ASSOCIATES (vol. 1, no. 1, July 1994) - associates.ucr.edu
MAKING ENDS MEET:
Starting Your Own Business For Profit
by
Larry J. Atlow
Microcomputer Analyst
University of Southern Mississippi
When I started at the University as a Librarian Assistant, I was
working three jobs. On nights and weekends, I worked in a
theater and as a cashier in a convenience store. At that time, I
had a relatively good income. From the start of this job, I
diverted 10% of my gross pay to a credit union account for
emergencies. I had enough money left over at the end of the
month to help my father with his medical expenses.
I didn't have an extravagant lifestyle. I had three roommates to
reduce my living expenses. I rode a bicycle because I couldn't
afford the upkeep on a car. My only indulgence was to expand my
wardrobe for my new work environment. However, even with annual
raises, within four years my expenses rose to meet my income, and
then my father had a heart attack. It depleted my savings and
suddenly I was getting calls from my creditors about missed
payments. I am still paying for the time I spent with the family
during my father's recuperation. I couldn't seem to get back to
even, much less be ahead of the game again.
I realized that inflation was consuming my income. I was also
starting to wonder how secure my employment situation was because
I have seen increasing numbers of people I know get pink slips
from the places they work for; some with more than a decade of
service. Also, in a organization/time management seminar that
the library sent me to, the presenter made two things abundantly
clear:
1. Businesses today are moving away from long term
employment and more to temporary help and limited contract
employment periods. This is because benefit packages and
retirement plans cost money that they don't have in these
downsizing times. They look for ways to get rid of the higher
paid staff for lower paid newcomers and temps.
2. If you don't improve yourself personally and
professionally, you won't get ahead. Not only that, you won't
even be able to hold your present position. If you are not
improving your business worth, you are falling behind. I have
seen this borne out in news stories, magazine articles and
acquaintance with people it has happened to.
3. NOBODY is immune to 1 and 2. As a state employee, I am
paying more and getting a reduced level of 'benefits' compared to
five years ago (e.g. my employee health insurance costs more and
my deductible is larger over that time period). In another
seminar, a CPA put it into sharper focus -- You look at your
paycheck as income. Your employer (in my case, the State) sees
it as an expense. A business tries to minimize expenses and
maximize profits. It's all a matter of perspective.
I just received a scheduled raise for this year. I got a
position upgrade in February. I have been doing the work
acknowledged by the upgrade for at least a year, but neither took
effect until July 1. As a sidelight, job levels here have a cap
based on education. I am at the maximum pay level I can
achieve without a degree. A degree will have no effect on the
job I do, but it is worth more than my knowledge or experience,
even if my job becomes complicated to the point where a
replacement would require a degree and I learn it (or create it)
on the job. A new person with no experience and a degree could
make more money to start than I can without one. I will be
receiving a degree in Psychology soon which will remove this
barrier, but what does a Psychology degree have to do with
repairing hard drives?
I have been taking tutoring and consulting jobs for a couple of
years, but doing most of it for free. I felt guilty about
charging people for things that were simple to me. I have been
forced to accept payment on several occasions. People were
willing to pay, because what I considered simple, they considered
invaluable. I could do for them what they couldn't do for
themselves. I had never seen it from the customer's perspective
before. I could remember times when I was willing to pay TWICE
the asking price for a service or product I NEEDED at the time
and still considered it a bargain. I didn't advertise for
clients because referrals brought them to me. I didn't
even have business cards. However, while it gave me a little
extra cash, it didn't give me a steady income. To guarantee that
steady income, I figured I'd have to spend lots of money and all
of my free time doing this. In addition, commercial customers
would expect me to be available during the business day, which
was impossible. I didn't know what to do.
I was looking for a way to supplement my library income. There
was no way that I was going to earn enough from my day job to
cover my living expenses, pay off my debts and put away anything
for those unexpected expenses that occur in everybody's lives.
Saving for or investing for retirement was out of the question.
About once a year, the university holds a financial planning
seminar for faculty and staff to offer them ideas and options for
retirement planning and investment opportunities. This year, we
had representatives from TIAA/CREF and the Social Security
Administration. The SSA scared me. They warn people not to
depend on Social Security benefits for retirement. It is
only supposed to cover about 40% of retirement income. Some
benefits that I am not eligible for, I can BUY from the SSA like
any other insurance. In a report from this agency a while back,
they said that by age 65, 98% of working Americans could not
support themselves on their retirement income. Most relied on
some combination of government subsidy, family, and/or charity.
