It has been 28 years since we owned the Norsemen Restaurant/Walker Lake Resort, and the Tourism Industry has not substantially changed, with the exception of the technical advances that are supposed to make life easier when managing a business. Chapter Twenty- Five of The Last Resort story is the “Lessons Learned” section, which presents 20 key points to consider when buying or starting and running a business based on our experience. Now, 28 years after they were written, I found no reason to change, add, or delete any one of these lessons during the editing process, as they can still very much be applied today. It is said that the greatest learning opportunities come from our failures, so I would like to offer interested parties the chance to learn from mine, in the hopes that you will succeed where we did not. Although all 20 points form a good conclusion to the story, I felt that there were 3 top lessons that I would emphasize for anyone planning on going into business.
Top 3 Lessons Learned
Lesson No. 1 The Dream vs. Vision
The dream is a vital component when one is thinking about starting their very own business venture, but vision lets you see things clearly. Reality has to be the main ingredient when starting a business. One must see the market conditions, the strengths, and vulnerabilities of the business. Business plans and backup plans must be part of the navigational equipment guiding the business on it’s course. In the Norsemen story, the dream was always overshadowing the vision and reality.
Lesson No. 13 Can You See the Forest for the Trees?
This one is appropriately Numbered Lesson No. 13. This is the unlucky symptom that causes problems for all entrepreneurs. Vision is blurred or obstructed by issues that are not the root of the problem. Too often people in business cannot see the big picture, and poor decisions are made as a result. It should be remembered that the business will be an ongoing operation for years, so not all decisions should be made for the short term. Many days at the Norsemen we were so deep into the forest we could not see any trees.
Lesson No. 17 People are your Most Valued Assets
Good partners and employees that are trusted and valued for their expertise and knowledge are the prime assets in any business. People become good ambassadors for your business, especially when there is a good trusting relationship. The Norsemen had a few problems with the partnership at the beginning, but once that it was out of the way, the operation began running as smoothly as silk, which is accredited to the excellent relationship that existed between the employees and management.
Looking over the other 17 Lessons Learned it as described in The Last Resort , it was difficult to prioritize or rank the remaining lessons. I came to the conclusion that collectively, all 20 Lessons Learned are very equally weighed. Thus, anybody interested in becoming an entrepreneur could not go wrong by reading all Lessons Learned in The Last Resort and keeping these 20 points as a type of checklist while you plan your business strategy.
The majority of the working population are employed by a government, company, small business, another person, or are self-employed. Within these main categories, there are thousands of job descriptions, for which many can be related or connected in some manner. During their time of employment, most people will acquire a great deal of knowledge about the specifics of their job. In many cases, there are spinoff jobs or related jobs, for which people can become knowledgeable about other jobs. For example, if you are a car mechanic for a major car dealership, you could easily develop the ability to sell auto parts, car tires, or start your own small car repair garage or auto body shop. If someone were to consider changing their occupation, there is typically a related field that one can delve into for a change of scenery. However, to successfully change careers, one must have the confidence to leave their old post and branch out into a new dimension. The capital investment to make it all happen is also a key component which will develop over time.
In the story, The Last Resort , five partners got involved with the operating a small resort because they felt that each person would bring a speciality to the group, which would make it run smoothly. When we initially entered into business together, we felt that the partners needed to stay within the realm of their expertise to be successful. However, the down side of this mentality is that it resulted in the partners tended to micro-manage their own areas of expertise and little consideration was given to the sections that required a higher priority of attention if it was not their area. Instead of working as a team, we tried to function as separate entities, which was ultimately detrimental to our business success.
When changing occupations, the entrepreneur must be aware of the changes that are about to occur and try to be as flexible as possible. In my experience, things rarely go according to plan, and a certain level of flexibility is required to deal with the unexpected. If the new job is a sole proprietorship, then you must either train yourself in many areas or consider hiring help to cover most of the predictable angles. If the new venture will include two or more partners, the work can be shared or overlapped so the smaller aspects of the business doesn’t fall between the cracks.
On Becoming an Entrepreneur…
When does a person know that it’s time to leave your current position in the workforce and try your hand at becoming an entrepreneur? First, you should know what you are good at and if entrepreneurship appeals to you. While there is no one-size-fits-all response, the timing usually aligns after you have acquired sufficient knowledge and experience to go alone or with partners in your area of specialty. For every job that is lost due to modernization and new technology, there are new jobs being created as indicated by the national employment statistics. Every month, the country (in this case, Canada) boasts that unemployment is decreasing and thousands of new jobs are created due to new technologies. There are more part-time jobs being generated, which allows people to work two jobs and gain experience even in different sectors. These part-time jobs play an important role with the Boomer generation who are planning retirement in a few years so they are winding down their requirement for full-time work.
The opportunities for becoming an entrepreneur has never been greater for the general population, but especially the Millennials. In general, this generation has stayed in school longer, experienced major new electronic innovations, developed an extensive use of social media, and they will take over the reigns of the jobs being left by the Baby Boomers. With more people working out of their home offices on their own computers, people can save money on clothes, vehicles, gas, public transportation, and the need for large office space is becoming redundant. If the cost of going to work is being reduced, it should also be reflected in disposable income. Disposable income can mean more money available for investment in potential self-employment down the road. The key to starting your own business is associated with the cost of getting into the field of interest and the cost of sustaining the business.
The main reason that two or more people enter into a partnership is to:
· Share common elements (e.g., building or office space)
· Share utility costs for electricity, gas and water
· Share business expenses, including payroll
· Share the labour force
· Share accounting and legal fees
· Share the cost of communication systems
· Share knowledge and expertise
· Capture and service a larger piece of the market
In general, partners going into business together should:
· Know each other’s history, along with their strengths and weaknesses
· Establish and agree in writing the role of each partner
· Understand the limits of the service
· Establish a realistic value of each partner to the business
· Have sufficient capital to purchase shares in the business
· Establish tangible items vs. intellectual property contributions (e.g., experience and expertise)
· Establish responsibilities and hours of work
· Establish how current and new clients will be shared
Whether you have a 2-partner simple organization or a 20-partner operation, the key document that keeps the financial and legal landscape intact for the business is the Shareholder’s Agreement. In the case of the partnership described in The Last Resort , we made the fatal mistake of jumping into the business without the Shareholder’s Agreement formally drawn up and agreed to by each partner. Our group of partners/owners were frazzled from the first days of starting up, so there was a great urgency to have the Shareholder’s Agreement written and agreed upon before there was no co-operation in the management of the business at all. Many partnerships fail because communications are minimal or the responsibilities have been assumed but not discussed or documented properly. Each partner tends to veer off in different directions thinking they are on the right track.
As with many aspects in life, there are pros and cons to the method of doing things and dealing with partnerships is no exception. The better the partnership can be defined, the better it will operate.
