​Introduction

​

     To define the traits of an entrepreneur is not an easy thing to do.  The reason is that many people hold different views of what an entrepreneur is or what he or she does.  Some view an entrepreneur as someone who simply opens his or her own small business. Others view an entrepreneur as someone who has creative business ideas.  But, in fact, a true entrepreneur does more than simply formulate creative business ideas (Drucker 1985).  As economist Jeffrey A. Timmons wrote, "a skillful entrepreneur can shape and create an opportunity where others see little or nothing - or see it too early or too late" (Glackin 2013).  Ultimately, entrepreneurs have the ability to identify needs in society, recognize opportunities in the ways those needs can be fulfilled, discover an innovative way to satisfy those needs that brings value to consumers, devise a plan, and have the drive to bring all of the pieces of the plan together to make the idea a reality.  It is not enough to be innovative and it is not enough to be able to run a business.  Entrepreneurs need to display all of the qualities needed to turn innovative ideas into a reality (Glackin 2013). 

​

     Therefore, more than just opening another hot dog stand that sells basically the same hot dogs as the other stands, entrepreneurs employ some degree of innovation by creating something new or making something better.  It could be a new product, such as Apple did with the creation of the iPad.  Or, it could be the same product made with improved processes, such as McDonald's did with their chain of hamburger restaurants (Drucker 1985). The innovation of these two companies created value for customers that did not previously exist in the market.  Having the idea for better products or better methods would not have been enough.  Being able to turn innovative ideas into profitable businesses is the key to true entrepreneurism. ​

 

PURPOSE: In the first part of this essay, I will explain and I learned the basic principles of entrepreneurship through running my own window cleaning business for seven years.  In the second part of the essay, I will record how I developed advanced entrepreneurial skills while running my own importing business for nine years.  And in the third part of the essay, I will document how I acquired the knowledge and skills to successfully operate an international business.

​

SKILLS: In the first section, I will show how I learned to identify an unfulfilled need in society, recognize business opportunities from it, analyze business opportunities, determine feasibility, and develop a unique strategy to gain a sizable portion of a target market. The second part of the essay documents how I learned to apply all seven rules for running a successful business, which are 1) recognize an opportunity, 2) evaluate it with critical thinking, 3) build a team, 4) write the plan, 5) gather resources, 6) decide ownership, and 7) create wealth (Glackin 2013).  In the third and final part of the essay, I will record how conducting business globally taught me the skills and principles of crossing cultures in business, political and legal systems, economic systems, international trade, business-government trade relations, managing exchange-rate risk, and managing international operations.

​

Part I - Learning the Basic Skills of an Entrepreneur

​

Identifying an Unfulfilled Need in Society

​​

     My first opportunity to begin developing the skills of an entrepreneurship was in February of 1998.  A very close friend of mine, Bob Heighton, had asked me to help him with his window cleaning business for just a few weeks.  I had been doing carpentry for almost six years but I was often out of work during the winter months in rainy Vancouver, Canada.  What I thought was going to be a few weeks of work until I was called back to my construction job turned into an eye-opening experience that taught me the basic principles of entrepreneurship.  

​

     Before I even began working for Bob, the question that was running through my mind was: "Who wants their windows cleaned in the wintertime?" I had never worked in a retail shop before so I was understandably unaware that most successful shops have their windows cleaned year round.  My friend Bob had also never worked in a shop but through careful observation he identified a need in the market that was going unfulfilled, which is a primary skill of an entrepreneur (Johnson 2013). Bob explained to me that while he was working as a part-time delivery driver for Pepsi Cola, he repeatedly heard restaurant owners complain that their regular window cleaners often disappeared when they needed them the most.  These restaurant owners also confessed that they were willing to pay a lot of money to have their windows cleaned regularly but could not find reliable people to do it. Bob did not intend to drive for Pepsi Cola forever so he started to explore the idea of filling the needs of these shop owners. The problem that these businesses were facing was that nearly every restaurant and cafe manager wanted the same window cleaner to be at their shop on the same day and at the exact same time as all of the other restaurants and cafes in the city. Typically, the "same day" was the first sunny day after a few days of rain.  A typical window cleaner could only visit 20 to 25 shops in a day so the vast majority of shops were suffering with dirty windows for several days until he or she could get a round to them all.  I learned from my conversation with Bob that day that often the first step to starting a successful business is identifying an unfulfilled need in society (Glackin 2013).  If a solution can be found, there could be a viable business opportunity for the entrepreneur to seize.

