There are many great resources out there on all manner of topics. If you are at this site then there’s a good chance that entrepreneurship catches your fancy, on which there’s no shortage of good knowledge coming from web sites, magazines, books, associations, interviews, and so much more. Most of the time it’s information overload that we are dealing with, not information scarcity. It all sounds good, but with so much out there how do you put it to use?

For starters you need to accept that you can’t use it all. I have read a tremendous amount of information on many key aspects of business, yet at best I have mild expertise in a couple tiny niches. The collective mind of the human race has developed a vast set of data that cannot be taken in by a single person. Perhaps if you had a wise man (or woman) studying for an entire life, but who wants to learn all this stuff and not apply it?

I’m reminded twice of friends who kept making the same mistake in learning how to write computer programs. These are very different individuals who have never met each other. Each would come to me asking for advice on a particular programming language topic or algorithm. I’d help them out and sooner or later they would know that one technique. Yet to date neither has written any software program of significant length, convinced that they need to start by picking up large books on software design and studying for years. They are on their way to becoming keepers of very specific and sometimes obscure bits of computer science knowledge, but they haven’t progressed very far on becoming programmers.

Unless becoming a knowledge keeper is your desire, accept that most of that collective knowledge will never be yours and be grateful for what you are able to learn and apply! In the above case my friends would have actually learned far more by reading a little bit then diving right into writing a software program. Sure the first few programs would be quite terrible, but they’d actually learn far more through that personal experience than by trying absorb the knowledge from a book. At that point they would be ready to once again learn something from the experts and then give it a go again.

OK so it’s impossible to learn it all, but how does one go about learning more? How do you most effectively retain the great advice that you are picking up every single day such that it brings benefits into your life? In the framework of not retaining everything, we are more interested in being able to find the information when we do need it rather than having it for havings sake.

I don’t believe in attempting to create a miniature library, mostly because I’ve tried and it’s failed each time. Thanks to the internet, static information becomes outdated too quickly. Furthermore the internet already provides an amazing index of not just web sites but traditional materials, along with easy ways of obtaining the resources when you need them. Why try to rebuild something that is already there? It may be that the great piece of information you came across doesn’t need to be stored by you at all. Is it really something so special that you won’t come across it again when and if you are specifically looking for that information? Trying to hold onto too much knowledge is a flaw in itself.

If the advice, tip, or procedure is relevant and worth keeping then it needs to be stored or acted on. Again with the internet being the vast and constantly updated library that it is, I don’t believe in trying to unnecessarily store static copies of items. In many cases it makes sense to just store the location of the resource. If you are worried about the original material disappearing then having a copy of your own may make sense. You may wish to print it to PDF instead of paper, since filing cabinet space is many magnitudes more limited and expensive than your hard drive.

When storing information to revisit you need a sensible way of organizing it. Right now I’m experimenting with mind mapping, which naturally creates a nice topic drill-down structure. The mind map structure is naturally an index, with every node either containing or pointing to the right resource. My first layer of topics is very broad: “Business”, “Productivity”, “Programming”, “Technology”, “Cooking”. Below that I get more specific, for example “Business” has “Entrepreneurship”, “Marketing”, and so on. Delving into Marketing yields “Traditional”, “Internet” and “Software”. I’m only storing topics that I really care about. Every single piece of information that makes it in there must be something that I intend to revisit, such as a book I’d like to read in the future, an amazing database reference, or a recipe that I really liked. I will not actively seek out things to put in my mind map for the sake of having more information at my finger tips. That’s Google’s job.

What about acting on all this knowledge? If it’s something specific that can be acted on right away then it’s really easy. For example if you need to build a bird house and come across a bird house building article then it’s pretty obvious what happens next. What about less simple advice? Things that take a while to implement? What about those simple points that a business article or book makes, which in a single sentence hide the vast complexity of what they actually require you do? Here it’s a matter of making the leap from reading over the advice to consciously deciding to allocate the mental and physical resources to implementing it. After that … do it! Self help books often fail to give results because people get caught up in the idea that by simply reading the advice their problems will magically get fixed. The book sells the reader on the idea of minimal effort and in turn the reader expects to apply absolutely minimal effort to solving complex and difficult problems. Don’t skip over the little points of action that are sometimes hidden away. You need to act on what you read for there to be benefit.

Don’t forget your subconscious self in all of this! I find that what I consciously remember pales in comparison to the information I have stored-up which my brain somehow manages to pull out only when I come across a situation where I need it. I don’t always read books trying to consciously squeeze out specific information. I enjoy them, and the tidbits of knowledge I glean without ever putting pen to paper. I am confident that my brain has retained some important knowledge, and when I am going to take on a project that actively involves the information in the book then I can revisit it.

The first time I consciously decided to start a business (computer sales & repairs), I held an amazing amount of misconceptions. They could all be summarized as “money simultaneously grows on trees and is brought in by the wheelbarrow by customers eager to purchase my wares”. You’ll have to forgive me, as I was still well in high school.

