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Archive for July, 2012

Two new business ventures

Posted in Business owner, The journey, tagged , , , , , , , , on July 23, 2012 | 1 Comment »

I have recently been looking at ways to reduce the dependency on working for someone else and have been examining two businesses which I think will succeed. I expect these businesses will fulfill my New Years objective of making at least £1 from running a business by year end. These will not replace me working as an IT Contractor (at least not in the next year) but may supplement income over the medium term.

Online Marketing and SEO

The first business is an ‘online marketing and SEO company’ which will provide an online active presence for appropriate local small businesses. I already have the expertise to run the company although some of the fine tuning skills for marketing campaigns needs to be updated.

The offering essentially is to take the business, create a narrative around the business and then create an online presence using this story, utilising local networks, business listings, social networks such as Facebook and Twitter etc, as well and giving advice about their website user experience and customer retention.

The key for this business is to be able to generate appropriate keyworded content that forms a human connection with the communities we place them in to. We will need to do this semi-automatically due to the low budgets of small businesses.

The value we will be offering, if the ability to reach a wider audience, be found quicker by customers and gain a higher conversion rate once customers are on their website. This translates to more sales.

We will also need to find inexpensive data-input staff that know social networking well and are able to write good prose appropriate for that community. I was thinking that perhaps the government scheme for NEETs might help us our here and we can provide a job for someone who needs one.

We will need to create the software for the staff to use; allowing multiple uploads to different sites and keeping track of how much work and time they are spending on each campaign, and analytics to measure the success.

I have put together a spread sheet covering a running monthly balance, and have determined we need a minimum of   12 clients paying on average £400 / month to make the business minimally worth it. This provides my threshold of a worthwhile endeavour of £1000 income to each shareholder per month.

Campervan rentals

The second business has come about due to my own experience of renting a campervan for my family. At present there are very limited campervan hire places in my area and I have had to travel over an hour to the nearest one. On talking to the owner, I found he was fully booked from January to October and these bookings had been made by March.

I have done a bit of research and although I need to do more, I have put together a similar balance spread sheet for this business and found that if I assume 150 days of rental per year with an average of 5 days per rental, I would need 3 vans to provide my minimum threshold.

Mathematics of the two businesses for financial freedom

Given a minimum of 12 clients and a minimum of 2 vans and that I need around £5000 per month for my living costs, we can say that

xC + yV = 5000, where V > 3 and C > 12 where x is the number of clients for the marketing business and y is the number of vans I need to rent out.

When V = 0, 53C = 5000 -> C = 94

When C = 0, 9V = 5000 -> V = 555

94x + 555y = 5000

So if x must be at least 12, then y must be at least 7

And if y must be at least 3, then x must be at least 36.

This gives me a range of values for each business

Camper Vans Clients

0

53

3

36

4

30

5

24

6

18

7

12

9

0

This includes either business being below the threshold of being worthwhile pursuing.

Conclusion and next steps

I don’t yet know what the market will provide in the way of number of rentals or clients. It may these numbers are realistic or not. The only way to find out is to do some market research and perhaps to dive in and see what happens.

We have found two potential trial clients who will give us a go for the marketing business and a potential paying customer. We have our first meetings with these clients this week.

When we have started with these clients, I may need to adjust the figures and expectations.

I will investigate the campervan business further and test the water by generating a web site with booking facilities. It will allow booking for next year at the start of the season and if we get enough bookings, I will procure the vans.

In the mean time I will start to look for another IT contract in about 2 weeks to cover me whilst the businesses get up and running.

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Don’t follow the crowd (especially Jim Cramer)…

Posted in Investments, The journey, tagged , , , , on July 20, 2012 | Leave a Comment »

Now Im not usually one to gloat, but Jim Cramer deserves all he gets.

Check out http://www.cnbc.com/id/47008953/Looking_for_Growth_Cramer_Recommends_Chipotle_s_Stock

And then look at today’s charts…

http://www.google.com/finance?q=cmg (20th July 2012)

Another good reason not to follow the celebrity traders.

If you do watch that video, then look out for the bit where the CFO says he is not so much interested in growth but in quality product. This was my key CMG would not meet their growth targets this year.

I subsequently added to my put contracts at that time.

Chipotle has been looking for a correction for over a year, with a PE ratio of over 55 and an average restaurant valuation at $110M, this was well overpriced.

I discussed this in March in my post on CMG.

Today we can see the see the sentiment on CMG through IG Index’s Insight application.

 

Today we saw a Netflix / GMCR moment. A bubble popping. Yet the above graphic shows most people (retail) and analysts expected this stock to rise.

Moral of the post: don’t follow the crowd.

Disclosure: I am short Chipotle and have sold contracts today at a nice profit.

 

 

 

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Once more into the breach, dear friends, once more

Posted in Business owner, The journey, tagged , on July 10, 2012 | Leave a Comment »

Having had a huge realisation about Entrepreneurism recently and then changing my plans because of it, I have been very busy testing some new ideas out for a new business venture.