​

Recognizing an Opportunity

​

     Over the course of the four weeks that I worked with Bob, he explained to me that he became determined to find a solution to the shop owners' window cleaning problems when one desperate shop owner admitted to offering fifty dollars to a window cleaner to clean his shop's windows, which normally only takes ten minutes for a professional to complete.  Surprisingly, the window cleaner turned down the offer because he had already promised other customers that he would clean their windows that same morning. The standard fee for cleaning the shop's ten windows was ten dollars.  Bob was only earning about ninety dollars a day as a delivery driver but discussions with shop owners allowed him to see an opportunity to earn much more.  After meeting several window cleaners that he had encountered along his delivery route, he discovered that the vast majority of window cleaners did not work on rainy days.  These window cleaners explained that most shops did not want them cleaning windows on rainy days so it was not worth their efforts.  But on sunny days, there was more work than they could handle.  On the days when it was not raining, these window cleaners admitted that they could easily earn over 200 dollars a day.  But earning 200 dollars a day on sunny days was not attractive enough to most people, especially in a city that gets rainfall nearly fifty percent of the time.  Work that came and went with the weather had created a shortage of window cleaners in Vancouver.  Bob recognized an opportunity but a solution was needed to eliminate the lack of work on rainy days and the insurmountable demand on sunny days.  If a solution could be found, Bob had estimated that there was the potential of earning over a thousand dollars a week.  If a business could be expanded to include employees, the opportunity was even greater.  From Bob's experience, I learned that the next step to being an entrepreneur is seeking ways to find a solution to a problem through critical thinking (Glackin 2013).

 

Evaluating Opportunities with Critical Thinking

​

     In order to find a solution, Bob had to ask himself a series of questions: Why can a person not clean windows every day? The answer to this question is: Many shop owners believe that rain makes the windows dirty.  Bob then asked himself: What makes windows dirty? And another question: Is it the rain that makes them dirty, or is it from another source such as pollution in the air? Answers to these questions could be the beginning of a very profitable business.  To find the answers to these questions, Bob did some tests on his own windows at home.  In doing so, he discovered that washing windows in the rain produced windows that were equally as clean as windows that were washed on a sunny day.  After the rain stopped, the clean windows dried up and were essentially dirt free.  The idea that rain makes windows dirty was false.  Bob discovered that rain only makes the dirt on windows more obvious because rain left the preexisting dirt on the window in the form of droplets.  But without the dirt on the window to begin with, the rain dries without leaving a residue.  This discovery was not rocket science, but it did enable Bob to provide a solution and build an effective strategy which was, and should be, based on what customers actually need and want (Glackin 2013).  In order to continually have clean windows, the shop owners needed to accept having them cleaned on a fixed schedule, regardless of the weather. This solution would not only prevent the shortage of window cleaners on sunny days but it would also provide income for a window cleaner every day.  Offering this solution to shop owners did take some convincing, but it was mutually beneficial. 

 

     By the point in time that I was working with Bob, he had already turned his idea into an actual working business plan.  He did not tell me how much he was earning, but I concluded that he was earning much more than a thousand dollars each week. I came to this conclusion because he was paying me twenty dollars an hour to help him handle some large jobs that he had landed that month. If he could afford to pay me twenty dollars an hour as his helper, I deduced that he must be earning at least forty dollars an hour without my help (I later learned that he was earning much more).  Being a good friend who wanted to help me, Bob encouraged me to start running a similar business. I enjoyed the work and was definitely interested in running my own small business, but taking the jump from being an employee to starting my own business involved taking a risk.  Starting a business would require investing in equipment, advertising, insurance, and other overhead expenses.  Also, it would take some time before I had enough customers to cover my expenses, and even more time until I would be earning enough money to turn a profit.  A part of me wanted to jump right in but I needed to do some research and planning before I could reach a decision.  At this point, I learned that an entrepreneur needs to determine whether or not his business idea is feasible before it is launched (Glackin 2013).

​

Determining Feasibility

​

     Before I could quit my job and put all of my energies into running the new business, I first needed to determine if the business idea was feasible.  The business concept was working for Bob, but that does not mean that it would work for me. In order to be successful, to some degree I would need to diversify from what Bob was already doing (Glackin 2013).  Bob had already targeted the best shops in the city that were willing to pay more than a dollar per window for a clean, reliable window cleaner. Therefore, I first needed to establish who my target market was going to be, determine if there were enough of the target customers available in the market, and create a level and quality of service that would be perceived as valuable in the minds of my target customers (Glackin 2013).  If there were enough customers willing to pay for the service that I was going to offer, and if the revenue from performing the service was going to leave me with an acceptable amount of profit, then the plan might be feasible.  I also needed to calculate how long it would take to reach the breakeven point and have a plan to survive financially until I was earning a profit. It was clear that I needed to begin gathering information to determine what my earning potential was. 

​

Gathering Information and Estimating Profit

 

     In the month that I spent working with Bob, I was able to determine that the average window took only one minute to clean when cleaned by a trained professional using standard equipment.  It took between two to three minutes for me (without much training) to do the same. Throughout Vancouver, the average rate that "fly-by-night" window cleaners charged was one dollar per window, per side (an average sized shop window cleaned inside and out would cost two dollars). For larger windows, this price could increase to two or three dollars per window. For very large windows, such as windows at car dealerships, the price could be as high as ten dollars per window.  Through observation and speaking with Bob, I was able to calculate that the average window cleaner, including Bob, was spending roughly half of his time traveling between shops and collecting payment from customers. Bob's clients were higher-end businesses that were willing to pay more and agreed to having their windows cleaned on rainy days, but there was no guarantee that my customers would accept the same pricing and arrangement. Based on the perception of most shop owners that windows should only be cleaned on days without precipitation, and based on factual weather records in Vancouver into account, I came up with the following estimates for earning potential:

