“This rack looks like a pig sty,” Training Instructor Martin shouted as he grabbed the metal frame of my Air Force bunk and tossed it into the air.
I instinctively jerked back and watched in amazement as my bed became airborne and then crashed to the floor into four pieces.
“What don’t you understand about hospital corners?” Sergeant Martin’s eyes bore into mine, searching for weakness or defiance.
I grew up making my bed with hospital corners where you carefully fold the corners of your sheets to prevent bulging at the corners (it is also the secret to tight blankets that can literally cause a dropped quarter to bounce off the bed), and was frankly shocked that among 50 beds in the dormitory, mine was singled out for ridicule.
“Who taught you how to make a bed?” Sergeant Martin screamed.
“My father taught me, sir,” I stammered.
Sergeant Martin scanned the dormitory to make sure he had everybody’s full attention.
“Listen up, Airmen,” Sergeant Martin said. “I don’t care what you think you know, or what you think is right. Forget about it. Everything except what I tell you is wrong. Now, we’re going to start from scratch and make a bed my way.”
Sergeant Martin went on to conduct a thirty minute class on how to properly make an “Air Force” bed. And while the final result looked a lot like my first attempt at making my bed, the lesson began to sink in…
…Every environment or situation (including any business or industry) you find yourself in demands unique knowledge, skills, and abilities, as well as a new mental mindset. My mistake was rushing ahead of the bed making game and assuming I already knew everything I needed to know to succeed in this important little facet of boot camp survival.
From a business perspective I see aspiring entrepreneurs make this same mistake every day. And it’s not just mom and pop business owners screwing this up. For example, years ago Snapple became one of the hottest new beverages on the market. For some unknown reason Quaker Oats decided to purchase the Snapple business and quickly lost millions in their attempt to expand its oatmeal and breakfast cereal business into the competitive beverage market. In my opinion their mistake may be traced to the misguided notion that since they were able to successfully market oatmeal, they could repeat their success in the beverage market. I should add that the names Snapple and Quaker Oats are registered trademarks, and remain to this day two of the best known brand names in corporate America.
In another example that borders on being a cliché in the restaurant industry, many homemakers and excellent cooks believe their ability to roast a turkey or bake a perfect pie qualifies them to profitably run a restaurant. Believe me, there is a lot more to making money in the food service industry than baking pies—as thousands of homemakers across this country discover to their chagrin every year.
On a national level we have all fallen victim to the same crippling mental mindset where we believe our success in two world wars, coupled with the transformation of our agrarian economy into an industrial superpower, somehow makes us invincible in the world markets, or immune to change. Sadly, like most sacred cows and wives’ tales, ignorance and arrogance eventually catches up with reality—as the current poverty rate in America suggests it has.
According to the Census Bureau’s latest annual report, the poverty rate in America has reached new highs, where over 46 million people live below the poverty level. That means 1 out of every 6 Americans live in poverty, which for a family of four is a monthly income of less than $1,800.
I’ve lived in poverty and felt the sting of not having enough money to make it through the month. And for those of us who have done the right things, worked hard, and tried to live a good life, I sympathize. But in many cases our problems can be traced back to a failure to adapt.
Beyond the politics of free trade, bailouts, and taxation, the truth is, the world has changed. My father lived in a world where lifetime employment was virtually guaranteed, and it was assumed that your children would make more money, be better educated, and enjoy a higher standard of living than you had.
But if you cling to the old school ideals of going to school, getting a job, and retiring to live the American dream, then you may find yourself out of luck and wondering: “What happened?”
As I see it, the future of America is entrepreneurship. That is, as more people find ways to make money from privately owned and controlled businesses and free themselves from the corporate, employee income model, the quicker we can rise above a poverty existence and rejuvenate the American economy.
The problem with my solution to our job and income malaise is three fold…
1. Finding a potentially profitable business to start and build is not easy.
2. Learning what it takes to run a business profitably can be a challenge for some.
3. And, having the faith, vision, and self-initiative to build a profitable business for yourself is a valuable and rare commodity.
None of the above three problems are easily resolved, as human nature gets in the way.
First, human nature has a way of causing us to distrust opportunities, and sadly this distrust is based on two other human traits, known as greed and dishonesty.
Second, most of us tend to be intellectually lazy. By that I mean we are resistant to learning or taking the initiative to teach ourselves a new skill. If you think your education ended the day you graduated from high school, then I’m afraid you are doomed to join the ranks of the poverty stricken in America.
Third, the majority of us cannot see outside the box. To make money and achieve financial freedom in today’s economy will take a paradigm shift in how we think about earning a living. If you’re stuck in the 9 to 5, “working for the man” income model, you are destined to be disappointed.
As I learned during the first week of boot camp, the key to survival in a military or business environment, is adaptation. As an entrepreneur the best thing you can do in this area is to first recognize that you may not know everything, and accept the fact that every new endeavor you pursue requires a “reset” of your mental mindset. To that end, I challenge you to follow Benjamin Franklin’s advice where he said, “Put the coins in your purse into education, and education will fill your purse.”