It feels absolutely great to be doing something creative again on my own steam, something entrepreneurial. I have been full of energy since my realisation and I have been building my network of contacts with sheer enthusiasm!

The idea I am working on, is a new way of using online networks for local business service and product promotion. This is field which is fairly old now in internet terms, but a field I know very well. I am putting together a proof of concept and have a business partner who is finding two businesses which we will promote for free (or at least for cost) in return for their stats on their increase in revenue generated.

This will give us a trial run and some evidence that it works, and hopefully two references and our first two customers.

This idea is not going to stop me going back out into the world as an IT contractor, and in fact I am looking forward to getting my next contract soon. (Which should also be easier as I am going to be a lot less picky).

I am still doing my CFA course and learning as much about trading as possible as well as actually trading. So hopefully my next contract will be front office or prop trading, but I don’t mind too much now.

I feel very much empowered and excited by my new business venture. As soon as we have launched a web site I will write about it here.

 

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Testing sending a black swan to all of m

Posted in The journey on July 10, 2012 | Leave a Comment »

Testing sending a black swan to all of my social network sites at once, http://ow.ly/i/L6GJ

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Profound impact on my Three Plan attack

Posted in Business owner, The journey, tagged , , , , on July 8, 2012 | Leave a Comment »

My recent realisation of the value of entrepreneurism in the workplace and its saleability has had a profound impact on the approach I have laid out to becoming financially free.

If you have been following this blog you will know about the three plan approach and how I have been implementing this for the past few years. You can read about this in the previous posts:

My recent realisation is that entrepreneurism is not valued in the workplace. This may seem either totally obvious to some people or totally wrong to others, so I urge you to read the above post regarding this before continuing.

This realisation has led on to other understandings. It is like a locked door has been opened and secrets have begun pouring out, allowing me to understand confusing parts of reality. One of these realisations is why CTO positions are paid such a low rate. I was recently offered a chance of applying for a CTO at a hedge fund where the salary was less than half of what I am earning as a contractor.

The CTO is still an implementer of the plan. There is little innovation there. The innovation that is there is merely in how to implement the entrepreneurs plan to best effect.

Given that my three plans were designed to work together to gain knowledge around trading and all the time working to the top of this profession as a CTO in a hedge fund, this new understanding has a big impact on these plans.

I no longer see any value in becoming a Hedge Fund CTO. The only point in doing that was to gain the access to the entrepreneurial nature of the hedge fund and be an entrepreneur on the technical side. I no longer think this is possible unless you helped start the fund.

Therefore, I should either work to start my own fund or ditch the idea altogether. Working to start my own fund would require me learning a lot more about trading and having success at my trading myself. I am working on this and we’ll see what happens over the next few years.

In the meantime, there is no point in pursuing this, and the slow plan has to change to be the highest paid contract role I can find, preferably still in the trading side, but it doesn’t matter so much now. The second plan will need to restart and the entrepreneurial experience I seek can come into its own there.

I have an offer to be a part of a new start up for an SEO and web marketing company for local business. I have a lot of experience in this from when I ran my own company previously and I have already identified a unique offering we can bring to this market.

I see this being a part time adventure and will be one prong of the second plan. I have some other ideas I have been storing up that may generate income as well and now I am not focusing on the Hedge Fund CTO role so much, these may have space to breathe.

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Is entrepreneurialism a saleable commodity?

Posted in About me, Business owner, Philosophy, The journey, tagged , on July 7, 2012 | Leave a Comment »

I attended the University of Cambridge’s Entrepreneurship course at the Judge Institute in the summer of 2003. On this course, we learned the fundamentals of what it takes to start a company, both in practical terms and in human character. In short, we developed the skills of an entrepreneur in ourselves relating to start ups.

Since then, I have started up three companies, have worked with a number of other people’s start-ups, a selection of medium sized companies and large corporates as well as agencies and software development houses and I thought I would start this article by writing down some observations about entrepreneurship itself and the level of entrepreneurship I have seen during this time in these organisations.

Entrepreneurship is defined by Wikipedia by detailing a list of character traits on the person who is the would-be entrepreneur.  These traits include extroversion, a proclivity for risk taking, highly creative and someone who comes up with new ideas for generating new products and services etc.

Whilst running my own company, I had the opportunity to speak to a number of marketing agencies and large businesses about new ideas and wrote about my frustrations of not finding a single entrepreneurial thinker at that time. In retrospect and at first glance, it looks like a frustrated discourse about not getting any traction with potential customers for my business. However, I think the problem is a more fundamental one and the article stands true.

Whilst working for large organisations, I have found there is almost no trace of entrepreneurial spirit. The places I have worked have very much been in fire fighting mode, i.e. reactionary and cost cutting rather than proactive and risk taking.

In smaller businesses such as start-ups, I have helped a number of companies to solidify their business plans and technically evolve. I have found that the level of entrepreneurialism is still very high in these small early phase groups.


