John Tenney

Professional and Personal Blog of John Will Tenney

Tag business ownership

Failing My Way to Success

How many times do you need to fail at business before you succeed? I decided to review my own attempts at starting businesses and see how many it took in my life:

Failure 1: Sailing Business in Upstate NY

1981: I started a partnership called “Racer’s Edge Sailing Accessories” with a girl friend, while living in Rome, NY. Fairly quickly, I learned the negative aspects of seasonal businesses, maintaining inventory and partnerships. It lasted about 3 years before I just stopped doing it, with a garage full of sails, blocks, tackle, other sailing accessories and not to mention an extra boat or two. I think one of the boats is still sitting in the weeds behind the old Pennysaver business in Clinton.

Failure 2: Computer Consultant Business

1983: John W. Tenney and Associates actually had a couple of successful contracts, working as a subcontractor for RADC at Griffis AFB, but it didn’t last. I learned quite a bit about the gov’t contractor business though, as well as the perils of media advertising. I placed a discount ad in the family paper, the Pennysaver, and was immediately deluged by sales people from other media. I got suckered a few times too, by a local AM radio DJ, a pen salesman, and a computer supply company. I learned a lot about the politics of contracting though, and it has stuck with me to this day.

Failure #3: Various MLMs

1989 thru 2012 (sadly): This included Amway, NetTel, Amway again, Advocare and even a weird one called Zeek Rewards. While I learned a lot about sales techniques, positive thinking and interacting with people, I also learned three key negative but firm reasons to stay out of MLM:

      1: There is no room for creativity in MLM. You MUST duplicate exactly what your upline is doing. If you try something new, so will everybody below you, and things get out of control quickly. Doesn’t work for me.
      2: Relationships are vertical, never horizontal, in MLM. You only talk to people above you or below you. “Crosslining” is a recipe for disaster. Also didn’t work for me.
      3: The government will never allow you to make money without working. That is reserved for government employees only.

Failure #4: Website Design Company #1

1994: OK to be fair, this wasn’t a full time thing. I was doing this for friends in the airlines, who had sideline businesses but it never generated a livable wage. It was educational though. In addition to learning a lot of website design basics I also learned what the market will bear. Everyone wants a “flashy” (pun intended) looking website but they only want to pay about $100 for it. True to this day.

Failure #5: Aircraft Charter Company

1992 until 1998: Although this business didn’t “fail”, it certainly didn’t meet my expectations or financial needs. It was tons of hard work, schmoozing, and waiting around for people. Hard to insure, too. Absolutely no residual income either. It did lead to a brief airline career which was fun, but also not financially successful.

Failure #6: Website Design Company #2

2001-2004: Tenncom was our attempt to recover after 9/11. Back in to the website business, my wife Kathleen and I got a lot of clients, but all at a discount, so we never made any money. To make matters worse, we took the advice of a college student (big mistake) and started selling hardware. Didn’t I learn about the negative side of inventory years ago? I still have a big bag of 3.5 inch floppy drives in the garage.

Success: PEO Pros/EmployerNomics

2005: Although we started the corporation in 2003 we didn’t start the PEO brokering business until early 2005. It has what we have learned are necessary elements to a successful startup. Here are just some of those points:

  • Low overhead
  • Residual income
  • No inventory
  • Not seasonal or location dependent
  • Possible to build your own niche
  • Duplicatable, repeatable business model
  • Teachable

So I had six failures before finding the right place. I learned from each one. The business landscape we have today was formed by what I/we learned from those failures. It hurts that we failed, but it is very reassuring to know that without those failures, we never would have gotten here today.

I’m very glad I decided to fail my way to success.

Economic-Gardening The Right Way

Economic Gardening

Economic-Gardening  The Right WayFlorida has touted the term Economic Gardening for several years now.

Many business, political and economic leaders have dropped the phrase many times. Is there something to it? What’s it all about?

More important: Is it working?

The subject has several parts. It would require an in depth study beyond the scope of this essay but let’s try and explore it a bit.

