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On Monday I attended the latest YNOT event with David McMahon, a founder of Fone Zone, one of the largest retailers of mobile phones (cell phones) in Australia. David’s presentation was good, while he offered no revelations for me he certainly reiterated a lot of what the business textbooks teach and showed that he has applied these principles to his business as it has grown. There was one interesting part early on in his speech that sparked the idea for this article about luck in entrepreneurship.

David and his partner came from a mobile phone B2B (Business to Business) background and had jobs as sales agents for mobile products before portable phones became mainstream consumables for the masses. Consequently he had a strong familiarity with the marketplace (yet ironically not a great understanding of the phones themselves) and decided to start up his own enterprise selling phones. Initially he planned to open one shop and be content with that, but things went a little bit crazier than planned and today Fone Zone is forecasted to make over $150M this year with hundreds of shops around Oz.

As I listened to David’s story it became apparent that he was truly in the right place at the right time. He was involved enough in the mobile phone industry to want to start up his own store which he stated was more from a desire for freedom - financial freedom and independence. He was an innovator in the industry in two significant ways; he started selling the phone plan or service rather than the phone itself, and he saw that the future for the industry was in B2C (Business to Consumer) and that having retail outlets selling direct to the public was were things were heading.

Fone Zone was the first retailer of mobile phones to open up shop in a shopping center starting a trend that now sees Australian shopping malls littered with competing mobile phone retailers. Fone Zone’s success was built on David’s two early innovations and while there are many factors (differentiation strategy being the most important) that have kept the business competitive in what is now a saturated marketplace, I believe it was because of David being in the in the right place at the start of the mobile phone boom that accounted for his success.

So was he lucky to be there at the start of an industry boom? To a certain degree for sure, you could say he was “lucky” to be starting a business at the early stages of the formation of a new industry. His first shop sold so many phones he had to go to other shops and buy their phones at retail to meet demand. You don’t hear stories like that for most new businesses but often you hear them from the background of the extremely successful entrepreneurs. They just seem to get it very, very right and demand explodes. But is that luck?

I believe luck plays a role in business but when you start talking about luck in entrepreneurship I don’t think you can ever attribute too much credit for success to fortune’s wheel. When a person becomes an entrepreneur by deciding to start a business they are acting on an opportunity that they believe will satisfy a need both for consumers (a product or service) and themselves (independence, wealth, fame). How much success they have can be attributed to being lucky – starting the right business at the right time – however the owner would not start a business if they didn’t believe an opportunity to create something profitable isn’t there. That’s not luck, it’s common sense smarts.

Luck means that a variable is random and the outcome just happens to be positive purely by chance. Successful entrepreneurs aren’t successful because they rolled dice; they made a lot of careful and calculated decisions, and had enough motivation to take action at a point in time. They saw opportunity, the chance to be “lucky” and decided to go for it given they had the skills to make it happen.

David was not successful because lady luck smiled on Fone Zone, his business boomed because David was opportunistic at the right time. Most failed businesses flop because the owner was opportunistic at the wrong time or in the wrong place. An entrepreneur creates their own luck by making choices that lead to actions and those that make the right choices at the right time earn their successes.

Yaro Starak

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The purpose of this article is to give you a window into the lifestyle of an Internet business owner and in particular a home based business entrepreneur. The example below is a typical day in my life. If you are presently considering quitting your day job/after finishing school and starting your own Internet business I suggest you read - Do You Want to Run Your Own Business? Read this First!

So now without further ado here is a typical day in the life of Yaro Starak…

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Morning

I wake up at somewhere between 8 - 10 AM depending on what time I went to bed the previous night (I need at least 8 hours of sleep to function properly). I roll out of bed and switch on the computer which is in my room. Presently my laptop is my business so when I’m at home I either work in my room or at a desk in the dining room.

First up I check and respond to emails and process jobs that have come through during the night from BetterEdit.com. Job processing means to assign editing jobs to staff members. I also manage ongoing projects including ensuring clients receive their jobs back on time, invoices are issued and payments are made. There are a lot of little things to coordinate but it doesn’t take too much time and can be handle completely via email and through the web. This takes about 30 minutes to 3 hours depending on the time of year.

About an hour after waking up I eat my bowl of cereal for breakfast while I read up on the tennis results from the past day (I’m a big tennis fan).

In my room I have whiteboard with a task list that I slowly work through as part of my working day after I finish responding to time sensitive emails. Generally I work on a website or do some form of writing, which can be copy for a website, an article for a blog/website or content for marketing materials. I also have to control the other “standard” business tasks like hiring new staff, doing the bookkeeping and working with other business/freelancers to get things done that I can’t or choose not to do myself (complex website coding for example).

