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You can keep it simple or make it more complex, as you prefer. If you leave an employment position, perhaps you can return as a part-time independent contractor, at a much better perceived-price and terms to the client. Technically, that’s being in business and you qualify as being an entrepreneur. There are incredible opportunities for marshaling this type of relationship, for hiring your own staff and expanding, and by increasing your share of your client’s pocketbook. Bring in other network team members in other skill sets, and develop further business opportunities. Best of all, have more than one client, rather than just one employer.
When I left a big-four accounting firm Ernst & Whinney in 1983 to form my own CPA firm Green & Company CPAs, the following thoughts occurred to me.
If I was good enough for E&Y, then I was good enough to be in my own business too. Plus, why have one-paying client - my employer E&Y - when I could have dozens of clients? It only takes one boss to be unsupportive and cause you to leave, which is having all your eggs in one basket. Or, your employer can fall on hard times, and want to downsize your job at no fault of your own. Established industries and companies can change overnight with the advent of the new economy and global competition. Investors diversify and don’t put all their capital into one stock, so why should you put all your human-capital into one job?
Conversely, with your own business, you are your own boss. Plus, you can express your passions and interests and lifestyle better too. If you lose one client, it’s often no problem, you are diversified and protected in having other clients. You can have multiple businesses as well, for further diversification and risk management. For example, maybe combine trading with computer IT or law.
In most jobs, your employer owns the structural capital that is generated from your personal intellectual capital. The employer considers your “work for hire.” Conversely, with your own business, you own that structural capital and that’s what you sell to customers. If you leave a job, we’ll show you how to marshal and utilize your intellectual capital without breaking your employment contract terms.
Ask most people what defines an entrepreneur and they will say “risk taker.” It’s actually the opposite, it’s “risk avoidance.” A 2010 New Yorker article made this point in an excellent story on three of the most successful entrepreneurs. Ted Turner, founder of CNN and John Paulson the famous hedge funder who did the Big Short with Goldman Sachs each made billions on what they viewed as a “sure thing.” They mostly used other people’s money rather than their own too.
Think big, be creative, and try new things. Trial and error is key. But so is pulling the plug and moving on to the next idea. Plus, it’s more about execution than just ideas. Be fast and first and then improve in version 2.0.
Here’s my first big idea. Offer your independent contractor or business services to these companies at an “offer they can’t refuse.” You can have the best pricing power in the business. Offer zero base compensation and allow the client to pay you what they want based on value-billing formulas you discuss with them in advance. Preferably, sign an engagement letter in advance with the value-billing terms laid out in writing. You can offer a better deal in price and terms than an offshore job in emerging markets, and you can still incorporate the latest advances in computers and machine tools too.
The key is getting in on the ground floor at a reasonable price and having the opportunity for growth within that job. Growth means hiring your own support staff, working for you and not the company. The company pays you and you get to keep the mark-up on your staff.
I founded Green & Company CPAs in 1983. The timing coincided with the advent of the personal computer. In fact, I bought the first-generation IBM PC, a dot matrix printer, the first worksheet program and I was in business. It was easy to rent an office on Fifth Avenue in a suite with a famous tax attorney and bank attorney and presto I was in business. I took a few great clients that I brought into E&Y and had them form their own business too – in money management and a forex broker too. My first year in business, I made more than twice what I made previously in my job. Plus, it was lots more fun.
Now it’s far easier than the early 1980s. You can form your own ecommerce and virtual business with all the same tools that big businesses use at extremely low cost. Think thousands per year, and that’s it. You can have staff without salaries and benefits, you don’t need an office to rent and the equipment needed is very basic. Think of it as a business in the clouds – with cloud computing.
A recent WSJ story wrote about new business start-ups and how they are doing more with far fewer workers. How they use computers, software and IT services and ecommerce to replace accountants, IT people, attorneys, back-office and front-office staff. There’s an ‘app for that.”
Being an entrepreneur is the real American Dream and it will survive unlike housing, student loans and a lifetime job with benefits. Don’t just think local, or even national, think global.
Entrepreneurs make their own hours – for work and play - they pursue their work passions and often that’s what they are best and most creative and efficient at.
If you just can’t jump start your own entrepreneurial car, don’t worry. Join Green’s Entrepreneurs Network and we will help.
