Joe's Calculations and Assumptions.....

Joe’s initial calculations:

An 8 hour work day at the rate of $85.00/hr add this to the fact that Joe worked a 6 day week gave him a weekly income of:

8 x 85 = $680.00

680 x 6 = $4080.00

This equated to a monthly income on average around $16320.00, a tidy sum for a one man start-up enterprise with little or no overhead.

Now when looking at these figures it does seem like a very lucrative business to have. Joe further estimated that he would be able to charge a 20% surcharge on spare parts, which would further escalate the monthly income to an estimated $17820.00. One must admit this seems like a very good income level for a single individual. It was the single biggest reason for Joe starting his own business. The new business really looked financially feasible.

Now that we have further input from Joe subsequent to him starting the business let us take another look at the situation as it really was and the reason why Joe found himself in the class. These are the points that Joe raised in our discussions:

Customers

Having a continual stream of customers takes a lot of input from the entrepreneur.

• Who are they?

• Where are they?

• How do we reach them?

• Who will call on them to get their business?

• How will they find me?

• How much do they have in their budgets to spend on the services I provide?

These were some of the questions that Joe said he had to answer.

Services

What was it that Joe was offering that was different, what made his services unique?

• What would make the difference between a customers selecting his services from that of his competitors?

• How should he price his services?

• How should these services be packaged?

Just more questions that that Joe needed answers too.

Ø Administration

What about the paperwork?

• Who was going to do the quotations/estimates?

• Who was going to do the job cards?

• Who was going to do the invoicing?

• Who was going to collect the payments?

• Who would do the computer arts ordering?

• Who would collect the computer parts from the supplier?

• Who was going to do the banking and the processing of GST and PST?

• and who was going to do the daily accounting and record keeping?

More questions that Joe did not have the answers to!

Production

Well, while Joe was doing all of the above who was in fact going to be the technician. Joe had never imagined that running a company would be so complex. In all the areas of his business it was only production that he understood and only the part of production that related to doing the job.

One of the things that Joe did not realize at the time of his “entrepreneurial brain cramp” was how in fact the industry he was in, made money. He had only one perspective seeing the billing that his boss’s customers received. The rest of the company operations were unknown to him apart from how to fix the computers. How did the industry make money and how was he to make money in that industry? These were the burning questions that when answered would assist him towards achieving success. In fact Joe had not figured out what business he was truly in.

What Joe was feeling is not uncommon amongst entrepreneurs. There comes the excitement of starting your own business, then the fear of the project, then the exhaustion from doing everything yourself. Not to mention the stress that comes with the territory; then finally you enter the arena of desperation, which leads to the total loss of self esteem and then the feeling of failure finally sets in.

Does this have to happen to you?