​

​

​

​

​

​

​

​​​

     My salary as a carpenter at the time was roughly 640 dollars per week based on working 40 hours a week at 16 dollars an hour. Therefore, there was a potential to increase my income as a window cleaner by 120 dollars each week without improving on the methods that were currently being used by the average fly-by-night window cleaner.  Now that I had a low-end estimate of the revenue that I could earn as a window cleaner, I had to calculate what my expenses would be.  I managed to chat with a window cleaner who told me that he drives all over the city in one day and that fuel was his greatest expense.  Aside from fuel, I would need to pay for street parking and garage parking a few times each day.  There would be "wear and tear" on my vehicle.  I would also need to buy liability insurance in case of property damage. The cost of buying and replacing equipment would need to be factored into my yearly expenses.  And the cost of soap, razor blades, and rags would have to be calculated into weekly expenses.  Therefore, I was able to estimate the following expenses for:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​​​     Even though I was able to estimate that the expenses for running a window cleaning business are very low, I also determined that the increase in my revenue by switching from carpentry to window cleaning would be more than cancelled out by these operating costs incurred.  Therefore, the business plan would only be attractive if I could increase the number of work days in a week (which Bob had already done) and if I could increase the number of windows that can be cleaned each hour.  It appeared to me that spending so much time traveling between customers was an unnecessary waste that could be reduced by grouping more customers into smaller routes.  In time, I could also search for ways to improve the efficiency of the work.  But until that could be accomplished, I could only estimate an increased revenue from what I had learned from Bob (that it is possible to clean windows on rainy days), and that I had personally witnessed a high degree of waste from Bob and other window cleaners who were driving all over the city. Reasoning on the changes that I needed to make in order to increase profit, I was able to see that my strategy would need to differ from my competition.  Before I devised my own strategy, I took a close look at the competition. 

​

Analyzing and Understanding Strategies Used by the Current Players

​

     In order to establish a winning strategy that was better than my competition, I had to understand the strategies that were already being employed in the market (Glackin 2013).  By identifying areas of the market that were not being satisfied, as Bob had already done, I could also expect to gain a portion of that market.  

 

     One strategy being executed by most large window cleaning  companies was one that offered a very high standard of service but at a very high price.  Advertisements for these large window cleaning companies could often be found in the newspaper or the phone book that offered their services for homes and businesses alike.  Although they did not specialize to meet the needs of one kind of customer, the people performing the work were well-trained, professionally dressed, and courteous. The minimum charge for their services, though, normally started at fifty or sixty dollars.  These businesses could often perform the work within two or three days of making the appointment.  For desperate shopkeepers and very large shops, the price might be acceptable but waiting two or three days was rarely attractive. Only very big shops relied on businesses who had a large minimum charge since most shops in the city have only five to ten windows.  The minimum charge, therefore, automatically put their services out of reach for the vast majority of shops in the market.  But being able to call these companies as needed made them appealing to desperate shopkeepers and to stores with 30 or more windows, which I estimated to be less than five percent of the market.

​

     The most common strategy being used was offering the lowest price without any commitment.  Window cleaning services could be found at a rate of one dollar per window (without a minimum charge) by unreliable window cleaners who wore random T-shirts, dirty jeans, and often looked very unkempt. These window cleaners could be called when needed but also came around offering services before they were wanted. This approach caused surges in demand that could not be met in a timely fashion.  This strategy was only working because the price was attractive to the vast majority of small shop owners and the windows did get cleaned, though the work was done by unkempt people.  Most shops had no choice but to use the poorly groomed, unscheduled, and unreliable window cleaners that were nearly impossible to find when most needed.  Price and flexibility were the only draws and too much flexibility and unpredictability were actually frustrating many of their customers.

 

     The third strategy was similar to the first strategy that offered high-quality service but was more specialized to meet the needs of the thousands of small and medium-sized stores in the market.  Bob, and only a handful of other entrepreneurial people before him, had wisely spotted that there was a niche market begging to pay more for clean and reliable window cleaners.  Bob had discovered that there were enough high-end businesses in the market that would allow him to raise the rate per window and still gain a large enough portion of the market. And by insisting that customers choose between having their windows cleaned every week, every two weeks, or every four weeks, Bob could perfectly balance his schedule every day of the week within every four-week period without there being any work overloads. His customers would never have to call him for his services and he would clean their windows "rain or shine". One weakness to this strategy is that there were only a few shops in each block that earned enough of a profit to view the increase in price as a insignificant. Another weakness is that the higher price for a simple job could be easily undermined by lower bids. Regardless of these weaknesses, this strategy enabled him and a few others to have more work than they could handle and earn a very handsome profit.  With the knowledge that I gained from Bob and the results from my own feasibility estimates, it was time to devise my own strategy.

