Learning About Business in Your Own Small Venture

I have always suggested that everyone have at least a small, part-time venture as a means of acquiring business and essential life experience. In fact, I have written about this in detail in the past.

Invest little cash or credit. if any, and avoid expensive franchises or any form of franchise. The venture is primarily for an education. Not a risk-imposing proposition that will adversely alter your career path. The idea is to help you gain experience you won’t get from other sources.

Secondarily, this experience can produce income, perhaps even a business career. But the primary idea is to learn facts about business, economics and finance that is impossible to get in high school or college, or for that matter, a graduate business course.

You will learn basics about accounting, strategy and administration. You certainly won’t get similar practical knowledge from demagogic politicians teaching class envy for votes, their idea of “social justice.” (See the Earl J Weinreb NewsHole® comments.)

Avoid Buying a Franchise?

Why should you buy a franchise? The main purpose is to get a valued company name and expertise. But you can probably acquire a suitable name and expertise at no franchising cost.

Buying a franchise may make sense only if you get a highly recognized brand name and you get special management expertise.

Understand that the usual upfront fees and the royalty you pay on sales, that cover whatever management training and materials you receive, will probably represent about half your net earnings.

Many franchisees eventually form groups with other franchisees, to sue over contract terms because they are unhappy with their arrangements. (See the Earl J Weinreb NewsHole® comments.)

Beating Up “Big Business” As A Habit

The left loves to beat up the Big Business “system,” but by doing so, they generally attempt to get at anyone who has more money than they. This is ironic because there are billionaires on the left who also take the position out of habit.

That often means they can stick it to anyone who they deem “profiteers.” I am speaking about any private sources who provide jobs.

Even government jobs must come from taxes paid by the “rich” in business. (See the Earl J Weinreb NewsHole® comments.)

The Fed Reserve Experts Are Often Wrong

Do you for a moment think the top folks at the Federal Reserve really know what they are up to? Think again.

Just a few illustrations of “expert” recent missteps: The Fed provided too much liquidity in the early 2000s that helped lead to the 2008 financial meltdown with subprime mortgages.

In attempts to overcome the current recession the Fed again is providing extraordinary liquidity that is tracking for the U.S. what has led to the current Greece/European crisis.

The Fed’s estimating of CPI or cost of living appears to be purposely misleading; it leaves out items we spend for when we daily shop and travel.

Viewing the Fed’s Open Market statements of policy we see lots of past and future meddling. And poor longer term economic forecasts compared to private economists.

Moreover, alerting the public in advance and transparency is poor economics.(See the Earl J Weinreb NewsHole® comments.)

Are Government Experts Really Expert?

We know that startup business is great for a booming economy. It creates new jobs. Startups are also a safety valve when there is a scarcity of job opportunities. At such time, many unemployed consider self-employment ideas they overlooked when employed.

So why do governments-- federal, state and local-- make it so hard to start a new business? With licenses upon licences and similar stumbling blocks? And taxes to boot? All these are rough enough for larger, established business operations. If government bureaucrats knew enough to think in terms of business and jobs creation, they would be more business friendly and simplify the rules. (See the Earl J Weinreb NewsHole® comments.)

“Too Big to Fail” Is Too Big

If a bank, or any business, is too big to fail, according to a government regulator, it might also be too big to manage.

Perhaps the emphasis on size is misdirected when related only to the need for government oversight.

When corporate entities get gigantic, there usually are hidden management problems that are almost impossible to recognize and avoid.Those may involve more correction than possible from conventional governmental regulation.

Example: Many commercial banks also are in the investment banking business. But there are aspects of investment banking that can veer off in varying directions, which I have always felt go beyond the normal skills of everyday managerial skills at those institutions. Those specialized skills are business-oriented and are not usually the skills attained by investment bankers.

Problems encountered have little to do with the need for more regulation. In fact, the more regulation, the more likely management will fail. (See the Earl J Weinreb NewsHole® comments.)

Stop Charging For College Courses That Offer No Job Opportunities

Too many college courses offer few job opportunities. The only jobs open for some is as teachers of the same courses and they’re limited to academe.

The practice of universities persisting in taking tens of thousands of dollars annually for tuition in subjects where the students have no inkling of the lack of career opportunities, borders on a scam.

Academe prospers knowing full well that few grads in much of their advertised curricula will be usable by unknowing graduates. The losers are the debt-burdened students and parents as well as taxpayers who help subsidize education. (See the Earl J Weinreb NewsHole® comments.)

Can College-Going Be Futile?

The idea of having more college graduates is not productive. Graduates are not producing a smarter population.

Colleges are doing a poor job, comparable in many respects to what high schools accomplished in the past. In fact. educational productivity is poor from kindergarten on, through grade and high school and into institutions of “higher learning.”

The prime function of a college diploma? Apart from impressing friends and relatives? Employers use them merely as a shortcut for lazily screening and evaluating prospective employees. (See the Earl J Weinreb NewsHole® comments.)

Productivity Gains Affect Jobs

Economic changes occur without public knowledge or publicity, but they affect the affairs of all of us.

