Once upon a time in a land not so far away, if you wanted to start a business, you had to choose a city in which to settle–not just for the business but for yourself. A lot of thought went into figuring out where to set up your new company’s home base. Delaware and Nevada, for example, have been popular choices because of its business friendly regulations and corporate tax laws. Once you got your central location up and running you could think about expanding to multiple locations or turning your company into a franchise.
Those days are over. Sure, there are some who prefer to build businesses traditionally, but today thanks to advancements in technology and the rise of the internet and the ability to receive and send money online, even internationally, people can start a company anywhere and operate it from anywhere else (provided local incorporation laws do not require a specific length of time spent on site).
Migrants have long moved to a new country for work, and then transferred funds home. This has been nearly completely those migrating from poor countries (or poor areas in the countries) to rich countries. Now individuals from rich countries are taking advantage of low cost countries to lower their living expenses while running most of your day to day from…just about anywhere.
Businesses Can’t Really Be Nomadic, Can They?
It’s true: not every business is suited to a nomadic lifestyle. Independent retail shops, for example: though it is possible to oversee basic operations from wherever you are, until you have a full support staff you are going to be needed onsite. Local service businesses that specialize in trades like contracting, plumbing, electrics, etc. Those are difficult to operate via telecommute. Most other companies, however, can be adapted to a global marketplace and base of operations fairly easily.
I traveled for 4 years in SE Asia while operating my business. During that time my brother took a year to travel around the world with his family while running his business. He visited clients during his travels which took him through Brazil, Turkey, South Africa, India, Singapore, Australia and more. We met up for a week in Bali. There are challenges but there are great rewards also for businesses that allow you to travel while you work.
Rice field opposite our bungalow in Ubud, Bali.
Which Businesses Are Best Suited to the Nomadic Lifestyle?
As previously stated, if you work hard enough at building your company and support team, you can run just about any sort of business from anywhere. That said, there are some companies and business types that lend themselves more easily to the nomadic lifestyle.
Chris Guillebeau covers a few of these businesses and the entrepreneurs who started them in his book, The $100 Startup. One entrepreneur, for example, runs a linguistics and translation business internationally. He loves languages and loves teaching so he moves from country to country, learning the local languages and then teaching them to tourists and expatriates who choose to move there. Guillebeau himself has turned his book into a tour, a conference (The World Domination Summit) and a series of Unconventional Guides. He travels all over the world and writes from wherever he happens to be at the time.
This chart shows that the percentage of millionaire families by highest education level is dramatically different by education level. The data is looking at USA family income for household headed by a person over 40. For high school dropouts, fewer than 1% are millionaires; all families it is about 5%; high school graduates about 6%; 4 year college degree about 22% and graduate or professional degree about 38%.
Interesting chart based on Federal Reserve data (via the Wall Street Journal)
While the costs of higher education in the USA have become crazy the evidence still suggests education is highly correlated to income. Numerous studies still show that the investment in education pays a high return. Of course, simple correlation isn’t sufficient to make that judgement but in other studies they have attempted to use more accurate measures of the value of education to life long earnings.
Related: The Time to Payback the Investment in a College Education in the USA Today is Nearly as Low as Ever, Surprisingly – Looking at the Value of Different College Degrees – Engineering Graduates Earned a Return on Their Investment In Education of 21%
The blog post with the chart, Why Wealth Inequality Is Way More Complicated Than Just Rich and Poor has other very interesting data. Go read the full post.
Average isn’t a very good measure for economic wealth data, is is skewed horribly by the extremely wealthy, median isn’t a perfect measure but it is much better. The post includes a chart of average wealth by age which is interesting though I think the $ amounts are largely worthless (due to average being so pointless). The interesting point is there is a pretty straight line climb to a maximum at 62 and then a decline that is about as rapid as the climb in wealth.
That decline is slow for a bit, dropping, but slowly until about 70 when it drops fairly quickly. It isn’t an amazing result but still interesting. It would be nice to see this with median levels and then averaged over a 20 year period. The chart they show tells the results for some point in time (it isn’t indicated) but doesn’t give you an idea if this is a consistent result over time or something special about the measurement at the time.
They also do have a chart showing absolute wealth data as median and average to show how distorted an average is. For example, median wealth for whites 55-64 and above 65 is about $280,000 and the average for both is about $1,000,000.
Related: Highest Paying Fields at Mid Career in USA: Engineering, Science and Math – Wealthiest 1% Continue Dramatic Gains Compared to Everyone Else – Correlation is Not Causation: “Fat is Catching” Theory Exposed
Finding new business and retaining existing customers is needed to sustain and grow a business. Gathering good customer data is important to helping increase sales.
Gathering customer data
Collecting customer data requires some effort- but it doesn’t have to be expensive. Here are some great sources you can use to collect data:
- Website Analytics: Your website may be the most common way customers interact with your business. Google Analytics, Piwik and other web site tracking software can provide a tremendous amount of detail about your website results. You can see which pages of your website generate the most traffic and can adjust your site’s design based on data to build your customer traffic.
