You’re Done Working For The Man. It’s Time To Be The man.
This is an article featured in the July 2009 Men’s Health Magazine which features Josh Duhamel on the cover. I couldn’t find the full article online so I decided to type the entire article in a blog post. I thought it was not only a great read, but inspirational as well and wanted to share it with anyone who crosses paths with my website. Enjoy!
Do you really intend to spend your entire working life making money for somebody else? Why?
It’s time you invested in your most marketable product–yourself–and reaped the rewards.
By Joe Kita
After 23 years of working for The Man, I quit my job to start working for Myself. Pinned to the bulletin board in my home office are two New York Times quotes from smart people:
“Most people work 40-plus hours a week at jobs they don’t like to buy things they don’t need.” -anticonsumerist Madeline Nelson
“I had one of the best jobs in the world, but there is a world of opportunity.” -Chris Sacca, former head of special initiatives at Google
In the two and a half years since I quit, I’ve looked at these quotes every day. And during weeks when I’m not receiving any accounts receivable, they still affirm what I’m doing.
The American Dream has been roughed up lately. There is doubt where there once was direction. There is retrenching instead of renaissance. But there is one place where you can still dirty your hands with hope, display your ingenuity, taste a measure of independence, and feel a bit like your great granddad must have felt–fresh off the boat, testing your potential.
I’m talking about starting a business. And I know you’ve you’ve thought about it, too. Maybe you’ve been developing an invention in your head for years and now you’re considering patenting it. Or maybe you have a special family recipe or an idea for a kick-ass Web site, or you simply wonder what you could become if you put as much effort into working for yourself as you now do for someone else.
“In an economic downturn, entrepreneurship is usually the savior,” says Chat Moutray, Ph.D., the director of economic research for the Office of Advocacy at the Small Business Administration (SBA).
On these pages, we’ll show you how to evaluate and act on your dream. Although you may find it difficult to believe in the government, the economy, and even the future, there’s still one thing you can have unwavering faith in: yourself.
Opening a Business in Paradise
Risk Rating high
Start-Up Requirements A Jimmy Buffett-style disdain for the status quo
Best For An adventurous outdoors man with minimal responsibilities
Worst For A family man
Most Common Screwup Not spending enough time in “paradise” first
Richard Difede is describing the view from his office window. “I see six palm trees and a stand of mangroves. And beyond that, I know there’s a beautiful bay where people are surfing and sailing. It’s 88 and sunny.” For his morning commute, he drives a winding coastal road past a spot where Columbus landed during his travels through the New World.
Difede is the president of Gold Coast Yachts in St. Croix, U.S. Virgin Islands (goldcoastyachts.com). Since he left the mainland 30-plus years ago, he has evolved from surf bum to savvy island entrepreneur who employs 60 people in a multi-million dollar yacht-building business.
But even though he’s admittedly on vacation within 5 minutes of leaving the office, Difede still logs 5-hour weeks and deals with many of the same headaches that regular working men do. And therein lies the fantasy and the reality of starting a business in paradise.
“Tourists come here and they’re overwhelmed by the environment,” says Difede, 56. “They forget their common sense, whether they’re drinking rum daiquiris or deciding to come back next week and open a business. Life is good here, and there’s a lot of opportunity, but you have to be smart about it.”
Determine What’s Driving You. “Paradise is a state of mind,” says Difede, who points out that the place where he grew up and couldn’t wait to leave–Franklin Township, New Jersey–was ranked fifth on Money magazine’s 2008 list of best small cities. “Are you running away from something, or running toward a deep, lifelong dream? It’s important to determine which of those questions defines you.”
Consider the Wife and Kids. If you have a family, their happiness will largely determine yours. “Kids generally love the tropics,” says Difede, “and the private schools can be quite good. But if your wife is used to moving from air-conditioned house to air-conditioned ca to air-conditioned Starbucks to air-conditioned shopping mall, it’s going to be a challenge for her.”
Look for Islands That Fly the Stars and Stripes. You can find an exotic locatio without leaving the States. There’s Hawaii, of course, but there are also U.S. territories. Difede recommends the Virgin Islands because of its “spectacular” tax program. For instance, if your business meets Economic Development Authority guidelines (usvieda.org), 90 percent of its eligible net revenue will be income tax–exempt.
Starting a Traditional Business
Risk Rating Medium to high
Start-Up Requirements Cojones and capital
Best For Anyone who desires total freedom
Worst For A man who needs structure to be productive
Most Common Screwup Not spending enough time in “paradise” first
Brett Hoebel ever started out to be an entrepreneur, and neither did Dawayne Brashear. Hoebel was in premed and then finance, while Brashear worked mostly as a model and flight attendant. But each man always had something he truly enjoyed that he dabbled in on the site. Hoebel let fitness classes part-time at a big urban gym, while Brashear used his interior-design degree to occasionally land small residential projects. These avocations eventually grew into vocations. Hoebel Fitness (hoebel.com), headquartered in New York City, offers personal training and nutrition programs, plus group fitness classes and gear. Brashear’s Edit Interiors (editinteriors.net), based in Bloomfield, New Jersey, specialized in commercial and residential interior design.