​

Devising a Unique and Effective Strategy

     

     By analyzing each of the three common strategies, I came to recognize that each strategy had its own strengths and weaknesses.  I could see why many homes and some businesses relied on large window cleaning companies that had a minimum charge.  For homes and very large shops, the minimum charge rarely came into effect and the quality of service was very good. For the window cleaning companies, they were not interested in shops with only a few windows. Therefore, this strategy could gain a large enough portion of the market and these window cleaning companies were earning a sizable profit. For the unkempt window cleaners working for a dollar per window, they had more work than they could handle even if the majority of their customers were unhappy with their services.  The ability to earn over two hundred dollars a day, three days a week, was enough profit for them to earn a living.  Bob's strategy, on the other hand, was a high-quality service that was viewed as affordable by many of the high-end businesses, but very few of the "mom and pop" shops were willing to pay more than the going rate. There were at least one or two shops in every block that felt Bob's increase in price was insignificant and appreciated that it was often half of what the big window cleaning companies would charge.  Therefore, a few shops on each block were more than willing to accept Bob's rigid schedule and a commitment to ongoing services.  In fact, the vast majority of Bob's customers asked for their windows to be cleaned every week just to ensure that their windows always looked clean and spotless. In their minds, when paying $5,000 or more each month for rent, paying an additional $100 to keep the shop looking fresh was easily affordable.  

​

     After comparing the strengths of all three strategies, I came the the conclusion that the third strategy offered the best opportunity to get into the market. His reliability and clean look set him apart from the low-end cleaners. Having no minimum charge also set him apart from the large window cleaning companies.  On the other hand, I still felt that he spent too much time driving between customers.  I did not like that the higher prices exposed him to losing customers to low-ballers for a service that can be easily duplicated. Therefore, I decided to choose a strength from of each strategy to form my own.  

 

     First of all, I liked that the first strategy required their workers to wear a uniform. For the large shops that could afford their services, it reflected well on them that they hired professionals to do the work.  So I decided that anyone working for my business, including myself, must wear a uniform.  From the second strategy, I chose to keep the price at one dollar per window.  I decided to keep my prices at this point since I needed more than one or two shops in each block in order to reduce downtime and increase the number of windows I could clean in an hour.  This pricing strategy also worked for my business since I could not target the same high-end customers that my friend Bob had already acquired.  From Bob's strategy, I chose to use the same rigid scheduling system.  If customers could not be convinced to accept ongoing window cleaning services every week, two weeks, or four weeks, I would turn them down.  By doing so, I would be able to have a balanced schedule like Bob that avoids surges in demand.  I would also have pricing that appealed to the majority rather than the minority.  By devising a unique and effective strategy for my window cleaning business, I was able to update my estimated revenue and operating costs accordingly:

​

​

                      

 

​

 

           

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​​​

​​​​     Now that I had a clearer strategy in mind, I recognized that I needed to spend some money on advertising to enable me to speed up the time it would take for me to gain a large number of customers.  I did this by adding a budget for printing professional flyers each month that I would distribute to every store in the areas I targeted.  Also, I needed to look more professional than other window cleaners by wearing a well-fitted work uniform.  Therefore, I added advertising and clothing to the estimated expenses. I already owned a vehicle that I was insuring for driving to work as a carpenter so I did not need to spend any money at the start to have a vehicle. From my estimated expenses, I was able to calculate that I could purchase the basic necessities to start the business with approximately one thousand dollars.  This would include one uniform, the basic window cleaning supplies, liability insurance, one thousand flyers, and a box of high-quality business cards.  After realizing that I had the potential to earn over 1,500 dollars each week with a simple business plan and very low startup costs, I decided to move forward with the plan.  I registered the name "Blue Earth Maintenance" and had a green and blue logo designed professionally by graphic designer.

​

Earning and Learning

​

     Up until this point, all of my decisions were based on what I had learned from Bob and what I was able to conclude using common sense.  There was no guarantee that my plan would work.  But in the weeks and years after I started running Blue Earth Maintenance, I learned why my strategy was effective and I also learned many other principles of entrepreneurship through trial and error.

 

     First of all, I learned that having an effective entrepreneurial strategy is essential for success in every business. The reason is that a strategy is a plan to outperform the competition (Glackin 2013).  These strategies come in several distinct forms but many entrepreneurs combine elements from two, three, or more strategies into one, just as I had done in my window cleaning business (Drucker 1985). One strategy, often called par excellence, is a strategy that aims at being the leader in the industry that dominates its market. Dominating a market does not guarantee profitability but it is the strategy used to gain and hold onto a large share of the market. A second strategy, called creative imitation, is a strategy that imitates the innovation of another entrepreneur by taking whatever is effective about that strategy and then executing it better than the originator (Drucker 1985). A third strategy, sometimes referred to as the specialty market, is the strategy that targets a niche market by customizing the product or service to suit that portion of the market better than other businesses (Drucker 1985). At the time of starting my business, I had unknowingly combined elements of these three strategies as well as appropriate pricing strategies in order to gain a large enough portion of the window cleaning market and earn a sizable profit.

​

     Elements of par excellence: A key piece of information that I gained from considering the feasibility of the business idea was that I needed to eliminate the amount of time spent traveling between one shop to the next.  To increase efficiency and profit, I needed to have many customers in each block. Dominating areas of the city was essential to the success of my plan.  I handpicked areas of the city that I could dominate and turned down offers outside of those areas that would reduce my efficiency and control. Otherwise, my customer base would become thinned out just like every other window cleaner.  But in order to dominate entire areas, I needed to be a price leader and a service leader at the same time. I unknowingly was choosing elements of the par excellence strategy to form my own strategy. By eliminating traveling time, I was able to offer top-notch service while continuing to offer the low-end rate of one dollar per window.  So rather than having having just one or two customers in a block, I was often able to gain as many as 10 or 15 customers.  An advantage to this strategy that I did not foresee is that my customers often found new customers for me by telling other shops that Blue Earth Maintenance cleans windows for the whole block.  Therefore, I gained customers quickly through dominance.  My affordable pricing and high level of service made it difficult, if not impossible, for other window cleaners to gain a foothold in the areas that I dominated.  