I spend a lot of time posting in forums and reading about search engine optimisation and Internet business. I find whenever I hit a wall and can’t write very coherently I either leave the computer altogether or do less brain taxing jobs. When you are mentally spent it’s a great time to work on free online marketing techniques that don’t require you to be firing on all cylinders. If you do a little bit of online promotion every day it can really build up your traffic over time so I stay persistent with this task.

Occasionally I will have a Skype conversation with a friend over the Internet. This can be with one of my local friends or a contact from overseas. I don’t feel this is a waste of time at all as conversations with your peers can teach you a lot and stimulate new ideas. It’s the equivalent of conferring with workmates at a normal job and since I don’t have workmates I rely on other people running businesses or websites for work related conversation.

Afternoon

I keep working until about lunch time, which is usually somewhere between 1 - 2 PM depending on when I woke up and had breakfast. During lunch I will often watch a little TV or a DVD.

The rest of the day can be quite varied but I will generally do something like this:

• I might head to the swimming pool for some exercise.
• I might head out to a university campus to advertise my business using posters.
• Once a week I head to the city to check the post office box and deposit payments.
• I sometimes go to town or a local retailer/cafe to meet with a friend or business associate or to purchase supplies.
• Often I will pack my laptop and/or book and for a change of scenery and will go to a cafe to work and/or read.
• Sometimes I stay at home and continue to work.

At the moment I keep a casual job for grocery money/rent and because I enjoy the work and it gets me out around people which is important when you work at home most of the day. I work about three shifts a week only on nights and weekends, which are 4 or 5 hours in duration. I work at an IT helpdesk at a university in front of a computer so when I am not helping a ridiculously attractive university student or completing a work task I write or research for my business projects.

If I have a night shift I will head to work, if not I might stay out if I’ve been at a cafe with my laptop until early evening and return home to make dinner at about 7-8 PM. I love cooking and eating so this is one of my favourite parts of the day. I enjoy cooking for myself at lunch time too and often you will find me watching a DVD and eating some great food (yes I don’t work that hard!).

Evening

During the night I head back onto the computer and complete more web work and answer any emails if any have come through during the day. I stay online until about midnight where I switch off and read myself to sleep. That concludes my day.

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Note that my working week is not very defined and consequently I tend to work 7 days a week, however besides my casual shift work at the university I make my own hours. This means that some days I may only complete the status quo to keep the machine running and work for a couple of hours and others I might stay at the computer for over 10 hours proactively working on growth. Time spent online isn’t always directly related to business however since online business is a hobby I’m almost always reading about this topic if not producing output for a business.

Occasionally I field business calls on my mobile but I generally receive only about 1-3 per week. Most communication is handled through email. When it is busy season email sessions can take some time to process all the jobs and respond to queries but it’s during the busy months that the sales come through which help to cover the quieter months.

The business projects that are in early stages now are planned to create new, passive and almost-passive streams of income that will supplement what I currently make from BetterEdit. This will help to alleviate my dependence on a single business and reduce the amount of seasonal fluctuation in my income.

My longer term plans are to reduce the need for me to always be monitoring emails and the Internet. My current tasks are not complicated but they are business critical and time sensitive - someone has to do them. Because the tasks are reasonably simple it would not be hard to train an administration officer to take over most of the day-to-day jobs I currently complete, allowing me to work on strategic direction, new businesses and create more content.

Currently I work most of my time on this blog and BetterEdit.com. They both perform an important role, the latter providing my current cashflow and former part of my plans for future income. I enjoy my lifestyle now but there are things I would like to change and that is what motivates me everyday. The freedom I enjoy presently is significant and consequently a relative level of self discipline is required to keep the wheels in motion (I don’t always have enough self discipline).

Due in part because I have persisted over time repeating what has made money I have managed to create and grow a successful Internet business that has significant potential for further growth. I have also had success in the past with other websites that have helped by providing me with a “cushion” of capital to start with. I have made a lot of mistakes and wasted a lot of money along the way but as any good business person will tell you this is all part of the learning process.

The most critical variable at this point in time is me and hence business performance is tightly impacted by my own mood, well being and motivation. If I do not take care of myself my business suffers as well.

Well there you have it, a day in my life. Throw in some socialising, lots of book reading, visits with my parents, the occasional date, movies, dinner out, a party now and then, and trips to Canada (a whole other story) and you have my life. Wow, it really seems simple when you type it out like that…

Yaro Starak

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Are you considering the life of an Internet business business owner? Well before your eyes gloss over with dreams of endless free time and images of sitting on your couch with your laptop clicking away earning you thousands let me show you the reality of the situation.