Although each business has an online component, Hoebel and Brashear still do most of their work the old-fashioned way–face-to-face, from brick-and-mortar storefronts. It’s handshakes, not keyboard clicks, that punctuate most of their efforts.
Together, they represent the diversity of backgrounds and interests that brig people to traditional small businesses. Here’s some advice on how you can take a skill, a love, and turn it into your livelihood.
Moonlight first. Starting a traditional business takes the biggest cojones of all because of the physical assets involved and the lack of a track record. So tiptoe into it with hands crossed guardedly in front of your assets. If you think you have a knack for computer repair, fix friend’s machines first .Or if you truly believe that Nana’s kiffles might have national appeal, test market them in a few local restaurants.
Be smart about raising capital. Although lots of people do it, the worst way to fund a start-up is by borrowing from credit cards. Instead, check out the SBA’s extensive loan program in the financial-assistance section at sba.gov/services/, or investigate venture capital options at activecapital.org.
Put yourself out there. You won’t have much money for advertising at the outset, so attend seminars, trade shows, or any gatherings of potential customers. “I went to a fundraiser the other night,” says Brashear. “I was tired, but forced myself to go.” Turns out the mayor of a major Northeast city was there. “Now I’m talking to him about doing a three-floor commercial installation.”
Devise 1-year, 5-year, and 10-year ideals. This is your role in the business at different points in the future. It’s more general (and even philosophical) than what’s in your business plan, but it can be just as influential in setting direction. Hoebel, for instance, doesn’t want to be teaching fitness classes 1 years from now, so he’s branching out into video.
Patenting an Invention
Risk Rating Low to medium
Start-Up Requirements One new, useful, not-so-obvious idea, and a few thousand dollars
Best For A creative individual
Worst For A guy who hates following instructions
Most Common Screwup Hiring an invention developer
Mark Kroll, Ph.d., holds nearly 300 U.S. patents. These range from the pet phone (“Fluffy? Is that you?”) to many improvements on the implantable defibrillator. (He’s a leading inventor of medical devices).) Although the 56-year-old Minnesotan won’t disclose how much all these patents have earned him over the years, his roles with various start-up companies hint that he’s doing fairly well. Plus each of his four children is a patent owner, as is his wife.
“I believe the average guy has at least one million-dollar idea in his lifetime, but he doesn’t follow through on it,” he says. “To a degree, everyone is an inventor.”
That being said, patenting an invention is one of the most complex and potentially poverty-inducing forms of entrepreneurship. “It’s shocking how many people spend $50,00 or more inventing, producing, and patenting a product, only to find out there’s no market for it,” says Bo Fishback, vice president of entrepreneurship at the Ewing Marion Kauffman Foundation.
Here’s how to objectively evaluate your idea and negotiate the patenting process.
Do a quick patent search. Simply type in a description of your invention at google.com/patents. You’ll be able to view actual applications back to 1836 (unlike U.S. Patent and trademark Office’s database, which goes back to 1976). You can also view detailed claims and drawings. Don’t be discourage to find other patents similar to yours, Kroll says. Instead, study them carefully to determine what makes your idea different.
Record the invention properly. File a provisional patent application (uspto.gov/web/forms/index.html). This entails carefully describing the product or process (as if you were telling a friend in an e-mail, says Kroll), supplying illustrative drawing, and paying a fee of $110 to $220. For a year after you file, you can call your invention “patent pending” and develop it further, without fear of infringement.
Evaluate its commercial potential. Now that your idea is legally protected, show it to potential customers or clients and gather objective opinions. David Pressman, a patent attorney for nearly 50 years, advises paying particular attention to any dangers noted in the design, because nothing kills a patent’s commercial value faster. Money spent on market research and refinement is always money well spent.
Apply for a patent. Using a patent attorney can cost up to $20,000, but Kroll says you can reduce that fee to around $5,000 by following the advice above and formulating your own detailed description of the invention. “Do the sketches first and put number by every element,” he says. “Then describe how each numbered element works, and you’ll have the starting work done on a high-quality patet application, leaving your lawyer to focus on the tricky part–the claims.” The fees start at $545, and if the application is approved, the patent-issue fee is $755. Be prepared to wait a year or two.
Market it to a suitable company. To profit from your invention, try to sell or license it to an appropriate company. Steer clear of any fee-based invention developers, say Kroll ad Pressman. You can develop a marketing plan on your own. Start your research at inventorsdigest.com/resources.aspx.
