Busted Part Four

Lifestyles of the Down and Busted

I am not sure how being busted feels any different than being flush. A common complaint of those who are thriving in business is that they do not have time for their playthings, those things people envy when they see someone successful in business.

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The last time I was employed, my boss complained he never got to use the sailing sloop he had moored off his dock at his waterfront custom home at Tiburon near Sausalito, California. Nor did he have time for his custom summer cabin where the Russian River meets the Pacific Ocean. As his general manager I probably used the cabin more than he did.

As an aside, and since the topic is “busted,” let me sketch this particular fellow and his history. The company I worked for in San Francisco circa 1981 to 1984 was called Vandor Imports, started by Ted Van Doorn, an immigrant from Japan. His father was Dutch and his mother was Japanese. As a toddler during the Great Tokyo Earthquake of 1923 he lost his parents and was enrolled as a Japanese citizen by caring relatives. He was educated in the Canadian School in Tokyo. When WWII broke out, since he was a Japanese citizen, he was drafted and sent to Manchuria to fight. Given his language skills he was put in communications, was first to hear of the atom bomb being dropped and of the Japanese surrender. He was taken prisoner by the Soviets and sent to a work/death camp in Siberia. Talk about “busted!”

We all know suffering can have meaning, and if you look there is grace behind it. It is a decision to keep striving upward and onward, but the decision is grounded in attitude. Not much you can do about the hand you are dealt, but you are free to play the hand any way you like.

As luck would have it, he was repatriated to Japan before the work could kill him, at which point he promptly renounced his Japanese (enough of being Japanese already!) citizenship and found work in the US occupation of Japan.

When he got a chance to get to USA he took it and landed in San Francisco. With no money or prospects, and in a postwar economic downturn, Van Doorn managed to get on contract a set of flats in the Fillmore (the worst slums in San Francisco at the time) and remodeled the lower level and rented it to some out of town college girls whose rent covered his contract payments. Then he set about fixing up his flat.

One evening while preparing to entertain a guest, the fateful event occurred. He set up a fire to burn during the visit, and when the doorbell rang he lit the fire. Walking from the fireplace to the door he noticed the thick black soot from the fireplace on his hands, and with his guest waiting at the door, he could not take the time to clean his hands, nor greet his guest with disgraceful soot on his hands. Miserable circumstances!

He in fact greeted his guest, made light of the problem, and washed his hands In the meantime asked “why don’t they just make fireplaces matches about a foot long, so we can light a fire in several places with our hands well outside the fireplace, and then throw the stick inside the fireplace to burn with the wood?

The next day he went to the stores around San Francisco he imagined would carry such an item. The response far and wide was “it’s a good idea, but does not exist...” He went about finding out where matches come from, domestic and foreign, and found everyone was willing to make matches to his specifications, but an offer from overseas was superior to the USA maker’s offer.

He found out from his supplier overseas what the minimum production run would be, and times frames, etc. He went back to the retailers to make sure they would buy if he imported the goods. He would need a sales force to get enough orders in a workable amount of time, and the retailers told him about sales reps, and who they liked best.

Armed with retailers recommendations and the retailers desire to buy the long matches, and the ability to names names of potential retailers as customers, Ted Van Doorn was able to recruit independent sales reps to carry his match line into the trade shows.

Problem was Ted had no samples. Prices and information, yes (recall this is circa 1954). but there was no fedex or cheap and fast alternative to getting samples from the suppliers.

So he found a block of wood about the size of the box of matches would be, hand drew a pretty design on paper and wrapped it around the block of wood. he glued some match striking material to one end, and then wrapped the whole thing in cellophane. This as the sample that went through the trade show cycle, and gained enough orders to cover the suppliers minimum in a workable amount of time profitably.

Happily, the suppliers minimum was so low that Ted could self-finance and do businesses frequently instead of in volume (which is true today too, of course).