Somewhat related to this idea of “self-training” and “change” in the global marketplace, is the notion that automation is a job killer. Do you believe automation is a job killer, or that automation is responsible for the demise of our economy?
Without getting too political, President Obama recently stated that he believed automation was in some ways responsible for the high unemployment rates in America today. On the surface his message appears naïve, but in actuality, it goes much deeper than that. In my opinion, it is not automation that is killing our economy, it is our slow rate of adaptation that is hurting us.
· ATM machines displace bank tellers
· Voice mail and word processing software displaces secretaries
· Robotic welders displace auto assembly line workers
Think back to the turn of the 20th century when the automobile began to slowly replace horses as the primary means of transportation. At that time there were a lot of people who depended upon the horse industry (e.g. the proverbial buggy whip manufacturers) for their livelihoods. As the automobile became more pervasive, people began to lose their horse related jobs. Some adapted, learned new skills, and found new jobs or started new businesses, but a few held on to the past and paid the price with their wallets.
The same thing is occurring today. We cannot stop technological development, and we certainly don’t want to slow down the drive to increased productivity and worker efficiency.
Instead, why not embrace change?
If your job is being made obsolete by automation, or in many cases outsourcing to an overseas location, then you need to start thinking about finding a new career path. Sure, the job market stinks, and the opportunities are slim to none. But, while the nation experiences some of its roughest economic times since the Great Depression, thousands of people are finding financial freedom by going into business for themselves.
The era of the small business entrepreneur is upon us. Do yourself a favor and find a small business startup idea you can devote yourself to, and change your outlook for the future.
Automation is not the devil here—it is our inability or reluctance to adapt.
Day 3 Assignment
There are more business and investment opportunities available today than you could ever hope to research, much less start—which creates what Barry Schwartz from Swarthmore College called “the paradox of choice.”
According to Schwartz, this paradox creates a situation where too many choices creates indecision, stress, and lack of commitment. One way I have found to avoid the paradox of choice is to simply limit the number of choices. I do this by setting strict parameters for the type of business or investment I will consider. And while my parameters may not work for you, they may help you understand the business selection process better.
The greatest business on earth, in my opinion, must meet the following criteria…
· Must be something I can build, manage, and market online.
· Must provide a mechanism to generate automated recurring income.
· Must allow the use of leverage, that is it allows me to build a multi-tiered referral network (as in MLM), use other people’s money (as in real estate investing), or allows the use of margin (as in stock or Forex investing).
· And finally, it needs to be something I can understand and see myself doing.
It sounds obvious and simplistic, but time and again I hear of people joining home business opportunities or opening a restaurant or small retail store, and failing miserably. For today’s assignment I want you to prepare a written list of parameters you can use to narrow the search for the perfect business idea.
Here are a few questions to get you started:
· What industry or field of business do you know best?
· Would you consider starting a business in this same industry?
· Are you interested in opening a retail store, wholesale outlet, or service business?
· How can your prospective business idea be automated, or in some way managed and controlled in a manner that will allow you to step out of the day-to-day operation of your business?
· What is the typical profit margin for your chosen industry or business model, and is it sufficient to meet you income goals?
· Does the product or service you wish to provide add value to your customer’s lives?
· What is your tolerance for risk?
These are all important things to consider as you search for the perfect business opportunity—which reminds me of a quote from Abraham Lincoln where he claimed if he had an hour to chop down a tree, he would spend the first 45 minutes sharpening his axe.
The point is, the time and effort you spend planning your entry into a business (short of falling victim to “paralysis y analysis), may serve you well in the years to come.
Recommended Reading Assignment
Robert Kiyosaki shook the business world with his Rich Dad, Poor Dad book series, and later changed the way entrepreneurs built their businesses with the publication of his second book, “The Cashflow Quadrant.”
Kiyosaki describes the four different ways people make money, and divides these income sources into the following categories: employee, small business owner, business owner, and investor. The key point in the cashflow quadrant is learning how to move out of the employee category, and into the business and investor corners of the quadrant.
As small business entrepreneurs, we can use the ideas in his book to change how we build and operate our businesses. For me, his ideas led to a dramatic shift in my approach to creating automated systems that take the pain out of the day-to-day operations of a small business.
This is something we can all do, starting today, if we accept Kiyosaki’s concept of building business systems, rather than just small businesses.
Relative to the network marketing industry, a system is essentially a set of controls or automated processes that help you pre-qualify and sort prospects for your business.
And while automation may take a huge burden off of your shoulders in this area, it cannot replace your personal involvement in helping your team members to duplicate your successes.
In a traditional brick and mortar retail business, automation entails a more complicated process of setting strict controls, guidelines, and checking mechanisms in place to ensure your employees are performing their respective jobs and operating your business in an honest and forthright manner.
Take action today to learn everything you can about Robert Kiyosaki’s “Cashflow Quadrant.”