The public ought to get basic economics education in the media, so that they may more readily absorb information that has so much to do with everyday life.

One example: Positive changes in output per hour by industry often is considered to be good during economic recessions; it helps recovery. Companies cut staff to do this to keep labor costs low. It is happening these days.

Lost jobs, however, produce the favorable statistic. That is true only in private industry. The public sector, particularly those unionized, are being added to, with the aid of past federal stimulus funds. And they are budget-busting, absolutely non-productive. (See the Earl J Weinreb NewsHole® comments.)

Poor Corporate Images

There is a natural tendency not to believe what corporations say and do, because of populist left-leaning media and politicians. Corporate managers have to be doubly careful about image. They can be damned no matter what they say or do.

Companies do with images what individuals do with annual resolutions. Most individuals never seem to take those seriously.

When companies do it, the program is an expensive undertaking. Moreover, it’s a sign of desperation and poor management when it periodically and habitually occurs.

Customers and the public instinctively feel management may be hiding real problems and that it is all a sign that management is weak or dishonest. (See the Earl J Weinreb NewsHole® comments.)

Phony Government Inflation Figures

The U.S. Labor Dept. reports official prices for urban consumers, But they lately appear to differ a good deal from the sense of prices most Americans have when shopping. Actual prices they pay are much higher than what is being officially reported.

The Federal Reserve tells us not to worry while its policies blatantly inflate the currency. And while it does fudging with the numbers.

Such as housing costs and how to include the cost of shelter. After all, home prices could be down while rents are up. And then official statistics may conveniently only have “core” statistics and not an entire shopping list.

They may leave out oil and food prices when they’re a big part of everyday consumer cost. (See the Earl J Weinreb NewsHole® comments.)

Anti-Trust Laws Help Lose Jobs and Hurt Consumers

There always is a debate about what actually is a monopoly. Many on the left consider size alone as the deciding factor, when in the past, the competitive effect on the consumer was always important.

The bottom line as to whether there is a monopoly or not should be the effect on the consumer. If the corporate situation being investigated helps the consumer, then there is no monopoly. The whole intent was the interest of the public.

What is telling is this administration’s position and the support of lawyers, who are always ready to sue. But such plaintiffs do not always have the consumers’ interest at heart.

What about jobs? Any such effects of strict leftward action will be negative as a result. (See the Earl J Weinreb NewsHole® comments.)

Faulty Do-Gooders Doing Business Mischief Overseas

The Foreign Corrupt Practices Act or FCPA has been in existence since 1977. Under the legislation, American companies are not permitted to bribe overseas government officials to get business. It’s to show our morality when our competitors have their pocketbooks open.

Now, however, FCPA is being more strictly enforced by Uncle Sam, in the midst of the American deep recession.

But it’s not jut a matter of following the law. It’s an impracticality, morality aside.

Supervising massive numbers of managers overseas is difficult. And the expense of supervision is extremely costly for large and small businesses operating overseas.(See the Earl J Weinreb NewsHole® comments.)

Demagoguery: Politicians' Relations to Banks

Blame banks for everything. Making loans too easy to get when political policy is to make mortgages available for all. With little chance of repayment.

Then penalizing the banks for facilitating the processing of such loans.

Then suing the banks at state levels when federal suits are exhausted.

Thereby taking needed capital while blaming banks for not having enough capital for safety. (See the Earl J Weinreb NewsHole® comments.)

Frequent Franchisee Disappointments

Surprising to hear of franchisee associations suing for not enough promised marketing help?

Happens all the time, whether franchisees are making money or not. They are usually giving up about half their profits, if any. (See the Earl J Weinreb NewsHole® comments.)

Business Risks for Bosses and Employees

Four types of business risks are:

Knowing what the possible risks are.

The size, types and pitfalls of accounts receivables.

Salary excesses, their fringe costs and how they can be controlled.

Existing and potential production problems and where they can be regulated .

These problems in many companies, large and small, are compounded by the inability to recognize them early on. And to monitor them, while managing their potential risks on an ongoing basis. (See the Earl J Weinreb NewsHole® comments.)

For-Profit-Schools Are Better?

For-profit-schools don’t burden themselves and students with expensive tenured professors who do little teaching.

They are not stuck with prestige goals of old alumni. Who keep them financed more than tuition alone.

Some poor schools have gotten full attention in the past. They have to generally do a good job, however, or won’t survive in the long run. They will. (See the Earl J Weinreb NewsHole® comments.)

College Debt Burdens

What about college-imposed debt?

The numbers on this subject from the College Board are for the average students. The estimates do not take into account a list of important factors, not only student debts racked up in going to college.

They ought to include debts of their parents, that weigh down college advantages. Interest on the debts are also huge and add to problems associated with those debts. (See the Earl J Weinreb NewsHole® comments.)

College Education Value

Estimates of a college education’s value range from about $800,000 to as much as $1 million.

However, I find it’s a fictitious figure, only comparing what someone can earn over a lifetime with a college degree, as opposed to earnings of a laborer working at minimum wage for his or her whole life.

An assumption is made that all non-college jobs are non-skilled. Many skilled jobs that do not call for a college degree, such as electricians and plumbers, pay far better than college-bred positions.

