Posted by: kandersen | May 10, 2012

Starting A Business – Things to consider

It seems that every once and a while someone will ask me about how to start a business and I am usually hesitant about giving a thoughtful answer. Usually the first question that comes to my mind is what makes them think that I am any kind of expert other than they know that I own a company. Owning a business does not make anyone an expert and I claim nothing of the sort as I learn new tricks all the time.

This blog is by far no where a complete guide and assumes that the reader has some brain to know the subtleties of all the back end crap that goes along with running a business (advertising/marketing, sales taxes, employer tax ID#, Inventory tracking, P & L, AR, etc, etc.) So for what its worth I thought I would write down some of my thoughts on the matter here for, its really a loaded question that really needs to be re-worded so that the correct answers can be given.

After giving the question some thought I realized that the question really should be “How do I succeed in a business”. Starting a business is really not a huge deal or undertaking. I mean really, goto the city or county where you reside and throw a few dollars, get a business license and your now “in business”. Of course this piece of paper in no way will automatically put you on the road to prosperity by itself.

As with anything the devil is always in the details.

Living in a smaller community, over the years I have seen many a business come and go. Some successful, some with little or no fanfare. Just proverbial flashes in the pan and then there are those which are like zombies, Just barely hanging on. Even in metropolitan areas there are business that can be classified into these 3 groups.
EDIT: Actually there are 4 groups where the fourth group is the one off’s those businesses that became wildly successful (microsoft, google, coca-cola, etc) Those are always lofty goals to strive for but the law of averages prove that very few entrepreneurs will ever attain those goals. Not saying that you cant or wont, Im just saying the odds are against it.

So you want to start a business. I have heard the statement that you should do something that you love to do anyway or at least that’s what my grandmother used to say. But I have a couple of thoughts on that. First off no matter what you “love” to do, given enough time doing it, it will turn into work. I dont care what it is. Eventually it will become old. That’s what made the hobby fun in the first place. Being able to walk away from it for a few weeks, Not having it tied around your neck 16 hours a day.
The second thought is that most things people love to do are hobbies and hobbies are quite limited on the customer base which you will be serving for the particular area. Severely limiting your overall customer base will hurt the business if not completely set it up for failure.

Know your customer

Ok, Im not saying that a hobby business is doomed to failure, but if your considering that route you need to know who your customer is going to be. If your planning a brick and mortar business, IE a shop on main street USA. Then you need to take advantage of the census data to know how many people live there. is really informative to give you some idea of how many overall consumers you could have. Further research may provide you with some information as to how many of the population would be interested in what you have to sell them.

I could make examples of good and bad hobby business but as a general most hobby business turn into exactly that a hobby. They usually perform low on the profit margins, have difficulty paying their own way and the business owner namely you end up working for free. Its a typical zombie business that an owner invests a huge amount of time to keep the lights on. In most cases the thought that it will eventually turn around or perhaps the added sales at Christmas time provide a glimmer of hope towards better days. Regardless of the personal feelings the business becomes a burden. One that is a lot like keeping grandma on life support when deep down you know there is no hope and plug should have been pulled a long time ago.

So this leads to the big question of. Do you want to make money or do you want a hobby? Obviously you would like to make money. Making that money does come with some risk. If your going to risk your time and money opening and operating a business you should try to think of a plausible idea. Something that would appeal to the widest spectrum of customers possible. Some business idea that can compete with a big box store or provide NEEDED services that few or nobody else provides. Ideally something simplistic and “cookie cutter”. When I say cookie cutter I mean a product or service that is easily replicated or sold with minimal effort on you or your employees behalf.

A lot of people tend to gravitate towards specialty shops. They sell wedding dresses, tobacco, sell designer clothes or something along those lines. Which is fine if you have substantial overall population that the fraction of which will actually darken your door instead of grabbing something “doable” at a lower price from a big box store. here again, if you dont understand your customer you could be heading down a primrose path. I have lost count of how many businesses I have seen come and go. Some of them were the most stupid/redundant/useless ideas I ever seen. Here again tied back to a hobby or personal interest manifested into a business idea.

Asking your friends if XYZ store/shop/service is a good idea most friends will say yea! because they dont want to hurt your feelings. Most friends would say yea Bob, I always wanted a local store to buy pottery at. A public survey or even a few cold calls can give you an indication of how your product or store will fare in an certain area. Your friends may become your customers and you may understand them but your friends will not be enough of a customer base (unless you have a lot!) to keep you in business.

Know your competitor

Keep your friends close and your enemies closer. said the old proverb. Business is not unlike that in the respect that you need to fully understand who your competition is. Because if you have competitors your planning on going up against you will need to know their caliber. Look at their products, services, prices, customer service, Years in business, if they are busy, etc. With the information gleaned you can make a more educated decision if you wish to go head to head with them. Unless they are total incompetent its usually not a good idea to goto war as the new kid on the block it can be a hard boat to row.

The Business Plan!

