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Harvey Mackay
Column
For the week
of August 16, 2010
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Downturns Can
be Fair Weather for Business Liftoffs
The official unemployment rate
today hovers around 10 percent -- far higher if you include those
who have given up looking. Still . . . things have been worse.
The U.S. unemployment rate during the Great Depression reached
a high of 25 percent in 1933 and remained above 15 percent through
1940.
Nobody in their right mind would
have thought of starting up a business during a rocky, hardscrabble
era like that. Or, would they? Research business history from
October 1929 through 1940. You'll find some astonishing, I dare
say, uplifting facts:
- Howard Johnson's was a single
restaurant until 1932. Through franchising, it was able to add
40 more restaurants by the end of 1936 and had a total of 107
units by 1939.
- Boeing created the first modern
airliner -- the 247 -- in 1933 at the depth of the Depression.
- Hewlett-Packard originated
in a Palo Alto garage in 1935.
Hormel introduced its canned Chili in 1936 and SPAM in 1937 while
the Depression was in full swing.
- The Estée Lauder company
came into being in 1935.
- The Carlson Companies -- today
a multi-billion-dollar behemoth -- was founded in 1938 by Curt
Carlson with a $55 loan.
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Well and good, you may say,
but this was all before the era of information technology. Remember
the face of technology is an ever-changing one.
The world of high-tech audio
today may be all about MP-3 and Super Audio CDs.
Back in 1934, while the likes
of John Dillinger and Baby Face Nelson were spraying Tommy guns
into the banks of Middle America, the Hammond organ was being
invented. This seemingly tame breakthrough revolutionized the
sound world from radio broadcasts to church services.
A downturn can spark great things.
I've learned more than a few people who lose their jobs in a
stalled economy decide to give the "entrepreneurial thing"
a shot. They may end up investing their entire life's nest egg
on a fling.
In 1975, at the end of another
serious recession, Roger Schelper and his buddies decided to
open what is today Davanni's -- a unique New York-style pizzeria
in Minneapolis-St. Paul.
Launching a business, especially
in tough times is a high risk play which you should only consider
with a cool head, a solid plan and the anticipation you will
have to dedicate an incredible amount of personal work and patience.
Here are some of the things
Roger learned in his venture that any budding entrepreneur will
do well to bear in mind during a downturn or, for that matter,
at any time:
- Research the market carefully.
Your chances often hinge on identifying an attractive, unoccupied
market niche -- one you have the know-how and raw ingredients
to fill with authority.
- Know the success factors.
In the restaurant business, for example, you could be the greatest
chef since Julia Child and still end up chowing down your own
leftovers. Running a successful restaurant has a 3-course menu:
Location. Location. And location. Roger's team zeroed in
on a high-density trading area of customers with ideal buying
traits, finding an optimum site with the right zoning. They
were cooking with all the right ingredients.
- Be tight-fisted about raises.
Starting with your own. Roger clocked 80-90 hour weeks from
the get-go. He gave himself his first raise after the business
retired a small loan. Get this: This was the first time the
business paid him even minimum wage!
- Do something you love. "If
you don't, you won't be able to put in the necessary hours to
make the venture work," Roger notes.
Today Davanni's has more than 20 pizza shops and a dedicated
customer and employee base. But there's one other fact worth
remembering. Roger was the kind of guy who was paying his way
from the time he was eleven -- shoveling snow and mowing lawns
throughout the neighborhood while he carried two paper routes.
So, before you make the leap and open that bed-and-breakfast
or sink your savings into a digital widget factory, take a long,
hard look at your own track record. Does your past say you really
have the makeup to take this kind of a pounding?
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Mackay's Moral: |
Entrepreneurs who make it are usually
born entrepreneurs to start with. |
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The Author  |
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Harvey Mackay is a nationally
syndicated columnist for United Feature Syndicate. His weekly
articles appear in 52 newspapers around the country, including
the Chicago Sun Times, Rocky Mountain News, Orange County Register,
Minneapolis Star Tribune and Arizona Republic.
http://www.mackay.com/
Copyright, Harvey Mackay. All rights reserved. |
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