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ASIAMS.NET |
ASIAN AMERICAN ISSUES
Starting Your Own Business
(Updated
Tuesday, Apr 1, 2008, 05:56:09 PM)
hat's not to like? Tell off the boss, scrap the suits and ties, exit commuter hell, set your own hours and rake in the riches. Hell, if average joes like Charles Wang, Jerry Yang and Pehong Chen can bootstrap startups into billion-dollar companies, what's to stop a savvy, hardworking wiz kid like you?
Top AA entrepreneur
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That's precisely the thinking of the 913,000 Asian Americans who run their own businesses. As of 1997 (the most recent year for which census compilations are available) Asians made up 4.5% of all U.S. busiinesses. On a per capita basis AA are nearly twice as likely as other minorities to start a business. And they're doing well. Between 1992 and 1997 the revenues of Asian-owned firms jumped 68% to $307 billion, compared with a 40% growth for all U.S. businesses.
But commerce department stats show that most AA startups aren't of the fantasy variety. Only 32% had paid employees and only 2,100 (2.3%) had 100 or more employees. Maybe the most discouraging to prospective entrepreneurs: only 5% (45,300) of firms had gross receipts of $1 million or more. Far larger numbers (259,600 or 28%) had annual receipts of under $10,000.
AA businesses also don't fit the stereotypes of hi-tech garage startups or mom-and-pop grocery stores. The biggest share (44% versus 43% for all U.S. businesses) fall into the services category, with heaviest concentrations in business and personal services. The number two category is retail (21.4% versus 14% for all U.S. businesses), followed by "Not Classified" (10%), finance, insurance and real estate (8%), wholesale trade (6%), transportation, communications and utilities (4%), manufacturing (3%), construction (3%) and agricultural services (1%).
In terms of gross receipts, however, wholesale trade accounted for over a third of all receipts with $105.5 billion, followed by retail ($67.9 billion) and services ($67.8 billion) where a much larger share of the receipts survive to the bottom line. Asians own 5,634 law firms, 74,471 medical firms and 23,242 manufacturing firms. Of those, 1,676 companies with 33,616 employees were listed as manufacturing electronic and electric equipment. The glamour fields make up relatively small numbers. For example, listed under "motion pictures" are 4,338 AA firms with $49.5 million in sales. Of those only 1,622 had paid employees, 8,326 of them.
By nationality, Chinese Americans owned the most businesses (252,577), followed by Indo-Ams (166,737), Cor-Ams (135,571), Viet-Ams (97,764), Japanese-Ams (85,538), Fil-Ams (84,534) and other Asians (70,868). Revenues showed greater disparity: Chi-Ams ($106.2 bil), Indo-Ams ($67.5 bil), Cor-Ams ($45.9 bil), J-Ams ($43.7 bil.), Other Asians ($19.0 bil), Fil-Ams ($11.0 bil) and Viet-Ams ($9.3 bil).
All these stats are meaningless, of course, if not downright hazardous to those who risk life savings, good credit and a steady paycheck to launch themselves into trajectories that are always unique, perilous and non-reversible. In the end all that separates the eight tattered failures from the one gleaming success is a relentless will to pay whatever cost is demanded.
Is starting your own business really the best way to fulfull the American dream? What separates the sun-bleached carcasses lining the road to riches from those who arrive in air-conditioned style?
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WHAT YOU SAY
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1/2 Lost Soul,
If you read my original post, you will know that I am one of those people who aren't capable of working a 9 to 5 job. If I were, believe me, I would not have put myself through the nightmare juggling act of starting up businesses. I agree that if you are a good corporate soldier, you can do very well and have no business striking out on your own.
I don't even average $200K (that's profits to me) a year, that's just what I made in my two best years (out of about 12). My average for the past five years is probably more like $130K which I would have been making had I stayed on in my job. The difference is that I would have been working about 8-12 hours less each week and wouldn't have had to worry about anything except doing my job.
Serial Masochist
Saturday, August 03, 2002 at 22:32:18 (PDT)
I'm a half Japanese half American aspiring entrepenuer but can't quite figure out how to get my foot in the door of small business. I've worked in the mail order business for 7 years and wish to start my own designer wear store/mailorder company in the near future. The only startup capital I have to my name would be the two visa platinum cards I have which may or may not be sufficient funds to start a business...about $10,000. I have a pretty firm grasp of what I want to sell, to whom and for how much. I think there's a market for the merchandise I wish to sell because there are no competitors where I live in the Midwest. Is it possible to get started with $10,000? If not, are there any Asian American resources I can look to for information on acquiring proper funding for a small business? Thanks.
mech1
at_27@yahoo.com
Friday, August 02, 2002 at 14:48:50 (PDT)
AC,
This forum is somewhat off the mark. It should had been created a long time ago when America's economy was very robust. Why?
1)With the sagging economy now looming, starting a business is not really worthwhile.
2)Charles Wang's CA is being investigated for possible corporate fraud such as earning inflations.
3)The Technology sector of which many AA entrepreneurs have joined, is no longer a path to wealth.
Getting back to the small family business so favored among Chinese and Korean Americans is more like it, that is if you are already part of one.
LSD
Friday, August 02, 2002 at 10:05:43 (PDT)
1/2LostSoul,
Grossing 200K and having an income of 200K are two different things.
If your grossing 200K you will have very little left after expenses, salary, advertising, etc. in a business.
If your income is 200K, you can at least keep 60% after taxes.
In any event entrepuership is a lifestyle. I doubt any serious entrepuer thinks about employment.
Just like any serious career employee doesn't think about entrepuership.
AC Dropout
Friday, August 02, 2002 at 09:44:02 (PDT)
Serial Masochist,
If you are just making 200K or less, it would be better to be an employee? 200K is very reachable for a highly qualify employee (depending on the field, and the company).
1/2LostSoul
Friday, August 02, 2002 at 09:00:47 (PDT)
Serial Masochist,
Growth is important. But I'm curious how many years has this current operation been up and running?
Those growth numbers are pegged to maturity of business. At some point the market becomes the limiting factor.
Depending on what skills you are looking for I guess. You can always hire entry level people. Invest in them and over time that will just take over your responsibility. This way their income level will not be too great a burden in the beginning. And their income increases will be reflective of the amount of responsibility they can take on in the future as they mature in the company. The typical Stock Boy ---> Executive story.
AC Dropout
Thursday, August 01, 2002 at 12:01:33 (PDT)
AC,
My hope for growth was about 30-50% a year. That is about what most new businesses seem to do in my experience. I have been averaging only about 15-20%. I have not been able to delegate more than routine matters. Partly I am very anal but partly I have not been able to attract people in whom I have confidence for the more complex tasks. People like that seem to want to work for companies that are better established.
SOG,
You may have misread my earlier post. I said I changed businesses twice in the first 3 years after I became an entrepreneur. I folded my first business less than a year after I started it because I just couldn't generate enough sales to even pay for costs. Fortunately, I had already been involved part-time in another business that my brother had bought from another guy, so I just switched to that full time when he wanted to sell out and go back to working for a big company. About 20 months after that I folded the second one and started my current business. The second one was marginally profitable, but it was just too much work and there was very little prospect of ever getting above the subsistence level. I had misjudged its growth potential.
Serial Masochist
Wednesday, July 31, 2002 at 17:39:23 (PDT)
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