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VOL. 126 | NO. 119 | Monday, June 20, 2011

Tom Pease

The Right Way to Start a Business

TOM PEASE

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Ideas don’t start businesses, business people do. At least the kind of businesses 99 percent of Memphis entrepreneurs work to make successful. Certainly an original, scalable idea can rocket like a Google or Facebook. You have better odds of such success, though, playing blackjack.

Most entering business ownership have, as a basic concept, to be “successful.” Each has to define that for oneself, but surely it means at least having control of your company, sustaining it and making a good living. For these reasons, I really do not like some start-up methods that go on. They do not match well to these criteria anyway. Sure, they shoot for the stars, but stars are way out in space too. I probably make no friends saying that, but I’m not here to be a cheerleader.

I don’t think anyone should be “encouraged” to start a business. That comes from within. I don’t think getting angels or investors is wise. How in the heck do you own your business dividing it between multiple egos? Works about as well as three in a bed. And promoting a great idea, or the best of this group of ideas, to be successful, is an irresponsible concept. You need proven business skills first. The Big Idea comes after that. Don’t put “President” on that business card until you actually are one.

There is no shortage of great ideas, only of those knowing how to execute them. That is the business of business. Besides that, a great flame-throwing idea in January may be obsolete by October these days. Here is a better way to guarantee success: Instead of business people trying to coach along idea people, do it the other way around.

Understanding successful ownership can be a bit like watching sausage being made. A beautiful initial plan can look a bit ugly after examining all the ingredients needed.

What is the best way to start?

It should be worked in an evolutionary, not revolutionary, manner. Build business experience in your area of interest. Shadow someone actually doing it. Understand financial statements. Understand! Forbes magazine: “With all thy getting, get understanding.”

Stick with what you know. If you are a knowledgeable engineer, don’t go into hamburgers. That experience helps you handle difficulty.

Finance it with your money or a bank loan. This keeps it yours.

Have an inordinate passion of some kind driving you. It is what overcomes.

Sales experience is the best training. There is no business if you cannot sell something.

It is much harder to keep a business going than to get one going. Some 50 percent do not last four years. Only 202 Fortune 500 companies that existed in 1980 are in business today. Beware.

You must be a good manager and recruiter of people. You can’t do everything, so you hire people. Depending upon your skills, this can be a good or a bad thing for you.

Understand your predominant trait. Are you fiercely independent (here) or a consensus builder? Micromanager or delegator? Make sure your business lines up with you.

Understand? Here’s hoping so.

Tom Pease is owner of e/Doc Systems Inc.

RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 116 288 17,672
MORTGAGES 143 337 20,372
FORECLOSURE NOTICES 0 11 2,656
BUILDING PERMITS 139 488 36,434
BANKRUPTCIES 43 158 11,322
BUSINESS LICENSES 35 93 5,802
UTILITY CONNECTIONS 38 65 6,779
MARRIAGE LICENSES 18 86 4,002