salary

Would you gamble? Would you start a business?

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This follows an interesting discussion we’ve been having on Forumosa about starting businesses.

Of course, though, I wouldn’t equate gambling with starting a business. Why? Apart from the odds issue, there are far more factors that you can control when you start a business. If you gamble, esp. in a casino, the odds are absolutely stacked against you: the house controls the cards, the house controls the dealers, the house controls who plays, the house monitors ‘cheating’ strategies (and bans anything that is mildly profitable, even ‘card counting’…)…

Gambling is for suckers

Basically, if you gamble, you’re a sucker. But in business, you actually have a good chance of ‘being successful’ and keeping your original stake at the very least. However, there are many reasons a business ‘fails’ including the fact that the owners just get tired or sell out to others or close up one day or die… None of these in particular suggests that the business was an unprofitable one.

It’s in the blood, or not

It’s likely that as Brits, we tend to shy away from doing business, worry about the undue risks, plan until there’s no breath left to actually run the business, borrow lots of money to go into business (IMHO, a huge mistake and a massive risk, but common in the UK), are unusually PESSIMISTIC about doing business, and (even now) still ‘look down’ on entrepreneurs as a breed.

Keep your ass covered

When we started our school, we didn’t worry so much about the risks (and there are many), we just wanted to try it ourselves after seeing so many people screw up royally (is that an adverb?)… we didn’t overly plan except that we knew we could pay the rent on our school for six months without ANY income at all even after setting up the school, we paid ourselves no salary either, we didn’t borrow any money to invest (a huge relief), and we were neither pessimistic nor optimistic about our chances, … Did we have a concrete business plan? No, we didn’t. Did we need one? Not really, we already knew the business in many respects.

Manage the risks, not the luck

IMO, most unsuccessful business owners here fail to manage the basic risks first, don’t make these kind of decisions, and wince at the first hurdles. How? They fail to secure a source of personal income (that covers life expenses, not including their business) first; they overly underestimate the expense of starting up and running for months with little income preferring to spend as much as possible in the first few weeks, and reserving nothing or having nothing to draw on afterwards; aren’t willing to pay themselves a pittance to get things started because they (likely) see a salary for themselves as ‘deserved’; don’t really market themselves well enough except through discounts (a prime strategy) that does NOT work well here… attracts the wrong customers, diverts attention, undermines your profit structure (esp. if you haven’t done your work properly); and so on…

While many seem to believe luck plays a role in starting a business, I like to think of it as luck comes to those who are ready; if you’re not ready, then it’s wasted largely.

Working Hard Not Smart

Usually, restaurants are cheaper to open, require less capital to start up, most believe they ‘can’ cook, and reasons like that… but restaurants are bloody hard work, esp. if you focus on doing a lot of meals or full-day service. My sis-in-law had a restaurant for six months or so, I remember working in it, but they really didn’t know how to run it optimally. Instead they opened at 11:30 and ran it until 11:30pm every day. So they nearly killed themselves doing it, too.

Focus, focus, focus

While I had no access to the financials, it didn’t make much sense to work so long, esp. as lunch hours were always the most busy. I would have preferred to have very busy lunches where people were served quickly, afternoon teas, and close up at 5pm each day. Instead they did dinners, bar hours, etc… and I’m not sure why they thought it was necessary. There is the belief in business here: more is better; you’ll see it everywhere, too.

Cram schools here open multiple classes including math/art, Chinese, Science … instead of focusing on one thing. Restaurants try to serve all kinds of food (I know restaurants that sell rice, noodles and spaghetti!) to all customers at all times. Stores sell everything… there is a lack of focus in many businesses here. Market stalls sell fresh pork and underwear… it’s quite amazing how people relate two disparate businesses.

In the end,…

In reality, it’s the ones who take their money (or someone else’s) and actually try to do something with it in the creation of their SMB, they will learn the experience of being IN business. Most serious entrepreneurs are also SERIAL entrepreneurs, in other words, they will try and try again till they get it right, even if that means they run 5 or 10 businesses in their lives…

No guts, no glory

And I’m sorry to say, no matter what MBA you take, what business course you attend, what class you take, no matter what you read or study, it won’t make a jot of difference unless you actually try to set up and/or run a real business. Fundamentally, Entrepreneurship is a practical skill; so whenever I see academics on TV lecturing on business fundamentals, I really have to wonder what they bring to the table when they themselves don’t bear any risk at all. It’s that willingness to bear the risk that illuminates who will be entrepreneurs and who won’t. That’s what separates entrepreneurs from salaried workers, … the knowledge that next month, if there’s no profit, you won’t take a home salary.

Hope the ramble influences you to think about starting your own business. Drop your comments here.

Friday News Bytes: Google, Greenbacks, Salaries, and more

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InvestorBlogger’s newsbytes for this week. We’ve been plugging our new download for several days. I have no idea yet how many downloads there are (I should be tracking that I guess… but I didn’t!). Anyway, we’re up with other news.

First, some great stories since my last newsbytes on the 17th.

Now, I’m making a big think about my new poll: Which of the blogs would you like to see included? To vote or find out more just read the post. Don’t forget you can add another website! I’ll conclude the vote when I have enough votes!

