Ask the grumpies: How to grow jobs in an area and general entrepreneurship

First Gen American asks:

My latest interest is around how to grow jobs in an area and general entrepreneurship. Anything around that topic would be interesting.

How to identify unmet needs
How to make a business plan
How to decide what to do
How to do the quick back of the envelope calculation on roi. (I’d have to sell how many ice cream cones to just cover rent!?)
How to take a risk without putting it all on the line and if that is even possible. (Many of my customers emptied their retirement savings to start their businesses. It was rough going for a while for many of them and I am only talking to the ones who made it.)
How to determine if a market is saturated. (I.e. Microbreweries)
Where to find businesses for sale.
How to assess the numbers and make sure they are real and not just lipstick on a pig.
Places to find resources for research. Like tax incentives for a region or female owned businesses, grants, etc.

Since my company, one of the major employers, is leaving the area, I also would like to focus on non service type ventures. (I.e. Jobs that don’t rely on the health of the local economy….a product that can be shipped outside of the region.)

Unfortunately this is all completely out of our wheelhouse.  We’re not even sure where we’d start asking to find out the answers to these questions (maybe Paula at Afford Anything, but she’s pretty focused on real estate, still, she might be able to 6 degrees of separation you to a good answer).

Grumpy Nation, any ideas?

13 Responses to “Ask the grumpies: How to grow jobs in an area and general entrepreneurship”

  1. Calee Says:

    I would take a look at the Side Hustle nation podcast and blog. As someone who has built a business that started as a side gig, I’m partial to stories of people who have figured out how to start a business without a lot of investment. (Mine was software I already used for paying work and a lot of hours of gym daycare.)

  2. monsterzero Says:

    I only know what not to do: Don’t empty my retirement savings to start a business.

    I’ll buy one of those ice cream cones right now though.

  3. chacha1 Says:

    Definitely don’t empty retirement savings to start a business. Or to buy a house. Or to put a kid through college. Or to give anyone else a job.

    This is The Great Question of the consumer economy. How to employ everyone? I have to say, I don’t think it’s possible.

    As I see it, the economy we have now is an artifact of the modern manufacturing age. It’s not a good model for full employment, because it depends almost entirely on corporate ownership and capitalization, where employment decisions – including where to site a manufacturing facility – are made on the basis of stockholder profit calculations. Full employment is incompatible with stockholder profit, because “full employment” means employing everyone whether they are an income-producing asset or not. Hard truth is, there are too many people needing employment for everyone to be an income-producing asset, even if everyone is healthy, skilled, and motivated (which, as we know, they are not).

    The rest of human civilization has been based on an agrarian economy in which a very small percentage of the population ever had money, or what passed for money, and resulting leisure. Everyone else had work, but basically within “work for food” situations where money barely changed hands and surplus goods were a liability, not an asset (and depending on the power structure, goods – whether they were surpluses or not – were appropriated by violently-enforced tithing schemes of the local church or the local warlord) because moving goods to new markets was functionally impossible.

    No doubt there is an economic historian out there who could enlarge on that and correct my misconceptions; I focused on sociocultural history, not economics. But when the question is “how do I create jobs” you have to look at the massive, decade after decade, failures of capital-rich job-creation schemes from NGOs *and* governments and say “maybe not.”

    In a rural environment, the best way to keep everyone busy and productive and mostly self-sufficient is probably to re-create an 1840s economy. But the subsistence economy is exactly what human society has been feverishly trying to escape. Humans don’t like mere subsistence, especially when they can see on TV how the rich live. (And most humans just don’t have the necessary skills anymore.) The comfortable suburban existence most Americans want relies on that corporate employer. When people’s perceived needs include cable TV and multi-car garages full of SUVs, utopia can’t get very far.

    I realize this is pessimistic and misanthropic, but you have to look at what has happened to several ex-urban areas in America where manufacturing jobs went away. Did the disemployed turn around and start cottage gardens? No, they got prescriptions for oxycodone.

    • nicoleandmaggie Says:

      lump of labor fallacy– as more people work, the economy grows

      • chacha1 Says:

        does that mean there is a (fallacious) assumption that people will generally produce a surplus and that other people will then consume said surplus, thus generating a constantly growing demand? See, I should have taken more economics :-)

      • nicoleandmaggie Says:

        I don’t know about constantly growing demand– our demand is infinite. If nothing else, we demand better health. (Which is why, as a society and we grow richer, a larger portion of our GDP goes to healthcare. And we are, on average, but not at the lower tails, getting better health to go with that spending.)

  4. Jenny F. Scientist Says:

    For the last one, local chambera of commerce, business associations (Main St. USA etc), US Small business administration.

  5. Cloud Says:

    If you’re considering a software business, you can look at Amy Hoy’s blog, etc: https://unicornfree.com/

    Actually, I think she and her partner have recently expanded their training offering to include non-software businesses. I’ve never taken her class, but I find what she writes pretty level-headed. She does talk explicitly about how to figure out if there is a market and things like that.

