Why Not Start - Redux

Folks,

Enrollments are way down all over in continuing education, and over the 20 plus
years I�ve
been teaching that has meant we are either at the top or the bottom of an
economic cycle. I
suspect it now means a top (we are headed downward) since the other big
recession
indicator, the inverted yield curve, is signaling recession next year. Well,
it�s about time I
slimmed down.

Enrollments jump up to their normal levels as the economy is going down or up.

Last Saturday I taught in Marin to six people, a tiny group, so we had time to
develop some
arguments. One woman presented her case: she has done well in mortgage banking,
she
wants to get out, she considers Marin the best place on earth to live (I tend to
agree), she is
approximately 40 years old with a hefty mortgage. She wants $6,000 net per
month, as a
start and minimum.

She grasped my standard argument, that as a practical matter once you�ve decided
your
passion, you then work out what the net profit is in the industry she has
chosen. Say the net
was 10%, then to yield the $72,000 yearly income she wants, she�d have to have
sales of
$720,000.

We further covered how it is not so much a question of income, as a question of
lifestyle, that
working closely with your CPA, the business pays for much, as a write-off, in
effect cutting
many expenses by 1/3rd. Also, such anomalous events as pursuing a degree can
become a
business expense. (�Salary� in a small business is rather problematical - the
more you pay
yourself, the more you lose to taxes, what any significant other may earn could
affect tax
strategies; such issues may relegate �what you take out� to a minor
consideration).

The $720,000 struck her as too high to be reasonable, and I showed her how in a
multi-
trillion dollar economy it was likely, not unreasonable. We also covered how if
was
unreasonable for her, then perhaps it would not be too difficult for her and a
partner to gross
2 times $720,000, or $1.4 million, since partnerships thrive better, faster than
sole
proprietors.

She claimed to have a �passion for making money� (I�ve heard this
counter-argument many
times) and she could not see how a �lifestyle� come what may, could trump the
security of
$72,000 net.

Another person chimed in that she had followed her passion, and skied for 10
years, and now
she was poor, no job, no prospects, so she moved to San Francisco to make enough
money to
start a company that did fair trade with Guatemala.

We got to the point of the seminar where I point out �we decide what field we
will enter, but
our customers decide what we will sell� when we developed this point further.

Yes, it is critical that we love what we do... passion has to be there, but it
is the �serving
others� that is the heart of the alternative lifestyle, not the passion, not
the money. When
you take a salaried job with a conservator company, you are exchanging your best
40 hours
per week to further other peoples goals, and you buy as much �lifestyle� as you
can with what
money you get from working, with what time you have left over. In
self-employment, the
first moment is lifestyle, your entire life is your �work,� you are still
serving others, but you
are serving up �you� and a �you� with your energy and creativity unleashed.

The skier demonstrated why passion is not enough. In the ten years she was a
ski bum, she
never acted on any of the problems her ski-bum peers acted on, and in so doing
she never
helped others. Her plan to help the Guatamalans may be more of the same. She
envisions a
very small business selling things made by Guatemalans, organic materials and
fair trade. I
wonder if the Guatemalans want the work, or they would prefer making silk ball
gowns for
the super wealthy and living in air-conditioned comfort? Do the Guatemalans
have a say in
the future she envisions for them?

The important difference is working for others is the world does not benefit
from your
creativity, energy, intelligence as it would if you were more open to the world
as in self-
employment. The freedom from the restrictions of employment is at the same time
the
freedom to answer another calling. Our creativity is tempered by interaction
with the �other.�
The root of the word �obey� is �to listen, to hear.� The difference is this: in
working for
others, you obey the boss. In self-employment, you obey the world.

She said she understood she was resisting the �Zen� of my argument (people talk
like that in
Marin) She wished she had started the business when she was twenty. That when
it occurred
to me another aspect of the problem of starting a business.

There is no knowing what self-employment will look like in advance. One of the
problems of
free market economics is it can explain how come government provision of roads
leads to
traffic jams, unconscionably high death and maiming rates, and other messes, but
it cannot
predict what would happen if there is a free market. We can only say with
confidence born of
experience, it will be more, better, cheaper and faster (with � zero emissions
cleaner� and
�safer� defining �better� in the case of roads).

There is no knowing if $72,000 per year will matter, whether living in Marin
will be important,
or any other aspect. Self-employment is an alternative universe, and there is
no way to
properly pack for that trip since you have no idea what landscape will look
like. Anchorage
may prove to be the ideal home after she gets going serving others in a field
she is
passionate about. You cannot �know� unless you �do.� And whether you do this
at 20 or 60
makes no difference at all, since lifestyle is not about age. There is the
existential angst, or
where the leap of faith is required.

A stream of stories as to how life might look if you move to self-employment
might help, and
of course I recommend Forbes magazine ( http://tinyurl.com/yhr4dz ) for a
constant flow of
those stories. I am keeping you apprised of anything I do that may be
interesting or useful
for my part as encouragement. There is one piece left to address, and that is
the fear of
failure.

John

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