It is often said that “a consultant’s job is to solve unanswerable questions.
I am currently working for a so-called “Big Four” consulting firm. It has been about six years since I jumped into this world from a different industry. At first, I was overwhelmed by the sharpness of logical thinking, but now, when I encounter a “difficult problem that cannot be solved,” my intellectual curiosity is rather stimulated.
It was several years ago that I started my own corporation as a personal experiment, separate from my client work.
I did not have a particularly noble vision. I wanted to understand how capitalism works at my own expense. It was such a simple motivation.
However, what I keenly felt when I actually created the “box” of a corporation was the cruel asymmetry between “starting a business (creating the box)” and “doing business (creating the contents).
As an introduction to the Private Business category, this issue will provide a life-size record of what I feel and struggle with in this private laboratory.
Entrepreneurship has become a commodity.
Let’s start with the facts.
It is surprisingly easy to form a corporation in Japan.
When I first considered establishing a company, the first thing I did was the typical research: “Corporation or Limited Liability Company?
A quick Google search would provide endless comparative information on the differences in incorporation costs (about 200,000-250,000 yen for a joint stock company and about 60,000-100,000 yen for a limited liability company), differences in social credibility, the obligation to publicly announce financial statements, and so on.
Since my objective was to manage my own assets and operate a small business, I focused on cost performance and speed of decision making and came to my own conclusions.
The procedure itself can now be completed online. Articles of Incorporation are drawn up, certified by a notary public (not required for a limited liability company), and an application for registration is filed with the Legal Affairs Bureau.
All of this is “work” and does not require a high level of judgment or creativity.
The Survival Rate Number Trap
People often say that the survival rate for starting a business is low, but statistics change the landscape a bit.
According to one survey, the survival rate after 5 years of starting a business in Japan is about 81.7%. This is a high level compared to Europe and the United States.
However, it is too early to conclude that it is easy to stay in business in Japan.
The low rate of business closures in Japan (about 3-4%) merely suggests that there are many so-called dormant or low-flying firms languishing in the country that are “not making money but not going out of business.
This is exactly what I was faced with.
It is easy to build a “box.” It is not difficult to build a “box” and keep it from collapsing (as long as it does not run at a loss).
The only thing that is really difficult is to use the box and continue to generate profits.
Consultants fall into a “business vacuum”
After incorporation, I began to pack up some of my business (i.e., the contents of the box).
- Real estate and financial investments: This has a strong “asset management” aspect and is a kind of unearned income, but it depends on market conditions.
- SNS business: Media building through information dissemination.
- Product sales business (Amazon sales): actual business of purchasing, stocking, and selling products.
- Kindle Publishing: Capitalize on your own knowledge (blog posts, etc.).
What is interesting here is the gap with my core business of consulting.
As a consultant, I propose “strategies” and “what they should be” to my clients. There is logic and a beautiful framework.
However, in my own business (especially in product sales and social networking), I encounter many situations where that “beauty” does not work.
Logically correct products” do not always sell.
Articles with “perfect SEO” are not always read.
A single change in Amazon’s algorithm can make what was right yesterday wrong today.
In particular, the weight of “inventory risk” and “cash flow” in the merchandise sales business was a muddy reality that could never be understood just by moving numbers around on a PowerPoint presentation.
Private Wisdom Lesson: What It Means to Have a Quiet Laboratory
In recent years, the consulting industry has seen an increase in the mobility of human resources, and an increasing number of people are seeking side jobs and parallel careers.
In this context, if I were to single out the significance of owning my own corporation, it would be that I can have my own laboratory.
You don’t need anyone’s approval. No budget constraints (as long as your wallet allows).
If you succeed, you take credit; if you fail, you suffer.
This tingling “purity of self-responsibility” is a kind of “Quiet Luxury” for adult businesspeople.
Profit is the most demanding discipline
As a corporation, it must make a profit (Profit).
This is not out of greed, but because profit is the only proof that the market recognizes that the business has value.
I often hear people say, “I want to start a business,” and if that’s what you’re going for, I’d like to ask you this: “What kind of box do you want to build?
“What kind of box do you want to build?” but rather, ” What value will you provide to whom with that box, and how will you get paid in profit? ” I would say, “What kind of box do you want to build?
Conclusion: The Future of Private Business
My corporation is not yet large enough to speak highly of itself.
We are on the defensive with real estate and finance, and on the offensive with product sales and information dissemination. In this balance, we are repeating small failures and corrections every day.
From now on, in this “Private Business” category, I will be writing about specific data I have obtained in this laboratory, stories of failure, and “principles of commerce” analyzed from a consultant’s perspective.
It will be a record that smells of sweat and numbers, a little different from the usual elegant articles of “Private Wisdom,” such as the process of Kindle publishing and the behind-the-scenes of Amazon merchandising.
We hope that they will serve as a small but practical “wisdom” for readers who wish to “stand on their own feet” as well.
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