SMALL BUSINESS – 3 STAGES

STAGE 1, The Beginning:

Small business begins in a garage, the back of a pick-up, in a van, in a small leased space, a basement or other Spartan space.  Birthing is a tough process of 12-16 hours a day for months, likely a couple of years or longer.  The owner/operator, who may be a LLC or Corporation in name only, is likely a one-person show. If two it is usually with a spouse, family member or old-friend.  They are sales, accounting, production, distribution, customer care, janitorial, financial, visionary, strategist and problem solver in one.  They often lack capital.  Cash is even scarcer. Often they have used savings and personal credit to get started.  The beginning is the same in every culture in every country in every language.

Small business people have freedom to be a slave to the worst task master known, themselves. The have drive, determination, ingenuity, a can-do attitude, a sense of cost control, interpersonal skills for negotiating prices in a world where most prices, including their own, are fixed by external forces; the market for which they are a gnat on an elephants hind most.  To most they are stupid, crazy or at least unbalanced.  Others do not understand why they do not “get in line” and get a job delivering mail. It takes less hours, pays more and provides better benefits for their families.  Unfortunately or fortunately most small business start-ups are germinated form people who have trouble be “yes” people, living a day of routine under the control of others. In fact, most small businesses do not start because the owner/operator wanted a small business. They were laid off, fed up with their current situation, or in some form forced to “do their own thing” for economic survival for them and their family.  Some wanted it, they are masochist by definition. Some grew up in it and that is all they know. Many are immigrants unable to assimilate, with limited English skills and less understanding of the rules, regulations and intricacies of business in America but who have a skill or product that the market will pay for and, with them from the homeland, with family help from the homeland or after working multiple jobs at the low end of the pay scale like janitorial, table waiting, dishwashing or other and living in poverty as they save each nickel. They finally accumulate enough to lease a space, buy product or acquire tools to get started. America.

The underlying strength of America is that this country of patriots comes from the melting-pot of immigrants.  America is the best country in the world for a human being to chase their dreams albeit it is harder to do every decade.  America’s citizen and patriotic  strength from the Irish, Germans, Italians, Russians, Chinese, Japanese, Indians, Arabs, Thai, and Africans (Muslims, Christians, Hindi, Buddhist, Jews) and others of all skin colors, all culture and all languages who have had the courage to chase the “American Dream”.

Stage 1 is a job, not a company.  For many who survive STAGE 1 is the life they live for the rest of their lives. Understanding them and their value as people and contributors to our economic health and viability is not easy but necessary if we are to protect and keep healthy the roots of the American economic tree.  With over 50-years of experience Makemi understands small business as well as anyone. It is an understanding that in an inexact science, more art than science, so personal for such important Americans.

STAGE-2, The Company:

On average small businesses that move to what we call business “puberty” in the growing of the economic children; small business becomes small company, takes place in 2-5 years of Stage 1, “germination and birthing”.  It is interesting that 80% of all small businesses fail in the first 5-years.  Of those that fail 80% fail because of lack of record keeping.  That record keeping is usually accounting; knowing where they are financially, what they are doing well, what they are not doing well and where they are generating profit.” Small business owners often know their product or service, regulations they must meet, their customers and their suppliers more than anyone, even the so-called experts.  Answers for small business are inside of the owner-operator and the business not in experts or advisors.  Few experts and advisors listen and learn; they take a cursory overview, think they know better and say what to do from formula.  Each small business is as unique as the owner/operator. But, buying, selling and business transactions are the same in the market place in process and requirements.  The successful small business owner is leery of all so called experts and service providers other than suppliers; rightly so.  Know-it-alls can do as much harm as anything to a small business. Know-it-alls seek to sell their wares, accumulate scare cash of the small business before they go under.

What they do not know is the technical aspects of business that include analysis, leasing (their biggest liability), credit card processing (their primary revenue collection system),  their private 1-mile or 2-miles, in most cases, 90% of their customers. Customers buy at their level of buying.  Private miles change demographically over time. Few small businesses know how to assess and adjust to their private miles.  What they do not know is the technical aspects of business that include analysis, leasing Makemi can make that happen FOR FREE.

STAGE-2 is the hiring of employees, the sharing of at least some functions of the various operational “hats”, the delegation of duties and process implementation.  Historically, after Stage 1 germination and birthing, usually 2-5 years from the doors first opening, the owner/operator has enough surpluses and the need for help from another human being.  The lucky owner/operator has a spouse or family member who understands bookkeeping at least.

Why is the on-site bookkeeper or accountant, even if part time, so important and likely to contribute to success? Small business is about cash and efficiency to survive amidst the predators of the economic jungle.  Bookkeepers think transactions, efficiency, numbers, money, profits and process.  It is bookkeepers and accountants who contribute the most and balance the owner/operator in surviving in the marketplace.  Many small business add low-wage counter people, workers and the like which they have no experience in managing or controlling or experience in the processes necessary for STAGE-2. Bookkeepers and or accountants, part time or full time, are the best transition from STAGE-1 to STAGE-2 in the opinion of Makemi .

STAGE-3, Maturity:

STAGE-3 is an outgrowth of STAGE-2 with efficient processes, expansion, growth and market success.

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