What is Economic Gardening?
I first heard the term in a Florida Trend article (which I have been unable to find online) several years ago. I believe it was an editorial on the current practice and some excellent suggestions on how to improve it. Hopefully someone will point out the source to me as a result of this essay.

Economic Gardening, simply put, is the process of planting and growing business in a specified region. All regional leaders, be it village, county, state or even nation share a common desire to grow their economy. All realize that starting, growing and cultivating regional businesses will accomplish that goal nearly all the time. Unfortunately the practices some regions use are less than optimal. Let’s discuss some negative practices and follow up with some positive suggestions.

What NOT to do
One practice that sounds good at first but is counter-productive in the long run is attracting businesses from out of the region by giving tax breaks for moving to the area. While this might be initially advantageous, it will eventually hurt the existing businesses, and history has shown that a high percentage of transplanted business get up and move once their tax breaks end. Well, of course. If they were eager to move once to save money, why not do it again?

Another practice that can be abused is marketing in other regions. Aside from being expensive, with travel and all, it hasn’t shown a large success rate. My own county used to pay one of its commissioners to make “marketing trips” to another state with the auspicious intent of attracting businesses to move down to Central Florida. The ROI on this effort was extremely poor. It was also discovered that this commissioner was combining family visits with nearly all the trips as well.

The final error I will discuss is the tendency to concentrate on larger businesses, and neglect the high potentials of smaller business. A region would benefit much more from 100 small businesses than one large employer. When a region is dominated by a large employer that employer starts to get too much power in the region, and creating many other problems.

Let’s do it RIGHT
One of the most enlightening features of that Florida Trend article that burned in to my memory was the concept that most of the “seeds” for the region’s garden are already here, in one form or another. There are startups all the time. Giving assistance to local startups seems like a good idea, no?

Another idea was that a lot of the businesses you want to recruit from other areas may already be visiting. In Central Florida we have a large tourist population, and many of those are business owners. The article even went on to say that it might be as simple as starting a conversation at one of the local attractions and including a comment such as “Wouldn’t it be great to live here year round? Wouldn’t your business do just as well or better in this region?”

My final suggestion is to spend more time on the smaller, high potential businesses, which are generating positive cash flow for the region. This would be companies that are creating an inflow of cash to the area, be it through the private sector or government contracts. Several local organizations here in Central Florida are working in this direction – GrowFL, UCF Incubator, SBDC to name a few.

Summary
As I previously stated, a large number of small businesses makes a more attractive economic environment than a small number of large ones. Keep in mind, that every large business at one time started as a small one. Next time you see a small business owner, encourage them. And you might ask them, “Hey, you know anyone in business from out of the area that might like to live here?”

Good business to you!

business trends

Trends

business trendsPart of success is preparing for changes in the business environment.

It’s important to pay close attention to trends. What kind of trends? Some are obvious: Tax laws, government changes, current events, technology advances and media swings are all important, to name but a few.

First, a warning to business owners: Trends can be overrated and greatly misinterpreted. Use these at your own risk. “The management can neither confirm nor deny the validity of the points in this article.”

Here are some of the trends observed lately:

Big Government is In, Private Industry is Out
One needs only to look at the results of the last election to see this. Government spending is at an all time high and shows no sign of reduction, as the “entitlement generation” is coming of age. They are used to things being handed to them and want that to continue. However, with all trends there is also a reaction, which leads us to the next one …

Small Business is In, Big Business is Out
This perception is not a reality, of course. Big Business has too many weapons to be eliminated, but the “trend” is to buy from small businesses. The recent success of Small Business Saturday shows the effect of that campaign. A related trend is …

Buy Local
Even though internet sales are higher than ever, this “mantra” is being repeated over and over. Conscientious buyers are checking local stores first, or even shopping from the local website. Again, the big chains are not in any serious danger from this, as they will break up in to smaller, local operations. This will happen more and more in the near future.