It was during this time that two friends showed me two business
opportunities.
One was in financial planning and networking and the other was in
marketing and networking. I examined them both and chose the
marketing and networking plan because, for me, it was the better
of the two. The financial planning business offered immediate
profits and fast growth, but there were also practical limits to
how big it could become. The marketing business was a bit
slower, but I could see no limit in its potential. It could also
expand internationally. My business is not limited to U.S.
borders. This meant that people I knew in other countries,
including some in the former Communist Bloc, could take advantage
of the same opportunity.
I found something that worked for me. It lacked the four main
drawbacks to operating your own business. It didn't require a
lot of startup capital (I had none); it didn't take a lot of time
(I had little); it didn't require a lot of expertise up front (I
had none); and there was no risk (I wasn't willing to take any).
Now hold on a minute thar Baba Looey! It sounds like you've been
taken in by some sort of late night infomercial hype. Trust me,
I considered that possibility. I can get enthusiastic about new
projects easily. I have been taken before. I was excited about
the possibilities, yet skeptical about the method. Still, I was
looking for a way to pay off my current debts and cover the cost
of an MLS without digging myself into the same hole. I looked at
this with the most critical eye I could open. I analyzed the
situation as thoroughly and OBJECTIVELY as I could and I still
felt the same way. Even now when I get especially excited, I ask
myself if I am being swept along by the heat of the moment.
After quiet reflection, the answer is still NO. Why? This is
real, and I have real results. I have options. I am (in
my mind) no longer dependent on my job for my livelihood. That
makes me more confident about doing things.
I have a more optimistic outlook on life. I deal with people
better. My job performance has improved. My ATTITUDE about my
work situation has improved. While I am still in debt, I am
working my way out of it now, whereas before, I was only holding
my position (or slipping behind) while the interest on those
debts got bigger. I am actually EXCITED about the future
because I can see how and WHEN things will improve for me.
Instead of focusing on problems at work and home, I look for
solutions. Guess what? I find solutions more quickly and more
often.
*Conclusions*
Second jobs are only another way to trade hours that are already
in short supply for dollars an employer is reluctant to give up.
In this economy, part time help is too easy to get for a second
job to be secure, much less get respect and decent treatment from
your employer and coworkers. Income is severely limited in
proportion to the amount of time and effort expended. This is a
bad plan for the most part, especially for people with a family.
For most people, an injury or an illness will dry up income from
both jobs.
If you have marketable skills, I suggest that you do as I did and
investigate the possibility of running your own part-time
business. DON'T SELL YOURSELF SHORT!! Possibly you have some
hobby, skill or talent that you could turn to a profit-making
enterprise. Woodworking skills could get you into furniture
repair/refinishing for those who don't want to do it themselves.
It's less expensive than new. One of our LA IVs makes some of
the most delicious pastries anyone has ever tasted. She usually
does it for cost for library functions, but anyone around here is
sure she could be a success as a caterer or a pastry chef. Do
you like to shop? Have a flair for matching color and line?
Maybe there are people out there with enough sense to realize
they have no taste and are willing to pay someone who does to
shop for them or at least advise them on gift purchases (don't
laugh). You will never know what you can do to make money if you
never ask yourself the question or look and see what your market
needs.
What I realized through all of this is that the BEST way to make
extra money and eventually gain financial independence is by
owning your own business. There are lots of business
opportunities that can make you money, but a stable, long term
income is a different story. What kind of business is dependent
upon you and your circumstances. I started out small, sometimes
putting only 5 or 6 hours a week into my business. Now there are
weeks where I will put in 12 to 15 hours. Sometimes I have to
give up a little TV or a pickup ball game, but weigh that
temporary pleasure against my future and I don't feel so badly.
Besides, there are VCRs, reruns and other pickup games. I didn't
say it was always convenient, easy and fun, but neither is never
having enough money or time to do the things you want or need to
do. Look at it this way--if you don't have the time or money to
do the things that you want to now and you don't do anything to
change your situation, what are you going to have to work with in
5 years? 10? by retirement time? In the long run, I believe
this is better.
In his autobiography called _As I See It_, J. Paul Getty outlined
four keys for success:
1. You must be in business for yourself.
2. You need a product, service or idea in constant demand.
3. You must offer a 100% warranty.
4. You must be able to duplicate your efforts.
Based upon those criteria, find something that works for you.