Reflections

Do you remember using the leverage principle as a child on a see-saw? The farther out you pushed yourself, the more important your weight became. If the kid on the other end was not out as far, and did not weigh more than you, ultimately you could strand the kid high in the air while you ended safely on the ground. The other kid was powerless to do anything except crawl down or jump down and leave you to play by yourself.

This is an example of the tipping point: where one side of a duo becomes so powerful that the other side no longer has a say in the result. Reaching a tipping point in the life of a company or of a country is no longer a fantasy because the distance between the “haves” versus “have-nots” is growing.

Large businesses move closer to the tipping point every time the executive compensation committee increases the pay of the top dogs without consideration of the income needs for the lower level employees. Or cuts corners in pursuit of profit without consideration for the impact on the environment.

Countries are reaching tipping points in the competition between government employees and the taxpayers who fund them. Government workers in Greece have marched in the streets against the efforts of their broke government cutting costs.

In the USA government workers are paid significantly more than their civilian counterparts, a dramatic change from years ago that shows the power of civil service unions. The increasing grab by Washington for control of more segments of the economy adds more government workers who will demand high pay and top quality benefits, all on the backs of cash-strapped taxpayers.

Picture the fat-cat government workers moving farther out on the see-saw and you get the picture. Someday, if government continues to grow and if more and more citizens see their general welfare dependent upon government social programs, we will reach the tipping point.

Companies that reach the tipping point can pay a price in the stock market and their executives can find that they are left to play by themselves. I am not a union supporter, but I do believe in justice and fairness, and businesses that allow themselves to reach a tipping point should be dealt with severely by market forces. Their boards and officers need to get off the see-saw and go to a time out.

Governments that slide out on the see-saw and threaten to reach the tipping point are a risk to more than stockholders. Their bloated civil service ranks threaten the future of a country. In Washington much of the increasing size of the government is being built to produce the growing regulatory apparatus. Congress and the White House believe that their “experts” in charge know better than the folks in the real world. And who is to blame for that attitude? Businesses that have reached their tipping point have driven popular opinion towards the belief that more government is better for all of us.

But we know that is not true. There is a fallacy in over-regulation. Not only does it stifle entrepreneurialism, it adds a clear path for large, predatory businesses to co-opt the regulatory agencies for their own needs. This is exactly what happened in the Gulf Disaster, and is probably happening in other relationships within the Washington regulatory world. We may never discover these until another disaster occurs.

What can small business leaders do about this? First, let your elected representatives at all levels of government know your opinions. Tell them why over-regulation hurts your small business. Tell them the good your small business does in the community. Tell them your mission and vision. Tell them why they need to leave you alone because you understand your market better than they do.

Second, team up with other small businesses. Join an association that truly represents your needs. Be cautious of joining a large association that purports to speak for small business, but in fact has been co-opted by big, greedy businesses looking out only for themselves.

Third, examine your business plan and make sure you see a path to the future that can evade the worst of the regulatory fiats that are sure to come out of Washington in the next few years. It may not be possible to stay clear of everything, but pay attention to the limits such as employees and revenue that are used to define the targets of regulation.

Finally, pay attention to politics. Too few small business owners spend the time necessary to influence elections. That needs to stop because it is the only way you can move your weight a little further out on your end of the see-saw and prevent the big bully on the other end from stranding you in the air.

The tipping point in the USA is not here yet, and with any luck those of us on the upper end of the see-saw today will begin to realize we need to slide farther out now, before it is too late.

In the late 1980s my business career reached a fork in the road. Having left an executive position at a computer hardware manufacturer, the choice for the next source of income came down to two options: consider a CEO role at a company in a city about an hour away or go into business for myself. You may be facing a similar pair of options at some point. Now, 23 years later I’m glad I took the road towards independence. Making the decision was a bumpy road however.

Choosing to be my own boss was relatively easy because as an employee at whatever level, chafing at the bit and second guessing bosses made my business life difficult at times. In considering the CEO opportunity, not only did the daily commute (moving was not an option for family reasons) pose an obstacle, but since the company was venture capital financed, the real bosses were those who put the money into it. Satisfying them was a big part of the job, and that might have been a challenge, and it was definitely an unknown.

During the six months I was searching for the right next step, the career guidance firm I worked with included assessment tools that evaluated your ability to be an entrepreneur. Not surprisingly, I scored high in that category. But what sort of business was right for me? They had an assessment for that, too. It pointed me towards a B2B business, and identified potential franchisors to consider.