From this first item, retailers then offered this proven innovator more ideas, which evolved into the company I hired on with in 1980. By that time he was up to 500 items, and no matches. He had all the things top people had and everyone else envied, and certainly more money than time. (He had a Ferrari and a Mercedes, and I got to drive the mercedes when he was out of town; I had a company car too.)
As general manager I had access to all business records and to Ted Van Doorn. We had many conversations. I had noticed in his records his company hit one million dollars in sales in 1969. I asked him how that felt. He just shook his head muttering “unbelievable.”

He like any other entrepreneur, has no idea if he will be working tomorrow. Day to day, the challenges are everywhere, and there is just no knowing what can go wrong. There is no antidote to this fear except gratitude for ‘so far, so good.”

it was curious to see people in complete control of their lives, having every aspect of their being fully engaged in the pursuit of the good the true and the beautiful, and rather unaware of their enviable circumstances. The event wherein such people look back on their lives and say “ wow, I had a career...” is so common. The fear is always there, this too may pass, but there is also the certainty that if this goes away, well there is a rational confidence we can make things better.

But back to a common complaint among such people, that they have no time for their “toys.”

But wait, these people are in charge of their businesses. They are in control of their schedules. If they wished to spend time enjoying any of these things, they certainly could. But why not? Because they prefer to work than to play with those toys. They love their work more than any other thing.

In some small ways I have come to understand this. I have a ski boat moored year round not 100 yards from my home, and last night my wife obliged me to take us all out for fish and chips down lake, since the forecast is for rain and we’ve taken the boat out maybe three times this summer. Why don’t I go out more often? At any given time I prefer my work to playing on my boat.

One learns quickly acquisition is far more interesting than maintenance. If you do not adore boats, don’t get one. (I much regret not giving the boat money to charity). Financial adviser Andrew Tobias has a very smart advice on getting all the boating you want: anytime an acquaintance of yours buys a boat, send him a case of good Champagne and a note of congratulations. You will be invited to join every time the boat sails. Give away a half-dozen cases of champagne, and you’ll have all the boating offers in life that you can stand.

Of course the work itself is that for which you have a passion, work that gives you joy, something you choose. Often people grasp at some external motivation, such as “travel,” something I commonly hear when teaching. The number one reason people go into international trade is for the travel. The number one complaint among those in international trade is the travel. We endure the travel because we love our work. Don’t be surprised if your priorities change once you get going.

I am not trying to scare anyone out of being self-employed, quite the contrary. I am simply pointing out it is not the rewards, it is the work that is satisfying. While employees concentrate on their retirement funds, the self-employed gather up assets and options. The entrepreneurs retirement plan is to grasp his chest in pain and drop dead mid-sentence.

I met Klaus Obermeyer in Las Vegas in Winter 2008, whose ski clothes I always admired. He sent his son to Harvard to learn to manage the family fortune, gained through innovating in parkas and turtlenecks. Of course Klaus need not work anymore, but there he is, this vital and dynamic man working the trade show booth and treating me as if I was his first customer over 60 years ago. (Is he self-employed at 90 because he is vital and dynamic, or is he vital and dynamic at 90 because he is self-employed?) After skiing, what he loves most is talking to customers.

http://www.obermeyer.com/index.cfm?method=c.info

If the work we do is exactly the actual work those who are successful do, then how can “being busted” be any different than being flush.?

“Money!” you scream. Well, the problem with that is these people worry about money as much as you do. Where you might be sweating scraping together a $1000 to make this month’s rent, they are sweating scraping together a million to cover this month’s payroll. You both have options: put your future in hock or sell assets at a discount, neither is attractive. Where you join Obermeyer’s league is when you decide to work your way through the problem. A combination of effort, creativity and leverage, grounded in what you have to offer that others want.

Get Ready, Set, Attitude...

Henry Ford said on February 11, 1934: "Let them fail; let everybody fail! I made my fortune when I had nothing to start with, by myself and my own ideas. Let other people do the same thing. If I lose everything in the collapse of our financial structure, I will start in at the beginning and build it up again."