In my last role, I spoke to someone who had been at a large corporate since it had been a small entity (17 years) and they spoke of the glory days when the teams were dynamic, co-operation was instant and everyone had that entrepreneurial buzz. We both lamented the heavy process driven and un-cooperative nature of the current organization.

So at what point, does entrepreneurialism die out in a company?

Is it purely a matter of number of people? That was my first guess. However, on closer inspection I think not.

In my industry, which is IT contracting, either as a programmer, architect or IT manager, I am lucky enough to say, getting work is very easy. I could pick up a new contract in a matter of weeks or even days if I’m not too choosey. However, this time, I thought I’d approach the market differently. I am not in a rush to find a new role so I thought I’d market myself as an entrepreneurial manager. I used the same technical skills, same experience, same job / career history, but liberally adding the word entrepreneurial to my CV as well.

The response I got was a set of very confused recruitment agents, and no job offers.

Could it be then, then entrepreneurialism dies out once a company has stabilised itself. Once it is doing a particular service or building a particular product, the people do not need to think outside the box.

I expect the market place is sufficiently balanced to weed out companies that rest on their laurels too long, but perhaps if they all do, a status quo is reached and that only occasional changes have large effects on an industry. This would imply companies are not very dynamic unless faced with some level of crisis, when they get the entrepreneurs back in to figure it out.

So perhaps the entrepreneur starts up a company and puts the blue print in place. He then wheels in the mass of people to run the company and turn the handles. These people who form the body of the company do not recognise the spirit of the plan they are working to, only how to execute the plan.

This would explain why we did not gain much traction when discussing our products (see above link). These products were entrepreneurial ideas wrapped up in software pitched to people who are the doers, not the original entrepreneurs.

This would also explain why if I market myself as an entrepreneur no one is interested because they need more doers. The plan is there already, they don’t need someone to change it.

Therefore I think entrepreneurialism in its true form is un-marketable as no one can perceive the value in it. By their very nature, an entrepreneur has to create his own opportunity and not look to sell this skill in its raw form (or products which encapsulate the skill) to the market.

Of course, an entrepreneur may be hired by a start-up if they have a track record, but this only by other entrepreneurs to help in defining the blue print. Once the doer / worker starts executing the plan, they need other doers to delegate to and to help, not other entrepreneurs. Only in a crisis, the entrepreneur is needed again, but this probably falls back to the original entrepreneurs if they are still around and not a new one.

Hence my conclusion is that for an entrepreneur to enter the job and career market place, they have to become executers of other people’s plans and not entrepreneurs. Entrepreneurs have to metamorphosis their skills into their own products and services or become more specific in their offering. This then naturally channels itself as specialization of skills to solve a specific solution to a specific problem rather than entrepreneurialism at its core. So entrepreneurs cannot be employed as entrepreneurs, only as someone who has a solution to a problem. Which is to say not as an entrepreneur but as a standard worker.

The word entrepreneur in its raw form is too general and vague a term to be a saleable commodity.

 

 

 

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Bankers, the banking system and the press

Posted in Philosophy, The journey, tagged , , , , , , , , on July 2, 2012 | 1 Comment »

Bankers are getting bad press everywhere, even though it is relatively few bankers that have caused any problems and certainly no more deviousness and dishonesty than in media, sales and marketing, the unions,  politicians or the NHS or any other large institution, but never the less, bankers are the scape goats for the current monetary crisis. Most people who work in banks are hard working very decent honest people.

I know, because I have spent time working in a bank and that bank is Goldman’s, who get a lot of bad publicity and have done some questionable things in the wider picture. Everyone I ever met was during my time there, were the epitome of a decent moral person.

This current anti-banker storm, is just a convenient way of grouping people into the bad guys, just like racism, sexism or other ism. Perhaps we should call this bankerism, or professionism.

The clip published on the BBC, linked from their home page, shows Tony Robinson seething with hate for a group of people who he perceives has acted in a certain way. The BBC seems to take any opportunity to give publicity to anyone who is willing to knock the free market and banking system. I suspect this is because their control over British news and programming comes from an enforced fee structure that has nothing to do with free markets and the corporation exists solely because of the 2003 communications act and its enforcement by the law.

Source: Tony Robinson – BBC News 29th June 2012, linked from home page.

The point I am trying to make here, is that when things get tough, people get polarised. The rise of the extreme left and right in Europe both now and in the past shows this. We are getting more and more left wing, socialist media coverage because the banking problems have come from a system which they perceive to be predominately free market based. This is fed by the press, especially the BBC to further their revenue structure or sales.

Let’s take a step back and realise that the problem is not bankers. The problem is that we have short term goals in politics, short term goals in profit taking and short term thinking in general. We have no spiritual or moral guidance from our actors, media, political or business leaders. Our religions have declined to be no more than power structures and can only offer confused messages on a range of disparate topics and no longer reflect the times we live in.

It is our desires as individuals and loss of a spiritual grounding that needs fixing. Not the banking system. Fix the people in society and the society will run properly. Don’t listen to the venom of hate or take on other people’s frustration wherever you find it.

 

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