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Discussion #7 - Business Ownership

As the global game of musical jobs intensifies, many are turning to business ownership as a viable alternative. This is not a bad thing, as jobs would not exist without a business making a profit underneath, from which wages are paid. Owning a business has it's risks, but certainly has it's rewards. Being your own boss, self-motivating & there is really no ceiling on how much you can earn/make (if you're willing to have employees). There are 2 major options when choosing to start or buy a business; franchise or non-franchise. The differences are pretty major. I have personally owned both, am certainly not a guru on the subject, but will share what I've experienced/learned. Being a franchisee means that you own a license/contract to run a business to the satisfaction of the franchisor. You will own chattels & possibly even the real estate, but this contract is really the essence of what you own. Pro's to being a franchisee are:

1. Marketing muscle (shared expense)
2. Consumer confidence (the public generally love franchises)
3. Instant goodwill (reputation) & formula for success
4. Ongoing support (assistance, inspections & discipline)

The pro's to being an independent are:

1. Be your own boss
2. Come up with your own ideas & marketing strategies
3. Much more control over your life & business

There are a few other differences, the main ones being your chances of success are lower as an independent, & (in my opinion) your quality-of-life is higher as an independent. Also, big corporations and franchises are gobbling up most of the market share. Your best bet if you would like to start or buy a non-franchise; choose a business that the big corp.'s will likely never be interested in. Also, if you are successful as an independent business owner, you may decide one day to become a franchisor yourself.

The biggest key to success (as noted by some of the richest entrepreneurs in the world) is perseverance. Virtually all successful business owners have failed numerous times before finally succeeding. There is business acumen built from both. Competition in this era is ferocious, so if you feel you have a great idea/formula for success, just keep on pumping away at it (while ignoring the nervous/negative nellies around you).

Some do get extremely lucky, and their business does take off like a rocket right out of the gate. The vast majority (of successful businesses) however, do not. Many fizzle out, fizzle back in, sputter, or just outright don't take for many years before finally taking off. This can be the most challenging aspect of starting a new business from scratch. Knowing when to persevere for years, and when to pack it in and try something else.

Approx. 75% of the non-franchise "bricks & mortar" business startups will fail, but this means that 25% will succeed. If you keep trying, the odds are very good that eventually you will be one of them. The vast majority of people in this world are only comfortable with the idea of having a job and getting a paycheck. This is actually a good thing, as it means less competition for you, both for customers and for employees.

Perception is also incredibly important in business. There is a perception "hump" that must be crossed over. Once this is achieved, things really start to take off. Marketing is also hugely critical in any form of venture. The marketing landscape has been changing dramatically recently, with traditional methods on the decline as more & more people are focussed on their digital devices, but really, it's whatever works. The main thing is that you do it.

People generally only support businesses which are viewed or perceived as already being successful, and not before. (sounds a bit dark, but it's a fact). This means that it's extremely wise to "fake it till you make it". Three more excellent keys to success would be to 1. Get/stay extremely organized. 2. Replace rushing with time management (whenever possible), and 3. Do not be afraid to put in lots of hours, especially since owning a business is normally far more exciting than punching a clock.

It makes me laugh when I hear people talk about billionaire business owners like Elon Musk and Donald Trump. People are shocked and shareholders often traumatized when they do their wild & crazy things. The shares may even go up or down as a result. What many people don't realize though, and what these uber-wealthy entrepreneurs do realize, is that virtually all attention from the general public is good attention. It will only further build their brand(s), regardless of whether it's considered good news or bad news. News in general is the best form of marketing there is (next to word-of-mouth), as most people hate advertising, but absolutely love their news. Especially if it's juicy, controversial, or shocking.