Exactly. And of course this attitude is completely absent from any of the bailout plans, for the simple reason that only a degenerate system must be bailed out. Free markets need never be bailed out. They re self-correcting. But we live in a different world.
Why do we allow “success” to be defined externally and as something objective, when it is something internal and subjective? Advertisers sell aspiration but the product is lipstick. Why let manufacturers define a good life?

Why have we let others define “the system,” one that has clearly failed, and then accept that we must hock our children’s future to keep this system going for a few more years? It is a mystery.

We have a limited supply of time and talent, and we are obliged to do well with what we have, to never deny others the good of our contribution, at every level. Do not deny the rest of us the good of your particular efforts, the good of your specific genius.


Live it Up!

With this in mind, one can begin to see that being busted and being flush might feel exactly alike. Let me lay out how the process of building your own business and getting flush again may also look just like being flush.

Rich or poor, you’ll lose sleep over worrying about anything and everything everybody else worries about. After the Madoff fraud has wiped out countless billionaires you don’t think all the others are lying awake thinking “am I next?”

Food is never a problem in America, but the ritual of shopping storing, preparing and serving food is a big part of any day. It is a challenge either way. To say rich people can just go to a restaurant is to not understand how unfun restaurants can be if they are a lifestyle necessity.

Being busted you are worried about keeping your home. I can just as likely lose my home as any of my neighbors who are being forced to bail out. I am self-employed, so I have to worry about keeping my home too.

Self-employed people are “out there,” critically judged by others, and certainly those who choose to work for others are generally desiring you prove they made the better choice, to put it nicely. Your self-esteem and the opinion of others are at stake every day, busted or not.

A fundamental commonality in being flush and busted is your efforts are directed at self-actualization in both instances.

Now, some of you by now have divined I just ran through Maslow’s hierarchy of human needs, which, if you are busted, is also a list of pressing concerns.

If you are busted, you have more time than money. Your goal is to be happy. Your means are to serve others, by doing good while doing well. The good will be in an area where there is a need. You’ll decide what it is, and your customers, those whom you serve, will confirm as you get on the right track.

But you have to get yourself back on track first, so let me lay out some uncommon arguments, for your reflection:

1. Put everything into this business. Make no provisions for retirement, since you will never retire. Why would you? You will love your work. Your retirement plan is to grasp your chest mid-sentence, gasp and drop dead at some ripe old age. The self-employed are on the “Tag ‘em and drag ‘em” plan.

2. Decide where you want to live when you are thriving, and move there now. Given the improvements in communication and transportation, you can be anywhere. Big city or small college town, Palm Desert golf course or Prague, pick the place you want to live and move there now. You’ll figure out living arrangements when you get there. Then you will get creative. (I’ve always done well in port cities.)

3. Recall you have more time than money, so go to school. School, comes for the greek word schola, which means leisure. (Now they tell me.) You’ll need to learn a lot and be inspired while you build a business, and classes can help. Schools are full of people who are on their way to something bigger and better, just like you. Also, they live on the cheap, as you will need to do. Community and competition are important.

Pick a topic in which you wish to be expert . Physics? Architecture? Cheese? I wouldn’t necessarily advocate going back to school to pursue a degree, but certainly get on the mailing list of the department in question and attend guest lectures and symposia that are open to all.

Being expert in a totally unrelated field gives you a perspective and a retreat. When you need to get away from your work, you need a place to go. Of course this is simply your “hobby” but it becomes critical to your well being.

Another benefit is when faced with a challenge at work, often you can see yourself through by means of a pattern you note in your “hobby.” When “less is more” is the key to Ikebana, it may occur to you to outsource your accounting than to do it yourself.

Also, auditing a course is much cheaper than taking a course for credit, and although it is not legal, there is nothing to keep you from simply sitting in on classes with other students and taking a course. It is an ancient tradition, with both Saints Augustine and Aquinas complaining of it, some 800 years apart. It happens to me!

