Platt Perspective on Business and Technology

Should I stay or should I go? 14: startups as a special case 3

Posted in career development, job search, job search and career development, startups by Timothy Platt on April 12, 2016

This is my fourteenth installment to a series on intentionally entered into, fundamental job and career path change, and on best practices for deciding both when and how to carry through on it (see Guide to Effective Job Search and Career Development – 3, postings 416 and following for Parts 1-13.)

This is also my third posting here to discuss startups and early stage businesses as career path options. I began delving into that set of issues in Part 12 with a brief discussion of costs and benefits faced, and both for staying where you are as far as jobs and career paths are concerned, and pursuing a new business career path option. I then turned in Part 13 to consider the question of what “startup” means to you and what might draw you to consider pursuing that type of career path change. I turn here to more fully look into startup and new (at least to you) business options.

• Obviously, that includes setting out to plan and build a completely new business venture from scratch. And in that, this can mean you’re seeking to build a new high tech venture, or it can mean you’re setting out to start and build a new dry-cleaning business or a new hardware or convenience store in an area that does not have one and that is underserved for the types of products and services that you would offer. The key point here is not one of novelty in what you would build and run; it is that you would be building from scratch, even if on the basis of feedback and input from others who have tried a similar path, and even if you would build according to a more standard basic business model.
• Social media and networking can offer real value for all of this, and I add when considering the other basic options that I would make note of here in this posting too. See, for example: Networking for Background Information and Informational Interviews. And also see my series: Using Social Media as Crucial Business Analysis Resources (as can be found at Social Networking and Business 2, postings 217 and loosely following for its Parts 1-7.)
• Now let’s consider those other basic options. Buying a franchise license, and a new business as a franchisee and as a participant in a larger already established business organization is a second basic route that has to be included here.
• And buying out a business, as for example when buying out a medical or dental practice or a legal practice from a retiring professional is a third – or buying out a small, single owner, single outlet retail business.
• Building a new franchise operation from scratch, is clearly consistent with the new business venture/startup framework that I am writing about here. I include buying out a business here too, because it is crucially important that you approach that option as a basic due diligence starting point, assuming that any business you would buy out and certainly from an owner who was moving towards retirement and slowing down in their work, is one that you would have to do a great deal of business renovation and updating work on. And this will probably take you into what for you is new workplace and work experience territory too, and much as you would face at least for the levels of effort if you were building more from scratch.

And this brings me back to the “what does startup mean to you” and “what are you looking for” questions that I posed in Part 13. How you approach and answer the issues that I raised there, would go a long way in helping you to decide which of the three basic new business categories that I offer here, that you might find best for you.

I want to at least begin to address them and how your answers to them connect into the discussion of this posting, by raising and hopefully dispelling a myth. And the myth is compellingly simple even if erroneous, at least as an automatic assumption that would always presumably apply:

• The more novel and the more stand-alone from any outside contractual support your new business venture, the more uncertainty and risk you would automatically face from it.

New business ventures always carry risk, and both from building new per se and from the essentially built-in delays that can be expected before revenue and profitability are achieved. And in this:

• Attempting to build and grow a new and novel high tech oriented business can be higher in risk and costs, and even if it might also offer higher overall long-term potential,
• Than you would face in building an already market-familiar business, in a location that careful market research would show to be underserved for this, and that that research would show to be in demand there.

That set of examples as drawn entirely from the top categorical bullet point as offered above, fits the expectations of the assumption just offered. But to bring the second basic category into this:

• Franchise agreements as binding contractual obligations are not always as simple and clear-cut for risks and costs, and for benefits as they are marketed by corporate headquarters.

Franchise opportunities definitely constitute a class of business opportunity where savvy, experienced input from professional social networking would offer invaluable insight. And in this, you would want to seek out professionals who have worked in and owned franchise licensed business outlets and wherever possible, people who have worked as franchisees for the specific businesses that you are considering working with, and as franchise holders. How much support do the parent companies involved, actually offer and how much do they actually support and help their franchise operations and how much do they do that would primarily enrich the parent company, and even at the expense of their franchisees? On the negative side there, I have certainly heard of parent companies that contractually force their franchisees to buy all supplies and even basic cleaning supplies for maintaining their businesses, from them and at inflated prices that these franchisees could easily beat if they could buy those resources more openly and freely as to source. Research is crucial before signing any such agreement and networking and learning from others who have already entered into these agreements, is also crucial. And turning back to the above assumption, this is all about knowing and managing risk.

And this brings me to the third basic category that I just noted above, and buying out an already established business. On the face of it, this type of new business venture looks to be the most secure and even risk-free and particularly if this means buying what amounts to an established clientele base that is going to stay with this business as it goes through an ownership transition, and if it has well-maintained physical operations (e.g. business-owned and included office and/or sales space) that could be moved into with minimal renovation costs. That can happen and when it does, that type of business sale and purchase transaction and its outcomes would clearly and cleanly fit the terms of my assumption as offered towards the top of this posting. But much more so than in the case of becoming a franchisee with an established business, this is a career path possibility that is fraught with unknowns and uncertainties.

I remember writing a few years ago in this blog of a specific case in point example where a business owner facing retirement did so with a great deal of ambivalence. I wrote of how he expressed that by speaking out against the younger professional who wanted to buy out his business – to his clients, driving many of them away. An office space that looks clean and tidy can still have dry rot in the walls and floors, and need extensive and even massive renovation, and while that is an extreme situation the cumulative impact of individually smaller problems can really add up too.

• I wrote above of the importance of networking and social media as basic due diligence requirements. Finding and securing the services of a good attorney and a skilled and experienced building inspector who can spot problems there, can be invaluable too as can finding and securing the services of a good accountant. And costs and fees from these services add up and have to be included in the cost of even seriously considering this general type of career move.

So to return to the basic assumption, as offered above:

• Risk and costs, and opportunity and positive potential as well can and do take many forms. And they are not all always going to be readily visible or predictable. And with this in place I turn to consider the details of Part 13 and what startup and new-to-you, business ventures mean to you. And I begin with the perhaps more baseline issues of skills and experience, and both for what you have and for what you want to more effectively use.
• I will then consider some of the basic moving towards and moving away from motivators that would lead people to move out of their more familiar workplace and career path settings to try one of these newer and more novel to them alternatives.
• What types of professional backgrounds and what types of motivators to be your own boss and build from there mesh together more smoothly and with greater opportunity for success?
• And given these considerations, at least categorically which of the three basic new-to-you new business options would make the most sense for you to focus on?

I am going to turn to that set of issues in my next series installment. And in anticipation of that, I will focus on two working examples of how this can play out:

• An innovative tech-oriented entrepreneur who is driven to bring what they see as a pivotal new innovation to market as products that can create value and for all,
• And a professional who sees overriding value in their gaining an opportunity to work face to face with their customers in meeting their needs, and who dreams of finding, or creating an opportunity to work with those customers and to get to know them as individuals and as members of their community.

Meanwhile, you can find this and related postings at my Guide to Effective Job Search and Career Development – 3 and at the first directory page and second, continuation page to this Guide.

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