Eliminate janitor-type jobs from the conventional comparisons, and the comparison gets completely skewed. (See the Earl J Weinreb NewsHole® comments.)

Non-Profit Companies are Preferred?

The public usually gets the impression that non-profit companies are good and for-profits are not.

That non-profits are there to be helpful; the others may be greedy, seeking nothing for the public or consumer but profit for themselves.

The public have been taught by politicians and the media that somehow profit is a dirty word. Unless, of course, a member of the public loses a job. In which case the boss has no profits with which to pay salaries.

But then again, for-profits must have cheated to get their earnings, if you listen to the populist media expositions.

However for-profits have an upside, in that they are seen as more competent. Too many have had run-ins with the post office and motor vehicle personnel. (See the Earl J Weinreb NewsHole® comments.)

Global Warming False Alarms

Expensive global warming regulations have been based on what we are now learning are global warming misconceptions.

And what about ethanol production? It is expensive because the fuel is not efficient. And the product of a source of food that is becoming more expensive because of its diversion to energy use.

The outlawing of incandescent bulbs, and the buying of costly compact fluorescent light bulbs instead, is another instance of the need for rethinking some of the global warming nonsense.

What about green car manufacturing and the plans of companies who are going "carbon neutral." Lots of talk, and huge expense, and bankruptcies. (See the Earl J Weinreb NewsHole® comments.)

Future Job Growth Prospects

Getting to know what jobs will be plentiful in the future is never easy to predict.

Consultants hired to make predictions are often wrong; they often guess. (We recently had a blog about general future prospects.)

We know that economic trends are hard to change overnight. The health care services industry appears destined to continue its growth. There will be some bumps, however, depending on legislation and unionization activity.

Also, some aspects that require delicate skills, doctors, for instance, may be adversely affected, by past legislation or continued lack of tort reform by government. (See the Earl J Weinreb NewsHole® comments.)

Producing Real Jobs

To produce real jobs you must get small business going. You help accomplish this by cutting their taxes.

And you have to cut government debt. Servicing huge debt makes it impossible to keep taxes low or to make a dent in debt reduction.

It’s really simple. The White House says it is doing the very thing. But saving negligible percentages as it actually proposes multi-trillion dollar deficit budgets is impossible. (See the Earl J Weinreb NewsHole® comments.)

New Job Opportunities

Getting the real, not the stated, unemployment rate down to a more normal 5% and below, is not going to be easy. Not with meaningless gestures.

The unemployment rate is actually over 17% when you consider the truly unemployed. Not only those who still haven’t given up seeking a worthwhile job or are on unemployment income while it lasts. The truth is, the official unemployment rate is misleading.

To get job creations going, the economy must improve. That means psychology must get better. More money has to get into households. That situation is not improving.

You simply have to get more funds into the hands of the consumer. What will do that? Lower income taxes, fast. And productive private industry jobs, fast. (See the Earl J Weinreb NewsHole® comments.)

Big 21st Century Job Growth Areas

It’s hard to truly predict the future and where the maximum potential for industrial expansion and jobs will be.

But certain areas seem assured: Data mining and processing; smart manufacturing-to-order; wireless communication

Some may not require a college education but they will need training. (See the Earl J Weinreb NewsHole® comments.)

Job Application Robots

Further o my comments on job apps:

Robots are being used for software to sift through resumes. Some companies get multi-millions of job applications a year. The only way to sift through them is to use sophisticated software as a screening source. Keywords relating to experience they are seeking are factors being used.

Another reason why your job resume has to be concise and specific. (See the Earl J Weinreb NewsHole® comments.)

The Correct Job Resume

Books and advisers tell you how to write a job resume. But remember the importance of the covering letter. It’s just as essential as the resume itself.

Place on to the covering letter what is most important about your skills. Outline very quickly your professional assets. Tune the theme to what that skill is; technical, leadership or academic.

The covering letter ought to quickly sum up what you are really selling about yourself. That will make it easier for a prospective employer to scan your app from, perhaps, hundreds of other job requests. More soon. (See the Earl J Weinreb NewsHole® comments.)

The Fed Causing a New Housing Bubble?

The Federal Reserve is causing the next housing bubble even though we haven’t resolved our current housing debacle.

They’re doing this by keeping official U.S. funds at zero cost, below the nominal 2% inflation rate. The actual inflation is higher. This makes it easier for the public to take mortgages they cannot afford. And government guarantees will again be taken over by the taxpayers.(See the Earl J Weinreb NewsHole® comments.)

Uncle Sam is Not the No.1 Capitalist

According to the annual Index of Economic Freedom reports from the Heritage Foundation and the Wall Street Journal, the U. S. remains far behind countries such as Canada, Australia, New Zealand, Switzerland, Hong Kong and Singapore, in terms of economic freedom.

This means there is much improvement we can make to eliminate business red tape and restrictions. Unfortunately, in the past three years, we have been heading away even more from free economic principles.

This when we desperately need to formulate new private industry jobs. (See the Earl J Weinreb NewsHole® comments.)