Sometime ago, I met with several people who were in training to become entrepreneurs or small business owners. Following discussions with them, I realized the extent to which the world of work, as we have known it, has radically changed.

In the old work world, large companies were perceived as social welfare providers, supplying jobs to citizens. Now, they are viewed as job destroyers. Moreover, thousands of workers are being scratched from government payrolls as well. Both the state and large companies are disengaging from their previous social welfare roles.

To avoid a crisis without precedent, the governing elites are trying to convince citizens to become more autonomous and to become entrepreneurs: This would relieve government from spending for social security programs and would also provide companies with the customers they need but are reluctant to create anymore.

Is it possible to change a large portion of the working force into independent entrepreneurs without making them middle-age itinerants?

According to some recent statistics from Canon Corporation and the American Association. of Home-Based Businesses, more than 46 million Americans now work full- or part-time in home-based businesses. Their average age is 48, and their average 1995 yearly gross income was $34,500. Why did these Americans opt to start home-based businesses?

Here are some of the reasons they gave:

Desire for independence -- 69%
Income opportunity -- 38%
Didn't like large company -- 33%
Needed a change -- 30%
Had a great idea -- 25%
Were downsized out of an existing job -- 20%

These numbers, particularly the average age, lead me to conclude that qualified and experienced people are not greatly interested in trying to fulfill themselves in conventional jobs that mean being under the direction of another person. In addition, the average income reported by persons with home-based businesses suggests that it is not the American dream that makes these people seek autonomy and entrepreneurial opportunities. It must be something else.

Many of us are now using communication tools such as cable television, modems, additional telephone services, interactive TV, electronic mail, and the Internet at home. The explosion of information available at home changes the rules of the game and allows independent entrepreneurs to compete advantageously with large companies. The stakes are high in terms of market and quality of service because the leading segment of the work force is or will become autonomous.

Let us go back on the issue of whether large numbers of people will be transformed into middle-age itinerants and how this can be prevented. The success or failure of such a social revolution brings up the question of the training necessary for persons who want to become successful independent entrepreneurs. In my judgment, here are five major challenges that independent entrepreneurs are facing:

To use a business plan
In practice, the business plan has three purposes: 1) to please government agencies that require it for subsidies or for startup support, 2) to obtain monetary assistance from financial institutions, and 3) to provide objectives and a frame of action for the entrepreneur. When the first two are no longer required, entrepreneurs need not feel bound by their business plans. A business plan should not be a straight-jacket, but only a starting point, providing initial direction from which one can deviate as market conditions change or with the emergence of new business opportunities.

To offer a product or service that is changeable, adaptable, ad-hoc, or tailor-made
In the new economy, companies cannot afford to maintain their positions by offering product lines that cannot be alterable without major efforts and massive capital. Markets are so unstable, consumers so unpredictable, that a company has no other choice but to improve its products and develop new ones to stay in business. The software industry saw hundreds of companies collapse because they did not adapt to change. Independent entrepreneurs can more easily respond to small, highly specialized markets and can be more flexible, changing direction more quickly than large conventional companies. The new economy offers many opportunities for independent entrepreneurs.

To know basic marketing principles and sales techniques
Even with the best marketing strategy, it is necessary to know basic sales techniques in order to successfully market a product or service. This means that on top of a marketing strategy, the entrepreneur must be able to close a sale directly with the client. Failure to do this will destroy the business. Avoid counseling on marketing strategies from people who have never started a business themselves. For instance, career teachers or governments employees probably know only the theory. Nothing is worth more to independent entrepreneurs than advice based on practical experience in marketing and sales.

To learn the basic principles of accounting
For all active companies, the struggle for survival relies on this simple accounting principle: revenues must be superior to spending over a certain period of time. The autonomous worker must know the mechanics of accounting and always have in his mind a clear picture of his/her financial position. As far as I'm concerned, the worst resources to go to in this area are a bank's representatives. Their counseling is often a pretext for financial analysis finding out if a loan or a credit margin can be sold. Instead, entrepreneur should review their financial positions with independent accountants or analysts. As the founder of Quebecor, a major Canadian company, has said, "The banks shall be treated as suppliers!"

To get away from the employee-worker mentality
Many people still believe that methods for obtaining high performance that were developed in the industrial world must necessarily apply to independent entrepreneurs. For instance, some insist on maintaining rigid regular work hours at home, even though the independent entrepreneur has complete control over his/her time. A truly independent entrepreneur need not impose the old industrial 9 to 5 concept on him or herself, but, instead, can use time as a flexible resource.

These challenges for the independent entrepreneur are nothing compared to what governments and large companies are likely to face in determining the eventual success or failure of the workforce metamorphosis. They will have to cope with a new social reality in which their own role will be diminished.

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