Before you start whistling the classic country song “Take This Job and Shove It,” be wise and test the waters. Figure out what you can do on a limited scale with your new venture before packing in your current job or wrapping up your existing business.
There are often ways to test a business idea inexpensively before you put all your eggs in one basket. Many karate school owners, yoga instructors, or dance school operators start out in a community center where they can teach classes a few times a week and build up a following before committing to renting a facility and doing it full time.
Ninety-five percent of your competitors in any city or industry will be manufacturing, selling, and marketing in exactly the same way as you are. That’s why it’s so important to look beyond your locale and your industry for ideas and opportunities.
In the late 1990s I enjoyed tremendous success by looking at what type of business-to-business services were available in the “real” world and then adapting them to the martial arts business.
Why can’t Butch Cassidy and the Sundance Kid shake the posse that’s relentlessly tracking them? On account of Mr. E. H. Herriman, owner of the Union Pacific Railway, who resents the way the two outlaws have been picking on his trains and robbing him. In response, he has put together the best team of lawmen and trackers ever assembled. Yes, he actually did this!
This is in contrast to low-level managers, who often feel threatened by the people they hire who may know more than they do. Because of this fear, they very often opt to hire people they like, someone they knew from a previous job, or someone casually recommended by a friend. They do not do real due diligence and compare apples to apples; they just opt for the path of least resistance, for the least cost, or for the quick fix.
What would Napoleon do if he were in your shoes? Or, what would Donald Trump do? What would your spouse or best friend do? What would your leading competitor do in this situation?
Very often, when you change the perspective of the person charged with solving the problem, you will see the problem and the potential opportunities in a totally different light.
I was incredibly fortunate in that fate led me into the karate business right about the time the second Karate Kid movie came out. As Warren Buffet is fond of saying about great companies like Coke, “A ham sandwich could have run a karate school at this time and made a living.” Mine was the first karate school in an affluent city of 60,000 people.
My friend Jeff Cohen was fortunate enough to get into the licensing business in the early 1980s before it really exploded. He had the rights to the Farrah poster that adorned every teenage boy’s room, but as huge as that was (the best selling poster of all time!) it paled in comparison to his next venture. He took a risk and bought the rights to a very strange looking doll for which he paid $40,000 and 10% royalties. Ten days after the movie opened, he wrote his first check to Stephen Spielberg for $990,000. The movie was E.T.
In this day and age, the more you can outsource, the better. Outsourcing reduces fixed overhead for wages and space. Outsourcing allows you to change vendors quickly and easily if they are not meeting expectations or deadlines. Outsourcing allows you to gear up or gear down easily. Outsourcing allows you to get specialized help rather than forcing your existing staff to do things they are ill-trained or ill-equipped to do well.
Outsourcing usually costs more per hour than doing it in-house, but overall you will save money. For example, a lot of my clients try to do telemarketing in-house, especially when things are slow in the winter. The employees they reassign to make the calls are usually untrained, hate it, and generally fail without finishing the job. It would be far cheaper and more effective in the long run to outsource this to a telemarketing company and let them deal with the headaches.