Starting an Internet Business
Risk Rating Varies
Start-Up Requirements A computer, an Internet connection, and a Web site
Best For Any entrepreneur
Worst For The tech illiterate
Most Common Screwup Waiting for customers to find you
Mark Llano, 40, served in the first Gulf War, worked as an investment banker on Wall Street, and then became smitten with the idea of starting an online business that sells tactical military gear to the government .So he tapped his credit cards and borrowed against the value of his home to launch Source One Distributors in 2003, working out of what used to be his 5-year-old daughter’s bedroom. Six years later, his company (buysourceone.com) features more than 500 vendors and has annual revenues of $52 million.
The internet is full of success stories like these. But there are just as many stories of fathers who lost their daughter’s bedrooms in foreclosures or young studs who lost their starched shirts to some foolishness. Here’s how to maximize your Web venture.
Realize that a cyberbusiness is no different from a traditional business. You’ll need thorough research, a well developed business plan, ample capitalization, smart advisors, a solid PR and marketing plan . . . essentially the same foundation that underlies every successful business in America.
Go on 70 percent. Research your idea, but don’t overdo it. “If you wait until you have more than 70 percent of the information, you’ve waited too long,” says Shawn Boyer, founder of SnagAJob.com and the SBA’s 2008 Small Business Person of the Year. “Less than that and you’re increasing your chance of failure.”
Hire SEO and PPC experts. “Hire a consultant who knows search engine optimization (SEO) and pay-per-click (PPC) advertising,” Boyer says. Your goal: Your site appears on the first page when certain keywords are searched.
Latch onto your local SBA office. By law, 23 percent of all federal contracts must be set aside for small businesses, and the SBA’s 8(a) business-development program helps open the doors for qualified firms to register and compete for these contracts. Your district SBA office (sba.gov/localresources) can help you determine if your company qualifies for any of this action.
Buying a Franchise
Risk Rating Medium
Start-Up Requirements On average $20,000 franchise fee and $75,000 to $200,000+ start-up costs
Best For A midlevel manager
Worst For A guy who wants total independence
Most Common Screwup Not consulting other franchise owners
It’s the soft opening for Dickey’s Barbecue Pit in Bethlehem, Pennsylvania, and a herd of people, including a live band, are in the restaurant. The kitchen is thrumming, and Dick Kile is in the middle of it all, shaking hands, doling out dill pickles, and extolling the pulled pork. Frankly, it’s difficult to believe he was once an executive vice president at Citigroup and, in fact, still runs a mortgage company. You don’t see many bankers in brisket.
“Even though I have no experience in the restaurant business, it’s something I always wanted to do,” explains the 53-year-old Kile. “I ate at a Dickey’s in Texas about 8 years ago and thought, ‘Wow, what a concept,’ but they weren’t franchising outside Texas at the time. One Sunday night a couple of years ago, I was on franchisegator.com and the Dickey’s name popped up. I made some calls, met the Dickey family, and here I am.”
Across America, Kile’s story can be retold 909,253 times: That’s how many franchise establishments exist i the United States. Together they generate $2.3 trillion in business and employ more than 11 million people, according to the International Franchise Association (IFA). Although the average franchise fee is about $20,000 and you’ll typically need another $75,000 to $200,000 for start-up costs and working capital, it’s all significantly less risky than trying to launch an entirely new business. That’s because you’re not just licensing a product or name; you’re (ideally) purchasing a proven system.
Remember that feasibility has nothing to do with franchising. Anyone can franchise anything. While it’s in the best long-term interest of the franchisor–the one selling the franchise–to encourage success, there’s no guarantee of it.
Shop the market. To find the best franchise for you, check online resources or attend one of the IFA’s several annual trade shows (franchise.org/events.aspx), where you’ll meet frachisors, attorneys, accountants, brokers, venture capitalists, and other types of experts. The hottest growth category continues to be computer products and services (up 274 percent over 5 years), while automotive and printing-related franchises lead the decliners. Two new franchises of particular interest to men include Tilted Kilt Pub & Eatery and Knockouts (a boxing themed salon for men).
Study the UFOC. By federal law, the franchisor is required to provide you with a Uniform Franchise Offering Circular (UFOC), which is essentially a disclosure statement addressing topics ranging from franchise fees to earnings claims. Be aware, however, that the government merely mandates and registers these documents; it does not verify the accuracy of their information. For expert help in reviewing the fine print, visit the IFA’s supplier forum at franchise.org.
Be sure to talk to franchisees both in and outside your area. Those nearby may consider you competition and may not provide completely honest feedback, says Pamela Mitchell, CEO of the Reinvention Institute, a career transformation company based in Miami. You might even want to work i the franchise for a few weeks, since there’s no better way to judge the day-to-day reality.