​

     Elements of creative imitation: I owe the idea of becoming a professional window cleaner that caters specifically to the needs of restaurants, cafes, and boutique stores to my friend, Bob.  I would later learn that there were other window cleaners who had developed a similar approach to the one that Bob used.  But after taking the general idea from Bob, I created my own strategy that would enable me to service more customers each hour.  Whereas Bob was able to increase revenue through better scheduling and by increasing prices over the standard, I was able to build on his strategy by having more market dominance and less downtime.  Therefore, by taking the elements of Bob's approach that were working for the high-end market, I was able to build an effective strategy that appealed to the mid-range and high-end segments of the market. 

​

     Elements of specialty market: By specializing in the type of window cleaning that I would perform, I gained an advantage over the companies that were performing residential and commercial window cleaning.  Residential window cleaning was profitable but it was seasonal and inconsistent.  Therefore, I decided to focus only on stores that wanted their windows cleaned year round.  By refusing work that required an extension ladder, I reduced the cost of equipment and did not even need to use a large vehicle. Therefore, I chose to focus on ground-level shops in high-traffic areas that would be most inclined to have their windows cleaned weekly or biweekly.  Narrowing down the type of customer that I targeted further increased my efficiency and would enable me to raise the level of service within that particular market segment. Every week I had people on the street ask me to clean the windows in their homes and offices.  I always turned down these offers because trying to serve every segment of the market would have prevented me from specializing in the market that I was dominating in.  Again, I had unknowingly selected elements of the specialty market strategy into my own business strategy.

​

     Economy pricing:  Each pricing strategy has its own benefits.  If I had chosen to go with a premium pricing strategy, I would have been able to earn more revenue from each customer, just as my friend Bob continues to do until this day.  The downside to premium pricing is that a smaller portion of the market would have accepted my services at higher prices.  Premium pricing would have also put me into closer competition with the same person who was helping me get into the business.  My pricing strategy also needed to grab and hold a larger segment of the market in comparison to businesses that charged premium rates.  By choosing a greater volume of customers at lower prices, I had mixed elements of economy pricing into my strategy.  This strategy proved to be highly effective because I could easily gain business from the fly-by-night window cleaners, since our pricing was identical.  Essentially, I able to offer better service for the same price.  This pricing strategy along with the par excellence strategy exceeded my estimates in the number of windows that I could clean in an hour.  On the blocks that I had 10 to 15 customers, I could easily clean over a hundred windows in an hour.  So rather than earning just 45 dollars an hour, some blocks allowed me to earn between 100 and 140 dollars an hour. The high volume of customers gained through economy pricing enabled me to earn over 500 dollars a day, before I expanded the business by hiring sub-contractors. 

 

     Penetrating pricing:  Aside from pricing that would land and hold a greater volume of customers, I also wanted to start earning revenue as quickly as possible.  Many shops remained loyal to unreliable window cleaners despite their poor service so I needed as many of the new shops as possible to become regular customers.  Therefore, I came up with the idea of offering window cleaning for new shops on their opening day at the standard rate of one dollar per side rather than the much higher price that is charged for post-construction cleanup.  I offered the discounted price as a way to "get my foot in the door" and to demonstrate the quality of our work.  By converting as many of the new shops as possible into regular customers, I could gain a greater portion of the market in a shorter time.  This is the same strategy that was used by Gillette in the late 1800's who sold their razors at one fifth of their production cost in order to earn a profit off of the replacement blades (Drucker 1985).  The same penetrating pricing is used by printer manufacturers today who sell printers at a low cost in order to get customers hooked on buying the replacement ink cartridges.  New shop owners were often over budget at the time of opening their shops so offering a very low price to make their store windows look perfect on opening day was hard to resist.  I was not interested in earning a profit from the initial cleaning, which often took me four or five times longer than a standard cleaning.  I was primarily interested in earning a profit on the ongoing maintenance of the shop's windows for the weeks, months, and years after the shop opened. Much like Gillette and modern day printer manufacturers, I needed a way to get new customers hooked on my services at an introductory price that they could afford.  I learned through experience that penetrating pricing is able to quickly gain a portion of the market.  For me, penetrating pricing along with economy pricing enabled me to gain and hold dominance in the areas I was servicing. 

