Not Exactly

Got this in response to You, Inc.  You, Inc. was a post on the tax advantages of owning and running your own business.

"Great post. I've been thinking about this recently also. So I assume you have your own business?  Can you take a post and explain to us the entire process and what your business does to try to make a profit?"

Love the beginning, then it goes downhill.  The poster assumes that me, the postee, has my own business.  And I do but probably not in the way the poster believes. 

So,  this disclaimer.  Whatever success I have had, whatever money I made, I made working for The Man.  Yep, corporate guy for 25 years until I shot it out with Cheney and his gang.  And one thing for Cheney, he shoots straight.  Just ask his lawyer friend. 

But I had the good fortune during those years to be around a few very smart people and a lot of really dumb ones and saw a lot of dumb mistakes and some really brilliant moves.  I also got jobs that included evaluating new products, financing start-ups, helping bail out really sick companies and watching companies revitalize themselves.  I never had to put my money on the line but I saw people that did and learned from them.      

The poster continues "I've been thinking about this recently also."  Who doesn't?  Probably sitting in a kind of dull job thinking "If I ran this place, boy, would things be different!" and that is good. 

"Can you take a post and explain to us the entire process and what your business does to try to make a profit?"  Yes, children, gather around and I will tell you how to make a million.  And in one post.  Just kidding. 

But first, let's look at what everybody thinks about when they think about their own business.  My picture is of a benevolent despot, adored by his employees, has a niche product with pretty good margins, and drives home, or the club, every night about 4:30 in his vintage Austin Healey 3000.  Which is exactly what the Steve Martin character did in "Father Of The Bride."  And he came out in that movie as pretty much a bumbling idiot.

Your tastes may run more to reeling back time and starting that coffee shop selling way over priced coffee or buying an operating system from IBM for peanuts and starting Microsoft or being in that garage with Steve and the other guy dreaming up Apple.  The old "Why didn't I think of that?" school of entrepreneurship.

Can't go back in time though.  But the reader's question remains--"explain to us the entire process and what your business does to try to make a profit?" 

So enough beating around the bush.  The secret to success in owning your own business is 1) selling a product or service for 2) less than it costs to make that product or provide that service and 3) reinvesting in the business.

Knew you wouldn't like that.  That's why it took so long to get here.  I hate to disappoint.  And I hear the delete button getting slammed as we speak. 

But that is the truth.  We called it the Checkbook School of Finance.  Because running a business is like running your life.  You get paid and you pay your expenses.  Hopefully, have a bit left over to invest.  If you do, you are a successful business.  If you have credit card debt and car debt and school loan debt and rent debt or house debt and a significant other that spends money like a drunken sailor or you spend money like a drunken sailor, then you are not a successful business. 

But this is so dull.  And so obvious.  I realize that so tomorrow will begin with some true life success stories and real life disasters to illustrate the process.  Tomorrow--The Sardine Man of Sao Paulo.