If you go to your local bookstore (they still exist, don't they?) or search for "entrepreneur" or "small business" on Amazon, you will find thousands of books and e-books on how to start a business.
To paraphrase the Old Testament book of Ecclesiastes, of making many startup success books there is no end, including — truth be told — a number I have written over the years.
It's hard to say something new and different in a startup guide, but Ed "Skip" McLaughlin and co-author Wyn Lydecker (a small business expert in her own right) have managed to do it in "The Purpose is Profit: The Truth About Starting and Building Your Own Business."
The authors have truly walked the walk. McLaughlin is the founder of four businesses and is currently running Blue Sunsets LLC, a real estate and angel investment firm. His first business was a corporate real estate outsourcing firm called United Systems Integrators Corporation, or USI, which he grew into an Inc. 500 company. In 2005, he sold USI to Johnson Controls, and then became CEO of the company's Global Workplace Business for the Americas.
McLaughlin's life story is of interest to me for a couple of reasons. First, he is exactly as old as I am. Second, he got the entrepreneurial itch at exactly the same time I did, in 1990. Third, the tipping point came to him in a similar way it did me. While a partner in a large real estate development firm, he came in to work one Saturday morning and found a spreadsheet in an office copier that showed he would be gradually phased out of the company. In my case, I was working as inside counsel for a large financial institution. The senior lawyer who hired me, and who was my champion within the company, was reassigned to a special projects position, and my package arrived soon afterwards.
Most importantly, while McLaughlin's first venture, USI, was a colossal success (unlike mine), his follow-up entrepreneurial venture (like mine) was a total flop.
In 1991, McLaughlin formed Sigma Communications Inc. with profits from USI. He set out to publish a high-quality, quarterly magazine, The National Register of Commercial Real Estate, to share ideas for dealing with surplus real estate, and to efficiently link real-estate buyers and sellers through the magazine's centerpiece, The Commercial Property Exchange. The Exchange would list surplus commercial property that was for sale, for lease or for sublease.
In 1991, I set out to launch my own publishing company, Biennix Press, to create a catalogue of books, newsletters and other dead-tree publications providing career advice and counseling to young lawyers, paralegals and legal professionals (don't bother looking for it online, for it's long gone, although a couple of my books from that era are still in circulation).
Looking back, McLaughlin realized that he made seven crucial errors with his venture:
—He had no competence, experience or track record in publishing.
—He did not secure preorders to validate the business model.
—He let his passion blind him to the realities of the market.
—He did not plan adequate funding for the scope of the venture.
—He did not listen to the advice of advisors and industry experts.
—He did not budget adequate time to sell a new business model.
—He did not have sufficient resources to reach profitability.
Looking back, I realize that I made all seven of McLaughlin's mistakes with my own publishing venture. However, I got lucky: Favorable reviews for our first book (a handbook on interviewing for a legal job) appeared in some high-profile publications targeting law students, young lawyers and (critically for us) law librarians, which generated significant sales for Biennix Press, at least for a while.
Based on my own experience, I think McLaughlin should have added an eighth mistake: not taking seriously enough new developments and technologies that will make your business model obsolete. He and I both started our businesses in the early 1990s. A few years later, we all realized that the internet was a disruptive technology that would dramatically change the world of book publishing. People wouldn't be looking to books and magazines for career information or property listings. The future was (and still is) online.
I folded my business because I didn't think I had the skills and competence to bring my "career advice for lawyers" concept into the 21st century. McLaughlin folded Sigma Communications for similar reasons. But he found a buyer for his successful USI business (lucky sod), and his post-sale experiences are required reading for anyone who thinks selling out is all gravy.
McLaughlin's experiences are the framework from which he builds his advice for startup entrepreneurs, his key point being, "Don't do what you are passionate about; do what you know and are competent at doing." Amen, brother.
Cliff Ennico ([email protected]) is a syndicated columnist, author and former host of the PBS television series "Money Hunt." This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state. To find out more about Cliff Ennico and other Creators Syndicate writers and cartoonists, visit our Web page at www.creators.com.
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