To my credit I knew that I had to work hard, but somehow in my mind there was a nice thick line drawn directly between work and success. If I worked hard through the night, slept through class, and put every ounce of strength that I had into the business, then profits and growth were my divine right. I was half correct of course, as rarely is an easy way of making money simply handed out on a silver platter. But somewhere I had made a terrible mistake in the formula and got half of it wrong. It turns out that you can toil endlessly in the fiercest conditions known to man, but if what you produce is of value to few then your rewards will be proportionally small. That big thick line does exist, but it’s actually drawn between success and value.

The Real Reason Why a Business is Successful and the Consequences of Using the Wrong Formula

The principles here can apply to VC-funded start-ups with $6 million in the bank too. However today is all about small business, the kind that I have started several times, and which can turn pizza money into a high income or reduce your income to not being able to afford pizza.

In my case I had worked very hard, but most of that time had been spent on an unadvertised company website that nobody would visit, writing paragraphs extolling company virtues that no one cared about. I had spent virtually no time on the things that would have mattered, such as handing out fliers door to door or networking (unless you counted trying to sell $2000 machines to penniless high school friends). I also firmly butchered the notion of “you gotta spend money to make money”, holding dearly to my heart the belief that effective marketing had to be paid for and by not having money I had no chance against the competition. I was terribly wrong again; my current venture has still spent less on marketing than what I had proposed for the computer sales business, but it’s making thousands in profit per month and growing quickly. I wanted fancy business cards, full color fliers, expensive newspaper ads, and everything else that other companies had, except that I didn’t have $100K in starting capital. Boy, what was I thinking.

So a high school kid knowing nothing about business failed. Big surprise…

Except that I’m not the only one that got the formula wrong, and I was certainly not the oldest! When statistics like 90% of small businesses fail in the first five years abound and examples of basic business mistakes can be found by walking a mere block through any downtown, it doesn’t take much to see that a whole lot of business owners are getting the fundamentals wrong too. Rational, intelligent, and well-intended people, who when reading this article may think “wow I would never be that stupid”. The problem is that until you look back at the situation and write down what it is that you did, the mistakes aren’t nearly so obvious.

Having realized that my original “work very hard” formula was wrong, I’m now convinced that following the correct one with just as much passion and dedication can lead to highly predictable success. The real trick is to provide value, as much and as often as you can. The more value that you provide, the more profit will follow. It is your duty as an honest, ethical and smart business person to come up with ways of providing value and providing that value to as many people as it will benefit. Uncoincidentally this is a recipe for making a whole bunch of money. Convinced and ready to begin?

You are going to start a successful business, and you will do so with the correct time-tested formula used by everyone from BMW to Walmart to As Seen on TV products. You are on a mission to consciously provide value, over and over again, and you will apply this philosophy to all aspects of your business. Your product, be it a commodity like a computer part or something entirely unique and handmade, will be put forth in a way that puts your customer’s needs front and center.

Your business will be delivering something useful to solve a problem. But you won’t stop there. You will find the best way to provide it to the people that need it. Your marketing, your sales, your shipping, and your customer service will be just as focused on the customer and the value that you can provide as the product itself. It’s all equally important, because you are only providing value if people know about your valuable product and have an easy way of obtaining it. The truer this sentence is for your business, the better off it is (so long as you don’t have a business model that actually loses money… which happens far more than you might think).

Starbucks didn’t hit its culturally engraved status because its staff is able to provide the extremely unique and skill-heavy service of making a cup of coffee and charging an arm and a leg for it. The people that disagree with this are (shockingly) not the owners of mutli-million dollar coffee businesses themselves. There’s something more to it, and thats the entire Starbucks experience created around it. An experience that does indeed provide people something they desire and thus value that they will pay for. They took a commodity and turned it into a highly profitable business. What you might not know is that they weren’t even the first ones. Decades prior Second Cup, another highly successful coffee store, had revolutionized coffee too by providing a good cup of coffee to people on the go. Prior to that coffee purchased by the cup was a throw-in at diners and tasted like it. Just because someone has already done something revolutionary doesn’t mean there’s no room for you to up the ante.

As a small business starter who probably has little or no money this doesn’t apply to you. You can’t possibly be able to provide value on that level. You can’t come up with a product that customers will happily buy and give you rave reviews for. Providing excellent value won’t allow you to compete against the big established company. Oh wait that’s me from high school talking. Yes you can provide value and yes you can get a business going on next to nothing. Just by sticking to the fundamentals and getting them right you can leap ahead of most of the competition by creating a profitable business. The entirety of the business model for my new venture has been to fill in as many gaps between website clients and website development companies as possible, thus providing genuine value that gives clients a reason to choose me. I do all this through a sustainable business model that I’m constantly evolving to become a more efficient value generator. It’s worked very well, growth is incredible, and my initial investment was the cost of a business registration and a few phone calls. Nothing I’ve done has required advanced calculus, divine wisdom, or a pile of money. So what’s stopping you from doing the same in your business and succeeding?