I recently heard someone say (on the news), that they view Elon as being a brilliant tech mind, but not so much a brilliant business leader. I would argue that even PhD or MBA business degree holders most often have an extremely tough time starting even one hugely successful business from scratch. Multi-talented geniuses like Jobs and Musk are not exactly a dime-a-dozen these days. People like this live their life under a huge microscope, and every move they make is watched & scrutinized by many all over the world. If they had a meltdown after every bad news story, they wouldn't get very far, and as well, it only further builds their brand awareness. This same principle works extremely well for musicians and actors as well.

Two further amazing examples of how powerful perceverance can be to success in business, would be a businessman by the name of Fred DeLuca, and a pop singer by the name of Katy Perry.

Fred was the founder and co-owner (with one other person) of Subway International. Fred passed away a few years ago at 67, but his incredible success story is indeed inspiring. Originally, he was just trying to pay his way through college. He had a few serious setbacks (which would have caused the vast majority to pack it in), in the first 10 years of business (1965-75), but because of his incredible philosophy of perseverance and hard work, it was virtually straight up after that! In the end, he became a multi-billionaire, with more restaurants and annual sales worldwide than McDonalds.

I personally had conversations with, and did business with Fred many years ago. He was an extremely motivated, and yet also humble man. He had a monetary net worth of $3.5 billion in 2015, but was only famous in Subway and some business circles. He was richer than Donald Trump, but (unlike Trump), he preferred to stay out of the limelight. He once told me personally, that his secret to success was indeed mainly perseverance.

Another huge success story, (in a very different industry), would be a very beautiful entertainer by the name of Katy Perry. Although we've never met, I did have the good fortune to compete with one of her favourite producers and song co-writers, Greg Wells. Greg & I used to compete as teenagers in our hometown of Peterborough, Ontario, Canada in the local Kiwanis music festival, and had the same piano teacher.

Katy Perry is the daughter of two Pentecostal pastor parents, who travelled the country setting up churches in her early years. She learned to sing in public by singing in church (a common phenomenon). She was signed by a gospel record label at a young age, and did an album which did not have any commercial success. She was later dropped by this label. Then she switched gears a little, and ventured into the secular music world. She was then signed by Columbia records, but was eventually dropped from this label as well.

If you've ever known a musician who has come this close to commercial success and then failed, you would know that they rarely keep trying after this amount of professional rejection. But, as we all know, she did not give up, and was later signed by Capitol records, did another secular album, had some hits from it, and now she is one of the most successful female artists in music history, (with a net worth of over $330 million last I checked).

An interesting fact, is that currently (as of the end of 2018), there are NO active celebrity performers (musicians, actors, or pro athletes), who are billionaires. There are a few who are very close, however. According to BusinessInsider.com, Jerry Seinfeld is currently the richest actor in the world, at just under $1 billion in net worth. Madonna also is at just under $1 billion, and Tiger Woods, also just under $1 billion. Oprah Winfrey, George Lucas, Stephen Spielberg, and Michael Jordon are all billionaires, but are not considered active performers (currently), and they've made far more from their business activities in recent years (and this is normally when net worth really skyrockets).

The country of China has also, in recent years, been producing quite a few billionaires from business activities. They say, that it's much easier to accomplish in this country, than it is in most Western countries.

My final nugget of personal opinion to share on this subject is this: There is far more to success in life than just monetary wealth (since we are obviously not taking a dime of it with us). Balance your business goals with the goal of extending your (and your loved one's) healthy lifespan. Prioritize setting up your life to have enough quality leisure time to enjoy life long before retirement. When we are younger, our bodies can take the punishment of the inevitable stresses involved in this. As we age (normally around the 50 mark), the body becomes less able to take the punishment. If we wait until 65 to start slowing down and prioritize enjoying life, it may be far too late. This is where the notion of "Freedom 55" came from.

Compared to the vast majority of human beings on Earth, having even $1 million in net worth is extreme wealth. It just depends on who you're comparing yourself to. Nobody really needs much more than this to comfortably retire, as long as you're willing to relocate. It really helps to keep things in perspective.

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