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Friday, August 21, 2009

Should you start your own business?

I've been following (and enjoying) John Poole's Constructionomics blog as he struggles with the challenges of unemployment and is now at the early stages of starting his own business. Recessions are often the best time to open a business because you simply can't afford bad habits and if you are determined and skillful, you can find opportunity.

But you need to find the opportunity, of course, and that is the challenge for anyone who is uncomfortable with the selling occupation. Starting up, unless you have some incredible good fortune, you will need to sell -- and it rarely is easy, especially when you don't have a track record.

John has wisely (but I deliberately put wisely in small type) chosen to use resources like SCORE, operated by the SBA. Experienced businesspeople, unless they live in the government space, tend to be a little wary of government assistance programs. Yes, you can access them, and if you play the system well, make good money in that space, but it can be an uphill battle as you battle bureaucracy, existing relationships, MBE rules, and the like.

I'm happy to note that quite a few readers are googling this blog through my references to the Brooks Act. Anyone hoping to sell construction design, engineering and project management services should read this stuff carefully because unless you are well connected, you won't gain access to direct government business and you will be relegated if you are "lucky" to be an underpaid sub-contractor for much government infrastructure work.

Sure, it is easy to tell a budding entrepreneur what won't work, but what will? Here things get complicated because the advice I gave myself would not necessarily resonate with others. Before I started in business in 1988, I had a secure, relatively high paying government job, which I quit to sell real estate. But I made that truly risky move at the end of a boom, where neophytes in the real estate industry could do well. (I simply don't know how well someone just starting out as a commissioned Realtor would do now.) The decision proved wise in an important way: I needed to learn how to sell to be in business, and that is just what I did.

Can you overcome lack of selling ability/experience and knowledge with great marketing? To a point, yes. Great marketing (including great blogging) often creates opportunities, and it is wonderful to receive the invitation to propose a project, or have your call returned quickly because a previous or potential client recognizes you from your marketing. But if you can't ask for an order, and actually go out and find the business, all the marketing in the world won't do you much good.

My advice to John would be to be ready to accept a commission sales job, whether it be canvassing, telemarketing, or whatever. Not as a permanent career, but as a base for learning some of the realities of selling. Spend three to six months doing this stuff and you'll at least understand the basics and receive some rudimentary sales training. Perhaps take a few different jobs -- no one is going to hold it against you -- and cross fertilize ideas and insights.

My next piece of advice is going sound like sacrilege in relation to my previous posting (and with respect to the misfortune befalling anyone who tries to canvass at my home.). I think anyone starting out in the construction industry has the best chance by seeking and winning smaller residential jobs, and the best and most inexpensive way to win these is to pound the pavement -- yes canvass! You certainly don't need to worry about the Brooks Act!

(You can assemble a crew of inexpensive subs and suppliers to do the actual work, of course.)

John and others should take this advice with a grain of salt. I am not the oracle of brilliance and one thing is clear, there are many different paths to business success. It is good to get started.

1 comment:

John Poole said...

Thanks for the advice Mark. I think you are absolutely correct. I was actually involved in the start-up of an engineering firm about five years ago that didn't work out, but the sales and marketing experience I got is very valuable. Also, thanks for that info on the Brooks act, I may have to go to the DC Design and Construction networking events as well as Philly. Thanks again.