Re: Importing Seminar in San Francisco

In a message dated 10/4/01 11:04:03 AM, marian writes:

<< and
now it has gotten me concerned about our economic future and how it affects
the home accessory industry. Maybe it's a case of tunnel vision, but San
Francisco retail has been hit hard-even before September 11 with the dot com
melt down-and I am nervous about diving into this and not even breaking
even! I know I am drawing some strong conclusions here, but I would like
your professional opinion AND an idea of when you might be coming to San
Fran or the Bay Area again (I have a brother-in-law that is interested in
attending your seminar). Thank you for your insight and for your time-Maria
>>

I am at San Mateo college on Nov 3, but onto your more important question.

Yes, the economy was in a tailspin, and the WTC attack is making things
worse. The reasons aside, the question is would this be a good time to start
a business?

The only good reason for starting a business is you want change. Either you
are driven to make the world a better place by introducing material or
service improvements; or you are compelled to do so by circumstance. The
best companies are often driven by both.

When the economy was booming everyone's boat is being lifted, so people tend
to enjoy the ride. Certainly in a booming economy there are more customers
and they are looser with their credit cards, but why risk a good thing? So
we wait.

Then, when the economy busts, we say, "well, can't do it now... customers are
gone." This is somewhat true, but not entirely. I privately believe the
economy is worse off that anyone is letting on, and I am pretty confident
that those in charge will make matters far worse. I expect things to drop
rapidly over the next three years in a jagged pattern to heartbreaking lows,
and then take 15-20 years to get back to where we were in say, 1995. The
housing market is the next to get hammered.

In spite of all this, I expect to live better in the next two decades than I
did in the last two. Yes, sales and profits may drop in half for me, since
many of my customers are disappearing. But my expenses are dropping also.
Competing on design, there are always enough customers to satisfy and turn a
profit (if you listen), and what profits I earn will go much farther.

My mother is on a fixed income, but came home from a shopping expedition with
silk shantung pants, a silk blouse, and a suede jacket, all color
coordinated, all brand names, for about $65, regularly $550. The mid-level
markets are getting hammered, and the are unloading goods they know will not
sell.

Yes, there are some impacts... we've decided to hold off building a house for
another 2 years because high-end real estate is already dropping fast. Silly
to buy now. And we hold foreign currency so if the dollar gets hammered we
are OK. On the other hand, If we want to spend a few days visiting San
Francisco, hotels are cheap, car rentals are $15/day, and no waiting at any
restaurants or shows. Life is good.

I started this in this biz in 74, when we were coming out of a recession; the
80, 81, 82 recession were some of the most lucrative for me; and 1987 one of
my businesses was covered in BusinessWeek. Economic problems are like wind
to a sailor, you work with them. I could go on and on about what I am
personally doing, but it would not really apply directly to anyone else.
Life was fine during the boom, and we've actually made money on our
investments the last few years while many people have been hit hard. (I
never believed the "new economy" nonsense). What measures I take I learned
from others; you'll learn what you need to know as you proceed. If your
remain employed by otehrs, your welfare is pretty much up to someone else.

There is not a good time or a bad time to start a business. If one is
hesitating about the pros and cons of a given moment, then I suspect one has
not identified customers yet. Perhaps in this economy you yield only some
$40,000 your first year instead of $80,000 - but 1/2 of what would once of
have been goes a lot farther now. Also, for very many people in the dotcom
boom, there is no paid work available for their experience. For a lot of
people, 1/2 of something is the only option.

So, back to the fundamental question: have you identified customers? If so,
the time to start a business is perfect.

John Spiers

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