Social Media is In, Talking Heads are Out
More and more people are getting their information from social media, and then only going to networks to get more information. This leads us to the next one …

Facebook is In, LinkedIn is now LinkedOUT
One at the top of the businessman’s social media, LinkedIn has plummeted in popularity while Facebook is growing faster and faster. LinkedIn has attempted (and failed) to make their interface look more like Facebook but they have missed the key points that make Facebook more popular, which is the viewer control of unwanted content and contact. Facebook users can block ads, spammers and marketers to the extent they desire. Indeed, LinkedIn has turned in to a “Lead Generation” device, which is backfiring, as those people who are successful resent the intrusion of being considered a “Lead”

Twitter is Entertaining, but still generally useless for serious business
The appeal of the one-way distribution of information is irresistible to celebrities, sports figures and entertainers, but is still generally useless to the average Joe, except as a way to follow such people’s activities. Even though they have a “Trending” function, the number of people that really know how to use it is still regrettably small.

Image Management is In, Customer Service is Out
Sad but true, marketing experts have realized that the level of customer service matters very little compared to the perception of that service. So expect to see more “green” marketing campaigns but less actual effort towards pleasing customers.

Your author hopes to continue this series. In thirty days he will review the trends predicted and see how they look. Until then …

Luck does not exist

“You’re So Lucky”

Luck does not exist“You’re So Lucky”

Do you hear this when people see something that is part of your life, or someone’s life, that they wish was part of theirs? It’s a common expression but think about it, by saying that to someone what are you saying? I suppose on the surface it says “I wish I had your lifestyle.” Let’s dig deeper though, what does it really say? Perhaps the intent of saying “You are lucky” could be translated as “I made just as good life choices as you but somehow you got a better outcome.” Is that closer to the truth?

I have now been alive 54 years. I can’t say I ever saw anyone that was truly “Lucky”. It’s been said that “Luck is when preparation and opportunity come together.”

I’ve definitely seen people who were more prepared when opportunity came along. I’ve also seen people recover from situations you would call “bad luck.”

May I share a personal example? On September 10, 2011 I was a Boeing 737 First Officer for Midway Airlines. On September 12th, we all received emails telling us that the airline was shutting down, “good luck.”

“Fortunately” (“Lucky for me!”) I had a second job. I was working part time as a consultant for a local charter company. I went to work there full time. Now really, was this luck? Or was this being prepared?

Obviously, no one could be prepared for the devastation caused by the terrorist attacks of 9-11-2001. The nation was in deep shock. I never expected the charter job to become full time.

Continuing on with this story, it quickly became apparent that the charter job was a dead end. The future I desired was not going to come from there. At first, I tried to change it. I made several attempts to grow the company, many of them successful, but it was privately held, and I knew the owners would never really share the equity I was creating with me to the extent I wanted.

This was made glaringly apparent when I solicited, researched, arranged and closed a large charter deal that netted the company $30,000. I asked for a $5,000 commission. The answer I got was a shocked expression and an exclaimed “Five Thousand? Are you crazy? We can’t pay you that much. We can give you Five Hundred maybe …”

I started to chalk it off to “bad luck” but stopped myself. I learned the lesson. I needed to change my outlook if I wanted to change my life.

That was also the sign that I needed to build my own business, and take control of my own financial future. I began to form the Tenney’s Rules of Financial Security. The rules grow as life goes on but here are the Thirteen Rules About Luck.

Rule 1: Good Luck is When Preparation and Opportunity Meet
From this point on I was determined to be prepared.

Rule 2: If You Want To Change Your Life, You Have To Change Your Life
or “if you want to change some things in your life you need to change some things in your life.” Another corollary: “The definition of insanity is doing the same thing and expecting different results.” The gist of this rule is there are risks to be taken, and changes to be made to achieve better results.

