Ever since I could recall, I am always scheming. Not scheming in a bad way. I’m just always looking for an angle. And angle that will create a successful business. Sometimes I get mentally worn out and I don’t have any ideas. And then I announce to my family and friends, “I’m taking a break from starting businesses for the rest of the year!” Low and behold, the next day, I’ll have an idea like the ride share business to NYC from my town, where you can buy a seat to ride with a neighbor. The slogan was “cheaper than Uber, less sucky than the bus”. My wife didn’t laugh, but I thought it was clever. After a couple of disasters, I started to gain some clarity around attributes I’d look for when thinking about future ventures.
Keep in mind, these are rules for me. For MY lifestyle. I’m not saying these need to be your rules, but I will explain the “why” after each rule.
- No brick and mortar. In 2006, I quit my job at Bank of America. You know are on the verge of being promoted to a senior credit underwriter, right? My boss remarked. I knew, and I really didn’t care. I wanted out. So I opened an ice cream, Italian ice, and gelato shop. The name was Ice Ice Baby. And trust me when I say that the clear copyright infringement of the pop song of the same name from the 90’s was the least of my problems! I had never worked retail before, and….it sucked. Especially when you aren’t making money. I was a slave to the store. I tried to open 7 days per week, which would have run me ragged even if it was making money. The fact that is wasn’t making money has me yearning for the days of easy pachecks and leisurely days at bank of America. After that experience, I vowed then and there no more brick and mortar. Do you know how many $3 ice cream cones you need to pay $2000 in monthly rent?
- No Retail, Especially Food – I bought a pizza truck a few years back. I know, I know, that’s not a far cry from brick and mortar. At least with the truck, I only rolled out when I had a party or event booked. But it was still retail. And in retail, especially food, you are talking low margins which requires high volume. If you look around any decent sized town, you’ll notice that some spots turn over again and again. Why? You have to sell a lot of pizza, or baby clothes, or widgets in order to cover you overhead.
- No Set Hours. This one has really come into play now that I have kids. I’m the lead parent. My wife is a consultant for a big firm and she travels about 6-10 day per month. This means that I work around my kid’s schedule.
- No Debt – Being a consultant that regularly wades through the carnage of defaulted SBA loans, I am resolute in my opinion that it’s much better to build a business and sell it, than it is to be the guy taking on hundreds of thousands of dollars of SBA loans in order to fund the purchase. Liens on homes, personal guarantees, and raiding my 401K are things I am pretty certain that I’ll never do, no matter how excited I am about a business.