Is it Time for You to Start Your Own Business?
Prior to entering recruiting, I worked for two terrific companies: Procter & Gamble and Polaroid Corporation.
I did a lot of things that I loved to do. I took pride in my companies’ brands. I loved giving presentations. I enjoyed the travel. I took fascination in new product introductions. I found joy in absolutely crushing the competition in shelf space, ad space, and in sales.
However, I had two frustrations.
- Income: No matter how great my performance or the evaluations of my performance, there was little difference between my income and the income of my peers. At one point at Procter & Gamble, I led in sales performance for 15 consecutive months and got the same bonus and same pay raise as everyone else. My first year at Polaroid, I led the nation in sales against quota. My bonus was 17% of my salary. The lowest bonus was 12% of salary.
- Location: Where my family and I lived had to fit the needs of the company.
My first experience at witnessing a successful start-up company was a real revelation. I had just taken a promotion and moved my family to The Woodlands, TX, just north of Houston. I had an office around the corner from a man, who had worked for a major oil company. Three years earlier, he had started a company that brokered sulfur and sulfuric acid. These chemicals are waste products. Refining separates then from the oil.
To other companies, sulfur and sulfuric acid are essential products. He developed the knowledge for selling these chemicals during the time he worked for the oil company. His business model was simple. He found people who needed to dispose of sulfur and sulfuric acid and found people who needed to buy them. He made a commission off brokering the deal between the two parties.
His income and my income were very similar except that his income had significantly more digits to the left of the decimal point than my income at Polaroid Corporation.
Today, the company that he founded is an international chemical company that sells a diverse range of chemical products.
He started his company based on two concepts:
- He relied on his established network, which immediately gave him a customer base.
- He became a broker, which eliminated the costs of owning inventory and the costs of manufacturing products.
You may find that starting a company offers more security than getting a job. A member of my family was a successful sales person for a fragrance company until another fragrance company bought his employer. He found himself in the same place in which many people find themselves. Another company bought his company and eliminated positions.
Rather than pursue another job and face the risk of yet another job loss through an acquisition, he set up a brokerage operation for consumer products. He established contracts with a network of companies that would ship to and bill retail customers. He had no shipping or inventory complications. He got his commission directly from the company that shipped the product. His retail customer base was the same as the one where he had been successful. He reduced his risk of distribution losses by building a base of product selections built on contracts with a broader range of products than just fragrances.
He quadrupled his income.
The broker business model is simple. Brokers find a person with a need and a person with a product or service and make a commission from putting them together. Sales people have the straightforward opportunity to go from an employee to a contract employee, because they typically have an established network for their goods or services. Yet many people have a network and the skills to meet needs within that network. Even without a network, people set up websites with shopping carts and start new businesses.
Self-employment provided me with these three things.
- Allow me to live where I wanted to live
- Connect with contacts and knowledge I already had and every year build on those relationships and that knowledge
- Tie my income directly to my performance.
Is it time for you to start your own business?