RANDOM THOUGHTS #237

Steve Cole's thoughts on general business.
    

1. I own a GM car and got a recall notice last May. I called the dealer to make an appointment and was told that parts would arrive in four weeks. I called back every month only to be told that parts had yet to arrive. (I found out later than the parts ordered for my car were used for a car that had suddenly stopped working. As my car was still working, the dealer figured it could wait.) In October I got a "you didn't come in for your recall" letter from GM. I was busy and put the letter in my "hot stack" for the next day. That next morning, my car stopped working due to the recalled ignition situation. I called and the dealership picked up the car. They said that they had been having trouble getting parts fast enough for the cars that actually broke down, but that they had just received a very large shipment and were hunting down people who had still-running cars. Without spending a few thousand words on details, the problem was that with a recall that massive, the industrial network that made the parts could not meet demand (even with overtime) and even the software system that kept track of parts orders could not handle a load it was never designed for. Eventually, someone at GM noticed the crisis and did something to deal with it. Good for her!
    

2. There is a particular candy that I love, the Cadbury Egg, but it's only available for a few weeks around Easter. That's how it's been for 20 years. In October 2014, there suddenly appeared Cadbury Halloween Eggs, with a green yoke and a dark purple wrapper. I just know in my gut that some brand new MBA saw the egg machine and said "What do you mean, we only run this thing once a year? Easter isn't the only holiday. What's the next one on the calendar? Halloween? Good, do Halloween Eggs and let's make some money! There, how hard was that?"
    

3. The people who really succeed in this world are the ones who start and run their own small business. The problem is that 3/4 of such ventures fail (expensively) within a couple of years. You have to be the right kind of person to make it work, with boundless energy and passion for what you do. Nobody owes you a living; you have to earn it. Just because you rent a store space and fill it with inventory doesn't mean anybody will buy that inventory. (Hint: if the guy pushing you to enter this field of business is the guy selling the inventory, maybe you need to do a background check on him and the business.) If you decide to offer a service, that doesn't mean anybody will pay for it. (I have a couple of friends who failed as game designers or game publishers and announced to the industry that they were now consultants to game publishers and would tell you what kind of game you needed to publish. Both of them eventually failed at that as well and left the industry for honest jobs. (Both offered me their services for more than I pay a typical employee. I explained to them that I knew more about this business than they did.)
    

4. Back before we switched to print-on-demand, we used to get thousands of copies of each new book. These arrived from Dallas in cartons (12x10x17 inch corrugated boxes) of 30-120 books (depending on page count). Of course, we shipped most orders out in much smaller boxes (reusing the big ones for wholesale orders). One day at the doctor I heard a woman telling her daughter (who was packing to go to college) about her frustrating search for boxes (which are about three dollars each bought new). I approached her, gave her my card, and told her to stop by and I'd give her all the boxes she wanted because we just threw them away. While that's no longer an issue for ADB, Inc., I know that surplus corrugated boxes are a problem for other businesses. I wonder if some non-profit could not make a deal with such businesses to take their surplus boxes, throw away the damaged ones, and re-sell the others to the community for discount prices. (This would only work with the volunteer labor that a non-profit could call on). Seems to me like it could be a win for the community, the businesses, and the environment.
    

5. Recently I was listening to Dave Ramsey (the get out of debt guru). Somebody called in, explained where he was in the Ramsey pay-off-debt program, and said that it was taking too long because he didn't make enough. He said he had been offered an opportunity to earn a lot more but would have to borrow money to get into that new field. Dave's radar went up and warned him against borrowing money. Turns out that the opportunity was a chance to pay for a course in how to sell real estate with the promise of big money from doing so after taking the course. Dave rambled on about how selling real estate is fun and a great career (it's what Dave did and does as his core business) and that the caller should try to get into it on nights and weekends. Meanwhile, my radar was going off on several counts. Real estate is one of those "make it or don't" careers. It takes not just luck and hard work, but being just the right kind of person. Lots of people get into selling real estate, and most of them drop out after months of never selling a house. Only a few have the genetic mindset to make it work. (Dave often says that 20% of the realtors in a given town sell 80% of the houses. I would point out that the other 80% no longer counts those who tried and failed.) Without any evidence that the caller would be good at this, I was saying "don't do it" as I listened. I was in the end disappointed that Dave didn't warn the caller than many times such "pay money to get into the new field" opportunities are (effectively) scams. I would call them soft-scams since the guy selling the course (or the sales kit, or whatever) honestly thinks that some of his students will make it. If he were honest, he would warn his customers than 90% of them will fail and buying his course will just be a waste of money.