- One of the most important measures of customer experience is repeat business. Gathering data on customer retention is a valuable measure of how successful the business is at meeting and exceeding customer expectations. In order to help improve that performance one valuable tool is to ask the simple question: “What one thing could we do better?” The questions is simple; creating a management system that takes that data and uses it to continually improve your value to customers is not nearly so easy.
- Gathering data on the experience your customers have is also important. There are many obvious frustration points customers face that any business should be able to identify. How easily can someone find an email address to contact your company? How quickly are matters resolved by email? Do you force customers to fight their way through phone menus instead of letting them talk to a person? How many customers hang up while being forced to waste their time fighting through your companies phone system? This is just a few examples, getting 10 such ideas for your company shouldn’t be hard.
Many companies instead of having measures customers care about, only have measures accountants care about – such as how much your phone center costs to run. That is fine, but you likely will waste most of your time worrying about collecting customer data if your organization isn’t interested about what the customer experiences. Those companies just are interested in taking as much money from customers as they can without concern for customers. In that case don’t bother pretending you care about customers, it is just a waste of time. Instead just focus on what your business model is and hope no company comes along that has a business model to treat customers well.
- Surveys can collect data from customers but the danger of relying on expressed desires rather than actions must always be remembered. SurveyMonkey is an easy to use tool that makes this process simple. You can create a short survey for free, then place the survey link on your website.
- Ad Responses: Online ads allow companies to easily collect data on customer responses. You can run several types of online ads, and see which ad generates the most clicks to your company website.
Use all of these tools to gather useful data while always remembering that customer data is only a proxy for understanding customers, and there is a gap between what is measured and reality.
Storing customer data
Because you use this data to meet your customer’s needs, the information is extremely valuable. Many businesses use internet security software to protect customer data. Every week it seems there is another high profile leak of customer data from hacked company servers. It is very important to isolate sensitive data and use cloud security system to reduce the risk of data loss.
Personas
Many companies use personas to target different customer segments they aim to capture. A business can use customer data to create an ideal customer ideal customer for specific products or services. And personas can help you target your web site to meet the differing needs of various target customers.
Using data to improve your organization’s performance is powerful. But the power is mainly from designing a management system that uses that data effectively. That is much harder than collecting data in the first place. Our management blog discusses how to use data to manage most effectively.
European government debt has been sold at negative interest rates recently. The United States Treasury has now come as close to that as possible with 0% 3 month T-bills in the latest auction.
The incredible policies that have created such loose credit has the world so flooded with money searching for somewhere to go that 0% is seen as attractive. This excess cash is dangerous. It is a condition that makes bubbles inflate.
Low interest rates are good for businesses seeking capital to invest. These super low rates for so long are almost certainly creating much more debt for no good purpose. And likely even very bad purposes since cash is so cheap.
One thing I didn’t realize until last month was that while the USA Federal Reserve stopped pouring additional capital into the markets by buying billions of dollars in government every month they are not taking the interest and maturing securities and reducing the massive balance sheet they have. They are actually reinvesting the interest (so in fact increasing the debt load they carry) and buying more debt anytime debt instruments they hold come due.
The Fed should stop buying even more debt than they already hold. They should not reinvest income they receive. They should reduce their balance sheet by at least $1,500,000,000,000 before they consider buying new debt.
Unless the failure to address too-big-to-fail actions (and systems that allow such action) results in another great depression threat. And if that happens again they should not take action until people responsible are sitting in jail without the possibly of bail. The last bailout just resulted in transferring billions of dollars from retires and other savers to the pockets of those creating the crisis. Doing that again when we knew that was fairly likely without changing the practices of the too-big-to-fail banks. But I would guess we will just bail them out while they sit in one of the many castles their actions at the too-big-to-fail banks bought them and big showered with more cash in the bailout from the next crisis.
How to invest in these difficult times is not an easy question to answer. I would put more money in stocks for yield (real estate investment trusts, drug companies, dividend aristocrats), I would also keep cash even if it yields 0% and actually a new category for me – peer to peer lending (which I will write about soon). Recently many dividend stocks have been sold off quite a bit (and then on top of that drug stocks sold off) so they are a much better buy today than 4 months ago. Still nothing is easy in what I see as a market with much more risk than normal.
I am almost never a fan of long term debt. I would avoid it nearly completely today (if not completely). For people that are retired and living off their dividends and interest I may have some long term debt but I would have much more in cash and short term assets (even with the very low yields). Peer to peer lending has risks but given what the fed has done to savers I would take that risk to get the larger yields. The main risk I worry about is the underwriting risk – the economic risks are fairly well known, but it is very hard to tell if the lender starts doing a poor job of underwriting.
Related: The Fed Should Raise the Fed Funds Rate – Too-Big-to-Fail Bank Created Great Recession Cost Average USA Households $50,000 to $120,000 – Buffett Calls on Bank CEOs and Boards to be Held Responsible – Historical Stock Returns