Road Trip Lessons

Last week my lady and I took off to Carmel California for a few days of “head clearing,” and we decided to go north from Los Angeles by road. Road trips are always therapeutic for me and they also offer a chance to do some first hand, eyes-on research as to what small business owners are thinking and doing.

I think that every business owner and even the most senior corporate executives should drive around their communities or territories or maybe across the country if that is your marketplace. Most of us in business necessarily read a lot to keep up with trends and developments. Not only do we like to know what other businesses are doing, making those observations in person can simply be the best.

At 7:15am while filling up the car with gasoline, I got into a chat with the owner of the Union 76 station in my neighborhood. Even though the price of gas here had risen every day for the past 40 days, the gross margins for station operators hadn’t budged and was still hovering around 2 cents per gallon. Just like movie theatre operators, the gas guys and girls are looking to sell other things like food and drink where they can rejoice with bigger markups and afford to pay their rent. The net profit numbers of Exxon, Chevron and others grew to the sky as prices went up, but the service station operators have had to be very resourceful with merchandising to make it through.

Rolling up Interstate 5 and across #46 from Bakersfield to Paso Robles, I was impressed by two things. Whatever may be happening with family food budgets across the nation, the agriculture business in the middle of California seems to be running full tilt. The big trucks carrying produce were spreading their dust trails in all directions. The second eye-witness observation is that wineries have grown up around this state like the wage increases for public union employees. When I moved to California in 1977, there were fewer than 400 bonded wineries in the state. By 2007 there were over 2600! They are generally small businesses themselves, and I got a lesson in how their growth provides opportunities for other small operators. At a meal stop we met a man who operates a pipe and valve business in Modesto who has adopted a pretty good lifestyle due to the increased business from the new vintners.

The strangest small business I noticed along the way was based on the death and legend of actor and cult figure James Dean. He died September 30, 1955 along highway 46 (then known as 466) at the intersection of highway 41, near Cholame California. Dean’s film roles in “East of Eden,” “Giant,” and “Rebel Without a Cause” made him an instant deity upon his tragic death while driving his new Porsche Spyder to compete in a sports car race at Salinas. Today, a convenience store near that intersection does a brisk business in James Dean souvenirs—nearly fifty four years later! So much for the people who say that you have to have the newest, trendiest thing to turn a buck. It left me wishing that I had a product that could sell to a cultish group of fans.

At our destination, the town of Carmel-by-the-Sea itself, there was a major municipal business lesson for towns wanting to attract a crowd at the affluent end of the tourist market. There are no parking meters or signs that say no parking on this side of the street between noon and two. There don’t seem to be any high rise hotels or sprawling condo developments either. Blissfully, I didn’t see any tee-shirt or flip flop shops anywhere near their central shopping district which has high end shops and galleries by the dozens. The lesson is that to attract people who will spend with the town’s merchants, you don’t have to make it cheap. You do need to make it easy, pretty and comfortable. The Tickle Pink Inn and Highlands Inn are just two examples.

I highly recommend that if you are even thinking of starting or growing a business, get out a map and plan a road trip. Don’t schedule it too tightly so that you have lots of time to wander and pause to talk with business owners and their customers. They are the best focus group for what you want to do. Toss that point and shoot digital camera into your pocket to record some of what you observe. I promise that if you let your curiosity be your guide it will an enjoyable, educational and probably inspiring trip.


Be sure to check out www.MakingItTV.com for a comprehensive collection of resources for entrepreneurial thinkers and small business including streaming video, articles, events & workshops, entrepreneur confessions, Q&A, and more!

There's Something Happening Here

While enjoying a Saturday night social gathering this past weekend, a great conversation regarding our favorite concerts and performers struck a chord with me regarding today’s tidal wave of business events. It is well described by the lyrics of a 1967 pop music hit from Buffalo Springfield, “For What Its Worth,” written by Stephen Stills.

“I think it's time we stop, hey, what's that soundEverybody look what's going down.”

General Motors, the most iconic United States business enterprise of the 20th Century, was finally swamped by the numbers and declared bankruptcy on June 1st. Events this large don’t just develop in a matter of months but generally have their roots in decisions made long ago by people who have left the stage.

The business that substantially helped create a way up to the middle class for thousands of industrial workers was eventually dragged down by the costs of having thousands of people on and off the payroll who clung to the notion that it was GM’s responsibility to keep them in the middle class, regardless of market conditions.

“There's something happening hereWhat it is ain't exactly clear.”

I believe in capitalism as fervently as I believe that sunshine and flowers make the world a prettier place. But it seems that defending capitalism these days is a tough job. Yes, I believe that the system must have stronger oversight because simple uncontrolled greed will always create problems that can destabilize the economy. However, the Obama administration’s level of Federal financial activism, unprecedented in modern times, is changing the game in the banking and automotive sectors. But the same fundamental and immutable laws of commerce that dropped a rock on General Motors will eventually visit the government’s “socio-capitalist” hybrid that is being created right before our startled eyes.

“Paranoia strikes deepInto your life it will creep”

As a child I clearly remember the cold war battle of words between the United States and The Soviet Union. We were the world’s largest economy thriving on international business and reaping the rewards of having hard worked our way up to the highest levels of prosperity. We deserved the throne as kings and queens of capitalism. Those collectivists, communist Russians, were painted as a country that didn’t know how the world really operated, and they were paying the price with a drab lower class style of national life. Their premier, Nikita Khrushchev, famously said to capitalist states, “Whether you like it or not, history is on our side. We will bury you!" Their government directly owned many of the biggest businesses and capitalism was suspect or even banned.

Sometimes today I have to rub my eyes in disbelief as I read about the major stakes our government is taking in some of the biggest businesses under the cover of saving them. Is this a form of George Orwell’s predicted “Big Brother” scenario or a page from “The Communist Manifesto” written by Karl Marx? How things have changed in fifty years!

“There's battle lines being drawnNobody's right if everybody's wrong”

We also know from reading even a small amount of history that governments tend to overcompensate with a rather heavy hand. Here, in Los Angeles County California, we are down to just 14 of America’s Fortune 500 companies now. This morning I read about dialysis clinic operator, DaVita Inc., announcing a move from L.A. to Colorado because of an anti business atmosphere. Sometimes I wish that every newly elected official had to spend the first sixty days of their term in economics and business courses. They’d quickly understand that government can only remain solvent by helping to create conditions that support a healthy business community. This law is just as concrete as those legislated against heinous crimes.

“A thousand people in the streetSinging songs and carrying signsMostly say, hooray for our side”

This really doesn’t need to be a battle between the private and public sectors because sound business principles will prevail in the long term. You know them; something of value must be created, marketed and sold. Governments ride on the coattails of those who create. Despite many contrary attempts, the principle that governments can’t tax their way to prosperity has been proven.

Entrepreneurs engaged in enterprises of all sizes simply want to thrive and grow. Yes, the most ambitious among them can secretly yearn for a totally unfettered monopoly in their category, but even they realize there is a role for government regulations. They just want those rules to be clear, and have a steady hand that rests with a light touch on the tiller.

Be sure to check out www.MakingItTV.com for a comprehensive collection of resources for entrepreneurial thinkers and small business including streaming video, articles, events & workshops, entrepreneur confessions, Q&A, and more!