My largest regret presently is I do not have enough time to read all I want. My library is full of books I have NOT read (I tend to give away any good book I have read). Another problem I have is I nearly go into insulin shock over the rush of ideas I get from reading anything nowadays. When I took a sabbatical circa 1985 the best part was all of the reading I could do. Success is the point where you worry more about time than money. You may never get the time to read again after you are flush, so take advantage of having more time than money now.

Volunteer only when it pays. i got thousands of dollars in free admission to world class events by volunteering to take tickets or sell refreshments, etc.

Stay busy. "I’ve got to workout how to meet my bills, but I will worry about that in 3 hours after I take the “history of the coffee shop in the Arab world” this afternoon.” Age quod agis.

4. Next, when you are busted, any money helps. If you’ve been paying into unemployment insurance, then certainly collect on it, and use the breathing time well. Don’t be proud. The powers that be have so fouled up the economy there is simply no accounting. Take the money and spend it, otherwise they will use it to make war.

You can collect unemployment and do the work necessary to start a business, that is finding customers. No fraud there. In fact, in most states you can continue to collect, and not have to seek work, if you are trying to start your own company. Just ask.

if not, or when it is over, get at least a part time job. I understand completely how no money can sap the life out of you, how dismotivating it can be. But the flip side is true. It does not take much money to brighten things up tremendously.

So get a job. You may be flipping burgers for $10 an hour part time, but a $250 every two weeks can go a long way in solving a pressing problem or just underwriting a fun picnic at the beach. You learn quickly that in life the right amount of money is often at the right place at the right time.

One New York son of privilege found himself at 63 and busted, so took a job at Starbucks, and ended up writing “How Starbucks Saved My Life.” A sense of entitlement and pride can keep you from taking the very steps necessary for you to make the breakthrough you need. Once upon a time I picked and packed apples for a year along side migrant labor which the put me in position to pick up some very lucrative international trade contracts. One step back, two steps forward.

Here is something scary to consider: everyone knows every one of your deepest, darkest secrets. And nobody cares. Each grown up has a history, and adults are too busy sorting out their own problems to give two hoots about anything anyone else has said, done or faces. What counts are efforts to improve matters, what changes you are working on, not what has happened. Any organic farmer will tell you some manure at the roots can produce beautiful fruits.

Here is where that spiritual dimension, 12 step pattern comes into play. Just keep saying, “I was busted in (name your bubble), and now I am working on (name your field).” End of story. In this way you’ve got no secrets and you are moving ahead positively.

5. Avoid welfare. it is a trap. (You paid for unemployment insurance, so collect). Just figure it does not exist.

6. Start writing. Composing thoughts on paper is something limited to humans. Improvement here pays off subtly everywhere else. Write peers and competitors. Write letters to editors. Write your business plans. Keep writing until you get your voice. Ideas get clear and strong when written down. What happens is your writing voice becomes your internal voice and you become more interesting when you are speaking. The slight edge wins races.

7. As I mentioned in an earlier, work out that spiritual thing. There is too much to experience and draw on to go into self-employed self-limited.

8. Get married, have kids. or otherwise do the family thing. This may be impossible, or merely too late, but there are plenty of kids around who can look up to you if you are available. Of course it is irresponsible to start a family you cannot afford, but again you are busted, not poor. Kids have no idea you are short of money, that they are wearing second hand clothes, or that macaroni and cheese is not haute cuisine. The villains smear everything on the walls anyway, so why feed them chanterelles and foie de gras? Why turn them loose in a custom built dream home? Kids need attention, and being busted a year or two may give you the time to get a few out of the hopper and on their way with a solid foundation. (Studies show people are about 90% of who they will be by the time they are six years old). Nowadays most parents are both working just to turn the kids over to day scare where the children will eventually be drugged or just stupefied by endless Sesame Street reruns. Your kids will have the better deal.

And no getting around it, kids are not an asset in any category, cannot be replaced or otherwise ameliorated. You either have kids or you don’t.