    I also read Pamela Slim’s Escape from Cubicle Nation when I was considering my career change, and found it helpful.

    From my own personal journey, I’d say it is important to know what you are and are not willing to sacrifice. That helps you determine how much risk you are OK with taking. This is how I ended up with my hybrid “slow bootstrap/contracting” model. It is too early for me to say whether that model actually works, though. I figured I’d need at least 5 years to make the slow bootstrap part profitable, and I’m only in year 2. So the contracting part pays the bills.

  6. Rosa Says:

    It doesn’t solve funding completely – small business loans are really hard to come by, especially for a unique idea that’s not franchising – but putting the small money into incorporating and signing leases & loans as the company and not yourself is a step I see way too many people skipping, but it’s an important hedge against losing not just the time and money you put in but the liabilities of unpaid rent or unsold credit merchandise if you give up the ghost. I feel like I spend an awful lot of time trying to convince people it’s worth shelling out several hundred dollars and the time to incorporate rather than (for instance) signing a store lease and a supplier credit agreement as yourself and using your private credit card as the “company” card. But i’ve seen so many people do that and end up paying for a failed business for years, I keep trying.

    As for looking for need – it seems like most people decide to be their own boss at a thing they were doing as a subcontractor or employee, so they know the need exists because they’re already doing the work. It seems like just identifying a need (this neighborhood has no child care center; this neighborhood has no grocery store) would be enough, but in general there are so many people whose entire focus is finding places to open new business locations, if there’s an unmet need it is almost always a need of people who don’t have money. The rest of us are pretty well served, in general.

    I’m thinking about starting a very small private tax prep service this next tax season, but I have very low opportunity costs (I don’t currently have a winter job at all!) and I have cash on hand to cover startup costs. And still I’m doing the basic ROI math – how many clients would I have to have, to cover the costs of software, insurance, minimal advertising (business cards, basically) and a “would be a living wage if I did it full time” amount for me? I won’t start unless I think I can/will get that many clients, which partly means the total being a fee that seems fair on both sides.

    • Kellen Says:

      Even if you incorporate, without a company credit history, any credit cards or loans are typically tied to the owner’s personal credit, and business loans will require a personal guarantee from the owner, at least until the company has some years of profitable activity.

      Doesn’t negate the benefits of creating an entity separate from yourself, of course, for the other reasons mentioned. But getting credit for a company without a history is very difficult.

      Also, I know Atlanta has some decent incentive programs for small business that locate in certain parts of the city. Often the business owner must provide x% of funds themselves, then the funding organization will match. They do point out that you should locate your business where your customers are, not where you can get the most funding from them, but it does add some help for people wanting to start small business in economic low-zones.

      • Rosa Says:

        it is difficult, that’s why it’s so, so tempting to just skip all that and go with your own money.

        It is a crying shame that there’s so little public support for entrepreneurship on a small level. Atlanta’s program sounds great. We have some good business incubator stuff on the city and neighborhood level around here – low rent offices & short term rental of spaces with commercial kitchens especially. And universities can be great sources of support for some kind of businesses, especially tech ones. Other real-estate rich institutions, like big churches, host pop-up & catering shops, too.

  7. gasstationwithoutpumps Says:

    I’ve no idea how to create jobs, and very little on how to start businesses. I’ve been watching with interest the company that my son started while in high school (they did know enough to incorporate and to apply for a patent on their technology). They started with small loans from a parent, then did a Kickstarter campaign, and repaid the initial loans from proceeds of their first sales. They now have two products on the market, one of which they’ve had to get a second manufacturing run on, since they sold out of the first run. They have a third product coming out this fall. My son has been the main engineer (both hardware and software) while being a full-time college student. So far, they haven’t made enough to pay themselves, but they are building up “sweat equity” in the business, and have not needed any loans. More info in the media pages https://gasstationwithoutpumps.wordpress.com/futuristic-lights-media-page/

  8. Troy Says:

    Focus on the “how do I start a business?” question. The “grow jobs” part is a byproduct, not a goal on its own and if this is all new to you, there won’t be enough capital, let alone experience, to buy a business you’d want to own.

    So, how do I start a business? A few starting points:

    – Make something people want (literally, but also a useful Google query): https://www.google.com/search?q=“make+something+people+want”
    http://venturehacks.com/archives#starting-up
    – Bootstrapping a business, as explained by 37signals: http://37signals.com/bootstrapped

    Boiling it down, if you have less than, say, $5,000 in capital and no experience starting a business, it’s still totally doable[1], but your first job is to find something that you can make and sell with the resources you have. This might be as simple as looking around on Etsy until you spot something that inspires a unique idea for you, figuring out how to make it, and starting to sell that product. Don’t over-plan; job #1 is to get 1 person to pay you for 1 of something, without thinking too far past that. Once you’ve done that, http://paulgraham.com/articles.html start to be relevant (http://paulgraham.com/start.html is not entirely tech- or venture-capital focused).

    Step #1 is to make something people – 1 person – want, though, and if you have no capital, that initially means things you can create.


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