YOUR OWN PORTFOLIO
One of my large clients owned several companies. I admired the industry he created and always looked forward to renewing our business relationship each year. I was selling financial services, representing a large broker. I remember one year when after concluding negotiations. Howard, the owner, told me that I should expand my thinking about business. I did not always have to just make money for someone else, I could develop my own portfolio. Business that would be mine regardless of what happened in the market. It was good advice.
The wisdom of his thoughts would prove out over and over again as I moved through my business career. The most successful business people, ones I admired the most, developed a side business. A portfolio outside the market swings of their main career.
Here are a few stories of portfolio hero’s I have known.
The Sailor. Del did construction work, but the seasonality of it and swings caused by the economy troubled him. He managed to scrape enough money together to buy an aging schooner. He had learned to sail in the Navy. His seaman skills, the classic boat and Del’s Hemingway looks attracted attention in the marinas around Puget Sound. Soon other boaters were asking him to move their boat to places they plan to vacation. As the wealth of these mariners increased, their boats got larger and ports more far flung. It all worked well as a side business for Del when construction jobs were scarce. I remember sitting on his boat with a cup of coffee and listening to his seafaring adventures.
The Abstract Painter. There were wide swings to Art’s business career. He once owned a large Chinese restaurant only to lose it in financial reversals. He remained as manager of the restaurant, a link to Asian history and the personality of the place. Everyone knew him and often ask him to order for them. On the walls of the restaurant hung Art’s other passion, large abstract paintings. People liked Art and wanted his bright colorful paintings. Soon he began selling them, bringing in several thousand each. He would have art showings at his home, always attracting his restaurant clients who considered him a friend. His reputation as a painter spread over time and he became sought after by local galleries.
The Rider of Motorcycles. Randy labored as a mechanic during the week. On weekends, he rode his Harley on desert back roads. He loved to find old Harleys and restore them. He read an article how collectors in Japan loved classic Harley Davidson motorcycles. With the help of a friend who did export work, he identified the just right contacts. Soon he sold his first restored bike. It was the start of a lucrative side business. One made more interesting by the quality of his restorations and scarcity of his work. He only restores a few a year, each highly sought after by collectors.
The Chef. Joe grew up in Oregon. He made his living working on fishing boats in Alaska during the summer. His passion though remained in the rich valleys of Oregon. He learned how Alaska natives treated salmon with reverence and knew special ways of preparing it. During the winter he would return to Oregon. With his Alaska knowledge gained, he started to produce specialty salmon products that he would hand out to friends. His reputation grew and along with it the start of a side business. Joe slowly began a small food processing company, adding other specialty products over time. It still flourishes today and has grown into a farm to table operation.
The Collector of Property. Willie worked for as a supervisor for a drywall company. His work took him to many parts of the city. He had a front row seat to areas that were being redeveloped. In each of these areas, he would buy a small house which he turned into a rental. Occasionally, he would run into a cash flow challenge. He once came to me for solutions, bringing in a simple financial statement he prepared. I took one look at it and could only say,” You’re a wealthy man Willie.” It listed 15 properties he owned, free and clear at the prices he had paid for them. I told him a bank who understood this would be happy to loan him money and even send a car to pick him up. And that is what they did.
The Café Owner. I labored each day in the brokerage market. There were 33 other brokers. One was Bill who returned each day after lunch with a simple black bag that looked stuffed. I learned later that it contained the cash receipts from a small café he owned on the side in the city’s historic market place. The original owner of the café was Bill’s client. When the café owner retired, Bill bought it knowing it was a profitable business with an established crew of employees and good clientele. It led to a stream of side income that is still flowing.
The Writer. Eric worked for a scientific firm. In his free time, he loved to write. Like many authors, he was frustrated by the lack of publishing opportunities. He decided to start a small publishing company on the side that would produce short runs of books using inexpensive press techniques and materials. He kept the operation simple and one he could do after work and on weekends. Initially, he used his own work and the writing of a few friends. The equipment and binding machines he used were old but produced books with an artful look. Soon his books were showing up in small gift and art boutiques. As his following increased, other authors began contracting with him to publish their books. Eric continued working at his day job, often with a bigger smile. He knew that his side business of publishing was growing both his income and life satisfaction.
I have observed that people successful in building their own portfolio have certain qualities.
- They make the most of their business contacts.
- They choose pursuits they could own.
- They are wary of “gig” enterprises where you don’t really own or control what you do.
- They choose pursuits they had passion for.
- They were willing to put in the extra time.
They slowly nurtured these opportunities into a growing business, sometimes becoming their main business at some point.
Not all side portfolios have to make money. They can just be a stake in the ground for your passion and maybe a business later. Pursuits that fill one’s soul. Ones they can always go to no matter what storms are happening in your career.
Although I have been successful in short term side businesses. I confess that I have never fully found the perfect long-term side business for myself. However, I continue to observe, learn and explore. After all its never too late and 2019 is a new year…