that it’s not just your hard work that pushes things forward. You’re not the only little pony carrying a load. Companies of people live for themselves.
Is an entrepreneur the best manager?

There comes a stage, and often it’s only a few years after starting, where really successful people recognise that they would be better on the board than making every decision every day. This is the grown-up approach. Get a general manager in. Make it her responsibility to make a profit. Give her guidelines and incentives and be bloody generous with her remuneration if you want her to make you a fortune.

How to Manage

Live by two rules. One, never ask anyone to do anything you won’t do yourself and two, if you’re prepared to anything, you never have to do anything very long. These of course virtually cancel each other out, but it does make my life interesting and it does make for a happy work-place.

Something else to keep in mind is that people respond better to praise than telling off. If you’re not enjoying yourself at work, give up or go home. Oh, I could keep on going for weeks with management philosophy. So can anyone else. If you want to read that sort of shit, go to Readings or Dimmocks and check out the ‘business’ section or buy BRW.
When to get out

Many of us see a good exit strategy as negotiating to be bought out by a bigger player. This can work. They will usually value your business on the basis of anticipated returns. Expected risk affects this. How surely is the income going to be there and does it depend on you? Or is it rolling along like a freight train and doesn’t need anybody’s help? Typically they’ll value it at a multiple of your earnings after tax. Could be anywhere from three to ten times or more what you’ve made the last couple of years. Then there’s floating, which is more expensive to do, but you can keep control of your baby.

Can I get it back if I change my mind?

Richard Branson ‘cashed-out’ some years ago, but got sick of ‘them’ stuffing around with Virgin, so he bought it back. And I think he actually made a profit on the deal. (Some five hundred million dollars?) Not all of us can afford to do both. It does require good lawyers and helps if you sell the business in the first place to bad managers.

I know most people say ‘it’s a big risk’ and they’ll give you a lot of reasons why your idea will fail and stories about how Uncle Harry  started his own fruit canning business and they ended up living in a caravan park and drinking metho. But do it anyway.

When things get tough, and you wonder if you’ve done the right thing, remember this immortal saying. ‘When the going gets tough, the tough get going’ (Animal House?) ‘It’s better to live like a lion for a day than a lamb for a hundred years.’ (Bible?) or ‘I did it my way’ (Frank Sinatra) or ‘If you can make one heap of all your winnings and risk it on one turn of pitch and toss.’ (Rudyard Kipling). Or ‘Ask not what America can do for you, but what you can do for America’ (J.F.Kennedy). I guess you should insert Australia where it fits…Most entrepreneurs know lots of these quotes.


Your Own Business: Greener Seas?

So you’ve decided to become the master of your own ship – but where to sail it? Here are some of the more well-chartered waters of entrepreneurial ex-marketers…

An advertising agency

Yes, I can write a brief. Yes, I can hire a creative. Yes, I can put together a proposal. Yes. I’m an agency head in a day.

A design company

I always have my pens neatly in a row and haven’t worn a colour other than black for 10 years.

Market research

I’m shy. I’m happier asking than telling. I am good with numbers. I write a nice report. I should be a market researcher.

Marketing consultancy

I’ll take an hourly rate, but I ought to be on your board. What does the research say? Have I told you how I saved Astra Corp from being taken over? Yes, I’m still sleeping in my car.


What is it you want? Coloured hats? Chicks with big knockers in tight t-shirts? 250 school kids in yellow on a beach singing the Banana Boat song? No problems.


Everyone wants to start a franchised vegetarian falafel bar. Or a Museli Bar that says ‘healthy’ on the front and has chocolate on the back and sells in Coles.


My husband is a whiz with a sewing machine. (If it gets big I can send the designs over to China.) I can hit 20 stores a day and they’ll all pay. They all really liked me. They wouldn’t rip us off.

Web brand

I can sit at home. I can buy Dreamweaver and email people to supply me with pictures of their products and build the site myself.

Now what to sell? Roses only. Oh, someone’s done it. What about wine? Holidays? Wot if I…Kids’ toys?


Fashion, farm products, food, anything that takes work/profits/power away from Australians and gives it to Asia is a good thing.


If you go overseas you notice a significant change. All the shops are nice and friendly and people help you without grumbling. Almost any retail idea, run by a decent marketer, will do well here.


Things people don’t want to do make money. Look at Pratt’s Visy – they just collect (and make) rubbish. He’s not short of a quid.


Just cause everyone else is in Olives (Wine, Ostriches, Tulips, insert your own over-supplied product) doesn’t mean it’s wrong. I’ve done all the research. And the property is only $750,000 – it’s a bargain.

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