Taking Care of Business with Rich Solomon, Ep #20
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Today’s guest, Rich Solomon, is an attorney, author, and public speaker that runs a local radio station in New York. In this episode of Upthinking Finance™, we build on last week’s episode with Sunil Dovedy and cover the practical aspects of starting a business. What are the common roadblocks? Why do partnerships seemingly always fail? How do you keep viable businesses alive? Rich shares how his “reality check” conversations with aspiring entrepreneurs help them build stronger businesses. Don’t miss this episode!
You will want to hear this episode if you are interested in...
- [1:48] Common roadblocks to starting a business
- [6:43] The reason(s) partnerships rarely work out
- [9:00] Facing challenges topples many businesses
- [14:28] Rich’s “Reality check” conversations
- [22:11] Adapt to keep viable businesses alive
- [29:05] The dynamics of family-owned businesses
- [35:25] People desire the personalization of business
- [38:14] Learn all about Rich’s radio show
Common roadblocks to starting a business
Are you a solopreneur? Or will you be forming a partnership or working with a group of people? Someone’s answer to this question will change the entire dynamic of how a business works. As soon as multiple people are involved, there is inherent conflict. There is always an imbalance of work, money, and contributions. Everyone believes what they bring to the table is more important than someone else’s contribution.
You have to make sure that everyone has realistic expectations about the starting point and what happens moving forward. People have different perceptions of when they work, how much they work, etc. So the business dynamic is the #1 thing that needs to be nailed down.
Rich will also challenge the feasibility of their idea. What is the competition? How much market saturation is there? How many similar names are there? He’ll ask for their marketing plan, marketing budget, branding, differentiation, etc. Are they too niche or under-specialized? You have to flesh out the expectations.
Facing challenges topples many businesses
Look at the businesses that didn’t survive Covid that were sound beforehand. Covid stressed their business model in ways they never thought of. Restaurants had to switch to takeout. Or they realized they were too labor intensive. Their business foundation was upended.
Regulation changes can also shake up businesses. Rich had a friend that was a private eye. But when his industry was forced to work under a private detective and get licensed, it killed it completely. When Covid hit, per diem lawyers were no longer needed and the industry was wiped out overnight.
These factors are stressors that bring out the worst in people. They move to firing people, buying cheaper products, cutting hours, etc. It impacts the quality, your branding, and your traffic. This causes a death spiral and friction between owners. If you were stranded on an island and asked to survive, would you be able to work together under stressful conditions?
You have to overcome jealousy, anger, laziness, cutting corners, and other things people do not want to face. It’s hard to be in business. It requires sacrifice. Many people aren’t prepared for that.
Rich’s “Reality check” conversations
Rich will cross-examine people’s ideas to make sure they’ve done their research. He asks question after question to dive into their business plan and the steps they’ll take when things go awry. If he thinks someone’s business won’t work, he will tell them.
Because of this, he won’t charge them for their first consultation to avoid any bitterness. People tend to be dazed if he hits them with this news. But they’ll think things over, shift their idea(s), or rework their business plan.
Rich truly believes that if he simply rubber-stamps someone’s idea, he’s doing them a disservice. You have to run a pressure test in simulations, as opposed to real live businesses with people depending on the success. You will get a rough education and have to learn from it.
People desire the genuine personalization of business
People still hunger for human connection. You can start business relationships by building trust, awareness, and confidence. People go to the same stores and buy from the same restaurants because they’ve built a level of trust, comfort, familiarity, etc. Rich advises moving away from the impersonal nature of texting and email as much as you possibly can. Hearing the inflection of someone’s voice can make a huge difference.
Rich Solomon is not affiliated with or endorsed by LPL Financial or Capital Investment Advisers.
Securities and Advisory services offered through LPL Financial. A registered investment advisor. Member FINRA & SIPC.
The financial professionals associated with LPL Financial may discuss and/or transact business only with residents of the states in which they are properly registered or licensed. No offers may be made or accepted from any resident of any other state.
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