May 4, 2011
[Editor’s note: Tim Staermose is filling in for Simon Black today. ]
My wife just celebrated her 35th birthday. If you ask me, she doesn’t look a day over 25. She may be quiet and angelic, and not much more than 5 feet tall. But she’s a strong and determined woman with a lot of street smarts.
Among other things, she is an accomplished Muay Thai fighter, and a kickboxer. She has a blue belt in Karate and a white belt in the Filipino martial art called arnis. She also knows how to handle a firearm.
She’s also handled very admirably being married to a guy like me who spends his entire time analyzing businesses and deciding how to best deploy capital to earn the maximum possible return, and ADVISING others on how to do that. That’s an achievement in itself!
You see, she’s always been interested in running her own business. But any time she had an idea, I’d shoot it down, saying it would be too much hard work, and involve too much risk and uncertainty.
“If you want to make a great return on your investment capital, why don’t you just buy shares in XYZ and sit back and watch the company do all the hard work and compound your money for you,” I’d tell her.
Finally, she’d had enough. One day last year over a nice lunch out by the pool at our hotel in Hong Kong, she told me, “I’ve agreed to buy a business.
But I need some more money to pay for it.”
She mentioned a figure of about $11,500.
“WHOA! I said. You can’t just do that without consulting me.”
After I’d calmed down, though, I thought to myself, “Well. How bad can it be?”
All the investing lessons I’ve learnt over the years cost me money, too. It’s the only proper way to learn — with REAL MONEY on the line. I figured even if it all went wrong, it’d be a valuable lesson for her.
So I said to her, “Here’s what we’ll do. I’ll sell your San Miguel Brewery shares (a great money-compounding machine here in the Philippines, believe me); I’ll give you the money, and you can use that. But I bet you, down the track, you’ll wish you hadn’t done it.”
Over the ensuing months, she got to work on the business she’d agreed to buy, which was the rights to a small hotel on a popular surf beach in The Philippines.
She completely renovated it, built sound insulating walls around it to keep out the noise from nearby karaoke venues, which had been giving the previous owner a lot of grief, and set about sourcing new beds, mattresses, linens, and towels, and other equipment.
She did much of the legwork herself, shopped around, and made frequent trips to oversee the construction first hand.
Way too much hard work for me. But, she was quite happy to roll up her sleeves.
All the while, she kept me well away from it, and basically out of the loop.
“You’ll just over-analyze everything and shoot down my ideas,” she said.
She’s right. That’s my nature. I can’t help worrying about all the little things that can go wrong. And I’m always thinking in terms of opportunity costs. That’s why I would never spend my own time on some of the simple tasks required in overseeing a business like this.
After lots of hard work, and some trials and tribulations, I’m happy to report that over Easter, my wife opened her boutique hotel business to a packed house.
She’s still very hands on. And I’ve not seen her for quite some time, since she’s away taking care of business. But, she’s a fast-learner.
She’s already fired two staff members for being lazy and indolent! And she’s training everyone up so that they can, hopefully, look after the place when we’re away in Hong Kong for a month, beginning next week.
It’s still a work in progress. And whether the ultimate return on my wife’s capital, time and effort beats San Miguel Brewery (which, incidentally, has nearly tripled in price since I sold her stock) remains to be seen. But, honestly, I’m proud of what she’s achieved.
And I think there’s a great lesson in this for us all. Sometimes, in business, you just have to take the leap and DO IT!
If you worry about all the things that may or may not go wrong, you become like a deer frozen in the headlights.
“Paralysis by analysis” is how I sometimes describe what happens to me when I think about going into a start-up business venture.
I’ve written before that not everyone is suited to being an entrepreneur or business OWNER. We all have our own personalities, strengths, and weaknesses.
But, if you can find a partner who complements what you have to offer, you can still achieve great things together.
In my case, I had investment capital. My wife had the get-up-and-go to have a crack at something she was passionate about. And something good has come out of that mix.
But, there’s also another lesson here.
Tragically, my wife’s father died before she’d even reached her teens. That left her mother — another strong and determined woman — to singlehandedly bring up a large family. As a result, my wife was denied a college education.
But remember what I said about her having street smarts? In business, that’s often MORE important than some fancy degree.
You can always outsource things like accounting and management functions. But to the be the driving force in the engine room, or the visionary, if you prefer that term, does not require lots of letters after your name.
So, if you’re someone who’s not got any fancy educational credentials, please do not let that deter you from pursuing your passions in business, whether at home, or abroad.
Just get out there and DO IT.