But wait! Wouldn’t a franchisor be a boss, too? Wouldn’t it be too constraining to live within a system that shoehorned me into a particular mode of marketing, sales, production, etc? After rationalizing those concerns away, I started down the road to accepting a franchise that was in an industry with which I was familiar, included extensive use of computers in the business, and serviced the needs of businesses.

It sounded good, I sent the initial deposit, and then began to review the franchise agreement with the aid of a counselor at the career guidance center who had been an attorney for a franchisor. We found a number of issues and my negotiations with the franchisor became sticky. The relationship ended suddenly when my check was returned with a Dear John letter after three months of trying to nail down the agreement.

In retrospect this was the best thing that could have happened to me. Concurrent with the negotiations, I networked within the local business community and my banker connected me with a business owner in a nearby town who owned the same kind of business, but was not a competitor. Through him I met an equipment distributor who convinced me that he could provide me with the complete set of equipment and ancillary items needed just as effectively and at less cost than the franchisor. He also made an important point to me: the primary benefit of the franchise system was its marketing guidance. Finding people who could operate the equipment, developing the financing, and most of the other details of starting a business would fall on me shortly after the franchisor blew into town, set me up, and then left. Since my career to date had been in marketing and sales, there seemed to be little benefit in becoming a franchisee and paying a percentage of revenue for ever, primarily to gain access to their marketing system and support.

DIY worked for me and the business went well. But after about ten years a competitor saw synergies between our two businesses that enabled him to gain a foothold in a different market and he bought me out. (Along the way I had acquired another business which was an interesting experience. And selling mine was an odyssey that proved stressful for both seller and buyer. But that is another story.)

For me, entrepreneurship is not the same as being a franchisee. There is immense satisfaction in starting from zero, making the necessary connections, and then executing a marketing and sales plan that works. But that came about because I had some previous knowledge about the business, absorbed detailed knowledge from every source I could find, and networked extensively. And continuing volunteer roles within the community developed the personal connections that led to more and more business.

What about you? If you find yourself frustrated and constrained in your current business role, what are your next step options? If you are not sure, use some assessments to learn more about your personal style, your value system, and your interest in independence. Decide whether running your own business within the system devised by an experienced franchisor is the right way, or whether you need the complete freedom to do it on your own. If you are an independent type, then go for the DIY, but be smart about it, Make a good business plan. Line up your advisory team, make sure you have plenty of resources (cash to invest and other cash to live on for a number of months) and then take the plunge.

On the other hand, if that path seems fraught with excessive risk for you, look into buying a franchise. And if you take this route, make up your mind to get everything you possibly can out of the franchisor. Exploit the business system provided to you, absorb the training, and milk the support staff dry. Become a squeaking wheel in the early months of your new business and then as your fledgling business matures, understand that you will develop a love/hate relationship with the franchisor. You will become exasperated with them, and they with you. But it is a relationship you need to nurture because your future is tied to theirs and vice versa.

As a teenager, I became keenly aware of the vagaries of being in business for yourself, since I watched my father struggle from time to time to make ends meet and grow his professional business. I vowed then that I would never get into a situation where my income was so uncertain. What I overlooked was the fact that as an entrepreneur, he was free to call the shots on his time, something most employees cannot do. He also enjoyed many activities and volunteering that an employee would find hard to fit into daily life. These are the benefits of owning your own business.

People define success differently. And it isn’t always about making the most money. At least I came to the realization that owning my own business would work better for me. It did. And I wish I had come to that conclusion ten or fifteen years sooner. If the urge strikes you, give it serious consideration. Life as a business owner is sweet…except when it’s sour (which isn’t often!)

It’s one thing to make decisions that affect others more than yourself; it’s another thing altogether to make a decision that has a profound effect on your own life. That’s the kind of decision my wife and I made in November 2006.

That fall we became the only members of our family remaining in the Philadelphia suburbs. We were living in the home we had occupied 27 years. For the first time since 1979 we had no family nearby—after always having live-in kids, parents in life care communities, or an adult child close. Our son and his family had recently moved from near us to Sudbury, Massachusetts, and our daughter lived with her family in Broomfield, Colorado. Both our parents had died and we found ourselves “home alone.”

We decided that it was time to move closer to our kids. But which one? Which of the two is least likely to move in the future? That’s a key question. The “winner” was our son and his family: our daughter-in-law, a 10 year-old granddaughter and a 5 year-old grandson in Sudbury.

Thus began a two-year process during which we projected a winter 2008-09 move-in date to a newly built home in a 55+ community in Sudbury. But it didn’t work out quite as planned.

