Owning your own business

I graduated from college with a BS degree in Economics with a minor in Computer Programming. With this combination of knowledge I was able to find a job  as  a programmer for a financial company in Santa Monica. It was a great job but when I got opportunity to buy a catering business, I left the finance firm after one year and started to run this catering business called House of Catering.

I was always the type of person who liked to be busy. So the idea of working long hours didn't bother me. And I thought it was the best way to make lots of money.


The Pros to owning a business:

• You have the chance (but not the guarantee) to make a lot more money than you can make working for someone else.
• You'll be your own boss and make the decisions that are crucial to your business' success or failure.
• You may be the boss of other people.
• You'll have job security: no one can fire you.
• You'll have the chance to put your ideas into practice.
• You may participate in every aspect of running a business.
• You'll learn more about every aspect of a business and gain experience in a variety of disciplines.
• You'll have the chance to work directly with your customers.
• You'll have the personal satisfaction of creating and running a successful business.
• You'll be able to work in a field or area that you really enjoy.
• You'll have the chance to build real retirement value (for example, by selling the business when you retire).
• You'll have the chance to put down roots in a community and to provide a sense of belonging and stability for your family.

Cons:

• You may have to take a large financial risk.
• You will probably have to work long hours and may have fewer opportunities to take vacations.
• You may end up spending a lot of your time attending to the details of running a business and less time on those things you really enjoy.
• You may find that your income is not steady and that there are times when you don't have much income coming in at all.
• You may have to undertake tasks you find unpleasant, such as firing someone or refusing to hire a friend or relative.
• You may have to learn many new disciplines, such as filing and bookkeeping, inventory control, production planning, advertising and promotion, market research, and general management.

Once you decide to own your own business you have to make the decision to not let the business control your life and let it run you. Your mother and I had this problem. It was hard for us to let go of the reins and get the quality people who could do the same job as well as us. This became a problem in letting our business grow. The catering business thus became a job we purchased instead of a business we owned.

I found this article below, if you decide to own your own business, this could help avoid the same trap. It is written by Derik Sivers at http://sivers.org/delegate.
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Most self-employed people get caught in the delegation trap.

You're so busy, doing everything yourself. You know you need help, but to find and train someone would take more time than you have! So you keep working harder, until you break.

Here's my little tale of how I broke into the delegation mindset:

In 2001, CD Baby was three years old. I had eight employees but I was still doing “everything else” myself. Working 7am to 10pm, seven days a week, everything still went through me.

Every five minutes, my employees had a question for me:

• “Derek, some guy wants to change the album art after it's already live on the site. What do I tell him?”
• “Derek, can we accept wire transfer as a form of payment?”
• “Derek, someone placed two orders today, and wants to know if we can ship them together as one, but refund him the shipping cost savings?”

It was hard to get anything done while answering questions all day. I felt like I might as well just show up to work and sit on a chair in the hallway, just answering employees' questions, full-time.

I hit my breaking point. I stopped going to the office and shut off my phone. Then I realized I was running from my problems instead of solving them. I had to fix this, or I'd be ruined.

After a long introspective night of thinking and writing, I got myself into the delegation mindset.

I had to make myself un-necessary to the running of my company.

The next day, as soon as I walked in the door, someone asked, “Derek, someone whose CDs we received yesterday has now changed his mind and wants his CDs shipped back. We've already done the work, but he's asking if we can refund his set-up fee since he was never live on the site.”

This time, instead of just answering the question, I called everyone together for a minute.

I repeated the situation and the question for everyone.

I answered the question, but more importantly, I explained the thought process and philosophy behind my answer.

“Yes refund his money in full. We'll take a little loss. It's important to always do whatever would make the customer happiest, as long as it's not outrageous. A little gesture like this goes a long way to him telling his friends we're a great company. Everyone always remember that helping musicians is our first goal, and profit is second. You have my full permission to use that guideline to make these decisions yourself in the future. Do what makes them happiest. Make sure everyone who deals with us leaves with a smile.”

I asked around to make sure everyone understood the answer.

I asked one person to start a manual, and write down the answer to this one situation, and write down the philosophy behind it.

Then everyone went back to work.

Ten minutes later, new question. Same process:

1. Gather everybody around.
2. Answer the question, and explain the philosophy.
3. Make sure everyone understands the thought process.
4. Ask one person to write it in the manual.
5. Let them know they can decide this without me next time.

After two months of this, there were no more questions.

Then I showed someone how to do the last of the stuff that was still my job. As part of learning it, they had to document it in the manual, and show it to someone else, too. (Learn by teaching.)

Now I was totally un-necessary.

I started working at home - not going into the office at all.

I had even taught them my thought-process and philosophy about hiring new people. So our two newest employees were entirely found, interviewed, hired, and trained by them. They used that manual to make sure every new employee understood the philosophy and history, and knew how to make decisions for themselves.

I'd call in once a week to make sure everything was OK. It was. They didn't even have any questions for me.

Because my team was running the business, I was free to actually improve the business!

I moved to California, just to make it clear that the running of things was up to them.

I was still working 12-hour days, but now I was spending all my time on improvements, optimizations and innovations. To me, this was the fun stuff. This was play, not work.

While I was away, my company grew from $1M to $20M in four years.

There's a big difference between being self-employed and being a business owner.

Being self-employed feels like freedom until you realize that if you take time off, your business crumbles.

To be a true business owner, make sure you could leave for a year, and when you came back, your business would be doing better than when you left.

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I found, that the best pro for owning your own business was the opportunities that always seem to fall in your lap. By just keeping your eyes open, you can expand into new businesses and new ideas for making money. 

Some examples of opportunities we had; 

• Running a BBQ business for another company while the owner was ill. 
• Teaching cooking classes in our catering kitchen.
• Running small food service operations in 5 hotels in Anaheim around Disneyland.
• Running a employee cafeteria for a large corporation in Brea.

A business is more than just a job. It is a laboratory where you can try out new ideas to make money. Some will work and many will not. With your business all setup with business licences, permits and bank accounts you have everything you need to try out new ideas.