​

Learning Additional Principles in Entrepreneurship

​

     As I grew the business from earning 10,000 dollars in the first year until seven years later when the business was earning a revenue of over 150,000 dollars a year, I was constantly learning new principles of entrepreneurship. I worked hard at applying the business strategy but also needed to constantly make adjustments to the way I handled the business.  By the end of the seventh year, I had over 300 customers and needed two sub-contractors at all times to assist me in caring for all of my customers.  Without any previous training in business, I learned the following lessons through hands-on experience:

​

1. People work for more than just money (Johnson 2013).  When I hired sub-contractors, most of them confessed that they had never earned more than twenty dollars an hour as employees or contractors.  I erroneously believed that paying them as much as I could would produce the best results. When I was managing the business and all of the invoicing, I paid the sub-contractors 50 percent of what we invoiced for. This meant that sub-contractors could earn between 30 and 40 dollars an hour and did not have to do any paperwork.  At times when I was out of the country, I paid the sub-contractors 75 percent of the invoices since there was more paperwork to manage and collecting of payments.  This arrangement allowed them to earn between 40 an 60 dollars and hour.  In the beginning, the effort shown by the workers was excellent.  But in time, the quality of work began to suffer greatly and gradually they seemed to be less motivated.  All but two sub-contractors lasted more than a year. Through experience, I learned that overpaying people does not teach them to work harder or to love their jobs.  While money might motivate some people, it does not motivate everyone. After much grief and frustration, I learned that I needed to "find out what makes them tick and align their goals with [my] passions" (Johnson 2013).  After seeing a repeating pattern of unmotivated workers, I learned to help them see how their strong performance could help them to reach their goals which may include advancement, greater responsibility, and the opportunity to learn how to build their own businesses.  The end result was a win-win situation for everyone.

​​​

2. You have to let some customers go.  The success of my business plan was based on gaining as many customers as possible so that I could have less downtime and a more efficient business. I treated each and every customer as a necessary piece of the puzzle.  But in time, I realized that "bad customers can cause a lot of frustration, drain resources, damage your reputation, and eventually put you out of business" (Johnson 2013).  For example, some customers were not happy unless they were paying less than the standard rate. These same customers often wanted more services for less pay.  I also found that I was spending an inordinate amount of time chasing some customers for payments.  The farther that the late-payers got behind on their invoices, the harder it was to let them go.  But in the end, I learned that letting bad customers go that were wasting my time allowed me more time to find good customers.  I learned to be more skeptical of customers who were unreasonably demanding. Customers that were difficult to deal with were not profitable.  Entrepreneurs need to know that there are enough good customers in the market and to stop wasting time on the bad ones. 

​​

3. Entrepreneurs feel unequalled satisfaction when their ideas becomes a reality (Johnson 2013).  Before starting the window cleaning business, I had only worked for people who were operating their own businesses.  No matter which job I worked at, I always enjoyed assignments where I was allowed to use creativity, imagination, and problem-solving skills.  But it was not until I saw my own business idea become a reality that I felt the unequalled satisfaction of an entrepreneur.  The strategy that I had devised was bringing results that exceeded my own expectations and work no longer felt like work.  I was earning more money than I had ever earned before but building the business from scratch and seeing it grow was the greatest source of satisfaction that I had ever experienced.  

​

4. A business needs to be clearly defined (Glackin 2013).  The amount of revenue that I could generate as a window cleaner exceeded my own expectations, which at times was two and half times more than I had estimated. This is largely due to the efficiency gained by being very clear on what services I offered, where I offered them, when I offered them, how I offered them, and to whom I offered them:

Who:    Single-story shops.

What:   Window cleaning (and nothing more).

Where: Busy commercial streets within 30 minutes of my home.

When:  On the days and times when I am already servicing shops on that street.

How:    Using professional equipment, professional techniques, while dressed like a professional.

​

​5. There are benefits to being the first to enter a market (Glackin 2013).  My strategy was effective, I built up more customers than Bob's business, and I did dominate areas throughout the city that provided stability.  But in the end, Bob and I earned roughly the same income which was between 400 and 500 dollars each day.  The difference was that I had to clean almost twice as many windows in a day to earn the same income. Therefore, being the second business to enter the market with a similar strategy meant that I had to work much harder to earn the same profit.

​

Part II - Further Developing and Applying the Skills of an Entrepreneur

 

     Managing the window cleaning business from Taiwan was not overly difficult but when problems arose I was often unable to solve them in a timely fashion.  Therefore, after moving from Taiwan to Shanghai in 2005, I decided that it was time to sell the window cleaning business and move on to bigger and better things.  Selling the business would not only free up time for other pursuits, but I would also have some money to put toward the next business opportunity.  I was working part-time as an English teacher in Shanghai, China and was surrounded by countless other expatriates who were either running their own businesses or working as managers of foreign businesses.  Meeting so many driven people who were engaged in foreign trade sparked my interest in starting an importing or exporting business. 

 

     To assist me in making a decision on how to get involved in international trade, I purchased the third edition of a book called Building an Import / Export Business, written by Kenneth Weiss.  For the most part, the book stated principles that were based on common sense and similar to the principles of running any business, but there were four points that I benefited from greatly that anyone starting an importing business would not necessarily be aware of:

 

1. It is always easier to pull products rather than push them (Weiss 2002).  In other words, if you can start with a buyer and then go looking for products to meet the buyer’s needs, you will not have to spend so much energy looking for buyers.  Therefore, an ideal importing situation starts with the buyer since products can always be found for buyers.  Buyers, on the other hand, cannot always be found for products.

 

2. No matter what product you import or export, you must know the product very well (Weiss 2002).  The book explained that many entrepreneurs have entered markets that they know very little about simply because they see the opportunity to earn a profit. The example given was a businessman who imported motorcycles just because he had a buyer and a manufacturer.  But importing a product that you cannot identify as defective, such as a motor, often leads to the importer accepting a product from the factory that gets rejected by the buyer.  The point is to make sure that you, the importer, know your product well enough to know which products should be rejected since you will get stuck with any and all products that your customer rejects.