In September 2007 while we were on vacation, a water pipe burst in our home ruining much of the first floor hardwood and causing extensive water damage to 28 years of “bits and pieces” stored in the basement where it had literally rained for 24 hours. The move decision time had arrived more dramatically and much sooner than I could have imagined! The flood precipitated (no pun intended) the Herculean task of cleaning out and dumping a lot of our accumulated stuff. Suddenly a year had been removed from our previously sedate schedule for downsizing.

The professionally done cleanup produced a home that, with a little more work and staging, would be ready to sell in the spring of 2008. So we moved our relocation schedule up, and in October 2007 picked a different home in the Sudbury 55+ community, one that was scheduled for March 2008 occupancy.

March 2008 proved to be only a guesstimate, however. With a horrendous 2007-08 winter in Sudbury, the closing date was slipped and slipped, but never more than for a few weeks at a time. And never with a true “date certain.” But we decided to put our house on the market in March 2008 and hope to sell it before we were forced to close in Sudbury.

Another decision was to price our house competitively, because the housing market was already softening. We were given excellent “intelligence” from our realtor, and set an attractive, but not a distress level price. We had about 20 showings in the first 8 days, received three offers, and ended up accepting an excellent one from very responsible buyers. We closed on the sale June 27. This seemed a positive omen regarding the decision to move to Sudbury.

But now we were homeless! The Sudbury closing date was vague—sometime in July. So we decided to store the furniture and live in a residence hotel in the Sudbury area. This gave us time to watch the progress on our home, plead for an earlier closing date, and finally occupy it July 23, 2008.

None of these many decisions really affected our lives as much as the actuality of leaving a familiar place after 29 years and making a fresh start in a lovely old New England town about 25 miles west of Boston.

My wife always has been more comfortable adapting to a new community than I have. We had moved 6 times before and I acquired a built-in set of relationships, since each time the move had been to take a different IBM job. I walked right into relationships at work. But I took a while to develop other relationships within the new community. My wife had to develop a new set of relationships in an unfamiliar community after each move and she learned how to do that.

This move has been different for me. No built-in relationships. Even though retired, I had been working part time as a group facilitator and executive coach in the Philadelphia area and had a string of connections a mile long. This kept me active and out of the house a good deal. But none of those relationships offered a built-in set of connections in Sudbury.

Of course one of the relationships we cherish most has now been restored: our grandchildren are 15 minutes away. Our grandson, now 7 and growing taller every day, had spent the first three years of his life literally in our arms several times a week. Then he moved with his parents and older sister to Sudbury. Only 3 years old at the time, he could not understand why he could not see Grammy and Granddad each week. He never got past that and so our move here has been a good thing for him and for the others as well. Tommy visits a couple of times a week after school and stays for dinner. I’m not sure who likes it more: Tommy or his grandparents. We have a lot of fun together.

Fortunately my hobbies and interests have helped me meet folks in the Sudbury area. Contrary to what you might expect in a traditional New England town, the people are warm and welcoming, and happy to include us in their community activities. As an experienced choral singer blessed with a first tenor range, my voice is appreciated in a 90-member chorus and in a small church choir. As a photographer, I enjoy the opportunity to have my work judged in one camera club, and show my work in another. Field trips with photographers also have proved enjoyable and educational. I also have continued as a Crown Financial Ministries Money Map Coach helping financially stressed families develop spending plans and pay down debt so they can become financially free. The calls for help come from people almost daily.

I am still looking, though, for something more that will take me out of the home during the day. While I maintain a telephone coaching role I greatly enjoy with company owners, I would also like to find a reason to be out of the house more in the daytime.

The question now is just how serious am I about that? Joining a chamber of commerce is a possibility, but that assumes a commitment to build a coaching/consulting business here, and I’m not sure I want to make that “investment.” A volunteer role that can use me effectively is another possibility and I need to explore that more seriously.

I must admit, however, that I enjoy the luxury of consuming two cups of coffee, the Boston Globe and the Wall Street Journal each morning. And I am shooting some interesting outdoor images around New England. But that is not the same as developing something self-challenging outside the house.

A string of decisions have led us here to a great home where I no longer concern myself with snow removal, leaf raking, lawn mowing, etc. I could accept this new status quo and enjoy a low pressure life—that’s one decision. But those who know me understand it would not suit me for long.

Decisions, decisions. I still need to make more of them. It’s certainly a do-over time for me after 29 years in one place. And it’s a significant change. But change seems to be in the wind in 2009. And I like change. Stay tuned!

PS: Any suggestions?

Some readers have asked me to write a more personal blog—to write more about my activities, etc. So these blogs fit that genre. Perhaps these entries, which are about my life and activities, may be of use to readers. If not, please don't waste your time reading them!