But another theme among the self-employed, for all of the success, it’s the family, it is the kids that matter. There is nothing anyone one of us ever does in our lives that is more challenging, rewarding, interesting, satisfying or valuable than having kids. There are some cruel circumstances where kids are out of the question for those who would love children, but that does not change the facts for those who can avail themselves of this part of life.

Health care in usa, such as it is, is already paid for. No one is denied necessary and sufficient health care in usa, so your kids will be covered. This will tick people off, especially as people with no kids are paying for your kids’ health care. Counter that argument with the kids you are raising will be paying the social security payments of those who have no children when they retire and your kids start working.

Also, you’ve got the time, so study natural family planning through Couple to Couple League, La Leche League and other movements that avoid the invasion and domination practices that have become medicine today. US Medicine is particularly brutal to women. The natural family planning movement has made some amazing strides in women's health care. Since, naturally, it costs nothing, your doctor will never mention it.

The people who say “eat organic, and see the effects quickly” are right. And if you do, you’ll enjoy a better life. People say, “Just walk 20 minutes 3 times a week, you life will improve dramatically.” This is true. People say, play books on tape in your car and you complete a college course each week, and find dramatic improvements in your mental life. This too is true. In life someone is lucky if they adopt just one of these disciplines. What if you took the time to adopt them all? You have the time. They cost nothing. The results would be tremendous.

9. Make sure your spouse, or intended spouse, is real clear on the game plan: we are busted now, we will help each other and raise kids as we work together to get flush. Repeat as necessary.

10. Tip big. I throw this in because it is one of the few regrets I have from time I spent busted. Round up, leave extra, when in doubt, tip.

11. Never borrow money. You are never short of money, you are short of customers. Change yourself, so you are not short of customers. Start there.

Costco has 8% money. Other people charge less, some more. Why pay anyone 8% when it is not necessary, and certainly you can use the 8% yourself? With the miracle of compound interest, paying 8% can break you, keeping the 8% can make you rich.

12. There is the practical side of cutting expenses and increasing income, which I mentioned earlier and Dave Ramsey has turned into an industry. Read him on that. Ramsey is big on having an emergency fund. Sadly for most of his listeners those savings funds, if invested, lost much value last year. Start your business now. Get with a small business CPA about writing off all business expenses to leverage as much as possible the money you do put into this business and making what are personal expenses now business expenses henceforth. Instead of investing what savings you have in the market, take what you would invest and save and put into this business. Invest in yourself.



Who Says You Must Succeed?

What happens if this does not work out? Well, who can define what “working out” is? We have no idea where this will go. Bill Gates had no idea that he would end up running an NGO. Bill Boeing was astonished at how things turned out (the government seized his company from him). Steve Jobs is now selling stereo systems and telephones! Gandhi died believing he had failed at his life’s work.

Who says “failure “ has to be miserable? If you fail at something you don’t care about, how can it be other than a miserable experience? For you and your observing children? if you “fail” at what you love, will they be able to tell you “failed?” (He sure seemed happy all the time...)

You cannot lose unless you quit. One does not fail at business, one quits. Business is a process of picking the field you love and serving others in that field. It forces a balance in oneself, between self-interest and pleasing the customer. The paradox is the more I please the customer the more I am self-actualized.

As long as you don’t quit, then you will get somewhere.

If that somewhere is in a bad direction, they you can adjust; if it is a good direction, then you keep going.

What that ‘somewhere” is like cannot be known before you get there. You at best can choose a field. say medicine, and then within medicine say bacteriophages, and then your customers will tell you what you will provide. Collectively, with their feedback, you will muddle through to some balance.

What makes you think you have to win in the way you anticipate you will win? Especially on some objective standard, how come you think you must succeed as others would envy?

When you are in business for yourself, you begin to adjust to the way things are, and you begin to win in ways you could never have anticipated when you began doing what you are doing.