Oh and by the way, none of this is original or new. Materials with insights into all manner of the value-oriented philosophy are widely-available. I first came across it myself after buying Jay Abraham’s Getting Everything You Can Out of All You’ve Got, and I’ve seen it in countless other places too, including business class. It is not a lack of knowledge of this concept that is the problem, it is a lack of business owners seeking and implementing it.

In Canada, the US, and other countries with strongly capitalist economics you have a right that doesn’t get as much attention in the press as “freedom of speech” or “freedom from unwarranted search and seizure”. Yet it’s quite well protected and one of the few paths to wealth. The right to start a business allows you to sell goods or services with minimal government imposed barriers, to run it as you see fit, and to own the risk and profit associated with the business (minus taxes of course). In other words, you have the freedom to come up with a great idea and to capitalize on it for your own personal gain.

There is a strong myth in employee circles that starting a business is a complicated and difficult process, but a big part of what makes the above a right is minimal government imposed barriers to exercise it! Anyone capable of fulfilling some basic tax requirements and perhaps filing a few forms can be up and running as a true blue business. In Canada we have the concept of “incorporation as of right” which allows anyone who properly fills out an application, pays a reasonable fee, and meets some basic requirments, to incorporate their business. Starting a corporation in the US is similiarly simple, and in both countries it’s even easier to start a sole proprietorship.

Why virtually everyone should have some form of business, even if you plan on working for someone else for the rest of your life.

For starters it’s an amazing right to have. Never has it been easier to go from being poor to wealthy through one’s own ingenuity and hard work, rather than needing to be born or married into the right economic class. Not being wealthy no longer means that you are required to become a servant or employee, surrendering the bulk of the value of your efforts to your owner (see: Is it Wrong to be an Employee? and Steve Pavlina’s 10 Reasons You Should Never Get a Job). Yet that’s exactly what most people are doing, locking themsleves into being peasants of a modern feudal system!

Running a profitable business greatly reduces your risk of losing your income. It’s no secret that layoffs happen all the time and high performance or seniority are no longer enough to save you if you happen to be working for a department that is bleeding money. You can literally walk into work one day and find out that you no longer work there, as I’ve done before. Since you aren’t required to spend a certain amount of time on a business in order to own it, you can gain the income benefits of a part-time business without quitting your day job. I’m not telling you that you must jump off the cliff by quitting your job immediately and hoping that you know how to fly. You are free to build your business gradually and cut the shackles of your day job when it’s sustainable, or forever keep it as a side venture.

Starting a business provides enormous tax advantages. You are not taxed on the money spent by the business, allowing you to leverage the full power of your capital. This means that if you’re income tax is 30% a year, it will cost you $100 to buy a $70 golf club or $70 worth of stock. That same $100 can be used to buy a $100 piece of equipment for your business. Rather than having to give that $30 to the government, you’ve been able to invest it in your own venture for your own gain. Better still, business losses can often be written off against other income, dampening the hardship caused by a business that is not yet profitable.

Your talents and passions aren’t limited to what your job requires. You may even feel that your existing job doesn’t make use of your talents at all, and you certainly wouldn’t be alone. Your business allows you to profit on these talents, providing both income and an opportunity to develop yourself further in these areas. I wouldn’t know nearly as much as I know now about website development or programming if I hadn’t started businesses that allowed me to put these skills to use. I certainly wouldn’t be able to write this blog on entrepreneurship, which has allowed me to gain many insights into my own business knowledge and to develop my long-neglected writing abilities.

Finally as mentioned above, business is one of the few paths to becoming wealthy. No matter how many raises you get at the end of the day, a pay cheque has very finite growth limits. Reaching $100 000 per year is an applauded accomplishment and a mere $300 000 per year is astronimical. True money comes from ownership, which is why the real value of the money you save each year comes from the returns you receive from having it invested (and you are saving, right?). Own your own business, own real estate, own shares of a corporation. Those who do have $300 000 pay cheques are millionaires because they’ve invested the cash, not because it’s all piling in a bank account. Never has it been so easy to become an owner and to reap the tremendous rewards that come with it. A business is a powerful vehicle for getting there and the accessibility of starting one is phenomenal.

Just How Much of a Right is This Really?

Every country has its own laws, but those that have embraced free enterprise based economies necessarily need to make it possible to start a business easily. You can’t have free enterprise otherwise. Nevertheless every right can be revoked for fair or unfair reasons, and as part of this article I unsuccessfully tried to find out what kind of situations would deny a citizen from starting a (legal) business. I would be interested in any insights from readers who are more familiar with the law and government.

Disclaimer: some or all of this information may not apply for your particular situation. I’m not a lawyer, accountant, or otherwise able to provide advice to guarantee a successful or legal business. Please seek appropriate counsel in your local area. Persons acting on any information on this website do so at their own risk.