​

3. When it comes to shipping documents, accuracy is essential (Weiss 2002).  Documents, such as bills of lading, must match their respective packing lists and commercial invoices exactly or it will cause delays and late penalties at the ports of destination. For example, if a product is shipped in 400 cartons with 500 units in each carton, it is must be written exactly this way on the packing list and on the bill of lading.  Even though 500 cartons with 400 units each is the exact same quantity, if there is a discrepancy in the way that it is recorded, the shipment will not clear customs until corrective documents are submitted. Therefore, it is vital to check all shipping documents as soon as they are available and have any errors corrected immediately. 

 

4. After imported goods are sold to buyers, continue to make yourself (Weiss 2002).  This piece of advice is intended to prevent buyers from circumventing the importer and buying directly from the factory.  In this day and age, it is all too easy for companies to find the source of products through a simple search on the internet.  Bills of lading are often posted online and several websites offer importing records for any importing company for a fee.  Therefore, in order to maintain long-term relationships, an importer must provide useful services to the buyer, such as quality inspections at the factories, long after the first sale.

 

Starting with a Buyer 

​

     Starting with the first point that I learned from the book Building an Import / Export Business, I considered long and hard who I knew that purchased a great deal of products that I may be able to source products for.  The only friend that I knew of who was purchasing large quantities of product was Mike Denike of Sundance Foods. Mike was exporting wild smoked salmon and other seafood products all over the world. After meeting with Mike, we quickly concluded that products marked “made in China” would not be a good fit for his high-end brand of products. 

 

     On the same visit, Mike and I also determined that within the Chinese market at the time, there were not enough customers that would appreciate the difference between farmed and wild salmon to make my efforts to export his products to China worthwhile. Without a buyer or a western product to sell in China, I was left with the more difficult approach to importing, which is pushing products rather than pulling.  Mike could see that I was determined to start another business and concluded our meeting by offering me a valuable advice that I would use a few years later: “The number one reason for failed businesses in the US and Canada is uncontrolled growth.” Although I still did not have an idea for a product or a market to target, I did come away from the meeting with a very important piece of information that I would later use to guide the growth of the business.  From that point on, I spent the next two years attending trade show exhibitions throughout China in search of a product worthy of pushing. 

​

Finding the Right Product

​

     Attending trade show exhibitions was an important learning experience because I was able to meet many young and aspiring entrepreneurs who, just like me, were hunting for products to meet the needs of society.  The search for products, though, was unfruitful because I mainly encountered products for markets that needed a large investment to get into. Other products were already sold in large quantities but were less profitable due to being late in the product's life cycle.  I concluded that neither option was attractive for a new importing business to get started with. 

 

     However, in March of 2007 I did find an interesting product while I was on vacation in England.  When ordering a coffee in London, I saw that the coffee shop offered disposable tablespoons for stirring coffee that were made of wood.  Unlike the wooden spoons that I had seen as a child, which were completely flat like a paddle, these spoons were actually curved and formed like a normal spoon.  Since I had years of experience in carpentry, I was intrigued by the shape of the wooden spoons and how the cupped end was accomplished. Aside from the interesting shape, I was also impressed that the spoon was completely natural.  Only weeks before seeing this disposable wooden spoon, I had read an article about the amount of plastic that was floating in the ocean and had wished I could do something about it.  I immediately recognized the opportunity that I had been searching for so I left the cafe with a handful of wooden spoons.  I was excited to research the market and determine if there was a suitable strategy that could be used to secure a large enough portion of the disposable tableware market. I also needed to compare the pricing but before I could do that I needed find a factory.       

​

Researching the Market

​

     It did not take long for me to determine that the market for disposable tableware was a massive market.  One statistic I read was that 10 billion pieces of plastic cutlery reach landfills in America every year.  If the number of pieces that reach the landfills each year is 10 billion, then the number of pieces purchased each year must be even higher since some are recycled and others are discarded carelessly and never reach the landfills.  So there was no question that the market for disposable tableware was large enough to sustain a newcomer, especially one that is naturally biodegradable.  At the time of researching the availibility of wooden cutlery in North America, there were no products like it anywhere, so there were no apparent "barriers to entry" (Glackin 2013).

​

Determining Feasibility

​

     The next question to consider was whether the pricing would be affordable enough to capture enough of the market (Glackin 2013).  I began researching how much companies pay for disposable plastic spoons.  To find the answer, I simply contacted a foodservice distributor in California and asked for pricing on the plastic spoons.  The price ranged from 1 cent for a flimsy plastic utensil to 2.5 cents per piece for a high quality one.  I reasoned that customers would expect to pay more for a wooden utensil but the price would still have to be close in order to be affordable for most businesses and not just the high-end businesses.  I decided it would be necessary to search for a factory in China in order to compete in the disposable tableware market which mostly produced in Asia.  After weeks of contacting factories across China by phone and email, I not only found a factory to make a similar wooden cutlery, I found the very factory that had produced the wooden spoons that I grabbed from the cafe in London. The price per piece was roughly between 1 cent and 1.5 cents each, depending on the item.  Therefore, I decided to make the following calculations to determine if a 100 percent markup would be feasible for customers:

​

​

​

​

​

​

​

​

     Using these rough estimates, I determined that we could keep the enduser prices within a reasonable distance from plastic cutlery if we could operate profitably within a 100-percent markup and if we could find foodservice distributors to sell our products within a 40-percent markup.  After negotiating a small minimum quantity order from the wooden cutlery factory, I put together the following estimates for operating expenses for a one-year period:

​

​

​

​

​

​

​

​

​

​

​

​

 

 

 

​

​

​

​

     

     After calculating the fixed costs for conducting business over a one-year period, I determined that a 100-percent markup from the product cost at the factory was reasonable yet it also allowed some room for error.  On average, we could earn of profit of $5 on a case of 1,000 pieces of wooden utensils that we would sell to distributors for $30 each. Selling all of the product would have a total revenue of $36,000 and a profit of at least $6,700. If business continued beyond the first year, the actual profit would be higher since some of the fixed expenses, such as the website and fax machine, would not occur every 12 months would be spread across three or four years.  Thus, staying in business for several years would reduce the expenses and increase profit.  Importing full containers would also reduce our shipping and handling fees so there were many ways that our profit would increase as the size and frequency of orders increased.  I was confident that we could eventually sell much more than a minimum order each year, which only used eight feet of a 20-foot shipping container. Using these calculations, I decided that I wanted to go ahead with importing the wooden cutlery from China.  Unlike the needs of the window cleaning business, much more thought and planning would be needed. There would be a need for marketing, inventory management, and cashflow management.  None of these were a significant part of the window cleaning business.  I also wanted to build a team since "pooling resources" and joining forces with "people who have different strengths" would help the business go farther (Glackin 2013).

​

Building a Team

     

     Even though I had found the wooden cutlery factory in May of 2007 and determined that selling disposable wooden cutlery in North America was a feasible business idea shortly afterwards, it was not until June of 2008 that I would eventually incorporate a business and place the first order. The 13 months after determining feasibility were spent on building a team, planning, and marketing.  I have always found numbers easy to manage but managing people and doing sales calls were never my strengths. Therefore, I decided to build a team that had strengths different from mine and who were invested in the business.  Having partners who invested into the business meant that I needed to invest less.  A second benefit is that people tend to work harder when they have some ownership in the business (Glackin 2013).  I also needed to choose people that I trusted.  

 

     My first choice for a business partner was Liam Callaghan from Berkeley, California.  We both worked part-time at the same language school in Shanghai.  Liam was very creative and good with people. Being from Berkeley, he also had a very good understanding of ecological issues and understood the growing demand for eco-friendly products in the United States.  An unforeseen benefit was that Liam had an uncle who owned a warehouse in Oakland who was willing to give us free warehousing until the business was earning a profit.  Liam liked the product immediately and he agreed that the business idea was feasible.  He offered to invest $5,500 and to contribute his talents in any way that was needed.

​

     My second choice, Javan Smith, came as a recommendation from Liam.  Liam and I both lived in Shanghai so it was obvious that at least one of our partners needed to be in the United States.  Most of the duties required to get the business up and running could be performed from China but there were certain duties that could not, such as sales.  Therefore, the third partner needed to act as the salesman in the beginning and eventually oversee sales as the business grew.  Liam immediately recommended Javan since they had known each other their entire lives and Liam regarded Javan as a trustworthy person who was gifted at sales. I had met Javan in Shanghai briefly when he had visited a year earlier, so it was a benefit to have already seen him interact with other people.  After speaking with Javan online extensively, he agreed to invest $5,500 into the business and to oversee sales in the United States while continuing to work as a fireman.  Additionally, his home in Berkeley would serve as the office for the business for the first few years.

​

     There was some consideration to add another partner, Kevin Taylor, who had extensive marketing experience.  The problem was that Kevin was unable to invest financially into the business and he also wanted to receive a small monthly salary for his services.  Since our resources were extremely limited and the need for a professional marketer was not pressing, we decided to leave Kevin Taylor out of the partnership.  This proved to be a wise decision since there was no reason to give any amount of ownership to a member that was not investing financially and whose services could just as easily be hired at the same rate from someone else.   

​

Gathering Resources

​

     In the early 1800's, the French Economist Jean-Baptiste Say said: “The entrepreneur shifts economic resources out of an area of lower and into an area of higher productivity and greater yield” (Glackin 2013).  Our business needed resources before any "shifting to a greater yield" could take place, which included financial resources and human resources.  I recognized early on that I would not have as much success by relying on my own knowledge, skills, and talents.  Therefore, by building a team, we tripled our human resources and our connections, which included the use of a warehouse in a very strategic location.  

 

     Financially, we were also stronger than if I had relied on my own resources.  I had more savings than the $12,200 that I agreed to invest.  But each partner contributing financially lessened the investment burden and reduced our opportunity costs.  Each of my partners agreed to invest $5,500, so our total initial investment was $22,200. Since our initial capitalization was under $35,000 and the owners would be involved in the regular operation of the business, our business would be classified as a microenterprise (Glackin 2013).  With such a low initial investment, we would need a solid business plan to turn our resources into a business with significant yields.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

 

​

​

​

​

​

​

​

​​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​​​

​

 

​

​

​

​

​