There is a new book out from the granddaughter of one of the surviving crewmembers of the Titanic. The giant luxury liner sank in the North Atlantic on its maiden voyage in 1912 after striking an iceberg. The new book, Good as Gold, claims that the vessel could have easily gone around the iceberg if it were not for a steering error. 

At the time, sailors were being trained in a new technology in ships. The way you changed the direction of a rudder in a steamship was different than the way you did it in a sailing vessel. In fact, it was the complete opposite. If you have ever operated a boat with a hand operated, rear-mounted engine, you know that if you want to go to the right, you pull the handle to the left. However, if you are operating an inboard motor with a steering wheel, you turn it to the right. So goes the confused steersman theory in Louise Patten’s book. When the iceberg was spotted, the command was to turn the boat to the starboard hard. The panicked steersman forgot he was turning a steamship and turned it to the port, directly into the giant chunk of ice.

This story may or may not be true. It has been 98 years since the tragedy of the Titanic happened and a lot of questions are circling around this new theory. But I do think it serves to remind us that decisions made in panic are often disastrous. We are living in very stressful times when people in business are more likely to react than to think through troubling news. With more and more layoffs happening each day, many people are looking for a new career. Many times that includes starting a new business. If you are thinking of a startup, there are some common questions you should be asking yourself.

1. How long will it be before I have paying customers? A very common failure among new business owners is to get the cart before the horse in terms of getting a customer base before you start spending money on employees. I had a startup come to me just a couple of years ago with three partners, five more guys they had hired and zero customers. Who was going to pay the employees? In a matter of weeks, they had laid off the five guys and tried it again. If you can get some contracts before you officially set up shop, good for you. In many cases, your old corporation will hire your new company to do your former job. They just need to get salaries and benefits off of their books, but still need the work done. Before you burn the bridge to your old boss, you may ask about becoming a subcontractor.

2. What is realistic financing? Running a business is expensive. These days, banks are reluctant to hand out money to startups the way they used to. Saving up one year’s salary is a good idea. However, if you find yourself out of a job and you get the itch to start something on your own, what’s a person to do? There are ways around hefty startup fees, like bartering your services for things that you need. This serves two purposes. The first is obvious, you get something you need and the provider gets your services in return. It also lets other business people know how good you really are. Let’s face it, those of us in business are inundated with salesmen trying to sell us the latest thing. (I must take two dozen calls a week from people wanting to stop by and show me their credit card services.) Business is a very "show me” kind of proposition. If you prove you do good work, I will likely refer you to someone else.

3. Who do I need to know? You need to find a good accountant and possibly an attorney. But my advice to you is to network like crazy. Get your name out to as many people as you can. Try to find a network that has some synergies with what you are doing. I know a mortgage broker, an insurance salesman, a real estate agent and a lawyer who have formed a network and pass business back and forth all of the time. Many tradesmen have been doing this for decades. Get to know people who are good for your business. Get close to them and stay up with them. It will pay dividends.

4. What about credit terms to my customers? Don’t get too far away from the money. If you are starting up and you are looking at customers who need 90 days to pay, just walk away. As a startup, you need to realize that certain clients just aren’t worth it. Unless you are starting a savings and loan, you don’t want to become the lender for your customers.

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Photo © Birgitte Magnus

Titanic Steering Error May Have Sank Ship Per New Book by Kate James, www. news.gather.com