In other news, yesterday’s Taipei Times reported these interesting stories:

Google Reports Flat Ad Clicks

Hah! Well, knock me over with a feather… But when you alienate your advertisers, your web publishers and your bloggers, all within a few months, … it’s hardly surprising that you should begin to feel the effects on your bottomline within a few months. It’s not rocket science, is it? This is a quote that I wrote on a popular forum last night:

While Google may do as they wish with their own index, it seems that their actions are beginning to have a negative effect on their stock price.
Earnings fell short; Adsense has a lot of competition now; Yahoo and Microsoft together could bring significant synergies; PR has caused a huge stink; publishers are up in arms about their cataloging of books without permission; cell phones companies are now watching closely…
The lesson is quite simple: you can’t rub so many people’s noses in **** without their being payback at some point.
Recently Google has looked like it owned the Internet (at least in the eyes of the people who work there), but in reality, Google is just another BEHEMOTH company that has to answer to its shareholders first and foremost. And now the pressure’s on them… hehehe.

Greenback drops below NT$31 (Finally)

And let me say it again… FINALLY. The local government has been holding the exchange rate here at about NT$32.5 to bolster exports by making Taiwan’s products cheaper for the export market. However, this is really stoking inflationary pressure in Taiwan, as commodities (wheat, oil, etc.) are all usually priced in US Dollars.

I bought a loaf of wholemeal bread from 7-11 last month at $35 for a half-loaf. I just got sticker shock today, when I saw that the price had now risen to $45 in nearly one go. Watching the TV news on TVBS or similar stations, prices for many staples are jumping: eggs, noodles, rice, cooking oil, bread, … Unfortunately, for many employees, stagnating salaries are now butting into rising consumer prices, increasing interest rates, and slowing export growth.

So why aren’t we getting salary increases?

Part of the reason is that employers themselves are facing increasing costs and employee-related expenses as Labor Insurance, National Health Insurance, and Pension Costs have all risen in the last few years. Although employers and employees ‘share’ the contributions, everyone knows that this is a ‘fiction’.

Employers’ contributions are simply budgeted differently, and ultimately come out of the same pile of cash as every other expense: their revenue. Since companies need to make a profit, there is simply less money left over for salary increases as the money originally ‘earmarked’ for employees as a salary increase gets paid to the government coffers. It may be ‘accounted’ for differently, but that’s the harsh truth.

And, it seems, people are worried, if the story in the China Post is to be believed.

The majority of office workers in Taiwan are worried about their finances as their earnings are eroded by inflation, according to the results of a survey released yesterday by 1111 Job Bank.

While these facts may be true, the survey also recorded 40.45% of the respondents classed themselves as ‘being in debt’. Wow! With interest rates generally rising in Taiwan, this is not an enviable situation to be in. To help manage their expenses, I’d suggest them to start looking at ways to cut the owed debt, the interest rate, and repay as much as possible as quickly as they can. That tack alone would help to alleviate some of the pressure, and free up additional funds for lifestyle requirements, investing, or other purposes.

In Blog News

I took on a consultancy role this month, helping add a web 2.0 life to a static affiliate-based website by adding a blog. It’s been a whirl, and I’m still waiting to see the outcome. In short, though, I had to set up the initial blog, tweak the settings, choose the plugins, upload the themes, create and add content for the blog (including a blog carnival, posts, and more), create an initial statistics basis for the blog, and begin simple online marketing of the blog. You can take a look at the blog yourself, but I couldn’t get an entire screenshot in. I only had about a dozen hours to work on the blog in the month, but I was surprised by how much I could do in that time, as well as how much work setting up blog actually takes. The focus of the blog has been credit cards and much more .

creditswipes

InvestorBlogger, Plugins and a slowdown!

I’ve also restored the Twitter Plugin from Alex King, which you can see below. I’m trying out several other plugins in right now, but the blog loading times are slowing down. I guess you can take the survey I put out on Payperpost Boards about the number of plugins installed in a typical WP install. I think with 20 or more Investorblogger needs a little trimming again. And the amount of JavaScripts in the sidebar is also similarly increasing. What to trim?

And that’s it for Friday, 29th February. Have a great weekend.

Where did our attitudes to money come from? Part 1

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In 2006, I asked a simple question: Are you Salary Slaves? I have thought about it for quite a while, and I’ve come to the conclusion that many people are indeed salary or wage slaves… In this multi-part post, I’ll be looking at this issue in some depth each day for seven days…

Day #1 – Cash Transforms Our Subsistence

When people lived in agrarian societies, we all were tied in various ways to the land. We would all benefit when there was a surplus, and grow hungry when times were lean. When we were living in traditional societies, we’d live hand-to-mouth, literally. Even in countries that have just industrialized, there is a memory of what it was like to live on a farm, rearing animals, raising crops, picking wild fruit… and in many ways, life was great. Your shopping mall was outside your front door when it was warm, but if it turned cold and snowy, well, like the Ant in the traditional Anansi story, you’d had better have finished your preparations for winter.

However, once we entered the industrial age, many of us still assumed that the hand-to-mouth subsistence type of economy or society still existed. It did. It was called living from “paycheck to paycheck”. The cash we received was the equivalent of the stored value of the produce that we used to have on the farm.

But we’d get the paycheck or ‘wages’ paid on Thursday or Friday. It’d be gone by Monday or Tuesday and we’d be eating bread and drinking water for Wednesday and Thursday. With the coming of the middle class, wages become salaries, and weekly payments in cash became monthly bank transfers.

Do you remember your parents attitudes to money? How did they handle the cash? Were they good at it? Or did they just spend it?

Part 2 is published Sunday at lunchtime, then each day next week.