Look at those who succeeded and you see they win in ways they never anticipated they would win, either in scale or kind. This is a theme that plays out time and time again.

Changing designs is responding to people, which assumes you listen and care.

In the measure you respond to others, you provide a value. You are compensated in the measure you serve others. Internally, you balance the tension between the need to self-actualize and the requirement to serve others. This is entirely subjective. As a practical matter, when you want a raise, you redesign your offereings.

The bible says something about being happy with your portion. What if your job is to get only so far, and open the way for others? James Burke who is currently featured in Geico ads has a claim to fame, the BBC series “Connections” in which he demonstrated small changes in history of material goods leads to huge changes. Perhaps we’ll never see the impact of our work. Dr. Gary North says you’ll know you are a successful writer when you read what you wrote somewhere and they fail to credit you. The number one bestselling author is “anonymous.”

How Can You Possibly Fail?

There is nothing to fail at: can one fail to experience a problem? Can one fail to think up a solution? Can one fail to note if some particular work gives one joy? Can one fail to go shopping for the solution as a customer of the leading stores ? Can you fail to learn whether or not a solution exists, from the stores who would love to sell it to you? Whether your idea is a good solution from the very people who would be your customers?

This breaks down if you do not have a passion for the product, and the work does not give you joy. In that case you will fail, but you will have failed at someone else’s business, not yours.

Can one fail to find a designer? Can one fail to find the best place in the world to have the item made? Can one fail to learn from a customs broker the details and logistics of an international trade transaction, the timelines, fees, permits and regulations, and the costs associate with the distribution of items? Can one fail to buy a copy of MYOB software and set up professional accounting and bookkeeping for under $200? Does one fail to come up with enough orders to cover the supplier minimum production run, in a workable amount of time, profitably? And then come up with a few grand to cover the transaction, with orders in hand? Can one fail to repeat as necessary? Where does one fail? Worst case scenario, if you do not get enough orders to cover the suppliers minimum, you do get enough information to learn what is wrong with your product to make enough changes to make it attractive enough to in fact get enough orders. Ralph Lauren failed his first time out. He is still in business because he came back with what people would buy. Ralph Lauren is not rich because he knows what people will buy. Lauren is rich because he listens to customers.

Nobody fails at business, people just quit. Quitting is how a business ends.

Where in the process is a special skill one has to learn? What here requires a special breed? I know from experience of meetings with thousands of small business international traders that there is no special breed. We are all entrepreneurs of one sort or another, the categories are merely accidents of what one chooses to pursue. We are all gifted in different ways, or some of us utterly ungifted. It is a sheer accident that I have the gift of ADD/ADHD, which gives me certain advantages over others. But then, they have advantages over me, just different.

Perhaps your job is to learn enough about business to pass it on to heirs, or as they say in law, your assigns. Perhaps it falls to your heirs who will stand on your shoulders an do something remarkable. Chinese are much better at doing this having generation 2 or 3 succeeded because of the work of ancestors. It is called accumulating cultural capital.

Perhaps it is your role to be a pioneer who learns the lay of the land and passes this on to the child who grows to clear the land and raise cattle, yet , an another who grows grain. Three generations to get to what others envy and consider success. Perhaps your efforts do not pay off until after you die. If that is the way it is, will you die bitter that you did not “succeed?” Why, when you enjoyed the work you did?

Now never say “I am doing this for the children. You will sounds like a lying politician, and you cannot possibly know if they will benefit, or if they even care.. Perhaps they will run off to become doctors or teachers or lawyers or some other dead-end job. You can only do your best and hope for the best. if you clear the land and die, someone will benefit.

As it says soomewhere in the bible. a mans sins are unto the 3rd and 4th generation, but his blessings are unto the 1000th. We are the beneficiaries of blessings, the contributions of others, going back a thousand generations.

Some people think, “If I can get enough money I can live a certain lifestyle.” It is more likely that if you live a certain lifestyle you will get enough money. And, if you care, you leave something to posterity.

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