A certain image has been promoted of the Internet business owner. It’s often glorified as the great dream, leaving your old job, with the long hours and annoying boss in exchange for a flexible lifestyle that you are in control of.

Well let me tell you - it’s all true!

Well sort of. It’s not by any means easy to do and you lose many things you might have not realised you valued in your old secure job. Let me point out the things you lose that you might want to think about before quitting your job.

1. Say good bye to a reliable and predictable income.

No job is 100% secure and there is a good argument that being in control of your income via your own small business is more secure than a job (you’re not at the risk of downsizing etc) however it doesn’t feel like that, especially when you start out. Even the oldest most established business cannot be certain sales will keep coming. From week to week you go up and down and are never sure when or where your next sale will come from. You can have great months and bad months and the only constant is unpredictability. A steady pay cheque feels a lot more secure than the ups and downs of your own business.

2. Your business is your life.

When you leave work you leave work. Most small business owners live and breath their business so they don’t ever really leave work. Now I’ve got it pretty good at the moment because I love what I do and I don’t *have* to work much though I choose to work online a lot. That being said I am trapped to checking my email day in and day out, 24 hours a day, which is not ideal. Chances are when you start your business you won’t be working 9-5 or even 8-6. Early on you will most likely carry the show and until you can justify hiring others your hours will be long and you won’t have a weekend. However if you are smart, set realistic expectations and remember life is a balance, then running your own business can definitely be less work than a normal job, if you choose it to be.

3. You may never make real money until you sell your business.

An unfortunate situation in many small businesses is that the owner often doesn’t make much more than an average salary, sometimes less. Now if you are evaluating starting a small business based purely on financial rewards then you might want to change your assessment criteria. Many small business owners don’t make a big windfall until they sell their business and often by the time they are making the sale they will be using the money for retirement. Although it is also true that the only way to become really, really wealthy, besides inheritance and lotto, is by starting your own business.

The reality is that only a small percentage of businesses make their owner really wealthy, the rest stumble along earning an average wage. Of course many of those business owners earning an average wage love their lifestyle and only work as hard as they want to. Running your own business has the greatest potential to make you rich and may never make you rich, but here is the important part, your own business is very likely to make you a happier person if you keep your goals simple and aim for lifestyle over riches. Anyone can get rich but the contented people are rich without material wealth.

4. There is no superannuation, paid leave or sick leave.

You may not think about superannuation very much but it’s nice to know that when you have a job your employer is planning for your future by contributing to your superannuation. As a business owner your employer is you and besides looking after your employee superannuation you are also in charge of your own retirement. This is an added worry that you don’t have when you are working for another business.

Having time off is a concept not familiar to many business owners. Being paid when you have time off is like a dream for a business owner. There are some common myths about business owners working 7 days a week even when sick. If you do things right your business should still function without you when you need time off because of illness or even if you dare to take a holiday. However that being said most business owners find themselves as the most critical wheel in the business system and if you remove that wheel things fall apart. The important skill to learn is that the business owner should work on the business, not in it, but that’s easier said than done and especially early on when funds are tight it’s very like you will be working in the business. Don’t expect a paid holiday.

5. Workmates

There are no work mates for the solopreneur. You can hire employees that may hopefully become friends but the dynamic is always you the boss and them the employees. If you have been used to working in a busy, lively, talkative office full of peers that share the same perspective as you, with Friday afternoon drinks, group functions and shared time complaining about the boss — you can kiss all this goodbye.

Okay, that’s not entirely true.

Things are definitely different from working in someone else’s business but I’ve seen many small businesses that have great working environments. The difference is as the boss you have to create your own socialisation. You can do this by creating an amazing business culture where all employees are mates and the office is like a party that happens to get work done too. Of if you do not require employees then it’s your job to make sure you don’t turn into a lonely home based business bum. This means flexing your socialising muscles and organising events with other business people (if that’s whom you like to associate with), making sure you stay actively involved in groups and clubs and that you leave the home office now and then to interact with real live people. Much like everything else with running your own business, you are in charge of your social life too.

A day in the life of an Internet Business Entrepreneur.

Now you are familiar with what you lose when starting your own business you can continue to read my next article about a typical day in my life as an Internet business entrepreneur.Here you can read about what sort of lifestyle you can attain if you choose to start your own business. I’m not saying mine is an ideal lifestyle and there are things I’m working to change, but my example does provide you with a working model of the home based business owner.

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