A business plan is not just a tool you cook up to get money from the bank. A business plan is the actions you will need to draw up to start, run and the often forgotten part, exit. The simple truth is that most businesses fail within the first year. So you will need to have an exit strategy of how to shut down and dissolve the debts etc. A serious entrepreneur usually has had multiple businesses that failed and failure is a good thing. You learn from them and what not to do next time. Its nothing to be ashamed of, you just need to learn from the experience and then be able to apply that knowledge next time. You wont find that knowledge in any school. Other than the one of hard knocks. All you can do is to plan as well as you can to have the best shot of success.

When writing a business plan, make sure you are honest with yourself. You can cook a business plan to show all sorts of wild and exotic figures but unless they are based on fact your just lying to yourself. Here is where knowing your customer, knowing who your competing against and doing as much study about that particular business comes into play. Once completed you can then decide if that is the business you want to get into.

Best Of Luck!

Posted by: kandersen | January 26, 2010

Google Founders Set To Sell 10Mil Shares Of Stock

So I see that the founders of Google are going to sell 5mil shares of google stock each. Now that can mean one of two things. They want to loose control of their company or they think the company is heading for serious troubles. In what I can only see as a possible Enron situation with a company that lets face it. Sells click advertising in a down market no matter how innovative you are companies are not spending money on advertising.

Google Founders Sergey Brin (L) and Larry Page

Google Founders Sergey Brin (L) and Larry Page

Google has spent money like it was growing on trees the past few years with one notable purchase of for the paltry sum of 1.6 billion dollars. Which coming from the Internet industry I cannot see why that site demanded such a high price, they already had a pretty good thing going with

Regardless of their spending habits it is reminiscent of  the dot bomb days where people were spending investment money like they had earned it drew huge salaries like the gravy train would never end. Now it appears that Google may be heading in the same direction as the other dot bombs.

Google has been quite recession proof at least it appears in their stock prices. But how do you really value a company which has virtually no assets. I mean were talking a little bit of real estate in California and a room full of servers. There really is nothing tangible to justify the billions of dollars worth of investment.  This was very appear ant during the market crash of 2008 as google hit some lows just under 300.00 per share. Since that time it has recovered some but is now on a slippery slope once again.

After the announcement of the stock sale though the SEC last Friday the stock began to tank and at close of today Monday Jan 20, it had lost another 9 percent.

I dont think there will be much to keep this from falling through the floor. Maybe a government bailout after all google is too big to fail. what would we use as a search engine? Only time will tell and I could be wrong but I smell another stinker here.

Posted by: kandersen | October 25, 2009

Made In The USA. Greedy American Trash

A simple line which really does not mean a hoot anymore. There once was a time where patriotic or personal pride would steer people to seek out and purchase products which were made in the USA.

Doesnt Mean Anything.

Doesnt Mean Anything.

With over 10% unemployment and more and more people on the edge of loosing their jobs everyday. I can only say one thing. You did it to yourself. See, it turns out that it really wasn’t the gluttony and greed of wall street that caused the economy to tank. But slow protracted death from a million pin pricks of individual greed.

It all boils down to not supporting your fellow countrymen. When you decide to purchase an item, it usually is based on cost. The cheapest product gets your dollars. Not considering that it may not support or encourages growth here in the states.  Im sure a lot of you have heard this before, but refuse to listen. Nobody wants to blame themselves for a bad situation and that is your demon to deal with.

Point is since president Bill Clinton allowed the tariffs to come off of imported products the acceleration of the decline has increased where products are made so cheaply by children that work for 50 cents per day. There is no protection left for anyone’s job in this country.  Its unsustainable and its idiotic to think that when you buy a product made in China that it does anything good for America.

It has gotten to the point now where previously “apple pie” American companies are starting to outsource to Asia for their workforce which used to be here in the states. These are VERY BAD companies and your a straight up idiot for doing business with them. Every time you call XYZ company and end up talking to someone who cant speak English you are encouraging the outsourcing practice which is costing American Jobs.

Its not too late, and it will take some sacrifice on the American consumer to buy a bit less, but buy American. We can turn this around. But not if  we keep stabbing  our neighbors and friends in the back by buying items that are not Made In The USA,  At the very least Assembled In The USA, still provides someone here a JOB.

Do the right thing. If you Buy American, You provide Americans JOBS. you buy Made In China, Taiwan, Mexico etc. You Provide Them Jobs.

Posted by: kandersen | September 23, 2009

SPAM – Popular Again

Its a sign on the times. As a side note of the current economic situation SPAM , Special Processed American Meat is making a new debut on the American table. Not since WWII have so many people been enjoying the familiar yet somewhat unidentifiable jelly covered mass.

Hormel the company that makes SPAM must be doing well as they are currently running advertiesments to show how “hip” and “exciting” SPAM can be.

Not everyone grew up during WWII when many creative ways to actually eat the meat besides fried or chopped up with potatoes. Hormel has a website which provides a few tasty ways to ham it up with SPAM.

Lest we forget that memorable Monty Python SPAM skit which showed some of the popularity it has in the UK as in my own opinion is about the tastiest thing on any traditional English menu.

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