Starting a Business – Some Thoughts
I was recently asked in a UK Permaculture survey ‘What matters when you start a business?’
To explain, I am in a fairly privileged position to answer. I have been running my own businesses for thirty-three years. I have worked in many different sectors: IT, Construction, Training, Organic Food Production, Tree and Plant Nursery, Sustainable transport, Energy efficiency, Creative arts, and dabbled in a whole lot more.
As Edinburgh (Scotland) Manager for the Prince’s Trust for six years, I helped over a thousand young (18-25) people who wanted to start businesses and tracked the progress of those who did for two to three years. The half who didn’t start I often felt were more of a success as I watched the struggles of those who did. I have been a business mentor for twenty years with more mature business people. On an informal basis, I have spent many hours discussing how to fail (or even succeed!) in business with many individuals and groups.
One of the things I notice is that the same challenges come round again and again. Why does this matter in the world of Permaculture? Well, for a number of different reasons. If you accept the essential premises on which Permaculture is built you will appreciate that followers of the discipline agree to take as much responsibility for the welfare of themselves and their families as they can. So self-employment becomes an obvious choice.
If we believe in People Care and the right of self-determination for all we will also be encouraging others to do the same. But don’t ever make the mistake of thinking this is an easy way forward. It’s one of the most challenging routes in life you can choose. Therefore, also (potentially) one of the most rewarding. I’m not thinking so much about making a fortune (a prize gained by very few- and we would then have to ask at the expense of whom else?), but the self-respect gained from being in charge of your own fate, and the opportunity to help others and know that your rewards come from your own honest labour and endeavours.
In my experience, many of the people who choose to become their own bosses do so because the world as they find it (through attempts at employment) make little sense to them. They see incompetent people in charge of competent people. They see inequality and social injustice. They lack appreciation for their own efforts and hate being ‘part of the machine’. I found a very high rate of people who chose to be their own bosses were dyslexic. I also learn a lot about how this term is used and abused.
Most people think dyslexia means people who lack skills in literacy, numeracy and occasionally spatial awareness. I’m a big fan of the inventor of mind maps – Tony Buzan, who points out that these three kinds of intelligence reflect the basis of the conventional educational system, but that there are at least seven other kinds of intelligence which matter and are neglected in that system. For example, we’ve all met the man who has been married four times and thinks women are the problem- yes: being able to handle loving relationships is a special kind of intelligence. What about the person who can mend any kind of machine – despite the fact they can’t even read the job ticket? Mechanical know-how. Or the women who are brilliant with children – a nurturing ability. Or the green fingered folks?
So the people labelled ‘dyslexic’ don’t lack intelligence. They usually just have a different way of thinking. And that’s what you need to succeed in business. A different bunch of ‘smarts’ that enable you to be a leader rather than a follower. The Permaculture world naturally attracts people with this bent because once you get Permaculture little of conventional economics, the world of work, or the human actuality of war and environmental destruction makes any sense at all.
OK. So I’ve decided to work for myself. I’m going to make a difference. I know what I believe in. What could possibly go wrong?
- Money. Specifically working capital and cash flow.
- Paying yourself. Can only be done from profits. So you need to ensure you are able to feed yourself pay your rent/ mortgage/ interest through the high-risk period of getting going.
- Costings. You need to understand about costing your product / service. Too many people start out saying my unique selling point (a phrase I never heard of until I had been in business twenty years) is to be better than everyone else but cheaper. It’s simply not sustainable. If you are better than everyone else, you should be more expensive. Regrettably, there are too many people in the Permaculture world who are stuck in poverty consciousness. What we need is to provide value for money for what we do. That’s very different from ‘cheap’. John Ruskin said: “There is hardly anything in the world that some man cannot make a little worse and sell a little cheaper, and the people who consider price only are this man’s lawful prey.” I had a client who was a skilled cabinet maker who set up charging joiner’s rates. He was fully booked and made no money. I told him to double his prices. He said: “Then I’d lose half my customers.” “Doh! So you’d be working half as long for the same amount of money?”.
- I need to be perfect. Another way of failing to earn a living. No-one is perfect and the striving for that goal leads to the endless postponement of actually doing the job. What you need to do is be good enough. It particularly applies in the manual trades, but if you a) always do what you said you would b) when you said you would c) for the price you said you would d) to the standard you said you would and e) you clean up after yourself… you well never want for work.
- Build stories. People buy stories. They enjoy soul in what you do, they love a little humour to lighten their lives, and they love the deeper experience that comes from trading with people who are in touch with these special attributes of humanity.
- The next wall people hit, as their businesses grow is not getting paid on time. First and best answer is don’t give credit at all. Next is if you do be really clear about what the terms are and be polite but firm about expecting them to be kept to. Have terms and conditions of business that give you a lien (ownership) over and goods supplied until they are paid for. If you’re not sure about people check them out. That’s why many firms don’t give credit until they know you.
- Avoid debt as long as you can. Build your working capital. If you come on my Permaculture courses you’ll learn lots of ways to do this.
- Oh dear my business has grown to the extent I need to employ people. This is where it gets really difficult and we start to get involved in complications of tax, insurance, pension funds, sick leave, maternity leave. My personal advice is to find any way you can not to employ people but to use contractors and support other people to become self-employed and in charge of their own destiny. If you do employ people you need to know how to manage them. If you don’t, then get help.
- Where is my business coming from? Often this bites hard in the early days of a business. Never trust that friends and family will keep your business afloat. Build those stories and get out there and sell. “I put an advert in the yellow pages has launched few millionaires.
- The biggest burden of all: I don’t know how to do all these jobs! When you become your own boss you are the costing clerk, the marketing manager, the sales person, the debt collector, the production line, the transport manager, the health and safety officer, the timekeeper, the bookkeeper, the management accountant… oh and you’re also in charge of who gets which holidays when. Don’t forget to take some. Build your team of allies. Don’t be afraid to ask others for help, and help others in your turn. It’s a tough ask. Or you could just get a job!
Many people who end up in this cycle have come to think money ‘is a bad thing’. It isn’t. It’s simply a very efficient way of exchanging energy enabling us to use the division of labour to operate systems which provide for human needs more efficiently. Get to love money and understand how it works. But don’t make it the focus of why you do what you do. Diminish your need for money and liberate yourself from dominance by the global economy. Grow your own food. Build your own house. Make your own clothes / art / music. Develop your skills base. But however good you are at all this the first barrier your business will surely hit is running out of cash. Hardly any start-up businesses have sufficient working capital to achieve their aims. And businesses die for want of cash long before they die from lack of profitability.
Graham Bell Midsummer’s Day June 2016 Coldstream, Scotland www.grahambell.org.
Graham will be teaching the Permaculture Design Course at the Permaculture Research Institute Australia from October 17 – 28 2016.
Come and learn from this dynamic and always engaging teacher with a lifetime of experience. Visit the course listing page here for more details and to book.
- What Should I Charge as a Permaculture Design Consultant
- 3 Keys to Starting a Successful Permaculture Based Business
- Permaculture Business, Part 1: Tips from the Pros
- Permaculture Business, Part 2: on Oppurtunities
- Permaculture Business, Part 3: on barriers
- Permaculture Business, Part 4: on mentorship