Rule 3: Nobody Else Will Look Out For You As Well As You Do
Translation: If you aren’t in control of the money, you won’t get it. Sadly I had to have two incidents like the one above to make this point. This also leads to the next rule:

Rule 4: If You Don’t Control It, Then You Don’t Really Own It
That’s important. I remember being told as a multi-level distributor that I “owned my own business.” I can see the fallacy in this now. I had only one supplier, inflexible pricing and no options. In short, I was on my own with no control over what I could sell or how much to sell it for. I had “rules” to follow which basically prevented me from getting any position or advantage over any other distributor. There was no compelling reason to do business with me. This, among many others, is a reason I do not like multi-level businesses.

Another thing people think they “own” but they really don’t: real property. If you think you own your home now that you’ve paid your mortgage think again. Just try missing your property taxes for a few months and you will find out who really owns your home. This was another good lesson that led to the next rule:

Rule 5: Equity In A Home Is Mostly Worthless
The mortgage bankers are now screaming “heresy! blasphemy!” but this is true. Unless you have a home equity line of credit (HELOC) that is unilaterally irrevocable equity in your home is not going to help you at all when you really need it. Think about it. You get disabled, lose your job but you have all this “equity” in your home. Just take out a loan and live on that until things improve right? Hmmm, nice plan but I never met a banker who would lend you money unless you really didn’t need it. Even on equity loans they want to see income, and income that is capable of repaying the loan in a timely fashion. So don’t count on home equity as a “security blanket” – it isn’t!

Rule 6: There Are Friends In Business, But Only So Far …
I have done my best to surround myself with people I like and trust in business, but I always remember that even friendship will wither when times get hard. This is not cynical, it’s just fact. When it comes down to a person feeding their family, friendships have to take second place. So the next few rules apply to this rule.

Rule 7: Get It In Writing, Signed, Dated and Maybe Even Notarized
I had a lawyer tell me once that his primary source of income was other people’s failure to prepare written documents. While he enjoyed working for people who got everything in writing, he had to admit that the lion’s share of his fees were from resolving disputes between people that did not have written agreements or contracts. It may seem silly at the time but 10 years from now that contract is going to mean everything to you. Get it in writing.

Rule 8: To Keep Your Friends in Business, Give Them Something to Lose
Keep it equitable. If your friends are gaining as much from you financially as you are from them, the friendship will not be as strained when times get tough.

Rule 9: Always Get an IOU for Everything You Do
This is actually a rule by David Sandler, but I’ve said it enough that it’s been adopted in to the Tenney Rule Book. I’ve taken expressions such as “don’t worry about it” or “no big deal” out of my vocabulary. Instead I say things like “I’m sure if situations were reversed you would do the same for me” or similarly if I know them well “you owe me one.” People keep score. You know they do. All we are doing is helping them remember the score. Conversely, if someone does something above and beyond for me I remember it.

Rule 10: Become a “Trusted Adviser”
This is also from David Sandler. A trusted adviser is someone who would never knowingly give you bad information or attempt to mislead you. This also involves being an expert at something. I’m not suggesting you give away “free consulting” but if it is in your best interest to advise something, then do it well and with their future in mind.

Rule 11: Your Time is Your Most Valuable Asset
You can always make more money. It is impossible to make more time. Use your time wisely and use it the way you decide. Once I learned to stop letting other people control my time, my lifestyle became much better.

Rule 12: You Can’t Enjoy Life Without Good Health
The most important thing you can control, other than your time, is your health. You can’t be a good steward of your life if you are sick or unhealthy. You will also enjoy your life much more if you are in good shape. There is nothing more important than this, nothing! You may think spouse, family and things like that come before health but they don’t. Believe me, your spouse, family and friends would rather have you healthy and taking care of yourself than otherwise.

Rule 13: There Is No Such Thing As Luck
There really isn’t a rule 13 but I couldn’t have a story about luck without the number 13 in it could I?

That’s enough for now. There are other rules, corollaries, guidelines and watch words that are important but this is a good start. Someday I will publish the complete Tenney Rulebook, but until then I plan to enjoy my time, my success and my lifestyle.

I guess I’m just lucky :)